In 2008, the state legislature passed a law that requires public water suppliers serving more than 1,000 people to adopt a water rate structure that encourages conservation. Failure to do so would result in the city being subject to sanctions imposed by the DNR, affecting the city's annual water allocation approved by the DNR.

The state requirement is to adopt "tiered" rates so that each tier has a significant differential, e.g., 25% to 50% differential between each tier and a 50% differential on the two highest tiers. Rates must be calculated based on the number of "living units" in a building, regardless or the number of water meters.

The new rates were to be in effect on January 1, 2010, but since the city did not anticipate getting anything approved by the DNR, implementation was delayed until September of this year.

The city's current system charges a flat rate of $7.50 per quarter and $3.25 per thousand gallons.

Council and staff evaluated a number of options over the past several months, using current rates as a base. In June the city proposed a schedule which has recently been approved by the DNR.

At the September 7, 2010 Council meeting the City Council adopted the revised rates.

The revised quarterly rate will be a flat rate of $12.00 and usage rates as follows:

0 - 8,999 gallons ---                   $2.50 per thousand

9,000 - 17,999 gallons --            $3.75 per thousand

18,000 + gallons     --                 $5.00 per thousand

The new rates take effect with the Fall Utility bills.

It is anticipated that the greatest impact of these rates will be on high water users. Low and moderate water users should notice little difference, and may see a reduction, in their bill. Any further adjustment, if needed, would not be made until the 2011 fiscal year.