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HomeMy WebLinkAboutResolution 23-66 Financial Policies Combined lfrResolution 23-66 Page 1 of 2 TOWN OF WESTLAKE RESOLUTION NO. 23-66 A RESOLUTION OF THE TOWN COUNCIL OF WESTLAKE APPROVING THE TOWN FINANCIAL POLICIES; AND TAKE APPROPRIATE ACTION. BE IT RESOLVED BY THE TOWN COUNCIL OF WESTLAKE: WHEREAS, the Town Council requested review of Financial Policies to be adopted annually, and according to all applicable legal requirements; and WHEREAS, the proposed policies includes an overall Financial Policy, Purchasing Authority, Prohibited Activities Policy, Contract Authority Policy, and Procurement Card Policy; and WHEREAS, the Town Council finds that the passage of this Resolution is in the best interest of the citizens of Westlake. NOW, THEREFORE, BE IT RESOLVED BY THE TOWN COUNCIL OF WESTLAKE: SECTION 1: That, all matters stated in the recitals hereinabove are found to be true and correct and are incorporated herein by reference as if copied in their entirety. SECTION 2: That the Town Council hereby adopts the Financial Policy as “Exhibit A”. SECTION 3: If any portion of this Resolution shall, for any reason, be declared invalid by any court of competent jurisdiction, such invalidity shall not affect the remaining provisions hereof and the Council hereby determines that it would have adopted this Resolution without the invalid provision. SECTION 4: That this resolution shall become effective from and after its date of passage. PASSED AND APPROVED ON THIS 9th DAY OF OCTOBER, 2023. Sean Kilbride, President ATTEST: Resolution 23-66 Page 2 of 2 _____________________ Amy M. Piukana, Board Secretary APPROVED AS TO FORM: Stan Lowery, Town Attorney Revised 10/2023 Page 1 of 3 Contracts Authority Outline 1. Overview & Purpose 2. Par�cipants 3. Authorized Contracts 4. Spending Thresholds 5. Administra�on of Contracts Overview & Purpose As part of the direc�ve to engage in procurement prac�ces that benefit the Town and Academy, engaging in various contracts is necessary to obtain the best value of goods and services. Implicit authority, which is the assump�on by a vendor that a Town/Academy representa�ve has an ability to engage but whom is not specifically allowed by Town/Academy policies to do so, is not authorized for any employee and is grounds for discipline, up to and including termina�on. In order to ensure vendors ac�ng in good faith are compensated for goods or services provided, it is necessary to outline the signatory authority granted to specific par�es for entering into, upda�ng terms, renewing, or cancelling contracts. Par�cipants Council/Board – elected officials responsible for direc�ng staff to purchase goods and services to facilitate the mission and ac�vi�es of the Town/Academy Department Head – appointed director of a Town department or Academy func�on and any person authorized to act on their behalf Head of School – Employee with authority to direct procurement ac�vi�es on behalf of the Academy Town Manager – Employee with authority to direct procurement ac�vi�es on behalf of the Town Town Secretary – Employee tasked with the records collec�on and management of executed contracts Authorized Contracts Contracts, as discussed in this policy, are agreements to purchase goods or services. The Town/Academy only considers writen and executed contracts, properly authorized, to be valid; verbal agreements are not considered a binding contract and therefore are not allowed. While all procurement, including contractual purchases, must adhere to the Town/Academy’s purchasing policies, not all purchases require a contract to proceed; purchases allowed to be made without a contract will be excluded from this policy. As a public en�ty, the Town and Academy are allowed to enter into the following types of contracts: Revised 10/2023 Page 2 of 3 Direct purchase of goods or services contract: Standard contract in which a price has been directly nego�ated with Westlake for a vendor to provide goods or services at a mutually agreed upon price and schedule. Not-to-exceed contract: Agreement between Westlake and a vendor to provide specific goods or services but that the total price, final quan�ty or quality, or con�ngent needs are unknown at the �me of agreement Interlocal agreement (ILA): Council/Board-approved agreement between Westlake and another public en�ty subject to the same procurement statutes to provide goods or services directly to Westlake. Vendor Contract through ILA: Council/Board-approved agreement between Westlake and another public en�ty subject to the same procurement statutes that allows Westlake to purchase goods or services at a rate nego�ated by the other public en�ty. The vendor must agree to uphold the same terms nego�ated. Coopera�ve purchasing