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HomeMy WebLinkAbout14a,Financial Goals,District CodeCHAPTER 3.01 FINANCIAL GOALS Section: 3.01.01 Financial Goals 3.01.01.1 The following goals are established to promote and maintain the financial strength of the District: 3.01.01.01 Planning Goals • Review Water and Electric Master Plans at least every five years • Review ten-year Finance Master Plan each year • Prepare two-year operating budget with semi-annual reviews • Prepare ten-year Capital Improvement Plan; update annually • Review rate structure and levels every two years • Review Financial Goals every year 3.01.01.02 Revenue Goals • Set operating revenues to capture entire cost to provide service plus build and maintain reserves and satisfy debt coverage ratios • Review connection charges every two years and set them to recover all costs • Review facilities fees every budget cycle and after the completion of a master plan 3.01.01.03 Debt Goals • Separate debt that is serving development (facilities fees), debt serving current customers (rates), debt serving a special assessment district (assessments) and debt financed by billing surcharges. These categories of debt should be separately identified in the budget. • One-half the debt service for all long-term debt in the aggregate is due in the first ten years • No more than one half the projected annual facilities fee revenue committed to debt service • No more than twenty-five percent of general fund revenues committed to debt service • No debt more than 25 year maturity • No debt longer than useful life of the project 3.01.01.04 Cash Reserve Goals - Operations • Water general fund should have a cash reserve equal to twice the highest month budgeted expenditure (this will probably be the month in which principal and interest on debt is due) • Electric general fund should have a cash reserve equal to one half of the annual budgeted operating expenses, excluding depreciation • Electric rate stabilization fund (aka Electric Rate Reserve) should maintain a balance of $3,000,000 3.01.01.05 Capital Reserve Goals • There should be a revolving water capital reserve fund in the amount of $4,000,000 to permit projects to be initiated and funded prior to arrangement of long-term debt or other financing. • There should be an electric capital reserve fund in the amount of $1,000,000 minimum. 3.01.01.06 Debt Reserve Goals • There should be a reserve fund for each debt instrument in an amount required by each lender. • A reserve fund should be established and maintained to pay for vehicle and equipment purchases as needed. Long term financing should be used when necessary and the life of the asset purchased is greater than 15 years.