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2009 Annual Financial Report - City of Winston-Salem

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					            Comprehensive Annual Financial Report




 2009
            For The Fiscal Year Ended June 30, 2009




 AnnuAl
FinAnciAl
  RepoRt
                               Comprehensive Annual Financial Report




2009
                               For The Fiscal Year Ended June 30, 2009




 AnnuAl
FinAnciAl
  RepoRt




 The Annual Financial Report
   is prepared by Financial
    Management Services.
city oF Winston-sAlem
                                    City of Winston-Salem, North Carolina
                                    AnnuAl FinAnciAl RepoRt
                                    FoR the FiscAl yeAR ended June 30, 2009


CreditS                             intRoductoRy section                                                                   page
report                              letter of transmittal                                                                    2
produCtioN                          local economy                                                                            4
creative direction and copy         community profile                                                                       14
  Rachel Barron                     GFoA certificate of Achievement                                                         23
  Next Level Communications, Inc.
                                    organizational chart                                                                    24
  Winston-Salem, NC
                                    city officials                                                                          25
design and Art direction
  Lin Taylor Graphic Design, Inc.
  Winston-Salem, NC
printing                            FinAnciAl section                                                              exhibit page
  Keiger Printing,
  Winston-Salem, NC                 independent Auditors’ Report                                                            27

photography                         management’s discussion & Analysis                                                      28
  G. Allen Aycock,                  Basic Financial statements                                                              37
  Winston-Salem, NC
                                    Government-wide Financial statements
                                         – statement of net Assets                                                   1      38
                                         – statement of Activities                                                   2      40

                                    Fund Financial statements
                                         – Balance sheet – Governmental Funds                                        3      42
                                         – Reconciliation of the Governmental Funds
                                           Balance sheet to the statement of net Assets                             31      43
                                         – statement of Revenues, expenditures, and changes
                                           in Fund Balance – Governmental Funds                                      4      44
                                         – Reconciliation of the statement of Revenues, expenditures and changes
                                           in Fund Balances of Governmental Funds to the statement of Activities    41      45
                                         – statement of Revenues, expenditures, and changes in Fund Balance –
                                           Budget and Actual – General Fund                                          5      46
                                         – statement of net Assets – proprietary Funds                               6      51
                                         – statement of Revenues, expenses, and changes
                                           in Fund net Assets – proprietary Funds                                    7      52
                                         – statement of cash Flows – proprietary Funds                               8      54
                                         – statement of net Assets – Fiduciary Funds                                 9      56
                                         – statement of changes in net Assets – Fiduciary Funds                     10      57
                                    notes to the Financial statements                                                       58
                                    Required supplementary information                                                      89
                                         – schedule of Funding progress –Winston-salem Retirement,
                                           police officers’ separation Allowance, post-employment Benefits          11      90
                                         – schedule of employer contributions – Winston-salem Retirement,
                                           police officers’ separation Allowance, post-employment Benefits          12      91



                                                                           2009 AnnuAl FinAnciAl RepoRt
                                                                                                                                  1
       FinAnciAl section (continued)                                                                                                                                       exhibit page
       combining and individual Fund statements and schedules:

       major Funds:
         schedule of Revenues, expenditures, and changes in Fund Balance - Budget and Actual
            – Debt service Fund .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 13  .                                      .    .    . 97
           – capital projects Fund  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 14  .                                        .    .    . 98
           – Water and sewer utility Fund  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 15  .                                                .    .    . 99
           – solid Waste Diposal Fund  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 16  .                                              .    .    . 101

       non major Funds:
           – combining Balance sheet – nonmajor Governmental Funds  .  .  .  .  .  .  .  .  .  .  .  . 17  .                                                                                .  .  . 104
           – combining statement of Revenues, expenditures and changes in
             Fund Balances – nonmajor Governmental Funds  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 18  .                                                                     .  .  . 106
         schedule of Revenues, expenditures, and changes in Fund Balance - Budget and Actual
           – community Development Fund  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 19  .                                                        .    .    . 108
           – Grants Fund  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 20  .                                   .    .    . 109
           – economic and Housing Development Fund  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 21  .                                                                  .    .    . 110
           – Gasoline tax Fund  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 22  .                                         .    .    . 111
           – mass transit  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 23  .                                  .    .    . 112
           – sales tax Fund  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 24  .                                   .    .    . 113
           – occupancy tax Fund  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 25  .                                           .    .    . 114
           – cable Franchise Fee Fund  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 26  .                                              .    .    . 115
           – emergency telephone Fee Fund  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 27  .                                                      .    .    . 117
           – combining statement of net Assets – nonmajor enterprise Funds .  .  .  .  .  .  .  .  . 28  .                                                                                  .    .    . 120
           – combining statement of Revenues, expenses, and
             changes in Fund net Assets – nonmajor enterprise Funds  .  .  .  .  .  .  .  .  .  .  .  .  . 29  .                                                                            .  .  . 122
           – combining statement of cash Flows – nonmajor enterprise Funds  .  .  .  .  .  .  .  . 30  .                                                                                    .  .  . 124
         schedule of Revenues, expenditures, and transfers – Budget and Actual
           – parking Fund .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 31  .                                   .    .    . 128
           – cemeteries Fund .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 32  .                                      .    .    . 129
           – stormwater management Fund  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 33  .                                                     .    .    . 130
           – transit Authority Fund  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 34  .                                          .    .    . 131
           – public Facilities management Fund  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 35  .                                                       .    .    . 132
           – Fairgrounds Fund  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 36  .                                       .    .    . 133

       internal service Funds:
           – combining statement of net Assets  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                                                     . 37  .  .  .  . 136
           – combining statement of Revenues, expenses and changes in Fund net Assets                                                                                            . 38  .  .  .  . 138
           – combining statement of cash Flows .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                                                      . 39  .  .  .  . 140
         schedule of Revenues, expenditures and transfers – Budget and Actual
           – Worker’s compensation  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                                            . 40  .    .    .    . 144
           – Health Benefits .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                                 . 41  .    .    .    . 145
           – Dental and Flex Benefits  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                                         . 42  .    .    .    . 146
           – employee Benefits Fund  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                                           . 43  .    .    .    . 147

       Fiduciary Funds:
           – statement of Fiduciary net Assets  .  .  .  .  .  .  .  .  .  .  .  .  .  .                        .  .  .  .  .  .  .  .  .  .  .  .  .  . 44  .  .  .  . 150
           – statement of Fiduciary Fund changes in net Assets .  .  .  .                                       .  .  .  .  .  .  .  .  .  .  .  .  .  . 45  .  .  .  . 151
         capital Assets used in the operation of Governmental Funds:
           – comparative schedules By source  .  .  .  .  .  .  .  .  .  .  .  .  .  .                          .    .    .    .    .    .    .    .    .    .    .    .    .    . 46  .    .    .    . 155
           – schedule of Function and Activity  .  .  .  .  .  .  .  .  .  .  .  .  .  .                        .    .    .    .    .    .    .    .    .    .    .    .    .    . 47  .    .    .    . 156
           – schedule of changes by Function and Activity  .  .  .  .  .  .  .                                  .    .    .    .    .    .    .    .    .    .    .    .    .    . 48  .    .    .    . 159
           – schedule of General obligation Bonded Debt  .  .  .  .  .  .  .                                    .    .    .    .    .    .    .    .    .    .    .    .    .    . 49  .    .    .    . 162




city oF Winston-sAlem
stAtisticAl section                                                                                                                            table                     page
Financial trends:
     – net Assets by component  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                .    .    .    .   1  .    .    .    . 166
     – changes in net Assets  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .            .    .    .    .   2  .    .    .    . 168
     – General Revenues and total change in net Assetst  .  .  .  .  .  .  .  .  .  .  .  .  .  .                                    .    .    .    .   3  .    .    .    . 172
     – program Revenues by Function/program  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                              .    .    .    .   4  .    .    .    . 174
     – Fund Balances, Governmental Funds  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                           .    .    .    .   5  .    .    .    . 176
     – changes in Fund Balances, Governmental Funds  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                                     .    .    .    .   6  .    .    .    . 178
Revenue capacity:
     – tax Revenues by source, Governmental Funds .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                                  .    .    .    . 7  .      .    .    . 182
     – taxable property Assessed Value  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                    .    .    .    . 8  .      .    .    . 183
     – property tax Rates .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .       .    .    .    . 9  .      .    .    . 184
     – principal property tax payers  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                .    .    .    . 10  .     .    .    . 185
     – property tax levies and collections  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                      .    .    .    . 11  .     .    .    . 187
Debt capacity
     – Ratios of outstanding Debt by type  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                       .    .    .    . 12  .     .    .    . 188
     – Ratio of General Bonded Debt outstandingt  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                               .    .    .    . 13  .     .    .    . 191
     – legal Debt margin .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .        .    .    .    . 14  .     .    .    . 192
     – Direct and overlapping Governmental Activities Debt  .  .  .  .  .  .  .  .  .  .  .  .                                       .    .    .    . 15  .     .    .    . 195
     – pledged-Revenue coverage  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                  .    .    .    . 16  .     .    .    . 196
Demographic and economic information
     – Demographic and economic statistics  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                          .  .  .  . 17  .  .  .  . 198
     – principal employers  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .         .  .  .  . 18  .  .  .  . 199
operating information
     – Full-time-equivalent city Government employees by Function/program                                                             .  .  .  . 19  .  .  .  . 200
     – operating indicators by Function/program  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                                 .  .  .  . 20  .  .  .  . 202
     – capital Assets statistics by Function/program  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                               .  .  .  . 21  .  .  .  . 206




FeDeRAl AnD stAte GRAnts section                                                                                                                                         page
        – independent Auditors’ 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  .  .  .  .  .  .  .  .  .  .  .  .  .  . 210
        – independent Auditors’ Report on compliance with Requirements Applicable to
          each major Federal program and internal control over compliance in Accordance
          with omB circular A-133 and the state single Audit implementation Act  .  .  .  .  .  .  .  . 212
        – independent Auditors’ Report on compliance with Requirements Applicable to each major
          state program and internal control over compliance in Accordance with Applicable
          sections of omB circular A-133 and the state single Audit implementation Act  .  .  .  .  . 214
        – schedule of Findings and Questioned costs                                  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 216
        – corrective Action plan  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 221
        – summary schedule of prior year Audit Findings  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 222
        – schedule of expenditures of Federal and state Awards  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 224
        – notes to schedule of expenditures of Federal and state Awards  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 230
        certain pages in this report are intentionally blank .




                                                                                                                                   2009 AnnuAl FinAnciAl RepoRt
                                                                                    Letter of Transmittal
    october 12, 2009

    to The honorable mayor And members of city council
    And citizens of The city of Winston-salem

    ever since the merger of Winston and salem in 1913, the twin city has prospered through the cooperation of its public and
    private institutions This was true in the years following the incorporation of Winston-salem, and it remains true today The
    enduring veracity of our city motto was underscored again during the past year, as our community continues to see the
    tangible benefits of the past five years of efforts by city government and private institutions to diversify our economy,
    increase our tax base, bring new jobs to our city, and breathe new life into our downtown


    Financial report
    it is our pleasure to submit the Annual Financial Report for the city of Winston-salem, north carolina for the fiscal year
    ended June 30, 2009 management of the city of Winston-salem, north carolina, is responsible for the integrity and
    objectivity of financial statements and other representations contained in this annual report The city’s annual financial report,
    prepared in accordance with generally accepted accounting principles for units of local government, consists of management’s
    representations concerning the financial position and results of operations for the fiscal year ended June 30, 2009

    north carolina general statutes require each unit of local government to publish within four months after the close of the
    fiscal year a complete set of financial statements presented in conformity with generally accepted accounting principles
    (“GAAp”) and audited in accordance with generally accepted auditing standards by a firm of certified public accountants
    The city engaged cherry, Bekaert & holland, independent auditors, to perform an audit of the city’s reported financial
    position and results of operations contained in the government-wide and fund financial statements and notes to the
    financial statements Their audit consists of an objective outside review in order to provide reasonable rather than absolute
    assurance that the financial statements are free from material misstatements Working with the city’s professional financial
    and auditing staff, they reviewed and made appropriate tests of data included in the financial statements, and evaluated the
    overall financial statement presentation The independent auditor concluded, based upon the audit, that there was a
    reasonable basis for rendering an unqualified opinion that the financial statements of the city of Winston-salem for the
    fiscal year ended June 30, 2009, are fairly presented in conformity with GAAp The report of independent auditors is
    presented as the first component of the financial section of this report

    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

    The independent audit of the financial statements of the city of Winston-salem was part of a broader, federally mandated
    “single Audit” designed to meet the special needs of federal grantor agencies The standards governing single Audit
    engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also
    on the city’s internal controls and compliance with legal requirements, with emphasis on administration of federal grants

    Assuring legal compliance requires an accounting system that contains a variety of distinctly different fiscal and accounting
    entities Formal budgetary accounting is employed for all funds for management planning and control required by north
    carolina General statutes Budgets are legally enacted by passage of Annual Budget and project Budget ordinances and
    formally amended as required The city manager is authorized to transfer budget amounts within functions, but changes
    between functions and total budgets of any fund require approval by the city council

    The city’s financial statements also present the financial position and results of operations of two nonprofit corporations,
    which provide services under contract to the city These two corporations, north carolina municipal leasing corporation



2                         city oF Winston-sAlem
honorable mayor and
members of the city council
city of Winston-salem, north carolina:
page 2



and Risk Acceptance management corporation, although legally separate are included because they have significant financial
relationships with the city Additional information on these entities can be found in the notes to the financial statements

GAAp requires that management provide a narrative introduction, overview, and analysis to accompany the basic
financial statements in the form of management’s discussion and Analysis (md&A) This letter of transmittal is designed
to complement md&A and should be read in conjunction with it The city’s md&A can be found immediately following
the report of the independent auditors

included in the annual financial report is information about the city as a social and economic unit as well as its governmental
structure that is intended to enable the reader to assess the city’s economic foundation, quality of life, and financial condition


Long-term Financial planning
The Annual Financial Report reflects the sound fiscal policies our elected officials have established to achieve their annual
priorities for programs, services and capital improvements These policies have resulted in the city’s strong financial
position which is demonstrated by the highest credit rating attainable in national bond markets Growth of the city’s
economic base as well as realistic long-range planning, productive management of revenue and cash resources, expansion
of self-supporting enterprises within government, and prudent use of debt continue to produce favorable operating results
A key financial goal of the city is to maintain a minimum unreserved and undesignated fund balance of 10% of the
estimated expenditures of the general fund This goal was met in fiscal year 2009 results

The city annually adopts a six-year capital plan for the scheduling and appropriation of funds for major projects that
represent significant contributions to the city’s overall inventory of physical assets The first year of the capital plan
commits the city to the first year of the capital projects with conditional approval for those projects listed in the five future
planning years The six-year capital plan, from fiscal year 2010 through fiscal year 2015 includes capital appropriations
totaling $315 2 million and includes projects funded by general fund resources, voter-approved general obligation bonds,
utility revenue bonds, state and federal grants, gasoline taxes, certificates of participation, and capital reserves


Awards and Acknowledgements
The Government Finance officers Association of the united states and canada has awarded the highest form of
recognition of governmental accounting and financial reporting, the certificate of Achievement for excellence in
Financial Reporting, to the city of Winston-salem for each Annual Financial Report (comprehensive) since 1982
We believe that the 2009 comprehensive Annual Financial Report conforms to the highest reporting standards

deserving special commendation are skilled, talented, and dedicated employees – the work force of the city of
Winston-salem Acknowledgement and appreciation are expressed for their contributions to a successful year We
also express our sincere appreciation to the mayor and city council for leadership, guidance, and establishment of
policies for managing financial operations in a sound and progressive manner

Respectfully submitted,



lee d Garrity                                               denise c Bell
city manager                                                chief Financial officer




                                                                        2009 AnnuAl FinAnciAl RepoRt
                                                                                                                                     3
    locAl economy
    like nearly every city across the country, Winston-salem faced
    economic challenges in the 2008-2009 fiscal year The city
    responded to the crisis by taking cost reducing measures to avoid
    lay-offs and any reduction in the quality of services offered to
    city residents The city council continued with these measures
    in the 2009-10 budget and, along with the regularly scheduled
    four-year reevaluation, adopted a budget with a tax rate of 46 75
    cents Winston-salem’s property tax rate continues to be the
    lowest among north carolina’s major cities
    As the fiscal year drew to a close on June 30, the jobless rate in the
    Winston-salem metropolitan area had declined slightly to 10 4
    percent, from 10 5 percent in may Winston-salem’s thriving
    medical community, including Wake Forest university Baptist
    medical center (the city’s largest employer) and Forsyth medical
    center; the opening of the long-awaited Fedex mid-Atlantic hub
    at the piedmont triad international Airport in late 2009; and the
    announcement that Fedex Ground package system inc will build
    a $100 million regional distribution hub in Guilford county that
    will employ 750 people, were bright spots for Winston-salem
    residents looking for jobs
    existing home sales for July 2009 were down 22 percent from July 2008, but the average sales price rose
    7 6 percent over the previous year, to $194,661 – a hopeful sign that homebuyers might be returning to the
    market and that prices have stabilized
    The volume of vacant office space in Winston-salem reached 22 percent during the first half of 2009, the
    highest it had been since 2005, according to a survey by michael s clapp & Associates inc The vacancy
    rate for class A office space stood at 14 percent; the rate for class B space was 29 7 percent however,
    positive developments included the announcement by 700 south stratford llc that it would buy the




4            city oF Winston-sAlem
The Citizen’s Memorial Wall, dedicated in June 2009, honors Winston-Salem
residents whose lives left a lasting impact on the community.




former hanesbrands, inc plant on Ricks drive, and the
Winston-salem/Forsyth county Board of education
will buy two other hanesbrands, inc buildings for its
new administrative offices
opportunities for dining, shopping and living downtown
continued to grow in number and diversity, with the
openings of nomA urban Bar & Grill; Bib’s downtown
Barbecue; tonic tapas Bar and mooney’s mediterranean
café Thanks to sidewalk dining offered by many restaurants,
combined with outdoor music concerts on Thursday,
                                                                                City Link’s customer service representatives help callers find information
Friday and saturday nights throughout the spring and                            about all City departments through one easy-to-remember phone number.
summer, the downtown scene continues to flourish

                                                                            construction on a new stadium for The dash, a class-A
                                                                            professional baseball team, stalled in early 2009 (in 2007,
                                                                            the city contributed $12 million in upfront investment
                                                                            and $8 million in tax incentives to be paid over a 25-year
                                                                            period ) stadium developer Billy prim approached the
                                                                            city asking for further funding, noting that, because of
                                                                            the tightened credit market, banks would not lend him
                                                                            enough money to cover the costs – projected at $40 7
                                                                            million – of finishing the ballpark The city council
                                                                            approved additional funding of $12 7 million The city
                                                                            would own the stadium and it would be leased by the
                                                                            developer for a 25-year term




                                                                               2009 AnnuAl FinAnciAl RepoRt
                                                                                                                                                             5
    technoloGy
    Winston-salem’s growing biotechnology sector continued to hold the greatest promise for future growth
    and jobs About 60 bioscience companies with a combined 1,100 employees are already operating in
    Winston-salem, many of them at the Piedmont Triad Research Park (ptRp) a 200-acre downtown
    research campus ptRp also includes a Wet lab launch pad geared toward biotechnology companies
    further along in development but still in need of lower-cost space
    one of the most prominent tenants is the Wake Forest Institute for Regenerative Medicine
    (WFiRm), which continued to make national headlines for its ground-breaking work in using patients’
    own cells to grow new organs and tissues WFiRm’s scientists are the first in the world to have created a
    wholly laboratory-grown organ — engineered bladder tissue — that has been successfully implanted in
    patients WFiRm is currently working to grow more than 22 different organs and tissues in the laboratory
    in 2009, dr Anthony Atala, the director of WFiRm and dr david carroll, the director of Wake Forest’s
    center for nanotechnology and molecular materials, were interviewed in an episode of the science series
    That’s Impossible on the history channel Atala was also named as one of “14 medical pioneers Who Aren’t
    holding Back” by U.S. News & World Report.
                                                                Also in 2009, WFiRm named dr George
                                                                Weightman, a retired u s Army major
                                                                general, as associate director and chief
                                                                operating officer Weightman served in the
                                                                military for 36 years, with his last post being
                                                                commander of the u s Army medical
                                                                Research and material command at Fort
                                                                detrick, md in 2008, a consortium
                                                                spearheaded by WFiRm received a five-year,
                                                                $42 5 million grant from the u s department
                                                                of defense to develop regenerative treatments
                                                                for lost limbs or severe burns — the signature
                                                                injuries of the wars in iraq and Afghanistan
                                                                ptRp is engaging in talks with a developer for
                                                                renovating about 60 acres in the “north
                                                                district” in the meantime work is continuing
                                                                on the ptRp’s “central district,” where roads
                                                                and other infrastructure are being built
    Tengion, a clinical stage biotechnology company that has licensed dr Atala’s regeneration technology,
    was mentioned, along with dr Atala (who serves as the company’s board chair) in “The 100 most creative
    people in Business” by Forbes magazine The company and its technology were also mentioned in Modern
    Medicine and Urology Times in november, tengion’s co-founder, president and chief executive officer,
    dr steven nichtberger, received  the prestigious ernst & young national entrepreneur of The year® award
    in the emerging company category
    Biopharmaceutical company Targacept, Inc., continued to make progress in clinical trials with several
    drug compounds targacept received a $10 million milestone payment from AstraZeneca as a result of
    positive outcomes from a study compound designed to treat attention deficit/hyperactivity disorder, or
    Adhd, in adults AstraZeneca plans to conduct further clinical studies on the compound with adults and
    younger subjects targacept is continuing to work in developing other compounds that would effectively
    treat disorders such as schizophrenia and Alzheimer’s disease The company was recognized as one of the
    top 30 companies in The Scientist magazine’s annual poll of Best places to Work, based on a survey of 3,000
    scientists worldwide


6           city oF Winston-sAlem
                                                                                locAl economy




other notable technology/biotechnology companies in         sized instrument that makes it easier for eye surgeons
the ptRp include: GlycoMark, Inc., which announced          performing endothelial keratoplasty, or the transplant of
that its blood test for diabetics appears effective in      the layer of endothelial cells that makes up the bottom
measuring potentially dangerous blood-sugar levels that     layer of the cornea of the eye; and Sunrise
are undetectable by other means; Plureon, a                 Technologies, announced its Apparel & Footwear
biotechnology company partnering with the Juvenile          template, certified for microsoft dynamics AX (cfmd),
diabetes Research Foundation to develop an insulin-         is an integrated information technology solution for
producing beta cell therapy product for treating type i     companies in the apparel and footwear industries
diabetes; SolidSpace, a long-time provider of hosting,
network, and broadband services; C-Change                   An emerging initiative closely related to the city’s
Surgical, a medical device company that patented a          technology efforts is the Center for Design
liquid warming device for controlling the temperatures of   Innovation, which is the first step in the community’s
sterile surgical fluids; Ocular Systems, which              efforts to develop its creative and arts industry into a
announced that, in conjunction with Wake Forest             significant contributor to the local economy The center is
university, it has developed the endosaver, a toothbrush-   a joint effort by the n c school of the Arts, Winston-
                                                            salem state university and Forsyth technical
                                                                        community college to offer creative research
                                                                        and development services to the business
                                                                        community in training the next generation of
                                                                        design professionals The center will eventually
                                                                        have its own building in the research park




                                                               2009 AnnuAl FinAnciAl RepoRt
                                                                                                                          7
    heAlth cARe
    Winston-salem is home to two of north carolina’s largest regional medical centers — the Wake Forest
    University Baptist Medical Center (WFUBMC) and Novant Health, Inc. — making health
    services a major component of Winston-salem’s economy About 18 percent of the local workforce is
    employed in health care and related businesses
    WFuBmc, one of the nation’s leading academic medical centers, is Forsyth county’s largest employer,
    with more than 11,500 employees The medical center is comprised of Wake Forest University
    Health Sciences, which operates the Wake Forest University School of Medicine, North
    Carolina Baptist Hospital, its tertiary care facility, and WFU Physicians WFuBmc is the only
    academic medical center in western north carolina; it has over 550 physicians specializing in 100 areas of
    medicine; Brenner children’s hospital, the region’s only pediatric hospital; and is one of 40 comprehensive
    cancer centers in the nation as designated by the national cancer institute
    The medical center is an integrated health care system that operates 1,154 acute care, rehabilitation and
    long-term care beds, outpatient services, and community health and information centers This includes
    22 subsidiary or affiliate hospitals and more than 100 outreach activities throughout the region, including
    satellite clinics, health fairs and consulting services
                                                                          in 2008, after an extensive
                                                                          reorganization, dr John d
                                                                          mcconnell became the first ceo in
                                                                          the combined institutions’ 86-year
                                                                          history For the past year, mcconnell
                                                                          has worked to unite the center’s
                                                                          individual units as a single institution
                                                                          part of that process has been filling
                                                                          other key leadership positions, which
                                                                          include the first cFo of the unified
                                                                          organization and the top positions of
                                                                          the center’s three main units: WFu
                                                                          health sciences, n c Baptist hospital
                                                                          and WFu physicians
                                                                     during the last year, WFuBmc
                                                                     received approval from the state to
                                                                     build a 48-bed, $100 million hospital
                                                                     in davie county The medical center’s
                                                                     outreach also grew when lexington
    memorial hospital joined with WFuBmc and Guilford emergency physicians, combined with n c
    Baptist’s emergency medicine department, to provide community training sites for the residency program
    North Carolina Baptist Hospital, the 872-bed teaching hospital of Wake Forest university Baptist
    medical center, is the region’s main tertiary referral center and north carolina’s busiest level i trauma
    center in the past year, the hospital announced a $152 million expansion of the comprehensive cancer
    center and a new $19 million pediatric emergency department that is part of The childress institute for
    pediatric trauma, designed to treat and prevent life-threatening childhood injuries The hospital also
    includes a “hospital within a hospital,” Brenner Children’s Hospital & Health Services, which
    provides 160 beds for critically or chronically ill young patients and conducts 24 outreach clinics Brenner’s
    expertise includes 120 pediatricians specializing in more than 30 areas of pediatric medicine, as well as the
    region’s only level iV neonatal intensive care unit and pediatric emergency department The hospital
    has been recognized for its efforts to combat childhood obesity through its comprehensive pediatric
    obesity program, Brenner FIT.

8           city oF Winston-sAlem
                                                                                   locAl economy

The hospital received the Joint commission’s Gold seal of     of the book “America’s Best Graduate schools” from U.S.
Approval™ in 2009, which is full accreditation with no        News & World Report The school was also ranked 16th in
recommendations for compliance improvement The                geriatrics in specialty rankings
Joint commission is the nation’s premiere standards-
setting and accrediting body for health care and quality      Novant Health, a not-for-profit, integrated health care
                                                              system based in Winston-salem, serves more than 3 5
Baptist hospital was ranked in the top 50 of America’s        million people in north carolina, Virginia and south
Best hospitals by U.S. News & World Report and has been       carolina in north carolina, novant operates hospitals
ranked by the publication every year since 1993 in            in Winston-salem, charlotte, Thomasville, salisbury,
multiple specialties This year, the magazine ranked           matthews, huntersville and Brunswick county, as well
Baptist in five categories: respiratory disorders (20th),     as a network of outpatient centers, medical practices,
cancer (26th), kidney disease (26th),
urology (41st), and gynecology (46th)
The rankings take into account the
hospital’s reputation, the mortality ratio
(actual deaths compared to expected deaths
in that specialty), the availability of key
technologies in that specialty, the ratio of
registered nurses to beds, and the number
of patients treated in that specialty
The medical center was also ranked 32nd
in the nation for the number of physicians
listed in castle connolly’s seventh edition
of America’s Top Doctors® The nursing staff
received magnet® nursing status for the
third time by the American nurses
credentialing center (Ancc), the
nation’s leading credentialing organization,
which recognizes the highest standards in                     rehabilitation facilities and nursing homes in all, novant
nursing excellence                                            employs more than 26,000 people, including more than
                                                              8,600 in Winston-salem it has more than 1,100 physicians
The Burn center of WFuBmc has been awarded
                                                              in its medical group
verification by the American Burn Association, making it
one of only five verified burn centers in the southeast       novant ranked 12th in the nation among the 2009 top
meeting rigorous standards in treatment and patient care      100 integrated healthcare networks, according to an
The Breast care center at WFuBmc is one of only two           analysis by the sdi health informatics company The
centers in the state and one of 27 nationally to be granted   rating is based on health care network performance
full accreditation by the national Accreditation program      level and degree of integration
for Breast centers, with expertise in diagnosing and
treating the full spectrum of breast disease                  over the past year, novant has been growing its local
                                                              presence with the construction of the $84 million, 50-bed
The Wake Forest university School of Medicine is              Kernersville medical center scheduled to open in 2010
a driving force in the development of Piedmont Triad          novant also received approval from the state to build a
Research Park, a 200-acre downtown research                   $96 million, 50-bed hospital in clemmons
campus that is contributing significantly to urban
revitalization The school is a major research center          novant expanded into Virginia through a merger with
with more than 1,000 research studies and clinical trials     prince William health system in prince William county,
currently underway                                            a northern Virginia suburb of Washington, d c The
                                                              merger will add a 170-bed, nonprofit hospital, two health
Wake Forest university school of medicine ranks 22nd          centers, a cancer center and an assisted living facility to
in primary care and 43rd in research among the nation’s       the novant health system
146 medical and osteopathic schools in the 2010 edition

                                                                 2009 AnnuAl FinAnciAl RepoRt
                                                                                                                            9
                                                Forsyth Medical Center (FMC), the flagship of novant
                                                health, is a 961-bed, not-for-profit, tertiary care hospital offering
                                                a full continuum of emergency, medical, surgical, rehabilitative and
                                                behavioral health services
                                                Fmc operates the largest birthing center in the region by
                                                providing all labor and delivery services for Forsyth county
                                                through its Sara Lee Center for Women’s Health
                                                With more than 7,000 births a year, the center is the second
                                                largest birthing center in north carolina in addition to
                                                obstetrical services, the sara lee center provides individualized
                                                care for women in all life stages and is a leader in women’s
                                                health care in the triad region
                                               The staff of Forsyth medical center and novant health was a
                                               national winner of the 2008 ernest A codman Award from
                                               The Joint commission for its “Washing hands saves lives”
                                              campaign The health system was honored for its successful
     efforts to improve hand hygiene compliance and reducing the spread of methicillin-resistant
     staphylococcus aureus (mRsA) infections by 53 percent The prestigious codman Award is presented to
     health care organizations that demonstrate exemplary performance to improve the quality and safety of
     health care This is novant’s second codman award
     The American nurses credentialing center honored nurses at Forsyth medical center with the national
     magnet designation last year magnet hospitals must demonstrate excellence in many areas, including patient
     care, positive patient outcomes, a professional nursing environment and collaboration between nursing and
     all other staff within the hospital only five percent of hospitals nationwide hold this prestigious honor and
     novant leads north carolina, with five hospitals earning the prestigious magnet status
     last year, Fmc’s Forsyth Behavioral health received $1 million in grants from The duke endowment and
     The Forsyth medical center Foundation to create a behavioral health mobile crisis team This enables Fmc
     to provide 24-hour crisis care year-round in Forsyth, davie and stokes counties The mobile team is designed
     to provide crisis care for patients in their communities rather than at hospital emergency departments
     The Forsyth stroke & neurovascular center of Fmc received the silver performance Achievement Award
     from the American heart Association and American stroke Association The award recognizes hospitals
     exceeding the Joint commission’s requirements for stroke disease certification
     novant health also operates Medical Park Hospital, a 22-bed, not-for-profit hospital in Winston-
     salem that specializes in elective surgical procedures it performs approximately 12,000 surgeries each year,
     most of which are outpatient medical park has a solid reputation for patient satisfaction and was named a
     top performer by professional Research consultants, a firm that conducts patient satisfaction surveys




10           city oF Winston-sAlem
                                                                                      locAl economy
     FinAnciAl seRVices
     on January 1, 2009, Wells Fargo & co took over
     Wachovia Corp., ending the latter’s 129-year run as an
     independent bank Wells Fargo beat out citigroup for the
     purchase, a result that industry observers believe was the
     best outcome for Winston-salem and north carolina as
     a whole Wachovia was founded in Winston-salem and
     was a powerful leader in the corporate community for
     many years in 2001, its headquarters was moved to
     charlotte as a result of a merger with First union
     national Bank dick Kovacevich, the chairman of Wells
     Fargo, called his bank’s merger with Wachovia “an
     incredible fit that will result in an immensely strong,
     stable financial-services company,” according to the
     Winston-Salem Journal
     Wells Fargo said it would leave the east coast banking
     headquarters in charlotte and the wealth-management
     unit in Winston-salem Also regarded as positive news
     was the naming of stanhope Kelly, the highest-profile        The mortgage crisis had an unexpected positive result for
     executive for Wachovia corp based in Winston-salem,          another bank headquartered in Winston-salem Branch
     as president of Wells Fargo’s community bank for the         Bank and Trust Corp (BB&T) acquired colonial
     carolinas Kelly previously served as the president of        BancGroup, secured a place among the nation’s top 10
     Wachovia’s wealth-management group                           banks and gained important market share in Alabama
                                                                  and Florida Analysts predicted the acquisition of $20
     early results from the merger appear positive: Wells Fargo   billion in deposits and 346 branches could also mean
     reported a record net income in the second quarter of        opportunities for expansion of its operations and work
     $3 2 billion — up 81 percent from the previous year          force in Winston-salem and eastern north carolina
     Wachovia markets and products represented about 39
     percent of Wells Fargo’s revenue during the quarter          earlier in 2009, BB&t corp made an early repayment of
                                                                  troubled Asset Relief program (tARp) funds BB&t
     in the meantime, Wachovia customers in Winston-salem         paid back $3 1 billion, plus a final dividend payment of
     felt little change from the merger Branches continued        about $13 9 million in order to be approved to repay the
     business as usual and continue to bear the Wachovia sign     money, BB&t had to pass a “stress test” designed to show
     John stumpf, president and ceo of Wells Fargo, said the      that it could withstand a deeper recession
     conversion process is expected to last into 2011
                                                                  As of summer 2009, BB&t reported assets of $152 4
                                                                  billion its bank subsidiaries operate approximately
ForSyth CouNty’S                                                  1,500 financial centers in the carolinas, Virginia, West
10 LArgeSt empLoyerS                                              Virginia, Kentucky, Georgia, maryland, tennessee,
                                                                  Florida, Alabama, indiana and Washington, d c BB&t
1    Wake Forest university Baptist medical center 11,763         ranks no  2 in market share in north carolina; no  4 in
2    novant health, inc                             8,249         Virginia/Washington, d c ; no 3 in south carolina
3    Winston salem/Forsyth county schools           7,550         BB&t’s banking subsidiaries are organized as a group of
                                                                  community banks, each with a regional president, which
4    hanesbrands, inc                               3,560
                                                                  allows decisions to be made locally, an arrangement
5    Wachovia/Wells Fargo Bank                      3,400         designed to make the bank’s client service more
6    Reynolds American, inc                         2,939         responsive, reliable and empathetic
7    Wake Forest university                         2,435
8    city of Winston‐salem                          2,343         Southern Community Bank & Trust, also based
9    Forsyth county                                 2,140         in Winston-salem, reported a net loss of $3 3 million, or
10   Branch Bank & trust company                    1,437         20 cents per diluted common share, in the second quarter



                                                                     2009 AnnuAl FinAnciAl RepoRt
                                                                                                                              11
                           of 2009 F scott Bauer, chairman and chief executive officer, attributed the result to the
                           bank’s aggressive efforts to work through and charge off almost $6 million in troubled
                           assets, particularly in residential construction and development loans one positive
                           development was that nonperforming loans decreased to $17 9 million, compared with
                           $20 3 million at the close of the first quarter since receiving $43 million in tARp funds
                           in december 2008, the bank has extended over $50 million in new loans despite the
                           challenges of the last year, southern community continues to show sufficient liquidity
                           and capital for future growth
                         in April 2009, TriStone Bank, established in Winston-salem in 2004, announced it
                         had finalized a merger with First community Bancshares, inc , of Bluefield, West
                         Virginia First community’s acquisition of tristone was valued at approximately $10
                         million and expanded its Forsyth county presence from four to six branches First
                         community has a total of 59 locations in Virginia, West Virginia, south carolina, and
     tennessee as well simpson o “skip” Brown, who had been president and chief executive officer of
     tristone, was named First community’s president for the triad region
     Piedmont Federal Savings Bank announced in January that longtime leader nick mitchell Jr was
     retiring he had been with the company for more than 41 years, including the past 28 as president and
     chief executive officer mitchell remains the bank’s chairman, and Richard “Ric” Wagner Jr , a 22-year bank
     veteran, was named the new president and ceo mitchell ended his tenure with the 106-year-old bank
     posting a profit of $5 2 million for 2008, despite the sour economy
     Allegacy Federal Credit Union was founded in 1967 in Winston-salem to serve the employees of
     R J Reynolds tobacco co it is now one of the largest credit unions in north carolina, with over 110,000
     members and $1 billion in assets throughout the u s
     Truliant Federal Credit Union was chartered in1952 and now serves more than 181,000 members
     in north carolina, south carolina, ohio and Virginia
     despite the tough economy, the credit union continued
     its commitment to help the communities it serves by   BoNd rAtiNgS
     giving out more than $28,000 to 130 organizations     in march 2009, the city issued $109,030,000
     that work with underserved communities in the         in water and sewer revenue bonds at an
     carolinas and Virginia                                average fixed rate of 4 73%   The bond
                                                           proceeds will be used to modernize the
     Winston-salem based mortgage insurer Triad            Thomas Water treatment plant, upgrade the
     Guaranty Insurance Corp. suffered heavy losses        elledge sewer treatment plant, and to fund
     from the mortgage crisis and announced in 2008 that   various other smaller capital improvement
     it would stop issuing new policies but continue to    projects  
     service existing customers The company reported a     	 	 Ratings	were:
     loss of $359 4 million in the second quarter of 2009           s&p           AAA
                                                                    moody’s    Aa2
                                                                    Fitch          AA

     mAnuFActuRinG
     The manufacturing field continued to suffer as the economy worsened over the 2008-2009 year Although
     manufacturing is no longer Winston-salem’s primary source of jobs, it continues to play a significant role
     in the city’s economy
     Dell, Inc., a desktop computers assembly plant, opened in 2005 The company received $23 4 million in
     incentives under an agreement between dell and the city and county on october 6, 2009, dell announced
     that it plans to close its Forsyth county plant in January 2010 per the incentives agreement, dell will repay the
     incentives in full to the Winston-salem community within thirty days of the plant closing


12            city oF Winston-sAlem
                                                                                       locAl economy
Reynolds American, Inc. and its subsidiary, R.J.
Reynolds Tobacco Co., produces five of the nation’s
10 best-selling cigarette brands: camel, Winston, Kool,
salem and doral over the past year, the company continued
to adjust to the decline in the market for cigarettes, along
with the passing of FdA regulation and a 62-cent-per-pack
federal excise tax increase The company shed 570 white-
collar positions — 10 percent of its overall workforce — in its
latest round of lay-offs of those 570 cuts, 250 were voluntary
— mostly taken by employees eligible for retirement
spinning off from sara lee corp in september 2006,
apparel manufacturer Hanesbrands, headquartered in
Winston-salem, announced in early 2009 that it was
cutting 440 employees
on a positive note, Krispy Kreme Doughnuts Inc.
appeared to be on the road toward financial recovery and
profitability after five years of decline in June 2009, the
company reported its second quarterly profit — $1 9
million — in its last five quarters The company’s strategy
of expanding its international and domestic presence
through smaller stores appeared to be working



doWntoWn
deVelopment                                                        Another new project rehabilitated the old Brown-Rogers-
While downtown’s shopping, food and entertainment                  dixon building at east seventh and main streets into the
options continued to grow, the sale of downtown                    Winston Factory Lofts — apartments that take
residential units slowed with the rest of the real estate          advantage of the building’s large windows and 13-foot
market Although the Nissen Building on Fourth                      ceilings One Park Vista, an eight-story building
street, renovated into apartments several years ago, has           located on Fourth street in a central part of downtown,
been a major success, further construction of West End             was completed, with 13 of 32 condominiums sold The
Village, originally planned to include a total of 250              $18 million project is part of a larger downtown civic
condominiums at the corner of Fourth and Broad streets,            plaza That project would include shops, offices and
was postponed after the completion of 72 residential units         residential living, all centered on a public park built on
                                                                   top of an underground parking deck
A new building of luxury apartments known as the
Gallery Lofts opened for leasing The renovation of the
former Brown & Williamson tobacco plant on chestnut
street was a project of the Goler community development
corp The building was originally planned as condominiums,
                                                                   hAnes mAll BouleVARd
but due to the economic downturn, Goler cdc designated             hanes mall Boulevard remains one of the most heavily
the building for apartments instead Goler cdc has also             traveled roads in Winston-salem Hanes Mall and
built a 79-room affordable-housing apartment complex for           many free-standing big-box stores such as Lowe’s
senior citizens as part of its revitalization plan for a 15-acre   Home Improvement Warehouse, Home Depot,
tract of land that was once a thriving African-American            Target, Sam’s Club, Costco and Walmart
neighborhood of homes and businesses Goler cdc grew                continue to make hanes mall Boulevard a major
out of efforts of Rev seth o larty and his congregation at         shopping destination for visitors from throughout
the Goler memorial Ame Zion church to restore the                  northwest north carolina
neighborhood to its former glory, with plans for shops
and homes for people of all races and income levels

                                                                      2009 AnnuAl FinAnciAl RepoRt
                                                                                                                            13
     community pRoFile
     located halfway between Washington, d c and Atlanta, Georgia, Winston-salem has been named one the
     13 most livable communities in the united states by partners for livable cities, a national non-profit
     organization that has been promoting livable communities since 1975 plc compiles its list of livable
     communities once each decade The current list, compiled in 2004, focused on communities that have a
     “creativity agenda and are using it to prepare for the new economy”
                                 With its moderate climate, convenient location (a two-hour drive to the
                                 mountains and a four-hour drive to the ocean), impressive mix of cultural and
                                 recreational opportunities, world-class health facilities, strong public school
                                 system and superior institutions of higher education, Winston-salem does
                                 indeed offer a high quality of life for its citizens
                                 in addition, the city’s focused efforts to develop its technology sector have
                                 kept the city government at the forefront of the digital revolution
     in 2008, the city was once again ranked among America’s top 10 digital cities in the 150,000 to 249,999
     population category by the center for digital Government Through the internet, city residents are able
     to request services, pay bills, register for recreation programs, conduct business with the inspections
     department, watch archive video tape of city council meetings and more numerous free Wi-Fi spots
     are available along Fourth street and in a number of coffee shops and restaurants throughout downtown
     Winston-salem, as well as at major public locations such as hanes mall and Thruway center A city
     Facebook page has more than 3,800 “friends ”
     in 2008, the city was named one of the top seven intelligent communities in the world by the intelligent
     community Forum, a nonprofit think tank The decision was based on factors including broadband
     network deployment and services; promotion of a knowledge-based workforce; digital inclusion;
     innovation in the public and private sectors; and economic development marketing
     Winston-salem has also been nationally recognized for its efforts to improve and beautify the city Keep
     Winston-salem Beautiful, organized in 1979, marshals thousands of volunteers annually for such events as
     the Great American clean-up in Winston-salem, Big sweep, and community Roots day in addition, Keep
     Winston-salem Beautiful organizes the clean and Green program in local schools and oversees the Adopt-a-
     street, Adopt-a-stream, Adopt-a-park, and Adopt-a-Flower Bed programs in 2009, Keep Winston-salem
     Beautiful, the leading affiliate organization in north carolina, was honored with a president’s circle Award
     from Keep America Beautiful for the sixth year in a row The president’s circle Award recognizes exemplary
     effort by affiliates to reduce litter, minimize waste, and beautify and improve their local communities
14           city oF Winston-sAlem
                                                                         community pRoFile
housinG
Winston-salem’s many housing options give citizens of all     Glenn Oaks,
income levels the means of finding living space that suits    was completed in
both their budget and their lifestyle                         Gateway commons
                                                              by habitat for
Residents looking for heritage and tradition make their       humanity of
homes in such long-established neighborhoods as               Forsyth county
Buena Vista, Sherwood Forest, and Country                     and other private
Club Families seeking luxury homes built for today’s          developers in 2008
lifestyle have a multitude of choices in such newer
neighborhoods as Brookberry Farm, Greenbriar                  in early 2009,
Farm and Timberfield                                          habitat began
                                                              construction
city residents looking for historic neighborhoods can         on 15 new homes
move to Washington Park, West End and                         in the historic
Ardmore, three neighborhoods that date to the early           Cherry Street
20th century and are recognized as national historic          neighborhood near
treasures in the Old Salem Historic District, a               Kimberly park
                                   number of houses           elementary once a
                                   dating to the late 1700s   thriving community
                                   and early 1800s have       of middle-class
                                   been refurbished for       African-American
                                   modern life                families, the
                                                              neighborhood became predominately rental houses and
                                   Residents seeking a true   was overrun by crime and blight in the past several
                                   urban lifestyle have a     decades in addition to habitat’s efforts, private
                                   diverse range of options   developers are also rehabilitating other single-family
                                   with the growth of         homes and several two-story brick apartment buildings
                                   downtown residential       that have been recognized by the national historic
                                   construction At the        Register as one of the few remaining examples of “y”
                                   beginning of the           staircase architecture
                                   decade, only 675
residents lived downtown; it now numbers 2,250, some
of whom are living in remodeled manufacturing and
warehouse buildings new downtown condominium
construction has included West End Village near the           RecReAtion
new baseball park; the newly restored, historic Nissen        city residents enjoy an enviable array of recreational
Building on Fourth street, One Park Vista, an eight-          opportunities: the excitement of college sports with one
story, high-end condominium complex, also on Fourth           ncAA division i level school, championship-caliber golf
street; the Gallery Lofts, luxury apartments in the           courses, tennis, minor league baseball, northwest north
renovated former Brown & Williamson factory; and the          carolina’s largest fall fair, and many other amenities
Winston Factory Lofts, created in the renovated               provided by city government, local universities and
Brown-Rogers-dixon building at east seventh and main          businesses in addition, the city’s piedmont location gives
streets The city also provides lower cost housing             residents easy access to both the north carolina
Gateway Commons, an attractive, modern new                    mountains and its world-famous beaches
neighborhood built under the auspices of hud’s hope
Vi program, replaced the outdated Kimberly park               The Winston-Salem Recreation and Parks
housing project Winston-salem also received federal           Department is recognized as a leader in serving the
money for a second hope Vi project to replace the aging       recreation needs of city residents The city’s recreation
happy hill housing project just south of old salem The        infrastructure includes 17 recreation centers that
hope Vi program also encourages residents to move             collectively offer more than 300 programs and activities
from public assistance to full-fledged homeownership A        for all age groups The city’s recreation centers are also
new single-family home subdivision,

                                                                 2009 AnnuAl FinAnciAl RepoRt
                                                                                                                          15
     tied into WinstonNet, the community high-speed computer network that was created to ensure that all
     citizens have access to the opportunities that computers provide, even if they don’t have a computer at
     home Through Winstonnet, city residents can get on the internet, do homework, produce resumes and
     fliers, complete school projects and participate in “e-government” by filing their tax returns on-line
     The department also operates 76 parks, eight pools with a complete aquatics program of instruction and
     competition, two golf courses, a tennis center with clay courts offering multiple levels of competition, and
     two lakes dozens of tennis courts, soccer fields and baseball diamonds are scattered throughout the city,
     along with a growing system of greenways and fitness trails
     The 15,000-seat Lawrence Joel Veterans Memorial Coliseum provides city residents with a
     venue for concerts, family entertainment and college basketball The coliseum has been renovated with a
     new video board, concourse and concession stands
     The coliseum is the flagship facility of the Winston-Salem Sports and Entertainment
     Complex, an entity created to put all of the city’s sports and public assembly facilities under one
     management team The complex also includes the coliseum annex, a free-standing facility that has a
     basketball court that can accommodate 4,500 spectators and can be set up for a regulation-size hockey
     rink; and Bowman Gray stadium, the site for nAscAR’s longest-running weekly racing series The
     stadium, near the campus of Winston-salem state university, is also the home field for Rams football A
     new $4 3 million field house, a joint project between the city and the university, was completed in 2007
     The sports and entertainment complex also includes the city fairgrounds, home to the Dixie Classic
     Fair The dixie classic Fair is second in size only to the state fair and draws more than 325,000 visitors
     annually from as far away as Virginia, tennessee and south carolina to enjoy the rides, play games on the
     midway, and eat delicious “fair food ” The fair also features concerts, family entertainment, a petting zoo,
     and exhibits of livestock, crops, crafts, and baking that draw more than 3,500 entries
     Groves stadium, across the street from the coliseum and fairgrounds, is home field for Wake Forest
     university football construction was completed in summer 2008 on deacon tower, a seven-story
     addition to the stadium that includes luxury suites and restaurants
     in 2008, ownership of ernie shore Field, which had been the home of the Winston-salem Warthogs class-A
     professional baseball team, was transferred to Wake Forest university Although the team, which has been
     renamed the dash, had hoped to begin its 2009 season at a new downtown baseball park, delays in
     construction necessitated that Wake Forest accommodate the team for another season at ernie shore Field
     Golfers have their pick of 15 public and private golf courses in Winston-salem and Forsyth county,
     including the pGA-caliber championship course at Tanglewood Park and Winston Lake Golf
     Course, a scenic ellis maples-designed course with narrow fairways and numerous streams that can
     challenge any competent golfer Winston lake Golf course and Reynolds Park Golf Course are
     public courses operated by the city Recreation and parks department


