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HomeMy WebLinkAboutR22-086 Adopting the Financial Policies Manual DocuSign Envelope ID:8CCA6127-6FE7-40C4-8A51-6B2834B98A2B Commissioner chandler-Henry moved adoption of the following Resolution: BOARD OF COUNTY COMMISSIONERS COUNTY OF EAGLE, STATE OF COLORADO RESOLUTION NO. 2022 - 086 RESOLUTION ADOPTING THE FLNANCIAL POLICIES MANUAL WHEREAS,the Board of County Commissioners of the County of Eagle, State of Colorado (hereinafter"the Board"),is empowered by Section 30-11-107 et. seq.: C.KS.,to make such orders concerning the County's financial matters,budgetary and otherwise; WHEREAS,Eagle County's financial policies serve as the foundation for long and short-term planning and are intended to facilitate decision making and provide direction to staff for handling the county's financial business.; and WHEREAS, due to the broad and diverse nature of the county's offices and departments, it is critical to have written and clearly defined policies that will serve to maintain and enhance the sound fiscal condition of Eagle County Government and its affiliates; and WHEREAS,All policies are written to ensure compliance with applicable state statutes, generally accepted accounting principles, and Government Accounting Standards Board rules_ They combine Government Financial Officers Association best practice recommendations with Board of County Commissioner desires to ensure a workable financial strategy for the organization;and WHEREAS,the Board desires to adopt a Financial Policies Manual which contains the following financial policies:Budget Policy Financial Reporting Policy,Business Expense Policy, Purchasing Card Policy, Procurement Policy,Payroll Policy,Employee Gifts Polices,Fund Balance Policy, Grants Policy,Capital Improvements Fund Policy, Signature Authorization Policy, Emergency Spending Authorization Policy;Emergency Incident Funding Policy,Risk Management Policy,and Debt Policy; and WHEREAS, individual policies may be updated from time to time and added to the manual upon approval by the BoCC. NOW THEREFORE,BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF THE COUNTY OF EAGLE, STATE OF COLORADO: THAT,the Financial Policies Manual, a copy of which is attached hereto as Exhibit"A",be and is hereby adopted as of the date of this Resolution. THAT,the previous financial policies as outlined in the Financial Policy Version Control Section of the Manual be and are hereby repealed as of the date of this Resolution. THAT,the Board hereby finds,determines and declares that this Resolution is necessary for the public health, safety and welfare of the residents of the County of Eagle, State of Colorado. DocuSign Envelope ID:8CCA6127-6FE7-40C4-8A51-6B2834B98A2B MOVED,READ AND ADOPTED by the Board of County Commissioners of the County of Eagle: State of Colorado; at its regular meeting held the 1st day of November, 2022 DocuSigned by: Al thST: ``�"``°°y3 COUNTY OF EAGLE, STATE OF COLOR-ADO,By and Through Its �a°Ra/ BOARD OF COUNTY COMMISSIONERS DocuSigned by: \ r—DocuSigned by: t . tr tritIA, By: C 'L` 17d?"4°V ClerhaectloA9Board of 5eannecMtQweeney County Commissioners Chair ,-DocuSigned by: Ck - h ia-Henry Commissioner DocuSigned by: DocuSigned - SrkEJ'r S E0473... Commissioner Commissioner Scherr seconded adoption of the foregoing resolution_ The roll having been called, the vote was as follows: Commissioner McQueeney Aye Commissioner Chandler-Henry Aye Commissioner Scherr Aye This resolution passed by 3/0 vote of the Board of County Commissioners of the County of Eagle. State of Colorado. 2 DocuSign Envelope ID:8CCA6127-6FE7-40C4-8A51-6B2834B98A2B EAGLE COU NTY EAGLE COUNTY GOVERNMENT FINANCIAL POLICIES DocuSign Envelope ID:8CCA6127-6FE7-40C4-8A51-6B2834B98A2B TABLE OF CONTENTS SECTION PAGE TABLE OF CONTENTS 2 EAGLE COUNTY FINANCIAL POLICIES INTRODUCTION AND PURPOSE 5 BUDGET POLICY 6 Budget Timelines 6 Relationship to Goals and Objectives 6 Budget Basis 6 Balanced Budget 6 Budget Control Level 6 Supplemental Budget Requests 6 Managing Budgets 7 Revenue and Expenditures 7 Long-Term Financial Planning 7 Responsibilities Summary 8 FINANCIAL REPORTING POLICY 9 Independent Audit 9 Fund Accounting 9 Basis of Accounting 9 Capital Assets 9 Cash, Cash Equivalents, and Investments 9 Revenue/Accounts Receivable 9 Expenditures/Accounts Payable 10 Leases 10 Interfund Transactions 10 Fund Equity Classifications 10 End of Year Processes 10 Internal Controls 10 Responsibilities Summary 11 BUSINESS EXPENSE POLICY 12 Eligibility for Business Expenses 12 Allowable Costs 12 Non-Allowable Costs 12 Receipts 12 Failure to Follow Policy 12 Responsibilities Summary 13 PURCHASING CARD POLICY 14 Eligibility for a Purchasing Card 14 Allowable Use 14 Return to Table of Contents Page 2- Financial Policies DocuSign Envelope ID:8CCA6127-6FE7-40C4-8A51-6B2834B98A2B Non-Allowable Use 14 Receipts 14 Responsibilities Summary 15 PROCUREMENT POLICY 16 Purchasing 16 Selection Criteria 16 Exceptions 16 Contracts 17 Responsibilities Summary 17 PAYROLL POLICY 18 Human Resources and Finance Roles 18 Payroll Schedule and Approvals 18 Payroll Discrepancies 18 Non-Wage Payments to Employees 18 Payments to Elected Officials 18 Severance Agreements 18 Responsibilities Summary 19 EMPLOYEE GIFTS POLICIES 20 Gifts to Employees from Eagle County Government 20 Gifts from other entities/outside individuals 21 Responsibilities Summary 21 FUND BALANCE POLICY 22 Background and Definitions 22 Fund Balance Analysis and Reporting 22 Minimum Fund Balance 22 Excess Fund Balance 23 Use and Replenishment of Funds 23 Responsibilities Summary 23 GRANTS POLICY 24 Grants Identification and Application 24 Budgeting and Recording Grants 24 Managing Grant Compliance Requirements 24 Failure to Follow Policy 24 Responsibilities Summary 25 CAPITAL IMPROVEMENT FUND POLICY 26 Eligible Expenditures 26 CIP Committee 26 Long Range Capital Planning 26 Responsibilities Summary 26 SIGNATURE AUTHORITY POLICY 27 Return to Table of Contents Page 3 - Financial Policies DocuSign Envelope ID:8CCA6127-6FE7-40C4-8A51-6B2834B98A2B Signature Authority 27 Other Board Authority 27 Approval and Reporting 27 Responsibilities Summary 27 EMERGENCY SPENDING AUTHORIZATION POLICY 28 Emergency Spending Authorization 28 Notification and Appropriation 28 Responsibilities Summary 29 EMERGENCY INCIDENT FUNDING POLICY 30 Emergency Incident Budget 30 Eligibility For Emergency Incident Funding 30 Responsibilities Summary 30 RISK MANAGEMENT POLICY 31 Goal and Function 31 Enterprise Risk Management 31 Insurance 31 Responsibilities Summary 32 DEBT POLICY 33 Use of Financing Tools 33 Types of Financing 33 Debt Limits 33 Debt Structuring and Issuance Practices 33 Debt Compliance and Reporting 34 Responsibilities Summary 34 FINANCIAL POLICY VERSION CONTROL 35 Return to Table of Contents Page 4- Financial Policies DocuSign Envelope ID:8CCA6127-6FE7-40C4-8A51-6B2834B98A2B EAGLE COUNTY FINANCIAL POLICIES INTRODUCTION AND PURPOSE EFFECTIVE DATE: 11/01/2022 EAGLE COUNTY POLICY STATEMENT: Eagle County's financial policies serve as the foundation for long-and short-term planning,facilitate decision making, and provide direction to staff for handling the county's financial business. Eagle County's financial policies serve as the foundation for long-and short-term planning and are intended to facilitate decision making and provide direction to staff for handling the county's financial business. Due to the broad and diverse nature of the county's offices and departments, it is critical to have written and clearly defined policies that will serve to maintain and enhance the sound fiscal condition of Eagle County Government and its affiliates.All policies are written to ensure compliance with applicable state statutes,generally accepted accounting principles, and Government Accounting Standards Board rules. They combine Government Financial Officers Association best practice recommendations with Board of County Commissioner desires to ensure a workable financial strategy for the organization. The policies within this manual formalize the Board of County Commissioners("BoCC")direction regarding financial management of the Eagle County organization. No set of policies can anticipate every circumstance or question. Deviation from these policies should be done only when there is good cause and after consultation with the County Manager.These policies may be amended by the Board of County Commissioners from time to time. Knowingly and willfully failing to adhere to these policies is a serious matter that may result in disciplinary action up to and including termination of employment. This policy manual is intended to give high level guidance about how Eagle County Government operates, and should be read in