2012-02 Fund Balance RESOLUTION NO. 12-02
A RESOLUTION OF THE CITY OF OKEECHOBEE,
• FLORIDA; ESTABLISHING A FUND BALANCE AND
RESERVE POLICY FOR THE CITY OF OKEECHOBEE;
PROVIDING FOR SEVERABILITY; AND PROVIDING AN
EFFECTIVE DATE.
WHEREAS, the City of Okeechobee desires to establish a Fund Balance and Reserve
Policy consistent with the Governmental Accounting Standards Board Statement
No. 54, Fund Balance Reporting and Government Fund Type Definitions (GASB
54); and
WHEREAS, such a policy has been prepared and a copy thereof is attached hereto.
NOW, THEREFORE, be it resolved, before the City Council for the City of Okeechobee,
Florida; presented at a duly advertised public meeting; and passed by majority vote
of the City Council; and properly executed by the Mayor or designee, as Chief
Presiding Officer for the City that:
SECTION 1. The City Council hereby adopts the "City of Okeechobee Fund
Balance and Reserve Policy,"attached hereto as"Exhibit A,"and hereby directs the
City Administrator to implement said policy.
SECTION 2. If any section, subsection, sentence, clause, phrase or portion of this
Resolution, or application hereof, is for any reason held invalid or unconstitutional
by any court of competent jurisdiction, such portion or provision and such holding
shall not affect the validity of the remaining portions or applications here.
SECTION 3. Effective Date. This Resolution shall be effective as of September 30,
2011.
INTRODUCED AND ADOPTED in regular session this 7th da • February, 2012.
_ - id. /
James � . Kirk, Mayor
ATTEST:
Al
Lane amiotea, I MC, City Clerk
REVIEWED FOR LEGAL SU FICIENCY:
I�John R. Cook, City Attorney
•
Resolution No. 12-02 Page 1 of 2
RESOLUTION NO. 12-02 — EXHIBIT A
City of Okeechobee
FUND BALANCE AND RESERVE POLICY
PURPOSE
To establish a policy to remain in compliance with new accounting standard
Governmental Accounting and Financial Standards Board Statement No. 54, Fund
Balance Reporting and Governmental Fund Type Definitions (GASB 54). Fund
Balance shall be composed of non-spendable, restricted, committed, assigned and
unassigned amounts.
DEFINITIONS
Fund Balance — As defined by the Governmental Accounting, Auditing and
Financial Reporting of the Government Finance Officers Association, fund balance
is `the difference between assets and liabilities reported in a governmental fund."
Non-Spendable Fund Balance --Amounts that are(a) not in spendable form or(b)
legally or contractually required to be maintained intact. "Not in spendable form"
includes items that are not expected to be converted to cash (such as inventories
and prepaid amounts) and items such as long-term amount of loans and notes
receivables, as well as property acquired for resale. 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 —Amounts that can be spent only for specific purposes
stipulated by(a) external resource providers such as creditors (by debt covenants),
grantors, contributors, or laws or regulations of other governments; or (b) imposed
by law through constitutional provisions or enabling legislation.
Committed Fund Balance — Amounts that can be used only for the specific
purposes determined by a formal action (resolution) of the Council, the Council's
highest level of decision making authority. Commitments may be changed or lifted
only by the council taking the same formal action (resolution) that imposed the
constraint originally.
Assigned Fund Balance—Includes spendable fund balance amounts established
by the city Administrator of the Council that are intended to be used for specific
purposes that are neither considered restricted or committed.
Unassigned Fund Balance — Unassigned fund balance is the residual
classification for the general fund. This classification represents fund balance that
has not been assigned to other funds and that has not been restricted, committed,
or assigned to specific purposes within the general fund. Unassigned fund balance
may also include negative balances for any governmental fund if expenditures
exceed amounts restricted committed, or assigned for those specific purposes.
POLICY
The classifications of fund balance between Non-Spendable, Restricted,
Committed, Assigned and Unassigned shall be reviewed annually during the
preparation of the annual financial statement based on definitions above. The
Finance Director will make recommendation to the City Administrator and Council
for classification of funds for assigned fund balance and committed fund balance,
respectively. Funds to be classified as Committed require a resolution to be
approved by the Council to commit and un-commit the funds to the classification.
Funds to be classified as assigned require City Administrator approval.
Resolution No. 12-02 Page 2 of 2