HomeMy WebLinkAbout10.d LB 2026-2027-04 Financial Performance Management Policy CLAY COUNTY UTILITY AUTHORITY
RESOLUTION NO. 2026/2027-04
A RESOLUTION OF CLAY COUNTY UTILITY AUTHORITY, AN
INDEPENDENT SPECIAL DISTRICT OF THE STATE OF
FLORIDA ("AUTHORITY"), INCORPORATING FINDINGS;
ADOPTING THE AUTHORITY'S FINANCIAL PERFORMANCE
MANAGEMENT POLICY; PROVIDING FOR CONFLICTS,
SEVERABILITY, AND EFFECTIVE DATE.
WHEREAS,the AUTHORITY intends to maintain sustainable financial management and
performance of the utility; and
WHEREAS, the AUTHORITY wishes to adopt its "Financial Performance Management
Policy" (herein so called) in the form as attached hereto as Exhibit "A" and hereby incorporated
by this reference, establishing reasonable and sustainable Financial Performance Management
Measures to guide budgeting, operational decision making, performance, and reporting.
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF SUPERVISORS OF
THE AUTHORITY AS FOLLOWS:
SECTION I. The foregoing findings are incorporated herein by reference and made a part
hereof.
SECTION II. The AUTHORITY hereby adopts the Financial Performance Management
Policy attached hereto as Exhibit "A" as its official Financial Performance Management Policy
relating to all of the subject matter set forth therein.
SECTION III. All other resolutions or part of resolutions in conflict with any of the
provisions of this Resolution are hereby repealed.
SECTION IV. If any section or portion of a section of this Resolution proves to be invalid,
unlawful,or unconstitutional,it shall not be held to invalidate or impair the validity, force,or effect
of any other section or part of this Resolution.
SECTION V. This Resolution shall become effective immediately upon its passage and
adoption.
1 CCUA Resolution No.2026/2027-04
DULY ADOPTED by the Board of Supervisors, Clay County Utility Authority, on this
6th day of October, 2026, effective as of October 1, 2026.
CLAY COUNTY UTILITY AUTHORITY,
BY ITS BOARD OF SUPERVISORS
By:
, Chairman
ATTEST: APPROVED AS TO FORM AND
LEGALITY:
By: By:
Janice Loudermilk, Secretary Grady H. Williams, Jr., LL.M.,
Clay County Utility Authority General Counsel
(Seal)
2 CCUA Resolution No.2026/2027-04
0,0 COU,\,,`
�fl
s4YAUTto*
POLICY & PROCEDURES
Financial Performance Management Policy
Effective Date: October 1, 2026
Revision Date: N/A
Section 1. Purpose
1.1. Clay County Utility Authority(the Authority) intends to maintain sustainable financial
management and performance of the utility. To achieve this purpose, the Authority's
Management defines within this policy the Financial Performance Management
Measures they shall report to the Board of Supervisors to comply with the adopted
Financial Management Resolution No. 2026/2027-04.
Section 2. Policy
2.1. The Authority establishes with this policy reasonable and sustainable Financial
Performance Management Measures to guide budgeting, operational decision making,
performance, and reporting.
Section 3. Goals and Objectives
3.1. The Authority's Management intends to lead the utility by sustainably and responsibly
managing to achieve and maintain specific Financial Performance Management
Measures. In achieving and maintaining these measures, the Authority will accomplish
the objectives listed below.
3.1.1. Use industry accepted measures to monitor and report on the Authority's financial
performance.
3.1.2. Establish and/or maintain sufficiently high bond and/or credit ratings to assure
access to affordable credit and low borrowing costs.
3.1.3. Guide the Authority's Board of Supervisors and leadership regarding debt
management.
3.1.4. Guide the Authority leadership and management regarding expected financial
budgeting, performance, and reporting.
3.1.5. Establish appropriate levels of operational funding, contingencies, and reserves for
emergency or extraordinary expenditures.
3.1.6. Establish appropriate revenue and debt ratios to maintain reasonable and
competitive rates, fees, and charges to all customer classes.
3.1.7. Establish Financial Performance Management Measures the Senior Leadership
Team shall report to the Board of Supervisors on a quarterly and annual basis.
3.1.8. Maintain flexibility to address future operational, capital, and financial needs of the
utility.
