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HomeMy Public PortalAboutResolution 1757 RESOLUTION NO. 1757 RESOLUTION AMENDING THE FINANCIAL POLICIES OF THE VILLAGE OF PLAINFIELD WHEREAS, The Government Finance Officers Association (GFOA) represents public finance officials throughout the United States and Canada with a mission to promote excellence in state and local government financial management; and WHEREAS, GFOA recommends that governments formally adopt financial policies as they are central to a strategic, long-term approach to financial management; and WHEREAS, The Village of Plainfield originally adopted formal Financial Policies on February 2, 2010; and WHEREAS, On April 7, 2014 the Village previously amended the formal Financial Policies; and WHEREAS, the Village continually reviews its financial management policies on a best practices approach; and Now, THEREFORE, BE IT RESOLVED BY THE PRESIDENT AND BOARD OF TRUSTEES OF THE VILLAGE OF PLAINFIELD, WILL AND KENDALL COUNTIES,ILLINOIS,AS FOLLOWS: Section 1. That the Village of Plainfield hereby adopts the revised Financial Policies attached hereto as Exhibit 1. This Resolution shall become effective in the manner provided by law. ADOPTED this 21st day of May, 2018 by a roll call vote as follows: AYES: Newton, O'Rourke, Bonuchi, Lamb, Larson NAYS: Wojowski Village Clerk Approved: May 21, 2018 Attest: Villa e President Village Clerk (Seal) EXHIBIT 1 FINANCIAL POLICIES General The Village of Plainfield has an important responsibility to carefully account for public funds, to manage municipal finances wisely, and to plan and provide for the adequate funding of services desired by the public and as required by laws, rules, or regulations, including the provision and maintenance of public facilities and improvements. The financial goals and policies set forth in this document are intended to establish guidelines for the continued financial strength and stability of the Village of Plainfield. Financial Goals Financial goals are broad, fairly timeless statements of the financial position the Village seeks to attain. The financial goals for the Village of Plainfield are: • To provide full value for each tax dollar by delivering quality services efficiently and on a cost-effective basis. • To preserve our quality of life by providing and maintaining adequate financial resources necessary to sustain a sufficient level of municipal services, and to respond to changes in the economy, the priorities of governmental and non-governmental organizations, and other changes that may affect our financial well-being. • To maintain a strong credit rating in the financial community. Financial Policies Financial policies support the financial goals. They are general statements that guide decision- making in specific situations, to ensure that a decision will contribute to the attainment of the financial goals. Federal and state laws, rules, and regulations, our Village Code of Ordinances, and generally accepted accounting principles promulgated by the Governmental Accounting Standards Board ("GASB") and the Government Finance Officers Association of the United States and Canada ("GFOA") govern our financial policies and processes. Budget Policies Sound financial practice and the desire to maintain a strong credit rating dictate that our budgets be balanced, constantly monitored, and responsive to changes in service demands. With these concepts in mind, the Village of Plainfield has adopted the following budget policy statements: • The Village will adopt and maintain a balanced budget in which expenditures will not be allowed to exceed reasonably estimated revenues and other available funds at the same time maintaining recommended fund balances. • Fund balance should not be considered a source of funds for operating expenditures. Excess unreserved and undesignated fund balance may be appropriated as part of the adopted budget to fund capital or emergency expenditures. Financial Policies(Adopted 2/1/2010;Amended 4/16/2012;4/7/2014) P1 FINANCIAL POLICIES • As part of the annual budget review process, the Village will project fund revenues and expenditures for a minimum of two years beyond the budget year and compare the projected balances to the fund balance policy. This will allow the Village to identify potential problems early enough to correct them. • The Village will maintain a budgetary control system to ensure adherence to the budget and will prepare monthly reports comparing actual revenues and expenditures to budgeted amounts. • Twice annually, the Village Administrator will provide the Village Board with trend analysis/projections of revenues and expenditures. Revenue Policies Revenues determine the capacity of a local government to provide services. Under ideal conditions, revenues would grow at a rate equal to or greater than expenditures. To ensure that our revenues are balanced and capable of supporting our desired levels of services, the Village of Plainfield has adopted the following revenue policy statements. • The Village endeavors to develop and maintain a diversified and stable revenue base to shelter it from short-term fluctuations in any one revenue source. • The Village will estimate annual revenues on an objective, reasonable, and conservative basis. Most revenues will be estimated based on a historical trend analysis. Major revenues will receive a more in-depth analysis. • Each year and whenever appropriate, existing revenues will be re-examined and possible new sources of revenues will be explored to ensure that we are maximizing our revenue potential. • The Village will strive to be informed and aware of all grants and other aid that may be available to us. All potential grants and other aid shall be carefully examined for matching requirements (both dollar and level-of-effort) and restrictive covenants, to ensure that our participation in such grants will be beneficial and cost-effective. • All charges for services, fees, licenses, permits, etc. will be reviewed regularly to insure that rates are