HomeMy WebLinkAbout2011 05-09 City Council/Manager Workshop Packet
AGENDA
MAPLEWOOD CITY COUNCIL
MANAGER WORKSHOP
5:15P.M. Monday,May 9, 2011
Council Chambers, City Hall
A.CALL TO ORDER
B.ROLL CALL
C.APPROVAL OF AGENDA
D.UNFINISHED BUSINESS
1.5:15 p.m. – Candidate Interview
a.Business & Economic Development Commission
2. 5:30 p.m. – Wipers Recycling v. City of Maplewood
a.Declaration of Intent to Close Meeting for Attorney Update
E.NEW BUSINESS
1.Water System Evaluation Summary
F.ADJOURNMENT
*
Times Listed Are Approximate
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Work Session Agenda Item D1
AGENDA REPORT
TO
: James Antonen, City Manager
FROM:
Charles Ahl, Assistant City Manager
Sarah Burlingame, Senior Administrative Assistant
SUBJECT: Commission/Board Candidate Interview
a.Business & Economic Development Commission
DATE:May 4, 2011
INTRODUCTION
The City Council will be conducting an interviewof a candidatefor the Business & Economic
Development Commission. One (1) isseat open on the Business & Economic Development
Commission (BEDC) which was created by a resignation, thereforethe individual appointed to
this commission would serve the remainder of that termwhich expires September 30, 2013.
th
This is a new resignation and not a continuation of the interviews that took place on April 4and
th
25.
The applicant, Karen Anderson, applied for the BEDC during the recent interview process but
was unable to interview at that time.
RECOMMENDATION
Staff recommends that the Council interview the candidate as indicated in the schedule below.
The questions will be submitted to the Council under separate cover.During the interview
process, Council Members should fill out their ballots. Once the Interview hasconcluded,
Council Members should submit their ballots to staff, which will be tallied with the results brought
back to the Council regular meeting following this workshop with recommendations for
appointments.
The schedule is as follows:
Business Economic Development Commission (1 opening)
5:15 PM Karen Anderson
Attachments:
1.Candidate Applications
Work Session Agenda Item D2
AGENDA REPORT
TO
: City Council
FROM:
Charles Ahl, Assistant City Manager
SUBJECT:Wipers Recycling v. City of Maplewood
a.Declaration of Intent to Close Meeting for Attorney Update
DATE:May 9, 2011
INTRODUCTION
As part ofthecontinuing discussion on litigation matters related to the lawsuits regarding the Wipers
Recycling v. City of Maplewood issues, the City Council will be receiving an update from Attorney
Robin Wolpert regarding the status and progress on the various litigation matter including a discussion
on settlement offers.
It is expected that due to the litigation decisions and update on client-attorney issues, that this meeting
will be closed per statute.
Recommended Action
The City Council will receive the update during the closed session. No action will be taken during this
closed session.
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AGENDA REPORT
TO:
James Antonen, City Manager
FROM:
Michael Thompson, City Engineer/ Dep. Public Works Director
SUBJECT: Water System Evaluation, City Project 10-09, Project Update
DATE: May 2, 2011
INTRODUCTION
On April 12, 2010, the council authorized the preparation of a water system evaluation report. The
purpose of this report was twofold; to evaluate the city’s current water surcharge rates, and determine
whether improvements should be made in the way that the city provides water service to its residents.
The consultant team has completed a draft of the report and they are prepared to present their findings
and recommendations. A copy of the draft report and the slides for the presentation are attached.
BACKGROUND/DISCUSSION
St. Paul Regional Water Services (SPRWS) currently provides water service to a majority of the
residents and commercial properties within Maplewood. North St. Paul provides water service to
residents in the northeast corner of the city, and Roseville, Little Canada, and Woodbury also provide
water service to properties located along city borders.
Maplewood transferred ownership of its water system assets to SPRWS in 1997. As a part of this
change, SPRWS assumed ownership and maintenance of the existing water system and Maplewood
eliminated the need for utility billing since SPRWS took responsibility for both water and sanitary sewer
charges for the community. A copy of the agreement between the Board of Water Commissioners and
the City of Maplewood that established the terms of this ownership transfer is attached.
