FINANCIAL SECTIONCity of Eustis, FloridaNOTES TO FINANCIAL STATEMENTSNote 1 - Description of Funds and Summary of Signiocant Accounting Policies (Continued)deferred inflows of resources related to pension plans, pension expense, information about the netoduciary position, and additions to/deductions from the net oduciary position have been determinedon the same basis as the plans report them, for this purpose, beneot payments (including refunds ofemployee contributions) are recognized when due and payable by the beneot terms. Investmentsare reported at fair valueÿ The City allocated the net pension liability, deferred outflows for pensions,deferred inflows for pensions, and pension expense to funds and functions/activities based on theirrespective contributions made to the pension plans during the measurement yearÿïDeferred Outflows and Inflows of ResourcesIn addition to assets, the Statement of Net position reports a separate section for deferred outflows ofresources. This individual onancial statement element, deferred outflows of resources, represents aconsumption of net assets that applies to a future period(s) and will not be recognized as an outflowof resources (expense/expenditure) until that timeÿ The deferred outflows of resources reported inthe City9s Statement of Net position represents differences between expected and actual economicexperience, changes in actuarial assumptions, the net difference between projected and actualearnings on investments, changes in the proportion and differences between the City9s contributionsand proportionate share of contributions, and the City9s contributions after the measurement date,relating to the City9s deoned beneot pension plans. The City also has deferred outflows of resourcesdue to the implementation of GASb 75 related to the OpEb planÿ These amounts will be recognizedas expenses in future yearsÿIn addition to liabilities, the Statement of Net position reports a separate section for deferred inflowsof resources. This individual onancial statement element, deferred inflows of resources, representan acquisition of net assets that applies to future period(s), and will not be recognized as an inflow ofresources (revenue) until that time the deferred inflows of resources reported in the City9s Statementof Net position represent the difference between expected and actual economic experience andchanges in the proportion and differences between the City9s contributions and proportionate shareof contributions relating to the City9s deoned beneot pension plans. The City also has deferredinflows of resources due to the implementation of GASb 75 related to the OpEb planÿ These amountswill be recognized as reductions in expenses in future yearsÿïFund BalancesThe City adopted a policy that will set aside funds for maintaining sufocient working capital. This isapproximately equal to two to three months of operating expensesÿ The 25% balance set aside willbe calculated as a percentage of ordinary operating expenses exclusive of debt service, capitaloutlay, and other onancing uses. This amount is required to cover short-term cash flow variations,economic downturns, and emergenciesÿ The City Commission will also approve an amount set asidefor contingencies such as catastrophic events or unforeseen losses through insurance or litigationas part of the annual budget processÿThe City has classioed governmental fund balances as follows:Non-Spendable: This classiocation includes amounts that cannot be spent because they are either (a)not in spendable form or (b) are legally or contractually required to be maintained intact, it includesprepaid expenses and inventoryÿ The City has donations to the Library Trust Fund, requiring maintaining the principalÿ Only the interest earnings may be usedÿBack to TOCAnnual Comprehensive Financial Report | September 30, 202379
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