Inland Empire weighs deploying $555M cash reserves for capital projects

Inland Empire weighs deploying $555M cash reserves for capital projectsWith cash on hand stretching to 508 days, the California utility is consulting financial advisors on leveraging its massive liquidity alongside $150 million in CCRA funds to finance infrastructure.

IEUA reported $555.4 million in total cash, investments, and restricted deposits for May 2026, an $11 million monthly increase.

The agency's average days of cash on hand reached 508 days, well above its 365-day target for emergency reserves.

Staff maintain 63% of the portfolio in highly liquid internal accounts to ensure cash is available for near-term construction payouts.

The committee also ratified $2.35 million in FY 2026/27 insurance premiums to protect nearly $915 million in assets from capital project and third-party liability risks.

The Inland Empire Utilities Agency (IEUA) is evaluating strategies to deploy its swelling cash reserves to fund ongoing capital improvement projects, following a financial report that highlighted massive liquidity levels at the California utility. During a July 8 Finance and Administration Committee meeting, Acting Budget Officer Cecilia House reported that the agency's total cash, investments, and restricted deposits reached $555.4 million in May 2026. The $11 million monthly increase was primarily driven by property and redevelopment tax receipts. Crucially, the agency's average days of cash on hand increased to 508 days. 'In practical terms, this means that the agency could continue operations for more than a year using just its cash reserves if necessary,' House told the committee. The utility maintains a highly liquid, conservative investment strategy to ensure cash is available for construction payouts. While the agency's externally managed funds—overseen by PFM Asset Management—yielded around 4.8%, its internally managed funds yielded 3.8%. Staff noted that 63% of the portfolio is managed internally through the Local Agency Investment Fund (LAIF) and California Asset Management Program (CAMP) to maintain a 12-month look-ahead for capital project liquidity. Committee Chair Marco Tule suggested leveraging the excess liquidity—anything beyond the agency's 365-day emergency minimum—to aggressively finance infrastructure. Tule pointed out that combining the liquid cash with approximately $150 million in available CCRA funds gives the agency nearly $700 million in available capital. 'Can we use that strategically to pay down some of our capital improvement projects as we're pulling in CCRA funds?' Tule asked. Agency staff confirmed that deploying the reserves to offset capital costs is regularly evaluated in consultation with IEUA's financial advisors. In a separate action item, the committee ratified the $2.35 million purchase of agency-wide insurance for Fiscal Year 2026/27 to protect nearly $915 million in utility assets. Manager of Contracts and Procurement Warren Green noted that capital improvement projects and third-party liabilities remain the agency's biggest risk exposures. Despite market pressures from 'social inflation' and 'nuclear verdicts'—jury awards exceeding $10 million—the agency successfully secured $20 million in excess liability limits and $1 billion in property, boiler, and machinery coverage.