As a result of some of the inherent challenges associated with an outside agency owned water system,
staff has questioned whether SPRWS ownership and maintenance of the water system is still in the
best interests of Maplewood and its residents. The water system evaluation study has evaluated both
the engineering and financial aspects of how the water system is currently operated and provides
information to assist the city in evaluating possible changes in the way that water service is provided to
the community.
Maplewood currently collects a water surcharge fee from all residential and commercial water accounts
serviced by SPRWS and the City of North St. Paul. The consultants previously completed an analysis
of the water surcharge fees and this information was provided to the council at a work session on July
26, 2010. In response to this information, the SPRWS surcharge fee was increased from 2% to 4% for
2011. No changes have been made to the North St. Paul surcharge rate.
RECOMMENDATION
No action is required. The staff and consulting firm will be providing the city council with an overview of
the consultant team’s findings and solicit comments before the study is finalized.
The staff has coordinated with SPRWS on the study and SPRWS representatives will be represented at
the work session to present their perspective.
Attachments:
1. Draft Report without attachments ( A full copy of the complete report has been provided to all Council members.)
2. Presentation Slides
3. Agreement between Board of Water Commissioners and City of Maplewood
WATER SYSTEM EVALUATION
FOR
CITY OF MAPLEWOOD
CITY PROJECT 10-09
Kimley-Horn and Associates, Inc.I hereby certify that this plan, specification
2550 University Avenue Westor report was prepared by me or under my
Suite 238Ndirect supervision and that I am duly
St. Paul, MN 55114Licensed Professional Engineer under the
(651) 645-4197laws of the State of Minnesota.
Signature: __________________________
Chadd B. Larson, P.E.
Date: __________ Lic. No. 4 1864
WATER SYSTEM EVALUATION
CITY OF MAPLEWOOD
CITY PROJECT 10-09
TABLE OF CONTENTS
Page
1.INTRODUCTION 1
2.EXISTING SYSTEM INVENTORY 1
3. CAPITAL IMPROVEMENT PLAN 2
4. SURCHARGE ANALYSIS 3
5.WATER SYSTEM ACQUISITION 5
A.Initial Costs
B.Annual Costs
C.SPRWS Acquisition Cost
D.Financial Analysis
E.Rate Comparison
6. ADDITIONAL CONSIDERATIONS 9
7. SUMMARY AND RECOMMENDATIONS 10
APPENDIX A – EXHIBITS
Exhibit 1 – Existing Water Main System
Exhibit 2 – Existing Water Main Age
Exhibit 3 – 5-Year Water Main CIP
Exhibit 4 – St. Paul Water Fund – Current Status
Exhibit 5 – St. Paul Water Fund – Recommended Rate Increase
APPENDIX B – 5-YEAR CIP FOR WATER MAIN IMPROVEMENTS
APPENDIX C – PROJECT UPDATE MEMORANDUM – SURCHARGE ANALYSIS
APPENDIX D – WATER UTILITY ACQUISITION ANALYSIS
-2863(9'8-32
On April 12, 2010, the Maplewood City Council authorized the preparation of a water
system evaluation report. The purpose of this report is twofold; to evaluate the city’s
current water surcharge rates, and determine whether changes should be made in the way
that the city provides water service to its residents.
St. Paul Regional Water Services (SPRWS) currently provides water service to a majority
of the residents and commercial properties within the city. North St. Paul provides water
service to residents in the northeast corner of the city, and Roseville, Little Canada, and
Woodbury also provide water service to properties located along border streets.
Maplewood transferred ownership of its water system assets to SPRWS in 1997. As a
part of this change, SPRWS assumed ownership and maintenance of the existing water
system and Maplewood eliminated the need for utility billing since SPRWS took
responsibility for both water and sanitary sewer charges for the community.
The city is questioning whether SPRWS ownership and maintenance of the water system
is still in the best interests of Maplewood and its residents. This study evaluates both the
engineering and financial aspects of how the water system is operated and provides
recommendations to assist the city in evaluating possible changes in the way that water
service is provided to the community.
Maplewood currently collects a water surcharge fee from all residential and commercial
water accounts serviced by SPRWS and the City of North St. Paul. This study includes
an evaluation of the city’s current surcharge fees and provides recommendations for
future changes in the surcharge rates.
