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1 <br /> <br />FUND BALANCE POLICY <br />CITY OF NEW BRIGHTON <br />Adopted: July 11, 2017 <br /> <br /> <br />POLICY <br /> <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 /> <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 /> <br />This policy supersedes the previous policy adopted June 26, 2012. <br /> <br />I. SCOPE <br /> <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 /> <br />II. PURPOSE <br /> <br />The purpose of this policy is to (1) improve clarity and consistency of the 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 /> <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 /> <br /> <br /> <br /> <br />III. FUND BALANCE REPORTING