agreements: Council/Board-approved agreement to par�cipate in an establish forum which leverages purchasing power to nego�ate prices on behalf of its members Engagement leters: Agreement between Westlake and a professional service provider, as defined by statute, to provide a professional service Purchase Order: Purchase orders are legally considered a contract between Westlake and a vendor for the goods or services listed therein Change Order: Formal amendment to an original contract or purchase order Any other contract type must be presented to the Town Manager/Head of School and Director of Finance for review prior to execu�on. The Town Manager/Head of School may authorize or prohibit a contract type in the best interest of Westlake. This authoriza�on is specific to the contract type or format only; all applicable financial policies must s�ll be followed. Signatory Thresholds Authorized signatories apply to all allowable contract types. It is the responsibility of the employee administering the contract to adhere to the process. Contract signatory authority aligns with purchasing threshold amounts listed in Purchasing Authority (07.11) and is a separate considera�on from budgetary approval. The thresholds listed below are on the basis of total contract, including op�onal extensions. Less than $3,000.00 –Department Heads/Principals have the authority to sign a contract for budgeted goods or services for which their department is the administrator $3,000.00 to $19,999.99 – Head of School/Town Manager has the authority to sign a contract for budgeted goods or services $20,000.00 - $49,999.99 – Head of School will be the signatory for Academy contracts, once the Board has voted to approve the contract and delegated that authority; Town Manager will be the signatory for Town contracts, once the Council has voted to approve the contract and delegated that authority $50,000.00 and above – Council/Board approval will list the person authorized to execute the contract; this is usually the Town Manager or Head of School Revised 10/2023 Page 3 of 3 Contracts for construc�on or construc�on-related ac�vi�es, such as project management, regardless of amount, must be signed by the Town Manager, unless otherwise directed by the Council/Board. Budget approval is not the same as contract signatory authority. If purchases are made via contract, the above thresholds apply. Administra�on of Contracts Contract administra�on and maintenance are the responsibility of the contract administrator. This includes Council/Board approval, as necessary. All contracts must be reviewed by the organiza�on Atorney, Town Manager, Head of School, and Director of Finance, as appropriate, regardless of amount or method. All executed contracts must be provided to the Town Secretary for official records. New Contracts Contract being entered to with original terms must adhere to all procurement methods and purchasing thresholds. Changing the Contract Terms Should the need arise to change the terms of a contract during the contract period, the administrator must work with the vendor to determine the best course of ac�on. Contracts or vendors may allow for amendments, change orders, or appendices to revise the terms of the original contract. When that is not possible, Westlake must adhere to the cancella�on terms in the contract and enter into a new contract. New contracts may require administrators to start the procurement process from the beginning, depending on the scope change included. Cancelling Contracts All contract cancella�ons must be reviewed with the Atorney. Westlake must include terms for cancelling contracts in any executed contract. These can be nego�ated with the vendor, when applicable and appropriate, but should allow for a no�ce period. Revised 10/2023 Page 1 of 5 Financial Policies Outline 1. Policy Statement 2. Scope 3. Basis of Accoun�ng & Budge�ng 4. Annual Budget 5. Fund Balance Policies 6. Debt Service 7. Financial Repor�ng 8. Approval Process Policy Statement The Town of Westlake/Westlake Academy has a fiduciary responsibility to its ci�zens and stakeholders to accurately account for the public funds it is tasked with managing. The financial policies are established in order to provide guidance on the appropriate accoun�ng, planning, and use of all funds and to ensure fiscal sustainability and stewardship. These policies are reviewed and updated periodically by the Town Manager, Head of School, and Director of Finance, in accordance with direc�on from the Town Council/Board of Trustees. This Financial Policy, along with any other policies enac�ng or defining authority granted, will be presented to the Council/Board for approval of any changes. Scope The Financial Policies within this policy apply to both the Town and the