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LAKE ELMO CITY COUNCIL MINUTES <br /> OCTOBER 2, 2012 <br /> <br />Page 2 of 8 <br /> <br />future properties, the conservative structuring of projected debt, and the adoption of a formal fund balance policy. Ms. Omdahl provided an overview of the projected Capital Improvement Plans and Debt Service. In response to council and staff inquiries, Ms. Omdahl explained if growth is greater, the city may push forward some of the revenues if the growth supported it. In response to council inquiries regarding the interest rates utilized in the report, Ms. Omdahl explained the long term rate was estimated at 50 points above what the rates are currently, but the short term rate was estimated at 2 to 2-1/2 percent or 25 basis points above current rating. She presented a comparison of neighboring community rates for water, sewer, and storm water. Lake Elmo is at the middle to higher end for each. <br />[Council Member Smith arrived at 7:24 P.M.] She explained the Financial Plan as it relates to options the city will have in choosing to utilize bonding and/or cash to pay for the projects. She explained financial figures were determined with the objective to maintain a cash balance equivalent to 50% of operating expenditure. Again, growth will play a major role in impacting the estimated rates and options. Inquiries were made regarding the assumptions made on growth, especially south of 10th street and City Administrator Zuleger explained the numbers in the report are conservative and confirmed the million dollar grant is included in these numbers. The currently known interested developers expect a typical pace of 20-40 lots per year. Once sewer and water are available, the numbers are expected to increase exponentially. Commercial units are not as well understood at this time and are very conservative in this report. The years 2013 through 2015 are about 70 percent based on the I-94 Corridor Plan. Currently the city has no Sewer Access Charge. In the report, the SAC charges are recommended in lieu of assessment charges for sewer connection. She explained the report recommendations would require the property owners who have the pipe running in front of their property to pay the access charges (SAC) to gain revenue for the project. Council expressed concerns for residents who opposed development having to pay even if they were not interested in sewer/water connection. Council Members Pearson and Smith expressed their support for the connection charges. City Attorney Snyder explained this presentation was to begin discussion about the items and review the options presented. He explained the two different options with numerous variations that would likely be vetted out in the near future. Council inquired about the rates appearing greater in comparison to the communities represented in the report. It was explained that the tier structure is not shared by all communities, but the neighboring utility structures all vary greatly. The large lot sizes in the community could also play a role in higher payments. City Administrator Zuleger reminded that the use of Oakdale’s water also increases rates.