maintained at a level that is related to the cost of providing the services and are competitive with others providing similar services in the area. • Water and Sewer Funds will be self-supporting. Financial Policies(Adopted 2/1/2010;Amended 4/16/2012;4/7/2014) P2 FINANCIAL POLICIES • The Village will establish user charges and set fees for services for its enterprise funds at a level that fully supports both the direct and indirect costs of the activity. Indirect costs include the recognition of annualized depreciation of capital assets. Cash flow requirements to adequately defray bond retirement and capital outlay will become a primary determinant in the development of user charges. • Connection fees for water and sewer services shall be reviewed regularly to assure that fees reflect the cost of providing services to new developments. • One-time revenues that are not required by law or agreement to be expended for a particular purpose will only be used to fund one-time capital or emergency expenditures. One-time revenues will not be used to support operating expenditures, except in emergency situations. Cash Management Policies • An investment policy has been adopted by the Village Board, which provides guidelines for the prudent investment of the temporary idle cash and outlines the policies for maximizing the efficiency of the cash management system. The ultimate goal is to enhance the economic status of the Village while protecting its pooled cash. The current Investment Policy is attached as Exhibit A. • The cash management system is designed to accurately monitor and forecast expenditures and revenues, thus enabling the Village to invest funds to the fullest extent possible. The Village attempts to match funds to projected disbursements. • Except for cash in certain restricted and special funds, the Village of Plainfield will consolidate cash balances from all funds to maximize investment earnings. Investment income will be allocated to the various funds based on their respective participation and in accordance with generally accepted accounting principles. • Criteria for selecting investments and the order of priority are: safety, liquidity, and yield. Expenditure Policies Expenditures are a rough measure of a local government's service output. While many expenses can be easily controlled, emergencies, unfunded mandates, and unanticipated service demands may strain our ability to maintain a balanced budget. To ensure the proper control of expenditures and provide for a quick and effective response to adverse financial situations, the Village of Plainfield has adopted the following expenditure statements: • The Village will maintain a level of expenditures that will provide for the public well-being and safety of the residents and businesses of the community. Financial Policies(Adopted 2/1/2010;Amended 4/16/2012;4/7/2014) P3 FINANCIAL POLICIES • The Village will pay all current operating expenditures with current operating revenues. • Expenditures and purchase commitments will follow the Village's approved Purchasing Authority Policy. The current Purchasing Authority Policy is attached as Exhibit B. • Encumbrances represent commitments related to unperformed contracts for goods or services, and will be recorded when incurred. Fund Balance Fund balances are established to protect against the need to reduce service levels or raise taxes and fees due to temporary revenue shortfalls or unpredicted one-time expenditures. In addition, in accordance with GASB Statement 54, the Village must establish fund balance classifications that inform the financial statement user as to the extent to which the Village must observe constraints imposed upon use of the resources that are reported by the governmental funds. More detailed fund balance financial reporting and the increased disclosures will aid the user of the financial statements in understanding the availability of resources for various governmental purposes. The fund balance will be composed of five categories: 1) Nonspendable, 2) Restricted, 3) Committed, 4) Assigned, or 5) Unassigned. Definitions Governmental Funds — are used to account for all or most of the Village's general activities, including the collection and disbursement of earmarked monies (special revenue funds), the acquisition or construction of general capital assets (capital projects funds) and the servicing of general long-term debt (debt service funds). The General Fund is used to account for all activities of the Village not accounted for in some other fund. Fund Balance—the difference between assets and liabilities in a Governmental Fund. Nonspendable Fund Balance — the portion of a Governmental Fund's fund balance that is not available to be spent, either short-term or long-term, in either form (e.g., inventories, prepaid items, land held for resale) or through legal restrictions (e.g., endowments). Restricted Fund Balance -the portion of a Governmental Fund's fund balance that is subject to external enforceable legal restrictions (e.g., grantor, contributors and property tax levies). Committed Fund Balance - the portion of a Governmental Fund's fund balance with self- imposed constraints or limitations that have been placed by formal action at the highest level of decision making. Assigned Fund Balance - the portion of a Governmental Fund's fund balance to denote an intended use of resources, or for all remaining fund balance in non-General funds not categorized above. Financial Policies(Adopted 2/1/2010;Amended 4/16/2012;4/7/2014) P4 FINANCIAL POLICIES Unassigned Fund Balance - available expendable financial resources in a governmental fund that are not the object of tentative management plan (i.e. designations). (Only in the General Fund, unless negative) Fund Balance Policies • The Village will spend the most restricted dollars before less restricted, in the following order: a. Nonspendable (if funds become spendable) b. Restricted c. Committed d. Assigned e. Unassigned • The Management Services Director will determine if a portion of fund balance