16           city oF Winston-sAlem
                                                                            community pRoFile
the city oF the ARts
Winston-salem continues to be a leader in promoting the
arts since the founding of The Arts Council of
Winston-Salem and Forsyth County, the nation’s
first arts council, in 1949 The city is considered north
carolina’s “city of the Arts” and it has a national reputation
as a center of excellence for both the visual and performing
arts in fact, nonprofit arts and culture organizations have
an estimated $104 million economic impact in Forsyth
county annually, resulting in more than 3,800 jobs
A physical example of the importance of the arts in
Winston-salem will be the new Downtown Center
for the Arts, an $11-million complex on the corner
of spruce and second streets that will house the
Hanesbrands Theatre and The Sawtooth
School for Visual Art The new center is an
expansion of the current sawtooth school; construction
began this year on the complex, which will serve as the
southern anchor to the core downtown district The
center will be a multi-purpose facility that brings
performing arts spaces, public galleries and arts
education under one roof The center is expected to be
complete in mid-2010 and is a project of the Arts council
of Winston-salem and Forsyth county
The northern anchor of downtown Winston-salem is
                                The Downtown
                                Arts District,                   visual arts that it is today Gallery, shop and restaurant
                                which consists of                owners collaborate to sponsor First Friday Gallery
                                studios, galleries,              Hops the first Friday of each month to attract people
                                retail shops,                    to downtown
                                restaurants,
                                residences and                   The Downtown Winston-Salem Summer
                                businesses What                  Music Series brings live music and festivities into
                                began as a two-block             downtown on Thursday, Friday and saturday nights
                                area on trade street             during the summer last year, the three-part series, which
                                is now a thriving                includes Alive After Five, Downtown Jazz and
                                downtown district                Summer on Trade, drew more than 50,000 people
                                between Fifth and                during the 15-week series
                                seventh streets along
                                trade and liberty                in addition to the arts, downtown Winston-salem is alive
                                streets The                      day and night with over 60 restaurants and clubs and
                                Downtown                         more than 70 galleries and shops Annual events include
                                Arts District                    the Salute! Wine Festival in may that showcases
                                Association is the               north carolina wines and Rock the Block, a
                                neighborhood                     celebration each september featuring bands, food
                                organization that has            vendors and a children’s play area These events draw
                                worked since 1984 to             more than 40,000 people to the downtown area each year
                                turn the district into
                                the vibrant area for



                                                                    2009 AnnuAl FinAnciAl RepoRt
                                                                                                                             17
                                          The Southeastern Center for Contemporary Art, located
                                          on the former estate of industrialist James G hanes, transferred
                                          ownership to the state of north carolina in 2007 since that time,
                                          seccA has been reshaping its strategic plan and image with the
                                          leadership of a new director That process involved a year-long closure
                                          of the museum for major renovations, which are slated for completion
                                          in January 2010 to maintain its presence in the community during
                                          the closure, seccA implemented Inside Out: Artists in the Community
                                          II, a public art program of seven commissioned site-specific art works
                                          or performances throughout Winston-salem
                                           The Reynolda House Museum of American Art is housed
                                           in the historic 64-room country house of Katharine and Richard J
                                           Reynolds, the founder of R J Reynolds tobacco co since opening as
                                           a museum in 1967, Reynolda house has become renowned for its
                                           premier collection of American art ranging from the colonial period to
                                           the present in addition to the house, 28 of the original 30 buildings
                                           remain on the former 1000-acre Reynolds estate and form the collection
                          of shops, galleries and restaurants known as Reynolda Village Reynolda house is
                          affiliated with Wake Forest university, also located on part of the original estate
                          The Museum of Early Southern Decorative Arts, located in the restored
                          colonial town of Old Salem, is the only museum dedicated to exhibiting and
                          researching the regional decorative arts and material culture of the early south With
                          24 period rooms and six galleries, mesdA showcases the furniture, paintings,
                          textiles, ceramics, silver, and other metalwares made and used in maryland, Virginia,
                          the carolinas, Georgia, Kentucky, and tennessee from the 1670s through the early
                          19th century in 2009, mesdA opened a new tour, Southernisms: People and Places, the
                          MESDA Collection The new tour uses decorative art objects to explore the people and
     places that make the south unique
     The Stevens Center, located downtown on Fourth street, is a magnificently restored neoclassical theatre
     that is the primary performance space for the university of north carolina school of the Arts it is also home
     to annual productions of the north carolina shakespeare Festival’s A Christmas Carol, the Winston-salem
     symphony, piedmont opera Theater, and other local and state arts organizations’ performances
     The Winston-Salem Symphony, founded in 1946, makes its home in the stevens center With a
     roster of more than 80 musicians and an annual budget of more than $1 million, the symphony puts on
     more than 60 concerts and 350 educational performances a year The symphony is an integral part of the
     community through collaborations with many united Way agencies and the local schools The symphony
     also supports musical development through the Winston-salem symphony youth orchestras program,
     in-school programs and the youth talent search scholarships for needy young musicians
     every other August, national and international stars of film and stage come to Winston-salem for the
     National Black Theatre Festival, the largest showcase of Black theater in the world The nationally
     acclaimed festival is sponsored by the North Carolina Black Repertory Company, based in
     Winston-salem, and draws approximately 65,000 patrons to see performances by black theatre groups
     from across the united states The festival returned to Winston-salem in 2009, marking its 20th anniversary
     The six-day festival included over 100 theatrical performances with more than 50 celebrities of stage,
     screen and television in attendance
     The Piedmont Opera has been offering the full theatrical experience of opera for 31 years and is the
     second largest opera company in the state The company prides itself in bringing excellent national and
     international singing actors and technicians to work with a full orchestra and a chorus of local singers
     Twin City Stage, (formerly The little Theater of Winston-salem), now in its 75th year, performs six

18           city oF Winston-sAlem
                                                                         community pRoFile
main stage shows each season The theater is constantly in
production, involving 200 to 400 volunteers lending talent,
energy and countless hours to the performances twin city
stage offers drama education programs for students in
kindergarten through 12th grade as well as for adults
The Piedmont Chamber Singers is an acclaimed
choral group that has performed major works such as
handel’s Messiah and Johann sebastian Bach’s St. John
Passion for more than 30 years The group also performs
other unique sacred and secular offerings not heard
elsewhere in the triad, and features its own conductor
and chamber orchestra
For film lovers, Winston-salem is home to the annual
RiverRun International Film Festival RiverRun
is a competitive event that strives to present diverse
cinematic voices and showcase strong new works from
both established and emerging filmmakers since the            placement courses They also have access to college-level
first festival seven years ago, RiverRun has experienced      courses with dual enrollment at Forsyth technical
steady growth in ticket sales each year, and has an           community college and other local colleges students in
estimated $3 million economic impact on the city              the Winston-salem/Forsyth county schools historically
downtown Winston-salem will soon be home to                   score above the state average on achievement tests and on
Aperture Cinema, a new movie theater that will                the sAt For the 2008-09 school year, the school system
showcase independent, foreign and art-house films in two      met 90 percent of its Adequate yearly progress targets
theaters in the chatham Building at 311 W Fourth street       required by the federal no child left Behind legislation
                                                              in addition, 48 schools also achieved their Adequate
                                                              yearly progress goals
                                                              The school system is currently in the process of
educAtion                                                     completing projects that are funded by a $250 million
                                                              school-bond package passed in 2006 The bond package
Winston-salem provides quality primary and secondary          will fund the construction of seven new schools to ease
schooling and offers a comprehensive selection of options     overcrowding in existing schools; three replacement
for higher education                                          schools; and renovations and expansions of 14 existing
The Winston-Salem/                                                         schools every school will also receive at least
Forsyth County                                                             one wireless computer lab
Schools serve 52,000                                                       in addition to public schools, parents have
students in 80 schools                                                     the option of sending their children to more
under the school board’s                                                   than 29 private schools in Forsyth county,
“schools of choice” plan,                                                  both secular and church-affiliated
parents can choose
schools within eight                                                       Winston-salem also provides a diverse array
elementary and seven                                                       of colleges and universities
middle school zones All
schools offer accelerated                                                  Wake Forest University, which
classes for academically                                                   celebrates its 175th anniversary in 2009,
gifted students and                                                        is a private liberal-arts university with an
programs for most                                                          enrollment of about 6,800 students,
students with special needs in addition, parents can          including 4,400 undergraduates and 2,400 graduate and
chose between 12 county-wide magnet schools high              professional students The main campus on Reynolda
school students have access to the career center, which       Road hosts all undergraduate programs, most graduate
offers 30 vocational programs and 30 advanced                 programs, the Babcock school of management, the
                                                              school of law and the divinity school The Bowman


                                                                 2009 AnnuAl FinAnciAl RepoRt
                                                                                                                          19
     Gray campus houses The school of medicine, which is co-located with the north carolina Baptist hospital
     and is one of the leading academic medical centers in the nation
     since 1997, U.S. News & World Report has ranked the university in the top 30 of its annual “America’s Best
     colleges” guide in the 2010 guide WFu was 28th in overall rankings and 11th in undergraduate teaching
     Kiplinger’s Personal Finance magazine ranks the university 20th on its 2009 list of the 50 best values in
     private universities
     Wake Forest made a landmark decision in its admission requirements last year, becoming the first
     top-30 national university to adopt a test-optional policy on standardized tests for admission The
     university continued its connection to national politics when Vice president Joe Biden became the
     first sitting vice president to deliver a commencement address at Wake Forest last year
     Winston-Salem State University, an historically black university, is a premier public institution
     offering 40 undergraduate and 10 graduate degrees it is one of the 16 constituent universities of the
     university of north carolina system and consistently ranks among the best public universities in the
     south With an enrollment of more than 6,400 students, Wssu has earned many awards for its academic
     programs and outstanding commitment to its students and the community in 2009, U.S. News & World
     Report ranked Winston-salem state 27th on its list of the top baccalaureate colleges in the south and 17th
     on its list of historically black universities in summer 2009, Wssu chancellor donald Reaves announced
     that Wssu would abandon its plans to join division i of the ncAA because of the enormous cost of
     meeting division requirements, including upgrading facilities and offering many more athletic scholarships
     instead, Wssu will rejoin the smaller but highly popular ciAA conference
                                                 The University of North Carolina School of the
                                                 Arts is an arts conservatory with an international
                                                 reputation for training talented students for professional
                                                 careers in the arts The school changed its name last year
                                                 from The north carolina school of the Arts and unveiled a
                                                 new logo in early 2009 to accompany its new name As part
                                                 of the unc system, the school offers instruction to more
                                                 than 1,100 students enrolled in middle school through
                                                 graduate levels students must audition or interview for
                                                 admission to the school of the Arts and are trained for
                                                 careers in performing, visual, and film and television arts
                                                 students study with resident master teachers who have had
                                                 successful careers in the arts and who remain active in their
                                                 professions performance is an integral part of their
                                                 training students, faculty and guests present more than
     400 public performances and screenings annually, not only in Winston-salem but across the state, in major
     u s cities and overseas
     Salem College, founded in 1772, is the 13th oldest college in the united states and the oldest
     educational institution for women in the nation since it was established by moravian settlers, salem has
     championed independence for women in thought and action, and it continues this tradition with its
     unique salem signature program that emphasizes self-knowledge, community service and career
     preparation With an enrollment of more than 1,100, salem ranked 67th in Forbes magazine’s second
     annual ranking of America’s 600 best colleges The college came in at number 14 on Forbes’ list of
     “America’s Best college Buys” and was one of only 23 schools nationwide to place in the top 100 on both
     lists salem is the first college in north carolina to add a master’s degree program in which students can
     earn licensure to teach children from birth to kindergarten, a program rated “exemplary” by the n c state
     Board of education in 2009, The White house historical Association commissioned salem art professor,
     author and illustrator John hutton to provide a special presentation copy of his book The White House
     ABC: A Presidential Alphabet to the obama family as an inauguration gift salem also had major


20           city oF Winston-sAlem
                                                                        community pRoFile
                                                             inFRAstRuctuRe
                                                             And puBlic sAFety
                                                             Winston-salem provides professional and financially
                                                             sound municipal services
                                                             The Winston-Salem/Forsyth County Utility
                                                             Commission provides comprehensive utility services,
                                                             including water, sewage treatment and solid waste
                                                             disposal The Winston-salem/Forsyth county utility
                                                             commission approved in 2008, a 7 percent increase in
                                                             water rates and a 9 percent increase in sewer rates to help
                                                             pay for capital improvements to the water and sewer
                                                             system during the next six years Those improvements
                                                             will include completely rebuilding the Thomas Water
                                                             treatment plant, updating the Archie elledge Wastewater
                                                             treatment plant and replacing aging water and sewer
developments in its athletics department last year with      lines in the city’s older neighborhoods even with the rate
the unveiling of its new athletic logo and becoming a        increase, the bimonthly water and sewer bill for the
member of the ncAA division iii The college also             average household in Winston-salem is $57 44, making
became a part of the Great south Athletics conference        the city’s rates among the lowest in the southeast and the
(GsAc), which is a group of ncAA division iii member         lowest among north carolina’s largest cities
institutions from the southeast with similar academic
and athletic interests                                       The commission’s staff of 342 city employees operates
                                                             and maintains three water plants, two sewage treatment
Forsyth Technical Community College is one of                plants, three landfills, and a distribution and collection
the largest community colleges in north carolina serving     system that includes 14 water tanks, seven pumping
more than 10,000 students it offers 184 programs of          stations for fresh water, 52 pumping stations for
study that lead to associate’s degrees, certificates or      wastewater, and 3,296 miles of water and sewer lines  The
diplomas in such fields as health care, engineering          three water treatment plants have a combined capacity of
technologies, business and office technologies, criminal     97 million gallons per day, allowing plenty of capacity for
justice, automotive technology, logistics management,        future growth Average demand is 44 million gallons per
nanotechnology and biotechnology  Forsyth tech has the       day, but can increase to as much as 65 million gallons per
largest health technology and Biotechnology degree           day in the summer The water system draws 80 percent of
programs in the state, as well as the oldest and largest     its raw water from the yadkin River and 20 percent from
Race car technology program The college offers the
only degreed community college nanotechnology
program in the southeast u s. The school also offers
customized training for employers as well as services for
entrepreneurs through the Forsyth tech small Business
center The college is providing a key educational
resource for thousands of adults seeking to go back to
school or to retrain themselves in another career field as
a result of the current economy last year, Forsyth tech
opened a third off-campus building, the northwest
Forsyth center in King it also has plans to build The
Forsyth tech center for emerging technologies in
Winston-salem, which will train technicians in
biotechnology and nanotechnology to support the growing
research and development efforts in these areas as well as
house the college’s growing corporate training efforts




                                                                2009 AnnuAl FinAnciAl RepoRt
                                                                                                                       21
                                        salem lake These have proved to be very reliable sources of water even
                                        during serious droughts in addition, Winston-salem has the right to
                                        more than 11 billion gallons of water stored in the Kerr scott Reservoir
                                        upriver in Wilkes county
                                        The city’s waste-disposal needs have been provided for with the
                                        expansion of the Hanes Mill Road Landfill, approved in 2002 This
                                        expansion will extend the life of the landfill through at least 2025 The
                                        commission also operates a separate landfill for construction and
                                        demolition debris
                                        The Winston-Salem Police Department, with approximately
                                        500 sworn officers and 157 civilian employees, is one of only 600 law
                                        enforcement agencies world-wide to be accredited by commission
                                        of Accreditation for law enforcement Agencies The accreditation
     Alexander R. Beaty Public Safety   signifies that the department has maintained compliance with 369
     Training and Support Center        standards established by the commission
     The Wspd was recently awarded a grant in the amount of $3,884,575 00 to hire 25 new officers The grant,
     known as the 2009 cops hiring Grant, is part of the cops hiring Recovery program funded through the
     u s department of Justice’s office of community oriented policing services, also known as cops
     in July 2009 the police and Fire departments moved their training facilities into the new Alexander
     R. Beaty Public Safety Training and Support Center The center serves the police and Fire
     departments, consolidates police evidence storage in one location, and has new forensics facilities,
     including two bays for examining vehicles for evidence
     The training and support center was originally built in the 1920s as an annex to a furniture factory by
     B F huntley Furniture company Thomasville Furniture took over the factory when it bought huntley After
     Thomasville closed the plant, it was used by a warehouse and storage business before the city acquired it
     The Winston-Salem Fire Department has 285 certified firefighters serving in 16 engine companies,
     four aerial companies, a dedicated rescue company, and a hazardous materials response team, providing an
     average response time of under four minutes each fire station has trained emergency medical technicians on
     duty 24 hours a day who provide quick response to emergency medical calls The Fire department also conducts
     fire safety inspections, reviews construction plans, investigates fire scenes and issues fire-inspection permits
     in late 2008, city manager lee d Garrity appointed Antony R Farmer as Winston-salem’s new fire chief
     Farmer assumed his duties december 1 upon the retirement of Fire chief John Gist Farmer, a 25-year
     veteran of the Fire department, who had most recently been a district fire chief overseeing seven engine
     companies and two truck companies in the northwest portion of Winston-salem previously Farmer has
     served as fire fighter, engineer, captain and battalion chief
     The Winston-Salem/Forsyth County Office of Emergency Management develops
     emergency plans and conducts emergency responder and public training courses The office responds
     24 hours a day to disasters or potential disasters and is responsible for assisting private industry and the
     public with management of hazardous materials
     in 2008, the Forsyth county local emergency planning committee (lepc) and citizen corps council
     was presented the first annual “2008 citizen corps council of the year” award at the north carolina
     citizen corps conference at sunset Beach The citizen corps council concept was created in response
     to the terrorist events of september 11, 2001, in order to promote public education and outreach, training
     and volunteer service within communities across the nation The Forsyth county lepc and the citizen
     corps council coordinate north carolina’s largest national preparedness month event, “emergency
     preparedness night with the Warthogs” at ernie shore Field in Winston-salem The event has been held
     in late August to raise public awareness about the fact that september is national preparedness month

22              city oF Winston-sAlem
2009 AnnuAl FinAnciAl RepoRt
                               23
     Organizational Chart


                                   CitizeNS oF
                                 WiNStoN-SALem

                                     mAyor &
                                   City CouNCiL

          BoArdS &                                         City AttorNey
         CommiSSioNS                                          Angela I. Carmon

                                   City mANAger
                                       Lee D. Garrity

              poLiCe                                          pLANNiNg
          Scott A. Cunningham                                  A. Paul Norby

     Budget & evALuAtioN                                        FiNANCe
             Ann G. Jones                                       Denise C. Bell




       ASSiStANt City               deputy City             ASSiStANt City
         mANAger                     mANAger                  mANAger
         Gregory M. Turner            Derwick L. Paige        Martha L. Wheelock

       emergency management      city secretary          city link
       engineering               development/mWBe        Facilities/Asset management
       Fire                      housing development     Fleet services
       sanitation                human Relations         human Resources
       streets                   inspections             information systems
       stormwater                neighborhood services   internal Audit
       transportation            Real estate             marketing/communications
       utilities                 Recreation              public Assembly Facilities




24       city oF Winston-sAlem
City Officials
Mayor & City Council




                  vivian h. Burke          daniel v. Besse        robert C. Clark              Joycelyn v.
                  Mayor Pro Tempore          Southwest Ward           West Ward                 Johnson
                   Northeast Ward                                                                 East Ward

J. Allen Joines
     Mayor




                   molly Leight          Nelson L. malloy, Jr.       Wanda S.                evelyn A. terry
                     South Ward                North Ward            merschel                  Southeast Ward
                                                                    Northwest Ward


                  derwick l paige, Deputy City Manager            Financial management Services
                  Gregory m turner, Assistant City Manager        clark G case,
                  martha l Wheelock, Assistant City Manager         Assistant Financial Officer, Treasurer
                  denise c Bell, Chief Financial Officer          lisa m saunders,
                  Ann G Jones, Director of Budget & Evaluation      Assistant Financial Officer, Controller
                  A paul norby, Director of Planning              Anthony J Baker, Risk Manager
                  scott A cunningham, Chief of Police             craig d sheppard, City Revenue Collector
                  Department
 Lee d. garrity
   City Manager
                  general Counsel                                Bond paying Agent
                  Angela i carmon, City Attorney                 The Bank of new york mellon trust co , n A ,
                                                                   New York, New York
                  Bond Counsel
                  parker, poe, Adams and Bernstein llp           independent Auditors
                    Charlotte & Raleigh, North Carolina          cherry, Bekaert & holland, l l p
                                                                  Raleigh, North Carolina




                                                           2009 AnnuAl FinAnciAl RepoRt
                                                                                                                25
                                                Independent Auditor’s Report




     to the Honorable mayor and members of the city council
     city of Winston-salem, north carolina
     We have audited the accompanying financial statements of the governmental activities, the business-type
     activities, each major fund, and the aggregate remaining fund information of the city of Winston-salem, north
     carolina (the “city”) as of and for the year ended June 30, 2009, which collectively comprise the city’s basic
     financial statements as listed in the table of contents . These financial statements are the responsibility
     of the city’s management . our responsibility is to express opinions on these financial statements based on
     our audit .
     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 . An audit
     includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements .
     An audit also includes assessing the accounting principles used and significant estimates made by management,
     as well as evaluating the overall financial statement presentation . We believe that our audit provides a reasonable
     basis for our opinions .
     in our opinion, based on our audit, the financial statements referred to above present fairly, in all material
     respects, the financial position of the governmental activities, the business-type activities, each major fund,
     and the aggregate remaining fund information of the city as of June 30, 2009, and the respective changes in
     financial position and cash flows, where appropriate, thereof and the respective budgetary comparison of the
     General Fund for the year then ended in conformity with accounting principles generally accepted in the
     united states of America .
     in accordance with Government Auditing Standards, we have also issued our report dated october 12, 2009 on
     our consideration of the city’s internal control over financial reporting and our tests of its compliance with
     certain provisions of laws, regulations, contracts and grant agreements and other matters . The purpose of that
     report is 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 internal control over financial reporting . That report
     is an integral part of an audit performed in accordance with Government Auditing Standards and should be
     considered in assessing the results of our audit .




2
26                      city oF Winston-sAlem
As discussed in the notes to the financial statements, management discovered that certain capital assets
were understated, a prior year lease receivable was not recorded and that certain internal service funds
were improperly reported as fiduciary trust funds in the prior year . Accordingly, beginning net asset
balances for June 30, 2008 have been restated to properly reflect the increase in net assets .
management’s Discussion and Analysis and the schedules of Funding progress and employer
contributions as listed in the table of contents are not a required part of the basic financial statements
but are supplementary information required by the Governmental Accounting standards Board . We
have applied certain limited procedures, which consisted principally of inquiries of management regarding
the methods of measurement and presentation of the required supplementary information . However, we
did not audit this information and express no opinion on it .
our audit was performed for the purpose of forming an opinion on the financial statements that
collectively comprise the basic financial statements of the city . The introductory information, combining,
and individual non-major fund financial statements and schedules and the statistical tables, as well as the
accompanying schedule of expenditures of federal and state awards as required by u .s . office of
management and Budget circular A-133, Audits of States, Local Governments, and Non-Profit
Organizations, 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
non-major fund financial statements and schedules and the accompanying schedule of expenditures of
federal and state awards have been subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, are fairly stated, in all material respects, in relation to the basic
financial statements taken as a whole . The introductory information and the statistical tables have not been
subjected to the auditing procedures applied in the audit of basic financial statements and, accordingly, we
express no opinion on them .
cHeRRy, BeKAeRt & HollAnD, l .l .p .


Raleigh, north carolina
october 12, 2009




                                                               2009 AnnuAl FinAnciAl RepoRt
                                                                                                                  3
                                                                                                                  27
     Management’s Discussion and Analysis
     our discussion of the city of Winston-salem’s financial performance is intended as an overview of the city’s
     financial performance for the fiscal year ended June 30, 2009 The financial statements and notes included in
     this report present the financial position and operations of governmental and business activities and fiduciary
     responsibilities of the city during the fiscal year, the city continued its sound current and long-range policies
     for financial management These policies are intended to:
         • expand and diversify sources of revenue other than property taxes;
         • maintain relatively low-property tax rates;
         • facilitate capital improvements by maintaining adequate resources and reasonable financing capacity;
         • augment resources by astute cash management;
         • enhance management techniques to improve productivity and efficiency;
         • provide self-sufficient public services that are similar in operation to private enterprises; and
         • continue city-funded affordable housing initiatives to supplement federal housing programs
     city policies encourage the use of local revenue to provide basic services instead of depending upon uncertain
     federal and state sources We encourage readers to consider the information presented here in conjunction
     with additional information furnished in our letter of transmittal


     FiNANCiAL highLightS
     highlights of the city’s fiscal year ended June 30, 2009, include:
         • city of Winston-salem total net assets increased approximately $3 4 million from $753 6 million to
           $757 million
         • At June 30, 2009, total net assets of $757 million included $214 8 million (unrestricted net assets), which
           in large part, have been reserved for specific purposes or needed for working capital to meet the city’s
           ongoing obligations to citizens and creditors The unrestricted net assets should not be used to fund
           ongoing operations other than working capital because major financial stress would be likely as these
           assets are depleted
         • At June 30, 2009, the city’s governmental funds reported combined fund balances of $130 3 million, a
           decrease of $22 3 million The capital projects fund decreased $17 4 million due to the spending of
           outstanding bond proceeds
         • undesignated fund balance of the general fund (approximately $21 4 million) continues to meet
           working capital requirements and a policy of reserving at least 10% of the succeeding fiscal year budget
           legal provisions and financial policies of the city restrict fund balances in other funds to the purposes
           of those funds
         • The city’s total long-term liabilities increased by $79 7 million to $693 million Water and sewer revenue
           bonds were issued in march, 2009, and general obligation refunding bonds were issued in may, 2009
         • property taxes supported 46 percent of governmental services to citizens and the community in 2009
           The city’s tax rate remained at $0 49, no change from fiscal year 2008
         • city of Winston-salem maintained its AAA bond rating from all three major rating agencies




28                  city oF Winston-sAlem
overvieW oF FiNANCiAL StAtemeNtS
                   required Components of Annual Financial report
                                                     Figure 1


                     management’s                                    Basic Financial Statements
                  discussion & Analysis




    government-wide                                Fund Financial                       Notes to the Financial
   Financial Statements                             Statements                              Statements

                 Summary                                                                           detail

BASiC FiNANCiAL StAtemeNtS
This discussion and analysis serves as an introduction to the city of Winston-salem’s basic financial statements,
which consist of three components; 1) government-wide financial statements, 2) fund financial statements, and
3) notes to the financial statements as shown above The basic financial statements present two different views
of the city through the use of government-wide 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 This report includes all funds and account groups of the city of Winston-
salem as well as its component units, which are described below note 1A in the financial report includes
further discussion of the reporting entity and descriptions of funds


goverNmeNt-Wide FiNANCiAL StAtemeNtS
The first two statements (exhibits 1 and 2) in the basic financial statements are the Government-wide Financial
Statements These financial statements provide a broad overview of the city’s financial position and operations,
in a manner similar to a private-sector business These statements also include two component units, Risk
Acceptance management corporation and north carolina municipal leasing corporation Although legally
separate, financial information for these non-profit corporations is blended in the financial statements because
under federal tax regulations they may provide services only to the city
The statement of net assets presents the city’s assets and liabilities, with the difference between the two reported
as net assets over time, increases or decreases in net assets may serve as a useful indicator of whether the
financial position of the city is improving The statement of activities presents information on how the city’s
net assets changed during the most recent fiscal year All changes in net assets are reported as soon as the
underlying event giving rise to the change occurs, regardless of the timing of related cash flows Therefore,
revenues and expenses are reported in this statement, which result in cash flows in future fiscal periods, such
as uncollected taxes and earned but unused vacation leave




                                                                     2009 AnnuAl FinAnciAl RepoRt
                                                                                                                       29
     Government-wide statements are divided into governmental and business-type activities The governmental
     activities include most of the city’s basic services such as public safety, parks and recreation, environmental
     health, transportation, community and economic development, and general government property taxes,
     intergovernmental revenues, and other local taxes finance about 68% of the costs of these activities Business-
     type activities include water and sewer utility, solid waste disposal, stormwater management, public facilities,
     fairgrounds, parking, cemeteries, and Winston-salem transit Authority services These activities are primarily
     paid from charges to customers


     FuNd FiNANCiAL StAtemeNtS
     The fund financial statements (exhibits 3 through 10) provide a more detailed look at the city’s most significant
     activities A fund is used to maintain control over resources that have been segregated for specific activities or
     objectives Fund accounting ensures and reflects compliance, or non-compliance, with related legal
     requirements, such as General statutes, grantor provisions, or the city’s budget ordinance The funds of
     the city are divided into three categories: governmental funds, proprietary funds, and fiduciary funds
     Governmental Funds. Governmental funds are used to account for most basic services and are reported as
     governmental activities in the government-wide financial statements Governmental funds are reported using
     an accounting method called modified accrual accounting, which provides a short-term spending focus The
     relationship between government activities (reported in the statement of net Assets and the statement of
     Activities) and governmental funds is described in a reconciliation that is a part of the fund financial statements
     The city adopts an annual budget for its general fund, certain special revenue funds, debt service fund and
     capital projects funds as required by General statutes A budgetary comparison statement demonstrating
     compliance with the budget ordinance is provided for the general fund in the basic financial statements
     Proprietary Funds. The city has two different kinds of proprietary funds Enterprise Funds report business-
     type activities that are included in the government-wide financial statements enterprise funds are used to
     account for water and sewer utilities, solid waste disposal, cemeteries, stormwater management, parking, public
     transportation, fairgrounds, and public facilities activities Rate structures of enterprise operations, other than
     public transportation and public facilities, are set, insofar as practicable, to recover full operating costs plus
     depreciation and interest expense and to provide reasonable working capital and other reserves Internal Service
     Funds are an accounting device used to accumulate and allocate costs internally among the city’s various
     functions The city uses internal service funds to account for its workers compensation, health benefits, dental
     and flexible benefits and employee benefits funds These funds predominantly benefit governmental functions
     and have been included with the respective governmental activities in the government-wide financial
     statements Risk Acceptance management corporation, a blended component unit, predominantly benefits
     business-type activities it has been included within the business-type activities in the government-wide
     financial statements
     proprietary fund financial statements provide more detailed information than that presented in the
     government-wide financial statements and separate information for the water and sewer utility and solid waste
     disposal operations, which are major funds of the city
     Fiduciary Funds. Fiduciary funds are used to account for resources held by the government in a trustee
     capacity for others Because the resources of fiduciary funds cannot be used to support the government’s own
     programs, such funds are specifically excluded from the government-wide statements The city uses fiduciary
     funds to account for the assets of post-employment benefits, which include the Winston-salem police officers’
     Retirement and police officers’ separation Allowance plans, and retired life and health programs
     Other Information. in addition to the basic financial statements and accompanying notes, this report
     includes certain required supplementary information in exhibits 11 and 12 concerning the city’s progress in
     funding its obligation to provide postemployment benefits through the Winston-salem police officers’
     Retirement, police officers’ separation Allowance Retirement and post-employment Benefits plans

30                  city oF Winston-sAlem
NoteS to the FiNANCiAL StAtemeNtS
The next section of the basic financial statements is the notes to the financial statements, which adds detailed
explanations of some of the data contained in the statements The notes may provide a better understanding of
the information presented in the government-wide and fund financial statements


goverNmeNt-Wide FiNANCiAL ANALySiS
The following is a summary of net assets for the city of Winston-salem at June 30, 2009 (as shown in exhibit 1)
with comparative data for June 30, 2008

Net Assets                                                                                                      Figure 2
(dollars in thousands)              Governmental Activities       Business-Type Activities              Total
                                    2009            2008          2009             2008         2009            2008
Current and other assets            $ 219,722         $208,627    $ 234,661         $ 172,746   $ 454,383       $ 381,373
Capital assets                        313,927          303,285     762,031            728,673   1,075,958       1,031,958
      Total assets                    533,649          511,912     996,692            901,419   1,530,341       1,413,331
Long-term liabilities                 205,351          230,897     487,548            382,340    692,899          613,237
Other liabilities                      51,822           20,034       28,618            26,419     80,440           46,453
      Total liabilities               257,173          250,931     516,166            408,759    773,339          659,690
Net assets:
   Invested in capital assets,
     net of related debt               72,162           69,927      364,361           349,377    436,523          419,304
   Restricted                         105,663          103,397                                   105,663          103,397
   Unrestricted                        98,651            87,657     116,165           143,283    214,816          230,940
 Total net assets                   $ 276,476         $ 260,981   $ 480,526         $ 492,660   $ 757,002        $ 753,641

As indicated above, assets of the city exceeded liabilities by $757 million at June 30, 2009 Analysis of the
business-type activities indicate that the capital assets increased $33 4 million in fiscal year 2009 and net assets
decreased $12 million
A large portion of the city’s net assets (57 7 percent) at June 30, 2009, are investments in capital assets, which are
used to provide services to citizens investment in capital assets is reported net of the outstanding related debt;
however, resources to repay that debt must be provided in future years from current revenues Restricted net
assets, 14% of the city’s net assets, represents resources that are subject to external restrictions, such as bond
covenants for future equipment and replacement and the perpetual care fund
At June 30, 2009, the city is able to report positive balances in all three categories of net assets The community
development Fund has a negative fund balance, $600 due to timing of federal grant reimbursements
Governmental activities. net assets of governmental activities increased by $15 5 million Key elements of
this increase are as follows:
     • property tax revenues decreased by $2 3 million or 2 3 percent, during the year This decrease was a
       result of the prorated property tax levy received in fiscal 2008 for property annexed september 30, 2008
       The 2009 property tax rate was 49 cents current real and personal property tax collections during fiscal
       year 2009 were 97 2 percent of the current year levy, one of the highest in the state
     • General revenues, other than property taxes, decreased $4 1 million As a result of the economic downturn,
       sales taxes decreased 9 percent investment returns decreased investment income by $5 7 million
     • program revenues provided 30 percent of the support for governmental services




                                                                        2009 AnnuAl FinAnciAl RepoRt
                                                                                                                             31
           • total governmental expenditures decreased $380 thousand during fiscal year 2009 The city manager
             ask departments to decrease spending by 10 percent, monitor travel and training and delay capital
             spending The result was expenditures did not increase for 2009
           • Federal and state grants are an important source of supplementary funding for public facilities and
             programs during fiscal year 2009, the city received nearly $29 7 million in grant revenue for restricted
             programs or specific projects and $19 6 million related to general governmental activities
     Business-type activities. net assets of business-type activities decreased by $12 1 million primarily
     attributable to investment losses Rate structures of enterprise operations, other than the transit Authority and
     public facilities management, are set, insofar as practicable, to recover full operating costs plus depreciation and
     interest expense and to provide a reasonable working capital and reserve The transfer out of the solid waste
     disposal fund to the general fund is to provide funds for a community recycling program The parking and
     public facilities funds are provided an operating subsidy through a transfer from the general fund The transit
     Authority is provided operating support through a transfer from the mass transit tax fund, a special revenue
     fund established to collect property taxes to be used for mass transportation

      Business-type Activities                                                                                                 Figure 3
      June 30, 2009                                Operating
      (dollars in thousands)                       Expenses                     Nonoperating                                    Increase
                                     Operating      Before       Depreciation     Revenues        Capital       Transfers      (Decrease)
                                     Revenues     Depreciation    Expense        (Expenses)     Contributions    In(Out)       Net Assets
      Water and sewer utility          $ 61,627       $ 37,101       $ 19,753      $ (20,754)        $ 5,752           $ (6)     $ (10,235)
      Solid waste disposal               10,613          7,521          1,382         (1,616)                        (2,847)        (2,753)
      Cemeteries                            434            513             22             (1)                          134              32
      Stormwater management              10,457          4,673            452             32             340         (1,392)         4,312
      Parking                             1,844          1,506            879           (437)                          916             (62)
      Transit Authority                   2,986         11,221          1,749          4,919             710         3,721            (634)
      Public facilities                   3,903          5,900          1,692          3,916                         (3,161)        (2,934)
       management
      Fairgrounds                         2,468          1,759            216            (90)                          (500)           (97)
      Risk Acceptance                     3,248          1.230            613         (6,132)                                       (4,727)
        Management Corp.
     Total                             $ 97,580       $ 71,424       $ 26,758      $ (20,163)        $ 6,802       $ (3,135)     $ (17,098)




     FiNANCiAL ANALySiS oF the City’S FuNdS
     As noted earlier, fund accounting enables the city to ensure and demonstrate compliance with finance-related
     legal requirements
     Governmental Funds. The focus of the city’s governmental funds is to provide information on near-term
     inflows, outflows, and balances of usable resources such information is useful in assessing the city’s financing
     requirements
     The general fund is the chief operating fund of the city At the end of the current fiscal year, total fund balance
     of the general fund was approximately $37 2 million of which $21 4 million was undesignated As a measure
     of the general fund’s liquidity, it may be useful to compare both the total and undesignated fund balance
     undesignated fund balance represents 11 9 percent of the fiscal year 2009 budgeted expenditures, while total
     fund balance represents approximately 20 6 percent The fund balance of the general fund decreased by
     $2 2 million during the fiscal year




32                             city oF Winston-sAlem
Figure 4 presents the changes in net assets of the city of Winston-salem

Changes In Net Assets                                                                                                    Figure 4
(dollars in thousands)                    Governmental Activities       Business-type Activities                 Total
                                          2009            2008          2009             2008            2009             2008
Revenues:
  Program revenues:
     Charges for services                  $ 44,114        $ 43,983      $ 97,580         $ 96,445       $ 141,694        $ 140,428
     Operating grants and contributions      19,649          15,773        10,041            5,457          29,690           21,230
     Capital grants and contributions           710             838         6,802           15,914           7,512           16,752
   General revenues:
      Property taxes                         98,209         100,467                                         98,209         100,467
      Sales taxes                            28,630          31,402                                         28,630          31,402
      Other local taxes                         644             745                                            644             745
      Franchise taxes                        14,020          13,582                                         14,020          13,582
      Local tax reimbursements                4,109           3,991                                          4,109           3,991
      Investment income                        (451)          5,244       (12,548)                 (9)     (12,999)          5,235
      Other
        Total revenues                     209,634          216,025      101,875           117,807        311,509          333,832
Expenses:
    General government                       31,861          29,656                                        31,861           29,656
    Public protection                        83,882          83,541                                        83,882           83,541
    Environmental health                     18,704          19,100                                        18,704           19,100
    Transportation                           19,578          18,405                                        19,578           18,405
    Culture and recreation                   17,575          15,720                                        17,575           15,720
    Community and economic development       30,308          36,510                                        30,308           36,510
    Human resources                           1,153           1,094                                         1,153            1,094
    Other
    Interest and fiscal charges              11,945          11,360                                         11,945          11,360
    Water and sewer utility                                                71,705           69,507          71,705          69,507
    Solid waste disposal                                                     9,564          10,258           9,564          10,258
    Cemeteries                                                                 537             588             537             588
    Stormwater management                                                    5,168           4,918           5,168           4,918
    Parking                                                                  3,327           3,265           3,327           3,265
    Transit Authority                                                      12,982           12,588          12,982          12,588
    Public facilities management                                             7,682           8,062           7,682           8,062
    Fairgrounds                                                              2,096           1,968           2,096           1,968
    Risk Acceptance Management Corp.                                         2,776           2,242           2,776           2,242
        Total expenses                     215,006          215,386      115,837           113,396        330,843          328,782
Increase in net assets before transfers       (5,372)            639      (13,962)           4,411         (19,334)          5,050
Transfers-Government-wide                      3,135          (2,553)       (3,135)          2,553
Increase (decrease) in net assets             (2,237)         (1,914)     (17,097)           6,964         (19,334)          5,050
Net assets July 1 as previously stated     260,981          262,895      492,660           485,696        753,641          748,591
Prior period adjustment                      17,732                          4,963                          22,695
Net assets July 1 as restated              278,713         262,895       497,623          485,696         776,336          748,591
Net assets, June 30                       $ 276,476       $ 260,981     $ 480,526        $ 492,660       $ 757,002        $ 753,641

The debt service fund has a fund balance of $7 1 million at June 30, 2009 a decrease of $2 7 million, all of which
is reserved for payment of debt service
The fund balance of the capital projects fund decreased by $17 4 million, to $56 8 million at June 30, 2009, all of
which is appropriated for capital projects

                                                                         2009 AnnuAl FinAnciAl RepoRt
                                                                                                                                      33
     General Fund Budgetary Highlights. differences between the original budget, and the final amended
     budget resulted in appropriations increasing $2 5 million during fiscal year 2009 major budget amendments
     included an increase in operating transfers to the public facilities funds for $275 thousand, and an increase in
     system improvements for $312 thousand and an increase in carry over encumbrances
     Proprietary Funds. The city of Winston-salem’s proprietary fund financial statements provide the same
     type of information as that provided in the government-wide financial statements, but in more detail The major
     enterprise funds are the water and sewer and solid waste funds
     net assets of the water and sewer and solid waste disposal funds were $339 6 million and $40 4 million at
     June 30, 2009, respectively The net assets of the water and sewer fund decreased $10 2 million primarily due
     to investment losses and decreased water consumption The water and sewer rates were increased in
     october 2008 to 7 and 9 percent, respectively


     CApitAL ASSet ANd deBt AdmiNiStrAtioN
     Capital assets. The city’s investment in capital assets for its governmental and business–type activities as
     of June 30, 2009, totals $1,076 million (net of accumulated depreciation) These assets include land, buildings,
     improvements other than buildings (infrastructure assets, such as streets, sidewalks, water and sewer lines),
     machinery and equipment, and construction-in-progress

     Capital Assets (net of depreciation)                                                                         Figure 5
     June 30, 2009
     (dollars in thousands)                  Governmental Activities    Business-type Activities          Total
     Land                                              $ 57,303                   $ 34,089                $ 91,392
     Buildings                                           46,274                     174,472                 220,746
     Improvements other than buildings                  120,337                     453,242                 573,579
     Machinery and equipment                             25,457                      11,407                  36,864
     Construction in progress                            64,556                      88,821                 153,377
     Total                                            $ 313,927                   $ 762,031             $ 1,075,958

     major capital asset transactions during the year include the following:
          • construction in progress for governmental activities was $64 6 million, which reflects construction of
            street widening and resurfacing projects, firearms training facility and police evidence storage facility,
            improvements to recreation centers and parks, the brookstown project, and other economic
            development projects
          • Business-type capital assets increased $33 4 million which included major improvements to the
            extension of water and sewer lines, rebuild of the Thomas Water treatment plant, a biosolids dryer
            project, elledge upgrade, and $1 6 million in stormwater capital projects
     Additional information on the city’s capital assets is included in note 3d of the Basic Financial statements
     Long-term Debt. The city utilizes various techniques to fund capital improvements and other long-term
     needs A debt management model is maintained which identifies resources available for current and future
     payment of principal and interest on outstanding debt Resources are identified and designated for payment of
     both principal and interest before issuance of additional debt The debt management model clearly identifies the
     city’s capacity for future debt service and the adequacy of designated resources
     in accordance with the capital improvement program, funding for projects may include: current revenues or
     financing by non-voted general obligation bonds; general obligation bonds authorized by referendum; leasing
     through north carolina municipal leasing corporation; special obligation bonds; revenue bonds for water and
     sewer utilities; and mortgage revenue bonds for housing development


34                            city oF Winston-sAlem
At June 30, 2009 the city had total bonded debt outstanding of $532 3 million, of which, $86 million is backed
by the city’s full faith and credit and $446 3 million in bonds secured solely by specified revenue sources
Revenues of the water and sewer utility system are pledged as security for revenue bonds and special obligation
bonds are secured by the city’s sales tax revenue

 Bonded Debt and Contractual Obligations Outstanding                                                                                           Figure 6
 June 30, 2009 with Comparative Data for June 30, 2008
 (dollars in thousands)      Governmental Activities         Business-Type Activities              Fiduciary Activities                    Total
                              2009           2008                2009          2008               2009              2008          2009              2008
 Bonds:
  General obligation          $ 85,949       $ 93,127        $             $                  $                 $                 $ 85,949          $ 93,127
  Water & sewer revenue                                          428,160       329,865                                             428,160          329,865
  Special obligation             5,620          5,790             12,555        13,800                                              18,175           19,590
Contractual Obligation:
  NCMLC                       102,721        104,281              21,849        23,454             25,000            25,000        149,570          152,735
  Other                         27,055        28,387              16,256        18,913                                              43,311           47,300
 Total                       $ 221,345     $ 231,585         $ 478,820      $ 386,032             $ 25,000          $ 25,000     $ 725,165         $ 642,617

The city has $149 6 million in contractual lease obligations to the north carolina municipal leasing
corporation (“ncmlc”) for certificates of participation issued by the corporation for property and equipment
acquired by the city under lease agreements capital leases have funded equipment and certain real property
acquired under the city’s leasing program for many years ncmlc, a non-profit organization, issues certificates
of participation from time to time for acquisition of real property and equipment expected to be acquired over
approximately 24 months certificates issued for equipment acquisitions have been level at $18 million every
other year since 1996 These certificates of participation are issued at variable interest rates and mature at the
end of five years
General obligation bonded debt service is funded substantially by dedicated sources such as a portion of local
property and sales taxes, one-third of the city’s profits from alcoholic beverage sales, and interest on designated
governmental fund investments The city has capacity for additional future debt because of the allocation of
specific resources and the relatively short schedule of maturing debt About 56 3 percent of outstanding general
obligation bonds will be repaid within 10 years as shown in the following schedule

 General Obligation Bond Debt Service                                                                                                          Figure 7
 (dollars in thousands)
 Maturities                                      Principal                              Percent of Total                       Interest and Principal
 2010-2014                                       $ 24,384                                      28.37                                 $ 42,923
 2015-2019                                          24,035                                     27.97                                    35,971
 2020-2024                                          27,060                                     31.48                                    33,212
 2025-2028                                          10,470                                     12.18                                    11,489
  Total                                          $ 85,949                                     100.00                                $ 123,595

The city maintained triple “A” bond ratings from moody’s investors service, standard and poor’s corporation
and Fitch Ratings The bond ratings are a clear indication of the sound financial condition of city of Winston-
salem, which is one of a few cities in the country that maintains the highest financial rating from all three of the
major rating agencies




                                                                                           2009 AnnuAl FinAnciAl RepoRt
                                                                                                                                                               35
     north carolina general statutes limit the amount of general obligation debt that a unit of government can issue
     to 8 percent of the total assessed value of taxable property located within that government’s boundaries The
     legal debt limit for the city is $1,526,171,070 The city has $10,500,000 in bonds authorized but unissued at
     June 30, 2009
     Additional information regarding the city’s long-term debt can be found in note 3h


     Budget highLightS For the
     FiSCAL yeAr eNdiNg JuNe 30, 2010
     Governmental Activities. The 2010 budget included a property tax rate of $0 4675, which decreased from
     2008-09 The property tax rate is reduced as a result of reassessment of property as of January 1, 2009
     in 2009-10, general fund revenues are projected to decrease by $2 million, compared to the prior year budget,
     primarily as a result of reductions in sales tax, construction permits, and other revenues affected by the
     recession in addition, the amount of fund balance appropriated to balance the general fund budget is reduced
     by almost $700,000 in a recessionary environment, in which we have budgeted much closer to what we will
     actually spend and what we will collect, we must reduce our budgeted reserve appropriation to keep from using
     a portion of reserves every year The budget was balanced by eliminating 32 vacant positions, reducing
     departmental expenditures by 5 percent and limiting capital replacements
     Business-type Activities. to provide sufficient revenues to meet the system’s debt service coverage ratio
     requirements, the city/county utility commission approved a new tiered rate structure and increased water
     rates by 5 percent and sewer rates by 9 percent Winston-salem’s rates will remain the lowest of the five major
     north carolina cites
     in fiscal year 2010, the city/county utility commission recommended decreasing the budget by 5 percent to
     respond to a declining trend in landfill tipping fee revenues


     requeStS For iNFormAtioN
     The city’s annual financial report is filed in city offices and public libraries and questions or requests for
     additional information should be directed to the chief Financial officer, city of Winston-salem, p o Box 2511,
     Winston-salem, north carolina 27102




36                  city oF Winston-sAlem
Basic Financial Statements




                             2009 AnnuAl FinAnciAl RepoRt
                                                            37
     City of Winston-Salem, North Carolina
     Statement of Net Assets
                                                                                                                         exhibit 1
     June 30, 2009                                                                                                     page 1 of 2

                                                                 Governmental             Business-type
                                                                   Activities               Activities                  Total
     Assets
     Current Assets
      Cash and cash equivalents/investments                      $ 151,679,638              $ 75,268,310           $ 226,947,948
      Receivables, net of allowance for uncollectibles
       Taxes                                                          2,923,144                                         2,923,144
       Accounts                                                       1,737,069               10,864,907               12,601,976
       Leases                                                        15,881,820                                        15,881,820
       Assessments                                                      100,242                1,565,020                1,665,262
       Loans                                                         30,472,427                                        30,472,427
        Total receivables                                            51,114,702               12,429,927               63,544,629
      Due from other governments                                     12,818,043                  691,263               13,509,306
      Internal balances                                                 665,322                 (665,322)
      Inventories                                                     1,725,373                2,717,158                4,442,531
      Prepaid items                                                     205,784                  233,770                  439,554
       Total current assets                                        218,208,862                90,675,106             308,883,968


     Noncurrent assets
      Restricted Assets
       Cash and cash equivalents                                                            139,810,491              139,810,491
      Capital Assets
       Land                                                          57,303,021               34,089,380               91,392,401
       Construction in progress                                      64,556,323               88,820,540             153,376,863
       Other capital assets, net of accumulated depreciation       192,067,743              639,121,258              831,189,001
      Unamortized financing costs                                     1,513,559                3,674,935                5,188,494
      Accounts receivables                                                                       500,000                  500,000
        Total noncurrent assets                                    315,440,646              906,016,604            1,221,457,250
         Total assets                                            $ 533,649,508            $ 996,691,710          $ 1,530,341,218




38                        city oF Winston-sAlem
                                                               The accompanying notes are an integral part of the financial statements.
City of Winston-Salem, North Carolina
Statement of Net Assets
                                                                                                              exhibit 1
June 30, 2009                                                                                               page 2 of 2

                                                                           Governmental    Business-type
                                                                             Activities      Activities        Total
 Liabilities
 Current liabilities
   Accounts payable                                                         $ 15,546,791     $ 9,552,457    $ 25,099,248
   Accrued payroll                                                            1,629,971          426,742      2,056,713
   Accrued vacation                                                           2,790,366          668,519      3,458,885
   Accrued interest payable                                                     342,710          802,231      1,144,941
    Loan escrow                                                                   6,598                            6,598
    Unearned revenue                                                          1,647,201          249,659      1,896,860
   Advances from other governments                                              111,258                          111,258
    Current maturities
     Claims payable                                                           4,313,422                       4,313,422
     Contracts payable                                                       19,463,529        3,738,612     23,202,141
     Bonds payable                                                            5,970,308       13,180,000     19,150,308
      Total current liabilities                                              51,822,154       28,618,220     80,440,374
  Noncurrent liabilities
    Contracts payable from restricted assets                                                  11,131,757     11,131,757
   Accrued vacation                                                           6,026,667          983,754      7,010,421
   Accrued interest payable                                                   1,212,824                       1,212,824
   Arbitrage rebate liability                                                    45,039                           45,039
    Landfill closure and postclosure costs                                                    11,879,117     11,879,117
    Claims payable                                                            1,391,974          932,485      2,324,459
    Contracts payable                                                       110,248,167       34,024,423    144,272,590
    Bonds payable                                                            86,426,148     428,596,124     515,022,272
      Total noncurrent liabilities                                          205,350,819     487,547,660     692,898,479
        Total liabilities                                                   257,172,973     516,165,880     773,338,853
 Net Assets
  Investment in capital assets, net of related debt                          72,161,971     364,360,717     436,522,688
  Restricted
    Capital improvements                                                     76,478,451                      76,478,451
    General governmental                                                      2,922,553                       2,922,553
    Public protection                                                         2,450,103                       2,450,103
   Transportation                                                             4,962,441                       4,962,441
    Community and economic development                                       16,931,391                      16,931,391
    Perpetual care
     Nonexpendable                                                            1,918,397                       1,918,397
  Unrestricted                                                               98,651,228     116,165,113     214,816,341
      Total net assets                                                     $ 276,476,535   $ 480,525,830   $ 757,002,365




