North Carolina - New Bern, NC of New Bern 2018...North Carolina COMPREHENSIVE ANNUAL FINANCIAL...

City of New Bern North Carolina

COMPREHENSIVE ANNUAL FINANCIAL REPORT

FOR THE YEAR ENDED JUNE 30, 2018

Prepared by: City of New Bern Finance Department

Submitted by: Joseph R. Sabatelli, CPA

Director of Finance

CITY OF NEW BERN, NORTH CAROLINA

COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2018

TABLE OF CONTENTS

Page Number

INTRODUCTORY SECTION

Letter of Transmittal .................................................................................................................................... i‐viii

GFOA Certificate of Achievement ..................................................................................................................... ix

List of Principal Officials ..................................................................................................................................... x

Organizational Chart......................................................................................................................................... xi

FINANCIAL SECTION

Independent Auditor’s Report ........................................................................................................................ 1‐3

Management’s Discussion & Analysis ........................................................................................................... 4‐14

Basic Financial Statements:

Government‐wide Financial Statements

Statement of Net Position ...................................................................................................................... 15

Statement of Activities ........................................................................................................................... 16

Fund Financial Statements

Balance Sheet – Governmental Funds .................................................................................................... 17

Reconciliation of the Balance Sheet of Governmental Funds to the

Statement of Net Position .................................................................................................................. 18

Statement of Revenues, Expenditures, and Changes in Fund

Balances – Governmental Funds ........................................................................................................ 19

Reconciliation of the Statement of Revenues, Expenditures, and Changes in

Fund Balances of Governmental Funds to the Statement of Activities................................................. 20

General Fund – Statement of Revenues, Expenditures, and Changes in

Fund Balances – Budget and Actual .................................................................................................... 21

Statement of Net Position – Proprietary Funds ........................................................................... 22 and 23

Statement of Revenues, Expenses, and Changes in Net

Position – Proprietary Funds .................................................................................................. 24 and 25

Statement of Cash Flows – Proprietary Funds .................................................................................... 26‐29

Notes to Financial Statements ............................................................................................................... 30‐74

Required Supplementary Information:

City of New Bern’s Schedule of Changes in Total OPEB Liability and Related Ratios ..................................... 75

City of New Bern’s Schedule of Changes in Total Pension Liability – LEOSSA ................................................ 76

City of New Bern’s Schedule of Total Pension Liability as a Percentage of Covered

Payroll – LEOSSA .................................................................................................................................... 77

Schedule of City of New Bern’s Proportionate Share of Net Pension Liability (Asset) – LGERS ...................... 78

Schedule of City of New Bern’s Contributions – LGERS ................................................................................ 79

Notes to Required Supplementary Information .......................................................................................... 80



TABLE OF CONTENTS

Page Number

FINANCIAL SECTION (CONTINUED):

Combining and Individual Fund Statements and Schedules:

Combining Balance Sheet – Nonmajor Governmental Funds .................................................................. 81‐84

Combining Statement of Revenues, Expenditures, and Changes in Fund

Balances – Nonmajor Governmental Funds ....................................................................................... 85‐88

General Fund – Schedule of Revenues, Expenditures, and Changes in Fund

Balances – Budget and Actual (Budgetary Basis) ................................................................................ 89‐92

Community Development Fund – Schedule of Revenues, Expenditures, and Changes in

Fund Balances – Budget and Actual (NON‐GAAP) ................................................................................... 93

Emergency Telephone System Fund – Schedule of Revenues, Expenditures,

and Changes in Fund Balances – Budget and Actual (NON‐GAAP) ........................................................... 94

Police Special Revenue Fund – Schedule of Revenues, Expenditures,


Grants Special Revenue Fund – Schedule of Revenues, Expenditures,


Glenburnie Road Multi‐Use Path Project Fund – Schedule of Revenues, Expenditures,


Public‐Private Partnership Fund – Schedule of Revenues, Expenditures,


FEMA Hurricane Irene Fund – Schedule of Revenues, Expenditures,


2012 CDBG NC Catalyst Fund – Schedule of Revenues, Expenditures,

and Changes in Fund Balances – Budget and Actual (NON‐GAAP) ......................................................... 100

Metropolitan Planning Organization (MPO) Plan Fund – Schedule of Revenues, Expenditures,


Entitlement Cities CDBG Program Fund – Schedule of Revenues, Expenditures,


Neuse Boulevard Sidewalk Fund – Schedule of Revenues, Expenditures,


Equitable Sharing Fund – Schedule of Revenues, Expenditures,


Neuse River Gateway Fund – Schedule of Revenues, Expenditures,


City Market Workforce Development Fund – Schedule of Revenues, Expenditures,


Union Station Train Depot Fund – Schedule of Revenues, Expenditures,




TABLE OF CONTENTS

Page Number


Combining and Individual Fund Statements and Schedules (Continued):

MSD Improvement – Schedule of Revenues, Expenditures,


General Capital Projects Fund – Schedule of Revenues, Expenditures,


IT Network Merger Fund – Schedule of Revenues, Expenditures,


Drainage Improvement Project Fund – Schedule of Revenues, Expenditures,


2017 Road Improvement Projects Fund – Schedule of Revenues, Expenditures,


Martin Marietta Park Project Fund – Schedule of Revenues, Expenditures,


ERP Project Fund – Schedule of Revenues, Expenditures,


Garage Relocation Project Fund – Schedule of Revenues, Expenditures,


Alexander Thalman Field Fund – Schedule of Revenues, Expenditures,


Electric Fund – Schedule of Revenues, Expenditures,

and Changes in Net Position – Budget and Actual (NON‐GAAP)............................................................. 117

Electric Rate Stabilization Fund – Schedule of Revenues, Expenditures,


Water Fund – Schedule of Revenues, Expenditures,


Water Capital Reserve Fund – Schedule of Revenues, Expenditures,


West New Bern Water System Improvement Capital Project Fund– Schedule

of Revenues, Expenditures, and Changes in Net Position – Budget and Actual (NON‐GAAP) .................. 121

2017 Water System Improvement Project Fund– Schedule


Water Resource Relocation Project Fund– Schedule


Sewer Fund – Schedule of Revenues, Expenditures,




TABLE OF CONTENTS

Page Number


Combining and Individual Fund Statements and Schedules (Continued):

Sewer Capital Reserve Fund – Schedule of Revenues, Expenditures,


Township 7 Sewer Improvements Capital Project Fund – Schedule of Revenues, Expenditures,


2017 Sewer Improvement Project Fund – Schedule of Revenues, Expenditures,


Sewer Debt Service Reserve Fund – Schedule of Revenues, Expenditures,


Stormwater Fund – Schedule of Revenues, Expenditures,


AMI/DSM System Enterprise Capital Project Fund – Schedule of Revenues, Expenditures,


Kale Road Project Enterprise Capital Project Fund – Schedule of Revenues, Expenditures,


Schedule of Ad Valorem Taxes Receivable ................................................................................................ 132

Analysis of Current Tax Levy ..................................................................................................................... 133

STATISTICAL SECTION:

Net Position by Component – Last Ten Fiscal Years ........................................................................... 134 and 135

Changes in Net Position – Last Ten Fiscal Years ....................................................................................... 136‐141

Program Revenues by Function/Program – Last Ten Fiscal Years ....................................................... 142 and 143

Fund Balances – Governmental Funds – Last Ten Fiscal Years ............................................................ 144 and 145

Changes in Fund Balances – Governmental Funds ‐ Last Ten Fiscal Years ........................................... 146 and 147

The Electric System – Electricity Purchased, Consumed and Unbilled ‐ Last Ten Fiscal Years ............... 148 and 149

Electric Rates – Last Ten Fiscal Years ................................................................................................. 150 and 151

Electric System – Major Users – Current Year and Nine Years Ago .................................................................. 152

Water System – Major Users – Current Year and Nine Years Ago .................................................................... 153

Sewer System – Major Users – Current Year and Nine Years Ago .................................................................... 154

Assessed Value and Estimated Actual Value of Taxable Property – Last Ten Fiscal Years ................................. 155

Property Tax Levies and Collections – Last Ten Fiscal Years ............................................................................ 156

Principal Taxpayers – Current Year and Nine Years Ago .................................................................................. 157

Direct and Overlapping Property Tax Rates – Last Ten Fiscal Years ................................................................. 158

Ratios of Outstanding Debt by Type – Last Ten Fiscal Years ............................................................................ 159

Direct and Overlapping Governmental Activities Debt ................................................................................... 160



TABLE OF CONTENTS

Page Number

STATISTICAL SECTION (CONTINUED):

Legal Debt Margin Information – Last Ten Fiscal Years ...................................................................... 161 and 162

Demographic and Economic Statistics ‐ Last Ten Fiscal Years .......................................................................... 163

Principal Employers – Current Year and Nine Years Ago ................................................................................. 164

Full‐Time Equivalent City Government Employees by Function/Program – Last Ten Fiscal Years ..................... 165

Operating Indicators by Function/Program – Last Ten Fiscal Years ................................................... 166 and 167

Capital Asset Statistics by Function/Program – Last Ten Fiscal Years ................................................. 168 and 169

COMPLIANCE SECTION:

Independent Auditor’s Report on Internal Control Over Financial Reporting

and on Compliance and Other Matters Based on an Audit of Financial

Statements Performed in Accordance with Government Auditing Standards .............................. 170 and 171

Independent Auditor’s Report on Compliance for the Major State Program and Report on

Internal Control over Compliance in Accordance with Applicable Sections of

the Uniform Guidance and the State Single Audit Implementation Act ....................................... 172 and 173

Schedule of Expenditures of Federal and State Awards .................................................................................. 174

Schedule of Findings and Questioned Costs ...................................................................................... 175 and 176

Schedule of Prior Audit Findings .................................................................................................................... 177

INTRODUCTORY SECTION

Everything comes together here.

Aldermen Dana E. Outlaw

Sabrina Bengel Mayor Jameesha S. Harris

Robert V. Aster

Johnnie Ray Kinsey Mark A. Stephens Barbara J. Best 300 Pollock Street, P.O. Box 1129 City Manager

Jeffrey T. Odham New Bern, NC 28563-1129 (252) 636-4000

December 28, 2018 To the Honorable Mayor, Board of Aldermen, and Citizens of the CITY OF NEW BERN: The Comprehensive Annual Financial Report of the CITY OF NEW BERN, North Carolina (the City) for the fiscal year ended June 30, 2018, is hereby submitted. The basic financial statements contained herein have been audited by the independent certified public accounting firm of Mauldin & Jenkins, PLLC, a firm of licensed certified public accountants, and their unmodified opinion is included in the financial section. Management assumes full responsibility for the completeness and reliability of the information contained in this report, based on a comprehensive framework of internal controls that it has established for this purpose. Because the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements. To the best of our knowledge and belief, the data enclosed is accurate in all material respects and is reported in a manner designed to present fairly the financial position and changes in financial position and, where applicable, the cash flows of the various funds of the City. All disclosures necessary to enable the reader to gain an understanding of the City’s financial activities have been included. This report includes all the funds of the City. The City provides a full range of services including police and fire protection; sanitation services; construction and maintenance of streets and other infrastructure; community development services including planning and zoning; and parks and recreational services. In addition to general governmental activities, the City owns and operates electric, water, sewer and stormwater utilities; therefore, these activities are included in the reporting entity. The New Bern Housing Authority, the New Bern-Craven County Public Library, Swiss Bear Downtown Development Corporation, and Friends of the Fireman’s Museum do not meet the established criteria for inclusion in the reporting entity, and accordingly are excluded from this report. Generally Accepted Accounting Principles (GAAP) requires that management provide a narrative introduction, overview and analysis to accompany the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The City of New Bern’s MD&A can be found immediately following the independent auditor’s report.


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The City is required to undergo a “Single Audit” in conformity with Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, and the State Single Audit Implementation Act.

Information related to this single audit, including the schedule of expenditures of federal and state awards, findings and recommendations, and the auditor’s reports on the internal control over financial reporting and compliance with applicable laws, regulations, and contract and grant agreements, is included in the compliance section of the report. ECONOMIC CONDITION AND OUTLOOK New Bern, settled in 1710 at the confluence of the Trent and Neuse Rivers, is located 110 miles east of Raleigh, the State Capitol, and 35 miles west of the Atlantic Ocean. New Bern is the largest municipality in Craven County and serves as the County seat. Rich in history, it is the site of North Carolina’s Colonial Capital and its first State Capitol. New Bern is also the Birthplace of Pepsi Cola, a drink first created by Caleb Bradham, a local pharmacist, in 1898. Downtown New Bern offers museums, shops, galleries, restaurants, historic sites, waterfront hotels, bed and breakfast accommodations, marinas, a convention center, parks, historic homes and churches. Tryon Palace Historic Sites & Gardens, the first permanent seat of colonial government in North Carolina, offers visitors an opportunity to experience over 300 years of American history and acres of period-inspired gardens. The City is centrally located to several growing communities including the cities of Jacksonville, Morehead City, Greenville, and Kinston, all around 40 miles and less than an hour’s drive away. The City is easily accessible by US 70, US 17, and NC 43. As of June 2017, the community had an unemployment rate of 4.3 percent compared to a statewide rate of 4.2 percent. The 2017 census population for the city was reported as 29,590. The City is a council-manager form of government with a Board of Aldermen and Mayor. The Board is composed of six members who are elected by ward, and a mayor who is elected at-large. Each serves for four-year coincident terms. The City Manager, Director of Finance, and City Attorney, are appointed by and serve at the pleasure of the Mayor and Board of Aldermen. The City Manager serves as the chief executive officer of the organization and is responsible for carrying out Board of Aldermen policy through the administration of the various departments and their staff. The City thrives on tourism, as it has over 150 sites included in the National Register of Historic Places. Stretching 248 miles, the Neuse River, located in New Bern, is the longest river in North Carolina and the widest river in America (6 miles across). The City is centrally located to 157,000 acres of the Croatan National Forest, which is nationally recognized for its trails and recreation opportunities. Government (federal, state and local) is the largest single employer in the County. CarolinaEast Health System, now a 5-star rated establishment, is the City’s largest single employer and in January 2017 they held a groundbreaking ceremony for the new three-story SECU Comprehensive Cancer Center. Along with this 80,000-square feet, $35 million project, Carolina East is also constructing a new $15 million diagnostic center.


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New Bern is home to two large manufacturing facilities: Moen, Inc. and BSH Appliances, Corp. Moen, the number one faucet brand in North America, constructed a new component warehouse in the summer of 2016 that brought 75 new jobs to the area. BSH Appliances, a German-based manufacturer, is the world’s third largest home appliance manufacturer specializing in cooking, washing/drying, refrigeration/freezing, and other consumer products. New Bern is host to the largest of the three U.S-based factories. BSH Home Appliances did a 359,000 square-feet, $16 million expansion to its New Bern location almost doubling the number of loading dock from 25 to 59. This facility stores and ships home appliances for three BSH brands in North America and employees more than 1,100 people. New Bern Market place, a new 34-acre, 325,000, square-foot shopping center helped the local economy in FY 2018. Large retailers such as West Marine, Hobby Lobby, Academy Sports, and grocery store giant, Harris Teeter, have made this new shopping center home creating many jobs for the community. Other local businesses have also invested in renovations and extensions including restaurants, grocery stores, and a local cinema. MAJOR INITIATIVES FOR THE YEAR Fiscal year 2017-2018 (FY18) included the planning and implementation phases of several initiatives as well as the continuation or completion of projects begun during previous fiscal years. Little Free Library (LFL)

Little Free Library is a global nonprofit organization. The idea behind the program is simple: communities, churches, businesses or other organizations build a sturdy library box in a convenient location, identify a steward or sponsor of the box, and oversee its maintenance. Then, the public is invited to “take a book, leave a book” without worrying about having access to a library or paying for overdue book returns. New Bern Parks & Recreation partnered with Friends of the New Bern Craven County Library and celebrated several new additions to its LFL program this year. Bicycle & Pedestrian Access

Utilizing two grants provided by the NC Department of Transportation (NCDOT) and the Federal Highway Administration (FHWA), the City has completed a multi-use path along the Glenburnie Road corridor and installed new sidewalks along Neuse Boulevard. The Glenburnie Road corridor project provides a 10’ wide multi-use path on the east and west sides of the road, stretching from Elizabeth Avenue to Neuse Boulevard. Construction included the installation of crosswalk signaling at Elizabeth Avenue and Glenburnie Road. Along Neuse Boulevard, phase two of a sidewalk improvement project makes it easier to get to the hospital, medical offices, and restaurants and businesses. Sidewalks were installed on the north side of this busy corridor from Hospital Drive to Glenburnie Road.


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Martin Marietta Park

In September 2017, Martin Marietta Materials, Inc. donated approximately 55 acres of property to the City. In the spring of 2018, the City invited the public to comment on proposed amenities residents would like to see inside the park. Those surveys and comments were collected and analyzed by independent consultant McGill & Associates, who assisted the City in creating a master plan for the park. In April, the Board of Aldermen approved moving forward with the master plan which includes walking, running and cycling paths and trails, an outdoor performance area, open space for recreation and environmental stewardship, water activities and adventure activities. The City received a grant from the NC Parks & Recreation Trust Fund in the amount of $475,000 to begin Phase I which includes installing a children’s playground, boat launch, fishing pier, picnic shelter, park benches, multi-purpose trails, nature trail, and nature observation deck.

Mountains-to-Sea Trail

In December 2017, 2.2 miles of the City’s Riverwalk was chosen to be added to North Carolina’s Mountains-to-Sea Trail. The Mountains-to-Sea Trail stretches 1,175 miles from the Great Smokey Mountains to the Outer Banks encompassing mountains, swamps, farms, small towns and barrier islands. The City’s Parks and Recreation Department applied for and received a $56,000 Recreational Trails Program grant to extend the Riverwalk and add official Mountains-to-Sea Trail signs. Volt Center

The city-owned facilities at 205 First Street are being renovated and will be used as a multi-purpose facility. Groundbreaking took place in August 2017. The facility will focus on fostering and incubating new businesses, especially in agriculture, food sales, crafts, art, and small-scale manufacturing. Furthermore, Craven Community College will be utilizing the main building for training and various classes. Total outdoor vendor space is 12,200 square feet. across 25-30 covered bays and total indoor space of between 5,000-8,000 square feet, additional 6,000-7,000 square feet of flexible storage and workshop space, and approximately 10,000 square feet of flexible open space is available for large gatherings or a concert stage and possible restaurant incubator. Funding for this project includes grants and contributions from: U.S. Department of Commerce Economic Development Administration, Golden Leaf Foundation, NC Department of Transportation, City of New Bern, Craven 100 Alliance, and the Bate Foundation.


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ERP

The City has evaluated and determined that an upgrade of its Enterprise Resource Planning (ERP) software is critical to creating efficiencies, improving customer service and enhancing financial reporting. The City has contracted with Tyler Technologies to license its Munis platform. The new platform will aid various departments of the City improving overall functionality and decreasing lag time. The platform improves and integrates the financial, human resource, permitting, utility billing and collections, and various other areas of the City. Water Resources Operations Facility This project involves the construction of a new facility adjacent to the City’s existing water treatment plant to house the Water Resources operations and administration staff. In May of 2017, the Board of Aldermen established a fund for this project in the amount of $1,440,000. Construction for the project began in the second half of FY18 and is scheduled to be complete by the in the first half of FY19. Spencer Ave. & Park Ave. Water & Sewer System Improvements Project This project involves replacing aging portions of the City’s water distribution and sewer collections systems along Spencer Avenue and Park Avenue. The existing 2” galvanized water mains and 6” terra-cotta sewer main will be replaced to meet current NCDEQ material and sizing standards. In addition, water and sewer service connections will be replaced along these alignments. To date 75% of this project has been completed and the remaining portions of the project are scheduled to be in the first half of FY19. MAJOR INITIATIVES FOR THE FUTURE Fiscal year 2018-2019 (FY19) includes the planning and implementation phases of several initiatives as well as the continuation or completion of projects begun during previous fiscal years. West New Bern Water System Improvements Project This project will involve installing new water mains, constructing a new elevated storage tank and increasing the capacity of the water system distribution pumps to improve the domestic and fire flow supply to the western portions of New Bern. These changes to the water distribution system will improve system pressures and firefighting capabilities. The project is in the permitting and easement acquisition phases. The project should be ready to move into the construction phase in the second half of FY19. The estimated construction cost is $3 million.


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Township No. 7 Sewer System Improvements Project – Phase III This project will involve modifications to the sanitary sewer in the Township No. 7 area to include, an upgrade to the existing pumps and control components at the equalization basin along with the construction of a new transmission force main across the Trent River. The need for these improvements had been identified since 2006 as the ultimate solution to fixing the over-allocation issues and providing the capacity for New Bern to continue to grow in the areas south of the Trent River. The project is in the permitting and easement acquisition phases and should be ready to move into the construction phase in the second half of FY19. The estimated construction cost is $3 million.

Cost of Service Study (Electric)

This study identifies revenue requirements to fund the Electric utility’s operations to include expense liabilities, depreciation and margins. Retail rates will be reviewed and designed to recoup all costs, maintain appropriate reserves, and recover capital costs of the current and expansion of the system.

Trent Road Substation Transformer Bank A Replacement

As identified in our 5-year Capital Project Plan, the 50 MVA transformer bank at the Trent Road Substation will require replacement. This transformer bank was built in 1960, and through recent testing, there have been indications that the units are reaching the end of their useful life. During periods of peak demand, the electric system requires the capacity provided by this transformer bank and cannot provide service to its customers if the unit were to fail. A new substation transformer installation to replace this unit is estimated to cost $1,000,000.

County Line Road Substation (Engineering and Design)

Engineering and design of a new substation at a strategic location to be determined; between James City and Havelock. This project will provide capacity for the electric system and free up capacity at the Glenburnie Substation. Capacity at the Glenburnie substation is needed to support I-43 corridor growth. The project will also improve electric system reliability and redundancy, while expansion will provide the necessary level of capacity for the growth of the highway 70 corridor and provide backup to the existing 25 MVA transformer and circuits. The estimated cost of the engineering and design phase is $150,000.

Central Garage Relocation

This project involves the relocation of the Central Garage to the Neuse Blvd Water Resources Facility that will be vacated upon the completion of a new facility next to the water treatment plant. A project fund was established by the Board of Aldermen in April 2018 in the amount of $850,000 to renovate the existing facility and add a fueling site.


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OTHER INFORMATION Budget preparation process Preparation of the City’s fiscal year budget is a process that involves the citizens of New Bern, the New Bern Board of Aldermen, individual city departments, and the City Manager’s Budget Committee. The City Manager holds a budget retreat in February. During this meeting, the Board is presented with a preview of the economic forecast for the coming fiscal year, and the Board’s goals and objectives for the upcoming fiscal year are confirmed. This meeting is critical to the development of the proposed budget as it offers a forum for the Board to relay valuable insight and provide feedback to the management team. The next major phase in the preparation of the budget occurs after the retreat with the distribution of the new budget preparation package and instructions to department heads to be used in submitting their requested budgets. Budget meetings are scheduled in March for Department Heads to present budget requests to the Budget Committee for consideration. The City Manager is given a briefing on any new programs, new position requests, as well as major increases in budget requests. In April, the City Manager makes any final revisions to the proposed budget, along with the proposed utility and tax rate for the new fiscal year. In late April, the City Manager’s recommended budget is presented to the Board, the press, and the public. The recommended budget is made available for public inspection in the office of the City Clerk, the public library, and on the City’s website (which can be viewed by visiting http://www.newbernnc.gov/departments/administration/finance). In May, the Board holds a series of budget workshops, at which time the Department Heads present their proposed budgets to the Board for intense study and discussion. The Board requests additional information and may direct changes to the recommended budget at this time as well. North Carolina General Statutes require one public hearing be held for public comment on the proposed budget. In a concentrated attempt to provide an opportunity to the citizens of New Bern, a public hearing is scheduled by the Board for public input on the budget. This hearing is usually conducted in late May or early June. The Board formally adopts the budget at a regular Board of Aldermen meeting on or before June 30th. Acknowledgements This report is the work of the efficient and dedicated services of the City of New Bern Finance Department. Each member of the department has our sincere appreciation for the contributions made in the preparation of this report and in their continued professional excellence in accounting for the fiscal actions of the City.


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Awards The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of New Bern for the fiscal year ended June 30, 2017, which was the sixth year the City prepared a comprehensive annual financial report (CAFR). The Certificate of Achievement is a prestigious national award, recognizing conformance with the highest standards for preparation of state and local government financial reports. In order to be awarded a Certificate of Achievement, a Government Unit must publish an easily readable and efficiently organized CAFR whose contents conform to program standards. Such CAFR must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe our current report continues to conform to the Certificate of Achievement program requirements, and the City will be submitting it to the GFOA to determine its eligibility for another certificate. Independent Audit The City is required by the North Carolina General Statues to have an annual independent audit of its financial statements. In addition, Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, and the State Single Audit Implementation Act require annual independent audits of the City’s compliance with the applicable law and regulations related to certain statements. Combined and individual fund statements and schedules are included in the financial section of this report. The independent auditor’s reports on compliance matters are included in the financial section of this report. In closing, we would like to express our appreciation to the Mayor, Board of Aldermen, Department Heads, and all City staff for their leadership, interest, and support in planning and conducting the financial operations of the City in a responsible and progressive manner. Respectfully submitted,

Robert Aster Barbara J. Best

Jameesha Harris Johnnie Ray Kinsey

Joseph R. Sabatelli Brenda E. Blanco Matthew Montanye

Director of Finance City Clerk Interim Director of Parks & Recreation

Charles Bauschard Jeffrey Ruggieri

Director of Utilities Director of Development Services

Robert M. Boyd Sonya Hayes

Fire Chief Director of Human Resources

Matthew Montanye Toussaint Summers

Director of Public Works Chief of Police


LIST OF PRINCIPAL OFFICIALS

June 30, 2018

BOARD OF ALDERMEN

Dana E. Outlaw

Mayor

Sabrina Bengel

Mayor Pro Tem

Jeffrey T. Odham

Kristen Culler

Assistant City Manager

Mark A. Stephens

City Manager

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FINANCIAL SECTION

INDEPENDENT AUDITOR’S REPORT

Honorable Mayor and Members of the Board of Aldermen City of New Bern, North Carolina

Report on the Financial Statements

We have audited the accompanying financial statements of the governmental activities, the business‐type activities, each

major fund, and the aggregate remaining fund information of the City of New Bern, North Carolina (the “City”), as of and for

the year ended June 30, 2018, and the related notes to the financial statements, which collectively comprise the City’s basic

financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with

accounting principles generally accepted in the United States of America; this includes the design, implementation, and

maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from

material misstatement, whether due to fraud or error. Auditor’s Responsibility

Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in

accordance with auditing standards generally accepted in the United States of America and the standards applicable to

financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those

standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements

are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial

statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material

misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor

considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to

design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the

effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the

appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by

management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

200 GALLERIA PARKWAY S.E., SUITE 1700 • ATLANTA, GA 30339-5946 • 770-955-8600 • 800-277-0080 • FAX 770-980-4489 • www.mjcpa.com Members of The American Institute of Certified Public Accountants

2

Opinions

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial

position of the governmental activities, the business‐type activities, each major fund, and the aggregate remaining fund

information of the City of New Bern, North Carolina as of June 30, 2018, and the respective changes in financial position and,

where applicable, cash flows thereof and the budgetary comparison for the General Fund for the year then ended in

accordance with accounting principles generally accepted in the United States of America.

Emphasis of Matter

As discussed in Notes 10 and 14, the City implemented Governmental Accounting Standards Board (GASB) Statement No. 75,

Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions, as of July 1, 2017. This standard

significantly changed the accounting for the City’s total other postemployment benefits (OPEB) liability and related

disclosures. Our opinions are not modified with respect to this matter. Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the Management’s Discussion and

Analysis, the Schedule of Changes in the City’s Total OPEB Liability and Related Ratios – OPEB Plan, the Schedule of Changes in

Total Pension Liability – LEOSSA, the Schedule of Total Pension Liability as a Percentage of Covered Payroll ‐ LEOSSA, the City

of New Bern’s Proportionate Share of Net Pension Liability (Asset) ‐ LGERS, and the Schedule of the City of New Bern’s

Contributions ‐ LGERS on pages 4‐14, 75, 76, 77, 78, and 79, respectively, be presented to supplement the basic financial

statements. Such information, although not a part of the basic financial statements, is required by the Governmental

Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial

statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the

required supplementary information in accordance with auditing standards generally accepted in the United States of

America, which consisted of inquiries of management about the methods of preparing the information and comparing the

information for consistency with management's responses to our inquiries, the basic financial statements, and other

knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any

assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion

or provide any assurance.

3

Other Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s

basic financial statements. The introductory section, the combining and individual fund statements and schedules, the

statistical section, and the schedule of expenditures of federal and state awards are presented for purposes of additional

analysis and are not a required part of the basic financial statements.

The combining and individual fund statements and schedules and the schedule of expenditures of federal and state awards, as

required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit

Requirements for Federal Awards (Uniform Guidance) and the State Single Audit Implementation Act (the “supplementary

information”) are the responsibility of management and were derived from and relate directly to the underlying accounting

and other records used to prepare the basic financial statements. Such information has been subjected to the auditing

procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and

reconciling such information directly to the underlying accounting and other records used to prepare the basic financial

statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing

standards generally accepted in the United States of America. In our opinion, the supplementary information is fairly stated in

all material respects in relation to the basic financial statements as a whole.

The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic

financial statements, and accordingly, we do not express an opinion or provide any assurance on them.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated December 28, 2018 on our

consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of

laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the

scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to

provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance. That report is

an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal

control over financial reporting and compliance.

Atlanta, Georgia December 28, 2018

4

Management’s Discussion and Analysis As management of the City of New Bern, we offer readers of the City of New Bern’s (the “City”) financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended June 30, 2018. We encourage readers to read the information presented here in conjunction with additional information that we have furnished in the City’s financial statements, which follow this narrative. Financial Highlights

The overall financial position of the City increased in 2018 as evidenced by an increase in the total net position of $9.11 million. Governmental activities increased approximately $822,000 and business-type activities increased approximately $8.28 million.

The assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows of resources at the close of the fiscal year by $186.43 million.

As of the close of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $23.2 million with a net increase of $1.4 million in fund balance. Approximately 59.6% of the total fund balance, or $13.86 million, is unassigned and available for spending at the government’s discretion and approximately 40.4%, or $9.4 million, is non-spendable, assigned or restricted.

At the end of the current fiscal year, fund balance available for appropriation (statutory formula) for the general fund was $13.9 million (including restricted cash) or 38.5% of the total general fund expenditures and transfers out for the fiscal year. The formal fund balance goal of the City is a range of 25% to 35%.

The City implemented GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. The implementation required a restatement of Governmental and Business-type Activities, removing the Net OPEB obligation across all funds and adding total OPEB liability to Governmental Activities of $33.3 million as of June 30, 2017. The OPEB liability as of June 30, 2018 is $31.7 million.

The City’s total debt decreased by $9.78 million (9.19%) during the current fiscal year, primarily due to $8.93 million in principal payments made against existing debt, which was partially offset by $2.82 million in new debt. Another key factor is the net decrease in the OPEB liability and Pension liabilities of $3.67 million.

The City is in compliance with all bond covenants. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements. The City’s basic financial statements consist of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements (see Figure 1). The basic financial statements present two different views of the City through the use of government-wide statements and fund financial statements. In addition to the basic financial statements, this report contains other supplemental information that will enhance the readers understanding of the financial condition of the City.

5

Required Components of Annual Financial Report

Figure 1

Summary Detail

Basic Financial Statements

The first two statements in the basic financial statements are Government-wide Financial Statements that provide both short and long-term information about the City’s financial status. The next statements are Fund Financial Statements. These statements focus on the activities of the individual parts of the City’s government. These statements provide more detail than the government-wide statements. There are three parts to the fund financial statements: 1) the governmental funds statements; 2) the budgetary comparison statements; and 3) the proprietary fund statements. The next section of the basic financial statements is the notes. The notes to the financial statements explain in detail some of the data contained in those statements. After the notes, supplemental information is provided to show details about the City’s individual funds. Budgetary information required by the North Carolina General Statutes also can be found in this part of the statements.

Management’s

Discussion and

Analysis

Basic

Financial

Statements

Government-Wide

Financial

Statements

Fund

Financial

Statements

Notes to the

Financial

Statements

6

Government-Wide Financial Statements The government-wide financial statements are designed to provide the reader with a broad overview of the City’s finances, similar in format to a financial statement of a private-sector business. The government-wide statements provide short and long-term information about the City’s financial status as a whole. The two government-wide statements report the City’s net position and how they have changed. Net position is the difference between the City’s total assets and deferred outflows of resources and total liabilities and deferred inflows of resources. Measuring net position is one way to gage the City’s financial condition. The government-wide statements are divided into two categories: Governmental activities – Most of the City’s basic services are included here, such as public safety,

streets, parks and recreation, and general administration. Property, sales and other taxes, operating transfers, and state and federal grant funds finance most of these activities.

Business-type activities – The City charges fees to customers to cover the costs of services provided.

The City’s water, sewer, electric and stormwater services are included here.

The government-wide financial statements are the Statement of Net Position and Statement of Activities of this report. Fund Financial Statements

The fund financial statements (see Figure 1) provide a more detailed look at the City’s most significant activities. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City of New Bern, like all other governmental entities in North Carolina, uses fund accounting to ensure and reflect compliance (or non-compliance) with finance-related legal requirements, such as the General Statutes or the City’s budget ordinance. All of the funds of the City can be divided into two categories: governmental funds and proprietary funds. Governmental Funds - Governmental funds are used to account for those functions reported as governmental activities in the government-wide financial statements. Most of the City’s basic services are accounted for in governmental funds. These funds focus on how assets can readily be converted into cash flow in and out, and what monies are left at year-end that will be available for spending in the next year. Governmental funds are reported using an accounting method called modified accrual accounting which provides a short-term spending focus. As a result, the governmental fund financial statements give the reader a detailed short-term view that helps him or her determine if there are more or less financial resources available to finance the City’s programs. The relationship between government activities (reported in the Statement of Net Position and the Statement of Activities) and governmental funds is described in a reconciliation that is a part of the fund financial statements.

