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Home My WebLink About2022-09-20 City Council Work Session PacketAgenda City Council Work Session City of Edina, Minnesota Community Room, City Hall Tuesday, September 20, 2022 5:30 PM I.Call To Order II.Roll Call III.2023 Budget and Preliminary Levy and 2023-2028 Capital Improvement Plan (CIP) IV.Overview of Parks & Recreation Enterprises V.Utility Billing Rate Study Update VI.Adjournment The City of Edina wants all residents to be comfortable being part of the public process. If you need assistance in the way of hearing ampli/cation, an interpreter, large-print documents or something else, please call 952-927-8861 72 hours in advance of the meeting. Date: September 20, 2022 Agenda Item #: III. To:Mayor and City Council Item Type: Other From:Alisha McAndrews, Finance Director Item Activity: Subject:2023 Budget and Preliminary Levy and 2023-2028 Capital Improvement Plan (CIP) Discussion CITY OF EDINA 4801 West 50th Street Edina, MN 55424 www.edinamn.gov ACTION REQUESTED: Discussion only. INTRODUCTION: The City Manager will provide Council members with the recommendation for the 2023 Budgets and Preliminary Levy. The presentation will cover the changes that have occurred to the market and the city's operating expenses since council approved the 2022-2023 Biennial Budget at the December 7, 2021 meeting. Staff will ask for Council approval of the preliminary 2023 levy later at the Council meeting. The City Manager will also provide an update on the Capital Improvement Plan recommendation to Council, which includes a levy increase of $1 million specifically for special park improvements in 2023. The City Manager will provide a 2023-2028 CIP recommendation at a later Council meeting. ATTACHMENTS: Description Proposed 2023 Budget and Preliminary Levy CITY OF EDINA Proposed Tax Levies Budget Budget 2019 2020 2021 2022 2023 General Fund Levies General Operating Levy 30,009,121$ 32,021,243$ 33,986,471$ 36,708,036$ 39,820,200$ General Fund Subtotal 30,009,121 32,021,243 33,986,471 36,708,036 39,820,200 Increase From Prior Year (%)5.32%6.71%6.14%8.01%8.48% Arts and Culture Fund Levies Arts and Culture 20,000 20,000 20,000 - Arts and Culture Fund Subtotal 20,000 20,000 20,000 - - Increase From Prior Year (%)0.00%0.00%0.00%-100.00% Debt Service Fund Levies City Hall Debt Service 952,000 952,000 - - - Gymnasium Debt Service 390,000 391,000 392,000 392,000 392,000 Fire Station Debt Service 406,000 402,000 402,000 403,000 403,000 Public Works Facility Debt Service 1,695,000 1,688,000 1,695,000 1,269,000 1,269,000 Sports Dome 1,168,900 1,163,300 1,162,400 1,168,000 1,166,000 Debt Service Fund Subtotal 4,611,900 4,596,300 3,651,400 3,232,000 3,230,000 Increase From Prior Year (%)0.70%-0.34%-20.56%-11.49%-0.06% Construction Fund Levies Capital Improvement Plan Levy 300,000 800,000 2,000,000 2,000,000 2,000,000 Equipment Levy 1,930,000 2,030,000 2,130,000 2,240,000 2,350,000 Street Special Levy 950,000 1,210,400 Weber Woods*400,000 - - - - Special Park Improvement Levy - - - - 1,000,000 Construction Fund Subtotal 2,630,000 2,830,000 4,130,000 5,190,000 6,560,400 Increase From Prior Year (%)2.45%7.60%45.94%25.67%26.40% HRA Fund Levies HRA Operating Levy 160,000 192,000 230,400 237,300 244,400 HRA Fund Subtotal 160,000 192,000 230,400 237,300 244,400 Increase From Prior Year (%)28.00%20.00%20.00%2.99%2.99% Total Property Tax Levy 37,431,021$ 39,659,543$ 42,018,271$ 45,367,336$ 49,855,000$ Increase From Prior Year (%)4.60%5.95%5.95%7.97%9.89% Braemar Arts &Debt General HRA PACS CAS CDBG Police SR Memorial Culture Service Construction Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund Total REVENUES AND OTHER FINANCING SOURCES Property tax levy 39,820,200$ 244,400$ -$ -$ -$ -$ -$ -$ 3,230,000$ 6,560,400$ 49,855,000$ Tax increments - 1,723,245 - - - - - - - - 1,723,245 Franchise fees & other taxes 830,000 - 1,200,000 1,000,000 - - - - - 90,000 3,120,000 Special assessments - - - - - - - - - 3,726,253 3,726,253 Licenses and permits 5,466,160 - - - - - - - - 74,000 5,540,160 Intergovernmental 1,605,100 - - - 135,000 - - - - 2,780,000 4,520,100 Charges for services 5,945,291 - - - - - - - - 195,000 6,140,291 Fines and forfeitures 650,000 - - - - - - - - - 650,000 Investment income 250,000 186,000 - 15,000 - - 1,000 - - 203,000 655,000 Other revenue 376,000 - - - - 289,122 2,500 - - - 667,622 Transfers and contributions 157,500 - - - - - - - 2,816,752 100,000 3,074,252 Loan received - - - - - - - - - - - Debt issued - - - - - - - - - 2,813,402 2,813,402 Other financing sources - - - - - - - - - - - TOTAL REVENUES AND OTHER FINANCING SOURCES 55,100,251 2,153,645 1,200,000 1,015,000 135,000 289,122 3,500 - 6,046,752 16,542,055 82,485,325 EXPENDITURES AND OTHER FINANCING USES - BY DEPARTMENT Administration 3,134,386 - - - - - - - - 66,000 3,200,386 Communications 1,619,013 - - - - - - - - 113,000 1,732,013 Information technology - - - - - - - - - 30,000 30,000 Human resources 1,548,034 - - - - - - - - - 1,548,034 Finance 1,361,964 - - - - - - - - - 1,361,964 Public works 6,247,075 - - - - - - - - 560,790 6,807,865 Engineering 3,888,188 - 1,257,188 732,345 - - - - - 9,842,506 15,720,227 Police 15,054,036 - - - - 137,000 - - - 809,550 16,000,586 Fire 13,104,428 - - - - - - - - 322,000 13,426,428 Parks & recreation 6,939,479 - - - - - 1,000 - - 1,641,325 8,581,804 Community development 2,203,648 2,405,402 - - 135,000 - - - - - 4,744,050 Loan issued - - - - - - - - - - - Debt service - 472,250 - - - - - - 6,013,727 - 6,485,977 Transfers - - - - - - - - - 2,816,752 2,816,752 2023 GOVERNMENTAL FUND BUDGETS TOTAL EXPENDITURES AND OTHER FINANCING USES 55,100,251 2,877,652 1,257,188 732,345 135,000 137,000 1,000 - 6,013,727 16,201,923 82,456,086 EXPENDITURES AND OTHER FINANCING USES - BY TYPE Personal services 38,740,041 204,932 129,399 155,688 - - - - - 116,379 39,346,439 Contractual services 8,704,256 2,197,470 75,720 66,020 135,000 129,500 1,000 - - 350,273 11,659,239 Commodities 2,529,570 3,000 13,000 1,200 - 7,500 - - - 58,375 2,612,645 Internal services 5,126,384 - 9,069 9,437 - - - - - 876 5,145,766 Equipment - - - - - - - - - 1,936,665 1,936,665 Capital outlay - - 1,030,000 500,000 - - - - - 10,922,603 12,452,603 Loan issued - - - - - - - - - - - Debt service - 472,250 - - - - - - 6,013,727 - 6,485,977 Transfers - - - - - - - - - 2,816,752 2,816,752 TOTAL EXPENDITURES AND OTHER FINANCING USES 55,100,251 2,877,652 1,257,188 732,345 135,000 137,000 1,000 - 6,013,727 16,201,923 82,456,086 CHANGE IN FUND BALANCE -$ (724,007)$ (57,188)$ 282,655$ -$ 152,122$ 2,500$ -$ 33,025$ 340,132$ 29,239$ CITY OF EDINA Proposed Budget by Fund Type Governmental Enterprise Internal Service Governmental Enterprise Internal Service Funds Funds Funds Total Funds Funds Funds Total REVENUES AND OTHER FINANCING SOURCES Property tax levy 45,367,336$ -$ -$ 45,367,336$ 49,855,000$ -$ -$ 49,855,000$ Tax increments 1,670,245 - - 1,670,245 1,723,245 - - 1,723,245 Franchise fees & other taxes 3,120,000 - - 3,120,000 3,120,000 - - 3,120,000 Special assessments 4,624,553 - - 4,624,553 3,726,253 - - 3,726,253 Licenses and permits 5,464,560 - - 5,464,560 5,540,160 - - 5,540,160 Intergovernmental 5,940,309 180,000 - 6,120,309 4,520,100 180,000 - 4,700,100 Charges for services 5,932,905 - - 5,932,905 6,140,291 - - 6,140,291 Fines and forfeitures 650,000 - - 650,000 650,000 - - 650,000 Operating revenue - 54,139,043 6,840,351 60,979,394 - 56,223,559 6,991,192 63,214,751 Investment income 655,000 381,000 - 1,036,000 655,000 381,000 - 1,036,000 Other revenue 667,622 20,000 - 687,622 667,622 20,000 - 687,622 Contributions - - - - - - - - Transfers 3,229,563 1,191,000 - 4,420,563 3,074,252 1,203,350 - 4,277,602 Loan received - - - - - - - - Debt issued 1,768,370 - - 1,768,370 2,813,402 - - 2,813,402 Other financing sources 250,000 - - 250,000 - - - - TOTAL REVENUES AND OTHER FINANCING SOURCES 79,340,463 55,911,043 6,840,351 142,091,857 82,485,325 58,007,909 6,991,192 147,484,426 EXPENDITURES, EXPENSES AND OTHER FINANCING USES - BY FUNCTION Administration 3,092,833 - - 3,092,833 3,200,386 - - 3,150,731 Communications 1,829,674 - - 1,829,674 1,732,013 - - 1,706,364 Information technology 50,000 - 2,303,438 2,353,438 30,000 - 2,373,686 2,403,686 Human resources 1,462,010 - 1,101,903 2,563,913 1,548,034 - 1,107,234 2,630,744 Finance 1,297,658 409,281 - 1,706,939 1,361,964 411,968 - 1,752,356 Public works 6,540,413 19,605,891 1,966,101 28,112,405 6,807,865 20,341,298 2,015,368 29,065,564 Engineering 14,470,948 1,362,510 1,356,361 17,189,819 15,720,227 1,295,519 1,379,522 18,333,671 Police 14,886,865 1,738,117 - 16,624,982 16,000,586 1,769,272 - 17,531,371 Fire 12,647,083 - - 12,647,083 13,426,428 - - 13,218,827 Parks & recreation 7,610,321 28,535,275 - 36,145,596 8,581,804 29,262,244 - 36,734,112 2022 Budget 2023 Budget CITY OF EDINA Proposed Budget by Fund Type Community development 7,014,431 - - 7,014,431 4,744,050 - - 4,709,140 Loan issued - - - - - - - - Debt service 6,004,168 - - 6,004,168 6,485,977 - - 6,485,977 Transfers 2,979,563 1,441,000 - 4,420,563 2,816,752 1,460,850 - 4,277,602 TOTAL EXPENDITURES, EXPENSES AND OTHER FINANCING USES 79,885,967 53,092,074 6,727,803 139,705,844 80,583,184 54,541,151 6,875,810 142,000,145 EXPENDITURES, EXPENSES AND OTHER FINANCING USES - BY TYPE Cost of goods