conjunction with the Eagle County Financial Procedures Manual.The procedures manual gives step by step detail about how to implement these financial policies.The procedures manual will be updated from time to time by the Chief Financial Officer with input from the County Manager's office. No BoCC approval is necessary to modify, add to, or delete items from the procedures manual. Return to Table of Contents Page 5 - Financial Policies DocuSign Envelope ID:8CCA6127-6FE7-40C4-8A51-6B2834B98A2B BUDGET POLICY EFFECTIVE DATE: 11/01/2022 POLICY STATEMENT: Eagle County's budget policy sets direction for the proper budgeting of county funds. In compliance with Colorado state statutes, Eagle EAGLE COUNTY County will adopt an annual balanced budget for all of its related funds and entities.The policy requires that budgets are prepared, approved, recorded, and adjusted with proper authorization. Budget Timelines Eagle County's fiscal and budget year runs from January 1 to December 31. December 15 is the statutory deadline for adoption of the county's annual budget. December 22 is the statutory deadline for the BoCC to certify all mill levies. Relationship to Goals and Objectives Department budgets should be developed with the purpose of furthering the goals and objectives of a BoCC adopted strategic plan and/or elected office priorities. Budget Basis The budget is developed using the modified accrual basis. In this budget method, revenues are budgeted when we believe the cash will be received and expenditures are budgeted when the disbursements are made. The receipt of long-term debt proceeds, capital outlays, and debt service principal payments are shown in these budget documents, however no allocations are made for depreciation or amortization expenses.Any items that may be reported as"other financing sources"and"other financing uses" under the GAAP basis of accounting are classified as revenues and expenditures under the budgetary basis of accounting.The modified accrual method of accounting differs from the generally accepted accounting principles(GAAP) method which is used to prepare the county's annual comprehensive financial report, so each year we make a reconciliation between full and modified accrual within the annual comprehensive financial report document. Balanced Budget Each of the county funds and entities must present a balanced budget to the finance department for adoption by the BoCC.This means that budgeted expenditures cannot exceed available resources plus beginning fund balance. The use of fund balance should only be proposed as a resource if the ending fund balance target is met, and then only for supporting non-recurring expenditures.The use of debt for major capital projects may be considered by the BoCC. Interfund borrowings may occur for temporary cash flow reasons and are generally not intended to result in a transfer of financial resources.Any interfund borrowings from one fund to another must be approved by the BoCC by resolution. Budget Control Level The BoCC appropriates expenditures by fund. No fund may expend, or contract to expend, any monies in excess of the amount appropriated in the budget resolution.To assist leaders in complying with this restriction, budget software is set to control spending at the account classification level. Departments may request a budget transfer to move spending authority from one account to another without increasing overall fund expenditures. Budget transfers can be approved by the Chief Financial Officer(or designee)without further BoCC approval. Budget transfers cannot be made between funds, only within a particular fund. Supplemental Budget Requests Supplemental requests for funding will be heard by the BoCC on an as needed basis. The purpose of a supplemental request is to increase a fund's overall spending authority. Supplemental requests should be made Return to Table of Contents Page 6- Financial Policies DocuSign Envelope ID:8CCA6127-6FE7-40C4-8A51-6B2834B98A2B when unanticipated spending needs have arisen after the annual budget was adopted and the requesting department cannot reasonably accommodate the request within its current appropriation. Unanticipated revenue may be added to a supplemental budget request. Significant known decreases in revenue(ie. anticipated grant revenue that will not be received, changes in economic conditions that indicate lower than expected revenue, etc.) may be added to a supplemental budget request. All unspent appropriations lapse at year end. Unspent funds for capital and other significant projects may be carried forward into the subsequent year's budget through the supplemental budget request process. Managing Budgets Department heads and elected officials are responsible for managing their expenditures at the classification level within the appropriation authorized. Departments/offices should be prudent and strive to stay within budget,while being allowed the flexibility to deploy the appropriate resources to meet changing environments and client and/or commissioner needs through the supplemental budget request process. Periodic financial reports may be submitted to the BoCC to inform them of actual to budget performance of any departments or funds. Revenue and Expenditures Eagle County endeavors to maintain a diversified and stable revenue base to shelter it from short-term fluctuations in any one revenue source. Departments and offices should review fees and charges to assure the cost of providing service is analyzed and appropriate fees are charged. In cases where fees do not cover the cost of the service, departments and offices should consult with the Chief Financial Officer to determine appropriate fees. One-time revenue should not be used for continuing expenses. Expenditures should be budgeted at a level that will balance available revenue sources with meeting the BoCC's strategic plan or elected official priority. Competing interests may need to be prioritized to meet long-term financial plans and balanced budget policies. Expenditures and related programs should be reviewed from time to time to determine whether they continue to provide the desired level of impact to the organization or community and to ensure they are being offered in the most cost effective manner. Long-Term Financial Planning Long-term financial plans should be established and updated from time to time.The intent of these plans is to allow decision makers to focus on long-term objectives, to encourage strategic thinking, and to provide a guide for decision making. Long-term plans should project revenues, expenses,financial position, and external factors for all key funds and government operations at least five years into the future. Capital projects should be considered as part of the long-term financial planning for all county operations. Return to Table of Contents Page 7- Financial Policies DocuSign Envelope ID:8CCA6127-6FE7-40C4-8A51-6B2834B98A2B Responsibilities Summary BoCC • Appropriate budgets by fund. • Approve all supplemental budget requests. County Manager • Serves as Budget Officer. • Delegates budget compilation, supplemental request preparation and budget transfer approvals to Chief Financial Officer. Department Heads and • Submit annual budget proposals. Elected Officials • Submit supplemental budget requests and budget transfer requests to the finance department. • Manage budget to stay within spending authority. • Works with the finance department to establish long-term plans. Department Fiscal Staff • Assist department heads and elected officials with responsibilities outlined above. Finance Department • Draft and submit annual and supplemental budgets to BoCC and Budget Officer in accordance with state statute. Return to Table of Contents Page 8- Financial Policies DocuSign Envelope ID:8CCA6127-6FE7-40C4-8A51-6B2834B98A2B FINANCIAL REPORTING POLICY EFFECTIVE DATE: 11/01/2022 POLICY STATEMENT: Eagle County's financial reporting policy establishes standards for the aggregation of fiscal information into the county's financial EAGLE COUNTY statements in accordance with state and federal regulations. Independent Audit An independent audit will be performed annually in accordance with state law. The county's financial system will be maintained in conformance with generally accepted accounting principles(GAAP),which are established by the Governmental Accounting Standards Board (GASB). Each year,the county will produce an annual comprehensive financial report(ACFR) in conformance with GAAP and Government Finance Officers Association recommendations. In lieu of establishing an audit committee,the independent auditor will present the results of each year's annual audit to the full Board of County Commissioners in a public meeting. Fund