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Department Approval: � �, �- -- � - � - �- �- � REQUEST FOR COUNCII, ACTION Manager Reviewed: ��I ��-� � DATE: 04111/OS ITEM �4,� Agenda Section: Item Description: Approve a Wholesale Water Purchase Agreement with St. Paul Regional Water Services Background: Our wholesale water contract with St. Paul Regional Water Services expired in May of 20U4. The City has purchased wholesale water from SPRWS since 1962 when our water distribution system was constructed. Roseville supplies wholesale water to the City of Arden Hills pursuant to an agreement with them. The City began preparation for negotiation of a new wholesale water contract in 2001 by studying alternatives to our existing agreement at that time. This study compared several long- term options and their effect on water rates. These options included the City developing their own water source, a proposed new wholesale contract with SPRWS, and the City becoming a retail customer of SPRWS. The outcome of the study suggested the best options were a new wholesale contract or developing our own water source. The Council directed staff to pursue a new wholesale contract in 2002. After numerous discussions and several iterations of contract language, we are bringing a proposed contract to the Council for review and approval. Discussion: Staff and City Attorneys for both parties have reviewed the proposed contact. After approval by the Roseville City Council, the proposed contract will be forwarded to the Board of Water Commissioners of the City of St. Paul for review and approval. SFRWS's initial rate proposal for wholesale water was 74.5% of the retail rate paid by St. Paul residents. Our expired contract resulted in an average rate of 68% - 69% of the St. Paul residential rate. The key provisions of the proposed contract are: (see attached copy) Wholesale water rate to Roseville will be 71% of the lowest seasonal rate charged to retail customers of SPRWS. Term of agreement is 20 years. ■ Assurance of water quality that meets state and federal drinking water standards. Quantity of water supplied will meet Rosevi��e's needs in the foreseeable future Financial Implications: The City budgets annually for purchase of approximately two billion gallons of potable water. Water rates have been adjusted upwards each of the past two years in anticipation of a new wholesale water contract. The rates in effect today will cover the increased rate for wholesale water per the proposed contract. Future Roseville wholesale water purchases will be based on 71 % of the lowest seasonal retail rate in effect in St. Paul at that time.