This report assumes that no changes would be considered for the Maplewood businesses
and residents that are currently served by North St. Paul, Little Canada, Woodbury, and
Roseville. The overall number of properties served by these neighboring communities is
minimal and costs to convert them to the Maplewood system would be prohibitive.
)<-78-2+7=78)1-2:)2836=
The majority of the city’s water system is currently owned and maintained by SPRWS.
The cities of North St. Paul, Woodbury, Little Canada, and Roseville provide water to a
limited number of accounts. The following is a summary of the number of accounts
served by each water service provider:
SPRWS9,663 Accounts
North St. Paul794 Accounts
Little Canada66 Accounts
Woodbury27 Accounts
Roseville5 Accounts
1
The existing SPRWS water system within Maplewood consists of cast iron, ductile iron,
and PVC water main. An approximate summary of the existing SPRWS water main
infrastructure in the city is provided below.
Water Main TypeTotal Length
Ductile Iron500,000 Feet
Cast Iron350,000 Feet
PVC 15,000 Feet
Total865,000 Feet
The SPRWS system includes three booster stations to provide adequate water pressure to
certain areas of Maplewood. These booster stations are located on Beebe Road, Mailand
Road, and Roselawn Avenue. All three of these booster stations were constructed in the
1970’s as detailed below.
Booster StationConstructed
Beebe Road 1973
Mailand Road 1978
Roselawn Avenue 1978
SPRWS also has three water storage facilities in Maplewood as follows:
Storage FacilityCapacityConstructed
Cope Avenue1.5 million gallon 1978
Ferndale Street1.0 million gallon 1987
Sterling Street0.5 million gallon 1988
These water storage facilities require some periodic maintenance including a complete
painting approximately every 15 years.
A map of the existing SPRWS Maplewood water system is provided as Exhibit 1 in
Appendix A.
Exhibit 2 in Appendix A illustrates water main age and details the locations of historic
water main breaks within the system.
'%4-8%0-1463:)1)2840%2
The condition of the existing SPRWS water system infrastructure has been evaluated and
a 5-year capital improvement plan (CIP) has been developed to identify future water
system improvement needs in Maplewood. The CIP has been prepared based on the
following:
An understanding of Maplewood’s proposed street reconstruction program over
the next 5 years
2
A review of the existing water mains within the proposed street reconstruction
areas to determine the need for water main replacement
We have assumed that any cast iron water main would be replaced at the time the
streets are reconstructed to avoid future water main breaks within new street
pavements
We have assumed that all new water main would be upgraded to a minimum 8-
inch diameter
Current SPRWS policy does not provide funding for water main replacement work unless
certain criteria are met regarding frequency of water main breaks. We have reviewed the
number of water main breaks within the proposed street reconstruction areas to determine
when the break criteria are met and when SPRWS would provide funding for the water
main replacement. The SPRWS break criteria are not met for a majority of the proposed
water main replacement work requiring Maplewood to provide an alternative funding
source.
Assuming that the city implements all of the street reconstruction work included within
the 5-year CIP, approximately 6,000 feet of water main replacement will be required each
year. This equates to approximately $500,000 in city funded water main improvements
annually. For reference, this level of investment is generally consistent with the water
main replacement work that has been performed on an annual basis within the city over
the last 10 years.
For the purposes of future planning, we have also assumed that subsequent 5-year CIP’s
will also include a $500,000 annual investment in water system improvements. We
understand that the city anticipates a reduction in street reconstruction work in the future;
however, we have assumed that inflationary costs would offset this reduction in work.
Since the original CIP analysis was completed, we understand that the City is planning to
decrease the amount of infrastructure improvements planned for the next five years. The
reduction in infrastructure improvements will likely reduce the water system annual
investment to $350,000-$400,000. This reduction in water main infrastructure
improvements will impact future City decisions on surcharge rate increases.
Attached Exhibit 3 in Appendix A illustrates the city’s 5-year CIP for street
reconstruction work and the areas requiring water main improvements.
Appendix B includes a technical memorandum dated June 17, 2010 that provides
additional details on the establishment of the 5-year CIP.
796',%6+)%2%0=7-7
Maplewood residents are currently billed for their water service directly by their water
provider. The SPRWS and North St. Paul bills include a Maplewood surcharge to
provide some city funds for water system related costs.
