Loading...
Comprehensive Annual Financial Report - June 30, 2019Comprehensive Annual Financial Report For The Fiscal Year Ended June 30, 2019 City of Monroe, North Carolina Comprehensive Annual Financial Report For The Fiscal Year Ended June 30, 2019 Prepared By Department of Finance Director of Finance Lisa Strickland Accounting Manager Ashley Ivey                       Page INTRODUCTORY SECTION Letter of Transmittal ix-xvii GFOA's Certificate of Achievement for Excellence in Financial Reporting xviii List of Principal Officials xix Organizational Chart xx FINANCIAL SECTION Independent Auditor's Report 1-3 Management's Discussion and Analysis 5-16 Financial Statements: Exhibit Government-Wide Financial Statements: 1 Statement of Net Position 18-19 2 Statement of Activities 20-21 Fund Financial Statements: 3 Balance Sheet - Governmental Funds 22 4 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position 23 5 Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds 24 6 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 25 7 Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - General Fund 27 8 Statement of Net Position - Proprietary Funds 28-29 CITY OF MONROE, NORTH CAROLINA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2019 TABLE OF CONTENTS CITY OF MONROE, NORTH CAROLINA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2019 TABLE OF CONTENTS Exhibit Page 9 Statement of Revenues, Expenses, and Changes in Fund Net Position - Proprietary Funds 30-31 10 Statement of Cash Flows - Proprietary Funds 32-35 Notes to the Financial Statements 36-95 Required Supplemental Financial Data: Law Enforcement Officers' Special Separation Allowance Schedule of Changes in Total Pension Liability 98 Law Enforcement Officers' Special Separation Allowance Schedule of Total Pension Liability as a Percentage of Covered Payroll 99 Other Post-Employment Benefits Schedule of Changes in the Total OPEB Liability and Related Ratios 100 Local Government Employees' Retirement System City of Monroe's Proportionate Share of Net Pension Liability (Asset) - Last Six Fiscal Years 101 Local Government Employees' Retirement System City of Monroe's Contributions - Last Six Fiscal Years 102 Other Supplemental Information: Major Governmental Funds Budgetary Schedule: Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - General Fund 103-105 Combining and Individual Fund Statements and Schedules: Nonmajor Governmental Funds: Combining Balance Sheet 108-109 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 110-111 CITY OF MONROE, NORTH CAROLINA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2019 TABLE OF CONTENTS Page Nonmajor Governmental Funds Budgetary Schedules: Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - Special Revenue Fund - Community Development 112 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - Special Revenue Fund - Downtown Monroe 113 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - Special Revenue Fund - Monroe Union County Economic Development 114 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - Capital Projects Fund - Capital Projects 115 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - Capital Projects Fund - Occupancy Tax Capital Projects 116 Fund Balances - Budget and Actual - Capital Projects Fund - Governmental Capital Reserve 117 Major Enterprise Funds Budgetary Schedules: Schedule of Revenues and Expenditures - Budget and Actual - (NON-GAAP): Water and Sewer Fund 118-120 Water and Sewer Capital Projects Funds - Capital Reserve 121 Water and Sewer Capital Projects Funds 122 Electric Fund 123-125 Electric Capital Projects Fund - Capital Projects 126 Natural Gas Fund 127-129 Natural Gas Capital Projects Fund - Capital Projects 130 Airport Fund 131-133 Airport Capital Projects Fund - Capital Projects 134 CITY OF MONROE, NORTH CAROLINA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2019 TABLE OF CONTENTS Page Nonmajor Enterprise Funds: Combining Statement of Net Position 135 Combining Statement of Revenues, Expenses, and Changes in Fund Net Position 136 Combining Statement of Cash Flows 137 Nonmajor Enterprise Funds Budgetary Schedules: Schedule of Revenues and Expenditures - Budget and Actual - (NON-GAAP): Aquatics and Fitness Center Fund 138-139 Stormwater Fund 140-141 Stormwater Management Capital Projects Fund - Capital Projects 142 Solid Waste Fund 143-144 Internal Service Funds: Combining Statement of Net Position 145 Combining Statement of Revenues, Expenses, and Changes in Fund Net Position 146 Combining Statement of Cash Flows 147 Internal Service Funds Budgetary Schedules: Schedule of Revenues and Expenditures - (NON-GAAP): Health and Dental Fund 148 Workers' Compensation Fund 149 Property and Liability Fund 150 Other Schedules: Schedule of Ad Valorem Taxes Receivable 151 Analysis of Current Tax Levy - City-Wide Levy 152 Schedule of Municipal Service District Taxes Receivable 153 Analysis of Current Tax Levy - Municipal Service District Levy 154 STATISTICAL SECTION Financial Trends: Net Position by Component 157 Changes in Net Position 158-159 Fund Balances, Governmental Funds 160 Changes in Fund Balances, Governmental Funds 161 CITY OF MONROE, NORTH CAROLINA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2019 TABLE OF CONTENTS Page Revenue Capacity: Assessed Value and Actual Value of Taxable Property 162 Direct and Overlapping Property Tax Rates 163 Principal Property Taxpayers 164 Property Tax Levies and Collections 165 Debt Capacity: Ratios of Outstanding Debt by Type 166 Direct and Overlapping Governmental Activities Debt 167 Legal Debt Margin Information 168 Pledged-Revenue Coverage 169 Demographic and Economic Information: Demographic and Economic Statistics 170 Principal Employers 171 Construction Information 172 Operation Information: Full-Time Equivalent City Government Employees by Function 173 Operating Indicators by Function 174 Capital Asset Statistics by Function 175 COMPLIANCE SECTION 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 177-178 Report On Compliance for Each Major Federal Program; Report On Internal Control Over Compliance; In Accordance With Uniform Guidance; and the State Single Audit Implementation Act 179-180 Report on Compliance for Each Major State Program; Report On Internal Control Over Compliance; In Accordance With Uniform Guidance; and the State Single Audit Implementation Act 181-182 Schedule of Findings, Responses, and Questioned Costs 184-186 Schedule of Prior Year Audit Findings 187 Schedule of Expenditures of Federal and State Awards 188-189                       Introductory Section  Letter of Transmittal  Certificate of Achievement for Excellence in Financial Reporting  List of Principal Officials  Organizational Chart                       monroenc.org • 704-282-4500 • PO Box 69, Monroe, NC 28111 October 17, 2019 To the Honorable Mayor Bobby Kilgore, Members of the City Council, and Citizens of the City of Monroe: We are pleased to present to you the Comprehensive Annual Financial Report (“CAFR”) of the City of Monroe for the fiscal year ended June 30, 2019. The financial statements and supplemental schedules have been audited by the independent certified public accounting firm of Martin Starnes & Associates, CPA’s, P.A. and that firm’s unmodified report is presented as the first component of the Financial Section of this report. Responsibility for both the accuracy of the data and the completeness and fairness of the presentation, including all disclosures, rests with the City.  Management assumes full responsibility for the completeness and reliability of the information contained in this report, based upon a comprehensive framework of internal control 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 enclosed information is accurate in all material respects and is reported in a manner designed to present fairly the financial position and results of operations 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. The financial statements have been prepared in compliance with the applicable requirements of the General Statutes of North Carolina and are consistent with the standards and guidelines recognized for governmental accounting and reporting contained in both Audits of State and Local Governments, and audit guide prepared by the Committee of Governmental Accounting of the American Institute of Certified Public Accountants (AICPA), and Government Auditing Standards, issued by the Comptroller of the United States. Among other resources used in the preparation of the CAFR, the Finance Department has given particular attention to the Governmental Accounting, Auditing and Financial Reporting (GAAFR), issued by the Government Finance Officers Association of the United States and Canada (GFOA) and Governmental Accounting Standards Board (GASB) pronouncements. Management’s Discussion and Analysis (“MD&A”) immediately follows the independent auditors report and provides a narrative introduction, overview and analysis of the basic financial statements. The MD&A complements this letter of transmittal and should be read in conjunction with it. The goal of the annual independent audit is to provide reasonable assurance that the financial statements of the City for the fiscal year are free from material misstatement. The independent audit involves examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The City is also required to undergo an annual compliance audit on federal and state financial assistance programs in conformity with the provisions of the State Single Audit Implementation Act and the U.S. Office of Management and Budget Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. The auditor’s reports and the Schedule of Expenditures of Federal and State Awards, required as part of a single audit, are found in the Compliance Section of this report. The Reporting Entity In conformity with the standards of GASB, the City of Monroe includes all funds, agencies, boards, commissions and authorities that are controlled by or are financially dependent upon the City. Component units are legally separate entities for which the primary government is financially accountable or for which the nature and significance of their relationship with the primary government are such that their exclusion would cause the reporting entity’s financial statements to be misleading or incomplete. The primary Government is considered financially accountable if it appoints a voting majority of the organization’s governing body; and 1) it is able to impose its will on that organization, or 2) there is a potential for the organization to provide specific financial benefits to, or impose specific financial burden on the primary government. Discretely presented component units are reported in a separate column in the Government-wide financial statements to emphasize that they are legally separate from the primary government and to distinguish their financial position, results of operations, and cash flows from those of the City. The City of Monroe has included the City of Monroe ABC Board and the Monroe Tourism Development Authority as discretely presented component units. The governing members of both of these ix units are appointed by the City Council. Additional information on these legally separate reporting entities can be found in the Notes to the Financial Statements. Organization of Government The City of Monroe was established in 1844, and is located near the center of Union County in the Southern Piedmont region of North Carolina. The City is a diverse community of over 35,000 residents, and has an incorporated area of over 30 square miles. Monroe serves as the County seat for Union County. Mon roe’s corporate limits are approximately seven miles southeast of Charlotte. The City Council may involuntarily annex property into the corporate limits so long as requirements set forth in North Carolina general statutes are met. North Carolina requires that those subject to an involuntary annexation have the opportunity to approve or reject the involuntary annexation initiated by the municipality by referendum. Annexed areas are also required to be guaranteed fire, police, and solid waste services immediately upon annexation and provisions for water and sewer service within three and one-half years of annexation. Voluntary annexations may also be considered and approved at the discretion of City Council, following all statutory requirements. The City is organized under a Council-Manager form of government, with a six-member City Council and Mayor serving as the governing body, and who are responsible for policy-making and establishing legislative authority. City Council members are elected on a non-partisan basis to staggered four-year terms. The Mayor is elected to serve a two-year term, and is a full voting member on the City Council. The City Council is responsible for passing ordinances, adopting the annual budget, appointing committees, and appointing the City Manager, City Attorney, City Clerk and Tax Collector. The City Manager is responsible for carrying out the policies and ordinances of the City Council, for overseeing the daily operations of the government, and for selecting the department heads to manage the various City departments. The City provides numerous services for its citizens including airport operations, cultural and recreational activities, general administration, planning, zoning, economic development, building inspections, code enforcement, police, fire, sanitation, cemetery management, tourism, public works, stormwater, and street maintenance. The City also provides and maintains electric, natural gas, water, and sanitary sewer utilities for the benefit of its citizens and businesses. This report includes the fiscal activities of the City in the provision of these services. The City takes pride in the services offered to our citizens, and the mission of City staff is to provide reliable, responsive, quality service to our customers at the lowest reasonable cost. We accomplish this through professional and courteous service consistent with making Monroe a vibrant and progressive community. City staff strives to be proactive in addressing the various needs of the community, and adheres to the guiding principles of Teamwork, Customer Service, Respect, and Accountability. The City also provides financial support to certain boards, agencies and commissions to assist their efforts in serving our citizens. Organizations that receive support from the City include the American Red Cross, HealthQuest of Union County, Monroe Athletic Foundation, Community Health Services of Union County, Union County Crisis Assistance Ministry, Anson- Union County Habitat for Humanity, Union County Community Arts Council, Council on Aging in Union County, the Monroe- Union County Community Development Corporation, the Union County Historic Preservation Commission, Turning Point, Union County Community Action, Inc., the Union County Community Shelter, Arc of Union County, the Police Athletic League, Alliance for Children, Central Academy of Technology and Arts Band, the Humane Society of Union County, Inc., the Village Development Center, the Union County Youth Ballet and Artists Music Guild. Economic Condition and Outlook Monroe’s manufacturing and commercial base has capitalized on the current economic expansion. New and existing industries have announced nearly $277 million in new capital investments in manufacturing equipment, facility expansions and relocations during FY 2018-19. Manufacturing expansion announcements of note in Monroe include: ATI Specialty Materials - $140 million for a new specialty alloy processing facility; Greiner Bio-One North America - $12.7 million in equipment investment; and Collins Aerospace - $27 million for the expansion and equipment purchase at its maintenance, repair and overhaul (MRO) facility in the Monroe Corporate Center. Monroe continues to evolve as a center for business investment and job creation. Monroe’s workforce is diverse, consisting of industrial, construction, agricultural, and retail employment. The City’s economic base includes major employers involved in aerospace, plastics, healthcare, food processing, professional services, and education. The City maintains a small town atmosphere and enjoys the benefits of being part of the Charlotte metropolitan x region. While serving as a significant regional employment and commercial center, Monroe residents also make up nearly 66% of the total industrial workforce in Union County. Monroe has achieved regional, national and international recognition. Accolades include: Top 10 County for Job Creation Nationally Since 2000 – CNN/Money.com; 18+ Years Lowest Unemployment in the Charlotte Region – NC Department of Commerce, Division of Employment Security; and #1 Aerospace Cluster in North Carolina – NC Department of Commerce. Monroe has evolved into a premier location for precision manufacturing. Nearly 15% of the industrial base and 23% of the manufacturing employment is deep-rooted in aerospace, resulting in the highest geographic concentration of aerospace companies in North Carolina (NC Department of Commerce). Also, Monroe’s industrial base is international with 10 countries represented among 16 companies. The continued investment among the community’s existing firms, as well as newly located operations, shows that Monroe’s economy is strong. It is now reaping the rewards of its unwavering commitment to creating a pro-business environment in which manufacturers prosper. Major Initiatives The City of Monroe has been involved in many significant initiatives during the past fiscal year. The City Council has identified and addressed key issues that are of importance to the future of the City, including utility planning for water, wastewater, electric, and natural gas demands brought on by system growth. The City has developed a fifteen year rate model for projecting water and wastewater rates to address the impact of future capital improvement projects on the City’s rate structure. The goal is to achieve incremental single digit rate increases rather than large rate increases in the year infrastructure is financed. The Water Resources Department continues to monitor economic condition and growth potential and adjust strategic capital project initiatives to match growth projections. A capital reserve fund has also been established to meet long term capital improvement needs. Current initiatives are focusing on system sustainability and asset management programs. The Department recently accepted an NCDEQ grant to develop an asset management and mobile work order system. The system will be on-line by the end of 2019. The renewal and replacement of aging water and wastewater pipeline infrastructure is a priority and the City continues to use innovative trenchless technologies for these programs. The water treatment plant is undergoing a $5.5-million-dollar upgrade to improve capacity, reliability, and safety. Preventative maintenance programs for all equipment continue to be refined. Equipment replacements at the City water and wastewater treatment facilities are ongoing to ensure reliable performance. Utility coordination and infrastructure relocations for the Turnpike Authority Monroe Bypass have been completed. There are other major NCDOT projects underway involving utility coordination and relocations. Economic activity from residential, commercial, and industrial development is having a positive effect on revenue. The City of Monroe’s Natural Gas Division operates and maintains a 43-mile natural gas transmission pipeline and 477 miles of natural gas distribution mains per federal regulation 49 CFR Part 192. With the installation of 128 new services, the natural gas customer count has increased to 11,532 customers. Peak gas usage day was on Monday, January 21, 2019, with a volume of 18,448 MCF (18,448,000 cubic feet) on a 39.6 heating degree day (36°/21° F). The natural gas volume for the fiscal year was 3,363,617 MCF. Energy Services Utility Locators have located 16,658 NC811 locate tickets including natural gas, electric, and City fiber telecommunications. During fiscal year 2019 the following projects were undertaken:  Installed 761 feet of two-inch polyethylene main to provide a two-way feed in Rolling Hills Subdivision.  Relocated 215 feet of six-inch steel main in conflict with grading on N. Rocky River Rd. at U.S. Highway 74 for NCDOT project 45703.  Installed 3,501 feet of four-inch polyethylene main and 8,054 feet of two-inch polyethylene main for Stratford Subdivision (Phases 1A and 1B).  Installed a regulating station on Ridge Rd. to supply natural gas to Stratford Subdivision.  Installed 40 feet of 4” polyethylene pipe to tie-in the boil-off pipeline of the LNG Peak Shaving Facility to the 60 psig distribution natural gas system, and installed 125 feet of 8” steel pipe to tie-in the send-out pipeline of the LNG Peak Shaving Facility to the distribution 275 psig feeder main.  Installed 600 feet of six-inch steel pipe operating at 275 psig to relocate Deese Rd. regulating station due to accessibility issues created by the construction of the Monroe Bypass.  Lowered 347 feet of twelve-inch steel natural gas transmission pipeline and fiber optic telecommunication cable to avoid a conflict for a turning lane to the Hawthorne at the Glen Luxury Apartments on Kannapolis Parkway. xi  Installed 5,678 feet of two-inch polyethylene main for Stonebridge Subdivision (Phase IV).  Installed 3,320 feet of four-inch polyethylene main to replace a two-inch steel main on Concord Ave. with a corrosion leak history.  Installed seven galvanic anode ground beds on the distribution 275 psig feeder main.  Responded to 287 emergency responses (gas odor inside/outside calls), twenty-five emergency responses were hazardous leaks.  Repaired eight underground natural gas leaks and 261 meter leaks.  Upgraded 199 Itron 40G encoder receiver transmitters (ERTs) to Itron 100G ERTs in a dedicated ERT change out program.  Construction of the LNG Peak Shaving Facility at 2111 Morgan Mill Rd is nearing completion. The City’s Electric Division maintains 19.5 miles of 100 kV transmission lines, 290 miles of distribution lines, and 6 main substations. The Electric Division provides electric service to approximately 11,000 customers from residential to small commercial and industrial customers with up to 15 MW electric loads. The system had a peak demand of 134 MW and annual electric sales of 656,204,285 Kilo-Watthours. During fiscal year 2019 the following projects were undertaken:  Replace/retire downtown vault switches and high voltage cables.  Add additional facilities to serve a new process facility at ATI Metals.  Install substation security and wildlife protection.  Expanded electric facilities in the Corporate Center for future growth.  Upgrade wire size on several overhead high voltage circuits to allow for additional growth and reliability.  Extend high voltage overhead power lines to serve new territories.  Paint several substation transformers and replace the oil in them to extend their life and keep them operating efficiently. The City of Monroe implemented a stormwater utility program on January 1, 2009 to address the Environmental Protection Agency’s (EPA) National Pollutant Discharge Elimination System (NPDES) Phase II requirements and to provide a comprehensive stormwater maintenance program to improve the existing stormwater system. As part of the NPDES requirements, the Engineering Department has developed several stormwater public education and involvement programs. These programs include classroom presentations to area students and home owner associations using a portable, interactive watershed model known as an EnviroScape. In addition to the classroom presentations, the Engineering Department will be purchasing a Topobox Sand Model for the City’s Science Center to teach citizens about properties of topography, hydrology, geomorphology, and land management. Opportunities for public involvement include Adopt-a-Stream, a storm drain marker, and water monitoring programs. The Engineering Department also oversees in-house pollution prevention and good housekeeping by the various City of Monroe facilities to address spill prevention, vehicle/equipment maintenance and outdoor storage of materials and wastes. As part of the NPDES Illicit Discharge Detection and Elimination requirement, the Engineering Department has walked stream segments within the Stewart, Bearskin and Richardson Creek Watersheds in an effort to identify illicit discharges. In a continued effort to identify illicit discharges within the watersheds, the Engineering Department walks one of the three watersheds each year on a rotating basis. Regarding existing infrastructure, the City of Monroe staffs a 6-person stormwater maintenance crew dedicated to the improvement and maintenance of the existing stormwater system. Responsibilities include repair, new construction and routine system maintenance of the stormwater infrastructure. The stormwater maintenance crew with assistance from street maintenance crews as needed have completed over 1,600 work orders in addition to completing thirteen capital improvement projects between 2009 and 2019. The Engineering Department has completed the Stormwater Master Plan study for the entire City including an environmental in-stream assessment and water quality monitoring and modeling for the Stewart Creek Watershed, Bearskin Creek Watershed and Richardson Creek Watershed. With a Total Maximum Daily Load (TMDL) for Richardson Creek and Stewart Creek expected in the imminent future, the need for assessing channel stability, sediment loading, nutrient sources and other ecological stressors within the stream corridors is vital. The Engineering Department is implementing a water quality improvement program to improve the water quality in the Stewart Creek watershed as the first major step in Monroe’s water quality improvement initiative. The results from the water sampling were used to select and evaluate suitable sites for potential stormwater control measures (SCM). The results of the SCM evaluation and siting effort will support the implementation of SCMs for the City to capture future grants as they become available. The Charlotte-Monroe Executive Airport is Monroe’s air transportation hub and economic catalyst. With the estimated 56,000 take-offs and landings and 108 privately owned, based aircraft, the Airport supports corporate aviation operators having xii worldwide access while providing fuel and other services such as international U. S. Customs terminal. Its annual economic impact is over $24M in business revenue, supporting over 300 jobs, which in turn offers $12.3M in personal income and generates $1.9M in state and local taxes. The Airport continues to improve the facilities by rehabilitating a major aircraft ramp with the assistance of a NC Department of Transportation $2.8M grant, and utilizing $400K in FAA entitlement funds to update the Airport Layout (“Master”) Plan. These projects coincide with the boost in growth the Airport is currently experiencing. The new 10,000 square foot hangar is already filled to capacity, and completion of a 12,000 sq. ft. hangar is anticipated for the end of year so the City can increase its based aircraft and expand airport services with a jet charter operation. All this activity at the Charlotte-Monroe Executive Airport demonstrates how it connects people and companies to markets around the globe, supports business growth, and moves our economy forward. City Council is supportive of the City’s public safety departments and supports their efforts in making Monroe a better community. The following programs were implemented in order for police officers to build stronger relationships with youth and the community. This year, the department sponsored three Bridge Builder Camps and the Gang Resistance Education and Training (G.R.E.A.T.) camp. The Bridge Builder Camps were week-long programs in three different communities. Officers presented programs and activities for the children as well as provided meals for them every day. Every summer our School Resource officers and Community Services Division take students from the G.R.E.A.T. Program on a week-long day camp and participate with them doing a different activity each day. These programs were used to build trust between law enforcement and our young community members. The Police Department also sponsors the Police Athletic League Program (PAL). This is the longest running community involvement for the department with the program being in its 14th year. Officers work with children ages 7-12 with approximately 100 children participating in the different sports which include football, baseball, and basketball. PAL is a mentoring program where officers partner with the children. The Monroe Police Department has an active Explorer Post with 15 participants. Law Enforcement Career Exploring is open to young men and women, ages 14 (and completed the 8th grade) but not yet 21 years old, who have an interest in learning more about careers in the field of law enforcement. Law Enforcement Exploring provides educational training programs for young adults on the purposes, mission, and objectives of law enforcement and provides career orientation experiences, leadership opportunities, and community service activities. The primary goal of the program is to help young adults choose a career path within the law enforcement community and to challenge them to become responsible citizens of their communities and the nation. The Monroe Police Department works in partnership with the Drug Enforcement Administration (DEA) and the Federal Bureau of Investigations (FBI) assigning three task force officers. This is a collaborative effort to investigate serious drug related crimes that occur within the City of Monroe and surrounding areas. The Monroe Fire Department provides the residents of Monroe with a high level of fire protection and suppression services. The Operations Division protects the community with 75 full-time employees operating three engine companies, one ladder/rescue combination-company, two quint companies, three aviation firefighting units, two brush trucks and two hazardous materials units. The department's equipment is housed in five strategically located fire stations. The department also has nine full-time and two part-time employees serving in the Fire Marshal, Training and Administration Divisions. The Fire department is accredited through the Commission on Fire Accreditation International, being one of approximately 275 accredited agencies internationally. This is significant not only for the City and Fire department, but for our residents, business owners and visitors to Monroe. The Fire department is certified through the North Carolina Association of Rescue & EMS in the areas of heavy rescue, high angle rescue, confined space rescue and water rescue. The department embraces a recently updated five-year strategic plan that will guide the department through 2023. The strategic plan is a community driven plan developed with citizen input. Following a Fire Suppression Rating Survey in December of 2018, the City now holds an improved ISO Fire Insurance Rating of Class 2. This improved rating from a Class 3 to Class 2 reflects well on the City’s professional fire operations and water system infrastructure. This rating also allows the City’s businesses and homes to enjoy low fire insurance premiums. The City of Monroe continues to seek funding for roadway improvements to improve our road system network. Engineering Department Staff as well as the City’s Planning Department continue to work through the State Department of Transportation and the Charlotte Regional Transportation Organization to improve the roadway network in Monroe. xiii Through the State Transportation Improvements Program (STIP), opportunities are approaching for major changes to two gateways into Monroe. Projects include (1) US Highway 74 widening from 4 lanes to 6 lanes from Rocky River Road to Roland Drive; (2) US 74/US 601 Interchange Improvements and (3) Widening of US 601 to 4 lanes with median from US 74 to the Monroe Bypass. The City of Monroe is to contribute approximately $360,000 for the US Highway 74 project toward the installation of a 10-foot wide multi-use path (MUP) on one side and an 8-foot wide sidewalk on the opposite side. Similarly, the City of Monroe is to provide $252,980 on the US 74/ US 601 Interchange project towards the installation of 8-foot wide sidewalks on both sides along the project. As part of the US 601 Widening Project, the City’s share for the provision of a 10- foot wide MUP and 8-foot wide sidewalk is $411,500. Improvements are also taking shape for Old Charlotte Highway with the first section of a project from Seymour Street to NC 200 (Dickerson Boulevard). Sidewalks and bike lanes are planned for these roadway improvements in addition to center medians that will present landscaping opportunities for Monroe. The City’s share of the pedestrian improvements is estimated at $193,000 for the Charlotte Avenue improvements. Other projects include the recently completed intersection improvements along US 74 at the intersection of Secrest Avenue with improvements at Rocky River Road and US 74 currently under construction. In conjunction with the project at US 74 and Rocky River Road, the City is contributing $250,000 of the estimated costs of $629,657 to incorporate the realignment of Myers Road and James Hamilton Road with Rocky River Road as part of the superstreet project on US Highway 74. The City currently maintains just over 169 miles of roadway. Staff developed a pavement maintenance plan in 2007 which divides the streets into two categories: priority and local residential. The priority streets within the City are approximately 22 miles in length with various widths and provide connectivity to the State’s Street System and typically serve as collector streets. The local residential streets are considered to be minor streets and primarily serve the immediate neighborhoods, have minimal traffic volumes, and include the remaining 147 miles of street that are currently Powell Bill eligible. The goal of the maintenance plan is to resurface all priority streets on a 12 to 15-year cycle which correlates with the industry standard and local residential streets on longer cycle length. Funding for resurfacing has improved recently with an increase in vehicle tax being approved in Fiscal Year 2017. Prior to the increase, the priority streets were averaging a 19-year cycle for resurfacing and the remaining local residential streets were averaging a 65-year cycle. With the additional funding from the vehicle tax increase, the priority streets should improve to a 15-year cycle and the residential cycle should improve to 35-year cycle. The City of Monroe, Mayor and City Council and concerned citizens would like to give Downtown its own market niche. City Council has approved a Master Plan for the downtown area. Opening new businesses Downtown, thereby improving the business mix, attracting shoppers and residents, raising property values and sales tax revenues are all elements of the plan. Restored buildings, attractive storefronts and pedestrian friendly walks and streets will change and reinforce the public’s perception that Downtown is the ‘heart and soul’ of Union County. Monroe is a Main Street America, 2019 Accredited and NC Main Street Designated Community, uses the Main Street approach to Downtown revitalization, a comprehensive, incremental four-point approach. The revitalization effort will focus on the areas of design, organization, promotion, and economic restructuring: a practical Downtown management strategy, in combination with the Downtown Master Plan, will produce fundamental changes in the Downtown’s economic base. The City has had approximately $2,130,000 in private sector investments (acquisitions/sales) in four (4) downtown properties, had nine (9) new business openings and hosted downtown special events and promotions. The total value of new public investment in downtown was $4,714,724 and private investment was $3,330,216 for a total public/private investment in downtown of approximately $8,004,939, as reported to North Carolina Main Street. Volunteers logged approximately 1,061 hours, valued at $24,838, assisting with events, meetings and other downtown revitalization efforts. The City takes great pride and shows its commitment to revitalization in the downtown area with continuation of four construction projects as follows: 1. Center Theatre - The City purchased the Center Theatre in 2013 and the adjacent units in 2015. The Center Theatre renovation is currently under construction with an anticipated completion date of December 15, 2019 with an estimated opening of early 2020. 2. Senior Center - The City purchased the Enquirer Journal Newspaper building in 2016 and plans to renovate this facility to serve as a new Senior Center. The current Senior Center facility is too small for the demand on the facility and adequate parking has created challenges. The new facility will provide the same services and plenty of parking. Project construction will be bid in fall 2019. 