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City of Charlotte, North Carolina Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2012
Mayor: Anthony Foxx Mayor Pro Tem: Patrick Cannon

City Council: John Autry Michael Barnes Warren Cooksey Andy Dulin Claire Green Fallon David Howard Patsy Kinsey LaWana Mayfield James Mitchell, Jr. Beth Pickering

City Manager: W. Curtis Walton, Jr.

Prepared by the City of Charlotte Finance Department Greg C. Gaskins, Chief Financial Officer Teresa T. Smith, Chief Accountant

This document is available online:

CITY OF CHARLOTTE, NORTH CAROLINA TABLE OF CONTENTS Page INTRODUCTORY SECTION Letter of Transmittal ....................................................................................................................................... 1 Certificate of Achievement for Excellence in Financial Reporting ............................................................... 14 Organizational Chart .................................................................................................................................... 15 FINANCIAL SECTION Independent Auditors’ Report ...................................................................................................................... 17 Management’s Discussion and Analysis ..................................................................................................... 19 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Assets ................................................................................................................. 31 Statement of Activities .................................................................................................................... 32 Fund Financial Statements: Balance Sheet – Governmental Funds .......................................................................................... 34 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Assets .................................................................................................... 35 Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds ................................................................................... 36 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities................................ 37 Statement of Budgetary Comparison – General Fund ................................................................... 38 Reconciliation of the Statement of Budgetary Comparison to the Statement of Revenues, Expenditures and Changes in Fund Balances – General Fund ............................ 39 Statement of Net Assets – Proprietary Funds ................................................................................ 40 Statement of Revenues, Expenses and Changes in Fund Net Assets – Proprietary Funds..................................................................................................................... 44 Statement of Cash Flows – Proprietary Funds............................................................................... 46 Statement of Fiduciary Net Assets – Fiduciary Funds ................................................................... 50 Statement of Changes in Fiduciary Net Assets – Fiduciary Funds ................................................ 51 Index to the Notes to the Financial Statements .................................................................................... 52 Notes to the Financial Statements ........................................................................................................ 54

CITY OF CHARLOTTE, NORTH CAROLINA TABLE OF CONTENTS-(Continued) Page FINANCIAL SECTION (continued) Combining and Individual Fund Statements and Schedules: Nonmajor Governmental Funds: Description .................................................................................................................................... 115 Combining Balance Sheet ............................................................................................................ 116 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ....................................................................................................................... 118 Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual (Non-GAAP Basis) – Special Revenue Funds (Budgeted Annually) .......................... 120 Schedule of Expenditures Compared with Authorizations: Democratic National Convention ........................................................................................... 123 Public Safety and Other Grants Fund .................................................................................... 124 Neighborhood Development Fund ......................................................................................... 125 Employment and Training Fund ............................................................................................. 126 Stimulus Grants Fund ............................................................................................................ 127 Emergency Telephone System Fund..................................................................................... 128 Debt Service and Capital Projects Funds: Description .................................................................................................................................... 129 Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual (Non-GAAP Basis) – Debt Service Fund .................................................................... 130 Schedule of Expenditures and Encumbrances Compared with Authorizations – Capital Projects Fund ............................................................................................................. 132 Enterprise Funds: Description .................................................................................................................................... 135 Water and Sewer: Schedule of Revenues, Expenditures and Transfers – Budget and Actual (Non-GAAP Basis): Operating Fund ................................................................................................................ 137 Debt Service Fund ........................................................................................................... 138 Schedule of Reconciliation of Budgetary (Non-GAAP Basis) to Full Accrual Basis .............. 139 Schedule of Expenditures and Encumbrances Compared with Authorizations – Capital Projects Fund ...................................................................................................... 140

CITY OF CHARLOTTE, NORTH CAROLINA TABLE OF CONTENTS-(Continued) Page FINANCIAL SECTION (continued) Combining and Individual Fund Statements and Schedules (continued): Enterprise Funds (continued): Storm Water: Schedule of Revenues, Expenditures and Transfers – Budget and Actual (Non-GAAP Basis): Operating Fund ................................................................................................................ 143 Debt Service Fund ........................................................................................................... 144 Schedule of Reconciliation of Budgetary (Non-GAAP Basis) to Full Accrual Basis .............. 145 Schedule of Expenditures and Encumbrances Compared with Authorizations – Capital Projects Fund ...................................................................................................... 146 Airport: Schedule of Revenues, Expenditures and Transfers – Budget and Actual (Non-GAAP Basis): Operating Fund ................................................................................................................ 149 Debt Service Fund ........................................................................................................... 150 Schedule of Reconciliation of Budgetary (Non-GAAP Basis) to Full Accrual Basis .............. 151 Schedule of Expenditures and Encumbrances Compared with Authorizations – Capital Projects Fund ...................................................................................................... 152 Public Transit: Schedule of Revenues, Expenditures and Transfers – Budget and Actual (Non-GAAP Basis): Operating Fund ................................................................................................................ 155 Debt Service Fund ........................................................................................................... 156 Schedule of Reconciliation of Budgetary (Non-GAAP Basis) to Full Accrual Basis .............. 157 Schedule of Expenditures and Encumbrances Compared with Authorizations – Capital Projects Fund ...................................................................................................... 158 Internal Service Funds: Description .................................................................................................................................... 161 Combining Statement of Net Assets ............................................................................................ 162 Combining Statement of Revenues, Expenses and Changes in Fund Net Assets ...................... 163 Combining Statement of Cash Flows ........................................................................................... 164

