2012-051 Council Resolution - Laserfiche WebLink

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City of Lino Lakes, Minnesota Water and Wastewater Fee Study Update • February 2012 Page 2 • • — Review the historical growth of the customer base and projections for anticipated growth for each utility — Review any engineering studies, cost of services studies and other relevant studies related to each utility — Review the planning period to be used in the study ➢ Analyze information and develop preliminary availability fees for each utility and cost of service analysis for each utility — Analyze the information to identify any omissions and/or inconsistencies and collect additional information, as needed — Develop projected customer growth and future service demands based upon the existing systems and anticipated growth — Project the cost of providing services for each utility Task 11 - Conduct Study ➢ Develop a financial projection of each Utility that integrates all anticipated revenue sources, including interest on the cash balance, anticipated operating expenditures including existing and projected new depreciation, anticipated capital expenditures, existing debt service, projected debt service for identified projects and changes in the customer base over the planning period: — Develop a five -year forecast of revenues and expenditures for each Utility to determine the adequacy of revenues provided by existing rates — Evaluate the impact of anticipated capital improvement financing options on rates, fees and charges — Develop recommendations for the financing of the anticipated capital improvements based on the above impact analysis — Identify the overall change in revenue required to provide for adequate funding for major capital improvement programs, to meet all recurring annual operating and capital expenditures, to cover all debt service requirements, to comply with any existing revenue bond covenants, and to maintain sufficient cash balances and capital reserves (as defined by the City) for each Utility The projections will be made using an income statement approach and will include a yearly cash flow analysis — Develop preliminary rate schedules for each Utility that provides revenue recovery at levels necessary to support the Utility's operation as defined above. Rates developed will include user fees, area charges, connection charges and other fees and charges that provide sources of revenue to the Utility — Perform a sensitivity analysis to illustrate the impacts of adverse assumption changes (e.g. future growth, operating costs) ➢ Evaluate each Utility's current service fees and charges to determine whether there are additional service fees and charges that are currently not assessed and that may be applicable to the Utility's provision of services and, conversely, whether there are fees and charges that can be reduced or eliminated