3
Maplewood uses two funds for surcharge revenues related to water sales; The Water
Availability Charge Fund-St. Paul Water District (Fund 407) and the Water Availability
Charge Fund-North St Paul Water District (Fund 408). As stated above, the vast majority
of Maplewood residents are served by SPRWS and the majority of revenues are derived
from this source.
The following is a summary of each of these funds.
A.St. Paul Water District Fund 407
SPRWS sells approximately 1.5 billion gallons of water per year to Maplewood
residents. Water is metered and billed on either a monthly or quarterly basis,
depending on user type such as residential or commercial, and is charged based on
100 cubic feet of water. SPRWS remits a surcharge of 2% of the total water bill,
or approximately $100,000 on an annual basis, to Maplewood.
Exhibit 4 in Appendix A provides a summary of the current and projected status
of the St. Paul Water District fund. The fund shows a beginning fund balance
deficit of approximately ($150,000). The 2010 budget shows an ending balance
of $75,000. For the purpose of illustrating the projected status of the fund, we
have assumed the following:
No increase in the 2% surcharge rate resulting in continued surcharge revenue
of approximately $100,000 per year
CIP costs of $350,000-$400,00 per year (based on the City’s revised CIP
projections)
Based on these assumptions, the fund will have a deficit of over ($2.5 million) by
2020 unless other funding sources are identified for the water main replacement
work included in the proposed 5-year CIP.
Given the financial pressures that the St. Paul Water District Fund will continue to
experience, we have completed a projection of the surcharge revenues required to
bring the fund to a positive balance within approximately five to six years and
then to maintain a positive balance. We are recommending an increase in the
surcharge rate from 2% in 2010 to 4% in 2011, with future surcharge rate
increases as illustrated in the table below.
2010 201120122013201420152016
Surcharge2%4%5.25% 6.25% 7.00% 7.75% 8.50%
(%)
Revenues103,400188,400257,100318,300370,800426,900487,000
($)
4
In addition to the surcharge rate increases, we have assumed some limited
bonding to 2015 and a one-time permanent transfer of $600,000 into the fund in
2016. The resulting 2020 fund balance would be approximately $900,000.
Exhibit 5 in Appendix A illustrates the resulting impact on the St. Paul Water
District Fund with the recommended changes.
B.North St. Paul Water District Fund 408
The City of Maplewood collects $1.00 per account per month of surcharge
revenue for water provided to Maplewood residents by the City of North St. Paul.
North St. Paul remits the revenue to Maplewood on a monthly basis and this
equates to approximately $10,000 per year.
No increases are recommended in the North St. Paul District surcharge rate at this
time. There are currently no planned water main improvements in the North St.
Paul service area.
Appendix C includes a technical memorandum dated July 16, 2010 that provides
additional details on the surcharge rate analysis.
The surcharge analysis information was provided to the City Council at a work session on
July 26, 2010. Based on discussion at that work session, the City has increased the
surcharge from 2% to 4% for 2011.
;%8)67=78)1%'59-7-8-32
One of the primary purposes of this study was to determine whether changes should be
made in the way that the city provides water service to its residents. This has included an
analysis of the feasibility of Maplewood purchasing the water system back from SPRWS.
The following is a summary of this analysis.
A.Initial Costs
Disconnects and Master Meters
The SPRWS Maplewood water system is currently connected to the St. Paul
water system at several locations. If Maplewood took ownership of the water
system, they would need to separate or meter each location where the Maplewood
water main is connected to the St. Paul water system.
Based on previous studies and discussions with SPRWS staff, there are
approximately 40 locations where the existing water main would need to be
separated or metered. For the basis of this analysis, it is assumed that 25 locations
will be separated and 15 locations will require master meter installations. The
5
estimated total project costs (construction and engineering/admin) associated with
these improvements are summarized below.
15 master meters @ $30,000/meter$ 450,000
25 disconnections @ $22,000/disconnection $ 5 50,000
Total Estimated Initial Cost$1,000,000
Service Meter Replacements
SPRWS is currently completing a system-wide project to replace all of the
individual service meters. This is a multi-year project and the service meters in
Maplewood are scheduled for replacement in 2012 and 2013. The estimated total
cost for the meter replacement in Maplewood is as follows:
8,067 Residential meters @ $162.25/meter=$1,310,000
1,059 Non-residential meters @ $450/meter=$ 480,000
535 Commercial/Municipal meters @ $1,325/meter =$ 710,000
Total=$2,500,000
The meter costs identified above are derived from an average of the actual
contract unit bid prices received from SPRWS.
