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RESOLUTION NO. f! /0 <br /> A RESOLUTION OF THE CITY OF LA PORTE, TEXAS, ESTABLISING FUND <br /> BALANCE POLICIES AS REQUIRED BY GASB 54; FINDING COMPLIANCE <br /> WITH THE OPEN MEETINGS LAW; AND SETTING AN EFFECTIVE DATE <br /> THEREOF <br /> WHEREAS, the Governmental Accounting Standards Board (GASB) has adopted <br /> Statement Number 54 (GASB 54), Fund Balance Reporting and Governmental Fund <br /> Type Definitions, that is effective in fiscal year 2010 -2011, and <br /> WHEREAS, the City of La Porte wishes to comply with GASB 54 as required <br /> beginning with the current October 1, 2010 to September 30, 2011 fiscal year; <br /> NOW THEREFORE BE IT RESOLVED that the City Council hereby adopts the <br /> following policy: <br /> FUND BALANCE POLICY <br /> Fund balance measures the net financial resources available to finance expenditures <br /> of future periods. The City of La Porte's Unassigned General Fund Balance will be <br /> maintained to provide the City with sufficient working capital and a margin of safety to <br /> address local emergencies without borrowing. The Unassigned General Fund Balance <br /> may only be appropriated by resolution of the City Council. <br /> Fund Balance of the City may be committed for a specific source by formal action of <br /> the City Council. Amendments or modification to the committed fund balance must <br /> also be approved by formal action of the City Council. Committed fund balance <br /> does not lapse at year -end. The formal action required to commit fund balance <br /> shall be by resolution or majority vote. <br /> The City Council delegates authority to assign fund balance for a specific <br /> purpose following approval by the Fiscal Affairs Committee to the City Manager <br /> of the City of La Porte. <br /> For purposes of fund balance classification, expenditures are to be spent from <br /> restricted fund balance first and then unrestricted. Expenditures incurred in the <br /> unrestricted fund balances shall be reduced first from the committed fund balance, <br /> then from the assigned fund balance and lastly, the unassigned fund balance. <br /> The City Council recognizes that good fiscal management comprises the <br /> foundational support of the entire City. To make that support as effective as <br /> possible, the City Council intends to maintain a minimum fund balance of 25 % of the <br /> City's general fund annual operating expenditures. If a fund balance drops below <br /> 25 %, it shall be recovered at a rate of 1% minimally, each year. This policy should <br /> be revisited each year for review. <br />