7

The City of New Bern adopts an annual budget for the General Fund, as required by the General Statutes. The budget is a legally adopted document that incorporates input from the citizens of the City, the management of the City, and the decisions of the Board of Aldermen about which services to provide and how to pay for them. It also authorizes the City to obtain funds from identified sources to finance these current period activities. The budgetary statement provided for the General Fund demonstrates how well the City complied with the budget ordinance and whether or not the City succeeded in providing the services as planned when the budget was adopted. The budgetary comparison statement uses the budgetary basis of accounting and is presented using the same format, language, and classifications as the legal budget document. The statement reflects the following: (a) the original budget as adopted by the Board, (b) the final budget as amended by the Board, (c) the actual resources, charges to appropriations, and ending balances in the General Fund, and (d) the difference or variance between the final budget and the actual resources and charges. A reconciliation showing the differences in the reported activities is shown at the end of the budgetary statement to account for the difference between the budgetary basis of accounting and the modified accrual basis. Proprietary Funds - The City has two different types of proprietary funds. Enterprise Funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City uses enterprise funds to account for its water and sewer activity and for its electric and stormwater operations. These funds are the same as those functions shown in the business-type activities in the Statement of Net Position and the Statement of Activities. Internal Service Funds are an accounting device used to accumulate and allocate costs internally among the functions of the City. The City uses an internal service fund to account for one activity - its self-insured health benefit plan. Because this operation provides benefits to all City employees, the internal service fund has been included within the governmental activities in the government-wide financial statements. Notes to the Financial Statements - The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements begin on page 30 of this report. Other Information - In addition to the basic financial statements and accompanying notes, this report includes certain required supplementary information concerning the City of New Bern’s progress in funding its obligation to provide pension benefits to its employees. Required supplementary information can be found beginning on page 75 of this report. Interdependence with Other Entities: The City depends on financial resources flowing from, or associated with, both the Federal Government and the State of North Carolina. Because of this dependency, the City is subject to changes in specific flows of intergovernmental revenues based on modifications to Federal and State laws and Federal and State appropriations. It is also subject to changes in investment earnings and asset values associated with U.S. Treasury Securities because of actions by foreign governments and other holders of publicly held U.S. Treasury Securities.

8

Government-Wide Financial Analysis

City of New Bern’s Net Position Figure 2

Current and other assets $ 28,811,306 $ 27,856,989 $ 51,829,585 $ 53,571,388 $ 80,640,891 $ 81,428,377 Capital assets 59,537,584 57,907,195 152,069,309 148,710,484 211,606,893 206,617,679

Total assets 88,348,890 85,764,184 203,898,894 202,281,872 292,247,784 288,046,056

Deferred outflows of resources 3,847,253 5,109,170 1,237,501 2,008,024 5,084,754 7,117,194

Other liabilities 2,353,631 3,516,126 7,376,891 7,332,309 9,730,522 10,848,435 Long-term liabilities 48,988,999 50,307,435 48,705,086 56,145,844 97,694,085 106,453,279

Total liabilit ies 51,342,630 53,823,561 56,081,977 63,478,153 107,424,607 117,301,714

Deferred inflows of resources 3,362,325 381,083 120,496 161,503 3,482,821 542,586

Net position:Net investment in capital assets 52,136,675 50,662,101 105,972,773 97,084,561 158,109,448 147,746,662 Restricted 6,853,285 6,961,125 1,413,444 1,163,329 8,266,729 8,124,454 Unrestricted (21,498,772) (20,954,516) 41,547,705 42,402,350 20,048,933 21,447,834

Total net position $ 37,491,188 $ 36,668,710 $ 148,933,922 $ 140,650,240 $ 186,425,110 $ 177,318,950

2017-restated2018 2017-restated 2018 2017-restated 2018

GovernmentalActivities

Business-typeActivities

Total PrimaryGovernment

As noted earlier, net position may serve over time as one useful indicator of a government’s financial condition. The assets and deferred outflows exceeded liabilities and deferred inflows by $186.42 million as of June 30, 2018. The City’s net position increased by $9.11 million for the fiscal year ended June 30, 2018. However, the largest portion $158.11 million (84.81%) reflects the City's net investment in capital assets (e.g. land, buildings, machinery, equipment, infrastructure, and distribution systems). The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City’s net investment in capital assets is reported net of the outstanding related debt, the resources needed to repay that debt must be provided by other sources, since the capital assets cannot be used to liquidate these liabilities. An additional portion of the City’s net position, $8.27 million (4.44%), represents resources that are subject to external restrictions on how they may be used. The remaining balance of $20.05 million (10.75%) is unrestricted.

Several particular aspects of the City’s financial operations positively influenced the total unrestricted net position:

Roadways, streets and other assets were contributed by various entities in the amount $2.23 million as capital assets

Ad Valorem tax collections and sales and use tax distributions continue to improve Business Type Activities operating revenues continue to exceed operating expenses to meet debt

service requirements Continued low cost of debt due to the City’s positive financial position

9

City of New Bern’s Changes in Net Position Figure 3

2018 2017 2018 2017 2018 2017Revenues: Program revenues: Charges for services 4,432,486$ 4,113,616$ 76,362,096$ 74,776,886$ 80,794,582$ 78,890,502$ Operating grants and contributions 1,046,342 1,147,454 - - 1,046,342 1,147,454 Capital grants and contributions 3,884,401 3,503,246 312,343 - 4,196,744 3,503,246 General revenues: Property taxes 14,575,810 14,159,750 - - 14,575,810 14,159,750 Other taxes 10,652,498 10,374,423 - - 10,652,498 10,374,423 Unrestricted investment earnings 474,950 186,846 275,167 142,667 750,117 329,513 Miscellaneous 285,219 856,701 43,184 183,159 328,403 1,039,860 Total revenues 35,351,706 34,342,036 76,992,790 75,102,712 112,344,496 109,444,748

Expenses: General government 2,837,204 2,370,566 - - 2,837,204 2,370,566 Public safety 18,258,916 18,360,960 - - 18,258,916 18,360,960 Public works 10,829,385 6,969,663 - - 10,829,385 6,969,663 Environmental protection - 2,669,329 - - - 2,669,329 Culture and recreation 3,414,130 2,944,815 - - 3,414,130 2,944,815 Economic development 1,902,842 2,312,188 - - 1,902,842 2,312,188 Interest on long-term debt & Fees 160,982 173,584 - - 160,982 173,584 Electric - - 46,482,917 48,964,225 46,482,917 48,964,225 Water - - 8,338,702 8,395,327 8,338,702 8,395,327 Sewer - - 10,384,998 9,564,628 10,384,998 9,564,628 Stormwater - - 628,260 661,680 628,260 661,680 Total expenses 37,403,459 35,801,105 65,834,877 67,585,860 103,238,336 103,386,965

Change in net position before transfers (2,051,753) (1,459,069) 11,157,913 7,516,852 9,106,160 6,057,783

Transfers 2,874,231 2,652,027 (2,874,231) (2,652,027) - -

Change in net position 822,478 1,192,958 8,283,682 4,864,825 9,106,160 6,057,783

Net position, beginning 36,668,710 62,272,379 140,650,240 133,036,813 177,318,950 195,309,192 Restatement - (26,796,627) - 2,748,602 - (24,048,025) Net position, June 30 37,491,188$ 36,668,710$ 148,933,922$ 140,650,240$ 186,425,110$ 177,318,950$

TotalGovernmental Business-Type

Activities Activities

Governmental Activities. Governmental activities, after transfers, increased the City’s net position by $822,478. Key elements of this increase are as follows:

The increase in net positon was the result of the utilization of reserves for major expenditures such as street resurfacing, offset by donated assets including roadways and park land.

City management has continued to reduce non-essential programs to a minimum and implemented cost saving strategies across City departments. Certain nonrecurring expenses were either postponed or renegotiated in an attempt to maintain a healthy net positon. Management believes healthy investment in the City will result in additional revenues.

Continued diligence in the collection of property taxes by maintaining a tax collection percentage of 99.3%, the same collection rate as the prior year. Property taxes are collected by Craven County on behalf of the City.

10

Sales tax increased $248,000 due to economic growth in the City and State and changes to the State sales tax laws.

Investment earnings have improved $420,000 thanks to improved cash levels and increased rates of return.

Business-Type Activities. Business-type activities, after transfers, increased the City’s net position by $8.3 million, accounting for the majority of the total growth in the government’s net position. Key elements of this increase are as follows:

• The increase in transfers to other funds is due to the increased revenue collections and the resulting increased rate of return on the investment in the electric system.

• The sale of the North Carolina Eastern Municipal Power Association electric generating assets during the fiscal year ending June 30, 2016 and subsequent wholesale power purchase agreement resulted in a significant reduction in power supplies costs that continued into the future years. This reduction in costs made rate decreases of 12% effective September 1, 2015, 1.25% effective April 1, 2016, and 1.50% effective July 1, 2017 possible.

• The City continues to invest in the AMI and Load Management systems to maintain or reduce wholesale power costs during peak consumption hours.

• The City was able to maintain operational costs and reallocated internal service charges that aided in the maintaining of rates for the Electric, Water and Sewer Funds.

Financial Analysis of the City’s Funds

As noted earlier, the City of New Bern uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental Funds. The focus of the City’s governmental funds is to provide information on near-term inflows, outflows, and balances of usable resources. Such information is useful in assessing the City’s financing requirements. The General Fund is the chief operating fund of the City of New Bern. At the end of the current fiscal year, the City’s fund balance available for appropriation was $14.2 million while total fund balance reached $19.6 million. The total fund balance in the General Fund decreased $1,348,807. The City of New Bern has determined that the City should maintain an available fund balance between 25% and 35% of General Fund expenditures in case of unforeseen needs or opportunities and to meet the cash flow needs of the City. The City currently has an available fund balance of 38.50% of General Fund expenditures, while total fund balance represents 54.3% of the same amount. At June 30, 2018, the governmental funds of the City of New Bern reported a combined fund balance of $23.2 million, which is an increase of $1.4 million.

11

General Fund Budgetary Highlights: During the fiscal year, the City revised the budget on several occasions. Generally, budget amendments fall into one of three categories: 1) amendments made to adjust the estimates that are used to prepare the original budget ordinance once exact information is available; 2) amendments made to recognize new funding amounts from external sources, such as Federal and State grants; and 3) increases in appropriations that become necessary to maintain services.

Overall revenues exceeded budget by $1.4 million. The increase is due in part to current year ad valorem taxes, sales taxes, and investment earnings exceeding budgeted revenues by $533,000, $248,000 and $371,000 respectively.

Total expenditures were $1.9 million under budget primarily due to $867,000 open encumbrances, and the balance due to cost savings measures and reduced spending.

Proprietary Funds: The City’s Proprietary funds provide the same type of information found in the government-wide statements but in more detail. Unrestricted net position at the end of the year amounted to $23.5 million in the Electric Fund, $10.7 million in the Water Fund, $6.1 million in the Sewer Fund, and $85,000 in the Stormwater Fund. All four proprietary funds, Electric, Water, Sewer and Stormwater experienced growth in net position of $4.9 million, $1.9 million, $1.3 million, and $.38 million respectively. The primary reason for the increases in net position for these funds are requirements for revenues to exceed operational expenses sufficient enough to meet debt service requirements. Capital Asset and Debt Administration Capital Assets At June 30, 2018, the City had $211.61 million (net of accumulated depreciation) in capital assets consisting primarily of land, roads, buildings and systems, machinery and equipment, park facilities, vehicles, infrastructure and construction in process. This amount represents a net increase of $4.99 million or 2.4% over last year. Major capital asset transactions during the year include the following:

Construction in progress for the purchase of Advanced Metering Infrastructure/Demand Side Management System increased by $1.37 million.

Roadways and streets were contributed by various entities in the amount $1.36 million as capital assets.

Contribution of land for new Martin Marietta Park of $1.65 million. Vehicles and equipment purchased throughout the year totaling of $1.68 million.

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City of New Bern’s Capital Assets (Net of depreciation)

2018 2017 2018 2017 2018 2017

Land 18,684,164$ 16,026,625$ 14,453,977$ 14,453,977$ 33,138,141$ 30,480,602$

Buildings and systems 9,443,733 9,788,743 115,276,225 117,759,861 124,719,958 127,548,604

Equipment, furniture, and fixtures 5,024,289 5,476,871 5,091,745 5,327,864 10,116,034 10,804,735

Infrastructure 22,478,649 22,247,002 - - 22,478,649 22,247,002

Vehicles and motorized equipment 2,748,958 2,683,011 1,997,064 1,230,814 4,746,022 3,913,825

Construction in progress 1,157,791 1,684,943 15,250,298 9,937,968 16,408,089 11,622,911

Total 59,537,584$ 57,907,195$ 152,069,309$ 148,710,484$ 211,606,893$ 206,617,679$

Total

Governmental Business-Type


Additional information on the City’s capital assets can be found in Note 6 of this report. Long-Term Debt

City of New Bern Outstanding Debt General Obligation, Installment Purchases and Notes Payable

2018 2017-Restated 2018 2017-Restated 2018 2017-Restated

Revenue Bonds -$ -$ 16,070,782$ 18,662,107$ 16,070,782$ 18,662,107$ Installment purchases 8,627,381 8,038,626 3,859,046 5,107,437 12,486,427 13,146,063 Notes payable - - 26,585,374 29,447,558 26,585,374 29,447,558

37,902,211 40,866,149 1,604,429 2,351,998 39,506,640 43,218,147

Compensated Absences 1,440,674 1,402,660 585,454 576,744 2,026,128 1,979,404 Total: 47,970,266$ 50,307,435$ 48,705,085$ 56,145,844$ 96,675,351$ 106,453,279$

TotalGovernmental Business-Type


OPEB and Net Pension Liability

The City’s long-term liabilities decreased by $9.78 million (9.19%) during the fiscal year, primarily due to $8.93 million in principal payments made against existing debt. The payments are offset by $2.82 million in new debt to finance the purchase of a new financial system, drainage improvements and renovation and relocation of the central garage. Long term debt was further decreased by the net OPEB liability and net pension liability decrease of $3.67 million from the participation in the North Carolina Local Governmental Employees’ Retirement System, the Law Enforcement Officers’ Special Separation Allowance, and the City’s postemployment health benefits package. As previously noted, the City implemented GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. The implementation required a restatement of Governmental and Business-type Activities, removing the Net OPEB obligation across all funds and adding a new total OPEB liability to Governmental Activities of $33.3 million as of June 30, 2017. The total OPEB liability as of June 30, 2018 is $31.7 million. North Carolina General Statutes limit the amount of general obligation debt that a unit of government can issue to 8% of the total assessed value of taxable property located within that government’s boundaries. The legal debt margin for the City is $227.77 million.

13

Additional information regarding the City’s long-term debt can be found in Note 7 of this report. Economic Factors and Next Year’s Budgets and Rates The following key economic indicators impact the City: Building permits issued during 2018 was 517, which is lower compared to 579 permits issued

in the prior year. Total value of all permits was $120.93 million, which was an increase from a $90.46 million level in the prior year.

Developments along the Route 17 corridor are proceeding and are adding in excess of $30 million in ad valorem tax value and generate additional sales taxes. The additional developments will have a positive impact on water, sewer and electric consumption.

The June 2018 unemployment rate for Craven County was 4.3% compared to 4.2% for the State and 4.0% for the nation. This compares to June 2017 rates of 4.3% for Craven County, 4.2% for the State and 4.4% for the nation.

Budget Highlights for the Fiscal Year Ending June 30, 2019 Governmental Activities: The City has chosen to maintain property tax rates in the 2019 budget of $.46 per $100 of assessed value to offset a decrease in property values. In addition, the City appropriated $2.80 million of fund balance for street paving. $2.15 million of Fund Balance in the General Fund was appropriated in the 2019 budget. Management believes that continued restrictions on spending will maintain the City’s financial position and all vacant positions are evaluated thoroughly for need of continued funding. The City has established a Solid Waste enterprise fund to account for its leaf and limb and sanitation activities. These activities were previously budgeted for in the General Fund. The North Carolina General Assembly has approved an expansion of the statewide sales tax to select services and additional items not previously taxed as well as modifications to the distribution of sales tax with a lesser emphasis on point of sale and more emphasis per capita. These modifications took effect March 2016 and will continue to have a positive impact on the City’s budget. Budgeted expenditures in the General Fund are $37.16 million.

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Business-Type Activities: The fiscal year 2019 budget maintains the rate decreases effective July 1, 2015 in the electric, water, and sewer, and no rate change for stormwater services. The budget also reflects additional electric rate reductions of 12% and 1.25% effective September 1, 2015 and April 1, 2016 respectively made possible by the sale of the electric generating assets of the North Carolina Eastern Municipal Power Association, of which the City is a member and purchases its wholesale power; additionally, due to expected improved conditions on wholesale power costs, an additional rate reduction of 1.5% was effective July 1, 2017. Adopted budgets for the Electric, Water, Sewer Stormwater and Solid Waste Funds are $55.11 million, $10.49 million, $12.06 million, $752,400, and $3.375 million respectively. Requests for Information This report is designed to provide an overview of the City’s finances for those with an interest in this area. Questions concerning any of the information found in this report or requests for additional information should be directed to the Director of Finance, City of New Bern, P.O. Box 1129, New Bern, NC 28563-1129. One can also call (252) 639-2711, visit our website www.newbernnc.gov or send an email to [email protected] for more information.

Activities Activities Total

ASSETS

Cash and cash equivalents $ 21,881,190 $ 34,726,383 $ 56,607,573

Receivables, net of allowance for uncollectibles 3,694,529 9,297,253 12,991,782

Taxes receivable, net of allowance for uncollectibles 246,121 ‐ 246,121

Due from other governments 889,992 ‐ 889,992

Internal balances (1,076,075) 1,076,075 ‐

Inventories 131,550 2,241,845 2,373,395

Prepaid items 9,188 ‐ 9,188

Restricted cash and cash equivalents 3,034,811 4,488,029 7,522,840

Capital assets:

Non‐depreciable 19,841,955 29,704,275 49,546,230

Depreciable, net of accumulated depreciation 39,695,629 122,365,034 162,060,663

Total assets 88,348,890 203,898,894 292,247,784

DEFERRED OUTFLOWS OF RESOURCES

Pension related items 2,917,826 1,237,501 4,155,327

OPEB related items 929,427 ‐ 929,427

Total deferred outflows of resources 3,847,253 1,237,501 5,084,754

LIABILITIES

Accounts payable 2,328,860 4,195,213 6,524,073

Accrued liabilities 176,212 525,759 701,971

Customer deposits ‐ 2,655,919 2,655,919

Claims and judgments payable 867,292 ‐ 867,292

Installment notes payable, due within one year 1,929,725 915,631 2,845,356

Installment notes payable, due in more than one year 6,697,656 2,943,415 9,641,071

Notes payable, due within one year ‐ 2,890,821 2,890,821

Notes payable, due in more than one year ‐ 23,694,553 23,694,553

Bonds payable, due within one year ‐ 2,636,249 2,636,249

Bonds payable, due in more than one year ‐ 13,434,533 13,434,533

Compensated absences, due within one year 1,152,539 468,363 1,620,902

Compensated absences, due in more than one year 288,135 117,091 405,226

Total pension liability ‐ LEOSSA, due in more than one year 2,767,704 ‐ 2,767,704

Net pension liability ‐ LGERS, due in more than one year 3,473,721 1,604,430 5,078,151

Total OPEB liability, due in more than one year 31,660,786 ‐ 31,660,786

Total liabilities 51,342,630 56,081,977 107,424,607

DEFERRED INFLOWS OF RESOURCES

Pension related items 338,413 120,496 458,909

OPEB related items 3,023,912 ‐ 3,023,912

Total deferred inflows of resources 3,362,325 120,496 3,482,821

NET POSITION

Net investment in capital assets 52,136,675 105,972,773 158,109,448

Restricted for:

Stabilization by State Statute 5,202,285 ‐ 5,202,285

Debt service ‐ 1,413,444 1,413,444

Public safety 234,343 ‐ 234,343

Economic development 1,416,657 ‐ 1,416,657

Unrestricted (21,498,772) 41,547,705 20,048,933

Total net position $ 37,491,188 $ 148,933,922 $ 186,425,110

The accompanying notes are an integral part of these financial statements.


STATEMENT OF NET POSITION

JUNE 30, 2018

Governmental Business‐type

Primary Government

15

STATE

MEN

T OF ACTIVITIES

FOR THE YEA

R ENDED

JUNE 30, 2

018

Program

Reve

nues

Operating

Cap

ital

Charge

s for

Grants and

Grants and

Gove

rnmental

Business‐typ

e

Functions/Program

sExpenses

Services

Contributions

Contributions

Activities

Activities

Total

Governmen

tal activities:

Gen

eral governmen

t$

2,837,204

$297,137

$283,414

$‐

$(2,256,653)

$‐

$(2,256,653)

Public safety

18,258,916

299,447

357,923

‐

(17,601,546)

‐

(17,601,546)

Public works

10,829,385

2,991,246

‐

2,234,401

(5,603,738)

‐

(5,603,738)

Cultural and recreational

3,414,130

152,624

‐

1,650,000

(1,611,506)

‐

(1,611,506)

Economic and physical developmen

t1,902,842

692,032

405,005

‐

(805,805)

‐

(805,805)

Interest on lo

ng‐term

deb

t160,982

‐

‐

‐

(160,982)

‐

(160,982)

Total governmen

tal activities

37,403,459

4,432,486

1,046,342

3,884,401

(28,040,230)

‐

(28,040,230)

Business‐type activities:

Electric

46,482,917

53,878,097

‐

‐

‐

7,395,180

7,395,180

Water

8,338,702

10,157,044

‐

‐

‐

1,818,342

1,818,342

Sewer

10,384,998

11,633,639

‐

‐

‐

1,248,641

1,248,641

Storm

water

628,260

693,316

‐

312,343

‐

377,399

377,399

Total b

usiness‐type activities

65,834,877

76,362,096

‐

312,343

‐

10,839,562

10,839,562

Total p

rimary go

vernmen

t$

103,238,336

$80,794,582

$1,046,342

$4,196,744

(28,040,230)

10,839,562

(17,200,668)

Gen

eral reven

ues:

Ad valorem taxes

14,575,810

‐

14,575,810

Sales an

d use taxes

6,837,929

‐

6,837,929

Utilities fran

chise tax

2,018,691

‐

2,018,691

Paymen

ts in

lieu

of taxes

1,096,711

‐

1,096,711

Other taxes

699,167

‐

699,167

Investmen

t ea

rnings

474,950

275,167

750,117

Miscellaneo

us

260,563

‐

260,563

Gain on sale of capital assets

24,656

43,184

67,840

Tran

sfers

2,874,231

(2,874,231)

‐

Total gen

eral reven

ues and transfers

28,862,708

(2,555,880)

26,306,828

Chan

ge in

net position

822,478

8,283,682

9,106,160

Net position, b

eginning of year, restated

36,668,710

140,650,240

177,318,950

Net position, end of year

$37,491,188

$148,933,922

$186,425,110

The accompan

ying notes are an in

tegral part of these finan

cial statements.

CITY OF NEW

BER

N, N

ORTH

CAROLINA

Net (Exp

enses) Reve

nues an

d

Chan

ges in Net Position

16

BALANCE SHEETGOVERNMENTAL FUNDS

JUNE 30, 2018

Total

Governmental Governmental

ASSETS Funds Funds


Taxes receivable, net 246,121 ‐ 246,121

Accounts receivable, net 3,653,287 32,309 3,685,596

Due from other governments 793,350 96,642 889,992

Due from other funds 545,875 ‐ 545,875

Restricted cash and cash equivalents 372,641 2,662,170 3,034,811

Inventory 131,550 ‐ 131,550


Total assets $ 22,686,565 $ 4,321,683 $ 27,008,248

LIABILITIES

Accounts payable and accrued liabilities $ 2,210,464 $ 106,402 $ 2,316,866

Due to other funds ‐ 545,875 545,875

Total liabilities 2,210,464 652,277 2,862,741


Unavailable revenue ‐ ad valorem taxes 169,137 ‐ 169,137

Unavailable revenue ‐ liens and other receivables 735,060 ‐ 735,060

Unavailable revenue ‐ intergovernmental ‐ 6,810 6,810

Total deferred inflows of resources 904,197 6,810 911,007

FUND BALANCES

Nonspendable:

Inventories 131,550 ‐ 131,550


Restricted:

Stabilization by State Statute 5,202,285 ‐ 5,202,285

Public safety ‐ 234,343 234,343

Streetscapes projects ‐ 1,188,098 1,188,098

ERP projects ‐ 38,374 38,374

Economic and physical development 372,641 1,044,016 1,416,657

Assigned:

Capital projects ‐ 1,164,575 1,164,575

Unassigned 13,864,240 (6,810) 13,857,430

Total fund balances 19,571,904 3,662,596 23,234,500

Total liabilities, deferred inflows

of resources, and fund balances $ 22,686,565 $ 4,321,683 $ 27,008,248


Nonmajor

General

Fund


17

RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS

Total governmental fund balances: $ 23,234,500

Amounts reported for governmental activities in the Statement of Net Position are different because:

Capital assets used in governmental activities are not current financial resources and, therefore, are not reported in

the funds. 59,537,584

Some receivables are not available to pay for current‐period expenditures and, therefore, are reported as unavailable

revenue in the funds. 911,007

Total pension liability and deferred inflow and outflows for the Law Enforcement Officers' Special Separation

Allowance are not recorded on the fund financial statements. (2,619,451)

The net pension liability and deferred inflows and outflows of resources are resources related to the City's LGERS

defined benefit pension plan are not expected to be liquidated with expendable available financial resources and,

therefore, are not reported in the funds. (1,042,561)

The total OPEB liability and deferred inflows and outflows of resources are resources related to the City's OPEB plan

are not expected to be liquidated with expendable available financial resources and, therefore, are not reported in

the funds. (33,755,271)

Internal service funds are used by the City to charge costs to other funds. The assets and liabilities are included in

the governmental activities. 1,318,206

Long‐term liabilities are not due and payable in the current period and, therefore, are not reported in the funds. (10,092,826)

Net position ‐ governmental activities $ 37,491,188



TO THE STATEMENT OF NET POSITION


18

Total

Governmental Governmental

Fund Funds Funds

Revenues

Ad valorem taxes $ 14,600,912 $ ‐ $ 14,600,912

Unrestricted intergovernmental 10,760,957 ‐ 10,760,957

Restricted intergovernmental 1,049,336 725,373 1,774,709

Licenses, permits and fees 661,904 ‐ 661,904

Sales and services 3,770,582 ‐ 3,770,582

Investment earnings 472,720 2,230 474,950

Miscellaneous 313,421 65,208 378,629

Total revenues 31,629,832 792,811 32,422,643

Expenditures

Current:

General government 2,224,047 32,958 2,257,005

Public safety 16,460,158 406,912 16,867,070

Public works 9,464,211 797,333 10,261,544

Cultural and recreational 2,997,455 4,424 3,001,879

Economic and physical development 1,565,906 491,175 2,057,081

Debt service:

Principal retirements 1,988,779 ‐ 1,988,779

Interest 164,535 ‐ 164,535

Total expenditures 34,865,091 1,732,802 36,597,893

Deficiency of revenues over expenditures (3,235,259) (939,991) (4,175,250)

Other financing sources (uses)

Proceeds from sale of capital assets 138,817 ‐ 138,817

Transfers in 2,925,779 1,232,988 4,158,767

Transfers out (1,178,144) (106,392) (1,284,536)

Installment purchase obligations issued ‐ 2,577,534 2,577,534

Total other financing sources (uses) 1,886,452 3,704,130 5,590,582

Net change in fund balances (1,348,807) 2,764,139 1,415,332

Fund balances, beginning of year 20,920,711 898,457 21,819,168

Fund balances, end of year $ 19,571,904 $ 3,662,596 $ 23,234,500



GOVERNMENTAL FUNDS

General


STATEMENT OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCES

Nonmajor

19

RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,

TO THE STATEMENT OF ACTIVITIES

Amounts reported for governmental activities in the statement of activities are different because:

Net change in fund balances ‐ total governmental funds $ 1,415,332

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 depreciation exceeded capital outlays in the current period. (1,265,470)

The net effect of various miscellaneous transactions involving capital assets (i.e., donations, sales and disposal of

equipment) is to increase net position. 2,895,859

Revenues in the statement of activities that do not provide current financial resources are not reported as revenues

in the funds. (105,613)

The issuance of long‐term debt 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. This amount is the net effect of these differences in the

treatment of long‐term debt and related items. (588,755)

Internal service funds are used by management to charge the costs of the City's insurance plan to individual funds.

The net expense of the internal service fund is reported within governmental activities. (215,193)

Some expenses reported in the statement of activities do not require the use of current financial resources and,

therefore, are not reported as expenditures in governmental funds. (1,313,682)

Change in net position ‐ governmental activities $ 822,478


AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS



20

Variance with

Actual Final Budget

Original Final Amounts Positive (Negative)

Revenues

Ad valorem taxes $ 14,067,300 $ 14,067,300 $ 14,600,912 $ 533,612

Unrestricted intergovernmental 10,708,415 10,714,921 10,760,957 46,036

Restricted intergovernmental 862,000 989,231 1,049,336 60,105

Licenses, permits and fees 467,760 467,760 661,904 194,144

Sales and services 3,637,850 3,718,573 3,770,582 52,009

Investment earnings 101,310 101,310 472,720 371,410

Miscellaneous 173,300 194,700 313,421 118,721

Total revenues 30,017,935 30,253,795 31,629,832 1,376,037

Expenditures

Current:

General government 2,025,845 2,200,707 2,214,355 (13,648)

Public safety 16,343,234 17,017,770 16,460,158 557,612

Public works 8,360,731 10,277,580 9,464,211 813,369

Cultural and recreational 3,100,378 3,326,218 2,997,455 328,763

Economic and physical development 1,705,970 1,739,401 1,565,906 173,495

Debt service:

Principal retirements 1,761,028 1,999,641 1,988,779 10,862

Interest 186,892 186,892 164,535 22,357

Total expenditures 33,484,078 36,748,209 34,855,399 1,892,810

Deficiency of revenues over expenditures (3,466,143) (6,494,414) (3,225,567) 3,268,847

Other financing sources (uses):

Proceeds from sale of capital assets ‐ ‐ 138,817 138,817

Transfers in 2,662,500 2,696,500 2,925,779 229,279

Transfers out (80,857) (1,243,993) (1,178,144) 65,849

Contingency (345,599) (705) ‐ 705

Installment purchase obligations issued 1,246,184 1,306,184 ‐ (1,306,184)

Total other financing sources (uses) 3,482,228 2,757,986 1,886,452 (871,534)

Revenues and other financing sources over (under)

expenditures and other uses 16,085 (3,736,428) (1,339,115) 2,397,313

Appropriated fund balance (16,085) 3,569,396 ‐ (3,569,396)

Net change in fund balances $ ‐ $ (167,032) (1,339,115) $ (1,172,083)

Fund balances, beginning of year 20,920,711

Adjustment to Statement of Revenues, Expenditures, and

Changes in Fund Balance (GAAP):

Change in allowance for doubtful account receivable balances (9,692)

Fund balances, end of year $ 19,571,904


GENERAL FUND

Budget


STATEMENT OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCES ‐ BUDGET TO ACTUAL


21

Electric

ASSETS Fund Fund

CURRENT ASSETS


Accounts receivable, net of allowances 6,882,364 1,121,780 1,233,255

Prepaid items ‐ ‐ ‐

Inventories 2,241,845 ‐ ‐

Restricted cash and cash equivalents 2,892,785 90,900 1,504,344

Total current assets 31,126,279 11,320,925 8,186,726

CAPITAL ASSETS

Nondepreciable 7,704,896 7,197,988 14,489,048

Depreciable, net of accumulated depreciation 28,189,706 42,189,314 49,754,055

Total noncurrent assets 35,894,602 49,387,302 64,243,103

Total assets 67,020,881 60,708,227 72,429,829

DEFERRED OUTFLOWS OF RESOURCES


Total deferred outflows of resources 610,889 324,427 265,979

LIABILITIES

CURRENT LIABILITIES

Accounts payable 3,838,642 132,488 221,458

Accrued liabilities 300,229 98,374 124,752

Customer deposits 2,655,919 ‐ ‐

Claims payable ‐ ‐ ‐

Installment notes payable, current 574,766 47,554 211,341

Notes payable, current ‐ 1,680,331 1,210,490

Bonds payable, current 1,120,054 680,562 835,633

Compensated absences payable, current 260,318 113,987 84,204

8,749,928 2,753,296 2,687,878

NONCURRENT LIABILITIES

Installment notes payable 2,117,258 198,949 374,731

Notes payable ‐ 18,483,643 5,210,910

Bonds payable 6,276,780 3,675,332 3,482,421

Compensated absences payable 65,080 28,497 21,051

Net pension liability 797,965 406,284 350,505

Total noncurrent liabilities 9,257,083 22,792,705 9,439,618

Total liabilities 18,007,011 25,546,001 12,127,496



Total deferred inflows of resources 59,929 30,512 26,323

NET POSITION

Net investment in capital assets 26,042,610 24,711,831 53,008,477

Restricted for debt service ‐ ‐ 1,413,444

Unrestricted 23,522,220 10,744,310 6,120,068

Total net position $ 49,564,830 $ 35,456,141 $ 60,541,989

Adjustment to reflect the consolidation of internal service fund activities to enterprise funds

