HomeMy WebLinkAboutItem 18 - CC 2.24.15_2013 Utility Study Lake ElmoCity of Lake Elmo, MNFinancial Management Plan ForWater, Sanitary Sewer, and Storm Sewer Services2013 REPORTAs of February 28, 2013NORTHLAND STRATEGIESSpecial Projects GroupThe information presented in the report is intended solely for financial planning purposes. Northland Securities is not providing advice on the timing, terms, structure or similar matters related to a specific bond issue.
iLetter of TransmittalExecutive Summary 1Study Approach ..........................................................................................................................................1Conclusions from Study...........................................................................................................................1Recommendations ....................................................................................................................................2Organization of the Report ....................................................................................................................2Using the Report ........................................................................................................................................3Background 4Water ..............................................................................................................................................................4Sanitary Sewer ............................................................................................................................................4Storm Sewer .................................................................................................................................................4Capital Improvement Plan 5Capital Improvement Projects...............................................................................................................5Source of Funding .....................................................................................................................................5Debt Service .................................................................................................................................................5Capital Improvement Plan Water .........................................................................................................7Capital Improvement Plan Sanitary Sewer .......................................................................................8Debt Service Summary Years 2012 to 2021 ......................................................................................9Water Fund - Future Debt Service ......................................................................................................10Sanitary Sewer Fund - Future Debt Service ....................................................................................11Combined Water and Sanitary Sewer Debt Service Years 2012 to 2035 ..............................12Outstanding Debt Obligations Estimated for Future Years ......................................................13Utility Rates 14Key Factors .................................................................................................................................................14Annual Operating Expenditures .........................................................................................................14Metropolitan Council Environmental Services ..............................................................................14Annual Capital Expenditures ...............................................................................................................14Debt Service ...............................................................................................................................................15Growth in Customers ..............................................................................................................................15Available Other Revenue Sources ......................................................................................................15Future Utility Rates ..................................................................................................................................16Projected Volumes of Water Sold and Sanitary Sewer Billed ...................................................16Table of Prior Years Utility Rates (2007-2011).................................................................................18Table of Projected Future Utility Rates .............................................................................................19Table of Projected Volumes of Water Sold and Sanitary Sewer Billed ..................................20Chart of Projected Volumes of Water Sold ......................................................................................21Financial Plans 22Key Assumptions ......................................................................................................................................22Water Fund ................................................................................................................................................23Contents
iiSanitary Sewer Fund ...............................................................................................................................24Storm Sewer Fund ...................................................................................................................................25Appendix 26Water Fund Projected Cash Balances................................................................................................26Sanitary Sewer Fund Projected Cash Balances..............................................................................27Storm Sewer Fund Projected Cash Balances ..................................................................................28Water Fund Sources and Uses .............................................................................................................29Sanitary Sewer Fund Sources and Uses ...........................................................................................30Storm Sewer Fund Sources and Uses ...............................................................................................31Example Residential Water and Sanitary Sewer Bill ....................................................................32Example Commercial Water and Sanitary Sewer Bill ..................................................................33Comparison of Estimated Utility Bill to Other Cities ...................................................................34Projected Growth in Units from Land Development ..................................................................35
iiiȱ45ȱSouthȱ7thȱStreet,ȱSuiteȱ2000,ȱMinneapolis,ȱMNȱ55402ȱȱMain:ȱ(612)ȱ851Ȭ5900ȱ/ȱDirect:ȱ(612)ȱ851Ȭ4992ȱ/ȱEmail:ȱrfifield@northlandsecurities.comȱMemberȱFINRAȱandȱSIPCȱFebruaryȱ28,ȱ2013ȱȱDeanȱZulegerȱȱCityȱAdministratorȱLakeȱElmoȱCityȱHallȱ3800ȱLaverneȱAvenueȱNorthȱLakeȱElmo,ȱMNȱ55042ȱȱRE:ȱUpdatedȱFinancialȱManagementȱPlanȱforȱCityȱUtilityȱFundsȱDearȱDean:ȱNorthlandȱSecurities,ȱInc.ȱisȱpleasedȱtoȱpresentȱyouȱwithȱanȱupdateȱtoȱtheȱ2012ȱFinancialȱManagementȱPlanȱforȱCityȱUtilityȱFunds.ȱȱNorthlandȱwasȱhiredȱforȱfinancialȱplanningȱservicesȱforȱutilityȱsystemȱuserȱchargesȱandȱrates.ȱȱServicesȱincludeȱperformingȱaȱutilityȱrateȱanalysisȱforȱtheȱWater,ȱSanitaryȱSewer,ȱandȱStormȱWaterȱUtilityȱSystemsȱofȱtheȱCityȱofȱLakeȱElmo.ȱTheȱanalysisȱandȱreportȱincludesȱaȱreviewȱofȱtheȱpastȱfinancialȱperformance,ȱprojectedȱgrowthȱinȱresidentialȱequivalentȱconnections,ȱȱdeterminesȱtheȱadequacyȱofȱcurrentȱrevenues,ȱandȱprovidesȱrecommendationȱonȱfutureȱratesȱwhichȱreflectȱprojectedȱfutureȱexpenseȱandȱcapitalȱoutlay.ȱȱȱȱȱWeȱappreciateȱtheȱopportunityȱtoȱworkȱwithȱtheȱCityȱofȱLakeȱElmo.ȱSincerely,ȱȱTammyȱOmdalȱManagerȱofȱNorthlandȱStrategies/SeniorȱViceȱPresidentȱȱ
1Executive SummaryEXECUTIVE SUMMARYThe report is presented as an update to the October 2, 2012 Financial Management Plan for Water, Sanitary Sewer, and Storm Water presented to the Lake Elmo City Council. The City requested an update to the 2012 Report to consider the fi nancial impact of revised growth projections for the City.The report and fi nancial management plan is intended to serve as a guide for the fi nancial management of the City’s utility services. The report contains information on capital improvement plans to increase capacity of the utility systems, estimated future utility rates need-ed to support operations and capital improvement plans, and multi-year fi nancial plans for each of the three utility funds that includes projected sources and uses of funds and estimated cash balances by year. The fi nancial plans included in the report are built around identifi ed key assumptions, including growth projections, cost drivers, and projected utility rates. To the extent the assumptions in the report change in the months and years ahead, which they will, the City will need to continue to adjust its fi nancial plans accord-ingly.Study ApproachThe report was prepared by Northland Securities. The following steps were taken as part of the study pro-cess:• City provided information on historical spending and revenues, volume of water sold by diff erent tiers and customer, capital improvement plans, and prior years budget information.• City provided information on projected growth from future residential and commercial develop-ment.• Information provided by the City was organized, analyzed, and used to support the development of fi nancial plans.• Once the initial fi nancial plans were developed dif-ferent scenarios were considered and analyzed to determine impact on utility rates.• City staff off ered input and feedback on the as-sumptions and desired outcomes.It is also important to note aspects of fi nancial perfor-mance not reviewed as part of this study:• The validity of the assumptions and fi gures pro-vided by the City on future growth was not re-viewed.• Analysis of the basis for the City’s determination of prior sewer and water availability charges was not reviewed.• The report does not include identifi cation of proj-ect costs for construction of lateral utility line build outs. The City anticipates that future lateral build outs will be fi nanced 100 percent through special assessments to benefi ting property. • The fi nancial impact to the City of potential chang-es to the existing customer tier structure for charg-ing for water and sanitary sewer services was not reviewed as part of this study.
