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Home My WebLink AboutRes 26-25 Financial Policies FY 2027Revised 9/2026 Page 1 of 6 Financial Policies Outline 1. Policy Statement 2. Scope 3. Basis of Accounting & Budgeting 4. Annual Budget 5. Fund Balance Policies 6. Debt Service 7. Treasury Management 8. Financial Reporting 9. Approval Process Policy Statement The Town of Westlake/Westlake Academy has a ﬁduciary responsibility to its citizens 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 accounting, 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 direction from the Town Council/Board of Trustees. This Financial Policy, along with any other policies enacting or deﬁning authority granted, will be presented to the Council/Board for approval of any changes. Scope The Financial Policies within this policy apply wholly to the Town; this policy does not generally apply to the Academy, except as speciﬁcally notated. The Head of School is responsible for developing and enforcing separate ﬁnancial policies, internal controls, and the risk environment for Westlake Academy. This policy includes the basis of accounting and budgeting, annual budget responsibilities, debt management, treasury management, and ﬁnancial reporting. Policies and procedures relating to the administrative functions in each of these areas are the responsibility of staﬀ for review and updates. Basis of Accounting & Budgeting Basis of Accounting The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and ﬁnancial reporting principles applicable to state and local governments. The accounting and reporting policies conform to these generally accepted accounting principles (GAAP). The Academy is subject to additional requirements, as outlined in their separate ﬁnancial policies. The Town is organized and operates on the basis of funds and account groups. Each fund is a separate accounting entity with a self-balancing set of accounts, which are segregated for the purpose of executing speciﬁed activities, in accordance with regulations, restrictions, and limitations. Revised 9/2026 Page 2 of 6 Governmental fund types (General Fund, Debt Service, Special Revenue, Academy, and Capital) use the ﬂow of current ﬁnancial resources focus of measurement and the modiﬁed accrual basis of accounting, with revenues recorded when measurable and available, and expenditures budgeted in the period in which the liability is incurred. Revenues are recognized when available and considered available when they are collectable within the current period. Expenditures are recognized when the liability is incurred, if measurable. Proprietary funds (Utility Fund, Internal Service Funds) are accounted for using the economic resources focus of measurement and the accrual basis of accounting, with revenues recorded when earned and expenses recorded when a liability is incurred. Basis of Budgeting The Town prepares budgets in a manner consistent with generally accepted accounting 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 accounting and budgeting are essentially the same. Annual Budget The Town is required to prepare an annual operating budget that must be approved by the governing body prior to the beginning of its ﬁscal year. The budget must deﬁne, on a fund basis, the expected revenues and expenditures for the year. The budget must include presentation on the ﬁnancial activities for the most recently closed ﬁscal year, the current adopted and revised/amended budgets, and the planned budget for the upcoming ﬁscal year. Additionally, debt obligations in aggregate and the principal and interest requirements reﬂecting the outflow of funds for the ﬁscal year must be included. The Town is required to present a balanced budget, deﬁned as an operating 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 must approve the use of fund balance when current revenues are not expected to be available or suﬃcient for expenditures in the current period. The Town’s budget, adopted annually, will include appropriations for regular municipal maintenance and operations within the Annual Operating Budget and will appropriate the ﬁrst year of a simultaneously presented ﬁve-year Capital Improvement Plan (CIP). The CIP may include spending for additions or capital improvements of Academy facilities; these items will be designated appropriately on the CIP schedule, presented to Council as part of the budget adoption process, and included within the Town’s budget. Facility maintenance is the responsibility of the Head of School, in coordination with the Town Manager as appropriate, and will be budgeted with the Academy’s operating budget. Council approves the number of full-time equivalent (FTE) positions, 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 at an open meeting. Staﬀ is not authorized to hire unbudgeted positions. Budgetary control for appropriations is at the department level for the General Fund and at the fund level for all other funds. Revised 9/2026 Page 3 of 6 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 priorities and expected service levels for the upcoming ﬁscal year. Staﬀ is responsible for developing the details of the spending plan and presenting to Council for review and approval. As a municipality with taxing authority, the Council is responsible for adopting an ad valorem tax rate. The tax rate can only be approved in support of the annual operating budget. Taxes are levied based on taxable values, as determined by the appropriate appraisal district. The adopted tax rate must be set in two (2) portions: maintenance and operations (M&O), which fund operations 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 operates with a July 1 to June 30 ﬁscal year. Academy staﬀ is responsible for developing the details of the spending plan and presenting to the Board for review and approval. The Academy budget includes appropriations suﬃcient for their normal operations and maintenance. The Academy does not have any authority to appropriate or manage Town budget or