2018.09.17 Work Session Packet (2nd)
4141 Douglas Drive North • Crystal, Minnesota 55422-1696
Tel: (763) 531-1000 • Fax: (763) 531-1188 • www.crystalmn.gov
Posted: Sept. 14, 2018
City Council
Second Work Session Agenda
Sept. 17, 2018
Following the City Council meeting
Conference Room A
Pursuant to due call and notice given in the manner prescribed by Section 3.01 of the City Charter,
the second work session of the Crystal City Council was held at ______ p.m. on Sept. 17, 2018 in
Conference Room A, 4141 Douglas Dr. N., Crystal, Minnesota.
I. Attendance
Council Members Staff
____ Kolb ____ Norris
____ LaRoche ____ Therres
____ Parsons ____ Gilchrist
____ Adams ____ Ray
____ Budziszewski ____ Revering
____ Dahl ____ Sutter
____ Deshler ____ Serres
II. Agenda
The purpose of the work session is to discuss the following agenda items:
1. 2019 utility rates.
2. Chapter 12 of City Code.
3. Chapters 10 and 11 of City Code.
4. New business.*
5. Announcements.*
III. Adjournment
The work session adjourned at ______ p.m.
Auxiliary aids are available upon request to individuals with disabilities by calling the City Clerk at (763) 531-
1145 at least 96 hours in advance. TTY users may call Minnesota Relay at 711 or 1-800-627-3529.
City of Crystal
Crystal, Minnesota
September 13, 2018
Water and Sanitary Sewer Rate Study
City of Crystal, Minnesota
Water and Sanitary Sewer Rate Study Table of Contents
September 13, 2018
Page No. Introductory Section
I.Introduction 4
II.Assumptions 5
III.Water and Sanitary Sewer Rate Study 8
Summary
18 Water and Sanitary Sewer Storm Sewer 20
Supplementary Information
Sanitary Sewer and Water Fund
Cash Flow Projections Schedule of Cash Flows - Water - Scenario 1 - Current State 22
Schedule of Cash Flows - Water - Scenario 2 - Increase Spread Over Several Periods to Achieve Target 23
Schedule of Cash Flows - Sanitary Sewer - Scenario 1 - Current State 24 Schedule of Cash Flows - Sanitary Sewer - Scenario 2 -
Increase Spread Over Several Periods to Achieve Target 25
2
INTRODUCTORY SECTION
CITY OF CRYSTAL
CRYSTAL, MINNESOTA
3
City of Crystal, Minnesota
Water and Sanitary Sewer Rate Study September 13, 2018
I. Introduction
The City of Crystal, Minnesota (the City) owns and operates the Water, Sanitary Sewer and Storm Water utilities and is responsible for maintaining the infrastructure to serve the residents. The City’s infrastructure (water, sanitary sewer,
storm sewer) is 40-60 years old and in need of maintenance and replacement. The City is adopting a more proactive approach with an intentional focus on planning and coordinating projects. As part of this proactive approach, the City is developing and implementing a long term plan for its utilities and the rate analysis provided here is a significant step in
this challenging process.
The City has four customer classes, Commercial, Industrial, Institutional and Residential. The tables below summarize the number of customers by class. Water service is billed based on consumption and Sanitary Sewer service is currently
a flat rate. Billing is done on a quarterly basis with one third of the city billed each month.
Customer Class Number
of Accounts
Commercial 213
Industrial 24
Institutional 23
Residential 7,693
Grand Total 7,953
This rate study analyzes the cash flows of the Water and Sanitary Sewer utilities of the City. Sources and uses of cash are projected for the years ending December 31, 2018 to December 31, 2028. The study uses the current number and
type of accounts to project future revenue at a suggested rate for each of the utility funds, each year.
This rate study does not analyze the Storm Water Utility but rather provides rate and financial projections based on discussions held by the City Council during the 2018 budget process.
Annual capital costs are projected separately for each of the funds for the projection period. The City has a Capital
Improvement Plan (CIP) that goes from 2019 to 2023. Averages for that 5 year period were used to estimate capital spending from 2024 to 2028.
The financial projection is based on billings at the current rate with an inflationary increase Scenario 1 and increased
variedly over a number of periods in Scenario 2. Expense assumptions are outlined in the assumptions section on the following page and present, to the best of management’s knowledge and belief, the City’s expected results of cash flows
for the projection period if such uses of cash occur. Accordingly, the projection reflects management’s judgment, as of the date of this projection, of the expected conditions and the City’s expected course of action if such usage and expense
totals were attained. The presentation is designed to provide information to the City Council concerning recovery of expenses that might be achieved if rates were adjusted and should not be considered to be a presentation of expected
future results. Accordingly, this projection may not be useful for other purposes. The assumptions disclosed herein are those that management believes are significant to the projection. Furthermore, there will usually be differences between
projected and actual results, because events and circumstances frequently do not occur as expected and those differences may be material.
4
City of Crystal, Minnesota
Water and Sanitary Sewer Rate Study September 13, 2018
II. Assumptions
Water Fund
• Both scenarios assume fees are inflated at least 3% annually. Scenario 2 assumes additional increases to the
inflationary increase over several years to meet the targets.
• Operating expense inflation is assumed to be 3%.
• An increase in residential users is estimated at an average of 36 users from 2019 – 2028 based on estimated
population increase estimates for 2018 - 2025 provided by the City. Additional billing revenues is assumed at the average consumption rate of 9,000 gallons for water quarterly.
• Planned acquisition of capital assets is taken from the City CIP and the average for those five years is used as an estimate for years 2024 through 2028.
• The City currently charges a State Water Testing Fee of $1.59 per quarter. This fee is not included in the
calculations as it is pass-through revenue.