Accounting Eagle County accounts for its broad and diverse offices and departments within separate funds, each of which is a fiscal and accounting entity.The county's financials will include the county's primary funds along with blended component units(legally separate entities that are, in substance, part of the county's operations)and discretely presented component units(which are presented in a manner to emphasize that they are legally separate from the county). Basis of Accounting Both the governmental and business type activities in the government-wide financial statements and the proprietary fund financial statements are presented on the full accrual basis of accounting. The basis for accounting for governmental funds in the fund level financial statements is modified accrual. Capital Assets Assets acquired and owned by the county and its components having a value of$10,000 or more and a life expectancy of greater than one year, as well as capital leases, may be considered a fixed asset by the county.The capitalization limit is$5,000 for items purchased with federal grant dollars.A physical inventory of property is required on an annual basis. Cash. Cash Equivalents, and Investments Except for cash held for third parties and cash held by separate legal entities, all cash is deposited with the county Treasurer. The county defines cash and cash equivalents as amount in demand deposits as well as short-term, highly liquid investments with original maturities of three months or less.All investments are made in accordance with the county's Investment Policy. Revenue/Accounts Receivable Revenues received must be deposited on a regular basis,generally daily or weekly, depending upon volume of receipts. Department heads are responsible for reviewing revenue collections to ensure accuracy. Revenues from grants often need to be accounted for in a particular manner and federal grant dollars need to be included in the county's Schedule of Expenditures of Federal Awards. See the Grants Policy for additional detail. Return to Table of Contents Page 9 - Financial Policies DocuSign Envelope ID:8CCA6127-6FE7-40C4-8A51-6B2834B98A2B Expenditures/Accounts Payable All contracts for expenditures must be executed in accordance with county policies. Procurement procedures should be followed, and all necessary supporting documents should be maintained within the appropriate financial software prior to making payments. Payments can be made by using a purchasing card or electronically through utilizing the county's financial software.Vendor payments are controlled and processed by the finance department. Departments and offices should notify the Eagle County Treasurer in advance of large payments(typically over $500,000). Leases Leases,whether Eagle County is the lessor or the lessee, require special accounting. Departments should inform the finance department of the terms and conditions of any lease into which it enters. Interfund Transactions Interfund services provided and used are accounted for as revenues, expenditures, or expenses and recorded as either due from other funds or due to other funds on a fund's balance sheet when it is expected to be liquidated within a year. For receivables/payables that are not expected to be liquidated after one year, the items are classified as advances to or from other funds. Fund Equity Classifications GAAP financial statements report up to five separate categories of fund balance based on the type and source of constraints placed on how the resources can be spent. Fund balance classifications include nonspendable, restricted, committed, assigned and unassigned. Unassigned fund balance is a residual classification within the general fund, which is the only fund that reports a positive unassigned balance. In all other funds, unassigned fund balance is limited to negative fund balance. Budgetary fund balance,while it is subject to the same constraints on spending as GAAP fund balance, typically represents simply the total amount accumulated from prior years at a given point in time. End of Year Processes The finance department works to ensure that all revenues and expenditures are recorded in the proper accounting period. Revenues earned in the previous year will be recorded in that year if they are received within 60 days after year end. Expenditure-driven grant revenues should be recorded in the same year the expenditure was incurred, regardless of the 60-day requirement. Purchases are recorded in the year in which the product or service was received regardless of when the payment was made. Departments should take care to enter revenues and expenditures appropriately to ensure they are recorded in the correct year. Internal Controls A comprehensive framework of internal control serves as the first line of defense in safeguarding assets and preventing and detecting errors and fraud. Management control and oversight is integral in the effective stewardship of public resources. The County Manager and the department heads or elected officials,with guidance from the Chief Financial Officer, are primarily responsible for the appropriate internal control of all county assets and financial transactions. Internal control is a major part of managing an organization and works to ensure effectiveness and efficiency of operations, reliability of financial reporting, and compliance with applicable laws and regulations.All staff are expected to comply with auditor requests and finance staff recommendations to achieve the best possible controls while weighing the cost of such controls. If any employee suspects financial fraud or abuse,they should address their concerns with a supervisor, department director, elected official, County Manager's office, or the finance or human resources department. Return to Table of Contents Page 10- Financial Policies DocuSign Envelope ID:8CCA6127-6FE7-40C4-8A51-6B2834B98A2B Responsibilities Summary Department Heads and • Approve revenue collections and accounts payable entries. Elected Officials • Manage internal control processes within your department/office. • Comply with end of year processes. • Notify Eagle County Treasurer prior to large payment requests. Department Fiscal Staff • Enter revenue collections and accounts payable entries. Review all backup data for accuracy and completeness. • Reviews and understands financial policies and procedures. Finance Department • Final approval of revenue collections and bill payments. • Review department level entries and make adjustments as needed. • Make recommendations for internal control improvements. • Train fiscal staff in financial reporting procedures. Return to Table of Contents Page 11 - Financial Policies DocuSign Envelope ID:8CCA6127-6FE7-40C4-8A51-6B2834B98A2B BUSINESS EXPENSE POLICY EFFECTIVE DATE: 11/01/2022 POLICY STATEMENT: Eagle County's travel and business expense policy EAGLE COUNTY establishes standards for allowing the use of purchasing cards or reimbursing employees for business related expenditures that are incurred while performing specific job duties. Employees should neither gain nor lose personal funds due to a reasonable business expense. Eligibility for Business Expenses A county employee is eligible to use a purchasing card or to be reimbursed for legitimate business expenses that are allowed by this policy and approved in advance by their department head or elected official.The preferred method to pay for employees'business expenses is the use of a county purchasing card. Employees should state the business purpose of all expenditures, either through the purchasing card or the reimbursement process. If an employee is requesting reimbursement of expenses,that request should be made within 90 days of when the expenses were incurred. It is the responsibility of the department head or elected official to set and enforce guidelines for their departments/offices regarding the appropriate use of budgeted dollars for business expenses. Allowable Costs Actual costs of eligible business travel are allowed,with the exception of those expressly disallowed below. When a gratuity is appropriate, no more than 20%will be allowed as a business expense. Examples of allowable costs include: 1) meals purchased more than 50 miles of employees'home offices and not in the course of normal daily business, 2)airline and lodging expenses when extended travel is warranted (at coach fares and mid-range hotels or the hotel in which a training or conference is located), 3) reimbursement of mileage at the published IRS mileage rate when an employee's personal vehicle is utilized. Non-Allowable Costs Alcoholic beverages, personal items, and gift card purchases are not considered eligible business expenses and should not be reimbursed. Because