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D. Provide financial stability and a positive trend of fund balance levels which will <br /> be a positive factor in our bond rating analysis. <br /> III. RESERVED FUND BALANCE <br /> A. The function of reserved fund balance is to isolate the portion of fund balance that , <br /> is not available for the ensuing year's budget. The City will follow all Generally <br /> Accepted Accounting Principles (GAAP) and Governmental Accounting <br /> Standards Board (GASB)pronouncements regarding requirements for reserving <br /> fund balances. <br /> B. The fund balance may be reserved for amounts determined by the City Council to <br /> be encumbered for a specific use in the subsequent year's budget. <br /> C. The fund balance may be reserved for unutilized budget appropriations from one <br /> year to be carried over to the subsequent year's budget. <br /> IV. DESIGNATED UNRESERVED FUND BALANCE <br /> A. Designations of fund balance are established to identify tentative plans for the use <br /> of financial resources. <br /> B. The fund balance of the Closed Bond Fund shall be designated for supplemental <br /> financing for the retirement of outstanding debt. <br /> C. The fund balance of the Environmental Restoration Fund shall be designated for <br /> capital projects and for supplemental financing for the retirement of outstanding <br /> debt. <br /> D. The fund balance of the General Fund shall have a designated amount for cash <br /> flows for the subsequent year's operating budget. The targeted designated <br /> amount shall be equal to 50% of the subsequent year's General Fund property tax <br /> levy, less any debt service portion included, and 50% of State Aidrevenues <br /> anticipated in the ensuing year's operating budget. <br /> E. The General Fund shall have a portion of its fund balance designated for <br /> contingencies, such as emergencies and/or unanticipated expenditures. The <br /> targeted amount designated for contingencies shall be equal to 10% of the sum of <br /> the ensuing year's operating budget less debt service. <br /> F. The City Council may decide to designate portions of the fund balance for other <br /> items such as City projects and/or improvements, emergency or unanticipated <br /> expenditures, etc. <br /> Page 2 of 4 <br />