sold - 11,027,161 - 11,027,161 - 11,414,891 - 11,414,891 Personal services 36,942,679 11,475,078 2,739,463 51,157,220 38,473,537 11,949,186 2,861,770 53,284,493 Contractual services 13,787,885 14,399,105 2,620,440 30,807,430 11,659,239 14,639,611 2,628,440 28,927,290 Commodities 2,559,719 2,338,650 1,367,900 6,266,269 2,612,645 2,320,850 1,385,600 6,319,095 Internal services 5,027,018 2,948,930 - 7,975,948 5,145,766 3,045,186 - 8,190,952 Equipment 1,728,550 - - 1,728,550 1,936,665 - - 1,936,665 Capital outlay 10,856,385 - - 10,856,385 11,452,603 - - 11,452,603 Depreciation - 8,790,000 - 8,790,000 - 8,985,000 - 8,985,000 Loan issued - - - - - - - - Debt service 6,004,168 672,150 - 6,676,318 6,485,977 725,577 - 7,211,554 Other expense - - - - - - - - Contributions - - - - - - - - Transfers 2,979,563 1,441,000 - 4,420,563 2,816,752 1,460,850 - 4,277,602 TOTAL EXPENDITURES, EXPENSES AND OTHER FINANCING USES 79,885,967 53,092,074 6,727,803 139,705,844 80,583,184 54,541,151 6,875,810 142,000,145 CHANGE IN FUND BALANCE OR NET POSITION (545,504) 2,818,969 112,548 2,386,013 29,239 3,466,758 115,382 3,611,379 FUND BALANCE OR NET POSITION - JANUARY 1 87,461,014 120,309,380 2,837,899 210,608,293 86,915,510 123,128,349 2,950,447 212,994,306 FUND BALANCE OR NET POSITION - DECEMBER 31 86,915,510$ 123,128,349$ 2,950,447$ 212,994,306$ 86,944,750$ 126,595,107$ 3,065,829$ 216,605,686$ Aquatic Golf Braemar Art Utilities Liquor Center Course Arena Field Center Edinborough Centennial Fund Fund Fund Fund Fund Fund Fund Fund Fund Total REVENUES AND TRANSFERS IN Operating revenues 28,979,624$ 15,665,239$ 1,089,070$ 4,562,500$ 2,642,739 560,000$ 502,483$ 1,388,904$ 833,000$ 56,223,559$ Intergovernmental 180,000 - - - - - - - - 180,000 Investment income 302,000 21,000 20,000 9,000 3,000 11,000 - 11,000 4,000 381,000 Other revenue 20,000 - - - - - - - - 20,000 Transfers and contributions - 3,750 16,000 53,600 392,000 1,000 300,000 12,000 425,000 1,203,350 TOTAL REVENUES AND TRANSFERS IN 29,481,624 15,689,989 1,125,070 4,625,100 3,037,739 572,000 802,483 1,411,904 1,262,000 58,007,909 EXPENSES AND TRANSFERS OUT - BY DEPARTMENT Administration - - - - - - - - - - Human resources - - - - - - - - - - Finance 411,968 - - - - - - - - 411,968 Public works 20,341,298 - - - - - - - - 20,341,298 Engineering 1,295,519 - - - - - - - - 1,295,519 Fire 1,769,272 - - - - - - - - 1,769,272 Parks and recreation - 14,738,559 1,227,701 4,720,003 3,475,414 939,788 867,128 1,862,051 1,431,600 29,262,244 Transfers and contributions 460,850 1,000,000 - - - - - - - 1,460,850 TOTAL EXPENSES AND TRANSFERS OUT 24,278,907 15,738,559 1,227,701 4,720,003 3,475,414 939,788 867,128 1,862,051 1,431,600 54,541,151 EXPENSES AND TRANSFERS OUT - BY TYPE COGS - 10,970,141 52,250 191,000 111,000 - 500 78,000 12,000 11,414,891 Personal services 3,113,700 2,490,550 532,559 2,047,206 1,248,641 150,689 601,125 947,015 817,701 11,949,186 Contractual services 11,089,188 681,984 190,234 673,050 1,007,222 211,070 115,819 387,676 283,368 14,639,611 Commodities 1,200,700 70,600 114,700 391,000 140,750 25,250 79,000 149,900 148,950 2,320,850 Internal services 1,624,720 408,284 43,183 334,130 244,365 38,779 64,684 154,460 132,581 3,045,186 Depreciation 6,307,000 117,000 290,000 904,000 665,000 514,000 6,000 145,000 37,000 8,985,000 Interest 482,749 - 4,775 179,617 58,436 - - - - 725,577 Transfers and contributions 460,850 1,000,000 - - - - - - - 1,460,850 TOTAL EXPENSES AND TRANSFERS OUT 24,278,907 15,738,559 1,227,701 4,720,003 3,475,414 939,788 867,128 1,862,051 1,431,600 54,541,151 CHANGE IN NET POSITION 5,202,717$ (48,570)$ (102,631)$ (94,903)$ (437,675) (367,788)$ (64,645)$ (450,147)$ (169,600)$ 3,466,758$ 2023 ENTERPRISE FUND BUDGETS Risk Equipment Information Facilities Management Operations Technology Management Fund Fund Fund Fund Total REVENUES AND TRANSFERS IN Operating revenues 1,107,240$ 2,055,684$ 2,421,160$ 1,407,108$ 6,991,192$ Intergovernmental - - - - - Investment income - - - - - Other revenue - - - - - Transfers - - - - - TOTAL REVENUES AND TRANSFERS IN 1,107,240 2,055,684 2,421,160 1,407,108 6,991,192 EXPENSES AND TRANSFERS OUT - BY DEPARTMENT Administration - - - - - Communications - - - - - Information technology - - 2,373,686 - 2,373,686 Human resources 1,107,234 - - - 1,107,234 Finance - - - - - Public works - 2,015,368 - - 2,015,368 Engineering - - - 1,379,522 1,379,522 Police - - - - - Fire - - - - - Parks and recreation - - - - - Community development - - - - - Transfers - - - - - TOTAL EXPENSES AND TRANSFERS OUT 1,107,234 2,015,368 2,373,686 1,379,522 6,875,810 EXPENSES AND TRANSFERS OUT - BY TYPE COGS - - - - - Personal services 162,434 797,148 1,328,386 573,802 2,861,770 Contractual services 944,800 205,120 870,300 608,220 2,628,440 Commodities - 1,013,100 175,000 197,500 1,385,600 Capital Outlay - - - - - Depreciation - - - - - Interest - - - - - Transfers - - - - - TOTAL EXPENSES AND TRANSFERS OUT 1,107,234 2,015,368 2,373,686 1,379,522 6,875,810 CHANGE IN NET POSITION 6$ 40,316$ 47,474$ 27,586$ 115,382$ 2023 INTERNAL SERVICE FUND BUDGETS Date: September 20, 2022 Agenda Item #: IV. To:Mayor and City Council Item Type: Other From:Alisha McAndrews, Finance Director Item Activity: Subject:Overview of Parks & Recreation Enterprises Discussion CITY OF EDINA 4801 West 50th Street Edina, MN 55424 www.edinamn.gov ACTION REQUESTED: Discussion only. INTRODUCTION: Staff will provide a brief presentation with an overview of the City's Parks & Recreation Enterprises for discussion. The overview will include information on the operations of each enterprise, how they generate income, the 2021 financial performance, options for financing capital improvements, and the impact of "Edina Law". Date: September 20, 2022 Agenda Item #: V. To:Mayor and City Council Item Type: Reports / Recommendation From:Alisha McAndrews, Finance Director Item Activity: Subject:Utility Billing Rate Study Update Discussion CITY OF EDINA 4801 West 50th Street Edina, MN 55424 www.edinamn.gov ACTION REQUESTED: Discussion only. INTRODUCTION: Staff will provide an update on the 2022 utility rate study and recommend Council approve staff implementing the recommendations in the study for 2023. Formal approval of the 2023 rates will be presented to Council December 2022. ATTACHMENTS: Description 2022 Utility Rate Study Staff Presentation BUILDING COMMUNITIES. IT’S WHAT WE DO. September 2022 UTILITY RATE STUDY ANALYSIS FOR 2023 RATES: City of Edina, MN Prepared by: Ehlers 3060 Centre Pointe Drive Roseville, Minnesota 55113 City of Edina, MN Utility Rate Study Analysis 1 TABLE OF CONTENTS I. EXECUTIVE SUMMARY II. BACKGROUND INFORMATION III. METHODOLOGY AND ASSUMPTIONS IV. WATER FUND V. SEWER FUND VI. STORM WATER FUND VII. CONNECTION FEES VIII. CASH RESERVES IX. COMMUNITY COMPARISON X. PUTTING IT ALL TOGETHER: SAMPLE BILLS XI. SUMMARY APPENDIX A: CAPITAL IMPROVEMENT PLANS APPENDIX B: PROJECTIONS 2 3 4 5 9 12 14 16 18 20 21 23 27 City of Edina, MN Utility Rate Study Analysis 2 I. EXECUTIVE SUMMARY The goal of a rate study is to ensure the long‐term financial health of the utility enterprise funds. The City of Edina conducts periodic updates to its utility rate study with the last update being completed in 2021. The recommendations from the 2021 study were conceptually approved by the Council in a work session, but implementation was delayed due to billing software conversion. This rate study revisits the rate structure provided in the 2021 update and seeks to achieve climate goals, reduce customer complaints, and accommodate updated capital cost estimates. The utilities are capital intensive operations with over $175 million in capital costs estimated for 2022‐2031, compared to $149 million estimated in the 2021 update over the same timeframe. The rate study assumes the City will continue the practice of financing the majority of capital costs. This rate study reviews each utility fund to ensure the recommended rates and fees will support operations, capital costs, capacity expansion projects, address the City’s climate goal of water conservation, and maintain adequate cash reserves. This report details the findings and recommendations for each utility, provides an estimated 2023 utility bill for sample homeowners and businesses, and reviews connection fees. Moreover, the rate study provides a recommendation for the 2023 user rates and annual increases thereafter for the water, sanitary sewer, and storm water utilities as well as connection fees for the water and sanitary sewer utilities. This rate study aims to find solutions to the increased capital costs and unique challenges each utility is facing, which is summarized below. Water Fund – The City’s existing tiered rate structure does not actively promote water conservation. Under the current structure, 95% of residential accounts have all their water use fall within the first two tiers of the rates. The current structure thus lacks an adequate price signal to customers to monitor their usage more closely, and results in similar fees being collected for irrigation and indoor water use. Sewer Fund – The single biggest expense in the sewer fund is the Metropolitan Council Environmental Services (MCES) disposal fees, which is 76% of the 2022 operating budget. When these fees increase, it puts financial pressure on revenues