Academy. This policy includes the basis of accoun�ng and budge�ng, annual budget responsibili�es, debt management, and financial repor�ng. Policies and procedures rela�ng to the administra�ve func�ons in each of these areas are the responsibility of staff for review and updates. Basis of Accoun�ng & Budge�ng Basis of Accoun�ng The Governmental Accoun�ng Standards Board (GASB) is the accepted standard-se�ng body for establishing governmental accoun�ng and financial repor�ng principles applicable to state and local governments. The accoun�ng and repor�ng policies conform to these generally accepted accoun�ng principles (GAAP). The Academy is addi�onally subject to Texas Educa�on Authority (TEA) accoun�ng structure and financial repor�ng. The Town and Academy are organized and operate on the basis of funds and account groups. Each fund is a separate accoun�ng en�ty with a self-balancing set of accounts, which are segregated for the purpose of execu�ng specified ac�vi�es, in accordance with regula�ons, restric�ons, and limita�ons. Governmental fund types (General Fund, Debt Service, Special Revenue, Academy ) use the flow of current financial resources focus of measurement and the modified accrual basis of accoun�ng, with Revised 10/2023 Page 2 of 5 revenues recorded when measurable and available, and expenditures budgeted in the period in which the liability is incurred. Revenues are considered available when they are collectable within the current period or soon enough therea�er to pay liabili�es of the current period. Expenditures are recognized when the liability is incurred, if measurable. Proprietary funds (U�lity Fund, Internal Service Funds) are accounted for using the economic resources focus of measurement and the accrual basis of accoun�ng, with revenues recorded when earned and expenses recorded when a liability is incurred. Basis of Budge�ng Both the Town and Academy prepare budgets in a manner consistent with generally accepted accoun�ng principles (GAAP) for their funds. Revenues and expenditures are budgeted based on the expected flow of funds. Revenues are budgeted in the period they are expected to be available. Expenditures are budgeted when the service is expected to be provided. The basis of accoun�ng and budge�ng are essen�ally the same. Annual Budget The Town and Academy are both required to prepare an annual opera�ng budget that must be approved by the governing body prior to the beginning of its fiscal year. The budgets must define, on a fund and func�on basis, the expected revenues and expenditures for the year. The budgets must include presenta�on on the financial ac�vi�es for the most recently closed fiscal year, the current adopted and revised/amended budgets, and the planned budget for the upcoming fiscal year. Addi�onally, debt obliga�ons in aggregate and the principal and interest requirements reflec�ng the ou�low of funds for the fiscal year must be included. Both the Town and Academy are required to present a balanced budget, defined as an opera�ng fiscal plan in which resources (current revenues plus available fund balance) are projected to equal or exceed planned expenditures on both the fund and aggregate basis. Council/Board must approve the use of fund balance when current revenues are not expected to be available or sufficient for expenditures in the current period. Council/Board approve the number of full-�me equivalent (FTE) posi�ons, along with associated dollars, as part of the annual budget approval. Any changes to the FTE count and/or budget, including changes to pay rate and structure, must be presented and approved by Council/Board at an open mee�ng. Staff is not authorized to hire unbudgeted posi�ons. Budgetary control for appropria�ons is at the department/func�on level for the General Funds and at the fund level for all other funds. Town The Town of Westlake has a fiscal year beginning October 1 and ending September 30. The Council’s role in development is to provide staff with strategic priori�es and expected service levels for the upcoming fiscal year. Staff is responsible for developing the details of the spending plan and presen�ng to Council for review and approval. As a municipality with taxing authority, the Council is responsible for adop�ng an ad valorem tax rate. The tax rate can only be approved in support of the annual opera�ng budget. Taxes are levied based on Revised 10/2023 Page 3 of 5 taxable values, as determined by the appropriate appraisal district. The adopted tax rate must be set in two (2) por�ons: maintenance and opera�ons (M&O), which fund opera�ons in the General Fund; and interest and sinking (I&S), which is set each year to ensure the principal and interest requirements for the fiscal year are met. Academy Westlake Academy, beginning a�er fiscal year 2022-2023, operates with a July 1 to June 30 fiscal year. The Board’s role in development is to provide staff with strategic priori�es and desired enrollment for the upcoming fiscal year. Staff is responsible for developing the details of the spending plan and presen�ng to the Board for review and approval. The Academy does not have any taxing authority and is therefore exempt from statutes or processes rela�ng to the adop�on of a tax rate and imposi�on of a tax levy. The Academy does have addi�onal requirements from TEA in order to receive state funds. Procedures to account for and report on those funds are considered administra�ve. Budget Amendments During the course of normal opera�ons, it may be necessary to make changes to the adopted budget. This could occur when receipts or costs exceed or significantly fall short of the amounts budgeted. The Council/Board delegates the authority to adjust the budgets, at the department/func�on or fund level in accordance the budgetary control, to the Town Manager and Head of School for their respec�ve budgets. Adjustments for purchases must adhere to the appropriate purchasing authority policy. Budget adjustments may not increase or decrease the appropria�on amounts approved within the adopted budget. When addi�onal appropria�ons are required for revenues or expenditures above or significantly below the amounts adopted in the budget, staff must prepare a proposal to amend the adopted budget and Council/Board must approve the amendment. Budget amendments may be presented as a course of administra�ve reconcilia�on for items previously approved by Council/Board. Fund Balance Policies Any use of fund balance must be approved by the Town Council/Board of Trustees. General Fund – Town The Town shall strive to maintain the General Fund unassigned minimum fund balance at, or in excess of, 180 days of opera�ons, as defined by the projected expenditures for the upcoming year. Use of fund balance requires Council/Board approval. General Fund – Academy The Academy shall strive to maintain the General Fund unassigned minimum fund balance at, or in excess of, 45 days of opera�ons, as defined by the projected expenditures for the upcoming year. Special Revenue Funds Fund balances within each special revenue fund are considered restricted for that purpose defined by the fund. Due to applicable regula�ons, restric�ons, or limita�ons, it may be necessary to collect Revised 10/2023 Page 4 of 5 revenues and expend funds in different periods, as iden�fied needs dictate. Expenditures can only be budgeted when current revenues plus fund balance allow. Proprietary Funds Retained earnings within the enterprise funds must be posi�ve and meet bond covenants and coverage requirements, as applicable. Fund balance in enterprise funds contain contribu�ons, which are considered non-spendable. Retained earnings within internal services funds must be posi�ve and are considered restricted for the purpose of the fund. Debt Service Funds Debt service funds operate on the current basis of budge�ng and do not have a fund balance requirement. Due to the nature of debt obliga�ons, all debt is backed by the full faith and credit of the Town. Debt Service The Town is an authorized issuer of debt obliga�ons, but the Academy is not. Debt may be issued by the Town on behalf of the Academy in accordance with policy. Debt may be periodically issued for capital improvements, including construc�on, acquisi�on, or improvements of long-term assets, or to refinance exis�ng debt obliga�ons in a manner benefi�ng the Town. Debt may not be issued for the purpose of financing current opera�ons, nor may any debt proceeds be u�lized for that purpose. Debt financing includes general obliga�on bonds, cer�ficates of obliga�ons, revenue bonds, tax notes, lease agreements, and other instruments permited under Texas law. The Town will consider the expected life of the asset, expected cash flow to complete the project, and ongoing costs prior to issuing debt. Instruments will be chosen on this basis and incorporate analysis of available cash, repayment structure, and the exper�se of the Financial Advisor. All issuances must be approved by the Council/Board. Staff and the Financial Advisor shall monitor the municipal bond market for opportuni�es to obtain interest savings by refunding outstanding debt. As a general rule, the present value savings of a par�cular refunding should exceed 3.5% of the refunded maturi�es. State statutes do not prescribe a legal debt limit. The Town Council/Board of Trustees may choose to impose a limit, which would be voted upon and included in a future update of this policy. The Town is required to conform to all covenants of its debt obliga�ons. Financial Repor�ng Financial statements for the Town and