RESOLUTION 2011 - 17
(Resolution to Comply with Governmental Accounting Standards Board Statement Number 54)
WHEREAS, the Governmental Accounting Standards Board (“GASB”) has adopted Statement 54 (“GASB 54), a new standard for governmental fund balance reporting and governmental fund type definitions that became effective in governmental fiscal years starting after June 15, 2010; and
WHEREAS, the City of Hood River may have any or all of the following governmental fund types: general, special revenue, debt service, capital projects or permanent; and
WHEREAS, the GASB has created the following fund balance classifications for governmental fund types:
1. Nonspendable Fund Balance: This represents amounts that cannot immediately be converted to cash, such as inventory.
2. Restricted Fund Balance: This represents amounts constrained for a specific purpose by external parties, constitutional provision or enabling legislation, such as grants.
3. Committed Fund Balance: This represents amounts that have internally imposed restrictions mandated by formal action of the City Council. Committed resources may not be redeployed for another purpose unless the same type of formal action is taken by the City Council to reverse or modify the previously imposed restriction.
4. Assigned Fund Balance: These are amounts intended to be used for specific purposes, but do not meet the criteria to be classified as restricted or committed. Decision-making for assigning amounts may be delegated.
5. Unassigned Fund Balance: These are spendable amounts available for any purpose. Only the General Fund may report a positive unassigned balance, since all other governmental type funds were created for specific purposes; and
WHEREAS, the GASB has changed the definition of Special Revenue Funds. Special Revenue Funds now account and report the proceeds of specific revenue sources that are restricted or committed to expenditure for specific purposes other than debt service or capital projects;” and
WHEREAS, the City Council recognizes the need to maintain an operating reserve in the General Fund; and
WHEREAS, the City of Hood River wishes to comply with GASB 54 as required, beginning with the current July 1, 2010 – June 30, 2011 fiscal year.
NOW THEREFORE BE IT RESOLVED that the City of Hood River hereby adopts the following fund balance policy:
ORDER IN WHICH RESOURCES ARE TO BE EXPENDED
General Fund: It is the policy of the City that General Fund resources are to be expended – when multiple fund balance types are available for a specific purpose – in the following order: Restricted, Committed, Assigned, and Unassigned.
All other governmental fund types: It is the policy of the City that Special Revenue, Debt Service, Capital Projects and Permanent Funds resources are to be expended – when multiple fund balance types are available for a specific purpose – in the following order: Assigned, Committed and Restricted.
Commitments of resources to expenditure for specific purposes will be done by formal resolution of the City Council. Amendments or modifications to committed resources will also be done by formal resolution of the Council. Commitments of resources do not lapse at fiscal year end.
Authority to assign resources to expenditure for specific purposes is hereby delegated to the City Manager and the Finance Director.
UNRESTRICTED FUND BALANCE
The Council strives to maintain a General Fund unassigned balance of at least 10% of operating expenditures. However, the Council is aware that, as of the initial adoption of this policy, the fund balance percentage is below this benchmark.
Adopted by the Hood River City Council on this 13 day of June, 2011, to take effect immediately.
Arthur Babitz, Mayor
Jennifer Gray, City Recorder