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period 1990 - 1994 there will be sufficient cash flow from <br /> operations of the Water Utility to finance the Scenario A <br /> projects. <br /> Projected financial statements for Scenario B are contained in <br /> Exhibits 4, 5, 6. The Projected Statement of Revenue, Expenses and <br /> Changes in Retained Earnings shows a net loss fortheyears <br /> 1991 - 1994 of between $38, 698 and $81,853 . Those statements were <br /> prepared under generally accepted accounting principles which <br /> require the taking of depreciation on all assets. The City' s <br /> policy for many years has been not to take depreciation on assets <br /> that were paid for by residents who had been assessed for water <br /> mains. Exhibit 6 is a Statement of Cash Flows. That Statement <br /> indicates that, although in 1992 and 1993 there will be a <br /> negative cash flow of $27,802 and $22,881, over the five year <br /> period 1990 - 1994 there will be sufficient cash flow from <br /> operations of the Water Utility to finance the Scenario B <br /> projects. <br /> Since there will be sufficient cash flows to finance a bond issue <br /> that includes all projects contemplated in the original study <br /> staff recommends that Council authorize staff to contact <br /> Springsted, Inc. , the City's financial consultant, to begin <br /> preliminary work on a Water Revenue Bond Issue of $2 ,390, 000. <br /> Springted Inc. will prepare a study on the feasibility of a <br /> Revenue Bond issue and further refine costs associated with <br /> issuance. After the report is received Council will have the <br /> option to proceed or not proceed with the issue. <br /> • <br />