2024 Annual Comprehensive Report

Intangible Assets of $95,730,270 as of June 30, 2024 are recorded in the Water Resources Enterprise Fund and represent rights to future raw water allocations from the Randleman Dam and reservoir project, in accordance with a joint venture agreement established in September 1987 with five other governmental entities to form a regional water supply. The intangible asset is based on City contributions to the Piedmont Triad Regional Water Authority for construction of the dam, reservoir, water treatment plant and surrounding infrastructure improvements as well as $983,868 of contributions recorded in Fiscal Year 2024, toward the City’s administrative and operating allocation. In Fiscal Year 2011, the City began amortizing the water rights over a period of 50 years with current year related amortization expense totaling $1,914,605. Accumulated amortization totals $25,114,412. 7. Deferred Outflows/Inflows of Resources and Unearned Revenues In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate statement of net position, Deferred Outflows of Resources , represents a consumption of net assets that applies to a future period and so will not be recognized as an expense or expenditure until then. The City has several items that meet this criterion, a deferred loss on bond defeasance for General Obligation and Water and Sewer Refunding bonds and pension and OPEB deferrals. In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, Deferred Inflows of Resources, represents an acquisition of net assets that applies to a future period and so will not be recognized as revenue until then. The City has certain items that meet the criterion for this category – deferrals of pension expense, leases and deferrals of Other Post Employment Benefit expense. In addition, revenue related to property tax, notes, and other accounts receivable that does not meet the availability criterion are reported in deferred inflows of resources in the governmental fund financial statements. The City reports unearned revenue on its government-wide and fund financial statements. Deferred Inflows for Grants arise when potential revenue does not meet both the “measureable” and “available” criteria for recognition in the current period (fund financial statements). Unearned revenues arise when resources are unearned by the City and received before it has a legal claim to them. In subsequent periods, when both revenue recognition criteria are met, or when the City has a legal claim to the resources, the liability for unearned revenue is removed from the applicable financial statement and revenue is recognized. 8. Long-Term Liabilities Long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business type activities, or proprietary fund-type statement of net position in the government-wide financial statements, and proprietary fund-types in the fund financial statements. Bond premiums and discounts amortized over the life of the bonds using the effective interest rate method. Gains or losses on refundings are deferred and recognized as resource flows over the life of the bonds. Bond issuance costs are expensed in the reporting period in which they are incurred. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance cost during the current period. The face amount of debt issued is reported as an “Other Financing Source”. Premiums received on debt issuances are reported as “Other Financing Sources” while discounts on debt issuances are reporting as “Other Financing Uses”. Issuance cost, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures as “Fees and Other”. 9. Fund Balance In the governmental fund financial statements, the fund balances are composed of five classifications designed to disclose the spending hierarchy of constraints placed on how fund balance can be spent. The City reports nonspendable funds, restricted, committed, assigned and unassigned fund balances. Fund balances are further segregated into the following classifications: Nonspendable Fund Balance - This classification includes amounts that cannot be spent because they are either not in spendable form or legally or contractually required to be maintained intact. Amounts that cannot be spent due to form, include inventories, prepaid amounts, long-term amounts of loans and notes receivable funds permanently held for cemetery care and property held for resale, unless future property sale proceeds are restricted, committed or assigned.

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