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C. Utility Rate Study
CITYOF CHANHASSEN 7700 Market Boule,/ard PO Box 147 Ohanhassen Mi',155317 Adminislralion Phone 952227 !100 Fax 9522271110 Building Inspections P, ore 932 22~ 11~0 Fax: 952227 1190 Engineerin~ Phone 9522271160 Fax: 952 227 1170 Finance Phone: 952227 I! 40 Fax 952227 1110 Park & Recreation Pho~/e: 952 2271120 Fax: 9522271110 Recrea!ion Center 2310 Coulter Boulevard Phones: 9522271400 Fax: 952227 1404 Planning & Natural Resources Phone; 952 227 1!30 Fax: 9522271110 Public Works 1591 Pa¢ Road Phone: 9522271300 Fax: 9522271310 Senior Cenler Pho'~e 952 2271125 Fax: 952.2271110 Web Site crlanilasSerl r, MEMORANDUM TO: FROM: DATE: SUBJECT: Mayor City Council Bruce M. DeJong, Finance Director January 6, 2004 Utility Rate Study The Utility Department has not raised water or sewer rates for many years, and our rates are not fully covering the cost of providing service to our utility customers. City staff has been involved in a comprehensive look at the utility costs, including operations, existing debt service, and new capital outlays along with appropriate methods of financing the improvements. With Ehlers staff, we have set up a comprehensive look at what rates should be raised to in order to finance the operating costs and the anticipated capital improvements. The rates recommended increase an average of 7.5% for a typical resident. That means an increase of $9.77 per quarter which provides $7.12 for water treatment and operations and $2.65 for sewer costs. Connections fees need to be increased on the water side by 50% to fund the full cost of development related system improvements. Background The water rates were last raised in 1997. The sewer rate was last increased in 1992. Those rates were quite high in comparison other communities at the time, but were not explicitly based on the expected costs of our system as far as staff can determine. Combined with connection charges, these rates did generate a healthy fund balance in the utility fund. That fund balance has been declining with recorded deficits for the past two years. This rate study is necessary to estimate costs of completing the water and sewer systems to serve new development in the 2005 MUSA area and other areas of the city. We also need to adequately cover our operating costs on an annual basis. In analyzing the rates, we looked at four separate revenue streams. We have divided the utility area into water operations, water connection fees, sewer operations, and sewer connection fees. Because the future needs are different in each of these functions, they have to be calculated individually in order to determine the cost recovery required. Utility Rate Study January 9, 2004 Page 2 The difficulty in preparing this study comes from the large number of assumptions that have to be made about usage, connections and development patterns. This study has incorporated elements from our CIP, AUAR study, Comprehensive Plan, debt study, and the water treatment discussions. In preparing this estimate, we have had to make educated guesses about housing density in the 2005-2020 MUSA areas, household size, and usage patterns for those residents assuming that they will use water at the same rate as existing households. We have had to estimate our water loss (difference between gallons pumped and gallons billed) which has been rather large, but hopefully will come down now that most of the old meters have been replaced. The other variables that have a huge impact on this decision have to do with water treatment. Last Monday, there were discussions regarding the size, number, and timing of possible treatment plants that will greatly affect the rates that our model predicts to be necessary to cover our costs. Staff believes there is strong sentiment on the Council to undertake water treatment, so it has been included in two different ways. The first alternative is for a 4.3 million gallon treatment facility located in the Lotus well field area. This assumes no land purchase is required, although it may have to be sited on the Redi-Mix site, which will reduce the potential sale amount, or on existing park land that may cause disruption in a neighborhood. The amount estimated in the CIP is $4.5 million. This figure comes from a rough rule of thumb of $1 per gallon of treatment capacity but covers only actual construction costs. A more likely range was estimated by Steve Nelson of SEH at about $5.5 million for both the first and second plants including all engineering, contingency, administrative and bonding costs. The second alternative includes two plants or one larger plant for ultimate system capacity being constructed in 2004 - the original estimate of $4.5 million and a second which requires land purchase and costs $6.5 million. While there is no magic involved in these estimates there is considerable chance that they may vary significantly in cost from these estimates depending on their type, location, and proximity to existing wells. Results We have developed a model that lays out operating and capital costs for both water and sewer. With the assumptions inherent in the model, we have estimated the needed cash balances in the utility funds. The model shows that a rate increase of $0.12 per thousand gallons is necessary to cover the costs of water treatment capital costs and operations. The sewer fees need to increase $0.13 per thousand gallons in order to fully cover the cost of our sewer disposal fees to the Utility Rate Study January 9, 2004 Page 2 Metropolitan Council Environmental Services division (MCES) and sewer system replacement costs. We also need to increase the cost that new connections pay for when they hookup. Those fees for water need to increase by 50% if they are to ultimately cover the cost of the system that we will be building to handle the full demand created by new development. If we were to build both plants at one time the rates would need to increase increase an additional $0.09 per thousand gallons raising the water increase from 9% to 16%. Staff questions why we would do this since the wells that would supply the necessary additional water would not be in service for at least six more years according to our CIP projections. That would mean financing the improvements well ahead of the time that they could be used. These estimates are detailed on the accompanying sheets. Summary Staff recommends that the City Council review the rate study and increase