should be assigned, consistent with intentions of the Village Board. • The Village will strive to maintain the unassigned fund balance of the General Fund at a level at least equal to 25% of the total General Fund annual operational expenditures. • If the General Fund unassigned fund balance falls below the minimum, a plan will be developed to return to the minimum balance within a reasonable period of time. • General Fund unassigned fund balance in excess of 40% may be transferred to the Capital Improvement Fund. • The Village will strive to maintain the unrestricted net position of the Enterprise Fund (Water and Sewer) at a level at least equal to 25% of the total Water and Sewer Fund annual operational expenditures. • If the Enterprise Fund unrestricted net position falls below the minimum, rates may be adjusted so as to gradually return to the minimum within a reasonable period of time. If the position exceeds 40%, the overage may be used to offset rate increases, or transferred to the Village's Capital Replacement Fund, or a combination thereof. • The Water and Sewer Capital Replacement Fund is a reserve fund for future capital investments in the Village's infrastructure system. Funding amounts for the Capital Replacement Fund is largely driven by the annual depreciation amount of the Enterprise Fund infrastructure system. Financial Policies(Adopted 2/1/2010;Amended 4/16/2012;4/7/2014) P5 FINANCIAL POLICIES Capital Improvement Policies • The Village shall maintain a Five-Year Capital Improvement Program and capital improvements will be made in accordance with that plan. The program shall be updated annually. • The corresponding year of the Capital Improvement Program will be incorporated into the annual operating budget as the Capital Budget. • As part of the development of the Capital Improvement Program, the condition of Village infrastructure will be evaluated to appropriately prioritize and schedule maintenance and replacement. • Each capital project will be evaluated for its impact on current and future operating budgets. Debt Policies Debt is an effective way to finance capital improvements or to even out short-term revenue flows. Properly managed debt preserves our credit rating, provides flexibility in current and future operating budgets, and provides us with long-term assets that maintain or improve our quality of life. To provide for the appropriate issuance and responsible use of debt, the Village of Plainfield has adopted the following debt management policy statements: • The Village will confine long-term borrowing to capital improvements or one- time obligations that cannot be financed from current revenues or reserves. • Capital projects financed through the issuance of bonds shall be financed for a period not to exceed the expected useful life of the improvement. • The Village will maintain good communications with bond rating agencies about its financial condition. The Village will follow a policy of full disclosure on every financial report and bond prospectus. • The Village will attempt to keep the average maturity of General Obligation Bonds at or below 20 years. • The annual operating budgets of all funds will be maintained so as to ensure the full and timely repayment of debt principal and interest due that year. • The Village's annual audit and official statements will reflect the Village's commitment to full and open disclosure concerning our debt. • As a home rule unit of government in the State of Illinois, the Village has no statutory debt limit. Financial Policies(Adopted 2/1/2010;Amended 4/16/2012;4/7/2014) P6 FINANCIAL POLICIES Capital Asset Policies This policy is to establish the principles related to the accounting treatment of the Village's capital assets. Capital assets include land, improvements to land, buildings, building improvements, vehicles, machinery, equipment, works of art and historical treasures, infrastructure, construction in progress and all other tangible and intangible assets that are used in operations and have initial useful lives extending beyond a single reporting period. Infrastructure assets are long-lived capital assets that normally are stationary in nature and can be preserved for a significantly greater number of years than most capital assets. Examples of infrastructure assets include roads, bridges, drainage systems, water and sewer systems. Land and land improvements are inexhaustible capital assets and will not be depreciated. Construction in progress will not be depreciated until construction is complete. All other capital assets will be depreciated over their estimated useful lives, using the straight-line method of depreciation. In no event shall the useful life of an asset be less than the period of probable usefulness established for debt purposes as outlined by GASB34. A capitalization threshold is the cost established by the Management Services Director that must be met or exceeded if an asset is to be recorded and depreciated as a capital asset. The capitalization threshold is based on the cost of a single asset. Assets that do not meet the capitalization threshold will be recorded as expenditures or expenses. For purposes of property control (insurance, security, etc.), the Management Services Director and/or department heads may develop and maintain the appropriate record keeping system(s) to account for assets which do not meet the capitalization threshold. Capital assets that meet the minimum capitalization threshold will be recorded at historical cost. The cost of a capital asset includes capitalized interest and ancillary charges necessary to place the asset into its intended location and condition for use. Ancillary charges include costs that are directly attributable to asset acquisition, such as freight and transportation charges, site preparation costs, and professional fees. Donated capital assets will be recorded at their estimated fair value at the time of acquisition, including any ancillary charges. Estimated historical cost may be used in those cases where the actual