CAFR 2016

outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense”. The details of this $5,798,496 difference are as follows:

Capital Outlay

$

19,468,966

Contributed Capital

17,725

Disposal

(1,204,250) (12,483,945)

Depreciation/Amortization Expense

Combined Adjustment

$

5,798,496

Another element of that reconciliation states that “the issuance of long-term debt (e.g., bonds, leases) provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds report the effect of premiums, discounts, and similar items when debt is first issued, whereas these amounts are unearned and amortized in the statement of activities. Also included are OPEB and compensated absences activities.” The details of this $(7,175,974) difference are as follows:

Issuance of Debt

$

(18,444,962) 12,850,663 (255,128) 1,750,106

Principal Expenditure

Bond-Related Amortization

Interest Expenditures/PremiumAmortization

Compensated Absences Expense

(89,411)

OPEB Expense

(2,987,242) (7,175,974)

Combined Adjustment

$

III. Stewardship, Compliance and Accountability A. Budgetary Information

In accordance with the General Statutes of the State of North Carolina, the City prepares and adopts its budgets on the modified accrual basis. The General Statutes also require balanced budgets for all funds for which a budget is required. The City adopts annual budgets for all funds except Capital Projects Funds, Grant Project Funds and Trust Fund. Annual budgets must be adopted no later than July 1, the beginning of the Fiscal Year. The following Special Revenue Funds have legally adopted annual budgets: Streets and Sidewalk Revolving, Cemetery, Hotel/Motel Occupancy Tax, Special Tax Districts, Housing Partnership Revolving, Economic Development Fund, and Emergency Telephone System Fund. Capital and Grant Project budgets are 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

$77,173,159

Less: Inventories

1,003,078

Prepaid Expenditures

197,660

Stabilization by State Statute Police Separation Allowance

28,002,098 6,365,576 6,654,740 10,149,567 24,800,440

Appropriated Fund Balance in 2017 Budget

Capital Projects

Working Capital/Fund Balance Policy

38m