11/28/2011 Council Packet - Laserfiche WebLink

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Ptapose To provide a stable financial environment for the City of Lino Lakes' operations that allows the City to provide quality services to its residents in a fiscally responsible manner designed to keep services and taxes as consistent as possible over time. This fund balance policy is meant to serve as the framework upon which consistent operations may be built and sustained. Definitions Fund Balance Fund Balance is the difference between assets and liabilities in governmental funds (i.e. general fund, special revenue funds, capital project funds, debt service funds and permanent funds). Non - spendable Fund Balance Describes the amount of a fund balance that cannot be spent because it is either not in spendable form or there is a legal or contractual requirement for the funds to be remain intact. Spendable Fund Balance (Overview) - Describes the amount of fund balance that is available for appropriation based on the constraints that control how specific amounts can be spent. Typically, a significant portion of a government's spendable resources can be spent only for specified purposes. The following categories define the revenue source and the level of force of the constraint on spending. Categories should be supported by actual plans approved by either the governing body, an appropriate officer, grant providers or enabling legislation. Restricted Fund Balance The restricted fund balance category includes the portion of the spendable fund balance that reflects constraints on spending because of legal restrictions stipulated by outside parties (e.g., encumbrances for goods or services with outside parties - creditors, grantors outstanding at the end of the year), Also, any legal restrictions based on state statutes or grant requirements placed on the use for specific purposes. Committed Fund Balance The committed fund balance classification includes the portion of the spendable fund balance that reflects constraints that the city has imposed upon itself by a formal action of the city council (for example, an ordinance or resolution passed by a city council). This constraint must be imposed prior to year end but the amount can be determined at a later date. Assigned Fund Balance The assigned fund balance is the portion of the spendable fund balance that reflects funds intended to be used by the government for specific purposes assigned by more informal operational plans (e.g. capital goods replacement - the constraint on use is not imposed by external parties or by formal council action). In governmental funds other than the general fund (special revenue funds, capital project funds, debt service funds and permanent funds), assigned fund balance represents the amount that is not restricted or limited. Unassigned Fund Balance This is the residual classification for the government's General Fund and includes all spendable amounts not contained in the other classifications and, therefore, not subject to any constraints. Unassigned amounts are available for any purpose. These are the current resources available for which there are no government self - imposed limitations or set spending plan. Although there is generally no set spending plan for the undesignated 2 Financial Management Policy — Fund Balance P29