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86-1684 WHITE - C�TV CIERK PINK - FINANCE G TY OF SAINT PAUL Council yry/� /� CANARV - DEPARTMENT File NO. `��'~ ��+ Bj.UE aMAVOR . uncil Resolution Presented By Referred To Committee: Date Out of Committee By Date WHEREAS, t e Cit of Saint Paul has granted, in Ordinan e No. 16947, as a ended by Ordinance No. 16962 , a franchise to use the public stre ts an ways to deliver hot water within Sain Paul to Distric Heat ' ng Development Company (DHDC) , a Minne ota non-profit corp ratio ; and WHEREAS, o July 18, 1986, DHDC filed with the City 'Cle k a notice of its inten to amend hot water rates on September 19, 1986, and filed an am nded Demand Rate on December 12, 1986 ; and WHEREAS, s ch ra es are thereby effective on an interim basis pending C ' ty Co ncil approval, which approval requires a public hearing; and WHEREAS, D DC ha provided evidence to the City that th proposed deman rate hange to $3 . 04 per kilowatt per month ' s just, reasonabl , an nondiscriminatory; and WHEREAS, t e Cit Council has taken into account those matters require by S ction 6 of Ordinance No. 16947 , and by C. F. No. 85-91 , an finds that DHDC has met all procedural and substantive re ireme ts for approval of a rate change; now therefore, be i RESOLVED, hat t e DHDC rate schedule which sets the "d mand rate" for its c stome s is hereby revised to increase the "d mand rate" from $2 . 57 per ilowatt per month to $3 . 04 per kilowat per month; and e it FURTHER RE OLVED, that all other rates, changes, rules nd other provisions of t e DHDC hot water franchise remain in f rce and are unchang d; an be it COUNCILMEIY Requested by Department of: Yeas p�eW Nays Nicosia ln Favor Rettman Scheibel sor,,,e� __ Against BY Tedesco Wilson Form Approved by City Attorney Adopted by Council: Date Certified Passed by Council Secret ry By J '2'–�3�� By� Approved by Mavor: Date Approved by Mayor for Submission to Cou cil BY - — BY wHITE - C�TV CIERK B��E �M,,roR E G TY OF SAINT �AUL Council �r �, CANARV - DEPARTMENT File N 0. � uncil Resolution Presented By Referred To Committee: Date Out of Committ e By Date i -2- FINALLY RE OLVED, that the attached revised Schedule A ' s approved and su erced s any previous Schedule A, and is inco porated by reference in o Ord' nance No. 16947 as amended. i COUNCILMEIV Requested by Department of: Yeas �feW Nays � �u"os'a [n Favor �iiettman �Scheibel Sonne�.•� Against BY Terasoo �Wilson ' C ��Q� �C 2 3 i�u Form Approved by City Attorney Adopted by Council: ' Date � Certified Yass d uncil Se t BY � z-�3._�G A prove Mavor: Date ✓ DG� '� � � Approved by Mayor for Submission to Cou cil BY - — BY PUBIIS ED .�a - 31987 � � �` �t�`c0�7 . ' AMENDMENT TO SCHEDULE A • to i, HOT WATER FRANCHISE ' Grar.ted to ISTRI T HEATING DEVELOPMENT COMPANy by the CITY OF SAINT PAUL Ord 'nance No. 16947 , Adopted July 20, 1982 as amended by Ordi nce o. 16962, Adopted October 5, 1982 RATES: The fol owing rates shali be effective beginning wi h the billing month o Dece er 1986 and shall remain in effect u til superseded: Dema d Rat : $3 .04 per kilowatt per month Ener y Rat : $10.68 per megawatt-hour PROMPT PAY NT ROVIS ON: A charge of 5 (five) percent will be added to t e ne bill computed at the rate shawn above, whic charge sha 1 co stitu e a discount from the gross bill. for \ payment within he di count period, all as more specifically provided in the Hot W ter Delivery Agreement. FUEL ADJJSTMENT: As rovided in the Hot Water Delivery Agreement, the nergy Charge may be appropriately adjusted f om < time to time du ing t e fiscal year to cover increases (or decreases) in t e cos of energy purchased by DHDC which occ r subsequent to t e est lishment of Projected Energy-Related osts .� : for such period, to t e extent such costs are in excess of ( r ' belaw) the costs proj cted by DHDC in esta.bl ishing the Ener Charge for such erio . " SURCHARGE: 'i A Su charg of 8.7 percent will be included in t e gross and et mo thly ills computed ur.der this rate schedul except as therw ' se pr vided by law. � • (The foreg ing ends he as-filed October 24, 1986 , Amendme t. ) � ' DHDC � 12/11/86 ; . BUDkA1ES.RBM �� Q�^l�d� 12/12/8b �I TR1CT HEA IN6 DEVELOPMENT COMPANI' - RATE CALCULAIIDNS SUMriARY fREVISEDI ', FY 1986 fY 148b FY 1487 FY 1981 �' BUD6ET ACTURL(f) BUD6ET REVISED{2 f . COVERA 6EriAND R TE 2 ----=-- --------- - 3 � DEMAND ELATED CO TS . 5,584,33U 14,B55,840 6,384,458 6,511,8 6 4 LESS: F NOS FROIi EBT PROCEEDS 0 -14,334,440 -3t7,`AO -635,0 0 5 LESS: A LOCATED F .FEITE� DISCDUNT5 -59,738 -34,755 -54,314 -54,3 4 6 ---------- ---------- ---------- ------- 7 UEMAND NAR6E REV NUES REQUIRED 5,529,592 5,491,U85 6,�12,584 �,822f5 1 8 9 DIYIDEQ BY CONTRA T QEMAND lKN) 159,760 15H,184 144,386 i42,8 1 10 EQUAiS DVERA6E R TE PER KHlYR f3�.bl f34.71 f41.64 f40. 7 !f EAl1JVAL NT RATE P � KN/!10 f2.89 52.90 53.48 S3. 0 11 • 13 11. Et1Ek6Y ATE 14 ------- -- 15 ENER6Y ELATED CO TS 3,492,658 2,978,213 2,758,312 2,465, 1 lb , LESS: LOCATED F RFEITEI� DISCOUHTS Q -?4,05b 0 0 17 I ----------- ---------- ---------- -------- 18 ENER6Y HRR6E REV NUES REQIJIRED 3,492,658 2,954,151 2,7�8,312 2,465,2 7 14 ' ' 20 DIVIDED BY ENER6Y ALES iMiiHl 240,9?4 232,674 235,645 130,9 0 -"- �� '�UAIS NERGY RAT PER MMH f14.5U f12.64 f1I.71 f20. 8 12 �� 23 lII} DIFFERE IAL 8� ROJ STED RATE 2� ------ --------- -------- 25 QEMAND TE If/MMB U EQl1IVRLEN?) t5.41 f5.9B 57.18 f?. 3 26 ENER6Y ATE (S/MM U EQUIVALENT} �.25 3.72 3.43 3. 3 21 ------ ------ ----- ---- - 28 TOTAL C ERR6E RR PER MMBTL! 10.21 4.10 �4.61 !0. b . � 29 - " 30 TRR6ET R tE f7.01 t1.01 57.01 fl. 1 � 31 LESS CO RA6E RRTE A9DVE -10.21 -9.70 -14.b1 -10. 6 32 ----- ------ ----- ---- 33 EQUALS FFERENTI PER MMBTU -3.20 -2.bR -3.b0 -3. S 3� 35 TIriES tiM TU SALES MkH C 3.413} 822,274 794,816 804,256 788, 3b ', EQUALS T TAL �1FFE NT1AL -2,634,454 -2,138,850 -2,893,819 -2,480,5 3 . , ' . 37 � . 38 ESTIMATE /ACTUAL F �NCHISE FEES 601,861 613,10? b?3,U05 596,04 39 ADJUSTME T TO QEMA D REVENUES -bQ1,8b1 -613,101 -b23,U05 -596,00 - 40 CURRENF RANCHISE EES DUE 0 0 0 41 . 42 , HET DEMA D REUENUE REQUIRED 4,927,731 4,617,478 5,384,574 5,22b,51 43 i ADJUSTED DEMAND RA E tf/KN!YR) f30.84 530.84 f37.33 536. 44 AOJUSTED DEMAND RA E {f/Kii/MD? f2.51 i2.57 53.11 53.0 i32 ------- ------ ---------------------------------------------------------------- ---- MOTE: I1) ACTU L fAUDITE ? 12? ADJU TMENTS MA E PfR �ISCUSSIDNS Y1TH CITY STAFF. . , (SI RATE SET TO S3 44 fOR RElfA1N1N6 10 MONTHS TO PRUDUCE EQUIVALEtiT REVEMUES. . , .. � UEMCH6.P.EtS `'� `�(JO y 1?/12/E6 � � � PISTR! T HEATINfi EVELOPtlENT COMPANY - fY 1987 �EMAtaD C05T DETAII tREVISEDI , FY 1986 FY 19B6 fY 1997 FY 19 7 DEMAMD P.ELATE COSTS BUDGET ACTUAL ll? BUD6ET . REVISED i2) 1 A. 6EBT'SERVICE T DF INT EST JNCOME 2 INTEREST EX NSE 3,606,573 3,940,U34 4,227�502 3,42 ,152 3 PR[NCIPAL R PAYNENT 0 934,471 45,040 4 ,040 4 FJNANC]N6 C T5 198,80U 2,136,577 165,887 26 ,887 S LESS: NON- ASH ITEMS -BOA,b01 -1,511,521 -854,41� -85 ,�15 6 LESS: IMTEFE T i� MISC NCOhE -394,121 -1,219,763 -1,343,�13 -1,34 .423 1 --------- --------- -------- --- ---- 8 SUBTDTAL 2,6Q2,OS1 �,324,803 2,294,SSf 1,9B .BOf 9 10 B. NON-EI�ER6Y OPE ATJR6 EXP kSE 11 PLANI LRBOR 806,701 741,b74 842,240 84 ,20a 12 PLANT MAIkT NCE 428,04U �36,714 552,540 55 ,500 13 OTHER PLAHT 241,544 415,072 564,b45 39 ,b45 1� DISTRIBUtiO EXPEMSE 14I,601 144,515 234,154 26 ,150 15 6ENERAL AkD OMINISTRA IVE !b SRLARIES �r EMPLOYEE OMP 591,466 " 624,635 732,700 13 ,700 17 CONSULTANT FEES 245,640 346,747 372,100 37 ,100 16 UfF10E EXP MSE & OTH R 184,70f 193,671 300,550 3 ,550 ' 14 UNP,ERLIZED DfMAND RE ENUES 236,246 301,194 130,000 !8 ,004 20 --------- --------- --------- ---- -- 21 SU9TOTAL 2,46t�,414 3,164,132 3,728,845 3,b� ,8�5 22 23 C. CAPITAL E1(PEkD TURES 24 PLRNT 2,395,119 318,894 82,000 8 ,U00 25 QISTRIBUTIOM SYSTEM 343,44U Tb3,577 587,504 B4 ,500 • 26 OTHEP, 24,680 42,623 37,T04 3 ,200 27 -------- --------- -------- --- ---- 28 SUBTOTA 2,719,198 1,185,494 626,704 9b ,7f?4 _ _ __ - - � " 24 � 30 D. CHAN6E IN YORK N6 CAPITA 31 FUEL INVENTO Y ' 0 33,216 0 0 32 RESERVE FUNO (EfICI. E PAHSION) -2,745,635 11,104,b23 -3b1,b21 -36 ,b21 33 01HER CURREN ASSETS 52,075 500,084 -�88,Tb5 -4B ,765 34 CONSTRUCTION PA1'RBLES 124,551 8b1,845 247,356 20 ,356 35 QTHER CURREN LIABILIT ES -143,820 -1,318,U57 38�,342 56 580 • 36 --------- ------- -------- ---- - • • 37 5UbT0T -2,712,829 11,181,711 -Zb1,63B -85 450 38 39 E. E%PAtISIOM RESE VE FUND 0 ' 4 0 4 40 --------- --------- -----�� _ -- 41 TOTaL DEMRND R LATEO COS S f 5,589,330 14,855,8�4 6,384,458 6,51f 896 � ---------- ---------- ---------- ----- --- NOTES: ' t11 ACTUAL fOR EAR tAUD Dl. . t21 ACJUSTMENI MAUE PER DISCUSSIOMS YITN EITY STAFF. � °"' °- � � �� (P.� CITY F SA{NT PAUt . E• • . . €� -� � � OFFICE OF TH CITY ATTORNEY �,, ;� . E� UU1� r' � � � - ''" ��F ��,`` . ' EDWARD P. 5T RR, CITY ATTORNEI n,� E ��"'' ";.�£ ' 647 City Hall, airn Paul,Minnewra 55'10, �� 612-29&517 GFORGE LATIMER - MAYOR CONFIDENTIAL MEMORANDUM T0: Memb rs of the City Council FROM: Thom s J. eyandtt�� Assi ant ity At rney DATE: Dece er 1 , 1986 RE: 1987 istr ' ct Heating Development Company Dema Rat Confidential A orn2 Client Communication On Thursday, De embe 18, the Finance Committee will receiv a staff report on the HDC 1987 Demand Rate . Iz� reviewing ut' lity case law it is clear that the rate mak ' ng � authority must ake pecific factual findings in a case. is is so that a re iewi g court can deter�r�ine whether or �not t e Ceuncil ' s actio s we e sound or arbitrary and/or an abuse o dis- cretion. Your ltim te decision is whether the rate result is just, reasonabl and non-discriminatory. The facts that g into tnat deci�ion s ould be articulated ir.to the record of the ublic � hearing a�ter t e ev ' dence has been heard� but before you ap ove or reject 'the r te r quest. If it appears that the Council makes findings of fac tha differ with the Staff Report or the D DC .,� '- response, if an , a esolution outlini-ng- those differences an be • ' prepared and p ssed by the Council at the December 30, 1986 meeting. The review staf cur ently plans on having it ' s report available by noon Wednesd y, De ember 17 , 1986 , for review prior to t e Finance Committ e me ting on December 18 . We do not know a this time if DHDC in ends to file an independent report�� TJW:paw �• • cc . Jim Snyder Betty Atch ' son Karen Swen on • � � � � � ��«�y ;.. "'�� ``T' °' � CITY OF SAIN PAUL _ . , , �ti+ 7 �� ~' EPARTMENT OF FINANCE AND MANAGEMENT S RVICES �� y: J �� •L ;� �� ^c '�:• DIVISION OF ACC UNTING ,'�0j?�",'a;�� 2 4 City Hall GEORGE LATIMER Saint Paul, Minn sota 55102 M11YOR To : Me e s of he City Council � � , � , ti e Y �� From: Elis Get�h tchison, Jam s n�er, Karen Swenson an Thomas J. eyandt� Date : Dece er 17 , 198 Re : Dist ict Heating Development Company Fiscal Year 1 87 Prop sed D mand Charge Staff have com leted analysis of the FY87 proposed demand ch rge and conclude t at th amended demand charge rate is just and � reasonable. We recom end that the City Council should approv the amended rate. This �ate case has r ised or highlighted a number of matters concerning the regul .tory relationship between the City and HDC. It has also br ught o the surface a number of issues which should be purs ed fu ther. This memorandu ther fore is in three parts: first, a discus ion of the issues nvolv d in regulation of DHDC; second, inform tion regarding the mende demand charge and the staff recommenda ion for approval ; nd th rd, information and recommendations regarding unre olved issues. . R GULATORY AUTHORITY AND ROLES Authority_to_R �ulat The parties disagre as to the. authority had by the City Cou cil to regulate t e rat s of DHDC , and the role to be played by he City in the re ulatory process. Both positions have author ' ty in the law, and heref re may require �udicial interpretation �or definitive re oluti n. , • . � '/ V`r�l` �� . December 17 , 986 ' Page 2 DHDC - is of� th opin on that the franchise, Hot Water Delive y Agreement, an Paym nt and Priority Agreement together are a contract betw en th City and DHDC which provides all details of the regulator rel tionship. DHDC asserts that once it files a request for a rate hange, it has a prima facie case that t e request would result in a just and reasonable rate. DHDC sserts that the City must hen approve the� rate unless it can sho that the DHDC Boar of D ' rectors has abused its discretion. DH C asserts that legal principle known as the "business judg ent rule" provides the Board with very broad authority. The C ' ty as regulator ca ot i vade the �udgment process unless an abu e