09-24-2018 Council Work Session Packet

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Cable The Cable fund was new for the 2015 budget. The projected revenues are based on current subscriber information and rates. The line item for Internet/Other communications covers the costs associated with streaming and online access of council meetings. It has been increased to pay for the increased cost of our fiber internet connection. Revenue for the fund is in the from franchise fees that are set by the City's franchise agreement with Mediacom. Capital Expenditures in 2019 will include upgrades to the presentation equipment in the Council Chambers. The current cash balance of the fund is $153,373. Rate Study As mentioned above, staff is currently working on a rate study on which to base future utility rates. Projected expenditure budgets have been prepared and the revenues needed to fund the expenses are known. For Water, the current work on the study involves separating the expenses of the North and South water systems to determine if the two systems should have different. The South system provides softened water and the North does not. However, the South system has more connections to spread the water plant overhead costs than the North system does. Staff is also exploring changing the rate increases between usage tiers. We know that the revenue increases need to be around 11%, but there maybe more equitable ways to structure the increase than a system wide rate increase. For Sewer, the revenue increase has been calculated at 4%. In the areas connected to the Long Lake and Wayzata systems, we are charged based on usage for properties that are also connected to water. On some properties this results in the Orono paying a higher amount to the providing city than we are charging the resident. Staff is looking at changing our billing for these areas to be based on the water meter readings. This would be a move away from the flat rate that has always been used.