Agenda Packets - 1996/12/02 - Laserfiche WebLink

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City of Mounds View Utility Rate Study Page 7 • Rate Analysis (continued) The above rate increase are projected to have the following effect on net income and retained earnings: Water Sewer Retained Retained Net Earnings of Net Earnings of Year Income/(Loss) December 31 Income/(Loss) December 31 ,. , ----- -------„,(..---- . 1996 (575,704 $2,614,578 "1'°'' ($1,778) $1,932,253- -- 1997 (41,015) 2,573,563 13,471 1,935,572 # 1998 (9,470) 2,564,093 9,797 1,934,153 1999 34,726 2,598,819 8,835 1,930,569 00_0 55,026 2,659 — x•13..2.66 1,930,554 � Consistent with the City's current policy, water and sewer rates /are not designed to cover 1 depreciation (eventual replacement) of assets contributed to the water and sewer funds. The 1 proposed water and sewer rates are designed to fund the operating costs (excluding contributed , depreciation) and debt service. : f;/ _ -,� -______2___________________ • The current water and sewer rates of the City of Mounds View as compared to other communities is as follows: Residential Quarterly Billing Based on 22,000 Gallons of Usage Effective Water Sewer Total Year Lino Lakes $61.86 $48.00 $109.86 1996 Shoreview 22.82 37.51 60.33 1995 New Brighton 23.10 49.50 72.60 1995 Mounds View 26.40 44.00 70.40 1995 Fridley 13.20 40.26 53.46 1995 Rates for the City of Mounds View should not be based on the rates in effect for surrounding communities. Each city has its own unique combination of variables which affect the rate structure. The relative ranking of rates charged by surrounding communities, however, indicates that the City of Mounds View ranks favorably in rate requirements. In order to avoid the necessity for extreme (single year) increases, we recommend that the City consider a policy of increasing water and sewer rates at moderate annual rates to assure adequate funding of operations. •