HomeMy WebLinkAboutResolution No. UB-15-14RESOLUTION NO. UB -15-14
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AZUSA,
CALIFORNIA, SETTING CERTAIN RESERVE POLICIES FOR THE
WATER UTILITY ENTERPRISE FUND
WHEREAS, in July 2008 the Utility Board established a Reserve Policy for the Water Fund;
and
WHEREAS, such Reserve Policy requires a periodic review and update of the reserve target
level; and
WHEREAS, staff has performed the required review of the reserve policy and believes that
the components in the formula can be modified to reflect current day conditions for the Water
Utility; and
WHEREAS, the proposed Water Utility reserve policy formula results in a minimum reserve
for the Water Fund of $19 million as documented in Exhibit A; and
WHEREAS; the estimated existing unrestricted cash reserve level is about $24 million,
which is above the recommended minimum reserve target; and
NOW, THEREFORE, THE AZUSA UTILITY BOARD OF THE CITY OF AZUSA
DOES HEREBY RESOLVE AS FOLLOWS:
SECTION 1. That Exhibit A is adopted as the reserve policy formula for the Water Fund.
SECTION 2. The City Clerk shall certify to the adoption of this Resolution.
PASSED, APPROVED and ADOPTED this 24`h day of November, 2014.
s /"
,osepomero Rocha
Board Member/Mayor
ATTEST:
J fr e Cornejo, Jr.
Secretary/City Clerk
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss.
CITY OF AZUSA )
I HEREBY CERTIFY that the foregoing Resolution No. UB -15-14 was duly adopted by the
Utility Board/City Council of the City of Azusa at a regular meeting of the Azusa Light & Water
Utility Board on the 24`h day of November, 2014.
AYES: BOARD/COUNCILMEMBERS: GONZALES, MACIAS, ALVAREZ, ROCHA
NOES: BOARD/COUNCILMEMBERS: NONE
ABSENT: BOARD/COUNCILMEMBERS: CARRILLO
r i 0 r-
i.,: ;i
EXHIBIT A
WATER UTILITY'S RESERVE POLICY
Minimum Cash Reserve Target
The following bases and percentages shall be used to formulate the Water Fund's minimum/target unrestricted
cash reserve:
Reserve Type
Recommended Policy
Operating Reserve
90 days / $4 million
Capital Reserve
$10 million
Contingency Reserve
$5 million
Total
$19 million
If at the end of any fiscal year, actual unrestricted cash shall be less than the target level above, Staff
shall review the established target level and make recommendations to the Utility Board to either
update the Reserve Policy target, revise water rates and/or reduce expenditures, as may be
appropriate.