3. Science Center - The City purchased a building that used to be a grocery store near the Union County Public Library on Franklin Street with the intention of converting the facility into a Science Center. The operation of this facility will be funded by Occupancy Tax Revenue. The renovation is currently under construction with an anticipated completion date in fall 2019 with an estimated opening in early 2020. xiv 4. Police Headquarters - The current police headquarters is located in a building that was built in 1987. The building was originally utilized by the Union County Department of Social Services until it was purchased by the City in 2001. This building has housed fire station administrative offices and the police department since then, but is functionally obsolete and lacking space to adequately serve the public. The new police headquarters will provide much needed space for staff and evidence storage as well as being a secure facility. It will be located on the Scott Aviation property across the street from City Hall. Project construction will be bid in fall 2019. The Information Technology (IT) Department is continuing to update the City’s server hardware and software infrastructure. The GIS portal has been improved for field and internal use. The GIS division has added editing capabilities to the GIS portal for field use. The LaserFiche document management system is being upgraded to include automated import. City View software is in the process of being rolled out with a projected go live during this fiscal year as a major upgrade to plan review and permit processing functions. The IT department is in the procurement stage to implement several security initiatives to protect the IT infrastructure from malware attacks. The City has purchased the Lucity software suite and will have it implemented by November 2019 for Water Resource asset management. The IT infrastructure has been expanded with new facilities that been added recently. The IT infrastructure will continue to expand with several facilities that will be added in the near future. The City of Monroe pursues grant funding to provide resources for the completion of various projects. During the 2018-2019 year, the Police Department continued utilizing a three year COPS Hiring Grant in the amount of $500,000 that funds up to 75% of entry-level salary and fringe benefits for four full-time officers. The Fire Department continued utilizing a Staffing for Adequate Fire and Emergency Response (SAFER) grant by the U.S. Department of Homeland Security. This is a three-year grant that pays 75% of three firefighter positions’ salary and benefits in years one and two of the grant and then 35% for the third year. The airport is ever positioning itself to continue promoting economic growth for the community. Funded through federal and state grants, rehabilitating the runway aprons has continued and the taxiway lighting rehabilitation project is under construction. These projects will ensure that the facilities keep up with the operational demands for the future. During the year, the City was a sub-recipient from Union County of a Community Development Block Grant (CDBG) through the Urban County Entitlement Program. A cooperative agreement has been entered into with Union County and work continues on the project for improvements to the Concord Avenue sidewalks and infrastructure. The Water and Sewer Department received two grants last year through the North Carolina Department of Environmental Quality for Drinking Water and Wastewater Asset Inventory & Assessment in the amount of $150,000 each. The asset inventory and assessment grants are currently in progress. The Planning Department received a 2018 Historic Preservation Fund Grant for the Monroe Historic District Design Guidelines Update in the amount of $19,000. This grant was completed in late August 2019. In September of 2018, the City of Monroe incurred damages to several City facilities and property from Hurricane Florence. The City is working with the Federal Emergency Management Agency (FEMA) for reimbursement of costs incurred. As of June 30, 2019, $152,287 had been awarded in Public Assistance Disaster Grants. The City is in the process with FEMA for additional funding through Public Assistance Disaster Grants. The Police and Fire Departments provided mutual aid assistance for three different missions after Hurricane Florence. These missions were in Boiling Springs Lakes and Maxton, North Carolina. Fire personnel provided support of emergency protective measures through structural, medical, rescue and flood response to the Queheel Fire Department in Maxton, NC. The Police Department provided support of emergency protective measures through providing complete law enforcement services for the Boiling Springs Lake Police Department. Long-Term Financial Planning and Major Initiatives The City seeks to maintain a strong financial position. This objective requires regular long-term planning of operating and capital requirements for its major general government and enterprise programs. In doing so, the City relies on key financial policies and procedures for dealing with future events in financially responsible ways. xv Annually, the City adopts a 5-year Capital Improvement Program (CIP) that looks ahead to project and plan for capital needs. The program outlines each capital project, the estimated cost, description and funding source. The City takes into consideration and monitors CIP needs that require additional operating costs and personnel. Using this information, the City updates its long range business models for each of its utility functions. This is done to ensure that each utility will continue to be solvent in long-term projections and has adequate reserves for any upcoming capital expenditures. City Council and management are committed to budgeting and managing all resources in the most cost-effective manner. As part of the City’s strategic plan, the City Council has formally assigned fund balance for use in future years for the airport and street resurfacing. It has also established a capital reserve fund to accumulate funds for greenway construction. The City adopted Forward Monroe-Land Use/Transportation Plan in April 2018 with a vision that Monroe will be a dynamic and progressive city that promotes growth that boosts our economy, protects our neighborhoods, and enhances our downtown. Our vibrant community will be a great place to live and work, highlighted by safe and attractive neighborhoods, quality parks and open spaces, and transportation options that make it easy to travel throughout the City. Forward Monroe is the City’s blueprint for development, its growth strategy, and the foundation upon which future land use and transportation decisions will be based. The City is focusing on community planning and re-development projects in two main areas and housing repair along with economic vitality initiatives throughout the City. The first is the Concord Area Master Plan where the City wishes to improve the aesthetics, safety, viability and appeal of the area through a comprehensive small area redevelopment plan. The plan was adopted in 2015 and an overlay district for the Concord Avenue Area was adopted in 2017 that includes the ordinances and zoning map amendment to initiate the plan implementation. The City received Community Development Block Grants through a partnership with Union County for the construction of a 2100 linear foot pedestrian facility (Handicapped Accessible Sidewalk) from Lomax Street to Old Charlotte Avenue. The City leveraged utility improvements, completed the design phase, and is in the process of right of way acquisitions as part of the funded project. Also in the Concord Area, an environmental analysis and strategy was conducted that resulted in five land acquisitions for future transportation and/or economic development projects. Through our work in the community, the City is a beneficiary of a land donation for greenspace and transportation improvements to benefit the low to moderate income area. The second focus is the Winchester/Paradise Heights area. A Council Committee was established to seek public input on initiatives. We are currently conducting an environmental study of City owned parcels and possible greenspace improvements. In addition, we are conducting an environmental study of infill lots in preparation for housing activities. We continue to provide owner-occupied homeowners with resources and referrals for housing repairs throughout the City including Sutton Park through community partnerships and volunteerism. The City is preparing to market two land bank lots for economic vitality, one will be released with the completion of the Center Theatre. In order to continue to grow and enhance the overall economy of the area, the City has continued its partnership with Union County to provide a county-wide economic development organization called Monroe-Union County Economic Development. The goals of the organizational work plan are to:  Create more job opportunities  Generate additional industrial/commercial capital investment  Better define Union County for various target audiences Monroe-Union County Economic Development will seek to accomplish these goals through broad and focused marketing methods; aggressive recruitment missions; continued, enhanced existing industry programs; and new product development. The objective is to average $60 million in new capital investment from both existing and new companies on an annual basis. Since January 1, 2013, there has been $774 million in capital investment announced and over 1,911 jobs created, an average of $129 Million per year. This investment also generates over $650 Million of income for Monroe and Union County’s residents and the manufacturing jobs created account for 22% of all employment in the county. Relevant Financial Policies The City regularly reviews revenues and expenditures throughout the fiscal year. During the course of the year, if actual revenues are expected to fall short of the budgeted amount, expenditures are reduced to ensure that a shortage of funds or a significant use of fund balance does not occur. City financial policy dictates that our current operating revenues be sufficient to support current operating expenditures. The City administers a cash management and investment program that seeks to maximize, in order of priority, the preservation of funds, liquidity and interest earnings over its cash and investments. Cash resources of the individual funds are combined to form a pool of cash and investments. The average cash and investment pool balance during the year was $164,705,746. xvi Investment income includes the change in the fair value of investments . During the year monies were invested and secured in accordance with state law . A key financial goal of the City for many years has been the maintenance of a fund balance policy in the General Fund . The City of Monroe restricts the use of the greater of $7,500 ,000 or 25% of the next year's original adopted budget, net of F ederal and State pass-through revenues . In addition , the City has desired to appropriate a portion of fund balance resulting from positive budget variances for one-time capital expenses . Council has the ability to accomplish this by formally assigning money for spending on specific capital projects . Other practices followed are designed to avoid the meeting of recurring expense needs with one-time revenue resources and to ensure an ongoing mix of pay-as-you-go funding of capital needs with long-term debt. Awards and Acknowledgements A w ards . 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 Monroe for its Comprehensive Annual Financial Report for the fiscal year ended June 30, 2018 . This was the 26 1h consecutive year that the City has received this prestigious award . In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized CAFR. This report must satisfy both GAAP and applicable legal requirements . A Certificate of Achievement is valid for a period of one year only . We believe that our current CAFR continues to meet the Certificate of Achievement Program's requirements, and we are submitting it to the GFOA to determine its eligibility for another certificate. Acknowledgements. The preparation of this report is a very intensive project, and could not have been accomplished without the assistance and dedication of the Finance Department staff and other personnel from various departments who assisted in its preparation. A particular thank you goes to Accounting Manager Ashley Ivey and Senior Budget Analyst Mary Lou Connelly who have provided valuable assistance with financial and accounting expertise this past year. The Mayor and City Council continue to be very supportive of our efforts to produce the best financial reports possible for our citizens, and they provide leadership and support in maintaining the highest standards of professionalism in the fiscal management of the City. We appreciate their support in granting us the time and funding to generate this document, and allowing us to submit it to the GFOA for consideration. Lastly , we would like to express our appreciation to our independent auditing firm, Martin Starnes & Associates , CPA's, P.A ., for their cooperation and ass istance in these efforts . Respectfully submitted, -2~ Larry Faison City M anager dlA~~~ Lisa Strickland Finance Director xvii Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to City of Monroe North Carolina For its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2018 Executive Director/CEO xviii CITY OF MONROE, NORTH CAROLINA LIST OF PRINCIPAL OFFICIALS June 30, 2019 Elected Officials Bobby G. Kilgore Mayor Gary L. Anderson Mayor Pro Tem Surluta A. Anthony Billy A. Jordan Marion L. Holloway Franco J. McGee Lynn A. Keziah City Administration E. Larry Faison City Manager S. Mujeeb Shah-Khan City Attorney Bridgette H. Robinson City Clerk Brian J. Borne Assistant City Manager/Downtown Monroe Director Lisa Strickland Director of Finance Bruce Bounds Director of Information Technology Russell G. Colbath Director of Water Resources Tonya Edwards Director of Parks & Recreation Ronald D. Fowler Fire Chief J. Bryan Gilliard Police Chief James N. Loyd, Jr. Director of Engineering & Stormwater David E. Lucore Interim Director of Energy Services R. Christopher Platé Executive Director of Economic Development Debra C. Reed Director of Human Resources Lisa Stiwinter Director of Planning & Development xix City of Monroe, North Carolina Organizational Chart  Citizens City Attorney  City Manager  Mayor and City Council  Assistant City Manager  Finance Tourism Development  Authority Information  Technology Police Fire Airport Human Resources Water Resources Energy Services  Engineering Downtown Parks and Recreation Planning Economic  Development City Clerk   ‐Electric ‐Natural Gas ‐Accounting ‐Billing ‐Customer Service ‐Purchasing ‐Fleet ‐Warehouse‐Safety and Risk Management ‐Water Treatment ‐Waste Treatment ‐Parks Maintenance ‐Golf Course ‐Aquatics & Fitness  Center  ‐Building Standards ‐Code Enforcement ‐Community Maintenance ‐Community Redevelopment ‐Permitting ‐Stormwater ‐Street Maintenance ‐Solid Waste  Public Information Facilities  Maintenance xx 730 13th Avenue Drive SE ♦ Hickory, NC 28602 ♦ 828-327-2727 ♦ Fax 828-328-2324 13 South Center Street ♦ Taylorsville, NC 28681 ♦ 828-632-9025 ♦ Fax 828-632-9085 800-948-0585 ♦ www.martinstarnes.com INDEPENDENT AUDITOR’S REPORT To The Honorable Mayor and Members of the City Council City of Monroe Monroe, North Carolina Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business -type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Monroe, North Carolina, as of and for the year ended June 30, 2019, 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 did not audit the financial statements of the City of Monroe ABC Board which represents 70 percent, 65 percent, and 66 percent, respectively, of the assets, net position, and revenues of the aggregate discretely presented component units. Those statements were audited by other auditors whose report thereon has been furnished to us, and our opinion insofar as it relates to the amounts included for the City of Monroe ABC Board, is based solely on the report of the other auditors. 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 of material misstatement. The financial statements of the City of Monroe ABC Board and the Monroe Tourism Development Authority were not audited in accordance with Government Auditing Standards. 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. 1 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. Opinions In our opinion, based upon our audit and the report of the other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Monroe, North Carolina, as of June 30, 2019, and the respective changes in financial position and, where applicable, cash flows thereof, and the respective budgetary comparison for the General Fund for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that Management’s Discussion and Analysis, the Law Enforcement Officers’ Special Separation Allowance Schedules of the Changes in Total Pension Liability and Total Pension Liability as a Percentage of Covered Payroll, the Other Post-Employment Benefits' Schedule of Changes in the Total OPEB Liability and Related Ratios, and the Local Government Employee’s Retirement System’s Schedules of the Proportionate Share of the Net Pension Liability (Asset) and Contributions 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 the financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We and the other auditors have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consist 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. 2 Supplementary and Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Monroe’s basic financial statements. The introductory information, combining and individual fund financial statements, budgetary schedules, other schedules, and statistical section, as well as the accompanying Schedule of Expenditures of Federal and State Awards as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirement, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), and the State Single Audit Implementation Act, are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual fund financial statements, budgetary schedules, other schedules, and the Schedule of Expenditures of Federal and State Awards 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 by us and other auditors. In our opinion, based on our audit, the procedures performed as described above, and the report of other auditors, the combining and individual fund financial statements, budgetary schedules, other schedules, and the Schedule of Expenditures of Federal and State Awards are fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory information and the statistical section have not been subjected to the auditing procedures applied in the audit of basic financial statements; and accordingly, we do not express an opinion or provide assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated October 17, 2019 on our consideration of the City of Monroe’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 of Monroe’s internal control over financial reporting or on compliance. That report is an integral part of an audit prepared in accordance with Government Auditing Standards in considering the City of Monroe’s internal control over financial reporting and compliance. Martin Starnes & Associates, CPAs, P.A. Hickory, North Carolina October 17, 2019 3                       4 Management’s Discussion and Analysis As management of the City of Monroe (the City), we offer readers of the City’s financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended June 30, 2019. 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 assets and deferred outflows of resources of the City of Monroe exceeded its liabilities and deferred inflows of resources at the close of the fiscal year by $414,773,839 (net position). Of this amount, $113,041,076 (unrestricted net position) may be used to meet the government’s ongoing obligations to citizens and creditors.  The government’s total net position increased by $31,296,840. This increase was the net of an increase in the amount of $3,308,380 from governmental activities and an increase of $27,988,460 for business-type activities.  As of the close of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $45,121,273, an increase of $9,930,934 in comparison with the prior year. Approximately 45.9 percent of this total amount, or $20,701,147, is non-spendable or restricted by state statute.  At the end of the current fiscal year, unrestricted fund balance (the total of the assigned and unassigned components of fund balance) for the General Fund was $23,712,160, or 68.6 percent, of total General Fund expenditures for the fiscal year.  The City’s total debt not including compensated absences, pension liability, and OPEB liability, net of retirements, increased $2,684,872 (3%) during the current fiscal year. The elements of the increase were the issuance of bonds in the amount of $8,217,063, debt retirements totaling $6,167,191 and new installment financing of $635,000. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to City of Monroe’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 reader’s understanding of the financial condition of the City of Monroe. Required Components of Annual Financial Report Figure 1 Management’s Discussion and Analysis Basic Financial Statements Government-wide Financial Statements Fund Financial Statements Notes to the Financial Statements Summary Detail 5 Basic Financial Statements The first two statements (Exhibits 1 and 2) in the basic financial statements are the Government-wide Financial Statements. They provide both short and long-term information about the City’s financial status. The next statements (Exhibits 3 through 10) 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 General Statutes also can be found in this part of the statements. 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 it has 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 gauge the City’s financial condition. The government-wide statements are divided into three categories: 1) governmental activities; 2) business-type activities; and, 3) component units. The governmental activities include most of the City’s basic services such as public safety, parks and recreation, golf course and general administration. Property taxes and state and federal grant funds finance most of these activities. The business-type activities are those that the City charges customers to provide. These include the water and sewer, electric, natural gas, stormwater maintenance, solid waste collection, aquatics and fitness, and airport services offered by the City of Monroe. The final category is the component units. Although legally separate from the City, the ABC Board and the Tourism Development Authority are important to the City because the City exercises control over both Boards by appointing their members. The component units are also required to distribute a portion of their profits to the City. The government-wide financial statements are on Exhibits 1 and 2 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 Monroe, 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 North Carolina General Statutes or the City’s budget ordinance. All of the funds of City of Monroe can be divided into two categories: Governmental Funds and Proprietary Funds. 6 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. The City of Monroe maintains seven individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund Statement of Revenues, Expenditures, and Changes in Fund Balances for the General Fund which is considered to be a major fund. Data from the other six governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements elsewhere in this report. These other six governmental funds are made up of two capital projects funds, a capital reserve fund and three special revenue funds including Community Development, Downtown Monroe and Monroe-Union County Economic Development. The City of Monroe adopts an annual budget for its General Fund, as required by North Carolina 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 Council 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 shows four columns: 1) the original budget as adopted by the Council; 2) the final budget as amended by the Council; 3) the actual resources, charges to appropriations, and ending balances in the General Fund; and, 4) the difference or variance between the final budget and the actual resources and charges. To account for the difference between the budgetary basis of accounting and the modified accrual basis, a reconciliation showing the differences in the reported activities is shown at the end of the budgetary statement. Proprietary Funds – The City of Monroe maintains two types of proprietary funds: enterprise and internal service. 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, electric, natural gas, aquatics and fitness center, stormwater, sanitation, and airport operations. These funds are the same as those functions shown in the business-type activities in the Statement of Activities. Internal service funds are an accounting tool used to accumulate and allocate costs internally among various functions. The City utilizes an internal service fund for its health, worker’s compensation and property and casualty insurance. Because services accounted for in the internal service fund predominately benefit governmental rather than business-type functions, it 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 36 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 Monroe’s progress in funding 7 its obligation to provide pension benefits to its employees. Required supplementary information can be found beginning on page 98 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 government and other holders of publicly held U.S. Treasury Securities. Government-Wide Financial Analysis The following is a summary of the City’s net position for governmental and business-type activities for the current year as compared to the prior year. For more detail see the Statement of Net Position on page 18-19. City of Monroe’s Net Position Figure 2 Governmental Activities Business-type Activities Total 2019 2018 2019 2018 2019 2018 Current and other assets $54,423,627 $43,252,320 $157,989,452 $153,794,100 $212,413,079 $197,046,420 Capital assets 79,219,602 76,144,900 293,869,838 274,424,738 373,089,440 350,569,638 Total assets 133,643,229 119,397,220 451,859,290 428,218,838 585,502,519 547,616,058 Deferred outflows of resources 5,830,690 3,933,183 6,693,270 6,138,589 12,523,960 10,071,772 Total assets and deferred outflows of resources 139,473,919 123,330,403 458,552,560 434,357,427 598,026,479 557,687,830 Long-term liabilities outstanding 53,911,540 44,025,718 102,227,324 105,633,321 156,138,864 149,659,039 Other liabilities 6,464,554 4,629,200 14,298,910 15,127,892 20,763,464 19,757,092 Total liabilities 60,376,094 48,654,918 116,526,234 120,761,213 176,902,328 169,416,131 Deferred inflows of resources 4,455,191 3,341,231 1,895,121 1,453,469 6,350,312 4,794,700 Total liabilities and deferred inflows of resources 64,831,285 51,996,149 118,421,355 122,214,682 183,252,640 174,210,831 Net position: Net investment in capital assets 71,001,544 69,530,266 214,143,680 200,306,046 285,145,224 269,836,312 Restricted 16,587,539 9,654,497 - - 16,587,539 9,654,497 Unrestricted (12,946,449) (7,850,509) 125,987,525 111,836,699 113,041,076 103,986,190 Total net position $74,642,634 $71,334,254 $340,131,205 $312,142,745 $414,773,839 $383,476,999 The assets and deferred outflows of the City of Monroe exceeded liabilities and deferred inflows by $414,773,839 as of June 30, 2019. Of the City’s total net position $285,145,224 (68.7%) reflects its investment in capital assets (e.g. land, buildings, machinery, and equipment) less any related debt used to acquire those assets that is still outstanding. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City’s investment in its 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 $16,587,539 represents resources that are subject to external restrictions on how they may be used. The remaining balance of $113,041,076 (27.3%) is unrestricted. This amount may be used at the City’s discretion in meeting its ongoing obligations to citizens and creditors. The City’s net position has increased a total of $31,296,840, which consists of an increase in governmental activities in the amount of $3,308,380 and an increase in business-type activities in the amount of $27,988,460.       8 The biggest part of the increase to governmental activities was due to favorable investment earnings this year. The prior year included a mark to market adjustment loss. The business-type activities increase was due to an increase in investment earnings as well as in capital assets. Capital asset changes are outlined later in this report. The following is a summary of the City’s governmental and business-type activities for fiscal year 2019, including revenues and expenses, with a comparison to the prior year. For more detail see the Statement of Activities on page 20-21. City of Monroe’s Changes in Net Position Figure 3 Governmental Activities Business-type Activities Total 2019 2018 2019 2018 2019 2018 Revenues: Program revenues: Charges for services $8,942,541 $8,203,805 $111,519,592 $109,863,311 $120,462,133 $118,067,116 Operating grants and contributions 2,469,613 2,281,335 - - 2,469,613 2,281,335 Capital grants and contributions 112,671 1,279,350 1,432,846 106,812 1,545,517 1,386,162 General revenues: Property taxes, levied for a specific purpose 22,358,697 21,077,587 - - 22,358,697 21,077,587 Sales and use tax 6,653,962 6,215,031 - - 6,653,962 6,215,031 Utility sales taxes 3,118,730 3,077,736 - - 3,118,730 3,077,736 Motor vehicle tax 833,700 842,065 - - 833,700 842,065 Beer & wine and telecommunications tax 443,691 462,733 - - 443,691 462,733 Gross receipts tax 111,505 104,468 - - 111,505 104,468 Other 4,792,969 127,494 8,519,894 (857,474) 13,312,863 (729,980) Total revenues 49,838,079 43,671,604 121,472,332 109,112,649 171,310,411 152,784,253 Expenses: General government $3,460,982 $4,932,525 $ - $ - $3,460,982 $4,932,525 Transportation 4,780,204 5,757,880 - - 4,780,204 5,757,880 Public safety 27,085,904 25,300,345 - - 27,085,904 25,300,345 Culture and recreation 8,743,095 5,153,498 - - 8,743,095 5,153,498 Economic and physical development 1,075,336 1,338,277 - - 1,075,336 1,338,277 Interest in long-term debt 468,627 199,984 - - 468,627 199,984 Water and sewer - - 9,975,342 12,339,410 9,975,342 12,339,410 Electrical - - 58,253,581 60,763,838 58,253,581 60,763,838 Natural Gas - - 14,015,314 14,105,041 14,015,314 14,105,041 Aquatics and Fitness Center - - 4,056,468 4,081,878 4,056,468 4,081,878 Stormwater - - 2,051,772 2,083,956 2,051,772 2,083,956 Solid waste - - 2,349,993 2,348,077 2,349,993 2,348,077 Airport - - 3,696,953 3,705,996 3,696,953 3,705,996 Total expenses 45,614,148 42,682,509 94,399,423 99,428,196 140,013,571 142,110,705 (Decrease) Increase in net position before transfers 4,223,931 989,095 27,072,909 9,684,453 31,296,840 10,673,548 Transfers (915,551) (1,279,079) 915,551 1,279,079 - - (Decrease) Increase in net position 3,308,380 (289,984) 27,988,460 10,963,532 31,296,840 10,673,548 Net position, beginning as previously stated 71,334,254 91,588,015 312,142,745 310,034,679 383,476,999 401,622,694 Restatement - (19,963,777) - (8,855,466) - (28,819,243) Net position, beginning as restated 71,334,254 71,624,238 312,142,745 301,179,213 383,476,999 372,803,451 Net position, ending $74,642,634 $71,334,254 $340,131,205 $312,142,745 $414,773,839 $383,476,999 Governmental activities – Governmental activities increased the City of Monroe’s net position by $3,314,706. Key elements of this net increase are as follows: 9  Property taxes increased by $1,281,110. The total assessed value increased by $41,611,950, or 1.2%, from the prior year. The City’s tax rate increased from 0.5863 to 0.6163. This increase in value and rate increased the property tax levy by $1,261,851 from the prior year.  The decrease of $1,166,679 in Capital Grants and Contributions was due to funds received from a Highway Planning and Construction grant for the Bearskin Creek Greenway, in the prior year. A Community Development Block Grant for improvements to the Concord Avenue area sidewalk is still ongoing.  Public Safety expenses went up due to one-time capital equipment purchases of vehicles and the purchase of a fire apparatus.  Investment earnings increased by $4,034,067 due to a favorable mark to market adjustment at year end. In the prior year, a loss on market value was reported. Business-type activities – Business-type activities increased the City of Monroe’s net position by $27,988,460. Key elements of this net increase are as follows:  Charges for Services increased year over year by $1,656,281 primarily due to the net of the following items:  Water and sewer sales were up by $1,648,240 due to an increase in rainfall during the majority of Fall/Winter 2018 that increased sewer treatment and billings.  Electric sales decreased by $115,216.  Increased natural gas sales in the amount of $212,297.  Availability fees for the Water & Sewer Fund were down by $120,069.  Fuel sales at the Charlotte-Monroe Executive Airport were down by $26,680.  Capital grants and contributions increased by $1,326,034 primarily due to multiple airport grants that had reimbursable expenditures in fiscal year 2019 but not in 2018. The remainder of the increase is due to FEMA grants received to reimburse the City for storm-related damages during Hurricane Florence in the Fall of 2018.  Water and sewer expenses decreased due to a full accrual adjustment for developer donated assets that are capitalized and installed to the City’s water and sewer infrastructure but not an expense of the City. These donated assets become a part of the City’s infrastructure assets and also become the responsibility of the City to maintain.  Electric expenses decreased due to lower power purchases. Financial Analysis of the City’s Funds As noted earlier, the City of Monroe uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental Funds – The focus of the City of Monroe’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. Specifically, unassigned fund balance can be a useful measure of a government’s net resources available for spending at the end of the fiscal year. At June 30, 2019, the governmental funds of the City of Monroe reported a combined fund balance of $45,121,273, which is an increase of $9,930,934 from last year’s total of $35,190,339. Of the governmental funds combined ending fund balances, $8,168,701 represents unassigned fund balance and is available for spending at the City’s discretion. The remainder of fund balance is classified as follows: 1). Non-spendable to indicate that it is not available for spending, as it is not in spendable form ($856,113). 2). Restricted to indicate that it is restricted to specific purposes as imposed by law ($19,845,034); 3). Committed to indicate that it can only be used for a specific purpose as determined by a formal City Council action ($213,242); 4). Assigned to indicate that it is intended to be used for a specific purpose ($16,038,183). 10    0RUHLQIRUPDWLRQDERXWIXQGEDODQFHLVDYDLODEOHLQVHFWLRQ(DQGVHFWLRQ,;LQWKHQRWHVWRWKH ILQDQFLDOVWDWHPHQWV  7KH*HQHUDO)XQGLVWKHFKLHIRSHUDWLQJIXQGRIWKH&LW\RI0RQURH$VRI-XQHWKHIXQG EDODQFHLQWKH*HQHUDO)XQGZDVDQLQFUHDVHRILQFRPSDULVRQZLWKWKHSULRU \HDU2IWKHWRWDOIXQGEDODQFHLQWKH*HQHUDO)XQG  ZDVXQDVVLJQHGIXQGEDODQFH $VDPHDVXUHRIWKH*HQHUDO)XQG¶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±7KH&LW\RI0RQURH¶VSURSULHWDU\IXQGVSURYLGHWKHVDPHW\SHRILQIRUPDWLRQIRXQG LQWKHJRYHUQPHQWZLGHVWDWHPHQWVEXWLQPRUHGHWDLO7KHWDEOHEHORZSUHVHQWVWKHXQUHVWULFWHGQHW SRVLWLRQDQGWKHJURZWKLQWRWDOQHWSRVLWLRQIRUDOOSURSULHWDU\IXQGV  &LW\RI0RQURH¶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¶VPDMRU SURSULHWDU\IXQGVDUHZDWHUDQGVHZHUHOHFWULFQDWXUDOJDVDQGDLUSRUW0LQRUSURSULHWDU\IXQGVLQFOXGH $TXDWLFVDQG)LWQHVV&HQWHU6WRUPZDWHUDQG6ROLG:DVWH)XQGV  7KH:DWHUDQG6HZHU)XQGDFFRXQWVIRUWKHSURYLVLRQRISRWDEOHZDWHUDQGVHZHUVHUYLFHWR&LW\DQG QRQ&LW\UHVLGHQWV$OODFWLYLWLHVQHFHVVDU\WRWKHSURYLVLRQRIWKHVHVHUYLFHVDUHDFFRXQWHGIRULQWKLV IXQGLQFOXGLQJEXWQRWOLPLWHGWRDGPLQLVWUDWLRQSODQWDQGOLQHPDLQWHQDQFH$VRI-XQHWKH &LW\RI0RQURH¶V:DWHU)XQGUHSRUWHGDWRWDOQHWSRVLWLRQRIDQLQFUHDVHRILQ FRPSDULVRQZLWKWKHSULRU\HDU7RWDORSHUDWLQJUHYHQXHVLQFUHDVHGE\PDLQO\GXHWRDQLQFUHDVHLQ FKDUJHVIRUVHUYLFHVUHYHQXHEHFDXVHRIH[FHVVUDLQIDOOLQWKHILUVWKDOIRIWKH\HDUFDXVLQJLQFUHDVHGVHZHU 11 revenues. The City has planned to increase unrestricted net position in the Water and Sewer Fund by increasing water and sewer rates 3.2% each year. Through uniform annual rate increases, unrestricted net position will be grown to create enough reserves to fund 40% of a new wastewater treatment plant facility. This new facility will replace our aging facility and ensure adequate capacity for future development in approximately 2030. The remaining 60% of funding for the project will be provided through financing at that time. The Electric Fund accounts for the provision of electric service to City and non-City residents. All activities necessary to the provision of these services are accounted for in this fund, including, but not limited to administration, plant and line maintenance. As of June 30, 2019, the City of Monroe’s Electric Fund reported a total net position of $131,062,382 an increase of $8,714,122 in comparison with the prior year. Electric non-operating revenues increased by 3,590,558 since last fiscal year. This increase can be attributed to an increase in investment earnings due to a positive change in the mark to market adjustment for investments at year end. Overall operating income increased due to a decrease in the amount of power purchases for the year related to mild seasons compared to the prior year. The Natural Gas Fund accounts for the provision of natural gas service to City and non-City residents. All activities necessary to the provision of these services are accounted for in this fund, including, but not limited to administration, plant and line maintenance. As of June 30, 2019, the City of Monroe’s Natural Gas Fund reported total net position of $63,103,984, an increase of $6,241,727 in comparison with the prior year. Natural gas operating revenues were up by 1.2% from prior year. The gross profit for the Natural Gas Fund was up 4.8% from fiscal year 2018. The Airport Fund accounts for the operation of the Charlotte-Monroe Executive Airport. As of June 30, 2019, the City of Monroe’s Airport Fund reported a total net position of $28,564,864, an increase of $806,242 in comparison with the prior year. Fuel sales for the airport have decreased 1% over the prior year, but the gross profit for fuel sales has increased by 14.5%. The main reason for the increase in net position is due to airport grant reimbursements of $800,437 being received in the current year compared to the prior year. General Fund Budgetary Highlights During the fiscal year, the City of Monroe revised the budget on several occasions. Generally, budget amendments are either amendments made to adjust the estimates that are used to prepare the original budget ordinance once updated information is available or amendments made to recognize new funding amounts from external sources, such as federal and State grants. Total amendments to the General Fund increased expenditures by $3,381,131, or 8.9%. The key differences between the original budget and the final amended budget can be briefly summarized as follows:  Funds were appropriated for prior year encumbrances in the amount of $2,505,709 and unspent appropriations (various grants, police equitable sharing, and outside agencies), $601,822.  General Government funds were appropriated to install an emergency signal at Fire Station #4 in the amount of $180,000.  Funding was appropriated for an incentive loan for the Buggy Factory in the amount of $400,000. Revenues exceeded final budget by $3,837,774. This was primarily due to the higher than expected investment earnings which were $2,567,241. Ad valorem taxes were higher than budgeted due to both an increase in assessed value and increased collection rate. Also, higher than anticipated electric sales tax and local option sales tax distributions were received. Expenditures were under budget by $6,594,121. Expenses were down due to savings realized from vacant positions and turnover totaling approximately $906,829, capital purchases $1,639,386 and $3,000,801 in other operating accounts. Expenditures were 84.0% of the final amended expenditure 12 budget. $2,598,085 was carried over to fiscal year 2020 for items that were not complete at fiscal year- end. Capital Assets The following is a summary of the City of Monroe’s capital assets, net of depreciation for governmental and business-type activities for the current year with a comparison to the prior year. Additional information on the City of Monroe’s capital assets can be found in Note III.A.5 on pages 56 - 62 of this report. City of Monroe’s Capital Assets (Net of Depreciation) Figure 5 Governmental Activities Business-type Activities Total 2019 2018 2019 2018 2019 2018 Land and land improvements $5,698,638 $5,543,726 $24,379,657 $19,600,450 $30,078,295 $25,144,176 Buildings and improvements 16,986,080 17,131,824 52,275,033 54,137,721 69,261,113 71,268,545 Equipment 1,488,017 1,490,116 5,391,119 4,189,724 6,879,136 5,679,840 Vehicles and motorized equipment 6,187,420 6,174,447 2,570,116 2,639,661 8,757,536 8,814,108 Other intangibles 201,022 283,985 27,325 75,051 228,347 359,036 Infrastructure 42,189,491 44,025,314 187,398,293 177,371,297 229,587,784 221,396,611 Construction in progress 6,468,934 1,495,488 21,828,295 16,410,834 28,297,228 17,906,322 Total $79,219,602 $76,144,900 $293,869,838 $274,424,738 $373,089,440 $350,569,638 The City of Monroe’s investment in capital assets for its governmental and business-type activities as of June 30, 2019, totals $373,089,440 (net of accumulated depreciation). These assets include buildings, roads and bridges, land, enterprise systems infrastructure, machinery and equipment, park facilities, and vehicles. The total increase in the City’s investment in capital assets for the current fiscal year was $22,519,802. Major capital asset events during the year included the following:  Land purchase for Industrial Park #3  Replacement of the generator at the Wastewater Treatment Plant  Water main on Poplin Road and Charlotte Avenue (Engleside to Walnut)  Developer installed water mains and sewer lines at Stratford, UC Community Shelter, Food Lion, and Woodlands Creek  Electric infrastructure improvements and new service at the ATI Specialty Materials Facility  Natural gas infrastructure improvements including system reinforcement and system expansion Construction in progress totaling $28,297,228 has increased overall from last year by $10,390,906. The amount is the net of the completion of projects totaling $5,648,593 and new projects that were added totaling $16,039,500. Projects included in this amount are as follows:  General – Center Theatre renovation, 5 points gateway improvements, Senior Center renovation and new Police Department headquarters  Occupancy Tax Capital Project – Monroe Science Center  Water – John Glen water treatment plant improvements  Stormwater - Pinedell Road culvert replacement and Quail & Oakhill Drive improvements  Electric –Replacement of Downtown vault switches  Natural Gas – construction of the Liquefied Natural Gas Peak Shaving Facility  Airport – construction of the corporate aircraft hangar, the corporate community hangar and replacement of the runway 5 approach lights 13 Debt Administration The following is a summary of the City’s long-term debt for governmental and business-type activity for the current year with a comparison to the prior year. Additional information on long-term debt can be found in note III.B.8 beginning on page 82 of this report. City of Monroe’s Outstanding Debt Figure 6 Governmental Activities Business-type Activities Total 2019 2018 2019 2018 2019 2018 Install purchase obligations $6,818,147 $7,348,694 $413,000 $509,000 $7,231,147 $7,857,694 Revenue bonds - - 45,324,190 48,552,787 45,324,190 48,552,787 State revolving loans - - 7,216,549 7,697,652 7,216,549 7,697,652 Certificates of participation - - - 780,000 - 780,000 Limited Obligation Bonds 8,196,488 - 37,767,623 38,162,992 45,964,111 38,162,992 Total $15,014,635 $7,348,694 $90,721,362 $95,702,431 $105,735,997 $103,051,125 As of June 30, 2019, the City of Monroe had total debt outstanding of $105,735,997. During the fiscal year, the City issued an installment financing to finance a fire truck in the amount of $635,000. The City’s bonded debt, $45,324,190, represents bonds secured by the combined revenues of the major business-type funds which include water and sewer, electric, natural gas, and airport. Limited Obligation Bonds totaling $45,964,111 represent bonds that were issued for improvements to the natural gas system and new debt that was issued this past year for $8,217,063. The new debt was used to fund the construction of the Monroe Science Center and Center Theatre. City’s total debt, net of retirements, increased $2,684,872 during the fiscal year. The elements of the increase were the issuance of bonds in the total amount of $8,217,063. Also included were other debt retirements totaling $6,167,191 and new installment financing of $635,000. The City of Monroe has an A1 bond rating from Moody’s Investor Service and A+ rating from Standard & Poor’s Rating Services for the Combined Enterprise Fund Revenue Bonds. The City also has an Aa3 rating from Moody’s Investor Service and AA rating from Standard and Poor’s Rating Services for the Limited Obligation Bonds. These ratings are indications of the sound financial condition and stable outlook of the City of Monroe. North Carolina General Statutes limit the amount of general obligation debt that a unit of government can issue to eight percent of the total assessed value of taxable property located within that government’s boundaries. The legal debt margin for the City of Monroe is $236,692,002. Economic Factors and Next Year’s Budgets and Rates The following key economic indicators reflect the growth and prosperity of the City.  The annual unemployment rate for City of Monroe is 4.5%, which is an increase of 0.3% from last year. This rate is slightly higher than Union County’s rate of 3.9% and the State’s average rate of 4.2%.  The total tax levy increased 1.6% from fiscal year 2018 to fiscal year 2019 along with the tax collection rate by 0.12%.  Population increased 0.8% from 35,034 in 2018 to 35,330 in 2019. Governmental Activities – The City maintained a property tax rate of .6163 for fiscal year 2020. The economic conditions that form the foundation of the City’s revenues for the upcoming year indicate some improvement in property tax, sales tax and other consumer-oriented revenues. Positive economic conditions continue and the City’s revenues for the upcoming year will increase from the prior year. City of Monroe’s fiscal year 2020 operating budget (excluding capital projects) increased by approximately 8.5% with General and Governmental Funds increasing by 8.5% and business-type funds increasing by 0.3% over their current year budgets. 14 The City takes great pride and shows its commitment to revitalization in the downtown area with continuation of four previously approved projects as follows: 1. Center Theatre - The City purchased the Center Theatre in 2013 and the adjacent units in 2015. The Center Theatre renovation is currently under construction. The FY 2020 budget includes funding for the grand opening which is expected in early 2020. 2. Senior Center – The City purchased the Enquirer Journal Newspaper building in 2016 and plans to renovate this facility to serve as a new Senior Center. The current Senior Center facility is too small for the demand on the facility and adequate parking has created challenges. The new facility has been designed and will provide the same services and plenty of parking. Construction bids are expected to be solicited in January 2020. 