What is the purpose of a capital improvement fund?

The capital improvement fund is primarily established to ensure the long-term sustainability and reliability of a utility's infrastructure. It is specifically designed to accumulate funds for future investments in upgrades, replacements, or major repairs of facilities and equipment. This proactive financial strategy helps utilities manage the lifecycle of their assets, enabling them to continue delivering safe and efficient services to the community over time.

Using this fund allows utilities to allocate resources for significant projects, ensuring that systems can accommodate growth and adapt to changing regulations or technology. This foresight aids in avoiding service disruptions and unexpected costs associated with aging infrastructure, thereby ensuring a steady operation in the future.