the water and sewer rates and connection fees to fully cover the cost of providing current and future services. Attachments: Survey of Residential Costs Water and Sewer operating and capital cash flows Chart Water Sewer Per Per Month Month / 7,500 / 7,500 City Gal. Gal. Total Softened? MAPLE GROVE $6.75 $15.63 $22.38 no EAGAN $10.17 $13.89 $24.06 no BLOOMINGTON $14.40 $9.99 $24.39 yes COON RAPIDS (2002) $8.60 $15.88 $24.48 no PLYMOUTH $7.32 $18.68 $25.99 no ST. LOUIS PARK $8.82 $17.42 $26.24 no MI N N ETON KA $11.21 $16.88 $28.08 no EDEN PRAIRIE $11.46 $16.71 $28.17 yes WHITE BEAR LAKE $8.40 $20.99 $29.39 yes EDINA $10.27 $19.70 $29.96 no ROS EVl LLE $17.06 $13.29 $30.35 yes APPLE VALLEY $12.71 $18.33 $31.04 no CHANHASSEN Proposed $10.65 $20.48 $31.13 no RICHFIELD $13.55 $18.58 $32.13 yes BURNSVILLE $15.83 $21.02 $36.85 no PRIOR LAKE $15.00 $24.38 $39.38 no ST. CLOUD $25.29 $14.10 $39.39 yes ST. PAUL $15.20 $24.19 $39.39 yes SAVAGE (2002) $19.38 $20.20 $39.58 no MINNEAPOLIS $21.09 $32.79 $53.89 yes Page 1 Average User Water treatment Water operating/replacement Sewer Disposal Fees Sewer system replacement costs Total Increase 2004 $3.25 $1.03 $2.12 $0.53 6.93 6.93 Breakdown of 2004 Quarterly Rate Increase for Average Utility User [] Water treatment $0.53 $2.12 $3.25 $1.03 ""Water operating/replacement [] Sewer Disposal Fees [] Sewer system replacement costs City of Chanhassen Projected Water and Sewer Bills 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Avera.qe Quarterly Residential Bill Assumes quarterly use of 30,000 gallons water and 19,350 gallons sewer. Sewer 52.91 52.91 55.56 Water 40.00 40.00 44.28 Total 92.91 92.91 99.84 Combined Fee Increase 0.0% 0.0% 7.5% 58.34 60.67 63.10 65.62 68.25 70.97 73.10 75.30 77.56 46.72 49.29 51.50 53.82 56.24 57.37 58.52 59.69 60.88 105.05 109.96 114.60 119.44 124.49 128.34 131.62 134.98 138.44 5.2% 4.7% 4.2% 4.2% 4.2% 3.1% 2.6% 2.6% 2.6% Sample Bill for Lower Water User Assumes quarterly use of 21,000 gallons water and 15,000 gallons sewer Sewer 48.53 48.53 50.96 Water 27.30 27.30 29.76 Total 75.83 75.83 80.72 Combined Fee Increase 0.0% 0.0% 6.4% 53.51 55.65 57.87 60.19 62.60 65.10 67.05 69.07 71.14 31.39 33.12 34.61 36.17 37.80 38.55 39.32 40.11 40.91 84.90 88.77 92.48 96.36 100.39 103.65 106.38 109.17 112.05 5.2% 4.6% 4.2% 4.2% 4.2% 3.2% 2.6% 2.6% 2.6% Total Fund Balances 9,073,491 7,703,245 8,579,008 7,299,909 7,809,688 8,242,463 8,516,289 6,972,827 6,913,271 7,425,434 7,395,106 Hook-up Fees Per Unit Met Council SAC Fee 1,275 1,350 1,425 1,500 1,575 1,650 1,725 1,800 1,875 1,950 2,025 City Sewer Hook-up Fee 1,458 1,458 1,458 1,458 1,458 1,021 1,021 1,021 1,021 1,021 1,021 City Water Hook-up Fee 1,876 2,814 2,955 3,102 3,258 3,974 4,173 4,382 4,601 4,831 5,072 Total 4,609 5,622 5,838 6,060 6,291 6,645 6,919 7,202 7,496 7,801 8,118 Percent Increase 22.0% 3.8% 3.8% 3.8% 5.6% 4.1% 4.1% 4.1% 4.1% 4.1% City of Chanhassen Water System Capital Improvement Plan Capital Costs To Be Supported By Connection Fees (City estimates of future costs) Proiect 2003 2004 2005 ~ 2006 ~ 200~7 ~ 2008 2009 2010 2011 2012 201~3 2014 2015 2016 2017 2018 2019 2020 Minnewashta Loop 300,000 iTotal project cost =$600k with UofM paying $300k) TH 212 Utilities 5,000 155,000 ($925k total with S770k to be assessed) TH 41 Watermain 20,000 100,000 S200k total with S100k to be assessed) Arboretum Watermain 20,000 200,000 Public Works Expansion 500,000 Well 9 70,000 900,000 Well 10 72,000 900,000 Well 11 75,000 900,000 Well 12 77,000 900,000 Well 13 80,000 900,000 Well 14 85,000 900,000 Water Tower 2,810,000 Phase II Treatment (5 MGD) 680,000 6,000,000 Raw Water Collection System 500,000 90,000 100,000 50,000 Pressure Reducing Station 4 50,000 Pressure Reducing Station 7 45,000 Pressure Reducing Station 8 45,000 Pressure Reducing Station 5 45,000 Pressure Reducing Station 10 55,000 Pressure Reducing Station 9 ~ ~ 55,000 Trunk Main Oversizing ~1 18M total with S1 045M to be assessed 135,000 10,000 ($108k total with S98k asses 100,000 50,000 '$1 1M total with $1 OM to be assesse¢ 100,000 Total Inflated CIP Expense 70,000 ! 1,225,000I 407,680 1,925,248 911,140 8,656,953I 93,6821,328,585 3,881,999109,486I 11'423'312 125,821 1,624,12480,052 0 0 0 103,014 Inflation Rate 4.0°/4 g ~eng'water treatmentkulility ra~e study jan 5 xJs Trunk Fee Supported CIP h'9/2004 33~ PM City of Chanhassen Capital Improvement Plan Capital Costs To Be Supported By Utility Rates (City estimates of future costs) Proiect 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Study Well 4 Options 50,000 Watermain Replacement 152,000 160,000 165,000 170,000 175,000 Paint W. 76th St. Tower 80,000 Light Duty Trucks 34,000 34,000 Lotus Pressure Plant 4,500,000 Well #2 Inspection 30,000 Well #3 Inspection 35,000 Well #9 Inspection 40,000 Well #10 Inspection Well #11 Inspection Well #12 Inspection Paint Melody Hill Tower 400,000 Paint Hwy 41 Tower 500,000 Paint Lake Lucy Tower 750,000 Total 4,846,000 35,000 194,000 0 165,000 400,000 670,000 750,000 215,000 0 Total Inflated ClP Expense 4,846,000 36,400 209,830 0 193,027 486,661 847,764 986,949 294,242 0 Inflation Rate 4.0o/~ g:\eng\water treatment\utility rate study jan 5.xls 1/9/2004 Utility Rate Supported CIP 3:31 PM City of Chanhassen Water Trunk Fund Cash Flow Water Hook-up Fee Increases 50% in 2004 Other expense ~ncr~se Inyestm~t Rate 2 O0% 2 0O% 2 00% 2 00% 2 00% 2 00% 2 00% 2 00% 2 00% 2 0O% 2 00% 2 00% 2 00% 2 0O% 2 00% 2 00% 2 00% 2 9O% 3 00% 5 00% 3 00% 3 00% 3 00% 3 00% 3 00% 3 00% 3 00% 3 00% 3 00% 3 ~% 3 00% 300% 3 00% 3 00% 3 00% 3 O9% 3 00% 3 00% 3 00% 3 00% 3 00% 3 00% 3 00% 3 00% 3 O0% 3 00% 3 00% 3 00% 3 00% 3 00% 3 O0% 3 00% 3 00% 3 00% 7 Cash Plow Statement 80peraling Revenue 2003 20O4 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 20182019 2020 9 HooK-up Fees 10 Are~ Charges 10 Total Rev~ue 12 Operating Exposes 16 Capital Improvements 17 Existing Debt Se~ice 18 System Completion- Paid With Cash 19 Debt Se~ice Treatml Plant and 2008 [mprvts 20 Debl Service - Water Tower and 2011 Improv~eCds 22 Total Capital Improvements 23 24 Investment Income 25 25 Annual Net Cash Flow 27 28 29 Beginning Cash Balance 711,790 519,6520492,450 0 1,19O,654 0 946243 0 993,555 0 ~.212.137 0 1 293 608 0 1358289 0 1 426 203 0 1497,513 0 1,572,389 0 1.597750 0 1,677,638 0 I 761 520 0 1849,596 0 1 942,075 0 339,883 0 3568506 711,79O 5~9,652 492,4501,196554 946243 993,5551,212,137 1,293,608 1,358,289 1,426,203 L497 5~31,572,389 159775O 1.677,638 1,761 520 1,849,596 I 942075 339,863 356.856 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 711790 5~9,652 492.4501.