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Board previewed reserve targets; water acquisition reserve to rise to $3 million
Summary
Staff recommended annual reserve targets for general, water and sewer funds, including increasing the water system acquisition reserve from $1,000,000 to $2,000,000 this year and $3,000,000 next year and leaving $4,000,000 of general-fund balance as unrestricted cash. Staff said changes will be presented as action items at the next board meeting.
Bridal Bobak briefed the board on three related reserve items that will be presented for approval at the next board meeting. She outlined six reserve categories (operating reserves; fleet and equipment; infrastructure capital replacement; water system acquisition and infrastructure-improvement property-tax reserve; priority project capital reserve; and debt-service reserve) and said targets are defined in the related memos and exhibits. "We're increasing that balance from, 1,000,000 to 2,000,000 and then to 3,000,000 next year to get up to the recommended amount that we wanted to have reserved, for acquiring, potential water systems," Bobak said.
Board members asked how the district would choose between using reserves and borrowing for major capital needs. Staff said they would recommend a resolution to amend reserve allocations if the board opts to use reserve funds and that long-term financing options would also be considered. Staff reiterated that reserve targets account for planned capital spending and are based on long-term financial planning.
