BY COUNCILOR FENA:00-0745R
RESOLUTION AUTHORIZING AN AGREEMENT WITH THE CITY OF HERMANTOWN FOR THE SALE OF A MAXIMUM DAILY AVERAGE OF 75,000 CUBIC FEET OF WATER.
RESOLVED, that the proper
city officials are hereby authorized and directed to execute an agreement
with the city of Hermantown authorizing the sale of a maximum daily average
of 75,000 cubic feet of water to Hermantown for a consideration as set
forth in the rate schedule of said agreement; said agreement filed as Public
Document No. __________________; monies received under this contract shall
be deposited in the Water Utility Fund No. 510.
Discussion in early 1997 with our neighboring municipalities led to the department contracting with Progressive Consulting Engineers (PCE) in May, 1997, to perform a cost of service water rate study. The study was commissioned to determine the city of Duluth's revenue requirements from the cities of Proctor and Hermantown and town of Rice Lake. The study was performed in cooperation with PCE and the four municipalities. The rates in each contract are the result of the 1997 study which was recently updated in January, 2000, by PCE. Based on historic water usage, the water rates reflect the system cost of providing service to Proctor, Hermantown and Rice Lake. Each agreement is for a term of ten years and contains rate adjustment mechanisms for adjusting the rates over time.