title
Amendments to the Finance Policies Manual
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SUBJECT
recommendation
Adopt Resolution No. 24-32, approving the review and authorize amendments to the Finance Policies Manual within the following sections:
• 1. Fiscal Management Policy
• 2. Fund Balance Policy
• 3. Debt Management Policy
• 4. General Investment Policy
• 5. Investment Policy for the Retiree Healthcare Fund
• 7 Procurement Policy
• Exhibit A. NTMWD Investment Strategy Statement
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PURPOSE
The Public Funds Investment Act (PFIA) of Texas requires the NTMWD Board of Directors strategy to review the investment policy and investment strategy annually. Additionally, amendments to the Finance Policies Manual are needed to reflect best practices, provide clarifications, and make minor updates and corrections throughout.
RECOMMENDATION
The Executive Director and NTMWD staff recommend the Board of Directors amend the Finance Policies Manual and adopt Resolution No. 24-32, approving NTMWD’s Finance Policies Manual review and amendments.
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Committee: |
This item was reviewed with the Finance Committee on June 12, 2024, and with the Policy Committee on September 11, 2024. |
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
In April 2016, the Board Policies Manual combined many existing Administration and Finance- related policies into the Administration and Finance Polices Manual, which was adopted by the Board of Directors. In September 2023, the NTMWD Administration and Finance Policies Manual was split into the NTMWD Finance Policies Manual and the Administration Policies Manual. The Finance Policies Manual amendments were approved.
The following is a summary of the proposed amendments:
• Section 1. Fiscal Management Policy
o Minor updates to 1.7 Capital Assets
• Section 2. Fund Balance Policy
o Changes to 2.2 Guidelines for Fiscal Year End Fund Balances
§ Removal of 150-day target balance for the Regional Water System’s cumulative balance. Continue to maintain a range of 130 -150 days to provide budgetary flexibility.
§ Adjust shared services funding reserve range 15-30 days to 15-45 days.
§ Addition of Lawsuit Settlement Funds (Received).
• Section 3. Debt Management Policy
o Minor change to position title references.
• Section 4. General Investment Policy
o Required training hours of Investment Officer and Alternate Investment Officer to reflect requirements set forth by the Public Funds Investment Act (PFIA).
o Inclusion of Lawsuit Settlement Funds (Received)
• Section 5. Investment Policy for Retirement Fund and Retiree Health Insurance Program
o Added language to state responsibility for the oversight of the NTMWD Employee Retirement Plan and Retiree Healthcare Trust will remain with the Finance Committee until a newly proposed Oversight Committee is established and adopts an investment policy for the Retirement Plan.
• Section 7 - Procurement Policy
o Updated language to reflect centralization of all construction bidding, including CIP funded projects
o Include language that procurement thresholds are applicable to the cumulative amount spent.
o Updated language to the Procurement Card Program to reflect cardholder and manager responsibilities.
• Exhibit A - NTMWD Investment Strategy Statement
o Inclusion of Lawsuit Settlement Funds (Received)
FUNDING
N//A