Financial Policies

DC WASA's Board of Directors has adopted a series of key financial policies for financing, rate-setting, and cash and investment management. These policies have served as the key parameters used to successfully develop DC WASA's ten-year financial plan, Capital Improvement Program (PDF 21.0 mb) and operating budgets. The policies will continue to guide the development and implementation of the Authority's long-term financial plans.

Capital Financing and Reserves Policy

  • Senior debt service coverage will be maintained at 140%, exceeding DC WASA's bond indenture requirements of 120%.
  • Cash reserves will be maintained at a level equivalent to 120 days operating expenses (objective $125.5 million).
  • A portion of the capital program will be financed on a pay-go basis from cash reserves that exceed the operating and maintenance reserve level, thereby reducing the need for long-term debt.
  • DC WASA will secure the least costly financing for capital projects based on careful evaluation of the Authority's financial position and capital operating needs.

Rate-setting and Budgetary Policy

  • Rates and fees will be based on the actual cost to deliver each service.
  • Current rates must be able to cover current costs and meet bond covenants.
  • Rate increases will be gradual and predictable.
  • Once DC WASA achieves its required level of cash reserves, a Rate Stabilization Fund will be established to avoid rate shock. As of October 2009, the Rate Stabilization Fund had a balance of $28.6 million.

Cash Management and Investment Policy

The goals of DC WASA's cash management and investment policy are safety, liquidity, diversity and return on investment.

Board Resolutions

The following Board of Directors' resolutions provide additional information on DC WASA's Financial and Investment Policies: