A. Utility Rate Study0
CITY OF
CAANHASSEN
7700 Market Boulevard
PO Box 147
Chanhassen, MN 55317
MEMORANDUM
TO: Mayor and City Council
FROM: Greg Sticha, Finance Director �p
DATE: October 24, 2011
Administration
Phone: 952.227.1100 SUB J : Utility Rate Study
Fax: 952.227.1110
BACKGROUND
Building Inspections
Phone: 952.227.1180
Fax: 952.227.1190
Engineering
Phone: 952.227.1160
Fax: 952.227.1170
Finance
Phone: 952.227.1140
Fax: 952.227.1110
Park & Recreation
Phone: 952.227.1120
Fax: 952.227.1110
Recreation Center
2310 Coulter Boulevard
Phone: 952.227.1400
Fax: 952.227.1404
Planning &
Natural Resources
Phone: 952.227.1130
Fax: 952.227.1110
Public Works
7901 Park Place
Phone: 952.227.1300
Fax: 952.227.1310
Senior Center
Phone: 952.227.1125
Fax: 952.227.1110
Web Site
www.ci.chanhassen.mn.us
Ehlers & Associates, the city's financial advisors, annually studies the current utility
fees and future projects to determine if the rates are appropriate for planned
expansions, reconstruction, and maintenance of the water, sanitary sewer, and storm
water systems. This evening we will be discussing the rate study and related
changes planned for 2012.
Attached is the entire rate study as well as the executive summary prepared by
Ehlers & Associates. Mark Ruff from Ehlers will be here on Monday to review the
study with the council and answer any questions. Mr. Ruff will present a brief
PowerPoint that highlights the key areas of the study.
If the city council will recall, the rate study from last year included a zero percent
increase in all operating rates as well as connection rates. This was done in an
effort to minimize additional cost increases to our residents in an already difficult
economic time. Listed below are the proposed operating and connection rate
increases for each utility fund. These increases are identical to the projected 2012
rate increases from last year's study.
No action is needed on this item at tonight's meeting. On December 12, the city
council will consider an amendment to the fee ordinance, which will incorporate
any changes discussed at tonight's meeting.
ATTACHMENTS
1. Rate Study Executive Summary
2. Rate Study Detailed Info
Chanhassen is a Community for Life - Providing for Today and Planning for Tomorrow
Operating
Connections
Water
2% (3% in 5 tier)
6%
Sanitary Sewer
3%
4%
Storm Water
3%
5%
No action is needed on this item at tonight's meeting. On December 12, the city
council will consider an amendment to the fee ordinance, which will incorporate
any changes discussed at tonight's meeting.
ATTACHMENTS
1. Rate Study Executive Summary
2. Rate Study Detailed Info
Chanhassen is a Community for Life - Providing for Today and Planning for Tomorrow
❑ E --
Financial Planning
City of Chanhassen
Water, Sanitary Sewer, and Storm Water Rate Analysis
Executive Summary
October, 2011
Key Findings
The City of Chanhassen has requested Ehlers & Associates to update the utility rate analysis to review
rates for 2012 and beyond. In the 2010 report, we recommended that the City add a fifth water usage tier.
By doing so, the City was able to hold water usage rates at a 0% increase. Last year's report
recommended incremental rate increases for 2012 and beyond. This report reiterates those findings. We
have completed the review and determined that there are small rate increases proposed for connection
charges, platting fees, and area charges for water, sanitary sewer, and storm water for 2012. These rate
increases are consistent with the rate increases proposed for 2012 in prior year's report.
EHLERS
LEADEAS IN PUBLIC FINANCE
Minnesota
Offices also in weconsfn end Illinois
www.ehiers- inc.com
phone 651 - 697$500 3060 Centre Pointe Drive
fax 651- 697 -8555 Roseville, MN 55113 -1122
toil free 800-552-1171
Water Utility Fund
The City accounts for both operations and expansion of the system in one fund. We have split these
functions into the Operating portion of the fund and the Trunk portion of the fund. The City's water
infrastructure is the cost driver in the water fund as a whole. The following chart shows the annual cost
breakdown in 2012 and 2019 for operating and capital costs for the water system. The capital costs and
related debt service are expected to increase steadily over the next five years. This is a trend that has been
illustrated in past studies. Capital and debt increase to over 1/3 of total utility costs, which is due to the
debt service related to the water treatment plant in 2018.
2012 Water Utility Costs
Capital and
Debt
37%
^aerating
posts
31%
preciation
32%
The City is building a water system to serve its residents and businesses on the hottest, driest days of
summer that produce peak demand. The City has taken steps to reduce this peak demand, such as every-
other day watering, but summer water consumption continues to be 2.5 times as high as winter water
demand, largely due to irrigation. To meet the increased demand for water, the City will need to invest in
additional infrastructure, in particular, the additional water treatment plant scheduled for 2019.
Usage Rates and Targeted Cash Reserves
The proposed rates impose the lowest increases possible that will still leave the City's water system in
good financial health. As was stated above, growth and the pressure of water usage during peak demand
times is driving operating and capital costs. In order to meet these needs, usage rates and connection fees
will need to be increased. Sufficient cash balances need to be maintained in order to assure smooth
operation of the entire water system. The City has set the cash reserve target to be six months' worth of
operating costs plus 15% of accumulated depreciation. The following graph shows the projected cash
balances as measured against cash reserves.
2
2019 Water Utility Costs
Water Fund Operating Ending Cash Balance
10.000,000
9,000,000
8,000,000 ■ Total Target Reserves (6
7,000,000 mos. operating expense
plus 15% depreciation)
6,000,000
5,000,000
4,000,000
3,000,000 13 Ending Cash Balance
2,000,000 —
1,000,000 —
0
The cash balance in the operating portion of the fund has dropped below the target reserve amount
because growth has slowed in the City of Chanhassen. Growth is projected to slowly increase to 170
residential units per year in 2015 and beyond. Actual water usage decreased by 10% between 2009 and
2010. Weather patterns are the biggest determinant of usage. Our projections are based on lower water
use that was experienced during 2010. We have projected a small 2 % -5% increase in water usage
beginning in 2013. If water usage increases faster than this estimate, ending cash balance may be closer to
its target balance.