of discretion or bad f ith can be shown by substantial eviden e by the City. An rgume t used by DHDC is that unless other cu tomers complain, th City is powerless to act to refuse approval f the rate request d. .The •position f the City is that a contract exists between the . , parties outl ned i the documents noted above. It is our belief � that the pow r to r gulate is a very broad power , defined s the police power. The ontract only provides limits when thos limits are s ecifi d; e.g. a limitation allowing for eithe approval or eject on of the requested rate, not allowing or modification f it. -In-this view DHDC must°prove-with det il-ed substantial viden e that expenses requested� are' for items used or useful - by the u ility in its current business-within-th requested period, t is presumed that municipal officials act in good faith, nd th burden would fall upon DHDC to show a ack of good faith or arbitrary action, if the City were to deny a rate request . The difficul y in etermining which parts of each position are correct stems from several sources. First, DHDC asserts t at, since it is nonprofit corporation, rate of--return to shareholders does ot apply to the process. DHDC further sserts that this is the m jor issue in utility regulation, and th t possibly non of th regular utility regulation concepts a ply to the relation hip b tween the City and DHDC. Second, witho �"' detailed leg slati n such as that which exists for the reg lation of utilities by th Public Utilities Commission, each issu is sub� ect to d bate nd differing interpretation. Finally t e Yelationship is fa rly new and is a constantly evolving pr cess that needs r defin ng by its very nature. . ' . ( / � -��0.� December 1 , 1986 Page 3 � An example of a robl m created by a lack of legal authority s DHDC's request t have information provided to the City classifie ' as c nfide tial to avoid a loss of competitive advantage. The r con ern appears to have some merit, at leas in the abstract. n an ttempt to meet this need City staff agr ed to a very- 'restr ctive provision concerning the use of data, a provision�'which in an of itself made �this review proces�' -�cumbersome. In our o inion DHDC took advantage of this agree ent and over-classi ied i formation', but the issue is one that mu t be dealt ith i more detail. Complexit of_t e_Rol s What is the rol of t e City in the DHDC rate regulation proc ss ? 1 . Protector of cu rent customers from rates that are the resu t of an abu e of discretion? 2 . Prot ctor f bon holders to ensure the -ability of DHDC t . pay ff all obl gations- it chooses to enter into? Which bond older ? 3 . Protector f def rred franchise fees, to pay them as qui kly as possibl ? 4 . Prot�ctor of the City as a customer with unique needs? 5 . Prot�ctor of the .present? Of the future? The conce�ns a e more than esoteric, and the answers are unc ear. The City' s goa s also may be complex: 1 . Should we try t compel DHDC to raise the rates as much as poss ' ble o it an repay existing debt more quickly? 2 . Shou d w comp 1 the lowest rate possible and require a sk leta oper tion so that current customers get real'ly ch ap en rgy? 3 . Should we accep DHDC rates without question and let D DC do anythi g it ishes? The questiions re ne rly as endless as the answers are elusi e. � . i � , i I ��(V��7 December 17r 198 � Page 4 i In this rate cas , sta f have assumed that regulators have to balance a variet of c mpeting legitimate interests. Thus rat s should provide t e uti ity with adequate revenue to meet its ebt service obl�igati ns an reasonable expenses incurred in provi ing° utility se vice. Prese t customers should be protected from- - excessive �ates nd fu ure customers protected-from- deteriora ed service . ' Achievements What' s bee ' acco plish d in the FY87 rate process? A substant' al sa ings has already taken place in the revised energy and dema d cha ges approved this year. DHDC "customers will be paying ess t an they would have if the rate as originally file had een approved - - and less overall than- hey did last year. Both sides�have ident fied staff � to work on the rate process and the curren sta fing evels and personalities seem to be wor ing out well. Both sides removed their lawyers from the review teams , which in all 1 kelihood resulted in a much shorter process . � 2 . R COMME bATION ON THE FY 87 DEMAND CHARGE Procedura _Hist ry DHDC filed notice of intent to change its rates on July 18 , 1986 , and filed the ates n September 19. The rates took effect October l on a inte im basis subject to refund. Customers were notif ' ed in writing of proposed rate changes , and customer �neeti gs we e held on September 4 (downtown) and September 10 ( t. Ai y) . Preliminary an lysis showed that the requested energy rate could be decrea�ed, ased n changes which had occurred since the filing. �HDC greed to reduce the rate and that rate was approved by th Coun il on November 13. . � �� December 17 , 19 6 ' Page 5 The demand'�rat'L was r viewed by staff initially on the basis f information sub itted by DHDC and more recently under terms o the October 8 m moran um of understanding. On December 10, a com romise was reached on the demand charge DHDC agreed to submit a reduced demand charge based on intere t rates for the f ' rst q arter lower than anticipated. The compromise was evelo ed in a cooperative fashion. While ther were other issues of concern to City staff, as discussed in t e third section o this emorandum, they do not warrant a recommendation o den the proposed demand charge as amended. Customers were otified of the proposed amendment to the dema d charge on Decem er 11. The public hearing on the demand charg originally sche uled or December 16, has been rescheduled fo � December 23. This process com lies ith all procedural requirements of the franchise and th � Hot ater Delivery Agreement. . � Findings_of_Fact 1 . DHDC origin lly roposed a change in the demand charge from $2.57 per k lowat of contract demand per month to $3�:11/kw/mo th, a =rate- increase of 21$. 2 . The amende dema charge would be $3.05/kw/month, an`^�18 'increase. H wever, customers have been billed at the $3.11 rate n an interim basis beginning October 1. To avoid re-billing and calculation of refunds for October and Novemb r, th amended rate is $3.11 for those two months and $3.04 ffective December 1. 3 . DHDC said t at ch nges in operating costs were the reaso for the in rease. In addition, earliest customers' contract de and 1 vels have been re-evaluated, resulting i abou a 10� net reduction in overall demand. 4 . The propose amen ment is based on a change- in"interesti�-� rates'. �--1�� ; � December 17 , 986 ' Page 6 5 . Proposed overa 1 FY87 rates are lower than those p�ojected for 1987 in tae original feasibility study, becausa of substant ' all_: ower fuel costs, lower debt service costs ,- a d- sc�e aflditional revenue sources. Howeve=, �,DHDC gen ral a d administrative costs and operatiors and main ena��e °expenses are higher than projec�ed---in 1982; - du to a variety of factots. 6 . Coverage ratas are higher than the target rates specified in the Paym nt a�d Priority Agreement, so franchise faes , estimate by �HDC at $596 ,005 , should be deferred. 7. A compari on �f ra�es is as follows: r�ende Last Year Original Amended Ezer-,-y & Actual Proposal Energy D=mazd FY 86 FY 87 Charge Czar�e Demand charge . rate ($/kw/mo) $ 2 , 57 $ 3 . 11� $ 3 . 11 $ � 3 . 0 revenue � , 91 , 085 6 , 012 , 584 6 , 012 , 584 5 , 822 , �2 , Energy charge rate ($/KWH) 1� . 02 11 . 71 10 . 68 10 . 6 revenue 2 , 54, 157 2 , 758 , 312 2 , 465 , 227 2 , 4�5 , 22 Average " cost/` MMBtu ....,,.:...,...�_�T.. . ,,. 9 . 56 . 9 . 86 . _.. 9 . 56 ._..._. �__..9_4. , 8 . The propo ed zm nded demand charge rate is just and reasonabl . Discussion Interest payme ts on Series A bonds were budgeted at an ave:a e variable rate of `.7 $. The actual average rate for tae =irst quarter is 4$ , res-;1 ing in a savings of $133 ,000. • There �may��be a dit`_o al interest savings. City Treasu:er Gary Norstrem aic o December 9 that the variable bond =ar::e normally foll ws �ie federal funds rate. In the current 'Puol c Investor," sev n e=o omists project that the federal funcs �a e will either s ay t:e same or take a slight drop from Jan�ar•: through Septem er �f 1987. If this occurs, total""FY��87" Series �A�° interest " savi gs cou d be $532,000:� . �- �- 1��s� , , December 17 , 198 ' Page 7 I I Th��"propose'�d dem nd ch rge amendment does- not reflect all- thes ?�- .. .possible �savings -for hree reasons: 1 . ,..These•�savin s are partially offset by additional planned � expenses-�an - lowe demand related �revenues than were � incluced in the b dget. These include more- contract. demand redu tions, higher uncollectibles , - lower deferred fr nchis . fees � (due ' to lower rates) ;-� higher workir.g cap tal;'° nd additional �construction` and distr;butio ' syst m expenditures. 2 . The �aximu proj cted savings are not guaranteed. First . quart�r FY 7 Ser es A interest rates are the lowest of any qU�arter since 1983. 3 . �The DEDC• Bo rd ha more than one policy option should-ths �.maximLm sav ngs o cur. These options include orderingva refuz�c or 1 werin rates next fall , improving DHDC's� . - -fund .balanc , or aking additional expenditures next- spring or s mmer. These cons�,derat ons a e raised in the above discussion of rol s and discussed fu ther s issues below. 3 . � ISSUES TO BE RESOLVED The balance of t is me o is designed to outline those areas of concern for the ounci and the DHDC Board of Directors and management. It s hop d that some solutions can be found, or future problems verte by our candid statement of concerns. Budget_Process The budgetjproce s beg n with a Board resolution identifying priorities 'as pa t of strategic planning process : 1 . Relia' ility of se vice 2 . Cost educt ons , uch as plant efficiency 3 . Add c• s tome s 4 . Impro•te com unica ions 5 . Addit-_'�,onal usine s opportunities , or research and develdpment : - � � �� ,, ; December 17 , 198 Page 8 DHDC Finance Dir ctor udy Brynolfson said he reviewed budget guideli�es with he Bo rd in May, and subm?tted the budget in June according t thos guidelines. The guidelines included su h things ss rate i creas s not exceeding two-thirds of the inflaticn rate a d spe ific expense guidel:nes such as keeping number cz employ es an consultant costs t':e same as the previ us year . At various time , som FY 87 budget items have been compared t midyear FY ' 86 ex endit res, and others to the FY 86 budget. Fo example, e�nploy es we e compared to FY 86 actual numbers (no change) anc� insu ance as compared to FY 86 budget amounts (substa�:ti 1 in rease). The Board onito s the budget through the budget year by perio ic . actual -:s udge repo ts. Spending v.ariances occur without Boa d approva: u Iess a par icular variance is daemed to be material. . They are e plai ed to the Board as part of the finance report. A ma� or re�lloc tion ue to FY 86 interest. savings was present d � by mana�em�nt to the B ard last spring and was approved. I_t included increas d exp nditures for plant reliability and efficieacy and ncreased marketing and R�D expenses. Recommer_dations - - Bud et Process 1. The DHDC Bo rd sh uld use additional targeted standards o performnnce in e alua ing budgets. These should include long range as well a shor range factors and eaternal benchmarks s ch as comparisons ith ot er systems. For example, DHDC should track fLnd' bala ce as well as cash flow from year to year. DH C shoul d sub}nit t the ity information on t�ese standards and their azplicati n as art of the rationale for rate changes. 2. ThE B ard s ould establish and use prsset guidelines in making hud et c anges for increases or deczeases in costs or revenues, HDC s ould list and provide detailed rationale for each change to he Ci y during rate reviews. � ' " ' � ,F� �-�G�� December 17 , 198 Page 9 3. The budlget p esented should be compared with the previousl adopted budl,get w th c?� ges in personnel and direction clearly explained. 