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<br />~ <br />~~HILLS <br /> <br />CITY OF ARDEN HILLS <br />COUNTY OF RAMSEY <br />STATE OF MINNESOTA <br /> <br />FINANCIAL POLICIES- <br />FUND BALANCE <br /> <br /> <br />Fund Balauce aud Net Asset Guideliues (Fiscal Year-End) <br /> <br />Purpose <br /> <br />The purpose of this policy is to establish guidelines for the City of Arden Hills' components of fund <br />balances and net assets. <br /> <br />Primary Policy Considerations <br /> <br />1. To meet the cash flow requirements of the City. <br />2. To maintain adequate fund balances and net assets in each individual fund of the City. <br />3. To provide for emergencies and contingency needs of the City. <br /> <br />Policy Statements <br /> <br />1. The Finance Director as a part of the annual budget process shall prepare an analysis of this <br />policy. The analysis shall project the status of the budget year ending fund balances and net <br />assets. <br /> <br />2. The Finance Director shall as a part of the annual audit and year-end financial statement <br />preparation process see that the appropriate reservations and designations are correctly made. <br />The designations established through this policy shall be used in designating funds for the year- <br />end financial statement purposes. <br /> <br />3. The General Fund balance shall be designated as of December 31" for the following purposes in <br />the amounts described below: <br /> <br />a. The City will maintain a general fund reserve of50% of the general fund's total annual <br />operating budget (this reserve includes the designation for cash flows). This ensures that <br />the City has adequate funds on hand to provide for operations between bi-annual property <br />tax collection periods <br /> <br />b. The City will maintain an amount sufficient to cover accumulated vacation and <br />compensatory time balances and that portion of PTO leave that would be payable under <br />the City's severance pay policy or union contracts. This amount shall be adjusted <br />annually as part of the year-end close and annual financial report process. <br /> <br />c. For specific purposes as authorized by the City Council. <br /> <br />Funds shall be designated first for compensated absences, second for cash flow needs and lastly <br />for emergencies/contingencies. <br /> <br />\\Metro-inet\ArdenHills\Finance\Policies and Pnbcedures\Policies\Fund Balance Policy. doc <br />Last printed 2/20/2008 9:36 AM <br />