Council receives utilities financial report; reserves expected to take years to rebuild

Jennifer Knapp, the city's finance director, presented the Department of Utilities' quarterly financial report and told the council the department is "in good financial shape" but is seeing higher costs due to inflation and increased gas use while Unit 8 is offline. Knapp said the city aims for about eight months of reserves per fund; after recent drawdowns and a one-and-a-half month recovery last year, she estimated it will take roughly four to five years to return to that eight-month target under current projections.

Knapp described methods used to estimate fuel inventory on the coal pile: compression/density checks, comparison with received-coal scales, and reconciliation with burned-tonnage measurements. She and plant staff said none of the measurement methods match perfectly but that multiple checks provide reasonable cross-validation for tonnage estimates.

Staff also highlighted upcoming capital needs that will consume reserves, including a planned horizontal well project and possible bond issuance to support large water and electric investments. Knapp reiterated that audited financial statements will be completed after the end of March and noted S&P reaffirmed the city's rating at the last bond reissue.

During questioning, council members asked about the density testing process and the timeline to rebuild reserves; staff explained the testing methodology and repeated the multi-year reserve-rebuild estimate. Council moved and seconded a motion to receive the utilities financial report.