~9O,654946.243 993,5551,212,t37 1,293 808 1,358,289 1,426,203 1,497,513 1,572,389 1,597,750 1 677,638 1,761,520 ! 849,596 ~ 942,075339863 356856 32 ................ 5 .... 603 ....... 32 ....... 2r339 ...... 00 0 0 0 0 502 00 00 0 104 7O,OOO 1,225.0004O768O1,925.248911 140 0 93.6821328,585 109,4861,423,312125 82~1,624,12480.0 0 1030 952,240 952,240 952,24O 95224O 952,24O 952,24O 952,240 952,240 952,24O 952,240 952,240 952 24O 514851 5~4,851 514,851 514,851 5~4,851 514,851 514,85~ 514 85~ 5~4,851 5~4,851 395,5401,545,038726,831 2,242,851 1,231,331 1,278,935 1,368,261 2,485,825 1,467,091 1,576,577 2,890,403 1,592,912 3,091,215 1,547,143 1,467,091 1,467,091 1,467,091617,865 150.000158.223 131,392 149,429 115,013 It 1,3311!2,557113,807 83,395 84670 84,839 47,843 49424 8,499 15,185 27,~16 42,179 9,628 274,112(894,365)601,215 (1,147,179) (122,763) 44,532 38,014 (1,013,729) 42,5O7 5,607 (1,233,175) 52,682 (1,364,154) 222,876 397,690 502,100(1,O85,049) (251,381) 5,OOOOO0 5,274.112 4,379747498O,9623,833,783 3711020 3,755 553 3.793,566 2 779,837 2.8223452,827,952 1 594,7771647.458 2833O5 506,~8~903871 1,405971 320922 5,000,000 5,274,112 4,379,747 4,980,962 3,833,783 3,711,020 3,755,553 3,793,566 2,779,837 2,822,345 2,827,952 1,594,777 1,647,458283,305 506,181 903,8711,405,971 320,922 69,541 32 33 Con~eoIion Charge 34 Average Area Charge Per New Dwelhng Unit 1,876 00 2,814 00 2,954 70 3 102 44 3257 56 3,974 22 4,172 93 4381 58 4600 66 4830 69 5072 220 00 0 00 0 00 C O0 '3 00 0 30 0 0O 0 00 0 O0 C 00 0 00 0 00 0 00 0 00 0 00 0 00 0 00 0 00 0 00 0 00 0 00 0 O0 0 00 0 00 0 O,3 1 Phase II Tr~tm~t ~nd Other 2008 mp ov~eqts a e f nanced '~th 58,800,000 ~ssue for 12 years at 5 20% 2 201 ~ Cap,Iai ~mprovements financed with $4 ;5 miH~on issue for 10 years at 5 15% 3 4 City of Chanhassen Water Fund with Phased Treatment Operating Cash Flow Assumptions: 1% Water Pumped but not sold 2 Other revenue increase 3 Other expense increase 4 investment Rate 5 Percent of total expenses attributable to water ops 6 7 Cash Flow Statement 300% 50% 50% 8 2001 2002 9 Operating Revenue 10 Water sales 1,118,759 1,129,634 11 Water Pumped but not sold (10% of Line 9) 12 Meter sales 78,437 13 Penalties 31,846 30,051 14 Special assessments 15 Misc Income 2,256 16 Total Revenue 1,150,605 1,240,378 17 18 Existing Operating Expenses 19 Personal services 266,484 284,455 20 Chargebacktogeneralfundforadmin Suppo~l 21 Contractual 242,330 22,822 22 Materials and Supplies 70,648 82,122 23 Utilities 133,771 24 Remitance to Other Agenoes 27,174 36,745 25 Water Meters for resale 66,813 26 Consulting 32,I50 27 Repairs and Maintenance 162,028 129758 28 Total Operating Expenses 768,664 788,635 29 30 Operating Expense Per 1000 Gal (before treatment) 0.8818 0.8408 32 Net cash flows from existing operating activity 381,941 451,743 33 34 Operating Expenses for new treatment plant (see Note 2) 35 36 Cash flow after treatment 37 38 Capital Expenses for Water System Improvements 39 Capital Improvements - Paid with Cash 40 Debt Service for Lotus Treatment Plant (see Note 1) 41 Total 42 43 Investment Income 44 45 Net cash flow after phased treatment 46 47 Beginning Cash Balance 48 Ending Cash Balance 500,000 49 50 Target Operating Reserve (6 months of operating expenses) 51 Target Amount to Fund Depreciation 52 Total Target Reserves 53 Actual as a Percent of Target Operating and Depreciation Reserves 54 55 Notes~ 56 57 58 59 Usage Rate 60 Average monthly bill 1000% 500% 500% 500% 5 00% 5 00% 500% 5 00% 5 00% 5 00% 500% 200% 200% 200% 2 00% 2 00% 2 00% 2 00% 2 00% 2 00% 200% 2 00% 3 00% 3 00% 3 00% 300% 3 00% 300% 300% 3 00% 300% 300% 3 00% 300% 3 00% 3 00% 3 00% 300% 300% 300% 3 00% 300% 300% 3 00% Projections Anticipated 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 1,570,020 1,562,372 1,729,832 1,878,033 2,022,118 2,175,367 2,338,315 2,451,438 2.568,1512,688,551 2,812,741 (157,002) (78,119) (86,492) (93,902) (101,106) (108,768) (116,916) (122,572) (128,408)(134,428) (140,637) 48,000 48,960 49,939 50,938 51,957 52,996 54,056 55,137 56,240 57,364 58,512 12,000 20,000 20,400 20,808 21,224 21,649 22,082 22,523 22,974 23,433 23.902 0 0 0 0 0 0 0 0 0 0 0 15,000 5,000 5,100 5,202 5,306 5,412 5,520 5,631 5,743 5,858 5,975 1.488,018 1,558,214 1,718,780 1,861,079 1,999,499 2,146,656 2,303,057 2,412,157 2,524,7002,640,780 2,760,493 235,000 300,000 309,000 318,270 327,818 337,653 347,782 358,216 368,962 380,031 391,432 50,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 23,507 24,212 24,938 25,686 26,457 27,251 28,068 28,910 29,778 30,671 31,591 84,586 87,123 89,737 92,429 95,202 98,058 101,000 104,030 107,151 110,365 113,676 137,784 141,917 146,175 150,560 155,077 159,729 164,521 169,457 174,540 179,777 185,170 37,847 38,983 40,152 41,357 42,598 43,875 45,192 46,547 47,944 49,382 50,864 45,000 46,350 47,741 49,173 50,648 52,167 53,732 55,344 57,005 58,715 60,476 10,000 10,300 10,609 10,927 11,255 11,593 11,941 12,299 12,668 13,048 13,439 133,651 137,660 141,790 146,044 150,425 154,938 159,586 164,374 169,305 174,384 179,615 707,374 836,545 910,142 934,446 959,479 985,264 1,011,822 1,039,176 0.6175 0.8160 0.8490 0.8440 0.8400 0.8368 0.8345 0.8329 780,644 721,668 808,638 926,633 1,040,019 1,161,392 1,291,235 1,372,981 148,000 152,440 157,013 161,724 468,000 482,040 780,644 721,668 660,638 774,193 883,006 999,668 823,235 890,941 1,067,3521,096,372 1,126,263 0.8321 0.8319 0.8324 1,457,3481,544,408 t,634.230 496,501 511,396 526,738 960,847 1,033,011 1,107,491 986,949 294,242 0 432,900 432,900 432,900 1,419,849 727,142 432,900 74,122 62,576 73,629 (384,879) 368,445 748,221 2,470,7442,085,864 2,454,309 2,085,8642,454,309 3,202,530 781,926 803,884 826,501 781,926 803,884 826,501 267% 305% 387% 66,700 346,000 36,400 209,830 0 193,027 486,661 847,764 216,450 432,900 432,900 432,900 432,900 432,900 432,900 66,700 562,450 469,300 642,730 432,900 625,927 919,561 1,280,664 15,000 36,868 42,751 49,774 55r211 70,370 83,694 83,315 728,944 196,087 234,089 181,236 505,317 444,112 (12,633) (306,409) 500,000 1,228,944 1,425,031 1,659,120 1,840,358 2,345r673 2,789,785 2,777,152 1,228,944 1,425,031 1,659,120 1,840,356 2,345,673 2,789,785 2,777,152 2,470,744 353,687 418,273 529,071 543,443 558,246 573,494 739,911 760,608 353,687 418,273 529,071 543,443 558,246 573,494 739,911 760,608 347% 341% 314% 339% 420% 486% 375% 325% 1 $45 million lotus pressu re plant is assumed to be financed