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Chapter 9 — Regional Water System Governance and Cost Sharing <br /> The practice of shared utility services across municipal boundaries has been increasing as <br /> municipalities face pressures of increasing costs, and in the case of drinking water, look to address <br /> reliability concerns because of supply limitations and to provide backup sources as part of their <br /> resiliency plan. This chapter provides an overview of governance structure options and applies concept <br /> cost sharing strategies to fund a Northwest Metro regional water system. <br /> 9.1 Governance <br /> The drivers influencing the type of governance structure selected for a shared utility system are many <br /> but center around the following items each municipality must consider: <br /> • Degree of community autonomy <br /> • Extent of legal and formal institutional structure <br /> • Cost sharing and financing <br /> There are four general models to consider in the governance of a regional water treatment system: <br /> • Regional Utility <br /> • Inter-Municipal Agreements <br /> — Cooperative agreement for joint investment <br /> — Smaller agreements as needed <br /> • Public— Private Partnership <br /> • Privatization <br /> 9.1a Regional Utility <br /> A new or expanded utility is formed that owns and operates the water treatment and infrastructure <br /> system. The decision-making authority for the regional utility is a board or commission. The term Joint <br /> Water Utility, Joint Powers, Water Commission are typical titles for regional water utilities. Board <br /> members are nominated by the municipalities served by the water system and the representation can <br /> vary as decided upon with the founding of the regional utility. A regional water utility can own all or a <br /> portion of the assets related to a water system. Typically a regional water utility owns the treatment <br /> plant, wells (if supplying groundwater), trunk water main and water towers. In this case, individual <br /> municipalities served by the utility own the distribution system infrastructure that serves their community <br /> members. However, some regional utilities may own all the water infrastructure, or may provide <br /> wholesale water to a portion of their customers that own and maintain their own distribution system. <br /> One example of a regional water utility in close proximity to the Northwest Metro study area is the Joint <br /> Powers Water Board of Albertville, Hanover and St. Michael (Joint Powers). Founded in 1977, Joint <br /> Powers owns and operates the water treatment plant, wells, water towers, and trunk water main that <br /> supplies water to the three communities. Each community owns and maintains the distribution system <br /> within its city boundaries. The Board consists of the mayor and one council member from each city. <br /> This provides for equal representation from each community and is not based on the community size or <br /> water use. Joint Powers bills each city and the cities bill their customers. Joint Powers also receives a <br /> portion of the connection fees assessed through the water availability charge (WAC). <br /> 9.1 b Inter-Municipal Agreements <br /> Another model is for municipal utilities to remain separate but jointly fund new infrastructure and/or <br /> operations and maintenance and have rights to a certain share of the water through cooperative <br /> agreements. These agreements can vary in complexity and have flexibility in establishing coordination <br /> among partners. Inter-municipal agreements have been used to share drinking water infrastructure <br /> assets and services in numerous ways. The agreements may be as simple as sharing a contract for <br /> bulk supply of chemicals for smaller, more remote communities to large metropolitan-area water supply <br /> agreements. <br /> Page—38 1 METROPOLITAN COUNCIL <br />