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CITY OF SAN LEANDRO <br />NOTES TO BASIC FINANCIAL STATEMENTS <br />For The Year Ended June 30, 2015 <br /> <br /> <br />NOTE 10 – NET POSITION AND FUND BALANCES (Continued) <br /> <br />Assigned fund balances are amounts constrained by the City’s intent to be used for a specific purpose, but <br />are neither restricted nor committed. Intent is expressed through City Council resolution and/or budget <br />document or its designee (City Manager) and may be changed at the discretion of the City Council or its <br />designee. This category includes encumbrances; Nonspendable, when it is the City’s intent to use <br />proceeds or collections for a specific purpose, and residual fund balances, if any, of Special Revenue, <br />Capital Projects and Debt Service Funds which have not been restricted or committed. <br /> <br />Unassigned fund balance represents residual amounts that have not been restricted, committed, or <br />assigned. This includes the residual general fund balance and residual fund deficits, if any, of other <br />governmental funds. <br /> <br />C. Encumbrances <br /> <br />The City uses an encumbrance system as an extension of normal budgetary accounting for governmental <br />funds. Under this system, purchase orders, contracts, and other commitments for the expenditure of <br />monies are recorded in order to reserve that portion of applicable appropriations. Encumbrances <br />outstanding at year-end are recorded as restricted, committed or assigned fund balance, depending on the <br />classification of the resources to be used to liquidate the encumbrance, since they do not constitute <br />expenditures or liabilities. Outstanding encumbrances at year-end are automatically reappropriated for <br />the following year. Unencumbered and unexpended appropriations lapse at year-end. <br /> <br />As of June 30, 2015, the General Fund had outstanding encumbrances of $1,766,700. <br /> <br />D. Contingency Arrangements <br /> <br />The City’s annual budget requires the City to implement and maintain fund balance to handle any <br />unforeseen contingencies in the future, rather than continued reliance on the City’s operating General <br />Fund reserves. These unforeseen contingencies include Economic Uncertainty, major Emergencies and <br />Contingencies. As of June 30, 2015, the following are reported within the unassigned fund balance of the <br />General Fund: <br /> <br />Major Emergencies 5,000,000$ <br />Economic Uncertainty 7,412,413 <br />Other 6,821,476 <br />Compensated Absences 606,691 <br />Total 19,840,580$ <br /> <br />66