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FUND BALANCE POLICY <br /> CITY OF NEW BRIGHTON <br /> Adopted: 2012 <br /> POLICY <br /> The City of New Brighton has a fiduciary responsibility to its citizens and taxpayers to carefully <br /> account for public funds, to manage its finances prudently and to adequately plan the financing <br /> of City services including the provision and maintenance of public facilities and infrastructure. <br /> The City is also responsible for its short-term and long-term financial stability. The City must <br /> ensure that it is, and will continue to be, capable of adequately funding and providing City <br /> services needed by the community. <br /> Governmental funds report the difference between their assets and liabilities as fund balance. <br /> Fund balance is one method used to measure the availability of financial resources in a <br /> governmental fund. It is essential that the City maintain adequate levels of fund balance to <br /> mitigate current and future risks, such as revenue shortfalls, unanticipated expenditures and <br /> emergencies, and to ensure stable tax rates, service levels and adequate cash flows. Fund <br /> balance levels are a crucial consideration in long-term financial planning. <br /> This policy supersedes the previous policy adopted May 10, 2005. <br /> I. SCOPE <br /> This fiscal policy provides the framework for the overall fiscal management of the fund balances <br /> for the City's governmental funds. Governmental funds include the general fund, special <br /> revenue funds, debt service funds, and capital project funds. Enterprise funds and internal <br /> service funds are not within the scope of this policy since they are not governmental funds. <br /> II. PURPOSE <br /> The urpose ofthis isi(1)Jmproye clarityandconsistenc_y_afthe fund_balance <br /> information provided; (2) formalize stabilization-like arrangements by establishing targeted <br /> and/or minimum fund balances; and (3) define and integrate the City's fund balance policy for its <br /> governmental funds to be in compliance with generally accepted accounting principles (GAAP) <br /> and Governmental Accounting Standards Board(GASB) Statement No. 54,Fund Balance <br /> Reporting and Governmental Fund Type Definitions. <br /> GASB # 54 sets out new standards of accounting and financial reporting that are intended to <br /> improve the clarity and consistency of the fund balance information provided to financial report <br /> users. It is designed to improve this information by providing clearer, more structured fund <br /> balance classifications, and by clarifying the definitions of existing fund types. <br /> Page 1 of 6 <br />