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Page 7 of 9 <br /> <br /> <br />Following direction from the City Council, staff will negotiate with PUSD regarding the proposed <br />changes. Other discretionary spending will continue to be reviewed in the coming months as part <br />of the mid-term budget process. <br /> <br />General Fund Reserves/Fund Balances <br />The City has five categories of fund balance as described below. The total of the amounts in <br />the last three categories (where the only constraint on spending, if any, is imposed by the <br />government itself) is termed unrestricted fund balance. <br /> <br />Nonspendable – amounts that cannot be spent due to not being in a spendable form (long- <br />term assets, prepaid expenses, inventory) or are legally or contractually required to be <br />maintained intact <br />Restricted – amounts constrained for a specific purpose by external parties, constitutional <br />provision, or enabling legislation <br />Committed – amounts constrained for a specific purpose by the governmental entity and <br />designed as such by City Council, which is the highest level of decision-making authority <br />Assigned – amounts set aside for a specific purpose by a governing board or official that has <br />been delegated the authority to assign amounts <br />Unassigned – portion of a fund that is not classified as nonspendable, restricted, committed, <br />or assigned. <br /> <br />Based on the foundation of sound financial management, the City set aside reserves for <br />economic uncertainties and emergencies. The City Council established a 20.0 percent reserve <br />target for the General Fund with a reserve range of 16.7 percent to 25.0 percent, excluding <br />committed reserves and the Rainy Day Reserve. The unassigned fund balance for the <br />General Fund is projected at $29.6 million at the end of Fiscal Year 2023/24, representing <br />about 20.0 percent of the General Fund operating expenditures. The Government Finance <br />Officers Association (GFOA) recommends a minimum reserve of 16.7 percent or two months <br />of operating expenditures. <br /> <br />The City’s nonspendable and restricted reserves are projected at $0.5 million and $18.7 <br />Page 218 of 228