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Amendments to the Finance Policies Manual; Resolution No. 25-43
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SUBJECT
recommendation
Adopt Resolution No. 25-43, approving the review of the NTMWD Investment Policy and Strategy Statement, and amendments to the Finance Policies Manual within the following sections:
1 - Fiscal Management Policy (Amended)
2 - Fund Balance Policy (Amended)
3 - Debt Management (Amended)
10 - Retirement Plan Funding Policy (New)
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PURPOSE
The Public Funds Investment Act (PFIA) of Texas requires the NTMWD Board of Directors to annually review the investment policy and investment strategy. Amendments to the Finance Policy Manual are needed to reflect recommendations of best practices, provide clarification, and make minor corrections throughout.
RECOMMENDATION
The Executive Director and NTMWD staff recommend the Board of Directors establish and adopt the Finance Policies Manual and Resolution No. 25-43, approving NTMWD’s Finance Policies Manual review and amendments.
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Committee: |
This item was reviewed with the Finance Committee on June 11, 2025, and with the Policy Committee on September 10, 2025 |
DRIVER(S) FOR THIS PROJECT
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Strategic Objective: |
2.1: Efficient Business Practices 2.3: Rigorous Financial Management |
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☒ Regulatory Compliance |
☐ Asset Condition |
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☐ Capacity |
☐ Redundancy/Resiliency |
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☐ Relocation or External Requests |
☐ Operational Efficiency |
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☐ Safety |
☒ Administrative |
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☒ Policy |
☐ Other _____________ |
BACKGROUND
There are no recommended changes to the NTMWD Investment Policy or Strategy Statement.
The following is a summary of the amendments to the Finance Policies Manual:
• Section 1 - Fiscal Management Policy
o Language Stating the budgeted debt service funds for a new bond sale may be reallocated to reduce the size and amount of the bond sale.
• Section 2 - Fund Balance Policy
o Update definition of Contingency Fund and Reserve for Maintenance to include large planned system maintenance expenses and unforeseen major repairs as authorized uses of funds.
o Regional Water System Contingency Fund - remove “150-day target” from the combined Operating and Contingency balances.
o Health Insurance Holding Funds - update language to maintain separate minimum balances instead of a cumulative balance.
• Section 3 - Debt Management Policy
o Minor Change.
• Section 10 - Employee Retirement Plan
o New Funding Policy for the Employee Retirement Plan.
o Policy Includes the Following Sections.
§ Purpose
§ Primary Funding Objective - Fully fund the long-term cost of benefits
§ Priorities and Guidelines - To achieve the funding objective
§ Funding - Methods to measure plan assets and liabilities; amortization of liabilities; timing of experience studies
Copies of the redline Finance Policies Manual and a clean version of the proposed Finance Policies Manual as well as Resolution No. 25-43 are attached.
FUNDING
N/A