5.3. ERMUSR 08-12-2008J
Elk River -^~
Municipal Utilities
13069 Orono Parkway • P.O. Box 430
Elk River, MN 55330-0430
August 6, 2008
To: Elk River Municipal Utilities Commission
Jerry Takle
John Dietz
Jerry Gumphrey
From: Bryan Adams
Subject: Water Rates
Phone: 763.441.2020
Fax: 763.441.8099
At our July 2008 meeting, John Dietz indicated he received a call from a concerned citizen about
our water rates. This person felt our rates were too high. At the August 4th Elk River City
Council meeting, this citizen along with another citizen again expressed that they felt our rates
were to high especially for those who sprinkle their yards. Attached is the following information
for your review.
1) Copy of e-mail from this concerned citizen.
2) Expanded water rate survey from 12 communities.
3) Well drawdown data for Elk River wells for 2007-2008.
4) Monthly pumpage and maximum daily pumpage graphs of Elk Rivers system for years
2007 & 2008.
5) 2008 Water Budget Summary and P & L Summary of operations for years (2002 through
2007) from our recent audit.
6) Copy of State of Minnesota law change chapter 363 requiring conservation rate structure.
7) DNR Water Appreciation Permit (note: paragraph 11 requires conservation).
I offer the following comments about the above.
#1 & #2) The survey the customer supplied is accurate as far as it went. If you look at our
expanded survey, it reflects a different picture. The rate structures for these cities, show a
large variation and Elk River looks more in line with other communities. The higher use
meters that do lawn sprinkling pay proportionally more due to the inclining block rates.
This is done by design. Minnesota legislative and our DNR permits require inclining
block rate structure (see items 6 & 7 above). Utilities using a flat rate structure will be
changing in the near future.
#3 Well drawdown is becoming a larger concern. We are paying more attention to our
aquifer levels to ensure we are not over pumping our wells. The reason for this concern
is the large water withdraws in the summer due to lawn sprinkling.
#4 The daily and monthly pumpage graphs reflect a large disparity between winter and
summer usage again from lawn sprinkling. Of the 8 wells and 4 water towers on our
system, 5 wells could be taken off line and 1 water tower is taken off line in the winter
because they are only needed to support the sprinkling requirements. This represents
approximately $6.5 million of infrastructure investments being utilized only 5-6 months
of the year. Another reason our inclining block rate structure reflects the true cost of
water.
#5 The water department budget reflects little if any positive margins. If the $2.5 million
budget, $2.18 million comes from water sales while approximately $650,000 is P & I on
current debt. Our water rates are set to capture only the amount of money we need to
meet our financial objectives.
4dams, Bryan
From: Zehringer, Vance
Sent: Thursday, July 31, 2008 10:40 AM
To: Adams, Bryan
Subject: FW: Water price in Elk River
Bryan, heads up in case you want to be there
-----Original Message-----
From: STEPHANIE ZACZKOWSKI [mailto:mayorer@q.com]
Sent: Thursday, July 31, 2008 9:52 AM
To: Zehringer, Vance
Subject: RE: Water price in Elk River
Vance,
Thanks for the boat ride. It was great! I have invited Mr. Russell to come to the council meeting on Monday and talk on
open mike or during the discussion - if we put it on the agenda.
Stephanie
Subject: RE: Water price in Elk River
Date: Thu, 31 Jul 2008 09:04:25 -0500
From: vzehringerCa~elkriverutilities.com
To: mayorer(a~q.com
This is the same party that Bryan has been dealing with, so I forwarded it to him for a response. We are presently in the
piddle of a water rate study so it would be premature for me to respond.
-----Original Message-----
From: STEPHANIE ZACZKOWSKI [mailto:mayorer@q.com]
Sent: Wednesday, July 30, 2008 2:30 PM
To: Zehringer, Vance
Subject: Water price in Elk River
Vance,
It would be good if you would respond to Mr. Russell. Send me a copy so that I can understand the issues better
too.