Page 1 of 6
Financial Performance Management Policy
Section 4. Definitions
4.1. Bond Resolution: The Authority's Resolution Number 1993/1994-27 Utilities System
Revenue Bond Resolution.
4.2. Budget: The annual operating and capital budgets prepared by the Authority's
Management and presented to the Board of Supervisors to set the Authority Service
and Capacity Rates, Fees, and Charges.
4.3. Capacity Fees: The fees charged by the Authority to new residential, commercial, and
industrial developments to reimburse the Authority for the costs to build the water,
wastewater, and reclaimed water treatment plant capital infrastructure to serve the
respective developments on a per Equivalent Residential Connection (ERC) basis.
Refer to the Authority's annual Rate Resolution for the specific adopted definition.
4.4. Capital Assets: The land and fixed assets (infrastructure).
4.5. Capital Improvements: The improvement of land and fixed assets to deliver water,
wastewater, and reclaimed water services.
4.6. Capital Improvement Program (CIP): the Authority's program identifying, planning,
budgeting, and reporting on CIP projects and their respective performance related to
their scope, schedule, and budget.
4.7. CIP Budget:the sum of all the individual CIP project budgets along with a Management
Reserve amount in either a single fiscal year, five (5) year, or ten (10) year period.
4.8. CIP Management Reserve: The funding identified within the CIP to serve as a final
reserve contingency fund should an individual project contingency be exhausted.
4.9. Contingency: Budgeted funds intended for unexpected or unforeseen operational
expenditures during a fiscal year or within the development of a CIP project.
4.10. Debt: An obligation resulting from the borrowing of money. Debt shall include bonds,
notes, loans, and capital leases.
4.11. Debt Coverage Ratio: Measurement of cash flow to pay short-term debt obligations.
4.12. Debt Ratio: Measurement of total liabilities to total assets.
4.13. Debt Service:Funding needed to pay the required principal and interest of a loan during
a given period.
4.14. Equivalent Residential Connection(ERC): The representation of water and wastewater
demands for an equivalent residential home connecting to the utility systems operated
and maintained by the Authority. Refer to the Authority's latest edition of the adopted
Service Availability policy for the current water, wastewater, and reclaimed demands
that make-up the ERC definition.
4.15. Fees: The amount charged by the Authority for specific services provided to customers.
Refer to the latest edition of the Authority's adopted Service Availability Policy for a
full list of fees.
4.16. Gross Revenue: The total dollar amount from the sales of water, wastewater, and
reclaimed water services, including miscellaneous income, through application of the
Authority's rates, fees, and charges described in the annual adopted Rate Resolution.
4.17. Net Debt Service: The annual amount of money required to pay or to be set aside for
the payment of principle and interest on the outstanding debt less 100% of the Debt
Service paid by funds not included as pledged revenues.
Page 2 of 6
Financial Performance Management Policy
4.18. Operating Income: Operating revenue minus operational expenses.
4.19. Operations Expenses: Expenses from operations incurred to operate and maintain the
Authority's utility systems to deliver services to customers.
4.20. Operating Ratio: Comparison of Total Operations and Maintenance Costs against Total
Operating Revenue.
4.21. Operating Revenues: Revenues generated from the sale and delivery of water,
wastewater, and reclaimed water services to customers plus miscellaneous income.
4.22. Rate(s) or Service Rates: The rates the Authority charges customers for the delivery of
water, wastewater, and reclaimed water services as defined in the annual Rate
Resolution adopted by the Board of Supervisors.
4.23. Rate Stabilization Fund: An annual fund set aside each fiscal year to mitigate spikes in
rates and smooth forecasted Rate increases.
4.24. Rate Resolution: The Authority's annual resolution approved by the Board of
Supervisors setting rates, fees, and charges.
4.25. Risk Reserve: An annual fund set aside for uninsured loss or damage to property or
equipment such as deductibles and retained portions of insurance. Funds may be used
for customer sewer back-ups, water damage, overflow claims, or unexpected expenses
associated with disasters or other contingencies.
4.26. Self-Insurance Fund: An annual fund set aside to insure against unexpected loss or
damage to property or equipment.