funds. The Academy is able to request funding related to capital improvements as part of the Town’s annual budget process, and requests will be discussed with Council prior to appropriation. The Academy does not have any taxing authority and is therefore exempt from statutes or processes relating to the adoption of a tax rate and imposition of a tax levy. The Academy does have additional requirements from Texas Education Agency (TEA) in order to receive state funds. Procedures to account for and report on those funds are considered administrative and the responsibility of the Head of School. Budget Amendments During the course of a ﬁscal year, 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 delegates the authority to adjust the budgets, at the appropriate budgetary control, to the Town Manager using budget transfers. The Town’s budgetary control is at the fund level. Adjustments for purchases must adhere to the appropriate purchasing authority policy. Budget adjustments may not increase or decrease the appropriation amounts approved within the adopted budget. When additional appropriations 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 must approve the amendment. Budget amendments may be presented as a course of administrative reconciliation for items previously approved by Council. Fund Balance Policies The fund balance policies for the Town are evaluated annually . Any use of fund balance must be approved by the Town Council. Revised 9/2026 Page 4 of 6 General Fund – Town The Town shall strive to maintain the General Fund unassigned minimum fund balance at, or in excess of, 240 days of operations, as deﬁned by the projected expenditures for the upcoming year. Use of fund balance requires Council approval. After each ﬁscal year, staﬀ will analyze the amount of sales tax funds received over the budgeted amount and transfer that from the General Fund to either an internal service fund or a capital fund, as dictated by need. Special Revenue Funds Fund balances within each special revenue fund are considered restricted for that purpose deﬁned by the fund. Due to applicable regulations, restrictions, or limitations, it may be necessary to collect revenues and expend funds in diﬀerent periods, as identiﬁed needs dictate. Expenditures can only be budgeted when current revenues plus fund balance allow. Each special revenue fund shall strive to maintain a minimum fund balance at, or in excess of, 25% of the next year’s projected expenditures. Proprietary Funds Retained earnings within the enterprise funds must be positive and meet bond covenants and coverage requirements, as applicable. Fund balance in enterprise funds contain contributions, which are considered non-spendable. The Utility Fund shall strive to maintain a minimum fund balance of 25% of next year’s expenditures. Retained earnings within internal service funds must be positive and are considered restricted for the purpose of the fund. There is not a minimum fund balance requirement for internal service funds. Capital Funds Fund balances within the capital fund represent dollars available to fund major projects or purchases. There is not a minimum fund balance requirement, however, Council may require funds be available prior to approval of a project or purchase. Fund balances may be made up of bond proceeds, donations, interest earnings, intergovernmental transfers, or sales tax funds received above budget in the General Fund (as determined at the year end balance). Debt Service Funds Debt service funds operate on the current basis of budgeting and have a minimum fund balance requirement equal to one-twelfth of the annual principal and interest requirements. Due to the nature of debt obligations, all debt is backed by the full faith and credit of the Town. Debt Service The Town is an authorized issuer of debt obligations, 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 construction, acquisition, or improvements of long-term assets, or to reﬁnance existing debt obligations in a manner beneﬁting the Town. Debt may not be issued for the purpose of ﬁnancing current operations, nor may any debt proceeds be utilized for that purpose. Debt ﬁnancing includes general obligation bonds, certiﬁcates of obligations, revenue bonds, tax notes, lease agreements, and other instruments permitted under Texas law. The Town will consider the Revised 9/2026 Page 5 of 6 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 expertise of the designated Financial Advisor. All issuances must be approved by the Council. Staﬀ and the Financial Advisor shall monitor the municipal bond market for opportunities to obtain interest savings by refunding outstanding debt. As a general rule, the present value savings of a particular refunding should exceed 3.5% of the refunded maturities. State statutes do not prescribe a legal debt limit. The Town Council 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 obligations. More information is codiﬁed in the Debt Management Policy. Treasury Management Treasury management in the context of this policy is deﬁned as the oversight and operations of ﬁnancial accounts for cash and liquidity purposes. The Town is the registered entity with the Internal Revenue Service; the Academy is legally considered a DBA of the Town and shares the entity identiﬁcation number (EIN). Both organizations are required to adhere to all applicable laws, regulations, and best practices when selecting and administering ﬁnancial accounts that require providing an EIN. The Head of School is responsible for treasury accounts solely supporting normal Academy operations and maintenance. The Director of Finance will be given inquiry and reporting access to all systems, accounts, or portals operating under the shared EIN, but does not have the authority or responsibility to oversee and administer accounts operating under separate, Academy-only contracts or agreements. In instances of a shared contract or agreement providing services to both organizations and including accounts