3. Science Center – The City purchased a building that used to be a grocery store near the Union County Public Library on Franklin Street with the intention of converting the facility into a Science Center. The renovation is currently under construction. The FY 2020 budget includes funding for the grand opening estimated to be in early 2020. The purchase of the building and all project costs will be paid from Occupancy Tax Revenue. 4. Police Headquarters - The current police headquarters is located in a building that was built in 1987. The building was originally utilized by the Union County Department of Social Services until it was purchased by the City in 2001. This building has housed fire station administrative offices and the police department since then but is functionally obsolete and lacking space to adequately serve the public. The new police headquarters will provide much needed space for staff and evidence storage as well as being a secure facility. It will be located on the Scott Aviation property across the street from City Hall. Project construction will be bid in January 2020. The City is enthusiastically pursuing all avenues to beautify our community. Beautification plans provided in this Budget include funding for the purchase of the eighth segment of U.S. 74 tree and flower plantings. Funding for three phases of the Wayfinding sign construction was provided. Revitalization projects in the Winchester Neighborhood and the Concord Avenue redevelopment area have been partially funded. Funding was also included for painting, paving improvements and fencing replacement at various recreation facilities. Improving existing facilities is priority and the proposed FY 2020 Budget continues to address many deferred maintenance issues. The replacement of the Dickerson Gym roof, resurfacing of the streets in Hillcrest Cemetery, a new pump station for golf course irrigation and bunker/tee box renovations at the golf course are included in the proposed Budget. The budget preserves over $8 million of unassigned fund balance for the future capital needs of the City. Business-type Activities – Water and sewer rates were increased by 3.2% each to plan for the significant anticipated cost of future capital projects and necessary system improvements. Solid Waste rates increased $0.85 per month for residential customers to offset increased contract costs with the City’s provider. Electric, natural gas and stormwater rates remained the same. With the extensive planning within our water, sewer, electric and natural gas services, Monroe stands alone in Union County to meet any and all residential and industrial development needs. Being ready and able to meet these needs puts Monroe in an excellent position to continue to grow our City. Several projects including water and wastewater treatment plant improvements, a liquefied natural gas peak shaving facility and two new airplane storage hangars are currently under construction. 15 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 Finance Director at the City of Monroe, 300 West Crowell Street, Monroe, North Carolina, 28112, visit the City’s website at www.monroenc.org., or email accounting@monroenc.org for more information. 16 Basic Financial Statements The Basic Financial Statements provide a summary overview of the financial position of the governmental activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information at June 30, and the respective changes in financial position and cash flows, where appropriate for the year then ended.  Government-Wide Financial Statements  Fund Financial Statements Governmental Fund Financial Statements Proprietary Fund Financial Statements  Notes to Financial Statements  Required Supplemental Information 17 Exhibit 1 Page 1 of 2 CITY OF MONROE, NORTH CAROLINA STATEMENT OF NET POSITION JUNE 30, 2019 Monroe City of Tourism Governmental Business-Type Monroe Development Activities Activities Total ABC Board Authority Assets: Current assets: Cash and cash equivalents 39,818,383$ 131,447,145$ 171,265,528$ 793,992$ 755,572$ Taxes receivable 637,202 - 637,202 - - Accounts receivable 1,024,178 13,835,432 14,859,610 - 53,939 Note receivable - short-term 57,046 - 57,046 - - Internal balances - short-term (105,343) 105,343 - - - Due from other governments 3,778,681 - 3,778,681 - - Due from component units 47,245 - 47,245 - - Inventories 199,218 4,098,813 4,298,031 236,828 2,549 Prepaids 818,474 31,299 849,773 26,082 11,503 Cash and cash equivalents - restricted 8,457,068 7,223,550 15,680,618 - - Total current assets 54,732,152 156,741,582 211,473,734 1,056,902 823,563 Non-current assets: Note receivable 939,345 - 939,345 - - Internal balances - long term (1,247,870) 1,247,870 - - - Capital assets: Land, non-depreciable improvements, and construction in progress 12,167,572 46,207,952 58,375,524 317,013 - Other capital assets, net of depreciation 67,052,030 247,661,886 314,713,916 554,071 - Total capital assets 79,219,602 293,869,838 373,089,440 871,084 - Total non-current assets 78,911,077 295,117,708 374,028,785 871,084 - Total assets 133,643,229 451,859,290 585,502,519 1,927,986 823,563 Deferred Outflows of Resources: OPEB deferrals 405,545 179,823 585,368 - - Pension deferrals 5,425,145 2,213,235 7,638,380 90,774 - Charge on debt defeasance - 4,300,212 4,300,212 - - Total deferred outflows of resources 5,830,690 6,693,270 12,523,960 90,774 - Liabilities: Current liabilities: Accounts payable and accrued liabilities 2,920,067 8,697,130 11,617,197 382,698 10,013 Due to primary government - - - 29,266 17,979 Current portion of long-term liabilities 3,098,949 5,040,150 8,139,099 - - Unearned revenue 2,236 33,072 35,308 - - Payable from restricted assets 23,195 528,558 551,753 - - Property claims liability 6,346 - 6,346 - - Workers' compensation claims 4,637 - 4,637 - - Healthcare benefits claims 409,124 - 409,124 - - Total current liabilities 6,464,554 14,298,910 20,763,464 411,964 27,992 Non-current liabilities: Net pension liability 6,356,654 2,816,008 9,172,662 108,179 - Total pension liability (LEOSSA)4,156,173 - 4,156,173 - - Total OPEB liability 28,888,971 12,809,891 41,698,862 - - Due in more than one year 14,509,742 86,601,425 101,111,167 - - Total non-current liabilities 53,911,540 102,227,324 156,138,864 108,179 - Total liabilities 60,376,094 116,526,234 176,902,328 520,143 27,992 Component UnitsPrimary Government The notes to the financial statements are an integral part of this statement. 18 Exhibit 1 Page 2 of 2 CITY OF MONROE, NORTH CAROLINA STATEMENT OF NET POSITION JUNE 30, 2019 Monroe City of Tourism Governmental Business-Type Monroe Development Activities Activities Total ABC Board Authority Component UnitsPrimary Government Deferred Inflows of Resources: OPEB deferrals 4,113,464 1,823,986 5,937,450 - - Pension deferrals 329,805 71,135 400,940 3,853 - Other deferred inflows 11,922 - 11,922 - - Total deferred inflows of resources 4,455,191 1,895,121 6,350,312 3,853 - Net Position: Net investment in capital assets 71,001,544 214,143,680 285,145,224 871,084 - Restricted for: Stabilization by state statute 12,911,281 - 12,911,281 - 53,939 Public safety 707,074 - 707,074 - - Transportation 1,641,615 - 1,641,615 - - Occupancy tax capital projects 985,639 - 985,639 - - Economic development 341,930 - 341,930 149,539 - Tourism promotion - - - - 727,580 Unrestricted (12,946,449) 125,987,525 113,041,076 474,141 14,052 Total net position 74,642,634$ 340,131,205$ 414,773,839$ 1,494,764$ 795,571$ The notes to the financial statements are an integral part of this statement. 19 Exhibit 2 Page 1 of 2 CITY OF MONROE, NORTH CAROLINA STATEMENT OF ACTIVITIES Operating Capital Charges Grants and Grants and Functions/Programs Expenses for Services Contributions Contributions Primary Government: Governmental Activities: General government 3,460,982$ 2,296,748$ -$ -$ Transportation 4,780,204 370,869 957,118 102,671 Public safety 27,085,904 4,488,439 894,194 - Culture and recreation 8,743,095 1,786,485 206,301 - Economic and physical development 1,075,336 - 412,000 10,000 Interest on long-term debt 468,627 - - - Total governmental activities 45,614,148 8,942,541 2,469,613 112,671 Business-Type Activities: Water and sewer 9,975,342 18,671,135 - 126,680 Electric 58,253,581 63,757,113 - 346,474 Natural gas 14,015,314 18,323,169 - 68,096 Aquatics and Fitness Center 4,056,468 4,089,476 - - Stormwater 2,051,772 2,332,613 - 507 Solid waste 2,349,993 2,434,484 - - Airport 3,696,953 1,911,602 - 891,089 Total business-type activities 94,399,423 111,519,592 - 1,432,846 Total primary government 140,013,571$ 120,462,133$ 2,469,613$ 1,545,517$ Component Units: ABC Board 1,263,376$ 1,257,589$ -$ -$ Tourism Development Authority 463,646 - 618,903 - Total component units 1,727,022$ 1,257,589$ 618,903$ -$ FOR THE YEAR ENDED JUNE 30, 2019 Program Revenues The notes to the financial statements are an integral part of this statement. 20 Exhibit 2 Page 2 of 2 CITY OF MONROE, NORTH CAROLINA STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2019 Monroe City of Tourism Governmental Business-Type Monroe Development Functions/Programs Activities Activities Total ABC Board Authority Primary Government: Governmental Activities: General government (1,164,234)$ -$ (1,164,234)$ -$ -$ Transportation (3,349,546) - (3,349,546) - - Public safety (21,703,271) - (21,703,271) - - Culture and recreation (6,750,309) - (6,750,309) - - Economic and physical development (653,336) - (653,336) - - Interest on long-term debt (468,627) - (468,627) - - Total governmental activities (34,089,323) - (34,089,323) - - Business-Type Activities: Water and sewer - 8,822,473 8,822,473 - - Electric - 5,850,006 5,850,006 - - Natural gas - 4,375,951 4,375,951 - - Aquatics and Fitness Center - 33,008 33,008 - - Stormwater - 281,348 281,348 - - Solid waste - 84,491 84,491 - - Airport - (894,262) (894,262) - - Total business-type activities - 18,553,015 18,553,015 - - Total primary government (34,089,323) 18,553,015 (15,536,308) - - Component Units: ABC Board (5,787) - Tourism Development Authority - 155,257 Total component units (5,787) 155,257 General Revenues: Taxes: Property taxes, levied for general purpose 22,358,697 - 22,358,697 - - Sales and use tax 6,653,962 - 6,653,962 - - Utility sales taxes 3,118,730 - 3,118,730 - - Motor vehicle tax 833,700 - 833,700 - - Beer & wine and telecommunications taxes 443,691 - 443,691 - - Gross receipts tax 111,505 - 111,505 - - Unrestricted investment earnings (loss)3,417,845 8,002,707 11,420,552 5,887 18,146 Interest earnings on interfund loans - 68,347 68,347 - - Miscellaneous 1,375,124 448,840 1,823,964 - 6,696 Total general revenues 38,313,254 8,519,894 46,833,148 5,887 24,842 Transfers (915,551) 915,551 - - - Total general revenues and transfers 37,397,703 9,435,445 46,833,148 5,887 24,842 Change in net position 3,308,380 27,988,460 31,296,840 100 180,099 Net Position: Beginning of year, July 1 71,334,254 312,142,745 383,476,999 1,494,664 615,472 End of year, June 30 74,642,634$ 340,131,205$ 414,773,839$ 1,494,764$ 795,571$ Primary Government Component Units Net (Expense) Revenue and Changes in Net Position The notes to the financial statements are an integral part of this statement. 21 Exhibit 3 CITY OF MONROE, NORTH CAROLINA BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2019 Nonmajor Total Governmental Governmental General Funds Funds Assets: Cash and cash equivalents 29,858,180$ 6,153,206$ 36,011,386$ Receivables: Taxes 634,946 2,256 637,202 Accounts 449,763 27,633 477,396 Due from other governments 3,766,628 12,053 3,778,681 Due from component unit 29,266 17,979 47,245 Inventories 199,218 - 199,218 Prepaids 656,895 - 656,895 Cash and cash equivalents - restricted 1,800,869 6,637,322 8,438,191 Total assets 37,395,765$ 12,850,449$ 50,246,214$ Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable and accrued liabilities 1,745,924$ 1,174,143$ 2,920,067$ Accounts payable to be paid from restricted assets 4,318 - 4,318 Prepaid privilege license 2,236 - 2,236 Advances from other funds 1,247,870 - 1,247,870 Total liabilities 3,000,348 1,174,143 4,174,491 Deferred Inflows of Resources 948,194 2,256 950,450 Fund Balances: Non-spendable: Inventories 199,218 - 199,218 Prepaids 656,895 - 656,895 Restricted: Stabilization by state statute 6,450,041 6,461,240 12,911,281 Public safety 707,074 - 707,074 Transportation 1,641,615 - 1,641,615 Culture and recreation 80,220 3,177,275 3,257,495 Occupancy tax capital projects - 985,639 985,639 Economic development - 341,930 341,930 Committed: Culture and recreation - 213,242 213,242 Assigned: Minimum fund balance requirement 10,681,100 - 10,681,100 Airport grant acceptance 456,815 - 456,815 Airport operations - 5-year subsidy 750,000 - 750,000 Street resurfacing - 5-year program 900,000 - 900,000 Subsequent year's expenditures 2,755,544 - 2,755,544 Community Development - 56,562 56,562 Downtown Monroe - 438,162 438,162 Unassigned 8,168,701 - 8,168,701 Total fund balances 33,447,223 11,674,050 45,121,273 Total liabilities, deferred inflows of resources, and fund balances 37,395,765$ 12,850,449$ 50,246,214$ The notes to the financial statements are an integral part of this statement. 22 Exhibit 4 CITY OF MONROE, NORTH CAROLINA RECONCILIATION OF GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION JUNE 30, 2019 Total Governmental Funds Amounts reported for governmental activities in the Statements of Net Position are different because: Fund balances - total governmental funds (Exhibit 3)45,121,273$ Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. Gross capital assets at historical cost 160,015,258$ Accumulated depreciation (80,795,656) 79,219,602 Total pension liability (LEOSSA)(4,156,173) Note receivable from outside party 996,391 Net pension liability - LGERS (6,356,654) Deferred outflows of resources related to OPEB are not reported in the funds.405,545 Deferred outflows of resources related to pensions are not reported in the funds.5,425,145 Deferred inflows of resources related to OPEB are not reported in the funds.(4,113,464) Deferred inflows of resources related to pensions are not reported in the funds.(329,805) Internal service funds are used by management to charge the costs of health and dental insurance to individual funds. The current assets and liabilities of the Internal Service Fund are included in governmental activities in the Statement of Net Position.2,123,269 Internal service funds are used by management to charge the costs of workers' compensation to individual funds. The current assets and liabilities of the Internal Service Fund are included in governmental activities in the Statement of Net Position.1,084,432 Internal service funds are used by management to charge the costs of property and liability insurance to individual funds. The current assets and liabilities of the Internal Service Fund are included in governmental activities in the Statement of Net Position.887,550 Internal balance due from business-type activities to governmental activities (105,343) Liabilities for earned, but unavailable, revenues in fund statements 938,528 Total OPEB liability (28,888,971) Long-term liabilities are not due and payable in the current period and, therefore, are not reported in the funds (Note II.A.).(17,608,691) Net position of governmental activities (Exhibit 1)74,642,634$ The notes to the financial statements are an integral part of this statement. 23 Exhibit 5 Nonmajor Total Governmental Governmental General Funds Funds Revenues: Ad valorem taxes 22,394,155$ 57,037$ 22,451,192$ Other taxes and licenses 947,522 - 947,522 Unrestricted intergovernmental 10,433,305 - 10,433,305 Restricted intergovernmental 1,839,978 730,972 2,570,950 Sales and services 2,528,712 - 2,528,712 Investment earnings 3,018,594 217,807 3,236,401 Donation - 10,000 10,000 Miscellaneous 1,057,760 102,315 1,160,075 Total revenues 42,220,026 1,118,131 43,338,157 Expenditures: Current: General government 4,068,352 - 4,068,352 Transportation 2,963,941 - 2,963,941 Public safety 20,714,819 - 20,714,819 Culture and recreation 5,181,636 - 5,181,636 Economic and physical development - 2,510,127 2,510,127 Capital outlay - 4,250,110 4,250,110 Debt service: Principal retirement 1,165,548 - 1,165,548 Interest and other charges 489,202 - 489,202 Total expenditures 34,583,498 6,760,237 41,343,735 Revenues over (under) expenditures 7,636,528 (5,642,106) 1,994,422 Other Financing Sources (Uses): Transfers from other funds 936,296 2,667,206 3,603,502 Transfers to other funds (4,436,788) (82,265) (4,519,053) Premium from limited obligation bonds issued - 432,063 432,063 Limited obligation bonds issued 113,171 7,671,829 7,785,000 Installment purchase obligations issued 635,000 - 635,000 Total other financing sources (uses)(2,752,321) 10,688,833 7,936,512 Net change in fund balances 4,884,207 5,046,727 9,930,934 Fund Balances: Beginning of year, July 1 28,563,016 6,627,323 35,190,339 End of year, June 30 33,447,223$ 11,674,050$ 45,121,273$ STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS CITY OF MONROE, NORTH CAROLINA FOR THE YEAR ENDED JUNE 30, 2019 The notes to the financial statements are an integral part of this statement. 24 Exhibit 6 CITY OF MONROE, NORTH CAROLINA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2019 Amounts reported for governmental activities in the Statement of Activities are different because: Net change in fund balances - total governmental funds (Exhibit 5)9,930,934$ 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 (Note III.B.). 3,074,702 Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds. Change in other deferred inflows (187,994) 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 has any effect on net position in the government-wide statements. Also, governmental funds report the effect of issuance costs, premiums, discounts, and similar items when debt is first issued; whereas, these amounts are deferred and amortized in the Statement of Activities. This amount is the net effect of these differences in the treatment of long-term debt and related items (Note III.B.).(7,665,940) 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. Pension expense- LGERS (178,173) Pension expense- LEOSSA (145,002) Compensated absences (238,842) OPEB plan expense (1,223,502) (1,785,519) The Internal Service Fund, determined to be governmental fund type, is used by management to charge the costs, net of investment earnings.(57,803) Change in net position of governmental activities (Exhibit 2)3,308,380$ The notes to the financial statements are an integral part of this statement. 25                       26 Exhibit 7 CITY OF MONROE, NORTH CAROLINA GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2019 Variance Original Final Actual Over/Under Revenues: Ad valorem taxes 21,996,955$ 21,996,955$ 22,394,155$ 397,200$ Other taxes and licenses 927,555 927,555 947,522 19,967 Unrestricted intergovernmental 9,771,090 9,771,090 10,433,305 662,215 Restricted intergovernmental 1,527,711 2,010,299 1,839,978 (170,321) Sales and services 2,174,951 2,178,562 2,528,712 350,150 Investment earnings 477,000 477,000 3,018,594 2,541,594 Miscellaneous 317,212 1,020,791 1,057,760 36,969 Total revenues 37,192,474 38,382,252 42,220,026 3,837,774 Expenditures: Current: General government 5,050,771 5,559,060 4,068,352 1,490,708 Transportation 3,705,845 3,904,293 2,963,941 940,352 Public safety 21,620,659 23,415,495 20,714,819 2,700,676 Culture and recreation 5,358,414 6,123,172 5,181,636 941,536 Debt service: Principal retirement 1,639,189 1,552,702 1,165,548 387,154 Interest and other charges 421,610 622,897 489,202 133,695 Total expenditures 37,796,488 41,177,619 34,583,498 6,594,121 Revenues over (under) expenditures (604,014) (2,795,367) 7,636,528 10,431,895 Other Financing Sources (Uses): Transfers from other funds 762,265 913,551 936,296 22,745 Transfers to other funds (3,874,130) (4,613,351) (4,436,788) 176,563 Limited obligation bonds issued - 114,800 113,171 (1,629) Installment purchase obligations issued 625,000 625,000 635,000 10,000 Total other financing sources (uses)(2,486,865) (2,960,000) (2,752,321) 207,679 Appropriated fund balance 3,090,879 5,755,367 - (5,755,367) Net change in fund balance -$ -$ 4,884,207 4,884,207$ Fund Balance: Beginning of year, July 1 28,563,016 End of year, June 30 33,447,223$ Budgeted Amounts The notes to the financial statements are an integral part of this statement. 27 Exhibit 8 Page 1 of 2 CITY OF MONROE, NORTH CAROLINA STATEMENT OF NET POSITION PROPRIETARY FUNDS Water and Sewer Electric Natural Gas Airport Assets: Current assets: Cash and cash equivalents 39,064,951$ 51,534,815$ 32,224,570$ 2,279,377$ Accounts receivable 2,869,845 9,141,282 1,050,868 190,779 Prepaid expenses 5,225 17,265 4,154 2,314 Inventories 290,553 3,440,278 326,963 35,383 Cash and cash equivalents, restricted 2,741,458 - 2,043,091 1,910,443 Total current assets 44,972,032 64,133,640 35,649,646 4,418,296 Non-current assets: Restricted assets: Customer deposits 74,680 309,546 144,332 - Advance to other funds - 2,051,647 - - Capital assets: Land and other non-depreciable assets 12,961,310 7,562,906 10,080,436 14,377,222 Other capital assets, net of depreciation 80,398,320 80,906,538 57,344,129 22,296,436 Capital assets (net)93,359,630 88,469,444 67,424,565 36,673,658 Total non-current assets 93,434,310 90,830,637 67,568,897 36,673,658 Total assets 138,406,342 154,964,277 103,218,543 41,091,954 Deferred Outflows of Resources: OPEB deferrals 75,630 33,015 16,742 13,990 Pension deferrals 929,991 403,716 209,067 173,021 Charge on debt defeasance 239,140 710,662 3,265,800 84,610 Total deferred outflows of resources 1,244,761 1,147,393 3,491,609 271,621 Liabilities: Current liabilities: Accounts payable and accrued liabilities 1,254,875 4,977,454 1,210,799 897,182 Unearned revenue - - - - Compensated absences 210,122 191,047 87,733 20,683 Advance from other funds - - - 803,777 Installment purchase obligations - - - - Revenue bonds payable 790,826 910,069 152,053 775,187 Limited obligation bonds payable - - 1,215,369 - State revolving loans payable 481,103 - - - Total current liabilities 2,736,926 6,078,570 2,665,954 2,496,829 Liabilities payable from restricted assets: Customer deposits 74,680 309,546 144,332 - Non-current liabilities: Net pension liability 1,183,274 513,669 266,008 220,143 Compensated absences 103,493 94,098 43,212 10,188 Installment purchase obligations - - - - Revenue bonds payable - net unamortized premium 15,849,543 15,353,740 2,565,291 8,927,481 Limited obligation bonds payable - - 36,552,254 - State revolving loans payable 6,735,446 - - - Total other post-employment benefits liability 5,387,493 2,351,816 1,192,588 996,603 Total non-current liabilities 29,333,929 18,622,869 40,763,685 10,154,415 Total liabilities 32,070,855 24,701,439 43,429,639 12,651,244 Deferred Inflows of Resources: OPEB deferrals 767,119 334,873 169,811 141,905 Pension deferrals 29,890 12,976 6,718 5,562 Total deferred inflows of resources 797,009 347,849 176,529 147,467 Net Position: Net investment in capital assets 72,483,310 72,916,297 32,248,489 28,966,043 Unrestricted 34,299,929 58,146,085 30,855,495 (401,179) Total net position 106,783,239$ 131,062,382$ 63,103,984$ 28,564,864$ Major Enterprise Funds JUNE 30, 2019 The notes to the financial statements are an integral part of this statement. 28 Exhibit 8 Page 2 of 2 CITY OF MONROE, NORTH CAROLINA STATEMENT OF NET POSITION PROPRIETARY FUNDS JUNE 30, 2019 Governmental Activities Nonmajor Internal Enterprise Service Funds Total Funds Assets: Current assets: Cash and cash equivalents 6,343,432$ 131,447,145$ 3,806,997$ Accounts receivable 582,658 13,835,432 546,782 Prepaid expenses 2,341 31,299 161,579 Inventories 5,636 4,098,813 - Cash and cash equivalents, restricted - 6,694,992 - Total current assets 6,934,067 156,107,681 4,515,358 Non-current assets: Restricted assets: Customer deposits - 528,558 18,877 Advance to other funds - 2,051,647 - Capital assets: Land and other non-depreciable assets 1,226,078 46,207,952 - Other capital assets, net of depreciation 6,716,463 247,661,886 - Capital assets (net)7,942,541 293,869,838 - Total non-current assets 7,942,541 296,450,043 18,877 Total assets 14,876,608 452,557,724 4,534,235 Deferred Outflows of Resources; OPEB deferrals 40,446 179,823 - Pension deferrals 497,440 2,213,235 - Charge on debt defeasance - 4,300,212 - Total deferred outflows of resources 537,886 6,693,270 - Liabilities: Current liabilities: Accounts payable and accrued liabilities 356,820 8,697,130 420,107 Unearned revenue 33,072 33,072 - Compensated absences 106,958 616,543 - Advance from other funds - 803,777 - Installment purchase obligations 99,000 99,000 - Revenue bonds payable - 2,628,135 - Limited obligation bonds payable - 1,215,369 - State revolving loans payable - 481,103 - Total current liabilities 595,850 14,574,129 420,107 Liabilities payable from restricted assets: Customer deposits - 528,558 18,877 Non-current liabilities: Net pension liability 632,914 2,816,008 - Compensated absences 52,679 303,670 - Installment purchase obligations 314,000 314,000 - Revenue bonds payable - net unamortized premium - 42,696,055 - Limited obligation bonds payable - 36,552,254 - State revolving loans payable - 6,735,446 - Total other post-employment benefits liability 2,881,391 12,809,891 - Total non-current liabilities 3,880,984 102,755,882 18,877 Total liabilities 4,476,834 117,330,011 438,984 Deferred Inflows of Resources: OPEB deferrals 410,278 1,823,986 - Pension deferrals 15,989 71,135 - Total deferred inflows of resources 426,267 1,895,121 - Net Position: Net investment in capital assets 7,529,541 214,143,680 - Unrestricted 2,981,852 125,882,182 4,095,251 Total net position 10,511,393$ 340,025,862 4,095,251$ Adjustment to reflect the consolidation of Internal Service Fund activities related to enterprise funds 105,343 Net position of business-type activities 340,131,205$ The notes to the financial statements are an integral part of this statement. 29 Exhibit 9 Page 1 of 2 CITY OF MONROE, NORTH CAROLINA STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION - PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2019 Water and Sewer Electric Natural Gas Airport Operating Revenues: Charges for services 17,961,501$ 63,358,356$ 18,321,753$ 1,823,194$ Interfund charges and employee contributions - - - - Availability fees 498,045 - - - Other operating revenues 223,049 404,352 4,207 89,370 Total operating revenues 18,682,595 63,762,708 18,325,960 1,912,564 Operating Expenses: Distribution systems 844,777 5,844,005 3,738,973 - Water filter plant 2,553,189 - - - Waste treatment plant 2,554,773 - - - Electric power purchases - 48,855,719 - - Natural gas purchases - - 7,067,414 - Aquatics and Fitness Center operations - - - - Airport operations - - - 2,467,488 Stormwater operations - - - - Solid waste operations - - - - Solid waste maintenance - - - - Operating expenses - - - - Workers' compensation claims and premiums - - - - Health benefit claims and premiums - - - - Property and liability claims and premiums - - - - Depreciation and amortization 3,105,088 2,699,443 1,548,506 781,138 Total operating expenses 9,057,827 57,399,167 12,354,893 3,248,626 Operating income (loss)9,624,768 6,363,541 5,971,067 (1,336,062) Non-Operating Revenues (Expenses): Gain (loss) on sale of capital assets (56,758) (184,371) (65,237) - Other non-operating revenues (expenses)70,749 208,565 165,858 - Investment earnings 2,586,808 3,121,170 1,877,720 46,428 Interest income interfund loans - 68,347 - - Interest and other charges (860,757) (670,043) (1,595,184) (448,327) Total non-operating revenues (expenses)1,740,042 2,543,668 383,157 (401,899) Income (loss) before capital contributions and transfers 11,364,810 8,907,209 6,354,224 (1,737,961) Capital grants and contributions 126,680 346,474 68,096 891,089 Transfers from other funds - 25,000 - 1,785,261 Transfers to other funds (17,409) (564,561) (180,593) (132,147) Total transfers (to) from other funds (17,409) (539,561) (180,593) 1,653,114 Change in net position 11,474,081 8,714,122 6,241,727 806,242 Net Position: Beginning of year, July 1 95,309,158 122,348,260 56,862,257 27,758,622 End of year, June 30 106,783,239$ 131,062,382$ 63,103,984$ 28,564,864$ Major Enterprise Funds The notes to the financial statements are an integral part of this statement. 30 Exhibit 9 Page 2 of 2 CITY OF MONROE, NORTH CAROLINA STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION - PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2019 Governmental Activities Nonmajor Internal Enterprise Service Funds Total Funds Operating Revenues: Charges for services 8,565,523$ 110,030,327$ -$ Interfund charges and employee contributions - - 8,143,629 Availability fees - 498,045 - Other operating revenues 219,719 940,697 1,177,964 Total operating revenues 8,785,242 111,469,069 9,321,593 Operating Expenses: Distribution systems - 10,427,755 - Water filter plant - 2,553,189 - Waste treatment plant - 2,554,773 - Electric power purchases - 48,855,719 - Natural gas purchases - 7,067,414 - Aquatics and Fitness Center operations 3,749,832 3,749,832 - Airport operations - 2,467,488 - Stormwater operations 1,922,153 1,922,153 - Solid waste operations 2,233,252 2,233,252 - Solid waste maintenance 96,421 96,421 - Operating expenses - - 507,008 Workers' compensation claims and premiums - - 165,410 Health benefit claims and premiums - - 8,360,051 Property and liability claims and premiums - - 631,885 Depreciation and amortization 441,758 8,575,933 - Total operating expenses 8,443,416 90,503,929 9,664,354 Operating income (loss)341,826 20,965,140 (342,761) Non-Operating Revenues (Expenses): Gain (loss) on sale of capital assets 75,532 (230,834) - Other non-operating revenues (expenses) 3,668 448,840 - Investment earnings 370,581 8,002,707 259,949 Interest income interfund loans - 68,347 - Interest and other charges (14,817) (3,589,128) - Total non-operating revenues (expenses)434,964 4,699,932 259,949 Income (loss) before capital contributions and transfers 776,790 25,665,072 (82,812) Capital grants and contributions 507 1,432,846 - Transfers from other funds - 1,810,261 - Transfers to other funds - (894,710) - Transfers (to) from other funds - 915,551 - Change in net position 777,297 28,013,469 (82,812) Net Position: Beginning of year, July 1 9,734,096 4,178,063 End of year, June 30 10,511,393$ 4,095,251$ Adjustment to reflect the consolidation of Internal Service Fund activities related to enterprise funds change (25,009) Net position of business-type activities 27,988,460$ The notes to the financial statements are an integral part of this statement. 31 Exhibit 10 Page 1 of 4CITY OF MONROE, NORTH CAROLINA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2019 Water and Sewer Electric Natural Gas Airport Cash Flows from Operating Activities: Cash received from customers 17,733,289$ 64,274,360$ 18,398,489$ 1,793,968$ Cash paid for goods and services (1,245,393) (51,896,826) (9,838,660) (1,332,546) Cash paid to or on behalf of employees for services (4,307,720) (3,368,192) (1,231,394) (602,883) Other operating revenues - - - - Net cash provided (used) by operating activities 12,180,176 9,009,342 7,328,435 (141,461) Cash Flows from Non-Capital Financing Activities: Advances from other funds - 211,044 - - Advances to other funds - - - (36,403) Transfers from other funds - 25,000 - 1,785,261 Transfers to other funds (17,409) (564,561) (180,593) (132,147) Net cash provided (used) by non-capital financing activities (17,409) (328,517) (180,593) 1,616,711 Cash Flows from Capital and Related Financing Activities: Proceeds from sale of capital assets 9,800 7,510 - - Acquisition and construction of capital assets (18,650,763) (2,698,552) (4,272,057) (2,309,292) Capital contributions 126,680 346,474 68,096 891,089 Principal paid on bond maturities and equipment obligations (1,381,692) (1,008,400) (1,275,912) (710,100) Interest paid on bond maturities and equipment obligations (860,757) (670,043) (1,595,184) (448,327) Net cash provided (used) by capital and related financing activities (20,756,732) (4,023,011) (7,075,057) (2,576,630) Cash Flows from Investing Activities: Earnings on investments 2,586,808 3,189,517 1,877,720 46,428 Net cash provided (used) by investing activities 2,586,808 3,189,517 1,877,720 46,428 Net increase (decrease) in cash and cash equivalents (6,007,157) 7,847,331 1,950,505 (1,054,952) Cash and Cash Equivalents: Beginning of year, July 1 47,888,246 43,997,030 32,461,488 5,244,772 End of year, June 30 41,881,089$ 51,844,361$ 34,411,993$ 4,189,820$ Major Enterprise Funds The notes to the financial statements are an integral part of this statement. 32 Exhibit 10 Page 2 of 4CITY OF MONROE, NORTH CAROLINA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2019 Governmental Activities Nonmajor Internal Enterprise Service Funds Total Funds Cash Flows from Operating Activities: Cash received from customers 8,773,863$ 110,973,969$ 7,649,563$ Cash paid for goods and services (5,005,816) (69,319,241) (9,722,558) Cash paid to or on behalf of employees for services (2,906,645) (12,416,834) - Other operating revenues - - 1,177,964 Net cash provided (used) by operating activities 861,402 29,237,894 (895,031) Cash Flows from Non-Capital Financing Activities: Advances from other funds - 211,044 - Advances to other funds - (36,403) - Transfers from other funds - 1,810,261 - Transfers to other funds - (894,710) - Net cash provided (used) by non-capital financing activities - 1,090,192 - Cash Flows from Capital and Related Financing Activities: Proceeds from sale of capital assets 75,534 92,844 - Acquisition and construction of capital assets (657,996) (28,588,660) - Capital contributions - 1,432,339 - Principal paid on bond maturities and equipment obligations (96,000) (4,472,104) - Interest paid on bond maturities and equipment obligations (14,817) (3,589,128) - Net cash provided (used) by capital and related financing activities (693,279) (35,124,709) - Cash Flows from Investing Activities: Earnings on investments 370,581 8,071,054 259,949 Net cash provided (used) by investing activities 370,581 8,071,054 259,949 Net increase (decrease) in cash and cash equivalents 538,704 3,274,431 (635,082) Cash and Cash Equivalents: Beginning of year, July 1 5,804,728 135,396,264 4,460,956 End of year, June 30 6,343,432$ 138,670,695$ 3,825,874$ The notes to the financial statements are an integral part of this statement. 33 Exhibit 10 Page 3 of 4CITY OF MONROE, NORTH CAROLINA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2019 Water and Sewer Electric Natural Gas Airport Reconciliation of Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities: Operating income (loss)9,624,768$ 6,363,541$ 5,971,067$ (1,336,062)$ Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation and amortization 3,105,088 2,699,443 1,548,506 781,138 Non operating revenue 70,749 208,565 165,858 - Increase deferred outflows - pension (343,852) (149,269) (77,300) (63,973) Increase in net pension liability 419,859 182,264 94,387 78,113 Decrease deferred inflows - pension (42,841) (18,598) (9,631) (7,970) Changes in assets and liabilities: (Increase) decrease in accounts receivable (1,022,942) 310,011 (103,083) (116,983) (Increase) decrease in inventories 18,322 (151,174) (48,724) 4,997 (Increase) decrease in prepaid expenses 2,451 1,784 (129) (1,613) Increase (decrease) in accounts payable and accrued liabilities 143,570 (584,460) (300,558) 479,244 Increase (decrease) in customer deposits 436 (8,708) 9,883 - (Increase) decrease in deferred outflows of resources for OPEB (583) (255) (129) (107) Increase (decrease) in deferred inflows of resources for OPEB 228,627 99,803 50,609 42,292 Increase (decrease) in net OPEB liability 128 56 29 22 Increase (decrease) in compensated absences (23,604) 56,339 27,650 (559) Total adjustments 2,555,408 2,645,801 1,357,368 1,194,601 Net cash provided (used) by operating activities 12,180,176$ 9,009,342$ 7,328,435$ (141,461)$ Major Enterprise Funds The notes to the financial statements are an integral part of this statement. 34 Exhibit 10 Page 4 of 4CITY OF MONROE, NORTH CAROLINA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2019 Governmental Activities Nonmajor Internal Enterprise Service Funds Total Funds Reconciliation of Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities: Operating income (loss)341,826$ 20,965,140$ (342,761)$ Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation and amortization 441,758 8,575,933 - Non operating revenue 4,175 449,347 - Decrease deferred outflows - pension (183,922) (818,316) - Increase in net pension liability 224,576 999,199 - Decrease deferred inflows - pension (22,915) (101,955) - Changes in assets and liabilities: (Increase) decrease in accounts receivable (16,223) (949,220) (473,502) (Increase) decrease in inventories 1,794 (174,785) - (Increase) decrease in prepaid expenses 941 3,434 (20,564) Increase (decrease) in accounts payable and accrued liabilities (47,687) (309,891) (58,204) Increase (decrease) in customer deposits - 1,611 - (Increase) decrease in deferred outflows of resources for OPEB (309) (1,383) - Increase (decrease) in deferred inflows of resources for OPEB 122,276 543,607 - Increase (decrease) in net OPEB liability 68 303 - Increase (decrease) in compensated absences (4,956) 54,870 - Total adjustments 519,576 8,272,754 (552,270) Net cash provided (used) by operating activities 861,402$ 29,237,894$ (895,031)$ The notes to the financial statements are an integral part of this statement. 35 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 I. Summary of Significant Accounting Policies The accounting policies of the City of Monroe and its discretely presented component units conform to generally accepted accounting principles as applicable to governments. The following is a summary of the more significant accounting policies: A. Reporting Entity The City of Monroe is a municipal corporation that is governed by an elected mayor and a six - member council. As required by generally accepted accounting principles, these financial statements present the City and its component units, legally separate entities for which the City is financially accountable. The discretely presented component units presented below are reported in a separate column in the City's financial stat ements in order to emphasize that they are legally separate from the City. City of Monroe ABC Board The members of the City of Monroe ABC Board’s governing board are appointed by the City. In addition, the ABC Board is required by state statute to distribute a portion of its surpluses to the General Fund of the City. The ABC Board, which has a June 30 year-end, is presented as if it were a proprietary fund (discrete presentation). Complete financial statements for the ABC Board may be obtained from the entity’s administrative offices at City of Monroe ABC Board, 1771 Dickerson Boulevard, Monroe, North Carolina 28110. City of Monroe Tourism Development Authority The members of the City of Monroe Tourism Development Authority’s governing board are appointed by the Monroe City Council. The Authority must expend revenues as established in N.C. Session Law 2001-439. Specifically, for the first ten years, at least two-thirds of the proceeds shall be used for tourism-related purposes including tourism-related capital expenditures. The remainder of the funds shall be used to promote travel and tourism as defined by session law. After ten years, two-thirds of the proceeds shall be expended to promote travel and tourism, and one-third expended for tourism-related purposes. The Tourism Development Authority, which has a June 30 year-end, is presented as if it were a general government fund (discrete presentation). Complete financial statements for the Authority may be obtained from the entity’s administrative offices at City of Monroe Tourism Development Authority, 300 West Crowell Street, Monroe, North Carolina 28112. B. Basis of Presentation Government-Wide Statements. The Statement of Net Position and the Statement of Activities display information about the primary government and its component units. These statements include the financial activities of the overall government. Eliminations have been made to minimize the double counting of internal activities. Interfund services provided and used are not eliminated in the process of consolidation. These statements distinguish between the governmental and business-type activities of the City. Governmental activities generally are financed through taxes, intergovernmental revenues, and other non-exchange transactions. Business-type activities are financed, in whole or in part, by fees charged to external parties. 36 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 The Statement of Activities presents a comparison between direct expenses and program revenues for the different business-type activities of the City and for each function of the City's governmental activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expense allocations that have been made in the funds have been reversed for the Statement of Activities. Program revenues include (a) fees and charges paid by the recipients of goods or services offered by the programs and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues. Fund Financial Statements. The fund financial statements provide information about the City’s funds. Separate statements for each fund category – governmental and proprietary – are presented. The emphasis of fund financial statements is on major governmental and enterprise funds, each displayed in a separate column. All remaining governmental and enterprise funds are aggregated and reported as nonmajor funds. Proprietary fund operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially equal values. Non-operating revenues, such as subsidies result from non-exchange transactions. Other non-operating revenues are ancillary activities, such as investment earnings. The City reports the following major governmental fund: General Fund. The General Fund is the general operating fund of the City. The General Fund accounts for all financial resources except those that are required to be accounted for in ano ther fund. The primary revenue sources are ad valorem taxes, federal and state grants, and various other taxes and licenses. The primary expenditures are for public safety, street maintenance and construction, culture and recreation activities, and general government services. The City reports the following nonmajor governmental funds: Community Development. This fund is used to account for specific revenues that are restricted to fund continuing rehabilitation of housing within certain targeted areas of the City. Downtown Monroe. This fund is used to account for specific revenues that are restricted for the purpose of downtown revitalization. Monroe Union County Economic Development. This fund is used to account for specific revenues that are restricted for the purpose of County-wide economic development. Capital Projects Fund. This fund is used to account for the purchase, renovation, furnishing, or construction of roadway and facility improvements. Occupancy Tax Projects. This fund is used to account for tourism related capital expenditures. Governmental Capital Reserve Fund. This fund is used to accumulate funds for the purpose of constructing greenways. 