to keep pace. In addition, the current rate structure does not promote conservation and winter quarter average billing is generating complaints from customers. City of Edina, MN Utility Rate Study Analysis 3 Storm Water Fund – The City is committed to adequately maintaining its stormwater infrastructure. In addition, the City needs to undertake flood mitigation projects over the next 20 years to address flooding risk. To balance affordability with capital needs, this rate study assumes one $10 million flood mitigation project from 2022‐2031, the timeframe of this study. To address these challenges, Ehlers recommends restructuring water and sewer rates for 2023 and provides the following recommendations for annual increases to utility rates and connection fees. Utility Fee 2023 Rate Increases Annual Rate Increases Beginning in 2024 Water User Rates Rate Restructure 5% Sewer User Rates Rate Restructure 6% Storm Water Rates 8% 8% Water Connection Fee 3% 3% Sewer Connection Fee 28% 22% in 2024; 5% thereafter II. BACKGROUND INFORMATION Most City operations, such as public works, public safety, administration, and parks are accounted for under governmental funds, primarily embedded in the General Fund. These operations rely on a variety of revenues including property taxes, intergovernmental aid, and charges for services. Municipal utility funds are considered enterprise funds. They are intended to be operated like a private enterprise in which the fee revenue pays for all operations and capital expenses. City utility operations include four funds: water, sewer, storm water, and recycling. Together these utilities are over a $27 million operation. In the City’s Annual Comprehensive Financial Report (ACFR), enterprise funds are segregated funds, recognizing the unique purpose and revenue streams of these functions. In addition to the ACFR segregating the enterprise funds, the City’s Capital Improvement Plan (CIP) distinguishes between projects that will be funded by the enterprise funds and those to be funded by governmental funds. City of Edina, MN Utility Rate Study Analysis 4 It should be noted that the City currently has one accounting fund for water, sanitary sewer, storm water and recycling. For this analysis, we segregated the revenues and expenses for each utility, and treated each as a separate fund. By doing so, we can ensure that each utility will recover its own costs. For purposes of this study, we refer to each segregated utility as its own fund. III. METHODOLOGY AND ASSUMPTIONS As part of this year’s study, Ehlers prepared a 10‐year cash flow projection for the water, sewer, and storm water utility funds through the year 2032. This projection examines anticipated cash flows in future years and estimates the user rate increases necessary to meet all financial obligations of the utility funds while maintaining adequate cash reserves. The cash flow analysis method determines future revenue requirements by incorporating operating and maintenance expenses, transfer payments, current and future debt service and anticipated future capital projects. We also include future growth estimates in the model for calculating connection fees. The primary financial inputs in the development of the analysis were the City’s audited financial statements, budget documents, annual water billing data for 2019, and the City’s latest Capital Improvement Plan. This study assumes approximately 1.96 billion gallons per year of water consumption based on actual consumption over a 12‐month period spanning 2019 and 2020. The City elected to use billing data from 2019 and 2020 because it reflected “normal” rainfall and excluded the COVID‐19 pandemic which may have skewed the data. The cashflow projections include the following assumptions:  3‐5% annual inflation on operating costs.  4% annual inflation on MCES disposal charges.  Growth is 175 and 119 new SAC units per year for the Southdale and Cahill areas respectively for connection fees.  We did not assume any additional usage from growth for our user revenue calculations. This is based on previous years’ experience with growth and minimal to no additional usage being realized city‐wide, likely as the result of more efficient appliances. City of Edina, MN Utility Rate Study Analysis 5 Funding capital improvements for a redeveloping community as well as replacing aging utility infrastructure drive the need for adequate utility revenue. City staff developed a 10‐year Capital Improvement Plan for each utility (See Appendix A). All capital costs listed in Appendix A assume historic inflation levels. If current inflation levels continue the costs will be understated. IV. WATER FUND There are three components to the City’s water utility revenues:  Fixed Charges  Usage Fees  WAC Fees (Water Access Charge or connection fees) Fixed charges are a quarterly fee based on the size of the water meter. The fixed charge is established to recover certain administration expenses, such as meter reading and billing, plus a portion of distribution costs. The 2022 fixed charge for single family residential accounts is $24.72 per quarter for a three‐quarter inch meter and it increases as the size of the meter increases. Usage fees are based on the metered use of water. Water is sold in units and currently one unit represents 1,000 gallons. The billing structure for most Edina residents is tiered so that the rate per unit depends on the amount of water used per quarter. Water usage in the Morningside area is charged at a flat rate per unit. The Morningside rate is set at an amount sufficient to cover the cost of purchasing water from the City of Minneapolis which is the largest component of the Morningside rate. The other components are a pro‐rata share of the City of Edina’s water distribution costs not included in the fixed charge. The current and proposed tier structure can be seen in Table 1. Water access charges (WAC) are paid by developers of new homes and businesses when a building permit is pulled. Developers do not pay connection fees when they are replacing an existing unit, as is the case for residential tear downs and rebuilds. The connection fees help pay for the capital costs of serving the new properties. The City of Edina currently charges $2,960 per sewer availability charge (SAC) unit for new development. We recommend the City increase its WAC fee 3% annually as discussed later in this report. City of Edina, MN Utility Rate Study Analysis 6 The rate study proposes making tiers 1 and 2 smaller in 2023 to promote conservation. As shown in Figure 1, under the current structure, only 17% of residents are outside of the first tier and as a result are the only users that receive a price signal to monitor their consumption more closely. As shown in Figure 2, under the proposed 2023 structure, 58% of residents will receive a price signal. In tandem with the increased rates in tiers 2 and 3, the new structure will incentivize less consumption. Figure 1. Current 2022 Tiers and Residential Accounts by Usage Figure 2. Proposed 2023 Tiers and Residential Accounts by Usage City of Edina, MN Utility Rate Study Analysis 7 The proposed changes to the tier structure, as shown in Table 1, are estimated to generate a 3.5% increase in water revenue in 2023 with low volume residential customers paying less and medium and high volume customers paying more, as shown in Table 2. The recommended annual rate increase in 2024 and beyond is 5%. Table 1. Current Water Usage Fees compared to Proposed 2023 Tier Restructure and Rates WATER 2022 Proposed 2023* Annual Increase Beginning in 2024 Residential Tier 1 Up to 26,000 gallons $ 2.71 Up to 12,000 gallons $ 2.42 5.0% Tier 2 26,001 to 49,000 gallons $ 3.60 12,001 to 24,000 gallons $ 3.68 5.0% Tier 3 Over 49,000 gallons $ 5.63 Over 24,000 gallons $ 6.08 5.0% Morningside All Usage $ 4.40 All Usage $ 4.62 5.0% Multifamily Tier 1 Up to 26,000 gallons $ 2.71 Tier 2 26,001 to 49,000 gallons $ 3.60 All Usage $ 3.62 5.0% Tier 3 Over 49,000 gallons $ 5.63 Comm/Ind Tier 1 Up to 26,000 gallons $ 2.71 Up to 50,000 gallons $ 2.42 5.0% Tier 2 Over 26,000 gallons $ 3.60 50,001 to 200,000 gallons $ 3.02 5.0% Tier 3 N/A Over 200,000 gallons $ 3.77 5.0% Irrigation Tier 1 Up to 26,000 gallons $ 3.60 Up to 12,000 gallons $ 3.68 5.0% Tier 2 Over 26,000 gallons $ 5.63 Over 12,000 gallons $ 6.08 5.0% *Fixed charges (i.e., meter fees) are proposed to increase 5% annually beginning in 2023. Water use varies based on personal usage, lot size, irrigation, and weather. In 2019 to 2020 the City’s residential customers used an average of 13,700 gallons in the winter quarter and 27,500 gallons in the summer quarter, with the average quarterly usage being 19,200 gallons. Table 2 shows sample water bills for customers at three different consumption levels. Table 2. Residential Customer Comparison ‐ Proposed Tier Restructure City of Edina, MN Utility Rate Study Analysis 8 In addition to promoting conservation, the new structure and annual increase in rates will help pay for the reinvestment in the City’s aging water system as well as the construction of a new water treatment plant. Between 2022 and 2031, the City plans to spend $62 million on capital improvements from the water utility fund (see Appendix A). The table below outlines some of the major water capital projects in the City’s capital improvement plan. Table 3. Water Utility Major Capital Improvements Major Projects Year Amount Street Improvement Program Annual Average $3,100,000 Well Rehab Annual Average $280,000 New Water Treatment Plant 2028‐2029 $18,000,000 New Water Supply 2028‐2029 $6,200,000 Capital and annual debt expenditures comprised 59% of the total cash expenditures in the Water Fund in 2021 as shown in Figure 3. These are fixed costs that do not fluctuate with consumption; therefore, the revenue stream needs to be reliable from year to year. Figure 3. 