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Committee recommends board adopt rate‑stabilization reserve policy after staff presentation; public urged stronger board vote and replenishment plan
Summary
The FRMC recommended board adoption of a rate‑stabilization reserve policy that would permit deferring surplus revenue under GASB guidance to smooth rates; the policy authorizes up to the equivalent of 45 days cash on hand (~$125M) and sets triggers requiring CEO recommendation and board approval for recognition in rate setting. Public commenters urged a required majority board vote and explicit replenishment plan.
The Finance & Risk Management Committee on March 19 recommended that the full board adopt a rate‑stabilization reserve policy designed to smooth year‑to‑year rate volatility and support financial covenants.
Senior Strategic Finance Manager and Interim Treasurer Jeb Spangler and Rates & Strategy Manager Aaron Lou presented the policy, which staff said aligns with the agency’s recently revised financial reserves policy and with common practice among other community choice aggregators. Staff described the policy as an accounting and rate‑management tool that permits deferring surplus revenue under applicable accounting guidance (GASB‑referenced treatment) in stronger years and recognizing it in weaker years to mitigate rate…
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