37 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 The City reports the following major enterprise funds: Water and Sewer Fund. This fund is used to account for the activities associated with the production, distribution, and transmission of potable water and the activities associated with operating and maintaining the City’s sewer system. Electric Fund. This fund is used to account for the activities associated with the distribution and transmission of electricity by the City to its users. Natural Gas Fund. This fund is used to account for the activities associated with the distribution of natural gas by the City to its users. Airport Fund. This fund is used to account for the activities associated with the operation of the City’s Airport. The City reports the following nonmajor enterprise funds: Aquatics and Fitness Center. This fund is used to account for the activities associated with the operation of the City’s Aquatics and Fitness Center. Stormwater Fund. This fund is used to account for the activities associated with the operation and maintenance of the City’s stormwater system. Solid Waste. This fund is used to account for the activities associated with the operation of the City’s solid waste services. The City reports the following fund types: Internal Service Funds. Internal service funds are used to account for the financing of goods or services by one department or agency to other departments or agencies of the City on a cost reimbursement basis. The City maintains three internal service funds: Health and Dental Fund, Workers’ Compensation Fund, and the Property and Liability Fund. C. Measurement Focus and Basis of Accounting In accordance with North Carolina General Statutes, all funds of the City are maintained during the year using the modified accrual basis of accounting. Government-Wide and Proprietary Fund Financial Statements. The government-wide and proprietary financial statements are reported using the economic resources measurement focus. The government-wide and proprietary fund financial statements are reported using the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Non-exchange transactions, in which the City gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, grants, and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied. 38 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 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, including special assessments. 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 a nd delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the City enterprise funds are charges to customers for sales and services. The City also recognizes as operating revenue the portion of fees intended to recover the cost of connecting new or reconnecting current customers to the water and sewer system. Operating expenses for enterprise funds and internal service funds include the cost of sales 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. Governmental Fund Financial Statements. Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt, claims and judgments, and compensated absences, which are recognized as expenditures to the extent they have matured. General capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term debt and acquisitions under capital leases are reported as other financing sources. The City considers all revenues available if they are collected within 90 days after year -end, except for property taxes. Ad valorem taxes receivable are not accrued as revenue because the amount is not susceptible to accrual. At June 30, taxes receivable for property other than motor vehicles are materially past due and are not considered to be an available resource 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. Sales taxes and certain intergovernmental revenues, such as the utilities franchise tax, collected and held by the state at year-end on behalf of the City are recognized as revenue. Intergovernmental revenues and sales and services are not susceptible to accrual because generally they are not measurable until received in cash. All taxes, including those dedicated for specific purposes are reported as general revenues rather than program revenues. Grant revenues, which are unearned at year-end, are recorded as unearned revenues. Under the terms of grant agreements, the City funds certain programs by a combination of specific cost-reimbursement grants, categorical block grants, and general revenues. Thus, when program expenses are incurred, there are both restricted and unrestricted net position available to finance the program. It is the City’s policy to first apply cost -reimbursement grant resources to 39 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 such programs, followed by categorical block grants, and then by general revenues. D. Budgetary Data The City’s budgets are adopted as required by the North Carolina General Statutes. An annual budget is adopted for all funds except those which operate under project ordinances. All annual appropriations lapse at fiscal year-end. Project ordinances are adopted for the capital projects funds and the enterprise capital projects funds which are consolidated with their respective operating funds for reporting purposes. All budgets are prepared using the modified accrual basis of accounting. Expenditures may not legally exceed appropriations at the functional level for all annually budgeted funds and at the object level for the multi-year funds. The City’s department heads may make transfers of appropriations within a department. Transfers of appropriations between departments require the approval of the City Manager. The legal level of budgetary control is at the functional level for all annually budgeted funds, and any transfers of appropriations between functions require the approval of the City Council. The legal level of budgetary control is at the object level for the funds budgeted by project ordinance, and any transfers of appropriations between objects require the approval of the City Council. The budget ordinance must be adopted by July 1 of the fiscal year or the governing board must adopt an interim budget that covers that time until the annual ordinance can be adopted. E. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Fund Equity 1. Deposits and Investments All deposits of the City, the ABC Board, and the Tourism Development Authority are made in Board-designated official depositories and are secured as required by state law [G.S. 159- 31]. The City, ABC Board, and the Tourism Development Authority may designate, as an official depository, any bank or savings association whose principal office is located in North Carolina. Also, the City, the ABC Board, and the Tourism Development Authority 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, the ABC Board, and the Tourism Development Authority 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, the ABC Board, and the Tourism Development Authority’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 NC Capital Management Trust Government Portfolio, an SEC-registered (2a-7) government money market fund, is measured at fair market value. The NCCMT Term Portfolio’s securities are valued at fair value. The NCCMT-Term Portfolio is bond fund, has no rating and is measured at fair value. As of June 30, 2019, the Term portfolio has a duration of .11 years. Because the NCCMT Government and Term Portfolios have a weighted average maturity of less than 90 days, they 40 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 are presented as an investment with a maturity of less than 6 months. Money market investments that have a remaining maturity at the time of purchase of one year or less are reported at amortized cost. Non-participating interest earning investment contracts are accounted for at cost. In accordance with state law, the City has invested in securities which are callable and 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. Cash and Cash Equivalents 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. The ABC Board and the Tourism Development Authority consider all highly liquid investments (including restricted assets) with a maturity of three months or less, when purchased, to be cash and cash equivalents. 3. Restricted Assets Unexpended installment financing obligations received by the City are classified as restricted for the General Fund because their use is completely restricted to the purpose for which the installment obligations were issued. Customer deposits held by the City before any services are supplied are restricted to the service for which the deposit was collected. Powell Bill funds are also classified as restricted cash because they can be expended only for the purposes of maintaining, repairing, constructing, reconstructing, or widening of local streets per G.S. 136-41.1 through 136-41.4. 41 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 Governmental Activities: General Fund: Streets 1,641,615$ Unexpended debt proceeds 159,254 Capital Projects Fund: Unexpended debt proceeds 6,637,322 Health and Dental Fund: Deposits 10,169 Workers' Compensation Fund: Deposits 8,708 Total governmental activities 8,457,068 Business-Type Activities: Water and Sewer Fund: Customer deposits 74,680 Unexpended debt proceeds 2,741,458 Electric Fund: Customer deposits 309,546 Natural Gas Fund: Customer deposits 144,332 Unexpended debt proceeds 2,043,091 Airport Fund: Unexpended debt proceeds 1,910,443 Total business-type activities 7,223,550 Total restricted cash 15,680,618$ 42 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 4. Ad Valorem Taxes Receivable 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, 2018. As allowed by state law, the City has established a schedule of discounts that apply to taxes that are paid prior to the due date. In the City’s General Fund, ad valorem tax revenues are reported net of such discounts. 5. Allowance for Doubtful Accounts 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. 6. Inventories and Prepaid Items The inventories of the City, the ABC Board, and the Tourism Development Authority are valued at cost (first-in, first-out), which approximates market. The inventories of the City's General Fund and enterprise funds and those of the ABC Board and the Tourism Development Authority consist of materials and supplies held for subsequent use. The cost of these inventories is expensed when consumed rather than when purchased. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements and expensed as the items are used. 7. Capital Assets Capital assets are defined by the government as assets with an initial individual cost of more than a certain cost and an estimated useful life in excess of two years. Minimum capitalization costs are as follows: land, $5,000; buildings, improvements, substations, lines, and other plant and distribution systems, $5,000; infrastructure, $100,000; furniture and equipment, $5,000; computer software, $5,000; and vehicles, $5,000. Purchased or constructed capital assets are reported at cost or estimated historical cost. 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. All other purchased or constructed capital assets are reported at cost or estimated historical cost. General infrastructure assets acquired prior to July 1, 2003 consist of the road network assets that were acquired or that received substantial improvements subsequent to July 1, 1980 and are reported at estimated historical cost using deflated replacement cost. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets’ lives are not capitalized. 43 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 Capital assets are depreciated using the straight-line method over the following estimated useful lives: Estimated Asset Class Useful Lives Infrastructure 30-50 Buildings and improvements 20-45 Dams and reservoirs 45 Plants and distribution systems 30-60 Vehicles and motorized equipment 6-12 Computer software 5 Other equipment 5-15 Capital assets of the ABC Board are depreciated over their useful lives on a straight-line basis as follows: Estimated Asset Class Useful Lives Buildings 40 Furniture/equipment 5-7 Vehicles 5 The Tourism Development Authority had no capital assets at June 30, 2019. 8. Deferred Outflows/Inflows of Resources In addition to assets, the Statement of Financial Position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, Deferred Outflows of Resources, represents a consumption of net position that applies to a future period and so will not be recognized as an expense or expenditure until then. The City has three items that meet this criterion: an unamortized loss on a bond defeasance for refunding bonds, OPEB deferrals, and pension deferrals. In addition to liabilities, the Statement of Financial 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 a future period and so will not be recognized as revenue until then. The City has five items that meet the criterion for this category – prepaid items not yet earned, other receivables, property taxes receivable, OPEB deferrals, and pension deferrals. 44 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 9. Long-Term Obligations In the government-wide financial statements and proprietary fund types in the 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 deferred and amortized over the life of the bonds using the straight-line method that approximates the effective interest method. Bonds payable are reported net of the applicable bond premiums or discount. Bond issuance costs, except for prepaid insurance costs, are expensed in the reporting period in which they are incurred. Prepaid insurance costs are expensed over the life of the debt. In fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of 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. 10. Compensated Absences The vacation policy of the City provides for the accumulation of earned vacation leave , with such leave being fully vested when earned as follows: Employees Hired before July 1, 1992 Vacation leave may be accumulated without any applicable maximum until June 30 each year. However, if the employee separates from service, payment for accumulated vacation leave shall not exceed sixty (60) days. On June 30 of each year, any employee with more than 60 days of accumulated leave shall have the excess accumulation removed so that only 60 days are carried forward to July 1 of the next fiscal year. The remaining excess amount will be converted to sick leave and added to the employee’s sick leave balance. Employees Hired after July 1, 1992 Vacation leave may be accumulated without any applicable maximum until June 30 of each year. However, if the employee separates from service, payment for accumulated vacation leave shall not exceed two times the employee’s annual accrual rate (i.e. if the accrual rate is 15 days per year, the employee may only be paid for 30 days). On June 30 of each ye ar, each employee may only carry over into the new fiscal year two times the employee’s annual accrual rate. The remaining excess amount will be converted to sick leave and added to the employee’s sick leave balance. Employees of the City of Monroe ABC Board earn two weeks paid vacation each year. Employees must take vacation leave in the year earned and are not allowed to carry forward any vacation time to subsequent years. 45 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 The Tourism Development Authority had two employees during the year ended June 30, 2019 and falls under the City’s vacation policy. 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. The City’s, the ABC Board’s, and the Tourism Development Authority’s sick leave policies provide 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 neither the City, the ABC Board, nor the Tourism Development Authority has any obligation for the accumulated sick leave until it is actually taken, no accrual for sick leave has been made. 11. Net Position/Fund Balances Net Position Net position in government-wide and proprietary fund financial statements are classified as net investment in capital assets; restricted and unrestricted. Restricted net position represents constraints on resources that are either externally imposed by creditors, grantors, contributors, laws or regulations of other governments, or imposed by law through state statute. Fund Balances In the governmental fund financial statements, fund balance is composed of five classifications designed to disclose the hierarchy of constraints placed on how fund balance can be spent. The governmental fund types classify fund balances as follows: Non-Spendable Fund Balance – This classification includes amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact. Inventories – Portion of fund balance that is not an available resource because it represents the year-end balance of ending inventories, which are not spendable resources. Prepaids – Portion of fund balance that is not an available resource because it represents certain payments to vendors applicable to future accounting periods and is, therefore, not in spendable form. 46 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 Non-spendable fund balance at June 30, 2019 is as follows: General Purpose Fund Inventories 199,218$ Prepaids 656,895 Total 856,113$ Restricted Fund Balance – This classification includes amounts that are restricted to specific purposes externally imposed by creditors or imposed by law. Restricted for Stabilization by State Statute – Portion of fund balance that is restricted by State Statute [G.S. 159-8(a)]. North Carolina G.S. 159-8 prohibits units of government from budgeting or spending a portion of their fund balance. This is one of several statutes enacted by the North Carolina State Legislature in the 1930’s that were designed to improve and maintain the fiscal health of local government units. Restricted by State statute (RSS), is calculated at the end of each fiscal year for all annually budgeted funds. The calculation in G.S. 159-8(a) provides a formula for determining what portion of fund balance is available for appropriation. The amount of fund balance not available for appropriation is what is known as “restricted by State statute”. Appropriated fund balance in any fund shall not exceed the sum of cash and investments minus the sum of liabilities, encumbrances, and deferred revenues arising from cash receipts, as those figures stand at the close of the fiscal year next preceding the budget. Per GASB guidance, RSS is considered a resource upon which a restriction is “imposed by law through constitutional provisions or enabling legislation.” RSS is reduced by inventories and prepaids as they are classified as nonspendable. Outstanding Encumbrances are included within RSS. RSS is included as a component of Restricted Net position and Restricted fund balance on the face of the balance sheet. Restricted for Public Safety – Portion of fund balance that is restricted by revenue source for certain law enforcement operations. Restricted for Transportation - Powell Bill – portion of fund balance that is restricted by revenue source for street construction and maintenance expenditures. This amount represents the balance of the total unexpended Powell Bill funds. Restricted for Culture and Recreation – Portion of fund balance that is restricted by revenue source for culture and recreation purposes. Restricted for Occupancy Tax Capital Projects – Portion of fund balance that is restricted by revenue source for tourism capital projects. Restricted for Economic Development – Portion of fund balance that is restricted by revenue source for economic development purposes. Restricted fund balance at June 30, 2019 is as follows: 47 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 Nonmajor General Governmental Purpose Fund Funds Total Stabilization by state statute 6,450,041$ 6,461,240$ 12,911,281$ Public safety 707,074 - 707,074 Transportation 1,641,615 - 1,641,615 Culture and recreation 80,220 3,177,275 3,257,495 Occupancy tax capital projects - 985,639 985,639 Economic development - 341,930 341,930 Total 8,878,950$ 10,966,084$ 19,845,034$ Committed Fund Balance – This classification includes amounts that can be used only for specific purposes determined by a formal action of the government’s highest level of decision - making authority. The City Council is the highest level of decision-making authority for the government that can, by adoption of an ordinance prior to the end of the fiscal year, commit fund balance. Once adopted, the limitation imposed by the ordinance remains in place until a similar action is taken (the adoption of another ordinance) to remove or revise the limitation. Committed for Culture and Recreation – Portion of fund balance that is committed for use in culture and recreation. Committed fund balance at June 30, 2019 is as follows: Nonmajor Governmental Purpose Funds Culture and recreation 213,242$ Total 213,242 Assigned Fund Balance – Portion of fund balance that the City of Monroe intends to use for specific purposes that is considered neither restricted or committed. The City Council has the responsibility for assigning fund balance by majority vote. Minimum Fund Balance Requirement – The Monroe City Council has adopted a minimum fund balance policy. Airport Grant Acceptance – The Monroe City Council has approved money to be spent at the Charlotte-Monroe Executive Airport to match federal and state grants during the airport expansion project. Airport Operations 5-Year Subsidy – The Monroe City Council has approved an assignment to be used over five years to subsidize airport operations. Street Resurfacing 5-Year Program – The Monroe City Council has approved an assignment to be used over five years to provide funding for additional resurfacing projects. 48 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 Subsequent Year’s Expenditures – The Monroe City Council has approved a budget ordinance to use fund balance as a resource in next year’s budget to cover a projected excess of expec ted expenditures over expected revenues. Community Development – The Monroe City Council has approved an assignment to be used to fund continuing rehabilitation of housing within certain targeted areas of the City. Downtown Monroe – The Monroe City Council has approved an assignment to be used for downtown revitalization. Assigned fund balance at June 30, 2019 is as follows: Nonmajor General Governmental Purpose Fund Funds Total Minimum fund balance requirement 10,681,100$ -$ 10,681,100$ Airport grant acceptance 456,815 - 456,815 Airport operations - 5-year subsidy 750,000 - 750,000 Street resurfacing - 5-year program 900,000 - 900,000 Subsequent year's expenditures 2,755,544 - 2,755,544 Community development - 56,562 56,562 Downtown Monroe - 438,162 438,162 Total 15,543,459$ 494,724$ 16,038,183$ Unassigned Fund Balance – The portion of fund balance that has not been restricted, committed, or assigned to specific purposes or other funds. The General Fund is the only fund that can have positive unassigned fund balance. The City of Monroe has a revenue spending policy that provides guidance for programs with multiple revenue sources. The Finance Officer will use resources in the following hierarchy: bond proceeds, federal funds, State funds, local non-City funds, and City funds. For purposes of fund balance, classification expenditures are to be spent from restricted fund balance first, followed in order by committed fund balance, assigned fund balance and, lastly, unassigned fund balance. The Finance Officer has the authority to deviate from this policy if it is in the best interest of the City. The City of Monroe has also adopted a minimum fund balance policy for the General Fund which instructs management to conduct the business of the City in such a manner that assigned fund balance is the greater of $7,500,000 or 25% of the next year’s original adopted budget, net of federal and State pass-through revenues. Any portion of the General Fund unassigned fund balance in excess of the $7,500,000, or 25% minimum requirement, may be appropriated by the City Council in a subsequent fiscal year to fund capital or debt service expenditures as determined by the City Council during the budget process. If during a fiscal year an excess over the stipulated $7,500,000 or 25% exists, the City Council may request an appropriation to 49 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 fund unforeseen needs. 12. Defined Benefit Cost-Sharing Plan For purposes of measuring the net pension liability, 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, plan member contributions are recognized in the period in which the contributions are due. The City of Monroe’s employer contributions are recognized when due, and the City of Monroe has a legal requirement to provide the contributions. Benefits and refunds are recognized when due and payable in accordance with the terms of LGERS. Investments are reported at fair value. 13. 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 and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures/expenses during the reporting period. Actual results could differ from those estimates. 14. Other Resources The General Fund provides the basis of local resources for other governmental funds. These transactions are recorded as “Transfers – to other funds” in the General Fund and “Transfers – from other funds” in the Receiving Fund. II. Reconciliation of Government-Wide 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 reconciliation between fund balance - total governmental funds and net position - governmental activities as reported in government-wide Statement of Net Position. One element of that reconciliation explains that “long-term liabilities, including installment purchase obligations, are not due and payable in the current period and, therefore, are not reported in the funds”. The details of this $(17,608,691) difference are as follows: 50 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 Installment purchase obligations (6,818,146)$ Limited obligation bonds (8,196,488) Compensated absences (2,594,057) Net adjustment to reduce fund balance - total governmental funds to arrive at net position - governmenal activities (17,608,691)$ 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 reconciliation between net change in fund balances - total governmental funds and change in net position of governmental activities as reported in the government-wide Statement of Activities. One element of that reconciliation explains 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 $3,074,702 difference are as follows: Capital outlay 8,372,832$ Disposal, net book value (229,455) Depreciation expense (5,068,675) Net adjustment to decrease net change in fund balances - total governmental funds to arrive at change in net position of governmental activities 3,074,702$ Another element of that reconciliation is 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 has any effect on net position”. The details of this $(7,665,940) are as follows: Debt issued or incurred (8,420,000)$ Premium on debt issued (432,063)$ Amortization of premium 20,575$ Principal payments: Installment purchase obligations 1,165,548 Net adjustment to decrease net change in fund balances - total governmental funds to arrive at change in net position of governmental activities (7,665,940)$ 51 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 III. Detail on All Funds A. Assets 1. Deposits All of the deposits of the City, the ABC Board, and the Tourism Development Authority are either insured or collateralized by using one of two methods. Under the Dedicated Method, all deposits that exceed the federal depository insurance coverage level ar e collateralized with agents in these units’ names. Under the Pooling Method, which is a collateral pool, all securities held by the City's, the ABC Board’s, or the Tourism Development Authority’s uninsured deposits are collateralized with securities held by the State Treasurer's agent in the name of the State Treasurer. Since the State Treasurer is acting in a fiduciary capacity for the City, the ABC Board, and the Tourism Development Authority, these deposits are considered to be held by the City's, the ABC Board’s, and the Tourism Development Authority’s agents in their names. The amount of the pledged collateral is based on an approved averaging method for non-interest-bearing deposits and the actual current balance for interest-bearing deposits. Depositories using the Pooling Method report to the State Treasurer the adequacy of their pooled collateral covering uninsured deposits. The State Treasurer does not confirm this information with the City, the ABC Board, the Tourism Development Authority, or the escrow agent. Because of the inability to measure the exact amount of collateral pledged for the City, the ABC Board, and the Tourism Development Authority under the Pooling Method, the potential exists for under collateralization, and this risk may increase in periods of high cash flows. However, the State Treasurer of North Carolina enforces strict standards of financial stability for each depository that collateralizes public deposits under the Pooling Method. The City, the ABC Board and the Tourism Development Authority do not have formal policies regarding custodial credit risk for deposits, but rely on the State Treasurer to enforce standards of minimum capitalization for all pooling method financial institutions and to monitor them for compliance. The City, the ABC Board, and the Tourism Development Authority comply with the provisions of G.S. 159-31 when designating official depositories and verifying that deposits are properly secured. At June 30, 2019, the City's deposits had a carrying amount of $23,426,194 and a bank balance of $23,467,251. Of the bank balance, $250,000 was covered by federal depository insurance and the remainder was covered by collateral held under the Pooling Method. The City’s petty cash fund totaled $5,975. At June 30, 2019, the ABC Board’s deposits had a carrying amount of $789,442 and a bank balance of $751,460. Of the bank balance, $500,000 was covered by federal depository insurance, and $251,460 was covered by collateral held under the Pooling Method. The ABC Board had an additional $4,550 in the drawers and petty cash to cover operating needs on a daily basis. At June 30, 2019, the Tourism Development Authority’s deposits had a carrying amount of $755,572 and a bank balance of $755,572. Of the bank balance, $250,000 was covered by federal depository insurance and the remainder was covered by collateral held under the Pooling Method. 52 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 2. Investments As of June 30, 2019, the City had the following investments and maturities: Valuation Measurement Book Value 1-3 3-5 5+ Investment Type Method at 6/30/19 1 Year Years Years Years U.S. Government Agencies Fair Value Level 2 142,040,657$ 3,985,776$ 23,291,587$ 24,388,595$ 90,374,699$ NC Capital Management Trust - Government Portfolio Fair Value Level 1 14,088,160 N/A N/A N/A N/A NC Capital Management Trust - Term Portfolio*Fair Value Level 1 7,385,160 7,385,160 - - - Total 163,513,977$ 11,370,936$ 23,291,587$ 24,388,595$ 90,374,699$ *Because the NC Capital Management Trust Term Portfolio has a weighted average maturity of less than 90 days, it was presented as an investment with a maturity of less than 6 months. All investments are 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: Debt securities valued using directly observable, quoted prices (unadjusted) in active markets for identical assets. Level 2 debt securities are valued using a matrix pricing technique. Matrix pricing is used to value securities based on the securities’ benchmark quoted prices. 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. Credit Risk. The City has no formal policy regarding credit risk but has internal management procedures that limits the City’s investments to the provisions of G.S. 159-30 and restricts the purchase of securities to the highest possible ratings whenever particular types of securities are rated. The investment in U.S. Government Agencies (Federal Home Loan Bank, Federal Farm Credit Bank, Freddie Mac, and Fannie Mae) is rated AAA by Standard and Poor’s and Aaa by Moody’s Investors Service. The City’s investment in the NC Capital Management Trust Government Portfolio carried a credit rating of AAAm by Standard and Poor’s as of June 30, 2019. The City’s investment in the NC Capital Management Trust Term Portfolio is unrated. The Term Portfolio is authorized to invest in obligations of the U.S. government and agencies, and in high-grade money market instruments as permitted under North Carolina G.S. 159-30 as amended. 53 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 Custodial Credit Risk. For an investment, the custodial risk is the risk that in the event of the failure of the counterparty, the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The City has no formal policy on custodial credit risk, but management procedures are that the City shall utilize a third-party custodial agent for book entry transactions, all of which shall be held in the City’s name. Concentration of Credit Risk. The City’s Board places no limit on the amount that the City may invest in any one issuer. More than 80% of the City’s investments are in Federal Farm, Federal Home Loan Bank, Freddie Mac and Fannie Mae securities. In addition, the City had 15.5% of its investment portfolio in the NCCMT – government portfolio at June 30, 2019. 3. Note Receivable The City granted a promissory note in December 2010 in the amount of $1,250,000 to a developer as an incentive agreement to undertake an economic development project to renovate and rehabilitate a downtown historic structure. Modification to the note on May 1, 2014 calls for interest to be paid monthly at the annual rate of 3.35%. Beginning in June 2014, the promissory note will be repaid through monthly installments of $6,855 through May 2034. 2019 Total receivable 964,765$ Less current portion 50,720 Total note receivable - non-current 914,045$ Scheduled future maturities of the note receivable are as follows: Year Ending Total 2020 50,720$ 2021 52,446 2022 54,230 2023 56,074 Thereafter 751,295 Total 964,765$ 54 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 The City granted a promissory note in the amount of $63,255 to an Association for repair of streets in a subdivision. The remaining balance of the promissory note is payable in monthly installments of $6,326 through May 2024. The note allows for no interest. There were principal collections of $6,326 for the fiscal year ended June 30, 2019. 2019 Total receivable 31,626$ Less current portion 6,326 Total note receivable - non-current 25,300$ Scheduled future maturities of the note receivable are as follows: Year Ending Total 2020 6,326$ 2021 6,326 2022 6,326 2023 6,326 Thereafter 6,322 Total 31,626$ 4. Receivables and Allowances for Doubtful Accounts Receivables as of year-end for the governmental activities and the business-type activities are as follows: Governmental Business-Type Activities Activities Accounts receivable, net 1,024,178$ 13,835,432$ The amounts presented in the Balance Sheet and the Statement of Net Position are net of the following allowances for doubtful accounts: General Fund: Taxes receivable 33,418$ Downtown Monroe: Taxes receivable 119$ 55 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 5. Capital Assets Primary Government Capital asset activity for the primary government for the year ended June 30, 2019 was as follows: July 1, 2018 Additions Retirements Transfers June 30, 2019 Governmental Activities: General Fund: Non-Depreciable Capital Assets: Land and land improvements 5,463,577$ 127,512$ -$ 27,400$ 5,618,489$ Construction in progress 783,122 3,794,596 94,803 (118,029) 4,364,886 Total non-depreciable capital assets 6,246,699 3,922,108 94,803 (90,629) 9,983,375 Depreciable Capital Assets: Buildings and improvements 27,598,809 470,808 3,363 50,117 28,116,371 Equipment 5,749,558 374,761 6,775 - 6,117,544 Vehicles and motorized equipment 18,681,189 1,785,190 627,186 - 19,839,193 Other intangibles 906,756 - - - 906,756 Infrastructure 91,107,608 332,454 - 40,512 91,480,574 Total depreciable capital assets 144,043,920 2,963,213 637,324 90,629 146,460,438 Less Accumulated Depreciation: Buildings and improvements 11,424,661 638,525 - - 12,063,186 Equipment 4,322,160 368,315 6,775 - 4,683,700 Vehicles and motorized equipment 12,506,742 1,736,757 591,726 - 13,651,773 Other intangibles 622,771 82,963 - - 705,734 Infrastructure 47,082,294 2,208,789 - - 49,291,083 Total accumulated depreciation 75,958,628 5,035,349$ 598,501$ -$ 80,395,476 Total depreciable capital assets, net 68,085,292 66,064,962 General Fund capital assets, net 74,331,991 76,048,337 56 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 July 1, 2018 Additions Retirements Transfers June 30, 2019 Downtown Monroe Fund: Non-Depreciable Capital Assets: Land and land improvements 80,149 -$ -$ -$ 80,149 Depreciable Capital Assets: Buildings and improvements 67,180 - - - 67,180 Equipment 98,071 - - - 98,071 Total depreciable capital assets 165,251 - - - 165,251 Less Accumulated Depreciation: Buildings and improvements 8,398 3,359 - - 11,757 Equipment 98,071 - - - 98,071 Total accumulated depreciation 106,469 3,359$ -$ -$ 109,828 Total depreciable capital assets, net 58,782 55,423 Downtown Monroe Fund capital assets, net 138,931 135,572 Occupancy Tax Fund: Non-Depreciable Capital Assets: Construction in progress 712,366 1,487,511$ 95,829$ -$ 2,104,048 Depreciable Capital Assets: Buildings and improvements 966,820 - - - 966,820 Equipment 255,177 - - - 255,177 Total depreciable capital assets 1,221,997 - - - 1,221,997 Less Accumulated Depreciation: Buildings and improvements 67,926 21,422 - - 89,348 Equipment 192,459 8,545 - - 201,004 Total accumulated depreciation 260,385 29,967$ -$ -$ 290,352 Total depreciable capital assets, net 961,612 931,645 Occupancy Tax Fund capital assets, net 1,673,978 3,035,693 Governmental activities capital assets, net 76,144,900$ 79,219,602$ 57 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 Depreciation expense was charged to functions/programs of the primary government as follows: General Fund: General government 334,765$ Transportation 2,493,637 Public safety 1,605,397 Culture and recreation 598,494 Economic and physical development 3,056 Total General Fund 5,035,349 Downtown Monroe Fund: General government 3,359 Occupancy Tax Fund: Economic and physical development 29,967 Total governmental activities 5,068,675$ July 1, 2018 Additions Retirements Transfers June 30, 2019 Business-Type Activities: Water and Sewer Fund: Non-Depreciable Capital Assets: Land and land improvements 829,827$ 4,779,207$ -$ -$ 5,609,034$ Construction in progress 2,529,452 4,888,259 65,435 - 7,352,276 Total non-depreciable capital assets 3,359,279 9,667,466 65,435 - 12,961,310 Depreciable Capital Assets: Buildings and improvements 33,331,138 - - - 33,331,138 Equipment 7,280,985 1,918,050 9,775 (5,081) 9,184,179 Vehicles and motorized equipment 3,855,569 81,974 54,714 - 3,882,829 Infrastructure 72,394,171 6,983,273 - - 79,377,444 Total depreciable capital assets 116,861,863 8,983,297 64,489 (5,081) 125,775,590 Less Accumulated Depreciation: Buildings and improvements 14,744,395 703,622 - - 15,448,017 Equipment 4,267,552 880,976 9,775 (5,081) 5,133,672 Vehicles and motorized equipment 2,720,190 254,990 53,590 - 2,921,590 Infrastructure 20,515,392 1,358,599 - - 21,873,991 Total accumulated depreciation 42,247,529 3,198,187$ 63,365$ (5,081)$ 45,377,270 Total depreciable capital assets, net 74,614,334 80,398,320 Water and Sewer Fund capital assets, net 77,973,613 93,359,630 58 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 July 1, 2018 Additions Retirements Transfers June 30, 2019 Electric Fund: Non-Depreciable Capital Assets: Land and land improvements 6,554,884 -$ -$ -$ 6,554,884 Construction in progress 3,646,829 299,398 191,881 (2,746,324) 1,008,022 Total non-depreciable capital assets 10,201,713 299,398 191,881 (2,746,324) 7,562,906 Depreciable Capital Assets: Buildings and improvements 10,027,115 - - - 10,027,115 Equipment 2,977,403 54,101 - 5,081 3,036,585 Vehicles and motorized equipment 3,614,796 41,970 - - 3,656,766 Infrastructure 107,727,393 2,303,083 - 2,746,324 112,776,800 Other intangibles 250,173 - - - 250,173 Total depreciable capital assets 124,596,880 2,399,154 - 2,751,405 129,747,439 Less Accumulated Depreciation: Buildings and improvements 958,096 223,576 - - 1,181,672 Equipment 2,051,031 53,499 - 5,081 2,109,611 Vehicles and motorized equipment 2,692,689 240,461 - - 2,933,150 Infrastructure 40,141,487 2,249,824 - - 42,391,311 Other intangibles 175,122 50,035 - - 225,157 Total accumulated depreciation 46,018,425 2,817,395$ -$ 5,081$ 48,840,901 Total depreciable capital assets, net 78,578,455 80,906,538 Electric Fund capital assets, net 88,780,168 88,469,444 Natural Gas Fund: Non-Depreciable Capital Assets: Land and land improvements 1,524,787 -$ -$ -$ 1,524,787 Construction in progress 7,507,678 3,384,263 65,237 (2,271,055) 8,555,649 Total non-depreciable capital assets 9,032,465 3,384,263 65,237 (2,271,055) 10,080,436 Depreciable Capital Assets: Buildings and improvements 569,484 - - - 569,484 Equipment 500,359 20,453 - - 520,812 Vehicles and motorized equipment 1,213,773 - - - 1,213,773 Infrastructure 69,578,771 867,341 - 2,271,055 72,717,167 Total depreciable capital assets 71,862,387 887,794 - 2,271,055 75,021,236 Less Accumulated Depreciation: Buildings and improvements 232,915 13,256 - - 246,171 Equipment 453,189 10,963 - - 464,152 Vehicles and motorized equipment 949,986 63,957 - - 1,013,943 Infrastructure 14,483,203 1,469,638 - - 15,952,841 Total accumulated depreciation 16,119,293 1,557,814$ -$ -$ 17,677,107 Total depreciable capital assets, net 55,743,094 57,344,129 Natural Gas Fund capital assets, net 64,775,559 67,424,565 59 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 July 1, 2018 Additions Retirements Transfers June 30, 2019 Airport Fund: Non-Depreciable Capital Assets: Land and land improvements 9,765,358 -$ -$ -$ 9,765,358 Construction in progress 2,426,439 2,185,425 - - 4,611,864 Total non-depreciable capital assets 12,191,797 2,185,425 - - 14,377,222 Depreciable Capital Assets: Buildings and improvements 31,022,301 - - - 31,022,301 Equipment 463,675 121,302 - - 584,977 Vehicles and motorized equipment 486,731 - - - 486,731 Infrastructure 3,138,867 - - - 3,138,867 Other intangibles - 2,565 - - 2,565 Total depreciable capital assets 35,111,574 123,867 - - 35,235,441 Less Accumulated Depreciation: Buildings and improvements 10,824,555 710,701 - - 11,535,256 Equipment 408,738 17,620 - - 426,358 Vehicles and motorized equipment 428,938 13,373 - - 442,311 Infrastructure 472,046 62,777 - - 534,823 Other intangibles - 257 - - 257 Total accumulated depreciation 12,134,277 804,728$ -$ -$ 12,939,005$ Total depreciable capital assets, net 22,977,297 22,296,436 Airport Fund capital assets, net 35,169,094 36,673,658 Aquatics and Fitness Center Fund: Non-Depreciable Capital Assets: Land and land improvements 925,594 -$ -$ -$ 925,594 Total non-depreciable capital assets 925,594 - - - 925,594 Depreciable Capital Assets: Buildings and improvements 10,314,335 67,433 - - 10,381,768 Equipment 309,760 56,099 - - 365,859 Vehicles and motorized equipment 49,676 - - - 49,676 Total depreciable capital assets 10,673,771 123,532 - - 10,797,303 Less Accumulated Depreciation: Buildings and improvements 4,495,760 271,315 - - 4,767,075 Equipment 164,379 32,011 - - 196,390 Vehicles and motorized equipment 38,092 3,310 - - 41,402 Total accumulated depreciation 4,698,231 306,636$ -$ -$ 5,004,867 Total depreciable capital assets, net 5,975,540 5,792,436 Aquatics and Fitness Center Fund capital assets, net 6,901,134 6,718,030 60 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 July 1, 2018 Additions Retirements Transfers June 30, 2019 Stormwater Fund: Non-Depreciable Capital Assets: Construction in progress 300,436 48$ -$ -$ 300,484 Total non-depreciable capital assets 300,436 48 - - 300,484 Depreciable Capital Assets: Buildings and improvements 20,495 - - - 20,495 Equipment 34,448 29,149 - - 63,597 Vehicles and motorized equipment 934,644 505,266 458,309 - 981,601 Infrastructure 162,048 - - - 162,048 Total depreciable capital assets 1,151,635 534,415 458,309 - 1,227,741 Less Accumulated Depreciation: Buildings and improvements 2,959 455 - - 3,414 Equipment 32,017 2,689 - - 34,706 Vehicles and motorized equipment 745,881 108,417 458,309 - 395,989 Infrastructure 17,825 3,241 - - 21,066 Total accumulated depreciation 798,682 114,802$ 458,309$ -$ 455,175 Total depreciable capital assets, net 352,953 772,566 Stormwater Fund capital assets, net 653,389 1,073,050 Solid Waste Fund: Depreciable Capital Assets: Other intangibles 967,361 -$ -$ -$ 967,361 Vehicles and motorized equipment 83,162 - - - 83,162 Buildings and improvements 143,914 - - - 143,914 Total depreciable capital assets 1,194,437 - - - 1,194,437 Less Accumulated Depreciation: Other intangibles 967,361 - - - 967,361 Vehicles and motorized equipment 22,914 13,124 - - 36,038 Buildings and improvements 32,381 7,196 - - 39,577 Total accumulated depreciation 1,022,656 20,320$ -$ -$ 1,042,976 Total depreciable capital assets, net 171,781 151,461 Solid Waste Fund capital assets, net 171,781 151,461 Business-type activities capital assets, net 274,424,738$ 293,869,838$ 61 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 Net Investment in Capital Assets Governmental Business-Type Activities Activities Capital assets 79,219,602$ 293,869,838$ Less: Long-term debt 15,014,634 90,721,362 Add: Deferred outflows - 4,300,212 Add: Unexpended debt proceeds 6,796,576 6,694,992 Net investment in capital assets 71,001,544$ 214,143,680$ Discretely Presented Component Units Capital asset activity for the ABC Board for the year ended June 30, 2019 was as follows: July 1, 2018 Additions Retirements June 30, 2019 Non-Depreciable Capital Assets: Land and land improvements 317,013$ -$ -$ 317,013$ Total non-depreciable capital assets 317,013 - - 317,013 Depreciable Capital Assets: Buildings and improvements 1,055,185 13,900 - 1,069,085 Equipment 123,233 42,721 14,127 151,827 Vehicles and motorized equipment 15,830 - - 15,830 Total depreciable capital assets 1,194,248 56,621 14,127 1,236,742 Less Accumulated Depreciation: Buildings and improvements 523,524 29,963 - 553,487 Equipment 116,734 10,747 14,127 113,354 Vehicles and motorized equipment 15,830 - - 15,830 Total accumulated depreciation 656,088 40,710$ 14,127$ 682,671 Total depreciable capital assets, net 538,160 554,071 ABC Board capital assets, net 855,173$ 871,084$ The Tourism Development Authority had no capital assets. 