The purpose of this policy is to establish a key element of the financial stability of the city by setting guidelines for fund balance. Unassigned fund balance is an important measure of economic stability. It is essential that the city maintain adequate levels of unassigned fund balance to mitigate financial risk that can occur from unforeseen revenue fluctuations, unanticipated expenditures, and similar circumstances. The fund balance also provides cash flow liquidity for the city's general operations.
(Res. No. 2011-187, 9-20-2011)
The following words, terms and phrases, when used in this division, shall have the meanings ascribed to them in this section, except where the context clearly indicates a different meaning:
Fund equity
means a fund's equity is generally the difference between its assets and its liabilities.
Fund balance
means an accounting distinction is made between the portions of fund equity that spendable and nonspendable. These are broken up into five categories:
(1) 
Assigned fund balance
comprises amounts intended to be used by the government for specific purposes. Intent can be expressed by the governing body or by an official or body to which the governing body delegates the authority. In governmental funds other than the general fund, assigned fund balance represents the amount that is not restricted or committed. This indicates that resources in other governmental funds are, at a minimum, intended to be used for the purpose of that fund.
(2) 
Committed fund balance
means and includes amounts that can be used only for the specific purposes determined by a formal action of the government's highest level of decision-making authority. Commitments may be changed or lifted only by the government taking the same formal action that imposed the constraint originally.
(3) 
Nonspendable fund balance
means and includes amounts that are not in a spendable form or are required to be maintained intact. Examples are inventory or permanent funds.
(4) 
Restricted fund balance
means and includes amounts that can be spent only for the specific purposes stipulated by external resource providers either constitutionally or through enabling legislation. Examples include grants and child safety fees.
(5) 
Unassigned fund balance
means the residual classification of the general fund and includes all amounts not contained in other classifications. Unassigned amounts are technically available for any purpose.
(Res. No. 2011-187, 9-20-2011)
The city council is the city's highest level of decision-making authority and the formal action that is required to be taken to establish, modify, or rescind a fund balance commitment is a resolution approved by the council at the city's council meeting. The resolution must either be approved or rescinded, as applicable, prior to the last day of the fiscal year for which the commitment is made. The amount subject to the constraint may be determined in the subsequent period.
(Res. No. 2011-187, 9-20-2011)
The city council has authorized the city's mayor, city manager or chief financial officer as the official authorized to assign fund balance to a specific purpose as approved by this fund balance policy.
(Res. No. 2011-187, 9-20-2011)
(a) 
The city shall strive to maintain the general fund unassigned fund balance at a minimum of 90 days of current year budgeted expenditures. After the general fund has gathered sufficient resources, additional unassigned funds will be allowed to accumulate for future general fund capital improvements.
(b) 
Should such use reduce the balance below the appropriate level set as the objective for that fund, the city shall take action necessary to restore the unreserved, undesignated fund balance to acceptable levels within three years.
(Res. No. 2011-187, 9-20-2011)
In other operating funds, the city shall strive to maintain a positive retained earnings position to provide sufficient reserves for emergencies and revenue shortfalls. The minimum working capital in the enterprise fund shall be 90 days of current year budgeted expenditures.
(Res. No. 2011-187, 9-20-2011)
After these funds have gathered sufficient resources, additional unassigned funds will be allowed to accumulate for further utility/operating fund capital improvements.
(Res. No. 2011-187, 9-20-2011)
Fund balance and retained earnings may be used in one or a combination of the following ways: emergencies, one time expenditures that do not increase recurring operating costs, major capital expenditures and start-up expenditures for new programs undertaken at mid-year.
(Res. No. 2011-187, 9-20-2011)