Fund Balance Policy 1.03 REVISED 4 10 2024

BOF 1.03 
1 
 
TOWN OF WATERFORD 
FUND BALANCE POLICY 
 
OBJECTIVE 
The Town of Waterford feels it necessary to maintain an adequate unrestricted fund balance in the General 
Fund to provide for a sound financial base for current and future budgets as well as mitigating risks such as 
revenue shortfalls or unexpected expenditures. An adequate level of unrestricted fund balance will also assist 
the Town in maintaining its bond rating.  
 
DISCUSSION  
Waterford recognizes the new Fund Balance components below in accordance with Government Accounting 
Standards Board (GASB) Pronouncement #54. 
• 
Non Spendable Fund Balance-Amounts that cannot be spent because they are either: 
 
Not in a spendable form such as long-term receivables, inventory, or prepaid expenses. 
 
Legally or contractually required to be maintained intact, such as an endowment fund 
• 
Restricted Fund Balance - Amounts that have legally enforceable constraints placed on their use by 
external parties or external laws and regulations. 
• 
Committed Fund Balance -Amounts that can only be used for specific purposes pursuant to constraints 
imposed by formal action of the government's highest level of decision-making authority (RTM) 
• 
Assigned Fund Balance - Amounts intended to be used for specific purposes, but are neither restricted 
nor committed 
• 
Unassigned Fund Balance-Amounts that do not fall within any other classification. 
 
POLICY 
The Town will maintain an unassigned fund balance as of June 30th of each year between 13% and 15% of the 
subsequent fiscal years budgeted General Fund revenue.  
 
The use of General Fund Unassigned Fund balance in excess of the maximum level shall be limited to one-time, 
non-recurring purposes. Examples include Capital Projects, transfer to Capital Non-recurring fund, 
emergency/storm response, debt service mitigation, land acquisition, and other one-time, nonrecurring uses 
determined to be in the best financial interest of the Town.  
 
The General Fund Unassigned Fund Balance may be appropriated as authorized by the RTM upon approval by 
the Board of Finance.  
 
General Fund Unassigned Fund Balance in excess of the maximum level will not be allocated to ongoing 
operations to avoid a revenue gap in subsequent budget years.  
 
For purposes of fund balance classification, expenditures are to be spent from restricted fund balance first, 
followed in order by committed fund balance, assigned fund balance and lastly, unassigned fund balance.  
 
If Unassigned Fund Balance falls below the minimum level, the Board of Finance will propose a plan to restore it 
to the minimum 13% level within three years. 
 
ADOPTED:  November 18, 2015 
REVISED: April 10, 2024