HomeMy WebLinkAbout04-01-13 Council PacketWORK SESSION AGENDA
CITY OF LINO LAKES
Monday , April 1 , 201 3
CITY COUNCIL WORK SESSION
Community Room (not televised)
5:30 P.M.
1. County Assessor (Board of Appeal preview)
2. Utility Rate Discussion
3 . 401 Birch Street Property
4 . Off -Sale Liquor Licensing
5 . Update of Peltier Lake Heron Rookery
6 . Five -Year Financial Forecast
7. City Communications Plan
8 . Community Survey
9. Bald Eagle/Elmcrest Corridor
Review Regular Council Agenda
Adjourn
Final Repor t
Cit y of Lino Lakes, Minnesota
Water and Sewer Utilit y Rate Stud y Update
Januar y 28, 2013
1 EXECUTIVE SUMMARY ....................................................................... 1
2 INTRODUCTION .................................................................................. 5
3 BACKGROUND ................................................................................... 6
Water Fund Historical Information ...................................................... 6
Current Water Rate Schedule ............................................................ 7
Sewer Fund Historical Information ...................................................... 9
Current Sewer Rate Schedule ........................................................... 9
Cash Reserves ............................................................................ 11
Depreciation ................................................................................ 11
Assumptions ............................................................................... 12
4 WATER UTILITY ............................................................................... 13
Water Rates ................................................................................ 13
Water Customer Growth Projections ................................................. 13
Conservation Rate Structure ........................................................... 14
Water Utility Revenue Requirements ................................................. 17
Capital Outlay .............................................................................. 19
Financial Projections ..................................................................... 22
Impact on Water Charges ............................................................... 30
5 SEWER UTILITY ............................................................................... 37
Sewer Rates ............................................................................... 37
Sewer Customer Growth Projections ................................................. 37
Sewer Utility Revenue Requirements ................................................ 38
Capital Outlay .............................................................................. 40
Financial Projections ..................................................................... 41
Impact on Sewer Charges .............................................................. 43
6 CONCLUSIONS AND RECOMMENDATIONS .......................................... 47
Table of Contents
LETTER OF TRANSMITTAL
January 28, 2013
Mr. Al Rolek, Finance Director
Mr. Rick DeGardner, Public Services Director
City of Lino Lakes
600 Town Center Parkway
Lino Lakes, Minnesota 55014-1182
Re: Summary of Water and Sewer Utility Rate Study Update
Dear Mr. Rolek and Mr. DeGardner:
Springsted Incorporated was hired to update the u tility rate study for the Water Fund and Sewer Fund of
the City of Lino Lakes. Each Fund was looked at individually. This Study includes a review of the past
performance of each fund, determines the adequacy of revenues in each of the Funds, and provides rate
recommendations which reflects recent cost experien ce as well as anticipated capital improvement costs
of each Fund.
We appreciate the opportunity to conduct the Water a nd Wastewater Utility Rate Study for the City of
Lino Lakes.
Respectfully submitted,
Nick Dragisich Patty Kettles
Nick Dragisich, Executive Vice President Patty Kettles, Vice President
Director, Management Consulting Services
sml
Springsted Incorporated
380 Jackson Street, Suite 300
Saint Paul, MN 55101-2887
Tel: 651-223-3000
Fax: 651-223-3002
www.springsted.com
Executive Summary 1
City of Lino Lakes, Minnesota – Water and Sewer Rate Study Update
1. Executive Summary
This report was prepared to review the financial performance of the City of Lino
Lakes’ current Water and Sewer Funds and determine the appropriate rate
structure, availability charges, and ot her revenue needed to adequately fund
operations through 2022. The process incl uded a historical review of the two
utility funds, the evaluation of the appropriate rate structures needed to fund
these operations over the pla nning period, alternative water rate structures to
encourage water demand reduction, connection fees, and a comparison of rates
with other similar utilities.
One major consideration in determini ng the water rates is compliance with
Minnesota State Statutes, Section 103G.291. In the 2012 the Minnesota
Legislature redefined the water con servation requirements now calling them
demand reduction measures. The law now states that “public water suppliers
serving more than 1,000 people must encourage water conservation by
employing water use demand reduction measures” as opposed to the initial law
requiring “a conservation rate structure”. The law goes on further to state,
“Demand reduction measures must include a conservation rate structure, or a
uniform rate structure with a conservation program that achieves demand
reduction.” It is important to point out that conservation rate structures by
themselves do not constitute an effec tive water conservation/demand reduction
program. Rate structures work best when coupled with a comprehensive
program. A water demand reduction progr am should include, at a minimum, a
public education program and public assistance program to achieve the
reduction in per capita water use envisioned by the City.
In determining the water rates and rate structure options, Springsted reviewed
historical water consumption patterns a nd used this information to recommend
alternative rate structures that would promote water conservation.
All recommendations are based on info rmation provided to us and on the
assumptions given for the financial projec tions. The City will need to monitor
the performance of each fund and make any necessary adjustments based upon
its actual performance and on the actual construction costs of the anticipated
capital improvements.
The following conclusions were determin ed as a result of this study and the
financial projections prepared:
1. The Water and Sewer Fund’s histor y shows revenues and expenditures,
have remained fairly stable over tim e. Operating income in the Water
Fund is projected to decrease from $324,865 in 2009 to $217,713 in
2012. Operating income in the Sewer Fund is projected to decline more
rapidly from $70,057 in 2009 to ($56,275) in 2012, thereby not funding
depreciation.
2. The City should maintain a minimum cash balance in each Utility fund of
at least three months of anticipated operating expenses and one year’s
debt service at the end of each year. Current and projected cash levels
support this recommendation.
Executive Summary 2
City of Lino Lakes, Minnesota – Water and Sewer Rate Study Update
3. The current Water Availability/Trunk Charge of $3,854 is adequate to
fund projected capital costs through our planning period of 2022.
However, should growth be expedited and the need for the new water
treatment plant currently projected for 2025 be moved up, we recommend
the City revisit this charge to in clude the capital and associated borrowing
costs of this large capital expenditure.
4. Water user rates should be set to encourage demand reduction as well as
provide for simplicity in understanding. After analyzing current and
historical consumption patterns, we have provided four scenarios for
water rates. They are:
Scenario 1 – Keep Current Block Structure and Adjust Rates
Residential Rates
2012
Rate per 1,000
Gallons
2013
Rate per 1,000
Gallons
Flat Fee of $10 per Residential Equivalent Unit (REU) Same
0 - 20,000 gallons $1.80 $1.84
20,001 – 40,000 gallons $2.00 $2.04
40,001 – 80,000 gallons $2.50 $2.55
80,001 – 120,000 gallons $3.00 $3.06
Over 120,000 gallons $3.50 $3.57
Future projections indicate rates may need to be increased by 2.00%
annually 2014 - 2017.
Scenario 2 – One Rate for Each Customer Class
In Scenario 2, the rate for each r esidential, non-residential, and non-
residential irrigation customer is assumed to be the rate which provides for
residential customers generating 77% of total revenues, non-residential
accounts generating 10% of annual revenu es, and non-residential irrigation
accounts generating 13% of total revenues, as is currently the case.
Non-Residential Rates
2012
Rate per 1,000
Gallons
2013
Rate per 1,000
Gallons
Flat Fee of $10 per Residential Equivalent Unit (REU) Same
0 - 20,000 gallons $1.80 $1.84
20,001 – 40,000 gallons $2.00 $2.04
Over 40,000 gallons $2.25 $2.30
Non-Residential Irrigation Rates
2012
Rate per 1,000
Gallons
2013
Rate per 1,000
Gallons
0 - 40,000 gallons $2.50 $2.55
40,001 – 80,000 gallons $3.00 $3.06
Over 80,000 gallons $3.50 $3.57
Executive Summary 3
City of Lino Lakes, Minnesota – Water and Sewer Rate Study Update
The proposed rates are:
As in the first scenario, these volumetri c rates would need to be increased
by 2.0% annually 2014-2017.
Scenario 3 –Uniform Rate for All Use/All Users
Scenario 3 assumes one rate for all use of all users. The 2013 rate for all
users; residential, non-residential, and non-residential irrigation customers is
recommended to be $2.16 per 1,000 gallons to meet revenue requirements.
A uniform rate structure is estimated to alter the total revenues generated
from each customer class as follows:
As
in the first two scenarios, these volumetri c rates would need to be increased
by 2.0% annually 2014-2017.
Scenario 4 –Revised Block Rate Structure
The final option reviewed is to keep a block rate structure, whereby the
price of water increases with volume consumed, but reduce the number of
blocks from five to three for residential and from three to two for non-
residential and non-residential irrigati on. The following block rate structure
is proposed in order to meet revenue requirements:
Proposed 2013 Residential Rates
Proposed 2013 Non-Residential Rates
Residential Non-Residential Non-Residential
Irrigation
2013 $2.02 $2.21 $3.40
Residential Non-
Residential
Non-
Residential
Irrigation
Current Rates 77% 10% 13%
Proposed Rate 82% 10% 8%
Residential
0 – 30,000 gallons $1.89
30,001 – 50,000 $2.09
> 50,000 $2.91
Non-Residential
0 – 50,000 gallons $2.04
> 50,000 $2.30
Executive Summary 4
City of Lino Lakes, Minnesota – Water and Sewer Rate Study Update
Proposed 2013 Non-Residential Irrigation Rates
Our proposed rates along with 2.0% increases in these rates 2014-2017
projects depreciation could be fund ed while maintaining recommended
reserve levels.
5. The current Sewer Availability Charge of $2,911 is adequate to fund
projected capital costs.
6. Sewer user rates should be increased by 7.0% in 2013 and 2.0% annually
2014 through 2019.
7. The City should establish the user rates for each utility fund for a three-
year period and review them on an annual basis. The rates should be
reviewed on an annual basis concurre nt with the development of the
following year’s budget.
These recommendations are based on inform ation provided to us by City of
Lino Lakes. The City will need to m onitor the performance of the Water and
Sewer Funds and make any necessary adjustments based upon its actual
performance and on the actual construction costs of the anticipated capital
improvements.
Non-Residential
Irrigation
0 – 50,000 gallons $2.55
> 50,000 $3.57
Introduction 5
City of Lino Lakes, Minnesota – Water and Sewer Rate Study Update
2. Introduction
The purpose of this report is to review and analyze City of Lino Lakes’ Water
and Sewer Funds to determine the approp riate rate structure and other revenue
sources needed for its operation and fi nancing of capital assets. The rate
structure and other revenue in each fund must provide sufficient revenue to
cover anticipated operating and mainte nance expenses, debt service including
principal and interest, capital improve ments, replacements, and to provide
adequate cash reserves. At the same time, the rate structure should promote
water conservation. Since our initial study in 2007/08, the Minnesota
Legislature has revised the definition of water conservation rates.
Total revenue collected should reflect not only recent cost experience, but
should recognize anticipated future cost s during the period for which rates are
being established.
This report includes a review of th e City’s Water Fund and Sewer Fund
revenues and expenditures, historical budgets, a projection of revenues and
expenditures through 2022 (incorporating the City’s plans for capital
improvements), and a determination of the rates and charges necessary to
provide sufficient revenues that will cover capital and operational costs.
Background 6
City of Lino Lakes, Minnesota – Water and Sewer Rate Study Update
3. Background
The City of Lino Lakes, which is located approximately 20 miles north of St.
Paul in southeastern Anoka County, prov ides approximately 4,175 residential,
commercial, industrial, and institutio nal customers with water and sewer
services. The City encompasses approxima tely 33 square miles and had a 2010
Census population of 20,216 and an est imated 2011 population slightly higher
at 20,505.
Currently, the City obtains its water s upply from four raw water wells. Water
storage for consistent pressure and for fi re protection occurs in two elevated
storage towers.
Wastewater treatment is provided by the Metropolitan Waste Control
Commission. Collection is accomplished through a series of trunk lines that
empty into one of nine lift stations operated by the City.
Water Fund A review of the City’s most recent financial reports shows the Water Fund
Historical Information ending cash balance has increased sin ce 2009. The 2012 budget was projected
to result in an ending cash balance of $3,861,609, up from $3,432,696 in 2009.
Historically the fund has recorded positive operating income, funding
depreciation each year.
Revenues and expenditures for the past three years and the 2012 budget, as well
as the City’s current water rate sche dule are shown on the following pages.
