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Res. #11 -0 2/ <br /> A RESOLUTION AUTHORIZING FUND BALANCE POLICY <br /> I. PURPOSE <br /> The purpose of this policy is to establish specific guidelines the City of Centerville will <br /> use to maintain an adequate level of fund balance to provide for cash flow requirements <br /> and contingency needs because major revenues, including property taxes and other <br /> government aids are received in the second half of the City's fiscal year. <br /> The purpose of this policy is to also establish specific guidelines the City of Centerville <br /> will use to classify fund balances into a categories based primarily on the extent to which <br /> the City is bound to honor constraints on the specific purposes for which amounts in <br /> these funds can be spent. <br /> II. CLASSIFICATION OF FUND BALANCE/PROCEDURES <br /> 1. Nonspendable <br /> • This category includes fund balance that cannot be spent because it is either <br /> (i) not in spendable form or (ii) is legally or contractually required to be <br /> maintained intact. Examples include inventories and prepaid amounts. <br /> 2. Restricted <br /> • Fund balance should be reported as restricted when constraints placed on <br /> those resources are either (i) externally imposed by creditors, grantors, <br /> contributors, or laws or regulations of other governments or (ii) imposed by <br /> law through constitutional provisions or enabling legislation. <br /> 3. Committed <br /> • Fund balance that can only be used for specific purposes pursuant to <br /> constraints imposed by formal action of the government's highest level of <br /> decision - making authority. The committed amounts cannot be used for any <br /> other purpose unless the government removes or changes the specified use by <br /> taking the same type of action it employed to commit those amounts. <br /> • The City's highest level of decision making authority (City Council) will <br /> annually or as deemed necessary commit specific revenue sources for <br /> specified purposes by resolution. This formal action must occur prior to the <br /> end of the reporting period, however, the amount to be subject to the <br /> constraint, may be determined in the subsequent period. <br />