CITY OF CHARLOTTE, NORTH CAROLINA TABLE OF CONTENTS-(Continued) Page STATISTICAL SECTION Description ............................................................................................................................................... 165 Government-wide Information: Net Assets By Component .................................................................................................................. 167 Changes in Net Assets........................................................................................................................ 168 Fund Information: Fund Balances, Governmental Funds, Post-GASB 54 ....................................................................... 170 Fund Balances, Governmental Funds, Pre-GASB 54 ........................................................................ 171 Changes in Fund Balances, Governmental Funds ............................................................................. 172 Assessed and Actual Value of Taxable Property ................................................................................ 174 Direct and Overlapping Property Tax Rates ....................................................................................... 175 Principal Property Tax Payers ............................................................................................................ 176 Property Tax Levies and Collections .................................................................................................. 177 Analysis of Current Tax Levy .............................................................................................................. 178 Ratios of Outstanding Debt By Type ................................................................................................... 180 Direct and Overlapping Bonded Debt ................................................................................................. 182 Legal Debt Margin Information ............................................................................................................ 183 Special Obligation Bond Coverage ..................................................................................................... 184 Water and Sewer Revenue Bond Coverage ....................................................................................... 185 Storm Water Revenue Bond Coverage .............................................................................................. 186 Airport Revenue Bond Coverage ........................................................................................................ 187 Demographic and Economic Statistics ............................................................................................... 188 Principal Employers ............................................................................................................................ 189 Full-Time Equivalent Employees by Function/Program ...................................................................... 190 Operating Indicators by Function/Program ......................................................................................... 191 Capital Asset Statistics by Function/Program ..................................................................................... 192

CITY OF CHARLOTTE, NORTH CAROLINA TABLE OF CONTENTS-(Continued) Page SINGLE AUDIT SECTION Independent Auditors’ Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements in Accordance with Government Auditing Standards ...................................................... 193 Independent Auditors’ Report on Compliance with Requirements That Could Have a Direct and Material Effect on Each Major Federal Program and Internal Control Over Compliance in Accordance with OMB Circular A-133 and the State Single Audit Implementation Act .................................................................................. 195 Independent Auditors’ Report on Compliance with Requirements That Could Have a Direct and Material Effect on 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 ............................................. 197 Schedule of Findings and Questioned Costs ............................................................................................ 199 Summary of Prior Year Findings ............................................................................................................... 201 Schedule of Expenditures of Federal and State Awards ........................................................................... 202 Notes to the Schedule of Expenditures of Federal and State Awards ...................................................... 214

Introductory Section

October 31, 2012 Honorable Mayor and Members of City Council City of Charlotte, North Carolina State law requires that all general-purpose local governments publish 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 licensed certified public accountants. Pursuant to that requirement, we hereby issue the comprehensive annual financial report of the City of Charlotte (City) for the fiscal year ended June 30, 2012. This report consists of management’s representations concerning the finances of the City. Consequently, management assumes full responsibility for the completeness and reliability of all of the information presented in this report. To provide a reasonable basis for making these representations, management of the City has established a comprehensive internal control framework that is designed both to protect the government’s assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City’s financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the City’s comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. The City’s financial statements, as required by North Carolina General Statute 159-34, have been audited by Cherry, Bekaert & Holland, L.L.P., a firm of licensed certified public accountants. The goal of the independent audit was to provide reasonable assurance that the financial statements of the City for the fiscal year ended June 30, 2012, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unqualified opinion that the City’s financial statements for the fiscal year ended June 30, 2012, are fairly presented in conformity with GAAP. The independent auditor’s report is presented as the first component of the financial section of this report. The independent audit of the financial statements of the City was part of a broader, federally and state mandated “Single Audit” designed to meet the special needs of federal and state grantor agencies. The Single Audit was performed in compliance with the Single Audit Act of the U.S. Office of Management and Budget Circular A-133 and North Carolina General Statute 159-34 (Single Audit Implementation Act). 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 audited government’s internal controls and 1

compliance with legal requirements, with special emphasis on internal controls and legal requirements involving the administration of federal awards. These reports are available in the Single Audit Section at the end of this report. GAAP require 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.

