Agenda
Board of Finance - Agenda - Jul 21, 2026
Jul 21, 2026
A public record published by the Town of Simsbury (simsbury-ct.gov). mySimsbury indexes it and makes it readable; it is not the official copy. View the original file.
Page 1 of 2 Board of Finance Regular Meeting July 21, 2026 – 5:45 p.m. Simsbury Town Hall – Main Meeting Room 933 Hopmeadow Street *Meeting May Be Held in a Virtual Only Format if Inclement Weather is Expected on Day of Meeting* AGENDA Call to Order Pledge of Allegiance Public Audience Presentation: CliftonLarsonAllen Finance Director’s Report (Pages 1-8) Vacancy Sub-Committee Update Agenda Items a) Budget Planning Discussion b) Revaluation Selection Appointment c) Policy Review (Pages 9-84) Review of Minutes d) June 16, 2026 Regular Meeting Minutes (Pages 85-91) Communications e) PCard Agreement Example (Pages 92-93) f) Capital Improvement Project Request Form (Page 94) g) Simsbury Performing Arts Center Band Shell Expansion Project Update (Pages 95-98) Board of Finance Regular Meeting Agenda July 21, 2026 Page 2 of 2 Adjourn Board of Finance Meeting Schedule: 8/18/26, 9/15/26, 10/20/26, 11/17/26, 12/15/26, 1/12/27 Marc S. Nelson, MPA Amy Meriwether Town Manager Director of Finance/Treasurer FINANCE DEPARTMENT www.simsbury-ct.gov Mon. 8:30 a.m. – 7:00 p.m. Tel. (860) 658-3200 933 Hopmeadow Street Tue. Wed. Thu. 8:30 a.m. – 4:30 p.m. Fax. (860) 658-3206 Simsbury, CT 06070 Fri. 8:30 a.m. – 1:00 p.m. finance@simsbury-ct.gov MEMORANDUM To: Board of Finance From: Amy Meriwether, Finance Director/Treasurer cc: Marc Nelson, Town Manager Date: July 21, 2026 Subject: Finance Director’s Report Fiscal Year 2025/2026 Approved Supplemental Appropriations Below is a listing of supplemental appropriations approved by the Board of Selectmen and the Board of Finance as of June 30, 2026: Aquarion Paving Funds - $196,000 Eno Memorial Hall Parking Lot - $110,000 15 Sugar Loaf Cut Improvements - $100,000 State of CT Early Voting - $17,467 Public Works Crew Leader Truck - $63,100 Simsbury Clubhouse Hot Water Heater - $10,000 Total Supplemental Appropriations - $496,567 or 0.39% of the FY25/26 adopted budget Fiscal Year 2025/2026 Tax Abatements Below is listing of approved abatements and fiscal impact for the period ending June 30, 2026: Entity Address Assessment Reduction Tax Reduction Abatement Year Solectran 690 Hopmeadow 1,696,881 56,031 5 of 10 Ensign Bickford 632 Hopmeadow 1,366,717 45,129 5 of 10 Totals 3,063,598 101,1601 Fiscal Year 2025/2026 Grants Applications and Awards Below is a chart of all grant applications and their current status as of June 30, 2026: Grant Application Amount Status Enhanced Dial A Ride Grant 35,367 Awarded Youth Service Bureau 32,272 Awarded State of CT Early Voting Grant 17,467 Awarded FY26 Greater Hartford Transit District Dial A Ride Grant 6,660 Awarded Aging & Disability Commission's Souper Thursday 5,000 Awarded Tai Ji Quan Moving for Better Balance Grant 2,880 Awarded Simsbury Greater Together Community Grant - Souper Thursday Program 7,500 Denied Connecticut Humanities Quick Grant 2,017 Denied CRCOG LOTCIP Grant - County Rd/Hoskins Rd Intersection Improvements 1,300,000 Pending CT DEEP 2025 Recreational Trails Grant 248,000 Pending Fiscal Year 2025/2026 Savings Initiatives Police Department Bullet Proof Vest Grant anticipated to yield savings of approximately $10,500 Reduced the cost for uniform cleaning by approximately $10,000 moving to a uniform cleaning services instead of a monetary distribution. Most of the patrol fleet has been converted from combustion to hybrid cruisers and we continue to see a reduction in gallons of gas. Although overall department total gallon usage is not a true measure of savings due to combustion versus hybrid vehicles, it is an indicator. We have further data that shows a significant reduction in miles per gallon between the two types. The hybrids are getting on average 4‐5 more miles per gallon and the idle times are drastically reduced with the hybrid vehicles. The police budget in FY26 is for 3 hybrids to replace the last of the combustion engines. We also plan to have the 2025 model cost and not the 2026 model cost.2 Human Resources Transitioned retiree health benefits from Anthem to Retiree First. Monthly expenditures reduced from $25K/month to $17K/month. Library Through partnerships, collaborations and the use of volunteers to present programs, the Library saved over $56,000 in program costs. The Library’s membership in the CT Library Consortium (CLC) (annual dues of $971) saved the Library $54,170 in FY 2024/2025 with purchases made through CLC’s negotiated contracts. (Data just made available) Public Works New salt bids came out at the end of June which were considerably higher than the fiscal year 2025/2026 contract. Staff was able to pre-purchase salt using the 2025/2026 contract which resulted in $7,100 of savings. Pooled Investments The Town’s pooled cash deposit balance as of June 30, 2026 was $5,041,905.03. As of month-end, the investment balances for all funds combined were as follows: Type of Investment Amount Rate Maturity Date CT STIF $ 10,784,727.65 3.72% N/A NW - Money Market $ 10,094,082.30 3.76% N/A Liberty - Money Market $ 17,921,569.83 3.70% N/A TOTAL: $ 38,800,379.78 Financial Summary as of June 30, 2026 (NOT FINAL – INFORMATIONAL POINT IN TIME ONLY) Attached for review is the General Fund revenue and expenditure budget status report as of June 30, 2026. This financial information is not representative of final year-end results. It is preliminary and only represents a point in time.3 FY2026 FY2026 FY2026 6/30/2025 ORIGINAL AMENDED ACTUAL % Recvd Description BUDGET BUDGET As of 6/30/26 (NOT FINAL) $ Variance % Recvd (NOT FINAL) Notes (Prior Year Comparison) GENERAL GOVERNMENT TOWN MANAGER'S OFFICE 353,331 353,331 419,581 66,250 118.75% 109.77% Increased funding for State owned property and telephone access grant funding TOTAL GENERAL GOVERNMENT 353,331 353,331 419,581 66,250 118.75% 109.77% BOARDS & COMMISSIONS LAND USE COMMISSION 20,000 20,000 25,698 5,698 128.49% 115.31% Increased payments in the current year TOTAL BOARDS & COMMISSIONS 20,000 20,000 25,698 5,698 128.49% 115.31% TOWN CLERK TOWN CLERK 652,520 652,520 852,590 200,070 130.66% 93.52% Increased payments in the current year for conveyance taxes TOTAL TOWN CLERK 652,520 652,520 852,590 200,070 130.66% 93.52% INFORMATION TECHNOLOGY INFORMATION TECHNOLOGY 208,013 208,013 203,013 (5,000) 97.60% 100.00% TOTAL INFORMATION TECHNOLOGY 208,013 208,013 203,013 (5,000) 97.60% 100.00% FINANCE TAX DEPARTMENT 112,547,282 112,547,282 113,346,703 799,421 100.71% 101.15% FINANCE DEPARTMENT 2,325,945 2,325,945 2,983,288 657,343 128.26% 132.71% Higher interest rates in the prior year ASSESSOR'S OFFICE 6,000 6,000 4,526 (1,474) 75.44% 71.45% TOTAL FINANCE 114,879,227 114,879,227 116,334,517 1,455,290 101.27% 101.87% PLANNING & BUILDING BUILDING DEPARTMENT 900,000 900,000 1,394,723 494,723 154.97% 175.24% September and October 2024 permit fees totaled $428,003 for larger projects TOTAL PLANNING & BUILDING 900,000 900,000 1,394,723 494,723 154.97% 175.24% PUBLIC SAFETY POLICE DEPARTMENT 240,575 240,575 233,728 (6,847) 97.15% 104.01% ANIMAL CONTROL 100 100 285 185 285.00% 47.00% Increased animal control fines in the current year TOTAL PUBLIC SAFETY 240,675 240,675 234,013 (6,662) 97.23% 103.89% PUBLIC WORKS ENGINEERING 25,050 25,050 29,664 4,614 118.42% 136.92% Increased fees in the prior year ENO MEMORAL HALL 3,000 3,000 8,065 5,065 268.83% 480.00% Increased building rentals in the prior year HIGHWAY DEPARTMENT 3,250 3,250 - (3,250) 0.00% 236.60% Increased fees in the prior year TOTAL PUBLIC WORKS 31,300 31,300 37,729 6,429 120.54% 159.69% COMMUNITY & SOCIAL SERVICES ELDERLY/HANDICAPPED TRANSPORT 42,037 42,037 36,867 (5,170) 87.70% 100.00% Timing of DOT grant payment TOTAL COMMUNITY & SOCIAL SERVICES 42,037 42,037 36,867 (5,170) 87.70% 100.00% LIBRARY LIBRARY 15,800 15,800 18,223 2,423 115.34% 88.47% Total payments consistent year to year, budget decreased in the current year TOTAL LIBRARY 15,800 15,800 18,223 2,423 115.34% 88.47% GENERAL FUND REVENUE FINANCIAL COMPARISON4 FY2026 FY2026 FY2026 6/30/2025 ORIGINAL AMENDED ACTUAL % Recvd Description BUDGET BUDGET As of 6/30/26 (NOT FINAL) $ Variance % Recvd (NOT FINAL) Notes (Prior Year Comparison) PARKS & RECREATION PARKS & RECREATION 225,215 225,215 225,215 (0) 100.00% 100.00% COMMUNITY GARDENS 5,200 5,200 4,069 (1,131) 78.25% 71.48% MEMORAL POOLS & FIELDS 11,500 11,500 16,923 5,423 147.16% 97.72% Increased memorial pool receipts in the prior year TOTAL PARKS & RECREATION 241,915 241,915 246,207 4,292 101.77% 99.28% EDUCATION BOARD OF EDUCATION 8,626,737 8,626,737 8,397,588 (229,149) 97.34% 102.46% TOTAL EDUCATION 8,626,737 8,626,737 8,397,588 (229,149) 97.34% 102.09% INSURANCE INSURANCE REFUNDS - - 58,304 58,304 #DIV/0! #DIV/0! Payment not budgeted for TOTAL INSURANCE - - 58,304 58,304 #DIV/0! #DIV/0! INTERGOVERNMENTAL TRANSFER IN - BELDEN TRUST 28,930 28,930 36,090 7,160 124.75% 100.00% TRANSFER IN - SOCIAL SERVCES SRF 180,000 180,000 180,000 - 100.00% 0.00% TRANSFER IN - SIMSBURY FARMS FUND 95,225 95,225 95,225 - 100.00% 0.00% TRANSFER IN - CAPITAL PROJECT FUNDS 182,128 182,128 182,128 - 100.00% 100.00% TRANSFER IN - CAPITAL RESERVE FUND 1,304,132 1,304,132 1,304,132 - 100.00% 100.00% TOTAL INTERGOVERNEMENTAL 1,790,414 1,790,414 1,797,574 7,160 100.40% 64.99% TOTAL GENERAL FUND REVENUES 128,001,969 128,001,969 130,056,626 2,054,658 101.61% 102.12%5 FY2026 FY2026 FY2026 6/30/2025 ORIGINAL AMENDED ACTUAL % Spent Description BUDGET BUDGET As of 6/30/26 (NOT FINAL) $ Variance % Spent (NOT FINAL) Notes (Prior Year Comparison) GENERAL GOVERNMENT TOWN MANAGER'S OFFICE 397,365 408,572 415,383 (6,811) 101.67% 94.86% HUMAN RESOURCES 305,473 311,931 255,544 56,387 81.92% 0.00% New department in current year HEALTH DEPARTMENT 190,890 190,890 187,148 3,743 98.04% 100.00% LEGAL SERVICES 171,000 171,000 151,958 19,042 88.86% 143.79% Increased expenditures in the prior year from negotiations GENERAL GOVERNMENT 175,346 175,346 149,830 25,516 85.45% 72.15% Dues & subscriptions expenditures moved from Community Services budget and paid out TOTAL GENERAL GOVERNMENT 1,240,074 1,257,739 1,159,863 97,876 92.22% 100.23% BOARDS & COMMISSIONS ECONOMIC DEVELOPMENT COMMISSION 93,150 93,150 92,500 650 99.30% 84.45% Increased public agency support in the current year but budget was decreased BOARD OF FINANCE 59,660 59,660 55,043 4,617 92.26% 96.36% LAND USE COMMISSION 14,650 14,650 10,789 3,861 73.64% 57.09% Expenditure comparable from year to year, budget decreased BEAUTIFICATION COMMITTEE 6,000 6,000 4,039 1,961 67.32% 54.44% Increased expenditures in the current year for water DEI COUNCIL 4,550 4,550 3,650 900 80.21% 353.50% Increased expenditures in the prior year for contractual services PUBLIC BUILDING COMMISSION 2,000 2,000 572 1,428 28.61% 31.51% AGING & DISABILITY COMMISSION 7,250 7,250 9,446 (2,196) 130.29% 120.00% POLICE COMMISSION 750 750 - 750 0.00% 4.00% PARKS & REC COMMISSION 750 750 142 608 18.87% 0.00% No expenditures in the prior year TOTAL BOARDS & COMMISSIONS 188,760 188,760 176,181 12,579 93.34% 90.29% SELECTMEN - COMMUNITY SERVICES COMMUNITY SERVICES 242,358 247,358 234,306 13,052 94.72% 85.69% Dues & Subscriptions expenditures moved to General Government budget in the current year. TOTAL SELECTMEN - COMMUNITY SERVICES 242,358 247,358 234,306 13,052 94.72% 85.69% PROBATE REGIONAL PROBATE COURT 13,874 13,874 13,205 669 95.18% 100.00% TOTAL PROBATE 13,874 13,874 13,205 669 95.18% 100.00% ELECTION ADMINSTRATION ELECTION ADMINISTRATION 183,783 183,783 175,394 8,389 95.44% 93.81% TOTAL ELECTION ADMINSTRATION 183,783 183,783 175,394 8,389 95.44% 93.81% TOWN CLERK TOWN CLERK 294,904 301,235 287,701 13,534 95.51% 94.52% TOTAL TOWN CLERK 294,904 301,235 287,701 13,534 95.51% 94.52% INFORMATION TECHNOLOGY INFORMATION TECHNOLOGY 547,615 555,926 500,531 55,395 90.04% 93.58% TOTAL INFORMATION TECHNOLOGY 547,615 555,926 500,531 55,395 90.04% 93.58% FINANCE FINANCE DEPARTMENT 639,191 668,061 656,237 11,824 98.23% 97.93% GENERAL FUND EXPENDITURE FINANCIAL COMPARISON6 FY2026 FY2026 FY2026 6/30/2025 ORIGINAL AMENDED ACTUAL % Spent Description BUDGET BUDGET As of 6/30/26 (NOT FINAL) $ Variance % Spent (NOT FINAL) Notes (Prior Year Comparison) ASSESSOR'S OFFICE 411,988 420,043 382,899 37,144 91.16% 88.46% TAX DEPARTMENT 201,300 205,022 191,137 13,885 93.23% 90.52% TOTAL FINANCE 1,252,479 1,293,126 1,230,273 62,853 95.14% 93.49% PLANNING & BUILDING PLANNING DEPARTMENT 429,777 441,116 417,902 23,214 94.74% 92.17% BUILDING DEPARTMENT 333,502 340,496 347,626 (7,130) 102.09% 87.37% Fully staffed in the current year TOTAL PLANNING & BUILDING 763,279 781,612 765,528 16,084 97.94% 90.11% PUBLIC SAFETY POLICE DEPARTMENT 6,157,228 6,017,558 5,714,418 303,140 94.96% 95.51% DISPATCH 615,550 615,550 573,964 41,586 93.24% 97.51% ANIMAL CONTROL 80,166 82,084 58,096 23,988 70.78% 88.69% Staff vacancy in the current year EMERGENCY MANAGEMENT 73,012 73,012 73,043 (31) 100.04% 88.76% Increased tech and program supply purchases in the current year offset by a decreased budget TOTAL PUBLIC SAFETY 6,925,956 6,788,204 6,419,520 368,684 94.57% 95.56% PUBLIC WORKS HIGHWAY DEPARTMENT 3,223,578 3,434,167 3,462,498 (28,331) 100.82% 99.77% BUILDINGS & MAINTENANCE 576,848 589,665 576,720 12,945 97.80% 101.85% ENGINEERING 370,614 377,835 339,585 38,250 89.88% 92.20% Increased use of consultant in the prior year PUBLIC WORKS ADMINISTRATION 384,340 393,811 386,094 7,717 98.04% 92.50% TOWN OFFICE BUILDINGS 208,100 208,100 175,874 32,226 84.51% 107.03% Budget increased, expenditures decreased compared to the prior year LIBRARY 196,501 196,501 150,916 45,585 76.80% 93.06% Budget increased, expenditures decreased compared to the prior year ENO MEMORAL HALL 104,841 104,841 93,703 11,139 89.38% 94.33% Budget increased, expenditures decreased compared to the prior year OTHER BUILDINGS 49,343 49,343 40,156 9,187 81.38% 94.54% Budget increased, expenditures consistent from year to year LANDFILL 87,000 87,000 94,375 (7,375) 108.48% 91.64% Increased household hazardous waste expenditures TOTAL PUBLIC WORKS 5,201,164 5,441,263 5,319,919 121,343 97.77% 98.70% COMMUNITY & SOCIAL SERVICES SOCIAL SERVICES ADMINISTRATION 358,351 365,842 355,450 10,392 97.16% 97.17% SENIOR CENTER SERVICES 174,247 177,987 175,918 2,069 98.84% 93.19% TRANSPORTATION SERVICES 182,409 182,409 197,333 (14,924) 108.18% 102.16% Increased Enhanced Dial A Ride payments in the current year TOTAL COMMUNITY & SOCIAL SERVICES 715,007 726,238 728,701 (2,463) 100.34% 97.43% LIBRARY LIBRARY 1,824,821 1,863,583 1,812,645 50,938 97.27% 93.82% TOTAL LIBRARY 1,824,821 1,863,583 1,812,645 50,938 97.27% 93.82% PARKS & RECREATION PARKS & OPEN SPACE 1,156,841 1,178,392 1,153,614 24,778 97.90% 95.32% MEMORIAL POOL 95,225 95,225 120,795 (25,570) 126.85% 75.37% Sewer use fees paid in July in the prior year, not yet in the current year RECREATION ADMINISTRATION 77,648 82,964 76,743 6,221 92.50% 95.76% MEMORIAL FIELD 42,041 42,041 31,098 10,943 73.97% 81.85% TOTAL PARKS & RECREATION 1,371,756 1,398,622 1,382,251 16,372 98.83% 93.61%7 FY2026 FY2026 FY2026 6/30/2025 ORIGINAL AMENDED ACTUAL % Spent Description BUDGET BUDGET As of 6/30/26 (NOT FINAL) $ Variance % Spent (NOT FINAL) Notes (Prior Year Comparison) EDUCATION BOARD OF EDUCATION 88,823,111 88,823,111 88,717,627 105,484 99.88% 100.00% TOTAL EDUCATION 88,823,111 88,823,111 88,717,627 105,484 99.88% 100.00% EMPLOYEE BENEFITS EMPLOYEE BENEFITS 7,830,160 7,804,160 7,770,205 33,955 99.56% 99.47% TOTAL EMPLOYEE BENEFITS 7,830,160 7,804,160 7,770,205 33,955 99.56% 99.47% INSURANCE LIABILITY INSURANCE 519,523 534,523 561,228 (26,705) 105.00% 98.61% Heart & hypertension settlement in the current year TOTAL INSURANCE 519,523 534,523 561,228 (26,705) 105.00% 98.61% TRANSFERS TRANSFER OUT - SIMSBURY FARMS 151,715 151,715 151,715 - 100.00% 100.00% TRANSFER OUT - MSP SENIOR FUND 10,480 10,480 10,480 - 100.00% 100.00% TRANSFER OUT - YOUTH SERVICE BUREAU 8,000 8,000 8,000 - 100.00% 100.00% TRANSFER OUT - ATHLETICS FIELDS 2,250 2,250 2,250 - 100.00% 100.00% TRANSFER OUT - SIMSBURY CELEBRATES 5,300 5,300 5,300 - 100.00% 100.00% CONTINGENCY RESERVE 264,493 - - - #DIV/0! 