Background 7
City of Lino Lakes, Minnesota – Water and Sewer Rate Study Update
Current Water Rate Schedule
Water Volume Charges (Quarterly)
Residential Rates
Effective January 2009
Rate per 1,000
Gallons
Flat Fee of $10 per Residential Equivalent Unit (REU)
0 - 20,000 gallons $1.80
20,001 – 40,000 gallons $2.00
40,001 – 80,000 gallons $2.50
80,001 – 120,000 gallons $3.00
Over 120,000 gallons $3.50
Water Connection Fee
Meter Size
(Inches) Amount
All $250
Water Availability Charge
Non-Residential Rates
Effective January 2009
Rate per 1,000
Gallons
Flat Fee of $10 per Residential Equivalent Unit (REU)
0 - 20,000 gallons $1.80
20,001 – 40,000 gallons $2.00
Over 40,000 gallons $2.25
Non-Residential Irrigation Rates
Effective January 2009
Rate per 1,000
Gallons
0 - 40,000 gallons $2.50
40,001 – 80,000 gallons $3.00
Over 80,000 gallons $3.50
Per SAC unit Amount
2012 $3,854
Background 8
City of Lino Lakes, Minnesota – Water and Sewer Rate Study Update
2009201020112012
Operating RevenuesActualActualActualBudget
Charges for Services1,334,055 1,059,994 1,054,977 1,250,000
Hook-up Charges8,750 8,000 9,260 9,000
Water Meter Sales10,874 8,698 10,561 10,000
Other Revenue12,138 10,321 15,306 36,000
Total Operating Revenue1,365,817 1,087,013 1,090,104 1,305,000
Operating Expenses
Personal Services187,201 172,095 175,906 181,337
Materials and Supplies269,925 208,872 154,450 237,500
Contractual Services60,814 76,755 92,345 110,000
Utilities78,532 97,060 80,906 92,000
Other21,262 28,640 19,903 31,450
Depreciation423,218 426,861 421,616 435,000
Total Operating Expenses1,040,952 1,010,283 945,126 1,087,287
Operating Income (Loss)324,865 76,730 144,978 217,713
Non Operating Revenues (Expenses)
Investment Earnings74,818 37,249 43,983 25,000
Special Assessments8,107 6,216 731 10,000
Bond Interest(43,298) (29,858) (15,864) (13,566)
Paying Agent Fees(5,319) (5,760) (5,653) (5,500)
Total Non Operating Revenues (Expenses)34,308 7,847 23,197 15,934
Net Income (Loss) Before Transfers359,173 84,577 168,175 233,647
Operating Transfers
Transfers In
Transfers (Out)(35,561) (34,061) (33,061) (34,511)
Total Operating Transfers(35,561) (34,061) (33,061) (34,511)
Net Income (Loss)323,612 50,516 135,114 199,136
Beginning Cash & Investments 2,964,709 3,432,696 3,555,128 3,649,473
Net Income323,612 50,516 135,114 199,136
Depreciation423,218 426,861 421,616 435,000
Amortization5,319 5,760 5,653 5,500
Acquisition and Construction of Assets-
Proceeds from New Long-Term Debt-
Payments on Long-Term Debt(360,000) (375,000) (390,000) (427,500)
Adjustment to Accruals75,838 14,295 (78,038) -
Ending Cash Balance3,432,696 3,555,128 3,649,473 3,861,609
Water Fund Information
Background 9
City of Lino Lakes, Minnesota – Water and Sewer Rate Study Update
Sewer Fund A review of the City’s most recent financial reports shows the cash balance in
Historical Information the Sewer Fund has also been increasing . The 2012 budget was projected to
result in an ending cash balance of $6,9 39,631; up from $5,750,402 in 2009.
Historically, the fund recorded positive operating income in 2009 and 2010.
Operating income was ($143,875) in 2011 and is projected to be ($56,275) in
2012, indicating the City is not fully funding depreciation as previously has
been a goal.
Revenue and expenditures for the past four years in the Sewer Fund, as well as
the City’s current sewer rate schedule are shown below.
Current Sewer Rate Schedule
Sewer Volume Charges
(Quarterly)
*Sewer based on winter quarter usage.
Sewer Connection Fee
Water Meter
Size (Inches) Amount
All $200
Sewer Availability Charges
Per SAC Unit Amount
2012 $2,911
Rate
Rate per 1,000
Gallons
Up to 10,000 gallons $52.00
Over 10,000 gallons $1.00
Sewer Customer Only $62.00
Background 10
City of Lino Lakes, Minnesota – Water and Sewer Rate Study Update
2009201020112012
Operating RevenuesActualActualActualBudget
Charges for Services1,477,007 1,491,728 1,486,616 1,480,000
Hook-up Charges7,490 6,490 7,220 8,000
Other Revenue17,667 352 500
Total Operating Revenue1,502,164 1,498,218 1,494,188 1,488,500
Operating Expenses
Personal Services172,744 173,937 177,758 184,942
Materials and Supplies43,147 43,252 73,029 42,500
Contractual Services91,973 70,464 163,233 105,000
MCES Sewer Charges625,353 681,591 720,986 704,933
Utilities37,121 34,047 42,251 44,000
Other14,981 17,600 14,229 13,400
Depreciation446,788 445,956 446,577 450,000
Total Operating Expenses1,432,107 1,466,847 1,638,063 1,544,775
Operating Income (Loss)70,057 31,371 (143,875) (56,275)
Non Operating Revenues (Expenses)
Investment Earnings153,929 67,521 82,232 50,000
Special Assessments662 2,493 731
Total Non Operating Revenues (Expenses)154,591 70,014 82,963 50,000
Net Income (Loss) Before Transfers224,648 101,385 (60,912) (6,275)
Operating Transfers
Transfers In
Transfers (Out)(10,561) (34,061) (33,061) (34,511)
Total Operating Transfers(10,561) (34,061) (33,061) (34,511)
Net Income (Loss)214,087 67,324 (93,973) (40,786)
Beginning Cash & Investments 5,609,938 5,750,402 6,237,600 6,575,417
Net Income214,087 67,324 (93,973) (40,786)
Depreciation446,788 445,956 446,577 450,000
Amortization- - - -
Acquisition and Construction of Assets(27,748) (17,524) (45,000)
Proceeds from New Long-Term Debt-
Payments on Long-Term Debt
Adjustment to Accruals(492,663) (26,082) 2,737 -
Ending Cash Balance5,750,402 6,237,600 6,575,417 6,939,631
Sewer Fund Information
Background 11
City of Lino Lakes, Minnesota – Water and Sewer Rate Study Update
Cash Reserves Springsted’s clients often ask about the amount of cash that should be available
in their Utility funds. Utility funds need sufficient cash to pay current expenses,
together with principal and interest on outstanding bonds. This would typically
require each Utility fund to have a mini mum of three months of anticipated
operating expenses and one year’s total debt service in cash at the end of each
year. However, this does not provide any level of cash reserves for unforeseen
expenses, emergencies, or to cover any shortfalls in the budget. The amount of
cash reserves that the Water and Sewer Funds should have is dependent on a
number of factors, including:
Reserves that are legally required
Variability of the annual revenue stream
Variability in annual expenditures
Variability in rainfall
Age and condition of fixed assets
Anticipated future capital needs
○ Capital improvement plan
○ Regulatory compliance
Tolerance for risk
Number of relatively large customers
Unfortunately, there are no prescribed formulas, and the amount of reserves
varies considerably between utilities. We encourage the City to maintain a
minimum cash balance in the Water and Sewer Fund of at least three
months/ninety days of anticipated ope rating expenses and one year’s debt
service at the end of the year.
Depreciation Costs incurred in the operation of each Utility are either recorded as operating
expenses or capitalized as assets. Whether the cost is expensed immediately or
capitalized, the City actually pays for the asset at the time it is acquired.
Generally, anything that is used up in the period in which the cost of acquiring it
is incurred is treated as an operating expe nse. Personnel, supplies, and repairs
and maintenance are typical examples of costs that are treated as operating
expenses. These costs are shown on the inco me statement each year in the total
amount of the expenditure for each category. The cost incurred in the
acquisition or construction of assets su ch as buildings and major pieces of
equipment are capitalized. That means their cost does not show up as an
expense on the income statement in the year in which the expenditure occurs,
rather the cost of these assets are depr eciated. Depreciation is the process of
allocating the cost of an asset over its useful life in a systematic and rational
manner.
Background 12
City of Lino Lakes, Minnesota – Water and Sewer Rate Study Update
The City currently includes depreci ation in its annual budget and until
recently, user rates in each utility fully funded annual depreciation. However,
since 2011, sewer rates are not fully funding annual depreciation. Our
recommendations will show the necessary rate increases in order to once
again fully fund deprecation in the Sewer Fund.
Assumptions The City provided Springsted with a variety of material including:
2009-2011 Financial Reports
2012 and 2013 Operating Budgets for each Fund
2013-2025 Capital Improvement Plan – listing cost and year of
expenditure in 2012 dollars
Capital costs were inflated to year of construction cost, using the 10-
year average of the Municipal Cost Index, or a 3.59% inflation factor
Projected new connections to the water and sewer system over the
planning period
Detailed number of water connections by quarter by user class for
2010 and 2011
Detailed water consumption data by quarter by user class for 2010
and 2011
Previous utility rates
We have used the information provided by the City as the basis of our
projections, as well as discussions with City personnel.
Water Utility 13
City of Lino Lakes, Minnesota – Water and Sewer Rate Study Update
4. Water Utility
Water Rates The Water Availability Charge is a fee incurred to recover the capital costs
associated with providing the necessary infrastructure to make water services
available to the customer. These should include the cost of water supply,
providing treatment capacity, and the cost of the distribution system. This
insures that growth pays for the costs of growth. Springsted and City staff have
determined the water meter charge, conn ection fee, and the availability charge
to be sufficient at this time.
Due to limited growth recently experienced by the City, the new water treatment
plant is now projected to occur in 2025 (it was projected to be in 2017 in the
previous rate study), which is beyond th e planning period of this analysis.
Should growth be expedited, we recommend the City revisit these fees to
include the capital and associated bo rrowing costs of this large capital
expenditure.
It is important for the City to understa nd that while availability charges provide
a valuable source of revenue for the util ities, they can be much more volatile
than user fee revenue related to actual sales. Water availability charges are
dependent on local economic conditions and will rise and fall accordingly.
However, the fixed costs associated with debt issued to finance the necessary
capital improvements will need to be paid regardless of how much revenue is
collected. To minimize this risk, we ha ve recommended the City maintain an
adequate level of cash reserves that include one year of debt service.
Water Customer The projection of new residential water connections is based on those provided
Growth Projections by the City’s engineering consultant WSB (which used the Metropolitan
Council projections) for capital planning pur poses, revised to take into account
the slower growth pattern the City h as recently experienced. The projected
number of added connectio ns is shown below.
Residential
(3/4” meter)
Commercial
(1” meter)
2013 50 3
2014 75 3
2015 75 3
2016 75 3
2017 100 3
2018 100 3
2019 125 3
2020 125 3
2021 150 3
2022 150 3
Water Utility 14
City of Lino Lakes, Minnesota – Water and Sewer Rate Study Update
Conservation Rate Water utilities have traditionally relied on increased capacity to meet their
Structure growing needs for additional water resulting from population growth and
economic development. However, utilities are increasingly looking to
conservation as an alternative strategy. This change in philosophy is the result
of several factors including:
Growing competition for limited water supplies;
Increasing cost and difficulties in developing new water supplies;
Increasing cost of capacity expansion;
Increasing cost of water treatment and testing;
Statutory requirements for increased water supply permits; and
Growing public support for the conser vation of our natural resources.
The City is required to complete a wate r emergency and conservation plan every
10 years. Included in this plan, the City must explain current water use trends
and how they will address conservation in the future. The average use per
resident in the City in 2007 was 86 gallons per day (gpd). The average use per
resident in 2011 was 90 gallons per day. And the average use per resident in
2012 was 107 gallons per day. The average use in 2012 is reflective of the
relatively dry watering months (July, A ugust, and September). Precipitation in
the summer watering months of 2012 were 50% lower than the 29 year average
of those same months, most likely prompting residents to water more.