The water fund will maintain adequate cash to pay for expansion of the water system and provide for
operating needs.
Currently, the City's water usage tiers are as follows:
Tier 1: 0 -6,000 gallons
Tier 2: 6,001 to 24,000 gallons
Tier 3: 24,001 to 48,000 gallons
Tier 4: 48,001 to 99,000 gallons
Tier 5: Over 99,000 gallons (does not apply to commercial customers)
Water rate increases are necessary to meet higher projected future operating, capital and debt costs. The
proposed water rate changes are shown in the following chart.
3
% Rate Increase 0.00% 2.00% 2.00% 3.00% 3.00%
Tier 1 $1.00 $1.02 $1.04 $1.07 $1.10
0 -6,000 gallons
% Rate Increase 0.00% 2.00% 2.00% 3.00% 3.00%
Tier 2 $2.00 $2.04 $2.08 $2.14 $2.21
6,001- 24.000 gallons
% Rate Increase 0.00% 2.00% 2.00% 3.00% 3.00%
Tier 3 $2.49 $2.54 $2.59 $2.67 $2.75
24,001- 48,000 gallons
% Rate Increase 2.00% 2.00% 3.00% 3.00%
Tier 4 $2.89 $2.95 $3.01 $3.10 $3.19
48,001- 99,000 gallons
% Rate Increase 3.00% 3.00% 3.00% 3.00%
Tier 5 $3.61 $3.72 $3.83 $3.94 $4.06
Over 99,000 gallons
We have projected the rate increases that will be necessary in 2012 and in future years. We are
anticipating the need to increase usage rates on Tiers 1 -4 by 2% in 2012 and 2013 and 3% per year
thereafter. Rates for Tier 5 are projected to increase 3% annually beginning in 2012. These rate increases
are consistent with the findings from the prior year's report. Depending on actual water usage patterns
over the next year, the city may need to consider a rate increase higher than 2% in 2013 in order to
maintain the financial health of the water utility.
In addition to the usage charges above, the City of Chanhassen collects a fixed quarterly charge of $5.01.
As with usage rates, it will be necessary for the fixed fee to increase. We are recommending this fixed
charge increase by 12c to $5.13 in 2012. Beginning in 2012, the fixed charge would increase at the same
percentage as Tier 1 -4: 2% per year in 2012 and 2013, and 3% per year thereafter.
Impact on Customers:
The following charts provide sample bills for water users under the proposed rates.
4
Residential:
Low water user $21.01 $21.45 $21.88 $22.54 $23.27
11,000 gallons /qtr
Average water user $51.99 $53.05 $54.11 $55.73 $57.46
26,000 gallons /qtr
High water user $817.32 $839.32 $861.90 $887.76 $914.45
Commercial:
Low water user $823.49 $839.98 $856.78 $882.48 $909.01
296,000 gallons /qtr
Average water user $3,979.37 $4,058.98 $4,140.16 $4,264.36 $4,392.35
1,388,000 gallons /qtr
High water user $22,625.65 $23,078.18 $23,539.75 $24,245.94 $24,973.37
7,840,000 gallons /qtr
Water Capital Improvements
The capital improvement plans for the water operating and trunk funds are attached in Exhibit B, which
begins on page 14 of this report.
The timing of the following planned capital improvements includes:
• Elevated storage tank in 2016.
• Water treatment plant in 2018.
• Painting of the Arboretum water tower, which was moved back one year, to 2016.
• Painting the Lake Lucy Water Storage Stand and Pipes and Well #15 in 2013.
Water Connection Fees
We are recommending that water connection and platting fees increase 6% in 2012 and 2013, and 7%
annually thereafter. This recommendation is consistent with the prior year's report. Connection fees are
an important source of revenue needed to expand the water system and pay for the second treatment plant.
The water connection fund will maintain adequate cash to pay for expansion of the water system. The
cash balance of the trunk fund will be sufficient to provide for capital costs. We have projected two bond
issues in 2013 and 2016, which would provide financing for capital projects scheduled in those years. The
graph below shows the anticipated cash balance in the trunk portion of the fund.
0
Water Trunk Fund Cash Balances
4,000,000
3,000,000
2,000,000
1,000,000
0
2012
2013
2014
2015
2016
2017
2018
2019
End Cash Balance
2,204,752
2,365,816
2,169,072
2,419,782
2,245,439
2,906,771
1,918,216
2,089,515
Sanitary Sewer Fund
The City of Chanhassen is part of the Metropolitan Council Environmental Services (MCES) regional
treatment system. The single biggest expense in the operation of the sewer system is the MCES
disposal charge. The City does not control the annual fees established by MCES, and those fees have
increased significantly in the last three years. The Met Council is also facing pressures on operating
rates as new construction of residential and commercial has slowed in the region. If the MCES rates
are lower than anticipated in 2013 and later, the City may be able to correspondingly lower its rate
increases.
Year
MCES Total
Cost
% Increase
2013 (projected)
$1,646,000
8.29%
2012 (budget)
$1,520,000
0%
2011 (budget)
$1,520,000
10.9%
2010
$1,369,620
4.83%
2009
$1,306,564
9.59
In 2009 and 2010, the City increased the sewer rate 5% per year. There was no rate increase in 2011.
The City has been able to raise rates more slowly than MCES by postponing capital improvements and
using cash in the sewer operating fund. However, beginning in 2012, the City will need to begin
increasing rates. The prior year's study projected a 6% annual increase in 2012 and 2013, and 5%
annual increases thereafter. Currently, this analysis projects a 3% increase in 2012, a 6% in 2013 and
7% increases in 2014 and 2015. We are projecting a 5% increase in 2016 and thereafter. The delay in
the rate increase was accomplished due to the fact that actual 2010 ending cash balances were better
than projected.
We are projecting that the fixed quarterly fee of $19.45, which includes up to 6,000 gallons of sewer
discharge, should increase to $20.04. This is a 3% increase.
Sanitary Sewer Capital Improvements
The capital improvement plans for the sanitary sewer funds are attached in Exhibit B, which begins on
page 14 of this report. The timing of the following planned capital improvements has been changed:
• LS Trunk Lift Station #10 has been added for 2013.
