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<br />. IV. <br /> <br />. <br /> <br />. <br /> <br />CITY OF ARDEN HILLS, MINNESOTA <br />RATE STUDY <br />SEPTEMBER 9,2004 <br /> <br />SANITARY SEWER RATE STUDY - CONTINUED <br /> <br />We have presented projections of cash flow under four different scenarios. <br /> <br />I. Rates stay the same for all categories <br />2. Rates increase 3 percent per year for all categories starting in 2005 <br />3. Rates are increased to cover the increased costs but limited to 15%. <br />4. The rate structure for non-senior residential changes to include a usage component based on winter usage, <br /> <br />The following graph highlights the ending cash balances under the rates described above: <br /> <br />PROJECTED SANITARY SEWER FUND CASH BALANCES <br /> <br />$1.000,000 <br />$800.000 <br />$600.000 <br /> <br />$400,000 <br />$200.000 <br /> <br />$. <br />$(200,000) <br />$(400,000) <br />$(600,000) <br />$(800,000) <br />$(1,000,000) <br />$(1,200,000) <br /> <br />Rates stay same <br /> <br /> <br />Rates have a usage component <br /> <br /> <br />2004 2005 2006 2007 2008 2009 <br />$756,669 $424.142 $98,325 $(247,970) $(623,840) $(1,017,283) <br />$756,769 $452.618 $185.024 $(71,983) $(329.584) $(572.711) <br />$756,769 $565.880 $431,306 $329,220 $246.741 $181,368 <br />$756,769 $636,856 $583,920 $575,028 $598.254 $644,707 <br /> <br />Rate scenario 1 is not an option without issuing debt to finance a large portion of the planned capital projects. <br /> <br />Rate scenario 2 projects results based on a 3 percent inflationary increase pe' year starting in 2005. The cash balance is <br />not adequate for working capital starting in 2006 and ends at negative starting in 2007 and continuing nntil 2009. This <br />option would only work with a debt issuance. <br /> <br />.6- <br />