The DNR goal is to achieve an average consumption per user of 75 gpd. A
conservation rate structure was developed to help the City achieve this goal. A
conservation rate structure provides a financial incentive for users to reduce
demands based upon the general economic theory that demand for a commodity
decreases as its price increases. Water conservation rates generally involve one
of the types listed below:
Increasing block rates where the margin al cost of water to the user
increases in blocks of usually two or more steps as water use
increases;
Flat rate where the cost of water is the same regardless of
consumption; and
Seasonal pricing where the cost of water consumed during the season
of peak demand is charged at a hi gher rate than water consumed in
the off-peak season.
The City currently tracks consumption pa tterns for the following eight types of
users: residential, commercial, industr ial, institutional, prison, church, school,
and non-residential irrigation.
Water Utility 15
City of Lino Lakes, Minnesota – Water and Sewer Rate Study Update
Tier 1
74.5%
Tier 2
24.0%
Tier 3
1.3%
Tier 4
0.2%
Tier 5
0.1%
Residential Accounts by Tier
winter average (2010 ‐2011)
The total annual consumption by residen tial, non-residential and non-residential
irrigation for 2010 and 2011 is shown in the chart below.
2010 2011
Residential 396,630,500 402,204,500
Non-Residential 48,644,000 48,995,500
Non-Residential
Irrigation 38,534,000 40,999,000
Totals 483,808,500 492,199,000
The average use per quarter by residentia l, non-residential and non-residential
irrigation is:
2011 – Q12011 – Q2 2011 – Q32011 – Q4
Residential 16,32818,404 32,62433,077
Non-Residential 104,63994,178 125,257143,080
Non-Residential Irrigation 66,70098,083 243,061343,500
Below are some additional highlights on past water use in the City:
Winter water use (Quarter 1, 2010 & 2011 data)
98.5% of residential users used 40,0 00 gallons or less, falling into the
first two tiers of use.
Only 61 customers (1.5% of users), used more than 40,000 gallons,
falling into the top three tiers.
Therefore, our assumption was that water consumption over 40,000 gallons in
the summer quarters is due primarily to non-residential irrigation.
Water Utility 16
City of Lino Lakes, Minnesota – Water and Sewer Rate Study Update
Tier 1
38.2%
Tier 2
30.0%
Tier 3
25.1%
Tier 4
5.5%
Tier 5
1.2%
Residential Accounts by Tier
summer average (2010 ‐2011)
Summer consumption statistics include:
Summer water use (Quarter 3, 2010 & 2011 data)
68.2% of residential users use 40,00 0 gallons or less, falling into the
first two tiers of use.
1,290 or 31.8% of residential customers use 40,000 gallons or more
in the summer months, which is over 21 times what customers use in
winter.
47 or 1.2% of residential customers use 120,000 gallons or more in
the summer months.
In the 2012 the Minnesota Legislature redefined the water conservation
requirements now calling them demand reduction measures. The law now states
that “public water suppliers serving mo re than 1,000 people must encourage
water conservation by employing water use demand reduction measures” as
opposed to the initial law requiring “a conservation rate structure”. The law
goes on further to state, “Demand reduction measures must include a
conservation rate structure, or a uniform rate structure with a conservation
program that achieves demand reduction.” Therefore, the City can alter its
current five-tiered system so long as it reduces water demand, water losses, peak
water demands, and nonessential water uses. We have provided four options for
future water rates; 1) leave the current fi ve-tiered system the same but adjust the
volume charge if necessary, 2) provide on e rate for each user class (residential,
non-residential, and non-residential irri gation) that will generate revenues from
each user class that the current block rates do, 3) go to one rate for all water use,
or 4) reduce the five-tiered system to something less.
Water Utility 17
City of Lino Lakes, Minnesota – Water and Sewer Rate Study Update
Water Utility Revenue Revenue requirements indicate the amount of revenue needed for the City to
Requirements continue efficient operations, as well as maintain an adequate cash balance in
the utility. Revenue requirements incl ude operating and maintenance expenses,
debt service payments, capital outlay, and any operating or working capital
reserves. The debt service payments to be made from the Water Utility are for a
portion of the 2010A General Obliga tion Improvement and Utility Revenue
Refunding Bonds.
In 2010 and 2011, revenues from volume charges were approximately
$1,055,000. In 2012, due to an extremely dry year, year-to-date figures estimate
revenues to come in closer to $1,250,000. In order to not overstate revenues in
2013 and beyond, we have assumed 2011 revenues to be a more “normal”
revenue base assuming average rainfall. Therefore we assume 2013 revenues
would increase somewhat to account for minimal new growth in 2012 and 2013
to approximately $1,115,000.
2010 and 2011 consumption data also indicated 77% of volume-based revenues
were derived from residential users, 10% from non-residential users, and 13%
from non-residential irrigation accounts. We assume this pattern will continue
when generating possible rate structures.
The following pages show the projected operating statement and annual cash
balance in the Water Utility, assuming the current rate structure and volume
charges are kept in place over the planning period with increases only
attributable to new customers as discussed on page 13, not from increased rates.
The 2013 proposed budget was used for operating expenditures.
The fund is projected to maintain positive operating income until 2015. At that
time, the City will no longer be fully funding depreciation. However, projected
ending cash balance is sufficient to fund the recommended reserve levels in all
years of the planning period.
Wa
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U
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18
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L
a
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s
,
M
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s
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a
–
Water and Sewer Rate Study Update
Wa
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Water Utility 19
City of Lino Lakes, Minnesota – Water and Sewer Rate Study Update
Water Utility
A rea and Unit
Charge Fund
A rea and Unit
Charge Bonds
Special
Assessments -
Area and UnitTotals
2012 - - - - 45,000
2013 - 289,307 - 317,307 656,614
2014 - 2,603,170 - 337,185 2,992,150
2015 - 1,285,555 - 1,285,555 2,624,764
2016 - 398,343 - - 535,425
2017 - - 902,818 - 960,394
2018 - - 4,751,653 - 4,811,296
2019 - - 2,040,138 - 2,101,922
2020 - 612,433 3,970,743 980,312 5,728,200
2021 - - 745,178 745,178 1,556,656
2022 - - 4,940,354 - 5,009,034
Total- 5,188,808 17,350,884 3,665,537 27,021,455
Capital Outlay To determine the appropriate fees and rates needed for the operation of the
Water Utility over the planning period, we have incorporated the anticipated
future capital outlay needs provided by the Finance Director and City Engineer.
These capital costs and their projected source of funding are shown in the table
below. The capital items are projected to be paid the Area and Unit Charge
Fund. All water and sewer trunk charges are deposited into the Area and Unit
Charge Fund, in addition to the $10 quarterly fee imposed on all water users.
The only capital improvements planned for the Water Utility are related
primarily to projected growth and incl ude new watermains, wells, and a new
ground storage unit. The water capital outla y is projected to be funded with a
mixture of special assessments and G.O. Water Revenue Bonds, which are
projected to be repaid from trunk charge revenue.
A detailed listing of the anticipated cap ital improvements to be paid from the
Water Utility Fund through 2022 as well as the Area and Unit Charge Fund
projections is shown on the following pa ges. Capital Outlay shown in the
Area and Unit Charge Fund also includes Sewer Utility projects. Discussion
of the Sewer Utility appears later in the report.
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Water Utility 22
City of Lino Lakes, Minnesota – Water and Sewer Rate Study Update
Financial Projections The financial projections assumed the City would maintain a minimum cash
balance in the Water Fund equal to th ree months of anticipated operating
expenses and one-year’s debt service within the planning period. In addition,
the City would fully fund depreciation and maintain positive operating income.
These assumptions were made to ensu re that the Water Fund would have
sufficient cash to fund operations going forward as well as meet debt service
requirements.
To determine the appropriate user rates needed for the repayment of debt
service and operation of the Water Fund, we have projected future revenue
and expenditures and have incorporated the anticipated future capital outlay
needs for the time period covered by this study.
The financial projections began w ith the Water Fund expenditures;
subsequently, revenues were adjusted to provide the recommended income,
cash flow, and level of ending cash balan ces. Our expenditure projections are
generally based on an analysis of p ast trends, anticipated changes in
operations, and our significant experien ce in preparing Water rate studies.
Scenario 1 – Keep Current Block Rate Structure
Our projections show that the existing block rate structure combined with
projected growth in the customer-base, will provide sufficient revenues for the
operation of the Water Utility through 2014. In order to obtain the goals stated
above, we determined that a 2.0% increa se in user rates in each of the five
blocks is needed annually 2013-2017.
The projected rate increases are primar ily needed to fund depreciation while
maintaining recommended reserve levels.
The financial projections are shown on the following page.
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Water Utility 24
City of Lino Lakes, Minnesota – Water and Sewer Rate Study Update
Scenario 2 – One Rate for Each Customer Class
In Scenario 2, we assume the City will generally need to generate the same
amount of revenues each year as shown in Scenario 1. The rate for each
residential, non-residential, and non-r esidential irrigation customer is assumed
to be the rate that provides for reside ntial customers generating 77% of total
revenues, non-residential accounts gene rating 10% of annual revenues, and non-
residential irrigation accounts generating 13% of total revenues, as is currently
the case with 2012 rates.
Based on these assumptions the uniform rates for each customer class would
need to be:
As in the first scenario, these volumetric rates would need to be increased by
2.0% annually 2014-2017.
The financial projections are shown on the following page.
Residential Non-
Residential
Non-
Residential
Irrigation
2013$2.02 $2.21 $3.40
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Water Utility 26
City of Lino Lakes, Minnesota – Water and Sewer Rate Study Update
Scenario 3 –Uniform Rate for All Use/Users
Scenario 3 also assumes the same revenu e requirements will need to be met as
in Scenarios 1 and 2. However, Scenar io 3 assumes one rate for all use of all
users. The 2013 rate for all users; residential, non-residential, and non-
residential irrigation customers is recomme nded to be $2.16 per 1,000 gallons.
A uniform rate structure is estimated to alter the total revenues generated from
each customer class as follows:
As in the first two scenarios, these volum etric rates would need to be increased
by 2.0% annually 2014-2017.
The financial projections are shown on the following page.
Residential Non-
Residential
Non-
Residential
Irrigation
Current
Rates
77% 10% 13%
Proposed
Rate
82% 10% 8%
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Water Utility 28
City of Lino Lakes, Minnesota – Water and Sewer Rate Study Update
Tier 1
95.0%
Tier 2
4.3%
Tier 3
0.8%
Residential Accounts by Tier
winter average (2010 ‐2011)
Scenario 4 – Revised Block Rate Structure
One final option we reviewed is to keep a block rate structure, whereby the
price of water increases with volume consumed, but reduce the number of
blocks from five to three for residential and from three to two for non-
residential and non-residential irrigation. The following block rate structure is
proposed in order to meet revenue requirements:
Proposed 2013 Residential Rates
Based on this rate structure, 95% of resi dential accounts would fall into the first
tier and 99.3% in the first two tiers (based on 2010 and 2011 winter average
consumption records).
Proposed 2013 Non-Residential Rates
Proposed 2013 Non-Residential Irrigation Rates
Our proposed rates along with 2.0% increases in these rates 2014-2017 project
depreciation could be funded while main taining recommended reserve levels.
The financial projections are shown on the following page.