operating for the sole beneﬁt of the Academy, the Head of School will be responsible for the internal control and risk environment for the separate Academy accounts; the Director of Finance remains the designated contract administrator for shared contracts and agreements in coordination with the Town Manager Head of School, as appropriate. The Director of Finance is responsible for the remaining treasury management activities. The Town will maintain a depository relationship to facilitate normal cash management. Depositories will be selected from respondents to appropriately advertised requests for applications (RFAs) at least every ﬁve (5) years. Selection will be based on advertised evaluation criteria and consultation with the Finance Committee. Administration of all Town depository accounts, including access, roles, and relationship management, is considered administrative and delegated to the Director of Finance. The Town has elected to utilize procurement cards to facilitate speciﬁc purchasing activities, as outlined in the procurement card policy. Procurement card corporate accounts will be subject to evaluation and public bidding requirements at least every ﬁve (5) years. Selection will be based on advertised evaluation criteria and consultation with the Finance Committee. Administration of the corporate procurement card account, including cardholder issuance, access, roles, and relationship management, is considered administrative and delegated to the Director of Finance. Revised 9/2026 Page 6 of 6 Investment accounts will be opened and administered in accordance with the investment policy approved annually by Council. The Director of Finance, as the primary designated Investment Oﬃcer, is responsible for the administration of all investment accounts, including access and compliance. Financial Reporting Financial statements for the Town shall include all activities for which the entity exercises oversight responsibilities, deﬁned as the ability to signiﬁcantly inﬂuence operations, appoint management, and ﬁscal interdependency. The Town is required to prepare ﬁnancial and investment reports to be presented to the Council quarterly. Quarterly reports will include comparisons of actual activities against budgets, narrative context, and the performance of investments for the quarter. For the purpose of compliance with the Public Funds Investment Act, the quarterly investment report provided by the Town will include all Academy accounts opened under the shared entity identiﬁcation number and subject to potential interest earnings. The Town is 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 function. Approval Process This Financial Policy, along with the policies on Purchasing Authority, Prohibited/Restricted Activities, Contracts Authority, Procurement Cards, Debt Management, and Investment Policy will be presented and discussed with the Council at least annually as part of the budget process. Initial presentation and discussion may occur with the Finance Committee. Changes suggested will be incorporated and presented to the Council at the appropriate budget workshop. Final updated policies will be approved via resolution at the same meeting as the annual operating budget. Revised 9/2026 Page 1 of 4 Purchasing Authority Outline 1. Overview & Purpose 2. Participants 3. Authorized Spending 4. Spending Thresholds 5. Competitive Bidding 6. 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 Education Code. In lieu of a voter-approved Town Charter, the Council has determined that enacting additional layers of purchasing authority for staﬀ is necessary to maintain good budgetary controls and ﬁnancial stewardship for public funds. This policy applies wholly to Town procurement functions, which may include spending that beneﬁts the Academy. The Town Manager has the authority to direct spending within the Town’s budget; the Head of School does not have the authority to direct any spending within the Town’s budget, including the use of reserves, donations, or bond proceeds deposited within the Town’s depository. Therefore, instances may arise in which purchasing activities that beneﬁt the Academy are subject to the Town’s purchasing policy. Participants Council – elected oﬃcials responsible for directing staﬀ to purchase goods and services to facilitate the mission and activities of Westlake through the approval of budgets, signatory and spending authority, and purchases over prescribed levels Town Manager – Employee with authority to direct procurement activities within the Town’s operating budget and capital improvement plan Head of School – Employee with authority to direct procurement activities within the Academy’s operating budget Department Head – appointed director of a Town department and any person authorized to act on their behalf Employee – person tasked with the administration of ordering, receiving/implementing, and issuing authorized payments for goods and services 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. Revised 9/2026 Page 2 of 4 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. Budgeted Purchases Less than $3,000.00 – Employees designated by their Department Heads have the authority to approve purchases or spend up to $3,000.00 in a single purchase $3,000.00 to $99,999,99 – the Town Manager have the authority to approve purchases for the Town and Academy, respectively $100,000.00 and above – Council must approve the purchase either implicitly via budget adoption for routine, overhead purchases or explicitly for contracts, capital spending, or bid awards to adhere to competitive bid requirements and promote transparency Unbudgeted Purchases Less than $3,000.00 – Department Heads have the authority to approve purchases in support of their department ’s mission if there is capacity to reduce expenditures in an equal amount exists within the same operating budget; these adjustments to the spending plan will be reported to the Council within the next quarterly ﬁnancial report. $3,000.00 to $49,999.99 – Town Manager has the authority to approve purchases in support of their organization’s mission if there is capacity to reduce expenditures in an equal amount within the same operating budget; Council must be notiﬁed, as soon as practicable, in writing of the purchase and corresponding expenditure reduction, with a detailed explanation and presentation of oﬀ-setting balances at the next posted open meeting. $50,000.00 and above –Town Manager must request approval from the Council in an open meeting; the request must include details on the corresponding reduction in expenditures or the purchase must qualify for use of fund balance per policy. $100,000.00 and above – staﬀ must follow competitive bid requirements, as outlined by Texas Local Government Code; Council must take action to award or reject responses at a public meeting; the purchase will generally be included in a budget amendment When considering oﬀ-setting balances to facilitate an unbudgeted purchase, staﬀ will look for potential cuts ﬁrst in the account. If funds are not available in the account, staﬀ will consider the department ’s non-personnel budget for cuts. If funds are still not available, the department will coordinate with the Town Manager and the Director of Finance for potential cuts in a diﬀerent department. If funds are still not available, staﬀ will need to prepare a budget amendment for Council approval that outlines the purchase and why it qualiﬁes for the use of fund balance. Revised 9/2026 Page 3 of 4 Emergency Purchases Emergency purchases – Emergency purchases are by deﬁnition unbudgeted and generally require funds prior to budget approval by Council. Emergency purchases are hereby deﬁned as follows, based on Sec. 252.022 General Exemptions: (1) a procurement made because of a public calamity that requires the immediate appropriation 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 (3) a procurement necessary because of unforeseen damage to public machinery, equipment, or other property which requires urgent repair or replacement to maintain critical operations. Staﬀ will present emergency purchases for ratiﬁcation at the next regularly scheduled Council meeting. When emergency purchases cannot be absorbed within existing budgets, these purchases will be included in a budget amendment. Competitive Bidding The Town adheres to Local Government Code Section 252 for competitive bidding requirements for contracts over the amount of $100,000.00. For purchases that meet the criteria requiring competitive bidding and are not exempted by any other State statute (such as interlocal/cooperative agreements, emergency purchases, or professional services), the Town will issue requests for proposals (RFPs), requests for qualiﬁcations (RFQs), or requests for applications (RFAs), as appropriate to the required good/service. The Town must deﬁne evaluation criteria, establish a panel to evaluate all responses, appropriately advertise solicitations for responses, and ask Council to accept or reject responses with a formal action. In instances where the Town will be the contract administrator or Town funds will be used (typically relating to capital improvements or outlay) for Academy purposes, the Town may engage the Head of School to inform the solicitation packet and participate on the evaluation panel. For solicitations for goods/services relating to facility maintenance but funded by the Academy’s operating budget, the Academy will include the Town Manager or their representative in the review of the solicitation packet and the evaluation panel. This process may be deﬁned in a future memorandum of understanding; in the instance of a Council approved MOU, the MOU will be the prevailing guidance. Approval & Update Process The Town Council has the authority to change the authority thresholds under $100,000.00, as they determine to be in the best interest of the Town. These thresholds shall be reviewed annually as part of the approval of the Financial Policies. The Finance Committee may meet to review the details of the updates or advise of any changes prior to the Council receiving the information in the form of a report. Once the report has been presented satisfactorily, the Council will vote to approve the Financial Policies in whole. Revised 9/2026 Page 4 of 4 Council 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 legislative changes. Revised 9/2026 Page 1 of 2 Prohibited or Restricted Activities Outline 1. Overview & Purpose 2. Participants 3. Prohibited Purchasing Activities 4. Restricted Purchasing Activities 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 (LGC) procurement laws. In addition to the restrictions established therein, additional prohibitions or restrictions instituted by Council are necessary to safeguard public funds and trust. This policy applies wholly to the Town. The Head of School is responsible for developing and enforcing separate ﬁnancial policies, internal controls, and the risk environment for Westlake Academy, which may include additional or more speciﬁcally deﬁned prohibited or restricted activities. Participants Council – elected oﬃcials responsible for directing staﬀ to purchase goods and services to facilitate the mission and activities of the Town Employee – person tasked with the administration of ordering, receiving/implementing, and issuing authorized payments for goods and services Vendor – business entity or individual that seeks to have or has a contract to provide goods or services to the Town; could be a consultant, contractor, company, or individual provider Prohibited Purchasing Activities Due to the Town’s responsibility of managing public funds, several actions are prohibited by law, policy, or ethics. Prohibited activities 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 classiﬁcation. • Separate, sequential, or component purchases that avoid competitive bidding requirements, deviate from purchasing authority limits, or circumvent budgetary controls, even if unintentional. • 