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Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2018 NOTE 16 - FUND BALANCE — Continued B. Fund Balance Policy - Continued Budget Stabilization 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 revenue declines or unfunded mandates from the state and federal governments. Funds utilized due to revenue declines will be replenished over a five-year period. Funds utilized for unfunded mandates or unanticipated expenditures cannot be used for more than a three-year period and must be replenished within five -years after the three-year period. At September 30, 2018, reserve amounts for those funds were: Budget Disaster Relief Stabilization Total General Fund $ 6,350,000 $ 6,350,000 $ 12,700,000 Transportation Fund 900,000 900,000 1,800,000 Emergency Services District Fund 2,000,000 2,000,000 4,000,000 Total $ 9,250,000 $ 9,250,000 $ 18,500,000 The General Fund reserves are included in the unassigned fund balance on the balance sheet. The Transportation Fund reserves are included in the assigned fund balance and the Emergency Services District Fund reserves are included in the restricted fund balance on the balance sheet. Emergency/Disaster Relief and Budget Stabilization Reserve amounts may only be revised by the Board of County Commissioners. Minimum Fund Balance - The approved fund balance policy dictates the County's attempt to maintain a minimum fund balance in the General, Transportation, and Emergency Services District funds of 20% of budgeted annual operating expenditures. The minimum fund balance level may be revised by the County Administrator or his designee. C. Spending Hierarchy For all governmental funds, when restricted, committed, assigned, and unassigned fund balances are combined in a fund, qualified expenditures are paid first from restricted or committed fund balance, as appropriate, then assigned and finally unassigned fund balances. D. Fund Balance Deficit The Federal/State Grants Fund, a nonmajor Governmental Fund, had a deficit in fund balance of $2,400 at September 30, 2018. This deficit will be eliminated by grant proceeds in fiscal year 2019. 105