Residential
0 – 30,000 gallons $1.89
30,001 – 50,000 $2.09
> 50,000 $2.91
Non-Residential
0 – 50,000 gallons $2.04
> 50,000 $2.30
Non-Residential Irrigation
0 – 50,000 gallons $2.55
> 50,000 $3.57
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Water Utility 30
City of Lino Lakes, Minnesota – Water and Sewer Rate Study Update
Impact on Water Charges The proposed quarterly water bill for an av erage residential water user of 17,500
gallons per quarter, 24,000 gallons per qu arter, and 30,000 gallons per quarter in
2013 compared to current rates for each rate scenario are shown in the tables
below:
Average Residential User of 17,500
gallons per quarter (64.6% of users)
Fixed
Fee/REU
Volume
Charges
Total
Quarterly
Bill 2013
Total
Quarterly
Bill 2012
Increase
2014-2017
Scenario 1
(Current Blocks)
$10.00 $32.20 $42.20 $41.50 2.0%
Scenario 2
(One Rate for Each Customer Class)
$10.00 $35.35 $45.35 $41.50 2.0%
Scenario 3
(One Rate for All Users/All Use)
$10.00 $37.80 $47.80 $41.50 2.0%
Scenario 4
(Revised Block Rate Structure)
$10.00 $33.08 $43.08 $41.50 2.0%
Average Residential User of 24,000
gallons per quarter (86.4% of users)
Fixed
Fee/REU
Volume
Charges
Total
Quarterly
Bill
Total
Quarterly
Bill 2012
Increase
2014-2017
Scenario 1
(Current Blocks)
$10.00 $44.96 $54.96 $54.00 2.0%
Scenario 2
(One Rate for Each Customer Class)
$10.00 $48.48 $58.48 $54.00 2.0%
Scenario 3
(One Rate for All Users/All Use)
$10.00 $51.84 $61.84 $54.00 2.0%
Scenario 4
(Revised Block Rate Structure)
$10.00 $45.36 $55.36 $54.00 2.0%
Average Residential User of 30,000
gallons per quarter (95.0% of users)
Fixed
Fee/REU
Volume
Charges
Total
Quarterly
Bill
Total
Quarterly
Bill 2012
Increase
2014-2017
Scenario 1
(Current Blocks)
$10.00 $57.20 $67.20 $66.00 2.0%
Scenario 2
(One Rate for Each Customer Class)
$10.00 $60.60 $70.60 $66.00 2.0%
Scenario 3
(One Rate for All Users/All Use)
$10.00 $64.80 $74.80 $66.00 2.0%
Scenario 4
(Revised Block Rate Structure)
$10.00 $56.70 $66.70 $66.00 2.0%
The bill for an average residential user in scenarios 2 and 3 is higher due to the
need to generate lost revenues that higher end water users currently pay for
using more water at higher rates.
Water Utility 31
City of Lino Lakes, Minnesota – Water and Sewer Rate Study Update
We recommend the City establish Water rates on a three-year basis. The rates
should be reviewed on an annual basis concurrent with the development of
following year’s budget.
A comparison of an average residential qua rterly bill for the City of Lino Lakes
to the average quarterly bill of other co mmunities selected by the City is shown
below.
The average water bill of the seven co mmunities for a resident using 17,500
gallons per quarter surveyed is $45.75, putting three of the four the proposed
2013 options slightly below average. Some comparable communities have
already adopted 2013 rates. It is noted where that is the case.
Water Utility 32
City of Lino Lakes, Minnesota – Water and Sewer Rate Study Update
WATER RATES - RESIDENTIAL USER - AVERAGE USE 17,500 GALLONS/QUARTER
JurisdictionBlock Usage Water Rates per
1,000 Gallons Volume ChargeBase Charge Total Avg
Quarterly Charge
Lino Lakes0 - 20,000$1.84
SCENARIO 1 - 2013 20,001 - 40,000$2.04
40,001 - 79,000$2.55
79,001 - 120,000$3.06
> 120,000$3.57
Lino Lakes
SCENARIO 2 - 2013 All Use$2.02$35.35$10.00 $45.35
Lino Lakes
SCENARIO 3 - 2013 All Use$2.16$37.80$10.00 $47.80
Lino Lakes0 - 30,000$1.89
SCENARIO 4 - 2013 30,001 - 50,000$2.09
>50,000$2.91
Blaine0 - 24,000$1.06
24,001 - 150,000$1.43
>150,000$2.10
Hugo - 20120 - 15,000$1.50
(2013 rates determined in March)15,001 - 30,000$1.65
> 30,000$2.50
Circle Pines0 - 8,000$1.70
8,001 - 16,000$1.90
16,000 - 35,000$2.35
>35,000$3.25
Centerville0 - 90,000$2.00
2013 rates 90,001 - 150,000$2.20
>150,001$2.50
Lexington0 - 10,000$1.40
10,001 - 20,000$1.68
20,001 - 30,000$2.10
30,001 - 40,000$2.73
>40,000$3.69
Arden Hills0- 10,000$0.00
10,001 - 35,000$3.28
>35,000$5.75
Shoreview0 - 5,000$1.08
2013 rates 5,001 - 10,000$1.74
10,001 - 30,000$2.41
30,001 or >$3.96
Forest Lake (a)0 - 5,000$0.00
2013 rates 5,001 - 15,000$2.87
>15,001$3.54
(a) City has fall/winter rates that vary from spring/summer. Our calculation is an average of the two.
$33.08$10.00 $43.08
$7.50 $39.83
$17.00
$18.55$5.50 $24.05
$63.07
$43.63
$37.55$19.70
$36.60 $10.00
$13.40 $32.18
$32.20$10.00 $42.20
$35.00$21.00 $56.00
$24.60
$26.63
$26.60
$32.33
$57.25
$45.58
$38.47
Water Utility 33
City of Lino Lakes, Minnesota – Water and Sewer Rate Study Update
$0.00
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
$70.00
$80.00
$90.00
Quarterly Residential Water Bill
(24,000 gallons)
The average water bill of the seven co mmunities for a resident using 24,000
gallons per quarter surveyed is $60.56, ag ain putting three of the four proposed
2013 options below average.
Water Utility 34
City of Lino Lakes, Minnesota – Water and Sewer Rate Study Update
WATER RATES - RESIDENTIAL USER - AVERAGE USE 24,000 GALLONS/QUARTER
JurisdictionBlock Usage Water Rates per
1,000 Gallons Volume ChargeBase Charge Total Avg
Quarterly Charge
Lino Lakes0 - 20,000$1.84
SCENARIO 1 - 2013 20,001 - 40,000$2.04
40,001 - 79,000$2.55
79,001 - 120,000$3.06
> 120,000$3.57
Lino Lakes
SCENARIO 2 - 2013 All Use$2.02$48.48$10.00 $58.48
Lino Lakes
SCENARIO 3 - 2013 All Use$2.16$51.84$10.00 $61.84
Lino Lakes0 - 30,000$1.89
SCENARIO 4 - 2013 30,001 - 50,000$2.09
>50,000$2.91
Blaine0 - 24,000$1.06
24,001 - 150,000$1.43
>150,000$2.10
Hugo - 20120 - 15,000$1.50
(2013 rates determined in March)15,001 - 30,000$1.65
> 30,000$2.50
Circle Pines0 - 8,000$1.70
8,001 - 16,000$1.90
16,000 - 35,000$2.35
>35,000$3.25
Centerville0 - 90,000$2.00
2013 rates 90,001 - 150,000$2.20
>150,001$2.50
Lexington0 - 10,000$1.40
10,001 - 20,000$1.68
20,001 - 30,000$2.10
30,001 - 40,000$2.73
>40,000$3.69
Arden H ills0- 10,000$0.00
10,001 - 35,000$3.28
>35,000$5.75
Shoreview0 - 5,000$1.08
2013 rates 5,001 - 10,000$1.74
10,001 - 30,000$2.41
30,001 or >$3.96
Forest Lake (a)0 - 5,000$0.00
2013 rates 5,001 - 15,000$2.87
>15,001$3.54
(a) City has fall/winter rates that vary from spring/summer. Our calculation is an average of the two.
$47.84$13.40 $61.24
$60.56$19.70 $80.26
$39.20$10.00 $49.20
$45.92$38.47 $84.39
$47.60$7.50 $55.10
$48.00$21.00 $69.00
$25.44$5.50 $30.94
$37.35$17.00 $54.35
$44.96$10.00 $54.96
$45.36$10.00 $55.36
Water Utility 35
City of Lino Lakes, Minnesota – Water and Sewer Rate Study Update
$0.00
$20.00
$40.00
$60.00
$80.00
$100.00
$120.00
Quarterly Residential Water Bill
(30,000 gallons)
The average water bill of the seven co mmunities for a resident using 30,000
gallons per quarter surveyed is $74.63, putting three of the four proposed
2013 options below average.
Water Utility 36
City of Lino Lakes, Minnesota – Water and Sewer Rate Study Update
WATER RATES - RESIDENTIAL USER - AVERAGE USE 30,000 GALLONS/QUARTER
JurisdictionBlock Usage Water Rates per
1,000 Gallons Volume ChargeBase Charge Total Avg
Quarterly Charge
Lino Lakes0 - 20,000$1.84
SCENARIO 1 - 2013 20,001 - 40,000$2.04
40,001 - 79,000$2.55
79,001 - 120,000$3.06
> 120,000$3.57
Lino Lakes
SCENARIO 2 - 2013 All Use$2.02$60.60$10.00 $70.60
Lino Lakes
SCENARIO 3 - 2013 All Use$2.16$64.80$10.00 $74.80
Lino Lakes0 - 30,000$1.89
SCENARIO 4 - 2013 30,001 - 50,000$2.09
>50,000$2.91
Blaine0 - 24,000$1.06
24,001 - 150,000$1.43
>150,000$2.10
Hugo - 20120 - 15,000$1.50
(2013 rates determined in March)15,001 - 30,000$1.65
> 30,000$2.50
Circle Pines0 - 8,000$1.70
8,001 - 16,000$1.90
16,000 - 35,000$2.35
>35,000$3.25
Centerville0 - 90,000$2.00
2013 rates 90,001 - 150,000$2.20
>150,001$2.50
Lexington0 - 10,000$1.40
10,001 - 20,000$1.68
20,001 - 30,000$2.10
30,001 - 40,000$2.73
>40,000$3.69
Arden Hills0- 10,000$0.00
10,001 - 35,000$3.28
>35,000$5.75
Shoreview0 - 5,000$1.08
2013 rates 5,001 - 10,000$1.74
10,001 - 30,000$2.41
30,001 or >$3.96
Forest Lake (a)0 - 5,000$0.00
2013 rates 5,001 - 15,000$2.87
>15,001$3.54
(a) City has fall/winter rates that vary from spring/summer. Our calculation is an average of the two.
$62.30$13.40 $75.70
$81.80$19.70 $101.50
$51.80$10.00 $61.80
$65.60$38.47 $104.07
$61.70$7.50 $69.20
$60.00$21.00 $81.00
$34.02$5.50 $39.52
$47.25$17.00 $64.25
$57.20$10.00 $67.20
$56.70$10.00 $66.70
Sewer Utility 37
City of Lino Lakes, Minnesota – Water and Sewer Rate Study Update
5. Sewer Utility
Sewer Rates In addition to quarterly billing charges, the City currently has a Sewer
Trunk/Availability Charge and a Sewer Connection Fee. These fees are as
follows:
Quarterly Charges
Availability Charge
Connection Fee
The Sewer Availability Charge is a fee incurred to recover the capital costs
associated with extending and over-sizing of trunk lines to new developments
within the City. This cost should be established to recover the capital cost
associated with providing the necessary infrastructure to make these services
available to the customer. City sta ff has determined the connection fee and
availability charge to be sufficient at this time.
Sewer Customer The projection of residential sewer connections is the same as projected
Growth Projections new water connections. The projected number of added sewer connections over
the planning period is as follows:
Volume Charges Amount
0 – 10,000 gal $52.00
>10,000 (per 1,000 gallons) $1.00
Per SAC Unit Amount
$2,911
Meter Size
(Inches) Amount
All $200
Residential
(3/4” meter)
Commercial
(1” meter)
2013 50 3
2014 75 3
2015 75 3
2016 75 3
2017 100 3
2018 100 3
2019 125 3
2020 125 3
2021 150 3
2022 150 3
Sewer Utility 38
City of Lino Lakes, Minnesota – Water and Sewer Rate Study Update
Sewer Utility Revenue Revenue requirements indicate the amount of revenue needed for the City to
Requirements continue efficient operations as well as maintain an adequate cash balance in
the utility. The following page shows the projected operating statement and
annual cash balance in the Sewer Utility , assuming no rate increases, over the
planning period 2013-2022.
Operating income is projected to beco me negative at the end of 2012 and
remain negative through the end of the planning period, indicating that
depreciation is not being fully funded. The projected ending cash balance in
2022 is $8,759,808. Sewer utility proj ections through 2022 without any rate
increases are shown on the following page.
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Sewer Utility 40
City of Lino Lakes, Minnesota – Water and Sewer Rate Study Update
Sanitary Sewer
Utility
A rea and Unit
Charge Fund
A rea and Unit
Charge Bonds
Special
Assessments -
Area and UnitTotals
2012 45,000 - - - 45,000
2013 50,000 268,307 - 268,307 586,614
2014 51,795 337,185 - 337,185 726,165
2015 53,654 1,285,555 - 1,285,555 2,624,764
2016 137,082 - - - 137,082
2017 57,576 - - - 57,576
2018 59,643 - - - 59,643
2019 61,784 - - - 61,784
2020 164,712 612,433 1,287,087 980,312 3,044,544
2021 66,300 - 745,178 745,178 1,556,656
2022 68,680 - 4,940,354 - 5,009,034
Total816,226 2,503,480 6,972,619 3,616,537 13,908,862
Capital Outlay To determine the appropriate fees and rates needed for the operation of the
Sewer Fund over the planning period, we have projected future revenue and
expenditures and we have incorporated the anticipated future capital outlay
needs provided by the City. The capital ite ms are projected to be paid from both
the Sewer Utility Fund and the Area and Unit Charge Fund. The capital costs
and their projected source of funding are shown in the table below.
