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.r- <br />CITY OF MOUND <br />MOUND 5341 MAYWOOD ROAD MOUND, MN 55364 (612) 472-1155 <br />75 YEARS <br />May 21, 1987 <br />TO: ED SHUKLE, CITY MANAGER <br />FROM: JOHN NORMAN, FINANCE DIRECTOR fLINJ <br />RE: WATER FUND CASH BALANCE <br />The watermain extension on County Road 15 is projected to cost $55,000. The <br />effect it would have on the Water Fund cash reserves if expense occured <br />immediately is: <br />April 30th Cash Balance $159,500 <br />Less: Watermain Extension (55,000) <br />$104,500 <br />You also inquired about what this would do to the water rates. In my annual <br />report and the audit the council has been informed about the status of the <br />Water Fund. One of the problems that Greg Skinner and I have discussed, is <br />the condition of a portion of our water system. Part of the watermain on <br />County Road 15 was built in the 1930's. There are other areas of the city <br />water system that are old and will also need to be replaced. The rate <br />structure for the Water Fund should include an amount for capital Improve- <br />ments to the water system. The past few years our water rates have not <br />covered the operations of the Water Fund (the cash balance 12-31-84 was <br />$400,000 and decreased to $220,000 at 12-31-86). <br />In conclusion, we do have the reserves in the Water Fund to cover the <br />watermain replacement on County Road 15. However, the cash reserve will <br />be at the lo:,est level possible for the operation of the Water Fund. <br />The future water rates must be able to maintain and, hopefully, build up <br />the Water Fund cash reserves. We will be looking closely at the Water Fund <br />rates during the 1986 budget process. <br />cc: Greg Skinner <br />JN:Is <br />