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REQUEST FOR COUNCIL ACTION Date:April 24, 2023 Item No.:10.b Department ApprovalCity Manager Approval Item Description:Saint Paul Regional Water System (SPRWS) Contract Amendment No. 3 1 B ACKGROUND 2 Saint Paul Regional Water System (SPRWS) has supplied water to the City of Roseville since the 3 City installed a water system in 1962. The current contract with SPRWS was adopted in 2005 with 4 amendments done in 2013 and 2017 to revise water charges. Similar to previous amendments, the 5 proposed Amendment No.3 (Attachment B) would revise the water rate charges. This is based on a 6 Cost of Services Study that SPRWS completesevery 5 years. The City hired AE2S, a consultant,to 7 review the study and confirm the cost of services charged to the City are fair. As staff discussed 8 with the Council last fallduring utility rate discussion, the big cost increases are related to major 9 water plant work that SPRWS has ongoing that benefits the city. 10 The proposed amendment sets new monthly base rates and water volume charges to the City that 11 increases annually through 2027. The agreement expires in 2027 at which time a new agreement,or 12 another amendment,will need to be made. 13 The City Attorney has reviewed the amendment. 14 P OLICY O BJECTIVE 15 It is City policy to keep City-owned infrastructure in good operating condition and to keep systems 16 operating in a safe condition. 17 B UDGET I MPLICATIONS 18 Under the current agreement, the City’s base rate charge is $54,000.00 per month and the 19 consumption charge is $2.20 per 100 Cubic Feet(CF). Based on the proposed amendment, the new 20 water rate, retroactive to January 1, 2023,will be $64,600per month and increase annuallyas shown 21 in the agreement. The water volume charge is based on 60% of the retail charge. For 2023,the new 22 rate will be $2.22 per 100 CF. 23 Last fall, the City built in rate increases to the water rate charged to Roseville residents and 24 businesses to reflect these increases. The analysis used to determine that rate increase was based on 25 SPRWS’spreliminary Cost of Services study from September 2022. The proposed amendmentis 26 based on the final SPRWS study completed in March 2023. The final study indicated the charges to 27 the City will be slightly less than anticipated and as shown in the table below: 2023 Amendment Monthly Base Costs202220232024202520262027 Preliminary Study$60,100 $65,800 $72,100 $77,800 $81,700 $85,800 Final Study$59,000 $64,600 $69,100 $74,000 $77,700 $81,500 Page 1of 2