Thanks,
Stephanie
Subject: FW: Water price in Elk River
Date: Mon, 28 Jul 2008 15:24:29 -0600
From: Todd.RusseHCallancfeslr:corrr>
To: mayorerCa~q.coa~x .
What is the cost to the citizens of Elk River for Elk River Municipal Utilities to conserve water? And
where is the extra money going?
i
Today if you get your water from Elk River Municipal Utilities you pay $1.50 for the first 9 units (9000
gallons of water) $3.50 for 10 to 15 units of water and $4.00 for all water above 15 units. This is
ridiculous when you look at other communities around Elk River. If you use the data from the article
"Worries over Water" from the July 23 issue of the Star News some people use 40000 gallons of water
or 40 units. In Elk River that would cost about $134.00 compared to -
Ramsey:
$29.40 for 3 months (includes 15 units) or $9.80 for the first 5 units per month
$1.98 for 15 to 25 units
$2.02 for 25 to 50 units
$2.04 for 50 to 100 units
$2.06 for 100 to 150 units
So in Ramsey that same 40 units would cost (120 units for 3 months would be 236.86 (which includes
all other fee's not just the water)) $78.95 per month.
Rogers:
$1.42 per unit any amount
So in Rogers 40 units would cost $56.80
Coon Rapids:
$1.50 per unit, any amount
So in Coon Rapids 40 units would cost $60.00
Otsego:
$.0015 per gallon or $1.50 per unit
So in Otsego 40 units would cost $60.00
Anoka:
$.0102 per cubic ft or 1.36 per unit
So in Anoka 40 units would cost $54.55
They state that the per day usage of water jumps from 1.5 million gallons in the winter to 7 million
gallons in the summer. So for some rough calculations the people of Elk River pay Elk River Municipal
Utilities $2,250 a day for water in the winter (1500 units times $1.5 per unit) and $22,875 a day in the
summer (5500 units @$3.75 plus $2,250). If you look at the numbers they are collecting about $20,000
a day more in the summer. So in a 1 month time that is $620,000. Where is the extra money going???
If we paid $1.5 per unit (which I can not believe they are loosing money on our first 9 units) that same 7
million gallons a day would cost $10,500 per day or $315,000 per month. Again I ask where this extra
money is going.
Because Bryari Adams of Elk River Municipal Utilities believes there will be a water shortage in the
next generation or two, the citizens of Elk River need to pay more for there water than the surrounding
communities by in most cases more than double? Why is Elk River the only one that is charging this
much for water?
In the July 23 Star News Bryan Adams talks about how to conserve water, if I were to water the amount
that he is saying i would not be saving water, but using more.
When looking at the picture of the Mt. Simon & Hinckley Formations, it looks to me that most of the
Twin City metro area pulls from the same water source, so is Elk River really going to make a
difference?