62 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 B. Liabilities 1. Accounts Payable and Accrued Liabilities Payables at the government-wide level at June 30, 2019 were as follows: Salaries and Vendors Benefits Total Governmental Activities: General Fund 661,403$ 1,084,521$ 1,745,924$ Nonmajor funds 1,160,085 14,058 1,174,143 Total governmental activities 1,821,488$ 1,098,579$ 2,920,067$ Business-Type Activities: Enterprise funds 8,277,038$ 420,092$ 8,697,130$ Component units’ payables at June 30, 2019 were as follows: Salaries Vendors and Benefits Other Total ABC Board 266,429$ 16,181$ 129,354$ 411,964$ Tourism Development Authority 10,013$ -$ 17,979$ 27,992$ 2. Pension Plan Obligations a. Local Governmental Employees' Retirement System 1. Description The City of Monroe and the ABC Board are participating employers in the state-wide 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 63 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 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. 2. 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. Eligi ble 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 post- retirement 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. 3. Contributions Contribution provisions are established by G.S. 128-30 and may be amended only by the North Carolina General Assembly. 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 Monroe’s contractually required contribution rate for the year ended June 30, 2019 was 8.50% of compensation for law enforcement officers and 7.75% for general employees and firefighters, actuarially determined as an amount that, when combined with employee contributions, is expected to finance the 64 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 costs of benefits earned by employees during the year. Contributions to the pension plan from the City of Monroe were $2,100,061 for the year ended June 30, 2019. The ABC Board’s contributions to LGERS for the year ended June 30, 2019 were $25,168. 4. 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. Members that leave LGERS with less than five years of creditable service are only eligible to receive a refund of employee contributions and interest. By state law, refunds to members 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, 2019, the City reported a liability of $9,172,662 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2018. The total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of December 31, 2017. The total pension liability was then rolled forward to the measurement date of June 30, 2018 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, 2018, the City’s proportion was 0.38665%, which was a decrease of 0.00072% from its proportion measured as of June 30, 2017. For the year ended June 30, 2019, the City recognized pension expense of $2,357,169. At June 30, 2019, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Outflows of Resources Deferred Inflows of Resources Differences between expected and actual experience 1,415,124$ 47,484$ Changes of assumptions 2,434,070 - Net difference between projected and actual earnings on pension plan investments 1,259,134 - Changes in proportion and differences between City contributions and proportionate share of contributions 841 184,222 City contributions subsequent to the measurement date 2,100,061 - Total 7,209,230$ 231,706$ 65 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 $2,100,061 reported as deferred outflows of resources related to pensions resulting from City contributions subsequent to the measurement date will be recognized as a decrease of the net pension liability in the year ended June 30, 2020. Other amounts reported as deferred inflows and outflows of resources related to pensions will be recognized in pension expense as follows: Year Ending June 30 Amount 2020 2,331,605$ 2021 1,530,702 2022 283,886 2023 731,270 Thereafter - Total 4,877,463$ 5. Actuarial Assumptions The total pension liability in the December 31, 2017 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 7.00 percent, net of pension plan investment expense, including inflation 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, 2017 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. 66 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 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, 2018 are summarized in the following table: Asset Class Target Allocation Long-Term Expected Real Rate of Return Fixed 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% The information above is based on 30-year expectations developed with the consulting actuary for the 2018 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. 6. Discount Rate The discount rate used to measure the total pension liability was 7.00%. 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 dete rmined. 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. 67 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 7. 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 7.00%, 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 (6.00%) or one percentage point higher (8.00%) than the current rate: 1%Current 1% Decrease Discount Rate Increase (6.00%)(7.00%)(8.00%) City's proportionate share of the net pension liability (asset)22,033,525$ 9,172,662$ (1,574,079)$ 8. 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. b. Law Enforcement Officers' Special Separation Allowance Plan Description. The City of Monroe 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 under the age of 62 who have completed at least 30 years of creditable service or have attained 55 years of age and have completed five or more years of creditable service. The Separation Allowance is equal to 0.85% 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 was not issued for the plan. All full-time law enforcement officers of the City are covered by the Separation Allowance. At December 31, 2017, the Separation Allowance’s membership consisted of: Retirees receiving benefits 7 Terminated plan members entitled to, but not yet receiving, benefits - Active plan members 88 Total 95 68 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 Summary of Significant Accounting Policies 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: Actuarial Assumptions. The entry age normal actuarial cost method was used in the December 31, 2017 valuation. The total pension liability in the December 31, 2017 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: Inflation 2.50 percent Salary increase 3.50 to 7.35 percent, including inflation and productivity factor Discount rate 3.64 percent The discount rate used to measure the TPL is the S&P Municipal Bond 20 Year High Grade Rate Index. Deaths after Retirement (Healthy): RP-2014 Healthy Annuitant base rates projected to 2015 using MP-2015, projected forward generationally from 2015 using MP-2015. Rates are adjusted by 104% for males and 100% for females. Deaths before Retirement: RP-2014 Employee base rates projected to 2015 using MP 2015, projected forward generationally from 2015 using MP -2015. Deaths after Retirement (Beneficiary): RP-2014 Healthy Annuitant base rates projected to 2015 using MP-2015, projected forward generationally from 2015 using MP- 2015. Rates are adjusted by 123% for males and females. Deaths after Retirement (Disabled): RP-2014 Disabled Retiree base rates projected to 2015 using MP-2015, projected forward generationally from 2015 using MP-2015. Rates are adjusted by 103% for males and 99% for females. 69 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 Contributions. The City is required by Article 12D of G.S. Chapter 143 to provide these retirement benefits and has chosen to fund the amounts necessary to cover the benefits earned on a pay-as-you-go basis through appropriations made in the General Fund operating budget. There were no contributions made by employees. 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 $172,953 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, 2019, the City reported a total pension liability of $4,156,173. The total pension liability was measured as of December 31, 2018 based on a December 31, 2017 actuarial valuation. The total pension liability was then rolled forward to the measurement date of December 31, 2018 utilizing update procedures incorporating the actuarial assumptions. For the year ended June 30, 2019, the City recognized pension expense of $330,997. Deferred Deferred Outflows of Inflows of Resources Resources Differences between expected and actual experience 185,248$ -$ Changes of assumptions 149,405 169,234 Benefit payments and plan administrative expense made subsequent to the measurement date 94,497 - Total 429,150$ 169,234$ $94,497 reported as deferred outflows of resources related to pensions resulting from benefit payments made subsequent to the measurement date will be recognized as a decrease of the total pension liability in the year ended June 30, 2020. Other amounts reported as deferred inflows and outflows of resources related to pensions will be recognized in pension expense as follows: Year Ending June 30 Amount 2020 41,946$ 2021 41,946 2022 41,946 2023 44,393 2024 (4,812) Thereafter - Total 165,419$ 70 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 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 3.64%, 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 (2.64%) or 1-percentage-point higher (4.64%) than the current rate: 1%Discount 1% Decrease Rate Increase (2.64%)(3.64%)(4.64%) Total pension liability 4,479,467$ 4,156,173$ 3,859,346$ 2019 Beginning balance 4,075,929$ Service cost 162,022 Interest on the total pension liability 126,067 Differences between expected and actual experience in the measurement of the total pension liability 116,892 Changes of assumptions or other inputs (151,784) Benefit payments (172,953) Ending balance of the total pension liability 4,156,173$ Schedule of Changes in Total Pension Liability Law Enforcement Officers' Special Separation Allowance 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, 2017 valuation were based on the results of an actuarial experience study for the period January 1, 2010 through December 31, 2014. 71 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 Total Expense, Liabilities, and Deferred Outflows and Inflows of Resources Related to Pensions Following is information related to the proportionate share and pension expense for all pension plans: LGERS LEOSSA Total Pension expense 2,357,169$ 330,997$ 2,688,166$ Pension liability 9,172,662 4,156,173 13,328,835 Proportionate share of the net pension liability 0.38665% n/a - Deferred of Outflows of Resources: Differences between expected and actual experience 1,415,124 185,248 1,600,372 Changes of assumptions 2,434,070 149,405 2,583,475 Net difference between projected and actual earnings on plan investments 1,259,134 - 1,259,134 Changes in proportion and differences between contributions and proportionate share of contributions 841 - 841 Benefit payments and administrative costs paid subsequent to the measurement date 2,100,061 94,497 2,194,558 Deferred of Inflows of Resources: Differences between expected and actual experience 47,484 - 47,484 Changes of assumptions 169,234 169,234 Changes in proportion and differences between contributions and proportionate share of contributions 184,222 - 184,222 c. Supplemental Retirement Income Plan 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. 72 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 Funding Policy. Article 12E of G.S. Chapter 143 requires the City to contribute each month an amount equal to 5% 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, 2019 were $498,469, which consisted of $282,504 from the City and $215,965 from the law enforcement officers. No amounts were forfeited. General Employees The City has elected to contribute to the Supplemental Retirement Income Plan for general employees as well as for law enforcement officers. Participation begins after six months of employment. The City has elected to contribute each month an amount equal to 3% of each employee’s salary, the employee contribution will be matched 2% by the City, and all amounts contributed are vested immediately. Also, the employees may make voluntary contributions to the plan. Contributions for the year ended June 30, 2019 were $2,074,603, which consisted of $636,266 in regular contributions, $367,256 in matching contributions from the City, and $1,071,081 from the employees. No amounts were forfeited. d. Other Post-Employment Benefits Healthcare Benefits Plan Description. Under the terms of a City resolution, the City administers a single employer Health and Dental Care Plan. This plan provides post-employment healthcare and dental benefits to retirees of the City provided they participate in the North Carolina Local Government Employees’ Retirement System and have 20 years of creditable service with the City. The amount the City pays towards these benefits is based on years of service with the City. The City pays the full cost of coverage for these benefits through private insurers. A stand-alone financial report is not issued. Funding Policy. Employees with 20 to 25 years of service – the City pays 50% and 75% of the cost of health and dental insurance, respectively. Employees with 30 years of service – the City pays 100% of the cost of health and dental insurance. In addition, retirees with 30 years of service receive $5,500 of life insurance coverage. When a retiree reaches age 65, they are transferred to the Medicare Supplement Group Plan and Part D Group Plan at the above referenced percentage of cost based on years of service. At that time, any dependents covered are offered COBRA coverage. Membership of the Health Care Plan consisted of the following at June 30, 2017: Retirees and dependents receiving benefits 90 Terminated plan members entitled to, - but not yet receiving, benefits Active plan members 420 Total 510 73 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 Total OPEB Liability The City’s total OPEB liability of $41,698,862 was measured as of June 30, 2018 and was determined by an actuarial valuation as of June 30, 2017. Actuarial Assumptions and Other Inputs. The total OPEB liability in the June 30, 2017 actuarial valuation was determined using the following actuarial assumptions and other inputs, applied to all periods included in the measurement unless otherwise specified: Inflation 2.50 percent Real wage growth 1.00 percent Wage inflation 3.50 percent Salary increases, including wage inflation: General Employees 3.50 to 7.75 percent Firefighters 3.50 to 7.75 percent Law Enforcement Officers 3.50 to 7.35 percent Municipal Bind Index Rate: Prior Measurement Date 3.56 percent Measurement Date 3.89 percent Healthcare cost trend rates: Pre-Medicare 7.50 percent for 2017 decreasing to an ultimate rate of 5.00 percent by 2023 Medicare 5.50 percent for 2017 decreasing to an ultimate rate of 5.00 percent by 2020 The discount rate used to measure the TOL was based on the June average of the Bond Buyer General Obligation 20-year Municipal Bond Index published weekly by The Bond Buyer. Changes in the Total OPEB Liability Total OPEB Liability Balance at July 1, 2018 41,697,873$ Changes for the year: Service cost 1,785,472 Interest 1,474,116 Differences between expect and actual experience (115,643) Changes in assumptions or other inputs (2,557,585) Benefit payments (585,371) Net changes 989 Balance at June 30, 2019 41,698,862$ 74 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 Changes in assumptions and other inputs reflect a change in the discount rate from 3.56% to 3.89%. Mortality rates were based on the RP-2014 mortality tables, with adjustments for LGERS experience and generational mortality improvements using Scale MP-2015. The actuarial assumptions used in the June 30, 2017 valuation were based on a review of recent plan experience done concurrently with the June 30, 2017 valuation. Sensitivity of 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 (3.89 percent) or 1-percentage-point higher (4.89 percent) than the current discount rate: Current 1%Discount 1% Decrease Rate Increase (2.89%)(3.89%)(4.89%) Total OPEB liability 50,172,803$ 41,698,862$ 35,117,610$ Sensitivity of the Total OPEB Liability to Changes in the Healthcare Cost Trend Rates. 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 r ates that are 1-percentage-point lower or 1-percentage-point higher than the current healthcare cost trend rates: 1%1% Decrease Current Increase Total OPEB liability 34,353,685$ 41,698,862$ 51,500,546$ 75 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB For the year ended June 30, 2019, the City recognized OPEB expense of $2,355,909. At June 30, 2019, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB form the following sources: Deferred Deferred Outflows of Inflows of Resources Resources Differences between expected and actual experience -$ 254,161$ Changes of assumptions - 5,683,289 Benefit payments and administrative costs made subsequent to the measurement date 585,368 - Total 585,368$ 5,937,450$ $585,368 reported as deferred outflows of resources related to OPEB resulting from benefit payments made subsequent to the measurement date will be recognized as a decrease of the total OPEB liability in the year ended June 30, 2020. Other amounts reported as deferred inflows or outflows of resources related to pensions will be recognized in pension expense as follows: Year Ending June 30 Amount 2019 (903,679)$ 2020 (903,679) 2021 (903,679) 2022 (903,679) 2023 (903,679) Thereafter (1,419,055) Total (5,937,450)$ 3. Other Employment Benefits The City elected to provide death benefits to employees through the Death Benefit Plan for members of the Local Governmental Employees' Retirement System (Death Benefit Plan), a multiple-employer, State-administered, cost-sharing plan funded on a one-year term cost basis. The beneficiaries of those employees who die in active service after one year of contributing membership in the System, or who die within 180 days after retirement or termination of service and have at least one year of contributing membership service in the System at the time of death are eligible for death benefits. Lump -sum death benefit payments to beneficiaries are equal to the employee's 12 highest months’ salary in a row during the 24 months prior to the employee's death, but the benefit may not exceed $50,000 or be less than $25,000. All death benefit payments are made from the Death Benefit Plan and not by the City; the City does not determine the number of eligible participants. The City has no 76 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 liability beyond the payment of monthly contributions. The City of Monroe’s contractually required contribution rate for the year ended June 30, 2019 was 0.06% of compensation for general employees and firefighters. The contributions to the Death Benefit Plan cannot be separated between the post-employment benefit amount and the other benefit amount. Contributions are determined as a percentage of monthly payroll, based upon rates established annually by the State. Separate rates are set for employees not engaged in law enforcement and for law enforcement officers. The City considers these contributions to be immaterial. 4. Deferred Outflows and Inflows of Resources Deferred outflows of resources at year-end are comprised of the following: Deferred Outflows Charge on debt defeasance 4,300,212$ OPEB deferrals 585,368 Pension deferrals 7,638,380 Total 12,523,960$ Deferred inflows of resources at year-end are comprised of the following: Deferred Inflows Property taxes receivable: General 634,946$ Nonmajor governmental 2,256 Privilege license receivable: General 75 Code enforcement liens receivable: General 301,251 Prepaid taxes, agreements, gift cards, donations, and store credits, not yet earned: General 11,922 OPEB deferrals 5,937,450 Pension deferrals 400,940 Total 7,288,840$ 77 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 5. Construction and Other Significant Commitments Construction Commitments The government has active construction projects as of June 30, 2019. At year-end, the government's commitments with contractors are as follows: Spent Remaining Projects To-Date Commitment Governmental: Capital projects 4,364,886$ 4,146,955$ Occupancy tax 2,104,048 2,228,347 Enterprise: Water and Sewer 7,352,276 1,360,123 Stormwater 300,484 66,300 Electric 1,006,284 113,875 Natural Gas 8,555,650 2,303,761 Airport 4,611,864 1,751,310 Total 28,295,492$ 11,970,671$ Interlocal Agreement On December 5, 2005, the City entered into an agreement with Union County, which provided 1.99 MGD of additional water capacity to the City. Under the agreement terms, the City will pay fixed costs of approximately $199,176 annually for 20 years beginning July 1, 2006, with one lump-sum payment of $1,739,243, which was paid April 30, 2014. Operations and maintenance cost are paid based on a per thousand-gallon rate calculated each budget year and based on actual metered consumption. This agreement term is of perpetual duration. This agreement also provides 2.65 MGD of wastewater capacity to Union County via the City WWTP to serve Union County’s eastside customers. 78 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 Encumbrances Encumbrance accounting is utilized to the extent necessary to assure effective budgetary control and accountability and to facilitate effective cash planning and control. At June 30, 2019 the amount of encumbrances expected to be honored upon performance by the vendor in the next year were as follows: Governmental Activities: General Fund 2,505,709$ Nonmajor funds 6,403,575 Total governmental activities 8,909,284$ Business-Type Activities: Water and Sewer Fund 2,267,804$ Electric Fund 690,126 Natural Gas Fund 2,373,481 Airport Fund 1,751,836 Nonmajor funds 346,032 Total business-type activities 7,429,279$ 6. 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. The City is self-funded with regard to group health and workers’ compensation insurance coverages. There have been no significant reductions in insurance coverage from the prior year, and settled claims have not exceeded coverage in any of the past three fiscal years. A liability for a claim is established if information indicates that it i s probable that a liability has been incurred at the date of the financial statements, and the amount of the loss is reasonably estimable. Liabilities include an amount for claims that have been incurred, but not reported (IBNRs). The result of the process to estimate the claims liability is not an exact amount as it depends on many complex factors, such as inflation, changes in legal doctrines, and damage awards. Accordingly, claims are reevaluated periodically to consider the effects of inflation, recent claim settlement trends (including frequency and amount of pay outs), and other economic and social factors. The estimate of the claims liability also includes amounts for incremental claim adjustment expenses related to specific claims and other claim adjustment expenses regardless of whether allocated to specific claims. Flood Insurance The City carries flood insurance for properties located in Flood Zones B, C and X through participation in the North Carolina League of Municipalities Interlocal Risk Financing Fund of North Carolina. The City does not have properties of significant value in these Flood Zones. 79 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 Self-Funded Insurance The City has established three internal service funds to account for self -insured risk financing. Funding of the Health Benefit Fund is based upon an analysis of historical and projected medical and dental claims paid by the third-party administrator and the availability of unrestricted net position to fund projected claims. Funding of the Workers’ Compensation Fund is based upon payroll rates established by the State of North Carolina and the availability of unrestricted net position to fund projected claims. Funding of the Property and Casualty Fund is based upon experience and exposure risks associated with City operations and the availability of unrestricted net position to fund projected claims. Group Health Insurance Effective July 1, 2002, the City established an employee medical benefit plan to self-insure claims up to $70,000 per year for each individual covered; claims above $70,000 and aggregate claims exceeding 125% of expected incurred and paid claims are covered by a stop/loss insurance policy. Workers’ Compensation Insurance The City has a self-funded workers’ compensation insurance plan. Through this plan, the City has workers’ compensation coverage of up to the statutory limits. The self -insurance plan has a $550,000 retained risk per occurrence with a $2,000,000 aggregate limit for all employees. The City also carries employer’s liability coverage with similar retention and limit amounts. Due to the degree of turnover of the outstanding claims, the claims payable as of June 30, 2019 are considered to be current liabilities. Changes in the balance of claims liabilities during the year ended June 30, 2019 are as follows: Health Workers' Property and Benefit Compensation Casualty Fund Fund Fund Unpaid claims as of June 30, 2017 428,343$ 10,000$ -$ Claims and premiums paid 7,252,837 166,032 662,502 Incurred claims and premiums (7,241,534) (166,032) (614,960) Unpaid claims as of June 30, 2018 439,646 10,000 47,542 Claims and premiums paid 8,240,623 165,410 631,885 Incurred claims and premiums (8,260,976) (162,065) (673,081) Unpaid claims as of June 30, 2019 419,293$ 13,345$ 6,346$ The City protects itself from potential loss through participation in the North Carolina League of Municipalities Interlocal Risk Financing Fund of North Carolina for general liability, automobile liability, public officials and law enforcement liability. The City maintains coverage of $5,000,000 for comprehensive general liability, automobile liability, public 80 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 officials and law enforcement liability. The City’s potential loss for liability coverage is limited to the deductible amount of $50,000 per claim for all coverage, except for real and personal property, which has a deductible of $25,000 per claim. 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 $250,000 each. The remaining employees that have access to funds are bonded under a blanket bond for $250,000. The City of Monroe ABC Board is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; and natural disasters. The ABC Board has commercial property, general liability, automobile liability, workers’ compensation, and employee health coverage. The ABC Board also has liquor legal liability coverage. There have been no significant reductions in insurance coverage from the prior year, and settled claims have not exceeded coverage in any of the past three fiscal years. In accordance with G.S. 18B-700(i), each Board member and the employees designated as the General Manager and Finance Officer are bonded in the amount of $50,000 secured by a corporate surety. The Tourism Development Authority is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; and natural disasters. The Authority does not carry commercial insurance to cover these risks of loss. The City’s insurance coverage for these risks also covers the Authority. The Authority does not car ry flood insurance. In accordance with G.S. 159-29, the Finance Officer for the Authority is individually bonded for $50,000. All risk management activities are reported in the Authority’s General Fund. Claims expenditures and liabilities are reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. Based on available information, the Authority had no liability claims at June 30, 2019. 7. Claims, Judgments, and Contingent Liabilities The City was a defendant in various matters of litigation as of June 30, 2019. While any litigation contains an element of uncertainty, City officials believe that the outcome of any lawsuit or claim which is pending, or all of them combined, will not have a materially adverse effect on the City’s financial condition or operations. In addition, there are known incidents that may result in the assertion of claims, as well as claims from unknown incidents that may be asserted for which the City could be liable for a material amount. However, since such claims have not been asserted and are not determinable or measurable, no provision for loss has been included in the financial statements. Also, City officials believe the City’s insurance is adequate for the actual or pending lawsuits or claims mentioned above. 81 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 8. Long-Term Obligations a. Installment Purchase Obligations The City has entered into various installment purchase obligations to acquire certain equipment and to finance building improvements: Governmental Enterprise Funds Funds Total $1,036,000 Executed August 12, 2004, to finance construction of a street maintenance building, requiring 30 semi-annual installments of $34,533, plus interest at 3.89%. The street maintenance building is pledged as collateral for the debt.34,534$ -$ 34,534$ $2,391,720 Executed January 30, 2009, to finance construction of a recreation center and a gymnasium, requiring 30 semi-annual installments of $79,724, plus interest. Interest Rate Modified June 2013 to 2.67%. The recreation center and the gymnasium are pledged as collateral for the debt.797,240 - 797,240 $76,262 Executed July 16, 2014 with a vendor, to finance computer equipment, requiring 59 monthly installments of $1,376, including interest at 2.63%. The computer equipment is pledged as collateral for the debt.1,372 - 1,372 $4,400,000 Executed September 17, 2014 with a bank, to finance the design, construction and furnishing of a fire station, requiring 20 semi-annual installments of $220,000, plus interest at 2.1%. The fire station is pledged as collateral for the debt.2,420,000 - 2,420,000 $1,788,000 Executed May 9, 2017 with a bank, to finance fire trucks requiring 10 annual installments ranging from $165,000 to $196,000, plus interest at 2.1532%. The fire trucks are pledged as collateral for the debt.1,457,000 - 1,457,000 $2,123,000 Executed May 8, 2018 with a bank, to finance fire trucks and street sweepers requiring 10 annual installments ranging from $163,000 to $266,000, plus interest at 2.74%. The fire trucks and street sweepers are pledged as collateral for the debt.1,473,000 413,000 1,886,000 $635,000 Executed May 7, 2019 with a bank, to finance a fire truck requiring 10 annual installments ranging from $56,000 to $71,000 plus interest at 3.0462%. The fire truck is pledged as collateral for the debt.635,000 - 635,000 Total 6,818,146$ 413,000$ 7,231,146$ 82 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 The City’s outstanding note from direct placements related to governmental activities of $34,534 is secured by the street maintenance building. Upon the failure to pay or make timely payments, the lender may declare all installment payments payable by purchaser pursuant to the agreement to be due. Upon default the lender shall proceed by appropriate court action and take possession of the property. The City’s outstanding note from direct placements related to governmental activities of $797,240 is secured by the recreation center and gymnasium. Upon the failure to pay or make timely payments, the lender may declare all installment payments payable by purchaser pursuant to the agreement to be due. Upon default the lender shall proceed by appropriate court action and take possession of the property. The lender may at its option require immediate payment in full of the required payments and amount advanced and all other sums secured by the agreement. The City’s outstanding note from direct placements related to governmental activities of $1,372 is secured by the computer equipment. Upon the failure to pay or make timely payments, the lessor may retake possession of the equipment. The City’s outstanding note from direct placements related to governmental activities of $2,420,000 is secured by the fire station. Upon the failure to pay or make timely payments, the bank shall declare the unpaid portion of the outstanding principal components of the installment payments immediately due and payable. Upon default the bank shall proceed by appropriate court action and take possession of the mortgaged property. The City’s outstanding note from direct placements related to governmental activities of $1,457,000 is secured by the fire trucks. Upon the failure to pay or make timely payments, the lender may declare all installment payments payable by purchaser pursuant to the agreement to be due. Upon default the lender shall proceed by appropriate court action and take possession of the property. The City’s outstanding note from direct placements related to governmental activities of $1,473,000 and business-type activities of $413,000 is secured by the fire trucks and street sweepers. Upon the failure to pay or make timely payments, the lender may declare all installment payments payable by purchaser pursuant to the agreement to be due. Upon default the lender shall proceed by appropriate court action and take possession of the property. The City’s outstanding note from direct placements related to governmental activities of $635,000 is secured by the fire truck. Upon the failure to pay or make timely payments, the lessor may retake possession of the equipment, hold the lessee liable for the difference between the rents payable and the rent paid by the lessee, and take whatever action at law that may appear necessary. 