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-37- NOTE 5 – FUND BALANCES A. Classifications At December 31, 2019, a summary of the City’s governmental fund balance classifications are as follows: Permanent Other Improvement Governmental General Revolving Funds Total Nonspendable Prepaid items 22,438$ –$ 214$ 22,652$ Restricted for Tax increment purposes – – 948,034 948,034 Cable TV – – 148,450 148,450 Total restricted – – 1,096,484 1,096,484 Committed for Economic development authority – – 580,243 580,243 Assigned for Compensated absences 84,372 – – 84,372 Subsequent year’s budget 121,590 – – 121,590 Capital improvements – 3,762,602 294,445 4,057,047 Total assigned 205,962 3,762,602 294,445 4,263,009 Unassigned 2,987,183 – (227,892) 2,759,291 Total 3,215,583$ 3,762,602$ 1,743,494$ 8,721,679$ B. Minimum Unassigned Fund Balance Policy The City Council has formally adopted a fund balance policy regarding the minimum unassigned fund balance for the General Fund. The policy establishes the City will strive to maintain an unassigned General Fund balance of 50.0 percent of the subsequent year’s General Fund budgeted expenditures. At December 31, 2019, the unassigned fund balance of the General Fund was 59.5 percent of the subsequent year’s budgeted expenditures. NOTE 6 – DEFINED BENEFIT PENSION PLAN – STATE-WIDE A. Plan Description The City participates in the following cost-sharing, multiple-employer defined benefit pension plan administered by the Public Employees Retirement Association (PERA) of Minnesota. The PERA’s defined benefit pension plan is established and administered in accordance with Minnesota Statutes, Chapters 353 and 356. The PERA’s defined benefit pension plan is a tax qualified plan under Section 401(a) of the Internal Revenue Code. General Employees Retirement Fund (GERF) All full-time and certain part-time employees of the City are covered by the GERF. The GERF members belong to the Coordinated Plan. Coordinated Plan members are covered by Social Security.