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<br />4. The amount of the General Fund balance greater than the sum of all General Fund designations <br />will be transferred to a fund or funds determined by the City Council. Such transfer is pursuant to <br />Council approval. <br /> <br />5. Fund balances held in Special Revenue Funds or Capital Project Funds for future program and/or <br />project costs and not yet legally obligated will be designated. <br /> <br />6. Fund balances in Debt Service Funds for future debt payments will be designated. <br /> <br />7. City enterprise funds shall have operating cash reserves sufficient to provide for monthly cash <br />flow, and for a reasonable level of equipment and infrastructure replacement. Major <br />reconstruction or system upgrades, may need to be funded from enterprise revenue bonds. <br />Annual utility rate reviews will be made in regard to projected operating expenses and capital <br />improvements. The Council will, on an annual basis, establish rates in accordance to operating <br />cost recovery and the projected capital improvement. <br /> <br />8. Fund balances will be designated according to the above guidelines up to the amount available <br />after other designations. This policy is not intended to require the reporting of deficit <br />undesignated fund balances. <br /> <br />Reserved Fund Balance and Restricted Net Assets - Portion of fund balance that is not appropriable <br />for expenditure or is legally segregated (restricted net assets) for specific future uses. <br /> <br />The City has several items that are legally restricted to a certain use such as: police forfeiture funds, <br />federal and state economic development revolving loans, park dedication fees, and bond proceeds. The <br />City has several amounts unavailable for appropriation such as: advances and deposits, inventories, etc. <br />These types of items will be reported as reserved fund balance and lor restricted net assets as required. <br /> <br />Unrestricted Fund Balances <br />Portion of fund balance that is appropriable for expenditure and not legally segregated for specific future <br />uses. Unrestricted fund balances may be either designated or undesignated. <br /> <br />Designated Fund Balance - Designations represent management's intended use of resources. <br /> <br />Designationfor cash flows - This designation will be established for the General Fund which is funded <br />largely from local government aid, property taxes, and market value credit. <br /> <br />Designation for special revenue funds - All amounts in the TCAAP Fund, Cable Fund, Risk Management <br />Fund, Park Fund, and Community Services Fund are used for special or specific purposes and will be <br />designated for such. <br /> <br />Designation for capital projects - All amounts in the Equipment, Building & Replacement Fund, Public <br />Safety Capital Fund, and the Capital Improvement Fund (PIR) are used to fund the capital improvement <br />program. The fund balances in these funds will all be designated for capital. <br /> <br />Designation for economic development - The City has grants and property tax monies (TIP) dedicated for <br />economic development. These funds will be designated for economic development. <br /> <br />Designationfor revenue stabilization - Revenues can fluctuate greatly from year to year, especially <br />interest earnings, and, in previous years, local government aid. This designation will be used if <br />determined to be needed by the City Administrator and Finance Director. <br /> <br />\\Metro-inet\ArdenHills\Finance\Policies and Prikedures\Policies\Fund Balance Policy. doc <br />Last printed 2/20/2008 9:36 AM <br />