Management Report and Recommendations 12/31/1982

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1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 City of Lino Lakes Management Report, Page 40 Billings from MWCC Estimated Final Percent Percent Year Amount Change Amount Change 1977 $ 3,046 $ 1,573 1978 3,560 16.8% 3,662 132.8% 1979 8,312 133.5 6,171 68.5 1980 6,858 (17.5) 7,123 15.4 1981 11,357 65.6 10,213 43.4 1982 15,504 36.5 Not available 1983 19,027 22.7 Not available There are two basic factors which contribute to increased billings from the MWCC. The first is increased use of the system. The estimated increased usage for 1983 over 1982 for the City of Lino Lakes is 8.7 %. The second factor which increases the billings from MWCC is their increased cost to process gallonage. Their cost to process (per million gallons) increased from an estimate $674 to an estimated $761. This respresents an increase of 12.9 %. The combination of these factors increased the City's estimated cost in 1983 by nearly 23 %. As the system gains users, the increased usage part of the overall increase should be offset by the billings to new users. The per unit portion of th increase, however, must be borne in full by existing users or be subsidized by overall City operations. II The City has no control over the billings from the MWCC for the sewer treatment costs. This operating expense comprises 62% of the 1982 billings for sewer service charges. The City must set rates at levels adequate to pay for the pass through costs from MWCC. In view of this arrangement with MWCC, the City's ability to exercise control over its sewer operations is limited. The City can be construed to be acting as an agent for the MWCC with regard to sanitary sewer operations. The City has had a Water and Sewer Utility Rate Analysis (dated March 31, 1982). That analysis included proposed increases in utility rates as follows: