Item A-MWMC Facilities Plan - Laserfiche WebLink

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8. FINANCIAL STRATEGY 6. MWMC funds are dedicated for the exclusive benefit of the RWP including operating expenses, debt service payments, and the associated capital program. Capital Planning and Financing - Capital planning and financing policies direct that necessary future capital improvements be identified together with the financial resources needed to complete them. These policies also direct that major capital costs be spread over time to stabilize user rates and to provide equity among current and future ratepayers for long-lived capital improvements. 1. The Commission shall maintain a capital planning and financing system for use in preparing a multi-year capital improvement project (CIP) list for consideration and adoption by MWMC and ratification by the partner agencies' governing bodies as a part of the Commission's budget process. 2. The Commission shall establish and maintain a list of approved finance mechanisms. 3. The Commission shall utilize debt service professionals and Government Finance Officers Association (GFOA) guidance to structure bond covenants. 4. Commission debt should be structured to match the expected useful life of the assets to be funded, but in no case exceed 20 years. 5. Long-term bonding shall be structured to maximize its cost effectiveness. 6. Before seeking to incur new debt, all available grant programs shall be evaluated for their potential to offset targeted program costs. 7. Consideration shall be given to the overall level of debt financing that can be sustained over the long-term given the size of the future capital programs, potential impacts on credit ratings, and other relevant factors such as intergenerational rate equity, overlapping debt, and the types of projects appropriately financed with long-term debt. 8. Consideration shall be given to competing demands for use of the community's overall debt financing capacity. 9. Capital reserves and system development charge (SDC) reserves on hand shall generally be used for projects with a total cost of under $1 million. These reserves shall also be used in the early stages of a multi-year project so that bond issuance can be delayed and aggregated. 10. The Commission shall annually target 2 percent of the RWP asset value for capital reinvestment. This includes the amounts to be budgeted for major rehabilitation and equipment replacement. 11. The maximum bonded debt burden shall be determined by comparing the debt service to the user rate. Budgeted debt service shall not exceed 25 percent of budgeted user rate revenue Sewer User Rates and System Development Charges - User rate and SDC policies are intended to guide the Commission in establishing annual rate structures and approving RWP capital improvement and operating budgets. NtWMC_8.0_REVS.DOC 8-3