'There shoul be a clear trail showing the original adopted budget, han�e during the year, and the next year's budget . S stem Im roveme ts —Y-------p----- — At the downtown ustom r meeting DHDC President Hans Nyman sai that the first g al oi he board was to have high reliability nd a high level of servi e. M�. Nyman stated, "We are there now. he plant is in tip- op sh pe,' and added that it has fewer outage than other distr ct �e ting systems. However, t ere a e scb tantial budget increases for system improvemen s; fo exam le, the FY 87 budget proposes plant . maintenanc expe ditLr s up 298 from the FY86 budg.et and 16$ • . higher tha FY86 pro,;e ted actual expenses. � � System exp nse 1 vels lso are substantially higher than ' projected n the origi al BHDC feasibility study. DHDC staff s y more upgrac�ing i bein done than was projected in 1982, and t at ' these expetlditur leve s szould continue for the next five yea s. In additio�, DHD mav se its repair and replacement reserve f r emergency impro emen=s DHDC Operations irect r Tom Wetsch said that reliability and plant cost redu tion p ojects are classified on an A-C scale, reviewed with t e Boar , aad funded on the basis of their rank and dollars ava' labla. Pa-rback analysis is given on plant efficiency impr veme� s. Recommendation - -_SYst m Isprovements DHDC should con ider h ndl:ng system improvements on a project basis from' conc ptior_ o completion to facilitate understanding budget imp cts, arge_ rel�ability measures and maximum paybac periods fo eff' ciency improvements should be adopted to assess acceptable expe diture levals. This information should be included in the ratio ale for rate changes submitted to the C ty. � � � . • ; a __�_��"Y December �7 , 1986 � Page 10 ' Marketing Tfie,-FY-"87','�b+sdg ted m rketing expense appears excessive � in� ou �udgment'�"M^-'�her '"is °a substantial increase from "the" previous y�g�':�--The�-e?ui alent of 3 •full time-employees .are._assigned t -marketing, � and there are consultant expenses budgeted for - ea h employee--fLnct on. The Saint Paul Port uthority and Department of Planning and Economic De-rel pment strongly encourage participants in thei downtown ar�a evelo ment pro� ects to use district heating. Therefore, aom mark ting activities are done in addition to DHDC expenditures . Recommendiation ___Ma keting --------- -- ----- The DHDC ISoard shoul consider questions such as the followi g: . ��.. Is the M rketi g Director position, which has been vac nt ;<<� for so�e ime, ecessary? 2;: Is t e FY 7 mar eting increase reasonable in view of t e ` � othe,r �ar eting activities taking place? 3 ; How !,will he su cess/failure of this program be measure ? '•'�!_4: Should th mar eting expense include both staff additi ns " � and su�st ntial provisions for consultants , when there might be rosso er in their functions? Insurance DHDC's Dece�be 1 br akdown showed plant insurance at the Ju e �� budget amountr f $39 ,000. On December 8 , in response to a C ty request to see DHDC oard meeting minutes, DHDC provided Oct ber information wh ch me tioned that the previously projected $170�000�'incre se- wo ld not occur, and plant insurance rates would be about the s me as last year. Recommen ation - - In urance --------�----- ----- ------ When sub tanti 1 cha ges occur between the time the annual budget is prepa ed an rate are reviewed, DHDC should promptly dis lose ' these -ch nges o the City. � , r . . � ' ' � �� p�� r December lh , 19 6 ' Page 11 Cooling_St dy rDHDC�budge, ed $ 9,000 (plus $26,000 in FY 86) for a feasibili y� 'study, of a possi le co lin€ system which would supply both chilled water f r air cond_tioning and hot water for the dist ict heating system uring the summer. If developed, the system would not be owned by HDC a d will not be operational for at least two years. Limited nform tion on the scope and need for the feasibility stu y is a ailable. Recommendation -__Coo ing_Study --------------- DHDC�should---con ider- und.ir,g R&D projects- 1ike�-this- with external--� "funds. The ' study does ot appear to be something used and use ul�, in providing ut lity ervice, a usual standard for determinin whether a ost hould be charged to utility ratepayers. In addition, . he n ed, j stification, and progress for� each R&D • . project sh uld e ext nsively documented. i /z/z�� w �'La—/�� af,�.��,� % /ess�/Q«� �i.ts s c.a�1.K �ess � �� ax�cNsc yk,R.,�.,�„a....� S f�Q� "O -- ----- i �c:e s . h .-��.�.c� � �i¢s s .�� o _.._. - - S ��-�_ - - 37 2� �/3SLs� (�� B-sa> �,�. (,c..c._ � 10-�� "�a a-.�� tJe.t-�cu�---- s�-� � ,o�� S' ri 9�L �,�ga. �38' .s'o z� s� �� s-3� rt.,�c«u,e s �t/e��a�/�s� �o�c�� irs� 3�s� .33y� ir�3 3 s��9 9�2- _ --- ✓� �(/,�v � `3�r .�.9,3- �• 98' 3.03 .�. a� I > ----- - -:,a- --- �r� _ -,�� _ �Z ;�� .�-, ,s ,-�K.e, _ - � ; � ---------- --- - —��-L -- ,/h�� _ ��. 73 � . , � • . �-�-��d� i AMENDMENT TO SCHEDULE A to HOT WATER FRANCHISE Granted to ISTRI T HEATING DEVELOPMENT COMPANY by the CITY OF SAINT PAUL I Ord nance No. 16947 , Adopted July 20, 1982 as amended by Ordi ance o. 16962, Adopted October 5, 1982 RATES: he fo lowin rates shall be effective beginning wit the billing onth f Dec mber 1986 and shall remain in effect until supersede : Demand Ra e: $3.04 per kilowatt per month Energy Ra e: $10.68 per megawatt-hour PROMPT PA MENT PROVI ION: A charge of 5 (five) percent will be added to he n t bill computed at the rate shown above, whic charge shsll constit te a discount from the gross bill for payment within the discount period, all as more specifically provided in th Hot ater Delivery Agreement. FUEL ADJU TMEN : As rovided in the Hot Water Delivery Agreement the nerg Charge may be appropriately adjusted f om time to t me du ing t e fiscal year to cover increases (or decreases) in t e cos of energy purchased by DHDC which occ r subsequent to t e est lishment of Projected Energy-Related osts for such period to t e extent such costs are in excess of ( r below) th� cost proj cted by DHDC in establishing the Ener Charge fo such perio . SURCHARGE. A s rchar e of 8.7 percent will be included in t e gro.ss and net m nthly bills computed under this rate schedul except as othe ise p ovided by law. (The fore�oing ends the as-filed October 24, 1986 , Amendme t. ) DHDC 12/11/86 i I � . , 1�� '�_ /�? /Q�G 6UORATES.PBM � 12/1�/B6 . I � � DIST�ICT MEATI 6 DEVELOP ENi CQMPANY - RATE CALCULATIQNS SUMMARY �-�y� O -------------- --------- ------------------------------------ -- �-/G� I FY 198b FY 1986 Y 2487 fY 1981 BUDGEi AC1UALilf B1106EF P,EVISED(2! -------- ---------- -------- ---------- 1 I. COVEP,A6E EMAND RAT 2 ---------�---- -- 3 aEMANQ RELATEU C T 5,589,33C� 19,85 844 6,3B4,458 b,283,388 4 l.ESS: FUND� FROM i PROCEED 0 -14,3 ,000 -317,54(► -317,5U0 5 LESS: ALLO ATED FOR TEO DISC UNTS -54,738 4,155 -54,314 -54,374 b ---------- -- ------- ---------- ---------- ? DEIIAND