in 2004 with $4,650,000 g o tmprovement bonds with a 15 year term and a 525% interest rate 2 Operating expense for Phase II Treatment are S148,000 from 2005 thru 2008; in 2009 the cost rises to $468,000 and inflates thereafter Costs include one new operator for each plant 130 1 30 1 42 1 49 1 58 1 65 1 72 180 1 84 1 87 1 91 13 36 16 25 15 53 16 80 17 15 17 68 18 23 18 83 18 99 1916 19 35 1 95 19 55 1/9/2004 348 1,500 2007 2008 2009 2010 2011 2012 2013 25;366 26,146 26,925 27,706 28,456 29,266 30,046 City of Chanhassen Utility Rate Study Water Revenue Calculations Units Built MUSA Projections 852 1163 This Model 1,012 1,600 Actual Actual 2000 2001 2002 2003 2004 2005 2006 1 Estimated Pop~!ation c0n~eCted to water 8yslem 21,604 22;~6 22i766 23,806 24;586 2 Estimated Hou~!d ~ Ze/New Conrlect on 260 2.60 2.60 260 2.60 2.60 3 Estimaled Use Per person (gal lday) 91 108 95 95 95 95 95 4 T0tal Residen6aI C°nneCtior~ 5,440 5,740 5969 6;154 ;; 6.302 6,452 6,852 7,152 7,452 5 Number of new residential connecti0ns per year 300 229 t85 148 150 400 300 300 300 61Number of new WAC'$ per year 313 229 297 250 150 400 300 300 300 2.60 95 7,752 300 300 2.60 2;60 2.60 2.60 95 95 95 95 8,052 8,352 8,652 8,952 300 300 300 300 300 300 300 300 7 Hook-up fee per unit - residential 1.694 1 723 1 802 1,876 2,814 2,955 3,102 3,258 3,974 4,173 4,382 4601 4,831 5,072 8 Annual Increase in hoOk;up fees 1,7% 4.6% 4 1% 50.0% 5.0% 5.0% 5 ~ C~/o 22,0% 5.0% 50% 5.0% 5.0% 5.0% 9 Total Hook-up Fee Revenue - Residential 535.194 469,000 422,100 1,181,880 930731 977,267 1,192,266 1,251,879 1,314,473 1.380,197 1449,206 1,521.667 11 Usage - Residential 12 Annual usage 13 Average consumption per cor~ec~Jo~ per mo~fh t 0,027 9920 t0018 11,944 10,439 10,662 10,368 10,248 10138 10.037 9,943 9855 9774 9,698 14 Water rate per 1,000 gal 1 30 1 30 t 30 1 3O I 42 1 49 1 58 1 65 1 72 1 80 1 84 1 87 1 91 ~ 95 15 Water rate over 8,333 gallons/month 1 50 1 50 1 5O 1 50 ~ 77 1 87 1 97 2 06 2 15 225 229 2 34 2 39 2 44 16 Annual increase in usage charge 0.00% 90% 5.5% 55% 4.5% 4.5% 4:5% 2,0% 2.¢/o 205; 2.0% 17 Revenue for 1st 8333 gallons/month 706917 745902 775.660 799,700 892,636 964,146 1,080235 1 178,270 1,282,940 1,394,645 1 477,590 1 563,294 1 651 836 1 743294 18 Revenue for higher use 165,838 163,947 181,041 400,030 282,047 336,919 329,915 338,679 347,564 356,563 356,919 357,147 357242 357 197 19 Water usage revenue - residential 872,755 909 848 956,701 1,199,730 1 174683 1301,065 1,410,151 1516,949 1630,504 1751,207 1,834509 1920,441 2,009,078 2.100,491 20 Average monthly bill per connection 13 37 1321 13 36 18 25 15 53 16 8O 17 15 17 68 18 23 18 83 18 99 19 15 19 35 19 55 654,537,000 683,275,000 717,570,217 882,061,920 789.411,050 825,473,050 852,519,550 879,566050 906,612550 933659050 960,705,550 987,752050 1014,798550 1,041845050 22 Number of New Commercial SAC Units 98 27 25 5 5 5 5 5 5 5 5 5 23 Hook-up fee per SAC Unit 1 802 1,876 2,814 2,955 3,102 3.258 3974 4173 4382 4601 4831 5072 24 Irrigation connections-new 0 0 0 0 0 0 5 5 5 5 5 25 Hook-up fee per irrigation connec0on t ,802 1 876 2,814 2,955 3,102 3,258 3,974 4,173 4382 4601 4,83~ 5072 26 Hook-up Fee Total - Commercial 176596 50652 70,350 14774 t 5,512 16,288 19,871 41,729 43.816 46007 48,307 50 722 27 30 32 33 34 35 38 39 Commercial (inc. charitable/churches) a~d IndustrJaJ gumber of Commercial connections 123 142 146 131 133 135 137 139 141 143 145 147 149 151 &verage Usage/ConnectiolYMonth - Commercial 71 683 60,549 0 fotal Commercial Use 105.589000103.176,000 Number of Industrial Conneclions 4O 4O 4O 36 37 37 37 37 37 37 37 37 37 37 ¢,verage Usage per Connechon - Industrial 2,502.491 2,130,675 Total Industnal Use 99,474000 85,227000 fral C/I Usage - % of total city usage 205,063 000 188,4O3,OOO 22O43OO67 263473O41 2357981 O6246,569,872 254,648697262727 52127O,8O6,346 278,885,171 286,963,995 295O42 820303,121,645 31 ~ 200 469 ~ercent of Total Use 24~,, 21% 23 5r o 23 O% 23 O% 23 O% 23 O% 23O% 23% 23% 23% 23;, 23'~, 23% [oral ICi Connections 163 182 186 167 170 172 174 176 178 180 182 184 186 188 Jsage Per Month/Connection 105,161 86,265 98,759 131,474 115 587 119,462 121 958 124.398 126.782 129,114 131 394 133,624 135 807 137 943 Water usage revenue - commercial/i~ldustrlal 283350 255.436 302,876 370,291 387689 428,767 467882 5O5168 544863 587,107 616929 647 709 679474 7~2 280 42 Total Hook-up Fee Revenue 0 0 711,790 519652 492,45O 1,196654 946,243 993,555 1,212,137 1 293,608 1,358.289 1,426,203 1,497,513 1 572,389 43 To~aJWa~e~Revei~ues-UsageonJy(excludJnghook-up~e~ 1,156,106 1 165,2841,259,577 1,570,020 %562,372 1,729.832 1,878,033 2.022,118 2.175,367 2,338,315 2,451,438 2568151 2688,551 2812,741 44 45 Total Water Usage 8596OO,OOO871,678,000 938,OOO,284 1,145,534,961 1,025.209.156 1072,042,922 1.107,168,247 1142.293,571 1,177,418,896 1,212,544,221 1247,669.545 1,282794,870 1317,920,195 1,353045519 46 Billed water usage million gallons per day 2 36 239 2 57 314 281 294 3 03 3 13 3 23 3 32 3 42 3 51 3 61 3 71 City of Chanhassen Utility Rate Study Water Hook-Up Fees Actual Actual 2000 2001 1 Hook-up Fee per SAC unit 1,694 1,723 2 Annual Increase in Hook-ul 1,694 29 3 % Increase in Hook-up Fees 1.7% 4 5 Total Hook-UP Fee Revenue 6 7 8 Average Area Charge per Dwelling Unit* 9 % Increase in Area Charges 10 Area Charge Per Acre assuming 5 units per acre. 11 12 Total Area Charges 13 14 TOTAL DEVELOPMENT FEES 15 16 Estimated Total Fees Per Unit 1,723 17 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 1,802 1,876 2,814 2,955 3,102 3,258 3,974 4,173 4,382 4,601 4,831 79 74 938 141 148 155 717 199 209 219 230 4.6% 4.1% 50.0% 5.0% 5.0% 5.0% 22.0% 5.0% 5.0% 5.0% 5.0% 711,790 519,652 492,450 1,196,654 946,243 993,555 1,212,137 1,293,608 1,368,289 1,426,203 1,497,513 ,802 1,876 492,450 2,814 0 0 0 0.0% 5.0% 5.0% 0 0 0 0 0 0 1,196,654 946,243 993,555 2,955 3,102 3,258 18 * The Area Charge is typically charged to developers when land is platted, based on the developable acreage of the site. 0 0 0 5.0% 5.0% 5.0% 0 0 0 0 0 0 1,212,137 1,293,608 1,358,289 3,974 4,173 4,382 0 5.0% 0 0 1,426,203 4,601 0 5.0% 0 0 1,497,513 4,831 City of Chanhassen Utility Rate Study Sewer Trunk Fund Projected Cash Flows 1 Assumptions 2 investment RAte 3 25% 25% 30% 30% 3 0% 3 0% 3 0% 30% 30% 30% 30% 30% 3.0% 30% 30% 3 0% 3 0% 30% 4 5 Actual 6 2002 7 8 Sewer Hook-up Fee Revenue' 513,762 9 10 Debt and Capital Expenditures t 1Outstanding Sewer Debt Payments 31,900 12 Capital Improvements ~3 Total capital expenses 