These capital projects to be paid for from the Sanitary Sewer Utility are
primarily related to repair and mainte nance of existing infrastructure. New
items, such as new lift stations a nd trunk lines will be repaid from trunk
charges collected from new users a nd deposited into the Area and Unit
Charge Fund.
A detailed listing of the anticipated capital improvements shows estimated
sewer capital expenditures through 2022 of approximately $13,909,000. The
anticipated capital improvements are shown on the following page.
Sewer Utility 41
City of Lino Lakes, Minnesota – Water and Sewer Rate Study Update
YearProject
Sanitary Sewer
Utility
A rea and Unit
Charge Fund
A rea and Unit
Charge Bonds
Special
Assessments -
Area and UnitTotals
2012Capital Outlay from 2012 Sewer Budget45,000 45,000
2013Gravity Sewer Extension, 21st Avenue Phase 1 (1,320')50,000 50,000 100,000
2013Gravity Sewer, Cedar Street/Centerville Rd218,307 218,307 436,614
2013Sanitary Sewer Rehab50,000 50,000
2014Gravity Sewers, North of Century Farms, Stage 1337,185 337,185 674,370
2014Sanitary Sewer Rehab51,795 51,795
2015Gravity Sewer Extension, 21st Avenue Phase 2 (3,960')275,000 275,000 550,000
2015Gravity Sewer, Lift Station & Forcemain Area 1G603,050 603,050 1,206,100
2015NE Area Trunk Sewer, Stage 1407,505 407,505 815,010
2015Sanitary Sewer Rehab53,654 53,654
2016Sanitary Sewer Rehab55,581 55,581
2016Upgrade Lift Station No. 881,501 81,501
2017Sanitary Sewer Rehab57,576 57,576
2018Sanitary Sewer Rehab59,643 59,643
2019Sanitary Sewer Rehab61,784 61,784
2020Gravity Sewer, 77th Street/Country Lane84,427 337,708 422,135
2020Gravity Sewer, Lake Drive North of Main Street1,287,087 321,772 1,608,859
2020Lift Station & Forcemain, Area 3D276,232 69,058 345,290
2020NE Area Trunk Sewer, Stage 2251,774 251,774 503,548
2020Sanitary Sewer Rehab64,002 64,002
2020Upgrade Lift Station No. 10100,710 100,710
2021Gravity Sewers, North of Century Farms, Stage 2745,178 745,178 1,490,356
2021Sanitary Sewer Rehab66,300 66,300
2022Sanitary Sewer Rehab68,680 68,680
2022West Side Relief Sewer 4,940,354 4,940,354
TOTALS816,2262,503,4806,972,6193,616,53713,908,862
Financial Projections The financial projections assumed the City would maintain a minimum cash
balance in the Sewer Fund equal to th ree months of anticipated operating
expenses and one-year’s debt service within the planning period as well as fully
fund deprecation. This assumption was made to ensure that the Sewer Fund
would have sufficient cash to fund oper ations going forward and meet future
debt service requirements.
To determine the appropriate user rates needed for the repayment of debt
service and operation of the Sewer Fund, we have projected future revenue
and expenditures and have incorporated the anticipated future capital outlay
needs for the time period covered by this study.
The financial projections began w ith the Sewer Fund expenditures;
subsequently, revenues were adjusted to provide the recommended income,
cash flow, and level of ending cash balan ces. Our expenditure projections are
generally based on an analysis of p ast trends, anticipated changes in
operations, and our significant experien ce in preparing sewer rate studies.
Our projections show that the existing rate structure combined with projected
growth in the customer-base, will pr ovided sufficient revenues to meet the
minimum cash reserves recommended, but an increase of 7.0% in 2013 and
2.0% annual increases 2014-2019 will be need ed to fully fund depreciation.
Our projections fund depreciation as well as the recommended reserve levels
in the Sewer Fund throughout the planning period.
The financial projections are shown on the following pages.
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Water and Sewer Rate Study Update
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Sewer Utility 43
City of Lino Lakes, Minnesota – Water and Sewer Rate Study Update
20122013201420152016201720182019
0 - 10,000 gallons 52.00 $ 55.64 $ 56.75 $ 57.89 $ 59.05 $ 60.23 $ 61.43 $ 62.66 $
> 10,000 gals (per 1,000 gal)1.00 $ 1.07 $ 1.09 $ 1.11 $ 1.14 $ 1.16 $ 1.18 $ 1.20 $
$0.00
$20.00
$40.00
$60.00
$80.00
$100.00
$120.00
Quarterly Residential Sewer Bill
(17,500 gallons)
Impact on Sewer Charges The proposed sewer rates are shown below. The proposed user rates were
determined by increasing existing rates by 7.0% in 2013, and 2.0% annually
2014-2019.
We recommend the City establish Sewer rates on a three year basis. The rates
should be reviewed on an annual basis concurrent with the development of
following year’s budget.
A comparison of an average residential 2013 quarterly bill for the City of
Lino Lakes to the average quarterly b ill of other communities selected by the
City is also shown below. The av erage sewer bill of the seven communities
for a resident using 17,500 gallons pe r quarter surveyed is $71.38, putting the
proposed sewer rates at 89.2% of the average.
Sewer Utility 44
City of Lino Lakes, Minnesota – Water and Sewer Rate Study Update
SEWER RATES - RESIDENTIAL USER - AVERAGE USE 17,500 GALLONS/QUARTER
JurisdictionBlock Usage Sewer Rates per
1,000 Gallons Volume ChargeBase Charge Total Avg
Quarterly Charge
Lino Lakes - 20130 -10,000$0.00
10,001 >$1.07
BlaineFlat rate$44.70$44.70 $44.70
Hugo0 - 9,000$0.00
(2013 rates determined in March)9,000 and up $1.85
Circle Pines0 - 8,000$3.55
8,000 - 16,000$3.84
>16,000$4.23
CentervilleAll Use$1.90$33.25$37.00 $70.25
2013 rates
LexingtonAll Use$2.50$43.75$9.00 $52.75
Arden Hills0 - 15,000$0.00
>15,000$4.83
Shoreview0 - 5,000$16.02
2013 rates 5,001 - 10,000$27.58
10,000 - 20,000$42.29
20,001 - 30,000$57.52
>30,000$74.73
Forest Lake10,000$0.00
2013 rates 10,001 or >$5.20 $39.00 $47.00 $86.00
$15.73$50.00 $65.73
$12.08$83.87 $95.95
$37.91 $80.20
$8.03$55.64 $63.67
$65.47$10.00 $75.47
Sewer Utility 45
City of Lino Lakes, Minnesota – Water and Sewer Rate Study Update
SEWER RATES - RESIDENTIAL USER - AVERAGE USE 24,000 GALLONS/QUARTER
JurisdictionBlock Usage Sewer Rates per
1,000 Gallons Volume ChargeBase Charge Total Avg
Quarterly Charge
Lino Lakes - 20130 -10,000$0.00
10,001 >$1.07
BlaineFlat rate$44.70$44.70 $44.70
Hugo0 - 9,000$0.00
(2013 rates determined in March)9,000 and up $1.85
Circle Pines0 - 8,000$3.55
8,000 - 16,000$3.84
>16,000$4.23
CentervilleAll Use$1.90$45.60$37.00 $82.60
2013 rates
LexingtonAll Use$2.50$60.00$9.00 $69.00
Arden Hills0 - 15,000$0.00
>15,000$4.83
Shoreview0 - 5,000$16.02
2013 rates 5,001 - 10,000$27.58
10,000 - 20,000$42.29
20,001 - 30,000$57.52
>30,000$74.73
Forest Lake10,000$0.00
2013 rates 10,001 or >$5.20
$37.91 $95.43
$72.80 $47.00 $119.80
$92.96$10.00 $102.96
$43.47$83.87 $127.34
$14.98$55.64 $70.62
$27.75$50.00 $77.75
The average sewer bill of the seven co mmunities for a resident using 24,000
gallons per quarter surveyed is $89.95, putting the proposed sewer rates at
78.5% of the average.
$0.00
$20.00
$40.00
$60.00
$80.00
$100.00
$120.00
$140.00
Quarterly Residential Sewer Bill
(24,000 gallons)
Sewer Utility 46
City of Lino Lakes, Minnesota – Water and Sewer Rate Study Update
$0.00
$20.00
$40.00
$60.00
$80.00
$100.00
$120.00
$140.00
$160.00
$180.00
Quarterly Residential Sewer Bill
(30,000 gallons)
SEWER RATES - RESIDENTIAL USER - AVERAGE USE 30,000 GALLONS/QUARTER
JurisdictionBlock Usage Sewer Rates per
1,000 Gallons Volume ChargeBase Charge Total Avg
Quarterly Charge
Lino Lakes - 20130 -10,000$0.00
10,001 >$1.07
BlaineFlat rate$44.70$44.70 $44.70
Hugo0 - 9,000$0.00
(2013 rates determined in March)9,000 and up $1.85
Circle Pines0 - 8,000$3.55
8,000 - 16,000$3.84
>16,000$4.23
CentervilleAll Use$1.90 $57.00$37.00 $94.00
2013 rates
LexingtonAll Use$2.50$75.00$9.00 $84.00
Arden Hills0 - 15,000$0.00
>15,000$4.83
Shoreview0 - 5,000$16.02
2013 rates 5,001 - 10,000$27.58
10,000 - 20,000$42.29
20,001 - 30,000$57.52
>30,000$74.73
Forest Lake10,000$0.00
2013 rates 10,001 or >$5.20
$37.91 $95.43
$104.00 $47.00 $151.00
$118.34$10.00 $128.34
$72.45$83.87 $156.32
$21.40$55.64 $77.04
$38.85$50.00 $88.85
The average sewer bill of the seven co mmunities for a resident using 30,000
gallons per quarter surveyed is $105.33, putting the proposed sewer rates at
73.1% of the average.
Conclusions and Recommendations 47
City of Lino Lakes, Minnesota – Water and Sewer Rate Study Update
6. Conclusions and Recommendations
This study was undertaken to review a nd analyze the City’s Water and Sewer
Funds to determine the appropriate rate structure needed to pay for
anticipated operating expenditures, to provide for anticipated capital
improvements, to provide operating cash flow, and to ensure an adequate
level of cash reserves. In addition, water rates recommended were set to
achieve water demand management as required by Minnesota Statutes.
The following conclusions were determin ed as a result of this study and the
financial projections prepared for the years 2012 through 2022.
1. The Water and Sewer Fund’s histor y shows revenues and expenditures,
have remained fairly stable over tim e. Operating income in the Water
Fund is projected to decrease from $324,865 in 2009 to $217,713 in
2012. Operating income in the Sewer Fund is projected to decline more
rapidly from $70,057 in 2009 to ($56,275) in 2012, thereby not funding
depreciation.
2. The City should maintain a minimum cash balance in each Utility fund of
at least three months of anticipated operating expenses and one year’s
debt service at the end of each year. Current and projected cash levels
support this recommendation
3. The current Water Availability/Trunk Charge of $3,854 is adequate to
fund projected capital costs through our planning period of 2022.
However, should growth be expedited and the need for the new water
treatment plant currently projected for 2025 be moved up, we recommend
the City revisit this charge to in clude the capital and associated borrowing
costs of this large capital expenditure.
