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HomeMy WebLinkAbout12, Workshop Discussion of Cash Reserve Goals WORKSHOP ITEM #12Cash Reserve GoalsCash Reserve Goals January 16, 2019 Cash Reserve Goals both the Water and Electric Utilitieson the District’s cash reserve goals for This workshop item focuses •Reserve goals•Debt goals•Revenue goals•Planning goals•Code Title 3.01 District The Board establishes the financial goals for the District in •stabilityreduce rate increases while maintaining financial and operational Strategic cash reserve policies can help utilities mitigate risk and •Cash Reserve Goals Cash Reserve Goals Capital reserve fund of at least $1,000,000•Electric rate reserve of $3,000,000•Six months operating expenditures•Current Electric Utility cash reserve goals•Revolving capital reserve fund in the amount of $4,000,000•Two months operating expenditures•Current Water Utility cash reserve goals•Cash Reserve Goals Cash Reserve Goals The Board approved the following goals:•end budget review-meeting during the 2017 yearCash reserve goals were last reviewed at the March 7, 2018 Board •Cash Reserve Goals NEW INFORMATION Rising regulatory costs•Inflation•More capital projects•Increased cash reserve needs driven by•Include vehicle reserve•Exclude extraordinary projects•Established for annual investment in infrastructure•Capital Reserves•projectsto fund capital Utilities Electric and Water reserves are needed for both the Capital cash •Cash Reserve GoalsCash Reserve Goals NEW INFORMATION Natural disasters •Weather events•Unexpected operating results•ncreased compliance costsI•Reductions in demand ••term financial variability-Address short•risk operational Manage •Utilities to:for both the Water and Electric reserves are needed Operating cash •Cash Reserve GoalsCash Reserve Goals NEW INFORMATION One year capital replacementOne year capital replacementFundCapitaltbd annuallyannuallytbdDeferred LiabilitySix months cost of powern/aRate StabilizationSix Months Operating BudgetBudgetGeneral FundElectricWaterFundReserve with current operating and capital costsUpdate District Code to allow reserve adjustments commensurate •Cash Reserve Recommendations•Cash Reserve GoalsCash Reserve Goals NEW INFORMATION Cash Reserve Recommendations•Cash Reserve GoalsCash Reserve Goals FISCAL IMPACT There is no fiscal impact associated with this workshop item•Cash Reserve GoalsCash Reserve Goals RECOMMENDATION Provide input and feedback to staff•RecommendationRecommendation NEW INFORMATION Cash Reserve Balances at November 30, 2018•Cash Reserve GoalsCash Reserve Goals