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Staff Recommendation: It is recommended by staff that the lateral cost be set up in a manner consistent with the S.A.S. for mank charges and shown separately on the utility bill for a specified period of time, with the availability of prepaying the lateral service costs to avoid future interest charges. The charge for water and sewer would then be standard for all users, depending on whether commercial or residential, whether located within the special district or not. By billing in this manner, there would be no questions as to whether each property is paying for its share of the cost of the improvements and it would eliminate the year end reconciliations necessary to separate the cost of actual use versus payments towards the lateral service costs. Had this been a project under Minnesota State Statutes Chapter 429, these costs would have been assessed accordingly and had no impact on the utility bill or billing sm~cture. It would be necessary to apply an inflator such as the construction index annually to the lateral service costs from the original adoption date to the date of actual connection to the system and then prepare an amortization schedule amortizing the lateral service costs in the same manner as the S.A.S. for the trunk charges. Under this method it will be necessary to accumulate the usage of ail special district connections and calculate what has been paid for actual water and sewer usage. The remainder would be applied to the lateral costs and amortized over the time remaining for the S.A.S. for the trunk costs. This would generate a time specific for the payoff of both types of charges and eliminate "double bookkeeping" on special district accounts. An example would be Northern Airgas which connected to the system immediately upon completion. They have been paying the special district minimums for five years. If the "regular charges" for water and sewer were applied to their usage and the difference from what they had been paying between the minimum under the special district, and the regular charges, it would be possible to determine how much they have been paying towards the lateral service costs and then the remaining balance would be spread over the remaining five years at 8% and be shown z,~arately on the utility bill, just like the S.A.S. shows for the trunk charges. ~/~In surnrnary, action would add one additional line to the utility bill and would allow for a this t?uniform structure for water and sewer charges for both commercial and residential, regardless of geographical location. It would also allow for assurance that the charges are being collected fairly om ail participants. . Committee Action: Based on discussion - recommend to Council amending the process in which the special district 3utility charges are administered and billed. Reviewed By: City Administrator Finance Officer Cit3' Engineer FC: 1/25/94