2Executive SummaryConclusions from StudyThe following conclusions were identifi ed as a result of this study:1. To meet projected service demands, the City will need to expand its capacity to deliver water and sanitary sewer services. This is driven by the City’s projections for future development; the addition of housing and commercial units. The City plans to pay for the improvements through a combination of projected available cash, issuance of debt, grants and other intergovernmental proceeds.2. Higher utility service fees for existing customers will be needed if new development does not occur at projected rate of growth. The issuance of debt to fi nance the identifi ed improvements for water and sanitary sewer will require increased revenue to cover annual debt service. The City anticipates an increase in revenue driven by new development. If development occurs at a slower pace than pro-jected, it may require the City to adjust the rates shown in the report. To be conservative, the study and report assume 50 percent of the total estimated annual growth (development) of residential and commercial units is realized for the purpose of es-timating future revenue.3. Projected future year-end cash balances in the util-ity funds is estimated to be at or greater than 50 percent of operating expenditures. The fees and charges included in the report, combined with the projected historical volume of water sold, plus the projected “new” revenue from new residen-tial equivalent connections (REC) will provide the cash needed to operate and maintain the utilities and to cover debt service.RecommendationsThe following recommendations are off ered based on the Conclusions from the Study.1. The City should adopt a new charge for the cost of connecting to municipal sanitary sewer and in-crease the amount it presently charges for connec-tion to municipal water. This charge should refl ect the City’s cost of infrastructure for providing ser-vice. This new and increased charge is included in the report and refl ected in the revenue shown in the fi nancial plans. The charge will be collected with the building permit.2. The City should implement a uniform trunk line availability charge for water and sanitary sewer services. The charge will be collected from proper-ty owners/developers when property is developed; it will be collected with the develpoment contract for new development. The report does not include the cost of lateral build outs of utility lines. The study anticipates the City will assess 100 percent of lateral lines to benefi ting property.3. The City should plan to structure future debt in a conservative manner to provide the City with time for future development to occur and the fl exibility to restructure debt if necessary. This may include delaying certain maturities and earlier call dates. An issuance of debt into the public market will re-quire an credit rating review. The City’s general obligation debt is currently rated Aa2 by Moody’s Investors Service. The City’s current debt profi le is viewed by Moody’s as “moderate”. Even though general obligation revenue bonds are planned to be self supporting from enterprise revenues, the debt will be fully accounted for in the G.O. debt
3Executive Summaryratios. Moody’s will eliminate that debt from the debt ratios after a few years of demonstrated self supporting revenues. Based on previous Moody’s reports, the City has the capacity to absorb the increased debt ratios so long as there is not a de-terioration of the City’s tax base or weakening of the demographic profi le and the City does not ex-perience a material decline in fi nancial reserves in comparison to similar rated cities. 4. The City should adopt a formal fund balance poli-cy. This policy will provide guidance for fi nancial management and will inform future decisions on adjustments to utility fees and charges. The re-port is based on direction from City staff to plan for achieving a cash balance at 50 percent of antici-pated annual operating expenditures.Organization of ReportThe report is organized into fi ve sections:1. Executive Summary provides information on the organization of the report, study approach, using the report, and conclusions and recommendations.2. Background discusses the historical context (i.e., growth and development of the community) and fi nancial status of the City’s utility funds.3. Capital Improvement Plan provides information on the City’s plans for expanding the capacity of the water and sanitary sewer systems. This in-cludes estimates on project costs and sources of funds to pay for the improvements. The time hori-zon for the capital plan is years 2013 through 2017. The City anticipates capital spending after year 2018 but the specifi c projects and estimated costs have not yet been identifi ed. Information on debt service is included in the report for planned bond issuances.4. Utility Rates provided in the report include histori-cal, current, and future proposed rates necessary to maintain a positive fi nancial condition for the utili-ty funds. Information is provided in the Appendix of the report on what proposed rate increases will mean to customers. Comparison to other cities is included.5. Financial Plans are provided for the Water Fund, Sanitary Sewer Fund, and Storm Sewer Fund. The fi nancial plans provide both historical, current, and future projected sources and uses of funds. Financial plans take into account capital improve-ment plans and rate structure. (The capital im-provements plans included in the report are for years 2013-2017; the City anticipates future capital projects after year 2017 but has not yet identifi ed the specifi c projects or cost estimates.)6. Appendix provides charts of data from the fi nan-cial plans and information on projected growth in residential and commercial customers.Using the ReportThis report is intended to be a practical guide for on-going management of the City’s utility funds. Much of the information in the report has enduring value and will serve to continue to guide management deci-sions over a number of years. However, management of enterprise funds is a dynamic system. Customer base changes, statutes and rules change, cost of labor and materials and supplies will vary from assump-tions from year-to-year. The report should continue to be the foundation of an annual review an update.
4BackgroundBACKGROUNDThe City of Lake Elmo is located on the eastern edge of the Twin Cities metropolitan area. The City’s 2030 Comprehensive Plan forecasts and provides for ap-proximately eight times the growth in households and population during the 2000-2030 planning period than was experienced during the 1980-2000 period. The City reports an estimated 2010 population of 8,069 and 2,774 households (2010 Census). Population is es-timated to increase to 18,403 by 2020 and households to 6,324 (2030 Comprehensive Plan). The land area for the City encompasses approximately 15,250 acres. The City’s 2030 Comprehensive Plan provides guid-ance on the City’s plans for managing future demand for utility infrastructure. The City’s 2011 fi nancial statements were used as the basis for the report, along with the 2012 budget. The 2012 fi nancial statements were not available for input for the report.Water UtilityLake Elmo owns, operates and maintains a municipal water supply and distribution system. The City has a goal to serve existing population desiring public water supply while preparing the system to allow people to connect as development occurs or existing areas re-quest service. This policy guides the City’s capital im-provement planning and the need to maintain a fl ex-ible and responsive water system. Capital planning includes projects to correct existing defi ciencies and to expand the system. The City uses an enterprise fund to account for its wa-ter operations. The unrestricted assets in the Water Fund totaled $1,072,022 and a cash balance of $752,658 at December 31, 2011. There were no signifi cant trans-actions to report for the year ended December 31, 2011. (The 2012 fi nancial statements are not yet available to include in this report.) Sanitary Sewer UtilityProperty owners in the City are served by individual sewer systems or in limited areas by municipal sewer. Capital plans will provide for an increase in the number of properties to be served by municipal sewer and connection to the Regional Sewer System. The Metropolitan Council Environmental Services (MCES) plans to extend regional sewer service to serve a greater area of the City.The City uses an enterprise fund to account for its sewer operations. The unrestricted assets in the Sewer Fund totaled $62,994 and a cash balance of $27,062 at December 31, 2011. There were no signifi cant transac-tions to report for the year ended December 31, 2011.Storm Sewer UtilityThe City operates a storm sewer utility. The system of conveyances is owned and operated by the City and designed for collecting or conveying storm water, and that is not used for collecting or conveying sewer. The City collects an annual fee from property owners that is used to pay for the cost of constructing and main-taining the system.
5Capital Improvement Plan and Debt ServiceCAPITAL IMPROVEMENT PLAN AND DEBT SERVICEThe City has developed a multi-year (2013-2017) capi-tal project plan for its utilities. The Capital Improve-ment Plan (CIP) provides details on project costs by year and proposed funding sources. Identifi ed fund-ing sources include the planned issuance of debt.The City anticipates additional capital project spend-ing after year 2017 but the specifi c projects and cost estimates have not been identifi ed and are therefore not included in the report.The CIP provides important input for the fi nancial plans included in the report. The fi nancial plans are inclusive of all sources and uses of funds, both oper-ating and non-operating, including capital spending plans. At this time the City does not anticipate any capital improvements for the storm sewer utility in the next fi ve years. A CIP summary is therefore not included in the report for storm sewer projects.Capital ProjectsThe projects included in the CIP include projects to ex-pand the capacity and correct defi ciencies of the water and sanitary sewer systems. The City of Lake Elmo is a developing community with signifi cant utility ex-pansion needs.Projects include expansion of the City’s water sup-ply capacity and distribution system. Sanitary sewer services will be expanded through the construction of connections to the Regional Sewer System.As a developing community, the City’s capital im-provement plans focus on expansion and does not presently include capital spending for maintenance of existing systems. This will need future consideration by the City as the community develops and infrastruc-ture ages and requires major maintenance and/or re-placement.Source of Funding for Capital ProjectsThe source of funding for the planned capital projects includes either one of the following sources or a com-bination thereof: cash balance from Water Fund and Sewer Fund; bond proceeds; levying of special assess-ments; grants, tax increment revenue collections, and intergovernmental revenue.To the extent future development expectations exceed or fall short of the City’s projections, the City may want to adjust the amount of water project costs to be paid for with bond proceeds versus cash. Debt ServiceThe current CIP for water and sanitary sewer utilities anticipates the use of bonds to undertake needed im-provements while keeping fees as low as possible. The projections assume that the City will issue gen-eral obligation bonds and use utility revenues to pay all principal and interest. This approach provides the lowest cost of debt. The bonds will not count against the City’s debt limit. Debt management is an impor-tant factor in the City’s ongoing capital improvements planning.The City has the authority to issue pure revenue bonds for these improvements. With general obligation bonds, the City pledges to levy property taxes to cover any shortfall in utility revenues. Revenue bonds are
6Capital Improvement Plan and Debt Servicebacked solely by utility revenues. The alternative use of revenue bonds without a general obligation pledge would have several fi nancial implications for the City:• Interest rates will be higher. The diff erence will depend on the terms of the issue and the operation of the Utility. • The City will be required to set fees that will cre-ate revenues that produce net income in excess of debt service. Any scenarios with ongoing annual defi cits would not be viable.• The bond issue would include a debt service re-serve fund. A portion of the bond proceeds would be set aside to make payments in the event of rev-enue shortfalls.As a result, higher fees will be required with the use of revenue bonds to fi nance planned improvements.The fi nance plans and related fee schedules included in the report anticipate the issuance of general obligation (G.O.) revenue bonds to fi nance certain capital improvements. The estimates for debt service are based on bonds to be paid generally over 20 years or less. The estimated interest rates used to calculate annual debt service were conservatively estimated based on today’s current rate environment (today’s rates for a Aa2 rating plus 25 basis points for anticipated 2013 bonding and 50 basis points for later years). The actual interest rates will depend on fi nal structure and market conditions at time of issuance.Beginning on page 9, a summary of estimated annual debt service is provided for years 2012 to 2021 which is the planning horizon for the fi nancial plans. On pages 10 and 11, detail on the annual estimated debt service for future water and sanitary sewer bond issuances is shown. The chart on page 12 provides a longer term view of projected annual debt service for years 2012 through 2035, or over the life of the City’s existing bonds and the life of future estimated bond issuances included in the report.The timing of principal payments shown in the re-port is structured to match estimated future revenue. Based on the debt structure and assumptions for the study and report, by year 2021 the City will have com-bined cash balance in the water and sewer funds that is nearly equivalent to 90% of the estimated outstanding debt obligations. Actual future growth (development) will greatly impact these estimates. The City will have options at time of bond issuance to consider debt re-payment schedules that are more aggressive than what is included in this report, if future revenue and cash balances suggest a more aggressive schedule is fea-sible. The City will have the option to structure bond call dates that will provide the City with the greatest amount of fl exibility to manage its debt. These deci-sions can be made on an issuance by issuance basis in the future.
7Capital Improvement Plan and Debt Service2013 2014 2015 2016 2017 2018 2019 2020 2021 TotalWater supply well No. 4 and pumphouse /connection 1,500,000 1,500,000 Keats Ave 16" trunk watermain extension 1,050,000 1,050,000 Phase I: Western I94 Corridor (Inwood to Keats)- Segment 1: Water booster pump 610,000 610,000 Segment 2: Inwood Ave 16" trunk watermain extension 1,600,000 1,600,000 Segment 3: 10th St to EP Bus Park 16" trunk watermain ext 780,000 780,000 Alt Segment 3: Azur Prop 16" trunk watermain extension- Alt Segment 5: 12" trunk watermain to non-contiguous East 400,000 400,000 Alt Segment 7: Ground storage tank600,000 600,000 Phase II: Eastern I94 Corridor (Lake Elmo Ave. to Manning)- Segment 4: Lake Elmo Ave 12" trunk watermain extension 2,775,000 2,775,000 Phase IIIb: Village Area (East to Village Parkway)- Replace/upgrade watermains as streets disturbed 900,000 900,000 Village Parkway/39th Street400,000 600,000 1,000,000 Total5,540,000 400,000 1,500,000 3,175,000 600,000 - - - - 11,215,000 Funding Source for Water Capital ProjectsChf W F d1 500 000925 000250 0002 675 000City of Lake ElmoSummary of Capital Improvement Plan (CIP)City has not identified but does anticipate there will be future projects in years 2018-2021.Water FundCash from Water Fund- 1,500,000 925,000 250,000 2,675,000 Bond proceeds 3,540,000 2,000,000 5,540,000 Grants1,000,000 1,000,000 Intergovernmental 1,000,000 1,000,000 Tax Increment /Developer Contribution 400,000 250,000 350,000 1,000,000 Total5,540,000 400,000 1,500,000 3,175,000 600,000 - - - - 11,215,000
8Capital Improvement Plan and Debt Service2013 2014 2015 2016 2017 2018 2019 2020 2021 TotalSegment 4: New lift station at Hudson & Keats, Connecting FM - 900,000 - - - - - - - 900,000 Segment 6: Hudson Blvd lift station replacement, connecting FM to WONE - - - - 300,000 - - - 300,000 Phase II: Easter I94 Corridor (Lake Elmo Ave. to Manning) - - - - - - - - - - Option A: 27/30" trunk sewer extension from MCES connectoin- Option B: 18/27" trunk sewer extension from MCES connection 700,000 500,000 1,200,000 Option B: Future lift statoin west of Lake Elmo Ave. 200,000 200,000 Phase IIIb: Village Area (East to Village Parkway)- Village lift station and forcemain 3,800,000 3,800,000 Segment 1: Lake Elmo Ave & 30th St & 39th St 1,100,000 1,100,000 Segment 2: Village Parkway to TH5600,000 600,000 1,200,000 Total4,500,000 1,600,000 1,100,000 600,000 600,000 300,000 - - - 8,700,000 Funding Source for Sanitary Sewer Capital ProjectsCash from Sewer Fund300,000 300,000 Bond proceeds 3,500,000 1,200,000 1,100,000 5,800,000 Grants1,000,000 - - - - - - - - 1,000,000 Intergovernmental- - - 180,000 180,000 - - - - 360,000 TI /D l C ibi(f TIFdii dd l )400 000420 000420 0001 240 000City of Lake ElmoSummary of Capital Improvement Plan (CIP)Sanitary Sewer FundCity has not identified but does anticipate there will be future projects in years 2018-2021.Tax Increment/Developer Contribution (future TIF districts and development)- 400,000 - 420,000 420,000 - - - - 1,240,000 Total4,500,000 1,600,000 1,100,000 600,000 600,000 300,000 - - - 8,700,000
9Capital Improvement Plan and Debt Service2013 2014 2015 2016 2017 2018 2019 2020 2021Years 2022 to 2035TotalDEBT SERVICECity of Lake ElmoWater, Sanitary Sewer, Storm Sewer FundsSummary of Future Debt Service and General Obligation (G.O.) Revenue Bonds OutstandingDEBT SERVICEWATER UTILITY FUNDGO Water Rev Bond 2005A 300,025 320,650 315,250 - - - - - - - 935,925 GO Ref Bond 2009A (Refund 2002B) 53,680 52,480 51,280 49,880 53,680 52,128 55,575 53,850 51,925 - 474,478 GO Ref Bond 2012A (Refund 2005A) - - - 281,043 272,143 293,343 284,043 279,843 270,643 3,139,756 4,820,814 EST GO Water Rev 2013 Bonds 95,958 125,958 125,778 125,568 125,313 124,998 164,623 163,573 167,383 4,121,230 5,340,378 EST GO W t R 2016 B d41 250341 250337 350232 850229 350225 450931 1002 338 600EST GO Water Rev 2016 Bonds41,250 341,250 337,350 232,850 229,350 225,450 931,100 2,338,600 Total 449,663 499,088 492,308 497,741 792,386 807,818 737,091 726,616 715,401 8,192,086 13,910,194 SANITARY SEWER UTILITY FUNDEST GO Sewer Rev 2013 Bonds 86,285 186,285 185,685 184,985 184,135 183,085 181,835 180,335 228,635 3,434,280 5,035,545 EST GO Sewer Rev 2014 Bonds - 25,625 75,625 75,150 74,600 73,950 123,200 121,450 119,500 759,775 1,448,875 EST GO Sewer Rev 2015 Bonds - - 74,950 74,475 73,925 73,275 72,525 121,650 119,700 765,975 1,376,475 Tl86 285211 910336 260334 610332 660330 310377 560423 435467 8354 960 0307 860 895Total 86,285 211,910 336,260 334,610 332,660 330,310 377,560 423,435 467,835 4,960,030 7,860,895 STORM SEWER UTILITY FUNDNo existing or anticipated oustanding debtTOTAL ANNUAL COMBINED DEBT SERVICECombined Total 535,948 710,998 828,568 832,351 1,125,046 1,138,128 1,114,651 1,150,051 1,183,236 13,152,116 21,771,089 DEBT OUTSTANDINGWATER OUTSTANDING DEBTAs of 12/31/2012 4,695,000 4,505,000 4,315,000 4,080,000 3,845,000 3,585,000 3,325,000 3,065,000 2,810,000 - 0Estimated Future Debt 3,630,000 3,600,000 3,570,000 5,600,000 5,270,000 4,940,000 4,670,000 4,400,000 4,125,000 - 0Total 8,325,000 8,105,000 7,885,000 9,680,000 9,115,000 8,525,000 7,995,000 7,465,000 6,935,000 -0SANITARY SEWER OUTSTANDING DEBTAs of 12/31/2012000000000- 0Estimated Future Debt 3,605,000 4,755,000 5,705,000 5,505,000 5,305,000 5,105,000 4,855,000 4,555,000 4,205,000 - 0Total 3,605,000 4,755,000 5,705,000 5,505,000 5,305,000 5,105,000 4,855,000 4,555,000 4,205,000 - 0STORM SEWER UTILITY FUNDNo existing or anticipated oustanding debtTOTAL DEBT OUTSTANDINGCombined Total 11,930,000 12,860,000 13,590,000 15,185,000 14,420,000 13,630,000 12,850,000 12,020,000 11,140,000 - 0Notes:EST (estimated) amounts are shown for bonds with dates after 2012. Estimates are based on the capital improvement plan included in the report.Annual debt service figures are preliminary. Actual structure may vary depending on financial management decisions made by the City. Interest rates and terms will vary. Detail on estimated interest rates and terms are provided on pages 10 and 11.
