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Approximately 75% of the water operating expense, including depreciation of the distribution sysCem, is for water provided by the City of St. Paul. Consequently, the water rates are in a large part determined by the Cit,r of St. Paul charges. Water rates are caiculated to generate revenues to offset depreciation on the distribution system since these assets were originally financed by special assessment, and future replacement of these assets is planned to be financed by system users. It is expected the City will continue ro both increase rates and work to reduce costs as much as possible to move the waCer operations to at least a break-even point during the next 2-3 years. Following is a summary of the water operations: 9perating Revenues User Charges OCher Total Operating Revenues Oneratin�Fxpenses Water Purchased From City of St Paul Depreciation O[her Total Operating Expenses Net ( .occ) 1997 $3,418,932 4,102 �3.423,034 $2,715,877 183,977 720,180 �3 620 034 (197.0001 1996 $3,483,615 47,039 �3 530 654 $2,763,992 101,319 793 061 $3.658.372 77 The Golf Course Fund accounts for the operation of one par-three, nine-hole golf course. The golf course was purchased in 1967, and the annual profits from the user charge have been suPficient to cover all operating and capita] costs since the purchase date. Green fees were increased in 1997 to $7.00 per round. The City's golf operation has continued to be sound financially during 1997, even though a small loss was incurred. A major reason for the decrease in net revenues was the closing of the course in the past two years due a reconstruction projecC . The course was closed early at the end of the season in 1996 and opened late in 1997 so that a reconstruction of greens, fairways, and tees could be completed. Even though green fees have been increased slightly each year, the course remains very competitive with the other metro facilities. Following is a summary of golf operations: 12