83 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 Annual debt service payments of the installment purchase obligations as of June 30, 2019 are as follows: Year Ending June 30 Principal Interest Principal Interest 2020 1,005,355$ 162,662$ 99,000$ 12,581$ 2021 978,448 139,286 101,000 9,565 2022 988,448 115,957 105,000 6,488 2023 998,448 92,363 108,000 3,290 2024 1,008,447 68,505 - - 2025-2029 1,839,000 110,082 - - Total 6,818,146$ 413,000$ Total interest payments 688,855$ 31,924$ Governmental Activities Business-Type Activities At June 30, 2019, the City had a legal debt margin of $236,692,002. b. Revenue Bonds The City also issues bonds where it pledges income derived from the acquired or constructed assets to pay debt service. Revenue bonds outstanding at year-end are as follows: Serviced by the Water and Sewer Fund, Electric Fund, Airport Fund, and Natural Gas Fund: $19,620,000 of Combined Enterprise System Revenue Refunding Bonds, Series 2011, due annually in amounts ranging from $945,000 to $1,460,000 through March 1, 2028, interest rate varying between 2.0% and 5.0%. The amount shown includes $287,754 in unamortized bond premiums associated with the bonds.8,632,754$ On August 11, 2016, the City issued $20,660,000 in Combined Enterprise System Revenue Bonds, Series 2016 to advance refund a portion of the Series 2008A Revenue Bonds. These 17-year bonds have interest rates varying between 2% and 5%. The total shown is net of the unamortized bond premium of $3,202,460 associated with the bonds.22,852,460 On December 21, 2017, the City issued $12,500,000 in Combined Enterprise System Revenue Bonds, Series 2017 to fund improvements to the City's water, sewer, and airport systems. These 25-year bonds have interest rates varying between 3.125% and 5%. The total shown is net of the unamortized bond premium of $1,613,976 associated with the bonds.13,838,976 Total 45,324,190$ The revenue bonds are secured by pledged water and sewer, electric, airport, and natural gas customer revenues, net of specified operating expenses to repay revenue bonds. In 84 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 the event of a default, the City agrees to pay to the purchaser, on demand, interest on any and all amounts due and owing by the City under the related agreements. The future payments of the revenue bonds for the years ending June 30 , 2019 are as follows: Year Ending June 30 Principal Interest 2020 2,275,000$ 1,796,056$ 2021 2,360,000 1,714,456 2022 2,465,000 1,606,156 2023 2,575,000 1,492,956 2024 2,380,000 1,400,356 2025-2029 12,580,000 5,312,419 2030-2034 9,440,000 2,567,769 2035-2039 3,100,000 1,191,988 2040-2043 3,045,000 390,250 Total 40,220,000$ 17,472,406$ Business-Type Activities The future payments as presented above have not been reduced by the net of unamortized bond premiums totaling $5,104,190. The City has been in compliance with the covenants as to rates, fees, rentals, and charges in Section 704 of the Bond Order Authorizing the Issuance of Combined Enterprise System Revenue Bonds (Bond Order) since its adoption on May 3, 1994. Section 704(a) of the Bond Order requires the debt service coverage ratio to be no less than 125% parity indebtedness and 100% of the long-term debt service requirement for subordinated indebtedness for the fiscal year. The debt service coverage ratio calculation for the year ended June 30, 2019, is as follows: Operating revenues 102,683,827$ Operating expenses (1)73,926,338 Operating income 28,757,489 Non-operating revenues (2)7,632,126 Income available for debt service 36,389,615 Parity debt service 5,427,647 Debt service coverage ratio 670% Income available for debt service 36,389,615 Subordinated debt service 7,938,453 Debt service coverage ratio 458% (1) Per rate covenants, this does not include the depreciation and amortization expense of $8,134,175. (2) Per rate covenants, this includes investment earnings only. 85 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 The City has pledged future water and sewer, electric, airport, and natural gas customer revenues, net of specified operating expenses, to repay $52.8 million in revenue bonds issued in 2008 and 2011. Proceeds from the bonds provided financing for various capital projects and refunded prior issues. The bonds are payable solely from the revenue sources of the enterprise funds noted above and are payable through 2033. Annual principal and interest payments on the bonds are expected to require less than 5% of net revenues. The total principal and interest remaining to be paid on the bonds is $57,692,406. Principal and interest paid for the current year and total customer net revenues were $4,775,656 and $101.9 million, respectively. c. State Revolving Loans The City has entered into a state revolving loan to finance water and sewer improvements. This state revolving loan is being serviced by revenues from the Water and Sewer Fund: Loan payable to the State of North Carolina Water Pollution Control Revolving Fund with a maximum limit of $9,622,065, payable over 20 years, with interest at 2.22% 7,216,549$ The City’s outstanding notes from direct borrowings related to business-type activities are not secured by a pledge of the faith and credit of the State of North Carolina or of the City, but is payable solely from the revenues of the Project or benefited systems, or other available funds. The notes contain provisions that an event of default would result in any other monies due to the City from the State may be withheld by the State and applied to the payment of the outstanding note. Annual debt service requirements to maturity for the state revolving loans are as follows: Year Ending June 30 Principal Interest 2020 481,103$ 160,207$ 2021 481,103 149,527 2022 481,103 138,846 2023 481,103 128,166 2024 481,103 117,485 2025-2029 2,405,516 427,220 2030-2034 2,405,518 160,208 Total 7,216,549$ 1,281,659$ Business-Type Activities 86 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 d. Limited Obligation Bonds On April 14, 2016, the City issued $27,045,000 in Limited Obligation Bonds (LOBS) to refund the Certificates of Participation used to finance the construction of natural gas improvements. These 23-year LOBS have interest rates varying between 2% and 5%. Although any source of funds legally available may be used, the bonds are serviced by Natural Gas system revenues. The portion of the natural gas pipeline that is located in Union County is pledged as collateral for the debt. The total is shown net of the unamortized bond premium of $2,756,262 associated with the bonds.29,501,262$ On February 28, 2018, the City issued $8,280,000 in Limited Obligation Bonds, Series 2018 to fund improvements to the City's natural gas system. These 25-year bonds have interest rates varying between 3% and 5%. Although any source of funds legally available may be used, the bonds are serviced by Natural Gas system revenues. The portion of the natural gas pipeline that is located in Union County is pledged as collateral for the debt. The total shown is net of the unamortized bond premium of $181,361 associated with the bonds.8,266,361 On October 10, 2018, the City issued $7,785,000 in Limited Obligation Bonds, Series 2018B to fund the construction of the Monroe Science Center and Center Theatre. These 20-year bonds have interest rates varying between 3% and 5%. Although any source of funds legally available may be used, the bonds are serviced from the General Fund and the Occupancy Tax Capital Project Fund. The Center Theatre is pledged as collateral for the debt. The total shown is net of the unamortized bond premium of $411,488 associated with the bonds.8,196,488 Total 45,964,111$ In the event of a default, the City agrees to pay to the purchaser, on demand, interest on any and all amounts due and owing by the City under the related agreements. Year Ending June 30 Principal Interest 2020 1,405,000$ 1,764,350$ 2021 1,445,000 1,708,150 2022 1,495,000 1,650,350 2023 1,560,000 1,577,800 2024 1,605,000 1,519,500 2025-2029 9,140,000 6,321,000 2030-2034 11,075,000 4,152,031 2035-2039 13,030,000 1,994,138 2040-2043 1,860,000 165,175 Total 42,615,000$ 20,852,494$ Business-Type Activities 87 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 The future payments presented above have not been adjusted by the net of unamortized bond premiums of $3,349,111. e. Advance Refunding On August 11, 2016, the City issued Combined Enterprise System Revenue Refunding Bonds to provide resources to purchase U.S. government securities that were placed in an irrevocable trust to be used for future debt service payments of $20,660,000 of revenue bonds. As a result, a portion of the Combined Enterprise System Revenue Bonds, Series 2008A are considered to be defeased and a portion of the liability has been removed from the governmental activities column of the statement of net position. The reacquisition price exceeded the net carrying amount of the old debt by $1,212,041. This amount is being netted against the new debt and amortized over the life of the refunded debt. This advance refunding was undertaken to reduce total debt service payments over the next 17 years by $3,573,013 and resulted in an economic gain of $3,288,671. On June 30, 2019, $21,745,000 of bonds outstanding are considered defeased. On April 14, 2016, the City issued Limited Obligation advance refunding bonds to provide resources to purchase U.S. government securities that were placed in an irrevocable trust to be used for future debt service payments of $26,535,000 of certificates of participation. As a result, a portion of the certificates of particip ation are considered to be defeased and a portion of the liability has been removed from the governmental activities column of the statement of net position. The reacquisition price exceeded the net carrying amount of the old debt by $3,619,392. This amount is being netted against the new debt and amortized over the life of the refunded debt. This advance refunding was undertaken to reduce total debt service payments over the next 23 years by $4,514,919 and resulted in an economic gain of $4,193,750. On June 30, 2019, $26,535,000 of bonds outstanding are considered defeased. On June 30, 2011, the City issued Combined Enterprise System Revenue Refunding Bonds to provide resources to purchase U.S. government securities that were placed in an irrevocable trust to provide for future debt service payments of $20,015,000. As a result, a portion of the Combined Enterprise System Revenue Bonds, Series 1998 and Series 2008B are considered to be defeased and a portion of the liability has been removed from the governmental activities column of the statement of net position. The reacquisition price exceeded the net carrying amount of the old debt by $564,153. This amount is being netted against the new debt and amortized over the life of the refunded debt. This advance refunding was undertaken to reduce total debt service payments over the next 17 years by $1,618,743 and resulted in an economic gain of $1,264,016. On June 30, 2019, $8,835,000 of bonds outstanding are considered defeased. 88 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 f. Changes in Long-Term Liabilities Current Balance Balance Portion of June 30, 2019 Increases Decreases June 30, 2019 Balance Governmental Activities: General and Parks and Recreation Fund: Direct placement installment purchasing obligations 7,348,694$ 635,000$ 1,165,548$ 6,818,146$ 1,005,355$ Compensated absences 2,319,866 1,273,906 1,040,011 2,553,761 1,711,020 Total pension liability (LEOSSA)4,075,929 253,197 172,953 4,156,173 - Net pension liability (LGERS)4,101,134 2,255,520 - 6,356,654 - Total OPEB liability 28,784,042 405,446 404,764 28,784,724 - Limited obligation bonds - 4,310,000 - 4,310,000 220,000 Less unamortized premiums - 255,127 12,149 242,978 12,149 Total limited obligation bonds - 4,565,127 12,149 4,552,978 232,149 Golf Course: Compensated absences 35,349 25,618 20,671 40,296 26,999 Total OPEB liability 104,244 1,469 1,466 104,247 - Occupancy Tax Fund: Limited obligation bonds - 3,475,000 - 3,475,000 115,000 Less unamortized premiums - 176,936 8,426 168,510 8,426 Total limited obligation bonds - 3,651,936 8,426 3,643,510 123,426 Total governmental activities 46,769,258$ 13,067,219$ 2,825,988$ 57,010,489$ 3,098,949$ Business-Type Activities: Water and Sewer Fund: Compensated absences 337,219$ 171,947$ 195,551$ 313,615$ 210,122$ Net pension liability (LGERS)763,415 419,859 - 1,183,274 - Total OPEB liability 5,387,365 75,886 75,758 5,387,493 - Revenue bonds 15,499,501 - 900,589 14,598,912 666,135 Plus bond premium 2,155,625 - 114,168 2,041,457 124,691 Total revenue bonds 17,655,126 - 1,014,757 16,640,369 790,826 Direct borrowing State revolving loans 7,697,652 - 481,103 7,216,549 481,103 Total Water and Sewer Fund 31,840,777$ 667,692$ 1,767,169$ 30,741,300$ 1,482,051$ Electric Fund: Compensated absences 228,806$ 224,918$ 168,579$ 285,145$ 191,047$ Net pension liability (LGERS)331,405 182,264 - 513,669 - Total OPEB liability 2,351,760 33,127 33,071 2,351,816 - Revenue bonds 14,993,017 - 1,008,400 13,984,617 747,270 Plus bond premium 2,453,120 - 173,928 2,279,192 162,799 Total revenue bonds 17,446,137 - 1,182,328 16,263,809 910,069 Total Electric Fund 20,358,108$ 440,309$ 1,383,978$ 19,414,439$ 1,101,116$ 89 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 Current Balance Balance Portion of June 30, 2019 Increases Decreases June 30, 2019 Balance Natural Gas Fund: Compensated absences 103,295$ 92,989$ 65,339$ 130,945$ 87,733$ Total OPEB liability 1,192,559 16,799 16,770 1,192,588 - Net pension liability (LGERS)171,621 94,387 - 266,008 - Certificates of participation 780,000 - 780,000 - - Total certificates of participation 780,000 - 780,000 - - Limited obligation bonds 35,080,000 - 250,000 34,830,000 1,070,000 Plus bond premium 3,082,992 - 145,369 2,937,623 145,369 Total limited obligation bonds 38,162,992 - 395,369 37,767,623 1,215,369 Revenue bonds 2,582,482 - 245,911 2,336,571 124,855 Plus bond premium 412,807 - 32,034 380,773 27,198 Total revenue bonds 2,995,289 - 277,945 2,717,344 152,053 Total Natural Gas Fund 43,405,756$ 204,175$ 1,535,423$ 42,074,508$ 1,455,155$ Airport Fund: Compensated absences 31,430$ 23,204$ 23,763$ 30,871$ 20,683$ Net pension liability (LGERS)142,030 78,113 - 220,143 - Total OPEB liability 996,580 14,037 14,014 996,603 - Revenue bonds 10,010,000 - 710,100 9,299,900 736,740 Plus bond premium 446,234 - 43,466 402,768 38,447 Total revenue bonds 10,456,234 - 753,566 9,702,668 775,187 Total Airport Fund 11,626,274$ 115,354$ 791,343$ 10,950,285$ 795,870$ Aquatics and Fitness Center Fund: Compensated absences 106,227$ 38,498$ 40,493$ 104,232$ 69,836$ Net pension liability (LGERS)278,143 152,972 - 431,115 - Total OPEB liability 1,963,970 27,663 27,617 1,964,016 - Total Aquatics and Fitness Center Fund 2,348,340$ 219,133$ 68,110$ 2,499,363$ 69,836$ Stormwater Fund: Compensated absences 53,809$ 41,360$ 46,802$ 48,367$ 32,406$ Net pension liability (LGERS)124,277 68,349 - 192,626 - Total OPEB liability 858,976 12,100 12,079 858,997 - Direct placement installment purchasing obligations 509,000 - 96,000 413,000 99,000 Total Stormwater Fund 1,546,062$ 121,809$ 154,881$ 1,512,990$ 131,406$ 90 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 Current Balance Balance Portion of June 30, 2019 Increases Decreases June 30, 2019 Balance Solid Waste Fund: Compensated absences 4,557$ 5,252$ 2,771$ 7,038$ 4,716$ Net pension liability (LGERS)5,918 3,255 - 9,173 - Total OPEB liability 58,377 823 822 58,378 - Total Solid Waste Fund 68,852$ 9,330$ 3,593$ 74,589$ 4,716$ Total business-type activities 111,194,169$ 1,777,802$ 5,704,497$ 107,267,474$ 5,040,150$ For governmental activities, compensated absences, net pension obligation, and other post - employment benefit liabilities are liquidated by the General Fund. For business-type activities, compensated absences, and other post-employment benefit liabilities are liquidated by the respective business-type fund. C. Interfund Balances and Activity Interfund balances at June 30, 2019 consist of the following: Due to General Fund Airport Fund Total Electric Fund 1,247,870$ 803,777$ 2,051,647$ The balance of $1,247,870 due to the Electric Fund from the General Fund resulted from financing of the Propel, Allvac and ATI Specialty Materials land for economic development incentives. One promissory note is for $1,494,020, payable annually over 15 years with interest accruing at 3.69%. The other promissory note is for $1,058,562, payable annually over 15 years with interest accruing at 2.84%. The current portion of this note is $180,567 and the balance of $1,067,303 is not scheduled to be collected in the subsequent year. The balance of $803,777 due to the Electric fund from the Airport fund resulted from financing of a bulk airplane storage hangar. The promissory note is payable in 20 equal annual installments of $60,265 with interest accruing at 2.84%. The current portion of this note is $37,438 and the balance of $766,339 is not scheduled to be collected in the subsequent year. Balances due to/from component units at June 30, 2019 consist of the following: Due to the Primary Government: Monroe Tourism Development Authority 17,979$ Monroe ABC Board 29,266$ 91 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 Transfers to/from other funds at June 30, 2019 consist of the following: From the General Fund to the Airport Fund for current operating needs 1,785,261$ From the Downtown Monroe Fund to the General Fund for repayment of Downtown Pioneer loans 82,265 From the General Fund to the Monroe-Union County Economic Development Special Revenue Fund for county-wide economic development 309,000 From the Airport Capital Projects Fund to the General Fund to close projects 132,147 From the Capital Projects Fund to the General Fund to close projects 19,139 From the General Fund to the Governmental Capital Reserve for future Greenway Project (year 6 of 6)100,000 From the Electric Fund to the General Fund for payment in lieu of taxes 547,152 From the Natural Gas Fund to the General Fund for payment in lieu of taxes 155,593 From the General Fund to the Downtown Monroe Fund for general operations, a downtown incentive grant and a loan for the Buggy factory 505,290 From the General Fund to the Capital Projects Fund for various projects 1,737,237 From the Water and Sewer Fund to the Capital Projects Fund for the Operations Center Paving Project 17,409 From the Electric Fund to the Capital Projects Fund for the Operations Center Paving Project 17,409 From the Natural Gas Fund to the Electric Capital Projects Fund for Energy Services Building additional offices 25,000 92 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 V. Jointly Governed Organizations The City, in conjunction with eighteen other local governments, is a member of the North Carolina Municipal Power Agency Number 1 (Agency). The Agency was formed to enable municipalities that own electric distribution systems to finance, construct, own, oper ate, and maintain generation and transmission facilities. Each participating government appoints one commissioner to the Agency’s governing board. The nineteen members, which receive power from the Agency, have signed power sales agreements to purchase a specified share of the power generated by the Agency. Except for the power sales purchase requirements, no local government participant has any obligation, entitlement, or residual interest. The City’s purchases of power for the fiscal year ended June 30, 2019 were $46,327,279. Also, the City, in conjunction with nine Central North Carolina counties and sixty-six other municipalities established the Centralina Council of Governments (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 fees of $8,408 to the Council during the fiscal year ended June 30, 2019. VI. Joint Venture The City has entered into a joint venture agreement with Public Service Company of North Carolina, Incorporated, a South Carolina corporation d/b/a PSNC Energy (“PSNC”). The City has installed natural gas pipeline, a control station, an emergency connector, various valves and electronic data control equipment in Iredell and Cabarrus Counties which is located in PSNC’s service area. These facilities will be “joint facilities” to be owned by the City. The City will be responsible for providing all operation, maintenance, inspection, and repair of the joint facilities. PSNC has agreed to reimburse the City for 25% of the total cost of operation and maintenance. This reimbursement is equal to PSNC’s right to 25% of the capacity in the joint facilities in Ca barrus and Iredell counties. PSNC files SCANA’s annual SEC Form 10-K with the North Carolina Utilities Commission. A full copy of this report can be obtained from the Commission’s website in Docket No. G-5, Sub 400A or on SCANA’s website at: http://www.scana.com/en/investor-relations/financial-reports/. In addition, PSNC’s financial statements can be found on PSNC’s website at: http://www.psncenergy.com/ en/financial statements/. VII. Related Organization The seven-member Board of the Monroe Housing Authority is appointed by the City Council and Mayor of the City of Monroe. 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. The City of Monroe is also disclosed as a related organization in the notes to the financial statements for the Monroe Housing Authority. Complete financial statements for the Housing Authority can be obtained from the Authority’s offices at Post Office Box 805, Monroe, North Carolina 28111. 93 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 VIII. Related Party Transactions The City and its discretely presented component units engaged in the following transactions during the year ended June 30, 2019: City of Monroe ABC Board: Payments to the City for profit distributions 214,266$ Payments to the City for law enforcement 74,301 Total 288,567$ Monroe Tourism Development Authority: Payments of a pro-rata portion of the occupancy tax by the City to the Authority 618,903$ Payment by the Authority to the City for the Occupancy Tax Project 206,301$ IX. Fund Balance The following schedule provides management and citizens with information on the portion of General Fund balance that is available for appropriation: Total fund balance - General Fund 33,447,223$ Less: Inventories 199,218 Prepaids 656,895 Stabilization by state statute 6,450,041 Public safety 707,074 Culture and recreation 80,220 Powell Bill reserves 1,641,615 Minimum fund balance requirement 10,681,100 Airport grant acceptance 456,815 Airport operations - 5-year subsidy 750,000 Street resurfacing - 5-year program 900,000 Subsequent year's expenditures 2,755,544 Remaining fund balance 8,168,701$ 94 CITY OF MONROE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2019 X. Summary Disclosures of Significant Contingencies Federal and State-Assisted Programs The City has received proceeds from several federal and state grants. Periodic audits of these grants are required, and certain costs may be questioned as not being appropriate expenditures under the grant agreements. Such audits could result in the refund of grant monies to the grantor agencies. Management believes that any required refunds will be immaterial. No provision has been made in the accompanying financial statements for the refund of grant monies. 95                       96 Required Supplementary Information  Law Enforcement Officers’ Special Separation Allowance Schedule of Changes in Total Pension Liability  Law Enforcement Officers’ Special Separation Allowance Schedule of Total Pension Liability as a Percentage of Covered Payroll  Other Post-Employment Benefits Schedule of Changes in the Total OPEB Liability and Related Ratios  Local Government Employees’ Retirement System City of Monroe’s Proportionate Share of Net Pension Liability (Asset)- Last Six Fiscal Years  Local Government Employees’ Retirement System City of Monroe’s Contributions- Last Six Fiscal Years 97 CITY OF MONROE, NORTH CAROLINA SCHEDULE OF CHANGES IN TOTAL PENSION LIABILITY LAW ENFORCEMENT OFFICERS' SPECIAL SEPARATION ALLOWANCE LAST THREE FISCAL YEARS* 2019 2018 2017 Beginning balance 4,075,929$ 3,592,717$ 3,520,979$ Service cost 162,022 140,123 144,779 Interest on the total pension liability 126,067 135,710 123,698 Differences between expected and actual experience in the measurement of the total pension liability 116,892 134,370 - Changes of assumptions or other inputs (151,784) 226,817 (84,642) Benefit payments (172,953) (153,808) (112,097) Ending balance of the total pension liability 4,156,173$ 4,075,929$ 3,592,717$ The amounts presented for each fiscal year were determined as of the prior December 31. *Pension schedules are intended to show information for ten years, additional years' information will be displayed as it comes available. Law Enforcement Officers' Special Separation Allowance 98 CITY OF MONROE, NORTH CAROLINA SCHEDULE OF TOTAL PENSION LIABILITY AS A PERCENTAGE OF COVERED PAYROLL LAW ENFORCEMENT OFFICERS' SPECIAL SEPARATION ALLOWANCE LAST THREE FISCAL YEARS* 2019 2018 2017 Total pension liability 4,156,173$ 4,075,929$ 3,592,717$ Covered payroll 5,171,410 5,106,289 4,986,204 Total pension liability as a percentage of covered payroll 80.37% 79.82% 72.05% Notes to the Schedules: The City of Monroe has no assets accumulated in a trust that meets the criteria in paragraph 4 of GASB Statement 73 to pay related benefits. *Pension schedules are intended to show information for ten years, additional years' information will be displayed as it comes available. Law Enforcement Officers' Special Separation Allowance 99 CITY OF MONROE, NORTH CAROLINA OTHER POST-EMPLOYMENT BENEFITS REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN THE TOTAL OPEB LIABILITY AND RELATED RATIOS LAST TWO FISCAL YEARS* 2019 2018 Service cost 1,785,472$ 2,039,080$ Interest 1,474,116 1,304,239 Differences between expected and actual experience (115,643) (201,752) Changes of assumptions or other inputs (2,557,585) (4,544,221) Benefit payments (585,371) (455,985) Net change in total OPEB liability 989 (1,858,639) Total OPEB liability - beginning 41,697,873 43,556,512 Total OPEB liability - ending 41,698,862$ 41,697,873$ Covered payroll 22,116,108$ 22,116,108$ Total OPEB liability as a percentage of covered payroll 188.55% 188.54% Notes to the Required Schedules: Changes of assumptions: Changes of assumptions and other inputs reflect the effects of changes in the discount rate of each period. The following are the discount rates used in each period: Fiscal Year Rate 2019 3.89% 2018 3.56% Information is not required to be presented retroactively. This schedule will not present 10 years' worth of information until fiscal year 2027. Other Post-Employment Benefits 100 CITY OF MONROE, NORTH CAROLINA CITY OF MONROE'S PROPORTIONATE SHARE OF NET PENSION LIABILITY (ASSET) REQUIRED SUPPLEMENTARY INFORMATION LAST SIX FISCAL YEARS* 2019 2018 2017 2016 2015 2014 Monroe's proportion of the net pension liability (asset) (%) 0.38665% 0.38737% 0.39039% 0.43129% 0.44081% 0.46720% Monroe's proportion of the net pension liability (asset) ($) 9,172,662$ 5,917,943$ 8,285,386$ 1,935,602$ (2,599,661)$ 5,631,554$ Monroe's covered payroll 24,933,732$ 23,996,590$ 23,236,408$ 22,572,529$ 22,549,809$ 21,999,994$ Monroe's proportionate share of the net pension liability (asset) as a percentage of its covered payroll 36.79% 24.66% 35.66% 8.58% ( 11.53%) 25.60% Plan fiduciary net position as a percentage of the total pension liability** 91.63% 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. ** This will be the same percentage for all participant employers in the LGERS plan. This schedule is intended to show information for ten years. Additional years' information will be displayed as it becomes available. Local Government Employees' Retirement System 101 CITY OF MONROE, NORTH CAROLINA CITY OF MONROE'S CONTRIBUTIONS REQUIRED SUPPLEMENTARY INFORMATION LAST SIX FISCAL YEARS 2019 2018 2017 2016 2015 2014 Contractually required contribution 2,100,061$ 1,920,739$ 1,790,488$ 1,586,301$ 1,611,462$ 1,604,437$ Contributions in relation to the contractually required contribution 2,100,061 1,920,739 1,790,488 1,586,301 1,611,462 1,604,437 Contribution deficiency (excess)-$ -$ -$ -$ -$ -$ Monroe's covered payroll 26,409,947$ 24,933,732$ 23,996,590$ 23,236,408$ 22,572,529$ 22,549,809$ Contributions as a percentage of covered payroll 7.95% 7.70% 7.46% 6.83% 7.14% 7.12% This schedule is intended to show information for ten years. Additional years' information will be displayed as it becomes available. Local Government Employees' Retirement System 102 Page 1 of 3 CITY OF MONROE, NORTH CAROLINA GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2019 Variance Budget Actual Over/Under Revenues: Ad Valorem Taxes: Taxes 21,931,955$ 22,270,153$ 338,198$ Penalties and interest 65,000 124,002 59,002 Total 21,996,955 22,394,155 397,200 Other Taxes and Licenses: Beer and wine and taxicab licenses - 2,317 2,317 Gross receipts tax on short-term rental property 91,785 111,505 19,720 Motor vehicle tax 835,770 833,700 (2,070) Total 927,555 947,522 19,967 Unrestricted Intergovernmental: Sales and use tax 6,147,920 6,653,962 506,042 Telecommunications sales tax 312,200 292,315 (19,885) Utility sales tax 2,774,878 2,910,697 135,819 Video franchise fee 213,092 208,033 (5,059) Beer and wine tax 150,000 151,376 1,376 State fire fees 3,000 2,656 (344) ABC profit distribution 170,000 214,266 44,266 Total 9,771,090 10,433,305 662,215 Restricted Intergovernmental: Powell Bill allocation 953,767 957,118 3,351 Public safety reimbursement grants 190,689 166,035 (24,654) ABC Revenue for law enforcement 80,562 74,301 (6,261) Resource officer reimbursement 200,898 205,323 4,425 Fire reimbursement grants 128,034 132,298 4,264 FEMA reimbursement grants 353,338 129,765 (223,573) Equitable sharing of federally forfeited property 24,011 113,865 89,854 Campus safety officer reimbursement 60,000 45,123 (14,877) Historic preservation reimbursement grants 19,000 16,150 (2,850) Total 2,010,299 1,839,978 (170,321) Sales and Services: Recreational fees 839,675 933,998 94,323 Utilities collection fees 416,300 444,853 28,553 Building permit fees 397,462 521,875 124,413 Cemetery revenues 40,000 70,620 30,620 Sale of fixed assets 194,471 124,162 (70,309) Rentals 74,894 105,099 30,205 Other fees 215,760 328,105 112,345 Total 2,178,562 2,528,712 350,150 103 Page 2 of 3 CITY OF MONROE, NORTH CAROLINA GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2019 Variance Budget Actual Over/Under Investment Earnings 477,000 3,018,594 2,541,594 Miscellaneous: Payment in lieu of taxes - Monroe Housing Authority 19,000 19,712 712 Donations 18,955 25,080 6,125 Other 982,836 1,012,968 30,132 Total 1,020,791 1,057,760 36,969 Total revenues 38,382,252 42,220,026 3,837,774 Expenditures: Current: General Government: Salaries and employee benefits 6,671,332 6,450,369 220,963 Operating expenditures 4,092,617 2,885,364 1,207,253 Capital outlay 335,404 333,694 1,710 Interdepartmental charges (5,540,293) (5,601,075) 60,782 Total general government 5,559,060 4,068,352 1,490,708 Transportation: Streets and highways Salaries and employee benefits 1,259,243 1,129,810 129,433 Operating expenditures 1,595,191 1,094,298 500,893 Capital outlay 1,454,129 1,396,169 57,960 Interdepartmental charges (404,270) (656,336) 252,066 Total transportation 3,904,293 2,963,941 940,352 Public Safety: Salaries and employee benefits 17,492,526 17,109,820 382,706 Operating expenditures 3,132,598 2,283,468 849,130 Capital outlay 2,790,371 1,321,531 1,468,840 Total public safety 23,415,495 20,714,819 2,700,676 Culture and Recreation: Salaries and employee benefits 3,257,167 2,990,667 266,500 Operating expenditures 2,301,550 1,755,360 546,190 Capital outlay 819,049 690,203 128,846 Interdepartmental charges (254,594) (254,594) - Total culture and recreation 6,123,172 5,181,636 941,536 104 Page 3 of 3 CITY OF MONROE, NORTH CAROLINA GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2019 Variance Budget Actual Over/Under Debt Service: Principal retirement 1,552,702 1,165,548 387,154 Interest and other charges 622,897 489,202 133,695 Total 2,175,599 1,654,750 520,849 Total expenditures 41,177,619 34,583,498 6,594,121 Revenues over (under) expenditures (2,795,367) 7,636,528 10,431,895 Other Financing Sources (Uses): Transfers from (to) other funds: Monroe Union County Economic Development Fund (309,000) (309,000) - Downtown Monroe Fund 82,265 82,265 - Downtown Monroe Fund (519,879) (505,290) 14,589 Capital projects funds: Capital projects (1,737,237) (1,737,237) - Capital projects 19,139 19,139 - Governmental Capital Reserve Fund (100,000) (100,000) - Airport Capital Projects Fund 132,147 132,147 - Airport Fund (1,947,235) (1,785,261) 161,974 Natural Gas Fund 155,000 155,593 593 Electric Fund 525,000 547,152 22,152 Limited obligation bond proceeds 114,800 113,171 (1,629) Installment purchase obligations issued 625,000 635,000 10,000 Total other financing sources (uses)(2,960,000) (2,752,321) 207,679 Appropriated fund balance 5,755,367 - (5,755,367) Net change in fund balance -$ 4,884,207 4,884,207$ Fund Balance: Beginning of year, July 1 28,563,016 End of year, June 30 33,447,223$ 105                       106 Nonmajor Governmental Funds Special Revenue Funds Special Revenue Funds are used to account for specific revenues that are legally restricted to expenditures for specified purposes. Community Development - This fund is used to account for specific revenues that are restricted to fund continuing rehabilitation of housing within certain targeted areas of the City. Downtown Monroe - This fund is used to account for specific revenues that are restricted for the purpose of downtown revitalization. Monroe Union County Economic Development – This fund is used to account for specific revenues that is restricted for the purpose of county- wide economic development. Capital Projects Funds Capital Projects Funds account for financial resources to be used for the acquisition or construction of major capital facilities other than those financed by proprietary funds. Capital Projects - This fund is used to account for the purchase, renovation, furnishing, or construction of roadway and facility improvements. Occupancy Tax Projects - This fund is used to account for tourism related capital expenditures. Capital Reserve Funds Capital Reserve Funds account for financial resources to be accumulated and used for the acquisition or construction of major capital facilities other than those financed by proprietary funds. Governmental Capital Reserve - This fund is used to accumulate funds for the purpose of constructing greenways. 107 Page 1 of 2 Monroe Union Community Downtown Economic Development Monroe Development Total Assets: Cash and cash equivalents 56,562$ 458,828$ 387,111$ 902,501$ Taxes receivable - 2,256 - 2,256 Accounts receivable - 27,633 - 27,633 Due from other governments - 146 - 146 Due from component unit - - - - Cash and cash equivalents - restricted - - - - Total assets 56,562$ 488,863$ 387,111$ 932,536$ Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable and accrued liabilities -$ 4,615$ 32,958$ 37,573$ Total liabilities - 4,615 32,958 37,573 Deferred Inflows of Resources - 2,256 - 2,256 Fund Balances: Non-spendable: Restricted: Stabilization by state statute - 43,830 12,223 56,053 Culture and recreation - - - - Occupancy tax capital projects - - - - Economic development - - 341,930 341,930 Committed: Culture and recreation - - - - Assigned 56,562 438,162 - 494,724 Total fund balances 56,562 481,992 354,153 892,707 Total liabilities, deferred inflows of resources, and fund balances 56,562$ 488,863$ 387,111$ 932,536$ Special Revenue Funds CITY OF MONROE, NORTH CAROLINA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2019 108 Page 2 of 2 Total Occupancy Governmental Nonmajor Capital Tax Capital Governmental Projects Projects Reserve Total Funds Assets: Cash and cash equivalents 4,465,733$ 571,730$ 213,242$ 5,250,705$ 6,153,206$ Taxes receivable - - - - 2,256 Accounts receivable - - - - 27,633 Due from other governments 11,907 - - 11,907 12,053 Due from component unit - 17,979 - 17,979 17,979 Cash and cash equivalents - restricted 3,729,537 2,907,785 - 6,637,322 6,637,322 Total assets 8,207,177$ 3,497,494$ 213,242$ 11,917,913$ 12,850,449$ Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable and accrued liabilities 871,041$ 265,529$ -$ 1,136,570$ 1,174,143$ Total liabilities 871,041 265,529 - 1,136,570 1,174,143 Deferred Inflows of Resources - - - - 2,256 Fund Balances: Non-spendable: Restricted: Stabilization by state statute 4,158,861 2,246,326 - 6,405,187 6,461,240 Culture and recreation 3,177,275 - - 3,177,275 3,177,275 Occupancy tax capital projects - 985,639 - 985,639 985,639 Economic development - - - - 341,930 Committed: Culture and recreation - - 213,242 213,242 213,242 Assigned - - - - 494,724 Total fund balances 7,336,136 3,231,965 213,242 10,781,343 11,674,050 Total liabilities, deferred inflows of resources, and fund balances 8,207,177$ 3,497,494$ 213,242$ 11,917,913$ 12,850,449$ Capital Project Funds CITY OF MONROE, NORTH CAROLINA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2019 109 Page 1 of 2 CITY OF MONROE, NORTH CAROLINA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2019 Monroe Union Community Downtown Economic Development Monroe Development Total Revenues: Ad valorem taxes -$ 57,037$ -$ 57,037$ Restricted intergovernmental - - 412,000 412,000 Donation - - - - Miscellaneous - 82,265 20,050 102,315 Investment earnings - - 25,823 25,823 Total revenues - 139,302 457,873 597,175 Expenditures: Current: Economic and physical development: Administration - 167,423 692,527 859,950 Tourism - - - - Capital outlay - - - - Total expenditures - 167,423 692,527 859,950 Revenues over (under) expenditures - (28,121) (234,654) (262,775) Other Financing Sources (Uses): Transfers from other funds - 505,290 309,000 814,290 Transfers to other funds - (82,265) - (82,265) Premium from limited obligation bonds issued - - - - Limited obligation bonds issued - - - - Total other financing sources (uses)- 423,025 309,000 732,025 Net change in fund balances - 394,904 74,346 469,250 Fund Balances: Beginning of year, July 1 56,562 87,088 279,807 423,457 End of year, June 30 56,562$ 481,992$ 354,153$ 892,707$ Special Revenue Funds 110 Page 2 of 2 CITY OF MONROE, NORTH CAROLINA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2019 Total Occupancy Governmental Nonmajor Capital Tax Capital Governmental Projects Projects Reserve Total Funds Revenues: Ad valorem taxes -$ -$ -$ -$ 57,037$ Restricted intergovernmental 112,671 206,301 - 318,972 730,972 Donation - 10,000 - 10,000 10,000 Miscellaneous - - - - 102,315 Investment earnings 68,865 109,877 13,242 191,984 217,807 Total revenues 181,536 326,178 13,242 520,956 1,118,131 Expenditures: Current: Economic and physical development: Administration - - - - 859,950 Tourism - 1,650,177 - 1,650,177 1,650,177 Capital outlay 4,250,110 - - 4,250,110 4,250,110 Total expenditures 4,250,110 1,650,177 - 5,900,287 6,760,237 Revenues over (under) expenditures (4,068,574) (1,323,999) 13,242 (5,379,331) (5,642,106) Other Financing Sources (Uses): Transfers from other funds 1,752,916 - 100,000 1,852,916 2,667,206 Transfers to other funds - - - - (82,265) Premium from limited obligation bonds issued 255,127 176,936 - 432,063 432,063 Limited obligation bonds issued 4,196,830 3,474,999 - 7,671,829 7,671,829 Total other financing sources (uses)6,204,873 3,651,935 100,000 9,956,808 10,688,833 Net change in fund balances 2,136,299 2,327,936 113,242 4,577,477 5,046,727 Fund Balances: Beginning of year, July 1 5,199,837 904,029 100,000 6,203,866 6,627,323 End of year, June 30 7,336,136$ 3,231,965$ 213,242$ 10,781,343$ 11,674,050$ Capital Project Funds 111 CITY OF MONROE, NORTH CAROLINA SPECIAL REVENUE FUND COMMUNITY DEVELOPMENT SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2019 Variance Budget Actual Over/Under Net change in fund balance -$ -$ -$ Fund Balance: Beginning of year, July 1 56,562 End of year, June 30 56,562$ 112 CITY OF MONROE, NORTH CAROLINA SPECIAL REVENUE FUND DOWNTOWN MONROE SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES FUND BALANCE - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2019 Variance Budget Actual Over/Under Revenues: Ad valorem taxes 55,805$ 57,037$ 1,232$ Miscellaneous 82,265 82,265 - Total 138,070 139,302 1,232 Expenditures: Current: Economic and physical development: Administration 662,772 167,423 495,349 Total 662,772 167,423 495,349 Revenues over (under) expenditures (524,702) (28,121) 496,581 Other Financing Sources (Uses) Transfers from (to) other funds: General Fund (82,265) (82,265) - General Fund 519,879 505,290 (14,589) Total other financing sources (uses)437,614 423,025 (14,589) Appropriated fund balance 87,088 - (87,088) Net change in fund balance -$ 394,904 394,904$ Fund Balance: Beginning of year, July 1 87,088 End of year, June 30 481,992$ 113 CITY OF MONROE, NORTH CAROLINA SPECIAL REVENUE FUND MONROE UNION COUNTY ECONOMIC DEVELOPMENT SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2019 Variance Budget Actual Over/Under Revenues: Interlocal agreement 412,000$ 412,000$ -$ Miscellaneous 30,050 20,050 (10,000) Investment earnings - 25,823 25,823 Total 442,050 457,873 15,823 Expenditures: Current: Economic and physical development: Administration 781,011 692,527 88,484 Revenues over (under) expenditures (338,961) (234,654) 104,307 Other Financing Sources (Uses): Transfers from (to) other funds: General Fund 309,000 309,000 - Appropriated fund balance 29,961 - (29,961) Net change in fund balance -$ 74,346 74,346$ Fund Balance: Beginning of year, July 1 279,807 End of year, June 30 354,153$ 114 CITY OF MONROE, NORTH CAROLINA CAPITAL PROJECTS FUND CAPITAL PROJECTS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL FROM INCEPTION AND FOR THE YEAR ENDED JUNE 30, 2019 Project Prior Current Total to Variance Authorization Years Year Date Over/Under Revenues: Restricted intergovernmental 2,141,000$ 1,683,603$ 112,671$ 1,796,274$ (344,726)$ Miscellaneous - 253 - 253 253 Investment earnings - 86,225 68,865 155,090 155,090 Total revenues 2,141,000 1,770,081 181,536 1,951,617 (189,383) Expenditures: Capital outlay: Construction costs capitalized 8,478,976 7,042,912 436,095 7,479,007 999,969 Construction in progress 24,751,536 570,290 3,794,596 4,364,886 20,386,650 Other costs 138,066 118,647 19,419 138,066 - Total expenditures 33,368,578 7,731,849 4,250,110 11,981,959 21,386,619 Revenues over (under) expenditures (31,227,578) (5,961,768) (4,068,574) (10,030,342) 21,197,236 Other Financing Sources (Uses): Transfers from (to) other funds: To General Fund (19,139) - (19,139) (19,139) - From General Fund 6,858,842 5,121,605 1,737,237 6,858,842 - Parks and Recreation Fund (General Fund) 1,140,000 1,140,000 - 1,140,000 - Monroe Fitness and Aquatics Center Fund 100,000 100,000 - 100,000 - Governmental Capital Reserve Fund 400,000 400,000 - 400,000 - Water & Sewer Fund 17,409 - 17,409 17,409 - Electric Fund 17,409 - 17,409 17,409 - Premium from Limited Obligation Bonds issued 255,127 - 255,127 255,127 - Limited obligation bonds issued 18,057,930 - 4,196,830 4,196,830 (13,861,100) Installment purchase obligations issued 4,400,000 4,400,000 - 4,400,000 - Total other financing sources (uses)31,227,578 11,161,605 6,204,873 17,366,478 (13,861,100) Net change in fund balance -$ 5,199,837$ 2,136,299 7,336,136$ 7,336,136$ Fund Balance: Beginning of year, July 1 5,199,837 End of year, June 30 7,336,136$ Actual 115 CITY OF MONROE, NORTH CAROLINA CAPITAL PROJECT FUND OCCUPANCY TAX CAPITAL PROJECTS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL FROM INCEPTION AND FOR THE YEAR ENDED JUNE 30, 2019 Project Prior Current Total to Variance Authorization Years Year Date Over/Under Revenues: Restricted intergovernmental 694,839$ 2,941,862$ 206,301$ 3,148,163$ 2,453,324$ Donation 8,000 - 10,000 10,000 2,000 Investment earnings - 39,294 109,877 149,171 149,171 Total revenues 702,839 2,981,156 326,178 3,307,334 2,604,495 Expenditures: Current: Construction costs capitalized 710,372 1,221,996 - 1,221,996 511,624 Construction in progress 4,537,551 616,537 1,487,511 2,104,048 (2,433,503) Other costs 149,503 238,594 10,000 248,594 99,091 Total expenditures 5,397,426 2,077,127 1,497,511 3,574,638 (1,822,788) Debt service: Principal retirement 141,622 - - - (141,622) Interest and other charges 158,678 - 152,666 152,666 (6,012) Total 300,300 - 152,666 152,666 (147,634) Revenues over (under) expenditures (4,994,887) 904,029 (1,323,999) (419,970) 4,574,917 Other Financing Sources (Uses): Future capital projects 1,344,361 - - - (1,344,361) Premium from Limited Obligation Bonds 176,936 - 176,936 176,936 - Proceeds from Limited Obligation Bonds 3,473,590 - 3,474,999 3,474,999 1,409 Total 4,994,887 - 3,651,935 3,651,935 (1,342,952) Net change in fund balance -$ 904,029$ 2,327,936 3,231,965$ 3,231,965$ Fund Balance: Beginning of year, July 1 904,029 End of year, June 30 3,231,965$ Actual 116 CITY OF MONROE, NORTH CAROLINA CAPITAL PROJECT FUND GOVERNMENTAL CAPITAL RESERVE SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2019 Variance Budget Actual Over/Under Revenues: Investment earnings -$ 13,242$ 13,242$ Total revenues - 13,242 13,242 Other Financing Sources (Uses): Transfers from (to) other funds: Parks and Recreation Fund (General Fund)100,000$ 100,000$ -$ Capital Projects Fund (100,000) - 100,000 Total other financing sources (uses)- 100,000 100,000 Net change in fund balance -$ 113,242 113,242$ Fund Balance: Beginning of year, July 1 100,000 End of year, June 30 213,242$ 117 Page 1 of 3 CITY OF MONROE, NORTH CAROLINA WATER AND SEWER FUND SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL (NON-GAAP) FOR THE YEAR ENDED JUNE 30, 2019 Variance Budget Actual Over/Under Revenues: Operating revenues: Charges for services: Water sales 7,301,292$ 7,417,957$ 116,665$ Sewer charges 8,530,519 9,241,510 710,991 Water and sewer taps 100,260 91,884 (8,376) Availability fees 610,331 498,045 (112,286) County waste water charges 1,144,000 1,210,150 66,150 Total 17,686,402 18,459,546 773,144 Other operating revenues 229,330 223,049 (6,281) Total operating revenues 17,915,732 18,682,595 766,863 Non-operating revenues: Other non-operating revenues 50,432 80,536 30,104 Investment earnings 456,434 2,482,309 2,025,875 Total non-operating revenues 506,866 2,562,845 2,055,979 Total revenues 18,422,598 21,245,440 2,822,842 Other Financing Sources (Uses): Transfers from other funds: Water & Sewer Capital Project Fund 20,288 20,287 (1) Total other financing sources (uses)20,288 20,287 (1) Appropriated fund balance 13,286,182 - (13,286,182) Total revenues and other financing sources (uses)31,729,068$ 21,265,727$ (10,463,341)$ 118 Page 2 of 3 CITY OF MONROE, NORTH CAROLINA WATER AND SEWER FUND SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL (NON-GAAP) FOR THE YEAR ENDED JUNE 30, 2019 Variance Budget Actual Over/Under Expenditures: Distribution system: Salaries and employee benefits 2,937,949$ 2,623,234$ 314,715$ Repairs and maintenance 1,412,291 1,124,607 287,684 Operating expenditures 2,920,334 2,744,203 176,131 Total 7,270,574 6,492,044 778,530 Water filter plant: Salaries and employee benefits 882,594 829,765 52,829 Operating expenditures 3,080,560 2,723,424 357,136 Total 3,963,154 3,553,189 409,965 Waste treatment plant: Salaries and employee benefits 1,104,538 1,100,099 4,439 Operating expenditures 1,967,820 1,454,674 513,146 Total 3,072,358 2,554,773 517,585 Debt service: Principal retirement 1,381,967 1,381,692 275 Interest and other charges 864,207 860,757 3,450 Total 2,246,174 2,242,449 3,725 Capital outlay 2,407,412 2,000,023 407,389 Total expenditures 18,959,672 16,842,478 2,117,194 Other Financing Sources (Uses): Transfers: Capital Reserve Fund (5,903,233) (488,295) (5,414,938) Capital Projects Fund (17,409) (17,409) - Water and Sewer Capital Projects Fund (6,848,754) (6,848,754) - Total other financing uses (12,769,396) (7,354,458) (5,414,938) Total expenditures and other financing sources (uses)31,729,068$ 24,196,936$ 7,532,132$ 119 Page 3 of 3 CITY OF MONROE, NORTH CAROLINA WATER AND SEWER FUND SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL (NON-GAAP) FOR THE YEAR ENDED JUNE 30, 2019 Reconciliation from Budgetary Basis (Modified Accrual) to Full Accrual: Total revenues and other financing sources (uses) 21,265,727$ Total expenditures and other financing sources (uses)24,196,936 Revenues and other financing sources (uses) over (under) expenditures and other financing sources (uses)(2,931,209) Reconciling items: Debt principal 1,381,692 Net revenue from capital projects consolidation 231,193 Capital outlay 2,000,023 Capital items not charged to capital outlay 6,885,002 Disposal of capital asset (66,559) Project transfers - intrafund 7,316,762 Increase in compensated absences 23,603 Change in OPEB liability (128) Change in deferred outflows of resources - OPEB 583 Change in deferred inflows of resources - OPEB (228,627) Change in deferred outflows of resources - pensions 343,852 Increase in net pension liability (419,859) Change in deferred inflows of resources - pensions 42,841 Depreciation and amortization (3,105,088) Total reconciling items 14,405,290 Change in net position 11,474,081$ 120 CITY OF MONROE, NORTH CAROLINA WATER AND SEWER CAPITAL PROJECTS FUNDS CAPITAL RESERVE SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL (NON-GAAP) FOR THE YEAR ENDED JUNE 30, 2019 Variance Budget Actual Over/Under Other Financing Sources (Uses): Transfers from (to) other funds: Water and Sewer Fund 5,903,233$ 488,295$ (5,414,938)$ Water and Sewer Fund (5,903,233) - 5,903,233 Total other financing sources (uses)-$ 488,295 488,295$ Fund Balance: Beginning of year, July 1 11,483,767 End of year, June 30 11,972,062$ 121 CITY OF MONROE, NORTH CAROLINA WATER AND SEWER CAPITAL PROJECTS FUNDS SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL (NON-GAAP) FROM INCEPTION AND FOR THE YEAR ENDED JUNE 30, 2019 Project Prior Current Total to Variance Authorization Years Year Date Over/Under Revenues: Restricted intergovernmental 395,810$ 6,160$ 126,680$ 132,840$ (262,970)$ Investment earnings - 61,032 104,499 165,531 165,531 Miscellaneous - - 14 14 14 Total revenues 395,810 67,192 231,193 298,385 (97,425) Expenditures: Construction costs capitalized 584,712 471,307 4,877,480 5,348,787 (4,764,075) Construction in progress 21,141,698 2,464,018 4,888,258 7,352,276 13,789,422 Other costs 65,436 65,436 - 65,436 - Total expenditures 21,791,846 3,000,761 9,765,738 12,766,499 9,025,347 Revenues over (under) expenditures (21,396,036) (2,933,569) (9,534,545) (12,468,114) 8,927,922 Other Financing Sources (Uses): Transfers from (to) other funds: To Water and Sewer Fund (1,632,288) (1,612,000) (20,287) (1,632,287) 1 From Water and Sewer Fund 14,323,004 7,474,250 6,848,754 14,323,004 - Proceeds from revenue bonds 8,705,320 8,705,320 - 8,705,320 - Total other financing sources (uses)21,396,036 14,567,570 6,828,467 21,396,037 1 Revenues and other financing sources over (under) expenditures and other financing uses -$ 11,634,001$ (2,706,078)$ 8,927,923$ 8,927,923$ Actual 122 Page 1 of 3 CITY OF MONROE, NORTH CAROLINA ELECTRIC FUND SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL (NON-GAAP) FOR THE YEAR ENDED JUNE 30, 2019 Variance Budget Actual Over/Under Revenues: Operating revenues: Charges for services: Electric power sales 61,964,000$ 60,900,313$ (1,063,687)$ Sales tax 3,718,000 2,458,043 (1,259,957) Total 65,682,000 63,358,356 (2,323,644) Other operating revenues 307,000 404,352 97,352 Total operating revenues 65,989,000 63,762,708 (2,226,292) Non-operating revenues: Other non-operating revenues 106,721 216,075 109,354 Investment earnings 604,500 2,783,095 2,178,595 Total non-operating revenues 711,221 2,999,170 2,287,949 Interest income from other funds: General Fund 44,486 44,486 - Airport Fund 23,861 23,861 - Total 68,347 68,347 - Total revenues 66,768,568$ 66,830,225$ 61,657$ 123 Page 2 of 3 CITY OF MONROE, NORTH CAROLINA ELECTRIC FUND SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL (NON-GAAP) FOR THE YEAR ENDED JUNE 30, 2019 Variance Budget Actual Over/Under Expenditures: Operations: Salaries and employee benefits 3,988,037$ 3,547,234$ 440,803$ Operating expenditures 5,261,934 4,284,514 977,420 Total 9,249,971 7,831,748 1,418,223 Electric power purchases 52,964,000 48,855,719 4,108,281 Debt service: Principal retirement 1,008,400 1,008,400 - Interest and other charges 673,232 670,043 3,189 Total 1,681,632 1,678,443 3,189 Capital outlay 525,416 96,071 429,345 Contingency 656,941 - 656,941 Total expenditures 65,077,960 58,461,981 6,615,979 Other Financing Sources (Uses): Transfers (to) from other funds: To Electric Capital Projects Fund (1,455,000) (1,455,000) - From Electric Capital Projects Fund 306,801 306,801 - General Fund (525,000) (547,152) 22,152 Capital projects (17,409) (17,409) - Total other financing sources (uses)(1,690,608) (1,712,760) 22,152 Total expenditures and other financing sources (uses)66,768,568$ 60,174,741$ 6,593,827$ 124 Page 3 of 3 CITY OF MONROE, NORTH CAROLINA ELECTRIC FUND SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL (NON-GAAP) FOR THE YEAR ENDED JUNE 30, 2019 Reconciliation from Budgetary Basis (Modified Accrual) to Full Accrual: Total revenues and other financing sources 66,830,225$ Total expenditures and other financing uses 60,174,741 Revenues and other financing sources (uses) over (under) expenditures and other financing uses 6,655,484 Reconciling items: Debt principal 1,008,400 Capital outlay 96,071 Capital items not charged to capital outlay 2,158,084 Disposal of capital asset (191,881) Transfer from Natural Gas Fund 25,000 Project transfers - intrafund 1,148,199 Net revenue from capital projects consolidation 684,549 Increase in compensated absences (56,340) Change in OPEB liability (56) Change in deferred outflows of resources - OPEB 255 Change in deferred inflows of resources - OPEB (99,803) Change in deferred outflows of resources - pensions 149,269 Increase in net pension liability (182,264) Change in deferred inflows of resources - pensions 18,598 Depreciation and amortization (2,699,443) Total reconciling items 2,058,638 Change in net position 8,714,122$ 125 CITY OF MONROE, NORTH CAROLINA ELECTRIC CAPITAL PROJECTS FUNDS CAPITAL PROJECTS SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL (NON-GAAP) FROM INCEPTION AND FOR THE YEAR ENDED JUNE 30, 2019 Project Prior Current Total to Variance Authorization Years Year Date Over/Under Revenues: Power agency funding 5,805,850$ 5,592,648$ -$ 5,592,648$ (213,202)$ Restricted revenue 11,710 10,000 346,474 356,474 344,764 Investment earnings - - 338,075 338,075 338,075 Total revenues 5,817,560 5,602,648 684,549 6,287,197 469,637 Expenditures: Construction costs capitalized 9,925,146 8,718,530 67,123 8,785,653 1,139,493 Construction in progress 10,325,720 708,627 299,398 1,008,025 9,317,695 Other costs 3,926,278 401,834 77,876 479,710 3,446,568 Total expenditures 24,177,144 9,828,991 444,397 10,273,388 13,903,756 Revenues over (under) expenditures (18,359,584) (4,226,343) 240,152 (3,986,191) 14,373,393 Other Financing Sources (Uses): Transfers from (to) other funds: To Electric Fund (306,801) - (306,801) (306,801) - From Electric Fund 18,641,385 17,186,380 1,455,000 18,641,380 (5) Natural Gas Fund 25,000 - 25,000 25,000 - Total other financing sources (uses)18,359,584 17,186,380 1,173,199 18,359,579 (5) Revenues and other financing sources over (under) expenditures and other financing uses -$ 12,960,037$ 1,413,351$ 14,373,388$ 14,373,388$ Actual 126 Page 1 of 3 CITY OF MONROE, NORTH CAROLINA NATURAL GAS FUND SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL (NON-GAAP) FOR THE YEAR ENDED JUNE 30, 2019 Variance Budget Actual Over/Under Revenues: Operating revenues: Charges for services: Natural gas sales 20,636,000$ 18,321,753$ (2,314,247)$ Other operating revenues - 4,207 4,207 Total operating revenues 20,636,000 18,325,960 (2,310,040) Non-operating revenues: Other non-operating revenues 75,834 165,859 90,025 Investment earnings 307,300 1,812,085 1,504,785 Total non-operating revenues 383,134 1,977,944 1,594,810 Total revenues 21,019,134 20,303,904 (715,230) 127 Page 2 of 3 CITY OF MONROE, NORTH CAROLINA NATURAL GAS FUND SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL (NON-GAAP) FOR THE YEAR ENDED JUNE 30, 2019 Variance Budget Actual Over/Under Expenditures: Operations: Salaries and employee benefits 1,491,436$ 1,311,561$ 179,875$ Operating expenditures 3,443,473 2,693,311 750,162 Total 4,934,909 4,004,872 930,037 Natural gas purchases 9,398,215 7,067,414 2,330,801 Debt service: Principal retirement 1,275,912 1,275,912 - Interest and other charges 1,599,325 1,595,184 4,141 Total 2,875,237 2,871,096 4,141 Capital outlay 79,797 20,453 59,344 Total expenditures 17,288,158 13,963,835 3,324,323 Other Financing Sources (Uses): Transfers to other funds: General Fund (155,000) (155,593) 593 Electric Capital Project Fund (25,000) (25,000) - Natural Gas Capital Project Fund (2,785,909) (2,785,909) - Total other financing sources (uses)(2,965,909) (2,966,502) 593 Contingency 765,067 - 765,067 Total expenditures and other financing sources (uses)21,019,134$ 16,930,337$ 4,089,983$ 128 Page 3 of 3 CITY OF MONROE, NORTH CAROLINA NATURAL GAS FUND SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL (NON-GAAP) FOR THE YEAR ENDED JUNE 30, 2019 Reconciliation from Budgetary Basis (Modified Accrual) to Full Accrual: Total revenues and other financing sources (uses) 20,303,904$ Total expenditures and other financing sources (uses)16,930,337 Revenues and other financing sources (uses) over (under) expenditures and other financing sources (uses)3,373,567 Reconciling items: Debt principal 1,275,912 Capital outlay 20,453 Capital items not charged to capital outlay 397,794 Disposal of capital asset (65,237) Project transfers - intrafund 2,785,909 Income from capital projects consolidation 133,731 Project expenses not capitalized (46,281) Increase in compensated absences (27,650) Change in deferred outflows of resources - OPEB 129 Change in deferred inflows of resources - OPEB (50,609) Change in OPEB liability (29) Change in deferred outflows of resources - pensions 77,300 Increase in net pension liability (94,387) Change in deferred inflows of resources - pensions 9,631 Depreciation and amortization (1,548,506) Total reconciling items 2,868,160 Change in net position 6,241,727$ 129 CITY OF MONROE, NORTH CAROLINA NATURAL GAS CAPITAL PROJECTS FUNDS CAPITAL PROJECTS SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL (NON-GAAP) FROM INCEPTION AND FOR THE YEAR ENDED JUNE 30, 2019 Project Prior Current Total to Variance Authorization Years Year Date Over/Under Revenues: Miscellaneous -$ 2,735$ 226$ 2,961$ 2,961$ Investment earnings - 30,553 65,635 96,188 96,188 Restricted intergovernmental 364,199 233,096 67,870 300,966 (63,233) Total revenues 364,199 266,384 133,731 400,115 35,916 Expenditures: Construction costs capitalized 4,101,879 2,271,054 469,548 2,740,602 1,361,277 Construction in progress 12,749,184 5,171,386 3,384,263 8,555,649 4,193,535 Other costs 495,000 65,237 46,280 111,517 383,483 Total expenditures 17,346,063 7,507,677 3,900,091 11,407,768 5,938,295 Revenues over (under) expenditures (16,981,864) (7,241,293) (3,766,360) (11,007,653) 5,974,211 Other Financing Sources (Uses): Transfers from (to) other funds: To Natural Gas Fund (6,555,000) (6,555,000) - (6,555,000) - From Natural Gas Fund 15,236,864 12,450,955 2,785,909 15,236,864 - Limited Obligation Bonds 8,300,000 8,274,737 - 8,274,737 (25,263) Total other financing sources (uses)16,981,864 14,170,692 2,785,909 16,956,601 (25,263) Revenues and other financing sources over (under) expenditures and other financing uses -$ 6,929,399$ (980,451)$ 5,948,948$ 5,948,948$ Actual 130 Page 1 of 3 CITY OF MONROE, NORTH CAROLINA AIRPORT FUND SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL (NON-GAAP) FOR THE YEAR ENDED JUNE 30, 2019 Variance Budget Actual Over/Under Revenues: Operating revenues: Charges for services: Leases 331,200$ 343,958$ 12,758$ Customs 7,200 5,600 (1,600) Sales of fuel 1,625,000 1,473,636 (151,364) Total 1,963,400 1,823,194 (140,206) Other operating revenues 69,930 89,370 19,440 Total operating revenues 2,033,330 1,912,564 (120,766) Non-operating revenues: Investment earnings - 24 24 Total non-operating revenues - 24 24 Total revenues 2,033,330 1,912,588 (120,742) Other Financing Sources (Uses): Appropriated fund balance 497 - (497) Transfers from other funds: General Fund 1,947,235 1,785,261 (161,974) Total other financing sources (uses)1,947,732 1,785,261 (162,471) Total revenues and other financing sources (uses)3,981,062$ 3,697,849$ (283,213)$ 131 Page 2 of 3 CITY OF MONROE, NORTH CAROLINA AIRPORT FUND SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL (NON-GAAP) FOR THE YEAR ENDED JUNE 30, 2019 Variance Budget Actual Over/Under Expenditures: Operations: Salaries and employee benefits 657,573$ 652,457$ 5,116$ Operating expenditures 1,985,582 1,767,212 218,370 Total 2,643,155 2,419,669 223,486 Debt service: Principal retirement 746,229 710,100 36,129 Interest and other charges 448,193 448,327 (134) Total 1,194,422 1,158,427 35,995 Capital outlay 143,485 123,867 19,618 Total expenditures 3,981,062$ 3,701,963$ 279,099$ 132 Page 3 of 3 CITY OF MONROE, NORTH CAROLINA AIRPORT FUND SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL (NON-GAAP) FOR THE YEAR ENDED JUNE 30, 2019 Reconciliation from Budgetary Basis (Modified Accrual) to Full Accrual: Total revenues and other financing sources (uses) 3,697,849$ Total expenditures 3,701,963 Revenues and other financing sources (uses) over (under) expenditures and other financing sources (uses) (4,114) Reconciling items: Debt principal 710,100 Capital outlay 123,867 Net revenue from capital projects consolidation 937,493 Transfer from General Fund (132,147) Increase in compensated absences 559 Change in OPEB liability (23) Change in deferred outflows of resources - OPEB 107 Change in deferred inflows of resources - OPEB (42,292) Change in deferred outflows of resources - pensions 63,973 Increase in net pension liability (78,113) Change in deferred inflows of resources - pensions 7,970 Depreciation and amortization (781,138) Total reconciling items 810,356 Change in net position 806,242$ 133 CITY OF MONROE, NORTH CAROLINA AIRPORT CAPITAL PROJECTS FUNDS CAPITAL PROJECTS SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL (NON-GAAP) FROM INCEPTION AND FOR THE YEAR ENDED JUNE 30, 2019 Project Prior Current Total to Variance Authorization Years Year Date Over/Under Revenues: Restricted intergovernmental 8,895,555$ 6,022,034$ 885,089$ 6,907,123$ (1,988,432)$ Investment earnings - 16,539 46,404 62,943 62,943 Miscellaneous - - 6,000 6,000 6,000 Total revenues 8,895,555 6,038,573 937,493 6,976,066 (1,919,489) Expenditures: Construction costs capitalized 6,490,288 4,794,980 - 4,794,980 1,695,308 Construction in progress 7,550,735 2,426,439 2,185,425 4,611,864 2,938,871 Total expenditures 14,041,023 7,221,419 2,185,425 9,406,844 4,634,179 Revenues over (under) expenditures (5,145,468) (1,182,846) (1,247,932) (2,430,778) 2,714,690 Other Financing Sources (Uses): Transfers from (to) other funds: General Fund 1,511,218 1,643,365 (132,147) 1,511,218 - Electric Fund 910,000 910,000 - 910,000 - Airport Fund 450,000 450,000 - 450,000 - Bond premium 275,721 275,721 - 275,721 - Proceeds from revenue bonds 1,998,529 1,998,529 - 1,998,529 - Total other financing sources (uses)5,145,468 5,277,615 (132,147) 5,145,468 - Revenues and other financing sources over (under) expenditures and other financing uses -$ 4,094,769$ (1,380,079)$ 2,714,690$ 2,714,690$ Actual 134 CITY OF MONROE, NORTH CAROLINA COMBINING STATEMENT OF NET POSITION NONMAJOR ENTERPRISE FUNDS JUNE 30, 2019 Aquatics and Fitness Center Stormwater Solid Waste Fund Fund Fund Total Assets: Current assets: Cash and cash equivalents 3,671,851$ 1,981,024$ 690,557$ 6,343,432$ Accounts receivable 6,885 256,657 319,116 582,658 Prepaid expenses 1,147 570 624 2,341 Inventories 5,636 - - 5,636 Total current assets 3,685,519 2,238,251 1,010,297 6,934,067 Non-current assets: Capital assets: Land and other non-depreciable assets 925,594 300,484 - 1,226,078 Other capital assets, net of depreciation 5,792,436 772,566 151,461 6,716,463 Total non-current assets 6,718,030 1,073,050 151,461 7,942,541 Total assets 10,403,549 3,311,301 1,161,758 14,876,608 Deferred Outflows of Resources: OPEB deferrals 27,570 12,059 817 40,446 Pension deferrals 338,835 151,395 7,210 497,440 Total deferred outflows of resources 366,405 163,454 8,027 537,886 Liabilities: Current liabilities: Accounts payable and accrued liabilities 162,622 33,595 160,603 356,820 Unearned revenue 33,072 - - 33,072 Compensated absences 69,836 32,406 4,716 106,958 Installment purchase obligations - 99,000 - 99,000 Total current liabilities 265,530 165,001 165,319 595,850 Non-current liabilities: Net pension liability 431,115 192,626 9,173 632,914 Compensated absences 34,396 15,961 2,322 52,679 Installment purchase obligations - 314,000 - 314,000 Total other post-employment benefits liability 1,964,016 858,997 58,378 2,881,391 Total non-current liabilities 2,429,527 1,381,584 69,873 3,880,984 Total liabilities 2,695,057 1,546,585 235,192 4,476,834 Deferred Inflows of Resources: OPEB deferrals 279,654 122,312 8,312 410,278 Pension deferrals 10,890 4,866 233 15,989 Total deferred inflows of resources 290,544 127,178 8,545 426,267 Net investment in capital assets 6,718,030 660,050 151,461 7,529,541 Unrestricted 1,066,323 1,140,942 774,587 2,981,852 Total net position 7,784,353$ 1,800,992$ 926,048$ 10,511,393$ 135 CITY OF MONROE, NORTH CAROLINA COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION NONMAJOR ENTERPRISE FUNDS FOR THE YEAR ENDED JUNE 30, 2019 Aquatics and Fitness Center Fund Stormwater Solid Waste Total Operating Revenues: Charges for services 3,931,477$ 2,225,545$ 2,408,501$ 8,565,523$ Other operating revenues 160,213 33,300 26,206 219,719 Total operating revenues 4,091,690 2,258,845 2,434,707 8,785,242 Operating Expenses: Aquatics and Fitness Center operations 3,749,832 - - 3,749,832 Stormwater operations - 1,922,153 - 1,922,153 Solid waste operations - - 2,233,252 2,233,252 Solid waste maintenance - - 96,421 96,421 Depreciation and amortization 306,636 114,802 20,320 441,758 Total operating expenses 4,056,468 2,036,955 2,349,993 8,443,416 Operating income (loss)35,222 221,890 84,714 341,826 Non-Operating Revenues (Expenses): Gain (loss) on sale of capital assets - 75,532 - 75,532 Other non-operating revenues (expenses) 1,663 2,005 - 3,668 Investment earnings 215,304 115,015 40,262 370,581 Interest and other charges - (14,817) - (14,817) Total non-operating revenues (expenses)216,967 177,735 40,262 434,964 Income (loss) before capital contributions and transfers 252,189 399,625 124,976 776,790 Capital Contributions - 507 - 507 Change in net position 252,189 400,132 124,976 777,297 Net Position: Beginning of year, July 1 7,532,164 1,400,860 801,072 9,734,096 End of year, June 30 7,784,353$ 1,800,992$ 926,048$ 10,511,393$ 136 CITY OF MONROE, NORTH CAROLINA COMBINING STATEMENT OF CASH FLOWS NONMAJOR ENTERPRISE FUNDS FOR THE YEAR ENDED JUNE 30, 2019 Aquatics and Fitness Center Fund Stormwater Solid Waste Total Cash Flows from Operating Activities: Cash received from customers 4,092,757$ 2,253,813$ 2,427,293$ 8,773,863$ Cash paid for goods and services (1,633,397) (1,185,329) (2,187,090) (5,005,816) Cash paid to or on behalf of employees for services (2,029,218) (709,832) (167,595) (2,906,645) Net cash provided (used) by operating activities 430,142 358,652 72,608 861,402 Cash Flows from Capital and Related Financing Activities: Proceeds from sale of capital assets - 75,534 - 75,534 Acquisition and construction of capital assets (123,533) (534,463) - (657,996) Principal paid on bond maturities and equipment obligations - (96,000) - (96,000) Interest paid on bond maturities and equipment obligations - (14,817) - (14,817) Net cash provided (used) by capital and related financing activities (123,533) (569,746) - (693,279) Cash Flows from Investing Activities: Earnings on investments 215,304 115,015 40,262 370,581 Net cash provided (used) by investing activities 215,304 115,015 40,262 370,581 Net increase (decrease) in cash and cash equivalents 521,913 (96,079) 112,870 538,704 Cash and Cash Equivalents: Beginning of year, July 1 3,149,938 2,077,103 577,687 5,804,728 End of year, June 30 3,671,851$ 1,981,024$ 690,557$ 6,343,432$ Reconciliation of Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities: Operating income (loss)35,222$ 221,890$ 84,714$ 341,826$ Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation and amortization 306,636 114,802 20,320 441,758 Non operating revenues 1,663 2,512 - 4,175 Increase deferred outflows - pension (125,278) (55,977) (2,667) (183,922) Changes in assets and liabilities: (Increase) decrease in accounts receivable (877) (7,619) (7,727) (16,223) (Increase) decrease in prepaid expenses 553 75 313 941 Increase (decrease) in accounts payable and accrued liabilities (8,119) (9,345) (30,223) (47,687) (Increase) decrease in deferred outflows of resources for OPEB (212) (93) (4) (309) Total adjustments 394,920 136,762 (12,106) 519,576 Net cash provided (used) by operating activities 430,142$ 358,652$ 72,608$ 861,402$ 137 Page 1 of 2 CITY OF MONROE, NORTH CAROLINA AQUATICS AND FITNESS CENTER FUND SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL (NON-GAAP) FOR THE YEAR ENDED JUNE 30, 2019 Variance Budget Actual Over/Under Revenues: Operating revenues: Charges for services: Recreational fees 3,916,000$ 3,931,477$ 15,477$ Other operating revenues 195,700 160,213 (35,487) Total operating revenues 4,111,700 4,091,690 (20,010) Non-operating revenues: Other non-operating revenues 9,050 1,665 (7,385) Investment earnings 33,000 215,304 182,304 Total non-operating revenues 42,050 216,969 174,919 Total revenues 4,153,750 4,308,659 154,909 Other Financing Sources (Uses): Appropriated fund balance 77,916 - (77,916) Total revenues and other financing sources (uses)4,231,666$ 4,308,659$ 76,993$ Expenditures: Operations: Salaries and employee benefits 2,195,193$ 2,132,541$ 62,652$ Operating expenditures 1,762,956 1,524,023 238,933 Total 3,958,149 3,656,564 301,585 Capital outlay 273,517 123,532 149,985 Total expenditures 4,231,666 3,780,096 451,570 Total expenditures and other financing sources (uses)4,231,666$ 3,780,096$ 451,570$ 138 Page 2 of 2 CITY OF MONROE, NORTH CAROLINA AQUATICS AND FITNESS CENTER FUND SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL (NON-GAAP) FOR THE YEAR ENDED JUNE 30, 2019 Reconciliation from Budgetary Basis (Modified Accrual) to Full Accrual: Total revenues and other financing sources (uses) 4,308,659$ Total expenditures and other financing sources (uses)3,780,096 Revenues and other financing sources (uses) over (under) expenditures and other financing sources (uses)528,563 Reconciling items: Capital outlay 123,532 Increase in compensated absences 1,995 Change in deferred outflows of resources - OPEB 212 Change in deferred inflows of resources - OPEB (83,346) Change in OPEB liability (46) Change in deferred outflows of resources - pensions 125,278 Increase in net pension liability (152,972) Change in deferred inflows of resources - pensions 15,609 Depreciation and amortization (306,636) Total reconciling items (276,374) Change in net position 252,189$ 139 Page 1 of 2 CITY OF MONROE, NORTH CAROLINA STORMWATER FUND SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL (NON-GAAP) FOR THE YEAR ENDED JUNE 30, 2019 Variance Budget Actual Over/Under Revenues: Operating revenues: Charges for services: Stormwater receipts 2,185,186$ 2,225,545$ 40,359$ Other operating revenues 16,950 33,300 16,350 Total operating revenues 2,202,136 2,258,845 56,709 Non-operating revenues: Other non-operating revenues 2,005 77,537 75,532 Investment earnings 10,470 115,015 104,545 Total non-operating revenues 12,475 192,552 180,077 Total revenues 2,214,611 2,451,397 236,786 Expenditures: Operations: Salaries and employee benefits 877,479$ 751,745$ 125,734$ Operating expenditures 1,322,808 1,133,564 189,244 Total 2,200,287 1,885,309 314,978 Debt service: Principal retirement 112,285 96,000 16,285 Interest and other charges 18,365 14,817 3,548 Total 130,650 110,817 19,833 Capital outlay 623,254 534,415 88,839 Total expenditures 2,954,191 2,530,541 423,650 Other Financing Sources (Uses): Appropriated fund balance 775,580 - 775,580 Transfers from(to) other funds: Intrafund - Stormwater Capital Project Fund (36,000) (36,000) - Total other financing sources (uses)739,580 (36,000) 775,580 Total expenditures and other financing sources (uses)2,214,611$ 2,566,541$ (351,930)$ 140 Page 2 of 2 CITY OF MONROE, NORTH CAROLINA STORMWATER FUND SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL (NON-GAAP) FOR THE YEAR ENDED JUNE 30, 2019 Reconciliation from Budgetary Basis (Modified Accrual) to Full Accrual: Total revenues and other financing sources (uses) 2,451,397$ Total expenditures and other financing sources (uses)2,566,541 Revenues and other financing sources (uses) over (under) expenditures and other financing sources (uses)(115,144) Reconciling items: Debt principal 96,000 Capital outlay 534,415 Net revenue from capital projects consolidation 507 Project expenses not capitalized (507) Intrafund transfers - Stormwater Capital Project Fund 36,000 Decrease in compensated absences 5,442 Change in deferred outflows of resources - OPEB 93 Change in deferred inflows of resources - OPEB (36,453) Change in OPEB liability (21) Change in deferred outflows of resources - pensions 55,977 Increase in net pension liability (68,349) Change in deferred inflows of resources - pensions 6,974 Depreciation and amortization (114,802) Total reconciling items 515,276 Change in net position 400,132$ 141 CITY OF MONROE, NORTH CAROLINA STORMWATER MANAGEMENT CAPITAL PROJECTS FUNDS CAPITAL PROJECTS SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL (NON-GAAP) FROM INCEPTION AND FOR THE YEAR ENDED JUNE 30, 2019 Project Prior Current Total to Variance Authorization Years Year Date Over/Under Revenues: Restricted intergovernmental 507$ -$ 507$ 507$ -$ Total revenues 507 - 507 507 - Expenditures: Construction in progress 581,000$ 300,436$ 48$ 300,484$ 280,516$ Other costs 507 - 507 507 - Total expenditures 581,507 300,436 555 300,991 280,516 Revenues over (under) expenditures (581,000) (300,436) (48) (300,484) 280,516 Other Financing Sources (Uses): Transfers from (to) other funds: Stormwater Fund 581,000 545,000 36,000 581,000 - Revenues and other financing sources over (under) expenditures and other financing uses -$ 244,564$ 35,952$ 280,516$ 280,516$ Actual 142 Page 1 of 2 CITY OF MONROE, NORTH CAROLINA SOLID WASTE FUND SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL (NON-GAAP) FOR THE YEAR ENDED JUNE 30, 2019 Variance Budget Actual Over/Under Revenues: Operating revenues: Charges for services: Refuse collection fees 2,386,303$ 2,408,501$ 22,198$ Other operating revenues 39,000 26,206 (12,794) Total operating revenues 2,425,303 2,434,707 9,404 Non-operating revenues: Investment earnings 12,275 40,262 27,987 Total revenues 2,437,578$ 2,474,969$ 37,391$ Expenditures: Operations: Salaries and employee benefits 90,383$ 88,911$ 1,472$ Operating expenditures 2,265,382 2,139,129 126,253 Total 2,355,765 2,228,040 127,725 Maintenance: Salaries and employee benefits 103,660 82,999 20,661 Operating expenditures 15,919 13,422 2,497 Total 119,579 96,421 23,158 Total expenditures 2,475,344$ 2,324,461$ 150,883$ Other Financing Sources (Uses): Appropriated fund balance 37,766 - 37,766 Total other financing uses 37,766 - 37,766 Total expenditures and other financing sources (uses)2,437,578$ 2,324,461$ 113,117$ 143 Page 2 of 2 CITY OF MONROE, NORTH CAROLINA SOLID WASTE FUND SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL (NON-GAAP) FOR THE YEAR ENDED JUNE 30, 2019 Reconciliation from Budgetary Basis (Modified Accrual) to Full Accrual: Total revenues, other financing sources (uses) and appropriated fund balance 2,474,969$ Total expenditures 2,324,461 Revenues and other financing sources (uses) over (under) expenditures and other financing sources (uses)150,508 Reconciling items: Depreciation (20,320) Decrease in compensated absences (2,482) Change in OPEB liability (1) Change in deferred outflows of resources - OPEB 4 Change in deferred inflows of resources - OPEB (2,477) Change in deferred outflows of resources - pensions 2,667 Increase in net pension liability (3,255) Change in deferred inflows of resources - pensions 332 Total reconciling items (25,532) Change in net position 124,976$ 144 CITY OF MONROE, NORTH CAROLINA COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS JUNE 30, 2019 Health and Workers' Property and Dental Compensation Liability Fund Fund Fund Total Assets: Current assets: Cash and investments 1,834,032$ 1,079,069$ 893,896$ 3,806,997$ Accounts receivable (net) 546,782 - - 546,782 Prepaids 151,579 10,000 - 161,579 Restricted assets: Deposits 10,169 8,708 - 18,877 Total current assets 2,542,562 1,097,777 893,896 4,534,235 Liabilities: Current liabilities: Accounts payable and accrued liabilities 409,124 4,637 6,346 420,107 Liabilities payable from restricted assets: Deposits 10,169 8,708 - 18,877 Total current liabilities 419,293 13,345 6,346 438,984 Net Position: Unrestricted 2,123,269$ 1,084,432$ 887,550$ 4,095,251$ 145 CHANGES IN FUND NET POSITION Health and Workers' Property and Dental Compensation Liability Fund Fund Fund Total Operating Revenues: Interfund charges and employee contributions 7,211,593$ -$ 732,036$ 7,943,629$ Receipts for interfund charges - 200,000 - 200,000 Other operating revenue 1,138,828 248 38,888 1,177,964 Total operating revenues 8,350,421 200,248 770,924 9,321,593 Operating Expenses: Operating expenses 316,167 104,054 86,787 507,008 Workers' compensation claims and premiums - 165,410 - 165,410 Health care clinic 103,489 - - 103,489 Insurance 15,939 - - 15,939 Health benefit claims and premiums 8,240,623 - - 8,240,623 Property and liability claims and premiums - - 631,885 631,885 Total operating expenses 8,676,218 269,464 718,672 9,664,354 Operating income (loss)(325,797) (69,216) 52,252 (342,761) Non-Operating Revenues: Investment earnings 147,876 70,142 41,931 259,949 Change in net position (177,921) 926 94,183 (82,812) Net Position: Beginning of year, July 1 2,301,190 1,083,506 793,367 4,178,063 End of year, June 30 2,123,269$ 1,084,432$ 887,550$ 4,095,251$ FOR THE YEAR ENDED JUNE 30, 2019 CITY OF MONROE, NORTH CAROLINA COMBINING STATEMENT OF REVENUES, EXPENSES, AND INTERNAL SERVICE FUNDS 146 CITY OF MONROE, NORTH CAROLINA COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE YEAR ENDED JUNE 30, 2019 Health and Workers' Property and Dental Compensation Liability Fund Fund Fund Total Cash Flows from Operating Activities: Cash received for services 6,717,527$ -$ 732,036$ 7,449,563$ Other operating revenue 1,138,828 248 38,888 1,177,964 Receipts for interfund charges - 200,000 - 200,000 Cash paid for goods and services (8,696,571) (266,119) (759,868) (9,722,558) Net cash provided (used) by operating activities (840,216) (65,871) 11,056 (895,031) Cash Flows from Investing Activities: Investment earnings 147,876 70,142 41,931 259,949 Net increase (decrease) in cash and cash equivalents (692,340) 4,271 52,987 (635,082) Cash and Cash Equivalents: Beginning of year, July 1 2,536,541 1,083,506 840,909 4,460,956 End of year, June 30 1,844,201$ 1,087,777$ 893,896$ 3,825,874$ Reconciliation of Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities: Operating income (loss)(325,797)$ (69,216)$ 52,252$ (342,761)$ Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Change in assets and liabilities (Increase) decrease in accounts receivable (473,502) - - (473,502) (Increase) decrease in prepaid expenses (20,564) - - (20,564) Increase (decrease) in accounts payable and accrued liabilities (20,353) 3,345 (41,196) (58,204) Total adjustments (514,419) 3,345 (41,196) (552,270) Net cash provided (used) by operating activities (840,216)$ (65,871)$ 11,056$ (895,031)$ 147 CITY OF MONROE, NORTH CAROLINA HEALTH AND DENTAL FUND SCHEDULE OF REVENUES AND EXPENDITURES - FINANCIAL PLAN AND ACTUAL (NON-GAAP) FOR THE YEAR ENDED JUNE 30, 2019 Financial Variance Plan Actual Over/Under Revenues: Operating revenues: Interfund charges and employee contributions 7,434,128$ 7,211,593$ (222,535)$ Other operating revenue - 1,138,828 1,138,828 Total operating revenues 7,434,128 8,350,421 916,293 Non-operating revenues: Investment earnings 8,000 147,876 139,876 Total revenues 7,442,128 8,498,297 1,056,169 Expenditures: Operating expenditures: Other operating expenses 315,145 316,167 (1,022) Healthcare clinic 124,328 103,489 20,839 Insurance 17,000 15,939 1,061 Health benefit claims and premiums 7,510,455 8,240,623 (730,168) Total operating expenditures 7,966,928 8,676,218 (709,290) Appropriated fund balance 524,800 - 524,800 Revenues over (under) expenditures -$ (177,921)$ (177,921)$ 148 CITY OF MONROE, NORTH CAROLINA WORKERS' COMPENSATION FUND SCHEDULE OF REVENUES AND EXPENDITURES - FINANCIAL PLAN AND ACTUAL (NON-GAAP) FOR THE YEAR ENDED JUNE 30, 2019 Financial Variance Plan Actual Over/Under Revenues: Operating revenues: Interfund charges 200,000$ 200,000$ -$ Other operating revenue - 248 248 Total operating revenues 200,000 200,248 248 Non-operating revenues: Investment earnings 4,530 70,142 65,612 Total revenues 204,530 270,390 65,860 Expenditures: Operating expenditures: Other operating expenses 104,054 104,054 - Workers' compensation claims and premiums paid 441,930 165,410 276,520 Total operating expenditures 545,984 269,464 276,520 Appropriated fund balance 341,454 - (341,454) Revenues over (under) expenditures -$ 926$ 926$ 149 CITY OF MONROE, NORTH CAROLINA PROPERTY AND LIABILITY FUND SCHEDULE OF REVENUES AND EXPENDITURES - FINANCIAL PLAN AND ACTUAL (NON-GAAP) FOR THE YEAR ENDED JUNE 30, 2019 Financial Variance Plan Actual Over/Under Revenues: Operating revenues: Interfund charges and employee contributions 715,536$ 732,036$ 16,500$ Other operating revenue 1,500 38,888 37,388 Total operating revenues 717,036 770,924 53,888 Non-operating revenues: Investment earnings 3,000 41,931 38,931 Total non-operating revenues 3,000 41,931 38,931 Total revenues 720,036 812,855 92,819 Expenditures: Operating expenditures: Other operating expenses 86,787 86,787 - Property and liability claims and premiums 704,643 631,885 72,758 Total expenditures 791,430 718,672 72,758 Other Financing Sources (Uses): Appropriated fund balance 71,394 - (71,394) Revenues over (under) expenditures -$ 94,183$ 94,183$ 150 CITY OF MONROE, NORTH CAROLINA SCHEDULE OF AD VALOREM TAXES RECEIVABLE JUNE 30, 2019 Uncollected Uncollected Balance Collections Balance Fiscal Year June 30, 2018 Additions And Credits June 30, 2019 2018 - 2019 -$ 22,200,574$ 22,024,017$ 176,557$ 2017 - 2018 188,241 - 91,206 97,035 2016 - 2017 108,216 - 42,266 65,950 2015 - 2016 72,469 - 22,494 49,975 2014 - 2015 79,623 - 20,230 59,393 2013 - 2014 95,468 - 17,236 78,232 2012 - 2013 62,362 - 23,239 39,123 2011 - 2012 40,398 - 14,064 26,334 2010 - 2011 42,777 - 8,988 33,789 2009 - 2010 51,436 - 9,460 41,976 2008 - 2009 24,568 - 24,568 - Total 765,558$ 22,200,574$ 22,297,768$ 668,364 Less: Allowance for uncollectible ad valorem taxes receivable 33,418 Ad valorem taxes receivable 634,946$ Reconcilement with Revenues:General Fund Ad valorem taxes - General Fund 22,394,155$ Amounts written off per Statute of Limitations 21,633 Refunds, releases of prior years' taxes 22,014 Interest and advertising cost recovery (140,034) Total collections and credits 22,297,768$ 151 CITY OF MONROE, NORTH CAROLINA ANALYSIS OF CURRENT TAX LEVY CITY-WIDE LEVY FOR THE YEAR ENDED JUNE 30, 2019 Excluding Registered Registered Property Total Motor Motor Valuation Rate Levy Vehicles Vehicles Original Levy: Property taxed at current year's rate 3,453,942,536$ 0.6163$ 21,387,067$ 20,099,898$ 1,287,169$ Registered motor vehicles taxed at prior year's rate 68,680,592 402,674 - 402,674 Total 3,522,623,128 21,789,741 20,099,898 1,689,843 Public Utility Allocation 62,424,144 0.6163$ 384,720 384,720 - Discoveries 16,912,560 0.6163$ 110,631 110,631 - Releases (3,956,526) 0.6163$ (84,518) (84,518) - Total property valuation 3,598,003,306$ Net Levy 22,200,574 20,510,731 1,689,843 Uncollected taxes at June 30, 2019 (176,557) (176,557) - Current Year's Taxes Collected 22,024,017$ 20,334,174$ 1,689,843$ Current Levy Collection Percentage 99.20%99.14%100.00% Secondary Market Disclosures: Property Valuation Rate Levy Assessed Valuation: Assessment Ratio1 100% Real property 2,447,392,973$ Personal property 810,651,303 Public Service Companies2 62,424,143 3,320,468,419 0.6163 20,510,731$ Motor Vehicle Property 277,534,887 0.6163 1,689,843 'Total levy (includes discoveries, releases, and abatements)3 3,598,003,306$ 22,200,574$ Distribution of levy: General Fund 22,200,574$ 1Percentage of appraised value has been established by statute. 2Valuation of railroads, telephone companies and other utilities as determined by the North Carolina Property Tax Commission. 3The levy includes interest and penalties. City-Wide Total Levy Property 152 CITY OF MONROE, NORTH CAROLINA SCHEDULE OF MUNICIPAL SERVICE DISTRICT TAXES RECEIVABLE JUNE 30, 2019 Uncollected Uncollected Balance Collections Balance Fiscal Year June 30, 2018 Additions And Credits June 30, 2019 2018 - 2019 -$ 56,258$ 55,843$ 415$ 2017 - 2018 479 - 428 51 2016 - 2017 72 - - 72 2015 - 2016 58 - 7 51 2014 - 2015 290 - - 290 2013 - 2014 661 - - 661 2012 - 2013 124 - - 124 2011 - 2012 195 - - 195 2010 - 2011 355 - - 355 2009 - 2010 161 - - 161 2008 - 2009 149 - 149 - Total 2,544$ 56,258$ 56,427$ 2,375 Less: Allowance for uncollectible ad valorem taxes receivable 119 Ad valorem taxes receivable 2,256$ Reconcilement with Revenues: Ad valorem taxes - Downtown Monroe Fund 57,037$ Amounts written off per Statute of Limitations 149 Interest and advertising cost recovery (759) Total collections and credits 56,427$ 153 CITY OF MONROE, NORTH CAROLINA ANALYSIS OF CURRENT TAX LEVY MUNICIPAL SERVICE DISTRICT LEVY FOR THE YEAR ENDED JUNE 30, 2019 Property Excluding Registered Registered Property Total Motor Motor Valuation Rate Levy Vehicles Vehicles Original Levy: Property taxed at current year's rate 24,042,118$ 0.219$ 52,867$ 50,983$ 1,884$ Registered motor vehicles taxed at prior year's rate 313,831 687 - 687 Total 24,355,949 53,554 50,983 2,571 Public Utility Allocation 1,184,292 0.219 2,594 2,594 - Discoveries 47,201 0.219 110 110 - Releases - 0.219 - - - Total property valuation 25,587,442$ Net Levy 56,258 53,687 2,571 Uncollected taxes at June 30, 2019 (415) (415) - Current Year's Taxes Collected 55,843$ 53,272$ 2,571$ Current Levy Collection Percentage 99.26%99.23%100.00% Secondary Market Disclosures: Property Valuation Rate Levy Assessed Valuation: Assessment Ratio1 100% Real property 20,935,219$ Personal property 2,293,840 Public Service Companies2 1,184,292 24,413,351 0.219 53,687$ Motor Vehicle Property 1,174,091 0.219 2,571 Total levy (includes discoveries, releases, and abatements)3 25,587,442$ 56,258$ Distribution of levy: Municipal Service District - Downtown Monroe Fund 56,258$ 1Percentage of appraised value has been established by statute. 2Valuation of railroads, telephone companies and other utilities as determined by the North Carolina Property Tax Commission. 