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Water Utility <br />13 <br />4. Water Utility <br />Water Rates <br />The Water Availability Charge is a fee incurred to recover the c <br />associated with providing the necessary infrastructure to make water services <br />available to the customer. These should include the cost of wat <br />providing treatment capacity, and the cost of the distribution s <br />insures that growth pays for the costs of growth. Springsted an <br />determined the water meter charge, connection fee, and the availability charge <br />to be sufficient at this time. <br />Due to limited growth recently experienced by the City, the new <br />plant is now projected to occur in 2025 (it was projected to be <br />previous rate study), which is beyond the planning period of this analysis. <br />Should growth be expedited, we recommend the City revisit these <br />include the capital and associated borrowing costs of this large capital <br />expenditure. <br /> <br />It is important for the City to understand that while availability charges provide <br />a valuable source of revenue for the utilities, they can be much more volatile <br />than user fee revenue related to actual sales. Water availabili <br />dependent on local economic conditions and will rise and fall accordingly. <br />However, the fixed costs associated with debt issued to finance the necessary <br />capital improvements will need to be paid regardless of how much revenue is <br />collected. To minimize this risk, we have recommended the City maintain an <br />adequate level of cash reserves that include one year of debt se <br /> <br /> <br />Water Customer <br />The projection of new residential water connections is based on those provided <br />Growth Projections <br /> by the CityÓs engineering consultant WSB (which used the Metro <br />Council projections) for capital planning purposes, revised to take into account <br />the slower growth pattern the City has recently experienced. The projected <br />number of added connections is shown below. <br /> <br /> Residential Commercial <br /> <br />(3/4Ñ meter) (1Ñ meter) <br /> <br />2013 50 3 <br /> <br />2014 75 3 <br /> <br />2015 75 3 <br /> <br />2016 75 3 <br /> <br />2017 100 3 <br /> <br />2018 100 3 <br /> <br />2019 125 3 <br /> <br />2020 125 3 <br /> <br />2021 150 3 <br /> <br />2022 150 3 <br /> <br /> <br />City of Lino Lakes, Minnesota – Water and Sewer Rate Study Update <br /> <br />