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00-256Council File # �� � a s GL OR#G1�AL Presented By Referred To RESOLUTION Green Sfieet # 102877 OF,S'AINT PAUL, MINNESOTA I'O Committee: Date 1 WHEREAS, the City of Saint Paul and the Metropolitan Council have agreed on a revised billing 2 calculation in anticipation of the Metropolitan Council's new flow meters to be installed in 2001 3 but not later than 2002; and 4 5 6 7 8 9 10 11 12, 13 14 15 16 17 18 19 20 21 22 23 WHEREAS, the City of Saint Paul and the Metropolitan Council have agreed that the Cit�s billable wastewater flow shall be estimated and billed at 13.5 billion gallons per year during the "preliminary years" defined as 1999 through 2001 or 2002 depending on meter installation; and WHER,EAS, Metropolitan Council staff will review the estimate of 13.5 billion gallons per year after obtaining an average actual flow during the "finalization years" defined as 2002 through 2004 or 2003 through 2005 depending on meter installation; and WHER,EAS, the maximum annual variation between actual and the 13.5 billion gallon annual estimate is capped at one billion gallons per year; and WHEREAS, any asnounts owed by the City to the Metropolitan Council or by the Metropolitan Council to the City will be netted in 2005 or 2006 depending on meter installation, with payments to be spread up to 60 months at the City's option; and WHEREAS, the Metropolitan Council passed the attached resolution detailing this new billing calculation at their January 12, 2000 meeting; arnl ��.�? a.aa.� 00- �,5` 24 25 26 27 28 29 30 31 32 WHEREAS, the City of Saint Paul is required to pass a resolution concurring with the Metropolitan Council's resolution to make these new billing estimates effective; and Now, Therefore be it RESOLVED, that the Council of the City of Saint Paul does hereby agree to the terms of the attached Metropolitan Council January 12, 2000 resolution with its new flow allocation method and agrees to abide by its provisions. enanaB v — a eB2� os ro� Co e� Harris Lantry ei er Yeas Nays Absent — t� �— ✓ —� � S e � Adopted by Council: Date � � ���� Adoption Certified by Council Secretary � App1 m Requested by Department of: Public Works By: � Approval Recomme d b u get Director: By: �5n ��_� ��.f Form Approved by City Attorney: BY' 1�"�H{yhn // � ` a�aa OG Approved b Mayor for Submission to Council: � By ' � l� $EPAFTMENqOPFICFJCOUNCIL DATEINRIATED GREEN SH�ET NO. yO�`� •� Pubtic Works 1/24/2000 1nn I � n � n I �� eT CANTACT PERSON 8 PHONE Roger Puchreiter, 266-6248 MUST BE ON COUNCILAGENDA BY (DATE) Apri15, 2000 / DEPARTMENT ASSIGN � .A/J.� p. '�� CITYATTORNEY �Y�� GRYCIEAK NUMBEHFOR FOVfING ❑FINANCIALSEflVICESDIR.�❑FlNANCIALSERV/ACCTG a 5 v' 2 MAYOR(OR ASSISTANn �+dic Worl¢ A¢ambnt ❑ � Sewer UUIM Maraaere� TOTAL # OF SIGNATURE PAGES 1 (CLIP ALL LOCATIONS FOR SIGNATURE) ACTiON REpUESTED Approve City Council Resolution co�curring with the attached resolution of the Metropolitan Council amending the sewage flow calculation for [he Ci[y of Saint Paul. The City's resolution must be approved within 90 days of the Metropolitan CounciPs approval of this change (the Metropolitan Council adopted their resolution Jan. 12, 2000). This revised flow agreement represents a reducUOn of billable flow chazged [o the CiTy based on movement to metered flow and a recogni[ion by both the City and the Met Council that the flow model in place in recent yeazs has become obsolete. RECOMMENDATIONS'Approve (A) or Rele�� (R) _ PI.ANNING COMMISSION _ CIBCOMMITfEE _ QVILSERVICECOMMISSION A Sewer Utibry StaH CONTRACTS MUST ANSWEN THE FOLLOWING QUE5fION5: t. Has�hispersoNhrmeverworke0un0aracorrtrectto�ihistlepartrnent? VES NO 2. Has lhis perso�rtn ever been a cily employee? VES NO 3. Does this persoNfirm possess a skill not normaliy possessetl by any wrrent city employee? YES NO 4. Is �his persoMrtn a hrgetetl ventloR YES NO Erzplain all yes answers on s¢parate sheet antl attaeh to gr¢en sheet INfTIATING PROBLEM, ISSUE, OPPORTUNITY (WHO, WHAT, WHEN, WHERE, WHY): �., The City and Metropoli[an Council have been using a sewage flow model developed by Black and Veatch (engineering consultants mutually contracted by the Met Council and the City) since 1992�to determine the amount of sewage treated a[ the Metro Plant that should be chazged to the City of Saint Paul. Saint Paul has taken aggressive steps in the last ten years to remove extraneous flow from inflow and infiltration, which caused the Black and Veatch model to calculate flow volumes higher than reality. The Mehopolitan Council is installing new meters at the Meh Plant that wili satisfy the longstanding concerns of the City related to metering and the resul[s obtained for an"end-of-pipe" community like Saint Paul. While new meters were being sought and specifications developed, Metropolitan Council staff developed methods to more accurateFy calculate Saint Paul flows with the existing meters. Their reseazch shows the actual flow [o be approximately one billion gallons per year ]ess than the Black and Veatch model indicates. Both the City and the Metropolitan Council agee the time is right to move away from the Black and Veatch flow model to metered flow, using the interim metering calculations developed by the Metropolitan Council until the new meters aze installed, and thereafter using the flow amounu recorded by the meters. ADVANTAGES IFAPPROVED: ������ This reduced flow will reduce the City's chazges from the Metropolitan Council between $1 million and $I.5 �005. vr:�, ��"��a.'yF'? S:�'�?¢�i DISADVAMAGES IF APPftOVED: None. �i if4� � R DISADVAMAGESIFNOTAPPFOVED: �ry � q � e`¢ e e wm emrv ec.m = The City will continue to use the Black and Veatch flow model, which has been demonstrated to be inaccurate and will cost the City between FINANCIAL INFORMATION (EXPL4IN) 1'OiALAMOUNTOFTRANSACTION$ COST/REVENUEBUDGETED(CIRCLEONE) YES NO FUNDING SOURCE ACTIVIN NUMBER 00 -�S 6 Executive Summary Item: 1999-23 E Environment Committee Meeting date: November 23,1999 Metropofitan Council Meeting of January 5, 2000 Date: November 16, 1999 Subject: City of St. Paul Flow and Biliing, Resolution No. 2000 - District(s), Member{s): Ail Policy/tegal Reference: MN Statute 473.517, MCES Policy 6.1.5.1.a Staff Prepared/PresenYed: Jason Willett, MCES Finance Manager (651/602-1196) Division/Departmant: MCES c/o Helen Boyer, 602-1106 proposed Action/Motion Tha[ the Metropolitan Council adopt a resolution to implement an understandin� with the City of St. Paul on how to measure and bill for wastewater flow for the years 1999 — 2002. ISSUB(S� What methods and assumptions are appropriate for billin� the ciry of St. Paul's wastewater tlow, prior to the installation of new meters in 2001? Overview and Funding It is the Council's intent to bill St. Paul, as accurately as possible, for flow generated within the City. The city has raised concems about the accuracy of both the flow meters measuring the City's flow to the Metro Wastzwater Treatment Plan, and the analytical model developed ociginally by Black & Veatch to estimate the same flow which has been used to determine the flow for billin� through 1998. The Council intends to replace the existing meters wi[h new ma�netic flow meters during 2001, and both parties believe these to be the most accurate methodology for the lon� term determination of St. Paut's flow. Staff at the City and Council recommend an interim arrangement as follows: . Preliminary billing for wastewater flow for 1999 — 2001 will be set at 13.5 billion gallons per year (i.e., 1.125 billion gallons a month). . The monthly wastewater chazge for these three (3) years will be retroactively adjusted in 2005. The adjustment shall be based on average actual monthly flow for 2002-2004 applied to the period 1999-2001, limited to a change of not more than 3.0 billion gallons from the preliminary figure of 40.5 billion gallons (for the 3 year