Section 5. Forecasting
5.1. The Authority shall maintain forecasts of population growth looking forward with one
(1), five (5), ten(10), fifteen(15), and twenty (20)year intervals.
5.1.1. The Authority shall maintain consistent population growth forecasts between the
operating and CIP budgeting processes.
5.2. The Authority shall consider information from the Authority's pace of meter
installations, Developer Agreements, Master Utility Agreements, Development
Services inquiries as well as publicly available information from available from Clay
County's Building Department, the University of Florida's Bureau of Economic and
Business Research(BEBR)and the United States Census Bureau in developing forecast
models.
5.3. The Authority Management will maintain a five(5)year forecast of cash flows for both
operational and CIP revenues and expenditures.
Section 6. Operational Budgeting
6.1. The Authority's Management shall prepare and present to the Board of Supervisors an
annual budget based upon estimated operational costs in accordance with the
Authority's enabling legislation, Chapter 94-491, Laws of Florida, Special Acts of
1994 (Special Act), which is duly recorded for public access and reference at OR BK
1524, PG 1798, current public records of Clay County, Florida.
6.2. Within the Operating expenses, the Authority's Management shall include an
operational contingency of roughly 5% of the operating expenses. Management shall
base the contingency upon the information available when the budget is developed.
Page 3 of 6
Financial Performance Management Policy
6.3. The Authority Management will aim to maintain 180 days of unrestricted cash on hand
to maintain operations in case of extraordinary emergencies or events.
6.3.1. Should the days of unrestricted cash on hand fall below the stated target,
Management shall inform the Board of Supervisors for those 30 calendar days of
such occurrence along with a plan to bring the days of unrestricted cash on hand
back to or above the target.
Section 7. Departmental Capital
7.1. The Department Capital Budget shall include a contingency of minimum 5% at the
time the budget is established.
Section 8. Capital Improvement Program(CIP)
8.1. The Authority shall establish a CIP budget for the capital projects planned to commence
in a fiscal year.
8.2. The Authority shall establish and maintain a CIP with five (5) fiscal years of planned
capital projects with a ten (10) year list of project needs.
8.2.1. The Authority's Management shall clearly identify whether the planned projects
will address system expansion with new infrastructure or renewal and replacement
of existing infrastructure.
8.2.2. Management shall forecast revenues over the planning horizons to inform the Board
of Supervisors on rates, fees, and charges to adequately fund the CIP.
8.3. The Authority shall establish a separate policy governing the implementation,
execution, and reporting of the CIP.
Section 9. Inflation Indexing using the Producer Price Index (PPI), Consumer Price Index (CPI),
and other inflationary measures.
9.1. The Authority recognizes the need to maintain purchasing power over the course of
time. To address this issue, The Authority's Management shall consider changes in the
PPI and CPI as published by the United States Bureau of Labor Statistics when
preparing budgets to establish rates, fees, and charges.
9.2. The Authority's Management may consider other inflationary measures in the
preparation of budgets to establish rates, fees, and charges so long as the source of such
inflationary measures are from documented and standardized source related to the
utility or associated industry.
Section 10. Capital Reserve for Renewal and Replacement of Capital Infrastructure
10.1. Management will in the annual operating budget maintain an additional Capital
Reserve beyond the Authority's Bond Resolutions Requirements (Section 6) to fund
CIP Renewal and Replacement Projects.
10.1.1. At a minimum, management will use 5% of the prior gross water, wastewater, and
reclaimed water service revenue, at the time of the calculation, in addition to the
Bond Resolution Requirements to fund CIP renewal and replacement projects of
existing infrastructure.
10.2. The Authority's Management will aim to address Renewal and Replacement CIP
through the planned Bond Resolution and Capital Reserve funding sources. Should the
Bond Resolution and Capital Reserve funding sources be insufficient in a given fiscal
year, the Authority's Management shall prepare a plan to address the CIP renewal and
replacement funding needs on an average pay-go basis over time (five (5) year basis)
Page 4 of 6
Financial Performance Management Policy
with the objective of maintaining funding sources within reasonable rates, fees, and
charges comparable to other utilities within the region.
