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R-13-01 Amending Village of Lemont Statement of Financial PolicyRESOLUTION `- I `O I RESOLUTION AMENDING VILLAGE OF LEMONT STATEMENT OF FINANCIAL POLICY WHEREAS, on April 25, 1994, the Village of Lemont adopted Resolution 313 Approving. a Village of Lemont Statement of Financial Policy; and WHEREAS, on November 22, 1999, the Village of Lemont adopted Resolution R- 95 -99, Amending the Statement of Financial Policy to incorporate a Village Investment Policy. WHEREAS, the Village of Lemont desires to amend the Statement of Financial Policy. NOW, THEREFORE, BE IT RESOLVED by the President and Board of Trustees that the Amended Village of Lemont Statement of Financial Policy attached hereto as Exhibit A is hereby adopted. PASSED AND APPROVED BY THE PRESIDENT AND BOARD OF TRUSTEES OF THE VILLAGE OF LEMONT, COUNTIES OF COOK, WILL, AND DU PAGE, ILLINOIS, on this 26th day of February , 2001. John Benik Debby Blatzer Keith Latz Connie Markiewicz Richard Rimbo Mary Studebaker AYES NAYS PASSED ABSENT V ARLENE SMOLLEN, Village Clerk Approved by me this 26th day of February , 2001. n / Attest: .jyri A. . K,WASNESKI, Village P esident r' % &a/04401 CHARLENE SMOLLWN, Village Clerk Approved as to form: Village Attorney Date: VILLAGE OF LEMONY STATEMENT OF FINANCIAL POLICY Jean M. Nona Treasurer Adopted 4/94 Revised 11/99 Revised 2/01 ARTICLE 1 — BUDGETARY POLICY 1.1 REVENUE AND EXPENDITURE ESTIMATES In preparing the budget, all revenues shall be projected conservatively, and all expenditures shall be projected liberally. 1.2 FUNDING EXPENSES Any proposed spending program must also be accompanied by a revenue plan to fully meet the expenditure. As an alternative, new spending programs may be presented with an offsetting reduction of expenses in another program. 1.3 USE OF CARRYOVER FUNDS A previous year's carryover may be considered as revenue in a subsequent year, however, only to fund specific items which were budgeted but not purchased in the previous fiscal year. 1.4 FUND RESERVES Accumulated fund reserves may be used as revenues to fund projects, provided that they are either capital items, or an unforeseen expense specifically approved by the Village Board. As a goal, the Village Board will strive to maintain a six -month reserve in all funds. 1.5 BALANCED BUDGET Unless a true emergency occurs, the Village Board shall not pass a budget in which the proposed revenues are less than the proposed expenditures. If such an emergency occurs, the Board must understand the cash balance for the fund will be reduced, borrowing may have to occur, or revenues may have to be increased. ARTICLE H — FINANCIAL MANAGEMENT 2.1 DEBT POLICY The Village will not borrow money to meet current expenses. 2.2 BOND PAYBACK PERIOD When the Village finances capital projects by issuing bonds, it will pay back the bonds within a period not to exceed the expected useful live of the project. 1 2.3 USE OF THE WORKING CASH FUND The Village will use its Working Cash Fund only to avoid short term borrowing expenses and will not use it to fund programs. The Working Cash Fund will be paid back immediately when property taxes become available. 2.4 DISPOSAL OF VILLAGE PROPERTY The money from the sale of property or equipment will normally not be used to meet current operating expenses, but rather for the purchase and replacement of other equipment or other assets. 2.5 ACCOUNTING MANIPULATIONS The Village will avoid accounting manipulations, which postpone current expenses to future periods or accrue revenues from a future year to the current fiscal year to make current revenues appear higher. 2.6 LABOR CONTRACT FINANCIAL ANALYSIS The Village will avoid entering into long -term labor contracts without carefully costing out fringe benefits. Such costs include health insurance, vacation /holiday leave, sick leave, education provisions, etc. 2.7 MAINTENANCE OF MUNICIPAL ASSETS The Village will maintain its utilities, streets, buildings and other assets at a level adequate to protect the Village's capital investment and to minimize future maintenance and replacement costs. 2.8 USER FEES The Village will periodically recalculate the full costs of activities supported by user charges to identify the impact of inflation and other cost increases. User charges will be adjusted accordingly. 2.9 INSURANCE ANALYSIS The Village shall periodically investigate if insurance pools will save money as compared to alternative insurance coverage. The Village will also periodically investigate levels of coverage. 2.10 DEPOSIT OF FUNDS The Village and any persons representing the Village will remit to the Finance Department all monies received to be deposited in designated financial institutions in a timely manner. 2.11 REQUIRED SIGNATORS The Village will require all disbursements to be signed by two of the four authorized signators who have been approved via Village Board resolution. 2 2.12 INTERNAL FINANCIAL CONTROLS The Village will establish internal controls within the Finance Department, which will physically separate the functions of collection, deposition and reporting of monies received as much as possible. 2.13 PROCEDURES MANUAL The Finance Department shall maintain a Procedure Manual outlining procedures for the receiving of Village funds. 2.14 PURCHASING MANUAL The Finance Department shall monitor purchasing activity to insure it complies with requirements of the Purchasing Manual. 2.15 VILLAGE BOARD APPROVAL OF ACCOUNTS No accounts shall be opened or closed without Village Board approval via a resolution. ARTICLE 3 — INVESTMENT POLICY 3.1 POLICY AND SCOPE The Village shall invest available financial assets in a manner that will provide the highest return while conforming to all state and local statutes governing the investment of public funds. 