Net position of business‐type activities


Water Sewer

Fund


STATEMENT OF NET POSITION

PROPRIETARY FUNDS

JUNE 30, 2018

22

Totals

$ 59,726 $ 34,726,383 $ 3,408,075

59,854 9,297,253 8,933

‐ ‐ 8,000

‐ 2,241,845 ‐

‐ 4,488,029 ‐

119,580 50,753,510 3,425,008

312,343 29,704,275 ‐

2,231,959 122,365,034 ‐

2,544,302 152,069,309 ‐

2,663,882 202,822,819 3,425,008

36,206 1,237,501 ‐

36,206 1,237,501 ‐

2,625 4,195,213 11,994

2,404 525,759 151,441

‐ 2,655,919 ‐

‐ ‐ 867,292

81,970 915,631 ‐

‐ 2,890,821 ‐

‐ 2,636,249 ‐

9,854 468,363 ‐

96,853 14,287,955 1,030,727

252,477 2,943,415 ‐

‐ 23,694,553 ‐

‐ 13,434,533 ‐

2,463 117,091 ‐

49,676 1,604,430 ‐

304,616 41,794,022 ‐

401,469 56,081,977 1,030,727

3,732 120,496 ‐

3,732 120,496 ‐

2,209,855 105,972,773 ‐

‐ 1,413,444 ‐

85,032 40,471,630 2,394,281

$ 2,294,887 147,857,847 $ 2,394,281

1,076,075

$ 148,933,922

Internal

Service Fund

Stormwater

Fund

Nonmajor Fund

23

Electric

Fund Fund

OPERATING REVENUES

Charges for services $ 53,660,543 $ 9,832,073 $ 11,079,351

Other operating revenues 217,554 324,971 554,288

Employee and retiree contributions ‐ ‐ ‐

Employer and other contributions ‐ ‐ ‐

Total operating revenues 53,878,097 10,157,044 11,633,639

OPERATING EXPENSES

Administrative and general 3,470,993 2,038,409 2,247,430

Operations and maintenance 3,431,769 4,116,112 5,768,627

Production 36,980,853 ‐ ‐

Depreciation and amortization 2,335,090 1,570,327 2,049,776

Claims and payments to third party administrators ‐ ‐ ‐

Total operating expenses 46,218,705 7,724,848 10,065,833

Operating income (loss) 7,659,392 2,432,196 1,567,806

NON‐OPERATING REVENUES (EXPENSES)

Investment earnings 146,970 61,985 64,451

Gain (loss) on disposal of capital assets 28,425 437 14,322

Interest expense (212,251) (584,533) (295,038)

Total non‐operating revenue (expenses) (36,856) (522,111) (216,265)

Income before transfers 7,622,536 1,910,085 1,351,541

Capital contributions ‐ ‐ ‐

Transfers out (2,765,412) (56,535) (45,859)

Change in net position 4,857,124 1,853,550 1,305,682

Net position, beginning of year, restated 44,707,706 33,602,591 59,236,307

Net position, end of year $ 49,564,830 $ 35,456,141 $ 60,541,989

Adjustment to reflect the consolidation of internal service fund activities to enterprise funds

Change in net position of business‐type activities


Water Sewer

PROPRIETARY FUNDS

Fund



STATEMENT OF REVENUES, EXPENSES, AND

CHANGES IN NET POSITION

24

Totals

$ 693,316 $ 75,265,283 $ ‐

‐ 1,096,813 ‐

‐ ‐ 621,140

‐ ‐ 5,289,216

693,316 76,362,096 5,910,356

57,764 7,814,596 ‐

478,304 13,794,812 ‐

‐ 36,980,853 ‐

78,539 6,033,732 ‐

‐ ‐ 6,254,647

614,607 64,623,993 6,254,647

78,709 11,738,103 (344,291)

1,761 275,167 20,019

‐ 43,184 ‐

(9,983) (1,101,805) ‐

(8,222) (783,454) 20,019

70,487 10,954,649 (324,272)

312,343 312,343 ‐

(6,425) (2,874,231) ‐

376,405 8,392,761 (324,272)

1,918,482 2,718,553

$ 2,294,887 $ 2,394,281

(109,079)

$ 8,283,682

InternalStormwater

Fund

Nonmajor Fund

Service Fund

25

Electric Water

Fund Fund

CASH FLOWS FROM OPERATING ACTIVITIES

Receipts from customers and users $ 53,539,722 $ 10,129,912 $ 11,604,613

Payments to suppliers (38,421,244) (3,653,125) (5,747,619)

Payments to employees (5,114,633) (2,813,059) (2,251,990)

Net cash provided by (used in) operating activities 10,003,845 3,663,728 3,605,004

CASH FLOWS FROM NON‐CAPITAL FINANCING ACTIVITIES

Transfers to other funds (2,765,412) (56,535) (45,859)

Net cash used in non‐capital financing activities (2,765,412) (56,535) (45,859)

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES

Purchases and acquisition of capital assets (3,790,387) (2,695,604) (2,200,021)

Proceeds from sale of capital assets 28,425 437 14,553

Proceeds from issuance of installment notes 142,466 50,000 50,000

Principal payments on long‐term debt (1,640,481) (2,461,277) (2,763,851)

Receipt of intergovernmental receivable ‐ ‐ 512,721

Interest paid (216,152) (576,848) (304,305)

Net cash used in capital and related financing activities (5,476,129) (5,683,292) (4,690,903)

CASH FLOWS FROM INVESTING ACTIVITIES

Interest received 146,970 61,985 64,451

Net cash provided by investing activities 146,970 61,985 64,451

Net increase (decrease) in cash and cash equivalents 1,909,274 (2,014,114) (1,067,307)

Cash and cash equivalents, beginning of year 20,092,796 12,213,259 8,020,778

Cash and cash equivalents, end of year $ 22,002,070 $ 10,199,145 $ 6,953,471

CASH AND CASH EQUIVALENTS CLASSIFIED AS:


Restricted cash and cash equivalents 2,892,785 90,900 1,504,344

Total cash and cash equivalents $ 22,002,070 $ 10,199,145 $ 6,953,471


STATEMENT OF CASH FLOWS

PROPRIETARY FUNDS


Sewer

Fund

26

Totals

$ 690,867 $ 75,965,114 $ 5,911,133

(241,446) (48,063,434) (6,141,560)

(294,598) (10,474,280) ‐

154,823 17,427,400 (230,427)

(6,425) (2,874,231) ‐

(6,425) (2,874,231) ‐

(394,433) (9,080,445) ‐

‐ 43,415 ‐

‐ 242,466 ‐

(78,757) (6,944,366) ‐

‐ 512,721 ‐

(10,294) (1,107,599) ‐

(483,484) (16,333,808) ‐

1,761 275,167 20,019

1,761 275,167 20,019

(333,325) (1,505,472) (210,408)

393,051 40,719,884 3,618,483

$ 59,726 $ 39,214,412 $ 3,408,075

$ 59,726 $ 34,726,383 $ 3,408,075

‐ 4,488,029 ‐

$ 59,726 $ 39,214,412 $ 3,408,075

continued

Nonmajor

Stormwater

Fund

Internal

Service Fund

27

Electric Water

Fund Fund

RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED BY (USED IN)

OPERATING ACTIVITIES

Operating income (loss) $ 7,659,392 $ 2,432,196 $ 1,567,806

Adjustments to reconcile operating income (loss) to net

cash provided by (used in) operating activities:

Depreciation expense 2,335,090 1,570,327 2,049,776

Change in assets, deferred outflows of resources, liabilities, and

deferred inflows of resources:

Decrease (increase) in accounts receivable (306,523) (27,132) (29,026)

Decrease in due from other funds 179,113 ‐ ‐

Decrease (increase) in inventories (199,452) ‐ ‐

Increase in deferred outflows of resources 406,439 187,530 150,811

Increase (decrease) in accounts payable 364,425 (300,711) 44,419

Increase (decrease) in accrued liabilities 32,215 (2,228) (53,213)

Decrease in customer deposits (31,852) ‐ ‐

Increase (decrease) in compensated absences payable (11,856) 9,202 10,361

Decrease in net pension liability (423,146) (205,456) (135,930)

Increase in claims payable ‐ ‐ ‐

Net cash provided by (used in) operating activities $ 10,003,845 $ 3,663,728 $ 3,605,004

NON‐CASH CAPITAL FINANCING ACTIVITIES

Donated asstes paid by other funds of the City $ ‐ $ ‐ $ ‐

Total non‐cash capital related financing activities $ ‐ $ ‐ $ ‐


Fund

STATEMENT OF CASH FLOWS

PROPRIETARY FUNDS


Sewer


28

Totals

$ 78,709 $ 11,738,103 $ (344,291)

78,539 6,033,732 ‐

(2,449) (365,130) 777

‐ 179,113 ‐

‐ (199,452) ‐

25,743 770,523 ‐

(3,439) 104,694 5,455

760 (22,466) 151,441

‐ (31,852) ‐

1,003 8,710 ‐

(24,043) (788,575) ‐

‐ ‐ (43,809)

$ 154,823 $ 17,427,400 $ (230,427)

$ 312,343 $ 312,343 $ ‐

$ 312,343 $ 312,343 $ ‐

Internal

Fund Service Fund

Nonmajor

Stormwater

29

30

CITY OF NEW BERN, NORTH CAROLINA NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2018

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The financial statements of the City of New Bern, North Carolina (the “City”) have been prepared in

conformity with accounting principles generally accepted in the United States of America (GAAP) as applied

to government units. The Governmental Accounting Standards Board (GASB) is the accepted standard‐

setting body for establishing governmental accounting and financial reporting principles. The City’s

significant accounting policies are described below.

A. Reporting Entity Founded in 1710 and chartered under the laws of the State of North Carolina, the City of New Bern, North

Carolina is governed by an elected mayor and a six‐member board of aldermen. The government provides

such services as police and fire protection, cultural and recreational activities, public works, water, sewer,

and electric services. The City is managed by a City Manager who is hired directly by the Board. The City

does not report any component units.

B. Government‐wide and Fund Financial Statements

The government‐wide financial statements (i.e., the statement of net position and the statement of

activities) report information on all of the non‐fiduciary activities of the primary government.

Governmental activities, which normally are supported by taxes and intergovernmental revenues, are

reported separately from business‐type activities, which rely to a significant extent on fees and charges for

support. The statement of net position includes non‐current assets and non‐current liabilities. In addition,

the government‐wide statement of activities reflects depreciation expense on the City’s capital assets.

The statement of activities demonstrates the degree to which the direct expenses of a given function or

segments are offset by program revenues. Direct expenses are those that are clearly identifiable with a

specific function or segment. Program revenues include: 1) charges to those who purchase, use, or directly

benefit from goods, services, or privileges provided by a given function or segment, and 2) grants and

contributions that are restricted to meeting the operational or capital requirements of a particular function

or segment. Taxes and other items not properly included among program revenues are reported instead as

general revenues.

Separate financial statements are provided for governmental funds and proprietary funds. Major individual

governmental funds and major individual enterprise funds are reported as separate columns in the fund

financial statements.

31

NOTES TO FINANCIAL STATEMENTS

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

C. Measurement Focus, Basis of Accounting and Financial Statement Presentation The government‐wide financial statements are reported using the economic resources measurement focus

and the accrual basis of accounting, as are the proprietary fund financial statements. Revenues are

recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of

the related cash flows. Property taxes are recognized as revenues in the year for which they are levied.

Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the

provider have been met.

Governmental fund financial statements are reported using the current financial resources measurement

focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both

measurable and available. Revenues are considered to be available when they are collectible within the

current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City

considers most revenues to be available if they are collected within 90 days of the end of the current fiscal

period, except for property taxes which use a 60 day period. At June 30, 2018, taxes receivable for property

other than motor vehicles are materially past due and are not considered to be available resources except

as noted above to finance 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. Effective 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 fiscal

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 financial statements and are offset by

deferred inflows of resources. Expenditures generally are recorded when a liability is incurred, as under

accrual accounting. However, debt service expenditures, as well as expenditures related to other long‐term

liabilities, such as compensated absences and claims and judgments, are recorded only when payment is

due.

Property taxes and related items, sales taxes, franchise taxes, licenses, intergovernmental grants, and

investment income associated with the current fiscal period are all considered to be susceptible to accrual

and so have been recognized as revenues of the current fiscal period. All other revenue items are

considered to be measurable and available only when cash is received by the City.

In accordance with GASB Statement No. 33, Accounting and Financial Reporting for Non‐exchange

Transactions, the corresponding assets (receivables) in non‐exchange transactions are recognized in the

period in which the underlying exchange occurs, when an enforceable legal claim has arisen, when all

eligibility requirements have been met, or when resources are received, depending on the revenue source.

In accordance with GASB Statement No. 34, individual major funds are reported as separate columns in the

fund financial statements.

32



C. Measurement Focus, Basis of Accounting and Financial Statement Presentation (Continued)

The City reports the following major governmental fund:

The General Fund is the City’s primary operating fund. It accounts for all financial resources of the

general government, except those required to be accounted for in another fund.

The City reports the following major enterprise funds:

The Electric Fund accounts for the operation, maintenance and development of the City’s electric system

and services.

The Water Fund accounts for the operation, maintenance and development of the City’s water system

and services.

The Sewer Fund accounts for the operation, maintenance and development of the City’s sewer system

and services.

Additionally, the City reports the following fund types:

The special revenue funds are used to account for specific revenues, such as various grants and

contributions, which are legally restricted or committed to expenditures for particular purposes.

The capital projects funds accounts for financial resources to be used for the acquisition and

construction of major capital projects.

The Stormwater fund accounts for the maintenance and development of the City’s stormwater system.

The internal service fund accounts for the City’s partially self‐insured health benefits plan and workers

compensation program which charges the other funds of the City for the insurance claims.

In accounting and reporting for its proprietary operations, the government applies all GASB

pronouncements.

33



C. Measurement Focus, Basis of Accounting and Financial Statement Presentation (Continued)

As a general rule, the effect of inter‐fund activity has been eliminated from the government‐wide financial

statements. However, any inter‐fund services provided and used are not eliminated as this process would

distort the direct costs and program revenues reported in the various functions.

Amounts reported as program revenues include: 1) charges to customers or applicants for goods, services,

or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions.

Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise,

general revenues include all taxes.

Proprietary funds distinguish operating revenues and expenses from non‐operating items. Operating

revenues and expenses generally result from providing services and producing and delivering goods in

connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the

enterprise funds include the cost of these goods and services, administrative expenses, and depreciation on

capital assets. All revenues and expenses not meeting this definition are reported as non‐operating

revenues and expenses.

D. Budgets

The City’s budgets are adopted as required by the North Carolina General Statutes. Annual appropriated

budgets are adopted for all funds, with the exception of capital projects funds and grant‐related special

revenue funds, for which project length budgets are adopted. In accordance with state law, the budgets

adopted for the enterprise funds are adopted on the modified accrual basis of accounting, and a

reconciliation is provided along with the budget schedule to reconcile from the modified accrual basis to the

accrual basis. The enterprise fund capital project funds are consolidated with their respective operating

fund for reporting purposes. The governmental funds’ budgets are adopted on a basis other than

accounting principles generally accepted in the United States of America. Budgets are adopted to show use

of fund balance as an other financing source for both governmental and proprietary funds, as well as the

proprietary funds are budgeted on the modified accrual basis of accounting. Annual operating budgets are

adopted each fiscal year through passage of an annual budget ordinance and amended as required for the

General fund, special revenue funds, and the enterprise funds. During the fiscal year ended June 30, 2018,

the original budget was amended through supplemental appropriations. These changes are reflected in the

budgetary comparison schedules. All annual budget appropriations lapse at the end of each year.

The outstanding encumbrances are amounts needed to pay any commitments relate to purchase orders and

contracts that remain unperformed at year‐end. As of June 30, 2018 the General Fund is reporting $867,849

of open encumbrances.

34



E. Deposits

Cash includes amounts in demand deposits as well as short‐term investments with a maturity date within

three months of the date acquired by the City. The City pools cash resources of its various funds in order to

facilitate the management of cash. Cash applicable to a particular fund is readily identifiable. The balance

in the pooled cash accounts is available to meet current operating requirements. Any deposit in excess of

the federal depository insured amounts must be collateralized by an equivalent amount of state or U.S.

obligations. For purposes of the statement of cash flows, all highly liquid investments with an original

maturity of less than 90 days are considered to be cash equivalents.

State law [G.S. 159‐30(c)] authorizes the City to invest in obligations of the United States or obligations fully

guaranteed both as to principal and interest by the United States, obligations of the state of North Carolina,

bonds and notes of any North Carolina local government or public authority, obligations of certain non‐

guaranteed federal agencies, certain high quality issues of commercial paper and bankers’ acceptances, and

the North Carolina Capital Management Trust (NCCMT). The NCCMT‐ Government Portfolio, a SEC‐

registered (2a‐7) external investment pool, is measured at amortized cost and the NCCMT‐ Term Portfolio’s

securities are measured at fair value.

F. Restricted cash and cash equivalents

The City has restricted cash and cash equivalents related to unspent proceeds from long‐term debt issued

by the General Fund, ERP Project Fund, Garage Relocation Project Fund, Drainage Improvement Project

Fund, Water Fund, Sewer Fund, and Electric Fund. These proceeds are held to be disbursed as costs are

incurred on the financed construction projects. Customer deposits held by the City are restricted to the

service for which the deposits are collected. Additionally, the cash of the Municipal Service District (MSD)

are restricted for improvements within the special district.

G. Receivables

All receivables are reported at their gross value and, where appropriate, are reduced by the estimated

portion that is expected to be uncollectible. In accordance with state law [G.S. 105‐347 and G.S. 159‐13(a)],

the City levies ad valorem taxes on property other than motor vehicles on July 1st, the beginning of the

fiscal year. The taxes are due on September 1st (lien date); however, interest does not accrue until the

following January 6th. These taxes are based on the assessed values as of January 1.

An estimated amount has been recorded for utility services provided but not billed as of the end of the fiscal

year, and is included in accounts receivable, net of uncollectible amounts.

35



H. Allowances

All receivables that historically experience uncollectible accounts are shown net of an allowance for

doubtful accounts. This amount is estimated by analyzing the percentage of receivables that were written

off in prior years.

I. Interfund Receivables and Payables

Activity between funds that is representative of lending/borrowing arrangements outstanding at the end of

the fiscal year as well as all other outstanding balances between funds are reported as “due to/from other

funds.” Any residual balances outstanding between the governmental activities and business‐type activities

are reported in the government wide financial statements as “internal balances.”

J. Inventories

All inventories are valued at average cost using the first‐in/first‐out (FIFO) method. Inventories of

governmental funds are recorded as expenditures when consumed rather than when purchased.

Inventories of the enterprise funds are recorded as expenses when consumed rather than when purchased.

K. Prepaid Items

Payments made to vendors for services that will benefit periods beyond June 30, 2018, are recorded as

prepaid items in both government‐wide and fund financial statements.

36



L. Capital Assets

Capital assets, which include property, plant, equipment, infrastructure assets (e.g., roads, bridges,

sidewalks, and similar items), and intangible assets are reported in the applicable governmental or business‐

type activities column in the government‐wide financial statements. Capital assets are defined by the City

as assets with an initial estimated useful life in excess of two years and individual cost capitalization

thresholds as follows: land of more than $1, infrastructure of more than $100,000; building and land

improvements of greater than $25,000; and equipment of more than $5,000. Such assets are recorded at

historical cost or estimated historical cost if purchased or constructed. Donated capital assets received prior

to June 30, 2015 are recorded at their estimated fair value at the date of donation. Donated capital assets

received after June 30, 2015 are recorded at acquisition value. The cost of normal maintenance and repairs

that do not add to the value of the asset or materially extend asset lives are not capitalized.

Capital assets of the City are depreciated using the straight line method over the following estimated useful

lives:

Buildings 25‐60 yearsImprovements 20‐50 yearsInfrastructure 30‐50 yearsPlants and distribution systems 30‐50 yearsVehicles and service equipment 3‐10 yearsFurniture and equipment 5‐10 years

M. Deferred Outflows/Inflows of Resources

In addition to assets, the statement of net position will sometimes report a separate section for deferred

outflows of resources. This separate financial statement element, deferred outflow of resources, represents

a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow

of resources (expense) until then. The City reports several deferred outflows related to the pension plans

and total other postemployment benefit (OPEB) liability; one type of deferred outflow of resources being

recognized is a deferred outflow of resources for the City’s actual contributions to the pension plan and

OPEB plan during the fiscal year ended June 30, 2018, which was subsequent to the measurement date of

the net pension liability and total OPEB liability. The deferred outflows will be applied to future

measurement periods. The City has four (4) items that qualify for reporting in this category which occurs in

the governmental activities and in the individual proprietary funds. The City reports deferred outflows of

resources for the: (1) difference between expected and actual experience of the pension plan and OPEB

plan, (2) net difference between projected and actual investment earnings on the pension plan assets, (3)

changes in proportion and the difference between the City’s actual contributions towards the pension plan

and the City’s proportionate share of contributions, and (4) changes in the plan assumptions. The net

difference between projected and actual investment earnings on the pension plan assets are amortized over

five (5) years, while the remaining deferred outflows of resources will be amortized over the remaining

service period of plan members.

37



M. Deferred Outflows/Inflows of Resources (Continued)

In addition to liabilities, the statement of net 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 position that applies to future period(s) and so will not be recognized as an inflow of

resources (revenue) until that time. The City has two (2) items that qualify for reporting in this category

which occurs in the governmental activities and in the individual proprietary funds. The City reports a

deferred inflow of resources for the: (1) difference between expected and actual experience of the pension

plan, (2) the difference between the City’s actual contributions towards the pension plan and the City’s

proportionate share of contributions, and (3) changes in the assumptions and other inputs of the pension

plan and OPEB plan. The deferred inflows of resources will be amortized over the remaining service period

of plan members. Additionally, the City reports one (1) item which is reported as a deferred inflow of

resources which arises only under a modified accrual basis of accounting. Accordingly, the item, unavailable

revenue, is reported only in the governmental funds balance sheet. The governmental funds report

unavailable revenues from the accrual of ad valorem taxes and intergovernmental revenues which are

earned by the City but are not considered available for the liquidation of current expenditures. Additionally,

deferred inflows of resources are reported for outstanding lien receivables which are not collected within 90

days of the City’s fiscal year‐end.

N. Compensated Absences

The vacation policy of the City provides for the accumulation of up to thirty days earned vacation leave with

such leave being fully vested when earned. For the City's government‐wide and proprietary funds, an

expense and a liability for compensated absences and the salary‐related payments are recorded as the leave

is earned. The City has assumed a first‐in, first‐out method of using accumulated compensated time. The

portion of that time that is estimated to be used in the next fiscal year has been designated as a current

liability in the government‐wide financial statements. A liability for these amounts is reported in the

governmental funds only if they have matured, for example, as a result of employee resignations and

retirements.

The City's sick leave policy provides for an unlimited accumulation of earned sick leave. Sick leave does not

vest, but any unused sick leave accumulated at the time of retirement may be used in the determination of

length of service for retirement benefit purposes. Since the City does not have any obligation for the

accumulated sick leave until it is actually taken, no accrual for sick leave has been made.

38



O. Long‐Term Obligations

In the government‐wide and proprietary fund financial statements, 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. Bond premiums and discounts are accrued and amortized

over the term of the bonds using the effective interest method. Bonds payable are reported net of the

applicable discount or premium. Bond issuance costs are expensed in the year of issuance.

In the governmental fund financial statements, governmental fund types recognize bond premiums and

discounts during the current period. The face amount of the debt issued is reported as other financing

sources. Premiums received on debt issuances are reported as other financing sources while discounts on

debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the

actual debt proceeds received, are reported as debt service expenditures.

P. Fund Equity

Fund equity at the governmental fund financial reporting level is classified as “fund balance.” Fund equity

for all other reporting is classified as “net position.”

Fund Balance – Generally, fund balance represents the difference between the assets and liabilities and

deferred inflows of resources under the current financial resources management focus of accounting. In the

fund financial statements, governmental funds report fund balance classifications that comprise a hierarchy

based primarily on the extent to which the City is bound to honor constraints on the specific purpose for

which amounts in those funds can be spent.

Fund balances are classified as follows:

Nonspendable – Fund balances are reported as nonspendable when amounts cannot be spent because

they are either: (a) not in spendable form (i.e., items that are not expected to be converted to cash), or

(b) legally or contractually required to be maintained intact.

Restricted – Fund balances are reported as restricted when there are limitations imposed on their use

through external restrictions imposed by creditors, grantors, laws or regulations of other governments.

One component of the restricted fund balance of the funds relate to the Stabilization by State Statute

(G.S. 159‐8(a)) which requires total fund balance less the fund balance available for appropriation

equals the total amount that must be restricted.

39



P. Fund Equity (Continued)

Committed – Fund balances are reported as committed when they can be used only for specific

purposes pursuant to constraints imposed by the City’s Board of Aldermen. Approval of a resolution

after a formal vote of the City’s Board is required to establish a commitment of fund balance. Similarly,

the City’s Board may only modify or rescind the commitment by formal vote and adoption of a

subsequent resolution.

Assigned – Fund balances are reported as assigned when amounts are constrained by the City’s intent

to be used for specific purposes, but are neither restricted nor committed. The City’s Board of

Aldermen, through officially adopted budget ordinances, has expressly delegated limited authority to

the City Manager and Finance Officer, to assign funds.

Unassigned – Fund balances are reported as unassigned as the residual amount when the balances do

not meet any of the above criterion. The City reports positive unassigned fund balance only in the

general fund. Additionally, any fund balance deficits in other governmental funds are reported as

unassigned.

Flow Assumptions – When both restricted and unrestricted amounts of fund balance are available for use

for expenditures incurred, it is the City’s policy to use restricted amounts first and then unrestricted

amounts as they are needed. For unrestricted amounts of fund balance, it is the City’s policy to use fund

balance in the following order: (1) Committed, (2) Assigned, and (3) Unassigned.

Net Position – Net position represents the difference between assets and deferred outflows of resources

and liabilities and deferred inflows of resources, in reporting which utilizes the economic resources

measurement focus. Net investment in capital assets consists of capital assets, net of accumulated

depreciation, reduced by the outstanding balances of any borrowing used (i.e., the amount that the City has

spent) for the acquisition, construction or improvement of those assets.

Net position is reported as restricted using the same definition as used for restricted fund balance as

described in the section above. All other net position is reported as unrestricted.

The City applies restricted resources first when an expense is incurred for purposes for which both restricted

and unrestricted net position is available.

40



Q. Pensions

For purposes of measuring the net pension liability (asset), deferred outflows of resources and deferred

inflows of resources related to pensions, and pension expense, information about the fiduciary net position

of the Local Governmental Employees’ Retirement System (LGERS) and additions to/deductions from LGERS’

fiduciary net position have been determined on the same basis as they are reported by LGERS. For this

purpose, benefit payments (including refunds of employee contributions) are recognized when due and

payable in accordance with the benefit terms. Investments are reported at fair value.

R. Management Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the

United States of America requires management to make estimates and assumptions that affect the reported

amounts of assets, deferred outflows of resources, deferred inflows of resources, and liabilities, the

disclosure of contingent assets and liabilities at the date of the financial statements, and the reported

amounts of revenues and expenses during the reporting period. Actual results could differ from those

estimates.

NOTE 2. RECONCILIATION OF GOVERNMENT‐WIDE FINANCIAL STATEMENTS AND FUND FINANCIAL STATEMENTS

A. Explanation of Certain Differences Between the Governmental Fund Balance

Sheet and the Government‐wide Statement of Net Position

The governmental fund balance sheet includes a reconciliation between fund balance – total governmental

funds and net position – governmental activities as reported in the government‐wide statement of net

position. One element of that reconciliation explains that “long‐term liabilities are not due and payable in

the current period and therefore are not reported in the funds.” The details of this $10,092,826 difference

are as follows:

Installment notes $ (8,627,381)

Accrued interest payable (24,771)

Compensated absences (i.e., vacation) (1,440,674)

Net adjustment to reduce fund balance ‐ total governmental funds to arrive at

net position ‐ governmental activities $ (10,092,826)

41


NOTE 2. RECONCILIATION OF GOVERNMENT‐WIDE FINANCIAL STATEMENTS AND FUND

FINANCIAL STATEMENTS (CONTINUED)

B. Explanation of Certain Differences Between the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances and the Government‐wide Statement of Activities

The governmental fund statement of revenues, expenditures, and changes in fund balances includes a

reconciliation between net change in fund balances – total governmental funds and changes in net position

of governmental activities as reported in the government‐wide statement of activities. One element of that

reconciliation explainsp that “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.” The details of this $1,265,470 difference are as follows:

Capital outlay $ 2,417,155

Depreciation expense (3,682,625)

Net adjustment to decrease net change in fund balances ‐ total governmental

funds to arrive at change in net position ‐ governmental activities $ (1,265,470)

The “net effect of various miscellaneous transactions involving capital assets (i.e., donations, sales and

transfers of assets to enterprise funds) is to increase net position.” The details of this $2,895,859 difference

are as follows:

Donated capital assets $ 3,010,020

Disposal of capital assets (114,161)

Net adjustment to increase net change in fund balances ‐ total governmental funds

to arrive at change in net position ‐ governmental activities $ 2,895,859

42


NOTE 2. RECONCILIATION OF GOVERNMENT‐WIDE FINANCIAL STATEMENTS AND FUND

FINANCIAL STATEMENTS (CONTINUED)

B. Explanation of Certain Differences Between the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances and the Government‐wide Statement of Activities (Continued)

Another element of the reconciliation states that “the issuance of long‐term debt 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. This amount is the net effect of these differences in the treatment of long‐term debt and related

items.” The details of this $588,755 difference are as follows:

Payments on long‐term liabilities $ 1,988,779

Issuance of installment notes payable (2,577,534)


funds to arrive at change in net position ‐ governmental activities $ (588,755)

Another element of the reconciliation states that “some expenses reported in the statement of activities do

not require the use of current financial resources and, therefore, are not reported as expenditures in

governmental funds.” The details of this $1,313,682 difference are as follows:

Compensated absences (i.e., vacation) $ (38,014)

Change in accrued interest 3,553

Change in net pension liability and related deferred inflows / outflows

of resources ‐ LGERS (30,432)

Change in total pension liability and related deferred inflows / outflows

of resources ‐ LEO SSA (25,655)

Change in total OPEB liability (1,223,134)


funds to arrive at change in net position ‐ governmental activities $ (1,313,682)

43


NOTE 3. STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY

Expenditures in Excess of Appropriations. The budget is officially adopted by the governing body prior to

the beginning of its fiscal year, or a resolution authorizing the continuation of necessary and essential

expenditures to operate the City will be adopted. The legal level of budgetary control (i.e., the level at

which expenditures may not legally exceed appropriations) is the department level, within the fund.

Transfers of appropriations within a department budget or within a non‐departmental expenditure category

require only the approval of the City Manager and/or Finance Officer. Increases in appropriations in a

departmental budget or in a non‐departmental expenditure category, require approval of the governing

body in the form of amendments to the budget ordinance.

The General Fund’s ‐ general government function ‐ Administration was over budget by $610,749. The

overage resulted from the unbudgeted retiree costs from the health insurance plan. These costs were

funded with budget savings in other departments of the General Fund.

Deficit Fund Balance. The following funds are reporting deficit fund balances as of June 30, 2018:

Fund Deficit Corrective Action

Entitlement Cities CDBG Program (6,811) Recognition of unavailable intergovernmental

revenues.

Remainder of the page intentionally left blank

44


NOTE 4. DEPOSITS AND INVESTMENTS

Total deposits as of June 30, 2018 are summarized as follows:

Statement of Net Position:Cash and cash equivalents $ 58,874,987 Restricted cash and cash equivalents 7,522,840

$ 66,397,827

Cash deposited with financial institution $ 5,565,777 Cash deposited with NCCMT 60,824,450 Petty cash 7,600

$ 66,397,827

Credit risk. State statutes and the City’s policies authorize the City to invest in obligations of the state of

North Carolina or other states; obligations issued by the U.S. government; obligations fully insured or

guaranteed by the U.S. government or by a government agency of the United States; obligations of any

corporation of the U.S. government; prime bankers' acceptances; the North Carolina Capital Management

Trust (NCCMT); and obligations of other political subdivisions of the state of North Carolina. The City does

not have a credit rating policy which provides restrictions or limitations on credit ratings for the City’s

investments.

As of June 30, 2018 the City’s investment balances were as follows:

ValuationMeasurement Book Value

Investment by Type Method June 30, 2018 Maturity RatingNorth Carolina Capital Management Trust Government Cash Portfolio Amortized Cost 35,524,765$ None AAAmNorth Carolina Capital Management Trust Term Portfolio Fair Value Level 1 25,299,685 .09 years Unrated

60,824,450$

The City considers amounts invested in the NCCMT to be cash equivalents for financial reporting purposes.

45


NOTE 4. DEPOSITS AND INVESTMENTS (CONTINUED)

Fair Value Measurement: The investment in the NCCMT term portfolio is measured using the market

approach: using prices and other relevant information generated by market transactions involving identical

or comparable assets or a group of assets. Level of fair value hierarchy: Level 1: securities valued using

directly observable, quoted prices (unadjusted) in active markets for identical assets. The NCCMT’s

government cash portfolio is valued using amortized costs. The NCCMT’s Term Portfolio is valued using the

estimated fair value through hierarchy level 1 measurement markets.

Interest rate risk: The City does not have a formal investment policy that limits investment maturities as a

means of managing its exposure to fair value losses arising from increasing interest rates.

Custodial credit risk – deposits: Custodial credit risk for deposits is the risk that, in the event of the failure

of a depository financial institution, a government will not be able to recover deposits or will not be able to

recover collateral securities that are in the possession of an outside party. State statutes (G.S. 159‐31)

require all deposits and investments (other than federal or state government instruments) to be

collateralized by depository insurance, obligations of the U.S. government, or bonds of public authorities,

counties, or municipalities. As of June 30, 2018, the City’s deposits are insured or collateralized as required

by state law.