0.00% CONTINGENCY VACANCY (350,000) (350,000) - (350,000) 0.00% 0.00% TRANSFER OUT - CNR 416,250 416,250 416,250 - 100.00% 100.00% TOTAL TRANSFERS 508,488 243,995 593,995 (350,000) 243.45% 243.45% DEBT SERVICE PRINCIPAL 7,103,207 7,103,207 6,930,000 173,207 97.56% 102.03% INTEREST 2,451,650 2,451,650 2,229,625 222,025 90.94% 93.06% TOTAL DEBT SERVICE 9,554,857 9,554,857 9,159,625 395,232 95.86% 99.79% TOTAL GENERAL FUND EXPENDITURES 128,001,969 128,001,969 127,008,700 993,269 99.22% 99.51%8 Page 1 of 1 Board of Finance Agenda Item Submission 1. Title of Submission: Policy Review 2. Date of Board Meeting: July 21, 2026 3. Individual or Entity Making the Submission: Amy Meriwether, Finance Director 4. Action Requested of the Board of Finance: Board of Finance review and approval in accordance with the updated policies attached to this document. 5. Summary of Submission: Policy review on a regular basis ensures the Town’s policies remain effective and in compliance with best practice. The Board of Finance has gone through several policies over the last few years and made various updates. Attached is a complete indexing of all Finance policies for annual review by and potential update at the Board’s discretion. Staff is requested Board of Finance review of the proposed updates for comment and feedback. 6. Financial Impact: None 7. Description of Documents Included with Submission: Finance Policy Index Board of Finance Rules of Procedure Purchasing Policy and Ordinance Capital Planning & Financing Policy Debt Management Policy Fund Balance Policy Town Funds Investment Policy Defined Benefit Plan Pension Investment Policy Defined Contribution Plan Investment Policy OPEB Trust Investment Policy Board of Education Non-Lapsing Policy Policy for Amending the Budget, Budgetary Transfers and Supplemental Appropriations Structurally Balanced Budget Policy9 Policy Last Date of Revision Last Date of Review Board of Finance Rules of Procedure May 2026 May 2026 Purchasing Policy & Ordinance January 2021 September 2025 Capital Planning & Financing Policy November 2025 November 2025 Debt Management Policy March 2021 September 2025 Fund Balance Policy November 2025 November 2025 Town Funds Investment Policy August 2022 September 2025 Defined Benefit Plan Pension Investment Policy October 2022 September 2025 Defined Contribution Plan Investment Policy May 2021 September 2025 OPEB - Retiree Health Care Trust Investment Policy September 2022 September 2025 BOE Non-Lapsing Policy March 2015 September 2025 Budgetary Transfers & Supplemental Appropriations September 2021 September 2025 Structurally Balanced Budget Policy August 2022 September 2025 Town of Simsbury Finance Policy Index10 TOWN OF SIMSBURY BOARD OF FINANCE RULES OF PROCEDURE Adopted by the Board of Finance on January 21, 2020 Reviewed by the Board of Finance on September 25, 2024 Revised by the Board of Finance on September 16, 2025 Revised by the Board of Finance on May 19, 2026 BE IT RESOLVED, that the Board of Finance adopts the following rules of procedure: 1. The Board of Finance (Board) adopts Robert’s Rules of Order as a general guide for the conduct of all regular and special meetings. Additionally, the Board will conduct its business in accordance with all other applicable rules and regulations including the Connecticut General Statutes and the Town Charter. 2. A biennial organizational meeting of the Board will be held on the first regularly scheduled meeting following the date on which newly elected Board members take the oath of office. The organizational meeting will be called to order by the Chairperson or the Vice‐Chairperson, in that order of priority, provided one of these officers is still a member of the Board. If none of the Board officers from the preceding year is presently a member of the Board, any Board member present may call the meeting to order. A temporary Chairperson will be chosen by a majority of those members present. The temporary Chairperson will preside until a successor is elected. The newly elected Chairperson will take office upon election and preside over the elections of the Vice‐Chairperson. 3. If such officers are not chosen within one month after the appointment or election of The Board because of a tie vote of the members, the two leading contenders may agree to be co‐chairs, sharing responsibilities equally. If they do not agree to such co‐chairmanship, the Board of Selectmen shall choose such officers from the membership of the Board, pursuant to C.G.S. Chapter 106, Sec. 7‐342. If the Board of Selectmen also fails to elect such officers due to a tie vote of its members, the two leading contenders shall flip a coin to determine which shall be chair. The other shall be vice chair. 4. In the event of a mid‐term vacancy in the position of either Chair or Vice‐Chair, an election shall be held at the next regularly scheduled meeting to fill such vacancy. The duly published notice for such meeting shall include the election as the first agenda item. Following the protocol in items 2 & 3 above, a successor shall be elected. 5. At all meetings of the Board, four members shall constitute a quorum and the concurrence of three votes shall be necessary for the transaction of business. 6. When possible, the agenda along with relevant resource material will be distributed to the Board members three (3) to seven (7) days prior to the meeting. Items not specifically included on the agenda may be included by a 2/3 vote of those present and voting. From time to time, the Board may schedule special meetings or regular meetings devoted to a particular topic or topics. In accordance with Connecticut General Statutes, no items will be added to a special meeting agenda. 7. A member of the Board may have an item placed on the agenda by contacting the Chairperson at least (7) days prior to the meeting. 8. All Board of Finance regular and special meetings shall include a public audience period at the beginning of the meeting, providing any member of the public an opportunity to speak for three (3) minutes. Any resident so speaking shall identify him/herself by name and address and if he/she is representing a group or11 organization, he/she may so state. The Chair may, at his or her discretion, recognize specific members of the public for participation on an agenda item under discussion, if he or she feels that member of the public has knowledge or input of value to the board. 9. Members of the Board may participate by telephone or similar electronic means when physically unable to attend. 10. The Board may, from time to time, vote to establish temporary subcommittees consisting of both Board members and non‐board members, to investigate items, provide analysis and make recommendations to the board. 11. The Board shall review and re‐adopt or revise all Board of Finance policies at least every 5 years. 12. In accordance with Chapter 14, Section 1‐225 of the CGS, entitled Freedom of Information Act, the votes of each member of the Board of Finance shall be recorded in the minutes and made available to the public. A draft of the minutes shall be available to the public within 7 days. The minutes shall be posted on the town’s website when available.12 TOWN OF SIMSBURY PURCHASING PROCEDURES AND GUIDELINES Adopted by the Board of Finance on November 14, 2018 Revised by the Board of Finance on January 19, 2021 Revised by the Board of Finance on September 25, 2024 Revised by the Board of Finance on September 16, 2025 I. Purpose The purpose of this policy is to ensure that the Town of Simsbury obtains the highest quality of desired goods and services at the most competitive price. Further, this policy aims to streamline the procurement process while maintaining adequate internal controls. II. Applicability This policy applies to all staff, elected officials, and appointed officials involved in the procurement process. III. Effective Date This policy shall remain in effect until revised or rescinded. The Town reserves the right to amend this policy as necessary. IV. Policy A. Purchasing Agent The Finance Director or his/her designee shall serve as the purchasing agent for the Town of Simsbury. He/she shall be responsible for the procurement of all goods and services as outlined in Chapter A161 of the Code of the Town of Simsbury. The Town Manager or his/her designee shall also be responsible for signing all contracts awarded to a vendor. B. Competitive Quotes/Bid Thresholds All purchases between $10,000 ‐ $25,000 shall have quotes solicited from at least two (2) vendors. Vendor quotes can be written or verbal. Bids shall be issued for purchases in excess of $25,000 and require a formal written contract unless the Town can take advantage of a regional, state, local government or cooperative agency contract. This applies to annual orders (items purchased on volume basis) as well. Bid bonds will be evaluated as part of the bid process. The department head, in conjunction with the Finance Director, will determine if the inclusion of a bid bond is in the best interest of the town. A request for qualifications along with a request for proposal shall be issued for professional services (i.e. legal, engineering, architectural, etc.) contracts in excess of $50,000 unless the Town can take advantage of a regional, State or cooperative agency contract. Bid procedures outlined herein can be waived at any time if it is deemed to be in the best interest of the Town of Simsbury by the Finance Director and the Town Manager. All waivers shall be reported to the Board of Selectmen at the next regularly scheduled meeting for review.13 Federal Grant Requirement: Bids shall be issued for purchases in excess of $10,000 (or most recent update to the 2 CFR 200.318 – General Procurement Standards included in the Code of Federal Regulations) Federal Grant Requirement: Statement of Responsibility – The Town is responsible, in accordance with good administrative practice and sound business judgement, for the settlement of all contractual and administrative issues arising out of procurements. Federal Grant Requirement: If any prequalified list of persons, firms, or products are used in acquiring goods and services, they must be current and include enough qualified sources to ensure maximum open and free competition. Federal Grant Requirement: All necessary affirmative steps must be taken to assure that minority businesses, women’s business enterprises, and labor surplus area firms are used when possible. Federal Grant Requirement: An independent cost or price analysis must be performed in connection with every procurement action in excess of the Simplified Acquisition Threshold (currently set at $3,000) C. Contracts and Credit Applications All credit applications shall be completed and signed by only the Finance Director or his/her designee. All vendor contracts shall be completed and signed by the Town Manager or his/her designee. It is the responsibility of the department head and Finance Director to ensure that contractors perform in accordance with the terms, conditions and specifications in their contracts or purchase orders. D. Conflicts of Interest A conflict of interest would arise when the employee, officer, or agent, any member of his or her immediate family, his or her partner, or an organization which employs or is about to employ any of the parties indicated herein, has a financial or other interest in or a tangible personal benefit from a firm considered for a contract. Any conflict of interest must be disclosed in writing to the Finance Director. The conflict statement will be reviewed by the Finance Director as well as the Town Manager and a determination will be made as to whether to proceed with the respective vendor and formalized in writing. If the conflict of interest resides with the Finance Director or Town Manager, the Deputy Town Manager will assist in the review and final determination as to whether to proceed with respective vendor.14 Federal Grant Requirement: No employee, officer, or agent must participate in the selection, award, or administration of a contract supported by a Federal award if he or she has a real or apparent conflict of interest (as defined above). E. Vendor Selection The following considerations shall be evaluated during the process of vendor selection: The Town is encouraged to take advantage of the lowest possible price while obtaining the highest quality products and services. The Town shall ensure the selected vendor is able to provide the products/services in a timely manner. The acquisition of unnecessary or duplicative items must be avoided. Consideration should be given to consolidating or breaking out procurements to obtain a more economical purchase. Where appropriate, an analysis will be made of lease versus purchase alternatives, and any other appropriate analysis to determine the most economical approach. The Town is encouraged to use refurbished, excess and surplus property in lieu of purchasing new equipment and property whenever such use is feasible and reduces project costs. The Town is encouraged to use value engineering clauses in contracts for construction projects of sufficient size to offer reasonable opportunities for cost reductions. Contracts shall only be awarded to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement. Consideration will be given to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources. Local Vendor Benefit – If any Simsbury based vendor responds to a bid notice and comes within 5% of the lowest bidder, all qualifications considered equal, the local based vendor will be allowed the opportunity to adjust their bid to match that of the lowest bidder. Federal Grant Requirement: The Town may use time and material type contracts only after a determination that no other contract is suitable and if the contract includes a ceiling price that the contractor exceeds at its own risk. Federal Grant Requirement: For all infrastructure projects after May 14, 2022, all iron, steel, manufactured products, and construction materials used in covered infrastructure projects are required to be produced in the United States in accordance with the Build America Buy America Act.15 F. Grant Funded Purchases All purchases utilizing grant funds shall follow the Town purchasing policies and procedures as established in this policy or as required by the grant agreement. G. Emergency Purchases An emergency purchase exists when the operation of a department would be seriously hampered; or in which life, limb or property may be endangered; or in which the health or welfare of the general public is seriously threatened; or a natural or man‐made disaster has occurred. If an emergency determination is made by the Town Manager or Finance Director it may be necessary to deviate from the formal purchasing process. Once the emergency situation has been rectified, all purchases made related to this emergency shall be formalized by the purchasing process as soon as possible. If a contract is required as part of rectifying the emergency situation, consideration should be made to a short‐term contract with limited authority whenever possible.16 Chapter A161. Purchasing § A161-1. Purpose; objectives. A. Be it resolved by the Board of Selectmen of the Town of Simsbury that in order to amplify Section 812 of the Town Charter and to provide a systematic and uniform standard of purchasing policies, the Board hereby adopts the following procedures which are incorporated into this chapter. B. Purchasing objectives: (1) To procure materials, supplies, equipment, public improvements, and services at the lowest cost while obtaining the highest quality products and services possible. (2) To conduct purchasing without regard to political affiliation, race, color, creed, sex, age, religion, national origin, marital status, sexual orientation, genetic makeup, gender identity, military service and veteran’s status, disability, or any other protected class, family relationship or business associations of vendors, contractors or consultants. § A161-2. Purchase orders required. All proposed purchases shall be supported by a purchase order, signed by the issuing Department Head and the Finance Director or his/her agent. Oral approval may be given in emergencies but shall be followed immediately by a written purchase order. Notwithstanding the provisions of this section, the Finance Director may allow budgeted agencies to use purchasing cards for purchases not exceeding $1,000, unless such agency receives written approval from the Finance Director to exceed such amount. No budgeted agency, or any official, employee or agent of a budgeted agency, shall incur any obligation using such a card, except in accordance with procedures established by the Finance Director. § A161-3. Annual orders. Annual orders of items used on a volume basis, which exceed, in the aggregate, $10,000, shall follow the procedures outlined below. § A161-4. Verbal and written quotes. Purchases in excess of $10,000 but less than $25,000 shall have documented via verbal or written quotes, whenever possible, from at least two vendors. § A161-5. Bids; contracts required. A. Purchases or contracts expected to exceed $25,000 shall require formal sealed bids and the execution of a written contract between the, qualified bidder and the Town. Such sealed bids shall be opened in public at the time and place designated in the specifications. The Town may accept substitutes that meet the same criteria as outlined in the specifications. Requests for formal sealed bids shall be issued by the issuing department head, received by the date due and turned in to the Finance Director.17 B. Purchases or contracts expected to exceed $25,000 shall be advertised at least 10 days prior to the bid opening on a website such as but not limited to the CT Department of Administrative Services website or the Town’s official website as a means of a formal "invitation to bid." C. An appropriate fee may be charged for a copy of plans and specifications, said fee, or portion thereof, to be refunded upon return of the plans and specifications within the designated period. D. Bid bonds will be evaluated as part of the bid process. The Department Head, in conjunction with the Finance Director, will determine if the inclusion of a bid bond is in the best interest of the Town. § A161-6. Awarding of contract. The Finance Director or his/her designee or Town Manager or his/her designee is authorized to award contracts. § A161-7. Signing of purchase orders or contract. A. The Finance Director or his/her designee and/or Town Manager or his/her designee is authorized to sign all purchase orders. The Town Manager or his/her designee is authorized to sign all formal contracts approved under the appropriate procedure as stipulated herein. B. Under an existing contract, any change order which increases the contract amount shall be subject to prior budgetary approval by the Finance Director and approved by the Town Manager or his/her designee, for any change in the scope of the project. § A161-8. Rejection of bids. The board, person or agent having the authority to award may reject any or all bids, part of all bids or all bids for any one or more supplies or contractual services included in the proposed contract, or waive defects in same when the public interest will be served best thereby. § A161-9.1. Local vendor preference; Town-based business. If any Simsbury based vendor responds to a bid notice and comes within 5% of the lowest bidder, all qualifications considered equal, the local based vendor will be allowed the opportunity to adjust their bid to match that of the lowest bidder. § A161-10. Exemption from bids. A. Purchases made through or on the basis of regional, state, local government or cooperative agency bids shall be exempted from any bidding procedures. B. A purchase may be made or contract awarded for a supply, service or construction item without a competitive bid when it is determined that there is only one source for the required supply, service or construction item. C. The bid procedures outlined herein can be waived at any time if it is deemed to be in the best interest of the Town of Simsbury by the Finance Director and the Town Manager. All waivers shall be reported to the Board of Selectmen at the next regularly scheduled meeting for review.18 § A161-11. Professional services contracts. Contracts for professional services (legal, engineering, architectural, etc.) in excess of $50,000 are required to go out for a request for qualifications (RFQ). Services under $50,000 shall not be governed by these regulations, but every effort shall be made to secure well‐qualified professionals at the best terms possible for the Town. § A161-12. Emergencies. A. In case of emergency the Finance Director may, or in the best interest of the Town, the Town Manager may, waive the procedures outlined herein. B. Emergency situations shall be those in which the operation of a department would be seriously hampered; or in which life, limb or property may be endangered; or in which the health or welfare of the general public is seriously threatened; or a natural or man‐made disaster has occurred § A161-13. When effective; revisions. These bidding and purchasing regulations shall become effective as of November 14, 2018, and may be revised or amended from time to time by formal action of the Board of Selectmen. § A161-14. Board of Education transactions. Separate procedures shall be established for Board of Education transactions. § A161-15. Conflict with Charter or state law. In the event of any conflict between these procedures and the Charter of the Town of Simsbury or the Connecticut General Statutes, these procedures shall be construed to conform to the Charter or statutes, as the case may be. § A161-16. Review and adoption. The procedures outlined herein shall be reviewed, amended, and adopted by the Board of Selectmen as needed. These procedures shall remain in effect until amended.19 TOWN OF SIMSBURY CAPITAL PLANNING & FINANCING POLICY Adopted by the Board of Finance on November 18, 2025 [Replaces the Capital Asset Policy and the Capital and Capital Non-Recurring Policy] I. Purpose This policy outlines guidance for the planning, financing, review, coordination, and monitoring of capital assets and capital improvements to effectively maintain and update the Town’s infrastructure. This policy establishes general financing goals and the specific elements that comprise a long‐ range planning and financing strategy, including capital financing guidelines and the transfer of funds to and from the Capital Projects Funds, Capital and Non‐Recurring Fund and Capital Reserve Fund. The goals of this policy are to: 1. Make a strong commitment to the strategic management of the Town’s capital planning and financial process 2. Maintain the Town’s physical assets by providing funding in its operating and capital budgets to protect its capital investments 3. Promote financial stability and focus attention on the Town’s long‐term financial capacity to meet its needs 4. Emphasize preventive maintenance as a cost‐effective approach to capital investment. 5. Maintain the Town’s “AAA” credit rating and strategically utilize debt 6. Provide a framework for monitoring capital financing practices and results 7. Effectively communicate the Town’s priorities and plans for undertaking capital projects to internal and external stakeholders II. Capital Asset Definition Capital assets are real or personal property that have a value equal to or greater than the capitalization threshold for the particular classification of asset and have an estimated life of greater than one year. The town has estimated capitalization thresholds and corresponding useful lives for each for each asset category as outlined below:20 Asset Category Threshold Useful Life Equipment >$10,000 > 5 Years Improvements >$20,000 > 10 Years Infrastructure >$100,000 > 10 Years Capital assets include, but are not necessarily limited to: Land/Land Improvements/Easements Buildings/Building Improvements Vehicles/Machinery/Equipment Art and historical treasures Infrastructure (new roads, bridges, tunnels, drainage systems, water and sewer systems, dams and lighting)/Infrastructure Improvements Improvements to infrastructure Renovations to existing capital items that extend their useful lifespans, and increase usage or efficiency. Group purchases: Capital expenditures are best applied to individual items rather than to groups of similar items (e.g., desks and tables), unless the effect of doing so would be to eliminate a significant portion of total capital assets. For example, a large order of library books meant to outfit or expand a library facility may be aggregated for capitalization, but ongoing acquisitions to replace volumes and keep the collection up to date should not. Road Improvements and Other Improvements Resurfacing is considered to be road maintenance. Improvements that expand capacity are to be capitalized (ie changing a one lane road to two, or adding a turning lane or paving unimproved road) Replacing a roof, carpeting, windows (unless the replacement has other benefits) are considered maintenance and should not be capitalized If the improvement increases capacity, use or significantly increases the useful life, then it should be capitalized if it is over the threshold. Non-Capital Expenditures Certain expenditures may be placed in the capital budget that are not capitalized. Those items will be identified and labeled. Examples include:21 Major operational studies, including a study of organizational and management needs, or the preparation of a long‐term need assessment for local services. Large non‐recurring expenditures that increase capacity, use or significantly increase the useful life (like painting a bridge). Planning, engineering and design studies for capital projects. III. Capital Asset Inventory To support a systematic acquisition and replacement schedule, the Finance Director will annually update and maintain a detailed inventory of all capital assets, which shall include: 1. A description of the asset; 2. The year the asset was acquired or constructed and original cost; 3. Remaining useful lifespan; 4. Depreciated value of assets The Town will conduct a regular physical inventory of assets no less frequently than once every five years. IV. Recording of Assets Assets will be recorded individually to the extent possible to ensure proper accountability and accurate depreciation, and to allow for specific identification for the recording of disposition. Donated assets are to be recorded at the fair market value at the date of gift. Department heads are responsible for completing the fixed asset addition form for all assets donated above the capitalization and accountability thresholds. V. Depreciable Lives 1. Depreciable lives should be based on actual expected use by the Town, not by tax lives or other general estimates. 2. Capital assets will be depreciated over their useful lives unless they are inexhaustible. An example of an inexhaustible asset includes land. 3. An attempt should be made to purchase assets in a manner that the depreciable lives coincide with the Town’s capital replacement program for such assets.22 4. Department heads should be consulted on the specialty equipment used by their departments for depreciable lives. 5. Useful life guidelines for the town: Roads: 30‐50 years Sewer Lines and Water Lines: 50 years Bridges/Large Culverts: 30‐50 years Dams: 50 Years Buildings: 50‐75 years Fire Equipment: 20‐25 years Ambulances: 5 years Vehicles: 5‐15 years (Autos, Light Trucks, Heavy Trucks) Machinery and Equipment: 5‐10 years Construction Equipment: 5 years 6. For construction‐in‐progress updates, the asset record from the previous year will be used until the asset is complete and transferred to the appropriate category. VI. Depreciable Lives On an annual basis the Finance Director will a complete listing of all capital assets to department heads. Department heads shall review the assets associated with their respective departments to ensure completeness noting any updates or disposals. All updates to the asset listing shall be documented and returned to the Finance Director. Asset Impairments: If an asset has suffered a significant impairment in function or useful life due to level of use, accident or other damage, the event with the estimated effect of the impairment and any intent to repair the asset to its original condition should be reported to the Finance Director. VII. Multi-year Capital Improvement Plan (CIP) The CIP is a forecast of major capital projects and acquisitions over a six‐year period. 