2021 Water Expenditures (Excluding Depreciation) Operating 41% Debt 30% Capital 29% Water Expenditures 2021 $13.9 Million City of Edina, MN Utility Rate Study Analysis 9 V. SEWER FUND There are two components to the City’s sewer utility revenues:  Usage Fees  SAC Fees (Sewer Access Charge or connection fees) Currently, usage fees are based on the metered use of water in the winter quarter, or the current minimum of 12,000 gallons, whichever is greater. Winter quarter averaging is used for single‐family residential properties to avoid billing for irrigation usage. Run‐off due to water used for irrigating is part of the storm water collection system and should not be part of the sewer charge. In some cases, the winter quarter average can be greater than the actual usage in the spring and summer months; an example of what can cause this is heavy usage in the winter with guests in town for the holidays. The City receives a substantial number of complaints from homeowners who are paying winter quarter consumption when their actual consumption is less. The minimum charge provides revenue stability for the sewer fund. In addition, residents who travel to warmer climates in the winter still incur the minimum charge when no water is used. In smaller households the minimum is sometimes more than actual usage. Sewer access charges (SAC) are paid by developers of new homes and businesses when a building permit is pulled. Developers do not pay connection fees when they are replacing an existing unit, as is the case for residential tear downs and rebuilds. The connection fees help pay for the capital costs of serving the new properties. The City of Edina currently charges $1,810 per sewer availability charge unit for new development. We recommend the City increase its SAC fee 28% in 2023, 22% in 2024 and 5% annually thereafter as discussed later in this report. The rate study proposes two structural changes to address customer complaints: 1. A reduction in the sewer minimum to 8,000 gallons in 2023; and 2. Charging the lesser of the Winter quarter or actual, but not less than the minimum. City of Edina, MN Utility Rate Study Analysis 10 The proposed changes maintain a sewer minimum for revenue stability, make sewer charges more affordable for low volume customers, as seen in Table 5, and charges the winter quarter average or actual usage, whichever is less. The 6% recommended rate increase in 2024 and beyond is 1% higher than last year’s rate study to account for increased capital costs and to assist in funding new infrastructure related to the Cahill expansion. The current and proposed rates can be seen in Table 4. Table 4. Current Sewer Utility Rates compared to Proposed 2023 Rates SEWER 2022 Proposed 2023* Annual Increase Beginning in 2024 Residential (including Morningside) All Usage $ 6.30 All Usage $ 6.86 6.00% Minimum of 12,000 gallons Minimum of 8,000 gallons Winter Quarter Averaging Lesser of Winter Quarter or Actual, but no less than 8,000 gallons Multifamily All Usage $ 6.30 All Usage $ 6.86 6.00% Minimum of $68.05 for each Minimum of 8,000 gallons unit over 4 units Comm/Ind and Sewer Only All Usage $ 6.30 All Usage $ 6.86 6.00% Minimum of 12,000 gallons Minimum of 8,000 gallons *26% of customers will pay minimum in Winter quarter. Table 5. Residential Customer Comparison – Proposed Lower Minimum City of Edina, MN Utility Rate Study Analysis 11 The City of Edina participates in the Metropolitan Council Environmental Services (MCES) sewer system. This means that the City’s sanitary sewer system flows to the MCES treatment plant and the City receives a bill from the MCES for the service. The City does not maintain its own sanitary sewer treatment plant. MCES allocates the cost of the metro area sanitation system to user Cities based on their relative percent of flow into the system. Currently the MCES charge for services is budgeted at $5,906,199 in 2022 and is the single biggest expense in the City’s sewer fund, comprising almost 76% of budgeted operating expense in 2022, excluding depreciation. This study assumes future increases to the MCES charge for service will be 4% per year. The second biggest expenditure in the sewer fund is capital purchases, most of which are designated for replacing the sewer mains under road reconstruction projects. Between 2022 and 2031, the City plans to spend $48.5 million on capital improvements from the sewer fund, including the Cahill capacity expansion project (see Appendix A). The table below outlines some of the major sewer capital projects in the City’s capital improvement plan. Table 6. Sewer Utility Major Capital Improvements Major Projects Year Amount Street Improvement Program Annual Average $1,400,000 Trunk Capacity Expansion 2023‐2028 $22,900,000 Lift Station 6 Rehabilitation 2022 $8,000,000 72nd Street Sewer Line Upsize 2027 $1,600,000 Capital, MCES, and debt expenditures comprised 92% of the total cash expenditures in the Sewer Fund in 2021 as shown in Figure 4. These are fixed costs that do not fluctuate with consumption; therefore, the revenue stream needs to be reliable from year to year. City of Edina, MN Utility Rate Study Analysis 12 Figure 4. 2021 Sewer Expenditures (Excluding Depreciation) VI. STORM WATER FUND The storm water fund was created to pay for the management of storm water runoff in concert with the local watershed. City projects include repair and maintenance of storm water infrastructure such as catch basins, manholes, pipes, and sediment collection devices. Single family residential properties pay a fixed quarterly fee. Commercial property owners are charged based on residential equivalency unit, acreage, and the storm water rate. Over time, capital costs for the storm water system have increased to meet increasingly stringent state standards intended to improve water quality. In addition, there are storm water related construction costs in connection with street reconstruction projects and flood mitigation. To fund the capital improvements and on‐going repairs and maintenance the City will need to generate more storm water revenue. We propose an annual 8% increase in 2023 and thereafter as shown in Table 7. The recommended rate increase is consistent with last year’s rate study. Table 7. Current Storm Water Utility Rates compared to Proposed 2023 Rates STORM WATER 2022 Proposed 2023 Annual Increase Beginning in 2024 Residential (including Morningside) Per Residential Lot $43.85 Per Residential Lot $47.36 8.0% Operating 8% Debt 13% Capital 21% MCES 58% Sewer Expenditures 2021 $10.2 Million City of Edina, MN Utility Rate Study Analysis 13 When considering increased storm water rates, it is necessary to balance affordability and capital needs. With the proposed 8% annual increase in storm water rates, the City will be able to fund approximately $10 million in flooding mitigation projects every eight years. With this annual increase, it will take approximately 40 years to accomplish the City’s $50 million in flood projects unless other funding is secured. The 8% annual increase allows the City to spend $64 million on capital improvements from the storm water fund in the next ten years, including the aforementioned $10 million in flood mitigation projects (see Appendix A). The table below outlines some of the major storm water capital projects in the City’s capital improvement plan. Table 8. Storm Water Utility Major Capital Improvements Major Projects Year Amount Street Improvement Program Annual Average $3,100,000 Flooding Mitigation To be determined $10,000,000 Flooding Protection Strategy ‐ Morningside 2022 $14,000,000 Capital and debt expenditures comprised 78% of the total cash expenditures in the Storm Water Fund in 2021 as shown in Figure 5. These are fixed costs that do not fluctuate with consumption; therefore, the revenue stream needs to be reliable from year to year. Figure 5. 