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CITY OF SAN LEANDRO <br />STAFF REPORT <br />DATE: June 20, 2011 <br />TO: Stephen L. Hollister, City Manager <br />FROM: 417inance Tracy Vesely, Finance Director <br />Department <br />BY: �P Rodriguez, Deputy Finance Director <br />Finance Department <br />SUBJECT PROJECT /PROJECT DESCRIPTION: <br />APPROVED AND <br />FORWARDED <br />TO CITY COUNCIL <br />St p en Hollister <br />City Manager <br />RESOLUTION APPROVING THE FUND BALANCE COMPONENTS AS DEFINED IN <br />GOVERNMENT ACCOUNTING STANDARDS BOARD STATEMENT NO. 54. <br />SUMMARY AND RECOMMENDATION <br />Staff recommends City Council approving the Fund Balance components as defined in <br />Governmental Accounting Standards Board Statement No. 54 (GASB 54). This new statement <br />requires a formal adoption by the City Council by June 30, 2011. <br />BACKGROUND <br />The Governmental Accounting Standards Board (GASB) has issued its Statement No. 54, Fund <br />Balance Reporting and Governmental Fund Type Definitions. The requirements of this statement <br />are intended to improve financial reporting by providing fund balance categories that will be more <br />easily understood for the following governmental fund types; (a) General Fund: used to account for <br />and report all financial resources not accounted for and reported in another fund, (b) Special <br />Revenue Funds: used to account for and report the proceeds of specific revenue sources that are <br />restricted or committed, (c) Capital Projects Funds: used to account for and report financial <br />resources that are restricted, committed, or assigned, and (d) Debt Service Funds: used to account <br />for and report financial resources that are restricted, committed, or assigned. This new standard <br />does not change the total amount of a given fund balance. The categories are more clearly defined <br />to make the nature and extent of the constraints placed on a government's fund balance more <br />transparent. <br />Part of the City's implementation of this statement for fiscal year 2010 -11 is the formal adoption of <br />the City's definitions of reported fund balances. <br />The term fund balance is used to describe the difference between assets (what is owned) and <br />liabilities (what is owed) reported within a fund. In the past, fund balances have been classified <br />