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CITY OF SAN LEANDRO <br />NOTES TO BASIC FINANCIAL STATEMENTS <br />For The Year Ended June 30, 2016 <br /> <br /> <br />NOTE 9 – NET POSITION AND FUND BALANCES (Continued) <br /> <br />B. Fund Balances <br />Governmental fund balances represent the net current assets of each fund. Net current assets generally <br />represent a fund’s cash and receivables, less its liabilities. <br /> <br />The City’s fund balances are classified in accordance with Governmental Accounting Standards Board <br />Statement Number 54 (GASB 54), Fund Balance Reporting and Governmental Fund Type Definitions, <br />which requires the City to classify its fund balances based on spending constraints imposed on the use of <br />resources. For programs with multiple funding sources, the City prioritizes and expends funds in the <br />following order: Restricted, Committed, Assigned, and Unassigned. Each category in the following <br />hierarchy is ranked according to the degree of spending constraint: <br /> <br />Nonspendable represents balances set aside to indicate items do not represent available, spendable <br />resources even though they are a component of assets. Fund balances required to be maintained intact, <br />such as Permanent Funds, and assets not expected to be converted to cash, such as prepaid, notes <br />receivable, and land held for redevelopment are included. However, if proceeds realized from the sale or <br />collection of nonspendable assets are restricted, committed or assigned, then Nonspendable amounts are <br />required to be presented as a component of the applicable category. <br /> <br />Restricted fund balances have external restrictions imposed by creditors, grantors, contributors, laws, <br />regulations, or enabling legislation which requires the resources to be used only for a specific purpose. <br />Encumbrances and nonspendable amounts subject to restrictions are included along with spendable <br />resources. <br /> <br />Committed fund balances have constraints imposed by formal action of the City’s highest level decision- <br />making authority. The City Council is the highest level of decision-making authority for the City that can, <br />by adoption of a resolution prior to end if the fiscal year, commit fund balance. Once adopted, the <br />limitation imposed by the resolution remains in place until a similar action is taken to remove or revise <br />the limitation. Encumbrances and nonspendable amounts subject to council commitments are included <br />along with spendable resources. As of June 30, 2016, the City does not have committed fund balance. <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 /> <br />68