parking, speeding, or other traffic tickets received by an employee, even when on county business, are unlawful,they are considered a personal expense to be paid by the employee and are not reimbursable. Receipts Itemized receipts should be maintained for all transactions. Business purpose of all expenses should be clearly documented. IRS guidelines require the following information for business travel, meals, and entertainment: o The amount of the purchase o The business purpose for the purchase, and o The names of those who participated. Failure to Follow Policy Fraudulent business expense reimbursement requests or misuse of an Eagle County purchasing card is a serious matter that may result in disciplinary action up to and including termination of employment, and may subject the employee to legal action. It is the department head or elected official's responsibility to request reimbursement Return to Table of Contents Page 12 - Financial Policies DocuSign Envelope ID:8CCA6127-6FE7-40C4-8A51-6B2834B98A2B from the employee or deny a reimbursement request if the amount spent is considered unreasonable or proper documentation is not submitted. Responsibilities Summary Department Heads and • Approve business purpose and estimated cost prior to employee incurring Elected Officials expenses. • Approve reimbursement requests or purchasing card charges. Employee • Obtain approval for all business expenses. • Maintain all itemized receipts and record all transactions either through the purchasing card process or a reimbursement request. Finance Department • Administer the program. • Make payments to employees with approved reimbursement requests. Return to Table of Contents Page 13 - Financial Policies DocuSign Envelope ID:8CCA6127-6FE7-40C4-8A51-6B2834B98A2B PURCHASING CARD POLICY EFFECTIVE DATE: 11/01/2022 POLICY STATEMENT: Eagle County utilizes a purchasing card program to establish a more efficient method of purchasing and paying for goods and EAGLE COUNTY services.All purchasing card transactions are available for viewing by the public. Eligibility for a Purchasing Card Purchasing cards will only be issued to elected officials and employees who are authorized by Eagle County to purchase goods and services on behalf of the county. Both the name of the cardholder and the county appear on the face of the card.The purchasing card carries corporate liability for the county but carries no liability for a cardholder. Allowable Use The purchasing card provides an alternative method to pay vendors, however does not change a department or office budget.All purchases made using a purchasing card must be properly budgeted.The total purchases for any month shall not exceed a cardholder's authorized credit limit. Cardholders must advise vendors that the county is exempt from paying Colorado sales and use tax. Non-Allowable Use The following items may not be purchased with a county purchasing card: • Alcoholic beverages • Personal items • Cash advances • Gift cards.As gift cards are similar to cash,you must have pre-approval from the finance department to purchase gift cards regardless of the intended use. You must provide a clear plan describing the intended purpose of the gift cards and a method of tracking distribution of the cards. • Parking, speeding, or other traffic tickets received by an employee. Receipts Itemized receipts should be maintained for all transactions. IRS guidelines require the following information for business travel, meals, and entertainment: o The amount of the purchase o The business purpose for the purchase, and o The names of those who participated. Return to Table of Contents Page 14- Financial Policies DocuSign Envelope ID:8CCA6127-6FE7-40C4-8A51-6B2834B98A2B Responsibilities Summary Department Heads and • Approve business needs for an employee to have a card and associated Elected Officials credit limit. • Approve all transactions.This responsibility may be delegated, but the department head or elected official is ultimately responsible for proper use of cards by staff. Cardholder • Keep the card secure. • Call card servicer for lost or stolen card or to report fraudulent purchases. • Maintain all itemized receipts and record all transactions. Finance Department • Administer the program. • Ensure payment is made to the card servicer. Return to Table of Contents Page 15- Financial Policies DocuSign Envelope ID:8CCA6127-6FE7-40C4-8A51-6B2834B98A2B PROCUREMENT POLICY EFFECTIVE DATE: 11/01/2022 POLICY STATEMENT: Eagle County utilizes this procurement policy to ensure competitive pricing and rates are obtained for Eagle County and its affiliates. EAGLE COUNTYPurchases and contracts should be completed in adherence to this policy. Purchasing The.intent of this policy is to ensure that Eagle County and its affiliates are entering into purchasing contracts at the most competitive pricing possible and to ensure that any vendor has the opportunity to bid on Eagle County projects. Procurement requirements vary based upon the expected cost and type of project as outlined in the table below: Definition Procurement Process Small Projects- Projects less than No formal process required for obtaining quotes. Staff should consider $25,000 multiple vendors to obtain the best pricing and quality available. Mid-Sized Projects- Projects Staff should obtain at least three written quotes and maintain the quotes between $25,001 and $75,000 and other information supporting the basis for selection. Large Projects- Projects over Staff should publish an invitation to bid, request for proposal, or request $75,000 for qualifications to seek pricing for these types of projects.These documents should be posted on the Eagle County website and can also be shared directly with potential vendors, posted in newspapers or trade journals, or shared as determined necessary by staff. Staff should maintain all responses and other information supporting the basis for selection. Any work on county highways A description of the work to be done and its location, and a reference to valued at$50,000 or more the location holding plans and specifications for the work must be advertised in a legal newspaper.The award is required to be made to the lowest responsible bidder per CRS 43-2-209. Selection Criteria Unless otherwise required, departments have flexibility to select vendors based upon any or all of the following criteria (this list is not an exhaustive list): local preference and experience in Eagle County, previous experience with the vendor, minority owned business status, environmental sustainability, quality comparisons and life cycle costs, and any other information deemed relevant by Eagle County.The lowest responsible bidder does not need to be selected in all cases. Exceptions The County Manager, or their designee, can approve any exceptions to this policy for a valid business reason and documented justification or when the process is impractical due to an emergency situation.When a single supplier or provider has unique qualifications to provide a product or service,the County Manager, or their designee, may approve a sole source procurement request. Return to Table of Contents Page 16- Financial Policies DocuSign Envelope ID:SCCA6127-6FE7-40C4-8A51-6B2834B98A2B Procurement or bidding processes for State, Federal or other government contracts may be different from Eagle County's policy. Matters that have other bidding requirements or that may be funded with state or federal funds should follow the most restrictive process to ensure compliance. Contracts When practical, purchases should be documented with an Eagle County contract.All contracts entered into by Eagle County or its affiliates must be reviewed by the Eagle County Attorney's Office prior to execution. Fully executed contracts will be maintained by the Eagle County Attorney's Office.All contracts are executed by the Board of County Commissioners in a public meeting unless they meet delegated limits passed by resolutions which allow for signature by the County Manager, Executive Director of the Eagle County Housing and Development Authority, or Aviation Director.All executed contracts are available for review by the public. Responsibilities Summary Department Heads and • Ensure procurement policy is followed. Elected Officials • Provide justification for any requested exception to the County Manager. County Manager • Approve exceptions to the policy. • Execute contracts within signature limits. County Attorney • Approve form of contracts. Return to Table of Contents Page 17- Financial Policies DocuSign Envelope ID:8CCA6127-6FE7-40C4-8A51-662834B98A2B PAYROLL POLICY EFFECTIVE DATE: 11/01/2022 POLICY STATEMENT: Eagle County's payroll policy establishes standards for the compensation of county