The accompanying notes are an integral part of the financial statements.
                                                                            2009 AnnuAl FinAnciAl RepoRt
                                                                                                                           39
     City of Winston-Salem, North Carolina
     Statement of Activities
     For the Fiscal year ended June 30, 2009

                                                                                            Program Revenues
                                                                                                Operating
                                                                       Charges for              Grants and           Capital Grants and
     Activities:                                     Expenses           Services               Contributions           Contributions
     Governmental:
      General government                            $ 31,861,386       $ 26,652,466             $        1,880           $
      Public protection                               83,881,733          1,700,590                  1,152,840
      Environmental health                            18,703,681          2,535,948
      Transportation                                  19,578,168          3,298,243                  7,812,142                709,648
      Culture and recreation                          17,574,870          1,996,769                      3,700
      Community and economic development              30,308,169          7,915,373                 10,678,003
      Human resources                                  1,153,345             14,550
      Interest and fiscal charges                     11,944,735
         Total governmental activities               215,006,087         44,113,939                 19,648,565                709,648
     Business-type:
      Water and sewer utility                         71,705,131         61,627,076                    87,050                5,751,888
      Solid waste disposal                             9,563,922         10,612,828                   537,326
      Cemeteries                                         536,961            433,704
      Stormwater management                            5,167,475         10,456,955                                           340,007
      Parking                                          3,326,812          1,843,874                    479,181
      Transit Authority                               12,982,406          2,986,463                  4,931,057                709,635
      Public facilities management                     7,682,326          3,903,511                  4,006,192
      Fairgrounds                                      2,095,933          2,468,397
      Risk Acceptance Management Corporation           2,776,167          3,247,726
         Total business-type activities              115,837,133         97,580,534               10,040,806                6,801,530
         Total City of Winston-Salem               $ 330,843,220      $ 141,694,473             $ 29,689,371              $ 7,511,178

     General revenues:
      Taxes:
        Property taxes
        Sales taxes
        Gross receipts taxes
        Occupancy taxes
      Beer and wine excise-state
      Franchise taxes
      Payments in lieu of taxes
      ABC store allocations
      Hold harmless
      Investment loss
     Transfers
      Government-wide
        Total general revenues and transfers
         Change in net assets
     Net assets - beginning as previously stated
     Prior period adjustment
     Net assets - beginning as restated
     Net assets - ending




40                      city oF Winston-sAlem
                                                                   The accompanying notes are an integral part of the financial statements.
                                                                                                  exhibit 2
         Net (Expense) Revenue and Changes in Net Assets

Governmental             Business-Type
  Activities               Activities                      Total

  $ (5,207,040)          $                            $ (5,207,040)
   (81,028,303)                                        (81,028,303)
   (16,167,733)                                        (16,167,733)
     (7,758,135)                                         (7,758,135)
   (15,574,401)                                        (15,574,401)
   (11,714,793)                                        (11,714,793)
     (1,138,795)                                         (1,138,795)
   (11,944,735)                                        (11,944,735)
 (150,533,935)                                       (150,533,935)

                              (4,239,117)               (4,239,117)
                               1,586,232                 1,586,232
                                (103,257)                 (103,257)
                               5,629,487                 5,629,487
                              (1,003,757)               (1,003,757)
                              (4,355,251)               (4,355,251)
                                 227,377                   227,377
                                 372,464                   372,464
                                 471,559                   471,559
                              (1,414,263)               (1,414,263)
(150,533,935)                 (1,414,263)            (151,948,198)




    98,208,818                                              98,208,818
    28,630,607                                              28,630,607
       163,386                                                 163,386
       480,226                                                 480,226
     1,009,971                                               1,009,971
    14,019,735                                              14,019,735
       170,550                                                 170,550
       970,526                                                 970,526
     1,958,533                                               1,958,533
      (450,329)                (12,548,089)                (12,998,418)

     3,135,376                   (3,135,376)                      -
   148,297,399                 (15,683,465)            132,613,934
    (2,236,536)                (17,097,728)            (19,334,264)
   260,981,461                 492,660,166             753,641,627
    17,731,610                    4,963,392             22,695,002
   278,713,071                 497,623,558             776,336,629
 $ 276,476,535               $ 480,525,830           $ 757,002,365




                                                                          2009 AnnuAl FinAnciAl RepoRt
                                                                                                              41
     City of Winston-Salem, North Carolina
     Balance Sheet
     governmental Funds
     June 30, 2009                                                                                                                  exhibit 3
                                                                                                                Other                Total
                                                                        Debt Service         Capital         Governmental        Governmental
                                                         General Fund      Fund           Projects Fund         Funds               Funds
     Assets
      Cash and cash equivalents                          $ 33,463,506    $ 7,103,854      $ 59,021,487        $ 26,102,443      $ 125,691,290
      Receivables, net of allowance for uncollectibles
         Taxes                                              2,596,419       248,271                                 78,454          2,923,144
         Accounts                                           1,523,438                          123,139              90,492          1,737,069
         Leases                                                          15,600,000          5,928,313                             21,528,313
         Assessments                                                                           100,242                                100,242
         Loans                                                 32,625                                           32,062,802         32,095,427
          Total receivables                                 4,152,482    15,848,271          6,151,694          32,231,748         58,384,195
      Due from other governments                            8,205,569                          491,324           4,121,150         12,818,043
      Due from other funds                                    200,500                                                                 200,500
      Advances to other funds                                                                  665,322                                665,322
      Inventories                                           1,160,322                                              565,051          1,725,373
      Prepaid items                                           205,784                                                                 205,784

           Total assets                                  $ 47,388,163   $ 22,952,125      $ 66,329,827        $ 63,020,392      $ 199,690,507

     Liabilities and Fund Balances
     Liabilities
        Accounts payable                                  $ 5,670,078       $ 37,672       $ 3,461,522         $ 1,375,793       $ 10,545,065
        Accrued payroll                                       660,593                                                  702            661,295
        Due to other funds                                                                                         200,500            200,500
        Loan escrow                                                                                                  6,598              6,598
        Deferred revenue
         Taxes                                              2,596,419       248,271                                 78,454          2,923,144
         Loans                                                 32,625                                           32,062,802         32,095,427
         Leases                                                          15,600,000          5,928,313                             21,528,313
         Other                                              1,232,213                          118,505                              1,350,718
        Advances from other governments                                                                            111,258            111,258
             Total liabilities                            10,191,928     15,885,943          9,508,340          33,836,107         69,422,318

     Fund Balances
       Reserved
        Encumbrances                                        1,883,544                        7,131,363           4,025,701         13,040,608
        Inventories                                         1,160,322                                              565,051          1,725,373
        Prepaids                                              205,784                                                                 205,784
        Capital improvements                                                                48,410,339                             48,410,339
        General governmental                                                                                       318,323            318,323
        Public protection                                                                                        1,279,328          1,279,328
        Transportation                                                                                           4,962,441          4,962,441
        Community and economic development                                                                      13,038,656         13,038,656
        Perpetual care                                                                                           1,918,397          1,918,397
        State statute                                       9,929,507                        1,279,785           3,076,988         14,286,280
       Unreserved
        Designated
          Debt service                                                    7,066,182                                                 7,066,182
          Subsequent year budget                           2,614,400                                                                2,614,400
        Undesignated                                      21,402,678                                                  (600)        21,402,078
           Total fund balances                            37,196,235      7,066,182         56,821,487          29,184,285        130,268,189

         Total liabilities and fund balances             $ 47,388,163   $ 22,952,125       $ 66,329,827       $ 63,020,392       $ 199,690,507




42                        city oF Winston-sAlem
                                                                          The accompanying notes are an integral part of the financial statements.
City of Winston-Salem, North Carolina
reconciliation of the governmental Funds
Balance Sheet to the Statement of Net Assets
June 30, 2009                                                                                                                       exhibit 3.1
 Total fund balances for governmental funds (Exhibit 3)                                                                             $130,268,189
 Total net assets reported for governmental activities in the statement of net assets is different because:

  Capital assets (net of accumulated depreciation) used in governmental activities are not financial resources and therefore
  are not reported in the funds.
   Gross capital assets at historical cost                                                                                           486,432,970
   Accumulated depreciation                                                                                                         (172,505,883)
  Other assets not available to pay for current period expenditures, and therefore are reported as deferred revenue in the funds.     49,377,633

  Internal service funds are used by management to charge the costs of workers compensation, health benefits, dental and flex
  benefits and employee benefits. The assets and liabilities of the internal service funds are included in governmental
  activities in the statement of net assets.                                                                                          14,430,781

 Long-term liabilities are not due and payable in the current period and accordingly are not reported as fund liabilities:
   Accrued payroll                                                                                                                        (520,000)
   Accrued vacation                                                                                                                     (8,811,989)
   Accrued interest                                                                                                                     (1,555,534)
   Arbitrage rebate liability                                                                                                               (45,039)
   Contracts payable                                                                                                                (129,711,696)
   Unamortized financing costs                                                                                                           1,513,559
   Bonds payable                                                                                                                      (92,396,456)


 Net assets of governmental activities (Exhibit 1)                                                                                  $ 276,476,535




The accompanying notes are an integral part of the financial statements.
                                                                                              2009 AnnuAl FinAnciAl RepoRt
                                                                                                                                                       43
     City of Winston-Salem, North Carolina
     Statement of revenues, expenditures, and Changes in Fund Balance
     governmental Funds
     For the Fiscal year ended June 30, 2009                                                                                          exhibit 4
                                                                                                                   Other              Total
                                                                                           Capital Projects     Governmental      Governmental
                                                          General Fund    Debt Service          Fund               Funds             Funds
     Revenues
      Taxes                                               $102,621,211     $ 9,704,258      $                   $ 14,479,111      $ 126,804,580
      Licenses and permits                                   7,327,632                                             1,487,871          8,815,503
      Intergovernmental                                     17,889,757         323,509              709,648       19,564,614         38,487,528
      Investment income (loss)                                                (603,570)             123,941           29,300           (450,329)
      Charges for services                                  24,592,190                                                               24,592,190
      Capital lease charges                                                    600,000            2,831,044                           3,431,044
      Other                                                  2,670,232                            2,215,069        2,252,765          7,138,066
         Total revenues                                    155,101,022      10,024,197            5,879,702       37,813,661        208,818,582

     Expenditures
      Current
        General government                                  27,689,907                                                 1,064         27,690,971
        Public protection                                   77,383,543                                             1,800,877         79,184,420
        Environmental health                                17,066,730                                                               17,066,730
        Transportation                                      11,924,530                                             1,301,372         13,225,902
        Culture and recreation                              12,772,631                                                65,291         12,837,922
        Community and economic development                  11,999,230                                            13,516,732         25,515,962
        Human resources                                      1,153,345                                                                1,153,345
        Other                                                  722,426                                                                  722,426
      Capital outlay                                                                             35,007,563                          35,007,563
      Debt service
        Capital lease charges                                7,740,218       1,834,024                                 88,752          9,662,994
        Principal retirement
          Bond                                                               6,872,920                                                 6,872,920
          Other                                                              1,000,000            1,958,480          332,000           3,290,480
      Interest and fiscal charges
          Bond                                                               4,739,614                                                 4,739,614
          Other                                                              3,329,863            3,598,188          262,367           7,190,418
          Total expenditures                               168,452,560      17,776,421           40,564,231       17,368,455        244,161,667
           Excess of revenues over (under) expenditures    (13,351,538)     (7,752,224)         (34,684,529)      20,445,206         (35,343,085)

     Other Financing Sources (Uses)
       Proceeds of refunding bonds                                           8,435,000                                                  8,435,000
       Premium on refunding bonds                                              642,702                                                    642,702
       Payment to refunded bond escrow agent                                (9,072,900)                                                (9,072,900)
       Issuance of certificates of participation                                                   9,911,299                            9,911,299
       Transfers in                                         16,000,972       7,153,788           14,219,695        3,641,413          41,015,868
       Transfers out                                        (4,847,441)     (2,108,977)           (6,854,727)    (24,069,347)        (37,880,492)
         Total other financing sources (uses) net           11,153,531       5,049,613           17,276,267      (20,427,934)         13,051,477
          Net change in fund balances                       (2,198,007)     (2,702,611)         (17,408,262)          17,272         (22,291,608)

     Fund balance July 1                                    39,394,242       9,768,793           74,229,749       29,167,013        152,559,797

     Fund balance June 30                                  $ 37,196,235     $ 7,066,182         $ 56,821,487     $ 29,184,285      $ 130,268,189


44                      city oF Winston-sAlem
                                                                            The accompanying notes are an integral part of the financial statements.
City of Winston-Salem, North Carolina
reconciliation of the Statement of revenues, expenditures, and Changes
in Fund Balances of governmental Funds to the Statement of Activities
For the Fiscal year ended June 30, 2009                                                                                                     exhibit 4.1
 Amounts reported for governmental activities in the statement of activities (Exhibit 2) are different because:
  Net change in fund balances - total governmental funds (Exhibit 4)                                                                        $ (22,291,608)
  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 capital outlays
  exceeded depreciation expense in the current period.
    Capital outlay expenditures which were capitalized                                                                                        31,364,520
    Depreciation expense for governmental assets                                                                                              (14,752,672)

  The net effect of various miscellaneous transactions involving capital assets (i.e., sales, trade-ins, and donations) is to                  (2,934,926)
  decrease net assets.
  Revenues in the statement of activities that do not provide current financial resources are not reported as revenue in the funds.              815,593

  Internal service funds are used by management to charge the costs of workers compensation, health benefits, dental and flex                     (75,829)
  benefits and employee benefits. The net revenue (expenses) of certain activities of internal service funds is reported with
  governmental activities.

  The proceeds of long-term debt are reported as financing sources in governmental funds and thus contribute to the change in
  fund balance. In the statement of net assets, however, issuing debt increases long-term liabilities and does not affect the
  statement of activities. Similarly, repayment of principal is an expenditure in the governmental funds but reduces the liability in the
  statement of net assets. Also governmental funds report the effect of issuance costs, premiums and discounts, and similar items
  as expenses when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities.

 Debt issued:
   Premium on refunding bonds                                                                                                                    (642,702)
   Debt issuance costs on general obligation bonds                                                                                                99,948
   Proceeds of refunding bonds                                                                                                                 (8,435,000)
   Certificates of participation                                                                                                               (9,911,299)
   Debt issuance cost on installment purchase contract                                                                                              4,123
   Decrease in contracts payable                                                                                                               6,952,801
 Repayments:
   Bonds                                                                                                                                       6,872,920
   Certificates of participation                                                                                                               1,958,480
   Installment purchase contract                                                                                                               1,000,000
   Payment to refunded bond escrow agent                                                                                                       9,072,900
 Under the modified accrual basis of accounting used in the governmental funds, expenditures are not recognized for transactions
 that are not normally paid with expendable available financial resources. In the statement of activities, liabilities are reported
 regardless of when financial resources are available. In addition, interest on long-term debt is not recognized under the modified
 accrual basis of accounting until due, rather than as it accrues.

 Accrued payroll                                                                                                                                 (520,000)
 Accrued vacation                                                                                                                                (845,971)
 Amortization of financing costs                                                                                                                  (70,258)
 Accrued interest on bonds                                                                                                                       102,444
 Changes in net assets of governmental activities (Exhibit 2)                                                                                $ (2,236,536)




The accompanying notes are an integral part of the financial statements.
                                                                                              2009 AnnuAl FinAnciAl RepoRt
                                                                                                                                                             45
     City of Winston-Salem, North Carolina
     Statement of revenues, expenditures, and
     Changes in Fund Balance – Budget and Actual
     general Fund                                                                                                          exhibit 5
     For the Fiscal year ended June 30, 2009                                                                           (page 1 of 5)

                                                                                                                   Variance with Final
                                                                                                                   Budget Favorable
                                               Original Budget        Final Budget                Actual             (Unfavorable)
     Revenues
      Taxes
       Property taxes
         Current levy                          $ 83,252,930          $ 83,252,930            $ 83,365,532               $ 112,602
         Prior years levies                         900,000               900,000               1,160,904                 260,904
         Penalty and interest on taxes              250,000               250,000                 233,514                  (16,486)
          Total property taxes                   84,402,930            84,402,930              84,759,950                 357,020
       Other local taxes
         Local option sales taxes               20,688,220             20,688,220              17,697,875               (2,990,345)
         Gross receipts taxes                      191,350                191,350                 163,386                   (27,964)
          Total other local taxes               20,879,570             20,879,570              17,861,261               (3,018,309)
            Total taxes                        105,282,500            105,282,500             102,621,211               (2,661,289)

      Licenses and permits
       Building permits                           1,091,160              1,091,160                 829,232                (261,928)
       Electrical permits                           812,570                812,570                 643,714                (168,856)
       Plumbing permits                             534,000                534,000                 313,485                (220,515)
       Heating permits                              594,520                594,520                 449,299                (145,221)
       Erosion control permits                      313,000                313,000                 113,159                (199,841)
       Zoning board ordinances                       28,000                 28,000                  20,820                    (7,180)
       Other construction related permits            42,500                 42,500                  31,220                  (11,280)
       Site inspection permits                       28,500                 28,500                  18,290                  (10,210)
       Zoning permits                               280,000                280,000                 208,944                  (71,056)
       Refrigeration permits                          8,000                  8,000                   6,664                    (1,336)
       Privilege licenses and penalties           2,449,000              2,449,000               2,470,930                   21,930
       Motor vehicle licenses                     1,595,450              1,595,450               1,643,801                   48,351
       Cable franchise                              345,930                345,930                 380,314                   34,384
       Other licenses and permits                   261,800                261,800                 197,760                  (64,040)
            Total licenses and permits            8,384,430              8,384,430               7,327,632              (1,056,798)

      Intergovernmental revenues
        Beer and wine excise tax - state          1,038,410             1,038,410               1,009,971                  (28,439)
        Franchise tax - state                    13,272,600            13,272,600              14,019,735                 747,135
        Payments in lieu of taxes                   159,700               159,700                 170,550                   10,850
        Emergency management                         32,000                32,000                  83,951                   51,951
        ABC store allocations                       663,070               663,070                 647,017                  (16,053)
        Hold harmless                             1,822,680             1,822,680               1,958,533                 135,853
            Total intergovernmental revenues     16,988,460            16,988,460              17,889,757                 901,297




46                      city oF Winston-sAlem
                                                                 The accompanying notes are an integral part of the financial statements.
City of Winston-Salem, North Carolina
Statement of revenues, expenditures, and
Changes in Fund Balance – Budget and Actual
general Fund                                                                                                    exhibit 5
For the Fiscal year ended June 30, 2009                                                                      (page 2 of 5)
                                                                                                         Variance with Final
                                                                                                         Budget Favorable
                                                           Original Budget   Final Budget     Actual       (Unfavorable)
Revenues (continued)
 Charges for sales and services
  Governmental services and sales
   Public safety services                                     $ 224,000       $ 224,000      $ 164,807        $ (59,193)
   Transportation                                               185,000         185,000        201,390           16,390
   Public works services                                      2,863,870       2,863,870      2,787,993          (75,877)
   Governmental services                                      1,274,630       1,274,630      1,033,037        (241,593)
   Miscellaneous sales and services                             135,750         135,750        175,449           39,699
    Total governmental services and sales                     4,683,250       4,683,250      4,362,676        (320,574)
  Charges to State of North Carolina
   Highway maintenance/special projects                          80,000          80,000       120,084            40,084
   Traffic control devices                                      330,000         330,000       265,245           (64,755)
   Computerized traffic system                                  103,000         103,000        80,775           (22,225)
    Total charges to state                                      513,000         513,000       466,104           (46,896)
  Charges to Other Governments
   Forsyth County
    Planning board support                                    1,506,080       1,508,120      1,440,263           (67,857)
    Emergency management                                        329,560         329,560        311,149           (18,411)
    Inspections                                                 259,140         259,140        544,340          285,200
    Purchasing                                                  114,010         114,010        106,907             (7,103)
    Bethabara Park                                              211,030         211,030        198,703           (12,327)
    Erosion control                                             (13,850)        (13,850)        54,359            68,209
    Winston-Salem/Forsyth County School Board (D.A.R.E.)        125,000         125,000        125,000                  -
    Other                                                        38,420          38,420         35,837             (2,583)
    Total charges to county                                   2,569,390       2,571,430      2,816,558          245,128
  Interfund charges for services
    Engineering                                               1,700,000       1,700,000      1,812,332          112,332
    Financial management services                             2,775,360       2,775,360      2,798,701            23,341
    Streets                                                     300,000         300,000      1,017,563          717,563
    Planning                                                     35,000          35,000         19,389           (15,611)
    Property management                                         910,170         910,170        597,948         (312,222)
    Sanitation                                                   31,920          31,920         33,540              1,620
    Police                                                       37,500          37,500         37,500                  -
    Real estate                                                  85,000          85,000         71,570           (13,430)
    Street cuts                                                 395,000         395,000        313,786           (81,214)
    Indirect cost allocation                                  3,427,840       3,427,840      3,419,847             (7,993)
    Traffic engineering                                         725,000         725,000        375,110         (349,890)
    Recreation                                                   75,650          75,650        125,159            49,509
    Vegetation management services                              237,000         237,000        217,106           (19,894)
    Human relations                                              12,000          12,000                          (12,000)
    Construction work program                                    20,000          20,000                          (20,000)
    Fire                                                        493,730         493,730        490,339             (3,391)
    Telecommunications                                                                          39,180            39,180
    Other                                                                                          116                116
    Warehouse                                                  167,830          167,830        128,526           (39,304)
    Fleet services                                           2,297,330        2,297,330      3,852,584        1,555,254
    Information services                                     1,690,570        1,690,570      1,596,556           (94,014)
      Total interfund charges for services                  15,416,900       15,416,900     16,946,852        1,529,952
       Total charges for sales and services                 23,182,540       23,184,580     24,592,190        1,407,610




                                                                                 2009 AnnuAl FinAnciAl RepoRt
                                                                                                                               47
     City of Winston-Salem, North Carolina
     Statement of revenues, expenditures, and
     Changes in Fund Balance – Budget and Actual
     general Fund                                                                                                           exhibit 5
     For the Fiscal year ended June 30, 2009                                                                              (page 3 of 5)
                                                                                                                       Variance with Final
                                                                                                                       Budget Favorable
                                                  Original Budget           Final Budget              Actual             (Unfavorable)
     Revenues (continued)
      Other revenues
       Rentals                                       $ 167,000                $ 167,000              $ 167,052                 $ 52
       Sales of property                               358,000                  358,000                409,091                  51,091
       Parking meters                                   60,000                   60,000                 40,733                (19,267)
       Parking tickets                                 325,000                  325,000                411,015                  86,015
       Fines and forfeitures                           581,400                  581,400                680,794                  99,394
       Miscellaneous revenue                          786,180                   789,950                961,547                171,597

          Total other revenues                       2,277,580                2,281,350              2,670,232                388,882
           Total revenues                         156,115,510              156,121,320            155,101,022              (1,020,298)

     Expenditures (by function)
      General government
       Legislative                                     796,510                  796,510                771,425                 25,085
       Executive                                     2,189,730                2,413,000              2,593,952               (180,952)
       Staff services                                6,385,430                6,284,781              5,978,182                306,599
       Financial management                          8,467,780                8,824,303              7,691,296              1,133,007
       Intergovernmental services                    8,082,600                9,384,165              9,914,393               (530,228)
       Employee safety and health                      782,040                  782,040                740,659                 41,381
          Total general government                 26,704,090               28,484,799             27,689,907                 794,892

      Public protection
       Police                                      54,887,710               54,735,662             52,644,445               2,091,217
       Fire                                        24,675,530               24,698,366             24,237,757                 460,609
       Emergency management                            524,430                  524,430                501,341                 23,089
           Total public protection                 80,087,670               79,958,458             77,383,543               2,574,915

      Environmental health
       Sanitation administration                       646,450                  646,450                630,203                 16,247
       Organic and solid waste collection            9,053,970                9,059,898              8,811,238                248,660
       Solid waste disposal                          2,899,980                3,106,777              2,847,297                259,480
       Yard waste collections                          912,240                  912,240                907,318                  4,922
       Curbside collection                           4,217,480                4,217,480              3,870,674                346,806

           Total environmental health              17,730,120               17,942,845             17,066,730                 876,115




48                        city oF Winston-sAlem
                                                                    The accompanying notes are an integral part of the financial statements.
City of Winston-Salem, North Carolina
Statement of revenues, expenditures, and
Changes in Fund Balance – Budget and Actual
general Fund                                                                                                exhibit 5
For the Fiscal year ended June 30, 2009                                                                   (page 4 of 5)
                                                                                                      Variance with Final
                                                                                                      Budget Favorable
                                               Original Budget     Final Budget       Actual            (Unfavorable)
Expenditures (by function continued)
 Transportation
  Technical support                                 $ 1,583,310        $ 1,583,310     $ 1,492,881               $ 90,429
   Signal system operations                             174,670            179,370         174,046                   5,324
  Traffic system maintenance                          5,207,150          5,370,225       5,375,376                  (5,151)
   Street parking                                       189,000            189,100         176,035                 13,065
   Streets and sidewalks
                                                      5,476,200          5,709,052       4,706,192             1,002,860
    Total transportation
                                                     12,630,330        13,031,057      11,924,530              1,106,527

 Culture and recreation
  Recreation administration                             762,780            762,780         755,329                 7,451
  Participant recreation                              8,646,920          8,672,782       8,037,014               635,768
  Vegetation management
                                                      4,787,840          4,498,010       3,980,288               517,722
    Total culture and recreation
                                                     14,197,540        13,933,572      12,772,631              1,160,941

 Community and economic development
  Zoning and construction control                     4,474,110          4,474,110       4,261,919               212,191
  Real estate management                                541,210            541,210         513,418                27,792
  Planning board                                      2,868,240          2,840,740       2,626,300               214,440
  Housing services                                    4,000,930          4,006,430       3,403,748               602,682
  Housing and neighborhood development                  675,110            675,110         660,744                14,366
  Economic development
                                                        606,660            618,181         533,101                 85,080
    Total community and economic development
                                                     13,166,260        13,155,781       11,999,230             1,156,551

 Human resources
  Community agencies                                    779,970            948,100         808,512               139,588
  Human relations
                                                        344,790            344,790         344,833                     (43)
    Total human resources
                                                      1,124,760          1,292,890       1,153,345               139,545

 Other
  Contingency budget                                     50,430             50,430                                  50,430
  Property tax collections                              658,070            658,070         722,426                 (64,356)
  Capital lease charges                               9,029,370          9,017,340       7,740,218              1,277,122
  Appropriated expenditure reductions                (2,121,160)        (2,121,160)                            (2,121,160)
    Total other
                                                      7,616,710          7,604,680       8,462,644               (857,964)

    Total expenditures                              173,257,480       175,404,082     168,452,560              6,951,522

      Excess of expenditures over revenues          (17,141,970)       (19,282,762)    (13,351,538)            5,931,224




                                                                         2009 AnnuAl FinAnciAl RepoRt
                                                                                                                              49
     City of Winston-Salem, North Carolina
     Statement of revenues, expenditures, and
     Changes in Fund Balance – Budget and Actual
     general Fund                                                                                                                        exhibit 5
     For the Fiscal year ended June 30, 2009                                                                                         (page 5 of 5)
                                                                                                                                  Variance with Final
                                                                                                                                  Budget Favorable
                                                             Original Budget           Final Budget              Actual             (Unfavorable)
     Other Financing Sources (Uses)
      Transfers in
        Community development fund                            $ 1,211,030              $ 1,211,030              $ 845,368             $ (365,662)
        Gasoline tax fund                                       5,535,840                5,535,840              4,197,590             (1,338,250)
        Sales tax fund                                          7,336,690                7,336,690              6,701,227               (635,463)
        Emergency phone system fund                                51,150                   51,150                 11,540                 (39,610)
        Solid waste disposal fund                               2,900,010                2,900,010              2,847,285                 (52,725)
       Water and sewer utility fund                                70,960                   70,960                  5,660                 (65,300)
        Stormwater fund                                         1,489,090                1,489,090              1,392,302                 (96,788)

          Total transfers in                                   18,594,770               18,594,770             16,000,972             (2,593,798)

      Transfers out
        Grants fund                                              (459,130)                (497,420)              (337,700)               159,720
        Economic and housing development fund                  (1,521,800)              (1,521,800)            (1,515,030)                 6,770
        Debt service fund                                        (623,860)                (623,860)              (623,860)
        Cemeteries fund                                            (16,230)                 (16,230)               (16,210)                   20
        Parking fund                                           (1,056,530)              (1,056,530)              (915,941)               140,589
        Public facilities management fund                      (1,162,870)              (1,438,700)            (1,438,700)

          Total transfers out                                  (4,840,420)              (5,154,540)            (4,847,441)               307,099

           Total other financing sources, net                  13,754,350               13,440,230             11,153,531             (2,286,699)

            Excess of expenditures and other financing
            uses over revenues and other financing sources     (3,387,620)              (5,842,532)            (2,198,007)             3,644,525
     Fund balance July 1                                       39,394,242               39,394,242             39,394,242

     Fund balance June 30                                    $ 36,006,622             $ 33,551,710           $ 37,196,235            $ 3,644,525




50                       city oF Winston-sAlem
                                                                               The accompanying notes are an integral part of the financial statements.
City of Winston-Salem, North Carolina
Statement of Net Assets
proprietary Funds
June 30, 2009                                                                                                                             exhibit 6
                                                                                        Enterprise Funds
                                                            Water and            Solid Waste         Non-Major                              Internal
                                                           Sewer Utility          Disposal             Funds                Total        Service Funds
 Assets
 Current Assets
  Cash and cash equivalents                                 $ 38,561,442         $ 10,761,953              $ 8,185,217   $ 57,508,612     $ 43,748,046
  Receivables, net of allowance for uncollectibles
   Accounts                                                     8,261,722              381,714              2,192,304      10,835,740           29,167
   Assessments                                                  1,565,020                                                   1,565,020
    Total receivables                                           9,826,742              381,714              2,192,304      12,400,760           29,167
  Due from other governments                                                                                  691,263         691,263
  Inventories                                                   2,548,658                                     168,500       2,717,158
  Prepaid expenses                                                                                             41,774          41,774          191,996
    Total current assets                                      50,936,842           11,143,667              11,279,058      73,359,567       43,969,209
 Noncurrent Assets
  Restricted assets
   Cash and cash equivalents                                 127,931,374           11,879,117                             139,810,491
  Capital assets
   Land                                                       14,155,018           11,033,472               8,900,890      34,089,380
   Construction in progress                                   74,761,423           10,290,059               3,769,058      88,820,540
   Other capital assets, net of                              519,664,396           22,250,013              76,337,231     618,251,640       20,869,618
       accumulated depreciation
  Unamortized financing costs                                   3,356,390              178,177                 140,368       3,674,935
 Accounts receivables                                                                                          500,000         500,000
     Total noncurrent assets                                 739,868,601           55,630,838               89,647,547    885,146,986       20,869,618
     Total assets                                             790,805,443          66,774,505              100,926,605     958,506,553      64,838,827
 Liabilities
 Current Liabilities
   Accounts payable                                             7,400,809              616,465              1,454,410       9,471,684        5,082,499
   Accrued payroll                                                575,459               31,669                488,133       1,095,261          448,676
   Accrued interest payable                                       690,696              111,535                                802,231
   Deferred revenue                                               164,459                                      85,200         249,659          396,725
   Current maturities
    Advances from other funds                                                                                 118,938         118,938
    Claims payable                                                                                                                           4,313,422
    Contracts payable                                            615,176               531,334              2,319,895       3,466,405          272,207
    Bonds payable                                             11,885,000             1,295,000                             13,180,000
     Total current liabilities                                21,331,599             2,586,003              4,466,576      28,384,178       10,513,529
 Noncurrent Liabilities
   Contracts payable from restricted assets                   11,131,757                                                   11,131,757
   Accrued vacation                                              677,958                66,816                238,980         983,754            5,044
   Advances from other funds                                                                                  546,384         546,384
   Landfill closure and postclosure costs                                          11,879,117                              11,879,117
   Claims payable                                                                                                                            2,324,459
   Contracts payable                                             630,486              642,311              16,881,584      18,154,381       15,870,042
   Bonds payable                                             417,436,575           11,159,549                             428,596,124
     Total noncurrent liabilities                            429,876,776           23,747,793              17,666,948     471,291,517       18,199,545
      Total liabilities                                      451,208,375           26,333,796              22,133,524     499,675,695       28,713,074
 Net Assets
  Investment in capital assets, net of related debt          260,547,620           29,945,350              69,140,378     359,633,348        4,727,369
  Unrestricted                                                79,049,448           10,495,359               9,652,703      99,197,510       31,398,384
   Total net assets                                         $ 339,597,068         $ 40,440,709         $ 78,793,081       458,830,858      $ 36,125,753
 Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds                    21,694,972
 Net assets of business-type activities                                                                                  $ 480,525,830



The accompanying notes are an integral part of the financial statements.
                                                                                               2009 AnnuAl FinAnciAl RepoRt
                                                                                                                                                          51
     City of Winston-Salem, North Carolina
     Statement of revenues, expenses, and
     Changes in Fund Net Assets
     proprietary Funds
     For the Fiscal year ended June 30, 2009

                                                                                                               Enterprise Funds
                                                                                        Water and Sewer Utility                   Solid Waste Disposal
     Operating Revenues
      Sales                                                                                  $ 57,116,347                     $
      Charges for services                                                                      2,177,605                              10,612,828
      Rentals
      Admissions
      Rebates
      Concessions
      Other                                                                                      2,333,124
      Total operating revenues                                                                  61,627,076                             10,612,828

     Operating Expenses
     Personal services                                                                          16,466,384                              1,795,834
     Maintenance and operations                                                                 20,634,430                              5,724,683
      Total operating expenses before depreciation                                              37,100,814                              7,520,517
     Depreciation                                                                               19,752,602                              1,382,451
      Total operating expenses                                                                  56,853,416                              8,902,968
       Operating income (loss)                                                                   4,773,660                              1,709,860
     Nonoperating Revenues (Expenses)
     Intergovernmental revenue                                                                                                            536,726
     Investment income (loss)                                                                    (5,989,474)                           (1,492,378)
     Gain (loss) on disposal of assets                                                           (1,856,915)                                  600
     Damage settlements                                                                              87,050
     Interest and fiscal expense                                                               (12,368,819)                              (623,965)
     Amortization of financing costs                                                               (625,981)                               (36,989)
       Total nonoperating revenues (expenses), net                                             (20,754,139)                            (1,616,006)
       Income (loss) before capital contributions
        and transfers                                                                          (15,980,479)                                93,854

     Capital Contributions                                                                       5,751,888
     Transfers In
     Transfers Out                                                                                  (5,660)                            (2,847,285)
       Total transfers                                                                              (5,660)                            (2,847,285)
        Change in net assets                                                                  (10,234,251)                             (2,753,431)
     Total net assets - beginning, as previously stated                                       349,831,319                              43,194,140
     Prior period adjustment
     Total net assets - beginning, as restated                                                349,831,319                              43,194,140

     Total net assets - ending                                                              $ 339,597,068                            $ 40,440,709
     Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds
     Change in net assets of business-type activities




52                       city oF Winston-sAlem
                                                                                       The accompanying notes are an integral part of the financial statements.
                                                                           exhibit 7


    Non-Major Funds        Total        Internal Service Funds

$                      $ 57,116,347     $
       13,550,804        26,341,237           37,945,395
        3,555,662         3,555,662            2,331,086
        1,976,749         1,976,749
                                                  (83,100)
          586,213           586,213
        2,423,476         4,756,600               93,906
       22,092,904        94,332,808           40,287,287


       13,356,667        31,618,885              459,801
       12,215,956        38,575,069           37,292,067
       25,572,623        70,193,954           37,751,868
        5,009,777        26,144,830              613,125
       30,582,400        96,338,784           38,364,993
       (8,489,496)       (2,005,976)           1,922,294

         5,352,965         5,889,691
           132,577        (7,349,275)          (5,792,476)
         4,006,192         2,149,877
            57,273           144,323
        (1,040,381)     (14,033,165)             (930,750)
          (169,132)         (832,102)               (2,152)
         8,339,494      (14,030,651)           (6,725,378)

         (150,002)      (16,036,627)           (4,803,084)

        1,049,642          6,801,530
        7,110,507          7,110,507
       (7,392,938)      (10,245,883)
         (282,431)        (3,135,376)
          617,209       (12,370,473)           (4,803,084)
       73,212,480                             26,422,227
        4,963,392                             14,506,610
       78,175,872                             40,928,837

      $ 78,793,081                          $ 36,125,753
                          (4,727,255)
                      $ (17,097,728)




                                                   2009 AnnuAl FinAnciAl RepoRt
                                                                                       53
     City of Winston-Salem, North Carolina
     Statement of Cash Flows
     proprietary Funds                                                                                                                        exhibit 8
     For the Fiscal year ended June 30, 2009                                                                                              (page 1 of 2)

                                                                                       Enterprise Funds
                                                                Water and       Solid Waste         Non-Major                             Internal Service
                                                               Sewer Utility     Disposal             Funds                Total               Funds
     Cash Flows from Operating Activities
      Cash received from sales                                 $ 61,414,748     $ 10,661,992       $ 21,418,239        $ 93,494,979        $ 40,353,804
      Cash payments to suppliers
         for goods and services                                 (19,179,011)      (4,193,024)       (12,422,493)        (35,794,528)        (38,161,750)
      Cash payments to employees for services                   (16,096,618)      (1,777,671)       (13,232,919)        (31,107,208)           (457,335)
      Cash rebates                                                                                                                               (83,100)
            Net cash provided (used) by operating activities     26,139,119       4,691,297          (4,237,173)         26,593,243           1,651,619
     Cash Flows from Noncapital
        Financing Activities
      Intergovernmental revenue                                                     536,726           5,242,680           5,779,406
      Repayments of advanced funds                                                                     (112,615)           (112,615)
      Transfers in                                                                                    4,445,373           4,445,373
      Transfers out                                                   (5,660)     (2,847,285)        (5,053,602)         (7,906,547)
             Net cash provided (used) by
               noncapital financing activities                        (5,660)     (2,310,559)         4,521,836           2,205,617
     Cash Flows from Capital
        Financing Activities
      Proceeds from issuance of bonds                           111,801,589                                             111,801,589
      Intergovernmental revenue                                     192,000                             743,491              935,491
      Capital contributions                                         226,279                             340,007              566,286
      Transfers in                                                                                      325,798              325,798
      Acquisition of property and equipment                     (36,038,395)        (498,822)        (1,716,651)        (38,253,868)
      Retirement of bonds                                       (10,735,000)      (1,245,000)                           (11,980,000)
      Retirement of contracts payable                              (658,050)        (540,162)        (2,182,792)          (3,381,004)         (2,644,580)
      Interest and fiscal expense paid on bonds                 (16,470,285)        (570,197)                           (17,040,482)
      Interest and fiscal expense paid
        on contracts payable                                       (100,927)         (91,823)        (1,040,381)         (1,233,131)            (933,563)
      Debt issuance costs                                          (933,985)                                               (933,985)
      Proceeds from sale of assets                                    3,050              600          5,500,000           5,503,650
      Damage settlements                                             87,050                              57,273             144,323
             Net cash provided (used) by
                capital financing activities                     47,373,326       (2,945,404)         2,026,745          46,454,667           (3,578,143)
     Cash Flows from Investing Activities
      Investment income (loss)                                   (5,984,218)      (1,492,378)           132,577          (7,344,019)          (5,792,476)
              Net increase (decrease) in cash                    67,522,567       (2,057,044)         2,443,985          67,909,508           (7,719,000)
     Cash and cash equivalents July 1,
       as previously stated                                      98,970,249      24,698,114           5,741,232         129,409,595          25,063,935
     Prior period adjustment                                                                                                                 26,403,111
     Cash and cash equivalents July 1, as restated                98,970,249     24,698,114           5,741,232        129,409,595           51,467,046
     Cash and cash equivalents June 30                         $ 166,492,816    $ 22,641,070         $ 8,185,217      $ 197,319,103         $ 43,748,046




54                        city oF Winston-sAlem
                                                                                    The accompanying notes are an integral part of the financial statements.
City of Winston-Salem, North Carolina
Statement of Cash Flows
proprietary Funds                                                                                                                        exhibit 8
For the Fiscal year ended June 30, 2009                                                                                               (page 2 of 2)

                                                                                    Enterprise Funds
                                                            Water and        Solid Waste         Non-Major                            Internal Service
                                                           Sewer Utility      Disposal             Funds                Total              Funds
 Reconciliation of Cash and Cash Equivalents
  Cash and investments - current                           $ 38,561,442      $ 10,761,953        $ 8,185,217     $ 57,508,612           $ 43,748,046
  Cash and investments - restricted                         127,931,374        11,879,117                         139,810,491
 Cash and cash equivalents June 30                         $166,492,816      $ 22,641,070        $ 8,185,217     $197,319,103           $ 43,748,046

 Reconciliation of Operating Income (Loss)
  to Net Cash Provided (Used)
  by Operating Activities
  Operating income (loss)                                    $ 4,773,660      $ 1,709,860       $ (8,489,496)     $ (2,005,976)          $ 1,922,294
  Adjustments to reconcile operating income (loss)
    to net cash provided (used) by operating activities
    Depreciation expense                                      19,752,602        1,382,451          5,009,777        26,144,830               613,125
    Change in assets and liabilities
      (Increase) decrease in receivables                        (121,090)          49,164           (660,265)            (732,191)            (27,348)
      (Increase) decrease in inventories                          (39,643)                             81,599               41,956
      (Increase) decrease in prepaid expenses                                                         (20,795)             (20,795)            63,948
      Increase (decrease) in accounts payable                  1,495,062          298,445           (271,196)           1,522,311             (33,276)
      Decrease in accrued payroll                                356,334           15,795            117,085              489,214              71,133
      Increase (decrease) in deferred revenue                    (91,238)                             (14,400)           (105,638)             10,765
      Increase in accrued vacation                                13,432            2,368               6,663               22,463              1,030
      Increase in landfill closure and postclosure costs                        1,233,214                               1,233,214
      Decrease in claims payable                                                                                                             (970,052)
      Increase in contracts payable                                                                    3,855             3,855
        Total adjustments                                     21,365,459        2,981,437          4,252,323        28,599,219               (270,675)
         Net cash provided (used)
         by operating activities                            $ 26,139,119       $ 4,691,297      $ (4,237,173)      $ 26,593,243           $ 1,651,619

 Noncash Investing, Capital, and Financing Activities
 The City entered into leases for new property and equipment and incurred capital lease obligations of $1,762,710 and
  $1,852,519 during the years ended June 30, 2009, and 2008, respectively.
  The City received contributed land amounting to $5,525,609 and $14,573,575 during the years ended
  June 30, 2009, and 2008, respectively, from various developers.
  Capitalized interest included in asset acquisitions of $731,629.