31,900 15 Cash Flow after Capital Expenditures 481,862 17 Investment Ir~come 18 19 Beginning Cash Balance 20 Ending Cash Balance 800,000 22 Base Rate 433 23 Usage Rate 2 6C 24 Average Monthly Bill 1780 Projected 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 403,866 255,150 590,490 444,690 444,690 311,283 311,283 311,283 311,283 311,283 311,283 312,304 313,324 314,345 315,365 316,386 62,257 63,277 353,638 313,838 269,888 231,700 155,225 149,960 144,565 139,008 69,718 71,628 0 0 0 0 0 0 0 0 0 463,000 291,200 441,293 179,978 193,027 103,415 423,882 197,390 130,014 135,215 148,024 153,945 168,108 174,833 190,484 198,104 496,340 353,638 776,838 561,088 672,993 335,203 342,987 247,980 562,890 267,108 201,642 135,215 148,024 153,945 168,108 174,833 190,484 198,104 496,340 50,228 (521,688)29,402 (228,303) 109,487 (31,704)63,303 (251,607)44,175 109,641 176,068 164,279 159,379 146,236 140,533 125,902 (135,847) (433,063) 20,000 21,756 11,109 12,324 5,845 9,305 8,633 10,791 3,566 4,999 8,438 13,973 19,321 24,682 29,809 34,919 39,744 36,861 800,000 870,228 370,296 410,807 194,828 310,t60 287,761 359,696 118,880 166,622 281.261 465,767 644,020 822,719993,637 1,163,9791,324,800 1,228,697 870,228 370,296 410,807 194,828 310,160 287,761 359,696 118,880 166,622 281,261 465,767 644,020 822,719 993,6371,163,979 1,324,8001,228,697 832,495 4 33 4 55 4 78 4 97 2 60 2 73 287 298 1764 18 52 18 63 19 38 5 17 5 37 5 59 5 81 5 99 617 635 6 54 6 74 8 94 7 15 7 36 7 58 781 310 3 22 3 35 349 3 59 3 70 3 81 3 93 4 04 416 4 29 442 4 55 4 69 20 15 20 96 21 80 22 67 2335 2405 2477 25 51 26 28 27 07 27 88 28 72 29 58 30 47 · The Oity assesses for hook-up fees and collects them, with interest, over an 8 year period This cash flow shows hook up fees being paid in full in the year they are assessed 1/9/2004 City of Chanhassen Utility Rate Study Sewer Revenue Calculations 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2/Estimated Household Size 3|EStimated use per persen (gal./day) 5~Number of new residential connections per year 6~Number of new SAC units per year 21,604 22,376 22,768 2.60 2.60 2,60 64 76 67 5,740 5,969 6,154 6,302 229 185 148 150 297 250 150 23,806 24,586 25.368 26,146 26,926 27,706 28,486 29,266 30,046 2.60 2.60 2.60 2.60 2.60 260 2.60 2.60 2.60 67 67 67 67 67 67 67 67 67 6,452 6,852 7,152 7,452 7,752 8,052 8,352 8,652 8,952 400 300 300 300 300 300 300 300 300 400 300 300 300 300 300 300 300 300 7 8 SAC charge per unit - residential 9 Annual InCrease in Sewef Hook*up Fees 10 Total Sewer Hook up Fee Revenue - Residential 1,458 1,458 1,458 1,458 1,458 1,458 1,458 1,021 1,021 1,021 1,021 1,021 1,021 0~0% 0.0% 0.0% 0.0% 0.C¢/o -300% 0.0% 0.0% 0.0% 0.0% 0,0% 333,882 433,026 364,500 218,700 583,200 437,400 437,400 306,180 306,180 306,180 308,180 306,180 306,180 0 762 0 65 0 54 520,655,550 466,420,641 476,313.437 487,774,800503,256,000 534.456,000 557,856,000 581,256,000 604,656,000 628.056,000 651,456,000 674,856,000698,256,000 7,559 6,512 6,450 6,450 6,500 6.500 6,500 6,500 6,500 6,500 6,500 6,500 8,500 4 33 4 33 4 33 4 55 478 497 517 5 37 5 59 5 81 5 99 6 17 6 35 0,0% 5.0% 5.0% 40% 4,0% 4,0% 4,0% 4.0% 3.0% 3.0% 30% 2 60 2 80 2 60 2 73 2 87 2 98 3 10 3 22 335 3 49 3 59 370 381 0,0% 5.0% 5.0% 4.0% 4.0% 4,0% 40% 40% 30% 3.0% 30% 1,413,460 1,274,833 1,302,481 1,400,512 1,442,583 1,593,299 1,729,580 1,874,215 2,027,653 2,190,368 2,340,135 2,496,918 2,661,001 12 Usage - Residential 13 Percentage of water use assumed 14 Annual usage 15 Average consumption per connection per month 17 Annual increase in base sewer rate 16 Minimum monthly fee 181Sewer rate per 1,000 gal (after 1,333 gallons) 191Annual increase in usage sewer rate 20 Sewer usage revenue - residential 21 Subtotal sewer revenues - Residential 22 Average monthly bi I per connection 1,413,460 1,274,833 1,302,481 1,400,512 1,442,583 1,593,299 1,729,580 1,874,215 2,027,653 2,190,368 2,340,135 2,496,918 2,661,001 2052 17 80 17 64 18 52 18 63 19 38 20 15 20 96 21 80 22 67 23 35 24 05 24 77 23 24 Number of New Commercial SAC Units 25 Hook-up charge per Connection 26 Hook-ups Tolai - Commercial 27 98 27 25 5 5 5 5 5 5 5 5 5 1,458 1,458 1,458 1,458 1,458 1,458 1,021 1,021 1,021 1,021 1,021 1,021 142,884 39,366 36,450 7,290 7,290 7,290 5,103 5,103 5,103 5,103 5,103 5,103 Total Commercial Connections (including churches & chi Average Usage per Connection (70% of water use) Total Usage - Commercial Usage Per Month/Connection - Commercial Average Monthly bill per commercial connection Total Commercial Revenue Total Industrial Connections Average Use Per Connection - Industrial Total Usage - Industrial Total Industrial Usage per Month/Connection Average montly bill per industrial connection Total Industrial Revenue 142 146 143 145 147 149 151 153 155 157 159 161 163 520,509 494,679 0 0 0 0 0 0 0 0 0 0 73,912,30072,223,200 0 0 0 0 0 0 0 0 0 0 0 43,376 41,223 104 11 98 51 177,404 172,596 40 40 34 35 34 34 34 34 34 34 34 34 34 1,876,868 1.598,006 69,631,80059,658,900 145,979 124,289 370 88 314 49 176,909 150,953 Total Commercial and Industrial Usage (70% of commercial water usage in 2004 and beyond, 60% in 2003 because it was a dry year) Total C/I Usage per Month/Connection 65,816 59,087 Average monthly bill per C/I connection 162 45 144 96 143,544,100131,882,100 138,060,000 140,400,000 141,180,000 142,740,000144,300,000 145,860,000147,420,000 148980,000150,540,000152,100,000153,660,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 160 33 168 35 176 77 183 84 191 t9 198 84 206 79 215 06 221 52 228 16 235 01 44 45 46 Subtotal sewer revenues - Commercial and Industrial 47 48 Total Sewer Revenues (excluding Hook-up Fees) 49 50 Total Sewer Hook-Up Fee Revenue 52 MCES Disposal Costs 53 Residential Usage 54 Commercial, Industrial, & Public Usage 354,313 323,549 340,548 363,636 383,939 403,709 424,446 446,196 489,006 492,928 513,033 533,899 555,557 1,767,773 1,598,383 1,643,029 1,764,148 1,826,522 1,997,008 2,154,026 2,320,411 2,496,660 2,683,296 2,853,168 3,030,817 3,216,557 333,882 575,910 403,866 255,150 590,490 444,690 444,690 311,283 3fl,283 311,283 311,283 311,283 311,283 520,655,550 466,420,641 476,313,437 487,774,800 503,256,000 534,456,000 557,856,000 581.256,000 604,656,000 628,056,000 651,456,000 674,856,000 898,256,000 143,544,t00 131,882,100 138.060,000 140,400,000 141,180,000 142,740,000 144,300,000 145,860,000 147,420,000 148,980,000 150.540,000 152,100,000 153,660,000 55 Total Usage 56 I&l Usage 50% in 2002; 26% in 2003; 32% beyond) 564,199,650 598,302,741 614,373,437 628,174,800 644,436,000 677,196,000 702,156,000 727,116,000 752,076,000 777,036,000 801,996,000 826,956,000 851,916,000 332,099,825 299,151,371 159,737,094 201,015,936 206,219,520 216,702,720 224,689,920 232,677,120 240,664,320 248,651,520 258.638,720 264,625,920 272,613,120 Sewer Usage for which Met Council charges city 996,299,475 897,454,112 774,110,530 829,190,736850,655,520 893,898,720 926,845,920 959,793,120992,740,320 1,025,687,620 1,058,634,720 1,091,581,920 1,124,529,120 57 MCES Disposal Costs t,103,869 1,006,344 1,111,116 1,190,918 1,305,092 1,390,269 1,497.277 1,610,6221,730,638 1,857,679 1,992,114 2,134,332 58 59 MCES Fee Assumetion frate per 1000 gallons) 1 18 1 23 1 30 1 34 1 4 146 1 50 1 56 1 62 1 69 1 75 1 82 1 90 60 (Met Council prolecbons ti~ru 2007 Inflated by 4% thereafter) 4 24% 5 69% 3 08% 448% 4 29% 2 74% 4 0% 4 0% 4 0% 40% 4 0% 4 0% 1/9/2004 Sanitary Sewer Operating Fund Capital Improvements City of Chanhassen SEWER SYSTEM CAPITAL IMPROVEMENTS I 2003 I 2004 I 2005 I 2006 I 2007 I 2008 I 2009 ] 2010 I 2011 I 2012 I 2013 Sewer Replacement 240,006 150,000 150,000 160,006 170,000 Light Duty Trucks 33,000 36,000 Sewer Comp Plan Update 50,000 TOTAL 240,006 33,000 150,000 86,000 150,000 0 160000; ¢ 170,000 0 Inflated Dollars 240,000! 34,320 162,240 96,738 175,479 0 202,451 £ 232,657 0 Inflation Rate 4% 1/9/2004 Sewer Trunk Fund Sanitary Sewer Capital Improvements SEWER SYSTEM CAPITAL IMPROVEMENTS 2003 2O042005 2006 2007 2O08 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2O2O Lft Station #2 Forcema~n Sel)aral~of~ 308.000 80,000 85 000 85000 I & i Abatem~]t 75,000 7500C 800O0 900O0 90,000 95000 96000100000100,000 105000105000110,000 110,00( ~ 15,00£ SC-2 Trunk Ext~slon Ircm BO i ~ to SC 1 2 30,000 ~8ktotal w~th 55k in ass~sm~ts) BC-2 ~ runk Exle~]slon Irom BC 1 to BC 1 3 125,000 381 k total with 256k in ass~smentst BC 2 Trunk Extef~s~on from BC 1 2 [o BCI 4 83,000 ;50k total w~th 257k ~n assessments) BC 3 Trunk Extension 1rom BC 1 1 Io BC ~ 5 125,000 $06k tolal with 280k in assessmont~ Ldl Stabon SCADA LJpgr~des 8000080,000 80,0001 80,0001 80000I LB-1 Trunk Exte~lsion from LB 1 I to LR 2 l(w'hft stahon) 730k total with 485k ~n assessments 24500060,000 182k total w,th 122k in assessments) LB3, LB 5 LB-2 (500k tota~ with 350k in assessm~ts ~ 50,00C TOTAL 463,000 28O,OOO 4O8,OOO 160000 165OOO 85,000 335OOO 15OOOO 95000 95OOO 1OOOOO~00,000 105,000 ~05,000 110000fl0,000 265.OOO Infla[edDo,lars 463000 2912O0 441293 179978 193027 103,415 423,882 197390 130.014 135215;48024 !53,945 168,108 174833 190,484 198,104 496,340 City of Chanhassen Utility Rate Study Sewer Operating Fund Projected Cash Flows I Assumptions 2 User fee rate increase 3 Other revenue increase 4 Other expense increase 5 MCES increase 6 Investment Earnings 7 Percent expenses attributable to sewer 8 Percent of revenue attributable to sewer 9 5O% 6O% 300% 5O% 6O% 0 00% 500% 5 00% 400% 4 00% 400% 4 00% 4 00% 300% 3 00% 300% 2 00% 200% 2 00% 200% 200% 200% 2 00% 200% 200% 2 00% 2 00% 3 00% 3 00% 3 00% 3 00% 300% 3 00% 300% 300% 3 00% 300°, 3 00% 569% 3 08% 4 48% 4 29% 2 74% 400% 4 00% 400% 4 00% 400%, 4 00%, 25O% 250% 3 00% 3.00% 3 00% 3 00% 300% 3 00% 3 00'% 3 0O% 300% 10 11 12 Cash Flow Statement t3 Operating Revenue 14 Sewer Charges 15 Deduct for non metered use (5%) 15 Misc Income 16 Sewer Surcharge 17 Penalties 18 Total operating revenue t9 20 Operating Expenses 21 Personal services 22 Contractual 23 Materials and Supplies 24 Consulting 24 Utilities 25 Repairs and Maintenance 26 MCES Disposal Fees 27 Total Operating Expenses 28 29 Net cash flows from operating activities 3O 31 32 Debt and Capital Expenditures 33 Capital Improvements 34 Total capita~ expenses 35 36 Cash Flow after Capital Expenditures 37 38 Investment Income 39 40 Beginning Cash Balance 41 Ending Cash Balance 42 43 Target Operating Reserve (6 months of operating expenses) 44 Target Amount to Fund Depreciation 45 Total 46 Actual as a Percent of Target Operating Reserve 47 48 Base Rate 49 Usage Rate 50 Average Monthly Bill Histor;cal Estimated Actual 2001 2002 1,463,5001,433,682 3,476 33,675 47,769 37,564 1,511,269 1,508,397 266,484 284,455 242,330 22.822 70.648 60,004 22,150 14,863 162,028 129,758 1.101,0811,105,955 1,842,571 1,640,007 (331,302)(131,610) 1,628,328 820,003 820,003 199% 432 2 66 1786 Projected 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2o13 1,643,0291,764,148 1,826,5221,997,008 2,154,026 2,320,411 2,496,660 2,683,296 2,853,168 3,030,8173,216,557 (82,151) (88,207) (91,326) (99,850) (107,701){116,021)(124,833)(134,165)(142,658)(151,541)(160,828/ 3,546 3,616 3,689 3,763 3,838 3,915 3,993 4,073 4,154 4,237 4,322 14,700 14,994 15,294 15,6o0 15,912 16,230 16,555 16,886 17,223 17,568 17,919 12,000 12,240 12,485 12,734 12,989 13249 13,514 13,784 14,060 14,341 14,628 1,591,1231,706,7911,766,664 1,929,254 2,079,0632,237,7842,405,8882,583,8742,745,9472,915,4223,092,599 292988 3Ol,778 310,831 320,156 329,761 339,654 349,843 360,338 371,149 382.283 393.752 23.507 24,212 24,938 25,686 26,457 27,251 28,068 28.910 29,778 30,671 31,591 61,804 63,658 65,568 67,535 69,561 71,648 73,797 76.011 78,292 80,640 83,060 10,000 10,300 10,609 10,927 11255 11,593 11,941 12,299 12,668 13,048 13,439 15,309 15,769 16,242 16,729 17.231 17,748 18,280 18,829 19,393 19,975 20,574 150,000 154,50o 159,135 163,909 168,826 173,891 179,108 184,481 190,016 195,716 201,587 1,006,3441,111.1161,190,918 1305092 1,390,2691,497277 1,610,6221.730,6381,857,6791,992114 2134,332 1,559,9521,681,3321,778,2411910.035 2,013,3602,139.0612,271,6592,4fl,507 2,558,9742,714,4482,878,335 31,171 25,459 (11,577)19,219 65,704 98,723 134,229 172,367 186,973 200,975 214,263 0 240.000 34,320 162,240 96,738 175,479 0 202.451 0 232,657 0 0 240,000 34,320 162,240 96,738 175,479 0 202,451 0 232,657 0 31,171 (214,541) (45,897) (143,021) (31,035) (76,756)134,229 (30,084) 186,973 (31,682) 214,263 40,708 42505 45,845 45,844 42,928 43,285 42,281 47,576 48,101 55153 55,857 1,628,3281700207 1,528,171 1,528,119 1,430,9421,442,8351,409,3641,585,8741,603,3661838,440 1,861912 1,700,2071,528,1711,528,119 1,430,942 1,442,8351,409,3641,585,8741,603,3661,838,4401,861,9122,132,032 779,976 840,666 889,120 955017 1,006,6801,069.5301,135,8301,205,7531279,487 1,357,2241,439168 779,976 840,666 889,120 955,017 1,006,6801,069,530 1,135,8301,205,753 1,279,4871,357,2241,439,168 218% 182% 172% 150% 143% 132% 140% 133°6144% 137% 148% 4 33 455 4 78 4 97 5 17 537 559 5 81 5 99 617 635 2.60 2 73 2 87 2 98 