B.Annual Costs
In addition to the initial costs to separate the water system and replace the service
meters, there are several other annual expenses that need to be considered with a
city-owned water system.
Operating Expenses
The city would incur typical operating expenses associated with ownership of the
water system. This analysis assumed that a utility clerk, utility crew chief, and
three utility workers would be hired to operate and maintain the water system. In
addition to the labor costs, there are also material and equipment costs included in
the operating expense assumptions. These assumptions are primarily based on
information provided by city and SPRWS staff.
Labor Cost
Utility Billing Clerk$ 60,000
Public Works Crew Chief$ 70,000
Public Works Crew (3)$ 195,000
Total$ 325,000
Material and Equipment Cost
Office and Operating Supplies$ 100,000
Contractual (Engineering, Insurance, Processing) $ 2 00,000
6
Utilities (Electrical, Communications)$ 100,000
Operational and Maintenance$ 150,000
Total$ 550,000
Capital Expenses
The 5-year CIP for water main improvements established a budget of $500,000
for annual capital water main improvements.
The city also needs to budget for painting the three elevated storage tanks on an
assumed 15-year basis. The annual cost for tank painting assumes the project cost
to paint each tank every 15 years is $750,000.
Annual Tank Painting Cost = (3 Tanks) x ($750,000) = $150,000/year
15 years
Below is a summary of the annual capital expenses.
Annual Water Main Improvements$ 500,000
Annual Cost for Tank Painting$ 150,000
Total Annual Capital Expenses$ 650,000
C.SPRWS Acquisition Cost
Based on information provided by SPRWS, they have invested approximately $9
million in water main improvements since taking ownership of Maplewood’s
water system in 1997. This cost was based on the following information provided
by SPRWS staff:
95,976 Feet Water Main Reconstruction @ $85/foot = $8,157,960
Tank Maintenance Projects= $ 841,404
Total= $8,999,364
SPRWS has stated that, as a part of any water system ownership transition,
consideration needs to be given to the current value of these improvements. For
the purposes of this study, we have assumed that the acquisition cost would be $1,
which was the cost SPRWS paid to Maplewood in 1997 to take ownership of the
existing capital assets.
D.Financial Analysis
This analysis assumes that the city would use the current SPRWS water rates as a
basis for establishing their water rates under a city-owned water system scenario.
7
The revenue generated from these water rates was evaluated with the expenditures
previously identified.
The purchase price for the SPRWS water system is an important consideration in
determining the feasibility of Maplewood ownership of the system. We have
evaluated the financial feasibility of a city-owned water system based on an
acquisition cost of $1. The table below assumes water rates could be increased on
an annual basis at an average rate of approximately 5%, which is consistent with
SPRWS annual rate increases. These rate increases assume that a change in water
system ownership would have little or no impact on water rates for Maplewood
users.
AcquisitionAverage Annual Payback
Cost Rate Increase Year
$1 5% 2018
If the city chose to take ownership of the water system, SPRWS would charge
Maplewood for the wholesale cost to provide water to its users. SPRWS currently
provides wholesale water to Little Canada and Roseville at a cost of 71% of the
retail rate. This analysis assumes that SPRWS would charge Maplewood this
same rate; however this rate may be negotiated in a city purchase scenario.
The SPRWS retail rates per 100 cubic feet of water are shown below.
YearWinter RateSummer Rate
2010 $2.15 $2.25
2011 $2.27 $2.37
E.Rate Comparison
As previously mentioned, Maplewood water customers are currently served by
SPRWS, North St. Paul, Little Canada, Woodbury, and Roseville. The rates these
customers pay varies depending on who provides their water service. Below is a
rate table that compares typical winter usage and summer usage for each of the
city’s water suppliers.
Water Winter Summer
Supplier Rate (25,000 gallon) (40,000 gallon)
SPRWS2010$70.95$121.50
SPRWS2011$74.91$127.98
North St. Paul2010$50.70$81.00
Little Canada2010$81.84$126.39
Woodbury2010$25.36$48.56
Roseville2010$76.50$119.75
Roseville2011$83.05$134.55
8
Appendix D includes a report prepared by Ehlers that provides more detail on the
acquisition analysis.