The accompanying notes are an integral part of the financial statements.
                                                                                          2009 AnnuAl FinAnciAl RepoRt
                                                                                                                                                         55
     City of Winston-Salem, North Carolina
     Statement of Fiduciary Net Assets
     Fiduciary Funds
     June 30, 2009                                                                                                      exhibit 9
                                                                                                                       Benefits
                                                                                                                      Trust Fund
     Assets
      Cash and cash equivalents                                                                                       $ 1,954,067
      Investments, at fair value
        Common stock                                                                                                  77,178,966
        United States government treasuries                                                                           11,153,648
        United States government agencies                                                                             14,845,970
        Asset backed securities                                                                                          170,173
        Corporate Bonds                                                                                                5,190,285
      Receivables, net of allowance for uncollectibles                                                                    18,637
      Unamortized financing costs                                                                                         57,758

       Total assets                                                                                                   110,569,504

          Liabilities
     Liabilities
      Accounts payable                                                                                                    17,793
      Accrued payroll                                                                                                        527
      Accrued vacation                                                                                                     2,030
      Deferred revenue                                                                                                   192,863
      Contracts payable                                                                                               25,000,000

       Total liabilities                                                                                              25,213,213

     Net Assets
      Held in trust for pension benefits and other purposes                                                          $ 85,356,291




56                         city oF Winston-sAlem
                                                              The accompanying notes are an integral part of the financial statements.
City of Winston-Salem, North Carolina
Statement of Changes in Fiduciary Net Assets
Fiduciary Funds
For the year ended June 30, 2009                                                                  exhibit 10
                                                                                                   Benefits
                                                                                                  Trust Fund
 Additions
 Contributions
 Employer                                                                                        $11,996,843
 Plan members                                                                                      3,105,273
 Other                                                                                                    46
  Total contributions                                                                             15,102,162

 Investment loss
  Net appreciation in fair value                                                                  (30,805,356)
  Interest and dividends                                                                            3,151,056
   Total investment loss                                                                          (27,654,300)
  Less investment expense                                                                             734,198
   Net investment loss                                                                            (28,388,498)
    Total additions                                                                               (13,286,336)

 Deductions
 Benefits                                                                                         14,070,763
 Refund of contributions                                                                              98,727
 Administrative expense                                                                              170,480
 Interest and fiscal expense                                                                         722,203
 Amortization of financing costs                                                                      16,905
   Total deductions                                                                               15,079,078

   Net decrease                                                                                   (28,365,414)

 Net assets - beginning, as previously stated                                                    128,228,315
 Prior period adjustment                                                                          (14,506,610)
 Net assets - beginning, as restated                                                             113,721,705
 Net assets - ending                                                                               $85,356,291




The accompanying notes are an integral part of the financial statements.
                                                                           2009 AnnuAl FinAnciAl RepoRt
                                                                                                                 57
     Notes to the Financial Statements

     JuNe 30, 2009
     1. Summary of Significant Accounting policies
       Accounting policies conform to generally accepted accounting principles applicable to governmental units
       The following paragraphs summarize significant policies:

       A. the reporting entity
           The city of Winston-salem, north carolina, a municipal corporation, is governed by an elected mayor
           and eight member city council This report presents the financial position and results of operations of
           the city and two legally separate component units, that have significant financial relationships because
           they provide services only to the city other criteria used to determine component units under generally
           accepted accounting principles include appointment of a voting majority of the governing board and/or
           imposition of will or financial benefit/burden, fiscal dependency, or other significant operational and
           financial relationships The financial statements of the nonprofit corporations are included in this report
           as blended component units
           Risk Acceptance Management Corporation administers auto liability, general liability, and
           certain tort claims made against the city The financial statements of the corporation are included as an
           internal service fund in the city’s financial statements
           North Carolina Municipal Leasing Corporation assists the city by financing certain real and
           personal property under contractual lease agreements The assets and related long-term lease
           obligations are reported in the related governmental and business-type funds
           Audited financial statements for each of the component units are available through Financial
           management services, city of Winston-salem, p o Box 2511, Winston-salem, north carolina 27102

       B. government-wide and Fund Financial Statements
           Government-wide Financial Statements, the statement of net assets and the statement of
           activities, report information on all of the non-fiduciary activities of the primary government and its
           component units interfund activity has been eliminated from these statements; however, interfund
           services provided and used are not eliminated in the process of consolidation Governmental activities,
           which are normally supported by taxes and intergovernmental revenues, are reported separately from
           business-type activities, which are primarily supported by user charges and fees
           The statement of activities presents a comparison between direct expenses and program revenues for
           governmental and business types of the city’s activities direct expenses are those that are clearly identifiable
           with a specific governmental function or business segment program revenues include 1) fees or charges for
           services paid by customers or recipients of goods or services and 2) grants and contributions that are
           restricted to meet the operational or capital requirements of a particular function or segment taxes and
           other revenues not included among program revenues are reported as general revenues
           Fund Financial Statements are presented for governmental funds, proprietary funds, and
           fiduciary funds, even though the latter are excluded from the government-wide financial statements
           emphasis in these statements is placed on major governmental and enterprise funds with each major
           individual fund displayed in a separate column All remaining governmental and enterprise funds are
           aggregated and shown as non-major funds



58                city oF Winston-sAlem
  proprietary funds distinguish operating revenues and expenses from nonoperating items operating
  revenues and expenses generally result from providing services and producing and delivering goods in
  connection with a proprietary fund’s principal ongoing operations 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
  nonoperating revenues and expenses
  The City reports the following major governmental funds:

  The General Fund is the primary operating fund of the city and accounts for the provision of
  governmental services The general fund summarizes the financial transactions of governmental
  services, except for those more appropriately recorded in other funds
  The Debt Service Fund accumulates resources to pay maturing principal and interest on long-term
  general obligations and capital lease charges for governmental capital projects General, revenue and
  special obligations issued for water and sewer utilities, solid waste disposal, and parking facilities, plus
  related debt service, are recorded in the respective enterprise funds
  The Capital Projects Fund accounts for resources to acquire or construct major capital improvements,
  other than those financed by proprietary funds principal resources include intergovernmental
  revenues, proceeds of general obligation bonds, capital leases and transfers from other funds
  The City reports the following major proprietary funds:

  The Water and Sewer Utility Fund accounts for water and sewer services in the city and certain
  areas of the county The system is under the administrative direction of the Winston-salem/Forsyth
  county utility commission
  The Solid Waste Disposal Fund accounts for recycling and disposal services of solid waste in
  Winston-salem and Forsyth county The system is under the administrative direction of the
  Winston-salem/Forsyth county utility commission
  Additionally the City reports the following fund types:
  Internal Service Funds account for workers compensation, health benefits, dental and flexible
  benefits, employee benefits and the Risk Acceptance management corporation that is a component
  unit blended in the city fund financial statements
  Fiduciary Funds account for employment benefits, post-employment benefits and pension trust funds,
  including Winston-salem police officers’ Retirement system and Winston-salem separation Allowance

C. measurement Focus and Basis of Accounting
   Government-wide, Proprietary Fund and Fiduciary Fund Financial Statements
  are reported using the flow of economic resources measurement focus and accrual basis of accounting
  Revenues are recognized in the period earned, and expenses are recognized in the period incurred,
  regardless of the timing of related cash flows property taxes are recognized as revenues in the year for
  which they are levied Revenue from grants and similar items is recognized when all eligibility
  requirements have been met With this measurement focus, all assets and all liabilities associated with
  the operation of these funds are included on the balance sheet
  Governmental Fund Financial Statements are reported using a current financial resources
  measurement focus and the modified accrual basis of accounting Revenues are recognized in the period
  received and are accrued if considered to be both measurable and available to pay current liabilities
  expenditures are generally recorded when a liability is incurred, as under accrual accounting however,
  debt service expenditures, as well as expenditures for compensated absences and claims and judgments,
  are recorded only when payment is due With this measurement focus, only current assets and current

                                                               2009 AnnuAl FinAnciAl RepoRt
                                                                                                                 59
       liabilities generally are included on the balance sheet proceeds of general long-term debt and proceeds
       from capital leases are reported as other financial sources General capital asset acquisitions are reported
       as expenditures
       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 a revenue because the amount is not
       susceptible to accrual At June 30, taxes receivable are materially past due and are not considered to be
       an available resource to finance the operations of the current year Also, as of January 1, 1993, 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, Forsyth county is responsible for billing and
       collecting the property taxes on registered motor vehicles on behalf of all municipalities and special tax
       districts in the county, including the city of Winston-salem For motor vehicles registered under the
       staggered system, property taxes are due the first day of the fourth month after the vehicles are registered
       The billed taxes are applicable to the fiscal year in which they become due Therefore, the city’s vehicle
       taxes for vehicles registered in Forsyth county from march 2008 through February 2009 apply to fiscal
       year ended June 30, 2009 uncollected taxes that were billed during this period are shown as a receivable
       in these financial statements and are offset by deferred revenues
       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 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 assets available to finance the program it is the city’s policy to first
       apply cost-reimbursement grant resources to such programs, followed by categorical block grants, and
       then by general revenues
       As permitted by generally accepted accounting principals, the city has elected to apply all Financial
       Accounting standards Board (“FAsB”) statements issued on or before november 30, 1989, except those
       that conflict with GAsB statements, in its accounting and reporting practices for its proprietary, and
       fiduciary funds

     d. Budgetary Accounting
       Budgetary accounting is used for management control of all funds of the city Annual budget ordinances
       are adopted on the modified accrual basis at the fund level and amended as required for the operations of
       the general, debt service, certain special revenue, and proprietary funds
       project or program budgets spanning more than one fiscal year are adopted, and amended as required, for
       certain special revenue, capital projects, and proprietary capital improvements special revenue fund budgets
       adopted under project ordinances, including community development, grants, economic and housing
       development, cable franchise fee and emergency telephone fund, as well as the capital projects fund budgets are
       reported by program authorizations The city’s benefit funds, internal service funds, operate under a financial
       plan that was adopted by the governing board at the time the city’s budget ordinance was approved
       Administrative control is exercised through the establishment of detailed line item budgets Budget
       amendments to total expenditures of any fund or between functions, which are the legal level of
       budgetary control, require approval by the city council Budgets are reported as originally adopted and
       amended by executive or council action during the year, amendments to the original budget were made,
       when appropriate, the effects of which were not material The budget ordinance must be adopted by
       July 1 of the fiscal year or the city council must adopt an interim budget that covers that time until the
       annual ordinance can be adopted All unencumbered budget appropriations, except project or program
       budgets, lapse at year-end


60            city oF Winston-sAlem
e. Assets, Liabilities, and Net Assets or Fund Balance
  1. Deposits and Investments
     The city’s cash and investments under the “pooled cash concept” is composed of fixed income and
     equity investments and demand deposit accounts and is used by all funds as allowed by their
     investment authority For arbitrage purposes, the city maintains separate investments of proceeds
     of bond issues and other tax-exempt financings each fund’s portion of cash and investments is
     included as “cash and cash equivalents/investments” on the statement of net assets
     investments are governed by state statutes and written policies Governmental monies may be
     deposited in Fdic-insured or collaterized demand accounts and certificates of deposit other
     investments may be made in obligations of the united states treasury and federal agencies,
     commercial paper rated A-1 by standard and poor’s corporation or p-1 by moody’s commercial
     paper Record, bankers’ acceptances, and master repurchase agreements equity investments of the
     pension trust funds, other employee benefit reserves and designated capital reserves are permitted
     by north carolina state statutes and governed by city policies
     The city utilizes capital management of the carolinas which facilitates electronic transfers between
     the state and units of local government and provides immediate short-term investment of
     temporarily idle funds, principally bond proceeds
     investments are stated at fair value and securities traded on national exchanges are valued at the last
     reported sales price
  2. Receivables and Payables
     lending/borrowing arrangements between funds outstanding at the end of the fiscal year are
     referred to as either “due to/from other funds” (for the current portion of interfund loans) or
     “advances to/from other funds” (for the non-current portion of interfund loans)
     All receivables are shown net of an allowance for uncollectibles which is estimated by analyzing the
     percentage of receivables that were written off in prior years
  3. Ad Valorem Taxes Receivable
     The city property tax is based on the assessed valuation of property located in the city as of the
     preceding January first The value of personal property is established annually, and by state law, real
     property must be appraised at least once every eight years The last revaluation of real property
     became effective with the 2005 tax levy The city’s fiscal year 2009 tax rate was 49 mils, allocated as
     follows: 4242 mils for general purposes, 050 mils for general debt service, and 0158 mils for mass
     transit taxes are due on september first and payable without penalty or interest until the fifth of
     January on and after January sixth, taxes become delinquent, a lien attaches to the property, and a
     penalty of 2 percent is assessed on February first, interest accrues at the rate of 75 percent per month
     until paid property tax receivables are recorded net of allowance for estimated uncollectible amounts
     and offset as deferred revenue since the amount due is not considered to be currently available
  4. Restricted Assets
     certain funds of the Winston-salem/Forsyth county utility system are restricted by revenue bond
     covenants and other intergovernmental agreements These funds include unexpended bond
     proceeds, which are restricted to be used solely for the purpose for which the bonds were originally
     issued, funds restricted to be used for system maintenance and replacement, future expansion and
     economic development purposes unexpended proceeds of certificates of participation are also
     recorded as restricted assets on the statement of net assets




                                                             2009 AnnuAl FinAnciAl RepoRt
                                                                                                                61
     5. Inventories
        inventories, are recognized under the consumption method of accounting, which recognizes
        expenditures or expenses of operating materials and supplies as goods are used inventories are
        stated at average cost for warehouse, fleet services, and water and sewer funds All other inventories
        are stated at lower of cost (first in, first out) or market
     6. Capital Assets
        capital assets, which include property, plant, equipment, and infrastructure assets (i e roads,
        bridges, sidewalks, and similar items) are reported in the applicable governmental or business-type
        activities columns in the government-wide statements equipment purchases are considered capital
        assets when the individual cost exceeds $5,000 and useful life is in excess of two years capital assets
        are recorded at cost or at fair market value on the date acquired General infrastructure that was
        acquired prior to July 1, 2001, consists of road network and water and sewer system assets These
        assets are reported at historical cost The cost of maintenance and repair is recorded as an
        expenditure or expense, whereas a significant betterment is capitalized major outlays are
        capitalized as projects are constructed net interest on debt issued to finance capital assets of
        business-type activities is capitalized during the construction phase
        property, plant, and equipment of the city and component units is depreciated using the straight
        line method over the following estimated useful lives:
             Buildings                                             10-40 years
             improvements other than buildings                     10-40 years
             machinery and equipment                               3-10 years
     7. Accumulated Vacation and Sick Leave Benefits
        earned vacation may be accumulated to a maximum of 30 days at the end of each calendar year
        Accumulated vacation is due when leave time is taken by the employee or at the time of
        termination, retirement, or death Accrued vacation leave is recorded as a liability when incurred in
        the government-wide, proprietary, and fiduciary fund financial statements
        employees terminating service before retirement forfeit accumulated sick leave; therefore, sick leave
        is charged as an expenditure or expense when paid sick leave may be accumulated without limit
        until retirement, at which time limited credit for this leave is given in the computation of retirement
        benefits since the city has no obligation for the accumulated sick leave until it is actually taken, no
        accrual for sick leave has been made
     8. 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
        assets Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the
        life of the related debt Bonds payable are reported net of the applicable bond premium or discount
        in fund financial statements, governmental fund types recognize bond premiums and discounts, as
        well as issuance costs, during the current period The face amount of debt issued is reported as other
        financing sources premiums and discounts received on debt issuance are reported as other
        financing sources issuance costs, whether or not withheld from the actual debt proceeds, are
        reported as debt service expenditures




62        city oF Winston-sAlem
  9. Net Assets/Fund Balances
       net assets in government-wide and proprietary fund financial statements are classified as invested
       in capital assets, (net of related debt), restricted, and unrestricted Restricted net assets are either
       constrained externally by creditors, grantors, contributors, or laws or regulations of other
       governments or imposed by law through state statute

        Restricted Net Assets June 30, 2009
        Capital improvements                                                                        $ 76,478,451
        Other purposes
         Nonmajor governmental                                                                        29,184,885
        Total                                                                                      $ 105,663,336

       in the fund financial statements, governmental funds report reservations of fund balance for
       amounts that are not available for appropriation or are legally restricted by outside parties for use
       for a specific purpose portions of fund equity representing encumbrances, prepaids, inventories,
       capital improvements, and other specific purposes are reserved for future use and, therefore, are not
       available for general appropriation or expenditure Amounts reserved for capital improvements
       may represent bond proceeds issued to finance future capital improvements

        Fund Balance June 30, 2009
        Reserved:
         Encumbrances                                                                               $ 13,040,608
         Inventories                                                                                   1,725,373
         Prepaids                                                                                        205,784
         Capital improvements                                                                         48,410,339
         General governmental                                                                            318,323
         Public protection                                                                             1,279,328
         Transportation                                                                                4,962,441
         Community and economic development                                                           13,038,656
         Perpetual care- nonexpendable                                                                 1,918,397
         State Statute                                                                                14,286,280
        Unreserved:
        Designated
         Debt Service                                                                                  7,066,182
         Subsequent year budget                                                                        2,614,400
        Undesignated                                                                                  21,402,078
        Total                                                                                      $ 130,268,189


F. prior period Adjustments
  on July 19, 2004, the Fourth street parking Facility was sold, and the asset was disposed of in accordance
  with generally accepted accounting principles in a review of the fixed assets system in the current year, it
  was discovered that the city had inadvertently disposed of two parking decks during fiscal year ended
  June 30, 2005 The center city West Fourth street parking Facility was disposed of in error As a result, the
  city has made the following prior period adjustment for the replacement of the parking facility which
  reflects the correct balances in the parking Fund at July 1, 2008
   Land                                                                                               $ 456,293
   Improvements other than buildings                                                                   5,908,937
   Accumulated depreciation                                                                            1,401,838
   Capital assets, net                                                                               $ 4,963,392
  during fiscal year June 30, 2009, the employee benefit funds were reclassified as internal service funds
  These funds had previously been recorded as fiduciary trust funds The net assets were $14,506,610 at
  July 1, 2008
                                                                2009 AnnuAl FinAnciAl RepoRt
                                                                                                                   63
         on August 31, 2006, the city of Winston-salem entered into a lease agreement with Winston-salem
         state university Winston-salem state university agreed to make field house base rental payments of
         $3,300,000 to partially reimburse the city of Winston-salem for construction of the Field house The
         lease receivable was not recorded in 2006 The balance outstanding at July 1, 2008 was $3,225,000 and
         was recorded as lease receivable and deferred revenue in the fund statements in the government-wide
         statements, an entry was recorded to net assets at July 1, 2008 of $3,225,000


     2. Stewardship, Compliance and Accountability
       A. deficit in Fund Balance
         The community development Fund reports a negative fund balance of $600 This is a result of timing
         differences between expenditures being made and grant reimbursements


     3. detailed Notes on All Funds
       A. deposits and investments
         a. deposits
             All the city’s deposits are entirely insured or collateralized The city requires collateral for demand
             deposits and certificates of deposit to be held by an independent custodian in the city’s name or
             through a collateral pool 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; these deposits are considered to be
             held by the city’s agents in its name 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 or with the escrow agent Because of the inability to measure exact amount of collateral
             pledged for the city 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 does not have a policy regarding custodial credit risk for deposits
             At June 30, 2009, the city’s deposits had a carrying value of $54,465,516 and bank balance of
             $54,280,431 of the bank balance, $1,310,181 was covered by federal depository insurance and the
             remainder was covered by collateral held under the pooling method At June 30, 2009, the city
             maintained various petty cash funds totaling $56,027

         b. investments
             The city’s investment policy was adopted by the city council in July 1999 and is designed to
             provide liquidity for disbursement needs and to maximize investment income since individual
             funds may deposit and withdraw funds at any time, the cash and investment types, short-term and
             longer-term fixed income investments and equity investments are essentially managed as demand
             deposit accounts For the statement of cash flows, all proprietary fund types pooled cash is
             considered cash and cash equivalents Restricted cash and cash equivalents are restricted by
             bond covenants and other financing intergovernmental agreements




64             city oF Winston-sAlem
As of June 30, 2009, the city had the following investments and maturities

        Investment Type        Market Value     Less than 6 Months   6 - 12 Months          Over 1 Year
Common Stock                   $ 130,542,783      $ 130,542,783      $                 $
US Gov’t Treasuries               49,519,267                              1,507,234           48,012,033
US Gov’t Agencies                 79,584,752          5,419,356           2,462,055           71,703,341
Corporate Bonds                   22,935,740                                                  22,935,740
Municipal Bonds                   10,780,073         10,000,000             258,705              521,368
Commercial Mortgage-Backed           751,989                                                     751,989
Mutual Funds                         731,723            731,723
Money Market Funds                 9,888,949          9,888,949
NC Capital Management Trust      117,994,729        117,994,729
  - Cash Portfolio
Total                          $ 422,730,005      $ 274,577,540          $ 4,227,994       $ 143,924,471

Interest Rate Risk. As a means of limiting its exposure to fair value losses arising from rising
interest rates, the city’s investment policy limits direct investment of operating funds to securities
maturing no more than five years from the date of purchase Also, the city’s investment policy
requires purchases of securities to be laddered with staggered maturity dates to meet the operating
requirements of each individual fund and cash flow requirements of the city’s overall operations
Reserve funds invested by external asset managers are not required to meet liquidity needs within
the short-term and may have maturities generally consistent with benchmark indices established
to monitor performance of the asset managers city investment policy requires that proceeds of
General obligation, special obligation and Revenue bonds and certificates of participation shall
be invested in cash and short-term fixed income securities since these funds are required to be
expended within 3 years
Credit Risk. The city’s investment policy requires that all investments subject to ncGs 159-30
in bonds or notes, including commercial paper, bear the highest ratings of at least one nationally
recognized rating service and do not bear a rating below the highest by any nationally recognized
rating service which rates the particular obligation The city’s investment policy requires that
investments in corporate bonds under its statutorily expanded investment authority for investments
not subject to ncGs 159-30 must be investment grade (BBB or higher) The city’s investments in
the nc capital management trust cash portfolio carried a credit rating of AAAm by standard &
poor’s as of June 30, 2009 The city’s investments in us Agencies are rated AAA by standard &
poor’s and Aaa by moody’s investors service All commercial paper of the city is rated A1 by
standard & poor’s and p1 by moody’s




                                                         2009 AnnuAl FinAnciAl RepoRt
                                                                                                           65
            The ratings of the municipal and corporate bonds are presented in the following table
                                                    S&P                        Moody’s               Market Value
              Municipal                             AAA                          Aa3                 $     780,073
                                                    AAA                          Aaa                     10,000,000
               Total Municipal                                                                           10,780,073
              Corporate                             AAA                          Aaa                     11,485,806
                                                    AAA                          Aa2                       109,362
                                                    AA+                          Aa2                       625,681
                                                     AA-                         Aa3                       300,114
                                                     AA-                         A1                        722,296
                                                     A+                          Aa1                       337,656
                                                     A+                          Aa2                       740,361
                                                     A+                          Aa3                       523,615
                                                     A+                          A1                        311,043
                                                     A+                          A3                        209,423
                                                      A                          A1                        737,876
                                                      A                          A2                       2,345,014
                                                      A                          A3                       1,683,127
                                                     A-                          A2                        715,926
                                                     A-                          A3                       2,088,440
               Total Corporate                                                                           22,935,740
                  Total Bonds                                                                       $ 33,715,813

            The blended component units of the north carolina municipal leasing corporation, and the Risk
            Acceptance management corporation, along with the Winston-salem police officers Retirement
            Fund have similar interest rate risk and credit risk characteristics All three operate under special
            statutes passed by the north carolina legislature that empower them to invest in common stocks,
            municipal bonds, corporate bonds, and other instruments similar to those used by the north
            carolina state treasurer for long-term financial assets

     B. receivables-Allowance for uncollectible Accounts
       The receivable amounts shown in the Balance sheet and the statement of net Assets are net of the
       following allowances for uncollectible accounts:
        Allowances for Uncollectible Accounts at June 30, 2009
        General fund
         Taxes receivable                                                                                 $ 2,376,849
         Other receivables                                                                                  1,286,202
        Special revenue funds
         Nonmajor                                                                                             72,602
        Debt service fund                                                                                    241,005
        Enterprise funds
         Water and sewer utility                                                                              285,234
         Solid waste disposal                                                                                 254,701
         Nonmajor                                                                                             330,900
        Total                                                                                             $ 4,847,493




66              city oF Winston-sAlem
C. interfund receivables, payables, and transfers
  The composition of interfund receivables and payables at June 30, 2009 is as follows:
   Interfund Receivables and Payables at June 30, 2009
                                                                        Interfund Payables   Interfund Receivables
   General fund                                                           $                        $ 200,500
   Special revenue funds
    Nonmajor                                                                     200,500
   Capital projects fund                                                                             665,322
   Enterprise funds
    Nonmajor                                                                     665,322

   Total                                                                      $ 865,822            $ 865,822

  The capital projects fund interfund receivable is due from the fairgrounds fund for a loan made to finance
  capital improvements in fiscal year 1990 All remaining balances are from time lags between the dates
  that (1) interfund goods and services are provided or reimbursable expenditures occur, (2) transactions
  are recorded in the accounting system, and (3) payments between funds are made
  The city uses transfers to 1) move revenues from a fund that state statute or budget requires to collect
  them to a fund that statute or budget requires to expend them, 2) move receipts restricted to debt service
  from the funds collecting the receipts, to the debt service fund as debt service payments become due, and
  3) use unrestricted revenues collected in various funds to finance various programs accounted for in
  other funds in accordance with budgetary authorizations
  major transfers made in the year ended June 30, 2009 include: a transfer of $1,392,302 from the stormwater
  management fund to the general fund for the seasonal leaf collection and rodent control; a $2,847,285
  transfer from solid waste disposal fund to the general fund for curbside recycling expenditures; a
  community development fund transfer to the general fund for $845,368 to cover housing rehabilitation
  expenditures; a gasoline tax fund transfer to the general fund for $4,197,590 and $1,789,773 to the capital
  projects fund for non-state street construction and maintenance; a sales tax fund transfer to general fund
  for $6,701,227 and debt service fund for $4,512,538; a general fund transfer to the parking fund for
  $915,941 to cover the city’s share of the operating loss of $676,035 for the church and Fourth street
  parking deck and other parking fund losses; a transfer from the mass transit tax fund to the Winston-salem
  transit Authority fund for $3,424,033 to cover mass transit operations; a transfer from general fund to
  economic and housing development fund of $1,515,030 to fund economic development projects; and
  general fund transfers made to the public facilities management fund for $1,438,700 to cover operating
  expenses of the W-s entertainment/sports complex, and the m c Benton, Jr convention center

   Transfers for Fiscal Year Ended June 30, 2009
                                                                        Transfers In           Transfers Out
   General fund                                                         $ 16,000,972             $ 4,847,441
   Special revenue funds
    Nonmajor                                                              3,641,413               24,069,347
   Debt service fund                                                      7,153,788                2,108,977
   Capital projects fund                                                 14,219,695                6,854,727
   Enterprise funds
    Water and sewer utility                                                                            5,660
    Solid waste disposal                                                                           2,847,285
    Nonmajor                                                               7,110,507               7,392,938
   Total                                                                $ 48,126,375            $ 48,126,375




                                                              2009 AnnuAl FinAnciAl RepoRt
                                                                                                                     67
     d. Capital Assets
       The following tables summarize the changes in the components of capital assets for the year ended
       June 30, 2009:
                                                          Balance                                          Balance
        Governmental Activities                        June 30, 2008    Increase       Decrease         June 30, 2009
        Capital assets, not being depreciated:
        Land                                             $ 53,683,270   $ 3,704,566      $ (84,815)       $ 57,303,021
        Construction in progress                           63,880,102       676,221                         64,556,323
        Total capital assets, not being depreciated       117,563,372     4,380,787         (84,815)       121,859,344
        Capital assets, being depreciated:
          Buildings                                        64,353,792     7,345,969      (2,858,471)        68,841,290
          Improvements other than buildings               178,970,720    11,518,493        (519,857)       189,969,356
          Machinery and equipment                         101,770,320     5,084,204      (1,091,544)       105,762,980
        Total capital assets being depreciated            345,094,832    23,948,666      (4,469,872)       364,573,626
        Less accumulated depreciation for:
          Buildings                                        21,246,235      1,667,540        (346,000)       22,567,775
          Improvements other than buildings                65,200,483      4,616,335        (184,794)       69,632,024
          Machinery and equipment                          72,926,252      8,468,796      (1,088,964)       80,306,084
        Total accumulated depreciation                    159,372,970   $ 14,752,671   $ (1,619,758)       172,505,883
        Total capital assets, being depreciated, net      185,721,862                                      192,067,743
        Governmental activities capital assets, net     $ 303,285,234                                    $ 313,927,087


                                                         Balance as
                                                          adjusted                                         Balance
        Business-type Activities                       June 30, 2008    Increase       Decrease         June 30, 2009
        Capital assets, not being depreciated:
        Land                                             $ 33,434,020    $ 959,685      $ (304,325)       $ 34,089,380
        Construction in progress                           93,805,883                    (4,985,343)        88,820,540
        Total capital assets, not being depreciated      127,239,903        959,685      (5,289,668)       122,909,920
        Capital assets, being depreciated:
          Buildings                                       260,614,804       508,242      (2,997,092)       258,125,954
          Improvements other than buildings               635,680,227    60,569,122      (3,243,787)       693,005,562
          Machinery and equipment                          48,705,845     1,619,498        (187,048)        50,138,295
        Total capital assets being depreciated            945,000,876    62,696,862      (6,427,927)     1,001,269,811
        Less accumulated depreciation for:
          Buildings                                        79,487,483      6,245,998      (2,079,156)       83,654,325
          Improvements other than buildings               224,110,897     16,599,674        (947,266)      239,763,305
         Machinery and equipment                           35,005,553      3,912,283        (186,913)       38,730,923
        Total accumulated depreciation                    338,603,933   $ 26,757,955   $ (3,213,335)       362,148,553
        Total capital assets, being depreciated, net      606,396,943                                      639,121,258
        Business-type activities capital assets, net    $ 733,636,846                                    $ 762,031,178


       The city has outstanding project authorizations for general governmental projects in the amount of
       $71,023,765 with $7,131,363 in unexpended commitments and outstanding authorizations for capital
       projects in enterprise funds amounting to $179,976,676 with $96,322,811 in unexpended commitments
       Funding for these commitments has been identified in capital project ordinances and should not require
       future financing
       during the fiscal year ended June 30, 2009, the total interest and fiscal charges in the enterprise funds
       were $14,770,050 of which $731,629 net of interest income, was capitalized to construction projects



68              city oF Winston-sAlem
  depreciation expense was charged to functions/programs as follows:

   Governmental Activities
                                                                                       Depreciation Expense
                                                                                         For Year Ended
                                                                                         June 30, 2009
   General government                                                                        $ 3,161,235
   Public protection                                                                           4,110,228
   Environmental health                                                                        1,132,455
   Transportation                                                                              3,816,776
   Culture and recreation                                                                      1,675,099
   Community and economic development                                                            856,878
   Total                                                                                    $ 14,752,671



   Business-type Activities
                                                                                       Depreciation Expense
                                                                                         For Year Ended
                                                                                         June 30, 2009
   Water and sewer utility                                                                  $ 19,752,602
   Solid waste disposal                                                                        1,382,451
   Cemeteries                                                                                     21,070
   Stormwater management                                                                         452,214
   Parking                                                                                       878,904
   Transit Authority                                                                           1,749,274
   Public facilities management                                                                1,692,518
   Fairgrounds                                                                                   215,797
   Risk Acceptance Management Corp.                                                              613,125
   Total                                                                                    $ 26,757,955




e. operating Leases
  The city leases land, building space, and certain operating equipment under noncancelable operating
  leases terminating during fiscal years 2010 through 2023 Renewal options of one to five years are
  available to the city under certain of these agreements total expense on operating leases was $2,280,714
  during fiscal year 2009

   Future Minimum Commitments For Operating Leases:
   2010                                                                                     $ 2,264,360
   2011                                                                                       2,240,508
   2012                                                                                       2,150,300
   2013                                                                                       2,150,300
   2014                                                                                       1,163,658
   2015-2019                                                                                    885,060
   2020-2023                                                                                    575,289
   Total                                                                                   $ 11,429,475




                                                             2009 AnnuAl FinAnciAl RepoRt
                                                                                                              69
     F. Net investment in direct Financing Leases
       The city leases the condominium space of the embassy suites hotel/West tower and Grand pavillion
       Ballroom to noble Winston-salem Associates West, l l c The lease will expire June 30, 2036 with the
       option to purchase for $2 million plus the unamortized balance of the related debt
        Total lease payments receivable                                                               $ 17,600,000
        Less unearned income                                                                             (7,646,493)
        Net investment in direct financing lease                                                       $ 9,953,507


        Minimum Lease Payments:
        2010                                                                                             $ 600,000
        2011                                                                                               600,000
        2012                                                                                               600,000
        2013                                                                                               600,000
        2014                                                                                               600,000
        Thereafter                                                                                      14,600,000
        Total                                                                                         $ 17,600,000


     g. employee termination Benefits
       in February, 2009, the city council amended the personnel resolution to add a retirement incentive
       program participation in the program is voluntary and available to employees who are eligible for
       unreduced or full retirement benefits employees electing to participate in the retirement incentive will be
       offered a $20,000 lump sum payment part-time employees will receive a payment not to exceed thie
       annual base salary if paid less than $20,000 annually employees will retire no later than August 31, 2009
       Retirement incentive payments will be paid to 44 employees The city paid $80,000 to four employees
       who retired before June 30, 2009 The liability for the accrued retirement incentive payments was
       $800,000 payable at June 30, 2009 The liability consists of 40 voluntary terminations

     h. Long-term Liabilities
       general obligation Bonds
       The city issues general obligation bonds to provide funds for general government capital improvement
       projects in november 2000, city residents approved a $71 million bond referendum that authorized
       bonds to be issued for road improvements, economic development, a public safety communications
       system, and housing development At June 30, 2009, $10 5 million of these bonds were unissued
       in may 2009, the city issued $8,435,000 in general obligation refunding bonds at a net interest cost of
       2 67% The proceeds were used to advance refund $4,000,000 of the General obligation Bonds, series
       1998 and $4,910,000 of the General obligation Bonds, series 1999 This refunding issue will save the city
       $1,282,166 in future debt service over the remaining life of the bonds and results in an economic gain
       (net present value of the savings) of $1,190,665
       in 1993, the city issued general obligation capital appreciation bonds The annual accretion of interest on
       these bonds for fiscal year 2009 of $121,141 was recorded in the statement of net assets as accrued interest
       provisions of the state constitution and the local Government Bond Act, as amended, permit the city
       statutory capacity for additional general obligation bonds in the amount of $1 53 billion




70              city oF Winston-sAlem
General Obligation Bonds Debt Service Requirements to Maturity are:
                                                                                   Governmental Activities
Fiscal Year                                                                  Principal                 Interest
2010                                                                          $ 5,795,308              $ 3,889,040
2011                                                                            4,310,326                3,772,563
2012                                                                            4,679,597                3,650,829
2013                                                                            4,826,215                3,662,248
2014                                                                            4,772,950                3,564,248
2015-2019                                                                      24,035,000               11,936,193
2020-2024                                                                      27,060,000                6,152,299
2025-2028                                                                      10,470,000                1,019,165
Total                                                                        $ 85,949,396             $ 37,646,585


Special obligation Bonds
The city of Winston-salem issued special obligation bonds in fiscal years 1996 and 2003 to fund solid
waste disposal capital projects The city of Winston-salem issued special obligation bonds in fiscal year
2006 to advance refund the Winston-salem special obligation Bonds series 1995 and to fund
improvements to the Alliance science and technology Business park municipal service district The
bonds are payable exclusively from pledged revenues

Special Obligation Bonds Debt Service Requirements to Maturity are:
                                              Governmental Activities                Business-type Activities
Fiscal Year                               Principal             Interest         Principal              Interest
2010                                        $ 175,000            $ 222,000      $ 1,295,000              $ 524,645
2011                                          275,000              216,313        1,325,000                473,339
2012                                          285,000              206,000        1,385,000                421,385
2013                                          295,000              195,313        1,435,000                367,992
2014                                          305,000              183,512        1,495,000                310,592
2015-2019                                   1,725,000              727,474        5,620,000                597,490
2020-2024                                   2,090,000              357,150
2025                                          470,000               19,388
Total                                     $ 5,620,000          $ 2,127,150     $ 12,555,000            $ 2,695,443

revenue Bonds
The city issues revenue bonds to fund capital improvement projects for the Winston-salem/Forsyth
county Water and sewer system The revenues, net of operating expenses, of the water and sewer system
are pledged as security for the revenue bonds which were issued at 1997, 2001, 2002, 2005, 2007 and
2009 Revenue bonds outstanding at June 30, 2009 were $428,160,000 with interest rates between 2 50%
and 5 5% which are payable over the next 30 years A trust agreement, dated october 1, 1988, between
the city and the Bank of new york, as trustee, authorizes and secures all outstanding revenue bonds
certain financial covenants are contained in the trust agreement, including a requirement that the city
maintain a long-term debt service coverage ratio on all utility revenue debt of not less than 1 1 The city
was in compliance with all covenants for the fiscal year ended June 30, 2009 and the ratio was 1 3 The
total principal and interest remaining to be paid on the bonds is $692,624,946 principal and interest paid
for in the fiscal years ended June 30, 2009 and 2008 were $23,709,999 and $20,564,024, respectively
in march 2009, the city issued $109,030,000 in water and sewer revenue bonds at an average fixed rate
of 4 73% The bond proceeds will be used to modernize the Thomas Water treatment plant, upgrade
the elledge sewer treatment plant, and to fund various other smaller capital improvement projects




                                                               2009 AnnuAl FinAnciAl RepoRt
                                                                                                                     71
     Revenue Bonds Debt Service Requirements to Maturity are:
     Fiscal Year                                                                   Principal         Interest
     2010                                                                         $ 11,885,000      $ 18,150,286
     2011                                                                           12,440,000        17,611,791
     2012                                                                           15,495,000        17,052,194
     2013                                                                           15,860,000        16,445,466
     2014                                                                           16,495,000        15,817,966
     2015-2019                                                                      93,755,000        68,087,173
     2020-2024                                                                      69,840,000        50,586,844
     2025-2029                                                                      84,955,000        35,964,717
     2030-2034                                                                      63,740,000        18,819,133
     2035-2039                                                                      43,695,000         5,929,376
     Total                                                                       $ 428,160,000     $ 264,464,946

     interest rate Swap
     Water and Sewer System Revenue Bonds, Series 2002B The city of Winston-salem
     entered into an interest rate swap agreement (the “swap agreement”) with citigroup, inc on november
     12, 2002, which became effective on december 4, 2002, with the issuance of $37,090,000 city of Winston-
     salem Water and sewer system Revenue Bonds, series 2002B (the “series B Bonds”) The synthetic fixed
     interest rate swap effectively changes the series B Bonds from a variable rate demand obligation to a fixed
     interest rate of 3 69% The Bond Buyer published a comparative revenue bond fixed interest rate index of
     5 24% on december 4, 2002 The synthetic fixed interest rate swap agreement initially lowered the fixed
     interest rate on the series B Bonds by at least 155 basis points The synthetic fixed interest rate on the
     series B Bonds is subject to adjustment in future periods as described in following paragraphs
     under the swap agreement, beginning on the first Wednesday in January, 2003, and continuing on a
     monthly basis, the city pays citigroup, inc interest at the fixed rate of 3 69% on the notional amount of
     the series B Bonds citigroup, inc , on the same date and continuing on a monthly basis, pays the city a
     floating interest rate on the notional amount based on the monthly average actual variable interest rate
     (Bond Rate) on the series B Bonds since december 5, 2003, citigroup, inc pays the city an alternative
     floating rate from and including the date on which the average of the Bond Rate of the series B Bonds has
     exceeded 69% of the average usd-liBoR-BBA (with a designated maturity of one month) for a period of
     more than the next preceding 180 days The alternative floating rate will be 69% of the monthly average usd-
     liBoR-BBA if this rate is lower than the Bond Rate The notional amount of the swap reduces annually; the
     reductions begin on June 6, 2019, and end on the termination date of June 30, 2030
     Based upon the terms of the swap agreement the city may be exposed to basis risk and a subsequent
     payment on and after June 2, 2004, if its actual variable interest rate on the series B Bonds has exceeded
     69% of the average monthly usd-liBoR-BBA for a period of more than the next preceding 180 days
     Basis risk also could occur with an event of taxability of the series B Bonds that causes the Bond Rate to
     be consistently above 69% of liBoR if the relationship of the city’s series B Bonds trade to a percentage
     of liBoR is greater than 69%, the city will experience an increase in debt service above the synthetic
     fixed rate of the swap




72           city oF Winston-sAlem
As of June 30, 2009, rates were as follows:
                                                                                                 Terms        Rates at June 30, 2009
Fixed payment to Citigroup, Inc.                                                                 Fixed               3.690%
  Variable payment from Citigroup, Inc. provided the Bond Rate has not exceeded 69% of the     Bond Rate          Not applicable
  average monthly USD-LIBOR-BBA for a period of more than the next preceding 180 days.
  Variable payment from Citigroup, Inc. provided the Bond Rate limited to 69% of the         Limited to 69%          -0.292%
  average monthly USD-LIBOR-BBA provided the Bond Rate has exceeded the LIBOR                  of Average
  percentage for a period of more than the next preceding 180 days.                          Monthly LIBOR
Net interest rate swap payments                                                                                      3.398%
Actual variable Bond Rate                                                                      Bond Rate             0.922%
Synthetic fixed interest rate on Series B Bonds                                                                      4.320%
                                The Bond Buyer Revenue Bond Index on 12/4/2002                                       5.240%

As of June 30, 2009, the agreement had a negative fair value of $4,423,303 The fair value was developed
by citigroup, inc using the zero coupon method This method calculates the future net settlement
payments required by the agreement assuming that the current forward rates implied by the yield curve
correctly anticipate future spot interest rates These payments are then discounted using the spot rates
implied by the current yield curve for hypothetical zero-coupon bonds due on the date of each future
net settlement on the swap
As of June 30, 2009, the city was not exposed to credit risk because the swap had a negative fair value
The city is exposed to credit risk in the amount of the derivative’s positive fair value citigroup Global
markets holdings, inc has executed and delivered a Guarantor Agreement to the city, which “absolutely”
and “unconditionally” guarantees the payment to the city of any obligation of its wholly owned subsidiary,
citigroup, inc At June 30, 2009, citigroup Global markets holdings, inc was rated “A3” by moody’s
investor’s service, “A” by standard and poor’s Ratings services, and “A+” by Fitch Ratings
The derivative contract uses the international swap dealers Association master Agreement, which
includes standard termination events, such as failure to pay and bankruptcy termination could result
in the city being required to make or being entitled to receive an unanticipated termination payment
based upon the market value on the date of termination
As rates vary, variable rate bond interest payments and net swap payments will vary As indicated in a
preceding paragraph, the initial synthetic fixed interest rate on the series B Bonds lowered the city’s
interest cost by about 18% compared with The Bond Buyer Revenue Bond index on the date of issuance
of the bonds and before any adjustment on the swap
using rates as of June 30, 2009, debt service requirements of the variable rate debt and net swap payments,
assuming current interest rates remain the same for the term of the series B Bonds, are as follows

                                                   Bonds
      Fiscal Year                                             Variable Rate          Net Interest Rate Swap
    Ending June 30                   Principal                   Interest                   Payments                   Total
        2010                     $                            $  341,970                $ 1,260,318              $  1,602,288
        2011                                                     341,970                   1,260,318                1,602,288
        2012                                                     341,970                   1,260,318                1,602,288
        2013                                                     341,970                   1,260,318                1,602,288
        2014                                                     341,970                   1,260,318                1,602,288
      2015-2019                     1,700,000                  1,709,850                   6,301,590                9,711,440
      2020-2024                     9,535,000                  1,462,431                   5,389,738               16,387,169
      2025-2029                    17,305,000                    986,633                   3,636,198               21,927,831
        2030                        8,550,000                     78,831                     290,530                8,919,361
        Total                    $ 37,090,000                $ 5,947,595                $ 21,919,646             $ 64,957,241

* computed using the 3 398% net interest rate swap payment to the city times $37,090,000, less
accumulated annual reductions, if any
                                                                              2009 AnnuAl FinAnciAl RepoRt
                                                                                                                                       73
     City of Winston-Salem Water and Sewer System Revenue Bonds, Series 2002C
     The city of Winston-salem entered into an interest rate swap agreement (the “swap agreement”) with
     citigroup, inc on november 12, 2002, which became effective on december 4, 2002, with the issuance of
     $71,305,000 city of Winston-salem Water and sewer system Revenue Refunding Bonds, series 2002c
     (the “series c Bonds”) The synthetic fixed interest rate swap was executed in order to complete an
     advance refunding of prior water and sewer system revenue bonds and effectively changes the series c
     Bonds from a variable rate demand obligation to a fixed interest rate of 3 00% The Bond Buyer published
     a comparative revenue bond fixed interest rate index of 5 24% on december 4, 2002 The synthetic fixed
     interest rate swap agreement initially lowered the fixed interest rate on the series c Bonds by at least 224
     basis points and is subject to adjustment in future periods as described in following paragraphs
     under the swap agreement, beginning on the first Wednesday in January, 2003, and continuing on a
     monthly basis, the city paid citigroup, inc interest at the fixed rate of 3 00% on the notional amount of
     the series c Bonds citigroup, inc , on the same date and continuing on a monthly basis, paid the city a
     floating interest rate on the notional amount based on the monthly average actual variable interest rate
     (Bond Rate) on the series c Bonds on or after december 5, 2003, citigroup, inc pays the city an
     alternative floating rate from and including the date on which the average of the Bond Rate of the series
     c Bonds has exceeded 69% of the average usd-liBoR-BBA (with a designated maturity of one month)
     for a period of more than the next preceding 180 days The alternative floating rate is 69% of the monthly
     average usd-liBoR-BBA if this rate is lower than the Bond Rate
     The notional amount of the swap reduces annually; the reductions began on June 4, 2003, and end on
     the termination date of June 3, 2027
     Based upon the terms of the swap agreement the city may be exposed to basis risk and a subsequent
     payment after June 2, 2004, if its actual variable interest rate on the series c Bonds has exceeded 69% of
     the average monthly usd-liBoR-BBA for a period of more than the next preceding 180 days Basis
     risk also could occur with an event of taxability of the series c Bonds that causes the Bond Rate to be
     consistently above 69% of liBoR if the relationship of the city’s Bonds trade to a percentage of liBoR
     is greater than 69%, the city will experience an increase in debt service above the synthetic fixed rate of
     the swap

     As of June 30, 2009, rates were as follows:
                                                                                                   Terms         Rates at June 30, 2009
     Fixed payment to Citigroup, Inc                                                                 Fixed             3.000%
       Variable payment from Citigroup, Inc. provided the Bond Rate has not exceeded 69% of the   Bond Rate          Not applicable
       average monthly USD-LIBOR-BBA for a period of more than the preceding 180 days.
       Variable payment from Citigroup, Inc. provided the Bond Rate limited to 69% of the       Limited to 69%         -0.292%
       average monthly USD-LIBOR-BBA provided the Bond Rate has exceeded the LIBOR                of Average
       percentage for a period of more than the preceding 180 days.                             Monthly LIBOR
     Net interest rate swap payments                                                                                    2.708%
     Actual variable Bond Rate                                                                    Bond Rate             0.880%
      Synthetic fixed interest rate on Series C Bonds                                                                   3.588%
                                          The Bond Buyer Revenue Bond Index on 12/4/2002                                5.240%

     As of June 30, 2009, the agreement had a negative fair value of $6,695,879 The fair value was developed
     by citigroup, inc using the zero coupon method This method calculates the future net settlement
     payments required by the agreement assuming that the current forward rates implied by the yield curve
     correctly anticipate future spot interest rates These payments are then discounted using the spot rates
     implied by the current yield curve for hypothetical zero-coupon bonds due on the date of each future
     net settlement on the swap The swap agreement is cancelable at par at the option of citigroup, inc on
     any date on or after July 1, 2011, upon 30-days irrevocable notice delivered to the city The cancellation
     option resulted in the reduction of the swap rate by approximately 69 basis points should citigroup,
     inc exercise its option to cancel the swap, the city would pay a weekly variable interest rate or could
     change the interest rate method as provided in series indenture, number 9

74          city oF Winston-sAlem
As of June 30, 2009, the city was not exposed to credit risk because the swap had a negative fair value
however, should interest rates change and the fair value of the swap becomes positive, the city would be
exposed to credit risk in the amount of the derivative’s positive fair value citigroup Global markets
holdings, inc has executed and delivered a Guarantor Agreement to the city, which “absolutely” and
“unconditionally” guarantees the payment to the city of any obligation of its wholly owned subsidiary,
citigroup, inc At June 30, 2009, citigroup Global markets holdings, inc was rated “A3” by moody’s
investor’s service, “A” by standard and poor’s Ratings services, and “A+” by Fitch Ratings
The derivative contract uses the international swap dealers Association master Agreement, which
includes standard termination events, such as failure to pay and bankruptcy termination could result in
the city being required to make or being entitled to receive an unanticipated termination payment
based upon the market value on the date of termination
As rates vary, variable rate bond interest payments and net swap payments will vary As indicated in a
preceding paragraph, the initial synthetic fixed interest rate lowers the city’s interest cost by about 32%
compared with The Bond Buyer Revenue Bond index on the date of issuance of the bonds and before
any adjustment on the swap
using rates as of June 30, 2009, debt service requirements of the variable rate debt and net swap payments,
assuming current interest rates remain the same for the term of the series c Bonds, were as follows

                                          Bonds
      Fiscal Year                                 Variable Rate      Net Interest Rate Swap
    Ending June 30           Principal               Interest               Payment              Total
        2010                  $ 580,000              $ 600,076             $ 1,846,498         $ 3,026,574
        2011                    600,000                594,924               1,830,743          3,025,667
        2012                  1,765,000                590,379               1,815,230          4,170,609
        2013                  4,215,000                575,517               1,768,104          6,558,621
        2014                  4,360,000                538,110               1,653,647          6,551,757
      2015-2019              13,295,000              2,297,394               7,061,619         22,654,013
      2020-2024              22,555,000              1,528,892               4,694,440         28,778,332
      2025-2028              20,815,000                467,745               1,434,116         22,716,861
        Total              $ 68,185,000            $ 7,193,037            $ 22,104,397        $ 97,482,434

* computed using the 2 708% net interest rate swap payment to the city times $68,745,000, less
accumulated annual reductions
City of Winston-Salem Water and Sewer System Revenue Bonds, Series 2007B
The city of Winston-salem entered into a forward starting floating-to-fixed interest rate swap
agreement (the “swap agreement”) with citigroup, inc on January 18, 2006, to become effective on
April 19, 2007, with the issuance of $40,000,000 city of Winston-salem Water and sewer system
Revenue bonds The forward starting floating-to-fixed interest rate swap was executed in order to lock-
in an historically low 4 083% synthetically fixed rate of interest on revenue bonds the city issued on
April 19, 2007 in order to meet on-going expansion needs of the Water and sewer system
The city issued variable rate bonds and then on a semi-annual basis each June 1 and december 1,
commencing on december 1, 2007, the city pays citigroup, inc 4 083% of the notional amount of the
revenue bonds and citigroup, inc pays the city the securities industry and Financial markets Association
(siFmA, previously know as BmA) index variable rate The notional amount of the swap reduces annually
in conjunction with the amortization schedule of the variable rate revenue bonds issued




                                                                  2009 AnnuAl FinAnciAl RepoRt
                                                                                                              75
     As of June 30, 2009, the agreement had a negative fair market value of $2,908,554 The fair value was
     developed by citigroup, inc using the zero coupon method This method calculates the future net
     settlement payments required by the agreement assuming that the current forward rates implied by the
     yield curve correctly anticipate future spot interest rates These payments are then discounted using the
     spot rates implied by the current yield curve for hypothetical zero-coupon bonds due on the date of
     each future net settlement on the swap The city may terminate the swap with 30 days written notice to
     citigroup should the city exercise its option to cancel the swap, the city would pay a weekly variable
     interest rate
     As of June 30, 2009, the city was not exposed to credit risk because the swap had a negative fair value
     citigroup Global markets holdings, inc has executed and delivered a Guarantor Agreement to the city,
     which “absolutely” and “unconditionally” guarantees the payment to the city of any obligation of its wholly
     owned subsidiary, citigroup, inc At June 30, 2009, citigroup Global markets holdings, inc was rated “A3”
     by moody’s investor’s service, “A” by standard and poor’s Ratings services, and “A+” by Fitch Ratings
     The derivative contract uses the international swap dealers Association master Agreement, which
     includes standard termination events, such as failure to pay and bankruptcy termination could result in
     the city being required to make or being entitled to receive an unanticipated termination payment
     based upon the market value on the date of termination

                                                       Bonds
           Fiscal Year Ending                                  Synthetically Variable
                June 30                  Principal                 Rate Interest                Total
     2010                                  $ 745,000                 $ 1,603,923               $ 2,348,923
     2011                                    780,000                   1,573,501                 2,353,501
     2012                                    810,000                   1,545,874                 2,355,874
     2013                                    845,000                   1,508,574                 2,353,574
     2014                                    885,000                   1,474,068                 2,359,068
     2015-2019                             5,040,000                   6,799,221                11,839,221
     2020-2024                             6,215,000                   5,680,678                11,895,678
     2025-2029                             7,690,000                   4,292,560                11,982,560
     2030-2034                             9,515,000                   2,578,976                12,093,976
     2035-2037                             6,760,000                     559,538                 7,319,538
     Total                              $ 39,285,000                $ 27,616,913              $ 66,901,913




76          city oF Winston-sAlem
Long-term Liabilities at June 30, 2009
Bonds payable
General obligation bonds, issues dated 1993 to 2009 with stated interest rates of 3.0% to 5.6%
   General government                                                                                                         $ 85,949,396
   Less deferred amounts:
    For issuance discounts/premiums                                                                                             1,099,315
    On refunding                                                                                                                 (272,255)
Revenue bonds, water and sewer system
   Series 1997, principal due annually through 2011 with stated interest rates of 4.6% to 4.8%                                  5,535,000
   Series 2001, principal due annually through 2017 with stated interest rates of 4.375% to 5.5%                               21,465,000
   Series 2002, principal due annually through 2030 with stated and synthetic fixed interest rates of 3.0% to 5.0%            111,085,000
   Series 2005, principal due annually through 2033 with stated interest rates of 2.5% to 5.0%                                 84,190,000
   Series 2007 A, principal due annually through 2037 with stated interest rates of 3.6% to 5.0%                               57,570,000
   Series 2007 B, principal due annually through 2037 with synthetic fixed interest rate of 4.083%                             39,285,000
   Series 2009, principal due annually through 2039 with stated interest rates of 2.25% to 5.0%                               109,030,000
   Less deferred amounts:
    For issuance discounts/premiums                                                                                              6,324,298
    On refunding                                                                                                                (5,162,723)
Special obligation bonds, solid waste management
   Series 2002, principal due annually through 2018 with stated interest rates of 3.6% to 5.0%                                  9,515,000
   Series 2005, principal due annually through 2016 with stated interest rates of 3.0% to 4.0%                                  3,040,000
   Less deferred amounts:
    For issuance discounts/premiums                                                                                                 78,825
    On refunding                                                                                                                  (179,276)
Special obligation bonds, general governmental
   Series 2005, principal due annually through 2025 with stated interest rates of 3.0% to 4.125%                                5,620,000
Contracts payable
 Certificates of participation issued by North Carolina Municipal Leasing Corporation
   Series 1992, principal due November 1, 2012, with a variable taxable interest rate, based on current
     taxable commercial paper rates, paid variably between 60 and 100 days, .65% at year end                                   25,000,000
   Series 2001A, principal due annually through June 1, 2024 with stated interest rates of 3.95% to 5.0%                       22,050,000
   Series 2001 C, principal due annually through June 1, 2011 with stated interest rates of 4.25% to 4.75%                      1,655,000
   Series 2004 A & B, principal due annually through June 1, 2034 with stated interest rates of 4.125% to 6.05%                11,300,000
   Series 2004 C, principal due annually through June 1, 2034 with variable interest rate on one month
     LIBOR rate plus .5% as determined by bondholder, .81625 % at year end                                                      4,230,000
   Series 2004, principal due August 1, 2009, with variable interest rate, paid monthly on average weekly
     secondary market rates as determined by remarketing agent, .65% at year end                                               18,000,000
   Series 2006 A, principal due annually through June 1, 2031 with stated interest rates of 4.0% to 5.0%                       16,810,000
   Series 2006 B, principal due annually through June 1, 2021 with stated interest rates of 4.0% to 5.0%                       11,380,000
   Series 2006 C, principal due August 1, 2011, with variable interest rate, paid monthly on average weekly
     secondary market rates as determined by remarketing agent, .65% at year end                                               18,000,000
   Series 2006 D, principal due annually through June 1, 2026 with stated interest rate of 4.81%                                3,145,000
   Series 2008 C, principal due February 1, 2013, with variable interest rate, paid monthly on average weekly
     secondary market rates as determined by remarketing agent, .65% at year end                                               18,000,000
   Deferred amount on refunding of certificates of participation                                                                 (577,524)
   Deferred amount for issuance discounts/premiums                                                                                171,218
 Risk Acceptance Management Corporation
  Bryce A. Stuart Building Condominiums, principal due monthly through January 1, 2035 at a stated interest rate of 5.353%     13,246,810
   Wingate Inn Hotel, principal due monthly through January 1, 2035 at a stated interest rate of 6.207%                         2,895,439
 United States for construction of W. Kerr Scott reservoir by the Corps of Engineers,
   principal due annually through 2016 with fixed interest rate at 2.699%                                                         113,788
 HUD Section 108 loan, principal due annually through August 1, 2022, with stated interest rates of 1.75% to 6.67%              4,455,000
 Installment Purchase Contract, principal due annually through June 1, 2028 with stated interest rate of 4.19%                 22,600,000
Other
 Accrued vacation leave                                                                                                         10,471,336
 Accrued interest payable                                                                                                        2,357,765
 Landfill closure and postclosure costs                                                                                         11,879,117
 Claims payable – employment and post-retirement benefits                                                                        5,705,396
 Claims payable – Risk Acceptance Management Corporation                                                                           932,485
 Arbitrage rebate liability                                                                                                         45,039
Total current and long-term liabilities                                                                                      $ 758,038,449



