Laserfiche WebLink
Elk River �. <br /> Municipal Utilities <br /> 13069 Orono Parkway <br /> P.O.Box 430 <br /> Elk River,MN 55330 <br /> (763) 441-2020 <br /> UTILITIES COMMISSION MEETING <br /> TO: FROM: <br /> Elk River Municipal Utilities Commission Theresa Slominski—Finance Director <br /> John Dietz <br /> Daryl Thompson <br /> Allan Nadeau <br /> MEETING DATE: AGENDA ITEM NUMBER: <br /> June 6, 2012 5.1 Review Reserves Balances and Policy <br /> SUBJECT: <br /> Annual review of reserves balances <br /> BACKGROUND: <br /> Per our Reserves Policy, annually after the audit the year-end reserve balances shall be reviewed <br /> and the Utilities Commission shall consider any balances above or below target levels. <br /> DISCUSSION: <br /> At the conclusion of our audit, a review of the cash balances of$11,724,470, with $9,104,896 for <br /> Electric and $2,619,574 for Water, determines that our current reserves balances are at target <br /> levels. The three Reserve Classifications and respective calculated amounts for the Electric <br /> Department are Unrestricted Designated Reserves, $5,407,463; Reserve Restricted for Debt <br /> Service, $724,500; and Unrestricted Reserves, $2,972,933. The Reserve Classifications and <br /> respective calculated amounts for the Water Department are Unrestricted Designated Reserves, <br /> $1,121,283; Reserve Restricted for Debt Service, $0; and Unrestricted Reserves, $1,498,292. <br /> The current reserves policy is attached which defines the various classifications and specifies the <br /> target calculations. A graph for each department showing the target reserves and the actual <br /> projected cash balances is also attached. The Unrestricted Reserves have a defaulting <br /> designation as working capital, per the policy. As part of the review process the Unrestricted <br /> Reserve balances shall be considered by the Commission for optimal uses. (This would be the <br /> $2,972,933 for the electric department and the $1,498,292 for the water department.) Per <br /> discussion last year, the electric department was to use $1,000,000 of these reserves to offset <br /> Power Cost Adjustments (PCAs) that were anticipated to be passed along from our power <br /> Rp, „, rrWERED Si NATURE <br /> Reliable Public <br /> Power Provider FoWEnen to SERVE <br />