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Metropolitan Wastewater Management Commission Reserves <br />REGIONAL WASTEWATER PROGRAM <br />RESERVES <br />The Regional Wastewater Program maintains reserve funds for dedicated purposes. Generally, <br />reserves provide a buffer against substantial fluctuations in revenues and expenditures, resulting <br />in the ability to maintain stable rates while fully funding operating. and capital needs. The <br />Commission has established a financial policy to maintain operating reserves at approximately <br />10% of the operating budget. Capital reserves provide for legal accounting of various funding <br />sources and the ability to cover major one-time expenditures and maintain stable rates. The FY <br />03=04 budget includes both contributions to and expenditures from the dedicated Capital and <br />Equipment Replacement Reserve. Further detail on the proposed FY 03-04 reserves is provided <br />below. <br />WORKING CAPITAL RESERVE <br />The Working Capital Reserve provides funds for Springfield Administration and Eugene <br />Operations costs paid prior to the receipt of user fees from Springfield Utility Board and Eugene <br />Water and Electric Board. These reserves act as revolving accounts which are drawn down and <br />replenished on a monthly basis. Eugene's Working Capital Reserve is $500,000, and <br />Springfield's Working Capital Reserve is $200,000. <br />CAPITAL RESERVES <br />The Capital Reserves accumulate funds. to cover CIl' and Major Rehabilitation Program costs so <br />that rate impacts can be minimized. These capital programs are tracked separately because the <br />CIP is administered by Springfield and the Major Rehabilitation Program is administered by <br />Eugene. The FY 03-04 proposed budget includes a contribution from the Operating Reserve of <br />$750,000 to maintain this reserve and to cover costs related to the five-year CIP and Major <br />Rehabilitation Programs. Interest earnings estimated at $200,830 will be credited to this account <br />and the ending balance on June 30, 2004 is proposed at $5,804,440. Additional budget detail on <br />the CIP and Major Rehabilitation Program reserves is provided below. <br />CIP RESERVE <br />Beginning Balance <br />Transfer From Operating Reserve <br />Transfer From CSD <br />Interest <br />Funding For Major Rehab <br />Funding For CIl' <br />Adopted Amended Adopted <br />Budget Budget Budget <br />FY 02-03 FY 02-03 FY 03-04 <br />$7,390,773 $8,621,180 $9,403,610 <br />1,869,671 1,869,671 750,000 <br />0 0 142,000 <br />134,746 134,746 200,830 <br />(495,338) (642,195) (182,000) <br />756 <br />Page 30 FY 03-04 BUDGET <br />