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MEMORANDUM <br />TO: Elk River Municipal Utilities Commission <br />FROM: Tim Simon, Finance Director <br />DATE: December 14, 2010 <br />SUBJECT: Rate impacts <br />The utilities commission had asked to review the impact on the water rates if the top 20 <br />accounts which equates to the top I S customers no longer paid usage charges. <br />The assumptions used in the analysis are the following: <br />1) Based on ?010 usage for the top 15 customers, approximate revenue loss would be <br />$240,000. <br />2) This will significantly reduce the revenue in the Commercial der 2 and almost all the <br />revenue in Commercial der 3. <br />3) The percentage of usage revenue lost would be applied over all existing customers. <br />Conclusion: <br />Rates among all remaining tiers <br />consu <br />ti <br />l would have to increase 16 to 17 percent depending on future <br />mp <br />on <br />evels. See table below to see the rate c i <br /> o mpar <br />son. <br /> 16.6% change <br /> 2010 Rates Estimated Rates <br />Residential <br />Tier 1 $ 1.50 $ 1 <br />75 <br />Tier 2 $ 3.50 $ . <br />4 <br />08 <br />Tier 3 $ 4.00 $ . <br />4.66 <br />Irrigation <br />Tier 2 $ 3.50 $ 4 <br />08 <br />Tier 3 $ 4.00 $ . <br />4.66 <br />Commercial <br />Tier 1 $ 1.50 $ 1 <br />75 <br />Tier 2 $ 3.50 $ . <br />4 <br />08 <br />Tier 3 $ 4.00 $ . <br />4.66 <br />C:ADomments and Settings\rydy\Local Settings\Tempo~ary In[eme[F~esVContentOutlook\A32QCU]U\wa[eiut0iry.do<x <br />