3D, Fund Balance Policy and the New GASB 54 Statement

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Office of the State Auditor (OSA). Amounts that exceed 50% may be transferred out to other funds. An assignment or restriction of fund balance may be used to offset revenues earned in one year where substantial services are required to be performed in the next fscal period. b. The City will maintain an amount sufficient to cover accumulated vacation and compensatory time balances and that portion of PTO leave that would be payable under the City's severance pay policy or union contracts. This amount shall be adjusted annually as part of the year-end close and annual financial report process. c. Far specific purposes as authorized by the City Council or the City's intended use of the funds. Funds shall be assigned frst for compensated absences, second for cash flow needs and lastly for emergencies/contingencies. 4. The Cable Fund is a Special Revenue Fund that provides for cable and communication related expenses to disseminate information to the public. It receives the majority of its funding from franchise fees which are restricted for this use. The City will strive to maintain a fund balance in the Cable Fund in an amount sufficient to support the ongoing operating expenditures and capital expenditures planned in the CIP and in congruence with the Long Range Financial Management Plan. 5. EDA Funds are Special Revenue Funds that carryout economic and industrial development and redevelopment consistent with policies established by the City Council. It receives the majority of its funding from specific taxes or other earmarked revenue sources. The City will strive to maintain fund balances in the EDA Funds in an amount sufficient to support the ongoing expenditures, obligations and in congruence with the Long Range Financial Management Plan. Revenues not legally restricted will be committed. 6. Fund balances in Debt Service Funds far future debt payments are restricted. 7. Capital Funds are used to account for the �nancing of street rehabilitations projects, equipment replacement, public safety equipment, and facility rehabilitation or renovation. Revenue sources are provided mainly through property taxes, special assessments, Park dedication fees, and charitable gambling. Street projects, equipment purchases, and renovations are programmed into the City's Capital Improvement Plan and are generally planned years in advance. The City will strive to maintain fund balances in the Equipment Building & Replacement Fund, Public Safety Capital Fund, Parks Fund, and the Permanent Revolving Improvement Fund in an amount sufticient to support the ongoing capital expenditures planned in the CIP and in congruence with the Long Range Financial Management Plan. Revenues not legally restricted will be assigned. 8. Enterprise Funds were established to account for the operation of Water, Sanitary Sewer, Recycling, and Surface Water Management. These operations are designed to be self-supporting from user charges. City enterprise funds shall have operating cash reserves sufficient to provide for monthly cash flow, and for a reasonable level of equipment and infrastructure replacement. Major P:\Finance�Policies and Procedures�Policies\Fund Balance Policy-201 l.doc Adopted 11/28/20ll