• The projections are based on a Meter Fee assumed to be $6.03 for a 5/8 inch meter as indicated in the table
below. It is recommended the City charge a Meter Fee based on meter size with increases based on an equivalent meter ratio. A sample table is presented below.
Meter Size
Equivalent
Meter Ratio
Proposed
Meter Fee
5/8-Inch 1.0 6.03$
3/4-Inch 1.1 6.63
1-Inch 1.4 8.44
1 1/2-Inch 1.8 10.85
2-Inch 2.9 17.47
3-Inch 11.0 66.28
4-Inch 14.0 84.36
6-Inch 21.0 126.54
8-Inch 29.0 174.74
• Target cash reserve will be set at 100% of the following year’s debt service and average capital and 50%
of the following years operating expenses. The Water utility currently does not have any debt. Based on the current state, the cash balance will not be sufficient to meet the target and operating cash will not
generate enough surplus to cover the following year’s operating expenses. Scenario 2 creates positive cash flow sufficient to hit the targeted cash balance by the end of the projection.
5
City of Crystal, Minnesota
Water and Sanitary Sewer Rate Study September 13, 2018
II. Assumptions (Continued)
Sanitary Sewer Fund
• Both scenarios assume fees are inflated at least 3% annually. Scenario 2 assumes additional increases to the
rates are applied over several periods.
• Operating expense inflation is assumed to be 3%.
• An increase in residential users is estimated at an average of 36 users from 2019 – 2028 based on estimated population increase estimates for 2018 - 2025 provided by the City. Additional billing revenues is assumed at the
average consumption rate for water of 9,000 gallons based on the winter water consumption average rate for the
months of November, December, January, February and March of 2017.
• Planned acquisition of capital assets is taken from the City CIP and the average for those five years is used as an
estimate for years 2024 through 2028.
• Target cash reserve will be set at 100% of the following year’s debt service and average capital and 50%
of the following years operating expenses. The Sanitary Sewer utility does not have any debt. Based on the current state, the cash balance will not be sufficient to meet the target and operating cash will not
generate enough surplus to cover the following year’s operating expenses. Scenario 2 creates positive cash flow sufficient to hit the targeted cash balance by the end of the projection.
A schedule of the planned capital projects are listed below.
The assumption is that the City will be doing these projects at some point during the projection period.
Water 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
6235 -Gate Valve and Hydrant replacement 75,000$ -$ 75,000$ -$ 75,000$ -$ -$ -$ -$ -$
6207 - Upgrade Sensus meter software - 30,000 - - - - - - - -
6220- Water main replacement/relining 600,000 600,000 600,000 400,000 600,000 600,000 600,000 600,000 600,000 600,000
June Ave water main replacement (with Blue Line)- - - 200,000 - - - - - -
6205 - Water Utility Replace #432 - 2008 Ford F150 50,000 - - - - - - - - -
6237- water utility Replace #434 - 1996 Air Compressor - - - - 30,000 - - - - -
725,000$ 630,000$ 675,000$ 600,000$ 705,000$ 600,000$ 600,000$ 600,000$ 600,000$ 600,000$
667,000$
Total Water Fund Capital
Average annual cost over a 5 year period
Sewer 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
6504 - Sanitary Sewer Replacement (lining, dig up)600,000$ 600,000$ 600,000$ 600,000$ 600,000$ 600,000$ 600,000$ 600,000$ 600,000$ 600,000$
Install Pad mount Generator at West Lift Station - 50,000 - - - - - - - -
20 Kw portable generator with light tower (replace existing 37kW)- - - 20,000 - - - - - -
Total Sewer Fund Capital 600,000$ 650,000$ 600,000$ 620,000$ 600,000$ 600,000$ 600,000$ 600,000$ 600,000$ 600,000$
Average annual cost over a 5 year period 614,000$
6
City of Crystal, Minnesota
Water and Sanitary Sewer Rate Study September 13, 2018
II. Assumptions (Continued)
A schedule of the projected increase in billing revenue from new residents for the Residential customer class is presented below.
INCREASE IN BILLING REVENUE
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Estimated increase in residential users 35 36 24 48 36 36 36 36
Average (based on 2019 - 2025)36 36 36 36 36 36 36 36 36 36
Total Estimated Population 22,640 22,676 22,700 22,748 22,784 22,820 22,856 22,892
Average residential quarterly bill (10,000 gallons)
Water 76.91$ 79.21$ 85.84$ 93.10$ 95.89$ 98.77$ 101.73$ 104.78$ 107.93$ 111.16$
Sewer 67.86 74.65 81.82 89.70 98.36 101.31 104.35 107.48 110.71 114.03
Annual increase in billing revenue
Water -$ 11,075$ 11,407$ 12,362$ 13,406$ 13,808$ 14,223$ 14,649$ 15,089$ 15,541$ 16,008$
Sewer - 9,772 10,749 11,782 12,917 14,164 14,589 15,027 15,478 15,942 16,420
7
City of Crystal, Minnesota
Water and Sanitary Sewer Rate Study September 13, 2018
III. Water Rate Study
Water Utilities Operating Fund
Goal
• The Water fund will maintain a targeted cash balance sufficient to cover operations, capital and debt service.
Targeted cash balance for the fund refers to the following years’ debt service obligations well as 50 percent of estimated operating costs.
Rates A summary of the current rates and proposed rates are listed below. Allowing for annual inflationary increase in rates will
not result in cash flows necessary to achieve the annual targets. Scenario 2 shows the proposed rates that will result in cash flows to meet the annual targets.
