2005 MWMC Financial Plan - Laserfiche WebLink

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FINANCIAL MANAGEMENT POLICIES Introduction The following policies are intended as guidance for the financial administration of the RWP. These policies address all areas of the Government Finance Officer's Association (GFOA) Recommended Financial Policies. When circumstances warrant, the Commission may waive one or more provisions as necessary. Such waivers shall not be considered a violation of the MWMC Financial Plan. MWMC Financial Policies are grouped into the following categories: • Financial Forecasting and Budgeting, • Investment of Liquid Assets, • Capital Planning and Financing, • Sewer User Rates and SDC's, and • Asset Management. Financial Forecasting and Budgeting Financial forecasts and budget policies are intended to guide the Commission in prudent fmancial forecasting and budget planning, and are included to ensure the financial security and bonding capacity of the RWP, as well as meeting minimum legal budget requirements. This set of policies also addresses the Commission's legal and contractual commitments regarding the use of sewer revenues to pay for sewer expenses. Policy Fl The purpose of the RWP is to protect public health and safety and the environment by providing high quality wastewater management services to the Eugene/Springfield metropolitan area. The MWMC and the regional partners are committed to providing these services in a manner that is effective, efficient, and meets customer service expectations. In order to achieve its purpose, the Commission shall establish and maintain key outcomes upon which RWP work plans and budgets will be focused. Discussion -Indicators of performance and targets shall be identified for each key outcome. Performance relative to identified targets shall be tracked over time, in order to determine whether the desired results have been achieved. Policy F2 The Commission shall maintain annual budgets that balance operating expenses and transfers with user fees and other current operating revenue. Discussion -Long-term fmancial stability can only be assured if each year's budget is fully funded and balanced. The budget is considered balanced when: • Expected annual operating revenues meet anticipated operation and maintenance expenses, • Budgeted capital outlays are funded in full from a combination of operating revenues, capital reserves, accumulated SDCs, and debt proceeds, • Annual operating statements show a positive net income on a budgetary basis; and • The debt service coverage ratio is at or above that required by any applicable bond covenants. 2005 MWMC Financial Plan Page 11