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6.G. - Pa§f Redwood 187 <br />City <br />Notes to the Basic Financial Statements <br />For the fiscal year ended June 30, 2018 <br />NOTE 10 - NET POSITION AND FUND BALANCES <br />GASB Statement No. 63 adds the concept of net position, which is measured on the full accrual basis, to <br />the concept of fund balance, which is measured on the modified accrual basis. <br />A. Net Position <br />Net position is the excess of all the City's assets over all its liabilities, regardless of fund. Net position is <br />divided into three captions. These captions apply only to net position, which is determined only at the <br />government -wide level and are described below: <br />Net investment in capital assets describes the portion of net position which is represented by the current <br />net book value of the City's capital assets, less the outstanding balance of any debt issued to finance these <br />assets. <br />Restricted describes the portion of net position which is restricted as to use by the terms and conditions of <br />agreements with outside parties, governmental regulations, laws, or other restrictions which the City <br />cannot unilaterally alter. These principally include developer fees received for use on capital projects, debt <br />service requirements, and redevelopment funds restricted to low and moderate income purposes. At June <br />30, 2018, restricted net position for the governmental activities was $64,923,970. <br />Unrestricted describes the portion of net position which is not restricted as to use. <br />B. Fund Balances <br />In the fund financial statements, fund balances represent the net current assets of each fund. Net current <br />assets generally represent a fund's cash and receivables, less its liabilities. As prescribed by GASB Statement <br />No. 54, governmental funds report fund balance in classifications based primarily on the extent to which <br />the City is bound to honor constraints on the specific purposes for which amounts in the funds can be <br />spent. As of June 30, 2018, fund balances for governmental funds are made up of the following: <br />Nonspendable Fund Balance — includes amounts that are (a) not in spendable form, or (b) legally or <br />contractually required to be maintained intact. The "not in spendable form" criterion includes items that <br />are not expected to be converted to cash, for example: inventories, prepaid amounts, and long-term loans <br />receivable. <br />Restricted Fund Balance-- includes amounts that can be spent only for the specific purposes stipulated <br />by external resource providers, constitutionally or through enabling legislation. Restrictions may <br />effectively be changed or lifted only with the consent of resource providers. <br />Committed Fund Balance — includes amounts that can only be used for the specific purposes determined <br />by a formal action, adopting a resolution, of the City's highest level of decision-making authority, the <br />City Council. Commitments may be changed or lifted only by the City adopting another resolution, as a <br />resolution imposed the constraint originally. <br />Assigned Fund Balance — comprises amounts intended to be used by the City for specific purposes that <br />are neither restricted nor committed. Intent is expressed by the City Council or City Manager, to which <br />the City Council has delegated the authority through a resolution, to assign amounts to be used for <br />specific purposes. <br />82 288 <br />