employees, including benefits. It ensures that EAGLE COUNTY compensation and benefit payments to and for employees are properly authorized, documented, recorded, and reported in accordance with state and federal regulations. Human Resources and Finance Roles Human resources is responsible for maintaining all employee information, including personal information, benefit selections,wage rates, and employee tax information. Finance is responsible for verification of submitted electronic time sheets, payroll related changes and corrections from departments, and the actual processing of payroll through the designated payroll software. Payroll Schedule and Approvals Payroll is processed on a biweekly basis with pay being issued on Fridays. Payroll schedules are updated at the beginning of each year and are posted by human resources.All departments and offices must approve employee time records and time off requests through the payroll software on a timely basis. Each department head and- elected official may delegate the approval of time cards, however the department head or elected official is ultimately responsible to ensure time records reflect time worked by employees. Payroll Discrepancies If an employee notices an error on their paycheck they should first consult their manager. If time was missing from the check the manager will need to approve any time that should be added. If there is a problem with tax or benefit withholdings the employee should contact the human resources department. Non-Wage Payments to Employees All money, gifts, and benefits paid to employees by Eagle County Government are to be included in the employee's reported income unless otherwise excluded by the Internal Revenue Code(IRC).Any gift cards,gifts, discounts, or benefits received by employees must be communicated to the finance department for proper review and income reporting. Vehicles provided to employees that are available for personal use, including commuting(ie.take-home vehicles), require an annual analysis and potential inclusion on employees'reported income. Department heads must inform the finance department when vehicles are available to staff for personal use. Payments to Elected Officials Because salaries of the county's elected officials are set by the state, no elected official may receive any additional or non-wage payments that would cause their salary to increase over the statutorily allowed amount. Severance Agreements From time to time, severance agreements may be offered to employees upon separation of employment. Prior to taking action, such agreements should be discussed with the Human Resources Director or designee.All such agreements must be approved by the County Attorney or designee and executed by the County Manager or designee. Return to Table of Contents Page 18- Financial Policies DocuSign Envelope ID:8CCA6127-6FE7-40C4-8A51-6B2834B98A2B Responsibilities Summary Department Heads and • Review and approve all time by the stated deadline. Elected Officials Employee • Enter all hours worked and time off requests into the payroll software. Human Resources Department • Manage compensation and benefits programs. • Enter and review employee information in the payroll software. • Manage short term disability and workers compensation pay. Finance Department • Process payroll. • Distribute live checks. • Ensure Internal Revenue Service rules are being followed. Return to Table of Contents Page 19- Financial Policies DocuSign Envelope ID:8CCA6127-6FE7-40C4-8A51-6B2834B98A2B EMPLOYEE GIFTS POLICIES EFFECTIVE DATE: 11/01/2022 POLICY STATEMENT: Eagle County's policy on employee gifts is primarily EAGLE COUNTY meant to ensure that any gifts offered to employees are appropriately taxed, identified, and recorded in accordance with state and federal regulations. Gifts to Employees from Eagle County Government Any gifts purchased with county funds must be appropriately budgeted. Caution should be used when giving gifts, and department heads and elected officials are discouraged from using county funds to give gifts on a regular basis. The following table outlines the taxability of gifts that are paid for with government funds(Refer to the most recent IRS publication Quick Reference Guide for Public Employers) : Gift Tax Treatment Reporting Treatment Cash (including bonus or years of Always taxed as regular income, These should be paid through service awards) regardless of frequency or amount. regular payroll processes. Gift cards(gift cards are considered Always taxed as regular income, The issuance of gift cards must cash by IRS) regardless of frequency or amount. always be reported to payroll so it gets added to employee income. Annual/infrequent employee gift(if Not taxable No reporting is required as it is a gift card or cash is an annual gift, considered a de minimis fringe it is taxable per rules above) benefit as long as the value is nominal (IRS defines de minimis as having so little value that accounting for it would be unreasonable or administratively impracticable. IRS used $100 as a benchmark in 2001), infrequent (annual), and not in place of compensation. Prizes(from drawings, etc.) Depends what the prize is. If it's If a prize has more than de minimis cash or gift cards,then taxable. If it's value, consult with payroll to a physical item of de minimis value, determine tax and reporting then it is likely not taxable. treatment. Clothing and uniforms Depends. REQUIRED uniforms such Discuss frequency,volume, and as Sheriff's Office uniforms or value with payroll to determine protective wear that is required taxability and reporting treatment. such as steel toed boots are not taxable, however other logo'd gear may be a taxable fringe benefit. Return to Table of Contents Page 20- Financial Policies DocuSign Envelope ID:8CCA6127-6FE7-40C4-8A51-6B2834B98A2B Gifts from other entities/outside individuals The Constitution of Colorado Article XXIX bans public officers, local government officials, and local government employees from accepting gifts over$65(periodically adjusted for inflation) in any calendar year. Gifts received on special occasions from individuals that are relatives or personal friends are excluded from this ban. These officers, officials, and employees are also prohibited from receiving any money,forbearance, or debt forgiveness without providing the giver equal value in exchange and from receiving anything of value from professional lobbyists. Responsibilities Summary Department Heads and • Ensure policy is followed and any department sponsored gifts are properly Elected Officials reported to the finance department. Employee • Follow county, state, and IRS guidelines related to the acceptance of gifts. Finance Department • Provide guidance to county staff in interpreting this policy. • Properly reporting gifts on employee paychecks when appropriate. Return to Table of Contents Page 21 - Financial Policies DocuSign Envelope ID:8CCA6127-6FE7-40C4-8A51-6B2834B98A2B FUND BALANCE POLICY EFFECTIVE DATE: 11/01/2022 POLICY STATEMENT: Eagle County's fund balance policy strives to ensure that the county maintains adequate levels of fund balance to mitigate current and EAGLE COUNTY future risks(e.g. revenue shortfalls and unanticipated expenditures). Background and Definitions The county's three largest sources of revenue are property tax, sales tax, and charges for services. Property tax has historically been a relatively stable source of revenue and has the added bonus of predictability in that significant changes can only happen in a reappraisal year and changes in revenue are delayed (ie. reappraisals are based upon real estate market activity through June 30 of even years, are calculated in the following year, and impact revenue in the year subsequent to the reappraisal year, so market conditions as of June 30, 2022, impact the 2023 reappraisal, and generate revenue in 2024). Sales tax is less predictable as it changes when spending on taxable items changes. Sales taxes are largely dependent upon consumer spending and are often used as an indicator of consumer optimism. Much of the county's sales tax revenue is from locals who spend dollars in their daily lives, but a large portion comes from visitors,which is based upon national and worldwide consumer habits. In the aggregate, charges for Eagle County services have been relatively stable and predictable sources of revenue, however individual revenue sources may be more volatile. For the purpose of this policy,the term fund balance is used to describe both fund balance and net position and is intended to serve as a measure of the current financial resources available within each fund. Fund Balance Analysis and Reporting At least once each calendar year, the finance department