Profile of the Government

Charlotte, located in Mecklenburg County, North Carolina, is the largest city between Baltimore and Jacksonville, Florida. The City is in the Piedmont Region of the Carolinas, two hours east of the Appalachian Mountains and three and one-half hours west of the Atlantic Ocean. New York City is 631 miles to the northeast and Atlanta is 256 miles to the southwest. Location and growth reinforce the City’s role as a regional center in the Southeast. The City, incorporated in 1768, became the county seat in 1774 and has grown from an initial 360 acres to a present area covering 305 square miles of the 527 square miles in Mecklenburg County. The City owes its name to German born Queen Charlotte, wife of England’s King George III, and the County’s name to her birthplace of Mecklenburg. That is why Charlotte is referred to as the “Queen City.” With an estimated population of 772,627, Charlotte is the core of the Charlotte-Gastonia-Concord Metropolitan Statistical Area, an area of over 1.8 million people that includes six counties. The vision of the City is to be a model of excellence that puts citizens first and makes this a community of choice for living, working and leisure activities. The mission of the City is to ensure the delivery of quality public services that promote safety, health, and quality of life of its citizens. The City of Charlotte has had a council-manager form of government since 1929. Policy-making and legislative authority are vested in a governing council consisting of a mayor and eleven other members elected every two years on a partisan basis. The Mayor and four Council members are elected at-large by a citywide vote. The remaining seven Council members are elected by district, from voters who reside in each district. The City Council is responsible for appointing the City Manager, City Attorney, City Clerk and members of various boards and commissions which 2

enact ordinances, resolutions and orders; reviewing the annual budget, setting the tax rate and approving the financing of all City operations; and authorizing contracts on behalf of the City. Manager-appointed department directors. The City provides a full range of services, including police and fire protection; the construction and maintenance of streets and other infrastructure; solid waste collection; water and sewer; storm water; an airport; and public transit. The City also has component units that are controlled by or dependent on the City. Control or dependence is determined in accordance with criteria established by the Governmental Accounting Standards Board (GASB). The Charlotte Firefighters’ Retirement System, a blended component unit, is presented as a Pension Trust Fund. The Charlotte Regional Visitors Authority is reported as a discretely presented component unit. Additional information on these legally separate entities and the reporting entity can be found in Note 1.a. in the notes to the financial statements. The Strategic Operating and Capital Investment Plan illustrates the allocation of resources to fund the City’s operations and capital programs. The City develops annually updated two-year operating budgets and five-year capital budgets. The City Council identifies priorities enabling departments to submit their budget requests based on organization focus and strategy. The Council Budget Committee ensures that the operating budget reflects the needs and issues of the City and the organization. Requests are submitted in January, followed by several half-day retreats, beginning in February, held to discuss requests that serve as the basis for the preliminary strategic operating plan presented to City Council in May. Workshops and public hearings are scheduled to enable citizens an opportunity to respond to the preliminary plan. In June, City Council adopts a final Strategic Operating and Capital Investment Plan. Budget-to-actual comparisons are provided in this report for each fund for which an appropriated annual budget has been adopted. For the general fund, this comparison is presented as part of the basic financial statements. For other funds with annual and projectlength budgets, detailed budget-to-actual comparisons are presented in the Combining and Individual Fund Statements and Schedules section of this report. Additional information on the budget can be found in the MD&A and Note 3.a. in the notes to the financial statements. The City Manager is responsible for carrying out policies and ordinances, and directs the daily operations of the City through

Local Economy
Charlotte has emerged as a financial, distribution and transportation center of an entire urban region. There are 7.3 million people living within a 100-mile radius. Financial Services Center - One of Charlotte’s many strengths as a leading business center is the concentration of financial institutions and resources. The City ranks as the nation’s second largest financial center in headquartered banking assets and is the home of Bank of America Corporation, one of the nation’s largest banks based on deposits. Thirty-one banks, with approximately 249 banking offices, and a branch of the Federal Reserve Bank operate in Charlotte. Other financial services that have a significant presence include mortgage banking, commercial finance and insurance industries.