                                                                                 2009 AnnuAl FinAnciAl RepoRt
                                                                                                                                              77
     Changes in Long-term Liabilities During Fiscal Year 2009
                                                         Principal                                        Principal
                                                       Outstanding                     Retirements      Outstanding        Due
                                                      June 30, 2008    Additions      And Deferrals    June 30, 2009    Within Year
     Governmental activities
      General obligation bonds                         $ 93,127,317    $ 8,435,000    $ 15,612,921      $ 85,949,396     $ 5,795,308
       Deferred amount on refunding                        (137,275)      (637,900)       (502,920)         (272,255)
       Bond (discount) premium                              482,109        642,702          25,496         1,099,315
      Special obligation bonds                            5,790,000                        170,000         5,620,000        175,000
      Contracts payable
       North Carolina Municipal Leasing Corporation    104,280,682       9,911,299      11,470,511      102,721,470      18,131,529
         Deferred amount on refunding                     (152,719)                         (22,387)       (130,332)
         COP (discount) premium                             95,647                           30,089          65,558
       HUD Section 108 loan                              4,787,000                         332,000        4,455,000         332,000
       Installment purchase contract                    23,600,000                       1,000,000       22,600,000       1,000,000
      Claims payable-employment benefits                 6,262,904                         557,508        5,705,396       4,313,422
      Arbitrage rebate liability                           188,873          45,039         188,873           45,039
      Accrued vacation                                   7,966,019       9,902,685       9,051,671        8,817,033       2,790,366
      Accrued interest payable                           1,657,979          78,635         181,080        1,555,534         342,710
         Total governmental activities debt            247,948,536      28,377,460      38,094,842      238,231,154      32,880,335

     Business-type activities
      Water and sewer revenue bonds                    329,865,000     109,030,000      10,735,000      428,160,000      11,885,000
       Deferred amount on refunding                      (5,814,223)                      (651,500)       (5,162,723)
       Bond (discount) premium                            3,757,864      2,771,590         205,156         6,324,298
      Special obligation bonds                          13,800,000                       1,245,000       12,555,000       1,295,000
       Deferred amount on refunding                        (204,886)                        (25,610)        (179,276)
       Bond (discount) premium                               89,321                          10,496           78,825
      Contracts payable
       North Carolina Municipal Leasing Corporation     23,454,231       1,762,710       3,368,411       21,848,530       3,453,471
         Deferred amount on refunding                     (626,589)                       (179,397)        (447,192)
         COP (discount) premium                            139,642                           33,982         105,660
       Risk Acceptance Management Corporation           18,786,763                       2,644,514       16,142,249         272,207
       Other                                               126,381                           12,593         113,788          12,934
      Accrued vacation                                   1,484,302       1,763,124       1,595,153        1,652,273         668,519
      Landfill closure and postclosure costs            10,645,903       1,343,405         110,191       11,879,117
      Claims payable                                     1,345,030                         412,545          932,485
      Accrued interest payable                             767,079                          (35,152)        802,231         802,231
         Total business-type activities debt           397,615,818     116,670,829      19,481,382      494,805,265      18,389,362

     Fiduciary funds
      Contracts payable
        North Carolina Municipal Leasing Corporation    25,000,087                              87    25,000,000
      Accrued vacation                                       5,751         2,532             6,253         2,030
         Total fiduciary fund debt                      25,005,838         2,532             6,340    25,002,030
     Total                                           $ 670,570,192 $ 145,050,821      $ 57,582,564 $ 758,038,449        $ 51,269,697

     compensated absences for governmental funds typically have been liquidated in the general fund




78          city oF Winston-sAlem
Contracts payable
Contracts Payable Debt Service Requirements to Maturity are:
                       Governmental Activities                   Business-type Activities                       Fiduciary Activities
 Fiscal Year        Principal           Interest              Principal            Interest               Principal               Interest
2010              $ 19,463,529           $ 4,058,179          $ 3,738,612          $ 1,896,609        $                           $ 565,000
2011                 3,046,268             3,962,064            2,391,793            1,704,902                                      565,000
2012                19,547,220             3,595,565            3,312,666            1,543,988                                      565,000
2013                20,771,452             3,339,531            2,236,217            1,416,686            25,000,000                235,417
2014                 3,127,006             2,995,420            2,085,455            1,309,276
2015-2019           19,789,359            12,598,621            8,847,067            5,208,213
2020-2024           23,816,636             7,705,408            5,556,434            3,316,891
2025-2029           14,820,000             2,899,965            3,521,946            2,248,366
2030-2034            5,395,000               589,358            3,449,267            1,261,073
2035                                                            2,965,110               86,329
Total            $ 129,776,470         $ 41,744,111          $ 38,104,567         $ 19,992,333         $ 25,000,000              $ 1,930,417

The city has contracts payable to north carolina municipal leasing corporation obligating the city to
make periodic payments that include interest and principal components The interest component was
calculated using the average interest rate for the previous twelve months for the variable rate debt At June
30, 2009, the city had assets acquired with north carolina municipal leasing corporation totaling
$97,546,691 with related accumulated depreciation in the amount of $70,814,246 The north carolina
municipal leasing corporation had available funds of $2,834,050 at June 30, 2009

Assets have been pledged as collateral for the following contracts payable:
Certificates of Participation issued by North Carolina Municipal Leasing Corporation
 Series 1992                                                               US Treasuries
 Series 2001C                                                              Housing facilities and West 4th Street parking deck
 Series 2001A                                                              City Hall
 Series 2004A&B                                                            West 4th street parking deck
 Series 2004C                                                              Housing facilities and West 4th Street parking deck
 Series 2006A                                                              City Hall
 Series 2006B                                                              West 4th street parking deck
 Series 2006D                                                              City Hall
Installment Purchase Contract 2008                                         Public Safety facilities
Risk Acceptance Management Corporation
 Note to KeyBank
 Bryce A. Stuart Building Condominiums                                     Bryce A. Stuart Municipal Building
 Wingate Inn Hotel                                                         Wingate Inn Hotel




                                                                               2009 AnnuAl FinAnciAl RepoRt
                                                                                                                                               79
     4. other information
       A. pension plan
         The city participates in three defined benefit pension plans:
         North Carolina Local Governmental Employees’ Retirement System, administered by
         the state, is a cost-sharing, multiple-employer pension plan with defined benefits The plan provides, on
         a uniform basis, retirement benefits from contributions made by member employers and employees
         employees not engaged in law enforcement are required to participate in the plan Winston-salem
         police officers may elect to be members of the system Article 3 of G s chapter 128 assigns the authority
         to establish and amend benefit provisions to the north carolina General Assembly
         Financial statements and required supplementary information for the north carolina local
         Governmental employees’ Retirement system are included in the state of north carolina June 30, 2009,
         comprehensive Annual Financial Report The report may be obtained by writing the office of the state
         controller, 1410 service center Road, Raleigh, north carolina 27699-1410, or calling (919) 981-5454
         Funding Policy employees in the plan are required by state statute to contribute six percent of total
         earnings to the system The city is required by the same statute to contribute the remaining amount
         necessary to pay benefits when due The city’s required contribution, actuarially determined, for
         employees not engaged in law enforcement and for law enforcement officers, was 4 80 percent and 4 86
         percent of covered payroll, respectively for the period July 1, 2008, through June 30, 2009, respectively
         The contribution requirements of members and the city are established and may be amended by the
         north carolina General Assembly The city made required contributions to the plan for years ending
         June 30, 2009, 2008, and 2007 in the amounts of $4,986,310, $4,883,397, and $4,630,630 respectively
         The contributions made by the city equaled the required contributions for each year
         Winston-Salem Police Officers’ Retirement Fund, a single-employer, defined benefit plan
         with required membership for police officers, was established by the city in 1977 At June 30, 2009, the
         plan had 779 members consisting of 274 retirees, beneficiaries of deceased retirees, vested terminated
         employees, and 505 active employees members may retire with unreduced benefits after completing 30
         years of creditable service officers retiring with unreduced benefits are entitled to annual benefits equal
         to 1 85 percent of average highest earnings for four consecutive years times the number of years of
         creditable service The code of the city of Winston-salem established the plan, which is similar to the
         north carolina local Governmental employees’ Retirement system, and authorizes benefit provision
         and amendments, including post-retirement benefit increases
         Summary of Significant Accounting Policies pension trust fund financial statements are prepared using the
         accrual basis of accounting The defined benefit plan does not issue a stand alone financial report, and it
         is not included in the financial report of another entity member and employer contributions are
         recognized in the period in which the contributions are due Benefits and refunds are recognized when
         due and payable in accordance with the terms of the plan
         investments are reported at fair market value short-term investments are reported at cost, which
         approximates fair market value securities traded on a national exchange are valued at the last reported
         sales price
         Contributions under the code of the city of Winston-salem, contribution requirements of plan
         members and the city are established and may be amended members are required to contribute 6
         percent of their salary and contributions by the city are based upon annual actuarial studies The city is
         responsible for the payment of administrative expenses of the plan as additional contributions
         in 1992, north carolina municipal leasing corporation issued certificates of participation of which a
         portion of the proceeds were used to fully fund this plan that year The certificates of participation are


80              city oF Winston-sAlem
recorded as a liability in the post-employment trust fund in exhibit 9 of the financial section The
purpose of the financing was to fully fund post-retirement benefits of the city and thereby lower the
annual employee benefit costs
in 2008, the city entered into a trust agreement with u s Bank national Association to establish
an irrevocable trust for post-employment benefits including the Winston-salem police officers’
Retirement Fund
Annual Pension Cost and Net Pension Obligation The annual required contribution for the current year
was determined as part of the January 1, 2007, actuarial valuation using the projected unit credit
method significant actuarial assumptions include (a) projected salary increases of 2 5 percent,
compounded annually, attributable to inflation, (b) additional projected annual salary increases of
4 percent, (c) annual post-retirement benefit increase of 2 5 percent, and (d) an average rate of return
on investment of present and future assets of 9 percent Assets of the plan for actuarial valuation are
reported at market value At January 1, 2009, the plan had an actuarially determined unfunded accrued
liability of $43,153,923, which reflects a change in asset valuation to a five year smoothed market value
method without phase-in The accrued liability is being amortized over 30 years using the level dollar
closed method The plan at June 30, 2009 does not have a net pension obligation
Funding Status and Funding Progress At January 1, 2009, the most recent actuarial valuation date, the plan
was 66 83 percent funded The actuarial accrued liability for benefits was $130,099,380, and the actuarial
value of assets was $86,945,457, resulting in an unfunded actuarial accrued liability (uAAl) of
$43,153,923 The covered payroll of the plan was $24,610,353, and the ratio of the uAAl to the covered
payroll was 175 35 percent
The schedule of funding progress, presented as required supplementary information following the notes
to the financial statements, presents multiyear trend information about whether the actuarial value of
plan assets are increasing or decreasing over time relative to the actuarial accrued liability of benefits
Winston-Salem Police Officers’ Separation Allowance is a single-employer, defined
benefit plan, established by the state of north carolina in 1987 for all local law enforcement officers
The monthly benefit is paid by the city to officers retired under the Winston-salem police officers’
Retirement system or the north carolina local Governmental employees’ Retirement system until
age 62 The benefit is 85 percent of the annual equivalent of the most recent base rate of compensation
times the years of creditable service At June 30, 2009, the plan has 580 participants consisting of 75
retirees currently receiving benefits and 505 active employees The city uses a pension trust fund to
account for the benefits of the plan
Summary of Significant Accounting Policies Financial statements are prepared using the accrual basis of
accounting The defined benefit plan does not issue a stand alone financial report, and it is not included
in the financial report of another entity employer contributions are recognized in the period in which
the contributions are due Benefits are recognized when due and payable in accordance with the terms
of the plan investments are reported at fair market value short-term investments are reported at cost,
which approximates fair market value securities traded on a national exchange are valued at the last
reported sales price
Contributions Benefit provisions are established and may be amended by the state of north carolina
city contributions are based upon annual actuarial studies Administrative expenses are funded by
additional city contributions
in 1992, north carolina municipal leasing corporation issued certificates of participation of which a
portion of the proceeds were used to fully fund this plan that year The certificates of participation are
recorded as a liability in the post-employment trust fund in exhibit 9 of the financial section The
purpose of the financing was to fully fund post-retirement benefits of the city and thereby lower the
annual employee benefit costs


                                                            2009 AnnuAl FinAnciAl RepoRt
                                                                                                             81
     in 2008, the city entered into a trust agreement with u s Bank national Association to establish an
     irrevocable trust for post-employment benefits including the Winston-salem police officers’ separation
     Allowance Fund
     Annual Pension Cost and Net Pension Obligation The annual required contribution for the current
     year was determined as part of the January 1, 2007, actuarial valuation using the projected unit credit
     method significant actuarial assumptions include (a) projected salary increases of 2 5 percent,
     compounded annually, attributable to inflation, (b) additional projected annual salary increases of
     4 percent, (c) no post-retirement benefit increases, and (d) an average rate of return on investment
     of present and future assets of 9 percent Assets of the plan for actuarial valuation are reported at fair
     market value At January 1, 2009, the plan had an actuarially determined unfunded accrued liability
     of $3,208,307 which reflects a change in asset valuation to a five year smoothed market value method
     without phase-in The accrued liability is being amortized over 30 years using the level dollar closed
     method The plan at June 30, 2009, does not have a net pension obligation
     Funding Status and Funding Progress At January 1, 2009, the most recent actuarial valuation date, the plan
     was 75 80 percent funded The actuarial accrued liability for benefits was $13,257,200, and the actuarial
     value of assets was $10,048,893, resulting in an unfunded actuarial accrued liability (uAAl) of
     $3,208,307 The covered payroll of the plan was $24,610,353, and the ratio of the uAAl to the covered
     payroll was 13 04 percent
     The schedule of funding progress, presented as required supplementary information following the notes
     to the financial statements, presents multiyear trend information about whether the actuarial value of
     plan assets are increasing or decreasing over time relative to the actuarial accrued liability of benefits
     Supplementary information
      Three–year Trend Information
                                                                                Annual Pension       Percentage of          Net Pension
                                                                 Year Ending      Cost (APC)        APC Contributed          Obligation
      Winston-Salem Police Officers’ Retirement Plan              6/30/09        $ 4,977,305                 100%              $     0
                                                                  6/30/08           5,149,579                 100                    0
                                                                  6/30/07           4,146,653                 100                    0

      Police Officers’ Separation Allowance                       6/30/09         $ 646,354                  100%              $     0
                                                                  6/30/08            682,162                   100                   0
                                                                  6/30/07          1,033,887                   100                   0


     The following are financial statements for the Winston-salem police officers’ Retirement system and the
     Winston-salem separation Allowance Funds included as Fiduciary Funds in exhibits 9 and 10 at June 30, 2009:

      Statement of Net Assets
                                                                                  Winston-Salem Police           Winston-Salem Separation
      June 30, 2009                                                            Officers’ Retirement System              Allowance
      Assets
       Cash and cash equivalents                                                    $ 61,864,548                      $ 6,788,981
      Accounts receivable, net of allowance for uncollectibles                            18,637
        Total assets                                                                  61,883,185                         6,788,981
      Net Assets
       Held in trust for pension benefits                                           $ 61,883,185                      $ 6,788,981




82            city oF Winston-sAlem
   Statement of Changes in Net Assets
                                                                      Winston-Salem         Winston-Salem
                                                                       Police Officers’      Separation
   For year ended June 30, 2009                                      Retirement System        Allowance
   Additions
   Contributions
    Employer                                                              $ 5,001,870            $ 646,354
    Plan members                                                            1,495,884
    Other                                                                          46
     Total contributions                                                    6,497,800              646,354
   Investment loss
    Net appreciation in fair value                                       (17,181,949)           (2,070,488)
    Interest and dividends                                                  1,807,467              184,212
     Total investment loss                                               (15,374,482)           (1,886,276)
    Less investment expense                                                   409,568               48,628
     Net investment loss                                                 (15,784,050)           (1,934,904)
      Total additions                                                      (9,286,250)          (1,288,550)
   Deductions
   Benefits                                                                 7,095,194            1,225,845
   Refund of contributions                                                     98,727
   Administrative expense                                                      40,529                11,863
    Total deductions                                                        7,234,450            1,237,708
     Net decrease                                                        (16,520,700)           (2,526,258)
   Net assets – beginning                                                 78,403,885             9,315,239
   Net assets – ending                                                   $ 61,883,185           $ 6,788,981




B. other postemployment Benefits (opeB)
  healthcare and death Benefits
  Plan Description under a city council resolution dated september 9, 1991, the city of Winston-salem
  provides healthcare and death benefits as a single-employer defined benefit plan to cover retirees of the
  city who have at least fifteen years creditable service and retire from the city of Winston-salem The
  city pays a $2,000 death benefit and contributes a maximum of $2,400 annually towards the retiree’s
  healthcare premium Retirees participate in the city’s healthcare program until age 65, when they are
  eligible to participate in the city’s medicare supplemental plan The healthcare premium for active
  employees and retirees under age 65 is a blended rate reflecting costs for both active and retired
  employees dependents of retirees may participate in the city’s group health plan by paying premiums
  that vary depending upon their type of coverage The city council may amend the benefit provisions
  A separate report was not issued for the plan At January 1, 2009, the plan had 3,387 participants,
  consisting of 2,339 active and vested terminated employees and 1,048 retirees
  Funding Policy The city council established the contribution requirements of plan members and may
  be amended by the city council The current annual required contribution is 5 95 percent of annual
  covered payroll For the current year, the city contributed $6,348,619 or 6 17 percent of annual covered
  payroll The city of Winston-salem is self insured contributions were made by employees for
  $1,609,389 for health care premiums The city’s obligation to provide healthcare and death benefits may
  be amended by city council




                                                              2009 AnnuAl FinAnciAl RepoRt
                                                                                                              83
     Annual OPEB Cost and Net OPEB Obligation The city’s annual other post-employment benefit cost is
     calculated based on the annual required contribution, an amount actuarially determined in accordance
     with the parameters of GAsB statement 45 The annual required contribution represents a level of
     funding that, if paid on an ongoing basis is projected to cover normal cost each year and amortize any
     unfunded actuarial liabilities over a period not to exceed thirty years
     The city’s annual opeB cost, the percentage of annual opeB cost contributed, and the net opeB
     obligation is:

                                                               Percentage of Annual OPEB
          For Year End June 30         Annual OPEB Cost             Cost Contributed          Net OPEB Obligation
      2009                                $ 6,125,900                       100%                      $0
      2008                                  6.984,907                         100                      0

     Summary of Signficant Accounting Policies post-employment trust fund financial statements are prepared
     using the accrual basis of accounting member and employer contributions are recognized in the period
     in which the contributions are due Benefits and refunds are recognized when due and payable in
     accordance with the terms of the plan The actuarial methods and assumptions used include techniques
     that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the
     actuarial value asset, consistent with the long-term perspective of the calculations investments are
     reported at fair market value short-term investments are reported at cost, which approximates fair
     market value securities traded on a national exchange are valued at the last reported sales price
     Administration costs are financed through investment earnings
     in 1992, north carolina municipal leasing corporation issued certificates of participation of which a
     portion of the proceeds were used to fully fund this plan that year The certificates of participation are
     recorded as a liability in the post-employment benefits trust fund in exhibit 9 of the financial section
     The purpose of the financing was to fully fund post-retirement benefits of the city and thereby lower
     the annual employee benefit costs
     in 2008, the city entered into a trust agreement with u s Bank national Association to establish an
     irrevocable trust for post-employment benefits including the other post-employment benefits
     Funded Status and Funding Progress As of January 1, 2009, the most recent actuarial valuation date, the
     plan was 49 55 percent funded The actuarial accrued liability for benefits was $77,583,627, and the
     actuarial value of assets was $38,439,389, resulting in an unfunded actuarial accrued liability (uAAl)
     of $39,144,238 The covered payroll (annual payroll of active employees covered by the plan) was
     $102,898,538, and the ratio of uAAl to the covered payroll was 38 04 percent
     Actuarial valuations of an onging plan involve estimates of the value of reported amounts and
     assumptions about the probability of occurrence of events far into the future examples include
     assumption about future employment, mortality, and the healthcare cost trend Amounts determined
     regarding the funded status of the plan and the annual required contributions of the employer are
     subject to continual revision as actual results are compared with past expectations and new estimates
     are made about the future The schedule of funding progress, presented as required supplementary
     information following the notes to the financial statements, presents information about the actuarial
     value of plan assets and the actuarial accrued liabilities for benefits
     Acturial Methods and Assumptions projections of benefits for financial reporting purposes are based on
     the substantive plan (the plan as understood by the employer and the plan members) and include the
     types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs
     between the employer and plan members to that point The actuarial methods and assumptions used
     include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued
     liabilities and the actuarial value of assets, consistent with the long-term prospective of the calculations



84           city oF Winston-sAlem
in the January 1, 2009, actuarial valuation, the projected unit credit method was used The actuarial
assumptions included a 7 5 percent rate of return (net of administrative expenses), which is the expected
long-term investment returns on plan assets calculated based on the funded level of the plan at the
valuation date The medical cost trend rate varied between 9 0 and 5 0 percent Both rates included a 3 0
percent inflation assumption The actuarial value of assets was determined using the market value of
investments The uAAl is being amortized as a level dollar amount on an open basis over thirty years
The following are financial statements for the post-employment Benefits trust Funds included as
Fiduciary Funds in exhibits 9 and 10 at June 30, 2009:
Statement of Net Assets
                                                                                        Post-employment
June 30, 2009                                                                          Benefits Trust Funds
Assets
 Cash and cash equivalents                                                                 $ 41,839,580
 Unamortized financing costs                                                                     57,758
 Total assets                                                                                41,897,338
   Liabilities
Liabilities
Accounts payable                                                                                 17,793
Accrued payroll                                                                                     527
Accrued vacation                                                                                  2,030
 Deferred revenue                                                                               192,863
 Contracts payable                                                                           25,000,000
 Total liabilities                                                                           25,213,213
Net Assets
 Held in trust for other purposes                                                          $ 16,684,125

Statement of Changes in Net Assets
                                                                                        Post-employment
For year ended June 30, 2009                                                           Benefits Trust Funds
Additions
Contributions
Employer                                                                                     $ 6,348,619
Plan members                                                                                   1,609,389
 Total contributions                                                                           7,958,008
Investment loss
 Net appreciation in fair value                                                              (11,552,919)
 Interest and dividends                                                                         1,159,377
  Total investment loss                                                                      (10,393,542)
 Less investment expense                                                                          276,002
  Net investment loss                                                                        (10,669,544)
   Total additions                                                                             (2,711,536)
Deductions
Benefits                                                                                       5,749,724
Administrative expense                                                                           118,088
Interest and fiscal expense                                                                      722,203
Amortization of financing costs                                                                   16,905
   Total deductions                                                                            6,606,920
   Net decrease                                                                               (9,318,456)
Net assets – beginning                                                                       26,002,581
Net assets – ending                                                                         $ 16,684,125




                                                           2009 AnnuAl FinAnciAl RepoRt
                                                                                                              85
     C. deferred Compensation
       The city offers a deferred compensation plan pursuant to section 457 of the internal Revenue code All
       city employees are eligible to participate and may defer until future years up to 25 percent of their gross
       income with a maximum of $16,500 per year The compensation deferred is not available to employees
       until termination, retirement, death, or an unforeseeable emergency
       during 1998, the plan assets were placed in trust for the exclusive benefit of participants and beneficiaries
       as required by section 457 of the internal Revenue code and therefore are no longer included in the
       city’s financial statements

     d. Joint ventures and Jointly governed organizations
       Joint Ventures. The city of Winston-salem, Village of clemmons, town of Kernersville, town of
       lewisville, town of oak Ridge, town of Bermuda Run and town of yadkinville jointly appoint the nine
       member triad municipal Alcoholic Beverage control Board, which operates 14 liquor stores in Forsyth
       county, davie county, Guilford county and yadkin county north carolina General statute 18B-805
       requires the triad municipal Alcoholic Beverage control Board to distribute its net income to the seven
       municipalities who appoint the Board and Forsyth county during fiscal year 2009, the city received
       $970,526 in distributed net income The participating governments do not have equity interest in the
       joint venture The city does not have financial responsibility for the triad Board and is not held
       responsible for its debts Audited financial statements for the triad municipal Alcoholic Beverage
       control Board are available through their administrative offices at 3127 starlight drive, Winston-salem,
       north carolina 27107-4141
       The governing boards of the cities of Winston-salem, Burlington, Greensboro, and high point
       established the piedmont Authority of Regional transportation under the Regional public transportation
       Authority Act, north carolina General statutes chapter 160A, Article 27 The purpose of the authority
       is to promote the development of sound transportation systems that provide transportation choices for
       citizens in its territorial jurisdiction The participating governments do not have an equity interest in the
       joint venture The city of Winston-salem does not have financial responsibility for the authority and is
       not responsible for its debts Audited financial statements for the piedmont Authority for Regional
       transportation (“pARt”) are available through the pARt Administrative office, 7800 Airport center
       drive, suite 102, Greensboro, nc 27409
       Jointly Governed Organizations. The city, in conjunction with five other counties and twenty-
       one municipalities, formed the northwest piedmont council of Governments to enhance and promote
       the potential of the region and 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 $36,352 to the council during the fiscal year ended June 30, 2009

     e. Closure and postclosure Care Costs
       state and federal laws and regulations require that the city place a final cover on the hanes mill Road
       sanitary landfill and the old salisbury Road construction and demolition landfill as each cell is closed
       and perform certain maintenance and monitoring functions at the site for 30 years after closure in
       addition to operating expenses related to current activities of the landfill, an expense provision and
       related liability are being recognized based on future closure and postclosure care costs that will be
       incurred during operation and will continue after the date the landfill no longer accepts waste
        The city is required by state and federal laws and regulations to demonstrate financial assurance for
       closure and postclosure care The city is in compliance with the requirement and has established a capital
       reserve fund for these purposes The capital reserve fund of $11,879,117 at June 30, 2009, is reported as
       restricted assets on the balance sheet of the solid waste disposal fund Recognition of these reserves for
       landfill closure and postclosure costs is based on 100 percent usage of the hanes mill Road sanitary

86            city oF Winston-sAlem
  landfill for the unlined section of the landfill which closed in June 1997 cell one, two and three of the
  lined section was closed in July of 2005 phase one of the expansion area is currently under construction
  and recognition of reserves is based on 44 59 percent usage The estimated total current cost for hanes
  mill Road landfill, $20,073,387 and old salisbury Road, $7,462,413, of the landfill closure and
  postclosure care is based on the amount that would be paid if all equipment, facilities, and services
  required to close, monitor, and maintain the landfill were acquired as of June 30, 2009 however, the
  actual cost may be higher due to inflation, changes in technology, or changes in landfill laws and
  regulations old salisbury Road landfill is currently under construction and recognition of reserves is
  based on 100 percent usage of phases one, two, three and 40 63 percent usage of phases four, five and six

F. risk management
  The city has employment benefit funds for health benefits, workers’ compensation, and post-
  employment benefit trust funds for retired employees’ life and health insurance Reserves are established
  for reported claims and claims incurred but not reported for each fiscal year
  in addition, the city contracts with a not-for-profit corporation, Risk Acceptance management
  corporation (RAmco), for services related to settlement of general and automotive liability, and certain
  tort claims and reserve funding for claims under the contract, the city made an annual basic payment in
  2009 of $999,740 to RAmco for normal claim payments
  RAmco is responsible for the administration of all claims for damages against the city, which are not
  covered by commercial insurance, subject to a $1 million limit per occurrence in July 1994, the city
  transferred the balance of its self-funded excess liability fund to RAmco for investment and together
  with any investment earnings thereon, to pay claims in excess of $1 million but less than $3 million
  should there be a claim or claims in excess of $1 million for which payment has to be made, the payment
  will be made by RAmco from these funds traditional insurance contracts cover property damage, loss
  of money, and situational risks
  The city carries flood insurance through the national Flood insurance plan (nFip) This insurance
  provides $1,000,000 per incident and annual aggregate coverage for Flood Zones prefixed as “B”;
  $25,000,000 annual aggregate coverage for all other Flood Zones, except that we do not have coverage for
  Flood Zones designated as “A” and “V”
  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, assistant
  finance officers, investment analyst and city revenue collector are individually bonded for $500,000 The
  remaining employees that have access to funds are bonded under a blanket bond for $500,000
  claims payable recorded in the general purpose financial statements are composed of the self-insurance claims
  for health benefits, workers compensation, and retired health insurance and RAmco claims for damages

  Changes in Claims Payable
                                                                        2009                    2008
  Claims payable July 1                                               $ 7,607,934             $ 7,682,645
  Claims paid                                                          (8,317,782)             (9,171,818)
  New claims and changes in claim estimates                             7,347,729               9,097,107
  Claims payable June 30                                              $ 6,637,881             $ 7,607,934

  Employment Benefit Funds                                            $ 5,705,396             $ 6,262,904
  Risk Acceptance Management Corporation                                  932,485               1,345,030
                                                                      $ 6,637,881             $ 7,607,934




                                                               2009 AnnuAl FinAnciAl RepoRt
                                                                                                                  87
     Contingent Liabilities and Commitments
     1. Claims and Legal Actions
         Various claims and legal actions are pending against the city, and it is not possible at this time to
         predict their outcome however, in the opinion of management and the city attorney, ultimate
         resolutions will not have a material, adverse impact on financial position
         The city has federal and state grants for specific purposes that are subject to annual audit and other
         periodic review by grantor agencies such reviews could result in requests for reimbursement to the
         grantor agencies for costs which may be disallowed as appropriate expenditures under grant terms
         city management believes disallowances, if any will be insignificant
     2. Commitments
         The city issued $7,000,000 variable rate demand revenue bonds, series 1997A and $900,000 taxable
         variable rate demand revenue bonds, series 1997B for multi-family housing project in the ladera
         crest estates development The bonds are collateralized by and payable solely from program
         revenues and are not a debt of the city nor an indebtedness within any constitutional or statutory
         debt limitation laws of the state of north carolina
         The city, in 1989, issued $2,975,000 in variable interest rate FhA-insured mortgage revenue
         refunding bonds for a multi-family housing project The refunded bonds were liquidated and the
         new obligation is payable exclusively from the income, proceeds, and revenues of the project The
         city provided the liquidity facility for the demand bonds The standby purchase agreement has a
         contingent liability in an amount of not more than $630,000 The FhA guarantee and the property
         provide security for the contingent liability


     Subsequent event Note
     on July 6, 2009, the city council of the city of Winston-salem adopted a resolution which authorizes the
     execution of a lease of city-owned property to Brookstown development partners, llc; sports
     menagerie, llc; sports menagerie corporation; sports menagerie stadium, llc; and W-s dash partner,
     llc The city will lease its ownership interest in the city-owned property The annual appropriation and
     budget ordinances were amended to authorize the appropriation of $12 7 million from a special
     obligation bond that would finance the city’s purchase of the land under the stadium ($8 million) and
     construction cost of the stadium ($4 7 million) The city expects to issue the special obligation bond in
     the fall of 2009




88         city oF Winston-sAlem
Required Supplementary Information




                          2009 AnnuAl FinAnciAl RepoRt
                                                         89
     City of Winston-Salem, North Carolina
     Schedule of Funding progress
                                                                                                                                          exhibit 11

     Winston-Salem Police Officers’ Retirement
                                                 Actuarial Accrued         Unfunded                                                       UAAL as a
                                                   Liability (AAL)       (Overfunded)                                                    Percentage of
     Actuarial Valuation Actuarial (1) Value      Projected Unit          AAL (UAAL)                                  Covered           Covered Payroll
            Date           of Assets (a)             Credit (b)              (b-a)          Funded Ratio a/b          Payroll (c)           ([b-a]/c)
          1/1/2009            $ 86,945,457        $ 130,099,380          $ 43,153,923             66.83             $ 24,610,353            175.35
          1/1/2008              86,668,120          125,530,382            38,862,262             69.04               24,341,160            159.66
          1/1/2007              80,064,171          115,147,219            35,083,048             69.53               21,562,998            162.70
          1/1/2006              71,684,566          106,841,281            35,156,715             67.09               20,153,766            174.44
          1/1/2005              73,000,535          102,279,264            29,278,729             71.37               19,847,353            147.52
          1/1/2004              75,264,668           99,703,966            24,439,298             75.49               19,915,189            122.72



     Police Officers’ Separation Allowance
          1/1/2009            $ 10,048,893         $ 13,257,200           $ 3,208,307             75.80             $ 24,610,353             13.04
          1/1/2008              10,508,386           13,142,752             2,634,366             79.96               24,341,160             10.82
          1/1/2007               9,884,139           12,019,388             2,135,249             82.23               21,562,998              9.90
          1/1/2006               9,002,467           11,384,088             2,381,621             79.08               20,153,766             11.82
          1/1/2005               8,928,306           11,279,086             2,350,780             79.16               19,847,353             11.84
          1/1/2004               8,960,405           11,240,606             2,280,201             79.71               19,915,189             11.45


     Post-employment Benefits
          1/1/2009            $ 38,439,389         $ 77,583,627          $ 39,144,238             49.55            $ 102,898,538             38.04
          1/1/2008              34,832,232           79,060,353            44,228,121             44.06               97,937,975             45.16


     (1) Results reflect a change in asset valuation method to a five-year smoothed market value method without phase-in.




90                      city oF Winston-sAlem
                                                                                   The accompanying notes are an integral part of the financial statements.
City of Winston-Salem, North Carolina
Schedule of employer Contributions
                                                                                                                               exhibit 12

                                                                           Employer Contributions
                          Winston-Salem Police Officers’
                                 Retirement Plan                   Police Officers’ Separation Allowance      Post-employment Benefits
                                               Annual                                        Annual                             Annual
     Fiscal Year          Required           Percentage                Required            Percentage       Required          Percentage
       Ending            Contribution        Contributed            Contribution           Contributed     Contribution       Contributed
       2009              $4,299,153             100%                   $570,086            100%            $6,125,900          100%
       2008               4,167,474             100                     555,382            100              6,984,907          100
       2007               3,455,026             100                     895,343            100
       2006               3,012,374             100                     850,280            100
       2005               1,932,891             100                     755,776            100
       2004               1,087,426             100                     676,691            100




The accompanying notes are an integral part of the financial statements.
                                                                                         2009 AnnuAl FinAnciAl RepoRt
                                                                                                                                            91
92   city oF Winston-sAlem
93
94
95
96
~o/CW~-$~, ~~
S1j~ $~ CfltUUt
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
For the Fiscal Year Ended June 30, 2009                                                                            Exhibit 13


                                                                                                               Variance
                                                                                                               Favorable
                                                                         BudGet             Actual            (Unfavorable~
Revenues
 Property taxes                                                      $     9,554,090    $    9,704,258    $         150,168
 AB.C. revenue allocations                                                   331,540           323,509               (8,031)
 Capital lease charges                                                       600,000           600,000
 Investment income (loss)                                                  2,000,000          ~603,570)           (2,603,570)

  Total revenues                                                          12,485,630        10,024,197            (2,461,433)

Expenditures
 Principal retirement                                                      7,872,930         7,872,920                   10
 Capital lease charges                                                     1,834,030         1,834,024                    6
 Interest                                                                  7,867,860         7,831,701               36,159
 Fiscal charges                                                              108,000           107,814                  186
 Other                                                                       129,970           129,962                    8

  Total expenditures                                                      17,812,790        17,776,421               36,369

   Excess of expenditures over revenues                                   (5,327,160)       (7,752,224)           (2,425,064)

Other Financing Sources (Uses)
 Proceeds of refunding bonds                                                                 8,435,000             8,435,000
 Premium on refunding bonds                                                                    642,702               642,702
 Payment to refunded bond escrow agent                                                      (9,072,900)           (9,072,900)
 Transfers in
  General fund                                                               623,860           623,860
  Capital projects fund                                                    2,017,390         2,017,390
  Sales tax fund                                                           4,936,290         4,512,538             (423,752)
 Transfers out
  Capital projects fund                                                   (2,017,390)       (2,017,390)
  Transit authority fund                                                    ~111,600)          (91,587~              20,013

  Total other financing sources, net                                       5,448,550         5,049,613             (398,937)

   Excess of revenues and other fmancing
    sources over expenditures and other
    fmancing uses                                                            121,390        (2,702,611)           (2,824,001)

Fund balance July 1                                                        9,768,793         9,768,793

Fund balance June 30                                                $      9,890,183    $    7,066,182    $       (2,824,001)




                                                               97
~o/CW~-Salemt, ~~
~~~CJtuUt
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
From Inception and for the Fiscal Year Ended June 30, 2009                                                              Exhibit 14


                                                                                                    Total           Project
                                                    Current Year           Prior Years             to Date       Authorizations

Revenues
 Intergovernmental                                  $      709,648     $        5,801,534    $      6,511,182    $    31,688,943
 Investment income                                         123,941                                    123,941          1,366,900
 Capital lease charges                                   2,831,044                                  2,831,044          5,152,740
 Other                                                   2,215,069              5,822,913           8,037,982          9,282,478

   Total revenues                                         5,879,702            11,624,447          17,504,149         47,491,061

Expenditures
 General government                                      5,245,524             12,004,692         17,250,216          23,844,996
 Public protection                                       9,224,970             19,562,080         28,787,050          39,052,767
 Transportation                                         10,161,304             30,225,078         40,386,382          84,969,617
 Culture and recreation                                  4,065,295              9,586,827         13,652,122          19,369,380
 Community development                                   6,310,470             39,727,069         46,037,539          49,900,314
 Debt Service
  Principal retirement                                    1,958,480                                 1,958,480           3,658,480
  Interest and fiscal charges                             3,598,188                                 3,598,188           6,832,160
   Total expenditures                                   40,564,231            111,105,746        151,669,977         227,627,714

     Excess of expenditures over revenues               (34,684,529)          (99,481,299)       (134,165,828)       (180,136,653)

Other Financing Sources (Uses)
 Issuance of special obligation bonds                                           6,000,000          6,000,000            6,000,000
 Issuance of general obligation bonds                                          68,474,798         68,474,798           78,974,793
 Issuance of certificates of participation                9,911,299            19,910,797         29,822,096           48,625,288
 Issuance of installment purchase contract                                     23,500,000         23,500,000           23,500,000
 Transfers in                                           14,219,695             35,574,580         49,794,275           46,636,195
 Transfers out                                          (6,854,727)            ~9,240,4062        ~16,095,133)        (15,152,8222
   Total other financing sources, net                   17,276,267            144,219,769        161,496,036         188,583,454

     Excess of revenues and other financing
      sources over expenditures
      and other uses                                    (17,408,262)           44,738,470         27,330,208     $      8,446,801

Fund balance July 1                                     74,229,749

Budgeted on an annual basis                                                    29,491,279         29,491,279

Fund balance June 30                               $    56,821,487     $       74,229,749    $    56,821,487




                                                                98
~af CWin&to#v-3a1urv, ~ ~
~~CJuruJs;
Water and Sewer Utility Fund - Schedule of Revenues, Expenditures, and Transfers - Budget (Non-GAAP Basis) and Actual
For the Fiscal Year Ended June 30,2009                                                                                Exhibit 15

                                                                                                                       Variance
                                                                                                                       Favorable
                                                                                 Budget               Actual         (Unfavorable)
Operating Revenues
 Sales
   Water                                                                      $ 35,040,410      $ 31,399,333         $ (3,641,077)
   Sewer                                                                        24,821,720        23,831,330             (990,390)
   Industrial waste surcharge                                                    2,070,710         1,885,684             (185,026)

     Total sales                                                                61,932,840          57,116,347         (4,816,493)

 Charges for services
  New connections                                                                   500,000             345,431          (154,569)
  Special area and privilege charges                                              1,300,000           1,728,474           428,474
  Main line capital cost revenue                                                    400,000             103,700          (296,300)

     Total charges for services                                                   2,200,000           2,177,605           (22,395)

 Other                                                                            1,905,000           2,333,124           428,124

     Total operating revenues                                                   66,037,840          61,627,076         (4,410,764)

Operating Expenditures
 Personal services                                                              17,510,810          16,466,384          1,044,426
 Maintenance and operations                                                     26,028,328          20,592,699          5,435,629
 Capital outlay                                                                     17,823                                 17,823

     Total operating expenditures                                               43,556,961          37,059,083          6,497,878

         Operating income                                                       22,480,879          24,567,993          2,087,114

Nonoperating Revenues (Expenditures)
 Investment loss                                                                  1,700,000          (5,984,218)       (7,684,218)
 Proceeds from sale of assets                                                                              3,050            3,050
 Damage settlements                                                                                       87,050           87,050
 Interest and fiscal charges                                                    (13,897,260)        (13 ,075 ,927)        821,333
 Principal retirement                                                           (11,448,430)        (11,393,050)           55,380

     Total nonoperating expenditures, net                                       (23,645,690)        (30,363,095)       (6,717,405)

         Loss before capital contributions and transfers                         (1,164,811)         (5,795,102)       (4,630,291)

Capital Contributions                                                                                 5.751,888         5,751,888

Transfers Out
 General fund                                                                       (70,960)              (5,660)          65.300

      Change in net assets - modified accrual basis                          $ (1,235,771)      $       (48,874)     $ 1,186,897

Reconciliation of Modified Accrual Basis to Full Accrual Basis

Change in Net Assets - Modified Accrual Basis                                                   $       (48,874)

 Depreciation                                                                                       (19,752,602)
 Unamortized financing costs                                                                           (625,981)
 Principal retirement                                                                                11,393,050
 Book value of disposed assets                                                                       (1,901,696)
 Interest expense, net of investment income,
  capitalized on construction projects                                                                  701,852

Change in Net Assets - Full Accrual Basis                                                       $ (10,234,251)
                                                                 99
100
~ofCW~-Sa/.un;, ~~
~~ CJtutt141
Solid Waste Disposal Fund - Schedule of Revenues, Expenditures, and Transfers - Budget (Non-GAAP Basis) and Actual
For the Fiscal Year Ended June 30,2009                                                                             Exhibit 16


                                                                                                                Variance
                                                                                                                Favorable
                                                                            Budget              Actual        (Unfavorable)
Operating Revenues
 Charges for services                                                  $    11,969,860      $   10,612,828    $   (1,357,032)

Operating Expenditures
 Personal services                                                           1,837,580          1,795,834            41,746
 Maintenance and operations                                                  8,309,597          5,724,683         2,584,914

  Total operating expenditures                                              10,147,177          7,520,517         2,626,660

    Operating income                                                         1,822,683          3,092,311          1,269,628

Nonoperating Revenues (Expenditures)
 Intergovernmental revenue                                                    500,290              536,726            36,436
 Investment loss                                                              700,000           (1,492,378)       (2,192,378)
 Proceeds from sale of assets                                                                          600               600
 Interest and fiscal charges                                                  (711,760)           (653,742)           58,018
 Principal retirement                                                       (1,975,640)         (1,785,162)          190,478

  Total nonoperating expenditures, net                                      (1 ,487,11 0)       (3,393,956)       (1,906,846)

    Loss before transfers                                                     335,573             (301,645)         (637,218)

Transfers Out
 General fund                                                               (2,900,010)         (2,847,285)          52,725

    Change in net assets - modified accrual basis                       $   (2,564,437)     $   (3,148,930)   $     (584,493)


Reconciliation of Modified Accrual Basis to Full Accrual Basis

Change in Net Assets - Modified Accrual Basis                                               $   (3,148,930)

 Depreciation                                                                                   (1,382,451)
 Amortization of financing costs                                                                   (36,989)
 Principal retirement                                                                            1,785,162
 Interest expense, net of investment income,
   capitalized on construction projects                                                            29,777

Change in Net Assets - Full Accrual Basis                                                   $   (2,753,431)




                                                             101
102
102
                                  Special Revenue Funds
The community development special revenue fund provides accountability for grants from
the United States Department of Housing and Urban Development. These revenues are
restricted to objectives of community development programs within specific areas of the city.

The grants fund centralizes the accounting for other activities funded by federal, state, and/ or
intergovernmental aid.

The economic and housing development fund centralizes the accounting for city initiatives in
downtown revitalization, economic development incentive funds and housing.

The gasoline tax fund is established to account for the state-shared gasoline tax which is
restricted to maintenance of local streets and roads.

The mass transit tax fund is established to account for the accumulation of the voter-
approved, special mass transit property tax. The property tax proceeds are transferred to the
transit authority fund as required for the local share of operating assistance and capital
improvements or acquisitions.

The sales tax fund is established to account for the accumulation of a part of the city's sales
tax proceeds. The city has designated these resources for general debt service and housing
programs.

The occupancy tax fund is established to account for the city's approximate one-sixth share of
the Forsyth County's 6% occupancy tax on the rental of hotel/motel accommodations.

The cable franchise fee fund is established to account for the annual 5% franchise fee
assessed on the gross receipts of the cable television companies that use the city's right-of-
ways. In addition, the fund accounts for contributions from the cable companies that provide
operating and capital support to pubic access, education and governmental channels.

The emergency telephone fund is established to account for revenues and expenses
associated with implementing the E-911 system. Monies from the surcharge (at an adopted
rate of 60 cents per line) can only be used for the lease purchase or maintenance of emergency
telephone equipment, including necessary computer hardware, software, and database
provisioning for a 911 system.



                                      Permanent Fund
The cemetery perpetual care fund accounts for endowment funds established to provide
income for landscaping and grounds maintenance of the City's cemeteries.




                                              103
~ofCW~-$o1env, ~~
~~~$Iuuw
Nonmajor Governmental Funds
June 30, 2009


                                                                                             Special Revenue
                                              Community                               Economic and                          Mass
                                              Development                               Housing          Gasoline          Transit
                    Assets                       Fund              Grants             Develoement          Tax              Tax

Cash and cash equivalents                 $         36,710    $         602,541   $       16,562,750   $   2,630,086   $   2,341,816

Receivables, net of allowance
for uncollectibles
 Taxes                                                                                                                        78,454
 Accounts
 Loans                                          20,188,631                                11,874,171

   Total receivables                            20,188,631                                11,874,171                          78,454

Due from other governments                         453,147              681,507             382,266

Inventories                                                                                 565,051

     Total assets                         $     20,678,488    $    1,284,048      $      29,384,238    $   2,630,086   $   2,420,270


        Liabilities and Fund Balance
Liabilities
 Accounts payable                         $        289,307    $         102,179   $         913,612    $               $       9,461
 Accrued payroll                                                                                702
 Due to other funds                                200,500
 Loan escrow                                                                                   6,598
 Deferred revenue
  Taxes                                                                                                                       78,454
  Loans                                         20,188,631                                11,874,171
 Advances from other governments                       650              106,658                3,950

      Total liabilities                         20,679,088          208,837               12,799,033                          87,915

Fund Balance
  Reserved
   Encumbrances                                                    1,075,211              2,932,918
   Inventories                                                                              565,051
   General governmental
   Public protection
   Transportation                                                                                          2,630,086       2,332,355
   Community and economic development                                                     12,704,970
   Perpetual care
   State statute                                                                            382,266
  Unreserved, undesignated                            (600)

     Total fund balance (deficit)                     (6002        1,075,211              16,585,205       2,630,086       2,332,355

     Total liabilities and fund balance   $     20,678,488    $    1,284,048      $      29,384,238    $   2,630,086   $   2,420,270




                                                                  104
                                                                                                Exhibit 17


                                                                          Permanent            Total
                                         Cable          Emergency          Cemetery          Nonmajor
                      Occupancy        Franchise        Telephone         Perpetual         Governmental
    Sales Tax            Tax              Fee              Fee              Care               Funds

$                 $      383,686   $      318,323   $    1,308,134    $     1,918,397   $      26,102,443



                                                                                                   78,454
                                                            90,492                                 90,492
                                                                                               32,062,802

                                                            90,492                             32,231,748

      2,604,230                                                                                 4,121,150

                                                                                                  565,051

$     2,604,230   $      383,686   $      318,323   $    1,398,626    $     1,918,397          63,020,392




$                 $       37,500   $                $       23,734    $                 $       1,375,793
                                                                                                      702
                                                                                                  200,500
                                                                                                    6,598

                                                                                                   78,454
                                                                                               32,062,802
                                                                                                  111,258

                          37,500                            23,734                             33,836,107



                          12,500                             5,072                              4,025,701
                                                                                                  565,051
                                          318,323                                                 318,323
                                                         1,279,328                              1,279,328
                                                                                                4,962,441
                         333,686                                                               13,038,656
                                                                            1,918,397           1,918,397
      2,604,230                                             90,492                              3,076,988
                                                                                                     (600 2

      2,604,230          346,186          318,323         1,374,892         1,918,397          29,184,285

$     2,604,230   $      383,686   $      318,323   $    1,398,626    $     1,918,397   $      63,020,392




                                                    105
~·ofCW~-Salemt, ~~
~S~of~,cg~
ruut~~ 'ilUAUt ~~
Nonmajor Governmental Funds
For the Fiscal Year Ended June 30, 2009


                                                                                                         S2ecial Revenue
                                               Community                               Economic and                              Mass
                                               Development                               Housing             Gasoline           Transit
                                                  Fund              Grants             Develo2ment             Tax               Tax
Revenues
 Taxes                                         $                $                  $                     $                  $   3,066,153
 Licenses
 Intergovernmental                                 4,479,309        6,786,209              1,583,475           6,715,621
 Investment income (loss)                                              12,765                325,381             111,897           25,533
 Other                                              994,757           126,733              1,131,275

