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One change will be related to the City's Park Fund. This fund is currently classified as a Special Revenue Fund. Under GASB 54, this fund no longer meets the definition of a Special Revenue fund, as there are no specific revenue sources. The fund will still be tracked separately, but for reporting purposes, will be reflected under General Fund Activities. Another fund that will be reclassified is the Trott Brook Cemetery Fund. The majority of the expenditures in this fund are capital related - fencing, head stones. This allows the City to reclassify the fund to a Capital Projects Fund. This does not change how the City uses the Fund; it only changes what section of the CAFR it is presented in. The second change is related to fund balance commitments. To meet the Special Revenue Fund definition, a fund must have "specific revenue sources that are restricted or committed to expenditure for specified purposes ". This requires the Council to adopt a resolution "committing" specific revenues to each of the special revenue funds prior to the end of the year. The attached resolution gives the anticipated fund balance classifications for each Governmental Fund. This document may change as we go through the audit process and determine other revenues that fall under a specific category. The commitments made by the Council cannot change without Council taking similar action to remove them. The final change of note is related to the City's Fund Balance Policies originally adopted on February 22, 1994 and last amended on April 13, 2010. The Fund Balance Policy needs to be revised to authorize the City Administrator and /or Finance Director to assign fund balance to reflect the City's intended use of funds. This does not change the authority to actually spend resources, but to assign resources for a presentation standpoint only. The Fund Balance Policy also needs to include how the City intends to use its resources when multiple categories of fund balance are available. There have been several minor changes made to reflect the new terminology used in GASB 54 and to reflect how funds are currently being used. Again, the revised policy does not change how the City conducts business or the General Fund reserve Changes to the policies have been highlighted in the attached resolution.