Management Report and Recommendations 12/31/1990

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NNW w City of Lino Lakes, Minnesota Management Report, Page 46 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 1991 estimated flow for the City of Lino Lakes by 11 %. 2. Increased cost to process sewage. The MWCC's cost to process (per million gallons) increased to an estimated $1,084 in 1991 from an estimated $1,034 in 1990. This represents an increase of 4.8 %. The combination of the above factors has increased the City's estimated cost in 1991 by 16 %. The MWCC has approved a change in the district structure and will be converting rates and other operating procedures over the next several years. We recommend that the City monitor the effects —. of these changes and consider such changes on the City's sewer rates. "' During 1988, the City adjusted sewer and water rates. The change became effective on July 1, 1988. Part of the adjustment was to include a charge for core system improvements. The add on charge was to be calculated based on a fixed amount per quarter. This charge is collected as revenue of the Enterprise Fund along with normal user charges. Such amounts should then be transferred to area connection charge fund which financed (or will finance) such improvement. No such transfer was made in 1988 or 1989. During 1990 the City transferred $80,365 to the area connection charge fund for 1988 - 1990. We recommend that the City transfer such revenues on a quarterly basis. GAS UTILITY FUND _ Portions of the City of Lino Lakes have gas service through a franchise agreement between the City of Circle Pines and the City of Lino Lakes. The City of Circle Pines operates the gas utility. MININII We have reviewed the initial distribution of gas franchise profits received by the City of Lino Lakes under the terms of the franchise agreement. The revenue was calculated on the following basis: