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MD&A-12

The general fund is the chief operating fund of the City. The fund balance of the general fund increased by $18.4

million during the current fiscal year. Revenues continue to show positive growth and were utilized for normal City

programs, as well as continued investment in employees.

The North Carolina Local Government Commission strongly recommends that local governments maintain

an unassigned fund balance of at least 8.0% of general fund expenditures. The City’s policy is to maintain an

unassigned fund balance of at least 14.0% of the succeeding year’s expenditure budget. Unassigned fund balance

of $84.8 million represents 17.4% of the 2016-17 general fund expenditure budget. Unassigned fund balance is the

amount remaining after management’s policy designations.

Proprietary funds.

The City of Raleigh’s proprietary funds provide the same type of information found in the

government-wide financial statements, but in more detail. All enterprise funds are treated as major funds and

include the water and sewer, convention and performing arts complex, mass transit, stormwater management,

parking facilities and solid waste services funds. Additional discussion concerning the finances of these funds has

already been addressed in the discussion of the City’s business-type activities.

BUDGETARY HIGHLIGHTS

During the fiscal year, City Council approved various modifications to the original, approved budget. Generally, budget

amendments fall into one of four categories: 1) amendments made to adjust the estimates that are used to prepare

the original budget ordinance once final information is available; 2) amendments made to recognize new funding

amounts from external sources, such as from Federal or State grants; 3) increases in appropriations that become

necessary to maintain services; and 4) amounts that are carried over from the previous year and re-designated for

the subsequent year’s expenditures.

General Fund.

General fund revenues recognized positive budget variances during 2015-16 with actual results coming

in at $8.5 million above final budget. Revenue was positively impacted by continued improvement in both property

tax and sales tax, two of the City’s primary revenue streams. General fund expenditures came in well below budget,

which resulted in a positive budget variance of $48.4 million. All expenditure functions and departments reported

positive budget variances, which is a result of conservative budget practices as well as the City’s cost management

efforts.

CAPITAL ASSET AND DEBT ADMINISTRATION

Capital assets.

The City of Raleigh’s cumulative investment in capital assets for its governmental and business-type

activities, as of June 30, 2016, amounts to $2.9 billion (net of accumulated depreciation). This investment in capital

assets includes land, construction in progress, watershed protection rights, buildings and machinery, water and

sewer systems, streets and sidewalks, parking decks, buses, equipment, furniture and fixtures, enterprise-wide

software and general improvements. The City’s investment in capital assets for the current fiscal year was $152.5

million, a 5.5% increase over prior year.

Major capital asset investments during the fiscal year included the following:

• Construction began and/or was completed for governmental activities including a variety of street, park and

greenway projects. Total governmental projects completed and capitalized in fiscal year 2015-16 were $186.6

million. Examples include:

• The New Communications Center was completed for a total capitalized cost of $66.4 million

• The Central Operations Facility was completed for a total capitalized cost of $54.5 million

• The Falls of Neuse Road Realignment and Widening project was completed for a total capitalized cost

of $20.8 million

• The Perry Creek Road Widening project was completed for a total capitalized cost of $9.4 million

City of Raleigh

Management’s Discussion and Analysis