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 conﬁdential or proprietary information from solicitations to another party or using the information for personal gain. Revised 9/2026 Page 2 of 2 • Verbally or in writing 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 addition to the activities above, any purchases violating applicable federal or state law or the Town’s purchasing policies are expressly prohibited. Restricted Purchasing Activities Restricted purchasing activities include those that are usually prohibited but may have rare instances in which authorization could be granted. Among the known restricted activities are: • Purchasing alcohol. For special events in which resale of alcohol is an authorized activity, 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), exceptions 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 activities related to the vendor or company. This would only be allowed in rare situations where the goods or services being provided are considered sole source. Should a purchasing scenario arise that is not expressly allowed through statute or policy, consultation with the Town Manager and Director of Finance are required prior to engaging a vendor. Any purchases must still adhere to all other policies and thresholds, including Council approval, as appropriate. Approval & Update Process The Town Manager, in coordination with the Director of Finance, is responsible for monitoring applicable statute and regulations and revising the procurement policies, at least annually. They have the authority to further prohibit or restrict the activities listed here in the course of the duties 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. Additionally, the Council has the authority to prohibit or restrict the authorized activities of the Town Manager. Revised 9/2026 Page 1 of 4 Contracts Authority Outline 1. Overview & Purpose 2. Participants 3. Authorized Contracts 4. Spending Thresholds 5. Administration of Contracts Overview & Purpose As part of the directive to engage in procurement practices 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 assumption by a vendor that a Town/Academy representative 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 termination. In order to ensure vendors acting in good faith are compensated for goods or services provided, it is necessary to outline the signatory authority granted to speciﬁc parties for entering into, updating terms, renewing, or cancelling contracts. This policy applies wholly to the Town. The Head of School is responsible for developing and enforcing separate ﬁnancial policies, internal controls, and the risk environment for Westlake Academy. In instances where both entities receive economic beneﬁt from the same contract, the Town Manager or their designee is the default primary contract administrator. Participants Council – elected oﬃcials responsible for directing staﬀ to purchase goods and services to facilitate the mission and activities of the Town/Academy Town Manager – Employee with authority to direct procurement activities within the Town’s operating budget and capital improvement plan Head of School – Employee with authority to direct procurement activities within the Academy’s operating budget Department Head – appointed director of a Town department and any person authorized to act on their behalf Head of School – Employee with authority to direct procurement activities within the Academy’s operating budget Town Secretary – Employee tasked with the records collection and management of executed contracts Revised 9/2026 Page 2 of 4 Authorized Contracts Contracts, as discussed in this policy, are agreements to purchase goods or services. The Town only considers written 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’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 entity, the Town and Academy are allowed to enter into the following types of contracts: Direct purchase of goods or services contract: Standard contract in which a price has been directly negotiated 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 quantity or quality, or contingent needs are unknown at the time of agreement. Interlocal agreement (ILA): Council-approved agreement between Westlake and another public entity subject to the same procurement statutes to provide goods or services directly to Westlake. Vendor Contract through ILA: Council-approved agreement between Westlake and another public entity subject to the same procurement statutes that allows Westlake to purchase goods or services at a rate negotiated by the other public entity. The vendor must agree to uphold the same terms negotiated. Cooperative purchasing agreements: Council-approved agreement to participate in an established forum which leverages purchasing power to negotiate prices on behalf of its members. Engagement letters: 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 and Director of Finance for review prior to execution. The Town Manager may authorize or prohibit a contract type in the best interests of Westlake. This authorization is speciﬁc to the contract type or format only; all applicable ﬁnancial policies must still 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 consideration from budgetary approval. The thresholds listed below are on the basis of total contract, including optional extensions. Revised 9/2026 Page 3 of 4 Less than $3,000.00 –Department Heads have the authority to sign a contract for budgeted goods or services for which their department is the administrator $3,000.00 to $49,999.99 –Town Manager will be the signatory for Town contracts and is authorized to execute Academy contracts for capital projects or expenses within the Town’s budget $50,000.00 and above – Council approval will list the person authorized to execute the contract; this is usually the Town Manager or appropriate Department Head Contracts for capital spending, construction, or construction-related activities, such as project management, regardless of amount, must be signed by the Town Manager, unless otherwise directed by the Council. With any contracts approved by the Council, an appropriate designee will be listed as the authorized signer; the designee may diﬀer from the above persons outlined, if appropriate. Budget approval is not the same as contract signatory authority. If purchases are made via contract, the above thresholds apply. Administration of Contracts Contract administration and maintenance are the responsibility of the contract administrator. This includes Council approval, as necessary. All contracts must be reviewed by the Town Attorney, Town Manager, and/or 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 action. 