period). . A total adjusted charge will be calculated by mid-2005, resulting in either a net payment by the City or refund by the Council. The payment or refund will include interest at 5% per annum. The entity owin� a payment or refund will have the option of making monthly installment payments af the principal amount for up to a five (5) year period. The flow would be adjusted should the Ciry gain or lose a major �va[er wsromer prior to the end of 200 L Implemen[acion of the Council's resolution would be wntingent on the St. Paul City Council adoptin� a resolution agreein� ro the provisions of the Metropolitan CounciPs resolution and a�reement by the City to continue its ptanned pro�ram of major sewer repair and replacement. Over time, this proposal is ezpected to be revenue neutral to the region. A draft resolution will be distributed on November 23. ❑ Infrastructure: OQuality of life: H Communication(constituency building: This proposai has been worked out on a collaborative basis with the City of St. Paul staff. �.a•(� oo-as� METROPOLITAN COUNCIL Meazs Pazk Centre, 230 East Fifth Street, Saint Paul, MN SS I01 651/602-1000 TDD 651/291-0904 RESOLUTION NO. 00- RESOLUTION ESTABLISHING CITY OF ST. PAUL WASTEWATER SERVICES COST ALLOCATION FOR CALENDAR YEARS 1999 THROUGH 2O05 WHEREAS, the City of St. Paul ("City") has raised concems about the accuracy of both the flow meters measuring the City's flow into the metropolitan disposal system and the analytical model used by the Metropolitan Council to estimate the flow; and WHEREAS, the Council is in the process of replacing the existing meters with new magnetic flow meters and the new meters aze projected to be in place and operational in 2001, and not later than 2002; and WHEREAS, Council staff has met with City staff regarding the measurement of the City's flow and the replacement of the meters described above and City staff agree that such meters are the most accurate methodology for long-term determination of the City's flow; and WHEREAS, determination of the City's flow is unique because of the size of its wastewater flow and the technical challenges in accurately measuring the flows; and WHEREAS, the Council desires to (a) establish a method to address the City's concerns during the period until the new meters are in place and operational, (b) establish a reasonable transition to measurements by the new meters, and (c) provide for proper allocation of costs durin; calendar yeaz 1999 and through the Transition Yeaz as defined in this resolution; and WHEREAS, Minnesota Statutes, section 473.517, provides that the Council shall determine the method of allocating the costs of wastewater services to local units of govemment dischargin� sewage to the metropolitan disposal system. NOW, THEREFORE, BE IT RESOLVED by the Metropolitan Council as follows: (1) Target Date for Completion of New Meters. The ne�v meters for measurement of City flow are targeted to be in place and operational in 2001, and not later than 2002. If the new meters are in place and operational on or before July 1, 2001, then billine for the Cit}- will use the preliminary billing flow basis set forth in this resolution through calendar year 2001. If the new meters are in place and operational after July 1, 2001, then billin� for the City will use the preliminary billing flow basis set forth in this resolution through calendar year 2002. Council staff will notify the City if it becomes reasonably probable that the meters �vill not be operational on or before July 1, 2001. For the purposes of this resolution the following definitions will apply. �t,a•P. 0� -�5 fe (a) If the Council determines that the new meters are in place and operational on or before July 1, 2001 then: the "Preliminary Years" are calendar years 1999 through 2001, the "Transition Yeaz" is calendar yeaz 2002, and the "Finalization Years" aze calendaz years 2002 through 2004. (b) If the Council determines that the new meters are in place and operational after July 1, 2001 then: the "Preliminary Years" are calendar years 1999 through 2002, the "Transition Year" is calendar year 2003, and the "Finalization Years" are calendar years 2003 through 2005. (c) "Billing Flow Value" means the wastew•ater flow attributed by the Council's cost allocation methodology to a particular calendar month solely for the purposes of billing in that month. (2) Preliminary Monthly Billing Flow Value. Council staff is directed to bill for wastewater flow from the City of St. Paul during the Pretiminary Years and the Transition Year as follows: (a) For the Preliminary Years, billing for each month will be on the basis of a preliminary monthly Billin; Flow Value of 1.125 billion gallons/month. Council staff will adjust payments received from the City for any Preliminary Years which were received prior to the effectiveness of this resolution so that the City's total payment for each such year is based on 13.5 billion gallons/year. Upon such adjustment, and for the purposes of the calculations in this resolution, the City shall be deemed to have made such payments based on a monthly Billing Flow Value of 1.125 billion gallons. (b) In order to allow for a transition period at the City's option, the Transition Year billing will be determined as follows. On or before December 1 of the year preceding the Transition Year, the City will notify the Council �vhether it wishes the Transition Year monthly billing to be: (i) on the basis of actual monthly flows as measured by the new meters and in accordance with the Council's cost allocation methodology then in effect for the Transition Year (currently, the average monthly flow of the quarter six months prior to the billing month), or (ii) on the basis of a preliminary monthly Billin� Flow Value of 1.125 billion gailons/month. Council staff will bill for the Transition Year in accordance with the option selected by the City. (3) Final Monthly Billing Florv Value. Council staff is directed to determine the City's final Biliing Flow Value for each month of the Preliminary Years in the follo�i'in� manner. The total flow for the Finalization Years as measured by the new meters will be determined and the average monthly flow over that three yeaz period will be calculated subject to the following limitations and using a"Base Flow" of 40.5 billion gallons: 2 �,a.� oo.�.s� (a) If the total flow for the Finalization Yeazs is greater than the Base Flow plus 3 billion gallons, then the value of the Base Flow plus 3 billion gallons will be used for Yhe purposes of calculating the monthly average; or (b) If the total flow for the Finalization Yeazs is less than the Base Flow minus 3 billion gallons, then the value of the Base Flow minus 3 billion gallons will be used for the purposes of calculating the monthly average. The following adjustments in the calculation will be made in order to eliminate the distortion in the calculation caused by the gain or loss by the City of any Major Water Customers (def:ned as any single customer facility in the City which buys a quantity of water greater than 0.5 billion gallonslyear): (a) If the City gains or loses any Major Water Customers during the Finalization Years, the actual total flow in such yeazs to be used solely for the purposes of determining the retroactive final monthly Billing Flow Value in the Preliminary Yeazs shall be adjusted dowm�azd or upward to reflect the amount of such gain or loss, respectively, during the period after gain or loss of Yhe customer. In addition, the Base Flow for the purposes of the limitations above will also be adjusted downward or upward to reflect the an�ount of such gain or loss, respectively, during the period afrer gain or loss of the customer. (b) If the City gains or loses any Major Water Customers during the Preliminary Yeazs, the actual total flow in the Finalization Years to be used solely for the purposes of determining the