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City of Elk River <br />Housing Redevelopment Authority <br />Financial Management Policies <br />Policy: HRA Fund -fund balance designation policy <br />Approval Date: <br />Amended Date: <br />Designation for HRA fund: <br />The amount of fund balance unreserved for cash flow shall be calculated as follows: <br />The HRA fund shall maintain an unreserved fund balance of not less than 40 percent of the next <br />year's budgeted operating expenditures. This calculation is made at the end of each fiscal year. If <br />the year-end fund balance exceeds this threshold, the Housing_Redevelopment Authority will <br />consider the need to retain the excess and increase the minimum fund balance before allocating <br />the monies to other uses. <br />All funds not designated for cash flow will be designated for HRA redevelopment. <br />A year-end fund balance allocation would take place leaving the remaining fund balance for cash <br />flow purposes (40 percent). The designated fund balance would be used. for housing related <br />projects. <br />Example• <br />Designated for: HRA redevelopment $60,000 <br />Unreserved for: cash flow 40,000 <br />Total Fund Balance $100,000 <br />C:\Users\cmehelich\AppData\Local\Microsoft\Windows\Temporary Internet <br />Files\OLK4635\Fund balance policy.doc <br />