Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Working Capital Reserve topic
No spam. Unsubscribe anytime.
Finance Committee discusses using investment earnings to build working capital reserve
Summary
Staff proposed using investment earnings to fund a working capital reserve equal to three months of budgeted regional CBTA funds; PFM projected the remaining shortfall could be filled in about 15–16 months using earnings and staff will track the reserve separately until fully funded.
Finance staff presented a draft working capital reserve lending strategy and PFM recommended directing investment earnings toward fully funding the reserve.
PFM advisor Christy Choi said the target reserve equals three months of budgeted regional CBTA funds — currently estimated at about $18,000,000 — and that the Authority has seeded roughly $5,000,000, leaving an approximate shortfall of $13,000,000. Choi recommended that the Authority consider using 100% of the investment earnings from regional funds to close the gap and estimated it would take about 15–16 months to achieve the target under that approach.
Staff and members discussed alternatives, including reserving some earnings for projects and the possibility of fine‑tuning a formal policy after PB Meyers (legal counsel) reviews compliance. Members requested that staff show the reserve separately on the general ledger so the balance is visible at any time.
Next steps: staff will consult PB Meyers on legal compliance, refine the draft into a full policy for the Authority to consider, and track the reserve separately in the ledger while earnings accumulate.