10Capital Improvement Plan and Debt ServiceYear PrincipalEst Interest Rates InterestTotal Debt ServiceOutstanding Balance Year PrincipalEst Interest Rates InterestTotal Debt ServiceOutstanding BalanceBeg$3,630,000Beg$2,060,0002013 1 $0 0.55% $95,958 $95,958 $3,630,000 2013 $0 0.80% $02014 2 $30,000 0.60% $95,958 $125,958 $3,600,000 2014 $0 0.85% $02015 3 $30,000 0.70% $95,778 $125,778 $3,570,000 2015 $0 0.95% $02016 4 $30,000 0.85% $95,568 $125,568 $3,540,000 2016 1 $0 1.10% $41,250 $41,250 $2,060,0002017 5 $30,000 1.05% $95,313 $125,313 $3,510,000 2017 2 $300,000 1.30% $41,250 $341,250 $1,760,0002018 6 $30,000 1.25% $94,998 $124,998 $3,480,000 2018 3 $300,000 1.50% $37,350 $337,350 $1,460,0002019 7 $70,000 1.50% $94,623 $164,623 $3,410,000 2019 4 $200,000 1.75% $32,850 $232,850 $1,260,0002020 8 $70,000 1.70% $93,573 $163,573 $3,340,000 2020 5 $200,000 1.95% $29,350 $229,350 $1,060,0002021 9 $75,000 1.85% $92,383 $167,383 $3,265,000 2021 6 $200,000 2.10% $25,450 $225,450 $860,0002022 10 $150,000 2.00% $90,995 $240,995 $3,115,000 2022 7 $200,000 2.25% $21,250 $221,250 $660,0002023 11 $150,000 2.10% $87,995 $237,995 $2,965,000 2023 8 $200,000 2.35% $16,750 $216,750 $460,0002024 12 $150,000 2.20% $84,845 $234,845 $2,815,000 2024 9 $100,000 2.45% $12,050 $112,050 $360,0002025 13 $150,000 2.30% $81,545 $231,545 $2,665,000 2025 10 $100,000 2.55% $9,600 $109,600 $260,0002026 14 $150,000 2.40% $78,095 $228,095 $2,515,000 2026 11 $100,000 2.65% $7,050 $107,050 $160,0002027 15 $150,000 2.50% $74,495 $224,495 $2,365,000 2027 12 $160,000 2.75% $4,400 $164,400 $02028 16 $200,000 2.60% $70,745 $270,745 $2,165,000 2028 13 2.85% $0 $0 $02029 17 $200,000 2.70% $65,545 $265,545 $1,965,000 2029 14 2.95% $0 $0 $02030 18 $200,000 2.80% $60,145 $260,145 $1,765,000 2030 15 3.05% $0 $0 $02031 19 $375,000 2.90% $54,545 $429,545 $1,390,000 2031 16 3.15% $0 $0 $02032 20 $375,000 3.00% $43,670 $418,670 $1,015,000 2032 17 3.25% $0 $0 $02033 21 $375,000 3.10% $32,420 $407,420 $640,000 2033 18 3.35% $0 $0 $02034 22 $325,000 3.20% $20,795 $345,795 $315,000 2034 19 3.45% $0 $0 $02035 23 $315,000 3.30% $10,395 $325,395 $0 2035 20 3.55% $0 $0 $0Total $3,630,000 $1,710,378 $5,340,378 Total $2,060,000 $278,600 $2,338,600Application of Funds:Application of Funds:Construction $3,540,000 Construction $2,000,000Other Costs/Rounding $90,000 Other Costs/Rounding $60,000Total $3,630,000 Total $2,060,0002013 G.O. Water Revenue Bonds 2016 G.O. Water Revenue BondsCity of Lake ElmoEstimated Future G.O. Water Revenue BondsAnalysis of Possible Future Estimated Debt Service Based on Capital Improvement Plan (CIP)(Terms shown including maturites and rates are for preliminary planning purposes only)
11Capital Improvement Plan and Debt ServiceYEARYear PrincipalEst Interest Rates InterestTotal Debt ServiceOutstanding Balance Year PrincipalEst Interest Rates InterestTotal Debt ServiceOutstanding Balance PrincipalEst Interest Rates InterestTotal Debt ServiceOutstanding BalanceBeg$3,605,000Beg$1,250,000Beg$1,150,0002013 1 $0 0.55% $86,285 $86,285 $3,605,000 2013 $0 0.80% $0 2013 $0 0.80% $02014 2 $100,000 0.60% $86,285 $186,285 $3,505,000 2014 1 $0 0.85% $25,625 $25,625 $1,250,000 2014 $0 0.85% $02015 3 $100,000 0.70% $85,685 $185,685 $3,405,000 2015 2 $50,000 0.95% $25,625 $75,625 $1,200,000 2015 1 $50,000 0.95% $24,950 $74,950 $1,100,0002016 4 $100,000 0.85% $84,985 $184,985 $3,305,000 2016 3 $50,000 1.10% $25,150 $75,150 $1,150,000 2016 2 $50,000 1.10% $24,475 $74,475 $1,050,0002017 5 $100,000 1.05% $84,135 $184,135 $3,205,000 2017 4 $50,000 1.30% $24,600 $74,600 $1,100,000 2017 3 $50,000 1.30% $23,925 $73,925 $1,000,0002018 6 $100,000 1.25% $83,085 $183,085 $3,105,000 2018 5 $50,000 1.50% $23,950 $73,950 $1,050,000 2018 4 $50,000 1.50% $23,275 $73,275 $950,0002019 7 $100,000 1.50% $81,835 $181,835 $3,005,000 2019 6 $100,000 1.75% $23,200 $123,200 $950,000 2019 5 $50,000 1.75% $22,525 $72,525 $900,0002020 8 $100,000 1.70% $80,335 $180,335 $2,905,000 2020 7 $100,000 1.95% $21,450 $121,450 $850,000 2020 6 $100,000 1.95% $21,650 $121,650 $800,0002021 9 $150,000 1.85% $78,635 $228,635 $2,755,000 2021 8 $100,000 2.10% $19,500 $119,500 $750,000 2021 7 $100,000 2.10% $19,700 $119,700 $700,0002022 10 $100,000 2.00% $75,860 $175,860 $2,655,000 2022 9 $100,000 2.25% $17,400 $117,400 $650,000 2022 8 $100,000 2.25% $17,600 $117,600 $600,0002023 11 $100,000 2.10% $73,860 $173,860 $2,555,000 2023 10 $100,000 2.35% $15,150 $115,150 $550,000 2023 9 $100,000 2.35% $15,350 $115,350 $500,0002024 12 $100,000 2.20% $71,760 $171,760 $2,455,000 2024 11 $150,000 2.45% $12,800 $162,800 $400,000 2024 10 $100,000 2.45% $13,000 $113,000 $400,0002025 13 $100,000 2.30% $69,560 $169,560 $2,355,000 2025 12 $150,000 2.55% $9,125 $159,125 $250,000 2025 11 $150,000 2.55% $10,550 $160,550 $250,0002026 14 $100,000 2.40% $67,260 $167,260 $2,255,000 2026 13 $200,000 2.65% $5,300 $205,300 $50,000 2026 12 $150,000 2.65% $6,725 $156,725 $100,0002027 15 $250,000 2.50% $64,860 $314,860 $2,005,000 2027 14 2.75% $0 $0 $50,000 2027 13 $100,000 2.75% $2,750 $102,750 $02028 16 $250,000 2.60% $58,610 $308,610 $1,755,000 2028 15 2.85% $0 $0 $50,000 2028 14 2.85% $0 $0 $02029 17 $250,000 2.70% $52,110 $302,110 $1,505,000 2029 16 2.95% $0 $0 $50,000 2029 15 2.95% $0 $0 $02030 18 $250,000 2.80% $45,360 $295,360 $1,255,000 2030 17 3.05% $0 $0 $50,000 2030 16 3.05% $0 $0 $02031 19 $300,000 2.90% $38,360 $338,360 $955,000 2031 18 3.15% $0 $0 $50,000 2031 17 3.15% $0 $0 $02032 20 $300,000 3.00% $29,660 $329,660 $655,000 2032 19 3.25% $0 $0 $50,000 2032 18 3.25% $0 $0 $02033 21 $300,000 3.10% $20,660 $320,660 $355,000 2033 20 3.35% $0 $0 $50,000 2033 19 3.35% $0 $0 $02034 22 $355,000 3.20% $11,360 $366,360 $0 2034 21 3.45% $0 $0 $50,000 2034 20 3.45% $0 $0 $0Total $3,605,000 $1,430,545 $5,035,545 Total $1,200,000 $248,875 $1,448,875 Total $1,150,000 $226,475 $1,376,475Application of Funds:Application of Funds:Application of Funds:Construction $3,500,000 Construction $1,200,000 Construction $1,100,000Other Costs/Rounding $105,000 Other Costs/Rounding $50,000 Other Costs/Rounding $50,000Total $3,605,000 Total $1,250,000 Total $1,150,000(Terms shown including maturites and rates are for preliminary planning purposes only)Projected Future 2013 G.O. Sewer Revenue Bonds Projected Future 2014 G.O. Sewer Revenue Bonds Projected Future 2015 G.O. Sewer Revenue BondsCity of Lake ElmoEstimated Future G.O. Sewer Revenue BondsAnalysis of Possible Future Estimated Debt Service Based on Capital Improvement Plan (CIP)
12Capital Improvement Plan and Debt ServiceThe annual estimated debt service amounts shown in this chart include general obligation water revenue bonds and general obliga-tion sewer revenue bonds. The annual amounts in-clude both existing debt service (on outstanding bonds) and future estimat-ed debt service on bonds anticipated to be issued in future years and paid from utility revenues. Future bond issuance estimates are based on the City’s capital improvement plan.This chart includes general obligation debt supported by utility revenue only and does not include existing or future estimated general obligation debt that is paid from property tax levy.$0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 201220132014201520162017201820192020202120222023202420252026202720282029203020312032203320342035City of Lake ElmoAnnual Estimated Debt Service Based on Future Bonding Plans in CIP and Estimated Structure and Future Rates (Includes Debt Supported by Water and Sewer Revenue Only)
13Capital Improvement Plan and Debt Service-2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 16,000,000 201320142015201620172018201920202021City of Lake ElmoEst. Combined Outstanding G.O. (Water and Sewer) Current and New Revenue Bonds Compared to Estimated Future Combined Cash Balances for Water and Sewer FundsTotal Est Outstanding Debt (Current and New)Est Cash BalanceOver the next four years (from 2013 to 2016) the out-standing general obligation debt supported by water and sewer revenues is pro-jected to increase each year. The City anticipates the is-suance of debt to support planned infrastructure ex-pansion projects. During this same period, based on assumptions and informa-tion included in the study, the estimated annual cash balance for the water and sewer funds combined is estimated to increase each year. This is driven by the estimate that annual reve-nue from new development will exceed the growth in annual expense (including debt service expense). Current fi nancial plan esti-mates project that by year 2021 the City will have combined cash balance in the water and sewer funds that is nearly equivalent to 90% of the estimated out-standing debt obligations. Actual future growth (de-velopment) will greatly im-pact these estimates.
14Utility RatesUTILITY RATESKey FactorsTo project future utility rates necessary to maintain the fi nancial stability of the City’s utility operations re-quires development and analysis of the following key factors:• Estimates for future annual operating expendi-tures, including personnel, materials and supplies, cost of electricity, and other operating expenses.• Metropolitan Council Environmental Service (MCES) sewer fee charged to the City by the Met-ropolitan Council for regional collection and treat-ment of waste water. This is an operating expense that the City does not have direct control over.• Annual capital expenditure to maintain and im-prove the existing systems.• Annual debt service on bonds issued to fi nance capital improvements.• Growth in customers using and paying for the systems. Future growth will provide additional revenue but will also create additional demand for services.• Available other revenue sources other than fees and charges to users of the water and sanitary sewer services.Annual Operating ExpendituresCosts incurred in operating the water and sewer systems, which are used up in the period in which acquired, are recorded as operating expenditures. Annual growth in operating expenditures, not including the MCES charge, has been modest. It is anticipated that growth in future years will be about 2 percent per year. Approximately a third of the operating expense (not including depreciation) is for personnel costs (labor) and the balance for materials, supplies, and other operating expense.Depreciation is shown under operating expenditures and is the process of allocating the costs of an asset over its useful life in a systematic and rational manner. Depreciation is shown to remain constant over the fi -nancial planning horizon for the study. Estimate for future depreciation was not part of the study. It will be important for future updates to the fi nancial plans to consider funding of depreciation and replacement of infrastructure.Metropolitan Council Environmental Services (MCES)The MCES charge to cities for regional collection and treatment has been volatile in recent years. MCES has experienced revenue loss from the signifi cant drop in regional development which has caused a corre-sponding decline in revenue collected by the Council for Sewer Availability Charges (a one time fee for new connections). For projection purposes, the study as-sumes that future charges paid to MCES for collection and treatment will increase by 2 percent annually. This is shown as an annual operating expense to the City’s Sewer Fund which is paid from revenue collected from the City’s utility customers.