Scenario 2 - Proposed Rates
Proposed RatesWater - Residential Current 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Quarterly bill based on 9,000 gallons 56.10$ 76.91$ 79.21$ 85.84$ 93.10$ 95.89$ 98.77$ 101.73$ 104.78$ 107.93$ 111.16$
Quarterly $ increase for a 9,000 gallon user 20.81 2.31 6.63 7.25 2.79 2.88 2.96 3.05 3.14 3.24
Annual $ increase for an average 9,000 gallon user 83.23 9.23 26.52 29.02 11.17 11.51 11.85 12.21 12.57 12.95
Base Fee 4.80$ 11.89$ 12.24$ 12.61$ 12.99$ 13.38$ 13.78$ 14.19$ 14.62$ 15.06$ 15.51$
Meter Fee -$ 6.03$ 6.21$ 6.39$ 6.58$ 6.78$ 6.99$ 7.19$ 7.41$ 7.63$ 7.86$
Consumption Fee - Per 1,000 gallons
0 30,000 5.70$ 6.56$ 6.75$ 7.43$ 8.17$ 8.41$ 8.67$ 8.93$ 9.19$ 9.47$ 9.75$
30,001 60,000 6.30$ 7.25$ 7.46$ 8.21$ 9.03$ 9.30$ 9.58$ 9.87$ 10.16$ 10.47$ 10.78$
60,001 999,999,999 6.60$ 7.59$ 7.82$ 8.60$ 9.46$ 9.74$ 10.04$ 10.34$ 10.65$ 10.97$ 11.30$
Scenario 2 - Proposed Rates
Proposed Rates
Water - Commercial Current 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Quarterly bill based on 14,000 gallons 84.60$ 109.68$ 112.97$ 122.98$ 133.95$ 137.96$ 142.10$ 146.37$ 150.76$ 155.28$ 159.94$
Quarterly $ increase for a 14,000 gallon user 25.08 3.29 10.01 10.97 4.02 4.14 4.26 4.39 4.52 4.66
Annual $ increase for an average 14,000 gallon user 100.33 13.16 40.02 43.87 16.07 16.56 17.05 17.56 18.09 18.63
Base Fee 4.80$ 11.89$ 12.24$ 12.61$ 12.99$ 13.38$ 13.78$ 14.19$ 14.62$ 15.06$ 15.51$
Meter Fee -$ 6.03$ 6.21$ 6.39$ 6.58$ 6.78$ 6.99$ 7.19$ 7.41$ 7.63$ 7.86$
Consumption Fee - Per 1,000 gallons
0 30,000 5.70$ 6.56$ 6.75$ 7.43$ 8.17$ 8.41$ 8.67$ 8.93$ 9.19$ 9.47$ 9.75$
30,001 60,000 6.30$ 7.25$ 7.46$ 8.21$ 9.03$ 9.30$ 9.58$ 9.87$ 10.16$ 10.47$ 10.78$
60,001 999,999,999 6.60$ 7.59$ 7.82$ 8.60$ 9.46$ 9.74$ 10.04$ 10.34$ 10.65$ 10.97$ 11.30$
8
City of Crystal, Minnesota
Water and Sanitary Sewer Rate Study September 13, 2018
III. Water Rate Study (Continued)
Water Utilities Operating Fund (Continued)
The table below summarizes comparable communities’ quarterly Residential bill if average usage is 9,000 gallons. Currently, Crystal has Water rates in the middle of the comparable communities, increasing the Water rates as proposed in Scenario 2 will allow Crystal’s Water rates to remain within comparable range.
City Quarterly Bill ($)
Brooklyn Park 23.80$
Brooklyn Center 36.60
Crystal 51.30
Golden Valley 56.70
Crystal (Scenario 2)76.91
New Hope 77.52
WATER
$23.80
36.60
51.30 56.70
76.91 77.52
$0.00
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
$70.00
$80.00
$90.00
Brooklyn Park Brooklyn
Center
Crystal Golden Valley Crystal
(Scenario 2)
New Hope
COMPARISON OF QUARTERLY WATER BILLINGS
(Assumesusage of 9,000 gallons)
9
City of Crystal, Minnesota
Water and Sanitary Sewer Rate Study September 13, 2018
III. Water Rate Study (Continued)
Water Utilities Operating Fund (Continued)
Scenario 1 - Current rates inflated at 3% annually
Scenario 2 - Proposed rates
10
City of Crystal, Minnesota
Water and Sanitary Sewer Rate Study September 13, 2018
III. Water Rate Study (Continued)
Water Utilities Operating Fund (Continued)
Scenario 1 - Current rates inflated at 3% annually
Scenario 2 - Proposed rates
11
City of Crystal, Minnesota
Water and Sanitary Sewer Rate Study September 13, 2018
III. Water Rate Study (Continued)
Water Utilities Operating Fund (Continued)
As evidenced by the graphs above, the City’s Water rates are not sufficient to sustain the existing cash balance. Revenues do not cover operating expenses and planned capital. With gradual increases in rates along with inflationary
increases as shown in Scenario 2, revenues will increase over the years and achieve sufficient cash reserves over the life of the projection.
12
City of Crystal, Minnesota
Water and Sanitary Sewer Rate Study September 13, 2018
III. Sanitary Sewer Rate Study (Continued)
Sanitary Sewer Utilities Operating Fund
Goal
• The Sanitary Sewer Operating fund will maintain a sufficient working capital balance. Targeted cash balance for
the fund refers to the following years’ debt service obligations well as 50 percent of estimated operating costs. Rates
A summary of the current rates and proposed rates are listed below. Currently Sanitary Sewer is a flat fee structure, the proposed rates are based on a consumption fee structure with consumption based on the estimated average water
consumption over the winter months. Converting to a consumption based fee structure as well as annual inflationary increases will result in cash flows that will achieve the annual targets in Scenario 2.