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Transportation and Distribution Hub - The City plays a major role in the transportation and distribution of goods throughout the nation. Charlotte/Douglas International Airport (CLT) is considered the “gateway to the world”; averaging 670 flights per day with non-stop service to 179 cities. CLT has five concourses with 95 airline gates; the airport’s large number of gates helps 89 percent of flights leave CLT on time, compared to 86 percent nationally. The airport served 39,043,708 passengers in 2011. The Airport ranks 6 nationwide in operations, 11 in passengers, and 33 in cargo. Nine major commercial airlines and seventeen regional carriers offer direct or non-stop service. There are twenty cargo carriers serving the area. With customs services available at the Airport and a foreign trade zone designation, Charlotte is a port of entry and export. In addition to being accessible, CLT is also renowned for its facilities and hospitality. Charlotte Douglas’ 1.7 million square foot state-of-the art terminal includes a glass-enclosed expansion terminal that feels more like a shopping mall than an airport. The airport recently tied for seventh place in a survey conducted by the Physicians Committee for Responsible Medicine that ranked the availability of healthy food options amongst the nation’s busiest airports. In September of 2012, CLT was named one of “America’s Most Family-Friendly Airports” by Travel + Leisure magazine. Trucking is a major industry in Charlotte. Charlotte’s trucking industry is served by two interstate highways that pass through the City limits, Interstate Highways 77 and 85 (I-77 and I-85), running north/south and northeast/southwest, respectively. Convenient access to the nation’s interstate highway system makes Charlotte an appealing location for the trucking industry and more than fifty percent of the nation’s population is within a 24-hour drive from the city. There are over 303 trucking companies located in Charlotte, including most of the nation’s top trucking companies. Interstate 485 (I-485) is the Outer Belt highway serving Mecklenburg County and metropolitan Charlotte. The planned 67-mile loop is presently open or under construction with the exception of a six-mile segment to the northeast. NCDOT has taken steps to coordinate the three remaining projects that will complete the I-485 loop. These projects include building the final 5.7 miles of I-485, linking I-77 to I-85; converting the existing I-485 interchange to a turbine interchange, the first of its kind in North Carolina; and widening approximately 7 miles of I-85 from four to eight lanes in Cabarrus County. All three I-485/I-85 improvement projects will feature innovative interchange designs that will help save on construction costs while moving traffic more efficiently and safely. The final segment of I-485 has a scheduled completion date of early 2015. Charlotte is also the center of the country’s largest consolidated rail system. Two major rail systems, Norfolk Southern Railway and CSX Transportation, bring approximately 300 trains through Charlotte weekly and link Charlotte to 23 states, Washington, D.C. and Canada. To better integrate air, rail, and communications, Charlotte Douglas International Airport has planned a $90 million intermodal rail and trucking facility that is expected to bring the region an economic boost of $7 billion over the next two decades. The intermodal yard will be situated on a 200 acre tract of land that is located between the airport runways. Once completed, the intermodal yard will create yet another competitive edge for Charlotte, and will provide a boost to approximately 100 distribution centers operating in the Southeast. th th rd

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Top Five Industries (by number of employees) Education, Healthcare and Social Services Wholesale and Retail Trade Finance and Insurance Accommodations and Food Services Administrative and Waste Services

Business Environment – Charlotte enjoys a vibrant, highly diversified economy that encompasses many sectors, as well as companies that range in size from multinational to micro-business. Charlotte currently ranks 8 th nationally in the number of Fortune 500 headquartered companies. This list does not reflect the announcement that Chiquita will relocate its corporate headquarters from Cincinnati to Charlotte in 2012. Chiquita plans to be fully transitioned to its new Charlotte headquarters by the close of 2012. Charlotte is home to operations for 264 companies that are listed on the Fortune 500. The City also has 3,464 Dun & Bradstreet “Million Dollar Companies.” There are approximately 948 foreign-owned firms in the region, which

have spawned the creation of several international and cultural organizations. Charlotte was ranked as the top U.S. city for foreign investment by Site Selection magazine. Charlotte is a major manufacturing force and is home to every major manufacturing sector. Manufacturing in the Charlotte region includes industrial machinery, metal working, computer and electronic products, and biomedical facilities. The over 3,300 manufacturers in the Charlotte-Mecklenburg region employ approximately 110,000 workers. Growth Outlook - While many cities have seen construction costs rise, significant commercial growth continues throughout Charlotte. Charlotte construction costs rank as one of the lowest of the major metro centers. These low costs are reflected in the City awarding nearly 14,600 building permits in 2012 that represents more than $2.4 billion of new construction during a national economic recession. In 2011 a total of 1,089 firms created 8,850 jobs and square footage increased by 6.2 million. In 2011 several higher educational institutions made infrastructure investment including Davidson College, Northeastern University, Queens University and UNC Charlotte. The increase in speculative development and significant manufacturing growth provide positive indications for the future of Charlotte’s economy. Work to complete the much-anticipated First Ward Urban Village project is currently underway. The first phase of construction will cost $75 million and is scheduled to take between 18 to 24 months to complete. The initial phase of the project includes two parking decks, 200 apartment units and extending 10 th Street to connect Brevard and Tryon streets. The First Ward Urban

Village is a public-private undertaking between the City and Levine Properties. Once the entire project is completed, the development will include park space, private businesses, retail, hotel space, apartments, and improved access to UNC Charlotte’s uptown campus. Romare Bearden Park broke ground on September 2, 2011, the anniversary of the artists’ 100 birthday. The 5.2 acre park is located in Third Ward Uptown and at one point Bearden lived near the location of the new park. The park design is inspired by Bearden’s multimedia collages where he used memory, experiences and tradition as the basis of his work. The main pathway of the park will link Church Street to the future Charlotte Knights Ballpark. Construction is currently in progress with a projected completion date of early 2013. th 5

