The purpose of the RMWD Reserve Policy is to ensure that the District will, at all times, have sufficient funding available to meet the operating, capital and debt service cost obligations. Reserves will be managed in a manner that allows the District to fund costs consistent with its Capital Improvement Program and Water and Wastewater Master Plans while avoiding significant rate fluctuations due to changes in cash flow requirements. Adequate reserves and sound financial policies promote RMWD’s bond ratings in the capital markets, provide financing flexibility, avoid potentially restrictive debt covenants, and ensure the District’s customers of stable rates. The reserve policy shall cover all reserve funds of the District. At the end of each fiscal year, compliance with the Reserve Policy will be reported to the District’s Board of Directors.