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Adopt the Financial Policy Guidelines.
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Staff:
Department:
Maurice Jones, Town Manager
Manager's Office
Amy Oland, Director
Business Management Department
Overview: Financial policies are central to a strategic, long-term approach to financial management. Established financial policies are beneficial to have in place for a multitude of purposes including: the formalization of the Town's financial management practices, the recommendation of the Government Finance Officers Association (GFOA), and the usefulness when bond rating agencies evaluate the Town's creditworthiness in upcoming bond issuances.
The topic of the Town's need to adopt financial policies was discussed on the following dates:
o Council retreat on January 25, 2019 - Davenport & Company, Town's financial advisors, presented on the Town's credit rating, current and future debt portfolio, and recommended that the Town consider adopting financial policies for debt, fund balance reserves, cash management and investment strategies, and Other Post Employment Benefit (OPEB) pre-funding strategies.
o Budget work session on March 4, 2019 - Town Manager and Business Management Director presented the draft Financial Policy Guidelines for Council review.
o Council Business Meeting on April 24, 2019 - Business Management Director presented additional detail on each of the draft policies statements and the recommended strategies and measures under each policy to receive Council feedback.
Policy Measure Flexibility: The financial policy strategies, measures and targets were designed using the quantitative scoring ranges from the Town's bond rating agencies, Standard & Poor's and Moody's, and by comparing the Town with the other NC AAA peer comparative agency ratings. The measures were evaluated against the Town's current debt portfolio and the Town's 5-year forecasted debt portfolio. The recommended measures use a very conservative approach to ensure the Town will remain in compliance ev...
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