4. Water user rates should be set to encourage demand reduction as well as
provide for simplicity in understanding. After analyzing current and
historical consumption patterns, we have provided four scenarios for
water rates. They are:
Scenario 1 – Keep Current Block Structure and Adjust Rates
Residential Rates
2012
Rate per 1,000
Gallons
2013
Rate per 1,000
Gallons
Flat Fee of $10 per Residential Equivalent Unit (REU) Same
0 - 20,000 gallons $1.80 $1.84
20,001 – 40,000 gallons $2.00 $2.04
40,001 – 80,000 gallons $2.50 $2.55
80,001 – 120,000 gallons $3.00 $3.06
Over 120,000 gallons $3.50 $3.57
Non-Residential Rates
2012
Rate per 1,000
Gallons
2013
Rate per 1,000
Gallons
Flat Fee of $10 per Residential Equivalent Unit (REU) Same
0 - 20,000 gallons $1.80 $1.84
20,001 – 40,000 gallons $2.00 $2.04
Over 40,000 gallons $2.25 $2.30
Conclusions and Recommendations 48
City of Lino Lakes, Minnesota – Water and Sewer Rate Study Update
Future projections indicate rates may need to be increased by 2.00%
annually 2014 - 2017.
Scenario 2 – One Rate for Each Customer Class
In Scenario 2, the rate for each r esidential, non-residential, and non-
residential irrigation customer is assumed to be the rate which provides for
residential customers generating 77% of total revenues, non-residential
accounts generating 10% of annual revenu es, and non-residential irrigation
accounts generating 13% of total revenues, as is currently the case. The
proposed rates are:
As in the first scenario, these volumetri c rates would need to be increased
by 2.0% annually 2014-2017.
Scenario 3 –Uniform Rate for All Use/All Users
Scenario 3 assumes one rate for all use of all users. The 2013 rate for all
users; residential, non-residential, and non-residential irrigation customers is
recommended to be $2.16 per 1,000 gallons to meet revenue requirements.
A uniform rate structure is estimated to alter the total revenues generated
from each customer class as follows:
As in the first two scenarios, these volumetric rates would need to be
increased by 2.0% annually 2014-2017.
Scenario 4 –Revised Block Rate Structure
The final option reviewed is to keep a block rate structure, whereby the
price of water increases with volume consumed, but reduce the number of
blocks from five to three for residential and from three to two for non-
residential and non-residential irrigati on. The following block rate structure
is proposed in order to meet revenue requirements:
Non-Residential Irrigation Rates
2012
Rate per 1,000
Gallons
2013
Rate per 1,000
Gallons
0 - 40,000 gallons $2.50 $2.55
40,001 – 80,000 gallons $3.00 $3.06
Over 80,000 gallons $3.50 $3.57
Residential Non-Residential Non-Residential
Irrigation
2013 $2.02 $2.21 $3.40
Residential Non-
Residential
Non-
Residential
Irrigation
Current Rates 77% 10% 13%
Proposed Rate 82% 10% 8%
Conclusions and Recommendations 49
City of Lino Lakes, Minnesota – Water and Sewer Rate Study Update
Proposed 2013 Residential Rates
Proposed 2013 Non-Residential Rates
Proposed 2013 Non-Residential Irrigation Rates
Our proposed rates along with 2.0% increases in these rates 2014-2017
project depreciation could be f unded while maintaining recommended
reserve levels.
5. The current Sewer Availability Charge of $2,911 is adequate to fund
projected capital costs.
6. Sewer user rates should be increased by 7.0% in 2013 and 2.0% annually
2014 through 2019.
7. The City should establish the user rates for each utility fund for a three-
year period and review them on an annual basis. The rates should be
reviewed on an annual basis concurre nt with the development of the
following year’s budget.
These recommendations are based on inform ation provided to us by City of
Lino Lakes. The City will need to m onitor the performance of the Water and
Sewer Funds and make any necessary adjustments based upon its actual
performance and on the actual construction costs of the anticipated capital
improvements.
Residential
0 – 30,000 gallons $1.89
30,001 – 50,000 $2.09
> 50,000 $2.91
Non-Residential
0 – 50,000 gallons $2.04
> 50,000 $2.30
Non-Residential
Irrigation
0 – 50,000 gallons $2.55
> 50,000 $3.57
WS – Item 3
WORK SESSION STAFF REPORT
Work Session Item No. 3
Date: April 1, 2013
To: City Council
From: Michael Grochala
Re: 401 Birch Street
Background
The city council received a request from residents in the Spirit Hills development to
pu rchase an existing home located at 401 Birch Street. The property was going through
the foreclosure process and residents felt that the property could be purchased and
developed into a neighborhood park. Staff was directed to research possible funding
g rants to supplement a possible special assessment to neighboring properties to support
the purchase cost.
Review
The foreclosure process is complete and the property is bank owned and being marketed
by Re/Max. It is staff’s understanding that a purcha se agreement was recently accepted.
Following the council meeting staff contacted the Anoka County Housing and
Redevelopment Authority (HRA) to inquire about potential funding opportunities. The
City of Lino Lakes is not a participating member in the Cou nty HRA so funding
opportunities are limited. The HRA does provide funding for redevelopment and/or
renovation of properties to provide affordable housing. Acquisition of properties for
open space purposes is not a n eli g i ble expense. The County does par ticipate in the
Federal Neighborhood Stabilization Program (NSP). Anoka County uses NSP funds to
address housing that has been foreclosed upon and is now vacant or abandoned. The
funding can be used to bring housing units into compliance with health and s afety
requirements and addressing rehabilitation needs or to acquire, demo and resell the
property for redevelopment. However, this location does not fall within a designated
NSP target area.
Staff has reviewed the property for compliance with the City’s property maintenance
code. The property generally complies with the exception of limited siding repairs
necessary on the property’s west side. The owner has been made aware of the need for
these improvements. A new roof was installed on the home in 2007.
Staff also requested WSB & Associates to review alternative funding sources. A memo
with their results is attached. In summary , there are no grant dollars available for this
type of proposed action .
Requested Council Direction
Staff is requesting council direction on next steps if further evaluation is warranted.
Attachments
1. General Location Map
2. WSB Funding Memo
I nfrastructure Engineering Planning Construction 701 Xenia Avenue South
Suite 300
Minneapolis, MN 55416
Tel: 763 -541 -4800
Fax: 763 -541 -1700
CITY OF LINO LAKES MEMORANDUM
To: Honorable Mayor and City Council
Jeff Karlson, City Adminis trator
From: Kelsey Johnson, AICP, Planner
Cc: Jason Wedel, City Engineer
Brian Bourassa, Client Advocate
Meeting Date : March 19 , 2013
R equest : Funding Analysis for Redevelopment of Property Located at 401 Birch
Street
OVERVIEW
T he City of Lino L akes has planned for transportation enhancements at the intersection of Ware Road and
Birch Street (CSAH 34). Th ese enhancements include the installation of a traffic signal on the
southwestern corner of the property located at 401 Birch Street which will be completed this spring .
Given the unique par cel size and the location of the existing house on the property, installation of the
traffic signal may impede on future improvements/redevelopment of the property and therefore the City
was interested in explo ring opportunities to acquire the property and potentially remove the existing
home, and use the land for public open space.
OPPORTUNITIES FOR CITY ACQUISITION
WSB’s funding specialists reviewed the property and analyzed the following funding sources for p roperty
acquisition by the City :
Metropolitan Council Livable Communities Account (TBRA, LCDA, LHIA, TOD)
DEED
Anoka County CDBG
MnDNR Parks and Recreational Trail Grants
ALTERNATIVE OPPORTUNITIES FOR HOME OWNER
Without a complete understanding of the exi sting conditions of the home located at 401 Birch Street, it is
difficult to fully understand the limitations associated with the project. However, some potential funding
sources to investigate include:
HOME Investment Partnership Program – Anoka County
Th e HOME Investment Partnership Program (HOME) funds homeowner rehabilitation (repair
/rehabilitation /reconstruction), homebuyer and rental housing activities (acquisition /rehabilitation /new
construction), tenant based rental assistance (TBRA), and specif ic Community Housing Development
activities. Programs funds are allocated by the U.S. Department of Housing and Urban Development
(HUD).
Eligible projects: Instructions
• New Construction - New construction of both rental and ownership housing.
• Rehabi litation - Includes non -luxury alteration, improvement or modification of an existing structure.
• Reconstruction - Rebuilding a structure on the same lot where housing is standing at the time of
project commitment. The number of units may not be decreased .
• Conversion - Conversion of an existing structure from another use into affordable residential housing.
• Site Improvements : These must be in keeping with improvements to surrounding standard projects.
They include new, on -site improvements (sidewalk s, utility connections, sewer and water lines, etc.)
where none are present. They are essential to development or repair of existing improvements. Off -
site infrastructure is not eligible.
• Acquisition of Property: Acquisition of existing standard proper ty, or substandard property in need
of rehabilitation, is eligible as part of either a homebuyer program or a rental housing project. After
acquisition, rental units must meet HOME rental occupancy, affordability and lease requirements.
• Acquisition of Vacant Land : HOME funds may be used for acquisition of vacant land only if
construction will begin on a HOME project within 12 months of purchase. Land banking is
prohibited.
• Demolition: Demolition of an existing structure may be funded through HOME on ly if construction
will begin on the HOME project within 12 months.
• Relocation Costs : Permanent and temporary relocation assistance are eligible costs.
• Project Related Soft Costs: These costs must be reasonable and necessary. Examples include:
fina nce -related costs; architectural, engineering and related professional services: tenant and
homebuyer counseling, provided the recipient of counseling ultimately
Match:
All recipients of HOME funding must contribute or match 25 cents for each dollar of H OME funds spent
on affordable housing. Match can come from a variety of sources including: cash; forgone taxes, fees and
other charges; donated land or other real property; on -site and off -site infrastructure; proceeds from
affordable housing bonds; donate d site preparation and construction materials; donated use of site
preparation and construction equipment; donated or voluntary labor and professional services; sweat
equity; supportive services; and homebuyer counseling services.
Unfortunately applicatio ns for this program were due January 14, 2013, but will likely be available in
2014 as well.
CONCLUSIONS
While the Council has the community’s best interest in mind with trying to facilitate a public open space
in place of a potential blighted property, t he Council should be cognizant of the impacts that creating a
public open space on this property will have on future transportation improvements on this corridor. Any
future allocation of federal funds to expand the roadway width or install traffic improve ment measures
that would impact “park land” would have to go through a rigorous environmental documentation process
(4f process – EA).
Additionally, after a cursory review of available funding, it does not appear that there are existing
programs that would address the Council’s desires for this property. Funding available through numerous
entities listed earlier in this memo all have goals to develop/redevelop properties to meet affordable
housing needs, job creation needs, or local/regional park and open s pace needs. It does not appear that the
proposed project would meet any of these specified needs.
WS – Item 4
WORK SESSION STAFF REPORT
Work Session Item No. 4
Date: April 1, 2013
To: City Council
From: Julie Bartell, City Clerk
Re: Off -Sale Liquor Licensing
Background
At the council’s January, February and March work sessio n, staff present ed information on
off -sale liquor restrictions in the city and surrounding communities. The information
provided was a sample of what some other cities in the area are doing to regulate the number
of off -sale liquor licenses within their borders. A map w as also presented showing the
location and types of off -sale licenses within the city. S taff reported that the most common
regulations used by municipalities to restrict the number of off -sale lic enses are by proximity
(how close one license may be to ano ther) or by population.
The council requested that staff prepare an ordinance f or consideration that limits the number
of off -sale licenses in this city by the proximity of one -half mile (without consideration of
liquor stores outside the city limits ). Direction was also given to exclude from the
restriction s off -sale locations that are not liquor stores (on/off sale combination, 3.2 percent
off -sale, and off -sale growler). The council also asked for language to prevent licenses from
being held solely for the purpose of value and not for operation of a store. Currently licensed
stores would be automatically exempt from the proximity regulation.
The attached ordinance was drafted by staff to respond to the council’s directions and it has
been reviewed by the City Attorney.
Requested Council Direction
If the council would like to modify the city’s current liquor regulations, passage of an
ordinance would be required.
Attachments
Ordinance No. 01 -13
1 st Reading: Publication:
2 nd Reading: Effective:
CITY OF LINO LAKES
ORDINANCE NO. 01 -13
AMENDING TITLE 700, CHAPTERS 701 OF THE LINO LAKES
CODE OF ORDINANCES RELATING TO LIQUOR LICENSING.
The City Council of the City of Lino Lakes, M innesota, doe s ordain:
Section 1. That Section 701.07 of the Lino Lakes Code of Ordinances
be amended to add a new subdivision 4 and 5 to read as follows:
701.07 PLACES INELIGIBLE FOR LICENSE.
(1) General . No license shall be issued for any place of any business
ineligible for a license under state law.