15Utility RatesAnnual Capital ExpendituresThe City anticipates paying for future capital improve-ment project costs with a combination of revenue sources. The City anticipates future development will provide revenue to pay for utility expansion through the collection of trunk line availability fees and connec-tion fees. The City may reduce the amount of planned bonding to pay for capital improvements to the extent cash from collection of these charges is available in the utility funds to do so.Paying for annual planned capital improvement proj-ects with cash may be a sound strategy depending on the details of the project. It avoids incurring costs of issuance and annual interest expense. However, this strategy requires advance planning and implementa-tion of utility fees and charges that provide adequate cash fl ow.For large (non-routine) capital expenditures or unan-ticipated capital expenditures, the use of bonding to fund capital minimizes annual rate increases that oth-erwise would be necessary. It also allows the City to charge future customers the cost of infrastructure with a longer useful life, versus putt ing the entire burden on today’s customers. The City’s CIP does anticipate bonding for certain project costs. The resulting annual debt service on the bonds is included in the fi nancial plans.Debt ServiceDebt service in the Water and Sanitary Sewer Funds is paid from revenue collected from utility fees and availability and connection charges. Presently the City has debt outstanding in the Water Fund but does not report debt outstanding in the Sanitary Sewer or Storm Water Funds. The CIP anticipates the City will issue debt in the next fi ve years that will be supported by revenue collected in the Water Fund and Sanitary Sewer Fund.All current and future debt is accounted for in the fi -nancial plans that are included in this report. The es-timated debt service is based on generally 20 years or less for bonds payable at estimated interest rates. Fu-ture estimated utility fees and charges refl ect the cost of the estimated increase for debt service.Growth in CustomersGrowth in customers from future land development is a major factor in determining the projections for future utility rates. New development will bring an increase in revenue to the City’s utility funds through the col-lection of availability and connection charges and fees collected for service. Availability charges and con-nection charges are one time charges collected at the time of development and building permit. Estimat-ing the increase in future customers from growth in residential and commercial development is the most volatile factor in developing fi nancial projections for the utility funds. The last page of the report, page 35, in the Appendix Section, includes information on the assumed growth in residential equivalent connections (“REC”) from future development. The projected an-nual growth in REC’s was established by City staff and provided to Northland for the study and report. Growth in customers will allow the City to spread ex-isting fi xed costs, including overhead, over more units and volume. Growth in customers will allow the City to minimize future increases in utility fees that other-wise will be necessary.
16Utility RatesAvailable Other RevenuesThere is limited other revenues that provide a source of funding for utility services. The majority of the cost to operate and maintain the system is paid from fees and charges collected from those using the system. Other revenue includes interest income on cash bal-ances, special assessments, grants, and rents.Historical Utility RatesInformation on historical rates is provided on page 18. This includes a summary of prior years approved util-ity rates for years 2007 - 2012. Rates shown are billed quarterly, with the exception of the storm water fee which is billed to customers receiving this charge on an annual basis. The City charges a basic service fee for water only.Future Utility RatesInformation on future projected utility rates for years 2013 to 2021 is provided on page 19. The projected future rates refl ect the rates necessary to maintain ad-equate cash balances in the utility funds. These rates (applied against the estimated volumes on page 19) were used to calculate the annual estimated operating revenue that is shown in the fi nancial plans for each fund.The tier structure the City uses for charging custom-ers for water, based on volume of water sold, was not reviewed as part of this study and report.Connection and Trunk Line Availability ChargesWater and Sewer connection charges are estimated to be collected at time of building permit. The charges are to cover the cost of constructing and maintaining the utility systems.The City presently does not have a connection charge for sanitary sewer. A charge is included for future years beginning with a rate of $1,000 in year 2013 and infl ated annually at 3-percent; this rate is necessary to maintain suffi cient revenue to pay for debt service on capital projects. This is refl ected in the revenue shown in the fi nancial plans for the Sanitary Sewer Fund.In addition, the report and fi nancial plans are based on the City increasing the amount it charges for connec-tion to municipal water to a level needed to fund infra-structure expansion. The amount is shown at $1,000 for year 2013, which is an increase from the $140 pres-ently charged. This amount is shown to increase an-nually by 3-percent.Water and Sewer Trunk Line Availability Charges are estimated to be collected at time of development of property (with the development contract). The charge is necessary to pay for the cost of constructing and maintaing the trunk lines and related infrastructure of the systems.Beginning with year 2013, the following is estimated for develpoment related charges for one residential equivalent connection (REC) unit:City Sanitary Sewer Connection $1,000City Water Connecction $1,000City Sanitary Sewer Trunk Line Availability $3,000City Water Trunk Line Availability $3,000Met Council Sewer Availability Charge $2,435 Total $10,435Projected Volume of Water Sold and Sanitary Sewer BilledAnnual estimated volume of water sold by tier and es-timated sanitary sewer billed by year is included on
17Utility Ratespage 20. The chart on page 21 provides a break-down of the increase in volume of water sold comparing the estimated amount sold by year to existing custom-ers, which is based on 2011 volumes, to the estimated amount that is att ributed to growth in the customer base from future projected development. Information on the projected increase in residential equivalent con-nections (REC) by year is provided on page 35, the last page of the report.
18Utility Rates12007 2008 2009 2010 2011 2012 BudgetWATER AND SEWER SERVICEResidentialWater Basic Service fee (per meter or per unit/qtr) $23.50 $23.75 $25.00 $25.00 $25.00 $25.00Sewer Basic Service fee (per meter or per unit/qtr) $0.00 $0.00 $0.00 $0.00 $0.00 $0.00Water (per meter or per unit per 1,000 gallons):Tier 1: Water usage per first 15,000 gallons $1.80 $2.05 $2.15 $2.10 $2.14 $2.14Tier 2: Water usage +15,000 gallons to 30,000 gallons $1.80 $2.05 $2.15 $2.80 $2.86 $2.86Tier 3: Water usage +30,000 gallons to 50,000 gallons $1.80 $2.05 $2.15 $3.70 $3.77 $3.77Tier 4: Water usage +50,000 gallons to 80,000 gallons $1.80 $2.05 $2.15 $4.90 $5.00 $5.00Tier 5: Water usage +80,000 gallons $1.80 $2.05 $2.15 $6.50 $6.63 $6.63Sewer (per 1,000 gallons) $2.75 $3.71 $4.08 $4.35 $4.50 $4.50Commercial and IndustrialWater Basic Service fee (per meter or per unit/qtr) $23.50 $23.75 $25.00 $25.00 $25.00 $25.00Sewer Basic Service fee (per meter or per unit/qtr) $0.00 $0.00 $0.00 $0.00 $0.00 $0.00Water (per meter or per unit per 1,000 gallons):Tier 1: Water usage per first 10,000 gallons $2.75 $3.00 $3.10 $3.05 $3.11 $3.11Tier 2: Water usage +10,000 gallons to 25,000 gallons $2.75 $3.00 $3.10 $3.20 $3.26 $3.26Tier 