Academy shall include all ac�vi�es for the en�ty exercises oversight responsibili�es, defined as the ability to significantly influence opera�ons, appoint management, and fiscal interdependency. Both the Town and Academy are required to prepare financial and investment reports to be presented to the Council/Board quarterly. Quarterly reports will include comparisons of actual ac�vi�es against budgets, narra�ve context, and the performance of investments for the quarter. Revised 10/2023 Page 5 of 5 Both the Town and Academy are required to prepare an annual comprehensive financial report (ACFR) with the engaged audit firm for the prior fiscal year. Due to the difference in the fiscal years, the Academy will complete their audit prior to the Town each year. The Town’s ACFR will include the Westlake Academy as a major func�on. Approval Process This Financial Policy, along with the policies on Purchasing Authority, Prohibited/Restricted Ac�vi�es, Contracts Authority, and Procurement Cards, will be presented and discussed with the Council/Board at least annually as part of the budget process. Ini�al presenta�on and discussion may occur with the Finance Commitee. Changes suggested will be incorporated and presented to the Council/Board at the appropriate budget workshop. Final updated policies will be approved via resolu�on at the same mee�ng as the annual opera�ng budget. Revised 10/2023 Page 1 of 3 Procurement Card Administration Outline 1. Overview & Purpose 2. Par�cipants 3. Authoriza�on & Issuance 4. Limits 5. Responsibili�es 6. Authorized Purchases 7. Restric�ons/Prohibi�ons Overview & Purpose Procurement Cards (p-cards) are an authorized payment mechanism to facilitate rou�ne purchasing ac�vi�es in lieu of the accounts payable process. The purpose of p-cards is to allow flexibility to carry out necessary opera�ons in a more �me-efficient manner. Use of p-cards does not negate appropriate planning for purchases. P-card use is subject to all purchasing thresholds and methods, in addi�on to the guidance within this policy. Par�cipants Council/Board – elected officials responsible for direc�ng staff to purchase goods and services to facilitate the mission and ac�vi�es of the Town/Academy Employee – person tasked with the administra�on of ordering, receiving/implemen�ng, and issuing authorized payments for goods and services Vendor – business en�ty or individual that seeks to have or has a contract to provide goods or services to the Town/Academy; could be a consultant, contractor, company, or individual provider Authoriza�on & Issuance The Town Manager and Head of School can authorize the issuance of a p-card to an employee within their respec�ve organiza�on, based on the employee’s role and con�ngent upon the Director of Finance’s verifica�on. Department Heads/Principals are able to request p-cards for themselves and staff. Town Manager, Head of School, Director of Finance, and Department Heads/Principals all have the authority to request a card be closed or denied to an employee in wri�ng. Issuance for a new card requires a completed and signed form. Limits Similar to a personal credit card, p-cards are subject to credit limits. The Town/Academy has account limits, which are separate from the card and transac�on limits below. Credit limits are based on the actual spending needs of the cardholder, as defined by their job du�es. Employee – Employees with a p-card will have a limit of $3,000.00 per month. Individual transac�ons are limited to $2,999.99. Revised 10/2023 Page 2 of 3 Department Head/Principal – Department Heads and Principals may have occasion to make purchases on behalf of a larger group and will therefore have a limit of $5,000.00 per month. Individual transac�ons are limited to $2,999.99. Town Manager/Head of School – The Town Manager and Head of School may have occasion to make purchases for their organiza�ons and will therefore have a limit of $10,000.00 per month. Individual transac�ons are limited to $2,999.99. Travel Coordinator – Westlake Academy designates one administra�ve employee, usually an Administra�ve Assistant, as the Travel Coordinator. That employee is responsible for the booking of travel arrangements, like flights and hotels, which typically require a credit card. Due to the �ming of travel, larger groups generally are booked together, therefore, the limit will be $10,000.00 per month. Individual transac�ons are limited to $2,999.99. Emergency Response – Emergency purchases may be necessary to facilitate the safety of life and property within the Town limits, including disaster or medical responses and the maintenance of the water and sewer system. To ensure con�nued opera�ons, the limit will be $10,000.00 per month with no individual transac�on limit. In instances when the standard