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Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 NOTE 19 - FUND BALANCE County Fund Balance Policy The County elected to early implement the GASB Statement 54 - Fund Balance Reporting and Governmental Funds Type Definitions. The Statement requires the fund balance for governmental funds to be reported in classifications that comprise a hierarchy based primarily on the extent to which the government is bound to honor constraints on the specific purposes for which amounts in those funds can be spent. Categories There are five categories of fund balance for governmental funds under Statement 54: Nonspendable - Amounts that cannot be spent because they are not in spendable form or are legally or contractually required to remain intact. Restricted - Use of these resources is based on the constraints imposed externally by creditors, grantors, contributors, or laws and regulations of other governments; or imposed by law through constitutional provisions or enabling legislation. Committed - Amounts whose use is constrained by formal action of the Board of County Commissioners, including resolution or ordinance. This category includes contractual obligations entered into by the Board of County Commissioners. Assigned - Amounts constrained by the County's intent to be used for specific purposes. Amounts appropriated to eliminate a budgetary deficit in a subsequent year are reported in this category as well. Unassigned - Residual amounts in the general fund that do not meet any of the other fund balance classifications. Fund Balance Policy On September 21, 2010, the County approved a Fund Balance and Reserve Policy that set forth the following reserves of fund balance in the General, Transportation, and Emergency Services District Funds: Emergency/Disaster Relief Reserve - A balance of no less than 5% of budgeted operating expenditures for the current fiscal year will be reserved only for the purpose of responding to natural and man-made disasters. Disasters include hurricanes, tropical storms, floods, wildfires, or terrorist activities. These funds can only be used to respond and provide relief after such a disaster. Funds will be replenished over a five-year period after the completion of the recovery from the disaster. This reserve is presented as committed fund balance in those funds.