This chapter establishes a series of Water Department reserves that are well defined, and dictates their management processes for authorized uses (replacement, upgrade expansion, loan payments and acquisition of capital equipment) of the town’s Water Department’s reserves to maintain the integrity of our water system on behalf of the town’s residents.
(A) Definitions. For the purpose of this chapter, the following definitions shall apply unless the context clearly indicates or requires a different meaning.
ASSIGNED (SET BY BUDGET). This classification includes amounts that are constrained by the town’s intent to be used for a specific purpose but are neither restricted nor committed. This intent can be expressed by the Town Council or Town Administrator. No other governing body or officials have this authority delegated to them. This classification also includes the remaining positive fund balance for all governmental funds except for the General Fund.
COMMITTED (SELF IMPOSED BY ORDINANCE). This classification includes amounts that can be used only for specific purposes pursuant to constraints imposed by formal action of the Town Council. These amounts cannot be used for any purpose unless the Town Council removes or changes the specified use by taking the same type of action (ordinance or resolution) that was employed when the funds were initially committed. This classification also includes contractual obligations to the extent that existing resources have been specifically committed for use in satisfying those contractual requirements.
EXPANSION. A budgeted increase in capacity to meet the requirements of actual or anticipated users (metered connections).
MAINTENANCE. The budgeted day to day operations, including care and minor repairs of the system.
REPAIR. The budgeted modification of an existing system component to:
(a) Fix major failed or failing components (usually of significant cost); or
(b) Fix an inferior component that does not meet department standards.
REPLACEMENT. The complete replacement of a portion or the entire system that is beyond the end of useful life expectancy or is requiring extensive repairs annually.
RESERVES (FUND BALANCES). A fund balance is defined as the cumulative difference of all revenues and expenditures since the government’s creation. Thus, a current fund balance results from the cumulative financial decisions made by the governing body since the government’s formation. Positive fund balances are also called reserves. However, not all of these funds are available for spending
RESTRICTED (REQUIRED BY OTHERS, SET BY ORDINANCE). This classification includes amounts for which constraints have been placed on the use of resources either:
(a) Externally imposed by creditors (such as through a debt covenant), grantors, contributors or laws or regulations of other governments; or
(b) Imposed by law through constitutional provisions or enabling legislation.
UNASSIGNED. This classification includes the residual fund balance for the General Fund. The unassigned classification also includes negative residual fund balance of any other governmental fund that cannot be eliminated by the offsetting of assigned fund balance amounts.
UPGRADE. The budgeted modification of an existing system component to modernize and improve the efficiency of service to existing users.
(B) Changes to reserves. Reserves are established to accumulate funds for specific uses. Unless otherwise provided for in a specific reserve, a reserve may be changed, altered, retired, eliminated or abandoned by standard ordinance procedures.
(Prior Code, § 4.06.010)