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<br /> <br />City of Sample, Minnesota <br />Water Rate Study <br />Date <br /> <br />III. Water Rate Study (Continued) <br /> <br />Water Utility Operating Fund (Continued) <br /> <br />Scenario 3 - Proposed Rates <br /> $- <br /> $1,000,000 <br /> $2,000,000 <br /> $3,000,000 <br /> $4,000,000 <br /> $5,000,000 <br /> $6,000,000 <br /> $7,000,000 <br /> $8,000,000 <br /> $9,000,000 <br />2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 <br />Projected Ending Cash Balance (Scenario 3) Compared to <br />Targeted Cash Reserve <br /> Cash Balance Assuming Recommended Increases Target Cash Reserve <br />Target Cash Reserve is the amount needed to fund operations and capital projects . <br /> <br />Summary <br /> <br /> <br />As evidenced by Scenario 1 graphs above, the City’s Water rates are not sufficient to sustain the existing cash balance. <br />With gradual increases in rates along with inflationary increases as shown in Scenarios 2 and 3, revenues will increase <br />over the years and will meet target cash reserves. <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br />Sample <br />16