This policy establishes guidelines for managing the financial resources of the Montgomery County Road Runners Club (MCRRC, the Club), including cash management, reserves, and investments. The goal is to ensure financial stability and support MCRRC’s mission and strategic objectives.
Authorization & Permitted Individuals
Corporate Resolution for Bank and Investment Account Authorized Individuals
Be it resolved that the following officers and employees of MCRRC will be the authorized individuals and signatories on any bank or investment accounts in MCRRC’s name:
- President
- Vice President
- Treasurer
- Executive Director
The account signatories and corporate resolutions on file with financial institutions must be changed as soon as practicable after any change to the individuals holding the positions listed above.
Cash Management
Operating Cash
MCRRC will maintain a cash balance sufficient to cover at least 3 months of average budgeted operating expenses to ensure sufficient liquidity to conduct daily operations.
Operating cash balances will primarily remain within the Club’s business checking account. At the discretion of the Treasurer and Executive Director, operating cash balances may also be allocated to a money market account for short-term investment purposes. Any such allocation should not disrupt daily operations or require monitoring or rebalancing more than monthly.
Payment Authorizations
The Executive Director should initiate payments associated with the Club’s operations. Prior to making payment for expenses greater than $1,000, the Executive Director should obtain the authorization of at least two of the following officers: President, Vice President, Treasurer. Such authorization can be done electronically via email.
Reserves
MCRRC’s reserves are categorized as follows:
Operating Reserves
To cover unexpected budgetary shortfalls, MCRRC will maintain an additional 3 months of average budgeted operating expenses in Short-Term Investments.
Strategic Reserves
Funds in excess of the Operating Reserves requirement are available to enhance MCRRC’s operations and member experience.
These funds are separate and distinct from the Annual Budget, which funds the Club’s ongoing operations. Strategic Reserves should instead be used as emergency funds or for one-time initiatives, such as capital expenditures, membership appreciation, operational improvements, etc. To the extent that the Board would like to extend a one-time initiative to become a part of the Club’s regular operations, such extension should be included in the Club’s next Annual Budget.
Strategic Reserves are classified into the following categories:
- Designated Reserves: Funds that have been approved for specific uses and are expected to be deployed in the short term. These funds address immediate needs or projects approved by the Board. Designed Reserves should be held as short-term investments and transferred to the Operating Cash account before use.
- Capital Reserves: Funds that have been approved by the Board for specific uses but are intended for use in the longer term. Examples include major equipment replacements or other infrastructure updates that require planned funding. Capital Reserves can be held in short-term or long-term investments with a risk profile consistent with the remaining time until the capital project is expected to commence. Capital Reserves should be transferred to the Operating Cash account before their use.
- Unassigned Reserves: Funds that have not yet been allocated to a specific purpose and are available to be used for Board-approved initiatives. To ensure that these funds are being actively considered for initiatives that enhance the Club’s operations and member experience, the Board should review Unassigned Reserves for potential uses at least annually, with a summary of the review included in the Treasurer’s presentation during the Annual Business Meeting. Until designated, Unassigned Reserves should be invested in long-term investments.
Approval Process
Proposals to the Board for any use of its Strategic Reserves should include the proposal’s purpose, alignment with MCRRC’s mission, and its estimated costs and timelines.
The Board should ensure that the proposal is a one-time initiative and that any recurring financial obligations are separately integrated into the Club’s Annual Budget.
The Board can approve any proposal with a majority vote.
Members should be informed of any approved proposals through regular Club records, such as Board minutes or member communications, including, for example, newsletters, email updates, the Club’s website, etc.
Annual Reporting
The Treasurer will include a summary presentation of MCRRC’s reserve balances and any uses of Strategic Reserves in the Annual Business Meeting.
Permitted Investments
Short-Term Investments (Operating Cash, Operating Reserves & Designated Reserves)
Short-Term Investments should be invested in a manner that minimizes risk, preserves capital, and maintains sufficient liquidity to meet the MCRRC’s regular operating needs. Permitted investments are money market funds and high-yield savings accounts.
Long-Term Investments (Capital Reserves & Unassigned Reserves)
Long-Term investments should be invested in a manner that provides modest growth to support MCRRC’s mission and strategic objectives. Permitted investments are mutual funds or exchange-traded funds that offer diversified portfolios of equities and bonds. The Unassigned Reserves should be invested in “balanced” funds that invest no more than 60% in equities. Capital Reserves should be invested in a manner consistent with the timeline until the capital project commences:
- 5+ years from capital project start: “balanced” funds
- 2-5 years from capital project start: “conservative” funds with a lower allocation in equities
- Less than 2 years from capital project start: Short-Term Investments
Monitoring
On a monthly basis, the Treasurer will monitor MCRRC’s Operating Cash, Operating Reserves and Strategic Reserves and initiate any necessary rebalancing actions.
In the event of a shortfall or any other concern, the Treasurer will prepare a report to the Board of Directors.
Policy Updates
Updates to this policy require approval from the Board.
At a minimum, this policy should be reviewed at least every two years, during years when a Treasurer is elected, to ensure it aligns with MCRRC’s financial needs and best practices.
(Updated, Feb. 2025)