will conduct an analysis of all county funds to determine compliance with this policy and to make recommendations as needed. Results of the analysis and recommendations will be presented to the BoCC. Minimum Fund Balance Given the revenue sources outlined above, all funds should have a minimum fund balance (excluding non-spendable or restricted categories) of no less than three months(25%)of annual operating expenditures.Total fund expenses may be reduced by the amount of capital or one-time projects to calculate operating expenditures for the purpose of this analysis. Eagle County will also maintain an emergency reserve fund in an amount equal to at least three percent of fiscal year spending in accordance with the provisions of Article X, Section 20 of the State Constitution (TABOR Amendment). Certain Eagle County funds, because of their reliance upon the general fund for operating subsidy, can be combined with the general fund to determine whether this fund balance policy is being met.These funds include the public health fund, human services fund, and insurance reserve fund. Funds that are planning for large expenditures, including capital projects or other significant projects, should have documentation outlining the future needs of the fund. Likewise, funds that rely on revenue sources that are different from those outlined above should be analyzed in accordance with the specific revenue sources. If these fund specific studies indicate a higher level of fund balance is needed,that should be noted in the annual presentation to the BoCC. Return to Table of Contents Page 22 - Financial Policies DocuSign Envelope ID:8CCA6127-6FE7-40C4-8A51-6B2834B98A2B Excess Fund Balance In cases where fund balances exceed the minimum fund balance, a long-term plan should be considered. Excess fund balance should not be used as a funding source for ongoing recurring expenditures. Use and Replenishment of Funds A budgetary request that reduces a fund balance to an amount below the minimum required amount per this policy shall include a written plan which defines the conditions warranting the use of fund balance and outlines how the fund balance will be replenished. Minimum fund balances should be replenished as soon as economic conditions allow, but no longer than three years. Replenishment of fund balance may be accomplished through the control of operating expenditures, additional revenues sources, use of excess resources in other funds where it is legally permissible and a defensible rationale can be made, or year-end budget surpluses. Responsibilities Summary County Manager • Present fund balance analysis to BoCC on an annual basis. Department Heads and • Monitor fund balance and manage revenues and expenditures accordingly. Elected Officials • Create a long-term plan for the fund, if needed, and share with the finance department. • If budget requests move fund balance below minimum required per this policy, create a written plan warranting the use of fund balance and a plan for replenishment. Finance Department • At least annually, prepare an analysis of fund balances to inform management of funds that are not in compliance with this policy. • Monitor ongoing compliance with this policy. Return to Table of Contents Page 23 - Financial Policies DocuSign Envelope ID:8CCA6127-6FE7-40C4-8A51-6B2834B98A2B GRANTS POLICY EFFECTIVE DATE: 11/01/2022 POLICY STATEMENT: Eagle County's grants policy establishes standards for the budgeting, receipt, recording, and compliance of all grant awards, including EAGLE COUNTY grants passed through the county to another entity, often in cases where the county is acting as a fiscal agent. Grants Identification and Application Department heads and/or elected officials must seek approval from the County Manager's office prior to applying for grants.The purpose of this approval is to ensure that the grant is aligned with the county's strategic plan and that a funding analysis is complete. Existing grants should be evaluated prior to renewal to ensure that the grant-funded projects or programs are meeting the desired outcomes and any ongoing funding obligations can be met. Budgeting and Recording Grants The inclusion of any grant in excess of$25,000 into the budget should be supported by either a grant agreement(if awarded)or grant application or program description (if not yet awarded) .These grant documents should be reviewed with the finance department to ensure the funding and related expenditures are budgeted in the appropriate accounts. When a grant is received, dollars must be recorded in the appropriate general ledger accounts and reference the grant award with sufficient detail to allow for auditors to understand the associated grant agreement. (ie. contract number, executed date, etc.) Care should be taken with all federal grants as Eagle County is required to disclose the expenditures of all federal dollars in a separate audit schedule. Managing Grant Compliance Requirements The department head and/or elected official for the department receiving the grant is responsible for managing compliance with the grant agreement. It is expected that they understand the grant agreement and have retained sufficient documentation such that auditors or monitoring agencies can confirm that compliance requirements have been met. For any federal grant, the department head should reference the 2 CFR Part 200 Compliance Supplement published by the Office of Management and Budget. Failure to Follow Policy The failure to properly record grants may result in Eagle County's inability to apply for future state and federal grants.There could be audit implications, including repayment of funds or the loss of current(and future)grant funding. Return to Table of Contents Page 24- Financial Policies DocuSign Envelope ID:8CCA6127-6FE7-40C4-8A51-6B2834B98A2B Responsibilities Summary County Manager's Office • Support grant applications after reviewing funding requirements and strategic alignment. Department Heads and • Share documentation with the finance department. Elected Officials • Ensure ongoing compliance with grant agreement, including proper financial reporting in the county's financial software. Finance Department • Ensure proper general ledger accounts are associated with grants. • Accumulate information for the federal single audit schedule. Return to Table of Contents Page 25 - Financial Policies DocuSign Envelope ID:8CCA6127-6FE7-40C4-8A51-6B2834B98A2B CAPITAL IMPROVEMENT FUND POLICY EFFECTIVE DATE: 11/01/2022 POLICY STATEMENT: Eagle County's capital improvement fund policy establishes standards for appropriating funds from the capital improvement fund. EAGLE COUNTY Eligible Expenditures To utilize funds from the capital improvements(CIP)fund, a project must be capitalizable as an asset of Eagle County or one of its affiliates. Generally speaking, an asset must cost more than $10,000 and have at least a one-year useful life. Eligible items may include paying the costs of acquiring or constructing any capital improvement; acquiring land or equipment;the costs of issuing bonds;the costs of readying property for its intended use; and the costs of operating and maintaining the county's capital assets. CIP Committee The CIP Committee shall consist of representatives from the following Eagle County departments:finance, County Manager's office, information technology, and facilities or project management.The County Manager appoints all committee members, and may appoint additional members as they deem necessary for the fair allocation of CIP funds. CIP Committee meetings are open to any staff member that wishes to attend.The CIP committee shall establish a process by which it makes recommendations to the Board of County Commissioners for funding. Long Range Capital Planning A long-term (5 years+)capital improvements funding plan will be developed and maintained by the Chief Financial Officer, utilized by the CIP committee when making funding recommendations, and shared with the BoCC to assist with decision making.This plan will be updated on a regular basis and will identify capital needs versus wants and will prioritize the items within the wants category. Responsibilities Summary County Manager • Appoint CIP Committee. Chief Financial Officer • Prepare a long-term financial plan. Department Heads and • Request funding from the CIP fund for projects that are eligible per this Elected Officials policy and are strategically important for departments/offices. CIP Committee • Make recommendations to BoCC for funding projects from the CIP fund. • Regularly review long-term capital needs for the county and its affiliates. Return to Table of Contents Page 26- Financial Policies DocuSign Envelope ID:8CCA6127-6FE7-40C4-8A51-6B2834B98A2B