Finance

How Is Cascade Financed?

Cascade collects rates and charges from its members to fund activities. The Board adopts a budget and sets rates annually. Generally, Cascade’s revenues consist of:

  • Administrative Dues and Conservation Charge – Assessed to members based on their total water use.
  • Demand Share Charge – Assessed to members based on the greater of their past three years average daily demand or peak season demand.
  • Regional Capital Facilities Charge (RCFC) – Assessed to members for each new connection to their water system and used to fund capital programs and for debt repayment
  • Loans – From members or other entities (such as the State Public Works Trust Fund).
  • Bond Proceeds – Tax-exempt bonds issued by Cascade for eligible purposes.
  • Other Income – Such as investment earnings.

The Finance Plan

The Capital Program Coordination, Management and Finance Plan (the Finance Plan) provides Cascade’s Board of Directors and its Chief Executive Officer a management tool to assist them in making decisions necessary to implement the water supply purposes of the Interlocal Contract and Cascade’s Transmission and Supply Plan (TSP). Cascade maintains a rate and financial forecast for at least 20 years as part of this plan.

The Finance Plan contemplates that the financing options needed to implement the Interlocal Contract and the TSP must be fiscally sufficient and programmatically diverse so that Cascade can meet its current and anticipated obligations. As a management tool, the Finance Plan provides a summary description of Cascade’s service area and its current system, an outline of Cascade’s projected supply and demand forecasts, and the financing options to meet current and projected need.

Fiscal Policies

Cascade has an adopted set of fiscal policies that provide financial integrity and stability, rate equity, and efficiency and conservation. These policies address capital funding, budgeting, accounting, financial planning, rate equity, and other elements that guide the Cascade financial strategy. The policies are periodically revised and, as appropriate, updated. Here are the current fiscal policies

Regional Capital Facilities Charge

  • Cascade establishes rates to cover the cost of providing water to its members. One component is a fee for the equitable recovery of growth-related costs pertaining to Cascade’s water supply system. The RCFC is assessed for each new connection in a member’s service area.
  • Members are responsible for collecting the RCFC from their customers. The total connection charge set by members may also include local charges and therefore may vary from the RCFC.
  • The RCFC is approved by the Cascade board each October for the following year. For more information about the RCFC and the current charge, please click on the RCFC Fact Sheet links.

Bond Issues

Cascade last issued bonds in 2014, issuing 15-year refunding revenue bonds to pay a portion of the cost of refunding the callable portion of the outstanding 2006 bond issue. The reacquisition price exceeded the net carrying amount of the old debt by $2,692,477. This amount is being netted against the new debt and amortized over the remaining life of the refunding debt. Cascade realized an economic gain (difference between the present values of the debt service payments on the old and new debt) of $5,462,625. Cascade also issued bonds in 2006, 2009 and 2012.

Rate Structure

Members have agreed (in the Interlocal Contract) to pay member charges, which includes but are not limited to all cater supply rates and charges, Regional Capital Facilities Charges, dues, assessments and other payments from members. Cascade rates and charges are the same for all members. Certain components of member charges are described below.

Water Supply Rates and Charges

The board sets rates and charges for delivery of water (called “Demand Share Charges”) according to a Rate Calculation Methodology adopted by the board in accordance with the Interlocal Contract.

Regional Capital Facilities Charge (RCFC)

Each member is required to pay RCFCs to Cascade for each new equivalent residential unit connected to that member’s water distribution system. RCFCs are intended to allocate growth costs to members.

Administrative Dues

Each member is required to pay annual dues to defray part of Cascade’s administrative costs, based upon the number of equivalent residential units served by that member’s water system, regardless of water usage or capacity, and whether or not those units are served by water from Cascade.

Conservation Program Charge

A conservation program charge is assessed to each member.