retroactive final monthly Billin� Flow Value in the Preliminary Years shall be adjusted downward or upward to reflect the amoant of such the gain or loss, respectively, for the purpose of determining the monthly average for those months prior to the gain or loss of the customer. In addition, the Base Flow for the purposes of the limitations above wili also be adjusted downward or upwazd to reflect the amount of such gain or loss, respectively, for the purpose of determining the monthly average for those months prior to the gain or loss of the customer. The average monthly flow calculated in the manner described above will then be considered and determined retroactively to be the final Billing Flow Value for each month during the Preliminary Yeazs. The final Billing Fiow Value for each month of the Transition Year will be on the basis of actual monthly flows as measured by the new meters and in accordance «�ith the Council's cost allocation methodology then in effect for the Transition Year. (4) Calculation and Payment of Additional Charge or Refund. Council staff wi11 calculate the difference between the final Billing Flow Value (based on pazagraph 3) and the preliminary Billing Flow Value (based on para;raph 2) for each month during the Preliminary Years (and also for each month of the Transition Year if the City exercised the option to be billed on a preliminary Billing Flow Value of 1.125 billion gallons/month under ���-P� 00 .�s � paragraph 2b). Council staff will then catculate the amount of payment owed by, or refund due, the City under this pazagraph and will notify the City of the results of the calculation on or before June 1 of the yeaz following the last Finalization Yeaz. (a) For each such month in which the final Billing Flow Value exceeds the preliminary $illing Flow Value, the City will pay to the Council an additional amount for wastewater services for that month based on the extra billing flow and the per gallon charge for the relevant yeaz, plus interest on such amount at 5 percent per annum from and after the due date for that month's payment and through July 1 of the year following the last Finalization Yeaz (the "Due Date"). (b) For each such month in which the final Billing Flow Value is Iess than the preliminary Billing Flow Value, the Council will refund to the City the excess amount the City paid for wastewater services based on the lesser billing flow and the per gallon chazge for the relevant year, plus interest on such amount at 5 percent per annum from and after the date that month's payment was made by the City and through the Due Date. (c) If the aggregate of amounts owed (including interest) under paragraph (a) exceeds the aggregate of refund amounts owed (including interest) under pazagraph (b), any refund amount owed by the Council to the City under pazagraph (b) will be offset and the balance will be a charge payable by the City to the Council under Minnesota Statutes, section 473.521, and paid by the City to the Council on or before the Due Date. (d) If the aggregate of refund amounts owed (including interest) under paragraph (b) exceeds the aggregate of amounts owed (including intezest) under paragraph (a), any amount owed by the City to the Council under paragraph (a) will be offset and the balance will be refunded by the Council to the City on or before the Due Date. (e) If the total payment amount or refund owed under paragraph (c) or (d) (including interest) exceeds $500,000 then, at the option of the entity owing the payment or refund, such amount (including interest) shall be paid to the other entity in equal monthly payments for a period commencing on the Due Date and not exceeding 60 months. Each payment shall also include paymeni of interest on the unpaid balance at an annual percentage ratz of 5 percent. Such payments will be included by the Council as an itemized additional wastewater charge or credit, as the case may be, on the Cit;�'s normal monthly billing for wastewater services. (5) Effectiveness of Resolution. Implementation of this resolution is effective and contingent upon the City of St. Paul passing a resolution by its city council, in a form acceptable to the Council, which: 4 -�t. �P. y �,_ _. � 0 0 -as b (a) references this resolution and the above allocation method; and (b) agrees to abide by its provisions; and (c) agrees to continue the City's planned program of major sewer repair and replacement. In the event the City fails to adopt such a resolution on or before 90 days after the Council adopts this resolution, then this resolution shall be null and void and Council staff will continue to determine and bill the City's wastewater flows using the Council's established cost allocation methodology and reasonable judgement as to the volume of such flows (currently based on an analytical model developed by the engineering firm of Black and Veatch under contract to the Councii). (6) Reservation of Statutory Aufhority. Nothing in this resotution shall be deemed to modify or limit the statutory responsibility or authority of the Council to determine the allocation of costs of wastewater services to local units of govemment discharging sewage to the metropolitan disposal system. Adopted this day of January, 2000. Ted Mondale, Chair Sandi Lindstrom, Recording Secretary 'l/v� ' � • �' Council File # �� � a s GL OR#G1�AL Presented By Referred To RESOLUTION Green Sfieet # 102877 OF,S'AINT PAUL, MINNESOTA I'O Committee: Date 1 WHEREAS, the City of Saint Paul and the Metropolitan Council have agreed on a revised billing 2 calculation in anticipation of the Metropolitan Council's new flow meters to be installed in 2001 3 but not later than 2002; and 4 5 6 7 8 9 10 11 12, 13 14 15 16 17 18 19 20 21 22 23 WHEREAS, the City of Saint Paul and the Metropolitan Council have agreed that the Cit�s billable wastewater flow shall be estimated and billed at 13.5 billion gallons per year during the "preliminary years" defined as 1999 through 2001 or 2002 depending on meter installation; and WHER,EAS, Metropolitan Council staff will review the estimate of 13.5 billion gallons per year after obtaining an average actual flow during the "finalization years" defined as 2002 through 2004 or 2003 through 2005 depending on meter installation; and WHER,EAS, the maximum annual variation between actual and the 13.5 billion gallon annual estimate is capped at one billion gallons per year; and WHEREAS, any asnounts owed by the City to the Metropolitan Council or by the Metropolitan Council to the City will be netted in 2005 or 2006 depending on meter installation, with payments to be spread up to 60 months at the City's option; and WHEREAS, the Metropolitan Council passed the attached resolution detailing this new billing calculation at their January 12, 2000 meeting; arnl ��.�? a.aa.� 00- �,5` 24 25 26 27 28 29 30 31 32 WHEREAS, the City of Saint Paul is required to pass a resolution concurring with the Metropolitan Council's resolution to make these new billing estimates effective; and Now, Therefore be it RESOLVED, that the Council of the City of Saint Paul does hereby agree to the terms of the attached Metropolitan Council January 12, 2000 resolution with its new flow allocation method and agrees to abide by its provisions. enanaB v — a eB2� os ro� Co e� Harris Lantry ei er Yeas Nays Absent — t� �— ✓ —� � S e � Adopted by Council: Date � � ���� Adoption Certified by Council Secretary � App1 m Requested by Department of: Public Works By: � Approval Recomme d b u get Director: By: �5n ��_� ��.f Form Approved by City Attorney: BY' 1�"�H{yhn // � ` a�aa OG Approved b Mayor for Submission to Council: � By ' � l� $EPAFTMENqOPFICFJCOUNCIL DATEINRIATED GREEN SH�ET NO. yO�`� •� Pubtic Works 1/24/2000 1nn I � n � n I �� eT CANTACT PERSON 8 PHONE Roger Puchreiter, 266-6248 MUST BE ON COUNCILAGENDA BY (DATE) Apri15, 2000 / DEPARTMENT ASSIGN � .A/J.