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Introduction 5 <br /> <br /> City of Lino Lakes, Minnesota – Water and Sewer Rate Study Update <br />2. Introduction <br />The purpose of this report is to review and analyze City of Lino Lakes’ Water <br />and Sewer Funds to determine the approp riate rate structure and other revenue <br />sources needed for its operation and fi nancing of capital assets. The rate <br />structure and other revenue in each fund must provide sufficient revenue to <br />cover anticipated operating and mainte nance expenses, debt service including <br />principal and interest, capital improve ments, replacements, and to provide <br />adequate cash reserves. At the same time, the rate structure should promote <br />water conservation. Since our initial study in 2007/08, the Minnesota <br />Legislature has revised the definition of water conservation rates. <br /> <br />Total revenue collected should reflect not only recent cost experience, but <br />should recognize anticipated future cost s during the period for which rates are <br />being established. <br /> <br />This report includes a review of th e City’s Water Fund and Sewer Fund <br />revenues and expenditures, historical budgets, a projection of revenues and <br />expenditures through 2022 (incorporating the City’s plans for capital <br />improvements), and a determination of the rates and charges necessary to <br />provide sufficient revenues that will cover capital and operational costs. <br />