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Background Information on Enterprise <br /> Systems <br /> Enterprise Funds <br /> Most City operations, such as public works, public safety, administration and parks, are <br /> accounted for under governmental funds, primarily embedded in the General Fund. These <br /> operations usually depend on a variety of revenues, including property taxes, intergovemmental <br /> aid, and charges for services. <br /> Municipal utility funds are considered "enterprise funds." They are intended to be operated as a <br /> private enterprise in which the fee revenue pays for all operations. The City has three utility <br /> funds: water, sewer, and storm sewer. In the City's Comprehensive Annual Financial Report <br /> (CAFR), enterprise funds are segregated funds, recognizing the unique purpose and revenue <br /> streams of these City functions. <br /> In addition to the CAFR segregating the enterprise funds, the City's Capital Improvement Plan <br /> (CIP) distinguishes between projects that will be funded by the enterprise funds, and those <br /> funded by general governmental funds. <br /> The Water Fund: <br /> The City's water is provided by three wells that pumped 112,642,000 gallons in 2008 and served <br /> residents in Orono and some residents in the City of Minnetonka Beach. Additionally, the City <br /> purchases water from the City of Wayzata for residents in the Chevy Chase area. <br /> The State of Minnesota Mandate <br /> In 2008, the State of Minnesota mandated conservation rate structures for all water systems in <br /> the State. All cities in the metropolitan area serving more than 1,000 people are required to <br /> comply with this mandate by January 1, 2010. The City of Orono is required to meet this <br /> deadline by this time. <br /> The Sewer Fund: The Metropolitan Council Influence <br /> The City of Orono participates in the Metropolitan Council Environmental Services (MCES) <br /> sewer system. This means that the City's sanitary sewer system flows to the MCES treatment <br /> plant and the City receives a bill from the MCES for the service. The City does not maintain its <br /> own sanitary sewer treatment plant. Currently, the MCES charge for service is $194.6 per <br /> million gallons for a total charge of $341,400, which is slightly lower than the budget, and is <br /> estimated to remain stable at $341,400 in 2010, and then increase by 5.50% per year. MCES is <br /> currently in a transition period concerning the allocation of system costs. MCES allocates the <br /> cost of the metro area sanitation system to a user city based on the relative percent of that city's <br /> flow into the system. The allocation method may change as the MCES and a user city task force <br /> work through this issue in the coming year. Orono's share of the cost may change by more than <br /> Ur!!;n•Ru�e srudy Page 3 <br /> Citv of Orono, �Lli�t�resotct December•.?009 <br />