NOTE 5. RECEIVABLES

Receivables at June 30, 2018, for the City’s individual major funds and aggregate nonmajor funds, including

any applicable allowances for uncollectible accounts are as follows:

Receivables:Taxes $ 462,364 $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ Notes 157,958 ‐ ‐ ‐ ‐ ‐ Accounts 3,662,719 7,053,056 1,198,648 1,380,706 68,123 32,309 Due from othergovernments 793,350 ‐ ‐ ‐ ‐ 96,642

Less allowancefor uncollectible (383,633) (170,692) (76,868) (147,451) (8,269) ‐

Net Receivables $ 4,692,758 $ 6,882,364 $ 1,121,780 $ 1,233,255 $ 59,854 $ 128,951

OtherGeneral Electric Water Sewer Stormwater Governmental

46


NOTE 6. CAPITAL ASSETS

Capital asset activity for the City for the year ended June 30, 2018 is as follows:

Beginning Ending

Balance Increases Decreases Transfers Balance

Governmental Activities:

Nondepreciable capital assets:

Land $ 16,026,625 $ 1,757,417 $ (42,161) $ 942,283 $ 18,684,164

Construction in progress 1,684,943 1,070,092 ‐ (1,597,244) 1,157,791

Total 17,711,568 2,827,509 (42,161) (654,961) 19,841,955

Capital assets, being depreciated:

Buildings and improvements 16,108,045 69,643 ‐ ‐ 16,177,688

Equipment 10,991,913 491,913 (432,820) 45,654 11,096,660

Furniture and fixtures 5,827,478 94,567 ‐ 66,228 5,988,273

Transformers 70,275 ‐ ‐ ‐ 70,275

Infrastructure 30,972,151 1,402,472 ‐ ‐ 32,374,623

Vehicles 9,130,499 541,071 (480,343) 543,079 9,734,306

Total being depreciated 73,100,361 2,599,666 (913,163) 654,961 75,441,825

Less accumulated depreciation for:

Buildings and improvements (6,319,302) (414,653) ‐ ‐ (6,733,955)

Equipment (6,707,405) (671,809) 432,820 ‐ (6,946,394)

Furniture and fixtures (4,670,253) (476,324) ‐ ‐ (5,146,577)

Transformers (35,137) (2,811) ‐ ‐ (37,948)

Infrastructure (8,725,149) (1,170,825) ‐ ‐ (9,895,974)

Vehicles (6,447,488) (946,203) 408,343 ‐ (6,985,348)

Total (32,904,734) (3,682,625) 841,163 ‐ (35,746,196)

Total capital assets, being

depreciated, net 40,195,627 (1,082,959) (72,000) 654,961 39,695,629

Governmental activities capital

assets, net $ 57,907,195 $ 1,744,550 $ (114,161) $ ‐ $ 59,537,584

47


NOTE 6. CAPITAL ASSETS (CONTINUED)

Beginning EndingBalance Increases Decreases Transfers Balance

Electric Fund:

Nondepreciable capital assets:Land $ 1,211,987 $ ‐ $ ‐ $ ‐ $ 1,211,987 Construction in progress 5,167,549 1,629,852 ‐ (304,492) 6,492,909

Total 6,379,536 1,629,852 ‐ (304,492) 7,704,896

Capital assets, being depreciated:Buildings 5,485,205 ‐ ‐ ‐ 5,485,205 Equipment 8,281,521 238,359 (82,100) 65,166 8,502,946 Furniture and fixtures 221,022 42,335 ‐ ‐ 263,357 Transformers 4,535,901 31,543 ‐ ‐ 4,567,444 Distribution systems 48,691,503 1,527,094 ‐ 175,063 50,393,660 Vehicles 2,994,548 321,204 (163,045) 64,263 3,216,970

Total 70,209,700 2,160,535 (245,145) 304,492 72,429,582

Less accumulated depreciation for:Buildings (809,156) (177,805) ‐ ‐ (986,961) Equipment (5,163,646) (386,638) 82,100 ‐ (5,468,184) Furniture and fixtures (98,299) (45,810) ‐ ‐ (144,109) Transformers (3,437,854) (79,055) ‐ ‐ (3,516,909) Distribution systems (30,391,036) (1,439,651) ‐ ‐ (31,830,687) Vehicles (2,249,940) (206,131) 163,045 ‐ (2,293,026)

Total (42,149,931) (2,335,090) 245,145 ‐ (44,239,876)

Total capital assets beingdepreciated, net 28,059,769 (174,555) ‐ 304,492 28,189,706

Electric Fund capital assets, net $ 34,439,305 $ 1,455,297 $ ‐ $ ‐ $ 35,894,602

48



Beginning EndingBalance Increases Decreases Balance

Water Fund:

Nondepreciable capital assets:Land $ 852,479 $ ‐ $ ‐ $ 852,479 Construction in progress 3,683,396 2,662,113 ‐ 6,345,509

Total 4,535,875 2,662,113 ‐ 7,197,988

Capital assets, being depreciated:Buildings 34,192,669 ‐ ‐ 34,192,669 Equipment 2,111,775 33,491 (6,789) 2,138,477 Furniture and fixtures 7,731 ‐ ‐ 7,731 Distribution systems 23,500,528 ‐ ‐ 23,500,528 Vehicles 888,874 ‐ ‐ 888,874

Total 60,701,577 33,491 (6,789) 60,728,279

Less accumulated depreciation for:Buildings (5,373,169) (859,045) ‐ (6,232,214) Equipment (1,537,033) (96,189) 6,789 (1,626,433) Furniture and fixtures (7,731) ‐ ‐ (7,731) Distribution systems (9,430,178) (515,167) ‐ (9,945,345) Vehicles (627,316) (99,926) ‐ (727,242)

Total (16,975,427) (1,570,327) 6,789 (18,538,965)

Total capital assets beingdepreciated, net 43,726,150 (1,536,836) ‐ 42,189,314

Water Fund capital assets, net $ 48,262,025 $ 1,125,277 $ ‐ $ 49,387,302

49



Beginning EndingBalance Increases Decreases Transfers Balance

Sewer Fund:

Nondepreciable capital assets:Land $ 12,389,511 $ ‐ $ ‐ $ ‐ $ 12,389,511 Construction in progress 1,087,023 1,658,086 ‐ (645,572) 2,099,537

Total 13,476,534 1,658,086 ‐ (645,572) 14,489,048

Capital assets, being depreciated:Buildings 39,429,375 41,318 ‐ ‐ 39,470,693 Equipment 3,914,310 74,114 (5,200) ‐ 3,983,224 Furniture and fixtures 48,820 ‐ ‐ 40,219 89,039 Distribution systems 37,223,499 ‐ ‐ 605,353 37,828,852 Vehicles 1,447,927 426,503 (90,639) ‐ 1,783,791

Total 82,063,931 541,935 (95,839) 645,572 83,155,599

Less accumulated depreciation for:Buildings (17,918,608) (973,516) ‐ ‐ (18,892,124) Equipment (2,469,601) (186,162) 4,969 ‐ (2,650,794) Furniture and fixtures (45,640) (7,096) ‐ ‐ (52,736) Distribution systems (9,764,810) (769,222) ‐ ‐ (10,534,032) Vehicles (1,248,717) (113,780) 90,639 ‐ (1,271,858)

Total (31,447,376) (2,049,776) 95,608 ‐ (33,401,544)

Total capital assets beingdepreciated, net 50,616,555 (1,507,841) (231) 645,572 49,754,055

Water Fund capital assets, net $ 64,093,089 $ 150,245 $ (231) $ ‐ $ 64,243,103

50



Beginning EndingBalance Increases Decreases Balance

Stormwater Fund:

Nondepreciable capital assetsConstruction in progress $ ‐ $ 312,343 $ ‐ $ 312,343

Total ‐ 312,343 ‐ 312,343

Capital assets, being depreciated:Lines 2,021,834 ‐ ‐ 2,021,834 Equipment 78,730 ‐ ‐ 78,730 Vehicles 68,710 394,433 ‐ 463,143

Total 2,169,274 394,433 ‐ 2,563,707

Less accumulated depreciation for:Lines (195,842) (50,546) ‐ (246,388) Equipment (14,095) (7,677) ‐ (21,772) Vehicles (43,272) (20,316) ‐ (63,588)

Total (253,209) (78,539) ‐ (331,748)

Total assets being depreciated, net 1,916,065 315,894 ‐ 2,231,959

Stormwater Fund capital assets, net $ 1,916,065 $ 628,237 $ ‐ $ 2,544,302

Depreciation expense was charged to functions/programs of the City as follows:

Governmental activi ties :

General government $ 353,578

Publ ic safety 1,774,913

Publ ic works 1,046,087

Environmental protection 104,733

Culture and recreation 403,314

Total depreciation expense ‐ governmental activi ties $ 3,682,625

Bus iness‐type activi ties

Electric $ 2,335,090

Water 1,570,327

Sewer 2,049,776

Stormwater 78,539

Total depreciation expense ‐ business‐type activi ties $ 6,033,732

51


NOTE 7. LONG‐TERM DEBT

Long‐term liability activity for the year ended June 30, 2018 is as follows:

Beginning

Balance Ending Due Within

Restated Additions Reductions Balance One Year

Governmental activities:

Installment notes $ 8,038,626 $ 2,577,534 $ (1,988,779) $ 8,627,381 $ 1,929,725

Compensated absences 1,402,660 572,674 (534,660) 1,440,674 1,152,539

Net pension liability 4,898,747 1,524,977 (2,950,003) 3,473,721 ‐

Law enforcement officers'

SSA total pension liability 2,632,626 350,913 (215,835) 2,767,704 ‐

Total OPEB liability 33,334,776 2,567,933 (4,241,923) 31,660,786 ‐

Governmental activity

Long‐term liabilities $ 50,307,435 $ 7,594,031 $ (9,931,200) $ 47,970,266 $ 3,082,264

Business‐type activities:Notes payable $ 29,447,558 $ ‐ $ (2,862,184) $ 26,585,374 $ 2,890,821 Installment purchase 5,107,437 242,466 (1,490,857) 3,859,046 915,631 Revenue bonds payable 18,662,107 ‐ (2,591,325) 16,070,782 2,636,249 Net pension liability 2,351,998 614,970 (1,362,538) 1,604,430 ‐ Compensated absences 576,744 215,179 (206,469) 585,454 468,363 Business‐type activityLong‐term liabilities $ 56,145,844 $ 1,072,615 $ (8,513,373) $ 48,705,086 $ 6,911,064

For governmental activities, compensated absences are liquidated by the General Fund. The LGERS net

pension liability, law enforcement officers’ SSA total pension liability, and total OPEB liabilities are liquidated

by the General Fund. As discussed further in Notes 10 and 14, the beginning balance of the total OPEB

liability has been restated due to the implementation of GASB Statement No. 75, as of July 1, 2017.

Installment Notes Payable

The City has various installment notes outstanding for buildings, equipment, and vehicle financing

arrangements. The outstanding balances on the following page for the notes as of June 30, 2018 are as

follows:

52


NOTE 7. LONG‐TERM DEBT (CONTINUED)

Installment Notes Payable (Continued)

Balance as of Governmental activities June 30, 2018

1,680,028$

794,940

310,210

331,583

580,086

460,130

549,033

655,837

688,000

2,320,000

257,534

Total outstanding installment notes payable 8,627,381$

A note issued by PNC Bank for $2,320,000 was issued in June 2018 with semi‐annual

payments of $166,000 (fixed principal) for city‐wide drainage improvements. The note bears

an interest rate of 3.34% and matures in 2028.

A note issued by First Citizens Bank for $257,534 was issued in June 2018 with varying semi‐

annual payments for the purchase of various vehicles and equipment. The note bears an

interest rate of 3.22% and matures in 2023.

A note issued by BB&T for $800,000 was issued in October 2016 with semi‐annual payments

of $33,333 (fixed principal) for the improvements to the City's streets. The note bears an

interest rate of 2.00% and matures in 2029.

A note issued by First Citizens Bank & Trust for $860,000 was issued in June 2017 with semi‐

annual payments of $86,000 (fixed principal) for the purchase various vehicles and

equipment. The note bears an interest rate of 1.90% and matures in 2022.

A note issued by BB&T Bank for $1,213,040 was issued in June 2015 with semi‐annual

payments of $121,304 for various vehicle acquisitions. The note bears an interest rate of

1.49% and matures in 2020.

A note issued by First Citizens Bank for $1,117,000 was issued in December 2015 with

varying annual payments for the purchase various vehicles and equipment. The note bears


A note issued by BB&T for $5,754,455 was issued in May 2008 with quarterly payments of

$84,001 for aquatic center and swimming pool construction, downtown streetscape

projects, and Elizabeth Avenue fire station improvements. The note bears an interest rate of


A note issued by BB&T for $3,485,500 was issued in June 2012 with varying semi‐annual

payments for the purchase and installation of radio network. The note bears an interest

rate of 2.04% and matures in 2022.

A note issued by BB&T for $465,315 was issued in May 2013 with semi‐annual payments of

$15,510 for South Front Street streetscape improvements. The note bears an interest rate

of 2.54% and matures in 2028.

A note issued by BB&T for $1,740,891 was issued in February 2014 with semi‐annual

payments of $174,089 for various vehicle acquisitions. The note bears an interest rate of


A note issued by SunTrust Bank for $756,633 was issued in July 2014 with semi‐annual

payments of $25,221 for the purchase of a fire truck. The note bears an interest rate of


53



Installment Notes Payable (Continued) The debt service to maturity on the installment notes payable is as follows:

Principal Interest TotalYear Ending June 30,2019 1,929,725$ 207,160$ 2,136,885$ 2020 1,580,548 169,468 1,750,016 2021 1,239,525 133,694 1,373,219 2022 1,144,472 102,744 1,247,216 2023 767,630 74,372 842,002 2024‐2028 1,889,819 165,289 2,055,108 2029‐2030 75,662 2,164 77,826 Total 8,627,381$ 854,891$ 9,482,272$

Balance as of

Business‐type activities June 30, 2018

917,983

684,655

191,969

84,425

246,535

1,491,013

242,466

Total outstanding installment notes payable 3,859,046$

A note issued by BB&T for $1,863,767 was issued in January 2016 with semi‐annual

payments of $93,189 for the refinancing of the Kale Road property note. The note

bears an interest rate of 2.25% and matures in 2026.

A note issued by First Citizens Bank for $242,466 was issued in June 2018 with varying

semi‐annual payments for the purchase of various vehicles and equipment. The note


A note issued by BB&T for $7,598,900 was issued in May 2008 with varying semi‐

annual payments for the downtown util ity improvements. The note bears an interest

rate of 2.92% and matures in 2023.

A note issued by BB&T for $1,162,878 was issued in June 2012 with varying semi‐

annual payments for the purchase and installation of the radio network. The note


A note issued by BB&T for $992,880 was issued in February 2014 with semi‐annual

payments of $99,288 for the purchase of various pieces of equipment and vehicles.

The note bears an interest rate of 1.39% and matures in 2019.

A note issued by BB&T for $222,569 was issued in June 2015 with varying varyin semi‐

annual payments for the purchase of equipment for the Electric Fund. The note bears


A note issued by First Citizens Bank for $488,000 was issued in December 2015 with

varyin semi‐annual payments for the purchase of vehicles and equipment. The note


54



Installment Notes Payable (Continued)

The debt service to maturity on the installment notes payable is as follows:

Principal Interest Total

Year Ending June 30,2019 915,631$ 81,096$ 996,727$ 2020 726,732 63,600 790,332 2021 635,764 47,693 683,457 2022 597,630 33,248 630,878 2023 424,159 19,911 444,070 2024‐2026 559,130 22,016 581,146 Total 3,859,046$ 267,564$ 4,126,610$

Notes Payable

The City has various note payable agreements with the State outstanding for water and sewer distribution

expansion and improvement projects. The outstanding balances for the notes as of June 30, 2018 are as

follows:

Balance as of

Business‐type activities June 30, 2018

6,015,964$

405,435

20,163,975

Total outstanding notes payable 26,585,374$

A note issued by North Carolina Department of Environment and Natural Resources for $20,110,036

was issued in February 2003 with variable semi‐annual payments for a wastewater treatment plant

expansion. The note bears an interest rate of 2.57% and matures in 2023.


was issued in July 2010 with variable semi‐annual payments of $1,680,331 for water treatment plant



was issued in March 2003 with variable semi‐annual payments for wastewater treatment plant


55



Notes Payable (Continued)

The debt service to maturity on the notes payable is as follows:


Year Ending June 30,2019 2,890,821$ 622,109$ 3,512,930$ 2020 2,920,194 552,879 3,473,073 2021 2,950,322 482,894 3,433,216 2022 2,981,224 412,135 3,393,359 2023 3,012,921 340,582 3,353,503 2024‐2028 8,469,228 953,285 9,422,513 2029‐2030 3,360,664 114,179 3,474,843 Total 26,585,374$ 3,478,063$ 30,063,437$

Revenue Bonds

In June 2013, the City issued $17,180,000 of Utility Revenue Bonds for water, sewer, and electric system

improvements and expansion and refunding of installment notes payable. Semi‐annual payments of

$930,882 are due on December 1 and June 1. The bonds bear an interest rate of 1.56%. At June 30, 2018,

$10,624,264 of the bonds were outstanding. The bonds mature in 2023. The City has pledged future water,

sewer, and electric revenues, net of specified operating expenses to repay these bonds.

In December 2014, the City issued $3,830,000 of Utility Revenue Bonds for acquisition and construction of a

warehouse, AMI, and other improvements at Kale Road. Semi‐annual payments of $213,847 are due on

December 1 and June 1. The bonds bear an interest rate of 2.15%. At June 30, 2018, $2,947,865 of the

bonds were outstanding. The bonds mature in 2025. The City has pledged future water, sewer, and electric

revenues, net of specified operating expenses to repay these bonds.

In May 2016, the City issued $5,600,000 of Utility Revenue Bonds for water and electric AMI expansion.

Semiannual payments of $310,082 due on December 1 and June 1. The bonds bear an interest rate of

1.97%. At June 30, 2018, $5,089,978 of the bonds were outstanding. The bonds mature in 2026. The City

has pledged future water and electric revenues, net of specified operating expenses to repay these bonds.

56



Revenue Bonds (Continued)

The debt service to maturity on the revenue bonds is as follows:


Year Ending June 30,

2019 2,636,249$ 260,262$ 2,896,511$

2020 2,681,967 214,338 2,896,305

2021 2,728,492 167,604 2,896,096

2022 2,775,840 120,044 2,895,884

2023 2,824,025 75,159 2,899,184

2024‐2026 2,424,209 77,820 2,502,029

Tota l 16,070,782$ 915,227$ 16,986,009$

The City is in compliance with the covenants as to rates, fees, rentals and charges in Section 704 and Section

711 of the Bond Order, authorizing the issuance of the Electric, Water and Sewer Revenue Bonds, Series

2013, Series 2014, and Series 2016, secured solely by the pledge of net revenue of the City’s combined

enterprise funds (Electric, Water and Sewer). Pursuant to Section 704(a) of the Bond and related

agreements, the City has made certain covenants that provide for rates to be set at levels to provide

annually to maintain a debt service coverage ratio of 120% (1.20) for parity indebtedness and 100% (1.0) for

parity and subordinated indebtedness. In addition, pursuant to Section 711 of the Bond agreement, the

principal amount of installment debt (liens) cannot exceed 15% of net investment in capital assets. The debt

service coverage requirements for the year ended June 30, 2018, are as follows: RevenuesUser charges $ 75,668,780 Interest earnings 273,406

Operating expenses (less depreciation) (58,054,193) Income available for debt service 17,887,993

Plus 15% of unrestricted net position 6,086,860 Total income available for debt service $ 23,974,853

Annual debt service (Revenue Bonds only) $ 2,909,620 Debt service coverage for parity 8.24

Income available for debt service $ 17,887,993 Annual debt service (parity and subordinated debt) 6,462,408

Debt service coverage for parity and subordinated debt 2.77

Total installment debt outstanding $ 3,524,598 Net investment in capital assets 103,458,717

Lien covenant calculation 3.41%

Per loan covenants, operating expenses do not include depreciation expense.

57


NOTE 8. INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS

The composition of interfund balances as of June 30, 2018 is as follows:

Due to/from other funds:

Receivable Fund Payable Fund

General Fund Nonmajor governmental funds $ 545,875

Amount

The nonmajor funds owe the General Fund for temporary cash shortages in the pooled cash account being

covered by the General Fund.

Interfund transfers:

Transfers In Transfers Out

General Fund Electric Fund $ 2,765,412 General Fund Water Fund 56,535 General Fund Sewer Fund 45,859 General Fund Nonmajor ‐ Stormwater Fund 6,425 General Fund Nonmajor governmental funds 51,548

$ 2,925,779

Nonmajor governmental funds General Fund $ 1,178,144 Nonmajor governmental funds Nonmajor governmental funds 54,844

$ 1,232,988

Amount

Transfers are used to move revenues from the fund that statute or budget requires to collect them to the fund that statute or budget requires to expend them. Transfers are also moved from unrestricted enterprise operations to offset operational costs in the General Fund.

NOTE 9. PENSION PLANS

The City reports two different defined benefit plans, which each have respective deferred outflows and inflows of resources. The table below summarizes the deferred outflows and inflows of resources to the statement of net position:

Deferred Outflow

of Resources

Deferred Inflow of

Resources

Local Governmental Employees' Retirement System 3,929,544$ 381,379$

Law Enforcement Officers' Special Separation Allowance 225,783 77,530

Total 4,155,327$ 458,909$

58


NOTE 9. PENSION PLANS (Continued)

A. Local Governmental Employees’ Retirement System

Plan Description. The City of New Bern is a participating employer in the statewide Local Governmental

Employees’ Retirement System (LGERS), a cost‐sharing multiple‐employer defined benefit pension plan

administered by the State of North Carolina. LGERS membership is comprised of general employees and

local law enforcement officers (LEOs) of participating local governmental entities. Article 3 of G.S. Chapter

128 assigns the authority to establish and amend benefit provisions to the North Carolina General Assembly.

Management of the plan is vested in the LGERS Board of Trustees, which consists of 13 members – nine

appointed by the Governor, one appointed by the State Senate, one appointed by the State House of

Representatives, and the State Treasurer and State Superintendent, who serve as ex‐officio members. The

Local Governmental Employees’ Retirement System is included in the Comprehensive Annual Financial

Report (CAFR) for the State of North Carolina. The State’s CAFR includes financial statements and required

supplementary information for LGERS. That report may be obtained by writing to the Office of the State

Controller, 1410 Mail Service Center, Raleigh, North Carolina 27699‐1410, by calling (919) 981‐5454, or at

www.osc.nc.gov.

Benefits Provided. LGERS provides retirement and survivor benefits. Retirement benefits are determined

as 1.85% of the member’s average final compensation times the member’s years of creditable service. A

member’s average final compensation is calculated as the average of a member’s four highest consecutive

years of compensation. Plan members are eligible to retire with full retirement benefits at age 65 with five

years of creditable service, at age 60 with 25 years of creditable service, or at any age with 30 years of

creditable service. Plan members are eligible to retire with partial retirement benefits at age 50 with 20

years of creditable service or at age 60 with five years of creditable service (age 55 for firefighters). Survivor

benefits are available to eligible beneficiaries of members who die while in active service or within 180 days

of their last day of service and who have either completed 20 years of creditable service regardless of age

(15 years of creditable service for firefighters and rescue squad members who are killed in the line of duty)

or have completed five years of service and have reached age 60. Eligible beneficiaries may elect to receive

a monthly Survivor’s Alternate Benefit for life or a return of the member’s contributions. The plan does not

provide for automatic postretirement benefit increases. Increases are contingent upon actuarial gains of

the plan.

LGERS plan members who are LEOs are eligible to retire with full retirement benefits at age 55 with five

years of creditable service as an officer, or at any age with 30 years of creditable service. LEO plan members

are eligible to retire with partial retirement benefits at age 50 with 15 years of creditable service as an

officer. Survivor benefits are available to eligible beneficiaries of LEO members who die while in active

service or within 180 days of their last day of service and who also have either completed 20 years of

creditable service regardless of age, or have completed 15 years of service as a LEO and have reached age

50, or have completed five years of creditable service as a LEO and have reached age 55, or have completed

15 years of creditable service as a LEO if killed in the line of duty. Eligible beneficiaries may elect to receive

a monthly Survivor’s Alternate Benefit for life or a return of the member’s contributions.

59


NOTE 9. PENSION PLANS (CONTINUED)

A. Local Governmental Employees’ Retirement System (Continued)

Contributions. Contribution provisions are established by General Statute 128‐30 and may be amended

only by the North Carolina General Assembly. The City of New Bern employees are required to contribute

6% of their compensation. Employer contributions are actuarially determined and set annually by the

LGERS Board of Trustees. The City of New Bern’s contractually required contribution rate for the year ended

June 30, 2018, was 8.25% of compensation for law enforcement officers and 7.50% for general employees

and firefighters, actuarially determined as an amount that, when combined with employee contributions, is

expected to finance the costs of benefits earned by employees during the year. Contributions to the

pension plan from the City of New Bern were $1,666,638 for the year ended June 30, 2018.

Refunds of Contributions – City employees who have terminated service as a contributing member of

LGERS, may file an application for a refund of their contributions. By state law, refunds to members with at

least five years of service include 4% interest. State law requires a 60 day waiting period after service

termination before the refund may be paid. The acceptance of a refund payment cancels the individual’s

right to employer contributions or any other benefit provided by LGERS.

Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of

Resources Related to Pensions

At June 30, 2018, the City reported a liability of $5,078,151 for its proportionate share of the net pension

liability. The net pension liability was measured as of June 30, 2017. The total pension liability used to

calculate the net pension liability was determined by an actuarial valuation as of December 31, 2016. The

total pension liability was then rolled forward to the measurement date of June 30, 2017 utilizing update

procedures incorporating the actuarial assumptions. The City’s proportion of the net pension liability was

based on a projection of the City’s long‐term share of future payroll covered by the pension plan, relative to

the projected future payroll covered by the pension plan of all participating LGERS employers, actuarially

determined. At June 30, 2017, the City’s proportion was 0.33240%, which was a decrease of 0.00924% from

its proportion measured as of June 30, 2016.

60




For the year ended June 30, 2018, the City recognized pension expense of $1,679,017. At June 30, 2018, the

City reported deferred outflows of resources and deferred inflows of resources related to pensions from the

following sources:

Deferred Outflows

of Resources

Deferred Inflows

of Resources

Differences between expected and actual experience 292,549$ 143,746$

Changes in plan assumptions 725,230 ‐ Net difference between projected and actual earnings on

pension plan investments 1,232,981 ‐ Changes in proportion and differences between City

contributions and proportionate share of contributions 12,146 237,633

City contributions subsequent to the measurement date 1,666,638 ‐

Total 3,929,544$ 381,379$

City contributions made subsequent to the measurement date of $1,666,638 are reported as deferred

outflows of resources and will be recognized as a decrease of the net pension liability in the year ended

June 30, 2019. Other amounts reported as deferred outflows and inflows of resources related to pensions

will be recognized in pension expense as follows:

Year ending June 30:2019 197,197$ 2020 1,392,146 2021 686,404 2022 (394,220)

1,881,527$

Actuarial Assumptions. The total pension liability in the December 31, 2016 actuarial valuation was

determined using the following actuarial assumptions, applied to all periods included in the measurement:

Inflation 3.0 percent

Salary increases 3.50 to 8.10 percent, including inflation and productivity

factor

Investment rate of return 7.20 percent, net of pension plan investment expense,

including inflation

61




The plan currently uses mortality tables that vary by age, gender, employee group (i.e. general, law

enforcement officer) and health status (i.e. disabled and healthy). The current mortality rates are based on

published tables and based on studies that cover significant portions of the U.S. population. The healthy

mortality rates also contain a provision to reflect future mortality improvements.

The actuarial assumptions used in the December 31, 2016 valuation were based on the results of an

actuarial experience study for the period January 1, 2010 through December 31, 2014.

Future ad hoc COLA amounts are not considered to be substantively automatic and are therefore not

included in the measurement.

The projected long‐term investment returns and inflation assumptions are developed through review of

current and historical capital markets data, sell‐side investment research, consultant whitepapers, and

historical performance of investment strategies. Fixed income return projections reflect current yields

across the U.S. Treasury yield curve and market expectations of forward yields projected and interpolated

for multiple tenors and over multiple year horizons. Global public equity return projections are established

through analysis of the equity risk premium and the fixed income return projections. Other asset categories

and strategies’ return projections reflect the foregoing and historical data analysis. These projections are

combined to produce the long‐term expected rate of return by weighting the expected future real rates of

return by the target asset allocation percentage and by adding expected inflation. The target allocation and

best estimates of arithmetic real rates of return for each major asset class as of June 30, 2017 are

summarized in the following table:

Asset Class Target Allocation

Long‐Term Expected Real

Rate of ReturnFixed Income 29.0% 1.4%Global Equity 42.0% 5.3%Real Estate 8.0% 4.3%Alternatives 8.0% 8.9%Credit 7.0% 6.0%Inflation Protection 6.0% 4.0% Total 100%

62




The information above is based on 30 year expectations developed with the consulting actuary for the 2016

asset, liability, and investment policy study for the North Carolina Retirement Systems, including LGERS.

The long‐term nominal rates of return underlying the real rates of return are arithmetic annualized figures.

The real rates of return are calculated from nominal rates by multiplicatively subtracting a long‐term

inflation assumption of 3.00%. All rates of return and inflation are annualized.

Discount rate. The discount rate used to measure the total pension liability was 7.20%. This represents a

reduction from the discount rate used in the prior year rate of 7.25%. The projection of cash flows used to

determine the discount rate assumed that contributions from plan members will be made at the current

contribution rate and that contributions from employers will be made at statutorily required rates,

actuarially determined. Based on these assumptions, the pension plan’s fiduciary net position was

projected to be available to make all projected future benefit payments of the current plan members.

Therefore, the long‐term expected rate of return on pension plan investments was applied to all periods of

projected benefit payments to determine the total pension liability.

Sensitivity of the City’s proportionate share of the net pension liability to changes in the discount rate.

The following presents the City’s proportionate share of the net pension liability calculated using the

discount rate of 7.20 percent, as well as what the City’s proportionate share of the net pension asset or net

pension liability would be if it were calculated using a discount rate that is one percentage point lower (6.20

percent) or one percentage point higher (8.20 percent) than the current rate:

1% Decrease

(6.20%)

Discount Rate

(7.20%)

1% Increase

(8.20%)City's proportionate share of the net

pension liability (asset) 15,244,725$ 5,078,151$ (3,407,728)$

Pension plan fiduciary net position. Detailed information about the pension plan’s fiduciary net position is

available in the separately issued Comprehensive Annual Financial Report (CAFR) for the State of North

Carolina.

63



B. Law Enforcement Officers Special Separation Allowance

Plan Description. The City of New Bern administers a public employee retirement system (the “Separation

Allowance”), a single employer defined benefit pension plan that provides retirement benefits to the City’s

qualified sworn law enforcement officers. The Separation Allowance is equal to 0.85 percent of the annual

equivalent of the base rate of compensation most recently applicable to the officer for each year of

creditable service. The retirement benefits are not subject to any increases in salary or retirement

allowances that may be authorized by the General Assembly. Article 12D of G.S. Chapter 143 assigns the

authority to establish and amend benefit provisions to the North Carolina General Assembly. A separate

report is not issued for the Plan.

All full time law enforcement officers of the City are covered by the Separation Allowance. At December 31,

2016, the date of the most recent actuarial valuation the Separation Allowance’s membership consisted of:

Retirees receiving benefits 10 Active plan members 73

Total 83

Basis of Accounting. The City has chosen to fund the Separation Allowance on a pay as you go basis.

Pension expenditures are made from the General Fund, which is maintained on the modified accrual basis of

accounting. Benefits and refunds are recognized when due and payable in accordance with the terms of the

plan. The Separation Allowance has no assets accumulated in a trust that meets the criteria which are

outlined in GASB Statement 73 paragraph 4.

Actuarial Assumptions. The entry age actuarial cost method was used in the December 31, 2016 valuation.

The total pension liability in the December 31, 2016 actuarial valuation was determined using the following

actuarial assumptions, applied to all periods included in the measurement:

Inflation 2.50 percentSalary increases 3.50 to 7.35 percent, including inflation and

productivity factorDiscount rate 3.16 percent

The discount rate used to measure the total pension liability is the Standard & Poor’s 20‐year Municipal

Bond High Grade Rate Index. Since the prior measurement date, the discount rate has changed from 3.86%

to 3.16% due to a change in the Municipal Bond Rate.

64



B. Law Enforcement Officers Special Separation Allowance (Continued)

The plan currently uses mortality tables that vary by age, and health status (i.e. disabled and healthy). The

current mortality rates are based on published tables and based on studies that cover significant portions of

the U.S. population. The healthy mortality rates also contain a provision to reflect future mortality

improvements.

The actuarial assumptions used in the December 31, 2016 valuation were based on the results of an

actuarial experience study for the period January 1, 2010 through December 31, 2014.

Contributions. The City is required by Article 12D of G.S. Chapter 143 to provide these retirement benefits

and has chosen to fund the benefit payments on a pay as you go basis through appropriations made in the

General Fund operating budget. The City’s obligation to contribute to this plan is established and may be

amended by the North Carolina General Assembly. Administration costs of the Separation Allowance are

financed through investment earnings. The City paid $185,918 as benefits came due for the reporting

period.

Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows

of Resources Related to Pensions

At June 30, 2018, the City reported a total pension liability of $2,767,074. The total pension liability was

measured as of December 31, 2017 based on a December 31, 2016 actuarial valuation. The total pension

liability was then rolled forward to the measurement date of December 31, 2017 utilizing update

procedures incorporating the actuarial assumptions. For the year ended June 30, 2018, the City recognized

pension expense of $221,400.

Deferred Outflows Deferred Intflowsof Resources of Resources

Experience differences ‐$ 42,258$ Change in assumptions 123,043 35,272 City benefit payments made subsequent to

the measurement date. 102,740 ‐ Total 225,783$ 77,530$

65



B. Law Enforcement Officers Special Separation Allowance (Continued)

An amount of $102,740 reported as deferred outflows of resources related to pensions resulting from

benefit payments made and administrative expenses incurred subsequent to the measurement date will be

recognized as a decrease of the total pension liability in the year ended June 30, 2019. Other amounts

reported as deferred inflows of resources related to pensions will be recognized as reductions of pension

expense as follows:

Year ending June 302019 9,226$ 2020 9,226 2021 9,226 2022 11,678 2023 6,157

Total 45,513$

Changes in the Total Pension Liability. The changes in the total pension liability of the City for the fiscal

year ended June 30, 2018 were as follows:

Balance at June 30, 2017 $ 2,632,626 Service cost 100,996 Interest 98,458 Experience differences (52,017) Assumption changes 151,459 Contributions (163,818) Balance at June 30, 2018 $ 2,767,704

Total Pension Liability

The required schedule of changes in the City’s total pension liability and related ratios immediately

following the notes to the financial statements presents multiyear trend information.

Sensitivity of the City’s total pension liability to changes in the discount rate. The following presents the

City’s total pension liability calculated using the discount rate of 3.16 percent, as well as what the City’s total

pension liability would be if it were calculated using a discount rate that is 1‐percentage‐point lower (2.16

percent) or 1‐percentage‐point higher (4.16 percent) than the current rate:

1% Decrease

(2.16%)

Discount Rate

(3.16%)

1% Increase

(4.16%)Total pension liability 2,970,820$ 2,767,704$ 2,580,547$

66



C. Supplemental Retirement Income Plan for Law Enforcement Officers

Plan Description. The City contributes to the Supplemental Retirement Income Plan (“Plan”), a defined

contribution pension plan administered by the Department of State Treasurer and a Board of Trustees. The

Plan provides retirement benefits to law enforcement officers employed by the City. Article 5 of G.S.

