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CITY OF SAN LEANDRO
<br />NOTES TO BASIC FINANCIAL STATEMENTS
<br />For The Year Ended June 30, 2024
<br />NOTE 11 – NET POSITION AND FUND BALANCES (Continued)
<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 />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, 2024, the City does not have committed fund balance.
<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 />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 />C. Encumbrances
<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 />As of June 30, 2024, the General Fund had outstanding encumbrances of $11,349,724.
<br />D. Contingency Arrangements
<br />The City’s annual budget requires the City to implement and maintain fund balance to handle any
<br />unforeseen contingencies in the future, rather than continued reliance on the City’s operating General
<br />Fund reserves. These unforeseen contingencies include Economic Uncertainty, major Emergencies and
<br />Contingencies. As of June 30, 2024, the following are reported within the unassigned fund balance of the
<br />General Fund:
<br />Compensated Absences 999,852$
<br />Major Emergencies 5,000,000
<br />Economic Uncertainty 26,725,400
<br />Internship program 50,000
<br />Community impact 1,200,000
<br />Other Remaining Unassigned 36,357,888
<br />Total 70,333,140$
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