SIGNATURE AUTHORITY POLICY EFFECTIVE DATE: 11/01/2022 POLICY STATEMENT:This policy allows the County Manager, or designee, to execute agreements and documents with a value no greater than $200,000. EAGLE COUNTY Signature Authority Eagle County Government enters into agreements and executes documents in the conduct of its business and management of various projects and programs.This policy authorizes the County Manager, or designee,to execute agreements and documents with values no greater than $200,000 so long as funds have been properly budgeted and appropriated for such expenditures. Other Board Authority For the purpose of transparency,the following boards have given other Eagle County staff the following signature authority through resolution: • Eagle County Housing and Development Authority(ECHDA)allows the Executive Director of ECHDA to execute agreements and documents for amounts not to exceed $20,000 per ECHDA Resolution 22-069. • Eagle County Air Terminal Corporation (ECAT)authorizes the Aviation Director to execute agreements and documents on behalf of ECAT with a value no greater than $75,000 per ECAT Resolution 22-001. Approval and Reporting Any agreements or documents to be executed through the authority of this policy shall be subject to prior approval by the Eagle County Attorney's Office. Any agreements or documents executed through the authority of this policy must be identified on a future Board of County Commissioner agenda. Responsibilities Summary County Attorney • Approve form of agreements. County Manager or designee • Execute agreements for amounts no greater than $200,000. Executive Director of Eagle County • Execute agreements for amounts no greater than $20,000. Housing and Development Authority Aviation Director • Execute agreements for amounts no greater than $75,000. g Return to Table of Contents Page 27- Financial Policies DocuSign Envelope ID:8CCA6127-6FE7-40C4-8A51-662834B98A2B EMERGENCY SPENDING AUTHORIZATION POLICY EFFECTIVE DATE: 11/01/2022 EAGLE COUNTY POLICY STATEMENT:This policy outlines spending authorizations that are outside the course of the normal budget and procurement policies and shall only be utilized only in cases of emergencies. Emergency Spending Authorization Emergencies that require the immediate procurement of resources by Eagle County may happen from time to time. This policy outlines spending authorizations that are outside the course of the normal budget and procurement policies and shall only be utilized in cases of emergencies. An emergency for the purpose of this policy is defined as an event or incident that compels a response or mitigating action where there is an imminent danger to the safety and welfare of the citizens and visitors of Eagle County or when lives or property may be compromised by the failure to act.The determination of whether an event qualifies as an emergency shall be made by either the County Manager, Sheriff, Emergency Management Director or their designees. Eagle County staff or elected officials shall act swiftly to procure resources or incur costs to attempt to mitigate or avert an emergency even if it is not practically feasible to convene a quorum of the Board of County Commissioners or otherwise adhere to the approved budget or procurement policies. Authorization limits are outlined in the table below: Role Authorization Amount County Manager or designee and any single Commissioner $1,000,000 County Manager or designee $500,000 County Sheriff or designee $100,000 Emergency Management Director or designee $100,000 Notification and Appropriation When an emergency spending authority is exercised, the Board of County Commissioners should be notified at the earliest opportunity. Notification should include a description of the emergency and the costs or resources that were authorized. Documentation supporting the expenditure of resources should be provided by the party making the authorization as soon as practical and in any event within 24 hours. The County Manager or designee shall determine whether such emergency spending authorization should be placed on the next available Board of County Commissioners agenda for ratification or acknowledgement. If a spending authorization causes expenditures to exceed the amounts appropriated by the BoCC in the current budget, the finance department shall prepare a budget supplemental to increase the approved appropriation. Return to Table of Contents Page 28- Financial Policies DocuSign Envelope ID:8CCA6127-6FE7-40C4-8A51-6B2834B98A2B Responsibilities Summary Board of County • A single commissioner may act with the County Manager or designee to Commissioners exercise spending authority. • Approve a supplemental budget, if necessary. County Manager or designee • Determine that an event is considered an emergency. • Exercise spending authority. County Sheriff or designee • Determine that an event is considered an emergency. • Exercise spending authority. Emergency Management • Determine that an event is considered an emergency. Director or designee • Exercise spending authority. Finance Department • Prepare a supplemental budget, if necessary. Return to Table of Contents Page 29 - Financial Policies DocuSign Envelope ID:8CCA6127-6FE7-40C4-8A51-6B2834B98A2B EMERGENCY INCIDENT FUNDING POLICY EFFECTIVE DATE: 11/01/2022 POLICY STATEMENT: Eagle County will maintain a funding source from which it will expend costs associated with emergencies that occur in Eagle County. EAGLE COUNTY Emergency Incident Budget The county will maintain an emergency incident response department,which is a separate department within the county's general fund.The purpose of this department is to accurately and transparently track the cost of emergency incidents that happen from time to time within Eagle County. Each year, the finance department will propose an annual budget for the emergency incident department.The budget may be made up of appropriations that are carried forward from a previous year's budget, a new appropriation, or a combination of both. Should a large event occur, an increase in appropriations during a fiscal year may be necessary. Eligibility For Emergency Incident Funding This department will be used only when the County Manager gives express direction for its use. If these funds are not available, all costs related to any incident should be tracked within each department's budget as normal business expenditures.The approval to utilize the emergency incident funds will be based on the circumstances of each individual incident.The County Manager will consider such items as the expected dollars to be expended,the expected duration of the incident,whether or not the emergency operations center has been activated,whether a cost sharing agreement is in place, impacts to normal operations, and other factors which may be important to determine whether county expenditures should be tracked separately within this specific department. Expenditures should include all items that were purchased, contracted for, or utilized solely for the purpose of the incident. Staff hours should be tracked to ensure that all staff resources can be properly accounted for.The method by which expenditures and staff hours should be tracked will be communicated by either the emergency operations center emergency support function 7 lead or the finance department. Responsibilities Summary County Manager • Give direction for use of this department. Department Heads and • Ensure policy is followed and all related items and staff time are properly Elected Officials tracked. Employee • Track expenditures and hours worked on the incident. Finance Department • Ensure the annual budget is in place. • Assist with tracking and compiling expenditures and staff time. Return to Table of Contents Page 30- Financial Policies DocuSign Envelope ID:8CCA6127-6FE7-40C4-8A51-6B2834B98A2B RISK MANAGEMENT POLICY EFFECTIVE DATE: 11/01/2022 POLICY STATEMENT: Eagle County maintains a risk management program that encompasses all county departments and offices.The primary objective of the EAGLE COUNTY program is to protect the county's employees, its physical assets, and its ability to serve the public against any accidental or catastrophic losses. Goal and Function The goal and function of the county's risk management program is to apply enterprise risk management principles and techniques, in partnership with all departments and offices within the county, to protect the health, safety, and welfare of Eagle County's employees; Eagle County residents and visitors; and Eagle County's property, assets, and other resources. These principles and techniques include exposure identification and analysis,financing alternatives such as insurance, control and safety methods, and program