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2010 — 2019 �rnancial Plan �nterprise �perations The City's enterprise or business-type operations ii�clude the Cit�'s water; sanitary sewer, storrn sev�er, solid waste recycling; and goIf caurse operations. They are categorized as enterprise operations because they are run m�ich iike a private, stand-alone business that is sustai�ied solely by lhe direct revenues they receive. These operations do not receive any property tax monies. Enterprise operations are funded by user fees, a portion of which is set aside far future capita.! replacernents. The reYnaining is used for day-to-day operatians. For financial planning puxposes, the City looks at operations anc! capital investments separately. The iinancial plan For each of these categories is discussed in �rea#er detaiI below. Operations Over the next 10 years, the City's enterprise operations are projected to collectively �row S% per year; fram $9.$ milIion in estimated expenditures in 2009 ta $14.& rriillion in 2019. This assumes that the City vvilI continue providin� the same services and levels ot� services as it currently does. The projections incorporate increases in persor�nel, supplies & materials, and other operating casts includin� the purchase oi water from the City oi St. Paul and wastewater treat�nerat casts paid to the Metropolitan Council. Projected cost increases by major category for the enter�rise functions are as fo]Iows: ❖ Personnel costs - 5% tliru 2012; and 4% thereafter ❖ 5upplies and materials - 3% ❖ O�her services a��d charges - 3% The projected �ost inereas��s through 2019 are coinparab�le to actual increases realized in pr�or years. To accommodate these addit.ional costs, operating revenues rates wilI n�ed to increase by a corresponding amount. User fee increases wi�l fluctuate greatly depending on the enterprise fitnction, with golf course and recycling fees risii�g ai 3% annually. By contrast, stormwater t'ee� will need to rise at 8% arulually to off'set projected cast increases ax�d ta ec��late curr�ni revenues witl7 current expenditures. Water and sanitary sewer fees will need to rise at approximateIy 4% per yeai�. Cash reserves ��eld i�i the enter�arise funds are expected to generaie an ir�vestrnent retuxn of 5% annually which can be used to partially offset operational costs. Additional user fee increases will be neec��d to o�`fs�t capital investment needs. These increas�s are discussed in greater deiail below. 3