SPSA : Financial Policies

The annual operating budget will be balanced on a current revenue to current expenditures basis.
Unencumbered operating budget appropriations will lapse and close at the end of each fiscal year.
SPSA shall annually prepare a five-year forecast of revenues and expenditures, to include the implications of the forecast for future services, policies and tipping fee impact on the member communities.

Reserve and Contingency Fund Policy

SPSA will seek to maintain a Reserve and Contingency Fund (R&C Fund) equal to no less than fifteen percent (15%) of operating budget expenditures, net of internal transfers. The R&C Fund will be used to address cash flow issues caused by seasonality and unanticipated expenses or revenue shortfalls.

Closure/Post-Closure Care Fund Policy

SPSA shall maintain a fund to be used for the full costs of closure and post-closure care of wasting assets as required by law. This fund shall be maintained in an amount equal to the current estimated accrued obligation of those assets.

Debt Management Policy

SPSA will appropriate funds in its annual operating budget to be used for pay-as-you-go financing of at least 20% or $2,000,000, whichever is lesser, of that same fiscal year’s capital budget.
The weighted average term of capital debt financings shall not exceed seventy-five percent (75%) of the weighted average life of the capital assets being financed. Notwithstanding, the term of debt financings will not extend beyond the expiration of SPSA’s Use and Support Agreements with its member communities.
SPSA’s rate covenants (bond resolution) require the Authority’s rates and fees to be set at levels which will ensure that annual revenues, after the payment of costs necessary to operate the system, will at least equal 120% of annual debt service for senior debt and 100% of annual debt service for total debt. With these rate covenant levels to serve as minimums, SPSA will strive to maintain senior debt service coverage of 140% and total debt service coverage of 110%.