Page 75 - 2018 Comprehensive Annual Financial Report - City of Winston-Salem

The City reports the following major proprietary funds:
The Water and Sewer Utility Fund accounts for water and sewer services in the City and certain areas of the county. The system is under
the administrative direction of the Winston-Salem/Forsyth County Utility Commission.
The Solid Waste Disposal Fund accounts for recycling and disposal services of solid waste in Winston-Salem and Forsyth County. The
system is under the administrative direction of the Winston-Salem/Forsyth County Utility Commission.
The Transit Authority Fund accounts for the provisions of public transportation within the City and the County. The City contracts for
management and operation of the system with a privately owned management company. Charges and fares are structured to encourage
the community to use public transportation.
Additionally the City reports the following fund types:

Internal Service Funds account for central warehouse, eet services, information services, workers’ compensation, health bene ts, dental
and exible bene ts, employee bene ts, and Risk Acceptance Management Corporation that is a component unit blended in the City
fund nancial statements.
Fiduciary Funds account for post-employment bene ts, and pension trust funds, including Winston-Salem Police O cers’ Retirement
System and Winston-Salem Police O cers’ Separation Allowance.

C. Measurement Focus and Basis of Accounting

Government-wide, Proprietary Fund, and Fiduciary Fund Financial Statements are reported using the ow of economic resources
measurement focus and accrual basis of accounting. Revenues are recognized in the period earned, and expenses are recognized in the
period incurred, regardless of the timing of related cash ows. Property taxes are recognized as revenues in the year for which they are
levied. Revenue from grants and similar items is recognized when all eligibility requirements have been met. With this measurement
focus, all assets and all liabilities associated with the operation of these funds are included on the statement of net position.

Governmental Fund Financial Statements are reported using a current nancial resources measurement focus and the modi ed
accrual basis of accounting. Revenues are recognized in the period received and are accrued if considered to be both measurable and
available to pay current liabilities. Expenditures are generally recorded when a liability is incurred, as under accrual accounting. However,
debt service expenditures, as well as expenditures for compensated absences and claims and judgments, are recorded only when
payment is due. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet.
Proceeds of general long-term debt and proceeds from capital leases are reported as other nancial sources. General capital asset
acquisitions are reported as expenditures.
The City considers all revenues available if they are collected within 90 days after year-end, except for property taxes. Ad valorem taxes
received are not accrued as revenue because the amount is not susceptible to accrual. At June 30, taxes receivable for property other than
motor vehicles are materially past due and are not considered to be an available resource to nance the operations of the current year.
Also, as of September 1, 2013, State law altered the procedures for the assessment and collection of property taxes on registered motor
vehicles in North Carolina. E ective with this change in the law, the State of North Carolina is responsible for billing and collecting the
property taxes on registered motor vehicles on behalf of all municipalities and special tax districts. Property taxes are due when vehicles
are registered. The billed taxes are applicable to the scal year in which they are received. Uncollected taxes that were billed in periods
prior to September 1, 2013 and for limited registration plates are shown as a receivable in these nancial statements and are o set by
deferred in ows of resources.
Sales taxes and certain intergovernmental revenues, such as the utilities franchise tax, collected and held by the State at year-end on
behalf of the City are recognized as revenue. Intergovernmental revenues and sales and services are not susceptible to accrual because
generally they are not measurable until received in cash. Grant revenues which are unearned at year-end are recorded as unearned
revenues. Under the terms of grant agreements, the City funds certain programs by a combination of speci c cost-reimbursement grants,
categorical block grants, and general revenues. Thus, when program expenses are incurred, there are both restricted and unrestricted net
position available to nance the program. It is the City’s policy to rst apply cost-reimbursement grant resources to such programs,
followed by categorical block grants, and then by general revenues.
D. Budgetary Accounting

Budgetary accounting is used for management control of all funds of the City. Annual budget ordinances are adopted on the modi ed
accrual basis at the fund level and amended as required for the operations of the general, debt service, certain special revenue, and
proprietary funds.
Project or program budgets spanning more than one scal year are adopted, and amended as required, for certain special revenue,
capital projects, and proprietary capital improvements. Special revenue fund budgets adopted under project ordinances, including
community development, grants, economic and housing development, and emergency telephone system fund, as well as the capital projects
fund budgets, are reported by program authorizations. The City’s internal service funds operate under a nancial plan that was adopted by the
governing board at the time the City’s budget ordinance was approved.

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