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CITY OF MOUNDS VIEW <br /> UTILITY RATE STUDY Page 2 of 2 <br /> Summary of Significant Projection Assumptions • <br /> Note 5-INTEREST ON INVESTMENTS <br /> Interest on investments was projected based upon the average beginning and ending cash balance of the fund at a <br /> rate of 4.5%for 1996 through 2000. <br /> Note 6-METER CHARGES <br /> Beginning in 1996,the City will be charging S3 per quarter for residential customers to partially cover the cost of <br /> the new automatic telephone meter reading system. Residential fees collected are estimated at$35,280 annually. <br /> Commercial accounts will be charged various amounts based on the size of their meter. Commercial fees are <br /> estimated to be$3,600 annually. <br /> Note 7-DEBT SERVICE PAYMENTS <br /> Debt service payments were based on existing bond issues and a$500,000 loan from the City's special project fund <br /> on March 1, 1996. The loan from the special project fund will be paid semi-annually on June 30,and December <br /> 31 for twelve years at 7%interest. A schedule of debt service payments for 1996 through 2000 is as follows: <br /> Principal Payment Interest Payment <br /> Year Bonds Loan Bonds Loan Total <br /> 1996 $85,000 $33,887 $175,458 $28,386 322,731 • <br /> 1997 90,000 30,164 170,490 32,109 322,763 <br /> 1998 95,000 32,312 165,100 29,961 322,373 <br /> 1999 100,000 34,614 159,298 27,659 321,571 <br /> 2000 105,000 37,079 140,293 25,194 307,566 <br /> Note 8-CASH AND INVESTMENTS <br /> Cash and investments were anticipated to increase based on the results of operations and the various other factors <br /> which affect cash such as bond principle payment,capital outlay,increases in accounts receivable and other factors <br /> as presented in the statement of cash flow(Schedules 9 and 12). <br /> Note 9-ACCOUNTS RECEIVABLE • <br /> Projected accounts receivable as of December 31 were projected to represent 31%and 27%of annual revenue based <br /> on historical/actual results sewer and water funds,respectively. <br /> Note 10-FIXED ASSETS <br /> Land,buildings and structures and system replacements and improvements(with the exception of the automatic <br /> phone meter reading system)were not anticipated to increase throughout the period of the projections. System <br /> replacements and improvements were not anticipated to occur. • <br />