Todd Russell
Systems Engineer
LANDesk, an Avocent Company
email: todd.russellna,landesk.com
mobile: 763-486-5264
office: 763-390-7895
Elk River Municipal Utilities
2008 Water Rate Analysis Approximat e Monthly Water Bill
Winter Summer Irrigation Winter Summer
Community Rate Structure Residence_ Residence Meter Industrial Industrial
8 units 45 units 600 units 1080 units 1850 units
Albertville Base $9.75/quar t $18.8
5 $107.25 $1,737.95
$3,148.70
$5,412.50
0-10, 000 $1.95 _
10,000-20,000 $2.20
20,000-35,000 $2.40
35,000-50,000 $2.65
>50,000 $2.94
Becker Base $5.88 $21.56 $108.91 $1,568.84 $2,778.72 $4,803.82
0-3000 $1.96
3000-40,000 $2.28
40,000-100,000 $2.63
Big Lake Base $4.00 $18.80 $87.25 $1,114.00 $2,001.00 $
3,426.50
flat rate $1.85 _
Cambridge Base $10.28 $35.28 $177.28 $2,397.28 $4,317.28 $7,397.28
0-6,000 $3.00
6,000-20,000 $3.50
>20,000 $4.00
Coon Rapids Base (Estimate) $7.00 $18.20 $70.00 $847.00 $1,519.00
$2,597.00
Flat Rate $1.40
Elk River Base $6.50 $18.50 $161.00 $2,381.00 $1,690.00 $3,640.00
0-9, 000 $1.50
9,000-15,000 $3.50
> 15, 000 $4.00
For Industrial -Ste ps will vary d ependent on winter usage
Minneapolis Base (Estimate) $7.00 $36.60 $173.00 $2,227.00 $4,003.00 $6,852.00
Flat Rate $3.70
Otsego Base $3.00 $15.00 $70.50 $903.00 $1,623.00 $2,778.00
Flat Rate $1.50
Princeton Base $13.50 $47.90 $240.50 $3,237.50 $5,829.50 $9,987.50
0-8,000 $4.30
8,000-20,000 $4.80
> 20,000 $5.40
Rogers Base (Estimate) $7.00 $18.36 $70.90 $859.00
$1,540.60
$2,634.00
Flat rate $1.42
Ramsey Base $29.40 $29.40 $89.60 $1,221.70 $2,200.90 $3,771.70
0-15,000 in Above _
15,000-25,000 $1.98
25,000-50,000 $2.02
50,000-100,000 $2.04
St. Cloud Base (Estimate) $7.00 $37.08 $176.20 $2,263.00 $4,067.80 $6,963.00
Flat rate $3.76
Zimmerman Base (Estimate) $7.00 $29.40 $133.00 $1,687.00 $3,031.00 $5,187.00
Flat Rate $2.80
In Elk Rivers' case ,because the high summer water usage from lawn sprinkling causes large expenses,
the rate structure is designed to pass on these expenses to the lawn sprinkling custo mers.
2008 Minnesota legislative session, state law was inacted to require water utilities to utililize inclining
block rates by the year 2010 (verify date). The DNR highly encourages inclining
block rates .
Wate rRrate Comparison 2008
Elk River Municipal Utilities
Well Drawdown for years 2007 - 2008
Well #
Lincoln
Johnson
Static Level Winter Static Level Summer Pumping Drawdown Puml
2007 2007 2008 2007 2008 Level
2 Flowing 26 28 52
3 10.5 36 42 75
4
5
6 Flowing
74
21.6 24.5 20
94.5 85
35.8 40 41
120
61
7 16.3 33 43.4 96
8 12.1 37 54.5 58
9
8
48
49.3
77.7
38.3
120.4
57.4
109.4
73.4
52.2
I 8 I 18 I
57
59
Conclusion We are pumping 10% +/- water in 2008 than in 2007 but
static and pumping levels in 3 well are more in 2008.
Lincoln and Johnson monitoring well reflect general lowering of
ground water in the summer months. When the Winter static water levels
decrease over time or the Summer static drawdown does not return
to the winter static levels is a indication of serious aquifer degradation.
Continue to monitor.
60
95
68
168
100
213
153
160
140
120
0 100
~o
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8 Maximum Daily Pumpage 2007 & 2008
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ELK RIVER MUNICIPAL UTILITIES
SUMMARY OF YEAR 2008
BUDGETS
WATER BUDGET SUMMARY 2008
WATER REVENUE 2,585,837
WATER EXPENDITURES 2,378,401
WATER NET FOR CAPITAL 207,436
DEBT RETIREMENT 395,000
GROSS (187,564)
CAPITAL PROJECTS 929,500
BONDING
NET (1,117,064)
DEPRECIATION 901,250
NET TO RESERVES (215,814)
BUDGET SUMMARY2008
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Adams, Bryan
rom: Bill Black [bblack@mmua.orgl
Sent: Monday, August 04, 2008 1:44 PM
To: Adams, Bryan
Subject: Conservation rates
Orrinibus Sut~>~lemental Oudget bill
Session Laws Chapter 363
HF 1812 Rep. Carlson (DFL -Crystal)
SF 3813 Sen. Cohen (DFL - St. Paul)
CONSERVATION DATE REQUIREMENT
Requires public water utilities serving more than 1,000 people that meter individual customers to implement
conservation rate structures. Utilities in the 7-county metro area must implement rates by 2010. Utilities in all
other counties must implement rates by 2013. A "conservation rate structure" is defined as a rate structure that
encourages conservation which may include increasing block rates, seasonal rates, time of use rates,
individualized goal rates or excess use rates. (Introduced as HF 3238 / SF 2973.) (Creates Minn. Stat.
