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CITY OF PLEASANTON NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022 Note 10: Net Position/Fund Balances (Continued) Unrestricted Net Position This category represents the net position of the City, not restricted for any project or other purpose. b. Fund Balance In the fund financial statements, governmental funds report five classifications of fund balance as follows: Nonspendable – amounts that cannot be spent due to not being in a spendable form (long-term assets, prepaid expenses, inventory) or are legally or contractually required to be maintained intact. Restricted – amounts constrained for a specific purpose by external parties, constitutional provision, or enabling legislation. Committed – amounts constrained for a specific purpose by the governmental entity and designated as such by City Council, which is its highest level of decision-making authority. Assigned – amounts set aside for a specific purpose by a governing board or official that has been delegated the authority to assign amounts. Unassigned – portion of a fund that is not classified as nonspendable, restricted, committed, or assigned. The General Fund is the only fund that reports a positive unassigned fund balance amount. On June 21, 2011, the City Council adopted Resolution No. 11-463 classifying the City’s fund balances in conformance with Governmental Accounting Standards Board Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions. Fund balance commitments may be established only by formal action (either resolution or ordinance, as each is equally binding) of the City Council, the City's highest level of decision-making authority. Commitments may be modified or rescinded only by the City Council taking the same formal action that established the commitment originally. Assignment of fund balances to specific purposes may be established, modified, or rescinded by the City Council or the City's Director of Finance. Resolution No. 11-463 designated the Director of Finance as the City official to determine and define the amounts of those components of fund balance that are classified as “Assigned Fund Balance.” When an expense is incurred for purposes for which amounts in any of the unrestricted fund balance classifications could be used, the City's policy is to apply committed fund balance first, followed by assigned fund balance and then unassigned fund balance. The General Fund is the only fund that reports a positive unassigned fund balance amount. 92