City of Charlotte, North Carolina Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2009 Mayor: Pat McCrory Mayor Pro Tem: Susan Burgess City Council: Michael Barnes Patsy Kinsey Nancy G. Carter John Lassiter Warren Cooksey James Mitchell, Jr. Andy Dulin Edwin Peacock Anthony Foxx Warren Turner City Manager: W. Curtis Walton, Jr. Prepared by the City of Charlotte Finance Department Greg C. Gaskins, Director of Finance Teresa T. Smith, Financial Reporting Manager CITY OF CHARLOTTE, NORTH CAROLINA TABLE OF CONTENTS Page INTRODUCTORY SECTION Letter of Transmittal ....................................................................................................................................... 1 Certificate of Achievement for Excellence in Financial Reporting ............................................................... 13 Organizational Chart .................................................................................................................................... 14 FINANCIAL SECTION Independent Auditors’ Report ...................................................................................................................... 15 Management’s Discussion and Analysis ..................................................................................................... 17 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Assets ................................................................................................................. 29 Statement of Activities .................................................................................................................... 30 Fund Financial Statements: Balance Sheet – Governmental Funds .......................................................................................... 32 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Assets .................................................................................................... 33 Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds ................................................................................... 34 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities ................................ 35 Statement of Budgetary Comparison – General Fund ................................................................... 36 Reconciliation of the Statement of Budgetary Comparison to the Statement of Revenues, Expenditures and Changes in Fund Balances – General Fund ............................ 37 Statement of Net Assets – Proprietary Funds ................................................................................ 38 Statement of Revenues, Expenses and Changes in Fund Net Assets – Proprietary Funds ..................................................................................................................... 42 Statement of Cash Flows – Proprietary Funds ............................................................................... 44 Statement of Fiduciary Net Assets – Fiduciary Funds ................................................................... 48 Statement of Changes in Fiduciary Net Assets – Fiduciary Funds ................................................ 49 Index to the Notes to the Financial Statements .................................................................................... 50 Notes to the Financial Statements ........................................................................................................ 52 CITY OF CHARLOTTE, NORTH CAROLINA TABLE OF CONTENTS-(Continued) Page FINANCIAL SECTION (continued) Combining and Individual Fund Statements and Schedules: Nonmajor Governmental Funds: Description .................................................................................................................................... 115 Combining Balance Sheet ............................................................................................................ 118 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ....................................................................................................................... 120 Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual (Non-GAAP Basis) – Special Revenue Funds (Budgeted Annually) .......................... 122 Schedule of Expenditures Compared with Authorizations: Public Safety Grants Fund ..................................................................................................... 126 Neighborhood Development Fund ......................................................................................... 127 Employment and Training Fund ............................................................................................. 128 Stimulus Grants Fund ............................................................................................................ 129 Emergency Communications Fund ........................................................................................ 130 Debt Service and Capital Projects Funds: Description .................................................................................................................................... 131 Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual (Non-GAAP Basis) – Debt Service Fund .................................................................... 132 Schedule of Expenditures and Encumbrances Compared with Authorizations – Capital Projects Fund ............................................................................................................. 134 Enterprise Funds: Description .................................................................................................................................... 137 Water and Sewer: Schedule of Revenues, Expenditures and Transfers – Budget and Actual (Non-GAAP Basis): Operating Fund ................................................................................................................ 139 Debt Service Fund ........................................................................................................... 140 Schedule of Reconciliation of Budgetary (Non-GAAP Basis) to Full Accrual Basis .............. 141 Schedule of Expenditures and Encumbrances Compared with Authorizations – Capital Projects Fund ...................................................................................................... 142 CITY OF CHARLOTTE, NORTH CAROLINA TABLE OF CONTENTS-(Continued) Page FINANCIAL SECTION (continued) Combining and Individual Fund Statements and Schedules (continued): Enterprise Funds (continued): Storm Water: Schedule of Revenues, Expenditures and Transfers – Budget and Actual (Non-GAAP Basis): Operating Fund ................................................................................................................ 145 Debt Service Fund ........................................................................................................... 146 Schedule of Reconciliation of Budgetary (Non-GAAP Basis) to Full Accrual Basis .............. 147 Schedule of Expenditures and Encumbrances Compared with Authorizations – Capital Projects Fund ...................................................................................................... 148 Airport: Schedule of Revenues, Expenditures and Transfers – Budget and Actual (Non-GAAP Basis): Operating Fund ................................................................................................................ 151 Debt Service Fund ........................................................................................................... 152 Schedule of Reconciliation of Budgetary (Non-GAAP Basis) to Full Accrual Basis .............. 153 Schedule of Expenditures and Encumbrances Compared with Authorizations – Capital Projects Fund ...................................................................................................... 154 Public Transit: Schedule of Revenues, Expenditures and Transfers – Budget and Actual (Non-GAAP Basis): Operating Fund ................................................................................................................ 157 Debt Service Fund ........................................................................................................... 158 Schedule of Reconciliation of Budgetary (Non-GAAP Basis) to Full Accrual Basis .............. 159 Schedule of Expenditures and Encumbrances Compared with Authorizations – Capital Projects Fund ...................................................................................................... 160 Internal Service Funds: Description .................................................................................................................................... 163 Combining Statement of Net Assets ............................................................................................ 164 Combining Statement of Revenues, Expenses and Changes in Fund Net Assets ...................... 165 Combining Statement of Cash Flows ........................................................................................... 166 CITY OF CHARLOTTE, NORTH CAROLINA TABLE OF CONTENTS-(Continued) Page STATISTICAL SECTION Description ............................................................................................................................................... 167 Government-wide Information: