CCP 10-18-2004 - Laserfiche WebLink

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.v. . . CITY OF ARDEN HILLS, MJNNESOT A RATE STUDY SEPTEMBER 9, 2004 SURFACE WATER MANAGEMENT RATE STUDY Currently the City's Surface Water Management rate structure is as follows: Category Residential - homes Residential - townhomes Apartment Industrial Undeveloped land Residential use Amount Per $ 4,08 5.29 33.30 52.00 6,12 12.25 Lot Unit Acre Acre Acre Acre Vle have presented projections of cash flow under three different scenarios: 1. Rates stay the same for all categories 2. Rates increase 3 percent per year for all categories starting in 2005 3. Rate are increased to cover the increased costs and maintain a cash reserve at approximately $300,000 The following graph higWights the ending cash balances under the rates described above: PROJECTED SURFACE WATER FUND CASH BALANCES $800,000 $600,000 $400,000 $200,000 S(200,000) S(400,000) S(600,000) $(800,000) Rates stay same ---Rates increase 3 percent per year ~Rate increase to cover costs $- 2004 $231,779 S231,779 $231,779 2006 2007 2008 2009 $(98,627) $(73,726) $(487,133) $(623,947) $(81,176) $(38,612) $(428,172) $(534,683) $298,803 $545,998 $374,415 $486,771 2005 $109,962 $115,646 $300,120 Rate scenario I is not an option without issuing debt to finance a large portion of the planned capital projects. Rate scenario 2 projects results based on a 3 percent inflationary increase per year starting in 2005. The cash balance is not adequate for working capital starting in 2006 and ends at negative starting in 2006 and continuing until 2009. This option would only work with a debt issuance. Rate scenario 3 uses an increase of 100 percent for residential and commercial in 2005 and then a 3 percent lncrea-<;e in subsequent years to arrive at the cash flow described above, If scenario 3 is chosen, Arden Hills would have the fourth highest rate out of the nine presented for residential and the third highest rate out of the seven presented for commercial. -8-