10/01/2007 Council Packet - Laserfiche WebLink

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Water Utility 14 Springsted Contributed capital is subtracted because it represents assets of the utility that were acquired at no costs to the utility. The net assets are divided by the capacity of the utility in residential equivalent units (REUs) to determine the value of these assets to each residential customer. The City estimates that approximately 67% of the debt issued in previous years was used to provide utility assets for new growth. The principal and interest on this debt should be included in the availability charge with the resulting fees applied to the debt service payments. The portion of the availability charge related to these assets is determined by dividing the amount related to growth by the capacity in REUs they will serve. The portion of the availability charge related to new capital improvements is determined by dividing the sum of the acquisition costs of these assets by the capacity in REUs they will serve. The acquisition costs includes the cost of interest on any debt issued to finance the improvements and excludes any other sources of revenues such as grants, Chapter 429 special assessments, contributed capital, and other non - utility sources of revenue. Availability charges for larger customers are determined based on the number of SAC (sewer availability charge) units. This method is practiced by the Metropolitan Council and also works well for the City. The number of new connections the proposed water treatment plant can serve is estimated to be 12,444 residential equivalent units (REUs). This is based on average system capacity of 4,300,000 gallons per day, of which, 1,500,000 gallons per day is consumed by existing users, leaving 2,800,000 gallons per day available for new users. The average REU uses 225 gallons of water per day. The 225 gallons of water per day was determined in this manner: 75 gallons per day is the projected average residential use x 3 persons per household. Therefore, 2,800,000/225 = 12,444 new REUs. City of Lino Lakes, Minnesota. Water and Sewer Study