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Department Approval: Item Description: BACKGROUND REQUEST FOR COUNCII, ACTION 1�Tanager Reviewed: DATE : 07/22/02 TTEM NO.: V. B. Agenda Section: Rcports & Recommendations St. Paul Regional Water Services Contract Discussion The current wholesale water contract with St. Paul Regional Water Services, which has been in effect since 1974, will expire in 2004. The City has purchased water from St. Paul exclusively from the time the water distribution system was put into service in 1962. Roseville supplies wholesale water to Arden Hills through another joint agreement. In preparation for determining a means to continue to provide high quality, reasonably-priced water to our customers, the City commissioned a study in early 2001 to look at alternatives it may compare with our current source of water. The City hired Howard R. Green Company, who partnered with a national consulting firm CH2M Hill, to study all possible sources and provide cost analysis. DISCUSSION Six potential options were analyzed, including two proposals put forth by St. Paul Regional Water services. One of the proposals from St. Paul is a new 20-year wholesale contract, similar to our e�sting wholesale contract; the other an option whereby St. Paul would purchase and operate the Roseville Distribution system. In this option, Roseville's water consumers would become retail customers of St. Paul Regional Water Services. The other four options, as outlined in the attached report, are scenarios where the City would produce its own water supply by drilling wells and constructing treatment facilities to provide the same or better water quality for our customers. These options explore various joint utility arrangements with Arden Hills and Little Canada. They also consider different methods of supplying peak demand. All options are deemed feasible with varying impact on long-term water rates to Roseville consumers. All options were compared over a 20-year period. There are non-monetary factors to be considered on most of the options, such as consumer acceptance, management control, regulatory issues, and facility siting issues. Full detail and analysis is provided in the attached report. Also included as attachments are the current wholesale contract and copies of the new retail and wholesale proposals from St. Paul Regional Water Services.