3The levy includes interest and penalties. Total Levy City-Wide 154 Statistical Section This part of the City of Monroe’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. Financial Trends – These tables contain trend information to help the reader understand how the City’s financial performance and well being have been changed over time…... ….. ….. ….. ….. Revenue Capacity – These tables contain information to help the reader assess the City’s most significant local revenue source, the property tax….. ….. ….. ….. ….. ….. ….. ….. ….. ….. ….. ….. .. Debt Capacity – These tables 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 – These tables offer demographic and economic indicators to help the reader understand the environment within which the City’s financial activities take place….. ….. ….. ….. ….. ….. ….. ….. ….. ….. … Operation Information – These tables 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….. ….. ….. ….. ….. ….. ….. . Sources: Unless otherwise noted, the information in these tables is derived from the comprehensive annual financial reports to the relevant year. Page 157 162 166 170 173 155                       156 CITY OF MONROE, NORTH CAROLINANET POSITION BY COMPONENTLAST TEN FISCAL YEARS(accrual basis of accounting)(in thousands of dollars)2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Governmental activitiesNet investment in capital assets 73,296$ 71,692$ 70,561$ 69,784$ 69,143$ 69,134$ 68,979$ 68,341$ 69,530$ 71,002$ Restricted 255 670 6,740 5,665 6,484 10,499 7,385 9,813 9,654 16,587 Unrestricted 20,359 20,979 16,261 16,315 18,861 14,429 19,993 13,434 (7,850) (12,946) Total governmental activities net position 93,910$ 93,341$ 93,562$ 91,764$ 94,488$ 94,062$ 96,357$ 91,588$ 71,334$ 74,643$ Business-type activitiesNet investment in capital assets 141,269$ 144,182$ 152,078$ 160,289$ 169,721$ 172,159$ 177,673$ 193,967$ 200,306$ 214,144$ Unrestricted 86,319 94,053 95,183 92,520 93,303 106,769 117,605 116,067 111,837 125,987 Total business-type activities net position 227,588$ 238,235$ 247,261$ 252,809$ 263,024$ 278,928$ 295,278$ 310,034$ 312,143$ 340,131$ Primary governmentNet investment in capital assets 214,565$ 215,874$ 222,639$ 230,073$ 238,864$ 241,293$ 246,652$ 262,308$ 269,836$ 285,146$ Restricted 255 670 6,740 5,665 6,484 10,499 7,385 9,813 9,654 16,587 Unrestricted 106,678 115,032 111,444 108,835 112,164 121,198 137,598 129,501 103,987 113,041 Total primary government net position 321,498$ 331,576$ 340,823$ 344,573$ 357,512$ 372,990$ 391,635$ 401,622$ 383,477$ 414,774$ Notes:Fiscal year 2012 reflects implementation of GASB Statement 54. Prior year amounts have not been restated.The classification of restricted net position amounts is discussed in the notes to the financial statements section I.E.11.FISCAL YEAR157 Page 1 of 2CITY OF MONROE, NORTH CAROLINACHANGES IN NET POSITIONLAST TEN FISCAL YEARS(accrual basis of accounting)(in thousands of dollars)EXPENSES2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Governmental activities:General government4,952$ 5,294$ 5,562$ 4,354$ 4,897$ 4,929$ 7,646$ 5,232$ 4,933$ 3,461$ Transportation5,667 4,699 5,109 4,801 5,216 5,207 5,215 5,307 5,758 4,780 Public safety17,775 18,224 19,512 19,067 19,813 21,069 19,675 23,693 25,300 27,086 Culture and recreation4,906 4,545 5,067 4,069 4,899 5,541 5,389 5,910 5,153 8,743 Economic and physical development1,784 1,119 953 1,016 1,579 1,134 2,070 1,063 1,338 1,075 Interest on long-term debt161 107 54 229 164 186 200 227 200 469 Total governmental activities expenses35,245 33,988 36,257 33,536 36,568 38,066 40,195 41,432 42,682 45,614 Business-type activities:Water and sewer11,520 11,955 11,687 12,356 15,162 10,360 12,281 13,274 12,339 9,975 Electric43,588 46,840 49,158 51,729 55,559 60,881 58,078 60,175 60,764 58,254 Natural gas17,585 13,913 11,131 12,710 14,844 13,790 13,595 12,229 14,105 14,015 Aquatics and Fitness Center3,436 3,549 3,783 4,886 3,607 3,652 3,818 3,849 4,082 4,056 Stormwater1,351 1,709 1,734 1,874 1,674 1,838 1,879 1,976 2,084 2,052 Solid Waste2,702 2,697 2,564 2,213 2,067 2,178 2,303 2,511 2,348 2,350 Airport3,498 3,553 3,611 3,771 3,580 3,405 3,328 3,498 3,706 3,697 Total business-type activities expenses83,680 84,216 83,668 89,539 96,493 96,104 95,282 97,512 99,428 94,399 Total primary government expenses118,925$ 118,204$ 119,925$ 123,075$ 133,061$ 134,170$ 135,477$ 138,944$ 142,110$ 140,013$ PROGRAM REVENUESGovernmental activities:Charges for services:General government1,979$ 1,955$ 1,978$ 2,079$ 2,349$ 2,141$ 2,374$ 2,203$ 2,212$ 2,297$ Transportation236 202 218 203 297 359 375 350 327 371 Public safety2,213 2,312 2,491 2,230 3,055 4,050 4,589 4,161 3,973 4,489 Culture and recreation1,194 1,232 1,289 653 1,499 1,638 1,734 1,728 1,691 1,787 Economic and physical development8 3 2 - - - - - - - Operating grants and contributions:General government- - - - - 75 - - - - Transportation986 1,032 930 978 961 972 972 963 964 957 Public safety732 616 786 312 448 497 318 560 707 894 Culture and recreation195 204 214 223 240 193 193 212 202 206 Economic and physical development326 135 220 264 412 528 547 432 408 412 Capital grants and contributions:General government- - - - 170 - - - - - Transportation1,187 - 478 438 304 196 165 208 1,179 103 Public safety- 49 - - - - - - - - Culture and recreation785 304 - - - - - - 100 - Economic and physical development- - - - - - - - - 10 Total governmental activities program revenues9,841$ 8,044$ 8,606$ 7,380$ 9,735$ 10,649$ 11,267$ 10,817$ 11,763$ 11,526$ FISCAL YEAR158 Page 2 of 2CITY OF MONROE, NORTH CAROLINACHANGES IN NET POSITIONLAST TEN FISCAL YEARS(accrual basis of accounting)(in thousands of dollars)2010201120122013201420152016201720182019Business-type activities:Charge for services:Water and sewer12,365 12,917 13,642 14,000 15,529 16,155 16,743 17,671 17,228 18,671 Electric43,089 48,454 51,334 53,044 58,057 65,732 62,607 65,606 63,853 63,757 Natural gas24,251 17,320 11,907 14,261 17,185 18,053 14,485 15,569 18,101 18,323 Aquatics and Fitness Center3,907 3,927 3,877 4,297 3,588 3,712 4,013 4,097 4,065 4,089 Stormwater1,776 1,794 1,820 1,846 1,897 2,099 2,158 2,211 2,257 2,333 Solid Waste2,839 2,822 2,552 2,214 2,190 2,169 2,312 2,411 2,416 2,434 Airport1,493 1,653 2,012 1,984 1,943 1,927 1,600 1,654 1,944 1,912 Capital grants and contributions:Water and sewer- - - 408 475 - 280 - 6 127 Electric- - - - - - - - 10 346 Natural gas- - - - - - 62 174 - 68 Stormwater- - - 162 - - - - - 1 Solid Waste- - - 75 - - 1 - - - Airport483 2,150 - 235 3,116 139 2,174 2,699 90 891 Total business-type activities program revenues90,203 91,037 87,144 92,526 103,980 109,986 106,435 112,092 109,970 112,952 Total primary government revenues100,044$ 99,081$ 95,750$ 99,906$ 113,715$ 120,635$ 117,702$ 122,909$ 121,733$ 124,478$ NET (EXPENSE) REVENUEGovernmental activities(25,404)$ (25,944)$ (27,651)$ (26,156)$ (26,833)$ (27,417)$ (28,928)$ (30,615)$ (30,919)$ (34,088)$ Business-type activities6,523 6,821 3,476 2,987 7,487 13,882 11,153 14,580 10,542 18,553 Total primary government net (expense) revenue(18,881)$ (19,123)$ (24,175)$ (23,169)$ (19,346)$ (13,535)$ (17,775)$ (16,035)$ (20,377)$ (15,535)$ GENERAL REVENUES AND OTHER CHANGES IN NET POSITIONGovernmental activities:Taxes:Property taxes, levied for general purpose16,954$ 19,314$ 19,357$ 19,434$ 19,767$ 19,375$ 19,605$ 20,176$ 21,078$ 22,358$ Sales and use tax3,537 3,906 4,770 4,906 5,136 5,428 5,249 6,196 6,215 6,654 Utility sales taxes1,721 1,834 1,860 1,951 2,111 2,813 2,905 3,128 3,078 3,118 Motor vehicle tax125 130 125 129 197 143 140 678 842 834 Beer & wine and telecommunications tax566 657 620 564 570 568 496 490 463 444 Gross receipts tax46 49 55 56 63 68 77 98 104 112 Other licenses and fees720 1,085 1,403 1,210 869 879 - - - - Grants and contributions not restricted tospecific programs242 218 178 173 - - - - - - Unrestricted investment earnings273 65 822 (544) 366 680 1,946 (723) (616) 3,418 Miscellaneous565 726 807 1,002 1,192 1,095 580 631 744 1,375 Gain on sale of capital assets96 11 - 116 - - - - - - Transfers(710) (2,619) (2,126) (4,640) (714) (1,267) 225 (1,845) (1,279) (916) Total governmental activities24,134 25,376 27,871 24,357 29,557 29,782 31,223 28,829 30,629 37,397 Business-type activities:Unrestricted investment earnings971 289 2,936 (1,698) 1,493 1,735 5,144 (2,072) (1,398) 8,003 Interest earnings on interfund loans- - - 113 88 64 39 81 75 68 Miscellaneous395 858 443 390 433 192 238 323 466 448 Gain on sale of capital assets291 60 45 14 - - - - - - Transfers710 2,619 2,126 4,640 714 1,267 (225) 1,845 1,279 916 Total business-type activities2,367 3,826 5,550 3,459 2,728 3,258 5,196 177 422 9,435 Total primary government26,501$ 29,202$ 33,421$ 27,816$ 32,285$ 33,040$ 36,419$ 29,006$ 31,051$ 46,832$ CHANGE IN NET POSITIONGovernmental activities(1,270)$ (568)$ 220$ (1,799)$ 2,724$ 2,365$ 2,295$ (1,786)$ (290)$ 3,309$ Business-type activities8,890 10,647 9,026 6,446 10,215 17,140 16,349 14,757 10,964 27,988 Total primary government7,620$ 10,079$ 9,246$ 4,647$ 12,939$ 19,505$ 18,644$ 12,971$ 10,674$ 31,297$ Notes:Internal service funds were established in 2009. Per GASB, revenues for these funds are allocated between business type and governmental type activities.FISCAL YEAR159 CITY OF MONROE, NORTH CAROLINAFUND BALANCES, GOVERNMENTAL FUNDSLAST TEN FISCAL YEARS(modified accrual basis of accounting)(in thousands of dollars)2010 2011 2012 2013 2014 2015 2016 2017 2018 2019General FundReserved4,012$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Unreserved15,614 - - - - - - - - - Nonspendable-$ 331$ 339$ 256$ 1,138$ 282$ 901$ 1,094$ 827$ 856$ Restricted- 4,130 6,009 5,664 4,840 4,951 5,846 7,554 7,989 8,879 Assigned- 2,975 9,134 11,679 12,457 13,763 18,885 13,521 14,508 15,543 Unassigned- 13,042 5,827 3,607 6,533 8,067 4,337 5,152 5,239 8,169 Total General Fund19,626$ 20,478$ 21,309$ 21,206$ 24,968$ 27,063$ 29,969$ 27,321$ 28,563$ 33,447$ All Other Governmental FundsReserved233$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Unreserved, reported in:Special Revenue Funds1,609 - - - - - - - - - Capital Projects Funds(114) - - - - - - - - - Nonspendable- - - 1 13 1 11 1 4 - Restricted- --- 1,758 5,548 1,705 2,857 2,399 10,966 Committed- ---588 996 1,690 3,843 4,107 213 Assigned- 1,281 1,560 2,026 102 113 192 199 117 495 Unassigned- ---(2) (46) - - - - Total all other governmental funds1,728$ 1,281$ 1,560$ 2,027$ 2,459$ 6,612$ 3,598$ 6,900$ 6,627$ 11,674$ Notes:Fiscal year 2011 reflects implementation of GASB Statement 54. Prior year amounts have not been restated.The classification of fund balance amounts is discussed in the notes to the financial statements section I.E.11.FISCAL YEAR160 CITY OF MONROE, NORTH CAROLINACHANGES IN FUND BALANCES , GOVERNMENTAL FUNDSLAST TEN FISCAL YEARS(modified accrual basis of accounting)(in thousands of dollars)2010 2011 2012 2013 2014 2015 2016 2017 2018 2019REVENUESAd valorem taxes 16,909$ 19,217$ 19,426$ 19,443$ 19,788$ 19,409$ 19,744$ 20,285$ 21,208$ 22,451$ Other taxes and licenses874 1,249 1,313 1,558 1,497 1,087 219 778 949 948 Unrestricted intergovernmental6,044 6,586 7,408 7,567 7,952 8,967 8,839 9,987 9,991 10,433 Restricted intergovernmental3,274 2,399 2,217 1,846 2,060 2,461 2,194 2,375 3,551 2,571 Program income7 2 2 - - - - - - - Sales and services1,740 1,708 1,766 1,420 1,921 1,944 2,469 2,282 2,521 2,529 Investment earnings273 64 822 (544) 481 646 1,842 (669) (578) 3,236 Miscellaneous548 747 793 747 779 989 395 461 525 1,170 Total revenues29,669 31,972 33,747 32,037 34,478 35,503 35,702 35,499 38,167 43,338 EXPENDITURESGeneral government 4,170 3,410 3,327 2,052 2,796 1,729 888 2,913 2,882 627 Transportation1,727 1,484 1,802 1,970 1,979 1,957 2,400 2,346 2,610 2,243 Public safety14,385 14,332 15,654 15,147 15,394 16,250 14,599 17,430 18,121 18,055 Culture and recreation3,554 3,894 3,896 3,018 3,930 4,127 4,084 3,655 3,006 4,258 Economic and physical development1,909 2,045 951 1,415 1,614 2,864 5,157 2,684 2,848 6,133 Capital outlay2,832 1,091 2,298 2,806 2,076 4,158 7,483 4,335 6,654 8,373 Debt service:Principal retirement1,922 1,962 1,685 1,311 1,124 1,193 1,248 1,198 1,213 1,166 Interest and other charges337 61 54 229 164 186 199 227 200 489 Total expenditures30,836 28,279 29,667 27,948 29,077 32,464 36,058 34,788 37,534 41,344 Excess (deficiency) of revenues over(under) expenditures(1,167) 3,693 4,080 4,089 5,401 3,039 (356) 711 633 1,994 OTHER FINANCING SOURCES (USES)Transfers from (to) others(710) (3,419) (2,548) (3,725) (2,057) (1,267) 249 (1,845) (1,279) (916) Repayment of advance from other funds(131) (131) - - - - - - - - Limited obligation bonds issued, including premiums- - - - - - - - - 8,217 Installment purchase obligations issued475 263 748 - 850 4,476 - 1,788 1,614 635 Total other financing sources (uses)(366) (3,287) (1,800) (3,725) (1,207) 3,209 249 (57) 335 7,936 Net change in fund balances(1,533)$ 406$ 2,280$ 364$ 4,194$ 6,248$ (107)$ 654$ 968$ 9,930$ Debt service as a percentage of noncapital expenditures8.07% 7.44% 6.35% 6.13% 4.77% 4.87% 5.06% 4.68% 4.58% 5.02%FISCAL YEAR161 CITY OF MONROE, NORTH CAROLINAASSESSED VALUE AND ACTUAL VALUE OF TAXABLE PROPERTYLAST TEN FISCAL YEARS(in thousands of dollars)TotalPublic Total DirectFiscal Commercial Residential Motor Service Assessed Tax RateYear Vehicle Other Companies Value (2)2010 1,097,648$ 1,288,641$ 186,439$ 765,537$ 60,724$ 3,398,989$ 0.4964$ 2011 1,133,184 1,296,350 189,559 777,420 69,218 3,465,731 0.5547 2012 1,151,666 1,298,253 197,410 761,938 66,714 3,475,981 0.5549 2013 1,172,544 1,308,774 219,424 740,811 66,312 3,507,865 0.5527 2014 1,162,848 1,326,417 393,733 742,552 63,594 3,689,144 0.5435 2015 1,156,965 1,347,344 277,624 661,619 61,545 3,505,097 0.5495 2016 1,122,222 1,223,096 303,873 667,684 62,807 3,379,682 0.5780 2017 1,127,552 1,244,699 275,945 703,452 63,375 3,415,023 0.5624 2018 1,153,295 1,268,456 287,062 807,840 65,122 3,581,775 0.5861 2019 1,220,489 1,247,839 278,709 812,945 63,608 3,623,590 0.6142 Notes:(1) A county-wide property revaluation was done in 2015 and is reflected in the fiscal year 2016 assessed values. This valuation is required by law to be done at least every 8 years, but may be done more often. The last revaluation was in 2008.(2) Property is assessed at actual value; therefore, the assessed value is equal to actual value. Tax Rates are per $100 of assessed value.Sources:Union County Tax Assessor's Office and North Carolina Property Tax Commission.Personal PropertyReal Property(1)162 CITY OF MONROE, NORTH CAROLINADIRECT AND OVERLAPPING PROPERTY TAX RATESLAST TEN YEARS(rate per $100 of assessed value)TotalGeneral Municipal Total Union Direct andFiscal Fund Service District Weighted County OverlappingYear Basic Rate Basic RateAverage Rate(1)Basic RateRates2010 0.4950$ 0.2000$ 0.4964$ 0.6650$ 1.1614$ 20110.5550 0.2000 0.5547 0.6650 1.2197 20120.5550 0.2000 0.5549 0.6650 1.2199 20130.5550 0.2000 0.5527 0.6600 1.2127 20140.5550 0.2000 0.5435 0.6600 1.2035 20150.5550 0.2000 0.5495 0.7614 1.3109 20160.5863 0.2190 0.5780 0.7765 1.3545 20170.5863 0.2190 0.5624 0.7665 1.3289 20180.5863 0.2190 0.5861 0.7810 1.3671 20190.6163 0.2190 0.6142 0.7309 1.3451 Notes:(1) Total City tax rate is a weighted average of all types of City of Monroe tax rates. Union County rate is a direct rate.Source: Union County, Tax Assessment DivisionCity of MonroeOverlapping Rate163 CITY OF MONROE, NORTH CAROLINAPRINCIPAL PROPERTY TAXPAYERSCURRENT YEAR AND NINE YEARS AGO(in thousands of dollars)2019Percentage Percentageof ofTotal TotalTaxable Taxable Taxable TaxableAssessed Assessed Assessed AssessedTaxpayer Value Rank Value Value Rank ValueATI Specialty Materials (Allvac) 251,325$ 1 7.4% 232,125$ 1 6.4%Charlotte Pipe & Foundry Co. 115,370 2 3.4% 126,312 2 3.5%Tyson Farms, Inc. (Tyson Foods, Inc.) 44,034 3 1.3% 45,446 3 1.3%Consolidated Metco, Inc. 34,434 5 1.0% 41,188 4 1.1%Glenmark Pharmaceuticals - - 40,735 5 1.1%Greiner Bio-One 20,302 8 0.6% 37,099 6 1.0%O'Neil Digital Solutions, LLC - - 33,194 7 0.9%Inland American Monroe Poplin 33,677 6 1.0% 31,324 8 0.9%Goulston Technologies - - 27,884 9 0.8%Wal-Mart - - 22,609 10 0.6%Yale Security (Assa Abloy - Door Security) 24,512 7 0.7% - -Scott Technologies 19,623 9 0.6% - -Monroe Mall (Madison) 18,314 10 0.5% - -Turbomeca 36,426 4 1.1% - -Total598,017$ 17.6%637,916$ 17.6%City of Monroe Tax System Source: 2010164 CITY OF MONROE, NORTH CAROLINAPROPERTY TAX LEVIES AND COLLECTIONSLAST TEN FISCAL YEARS(in thousands of dollars)TaxesTaxes Public Levied for the Collections in PercentageFiscal Levied for the Utility Fiscal Year Percentage Subsequent of AdjustedYear Fiscal Year Allocation Discoveries Abatements (Adjusted) Amount of LevyYears Amount Levy2010 16,490$ 300$ 160$ 78$ 16,872$ 16,292$ 96.56% 538$ 16,830$ 99.75%2011 18,859 384 69 88 19,224 18,646 96.99 544 19,190 99.822012 18,962 362 299 335 19,288 18,780 97.37 481 19,261 99.862013 18,983 361 130 86 19,388 18,887 97.42 462 19,349 99.802014 19,712 348 81 89 20,052 19,295 96.22 678 19,973 99.612015 18,915 336 66 57 19,260 18,888 98.07 312 19,200 99.692016 19,279 363 69 178 19,533 19,270 98.65 213 19,483 99.742017 19,581 367 133 103 19,978 19,752 98.86 160 19,912 99.672018 20,338 377 315 35 20,995 20,806 99.10 92 20,898 99.542019 21,843 387 111 85 22,256 22,080 99.20 - 22,080 99.20Source: City of Monroe Tax System the LevyCollected within theFiscal Year ofTotal Collections to Date165 CITY OF MONROE, NORTH CAROLINARATIOS OF OUTSTANDING DEBT BY TYPELAST TEN FISCAL YEARS(dollars in thousands, except per capita)PercentageofInstallmentLimited LimitedState Installment TotalPerPersonalFiscalPurchaseObligation Obligation Revenue Revolving Purchase Primary Capita IncomeYearObligations BondsBonds Bonds Loans Obligations Government (1)(1)20108,209$ -$ -$ 51,320$ 4,278$ 36,291$ 100,098$ 2,626$ 1.45%20116,736 - - 48,980 3,451 35,134 94,301 2,857 1.2920126,024 - - 47,425 4,654 32,671 90,774 2,731 1.1420134,303 - - 45,707 8,504 32,206 90,720 2,732 1.0820144,322 - - 43,394 10,592 30,693 89,001 2,681 0.9920157,605 - - 41,001 9,470 29,569 87,645 2,575 0.9020166,357 - 30,215 38,528 8,718 2,404 86,222 2,512 0.8220176,947 - 29,887 37,251 8,179 1,530 83,794 2,413 0.732018 (2) 7,349 - 38,163 48,553 7,698 1,289 103,052 2,941 -2019 (2) 6,818 8,196 37,768 45,324 7,217 413 105,736 2,993 - Notes:Details regarding the City's outstanding debt can be found in the notes to the financial statements.(1) Personal income and population data are on the Demographic and Economic Statistics table. These ratios are calculated using personal income and population for prior calendar year. Calendar year 2017 and 2018 personal income not available to calculate fiscal year 2018 and 2019.(2) Personal income not available for 2018 and 2019. Governmental ActivitiesBusiness-type Activities166 CITY OF MONROE, NORTH CAROLINADIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBTAS OF JUNE 30, 2019(in thousands of dollars)EstimatedEstimated Share ofDebt Percentage Direct andOutstanding Applicable Overlapping(1) (2) DebtUnion County, overlapping debt 328,978$ 13.8% 45,442$ Total direct debt 15,014 100%15,014 Total direct and overlapping debt 343,992$ 60,456$ Notes: (1) Includes governmental activities debt only.(2)Determined by ratio of assessed value of property subject to taxation in Union County ($26,233,277,057)and City of Monroe ($3,623,590,748).Source:Union County Administrative Services Finance DivisionGovernmental Unit167 CITY OF MONROE, NORTH CAROLINALEGAL DEBT MARGIN INFORMATIONLAST TEN FISCAL YEARS(in thousands of dollars)2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Debt limit (8% of assessed value) 271,919$ 277,258$ 278,078$ 280,629$ 295,131$ 280,408$ 270,375$ 284,215$ 286,542$ 289,887$ Total net debt applicable to limit44,500 41,871 38,500 36,509 35,014 37,175 38,976 38,364 46,801 53,195 Legal debt margin227,419$ 135,387$ 238,578$ 244,120$ 260,117$ 243,233$ 231,399$ 245,851$ 239,741$ 236,692$ Total net debt applicable to the limit as a percentage of debt limit16.37% 15.10% 14.20% 13.01% 11.86% 13.26% 14.42% 13.50% 16.33% 18.35%Assessed value3,623,591$ Debt limit (8% of total assessed value)289,887 Bonded debt -$ Debt not evidenced by bonds53,195 Gross debt53,195$ Less: deductions allowed by North Carolina General Statutes:Bonded debt incurred for water purposes- Bonded debt incurred for sewer purposes- Total deductions- Net debt applicable to limit53,195 Legal debt margin236,692$ Note:NC Statute GS 159-55 limits the City's debt to 8% of the appraised value of property subject to taxation.The following deductions are made from gross to arrive at net debt applicable to the limit: money heldfor payment of principal; debt incurred for water, sewer, gas, or electric purposes; uncollected specialassessments, funding and refunding bonds not yet issued; and revenue bonds. The legal debt marginis the difference between the debt limit and the City's net debt outstanding applicable to the limit, andrepresents the City's legal borrowing authority.Legal Debt MarginCalculation for Fiscal Year 2019FISCAL YEAR168 CITY OF MONROE, NORTH CAROLINAPLEDGED-REVENUE COVERAGELAST TEN FISCAL YEARS(in thousands of dollars)Less IncomeOperating Nonoperating Available forOperating Expenses Operating Revenues DebtRevenues (1) Income (2) Service Principal Interest Coverage75,197$ 67,175$ 8,022$ 939$ 8,961$ 2,005$ 2,399$ 203%80,045 66,284 13,761 277 14,038 2,772 2,461 26878,729 65,795 12,935 2,808 15,742 3,112 1,966 31083,091 70,200 12,891 (1,642) 11,249 2,917 2,132 22391,644 78,463 13,181 1,442 14,623 3,002 2,020 291101,194 77,381 23,813 1,679 25,493 3,386 2,158 46095,008 76,367 18,641 4,957 23,597 3,107 1,994 463100,293 77,953 22,340 (1,984) 20,356 3,009 1,324 470101,170 79,604 21,566 (1,327) 20,239 3,056 1,719 424102,684 73,926 28,757 7,632 36,390 3,346 2,082 670Notes:Details regarding the City's outstanding debt can be found in the notes to the financial statements.(1) Per rate covenants, this does not include the annual depreciation and amortization expense.(2) Per rate covenants, this includes investment earnings only.Fiscal2019201020112012201320142015201620182017YearDebt Service169 CITY OF MONROE, NORTH CAROLINADEMOGRAPHIC AND ECONOMIC STATISTICSLAST TEN FISCAL YEARS(County)Personal (County) (County)Income Per Capita Public (County)(City) (thousands of Personal School UnemploymentPopulation dollars) Income Enrollment Rate(2) (3) (3) (4) (5)38,120 6,912,014$ 34,184$ 39,366 9.50%33,007 7,304,614 35,552 39,900 9.4033,238 7,950,910 38,130 40,359 8.6033,201 8,386,195 39,417 40,958 8.0033,708 8,997,563 41,166 42,047 5.7034,032 9,726,903 43,669 42,035 5.1034,323 10,479,508 46,246 42,552 4.5034,725 11,486,771 49,648 41,541 3.70(1) 35,034 - - 41,509 3.70(1) 35,330 - - 41,372 3.90Note:(1) Personal income not available for 2018 and 2019.Sources:(2) North Carolina Office of State Budget and Management (3) US Department of Commerce - Bureau of Economic Analysis(4) Union County Public Schools(5) Employment Security Commission of North CarolinaFiscal201120192010Year2015201720132014201820122016170 CITY OF MONROE, NORTH CAROLINAPRINCIPAL EMPLOYERSCURRENT YEAR AND NINE YEARS AGOPercentage of Percentage ofTotal City Total CityEmployment EmploymentEmployerEmployees(1)Employees(2)Tyson Foods 1,450 10.9% 1,850 10.3%ATI Specialty Materials 1,060 8.0% 1,800 10.0%Atrium (formerly Carolinas Medical Center-Union) 956 7.2% 1,400 7.8%Union County 573 4.3% 1,049 5.8%Charlotte Pipe 505 3.8% 550 3.1%3M Scott Safety 500 3.8% 550 3.1%City of Monroe 460 3.5% 473 2.6%Wal-Mart Stores, Inc. 350 2.6% 400 2.2%Greiner Bio-One - 0.0% 350 1.9%Windsor Windows - 0.0% 350 1.9%Circor (formerly IMO Industries) 240 1.8% 294 1.6%UTC Aerospace (formerly Goodrich Corporation) 240 1.8% 220 1.2%Total 6,334 47.7% 9,286 51.6%Notes: (1) Percentage of total city employment based on North Carolina Employment Security Commission labor force estimate of 13,325 as of June 30, 2010.(2) Percentage of total city employment based on North Carolina Employment Security Commission labor force estimate of 18,000 as of June 30, 2019.Source: Monroe - Union County Economic Development20192010171 CITY OF MONROE, NORTH CAROLINACONSTRUCTION INFORMATIONLAST TEN YEARS(in thousands of dollars)Fiscal Number of Value ofNumber ofValue ofYear Permits Permits Permits Permits2010 67 9,031,198$ 363 12,864,800$ 2011 111 22,327,324 147 11,937,410 2012 87 32,422,060 225 13,845,321 2013 164 63,765,204 242 15,483,164 2014 163 25,520,277 314 13,290,139 2015 127 33,105,651 241 13,210,150 2016 212 150,064,502 (2)284 25,921,890 2017117 39,677,101 251 18,479,618 2018114 96,256,468 (2)224 14,695,332 2019168 147,102,550 (2)148 13,805,184 Notes:(1) Includes new residential dwellings (each residential unit in a multi-family requires a separate permit)(2) Several large non-residential projects were issued permits in 2016, 2018 and 2019.Source:City Planning DepartmentResidential (1)Non-Residential172 CITY OF MONROE, NORTH CAROLINAFULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTIONLAST TEN FISCAL YEARSFunction2010 2011 2012 2013 2014 2015 2016 2017 2018 2019General Government:Administration28 27 28 29 30 29 28 30 30 29Planning and zoning11887777888Engineering10 10 109999999Utility/tax billing and collection18 19 17 17 18 19 19 19 19 19Purchasing/Fleet/Warehouse9999999999Transportation24 19 19 19 19 19 19 19 19 19Police (1)101 104 104 98 98 99 99 99 103 104Fire (2)84 82 82 79 79 80 81 81 81 84Building standards and code enforcement11466677888Culture and recreation39 38 40 41 37 37 38 38 37 37Water and sewer:Distribution system34 34 34 34 34 34 35 35 35 35Water filter plant11 11 12 12 12 12 12 12 12 12Waste treatment plant14 14 14 14 14 14 14 15 15 15Stormwater9 11 10 10 11 11 11 11 11 12Electric27 28 28 29 29 29 31 32 32 34Natural gas14 13 14 14 14 14 15 15 18 18Solid Waste (3)1 - 11111133Aquatics and Fitness Center10 10 11 11 11 11 11 11 11 11Airport9997777777Total464 450 456 446 445 448 453 459 467 473Note:(1) In 2018, four additional police officers were added through funding from a COPS Hiring grant.(2) In 2019, three full time firefighters were added through funding from a SAFER grant.(3) In 2018, two full time positions were added to Solid Waste for Community Maintenance.Source:City of Monroe payroll system.FISCAL YEAR173 CITY OF MONROE, NORTH CAROLINAOPERATING INDICATORS BY FUNCTIONLAST TEN FISCAL YEARS(if available or unless otherwise noted)2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Transportation:Street reclamation (tons) (1) 2,858 2,295 2,720 2,503 1,730 2,400 2,272 1,229 1,023 197 Street repair (tons)595 456 915 929 1,012 710 532 272 398 311 Utility repair (tons)527 780 1,019 868 784 406 381 417 928 787 Sidewalk repair (cubic yards concrete)66 116 271 178 329 323 137 166 96 130 Pipe repair and replacement (linear feet)2,132 2,526 2,151 1,300 832 853 1,129 1,938 2,737 1,653 Police: Physical arrests (calendar year)3,204 3,132 3,025 2,367 1,852 2,336 2,158 2,494 2,487 - Parking violations (calendar year)3,510 3,558 3,074 3,346 3,138 2,395 2,181 2,625 2,951 - Traffic violations (calendar year)6,368 9,179 6,704 6,305 5,742 5,565 5,056 4,800 5,994 - Fire:Calls for service (calendar year)5,514 5,699 5,714 5,734 5,811 6,269 6,170 7,049 6,920 - Fire code inspections (calendar year)1,220 1,244 1,343 1,114 961 1,185 2,267 2,105 1,726 - Civilian fire injuries (calendar year)2 2 4 - 5 4 2 3 6 - Building standards & code enforcement:Building permits issued2,876 2,701 3,901 3,771 3,429 3,740 4,416 4,250 3,666 3,367 Building inspections 7,553 7,009 7,300 7,411 8,331 8,475 9,865 8,659 8,915 9,447 Code enforcement inspections 6,422 1,750 2,415 1,938 1,240 1,687 2,994 3,091 2,560 4,029 Environmental protection: (2)Solid waste collected (annual tonnage)34,155 31,968 24,405 8,609 9,989 9,576 9,218 9,696 9,735 9,435 Recyclables collected (annual tonnage)788 748 626 1,467 1,976 2,015 1,912 1,870 1,897 2,258 Culture and recreation:Rounds of golf played (calendar year)26,556 26,565 27,105 27,492 32,598 33,035 36,717 36,381 33,858 - Aquatics and fitness center members20,444 19,972 19,628 19,814 19,169 20,377 20,778 21,526 21,625 21,593 Youth athletic program participants (calendar year)400 335 467 572 510 456 428 379 501 - Water:Average daily production (millions of gallons per day)5.8 6.0 6.2 5.8 6.1 6.6 6.5 6.6 6.2 6.1 Maximum daily production (millions of gallons per day)9.1 9.1 9.1 8.5 8.3 9.3 9.1 8.2 9.1 8.2 Customers 11,462 11,478 11,630 11,700 11,842 11,971 12,217 12,355 12,533 12,596 Gallons Billed (in thousands)1,748,800 1,803,119 1,820,040 1,798,377 1,782,067 1,889,153 1,856,038 1,935,186 1,938,273 1,922,676 Sewer:Average daily treatment (millions of gallons per day)6.8 5.8 5.7 6.6 7.2 6.9 7.3 6.1 5.4 7.9 Customers9,959 9,970 10,099 10,120 10,223 10,363 10,631 10,754 10,921 10,981 Gallons Billed (in thousands)2,016,900 2,005,753 2,012,091 2,063,159 2,204,230 2,248,645 2,268,665 2,208,168 2,218,285 2,550,976 Electric:Sales (megawatt hours)591,112 645,072 653,004 638,273 654,969 710,133 669,778 711,165 718,185 706,091 Customers 10,324 10,300 10,369 11,685 11,675 11,785 11,916 12,005 12,071 12,154 Natural gas:Sales/deliveries (thousand cubic feet)273,909 308,852 287,804 297,961 316,633 326,144 306,735 308,356 343,814 341,222 Customers10,216 10,221 10,667 10,512 10,599 10,795 11,033 11,236 11,374 11,486 Airport:Fuel sales (thousands of gallons)340 331 309 294 279 326 290 382 350 325 Based aircraft97 92 87 94 103 102 82 83 115 107 Notes:(1) Street reclamation crew was pulled to work on utility cuts during fiscal year 2019 resulting in the decrease in that year. (2) The City of Monroe stopped providing commercial dumpster collection services in 2012. The Cityof Monroe now provides 95 gallon recycling carts verses 18 gallon bins.Sources:Various City departments.FunctionFISCAL YEAR174 CITY OF MONROE, NORTH CAROLINACAPITAL ASSET STATISTICS BY FUNCTIONLAST TEN FISCAL YEARS(unless otherwise noted)2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Transportation:Municipal Boundary (square miles) 29.63 29.63 29.63 29.63 29.63 29.63 29.63 29.63 30.05 30.34Streets (miles) 166 166 167 169 170 170 170 170 170 170Sidewalks (miles) 61 61 62 63 64 64 64 64 65 65Curb and gutter (miles) 127 127 128 130 131 131 131 131 132 133Stormwater (miles) 34 34 35 35 36 36 36 36 51 56Bridges (square feet) 15,884 15,884 15,884 15,884 15,884 15,884 15,884 15,884 15,884 15,884Speed humps/cushions (each) 279 286 301 309 330 336 343 355 358 372Public safety:Police stations 1 1 1 1 1 1 1 1 1 1 Patrol vehicles92 92 92 92 92 92 92 96 96 96 Fire stations5 5 5 5 5 5 5 5 5 5 Fire apparatus (line and reserve)14 14 15 15 15 15 18 18 18 18 Culture and recreation:Acreage (city limits)552 552 552 552 552 552 552 552 554 555 Aquatics and Fitness Center1 1 1 1 1 1 1 1 1 1 Playgrounds (1)8 8 8 8 8 8 8 9 9 9 Gymnasiums4 4 4 4 4 4 4 4 4 4 Basketball courts11 11 11 11 11 11 11 11 11 11 Tennis courts (2)10 10 10 10 10 8 8 6 6 6 Playing fields (baseball/soccer/football)20 20 20 20 20 20 20 20 20 20 Swimming pools3 3 3 3 3 3 3 3 3 3 Golf course1 1 1 1 1 1 1 1 1 1 Driving range1 1 1 1 1 1 1 1 1 1 Greenway (miles) 0.5 0.5 0.5 0.5 0.5 2.0 2.0 3.1 4.3 4.3 Water:Water mains (miles)291 291 291 291 291 291 291 292 293 293Treatment capacity (millions of gallons per day) (3)11111111 12.99 12.99 12.99 12.99 12.99 12.99Sewer:Sanitary sewers (miles)295 295 295 295 295 295 295 295 295 294Treatment capacity (millions of gallons per day)10.4 10.4 10.4 10.4 10.4 10.4 10.4 10.4 10.4 10.4Electric:Substations (4)9 9 9 9 9 7 7 7 7 7 Lines (miles per calendar year)293 293 285 285 286 289 291 293 294 - Natural gas:Lines (miles per calendar year)443 449 455 455 457 464 468 473 477 - Airport:Runway (feet) (5)5,500 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 Hangars (square feet) (6)87,603 87,603 87,603 87,603 87,603 87,603 87,603 87,603 87,603 97,603 Notes:(1) In 2017, a new playground was added at the Dickerson Center.(2) In 2017, tennis courts at Sutton Park were replaced with a covered shelter.(3)In 2014, additional water supply became available via a water supply agreement with Union County. The agreement provides a guaranteed 1.99 MGD of watersupply to the City, and the agreement term is in perpetuity, or 99 years if perpetuity is challenged. This water supply is delivered from the Catawba River WTP (CRWTP)which is co-owned by Union County and Lancaster County, South Carolina. The 1.99 MGD represents a 5.53% interest in the CRWTP.(4) In 2014, as part of the electric systems ongoing work to retire old 4KV facilities, two 4KV substations were retired.(5)In 2011, an extension of runway 5 was completed.(6) In addition to City owned hangars, there are three private hangars on airport property. These private hangar leases will expire in February 2026, July 2037 and November 2053.In 2019, a new 10,000 square foot City owned hangar was completed and is currently being leased.Sources:Various City departments.FISCAL YEARFunction175                       176 730 13th Avenue Drive SE ♦ Hickory, NC 28602 ♦ 828-327-2727 ♦ Fax 828-328-2324 13 South Center Street ♦ Taylorsville, NC 28681 ♦ 828-632-9025 ♦ Fax 828-632-9085 800-948-0585 ♦ www.martinstarnes.com 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 Independent Auditor’s Report To the Honorable Mayor and Members of the City Council City of Monroe Monroe, 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 accompanying financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Monroe, North Carolina, as of and for the year ended June 30, 2019, and the related notes to the financial statements which collectively comprise the City’s basic financial statements, and have issued our report thereon dated October 17, 2019. Our report includes a reference to other auditors who audited the financial statements of the City of Monroe ABC Board, as described in our report on the City of Monroe’s financial statements. The financial statements of the City of Monroe ABC Board and the Monroe Tourism Development Authority were not audited in accordance with Government Auditing Standards. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the City of Monroe’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 of Monroe’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City of Monroe’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 combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the City of Monroe’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination or deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. 177 Our consideration of internal control over financial reporting 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 financial reporting that might be material weaknesses or significant deficiencies. Given these limitations, 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 of Monroe’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, non-compliance 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 non-compliance 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 results of that testing, and not to provide an opinion on the effectiveness or 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. Martin Starnes & Associates, CPAs, P.A. Hickory, North Carolina October 17, 2019 178 730 13th Avenue Drive SE ♦ Hickory, NC 28602 ♦ 828-327-2727 ♦ Fax 828-328-2324 13 South Center Street ♦ Taylorsville, NC 28681 ♦ 828-632-9025 ♦ Fax 828-632-9085 800-948-0585 ♦ www.martinstarnes.com Report On Compliance For Each Major Federal Program; Report On Internal Control Over Compliance; In Accordance With Uniform Guidance; And the State Single Audit Implementation Act Independent Auditor’s Report To the Honorable Mayor and Members of the City Council City of Monroe Monroe, North Carolina Report on Compliance for Each Major Federal Program We have audited the City of Monroe’s compliance with the types of compliance requirements described in the OMB Compliance Supplement and 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 of Monroe’s major federal programs for the year ended June 30, 2019. The City of Monroe’s major federal programs are identified in the summary of auditor’s results section of the accompanying Schedule of Findings, Responses, and Questioned Costs. Management’s Responsibility Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs. Auditor’s Responsibility Our responsibility is to express an opinion on compliance for each of the City of Monroe’s major federal 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 the audit 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. 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 non-compliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the City of Monroe’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. 179 We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of the City of Monroe’s compliance. Opinion on Each Major Federal Program In our opinion, the City of Monroe 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 federal programs for the year ended June 30, 2019. Report on Internal Control Over Compliance Management of the City of Monroe 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 of Monroe’s internal control over compliance with the types of requirements that could have a direct and material effect on a major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal 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 of Monroe’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, non-compliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material non-compliance with a type of compliance requirement of a federal 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 a combination or deficiencies, in internal control over compliance with a type of compliance requirement of a federal 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 material weaknesses or significant deficiencies. 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. Martin Starnes & Associates, CPAs, P.A. Hickory, North Carolina October 17, 2019 180 730 13th Avenue Drive SE ♦ Hickory, NC 28602 ♦ 828-327-2727 ♦ Fax 828-328-2324 13 South Center Street ♦ Taylorsville, NC 28681 ♦ 828-632-9025 ♦ Fax 828-632-9085 800-948-0585 ♦ www.martinstarnes.com Report On Compliance For Each Major State Program; Report On Internal Control Over Compliance; In Accordance With Uniform Guidance; And The State Single Audit Implementation Act Independent Auditor’s Report To the Honorable Mayor and Members of the City Council City of Monroe Monroe, North Carolina Report on Compliance for Each Major State Program We have audited the City of Monroe’s 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 of Monroe’s major state programs for the year ended June 30, 2019. The City of Monroe’s major state programs are identified in the summary of auditor’s results section of the accompanying Schedule of Findings, Responses, and Questioned Costs. Management’s Responsibility Management is responsible for compliance with state statutes, regulations, and the terms and conditions of its state awards applicable to its state programs. Auditor’s Responsibility Our responsibility is to express an opinion on compliance for each of the City of Monroe’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, applicable sections of Title 2 U.S. 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 non-compliance 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 of Monroe’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. 181 We believe that our audit provides a reasonable basis for our opinio n on compliance for each major state program. However, our audit does not provide a legal determination of the City of Monroe’s compliance. Opinion on Each Major State Program In our opinion, the City of Monroe 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, 2019. Report on Internal Control Over Compliance Management of the City of Monroe 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 of Monroe’s internal control over compliance with the requirements that could have a direct and material effect on a major state program to determine our 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, non-compliance 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 combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material non-compliance 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 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 deficiencies, 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 requirement of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. Martin Starnes & Associates, CPAs, P.A. Hickory, North Carolina October 17, 2019 182                       183 CITY OF MONROE, NORTH CAROLINA SCHEDULE OF FINDINGS, RESPONSES, AND QUESTIONED COSTS FOR THE YEAR ENDED JUNE 30, 2019 1. 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 weakness(es) identified? No • Significant deficiency(s) identified? None reported Non-compliance material to financial statements noted? No Federal Awards Internal control over major federal programs: • Material weakness(es) identified? No • Significant deficiency(s) identified? None reported Type of auditor’s report issued on compliance for major federal programs Unmodified Any audit findings disclosed that are required to be reported in accordance with 2 CFR 200.516(a)? No Identification of major federal programs: Program Name CFDA# Airport Improvement Program 20.106 Dollar threshold used to distinguish between Type A and Type B Programs $750,000 Auditee qualified as low-risk auditee? No 184 CITY OF MONROE, NORTH CAROLINA SCHEDULE OF FINDINGS, RESPONSES, AND QUESTIONED COSTS FOR THE YEAR ENDED JUNE 30, 2019 1. Summary of Auditor’s Results (continued) State Awards Internal control over major state programs: • Material weakness(es) identified? No • Significant deficiency(s) identified? None reported Type of auditor’s report issued on compliance for major state programs Unmodified Any audit findings disclosed that are required to be reported in accordance with the State Single Audit Implementation Act? No Identification of major state programs: Program Name Powell Bill State Aid to Airports 185 CITY OF MONROE, NORTH CAROLINA SCHEDULE OF FINDINGS, RESPONSES, AND QUESTIONED COSTS FOR THE YEAR ENDED JUNE 30, 2019 2. Financial Statement Findings None reported. 3. Federal Award Findings and Questioned Costs None reported. 4. State Award Findings and Questioned Costs None reported. 186 CITY OF MONROE, NORTH CAROLINA SCHEDULE OF PRIOR YEAR FINDINGS FOR THE YEAR ENDED JUNE 30, 2019 2018-001: Corrected 2018-002: Corrected 187 Page 1 of 2 CITY OF MONROE, NORTH CAROLINA SCHEDULE OF EXPENDITURES OF FEDERAL AND STATE AWARDS FOR THE YEAR ENDED JUNE 30, 2019 State/ Federal Federal Pass-Through) (Direct and Pass-Through Grantor/Pass-Through CFDA Grantor's Pass-Through) State to Local Grantor/Program Title Number Number Expenditures Expenditures Subrecipients Expenditures Federal Grants: Cash Programs: U.S. Department of Justice: Direct Programs: Drug Enforcement Administration Equitable Sharing Program 16.922 64,478$ -$ -$ -$ Edward Byrne Memorial Justice Assistance Grant Program 16.738 2017-DJ-BX-0599 - - - 60 Edward Byrne Memorial Justice Assistance Grant Program 16.738 2017-DJ-BX-0685 - - - 60 Public Safety Partnership and Community Policing Grants 16.710 166,035 - - 60,014 U.S. Department of Homeland Security: Federal Emergency Management Agency: Passed through N.C. Department of Public Safety: 2016 Staffing for Adequate Fire and Emergency Response (SAFER) 97.083 EMW-2016-FH-00169 132,298 - - 48,056 Disaster Grants- Public Assistance 97.036 PA-04-NC-4393-PW 114,215 38,072 - - Disaster Grants- Public Assistance 97.036 198159-9/18-18-NC; 204513-10/15/18-NC 28,546 - - - Disaster Grants- Public Assistance 97.036 199974-9/26/18-NC 20,522 - - - U.S. Department of Housing & Urban Development: Passed through Union County: CDBG Entitlement Grants Cluster: Community Development Block Grant- Entitlement Grant 14.218 B-16-UC-37-0004-B35 102,671 - - - Total CDBG Entitlement Grants Cluster 102,671 - - - U.S. Department of the Interior: Passed through N.C. Department of Natural & Cultural Resources 2018 Historic Preservation Fund Grant- Monroe Design Guidelines Update 15.904 P18AF00042 16,150 - - - U.S. Department of Transportation: Passed through N.C. Department of Transportation: Airport Improvement Program 20.106 36237.17.16.2; 36237.17.15.3 867,506 - - - Total Assistance - Federal Programs 1,512,421 38,072 - 108,190 State Grants: Cash Assistance: N.C. Department of Transportation: Powell Bill - 605,108 - - State Aid to Airports 36244.24.6.1; 36244.24.7.1 - 740,364 - - N.C. Department of Environmental Quality: Drinking Water Asset Inventory & Assessment Grant H-AIA-D-17-0106 - 18,589 - 4,647 Wastewater Asset Inventory & Assessment Grant E-AIA-W-17-0051 - 18,589 - 4,647 Total assistance - State Programs - 1,382,650 - 9,294 Total assistance 1,512,421$ 1,420,722$ -$ 117,484$ 188 Page 2 of 2 CITY OF MONROE, NORTH CAROLINA SCHEDULE OF EXPENDITURES OF FEDERAL AND STATE AWARDS FOR THE YEAR ENDED JUNE 30, 2019 Notes to the Schedule of Expenditures of Federal and State Financial Awards: 1.Basis of Presentation 2.Summary of Significant Accounting Policies 3.Prior Year Expenditures The accompanying Schedule of Expenditures of Federal and State Awards (SEFSA) includes the federal and State grant activity of the City of Monroe under the programs of the federal government and the State of North Carolina for the year ended June 30, 2019. 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 and the State Single Audit Implementation Act. Because the Schedule presents only a selected portion of the operations of the City of Monroe, it is not intended to, and does not, present the financial position, changes in net position, or cash flows of the City of Monroe. Expenditures reported in 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. The City of Monroe has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. Expenditures for the State Aid to Airports program of $685,800 are from September 2003 and have been included on this Schedule due to reimbursement in FY 2019. 189                       190 P.O. Box 69 Monroe, NC 28111 (704) 282-4500 monroenc.org Our Vision The Finance Department strives to provide quality services and cost-effective financial practices with both accuracy and transpar- ency, thus ensuring the continued growth and economic success of the City of Monroe, its citizens, and surrounding communities.