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Mike Ericson OFrorn: Colvin, Kyle <kyle.colvin@metc.state.mn.us> Sent: Wednesday, April 05, 20171:06 PM To: Mike Ericson; Smith, Ned Cc: Paul Palzer; Charles Roberts; Smith, Ned; Atkins, John; Schueller, Dan Subject: RE: MCES Council Meeting Follow-up Mike, I apologize for not getting all the information that I committed getting to you sooner. I will attempt to respond to the bulleted items that I provided in my February 9 email and which is highlighted below: Unfortunately, we have not completed the 2018 cost/flow allocation process yet which includes flow generated in 2016. In order to re-create the 2017 cost/billings, we'll need to finalize the 2016 flow determination (at least the first half). We plan to compete the 2018 cost/flow allocations next week or the following week. We can then rerun the 2017 using the old flow period model for Centerville and compare how the switch of flow period impacted the City. • MCES keeps an operating reserve fund that has a minimum reserve balance requirement (10% of operating expenses excluding debt service cost). • At the end of 2016 we had some excess reserves as the balance was $19.2 million and the minimum balance requirement was $14.3 million. • The excess reserves are mainly used to decrease future Municipal Wastewater Charges. For example, for the 2018 budget that we are working on now, we may create a budget that has a deficit that is funded from reserves. In other words, the MWCs will be set lower than they otherwise would be. See table below. The list below ranks from High to Low the cost increase for the communities that experienced increases in their 2017 wastewater bills from the Council. It reflects those that had an 8% or higher increase. Centerville is located near the center of the list with an 11.62% increase. Most of the higher increases are attributable to growth that occurred within the community and many of those are smaller sewered areas. Thus growth had a greater impact. Communities that are listed in red text have 100% of their flow estimated based on connection counts and assumed flow per connection (Like the Lamont area in Lino Lakes) or other information submitted by the community. 41