3.2 PRUDENCE Investments shall be made with judgement and care considering the probable safety of capital as well as the probable income to be derived. The standard of prudence to be used shall be the "prudent person" standard and shall be applied in the context of managing an overall portfolio. 3.3 OBJECTIVE The primary objectives, in priority order, of the Village shall be: a. Safety — Investments of the Village shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. b. Liquidity — The portfolio shall remain sufficiently liquid to enable the Village to meet all reasonable operating requirements. c. Return on investments — The portfolio shall be designed to attain a market rate of return throughout the budgetary and economic cycles of the Village while meeting investment risk constraints and cash flow requirements of the Village. 3.4 DELEGATION OF AUTHORITY Management responsibility for the investment program is delegated to the Village Treasurer. 3 3.5 ETHICS AND CONFLICT OF INTEREST The Treasurer shall refrain from personal business activity that could conflict with proper execution of the investment program. 3.6 AUTHORIZED AND SUITABLE INVESTMENTS The Village is empowered by statute to invest in the following types of securities: a. U.S. government obligations, U.S. government agency obligations, and U.S. government instrumentality obligations, which have a liquid market with a readily determinable market value; b. Canadian government obligations (payable in local currency); c. Certificates of deposit and other evidences of deposit at financial institutions, commercial paperi d. Investment -grade obligations of state, provincial and local governments and public authorities; e. Repurchase agreements whose underlying purchased securities consist of the foregoing; f. Money markets and NOW accounts; g. Local government investment pools, either state - administered or through joint powers statutes and other intergovernmental agreement legislation. 3.7 AUTHORIZED LOCAL INVESTMENT INSTITUTIONS The Village will maintain a list of financial institutions authorized to provide investment services. The Village, when seeking investment opportunities not in a pool, (see 3.6g), may seek proposals from the banks and /or financial institutions located within its corporate limits. All financial institutions who desire to become qualified for investment transactions must supply audited financial statements. An authorized list of qualified financial institutions is attached as Exhibit A. 3.78 DELIVERY VS. PAYMENT All trades where applicable 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. Securities will be held by a third - party custodian as evidenced by safekeeping receipts. 3.8 COLLATERALIZATION Collateralization in the amount of 102% and held by an independent third party, shall be required on: a. Certificates of Deposit in an amount over the F.D.I.C. insured amount; and 4 b. Repurchase agreements. 3.9 DIVERSIFICATION The Village will diversify its investments by security type and institution. With the exception of U.S. Treasury securities and authorized pools, no more than 50% of the Village's total investment portfolio will be invested in a single security type or with a single financial institution. 3.10 MAXIMUM MATURITIES The Village will attempt to match its investments with anticipated cash flow requirements. Reserve funds may be invested for more than two years if the maturity of such investments are made to coincide as nearly as practicable with the expected use of the funds. Funds intended to be invested for periods longer than two years shall be brought before the Village Board for approval. 3.11 REPORTING The Treasurer shall provide to the Village Board, investment reports which provide a clear picture of the status of the current investment portfolio. The report should describe the portfolio in terms of investment securities, maturities, characteristics and other features. The report should explain the total mid -year investment return with budget expectation and /or other performance benchmarks. The report should include changes in the portfolio structure. ARTICLE IV — CAPITAL IMPROVEMENT FINANCING 4.1 CAPITAL IMPROVEMENT PROGRAM The Village shall maintain a five -year capital improvement plan and update it annually. It will acquire and replace all equipment and undertake all construction projects only in accordance with the plan. The Village will not propose any equipment purchase or project in the budget unless it has been anticipated in the capital improvement program. 4.2 CAPITAL PLANNING GRANTS Because state and federal grants tend to have local match requirements and may result in Tong -term financial commitments, the Village will seek grants to finance only those capital improvements that are consistent with the capital improvement plan. 4.3 UTILITY EXTENSION The developers or benefiting residents rather than the general public will pay the cost of extending utilities and improvements in new subdivisions, unless oversizing or some engineering issue warrants Village participation. 5 4.4 SPECIAL ASSESSMENT CONSIDERATION Special assessments or special service areas will be considered to make improvements in existing subdivisions. 6 Exhibit "A" To be distributed at meeting (February 26, 2001). RECOMMENDATION Staff recommends return of $7,250.00 (equal to 50 percent of the total fee) plus the remaining $4,167.02 in the escrow, making a total of $11,417.02. (The Village keeps the sum of $8,082.98). ATTACHMENTS (IF APPLICABLE) 1. Letter from Anthony Possidoni, Montalbano Homes. 2. Zoning Ordinance, Section XX (Fees). 3. Resolution Authorizing Partial Return of Fees. SPECIFIC VILLAGE BOARD ACTION REQUIRED The Board may direct staff, by appropriate motion, to waive, partially waive or deny rebate of the application fees.