§103G.291, subd. 4.) Effective date: 07/01/08.
2008 Session Laws Chapter 363
ARTICLE 5 -ENVIRONMENT AND NATURAL RESOURCES
Sec. 20. Minnesota Statutes 2007 Supplement, section 103G.291, subdivision 3,
is amended to read:
Subd. 3. Water supply plans; demand reduction. (a) Every public water supplier
serving more than 1,000 people must submit a water supply plan to the commissioner
for approval by January 1, 1996. In accordance with guidelines developed by the
commissioner, the plan must address projected demands, adequacy of the water supply
system and planned improvements, existing and future water sources, natural resource
impacts or limitations, emergency preparedness, water conservation, supply and demand
reduction measures, and allocation priorities that are consistent with section 103G.261.
Public water suppliers must update their plan and, upon notification, submit it to the
commissioner for approval every ten years.
(b) The water supply plan in paragraph (a) is required for all communities in the
metropolitan area, as defined in section 473.121, with a municipal water supply system
and is a required element of the local comprehensive plan required under section 473.859.
Water supply plans or updates submitted after December 31, 2008, must be consistent
with the metropolitan area master water supply plan required under section 473.1565,
subdivision 1, paragraph (a), clause (2).
(c) Public water suppliers serving more than 1,000 people must employ water
..se demand reduction measures, including a conservation rate structure, as defined in
subdivision 4, paragraph (a), unless exempted under subdivision 4~paragraph (c), before
requesting approval from the commissioner of health under section 144.383, paragraph
(a) , to construct a public water supply well or requesting an increase in the authorized
volume of appropriation. Demand reduction measures must include evaluation of
conservation rate structures and a public education program that may include a toilet
and showerhead retrofit program.
(d) Public water suppliers serving more than 1,000 people must submit records
that indicate the number of connections and amount of use by customer category and
volume of water unaccounted for with the annual report of water use required under
section 1O3G.281, subdivision 3.
(e) For the purposes of this s~~isen section, "public water supplier" means
an entity that owns, manages, or operates a public water supply, as defined in section
144.382, subdivision 4.
Sec. 21. Minnesota Statutes 2006, section 1O3G.291, is amended by adding a
subdivision to read:
Subd. 4. Conservation rate structure required. ~a) For the purposes of this
section "conservation rate structure" means a rate structure that encourages conservation
and may include increasing block rates seasonal rates time of use rates, individualized
goal rates or excess use rates The rate structure must consider each residential unit as an
individual user in multiple-family dwellings.
(b) To encourage conservation a public water supplier serving more than 1 000
peoQle in the metropolitan area as defined in section 473.121 subdivision 2, shall use
a conservation rate structure by,January 1 2010. All remaining_public water suppliers
serving more than 1 000 Qeople shall use a conservation rate structure by January 1, 2013.
(c) A public water supplier without the roper measuring equipment to track the
amount of water used b~ its users as of the effective date of this act, is exempt from
this subdivision and the conservation rate structure requirement under subdivision 3,
paragraph (c).
