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Regular City Council Meeting Monday,November 5, 2018 Page 6 b. Adopt the 2019 Utility Rates Finance Director Chris Miller briefly highlighted this item as detailed in the RCA and related attachments dated November 5, 2018. Council Discussion Councilmember Etten noted on pages 2 and 3 of the RCA, the interest earnings are expected to be at zero. He wondered if the City was holding a lot less cash going into 2019 versus 2018. Mr. Miller stated that was correct. The City has stayed aggressive in trying to re- place the assets and the infrastructure at the optimal time. That has not allowed the City to build up a lot of reserve. Things start to look better a couple of years out and will improve after that. Mayor Roe stated on page 2 there is information on lower water consumption and it reflects both the fact of less costs as well as not as much revenue. But on page 3 in the middle paragraph, there is information about what is considered in the Metropolitan Council's rate increase was higher waste water flows and these are sanitary sewer waste water flows which should be coming from water out of fau- cets which he was curious about. Public Works Director Marc Culver stated this is an industry norm across the Metro area, as far as a decrease in water usage. It comes down to inflow and in- filtration and the age of the pipes in the City along with illegal connection of sump pump connections. He noted cracks in the pipes of the sanitary sewer are allowing ground water to get in and the more rain water the City has in a particu- lar year, the higher that is going to be. He stated the City has made great progress in lining the pipes and will be trying to find the illegal sump pump connections to reduce that as well. He expects to see that number go down, noting 2017 was a very wet year and the Met Council also fixed a very large known inflow source as well. He stated the combination of those two things had made the costs increase but he expects those costs to go down going forward. Mayor Roe stated in the past there was a program where the City received a pen- alty for inflow and infiltration from the Met Council, but the City did not need to send the penalty to the Met Council if the money was put towards improvements to the inflow and infiltration. He wondered if that program was still in place. Mr. Culver believed the City had gotten out of the penalty phase of that program, but the Met Council still has that program. Councilmember McGehee stated reading through the Comprehensive Plan, it looked like staff had narrowed the issues down and were able to find them.