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<br />1. To promote conservation effor1s.
<br />
<br />2. To allocate costs appropriately to those who are generating them. Cities construct
<br />water systems to meet the capacity of peak watering days in the heat of the
<br />summer. In Arden Hills, the peak demand in the summer is approximately 2.4
<br />times the average daily winter demand. A tiered rate system charges more per
<br />gallon for peak use, thereby allocating the cost of "oversizing" the system for
<br />peak days to the peak users.
<br />
<br />Residential Water and Sewer Rate Options
<br />
<br />The three rate options were designed in order to provide sufficient resources for projected
<br />operating expenses and capital costs and to build cash balances where necessary. The
<br />following graph shows the historic trend in cash balances for the Water Utility and the
<br />Sewer Utility.
<br />
<br />Historic Trend in Cash Balances
<br />
<br />S1,800.0001' 'W.
<br />S1,600,OOO ] , ,<,pm
<br />S1,400,OOO '. ~';;.+.,.
<br />S1,200,OOO. .. ,.'
<br />S1,000,Ooo I
<br />
<br />
<br />,"",,"'0 j
<br />S600.000 .
<br />S400.000
<br />S200.000 .
<br />SO
<br />
<br />,~
<br />
<br />',,",
<br />
<br />............
<br />---
<br />
<br />"""-Z<",~.v,,,,,"~
<br />,,""-'
<br />
<br />"~:-''''''''''"''''e
<br />
<br />'~""",~~,~.;...-",,,",,""'/P;""''''''"''
<br />
<br />2001 : 2002 ; 2003 ! 2004 : 2005 2006 2007
<br />==-W~-t~U-ti-l-i~X-rS 1~232~536Ts-1~4-65220 !S1":569~9781 S 1 . 1 04~1-0rS98B--:7'58;-S956,479'j 5697.944 i
<br />,---~~' , : . , ' ,--~.~._"_.
<br />:~~Sewer Utility- i 51 ,387.150, $1,562,147: S958, 132.,j.._~6~0,489 i 5422.764 ., _5267.558 : 5376,623 i
<br />
<br />The following graph for the Water Utility shows the trend of operating revenues,
<br />operating expenses, capital outlay with cash balances. As is apparent. the Water Fund has
<br />been operating at a deficit during the years of 2004-2006, resulting in a total operating
<br />deficit of $493,800 from 2004 to 2006. Capital costs during that time totaled $1,022,300.
<br />Water operating revenues have not kept pace with expenses.
<br />
<br />J.
<br />
<br />6
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