Chapter 135 assigns the authority to establish and amend benefit provisions to the North Carolina General

Assembly. The Supplemental Retirement Income Plan for Law Enforcement Officers is included in the

Comprehensive Annual Financial Report (CAFR) for the state of North Carolina. The State’s CAFR includes

the pension trust fund financial statements for the Internal Revenue Code Section 401(k) plan that includes

the Supplemental Retirement Income Plan for Law Enforcement Officers. That report may be obtained by

writing to the Office of the State Controller, 1410 Mail Service Center, Raleigh, North Carolina 27699‐1410,

or by calling (919) 981‐5454.

Funding Policy. Article 12E of G.S. Chapter 143 requires the City to contribute, each month, an amount

equal to five percent of each officer's salary, and all amounts contributed are vested immediately. Also, the

law enforcement officers may make voluntary contributions to the plan. Contributions for the year ended

June 30, 2018 were $382,377, which consisted of $236,503 from the City and $145,874 from the law

enforcement officers.

D. Supplemental Retirement Income Plan for Employees Other than Law Enforcement

Officers

All other permanent full‐time employees of the City (excluding law enforcement officers) also participate in

the Supplemental Retirement income Plan, a defined contribution pension plan as described above. The

Plan is a defined contribution pension plan administered by the Department of State Treasurer and a Board

of Trustees. The City contributes each month an amount equal to 5% of each employee’s salary, and all

amounts contributed are vested immediately. Also, these employees may make voluntary contributions to

the plan. Contributions for the year ended June 30, 2018 were $1,312,015 which consisted of $843,438

from the City and $468,577 from the employees.

67


NOTE 10. OTHER POSTEMPLOYMENT BENEFITS

Plan Description

Under the terms of a City resolution, the City administers a single‐employer defined benefit Healthcare

Benefits Plan (the “HCB Plan”). The City pays 100 percent of the cost for “maximum retirees” of the City,

while “other retirees” are eligible to enroll in the City’s insurance plan, but must pay the full cost. Maximum

Retirees are defined as meeting one of the following criteria: (1) employee with thirty (30) or more years of

service with at least fifteen (15) of those years with the City; (2) employee with twenty‐seven (27) or more

years of service and three (3) years of prior military service with at least fifteen (15) of those years with the

City; or (3) members of the governing board with a total number of sixteen (16) years in office. To qualify as

an “other retiree,” employees must meet one of the two following: (1) have twenty‐five (25) to twenty‐nine

(29) years of service with at least ten (10) with the City or (2) twenty (20) or more years of qualified service

with at least ten (10) years with the City. Coverage for all retirees who are eligible for Medicare will be

transferred to a Medicare Supplemental plan after qualifying for Medicare. The City’s Board of Aldermen

established and may amend the benefit provisions. No assets are accumulated in a trust that meets the

criteria in paragraph 4 of GASB Statement No. 75 and a separate report was not issued for the plan.

Membership of the HCB Plan consisted of the following at June 30, 2017, the date of the latest actuarial

valuation:

Active participants 386Retirees and beneficiaries currently receiving benefits 61

Total 447

Contributions

The City Board of Aldermen has elected to fund the HCB Plan on a “pay as you go” basis. Per the City

resolution, retirees are able to continue to receive health insurance at active employee rates, subsidized by

City contributions. For the fiscal year ended June 30, 2018, the City contributed $700,193 for the pay as you

go benefits for the HCB Plan.

Total OPEB Liability

Effective July 1, 2017, the City implemented the provisions of GASB Statement No. 75, Accounting and

Financial Reporting for Postemployment Benefits Other Than Pensions, which significantly changed the City’s

accounting for OPEB amounts. The information disclosed in this note is presented in accordance with this

new standard.

The City’s total OPEB liability of $31,660,786 was measured as of June 30, 2017 and was determined by an

actuarial valuation as of June 30, 2016 using standard rollforward techniques.

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NOTE 10. OTHER POSTEMPLOYMENT BENEFITS (CONTINUED)

Actuarial Assumptions and Other Inputs

The total OPEB liability in the June 30, 2016 actuarial valuation was determined using the following actuarial

assumptions and other inputs, applied to all periods included in the measurement unless otherwise

specified:

Inflation rate 2.50%Real wage growth 1.00%Wage inflation 3.50%Salary increase, including wage inflationGeneral employees 3.50% ‐ 7.75%Firefighters 3.50% ‐ 7.75%Law Enforcement Officers 3.50% ‐ 7.35%

Municipal bond index ratePrior measurement date 3.01%Measurement date 3.56%

Health care cost trendsPre‐medicare 7.75% ‐ 5.00%, Ultimate Trend in 2022Medicare 5.75% ‐ 5.00%, Ultimate Trend in 2019

The discount rate is based on the yield June average of the Bond Buyer General Obligation 20‐year

Municipal Bond Index published weekly by The Bond Buyer.

Change in assumption and other inputs reflect a change in the discount rate from 3.01% to 3.56%. The

current mortality rates were based on the RP‐2014 mortality tables, with adjustments for experience and

generational mortality improvements using Scale MP‐2015. The actuarial assumptions used in the June 30,

2016 valuation were based on the results of an actuarial experience study for the period January 1, 2010

through December 31, 2014.

Changes in the Total OPEB Liability.

The changes in the total OPEB liability for the City for the fiscal year ended June 30, 2018 were as follows:

Total OPEB Liability

Balance at June 30, 2017 33,334,776$ Service Cost 1,315,824 Interest 991,387 Experience differences 260,722 Assumption changes (3,439,284) Benefit payments (802,639)

Balance at June 30, 2018 31,660,786$

69



Sensitivity for the Total OPEB Liability to Changes in the Discount Rate

The following presents the total OPEB liability of the City, as well as what the City’s total OPEB liability would

be if it were calculated using a discount rate that is 1‐percentage‐point lower (2.56 percent) or 1‐

percentage‐point higher (4.56) than the current discount rate:

1% Decrease

(2.56%)

Current Discount

Rate (3.56%)

1% Increase

(4.56%)Total OPEB liability 38,316,952$ 31,660,786$ 26,533,108$

Sensitivity of the Total OPEB Liability to Changes in the Healthcare Cost Trend Rate

The following presents the total OPEB liability of the City, as well as what the City’s total OPEB liability would

be if it were calculated using healthcare cost trend rates that are 1‐percentage‐point lower or 1‐percentage‐

point higher than the current healthcare cost trend rates:

1% Decrease Current 1% Increase

(6.75% to 4.00%) (7.75% to 5.00%) (8.75% to 6.00%)Total OPEB liability 25,670,464$ 31,660,786$ 39,664,282$

Actuarial valuations involve estimates of the value of reported amounts and assumptions about the

probability of events far into the future, and actuarially determined amounts are subject to continual

revisions as results are compared to past expectations and new estimates are made about the future.

Actuarial calculations reflect a long‐term perspective. Calculations are based on the substantive plan in

effect as of June 30, 2018 and the current sharing pattern of costs between employer and inactive

employees.

70



OPEB Expense and Deferred Outflows and Deferred Inflows of Resources Related to OPEB

For the year ended June 30, 2018 the City recognized OPEB expense of $1,923,327. At June 30, 2018, the

Town reported deferred outflows of resources and deferred inflows of resources related to OPEB from the

following sources:

Deferred Outflows

of Resources

Deferred Inflows

of Resources

Differences between expected and actual experience 229,234$ ‐$

Changes in plan assumptions ‐ 3,023,912

City contributions subsequent to the measurement date 700,193 ‐

Total 929,427$ 3,023,912$

City contributions made subsequent to the measurement date of $700,193 are reported as deferred

outflows of resources and will be recognized as a decrease of the total pension liability in the year ended

June 30, 2019. Other amounts reported as deferred inflows of resources related to pensions will be

recognized in pension expense as follows:

Year ending June 30:2019 (383,884)$ 2020 (383,884) 2021 (383,884) 2022 (383,884) 2023 (383,884) Thereafter (875,258)

(2,794,678)$

71


NOTE 11. RISK MANAGEMENT

The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets,

errors and omissions, injuries to employees, and natural disasters. To mitigate the financial impact of any

losses, the City has established a program to manage its financial risks through a self‐funded arrangement in

combination with purchased insurance.

The City’s Internal Service Fund was established to account for an employee self‐insurance health benefit

program. The purpose of the fund is to pay medical claims of City employees and their covered dependents

and minimize the total cost of annual medical insurance to the municipality. Funding is provided by

employee contributions and charges to the various funds of the City based upon estimated claim and

employee participation. Expected claims are determined annually by the reinsurance carrier. The City carries

aggregate stop loss insurance coverage of 125% of annual expected paid claims and individual stop loss

coverage of $100,000 per covered individual and an aggregating specific deductible of $250,000 through the

plan administrator utilizing a reinsurance carrier. The City has recognized a provision for claims incurred, but

not reported, in the accompanying financial statements. This provision is estimated based upon actuarial

claims history utilizing a two month lag on outstanding claims.

The City is self‐insured for workers’ compensation claims up to $600,000 for all employees. The City has

reinsurance through a commercial company for single occurrence claims up to $1,000,000. The City also

purchased an Occupational Accident Buffer Layer Insurance Policy which covers all employees at $400,000

(attachment point) with a coverage limit of $200,000. The City’s Internal Service Fund is also used to

account for this program.

The City also purchases commercial insurance to protect against claims for property, general liability, auto

liability, public officials, and employee bonds. Claims have not exceeded coverage in the past three years.

There have been no significant reductions in insurance coverage in the past three years.

The City carries $1,000,000 of flood insurance, subject to a $50,000 deductible, included in its commercial

property coverage. The City does not have any property that has been mapped and designated an “A” area

(an area close to a river, lake, or stream) by the Federal Emergency Management Agency.

In accordance with G.S. 159‐29, the City’s employees that have access to $100 or more at any given time of

the City’s funds are performance bonded through a commercial surety bond. The Finance Officer and Tax

Collector are each individually bonded for $100,000 each. The remaining employees that have access to

funds are bonded under a blanket bond for $250,000.

72


NOTE 11. RISK MANAGEMENT (CONTINUED)

For the Employee Benefit Insurance Internal Service Fund, a total of $5,411,489 in claims and changes in

estimates were incurred for benefits during the year ended June 30, 2018. Changes in the fund’s claims

liability amounts in the years ended June 30, 2018 and 2017, were as follows:

Beginning of Current Year End of

Fiscal Year Claims Claims and Changes Claims Year Claims

Year Liability in Estimates Paid Liability

2018 446,416$ 4,904,825$ 4,573,949$ 777,292$ 2017 451,266 5,504,830 5,509,680 446,416

Beginning of Current Year End of

Fiscal Year Claims Claims and Changes Claims Year Claims

Year Liability in Estimates Paid Liability

2018 464,685$ 233,802$ 608,487$ 90,000$ 2017 335,540 778,140 648,995 464,685

EMPLOYEE HEALTH INSURANCE CLAIMS PAYABLE

WORKERS COMPENSATION CLAIMS PAYABLE

NOTE 12. COMMITMENTS AND CONTINGENT LIABILITIES

Litigation:

The City is a defendant in various lawsuits. The City has determined some of these cases are probable of a

loss and others are considered reasonably possible that the City will have a loss. The City has recorded a

liability of $90,000 for contingent liabilities that are probable of loss. The City estimates the additional

range of possible losses to be up to $583,000.

Grant Contingencies:

The City has received federal and state grants for specific purposes that are subject to review and audit by

the grantor agencies. Such audits could lead to the disallowance of certain expenditures previously

reimbursed by those agencies. Based upon prior experience, management of the City believes such

disallowances, if any, will not be significant.

Construction Commitments:

The City has active construction projects as of June 30, 2018. At year‐end, the City has contractual

commitments on uncompleted contracts of approximately $1,809,594.

73


NOTE 13. JOINT VENTURES, JOINTLY GOVERNED ORGANIZATIONS, AND RELATED ORGANIZATIONS

Joint Venture:

The City participates in a joint venture with Craven County to operate the New Bern/Craven County Library.

The City appoints five members of the ten‐member board. The City has an ongoing financial responsibility

for the joint venture because the Library’s continued existence depends on the participating governments’

continued funding. None of the participating governments have any equity interest in the Library, so no

equity interest has been reflected in the financial statements at June 30, 2018. The City contributed

$75,000 to the library during the fiscal year ended June 30, 2018.

Jointly Governed Organization:

Eastern Carolina Council – The City, in conjunction with nine counties and twenty‐eight other municipalities,

established the Eastern Carolina Council (the “Council”). The participating governments established the

Council to coordinate various funding received from federal and state agencies. Each participating

government appoints one member to the Council’s governing board. The City paid membership and

administrative fees of $10,608 to the Council during the fiscal year ended June 30, 2018.

North Carolina Eastern Municipal Power Agency (“NCEMPA”) – NCEMPA is a joint agency formed by 32

municipalities, including the City, and organized and existing pursuant to Chapter 159B of the General

Statutes of North Carolina. The NCEMPA Board elects its own officers and is responsible for the selection of

management to run the daily operations of NCEMPA. NCEMPA Is responsible for budgeting and receiving its

financing. The City has made investment in this joint venture.

Related Organizations

New Bern Housing Authority – The Board of the New Bern Housing Authority (“Hosing Authority”) is

appointed by the Mayor of the City. The City is accountable for the Housing Authority because it appoints

the governing board; however, the City is not financially accountable for the Housing Authority.

Friends of New Bern Firemen’s Museum, Inc. – The Board of Directors of the Friends of New Bern Firemen’s

Museum (“Museum”) is appointed by the Board of Aldermen of the City. The City is accountable for the

Museum because it appoints the governing board; however, the City is not financially accountable for the

Museum.

74


NOTE 14. RESTATEMENTS

The City has determined a restatement to beginning net position was required in the City’s governmental

activities, business‐type activities, and the electric fund, water fund, sewer fund, and stormwater fund, for

the implementation of GASB Statement No. 75, Accounting and Financial Reporting for Postemployment

Benefits Other than Pensions, which requires retroactive reporting of opening balances. The effect of the

restatement resulted in a change to beginning net position of the governmental activities, business‐type

activities, Water Fund, Sewer Fund, Electric Fund and Stormwater Fund and are as follows:

Net Position, governmental activities, as previously reported $ 63,465,337 Restatement for implementation of GASB Statement No. 75:

Total OPEB liability as of June 30, 2017 (33,334,776) Removal of prior Net OPEB obligation reported June 30, 2017 - Governmental activities 5,735,510 Beginning deferred outflows related to OPEB 802,639

Net Position, governmental activities, as restated $ 36,668,710

Net Position, business-type activities, as previously reported $ 137,901,638 Restatement for implementation of GASB Statement No. 75:

Removal of prior Net OPEB obligation reported June 30, 2017 2,748,602 Net Position, business-type activities, as restated $ 140,650,240

Governmental Activities

Business-type Activities

Net Position, Electric fund, as previously reported $ 43,329,264 Restatement for implementation of GASB Statement No. 75:

Removal of prior Net OPEB obligation reported June 30, 2017 1,378,442 Net Position, Electric fund, as restated $ 44,707,706

Net Position, Water fund, as previously reported $ 32,887,706 Restatement for implementation of GASB Statement No. 75:

Removal of prior Net OPEB obligation reported June 30, 2017 714,885 Net Position, Water fund, as restated $ 33,602,591

Net Position, Sewer fund, as previously reported $ 58,664,921 Restatement for implementation of GASB Statement No. 75:

Removal of prior Net OPEB obligation reported June 30, 2017 571,386 Net Position, Sewer fund, as restated $ 59,236,307

Net Position, Stormwater fund, as previously reported $ 1,834,593 Restatement for implementation of GASB Statement No. 75:

Removal of prior Net OPEB obligation reported June 30, 2017 83,889 Net Position, Stormwater fund, as restated $ 1,918,482

Electric Fund

Water Fund

Sewer Fund

Stormwater Fund

REQUIRED SUPPLEMENTARY INFORMATION

2018

Total OPEB liability

Service cost 1,315,824$

Interest on total OPEB liability 991,387

Difference between expected and actual experience 260,722

Changes of assumptions and other inputs (3,439,284)

Benefit payments (802,639)

Net change in total OPEB liability (1,673,990)

Total OPEB liability ‐ beginning 33,334,776

Total OPEB liability ‐ ending 31,660,786$

Covered‐employee payroll 18,184,909$

Total OPEB liability as a percentage of

covered‐employee payroll 174.1%

Notes to the Schedule:

The schedule will present 10 years of information once it is accumulated.

The City is not accumulating assets in a trust fund that meets the criteria in paragraph 4 of

GASB Statement No. 75 for payment of future OPEB benefits.



OPEB HEALTHCARE BENEFIT PLAN

SCHEDULE OF CHANGES IN TOTAL OPEB LIABILITY

AND RELATED RATIOS

75



SCHEDULE OF CHANGES IN TOTAL PENSION LIABILITY

JUNE 30

LAW ENFORCEMENT OFFICERS' SPECIAL SEPARATION ALLOWANCE

2018 2017

Beginning balance of the total pension liability 2,632,626$ 2,611,191$

Service Cost 100,996 106,628

Interest on the total pension liability 98,458 91,040

Changes of assumptions or other inputs 151,459 (54,134)

Difference between expected and actual experience (52,017) ‐

Benefit payments (163,818) (122,099)

Ending balance of the total pension liability 2,767,704$ 2,632,626$

Note: Schedule is intended to show information for the last 10 fiscal years. Additional years will be displayed as

they become available.

76

2018 2017 2016

Total pension liability 2,632,626$ 2,632,626$ 2,611,191$

City's covered payroll 4,423,296$ 4,334,746$ 4,083,468$

Total pension liability as a percentage of covered payroll 59.52% 60.73% 63.95%

Note: Schedule is intended to show information for the last 10 fiscal years. Additional years will be displayed as they become available.



SCHEDULE OF TOTAL PENSION LIABILITY AS A PERCENTAGE OF COVERED PAYROLL

LAST THREE FISCAL YEARS

LAW ENFORCEMENT OFFICERS' SPECIAL SEPARATION ALLOWANCE

The City of New Bern has no assets accumulated in a trust that meets the criteria in paragraph 4 of GASB Statement 73 to pay related benefits.

77


CITY'S PROPORTIONATE SHARE OF NET PENSION LIABILITY (ASSET)

LAST FIVE FISCAL YEARS*

LOCAL GOVERNMENTAL EMPLOYEES' RETIREMENT SYSTEM

2018 2017 2016 2015 2014City's proportion of the net pension liability (asset) (%) 0.33240% 0.34164% 0.36713% (0.37472%) 0.36820%

City's proportion of the net pension liability (asset) ($) 5,078,151$ 7,250,745$ 1,647,657$ (2,209,896)$ 4,438,224$

City's covered payroll 20,816,691$ 20,102,718$ 20,791,805$ 20,561,521$ 19,998,382$

City's proportionate share of the net pension liability (asset) as a percentage of its covered payroll 24.39% 36.07% 7.92% ( 10.75%) 22.19%

Plan fiduciary net position as a percentage of the total pension liability 94.18% 91.47% 98.09% 102.64% 94.35%

* The amounts presented for each fiscal year were determined as of the prior fiscal year ending June 30.

Note: Schedule is intended to show information for the last 10 fiscal years. Additional years will be displayed as they become available.


78

2018 2017 2016 2015 2014

Contractually required contribution 1,666,638$ 1,565,018$ 1,419,969$ 1,486,944$ 1,461,830$

Contributions in relation to the contractually required contribution 1,666,638 1,565,018 1,419,969 1,486,944 1,461,830

Contribution deficiency (excess) ‐$ ‐$ ‐$ ‐$ ‐$

City's covered payroll 21,540,082$ 20,816,691$ 20,102,718$ 20,791,805$ 20,561,521$

Contributions as a percentage of covered payroll 7.74% 7.52% 7.06% 7.15% 7.11%


SCHEDULE OF CONTRIBUTIONS


LAST FIVE FISCAL YEARS

LOCAL GOVERNMENTAL EMPLOYEES' RETIREMENT SYSTEM

79

NOTES TO REQUIRED SUPPLEMENTARY INFORMATION

FOR THE FISCAL YEAR ENDED JUNE 30, 2018

Method and assumptions used in calculations of actuarially determined contributions : The actuarially determined contribution

rates in the schedule of contributions are calculated as of December 31, two years prior to the end of the fiscal year in which

contributions are reported.


80

NONMAJOR GOVERNMENTAL FUNDS

Special Revenue Funds

Community Development Fund – is established to account for United States Department of Housing and Urban

Development (HUD) block grant and home program grant proceeds allocated to the City for community development

programs.

Emergency Telephone System Fund – is used to account for funds for the City’s 911 emergency telephone system.

Police Special Revenue Fund – is used to account for funds utilized for the investigation and mitigation of drug crime in the

City.

Grants Special Revenue Fund – accounts for the receipt and disbursement of Federal and State grants, excluding those for

which it may be deemed necessary for a separate fund be established due to the size or nature of the grant.

Glenburnie Road Multi‐Use Path Project Fund – is used to account for the revenues and expenditures associated with the

federal bicycle and pedestrian transportation engagement program grant.

Public Private Partnership Fund – is used to account for revenues and expenditures of special projects that may arise in

keeping with the City’s strategic goals and objectives.

FEMA Hurricane Irene Fund – is used to account for the revenues and expenditures associated with Federal disaster and

funding received subsequent to Hurricane Irene.

2012 CDBG NC Catalyst Fund – is used to account for the revenues and expenditures associated with the 2012 CDBG

Catalyst Grant.

Metropolitan Planning Organization (MPO) Plan Fund – is used to account for the revenues and expenditures associated

with the MPO Grant.

Entitlement Cities CDBG Program Fund – is used to account for the revenues and expenditures associated with the

Entitlement Cities CDBG Grant.

Neuse Boulevard Phase II Project Fund – is used to account for the revenues and expenditures associated with the federal

bicycle and pedestrian transportation engagement program grant.

Equitable Sharing Fund – is used to account for the receipt and disbursement of the restricted State and Federal joint

seizure funds received by the City’s police department from the U.S. Department of Justice.


Special Revenue Funds (Continued)

Neuse River Gateway Fund – is used to account for revenues and expenditures associated with infrastructure

improvements at 1307 County Club Road and Lawson Creek Park.

City Market Workforce Development Fund – is used to account for the revenues and expenditures associated with

improvements to an existing City owned 4.6‐acre parcel located on First Street which will transform the facility into a

workforce development training center, a makerspace for entrepreneurs, and a commissary/training facility for food

truck/food service entrepreneurs.

Union Station Train Depot Fund – is used to account for expenditures and funding revenues for the restoration of the

Union Station Train Depot.

Capital Projects Funds

MSD Improvement Fund – is used to account for revenues and expenditures for the Radio System Equipment Project.

General Capital Projects Fund – is used to account for revenues and expenditures of various capital projects for the benefit

of the City.

IT Network Merger Fund – is used to account for revenues and expenditures for the IT Network Merger project.

Drainage Improvements Fund – is used to account for City’s expenditures associated with various drainage projects within

the City.

2017 Roadway Improvements Fund – is used to account for the expenditures of the City’s roadway improvements.

Martin Marietta Park Fund – is used to account for the expenditures incurred with the expansion of the park. ERP Project Fund – is used to account for the expenditures related to the City’s new ERP system acquisition and implementation. Garage Relocation Fund – is used to account for expenditures associated with the acquisition of land and construction of the new parking garage. Alexander Thalmann Field Fund – is used to account for revenues and expenditures associated with the development and

construction of a multi‐purpose recreational sports field, equipment, restrooms and fencing.

ASSETS

Cash and cash equivalents $ 7,421 $ 177,109 $ 20,313 $ 68,908 $ ‐

Accounts receivable, net ‐ 26,761 105 ‐ ‐

Due from other governments ‐ ‐ ‐ 29,900 ‐

Restricted cash and cash equivalents ‐ ‐ ‐ ‐ ‐

Total assets $ 7,421 $ 203,870 $ 20,418 $ 98,808 $ ‐

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES

LIABILITIES

Accounts payable and accrued liabilities $ 2,097 $ 22,506 $ ‐ $ 2,286 $ ‐

Due to other funds ‐ ‐ ‐ ‐ ‐

Total liabilities 2,097 22,506 ‐ 2,286 ‐


Unavailable revenues ‐ intergovernmental ‐ ‐ ‐ ‐ ‐

Total deferred inflows of resources ‐ ‐ ‐ ‐ ‐

FUND BALANCES

Restricted:

Public safety ‐ 181,364 20,418 ‐ ‐

Streetscape projects ‐ ‐ ‐ ‐ ‐

ERP systems ‐ ‐ ‐ ‐ ‐

Economic and physical development 5,324 ‐ ‐ 96,522 ‐

Assigned:

Capital projects ‐ ‐ ‐ ‐ ‐

Unassigned ‐ ‐ ‐ ‐ ‐

Total fund balances (deficit) 5,324 181,364 20,418 96,522 ‐


of resources, and fund balances $ 7,421 $ 203,870 $ 20,418 $ 98,808 $ ‐

Community

Development

Glenburnie Road

Multi‐use Path Project

Emergency

Telephone System

Police

Special Revenue

Grants

Special Revenue


COMBINING BALANCE SHEET


JUNE 30, 2018


81

$ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ 32,561 $ 21,859

‐ ‐ ‐ 5,443 ‐ ‐ ‐ ‐

‐ 14,525 ‐ 44,376 7,841 ‐ ‐ ‐

‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

$ ‐ $ 14,525 $ ‐ $ 49,819 $ 7,841 $ ‐ $ 32,561 $ 21,859

$ ‐ $ ‐ $ ‐ $ 1,280 $ 4,454 $ ‐ $ ‐ $ ‐

‐ 14,525 ‐ 35,086 3,387 ‐ ‐ ‐

‐ 14,525 ‐ 36,366 7,841 ‐ ‐ ‐

‐ ‐ ‐ ‐ 6,810 ‐ ‐ ‐

‐ ‐ ‐ ‐ 6,810 ‐ ‐ ‐

‐ ‐ ‐ ‐ ‐ ‐ 32,561 ‐

‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

‐ ‐ ‐ 13,453 ‐ ‐ ‐ ‐

‐ ‐ ‐ ‐ ‐ ‐ ‐ 21,859

‐ ‐ ‐ ‐ (6,810) ‐ ‐ ‐

‐ ‐ ‐ 13,453 (6,810) ‐ 32,561 21,859

$ ‐ $ 14,525 $ ‐ $ 49,819 $ 7,841 $ ‐ $ 32,561 $ 21,859

FEMA Neuse River

GatewayHurricane Irene

2012 CDBG

NC Catalyst

U.S. Department

of JusticeMPO Plan Sidewalk

Entitlement Cities

CDBG Program

Public‐Private Neuse Boulevard


Partnership

Equitable Sharing

82

ASSETS

Cash and cash equivalents $ 314,843 $ 38,537 $ ‐ $ 152,873 $ 23,691 $ ‐

Accounts receivable, net ‐ ‐ ‐ ‐ ‐ ‐

Due from other governments ‐ ‐ ‐ ‐ ‐ ‐

Restricted cash and cash equivalents 79,913 ‐ ‐ ‐ ‐ 1,500,000

Total assets $ 394,756 $ 38,537 $ ‐ $ 152,873 $ 23,691 $ 1,500,000

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES

LIABILITIES

Accounts payable and accrued liabilities $ ‐ $ 14,450 $ ‐ $ ‐ $ ‐ $ 34,632

Due to other funds ‐ ‐ ‐ ‐ ‐ 277,270

Total liabilities ‐ 14,450 ‐ ‐ ‐ 311,902


Unavailable revenues ‐ intergovernmental ‐ ‐ ‐ ‐ ‐ ‐

Total deferred inflows of resources ‐ ‐ ‐ ‐ ‐ ‐

FUND BALANCES

Restricted:

Public safety ‐ ‐ ‐ ‐ ‐ ‐

Streetscape projects ‐ ‐ ‐ ‐ ‐ 1,188,098

ERP systems ‐ ‐ ‐ ‐ ‐ ‐

Economic and physical development 79,913 24,087 ‐ ‐ ‐ ‐

Assigned:

Capital projects 314,843 ‐ ‐ 152,873 23,691 ‐

Unassigned ‐ ‐ ‐ ‐ ‐ ‐

Total fund balances (deficit) 394,756 24,087 ‐ 152,873 23,691 1,188,098


of resources, and fund balances $ 394,756 $ 38,537 $ ‐ $ 152,873 $ 23,691 $ 1,500,000

IT Network

Drainage

Merger

Capital Project Funds

General

Capital Project

Improvement

Projects

Workforce

Development Improvement

MSD Union Station

Train Depot

City Market


83

Total

Nonmajor

Governmental

Funds

$ 655,356 $ 17,091 $ ‐ $ $ ‐ $ 1,530,562

‐ ‐ ‐ ‐ ‐ 32,309

‐ ‐ ‐ ‐ ‐ 96,642

‐ ‐ 257,540 824,717 ‐ 2,662,170

$ 655,356 $ 17,091 $ 257,540 $ 824,717 $ ‐ $ 4,321,683

$ 15,920 $ 5,218 $ 3,559 $ ‐ $ ‐ $ 106,402

‐ ‐ 215,607 ‐ ‐ 545,875

15,920 5,218 219,166 ‐ ‐ 652,277

‐ ‐ ‐ ‐ ‐ 6,810

‐ ‐ ‐ ‐ ‐ 6,810

‐ ‐ ‐ ‐ ‐ 234,343

‐ ‐ ‐ ‐ ‐ 1,188,098

‐ ‐ 38,374 ‐ ‐ 38,374

‐ ‐ ‐ 824,717 ‐ 1,044,016

639,436 11,873 ‐ ‐ ‐ 1,164,575

‐ ‐ ‐ ‐ ‐ (6,810)

639,436 11,873 38,374 824,717 ‐ 3,662,596

$ 655,356 $ 17,091 $ 257,540 $ 824,717 $ ‐ $ 4,321,683


2017 Roadyway

Garage

Relocation Project

Improvements

Project

Martin Marietta

Park Project

Alexander

Thalmann Field

ERP

Project

84

REVENUES

Restricted intergovernmental $ ‐ $ 321,127 $ 16,817 $ 12,553 $ ‐

Miscellaneous ‐ ‐ ‐ ‐ ‐

Investment earnings 53 1,071 91 ‐ ‐

Total revenues 53 322,198 16,908 12,553 ‐

EXPENDITURES

General government ‐ ‐ ‐ ‐ ‐

Cultural and recreational ‐ ‐ ‐ 4,424 ‐

Public safety ‐ 329,534 5,412 39,250 ‐

Public works ‐ ‐ ‐ ‐ ‐

Economic and physical development 6,989 ‐ ‐ ‐ 4,739

Total expenditures 6,989 329,534 5,412 43,674 4,739

Excess (deficiency) of revenues

over expenditures (6,936) (7,336) 11,496 (31,121) (4,739)

OTHER FINANCING SOURCES (USES)

Transfers in ‐ 19,830 ‐ 9,953 4,739

Transfers out ‐ ‐ ‐ ‐ ‐

Installment purchase obligations issued ‐ ‐ ‐ ‐ ‐

Total other financing sources (uses) ‐ 19,830 ‐ 9,953 4,739

Net change in fund balances (6,936) 12,494 11,496 (21,168) ‐

FUND BALANCES (DEFICIT), beginning of year 12,260 168,870 8,922 117,690 ‐

FUND BALANCES (DEFICIT), end of year $ 5,324 $ 181,364 $ 20,418 $ 96,522 $ ‐


COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCES




Community

Development Telephone System

Emergency Police Grants Glenburnie Road

Special Revenue Special Revenue Multi‐use Path Project

85

$ ‐ $ ‐ $ ‐ $ 72,255 $ 220,195 $ ‐ $ 7,426 $ ‐

‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

‐ ‐ ‐ ‐ ‐ ‐ 310 ‐

‐ ‐ ‐ 72,255 220,195 ‐ 7,736 ‐

‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

‐ ‐ ‐ ‐ ‐ ‐ 32,716 ‐

‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

7,500 ‐ ‐ 79,905 192,542 8,111 ‐ 28,141

7,500 ‐ ‐ 79,905 192,542 8,111 32,716 28,141

(7,500) ‐ ‐ (7,650) 27,653 (8,111) (24,980) (28,141)

7,500 ‐ ‐ 8,280 ‐ 8,111 ‐ ‐

‐ ‐ (54,843) (826) ‐ ‐ ‐ ‐

‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

7,500 ‐ (54,843) 7,454 ‐ 8,111 ‐ ‐

‐ ‐ (54,843) (196) 27,653 ‐ (24,980) (28,141)

‐ ‐ 54,843 13,649 (34,463) ‐ 57,541 50,000

$ ‐ $ ‐ $ ‐ $ 13,453 $ (6,810) $ ‐ $ 32,561 $ 21,859

Neuse River

GatewayCDBG Program Sidewalk

Entitlement Cities Neuse Boulevard

Partnership

U.S. Department

of Justice


Equitable Sharing

NC Catalyst MPO Plan

FEMA 2012 CDBG

Hurricane Irene

Public‐Private

86

REVENUES

Restricted intergovernmental $ 75,000 $ ‐ $ ‐ $ ‐ $ ‐ $ ‐

Miscellaneous ‐ 65,208 ‐ ‐ ‐ ‐

Investment earnings ‐ 26 ‐ ‐ 441

Total revenues 75,000 65,208 26 ‐ ‐ 441

EXPENDITURES

General government ‐ ‐ ‐ 32,958 ‐ ‐

Cultural and recreational ‐ ‐ ‐ ‐ ‐ ‐

Public safety ‐ ‐ ‐ ‐ ‐ ‐

Public works ‐ ‐ 181,618 ‐ ‐ 312,343

Economic and physical development 104,887 41,121 ‐ ‐ 17,240 ‐

Total expenditures 104,887 41,121 181,618 32,958 17,240 312,343

Excess (deficiency) of revenues

over expenditures (29,887) 24,087 (181,592) (32,958) (17,240) (311,902)


Transfers in 314,843 ‐ ‐ 115,000 ‐ ‐

Transfers out ‐ ‐ (50,723) ‐ ‐ ‐

Installment purchase obligations issued ‐ ‐ ‐ ‐ ‐ 1,500,000

Total other financing sources (uses) 314,843 ‐ (50,723) 115,000 ‐ 1,500,000

Net change in fund balances 284,956 24,087 (232,315) 82,042 (17,240) 1,188,098

FUND BALANCES (DEFICIT), beginning of year 109,800 ‐ 232,315 70,831 40,931 ‐

FUND BALANCES (DEFICIT), end of year $ 394,756 $ 24,087 $ ‐ $ 152,873 $ 23,691 $ 1,188,098