• The vactor /sewer jetting truck has been moved from 2015 to 2016.
Sanitary Sewer Connection Fees
As with the prior year's report, we are recommending that sanitary sewer connection and platting fees
increase 4% in 2012 and annually thereafter. Connection and platting fees are an important source of
revenue needed to expand the sanitary sewer system.
Target Cash Reserves — Sanitary Sewer Funds
Adequate cash reserves are needed to accommodate cash flow needs, fund emergency repairs, and
save for larger future capital projects. The recommended rates keep the fee increases as low as
possible and still leave the City's sewer system in adequate financial health. The projected cash
balances for the sanitary sewer funds are shown in the following graphs. The target cash reserve equals
9 months of operating expenses. The target reserve is lower for sanitary sewer than water because
replacement costs are expected to be less for the sanitary sewer system than the water system.
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
ti p^" 1 p ^ ti ti 1 p ^
frarge
t Reserves (9 mos. operating expense)
) ■Ending Cash Balance
The cash balance in the operating fund has dropped below the target reserve amount because growth
has slowed and the MCES costs have increased faster than the user rates have increased. The above
graph shows the need to implement annual rate increases in 2012. Growth is anticipated to slowly
increase to 170 residential units per year in 2015. At that time, the cash in the sewer operating fund
begins to grow and is expected to reach the target reserve level by 2019.
The sewer connection fund is also expected to have adequate cash to pay for the capital costs of
expanding Chanhassen's sanitary sewer system. The graph that follows shows the projecting ending
trunk fund cash balance and capital costs. The cash balance declines in 2013 and 2018 when trunk lift
station improvements are scheduled. We are not projecting bond issues to finance these improvements.
8
Sewer Operating Fund Ending Cash Balance
3,000,000
Sewer Trunk Fund Cash Balance
2,500,000
2,000,000
lift Station
improvements
1,500,000
1,000,000
500,000
0
2
2013
2014
2015
2016
2017
2018
2019
2,645,919
2,633,701
2,729,573
980,902
1,027,736
1,293,280
1,599,839
2,033,797
221,202
847,962
■ Endng Cash
2
2013
2014
2015
2016
2017
2018
2019
2,645,919
2,633,701
2,729,573
980,902
1,027,736
1,293,280
1,599,839
2,033,797
221,202
847,962
Storm Water Fund
There is a 3% rate increase proposed for the quarterly storm water fee for 2012. The following chart
shows the proposed rates for storm water quarterly fees and for area charges for 2012 through 2016.
City of Chanhassen
Surface Water Utility Fees for Single Family Residential
(Before Credits for On -Site Ponding and Outlets)
The projected cash balances will be adequate to meet on -going storm water expenditures, which include
pond maintenance, street reconstruction projects, implementing the surface water management plan, and
acquiring land for future storm water retention. We also expect capital needs will grow as the state
develops more regulatory requirements relating to storm water run -off and contaminated storm water
ponds. The planned capital improvements are shown in Exhibit B, which begins on page 14 of this report.
Storm Water Fund Ending Cash Balance
2,500,000 -
2,000,000
1,500,000
■ Target Cash
Balance
1,000,000
500,000
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
10
2011
2012
2013
2014
2015
2016
Quarterly Fee - Single Family
$ 8.76 $
9.02 $
9.29 $
9.76 $
10.25
$ 10.76
Annual Increase in fixed storm water charge
0.0%
3.0%
3.0%
5.0%
5.0%
5.0%
Area Charges - Single Family Residential
Water Quality Fee
Fee per acre
2,540
2,667
2,800
2,940
3,087
3,242
Annual increase
0%
5%
5%
5%
5%
5%
Water Quantity Fee
Fee per acre
$ 3,640 $
3,822 $
4,013 $
4,214 $
4,424
$ 4,646
Annual increase
1 0%
5%
5%
5%
5%
5%
Total Area Charges Per Acre - Single Family
$ 6,180 $
6,489 $
6,813 $
7,154 $
7,512
$ 7,887
Annual increase - Before Credits
1 0.0%
5.0%
5.0%
5.0%
5.0%
5.0%
The projected cash balances will be adequate to meet on -going storm water expenditures, which include
pond maintenance, street reconstruction projects, implementing the surface water management plan, and
acquiring land for future storm water retention. We also expect capital needs will grow as the state
develops more regulatory requirements relating to storm water run -off and contaminated storm water
ponds. The planned capital improvements are shown in Exhibit B, which begins on page 14 of this report.
Storm Water Fund Ending Cash Balance
2,500,000 -
2,000,000
1,500,000
■ Target Cash
Balance
1,000,000
500,000
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
10
Putting It All Together: The Utility Bill
The chart below show a sample utility bill for three residential customers who use varying amounts of
water.
Projected 2012 Water and Sewer Bills
Actual
Proposed
2011
2012
Average Quarterly Residential Bill
26,000 gallons water and 26,000 gallons sewer.
Water
51.99
53.05
Sewer
95.05
97.91
Storm
8.76
9.02
Total
155.80
159.98
Increase from 2011
2.7%
Sample Bill for Lower Water User
11,000 gallons water and 8,000 gallons sewer
Water
21.01
21.45
Sewer
27.01
27.83
Storm
8.76
9.02
Total
56.78
58.30
Increase from 2011
2.7%
Sample Bill for Higher Water User
255,000 gallons water and 26,000 gallons sewer
Water
817.32
839.32
Sewer
95.05
97.91
Storm
8.76
9.02
Total
921.13
946.25
Increase from 2011
2.7%
Cash Balances and Financing Capital Improvements
The proposed rates will provide sufficient revenue to pay routine operating expenses, pay for capital
improvements to upgrade and expand the system, and provide prudent cash balances. Adequate cash
balances allow the City to:
• Weather changing circumstances without rapidly increasing rates;
• Use cash to pay for many capital improvements and reduce the frequency of borrowing; and
• Maintain its bond rating from Standard and Poor's.
The study assumes that the City will finance utility improvements if there is not sufficient cash available.