� p. '�� CITYATTORNEY �Y�� GRYCIEAK NUMBEHFOR FOVfING ❑FINANCIALSEflVICESDIR.�❑FlNANCIALSERV/ACCTG a 5 v' 2 MAYOR(OR ASSISTANn �+dic Worl¢ A¢ambnt ❑ � Sewer UUIM Maraaere� TOTAL # OF SIGNATURE PAGES 1 (CLIP ALL LOCATIONS FOR SIGNATURE) ACTiON REpUESTED Approve City Council Resolution co�curring with the attached resolution of the Metropolitan Council amending the sewage flow calculation for [he Ci[y of Saint Paul. The City's resolution must be approved within 90 days of the Metropolitan CounciPs approval of this change (the Metropolitan Council adopted their resolution Jan. 12, 2000). This revised flow agreement represents a reducUOn of billable flow chazged [o the CiTy based on movement to metered flow and a recogni[ion by both the City and the Met Council that the flow model in place in recent yeazs has become obsolete. RECOMMENDATIONS'Approve (A) or Rele�� (R) _ PI.ANNING COMMISSION _ CIBCOMMITfEE _ QVILSERVICECOMMISSION A Sewer Utibry StaH CONTRACTS MUST ANSWEN THE FOLLOWING QUE5fION5: t. Has�hispersoNhrmeverworke0un0aracorrtrectto�ihistlepartrnent? VES NO 2. Has lhis perso�rtn ever been a cily employee? VES NO 3. Does this persoNfirm possess a skill not normaliy possessetl by any wrrent city employee? YES NO 4. Is �his persoMrtn a hrgetetl ventloR YES NO Erzplain all yes answers on s¢parate sheet antl attaeh to gr¢en sheet INfTIATING PROBLEM, ISSUE, OPPORTUNITY (WHO, WHAT, WHEN, WHERE, WHY): �., The City and Metropoli[an Council have been using a sewage flow model developed by Black and Veatch (engineering consultants mutually contracted by the Met Council and the City) since 1992�to determine the amount of sewage treated a[ the Metro Plant that should be chazged to the City of Saint Paul. Saint Paul has taken aggressive steps in the last ten years to remove extraneous flow from inflow and infiltration, which caused the Black and Veatch model to calculate flow volumes higher than reality. The Mehopolitan Council is installing new meters at the Meh Plant that wili satisfy the longstanding concerns of the City related to metering and the resul[s obtained for an"end-of-pipe" community like Saint Paul. While new meters were being sought and specifications developed, Metropolitan Council staff developed methods to more accurateFy calculate Saint Paul flows with the existing meters. Their reseazch shows the actual flow [o be approximately one billion gallons per year ]ess than the Black and Veatch model indicates. Both the City and the Metropolitan Council agee the time is right to move away from the Black and Veatch flow model to metered flow, using the interim metering calculations developed by the Metropolitan Council until the new meters aze installed, and thereafter using the flow amounu recorded by the meters. ADVANTAGES IFAPPROVED: ������ This reduced flow will reduce the City's chazges from the Metropolitan Council between $1 million and $I.5 �005. vr:�, ��"��a.'yF'? S:�'�?¢�i DISADVAMAGES IF APPftOVED: None. �i if4� � R DISADVAMAGESIFNOTAPPFOVED: �ry � q � e`¢ e e wm emrv ec.m = The City will continue to use the Black and Veatch flow model, which has been demonstrated to be inaccurate and will cost the City between FINANCIAL INFORMATION (EXPL4IN) 1'OiALAMOUNTOFTRANSACTION$ COST/REVENUEBUDGETED(CIRCLEONE) YES NO FUNDING SOURCE ACTIVIN NUMBER 00 -�S 6 Executive Summary Item: 1999-23 E Environment Committee Meeting date: November 23,1999 Metropofitan Council Meeting of January 5, 2000 Date: November 16, 1999 Subject: City of St. Paul Flow and Biliing, Resolution No. 2000 - District(s), Member{s): Ail Policy/tegal Reference: MN Statute 473.517, MCES Policy 6.1.5.1.a Staff Prepared/PresenYed: Jason Willett, MCES Finance Manager (651/602-1196) Division/Departmant: MCES c/o Helen Boyer, 602-1106 proposed Action/Motion Tha[ the Metropolitan Council adopt a resolution to implement an understandin� with the City of St. Paul on how to measure and bill for wastewater flow for the years 1999 — 2002. ISSUB(S� What methods and assumptions are appropriate for billin� the ciry of St. Paul's wastewater tlow, prior to the installation of new meters in 2001? Overview and Funding It is the Council's intent to bill St. Paul, as accurately as possible, for flow generated within the City. The city has raised concems about the accuracy of both the flow meters measuring the City's flow to the Metro Wastzwater Treatment Plan, and the analytical model developed ociginally by Black & Veatch to estimate the same flow which has been used to determine the flow for billin� through 1998. The Council intends to replace the existing meters wi[h new ma�netic flow meters during 2001, and both parties believe these to be the most accurate methodology for the lon� term determination of St. Paut's flow. Staff at the City and Council recommend an interim arrangement as follows: . Preliminary billing for wastewater flow for 1999 — 2001 will be set at 13.5 billion gallons per year (i.e., 1.125 billion gallons a month). . The monthly wastewater chazge for these three (3) years will be retroactively adjusted in 2005. The adjustment shall be based on average actual monthly flow for 2002-2004 applied to the period 1999-2001, limited to a change of not more than 3.0 billion gallons from the preliminary figure of 40.5 billion gallons (for the 3 year period). . A total adjusted charge will be calculated by mid-2005, resulting in either a net payment by the City or refund by the Council. The payment or refund will include interest at 5% per annum. The entity owin� a payment or refund will have the option of making monthly installment payments af the principal amount for up to a five (5) year period. The flow would be adjusted should the Ciry gain or lose a major �va[er wsromer prior to the end of 200 L Implemen[acion of the Council's resolution would be wntingent on the St. Paul City Council adoptin� a resolution agreein� ro the provisions of the Metropolitan CounciPs resolution and a�reement by the City to continue its ptanned pro�ram of major sewer repair and replacement. Over time, this proposal is ezpected to be revenue neutral to the region. A draft resolution will be distributed on November 23. ❑ Infrastructure: OQuality of life: H Communication(constituency building: This proposai has been worked out on a collaborative basis with the City of St. Paul staff. �.a•(� oo-as� METROPOLITAN COUNCIL Meazs Pazk Centre, 230 East Fifth Street, Saint Paul, MN SS I01 651/602-1000 TDD 651/291-0904 RESOLUTION NO. 00- RESOLUTION ESTABLISHING CITY OF ST. PAUL WASTEWATER SERVICES COST ALLOCATION FOR CALENDAR YEARS 1999 THROUGH 2O05 WHEREAS, the City of St. Paul ("City") has raised concems about the accuracy of both the flow meters measuring the City's flow into the metropolitan disposal system and the analytical model used by the Metropolitan Council to estimate the flow; and WHEREAS, the Council is in the process of replacing the existing meters with new magnetic flow meters and the new meters aze projected to be in place and operational in 2001, and not later than 2002; and WHEREAS, Council staff has met with City staff regarding the measurement of the City's flow and the replacement of the meters described above and City staff agree that such meters are the most accurate methodology for long-term determination of the City's flow; and WHEREAS, determination of the City's flow is unique because of the size of its wastewater flow and the technical challenges in accurately measuring the flows; and WHEREAS, the Council desires to (a) establish a method to address the City's concerns during the period until the new meters are in place and operational, (b) establish a reasonable transition to measurements by the new meters, and (c) provide for proper allocation of costs durin; calendar yeaz 1999 and through the Transition Yeaz as defined in this resolution; and WHEREAS, Minnesota Statutes, section 473.517, provides that the Council shall determine the method of allocating the costs