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<br /> <br />City of Lino Lakes, Minnesota P a g e | 27 <br /> 5. Area & Unit Charge Fund <br />5. Area & Unit Charge Fund <br />Financial projections with proposed new water treatment <br />plant <br />As mentioned previously, the Area and Unit Charge fund is a capital project fund where <br />trunk and connection charges are deposited, as well as special assessments related to <br />water and sewer development. This capital fund is where a majority of the water and <br />sewer capital improvements are financed from, including any outstanding debt related to <br />the utilities. The flat fee charges based on REUs that had historically been deposited <br />directly into this fund are projected to be deposited into the Water Utility Fund and then <br />transferred into this fund. <br />The following page shows the financial projections of the fund, assuming the water <br />treatment plant is built, and recommended rates are adopted. Cash is projected to <br />decline from approximately $9.3 million to $4.1 million in 2031. Cash in the operating <br />funds may be available to assist this fund without warranting future rate increases.