historical cost is not readily available. Estimated historical cost will be calculated using the current replacement cost of a similar asset and deflating this cost to the acquisition year (or estimated acquisition year) using a price-level index approved by the Management Services Director. Capital assets associated with the operation of enterprise funds will be recorded in those funds. Capital assets associated with general government operations, with the exception of infrastructure assets, will be recorded in the appropriate internal service fund(s). Infrastructure assets will not be recorded in a governmental or proprietary fund, but a record keeping system necessary to allow for the accounting, auditing, and reporting of such assets, including depreciation will be maintained. Financial Policies(Adopted 2/1/2010;Amended 4/16/2012;4/7/2014) P7 FINANCIAL POLICIES Estimated useful life means the estimated number of years that an asset will be able to be used for the purpose for which it was purchased. The Village of Plainfield will capitalize all assets that have a useful life greater than one year and meet the following dollar thresholds: Asset Category Threshold Est. Useful Life Land & Improvements Any Inexhaustible Building & Improvements $20,000 5 —50 Machinery & Equipment $5,000 3 —20 Infrastructure $50,000 15—50 With respect to asset improvements (such as street resurfacing, roof replacement, etc), costs over the appropriate asset category threshold will be capitalized if: • The estimated life of the asset is extended by more than 25%, or • The cost results in an increase in the capacity of the asset, or • Significantly changes the asset, or • In the case of streets and road — if the work impacts the "base" structure Financial Reporting Policies 1. The Village will adhere to a policy of full and open disclosure of all financial operations. 2. An independent firm of certified public accountants will perform an annual audit according to Generally Accepted Auditing Standards (GAAS) and issue a written opinion that will be incorporated in the Annual Financial Report. 3. As long as the Village has outstanding debt, the Annual Financial Report will include the additional disclosures required by SEC Rule 15c2-12. Financial Policies(Adopted 2/1/2010;Amended 4/16/2012;4/7/2014) P8 EXHIBIT A VILLAGE OF PLAINFIELD INVESTMENT POLICY I. SCOPE This policy applies to the investment of all funds, excluding the investment of employees' retirement funds. Proceeds from certain bond issues, as well as separate foundation or endowment assets, are covered by a separate policy. 1. Pooling of Funds Except for cash in certain restricted and special funds, the Village of Plainfield will consolidate cash and reserve balances from all funds to maximize investment earnings and to increase efficiencies with regard to investment pricing, safekeeping and administration. Investment income will be allocated to the various funds based on their respective participation and in accordance with generally accepted accounting principles. II. GENERAL OBJECTIVES The primary objectives, in priority order, of investment activities shall be safety, liquidity, and yield: 1.Safety Safety of principal is the foremost objective of the investment program. Investments shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. The objective will be to mitigate credit risk and interest rate risk. a. Credit Risk The Village of Plainfield will minimize credit risk,which is the risk of loss due to the failure of the security issuer or backer, by: • Limiting investments to the types of securities listed in this Investment Policy. • Pre-qualifying the financial institutions, broker/dealers, intermediaries, and advisers with which the Village of Plainfield will do business. • Diversifying the investment portfolio so that the impact of potential losses from any one type of security or from any one individual issuer will be minimized. b. Interest Rate Risk The Village of Plainfield will minimize interest rate risk, which is the risk that the market value of securities in the portfolio will fall due to changes in market interest rates, by: • Structuring the investment portfolio so that securities mature to meet cash requirements for ongoing operations, thereby avoiding the need to sell securities on the open market prior to maturity. • Investing operating funds primarily in shorter-term securities, money market mutual funds, or similar investment pools and limiting the average maturity of the portfolio in accordance with this policy. 2. Liquidity The investment portfolio shall remain sufficiently liquid to meet all operating requirements that may be reasonably anticipated. This is accomplished by structuring the portfolio so that securities mature concurrent with cash needs to meet anticipated demands (static liquidity). Furthermore, since all possible cash demands cannot be anticipated, the portfolio should consist largely of securities with VOP Investment Policy (1/28/10) P1 EXHIBIT A active secondary or resale markets (dynamic liquidity). Alternatively, a portion of the portfolio may be placed in money market mutual funds or local government investment pools which offer same-day liquidity for short-term funds. 