Laserfiche WebLink
<br />Metropolitan Wastewater Management Commission <br /> <br />Reserves <br /> <br />REGIONAL WASTEWATER PROGRAM <br />RESERVES <br /> <br />The RWP maintains reserve funds for dedicated purpose to sustain stable rates while fully <br />funding operating and capital needs. Further details on the FY 06-07 reserves are provided <br />below. <br /> <br />OPERATING RESERVES <br /> <br />The MWMC Operating Budget includes five separate reserves: the working capital reserve, rate <br />stability reserve, two debt covenant reserves, and the operating reserve. Revenues are <br />appropriated across the reserves in accordance with Commission policy and expenditure needs. <br />Each reserve is explained in detail below. <br /> <br />WORKING CAPITAL RESERVE <br /> <br />The Working Capital Reserve acts as a revolving account that is drawn down and replenished on <br />a monthly basis to provide funds for payment of Springfield Administration and Eugene <br />Operations costs prior to the receipt of user fees from the Springfield Utility Board and Eugene <br />Water and Electric Board. The Administration Working Capital Reserve is $200,000, and the <br />Operations Working Capital Reserve is $500,000. <br /> <br />RATE STABILITY RESERVE <br /> <br />The Rate Stability Reserve was established to implement the Commission's objective of <br />maintaining stable rates. It is intended to hold revenues in excess of the current year's operating <br />and capital requirements, in order to avoid "rate spikes" in future years. <br /> <br />BOND RESERVE <br /> <br />The Bond Reserve is established in accordance with bond covenant requirements for revenue <br />bonds. In order to sell revenue bonds, sufficient reserves are created to provide assurances to <br />bond holders that adequate revenue coverage will be provided for future debt service payments. <br />Generally, the reserve amount is defmed as 10% of the bond proceeds, which is transferred to the <br />operating reserves from the capital fund. <br /> <br />STATE REVOLVING FUND RESERVE <br /> <br />The State Revolving Fund Reserve is established in accordance with SRF loan covenant <br />requirements. In order to secure an SRF loan, sufficient reserves are created to provide <br />assurances that adequate revenue coverage will be provided for future debt service payments. <br />Similar to the Bond Reserve, the reserve amount is defmed as 10% of the loan proceeds and is <br />transferred to the operating reserves from the capital fund. <br /> <br />Page 37 PROPOSED FY 06-07 BUDGET AND eIP <br />