2021 Storm Water Expenditures (Excluding Depreciation) Operating 22% Debt 25% Capital 53% Storm Water Expenditures 2021 $7.35 Million City of Edina, MN Utility Rate Study Analysis 14 VII. CONNECTION FEES The City of Edina currently charges water and sewer connection fees totaling $4,770 per sewer availability charge unit for new development. The connection fees help pay for the capital costs of serving new properties. Growth in the Southdale area and expansion projects in the Cahill area are requiring an investment in an additional water treatment plant and other water and sewer infrastructure. The estimated costs and sewer availability charge units are show in Table 9. Table 9. Project Areas and Estimated Utilities Expansion Cost and New SAC Units Project Area Estimated Cost Estimated New SAC Units per Year Southdale Area $11.4 Million 175 Cahill Area* $13.1 Million 119 *Cahill expansion projects will be constructed in 2023‐2024 with assumed growth in that area to begin in 2027. To pay for the improvements needed to accommodate the Cahill area growth from sewer connection fees alone, the fees would need to increase 50% in 2023, 37% in 2024, and 27% in 2025. This level of fee increase may deter the development needed to pay for the improvements. Instead, this study recommends increasing sewer usage fees half a percent more annually than otherwise needed to pay for sewer costs and increasing the water connections fees 3% annually and sewer connection fees 28% in 2023, 22% in 2024 and 5% annually thereafter as shown in Table 10. Table 10. Proposed Connection Fees WATER SEWER TOTAL 2022 $ 2,960 $ 1,810 $ 4,770 2023 $ 3,049 $ 2,317 $ 5,366 2024 $ 3,140 $ 2,826 $ 5,967 2025 $ 3,234 $ 2,968 $ 6,202 2026 $ 3,332 $ 3,116 $ 6,448 2027 $ 3,431 $ 3,272 $ 6,703 2028 $ 3,534 $ 3,436 $ 6,970 2029 $ 3,640 $ 3,607 $ 7,248 2030 $ 3,750 $ 3,788 $ 7,537 2031 $ 3,862 $ 3,977 $ 7,839 City of Edina, MN Utility Rate Study Analysis 15 Even with the proposed increases, the City of Edina’s connection fees remain competitive as shown in Figure 6. Figure 6. Connection Fees for a 150‐Unit Multifamily Project City of Edina, MN Utility Rate Study Analysis 16 VIII. CASH RESERVES The proposed rate increases will maintain the financial health of the funds. Each graph compares the projected cash balance in the fund (in orange) with the City’s target cash reserve (in blue). The target cash reserve for each utility is set at an amount necessary to provide adequate operating reserves plus fund next year’s debt service and a portion of capital projects. Figures 7‐9 show the City’s projected ending cash compared to target cash reserves for each utility. See Appendix B for the full 10‐year cash flow analyses for the City’s utility funds. Figure 7. Projected Water Fund Cash Balances City of Edina, MN Utility Rate Study Analysis 17 Figure 8. Projected Sewer Fund Cash Balances Low ending cash in 2022 is the result of paying for lift stations with cash. Lower ending cash in later years is the result of funding utilities expansion related to Cahill area growth. Figure 9. Projected Storm Water Fund Cash Balances City of Edina, MN Utility Rate Study Analysis 18 IX. COMMUNITY COMPARISON Each community has different demands on its utility systems that make it unique – different growth patterns, groundwater sources, soil conditions, usage patterns and infrastructure. Therefore, one should set rates based on documented need, as the City of Edina does through its periodic rate studies. Nevertheless, it is helpful to know how the City compares to surrounding communities because residents and businesses often expect to pay similar rates. In Edina, water use varies significantly based on personal usage, lot size, irrigation, and weather. The data used for this analysis shows an average usage range of 13,700 gallons in the winter quarter to 27,500 gallons in the summer quarter, with the average quarterly usage being 19,200 gallons. Figures 10‐11 compare utility bills for a low volume and medium volume residential customer. Figure 10. Quarterly Bill Comparison of Neighboring Communities – Low Volume Residential City of Edina, MN Utility Rate Study Analysis 19 Figure 11. Quarterly Bill Comparison of Neighboring Communities – Medium Volume Residential Under the current and proposed tier structure the low volume user’s water usage is all being charged at the tier 1 rate which results in a reduced bill in 2023 due to a reduced tier 1 rate. Under the current tier structure, the medium volume user’s water usage is all being billed at the tier 1 rate, and under the proposed 2023 tier structure 12,000 gallons will be billed at the tier 2 rate which results in a higher 2023 bill. The proposed tier structure provides more customers with a price signal and promotes water conservation while maintaining affordability for essential indoor water use. City of Edina, MN Utility Rate Study Analysis 20 X. PUTTING IT ALL TOGETHER: SAMPLE BILLS Table 11 shows sample bills for residential and commercial customers with varying usage throughout the period of the analysis. Table 11. Sample Quarterly Utility Bills for Residential and Commercial Customers Actual 2022 2023 2024 2025 2026 Quarterly Low Volume Residential Bill 10,000 gallons water and 8,000 gallons sewer and 3/4" meter Water 51.82$ 50.16$ 52.66$ 55.30$ 58.06$ Sewer 75.60$ 54.88$ 58.17$ 61.66$ 65.36$ Storm 43.85$ 47.36$ 51.15$ 55.24$ 59.66$ Total 171.27$ 152.39$ 161.98$ 172.20$ 183.08$ Percent Increase 5.8% -11.0% 6.3% 6.3% 6.3% Amount Increase- per quarter $9.33 ($18.88)$9.59 $10.22 $10.88 Actual 2022 2023 2024 2025 2026 Quarterly Medium Volume Residential Bill 24,000 gallons water and 12,000 gallons sewer and 3/4" meter Water 89.76$ 99.16$ 104.11$ 109.32$ 114.79$ Sewer 75.60$ 82.32$ 87.26$ 92.49$ 98.04$ Storm 43.85$ 47.36$ 51.15$ 55.24$ 59.66$ Total 209.21$ 228.83$ 242.52$ 257.05$ 272.49$ Percent Increase 1.2% 9.4% 6.0% 6.0% 6.0% Amount Increase- per quarter $2.58 $19.62 $13.69 $14.53 $15.43 Actual 2022 2023 2024 2025 2026 Quarterly High Volume Residential Bill 95,000 gallons water and 40,000 gallons sewer and 1" meter Water 445.96$ 540.29$ 567.30$ 595.67$ 625.45$ Sewer 252.00$ 274.40$ 290.86$ 308.32$ 326.81$ Storm 43.85$ 47.36$ 51.15$ 55.24$ 59.66$ Total 741.81$ 862.04$ 909.31$ 959.22$ 1,011.92$ Percent Increase 20.3% 16.2% 5.5% 5.5% 5.5% Amount Increase- per quarter $125.35 $120.23 $47.27 $49.91 $52.70 Actual 2022 2023 2024 2025 2026 Quarterly Small Commercial Bill 10,000 gallons water and sewer and 3/4" meter Water 51.82$ 50.16$ 52.66$ 55.30$ 58.06$ Sewer 75.60$ 68.60$ 72.72$ 77.08$ 81.70$ Storm 76.95$ 83.11$ 89.75$ 96.93$ 104.69$ Total 204.37$ 201.86$ 215.13$ 229.31$ 244.46$ Percent Increase 6.1% -1.2% 6.6% 6.6% 6.6% Amount Increase- per quarter $11.78 ($2.51)$13.27 $14.18 $15.14 Actual 2022 2023 2024 2025 2026 Quarterly Large Commercial Bill 502,000 gallons water and sewer and 1" meter Water 1,817.78$ 1,747.95$ 1,835.34$ 1,927.11$ 2,023.47$ Sewer 3,162.60$ 3,443.72$ 3,650.34$ 3,869.36$ 4,101.53$ Storm 828.73$ 895.03$ 966.63$ 1,043.96$ 1,127.47$ Total 5,809.11$ 6,086.69$ 6,452.31$ 6,840.43$ 7,252.47$ Percent Increase 5.4% 4.8% 6.0% 6.0% 6.0% Amount Increase- per quarter $297.90 $277.58 $365.62 $388.12 $412.03 Proposed Proposed Proposed Proposed Proposed City of Edina, MN Utility Rate Study Analysis 21 XI. SUMMARY The utility funds have been well managed and have adequate cash reserves. However, each utility is facing unique challenges putting upward pressure on rates, and our analysis indicates opportunity to change the rate structure to promote water conservation, a key climate action goal for the City. To address these challenges, Ehlers proposes the following restructure of water and sewer rates in 2023 with annual increases in 2024 and beyond. Table 12. Proposed Utility Rates Annual Increase Beginning in 2024 Tier 1 Up to 26,000 gallons 2.71$ Up to 12,000 gallons 2.42$ 5.00% Tier 2 26,001 to 49,000 gallons 3.60$ 12,001 to 24,000 gallons 3.68$ 5.00% Tier 3 Over 49,000 gallons 5.63$ Over 24,000 gallons 6.08$ 5.00% Morningside All Usage 4.40$ All Usage 4.62$ 5.00% Tier 1 Up to 26,000 gallons 2.71$ Tier 2 26,001 to 49,000 gallons 3.60$ All Usage 3.62$ 5.0% Tier 3 Over 49,000 gallons 5.63$ Tier 1 Up to 26,000 gallons 2.71$ Up to 50,000 gallons 2.42$ 5.0% Tier 2 Over 26,000 gallons 3.60$ 50,001 to 200,000 gallons 3.02$ 5.0% Tier 3 N/A Over 200,000 gallons 3.77$ 5.0% Irrigation Tier 1 Up to 26,000 gallons 3.60$ Up to 12,000 gallons 3.68$ 5.0% Tier 2 Over 26,000 gallons 5.63$ Over 12,000 gallons 6.08$ 5.0% Annual Increase Beginning in 2024 3/4" 24.72$ 3/4" 25.96$ 5.0% 1" 33.72$ 1" 35.41$ 5.0% 1 1/4" 38.44$ 1 1/4" 40.36$ 5.0% 1 1/2" 43.24$ 1 1/2" 45.40$ 5.0% 2" 69.64$ 2" 73.12$ 5.0% 3" 264.41$ 3" 277.63$ 5.0% 4" 336.56$ 4" 353.39$ 5.0% 6" 426.50$ 6" 447.83$ 5.0% 8" 541.66$ 8" 568.74$ 5.0% Annual Increase Beginning in 2024 All Usage 6.30$ All Usage 6.86$ 6.00% Minimum of 12,000 gallons Minimum of 8,000 gallons Winter Quarter Averaging Lesser of Winter Quarter or Actual, but no less than 8,000 gallons All Usage 6.30$ All Usage 6.86$ 6.00% Minimum of $68.05 for each Minimum of 8,000 gallons unit over 4 units All Usage 6.30$ All Usage 6.86$ 6.00% Minimum of 12,000 gallons Minimum of 8,000 gallons Annual Increase Beginning in 2024 Per Residential Lot $43.85 Per Residential Lot $47.36 8.0% Proposed 20232022METER CHARGE Residential (including Morningside) All Customers Residential (including Morningside) Multifamily Comm/Ind and Sewer Only STORM WATER 2022 Proposed 2023 SEWER 2022 Proposed 2023 Comm/Ind WATER 2022 Proposed 2023 Residential Multifamily City of Edina, MN Utility Rate Study Analysis 22 Table 13. Proposed Connection Fees WATER SEWER TOTAL 2022 $ 2,960 $ 1,810 $ 4,770 2023 $ 3,049 $ 2,317 $ 5,366 2024 $ 3,140 $ 2,826 $ 5,967 2025 $ 3,234 $ 2,968 $ 6,202 2026 $ 3,332 $ 3,116 $ 6,448 2027 $ 3,431 $ 3,272 $ 6,703 2028 $ 3,534 $ 3,436 $ 6,970 2029 $ 3,640 $ 3,607 $ 7,248 2030 $ 3,750 $ 3,788 $ 7,537 2031 $ 3,862 $ 3,977 $ 7,839 Water connections fees are proposed to increase 3% annually and sewer connection fees 28% in 2023, 22% in 2024 and 5% annually thereafter. The proposed utility rate and connection fee increases accommodate the City’s commitment