Drainage

Improvements Project


Merger

MSD IT NetworkGeneral

Capital Project

Workforce

Development Improvement

Union Station

Train Depot

City Market

87

Total

Nonmajor

Governmental

Funds

$ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ 725,373

‐ ‐ ‐ ‐ ‐ 65,208

‐ ‐ 3 235 ‐ 2,230

‐ ‐ 3 235 ‐ 792,811

‐ ‐ ‐ ‐ ‐ 32,958

‐ ‐ ‐ ‐ ‐ 4,424

‐ ‐ ‐ ‐ ‐ 406,912

20,564 38,127 219,163 25,518 ‐ 797,333

‐ ‐ ‐ ‐ ‐ 491,175

20,564 38,127 219,163 25,518 ‐ 1,732,802

(20,564) (38,127) (219,160) (25,283) ‐ (939,991)

660,000 50,000 ‐ 30,000 4,732 1,232,988

‐ ‐ ‐ ‐ ‐ (106,392)

‐ ‐ 257,534 820,000 ‐ 2,577,534

660,000 50,000 257,534 850,000 4,732 3,704,130

639,436 11,873 38,374 824,717 4,732 2,764,139

‐ ‐ ‐ ‐ (4,732) 898,457

$ 639,436 $ 11,873 $ 38,374 $ 824,717 $ ‐ $ 3,662,596

ERP

Project

Garage

Relocation Project

Alexander

Thalmann Field

2017 Roadyway

Improvements Project


Martin Marietta

Park Project

88

GENERAL FUND

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES

IN FUND BALANCES ‐ BUDGET AND ACTUAL (BUDGETARY BASIS)


Final Actual Final Budget

Revenues

Ad valorem taxes:

Current year $ 13,761,000 $ 13,761,000 $ 14,292,856 $ 531,856

Prior year 75,300 75,300 67,580 (7,720)

Municipal service district 192,000 192,000 199,662 7,662

Penalties and interest 39,000 39,000 40,814 1,814

Total ad valorem taxes 14,067,300 14,067,300 14,600,912 533,612

Unrestricted intergovernmental:

Local option sales taxes 6,793,500 6,793,500 6,837,929 44,429

Video programming tax 268,000 268,000 251,107 (16,893)

Payments in lieu of taxes 1,085,385 1,091,891 1,096,711 4,820

Telecommunications sales tax 240,000 240,000 237,715 (2,285)

Utilities franchise tax 2,025,000 2,025,000 2,018,691 (6,309)

Piped natural gas tax 44,000 44,000 80,199 36,199

Public Education Television 27,000 27,000 26,757 (243)

Beer and wine tax 140,000 140,000 130,146 (9,854)

Fire protection reimbursement 13,530 13,530 13,423 (107)

ABC distributions 72,000 72,000 68,279 (3,721)

Total unrestricted intergovernmental 10,708,415 10,714,921 10,760,957 46,036

Restricted intergovernmental:

Powell Bill allocation 862,000 862,000 874,381 12,381

State Disaster Assistance grant ‐ 31,808 43,739 11,931

Federal Disaster Assistance grant ‐ 95,423 131,216 35,793

Total restricted intergovernmental 862,000 989,231 1,049,336 60,105

Licenses, permits and fees:

Building permits and inspection fees 397,460 397,460 591,676 194,216

Auto and taxi fees 46,000 46,000 41,410 (4,590)

Beer and wine licenses 2,000 2,000 505 (1,495)

Other permits 22,300 22,300 28,313 6,013

Total licenses, permits and fees 467,760 467,760 661,904 194,144

Sales and services:

Public works fees 97,000 97,000 98,654 1,654

Refuse collection fees 21,000 21,000 173,490 152,490

Planning and inspections 90,000 90,000 100,356 10,356

Public safety fees 252,800 252,800 271,334 18,534

Cultural and recreation fees 117,550 117,550 146,024 28,474

Rent income 179,500 179,500 186,092 6,592

Other sales and services 2,880,000 2,960,723 2,794,632 (166,091)

Total sales and services 3,637,850 3,718,573 3,770,582 52,009


continued


Budget

Original

Variance With

89

GENERAL FUND





Other revenues:

Proceeds from insurance $ 30,000 $ 51,400 $ 57,421 $ 6,021

Cemetery 85,000 85,000 92,950 7,950

Other revenues 58,300 58,300 163,050 104,750

Total other revenues 173,300 194,700 313,421 118,721

Total revenues 30,017,935 30,253,795 31,629,832 1,376,037

Expenditures

Current:

General government:

Governing body:

Salaries and employee benefits 130,344 130,344 124,670 5,674

Special appropriations 128,500 271,450 185,756 85,694

Operating expenditures 204,325 171,825 150,373 21,452

Total 463,169 573,619 460,799 112,820

Administration:

Salaries and employee benefits 603,681 609,860 1,220,609 (610,749)


Total 721,723 722,702 1,314,437 (591,735)

Public Education Television (PEG):


Total 41,350 42,151 37,819 4,332

Information Technology:



Capital outlay 82,000 154,729 84,069 70,660

Total 1,631,353 1,670,335 1,323,034 347,301

Finance:



Total 1,316,067 1,321,467 1,267,281 54,186

Legal:


Total 220,749 220,749 212,729 8,020

Human resources:


Other operating expenditures 84,824 107,574 89,151 18,423

Total 560,896 579,146 527,718 51,428

Reimbursement from enterprise funds (2,929,462) (2,929,462) (2,929,462) ‐

Total general government 2,025,845 2,200,707 2,214,355 (13,648)

continued

Budget Variance With

Original


90

GENERAL FUND





Public Safety:

Police:

Salaries and employee benefits $ 8,183,542 $ 8,559,593 $ 8,374,071 $ 185,522

Operating expenditures 1,428,080 1,471,080 1,390,864 80,216

Capital outlay 355,984 521,274 379,054 142,220

Total 9,967,606 10,551,947 10,143,989 407,958

Fire Department:

Salaries and employee benefits 5,460,258 5,518,799 5,410,401 108,398


Capital outlay 201,350 213,350 209,578 3,772

Total 6,243,644 6,333,839 6,188,720 145,119

E911 Support:


Capital outlay 1,000 500 ‐ 500

Total 131,984 131,984 127,449 4,535

Total public safety 16,343,234 17,017,770 16,460,158 557,612

Public works:

Streets:



Capital outlay 492,000 493,536 475,232 18,304

Total 3,481,251 5,117,771 4,492,909 624,862

Public buildings:



Capital outlay ‐ 62,000 28,875 33,125

Total 896,880 1,061,880 988,421 73,459

Administration:



Capital outlay 104,000 112,000 104,905 7,095

Total 1,138,531 1,151,115 1,095,751 55,364

Leaf and limb:



Capital outlay ‐ 66,948 66,594 354

Total 2,844,069 2,946,814 2,887,130 59,684

Total public works 8,360,731 10,277,580 9,464,211 813,369

continued

Budget


Variance With

Original

91

GENERAL FUND





Cultural and recreation:

Parks and recreation:


Operating expenditures 947,555 1,149,943 1,022,694 127,249

Capital outlay 204,600 263,186 175,038 88,148

Total cultural and recreation 3,100,378 3,326,218 2,997,455 328,763

Economic and physical development:

Planning:



Capital outlay 59,000 71,000 63,767 7,233

Total 1,688,370 1,721,801 1,548,446 173,355

Municipal service district:

Operating expenditures 17,600 17,600 17,460 140

Total 17,600 17,600 17,460 140

Total economic and physical development 1,705,970 1,739,401 1,565,906 173,495

Debt Service:

Principal retirements 1,761,028 1,999,641 1,988,779 10,862

Interest 186,892 186,892 164,535 22,357

Total debt service 1,947,920 2,186,533 2,153,314 33,219


Deficiency of revenues

over expenditures (3,466,143) (6,494,414) (3,225,567) 3,268,847

Other financing sources (uses):


Transfers in 2,662,500 2,696,500 2,925,779 229,279

Transfers out (80,857) (1,243,993) (1,178,144) 65,849

Contingency (345,599) (705) ‐ 705

Installment purchase obligations issued 1,246,184 1,306,184 ‐ (1,306,184)

Total other financing sources (uses) 3,482,228 2,757,986 1,886,452 (871,534)

Revenues and other financing sources over

(under) expenditures and other financing uses 16,085 (3,736,428) (1,339,115) 2,397,313

Appropriated use of fund balance (16,085) 3,569,396 ‐ (3,569,396)

Net change in fund balances $ ‐ $ (167,032) (1,339,115) $ (1,172,083)

Fund balance, beginning of year 20,920,711

Adjustment to Statement of Revenues, Expenditures, and Changes in Fund Balance (GAAP):

Change in allowance for doubtful account receivable balances (9,692)

Fund balance, end of year $ 19,571,904

Budget Variance With

Original


92

COMMUNITY DEVELOPMENT

AND CHANGES IN FUND BALANCES ‐ BUDGET AND ACTUAL (NON‐GAAP BASIS)

Variance With

Original Final Actual Final Budget

REVENUES

Investment earnings $ ‐ $ ‐ $ 53 $ 53

Total revenues ‐ ‐ 53 53

EXPENDITURES

Economic and physical development

Operating expenditures 7,500 7,500 6,989 511

Deficiency of revenues over expenditures (7,500) (7,500) (6,936) 564

Appropriated fund balance 7,500 7,500 ‐ (7,500)

Net change in fund balances $ ‐ $ ‐ (6,936) $ (6,936)

FUND BALANCE, beginning of year 12,260

FUND BALANCE, end of year $ 5,324


SCHEDULE OF REVENUES, EXPENDITURES,


Budget

93

CITY OF NEW BERN, NORTH CAROLINAEMERGENCY TELEPHONE SYSTEM


Variance With


REVENUES

Restricted intergovernmental

Wireless 911 funds $ 321,127 $ 321,127 $ 321,127 $ ‐

Investment earnings 100 100 1,071 971

Total revenues 321,227 321,227 322,198 971

EXPENDITURES

Public safety


Total expenditures 384,345 384,345 329,534 54,811

Deficiency of revenues over expenditures (63,118) (63,118) (7,336) 55,782

OTHER FINANCING SOURCES


Transfers in ‐ 19,830 19,830 ‐

Total other financing sources 63,118 63,118 19,830 (43,288)

Net change in fund balances $ ‐ $ ‐ 12,494 $ 12,494





Budget

94

CITY OF NEW BERN, NORTH CAROLINAPOLICE SPECIAL REVENUE


Variance With


REVENUES


Police grants $ 11,000 $ 11,000 $ 16,817 $ 5,817

Investment earnings 15 15 91 76

Total revenues 11,015 11,015 16,908 5,893

EXPENDITURES

Public safety



Net change in fund balances $ ‐ $ ‐ 11,496 $ 11,496




Budget


95

CITY OF NEW BERN, NORTH CAROLINAGRANTS SPECIAL REVENUE


Variance With


REVENUES


Police grants $ ‐ $ 64,546 $ 4,053 $ (60,493)

Fire grants ‐ 14,000 2,000 (12,000)

Culture and recreational ‐ 6,500 6,500 ‐

Total revenues ‐ 85,046 12,553 (72,493)

EXPENDITURES

Public safety

Operating expenditures ‐ 106,179 39,250 66,929

Cultural and recreational

Operating expenditures ‐ 6,500 4,424 2,076


Operating expenditures 50,000 50,000 ‐ 50,000




Transfers in 50,000 59,952 9,953 (49,999)

Appropriated fund balance ‐ 17,681 ‐ (17,681)

Total other financing sources 50,000 77,633 9,953 (67,680)






Budget

96

GLENBURNIE ROAD MULTI‐USE PATH PROJECT


Project

Authorization Prior Years Current Year Total

REVENUES


NC Department of Transportation $ 457,380 $ 462,119 $ ‐ $ 462,119

Miscellaneous ‐ 9,226 ‐ 9,226

Total revenues 457,380 471,345 ‐ 471,345

EXPENDITURES


Capital outlay ‐ right of way 17,098 17,097 4,739 21,836

Capital outlay ‐ construction 445,022 454,248 ‐ 454,248


Deficiency of revenues over expenditures (4,740) ‐ (4,739) (4,739)


Transfers in 4,740 ‐ 4,739 4,739

Net change in fund balance $ ‐ ‐ ‐ $ ‐

FUND BALANCE, beginning of year ‐ ‐

FUND BALANCE, end of year $ ‐ $ ‐



PROJECT LIFE AS OF JUNE 30, 2018

Actual

97

CITY OF NEW BERN, NORTH CAROLINAPUBLIC‐PRIVATE PARTNERSHIP


Variance With


EXPENDITURES


Operating expenditures $ 7,500 $ 7,500 $ 7,500 $ ‐

Total expenditures 7,500 7,500 7,500 ‐

Deficiency of revenues over expenditures (7,500) (7,500) (7,500) ‐


Transfers in 7,500 7,500 7,500 ‐

Total other financing sources 7,500 7,500 7,500 ‐

Net change in fund balances $ ‐ $ ‐ ‐ $ ‐

FUND BALANCE, beginning of year ‐

FUND BALANCE, end of year $ ‐

Budget



98

FEMA HURRICANE IRENE


Project


REVENUES


Federal Public Assistance Disaster grant $ 142,149 $ 110,226 $ ‐ $ 110,226

State Public Assistance Disaster grant 47,383 36,742 ‐ 36,742

Miscellaneous 78,112 78,112 ‐ 78,112

Total revenues 267,644 225,080 ‐ 225,080

EXPENDITURES

Public works


Total expenditures 267,644 225,080 ‐ 225,080





Actual



99

2012 CDBG NC CATALYST


Project


REVENUES


NC Department of Commerce $ 500,000 $ 500,000 $ ‐ $ 500,000

Total revenues 500,000 500,000 ‐ 500,000

EXPENDITURES




Deficiency of revenues over expenditures (50,157) (50,157) ‐ (50,157)


Transfers in 105,000 105,000 ‐ 105,000

Transfers out (54,843) ‐ (54,843) (54,843)

Total other financing sources (uses) 50,157 105,000 (54,843) 50,157

Net change in fund balance $ ‐ 54,843 (54,843) $ ‐

FUND BALANCE, beginning of year ‐ 54,843

FUND BALANCE, end of year $ 54,843 $ ‐


Actual



100

CITY OF NEW BERN, NORTH CAROLINAMETROPOLITAN PLANNING GRANT (MPO)


Variance With


REVENUES


NC Department of Transportation $ 199,643 $ 199,643 $ 72,255 $ (127,388)

Total revenues 199,643 199,643 72,255 (127,388)

EXPENDITURES





Deficiency of revenues over expenditures (23,357) (23,357) (7,650) (270,483)


Transfers in 23,357 23,357 8,280 (15,077)

Transfers out ‐ ‐ (826) (826)

Total other financing sources (uses) 23,357 23,357 7,454 (15,903)

Net change in fund balances $ ‐ $ ‐ (196) $ (286,386)





Budget

101

ENTITLEMENT CITIES CDBG PROGRAM


Project


REVENUES


NC Department of Commerce $ 774,114 $ 481,193 $ 220,195 $ 701,388

Total revenues 774,114 481,193 220,195 701,388

EXPENDITURES




Net change in fund balance $ ‐ (34,463) 27,653 $ (6,810)

FUND BALANCE (DEFICIT), beginning of year ‐ (34,463)

FUND DEFICIT (DEFICIT), end of year $ (34,463) $ (6,810)




Actual

102

NEUSE BOULEVARD SIDEWALK IMPROVEMENTS ‐ PHASE II


Project


REVENUES


NC Department of Transportation $ 454,659 $ 462,770 $ ‐ $ 462,770

Total revenues 454,659 462,770 ‐ 462,770

EXPENDITURES


Capital outlay ‐ right of way 65,124 65,124 8,111 73,235

Capital outlay ‐ construction 397,646 397,646 ‐ 397,646




Transfers in 8,111 ‐ 8,111 8,111

Total other financing sources 8,111 ‐ 8,111 8,111







Actual

103

CITY OF NEW BERN, NORTH CAROLINAEQUITABLE SHARING U.S. DEPARTMENT OF JUSTICE


Variance With


REVENUES


Police grants $ 12,072 $ 12,072 $ 7,426 $ (4,646)

Investment earnings 76 76 310 234

Total revenues 12,148 12,148 7,736 (4,412)

EXPENDITURES

Public safety






Total other financing sources 43,117 43,117 ‐ (43,117)






Budget

104

CITY OF NEW BERN, NORTH CAROLINANEUSE RIVER GATEWAY


Project


REVENUES


State grant $ 75,000 $ ‐ $ ‐ $ ‐

Total revenues 75,000 ‐ ‐ ‐

EXPENDITURES


Capital outlay 125,000 ‐ 28,141 28,141

Total expenditures 125,000 ‐ 28,141 28,141



Transfers in 50,000 50,000 ‐ 50,000

Total other financing sources 50,000 50,000 ‐ 50,000

Net change in fund balance $ ‐ 50,000 (28,141) $ 21,859


FUND BALANCE, end of year $ 50,000 $ 21,859



Actual

105

CITY OF NEW BERN, NORTH CAROLINACITY MARKET WORKFORCE DEVELOPMENT


Project


REVENUES


State grant $ 1,373,250 $ ‐ $ 75,000 $ 75,000

Miscellaneous 549,000 109,800 ‐ 109,800

Total revenues 1,922,250 109,800 75,000 184,800

EXPENDITURES


Capital outlay ‐ construction 2,856,500 ‐ 104,887 104,887

Total expenditures 2,856,500 ‐ 104,887 104,887

Excess (deficiency ) of revenues over expenditures (934,250) 109,800 (29,887) 79,913


Transfers in 314,843 ‐ 314,843 314,843

Installment purchase obligations issued 619,407 ‐ ‐ ‐


Net change in fund balance $ ‐ 109,800 284,956 $ 394,756





Actual

106

CITY OF NEW BERN, NORTH CAROLINAUNION STATION TRAIN DEPOT


Variance With


REVENUES

Contributions

NC Department of Transportation $ 187,500 $ 218,000 $ 65,208 $ (152,792)

Total revenues 187,500 218,000 65,208 (152,792)

EXPENDITURES




Net change in fund balances $ ‐ $ ‐ 24,087 $ (329,671)

FUND BALANCE, beginning of year ‐



Budget


107

MSD IMPROVEMENT


Project


REVENUES

Investment earnings $ 82 $ 56 $ 26 $ 82

Total revenues 82 56 26 82

EXPENDITURES

Public works





Transfers out (50,723) ‐ (50,723) (50,723)

Installment purchase obligations issued 800,000 800,000 ‐ 800,000

Total other financing sources (uses) 749,277 800,000 (50,723) 749,277

Net change in fund balance $ ‐ 232,315 (232,315) $ ‐


FUND BALANCE, end of year $ 232,315 $ ‐




Actual

108

GENERAL CAPITAL PROJECTS


Project


EXPENDITURES

General government

Capital outlay $ 930,370 $ 744,537 $ 32,958 $ 777,495




Transfers in 930,370 815,368 115,000 930,368

Total other financing sources 930,370 815,368 115,000 930,368

Net change in fund balance $ ‐ 70,831 82,042 $ 152,873






Actual

109

IT NETWORK MERGER


Project


EXPENDITURES


Engineering services $ 150,000 $ 110,440 $ ‐ $ 110,440

Capital outlay 335,500 369,129 17,240 386,369

Contingency 35,000 ‐ ‐ ‐




Transfer from other funds ‐ 520,500 ‐ 520,500

Issuance of long‐term debt 520,500 ‐ ‐ ‐

Total other financing sources 520,500 520,500 ‐ 520,500

Net change in fund balance $ ‐ 40,931 (17,240) $ 23,691






Actual

110

DRAINAGE IMPROVEMENTS PROJECT


Project


REVENUES



EXPENDITURES

Public works

Capital outlay 1,500,000 ‐ 312,343 312,343


Deficiency of revenues over expenditures (1,500,000) ‐ (311,902) (311,902)


Installment purchase obligations issued 1,500,000 ‐ 1,500,000 1,500,000

Net change in fund balance $ ‐ ‐ 1,188,098 $ 1,188,098


FUND BALANCE, end of year $ ‐ $ 1,188,098




Actual

111

2017 ROADWAY IMPROVEMENTS PROJECT


Project


REVENUES


NC Department of Transportation $ 687,000 $ ‐ $ ‐ $ ‐

Total revenues 687,000 ‐ ‐ ‐

EXPENDITURES

Public works

Capital outlay 4,210,000 ‐ 20,564 20,564




Transfers in 660,000 ‐ 660,000 660,000

Installment purchase obligations issued 2,863,000 ‐ ‐ ‐

Total other financing sources 3,523,000 ‐ 660,000 660,000

Net change in fund balance $ ‐ ‐ 639,436 $ 639,436


FUND BALANCE, end of year $ ‐ $ 639,436


Actual



112

MARTIN MARIETTA PARK PROJECT


Project


EXPENDITURES

Public works

Capital outlay $ 50,000 $ ‐ $ 38,127 $ 38,127




Transfers in 50,000 ‐ 50,000 50,000








Actual

113

ERP PROJECT


Project


REVENUES



EXPENDITURES

Public works

Capital outlay 1,350,000 ‐ 219,163 219,163




Installment purchase obligations issued 1,350,000 ‐ 257,534 257,534






Actual


114

GARAGE RELOCATION PROJECT


Project


REVENUES



EXPENDITURES

Public works

Capital outlay 850,000 ‐ 25,518 25,518




Transfers in 30,000 ‐ 30,000 30,000

Installment purchase obligations issued 820,000 ‐ 820,000 820,000






Actual



115

ALEXANDER THALMANN FIELD


Project


EXPENDITURES

Culture and recreation

Capital outlay $ 175,503 $ 174,732 $ ‐ $ 174,732


Deficiency of revenues over expenditures (175,503) (174,732) ‐ (174,732)


Transfers in 175,503 170,000 4,732 174,732

Total other financing sources 175,503 170,000 4,732 174,732

Net change in fund balance $ ‐ (4,732) 4,732 $ ‐

FUND BALANCE (DEFICIT), beginning of year ‐ (4,732)

FUND BALANCE (DEFICIT), end of year $ (4,732) $ ‐



Actual


116

CITY OF NEW BERN, NORTH CAROLINAELECTRIC FUND

AND CHANGES IN NET POSITION ‐ BUDGET AND ACTUAL (NON‐GAAP BASIS)

Variance With


REVENUES

Operating revenues

Electric charges $ 52,176,075 $ 52,329,774 $ 53,660,543 $ 1,330,769

Nonoperating revenues


Interfund reimbursements 1,380,191 1,380,191 1,380,191 ‐

Miscellaneous 2,500 2,500 217,554 215,054

Total revenues 53,584,131 53,737,830 55,386,549 1,648,719

EXPENDITURES

Administration 3,743,414 3,750,024 3,125,581 624,443

Production 37,665,580 37,670,669 36,981,614 689,055

Distribution 3,828,475 4,030,715 3,653,694 377,021

Reimbursed expenditures ‐ General Fund 1,248,941 1,248,941 1,248,941 ‐

Capital outlay 2,053,000 2,836,029 2,489,659 346,370

Debt service 1,856,398 1,857,498 1,856,633 865


Excess of revenues over expenditures 3,188,323 2,343,954 6,030,427 3,686,473



Appropriated fund balance ‐ 1,222,286 ‐ (1,222,286)

Transfers out (2,838,929) (3,213,929) (3,316,841) 102,912

Transfers out ‐ payment in lieu of taxes (349,394) (352,311) (352,310) (1)

Total other financing sources (uses) (3,188,323) (2,343,954) (3,626,389) (1,076,613)

Net change in fund balance $ ‐ $ ‐ 2,404,038 $ 2,609,860

Adjustments to full accrual:

Capital outlays 2,703,762

Donated capital assets 1,086,625

Payments of debt service ‐ principal 1,640,481

Decrease in accrued interest 3,901

Increase in compensated absences 11,856

Bad debt expense (144,332)

Change in net pension liability and related deferred inflows/outflows of resources 16,707

Disposal of capital assets (14,337)


Electric Rate Stabilization Fund 184,783

Allocated share of AMI/DSM System Enterprise Capital Project Fund (701,270)

Change in net position $ 4,857,124



Budget

117

CITY OF NEW BERN, NORTH CAROLINAELECTRIC RATE STABILIZATION FUND


Variance With


REVENUES

Interest $ ‐ $ ‐ $ 8,354 $ 8,354

Excess of revenues over expenditures


Transfers in 176,429 176,429 176,429 ‐

Transfers out (176,429) (176,429) ‐ 176,429

Total other financing sources (uses) ‐ ‐ 176,429 176,429

Net change in fund balances and net position $ ‐ $ ‐ $ 184,783 $ 184,783

Budget


FROM INCEPTION AND FOR THE FISCAL YEAR ENDED JUNE 30, 2018

118

WATER FUND


Variance With


REVENUES

Operating revenues

Rates and charges $ 9,830,000 $ 9,830,000 $ 9,832,073 $ 2,073



Interfund reimbursements 289,586 289,586 289,586 ‐

Miscellaneous 252,000 327,000 324,971 (2,029)

Total revenues 10,386,761 10,461,761 10,500,556 38,795

EXPENDITURES

Administration 579,171 579,171 541,698 37,473

System maintenance and extensions 2,342,853 2,424,153 2,123,250 300,903

Reimbursed expenditures ‐ General Fund 1,484,590 1,484,590 1,484,590 ‐

Treatment 2,352,939 2,349,690 2,062,501 287,189

Capital outlay 200,000 200,000 78,679 121,321

Debt service 3,002,092 3,053,877 3,053,495 382

Total expenditures 9,961,645 10,091,481 9,344,213 747,268

Excess (deficiency) of revenues over expenditures 425,116 370,280 1,156,343 786,063


Proceeds from sale of capital assets ‐ ‐ 437 437

Proceeds from installment note issuance ‐ ‐ 50,000 50,000

Transfers out (250,000) (1,552,737) (991,535) 561,202

Transfers out ‐ payment in lieu of taxes (297,344) (300,093) (300,092) 1

Budgeted use of fund balance 122,228 1,482,550 ‐ (1,482,550)

Total other financing sources (uses) (425,116) (370,280) (1,241,190) (870,910)

Net change in fund balance $ ‐ $ ‐ (84,847) $ (84,847)


Capital outlays 78,679


Proceeds from installment note issuance (50,000)


Change in compensated absences (9,202)

Change in net pension liability and related deferred inflows/outflows of resources 17,926

Change in accrued interest 7,685



Water Capital Reserve Fund (284,678)

West New Bern Water System Improvement Fund (40,588)

2017 Water Improvement Project Fund (367,370)

Water Resource Relocation Project Fund (1,214,132)

Allocated share of AMI/DSM System Enterprise Capital Project Fund 327,075


Budget




119

CITY OF NEW BERN, NORTH CAROLINAWATER CAPITAL RESERVE FUND


Variance With


REVENUES

Capital recovery fee $ ‐ $ ‐ $ ‐ $ ‐

Interest 1,425 1,425 8,059 6,634

Total revenues 1,425 1,425 8,059 6,634

EXPENDITURES

Capital outlays 251,425 326,425 ‐ 326,425

Excess of revenues over expenditures (250,000) (325,000) 8,059 333,059


Transfers in 250,000 325,000 325,000 ‐

Transfers out ‐ (617,737) (617,737) ‐

Appropriated fund balance ‐ 617,737 ‐ (617,737)

Total other financing sources (uses) 250,000 325,000 (292,737) (617,737)

Net change in fund balance and net position $ ‐ $ ‐ $ (284,678) $ (284,678)



Budget

120

CITY OF NEW BERN, NORTH CAROLINAWEST NEW BERN WATER SYSTEM IMPROVEMENT CAPITAL PROJECT FUND


Actual

Prior Current Variance With

Authorization Year Year Total Final Budget

EXPENDITURES

Capital outlays $ 385,000 $ 171,788 $ 40,588 $ 212,376 $ 172,624


Transfer in 385,000 ‐ ‐ ‐ (385,000)

Net change in fund balance $ ‐ $ (171,788) $ (40,588) $ (212,376) $ (212,376)


Project


121

CITY OF NEW BERN, NORTH CAROLINA2017 WATER IMPROVEMENT PROJECT FUND


Actual



EXPENDITURES

Treatment $ 2,187,737 $ 911,726 $ 985,107 $ 1,896,833 $ 290,904


Transfer in 2,187,737 1,570,000 617,737 2,187,737 ‐

Net change in fund balance $ ‐ $ 658,274 $ (367,370) $ 290,904 $ 290,904


Project


122

CITY OF NEW BERN, NORTH CAROLINAWATER RESOURCE RELOCATION PROJECT FUND


Actual



EXPENDITURES

Distribution $ 1,440,000 $ 16,135 $ 1,214,132 $ 1,230,267 $ 209,733


Transfer in 1,440,000 1,440,000 ‐ 1,440,000 ‐

Net change in fund balance $ ‐ $ 1,423,865 $ (1,214,132) $ 209,733 $ 209,733



Project

123

CITY OF NEW BERN, NORTH CAROLINASEWER FUND


Variance With


REVENUES

Operating revenues

Sewer charges $ 11,103,000 $ 11,103,000 $ 11,079,351 $ (23,649)


Intergovernmental ‐ ‐ ‐ ‐

Interest 534,714 534,714 53,685 (481,029)

Miscellaneous 325,250 550,250 554,288 4,038

Total revenues 11,962,964 12,187,964 11,687,324 (500,640)

EXPENDITURES

System maintenance and extension 3,278,581 3,943,970 2,985,650 958,320

Treatment 3,055,342 3,092,122 2,740,247 351,875

Shared services 1,807,944 1,807,944 1,807,944 ‐

Capital outlay 647,000 626,950 593,314 33,636

Debt service 2,696,177 3,070,223 3,068,156 2,067


Excess (deficiency) of revenues over expenditures 477,920 (353,245) 492,013 845,258


Appropriation of net position 131,124 1,238,129 ‐ (1,238,129)

Proceeds from installment purchase issuance 397,000 397,000 50,000 (347,000)

Proceeds from sale of capital assets 500 500 14,322 13,822

Transfers out ‐ payment in lieu of taxes (438,647) (439,487) (439,486) 1

Transfers out (567,897) (842,897) (888,756) (45,859)

Total other financing sources (uses) (477,920) 353,245 (1,263,920) (1,617,165)

Net change in fund balance $ ‐ $ ‐ (771,907) $ (771,907)


Capital outlays 593,314


Proceeds from installment note issuance (50,000)


Increase in compensated absences (10,361)

Change in net pension liability and related deferred inflows/outflows of resources (14,881)



Change in accrued interest payable 9,267

Township 7 Sewer Improvements Capital Fund (29,987)

2017 Sewer Improvement Project Fund (870,443)

Sewer Debt Service Reserve Fund 250,115

Sewer Capital Reserve Fund (57,511)




Budget

124

CITY OF NEW BERN, NORTH CAROLINASEWER CAPITAL RESERVE FUND


Variance With


REVENUES

Capital recovery fee $ ‐ $ ‐ $ ‐ $ ‐

Interest 1,830 1,830 3,548 1,718

Total revenues 1,830 1,830 3,548 1,718

EXPENDITURES

Capital outlays 326,830 551,830 ‐ 551,830


Excess of revenues over expenditures (325,000) (550,000) 3,548 553,548


Appropriation of fund balance ‐ 611,059 ‐ (611,059)

Transfers in 325,000 550,000 550,000 ‐

Transfers out ‐ (611,059) (611,059) ‐

Total other financing sources (uses) 325,000 550,000 (61,059) (611,059)

Net change in fund balance $ ‐ $ ‐ $ (57,511) $ (57,511)


Budget


125

CITY OF NEW BERN, NORTH CAROLINATOWNSHIP 7 SEWER IMPROVEMENTS CAPITAL PROJECT FUND


Actual



EXPENDITURES

Treatment $ 450,000 $ 269,232 $ 79,987 $ 349,219 $ 100,781


Transfer in 450,000 400,000 50,000 450,000 ‐

Net change in fund balance $ ‐ $ 130,768 $ (29,987) $ 100,781 $ 100,781

Project



126

CITY OF NEW BERN, NORTH CAROLINA2017 SEWER IMPROVEMENT PROJECT


Actual



EXPENDITURES

Treatment $ 2,011,059 $ 223,600 $ 1,481,502 $ 1,705,102 $ 305,957


Transfer in 2,011,059 1,400,000 611,059 2,011,059 ‐

Net change in fund balance $ ‐ $ 1,176,400 $ (870,443) $ 305,957 $ 305,957



Project

127

CITY OF NEW BERN, NORTH CAROLINASEWER DEBT SERVICE RESERVE FUND


Variance With


REVENUES

Interest $ ‐ $ ‐ $ 7,218 $ 7,218

Total revenues ‐ ‐ 7,218 7,218

EXPENDITURES

Debt service 242,897 242,897 ‐ 242,897


Excess (deficiency) of revenues over expenditures (242,897) (242,897) 7,218 250,115


Transfers in 242,897 242,897 242,897 ‐

Total other financing sources 242,897 242,897 242,897 ‐

Net change in fund balance $ ‐ $ ‐ $ 250,115 $ 250,115



Budget

128

STORMWATER FUND


Variance With


REVENUES

Operating revenues

Rates and charges $ 677,000 $ 677,000 $ 693,316 $ 16,316


Investment earnings ‐ ‐ 1,761 1,761

Total revenues 677,000 677,000 695,077 18,077

EXPENDITURES

Stormwater system maintenance 528,815 983,815 472,973 510,842

Reimbursed expenditures ‐ General Fund 57,764 57,764 57,764 ‐

Debt service 90,421 90,421 89,051 1,370

Total expenditures 677,000 1,132,000 619,788 512,212

Excess (deficiency) of revenues over expenditures ‐ (455,000) 75,289 530,289


Appropriated use of fund balance ‐ 205,000 ‐ (205,000)

Proceeds from installment purchase ‐ 250,000 ‐ (250,000)

Capital contribution ‐ ‐ 312,343 312,343

Transfer out ‐ ‐ (6,425) (6,425)