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 cancellation 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 cancellations must be reviewed with the Attorney. Westlake must include terms for cancelling contracts in any executed contract. These can be negotiated with the vendor, when applicable and appropriate, but should allow for a notice period. Shared Contracts Contracts allowing for goods/services to be provided to both the Town and the Academy present the opportunity to maximize purchasing power. The Town and Academy agree to be good stewards of the contract and avoid negative operational impacts on one another. For all contracts utilizing Town funds, including reserves, donations, or bond proceeds, the Town is the contract administrator and said contracts are subject to the applicable Town ﬁnancial policy. The Revised 9/2026 Page 4 of 4 Academy is the contract administrator only for contracts for which they are the sole beneﬁciary and costs are paid from the Academy’s annual operating budget. For contracts entered into prior to 7/1/2026, contracts have mutually agreed upon cost share allocations and funding sources. In an instance where either organization wishes to discontinue or alter the contract, that party is required to submit an explanation of the operational and budgetary impacts to the Council/Board and have the other organization accept said impacts. If a contract cannot be modiﬁed by the vendor or cancelled without penalty, the party wishing to terminate the contract is responsible for any additional costs. For contracts entered into on or after 7/1/2026, both organizations must have the Council/Board approve the contract. The contract must be presented to the Council/Board explicitly naming the contract administrator, funding source, cost share allocation, and payment or reimbursement plan. Revised 9/2026 Page 1 of 4 Procurement Card Administration Outline 1. Overview & Purpose 2. Participants 3. Authorization & Issuance 4. Limits 5. Responsibilities 6. Authorized Purchases 7. Restrictions/Prohibitions Overview & Purpose Procurement Cards (p-cards) are an authorized payment mechanism to facilitate routine purchasing activities in lieu of the accounts payable process. The purpose of p-cards is to allow ﬂexibility to carry out necessary operations in a more time-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 addition to the guidance within this policy. This policy applies wholly to the Town and does not generally apply to the Academy, except as speciﬁcally notated. The Head of School is responsible for developing and enforcing separate ﬁnancial policies, internal controls, and the risk environment for Westlake Academy. Participants Council – elected oﬃcials responsible for directing staﬀ to purchase goods and services to facilitate the mission and activities of the Westlake Employee – person tasked with the administration of ordering, receiving/implementing, and issuing authorized payments for goods and services Vendor – business entity or individual that seeks to have or has a contract to provide goods or services to the Town; could be a consultant, contractor, company, or individual provider Authorization & Issuance The Town and Academy are not required to utilize the same procurement card program nor share a contract for procurement card services. In the instance of the existing shared contract shared, the Director of Finance will be the contract administrator and will retain program administration capabilities for both organizations but does not have the authority or responsibility of administering the Academy program. The Head of School will practically function as the administrator responsible for Academy’s program for daily and routine administrative tasks due to their responsibility for the internal control environment. In the instance where programs are separately contracted, the Head of School will be the contract administrator and program administrator for the Academy program, and the Director of Finance will be the contract administrator and program administrator for the Town program; the Director of Finance will be granted inquiry and reporting access to the Academy program. Revised 9/2026 Page 2 of 4 The Town’s procurement card program is subject to competitive bidding requirements and will be evaluated at least every ﬁve (5) years. Selection will be based on advertised evaluation criteria and consultation with the Finance Committee. Administration of the corporate procurement card account, including cardholder issuance, access, roles, and relationship management, is considered administrative and delegated to the Director of Finance. The Town Manager can authorize the issuance of a p-card to an employee within their respective organization, based on the employee’s role and contingent upon the Director of Finance’s veriﬁcation. Department Heads are able to request p-cards for themselves and staﬀ. Town Manager, Director of Finance, and Department Heads all have the authority to request a card be closed or denied to an employee in writing. 