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Town of Trenton
POLICY NO. FIN-20240312
APPROVED: 2024-03-12
PAGE 1 OF 2
RESERVE FUNDS POLICY
Purpose
The purpose of the Reserve Funds Policy is to improve the process of planning for the Town of Trenton's
future financial needs. In general, the intention of Reserve Funds is to serve three specific purposes:
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Contingency Funds for Opportunities;
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Contingency Funds for Risk; or
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Saving Funds for Obligations
Reserves are a means by which the Municipality can accumulate funds for an anticipated or unanticipated
future requirement. This differs from the Operating Budget (General Fund) which the Municipality, in
accordance with the Nova Scotia Municipal Government Act, must budget for a year-end balance of zero.
Scope
All employees of the Municipality with budget and spending authority responsibilities fall within the scope
of this policy and must adhere to the policy statements contained within this document.
Policy
Reserve funds are established by Council by setting aside money to help offset future financing
requirements. When required, the funds are drawn upon to finance capital and operating expenditures
as designated by Council. Using reserve funds to minimize tax rate fluctuations is a fundamental financial
management tool for the Municipality.
The establishment of reserves follows the general guidelines outlined in the Financial Reporting and
Accounting manual (FRAM), as issued by the Province of Nova Scotia. The general intent is to save for
large expenditures on equipment, balloon payments, studies, and other one-time expenditures by
appropriating funds from operating.
A resolution of Council, either through the approved budgets or separate motion, is required to withdraw
operating or capital fund reserves. The Municipality shall maintain the following funds and follow
requirements of Municipal Financial Reporting and Accounting Manual (FRAM) section 3 related to
reserves as well as the Utility and Review Board of Nova Scotia (UARBNS):
1. Capital Reserves
2. Operating Reserves
Town of Trenton
POLICY NO. FIN-20240312
APPROVED: 2024-03-12
PAGE 2 OF 2