1. The purpose of the CIP is to provide for the timely replacement and rehabilitation of existing capital assets and the purchase of new assets; to coordinate community planning, fiscal capacity and physical development; to allow time for project design, financing, and the identification of sites and land purchases; to further economic23 and community development; to maintain the Town’s credit rating; and to facilitate intergovernmental agreements and private‐public partnerships. 2. The CIP shall incorporate Government Financial Officers Association (GFOA) best practices and other information that may be required by the Board of Selectmen or Board of Finance. At a minimum, the CIP shall include a capital asset inventory summary by department, a status update of previously approved projects, prioritization of projects and estimated costs, future operating and maintenance costs associated with the project, funding sources, timetables for construction and completion, project justification, and a long‐term financial plan in compliance with the Town’s Debt Service Policy and other financial policies, as may be amended from time to time. 3. The capital plan shall be prepared and updated annually by the Town Manager and Finance Director and present programmatic needs and priorities for a six (6) year period. 4. The first year of the (6) six‐year capital plan will be adopted annually by the Board of Selectmen and the Board of Finance as part of the budgeting process. 5. Only those projects that appear on the previous year’s CIP for the ensuing year may be considered for approval. Notwithstanding the foregoing, upon an affirmative vote of no fewer than four (4) members of the Board of Selectmen projects other than those published in the CIP for the ensuing year may be considered for approval and included in the adopted budget if the need to fund the project is determined to be in the best interest of the Town. 6. The Town Manager and Finance Director shall recommend the optimum mix of financing sources for all capital projects, in conjunction with the adopted Debt Management Policy and other guidance from the Board of Finance, and to maintain the Town’s AAA credit rating. The Finance Director shall project the future impact of financing capital projects including debt service and operating costs. 7. Whenever possible, capital costs should be financed with means other than borrowing. Borrowing shall be limited to infrastructure and facility improvement projects with an estimated life expectancy of at least 15 years at a cost of $250,000. 8. Capital projects financed through the issuance of general obligation bonds shall be financed for a period of ten (10) years unless specifically authorized by the Board of Finance and, when practical, for a period that does not exceed the useful life of the asset.24 9. The Town’s goal is to pay for maintenance out of the operating budget and to provide periodic replacement and renewal to keep its capital facilities and infrastructure systems in good repair to maximize the capital asset’s useful life. 10. The Town will not construct or acquire a public facility if it is unable to adequately provide for the subsequent annual operating and maintenance costs of the facility. 11. Capital projects associated with the Simsbury Farms Special Revenue Fund and the Sewer Use Special Revenue Fund will be financed from user fees and retained earnings from those funds as deemed appropriate. Options for consideration will be discussed on a case by case basis. 12. Capital projects will be appropriated by individual projects, not in aggregate, unless otherwise authorized by the Board of Finance. 13. Under Conn. Gen. Stat. §8‐24, the Planning Commission must annually review and approve the capital plan for consistency with the Plan of Conservation and Development. VIII. Evaluation of Capital Projects A. The Town Manager and Director of Finance will review capital project requests submitted by department heads in accordance with Town Charter §803 as part of the annual budget process and shall recommend proposed funding sources and options to the Board of Selectmen and Board of Finance. B. At a minimum, the Town shall evaluate the following criteria to prioritize capital projects within the limited resources of the Town: a. Regulatory or legal requirements b. Public safety and risk mitigation for public health, safety, or property c. Asset preservation and management ‐ Does a project extend the useful life of a capital asset, make better use of the asset, or replace an obsolete one. d. Supports adopted plans, goals, objectives, and policies e. Maintains or improves productivity or existing standard of service f. Financial considerations, including funding sources and impact to future debt service and operating costs g. Directly benefits the Town’s economic base h. Provides new programs or assets that improve quality of life including, social, cultural, historic, economic, environmental, or aesthetic value.25 i. Timing and coordination with other projects ‐ Can the project be coordinated with other infrastructure to save money or reduce disruption. j. Community need and demand – How many people will benefit from the project? C. All requests should be further reviewed by the Board of Selectmen and staff using standardized evaluation criteria that generally follows the priority identification list below: a. Mandated – Automatic Priority Is the project mandated by any local, state or federal law? b. Safety – 20% What is the degree of seriousness of the safety issue that is being addressed through the proposed project? Does the project address a compliance and/or accessibility issue? c. Asset Management/Maintenance – 20% Will this project defer future maintenance expenses? Will the project enhance the efficiency of an asset, or extend its life span? d. Board of Selectmen/Town Manager Goal – 20% Does the project align with adopted Board of Selectmen and/or Town Manager goals? e. Funding Source & Impact on Operating – 20% Does the project leverage external funding sources? Will the project reduce annual operating costs? f. Master Plan – 10% Is the proposed project contained in one or more master plans? Has there been public discussion and citizen engagement around this project? g. Quality of Life & Economic Vitality – 10% Does the project enhance the quality of life for a wide range of community members? Will the project attract new residents, businesses or visitors? Will the project help make Simsbury a desirable place to live and work? IX. Specific Costs Items that are Chargeable to a Capital Project Capital project costs should include all expenditures or items that are needed to put the capital asset being built or acquired into operating condition and can include, but not limited to: Planning, including architectural and engineering design Legal services related to the project26 Acquisition of land or property, including brokerage fees Preparation of land for construction and landscaping Easements Construction and materials Equipment and furnishings that are affixed to the project Initial inventory of movable furnishings and equipment Interest and other financing charges during construction Construction and monitoring costs Transportation costs to move equipment to its place of intended use Others as recommended by the Finance Director or the Board of Finance X. Capital Financing Financing sources for capital purchases include: General Fund Capital Reserve Fund Special revenue funds State and federal grants Fees Donations, gifts and philanthropy Borrowing Long‐term capital leases Others, as recommended by the Finance Director XI. Monitoring & Progress Reports The Finance Director, Town Manager and department heads are responsible for monitoring and reporting on the progress and completion of capital projects. The Finance Director shall provide quarterly updates to the Board of Finance on all capital projects in a manner and form as determined by the Board of Finance. XII. Reserve Fund for Capital and Non-Recurring Expenditures (Capital Reserve Fund) The Town of Simsbury established a Capital Reserve Fund under Conn. Gen. Stat. §§7‐359 to §7‐ 368 for (1) capital and non‐recurring expenditures, (2) costs associated with a property tax revaluation, and (3) costs associated with the presentation, amendment or adoption of the plan of conservation and development. 1. The Capital Reserves Fund may receive contributions from: i. Amounts authorized to be transferred thereto from the general fund cash surplus available at the end of any fiscal year;27 ii. Amounts to be raised by the annual levy of a tax not exceeding four mills for the benefit of such fund; or iii. Surplus cash funds already held in reserve and available for such capital or non‐ recurring expenditures. 2. The Capital Reserve fund is created to allow more flexibility and to serve as a future source of cash‐for‐capital financing. The fund is a part of the Town’s capital financing strategy to use current revenues (PAYGO), when possible, to pay for capital equipment and the maintenance of facilities below the Town’s general obligation bond issuance guidelines; to reduce borrowing on larger projects; and to provide a revenue source for emergency capital needs as described below. 3. It is a best practice to appropriate Capital Reserves during the annual budget approval process to ensure the top priorities of the Town are funded, for transparency purposes, and to avoid ad hoc decision‐making outside the budget process. Notwithstanding the foregoing and in limited circumstances: i. If an unforeseen and urgent need arises, the delay of which may increase costs or cause other harm, the Board of Finance may approve a supplemental appropriation outside the annual budget process from the fund, upon the recommendation of the Board of Selectmen, under Town Charter, §809; and ii. If an emergency arises, the Board of Finance may approve a supplement appropriation from the fund, upon the recommendation of the Board of Selectmen, under Town Charter §810. An emergency means any situation where municipal assistance is needed to save lives, protect property, public health, and safety, or to avert or lessen a disaster or catastrophe. 4. The Town shall endeavor to maintain a fund balance of at least $200,000. Any depletion below that amount should be restored in the ensuing budget cycle. 5. If applicable and whenever possible, funds shall be invested in accordance with the Town’s investment policy. XIII. The Capital Project Fund(s) A. Capital Project Fund(s) is established to account for the financial resources used for the acquisition of major pieces of equipment, vehicles in the fleet, studies (if related to a larger capital project), professional services, building improvements, land acquisitions, building28 acquisitions or construction of major capital facilities and capital infrastructure improvements that cost at least $250,000. B. This fund may receive contributions from the sale of town‐owned buildings and property, transfers from the General Fund, proceeds from long and short‐term debt, transfers from the Capital Reserve Fund and operating funds, special revenue funds, unexpended balances of completed capital projects in the Capital Projects Fund(s), grants, donations, or other sources as approved by the Board of Finance. C. If applicable, and whenever possible, funds shall be invested in accordance with the Town’s investment policy. XIV. The Capital and Non-Recurring Fund A. The Capital and Non‐Recurring Fund is established to account for the financial resources used for the acquisition of small capital and non‐recurring expenditures. Non‐recurring means an expenditure that occurs no more frequently than once every five years. B. Capital items and studies that exceed $10,000 but are less than $250,000 may be accounted for as expenditures in the Capital and Non‐Recurring fund. C. On an annual basis, the General Fund will fund the Capital and Non‐Recurring Fund utilizing a charge‐back method, referred to as the General Fund Traditional Payback (GF‐TP). The GF‐ TP method will spread out the cost of the capital expenditures evenly over a five (5) year period. In the event items purchased from the Capital and Non‐Recurring Fund hold a life cycle of less than five (5) years, those purchases will be financed over a period not to exceed their life cycle. Unless otherwise authorized by the Board of Finance the annual maximum dollars that shall be budgeted for the GF‐TP are: $416,250 for the Board of Selectmen GF‐TP $550,300 for the Board of Education GF‐TP D. The Capital and Non‐Recurring Fund will hold a reserve sufficient to maintain an overall positive balance. E. This fund may receive contributions from the General fund, transfers from the Capital Reserve Fund, transfers from Special Revenue Funds, unexpended balances of completed capital projects in the Capital Projects Fund(s), grants and donations.29 F. If applicable, and whenever possible funds shall be invested in accordance with the Town’s investment policy. XV. Accounting Guidelines The following is a list of specific accounting practices related to capital transactions: 1. On the first day of the fiscal year, the General Fund appropriations to the Capital Projects Fund(s), Capital and Non‐Recurring fund and Capital Reserve Fund will be transferred. 2. All capital projects are appropriated by individual projects and may not be exceeded without a supplemental appropriation. Notwithstanding the foregoing, for capital projects funded by cash in an amount below $250,000, anticipated budget transfers between projects can be overspent by $5,000, upon the approval of the Finance Director and confirmation that the total anticipated overages do not exceed anticipated savings from other projects. The transfer and close‐out requests will go before the Board of Selectmen and Board of Finance at year‐end for formal close‐ out. 3. On the first day of the fiscal year, the Capital Reserve Fund appropriations to the Capital Projects Fund(s) and the Capital and Non‐Recurring Fund will be transferred. 4. All bond premiums will be deposited into the Capital Project Fund(s) and will be used to reduce debt service for the life of the bond unless otherwise authorized by the Board of Finance, upon the recommendation of the Board of Selectmen. 5. Proceeds from the sale of town‐owned property may be deposited into the Capital Projects Fund, the Open Space Fund, or Capital Reserve Fund 6. Grant funds, including school construction progress payments, will be deposited into the Capital Projects Fund(s). 7. All debt service payments and debt issuance costs will be paid from the General Fund. 8. All capital project expenditures will be paid directly from the Capital Projects Fund(s). 9. Under Town Charter §812(g), appropriations for construction or for other permanent improvements, from whatever source derived, shall not lapse until the purpose for which the appropriation was made shall have been accomplished or30 abandoned, provided any such project shall be deemed to have been abandoned if three (3) fiscal years shall elapse without any expenditure from or encumbrances of the appropriations therefor. Any portion of an annual appropriation remaining unexpended and unencumbered at the close of the fiscal year shall lapse. XVI. Capital Funding and Debt Service Stabilization Debt is an important component of capital funding, but the cost of debt service can fluctuate – for example, when new bonds are issued, or when existing bonds are paid off and new borrowing as not yet begun. The Board of Finance is committed to maintaining stable levels of capital funding during such year‐to‐year swings in debt service costs. A. Filling a Dip in Debt Service When the cost of annual debt service declines temporarily, as in the example above, the Town may appropriate expenditures for capital projects that are funded through the tax levy. This “pay‐as‐you‐go” approach allows consistency in the level of capital spending and avoids cuts to infrastructure investment. It also helps prevent a sharp drop in the tax levy that will be followed by a sharp rise when new debt is eventually issued. B. Smoothing a Spike in Debt Service When debt service temporarily rises above normal levels, the Board of Finance may authorize the use of designated capital reserves to offset the increase. This use of reserves shall be limited to no more than three consecutive fiscal years.31 TOWN OF SIMSBURY DEBT MANAGEMENT POLICY Adopted by the Board of Finance on November 15, 1989 Revised by the Board of Selectmen on February 11, 2020 and March 22, 2021 and the Board of Finance on February 18, 2020 and March 16, 2021 Revised by the Board of Finance on September 25, 2024 Revised by the Board of Finance on September 16, 2025 I. Purpose The purpose of a debt policy is to establish written and objective guidelines to improve the quality of decision‐making on long‐term capital planning and on the appropriateness of utilizing debt to fund capital expenditures at the most economically advantageous rates of interest. It is the Board of Finance policy that the Town will confine long‐term borrowing to capital improvements or projects that cannot be financed with current revenues. This policy recognizes the infrastructure needs of the Town as well as the taxpayer’s ability to pay while taking into account existing legal, economic, financial and debt market considerations. The primary objectives of this policy are to: 1. Establish conditions for the issuance of debt for the purpose of funding capital projects. 2. Plan for long and short‐term issuance to finance the Town’s capital program based on cash flow needs, sources of revenue, capital construction periods, available financing instruments and market conditions. 3. Minimize the Town’s debt service and issuance costs. 4. Retain the highest credit rating and ensure financial integrity while providing a funding mechanism to meet the Town’s capital needs. 5. Maintain full and complete financial disclosure and reporting. This policy is based on the practices recommended by the Government Financial Officers Association (GFOA) to facilitate compliance with local, state and federal laws and regulations. II. Effective Date This policy shall remain in effect until revised or rescinded. The Town reserves the right to amend this policy as necessary. III. Authority & Responsibility A. Borrowing Authority: The Town shall have the power to incur indebtedness in accordance with Connecticut General Statutes subject to the provisions of the Simsbury32 Town Charter. As stated in Chapter VIII, Section 813, the issuance of bonds and notes, except tax anticipation notes, shall be authorized by resolution of the Board of Selectmen. The issuance of notes, the term of which does not exceed one (1) year, may be authorized by the Board of Selectmen upon recommendation of the Board of Finance. B. Responsibility: It shall be the responsibility of the Board of Selectmen, the Town Manager and the Finance Director to issue debt in compliance with the terms outlined in this policy and in compliance with the Town Charter and State and Federal law. The primary responsibility of debt management rests with the Finance Director. The Finance Director shall: a. Provide for the issuance of debt at the lowest possible cost and risk; b. Determine the available debt capacity; c. Provide for the issuance debt at appropriate intervals and in reasonable amounts as required to fund approved expenditures; d. Recommend to the Board of Selectmen the manner of sale of debt; e. Monitor opportunities to refund debt and recommend such refunding as appropriate; f. Comply with all Internal Revenue Service (IRS), Securities and Exchange Commission (SEC), and State and local rules and regulations governing the issuance of debt; g. Provide for the timely payment of principal and interest on all debt; ensure the that the fiscal agent receives funds for payment of debt service on or before the payment date; h. Provide for and participate in the preparation and review of offering documents; i. Provide annual disclosure information to established national information repositories and maintain compliance with disclosure statements as required by the state and national regulatory bodies; j. Distribute to appropriate repositories information regarding financial condition and affairs at such time and in the form required by law, regulation and general practice;33 k. Provide for the distribution of pertinent information to rating agencies; l. Maintain a current database of all outstanding debt; and m. Apply and promote prudent fiscal practices; n. Develop and maintain a capital finance model to evaluate the impact of capital program spending, operations and maintenance costs, and debt service on its financial condition. IV. Policy A. Debt Retirement Objective – As determined by the Board of Finance, debt retirement expenses (interest and principal) shall be at a rate of not more than 8% of the total annual general fund operating budget. Debt that is being funded outside of tax revenues (i.e. WPCA Sewer Use Fees) shall not be included within the 8% unless the fund responsible for the debt payments is financially unstable and it is anticipated that the Town will be called upon to make debt payments from the general fund. B. Compliance with Six-year Capital Improvement Plan (CIP) ‐ Capital Planning for Simsbury is required by the Town Charter, Section 803 and predicated on adoption by the Board of Selectmen of a six‐year CIP. In general, with the exception of emergencies and mandates, this plan is the governing document for capital expenditures. The Town further recognizes that certain projects for which debt financing should be considered may arise in such a manner that they cannot be incorporated into the six‐year CIP prior to financing, e.g., the coming to the market of a specific property the Town desires to acquire for open space purposes. C. Types of Permissible Debts – whenever possible, the Town will first attempt to fund capital projects with state and federal grants or other revenues. When such funds are insufficient, the Town may use dedicated revenues from Special Revenue Funds, Capital Projects Funds, or General Fund revenues or reserves. If these are not appropriate or sufficient, the Town will use bond funding or long‐term leases. The Board of Selectmen and the Board of Finance will evaluate debt‐funding scenarios as part of the capital budget process using models developed by the Finance Director in order to prioritize future financing needs and to evaluate compliance with this policy. The Board of Finance will forward its recommendations to the Board of Selectmen. a. General Obligation (G.O.) bonds may be issued to finance traditional public improvements for which other funding is unavailable or impractical. Long‐term34 bonds may be used to finance infrastructure or facility improvement projects with an estimated life expectancy of at least 15 years or cost at least $250,000. The Town may go to market for G.O. bonds for a minimum threshold of $1,000,000. A smaller number of projects may be combined to meet the threshold, provided that each such included project meets the 15‐years useful life condition. b. General Obligation (G.O.) Bond Anticipation Notes (BAN’s) may be issued for short‐term debt. The Town may choose to issue bond anticipation notes (BAN’s) as a source of interim financing when deemed prudent. Bond anticipation notes may also be used as a form of permanent financing (generally up to 10 years under current statutes) by renewing the notes over a number of years and reducing the principal amount of the notes on renewal. c. Capital Lease Purchase Financing, in contrast to a true lease, provides for the acquisition of the leased item. Lease purchase financing may be used for procuring assets that are too expensive to fund with current receipts in any one year, but with useful lives too short (less than 15 years) to finance with long‐ term debt. Generally, lease purchase financing will not be considered for the purchase or construction of assets with a life expectancy of less than five years. The Town will seek competitive pricing when practical. d. Low Interest Loan – The use of federal and state aided low interest loans should be considered before consideration of issuing any other forms of debt. Low interest loans may also be considered from private banks as permitted by law. D. Statutory Debt Limitations – Under Connecticut Law, municipalities may not incur indebtedness through the issue of bonds which will cause aggregate indebtedness by class to exceed the following: General Purposes 2.25 times base School Purposes 4.50 times base Sewer Purposes 3.75 times base Urban Renewal Purposes 3.25 times base The “base” is defined as annual receipts from taxation (total tax collections including interest and penalties) and State payment for revenue losses under CGS sections 12‐ 24a, 12‐24c and 12‐129d. In no case shall total indebtedness exceed seven times the base. The statutes also provide for certain exclusions of debt issued in anticipation of taxes, for the supply of water, supply of gas, supply of electricity, construction of subways, for35 the construction of underground conduits for cables, wires, and pipes and for two or more of such purposes; for indebtedness issued in anticipation of the receipt of proceeds from State or Federal grants evidenced by a written commitment or contract. E. Bond Structure – Consideration should be given by the Board of Selectmen to each of the following: a. Providing cash in advance to meet project expenses b. Maximizing the credit rating potential and market acceptance of the bonds c. Minimizing net borrowing cost d. Minimizing the impact of debt service payments on annual cash flow Bond term – All capital improvements financed through the issuance of debt will be financed for a period not to exceed the useful life of the improvements, but in no event to exceed 20 years. For capital expenditures valued below $20 million, bonding will not exceed ten (10) years. Fifteen (15) to twenty (20) year bond terms may be considered and approved in the budget process by the Board of Finance for major projects exceeding $20 million that benefit the community. Interest Rates ‐ The Town will attempt to issue debt that carries a fixed interest rate. However, it is recognized that certain circumstances may warrant the issuance of variable rate debt. In those instances, the Town should attempt to stabilize debt service payments through the use of an appropriate stabilization arrangement. Board of Selectmen approval is needed to issue variable rate debt. Debt Service Pattern – The preferred debt service method is level principal, however, new debt should be structured to coincide with the retirement of past debt to lessen the impact upon the mill rate and to keep debt service costs at or below 8% of the operating budget. Debt that is being funded outside of tax revenues (i.e. WPCA Sewer Use Fees) shall not be included within the 8% unless the fund responsible for the debt payments is financially unstable and it is anticipated that the Town will be called upon to make debt payments from the general fund. The Board of Finance will review the debt service percent of operating on an annual basis and formally set the target debt as percent of operating during the budget process. Call provision – The Board of Selectmen seeks to minimize the cost from optional redemption call provisions, consistent with its desire to obtain the lowest possible interest rates on its bonds. The Town Manager and Finance Director will evaluate the optional redemption provisions for each issue to ensure that the Town does not pay unacceptable higher interest rates to obtain such advantageous calls. Method of sale – Debt obligations are generally issued through competitive sale. When conditions are favorable for a competitive sale do not exist and when a negotiated sale will provide significant benefits to the Town that would not be achieved through a36 competitive sale, the Board of Selectmen may elect to sell its debt obligations through a private or negotiated sale. F. Refunding Debt – The Board of Selectmen will continually monitor its outstanding debt in relation to existing conditions in the debt market and will refund any outstanding debt when sufficient savings can be realized. The target threshold for net present value savings should be a minimum of 2%. G. Emergencies ‐ During emergency situations, the Town may issue debt to provide for emergency infrastructure repair or replacement if such repair or replacement as necessary for the immediate preservation of the public peace, health and safety as governed by the Town Charter. V. Debt Affordability Measures The Board of Finance, in connection with the budget approval process, will evaluate the Town’s debt position. The following statistical measures to determine debt capacity will be used and evaluated in relation to rating agency standards and the Town’s historical ratios to determine debt affordability: 1. Debt as a percentage of Net Taxable Grand List 2. Debt per capita 3. Debt to personal income 4. Debt to taxable property value 5. Debt as a percentage of General Fund expenditures 6. Simsbury debt in comparison to other comparable towns VI. Professional Services A. Bond Counsel ‐ All debt issued by the Town will include a written opinion of bond counsel affirming that the Town is authorized to issue the proposed debt. The opinion shall include confirmation that the Town has met all Town and state requirements necessary for its issuance, a determination of the proposed debt’s federal income tax status and other components necessary for the proposed debt. B. Municipal Advisor ‐ A Municipal Financial Advisor(s) will be used to assist in the issuance of the Town’s debt. The Municipal Financial Advisor will provide the Town with objective advice and analysis on debt issuance. This includes, but is not limited to, analyzing debt capacity, projecting future debt impact and modeling of future debt issuance, monitoring market opportunities, structuring and pricing debt, and preparing official statements of disclosure. C. Underwriters ‐ An Underwriter(s) may be used for all debt issued in a negotiated or private placement sale method. The Underwriter is responsible for purchasing the negotiated or private placement debt and reselling the debt to investors.37 D. Fiscal Agent ‐ A Fiscal Agent will be used to provide accurate and timely securities processing and timely payment to bondholders. All vendors retained by the Town of Simsbury will be selected in accordance with the Town of Simsbury’s purchasing policy.38 TOWN OF SIMSBURY FUND BALANCE POLICY Adopted by the Board of Finance on October 21, 2014 Revised by the Board of Finance on September 15, 2020 Revised by the Board of Finance on September 25, 2024 Reviewed by the Board of Finance on September 16, 2025 Revised by the Board of Finance on November 18, 2025 I. Policy Statement Fund balance is an approximate measure of liquidity. Reserves are a cornerstone of financial flexibility and provide the Town of Simsbury with options to respond to unexpected issues and provide a buffer against fiscal challenges. This policy (the “Policy”) is intended to provide for a fund balance which satisfies the cash flow and contingency needs of the Town while at the same time avoiding over taxation with an excessively large fund balance. A positive fund balance serves three important functions: 1. Eliminates the need for short term borrowing to handle cash flow between the start of the fiscal year and receipt of revenue from taxes; 2. Serves as a contingency fund that enables the Town to respond to unanticipated emergencies or opportunities: and 3. Provides funds that can be used periodically to lower taxes to smooth out major fluctuations in the property tax rates. Credit rating agencies determine the adequacy of the unreserved fund balance using a complex series of financial evaluations. The size of the fund balance is important, but not the only consideration in the Town’s rating. Fund balance reserve levels of AAA rated communities will be reviewed and taken into consideration for determining the appropriate fund balance reserve level for the Town of Simsbury. Other important factors include the reliability of a government’s revenue sources, economic conditions, community wealth factors, cash position, debt ratios, management performance, and fiscal decisions made by the legislative body. II. Effective Date This policy shall remain in effect until revised or rescinded. The Board of Finance reserves the right to amend this policy as necessary. III. Governmental Fund Type Definitions 1. General Fund (Operating budget, taxes, police, etc.) – All funds not reported in another fund.39 2. Special Revenue Funds (Parks and Recreation, etc.) – Used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditures for specific purposes other than debt and capital projects. Restricted or committed revenues are the foundation for a special revenue fund. 3. Capital Project Funds (High School Renovations, etc.) – Used to account for and report financial resources that are restricted, committed or assigned to expenditures for capital outlays, including the acquisition or construction of capital facilities and other capital assets. 4. Permanent Funds (Pension Funds, etc.) – Used to account for and report resources that are restricted to the extent that only earnings, and not principal, may be used for purposes that support the Town’s programs – that is for the benefit of the government or its citizenry. Permanent funds do NOT include private purpose trust funds. IV. Fund Balance Definition Fund Balance is the difference between the Town’s current assets (cash, short‐term investments, receivables) expected to be available to finance operations in the immediate future and its current liabilities. Fund balance is initially characterized as being restricted and unrestricted. Unrestricted Fund Balance is calculated as follows: Total Fund Balance Less: Nonspendable fund balance Less: Restricted fund balance Unrestricted Fund Balance Restricted Fund Balance Categories: 1. Nonspendable fund balance – Amounts that cannot be spent because they are (a) not in spendable form (such as inventory, prepaid items, long term portions of notes receivables) or (b) legally or contractually required to be maintained intact (such as the corpus of an endowment fund). 2. Restricted fund balance ‐ Amounts constrained to specific purposes by their providers (such as grantors, bondholders, and higher levels of government), through constitutional provisions, or by enabling legislation. Unrestricted Fund Balance Categories: 1. Committed fund balance – Amounts constrained to specific purposes by the Town itself, using its highest level of decision‐making authority; to be reported as committed,40 amounts cannot be used for any other purposes unless the government takes the same highest‐level action to remove or change the constraint. 2. Assigned fund balance – Amounts the Town intends to use for a specific purpose; intent can be expressed by the Town or by an official or body to which the Town delegates the authority. Appropriations of existing fund balances to future budgets are considered assigned fund balance. The Town shall not report an assignment that will result in deficit in Unassigned fund balance. Negative fund balances cannot be considered assigned. The body authorized to assign amounts to a specific purpose for purposes of this policy is the Board of Finance. 3. Unassigned fund balance – Amounts that are available for any purpose; these amounts are reported only in the general fund. In other governmental funds, if expenditures incurred exceeded the amounts restricted, committed or assigned it may be necessary to report a negative unassigned fund balance. When an expenditure is incurred for purposes for which both restricted and unrestricted fund balances are available, the Town considers the restricted fund balance amount to have been spent first until exhausted and then any available unrestricted fund balance. When an expenditure is incurred for purposes for which committed, assigned, or unassigned amounts are available, the Town considers the fund balance to be spent in the following order: committed, assigned, and then unassigned. V. General Fund Guidelines The Town Boards shall propose budgets that provide for an unrestricted general fund balance of a minimum of 16 % of the total operating general fund expenditures. In the event the fund balance is greater than 16% at the end of any fiscal year, the excess may be used in one or a combination of the following ways: 1. Transfer such excess to the Debt Service Fund for future debt payments. 2. Transfer such excess to the Debt Service Fund for future debt payments. 3. Transfer such excess to the Capital or the Capital Nonrecurring Fund for future capital projects. 4. Transfer such excess to the Pension and/or OPEB trust funds 5. Transfer such excess to Special Revenue funds to offset deficits or future costs The following circumstances may justify maintaining a fund balance exceeding 16%41 1. Transfer such excess to the Debt Service Fund for future debt payments. 2. Significant volatility in operating revenues or operating expenditures; 3. Potential drain on resources from other funds facing financial difficulties; 4. Exposure to natural disasters (e.g. hurricanes, public health crisis etc); 5. Reliance on a single corporate taxpayer or upon a group of corporate taxpayers in the same industry; 6. Rapidly growing budgets; or 7. Disparities in timing between revenue collections and expenditures. Exigent circumstances may justify a “spend down” of the fund balance to under 16% Examples of such circumstances include: 1. Operating emergencies 2. Unanticipated budgetary shortfalls The Board of Finance shall monitor and modify the minimum fund balance requirements based on these criteria. If at the end of a fiscal year, the unrestricted general fund balance is below fifteen percent of the total operating general fund expenditures for reasons other than the timing of receipt of disaster recovery funds that have been approved by the federal or state government (provided the town’s receipt of such funds is reasonably expected to occur within three to six months), the Finance Director shall prepare and submit a plan for expenditure reductions and or revenue increases. The Board of Finance shall take action necessary to restore the unreserved, undesignated fund balance to acceptable levels within three years or the next budget cycle or a reasonable time period. VI. Capital Fund Guidelines It is the intent of the Town of Simsbury to set aside funds, when operations allow, for large capital projects to help minimize the debt service needs for these projects. The Capital Fund Reserve shall be in accordance with the CNR and Capital Policy as adopted on February 19, 2019, and may be amended from time to time. VII. Internal Service Fund Guidelines Reserve targets established for internal service funds shall ensure that the fund continues to provide service without interruption including self‐insurance. The Town of Simsbury currently42 maintains internal service funds for medical and dental activity. In accordance with best practice, the fund balance for these funds should always be at 20 – 25% of expected claims. The Internal Service Fund shall be used to purchase health benefits, stop‐loss insurance and pay the associated administrative costs of the health benefits plan. The insurance fund will also hold the appropriate incurred but not reported claims reserves (IBNR) and large claims fluctuation reserve. The fund will hold 10% of expected claims for IBNR and target 15% of claims for large claim fluctuations. Funds accumulated in the insurance fund will only be utilized for the purpose of providing health benefits for Simsbury employees, dependents, and retiree health benefits coverage, in accordance with collective bargaining agreements. Funds will not be utilized for any purpose other than providing health benefits to employees, their dependents, and retirees.43 TOWN OF SIMSBURY INVESTMENT POLICY Adopted by the Board of Finance on October 21, 2014 Revised by the Board of Finance on July 19, 2022 Revised by the Board of Finance on September 25, 2024 Reviewed by the Board of Finance on September 16, 2025 I. Policy Statement It is the policy of the Town of Simsbury that the administration and investment of Town funds shall be handled with the highest public trust. Investments shall be made in a manner which will optimize both the safety of the principal invested and the return on investment. Policy limits and diversification of the portfolio are established to protect liquidity for daily cash flow needs. While achieving a higher rate of return is secondary to the requirements for safety and liquidity, there must be a balancing of the risk and return. All investments will be made in full compliance with Town Charter and Code, State of Connecticut statutes, and any applicable IRS requirements. II. Scope This Investment Policy (the “Policy”) applies to the investment and management of all the funds under direct authority of the Town. All Town cash will be pooled together for banking purposes regardless of which fund the cash belongs to, with the exception of certain funds where the Town is required to hold a separate bank account (ie certain grants require a separate bank account to receive funding). Investment income will be proportionately allocated to each fund where if the funds were not pooled, those contributing to the fund would receive an interest benefit by having their own bank account on a monthly basis based on their actual balances, and in accordance with generally accepted accounting principles. The following funds to be allocated interest include: General Fund, Sewer Use Fund, Sewer Assessment Fund, Residential Rental Property Fund, Probate, Health Insurance Fund and all Trust Funds. III. Prudence Investments shall be made with the judgment and care, under circumstances then prevailing, which persons of prudence, discretion, and intelligence would exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the expected income to be derived. 1. Prudent Person Standard ‐ The standard of prudence to be used by investment officials shall be the “prudent person” standard and shall be applied in the context of managing an overall portfolio. The Director of Finance and all those delegated investment authority under the Policy, when acting in accordance with the written procedures and44 the Policy and in accordance with the Prudent Person Rule, shall be relieved of personal responsibility and liability in the management of the portfolio. IV. Objectives The objective of the Town’s investment and cash management program is to ensure the safety, liquidity and yield on the funds available for investment. These objectives will ensure that all available funds are immediately and continuously invested at the most reasonable market rates obtainable at the time of investment. The Town will seek to attain market rates of return on its investments, consistent with constraints imposed by its primary objectives (as listed below), cash flow considerations and any laws that restrict the investment of public funds. The primary objectives, in priority order, of the Town’s investment action shall be: 1. Safety ‐ Safety of principal is the foremost objective of the investment program. Investments shall be undertaken in a manner that seeks to ensure the preservation of capital and protection of principal in the overall portfolio. This will be achieved by mitigating credit risk and interest rate risk. a. Credit Risk ‐ The Town will minimize credit risk, the risk of loss due to the failure of the security issuer or backer, by: i. Limiting investments to the safest types of securities (highest quality, creditworthiness). ii. Diversifying the investment portfolio by maturity and issuer so that potential losses on individual securities will be minimized. b. Interest Rate Risk ‐ The Town will minimize the risk that the market value of securities in the portfolio will fall due to changes in general interest rates, by: i. Structuring the investment portfolio so that securities mature to meet cash requirements for ongoing operations, thereby avoiding the need to sell securities on the open market prior to maturity. ii. Investing operating funds primarily in shorter‐term securities, money market mutual funds, or similar investment pools. 