Laserfiche WebLink
Water Utility 13 <br /> <br /> City of Lino Lakes, Minnesota – Water and Sewer Rate Study Update <br />4. Water Utility <br /> <br />Water Rates The Water Availability Charge is a fee incurred to recover the capital costs <br />associated with providing the necessary infrastructure to make water services <br />available to the customer. These should include the cost of water supply, <br />providing treatment capacity, and the cost of the distribution system. This <br />insures that growth pays for the costs of growth. Springsted and City staff have <br />determined the water meter charge, conn ection fee, and the availability charge <br />to be sufficient at this time. <br /> <br />Due to limited growth recently experienced by the City, the new water treatment <br />plant is now projected to occur in 2025 (it was projected to be in 2017 in the <br />previous rate study), which is beyond th e planning period of this analysis. <br />Should growth be expedited, we recommend the City revisit these fees to <br />include the capital and associated bo rrowing costs of this large capital <br />expenditure. <br /> <br />It is important for the City to understa nd that while availability charges provide <br />a valuable source of revenue for the util ities, they can be much more volatile <br />than user fee revenue related to actual sales. Water availability charges are <br />dependent on local economic conditions and will rise and fall accordingly. <br />However, the fixed costs associated with debt issued to finance the necessary <br />capital improvements will need to be paid regardless of how much revenue is <br />collected. To minimize this risk, we ha ve recommended the City maintain an <br />adequate level of cash reserves that include one year of debt service. <br /> <br /> <br />Water Customer The projection of new residential water connections is based on those provided <br />Growth Projections by the City’s engineering consultant WSB (which used the Metropolitan <br />Council projections) for capital planning pur poses, revised to take into account <br />the slower growth pattern the City h as recently experienced. The projected <br />number of added connectio ns is shown below. <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> Residential <br />(3/4” meter) <br />Commercial <br />(1” meter) <br />2013 50 3 <br />2014 75 3 <br />2015 75 3 <br />2016 75 3 <br />2017 100 3 <br />2018 100 3 <br />2019 125 3 <br />2020 125 3 <br />2021 150 3 <br />2022 150 3