limits are not adequate, the cardholder can request a temporary credit limit. Temporary increases must have a documented business explana�on and cannot extend beyond 30 days. Responsibili�es The Finance department is responsible for the issuance, upda�ng, and general administra�on of p-card use. Administra�on includes reconcilia�on, recording to the general ledger, payment of statement balances, and training. Finance will offer annual training to all card holders. First �me recipients of cards are required to par�cipate in training prior to the release of the card for use. The cardholder is responsible for the custody, safety, and appropriate use of their card. Cards are not be loaned to or used by anyone else. The cardholder is responsible for turning in itemized receipts each month with an explana�on of the business purpose and the budgetary account within the credit card portal. These updates must occur by the 10th day each month for the statement covering the month immediately preceding. The Town/Academy operates using a three strikes rule to ensure fiduciary responsibility, adequate documenta�on, and proper oversight. The strikes are accumulated over a rolling 12-month period, beginning with the first instance. Any misuse or failure to adhere to p-card policy can result in a strike; this includes failure to turn in itemized receipts, making purchases not authorized by policy, and not reconciling statements. Instance one will result in an email no�fying the card holder of the issue, with their supervisor copied. A response is required to explain and document the occurrence. The card holder will be offered op�onal training. Revised 10/2023 Page 3 of 3 Instance two will result in an email no�fying the card holder of the issue, with their supervisor copied. The limit will be reduced to $0.00 un�l the card holder completes mandatory training to review the policy and process. Instance three will result in a formal write-up and the p-card will be turned into Finance for a period of up to one-year. In the case of abuse or fraud, the cardholder will be required to immediately surrender their card and will be disciplined, including and up to termina�on. Fraud will be reported to the appropriate authori�es. Authorized Purchases P-cards are a tool u�lized by the Town/Academy for ease of execu�ng opera�ons. The preferred uses for p-cards include: Tangible items under $3,000.00. Purchases of $3,000.00 or more must adhere to other purchasing rules, which are beter monitored outside of the p-card process. Travel expenses including hotels, flights, meals, and individual registra�ons. Meals would not be allowed when the traveling employee requests per diem. Registra�on for groups of atendees should go through the accounts payable process. Rental cars are invoiced directly by Enterprise Rental Cars. Catering or food services for events or mee�ngs. These orders must be pre-approved and budgeted. Restric�ons/Prohibi�ons Certain purchases are not authorized via p-card. In addi�on to the merchant code restric�ons setup by the p-card issuer, PNC, the Town/Academy recognizes its responsibility to safeguard its financial assets and reduce the opportunity for misuse or fraud. Purchase of goods or services that cannot be received within the statement period are not allowed. The purchase of alcohol is not permited on a p-card, unless expressly authorized for resale at special events. Purchase of goods or services for one’s direct benefit are not allowed. Purchases made to circumvent purchasing laws or policy are not allowed. Purchases made from any employee, official, or a party related to them are not allowed. Automa�cally recurring charges must be preapproved, budgeted, and must adhere to all applicable purchasing thresholds. Purchases rela�ng to an outside grant are generally not allowed via p-card. Grants require significant documenta�on and proper oversight and therefore should go through the regular requisi�on-purchase order-invoice process. Revised 10/2023 Page 1 of 2 Prohibited or Restricted Activities Outline 1. Overview & Purpose 2. Par�cipants 3. Prohibited Purchasing Ac�vi�es 4. Restricted Purchasing Ac�vi�es 5. Approval & Update Process Overview & Purpose As a General Law municipality within the State of Texas, the Town of Westlake and its component units are subject to compliance with Local Government Code procurement laws and Texas Educa�on Code for Academy purchasing. In addi�on to the restric�ons established therein, addi�onal prohibi�ons or restric�ons ins�tuted by Council/Board are necessary to safeguard public funds and trust. Par�cipants Council/Board – elected officials responsible for direc�ng staff to purchase goods and services to facilitate the mission and ac�vi�es of the Town/Academy Employee – person tasked