Fund Balance Policy

1.      In accordance with the Governmental Accounting Standards Board (GASB) Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, effective for periods ended June 30, 2011, the Board of Selectmen recognizes the following with regards to fund balance.

Fund balance must be classified into one or more of the five following categories:

a.      Nonspendable Fund Balance – permanent trust funds (nonexpendable portion) non-cash assets such as inventories or prepaid items.

b.      Restricted Fund Balance – funds legally restricted for specific purposes, such as grant, library, income balance of permanent funds, and capital project fund cannot change purpose.

c.      Committed Fund Balance – amounts that can only be used for specific purposes pursuant to a formal vote at Town Meeting; such as expendable trust (capital reserve), nonlapsing appropriations, and other special revenue funds not listed under restricted can change purpose via vote at Town Meeting.

d.      Assigned Fund Balance –amounts intended by the Board for specific purposes.  Items that would fall under this type of fund balance could be encumbrances.

e.      Unassigned Fund Balance – residual spendable fund balance after subtracting all of the above amounts.

2.      Restricted Fund Balance.  Includes library, grants, and capital project funds, as well as income balances of permanent funds.

3.  Committed Fund Balance.  The Town Meeting, as the government’s highest level of decision-making authority, may authorize special revenue funds in accordance with the provisions of the New Hampshire Revised Statutes Annotated (RSAs) and expendable trust (capital reserve funds).

4.  Assigned Fund Balance – Lapse of Appropriations.  All appropriations shall lapse at the end of the fiscal year unless authorized in accordance with the provision of NH RSA 32:7.  In accordance with GASB-54, funds that are intended to be used for a specific purpose but have not received the formal approval action at the Governing Body level may be recorded as Assigned Fund Balance.  Likewise, redeploying assigned resources to an alternative use does not require formal action by the Governing Body.  It is the policy of the Town that the Select Board will have the authority to assign fund balance based on intentions for use of fund balance communicated by the Board or voted by the Legislative Body.

5.  Spending Prioritizations:

a.      When an expenditure is incurred that would qualify for payment with either restricted or unrestricted funds, it will be paid first from restricted funds.

b.      When an expenditure is incurred that qualifies for payment from either of the three unrestricted fund balance categories, it will be applied in the following order:

                1)  Committed,  2) Assigned, and  3) Unassigned.

6.      The Town will follow the provisions of the State Municipal Budget Law (RSA 32) in emergency situations which may cause an overexpenditure of total appropriations.

7.      The Board will maintain an appropriate level of unassigned fund balance following the guidelines established by the NH Government Finance Officers Association (GFOA), which are as follows:

a.      5% to 15% of regular general fund operating revenues, or

b.      8% to 17% of regular general fund operating expenditures

If the annual   DRA Minimum             DRA Maximum             NH GFOA                 NH GFOA

budget is:              Recommendation  Recommendation  Minimum                 Maximum

                        5%                              10%                             Recommendation  Recommendation

                                                                                        8%                              17%

$2,500,000      $125,000                        $250,000                        $200,000                        $425,000

$3,000,000      $150,000                        $300,000                        $240,000                        $510,000

$3,500,000      $175,000                        $350,000                        $280,000                        $595,000

$4,000,000      $200,000                        $400,000                        $320,000                        $680,000

8.  Annual Review.  Compliance with the provisions of this Policy shall be reviewed as a part of the Select Board's annual budget process.  

9.   See Addendum A for the specific assignments of each fund balance. 

10. Amendments.  This policy shall be amended if necessary, at a regularly noticed meeting of the Select Board in accordance with the Annual Review.  

11. This Policy shall be effective upon a vote of the Select Board and shall replace any and all Fund Balance Policies previously enacted by the Town.

Effective/Adopted:  02 March 2012

Reviewed and Readopted:  27 December 2012  Board of Selectmen Brett A Hunter, Greta St Germain,           Annmarie Scribner

Reviewed and Readopted 2013: Board of Selectmen  Brett Hunter, Leon F Holmes Sr, Gene Cordes            

        Changes: In item 8, changed to “Selectmen’s” annual budget process.

Reviewed and Readopted as amended: 12 February 2015:  Board of Selectmen Brett Hunter, Leon F Holmes Sr, Gene Cordes    

        Changes:  Updated types of funds to account for March 2014 Town Meeting changes of OHRV Special Revenue Fund to Revolving Fund; and creation of Special Detail Revolving Fund.  Updated Cable Revolving for Cable Committee now in place.

Reviewed/Readopted as amended: 22 February 2018  Board of Selectmen G Cordes, N Janvrin, R Barham

            Changes:  Updated Item 7 that the Board “acknowledges” the appropriate levels.

Reviewed/Readopted:  09 February 2023  Fremont Select Board G Cordes, N Janvrin, R Barham

Reviewed/Readopted as amended: 16 February 2023 Select Board G Cordes, N Janvrin, R Barham

Changes: update Board of Selectmen to Select Board based on TM 2021 vote; add all new funds created since last review or those not previously listed (Cemetery Maintenance ETF and general information on Capital Reserves).  Board decision that Appendix A is a working document that can be edited as funds update.

Fund Balances                                                                                                Addendum A

Cable Franchise Fee Revolving Fund (Assigned Fund Balance):  All use of funds is approved by the Board of Selectmen following a recommendation of the Cable Committee.   (It is assigned fund balance since authority is not at the highest level but delegated to the Board of Selectmen).

