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~j <br />Elk River <br />Municipal Utilities <br />13069 Orono Parkway • P.O. Box 430 <br />Elk River, MN 55330-0430 <br />January 4, 2008 <br />To: Elk River Municipal Utilities Commission <br />Jerry Takle <br />Jerry Gumphrey <br />Jim Tralle <br />From: Bryan Adams <br />Subject: Alternate Water Rate Design <br />Phone: 763.441.2020 <br />Fax: 763.441.8099 <br />At the December 2007 Elk River Municipal Utilities commission meeting, water rate increased <br />was discussed. We currently use a 2-Tier water rate structure where the second rate is much <br />higher to discourage excessive lawn watering and promote water conservation. Jerry Gumphrey <br />suggested we consider a 3-Tier structure to further promote conservation. This would be an <br />inclining block rate with more usage resulting in unit cost increases. The proposed rates are as <br />follows. <br />Residentia l Rates CommerciaUIrri ation Rates <br /> 2007-2 Tier 2008-2Tier 2008-3 Tier 2007-2 Tier 2008-2Tier 2008-3 Tier <br /> (Bud et) (Bud et) <br />Meter Char e $6.50 $6.50 $6.50 Varies -Size of Meter <br />Tier 1 Rate $1.40 $1.50 $1.50 $1.40 $1.50 $1.50 <br />Tier 2 (1000 al) 8 8 9 Avera e Winter Months + ] 0% <br />Tier 2 Rate $3.25 $3.50 $3.50 $3.25 $3.50 $3.50 <br />Tier 2 (1000 al) - - 15 - - 40 + Tier 1 <br />Tier 3 Rate - - $4.00 - - $4.00 <br />Graph of Rate Structure <br />$4.00 <br />$3.50 <br />$1.50 <br />Tier 1 <br />Tier 2 ~ Tier 3 <br />Quantity <br />