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City Council Water & Sewer Subcommittee <br />Feb. 18, 2003 <br />Page 12 <br />said this is another mandate from the EPA. They told the city we had to take <br />sewage from Toco and that cost is for sewer not water. <br />The City Attorney explained that the city's problem is with legislation that has <br />been on the books in Washington for some time and some changes in state <br />legislation, the city's problem is that it did an annexation in the service area of <br />Lamar County Water Supply. Unless the city can enter into a contract that is <br />reasonable to both the City of Paris and Lamar County Water Supply District, <br />the city will end up paying an enormous price to obtain Lamar County's <br />infrastructure. The infrastructure may be a substandard infrastructure, but that <br />is what the city has to do because of the certification process. <br />Mr. Johns advised that since 1985, Campbell Soup rates have tripled, residential <br />rates have gone up 56 %, and they are on a cost of service contract and asked if <br />the cost of service has gone up 300% or 56 %. Mr. Quarles said when you say <br />cost of service contract, that means Campbell Soup pays cost of that water, and <br />asked how has that water increased 300% at the same time the residential rates <br />have gone up 56 %? <br />Mr. Campbell said he can show them by looking at the first diagram of his <br />handout. <br />Mr. Anderson explained that the City of Paris has a certain amount of <br />infrastructure in place to provide water to Campbell Soup and the city allocates <br />a certain percentage of that cost, based on where Campbell Soup is on the <br />system, to them. If Campbell Soup takes a million gallons that gives Campbell <br />Soup the yields revenue requirement the city has to have to pay the cost yield <br />rate per gallon. If on the other hand, Campbell Soup conserves and reduces <br />consumption by half the city still has the same fixed cost to allocate to Campbell <br />Soup. Their rate is going to go up because the city has fixed costs that belong <br />to Campbell Soup. <br />Mr. Campbell went back to pages three and four of his handout and explained <br />