No financing is expected for storm water improvements or utility improvements made in connection with
11
street replacement projects. In practice, the City staff will continue to use the rate study's financing plan
as a guide and, in consultation with its independent financial advisor, consider when and how much debt
to incur in any given year.
Summary
The economic and real estate crisis continues to affect the City of Chanhassen. The City is facing
reduced utility revenues from connection fees and area charges, and slower revenue growth than
previously anticipated from user fees. Furthermore, the City's ability to pass along cost increases to its
customers is constrained.
The City staff and Ehlers are recommending the following to manage the financial squeeze on the utility
funds:
1. Postpone capital improvements when feasible
2. Use cash balances in the utility operating funds
3. Adopt the proposed rate increases for usage, fixed and connection fees across the City's Water,
Sewer and Storm Sewer Funds.
The City's utility funds continue to be well managed, and the City's utility rates are competitive in the
region. A chart comparing Chanhasser
that, even with a proposed increase for i
shown on Exhibit A, page 13 of this repc
Exhibit A - Rate Comparison with Other Communities
The graph below compares the proposed 2012 utility rates with the 2011 utility rates for five other metro
communities. It shows that the City of Chanhassen continues to offer relatively affordable utility rates to
its residents and businesses.
The graph assumes a quarterly, residential usage of 27,000 gallons of water and 15,000 gallons of sanitary
sewer.
Total 2011 Water. Sewer. and Storm Water Charges per Quarter for Residential Users
$200.00
$175.00
$150.00
$ 125.00
$100.00
$75.00
$50.00
$25 00
$0.00
er Q X01 _t , 5 \.
rxsy �. Gad °
r2 �
�G
GIN ❑Storm Water ❑Sender ❑Water
we e
csra
GM °
"M
13
Exhibit B — Capital Improvement Plans
Water Operating Fund
Water Trunk Fund
Water Capital Improvement Plan
Sanitary Sewer Operating Fund
Sanitary Sewer Capital Improvement Plan
Sanitary Sewer Trunk Fund
Storm Water Fund with Capital Improvements
14
Water Fund Operating Cash Flow
Assumptions:
1 Other revenue increase
2.00%
2.00%
2.00%
2.00%
2.00%
2.00%
2.00%
2.00%
2 Other expense increase
3.00%
3.00%
3.00%
3.00%
3.00%
3.00%
3.00%
3.00%
3 Investment Rate
2.00%
2.00%
3.00%
3.00%
3.00%
3.00%
3.00%
3.00%
4 User rate increase
2.00%
2.00%
3.00%
4.00%
4 00%
4.00%
400%
4.00%
6
Actual
Actual
Budget
Proposed
Projected
7
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
8 Operating Revenue
9 Water sales
2,584,114
2,332,767
2,550,000
2,533,268
2,630,302
2,732,383
2,840,586
2,952,917
3,047,863
3,145,960
3,247,309
10 New User
15,121
35,493
60,399
86,768
118,037
151,104
186,050
222,955
11 Other Income
105,056
91.867
100.000
105.000
107.100
109.242
111.427
113.655
115.928
118.247
120.612
12 Total Revenue
2,689,170
2,424,634
2,650,000
2,653,389
2,772,895
2,902,024
3,038,781
3,184,610
3,314,896
3,450,257
3,590,877
13
14 Existing Operating Expenses
15 Personal services
534,075
522,654
544,500
540,500
556,715
573,416
590,619
608,338
626,588
645,385
664,747
16 Contractual
127,689
384,349
392,300
375,100
386,353
397,944
409,882
422,178
434,844
447,889
461,326
17 Materials and Supplies
223,003
269,373
275,200
254,700
262,341
270,211
276,318
286,667
295,267
304,125
313,249
18 Repairs and Maintenance
316,039
332,326
212,000
238,200
245,346
252,706
260,288
268,096
276,139
284,423
292,956
19 Operating Expenses Treatment Plant #1
263,000
0
0
0
0
0
0
0
0
20 Operating Expenses Treatment Plant #2
300,000
309,000
21 Depreciation
1.364.010
1.492.476
1.500.000
1.500.000
1.545.000
1.811.350
1.865.691
1.921.661
1,979.311
2.038.690
2.099.851
22 Total Operating Expenses
2,827,816
3,001,178
2,924,000
2,908,500
2,995,755
3,305,628
3,404,796
3,506,940
3,612,149
4,020,513
4,141,128
23
24 Net operating income
(138,646)
(576,544)
(274,000)
(255,111)
(222,860)
(403.603)
(366,016)
(322,330)
(297,252)
(570,256)
(550,252)
25
26 Cashflow
27 Net operating income
(138,646)
(576,544)
(274,000)
(255,111)
(222,860)
(403,603)
(366,016)
(322,330)
(297,252)
(570,256)
(550,252)
28 Add Depreciation
1,364,010
1,492,476
1,500,000
1,500,000
1,545,000
1,811,350
1,865,691
1,921,661
1,979,311
2,038,690
2,099,851
29 GranVintergovemmental
30 Miscellaneous
3,843
19,801
5,000
5,000
31 Adjustments to reconcile operating income to net cash flows
(576,498)
(348,398)
32 Investment Income
60,466
49,752
80,000
50,000
35,961
73,039
68.033
87.984
113,857
116,470
137,298
33 transfers In
-
-
-
34 Transfers Out
(200,000)
(250,000)
(792,166)
0
0
0
0
0
0
35 Net Cash available for capital costs and debt
513,175
387,087
518,834
1,299,889
1,358,101
1,480,785
1,567,708
1,687,314
1,795,916
1,584,904
1,686,897
36