Scenario 2 - Proposed Rates
Proposed Rates
Sanitary Sewer - Residential Current 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Quarterly bill based on 9,000 gallons 61.22$ 67.86$ 74.65$ 81.82$ 89.70$ 98.36$ 101.31$ 104.35$ 107.48$ 110.71$ 114.03$
Quarterly $ increase for a 9,000 gallon user 6.64 6.79 7.17 7.88 8.66 2.95 3.04 3.13 3.22 3.32
Annual $ increase for an average 9,000 gallon user 26.56 27.14 28.69 31.53 34.65 11.80 12.16 12.52 12.90 13.29
Base Fee 61.22$ 64.08$ 70.49$ 77.54$ 85.29$ 93.82$ 96.63$ 99.53$ 102.52$ 105.59$ 108.76$
Meter Fee -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$
Consumption Fee - Per 1,000 gallons
0 30,000 -$ 0.42$ 0.46$ 0.48$ 0.49$ 0.50$ 0.52$ 0.54$ 0.55$ 0.57$ 0.59$
30,001 60,000 -$ 0.60$ 0.66$ 0.68$ 0.70$ 0.72$ 0.74$ 0.77$ 0.79$ 0.81$ 0.84$
60,001 999,999,999 -$ 0.78$ 0.86$ 0.88$ 0.91$ 0.94$ 0.97$ 0.99$ 1.02$ 1.06$ 1.09$
Scenario 2 - Proposed Rates
Proposed Rates
Sanitary Sewer - Commercial Current 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Quarterly bill based on 2,000 gallons 66.56$ 70.49$ 77.54$ 84.80$ 92.77$ 101.52$ 104.57$ 107.70$ 110.94$ 114.26$ 117.69$
Quarterly $ increase for a 2,000 gallon user 3.93 7.05 7.26 7.97 8.75 3.05 3.14 3.23 3.33 3.43
Annual $ increase for an average 2,000 gallon user 15.71 28.20 29.04 31.89 35.01 12.18 12.55 12.92 13.31 13.71
Base Fee 61.22$ 64.08$ 70.49$ 77.54$ 85.29$ 93.82$ 96.63$ 99.53$ 102.52$ 105.59$ 108.76$
Meter Fee -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$
Consumption Fee - Per 1,000 gallons
0 30,000 2.67$ 3.20$ 3.52$ 3.63$ 3.74$ 3.85$ 3.97$ 4.09$ 4.21$ 4.33$ 4.46$
30,001 60,000 2.67$ 5.40$ 5.94$ 6.12$ 6.30$ 6.49$ 6.69$ 6.89$ 7.09$ 7.31$ 7.52$
60,001 999,999,999 2.67$ 7.44$ 8.18$ 8.43$ 8.68$ 8.94$ 9.21$ 9.49$ 9.77$ 10.07$ 10.37$
13
City of Crystal, Minnesota
Water and Sanitary Sewer Rate Study September 13, 2018
III. Sanitary Sewer Rate Study (Continued)
Sanitary Sewer Utilities Operating Fund (Continued)
The table below summarizes comparable communities quarterly Residential bill if average Sanitary Sewer is billed based on water consumption and at an average rate of 9,000 gallons per quarter. Currently, Crystal has Sanitary Sewer rates in
the middle of the comparable communities, increase the Sanitary Sewer rates as proposed in Scenario 2 will allow Crystal’s Water rates to meet the target cash reserves over the life of the projection and remain within comparable range.
City Quarterly Bill ($)
Brooklyn Park 36.45$
New Hope 55.02
Crystal 61.22
Crystal (Scenario 2)67.86
Golden Valley 73.15
Brooklyn Center 82.42
SEWER
$36.45
55.02
61.22
67.86 73.15
82.42
$0.00
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
$70.00
$80.00
$90.00
Brooklyn Park New Hope Crystal Crystal(Scenario 2)Golden Valley BrooklynCenter
COMPARISON OF QUARTERLY SEWER BILLINGS
(Assumes average usage of 9,000 gallons)
14
City of Crystal, Minnesota
Water and Sanitary Sewer Rate Study September 13, 2018
III. Sanitary Sewer Rate Study (Continued)
Sanitary Sewer Utilities Operating Fund (Continued)
Scenario 1 - Current rates inflated at 3% annually
Scenario 2 – Proposed rates
15
City of Crystal, Minnesota
Water and Sanitary Sewer Rate Study September 13, 2018
III. Sanitary Sewer Rate Study (Continued)
Sanitary Sewer Utilities Operating Fund (Continued)
Current rates inflated at 3% annually
Scenario 2 – Proposed rates
$(2,500,000)
$(2,000,000)
$(1,500,000)
$(1,000,000)
$(500,000)
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Projected ending cash balance (current rates) compared to
targeted cash reserve
Cash Balance Assuming Recommended Increases Target Cash Reserve
Target Cash Reserve is the amount needed to fund operations and capital projects.
16
City of Crystal, Minnesota
Water and Sanitary Sewer Rate Study September 13, 2018
III. Sanitary Sewer Rate Study (Continued)
Sanitary Sewer Utilities Operating Fund (Continued)
As evidenced by the graphs above, the City’s Sanitary Sewer rates are insufficient to sustain the existing cash balance. Revenues do not cover operating expenses and planned capital. With gradual increases in rates along with inflationary
increases as shown in Scenario 2, revenues will increase over the years and achieve sufficient cash reserves over the life of the projection.
17
City of Crystal, Minnesota
Water and Sanitary Sewer Rate Study September 13, 2018
Summary
Water and Sanitary Sewer
As evidenced in the discussions above, it appears the City’s utility rates are competitive with similar communities. An
increase in rates will help the Water and Sanitary Sewer utilities achieve sufficient cash flows to meet the targets.
