Page 61 - 2018 Comprehensive Annual Financial Report - City of Winston-Salem

City of Winston-Salem, North Carolina
Reconciliation of the Statement of Revenues, Expenditures, and Changes
in Fund Balances of Governmental Funds to the Statement of Activities

For the Fiscal Year Ended June 30, 2018 Exhibit 4.1

Amounts reported for governmental activities in the statement of activities (Exhibit 2) are di erent because:
Net change in fund balances – total governmental funds (Exhibit 4) $ 62,678,747

Governmental funds report capital 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. This is the amount by which
capital outlays exceeded depreciation expense in the current period.
Capital outlay expenditures which were capitalized 37,832,906
Depreciation expense for governmental assets (15,200,295)

The net e ect of various miscellaneous transactions involving capital assets (i.e., sales, trade-ins, and donations) is to
decrease net assets. (164,618)
Contributions to the pension plan in the current scal year are not included on the statement of activities 7,517,257

Revenues in the statement of activities that do not provide current nancial resources are not reported as revenue in the funds. (275,278)

Internal service funds are used by management to charge the costs of warehouse, eet services, information services,
workers’ compensation, health bene ts, dental and ex bene ts and employee bene ts. The net revenue (expenses) of
certain activities of internal service funds is reported with governmental activities. 4,084,318
The issuance of long-term debt are reported as nancing sources in governmental funds and thus contribute to the change in
fund balance. In the statement of net position, however, issuing debt increases long-term liabilities and does not a ect the
statement of activities. Similarly, repayment of principal is an expenditure in the governmental funds but reduces the liability in
the statement of net position. Also governmental funds report the e ect of issuance costs, premiums and discounts, and similar
items as expenses when debt is rst issued, whereas these amounts are deferred and amortized in the statement of activities.
Debt issued:
Premium on general obligation bonds (6,810,320)
Issuance of general obligation bonds (63,805,000)
Issuance of limited obligation bonds (2,015,000)
Issuance of refunding limited obligation bonds (13,045,000)
Payment to refunded LOBS escrow agent 12,960,000
Capital leases (31,510,479)
Decrease in contracts payable 7,001,604
Repayments:
Bonds 8,145,000
Certi cates of participation/limited obligation bonds 15,761,265
Installment nancing contract 988,306
HUD Section 108 loan 333,000
Under the modi ed accrual basis of accounting used in the governmental funds, expenditures are not recognized for
transactions that are not normally paid with expendable available nancial resources. In the statement of activities, liabilities
are reported regardless of when nancial resources are available. In addition, interest on long-term debt is not recognized
under the modi ed accrual basis of accounting until due, rather than as it accrues.
Pension expense (11,504,524)
OPEB expense 1,315,926
Accrued vacation 161,465
Amortization of nancing costs 1,280,528
Accrued interest on bonds (178,376)
Accrued interest on limited obligation bonds 64,427
Accrued interest on installment nancing contract 2,710
Change in net position of governmental activities (Exhibit 2) $ 15,618,569

The accompanying notes are an integral part of the nancial statements.

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