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HomeMy WebLinkAbout14 WS Review Financial Goals,Reserves,debtAgenda Item # 14 WORKSHOP To: Board of Directors From: Robert Mescher Date: August 03, 2011 Subject: Review of District Financial Goals, Reserves and Debt 1. WHY THIS MATTER IS BEFORE THE BOARD This is an annual review with the Board of the status of its Financial Goals as outlined in Title 3.01.01.1 of the District Code. 2. HISTORY In 2004, the Board adopted a set of Financial Goals. The status of the Financial Goals was last reviewed with the Board on February 17, 2010. The Board has directed that these Financial Goals be reviewed each year. 3. NEW INFORMATION Attachment 1 lists all of the District Financial Goals and whether the goal was achieved or not. All of the District Financial Goals have been achieved with the exception of the following: Planning Goals The goal of reviewing the Water Master plan every five years was not achieved. The last review and update was in 2004. A Water Master Plan review and update is planned for early 2012. The goal of annually reviewing the Financial Master Plan was not achieved. It was last reviewed in 2009 with the FY10-FY11 Budget. Staff recommends that the Board consider modifying the goal to review the Financial Master Plan every two years with the two-year budget process. The goal of annually reviewing the Water Capital Improvement Plan was not achieved. The Urban Water Management Plan was delayed by the State, further delaying the Water Capital Improvement Plan. The Water Capital Improvement Plan is projected to be ready for review in early 2012. Staff also recommends that the Board consider modifying the goal to review the Capital Improvement Plans every two years with the two-year budget process. Debt Goals The goal of committing to debt service no more than one half of the projected annual Water facilities fees was not achieved. The Water facilities fees have declined and are less than the committed facilities fees. The goal of ensuring that no debt matures later than 25 years will be achieved next year as the Water 2006 COP matures in 2036. Cash Reserve Goals The goals of retaining an Electric cash reserve of twice the highest month's budgeted expenditure and an Electric Rate Stabilization Fund of $3,000,000 were not achieved. With the maturity of the 2013 COP debt, these goals are projected to be achieved in 2014. Capital Reserve Goals The goal of reserving $4,000,000 for Water capital replacement was achieved in 2010, but the reserve has been utilized for specific projects as approved by the Board. Rates continue to fund this reserve and the goal is projected to be achieved by 2014. The goal of reserving $1,000,000 for Electric capital replacement was not achieved. With the maturity of the 2013 COP debt, this goal is projected to be achieved in 2014. 4. FISCAL IMPACT There is no direct fiscal impact associated with this item. 5. RECOMMENDATION Review this report and provide comment. Robert Mescher Acting Administrative Services Manager Michael D. 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