The charts below present the total quarterly Water and Sanitary Sewer bill for an average Residential customer under
Scenario 1 with inflationary increases and the proposed Scenario 2 with varied increases.
Scenario 1 - Current rates inflated at 3% annually
Scenario 2 – Proposed rates
18
City of Crystal, Minnesota
Water and Sanitary Sewer Rate Study September 13, 2018
Summary (Continued)
Water and Sanitary Sewer Rate Study (Continued)
The total quarterly Water and Sanitary Sewer bill for an average Residential customer under the proposed Scenario 2 in comparison to comparable communities is presented below.
(Please note: The rates presented below are the current 2018 rates in comparison to the proposed 2019 rates for the City of Crystal in Scenario 2).
23.80
51.30 36.60 56.70 77.52 76.91 36.45
61.22 82.42
73.15
55.02 67.86
$0
$20
$40
$60
$80
$100
$120
$140
$160
Brooklyn Park Crystal Brooklyn Center Golden Valley New Hope Crystal (Scenario
2)
Comparison of Total Quarterly Residential Water and Sewer Bill Under Scenario 2 (Average 9,000 gallons)
Water Sewer
19
City of Crystal, Minnesota
Water and Sanitary Sewer Rate Study September 13, 2018
Summary (Continued)
Storm Sewer
Rates
A summary of the current rates and proposed rate increases of one dollar per quarter as discussed by Council.
Scenario 2 - Proposed Rates
Proposed Rates
Storm Sewer - Residential Current 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Proposed quarterly increase on fixed rates 1.00$ 1.00$ 1.00$ 1.00$ 1.00$ 1.00$ 1.00$ 1.00$ 1.00$ 1.00$ 1.00$
Quarterly bill - Q1 18.15$ 22.15$ 26.15$ 30.15$ 34.15$ 38.15$ 42.15$ 46.15$ 50.15$ 54.15$ 58.15$
Quarterly bill - Q2 19.15$ 23.15$ 27.15$ 31.15$ 35.15$ 39.15$ 43.15$ 47.15$ 51.15$ 55.15$ 59.15$
Quarterly bill - Q3 20.15$ 24.15$ 28.15$ 32.15$ 36.15$ 40.15$ 44.15$ 48.15$ 52.15$ 56.15$ 60.15$
Quarterly bill - Q4 21.15$ 25.15$ 29.15$ 33.15$ 37.15$ 41.15$ 45.15$ 49.15$ 53.15$ 57.15$ 61.15$
Annual $ increase 4.00$ 4.00$ 4.00$ 4.00$ 4.00$ 4.00$ 4.00$ 4.00$ 4.00$ 4.00$
The table below presents financial projections based on discussions held by the City Council during the 2018 budget
process.
2018 2019 2020 2021 2022 2023
Estimated Estimated Estimated Estimated Estimated Estimated
Cash Flows from Operating Activities
Receipts from customers and users (5% growth assumption)1,095,142$ 1,149,899$ 1,207,394$ 1,267,763$ 1,331,151$ 1,397,709$
Payments to suppliers and employees (5% growth assumption)(459,183) (482,142) (506,249) (531,562) (558,140) (586,047)
Net Cash Provided (Used) by Operating Activities 635,959 667,757 701,145 736,202 773,012 811,662
Cash Flows from Noncapital Financing Activities
Transfers out (46,782) (49,326) (50,997) (53,547) (56,224) (59,035)
Net Cash Provided (Used) by Noncapital Financing Activities (46,782) (49,326) (50,997) (53,547) (56,224) (59,035)
Cash Flows from Capital and Related Financing Activities
Acquisition of capital assets (1,000,000) (2,750,000) (50,000) (800,000) (650,000) (1,550,000)
Intergovernmental revenue (Watershed, Met Council, MNDNR and other)1,000,000 1,325,000 - - 50,000 1,250,000
Net Cash Provided (Used) by Capital and Related Financing Activities - (1,425,000) (50,000) (800,000) (600,000) (300,000)
Cash Flows from Investing Activities
Investment earnings 7,879 13,850 5,922 11,983 10,930 12,207
Net Increase (Decrease) in Cash and Cash Equivalents 597,056 (792,720) 606,070 (105,362) 127,717 464,834
Cash and Cash Equivalents, January 1 787,914 1,384,970 592,250 1,198,320 1,092,958 1,220,675
Cash and Cash Equivalents, December 31 1,384,970$ 592,250$ 1,198,320$ 1,092,958$ 1,220,675$ 1,685,509$
Storm Sewer Fund Projected Activity
20
SUPPLEMENTARY INFORMATION
CITY OF CRYSTAL
CRYSTAL, MINNESOTA
21
City of Crystal, Minnesota
Water FundCash Flow Projections - Scenario 1 - Current StateFor the Years Ending December 31, 2016 through 2028
RATE STUDY PROJECTIONSEstimatedEstimatedEstimatedEstimatedEstimatedEstimated Estimated Estimated Estimated Estimated Estimated2016201720182019202020212022202320242025202620272028
Cash Flows from Operating ActivitiesReceipts from customers and users 3,397,744$ 3,398,864$ 3,387,468$ 3,374,512$ 3,475,747$ 3,580,020$ 3,687,420$ 3,798,043$ 3,911,984$ 4,029,344$ 4,150,224$ 4,274,731$ 4,402,973$ Payments to suppliers (2,513,712) (2,259,536) (2,788,377) (2,872,029) (2,958,190) (3,046,935) (3,138,343) (3,232,494) (3,329,468) (3,429,352) (3,532,233) (3,638,200) (3,747,346) Payments to employees (361,105) (375,394) (377,973) (396,872) (416,715) (437,551) (459,429) (482,400) (506,520) (531,846) (558,438) (586,360) (615,678) Net cash from operating activities 522,927 763,934 221,118 105,612 100,843 95,533 89,648 83,149 75,996 68,145 59,553 50,171 39,948