On September 14, 2012, The Charlotte Knights, the AAA affiliate of the Chicago White Sox, broke ground on their new uptown stadium in Third Ward. The Knights plan to open the new BB&T Ballpark in the spring of 2014, nearly 25 years since the team last played in Charlotte. The team hopes that attendance will double when it moves to uptown from its current stadium in Fort Mill, South Carolina. The new stadium will have views of the Charlotte skyline, picnic tables, a lounge area, and suites facing home plate. Many hope the new ballpark will encourage additional development in Third Ward. SKYE Condominiums is located in the building previously known as The Park. This revitalized 22 story tower will be Charlotte’s newest mixed-use development; all four phases of the project are currently being constructed simultaneously. The development includes 67 luxury residential condominiums, a 172-room Hyatt Place Hotel, ground floor retail, and a rooftop restaurant with breathtaking skyline views. The building will also feature an open-air rooftop restaurant. The project is designed to LEED Silver standards and is scheduled for completion by the second quarter of 2013. Charlotte’s LYNX Blue Line South Corridor is the first light rail project in North Carolina. The line is approximately ten miles long and runs along I-77 from I-485 at South Boulevard to Center City Charlotte. The Blue Line provides service to fifteen stations where dozens of bus routes are timed to connect with the light rail. The Blue Line made its first trip in November 2007 and has significantly exceeded expectations for ridership numbers. The weekday LYNX boarding average in fiscal year 2012 was 13,740. The LYNX Blue Line Extension Project, which will connect Center City Charlotte with UNC Charlotte’s main campus, recently entered the Final Design phase. In addition, CATS was successful in securing a State Full Funding Grant Agreement with the North Carolina Department of Transportation in fiscal year 2012. The Federal Full Funding Grant Agreement is anticipated in fiscal year 2013 for the LYNX Blue Line Extension. On October 4, 2012, the ribbon was cut to open Mosaic Village. This mixed-use development includes suite-style apartments and 7,500 square feet of retail space. Mosaic Village is in close proximity to Johnson C. Smith University. The project is a $25 million public-private partnership between Johnson C. Smith University and the Griffin Family, operators of Griffin Brothers Tire Stores. Recreational, Visitor and Cultural Events - The City’s eight percent hotel/motel and one percent prepared food and beverage taxes have provided a dedicated resource for the purpose of promoting the City as a destination for convention, business and leisure travel. Despite the slowly recovering economy, Mecklenburg County received $4.1 billion in domestic traveler spending in 2011 (an increase of 10.5 percent over 2010), the highest amount in North Carolina.

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On February 1, 2011, it was announced that Charlotte was selected to host the 46

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Democratic National Convention in 2012. Following the formal announcement the entire community began preparations to ensure Charlotte was prepared to shine during the week of the convention. While the total economic impact of this important political and cultural event has not yet been calculated, several local businesses including uptown hotels and restaurants reported a major uptick in business. Charlotte Regional Visitors Authority (CRVA), a discretely presented component unit, focuses on tourism promotions and facilities management. Through CRVA, the City provides entertainment and exhibition facilities consisting of an auditorium, two enclosed sports arenas and a convention center. The CRVA also operates the NASCAR Hall of Fame complex. In May 2005, the North Carolina General Assembly passed legislation providing for funding a NASCAR Hall of Fame. On March 6, 2006, NASCAR awarded the Hall of Fame to the City of Charlotte. A two percent county-wide occupancy tax, which is a component of the eight percent hotel/motel tax, finances the construction, repair, maintenance and financing of the Hall of Fame. The Hall of Fame celebrated its grand opening on May 11, 2010. The Hall includes a 150,000 square foot museum, a 102,000 square foot expansion to the Convention Center which includes a 40,000 square foot ballroom and NASCAR Plaza, a 19-story, 390,000 square foot Class A office tower. The City is home to two major-league sports franchises, the Carolina Panthers of the National Football League (NFL) and the Charlotte Bobcats of the National Basketball Association (NBA). Home for the Carolina Panthers is the Bank of America Stadium, a privately owned, 73,778-seat stadium in uptown Charlotte. The NBA’s Charlotte Bobcats play in the uptown Time Warner Cable Arena. The Queen City is also home to the Charlotte Knights; the Charlotte Checkers of the American Hockey League affiliate of the NHL Carolina Hurricanes; and the Charlotte Eagles and Lady Eagles professional soccer teams of the United Soccer League. Charlotte Motor Speedway is the largest sports facility in the southeast. The 1.5 mile superspeedway, annually hosts three series of racing, including the Sprint Cup Series NASCAR Sprint All-Star Race, Coca-Cola 600, and the Bank of America 500; the Nationwide Series Top Gear 300 and Dollar General 300; and the Camping World Truck Series North Carolina Education Lottery 200. The Coca-Cola 600 has the second largest attendance of all sporting events in the nation. The speedway hosts 140,000 permanent seats and has the capacity for nearly 40,000 more spectators in the infield. Charlotte Motor Speedway is recognized as one of the finest NASCAR facilities in the U.S. Charlotte Motor Speedway is also home to the world’s largest high definition television. The 200 foot-wide, 80-foot tall HDTV, created by Panasonic, had its public debut on May 21, 2011, during the NASCAR Sprint All-Star Race. Also attracting race fans is the zMax Dragway at Charlotte Motor Speedway. The drag racing facilities’ track, pit 7

