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Metropolitan Wastewater Management Commission Budget and Program Summary <br />5.The Capital Reserve Contribution is a budgeted transfer of operating revenues to reserves. Capital <br />is passed through the Springfield Administration Budget. See table on page 22 for year-end <br />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 19-20 is $4,947,783 a <br />portion of which is funded by System Development Charges (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 to cover the insurance deductible <br />amount for property and liability insurance coverage, for losses per occurrence. The Insurance <br />Reserve is set at $1.5 million. <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 two months operating expenses of the <br />adopted Operating Budget. The Operating Reserve provides for contingency funds in the event <br />that unanticipated expenses or revenue shortfalls occur during the budget year. <br />11.The Rate Stabilization Reserve contains funds to be used at any point in the future when net <br />revenues are insufficient to meet the bond covenant coverage requirements. The Commission <br />shall maintain the Rate Stabilization Reserve account as long as bonds are outstanding. This <br />reserve is set at $2 million. <br />12.The Clean Water SRF loan reserve is budgeted as required per loan agreements. <br />Page 13 FY 19-20 BUDGET AND CIP <br />- ¸ ΐΒǾ ΑΏΐΘǾ 7®±ª 3¤²²¨®­ ȟ )³¤¬ Β# <br /> <br />