Total other financing sources (uses) ‐ 455,000 305,918 (149,082)

Net change in fund balance $ ‐ $ ‐ 381,207 $ 381,207


Payments of debt service ‐ principal 78,757

Increase in compensated absences (1,003)

Decrease in net pension liability (1,699)

Decrease in accrued interest 311

Change in allowance for doubtful accounts (2,629)

Depreciation expense (78,539)

Change in net position $ 376,405




Budget

129

AMI/DSM SYSTEM ENTERPRISE CAPITAL PROJECT FUND


Project


REVENUES

Investment earnings $ 21,000 $ 16,112 $ 10,355 $ 26,467

Total revenues 21,000 16,112 10,355 26,467

EXPENDITURES

Professional services ‐ Electric Fund 107,253 153,580 ‐ 153,580

Professional services ‐ Water Fund 68,498 68,498 ‐ 68,498

Capital outlay ‐ Electric Fund 3,444,136 5,334,050 1,086,625 6,420,675

Capital outlay ‐ Water Fund 6,390,813 1,872,616 282,925 2,155,541

Debt service ‐ interest and fiscal charges 45,300 45,300 ‐ 45,300


Deficiency of revenues over expenditures (10,035,000) (7,457,932) (1,359,195) (8,817,127)


Transfer in 1,250,100 265,100 985,000 1,250,100

Debt issued ‐ Electric Fund 5,677,000 5,677,000 ‐ 5,677,000

Debt issued ‐ Water Fund 3,107,900 3,107,900 ‐ 3,107,900

Total other financing sources 10,035,000 9,050,000 985,000 10,035,000

Net change in fund balance ‐ 1,592,068 (374,195) 1,217,873

FUND BALANCE, beginning of year ‐ ‐ 1,592,068 ‐

FUND BALANCE, end of year $ ‐ $ 1,592,068 $ 1,217,873 $ 1,217,873




Actual

130

KALE ROAD PROJECT ENTERPRISE CAPITAL PROJECT FUND


Project


EXPENDITURES

Kale Road capital outlay ‐ Electric Fund $ 1,633,181 $ 1,644,997 $ ‐ $ 1,644,997

Total expenditures 1,633,181 1,644,997 ‐ 1,644,997


Transfer in ‐ Water Capital Reserve 40,900 40,900 ‐ 40,900

Transfer in ‐ Electric Fund ‐ 11,816 ‐ 11,816

Transfer out (2,819) (2,819) ‐ (2,819)

Debt issued ‐ Electric Fund 1,595,100 1,554,200 ‐ 1,554,200

Debt issued ‐ Sewer Fund ‐ 40,900 ‐ 40,900

Total other financing sources (uses) 1,633,181 1,644,997 ‐ 1,644,997

Net change in fund balance ‐ ‐ ‐ ‐

FUND BALANCE, beginning of year ‐ ‐ ‐ ‐

FUND BALANCE, end of year $ ‐ $ ‐ $ ‐ $ ‐


Actual



131

SCHEDULE OF AD VALOREM TAXES RECEIVABLE

Uncollected UncollectedBalance Collections Balance

Fiscal Year June 30, 2017 Additions And Credits June 30, 2018

2017-2018 $ - $ 14,275,238 $ 14,187,716 $ 87,522 2016-2017 94,728 - 49,480 45,248 2015-2016 43,143 - 12,946 30,198 2014-2015 24,200 - 7,182 17,018 2013-2014 38,032 - 4,701 33,331 2012-2013 47,278 - 2,525 44,753 2011-2012 32,134 - 1,513 30,621 2010-2011 26,934 - 1,478 25,456 2009-2010 26,813 - 1,620 25,193 2008-2009 30,932 - 993 29,938 2007-2008 27,408 - 27,408 -

$ 391,603 $ 14,275,238 $ 14,297,562 369,279

Plus: Municipal Service District taxes receivable, all years, net of allowance 676 Plus: Ad Valorem Un-Tagged MV-Current 381 Plus: Penalties 13,193 Plus: Taxes collected but not received from the County 76,983 Less: allowance for uncollectible accounts - General Fund (214,391)

Ad valorem taxes receivable - net $ 246,121

Reconciliation to revenues:

Ad valorem taxes - General Fund $ 14,600,912 Reconciling items: Interest collected (40,814) Amounts written off per statute 27,408 Releases, ad valorem (90,282) Less Municipal Services District taxes, penalty, and interested collected in all years (199,662) Total collections and credits $ 14,297,562

JUNE 30, 2018


132

Propertyexcluding

Registered Registered

Total Motor Motor

Rate Levy Vehicles VehiclesOriginal levy:

Property taxed at current rate $ 2,794,481,360 0.46 $ 14,016,704 12,854,615$ 1,162,089$ Penalties ‐ 7,641 7,641 ‐

Total 2,794,481,360 14,024,345 12,862,256 1,162,089

Discoveries: Current year taxes 57,700,111 0.46 264,304 264,304 ‐ Penalties ‐ 9,858 9,858 ‐ Addbacks ‐ 3,301 3,301 ‐

Total 57,700,111 277,463 277,463 ‐

Adjustments (5,038,653) 0.46 (26,570) (26,570) ‐ Total property valuation $ 2,847,142,818

Net levy 14,275,238 13,113,149 1,162,089

Uncollected taxes at June 30, 2018 (87,522) (87,522) ‐

Current year's taxes collected 14,187,716$ 13,025,627$ 1,162,089$

Current levy collection percentage 99.39% 99.33% 100.00%

Property

Valuation

City ‐ Wide


ANALYSIS OF CURRENT TAX LEVY

CITY‐WIDE LEVY

JUNE 30, 2018

Total Levy

133

STATISTICAL SECTION

STATISTICAL SECTION

This part of the City of New Bern’s comprehensive annual financial report presents detailed information as a context for

understanding what the information in the financial statements, note disclosures, and required supplementary information says

about the City’s overall financial health.

Page

Financial Trends ................................................................................................................................................................ 134

These schedules contain trend information to help the reader understand how the City’s financial performance and

well‐being have changed over time.

Revenue Capacity.............................................................................................................................................................. 155

These schedules contain information to help the reader assess the City’s most significant local revenue source,

property tax.

Debt Capacity ................................................................................................................................................................... 159

These schedules present information to help the reader assess the affordability of the City’s current levels of

outstanding debt and the City’s ability to issue additional debt in the future. Demographic and Economic Information ........................................................................................................................... 163

These schedules offer demographic and economic indicators to help the reader understand the environment within

which the City’s financial activities take place. Operating Information ...................................................................................................................................................... 165

These schedules contain service and infrastructure data to help the reader understand how the information in the

City’s financial report relates to the services the City provides and the activities it performs.

Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual

financial report for the relevant year.

City of New Bern, North Carolina

Net Position By ComponentLast Ten Fiscal Years

(Accrual Basis of Accounting)(Unaudited)

2009 2010 2011 2012Governmental activities:Net investment in capital assets 32,315,686 $ 31,419,739 $ 34,018,646 $ 34,826,041 $ Restricted ‐ ‐ 3,840,612 4,317,526 Unrestricted 4,219,981 3,051,269 760,319 1,952,892

Total governmental activities net position 36,535,667 $ 34,471,008 $ 38,619,577 $ 41,096,459 $

Business‐type activities:Net investment in capital assets 73,993,249 $ 76,160,558 $ 78,578,999 $ 80,159,948 $ Restricted ‐ ‐ ‐ ‐ Unrestricted 7,218,811 14,211,130 21,659,418 23,829,737

Total business‐type activities net position 81,212,060 $ 90,371,688 $ 100,238,417 $ 103,989,685 $

Primary government:Net investment in capital assets 106,308,935 $ 107,580,297 $ 112,597,645 $ 114,985,989 $ Restricted ‐ ‐ 3,840,612 4,317,526 Unrestricted 11,438,792 17,262,399 22,419,737 25,782,629

Total primary government net position 117,747,727 $ 124,842,696 $ 138,857,994 $ 145,086,144 $

Note ‐ Fiscal year 2017 was restated to reflect the retro‐implementation of GASB Statement No. 75.

134

2013 2014 2015 2016 2017‐restated 2018

36,383,138 $ 36,694,879 $ 35,607,933 $ 48,007,347 $ 50,662,101 $ 52,136,675 $ 5,611,591 6,851,966 6,181,074 5,857,526 6,961,125 6,853,285 4,312,131 5,165,362 10,288,946 8,732,911 (20,954,516) (21,498,772)

46,306,860 $ 48,712,207 $ 52,077,953 $ 62,597,784 $ 36,668,710 $ 37,491,188 $

83,796,943 $ 87,019,064 $ 88,323,492 $ 92,187,192 $ 97,084,561 $ 105,972,773 $ ‐ ‐ ‐ ‐ 1,163,329 1,413,444

25,922,244 30,841,402 34,398,515 39,952,276 42,402,350 41,547,705

109,719,187 $ 117,860,466 $ 122,722,007 $ 132,139,468 $ 140,650,240 $ 148,933,922 $

120,180,081 $ 123,713,943 $ 123,931,425 $ 140,194,539 $ 147,746,662 $ 158,109,448 $ 5,611,591 6,857,966 6,181,074 5,857,526 8,124,454 8,266,729

30,234,375 36,006,764 44,687,461 48,685,187 21,447,834 20,048,933

156,026,047 $ 166,578,673 $ 174,799,960 $ 194,737,252 $ 177,318,950 $ 186,425,110 $

135


Changes In Net Position

Last Ten Fiscal Years

(Accrual Basis of Accounting)

(Unaudited)

2009 2010 2011 2012Expenses:Governmental activities:General government 1,607,896 $ 1,715,925 $ 1,959,814 $ 2,737,701 $ Public safety 16,013,462 17,093,862 15,232,805 15,127,179 Public works 4,473,588 4,376,173 3,970,149 5,223,903 Environmental protection 1,913,120 2,033,675 2,054,485 2,053,938 Culture and recreation 2,589,437 2,708,074 2,280,243 2,549,680 Economic and physical development 1,762,996 1,791,932 1,405,498 1,731,687 Interest on long‐term debt 536,679 563,132 518,903 509,077

Total governmental activities expenses 28,897,178 30,282,773 27,421,897 29,933,165

Business‐type activities:Electric 57,412,727 60,061,164 61,298,449 60,325,099 Water 5,688,144 6,331,408 6,699,559 9,195,478 Sewer 10,052,081 10,677,006 10,233,465 10,442,463 Stormwater ‐ ‐ ‐ 74,153

Total business‐type activities expenses 73,152,952 77,069,578 78,231,473 80,037,193 Total primary government expenses 102,050,130 107,352,351 105,653,370 109,970,358

Program revenue:Governmental activities:Charges for services:General government 2,734,955 2,919,172 3,158,508 1,945,596 Public safety 464,430 414,458 355,296 185,272 Public works 198,964 179,765 247,586 130,132 Environmental protection 1,502,513 1,550,860 1,861,267 2,149,340 Culture and recreation 98,533 133,105 133,623 167,033 Economic and physical development 6,000 3,300 1,600 565,279

Operating grants and contributions:General government ‐ ‐ ‐ ‐ Public safety 349,007 479,895 125,120 601,199 Public works 9,048 ‐ ‐ 1,320,993 Environmental protection 563 63,892 145,054 161,299 Culture and recreation 107,531 7,875 12,383 ‐ Economic and physical development 32,120 120,605 52,762 293,530

Capital grants and contributions:General government ‐ ‐ ‐ ‐ Public safety 105,509 89,130 542,146 397,053 Public works 824,445 738,519 754,012 834,142 Environmental protection ‐ ‐ ‐ ‐ Culture and recreation ‐ 27,186 460,082 ‐ Economic and physical development ‐ ‐ 758,500 ‐

Total governmental activities program revenue 6,433,618 6,727,762 8,607,939 8,750,868

136

2013 2014 2015 2016 2017 2018

2,980,543 $ 3,175,305 $ 3,687,719 $ 2,200,210 $ 2,370,566 $ 2,837,204 $ 15,660,542 15,369,029 14,532,403 15,545,847 18,360,960 18,258,916 2,998,765 4,295,470 4,927,792 5,694,763 6,969,663 10,829,385 (2) 1,663,347 1,825,829 1,616,542 2,152,786 2,669,329 ‐ (2) 2,497,152 2,503,892 2,508,718 3,467,082 2,944,815 3,414,130 2,378,028 2,077,157 1,954,457 3,278,649 2,312,188 1,902,842 365,826 342,703 384,309 283,245 173,584 160,982

28,544,203 29,589,385 29,611,940 32,622,582 35,801,105 37,403,459

57,737,100 59,713,453 57,874,790 47,214,077 48,964,225 46,482,917 8,677,687 8,665,646 8,503,552 7,916,627 8,395,327 8,338,702

10,830,003 9,727,442 9,945,031 9,406,883 9,564,628 10,384,998 671,691 633,072 551,635 610,819 661,680 628,260

77,916,481 78,739,613 76,875,008 65,148,406 67,585,860 65,834,877 106,460,684 108,328,998 106,486,948 97,770,988 103,386,965 103,238,336

1,554,015 1,591,361 1,282,636 642,598 269,579 297,137 519,536 337,912 270,426 225,570 250,973 299,447

987 11,000 ‐ 141,675 85,165 2,991,246 (2) 2,280,468 2,817,704 2,878,437 2,837,409 2,998,906 ‐ (2) 152,022 227,068 133,290 139,581 29,096 152,624 962,406 550,112 519,918 674,188 479,897 692,032

‐ 174,765 353,805 50,000 479,267 283,414 1,526,387 676,810 417,906 410,522 420,677 357,923 812,542 871,986 49,700 ‐ 9,164 ‐

‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 143,168 2,256 ‐ ‐

1,290,569 110,661 714,850 911,759 238,346 405,005

‐ ‐ 929,785 ‐ ‐ ‐ ‐ ‐ 26,845 ‐ ‐ ‐

323,776 ‐ 187,745 11,005,003 (1) 3,503,246 2,234,401 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,650,000 ‐ 68,424 80,260 835,465 ‐ ‐

9,422,708 7,437,803 7,988,771 17,876,026 8,764,316 9,363,229 (continued)

137


Changes In Net Position



(Unaudited)

2009 2010 2011 2012Business‐type activities:Charges for services:Electric 61,694,281 $ 64,846,861 $ 65,916,870 $ 60,516,535 $ Water 6,877,360 9,768,948 11,130,551 10,890,900 Sewer 11,406,773 12,383,344 12,298,288 12,091,162 Stormwater ‐ ‐ ‐ 87,917

Capital grants and contributions:Electric ‐ ‐ 44,523 ‐ Water 360,626 342,085 341,531 ‐ Sewer 841,156 449,829 303,631 ‐ Stormwater ‐ ‐ ‐ ‐

Operating grants and contributions:Electric ‐ ‐ ‐ 1,417,005 Water ‐ ‐ ‐ 273,795 Sewer ‐ ‐ ‐ 382,268 Stormwater ‐ ‐ ‐ ‐

Total business‐type activities program revenues 81,180,196 87,791,067 90,035,394 85,659,582 Total primary government program revenues 87,613,814 94,518,829 98,643,333 94,410,450

Net (expense) revenue:Governmental activities (22,463,560) (23,555,011) (18,813,958) (21,182,297) Business‐type activities 8,027,244 10,721,489 11,803,921 5,622,389

Total primary government net expense (14,436,316) (12,833,522) (7,010,037) (15,559,908)

(Continued)

138

2013 2014 2015 2016 2017 2018

61,909,426 $ 63,763,783 $ 62,405,986 $ 52,734,945 $ 52,680,023 $ 53,878,097 $ 10,431,265 10,423,585 10,582,049 10,147,159 10,025,195 10,157,044 11,945,804 11,669,211 10,869,545 11,946,470 11,355,551 11,633,639

712,500 675,590 673,773 681,209 716,117 693,316

‐ ‐ 33,208 ‐ ‐ ‐ ‐ 152,400 ‐ ‐ ‐ ‐ ‐ 233,027 76,311 ‐ ‐ ‐ ‐ 1,014,571 5,285 ‐ ‐ 312,343

539,058 171,545 24,883 ‐ ‐ ‐ 177,669 245,689 295,774 ‐ ‐ ‐ 358,422 422,744 978,027 ‐ ‐ ‐

452 ‐ 240 ‐ ‐ ‐ 86,074,596 88,772,145 85,945,081 75,509,783 74,776,886 76,674,439 95,497,304 96,209,948 93,933,852 93,385,809 83,541,202 86,037,668

(19,121,495) (22,151,582) (21,623,169) (14,746,556) (27,036,789) (28,040,230) 8,158,115 10,032,532 9,070,073 10,361,377 7,191,026 10,839,562

(10,963,380) (12,119,050) (12,553,096) (4,385,179) (19,845,763) (17,200,668) (continued)

139


Changes In Net Position (Continued)



(Unaudited)

2009 2010 2011 2012General revenues and other changes in net position:Governmental activities:Taxes:Ad valorem taxes 11,976,146 $ 12,043,657 $ 12,919,994 $ 13,315,629 $ Sales taxes 4,992,972 4,707,615 4,892,122 5,331,248 Utility franchise tax 1,455,896 1,482,365 1,520,306 1,408,725 Payment in Lieu of Taxes ‐ ‐ ‐ ‐ Other taxes 1,672,945 1,663,842 1,658,465 1,702,043

Investment earnings 56,074 12,916 16,880 16,472 Miscellaneous ‐ ‐ ‐ ‐ Gain on sale of capital assets ‐ ‐ ‐ ‐ Transfers 2,237,407 1,579,957 1,954,758 1,885,062

Total governmental activities 22,391,440 21,490,352 22,962,525 23,659,179

Business‐type activities:Investment earnings 20,914 18,096 17,566 13,941 Miscellaneous ‐ ‐ ‐ ‐ Gain on sale of capital assets ‐ ‐ ‐ ‐ Transfers (2,237,407) (1,579,957) (1,954,758) (1,885,062)

Total business‐type activities (2,216,493) (1,561,861) (1,937,192) (1,871,121) Total primary government 20,174,947 19,928,491 21,025,333 21,788,058

Changes in net position:Governmental activities (72,120) (2,064,659) 4,148,567 2,476,882 Business‐type activities 5,810,751 9,159,628 9,866,729 3,751,268

Total primary government 5,738,631 $ 7,094,969 $ 14,015,296 $ 6,228,150 $

(1) During the 2016 fiscal year the City received significantly more donated roadways than in prior years.(2) During the 2018 fiscal year, sanitation services were brought into the public works function for budget purposes.

140

2013 2014 2015 2016 2017 2018

13,251,107 $ 13,701,543 $ 13,696,904 $ 13,817,232 $ 14,159,750 $ 14,575,810 $ 6,039,107 6,231,042 5,881,437 6,352,004 6,589,457 6,837,929 1,406,786 1,573,495 2,013,029 2,064,744 2,000,811 2,018,691 860,496 863,337 901,752 931,965 1,067,816 1,096,711 315,351 278,850 1,055,904 833,698 716,339 699,167 18,930 12,210 12,470 91,606 186,846 474,950

‐ ‐ 189,166 154,638 856,701 260,563 ‐ ‐ ‐ 12,344 ‐ 24,656

2,440,119 1,896,452 3,244,722 2,766,416 2,652,027 2,874,231 24,331,896 24,556,929 26,995,384 27,024,647 28,229,747 28,862,708

11,506 5,199 6,115 47,609 142,667 275,167 ‐ ‐ ‐ ‐ 156,405 ‐ ‐ ‐ ‐ 16,631 26,754 43,184

(2,440,119) (1,896,452) (3,244,722) (2,766,416) (2,652,027) (2,874,231) (2,428,613) (1,891,253) (3,238,607) (2,702,176) (2,326,201) (2,555,880) 21,903,283 22,665,676 23,756,777 24,322,471 25,903,546 26,306,828

5,210,401 2,405,347 5,372,215 27,024,647 1,192,958 822,478 5,729,502 8,141,279 5,831,466 (2,702,176) 4,864,825 8,283,682

10,939,903 $ 10,546,626 $ 11,203,681 $ 24,322,471 $ 6,057,783 $ 9,106,160 $

141


Program Revenues by Function/Program, Net of ExpenseLast Ten Fiscal Years


(Unaudited)

Function / Program 2009 2010 2011 2012

Governmental activities:General government 1,127,059 $ 1,203,247 $ 1,198,694 $ (792,105) $ Public safety (15,094,516) (16,110,379) (14,210,243) (13,943,655) Public works (3,441,131) (3,457,889) (2,968,551) (2,938,636) Environmental protection (410,044) (418,923) (48,164) 256,701 Culture and recreation (2,383,373) (2,539,908) (1,674,155) (2,382,647) Economic and physical development (1,724,876) (1,668,027) (592,636) (872,878) Interest on long‐term debt (536,679) (563,132) (518,903) (509,077)

Total governmental activities (22,463,560) (23,555,011) (18,813,958) (21,182,297)

Business‐type activities:Electric 4,281,554 4,785,697 4,662,944 1,608,441 Water 1,549,842 3,779,625 4,772,523 1,969,217 Sewer 2,195,848 2,156,167 2,368,454 2,030,967 Stormwater ‐ ‐ ‐ 13,764

Total business‐type activities 8,027,244 10,721,489 11,803,921 5,622,389

Total government (14,436,316) $ (12,833,522) $ (7,010,037) $ (15,559,908) $

Source: City records.(1) During the 2018 fiscal year, sanitation services were brought into the public works function for budget purposes.

142

2013 2014 2015 2016 2017 2018

(1,426,528) $ (1,409,179) $ (1,121,493) $ (1,507,612) $ (1,621,720) $ (2,256,653) $ (13,614,619) (14,354,307) (13,817,226) (14,909,755) (17,689,310) (17,601,546) (1,861,460) (3,412,484) (4,690,347) 5,451,915 (3,372,088) (5,603,738) (1)

617,121 991,875 1,261,895 684,623 329,577 ‐ (1)(2,345,130) (2,276,824) (2,232,260) (3,325,245) (2,915,719) (1,611,506) (125,053) (1,347,960) (639,429) (857,237) (1,593,945) (805,805) (365,826) (342,703) (384,309) (283,245) (173,584) (160,982)

(19,121,495) (22,151,582) (21,623,169) (14,746,556) (27,036,789) (28,040,230)

4,711,384 4,221,875 4,589,287 5,520,868 3,715,798 7,395,180 1,931,247 2,156,028 2,374,271 2,230,532 1,629,868 1,818,342 1,474,223 2,597,540 1,978,852 2,539,587 1,790,923 1,248,641

41,261 1,057,089 127,663 70,390 54,437 377,399 8,158,115 10,032,532 9,070,073 10,361,377 7,191,026 10,839,562

(10,963,380) $ (12,119,050) $ (12,553,096) $ (4,385,179) $ (19,845,763) $ (17,200,668) $

143


Fund Balances, Governmental Funds


(Modified Accrual Basis of Accounting)

(Unaudited)

2009 2010 2011 2012General Fund:Reserved 3,227,265 $ 3,201,334 $ ‐$ ‐$ Unreserved 2,701,696 2,035,562 ‐ ‐ Nonspendable ‐ ‐ 168,263 141,201 Restricted ‐ ‐ 2,771,830 3,397,888 Assigned ‐ ‐ ‐ ‐ Unassigned ‐ ‐ 4,604,056 6,786,387

Total General Fund 5,928,961 $ 5,236,896 $ 7,544,149 $ 10,325,476 $

All Other Governmental Funds:Reserved 266,831 $ 87,798 $ ‐$ ‐$ Unreserved, reported in:Special revenue funds (84,129) 1,270,581 ‐ ‐ Capital projects funds 327,441 ‐ ‐ ‐

Non spendable in permanent fund ‐ ‐ ‐ Restricted by state statute ‐ ‐ ‐ ‐ Restricted in capital project ‐ ‐ 394,325 326,614 Committed in capital project ‐ ‐ 391,977 322,202 Assigned in capital project ‐ ‐ ‐ ‐ Unassigned in capital project ‐ ‐ (2,348) (4,412) Restricted in special revenue funds ‐ ‐ 1,288,530 733,213 Assigned in special revenue funds ‐ ‐ 5,500 ‐ Unassigned in special revenue funds ‐ ‐ (799,068) (73,786)

Total all other government funds 510,143 $ 1,358,379 $ 1,278,916 $ 1,303,831 $

Note: The City implmented GASB Statement No. 54 in fiscal year 2011.

144

2013 2014 2015 2016 2017 2018

‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐ ‐ ‐ ‐ ‐ ‐

140,908 148,408 138,418 106,353 125,566 132,738 4,261,890 4,731,384 5,373,068 5,370,614 6,978,767 5,574,926

‐ ‐ ‐ 2,000,000 ‐ ‐ 7,449,776 9,496,813 14,753,694 12,976,430 13,816,378 13,864,240

11,852,574 $ 14,376,605 $ 20,265,180 $ 20,453,397 $ 20,920,711 $ 19,571,904 $

‐$ ‐$ ‐$ ‐$ ‐$ ‐$

‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

735,341 304,226 ‐ ‐ ‐ ‐ ‐ ‐ 418,676 34,092 ‐ ‐

324,372 455,346 ‐ ‐ 232,315 2,051,189 289,988 181,101 185,277 ‐ ‐ ‐

‐ ‐ ‐ 195,745 161,762 827,873 (33,941) ‐ ‐ ‐ ‐ ‐

‐ ‐ 389,330 476,420 543,575 453,642 ‐ ‐ ‐ ‐ ‐ 336,702

(368,626) (460,273) (539,445) (1,024,785) (39,195) (6,810)

947,134 $ 480,400 $ 453,838 $ (318,528) $ 898,457 $ 3,662,596 $

145


Changes In Fund Balances, Governmental Funds


(Modified Accrual Basis of Accounting)

(Unaudited)

2009 2010 2011 2012Revenues:Taxes 11,916,033 $ 11,935,701 $ 12,882,798 $ 13,364,849 $ Other taxes 282,833 268,819 255,333 262,984 Intergovernmental 9,258,155 9,112,105 10,477,875 11,706,136 Permits and fees 537,054 557,945 573,392 601,753 Charges for services 4,021,657 3,930,456 4,308,027 4,214,282 Investment earnings ‐ ‐ ‐ ‐ Other 249,061 217,419 393,056 440,448

Total revenues 26,264,793 26,022,445 28,890,481 30,590,452

Expenditures:General government 594,586 553,996 703,279 962,957 Public safety 14,640,876 15,115,471 14,838,939 18,309,272 Public works 3,763,739 3,394,160 3,491,813 4,801,869 Environmental protection 1,856,632 1,959,738 1,997,630 1,952,131 Culture and recreation 2,304,822 2,309,096 3,150,315 2,123,400 Economic and physical development 1,669,949 1,647,002 2,249,191 1,872,267 Interfund reimbursements ‐ ‐ ‐ ‐ Capital outlay 6,243,472 457,895 130,547 538,108 Debt service:Principal 2,434,480 2,196,177 2,128,628 2,153,397 Interest 536,681 563,134 518,901 445,677


Excess of revenues (under) expenditures (7,780,444) (2,174,224) (318,762) (2,568,626)

Other financing sources (uses):Transfers in 1,308,391 1,907,075 2,447,741 2,056,879 Transfers out ‐ (327,118) (492,983) (664,812) Proceeds from sales of capital assets ‐ ‐ ‐ ‐ Issuance of long‐term debt 2,368,452 750,438 199,817 4,052,576

Total other financing sources 3,676,843 2,330,395 2,154,575 5,444,643

Net changes in fund balance (4,103,601) $ 156,171 $ 1,835,813 $ 2,876,017 $

Debt service as a percentage of noncapital expenditures 11.2% 10.1% 9.9% 9.0%

(1) During the fiscal years ended June 30, 2015 and June 30, 2016 capital outlays were reported as functional expenditures. (2) During the fiscal years ended June 30, 2013 through June 30, 2015 the interfund allocation of administrative costs were not allocated to the respective departments to reduce the expenditures.(3) During the 2018 fiscal year, sanitation services were brought into the public works function for budget purposes.

146

2013 2014 2015 2016 2017 2018

13,297,524 $ 13,804,623 $ 13,776,239 $ 13,843,554 $ 14,178,823 $ 14,600,912 $ 264,417 278,850 264,759 ‐ ‐ ‐

12,628,746 10,570,520 12,035,516 12,285,133 13,335,018 12,535,666 584,906 629,737 473,631 614,305 461,845 661,904

4,154,506 4,697,698 4,610,076 4,046,716 3,651,771 3,770,582 17,917 11,353 11,636 91,606 186,846 474,950

240,121 186,493 490,433 175,875 393,324 378,629 31,188,137 30,179,274 31,662,290 31,057,189 32,207,627 32,422,643

4,490,858 (2) 4,503,448 4,127,567 (2) 1,941,707 2,160,235 2,257,005 15,543,189 15,596,236 16,633,524 16,019,236 16,564,796 16,867,070 4,436,086 4,947,552 5,462,756 6,160,541 6,567,295 10,261,544 (3) 1,792,211 1,772,657 1,805,268 2,035,216 2,615,028 ‐ (3) 2,956,433 2,460,377 2,519,151 2,849,572 2,925,043 3,001,879 3,222,067 2,121,975 2,559,305 3,461,395 2,345,856 2,057,081 (2,891,799) (2) (3,310,269) (3,412,228) (2) ‐ ‐ ‐ 1,052,794 1,857,062 ‐ (1) ‐ ‐ ‐

1,997,458 1,461,189 1,750,718 4,975,998 1,548,037 1,988,779 380,588 349,093 369,686 301,704 183,672 164,535

32,979,885 31,759,320 31,815,747 37,745,369 34,909,962 36,597,893

(1,791,748) (1,580,046) (153,457) (6,688,180) (2,702,335) (4,175,250)

2,980,737 2,193,282 3,503,154 3,812,981 3,430,178 4,158,767 (161,701) (296,830) (258,432) (764,257) (778,151) (1,284,536)

‐ ‐ 801,075 74,540 74,607 138,817 465,315 1,740,891 1,969,673 2,980,767 1,660,000 2,577,534

3,284,351 3,637,343 6,015,470 6,104,031 4,386,634 5,590,582

1,492,603 $ 2,057,297 $ 5,862,013 $ (584,149) $ 1,684,299 $ 1,415,332 $

7.8% 6.2% 7.7% 15.4% 5.4% 6.3%

147


The Electric System

Electricity Purchased, Consumed & Unbilled


(Unaudited)

KWH KWHFiscal KWH Residential Commercial/Industrial Year Purchased Power Cost FY Usage Usage

2008‐2009 477,446,638 45,681,067 234,671,967 216,874,513 2009‐2010 484,521,876 47,105,382 240,353,947 214,345,062 2010‐2011 498,840,126 48,546,194 250,929,048 221,371,906 2011‐2012 458,824,995 45,846,007 222,729,647 219,827,592 2012‐2013 469,665,593 46,711,774 233,508,677 218,582,492 2013‐2014 480,049,085 47,455,824 240,283,626 217,521,976 2014‐2015 479,022,050 46,103,643 237,853,174 212,831,495 2015‐2016 456,681,167 35,673,027 224,926,688 212,697,288 2016‐2017 465,041,161 37,529,489 237,551,981 212,751,139 2017‐2018 477,023,603 31,852,370 248,334,829 212,080,854

Source: City Records

148

KWH KWH PurchasedOther Total KWH KWH Electric RateUsage Usage Unbilled Unbilled % (.00/KWH)

345,600 451,892,080 25,554,558 5% 0.0957 1,308,073 322,320 455,021,329 29,500,547 6% 0.0972 1,327,457 272,880 472,573,834 26,266,292 5% 0.0973 1,366,685 101,760 442,658,999 16,165,996 4% 0.0999 1,257,055 14,640 452,105,809 17,559,784 4% 0.0995 1,286,755

114,000 457,919,602 22,129,483 5% 0.0989 1,315,203 246,240 450,930,909 28,091,141 6% 0.0962 1,312,389 341,520 437,965,496 18,715,671 4% 0.0781 1,251,181 330,960 450,634,080 14,407,081 3% 0.0807 1,274,085 371,040 460,786,723 16,236,880 3% 0.0668 1,306,914

Daily Average

Usage

149


Electric Rates


(Unaudited)

Electric Rates 2009 2010 2011 2012

Residential 0.1410$ 0.1442$ 0.1439$ 0.1373$ Commercial 0.1278 0.1348 0.1367 0.1334 Large Commercial/Industrial 0.0920 0.0883 0.0882 0.0837 Other 0.1221 0.1248 0.1238 0.1358


Cents Per KWH

150

2013 2014 2015 2016 2017 2018

0.1307$ 0.1439$ 0.1214$ 0.1165$ 0.1010$ 0.1133$ 0.1331 0.1305 0.1391 0.1216 0.1175 0.1156 0.0827 0.0842 0.0861 0.0771 0.0792 0.0755 0.1738 0.1275 0.1284 0.1110 0.1062 0.1046

Cents Per KWH

151


Electric System ‐ Major Users

Current Year and Nine Years Ago

(Unaudited)

Percentage Percentage of Total of Total

Annual Annual Electric Annual Annual Electric Rank Customer KWH Revenues Sales Rank Customer KWH Revenues Sales1 Carolina East Medical Center 18,350,400 $1,128,724 2.21% 1 Carolina East Medical Center 18,196,800 $1,349,526 2.65%2 Craven Community College 8,270,400 $542,306 1.06% 2 Hatteras Yachts 7,610,400 $920,305 1.81%3 Hatteras Yacht 6,031,200 $538,980 1.06% 3 Craven Community College 6,900,000 $786,877 1.54%4 City of New Bern STP 4,835,520 $316,413 0.62% 4 Maola 5,625,600 $579,057 1.14%5 Wal‐Mart Stores‐Havelock 4,593,000 $307,671 0.60% 5 City of New Bern STP 5,591,520 $445,290 0.87%6 Craven Terrace‐5‐2 2,471,760 $230,833 0.45% 6 Wal‐Mart Stores‐Havelock 4,644,700 $220,011 0.43%7 Lowes of New Bern 2,470,400 $182,706 0.36% 7 Lowe's of New Bern 3,628,400 $246,179 0.48%8 Carolina Telephone &Telegraph 2,160,400 $205,802 0.40% 8 Craven Terrace 3,249,120 $374,043 0.73%9 New Bern Housing Authority 2,003,280 $195,106 0.38% 9 New Bern Housing Authority 2,219,520 $275,336 0.54%10 Wal‐Mart Stores‐New Bern 1,753,700 $131,378 0.26% 10 Carolina Telephone 2,008,800 $219,990 0.43%