310 3 22 335 349 3 59 3 70 3 81 17 64 1852 18 63 19 38 2015 20 96 21 80 22 67 23 35 24 05 2477 · The City assesses lot SAC revenues and collects them, with interest, over an 8 year period This cash flow shows SAC revenues being paid in full in the year they are assessed 1/9/2004 City of Chanhassen G,O Revenue Bond Debt Service Schedule Water Rev. Water Revenue Series 1998C Series 1999A Dated 35,947 12/1/1999 Amount $820,000 $1,670,000 Maturity 1 -Feb 1 -Feb TOTAL TOTAL TOTAL Year Principal Interest Principal Interest PRINCIPAL INTEREST P & I 2OO2 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 0 14,353 0 85,000 26,985 150,000 85,000 23,345 155,000 90,000 19,625 160,000 90,000 15,710 170,000 95,000 11616 180,000 105,000 7,140 190,000 105,000 2,389 200,000 200,000 33,465 63,555 56,693 49,526 41893 33 575 24 555 14 950 5,000 0 47,818 47,818 235,000 90,540 325,540 240,000 80,038 320,038 250,000 69,151 319,151 260,000 57,603 317,603 275,000 45,191 320,191 295,000 31,695 326,695 305,000 17,339 322,339 200,000 5,000 205,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 655,000 121,163 1,405,000 323,212 2,060,000 444,375 2,504,375 00000000000 ~ ~00000000 ~ ~ 0 ~ ~ ~ ~ ~ ~ ~ ~ ¢~ ~ ~ 0 ~ ~ ~ O~ 000000~ 0000000000 ~0¢¢ ~0~0 ~~0~0~0 ~~0~0~0 City of Chanhassen Projected Water and Sewer Bills With 2 Plants in 2004 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Avera,qe Quarterly Residential Bill Assumes quarterly use of 30,000 gallons water and 19,350 gallons sewer. Sewer 52.91 52.91 55.56 Water 40.00 40.00 47.13 Total 92.91 92.91 102.68 Combined Fee Increase 0.0% 0.0% 10.5% Sample Bill for Lower Water user Assumes quarterly use of 21,000 gallons water and 15,000 gallons sewer Sewer 48.53 48.53 50.96 Water 27.30 27.30 31.67 Total 75.83 75.83 82.63 Combined Fee Increase 0.0% 0.0% 9.0% 58.34 60.67 63.10 65.62 68.25 70.97 73.10 75.30 77.56 49.72 52.45 54.81 57.28 59.86 61.08 62.27 63.52 64.79 108.05 113.12 117.91 122.90 128.10 132.03 135.38 138.82 142.35 5.2% 4.7% 4.2% 4.2% 4.2% 3.1% 2.5% 2.5% 2.5% 53.51 55.65 57.87 60.19 62.60 65.10 67.05 69.07 71.14 33.41 35.25 36.83 38.49 40.22 41.03 41.85 42.68 43.54 86.92 90.90 94.71 98.68 102.82 106.13 108.90 111.75 114.68 5.2% 4.6% 4.2% 4.2% 4.2% 3.2% 2.6% 2.6% 2.6% Total Fund Balances 9,073,491 7,161,713 7,222,914 5,105,848 5,517,969 4,400,537 5,018,067 3,835,549 4,165,112 5,083,689 5,479,575 Hook-up Fees Per Unit Met Council SAC Fee 1,275 1,350 1,425 1,500 1,575 1,650 1,725 1,800 1,875 1,950 2,025 City Sewer Hook-up Fee 1,458 1,458 1,458 1,458 1,458 t ,021 1,021 1,021 1,021 1,021 1,021 City Water Hook-up Fee 1,876 2,814 2,955 3,102 3,258 3,974 4,173 4,382 4,601 4,831 5,072 Total 4,609 5,622 5,838 6,060 6,291 6,645 6,919 7,202 7,496 7,801 8,118 Percent Increase 22.0% 3.8% 3.8% 3.8% 5.6% 4.1% 4.1% 4.1% 4.1% 4.1% City of Chanhassen Water Fund with Phased Treatment Operating Cash Flow Assumptions: 1% Water Pumped but not sold 2 Other revenue increase 3 Other expense increase 4 investment Rate 5 Perceet of total expenses attributable to water cps 300% 50% 50% With 2 Plants in 2004 10 00% 5 00% 5 00% 5 00% 500% 5 00% 500% 5 00% 5 00% 500% 5 00% 200% 2 00% 200% 2 00% 2 00% 200% 2 00% 2 00% 2 00% 200% 200% 3 00% 3.00% 3 00% 300% 300% 3 00% 3 00% 300% 3 00% 3 00% 3 00% 3 00% 300% 3 00% 300% 300% 3 00% 300% 3 00% 300% 3 00% 3 00% 6 7 Cash Flow Statement 8 2001 2002 9 Operating Revenue 10 Water sales 1,118,759 1,129,634 11 Water Pumped but nol sold (10 t, of Line 9) 12 Meter sales 78,437 13 Penalbes 31,846 30,051 !4 Special assessments 15 MJsc ~ncome 2,256 16 Total Revenue 1,150,605 1,240,378 18Ex,sting Operating Expenses 19Personal secdces 266,484 284,455 20Charge back to general fund for adrnin Suppod 21Contractual 242,330 22,822 22Materials and Supplies 70,648 82,122 23Utilities 133,771 24Remitance to Other Agencies 27,174 36,745 25Water Meters for resale 66,813 26Consulting 32,150 27Repairs and Maintenance 162,028 129 ~,s$ 28TotaJ Opera~Jr~g Expenses 768,664 788,635 29 30 Operating Expense Per 1000 Gal (before treatment) 0.8818 0.8408 31 32 Net cash flows from existing operating activity 381,941 451,743 33 34 Operating Expenses for new treatment plant (see Note 2) 35 36 Cash flow after treatment 37 38 Capital Expenses for Water System Improvements 39 Capital improvements - Paid with Cash 40 Debt Service for Lotus Treatment Plant (see Note 1 ) 4t Total 42 43 Investment Income 44 45 Net cash flow after phased treatment 46 47 Beginning Cash Balance 48 Ending Cash Balance 500,000 49 Pro~ections Anticipated 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 1,570,020 1,662,708 1,840,922 1,998,640 2,151.9782,315,070 2,488,4822,608,870 2,733,0782,861,211 2,993,376 (157,002) (83,135) (92,046) (99,932) (107,599)(lt5,753~ (124,424)(130,443) (136,654)(143,061) (t49,669) 48,000 48,960 49,939 50,938 51,957 52,996 54,056 55,137 56,240 57,364 58,512 12,000 20,000 20,400 20,808 21,224 21,649 22,082 22,523 22,974 23,433 23,902 0 0 0 0 0 0 0 0 0 0 0 15,000 5,000 5,100 5.202 5,306 5,412 5,520 5,631 5,743 5,858 5,975 1,488,018 1,653,533 1,824,315 1,975,656 2,122,8662,279,373 2,445,7152,561,717 2,681,3812,804,806 2,932,096 235,000 300,000 309,000 318,270 327,818 337,653 347,782 358,216 368,962 380,031 391,432 50,000 100,000 100,000 100,000 100,000 100,000 100,000 100.000 t00,000 100,000 23.507 24,212 24,938 25,686 26,457 27,251 28,068 28,910 29,778 30,671 31,591 84,586 87,123 89,737 92,429 95,202 98,058 101,000 104,030 107,151 110,365 113,676 137,784 141,917 146,175 150,560 155,077 159,729 164,521 169,457 174,540 ~79,777 185,170 37,847 38,983 40,152 41r357 42,598 43,875 45,192 46,547 47,944 49,382 50,864 45,000 46,350 47,741 49,173 50,648 52,167 53,732 55,344 57,005 58,715 60.476 10,000 10,300 10,609 10,927 11,255 11,593 11,941 12,299 12,668 13,048 13,439 133,651 137,660 141,790 146,044 150,425 154,938 159,586 164,374 169,305 174,384 179,615 50 Targe( Operating Reserve (6 months of operating expenses) 353,687 418,273 562,57f 680,948 699,876 719,373 739,454 760, t 38 51 Target Amount to Fund Depreciation 52 Total Target Reserves 353,687 418,273 662,871 660,948 699,876 719,373 739,454 760,138 53 Actual as a Percent of Target Operating and Depreciation Reserves 347% 363'% 241% 237% 279% 310% 317% 286% 54 55 Notes 56 57 58 59 Usage Rate 60 Average monthly bill 707,374 836,545 910,142 934,446 959,479 985,264 1,011,8221,039,176 1,067,352t,096,372 1,126,263 0.6175 0.8160 0.8490 0.8440 0.8400 0.8368 0.8345 0.8329 0.8321 0.8319 0.8324 780,644 816,988 914,174 1,041,210 1,163,387 1,294,109 