3. Yield The investment portfolio shall be designed with the objective of attaining a market rate of return throughout budgetary and economic cycles, taking into account the investment risk constraints and liquidity needs. Return on investment is of secondary importance compared to the safety and liquidity objectives described above. The core of investments are limited to relatively low risk securities in anticipation of earning a fair return relative to the risk being assumed. Securities shall generally be held until maturity with the following exceptions: • A security with declining credit may be sold early to minimize loss of principal. • A security swap would improve the quality,yield, or target duration in the portfolio. • Liquidity needs of the portfolio require that the security be sold. W. STANDARDS OF CARE 1. Prudence The standard of prudence to be used by investment officials shall be the "prudent person" standard and shall be applied in the context of managing an overall portfolio. Investment officers acting in accordance with written procedures and this investment policy and exercising due diligence shall be relieved of personal responsibility for an individual security's credit risk or market price changes, provided deviations from expectations are reported in a timely fashion and the liquidity and the sale of securities are carried out in accordance with the terms of this policy. The "prudent person" standard states that, "Investments shall be made with judgment and care, under circumstances then prevailing, which persons of prudence, discretion and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived." 2. Ethics and Conflicts of Interest Officers and employees involved in the investment process shall refrain from personal business activity that could conflict with the proper execution and management of the investment program, or that could impair their ability to make impartial decisions. Employees and investment officials shall disclose any material interests in financial institutions with which they conduct business. They shall further disclose any personal financial/investment positions that could be related to the performance of the investment portfolio. Employees and officers shall refrain from undertaking personal investment transactions with the same individual with whom business is conducted on behalf of the Village of Plainfield. 3. Delegation of Authority Authority to manage the investment program is granted to the Management Services Director, hereinafter referred to as investment officer. Responsibility for the operation of the investment program is hereby delegated to the investment officer, who shall act in accordance with established written procedures and internal controls for the operation of the investment program consistent with this investment policy. Procedures should include references to: safekeeping, delivery vs. payment, investment accounting, repurchase agreements, wire transfer agreements, and collateral/depository agreements. No person may engage in an investment transaction except as provided under the terms of this policy and the procedures established by the investment officer. The investment officer shall be VOP Investment Policy (1/28/10) P2 EXHIBIT A responsible for all transactions undertaken and shall establish a system of controls to regulate the activities of subordinate officials. IV.AUTHORIZED FINANCIAL INSTITUTIONS, DEPOSITORIES,AND BROKER/DEALERS 1.Authorized Financial Institutions, Depositories, and Broker/Dealers A list will be maintained of financial institutions and depositories authorized to provide investment services. In addition, a list will be maintained of approved security broker/dealers selected by creditworthiness (e.g., a minimum capital requirement of $10,000,000 and at least five years of operation). These may include "primary" dealers or regional dealers that qualify under Securities and Exchange Commission (SEC) Rule 15C3-1 (uniform net capital rule). All financial institutions and broker/dealers who desire to become qualified for investment transactions must supply the following as appropriate: • Audited financial statements • Proof of National Association of Securities Dealers (NASD) certification (not applicable to Certificate of Deposit counterparties) • Proof of state registration • Proof of Federal Deposit Insurance Corp (FDIC) membership • Certification of having read and understood and agreeing to comply with the Village's investment policy. An annual review of the financial condition and registration of all qualified financial institutions and broker/dealers will be conducted by the investment officer V. SAFEKEEPING AND CUSTODY 1. Delivery vs. Payment All trades of marketable securities will be executed by delivery vs. payment (DVP) to ensure that securities are deposited in an eligible financial institution prior to the release of funds. 2. Safekeeping Securities will be held by an independent third-party custodian as evidenced by safekeeping receipts. 3. Internal Controls The investment officer is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the Village of Plainfield are protected from loss, theft or misuse. The internal control structure shall be designed to provide reasonable assurance that these objectives are met. The concept of reasonable assurance recognizes that (1) the cost of a control should not exceed the benefits likely to be derived and (2) the valuation of costs and benefits requires estimates and judgments by management. The internal controls structure shall address the following points: • Control of collusion • Separation of transaction authority from accounting and recordkeeping • Custodial safekeeping • Avoidance of physical delivery securities • Clear delegation of authority to subordinate staff members • Written confirmation of transactions for investments and wire transfers • Development of a wire transfer agreement with the lead bank and third-party custodian VOP Investment Policy(1/28/10) P3 EXHIBIT A Accordingly, the investment officer shall establish a process for an annual independent review by an external auditor to assure compliance with policies and procedures or alternatively, compliance should be assured through the Village of Plainfield annual independent audit. VI. SUITABLE AND AUTHORIZED INVESTMENTS 1. Investment Types Consistent with the GFOA Policy Statement on State and Local Laws Concerning Investment Practices, the following investments will be permitted by this policy and are those defined by state and local law where applicable: • U.S. Treasury obligations which carry the full faith and credit guarantee of the United States government and are considered to be the most secure instruments available; • U.S. government agency and instrumentality obligations that have a liquid market with a readily determinable market value; • Certificates of deposit and other evidences of deposit at financial institutions, • Bankers' acceptances; • Commercial paper, rated in the highest tier(e.g.,A-1, P-1, F-1, or D-1 or higher) by a nationally recognized rating agency; • Investment-grade obligations of state, provincial and local governments and public authorities; • Repurchase agreements whose underlying purchased securities consist of the aforementioned instruments; • Money market mutual funds regulated by the Securities and Exchange Commission and whose portfolios consist only of dollar-denominated securities; and • Local government investment pools either state-administered or developed through joint powers statutes and other intergovernmental agreement legislation. Direct investment in derivatives shall be prohibited. 