CHR�6E REYEN S R U1RE 5,524,59? ,491,085 6,012,�84 5,411,514 8 9 DIVIDEU BY'CONTRACT EMANQ t i! 159,Jb4 158,184 144,386 �44,38b 10 EBIJALS COV�RR6E RAT PER K41/Y f34.6} f;Q.11 f�l.b4 f�0.44 21 EBUIYALENTIRATE PEP, N/MO f?.8 f2.94 f3.48 f3.42 12 13 II. ENER6Y RATE t4 ------ T 15 ENER6Y RELATED CDSTS 3, ,658 2,478,213 2,758,312 2,465,?2T 16 LESS: ALLOCATED FORF ITED DISC UNTS 0 -24,456 0 0 '.1 -- -- --- ---------- !8 ENER6Y CHAR6E REVEMII S REQIIIRE ,492,6 2,454,151 2,758,312 2,4b5,T27 19 I 20 DIVIafQ 8Y ENER6Y SA ES (MMN! 24U,924 Z32,874 235,645 230,980 21 EQUALS ENER6Y RATE P R MitH f14.5Q fi?.69 ft1.71 f10.b8 22 23 lIt. DIFFERENTIAL & AD�US D RATE 24 ------------------- ------- ?5 QEMAND RATEIlfIMtIBTU QUIVALENT f5.91 E5.4 �7.18 f7.Q6 2b ENERfiY RATE (f/MMBTII BUIVALEMT 4.15 3.72 3.43 3.13 21 ------ ------ ------ ------ 28 TOTAL COVERA6E RATE R MM8T0 14.21 4.14 l0.6! l0.14 29 3U TAR6ET RATEI f7.41 f7.U1 .O1 f7.01 31 LESS C�4ERA6E RATE A VE -14.21 -9.7Q -14 6} -10.19 32 ------ ------ ----- ------ 33 EQUAl.S ➢FFF�RENTIAL R BTl1 -3.?0 -2.69 -3.64 -3.18 34 35 TINES MMBTUISALES (MM 3.4131 B1�,274 144,81b 8Q4,Z56 188,335 3b EQURIS TdTAl. DIFFEREN l -2,b34,454 -2,138�854 -2,843,814 - 503,512 JI 38 EST!MATED/ACIiUAI FRAN ISE fEES 601,8b1 6l3,147 623,+}45 6 ,005 34 AUJ115TMENT T� OEMANU EVE!lfJES -601,861 -b13,lO7 -623,0�5 -b2 Op5 40 CURRENT FRAN�NI5E f QUE 0 0 0 4 41 42 NET UEMAND R�ENUE R UIREQ 4,427,731 �,817,918 5,389,579 5,288,5U9 43 ROJUSTED OEM 0 P TE f/KM/YR! f3Q.84 f30.84 f37.33 f36.63 44 AD3U5TED DEMAND ATE t /KMlM�} f2.51 f2.51 f3.i! f3.4� t3? --------------------- -------- -------------------------------------------------------- NOTE: I (l1 ACTUAL tAUQITE�) (2) UEBT SERVICE aaJU5 E� PER QI CIISSIONS MITH CITY STAFF. (3? RATE SETITa f3.44 OR REMAIN N6 10 MONTHS TO PRODUCE EQUIVALENT REVENUES. I n � I . f� . ��/ �YO SD DEMCH&.RBI1 _,,- ,/ �¢�� 1z111/86 . I 0�� ^' � O �-�� 6I5T�ICT HEAT! 6 aEVELDP ENT COMPANY - FY 1497 QEMAkD C05T DETAIL � FY 986 FY t486/ EY 198T FY l987 DEIIRND RELATED COSTS BUD Ei ACTUAL if BU06ET P.EVISED t?! -----------r-------- ------ -- ------- --- ------- ----------- 1 A. DEBT SERVICE MET OF I TEREST IN OME 2 INTERE5T �XPENSE 3,606, 3 3, 90,039 4,2Z7,542 4,126,432 3 PRIMCIPAL REPAYMENT U 934,471 45,000 45,U00 4 FINANCIN6 COSTS 148,80 ,136,571 Tb5,881 �65,887 5 LESS: MQ -CASH ITE S -808,601 1,511,521 -854,415 -854,415 6 LESS: INT�REST & MI C INCQME -394,72! -1,229,1b3 -1,343,423 -1,393,�23 7 --------- --------- --------- --------- 8 SUBTOTqI 2,602,05! 4,324,8Q3 2,29U,551 2,189,481 o I 10 C+. NON-ENEF.&Y �ERATINB XPENSE 11 PLANT LAB� 808,10 �1,614 842,�00 842,240 12 PLANT MAINTENANCE 428, 4 6,714 552,540 552,504 t3 QTMER PLANT 297, 44 41 ,411 Sb4,6�5 564,b45 14 DISTRIBIITIQN EXPfNS 191 6�J1 1�4 525 234,150 234,150 15 6ENEAAL A ADMINIS ATIVE Ib SALARIES ic EMFLOY COMP 5 2,466 624,6 ?32,100 732,700 17 CONS!lLTA T fEES 45,500 346,1� 372,14Q 372,100 !8 OFFICE E PENSE � HER 8Q,701 193,671 300,550 30Q,5�0 19 UNREALIIEQ UEMAND REVENUES ?36,296 301,l94 134,040 130,000 24 I -------- --------- --------- --------- 21 SUBtQTAI 2,984,910 3,164,232 3,728,845 3,725,815 ?2 23 C. CRPITAL EXPE�fUITURES �� °�aNT 2,395,118 378,89� 2,OOQ 82,000 ?5 DISTRIBUTIQN SYSTEM 343,40Q 7b3,571 ,500 507,500 2b OTHER 24,68U 42,6?3 37 4Q 37,20Q T7 --------- --------- ------ --------- 28 SUBTOTAl. 2,719,l48 1,185,094 626,1 626,700 19 30 D. CHRN6E IN MOR'I(IN6 CAP1 AL 31 FUEL INVENT RY 0 33,216 0 4 3? RESERYE FU DS tEXCI. EXPANSIDN -2,745,635 - 11,10�,623 -3b7,621 -361,621 33 OTHER CURRE T AS5ETS 52,415 540,08� -488,765 -488,T65 34 CONStRIiCTI M PAYABLE 124,55! 861,8�45 247,35b 2�J7,356 35 OTNER CURRE�IT LIABIL TIES -143,820 -1,318,U57 381,39Z 387,392 36 --------- --------- --------- --------- 37 SUBT4T�L -Z,7l2,829 11,181,71I -T61,638 -261,638 38 39 E. EXPANSION RESERVE FIJND 0 0 0 0 44 ---------- ---------- ---------- ---------- 4f TOTAL DEMAND �ELRTED C TS f 5,589,334 19,855,840 6,384,�58 6,283,368 -------------�--------- --------- -------------------------------------------------------------- NOTES: fl? ACTUAL FOR YEAR (AU ITEDI. (21 SNOMS REDUCED DEBT ERVICE AS ESTIMATEO 11/86 I - . , . I � , --�`l�-/G��/ . . Dist ict Hea ing � F��o Dev lopment ;� �� . - �-�x qn Co pany � �,�; . '�'E• a private, on-profit company 76 West eltogg Boulevard St. Paul, N 55102-1161 (612)297 955 December 12, 1 86 Albert B. I Olso , Cit Clerk City of St. Pa 1 3rd Floor, Cit Hall Saint Pau�., MN 5510 Dear Mr. Olson: At the re�I uest of Ci y staff, the enclosed revised Rate Calculatibns S ary and FY 1987 Demand Cost Detail are prov'ded to replace tho e att ched to DHDC' s rate filing dated Decemb r 11, 1986. Ple se us them instead of those previously furni hed in connec�ion ith c ' ty action on this matter. Please contact Rudy rynolfson at 297-8955 or William Mahlum at 292-1661 if yo have any questions. Very trul you s, �� Hans 0. an Presiden enclosure , cc : Hon. Kiki Sonne - Chair, Council Energy & Utilities Committee Tom �eyandt - Office of City Attorney Kare Swen on - City Council Research Jim Snyder, Bett Atchison - City Finance Department Rudy Bryno fson DHDC Will}am M. Mahl - Mahlum & Associates I I i I � ' , .. ti. �/p�I��T • �V`� BU6RATES.RBM , . f2�i��ae I ISTRICT H TIN6 DEVELQPNENT COMPANY - RATE CALCULATIONS Si1MMARY lREVISE01 --------- -------------------------------------------------------------- F(L�D I FY 1986 FY 1986 FY 19B7 �'� ��1�7 "� � •- ^�� r�? BU06ET ACTUAL111 Bl1D6ET REYISE➢{ L i�� i t'i G 6 -------- ---------- -------- -��`� c ,-.- ,. ' ^r_c � � ; t�'.�CE 1 I. COVER 6E OEf1AND ATE 2 ----- --;------ --- 3 OEMANQ RELATEO C STS 5,589,330 19,855,840 6,384,458 6,511,8 b 4 LESS: UNOS FRDM DEBT PROCEEOS 0 -14,330,000 -317,540 -b35,0 0 5 LESS: ILQCATED ORFEITfO DISCOUNTS -54,738 -3�,155 -5�,374 -54,3 4 6 ---------- ---------- ---------- ------- 7 DEMAND CHAR6E P,E ENUES RE9UiRE0 5,529,592 5,441,OB5 6,012,584 5,822,5 2 8 ? DI4IOE BY CONTR T �EMAMD lKti) 159,1b0 158,18� 144,386 142,8 1 10 I EQUALS COVERA6E ATE PER KN/YR f34.61 f34.71 f4l.64 f40. 1 11 EBl1IVA ENT kATE R KN/MO f1.89 s2.90 f3.48 f3. 