ACFR - FY2021 FINAL 5-13-22 USE THIS ONE - Flipbook - Page 72
NOTES TO FINANCIAL STATEMENTS
CITY OF EUSTIS, FLORIDA Continued)
Note 1 - Description of Funds and Summary of Significant Accounting Policies (Continued)
Assets, Liabilities, and Fund Equity (Continued)
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Fund Balances
The City adopted a policy that will set aside funds for maintaining sufficient working
capital. This is approximately equal to two to three months of operating expenses. The
25% balance set aside will be calculated as a percentage of ordinary operating
expenses not inclusive of debt service, capital outlay, and other financing use. This
amount is required to cover short-term cash flow variations, economic downturns, and
emergencies. The City Commission will also approve an amount set aside for
contingencies such as catastrophic events or unforeseen losses through insurance or
litigation as part of the annual budget process.
The City has classified governmental fund balances as follows:
Non-spendable: This classification includes amounts that cannot be spent because
they are either (a) not in spendable form or (b) are legally or contractually required to
be maintained intact. The City has donations to the Library Trust Fund, maintaining
the principal. Only the interest earnings may be used.
Restricted: This classification includes amounts for which constraints have been
placed on the use of the resources either (a) externally imposed by creditors (such as
through a debt covenant), grantors, contributors, or laws or regulations of other
governments, or (b) imposed by law through constitutional provisions or enabling
legislation. The City has classified Fines and Forfeitures are restricted because State
Statute limits their use for police investigative expenditures.
The redevelopment funds are restricted to a City’s designated area and are exclusive
to that area alone. Infrastructure Projects are restricted by State Statute and County
laws and are legally segregated to fund infrastructure improvements. Other funds are
restricted to library operations and other specific developer agreements obligating
funds to a particular use.
Committed: This classification includes amounts that can be used only for specific
purposes under constraints imposed by formal action of the City Commission. These
amounts cannot be used for any other purpose unless the City Commission removes
or changes the specified use by taking the same type of action (ordinance) employed
when the funds were initially committed. This classification also includes contractual
obligations to the extent that existing resources have been committed explicitly for
use in satisfying those contractual requirements.
Assigned: This classification includes amounts constrained by the City’s intent to be
used for a specific purpose but is neither restricted nor committed. The City
Commission can express this intent or delegate this responsibility to the City manager
through the budgetary process. This classification also includes monies allocated to
future fiscal years to weather the current economic crisis.
Unassigned: This classification includes the residual fund balance for the General
Fund and the amount established for Minimum Funding, representing the portion of
the General Fund balance established by Resolution 11-59, as amended throughout
the year by resolutions needed.
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