Cash Flows from Noncapital Financing ActivitiesTransfers to other funds (139,278) (140,188) (181,604) (190,684) (200,218) (210,229) (220,741) (231,778) (243,367) (255,535) (268,312) (281,727) (295,814) Net cash from noncapital financing activities (139,278) (140,188) (181,604) (190,684) (200,218) (210,229) (220,741) (231,778) (243,367) (255,535) (268,312) (281,727) (295,814)
Cash Flows from Capital and Related Financing ActivitiesChange in assessments receivable (27,419) (4,030) - - - - - - - - - - - Grants and contributions 1,265 - - - - - - - - - - - - Acquisition of capital assets (284,093) (52,353) (50,000) (746,750) (648,900) (695,250) (618,000) (726,150) (687,010) (687,010) (687,010) (687,010) (687,010) Proceeds from disposal of capital assets 2,147 9,964 - - - - - - - - - - - Change in advance from other funds (60,000) (60,000) (60,000) (60,000) (60,000) (60,000) (60,000) (60,000) (60,000) (37,119) - - - Interest paid on advances (10,800) (9,600) (8,400) (7,368) (6,315) (5,242) (4,147) (3,029) (1,890) (728) - - - Net cash from capital and related financing activities (378,900) (116,019) (118,400) (814,118) (715,215) (760,492) (682,147) (789,179) (748,900) (724,857) (687,010) (687,010) (687,010)
Cash Flows from Investing ActivitiesInterest and dividends received 6,560 6,713 9,530 8,837 - - - - - - - - - Net cash from investing activities 6,560 6,713 9,530 8,837 - - - - - - - - -
Net Increase (Decrease)in Cash and Cash Equivalents 11,309 514,440 (69,356) (890,354) (814,591) (875,188) (813,239) (937,807) (916,271) (912,247) (895,769) (918,567) (942,875)
Cash and Cash Equivalents, January 1 427,290 438,599 953,039 883,683 (6,671) (821,262) (1,696,449) (2,509,689) (3,447,496) (4,363,767) (5,276,014) (6,171,783) (7,090,350)
Cash and Cash Equivalents, December 31 438,599$ 953,039$ 883,683$ (6,671)$ (821,262)$ (1,696,449)$ (2,509,689)$ (3,447,496)$ (4,363,767)$ (5,276,014)$ (6,171,783)$ (7,090,350)$ (8,033,225)$
Target Cash Reserve 1,317,465$ 1,583,175$ 2,301,450$ 2,354,452$ 2,409,243$ 2,465,886$ 2,524,447$ 2,584,994$ 2,647,599$ 2,712,336$ 2,779,280$ 2,848,512$
Cash in Excess of Reserve -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$
Average quarterly bill (9,000 gallons)54.30$ 56.10$ 57.78$ 59.52$ 61.30$ 63.14$ 65.04$ 66.99$ 69.00$ 71.07$ 73.20$ 75.39$
Average quarterly dollar increase 1.80$ 1.68$ 1.73$ 1.79$ 1.84$ 1.89$ 1.95$ 2.01$ 2.07$ 2.13$ 2.20$ Average annual dollar increase 7.20$ 6.73$ 6.93$ 7.14$ 7.36$ 7.58$ 7.80$ 8.04$ 8.28$ 8.53$ 8.78$ Five year average capital expenses 667,000$ 667,000$ 667,000$ 667,000$ 667,000$ 667,000$ 667,000$ 667,000$ 667,000$ 667,000$ 667,000$
Actual
22
City of Crystal, Minnesota
Water FundCash Flow Projections - Scenario 2 - Increase Spread Over Several Periods to Achieve TargetFor the Years Ending December 31, 2016 Through 2028
RATE STUDY PROJECTIONSEstimatedEstimatedEstimatedEstimatedEstimatedEstimated Estimated Estimated Estimated Estimated201620172018201920202021202220232024202520262027
Cash Flows from Operating ActivitiesReceipts from customers and users 3,397,744$ 3,398,864$ 3,387,468$ 4,109,296$ 4,232,575$ 4,614,423$ 5,033,213$ 5,184,209$ 5,339,736$ 5,499,928$ 5,664,926$ 5,834,873$ Payments to suppliers (2,513,712) (2,259,536) (2,788,377) (2,872,029) (2,958,190) (3,046,935) (3,138,343) (3,232,494) (3,329,468) (3,429,352) (3,532,233) (3,638,200)
Payments to employees (361,105) (375,394) (377,973) (396,872) (416,715) (437,551) (459,429) (482,400) (506,520) (531,846) (558,438) (586,360)
Net cash from operating activities 522,927 763,934 221,118 840,396 857,670 1,129,937 1,435,441 1,469,316 1,503,747 1,538,729 1,574,254 1,610,313
Cash Flows from Noncapital Financing ActivitiesTransfers to other funds (139,278) (140,188) (181,604) (190,684) (200,218) (210,229) (220,741) (231,778) (243,367) (255,535) (268,312) (281,727) Net cash from noncapital financing activities (139,278) (140,188) (181,604) (190,684) (200,218) (210,229) (220,741) (231,778) (243,367) (255,535) (268,312) (281,727)
Cash Flows from Capital and Related Financing Activities