of wastewater services to local units of govemment dischargin� sewage to the metropolitan disposal system. NOW, THEREFORE, BE IT RESOLVED by the Metropolitan Council as follows: (1) Target Date for Completion of New Meters. The ne�v meters for measurement of City flow are targeted to be in place and operational in 2001, and not later than 2002. If the new meters are in place and operational on or before July 1, 2001, then billine for the Cit}- will use the preliminary billing flow basis set forth in this resolution through calendar year 2001. If the new meters are in place and operational after July 1, 2001, then billin� for the City will use the preliminary billing flow basis set forth in this resolution through calendar year 2002. Council staff will notify the City if it becomes reasonably probable that the meters �vill not be operational on or before July 1, 2001. For the purposes of this resolution the following definitions will apply. �t,a•P. 0� -�5 fe (a) If the Council determines that the new meters are in place and operational on or before July 1, 2001 then: the "Preliminary Years" are calendar years 1999 through 2001, the "Transition Yeaz" is calendar yeaz 2002, and the "Finalization Years" aze calendaz years 2002 through 2004. (b) If the Council determines that the new meters are in place and operational after July 1, 2001 then: the "Preliminary Years" are calendar years 1999 through 2002, the "Transition Year" is calendar year 2003, and the "Finalization Years" are calendar years 2003 through 2005. (c) "Billing Flow Value" means the wastew•ater flow attributed by the Council's cost allocation methodology to a particular calendar month solely for the purposes of billing in that month. (2) Preliminary Monthly Billing Flow Value. Council staff is directed to bill for wastewater flow from the City of St. Paul during the Pretiminary Years and the Transition Year as follows: (a) For the Preliminary Years, billing for each month will be on the basis of a preliminary monthly Billin; Flow Value of 1.125 billion gallons/month. Council staff will adjust payments received from the City for any Preliminary Years which were received prior to the effectiveness of this resolution so that the City's total payment for each such year is based on 13.5 billion gallons/year. Upon such adjustment, and for the purposes of the calculations in this resolution, the City shall be deemed to have made such payments based on a monthly Billing Flow Value of 1.125 billion gallons. (b) In order to allow for a transition period at the City's option, the Transition Year billing will be determined as follows. On or before December 1 of the year preceding the Transition Year, the City will notify the Council �vhether it wishes the Transition Year monthly billing to be: (i) on the basis of actual monthly flows as measured by the new meters and in accordance with the Council's cost allocation methodology then in effect for the Transition Year (currently, the average monthly flow of the quarter six months prior to the billing month), or (ii) on the basis of a preliminary monthly Billin� Flow Value of 1.125 billion gailons/month. Council staff will bill for the Transition Year in accordance with the option selected by the City. (3) Final Monthly Billing Florv Value. Council staff is directed to determine the City's final Biliing Flow Value for each month of the Preliminary Years in the follo�i'in� manner. The total flow for the Finalization Years as measured by the new meters will be determined and the average monthly flow over that three yeaz period will be calculated subject to the following limitations and using a"Base Flow" of 40.5 billion gallons: 2 �,a.� oo.�.s� (a) If the total flow for the Finalization Yeazs is greater than the Base Flow plus 3 billion gallons, then the value of the Base Flow plus 3 billion gallons will be used for Yhe purposes of calculating the monthly average; or (b) If the total flow for the Finalization Yeazs is less than the Base Flow minus 3 billion gallons, then the value of the Base Flow minus 3 billion gallons will be used for the purposes of calculating the monthly average. The following adjustments in the calculation will be made in order to eliminate the distortion in the calculation caused by the gain or loss by the City of any Major Water Customers (def:ned as any single customer facility in the City which buys a quantity of water greater than 0.5 billion gallonslyear): (a) If the City gains or loses any Major Water Customers during the Finalization Years, the actual total flow in such yeazs to be used solely for the purposes of determining the retroactive final monthly Billing Flow Value in the Preliminary Yeazs shall be adjusted dowm�azd or upward to reflect the amount of such gain or loss, respectively, during the period after gain or loss of Yhe customer. In addition, the Base Flow for the purposes of the limitations above will also be adjusted downward or upward to reflect the an�ount of such gain or loss, respectively, during the period afrer gain or loss of the customer. (b) If the City gains or loses any Major Water Customers during the Preliminary Yeazs, the actual total flow in the Finalization Years to be used solely for the purposes of determining the retroactive final monthly Billin� Flow Value in the Preliminary Years shall be adjusted downward or upward to reflect the amoant of such the gain or loss, respectively, for the purpose of determining the monthly average for those months prior to the gain or loss of the customer. In addition, the Base Flow for the purposes of the limitations above wili also be adjusted downward or upwazd to reflect the amount of such gain or loss, respectively, for the purpose of determining the monthly average for those months prior to the gain or loss of the customer. The average monthly flow calculated in the manner described above will then be considered and determined retroactively to be the final Billing Flow Value for each month during the Preliminary Yeazs. The final Billing Fiow Value for each month of the Transition Year will be on the basis of actual monthly flows as measured by the new meters and in accordance «�ith the Council's cost allocation methodology then in effect for the Transition Year. (4) Calculation and Payment of Additional Charge or Refund. Council staff wi11 calculate the difference between the final Billing Flow Value (based on pazagraph 3) and the preliminary Billing Flow Value (based on para;raph 2) for each month during the Preliminary Years (and also for each month of the Transition Year if the City exercised the option to be billed on a preliminary Billing Flow Value of 1.125 billion gallons/month under ���-P� 00 .�s � paragraph 2b). Council staff will then catculate the amount of payment owed by, or refund due, the City under this pazagraph and will notify the City of the results of the calculation on or before June 1 of the yeaz following the last Finalization Yeaz. (a) For each such month in which the final Billing Flow Value exceeds the preliminary $illing Flow Value, the City will pay to the Council an additional amount for wastewater services for that month based on the extra billing flow and the per gallon charge for the relevant yeaz, plus interest on such amount at 5 percent per annum from and after the due date for that month's payment and through July 1 of the year following the last Finalization Yeaz (the "Due Date"). (b) For each such month in which the final Billing Flow Value is Iess than the preliminary Billing Flow Value, the Council will refund to the City the excess amount the City paid for wastewater services based on the lesser billing flow and the per gallon chazge for the relevant year, plus interest on such amount at 5 percent per annum from and after the date that month's payment was made by the City and through the Due Date. (c) If the aggregate of amounts owed (including interest) under