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Metropolitan Wastewater Management Commission Budget and Program Summary <br />4.The Equipment Replacement Contribution is a budgeted transfer of operating revenues to <br />“sinking funds” (reserves) for scheduled future replacement of major equipment, vehicles, and <br />computers. See table on page 21 for year-end balance. <br />5.The Capital Reserve Contribution is a budgeted transfer of operating revenues to “sinking funds” <br />(reserves). Capital is passed through the Springfield Administration Budget. See table on page 22 <br />for year-end balance. <br />6.The Debt Service line item is the sum of annual interest and principal payments on the Revenue <br />Bonds and Clean Water State Revolving Fund (SRF) loans made from the Operating Budget <br />(derived from user rates). The total amount of Debt Service budgeted in FY 17-18 is $5,458,032 <br />the balance of which is budgeted from SDCs. <br />7.The Working Capital Reserve acts as a revolving account which is drawn down and replenished <br />on a monthly basis to fund Eugene’s and Springfield’s cash flow needs. <br />8.The Rate Stability Reserve is used to set aside revenues available at year-end after the budgeted <br />Operating Reserve target is met. Internal policy has established a level of $2 million for the Rate <br />Stability Reserve. See Exhibit 5 on page 20 for year-end balance. <br />9.The Insurance Reserve was established to set aside funds equivalent to the insurance deductible <br />amount for property and liability insurance coverage, for losses per occurrence. <br />10.The Operating Reserve is used to account for the accumulated operating revenues net of <br />operations expenditures. The Commission’s adopted policy provides minimum guidelines to <br />establish the Operating Reserve balance at approximately 10% of the adopted Operating Budget. <br />The Operating Reserve provides for contingency funds in the event that unanticipated expenses or <br />revenue shortfalls occur during the budget year. <br />11.The Rate Stabilization Reserve was established at $2 million as a result of the 2006 MWMC <br />Revenue Bond Declaration and Covenants. It holds funds that are available if needed, to ensure <br />Debt Service payments can be made. <br />12.The Clean Water SRF loan reserve is budgeted as required per loan agreements. <br />Page 13 FY 17-18 BUDGET AND CIP <br /> <br />