   Total revenues                                  5,474,066        6,925,707              3,040,131           6,827,518        3,091,686

Expenditures
 Current
  General government                                                      898
  Public protection                                                 1,331,823
  Transportation                                                    1,232,716                                                      68,656
  Culture and recreation                                               65,291
  Community and economic development               4,034,329        4,635,780              4,758,123
 Debt service
  Capital lease charges
  Principal retirement                              332,000
  Interest and fiscal charges                       262,367

   Total expenditures                              4,628,696        7,266,508              4,758,123                               68,656

     Excess of revenues
      over (under) expenditures                     845,370           (340,801)            (1,717,992)         6,827,518        3,023,030

Other Financing Sources (Uses)
 Transfers in                                                          359,566             3,271,047
 Transfers out                                     ~845,368)            (1,960 2           ~2,036,802)        (5,987,363)       (3,434,205)

   Total other financing sources (uses), net       (845,368 2          357,606             1,234,245          ~5,987,363)       (3,434,205)

     Excess of revenues and
      other financing sources over
       (under) expenditures and other uses                2             16,805              (483,747)           840,155          (411,175)

Fund balance July 1                                    (602)          1,058,406           17,068,952           1,789,931        2,743,530

Fund balance (deficit) June 30                 $       (6°°l    $   1,075,211      $      16,585,205     $     2,630,086    $   2,332,355




                                                                106
                                                                                                          Exhibit 18


                                                                                 Permanent              Total
                                           Cable              Emergency           Cemetery            Nonmajor
                       Occupancy         Franchise            Telephone          Perpetual           Governmental
    Sales Tax             Tax               Fee                  Fee                Care                Funds

$ 10,932,732       $      480,226    $                    $                  $                   $       14,479,111
                                            250,000              1,237,871                                1,487,871
                                                                                                         19,564,614
                            8,627             2,118                15,014           (472,035)                29,300
                                                                                                          2,252,765

     10,932,732           488,853           252,118              1,252,885          (472,035)            37,813,661



                                                166                                                           1,064
                                                                  469,054                                 1,800,877
                                                                                                          1,301,372
                                                                                                             65,291
                           88,500                                                                        13,516,732

                                                                   88,752                                   88,752
                                                                                                           332,000
                                                                                                           262,367

                           88,500               166               557,806                                17,368,455


    10,932,732            400,353           251,952               695,079           (472,035)            20,445,206


                                                                                      10,800              3,641,413
    ~11,213,765)         ~400,000)           (9,734~              ~11,540~          ~128,610)           ~24,069,347)


    ~11,213,765)         (400,000)           (9,734   l           ~11,540~           ~117,810)          (20,427,934)



      (281,033)              353            242,218               683,539           (589,845)                17,272

     2,885,263            345,833            76,105               691,353           2,508,242            29,167,013

S    2,604,230     S      346,186    $      318,323       S      1,374,892   S      1,918,397    S       29,184,285
                                                                                                 =======



                                                                     107
 ~o/WI~-S~ ~~
 S~~~~
Community Development Fund - Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
From Inception and for the Year Ended June 30, 2009                                                                     Exhibit 19



                                                                                                       Total          Program
                                                            Current Year          Prior Years         to Date       Authorizations

Revenues
 Intergovernmental                                          $   4,479,309     $ 11,279,031        $ 15,758,340      $ 22,959,985
 Other                                                            994,757        6,289,524           7,284,281         7,665,694

  Total revenues                                                5,474,066           17,568,555        23,042,621       30,625,679

Expenditures
 Community development                                          4,034,329           12,881,319        16,915,648       24,696,789
 Debt Service
  Principal retirement                                            332,000             996,000          1,328,000        1,328,000
  Interest and fiscal charges                                     262,367             872,633          1,135,000        1,150,783

  Total expenditures                                            4,628,696           14,749,952        19,378,648       27,175,572

   Excess of revenues over expenditures                           845,370            2,818,603         3,663,973        3,450,107

Other Financing Uses
 Transfers out
  General fund                                                    (845,368)         (2,819,205)       (3,664,573)      (3,973,107)

   Total other fmancing uses                                      (845,368)         (2,819,205)       (3,664,573)      (3,973,107)

     Excess of revenues over (under)
      expenditures and other uses                                        2               (602)              (600) $      (523,000)

Fund balance July 1                                                   ~602)

Fund balance (deficit) June 30                              $         (600)   $          ~602)    $         (600)




                                                            108
~4CW~-Salenv, ~~
 Speciat~ C;~
Grants Fund - Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
From Inception and for the Year Ended June 30, 2009                                                                     Exhibit 20

                                                                                                        Total        Program
                                                                  Current Year     Prior Years         to Date     Authorizations
Revenues
 Intergovernmental                                               $    6,786,209    $ 5,008,811      $ 11,795,020   $ 20,114,073
 Investment income                                                       12,765        152,219          164,984          163,339
 Other                                                                  126,733        445,711          572,444          693,859

  Total revenues                                                      6,925,707      5,606,741       12,532,448        20,971,271

Expenditures
 General government                                                         898         56,572           57,470           407,940
 Public protection                                                    1,331,823      2,176,122        3,507,945         4,906,324
 Transportation                                                       1,232,716      1,524,772        2,757,488         4,006,750
 Culture and recreation                                                  65,291         83,639          148,930           490,866
 Economic development                                                 4,635,780      1,303,457        5,939,237        12,406,830

  Total expenditures                                                  7,266,508      5,144,562       12,411,070        22,218,710

   Excess of expenditures over                                         (340,801)       462,179          121,378        (1,247,439)
    (under) revenues

Other Financing Sources (Uses)
 Transfers in
  General fund                                                          337,700        630,100          967,800         1,211,955
  Grants fund                                                             1,960          6,984            8,944             8,950
  Mass transit tax fund                                                  10,172          8,977           19,149            19,150
  Cable franchise fee                                                     9,734         20,166           29,900            29,900
 Transfers out
  Grants fund                                                            (1,960)                         (1,960)           (1,966)
  Capital projects fund                                                                (70,000)         (70,000)          (70,000)

   Total other fInancing sources, net                                   357,606        596,227          953,833         1,197,989

     Excess of revenues and other fInancing
      sources over (under) expenditures and other uses                   16,805      1,058,406        1,075,211    $      (49,450)

Fund balance July 1                                                   1,058,406

Fund balance June 30                                             $    1,075,211    $ 1,058,406      $ 1,075,211




                                                              109
~ofCW~-$~,
cew,ofCW~-d~ ~~
dpeelot~ 7J~
$pecial ~ CJ~
Economic and Housing Development Fund - Schedule of Revenues,
Expenditures and Changes in Fund Balance - Budget and Actual
From Inception and for the Year Ended June 30, 2009                                                                       Exhibit 21


                                                                Current            Prior               Total          Program
                                                                 Year              Years              to Date       Authorizations
Revenues
 Intergovernmental                                          $    1,583,475    $    9,664,827     $   11,248,302     $   13,860,420
 Investment income                                                 325,381        11,073,110
                                                                                  1l,073,11O         11,398,491          1,607,000
 Other                                                           1,131,275        30,417,822         31,549,097         21,153,215

  Total revenues                                                 3,040,131        51,155,759         54,195,890         36,620,635

Expenditures
 Current
  Neighborhood stabilization                                                                                             1,575,000
  UDAGloan                                                          67,158         1,475,376          1,542,534          1,879,852
            financing
  Housing fmancing assistance loan                               1,643,529        20,272,099         21,915,628         28,894,949
  Economic development loan                                        150,223         2,088,437          2,238,660          3,076,177
  Economic development project                                   1,082,031         1,668,304          2,750,335          4,024,453
  Mortgage revenue bond                                            144,863           988,603          1,133,466          1,092,570
  Rental rehabilitation                                          1,554,488         1,684,226          3,238,714          3,757,120
  Foreclosed property                                               40,831                               40,831
  Section 108                                                       75,000         6,714,444          6,789,444           7,450,000
 Debt Service
  Principal retirement                                                               835,000            835,000            836,120
  Interest and fiscal charges                                                        129,852            129,852             94,430

  Total expenditures                                             4,758,123        35,856,341         40,614,464         52,680,671

   Excess of revenues over (under)                              (1,717,992)        15,299,418         13,581,426        (16,060,036)
    expenditures

Other Financing Sources (Uses)
 Transfers in
  General fund                                                   1,515,030         5,558,271          7,073,301          7,022,145
  Community development fund                                                         683,371            683,371            683,371
  Economic and housing development fund                                              579,400            579,400            579,400
  Sales tax fund                                                                   8,470,257          8,470,257          8,412,620
  Capital projects fund                                          1,756,017           445,000          2,201,017          2,100,000
 Transfers out
  General fund                                                                       (600,000)          (600,000)          (600,000)
  Debt service fund                                                                  (200,000)          (200,000)          (200,000)
  Economic and housing development fund                                              (541,900)          (541,900)          (541,900)
  Capital projects fund                                         ~2,036,802)
                                                                (2,036,802)       ~12,718,500)
                                                                                  (12,718,500)       (14,755,302)       (14,043,500)

               financing
   Total other fmancing sources, net                             1,234,245          1,675,899         2,910,144          3,412,136

    Excess of revenues and other
     financing sources over (under)
     fmancing
       expenditures and other uses                               (483,747)        16,975,317         16,491,570     S (12,647,900)
                                                                                                                    $

Fund balance July I                                             17,068,952

Budgeted on an annual basis                                                           93,635             93,635

Fund balance June 30                                       $    16,585,205    S
                                                                              $   17,068,952     $   16,585,205




                                                                 110
~4C:W~-$alem;, ~~
$~~CJ~
Gasoline Tax Fund - Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
For the Fiscal Year Ended June 30, 2009                                                                         Exhibit 22




                                                                                                              Variance
                                                                                                              Favorable
                                                                        Bud~et               Actual         (Unfavorable)

Revenues
 Intergovernrnental                                                 $     7,424,870     $     6,715,621     $   (709,249)
 Investment income                                                          100,000             111,897           11,897

   Total revenues                                                         7,524,870           6,827,518         (697,352)

Other Financing Uses
 Transfers out
  General fund                                                           (5,535,840)          (4,197,590)       1,338,250
  Capital projects fund                                                  ~1,790,3602          ~1,789,7732             587

   Total other uses                                                      (7,326,200)          ~5,987,3632       1,338,837

     Excess of revenues
     over other uses                                                       198,670              840,155          641,485

Fund balance July 1                                                       1,789,931            1,789,931

Fund balance June 30                                                $     1,988,601    $      2,630,086     $    641,485




                                                              111
~o/C:Win6Wtt-S~ ~~
Spuiat~ 'i/~
Mass Transit Tax Food - Schedule of Revenues, Expenditures, and Changes in Food Balance - Budget and Actual
For the Fiscal Year Ended June 30, 2009                                                                           Exhibit 23




                                                                                                                Variance
                                                                                                                Favorable
                                                                      Budget               Actual             (Unfavorable~

Revenues
 Taxes                                                            $     3,019,090      $    3,066,153         $     47,063
 Investment income                                                         36,000              25,533              (10,467)

   Total revenues                                                       3,055,090           3,091,686               36,596

Expenditures
 Transportation                                                            72,710              68,656                4,054

     Excess of revenues over expenditures                               2,982,380           3,023,030               40,650

Other Financing Uses
 Transfers out
  Grants fund                                                             (10,360)            (10,172)                 188
  Transit authority fund                                               (4,107,4202         ~3,424,0332             683,387

   Total other financing uses                                          (4,117,780)         ~3,434,2052             683,575

     Excess of expenditures and
       other uses over revenues                                        (1,135,400)           (411,175)             724,225

Fund balance July 1                                                    2,743,530            2,743,530

Fund balance June 30                                             $      1,608,130     $     2,332,355     $        724,225




                                                              112
~4CW~-$tdenv, ~~
$peeUJt~ CJ~
Sales Tax Fund - Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
For the Fiscal Year Ended June 30, 2009                                                                         Exhibit 24




                                                                                                              Variance
                                                                                                              Favorable
                                                                     Bud~et               Actual          (Unfavorable~


Revenues
 Taxes                                                           $    12,272,980      $    10,932,732     $    (1,340,248)

Other Financing Uses
 Transfers out
  General fund                                                        (7,336,690)          (6,701,227)           635,463
  Debt service fund                                                   (4,936,2902          (4,512,538 2          423,752

   Total other ftnancing uses                                        (12,272,980)         (11,213,765 2         1,059,215

     Excess of other uses
      over revenues                                                                          (281,033)          (281,033)


Fund balance July 1                                                    2,885,263            2,885,263

Fund balance June 30                                             $     2,885,263     $      2,604,230     $      (281,033!




                                                              113
~o/CW~-Salemt, ~~
 SpeeiJ ~ CJuntftp
Occupancy Tax Fund - Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
For the Fiscal Year Ended June 30, 2009                                                                             Exhibit 25




                                                                                                                Variance
                                                                                                                Favorable
                                                                    BudGet               Actual                (Unfavorable~


Revenues
 Taxes                                                         $        545,000     $        480,226       $         (64,774)
 Investment income                                                                             8,627                   8,627

   Total revenues                                                       545,000              488,853                 (56,147)

Expenditures
 Economic development                                                   245,000               88,500                 156,500

     Excess of revenues over expenditures                               300,000              400,353                 100,353

Other Financing Uses
 Transfers out
  Public facilities management fund                                    (400,000~            (400,000)

     Excess of revenues over (under)
      expenditures and other uses                                      (100,000)                  353                100,353

Fund balance July I                                                     345,833              345,833

Fund balance June 30                                           $        245,833     $       346,186        S         100,353




                                                             114
~o/CW~-So1ewv, ~~
Speeiat ~ c;J~
Cable Franchise Fee Fund - Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
From Inception and for the Year Ended June 30, 2009                                                                        Exhibit 26

                                                                                                         Total          Program
                                                                    Current Year    Prior Years         to Date       Authorizations

Revenues
 Licenses                                                         $      250,000 $ 5,994,082       $ 6,244,082        $   6,260,800
 Investment income                                                         2,118      99,327           101,445               76,610
 Other                                                                                    16                16

   Total revenues                                                       252,118       6,093,425        6,345,543          6,337,410

Expenditures
 General government                                                          166       463,962           464,128            732,540

     Excess of revenues over expenditures                               251,952       5,629,463        5,881,415          5,604,870

Other Financing Uses
 Transfers out
  General fimd                                                                       (5,533,192)       (5,533,192)        (5,574,970)
  Grants fimd                                                             (9,734)       ~20,166)          (29,9OO l          (29,9OO l

    Total other financing uses                                            (9,734)    (5,553,358)       (5,563,092)        (5,604,870)

     Excess of revenues over
      expenditures and other uses                                       242,218         76,105           318,323      $

Fund balance July 1                                                       76,105

Fund balance June 30                                              $     318,323 $       76,105     $     318,323




                                                              115
116
~o/CW~-dalem;# ~~
dpeetat ~ CJunJ.tp
Emergency Telephone Fund - Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
From Inception and for the Year Ended June 30, 2009                                                                  Exhibit 27

                                                                                                    Total          Program
                                                                   Current Year    Prior Years     to Date       Authorizations

Revenues
 Licenses                                                          $   1,237,871   $ 1,688,125   $ 2,925,996     $   2,498,770
 Investment income                                                        15,014        85,819       100,833            26,710

   Total revenues                                                      1,252,885     1,773,944     3,026,829         2,525,480

Expenditures
 General government                                                     469,054       892,850      1,361,904         2,693,230
 Debt service
 Capital lease charges                                                   88,752       110,941        199,693           173,070

 Total expenditures                                                     557,806      1,003,791     1,561,597         2,866,300

     Excess of revenues over expenditures                               695,079       770,153      1,465,232          (340,820)

Other Financing Sources (Uses)
 Transfers in
  Emergency telephone system fund                                                      39,720         39,720            39,720
 Transfers out
  General fund                                                          (11,540~     (118,520)      ~130,060)         ~233,480)

   Total other fmancing uses, net                                       (11,540~      (78,800)       ~90,340)         (193,760~


     Excess of revenues over
       expenditures and other uses                                      683,539       691,353      1,374,892     $    ~534,580~

Fund balance July 1                                                     691,353

Fund balance June 30                                             S     1,374,892 S    691,353    S 1,374,892




                                                             117
118
The parking fund accounts for parking facilities owned and operated as self-
supporting enterprises of the city.

The cemeteries fund accounts for the operations of city-owned and operated
Evergreen and Woodland cemeteries. Fees for interment services are structured
to cover normal operational costs and capital maintenance.

The stormwater management fund is established to account for monitoring and
            storm water
maintaining stormwater runoff as required by federal mandate.

The transit authority fund is established to account for the provisions of public
transportation within the city and the county. The city contracts for management
and operation of the system with a privately owned management company.
Charges and fares are structured to encourage the community to use public
transportation.

The public facilities management fund is established to account for the
operations of public meeting and exhibition facilities consisting of an enclosed
sports arena, convention center, and baseball park.

The fairgrounds fund accounts for the operations of the city fairgrounds, the site
of the Dixie Classic Fair, exhibitions, and outdoor activities.




                                       119
~ofCW~-$~, ~~
~ $tatuneni/of~ a(~
Nonmajor Enterprise FlU1ds
JlU1e 30, 2009




                                                                                                   Stormwater
Assets                                                              Parking          Cemeteries    Management
Current Assets
 Cash and cash equivalents                                      $     909,378    $       196,785   $    5,116,289
 AccolU1ts receivables, net of allowance for
  lU1collectibles                                                       2,921             18,806        1,451,241
 Due from other governments                                           479,181
 Inventories
 Prepaid expenses

    Total current assets                                             1,391,480           215,591        6,567,530

Noncurrent Assets
 Capital assets
  Land                                                               1,711,845           228,213
  Construction in progress                                             350,621                          2,245,671
  Other capital assets, net of accumulated depreciation             21,176,091           334,013        7,810,867
 Unamortized fInancing costs                                           137,387
 AccolU1ts receivables

     Total noncurrent assets                                        23,375,944           562,226       10,056,538

      Total assets                                                  24,767,424           777,817       16,624,068


Liabilities
Current Liabilities
  AccolU1ts payable                                                    68,618             96,438         124,280
  Accrued payroll                                                      27,015              5,279          27,703
  Deferred revenue                                                     85,200
  Current maturities
   Advances from other funds
   Contracts payable                                                 1,568,685            19,534         212,111

     Total current liabilities                                       1,749,518           121,251         364,094

Noncurrent Liabilities
 Accrued vacation                                                      30,935              9,728          74,762
 Advances from other funds
 Contracts payable                                                  14,198,948             4,856         288,348

     Total noncurrent liabilities                                   14,229,883            14,584         363,110

      Total liabilities                                             15,979,401           135,835         727,204
Net Assets
 Investment in capital assets, net of related debt                   7,470,924           537,836        9,556,079
 Unrestricted                                                        1,317,099           104,146        6,340,785

     Total net assets                                           $    8,788,023   $       641,982   $   15,896,864




                                                          120
                                                                     Exhibit 28


                        Public
     Transit           Facilities
    Authori!l:        Management         Fa!!:grounds              Total

$       642,315   $         60,270   $       1,260,180   $           8,185,217

         91,669           627,667                                    2,192,304
        212,082                                                        691,263
        168,500                                                        168,500
                             8,618             33,156                   41,774

      1,114,566           696,555            1,293,336              11,279,058



      2,236,412          2,738,182           1,986,238               8,900,890
      1,172,766                                                      3,769,058
     12,027,259         29,711,499           5,277,502              76,337,231
                                                 2,981                 140,368
                          500,000                                      500,000

     15,436,437         32,949,681          7,266,721               89,647,547

     16,551,003         33,646,236           8,560,057             100,926,605




        387,084           661,750             116,240                1,454,410
        310,647           107,265              10,224                  488,133
                                                                        85,200

                                              118,938                  118,938
         79,785           264,899             174,881                2,319,895

        777,516          1,033,914            420,283                4,466,576


                          108,585               14,970                 238,980
                                               546,384                 546,384
         55,011          1,115,796           1,218,625              16,881,584

         55,011          1,224,381           1,779,979              17,666,948

        832,527          2,258,295          2,200,262               22,133,524

     15,301,641         31,068,986           5,204,912              69,140,378
        416,835            318,955           1,154,883               9,652,703

$    15,718,476   $     31,387,941   $       6,359,795   $          78,793,081




                                                             121
~ofcw~-s~# ~~
~s~of~#~~~
~iIII CJwut ~ JiI(~
Nonmajor Enterprise Funds
For the Fiscal Year Ended June 30, 2009


                                                                                                 Stonnwater
                                                         Parking             Cemeteries          ManaGement
Operating Revenues
 Charges for services                                $                   $       433,704     $     10,456,955
 Rentals                                                   1,843,874
 Admissions
 Concessions
 Other

  Total operating revenues                                 1,843,874             433,704           10,456,955

Operating Expenses
 Personal services                                          718,598              255,204            1,905,600
 Maintenance and operations                                 787,698              258,089            2,767,344

  Total operating expenses
   before depreciation                                     1,506,296              513,293           4,672,944

Depreciation                                                878,904               21,070             452,214


  Total operating expenses                                2,385,200               534,363           5,125,158


    Operating income (loss)                                (541,326)             (100,659)          5,331,797

Nonoperating Revenues (Expenses)
 Intergovernmental revenue                                  479,181
 Investment income (loss)                                    25,821                 1,728             74,745
 Gain on disposal of assets
 Damage settlements
 Interest and fiscal expense                               (772,510)               (2,598)            (42,317)
 Amortization of fmancing costs                            ~169,1022

  Total nonoperating revenues
   (expenses), net                                         (436,6102                 ~8702            32,428

    Income (loss) before capital contributions
     and transfers                                         (977,936)             (101,529)          5,364,225

Capital Contributions                                                                                340,007

Transfers In                                                915,941               134,020
Transfers Out                                                                                      (1,392,302)

  Total transfers                                           915,941               134,020          (1,392,302)

    Change in net assets                                    (61,995)              32,491            4,311,930

Total net assets - beginning, as previously stated        3,886,626              609,491           11,584,934
Prior period adjustment                                   4,963,392
Total net assets - beginning, as restated                 8,850,018              609,491           11,584,934

Total net assets - ending                            $    8,788,023      S       641,982     S     15,896,864



                                                                   122
                                                                     Exhibit 29

                           Pub6c
     Transit              Facilities
    Authori~             Mana;ement          Fairl2:oWlds           Total

$       1,706,199    $        935;2,77   $          18,669    $     13,550,804
          157,434           1,361,715              192,639           3,555,662
                                                 1,976,749           1,976,749
                              439,316              146,897             586,213
        1,122,830           1,167,203              133,443           2,423,476

        2,986,463           3,903,511            2,468,397          22,092,904


        7,381,818           2,553,945              541,502          13,356,667
        3,839,511           3,345,470            1,217,844          12,215,956


       11,221,329           5,899,415            1,759,346          25,572,623

        1,749,274           1,692,518              215,797           5,009,777


       12,970,603           7,591,933            1,975,143          30,582,400


       (9,984,140)         (3,688,422)            493,254           (8,489,496)


        4,873,784                                                    5,352,965
                                                    30,283             132,577
                            4,006,192                                4,006,192
           57,273                                                       57,273
          (11,803)            (90,393)            (120,760)         (1,040,381)
                                                       (30)           (169,132)


        4,919,254           3,915,799              (90,507)          8,339,494


       (5,064,886)           227,377              402,747             (150,002)

         709,635                                                     1,049,642

        3,721,210           2,339,336                                7,110,507
                           ~5,500,000)            ~500,636)         ~7,392,938~

        3,721,210          (3,160,664~            (500,636~           ~282,431)

         (634,041)         (2,933,287)             (97,889)           617;2,09

       16,352,517          34,321,228            6,457,684          73,212,480
                                                                     4,963,392
       16,352,517          34,321,228            6,457,684          78,175,872

$      15,718,476    $     31,387,941    $       6,359,795    $     78,793,081



                                                              123
~ofCW~-$alurv, ~~
~ $~of~7Jlow.tv
Norunajor Enterprise Funds
For the Fiscal Year Ended June 30, 2009



                                                                                             Stormwater            Transit
                                                    Parking              Cemeteries          Mana~ement           Authori~
Cash Flows from Operating Activities
 Cash received from sales                       $     1,832,075      $       451,058     $     10,140,526     $     2,996,755
 Cash payments to suppliers
   for goods and services                              (794,874)             (249,555)         (2,758,161)         (3,732,697)
 Cash payments to employees for services               (694,193)             ~252,789)         (1,887,5502         (7,354,076)
      Net cash provided (used) by
       operating activities                            343,008                (51,286)          5,494,815           (8,090,018)
Cash Flows from Noncapital
    Financing Activities
  Intergoverrunental revenue                           479,181                                                      4,763,499
  Repayments of advanced funds
. Transfers in                                         915,941                134,020                               3,395,412
  Transfers out                                                                                (1,392,302 )


      Net cash provided (used) by
       noncapital financing activities                1,395,122               134,020          (1,392,302)          8,158,911
Cash Flows from Capital and Related
  Financing Activities
 Intergoverrunental revenue                                                                                           743,491
 Capital contributions                                                                            340,007
 Transfers in                                                                                                         325,798
 Acquisition of property and equipment                                                         (1,336,723)           (724,536)
 Retirement of contracts payable                     (1,276,011)              (22,846)           (288,843)            (79,801)
 Interest paid on contracts payable                    (772,510)               (2,598)            (42,317)            (11,803)
 Proceeds from sale of assets
 Damage settlements                                                                                                    57,273

      Net cash provided (used) by capital and
       related financing activities                  (2,048,521 )             (25,444)         (1,327,876)            310,422

Cash Flows from Investing Activities
 Investment income                                       25,821                 1,728              74,745

      Net increase (decrease) in cash                 (284,570)                59,018           2,849,382             379,315

Cash and cash equivalents July 1                      1,193,948               137,767           2,266,907             263,000
Cash and cash equivalents June 30               $      909,378       $        196,785    $      5,116,289     $       642,315




                                                               124
                                                 Exhibit 30
                                               (Page 1 of2)


      Public
     Facilities
    Management            Fairgrounds           Total

$       3,529,428     $      2,468,397     $   21,418,239

       (3,647,193)           (1,240,013)       (12,422,493)
       (2,507,106)             (537,205)       (13,232,919)


       (2,624,871 )            691,179          (4,237,173)



                                                 5,242,680
                              (112,615)           (112,615)
                                                 4,445,373
       (3,160,664)            (500,636)         (5,053,602)



       (3,160,664)            (613,251)         4,521,836



                                                   743,491
                                                   340,007
                                                   325,798
          361,465              (16,857)         (1,716,651 )
         (283,936)            (231,355)         (2,182,792)
          (90,393)            (120,760)         (1,040,381)
        5,500,000                                5,500,000
                                                    57,273


        5,487,136             (368,972)         2,026,745


                                30,283            132,577

        (298,399)             (260,761)         2,443,985

         358,669             1,520,941          5,741,232
$          60,270     $      1,260,180     $    8,185,217




                                                               125
~4CWin&f.on,-Salenv, ~~
~ statem,enJ;4~ CJ~
Nonmajor Enterprise Funds
For the Fiscal Year Ended June 30, 2009



                                                                                                                           Transit
                                                            Parking               Cemeteries           Stormwater          Authori~
Reconciliation of Cash and Cash Equivalents
 Cash and investments - current                        $        909,378      $         196,785     $      5,116,289    $      642,315
 Cash and investments - restricted

Cash and cash equivalents June 30                      $        909,378       $        196,785     $      5,116,289    $      642,315

Reconciliation of Operating
  Income (Loss) to Net Cash Provided
  (Used) by Operating Activities

 Operating income (loss)                               $       (541,326)      $       (100,659)    $      5,331,797    $    (9,984,140)
 Adjustments to reconcile operating income
  (loss) to net cash provided (used)
  by operating activities
    Depreciation expense                                        878,904                21,070              452,214           1,749,274
    Change in assets and liabilities
     (Increase) decrease in receivables                            2,601                17,354             (316,429)           10,292
     Increase in inventories                                                                                                   81,599
     Increase in prepaid expenses
     Increase (decrease) in accounts payable                      (7,176)                8,534                9,183            25,215
     Increase in accrued payroll                                  24,148                 2,029               15,714            27,742
     Decrease in deferred revenue                                (14,400)
     Increase in accrued vacation                                    257                  386                 2,336
     Increase in contracts payable

      Total adjustments                                         884,334                49,373               163,018          1,894,122

       Net cash provided (used) by
        operating activities                            $       343,008       $        (51,286)    $      5,494,815    $    (8,090,018)


Noncash Investing, Capital, and Financing Activities

 The City entered into leases for new property and equipment and incurred capital lease obligations of
 $974,775 and $354,278 during the years ended June 30, 2009 and 2008, respectively.




                                                                   126
                                          Exhibit 30
                                          Page 2 of2


  Public
 Facilities
Mana&ement            Fai!1rounds         Total

$      60,270     $       1,260,180   $   8,185,217


$      60,270     $       1,260,180   $   8,185,217




$   (3,688,422)   $        493,254    $   (8,489,496)



    1,692,518              215,797        5,009,777

     (374,083)                             (660,265)
                                             81,599
       (8,618)             (12,177)         (20,795)
     (296,960)              (9,992)        (271,196)
       43,994                3,458          117,085
                                            (14,400)
        2,845                  839            6,663
        3,855                                 3,855

    1,063,551              197,925        4,252,323


$   !2,624,871~   $        691,179    $   !4,237,173~




                                                        127
~4CW~-S~,~~
cg~'iJ~
Parking Fund - Schedule of Revenues, Expenditures, and Transfers - Budget (Non-GAAP Basis) and Actual
For the Fiscal Year Ended June 30, 2009                                                                              Exhibit 31


                                                                                                                   Variance
                                                                                                                   Favorable
                                                                               Budllet            Actual         (Unfavorable)
Operating Revenues
 Rentals                                                                   $    1,736,000     $    1,843,874     $    107,874

Operating Expenditures
 Personal services                                                               755,260            718,598            36,662
 Maintenance and operations                                                      852,710            787,698            65,012


  Total operating expenditures                                                  1,607,970          1,506,296          101,674

   Operating income                                                               128,030           337,578           209,548

Nonoperating Revenues (Expenditures)
 Intergovernmental revenue                                                        516,050             479,181         (36,869)
 Investment income                                                                 50,000              25,821         (24,179)
 Interest and fiscal charges                                                     (772,300)          (772,510)            (210)
 Principal retirement                                                          (1,281, 91Ol       ~1 ,276,01Il          5,899

  Total nonoperating expenditures, net                                         (1,488, 16Ol       (l,543,519 l        (55, 359l

   Loss before transfers                                                       (1,360,130)        (1,205,941)         154,189

Transfers In
 General fund                                                                   1,056,530           915,941          ~140,589l

   Change in net assets - modified accrual basis                           $     (303,600)    $     (290,000)    $     13,600


Reconciliation of Modified Accrual Basis to Full Accrual Basis

Change in Net Assets - Modified Accrual Basis                                                 $    (290,000)

 Depreciation                                                                                      (878,904)
 Unamortized financing costs                                                                       (169,102)
 Principal retirement                                                                             1,276,011

Change in Net Assets - Full Accrual Basis                                                     $      ~61,995)




                                                              128
~o/CW~-Solun;, ~~
c:g~'iI~
Cemeteries Fund - Schedule of Revenues, Expenditures, and Transfers - Budget (Non-GAAP Basis) and Actual
For the Fiscal Year Ended June 30, 2009                                                                           Exhibit 32


                                                                                                                Variance
                                                                                                                Favorable
                                                                             Budset             Actual        (Unfavorable)
Operating Revenues
 Charges for services                                                   $      427,570     $      433,704     $      6,134

Operating Expenditures
 Personal services                                                             297,200            255,204           41,996
 Maintenance and operations                                                    251,830            258,089            ~6,259)


  Total operating expenditures                                                 549,030            513,293           35,737

   Operating loss                                                              (121,460)           (79,589)         41,871

Nonoperating Revenues (Expenditures)
 Investment income                                                                                   1,728           1,728
 Interest and fiscal charges                                                     (2,600)            (2,598)              2
 Principal retirement                                                           ~22,850)           (22,846)              4

  Total nonoperating expenditures, net                                          ~25,450)           (23,7162          1,734

   Loss before transfers                                                       (146,910)         (103,305)          43,605

Transfers In
 General fund                                                                   16,230             16,210              (20)
 Cemetery perpetual care fund                                                  130,680            117,810          (12,8702

  Total transfers in                                                           146,910            134,020          (12,890 2

   Change in net assets - modified accrual basis                        S                  S       30,715     S     30,715


Reconciliation of Modified Accrual Basis to Full Accrual Basis

Change in Net Assets - Modified Accrual Basis                                              $       30,715

 Depreciation                                                                                      (21,070)
 Principal retirement                                                                               22,846

Change in Net Assets - Full Accrual Basis                                                  S       32,491




                                                             129
~o/ CWin6.tonl-Salemt, ~ ~
cg~CJ~
Stonnwater Management Fund - Schedule of Revenues, Expenditures, and Transfers - Budget (Non-GAAP Basis) and Actual
For the Fiscal Year Ended June 30, 2009                                                                          Exhibit 33


                                                                                                                Variance
                                                                                                                Favorable
                                                                            Budget            Actual          (Unfavorable)

Operating Revenues
 Charges for services                                                   $   8,646,060     $ 10,456,955        $   1,810,895

Operating Expenditures
 Personal services                                                          2,174,660         1,905,600            269,060
 Maintenance and operations                                                 3,171,728         2,548,358            623,370
 Capital outlay                                                                18,600                               18,600

  Total operating expenditures                                              5,364,988         4,453,958            911,030

   Operating income                                                         3,281,072         6,002,997           2,721,925

Nonoperating Revenues (Expenditures)
 Investment income                                                                                74,745            74,745
 Interest and fiscal charges                                                  (45,300)           (42,317)            2,983
 Principal retirement                                                        ~332,550~         ~288,843)            43,707

  Total nonoperating expenditures, net                                       (377,850)         (256,415)           121,435

   Income before capital contributions and transfers                        2,903,222         5,746,582           2,843,360

Capital Contributions
 Federal and state grants                                                                       199,423            199,423
 Other                                                                                          140,584            140,584
 Total capital contributions                                                                    340,007            340,007

Transfers Out
 General fund                                                               (1,489,090)       (1,392,302)           96,788


   Change in net assets - modified accrual basis                        $   1,414,132     $   4,694,287       $   3,280,155


Reconciliation of Modified Accrual Basis
  to Full Accrual Basis

Change in Net Assets - Modified Accrual Basis                                             $   4,694,287

 Depreciation                                                                                  (452,214)
 Principal retirement                                                                           288,843
 Book value of disposed assets                                                                 (218,986   l
Change in Net Assets - Full Accrual Basis                                                 $   4,311,930




                                                            130
~ofCW~-$alenv, ~~
~~CJ~
Transit Authority Fund - Schedule of Revenues, Expenditures, and Transfers - Budget (Non-GAAP Basis) and Actual
For the Fiscal Year Ended June 30, 2009                                                                                Exhibit 34
                                                                                                                      Variance
                                                                                                                      Favorable
Operating Revenues                                                             Budget            Actual           (Unfavorable~
 Charges for services
  Fares                                                                    $    1,739,230    $    1,706,199       $      (33,031)
  Rentals                                                                         202,630           157,434              (45,196)
  Contracted services                                                             543,830           681,054              137,224
  Advertising                                                                      40,000            22,118              (17,882)
   Total charges for services                                                   2,525,690         2,566,805               41,115
  Other                                                                          447,440           419,658               (27,782)
   Total operating revenues                                                     2,973,130         2,986,463               13,333
Operating Expenditures
 Personal services                                                             7,734,190          7,381,818              352,372
 Maintenance and operations                                                    4,325,655          3,753,995              571,660
   Total operating expenditures                                                12,059,845        11,135,813              924,032
     Operating loss                                                            (9,086,715)       (8,149,350)             937,365
Nonoperating Revenues
 Intergovernmental revenues
  FTA operating grant                                                             905,710           905,707                   (3)
  FTA preventative maintenance grant                                            1,697,980         1,697,976                   (4)
  FTA capital maintenance grant                                                                      11,652               11,652
  Piedmont Triad COG                                                              265,000           359,934               94,934
  Forsyth County                                                                  249,200           236,655              (12,545)
  State of North Carolina                                                       1,824,960         1,661,860             (163,100~

   Total intergovernmental revenues                                            4,942,850         4,873,784               (69,066)
 Damage settlements                                                                10,000            57,273               47,273
 Interest and fiscal charges                                                      (18,440)          (11,803)               6,637
 Principal retirement                                                             (93,200)          (79,801 2             13,399
   Total nonoperating revenues, net                                            4,841,210         4,839,453                ~1,757)

     Loss before capital contributions and transfers                           (4,245,505)       (3,309,897)             935,608
Capital Contributions
 Federal and state grants                                                                          564,218               564,218
 Other                                                                                             145,417               145,417
   Total capital contributions                                                                     709,635               709,635
Transfers In
 Debt service fund                                                               111,600            91,587               (20,013)
 Capital projects fund                                                                             205,590               205,590
 Mass transit tax fund                                                         4,096,460         3,424,033              ~672,4272
   Total transfers in                                                          4,208,060         3,721,210              (486,8502
    Change in net assets - modified accrual basis                          $      p7,445~    $    1,120,948       $    1,158,393
Reconciliation of Modified Accrual Basis to Full Accrual Basis
Change in Net Assets - Modified Accrual Basis                                                $    1,120,948
 Depreciation                                                                                    (1,749,274)
 Principal retirement                                                                                79,801
 Book value of disposed assets                                                                      (85,516)
Change in Net Assets - Full Accrual Basis                                                    $    (634,041)
                                                              131
~o/CW~-Salem;, ~~
~~'iJ~
Public Facilities Management Fund - Schedule of Revenues, Expenditures, and Transfers - Budget (Non-GAAP Basis) and Actual
For the Fiscal Year Ended June 30, 2009                                                                               Exhibit 35

                                                                                                                    Variance
                                                                                                                    Favorable
                                                                        Bud~et               Actual                (Unfavorable~
Operating Revenues
 Charges for services                                               $     1,165,000     $        935,277       $         (229,723)
 Rentals                                                                  1,307,280            1,361,715                   54,435
 Concessions sales                                                          612,410              439,316                 (173,094)
 Other                                                                    1,094,570            1,167,203                   72,633

   Total operating revenues                                              4,179,260             3,903,511                 (275,749)

Operating Expenditures
 Personal services                                                       2,675,970             2,553,945                 122,025
 Maintenance and operations                                              3,555,846             3,341,615                 214,231
 Capital outlay                                                              5,800                 6,745                     ~945)


   Total operating expenditures                                          6,237,616             5,902,305                 335,311

     Operating loss                                                      (2,058,356)           (1,998,794)                 59,562

Nonoperating Revenues (Expenditures)
 Proceeds from sale of assets                                            5,500,000             5,500,000
 Interest and fiscal charges                                               (97,500)              (90,393)                   7,107
 Principal retirement                                                     (317,470~             (283,936)                  33,534

   Total nonoperating revenues, net                                      5,085,030             5,125,671                  40,641

     Loss before transfers                                               3,026,674             3,126,877                  100,203

Transfers In (Out)
 General fund                                                             1,438,700            1,438,700
 Occupancy tax fund                                                         400,000              400,000
 Capital projects fund                                                   (5,500,000)          (5,500,000)
 Fairgrounds fund                                                           621,760              500,636                 (121,124)

   Total transfers in (out)                                              ~3,039,540~          (3,160,664)                ~121,124)

     Change in net assets - modified accrual basis               $          (12,866)    $        (33,787)     $           (20,921)


Reconciliation of Modified Accrual Basis to Full Accrual Basis

Change in Net Assets - Modified Accrual Basis                                           $        (33,787)

 Depreciation                                                                                 (1,692,518)
 Capital outlay                                                                                    6,745
 Principal retirement                                                                            283,936
 Book value of disposed assets                                                                (1,493,808)
 Increase in contracts payable                                                                    (3,855)

Change in Net Assets - Full Accrual Basis                                               $      (2,933,287)




                                                              132
~ofCW~-So1uw, ~~
cg~7J~
Fairgrounds Fund - Schedule of Revenues, Expenditures, and Transfers - Budget (Non-GAAP Basis) and Actual
For the Fiscal Year Ended June 30, 2009                                                                          Exhibit 36


                                                                                                              Variance
                                                                                                              Favorable
                                                                 Budget                Actual               (Unfavorablel

Operating Revenues
 Charges for services                                      $            14,900    $         18,669      $            3,769
 Rentals                                                               167,000             192,639                  25,639
 Admissions                                                          1,991,500           1,976,749                 (14,751)
 Concessions                                                           119,750             146,897                  27,147
 Other                                                                 124,500             133,443                   8,943

  Total operating revenues                                           2,417,650           2,468,397                  50,747

Operating Expenditures
 Personal services                                                     523,790             541,502                 (17,712)
 Maintenance and operations                                          1,283,123           1,217,844                  65,279
 Capital outlay                                                         17,500              16,857                     643

  Total operating expenditures                                       1,824,413           1,776,203                 48,210

   Operating income                                                   593,237              692,194                  98,957

Nonoperating Revenues (Expenditures)
 Investment income                                                                          30,283                  30,283
 Interest and fiscal charges                                         (120,760)            (120,760)
 Principal retirement                                                (231,360)            (231,355)                      5
 Repayment of advanced funds                                          ~112,620~           (112,615 2                     5

  Total nonoperating expenditures, net                                ~464,740)           (434,4472                 30,293

   Income before transfers                                            128,497              257,747                129,250

Transfers Out
 Public facilities management fund                                    (621,760~           ~500,636)                121,124

   Change in net assets - modified accrual basis           S          (493,263l   S       (242,889)     S         250,374


Reconciliation of Modified Accrual Basis to Full Accrual Basis

Change in Net Assets - Modified Accrual Basis                                     $       (242,889)

 Depreciation                                                                             (215,797)
 Amortization of fmancing costs                                                                (30)
 Capital outlay                                                                             16,857
 Principal retirement                                                                      231,355
 Repayment of advanced funds                                                               112,615

Change in Net Assets - Full Accrual Basis                                         S        ~97,889)




                                                               133
The workers compensation fund accounts for the workers compensation
program of the City of Winston-Salem.

The health benefits fund accounts for the health benefits of employees of the
City of Winston-Salem.

The dental and flex benefits fund accounts for the dental and flex benefits of
employees of the City of Winston-Salem.

The employee benefits fund accounts for various employee benefits for
employees of the City of Winston-Salem.

The Risk Acceptance Management Corporation (RAM CO), a separate legal
corporation, provides claims administration, and reserve funding for claims of
the City of Winston-Salem.




                                     135
~o/CW~-Srdem;, ~~
~S~o/~$I(~
Internal Service Funds
June 30, 2009




                                                            Workers           Health       Dental and
Assets                                                    Coml!ensation       Benefits     Flex Benefits
Current Assets
 Cash and cash equivalents                                $   7,315,152   $    9,035,014   $   1,118,605
 Accounts receivables, net of allowance for
  uncollectibles
 Prepaid expenses

    Total current assets                                      7,315,152        9,035,014       1,118,605

Noncurrent Assets
 Capital assets
  Other capital assets, net of accumulated depreciation

     Total noncurrent assets

      Total assets                                            7,315,152        9,035,014       1,118,605


Liabilities
Current Liabilities
  Accounts payable                                              31,699           345,768         35,952
  Accrued payroll                                                1,076               998
  Employee taxes and amounts withheld
  Deferred revenue                                                               371,643         25,082
  Current maturities
   Advances from other funds
   Claims payable                                              628,238         3,550,088        135,096
   Contracts payable

     Total current liabilities                                 661,013         4,268,497        196,130

Noncurrent Liabilities
 Accrued vacation                                                 2,836            2,208
 Claims payable                                               1,391,974
 Contracts payable

     Total noncurrent liabilities                             1,394,810            2,208

      Total liabilities                                       2,055,823        4,270,705        196,130
Net Assets
 Investment in capital assets, net of related debt
 Unrestricted                                                 5,259,329        4,764,309        922,475

     Total net assets                                     $   5,259,329   $    4,764,309   $    922,475




                                                              136
                                           Exhibit 37

                         Risk
                      Acceptance
    Employee          Management
     Benefits         Co!]!oration       Total

$     8,519,577   $     17,759,698   $    43,748,046

                            29,167            29,167
                           191,996           191,996

      8,519,577         17,980,861        43,969,209



                        20,869,618        20,869,618

                        20,869,618        20,869,618

      8,519,577         38,850,479        64,838,827




     4,588,307              80,773         5,082,499
                                               2,074
       446,602                               446,602
                                             396,725


                                           4,313,422
                           272,207           272,207

      5,034,909            352,980        10,513,529


                                               5,044
                           932,485         2,324,459
                        15,870,042        15,870,042

                        16,802,527        18,199,545

      5,034,909         17,155,507        28,713,074

                         4,727,369         4,727,369
      3,484,668         16,967,603        31,398,384

$    3,484,668    $     21,694,972   $    36,125,753




                                                        137
~ofCW~-Stdem;, ~~
~s~of~, ~~,an-tt
~ inl7Jtuttt %w sIl~
Internal Service Funds
For the Fiscal Year Ended June 30, 2009


                                                           Workers           Health             Dental and
                                                         ComEensation        Benefits           Flex Benefits
Operating Revenues
 Charges for services                                $       2,751,120   $    13,906,859    $       1,919,488
 Rentals
 Rebates
 Other                                                         78,866              4,870                3,484

  Total operating revenues                                   2,829,986        13,911,729            1,922,972

Operating Expenses
 Personal services                                             288,959           170,842
 Maintenance and operations                                  1,584,168        14,497,163            1,990,260

  Total operating expenses
   before depreciation                                       1,873,127        14,668,005            1,990,260

Depreciation


  Total operating expenses                                   1,873,127        14,668,005            1,990,260


    Operating income (loss)                                   956,859           (756,276)             (67,288)

Nonoperating Revenues (Expenses)
 Investment income (loss)                                     113,373           (804,429)              19,388
 Interest and fiscal expense                                       (2)                (1)
 Amortization of fmancing costs

  Total nonoperating revenues
   (expenses), net                                            113,371           ~804,430)              19,388

    Change in net assets                                     1,070,230        (1,560,706)             (47,900)

Total net assets - beginning, as previously stated
Prior period adjustment                                      4,189,099         6,325,015              970,375
Total net assets - beginning, as restated                    4,189,099         6,325,015              970,375

Total net assets - ending                            $       5,259,329   $     4,764,309    $         922,475




                                                                138
                                            Exhibit 38
                          Risk
                       Acceptance
    Employee           Management
     Benefits          Co~oration          Total

$     18,368,188   $       999,740     $   37,945,395
                         2,331,086          2,331,086
                           (83,100)           (83,100)
           6,686                               93,906

      18,374,874         3,247,726         40,287,287


                                              459,801
      17,990,333         1,230,143         37,292,067


      17,990,333         1,230,143         37,751,868

                           613,125           613,125


      17,990,333         1,843,268         38,364,993


         384,541         1,404,458          1,922,294


          78,006         (5,198,814)       (5,792,476)
                           (930,747)         (930,750)
                             (2,152)           (2,152)


          78,006         ~6,131,713)       ~6,725,3782

         462,547         (4,727,255)       (4,803,084)

                        26,422,227         26,422,227
       3,022,121                           14,506,610
       3,022,121        26,422,227         40,928,837

$      3,484,668   $    21,694,972     $   36,125,753




                                                         139
~ofc:w~-s~, ~~
~S~of~7J~
Internal Service Foods
For the Fiscal Year Ended Jooe 30, 2009



                                                               Workers             Health                Dental and
                                                             Coml!ensation         Benefits              Flex Benefits
Cash Flows from Operating Activities
 Cash received from sales                                $       2,829,986     $    13,921,763       $       1,923,703
 Cash payments to suppliers
   for goods and services                                        (2,147,542)       (14,375,842)             (1,977,534)
 Cash payments to employees for services                           (286,875)          (170,460)
 Cash rebates
      Net cash provided (used) by
       operating activities                                        395,569            (624,539)                (53,831)

Cash Flows from Capital and Related
  Financing Activities
 Retirement of contracts payable                                        (44)                  (22)
 Interest paid on contracts payable                                      (2)                   (1)

      Net cash used by capital and
       related fmancing activities                                      (46)                  (23)

Cash Flows from Investing Activities
 Investment income (loss)                                          113,373            ~804,429~                 19,388

      Net increase (decrease) in cash                              508,896          (1,428,991)                (34,443)

Cash and cash equivalents July 1, as previously stated
Prior period adjustment                                          6,806,256          10,464,005               1,153,048
Cash and cash equivalents July 1, as restated                    6,806,256          10,464,005               1,153,048

Cash and cash equivalents Jooe 30                        $       7,315,152     $     9,035,014       $       1,118,605




                                                                     140
                                               Exhibit 39
                                             (Page 1 of2)

                           Risk
                        Acceptance
    Employee            Management
    Benefits            Corporation           Total

$    18,375,570     $       3,302,782    $   40,353,804

    (17,913,801 )          (1,747,031)       (38,161,750)
                                                (457,335)
                              (83,100)           (83,100)


       461,769              1,472,651          1,651,619




                           (2,644,514)        (2,644,580)
                             (933,560)          (933,563)


                           (3,578,074)        (3,578,143)


         78,006            (5,198,814)        (5,792,476)

        539,775            (7,304,237)        (7,719,000)

                          25,063,935         25,063,935
      7,979,802                              26,403,111
      7,979,802           25,063,935         51,467,046

$     8,519,577     $      17,759,698    $   43,748,046




                                                            141
~4CW~-Sal.urv, ~~
~S~4~7J~
Internal Service Funds
For the Fiscal Year Ended June 30, 2009



                                                       Workers            Health              Dental and
                                                     Coml!ensation        Benefits           Flex Benefits
Reconciliation of Cash and Cash Equivalents
 Cash and investments - current                  $       7,315,152    $     9,035,014    $       1,118,605
 Cash and investments - restricted

Cash and cash equivalents June 30                $       7,315,152    $     9,035,014    $       1,118,605

Reconciliation of Operating
  Income (Loss) to Net Cash Provided
  (Used) by Operating Activities

