Item 3: Ratification of MWMC Budget

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Metropolitan Wastewater Management Commission Budget and Program Summary 4.The Equipment Replacement Contribution is a budgeted transfer of operating revenues to “sinking funds” (reserves) for scheduled future replacement of major equipment, vehicles, and computers. See table on page 22 for year-end balance. 5.The Capital Reserve Contribution is a budgeted transfer of operating revenues to “sinking funds” (reserves). Capital is passed through the Springfield Administration Budget. See table on 24-end balance. 6.The Working Capital Reserve acts as a revolving account which is drawn down and replenished on a monthly basis to fund Eugene’s and Springfield’s cash flow needs. 7.The Rate Stability Reserve is used to accumulate revenues available at year-end after the budgeted Operating Reserve target is met. It is budgeted based on projected revenues and expenditures and is intended to lessen the size of needed rate increases over time. See Exhibit 7 on page 21 for year-end balance. 8.The Operating Reserve is used to account for the accumulated operating revenues net of operations expenditures. The Commission has adopted a policy of maintaining a minimum Operating Reserve balance approximately equal to 10% of the adopted Operating Budget. This targeted level of funding provides for contingency funds in the event unanticipated expenses or revenue shortfalls occur during the budget year. 9.The Debt Service line item is the sum of annual interest and principal payments on the Revenue Bonds and SRF loans made from the Operating Budget (derived from user rates). The total amount of debt service budgeted in FY 11-12 is $5,215,576, the balance of which is budgeted from SDCs. 10.The Rate Stabilization Reserve was established as a result of the 2006 MWMC Revenue Bond Declaration and Covenants. It holds funds that are available if needed, to ensure debt service payments can be made. 11.The SRF loan reserve is budgeted as required per loan agreements 12.The Revenue Bond Reserves are established to cover the 2006 bond ($4 million), the 2008 bond issue ($4.1 million). Page 11 DRAFT FY 11-12 BUDGET AND CIP