2. Collateralization Where allowed by state law and in accordance with the GFOA Recommended Practices on the Collateralization of Public Deposits, full collateralization will be required on all demand deposit accounts, including checking accounts and non-negotiable certificates of deposit. 3. Repurchase Agreements Repurchase agreements shall be consistent with GFOA Recommended Practices on Repurchase Agreements. VII. INVESTMENT PARAMETERS 1. Diversification The investments shall be diversified by: • limiting investments to avoid overconcentration in securities from a specific issuer or business sector(excluding U.S.Treasury securities), • limiting investment in securities that have higher credit risks, • investing in securities with varying maturities, and • continuously investing a portion of the portfolio in readily available funds such as local government investment pools (LGIPs), money market funds or overnight repurchase agreements to ensure that appropriate liquidity is maintained in order to meet ongoing obligations. VOP Investment Policy(1/28/10) P4 EXHIBIT A 2. Maximum Maturities To the extent possible, the Village of Plainfield shall attempt to match its investments with anticipated cash flow requirements. Unless matched to a specific cash flow, the Village of Plainfield will not directly invest in securities maturing more than three (3)years from the date of purchase. Reserve funds and other funds with longer-term investment horizons may be invested in securities exceeding three (3) years if the maturities of such investments are made to coincide as nearly as practicable with the expected use of funds. Because of inherent difficulties in accurately forecasting cash flow requirements, a portion of the portfolio should be continuously invested in readily available funds such as local government investment pools, money market funds, or overnight repurchase agreements to ensure that appropriate liquidity is maintained to meet ongoing obligations. 3. Competitive Bids The investment officer shall obtain competitive bids from at least two brokers or financial institutions on all purchases of investment instruments purchased on the secondary market. VIII. REPORTING 1. Methods The investment officer shall prepare an investment report at least quarterly, including a management summary that provides an analysis of the status of the current investment portfolio and the individual transactions executed over the last quarter. This management summary will be prepared in a manner which will allow the Village of Plainfield to ascertain whether investment activities during the reporting period have conformed to the investment policy. The report should be provided to the Village Administrator and the Village Board.The report will include the following: • Listing of individual securities held at the end of the reporting period. • Realized and unrealized gains or losses resulting from appreciation or depreciation by listing the cost and market value of securities over one-year duration that are not intended to be held until maturity (in accordance with Governmental Accounting Standards Board (GASB) requirements), if applicable. • Average weighted yield to maturity of portfolio on investments as compared to applicable benchmarks. • Listing of investment by maturity date. • Percentage of the total portfolio which each type of investment represents. 2. Performance Standards The investment portfolio will be managed in accordance with the parameters specified within this policy. The portfolio should obtain a market average rate of return during a market/economic environment of stable interest rates. A series of appropriate benchmarks shall be established against which portfolio performance shall be compared on a regular basis.The benchmarks shall be reflective of the actual securities being purchased and risks undertaken, and the benchmarks shall have a similar weighted average maturity as the portfolio. 3. Marking to Market The market value of the portfolio shall be calculated at least quarterly and a statement of the market value of the portfolio shall be issued at least quarterly. This will ensure that review of the investment portfolio, in terms of value and price volatility, has been performed consistent with the GFOA VOP Investment Policy (1/28/10) P5 EXHIBIT A Recommended Practice on "Mark-to-Market Practices for State and Local Government Investment Portfolios and Investment Pools." In defining market value, considerations should be given to the GASB Statement 31 pronouncement. IX. INVESTMENT POLICY ADOPTION The Village Plainfield's investment policy shall be adopted by resolution of the Village Board of Trustees. This policy shall be reviewed on an annual basis by the Management Services Director and any modifications thereto must be approved by the Village Board of Trustees. VOP Investment Policy(1/28/10) P6 EXHIBIT B VILLAGE OF PLAINFIELD PURCHASING AUTHORITY POLICY PURPOSE The purpose of this policy is to provide general guidelines for purchasing activities and to expedite processing of Village purchases in a timely, efficient manner while assuring adequate internal controls and purchasing authority. This policy is designed to be a fluid document and will be modified from time to time to conform to changes