 Operating income (loss)                         $         956,859    $      (756,276)   $         (67,288)
 Adjustments to reconcile operating income
  (loss) to net cash provided (used)
  by operating activities
    Depreciation expense
    Change in assets and liabilities
     (Increase) decrease in receivables
     Decrease in prepaid expenses
     Increase (decrease) in accounts payable                (4,087)          121,321                10,946
     Increase in accrued payroll                               895               541
     Increase in employee taxes and deductions
     Increase in deferred revenue                                              10,034                  731
     Increase (decrease) in accrued vacation                 1,189               (159)
     Increase (decrease) in claims payable                ~559,287)                                  1,780

      Total adjustments                                   (561,290)          131,737                13,457

       Net cash provided (used) by
        operating activities                     $         395,569    $      (624,539)   $         ~53,831~




                                                              142
                                       Exhibit 39
                                       Page 2 of2

                     Risk
                  Acceptance
    Employee      Management
     Benefits     Co!]!oration         Total

$     8,519,577   $ 17,759,698     $   43,748,046


$     8,519,577   $   17,759,698   $   43,748,046




$       384,541   $    1,404,458   $    1,922,294



                        613,125          613,125

            696         (28,044)          (27,348)
                         63,948            63,948
          6,835        (168,291)          (33,276)
             22                             1,458
         69,675                            69,675
                                           10,765
                                            1,030
                       ~412,545)         (970,052 2

         77,228          68,193          (270,675 2


$       461,769   $    1,472,651   $    1,651,619




                                                      143
~ofCWin&tont-S~ ~~
CO~S~CJ~
Workers Compensation Fund - Schedule of Revenues, Expenditures, and Transfers - Budget (Non-GAAP Basis) and Actual
For the Fiscal Year Ended June 30, 2009                                                                       Exhibit 40


                                                                                                            Variance
                                                                                                            Favorable
                                                                 Bud~et               Actual              (Unfavorable)

Operating Revenues
 Charges for services                                      $         2,785,000   $      2,751,120     $          (33,880)
 Other                                                                 119,520             78,866                (40,654)

  Total operating revenues                                           2,904,520          2,829,986                (74,534)

Operating Expenditures
 Personal services                                                     185,560            288,959               (103,399)
 Maintenance and operations                                          2,718,900          1,584,168              1,134,732

  Total operating expenditures                                       2,904,460          1,873,127              1,031,333

   ()perating income                                                       60             956,859                956,799

Nonoperating Revenues (Expenditures)
 Investment income                                                                        113,373                113,373
 Interest and fiscal charges                                              (10)                 (2)                     8
 Principal retirement                                                     (50)                (44)                     6

  Total nonoperating expenditures, net                                    (60)            113,327                113,387


   Change in net assets - modified accrual basis           S                     S      1,070,186     S        1,070,186


Reconciliation of Modified Accrual Basis to Full Accrual Basis

Change in Net Assets - Modified Accrual Basis                                    $      1,070,186

 Principal retirement                                                                          44

Change in Net Assets - Full Accrual Basis                                        s      1,070,230




                                                               144
~o/CW~-$alenv, ~~
COnlR/tnal; $~ CfJunJ.tv
Health Benefits Fund - Schedule of Revenues, Expenditures, and Transfers - Budget (Non-GAAP Basis) and Actual
For the Fiscal Year Ended June 30, 2009                                                                          Exhibit 41


                                                                                                              Variance
                                                                                                              Favorable
                                                                  Bud~et                Actual              (Unfavorable)

Operating Revenues
 Charges for services                                       $         14,207,100    $    13,906,859     $         (300,241)
 Other                                                                     6,800              4,870                 ~1,930~

  Total operating revenues                                            14,213,900         13,911,729               (302,171)

Operating Expenditures
 Personal services                                                       172,730            170,842                  1,888
 Maintenance and operations                                           14,139,126         14,497,163               (358,037)

  Total operating expenditures                                        14,311,856         14,668,005               (356,149)

   Operating loss                                                        (97,956)          (756,276)              (658,320)

Nonoperating Revenues (Expenditures)
 Investment income                                                                         (804,429)              (804,429)
 Interest and fiscal charges                                                 (10)                (1)                     9
 Principal retirement                                                        (30)                ~22~                    8

  Total nonoperating expenditures, net                                       ~40)          (804,452)              (804,412~

   Change in net assets - modified accrual basis            $            ~97,996~   $    ~1,560, 728~   $       (1,462,732)


Reconciliation of Modified Accrual Basis to Full Accrual Basis

Change in Net Assets - Modified Accrual Basis                                       $    (1,560,728)

 Principal retirement                                                                            22

Change in Net Assets - Full Accrual Basis                                           $    (1,560,706)




                                                                145
~o/CW~-Salenv, ~~
 CO~ S~ 7JtuUist
Dental and Flex Benefits Fund - Schedule of Revenues, Expenditures, and Transfers - Budget (Non-GAAP Basis) and Actual
For the Fiscal Year Ended June 30, 2009                                                                          Exhibit 42


                                                                                                               Variance
                                                                                                               Favorable
                                                                  Budget                Actual               (Unfavorable)

Operating Revenues
 Charges for services                                       $         1,820,980   $       1,919,488      $           98,508
 Other                                                                                        3,484                   3,484

  Total operating revenues                                            1,820,980           1,922,972                 101,992

Operating Expenditures
 Maintenance and operations                                           1,890,380           1,990,260                 (99,880)

  Total operating expenditures                                        1,890,380           1,990,260                 (99,8802

   Operating loss                                                      (69,400)             (67,288)                  2,112

Nonoperating Revenues (Expenditures)
 Investment income                                                                           19,388                  19,388

  Total nonoperating expenditures, net                                                       19,388                  19,388

   Change in net assets - modified accrual basis            S          (69,400)   $         (47,900)     $          21,500


Reconciliation of Modified Accrual Basis to Full Accrual Basis


Change in Net Assets - Full Accrual Basis                                         $         (47,9002




                                                                146
~ofCW~-$ale,w, ~~
?JnJRAnat $~ CJ~
Employee Benefits Fund - Schedule of Revenues, Expenditures, and Transfers - Budget (Non-GAAP Basis) and Actual
For the Fiscal Year Ended June 30, 2009                                                                         Exhibit 43


                                                                                                              Variance
                                                                                                              Favorable
                                                                 Budget                Actual               (Unfavorable)

Operating Revenues
 Charges for services                                      $         18,797,260    $    18,368,188      $         (429,072)
 Other                                                                                       6,686                   6,686

  Total operating revenues                                           18,797,260         18,374,874                (422,386)

Operating Expenditures
 Maintenance and operations                                          18,915,641         17,990,333                925,308

  Total operating expenditures                                       18,915,641         17,990,333                925,308

   Operating income (loss)                                            (118,381)            384,541                502,922

Nonoperating Revenues (Expenditures)
 Investment income                                                                          78,006                  78,006

  Total nonoperating expenditures, net                                                      78,006                  78,006

   Change in net assets - modified accrual basis           $           (118,381)   $       462,547      $         580,928


Reconciliation of Modified Accrual Basis to Full Accrual Basis


Change in Net Assets - Full Accrual Basis                                          $       462,547




                                                               147
148
149
~o/CW~-Sa/.em;, ~~
~S~o/CJ~~B'l~
Fiduciary Funds
June 30, 2009                                                                                  Exhibit 44


                                                         Separation    Post-employment
                                         Pension          Allowance        Benefits
                                       Trust Funds       Trust Funds     Trust Funds          Totals
Assets
 Cash and cash equivalents            $ 61,864,548   $     6,788,981    $ 41,839,580     $ 110,493,109
 Accounts receivable, net of                18,637                                              18,637
  allowance for uncollectibles
 Unamortized financing costs                                                  57,758             57,758

  Total assets                          61,883,185         6,788,981      41,897,338         110,569,504

                  Liabilities
Liabilities
 Accounts payable                                                             17,793             17,793
 Accrued payroll                                                                 527                527
 Accrued vacation                                                              2,030              2,030
 Deferred revenue                                                            192,863            192,863
 Contracts payable                                                        25,000,000         25,000,000

  Total liabilities                                                       25,213,213         25,213,213

Net Assets
 Held in trust for pension benefits
  and other purposes                  $ 61,883,185   $     6,788,981    $ 16,684,125     $   85,356,291




                                                           150
~ofCW~-$alem;, ~~
~ $~of~i#l/CJ~crLei;.5It~
Fiduciary Funds
For the Fiscal Year Ended June 30, 2009                                                                                Exhibit 45

                                                             Separation     Post-employment
                                          Pension            Allowance          Benefits        Employment
                                         Trust Fund          Trust Fund       Trust Fund          Benefits             Totals
Additions
Contributions
 Employer                            $     5,001,870     $      646,354     $     6,348,619     $                  $ 11,996,843
 Plan members                              1,495,884                              1,609,389                           3,105,273
 Other                                            46                                                                         46

  Total contributions                      6,497,800            646,354           7,958,008                           15,102,162

Investment income (loss)
 Net appreciation in fair value           (17,181,949)        (2,070,488)        (11,552,919)                        (30,805,356)
 Interest and dividends                     1,807,467            184,212           1,159,377                           3,151,056

  Total investment income (loss)          (15,374,482)        (1,886,276)        (10,393,542)                        (27,654,300)
 Less investment expense                      409,568             48,628             276,002                             734,198

  Net investment income (loss)            (15,784,050)        (1,934,904)        (10,669,544)                        (28,388,498)

    Total additions                        (9,286,250~        ~1,288,550~         ~2,711,5362                        ~13,286,336)


Deductions
Benefits                                   7,095,194           1,225,845          5,749,724                           14,070,763
Refund of contributions                       98,727                                                                      98,727
Administrative expense                        40,529             11,863             118,088                              170,480
Interest and fiscal expense                                                         722,203                              722,203
Amortization of fmancing costs                                                       16,905                               16,905

    Total deductions                       7,234,450           1,237,708          6,606,920                           15,079,078

    Net increase (decrease)               (16,520,700)        (2,526,258)         (9,318,456)                        (28,365,414)

Net assets - beginning, as
 previously stated                        78,403,885           9,315,239         26,002,581         14,506,610      128,228,315
Prior period adjustment                                                                             ~14,506,6102     ~14,506,6102
Net assets - beginning, restated          78,403,885           9,315,239         26,002,581                          113,721,705

Net assets - ending                 $     61,883,185     $     6,788,981    $    16,684,125     $                  $ 85,356,291




                                                                 151
152
  ~.QVI,·...,."v &Il~ CZl&e& iII/ t/te;
~.~~~.    of ~                     7J~




                  153
154
~ofcw~-s~, ~~
s~of~ $I(~ ~iM/tJuy
~ofcfj~'fJ~
Comparative Schedules By Source
June 30, 2009                                                             Exhibit 46




Governmental funds capital assets:
 Land                                                               $    57,303,021
 Buildings                                                               68,841,290
 hnprovements other than buildings                                      189,969,356
 Machinery and equipment                                                105,762,980
 Construction in progress                                                64,556,323

  Total governmental funds capital assets                           S   486,432,970

Investments in governmental funds capital assets by source:
 Construction in progress                                           $    64,556,323
 General governmental revenues                                          349,451,613
 Federal and state grants                                                51,849,874
 Property assessments                                                     6,014,059
 Gifts                                                                    2,936,172
 Other                                                                   11,624,929

  Total governmental funds capital assets                           S   486,432,970




                                                              155
~of CWin&tont-Saluw, ~~
s~of~ g(~ ~i#tItJuy
~of cf1~CJtuUUv
Schedule of Function and Activity
June 30, 2009

                                                                                                   Improvements
                                                                                                    Other Than
                                         Total               Land               BuildinGS            BuildinGS

General Government                   $    66,738,299    $     2,081,505     $     21,672,872   $        7,572,025

Public Protection                         74,757,356          1,108,987            9,509,196            3,671,888

Environmental Health                      14,949,653                3,106            373,028            1,637,183

Transportation                           186,480,500         19,294,530              572,903          130,994,438

Culture and Recreation                    72,733,407          9,288,614           30,934,327           22,454,699

Community and Economic Development        70,773,755         25,526,279            5,778,964           23,639,123

   Total                             $   486,432,970    $    57,303,021     $     68,841,290   $      189,969,356




                                                       156
                             Exhibit 47

    Machinery           Construction
        and                  in
    E!)uil!ment          Pro~ress


$      31,365,548   $        4,046,349

       48,291,329           12,175,956

       12,936,336

        8,806,067           26,812,562

        3,126,985            6,928,782

        1,236,715           14,592,674

$     105,762,980   $       64,556,323




                                          157
158
~o/CW~-Salenv, ~~
S~o/~ dl~ ~i.n/tJuy
~o/cfJ~CJ~
Schedule of Changes by Function and Activity
June 30, 2009                                                                                                 Exhibit 48

                                           Governmental                                                  Governmental
                                           Funds Capital                              Dispositions       Funds Capital
                                              Assets                                      and               Assets
                                           June 30, 2008            Additions         Adjustments        June 30, 2009

General Government                         $   66,376,414          $ 1,383,507    $      1,021,622   $       66,738,299

Public Protection                              63,452,668            11,332,398             27,710           74,757,356

Environmental Health                            14,151,492             798,161                               14,949,653

Transportation                                 178,407,032            8,124,974             51,506          186,480,500

Culture and Recreation                         71,988,013             4,124,523          3,379,129           72,733,407

Community and Economic Development             68,282,585             2,565,890             74,720           70,773,755

   Total                                   S 462,658,204           S 28,329,453   S      4,554,687   S      486,432,970




                                                             159
160
161
~ofCW~-Saiem;, ~~
s~ofcq~~~ON1e,J;~e&
June 30, 2009




                                                              Final
                                                  Date of    Maturity     Interest         Original       Retired
             PU!lose of Bond Issue                 Issue      Date          Rate            Issue         To Date

General Obligation Bonded Debt
 Recreation, sidewalks, streets, & refunding      12/01193   12/01113   5.35 - 5.60%   $    5,499,964   $ 4,437,647
 hnprovements, recreation, streets, & refunding   06/01198   06/01117      5.00%           26,945,000     18,140,000
 Development, recreation & streets                12/01/99   06/01/21   5.00 - 5.50%        6,890,000      1,540,000
 Development, housing, recreation, & streets      03/01102   06/01124   4.30 -4.80%        35,950,000      5,800,000
 Development, safety, streets, & refunding        OS/26/04   06/01/26   3.50 - 5.00%       25,675,000      2,435,000
 Development, recreation, safety, & streets       06/29/06   06/01/28   4.00 - 5.00%       19,925,000        510,000
 Recreation, safety & streets                     06/26/08   06/01128   3.25 - 5.00%        5,105,000
 Refunding                                        05128/09   06/01/21   3.00 -4.50%

   Total General Obligation Bonded Debt                                                S 125,989,964    S 32,862,647




                                                                  162
                                                                                                                     Exhibit 49


 Principal                                         Principal             Debt Service Requirement                   Principal
 Balance           Fiscal Year 2008-09              Balance                Fiscal Year 2009-10                       Balance
 June 30,                                          June 30,                                                          June 30,
   2008        Retirements     Additions             2009        Principal          Interest        Total             2010


$ 1,062,317    $     152,921   $               $      909,396   $      65,308   $      86,692   $     152,000   $      844,088
  8,805,000        7,180,000                        1,625,000       1,625,000          81,250       1,706,250
  5,350,000        5,130,000                          220,000         220,000          12,001         232,001
 30,150,000        1,300,000                       28,850,000       1,355,000       1,366,253       2,721,253       27,495,000
 23,240,000        1,335,000                       21,905,000       1,395,000         999,536       2,394,536       20,510,000
 19,415,000          515,000                       18,900,000         520,000         841,150       1,361,150       18,380,000
  5,105,000                                         5,105,000         200,000         201,775         401,775        4,905,000
                                   8,435,000        8,435,000         415,000         300,383         715,383        8,020,000

$ 93,127,317   $ 15,612,921    $ 8,435,000     $ 85,949,396     $ 5,795,308     $ 3,889,040     $ 9,684,348     $ 80,154,088




                                                          163
164
Contents                                                                                    Page


Financial Trends                                                                            166
      These schedules contain information to help the reader understand
                     financial
      how the city's fmancial performance and well-being have changed
      over time.
      overtime.

Revenue Capacity                                                                            182
      These schedules contain information to help the reader assess the
      factors affecting the city's ability to generate its property taxes.

Debt Capacity                                                                               188
      These schedules 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                                                        198
     These schedules offer demographic and economic indicators to help
     the reader understand the environment within which the city's financial
     activities take place and to help make comparisons over time and with
     other governments.

Operating Information                                                                       200
      These schedules contain information about the city's operations and
      resources to help the reader understand how the city's financial
      information relates to the services the city provides and the activities
      it performs.


Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive
annual financial reports for the relevant year. The city implemented Statement 34 in 2002; schedules
presenting government-wide information include information beginning in that year.




                                                165
 ~oJw~-s~ ~~
 CJleb dsse/$~ ~
 ~~ g'~ 9'Mcot '?I~
 (accrual basis of accounting)

                                                                                                Fiscal Year
                                                        2002             2003            2004                 2005



Governmental activities

 Invested in capital assets, net of related debt   $    81,537,951   $ 102,487,116   $ 116,030,733     $   103,257,234

 Restricted                                            110,517,391      83,620,939      73,221,577            89,304,369

 Unrestricted                                           19,317,649      28,942,068      56,278,585            83,082,473

Total governmental activities net assets               211,372,991     215,050,123     245,530,895         275,644,076

Business-type activities

 Invested in capital assets, net of related debt       305,972,546     318,991,847     329,571,308         329,739,394

 Restricted                                             72,506,228      82,983,074      77,770,228            87,927,460

 Unrestricted                                           58,605,470      34,106,610      44,350,110            48,062,169

Total business-type activities net assets              437,084,244     436,081,531     451,691,646         465,729,023

Primary government

 Invested in capital assets, net of related debt       387,510,497     421,478,963     445,602,041         432,996,628

 Restricted                                            183,023,619     166,604,013     150,991,805         177,231,829

 Unrestricted                                           77,923,119      63,048,678     100,628,695         131,144,642

Total primary government net assets                $   648,457,235   $ 651,131,654   $ 697,222,541    $    741,373,099



NOTE:
  The City of Winston-Salem began to report accrual information
  when it implemented GASB Statement 34 in fiscal year 2002.




                                                               166
                                                             Table 1



     2006             2007            2008                2009




$    90,796,111   $ 94,325,485    $ 69,927,450     $ 72,161,971

    101,531,485      90,595,951     103,397,364         105,663,336

     83,524,278      77,973,898      87,656,647          98,651,228

    275,851,874     262,895,334     260,981,461         276,476,535




    333,347,406     339,437,951     349,377,455         364,360,717

     89,405,390      99,438,524     104,079,943

     48,961,642      46,819,964      39,202,768         116,165,113

    471,714,438     485,696,439     492,660,166         480,525,830




    424,143,517    433,763,436      419,304,905         436,522,688

    190,936,875     190,034,475     207,477,307         105,663,336

    132,485,920     124,793,862     126,859,415         214,816,341

$   747,566,312   $ 748,591,773   $ 753,641,627    $ 757,002,365




                                                  167
 ~o/ 941~-cf~ ~~
 ~in- 9Zet- d~
 ~~ 7ff~ 9'i4ed- ~~
(accrual basis of accounting)




                                                                                                      Fiscal Year
                                                 2002              2003              2004                2005
Expenses
Governmental activities:
    General government                      $    23,062,095   $    27,930,444   $    29,677,194   $      28,494,119
    Public protection                            56,289,088        61,658,328        65,082,113          65,526,703
    Environmental health                         21,671,788        15,376,556        15,261,103          15,562,831
   Transportation                                15,796,397        19,419,711        15,830,222          15,826,305
   Culture and recreation                         8,870,313        10,737,939         9,174,612           9,594,439
   Community and economic development            15,238,051        21,653,205        19,431,549          24,043,194
   Human resources                                2,420,777           746,560           926,258             666,924
   Other                                            452,600           397,401           414,474             451,406
   Interest and fiscal charges                    7,813,210         8,604,688         8,521,655          10,149,209
Total governmental activities                   151,614,319       166,524,832       164,319,180         170,315,130

Business-type activities:
    Water and sewer utility                      51,445,356        51,522,074        53,688,215         61,622,417
    Solid waste disposal                          7,037,364         6,808,274         8,823,503          8,357,137
   Cemeteries                                       597,319           539,087           564,830            534,448
    Storm water management                        2,896,082         2,981,496         3,399,115          4,081,584
   Parking                                        4,262,711         4,545,943         4,637,521          3,392,039
   Transit Authority                              9,331,235         9,890,027        10,245,619         10,964,763
   Public facilities management                   7,703,487         7,132,377         7,470,551          6,271,277
   Fairgrounds                                    2,454,809         2,518,308         2,604,613          2,662,773
   Risk Acceptance Management Corporation         1,663,595         1,881,598         1,788,478          1,367,940
Total business-type activities                   87,391,958        87,819,184        93,222,445         99,254,378
Total primary government expenses           $   239,006,277   $   254,344,016   $   257,541,625   $    269,569,508




                                                        168
                                                               Table 2
                                                        (Page I of2)




     2006              2007              2008               2009



$    31,841,868   $    32,997,399   $    29,655,840   $ 31,861,386
     71,811,593        80,269,600        83,541,318      83,881,733
     16,515,052        18,099,833        19,099,861      18,703,681
     15,824,847        18,446,511        18,404,629      19,578,168
      9,784,663        10,553,732        15,720,537      17,574,870
     32,413,853        20,875,529        36,509,640      30,308,169
      1,012,730           881,264         1,093,643       1,153,345

      8,709,109        12,022,150        11,360,436      11,944,735
    187,913,715       194,146,018       215,385,904     215,006,087



     62,350,737        64,159,525        69,507,373   $ 71,705,131
      9,811,455        10,589,822        10,258,387       9,563,922
        573,437           577,910           588,177         536,961
      4,061,364         4,639,472         4,917,793       5,167,475
      3,268,909         3,117,979         3,265,321       3,326,812
     11,719,473        11,514,159        12,587,486      12,982,406
      7,640,589         7,732,755         8,061,802       7,682,326
      1,818,601         1,986,174         1,968,247       2,095,933
      1,788,194         2,029,159         2,241,983       2,776,167
    103,032,759       106,346,955       113,396,569     115,837,133
$   290,946,474   $   300,492,973   $   328,782,473   $ 330,843,220




                                                      169
 ~of WI~-cf~                                      9ZMd ~
 ~iA/ 9Zeb c9'f~
 ~a.s:b g'~ 9t&:at cy~
(accrual basis of accounting)




                                                                                                                          Fiscal Year
                                                           2002                  2003                  2004                  2005
Program Revenues
Governmental activities:
 Charges for services
    General government                              $      17,64 1,686     $     17,367,039      $     18,305,059     $      17,5 46,398
    Public protection                                         632,301               680, 199              876,257               899, 120
    Environmental health                                      881,606             3,305,321             2,891 ,984            2,218,728
    Transportat ion                                         3,5 14,614            3,105,658             2,222, 147            1,938,764
    Culture and recreation                                  1,364,004             1,267,201             1,226,342             1,274,684
    Community and econom ic development                     4,26 1.460            4,32 1,948            4,795,713             5,289,465
   Human resources
  Operat ing Grants and Contributions                      14,719,073            12,063,933            10,268,602            12,997,005
  Capital Grants and Contributions                         4,16 1,372             3, I 05,032               27,348           (2 ,164, 145)
Tota l governmental acti vit ies                          47, 176, 116           45,216,33 1           40,6 13,452           40,000,019

Business-type activities:
 Charges for Services
    Water and Sewer utility                               42,846,3 17            43 ,769,632           47,360,256            53,979, 166
    Solid waste disposal                                  11 ,984,656            11 ,9 16,257          11 ,972,556           12,06 1,232
    Cemeteries                                                460,026                431 , 193             560,246              446,437
    Storm wate r managem ent                               3,551 ,583             3,871 ,078            5,035,768             4,932,570
    Parking                                                2, 153,389             2,001,077             1,928,924             1,492, 181
    Trans it Authority                                     2,382,064              2,349,274             2,420,952             2,608,393
    Public facilities management                           4, 175,276             4,156,521             4, 131 ,602           3,399,445
    Fairground s                                            2,290,676             2, 136,515            2,280,307             2,542,250
    Risk Acceptance M anagem ent Corporation               (1 , 184,488)         (1,233,64 1)           1,095,255             1.112,871
 Operating Grants and Contribut ions                       4,01 2,051             4,459,895             5, 177, 193           6,875,455
 Capital Grants and Contributions                          6,884,876              6,271,439            11 ,089,359           12,615,35 1
Total business ~ type activities                          79,556,426             80,129,240            93,052,4 18          102,065,35 1
Total primary government program revenues                126,732,542            125,345,571           133,665,870           142,065,370

Net (Expense) Revenue
Governmental activities                                 ( 104,438,203)         (121 ,308,501)        ( 123,705,728)        (130.315 , 111)
Business activ ities                                       (7,835,532)            (7 ,689,944)            (170,027)           2,810,973

Tota l primary govern ment net expense              $   (112 ,273,735)     $   ( 128,998,445)    $   (123,875,755)    $    (127,504,138)



NOTE;
   The City of Winston ~ Salem began to repo rt accrua l information
   when it impl emented GASI3 Statement 34 in fi scal year 2002.




                                                                   170
                                                                     Table 2
                                                              (Page 2 of2)




      2006                2007                2008                2009




$    19,130,137     $    19,412,794     $    26,256,183       26,652,466
      1,065,904           1,423,323           1,686,869        1,700,590
      2,183,241           2,254,108           2,274,195        2,535,948
      2,035,810           2,592,938           3,149,001        3,298,243
      1,194,616           1,228,088           1,793,090        1,996,769
      6,013,966           6,237,059           8,809,956        7,915,373
         38,929              35,946              14,250           14,550
     12,107,041          13,997,989          15,772,756       19,648,565
        734,790             613,634             838,349          709,648
     44,504,434          47,795,879          60,594,649       64,472,152




     55,420,641          58,008,748          62,561,012        61,627,076
     11,899,765          12,557,971          12,073,446        10,612,828
        516,377             478,120             531,962           433,704
      5,248,114           6,538,868           7,817,979        10,456,955
      1,610,402           1,745,352           1,849,618         1,843,874
      2,708,086           2,500,681           2,607,827         2,986,463
      3,786,476           4,214,930           4,692,069         3,903,511
      1,931,021           2,299,625           2,690,216         2,468,397
      1,123,932           1,252,104           1,620,747         3,247,726
      5,177,343           5,333,787           5,456,834        10,040,806
      7,310,927           7,172,730          15,913,848         6,801,530
     96,733,084         102,102,916         117,815,558       114,422,870
    141,237,518         149,898,795         178,410,207       178,895,022


    (143,409,281)       (146,350,139)       (154,791,255)    (150,533,935)
      (6,299,675)         (4,244,039)          4,418,989       (1,414,263)

$   (149,708,956)   $   (150,594,178)   $   (150,372,2662 $ (151,948,198)




                                                            171
 ~ofW~-cf~ CJZo"d~
 ctJ~~OAd 'Gotot~UI/ ~dS6e/$
 ~~ ljg~ ~i6cd CV~
(accrual basis of accounting)


                                                                  2002                2003                2004
Net (Expense)/Revenue
Governmental activities                                 $         (104,438,203)   $   (121,308,501)   $   (123,705,728)
Business-type activities                                            (7,835,532)         (7,689,944)           (170,027)
Total primary government expense                        $         (112,273,735)   $   (128,998,445)   $   (123,875,755)

General Revenues and Other Changes in Net Assets
Governmental activities:
 Taxes
  Property taxes                                        $          66,430,430     $    72,778,639     $    73,744,390
  Sales taxes                                                      19,907,975          21,398,153          24,597,106
  Gross receipt taxes                                                 135,738             163,093             163,424
  Occupancy taxes                                                     444,388             439,243             452,629
 Beer and wine excise-state                                                               798,832             826,877
 Franchise taxes                                                    4,750,965           9,473,374           9,318,607
 Payments in lieu of taxes                                             71,888             118,903             119,094
 ABC store allocations                                                933,571             948,249             982,078
 Food stamp sales tax reimbursement                                    68,408
 Hold harmless                                                                                              3,278,918
 Inventory tax reimbursement                                        2,411,820
 Intangibles tax reimbursement                                      2,748,294
 Investment income (loss)                                                               5,552,264             855,349
 Miscellaneous                                                      4,475,029          13,938,841          12,772,015
 Gain on sale of fixed assets                                      10,915,773
 Transfers
  Government-wide                                                   (2,813,465)           (623,958)         (2,193,432)
  Fiduciary funds                                                    1,567,870

Total governmental activities expenses                            112,048,684         124,985,633         124,917,055

Business-type activities:
 Investment income (loss)                                           (7,053,875)         6,029,458          13,586,710
 Gain on sale of fixed assets                                        1,903,185             33,815
 Transfers
  Government-wide                                                   2,813,465             623,958           2,193,432

Total business-type activities expenses                            (2,337,225)          6,687,231          15,780,142
Total primary government                                          109,711,459         131,672,864         140,697,197

Change in Net Assets

Governmental activities                                             7,610,481            3,677,132          1,211,327
Business-type activities                                          (10,172,757)          (1,002,713)        15,610,115
Total primary government program revenues               $          (2,562,276)    $      2,674,419    $    16,821,442

NOTE:
  The City of Winston-Salem began to report accrual information
  when it implemented GASB Statement 34 in fiscal year 2002.

                                                                     172
                                                                                                                  Table 3

    Fiscal Year
       2005                    2006                    2007                    2008                        2009

$     (130,315,111)    $       (143,409,281)   $       (146,350,139)   $       (154,791,255)     $         (150,533,935)
         2,810,973               (6,299,675)             (4,244,039)              4,418,989                  (1,414,263)
$     (127,504,138)    $       (149,708,956)   $       (150,594,178)   $       (150,372,266)      $        (151,948,198)




$       79,029,833         $    81,924,443         $    85,716,719         $    100,466,949            $    98,208,818
        26,072,922              28,630,400              30,132,362               31,401,952                 28,630,607
           166,110                 163,728                 176,115                  179,432                    163,386
           482,353                 487,481                 527,549                  565,985                    480,226
           858,581                 863,670                 899,502                1,018,079                  1,009,971
         9,671,636               9,719,791              10,952,144               13,581,660                 14,019,735
            96,810                 129,640                 138,578                  157,276                    170,550
           988,158               1,009,480                 983,689                  986,919                    970,526

         2,878,330               2,575,355               2,051,017                1,828,326                   1,958,533



         3,200,651               3,601,449               8,331,803                5,244,269                    (450,329)
        39,303,375              16,823,693              13,108,867



         (2,320,467)             (2,312,051)             (2,023,690)             (2,553,465)                 3,135,376
                                                          1,500,000

       160,428,292             143,617,079             152,494,655              152,877,382                148,297,399


         8,905,937               9,973,039              17,951,162                    (8,727)               (12,548,089)



         2,320,467               2,312,051               2,023,690                2,553,465                  (3,135,376)

        11,226,404              12,285,090              19,974,852                2,544,738                (15,683,465)
       171,654,696             155,902,169             172,469,507              155,422,120                132,613,934



        30,113,181                 207,798               6,144,516               (1,913,873)                 (2,236,536)
        14,037,377               5,985,415              15,730,813                6,963,727                 (17,097,728)
$       44,150,558     $         6,193,213     $        21,875,329     $          5,049,854     =$===(:::19=,3=3::4,=264:=.)




                                                                   173
 ~ofcw~-s~ ~~
 9J~~~~~~
 S!'1l4b ?f~ ~i4cat CYetU6'
 (accrual basis of accounting)



                                                                                                             Pro![am Revenues
                                                          2002               2003               2004               2005
Function/Program

Governmental activities:
 General government                                  $    17,641,686    $    19,611,913    $    18,693,097    $    17,543,011
 Public protection                                         1,654,188          3,934,745          2,091,617           (209,045)
 Envirorunental health                                       881,606          3,305,321          2,891,984          2,218,728
 Transportation                                           13,875,626         10,249,766          8,261,330          8,916,299
 Culture and recreation                                    1,671,969          1,542,375          1,226,342          1,270,984
 Community and economic development                       10,421,648          6,572,211          7,449,082         10,260,042
 Human resources                                             938,649
Total goverrunental activities                            47,085,372         45,216,331         40,613,452         40,000,019

Business-type activities:
 Water and sewer utility                                  46,867,995         49,876,778         56,433,343         66,158,842
 Solid waste disposal                                     12,425,475         12,350,244         12,395,475         13,063,646
 Cemeteries                                                  466,517            431,193            560,246            446,437
 Stormwater management                                     3,643,322          4,049,179          6,326,999          4,940,570
 Parking                                                   2,153,389          2,306,045          2,259,782          3,242,858
 Transit Authority                                         8,211,658          6,056,406          7,551,409          7,156,432
 Public facilities management                              4,681,882          4,156,521          4,131,602          3,399,445
 Fairgrounds                                               2,290,676          2,136,515          2,298,307          2,544,250
 Risk Acceptance Management Corporation                   (1,184,488)        (1,233,641)         1,095,255          1,112,871
Subtotal business-type activities                         79,556,426         80,129,240         93,052,418        102,065,351
Total primary government                             $   126,641,798    $   125,345,571    $   133,665,870    $   142,065,370




NOTE:
   The City of Winston-Salem began to report accrual information
   when it implemented GASB Statement 34 in fiscal year 2002.




                                                               174
                                                           Table 4




    2006              2007             2008             2009




$   19,135,487   $   19,816,882    $ 26,295,990    $   26,654,346
     1,755,500        3,099,514        2,768,435        2,853,430
     2,183,241        2,256,358        2,274,195        2,535,948
     9,529,735        9,633,381       11,876,514       11,820,033
     1,221,616        1,450,563        2,043,090        2,000,469
    10,639,926       11,503,235       15,322,175       18,593,376
        38,929           35,946           14,250           14,550
    44,504,434       47,795,879       60,594,649       64,472,152



   61,850,072         63,948,216      77,613,850      67,466,014
   12,386,265         13,082,834      12,577,312      11,150,154
      516,377            478,120         535,239         433,704
    5,270,214          6,708,766       7,817,979      10,796,962
    2,086,484          2,203,322       2,330,329       2,323,055
    7,660,182          7,914,999       8,008,356       8,627,155
    3,907,537          4,214,930       4,621,530       7,909,703
    1,932,021          2,299,625       2,690,216       2,468,397
    1,123,932          1,252,104       1,620,747       3,247,726
   96,733,084        102,102,916     117,815,558     114,422,870
$ 141,237,518    $   149,898,795   $ 178,410,207   $ 178,895,022




                                                        175
 ~oiw~-s~ CJto"d~
 '#mtd 9J~ ctJ~ '#~
 ~04Q Cif~ '#i4cat cy~
(modified accrual basis of accounting)

                                                                                                   Fiscal Year
                                                         2002              2003             2004                 2005
General Fund
 Reserved                                           $  9,173,850      $   11,390,408   $   11,666,461    $   11,211,141
 Unreserved                                           16,572,854          15,172,940       16,220,896        22,755,077
Total general fund                                  $ 25,746,704      $   26,563,348   $   27,887,357    $   33,966,218


All Other Governmental Funds

 Reserved                                           $ 99,661,920      $   83,672,935   $   76,271,423    $   89,304,369
 Unreserved, reported in:
   Debt service fund                                    10,284,835         8,085,290        6,550,864            5,872,144
   Community and economic fund
Total all other governmental funds                  $ 109,946,755     $   91,758,225   $   82,822,287    $   95,176,513



NOTE:
  The City of Winston-Salem began to report accrual information
  when it implemented GASB Statement 34 in fiscal year 2002.




                                                                176
                                                            Table 5



     2006              2007             2008            2009

$   13,315,529    $   13,614,621   $   13,961,151   $   13,179,157
    23,974,529        21,460,896       25,433,091       24,017,078
$   37,290,058    $   35,075,517   $   39,394,242   $   37,196,235




$   101,531,485   $   90,595,951   $ 103,397,364    $   86,006,372

      4,296,440        6,868,056        9,768,793        7,066,182
-",---,-.",~~~ ~~~~~ -",-~~,=,(~602~) ~~~~(600~)
$   105,827,925   $   97,464,007   $ 113,165,555    $   93,071,954




                                                         177
 ~o/w~-s~ 9Zo,rd~
 ~ih9'muJ9J~ ctf~9'~
 ~ad ~~ 9'i4cat '?I~
(modified accrual basis of accounting)

                                                                                                                     Fiscal Year
                                                 2002               2003             2004              2005             2006
 Revenues

 Taxes                                     $    87,070,909    $ 94,528,111       $ 99,126,228     $   105,637,356   $ 111,366,633
 Licenses and permits                            8,031,080          8,480,964        9,728,194         10,187,248      10,860,648
 Intergovernmental                              29,865,391         32,430,923       25,381,524         25,326,375      27,139,767
 Investment income (loss)                        4,475,029          5,552,264          855,349          3,200,651       3,601,449
 Charges for services                           20,250,947         21,567,757       20,576,822         18,964,225      20,800,723
 Capital lease charges                          10,045,536         10,291,953       10,504,099         10,341,495      11,258,394
 Other                                           9,222,623         11,402,850       10,541,889          8,823,676      15,585,952

 Total revenues                                168,961,515        184,254,822      176,714,105        182,481,026     200,613,566



 Expenditures

 General government                             21,000,408         24,929,598       26,694,337        25,818,480       27,965,353
 Public protection                              54,124,240         57,295,086       60,341,989        61,506,244       67,283,045
 Environmental health                           13,749,231         14,393,604       14,453,173        14,267,988       14,775,741
 Transportation                                 14,135,906         13,169,093       11,511,652        11,448,605       11,173,082
 Culture and recreation                          9,431,623          9,340,822        7,862,352         8,232,408        8,302,780
 Community and economic development             19,864,922         23,513,643       18,421,328        18,966,666       19,154,190
 Human resources                                 2,419,987            746,560          922,274           666,378        1,012,730
 Other                                             452,600            397,401          414,474           451,406          490,774
 Capital outlay                                 36,614,443         31,307,692       33,016,363        10,368,490       25,276,836
 Debt service
   Capital lease charges                         6,381,808          7,786,847        6,748,694          6,598,966       6,592,444
   Principal retirement
    Bond                                         8,890,000          8,760,000        9,728,372          6,640,012       9,923,187
     Other                                      18,340,000          1,902,778       21,616,778          1,327,901      19,563,953
   Interest & fiscal charges
    Bond                                         5,198,929          4,410,667        4,077,975          4,654,434       4,420,149
    Other                                        2,316,737          2,547,748        4,513,987          5,181,793       5,460,416
 Total expenditures                            212,920,834        200,501,539      220,323,748        176,129,771     221,394,680
 Excess of revenues
 over (under) expenditures                     (43,959,319)       (16,246,717)     (43,609,643)        6,351,255       (20,781,114)




NOTE:
  The City of Winston-Salem began to report accrual information
  when it implemented GASB Statement 34 in fiscal year 2002.




                                                                  178
                                              Table 6
                                         (page 1 of 2)



    2007               2008               2009



$ 116,455,981     $   132,446,794    $   126,804,580
   10,664,205           9,082,732          8,815,503
   29,636,553          34,183,365         38,487,528
    8,331,803           5,244,269           (450,329)
   22,394,648          23,106,250         24,592,190
    3,140,037           3,262,726          3,431,044
    8,820,340           7,238,678          7,138,066

  199,443,567         214,564,814        208,818,582




   28,952,091          25,678,147         27,690,971
   75,321,802          78,869,654         79,184,420
   16,349,294          17,293,295         17,066,730
   12,290,228          13,629,137         13,225,902
    8,723,731          13,605,789         12,837,922
   19,240,018          21,260,511         25,515,962
      881,264           1,093,643          1,153,345
      688,479             598,751            722,426
   29,589,519          45,961,359         35,007,563

    7,762,814           9,265,035         10,662,994

     7,820,293          7,422,721          6,872,920
    19,633,684          1,806,893          2,290,480

    4,888,717           4,881,330          4,739,614
    7,102,531           6,531,300          7,190,418
  239,244,465         247,897,565        244,161,667

   (39,800,898)       (33,332,751)       (35,343,085)




                                                         179
~oJw~-s~ ~~
~ih'#mut~~ ctf~'#~
~~ 'i!:ipb '#i6cat cy~
(modified accrual basis of accounting)

                                                                                                                            Fiscal Year
                                                 2002                2003               2004              200S                 2006
Other Financing Sources (Uses)

Premium on special obligation bonds         $                  $                  $                  $                  $          8,339
Proceeds of refunding bonds                                                            4,886,640
Premium on refunding bonds
Payment to refunded bond escrow agent                                                  (4,653,606)
Issuances of special obligation bonds                                                                                          6,115,000
Issuances of general obligation bonds           35,950,000                            20,240,000            830,000           19,925,000
Discount on certificates of participation                                                                                        (79,084)
Issuance of certificates of participation       41,735,511          (1,110,531)       13,251,039         16,572,299           10,827,991
Premium on general obligation bonds                                                                                              271,171
Issuance of installment purchase contract
Transfers in                                     28,323,575         24,579,160         25,834,389         22,432,165          31,895,732
Transfers out                                   (29,569,170)       (24,593,798)       (28,027,821)       (24,752,632)        (34,207,783)
Total other financing
sources (uses), net                             76,439,916          (1,125,169)       31,530,641         15,081,832           34,756,366


Net change in fund balances                 $   32,480,597     $ (17,371,886)     $ (12,079,002)     $   21,433,087     $     13,975,252


Debt service as a
percentage of noncapital
expenditures                                         23.4%               15.3%             24.9%               14.4%               22.8%




                                                                   180
                                                Table 6
                                           (pa~e 2 of2}



     2007               2008                 2009



$                  $                   $
                                              8,435,000
                                                642,702
                                             (9,072,900)

    29,746,129          5,105,000

                       27,201,489            9,911,299

                        23,600,000
     27,253,006         35,046,232          41,015,868
    (27,776,696)       (37,599,697)        (37,880,492)

    29,222,439         53,353,024           13,051,477



$ (10,578,459)     $   20,020,273      $   (22,291,608)




         22.2%                 13.8%                14.9%




                                                            181
~oJWI~S~~~
~oP~~S~ q;~9"~
~aR Cifipb 9"tBcat CV~
(modified accrual basis of accounting)                                                        Table 7



    Fiscal                                                   Gross       Occupancy
    Year                 Property         Sales Tax       Receipts Tax      Tax '         Total

    2002              $ 66,582,808       $ 19,907,975     $   135,738    $ 444,388   $    87,070,909
    2003                72,527,622         21,398,153         163,093      439,243        94,528,111
    2004                73,913,069         24,597,106         163,424      452,629        99,126,228
    2005                78,915,971         26,072,922         166,110      482,353       105,637,356
    2006                82,085,024         28,630,400         163,728      487,481       111,366,633
    2007                85,619,955         30,132,362         176,115      527,549       116,455,981
    2008               100,299,425         31,401,952         179,432      565,985       132,446,794
    2009                97,530,361         28,630,607         163,386      480,226       126,804,580




                                                        182
 ~of 9JliA4JoA,--cf~ ~ ~
 'G~$i'~d~91~
 ~~          'Gen- t;7/6cd c:y~
 (dollars in thousands)                                                                                                    Table 8
                                                                                                      Property
                                                                                                      Tax Rate       Ratio of
  Fiscal Year        Tax Year                                                Public      Total        (per $100   Assesed Value
    Ended             Ended             Real              Personal          Service     Assessed      Assessed    to Estimated
   June 30          December 31       Property            Property         Companies     Value         Value)     Actual Value

      2000                1999      $ 9,267,407       $    2,990,361       $ 314,550   $ 12,572,318      0.5000      100
      2001                2000         9,448,121           3,129,041         310,287    12,887,449       0.4967      100
      2002                2001        11,062,500           3,152,529         333,088    14,548,117       0.4600      100
      2003                2002        11,277,391           3,159,950         325,094    14,762,435       0.4950      100
      2004                2003        11,496,197           3,092,923         308,612    14,897,732       0.4950      100
      2005                2004        11,719,431           3,125,423         306,565    15,151,419       0.5250      100
      2006                2005        13,369,143           3,181,476         312,571    16,863,190       0.4850      100
      2007                2006        15,016,638           3,511,442         336,318    18,864,398       0.4850      100
      2008                2007        15,469,942           3,804,520         352,039    19,626,501       0.4900      100
      2009                2008        15,820,711           3,902,661         339,807    20,063,179       0.4900      100

Note:
   Taxable property was revalued on January 1, 2005

Source:
   Forsyth County Tax Department




                                                                     183
~4CWin8l.onl-$~ ~~
'fIJ~ ~l4\'I ~
~~ ~M-' ~i4cat cv~
Direct and Overla22in~ Local Government Jurisdictions                                                           Table 9

 Fiscal Year                       City of Winston-Salem
   Ended              General          Mass Transit     Debt Service                            Forsyth     Combined
   June 30             Fund              Tax Fund          Fund                Total Citl       Countl      Tax Rate

    2000                  0.4231              0.0166             0.0603              0.5000        0.6625       1.1625
    2001                  0.4174              0.0190             0.0603              0.4967        0.6745       1.1712
    2002                  0.3878              0.0172             0.0550              0.4600        0.6400       1.1000
    2003                  0.4248              0.0152             0.0550              0.4950        0.6920       1.1870
    2004                  0.4248              0.0152             0.0550              0.4950        0.6920       1.1870
    2005                  0.4548              0.0152             0.0550              0.5250        0.7080       1.2330
    2006                  0.4210              0.0140             0.0500              0.4850        0.6660       1.1510
    2007                  0.4192              0.0158             0.0500              0.4850        0.6660       1.1510
    2008                  0.4242              0.0158             0.0500              0.4900        0.6960       1.1860
    2009                  0.4242              0.0158             0.0500              0.4900        0.6960       1.1860

Note:
  All tax rates are expressed in dollars of tax per $100 of assessed valuation. The tax rates
  were adjusted during the fiscal years ended June 30, 2002 and June 30, 2006 to reflect
  the revaluation of taxable property.




                                                                  184
 ~o/WI~-c>~ ~~
 9~9~W'~9~
 ~ CV~dM W'en- ~dp                                                                                                      Table 10


                                                              2009                                          2000
                                              Taxable                  Percentage            Taxable               Percentage
                                              Assessed                   of Total            Assessed                of Total
               Name                            Value          Rank    Assessed Value          Value          Rank Assessed Value

R.I. Reynolds Tobacco Company, U.S.A. S       566,307,350                  2.82%         S    672,343,800              5.34%

Wachovia Bank/Wells Fargo                     343,890,350       2          1.71%              170,807,400      2       1.36%

JG Winston Salem LLC                          203,206,800       3          1.01%

HighwoodslForsyth Ltd Partner                  170,715,500      4          0.85%

Wake Forest University                         153,049,560      5          0.76%              162,935,000      4       1.29%

Lowes Home Centers Inc                         140,223,510      6          0.70%               94,537,600      6       0.75%

Dell Products LP                              124,069,010       7          0.62%

Hanesbrands Inc                               119,773,670       8          0.60%

Wal-Mart Real Estate Business Trust            76,605,860       9          0.38%               51,829,400      9       0.41%

Wells One West Fourth LLC                      75,765,240      10          0.38%

Sara Lee                                                                                       84,616,600      7       0.67%

Winston-Salem Joint Venture                                                                   167,736,000      3       1.33%

BellSouth Telephone and Telegraph                                                             132,717,400      5       1.05%

CPC International                                                                              64,751,800      8      0.51%

Piedmont Natural Gas                                                                           48,783,200      10     0.39%

Total                                     S 1,973,606,850                  9.46%         S 1,651,058,200              13.10%



Note:
  Above taxable assessed valuations are as of January 1,2009 and 2000 respectively, and the associated tax levies
  ofS.49 and .50 were due in fiscal year ended June 30, 2009 and 2000 respectively.

Source:
  Forsyth County Tax Department and 2000 City of Winston-Salem CAFR.




