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MINUTES <br />CITY COUNCIL <br />NOVEMBER 9, 2011 <br />purpose. She also noted that this Fund was used to purchase a property on <br />LaBore Road in order to obtain a needed trail easement. Once that easement is <br />taken, the remaining parcel will be sold. <br />The Director then reviewed the potential future projects the costs of which are <br />allocated to the Water /Sewer Capital Replacement Fund. These include painting <br />of the City's water tower, engineering and inspection costs related to the <br />Metropolitan Council sewer line turnback, sewer televising, and the City's water <br />meter replacement program. The Director reported that even with the significant <br />level of potential improvements, this Fund's balance is sustained at reasonable <br />levels. The Director reported that staff recommends continuation of their cost <br />benefit analysis of potential projects, and indicated that the Council will be <br />provided with an update prior to final budget approval. The Director also noted <br />that Enterprise Fund transfers of depreciation expense support this fund. There <br />is no levy support provided with water and sewer rates effectively the taxpayer <br />(users) support mechanism. <br />The Director then reviewed the General Capital Improvement Fund reviewing <br />several current and potential projects allocated against this Fund. The Director <br />noted that while the General Capital Improvement Fund balance is sustained at <br />reasonable levels, the proceeds of the sale of the Twin Lake property are a <br />significant funding source for future years' expenditures. Staff will continue <br />their cost /benefit analysis of potential projects and will update the Council prior <br />to final budget approval. <br />The Director then reviewed the City's Enterprise Funds beginning with the <br />Water Fund. She noted that the estimated actual 2011 operating results are <br />projected at a loss of $9,092. The City Administrator noted that the operating <br />loss is the result of charging depreciation against the fund and that the City has <br />chosen to not increase rates to consumers to fully fund this expense. The <br />Director indicated that the preliminary 2012 budgeted operations are expected to <br />product a loss of $22,308. This projected loss factors in a rate increase from St. <br />Paul Regional Water Services of 6.5 %. 2012 revenues include an initial 3.5% <br />increase in the usage rate and assumes increased water usage due to a normal <br />summer rain season. The director noted that the 2012 water service charge has <br />not been increased in the present budget. Also, at this time, there is no <br />improvement in unaccounted water factored into 2012 operations. It is hoped <br />that more information will be available from 4th quarter meter replacements to <br />accurately project the improvement in unaccounted water. <br />The Director then reviewed the Sewer Fund noting the estimated actual 2011 <br />operating results are a loss of $5,002. The initial projected loss was $44,399, <br />and the positive variance is due to a 2.7% improvement in anticipated revenues. <br />The 2012 budgeted operations are projected to result in a loss of $50,270. 2012 <br />revenues include a usage rate increase of 0% and a $5 increase in the quarterly <br />4 <br />