1,433,8941,522,541 1,614,0291,708,434 1,805,833 415,000 427,450 440,274 453,482 467,086 481,099 495,532 510,398 525,710 780,644 816,988 499,174 613,760 723,114 840,628 966,808 1,041,442 1,118,4971,198,036 1,280,123 66,700 346,000 36,400 209,830 0 193.027 486r661 847,764 986,949 294,242 0 216,450 432,900 432,900 432,900 432,900 432,900 432,900 432,900 432.900 432,900 66,700 562,450 469,300 642,730 432,900 625,927 919,561 1,280,664 1,419,849 727,142 432,900 15,000 36,868 45,611 47,875 48,442 58,802 66,801 70,222 65,152 58,066 73,935 728,944 291,406 75,484 18,905 338,656 273,303 114,047 (168,999) (236,199) 528,960 921,158 500,000 1,228,944 1,520,350 1,595,834 1,614,7391,953,395 2,226,6982,340,745 2,171,7461,935,547 2.464,507 1,228,944 1,520,350 1,595,834 1,614,739 1,983,3952,226,698 2,340,7452,171,746 1,935,5472,464,507 3,385,665 781,442 803,385 825,986 781,442 803,385 825,986 1 S45 million lotus pressure plant Js assumed to be financed in 2004 with $4,650,000 g o ~mprovement bonds with a 15 year term and a 525% interest rate 2 Operating expense for Phase II Treatment are $148,000 from 2005 thru 2008; in 2009 the cost rises to S468,000 and in0ates thereafter Costs include one new operator for each plant 1 30 1 30 1 51 1 59 1 68 1 75 1 83 I 92 1 95 1 99 2 03 13 36 16 25 16 53 1788 18 25 18 81 19 40 2003 20 21 20 39 20 59 2 07 20 81 1/9/2004 City of Chanhassen Utility Rate Study Water Revenue Calculatio~)s With 2 Plants in 2004 MUSA Projections 852 1153 348 This Model 1 012 1 600 1 500 Actual Actual 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 21,604 22,376 22,766 23,806 24,586 25,366 26,146 26,926 27,708 28,486 29,266 30,046 1 Estimated Population connected to water system 2 Estimated HouSehold Size/New Connection 2.60 2.60 2.60 2160 2.60 2.60 2.60 2.60 3 Estimated Use per ~rsor~ (gal ~day) 91 108 95 95 95 95 95 95 4[Tota! Residential ConVict,s 5,440 5,740 5,969 6,154 6,302 6,452 6,852 7,152 7,452 7,752 5 Numbe~ of new reside~ial co nnectibns Pe~ year 300 229 185 148 150 400 300 300 300 300 61Number 0f f~ew WAC's p~r year 313 229 297 250 150 400 300 300 300 300 2.60 2.60 2.60 2.60 95 95 95 95 8.052 8.352 8,652 6,g52 3OO 800 30O 3OO 300 300 300 300 7 Hook-up fee per unit - residential 1,694 1,723 1,802 1,876 2,814 2,955 3,102 3,258 3,974 4,173 4,382 4,601 4.831 5,072 8 Ann~a.I lin;tease in hook-up fees 1.7% 4.6% 41% 50.0% 5.0% 5.0% 5.0% 22.0% 5,0% 5.0% 50% 50% 5.0% 9 Total Hook-up Fee Revenue - Residential 535,194 469,000 422,100 1,181,880 930,731 977,267 1,192,266 1,251,879 1,314,473 1,380,197 t ,449,2061521,667 11 Usage - Residential 12 Annual usage 13 Average cor~sump~ion per connec6on per month 10.027 9,920 10,018 11,944 10,439 10662 10,368 10,248 10,138 10,037 9,943 9 855 9,774 9,698 14 Water rate per 1,000 9al 1 3O 1 3O 1 3O 1 3O 1 51 1 59 1 68 1 75 1 83 1 92 1 95 1 99 2 O3 2 O7 15 Water rate over 8333 9arlons/month 1 5O 1 5O 1 5O 1 5O 1 89 199 210 2 19 2 29 239 2 44 249 254 2.59 16 Annuat increase in ur:age charge 0.00% 160% 55% 5.5% 4.5% 4.5% 4,5% 2.0% 20% 20% 20% 17 F~eve~ue 1or 1st 8333 gallons/month 706,917 745902 77566O 7997O0 949.961 1 026.064 1 149.608 1.253,939 1 365,331 1,484,209 1 572481 1 663689 1 757917 1 855.249 18 Revenue for h~gher use 165,838 163,947 181 041 4CC 030 300,160 358,556 351,1 O3 360,429 369885 379461 379,840 38OO83 980,184 36O136 19 Water usage revenue - residential 872755 9O9.848 956 701 119973O 1 250 122 1 384,620 1 500,711 1,614,368 1 735216 1863,670 1,952321 2.O43772 2,138 101 2235,385 2O Average monthly bill per COmlection 13 37 13 21 1336 1625 16 53 17 88 18 25 18 81 19 4O 2O O3 2O 21 2O39 2O 59 2O 81 654,537,000 683,275.000 717570,217 882.061,920 789,411050 825473,050 852.519,550 879566.050 906,612550 933.659050 960705,550 987752050 1.014798,550 1,041,845,050 22 Number of New Commercial SAC Umts 98 27 25 5 5 5 5 5 5 5 5 5 23 Hook-up fee per SAC Unit 1 8O2 1 876 2,814 2955 3,1 O2 3,258 3,974 4173 4382 460[ 4 831 5072 24 Irrigation connections new 0 0 0 0 0 0 5 5 5 5 5 25 Hook-up fee per irriga6on com/ec6on 1,802 1,876 2814 2955 3102 3258 3974 4173 4382 4,601 4031 5072 26 Hook up Fee fota~ Commercial 176596 5O,652 7O,35O 14774 15,512 16.288 19 871 41,729 43816 46OO7 48,3O7 50,722 27 Coml~ercial (inc. charitable/churches) and Industrial Number of Commercial connections 123 142 146 131 133 135 137 139 141 143 145 147 149 151 Average Usage,,Connecfion/Morlth - Corrlmercial 71.683 60,549 0 Total Commercial Use 105,589,000 103176000 Number of Industrial Connections 40 40 40 36 37 37 37 37 37 37 37 37 37 37 Average Usage per Connection - g~dustrial 2,502.491 2,130675 Total industrial Use 99,474 00085227,000 Total C/I Usage - % of total city usage 2O5.O63,OOO 188,403 000 220 430 067 263,473,041235,798 106 246569872 254648,697262 727 521 27O8O6,346278885171 286,963995295,O4282O303 121,645 311,2OO469 Percent of Total Use 24% 21% 235% 23 0% 23 0% 23 0% 230% 23 0% 23% 23% 23% 23';, 23";, 23°, Total ICI Connections 163 182 186 167 17O 172 174 t 76 178 18O 182 184 186 ~ 88 Usage Per MontbConnection 1O5161 86265 98759 131,474 115.587 119462 121 958 124,398 t26 782 129,114 131,394 133624 135 807 ~37 943 Water usage revenue - corn merc~al/industrial 283,350 255436 3O2876 370291 412,587 456 303 497.929 537610 579854 624811 656549 689 3O5 723.110 757991 42 Total Hook-up Fee Revenue 0 0 711 790 519,652 492450 1 196654 946243 993,555 1212,137 1 293608 1 358289 1 426203 1 497513 1572389 43 [oral Water Revenues - Usage only (excluding hook up fa( 1 156,106 1 165284 1 259577 1 57O,O2O 1 662,708 1 840 922 1 99864O 2,151,978 2,315,070 2488482 26O887O 2 733 078 2,861 211 2993,376 44 45 Total Water Usage 859,6OOOOO871,678000 938000,284 1145,5349611025,209,156 1072,042922 1 1O7168247 1142 293571 1,177,418896 1212.544221 1247,669,545 1282794 87O 13179201951353,045519 46 B~lled water usage million gallor~s per day 236 2 39 2 57 3 14 2 81 294 303 913 323 3 32 3 42 3 51 361 3 71 12~2004 Fee Comparison for Single Family Lot Utility Infrastructure Fees 559 to 1,158 2,376 none 648 none 413 none 3,996 to 4,595 741 4,001 465 1,617 none-WAC pays fortrunk 1,419 891 4,392 5,463 5,129 Inside MUSA 4,930 to 5,469 (and up) I Outside MUSA 6,564 (and up) 5,909 150 440 Inside MUSA 295-675 Outside MUSA 315 1,055 included in water 1,508 1,541 605 740 1,956 MUSA Expansion Area -s 2,450 I Credit River District 2,450 1,000 731 629 1,833 776 1,405 878 1,155 568 500-660 776 727 3,785 2,523 1,650 1,850 2,900 and up 2,900 and up 1,395 2,550 2,550 MUSA Expansion Area 10,190 Credit River District 8,401