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City of Mounds View <br /> Utility Rate Study <br /> Page 5 <br /> • <br /> Projection Assumptions (continued) <br /> The combination of these two factors has produced total MCWS processing charges as follows: <br /> Estimated Percent <br /> Year Billings Change <br /> 1986 $407,967 10.3% <br /> 1987 429,216 5.2% <br /> 1988 437,511 1.9% <br /> 1989 458,688 4.8% <br /> 1990 508,434 10.9% <br /> 1991 543,859 7.0% <br /> 1992 580,499 6.7% <br /> 1993 593,344 2.2% <br /> 1994 594,269 0.2% <br /> 1995 699,769 17.8% <br /> 1996 711,764 1.7% <br /> For purposes of this projection, the above two factors were estimated to have a combined annual <br /> increase in MCWS charges of 7%. <br /> • Inflation. The inflation rate/consumer price index-urban(CPIU)was 2.7% and 2.6%for 1994 <br /> and 1995, respectively. The inflation rate used in the study was 3%. Future rate needs will <br /> depend partially on actual operating expense inflationary increases. <br /> Investment Interest. Investment interest was projected based on the average beginning and <br /> ending cash balance of the fund at a rate of 4.5%. <br /> Meter Charges. Beginning in 1996, the City will be charging$3 per quarter for residential <br /> customers to partially cover the cost of the automatic telephone meter reading system. Fees <br /> collected from residential customers is estimated at$35,280 annually. Commercial customers will <br /> be charged various amounts based on the size of the meter. Commercial fees are estimated to be <br /> $3,600 annually. <br /> Debt Service Payments. Debt service payments were based on existing bond issues and <br /> repayment of a$500,000 loan from the City's special project fund. The loan from the special <br /> project fund will be paid semi-annually on June 30 and December 31 for twelve years with an <br /> interest rate of 7%. <br /> • <br />