HomeMy Public PortalAboutPolicy for Fund BalanceRESOLUTION NO. 011-15
A RESOLUTION OF THE TOWN COMMISSION OF THE TOWN OF GULF
STREAM, FLORIDA ESTABLISHING A FUND BALANCE POLICY OFTHE
TOWN OF GULF STREAM; PROVIDINGSEVERABILITY; PROVIDING AN
EFFECTIVE DATE; AND FOR OTHER PURPOSES.
WHEREAS, the Town Commission of the Town of Gulf Stream, Florida desires to establish a
Fund Balance Policy in Accordance with the GASB Statement No. 54; Fund Balance Reporting and
Governmental Fund Type Definitions; and
WHEREAS, such a policy has been prepared and a copy thereof is attached hereto;
NOW, THEREFORE, BE IT RESOLVED BYTHETOWN COMMISSION OFTHETOWN OF
GULF STREAM, FLORIDA, THAT:
Section 1. The Town Commission of the Town of Gulf Stream, Florida hereby adopts the
'Town of Gulf Stream Fund Balance Policy in Accordance with GASB Statement No.54", attached
hereto as "Exhibit A", and hereby directs the Town Manager to implement said policy.
Section 2. If any section, subsection, clause or provision of this resolution is held invalid,
the remainder shall not be affected by such invalidity.
Section 3. All resolutions or parts of resolutions in conflict herewith shall be and hereby
are repealed
Section 4. This resolution shall take effect immediately upon adoption.
PASSED AND ADOPTED this 15th day of September, 2011.
Vice ayor
Commissioner
(SEAL)
Com§ioner
Commissioner
ATTEST
Town Clerk j
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Fund Balance Policy
Approved on 9/15/2011
Page 2
Nonspendable fund balance includes amounts that cannot be spent because they are either (a)
not in spendable form or (b) legally or contractually required to be maintained intact. The "not
in spendable form" criterion includes items that are not expected to be converted to cash, for
example, inventories and prepaid amounts. It also includes the long-term amount of loans and
notes receivable, as well as property acquired for resale. However, if the use of the proceeds
from the collection of those receivables or from the sale of those properties is restricted,
committed, or assigned, then they should be included in the appropriate fund balance
classification (restricted, committed, or assigned), rather than nonspendable fund balance. The
corpus (or principal) of a permanent fund is an example of an amount that is legally or
contractually required to be maintained intact
Restricted fund balance includes amounts that are restricted to specific purposes when
constraints placed on the use of resources are either:
(a) Externally imposed by creditors (such as through debt covenants), grantors, contributors, or
laws or regulations of other governments; or
(b) Imposed by law through constitutional provisions or enabling legislation.
Enabling legislation authorizes the Town to assess, levy, charge, or otherwise mandate
payment or resources (from external resource providers) and includes a legally enforceable
requirement that those resources be used only for the specific purposes stipulated in the
legislation. Legal enforceability means the government can be compelled by an external party —
such as citizens, public interest groups, or the judiciary — to use resources created by enabling
legislation only for the purposes specified by the legislation.
Committed fund balance includes amounts that can be used only for specific purposes pursuant
to constraints imposed by an ordinance, the Town's highest level of decision making authority.
Those committed amounts cannot be used for any other purpose unless the Town removes or
changes the specified use by taking the same type of action (an ordinance) it employed to
previously commit those amounts. Committed fund balance should incorporate contractual
obligations to the extent that existing resources in the fund have been specifically committed
for use in satisfying those contractual requirements. Amounts in the committed fund balance
classification may be redeployed for other purposes pursuant to an ordinance. Constraints
imposed on the use of committed amounts are imposed by the Town, separate from the
authorization to raise the underlying revenue. Therefore, compliance with constraints imposed
by the Town that commit amounts to specific purposes is not considered to be legally
enforceable. An ordinance that commits fund balance to a specific purpose should be adopted
prior to the end of the reporting period, but the amount, if any, which will be subject to the
constraint, may be determined in the subsequent period.
Assigned fund balance includes amounts intended to be used by the Town for specific
purposes, but are neither restricted or committed. Intent should be expressed by the Town
Commission or the Town Manager to which the Town Commission has delegated authority to
assign amounts to be used for specific purposes. The authority for making an assignment is not
required to be the Town's highest level of decision-making authority. Constraints imposed on
the use of assigned amounts are more easily removed or modified than those imposed on
amounts that are classified as committed.
In governmental funds other than the general fund, assigned fund balance includes all
remaining amounts (except for negative balances) that are not classified as nonspendable and
are neither restricted nor committed. In the general fund, assigned fund balance includes all
amounts that are intended to be used for specific purposes in accordance with the Town's
expressed intent, but are neither restricted or committed. By reporting particular amounts that
are not restricted or committed in a special revenue, capital projects, debt service, or permanent
fund, the Town has assigned those amounts to the purpose of the respective funds. Assignment
within the general fund conveys that the intended use of those amounts is for a specific purpose
that is narrower than the general purposes of the Town itself An assignment for an amount to a
specific purpose should not be reported if the assignment would result in a deficit in unassigned
fund balance.
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