12 13 II. Et1ER6Y RATE 14 ------ ---- 15 I ENERGY ELATED CO TS 3,492,658 2,978,213 2,758,312 2,465,22 16 LESS: LOCATED RFE[TEQ DISCOl1NTS _________0 -24,OSb _________0 17 I ---------- --------- 18 ENER6Y HARfiE REV !NlES RE�UIRED 3,491,656 1,95�,151 2,�58,312 2,465,22 19 20 I, QIVI�ED BY ENER6Y SALE5 tMNH! 24Q,924 232,879 2�5,645 230,98 21 EQ!lALS NERGY RAT ?ER MNN E14.50 f12.69 f11.71 f10.6 2Z ?3 Iil. DIfFERE TIAL & AD USTED RATE 2� ------- --------- ---------- 25 I QE�lAND ATE tf/MM U EQOIVALENT) f5.97 f5.98 s7.18 f7.0 26 EMER6Y ATE (f/MM TU EBUIVALENT} 4.25 3.12 3.43 3.1 21 I ------ ------ ------ ----- 28 TOTAL C VERA6E RA PEk MMBTU 10.2f 4.70 l0.61 l0.1 ?4 36 I TAR�T TE f7.01 t7,01 f7.41 f7.01 31 LESS CO ERA6E RATE �BOVE -�10.21 -9.10 -10.61 -10.1 32 ----- ------ ------ ----- 33 I EQOALS IFfERENTi PER MMBTU -3.T0 -2.69 -3.6Q -3.1 � 35 I T1MES MM TU SALES MMH K 3.4131 822,214 794,B1b 804,256 788,335 36 E9UALS T TAL OIFFE ENTIAL -2,634,�54 -2,139,850 -2,893,819 -2�480,583 37 38 I ESTIMATE /ACTUAL f ANCHI5E FEES 601,8b1 613,101 623,00'S 546,005 39 ADJUSTME T TO QEMA D REVENUE5 -bQ1,8b1 -b13,147 -623,005 -59b,005 40 I CURRENT RANCNISE EES DUE 0 0 0 0 41 4T ' NET QEMA D REVENUE REAUIRED 4,927,131 �,811,978 5,389,574 5,12b,517 43 I AbJU5TEQ OEIIAND RA tf/KM/YR1 f34.84 f30.84 f37.33 f3b.60 44 ADJUSTED DEMAND RAT !flKM/NU? f2.51 f2.57 f3.11 f3.05 i3? -------- --------- ------------------------------------------------------------------ --- iNOTE: tt! ACTU (AUDITEO (2) ADJUS MENTS MAO PfR DI5Cl1SSI0NS YITH CITY STAFF. i (3? RATE ET TO f3. 4 FQR REMAIMIN6 10 M�NTHS T� PRUDtlCE EBUIVALENT REVENUES. I . � . . .-..v... . I . .. . � . � . . . . � a� ,. • .♦�� ► ' � . . . , , ' � : DEMCH6.RBlf ' 12/11/8Ib . . QISTR CT HEATIN6 DEVELDPMENT COMPANY - FY 1987 OEMANQ COST DETAIL tREVISED) I FY 1986 FY 1986 FY 1481 FY 198 aEM�Na RELATE COSTS HUOGET ACTUAL (i) BUD6ET REVISED 2l 1 A. OE9t SERVICE ET OF INT REST INCOME 2 INTEREST EX ENSE 3,606,573 3,990,634 4,221,502 3,922 1�2 3 P INCIPAL R PAYt1ENT 0 939,4T1 45,000 45 Q04 4 f�NANCIN6 C 5TS 198,80U 2.136,577 265,887 265 887 5 L�SS: NON- ASH ITEMS -808,601 -1,511,521 -BS4,415 -854 �15 6 L�SS: INTER ST & MISC INCOME -394,721 -1l2T9,1b3 -1,393,423 -1,393,423 7 --------- --------- --------- ---- -- 8 SUBTOTAL 2,b02,051 4,324,803 2,290,551 1,985, 01 9 10 B. NON-ENER6Y OP RATIN6 EXP NSE 11 PLpNT LABOR 808,702 741,674 84Z,200 842, OQ !2 PLANT MAINT NANCE �28,400 436,714 552,500 55?, 0 13 DT ER PLANT 297,544 415,072 564,b�5 391, 45 14 DI�TRI8UTI0 E1(PENSE 191,601 l44,525 234,1SQ 266, SO 15 6EMERAL AN� DMINISTRA IVE 16 �ALARiE5 & EMPLOYEE OMP 592,466 614,635 732,1�0 732, 00 17 OHSIlLTAN FEES 245,604 3Q6,747 372,100 372, 00 18 Q�FICE EXP NSE & QTN R 180,741 195,671 300,550 30Q, 50 14 pNREALIZED DEMRND RE EMUfS 236,29b 3Q1,194 130,004 f84, 20 --------- --------- --------- ----- 21 ISUBTOTAL 2,4B0,910 3,1b4,232 3,728,8�5 3,b41, �5 � 23 C. CAPITAL EIIPENp TURES 24 PLA�IT 2,395,118 318,894 82,004 82, 25 QISTRIBUTIUN SYSTEM 303,�44 763,577 541,50Q 8�4, 00 26 OTH�R 20,68Q 42,623 37,104 37, 21 --------- --------- --------- ----- 28 St18I�TA 1,119,148 I,t85,044 b2b,700 963, 29 3Q G. CHAN6E IN MORKI CAPITAL 31 FUE INVENTOR ' 0 33,216 0 0 32 RES�RVE FUNQ 4E1(CL. EX ANSION) -2,745,635 11,104,613 -367,621 -367, 1 33 OT�R CURRENT ASSETS 52,015 500,084 -�88,T65 -488,7 3� CON TRUCTION AYABLES 124,551 8b1,845 Z07,358 207, b 35 QTHER CURRENT LIABILIT! S -143,820 -1,318,05T 387,342 563,5 36 37 I SUBTOTAI -2,112,829 11,181,711 -�61,638 -85,4 38 39 E. fXPAN�ION AESER E FUND 0 0 0 0 40 ---------- --------- --------- ------- 41 TOTAL �6EMANQ RE ATEO CQST f 5,589,33Q 19,855,8�0 b,384,45@ 6,31l,8 6 ------�--------- ---------- ---------------------------------------------------------------- - t�TES:i li) ACTUAL FOR Y AR lAl!➢I dl. (21 AD�t1STMENTS AOE PER D SCUSSIOMS NITH CITY STAFF. � � C�--��-- ��,. . � � � � IT OF SAI� PAUL .�1 �. • � i , ; .:{I (1.1 Q�I �� T$�i �i TY CiO��Ci�+ ' . . I • , , ommi�tee �e�art �"� ce a e e�t � Persannel Cammittee. ' � � DECEMBER 18, 1986 1. Approval of minutes rom mee ing held December 11, 1986. Approved 2. Discussion of Riverf st 198 . Apvroved authorit for Parks & Recreation De t. to ne otiate a contract encom ssin issues outlined in 12-15-86 memo. for 1986 onl . 3. Letter of Staze Depa tment f Revenue transmitting app ica ion �o. . of Robert H. 'evine or red ction of certain real estate in the City of Sain Paul. Laid o er unt 1 12-2 -86. • ; 4. Resolution amending he 198 budget anii reducing the Financing Plan for � Federal Reven e Shar'ng Tru t Fund by $341,333 and reducing the 1986 Spendi g Plan by $632,�00. Laid o er until 12-23-86. ' S.' Resolution amending he I98 budget by adding $223',923 to the Financing Pla . ' and to the Sp nding lan fo Special Projects - General Government - Promot Saint Paul: �ity F ding L verage. A roved with recommendation to a s. � =°D�ir��te� e�:o Co�s��g Fiacal Year 1987 Fro�ed Da�d t��t . �e�e� ��t�t�o � reca �dst�r.onw ' &. Resolution establi ing a ommunity Festival Revolving Loan and Grant Prog am to be funded bq a rcharg of 25C to be paid as part of the price of each admission to River est; to be admi.nistered by Parks and Recreation Departm nt. � A roved with ecomme ation to ass. I , I I C;=y �, FLOOR SAIl`IT PAUL, ESOTa SSI02 4 - _,_ _. � ' , ' - , . � . , C�_ ��o z d� �� _ - t �t. . � � . � ��i' � � - `' �_ . `R .. __. _._.r __� , � �-�---'�--_ _.�._=:..�a � _ � . N Y CE O PUBLIC HEARiNG ON THE IiEQUEST OF DISTSICT .. ``�18 ~ � ' D ELOPM NT COMPANY FOR AN�INCSEASE 1N RATE3 � �� . � [t ,�tG4�D �E� F H DE�EMB62'�to��9g(o TD D6C�N�tJR.Z3,+`1g'(e _ � , � Notice is he by giv that the City Council oi the City of Saint Paul, _ r Adinnesota,will eet in th Council Chambers,Third Floor of the City Iiall and Court House in t e City of aint Paul,Minnesota at 10:00 a.m.(CS'!�on December , �23�. 198 , to consi er the re uest of District Heating Deve o o� t Com�any for . , appmv l,of a c nBe in tb Demand rate fram.$2.5?/kx�D�t�ract dexna�:d.to , � � . � . .: . . . . I -_ , _" � _ : _ ' , .. . � • ._._--___.. ..---- �- ---__ � . . . � , . . �,. : .., � �q�6 . . w'r� `�' � � . � �� . .�-De.��'''� • - � • 1�.��G� ._ . ; � �� :. .• �:,�. a , ' ) �3 c'�1' `�s ak'a.�.e:.�.�a.�l-'..-}a'-l'k.�y ra1e. �~ pµ � 'i.b3.11Ykag�efi 've Octo r 1, 1986^This rate change request�c filed with the . ..�_ __.____ 'City_Clerk on ptembe 19. 