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<br />City of Lino Lakes, Minnesota P a g e | 7 <br /> <br /> <br />2. Background <br /> <br />Area and Unit Charge Fund <br />The Area and Unit Charge fund is a capital project fund where trunk and connection <br />charges are deposited, as well as special assessments related to water and sewer <br />development. The current $10/REU water fee also is deposited into this fund. The <br />beginning cash position in 2021 was approximately $9.3 million. This capital fund is <br />where a majority of the water and sewer capital improvements are financed from, <br />including any outstanding debt related to these utilities. <br />Our recommendation is that the REU fee be deposited into the Water Operating Fund <br />and then transferred to the Area and Unit Charge Fund. The revenue stream from this <br />fee will help improve operating income in the Water Operating fund. <br /> <br />