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Glendale utility reports strong cash reserves, flags future water rate work
Summary
Finance staff told the commission that electric and water reserves exceeded policy targets at fiscal‑year end and that a water cost‑of‑service analysis will be completed to address an anticipated reserve shortfall by FY25‑26.
Glendale Water and Power staff reported January 22 that both electric and water funds ended fiscal 2023–24 with cash reserves well above policy targets, but managers said they have planned analyses and rate work to address future capital needs.
Why it matters: commissioners pressed staff to explain how high reserves, upcoming rate increases and capital projects interact so the public understands why rates may rise even as reserves appear large.
Adriana Essayen, assistant general manager for Utility Finance and Risk Management, presented the fiscal summary. She said the utility’s electric reserves stood at "about $328,000,000" at the end of FY23‑24 against a reserve policy target of $124,100,000, and water cash reserves were about $46,400,000 against a policy requirement of $11,300,000. Essayen said the electric reserves include bond proceeds for big capital projects and that cash-on-hand figures reflect timing of those capital outlays.
Staff noted that some reserves are earmarked for ongoing projects (including the Grayson repowering and Shoal Canyon biogas project) and bond tranches, and that the water fund is expected to fall below the reserve policy in FY25‑26 without rate adjustments. Essayen said a water cost‑of‑service analysis (COSA) and water master plan are underway to determine rates that support the capital improvement program.
Commissioners asked whether unspent appropriations roll into the utility funds; Essayen answered that funds remain in the respective enterprise utilities and are invested by the city treasurer. Commissioners also discussed optics: one commissioner said the city should clearly communicate that higher reserves reflect planned multi‑year capital programs rather than uncommitted surplus.
Ending: Staff agreed to provide follow-up material showing projected capital draws, the planned COSA timeline and clearer charts tying reserve levels to expected project spending.