Police OHRV Revolving Fund: (Assigned Fund Balance):  All use of funds is approved by the Board of Selectmen following a recommendation of the Police Chief.  Funds can only be used for specific purpose related to the purpose of the funds and source of revenue from the collection of fine and forfeitures related to OHRV Trail use.  (It is assigned fund balance since authority is not at the highest level but delegated to the Board of Selectmen).  (This fund was created at the 03/11/2014 Town Meeting, and replaced the previous Special Revenue Fund for this purpose, which was rescinded 03/11/2014).

Police Special Detail Revolving Fund: (Assigned Fund Balance):  All use of funds is approved by the Board of Selectmen following a recommendation of the Police Chief.  Funds are used for the purpose of paying all costs associated with Special Details.  Any residual in the fund may be used to purchase police cruisers.  (It is assigned fund balance since authority is not at the highest level but delegated to the Board of Selectmen).  (This fund was created at the 03/11/2014 Town Meeting).

Parks & Recreation Playground Special Revenue Fund (Committed Fund Balance):  Use of funds must be approved by Town Meeting vote.  Funds can only be used for specific purpose related to enhancement of the playground at Memorial Fields.  (It is committed fund balance since use of funds is approved at Town Meeting).  

Parks & Recreation Revolving Fund (Assigned Fund Balance):  Funds from special programs and events sponsored by the Parks & Recreation Commission.  Use of funds is approved by the Select Board following recommendation of the Parks & Recreation Commission.  Funds may be expended for improvements at the fields and parks in Fremont.   

Capital Project Funds (Restricted Fund Balance):  Funds remaining in this account are from Project(s) which are considered large or ongoing or needed special financing like a bond or long term loan.  Funds from the projects can only be used for the purposes written in the warrant article approved at Town Meeting the project or to reimburse the principal payment of the loan or bond.  Any other usage of these funds other than the purposes in which the warrant article intended or the RSA allow must be approved at Town Meeting.  The only portion of this fund which is assigned is the balances of closed out projects or revenues above the project’s cost from other sources than the bonds or specific grants and or donations.

Grant, Donations and other outside funds (Restricted Fund Balance):  All funds can only be used for the purposes intended on the individual grant, donation or contribution.   Funds not used up will be considered deferred revenue and can be used until completely depleted only for the purposes intended.

Town Buildings Repair and Maintenance Expendable Trust Fund (Assigned Fund Balance): Use of funds is approved by the Select Board.  Funds intended for use in an emergent or unplanned situation where a building needed a repair or maintenance not included in an annual operating budget.  (This fund was created at the 03/18/2006 Town Meeting).

Library Maintenance Expendable Trust Fund (Assigned Fund Balance): Use of funds is approved by the Library Trustees.  Funds intended for repair and maintenance of items at the Fremont Public Library.  (This fund was created at the 03/10/2015 Town Meeting).

Computer Equipment Expendable Trust Fund (Assigned Fund Balance): Use of funds is approved by the Select Board.  Funds intended for use to purchase computer equipment and servers.  (This fund was created at the 03/12/2019 Town Meeting).

Fremont Police DARE Program Expendable Trust Fund (Assigned Fund Balance): Use of funds is approved by the Select Board upon recommendation of the Police Chief.  Additional funds may be appropriated by any Town Meeting and intended for use in with the educational DARE (Drug Awareness Resistance Education) program.  (This fund was created at the 03/08/2016 Town Meeting).

Highway Winter Maintenance Expendable Trust Fund (Assigned Fund Balance): Use of funds is approved by the Select Board.  Additional funds may be appropriated by any Town Meeting and intended for use in an extraordinary winter season that overcomes the annual operating budget for winter maintenance costs.  (This fund was created at the 03/08/2016 Town Meeting).

Cemetery Maintenance Trust Fund: (Assigned Fund Balance): Use of funds is approved by the Select Board following recommendation of the Cemetery Trustees.  Funds are collected from sale of cemetery lots and markers and used for the purpose of paying all costs associated with placement of markers at graves and maintenance of cemeteries.  (This fund was created at the 03/12/2019 Town Meeting).

Capital Reserve Funds (CRF) – The Town has adopted many Capital Reserve Funds over the years in accord with NH RSA 35:1.  For those that are currently active, information follows on the name, purpose, agent and date of creation.

Highway Winter Maintenance Building CRF (Assigned Fund Balance): Use of funds is approved by the Select Board.  Funds intended for building infrastructure for the Highway Department.  (This fund was created at the 03/13/1993 Town Meeting and updated at the 03/13/2012 Town Meeting to designate the Selectmen as Agents).

Fire Truck CRF (Restricted Fund Balance): Use of funds is approved by Town Meeting.  Funds for purchase of capital fire apparatus.  (This fund was created at the 03/18/1995 Town Meeting).

Revaluation CRF (Assigned Fund Balance): Use of funds is approved by the Select Board.  Funds used to offset every five year revaluation costs.  Fund originally established at 03/16/1996 Town Meeting.  Selectmen were voted as Agents as of the 03/09/2010 Town Meeting.

Town Hall Basement Renovations CRF (Assigned Fund Balance): Use of funds is approved by the Select Board.  Funds intended for renovation of the basement of the Town Hall.  (This fund was created at the 03/18/2006 Town Meeting and the Select Board was designated as Agent at the 03/09/2010 Town Meeting).

Bridge Construction & Reconstruction CRF (Assigned Fund Balance): Use of funds is approved by the Select Board.  Funds intended for construction and reconstruction of bridges.  (This fund was created at the 03/18/2006 Town Meeting and the Select Board was designated as Agent at the 03/13/2012 Town Meeting).

Historic Museum CRF Restricted Fund Balance): Use of funds is approved by Town Meeting.  Funds intended for construction of additional museum space.  (This fund was created at the 03/2008 Town Meeting).