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Recommendation #3: The City currently has approximately 20 addresses that have either or both an unmetered water and sanitary sewer usage. Included in the 20 accounts are two apartments, a church and 4 commercial property, with the balance as residential usage. The current charge of$20 per month equals a little over 2,500 gallons per month usage. From a summary that staff completed which analyzed the number of residential users at different water usage levels, it appears that little over 50% of the City's 224 residential users use less than 3,000 gallons per month. Multi family units used a total of approximately 750,000 gallons per month. It is likely that the actual usage on unmetered accounts is more than what is being charged. Consequently, we are recommending that the monthly fee for unmetered accounts is increased to reflect a higher use level. Pursuant to Council direction, we have calculated a different tier rate for commercial properties. 80% of the City's commercial users fall under a usage of 5,000 gallons per month, or approximately 24% of the monthly water use. The 5,000 cut off point was chosen in order to provide the least impact on a commercial entity. See Exhibit F. We would also recommend that the City revisit the commercial tier change, if adopted, as early as next year. Recommendation #4: The Industrial Park is currently on the proposed capital project list. This is expected to cost $1,000,000, which is split between the water and the sewer fund. After extensive discussions with staff, the study does not contemplate many additional commercial users. The City has the option to finance the improvements in advance of an occupant or to finance the improvements in conjunction with build out. The City should carefully weigh the risk of incurring such a substantial cost before commercial entities are found. Recommendation #5: Costs have been programmed into the study for either an expansion or relocation to the wastewater treatment facility. The decision regarding the facility is tied to the as yet unknown plan for Highway 371. Study costs and project costs have been included in the study. At this time, no replacement costs have been included for the water treatment facility. The remaining useful life of the water treatment facility and the water towers should be reviewed. The City should also undertake long range planning to determine if there are areas in the city that should be connected to the water and sewer system, such as around area lakes and if any of the private septic systems are failing or on the verge of failing and polluting ground water. Recommendation #6: Lastly, we are recommending that the City adopt a policy regarding utility connection fees and determine residential equivalent units for different types of structures and when they are payable. Typically, `connection fees' can be collected either at plat or when the building permit is issued. 3060 Centre Pointe Drive (651)697-8500 Fax:(651)697-8555 v Roseville,MN 55113-1105 http://www.ehlers-inc.com 4