areas and midway cover 125 acres and seats 30,000. The dragway is unique in that it is the only four-lane, all concrete quarter-mile dragway surface. College sports fans can attend the Belk Bowl at Bank of America Stadium, which matches an ACC team against a Big East team, and the CIAA Basketball Tournament which is held in the Time Warner Cable Arena. Golf lovers can attend one of the top events on the PGA tour, the Wells Fargo Championship. The U.S. National Whitewater Center is located on the Catawba River and is the world’s largest artificial whitewater river and U.S. Olympic Training site. The 307-acre facility includes whitewater rafting, kayaking, mountain biking and hiking trails, a climbing center and ropes course, along with a 2,400 square foot conference facility and restaurants. Charlotte offers diverse facilities for culture, the arts, nature and science. The Bechtler Museum of Modern Art features mid-century modern art in various media by artists such as Alberto Giacometti, Joan Miro, Jean Tinguely and Barbara Hepworth. The Knight Theater, part of the Blumenthal Performing Arts Center, is home for North Carolina Dance Theatre and also hosts other performing arts. The Harvey B. Gantt Center for AfricanAmerican Arts + Culture serves as a community epicenter for music, dance, theater, visual art, film, arts education programs, literature and community outreach. The 145,000 square foot Mint Museum Uptown combines four collections (Craft + Design, Contemporary, American and selected European pieces) under one roof. The North Carolina Blumenthal Center for the Performing Arts, containing a 2,100-seat performance hall and a 440-seat theater, showcases the best in opera, symphony, chorus, dance and theater. The Charlotte Nature Museum, founded in 1946, provides programs and exhibits centered around a science theme of “Nature and Man.” The “hands-on” science and technology museum, Discovery Place, features a 300-seat Omnimax theater and the largest planetarium dome in the United States. The 40,000 square foot Billy Graham Library on the grounds of the ministry’s international headquarters in Charlotte includes a bookstore and a café. Also on the grounds is the Graham Family Home place. Education - The County operates Charlotte-Mecklenburg Schools (CMS), a consolidated City-County public school system with current enrollment for kindergarten through grade 12 of more than 141,100 students. The City has no direct financial responsibility for the school system operations or capital. CMS has a diverse mix of students representing 160 different countries and various ethnic and cultural backgrounds. CMS offers magnet programs in 40 of its schools that develop the talents of students who have interests and talents in specific areas. In September of 2011, CMS received the Broad Prize naming CMS as the country’s top urban school district. Among the reasons cited by the Broad Prize judges for selecting CMS were CMS’s efforts to get top educators into struggling, high-poverty schools, provide additional aid for the neediest students and identify and reward the most effective teachers. There are numerous opportunities for secondary education in the Charlotte area. Within the greater-Charlotte region there are twenty-two public and private secondary institutions offering baccalaureate degrees; thirteen schools offering graduate opportunities; eighteen junior colleges, community colleges and technical institutes conferring two-year associate degrees. Central Piedmont Community College (CPCC) is the largest of the North Carolina Community College System colleges, serving nearly 60,000 8

