HomeMy WebLinkAbout2015-0721D Adopting Cash Reserve PolicyTROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1
ORDER NO. 2015-0721D
ADOPTING CASH RESERVE POLICY
THE STATE OF TEXAS §
COUNTIES OF DENTON AND TARRANT §
WHEREAS, the Board of Directors of Trophy Club Municipal Utility District No.
1 ("District") desires to adopt guidelines for the management of the District's cash funds for
the purpose of identifying the source and methods of maintaining a sufficient cash reserve
fund and specifying the target balance; and
WHEREAS, the objective of the Policy is to enhance the District's financial position
and provide clear intent for all interested parties through the establishment and maintenance
of a cash reserve fund to cover potential critical losses and secure the District's financial
position in a catastrophic event;
NOW, THEREFORE, BE IT ORDERED BY THE BOARD OF DIRECTORS OF
TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO.1, THAT:
Section 1. The matters and facts recited in the preamble to this Order are found to be true
and correct and the same are incorporated herein as a part of this Order.
Section 2. The Board has reviewed the Cash Reserve Policy and finds and declares that
the Cash Reserve Policy in the form attached hereto is hereby approved and adopted, and
such Policy shall replace and supersede in its entirety any prior Cash Reserve Policy of the
District.
Section 3. The General Manager is authorized to do all things necessary and proper to
evidence the Board's adoption of this Order and to carry out the intent hereof. Upon
execution, a permanent copy of this Order shall be filed in the permanent records of the
District.
ADOPTED, PASSED AND APPROVED by the Board of Directors of Trophy Club
Municipal Utility District No. 1 this 21st day ofJuly, 2015.
Trophy Club Municipal Utility District No . 1
Order No . 2015-0721 D
Cash Investment Policy
CERTIFICATE OF ORDER NO. 2015-0721D
ADOPTING CASH RESERVE POLICY
THE STATE OF TEXAS §
COUNTIES OF DENTON AND TARRANT §
I, the.undersigned District Secretary of Trophy Club Municipal Utility District No. ·1 (the
"District"), hereby certify as follows:
1. The Board convened in regular session, open to the public, on the 2Pt day of July,
2015, at the regular meeting place thereof, and the roll was called of the members of the Board,
to-wit:
Jim Moss
Neil Twomey
Kevin Carr
Jim Thomas
Jim Hase
President
Vice President
Secretary /Treasurer
Director
Director
All members of the Board were present except the following, , thus constituting
a quorum. Whereupon, among other business, the following was transacted at such meeting:
ORDER NO. 2015-0721D ADOPTING CASH RESERVE POLICY
was duly introduced for the consideration of the Board . It was then duly moved and seconded that
such Order be adopted; and, after due discussion, such motion, carrying with it the adoption of
said Order, prevailed and carried by the following vote:
AYES: .2_ NOES: 0
2. A true, full, and correct copy of the aforesaid Order adopted at the meeting
described in the above and foregoing paragraph is attached to and follows this Certificate; such
Order has been duly recorded in said Board's minutes of such meeting; the above and foregoing
paragraph is a true, full, and correct excerpt from the Board's minutes of such meeting pertaining
to the adoption of such Order; the persons named in the above and foregoing paragraph are the
duly chosen, qualified, and acting officers and members of the Board as indicated therein; each of
the officers and members of the Board was duly and sufficiently notified officially and personally,
in advance of the time, place, and purpose of such meeting and that such Order would be
introduced and considered for adoption at such meeting and each of such officers and members
consented, in advance, to the holding of such meeting for such purpose; such meeting was open to
the public, as required by law, and public notice of the time, place and p~~~odf1 pf, such meeting
was given as required by Chapter 551, Government Code and Section 4~~~i.¥1J'iJjf~r Code,
as amended. ~~+"( ••••••• u..,~ ~0 .• -<,~RR~~· C' ~
SIGNED AND SEALED the 21st July, 2015. ~~ _.~,_ /'•. ~~ ........... 0 Q•y-::: •.-o·r:::. = :z c: ::: = .w z. = -t:::.•O ....,. ::
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Trophy Club Municipal Utility District No. 1
Order No. 2015-07210
Cash Investment Policy
TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1
CASH RESERVE POLICY
July 21, 2015
POLICY STATEMENT
A key element of prudent financial planning is to ensure that sufficient funding is available
for current operating, capital, and debt service needs. Additionally, fiscal responsibility
requires anticipating the likelihood of, and preparing for, unforeseen events. Trophy Club
Municipal Utility District No. 1 (the "District") will at all times strive to have sufficient
funding available to meet its operating, capital, and debt service obligations. Reserve
funding will be established and maintained to ensure continued delivery of water and sewer
services and to enable the District to meet all financial obligations. Sufficient reserve funds
will be maintained to provide adequate cash flow in a situation of unforeseen events resulting
in local natural disasters, economic uncertainties or other financial hardships, and to fund
unexpected system failure.
This cash reserve will be available to address one-time emergencies and unanticipated
expenditure requirements. The Board ofDirectors may withdraw funds from the cash reserve
only when in its sole discretion, the Board determines at least one of the following:
a. there is the need for an emergency expenditure
b. there is an unexpected revenue reduction that would result in a negative General
Fund ending fund balance.
Should the Board determine a need to draw from the reserve fund, cash reserves will begin
to be restored from operating revenues as soon as possible.
The cash reserve goal will be to fund at a level of 50% of the highest fiscal year operating
budget over the previous three years. The District will endeavor to reach 50% in a five year
period starting October 1, 2015 and the amount to be set aside each year will be established
through board action at a meeting open to the public.
To ensure proper funding of the reserve, the General Manager of the District will review on
a monthly basis the current unallocated/unrestricted cash status of the District and will make
the determination as to the amount to be allocated to the cash reserve.
Maintaining the cash reserve at an appropriate level is a prudent, ongoing business process
that consists of an inclusive assessment and application ofvarious sources of revenue. When
water and sewer rates are set, the Board shall account for any deficiency in the cash reserve
fund and ensure rates are set appropriately to obtain needed funds to meet the reserve goal.
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Trophy Club Municipal Utility District No . 1
Order No. 2015-0721 D
Cash Investment Policy