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Attachment E. ----- Forwarded Message ----- From: "dan roe" <dan.roe@comcast.net> To: "bill malinen" <bill.malinen@ci.roseville.mn.us> Sent: Tuesday, February 24, 2009 5:49:32 PM GMT -06:00 US/Canada Central Subject: Water rate structure Bill, As I reflected on Senator Marty's letter and attachment, as well as my thoughts on the issue, a couple of conclusions came to mind: First, I think we should, as a policy matter, target more than only 10- 150 of residential water users for higher rates under our rate structure. We should target all of the above-average users with the increased rates. Then, over time we should, as the average continues to (hopefully) decrease with usage, look at decreasing the break point in our rate structure. Second, I think it IS unfair that a small number of high users actually pay less in total in 2009 under the new rate structure than in 2008 (for the same usage). That is because we are trying to collect more $$ overall to cover predicted infrastructure costs, and all should participate in that. Finally, in order to achieve the 2 objectives above, the math tells me that we should look at a break-point of 20,000 gallons/quarter rather than 30,000. (Closer to the average of 22,000.) We should also, on the basis of having all users pay at least about 5o more in order to be fair, change the upper tier winter rate from $2.00/1000 gallons to $2.40. The summer rate can still be a 10o premium on that rate, or $2.65/1000 gallons. As I run a couple of examples on this basis, the total amount paid by users in 2009 versus 2008 goes up for all users. The 2008-2009 change is the same for below-average users as it is under our adopted rates, but for those users over average they will still see an increase over 2008, rather than the current situation where their cost per quarter actually goes down. The table below is strictly winter rates. Usage/qtr: Total Cost 5000ga1 50 o incr) 10000ga1 incr) 15000ga1 incr) 20000ga1 8o incr) 25000ga1 7o incr) 30000ga1 6o incr) 2009 Current Total Cost 2008 Total Cost $37 ($12.25 or 50o incr) $24.75 $46.25 ($9.75 or 27o incr) $36.50 $55.50 ($7.25 or 15o incr) $48.25 $64.75 ($4.75 or 8o incr) $60.00 $74.00 ($2.25 or 3o incr) $71.75 $83.25 ($0.50 or Oo incr) $83.50 My 2009 Proposed $37 ($12.25 or $46.25 ($9.75 or 270 $55.50 ($7.25 or 150 $64.75 ($4.75 or $76.75 ($5.00 or $88.75 ($5.25 or