37 Capital Expenses for Water System Improvements
38 Bond Proceeds
2,490,000
1,318,800
1,014,300
14,900,000
39 Transfer In from Trunk Fund for Treatment Plant
-
-
-
700,000
39 Capital Improvements
(592,516)
(3,339,500)
(1,318,720)
(811,200)
(89,989)
(1,014,267)
(790,824)
(14,867,498)
(98,695)
40 Debt Service Series 2004 Bonds for Treatment Plant (50 %)
(291,477)
(290,577)
(291,927)
(290,527)
(291,377)
(291,928)
(213,420)
(213,370)
(212,920)
(214,410)
0
41 Debt Service for Series 2005 Bonds /2011 Refunding
(168,571)
(168,068)
(167,434)
(168,385)
(172,333)
0
0
0
0
0
0
42 Debt Service for Series 2011 A &B Bands
(25,323)
(257,904)
(425,893)
(480,666)
(492,916)
(495,223)
(498,914)
(718,938)
43 Future Debt: 4.0% for 15 years
47 Debt Service - 2012
0
0
0
0
0
0
0
48 Debt Service -2013
(118,614)
(118,614)
(118,614)
(118,614)
(118,614)
(118,614)
49 Debt Service - 2014
0
0
0
0
0
50 Debt Service - 2015
0
0
0
0
51 Debt Service -2016
(91,227)
(91,227)
(91,227)
52 Debt Service - 2017
0
0
53 Debt Service - 2018
(1,340,122)
54 Debt Service - 2019
55 Total cash flow from capital and related financing
(1,052,564)
(458,645)
2,030,639
(3,823,735)
(721,534)
(1,647,635)
(902,689)
(824,867)
(1,708,809)
(890,664)
(1,667,596)
56
57 Net cash flow
(539,389)
(71,558)
2,549,473
(2,523,847)
636,567
(166,849)
665,019
862,447
87,107
694,241
19,300
58 Beginning Cash Balance
2,383,374
1,843,985
1,772,426
4,321,900
1,798,053
2,434,620
2,267,770
2,932,789
3,795,236
3,882,343
4,576,584
59 Ending Cash Balance
1,643,985
1,772,426
4,321,900
1,798,053
2,434,620
2,267,770
2,932,789
3,795,236
3,882,343
4,576,584
4,595,884
60
61 Target Operating Reserve (6 months of operating expenses)
754,351
712,000
704,250
725,378
747,139
769,553
792,640
816,419
990,911
1,020,639
62 Target Amount to Fund 15% of Accumulated Depreciation
3,092,496
3.317.496
3.542.496
3.774.246
4,045.948
4.325,802
4.614.051
4.910.948
5,216.751
5,531.729
63 Total Target Reserves
0
3,846,847
4,029,496
4,246,746
4,499,623
4,793,087
5,095,355
5,406,691
5,727,366
6,207,663
6,552,368
64 Actual as a % of Target Reserves
#DIV /0!
46%
107%
42%
54%
47%
58%
70%
68%
74%
70%
65
66 Combined Cash Balance (operating and trunk fund)
5,592,524
3,880,421
6,305,019
3,781,172
4,800,435
4,436,842
5,352,570
6,040,675
6,789,114
6,494,800
6,685,399
City of Chanhassen
Water Trunk Fund Cash Flow
Assumotions
1 Other revenue increase
2.00%
2.00%
2.00%
2.00%
2.00%
2.00%
2.00%
2.00%
2 Other expense increase
3.00%
3.00%
3.00%
3.00%
3.00%
3.00%
3.00%
3.00%
3 Investment Rate
2.00%
2.00%
3.00%
3.00%
3.00%
3.00%
3.00%
3.00%
4
5
6
Actual
Budget
Proposed
Projected
7 Cash Flow Statement
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
8 Revenue
9 Hook -up Fees
649,420
635,000
700,000
746,242
935,922
1,085,474
1,488,163
1,600,353
1,712,377
1,841,423
10 Deferred Hook -up Fees
0
0
0
0
0
0
0
0
0
11 Special Assessments
103,538
12 Total Revenue
752,958
635,000
700,000
746,242
935,922
1,085,474
1,488,163
1,600,353
1,712,377
1,841,423
13
14
15 Capital Improvements
16 Bond Proceeds
1,321,000
2,000,000
17 Capital Improvements
(1,790,799)
(185,000)
0
(1,320,800)
(502,944)
(219,348)
(3,041,632)
(133,832)
(1,910,632)
(144,752)
18 Transit station transfer out
19 Transit station interfund loan
20 Transit station repayment
21 Debt Service - Series 1998C and 1999A
0
0
22 Debt Service - Series 2004
(290,577)
(291,927)
(290,527)
(291,377)
(291,928)
(213,420)
(213,370)
(212,920)
(214,410)
0
23 Debt Service - 2005
(312,127)
(310,949)
(312,716)
(320,047)
0
0
0
0
0
0
24 Debt Service - 2011A & B Bonds
0
(13,617)
(289,957)
(348,255)
(361,285)
(360,937)
(364,399)
(584,225)
25 Future Debt: 4.0% over 15 years
26
27
28
29 Debt Service - 2012
30 Debt Service - 2013
(118,812)
(118,812)
(118,812)
(118,812)
(118,812)
(118,812)
31 Transfer Out to Operating for Water Treatment
0
0
(700,000)
32 Debt Service - 2014
0
0
0
0
0
33 Debt Service - 2015
0
0
0
0
34 Debt Service - 2016
(179,882)
(179,882)
(179,882)
35 Debt Service - 2017
0
0
36 Debt Service - 2018
0
37 Debt Service - 2019
38 Debt Service - 2020
39 Cashflow from Capital and Financing
(2,393,503)
(787,876)
(603,243)
(624,841)
(1,203,641)
(899,836)
(1,735,100)
(1,006,383)
(2,788,136)
(1,727,671)
40
41 Investment Income
-
28,000
-
39,662
70,974
65,072
72,593
67,363
87,203
57,546
42
43 Annual Net Cash Flow
(1,640,545)
(124,876)
96,757
161,064
(196,744)
250,710
(174,343)
661,332
(988,555)
171,298
44
45
46 Beginning Cash Balance
3,748,539
2,107,995
2,107,995
2,204,752
2,365,816
2,169,072
2,419,782
2,245,439
2,906,771
1,918,216
47 Ending Cash Balance
2,107,995
1,983,119
2,204,752
2,365,816
2,169,072
2,419,782
2,245,439
2,906,771
1,918,216
2,089,515
City of Chanhassen, Minnesota
Water Trunk Fund
Capital Improvements Paid By Hook -Up Fees
WATER TRUNK FUND
Project
2012
2013
2014
2015
2016
2017
2018
2019
2020
Lyman Blvd.