%((-8-32%0'327-()6%8-327
Since 1997, city staff has coordinated with SPRWS staff on all aspects of the water
system, including design, construction, and funding for water system improvements.
Below are examples of some of the inherent challenges and inefficiencies that city staff
has observed with an outside agency owned water system.
A. Differing Philosophies on Water System Improvements
City staff considers all public infrastructure when considering the scope of work
for street reconstruction projects. Staff reviews roadway condition, as well as
sanitary sewer, water main, and storm sewer conditions. The city’s approach is to
replace aging underground utility infrastructure at the time streets are
reconstructed to avoid utility repairs that would require roadway patching. This
includes the replacement of all cast iron water main during street reconstruction
projects. SPRWS water main replacement criteria are based mainly on water
main break history instead of age or material type.
B. SPRWS Water Main Construction Requirements
On city street reconstruction projects with water main improvements, SPRWS
policy requires their crews to perform the water main construction; however,
SPRWS crews do not perform the excavation or backfilling operation. The city
must bid the excavation and backfill to the roadway contractor for the water main
construction. As a result, both the contractor and SPRWS crews are on site
during water main construction which creates some inefficiencies for water main
construction.
C. Invoicing
Since SPRWS operates independently from the city, agreements and invoicing
between the agencies occurs on a regular basis. City staff time and effort is
incurred to review and process these agreements and invoices.
There are some inherent inefficiencies and challenges with a public utility owned and
operated by an outside agency. City staff continues to build relationships with SPRWS
staff to minimize conflicts and streamline processes; however operating with a SPRWS
owned water system will continue to require coordination efforts.
9
7911%6=%2(6)'311)2(%8-327
Based on the analysis completed as a part of this report, we recommend the following:
A.5-year Capital Improvement Plan (CIP)
The City Council should consider adopting a 5-year CIP for water main
improvements. The implementation of this CIP will address city concerns
regarding the need to replace all cast iron water main during street reconstruction
projects.
B.Surcharge Increase
The St. Paul Water District Fund 407 has operated in a deficit for several years.
The City Council should continue discussions from their July 26, 2010 workshop
regarding the need to increase the current surcharge rate to eliminate this ongoing
deficit. If the City Council adopts a 5-year CIP for water main improvements,
surcharge revenues will need to increase to cover these additional costs or other
funding sources must be identified for the improvements.
C.Water System Acquisition
This report identified a number of factors that should be considered in evaluating
the feasibility of a city purchase of the water system.
Acquisition Cost
Initial debt
o
Payback duration
o
Initial Costs
Water system disconnects
o
Master metering
o
Water Rate
Acceptable rate increases
o
Increased City Staff
Management
o
Facility space
o
Additional Equipment
Facility space
o
Maintenance
o
Based on the analysis completed as a part of this study and depending on City Council
policy objectives, it is financially reasonable for the city to consider the purchase of the
water system from SPRWS. The City Council should consider all of the various
engineering, political, and financial factors in determining how to proceed. Negotiation
with SPRWS to determine the initial acquisition cost would be the first task to be
10
completed if the city elects to proceed further with the possible acquisition of the water
system.
