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Elk River <br />Municipal Utilities <br />13069 Orono Parkway <br />Elk River, MN 55330 <br />August 11, 2006 <br />To: Elk River Municipal Utilities commission <br />Jerry Takle <br />Jim Tralle <br />John Dietz <br />From: Theresa Slominski <br />Subject: Investment Committee Meeting proposals <br />phone: 763.441.2020 <br />Fax: 763.441.8099 <br />The Investment Committee (Bryan Adams, John Dietz, and myself) met on Monday, July <br />24t" at 4:00 pm and discussed a number of items that I would like to bring to the full <br />commission for approval. <br />First, the reserves that we have been accumulating are classified as Restricted Assets with <br />a further subdivision of Emergency Reserves and Construction Reserves as shown below <br />for the electric fund (using May balances for presentation.) <br />Restricted Assets <br />Emergency Reserves $445,900.00 <br />Construction Reserves $1,432,919.27 <br />Total Restricted Assets $1,878,819.27 <br />I propose that we change the subdivisions to Bond Reserves (the 10% bond covenant <br />amounts), Emergency Reserves of $1,000,000, and an Unrestricted Reserves of the <br />balance as shown below for the electric fund (using May balances for presentation.) <br />Restricted Assets <br />Bond Reserves $445,900.00 <br />Emergency Reserves $1,000,000.00 <br />Unrestricted Reserves $432,919.27 <br />Total Restricted Assets $1,878,819.27 <br />The reserves being listed as restricted assets impose limitations that those amounts cannot <br />be accessed except by specific commission approval. By classing some dollars as <br />unrestricted, it provides some flexibility for cash flow purposes in times of need (such as <br />