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<br />City of Lino Lakes, Minnesota P a g e | 17 <br /> <br /> <br />3. Water Utility <br />Financial projections with rate increases <br />A financial projection was developed with rate increases in volume charges that provide <br />for the Water Utility Operating Fund to have sufficient revenues to pay for operating and <br />maintenance expenses, to fund its planned improvements, and to maint ain adequate <br />levels of cash reserves. Scenario 2 also assumes a new water treatment plant. <br />Scenario 2 <br />The financial projection for the Water Operating Fund with recommended rate increases <br />is shown on the following page. The recommended rate increases are projected to <br />minimize operating losses and to continue funding adequate cash reserve levels with <br />ending cash projected to decline slightly from approximately $5.5 million at the end of <br />2021 to approximately $5.0 million in 2031. The projections include the City’s planned <br />capital improvement projects within the next 10 years and projected growth in the number <br />of customers. <br />