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Disadvantages: Likely represents the most expensive option as it represents the greatest <br />financial exposure. Rates would need to increase to cover the increased exposure. Since the <br />increased costs would be recovered through increased rates, there is no opt out option. <br />Option 4: ERMU owns from main through Curb Stop for residential properties only (3/50 <br />cities). <br />Advantages: Offers protection to residential customers while avoiding the higher cost potential <br />associated with commercial properties. The majority of residential properties have one -inch or <br />smaller lines that connect to water mains located under low -volume residential roads. <br />Commercial/industrial properties can have service lines that are considerably longer and larger <br />that connect to water mains under higher -volume collector roads. Larger lines and connections <br />under higher -volume roads can significantly increase repair costs. <br />Disadvantages: Smaller business owners, with line sizes similar to residential properties, may be <br />upset over the lack of consistency with residential properties. <br />FINANCIAL: <br />Financial exposure will depend on what, if any, changes are made to our current policy. If ERMU <br />takes on the added responsibility of funding service line repairs/replacement from the main <br />through the curb stop valve, residential costs would increase by approximately $2.20/month. <br />Costs for commercial customers would increase by approximately $5.10/month. Depending on <br />the selected program, these amounts would be recovered through either a service fee or a rate <br />increase. These amounts could decrease if additional risk -limiting measures are implemented. <br />Calculating the final amounts would be part of our 2025 rate study, planned for the third <br />quarter of 2025. <br />DISCUSSION QUESTIONS: <br />1) Does the Commission wish to socialize water service line repair costs? <br />If yes, is there a preference for implementing a service line repair program or <br />revising the ordinance/water rules? <br />2) If the Commission desires to socialize repair costs, is there a desire to exclude <br />commercial properties? <br />• If yes, is there a preference to exclude all commercial properties, or only those <br />commercial properties exceeding a certain service line size? <br />3) If the Commission desires to socialize repair costs, is there a desire to limit ERMU's risk <br />by capping our exposure through additional limitations? <br />• If yes, staff will present risk mitigation options at a future commission meeting. <br />ATTACHMENTS: <br />• 2025-4 - 5.3a - Water Service Line Diagram <br />• 2025-4 - 5.3b - Feb 2025; Water Service Line Ownership, Report <br />• 2025-4 - 5.3c - Feb 2025; Water Service Line Ownership, Survey Results <br />Page 3 of 3 <br />200 <br />