(2) Delinquent taxes and charges . No license shall be granted for operation
on any premises for which taxes, assessments or other financial claims of the city
are delinquent and unpaid.
(3) Distance from school o r church . No license shall be granted within
1,000 feet of any school or within 1,000 feet of any church. The distance shall be
measured from the main entrance of the school or church to the main entrance of
the applicant's place of business.
(a) For the purposes of the separation restriction in this division, a
school is a building that is principally used as a place where 25 or more persons
receive a full course of educational instruction and the educational instruction is
provided on a daily basis by a n established school board or church. This does not
include any post -secondary or post -high school educational building, including
any college or any vocational -technical college. Nor does the separation apply to a
daycare or early childhood facility, wher e children typically are under constant
supervision while at the facility and when traveling to and from the facility.
(b) The establishment of a school or church within the separation
distance after an original liquor license application has been grante d shall not, in
and of itself, render the premises ineligible for renewal of the license.
(c) This separation distance restriction shall not be applicable if a
school or church is located in a limited business or general business zoning
district.
(4) O ff –sale limitations by proximity. No off -sale intoxicating license
shall be granted for premises located within .50 miles of another licensed off -sale
intoxicating premises within the city as measured between the nearest building
walls of the establishme nts. This provision does not apply to on/off sale
combination licenses, 3.2 percent off -sale licenses, or off -sale brewery licenses.
Licensed premises that fall within .50 miles of each other prior to __________
shall be exempt from the .50 mile restric tion until such time that the licensed
establishment is sold for a purpose other than an off -sale liquor store or the license
has expired or is revoked.
(5) Renewal of inactive licenses prohibited . The city will not renew an off -
sale liquor license if th e holder of the license has not made off -sales authorized by
the license during the one -year period immediately prior to the date of renewal.
Adopted by the Lino Lakes City Co uncil this ___ day of ____, 2013 .
The motion for the adoption of the foregoing ordinance was introduced by Council
Member_____________and was duly seconded by Council Member _____
and upon vote being taken thereon, the following voted in favor thereof:
The following voted against same:
_____________________
J eff Reinert, Mayor
ATTEST:
________________________
Julianne Bartell, City Clerk
S:\CITY COUNCIL \STAFF REPORTS \2013 Staff Reports \04 April 2013 \April 1 Work Session \Item 5, Heron Update.doc
WS – Item 5
WORK SESSION STAFF REPORT
Work Session Item No. 5
Date: April 1, 2013
To: City Council
From: Marty Asleson, Environmental Coordinator
Re: Great Blue Herons in 2012
Background
The Heron Task Force performed a Great Blue Heron nes t inventory late last year in
2012. The inventory showed a dramatic increase in the number of nests and estimated
heron production for the year.
In 2012, there were a total of 253 nests counted. In 2011 there were only 124 nests
counted, 47 in 2010, 63 in 2009, and 58 in 2008. The inventory also revealed that the
Great White Egret had also returned to Peltier Island in 2012. Pre -1998 nests exceeded
1000 nests.
In February of 2013, the Heron Task Force spent a Saturday on Peltier Island working on
flas hing about 22 new trees that were un -flashed from new nesting trees in 2012. The
Volunteers also cleared away “bridges” over the flashing caused by branches falling up
against nesting trees, and removing vegetation that could be used by predators climbing
past the flashing.
WS – Item 7
WORK SESSION STAFF REPORT
Work Session Item
Date: April 1, 2013
To: City Council
From: Chief John Swenson
Re: City Communication Plan & City Social Media Policy
Background
In order to provide all Lino Lakes stakeholders timely, efficient, and quality
communications, staff has developed a communication pl an to ensure consistency and a
social media policy to ensure emerging communication avenues are leveraged to further
the City’s mission .
Requested Council Direction
Staff is pro viding this information for Council review.
Attachments
City of Lino Lakes Communication Plan
City of Lino Lakes Social Media Policy
1
Attach ment WS Item 7
City w ide Communications P lan
Purpose:
To establish a comprehensive communication s plan that furthers the mission of the City of Lino
Lakes.
Goal:
This plan provide s a very high level description of the various ways that the City of Lino Lakes
c an circ ulate strategic, operational, and tac tical information. This plan will also simplify the
levels of communication by using a “s top l ight” method that quickly communicates the urgency
of each message. Green level communications are everyday exchanges of eve nts and news.
Yellow level communications are time -specific communications such as crime alerts, weather
warnings, and event cance ll ations. Red level communications are serious alerts that advise of
emergencies or conditions that need immediate attention . This plan also discuss es a possible
framework for issuing emergency communications.
Assumptions:
It is assumed that all communications will comply with City and d epartment al policies.
Levels of Communication
Strategic
Definition : Strategic c ommuni cations convey the vision and goals for the entire organization.
Purpose: To communicate the direction and focus of the organization as a whole and t o clearly
state the values by which the City operates. Strategic communication provides information on
c i tywide directives and priorities.
Owners: Elected o fficials, d epartment d irectors, a ppointed b oard m embers of C ity c ommittees.
External Level : Green/Yellow
Examples of s trategic communications already in use :
City n ews l etter
Annual r eports
Budgets
S trategic p lans
Charter
Operational
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Definition: Operational communications translate the strategic objectives of the City of Lino
Lakes into a series of action items or informational products that are specific to a group,
geographic region, or entity.
Pu rpose: To provide information that assists in directing staff members and stakeholders to ward
objectives that support s the mission of the City of Lino Lakes.
Owners: Department d irectors, e lected o fficials, and department -designated employees.
External Level: Green/Yellow
Examples of o perational communications already in use :
City Council m eeting agendas and minutes
Department budgets and goals
Department newsletters and social media postings
Department media releases
Tactical
Definition: Tactical co mmunication products communicate the specifics of an individual event,
task, or plan.
Purpose: The purpose of tactical communication is to direct individuals to take appropriate
action to achieve a speci fic goal and to advise stakeholders of a situation t hat may affect them.
Owners : All employees and Elected Officials
External Level : Yellow/Red
Examples of t actic al communications already in use:
Media alerts and advisories
Weather s irens
Emergency notifications
Social media postings
Face -to -face communi cation
Communication Dissemination Plan
Taking into consideration the volume of information between each department and the public, it
is impractical to share all external communication with every staff member. T o ensure that
important messages are sha re d throughout the organization, each department designate s a
Primary Contact (PC) and Backup Contact (BC). In addition , three email groups will be created .
The “Green” email group will consist of the p rimary and b ackup contacts for each department.
The “Yellow” email group will c onsist of the p rimary and b ackup contacts for each department
and the d epartment d irectors. The “Red” email group will consist of all C ity staff and elected
officials (see Figure 1).
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It is important that communication s be cons istent . The exact format should be determined by the
department director or a designee. An example is attached
Along with a consistent printed message, the C ity website should contain a sidebar with links to
each department ’s Green and Yellow level commu nication, along w ith a brief description of
each. A Red l evel communication is signified by a red graphic that contains the emergency
information , which should appear at the top of all the pages in the C ity website.
Roles and R esponsibilities of the P rimary and Backup C ommunications C ontacts
Both the PC and BC should be able to produce and post every medium of communication that
the department produces. For example , if the department has a F acebook or Twitter account,
both the PC and BC should have t he skills and training necessary to post to th e se sites. The
p rimary c ontacts and b ackup c ontacts for each department will be included in a “Green” email
group. All external communications will be copied to the Green email group to ensure that
department s are aware of any activity in another department . When the PC and BC receive
information from other departments, they should determine what information should be shared
with in their department . U sing the PCs and BCs as a hub of citywide communication wi ll
reduce in formation overload.
The PC and BC should be adequately trained in the legal aspects of communicati on via social
media , which includes data privacy.
The PCs and BCs for each department should meet monthly to evaluate the communication
proces s and any upcoming events.
Roles and Responsibilities when Red L evel C ommunication is a nnounced
When a condition exists that requires immediate and urgent communication, a Red l evel alert
will be issued. Because an emergency condition will affect publ ic health and safety, the Public
Services Director or Public Safety Director will be the primary point of contact depending on the
specific nature of the situation. The responsible d irector or designee will prepare the alert in
coordination with the City Administrator. No official Red level communication should be sent
prior to notifying the City Administrator unless it is not practicable to do so . Once created, the
message will go out to the Red email group . D epartment d irector s are responsible for ens uring
that the message goes out on every available communication medi an . If a condition exists that
requires more than a notification, the responsible d irector may call for the use of an emergency
operations center , which would operate under the guideline s of the City’s E mergency
M anagem ent Plan.
There may be a need to update staff on Red level communications with information that is not
for public consumption. Any such printed or electronic communication should be prefaced with
the following words: “F OR INTERNAL COMMUNICATION ONLY. NOT TO BE
R ELEASED TO THE PUBLIC OR MEDIA.”
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Examples of Format Header s
City Logo Title and Level Department Specific logo
City of Lino Lakes
[Insert Department]
[Insert Title of Document]
(background colo r can indicate
level of communication)
Example 1:
City of Lino Lakes
Police Department
Crime Alert
December 20, 2012
Communication Urgency: Yellow
Example 2:
City of Lino Lakes
Park and
Recreation
Health and Safety
Hazard Alert
Dece mber 20, 2012
Communication Urgency: Red
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Attach ment WS Item 7
City of Lino Lakes
Social Media Policy
Purpose
To address the fast -changing landscape of the Internet and the way residents communicate and
obtain information online, City of Lino Lakes departments may consider using social media tools
to reach a broade r audience. The City encourages the use of social media to further the goals of
the City and the missions of its departments.
This policy establishes the following guidelines for the use of social media.
General
1. All City of Lino Lakes social media sites posted by departments will be subject t o
approval of the City Administrator.
2. The City of Lino Lakes website will remain the City's primary communication tool .
3. The most appropriate social media tools are generally used for disseminating time -
sensitive inf ormation as quickly as possible (e.g. emergencies), and for broadcast ing
messages to a wide audience. Whenever possible, content posted to the City’s social
media sites will also be available on the City's main website.
4. D e signated staff members will be re sponsible for the content and upkeep of any social
media sites created in their department.
5. Wherever possible, City of Lino Lakes social media sites shall comply with all
appropriate City policies and standards. S ocial media sites shall also comply with L ino
Lakes ’ e thics code and administrative rules.
6. City of Lino Lakes social media sites are subject to public records laws. Any content
maintained in a social media format that is related to City business, including a list of
subscribers and posted communi cation, is a public record. The d epartment maintaining
the site is responsible for responding completely and accurately to any public record
request s on social media. Content related to City business shall be maintained in an
accessible format and so that it can be produced in response to a request . Wherever
possible, such sites shall clearly state that any content posted is subject to public
disclosure
7. The C ity of Lino Lakes will comply with the records retention policy for all social media
site s.
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8. User s shall be informed that the purpo se of social media sites is to facilitate
communication between City departments and the public. The following content shall
not be allowed:
a) Comments not topically related to the particular social medium article being
commented upon;
b) Comments in support of or opposition to political campaigns or ballot measures;
c) Profane language or content;
d) Content that promotes, fosters, or perpetuates discrimination on the basis of race,
creed, color, age, religion, gender, marital status, status with regard to public assistance,
national origin, physical or mental disability or sexual orientation;
e) Sexual content or links to sexual content;
f) Solicitations of commerce;
g) Conduct or encouragement of illegal activity;
h) Information that may tend to compromise the safety or security of the public or public
systems; or
i) Content that violates a legal ownership interest of any other party.
These guidelines must be displayed to users or made available by hyperlink. Any content
removed based on th ese guidelines must be retained, including the time, date and identity
of the poster when available . The City reserves the right to restrict or remove any content
that is deemed in violation of this social media policy or any applicable law.
9. The City will approach the use of social media tools as consistently as possible,
enterprise wide.
10. All new social media tools proposed for City use will be approved by the City
Administrator .
11. Administration of City of Lino Lakes social media sites.
a) The City Administ rator will maintain a list of social media tools which are approved
for use by City departments and staff.
b) The City Administrator will maintain a list of all City of Lino Lakes social media
sites, including login and password information.
c) The City must be able to immediately edit or remove content from social media sites.
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S ocial M edia T ools A pproved for Use
Twitter
Twitter is a micro blogging tool that allows account holders to tweet up to 140 characters of
information to followers. By procuring and maintaining Twitter accounts, City departments will
commun icate information directly to its followers, alerting them to news and directing them to
other sites for more information . The following standards should be followed when using
Twitter:
Department p ersonnel shall hold and maintain their department's Twitter account.