William Black
Minnesota Municipal Utilities Association
Ojf. i63-559-1230 or 800-422-0919
Cel! 651-398-2098
bblack~mmua. or,~
Minnesota
AMENDED
WATER APPROPRIATION
PERMIT
Department of
Natural Resources
THIS AMENDED PERMIT SUPERSEDES THE ORIGINAL PERMIT AND ALL PREVIOUS AMENDMENTS
IN THE MATTER OF THE APPLICATION FOR APPROPRIATION OF WATERS OF THE STATE, PERMISSION IS HEREBY GRANTED TO
PERMITTEE Authorized Agent
Elk River Municipal Utilities General Manager
Address
13069 Orono Parkway, Elk River, Minnesota 55330 Phone: (763) 441-2020
To appropriate from: 12 municipal water supply wells, manifolded together
Please see Attachment A
Purpose.
Public Water Supply Use Code (211)
Property described as
City Property in Sections 23, 25, 26, 28, 32, 33, 34, and 35 in Township 33 North, Range 26 West, and NW'/a
SW'/4 Section 1, Township 32 North, Range 26 West.
Mississippi River (St. Cloud) Watershed (17)
Authorized Signature Title Date
~ / r~
u ~ f ~~v /
T J
7
Jale E Homuth Regional Hydrologist `
~
This permit is granted subject to the following CONDITIONS'
1. QUANTITY:
The Permittee is authorized to appropriate water at a rate not to exceed ~ Z,rJ00 gallons per minute. The total amount of water appropriated
shall not exceed ~ ,srJD _ million gallons per year
LIMITATIONS:
(a) Any violation of the terms and provisions of this permit and any appropriation of the waters of the state in excess of that authorized hereon shall
constitute a violation of Minnesota Statutes, Chapter 103.
(b) This permit shall not be construed as establishing any priority of appropriation of waters of the state.
(c) This permit is permissive only. No liability shall be imposed upon or incurred by the State of Minnesota or any of its employees, on account of the
granting hereof or on account of any damage to any person or property resulting from any act or omission of the Permittee relating to any matter
hereunder. This permit shall not be construed as estopping or limiting any legal claims or right of action of any person other than the state against the
Permittee, for any damage or injury resulting from any such act or omission, or as estopping or limiting any legal claim or right of action of the state
against the Permittee, for violation of or failure to comply with the provisions of the permit or applicable provisions of law.
(d) In all cases where the doing by the Permittee of anything authorized by this permit shall involve the taking, using, or damaging of any property,
rights or interests of any other person or persons, or of any publicly owned lands or improvements thereon or interests therein, the Permittee, before
proceeding therewith, shall obtain the written consent of all persons, agencies, or authorities concerned, and shall acquire all property, rights, and
interests necessary therefore.
(e) This permit shall not release the Permittee from any other permit requirements or liability or obligation imposed by Minnesota Statutes, Federal
Law, or local ordinances relating thereto and shall remain in force subject to all conditions and limitations now or hereafter Imposed by law.
(f) Unless explicitly specified, this permit does not authorize any alterations of the beds or banks of any public (protected) waters or wetlands. A
separate permit must be obtained from the Department of Natural Resources prior to any such alteration.
PERMITTEE'S RESPONSIBILITIES:
(a) FLOW METER.
The Permittee shall equip each installation for appropriating or using water with a flow meter, unless another method of measuring the quantity of
water appropriated to within ten (10) percent of actual amount withdrawn is approved by the Department.
(b) REPORTS.
Monthly records of the amount of water appropriated or used shall be recorded for each installation. Such readings and the total amount of water
appropriated or used shall be reported annually to the Director of DNR Waters, on or before February 15 of the following year, upon forms supplied
by the Division. Any processing fee required by law or rule shall be submitted with the records whether or not any water was appropriated during the
year. Failure to report shall be sufficient cause for terminating the permit 30 days following written notice.
(c) TRANSFER OR ASSIGNMENT.
Any transfer or assignment of rights, or sale of property involved hereunder shall be reported within 90 days thereafter to the Director of DNR Waters.
Such notice shall be made by the transferee (i.e ,new owner) and shall state the intention to continue the appropriation as stated in the permit. This
permit shall not be transferred or assigned except with the written consent of the Commissioner.
