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FINANCIAL IMPLICATIONS <br />Three of the options are very comparable when evaluating net present value of the total cost over 20 <br />years. The projected average water rate over the period ranges from $2.25 per thousand gallons to $228 <br />per thousand gallons for these three options. The lowest cost option appears to be drilling wells to <br />provide water for Roseville, At-den Hills, and Little Canada; building treatment facilities to meet average <br />day demand; and meeting peak demand through aquifer storage and recovery. <br />The third-lowest option is the proposed wholesale contract with St. Paul Regional Water Services. This <br />proposal would increase current wholesale rates by appro�mately 10%. In preliminary evaluation of St. <br />Paul's water production costs by Roseville staff and questioning of their return on investment, we feel <br />further discussion is necessary to evaluate the St. Paul wholesale proposal against the water productions <br />options. This would be in the form of a counter proposal to St. Paul's original wholesale proposal. <br />RECOMMENDED COUNCII, ACTION <br />It is our recommendation to authorize staff to offer St. Paul Regional Water Services, the third lowest <br />option but not significantly higher than the lower options, a counter proposal for wholesale water <br />purchase for a 20-year period beginning at the expiration of the current contract. It would be the intent <br />that negotiating a lower wholesale proposal would provide Roseville consumers with the lowest cost <br />option for potable water over the term of the contract while maintaining the same water quality, <br />management control, and ownership of Roseville's water distribution system. <br />RECOMMENDED COUNCIL ACTION <br />A motion providing direction to staff to pursue a lower cost wholesale contract for potable water with St. <br />Paul Regional Water Services. <br />Prepared by: Duane Schwartz <br />