4.2b ERMUSR 04-13-2021COMMISSIONPOLICY
Section:Category:
GovernanceDelegation to Management Policies
Policy Reference:Policy Title:
G.4i2Financial Reserves
PURPOSE:
With this policy, the Commission sets forth its expectations for the General Manager concerning
the maintenance of
POLICY:
The General Manager shall ensure that ERMUmaintainscash reserves for its electric andwater
utility enterprises thatarereasonable, prudent and necessary to:
1.Meet or exceed the requirements of all bond covenants
2.Demonstrate to rating agencies and investors that ERMUcredit worthy
3.Provide liquidity that is adequate, along withother risk-management measures, to ensure
ongoing operation of the utility systems
4.Stabilize revenue requirements and customer rates
5.Manage the level of debt by fundinga portion of the capital investments
In addition, the General Manager shallimplementaManagement Financial ReservesPolicythat
sets forth the designated reserve funds to be maintained,along withtheir purposes andmethods
for determining appropriate target levelsand requirements for internal controls, monitoring and
reporting. Designated reserve funds may include, but are not limited to reserves restricted for
debt service and unrestricted designated reserves.
POLICY HISTORY:
Adopted December 12, 2017
RevisedJuly 14, 2020
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