Improvements
ST -003
$ 400,000
Arboretum Watermain
W -020
Loop (Lyman - Bluff
Creek Blvd.) (12 ")
Well 4Improvement
Pressure Reducing
Stations
W -027
$ 65,000
$ 75,000
$ 200,000
Raw Water Collection
System
W -030
TH 101/2010 MUSA
Trunk Watermain
ST 028
$ 570,000
Water Treatment Phase II
costs in operating CIP
Improvements (50% of
total costs)
Well 14Improvements
W -043
Well 15
W -048
$ 700,000
Well 16
Well 17
$ 1,200,000
1 Million gal Elevated
Storage Tank Low Zone
W -046
$ 2,600,000
2015 MUSA Area Trunk
Watermain (12 " -16 ")
$ 110,000
$ 110,000
$ 110,000
High zone service pump
W 050
$ 120,000
Total
$
$ 1,270,000
$ 465,000
$ 195,000
$ 2,600,000
$ 110,000
$ 1,510,000
$ 110,000
$
Inflated Cost Beginning
in 2013 4%
$
$ 1,320,800
1 $ 502,944
$ 219,348
$ 3,041,632
$ 133,832
$ 1,910,632
$ 144,752
$
City of Chanhassen, Minnesota
Water Operating Fund
Capital Improvements Paid By User Rates
WATER OPERATING
2012
2013
2014
2015
2016
2017
2018
2019
2020
Sewer Bobcat Snow
Accessories/Equipment
EQ- 031062,116
$ 54,500
$ 18,000
$ 17,000
$ 25.000
Public Works Facility
Improvements
MB -003
Excavator /skid loader
EQ 091,097,101
$ 30,000
Software upgrades
EQ 108
Vactor sewer/jetting truck
EQ 110
$ 100,000
Downtown Transit Station Site
Imp.
ST -021
W. 76th Street Tower Painting
W -015
Lake Lucy Water Storage Stand
Pipe Painting
W -041
$ 550,000
Melody Hill Water Tower
Painting
W -040
Repainting Arboretum Water
Tower
$ 600,000
Water Treatment Phase 11
W -037
$
$ 11,000,000
Watermain Replacement with
street projects
W -024
$ 700,000
$ 700,000
$ 700,000
$ 700,000
$ 700,000
750,000 gal Elevated Storage
Tank High Zone
W -042
$ 2,490,000
Well 4Improvement
W -025
Well 15
W -048
$ 700,000
Well Rehabilitation
W -032
$ 45,000
$ 50,000
$ 50,000
$ 50,000
$ 50,000
$ 50,000
$ 50,000
$ 50,000
Meter Radio Replacements
W -054
$ 50,000
Total
$ 3,339,500
$ 1,268,000
$ 750,000
$ 80,000
$ 867,000
$ 650,000
$ 11,750,000
$ 75,000
$ 750,000
Inflated Cost Beginning in 2013 4%
$ 3,339,500
$ 1,318,720
$ 811,200
$ 89,989 1
$ 1,014,267
1 $ 790,824
$ 14,867,498
$ 98,695
$ 1,026,427
City of Chanhassen Utility Rate Study
Sewer Operating Fund
Projected Cash Flows
1 Assumptions:
2
User fee rate increase
3
Other revenue increase
4
Other expense increase
5
MCES increase
6
Investment Earnings
7
V
2010
2011
9
Actual
Budget
Proposed
0
0
0
Projected
0
0
0
10 Cash Flow Statement
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
11 Operating Revenue
3.00%
42
Capital Improvements
1( 6.592)
18( 9,073)
334 500
39( 3.120)
38L 6,131)
78 740
75{ 1.049)
12 Sewer Charges
2,308,928
2,350,000
2,410,409
2,578,305
2,783,687
3,008,741
3,190,884
3,351,493
3,418,312
3,486,132
13 Penalties and other
56,430
60,000
60,000
61,200
62,424
63,672
64,946
66,245
67,570
68,921
14 Total operating revenue
2,365,358
2,410,000
2,470,409
2,639,505
2,846,111
3,072,413
3,255,830
3,417,738
3,485,882
3,555,053
15
504,296
(81,105)
627,452
177,574
571,358
46
Beginning Cash Balance
820,569
907,474
703,091
16 Operating Expenses
660,309
735,367
1,239,663
1,158,558
1,786,011
1,963,584
47
Ending Cash Balance
907,474
703,091
17 Personal services
343,400
344,500
352,500
363,075
373,967
385,186
396,742
408,644
420,903
433,531
18 Contractual
379,372
142,300
134,500
138,535
142,691
146,972
151,381
155,922
160,600
165,418
19 Materials and Supplies
43,684
39,500
38,600
39,758
40,951
42,179
43,445
44,748
46,090
47,473
20 Repairs and Maintenance
129,071
117,000
112,000
115,360
118,821
122,385
126,057
129,839
133,734
137,746
21 MCES Disposal Fees
1,386,052
1,520,000
1,520,000
1,646,000
1,728,300
1,814,715
1,905,451
2,000,723
2,100,759
2,205,797
22 Depreciation
963,849
975.000
975,000
1,004,250
1.034.378
1,065,409
1,097,371
1,130.292
1,164,201
1,199,127
23 Total Operating Expenses
3,245,428
3,138,300
3,132,600
3,306,978
3,439,107
3,576,847
3,720,446
3,870,169
4,026,288
4,189,092
24
25 Net Operating Income
(880,070)
(728,300)
(662,191)
(667,473)
(592,997)
(504,433)
(464,617)
(452,431)
(540,407
(634,039)
26
27 Cashflow
28 Net operating income
(880.070)
(728,300)
(662,191)
(667,473)
(592,997)
(504,433)
(464.617)
(452.431)
(540,407)
(634,039)