Section 11. Risk Reserve
11.1. The Authority may elect to expand the Risk Reserve to minimize the annual
expenditure for property and inland marine insurance policies through higher
deductibles and use of self-insurance retentions or retained risk, or as it otherwise
deems producent for unexpected expenses. If the Authority elects to expand the Risk
Reserve, Management shall prepare recommendations for consideration by the Board
of Supervisors to establish the parameters itemized below.
11.1.1. For any expansion of the Risk Reserve that must comply with Section 5.08 of the
Authority's Bond Resolution, the Authority's Management shall:
11.1.1.1. Engage an insurance consultant to evaluate risks and recommend reserve
amounts and insurance coverages.
11.1.1.2. Provide the recommendations of the insurance consultant to the Board of
Supervisors for consideration.
11.1.2. Any other increase in the Risk Reserve shall be through the normal budget approval
process.
11.1.3. Any risk reserve shall be held in accounts to maintain liquidity and preserve the
accumulated funds.
11.2. In the event of a declared emergency, natural disaster, malevolent act, or other type of
unforeseen catastrophe warranting the use of monies from the Risk Reserve, the
Authority's Management shall request authorization from the Board of Supervisors
prior to use of the risk reserve funds.
Section 12. Rate Stabilization Fund
12.1. The Authority may elect to set aside funds on an annual basis to mitigate significant
future changes in potable water, wastewater, and reclaimed water rates, fees, and
charges. If the Authority elects to establish a Rate Stabilization Fund, Management
shall proceed in accordance with Section 4.09 of the Authority's Bond Resolution.
12.1.1. The initial maximum value the Rate Stabilization Fund may accumulate is
$3,000,000 in a given fiscal year.
12.1.1.1. The Authority shall evaluate the maximum value of the Rate Stabilization
Fund during the budget process each fiscal year. The Authority's
Management may propose changes to the maximum value of the Rate
Stabilization Fund for consideration by the Board of Supervisors.
12.1.2. In fiscal years when a proposed increase to the Authority's rates, fees, and charges,
could exceed the CPI plus three percent (CPI+3%), the Board of Supervisors may
approve the use of the Rate Stabilization Fund to maintain changes within CPI plus
two percent (CPI+2%).
12.1.2.1. The Authority's Management will propose the use of the Rate Stabilization
Fund to minimize the impact of a proposed rate increase during the annual
operating budget preparation and review process.
12.1.2.2. The Authority's use of the amount from the Rate Stabilization Fund to
minimize the impact of a proposed rate increase shall be disclosed in the
Page 5 of 6
Financial Performance Management Policy
advertisements of the annual operating budget and proposed rates, fees, and
charges.
Section 13. Financial Performance and Debt Management
13.1. Management shall monitor and report financial performance and debt ratios quarterly
and through the annual budget process as well as at the time of each debt issuance with
a goal to maintain liquidity and stability, to meet the following policy goals:
13.1.1. Maintain liquidity with an average 180 Days of Cash on Hand,
13.1.1.1. The average Days of Cash on Hand shall be calculated each calendar month,
13.1.1.2. Days of Cash on Hand = Undesignated Cash
Operating Expenses per Day
13.1.2. Maintain debt burden with respect to capital assets by maintaining a debt ratio of
40% or less,
13.1.2.1. Debt Ratio (%) = Total Liabilities
Total Assets
13.1.3. Maintain a debt service coverage at 1.5 or greater as a percentage of Net Revenue
Coverage.
13.1.3.1. Debt Service Coverage Ratio = Total Operating Revenue—Total O&M Costs
Total Debt Service
13.1.4. Maintain Current Ratio of 2.0 or greater.
13.1.4.1. Current Ratio = Current Assets
Current Liabilities
Section 14. Reporting Requirements
14.1. Management shall provide the Board of Supervisors financial statements and reports
on a quarterly basis.
Section 15. Rate Studies
15.1. The Authority shall engage a professional consultant with demonstrated expertise in
evaluating utility rates, fees, and charges at a minimum of once every five (5) years.
15.2. The professional consultant shall evaluate the Authority's rates, fees, and charges to
confirm costs are covered and policy objectives are being achieved.
15.3. The professional consultant shall provide the Authority's Board of Supervisors a
briefing upon completion of the evaluation of the Authority's rates, fees, and charges.
PROCEDURES & RESPONSIBILITIES
To.
CHANGE LOG
Date of Change Description of Change
Page 6 of 6