Page 76 - 2018 Comprehensive Annual Financial Report - City of Winston-Salem

Administrative control is exercised through the establishment of detailed line item budgets. Budget amendments to total
expenditures of any fund or between functions, which are the legal level of budgetary control, require approval by the City
Council. Budgets are reported as originally adopted and amended by executive or council action. During the year, amendments
to the original budget were made, when appropriate, the e ects of which were not material. The budget ordinance must be
adopted by July 1 of the scal year or the City Council must adopt an interim budget that covers that time until the annual
ordinance can be adopted. All unencumbered budget appropriations, except project or program budgets, lapse at year-end.

E. Assets, Liabilities, Deferred Outflows/Inflows of Resources,
and Net Position or Fund Balance

1. Deposits and Investments
The City’s cash and investments under the “pooled cash concept” is composed of xed income and equity investments and
demand deposit accounts and is used by all funds as allowed by their investment authority. For arbitrage purposes, the City
maintains separate investments of proceeds of bond issues and other tax-exempt nancings. Each fund’s portion of cash and
investments is included as “Cash and Cash Equivalents/Investments” on the statement of net position.
Investments are governed by state statutes and written policies. Governmental monies may be deposited in FDIC-insured or
collateralized demand accounts and certi cates of deposit. Other investments may be made in obligations of the United States
Treasury and federal agencies, commercial paper rated A-1 by Standard & Poor’s Corporation or P-1 by Moody’s Commercial
Paper Record, bankers’ acceptances, and master repurchase agreements. Equity investments of the pension trust funds, other
employee bene t reserves, and designated capital reserves are permitted by North Carolina State Statutes and governed by
City policies.
The City utilizes Capital Management of the Carolinas which facilitates electronic transfers between the state and units of local
government and provides immediate short-term investment of temporarily idle funds, principally bond proceeds. The North
Carolina Capital Management Trust (NCCMT) – Government Portfolio, a SEC-registered (2a-7) external investment pool, is
measured at amortized cost, which is the NCCMT’s share price. The NCCMT-Term Portfolio’s securities are valued at fair value.
Investments are stated at fair value and securities traded on national exchanges are valued at the last reported sales price.
2. Receivables and Payables
Lending/borrowing arrangements between funds outstanding at the end of the scal year are referred to as either “due to/from
other funds” (for the current portion of interfund loans) or “advances to/from other funds” (for the non-current portion of
interfund loans.)
All receivables are shown net of an allowance for uncollectibles which is estimated by analyzing the historical collection
experience of the fund.

3. Ad Valorem Taxes Receivable
The City property tax is based on the assessed valuation of property located in the City as of the preceding January rst. The
value of personal property is established annually, and by state law, real property must be appraised at least once every eight
years. The last revaluation of real property became e ective with the 2017 tax levy. The City’s scal year 2018 tax rate was .5974
mils, allocated as follows: .4746 mils for general purposes, .0730 mils for general debt service, and .0498 mils for mass transit.
Taxes are due on September rst and payable without penalty or interest until the fth of January. On and after January sixth,
taxes become delinquent, a lien attaches to the property, and a penalty of 2% is assessed. On February rst, interest accrues at
the rate of .75% per month until paid. Property tax receivables are recorded net of allowance for estimated uncollectible
amounts and o set as deferred in ows of resources since the amount due is not considered to be currently available.
4. Restricted Assets
Certain funds of the Winston-Salem/Forsyth County Utility System are restricted by revenue bond covenants and other
intergovernmental agreements. These funds include unexpended bond proceeds, which are restricted to be used solely for the
purpose for which the bonds were originally issued, funds restricted to be used for system maintenance and replacement,
future expansion, and economic development purposes. Capital reserve funds for closure and postclosure costs are reserved in
the solid waste disposal fund. The City also holds a capital reserve account in the public assembly facilities fund to be used for
repair or to make capital improvements to the Bowman Gray Stadium Field House.

70 2018 AN NUAL R E P O R T