DISCLAIMER

07-0391R


RESOLUTION ESTABLISHING DULUTH WATER RATES EFFECTIVE WITH METER READINGS AFTER DECEMBER 31, 2007, AND RATES CHARGED FOR WATER FURNISHED TO POLITICAL SUBDIVISIONS OR STATE OR FEDERAL GOVERNMENT INSTALLMENTS LOCATED OUTSIDE THE CORPORATE LIMITS OF THE CITY EFFECTIVE WITH METER READINGS AFTER JULY 31, 2007; RESCINDING ALL PRIOR INCONSISTENT OR CONFLICTING RESOLUTIONS WITH RESPECT TO SUCH RATES.

BY COUNCILOR JOHNSON:

     RESOLVED, effective with the water meter readings after December 31, 2007, customers of the water utility of the city of Duluth, other than cities, whose water supply is measured by meter, shall be charged for such water in accordance with the following schedule of rates:

     1.   Monthly Metered Volume (except for       Rate/ 100 Cubic Feet

                 customers referred to in

                 2. and 3. below).

           first 4,000 cubic feet                         $2.63

           next 96,000 cubic feet                         $1.71

           next 900,000 cubic feet                        $1.43

           over 1,000,000 cubic feet                      $1.18

     2.   Monthly Metered Volume (for customers    Rate/ 100 Cubic Feet

                 in city at elevation 290+ feet

                 above Lake Superior).

           first 4,000 cubic feet                         $2.63

           over 4,000 cubic feet                          $1.71

     3.   Monthly Metered Volume (for customers    Rate/ 100 Cubic Feet

                 outside city.                            $3.98

     4.   fixed meter charges (in addition to volume charges) based on size of water service meter:

            1 inch or less                                 $ 3.61

            1 ½ inch                                        $ 6.31

            2 inch                                         $ 10.82

            3 inch                                         $ 39.66

            4 inch                                         $ 50.47

            6 inch                                         $ 75.71

            8 inch                                         $104.55

           10 inch                                        $136.99

     RESOLVED FURTHER, that effective with the water meter readings after August 1, 2007, the following jurisdictions shall be charged monthly rates for water in accordance with the following schedule of rates:

     1.   Hermantown                                     $2.64/100 cubic feet

     2.   Proctor                                        $1.97/100 cubic feet

     3.   Rice Lake Township                             $2.27/100 cubic feet

     RESOLVED FURTHER that all prior resolutions establishing rates for furnishing and sale of water inconsistent herewith are hereby rescinded.


STATEMENT OF PURPOSE:  The purpose of this resolution is to set water rates effective with meter readings after December 31, 2007, for customer classes located in the corporate city limits and after July 31, 2007, for water furnished to other political subdivisions.


The increases are based on a rate study, a copy of which is furnished to the council for their review. A comparison of the old rates to the proposed rates is contained in Tables 6.3 6.4, 6.5 and 6.6 of the study on PP. 6-8 and 6-9.


The last rate increase went into effect on November 1, 2006. The rate changes to be authorized by this resolution will realize an estimate of $2,455,719 in new revenue to meet rising operating expenses and includes $669,000 for the retiree health care benefit accrued actuarial liability. This is a nine percent rate increase over current rates for effected rate classes. Water rates for political subdivisions will be decreased in 2007 by this resolution. These rates were determined after a six step review process with the objective to generate sufficient revenue for the water utility to meet annual revenue requirements and achieve equity amongst user classes in the rate structure.