29 Add Depreciation
963,849
975,000
975,000
1,004,250
1,034,378
1,065,409
1,097,371
1,130,292
1,164,201
1,199,127
30 Operating Grant and Misc.
6,222
31 Other changes
(7,082)
1,000
1,200
32 Investment Income
42,602
50,000
20,000
14,052
19,809
22,061
37,190
34,757
53,580
58,908
33 Adjustments to reconcile operating income to r
27,976
34 Transfers In
35 Transfers Out for Street Reconstruction
5( 0..000)
31( 3,010)
0
0
0
0
0
0
36 Cashflow from Operations and Investing
103,497
(15,310)
334,009
350,829
461,190
583,036
669,944
712,618
677,375
623,995
37
38 Debt and Capital Expenditures
39 Existing Debt
40
New Debt Service (15 years at 5.5 %)
0
0
0
0
0
0
0
0
0
0
41
Bond Proceeds
2.00%
2.00%
3.00%
3.00%
3.00%
3.00%
3.00%
3.00%
3.00%
3.00%
42
Capital Improvements
1( 6.592)
18( 9,073)
334 500
39( 3.120)
38L 6,131)
78 740
75{ 1.049)
8I 5,166)
499 801
5( 2.637)
43
Total debt and capital expenses
(16,592)
(189,073)
(334,500)
(393,120)
(386,131)
(78,740)
(751,049)
(85,166)
(499,801)
(52,637)
44
45
Cash Flow after Capital Expenditures
86,905
(204,383)
(491)
(42,291)
75,059
504,296
(81,105)
627,452
177,574
571,358
46
Beginning Cash Balance
820,569
907,474
703,091
702,600
660,309
735,367
1,239,663
1,158,558
1,786,011
1,963,584
47
Ending Cash Balance
907,474
703,091
702,600
660,309
735,367
1,239,663
1,158,558
1,786,011
1,963,584
2,534,943
3.00%
6.00%
7.00%
7.00%
5.00%
5.00%
5.00%
5.00%
0.00%
2.00%
2.00%
2.00%
2.00%
2.00%
2.00%
2.00%
3.00%
3.00%
3.00%
3.00%
3.00%
3.00%
3.00%
3.00%
5.00%
5.00%
5.00%
5.00%
5.00%
5.00%
5.00%
5.00%
2.00%
2.00%
3.00%
3.00%
3.00%
3.00%
3.00%
3.00%
City of Chanhassen Utility Rate Study
Sewer Trunk Fund
Projected Cash Flows
1 Assumptions:
2 Investment Rate
3 Rate Increases
2.00% 2.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00%
0% 4% 4% 4% 4% 4% 4% 4% 4%
4
244,220
5
210,000 250,738 260,767 319,056 355,520 477,212 498,864 518,819
6
37,901
7
0
8
Sewer Hook -up Fee Revenue`
9
Net Special Assessment Revenue
10
Total Revenue
10
(98.695)
11
Debt and Capital Expenditures
12
Transfers in from operating fund
13
Bond Proceeds
14
Outstanding Sewer Debt Payments
15
Capital Improvements
16
Transit station transfer out
17
0
18
Future Debt: 4% over 10 years
19
Debt Service - 2008
20
Debt Service - 2009
21
Debt Service - 2010
22
Debt Service - 2011
23
Debt Service - 2012
24
Debt Service - 2013
25
Debt Service - 2014
26
Debt Service - 2015
27
Debt Service - 2016
28
Debt Service - 2017
29
Debt Service - 2018
30
Debt Service - 2019
Actual Actual Budget Proposed Projected
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
333,047
244,220
210,000
210,000 250,738 260,767 319,056 355,520 477,212 498,864 518,819
11.754
37,901
15.000
0
344,801
282,121
225,000
210,000 250,738 260,767 319,056 355,520 477,212 498,864 518,819
(144,996) (139,008) (69,718) (71,628)
0
(144,996)
0
0
0
0
0
(200,000) (75,000)
(2,054,000)
(243,360)
(84,365)
(87,739)
(91,249)
(2,372,473)
(98.695)
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
(12,218)
95,872
(1,748,671)
0
0
0
0
0
426,760
36
0
0
0
0
0
0
0
2,257,792
2,502,806
2,645,919
2,633,701
2,729,573
980,902
0
0
1,599,839
2,033,797
221,202
38
Ending Cash Balance
2,502,806
2,645,919
0
31
Total capital expenses
(144,996)
(139,008)
(269,718)
(146,628)
(2,054,000)
(243,360)
(84,365)
(87,739)
(91,249)
(2,372,473)
(98,695)
32
33
Investment Income
45,209
0
32,500
32,500
54,591
29,427
30,832
38,798
47,995
61,014
6,636
34
35
Cash Flow
245,014
143,113
(12,218)
95,872
(1,748,671)
46,834
265,524
306,578
433,958
(1,812,595)
426,760
36
37
Beginning Cash Balance
2,257,792
2,502,806
2,645,919
2,633,701
2,729,573
980,902
1,027,736
1,293,260
1,599,839
2,033,797
221,202
38
Ending Cash Balance
2,502,806
2,645,919
2,633,701
2,729,573
980,902
1,027,736
1,293,260
1,599,839
2,033,797
221,202
647,962
City of Chanhassen, Minnesota
Sewer Trunk Fund
Capital Improvements Paid By Hook -Up Fees
SEWER TRUNK FUND
. Project
2012
2013
2014
2015
2016
2017
2018
2019
2020
Inflow and Infiltration
SS -012
$ 75,000
$ 75,000
$ 75,000
$ 75,000
$ 75,000
$ 75,000
$ 75,000
$ 75,000
$ 75,000
Public Works Facilit
Dell Rd /77th Stret
Forcemain Replacement
SS -018
5 Trunk Lift Station and
Forcemain
SS -020
$ 1,900,000
Sub - District LB -1 Trunk
$ 600,000
Sub - District LB -1 Trunk
Lift Station
$ 1,200,000
Lyman Blvd
Improvements
I ST -003
$ 150,000
Total
$ 75,000
$ 1,975,000
$ 225,000
$ 75,000
$ 75,000
$ 75,000
$ 1,875,000
$ 75,000
$ 75,000
Inflated Cost Beginning
in 2013 4%
75,000 1
$ 2,054,000
$ 243,360
$ 84,365 1
$ 87,739
$ 91,249
$ 2,372,473
$ 98,695
$ 102,643
City of Chanhassen, Minnesota
