Item A-MWMC Facilities Plan - Laserfiche WebLink

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MWMC FACILITIES PLAN · Capital Planning and Financing · Sewer User Rates and System Development Charges · Asset Management Financial Forecasting and Budgeting - Financial forecasts and budget policies are intended to guide the Commission in prudent financial forecasting and budget planning, and are included to ensure the financial security and bonding capacity of the Regional Wastewater Program (RWP), as well as meeting minimum legal budget requirements. This set of policies also addresses the Commission's legal and contractual commitments regarding the use of sewer revenues to pay for sewer expenses. 1. The purpose of the RWP is to protect public health and safety and the environment by providing high-quality wastewater management services to the Eugene/Springfield metropolitan area. The MWMC and the regional partners are committed to providing these services in a manner that is effective, efficient, and meets customer service expectations. In order to achieve its purpose, the Commission shall establish and maintain key outcomes upon which RWP work plans and budgets will be focused. 2. The Commission shall maintain annual budgets that balance operating expenses with user fees and other current operating revenue. 3. The Commission will monitor revenues and expenditures, and maintain a balanced budget through an appropriate combination of cost-saving measures, budget transfers, supplemental budgets and/or user rate adjustments as needed. 4. The Commission shall maintain a multi-year financial forecast and cash-flow projection, which estimates service levels, operating expenses, capital needs, reserves, and debt service. 5. The Commission shall establish and maintain prudent minimum cash reserves, including but not limited to: Working Capital Reserve, Operating Reserve, Capital Reserve, Equipment Replacement Reserve, and Rate Stability Reserve. a. The Working Capital Reserve shall be sufficient to fulfill operating and capital cash flow needs. b. The Operating Reserve shall be maintained to minimize the impact of unanticipated revenue shortfalls. c. The Capital Reserve shall accumulate revenue to provide for future projects. The Capital Reserve shall be funded by annual contributions from user rates. A portion of the Capital Reserve shall be kept on hand and designated for contingency needs. d. The Equipment Replacement Reserve shall provide for the timely replacement or rehabilitation of equipment and may also be borrowed against to provide short-term financing of capital improvements. e. A Rate Stability Reserve shall be maintained as necessary to protect ratepayers from volatility in user rates and to enhance credit-worthiness. 8-2 MWMC_8.0_REV5.DOC