Title
A RESOLUTION ADOPTING A HUDSON PUBLIC POWER MINIMUM CASH RESERVE POLICY TO ESTABLISH A MINIMUM CASH RESERVE FUND BALANCE.
Executive Summary: At City Council request, the Public Works Department has completed work with Utility Financial Solutions, LLC in developing a proposed Hudson Public Power Minimum Cash Reserve Policy.
Body
Legislative History
None.
Purpose & Explanation
The Hudson Public Power (HPP) proposed cash reserve policy will help ensure the financial stability of the HPP fund. In addition, such a policy helps in the timely completion of capital projects and improvements and is vital to being able to respond to large unexpected expenditures.
The specific purpose of developing a minimum cash reserve for the utility are:
Ø Identify major risk categories for the Electric Utility.
Ø Establish a risk factor for each exposure.
Ø Determine a minimum recommended cash reserve.
The attached report includes the study results, calculations and analysis, and the recommended formula for a minimum reserve policy. The policy is dynamic in nature and is to be reviewed annually as part of the budget preparation process.
Timing Considerations
None
Fiscal Impact
Currently Budgeted
Supplemental Appropriation Required
X Appropriation Not Required.
Recommendation
Suggested Action
Staff recommends that City Council pass the resolution accepting the attached HPP Cash Reserve Policy to establish a minimum cash reserve fund balance. Staff further recommends that there be a 15% fund contingency over and above the calculated established minimum cash reserve amount.
Submitted by,
Jane Howington, City Manager
Frank J. Comeriato, Jr., Director of Public Works