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 has account limits, which are separate from the card and transaction limits below. Credit limits are based on the actual spending needs of the cardholder, as deﬁned by their job duties. Employee – Employees with a p-card will have a limit of $3,000.00 per month. Individual transactions are limited to $2,999.99. Department Head – Department Heads may have occasion to make purchases on behalf of a larger group and will therefore have a limit of $5,000.00 per month. Town Manager – The Town Manager may have occasion to make purchases for the organization and will therefore have a limit of $10,000.00 per month. 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 continued operations, the limit will be $10,000.00 per month with no individual transaction 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 explanation and cannot extend beyond 30 days. Responsibilities The Finance department is responsible for the issuance, updating, and general administration of p-card use. Administration includes reconciliation, recording to the general ledger, payment of statement balances, and training. Finance will oﬀer annual training to all card holders. First time recipients of cards are required to participate 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 explanation of the business purpose and the budgetary account within the credit card portal. These updates and Revised 9/2026 Page 3 of 4 subsequent approvals by the appropriate supervisor must occur by the 10th day each month for the statement covering the month immediately preceding. The Town operates using a three strikes rule to ensure ﬁduciary responsibility, adequate documentation, 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 notifying 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 optional training. Instance two will result in an email notifying the card holder of the issue, with their supervisor copied. The limit will be reduced to $0.00 until the card holder completes mandatory training to review the policy and process and all outstanding items have been resolved. 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 termination. Fraud will be reported to the appropriate authorities. Cards must be returned to the Finance Department by the employee when exchanging expired or compromised cards, voluntary surrender, or separation. Authorized Purchases P-cards are a tool utilized by the Town for ease of executing operations. 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 better monitored outside of the p-card process. Travel expenses including hotels, ﬂights, meals, and individual registrations. Meals would not be allowed when the traveling employee requests per diem. Registration for groups of attendees should go through the accounts payable process. Rental cars are invoiced directly by Enterprise Rental Cars. Please refer to the Travel/Training Policy for further guidance. Memberships, dues, licenses, and certiﬁcations relevant to Town operations and in support of continued compliance and expertise are allowed. Catering or food services for events or meetings. These orders must be pre-approved and budgeted. Restrictions/Prohibitions Certain purchases are not authorized via p-card. In addition to the merchant code restrictions setup by the p-card issuer, the Town 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. Revised 9/2026 Page 4 of 4 The purchase of alcohol is not permitted 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. Automatically recurring charges must be preapproved, budgeted, and must adhere to all applicable purchasing thresholds. Purchases relating to an outside grant are generally not allowed via p-card. Grants require signiﬁcant documentation and proper oversight and therefore should go through the regular requisition-purchase order-invoice process. Town-issued p-cards are not generally allowed to be used for purchases made solely for the beneﬁt of the Academy or budgeted within the Academy’s operating budget. For facilities management, information technology, or communications services shared between the Town and Academy, the Town’s p-card program may be available for use and will be reimbursed by the Academy. This process will be considered administrative but may be deﬁned in a future memorandum of understanding. In the instance of a Council approved MOU, the MOU will be the prevailing guidance. Revised 9/2026 Page 1 of 3 Debt Management Policy Outline 1. Policy Statement 2. Scope 3. Debt Types 4. Debt Limit 5. Issuance Guidelines 6. Debt Obligations Policy Statement The Town of Westlake has a ﬁduciary responsibility to its citizens and stakeholders to prudently manage its debt obligations. The debt management policies are established in order to provide guidance on the appropriate activities needed to ensure Westlake maintains a sound ﬁnancial position while eﬀectively meeting its capital needs. These policies are reviewed and updated periodically by the Town Manager and Director of Finance, in accordance with direction from the Town Council. This Policy, along with any other policies enacting or deﬁning authority granted, will be presented to the Council for approval of any changes. Scope The Debt Management Policies within this policy apply to only the Town, since the Academy is not authorized to issue its own debt, with the exception of Board-approved operating leases for technology equipment included within the Academy’s annual operating budget. This policy acts as a supplement to both the Financial Policies and Investment Policy approved for the Town by the Council and is intended to provide further clariﬁcation on the Town’s framework for debt management. Debt Types Allowable debt types include, but are not limited to, the following instruments: General Obligation Bonds (GO Bonds): Issued only with majority voter approval; proceeds limited to acquiring or improving real property and public facilities (e.g., infrastructure, educational, public safety). Increases in property tax will be proposed, if necessary, for debt service. Certiﬁcates of Obligation (CO Bonds): Used for capital improvements not funded by other bond types. Citizens can petition for an election on issuance, with a 45-day notice period. Increases in property tax will be proposed, if