Page 553 - Bedford-FY24-25 Budget

In lieu of a policy for unrestricted fund balance, funds that are constrained in the remaining
categories will be used in the order of: 1) committed, 2) assigned, 3) unassigned. Therefore, when
multiple categories of fund balance are available for expenditure (i.e. a construction project funded
partly by 1) a grant, 2) funds set aside by the City Council, & 3) unassigned funds), the City will
start with the most restricted category and spend those funds first before moving down to the next
category with available funds. Normally, this would result in the use of restricted, then committed,
then assigned, and lastly unassigned fund balance.

COMMITTED FUND BALANCE AUTHORITY:
The City Council is the City’s highest level of decision-making authority and the formal action
that is required to approve, modify, or remove a fund balance commitment is an ordinance adopted
by the City Council. The ordinance must adopt or rescind the commitment, as applicable, prior to
the last day of the fiscal year for which the commitment is made. The amount subject to the
constraint may be determined in the subsequent period. A committed fund balance should
incorporate contractual obligations to the extent that existing resources in the fund have been
specifically committed for use in satisfying those contractual obligations.

ASSIGNED FUND BALANCE AUTHORITY:
The City Council authorizes the City Manager or his/her designee as the official authorized person
to assign fund balance to a specific purpose approved by this policy. The specific purpose of an
assigned fund balance can include, but is not limited to, an appropriation of existing fund balance
to eliminate a projected deficit in the subsequent year’s budget in an amount not to exceed the
projected excess of expenditures over revenues. Additionally, the assigned fund balance will
include remaining amounts that are reported in the governmental funds (aside from the General
Fund), except negative amounts. Assignments in the General Fund are amounts that are intended
to be used for a specific purpose that is narrower than the general purpose of the government itself.
And governments cannot assign an amount to a specific purpose if it would cause a deficit in the
unassigned fund balance.

MINIMUM UNASSIGNED FUND BALANCE:
It is the goal of the City of Bedford to achieve and maintain an unassigned fund balance in the
general fund equal to 20% of operational expenditures excluding capital outlays or one-time use
of fund balance for unanticipated expenditures, unforeseen revenue fluctuations, or other adverse
circumstances. The fund balance level, however, may be reduced to the equivalent of 15% of
budgeted expenditures in unusual financial circumstances, as determined by the City Council.

Moreover, if such a situation occurs, the City will implement necessary corrective action, in which
the City Manager will submit a plan to restore the unassigned fund balance to the equivalent of
20% of operational expenditures as soon as economic conditions allow. These steps include, but
are not limited to, identifying, nonrecurring, or alternative sources of revenue, increasing existing
revenues, charges and/or fees: use of year-end surpluses; enacting cost saving measures such as
holding capital purchases, reducing departmental operating budgets, freezing vacant positions,
and/or reducing the workforce. The time period to replenish the fund balance shall be defined
within the City Manager’s plan submittal.

Moreover, in accordance with GASB 54 standards, all special revenue funds will have an assigned
fund balance; however, the Tourism Fund will maintain its goal based on the greater of 20% of
operating expenditures excluding capital outlays. In addition, the funds that flow into the City of