3: Water usage +25,000 gallons $2.75 $3.00 $3.10 $3.70 $3.77 $3.77Tier 4: Water usage +29,000 gallons to next Tier $2.75 $3.00 $3.10 $4.90 $5.00 $5.00Tier 5: Water usage +36,000 gallons to next Tier $2.75 $3.00 $3.10 $6.50 $6.63 $6.63Sewer (per 1,000 gallons) $2.75 $3.71 $4.08 $4.35 $4.50 $4.50SURFACE WATERResidential (flat fee charged annually) $30.00 $30.00 $35.00 $40.00 $50.00 $50.00Non-Residential (flat fee charged annually based on equivalent res. unit) $30.00 $30.00 $35.00 $40.00 $50.00 $50.00SEWER CONNECTION CHARGES (collected with permit)Single family, duplex, townhouse, mobile home (per unit) $0 $0 $0 $0 $0 $0Comm/industrial, churches, schools, hospitals, nursing homes (per unit) $0 $0 $0 $0 $0 $0WATER CONNECTION CHARGES (collected with permit)Meter$275 $275 $285 $300 $300 $300Single family, duplex, townhouse, mobile home (per unit) $140 $175 $130 $140 $140 $140Comm/industrial, churches, schools, hospitals, nursing homes (per unit) $140 $175 $130 $140 $140 $140TRUNK LINE AVAILABILITY CHARGES (collected at time of development)Sewer availability charge per unit $3,500 $3,500 $3,500 $3,300 $3,500 $3,500MCES connection charge (per unit) $2,150 $2,150 $2,150 $2,150 $2,230 $2,230Water availability charge for new development per unit $3,675 $3,675 $3,675 $3,900 $3,900 $3,900Water availability charge for existing structures within Old Village $800 $800 $800 $800 $800 $800City of Lake ElmoFee Schedule for Prior Years
19Utility Rates23456789102013 2014 2015 2016 2017 2018 2019 2020 2021WATER AND SEWER SERVICEResidentialWater Basic Service fee (per meter or per unit/qtr) 3.0% $25.75 $26.52 $27.32 $28.14 $28.98 $29.85 $30.75 $31.67 $32.62Sewer Basic Service fee (per meter or per unit/qtr) 3.0% $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00Water (per meter or per unit per 1,000 gallons):Tier 1: Water usage per first 15,000 gallons 3.0% $2.20 $2.27 $2.34 $2.41 $2.48 $2.56 $2.63 $2.71 $2.79Tier 2: Water usage +15,000 gallons to 30,000 gallons 3.0% $2.95 $3.03 $3.13 $3.22 $3.32 $3.41 $3.52 $3.62 $3.73Tier 3: Water usage +30,000 gallons to 50,000 gallons 3.0% $3.88 $4.00 $4.12 $4.24 $4.37 $4.50 $4.64 $4.78 $4.92Tier 4: Water usage +50,000 gallons to 80,000 gallons 3.0% $5.15 $5.30 $5.46 $5.63 $5.80 $5.97 $6.15 $6.33 $6.52Tier 5: Water usage +80,000 gallons 3.0% $6.83 $7.03 $7.24 $7.46 $7.69 $7.92 $8.15 $8.40 $8.65Sewer (per 1,000 gallons) 3.0% $4.64 $4.77 $4.92 $5.06 $5.22 $5.37 $5.53 $5.70 $5.87Commercial and IndustrialWater Basic Service fee (per meter or per unit/qtr) 3.0% $25.75 $26.52 $27.32 $28.14 $28.98 $29.85 $30.75 $31.67 $32.62Sewer Basic Service fee (per meter or per unit/qtr) 3.0% $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00Water (per meter or per unit per 1,000 gallons):Tier 1: Water usage per first 10,000 gallons 3.0% $3.20 $3.30 $3.40 $3.50 $3.61 $3.71 $3.82 $3.94 $4.06Tier 2: Water usage +10,000 gallons to 25,000 gallons 3.0% $3.36 $3.46 $3.56 $3.67 $3.78 $3.89 $4.01 $4.13 $4.25Tier 3: Water usage +25,000 gallons 3.0% $3.88 $4.00 $4.12 $4.24 $4.37 $4.50 $4.64 $4.78 $4.92Tier 4: Water usage +29,000 gallons to next Tier 3.0% $5.15 $5.30 $5.46 $5.63 $5.80 $5.97 $6.15 $6.33 $6.52Tier 5: Water usage +36,000 gallons to next Tier 3.0% $6.83 $7.03 $7.24 $7.46 $7.69 $7.92 $8.15 $8.40 $8.65Sewer (per 1,000 gallons) 3.0% $4.64 $4.77 $4.92 $5.06 $5.22 $5.37 $5.53 $5.70 $5.87SURFACE WATERResidential (flat fee charged annually) 3.0% $51.50 $53.05 $54.64 $56.28 $57.96 $59.70 $61.49 $63.34 $65.24Non-Residential (flat fee charged annually based on equivalent res. unit) 3.0% $51.50 $53.05 $54.64 $56.28 $57.96 $59.70 $61.49 $63.34 $65.24SEWER CONNECTION CHARGES (collected with permit)Single family, duplex, townhouse, mobile home (per unit) 3.0% $1,000 $1,030 $1,061 $1,093 $1,126 $1,159 $1,194 $1,230 $1,267Comm/industrial, churches, schools, hospitals, nursing homes (per unit) 3.0% $1,000 $1,030 $1,061 $1,093 $1,126 $1,159 $1,194 $1,230 $1,267WATER CONNECTION CHARGES (collected with permit)Meter3.0% $309 $318 $328 $338 $348 $358 $369 $380 $391Single family, duplex, townhouse, mobile home (per unit) 3.0% $1,000 $1,030 $1,061 $1,093 $1,126 $1,159 $1,194 $1,230 $1,267Comm/industrial, churches, schools, hospitals, nursing homes (per unit) 3.0% $1,000 $1,030 $1,061 $1,093 $1,126 $1,159 $1,194 $1,230 $1,267TRUNK LINE AVAILABILITY CHARGES (collected at time of development)Sewer availability charge per unit 3.0% $3,000 $3,090 $3,183 $3,278 $3,377 $3,478 $3,582 $3,690 $3,800MCES connection charge (per unit) 2.0% $2,435 $2,484 $2,533 $2,584 $2,636 $2,688 $2,742 $2,797 $2,853Water availability charge for new development per unit 3.0% $3,000 $3,090 $3,183 $3,278 $3,377 $3,478 $3,582 $3,690 $3,800Water availability charge for existing structures within Old Village 3.0% $824 $849 $874 $900 $927 $955 $984 $1,013 $1,044City of Lake ElmoFee Schedule Estimated for Future YearsAnnual % Incr Beg Yr 2013
20Utility Rates123456789102011 2012 Budget 2013 2014 2015 2016 2017 2018 2019 2020 2021Volume figures below are annual amounts and shown in 1,000 of GallonsResidentialWater Basic Service fee (per meter or per unit/qtr) 874 874 881 910 948 1,012 1,058 1,109 1,260 1,311 1,369 Sewer Basic Service fee (per meter or per unit/qtr) 874 874 881 910 948 1,012 1,058 1,109 1,260 1,311 1,369 Water (per meter or per unit):Tier 1: Water usage per first 15,000 gallons 52,440 52,440 52,860 54,580 56,905 60,715 63,490 66,565 75,610 78,655 82,150 Tier 2: Water usage +15,000 gallons to 30,000 gallons 7,500 7,500 7,560 7,806 8,139 8,683 9,080 9,520 10,814 11,249 11,749 Tier 3: Water usage +30,000 gallons to 50,000 gallons 5,000 5,000 5,040 5,204 5,426 5,789 6,054 6,347 7,209 7,500 7,833 Tier 4: Water usage +50,000 gallons to 80,000 gallons 6,841 6,841 6,896 7,120 7,423 7,921 8,283 8,684 9,864 10,261 10,717 Tier 5: Water usage +80,000 gallons 15,500 15,500 15,624 16,133 16,820 17,946 18,766 19,675 22,348 23,249 24,282 Total Water Volume Sold 87,281 87,281 87,980 90,843 94,713 101,054 105,673 110,791 125,845 130,913 136,730 Sewer (per 1,000 gallons) 2,337 2,337 2,356 2,432 2,536 2,706 2,829 2,966 3,369 3,505 3,661 Commercial and IndustrialWater Basic Service fee (per meter or per unit/qtr) 109 109 109 109 112 114 120 124 132 135 143 Sewer Basic Service fee (per meter or per unit/qtr) 109 109 109 109 112 114 120 124 132 135 143 Water (per meter or per unit):Tier 1: Water usage per first 10,000 gallons 6,540 6,540 6,540 6,540 6,690 6,840 7,215 7,440 7,890 8,115 8,565 Tier 2: Water usage +10,000 gallons to 25,000 gallons 1,000 1,000 1,000 1,000 1,023 1,046 1,103 1,138 1,206 1,241 1,310 Tier 3: Water usage +25,000 gallons 1,000 1,000 1,000 1,000 1,023 1,046 1,103 1,138 1,206 1,241 1,310 Future Estimates for Financial PlansCity of Lake ElmoCustomer Equivalent Units, Volume of Water and Sanitary Sewer Service BilledggTier 4: Water usage +29,000 gallons to next Tier 3,000 3,000 3,000 3,000 3,069 3,138 3,310 3,413 3,619 3,722 3,929 Tier 5: Water usage +36,000 gallons to next Tier 19,416 19,416 19,416 19,416 19,861 20,307 21,420 22,088 23,424 24,092 25,428 Total Water Volume Sold 30,956 30,956 30,956 30,956 31,666 32,376 34,151 35,216 37,346 38,411 40,541 Sewer (per 1,000 gallons) 10,000 10,000 10,000 10,000 10,229 10,459 11,032 11,376 12,064 12,408 13,096 TOTAL ESTIMATED WATER BILLED (IN 1,000 OF GALLONS)118,237 118,237 118,936 121,799 126,379 133,430 139,824 146,007 163,191 169,324 177,271
21Utility Rates-20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000 20112012201320142015201620172018201920202021In Thousands of GallonsEstimated Total Gallons of Water SoldExisting Customers (as of 2011)New CustomersThe chart includes water sold to both commercial and residential property. The increase in volume of water sold to new custom-ers is based on the projected new connections (from new development) that is esti-mated to occur in the future years. The analysis assumes the volume sold to existing customers (2011 is the base year) remains constant.