evaluation.All risk management policies,guidelines, and procedures shall be in accordance with all federal, state, and local laws.As a high performing organization, Eagle County reviews the effectiveness and efficiency of its risk management program and makes changes or modifications to its risk management practices as necessary. Enterprise Risk Management Enterprise risk management(ERM) is a process by which organizations strategically identify, evaluate, and apply risk mitigation techniques that are aligned with the overall risk appetite of the organization.The administration of ERM is a function involving the entire county. The principal objective is to protect the county and all of its people and assets at the lowest possible cost. Strategies identified by the enterprise risk management process are to be conducted as efficiently and economically as possible with centralized control to assure uniformity of practice and procedure across all departments. ERM is based upon the following basic goals: • Identify internal and external exposures to loss; select and implement loss prevention or reduction methods; and monitor results for future improvement; • Develop a risk financing program that combines risk retention techniques with the purchase of insurance to assure recovery from accidental loss using the most cost-effective methods possible; • Evaluate activities and assist departments and offices in making informed decisions regarding assumption or transfer of risk; • Work within the county's current business operating procedures to effectively develop and continuously reevaluate guidelines and procedures that maximize protection to the county. Insurance Insurance is an important tool used by Eagle County to strategically manage the transfer of its risk. Eagle County and its affiliates use a variety of different insurance products. Experts, including external consultants and the Risk Manager, should be consulted to determine need prior to executing an insurance policy.The criteria for procuring insurance should include the quality and scope of service, breadth of coverage and level of deductibles, financial stability of the insurance carrier, and cost. When losses occur, Eagle County will seek to recover any funds possible through its insurance program. Eagle County employees are expected to report any damages or accidents in one business day. Employees involved in the loss will be asked to provide an account of the circumstances that led to the loss, along with any photographic, video or testimonial evidence. Return to Table of Contents Page 31 - Financial Policies DocuSign Envelope ID:8CCA6127-6FE7-40C4-8A51-6B2834B98A2B Responsibilities Summary Department Heads and • Participate in the risk management program to the extent required and Elected Officials adhere to all applicable guidelines. • Promptly report any losses within the department or office to the Risk Manager. Employee • Act responsibly in the conduct of duties. • Participate in the risk management program to the extent required and adhere to all applicable guidelines. • Promptly report any losses to the supervisor or manager. Risk Manager • Administer risk management program. • File and track claims on behalf of the county. Return to Table of Contents Page 32- Financial Policies DocuSign Envelope ID:8CCA6127-6FE7-40C4-8A51-6B2834B98A2B DEBT POLICY EFFECTIVE DATE: 11/01/2022 POLICY STATEMENT: Eagle County will consider the issuance of debt and other long-term financial obligations on a case-by-case basis where it makes financial EAGLE COUNTY sense. Use of Financing Tools The issuance of debt or other long-term financial obligations will be considered on a case-by-case basis to fund major capital projects. Factors that will be considered to determine how to pay for a project include:the ability to seek grant funds,the ability to pay for the project from current revenues or budgeted resources(including excess fund balance), Eagle County's credit rating and the impact issuing debt could have on the rating, and external factors such as market demand and interest rates. Any debt issued shall not have a maturity date beyond the useful life of the asset being acquired or constructed by the debt proceeds.A plan must be in place to meet ongoing debt payments.The issuance of any long-term financial obligation must be approved by the Board of County Commissioners at a public hearing.The obligations must be properly budgeted and appropriated. County staff will monitor the municipal bond market and other appropriate markets to determine whether a prepayment or refunding of existing obligations is appropriate.This policy must be followed for the issuance of new obligations or refunding of existing obligations. Types of Financing Typical financing tools that will be considered are general obligation bonds, revenue bonds, mortgage notes, certificates of participation, conduit debt, overlapping debt, or lease/purchase agreements. Derivative debt instruments should not be considered. In all cases, issuance will follow federal, state, and local requirements, including the requirement of approval of Eagle County voters when applicable. The finance department and County Attorney's office will work with external partners, including underwriters, bond counsel,trustee, and rating agencies to effectuate debt issuance. Debt Limits Per Colorado Revised Statutes 30-35-201,the county's general obligation debt may not exceed 3% of the valuation for assessment. No debt that would violate this limit should be considered. Debt Structuring and Issuance Practices Given Eagle County's infrequent use of debt and a dynamic capital markets environment, when debt is considered, experts such as underwriters, bond counsel, and trustees, should be consulted to structure and issue debt in the most effective and efficient manner to meet the needs of the project being financed. Options for structuring and issuing debt should be considered by the Chief Financial Officer, County Manager, and County Attorney with approval given by the Board of County Commissioners in a public hearing. Return to Table of Contents Page 33 - Financial Policies DocuSign Envelope ID:8CCA6127-6FE7-40C4-8A51-6B2834B98A2B Debt Compliance and Reporting All debt or long-term financial obligations will have ongoing reporting requirements and the county will ensure compliance with all ongoing disclosure requirements as appropriate, including the secondary bond market as required by the Securities and Exchange Commission. • Annual payments must be budgeted and transacted. • All debt must be reported in the county's annual financial reports as appropriate. • Annual due diligence must be completed, including adherence to any requirements by external entities such as the trustee or lender. • When appropriate, arbitrage analysis must be completed. Responsibilities Summary County Manager • Recommend appropriate financing tool for approval by the Board of County Commissioners. Department Heads and • Obtain approval for the capital project. Elected Officials • Discuss appropriate funding tools with the finance department and County Manager's office. • Ensure annual compliance requirements are met. Attorney's Office • Review all documentation to ensure compliance with local, state, and federal law. Finance Department • Lead the analysis to determine the appropriateness of the issuance of long-term obligations. • Work with departments to ensure ongoing annual compliance requirements are met and properly recorded. Return to Table of Contents Page 34- Financial Policies DocuSign Envelope ID:8CCA6127-6FE7-40C4-8A51-6B2834B98A2B FINANCIAL POLICY VERSION CONTROL Policy Dated Supersedes Dated Budget Policy 11/01/2022 Financial Management Policies 06/16/2015 Financial Reporting Policy 11/01/2022 Financial Management Policies 06/16/2015 Business Expense Policy 11/01/2022 Financial Management Policies 06/16/2015 Purchasing Card Policy 11/01/2022 Financial Management Policies 06/16/2015 Procurement Policy 11/01/2022 Resolutions 14-001 and 14-003 01/21/2014 Payroll Policy 11/01/2022 Financial Management Policies 06/16/2015 Employee Gifts Policy 11/01/2022 N/A Fund Balance Policy 11/01/2022 Financial Management Policies 06/16/2015 Grants Policy 11/01/2022 Financial Management Policies 06/16/2015 Capital Improvements Fund Policy 11/01/2022 Financial Management Policies 06/16/2015 Signature Authorization Policy 11/01/2022 Resolution 2022-068 08/16/2022 Emergency Spending Authorization Policy 11/01/2022 Resolution 18-038 05/22/2018 Emergency Incident Funding Policy 11/01/2022 N/A Risk Management Policy 11/01/2022 Financial Management Policies 06/16/2015 Debt Policy 11/01/2022 Financial Management Policies 06/16/2015 Return to Table of Contents Page 35- Financial Policies