Each department wil l have only one Twitter account. A ccount information, including
usernames and passwords, shall be provided to the City Administrator .
The department's Twitter bio will include: d epartment name, c omments, and list of
follower s subject to public disclosure . The following message may also be added: “This
site is not monitored. Call 911 for emergencies.”
Twitter usernames shall begin with "Lino Lakes " (e.g. Lino Lakes PD, Lino Lakes Public
Services). In cases where the username is too many characters, begin with "LL " (LLPD ).
Department Twitter account backgrounds will display the standardized city logo.
Twitter accounts shall serve three primary purposes:
o Get emergency in formation out quickly
o Promote City -sponsored events
o Refer followers to content hosted on the city ’s website
Information posted on Twitter shall conform to departments’ policies and procedures .
Tweets shall be relevant, timely , and informative.
Twitter cont ent shall mirror information presented on Lino Lakes ’ website and other
communication medians . City personnel shall ensure that information is posted correctly
the first time. Twitter does not allow for content editing.
The C ity wi ll comply with all data retention policies provided by Twitter .
Facebook
Facebo ok is a social networking site that enables the City of Lino Lakes to promote activities,
programs, projects , and events. City departments are able to inform more people about City
activities by d irecting them to the City’s w ebsite. When a department determines it has a
business need for a Facebook account, it will submit a request to the City Administrator . Once
approved, a ll content must meet the following standards:
The City will create “pages ” in Facebook , not “groups.” Facebook pages offer distinct
advantages , including greater visibility, customization , and measurability. Community
pages will currently be accepted unless there is a copyright or trademark issue.
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A Facebook page must be appro ved by the City Administrator , which includes a picture
and the City logo or a department logo.
Departments should include a mission introduction on the Wall Page and direct users to
the Wall to connect them to the latest content. Boilerplate text regardi ng public
disclosure and comments will be created similar to the following:
This site is intended to facilitate communication between the public and [insert
department] on the topics listed . Any comments submitted to this page are public
records subject t o disclosure .
If comments are turned on, the Wall page should include a link to a “Comment Policy ”
tab with the following disclaimer:
Comments posted to this page will be monitored. T he City reserves the right to
remove inappropriate comments including t hose that have obscene language or
sexual content, threaten or defame any person or organization, violate the legal
ownership interest of another party, support or oppose political candidates or
ballot propositions, promote illegal activity, promote commer cial services or
products , or is not topically related to the posting .
A link to the Lino Lakes website will be included on the i nfo rmation page.
Department and project pages should be page favorites of other City Facebook pages.
Page name should be descri ptive of the department.
Departments need to be careful not to use abbreviations, acronyms, and slang words that
are not universally understood by the general population .
A s uccessful page requires frequent monitoring. Each department is responsible for its
own Facebook page. Posts should be approved by the Primary Contact o r a designated
alternate.
Facebook pages will include consistent City branding.
Departments must use proper grammar and standard AP style, avoiding jargon and
abbreviations.
An app lication should not be used unless it comes from a reliable source and is approved
by MetroINET .
An application may be removed at any time if there is significant reason to think it may
cause a breach in security or a virus risk.
WS – Item 8
WORK SESSION STAFF REPORT
Work Session Item No. 8
Date: April 1, 2013
To: City Council
From: Jeff Karlson
Re: Community Survey
Background
Last year there was some interest from the City Council to conduct a community survey.
I r eceived a proposal from Decision Resources in May 2012, which I have included in the
packet. This idea was brought up again at a recent work session.
Decision Resources was retained by the City of Lino Lakes in 2005 to conduct a
residential quality of li fe study. They proposed conducting a similar telephone survey
that include s a random sample of 400 households in Lino Lakes. The telephone calls take
place during various times on weekday evenings and during the weekend. The
questionnaire would be admin istered by trained and supervised personnel.
The cost is based on the number of questions. For example, the cost to conduct a 50 -
question survey with a random sample of 400 residents would be $12,500. Each
additional question beyond the initial allotmen t of questions would be $135.
The City of Coon Rapids recently contracted with Decision Resources to administer a 60 -
question survey at a cost of $13,500. There are a few other firms that perform
c ommunity surveys, but I have not contacted any other fi rms.
Requested Council Direction
If the Council expresses interest in moving forward with a community survey, staff needs
further direction on how to proceed.
Attachments
May 2012 Proposal from Decision Resources
DECISION RESOURCES, LTD.
3128 Dean Court
Minneapolis, Minnesota 55416
May 7 , 2012
Mr. Jeff Karlson
City of Lino Lakes
6 00 Town Center Parkway
Lino Lakes, MN 55014
Dear Jeff :
Decision Resources, Ltd., is pleased to present this survey research proposal to you for the City
of Lino Lakes . This prospectus is organized in three parts: a potential design ; project s chedule;
and, estimated project costs. As you will see, I am certain that DRL can provide th e City of Lino
Lakes with the information it seeks in both a cost -effective and timely manner.
DESIGN OF THE RESEARCH:
Decision Resources, Ltd., proposes to conduct a telephone survey of 400 randomly selected
households in the City of Lino Lakes . A samp le of 400 residents would provide results
projectable to the entire city adult population within ± 5.0 percent in 95 out of 100 cases. The
sample is also of sufficient size to permit the city to be divided into a maximum of four
categories for more detail ed analysis, such as age, mobility, home ownership, location of
residence, presence of children, and other demographic characteristics.
To insure the integrity of the sample, DRL places the most exacting sampling standards in the
industry on our procedu res. Before an alternate household is substituted for a designated target,
at least ten tries are made to contact the initial households during a five -day period. The
telephone calls take place during various times on weekday evenings and during the week end.
Our interviewers are also instructed to seek convenient appointments with interviewees, cutting
our non -contact rate to less than five percent on average. An unbiased selection process is also
used to identify the adult member of the household to be interviewed. To validate the completed
sample, the latest United States Census updated population characteristics are utilized as a
standard of comparison.
The questionnaire would be administered by DRL trained and supervised personnel. The
computer ana lysis will be obtained from our in -house C -MENTOR and SPSS statistical analysis
systems, insuring both access to the most current analysis programs and confidentiality of the
data set.
City of Lino Lakes
Resid ential Survey Research Proposal
May 2012
The City of Lino Lakes will be presented with b ound copies of the final report highlighting all
the major findings of the study. DRL will also speak to any major differences from and
similarities with the past stud ies of the community, when applicable, in addition to other similar
communities. A volume of all computer -gener ated cross tabulations and other multivariate
statistical techniques will also be included.
PROJECT SCHEDULE :
1. Planning with City Council Members, City Staff, and/or relevant individuals to establish the
topics to be covered in the survey. Based on these topic concepts, DRL would word specific,
neutral questions. This activity can be completed by telephone an d/or fax, depending on client
wishes, within two weeks of the initiation of the contract.
2. Structuring of questions and final approval of the survey instrument. These activities are
usually completed within four weeks of the discussion of topics to be covered in the survey.
3. Final determination of the field dates for interviewing.
4. Pre -testing and, if needed, approval of resulting revisions. This activity is usually completed
by the second day of fieldwork.
5. Completion of all fieldwork within a t wo -to -three week period.
6. Coding, data entry and preparation of the frequencies. The frequencies are available within
two weeks after completion of the fieldwork.
7. Delivery of the final written report to the City of Lino Lakes , includin g presentation graphics.
Afterwards, telephone consultation, as the need arises, will be provided about the study’s
findings and implications.
PROJECT COSTS:
The cost of a survey is driven by two factors: sample size and questionnaire length. The cost to
co nduct a 50 question unit survey with a random sample of 400 residents would be $1 2 ,5 00.00.
Each additional question unit beyond the initial allotment would be $135.00. The typical city
survey is generally between 1 1 0 and 1 5 0 questions with an es timated cost of between $1 6 ,000
and $2 2 ,000.
As company policy, DRL requires one -half of the cost prior to the commencement of fieldwork;
the remainder is due upon delivery of the final written report. Unless otherwise arranged, DRL
invoices clients for the initial payment at the time of the initiation of the contract; the remainder
is due at the time of the receipt of the final written report.
City of Lino Lakes
Resid ential Survey Research Proposal
May 2012
If you require any further information from us, feel free to contact Bill Morris, Diane Traxler, or
me. We l ook forward to the opportunity to work with the City of Lino Lakes .
Sincerely,
Peter Leatherman
Peter Leatherman
Research Director
Bald Eagle/Elmcrest Corridor
Issue: Bald Eagle Blvd and Elmcrest Roads have been neglected to years. Split between Counties with no
o verall plan for the area. There are many issues impacting the future of these roads and the growth
around them.
What I’m proposing encompasses several factors:
• Water shed issues and clean water
• Environmental issues
• Joint powers between cities
• Public safety
• Transportation
In business, simpler is better. In government, experience tells us that complicated projects tha t involve
many stakeholders, that offers something to numerous groups, gets the grant funding and participation
from the stakeholders.
This proposal involves three areas:
1. Bald Eagle Blvd
• Patchwork of pot hole fixes
• Water run off into an impaired lake
• A b ike path that ends at the county line
• Heavy usage by bike clubs and pedestrians
• Sharp blind corners
2. Elmcrest
• A cratered dirt road and connector street to Lino Lakes . Drivers avoid this road if they can.
• Starts as paved, 100 ft later, dirt, borders Lino Lakes then becomes paved again, and just as it enters
Lino Lakes it becomes dirt again.
• It connects Fable Hills, Hugo Gardens, Clearwater Creek , Hugo and West Oaks neighborhoods
• Its condition forces traffic through the Clearwater Creek neighborhood on a narrow winding road with
park ing on each side, past a park with children playing. This road never intended to be a major
artery. Due to programs like MapQuest, traffic is directed through this narrow winding street.
• This is a public safety liability just waiting to happen. I’m sure our city vehicles take a beating too.
3. Elmcrest to Otter Lake Road to Main Street.
• Dirt, paved, dirt again
• Environmental issues with dusty road oiled each year
• Could be link to Met Council park and ride if made safe for cars and bikes.
Red is Elmcrest
Black line represents paved area
Blue circle shows Tart Lake Rd which
was never intended to be used as it is
Blue circles are where road turns into
dirt road, with hundreds of pot holes. In
summer, oil is sprayed on the road to
keep dust down. Env ironment issue?
New park and ride to be built on
Centerville/Lino Lakes Border.
Lino Trail starts at SE corner of
Clearwater Creek neighborhood and
follows Otter Lake Rd up the Main St.
Pulling it all together wit a plan:
• Water shed funds and Legacy Funds to correct Bald Eagle Blvd to run rain water away from the
lake at first, toward a holding area to be cleaned and returned to Bald Eagle Lake. Let’s not make
the mistakes White Bear Lake has made.
• Storm sewer on the west side of the road allows road to be widened to accommodate cars , bikes
an d pedestrians improving what is a narrow road with many curves . Pave on top of storm sewer
allows for con necting trail system.
• Connect Ramsey County bike trail to Elmcrest to allow commuters access to the park and ride
station on Main St.
• Pave Elmcrest and extend the bike trail to connect to the Lino Lakes system trails just south of
Clearwater Creek .
• Pave El mcrest to connect just south of Fable Hills.
• WSB are the engineers in LL and Hugo. They have a person who works on g rants. Get that
department engaged to secure the funding and plan the various stages.
• Pave Elmcrest north of Fable Hills to connect to Otter Lake. This wil l reduce traffic on Tart Lake
Rd . and allow for an express route to Otter Lake Rd and beyond.
• Connect the bike trails from Otter Lake through Main to the park and ride plus throug h
Centerville toward the Anoka C ounty park and the new bridge for bikes over 35W
What it will take
• Joint powers between Lino Lakes and Hugo to develop a plan
• Engage WSB (both cities employ WSB) and their various departments
• Include Rice Creek Watershed
• Include Bald Eagle Lake Assoc.
• Include Met Council for transp ortation
• Grant writing for Legacy Grant on clean water and transportation
• State and County elected officials
Next Steps:
Decide if we want to put a comprehensive plan together to solve these issues. If so, contact Hugo.
Engage WSB. Notifications to government groups of the plan and their role. Keep the ball moving
forward.
Dave Roeser March 28, 2013