to funding street reconstruction projects, expanding and maintaining the systems, achieving water conservation, and maintaining adequate cash reserves. City of Edina, MN Utility Rate Study Analysis 23 Appendix A – Capital Improvement Plans Water Fund Capital Improvement Plan Sewer Fund Capital Improvement Plan Storm Water Fund Capital Improvement Plan Appendix A ‐ City of Edina Water Capital ImprovementsCapital ProjectProject Number2022 2023 2024 2025 2026 2027 2028 2029 2030 2031Utilities Equipment Replacement 15-108 - - - - - - - - - - New Water Treatment Plant 5 - Southdale 15-162 - - - - - - 9,000,000 - - - New Water Treatment Plant 5 - Southdale 15-162 - - - - - - - 9,000,000 - - Asset Management Software and Equipment 15-173 10,000 - - - - - - - - - Asset Management Software and Equipment 15-173 - 10,000 - - - - - - - - Asset Management Software and Equipment 15-173 - - 10,000 - - - - - - - Asset Management Software and Equipment 15-173 - - - 10,000 - - - - - - Asset Management Software and Equipment 15-173 - - - - 10,000 - - - - - Blake Road Reconstruction 17-020 528,216 - - - - - - - - - Morningside D Reconstruction 17-067 965,336 - - - - - - - - - Watermain Rehabilitation 17-080 - - - - 1,400,000 - - - - - Prospect Knolls A Reconstruction 17-107 - - - - 1,329,679 - - - - - Prospect Knolls C Reconstruction 19-308 - - - - - - 952,351 - - - Prospect Knolls D Reconstruction 19-309 - - - - - - 289,846 - - - Presidents B Reconstruction 19-310 - - - 1,488,943 - - - - - - Morningside C Reconstruction 19-311 - 1,836,618 - - - - - - - - Southdale B Reconstruction 19-312 - - 886,276 - - - - - - - Concord B Reconstruction 19-313 - - 2,055,132 - - - - - - - Indian Trails A Reconstruction 19-314 - - - - 587,533 - - - - - Benton Avenue A - - - - - - 369,875 - - - Todd Park B - - - - - - 463,753 - - - Lincoln Drive A - - - - - - 348,740 - - - W 7th Street - - - - - - 58,123 - - - Eden Avenue Improvements 19-331 - 200,000 - - - - - - - - Morningside E Reconstruction 19-318 437,344 - - - - - - - - - Water Main Condition Assessment 19-351 140,000 140,000 150,000 150,000 160,000 160,000 165,000 - - - Water Treatment Plant 3 Facility Improvements 19-900 231,800 - - - - - - - - - Water Treatment Plant 4 Facility Imp. 19-903 22,900 - - - - - - - - - Water Treatment Plant 2 Facility Imp. 19-904 63,400 - - - - - - - - - Well #2 Rehabilitation and Facility Improvement PW 23007 - - - - - - 170,000 - - - Well #4 Rehab 19-911 - - 130,000 - - - - - - - Well #6 Rehab 19-912 - 120,000 - - - - - - - - Well #6 Rehab 23008- - - - - - 120,000 - - - Well #5 Rehabilitation 19-913 - 120,000 - - - - - - - - Well #7 Rehabilitation 19-913 - - - - 120,000 - - - - - Well #10 Rehabilitation and Facility Improvement 19-914 420,000 - - - - - - - - - Well #10 Rehab PW 23004 - - - - - 120,000 - - - - Well #12 Rehabilitation and Facility Improvements PW 23005 - - - - - 120,000 - - - - Well #13 Rehabilitation and Facility Improvements PW 23006 - - - - - - 120,000 - - - Well #17 Rehabilitation and Facility Improvement 19-917 - 120,000 - - - - - - - - Well #20 Rehabilitation 19-918 - - - 120,000 - - - - - - Well #15 Rehabilitation 19-919 - - 140,000 - - - - - - - Concord C Reconstruction ENG21020 - - 757,830 - - - - - - - Presidents A Reconstruction ENG21021 - - - 2,565,768 - - - - - - Rolling Green Reconstrucion ENG21024 - - - - - 1,744,276 - - - - Countryside E - - - - - 584,092 - - - - Minnehaha Woods D Reconstruction ENG21025 - - - - 853,085 - - - - - Hilary Lane Reconstruction ENG21028 - - - - 700,430 - - - - - Well #5 69th Street Construct Underground Wellhead ENG21034 350,000 - - - - - - - - - Water Treatment Plant #2 Chemical Feed Equipment PWK21001 80,000 - - - - - - - - - Pneumatic Actuator Valve Replacement PW 23012 - 80,000 - - - - - - - - Pneumatic Actuator Valve Replacement PW 23013 - - 70,000 - - - - - - - Grandview Area Watermain Improvements - 110,000 - - - - - - - - Grandview Area Watermain Improvements PH 2 ENG 19‐349- - - - - - 240,000 - - - Water Supply Grandview Area PH 3 ENG20058 (ENG 21‐WM1)- - - - - - 2,500,000 - - - Water Supply 50th and France ENG20059 (ENG 21‐WM2)- - - - - - - 2,500,000 - - Water Supply Pentagon Park ENG20060 (ENG 21‐WM3)- - - - - - - 1,000,000 - - Future water improvements - - - - - - - 4,000,000 4,100,000 4,200,000 Total Capital Projects 3,248,996 2,736,618 4,199,238 4,334,711 5,160,727 2,728,368 14,797,688 16,500,000 4,100,000 4,200,000 Water Appendix A ‐ City of Edina Sewer Capital ImprovementsSewerCapital ProjectProject Number2022 2023 2024 2025 2026 2027 2028 2029 2030 2031Asset Management Software and Equipment 15-17310,000 10,000 10,000 10,000 10,000 - - - - - Blake Road Reconstruction 17-020352,354 - - - - - - - - - Morningside D Reconstruction 17-067506,897 - - - - - - - - - Prospect Knolls A Reconstruction 19-NX4- - - - 713,905 - - - - - Prospect Knolls C Reconstruction 19-308- - - - - - 639,146 - - - Prospect Knolls D Reconstruction 19-309- - - - - - 194,523 - - - Presidents B Reconstruction 19-310- - - 561,435 - - - - - - Morningside C Reconstruction 19-311- 692,533 - - - - - - - - Southdale B Reconstruction 19-312- - 367,606 - - - - - - - Concord B Reconstruction 19-313- - 774,927 - - - - - - - Indian Trails A Reconstruction 19-314- - - - 394,308 - - - - - Morningside E Reconstruction 19-318178,605 - - - - - - - - - Sanitary Trunk Capacity Expansion York Segs 2 19-335- - 1,700,000 - - - - - - - Sanitary Trunk Capacity Expansion York Segs3 19-335- - - 1,800,000 - - - - - - Sanitary Trunk Capacity Expansion York Segs 4 19-336- - - - - 3,000,000 - - - - Sanitary Trunk Capacity Expansion York Segs 5 19-336- - - - - - 1,100,000 - - - Sanitary Trunk Capacity Expansion Hazelton Seg 21-SS1- - - - - - 995,000 - - - Sanitary Trunk Capacity Expansion York 69th St W 21-SS2- - - - 1,200,000 - - - - - Sanitary Trunk Capacity Expansion LS6 to TH100- 1,100,000 12,000,000 - - - - - - - 72nd Street Sewer Line Upsize ENG2055- - - - - 1,600,000 - - - - Lift Station 6 Rehabilitation 19-3388,000,000 - - - - - - - - - Concord C Reconstruction ENG21020- - 285,754 - - - - - - - Presidents A Reconstruction ENG21021- - - 967,473 - - - - - - Rolling Green ReconstrucionENG20024- - - - - 585,314 - - - - Countryside E- - - - - 391,999 - - - - Todd Park B- - - - - - 311,236 - - - Benton Avenue A- - - - - - 186,198 - - - Lincoln Drive A- - - - - - 175,558 - - - W 7th Street- - - - - - 29,260 - - - Eden Avenue Improvements- 200,000 - - - - - - - - Minnehaha Woods D Reconstruction ENG21025- - - - 321,672 - - - - - Hilary Lane Reconstruction ENG21028- - - - 264,452 - - - - - Sanitary Targeted Inflow Reduction Project- - - - - - - - 130,000 - Lift Station Pump and VFD Renewal- 25,000 25,000 25,000 25,000 25,000 25,000 - - - 9 Mile Village Sewer Lining- - 175,000 - - - - - - Olinger Road Dip Replacement (130 LF + Road Repair)- - - 80,000 - - - - - Hilary Lane Sanitary Sewer Lining ENG21038- - - 450,000 - - - - - - Future Sanitary Sewer improvements- - - - - - - 1,875,000 1,975,000 2,075,000 Total Capital Projects 9,047,856 2,027,533 15,163,287 3,988,908 3,009,337 5,602,313 3,655,921 1,875,000 2,105,000 2,075,000 Appendix A ‐ City of Edina Storm Water Capital ImprovementsCapital ProjectProject Number2022 2023 2024 2025 2026 2027 2028 2029 2030 2031Utilities Equipment Replacement 15-108322,000 - - - - - - - - - Street Sweeper PW 23014310,000 - - - - - - - - Asset Management Software and Equipment 15-17315,000 15,000 15,000 15,000 15,000 - - - - - W 69th Street Eastbound Roundabout 17-H04- - - - - - 50,000 - - - Blake Road Reconstruction 17-020821,366 - - - - - - - - - Morningside D Reconstruction 17-067862,201 - - - - - - - - - Arden Park Restoration Project & Shelter Building 17-08130,000 25,000 - - - - - - - - Prospect Knolls A Reconstruction19-NX4 - - - 968,476 - - - - - Prospect Knolls C Reconstruction19-308 - - - - - - 1,387,295 - - - Prospect Knolls D Reconstruction19-309 - - - - - - 422,220 - - - Presidents B Reconstruction19-310 - - - 1,218,619 - - - - - - Morningside C Reconstruction19-311 - 1,503,173 - - - - - - - - Southdale B Reconstruction19-312 - - 834,174 - - - - - - - Concord B Reconstruction19-313 - - 1,934,316 - - - - - - - Indian Trails A Reconstruction19-314 - - - - 950,007 - - - - - Morningside E Reconstruction19-318 307,403 - - - - - - - - - Clean Wtr Strat & Lake Cornelia Clean Water Proj19-342 250,000 - - - - - - - - - Clean Wtr Strat & Lake Cornelia Clean Water Proj19-342 - - 600,000 - - - - - - - Clean Wtr Strat & Lake Cornelia Clean Water Proj19-342 - - - 750,000 - - - - - - CWRMP Major Amendment and Model Update19-346- - 167,000 - - - - - - - Concord C ReconstructionENG21020- - 620,243 - - - - - - - Presidents A ReconstructionENG21021- - - 2,099,942 - - - - - - Parklawn (Parklawn Ct)ENG21023- - - - - - - - - - Rolling Green ReconstrucionENG21024- - - - - 3,811,347 - - - - Minnehaha Woods D ReconstructionENG21025- - - - 698,204 - - - - - Hilary Lane ReconstructionENG21028- - - - 934,618 - - - - - Countryside E- - - - - 850,851 - - - - Todd Park B- - - - - 776,885 - - - Benton Ave A- - - - - 434,318 - - - Lincoln Drive A- - - - - 372,272 - - - W 7th Street- - - - - 124,091 - - - Wooddale Bridge Rehab - HistoricENG 19-301200,000 - - - - - - - - Valley View Road Bridge over CP Rail RedeckENG 19-303100,000 - - - - - - - - Eden Avenue ImprovementsENG 19-331200,000 - - - - - - - - Brook Drive Structure Rehab & Stream Bank RestoreENG21032100,000 - - - - - - - - - Stormwater Infrastructure MaintenanceENG20056230,000 175,000 180,000 190,000 200,000 210,000 220,000 - - - Flood Protect Strat & Morningside Weber Flood Proj19-341 14,000,000 Lynmar Basin Construction128,500 - - - - - - - - Natural Areas ManagementENG20057180,000 150,000 150,000 170,000 175,000 180,000 185,000 - - - Flooding Mitigation- - - - 10,000,000 - - - - - Future storm improvements - - - - - - - 4,000,000 4,200,000 4,400,000 Total Capital Projects 17,117,970 2,806,673 4,500,733 4,443,561 13,941,305 5,052,198 3,972,081 4,000,000 4,200,000 4,400,000 Storm Water City of Edina, MN Utility Rate Study Analysis 27 Appendix B – Projections Water Fund Projections Sewer Fund Projections Storm Water Fund Projections Appendix B ‐ City of Edina Water ProjectionsActualRevised Budget20202021 2022 2023 2024 2025 2026 2027 2028 20292030 2031Rates Inflation 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00%Investment earnings 1.00% 1.00% 1.00%1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00%Expense growth - operating 3.00% 3.00%3.00% 3.00% 3.00% 3.00%3.00% 3.00% 3.00% 3.00%Expense growth - personnel 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00%Operating Revenues Water revenues 7,968,600 9,611,957 9,231,345 9,581,987 10,061,087 10,564,141 11,092,348 11,646,966 12,229,314 12,840,780 13,482,819 14,156,960 Total Operating Revenues 7,968,600 9,611,957 9,231,345 9,581,987 10,061,087 10,564,141 11,092,34811,646,966 12,229,314 12,840,780 13,482,819 14,156,960Operating ExpensesPersonal services 1,184,350 1,984,738 1,689,426 1,773,897 1,862,592 1,955,722 2,053,508 2,156,183 2,263,9922,377,192 2,496,052 2,620,854Contractual services 2,552,308 2,203,938 1,613,628 1,662,037 1,711,898 1,763,255 1,816,153 1,870,637 1,926,756 1,984,559 2,044,096 2,105,419Commodities 700,754 867,545 904,500 931,635 959,584 988,372 1,018,023 1,048,563 1,080,020 1,112,421 1,145,794 1,180,167Internal services 738,407 617,827 599,580 617,567636,094 655,177 674,833 695,078715,930 737,408 759,530 782,316 Depreciation 2,703,756 2,760,192 2,798,000 2,881,940 2,968,398 3,057,450 3,149,174 3,243,649 3,340,9583,441,187 3,544,423 3,650,755 Total Operating Expenses 7,879,575 8,434,240 7,605,1347,867,077 8,138,567 8,419,976 8,711,689 9,014,110 9,327,657 9,652,767 9,989,89410,339,511Net Operations 89,025 1,177,717 1,626,211 1,714,911 1,922,520 2,144,1662,380,659 2,632,855 2,901,6573,188,013 3,492,925 3,817,448Non operating revenues (expenses) Investment Income (Loss) 316,290(31,902)140,000 81,059 80,647 70,062 65,11857,660 78,116 88,201 64,517 73,043 Intergovemental revenue 3,077 0 0 0 0 0 0 0 0 0 Interest on existing debt(531,306) (474,238) (379,177) (383,623)(313,950) (251,025) (196,675) (144,263)(96,675) (60,475) (33,600) (16,050) Hookups and Miscellaneous Income 1,233,697 665,2371,600,000 533,540 549,546 566,033 583,014600,504 618,519 637,075 656,187 675,873 Other income (expense) 38,511 28,054 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 Transfers out-(232,024) (469,639) (186,400) (186,400)(186,400) (186,400) (186,400) (186,400)(186,400) (186,400) (186,400) (186,400) Bond discount 402,517 429,146 209,369 Total non operating revenue (expenses) 1,230,762146,658 1,403,792 64,576 149,843 218,670 285,057 347,502 433,560 498,401 520,704 566,466Net increase (decrease) in resources 1,319,787 1,324,3753,030,003 1,779,487 2,072,3632,362,836 2,665,716 2,980,357 3,335,217 3,686,414 4,013,629 4,383,914Change in accounting principleEnding net assets 38,910,229 40,234,604 43,264,607 45,044,094 47,116,457 49,479,293 52,145,008 55,125,365 58,460,582 62,146,996 66,160,62570,544,539ActualProjectedWater Appendix B ‐ City of Edina Water ProjectionsActualRevised Budget20202021 2022 2023 2024 2025 2026 2027 2028 20292030 2031Rates Inflation 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00%Investment earnings 1.00% 1.00% 1.00%1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00%Expense growth - operating 3.00% 3.00%3.00% 3.00% 3.00% 3.00%3.00% 3.00% 3.00% 3.00%Expense growth - personnel 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00%ActualProjectedWaterCIP Funding Purchase of Capital Assets(4,047,271) (3,248,996) (2,736,618) (4,199,238) (4,334,711) (5,160,727) (2,728,368) (14,797,688) (16,500,000) (4,100,000) (4,200,000) Bond Proceeds 876,1863,000,000 9,000,000 0 Bond Proceeds - Expansion Projects 0 0 0 0 0 7,240,000 0 0 0 Unspent bond proceeds(1,600,000) Bond P&I - Future(1,135,989) (1,135,989) (1,135,989) Bond P&I - Future(809,470) (809,470) Bond Prin - Existing(2,540,000) (3,673,000) (3,104,000)(1,966,000) (1,900,000) (1,580,000) (1,400,000) (1,450,000) (1,110,000) (860,000) (660,000) (405,000)Beginning Cash 9,875,353 11,093,424 7,754,702 8,105,895 8,064,704 7,006,227 6,511,802 5,765,964 7,811,602 8,820,089 6,451,702 7,304,295 Add net operations 89,025 1,177,7171,626,211 1,714,911 1,922,520 2,144,166 2,380,659 2,632,855 2,901,657 3,188,013 3,492,925 3,817,448 Add back depreciation 2,703,756 2,760,192 2,798,000 2,881,940 2,968,3983,057,450 3,149,174 3,243,649 3,340,958 3,441,187 3,544,423 3,650,755 Add net non operating 1,230,762(282,488)1,403,792 64,576 149,843 218,670 285,057347,502 433,560 498,401 520,704 566,466 Add capital and bond (2,540,000) (7,828,549) (5,476,810)(4,702,618) (6,099,238) (5,914,711)(6,560,727) (4,178,368) (5,667,688)(9,495,989) (6,705,458) (6,550,458) Net change in balance sheet items 136,076 0 0 0 0 0 0 0 0 Net change in investments 698,330Ending Cash 11,093,424 7,754,7028,105,895 8,064,704 7,006,227 6,511,802 5,765,964 7,811,602 8,820,089 6,451,702 7,304,295 8,788,506 Other investments 3,053,498 2,409,485 809,485 809,485 809,485 809,485809,485 809,485 809,485 809,485 809,485 809,485Ending net assets 38,910,229 40,234,604 43,264,607 45,044,094 47,116,457 49,479,293 52,145,008 55,125,365 58,460,582 62,146,996 66,160,62570,544,539Target minimum working capital 8,662,531 8,512,988 7,070,477 7,089,945 6,867,491 6,799,135 6,968,442 6,758,5087,792,101 8,564,877 8,489,119 8,379,716Actual working capital-cash balance 11,093,424 10,164,187 8,915,3808,874,189 7,815,712 7,321,287 6,575,449 8,621,087 9,629,574 7,261,1878,113,780 9,597,991Over (Under) target working capital 2,430,893 1,651,199 1,844,903 1,784,244 948,222 522,152(392,993)1,862,579 1,837,473(1,303,690) (375,339)1,218,275 Appendix B ‐ City of Edina Sewer ProjectionsRates Inflation Investment earningsExpense growth - operatingExpense growth - personnelOperating Revenues Sanitary sewer revenues Total Operating RevenuesOperating ExpensesPersonal servicesContractual servicesCommoditiesInternal services MCES Depreciation Total Operating ExpensesNet OperationsNon operating revenues (expenses) Investment Income (Loss) Interest on existing debt Hookups and Miscellaneous Income Transfers out- Bond discount Total non operating revenue (expenses)Net increase (decrease) in resourcesChange in accounting principleEnding net assetsAcutalRevised Budget2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 20316.00% 6.00% 6.00% 6.00%6.00% 6.00% 6.00% 6.00%1.00%1.00% 1.00% 1.00% 1.00% 1.00%1.00% 1.00% 1.00% 1.00% 1.00%3.00%3.00% 3.00% 3.00% 3.00% 3.00%3.00% 3.00% 3.00% 3.00% 3.00%3.00%` 5.00% 5.00% 5.00% 5.00% 5.00%5.00% 5.00% 5.00% 5.00% 5.00%9,870,280 10,325,315 10,310,67610,090,607 10,696,044 11,337,80612,018,075 12,739,159 13,503,50914,313,719 15,172,542 16,082,8959,870,280 10,325,315 10,310,67610,090,607 10,696,044 11,337,80612,018,075 12,739,159 13,503,50914,313,719 15,172,542 16,082,895614,418 42,000 513,969 539,667 566,651 594,983624,733 655,969 688,768 723,206 759,366 797,335484,762 215,944 666,090 686,073 706,655 727,855749,690 772,181 795,346 819,207 843,783 869,09669,196 62,651 101,500 104,545 107,681 110,912114,239 117,666 121,196 124,832 128,577 132,434587,831 460,129 575,555 592,822 610,606 628,924647,792 667,226 687,243 707,860 729,096 750,9695,696,164 5,925,378 5,906,1996,142,447 6,388,145 6,643,6716,909,417 7,185,794 7,473,2267,772,155 8,083,041 8,406,3631,372,812 1,439,388 1,535,0001,581,050 1,628,482 1,677,3361,727,656 1,779,486 1,832,8701,887,856 1,944,492 2,002,8278,825,183 8,145,490 9,298,3139,646,604 10,008,220 10,383,68110,773,528 11,178,322 11,598,64912,035,116 12,488,355 12,959,0241,045,097 2,179,825 1,012,363444,003 687,824 954,126 1,244,547 1,560,837 1,904,860 2,278,603 2,684,187 3,123,871145,464(32,718)72,000 15,023 77,680 85,742 81,73277,469 77,491 96,149 97,465 100,600(246,175) (236,864) (205,132) (187,816)(158,725) (129,975) (100,875) (71,213)(44,450) (25,200) (10,475) (1,450)752,130 406,878 1,000,000 405,440 494,637 519,369 545,337 962,109 1,010,2141,060,725 1,113,761 1,169,449(132,024) (119,443) (186,400) (186,400)(186,400) (186,400) (186,400) (186,400)(186,400) (186,400) (186,400) (186,400)(96,846)231,516 107,600422,549 249,369 788,068 46,247 227,192 288,736 339,794 781,966 856,855 945,2741,014,351 1,082,1991,467,646 2,429,194 1,800,431490,250 915,016 1,242,862 1,584,341 2,342,802 2,761,715 3,223,877 3,698,538 4,206,07028,001,863 30,431,057 32,231,48832,721,738 33,636,754 34,879,61636,463,957 38,806,760 41,568,47444,792,351 48,490,889 52,696,959ActualProjectedSewer Appendix B ‐ City of Edina Sewer ProjectionsRates Inflation Investment earningsExpense growth - operatingExpense growth - personnelCIP Funding Purchase