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CITY OF HUGO, MINNESOTA <br />NOTES TO FINANCIAL STATEMENTS (CONTINUED) <br />1. Summary of Significant Accounting Policies (Continued) <br />D. Assets, Liabilities, Deferred Inflows of Resources, and Net Position or Equity (continued <br />7. Fund equity <br />In the government -wide and proprietary financial statements, net position is classified in <br />the following categories: <br />Net Investment in Capital Assets — This amount consists of capital assets net of <br />accumulated depreciation and reduced by outstanding debt attributed to the acquisition, <br />construction or improvement of the assets. <br />Restricted Net Position — This amount is restricted by external creditors, grantors, <br />contributors, laws or regulations of other governments. <br />Unrestricted Net Position — This amount is all net position that does not meet the definition <br />of "net investment in capital assets" or "restricted net position". <br />The City classifies governmental fund balances as follows: <br />Non -spendable — includes fund balance amounts that cannot be spent either because it is <br />not in spendable form or because of legal or contractual restraints. <br />Restricted — amounts are restricted by external creditors, grantors, contributors, laws or <br />regulations of other governments. <br />Committed — includes amounts that can be used only for the specific purposes imposed by <br />formal action (resolution) of the City Council, which is the City's highest level of decision- <br />making authority. Those committed amounts cannot be used for any other purpose unless <br />the Council rescinds or changes the specified use by taking the same type of action <br />(resolution) it employed to previously commit those amounts. <br />Assigned — includes fund balance amounts that are intended to be used for specific <br />purposes that are neither considered restricted or committed. The City Council, by <br />majority vote, may assign fund balances to be used for specific purposes when <br />appropriate. The Council has delegated the power to assign fund balances to the City <br />Administrator and Finance Director. <br />Unassigned — includes positive fund balances within the General Fund which have not <br />been classified within the above mentioned categories and negative fund balances in other <br />governmental funds. The general fund is the only governmental fund that can report a <br />positive unassigned fund balance. <br />M <br />