in legislation, technology and actual practice. The Village Administrator, or his/her designee, shall be the final authority with regards to enforcement of any of the provisions of this policy. Failure to follow the procedures outlined in this policy may lead to disciplinary action in accordance with the provisions of the Village of Plainfield Personnel Manual.The Management Services Director will establish written procedures consistent with this purchasing policy and may amend the written procedures in a manner not inconsistent with this policy, local ordinances, or state statutes. CODE OF ETHICS All Village personnel engaged in purchasing and related activities shall conduct business dealings in a manner above reproach in every respect.Transactions relating to expenditure of public funds require the highest degree of public trust to protect the interests of the Village and the residents and businesses of Plainfield.Village employees shall strive to: • Ensure that public money is spent efficiently and effectively and in accordance with statutes, regulations and Village policies. • Maintain confidentiality at all times. • Not accept gifts or favors from current or potential suppliers, which might compromise the integrity of their purchasing function. • Specify generic descriptions of goods wherever possible in lieu of brand names when compiling specifications. • Never allow purchase orders for identical goods or services to be split or variations to Village Board approvals to be made in order to circumvent established policy. • Purchase without favor or prejudice. • Ensure that all potential suppliers are provided with adequate and identical information upon which to base their offer or quotation and that any subsequent information is made available to all bidders. • Establish and maintain procedures to ensure that fair and equal consideration is given to each offer or quotation received and selection is based upon the lowest total cost compliant bid. • Offer a prompt and courteous response to all inquiries from potential or existing suppliers. Effective 4/21/09—Revised 1/28/10; 4/7/2014 P1 EXHIBIT B CONFLICT OF INTEREST Except as may be disclosed to and permitted by the Village Board, it shall be a breach of ethical standards for any employee to participate directly or indirectly in the purchasing process when the employee knows that: • The employee is contemporaneously employed by a bidder, vendor or contractor involved in the procurement transaction; or • The employee,the employee's partner, or any member of the employee's immediate family holds a position with a bidder, offeror or contractor such as an officer, director, trustee, partner or the like, or is employed in a capacity involving personal and substantial participation in the procurement transaction, or owns or controls an interest in the company; or • The employee,the employee's partner, or any member of the employee's immediate family has a financial interest arising from the procurement transaction; or • The employee,the employee's partner, or any member of the employee's immediate family is negotiating, or has an arrangement concerning, prospective employment with a bidder,vendor or contractor. • The employee's immediate family shall be defined as a spouse, children, parents, brothers and sisters and any other person living in the same household as the employee. PURCHASING PROCEDURES The Village's policy is to obtain the most cost effective price available for purchases through competitive pricing. When quotes are required, pricing should be obtained from at least three vendors. When applicable, quotes from state purchasing programs or other similar forms of governmental pooled purchasing programs are encouraged. Purchases submitted without the required quotes require explanation of why quotes were not obtained (e.g. sole source, emergency, standardized vendor, etc.). The following guidelines will determine the process and approval levels required for purchases**: 1. Purchases up to $1,000.00 — Verbal quotes are sufficient. If the nature of the purchase is repetitive (i.e. monthly), pricing does not need to be obtained every time, but should be reviewed periodically to ensure that vendors are competitive. Purchases must be approved by the appropriate Department Head. 2. Purchases from $1,000.01 - $3,500.00 — Verbal quotes are required. Purchases must be approved by the appropriate Department Head. 3. Purchases from $3,500.01 - $7,500.00 — Authorization required by purchase order which must be approved by the Management Services Director. Written price quotes are required. 4. Purchases from $7,500.01 - $10,000.00 — Authorization required by purchase order which must be approved by the Village Administrator. Written price quotes are required. 5. Purchases of $10,000.01 or more — Must be approved by the Board of Trustees. The requestor must prepare a purchase order and attempt to obtain at least three (3) written price quotes. Purchases over $25,000 in most cases must be competitively bid in accordance with State law. Effective 4/21/09—Revised 1/28/10;4/7/2014 P2 EXHIBIT B For purposes of this policy, Department Heads are defined as: Building Official, Management Services Director, Police Chief, Public Works Director, Planning Director and IT Director. In the Department Heads' absence, the Department Head may designate a supervisor to approve purchases if necessary. The Management Services Department must be notified of this temporary designation along with the expiration date of this designation. Exceptions to the pricing requirements include single source vendors, repetitive purchases as discussed in Item 1, requirements by State statute or local ordinance, emergency purchases, contractual obligations, professional associations, or any other unusual purchasing situation. **The Plainfield Police Department authorizes purchasing through General Order Number 07- 215 as part of CALEA Standards, which is consistent with this Purchasing Authority Policy** INVOICE PROCESSING 1. Approved invoices are forwarded to the Management Services Department for inclusion in the Village's accounts payable process. Invoices should be submitted on a regular basis as received. The Management Services Department returns any incomplete invoices to their respective Departments for completion. Invoices are due to the Management Services Department by the Thursday following a Board Meeting for inclusion in the subsequent Board Meeting's Accounts Payable List. 2. All properly approved invoices are compiled by the Management Services Department on a Accounts Payable List for Board approval. The Accounts Payable List is included in the agenda packet for the Board Meeting. 