2. Liquidity ‐ The investment portfolio shall remain sufficiently liquid to meet all operating requirements that may be reasonably anticipated. This is assured through sufficient distribution of funds in highly liquid investments. The portfolio will be structured so that securities mature concurrent with cash needs to meet anticipated demands (static liquidity). Furthermore, since all possible cash demands cannot be anticipated, the45 portfolio should consist largely of securities with active secondary or resale markets (dynamic liquidity). 3. Yield ‐ The investment portfolio shall be designed with the objective of attaining a market rate of return throughout budgetary and economic cycles, taking into account the investment risk constraints and liquidity needs. Return on investment is of secondary importance compared to the safety and liquidity objectives described above, however, reasonable yield must be balanced with minimizing risks. The investments authorized by this Policy are limited to relatively low risk securities in anticipation of earning a fair return relative to the risk being assumed. V. Investment Authority The investment authority for the Town is established by Connecticut General Statutes. The Town Director of Finance will be responsible for the daily investment management decisions and activities. The Director of Finance, on a quarterly basis, will prepare a report of investment decisions in the Town investment fund. The Board of Finance or delegate will review these decisions for reasonableness and adherence to this Policy. VI. Ethics & Conflict of Interest Employees who have investment authority for the Town (specifically, the Director of Finance) shall refrain from personal business activity that could impair, or create the appearance of an impairment of, their ability to make impartial investment decisions. They shall disclose, as part of the annual audit disclosure process, any material financial interests in financial institutions that conduct business with the Town, and they shall further disclose any material personal financial/investment positions that could be related to the performance of the Town’s portfolio. Employees shall comply with all applicable laws, regulations, professional codes of responsibilities and Town policies. Employees and investment officials shall also refrain from undertaking personal investment transactions with the same individual with whom the business is conducted on behalf of the Town. VII. Authorized & Suitable Investments All investments shall be made in accordance with Connecticut General Statutes Sections 7‐400‐ 402. Only the following types of securities and transactions shall be eligible for use by the Town: 1. U.S. Treasury bills, notes and bonds. 2. Federal Agency debentures, discount notes, callable and step‐up securities, with issued by the Government National Mortgage Association (GNMA), Federal Home Loan Banks (FHLB), Federal National Mortgage Association (FNMA), Federal Farm Credit Banks (FFCB), and Federal Home Loan Mortgage Corporation (FHLMC) and any other agency of the United States Government.46 3. Time Certificates of Deposit issued by a qualified public depository as defined in Connecticut General Statutes Section 36a‐330 that are fully insured or collateralized. 4. Money Market Mutual Funds registered under the Investment Company Act of 1940 that (1) are “no‐ load” (meaning no commission or fee shall be charged on purchases or sales of shares); (2) maintain a constant daily net asset value per share of $1.00; (3) limit assets of the fund to the securities described in 1, 2 and 3 above and repurchase agreements collateralized by such securities; and (4) have a maximum stated maturity and weighted average maturity in accordance with Federal Securities Regulation 2a‐7. 5. Investment Pools that (1) are “no‐load” (meaning no commission or fee shall be charged on purchases or sales of shares; (2) maintain a constant daily net asset value per share of $1.00; (3) limit assets of the fund to the securities described in 1, 2 and 3 above and repurchase agreements collateralized by such securities; and (4) have a custodian that is a bank as defined by Connecticut General Statutes Section 36a‐ 2, or an out‐of‐state bank, as defined in said section, having one or more branches in Connecticut. 6. State Treasurer’s Investment Fund (STIF). VIII. Diversification Invested funds shall be diversified to minimize risk or loss resulting from over‐concentration of assets in a specific maturity or specific issuer. The asset allocation in the portfolio should, however, be flexible depending upon the outlook for the economy, the securities market, and the Town’s anticipated cash flow needs. IX. Maximum Maturities To the extent possible, the Town will try to match its investments with anticipated cash flow requirements. The average weighted maturity of all investments exceeding 2 years shall not be more than 5 years and no more than 25% of the dollar value of those investments may exceed 5 years in duration. X. Internal Controls The Director of Finance shall insure that there are adequate internal controls for the Town’s cash management processes and that they are fully document and adhered to. The controls shall be designed to prevent losses of public funds arising from fraud, employee error, third‐ party misrepresentation, or imprudent actions by employees and officers of the Town. The internal control procedures shall be reviewed annually and approved by the Town’s independent auditors.47 XI. Performance Standards The investment portfolio will be designed to obtain a market average rate of return during budgetary and economic cycles, taking into account the Town’s investment risk constraints and cash flow needs. The standard benchmark for determining whether market yields are being achieved for short to intermediate‐term investment portfolios will be the yields of the State Treasurer’s Investment Fund (STIF). XII. Investment Policy Adoption The Policy shall be adopted by the Town Board of Finance. The Policy shall be reviewed biannually by the Director of Finance and any modifications made thereto must be approved by the Town Board of Finance.48 TOWN OF SIMSBURY DEFINED BENEFIT PENSION PLANS INVESTMENT POLICY Adopted by the Retirement Plan Sub-Committee on November 2012 Revised by the Retirement Plan Sub-Committee on September 12, 2018 Adopted by the Board of Finance on July 30, 2019 Revised by the Board of Finance on September 15, 2020 Revised by the Board of Finance on October 18, 2022 Reviewed by the Board of Finance on September 25, 2024 Reviewed by the Board of Finance on September 16, 2025 I. Introduction & Purpose The TOWN OF SIMSBURY DEFINED BENEFIT PENSION PLANS (the “Plans”) have been established to provide retirement benefits to those individuals eligible to receive them. This policy statement outlines the goals and investment objectives for the Plans. This document is intended to provide guidelines for managing the Plans, and to outline specific investment policies that will govern how those goals are to be achieved. This statement: 1. Describes the investment objectives of the Plans; 2. Defines the responsibilities of the Board of Finance, Retirement Plan Sub‐Committee (“Committee”) and other parties responsible for the management of the Plans; 3. Establishes investment guidelines regarding the selection of investment managers and diversification of assets; 4. Specifies the criteria for evaluating the performance of the investment managers and of the Plans as a whole. II. Investment Objective The Plans’ assets shall be invested in accordance with sound investment practices that emphasize long‐term investment fundamentals. In establishing the investment objectives of the Plans, the Board of Finance has taken into account the financial needs and circumstances of the Town of Simsbury, the time horizon available for investment, the nature of the Plans’ cash flows and liabilities, and other factors that affect their risk tolerance. Consistent with this, the Board of Finance has determined that the investment of these assets shall be guided by the following underlying goals: 1. To achieve the stated actuarial target of the Plans;49 2. To maintain sufficient liquidity to meet the obligations of the Plans; 3. To diversify the assets of the Plans in order to reduce risk; 4. To achieve investment results over the long‐term that compare favorably with those of other pension plans, professionally managed portfolios and of appropriate market indexes. III. Assignment of Responsibilities Board of Finance ‐ In accordance with Simsbury’s Town Charter, Section 808, “The Board of Finance shall supervise and maintain the Town pension and other post‐employment benefit funds in accordance with rules and regulations contained in agreements between the Town employees and the Town of Simsbury and or the Board of Education regarding pension and other post‐employment benefits. The Board of Finance shall, after consultation with the Board of Education and the Board of Selectmen, ensure the pension funds are prudently invested and shall also supervise and maintain the Retiree Benefit Fund established pursuant to the Town code of ordinances and designate the annual contribution to be made to insure said pension and post‐employment funds. The investment and management of the assets of any such fund shall be in compliance with the prudent investor rule as set forth in Conn. Gen. Stat. Sections 45a‐541 to 45a‐541| inclusive of the General Statutes.” The Board of Finance shall: 1. Oversee compliance by the investment manager(s) with the investment policy; 2. Evaluate the performance of the investment manager(s) against specific investment objectives; 3. Approve fee schedules of the investment manager(s) based on contractual agreements; 4. Select the investment custodian(s); and, 5. Approve the continuation of business relationships with investment manager(s), custodian(s), and other vendors, if any. The Board of Finance may delegate its authority to act on its behalf to certain members or agents (such as the Town Manager, the Director of Finance, or designated Sub‐Committees). The Board of Finance shall discharge its duties with the care, skill, prudence and diligence appropriate to the circumstances then prevailing. The Board of Finance recognizes that some risk must be assumed to achieve the Plans’ long‐term investment objectives. The Board of Finance will receive and review reports from the Town’s investment advisor on a semi‐annual basis. The Board of Finance will review recommendations provided by the Retirement Plan Sub‐ Committee at their next regularly scheduled meeting.50 Retirement Plan Sub-Committee – The Retirement Plan Sub‐Committee is formed to satisfy the Simsbury Town Charter requirement that the Board of Finance consult with the Board of Selectmen and Board of Education. The Committee is charged with the responsibility of evaluating the assets of the Plans and recommending any changes to the Board of Finance. To that end, the Committee’s responsibilities include: recommending to the Board of Finance the Plans’ investment policy, objectives and portfolio guidelines with respect to asset allocation, risk parameters, and return evaluation and for specific interpretation of said investment policy, as well as selecting the investment vehicles, and periodically monitoring the performance of investments. The Committee will meet periodically. The Committee shall discharge its duties with the care, skill, prudence and diligence appropriate to the circumstances then prevailing. The Committee recognizes that some risk must be assumed to achieve the Plans’ long‐term investment objectives. Investment Consultant – The Board of Finance will engage the services of an Investment Consultant. The Investment Consultant’s role is that of a non‐discretionary advisor to the Board of Finance and the Committee. The Investment Consultant will assist in the development and periodic review of an Investment Policy Statement and the Plans’ asset allocation, conduct manager searches when necessary, monitor the performance of the managers/funds, and communicate on other matters of relevance to the oversight of the Plans. Custodian – The Custodian is responsible for the safekeeping and custody of assets. The Custodian will physically (or through agreement with a sub‐custodian) maintain possession of securities owned by the Plans, collect dividends and interest payments, redeem maturing securities, and effect receipt and delivery following purchases and sales. The Custodian may also perform regular accounting of all assets owned, purchased, or sold, as well as movement of assets into and out of the Plans accounts (for example, to accommodate distribution needs). IV. Asset Allocation The asset allocation target ranges set forth in Appendix A represent a long‐term view. Short‐ term market volatility may cause the asset mix to fall outside the targeted range. V. Rebalancing The Board of Finance, at its discretion, may or may not institute re‐balancing as necessary. Such adjustments should be executed with consideration to turnover, transaction costs, and realized losses over the long term. The necessity to rebalance will be reviewed periodically. VI. Selection Criteria for Investment Managers51 Investment managers/funds retained by the Plans shall be chosen using various criteria, including but not limited to the following: 1. Past results, considered relative to appropriate indexes and other investments having similar investment objectives. Consideration shall be given to both consistency of performance and the level of risk taken to achieve results; 2. The investment style and discipline of the investment manager; 3. How well the manager’s investment style or approach complements other assets in the Plans; 4. Level of experience, personnel turnover, financial resources, and staffing levels of the investment management firm or fund. The Plans will utilize a multi‐manager structure of complementary investment styles and asset classes to invest the Plans’ assets. The Investment Consultant is additionally tasked with regular oversight of the roster of investment managers deployed on the Plans’ behalf. The motivation for this effort is to ensure that the managers continue to administer their portfolios in a manner consistent with the overall approaches and qualifications that appealed to the Board of Finance initially and that anomalies and deviations from these approaches and qualifications are identified and addressed. When deemed necessary, the Investment Consultant will provide other manager candidates for the Board of Finance’s consideration. Should additional contributions and/or market value growth permit, the Board of Finance may retain additional investment managers to invest the assets of the Plans. Additional managers would be expected to diversify the Plans by investment style, asset class, and management structure and thereby enhance the probability of the Plans achieving its long‐term investment objectives. VII. Security Guidelines The Plans’ investments may include separately managed accounts and/or mutual funds/co‐ mingled funds, including marketable and non‐marketable alternatives and exchange traded funds. The Board of Finance understands that managers have full responsibility for security selection, diversification, turnover and allocation of holdings among selected securities and industry groups, as particularly detailed in the Investment Policy Statement of each of the Plans’ separately managed accounts or in the prospectus/offering memorandum for each mutual fund/co‐mingled fund/exchange traded fund in the portfolio. No securities will be purchased, or carried, on margin.52 With respect to mutual/co‐mingled funds, the Board of Finance will consider the following to insure proper diversification and function for each of the funds: 1. The mutual fund/co‐mingled pool organizations selected should demonstrate: (a) a clearly defined investment philosophy; (b) a consistent investment process; (c) an experienced and stable organization; and (d) cost‐effectiveness. 