10-10-2012 Council Agenda - Laserfiche WebLink

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CITY OF LITTLE CANADA FUND BALANCE POLICY Adopted December 21, 2011 I. PURPOSE The purpose of this policy is to establish specific guidelines for the City of Little Canada to use to maintain an adequate level of fund balance to provide for cash flow requirements and contingency needs because of major revenues, including property taxes and other government aids received in the second half of the city's fiscal year. II. CLASSIFICATION OF FUND BALANCE /PROCECURES 1. Nonspendable This category includes fund balance that cannot be spent because it is either: (i) not in spendable form, or (ii) is legally or contractually required to be maintained intact. Examples include inventories and prepaid amounts. 2. Restricted Fund balance should be reported as restricted when constraints placed on those resources are either: (i) externally imposed by creditors, grantors, contributors, or laws or regulations of other governments, or (ii) imposed by law through constitutional provisions or enabling legislation. 3. Committed Fund balance 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. The committed amounts cannot be used for any other purposes unless the government removes or changes the specified use by taking the same type of action it employed to commit those funds. The City's highest level of decision making authority (City Council) will annually, or as deemed necessary, commit revenue sources for specified purposes by resolution. This formal action must occur prior to the end of the reporting period, however, the amount to be subject to the constraint, may be determined in the subsequent period. To remove the constraint on specified use of committed resources, the City Council must pass a resolution. 3