22Financial PlansFINANCIAL PLANSBased on historical fi nancial performance, current util-ity rates and structure, and anticipated future capital projects, the following fi nancial plans (pro forma)have been prepared for the utility funds.Key AssumptionsThe fi nancial plans for each of the utility funds was developed based on several key assumptions which are as follows:• Operating expenditures, including personnel costs and materials supplies and all other operating ex-pense will increase by 2 percent per year.• No change in existing tier structure for fees and charges.• Depreciation is held constant in the fi nancial plans. Future depreciation expense will increase with the addition of infrastructure assets but for the pur-poses of this report the amount was held constant. Future updates to the fi nancial plans will need to consider funding of depreciation and replacement of infrastructure.• Current capital improvement plan will be imple-mented at estimated project costs and sources of funding. This includes an increase in future debt service for payment on bonds to be issued.• Utility fees for use of the system (i.e., volume of water) are shown to increase at the rate of 3 per-cent per year for years 2013 to 2021. The percent increase is across all elements of the City’s current rate structure, including the base and tier rates. Actual year to year activity (i.e., volume of water sold, operating expenditures, etc) and actual ex-penditure on capital projects will determine what actual rates will need to be set at in order to main-tain adequate cash in the utility funds.• Connection and availability charges are shown to increase at the rate of 3 percent per year. Revenue from these charges will be needed to pay for the expansion of the system and the planned capital projects and related debt service. • Water connection charge is increased from $140 in 2012 to $3,000 beginning in year 2013. The water connection charge is than adjusted annually at the rate of 3 percent.• Sewer connection charge is implemented begin-ning in year 2013. The City presently does not charge for sewer connection. Initially shown to be set at $3,000 than adjusted annually at the rate of 3 percent.• Metropolitan Council Environmental Services (MCES) connection charge is shown to increase by an estimated 2 percent per year. The actual annual amounts will be set by MCES.• The proposed future utility fees and charges are shown to increase at a level that is adequate to maintain a positive cash balance in the funds and to meet a goal of maintaining cash balance at 50 percent of operating expenditures.
23Financial Plans1 23 4 5678910Notes201020112012 Budget201320142015201620172018201920202021SOURCE OF FUNDS:Operating:Customer Billing RevenueADJ TOTAL502,464 511,474 440,000 578,765 609,242 650,341 705,369 761,748 818,466 938,372 1,002,178 1,081,357 Bulk water salesFLAT- 6,667 - 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 Special assessmentsSEE AUDIT3,774 (327) 2,500 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 Water meter salesSEE SCHED11,121 9,165 5,000 8,652 31,615 43,272 73,946 52,167 53,732 55,344 57,005 58,715 Trunk Line FeesSEE SCHED78,000 74,100 48,000 600,000 927,000 1,129,859 1,096,552 759,718 347,782 358,216 184,481 190,016 Connection FeesSEE SCHED28,000 118,107 175,049 288,480 236,357 255,040 755,835 268,113 333,161 Investment earnings1%10,580 9,903 4,000 7,199 11,596 20,174 16,956 20,982 25,230 28,436 38,626 42,981 Rents1%45,226 48,555 36,000 27,600 27,600 27,600 27,600 27,600 27,600 27,600 27,600 27,600 Total Operating Sources 651,165 659,537 535,500 1,260,216 1,735,160 2,056,294 2,218,902 1,868,573 1,537,851 2,173,803 1,588,003 1,743,829 Non-Operating:Bond ProceedsSEE CIP23,928 56,226 - 3,540,000 - - 2,000,000 - - - - - GrantsSEE CIP1,000,000 - - - - - - - - IntergovernmentalSEE CIP1,000,000 - - - - - - - - Trsf In from Other/TIF/DeveloperSEE CIP- 400,000 - 250,000 350,000 - - - - Assessment/Litigation judgmentESTIMATE- Trsf In from Other/Due From Oth FundsSEE AUDIT50,000 50,000 25,000 - - - - - - - - - Contribution of capital assetsSEE AUDIT187,401 Total Non-Op Sources 261,329 106,226 25,000 5,540,000 400,000 - 2,250,000 350,000 - - - - Total Source of Funds912,494 765,763 560,500 6,800,216 2,135,160 2,056,294 4,468,902 2,218,573 1,537,851 2,173,803 1,588,003 1,743,829 USE OF FUNDS:Operating:Personnel2%102,711 103,651 103,845 105,922 108,040 110,201 112,405 114,653 116,946 119,285 121,671 124,104 NonPersonnel2%272,216 220,119 259,725 264,920 270,218 275,622 281,135 286,757 292,493 298,342 304,309 310,395 Depreciation*2%324,818 324,192 340,000 340,000 340,000 340,000 340,000 340,000 340,000 340,000 340,000 340,000 Increase in O&M from future Improv2%Total Operating Uses 699,745 647,962 703,570 710,841 718,258 725,823 733,540 741,411 749,439 757,628 765,980 774,500 Non-Operating:Capital improvements/acquisitionSEE CIP33,32012,831-5,540,000400,0001,500,0003,175,000600,000----ProjectedCITY OF LAKE ELMOWATER FUND FINANCIAL PLANCityhasn't identified but does anticipate there will beCapital improvements/acquisitionSEE CIP33,320 12,831 5,540,000 400,000 1,500,000 3,175,000 600,000 Surface Water Loan PaymentSEE CIP56,226 GO Water Rev Bond 2002BSEE CIPGO Water Rev Bond 2005ASEE CIP175,025 175,025 175,025 300,025 320,650 315,250 GO Ref Bond 2009A (Refund 2002B)SEE CIP51,131 55,069 54,680 53,680 52,480 51,280 49,880 53,680 52,128 55,575 53,850 51,925 GO Ref Bond 2012A (Refund 2005A) SEE CIP281,043 272,143 293,343 284,043 279,843 270,643 Future Debt Service on BondsSEE DEBT95,958 125,958 125,778 166,818 466,563 462,348 397,473 392,923 392,833 Bond Discount Amortization*SEE CIP7,418 7,418 7,418 6,277 6,277 6,277 6,277 6,277 6,277 6,277 6,277 6,277 Other (Adjustments)REC TO AUDIT2,402 11,818 Trsf out to Other/Due to Oth FundsSEE AUDITTotal Non-Operating 325,522 262,161 237,123 5,995,940 905,365 1,998,585 3,679,018 1,398,663 814,095 743,368 732,893 721,678 Total Use of Funds1,025,267 910,123 940,693 6,706,781 1,623,623 2,724,408 4,412,557 2,140,073 1,563,534 1,500,995 1,498,873 1,496,177 NET DIFFERENCE SOURCES AND USES(112,773) (144,360) (380,193) 93,435 511,537 (668,114) 56,344 78,500 (25,683) 672,808 89,130 247,651 CASH BALANCEAvailable Cash Balance Purposes:Maintain 50% of operating expense as reserve 323,981 351,785 355,421 359,129 362,912 366,770 370,705 374,719 378,814 382,990 387,250 398,867 Net available for capital 241,427 400,873 364,462 800,466 1,654,497 1,328,802 1,727,488 2,148,250 2,464,750 3,479,658 3,910,805 4,493,116 Ending Cash Balance 565,408 752,658 719,883 1,159,595 2,017,409 1,695,572 2,098,193 2,522,970 2,843,563 3,862,648 4,298,055 4,891,984 Cityhasn t identified but does anticipate there will be future capital spending in years 2018 to 2021 not accounted for here.
24Financial Plans1234567 8 910Notes201020112012 Budget201320142015201620172018201920202021SOURCE OF FUNDS:Operating:Customer Billing Revenue 48,508 53,012 50,000 57,268 59,352 62,770 66,674 72,311 77,065 85,416 90,713 98,389 Interest income1%631 417 100 (166) 4,865 12,863 22,311 32,689 39,338 39,171 46,704 47,270 Special assessmentsSEE AUDIT- - - - - - - - - - - Trunk Line feesSEE SCHED2,400 1,785 - 600,000 927,000 1,129,859 1,096,552 759,718 347,782 358,216 184,481 190,016 Connection feesSEE SCHED28,000 118,107 175,049 288,480 236,357 255,040 755,835 268,113 333,161 MCES fee collected446,000 730,500 881,714 847,414 581,409 263,572 268,844 137,110 139,852 Total Operating Sources 51,539 55,214 50,100 1,131,101 1,839,823 2,262,253 2,321,430 1,682,485 982,797 1,507,481 727,121 808,688 Non-Operating:Bond ProceedsSEE CIP- - - 3,500,000 1,200,000 1,100,000 - - - - - - GrantsSEE CIP- - - 1,000,000 - - - - - - - - IntergovernmentalSEE CIP- - - 180,000 180,000 - - - - Trsf In from Other/TIF/DeveloperSEE CIP- - - - 400,000 - 420,000 420,000 - - - - Total Non-Op Sources - - - 4,500,000 1,600,000 1,100,000 600,000 600,000 - - - - Total Source of Funds51,539 55,214 50,100 5,631,101 3,439,823 3,362,253 2,921,430 2,282,485 982,797 1,507,481 727,121 808,688 USE OF FUNDS:Operating:Personnel2%22,996 22,837 23,403 23,871 24,348 24,835 25,332 25,839 26,356 26,883 27,420 27,969 NonPersonnel2%29,777 41,521 70,400 71,808 73,244 74,709 76,203 77,727 79,282 80,867 82,485 84,135 MCES Payment (offset by fee collected)446,000 730,500 881,714 847,414 581,409 263,572 268,844 137,110 139,852 Depreciation2%8,740 9,000 9,200 9,200 9,200 9,200 9,200 9,200 9,200 9,200 9,200 9,200 Increase in O&M from future Improv2%Total Operating Uses 61,513 73,358 103,003 550,879 837,293 990,458 958,149 694,175 378,410 385,794 256,215 261,156 Non-Operating:CapitalSEE CIP4,500,000 1,600,000 1,100,000 600,000 600,000 300,000 - - - Existing Debt ServiceSEE DEBTF t eDebtSe iceonBondstobeIss edSEE DEBT86 285211 910336 260334 610332 660330 310377 560423 435467 835ProjectedCITY OF LAKE ELMOSANITARY SEWER FINANCIAL PLANCity hasn't identified but does anticipate there will be future capital spending in years 2019 to 2021 not accounted for here.Future Debt Service on Bonds to be IssuedSEE DEBT86,285 211,910 336,260 334,610 332,660 330,310 377,560 423,435 467,835 Other (Adjustments)REC TO AUDIT17,015 (6,980) Trsf out to Other/Due to Oth FundsNONETotal Non-Operating 17,015 (6,980) - 4,586,285 1,811,910 1,436,260 934,610 932,660 630,310 377,560 423,435 467,835 Total Use of Funds78,528 66,378 103,003 5,137,164 2,649,203 2,426,718 1,892,759 1,626,835 1,008,720 763,354 679,650 728,991 NET DIFFERENCE SOURCES AND USES(26,989) (11,164) (52,903) 493,937 790,621 935,535 1,028,671 655,649 (25,922) 744,127 47,470 79,697 CASH BALANCEAvailable Cash Balance Purposes:Estimate of 50% of operating expense for reserve 36,679 51,502 275,440 418,646 495,229 479,074 347,088 189,205 192,897 128,108 130,578 134,495 Net available for capital (7,453) (24,440) (292,081) 67,850 791,088 1,751,978 2,921,836 3,744,568 3,724,153 4,542,270 4,596,470 4,681,449 Ending Cash Balance 29,226 27,062 (16,641) 486,496 1,286,317 2,231,052 3,268,923 3,933,773 3,917,050 4,670,377 4,727,047 4,815,944
