Management Report and Recommendations 12/31/1992

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City of Lino Lakes, Minnesota Management Report, Page 42 The previous schedule indicates that MWCC billing increases have been substantial over the past several years. There are two basic factors which contribute to increased billings from the MWCC: 1. Changes in use of the system. The MWCC has increased the 1993 estimated flow for the City of Lino Lakes by 31 %. 2. Increased cost to process sewage. The MWCC's cost to process (per million gallons) increased to an estimated $1,201 in 1993 from an estimated $1,157 in 1992. This represents an increase of 3.8 %. The combination of the above factors has increased the City's estimated cost in 1993 by 36 %. During 1988 the City adopted a policy of charging a water user fee for core system — improvements. The add -on charge is calculated based on a fixed amount per quarter. This charge is collected as revenue of the Enterprise Fund along with normal charges. Such amounts are then — transferred to the Area and Unit Charge Fund which financed (or will finance) such improvements. During 1992 the City transferred $96,712 to the Area and Unit Charge Fund. Wow Currently the City accounts for its water and sewer operations in one fund. In order to accurately measure the results of operations of the individual services we recommend that the City split water and sewer operations into two separate funds. This would allow the City to charge rates that would better reflect the actual cost of operating the systems.