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CITY OF ANAHEIM WATER RATES, RULES Utilities Financial Services AND REGULATIONS 201 S. Anaheim Blvd. Page No. 3.24.1 Anaheim, CA 92805 RULE NO. 24 WATER RATE STABILIZATION ACCOUNT ISSUED BY: Effective: 02-01-14 by Resolution No.: 2014-002 Dated: 01-07-14 Dukku Lee Superseding Resolution No.: 2004-166 Dated: 07-27-04 General Manager A. PURPOSE The Water Rate Stabilization Account (WRSA) is established as a means of providing more stable retail water rates to the customers of the Water Utility. B. FUNDING MECHANISM Expense reimbursements such as water supply cost refunds received from the Metropolitan Water District and Orange County Water District and other miscellaneous credits and revenue will fund the Water Rate Stabilization Account. The WRSA will be a regulatory credit account established in accordance with Governmental Accounting Standards Board (GASB) Statement No. 62. C. ACCOUNTING All accounting procedures under this rule will be in compliance with GASB Statement No. 62. D. OPERATION OF WATER RATE STABILIZATION ACCOUNT The Public Utilities Department will draw on Water Rate Stabilization Account funds to maintain financial performance indicators and goals specified in bond covenants and monitored by financial rating agencies. Included among these indicators and goals is the maintenance of a strong debt service coverage ratio and maximum Water Rate Stabilization Account balance of approximately six months of Water Utility revenue.