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City of Raleigh

Financial Section

D. Assets, liabilities, deferred outflows/inflows of resources and net position or equity 

1. Deposits and investments 

The City pools money from several funds to facilitate disbursement and investment and to maximize investment 

income.  Therefore, all cash and investments are essentially demand deposits and are considered cash and cash 

equivalents.   All deposits are made in City Council designated official depositories and are secured as required by 

State law (G.S. 159‐30(c)).  The City may designate, as an official depository, any bank or savings association whose 

principal office is located in North Carolina.  Also, the City may establish time deposit accounts such as NOW and 

SuperNOW accounts, money market accounts, and certificates of deposit.   

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 City’s investments are reported at fair value. The NCCMT‐Cash 

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

share price.  The NCCMT‐Term Portfolio’s securities are valued at fair value. 

The City’s investments with a maturity of more than one year at acquisition and non‐money market investments 

are reported at fair value as determined by quoted market prices.  The securities of the NCCMT Cash Portfolio, a 

SEC‐registered (2a‐7) money market mutual fund, are valued at fair value, which is the NCCMT’s share price.   In 

accordance with State law, the City has a portion of its investments in callable securities, some of which provide for 

periodic interest rate increases in specific increments until maturity.  These investments are reported at fair value as 

determined by quoted market prices. 

2. Receivables and payables 

Activities between funds that are representative of lending/borrowing arrangements outstanding at the end of 

the fiscal year are referred to as “due to/from other funds” (i.e., the current portion of interfund loans).  Any 

residual balances outstanding between the governmental activities and business‐type activities are reported in 

the government‐wide financial statements as “internal balances.” 

City ad valorem taxes are billed by the Wake County Revenue Collector after July 1 of each year based upon the 

assessed value on property, other than motor vehicles, listed as of the prior January 1 lien date.  In accordance with 

state law, property taxes on certain registered motor vehicles are assessed and collected throughout the year based 

on a staggered registration system. Wake County is responsible for the monthly billing and collections of City 

property taxes due on registered motor vehicles. Under the staggered registration system, property taxes become 

due the first day of the fourth month after the vehicles are registered.  The billed taxes are applicable to the fiscal 

year in which they become due. 

The City Council is required to approve the tax levy no later than August 1, although this traditionally occurs in 

the month of June.  Taxes are due on September 1 but do not begin to accrue penalties for nonpayment until the 

following January 5.  Collections of City taxes are made by the County and are remitted to the City as collected. 

Ad valorem taxes receivable at year‐end are not considered to be available as a resource that can be used to finance 

the current year operations of the City and, therefore, are not susceptible to recognition as earned revenue.  The 

amount of the recorded receivable for ad valorem taxes has been reduced by an allowance for uncollectible 

accounts and the net receivable is offset by unavailable revenue in an equal amount. 

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