1986,and is preseatly in effect�s an interim rate R subject to ref d. - - . - - , •• . �-- -: , — - - � � A copy oi e rate uest is available for public inspection from 8:00 a.m.to � ; 4:30�.m.Mon ap throug Friday,at the ofiice of the City Clerk.Room 386 City ;` Hall and Cou House in Saint Paul.Minnesota►.At the time and place fixed for `,,pub c hearing the City uncil of the t;ity oi Saint Paul wilt give all persons who , ap at!he earing opportunity to express their views with respect to the � "t " pro sea i'e4 � �p _ . , • � _ . Dated berl�1 86. _ __-- . _ .-- _ . AL.BEAT B. ON.Ci y Clerk. .�A�z• /3i�9 fl b —--. ,._.--- --: _ ____._ ___.___. _� ._.__�_. ...�_�....._�.._�.,..__. _ _ ' \ - _ ' i!: ' � 1��. � _ -...- ��,�� =�� . � - r' / , I _� '� ._ . . ' .._..._ .. � � - . �,�- ��,^._�� ___ .._ _ . _ ,: e .T _.. , - - , . . . ..... , _., __ - �_ : ,� .;� }�� - � ��. + � Y �. .; � �;' . ,,.;+:,.,;,,T,,,,�.,, _..� ` f . N � .,� ' �� '-��mnc#i`.i��t�;� of�t �ipil,, � _ , _ _ , �.�= �� '"�1t �' r'=` ,* �"'�;�. ,�.�:t�.�,.� �-�'�. .. . a, �y�' � r - � :" +�" � �,... .. _ ': � . .-.. � .. '. '� ;t� 'rn r.� f� �� L'�S�I+i��'Y�3. � ��l • ' � ,'�� ' µs ?Yk I '�� '�"=r�'`'�x�,�,' x� � : F,�-z. � < g � ;,. "ur,-7s'�?-L .,�+'ri.af�.�'�.r,�'.ir. @s� aF� v-�.�, �.t� � �:z �*s�a�.��t•r"'��` r �.�z � '+'�!'t�` ,..�, ,.�.'-��x �g ��'"y ! aroy '"�a`a*s,S"" ,i#�a>�: arx,t" a�s�t�� .r _ .� ._... _ ._.._ �_.._ .._,. »��......». '� .�� "� >ri...�cs7 rr ::�5 '' ��-r..sx. -.�.��_- i ' , � _ �_�� i �' � . . ; � �, ! , � ; �NOT CE OF- SL I C HEAR J P!G ON THE REqiIEST OF ISTRI �HEATING DEVE�.OPMENT COMPANY FOR AN IIiCREASE I/i RATES - Notice is hereby given hat the City Council of the City of Saint �aui , Mi nesota witl meet in the Council Chambers, Third Fioor of the �ity H 11 and Court House in the City of Saint Paul , Minnesota at 10: 0 a.m. (CS7) on December 16, 1986, t.� cansider the requ�st of istric Heating Development Company for approvai � of a cha ge in he Dem nd rate from $2.57/kw of contr-act aemand to $3. 11/f�w, ef ective October 1, 1986. 7his rate change request was filed with the Ci y Clerk on September 19, 1986, and is � presentlylin eff ct as n interim rate subject to refuna. - A copy q�f the ate re uest is avaiiabie for public inspection - from 8:OO ,a.m. 0 4:30 p.m. Monday through. Friday, a� the office af the Ci�ty Cle k, Ro m 386 City Hail and Court House in Saint Paul , Minnesvta At t e time and place fixed for public hearing thz City Cbuncii of the City of Saint Paul will give aii persons wti� appea� at t e hear ng an opportunity to express their vieHs with respelct to he pro sed request. Dated Decelmber 3 1986. _ _ _ ____._. _ _. .�..--- -- -- - aLBERT B. IOLSON, City C erk. I I Dec r 6, 1986) � �• ��r I :':, c,�, . :� I ;o :`� .�. . =. '�:•� t�► � _�"� �Y.r " � c-�_� �3 � . , I I I I I _..__. _. .._. .:_._.�_.I._..�.__......,..___.. ___ .__ _.__�_ _ �. i ,. . � . �� ..�_ 1�,� . I C TY OF �AINT PAUL ` • � O FIO� OF THE CITY COIINCIL +�moune ��"'�� I 1986 �Qte : DPCember 11, I COM ITT � E RE PORT � TO � i Sai t PQ I City Council F R O M �I �i� m ir t e �r1 ENERGY, UTILITIES & FP�VIRONTMIENT I C F'�A(R Co ncilmember Kiki Sonnen At the Delember 0, 198 meeting of the Energy, Utilities, and Environ ent Committee� the c mmitte pass�d a motion for preliminary approval to r fer the proposal to mend t e district heating demand rate to the full Cou cil with the �PCOmme dation that it go to the Finance Committee on Decembe 18, 1986, for furthe revie and that the public hearing be continued to December �3, 198 . j c-� '�_=� ,� � c± I ,, . Y..,. "�t I f= r1 . c� I I �� I I I I I I I I CTI'Y HALL ! SE ENTH FLOOR SAINT PAUL, MINN OTA 55102 �+_ I . _ .. � : �_ C� � -/�� . - --- - � _ -_ _ ._ ____ _ � �� _ . :�r� � � _ , ��'li.i!�'1''6�"D '�,�ti� Nat ia h�reb given thaf'the CitY. oi tl�e C�t7 ��#afr,Paul; , urt H ��in the '��F�aor of �ty�#�1 and . 2 r .� ty M�tiiie�Pa�ti�•at Y0:00 a.m.(� recN�st ad�L'strkt H D4v�elopmerit,',._ _ ` ior pra�'al i a in the D�tn'iand i�a�+e �'S7/kw/month of cqntract I � . ?i3.11�k mo�tth.ef�eetirc 0��, 2g�d`�a�W to.:$.04/kw>�onth, 1 ve ber i�86:'�fs ra�t��reqai�ct,.is aa aa�t:tp,tbe rate ed with the City es�c�s�egterr�icrer 1�; �6.and fs presently�in�tect as an ? �: sub,iect retu�,d, - : A a�tne ra 'ret�eat ia dwai3a�te ior pt�6lic inspection irarn 8:00 am:to ` ' _� ��#�1w�i�c�€sl� y�}.i�p,q� - ; � . � ili�t��s,Itt tie"�e iM �� `'� �;a�1��,1rMI�!i�►�� <� �. �, , - . , , • . , 9 .OLSt�N ,��ty CTerk: _ i F�aeembar i3:1� ' i , � a -_ ------ - - -___ � _ _ _ _ _. r _. _ , , . , �-i��y , � ��LED DISt ICt C�� ; c� �, �;; '�� Hea ing , c�T,f Dev lopment ��E - �r-�� Co pany �a a private,non-profit company December 11, 198 76 West ellogg Boulevard St. Paul, N 55102-1161 (612)297 8955 Albert B. Olson, City lerk City of St. Paul 3rd Floor, City all Saint Paul, MN 5102 Dear Mr. Olson: Pursuant to the ot Wa er District Heating Franchise and previ us notices filed Jul 18, 1986, September 19, 1986, and October 2 , 1986, District Heating Devel pment Company hereby files an Amendment to its October 24, 1986 end d Schedule A. The rates filed herewith will be used for all bills for hot water service beginning with the bi ling month of Decembe , 198 , and will remain in effect until super eded. All other aspects of t e previous filings remain in effect, in luding the Affidav�.t of Compli nce with Council Resolution 85-919. I order to supplement the cust er information on this reduction in th Demand Rate, we intend t pro ide mailed notice to DHDC customers of he scheduled D�:cembe 23, 1986, Public Hearing before the City Co ncil of the City of Saint Paul . The purpose of that Public Hearing is consideration of he De and Rate for final adoption as the 198 Demand Charge Rate. This action is pa t of he routine annual rate adjustment proc ss as envisioned by the Franc ise and the Hot Water Delivery Agreeme t. Based on extensiv coop ration, disclosure, discussion, and re iew with city represe tativ s, the Demand Charge is reduced to ref ect unanticipated int rest ate changes that are the result of une pected volatility in the finan ial markets. Please contact Ru y Bry olfson at 297-8955, or William Mahlum t 292-1661 if there are a y concerns. Very uly yours, � i Hans O. N an, Pr siden enclosure cc : Hon. Kiki So nen - Chair, Council Energy & Utilities Comm' ttee Tom Weyandt Offi e of City Attorney Karen Swenso - Ci y Council Research Jim Snyder, etty tchison - City Finance Department Rudy Brynolf on - HDC William M. M hlum Mahlum & Associates