2. The mutual fund/co‐mingled pool used will generally have at least a full three‐year track record, or its equivalent, and the individual fund/pool must have at least $25 million under management (or, as an organization, $100 million in the same strategy) at the time of selection. 3. Each mutual fund/co‐mingled pool will be regularly evaluated for proper diversity and each will provide material information on a timely basis. 4. With respect to hedge fund‐of‐funds, in addition to meeting each of the three above‐ specified criteria, each fund‐of‐funds will include an appropriate number of hedge fund managers to be considered well diversified. Investment strategies in hedge fund‐of‐ funds may generally include: long/short U.S. equity, global equity, derivatives, distressed debt and other fixed income strategies, currency exposure, arbitrage and event driven strategies, and additional strategies with low correlation to traditional asset classes. VIII. Proxy Voting Each investment manager is responsible for and empowered to exercise all rights, including voting rights, as are acquired through the purchase of securities, where practical. Each investment manager shall vote proxies in the best interest of the Town of Simsbury. A copy of each firm’s guidelines, and/or summary of proxy votes shall be provided to the Board of Finance or Committee upon request. IX. Investment Monitoring & Reporting The Board of Finance and Committee will periodically review performance of the investments in the Plans. Performance monitoring is the mechanism for revisiting the investment selection process and confirming that the criteria originally satisfied remain intact and that an investment continues to be appropriate for the Plans. While frequent change is neither expected nor desirable, the process of monitoring investment performance relative to specified guidelines is an on‐going process. Monitoring should occur on a periodic basis. The monitoring process will utilize the same criteria that formed the basis of the investment selection decision. In addition, a set of “watch list criteria” may be employed to track important quantitative and qualitative elements, assist in the53 evaluation process, and focus the Board of Finance and Committee on potential areas of concern. Watch list criteria may include the following: 1. Performance relative to benchmark performance over various time frames; 2. Deterioration of risk‐adjusted performance; 3. Notable style drift / change in investment objective; 4. High manager fees relative to peers; 5. Significant organizational or manager change. X. Termination of Investment Manager or Fund A manager/fund may be terminated when the Board of Finance has lost confidence in the manager's ability to: 1. Achieve performance and risk objectives; 2. Comply with investment guidelines; 3. Comply with reporting requirements; 4. Maintain a stable organization and retain key investment professionals. There are no hard and fast rules for manager termination. However, if the investment manager has consistently failed to adhere to one or more of the above conditions, termination may be considered. Failure to remedy the circumstances of unsatisfactory performance by the manager/fund, within a reasonable time, may be grounds for termination. Any recommendation to terminate a manager/fund will be treated on an individual basis and will not be made solely based on quantitative data. In addition to those above, other factors may include, but shall not be limited to, professional or Town of Simsbury turnover, or material change to investment processes. The process for selecting a replacement for a terminated manager would follow the criteria outlined in the section of this Investment Policy Statement titled Selection Criteria for Investment Managers.54 XI. Approval It is understood that this investment policy is to be reviewed periodically by the Board of Finance and Committee to determine if any revisions are warranted by changing circumstances including, but not limited to, changes in financial status, risk tolerance, or changes involving the investment managers.55 Appendix A Updated August 2020 Target Asset Allocation Table Asset Class Min Weight Target Weight Max Weight Benchmark Index Domestic Equities 21.5% 31.5% 41.5% Russell 3000 Index International Equities 17.5% 27.5% 37.5% MSCI ACWI ex‐U.S. Index; MSCI EAFE Small Cap Index; MSCI Emerging Markets Index. Fixed Income 22.5% 32.5% 42.5% Barclays Capital Aggregate Index; Citigroup World Government Bond Index Real Estate 0.0% 5.0% 7.5% NCREIF Index Inflation Protection 0.0% 3.5% 7.0% Bloomberg Commodity Index Total Return, Bloomberg Barclays US TIPS 0‐5 Yr Index56 TOWN OF SIMSBURY DEFINED CONTRIBUTION PENSION PLANS INVESTMENT POLICY Adopted by the Retirement Plan Sub-Committee in 2014 Adopted by the Board of Finance on May 18, 2021 Reviewed by the Board of Finance on September 25, 2024 Reviewed by the Board of Finance on September 16, 2025 I. Plan Description The Town of Simsbury sponsors the Simsbury 457/401 Plans (the "Plan") for the benefit of its employees. It is intended to provide eligible employees with the long‐term accumulation of retirement savings through a combination of employee and employer contributions to individual participant accounts and the earnings thereon. The Plan's participants and beneficiaries are expected to have different investment objectives, time horizons and risk tolerances. To meet these varying investment needs, participants and beneficiaries will be able to direct their account balances among a range of investment options to construct diversified portfolios that reasonably span the risk/return spectrum. Participants and beneficiaries alone bear the risk of the results from the investment options and asset mixes that they select. II. Purpose of the Investment Policy This investment policy statement is intended to assist the Plan's fiduciaries, who are charged with making investment‐related decisions for the plan in a prudent manner. It outlines the underlying philosophies and processes for the selection, monitoring and evaluation of the investment categories and investment options utilized by the Plan. Specifically, this Investment Policy Statement: 1. Defines the Plan's investment objectives 2. Defines the roles of those responsible for the Plan's investments 3. Describes the criteria and procedures for selecting investment categories and investment options 4. Establishes investment performance measurement standards and monitoring procedures57 5. Describes methods for addressing investments that fail to satisfy established objectives This Investment Policy Statement will be reviewed periodically, and, if appropriate, can be amended as needed. III. Investment Objective The following criteria may be considered when choosing a menu of investment options: 1. The menu of investment options should represent a broad range that allows for participant choice among various asset classes and investment styles. 2. Investment options should have varying degrees of risk and potential for return. 3. Investment options should have returns that are competitive in the marketplace when compared to appropriate benchmarks. 4. Investment options should have total expense ratios that are competitive in the marketplace. These are not necessarily the only criteria that may be considered. IV. Assignment of Responsibilities The parties responsible for the management and administration of the Plan include: 1. The Town of Simsbury Retirement Plan Sub‐Committee, (the "Committee") which is responsible for: a. Recommending the Investment Policy Statement b. Recommending investment options c. Periodically evaluating the Plan's investment performance and recommending investment option changes 2. The Town of Simsbury Board of Finance, (the "Board") which is responsible for: a. Approving and maintaining the Investment Policy Statement b. Selecting investment options58 c. Periodically evaluating the Plan's investment performance and selecting investment option changes d. Approving the continuation of business relationships with investment managers, custodians, and other vendors, if any 3. The Plan’s Administrator is responsible for day to day administration of the plan in accordance with paragraph 2 above. The Town Manager or his/her designee is responsible for serving as the Plan’s Administrator. 4. The Plan's Trustee, who is responsible for holding and investing plan assets in accordance with the terms of the Trust Agreement. The Finance Director or his/her designee is responsible for serving as the Plan’s Trustee. 5. The Investment Managers of the Plan options, who are responsible for making reasonable investment decisions consistent with the stated approach as described by prospectus and reporting investment results on a regular basis. 6. The Plan Record keeper, who is responsible for maintaining and updating individual account balances as well as information regarding plan contributions, withdrawals and distributions. At the Board of Finance’s discretion, the services of an investment consultant may be utilized to assist the Committee, Board, Town Manager and Finance Director with any of the following, including, without limitation: Investment policy development, fund menu construction, fund analysis and recommendations, performance monitoring, and employee education. V. Selection of Investments Set forth below are the considerations and guidelines employed in selection of investment options: The Plan intends to provide a broad range of investment options that will span a risk/return spectrum. Further, the Plan’s investment options will allow Plan participants to construct portfolios consistent with their unique individual circumstances, goals, time horizons and tolerance for risk.59 After determining the asset classes to be used, the Board must evaluate and select investment options. Each investment option should be managed by a prudent expert that meets certain minimum criteria: 1. Be a bank, insurance company, mutual fund company, or investment adviser registered under the Registered Investment Advisers Act of 1940. 2. Be operating in good standing with regulators and clients. 3. Provide qualitative and quantitative information on the history of the firm, its investment philosophy and approach, and other relevant information. Assuming the minimum criteria are met, additional factors that may be considered include: 1. Results compared to an appropriate, style‐specific benchmark and peer group. 2. Adherence to stated investment objective. 3. Fees compared to similar investments in the marketplace. 4. Availability of relevant information in a timely fashion. VI. Investment Monitoring & Reporting The Committee will periodically review the investment options in the Plan. Investment options that no longer accept participant and/or employer contributions and cannot be removed from the Plan due to contractual limitations and where participants have been notified of this will not be monitored by the Committee. Performance monitoring is the mechanism for revisiting the investment option selection process and confirming that the criteria originally satisfied remain intact and that an investment option continues to be an appropriate offering. While frequent change is neither expected nor desirable, the process of monitoring investment performance relative to specified guidelines is an on‐going process. Monitoring should occur on a periodic basis. The monitoring process may utilize the same criteria that formed the basis of the investment selection decision; however, these are not the only criteria that may be considered. In addition, a set of “watch list criteria” may be employed to track important quantitative and qualitative elements, assist in the evaluation process, and focus the Committee on potential areas of concern. Watch list criteria may include the following: 1. Results versus benchmark over a specified period of time60 2. Deterioration of risk‐adjusted performance 3. Notable style drift / change in investment objective 4. Expense ratio versus category average 5. Significant organizational or manager change VII. Termination of an Investment Option An investment option may be terminated when the Board, in consultation with the Committee, has lost confidence in the manager's ability to: 1. Achieve investment objectives, 2. Comply with investment guidelines, 3. Comply with reporting requirements, or 4. Maintain a stable organization and retain key relevant investment professionals. There are no hard and fast rules for termination. However, if the investment option has consistently failed to adhere to one or more of the above conditions, failure to remedy the circumstances of unsatisfactory performance, within a reasonable time, may be grounds for termination. Any recommendation to terminate an investment option will be treated on an individual basis, and will not be made solely based on quantitative data. In addition to those above, other factors may include professional or client turnover, or material change to investment processes. Considerable judgment must be exercised in the termination decision process. An investment option to be terminated shall be removed using one of the following approaches: 1. Remove and replace (map assets) to an alternative comparable option, 2. Freeze assets in the terminated option and direct new assets to a replacement option, 3. Phase out the option over a specific time period, 4. Remove the option and do not provide a replac
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