paragraph (a) exceeds the aggregate of refund amounts owed (including interest) under pazagraph (b), any refund amount owed by the Council to the City under pazagraph (b) will be offset and the balance will be a charge payable by the City to the Council under Minnesota Statutes, section 473.521, and paid by the City to the Council on or before the Due Date. (d) If the aggregate of refund amounts owed (including interest) under paragraph (b) exceeds the aggregate of amounts owed (including intezest) under paragraph (a), any amount owed by the City to the Council under paragraph (a) will be offset and the balance will be refunded by the Council to the City on or before the Due Date. (e) If the total payment amount or refund owed under paragraph (c) or (d) (including interest) exceeds $500,000 then, at the option of the entity owing the payment or refund, such amount (including interest) shall be paid to the other entity in equal monthly payments for a period commencing on the Due Date and not exceeding 60 months. Each payment shall also include paymeni of interest on the unpaid balance at an annual percentage ratz of 5 percent. Such payments will be included by the Council as an itemized additional wastewater charge or credit, as the case may be, on the Cit;�'s normal monthly billing for wastewater services. (5) Effectiveness of Resolution. Implementation of this resolution is effective and contingent upon the City of St. Paul passing a resolution by its city council, in a form acceptable to the Council, which: 4 -�t. �P. y �,_ _. � 0 0 -as b (a) references this resolution and the above allocation method; and (b) agrees to abide by its provisions; and (c) agrees to continue the City's planned program of major sewer repair and replacement. In the event the City fails to adopt such a resolution on or before 90 days after the Council adopts this resolution, then this resolution shall be null and void and Council staff will continue to determine and bill the City's wastewater flows using the Council's established cost allocation methodology and reasonable judgement as to the volume of such flows (currently based on an analytical model developed by the engineering firm of Black and Veatch under contract to the Councii). (6) Reservation of Statutory Aufhority. Nothing in this resotution shall be deemed to modify or limit the statutory responsibility or authority of the Council to determine the allocation of costs of wastewater services to local units of govemment discharging sewage to the metropolitan disposal system. Adopted this day of January, 2000. Ted Mondale, Chair Sandi Lindstrom, Recording Secretary 'l/v� ' � • �' Council File # �� � a s GL OR#G1�AL Presented By Referred To RESOLUTION Green Sfieet # 102877 OF,S'AINT PAUL, MINNESOTA I'O Committee: Date 1 WHEREAS, the City of Saint Paul and the Metropolitan Council have agreed on a revised billing 2 calculation in anticipation of the Metropolitan Council's new flow meters to be installed in 2001 3 but not later than 2002; and 4 5 6 7 8 9 10 11 12, 13 14 15 16 17 18 19 20 21 22 23 WHEREAS, the City of Saint Paul and the Metropolitan Council have agreed that the Cit�s billable wastewater flow shall be estimated and billed at 13.5 billion gallons per year during the "preliminary years" defined as 1999 through 2001 or 2002 depending on meter installation; and WHER,EAS, Metropolitan Council staff will review the estimate of 13.5 billion gallons per year after obtaining an average actual flow during the "finalization years" defined as 2002 through 2004 or 2003 through 2005 depending on meter installation; and WHER,EAS, the maximum annual variation between actual and the 13.5 billion gallon annual estimate is capped at one billion gallons per year; and WHEREAS, any asnounts owed by the City to the Metropolitan Council or by the Metropolitan Council to the City will be netted in 2005 or 2006 depending on meter installation, with payments to be spread up to 60 months at the City's option; and WHEREAS, the Metropolitan Council passed the attached resolution detailing this new billing calculation at their January 12, 2000 meeting; arnl ��.�? a.aa.� 00- �,5` 24 25 26 27 28 29 30 31 32 WHEREAS, the City of Saint Paul is required to pass a resolution concurring with the Metropolitan Council's resolution to make these new billing estimates effective; and Now, Therefore be it RESOLVED, that the Council of the City of Saint Paul does hereby agree to the terms of the attached Metropolitan Council January 12, 2000 resolution with its new flow allocation method and agrees to abide by its provisions. enanaB v — a eB2� os ro� Co e� Harris Lantry ei er Yeas Nays Absent — t� �— ✓ —� � S e � Adopted by Council: Date � � ���� Adoption Certified by Council Secretary � App1 m Requested by Department of: Public Works By: � Approval Recomme d b u get Director: By: �5n ��_� ��.f Form Approved by City Attorney: BY' 1�"�H{yhn // � ` a�aa OG Approved b Mayor for Submission to Council: � By ' � l� $EPAFTMENqOPFICFJCOUNCIL DATEINRIATED GREEN SH�ET NO. yO�`� •� Pubtic Works 1/24/2000 1nn I � n � n I �� eT CANTACT PERSON 8 PHONE Roger Puchreiter, 266-6248 MUST BE ON COUNCILAGENDA BY (DATE) Apri15, 2000 / DEPARTMENT ASSIGN � .A/J.� p. '�� CITYATTORNEY �Y�� GRYCIEAK NUMBEHFOR FOVfING ❑FINANCIALSEflVICESDIR.�❑FlNANCIALSERV/ACCTG a 5 v' 2 MAYOR(OR ASSISTANn �+dic Worl¢ A¢ambnt ❑ � Sewer UUIM Maraaere� TOTAL # OF SIGNATURE PAGES 1 (CLIP ALL LOCATIONS FOR SIGNATURE) ACTiON REpUESTED Approve City Council Resolution co�curring with the attached resolution of the Metropolitan Council amending the sewage flow calculation for [he Ci[y of Saint Paul. The City's resolution must be approved within 90 days of the Metropolitan CounciPs approval of this change (the Metropolitan Council adopted their resolution Jan. 12, 2000). This revised flow agreement represents a reducUOn of billable flow chazged [o the CiTy based on movement to metered flow and a recogni[ion by both the City and the Met Council that the flow model in place in recent yeazs has become obsolete. RECOMMENDATIONS'Approve (A) or Rele�� (R) _ PI.ANNING COMMISSION _ CIBCOMMITfEE _ QVILSERVICECOMMISSION A Sewer Utibry StaH CONTRACTS MUST ANSWEN THE FOLLOWING QUE5fION5: t. Has�hispersoNhrmeverworke0un0aracorrtrectto�ihistlepartrnent? VES NO 2. Has lhis perso�rtn ever been a cily employee? VES NO 3. Does this persoNfirm possess a skill not normaliy possessetl by any wrrent city employee? YES NO 4. Is �his persoMrtn a hrgetetl ventloR YES NO Erzplain all yes answers on s¢parate sheet antl attaeh to gr¢en sheet INfTIATING PROBLEM, ISSUE, OPPORTUNITY (WHO, WHAT, WHEN, WHERE, WHY): �., The City and Metropoli[an Council have been using a sewage flow model developed by Black and Veatch (engineering consultants mutually contracted by the Met Council and the City) since 1992�to determine the amount of sewage treated a[ the Metro Plant that should be chazged to the City of Saint Paul. Saint Paul has taken aggressive steps in the last ten years to remove extraneous flow from inflow and infiltration, which caused the Black and Veatch model to calculate flow volumes higher than reality. The Mehopolitan Council is installing new meters at the Meh Plant that wili satisfy the longstanding concerns of the City related to metering and the resul[s obtained for an"end-of-pipe" community like Saint Paul. While new meters were being sought and specifications developed, Metropolitan Council staff developed methods to more accurateFy calculate Saint Paul flows with the existing meters. Their reseazch shows the actual flow [o be approximately one billion gallons per year ]ess than the Black and Veatch model indicates. Both the City and the Metropolitan Council agee the time is right to move away from the Black and Veatch flow model to metered flow, using the interim metering calculations developed by the Metropolitan Council until the new meters aze installed, and thereafter using the flow amounu recorded by the meters. ADVANTAGES IFAPPROVED: ������ This reduced flow will reduce the City's chazges from the Metropolitan Council between $1 million and $I.5 �005. vr:�, ��"��a.'yF'? S:�'�?