                                                                     185
186
 ~oJCUI~-S~ ~~
 ~~~~2"~aNi~
 2"~ ~en- ;7i4c4t j{~                                                                                                        Table 11


   Fiscal                                 Collected within the
    Year         Taxes Levied           Fiscal Year of the Levy            Collections               Total Collections to Date
   Ended              for                                Percentage      in Subsequent             Property          Percentage
  June 30,        Fiscal Year           Amount            of Levy            Years                 Amount              of Levy

    2000         $ 63,479,411       $   62,308,098          98.2         $      903,205     $        63,211,303       99.6
    2001           64,245,243           62,849,037          97.8                939,056              63,788,093       99.3
    2002           67,134,524           65,640,913          97.8              1,125,850              66,766,763       99.5
    2003           72,958,891           71,197,678          97.6              1,112,534              72,310,212       99.1
    2004           73,780,942           72,292,082          98.0              1,416,929              73,709,011       99.9
    2005           79,308,622           77,602,596          97.8              1,250,335              78,852,931       99.4
    2006           81,981,371           80,533,268          98.2              1,334,033              81,867,301       99.9
    2007           85,909,892           84,289,823          98.1              1,192,278              85,482,101       99.5
    2008          100,619,980           98,746,306          98.1              1,324,903             100,071,209       99.5
    2009           98,717,116           95,998,394          97.2              1,459,598              97,457,992       98.7

Note:
   (1) Tax collections do not include penalties and interest of $244,316 and refunds of $171,946
        in the fiscal year 2009.
   (2) Outstanding delinquent taxes includes amounts considered uncollectible. The allowance for
       uncollectible accounts at June 30,2009 was $2,281,694.




Source:
   Forsyth County Tax Department




                                                                      187
 ~oi CW~-cf~ CJto",d ~
 ~ofW~-cf~ ~~
 ~oi~f}5e&~ ~~
 ~of~fjJeb~'G~
             g''fM
          ~t8cat
 ~ad ~tfM 7iscd JI~
 ~oa

                             Governmental Activities                                     Business-type Activities



                     General                              Special        Special                                                        Total
    Fiscal          Obligation         Contracts         Obligation     Obligation             Revenue              Contracts          Primary
    Year             Bonds              Payable           Bonds          Bonds                  Bonds                Payable          Government

    2002        $    96,791,902    $    77,266,934   $                 $ 5,145,000         $   171,775,000     $     49,694,914   $    400,673,750
    2003             88,031,902         77,267,996                          19,240,000         240,285,000           47,859,877        472,684,775
    2004             98,748,530         77,829,986                          18,215,000         233,885,000           44,909,487        473,588,003
    2005             92,938,518         95,110,542                          17,160,000         279,790,000           30,211,073        515,210,133
    2006            102,940,331         90,206,608        6,115,000         16,165,000         272,085,000           31,244,714        518,756,653
    2007             95,280,038         92,752,816        5,955,000         15,000,000         339,455,000           28,259,653        576,702,507
    2008             93,127,317        132,667,682        5,790,000         13,800,000         329,865,000           42,367,375        617,617,374
    2009             85,949,396        129,776,470        5,620,000         12,555,000         428,160,000           38,104,567        700,165,433

Notes:
   See Table 17 for personal income and population data.
   Information unavailable before 2002.




                                                                      188
                   Table 12




Percentage
of Personal        Per
 Income           Capita

   6.78   %   $      2,124
   7.87              2,505
   7.26              2,442
   7.53              2,635
   7.45              2,606
   7.32              2,609
   7.70              2,746
   8.48              3,064




                              189
1 90
190
 ~oJCW~cf~ ~~
 ~ofW~-cf~
 ~of                cFJemuat
 ~oJ c£j~ 9;Jom/uif}5eIP ~
          9JomIutfJ5eb~
 ~46b
 ~asb        g''fb 9'iBed j1~
             g''fk f7i4eat ~                                                                                      Table 13



                                                     General Bonded Debt Outstanding

                                                                            Percentage of
                            General                                         Actual Taxable
    Fiscal                 Obligation             Assessed Valne
                                                           Value               Value of                         Per
    Year                     Bonds                (In Thousands)                Property                      Capita (1)

    2002               $    96,791,902           $     14,548,116                0.67%                    $        513.20
    2003                    88,031,902                 14,762,435                0.60%                             466.52,
                                                                                                                   466.52
    2004                    98,748,530                 14,897,732                0.66%                             509.08
    2005                    92,938,518                 15,151,419                0.61%
                                                                                 0.61 %                            475.30
    2006                   102,940,331                 16,863,190                0.61 %
                                                                                 0.61%                             517.13
    2007                    95,280,038                 18,864,398                0.51%
                                                                                 0.51 %                            431.10
    2008                    93,127,317                 19,626,501                0.47%                             414.10
    2009                    85,949,396                 20,063,179                0.43%                             376.21

Note:
   Details regarding the city's outstanding debt can be found in the notes to the financial statements.
   Information unavailable before 2002.
                                       Tab~e
  (I) Population data can be found in Table 17.
  (1)




                                                                    191
 ~oJWiA4«Hz-S~ ~~
 c;e~fJ5e&~
 c;e~ ~~ ~i6eoJ,                     ,?/eM8'
(dollars in thousands)




                                              2000              2001              2002               2003                2004

Debt Limit                               $ 1,005,785,422   $ 1,030,995,885   $ 1,163,849,311   $   1,180,994,810   $   1,191,818,556

Total net debt applicable to limit            74,145,229        63,160,824       87,122,390          80,209,616          92,977,820

Legal debt margin                        $   931,640,193   $   967,835,061   $ 1,076,726,921   $   1,100,785,194   $   1,098,840,736

Total net debt applicable to the limit
as a percentage of debt limit                7.37%             6.13%             7.49%              6.79%               7.80%




                                                                   192
                                                                                                Table 14



                                                      Legal Debt Margin Calculation for 2009

                                          Assessed value                              $ 20,063,178,544
                                          Debt Limit (8 % of assessed value)              1,605,054,284
                                          Debt applicable to limit:
                                              General obligation bonds                      85,949,396
                                          Statutory deduction:
                                              Debt service Fund                              (7,066,182)
                                                                                             78,883,214
                                          Legal debt margin                           $   1,526,171,070



              Fiscal Year
      2005                  2006                 2007                   2008                2009

$   1,212,113,482   $   1,349,055,193     $   1,509,151,879      $    1,570,120,082   $   1,605,054,284

      87,066,374             98,643,891          88,411,982              83,358,524         78,883,214

$   1,125,047,108   $   1,250,411 ,302    $   1,420,739,897      $    1,486,761,558   $   1,526,171,070



     7.18%                  7.31%               5.86%                  5.31 %              4.91%




                                                                193
194
 ~of941~-S~
 ~o/ CWVWon--cf~ ~~
gi4edoM~ct1~d~geIQ
f$Vtecbmut~ ctJ~d~f$e&
dS(of ;Jttne'.J~
dS(o/ 7~.J(), 2009
(dollars in thousands)                                                           Table 15



                                                                           Estimated
                                                                            Sbare of
                                                                            Share
                                                        Estimated          Direct and
                                       Debt             Percentage        Overlapping
Goyernmental (Joit
             Unit                   Outstanding         Applicable           Debt

Debt repaid with property taxes

  Forsyth County                    $   493,576              63.82%   $          315,000

City direct debt                                                                 221,346

Total direct and overlapping debt                                     $          536,346




                                                  195
 ~of CW~-cf~ 9'lo-td ~
9~-~~
 ~(I4Q 7Cipb              9'Meat cy~
(dollars in thousands)

                                                       Revenue Bonds
                                                Net Revenue
   Fiscal            Gross         Operating    Available for           Debt Service
   Year             Revenues       Expenses     Debt Service     Principal        Interest    Coverage

    2002           $     46,868   $    30,987   $    15,881         $   3,710    $   13,267     1.2x

    2003                 49,877        30,652        19,225             5,835         9,469     1.3x

    2004                 56,398        32,933       23,465              6,400        10,108     l.4x

    2005                 66,159        33,648       32,511              7,635        10,518     1.8x

    2006                 61,818        35,826       25,992              7,705        12,053     1.3x

    2007                 63,885        37,134       26,751              8,040        11,703     l.4x

    2008                 77,613        39,743        37,870             9,590        10,974     1.8x

    2009                 67,469        37,065       30,404              10,735       12,975     1.3x


NOTE:
 Information unavailable before 2002




                                                              196
                                               Table 16

               Special Obligation Bonds

   Sales              Debt Service
    Tax         PriJ;lcipai    Interest       Coverage

$ 19,907,975   $ 1,180,000    $    829,610     9.91x

  21,398,153     1,235,000         937,503     9.85x

  24,597,107     1,025,000        1,279,701    1O.67x

  26,072,922     1,055,000         780,476     14.21x

  28,630,400     1,150,000         875,516     14.14x

  30,132,362     1,325,000         873,894     13.7x

  31,401,952     1,365,000         834,147     14.3x

  28,630,607     1,415,000         792,357     13.0x




                                                          197
 ~ofW~cf~ ~~
!15~omJ~~cf~
 ~tI4D ~lW' 9'Meat               J/eM8'                                                                   Table 17

   Fiscal Year
      Ended                          Personal           Per Capita                  Public School   Unemployment
     June 30        Population       Income               Income       Median Age    Enrollment         Rate

      2000           185,776      $ 5,761,656,864   $         31,014      36.7        42,681            2.8

      2001           188,605       5,524,429,055              29,291      36.6        43,682            3.7

      2002           188,605       5,577,992,875              29,575      36.2        44,673            5.8

      2003           188,699       5,680,783,395              30,105      36.3        46,500            5.7

      2004           193,973       6,205,390,243              31,991      36.4        47,619            5.3

      2005           195,536       6,390,116,480              32,680      36.5        48,256            5.1

      2006           199,061       6,829,981,971              34,311      36.6        49,599            4.5

      2007           221,014       7,882,685,324              35,666      36.7        50,708            4.8

      2008           224,889       8,020,891,074              35,666      36.7        51,408            5.9

      2009           228,459       8,253,766,752              36,128      37.8        51,761            10.4

Sources:
   NC State Demographics - Internet
   Bureau of Economic Analysis
   Winston-Salem/Forsyth County School System
   NC Employment Security Commission - Internet




                                                           198
 ~ofCW~-cf~ ~~
 fj)~~~
 ~ ?I~t:tM ~en- ?I~dE                                                                                              Table 18




                                                                  2009                                 2000
                                                                          Percentage                           Percentage
                                                                         of Total City                        of Total City
Employer                                        Employees         Rank   Employment      Employees   Rank     Employment

Wake Forest University Baptist Medical Center      11,763            I      5.44%           6,314       I       2.94%
Novant Health, Inc.                                 8,249            2      3.81%           5,950       3       2.77%
Winston-Salem /Forsyth County School System         7,550            3      3.49%           4,700       7       2.19%
Hanesbrands, Inc.                                   3,560            4      1.65%
WachovialWells Fargo Bank                           3,400            5      1.57%           5,333       6       2.48%
Reynolds American, Inc.                             2,939            6      1.36%           5,930       4       2.76%
Wake Forest University                              2,435            7      1.13%           5,381       5       2.50%
City of Winston-Salem                               2,343            8      1.08%           2,416       9       1.12%
Forsyth County                                      2,140            9      0.99%
Branch Bank & Trust Company                         1,437           lO      0.66%
Budd Services, Incorporated                                                                 2,800       8       1.30%
SaraLee                                                                                     6,000       2       2.79%
US Ainvays                                                                                  2,180      10       1.01%



Total                                              45,816                  21.18%          47,004               21.87%




                                                            199
 ~oJW~-c:f~ ~~
 ~of941~-S~
 7tdt-~-'iff~        ctJ~ Cif:~
 fJ'aIt-1in«!r- ~~ ~ q;~ ~~
~fJ'~/9~
~7~/~~
 ~124b ~tfM fJ'i6cd ~
 ~aU 'ifftfAb 7tscat j{~
                                                        Full-time-Equivalent Employees as of June 30
                                          2002          2003         2004        2005          2006           2007
Functjou/Program
Function/Program

General government (2)                      356.7         346.8        351.1         332.4            335.1     329.5
Public protection                           911.0         913.0        915.0         921.0            949.0   1,022.0
Environmental health                        229.3         221.7        221.1         212.4            214.6     246.5
Transportation                              199.5         213.2        212.9         213.5            211.2     139.7
Culture and recreation (I)
                       (1)                  235.2         193.8        188.6         180.1            181.4     273.5
Community & economic development            147.2         147.6        155.5         140.4            145.9     155.9
Human resources                               3.5           4.0          5.0           4.0              4.0       4.0
Water & sewer utility                       302.1         301.1        313.1         310.9            317.9     321.4
Solid waste disposal                         37.4          37.4         37.4          37.0             39.5      40.5
Cemeteries                                   10.3          10.5         10.5          10.0             10.0      10.0
Storm water management
Stormwater                                   43.0          43.0         43.0          43.0             43.0      43.0
Transit Authority                             1.0           1.0          1.0           1.0              1.0       1.0
Public facilities management                126.8         119.4        107.5          85.5             85.4      85.4

      Total                               2,603.0       2,552.5      2,561.7       2,491.2       2,538.0      2,672.4



Source:
   City of Winston-Salem Budget Department
   Information unavailable before 2002.
   (1) Vegetation management employees were merged in FY06-07 into the culture and recreation area.

   (2) Contact center employees were moved from various departments in 2009.




                                                               200
          Table 19



2008      2009



  338.8     352.2
1,035.0   1,034.0
  240.9     231.5
  141.3     134.3
  273.7     265.7
  158.7     166.6
    4.0       4.0
  333.9     335.9
   45.0      46.7
    9.3       9.3
   47.0      47.0
    1.0       1.0
   79.8      73.1

2,708.4   2,701.3




                     201
 ~oiWl~-cf~ ~~
 ~~~~ST~Q~
 st~ ~tfM STt6cat                    J/eat'8'
                                                                                            Fiscal Year
                                                     2002        2003           2004        2005          2006         2007
Function/Program

Public protection
  Police
     Physical arrests                                24,537       24,469        26,651       26,365       28,069        27,618
     Traffic violations                              52,910       49,358        58,940       55,788       55,419        65,587
  Fire
     Fires extinguished                               1,393          930          1,074         956        1,085          1,234
     Emergency medical responses                     11,218       12,436         12,670      13,370       13,997         15,119
     Hazardous materials repsonse                       190          175             97         140          143            145
Environmental health
  Sanitation services
     Residential refuse collected (tons)             43,017       41,919        42,704       42,693       43,709        49,780
     Residential refuse collection points            64,000       65,300        65,300       65,300       67,000        73,500
     Percentage of collections made at curbside           2            2             3           15           30            41
     Tons of leaves collected                        14,160       10,383        11,424       11,164       11,186        12,000
     Tons of brush collected                          9,089       10,997        17,102       14,639       17,307        15,000
     Tons of goods recycled                             N/A         N/A          7,657        7,795        7,494        10,850
     Percentage of households participating
       in yard cart program                                 30          17             20          20            21           22
Transportation services
     City street mileage maintained (lane miles)       1,877       1,891          1,908       1,943         1,959         2,157
     Street cuts repaired                               N/A         N/A            N/A          798           819           823
     Percentage of streets rated 85 or better             74          74             67          67            69            67
     Traffic intersections studied                       477         550            588         600           598           642
     Traffic signal repairs                            1,996       2,234          2,390       2,371         1,631         1,657
     Traffic signs upgraded/repaired                   2,338       2,127          2,987       1,322         1,463         2,248
     Traffic signs new installations                   1,743       1,741          2,261       1,769         1,601         1,305
     Pavement markings renewed (feet)              1,950,534     916,374      2,471,546     655,346     1,536,064     1,958,858
Culture and recreation
  Parks and recreation
     Swimming pool attendees                         92,896       60,645        69,906       80,040       78,242        76,117
     Golf rounds                                     21,724       18,662        18,365       16,959       16,470        17,030
     Participants in special populations             43,869       43,123        53,394       25,143       27,741        25,635
Community development
     Housing code violations corrected                3,199        2,750         2,841        2,251        2,686         2,113
     Building permits isssued                         5,197        6,000         5,499        4,842        4,964         4,749
     Building inspections conducted                  22,304       25,253        29,257       31,989       33,374        31,600

Source:
   City of Winston-Salem Departments




                                                                        202
                 Table 20

             (Page 1 of 2)



 2008            2009




  30,532           32,713
  63,322           63,011

   1,180              935
  15,999           16,075
     204              161



  51,394           51,949
  73,500           73,670
      50               65
  10,876           15,983
  14,911           17,238
  10,850           10,301

        20              20

    2,178          2,187
      781            612
       64             55
      801            943
    1,533          1,365
    1,174          2,698
      798          1,200
1,605,345        406,470



  75,361          66,407
  18,577          18,336
  32,588          26,805

   3,254           2,838
   3,918           2,915
  25,464           17,602




                             203
   ~ofW~-cf~ ~~
   ~f7~~9'~Q~
   ~~ 7ff~ 9'i4eat JI~
                                                                                                  Fiscal Year
                                                         2002         2003          2004          2005           2006         2007

    Zoning complaints responded to                           697         1,157            856         901            843             849
Economic development
     MWBE firms certified                                       65           88            53            56             41            44
     Small business loans approved                               5            5             2             4              4             3
Water & sewer utility
     New connections                                        N/A         4,920         3,826         3,512          3,347        3,359
     Water main breaks                                        59           65            38           114             75          126
     Average daily consumption (MGD)                      42,900       41,300        41,200        40,700         40,400       40,200
     Peak daily consumption (MGD)                         67,200       59,600        55,100        57,700         57,000       63,700
     Storage Capacity (MGD)                               44,200       44,200        54,200        54,200         54,200       54,200
     Average daily sewage treatment (MGD)                 33,020       36,700        34,230        34,610         33,370       34,130
     Treatment capacity (MGD)                             51,000       51,000        51,000        51,000         51,000       51,000
Solid Waste Disposal
  Hanes Mill Road Landfill
     Tons of waste landfilled                               N/A           N/A       274,561       265,500        257,370      276,116
     Number of trips                                        N/A           N/A       122,659       127,000        121,050      118,583
  Old Salisbury Road C & 0 Landfill
     Tons ofHHW collected                                   N/A           N/A              207        225            196          195
     Number of trips                                        N/A           N/A            4,346      4,500          4,269        4,601
Transit Authority
     Total route miles                                 2,073,335     2,010,820     2,080,109     1,994,161      1,873,222    1,353,339
     Passengers                                        2,931,767     2,759,200     2,848,537     2,863,143      2,973,037    2,767,647
Public assembly facilities
     Complex bookings                                         92            92            87            77             83          169
     Complex usage days                                      463           455           485           456            488          772
     Total spectators                                  1,127,208     1,073,408     1,124,454     1,097,803      1,213,378    1,226,507
     Convention events                                        45            45            45            99             73           82
Fairgrounds
     Fair attendees                                     331,605       314,307       341,811       344,141        297,294      316,682

NOTE:
     Information unavailable before 2002.
 (I) Certifications for MWBE firms are being done at the state level starting in 2009.




                                                                             204
                 Table 20

             Page (2 of 2)


 2008            2009

     597              580

        51               o (1)
         3               4

   2,854            2,386
     154              175
  40,500           36,800
  57,000           54,100
  54,200           54,200
  31,570           31,801
  51,000           51,000



 250,627           239490
 114,809           103443

     218               191
   4,779             4,888

1,323,835      1,511,565
2,773,207      2,957,173

      163              164
      755              727
1,321,840       1,096,911
      132              225

 371,219         310,160




                                 205
    941~-cf~ ~
~of CWin4ton--S~ CJlo,r,d ~
 ~ dsseb cf~~ g-mzetton,,/f/J~
 ~d~S~~9'~Q~
          g-i6ed c:y~
~1Mb ~tfb 9'i6t:d cy~
~ad
                                                                      Fiscal Year
                                          2002        2003         2004        2005        2006        2007        2008
Function/Program

Police
  Stations                                        1           1         1              1           1           1
Fire
  Stations                                       17          17        17             18          18          18          18
Environmental health
  Collection trucks                              32          30        28             28          28          32          32
Transportation
  Streets (miles)                            875         881          881         890         980         993       1,002
  Streetlights                            27,210      27,644       27,764      27,938      28,392      31,153      31,492
  Traffic signals                            349         353          349         348         353         364         368
Culture and recreation
  Acreage                                  3,354       3,365        3,379       3,323       3,323       3,323       3,336
  Number of parks                             75          75           76          76          76          76          76
  Golf Courses                                 2           2            2           2           2           2           2
  Fishing and boating lakes                    2           2            2           2           2           2           2
  Swimming pools                               8           8            8           8           8           8           8
  Tennis courts                              119         114          114         114         114         114         112
  BasebaWsoftball diamonds
  Baseball/softball                           47          47           47          47          45          45          45
  Soccer/footballl fields                     60          60           60          60          60          60          60
  Recreation centers                          20          18           17          17          17          17          17
Water and Sewer Utility
  Water mains (miles)                      1,872       1,905        1,944       1,944       2,016       2,035       2,068
  Sanitary sewer (miles)                   1,379       1,391        1,413       1,439       1,459       1,481       1,559

Source:
   City of Winston-Salem Departments
   Information unavailable before 2002.




                                                             206
Table 21



2009




       18

       31

 1,006
31,910
   371

  3,336
     76
      2
      2
      8
    112
     45
     60
     17

  2,068
  1,675




            207
208
209
 CHERRY
 BEKAERr&..
 BEKAERf&.
 HOLLAND
 GRJlFllDPUHl Je
 ACt (JU"JA;-JJS &
 CONSl LTAN J S




  Independent Auditors' 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



To the Honorable Mayor and
 Members of the City Council
City of Winston-Salem, North Carolina


We have audited the accompanying financial statements of the governmental activities, the
business-type activities, each major fund, and the aggregated remaining fund information of the
City of Winston-Salem, North Carolina (the "City"), as of and for the year ended June 30, 2009,
which collectively comprises the City's basic financial statements, and have issued our report
thereon dated October 12, 2009. 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.

Internal Control Over Financial Reporting
In planning and performing our audit, we considered the City's internal control over financial
reporting as a basis for designing our auditing procedures 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's internal control over financial reporting. Accordingly, we do not
express an opinion on the effectiveness of the City's internal control over financial reporting.

Our consideration of internal control over financial reporting was for the limited purpose
described in the first paragraph of this section and would not necessarily identify all deficiencies
in internal control over financial reporting that might be significant deficiencies or material
weaknesses. However, as discussed below, we identified a certain deficiency in internal control
over financial reporting that we consider to be a significant deficiency.

A control deficiency 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 misstatements on a timely basis. A significant deficiency is a control
deficiency, or combination of control deficiencies, that adversely affects the City's ability to
initiate, authorize, record, process, or report financial data reliably in accordance with generally
accepted accounting principles such that there is more than a remote likelihood that a
misstatement of the City's financial statements that is more than inconsequential will not be
prevented or detected by the City's internal control. We consider the deficiency, 09-01,
described in the accompanying schedule of findings and questioned costs to be a significant
deficiency in internal control over financial reporting.



                                                210
A material weakness is a significant deficiency, or combination of significant deficiencies, that
results in more than a remote likelihood that a material misstatement of the financial statements
will not be prevented or detected by the City's internal control.

Our consideration of the internal control over financial reporting was for the limited purpose
described in the first paragraph of this section and would not necessarily identify all deficiencies
in internal control over financial reporting that might be significant deficiencies or material
weaknesses. However, we believe the significant deficiency described above is a material
weakness.

Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are
free of material misstatement, we performed tests of its compliance with certain provisions of
laws, regulations, contracts and grant agreements, noncompliance 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 noncompliance or other matters that are required to be reported under Government Auditing
Standards.

The City's response to the finding identified in our audit is described in the accompanying
schedule of findings and questioned costs. We did not audit the City's response and,
accordingly, we express no opinion on it.

This report is intended solely for the information and use of the audit committee, management,
others within the organization, members of City Council, and federal and State awarding
agencies and pass-through entities and is not intended to be and should not be used by anyone
other than these specified parties.

CHERRY, BEKAERT & HOLLAND, L.L.P.




Raleigh, North Carolina
October 12, 2009




                                                211
 CHERRY
 BEKAEIU&.
 HOLLAND
 CERTIFIED PUBLIC
 ACCOUNTANTS &
 CONSt:LTANTS




  Independent Auditors' Report On Compliance With Requirements Applicable To Each
      Major Federal Program And Internal Control Over Compliance In Accordance
                          A-i33
        With OMB Circular A-133 and the State Single Audit Implementation Act
             OMS



To the Honorable Mayor and
 Members of the City Council
City of Winston-Salem, North Carolina


Compliance
We have audited the compliance of the City of Winston-Salem, North Carolina (the "City"), with
                                                                                        Sudget
the types of compliance requirements described in the U.S. Office of Management and Budget
(OMB) Circular A-133 Compliance Supplement and the Audit Manual for Governmental Auditors
(OMS)
in North Carolina, issued by the Local Government Commission, that are applicable to each of
its major federal programs for the year ended June 30, 2009. The City's major federal programs
are identified in the summary of auditors' results section of the accompanying schedule of
findings and questioned costs. Compliance with the requirements of laws, regulations, contracts
and grants applicable to each of its major federal programs is the responsibility of the City's
management. Our responsibility is to express an opinion on the City's compliance based on our
audit.

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
OMS
OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and
the State Single Audit Implementation Act. Those standards, OMS Circular A-133, and the State
                                                             OMB
Single Audit Implementation Act require that we plan and perform the audit to obtain reasonable
assurance about whether noncompliance 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's compliance with those
requirements and performing such other procedures as we considered necessary in the
circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit
does not provide a legal determination on the City's compliance with those requirements.

In our opinion, the City complied, in all material respects, with the requirements referred to
above that are applicable to each of its major federal programs for the year ended June 30,
2009.

Internal Control Over Compliance
The management of the City is responsible for establishing and maintaining effective internal
control over compliance with requirements of laws, regulations, contracts and grants applicable
to federal programs. In planning and performing our audit, we considered the City's internal
control over compliance with requirements that could have a direct and material effect on a
                                              212
major federal program in order to determine our auditing procedures for the purpose of
expressing our opinion on compliance, 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.

Our consideration of the internal control over compliance was for the limited purpose described
in the preceding paragraph and would not necessarily identify all deficiencies in internal control
that might be significant deficiencies or material weaknesses as defined below. However, as we
discussed below, we identified a certain deficiency in internal control over compliance that we
                 significant
consider to be a Significant deficiency.

A control deficiency in an entity's internal control over compliance 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 noncompliance with a type of
                                                                        Significant
compliance requirement of a federal program on a timely basis. A significant deficiency is a
control deficiency, or combination of control deficiencies that adversely affects the City's ability
to administer a federal program such that there is more than a remote likelihood that
noncompliance with a type of compliance requirement of a federal program that is more than
inconsequential will not be prevented or detected by the City's internal control. We consider the
deficiency in internal control over compliance described in the accompanying schedule of
findings and questioned costs as item 09-02 to be a significant deficiency.

A material weakness is a significant deficiency, or combination of significant deficiencies, that
results in more than a remote likelihood that a material noncompliance with a type of
compliance requirement of a federal program will not be prevented or detected by the City's
internal control. We did not consider the deficiency described in the accompanying schedule of
findings and questioned costs to be material weaknesses.

The City's response to the finding identified in our audit is described in the accompanying
schedule of findings and questioned costs. We did not audit the City's response and,
accordingly, we express no opinion on it.

This report is intended solely for the information and use of the audit committee, management,
others within the organization, members of City Council, and federal and State awarding
agencies and pass-through entities and is not intended to be and should not be used by anyone
other than these specified parties.

CHERRY, BEKAERT & HOLLAND, L.L.P.




Raleigh, North Carolina
October 12, 2009




                                                213
 CHERRY
 BEKAERf&..
 HOLLAND




  Independent Auditors' Report On Compliance With Requirements Applicable To Each
     Major State Program And Internal Control Over Compliance In Accordance With
                  Applicable Sections Of OMS Circular A·i33 And The
                         State Single Audit Implementation Act



To the Honorable Mayor and
 Members of the City Council
City of Winston-Salem, North Carolina


Compliance
We have audited the compliance of the City of Winston-Salem, North Carolina (the "City"), with
the types of compliance requirements described in the Audit Manual for Governmental Auditors
in North Carolina, issued by the Local Government Commission, that are applicable to each of
its major state programs for the year ended June 30,2009. The City's major state programs are
identified in the summary of auditors' results section of the accompanying schedule of findings
and questioned costs. Compliance with the requirements of laws, regulations, contracts and
grants applicable to each of its major state programs is the responsibility of the City's
management. Our responsibility is to express an opinion on the City's compliance based on our
audit.

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
applicable sections of OMS Circular A-133, as described in the Audits Manual for Government
Auditors in North Carolina, and the State Single Audit Implementation Act. Those standards,
applicable sections of OMS Circular A-133, and the State Single Audit Implementation Act
require that we plan and perform the audit to obtain reasonable assurance about whether
noncompliance 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's compliance with those requirements and performing such
other procedures as we considered necessary in the circumstances. We believe that our audit
provides a reasonable basis for our opinion. Our audit does not provide a legal determination on
the City's compliance with those requirements.

In our opinion, the City complied, in all material respects, with the requirements referred to
above that are applicable to each of its major state programs for the year ended June 30, 2009.
However, the results of our auditing procedures disclosed instances of noncompliance with
those requirements that are required to be reported in accordance with applicable sections of
OMS Circular A-133 and the State Single Audit Implementation Act and which are described in
the accompanying schedule of findings and questioned costs as items 09-03.



                                              214
Internal Control Over Compliance
The management of the City is responsible for establishing and maintaining effective internal
control over compliance with requirements of laws, regulations, contracts and grants applicable
to state programs. In planning and performing our audit, we considered the City's internal
control over compliance with requirements that could have a direct and material effect on a
major state program in order to determine our auditing procedures for the purpose of expressing
our opinion on compliance 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 control deficiency in an entity's internal control over compliance 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 noncompliance with a type of
compliance requirement of a state program on a timely basis. A significant deficiency is a
control deficiency, or combination of control deficiencies that adversely affects the entity's ability
to administer a state program such that there is more than a remote likelihood that
noncompliance with a type of compliance requirement of a state program that is more than
inconsequential will not be prevented or detected by the City's internal control.

A material weakness is a significant deficiency, or combination of significant deficiencies, that
results in more than a remote likelihood that a material noncompliance with a type of
compliance requirement of a State program will not be prevented or detected by the City's
internal control.

Our consideration of internal control over compliance was for the limited purpose described in
the first paragraph of this section and would not necessarily identify all deficiencies in internal
control that might be significant deficiencies or material weaknesses. We did not identify any
deficiencies in internal control over compliance that we consider to be material weaknesses, as
defined above.

The City's response to the finding identified in our audit is described in the accompanying
schedule of findings and questioned costs. We did not audit the City's response and,
accordingly, we express no opinion on it.

This report is intended solely for the information and use of the audit committee, management,
others within the organization, members of City Council, and federal and State awarding
agencies and pass-through entities and is not intended to be and should not be used by anyone
other than these specified parties.

CHERRY, BEKAERT .& HOLLAND, L.L.P.
                &




Raleigh, North Carolina
October 12, 2009




                                                 215
              City of Winston-Salem, North Carolina
                 Schedule of Findings and Questioned Costs
                               For the Fiscal Year Ended June 30, 2009


I.   Summary of Auditors' Results

     Financial Statements

     Type of auditors' report issued:                         Unqualified

     Internal control over financial reporting:

     •   Material weaknesses identified?                      -Lyes                 no

     •   Significant deficiencies identified
         that are not considered to be
         material weaknesses?                                 _yes             ..lL
                                                                               .lL none reported

     Noncompliance material to financial                      _yes             ..lL
                                                                               .lL no
     statements noted?

     Federal Awards

     Internal control over major federal programs:

     •   Material weaknesses identified?                      _yes             ..lL
                                                                               .lL no

     •   Significant deficiencies identified
         that are not considered to be
         material weaknesses?                                 ..lL yes
                                                              .lLyes           _    none reported

     Noncompliance material to federal awards?                _yes             ..lL
                                                                               .lL no

     Type of auditors' report issued on compliance
     for major federal programs:
         major                                                Unqualified

     Any audit findings disclosed that are required to be
      reported in accordance with Section 510(a) of
      Circular A-133                                      _yes                 ..lL
                                                                               .lL no

     Identification of major federal programs:

     CFDA#                                     Name of Federal Program or Cluster

     14.239                                    Home Investment Trust
     20.205                                    Municipal Construction/National Corridor Planning &
                                               Development/Federal Highway Funds (PTRP Phase II)
     20.505                                    Metropolitan Planning Program/State Planning Research
                                               Program

     Dollar threshold used to distinguish
      between Type A and Type B Programs:                     $ 481,904

     Auditee qualified as low-risk auditee?                   lLyes                 no




                                                    216
             City of Winston-Salem, North Carolina
                 Schedule of Findings and Questioned Costs
                              For the Fiscal Year Ended June 30, 2009


I.   Summary of Auditors' Results (continued)

     State Awards

     Internal control over major State programs:

     •   Material weaknesses identified?                   _yes             -1L o
                                                                            l n no
     •   Significant deficiencies identified
         that are not considered to be
         material weaknesses?                              _yes             -2L
                                                                            -.X..   none reported

     Noncompliance material to State awards?               __ yes           -1L no
                                                                            l
     Type of auditors' report issued on
     compliance for major State programs:                  Unqualified

     Any audit findings disclosed that are required
     to be reported in accordance with the State
     Single Audit Implementation Act                       ~yes
                                                           -Lyes                    no

     Identification of major State programs:

     Program Name

     Powell Bill Funds (DOT-4)
                       (00T-4)
                                  (00T-9)
     State Maintenance Assistance (DOT-9)
     Clemmonsville Road (U-2923)

II. Financial Statement Findings

Finding: 09-01

MATERIAL WEAKNESS

Criteria: In the current year audit, three prior period adjustments were made.

Condition: In the City's preparation of the current year financial statements, the accounting
treatment of two prior year transactions and one financial statement presentation were deemed to
be erroneous as originally presented.

Context: The prior period net asset balance on the Government Wide Statement of Activities was
understated, the net assets of the fiduciary funds were overstated, the net assets of the internal
service funds was understated and the fund balance in the Parking Fund was understated.

Effect: The current year net assets balance in the Government Wide Statement of Activities, the
fiduciary funds and the internal service funds as well as the current year fund balance in the
Parking Fund need to be adjusted to properly reflect the prior year transactions.



                                                217
            City of Winston-Salem, North Carolina
                Schedule of Findings and Questioned Costs
                            For the Fiscal Year Ended June 30, 2009


II. Financial Statement Findings (continued)

Cause: The treatment of two accounting transactions was inadvertently erroneous and a current
review of these transactions by management revealed the need for a correction. Differences in
professional judgment can cause presentation differences under Generally Accepted Accounting
Principles.

Recommendation: The prior year transactions be recorded appropriately and the internal service
funds presentation changed to reflect the preferred presentation.

Management Response: The three prior period adjustments were recorded.

Corrective Action: No corrective action is considered necessary.

III. Federal Award Findings and Questioned Costs

US Department of Transportation
Passed through the NC Department of Transportation
Program Name: Metropolitan Planning Program/State Planning and Research Program
CFDA #20.505
Grant Number: WBS # 39225.1.17

Finding 09-02

SIGNIFICANT DEFICIENCY

FILING OF QUARTERLY REPORTS

Criteria: The Grantee must submit quarterly requests for financial reimbursement as well as
quarterly· progress reports within a reasonable period following the end of the quarter in order to
receive grant reimbursement.

Condition: The quarterly requests for financial reimbursement were not submitted within a
reasonable period following the end of the quarter as some were filed more than six months after
the due date. None of the quarterly progress reports for the year had been filed as of August,
2009.

Questioned Costs: None

Context: All four quarterly reports for the fiscal year ended June 30, 2009.

Effect: The City's reimbursement request for allowable reimbursable grant expenditures in
excess of $318,000 has been delayed due to the late filing of the financial reimbursement
requests and the non filing of the quarterly progress reports.

Cause: Reports not prepared in a timely manner.

Recommendation: Quarterly reimbursement requests and progress reports should be prepared
and filed in a timely manner.




                                                218
            City of Winston-Salem, North Carolina
                Schedule of Findings and Questioned Costs
                             For the Fiscal Year Ended June 30,2009


III. Federal Award Findings and Questioned Costs (continued)

Views of responsible officials and planned corrective action: The Department acknowledges the
importance of timely report submittal and is committed to making changes that will assure reports
are submitted in accordance with this audit finding. Recent increases in the amount of information
required for these reports has caused delays, but the Department has adjusted staff assignments
to assure that these reports are submitted within 30-60 days. All of the quarterly reports due at
this time have now been filed.

The Department Head will check report submittal progress each quarter and submittal of these
reports will be part of the performance evaluations of the Department Head and his grant
management team.

IV. State Award Findings and Questioned Costs

N.C. Department of Transportation
Program Name: Powell Bill Funds
DOT-4

Finding 09-03

NON MATERIAL NONCOMPLIANCE

ALLOWABLE COSTS/COST PRINCIPLES

Criteria: N.C.G.S. 136-41.3 provides that the funds allocated to cities and towns under the
provisions of the Powell Bill "shall be expended by said cities and towns only for the purpose of
maintaining, repairing, constructing, reconstructing or widening of any street or public
thoroughfare including bridges, drainage, curb and gutter, and other necessary appurtenances
within the corporate limits of the municipality or for meeting the municipality's proportionate share
of assessments levied for such purposes, or for the planning, construction and maintenance of
bikeways located within the rights-of-way of public streets and highways, or for the planning,
construction, and maintenance of sidewalks along public streets and highways."

Condition: During testing it was noted that salaries and benefits for employees responsible for
signal system control operations were over-allocated to the Powell Bill resulting in an over billing
of expenditures for the Powell Bill.

Questioned Costs: $86,194. The correct amount of salaries and benefits for the two employees
with the signal system control operations was $50,103. The amount charged to Powell Bill was
$136,297. The difference was $86,194.

Context: Out of $5,987,363 of expenses charged to Powell Bill, we examined support for 50
invoices totaling $2,637,925, or 44% of expenditures, and noted $86,194 were for ineligible
activities.

Effects: Powell Bill funds were spent on ineligible costs and eligible costs may go unreported for
reimbursement.




                                                219
            City of Winston-Salem, North Carolina
               Schedule of Findings and Questioned Costs
                            For the Fiscal Year Ended June 30, 2009


IV. State Award Findings and Questioned Costs (continued)

Cause: The reporting system used to allocate salaries and benefits failed to properly allocate the
employees' time and expenses to the Powell Bill.

Recommendation: Implement a cost tracking system for Powell Bill costs which allocates
employee salaries and benefits based on the percentage of time worked on City maintained
streets.

Views of responsible officials and planned corrective actions: The Department of Transportation
will allocate the salaries and benefits of signal system control employees to Powell Bill based
on the percentage of state signals in the computerized signal system.




                                              220
            City of Winston-Salem, North Carolina
                                 Corrective Action Plan
                            For the Fiscal Year Ended June 30, 2009


II. Financial Statement Findings

Finding: 09·1

Name of contact person: Lisa Saunders

Corrective Action: No corrective action needed.

Proposed Completion Date: Not applicable.

III. Federal Award Findings and Questioned Costs

Finding: 09·2

Name of contact person: Stan Polanis

Corrective Action: The Department Head will check report submittal progress each quarter and
submittal of these reports will be part of the performance evaluations of the Department Head and
his grant management team.

Proposed Completion Date: Immediately

IV. State Award Findings and Questioned Costs

Finding: 09·3

Name of contact person: Stan Polanis

Corrective Action: The Department will allocate staff time based on the percentage of city signals
on the computerized Signal system.

Proposed Completion Date: June 30, 2010




                                               221
           City of Winston-Salem, North Carolina
                Summary Schedule of Prior Year Audit Findings
                        For the Fiscal Year Ended June 30, 2009


Finding: 08·1

Status: Corrected.

Finding: 08·2

Status: Corrected.




                                         222
223
~4CW~-S~,~~
s~4 cg~4 7JeJRAato"ut Sto./R/ dl~
For the Fiscal Year Ended June 30, 2009

     Cash Programs GrantorlPass-Through Grantorl    Federal CFDA       Grant No.1          Grant
                Pro~ramlProject Title                  Number          WBSNo.             Receil!ts
FEDERAL GRANTS:
U.S. Department ofHUD
 Direct Programs
 Community Dev. Block Grant-2007                         14.218     B-07-MC-37-0011   $    1,712,800
 Community Dev. Block Grant-2008                         14.218     B-08-MC-37-0011           48,049
 Supportive Housing Program                              14.235      NC19B40-0014             17,042
 Supportive Housing Program                              14.235      NC19B50-0014              6,476
 Supportive Housing Program                              14.235      NC 19B60-0002            17,438
 Supportive Housing Program                              14.235      NC19B60-0005              2,336
 Supportive Housing Program                              14.235      NC19B60-0006              2,154
 Supportive Housing Program                              14.235      NC 19B60-0007             1,180
 Supportive Housing Program                              14.235      NC 19B60-0008            13,163
 Supportive Housing Program                              14.235      NC 19B60-0009             3,663
 Supportive Housing Program                              14.235      NC19B60-0011             11,233
 Supportive Housing Program                              14.235      NCI9B60-0013             12,512
 Supportive Housing Program                              14.235      NC19B70-0002             58,753
 Supportive Housing Program                              14.235      NC19B70-0003             25,000
 Supportive Housing Program                              14.235      NC19B70-0004             47,392
 Supportive Housing Program                              14.235      NC19B70-0005              4,666
 Supportive Housing Program                              14.235      NC19B70-0006             70,206
 Supportive Housing Program                              14.235      NC19B70-0007             46,475
 Supportive Housing Program                              14.235      NC19B70-0008             18,584
 Supportive Housing Program                              14.235      NC 19B70-0009            88,342
 Supportive Housing Program                              14.235      NC 19B70-00 10           98,122
 Supportive Housing Program                              14.235      NC19B70-0011             56,829
 Supportive Housing Program                              14.235      NC 19B70-00 13           44,210
 Supportive Housing Program                              14.235      NC19B70-0014             13,963
 Emergency Shelter Grant                                 14.235       S-05-370003             19,984
 Emergency Shelter Grant                                 14.235       S-06-370003             25,880
 Emergency Shelter Grant                                 14.235       S-07-370003             21,875
 Emergency Shelter Grant                                 14.235       S-08-370003             38,791
 Shelter Plus Care Program                               14.238      NCI9C30-0017             83,257
 Shelter Plus Care Program                               14.238      NC19C40-0001             71,887
 Shelter Plus Care Program                               14.238      NC19C60-0001             12,188
 Shelter Plus Care Program                               14.238      NC19C70-0016            110,770
 Shelter Plus Care Program                               14.238      NC 19C70-00 18          118,196
 Up-Front Grant                                                     UPGOSNC01419           1,554,488
 Home Investment Trust                                   14.239     M-04-DC-37-0204          536,492
 Home Investment Trust                                   14.239     M-05-DC-37-0204          825,778
 Home Investment Trust                                   14.239     M-06-DC-37-0204          193,623
 Economic Development Initiative                         14.246     B-98-ED-37-0055           23,987
 Fair Housing Ordinance Enforcement                      14.401      FF205K084014             15,085
    Total U.S. Department ofHUD                                                            6,072,869
U.S. Department of Transportation
 Direct Programs                                                     NCOI-09-0181
 Federal Transit Cluster                            20.507120.500     NC-90-0267              51,624
 Federal Transit Cluster                            20.507/20.500     NC90-388-00            107,880
 Federal Transit Cluster                            20.507120.500    NC-90-343-00              6,228
 Federal Transit Cluster                            20.507120.500    NC-90-372-00            106,453
 Federal Transit Cluster                            20.507/20.500     NC90-424-00            250,226
 Federal Transit Cluster                            20.507120.500     NC90-443-00          2,603,683
 Federal Transit Cluster                            20.507120.500    NC-95-023-00              8,500
 Federal Transit Union Station Grant                    20.500       NC03-0068-01             14,274
 Federal Transit 2008 Jarc Grant                        20.516       NC37-XOI4-00            143,830
 Federal Transit New Freedom                            20.521       NC57-X003-00            150,425
                                                                                      $    3,443,123

                                                   224
                                          Page 1 of3
  Federal              State               Local
Expenditures        Expenditures        Expenditures




$   1,712,800   $                   $
       48,049
       17,042
        6,476
       17,438
        2,336
        2,154
        1,180
       13,163
        3,663
       11,233
       12,512
       58,753
       25,000
       47,392
        4,666
       70,206
       46,475
       18,584
       88,342
       98,122
       56,829
       44,210
       13,963
       19,984
       25,880
       21,875
       38,791
       83,257
       71,887
       12,188
      110,770
      118,196
    1,554,488
      536,492
      825,778
      193,623
       23,987
       15,085
    6,072,869


       46,345              5,279               5,279
      107,880                                 26,970
        6,228                                  1,557
      106,453                                 26,613
      250,226                                 62,557
    2,603,683                              5,647,863
        8,000                500                 500
       24,127             (9,853)              6,032
      143,830
      150,425
$   3,447,197   $         (4,074)   $      5,777,371

                                                       225
~4CW~-Salunt, ~~
s~4 cg~4 9eJwtatantt StoiR/ dl~
For the Fiscal Year Ended June 30, 2009

     Cash Programs GrantorlPass-Through Grantorl        Federal CFDA                               Grant
                Pro;ramlProject Title                      Number         Grant Number            ReceiEts

U.S. Department of Transportation Continued
Passed Through N.C. Department of Transportation:
 Municipal Construction                                      20.205          32662.3.1        $      204,555
 National Corridor Planning & Development                    20.205         8.0130009                123,501
 Federal Highway Funds (pTRP Phase II)                       20.205     40929.1.1/40929.3.1        4,598,314
 Metropolitan Planning Program/State Planning                20.505         39225.1.17               318,258
  Research Program
 Metropolitan Planning Program/State Planning                20.505          Unknown                 192,374
  Research Program
 Metropolitan Planning Program/State Planning                20.505        36230.29.8.6               91,551
  Research Program
 Advanced Technology Program                                                36235.9.1.8               44,959
                                                                                                   5,573,512

   Total U.S. Department of Transportation                                                         9,016,635

Department of Homeland Security
 Direct Award
  Staffmg for Adequate Fire and Emergency Response           97.083    EMW-2005-FF-01161             204,590
  Fire Prevention Grant                                      97.044    EMW-2007-FP-01328              39,419
     Total Department of Homeland Security                                                           244,009
Federal Emergency Management Agency/Homeland Security
 Passed Through N.C. Department of Crime Control and
 Public Safety:
  Emergency Management Assistance                            83.548     EMPG-2006-37067               23,151
  Emergency Management Assistance                            83.548     EMPG-2007-37067               83,951
  Emergency Management Assistance - Hazmat                   83.548                                    2,103
  Emergency Management Shelter Grant                         83.548    2007-GE-T7-0048-8002           34,332
     Total Federal Emergency Management Agency                                                       143,537
U.S. Department of Justice
 Direct Programs
  Forfeiture Funds                                           16.000                                  221,191
  2008 COPS Grant                                            16.710      2008CKWX0559                 82,400
 Passed Through the N.C. Department of Crime Control
 and Public Safety:
  2006 JAG Grant                                             16.710      2006DJBXI002                 65,359
  MDNC PSNNCTF Web-Base                                      16.592    034-1-07-001-BB-231            47,390
  Bulletproof Vest 2007                                      16.592                                      224
  Bulletproof Vest 2008                                      16.592                                    1,954
     Total U.S. Department of Justice                                                                418,518
N. C. Department of Human Resources
 Passed Through Piedmont Council of Local
 Governments:
   Assistance for the Elderly                                93.044                                  359,934
     Total N.C. Department of Human Resources                                                        359,934
U.S. Environmental Protection Agency
 Direct Programs
  Brownfield Pilots Cooperative Agreement                    66.811       BL974086-00-0                5,000
  Brownfield Job T & D Demonstration Pilot                   66.811       JT-96430705-0               13,246
    Total U.S. Environmental Protection Agency                                                        18,246
      Total Federal Programs                                                                  $   16,273,748

                                                       226
                                          Page 2 of3

  Federal               State              Local
Expenditures         Expenditures       Expenditures



$      204,555   $                  $
       123,501
     4,598,314
       318,258                                79,565

      192,374                                 48,094

        81,379             10,172             10,172

                           44,959             11,240
     5,518,381             55,131            149,071

     8,965,578             51,057          5,926,442



      204,590                                204,590
       39,419                                 13,703
      244,009                                218,293




       23,151
       83,951
        2,103
       34,332
      143,537



      221,191
       82,400


       65,359
       47,390
          224
        1,954
      418,518




      200,699             159,235
      200,699             159,235


        5,000
       13,246
       18,246
$   16,063,456   $        210,292   $      6,144,735

                                                       227
~o/CW~-dalenv, ~~
~of'W~-$~,
d~o/ cg~o/ 7J~~ $taIR/ cr;I(~
$~of cg~of CJ~uui df.oJR/ B!tUJOJUUv
For the Fiscal Year Ended June 30, 2009

         Cash Programs GrantorlPass-Through Grantorl                        State                        Grant
                    ProgramlProject Title                                  Number   Grant Number        Receipts
STATE GRANTS:

N. C. Department of Transportation
 Direct Programs
   Powell Bill Funds                                                       DOT-4        32570       $     6,715,621
   State Maintenance Assistance                                            DOT-9     36234.62.2.1         1,661,860
   Governor's Highway Safety Program                                                 K8-08-02-42              7,594
 Municipal Agreements:                                                                34891.1.11
 Clemmonsville Road                                                        U-2923     34891.2.1             367,319
     Total N.C. Department of Transportation                                                              8,752,394

N.C. Department of Commerce
  E-NC Organization                                                                                           1,879
     Total N.C. Department of Commerce                                                                        1,879

N. C. Department of Cultural Resources
N.C.
   Division of Archives and History
   Direct Program
    Architectural Survey Update - Phase II
                                        IT                                                                    3,660
     Total N.C. Department of Cultural Resources Division of Archives and History                             3,660

      Total State Programs                                                                          $     8,757,933
       Total Assistance                                                                             $    25,031,681




                                                             228
                                         Page 3 of3

      Federal         State               Local
    Expenditures   Expenditures        Expenditures




$                  $   5,987,363   $
                       1,661,860
                           7,594

                        367,319
                       8,024,136


                           1,879              1,879
                           1,879              1,879




                          3,660
                          3,660


$                  $   8,029,675   $          1,879

$     16,063,456   $   8,239,967   $      6,146,614




                                                      229
     ~tOI $~o/ ~KIT~'Uf.,fMI&~
     ~UYS~of~KA~II~~
                  c;J~w $taIR/ dl~
                  CJ~antt SlaW


                           City of Winston-Salem, North Carolina
                          For the Fiscal Year Ended June 30, 2009


(1) General

       The accompanying schedule of expenditures of federal and state awards presents the activity of
       federal and state financial award programs of the City of Winston-Salem, North Carolina. The
                                                                  defined                  City'S
       City of Winston-Salem, North Carolina reporting entity is defmed in note 1 of the City's basic
       financial statements. Federal and state fmancial awards received directly from federal and state
                                               financial
       agencies, as well as federal financial awards passed through other government agencies, are
       included in the schedule.


(2) Basis of Accounting

       The accompanying schedule of expenditures of federal and state awards presents expenditures
       using the modified accrual basis of accounting, which is described in note 1 of the City'S basic
                                                                                           City's
       fmancial statements, except for the expenditures of the u. S. Department of Transportation
       financial                                                  U.S.
       which are recorded on the accrual basis. The information in this schedule is presented in
       accordance with the requirements of OMB Circular A-133, Audits of States, Local
       Governments, and Non-Profit Organizations and the State Single Audit Implementation Act.
       Therefore, some amounts presented in this schedule may differ from amounts presented in, or
       used in the preparation of the basic fmancial statements.
                                            financial


(3) Relationship to Basic Financial Statements

       The City records all federal and state financial award revenues in the special revenue funds
       except for the U.S. Department of Transportation and Emergency Management Assistance
                      U. S.
       funds which are recorded in the transit authority and general funds, respectively.




                                                 230
The City of Winston-Salem


                       our vision:
 A municipal government deserving of public confidence, that
provides excellent and innovative services, and is an active and
      cooperative partner in creating a vital community.



                     our mission:
    The City of Winston-Salem provides quality, affordable
    services that ensure the health, safety and well-being of
  citizens, while collaborating throughout the community to
    ensure its economic, social and environmental vitality.



                      our values:
                          Openness

                           Integrity

                            Equity

                        Accountability

                          Teamwork

                    Respect for all citizens

                       Fiscal soundness

            Continuous learning & improvement




                                     2009 AnnuAl FinAnciAl RepoRt
                                                                    95
96   city oF Winston-sAlem

				
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