with the administra�on of ordering, receiving/implemen�ng, and issuing authorized payments for goods and services Vendor – business en�ty or individual that seeks to have or has a contract to provide goods or services to the Town/Academy; could be a consultant, contractor, company, or individual provider Prohibited Purchasing Ac�vi�es Due to the Town’s responsibility of managing public funds, several ac�ons are prohibited by law, policy, or ethics. Prohibited ac�vi�es include: • Purchasing goods or services for personal benefit. • Purchasing goods or services under the guise of sole source, but which the LGC and legal opinion do not expressly agree on the classifica�on. • Separate, sequen�al, or component purchases that avoid compe��ve bidding requirements, deviate from purchasing authority limits, or circumvent budgetary controls, even if uninten�onal. • Purchasing goods or services from a vendor or company that provides any kind of favor or item of value that might influence or appear to influence the purchasing decision. • Disclosing confiden�al or proprietary informa�on from solicita�ons to another party or using the informa�on for personal gain. • Verbally or in wri�ng authorizing the purchase of goods or services that you do not have the express authority to authorize. This includes signing contracts for budgeted items. In addi�on to the ac�vi�es above, any purchases viola�ng applicable federal or state law or the Town’s purchasing policies are expressly prohibited. Revised 10/2023 Page 2 of 2 Restricted Purchasing Ac�vi�es Restricted purchasing ac�vi�es include those that are usually prohibited but may have rare instances in which authoriza�on could be granted. Among the known restricted ac�vi�es are: • Purchasing alcohol. For special events in which resale of alcohol is an authorized ac�vity, the purchase of alcohol may be allowed. Express permission must be granted by the Town Council to include alcohol sales at the event. • Unbudgeted or unfunded purchases are generally not allowed. In the case of emergency purchases, as defined by LGC and the Purchasing Authority Policy (Policy 07.11), excep�ons may be made to ensure the safety of life or property. Other unbudgeted or unfunded purchases should be handled using the process outlined in Purchasing Authority (Policy 07.11). • Purchasing goods or services from a vendor or company from which an elected official or employee has a personal stake in without disclosing the conflict of interest and recusing oneself from all purchasing ac�vi�es related to the vendor or company. Should a purchasing scenario arise that is not expressly allowed through statute or policy, consulta�on with the Town Manager, Head of School, and Director of Finance are required prior to engaging a vendor. Any purchases must s�ll adhere to all other policies and thresholds, including Council/Board approval, as appropriate. Approval & Update Process The Town Manager and Head of School, in coordina�on with the Director of Finance, are responsible for monitoring applicable statute and regula�ons and revising the procurement policies, at least annually. They have the authority to further prohibit or restrict the ac�vi�es listed here in the course of the du�es to ensure the responsible expenditure of public funds. Any permanent changes will be included in the policy, which will be updated as needed and presented to the Council/Board. Addi�onally, the Council/Board has the authority to prohibit or restrict the authorized ac�vi�es of the Town Manager and Head of School. Revised 10/2023 Page 1 of 3 Purchasing Authority Outline 1. Overview & Purpose 2. Par�cipants 3. Authorized Spending 4. Spending Thresholds 5. Approval & Update Process Overview & Purpose As a General Law municipality within the State of Texas, the Town of Westlake and its component units are subject to compliance with Local Government Code procurement laws and applicable Texas Educa�on Code. In lieu of a voter-approved Town Charter and within compliance of the Academy Charter, the Council/Board has determined that enac�ng addi�onal layers of purchasing authority for staff is necessary to maintain good budgetary controls and financial stewardship for public funds. Par�cipants Council/Board – elected officials responsible for direc�ng staff to purchase goods and services to facilitate the mission and ac�vi�es of the Town/Academy Department Head – appointed director of a Town department or Academy func�on and any person authorized to act on their behalf Employee – person tasked with the administra�on of ordering, receiving/implemen�ng, and issuing authorized payments for goods and services Head of School – Employee with authority to direct procurement ac�vi�es on behalf of the Academy Town Manager – Employee with authority to direct