¢�i DISADVAMAGES IF APPftOVED: None. �i if4� � R DISADVAMAGESIFNOTAPPFOVED: �ry � q � e`¢ e e wm emrv ec.m = The City will continue to use the Black and Veatch flow model, which has been demonstrated to be inaccurate and will cost the City between FINANCIAL INFORMATION (EXPL4IN) 1'OiALAMOUNTOFTRANSACTION$ COST/REVENUEBUDGETED(CIRCLEONE) YES NO FUNDING SOURCE ACTIVIN NUMBER 00 -�S 6 Executive Summary Item: 1999-23 E Environment Committee Meeting date: November 23,1999 Metropofitan Council Meeting of January 5, 2000 Date: November 16, 1999 Subject: City of St. Paul Flow and Biliing, Resolution No. 2000 - District(s), Member{s): Ail Policy/tegal Reference: MN Statute 473.517, MCES Policy 6.1.5.1.a Staff Prepared/PresenYed: Jason Willett, MCES Finance Manager (651/602-1196) Division/Departmant: MCES c/o Helen Boyer, 602-1106 proposed Action/Motion Tha[ the Metropolitan Council adopt a resolution to implement an understandin� with the City of St. Paul on how to measure and bill for wastewater flow for the years 1999 — 2002. ISSUB(S� What methods and assumptions are appropriate for billin� the ciry of St. Paul's wastewater tlow, prior to the installation of new meters in 2001? Overview and Funding It is the Council's intent to bill St. Paul, as accurately as possible, for flow generated within the City. The city has raised concems about the accuracy of both the flow meters measuring the City's flow to the Metro Wastzwater Treatment Plan, and the analytical model developed ociginally by Black & Veatch to estimate the same flow which has been used to determine the flow for billin� through 1998. The Council intends to replace the existing meters wi[h new ma�netic flow meters during 2001, and both parties believe these to be the most accurate methodology for the lon� term determination of St. Paut's flow. Staff at the City and Council recommend an interim arrangement as follows: . Preliminary billing for wastewater flow for 1999 — 2001 will be set at 13.5 billion gallons per year (i.e., 1.125 billion gallons a month). . The monthly wastewater chazge for these three (3) years will be retroactively adjusted in 2005. The adjustment shall be based on average actual monthly flow for 2002-2004 applied to the period 1999-2001, limited to a change of not more than 3.0 billion gallons from the preliminary figure of 40.5 billion gallons (for the 3 year period). . A total adjusted charge will be calculated by mid-2005, resulting in either a net payment by the City or refund by the Council. The payment or refund will include interest at 5% per annum. The entity owin� a payment or refund will have the option of making monthly installment payments af the principal amount for up to a five (5) year period. The flow would be adjusted should the Ciry gain or lose a major �va[er wsromer prior to the end of 200 L Implemen[acion of the Council's resolution would be wntingent on the St. Paul City Council adoptin� a resolution agreein� ro the provisions of the Metropolitan CounciPs resolution and a�reement by the City to continue its ptanned pro�ram of major sewer repair and replacement. Over time, this proposal is ezpected to be revenue neutral to the region. A draft resolution will be distributed on November 23. ❑ Infrastructure: OQuality of life: H Communication(constituency building: This proposai has been worked out on a collaborative basis with the City of St. Paul staff. �.a•(� oo-as� METROPOLITAN COUNCIL Meazs Pazk Centre, 230 East Fifth Street, Saint Paul, MN SS I01 651/602-1000 TDD 651/291-0904 RESOLUTION NO. 00- RESOLUTION ESTABLISHING CITY OF ST. PAUL WASTEWATER SERVICES COST ALLOCATION FOR CALENDAR YEARS 1999 THROUGH 2O05 WHEREAS, the City of St. Paul ("City") has raised concems about the accuracy of both the flow meters measuring the City's flow into the metropolitan disposal system and the analytical model used by the Metropolitan Council to estimate the flow; and WHEREAS, the Council is in the process of replacing the existing meters with new magnetic flow meters and the new meters aze projected to be in place and operational in 2001, and not later than 2002; and WHEREAS, Council staff has met with City staff regarding the measurement of the City's flow and the replacement of the meters described above and City staff agree that such meters are the most accurate methodology for long-term determination of the City's flow; and WHEREAS, determination of the City's flow is unique because of the size of its wastewater flow and the technical challenges in accurately measuring the flows; and WHEREAS, the Council desires to (a) establish a method to address the City's concerns during the period until the new meters are in place and operational, (b) establish a reasonable transition to measurements by the new meters, and (c) provide for proper allocation of costs durin; calendar yeaz 1999 and through the Transition Yeaz as defined in this resolution; and WHEREAS, Minnesota Statutes, section 473.517, provides that the Council shall determine the method of allocating the costs of wastewater services to local units of govemment dischargin� sewage to the metropolitan disposal system. NOW, THEREFORE, BE IT RESOLVED by the Metropolitan Council as follows: (1) Target Date for Completion of New Meters. The ne�v meters for measurement of City flow are targeted to be in place and operational in 2001, and not later than 2002. If the new meters are in place and operational on or before July 1, 2001, then billine for the Cit}- will use the preliminary billing flow basis set forth in this resolution through calendar year 2001. If the new meters are in place and operational after July 1, 2001, then billin� for the City will use the preliminary billing flow basis set forth in this resolution through calendar year 2002. Council staff will notify the City if it becomes reasonably probable that the meters �vill not be operational on or before July 1, 2001. For the purposes of this resolution the following definitions will apply. �t,a•P. 0� -�5 fe (a) If the Council determines that the new meters are in place and operational on or before July 1, 2001 then: the "Preliminary Years" are calendar years 1999 through 2001, the "Transition Yeaz" is calendar yeaz 2002, and the "Finalization Years" aze calendaz years 2002 through 2004. (b) If the Council determines that the new meters are in place and operational after July 1, 2001 then: the "Preliminary Years" are calendar years 1999 through 2002, the "Transition Year" is calendar year 2003, and the "Finalization Years" are calendar years 2003 through 2005. (c) "Billing Flow Value" means the wastew•ater flow attributed by the Council's cost allocation methodology to a particular calendar month solely for the purposes of billing in that month. (2) Preliminary Monthly Billing Flow Value. Council staff is directed to bill for wastewater flow from the City of St. Paul during the Pretiminary Years and the Transition Year as follows: (a) For the Preliminary Years, billing for each month will be on the basis of a preliminary monthly Billin; Flow Value of 1.125 billion gallons/month. Council staff will adjust payments received from the City for any Preliminary Years which were received prior to the effectiveness of this resolution so that the City's total payment for each such year is based on 13.5 billion gallons/year. Upon such adjustment, and for the purposes of the calculations in this resolution, the City shall be deemed to have made such payments based on a monthly Billing Flow Value of 1.125 billion gallons. (b) In order to allow for a transition period at the City's option, the Transition Year billing will be determined as follows. On or before December 1 of the year preceding the Transition Year, the City will notify the Council �vhether it wishes the Transition Year monthly billing to be: (i) on the basis of actual monthly flows as measured by the new meters and in accordance with the Council's cost allocation methodology then in effect for the Transition Year (currently, the average monthly flow of the quarter six months prior to the billing month), or (ii) on the basis of a preliminary monthly Billin� Flow Value of 1.125 billion gailons/month. Council staff will bill for the Transition Year in accordance with the option selected by the City. (3) Final Monthly Billing Florv Value. Council staff is directed to determine the City's final Biliing Flow Value for each month of the Preliminary Years in the follo�i'in� manner. The total flow for the Finalization Years as measured by the new meters will be determined and the average monthly flow over that three yeaz period will be calculated subject to the following limitations and using a"Base Flow" of 40.5 billion gallons: 2 �,a.