Published on: 09-Mar 05:20pm
Board Designated - Master Plan Fund
Sources of MP Cash:
Uses of MP Cash (potential examples):
Board Designated - Capital Replacement Fund
Sources of Capital Replacement Fund:
Uses of Capital Replacement Fund (potential examples):
After the annual audit is completed the Finance Committee can recommend the Board to approve transfer of surplus dollars from Operating Cash to either fund.
Year-end balances depend on timing and actual costs on every item. Supply chain and contractor workforce delays in an environment of increasing prices can change the cost by the time the project is ready. Although Replacement Capital project costs are vetted during the previous year prior to the approved Capital Plan, we won’t know the actual cost until the project is bid. The spread between budget and actual is typically not large due to the limited scope of most projects. However, we recently experienced a change close to $800k in our favor due to competitive bidding on 2 projects. Approved items costing more than $300k in Replacement Capital that come in higher than budget must come back to the Finance Committee and Board for approval.
Projects on the Master Plan list are also estimated based in information available during the budget cycle, but are not approved in advance, and not included in the Capital Plan. However, those projects are included in cash flow analysis when the budget is constructed and assessments are set for the following year. Management, Finance Committee and the Board review cash flow analysis and capital expenditures on a regular basis.
(Q&A - asked by Michelle Toups #8106 during February 2022 Board Meeting)
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