Revenue for All Revenue for AllTotals $51,071,889 52,940,060 $3,779,919 Totals $50,936,452 59,674,860 $5,416,614


20092018

152


Water System ‐ Major Users


(Unaudited)


Annual Annual Electric Annual Annual Electric Rank Customer Gallons Revenues Sales Rank Customer Gallons Revenues Sales1 Carolina East Medical Center 28,095 126,719$ 1.31% 1 Carolina East Medical Center 55,166 135,548$ 2.44%2 Craven Wood Energy 15,656 105,221 1.09% 2 Stanely White Rec Center 29,700 75,595 1.36%3 Moen 9,709 56,875 0.59% 3 Town of Cove City 121,168 32,805 0.59%4 New Bern Housing Authority 7,547 37,823 0.39% 4 Taberna Master 10,140 1,643 0.03%5 Schladdt Plastics 4,336 19,971 0.21% 5 S. T. Wooten 9,092 27,227 0.49%6 Bosch 4,156 20,422 0.21% 6 Bosch 8,633 29,650 0.53%7 FMC of Craven County 3,932 16,982 0.18% 7 Moen 8,222 36,411 0.66%8 BSH Home Appliance 3,508 19,898 0.21% 8 New Bern Housing Authority 7,778 20,770 0.37%9 Outback 3,420 28,095 0.29% 9 Craven County Bd of Educ 5,393 21,258 0.38%10 Colony Village Apts 3,273 23,455 0.24% 10 BSH Home Appliance 4,636 12,981 0.23%

Revenue for All Revenue for AllTotals $9,652,036 83,632 455,461$ Totals $5,544,458 259,928 393,888$


2018 2009

153


Sewer System ‐ Major Users


(Unaudited)


Annual Annual Electric Annual Annual Electric Rank Customer Gallons Revenues Sales Rank Customer Gallons Revenues Sales01 Craven County Wood Energy 35,231 327,692$ 3.27% 01 Carolina Regional Medical Center 45,987 136,668$ 1.48%02 Craven County 5,908 49,398 0.49% 02 Sonoco Products 9,747 26,890 0.29%03 Coastal Reg. Solid Waste 4,177 41,414 0.41% 03 Hatteras Yachts 3,710 30,684 0.33%04 Sonoco Products 3,559 31,606 0.32% 04 Trent Dev. Group 3,238 21,990 0.24%05 Trent Dev. Group 2,530 23,754 0.24% 05 Coastal Reg. Solid Waste 3,021 45,974 0.50%06 Lexmi Hospitility 2,124 27,858 0.28% 06 Craven Co. Board of ED. 867 12,401 0.13%07 Craven Co. Board of Ed. 665 11,229 0.11% 07 Craven Wood Energy 324 2,639 0.03%08 Food Lion LLC 426 3,273 0.03% 08 Mary Borneman P‐70672 197 1,221 0.01%09 Craven Animal Hospital 247 1,525 0.02% 09 China King 150 944 0.01%10 State Employees Credit 246 829 0.01% 10 Jeremy Kane 106 643 0.01%

Revenue for All Revenue for AllTotals $10,023,931 55,113 518,578$ Totals $9,212,263 67,347 280,054$


2018 2009

154

City of New Bern, North CarolinaAssessed Value and Estimated Actual Value of Taxable Property


(Unaudited)

Fiscal Total Estimated AssessedYear Less Total Taxable Direct Actual Value as aEnded Residential Commercial Motor Tax Exempt Assessed Tax Taxable Percentage ofJune 30, Property Property Vehicles Other Real Property Value Rate Value (1) Actual Value (2)

2009 1,146,888,181$ 682,642,384$ 233,661,254$ 274,372,842$ 6,720,461$ 2,330,844,200$ 0.505 3,495,567,187$ 66.68%2010 1,175,109,254 698,743,698 215,576,429 263,121,567 8,048,686 2,344,502,262 0.505 2,346,849,111 99.90%

2011 (3) 1,654,793,516 983,704,603 217,961,102 268,536,167 11,783,558 3,113,211,830 0.410 3,075,384,599 101.23%2012 1,691,989,475 1,004,138,358 227,578,581 221,190,195 14,850,508 3,130,046,101 0.410 2,931,029,217 106.79%2013 1,699,293,395 1,007,925,555 233,561,473 269,508,198 15,828,950 3,194,459,671 0.410 2,826,455,212 113.02%2014 1,721,521,337 1,007,745,243 133,550,747 250,894,383 16,129,202 3,097,582,508 0.410 2,737,831,455 113.14%2015 1,740,351,357 1,012,722,260 236,218,399 305,526,099 17,492,541 3,277,325,574 0.410 2,742,616,664 119.50%2016 1,756,129,303 1,022,041,633 235,673,549 286,274,025 17,569,333 3,282,549,177 0.410 3,035,643,746 108.13%2017 1,539,695,349 1,062,464,443 240,558,043 184,576,735 17,036,205 3,010,258,365 0.460 2,797,677,093 107.60%2018 1,550,950,898 998,754,218 267,717,313 317,086,179 18,079,727 3,116,428,881 0.460 2,922,954,615 106.62%

Source: Craven County Tax OfficeNotes: (1) Per $100 of value(2) The estimated market value is calculated by dividing the assessed value by an assessment ‐to‐sales ratio determined by the State Department of Revenue. The ratio is based on actual property sales within Craven County which took place in the calendar year ending during the fiscal year. (3) Property tax is reassessed every eight years by Craven County. The last reassessment was on January 1, 2010 and was the basis for fiscal 2011 taxes.

Real Property Personal Property

155


Property Tax Levies and Collections


(Unaudited)

Fiscal Year Total Tax CollectionsEnded Levy for Percentage in Subsequent PercentageJune 30, Fiscal Year Amount of Levy Years Amount of Levy

2009 10,882,144$ 10,731,998$ 98.62% 119,257$ 10,851,255$ 99.72%2010 11,031,702 10,769,066 97.62% 235,824 11,004,890 99.76%2011 12,150,856 11,833,088 97.38% 290,836 12,123,924 99.78%2012 13,034,415 12,694,505 97.39% 307,777 13,002,282 99.75%2013 13,113,654 12,801,046 97.62% 265,331 13,066,377 99.64%2014 12,713,597 12,533,988 98.59% 141,578 12,675,566 99.70%2015 12,411,797 11,974,859 96.48% 412,738 12,387,597 99.81%2016 12,502,513 12,403,793 99.21% 55,577 12,459,370 99.65%2017 12,728,310 12,633,582 99.26% 49,480 12,683,062 99.64%2018 13,113,149 13,025,627 99.33% ‐ 13,025,627 99.33%

Source: City property tax records

Fiscal Year of the LevyCollected within the

Total Collections to Date

156


Principal TaxpayersCurrent Year and Nine Years Ago

(Unaudited)

Percentage Percentageof Total of Total

Nature of Assessed Assessed Nature of Assessed AssessedName of Taxpayer Property Value Rank Value Name of Taxpayer Property Value Rank Value

BSH Home Appliances Household Appliances 103,141,924$ 1 3.31% BSH Home Appliances Household Appliances 110,599,948$ 1 4.75%New Bern Apartments, LLC Residential Rental 24,409,267 2 0.78% Hatteras Yachts, Inc Boat Manufacturing 27,282,338 2 1.17%New Bern Riverfront Developer(Condos) 17,031,231 3 0.55% New Bern Riverfront Developer(Condos) 20,505,350 3 0.88%Wal Mart Real Estate Business Trust Retail Sales 15,775,740 4 0.51% Carolina Telephone Telephone Service 18,870,579 4 0.81%NIC 4 Courtyards of New Bern Residential Rental 14,366,000 5 0.46% Trent Neuse Hotel LLC Hotel 16,341,201 5 0.70%Strata Woodcross LLC Residential Rental 14,121,427 6 0.45% DDR Xenia & New Bern LLC Retail Shopping 13,637,800 6 0.59%ATTA Holdings Medical Offices 13,974,680 7 0.45% HS New Bern LLC Retail Shopping 12,262,579 7 0.53%Hatteras Cabo Yachts LLC Boat Manufactoring 13,956,434 8 0.45% Thomas F & Karen Webb Developer 11,838,613 8 0.51%Duke Engery Progress Inc Power Service 13,222,530 9 0.42% Progress Energy Carolinas Power Service 8,339,945 9 0.36%Navis HCY Real Estate LLC Real Estate 12,067,300 10 0.39% Target Retail Shopping 8,182,736 10 0.35%

Total Assessed Valuation of Top Ten Taxpayer 242,066,533$ 7.77% Total Assessed Valuation of Top Ten Taxpayer 247,861,089$ 10.63%

Balance of Assessed Valuation. 2,874,362,348$ 92.23% Balance of Assessed Valuation. 2,082,983,111$ 89.37%

Total Assessed Valuation 3,116,428,881$ 100.00% Total Assessed Valuation 2,330,844,200$ 100.00%

Source: City property tax records

2018 2009

157


Direct and Overlapping Property Tax Rates


(Unaudited)

Fiscal Overlapping Year Direct RateEnding Rate CravenJune 30 City County2009 0.505 0.612010 0.505 0.612011 0.41 0.47282012 0.41 0.47282013 0.41 0.47282014 0.41 0.46752015 0.41 0.46752016 0.41 0.46752017 0.46 0.53942018 0.46 0.5394

Notes: (1) Source of County tax rates from Craven County Tax Office.(2) City of New Bern tax rate excludes Municipal Service District tax rates. This rate covers a small area and is nominal in amount.(3) Real property was revalued on January 1, 2016. Changes will be reflected in next year's report.

158


Ratios of Outstanding Debt by TypeLast Ten Fiscal Years

(Unaudited)

GovernmentalActivities

General General Total Total Debt Total Debt asFiscal Obligation Capitalized Installment Capitalized Notes Installment Obligation Revenue Primary Per Percentage ofYear Bonds Leases Notes Payable Leases Payable Notes Payable Bonds Bonds Government Capita Personal Income

2009 ‐$ ‐$ 16,106,428$ ‐$ 44,894,829$ 26,528,141$ 485,000$ ‐$ 88,014,398$ 3,036$ 2.450%2010 ‐ ‐ 14,660,687 ‐ 49,785,268 23,739,189 240,000 ‐ 88,425,144 2,983 2.461%2011 ‐ ‐ 12,731,877 ‐ 47,724,116 23,617,057 ‐ ‐ 84,073,050 2,812 2.345%2012 ‐ ‐ 14,610,371 ‐ 44,801,300 21,270,822 ‐ ‐ 80,682,493 2,699 2.199%2013 ‐ ‐ 12,449,882 ‐ 41,847,545 3,868,205 ‐ 17,180,000 75,345,632 2,485 1.964%2014 ‐ ‐ 12,729,584 ‐ 38,862,038 4,209,693 ‐ 15,576,277 71,377,592 2,360 1.743%2015 ‐ ‐ 12,948,539 ‐ 35,843,939 3,648,020 ‐ 17,608,515 70,049,013 2,316 1.305%2016 ‐ ‐ 7,926,663 ‐ 32,792,386 6,166,443 ‐ 21,207,039 68,092,531 2,918 1.361%2017 ‐ ‐ 8,038,626 ‐ 29,447,558 5,107,437 ‐ 18,662,107 61,255,728 2,605 1.224%2018 ‐ ‐ 8,627,381 ‐ 26,585,374 3,859,046 ‐ 16,070,782 55,142,583 2,292 1.314%

Notes: (1) Details regarding the City's outstanding debt may be found in the notes to the basic financial statements. (2) The City has no outstanding general obligation bonds. (3) Population can be found on the Demographic and Economic Statistics Table. (4) Total Debt as Percentage of Personal Income is calculated using prior year Personal Income as current year was not available.

ActivitiesBusiness‐Type

159


Direct and Overlapping Governmental Activities Debt

For the Year Ended June 30, 2018

(Unaudited)

EstimatedEstimated Share of

Debt Percentage OverlappingGovernmental Unit Outstanding Applicable Debt

Craven County Debt 56,065,651$ 28.47% 15,961,891$

Subtotal, overlapping debt 56,065,651 15,961,891

City Direct Debt 8,627,381 100% 8,627,381

Total direct and overlapping debt 64,693,032$ 24,589,272$

Sources:

Notes:(1) Includes general obligation bonds for Enterprise Fund and General Long‐Term Debt Account Group.(2) Determined by ratio of assessed valuation of property subject to taxation in Craven County $9,904,145,988.(3) Amount in debt outstanding column multiplied by percentage applicable.

160


Legal Debt Margin Information


(dollars in thousands)

(Unaudited)

2009 2010 2011 2012

Debt limit 186,561,090 $ 187,560,181 $ 249,056,946 $ 251,991,678$

Total net debt applicable to limit ‐ 240,000 12,731,877 14,610,371

Legal debt margin 186,561,090 $ 187,320,181 $ 236,325,069 $ 237,381,307 $

Total net debt applicable to the limitas a percentage of debt limit 0.00% 0.13% 5.11% 5.80%

Notes:Debt includes Installment proceeds and Notes payable.

Legal Debt Margin Calculation for Fiscal Year 2018.

Assessed Valuation 3,116,428,881$

8% 249,314,310

Less applicable debt (8,627,381)

Debt margin 240,686,929$

161

2013 2014 2015 2016 2017 2018

255,556,774$ 247,806,601$ 242,008,494$ 243,750,050$ 221,576,026$ 249,314,310$

12,449,882 12,729,584 12,948,539 7,926,663 8,038,626 8,627,381

243,106,892 $ 235,077,017$ 229,059,955$ 235,823,387$ 213,537,400$ 240,686,929$

4.87% 5.14% 5.35% 3.25% 3.63% 3.46%

162


Demographic and Economic Statistics


(Unaudited)

FiscalYear Per Capita Personal

Ended Personal Income (3) School UnemploymentJune 30 Population (1) Income (2) (Amounts in 000's) Enrollment (4) Rate (5)

2009 28,992 $ 24,141 3,592,542$ 14,597 7.7%2010 29,646 24,141 3,585,722 14,513 9.6%2011 29,899 22,762 3,669,572 14,817 9.5%2012 30,316 22,762 3,836,260 14,749 9.2%2013 30,242 23,235 4,094,203 14,606 9.9%2014 30,291 22,555 5,365,822 14,472 7.1%2015 30,070 23,335 5,004,713 14,297 6.3%2016 30,101 23,511 4,195,496 14,120 4.9%2017 29,590 24,062 4,340,800 14,002 4.3%2018 (6) (6) (6) (6) (6)

Notes:(1) Population provided US Census Bureau.(2) Provided by U.S Census.(3) Bureau of Economic Analysis, U.S. Department of Commerce. Figures are as of the end

of the calendar year ended during the fiscal year.(4) Craven County Public Schools(5) Provided by U.S Bureau of Labor Statistics.(6) Information is not presently available.

163


Principal Employers


(Unaudited)

2018 2009Percentage Percentage

of Total County of Total CountyEmployer Employees Rank Employment Employees Rank EmploymentDepartment of Defense 1,000 + 1 n/a Department of Defense 1,000 + 1 n/aCarolinaEast Health Systems 1,000 + 2 n/a Craven County Schools 1,000 + 2 n/aCraven County Schools 1,000 + 3 n/a CarolinaEast Health Systems 1,000 + 3 n/aBSH Home Appliances 1,000 + 4 n/a BSH Home Appliances 500‐999 4 n/aMoen Incorporated 500‐999 5 n/a Wal‐Mart 500‐999 5 n/aWal‐Mart 500‐999 6 n/a Moen Incorporated 500‐999 6 n/aCraven County 500‐999 7 n/a Craven County 500‐999 7 n/aMarine Corps Exchange Service 500‐999 8 n/a US Marine Navassa 500‐999 8 n/aCraven Community College 500‐999 9 n/a Marine Corps Exhange Servic 500‐999 9 n/aCity of New Bern 500‐999 10 n/a Craven Community College 500‐999 10 n/a

Sources: Craven County Government, NC Department of Commerce LEAD Division

164


Full‐Time Equivalent City Government Employees By Functions/ProgramsLast Ten Fiscal Years

(Unaudited)

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Functions/Program

General Government:Governing Board 1 1 1 1 1 1 1 1 ‐ ‐ Administration 3 3 3 4 4 4 4 4 5 5 Information Technology 7 7 7 7 8 8 8 7 7 7

Finance:Accounting 12 12 11 10 10 10 10 9 9 9 Warehouse 5 5 4 4 4 4 4 3 3 3 Tax Collection 3 3 3 3 3 1 ‐ ‐ ‐ ‐

Human Resources: 6 6 6 5 5 6 6 5 5 5 Police: 138 141 127.5 114 112 112 116 109.5 112 115 Animal Control ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ E911 Support ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2 2 Communications ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

Fire: 69 68 66 66 67 67 67 67 66 73 Parks and Recreation:Administration 2 2 2 2 2 2 2 3 5 7 Facilities ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 10 9 West New Bern Recreation Center 5 5 5 5 5 5 5 4 ‐ ‐ Stanley White Recreation Center 5 5 4 4 4 4 4 4 ‐ ‐ Parks 17 17 14.6 13 14 14 14 13 13 13 Aquatics 1 1 0.4 0.4 ‐ ‐ ‐ ‐ ‐ ‐ Special Programs ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ Athletics 3 3 3 3.6 3.0 3.0 3.0 3 ‐ ‐

Planning & Inspections:Planning & Inspections 19 19 17 17 16 17 17 15 15 16 GIS 1 1 1 1 1 ‐ ‐ ‐ ‐ ‐

Public Works:Administration 4 4 3.5 3 3 3 3 3 3 3 Garage 4 4 4 4 4 4 4 4 4 4 Public Buildings 7 7 6 5 6 6 6 6 6 6 Streets 31 31 26 25 25 25 25 21 21 21 Cemeteries 1 1 1 1 ‐ ‐ ‐ ‐ ‐ ‐Leaf & Limb 9 9 9 8 7 7 7 7 7 7 Sanitation 1 1 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ Engineering 10 10 9 ‐ ‐ ‐ ‐ ‐ ‐ ‐

Water:Water Resources Administration ‐ ‐ ‐ 7 7 7 7 7 6 6 Water Treatment 3 5 7 12 11 11 11 11 12 12 Water Distribution System Maintenance 21 23 20 25 30 30 30 27 25 25 Hydrant Maintenance 4 4 4 ‐ ‐ ‐ ‐ ‐ ‐ ‐

Sewer:Sewer Treatment 20 20 19 21 21 21 20 19 19 19 Sewer Collection System Maintenance 33 37 27 21 16 14 14 12 16 16 PreTreatment 1 1 2 ‐ ‐ ‐ ‐ ‐ ‐ ‐

Electric:Electric Administration 7 7 7 7 7 7 7 6 6 6 Utility Billing 5 16 5 5 5 5 ‐ ‐ ‐ ‐ Utility Service 16 15 16 15 15 10 ‐ ‐ ‐ ‐ Distribution O&M 33 33 30 32 32 36 36 34 34 34 Power Supply 4 4 4 4 4 4 4 3 4 4 Communications Control 5 5 5 5 6 6 7 7 7 7 Utility Business Office 16 16 16 16 16 16 30 29 27 27

Stormwater: Stormwater ‐ ‐ ‐ ‐ 5 5 5 6 6 6

Other:Emergency Telephone System (E911) 2 2 2 2 2 2 2 1.5 ‐ ‐ Metropolitan Planning Organization ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2 2 2 Municipal Service District 2 2 2 ‐ ‐ ‐ ‐ ‐ ‐ ‐

Total 536 556 500 478 481 477 479 453 457 469

Source: Prior years budget records

Note:

* Information is not readily available

165


Operating Indicators By Function/ProgramLast Ten Fiscal Years

(Unaudited)

Function/Program 2009 2010 2011 2012

Police: Calls for service ** 44,980 38,397 36,818 Conduct DUI/Traffic Check Points ** ** ** ** Answer 90% of 911 calls in 10 seconds ** ** ** ** Dispatch Emergency call in 90 seconds ** ** ** ** Dispatch Non‐Emergency call in 90 seconds ** ** ** ** Maintain 100% state certification for sworn and non‐sworn ** ** ** ** Conduct directed traffic enforcement ** ** ** ** Conduct directed radar enforcement campaigns ** ** ** ** Arrests ** ** ** **Fire:Calls for service 1,022 1,034 1,124 1,090 Value of Endangered Property ** ** ** **Value of Property Loss 1,549,760$ 850,040$ 1,658,581$ 6,131,061$ Fire Inspections ** ** ** 1,860 Fire Investigations ** ** ** 43 People Educated by Fire Education Programs ** ** ** 7,033 Child Passenger Safety Seat Inspections ** ** ** 299 Permits Issued ** ** ** 140 Firefighter Training Hours ** ** **

Recreation program attendance:Athletics 80,000 95,500 95,750 98,500Centers & Parks 269,546 270,551 278,501 285,500Other Programs 90,900 95,825 90,550 96,775

Planning & Development: Total building permits 553 645 573 652 Total value of all permits $48,034,918 $56,899,190 $38,992,626 $47,994,419

Public service:Garbage collected (ton) 7,562 7,495 7,640 7,719Recycle collected (ton) *** 1,848 1,644 1,791 2,403

StormwaterCalls for service ** ** ** **Yearly rainfall ** ** ** **Stormwater fee ** ** ** **Residential ERU's ** ** ** **Commercial ERU's ** ** ** **

Source: Various City recordsNOTE: ** Data not available *** Numbers are derived from Craven County Recycling tonnages. Only totals were available, however based on the percentage of households in the city to county33.53% was used from the total collected to generate an approximate City value**** Tracking Changes Amended, stats unavailable

166

2013 2014 2015 2016 2017 2018

48,532 42,819 43,113 42,525 42,525 46,16070 118 157 48 34 54

99..6% 97.50% 98.05% 98.02% 98.21% 98.06%85.30% 91.15% 72.35% 89.80% 70.15% 78.50%97.80% 75.00% 74.40% 76.10% 99.79% 99.91%

100.00% 98.78% 98.78% 98.78% 100.00% 100.00%** ** ** 362 196 3701 4 21 **** 12 230

1,944 1,750 1,595 1,545 1,497 1,774

992 1,115 1,223 1,251 1,485 1,683 ** 50,260,192 13,718,938 122,605,907 11,477,095 40,955,210

1,389,713$ 2,811,003$ 656,825$ 1,201,657$ 1,691,425$ 10,326,546$ 1,787 1,519 1,568 1,420 1,606 1,743

32 36 33 31 27 307,298 8,857 9,929 11,065 13,697 9,360295 268 227 236 220 17382 126 91 113 131 101

19,176 19,522 18,503 18,568 19,803

98,500 99,000 99,500 100,000 ** **286,000 286,500 306,000 310,000 ** **97,000 97,225 100,000 105,000 ** **

605 529 511 317 290 517$37,189,233 $40,634,053 $32,604,601 $65,763,473 $33,242,973 $120,929,581

7,626 7,854 8,135 8,521 8,303 8,5611,795 2,191 2,222 2,185 2,188 2,102

450 178 264 355 248 21643.99" 37.14" 54.91 67.15 63.14 55.81

$2.10 / ERU $2.10 / ERU $2.10 / ERU $2.10 / ERU $2.10 / ERU $2.10 / ERU** 12,516 12,756 12,906 12,966 13,182** 20,452 20,006 19,923 19,420 22,972

167


Capital Asset Statistics By Function/ProgramLast Ten Fiscal Years

(Unaudited)

Function/Program 2009 2010 2011 2012

Police: Capital Assets 4 4 4 4Fire & Rescue: Fire Stations 3 3 3 3 Fire Training Academy Building 1 1 1 1 Fire Training Academy Classroom 1 1 1 1Parks & Recreation:Acreage 275 282 312 312Parks 18 19 21 21Frisbee Golf Course 1 1 1 1Baseball/Softball Diamonds 10 10 10 10Soccer/Football Fields 2 2 2 2Basketball Courts 4 4 4 4Tennis Courts 4 4 4 4Swimming pools 1 1 1 1Parks with Playground Equipment 9 9 9 9Picnic Shelters 8 8 8 8Community Centers 3 3 3 3Natural Sites 4 4 4 4Gymnasium 2 2 2 2Spray Ground 1 1 1 1Dog Park 1 1 1 1Boat Launch/Ramp/Pier 7 7 8 8

Picnic Tables 70 75 75 75Park Benches 100 108 108 108Multi‐purpose Fields 2 2 2 2Walking Trails 5 6 6 6Outdoor Restrooms 9 9 9 9Public Parking Lots 10 11 11 11Public Art 3 3 3 4Horseshoe Courts 2 3 3 3Outdoor Volleyball Courts 2 2 2 2Bike Racks 7 7 7 7

Wastewater: *Sanitary Sewers (miles) 211.4 211.4 211.4 211.7 *Storm Sewers (miles) 62.4 62.4 62.4 62.5 *Average Daily Flow 3.57 4.01 3.82 3.63Electric: Average Daily Usage (kWh) 1,308,073 1,327,457 1,366,685 1,257,055

Mile of Distribution Lines 515 515 515 515Source: Various City records

* Beginning in FY14 the STEP System and Vacuum System Sewer mains are includedIn 2018 the City received a large parcel of land donated for park space within the City.

168

2013 2014 2015 2016 2017 2018

5 5 5 5 5 5

3 3 3 3 3 31 1 1 1 1 11 1 1 1 1 1

312 350 360 363 363 1,251 21 23 24 24 24 251 1 1 1 1 1

10 10 10 10 10 102 2 2 2 2 24 4 4 4 4 64 4 4 4 4 41 1 1 1 1 1

10 11 12 13 13 139 10 10 11 11 113 3 3 2 2 24 4 4 4 4 42 2 2 2 2 21 1 1 1 2 21 1 1 1 1 18 8 10 11 11 11

87 90 95 98 98 98126 130 138 143 143 143

2 2 2 2 3 36 6 6 6 6 79 9 9 9 10 10

11 11 11 12 12 124 5 5 5 5 63 3 3 3 3 92 2 2 2 2 27 25 25 25 25 25

211.7 414.88 416.77 417.58 419.11 437.0262.5 74.35 74.62 76.58 77.56 76.943.63 3.89 3.88 4.55 4.25 4.26

1,286,755 1,254,574 1,304,406 1,251,181 1,274,085 1,450,413

518 520 630 550 550 550

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COMPLIANCE SECTION

INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL

STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Honorable Mayor and Members of the Board of Aldermen City of New Bern, North Carolina

We have audited, in accordance with the auditing standards generally accepted in the United States of America and the

standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of

the United States, the financial statements of the governmental activities, the business‐type activities, each major fund, and

the aggregate remaining fund information of the City of New Bern, North Carolina (the “City”) as of and for the year ended

June 30, 2018, and the related notes to the financial statements, which collectively comprise the City’s basic financial

statements, and have issued our report thereon dated December 28, 2018. Our report includes a reference to the change

in accounting principle resulting from the implementation of Governmental Accounting Standards Board Statement No. 75,

Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions, as of July 1, 2017.

Internal Control over Financial Reporting

In planning and performing our audit of the financial statements, we considered the City’s internal control over financial

reporting (“internal control”) to determine the audit procedures that are appropriate in the circumstances for the purpose

of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the

effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s

internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees,

in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely

basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a

reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected

and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control

that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.


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Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was

not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies.

Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be

material weaknesses. However, material weaknesses may exist that have not been identified.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the City's financial statements are free from material

misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant

agreements, noncompliance with which could have a direct and material effect on the determination of financial statement

amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and

accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other

matters that are required to be reported under Government Auditing Standards. Purpose of this Report

The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the result of

that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This

report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the

entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.


INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR THE MAJOR STATE PROGRAM AND REPORT ON INTERNAL CONTROL OVER COMPLIANCE

IN ACCORDANCE WITH APPLICABLE SECTIONS OF THE UNIFORM GUIDANCE AND THE STATE SINGLE AUDIT IMPLEMENTATION ACT

To the Honorable Mayor and Members of the Board of Aldermen City of New Bern, North Carolina Report on Compliance for Each Major State Program We have audited the City of New Bern, North Carolina’s (the “City”) compliance with the types of compliance requirements

described in the Audit Manual for Governmental Auditors in North Carolina, issued by the Local Government Commission, that could have a direct and material effect on each of the City’s major state programs for the year ended June 30, 2018. The City’s major state programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Management's Responsibility Management is responsible for compliance with the requirements of laws, regulation, contracts, and grants applicable to its state programs. Auditor's Responsibility Our responsibility is to express an opinion on compliance for each of the City’s major state programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and applicable sections of Title 2 US Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), as described in the Audit Manual for Governmental Auditors in North Carolina, and the State Single Audit Implementation Act. Those standards, the Uniform Guidance, and the State Single Audit Implementation Act require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major state program occurred. An audit includes examining, on a test basis, evidence about the City’s compliance with those requirements and performing such other procedures, as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major state program. However, our audit does not provide a legal determination of the City’s compliance. Opinion on Each Major State Program In our opinion, the City complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major state programs for the year ended June 30, 2018.


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Report on Internal Control Over Compliance

Management of the City is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the City’s internal control over compliance with the types of requirements that could have a direct and material effect on a major state program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing our opinion on compliance for each major state program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a state program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a state program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance with a type of compliance requirement of a state program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.


Federal Agency or Pass‐

Grantor/Pass‐Through CFDA through Grantor

Grantor/Program Title Number Number Federal State Local

FEDERAL AWARDS

U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Passed through North Carolina Department of Commerce,

Planning and Community Development

CDBG ‐ Entitlement Cities Grant Cluster

CDBG Entitlement Cities 14.218 B‐14‐MC‐37‐0024 $ ‐ $ 192,543 $ ‐ $ 54,843

Total CDBG ‐ Entitlement Cities Grant Cluster ‐ 192,543 ‐ 54,843

Total U.S. Department of Housing and Urban Development ‐ 192,543 ‐ 54,843

U.S. DEPARTMENT OF JUSTICE

Bulletproof Vest Program 16.607 n/a ‐ 9,952 ‐ 9,952

Total U.S. Department of Justice ‐ 9,952 ‐ 9,952

U.S. DEPARTMENT OF TRANSPORTATION

Passed through the North Carolina Department of Transportation

National Priority Safety Programs 20.616 M9MT‐17‐16‐04 ‐ 3,939 ‐ ‐

Highway Planning and Construction 20.205 39225.1.30 ‐ 54,805 ‐ 13,701

Highway Planning and Construction 20.205 36230.42.1.1 ‐ 11,003 ‐ 1,223

Total Highway Planning and Construction ‐ 69,747 ‐ 14,924

Total U.S. Department of Transportation ‐ 69,747 ‐ 14,924

U.S. DEPARTMENT OF HOMELAND SECURITY

Passed through the North Carolina Department of Public Safety

Disaster Assistance Grant 97.036 FEMA‐4285‐DR‐NC ‐ 131,216 43,739 ‐

Protective Equipment 96.067 EMW‐2017‐SS‐00085‐S01 ‐ 12,339 ‐ ‐

‐ 12,339 ‐ ‐

Total U.S. Department of Public Safety ‐ 143,555 43,739 ‐

Total Federal Awards ‐ 415,797 43,739 79,719

STATE AWARDS

NORTH CAROLINA DEPARTMENT OF TRANSPORTATION

Nonstate System Street Aid Allocation POWELL BILL ‐ 32570 ‐ ‐ 874,381 ‐

Total North Carolina Department of Transportation ‐ ‐ 874,381 ‐

Total State Awards ‐ ‐ 874,381 ‐

Total Federal and State Awards $ ‐ $ 415,797 $ 918,120 $ 79,719

Note 1. Basis of Presentation

Note 2. Summary of Significant Accounting Policies

Note 3. Indirect Cost RateThe City did not utilize the 10% de minimus indirect cost rate.

Expenditures reported on the SEFSA are reported on the modified accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the

Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement.


SCHEDULE OF EXPENDITURES OF FEDERAL AND STATE AWARDS

JUNE 30, 2018

Expenditures

The accompanying schedule of expenditures of federal and state awards (the “SEFSA”) includes the federal and state award activity of the City of New Bern, North Carolina (the

"City") under programs of the federal government and the state of North Carolina for the year ended June 30, 2018. The information in this SEFSA is presented in accordance with

the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform

Guidance) and the State Single Audit Implementation Act. Because the SEFSA presents only a selected portion of the operations of the City, it is not intended to and does not

present the financial position, changes in net position, or cash flows of the City.

Passed

through to

Subrecipient

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SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED JUNE 30, 2018

SECTION I SUMMARY OF AUDITOR’S RESULTS

Financial Statements Type of report the auditor issued on whether the financial statements audited were prepared in accordance with GAAP: Unmodified Internal control over financial reporting: Material weaknesses identified? yes X no Significant deficiencies identified? yes X none reported Noncompliance material to financial statements noted? yes X no Federal Awards There was not an audit of major federal award programs for the year ended June 30, 2018 due to the total amount expended being less than $750,000. State Awards Internal control over major state programs: Material weaknesses identified: yes X no Significant deficiencies identified: yes X none reported Type of auditor’s report issued on compliance of major state programs: Unmodified Any audit findings disclosed that are require to be reported In accordance with the State Single Audit Implementation Act? yes X no Identification of major state program: Program Name Non‐State System Street Aid Allocation (Powell Bill)

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SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED JUNE 30, 2018

SECTION II

FINANCIAL STATEMENT FINDINGS AND RESPONSES None reported in 2018.

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SCHEDULE OF PRIOR AUDIT FINDINGS FOR THE YEAR ENDED JUNE 30, 2018

2017‐001 Expenditure/Expense Recognition

Condition: The City’s internal controls were not sufficient to detect and correct certain year‐end

adjustments for reporting the financial statements of the City in accordance with generally accepted

accounting principles. Audit adjustments were required to properly report the City’s expenses and

related balance sheet accounts in the Water Fund, affecting accrued liabilities and capital assets.

Status: Item was corrected as of June 30, 2018.

2017‐002 Revenue Recognition

Condition: Internal controls were not sufficient to detect misstatements in the reporting of the

City’s revenues and related balance sheet accounts. Audit adjustments were required to report an

unrecorded intergovernmental receivable with the Town of Trent Woods from related to activities

from prior years.

Status: Item was corrected as of June 30, 2018.

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