Page 56 - City of Bedford FY20 Approved Budget

order to ensure that the City is able to meet future debt service requirements, the Corporation
should maintain an assigned fund balance equivalent to one year of the average annual debt
service requirement, including related expenses.

NON-GOVERNMENTAL FUND BALANCE:

The fund balance categories discussed above do not apply to proprietary funds according to
GASB 54. Although it is not required by GASB, the City of Bedford recognizes the need for a
minimum working capital policy for the proprietary funds maintained by the City, such as the
Water and Sewer Fund and Stormwater Fund. Therefore, the Water and Sewer Fund shall
maintain its goal of a working capital amount equivalent to 90 days of operational expenses
excluding capital outlays. And the Stormwater Fund shall maintain its goal of a working capital
amount equivalent to 90 days of operational expenses excluding capital outlays. If the working
capital falls below the desired level, the City will implement the necessary corrective action, in
which the City Manager or designee will submit a plan to restore its working capital to the
desired level within the time period specified in the plan. These steps include, but are not limited
to, enacting cost saving measures; increasing user charges; holding capital purchases; freezing
positions; and/or reducing the workforce.

CAPITAL AND DEBT SERVICE FUNDS. Revenues in the Debt Service Fund are stable,
based exclusively on property tax revenues and transfers from other funds. Reserves in the Debt
Service Fund are designed to provide funding between the date of issuance of new debt and the
time that property tax levies are adjusted to reflect the additional debt.

IX. DEBT MANAGEMENT

TYPES OF DEBT. Long-term debt will not be used for operating purposes, and the life of a
bond will not exceed the useful life of a project financed by that bond issue.

When appropriate, and as approved by Council Policy, self-supporting revenues will pay debt
services in lieu of tax revenues.

ANALYSIS OF FINANCING ALTERNATIVES. The City will explore all financing
alternatives in addition to long-term debt including leasing, grants and other aid, developer
contributions, and use of reserves of current monies.

DISCLOSURE. Full disclosure will be made to bond rating agencies and other users of
financial information. The City staff, with the assistance of financial advisors and bond counsel,
will prepare necessary materials for presentation to rating agencies, will aid in the production of
Offering Statements, and will take responsibility for the accuracy of all financial information
released.

FEDERAL REQUIREMENTS. The City will maintain procedures to comply with arbitrage
rebate and other Federal requirements.

DEBT STRUCTURE. The structure should approximate level debt service unless operational

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