procurement ac�vi�es on behalf of the Town Authorized Spending To be considered “authorized spending,” the purchase must have been budgeted in the same fiscal year as the order is placed, the price must be within 5% of the budgeted cost, and all due diligence to meet applicable laws and procedures must be met. In instances where the purchase is not budgeted or the amount budgeted is not sufficient, Department Heads or above (depending on the dollar value and business purpose as outlined below) must authorize the purchase. Spending Thresholds Authorized spending thresholds apply to all allowable purchasing and payment methods. It is the responsibility of the employee making the purchase to adhere to the correct method. Revised 10/2023 Page 2 of 3 Budgeted Purchases Less than $3,000.00 – Employees designated by their Department Heads/Principals have the authority to approve purchases or spend up to $3,000.00 in a single purchase $3,000.00 to $19,999.99 – Head of School has the authority to approve purchases for Westlake Academy per WA Resolu�on 23-14, approved 6/22/2023; Town Manager has the authority to approve purchases for the Town of Westlake per Resolu�on. $20,000.00 and above – Head of School/Town Manager must obtain approval by the Council/Board during an open mee�ng Unbudgeted Purchases Less than $3,000.00 – Department Heads/Principals have the authority to approve purchases in support of their department or school’s mission if there is capacity to reduce expenditures in an equal amount exists within the same opera�ng budget; these adjustments to the spending plan will be reported to the Council/Board within the next quarterly financial report. $3,000.00 - $19,999.99 – Head of School/Town Manager has the authority to approve purchases in support of their organiza�on’s mission if there is capacity to reduce expenditures in an equal amount within the same opera�ng budget; Council/Board must be no�fied, as soon as prac�cable, in wri�ng of the purchase and corresponding expenditure reduc�on, with a detailed explana�on and presenta�on of off-se�ng balances at the next posted open mee�ng. $20,000.00 and above – Head of School/Town Manager must request approval from the Council/Board in an open mee�ng; the request must include details on the corresponding reduc�on in expenditures or the purchase must qualify for use of fund balance per policy When considering off-se�ng balances to facilitate an unbudgeted purchase, staff will look for poten�al cuts first in the account. If funds are not available in the account, staff will consider the department ’s/func�on’s non-personnel budget for cuts. If funds are s�ll not available, the department will coordinate with the Town Manager/Head of School and the Director of Finance for poten�al cuts in a different department/func�on. If funds are s�ll not available, staff will need to prepare a budget amendment for Council/Board approval that outlines the purchase and why it qualifies for the use of fund balance. Emergency Purchases Emergency purchases – Emergency purchases are by defini�on unbudgeted and generally require funds prior to budget approval by Council/Board. Emergency purchases are hereby defined as follows, based on Sec. 252.022 General Exemp�ons: (1) a procurement made because of a public calamity that requires the immediate appropria�on of money to relieve the necessity of the municipality's residents or to preserve the property of the municipality; and (2) a procurement necessary to preserve or protect the public health or safety of the municipality's residents; and Revised 10/2023 Page 3 of 3 (3) a procurement necessary because of unforeseen damage to public machinery, equipment, or other property which requires urgent repair or replacement to maintain cri�cal opera�ons. Staff will present emergency purchases for ra�fica�on at the next regularly scheduled Council/Board mee�ng. When emergency purchases cannot be absorbed within exis�ng budgets, these purchases will be included in a budget amendment. Approval & Update Process The Town Council/Board of Trustees has the authority to change the authority thresholds under $50,000.00, as they determine to be in the best interest of the Town/Academy. These thresholds shall be reviewed annually as part of the approval of the Procurement Manual. The Finance Subcommitee will meet to review the details of the updates or advise of any changes prior to the Council/Board receiving the informa�on in the form of a report. Once the report has been presented sa�sfactorily, the Council/Board will vote to approve the Procurement Manual in whole. Council/Board reserves the right to make changes outside the annual review and approval process. It is expected that revisions may need to occur due to staff turnover or legisla�ve changes.