Establishing capital reserves represents a balance between saving for future capital and spending for current needs. A large capital reserve can be a great tool for mitigating the impact of large capital projects on utility rates, but it is not always clear whether it is better to spend all cash reserves up front thereby reducing the amount of debt principle incurred, or spend only a portion and use it over time to pay debt service. If the ultimate goal is to spread out rate increases over time, the right strategy will depend on the size of the capital project and the terms of debt. Use this simple tool to determine which balance works best for your capital project. With this tool, a user can adjust the amount of debt incurred (whatever is not paid for out of reserves) and adjust rate increases over a five year period to make sure fund balances stay in the black.