Change in assessments receivable (27,419) (4,030) - - - - - - - - - - Grants and contributions 1,265 - - - - - - - - - - - Acquisition of capital assets (284,093) (52,353) (50,000) (746,750) (648,900) (695,250) (618,000) (726,150) (687,010) (687,010) (687,010) (687,010) Proceeds from sale of capital assets 2,147 9,964 - - - - - - - - - - Change in advance from other funds (60,000) (60,000) (60,000) (60,000) (60,000) (60,000) (60,000) (60,000) (60,000) (60,000) (37,119) -
Interest paid on advances (10,800) (9,600) (8,400) (7,368) (6,315) (5,242) (4,147) (3,029) (1,890) (728) - -
Net cash from capital and related financing activities (378,900) (116,019) (118,400) (814,118) (715,215) (760,492) (682,147) (789,179) (748,900) (747,738) (724,129) (687,010)
Cash Flows from Investing ActivitiesInterest and dividends received 6,560 6,713 9,530 8,837 7,281 6,776 8,436 13,846 18,468 23,768 29,360 35,472 Net cash from investing activities 6,560 6,713 9,530 8,837 7,281 6,776 8,436 13,846 18,468 23,768 29,360 35,472
Net Increase (Decrease)
in Cash and Cash Equivalents 11,309 514,440 (69,356) (155,569) (50,482) 165,992 540,990 462,205 529,949 559,224 611,173 677,047
Cash and Cash Equivalents, January 1 427,290 438,599 953,039 883,683 728,114 677,632 843,623 1,384,613 1,846,818 2,376,767 2,935,991 3,547,164
Cash and Cash Equivalents, December 31 438,599$ 953,039$ 883,683$ 728,114$ 677,632$ 843,623$ 1,384,613$ 1,846,818$ 2,376,767$ 2,935,991$ 3,547,164$ 4,224,211$
Target Cash Reserve 1,317,465$ 1,583,175$ 2,301,450$ 2,354,452$ 2,409,243$ 2,465,886$ 2,524,447$ 2,584,994$ 2,647,599$ 2,712,336$ 2,779,280$ 2,848,512$
Cash in Excess of Reserve -$ -$ -$ -$ -$ -$ -$ -$ -$ 223,655$ 767,884$ 1,375,699$
Average quarterly bill (9,000 gallons)54.30$ 56.10$ 76.91$ 79.21$ 85.84$ 93.10$ 95.89$ 98.77$ 101.73$ 104.78$ 107.93$
Average quarterly dollar increase 1.80$ 20.81$ 2.31$ 6.63$ 7.25$ 2.79$ 2.88$ 2.96$ 3.05$ 3.14$ Average annual dollar increase 7.20$ 83.23$ 9.23$ 26.52$ 29.02$ 11.17$ 11.51$ 11.85$ 12.21$ 12.57$
Actual
23
City of Crystal, Minnesota
Sanitary Sewer FundCash Flow Projections - Scenario 1 - Current State
For the Years Ending December 31, 2016 through 2028
Estimated Estimated Estimated Estimated Estimated Estimated Estimated Estimated Estimated Estimated Estimated
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Cash Flows from Operating ActivitiesReceipts from customers and users 2,182,590$ 2,295,048$ 2,431,000$ 2,503,930$ 2,579,047$ 2,656,419$ 2,736,111$ 2,818,195$ 2,902,741$ 2,989,823$ 3,079,517$ 3,171,903$ 3,267,060$ Payments to suppliers (1,658,085) (1,558,509) (1,703,988) (1,755,108) (1,807,761) (1,861,994) (1,917,853) (1,975,389) (2,034,651) (2,095,690) (2,158,561) (2,223,318) (2,290,017)
Payments to employees (361,106) (373,108) (376,509) (395,334) (415,101) (435,856) (457,649) (480,531) (504,558) (529,786) (556,275) (584,089) (613,293)
Net cash from operating activities 163,399 363,431 350,503 353,488 356,185 358,569 360,609 362,274 363,532 364,347 364,681 364,496 363,749
Cash Flows from Noncapital Financing Activities
Transfers to other funds (139,278) (140,188) (181,604) (190,684) (200,218) (210,229) (220,741) (231,778) (243,367) (255,535) (268,312) (281,727) (295,814)
Net cash from noncapital financing activities (139,278) (140,188) (181,604) (190,684) (200,218) (210,229) (220,741) (231,778) (243,367) (255,535) (268,312) (281,727) (295,814)
Cash Flows from Capital and Related Financing Activities
Grants and contributions 52,037 - - - - - - - - - - -
Acquisition of capital assets (574,296) (470,343) (290,000) (618,000) (669,500) (618,000) (618,000) (618,000) (632,420) (632,420) (632,420) (632,420) (632,420) Proceeds from sale of capital assets 2,147 - - - - - - - - - - - - Change in advance due to other funds 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 18,560 - - -
Net cash from capital and related financing activities (490,112) (440,343) (260,000) (588,000) (639,500) (588,000) (588,000) (588,000) (602,420) (613,861) (632,420) (632,420) (632,420)
Cash Flows from Investing ActivitiesInterest and dividends received 29,660 25,733 25,411 24,238 19,702 14,527 9,728 4,785 945 364 - - - Net cash from investing activities 29,660 25,733 25,411 24,238 19,702 14,527 9,728 4,785 945 364 - - -
Net Increase (Decrease)
in Cash and Cash Equivalents (436,331) (191,367) (65,691) (400,959) (463,831) (425,133) (438,404) (452,718) (481,310) (504,685) (536,050) (549,651) (564,484)
