Sarasota County Comprehensive Annual Financial Report 2019

Sarasota County, Florida Notes to Financial Statements September 30, 2019 P. ENDOWMENTS Two donor-restricted and seven designated endowments have been established for the benefit of the County’s library system. Such endowments are reported in the financial statements as a nonmajor governmental fund, or more specifically, a permanent fund type. Florida Statute 738.401 classifies net appreciation on endowments as income, rather than principal, and is hence legally available for spending; however, it is the policy of the County not to appropriate appreciation on investments. One hundred percent of other investment income is appropriated in a special revenue fund and expended for purposes as specified by donors. Q. NET POSITION / FUND BALANCES The government-wide and proprietary fund financial statements utilize a net position presentation. Net position is categorized as net investment in capital assets, restricted net position, or unrestricted net position. Net Investment in Capital Assets – This category groups all capital assets, including infrastructure, into one component of net position. Accumulated depreciation, liabilities, and the outstanding balances of debt attributable to the acquisition, construction or improvement of these assets reduce the balance in this category. Restricted Net Position -– This category presents external restrictions imposed by creditors, grantors, contributors, or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabling legislation. At year-end, governmental activities net position restricted for other purposes was composed of amounts related to contracts, gifts, OPEB assets held in trust and the permanent endowment fund. Business-type activities’ net position restricted for other purposes was composed of amounts related to debt service funds. Unrestricted Net Position – This category represents net position that does not meet the definition of “net investment in capital assets” or “restricted.” In the governmental fund financial statements, financial reserves are classified by components of fund balance. Classifications of fund balance are established by the Sarasota County Board of County Commissioners Financial Reserves Policy, Resolution 2019-172 and the senior management team, and may be classified as committed or assigned. These tentative plans for expenditures can be increased, reduced or eliminated by similar actions. Fund Balances Contingency/Emergency/Disaster Relief Reserves are to be used to ensure the maintenance of services to the public during non-routine and unforeseen disaster situations such as hurricanes and other weather-related events, as well as other environmental or natural disasters that cause disruptions in public services as declared appropriate by the Commissioners. These reserves are reported in the governmental fund financial statements as committed fund balance. Recovery of the Contingency/Emergency/Disaster Relief Reserve after drawdown will be examined on an annual basis to determine the need for increases in fees/taxes or expenditure reductions to ensure the funds are replenished. Budget Stabilization and Economic Uncertainty Reserves are to be used for short term cash flow purposes, unanticipated expenditures of a non-recurring nature, to meet unexpected immediate increases in service delivery costs, or to maintain service levels in the event that an economic downturn should cause a shortfall in revenues. These reserves are reported in the governmental fund financial statements as unassigned fund balance. See Note 1X - Governmental Fund Balances for additional information. 87