CCP 06-26-2012 - Laserfiche WebLink

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CITY OF NEW BRIGHTON FUND BALANCE POLICY Adopted: May 10, 2005 POLICY The City of New Brighton has a fiduciary responsibility to its citizens and taxpayers to carefully account for public funds, to manage municipal fmances prudently and to adequately plan the financing of City services including the provision and maintenance of public facilities. The City is also responsible for its short-term and long-term financial stability. The City must insure that it is, and will continue to be, capable of adequately funding and providing local government services needed by the community. Fund balance is a term used to describe the net assets (difference between assets and liabilities) of governmental funds calculated in accordance with generally accepted accounting principles. Fund balance is one method used to measure the availability of financial resources in a governmental fund. It is essential that the City maintain adequate levels of fund balance to mitigate current and future risks, such as revenue shortfalls and unanticipated expenditures, and to ensure stable tax rates and service levels. Fund balance levels are a crucial consideration in long-term financial planning. I. SCOPE This fiscal policy provides the framework for the overall fiscal management of the fund balance for the following City funds, including reservations and designations: General, Closed Bond, and Environmental Restoration. II. OBJECTIVES In order to achieve its purpose,.this policy has the following objectives fir t rrgeies levels___ __ , — _ of fund balance: A. Avoid cash-flow interruptions, reduce the need for short-term borrowing and generate investment earnings. B. Provide for unanticipated expenditures, such as emergencies, natural disasters and unexpected increases in service delivery costs. C. Provide for temporary revenue shortfalls, such as reductions in State Aid revenues. Page 1 of 4