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Metropolitan Wastewater Management Commission Reserves
<br />major rehabilitation. They are funded by annual contributions from user rates, SDCs, bond
<br />proceeds, and the SRF Loan. Each reserve is explained in detail below.
<br />EQUIPMENT REPLACEMENT RESERVE
<br />The Equipment Replacement Reserve accumulates replacement funding for three types of
<br />equipment: 1) major/stationary equipment items costing less than $200,000 with useful lives of
<br />20 years or less; 2) fleet vehicles maintained by the Eugene Wastewater Division; and 3)
<br />computers that serve the Eugene Wastewater Division. Contributions to the Equipment
<br />Replacement Reserve in the FY 07-08 budget total $696,823. Additional budget detail is
<br />provided below.
<br />
<br />
<br />EQUIPMENT REPLACEMENT RESERVE ADOPTED
<br />BUDGET
<br />FY 06-07 AMENDED
<br />BUDGET
<br />FY 06-07 ADOPTED
<br />BUDGET
<br />FY 07-08
<br />Beginning Balance 5,842,835 4,493,315 5,130,191
<br />Annual Equipment Contribution 365,199 365,199 .436,536
<br />Annual Vehicle Contribution 209,549 209,549 242,034
<br />Annual Computer Contribution 28,329 28,329 18,253
<br />Interest 269,679 269,679 230,000
<br />Fund F,quip Repl in Projects (1,512,000) 0 0
<br />Equipment Purchases (310,335) (468,385) (486,534)
<br />Reserve 4,893,256 4,897,686 5,570,480
<br />SYSTEM DEVELOPMENT CHARGE (SDC) RESERVES
<br />SDCs are required as part of the MWMC IGA. They are connection fees charged to new users to
<br />recover costs associated with construction of plant capacity, and are limited to funding Capital
<br />Programs. The purpose of the SDC Reserves are to collect and account for SDC revenues
<br />separately from other revenue sources, in accordance with statutory requirements. The
<br />Commission's SDC structure includes a combination of "Reimbursement" and "Improvement"
<br />fee components. Estimated SDC revenues for FY 07-08 total $1,770,000. Budgeted
<br />expenditures include $1,234,029 from Reimbursement Fees and $1,234,030 from Improvement
<br />Fees to furid portions of the annual debt service payments on the 2006 revenue bonds. The
<br />projected beginning SDC Reserve balance on July 1, 2007 is $10,817,757. During FY 04-OS
<br />several law suits were filed challenging the MWMC SDC methodology and charges. Taking into
<br />account the uncertainties that arise with these challenges, MWMC created an SDC Contingency
<br />Reserve to hedge potential loss of part or all of the SDC revenue collected from FY 04-05
<br />through FY 07-08. The SDC Contingency Reserve is continued in FY 07-08. Additional budget
<br />detail is provided on the following page.
<br />Page 21 FY 07-08 BUDGET AND CIP
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