students per year. CPCC was selected as the Community College of the Year by the National Alliance of Business. UNC Charlotte is the 4 th largest of the sixteen institutions comprising the University of North th Carolina system. UNC Charlotte offers 92 bachelor’s programs, 59 master’s degrees and 19 doctoral programs. A survey by Kiplinger ranked nearby Davidson College as the 5 best value liberal arts college, and U.S. News and World Report rated Davidson as number eleven on its list of the best liberal arts colleges. Queens University, located in the historic Myers Park neighborhood, has an approximate enrollment of 2,500. The Queens University College of Arts and Sciences has been praised by the National Endowment for the Humanities for its interactive approach to teaching liberal arts; serving as a model for other institutions of higher learning across the nation. Johnson & Wales University’s Charlotte Campus is growing rapidly with over 2,600 full-time students enrolled in one of three colleges: the College of Business, the College of Culinary Arts or the Hospitality College. Pfeiffer University at Charlotte has an urban campus and offers adult learners the opportunity to earn both undergraduate and graduate degrees. Wake Forest University continues to have a strong graduate school presence in Charlotte with several top-ranked MBA programs. In January 2012, Wake Forest moved their Charlotte campus to the former International Trade Center building in uptown. This strategic move was part of Wake Forest’s long term plan to integrate business and academics; attracting talented professionals and fostering an “urban campus” in the heart of the City’s business district. Charlotte School of Law received full accreditation from the American Bar Association in June 2011. Health Care Charlotte and Mecklenburg County are served by a number of health care providers. There are nearly 2,500 hospital beds in the Charlotte-Mecklenburg area representing two health care systems, Carolinas HealthCare System and Presbyterian HealthCare. Carolina’s HealthCare System is one of the five largest public hospital systems in the country and is the most prominent health care system in the Carolinas. Carolinas Health Care System operates 33 hospitals in the Carolinas, and operates a regional network of more than 1,700 employed primary and specialty care physicians. Charlotte’s largest hospital, Carolinas Medical Center (CMC), is a state-designated Academic Medical Center Teaching Hospital and for the 13 year has been recognized as Charlotte’s most preferred hospital by the National Research Corporation. The center includes the Sanger Heart and Vascular Institute, a nationally known center with over 80 heart specialists, the nationally ranked Neuroscience and Spine Institute and the Women’s Institute that specializes in the diagnosis and management of women’s medical and reproductive conditions. The CMC campus also includes the 234-bed Levine Children’s Hospital dedicated to the care of children and their families, and is the most comprehensive such facility between Washington, D.C. and Atlanta. Levine offers care in over 30 specialties and sub-specialties including pediatric surgery; a pediatric kidney, liver and heart transplant program; a pediatric intensive care unit and a children’s diagnostic center. Presbyterian Healthcare is a not-for-profit healthcare provider under the parent organization of Novant Health. Novant Health was ranked 14 th th

nationally among the Top 100 Integrated networks. Presbyterian

Hospital was recently recognized as one of the “100 Great Hospitals” in the nation for 2012 by Becker’s Hospital Review. Presbyterian earned a place on this list because of accolades including innovative patient care, specialty programs that provide the highest level of care for patients, and clinical quality.

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Long Term Financial Planning
Each year, in the early stages of budget planning, City Council establishes the areas of the community into which it wants to focus resources. These Focus Areas are the basis for budget decisions and operational programs. For fiscal year 2013, those areas are: Community Safety, Housing and Neighborhood Development, Environment, Transportation and Economic Development. The City uses the Corporate Balanced Scorecard performance measurement system to translate mission and strategy related to the Focus Areas into tangible objectives and measures; communicate strategy to employees; and ensure alignment of resources throughout the organization. City Strategy is documented in the Focus Area Plan and includes sixteen critical Corporate Objectives that guide and direct planning, decision making, and the accomplishment of the vision and mission of the City. For fiscal year 2013, Initiatives within each Focus Area include: Community Safety. Community Safety is a major priority for the City. The City’s approach to building a safe community is focused on reducing crime and the loss of life and property resulting from fires. Initiatives in community safety include decreasing crime and life and property damages from fires; enhancing citizen perception of safety through citizen partnerships, crime and fire prevention and education activities; developing recruitment strategies that attract diverse applicant pools to the Police and Fire departments; and building collaborations with partners that enhance community safety initiatives.

“Charlotte will be America’s safest community.”

Housing and Neighborhood Development. The City’s long-term health, vitality, and distinction as a competitive city is predicated upon its ability to utilize national and local best practices to create and sustain communities of choice for living, working and recreation. Initiatives in housing and neighborhood development include creating healthy and vibrant neighborhoods by improving and implementing quality physical infrastructure; strengthening opportunities for public and private partnerships to encourage the integration of education, recreation, employment and housing resources in identified redevelopment areas; assisting with increasing the supply of affordable housing; and redesigning the Quality of Life Study to more accurately reflect the City’s neighborhood conditions. Transportation. Safe, convenient, efficient and sustainable transportation choices are critical to a viable community. The City takes a proactive approach to land use and transportation planning. The City’s strategy focuses on integrating land use and transportation choices for motorists, transit users, bicyclists and pedestrians. A combination of sound land use planning and continued transportation investment will be necessary to accommodate Charlotte’s growth, enhance quality of life and support the City’s efforts to attract and retain businesses and jobs. Initiatives in transportation include enhancing multi-modal mobility, environmental quality and long term sustainability; promoting transportation choices, land use objectives, and transportation investments that improve safety, promote sustainability and livability; communicating land use and transportation objectives as outlined in the Transportation Action Plan; and seeking financial resources, external grants, and funding partnerships necessary to implement transportation programs and services. “Creating and sustaining communities of choice for living, working and recreation.”

“Charlotte will be the premier city in the country for integrating land use and transportation choices.”

