HomeMy WebLinkAboutReso 2011-098RESOLUTION NO. 2011-098
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA ADOPTING A CITY COUNCIL POLICY
TITLED "FUND BALANCE POLICY FOR THE CITY'S
GOVERNMENTAL FUNDS," AS REQUIRED BY
GOVERNMENTAL ACCOUNTING STANDARDS BOARD
STATEMENT NO. 54
WHEREAS, in Februazy 2009, the Governmental Accounting Standards Board (GASB)
issued Statement No. 54, Fund Balance Reporting and Governrental Fund Type Definitions; and
WHEREAS this new standard does not change the total amount of a given fund balance,
but it substantially alters the categories and terminology used to describe the components that
make up a fund balance; and
WHEREAS, the new categories and terminology reflect an approach that focuses, not on
financial resources available for appropriating within a fund, but on the extent to which the City
is bound to honor constraints on the specific purposes from which amounts in the fund can be
spent; and
WHEREAS, the term fund balance is used to describe the difference between assets
(what is owned) and liabilities (what is owed) reported within a fund; and
WHEREAS, in the past, fund balances have been classified into three separate
components: Reserve, Designated and Undesignated; and
WHEREAS, there aze almost always important limitations on the purpose for which all or
a portion of the resources of a fund can be used; and
WHEREAS, the force of these limitations can vary significantly, depending on their
source; and
WHEREAS, the various components of the new fund balance reporting standard are
designed to indicate the extent to which the City is bound by these limitations placed upon the
resources; and
WHEREAS, GASB Statement No. 54 defines five new components of fund balance that
will replace the current existing three components; and
WHEREAS, the five new components aze Nonspendable Fund Balance, Restricted Fund
Balance, Committed Fund Balance, Assigned Fund Balance, and Unassigned Fund Balance; and
WHEREAS, part of the City's implementation of GASB Statement No. 54, is the City's
formal adoption of a fund balance policy for governmental funds; and
Resolution No. 20l 1-098
Page 2
WHEREAS, the policy formally delegates to the Director of Finance, as required by the
statement, the assignment of fund balance for specific purposes for inclusion in the annual
financial statements.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Chula
Vista does hereby adopt a City Council policy entitled, "Fund Balance Policy for the City's
Governmental Funds," as Required by Governmental Accounting Standards Board Statement
No. 54.
Presented by
Maria I achadoorian
Director of Finance/Treasurer
Approved asto form by
]en oogins
Ci ey
PASSED, APPROVED, and ADOPTED by the City Council of the City of Chula Vista,
California, this 7th day of June 2011 by the following vote:
AYES: Councilmembers: Aguilar, Bensoussan, Castaneda, Ramirez and Cox
NAYS: Councilmembers: None
ABSENT: Councilmembers: None
ATTES
~~_
Donna R. Norris, CMC, City Clerk
STATE OF CALIFORNIA )
COUNTY OF SAN DIEGO )
CITY OF CHULA VISTA )
Cheryl Cox, ayo
I, Donna R. Norris, City Clerk of Chula Vista, California, do hereby certify that the foregoing
Resolution No. 2011-098 was duly passed, approved, and adopted by the City Council at a
regulaz meeting of the Chula Vista City Council held on the 7th day of June 2011.
Executed this 7th day of June 2011. q
Donna R. Norris, CMC, City Clerk