Sewer Operating Fund
Capital Improvements Paid By User Rates
SEWER OPERATING
2012
2013
2014
2015
2016
2017
2018
2019
2020
Inflow and Infilltration
EQ -031 /
Light Duty Trucks/Equipment EQ -062
$ 34,500
$ 18,000
$ 17,000
$ 30,000
$ 55,000
$ 30,000
Excavator /skid loader EQ 091,097,101
$ 17,000
$ 30,000
Software upgrades EQ 108
Vactor sewer/jetting truck EQ 110
$ 325,000
Public Works Facility
Improvements MB -003
Sewer Replacement SS -014
$ 300,000
$ 300,000
$ 300,000
$ 300,000
$ 300,000
Lift Station Maintenance SS -017
$ 40,000
$ 40,000
$ 40,000
$ 40,000
$ 40,000
$ 100,000
Lift Station #10 Improvements SS -023
$ 360,000
Downtown Transit Station Site
Imp. ST -021
Total
$ 334,500
$ 378,000
$ 357,000
$ 70,000
$ 642,000
$ 70,000
$ 395.000
$ 40,000
$ 430,000
Inflated Cost Beginning in 2013 4%
334,5001
393,120 1
386, 311
78,740
751,049
85,1661
499,801
52,6371
588,485
Surface Water Management Fund - Cash Flow Statement
Assumptions:
1 Quarterly fee rate increase
3.00%
3.00%
5.00%
5.00%
5.00%
5.00%
5.00%
5.00%
2 Other revenue increase
2.00%
2.00%
2.00%
2.00%
2.00%
2.00%
2.00%
3 Other expense increase
3.00%
3.00%
3.00%
3.00%
3.00%
3.00%
3.00%
4 Investment Rate
2.00%
2.00%
2.00%
2.00%
2M%
2.00%
2.00%
5
6 Cash Flow Statement
Audited
Budget
Budget _
Projected
7
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
8 Operating Revenue
9 Quarterly charges
526,660
520,000
520,000
541,868
577,654
616,714
658,235
702,367
749,532
799,657
10 Penalties and other income
12,028
14,000
14,000
14,280
14,566
14,857
15,154
15,457
15,766
16,082
11 Refunds /Reimbursements
0
0
0
0
0
0
0
0
0
12 Total Revenue
538,688
534,000
534,000
556,148
592,220
631,571
673,389
717,824
765,298
815,739
13
14 Existing Operating Expenses (excl. depreciation)
15 Personal services
226,050
176,900
175,400
180,662
186,082
191,664
197,414
203,337
209,437
215,720
16 Contractual
191,215
188,700
163,900
168,817
173,882
179,098
184,471
190,005
195,705
201,576
17 Materials and Supplies
31.092
19.700
26 000
26,780
27.583
28.411
29263
30141
31.045
31977
18 Total Operating Expenses
448,357
385,300
365,300
376,259
387,547
399,173
411,148
423,483
436,187
449,273
19
20 Net operating cash flow
90,331
148,700
168,700
179,889
204,673
232,398
262,241
294,341
329,111
366,466
21
22 Nonoperating Revenue
23 Water Quality Fees
156,897
157,324
180,487
189,512
198,987
226,645
237,977
24 Water Quantity Fees
131,704
84 877
122,841
154.040
144,696
149.195
137,348
25 Subtotal Area Charges
111,774
100,000
30,000
288,601
242,201
303,328
343,551
343,684
375,841
375,326
26 Net Special Assessments
27 Investments Income
21,995
60,000
22,000
21,790
24,128
18,720
25,178
24,184
34,237
33,610
28 Intergovernmental revenue / Other
7 774
300
15,000
0
0
0
0
0
0
0
29 Rerconciliation of Revenue to Cashflow
30 Total Non-Operating Revenue
141,543
160,300
67,000
310,391
266,330
322,048
368,730
367,868
410,078
408,936
31
32 Capital Improvements
33 Transit Station Area Improvements
34 Kerber park pond slope stabilization
57,500
35 Street Improvement Projects
400,000
400,000
400,000
400,000
36 Equipment (Leaf Vac, Excavator, Vactor)
30,000
50,000
37 TH 101 /Pleasant View Rd
50,000
38 Lower Bluff Creek Sediment Improvements
92,500
67,500
45,000
35,000
39 Lake Minnewashta Outlet
30,000
40 Landings Court Storm Water Pond Imp
70,000
41 Property Acquisition
75,000
75,000
75,000
75,000
75,000
75,000
75,000
75,000
42 Stormwater Pond Improvements
40,000
40,000
40,000
40,000
40,000
40,000
40,000
40,000
43 LID Implementation Project
10,000
10,000
10,000
10,000
10,000
10,000
10,000
10,000
44 Lake Susan shoreline stabilization
15,000
45 Cranes Vineyard Creek
45,000
46 TH5 Trail Alignment SWMP
47 Bluff Creek Drive Drainage Improvement
80,000
48 Total Capital Improvements - today's costs
212,385
0
647,500
362,500
672,500
200,000
560,000
125,000
575,000
125,000
49 Inflation Rate on Capital Improvements
0%
0%
0%
3%
5%
5%
5%
5%
5%
5%
50 Inflated Capital Improvements
212,385
0
647,500
373,375
741,431
231,525
680,684
159,535
770,555
175,888
51 Bond Proceeds
52 Debt Service
53 Transfer In
54 Transfer Out
(805,000)
55 Non - operating cash flow
(875,842)
160,300
(580,500)
(62,984)
(475,102)
90,523
(311,954)
208,332
(360,477)
233,048
56
57 Net Increase(decrease)in cash
(785,511)
309,000
(411,800)
116,905
(270,428)
322,921
(49,713)
502,674
(31,366)
599,514
58 Beginning Cash Balance
1,977,824
1,192,313
1,501,313
1,089,513
1,206,418
935,989
1,258,910
1,209,197
1,711,871
1,680,505
59 Ending Cash Balance
1,192,313
1,501,313
1,089,513
1,206,418
935,989
1,258,910
1,209,197
1,711,871
1,680,505
2,280,019