Each year the city of Breezy Point does an audit. This displays a snap shot of the financial
affairs of the city at the end of the year.
The audit looks at all things financial but really focuses on beginning
and ending balances for each fund. The
city has four types of funds dealing with various components of our
operation.
The largest fund and the one used most often is the general
fund. Most of the city’s operations go
through this fund. An off shout to the
general fund is the debt service fund. This
fund is obvious in its intention as it receives funds intended for debt service
and also makes payments to settle debt service obligations. The city currently has one debt service fund. This will
change in the future with the issuance of a bond incurring debt. If additional debt is issued, each bond will
become its own debt service fund. The
city has special revenue funds which include the Cemetery and EDA funds. Funds associated with the maintenance of the
cemetery and the sale of lots and services are one special revenue fund. The EDA (Economic Development Authority) is
also a special revenue fund, carries a small balance but is used very little at
this time. The final fund type is an
enterprise fund, the Sewer Fund. This
fund manages the finances of the sewer system, taking in revenues for its
service and expenditures for these operations.
The city has a Comprehensive Fund Balance Policy. This policy, among other things, sets a limit
on the amount of unrestricted fund balance carried by the general fund. The limit that was set was 40-45% of the
general fund expenditure budget for the following year. Amounts in excess of that limit would be
transferred to a line item designated for future improvements. This year the transfer to future improvements
was $104,484.
With the sewer fund we designated two funds, one is the
operating fund and the other is the capital improvement fund. The same principle applies to these funds in
that the sewer operating fund ended with a balance in excess of 45% so $50,468
was transferred to the sewer capital fund.
Having these funds reserved for use as needed improves the
ability of the city to manage in a responsibly fiscal manner, reduces the need
to borrow and earns investment income in the process. With the segregation of funds it lends itself
to transparency and identifies where resources are available. Without segregation it becomes sometimes
difficult to understand the finances as a whole. Recognizing the resources annually with a
fund balance policy also becomes a sort of benchmark. Funds generated are the result of unspent
budgeted funds and/or revenues that exceed the budget. With a policy such as this the city can grow
and prosper making improvements without forcing the bottom line.