25Financial Plans1234567 8 910Notes201020112012 Budget201320142015201620172018201920202021SOURCE OF FUNDS:Operating:Customer Billing Revenue 185,245 235,252 150,000 228,378 235,229 242,286 249,554 257,041 264,752 272,695 280,876 289,302 Interest income1%(83) 468 - 71 685 1,341 2,040 2,783 3,574 4,413 5,304 6,247 Other MiscellaneousSEE AUDIT32,721 17,000 17,500 - - - - - - - - Total Operating Sources 217,883 252,720 167,500 228,449 235,914 243,627 251,594 259,825 268,326 277,108 286,179 295,549 Non-Operating:Bond ProceedsSEE CIP- - - - - - - - - GrantsSEE CIP- - - - - - - - - - - Trsf In from Other/TIF/DeveloperSEE CIP- - - - - - - - - Total Non-Op Sources - - - - - - - - - - - - Total Source of Funds217,883 252,720 167,500 228,449 235,914 243,627 251,594 259,825 268,326 277,108 286,179 295,549 USE OF FUNDS:Operating:Personnel2%39,855 41,134 40,532 41,343 42,169 43,013 43,873 44,751 45,646 46,559 47,490 48,439 NonPersonnel2%96,341 95,062 123,200 125,664 128,177 130,741 133,356 136,023 138,743 141,518 144,348 147,235 Depreciation2%15,188 15,188 15,188 15,188 15,188 15,188 15,188 15,188 15,188 15,188 15,188 15,188 Total Operating Uses 151,384 151,384 178,920 182,195 185,535 188,942 192,417 195,961 199,577 203,265 207,026 210,863 Non-Operating:CapitalSEE CIPExisting Debt ServiceNONEFuture Debt Service on Bonds to be IssuedSEE DEBTOther (Adjustments)REC TO AUDIT81,687 113,197 Trsf out to Other/Due to Oth FundsNONETotal Non-Operating 81,687 113,197 - - - - - - - - - - Total Use of Funds233,071 264,581 178,920 182,195 185,535 188,942 192,417 195,961 199,577 203,265 207,026 210,863 NET DIFFERENCE SOURCES AND USES(15 188)(11 861)(11 420)46 25450 38054 68559 17763 86368 74973 84479 15384 686ProjectedCITY OF LAKE ELMOSTORM SEWER FINANCIAL PLANCity hasn't identified but does anticipate there will be future capital spending in years 2018 to 2021 not accounted for here.NET DIFFERENCE SOURCES AND USES(15,188) (11,861) (11,420) 46,254 50,380 54,685 59,177 63,863 68,749 73,844 79,153 84,686 CASH BALANCEAvailable Cash Balance Purposes:Estimate of 50% of operating expense for reserve 75,692 89,460 91,097 92,767 94,471 96,208 97,981 99,788 101,632 103,513 105,431 108,594 Net available for capital (75,692) (86,133) (84,002) (24,230) 39,634 107,770 180,363 257,606 339,700 426,851 519,274 615,985 Ending Cash Balance - 3,327 7,095 68,537 134,105 203,978 278,343 357,395 441,332 530,364 624,705 724,579
26AppendixThe Capital Improvement Plan anticipates the use of cash in years 2015, 2016, and 2017 for capital projects in lieu of bonding. Year 2015 includes the largest use of cash for capital, estimated at $1.5 million in this year. The City may determine to increase or decrease the planned issuance of bonds depending on the actual amount of cash available in the in future years to pay for project costs or future debt service. The decision will depend on the amount of cash available which is a factor of the rate of growth from new development and the timing of collection of connection and availability charges and capital spend-ing.$0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 2012201320142015201620172018201920202021City of Lake ElmoWater FundProjected Cash Balances at Year End
27AppendixThe City’s CIP anticipates bonding to pay for capital improvement projects, with the exception of $300,000 in year 2018. The City may determine to increase or de-crease the planned issuance of bonds depending on the actual amount of cash avail-able in the in future years to pay for project costs or future debt service. The decision will depend on the amount of cash available which is a factor of the rate of growth from new devel-opment and the timing of collection of connection and availability charges and capital spending.($500,000)$500,000 $1,500,000 $2,500,000 $3,500,000 $4,500,000 $5,500,000 2012201320142015201620172018201920202021Sanitary Sewer FundProjected Cash Balance at Year End
28AppendixThe steady increase in cash balance in the Storm Sewer Fund is due to the assump-tion that the annual charge for service will increase by 3 percent annually and growth in expenditures will increase by 2 percent an-nually. The Storm Sewer Fund has no outstanding debt or planned use of cash for capital improvements at this time. Possible addi-tion of capital spending in the future will impact the projected cash balances. If there is no future introduc-tion of plans for capital im-provements, the City may determine that future rate increases may not be neces-sary at the level included in the report.$0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 $800,000 2012201320142015201620172018201920202021City of Lake ElmoStorm Sewer FundProjected Cash Balances at Year End
29AppendixThe annual projected source and use of funds varies due to the timing of capital im-provement projects and planned use of cash. The other major factor is pay-ment of debt service. For example, in year 2015 and 2016, the City plans to use $1,500,000 and $925,000 of cash for capital improve-ments, respectively by year.$0$1,000,000$2,000,000$3,000,000$4,000,000$5,000,000$6,000,000$7,000,00020112012 Budget201320142015201620172018201920202021Water FundSource and Use of FundsSource of fundsUse of funds
30AppendixProjected source of funds exceeds use of funds, with the exception of year 2018. In year 2018, the City antici-pates the use of $300,000 of cash from the fund for capi-tal improvements.$0$1,000,000$2,000,000$3,000,000$4,000,000$5,000,000$6,000,00020112012 Budget201320142015201620172018201920202021Sanitary Sewer FundSource and Use of FundsSource of fundsUse of funds
31AppendixThe source of funds is pro-jected to exceed the use of funds each year due to the projected 3 percent in-crease in the fee charged and 2 percent increase in annual operating expen-ditures. The Storm Sewer Fund has no outstanding debt or planned use of cash for capital improvements at this time. Possible addi-tion of capital spending in the future will impact the projected cash balances and the draw-down of fund bal-ance. The City may deter-mine to reduce the planned increase in the fee depend-ing on actual expenditures.$0$50,000$100,000$150,000$200,000$250,000$300,000$350,00020112012 Budget201320142015201620172018201920202021City of Lake ElmoStorm Sewer FundSource and Use of FundsSource of fundsUse of funds
32AppendixThe quarterly charge amounts shown in this chart are based on the fee schedule shown on page 19. The estimated volume of 10,010 is for household wa-ter usage. Property with a sprinkler system will have a higher average volume .$0$20$40$60$80$100$120$14020112012201320142015201620172018201920202021City of Lake ElmoExample Residential Quarterly Water and Sanitary Sewer BillBased on 10,010 Gallons Per QuarterWaterSanitary Sewer
33AppendixThe quarterly charge amounts shown in this chart are based on the fee schedule shown on page 19.$0$100$200$300$400$500$60020112012201320142015201620172018201920202021City of Lake ElmoExample Commercial Quarterly Water and Sanitary Sewer BillBased on 45,500 Gallons Per QuarterWaterSanitary Sewer
34Appendix020406080100120140160180200StillwaterWoodburyOakdaleMaplewoodMahtomediWhite Bear LakeRosevilleCottage GroveLake ElmoTotal Due for Three Month PeriodComparison of Estimated Utility BillsExample Single Family Res Property Total Charge for Equivalent Three Month Period with 20,000 Gallons of Usage(Fee Data Available From Year 2012)StormSewerWaterAs the City of Lake Elmo’s number of customers and volume of water sold in-creases, the City will have more customer units (and volume) to spread its fi xed costs over and as a result the City of Lake Elmo’s utility rates should begin to align more closely with other more developed cities utility rates over time.
35AppendixCity staff identifi ed total possible new residential equivalent units to be plat-ted / developed by year. To be conservative, for fi nan-cial planning purposes, the study assumes that approx-imately 50% of the total possible units will be plat-ted /developed. The fi gures shown in the chart are the units assumed for fi nancial planning purposes.The “spike” in unit con-nections in year 2019 can be att ributed to anticipated connections for units in Cimmaron Park.Water and sewer availabil-ity charges will be collected at time of plat or develop-ment. Water and sewer connection charges will be collected at time of building permit / connection to the systems.200 300 355 335 225 100 100 50 50 28 115 165 264 210 220 633 218 263 -100 200 300 400 500 600 700 201320142015201620172018201920202021City of Lake ElmoProjected New Residential Equivalent Connections As Prepared by the City of Lake ElmoNew Units Platted / DevelopedNew Unit Connections
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