11
City of MaplewoodCity of Maplewood
Water System EvaluationWater System Evaluation
City Project 10-09City Project 10-09
City Council Work SessionCity Council Work Session
May 9, 2011May 9, 2011
Agenda
Purpose of Study
Overview of Existing Water System
Proposed Water System CIP
Surcharge Analysis
Discuss Possible Acquisition of Water
System
Purpose of Study
Evaluate current water surcharge rates
•SPRWS and North St. Paul
•July 26, 2010 Work Session
•Increased SPRWS rate -2% to 4% (2011)
Evaluate possible changes in how the
City provides water service to residents
1
Existing Water System
80% of the City’s water system is
owned and operated by SPRWS
North St. Paul provides water service
to residents in the northeast part of the
City (794 accounts)
Limited properties served by Little
Canada (66 accounts), Roseville (5
accounts), and Woodbury (27
accounts), and a few private wells
Existing Water System
Existing SPRWS and North St. Paul
water mains vary in age and condition
City staff prefers to replace existing
cast iron water main (40 + years old)
when streets are reconstructed
SPRWS policy does not currently
provide funding for water main
replacement work unless certain break
criteria are met
Water System 5-Year CIP
Based on:
City’s street reconstruction program
Condition of existing water mains
within the proposed reconstruction areas
+/-6,000 feet of water main replacement
required each year (annual cost of +/-
$500,000)
Similar funding for future 5-year CIP’s
No replacement in North St. Paul area
2
Surcharge Analysis
Maplewood residents currently billed
directly by their water provider
SPRWS and North St. Paul bills include a
surcharge for water system related costs
Maplewood collects a 2% surcharge or
approx. $100,000 annually from SPRWS
SPRWS fund currently has $160,000 deficit
Maplewood collects $1.00 per account per
month or approx. $10,000 annually
from North St. Paul
Surcharge Analysis
Recommended SPRWS Surcharge Rates:
2010 Actual2% ($103,400)
2011Adopted4% ($188,000)
20125.25% ($257,000)
20136.25% ($318,000)
20147.00% ($371,000)
20157.75% ($427,000)
20168.50% ($487,000)
Past rates as high as 20% in 1998
No increases for North St. Paul
Water System Acquisition
Why Consider this Option?
Differing philosophy on main replacement
Simplify water main construction
Reduce conflict
City infrastructure managed as a whole
Can we save residents money?
Is it in the City’s long term best interests?
3
Impact of Water Main Repair
Impact of Water Main Repair
Water System Acquisition
Financial Analysis
Approx. 10 year break-even term assuming:
•$1 acquisition cost
•Rates similar to projected SPRWS rates/no
impacts to residents
Acquisition cost is significant factor
•Agreement stipulates SPRWS compensation for
depreciated value of improvements since 1997
Surcharge could be eliminated
Long-term City can control water rates
•Raw water purchase from SPRWS
4
Water System Acquisition
Why Not Consider this Option?
Initial set-up time and costs
•Staff/Equipment/Materials
•Billing Hardware and Software
Water system modifications
•Disconnects/master meters/service meters
Acquisition cost (SPRWS Agreement)
Additional debt/risk
•Payback term
Uncertainty/variables in analysis
Water System Acquisition
Maplewood/SPRWS Agreement
Termination for cause
Maplewood must compensate SPRWS for
depreciated value of improvements made
since 1997
5 year termination period
Water System Acquisition
SPRWS Coordination
Study kick-off meetingMay 7, 2010
Draft report for reviewFeb. 3, 2011
Coordination meetingFeb. 22, 2011
Goal for study process to be transparent and
include SPRWS
5
Water System Acquisition
Other Options?
Increased SPRWS investment into
Maplewood system
Continued efforts to improve coordination
and streamline processes
Change in approach to construction of new
SPRWS water main
Water System Acquisition
Next Steps
City Council input/direction
Finalize report
Implement recommendations/continue
discussions with SPRWS
Other Questions/Discussion
6
It °c
7. Agreement with -St: Paul Water Utility
a. Manager McGuire introduced the staff report.
b. Council member Koppen may-e-cLto au-tho- ire_ the
Seconded by Mayor Bastian Ayes - all
M ► XWX1-111►X
PLANNING1.
CMW Report E1
`Attachment 3
a. Council directed staff to bring back a report on how the ordinance of
the Planning Commission reads, make changes that would allow nine
members, not eleven. Also, how to define a quorum (with missing
members), etc.
2. HIGHWAY 36/HAZELWOOD - WHITE BEAR AVENUE TRAFFIC
a. Council directed staff to hold discussions about the traffic flow and
control with newly elected representatives after the November 5th
election.
M ADMINISTRATIVE PRESENTATIONS
1. Reschedule First City Council Meeting in November
a. Counci1member Koppen moved to hold the first_Novemb
November .12. 1996 due tQ the Veteran's Day Holida3
Ll—
Seconded by Councilmember Rossbach Ayes - all
2. Update on Maplewood`s 40th Anniversary Planning
a. Assistant City Manager Dawson presented an update of the plans for the
40th Anniversary observance.
N. ADJOURNMENT OF u ► .
Karen Guilfoile, City Clerk
29 Packet Page Number 64 of 64 10-14-96