HomeMy WebLinkAbout1979-021-02/20/1979-ESTABLISHING RESERVE POLICIES FOR RETAINED EARNINGS FOR THE WATER AND SEWER UTILITY FUNDS OF THE CIT RESOLUTION NO 79-11
OF THE COUNCIL OF THE CITY
OF FORT COLLINS ESTABLISHING
RESERVE POLICIES FOR RETAINED
EARNINGS FOR THE WATER AND
SEWER UTILITY FUNDS OF THE CITY
WHEREAS, the City does not have an established policy for retained
earnings of the Water and Sewer Utility Funds, and
WHEREAS, such a policy is necessary in order to keep adequate financial
records, and
WHEREAS, such a policy is further necessary to satisfy charter and
code provisions relating to segregation of debt-service, operating costs
and future capital improvements
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT
COLLINS that the policy for retained earnings of the Water and Sewer Utility
Funds shall be as follows
Section 1. Debt-Service Reserve A debt-service reserve for each
fund shall be provided in an amount equal to one-half (112) of the average
annual debt-service of the fund
Section 2. Operating Reserve An operating reserve for each fund
shall be provide in an amount equal to eight percent (8%) of budgeted
operating expenditures for the fund
Section 3 Capital Improvements Reserve A future capital improve-
ments reserve for each fund shall be provided in an amount which shall, as
nearly as possible, equal the average annual cost (excluding debt finan-
cing) of the approved five-year capital improvement plan for the fund,
considering any changes which may from time to time be made in the plan
Section 4. Invested-in-Unlit -Plant Reserve An invested-in-
utility-plant reserve or each fund shall be provi ed in an amount equal to
the net fixed assets of each fund less the long-term debt, the contribu-
tions in aid of construction, and bond escrow liabilities of the fund.
Section 5 Excess Retained Earnings After retained earnings are
reserved as specified hereinabove, any excess retained earnings in each
fund shall be added to the Future Capital Improvements Reserve for the
fund.
Passed and adopted at regular meeting this 20th day ,pf—February, A D.
1979.
or
ATTEST
Ciry 7 ,