Item 3: Ratification of MWMC Budget

Home Browse Search

Metropolitan Wastewater Management Commission Reserves Wastewater Division. Contributions to the Equipment Replacement Reserve in the FY 11-12 budget total $782,564, additional budget details are provided below. The Equipment Replacement Reserve is intended to accumulate funds necessary to provide for the timely replacement or rehabilitation of equipment, and may also be borrowed against to provide short-term financing of capital improvements. An annual analysis is performed on the Equipment Replacement Reserve. The annual contribution is set so that all projected replacements will be funded over a 20-year period and at the end of the 20-year period, the reserve will contain replacement funds for all equipment projected to be in use at that time. Estimates used in the analysis include interest earnings, inflation rates and useful lives for the equipment. SYSTEM DEVELOPMENT CHARGE (SDC) RESERVES SDCs are required as part of the MWMC IGA. They are connection fees charged to new users to recover the costs related to system capacity, and are limited to funding Capital Programs. The purpose of the SDC Reserves is to collect and account for SDC revenues separately from other revenue sources, in accordance with Oregon statutes. The Commission’s SDC structure includes a combination of “Reimbursement” and “Improvement” fee components. Estimated SDC revenues for FY 11-12 are approximately $589,821. Budgeted expenditures include $2,000,000from Improvement Fees to fund portions of the annual debt service payments on the 2006 and 2008 revenue bonds. The projected beginning SDC Reserve balance on July 1, 2011 is $2,505,183. Page 22 DRAFT FY 11-12 BUDGET AND CIP