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LL C sty {, LauisVille <br />COLORADO • SINCE 1882 <br />UTILITIES DEPARTMENT <br />STATEMENT OF DEPARTMENTAL POLICY & PROCEDURE <br />Title: Modeled Cash Reserves <br />Effective Date: May 1, 2021 <br />Purpose & Scope <br />The purpose of this statement is to set the written rules, policies, and procedures, which <br />authorized the use of Cash Reserves for the Water, Wastewater and Stormwater funds <br />(collectively the Combined Utility Fund) within the Utility Rate Model. <br />Policies & Procedures <br />Modeled Cash Reserve shall be calculated at 90 days or 25% of the projected annual operations <br />and maintenance expenses for each modeled year and by each fund as measured on the City's <br />budgetary basis. <br />For purpose of this policy, operating expenses are defined as all budgetary basis expenses, <br />excluding interfund transfers and capital outlay. <br />This policy should align and be consistent with the Working Capital Reserve Policy as outlined in <br />section 2.4 of the Louisville's Finance Policies. Unless specifically stated, the Finance Policies <br />shall maintain primacy. <br />Annual modeled utility rate increases will be adjusted and modified to maintain this policy. <br />24 <br />