3. Checks are then processed and mailed by the Management Services Department. PURCHASE ORDERS The policy intends to define the use of purchase orders. Departments will be required to file purchase orders only if one of the following criteria is met: 1. Purchase is over$3,500. 2.Vendor requires a purchase order in order to deliver the good or service and invoice for the item at a later date. 3.A significant time,period is anticipated between the ordering of an item and the payment of such item. Examples include capital projects which take place over several months and items ordered well in advance of delivery (i.e.vehicle). In order to expedite purchasing throughout the year, blanket purchase orders may also be prepared on a fiscal year basis if authorized by the Village Administrator. Blanket purchase orders are for vendors that require a purchase order amount for small items or per unit purchases. Effective 4/21/09—Revised 1/28/10; 4/7/2014 P3 EXHIBIT B EMERGENCY PURCHASES The Village Administrator shall authorize any emergency purchases or rental of equipment or services to effectively protect the public health and safety, protect property, and provide emergency assistance as necessary. The Village Administrator shall notify promptly with the Board of Trustees information detailing such emergency and the necessity of such action, together with an itemized account of all expenditures. Emergency expenditures would be handled through the first Accounts Payable List process immediately following the emergency expenditure. VILLAGE CREDIT CARD/STORE CREDIT Village-issued credit cards and store credit (or invoicing) accounts shall use such credit only for goods or services for the official business of the Village. Any items purchased and/or benefits produced from the use of the credit card or store credit charges will be the property of the Village of Plainfield.The credit card or store credit charges may not be used for personal or non- village use. Use of the Village-issued credit card and charges on store credit accounts are subject to all requirements of this Purchasing Authority Policy and is not to be used for means other than allowed by this policy. MANUAL CHECKS Occasionally, a need will arise for a check to be prepared manually outside of the normal Accounts Payable List process. These manual checks are needed when a check has to be remitted prior to the next Board Meeting Accounts Payable List process. The Village's policy is to keep requests for manual checks at a minimum. Common items for which manual checks can be prepared include 1) Payroll related checks; 2) Late notification of billings; 3) Unavoidable cash on delivery transactions; 4) Monthly utilities such as electric, telephone and gas: 5) Board approved contractual obligations requiring check; 6) Emergency purchase, and; 7) Situations which will significantly impair the Village financially or operationally if a check is not prepared. The Management Services Department will process manual checks no more frequently than weekly. The Management Services Director may authorize a non-emergency related check between weekly cycles in situations where immediate issuance of the check is needed to prevent an adverse impact on the Village. All manual checks are to be approved by the Department Head and Management Services Director. The Village Administrator may also approve manual checks. Departments will have to demonstrate that a manual check fits one of the above criteria. Once a check is prepared, reporting to the Board will take place at the following Village Board Meeting available via the Accounts Payable List process. Effective 4/21/09—Revised 1/28/10; 4/7/2014 P4 EXHIBIT B PETTY CASH The Village Board has approved two petty cash funds within the Village as follows: Management Services-$200; Police-$500. Responsibility for custody and safeguarding of each fund and for all fund disbursements rests with the appropriate Department Head. Petty cash is to be used to reimburse employees for Village expenses which the employee incurs up front and for small purchases which are handled most efficiently by utilizing petty cash. Employees should seek approval for petty cash reimbursement before expenditures are made. The following restrictions apply: 1. The maximum amount for Management Services petty cash reimbursement is $50. The maximum amount for Police petty cash reimbursement is$100. 2. Employee must prepare a petty cash voucher which is approved by the Department Head. 3. Receipts documenting the expense must be attached to the petty cash form. Disbursements from petty cash funds cannot be approved without receipts. In the case of mileage reimbursements, an approved travel expense report is sufficient in lieu of receipts. If an employee cannot provide a receipt. Alternative verification approved by the Department Head must be attached. Each department is responsible for balancing and reconciling its own petty cash fund. Departments replenish petty cash funds by submitting a request to the Management Services Department. The request is then processed through the Accounts Payable List procedure. The request for replenishment must be supported by petty cash vouchers/receipts which agree to the amount of the request. The fund must be at least 50% depleted for the Management Services Department to process a check to replenish. Effective 4/21/09—Revised 1/28/10; 4/7/2014 P5