necessary, for debt service. Revenue Bonds: Finance revenue-producing enterprises (e.g., utilities) payable from speciﬁc revenue sources. Refunding Obligations: Bonds may be issued to refund long-term obligations, targeting a minimum net debt service savings of 3% of the par value of refunded bonds, unless a lower percentage is deemed acceptable for shorter maturities. Revised 9/2026 Page 2 of 3 Tax Anticipation Notes: Fund projects based on future tax revenues, typically for one to seven years for temporary ﬁnancing. Leases: Finance major capital purchases (excluding infrastructure) such as technology upgrades and large equipment. Internal Borrowing: Existing long-term reserves may be loaned between City funds, with repayment within three years at market-consistent rates. Other Obligations: Evaluate special circumstances for other forms of debt, such as limited tax notes or grant anticipation notes, on a case-by-case basis. Debt Limit The Town does not have a prescribed debt limit to allow Council, in conjunction with management and the Town’s ﬁnancial advisor, to make the most prudent ﬁnancial decisions available to them at the time of potential issuance. The Town prefers to maintain a total outstanding obligation to assessed valuation ratio of less than 3%. The Town will strive to minimize the burden of debt obligations impacting the interest and sinking portion of the ad valorem tax rate, utility rates, and other revenues available for repayment. Issuance Guidelines Planning Debt The Town requires a capital improvement plan (CIP) to be created annually, in conjunction with the annual operating budget process. Projects or purchases eligible for debt funding should be included on the plan to ensure prudent ﬁscal management and responsible use of credit. The Town recognizes that emergent opportunities or issues may require action outside of the annual budget process. The Town prefers to issue debt only for long-term assets, such as infrastructure, with a life span longer than the repayment period. When possible, the Town prefers to cash fund capital items, such as vehicles. Process to Issue Council will annually approve a ﬁve-year CIP, with the ﬁrst year of the plan being appropriated as part of the annual operating budget. The CIP will generally dictate the timing of project starts and therefore the required delivery of debt funds. The Town’s ﬁnancial advisor, in conjunction with staﬀ, will review market rates no less than annually to determine any beneﬁcial opportunities to reﬁnance debt. The timing of reﬁnancing will be dependent on the broader market and may occur outside the regular budgeting process. Staﬀ will work closely with the Town’s ﬁnancial advisor and bond counsel to create a calendar, working backwards from the date funds need to be available for a project. During an executive session, Council will discuss qualifying projects and direct staﬀ on the total maximum amount of debt to issue. The ﬁnancial advisor and bond counsel will review the calendar and requirements to issue. This will include the timing of the sale of debt, Council votes required, and an overview of administrative work with their deadlines. Revised 9/2026 Page 3 of 3 Council is legally required to vote to approve the publication of a Notice of Intent to Issue (NOI). The NOI will be published in accordance with State law and will include the planned issuance amount. Publication of the NOI begins a petition period, during which citizens can petition the Council to stop issuing the proposed debt. After the NOI has been advertised, the Council will receive an update in an open meeting, which may include updates on rates and market, and will vote to approve a preliminary oﬃcial statement. This will normally occur at the next regularly scheduled Council meeting and prior to the sale of debt. If the Council determines the amount of the issue will be materially less than the amount advertised in the NOI, Council may vote on a resolution to reduce the maximum amount of issue and communicate the revised lower amount of planned debt. Staﬀ will coordinate with the ﬁnancial advisor and bond counsel on selecting underwriters, ﬁnalizing the oﬃcial statement, meeting with appropriate rating agencies and receiving a current credit rating, advertising the planned sale of debt, and all other administrative requirements. Sales of debt will occur on the same day as a Council meeting. Council will receive the ﬁnal sales ﬁgures, including the interest rate and repayment schedule, and vote to accept the results of the sale at that meeting. The amount voted on will be the amount sold and any diﬀerence from the NOI will be considered no longer available to be issued. The Town’s bond counsel will communicate with the Texas Attorney General’s oﬃce for their review and ﬁnal approval of the bond sale. Funding generally occurs three weeks after the sale and ﬁnal approval by Council. Debt Obligations Annual principal and interest payments will be included in the adopted budget. The annual budget will include a schedule of outstanding debt obligations at the start of the ﬁscal year adopted. Issuances occurring mid-year may require a budget amendment; this will be disclosed during the discussion with Council and presented for their approval within the normal amendment process. The Town may be restricted by the debt instrument on which funds may be used to meet debt obligations. Typically, the Town utilizes the interest & sinking portion of the property tax rate or available sales tax receipts for municipal or academic infrastructure and utility revenues for utility infrastructure. Principal and interest requirements are incorporated into property tax rate calculations, minimum fund balance requirements, and utility rate studies to ensure adequate budgeting and aﬀordability of the debt. The Town will strive to meet all bond covenants, including coverage, continuing disclosure, and other reporting requirements, in addition to industry best practices for transparency and reporting.