of Capital Assets Bond Proceeds Bond Proceeds - Expansion Projects Unspent bond proceeds Bond P&I - Future Bond P&I - Future Bond P&I - Future Bond P&I - Future Bond P&I - Future Bond P&I - Future Bond P&I - Future Bond P&I - Future Bond Prin - ExistingBeginning Cash Add net operations Add back depreciation Add net non operating Add capital and bond Net change in balance sheet items Net change in investmentsEnding Cash Other investmentsEnding net assetsTarget minimum working capital Actual working capital-cash balanceOver (Under) target working capitalAcutalRevised Budget2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 20316.00% 6.00% 6.00% 6.00%6.00% 6.00% 6.00% 6.00%1.00%1.00% 1.00% 1.00% 1.00% 1.00%1.00% 1.00% 1.00% 1.00% 1.00%3.00%3.00% 3.00% 3.00% 3.00% 3.00%3.00% 3.00% 3.00% 3.00% 3.00%3.00%` 5.00% 5.00% 5.00% 5.00% 5.00%5.00% 5.00% 5.00% 5.00% 5.00%ActualProjectedSewer(2,108,551) (9,047,856) (2,027,533) (15,163,287) (3,988,908) (3,009,337) (5,602,313) (3,655,921) (1,875,000) (2,105,000) (2,075,000)7,000,000 10,300,000 2,100,0003,000,000 1,000,000 3,400,0001,875,000 2,000,000 2,000,0000 4,700,000 1,800,0000 4,600,000 2,095,000(900,000)(829,011) (829,011) (829,011) (829,011)(829,011) (829,011) (829,011) (829,011)(1,628,328) (1,628,328) (1,628,328) (1,628,328) (1,628,328) (1,628,328) (1,628,328)(466,581) (466,581) (466,581)(466,581) (466,581) (466,581)(358,908) (358,908) (358,908) (358,908) (358,908)(669,962) (669,962) (669,962) (669,962)(657,400) (657,400) (657,400)(224,318) (224,318)(239,272)(580,000) (1,138,000) (886,000) (778,000)(745,000) (775,000) (805,000) (835,000)(615,000) (370,000) (390,000) (145,000)(13,313,594)5,865,969 8,181,860 1,502,2717,768,038 8,574,238 8,173,188 7,746,927 7,749,074 9,614,947 9,746,489 10,060,0101,045,097 2,179,825 1,012,363444,003 687,824 954,126 1,244,547 1,560,837 1,904,860 2,278,603 2,684,187 3,123,8711,372,812 1,439,388 1,535,0001,581,050 1,628,482 1,677,3361,727,656 1,779,486 1,832,8701,887,856 1,944,492 2,002,827422,549 17,853 788,068 46,247 227,192 288,736 339,794 781,966 856,855 945,2741,014,351 1,082,199(580,000) (2,818,195) (10,015,020)4,194,467(1,737,298) (3,321,248) (3,738,257) (4,120,142) (2,728,712) (4,980,191) (5,329,509) (5,293,781)902,355 0 0 0 0 0 0 0 0594,6655,865,969 8,181,860 1,502,2717,768,038 8,574,238 8,173,1887,746,927 7,749,074 9,614,9479,746,489 10,060,010 10,975,1261,404,334 818,836 0 0 0 0 0 0 0 0 0 028,001,863 30,431,057 32,231,48832,721,738 33,636,754 34,879,61636,463,957 38,806,760 41,568,47444,792,351 48,490,889 52,696,9595,728,624 5,212,961 5,606,1416,540,008 8,342,691 8,989,6699,535,046 10,151,261 10,744,57311,181,744 11,382,268 11,698,3597,270,303 9,000,696 1,502,2717,768,038 8,574,238 8,173,1887,746,927 7,749,074 9,614,9479,746,489 10,060,010 10,975,1261,541,679 3,787,735(4,103,870)1,228,031 231,546(816,482) (1,788,119) (2,402,187) (1,129,626) (1,435,255) (1,322,258) (723,232) Appendix B ‐ City of Edina Storm Water ProjectionsRates Inflation Investment earningsExpense growth - operatingExpense growth - personnelOperating Revenues Storm sewer revenues Total Operating RevenuesOperating ExpensesPersonal servicesContractual servicesCommoditiesInternal services Depreciation Total Operating ExpensesNet OperationsNon operating revenues (expenses) Investment Income (Loss) Intergovemental revenue Interest on existing debt Other income (expense) Transfers out- Bond discount Total non operating revenue (expenses)Net increase (decrease) in resourcesChange in accounting principleEnding net assetsActualRevised Budget20202021 2022 2023 2024 2025 2026 2027 2028 20292030 20318.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00%1.00%1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00%3.00%3.00% 3.00% 3.00% 3.00% 3.00%3.00% 3.00% 3.00% 3.00% 3.00%3.00%5.00% 5.00% 5.00% 5.00% 5.00%5.00% 5.00% 5.00% 5.00% 5.00%4,747,668 5,203,845 5,420,0705,853,676 6,321,970 6,827,7277,373,945 7,963,861 8,600,9709,289,048 10,032,171 10,834,7454,747,668 5,203,845 5,420,0705,853,676 6,321,970 6,827,7277,373,945 7,963,861 8,600,9709,289,048 10,032,171 10,834,745544,755 503,608 612,169 642,777 674,916 708,662744,095 781,300 820,365 861,383 904,452 949,675947,822 753,315 1,113,642 1,147,051 1,181,463 1,216,907 1,253,414 1,291,016 1,329,747 1,369,639 1,410,728 1,453,050129,168 124,231 165,800 170,774 175,897 181,174186,609 192,208 197,974 203,913 210,030 216,3310 258,622 336,459 346,553 356,949 367,658 378,688 390,048 401,750 413,802 426,216 439,0031,649,279 1,731,602 1,794,0001,847,820 1,903,255 1,960,3522,019,163 2,079,738 2,142,1302,206,394 2,272,586 2,340,7633,271,024 3,371,378 4,022,0704,154,975 4,292,480 4,434,7534,581,969 4,734,310 4,891,9655,055,131 5,224,013 5,398,8221,476,644 1,832,467 1,398,0001,698,700 2,029,489 2,392,9742,791,977 3,229,551 3,709,0054,233,916 4,808,158 5,435,923211,088(32,836)84,000 38,766 49,190 55,895 63,57875,333 74,409 77,261 83,249 92,70021,009(379,094) (337,594) (280,952) (920,004)(820,988) (741,838) (671,056) (603,125)(538,300) (480,325) (426,850) (378,925)4,755 3,450 0 0 0 0 0 0 0 0 0(59,954) (163,169) (68,200) (68,200)(68,200) (68,200) (68,200) (68,200)(68,200) (68,200) (68,200) (68,200)137,906 303,874 148,944(64,290) (226,275) (116,208) (949,438)(839,998) (754,143) (675,678) (595,992)(532,091) (471,264) (411,801) (354,425)1,412,354 1,606,192 1,281,792749,263 1,189,492 1,638,832 2,116,298 2,633,559 3,176,914 3,762,652 4,396,357 5,081,49826,728,488 28,334,680 29,616,47230,365,735 31,555,226 33,194,05835,310,356 37,943,916 41,120,82944,883,482 49,279,839 54,361,336ActualStorm WaterProjected Appendix B ‐ City of Edina Storm Water ProjectionsRates Inflation Investment earningsExpense growth - operatingExpense growth - personnelCIP Funding Purchase of Capital Assets Bond Proceeds Bond P&I - Future Bond P&I - Future Bond P&I - Future Bond P&I - Future Bond P&I - Future Bond P&I - Future Bond P&I - Future Bond P&I - Future Bond Prin - ExistingBeginning Cash Add net operations Add back depreciation Add net non operating Add capital and bond Net change in balance sheet items Net change in investmentsEnding Cash Other investmentsEnding net assetsTarget minimum working capital Actual working capital-cash balanceOver (Under) target working capitalActualRevised Budget20202021 2022 2023 2024 2025 2026 2027 2028 20292030 20318.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00%1.00%1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00%3.00%3.00% 3.00% 3.00% 3.00% 3.00%3.00% 3.00% 3.00% 3.00% 3.00%3.00%5.00% 5.00% 5.00% 5.00% 5.00%5.00% 5.00% 5.00% 5.00% 5.00%ActualStorm WaterProjected(3,911,519) (17,117,970) (2,806,673) (4,500,733) (4,443,561) (13,941,305) (5,052,198) (3,972,081) (4,000,000) (4,200,000) (4,400,000)14,418,600 2,800,000 4,500,000 4,400,000 14,000,000 5,000,000 4,000,000 4,000,000 4,200,000 4,400,000(331,605) (331,605) (331,605) (331,605)(331,605) (331,605) (331,605) (331,605)(535,646) (535,646) (535,646) (535,646) (535,646) (535,646) (535,646)(526,399) (526,399) (526,399)(526,399) (526,399) (526,399)(1,674,905) (1,674,905) (1,674,905) (1,674,905) (1,674,905)(598,180) (598,180) (598,180) (598,180)(478,544) (478,544) (478,544)(478,544) (478,544)(502,472)(1,460,000) (2,109,000) (1,767,000)(1,548,000) (2,090,000) (1,920,000)(1,625,000) (1,685,000) (1,395,000)(1,225,000) (1,100,000) (940,000)7,556,960 7,910,998 5,267,2133,876,635 4,919,045 5,589,4546,357,826 7,533,334 7,440,8787,726,107 8,324,874 9,269,9931,476,644 1,832,467 1,398,0001,698,700 2,029,489 2,392,9742,791,977 3,229,551 3,709,0054,233,916 4,808,158 5,435,9231,649,279 1,731,602 1,794,0001,847,820 1,903,255 1,960,3522,019,163 2,079,738 2,142,1302,206,394 2,272,586 2,340,763(64,290) (530,149) (116,208) (949,438)(839,998) (754,143) (675,678) (595,992)(532,091) (471,264) (411,801) (354,425)(1,460,000) (6,136,296) (4,466,370)(1,554,673) (2,422,338) (2,830,811)(2,959,954) (4,805,752) (5,033,815)(5,370,279) (5,723,823) (6,066,295)(292,990)00 00 0 0 00751,5817,910,998 5,267,213 3,876,6354,919,045 5,589,454 6,357,8267,533,334 7,440,878 7,726,1078,324,874 9,269,993 10,625,959587,661(76,973)26,728,488 28,334,680 29,616,47230,365,735 31,555,226 33,194,05835,310,356 37,943,916 41,120,82944,883,482 49,279,839 54,361,3364,744,571 4,435,464 5,153,2326,013,274 6,388,032 6,639,8188,400,964 8,741,601 9,092,6689,496,562 9,898,376 10,437,6797,910,998 5,267,213 3,876,6354,919,045 5,589,454 6,357,8267,533,334 7,440,878 7,726,1078,324,874 9,269,993 10,625,9593,166,427 831,749(1,276,597) (1,094,230) (798,579) (281,991) (867,631) (1,300,723) (1,366,561) (1,171,688) (628,383)188,280 The CITY of EDINA 2022 Utility Rate Study Update September 20, 2022 The CITY of EDINA2022 Utility Rate Study Update •Study had goals to recover operational and capital costs, incentivize conservation, support system capacity expansion, and provide adequate cash reserves. www.EdinaMN.gov 2 The CITY of EDINAOther Utility Billing Changes •Policy changes for billing adjustments for water leak Onetime Consumption is 100% more than historical quarterly average Max adjustment of $500 •New utility billing system, bills will look different •Action required by those who pay by ACH to update account information •Next steps: •Communicate to residents and rates submitted to Council for formal approval in December www.EdinaMN.gov 3 The CITY of EDINAQuestions/Discussion www.EdinaMN.gov 4