Cash and Cash Equivalents, January 1 2,748,774 2,312,443 2,121,076 2,055,385 1,654,427 1,190,595 765,462 327,058 (125,660) (606,970) (1,111,655) (1,647,705) (2,197,356)
Cash and Cash Equivalents, December 31 2,312,443$ 2,121,076$ 2,055,385$ 1,654,427$ 1,190,595$ 765,462$ 327,058$ (125,660)$ (606,970)$ (1,111,655)$ (1,647,705)$ (2,197,356)$ (2,761,841)$
Target Cash Reserve 965,809$ 1,040,248$ 1,689,221$ 1,725,431$ 1,762,925$ 1,801,751$ 1,841,960$ 1,883,604$ 1,926,738$ 1,971,418$ 2,017,703$ 2,065,655$
Cash in Excess of Reserve 1,346,635$ 1,080,828$ 366,164$ -$ -$ -$ -$ -$ -$ -$ -$ -$
Average quarterly bill (9,000 gallons)55.15$ 61.22$ 63.06$ 64.95$ 66.90$ 68.90$ 70.97$ 73.10$ 75.29$ 77.55$ 79.88$ 82.27$
Average quarterly dollar increase 6.07$ 1.84$ 1.89$ 1.95$ 2.01$ 2.07$ 2.13$ 2.19$ 2.26$ 2.33$ 2.40$
Average annual dollar increase 24.28$ 7.35$ 7.57$ 7.79$ 8.03$ 8.27$ 8.52$ 8.77$ 9.04$ 9.31$ 9.59$ Five year average capital expenses 614,000$ 614,000$ 614,000$ 614,000$ 614,000$ 614,000$ 614,000$ 614,000$ 614,000$ 614,000$ 614,000$
Actual
24
City of Crystal, Minnesota
Sanitary Sewer Fund
Cash Flow Projections - Scenario 2 - Increase Spread Over Several Periods to Achieve TargetFor the Years Ending December 31, 2016 Through 2028
Estimated Estimated Estimated Estimated Estimated Estimated Estimated Estimated Estimated Estimated
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Cash Flows from Operating ActivitiesReceipts from customers and users 2,182,590$ 2,295,048$ 2,431,000$ 2,502,963$ 2,753,259$ 2,991,263$ 3,251,948$ 3,537,548$ 3,643,674$ 3,752,985$ 3,865,574$ 3,981,541$
Payments to suppliers (1,658,085) (1,558,509) (1,703,988) (1,755,108) (1,807,761) (1,861,994) (1,917,853) (1,975,389) (2,034,651) (2,095,690) (2,158,561) (2,223,318)
Payments to employees (361,106) (373,108) (376,509) (395,334) (415,101) (435,856) (457,649) (480,531) (504,558) (529,786) (556,275) (584,089)
Net cash from operating activities 163,399 363,431 350,503 352,521 530,397 693,413 876,445 1,081,627 1,104,466 1,127,509 1,150,738 1,174,135
Cash Flows from Noncapital Financing ActivitiesTransfers to other funds (139,278) (140,188) (181,604) (190,684) (200,218) (210,229) (220,741) (231,778) (243,367) (255,535) (268,312) (281,727)
Net cash from noncapital financing activities (139,278) (140,188) (181,604) (190,684) (200,218) (210,229) (220,741) (231,778) (243,367) (255,535) (268,312) (281,727)
Cash Flows from Capital and Related Financing Activities
Grants and contributions 52,037 - - - - - - - - - - - Acquisition of capital assets (574,296) (470,343) (290,000) (618,000) (669,500) (618,000) (618,000) (618,000) (632,420) (632,420) (632,420) (632,420) Proceeds from sale of capital assets 2,147 - - - - - - - - - - -
Change in advance due to other funds 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 18,560 - -
Net cash from capital and related financing activities (490,112) (440,343) (260,000) (588,000) (639,500) (588,000) (588,000) (588,000) (602,420) (613,861) (632,420) (632,420)
Cash Flows from Investing Activities
Interest and dividends received 29,660 25,733 25,411 24,238 19,692 16,259 14,826 15,093 17,292 19,471 21,883 24,602 Net cash from investing activities 29,660 25,733 25,411 24,238 19,692 16,259 14,826 15,093 17,292 19,471 21,883 24,602
Net Increase (Decrease)in Cash and Cash Equivalents (436,331) (191,367) (65,691) (401,926) (289,629) (88,557) 82,531 276,942 275,971 277,584 271,889 284,589
Cash and Cash Equivalents, January 1 2,748,774 2,312,443 2,121,076 2,055,385 1,653,460 1,363,831 1,275,274 1,357,805 1,634,747 1,910,718 2,188,303 2,460,192
Cash and Cash Equivalents, December 31 2,312,443$ 2,121,076$ 2,055,385$ 1,653,460$ 1,363,831$ 1,275,274$ 1,357,805$ 1,634,747$ 1,910,718$ 2,188,303$ 2,460,192$ 2,744,781$
Target Cash Reserve 965,809$ 1,040,248$ 1,689,221$ 1,725,431$ 1,762,925$ 1,801,751$ 1,841,960$ 1,883,604$ 1,926,738$ 1,971,418$ 2,017,703$ 2,065,655$
Cash in Excess of Reserve 1,346,635$ 1,080,828$ 366,164$ -$ -$ -$ -$ -$ -$ 216,884$ 442,488$ 679,126$
Average quarterly bill (9,000 gallons)55.15$ 61.22$ 67.86$ 74.65$ 81.82$ 89.70$ 98.36$ 101.31$ 104.35$ 107.48$ 110.71$
Average quarterly dollar increase 6.07$ 6.64$ 6.79$ 7.17$ 7.88$ 8.66$ 2.95$ 3.04$ 3.13$ 3.22$ Average annual dollar increase 24.28$ 26.56$ 27.14$ 28.69$ 31.53$ 34.65$ 11.80$ 12.16$ 12.52$ 12.90$
Actual
25