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HomeMy WebLinkAbout9, Consent Cash Reserves Title 3 Amendment ACTION ITEM #9 Title 3, Finance and AccountingAdopting Changes to District Code 02 -Consideration of Resolution 2019Title 3, Finance and AccountingAdopting Changes to District Code 02 -Consideration of Resolution 2019 March 6, 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 $1M•Electric rate reserve of $3M•Six months operating expenditures•Current Electric Utility cash reserve goals totaling $15M include•Revolving capital reserve fund in the amount of $4M•Two months operating expenditures•Current Water Utility cash reserve goals totaling $7M include•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 changes-Address short•risk operational Manage •Utilities toElectric for both the Water and needed changes are reserves 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 operational costs and inflationadjustments, as approved by the Board, to reflect changes in Updating cash reserve goals in District Code allows reserve •Cash Reserve GoalsCash Reserve Goals RECOMMENDATION and Accounting02, amending District Code, Title 3, Finance -Adopt Resolution 2019•RecommendationRecommendation