2021 Annual Comprehensive Financial Report

adopted for the duration of the project which may encompass several years. Appropriations for funds that adopt annual budgets lapse at the end of the budget year. Capital and Grant Project budget appropriations do not lapse until the completion of the project. The following schedule provides management and citizens with information on the portion of General Fund balance that is available for appropriation:

Total Fund Balance - General Fund

$92,406,730

Less: Inventories

1,404,512

Prepaid Expenditures

86,681

Stabilization by State Statute

39,374,256 6,080,874 15,827,450 29,632,957

Appropriated Fund Balance in 2022 Budget

Capital Projects

Working Capital/Fund Balance Policy

Budgets are adopted at a fund level and are amended as necessary during the Fiscal Year in one of two ways. First, the City Manager, as delegated by City Council, may make line-item transfers within individual fund budgets with subsequent monthly notice to City Council. Such transfers can neither increase nor decrease the overall budget at the fund level. Secondly, the budget may be increased or decreased at the fund level as changing circumstances dictate, subject to City Council approval. The legal level of budgetary control (the level at which expenditures may not legally exceed appropriations) is the fund level. As required by North Carolina General Statutes, appropriations in Governmental Funds are encumbered upon issuance of purchase orders, contracts or other forms of legal commitments. Even though goods and services have not been received, the transactions are accounted for as a reservation of fund balance in the year that the commitment is made. While appropriations lapse at the end of the Fiscal Year, the succeeding year’s budget ordinance specifically provides for the re-appropriation of year-end encumbrances. The outstanding encumbrances are amounts needed to pay any commitments related to purchase orders and contracts that remain unperformed at year-end are as follows:

Encumbrances

General Fund Debt Service Fund Non-Major Funds

$

62,519,850

$

5,409,307

$

3,050

$

57,107,493

Supplemental budgetary amendments increased the General Fund appropriation by $1,024,981 for programs being funded by reimbursement agreements, inspection fees and appropriated fund balance. No expenditures exceeded appropriations at the legal level of control during Fiscal Year 2021. B. Deficit Fund Equity The following funds report deficit fund balances as of June 30, 2021:

State, Federal and Other Grants Fund Street and Sidewalk Capital Project Fund

$

(5,800,236) (2,849,378) (7,861,033)

Performing Arts Fund

The project fund deficits are from current expenses that were incurred at the end of the fiscal year but reimbursement had not yet been received from the federal and state granting agencies. These project fund deficits will be eliminated with the future reimbursements of federal and state grants. The opening of the new performance venue has been delayed due to state-imposed coronavirus restrictions. Revenues generated from the facility, opening in the fall of 2021, and federal grant funding will be used to eliminate the deficit.

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