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<br /> <br /> <br />Page 1 of 1 <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br />UTILITIES COMMISSION MEETING <br /> <br />TO: <br />Elk River Municipal Utilities Commission <br />John Dietz – Chair <br />Al Nadeau – Vice Chair <br />Daryl Thompson – Trustee <br />FROM: <br />Theresa Slominski – Finance and Office Manager <br /> <br />MEETING DATE: <br />July 2, 2013 <br />AGENDA ITEM NUMBER: <br />2.4 <br />SUBJECT: <br />2012 Year-End Reserve Balances <br /> <br />BACKGROUND: <br />Per our Reserves Policy, annually after the audit, the year-end reserve balances shall be reviewed and the <br />Utilities Commission shall consider any balances above or below target levels. <br /> <br />DISCUSSION: <br />At the June Commission Meeting, the following amounts were presented with the conclusion of our audit: <br />a review of the cash balances of $14,625,194, with $11,370,664 for Electric and $3,254,530 for Water, <br />determined that our current reserves balances are at target levels. The three Reserve Classifications and <br />respective calculated amounts for the Electric Department are Unrestricted Designated Reserves, <br />$5,793,402; Reserve Restricted for Debt Service, $724,500; and Unrestricted Reserves, $4,852,762. The <br />Reserve Classifications and respective calculated amounts for the Water Department are Unrestricted <br />Designated Reserves, $1,248,571; Reserve Restricted for Debt Service, $0; and Unrestricted Reserves, <br />$2,005,959. <br /> <br />Per the policy, the Unrestricted Reserves default as working capital. At the June Commission Meeting, <br />discussion determined the allocation of the Unrestricted Reserves and it was requested to bring back the <br />reserve calculations with narrative documenting the decisions. Documentation has been added outlining <br />the use of $1,000,000 in the electric department and $700,000 in the water department per 2013 budget <br />approval for infrastructure projects. Also documented is the electric department’s use of up to $500,000 <br />for PCA offset, with the remainder for future territory acquisition and power contract funding; and the <br />water department’s use for future infrastructure projects scheduled over the next five years. <br /> <br />ACTION REQUESTED: <br />Approval of calculations, with narrative, as attached. <br /> <br />ATTACHMENTS: <br /> Reserve Balance Calculations for the Electric and Water Departments, with narrative, <br />documenting June’s decisions. <br />38