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MD&A-11

City of Raleigh

Management’s Discussion and Analysis

FINANCIAL ANALYSIS OF THE CITY’S FUNDS

As noted earlier, the City of Raleigh 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

spendable

resources. Such information is useful in assessing the City’s financing

requirements. In particular,

assigned fund balance

may serve as a useful measure of a government’s net resources

available for spending at the end of the fiscal year.

As of the end of the fiscal year, the City of Raleigh’s governmental funds reported combined ending fund balances

of $559.3 million, a decrease of $14.4 million or 2.5%, in comparison with the prior year. Classification of this fund

balance is as follows:

• Approximately 13.9% is considered to be

nonspendable

, representing the City’s investment in inventories and

loans receivable.

• Approximately 17.3% is

restricted

to indicate that it is not available for new spending because it has already

been restricted for:

• State statute - $52.3 million

• Debt service costs and encumbrances - $40.4 million

• Federal program reserves - $3.1 million

• Public safety - $1.1 million

• Approximately 53.1% constitutes

assigned

fund balance, which is available for spending at the government’s

discretion.

• Approximately 0.5% is

committed

fund balance, and represents the accumulated assets of the law enforcement

officers’ separation allowance plan.

• The remaining 15.2% of fund balance is

unassigned

, and represents the City’s residual net resources.

Governmental Fund Balance Classification at June 30, 2016

(in millions of dollars)

Major Funds

General

Fund

Park Bond

Fund

Nonmajor

Governmental

Total

Governmental

%

Nonspendable

$4.7

$ –

$72.9

$77.6

13.9%

Restricted:

State statute

52.3

52.3

9.3%

Debt service

-

40.4

40.4

7.2%

Federal programs

3.1

3.1

0.6%

Public safety

-

1.1

1.1

0.2%

55.4

41.5

96.9

17.3%

Committed

2.9

2.9

0.5%

Assigned

120.4

46.7

130.0

297.1

53.1%

Unassigned

84.8

84.8

15.2%

Total fund balance

$268.2

$46.7

$244.4

$559.3

100.0%