(over, please)
(d) MODIFICATION.
The Permittee must notify the Commissioner in writing of any proposed changes to the existing permit. This permit shall not be modified withor~' °~rst
obtaining the written permission from the Commissioner.
4. COMMISSIONER'S AUTHORITY:
(a) The Commissioner may inspect any installation utilized for the appropriation or use of water. The Permittee shall grant access to the site at all
reasonable times and shall supply such information concerning such installation as the Commissioner may require.
(b) The Commissioner may, as he/she deems necessary, require the Permittee to install gages and/or observation wells to monitor the impact of the
Permittee's appropriation on the water resource and require the Permittee to pay necessary costs of installation and maintenance.
(c) The Commissioner may restrict, suspend, amend, or cancel this permit in accordance with applicable laws and rules for any cause for the
protection of public interests, or for violation of the provisions of this permit.
5. PUBLIC RECORD:
All data, facts, plans, maps, applications, annual water use reports, and any additional information submitted as part of this permit, and this permit
itself are paR of the public record and are available for public inspection at the offices of DNR Waters. The information contained therein may be
used by the Division as it deems necessary. The submission of false data, statements, reports, or any such additional information, at any time shall
be deemed as just grounds for revocation of this permit.
6. WETLAND CONSERVATION ACT:
Where the work authorized by this permit involves the draining or filling of wetlands not subject to DNR regulations, the permittee shall not initiate any
appropriation under this permit until the permittee has obtained official approval from the responsible governmental unit as required by the Minnesota
Wetland Conservation Act.
7. WELL SEALING:
The permittee shall notify the Minnesota Department of Health prior to sealing, abandoning, removing, covering, plugging or filling the well(s) from
which the authorized appropriation was made. The well(s) must be sealed by a licensed well driller and in accordance wish the procedures required
under Minnesota Statutes 1031 and Minnesota Rules 4725 as administered by the Minnesota Department of Health.
8. INTERFERENCE:
If notified by the Department that well interference Is suspected and probable from your appropriation, based on confirmation of a formal v/ell
interference complains, all appropriation authorized by this permit must cease immediately until the interference is resolved. The permittee may be
required to obtain domestic well information within a radius of one and one half miles of the production well should well interference problems
develop.
9. WATER USE RECORDS:
Public water suppliers serving more than 1,000 people must maintain records of the number of service connections, the volume of use by cus
category, and the volume of unaccounted for water and submit this information with the annual water use report.
10. NEW WELLS:
This permit shall authorize the installation and use of up to flue additional wells as described in the Elk River Water Supply Plan, dated September
2006, provided appropriate permits from the Minnesota Department of Health are first obtained. Prior to connecting these wells to the water supply
system, the permittee must forward the DNR a copy of the well record, pump tests and the completed well notification form (copy attached)- Use of
the new well requires compliance with Condition No. 11 below.
11. EMERGENCY AND CONSERVATION PLAN COMPLIANCE
The permittee shall comply with all agreements relating to monitoring, conservation, well location, education and other agreements,as described in
the permittee's approved Emergency and Conservation Plan. Failure to carry out the measures described in that plan may be cause for termination
of this permit.
12. OBSERVATION WELL REQUIREMENT:
The permittee shall install or acquire at least one non-production well that is cased into the Mt. Simon Hinckley aquifer for use as an observation well
Water levels in these wells should be measured at least monthly. Such measurements and any other well monitoring information agreed to in the
approved Emergency and Conservation Plan must be forwarded to the Observation Well Data Manager, DNR Waters, 500 Lafayette Road, St. Paul,
MN 55155-4032, by the end of each calendar year.
c: City of Elk River
Sherburne County SWCD, Bill Bronder
DNR Waters, laurel Reeves
DNR Area Hydrologist, Roger Stradal
DNR Conservation Officer, Mitch Sladek
Minnesota Department of Health, Bruce Olsen
Central Office Appropriation Permits
Central Office SWUDS