� oo.�.s� (a) If the total flow for the Finalization Yeazs is greater than the Base Flow plus 3 billion gallons, then the value of the Base Flow plus 3 billion gallons will be used for Yhe purposes of calculating the monthly average; or (b) If the total flow for the Finalization Yeazs is less than the Base Flow minus 3 billion gallons, then the value of the Base Flow minus 3 billion gallons will be used for the purposes of calculating the monthly average. The following adjustments in the calculation will be made in order to eliminate the distortion in the calculation caused by the gain or loss by the City of any Major Water Customers (def:ned as any single customer facility in the City which buys a quantity of water greater than 0.5 billion gallonslyear): (a) If the City gains or loses any Major Water Customers during the Finalization Years, the actual total flow in such yeazs to be used solely for the purposes of determining the retroactive final monthly Billing Flow Value in the Preliminary Yeazs shall be adjusted dowm�azd or upward to reflect the amount of such gain or loss, respectively, during the period after gain or loss of Yhe customer. In addition, the Base Flow for the purposes of the limitations above will also be adjusted downward or upward to reflect the an�ount of such gain or loss, respectively, during the period afrer gain or loss of the customer. (b) If the City gains or loses any Major Water Customers during the Preliminary Yeazs, the actual total flow in the Finalization Years to be used solely for the purposes of determining the retroactive final monthly Billin� Flow Value in the Preliminary Years shall be adjusted downward or upward to reflect the amoant of such the gain or loss, respectively, for the purpose of determining the monthly average for those months prior to the gain or loss of the customer. In addition, the Base Flow for the purposes of the limitations above wili also be adjusted downward or upwazd to reflect the amount of such gain or loss, respectively, for the purpose of determining the monthly average for those months prior to the gain or loss of the customer. The average monthly flow calculated in the manner described above will then be considered and determined retroactively to be the final Billing Flow Value for each month during the Preliminary Yeazs. The final Billing Fiow Value for each month of the Transition Year will be on the basis of actual monthly flows as measured by the new meters and in accordance «�ith the Council's cost allocation methodology then in effect for the Transition Year. (4) Calculation and Payment of Additional Charge or Refund. Council staff wi11 calculate the difference between the final Billing Flow Value (based on pazagraph 3) and the preliminary Billing Flow Value (based on para;raph 2) for each month during the Preliminary Years (and also for each month of the Transition Year if the City exercised the option to be billed on a preliminary Billing Flow Value of 1.125 billion gallons/month under ���-P� 00 .�s � paragraph 2b). Council staff will then catculate the amount of payment owed by, or refund due, the City under this pazagraph and will notify the City of the results of the calculation on or before June 1 of the yeaz following the last Finalization Yeaz. (a) For each such month in which the final Billing Flow Value exceeds the preliminary $illing Flow Value, the City will pay to the Council an additional amount for wastewater services for that month based on the extra billing flow and the per gallon charge for the relevant yeaz, plus interest on such amount at 5 percent per annum from and after the due date for that month's payment and through July 1 of the year following the last Finalization Yeaz (the "Due Date"). (b) For each such month in which the final Billing Flow Value is Iess than the preliminary Billing Flow Value, the Council will refund to the City the excess amount the City paid for wastewater services based on the lesser billing flow and the per gallon chazge for the relevant year, plus interest on such amount at 5 percent per annum from and after the date that month's payment was made by the City and through the Due Date. (c) If the aggregate of amounts owed (including interest) under paragraph (a) exceeds the aggregate of refund amounts owed (including interest) under pazagraph (b), any refund amount owed by the Council to the City under pazagraph (b) will be offset and the balance will be a charge payable by the City to the Council under Minnesota Statutes, section 473.521, and paid by the City to the Council on or before the Due Date. (d) If the aggregate of refund amounts owed (including interest) under paragraph (b) exceeds the aggregate of amounts owed (including intezest) under paragraph (a), any amount owed by the City to the Council under paragraph (a) will be offset and the balance will be refunded by the Council to the City on or before the Due Date. (e) If the total payment amount or refund owed under paragraph (c) or (d) (including interest) exceeds $500,000 then, at the option of the entity owing the payment or refund, such amount (including interest) shall be paid to the other entity in equal monthly payments for a period commencing on the Due Date and not exceeding 60 months. Each payment shall also include paymeni of interest on the unpaid balance at an annual percentage ratz of 5 percent. Such payments will be included by the Council as an itemized additional wastewater charge or credit, as the case may be, on the Cit;�'s normal monthly billing for wastewater services. (5) Effectiveness of Resolution. Implementation of this resolution is effective and contingent upon the City of St. Paul passing a resolution by its city council, in a form acceptable to the Council, which: 4 -�t. �P. y �,_ _. � 0 0 -as b (a) references this resolution and the above allocation method; and (b) agrees to abide by its provisions; and (c) agrees to continue the City's planned program of major sewer repair and replacement. In the event the City fails to adopt such a resolution on or before 90 days after the Council adopts this resolution, then this resolution shall be null and void and Council staff will continue to determine and bill the City's wastewater flows using the Council's established cost allocation methodology and reasonable judgement as to the volume of such flows (currently based on an analytical model developed by the engineering firm of Black and Veatch under contract to the Councii). (6) Reservation of Statutory Aufhority. Nothing in this resotution shall be deemed to modify or limit the statutory responsibility or authority of the Council to determine the allocation of costs of wastewater services to local units of govemment discharging sewage to the metropolitan disposal system. Adopted this day of January, 2000. Ted Mondale, Chair Sandi Lindstrom, Recording Secretary 'l/v� ' � • �'