Page 411 - FY 2026-2027 Adopted Budget Book

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
matters dictate otherwise, or if market conditions indicate a potential savings could result from
modifying the level payment stream.

Consideration of market factors, such as the tax-exempt qualification, minimum tax alternative,
and so forth will be given during the structuring of long-term debt instruments.