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CITY OF EUGENE, OREGON <br />Notes to Basic Financial Statements <br />(1) Summary of Significant Accounting Policies, continued <br />(P) Fund Balance, continued <br />Fund balance is reported as restricted when the constraints placed on the use of resources are either: (a) externally <br />imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other <br />governments; or (b) imposed by law through constitutional provisions or enabling legislation. <br />Fund balance is reported as committed when the City Council passes an ordinance that places specific constraints on <br />how the resources may be used. The City Council can modify or rescind the ordinance at any time through passage <br />of an additional ordinance. <br />Resources that are constrained by the City’s intent to use them for a specific purpose, but are neither restricted nor <br />committed, are reported as assigned fund balance. Intent is expressed when the City Council approves which <br />resources should be “reserved” during the adoption of the annual budget. The policies that address the designation <br />of “reserves” are included in the City’s financial management goals and policies adopted by the Council. The City’s <br />Finance Director uses that information to determine whether those resources should be classified as assigned or <br />unassigned for presentation in the City’s Comprehensive Annual Financial Report. <br />Unassigned fund balance is the residual classification for the General Fund. This classification represents fund <br />balance that has not been restricted, commiPtted, or assigned within the General Fund. Unassigned fund balance is <br />primarily comprised of the difference between budget and actual results for the current fiscal year. This classification <br />is also used to report any negative fund balance amounts in other governmental funds.Unassigned fund balance is <br />typically appropriated or placed into a reserve by the City Council on the first supplemental budget of the following <br />year. <br />When both restricted and unrestricted (committed, assigned, or unassigned) resources are available for use, it is the <br />City’s practice to use restricted resources first, then unrestricted resources as needed. When an expenditure is <br />incurred where an unrestricted fund balance classification could be used, the City’s practice is to use committed <br />resources first, assigned resources second, and then unassigned amounts as they are needed. <br />continued <br />45 <br />