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Economic Development. The City’s long-term economic health is in large part driven by its ability to facilitate private sector job growth and investment through partnerships which require public investment in public services and facilities and infrastructure. A healthy economy also requires a commitment to strengthen and grow existing businesses, small business enterprises, entrepreneurship, business corridors and adjacent neighborhoods. Initiatives in economic development include helping grow small businesses; focusing on continuous improvement within the permitting and regulatory environment to facilitate job and tax base growth and to improve the customer experience; continuing to focus on jobs and tax base growth in business corridors; and working with economic development partners to grow and retain business in the targeted industry sectors of energy and environment, finance, healthcare, manufacturing, defense, motorsports, tourism, film and international firms. Environment. The City recognizes that environmental stewardship is fundamentally “Charlotte will become a national leader in environmental sustainability, preserving our natural resources while balancing growth with sound fiscal policy.” important to quality of life and essential to maintaining a vibrant economy. Protecting our natural resources, promoting conservation, and improving the environment all enhance the City’s mission to preserve the quality of life of its citizens. Initiatives in environment include leading by example by practicing environmental stewardship in City operations and facilities; seeking and supporting collaborative and regional solutions to environmental problems; and facilitating the growth of the clean energy industry, including the alternative energy sector. “Charlotte will be the most prosperous and livable city for all citizens through quality economic development.”

Major Initiatives
The City’s capital policy and future capital plans are established in a five-year capital investment plan which matches the City’s highest priority capital needs with a financing schedule. The 2013-2017 Capital Investment Plan (Plan) totals $3.3 billion and includes investments in neighborhoods, housing, storm water, roads, transit, water and sewer, the airport and government facilities. This is a 0.2 percent increase from the FY2012-2016 Plan. The increase in the overall five-year Plan is a result of the increases in the Aviation, Storm Water, and Water and Sewer Enterprise capital programs, offset by a reduction in the General Government Plan. Capacity for capital formation is determined annually through a comprehensive model that evaluates revenues dedicated to capital and future debt service requirements. The model specifies the additional capacity to issue debt that can be fully repaid with existing or planned revenues. As a result, when voters approve General Obligation Bonds, revenues are expected to be available to repay debt service without future tax increases. Revenue restraints in recent years have led to minimal new capacity.  General Government. The General Government Plan totals $172.7 million, including $85.8 million for housing and neighborhoods; $43.7 million for facility investments; $16.5 million for environmental services; $13.7 million for transportation; and $13.0 million for economic development. reserves. 11 General government projects are funded through a variety of sources including long-term financing, pay-as-you-go and capital



Water and Sewer.

Charlotte-Mecklenburg Utilities’ Plan is designed to address increased demand,

environmental issues, and State and Federal regulations. This includes maintenance and expansion of the existing system of water and sewer mains and water and sewer treatment plants. The Plan totals $622.9 million, and is fully financed from water and sewer fees. Major projects include $187.0 million for the Long Creek Wastewater Treatment Plant; $110.5 million for water and sewer line rehabilitation and replacement; $48.2 million for water and sewer street main extensions; and $25.7 million for the Northeast water transmission main.  Aviation. The Aviation Plan includes maintenance and expansions to the airfield, terminal, cargo and parking areas. The Plan totals $1.0 billion and is fully funded from airline, cargo, and general aviation revenues, federal and state grants and commercial leases. Major projects include $200.0 million for terminal lobby expansion; $175.0 million for the International Terminal (phase I); $75.5 million for a fourth parallel runway; $64.4 million for the new short term public parking deck; $63.2 million for the Consolidated Rental Car Facility; $50.0 million for Concourse B expansion; $47.8 million for an in-line baggage system; and $45.0 million for the air traffic control tower.  Charlotte Area Transit System (CATS). The CATS Plan includes funding for maintenance and expansion of the existing bus, special transportation, circulator, community and regional transportation systems. The program also includes planning, design and construction of rapid transit. The program totals $1.2 billion, and is fully financed through the one half-cent sales tax and federal and state capital grants. Major projects include: $991.6 million for the LYNX Blue Line Extension (NE Corridor Light Rail); $92.1 million for bus and special transportation vehicle replacement; $25.3 million for preventative maintenance; and $22.5 million for the LYNX station extension and power supply.  Storm Water. The Storm Water Plan funds repairs to private properties with flooding problems and improvements in the public right-of-way drainage system. The Plan totals $260.7 million and is fully financed through storm water fees. Major projects include: $151.2 million for flood control projects in neighborhood water basins; $53.8 million for storm water repairs; $17.1 million for minor storm water projects; and $14.0 million for pollution control projects.

Awards and Acknowledgements
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Charlotte for its comprehensive annual financial report (CAFR) for the fiscal year ended June 30, 2011. This was the twenty-seventh consecutive year that the City has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized CAFR. This report must satisfy both GAAP and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current CAFR continues to meet the Certificate of Achievement Program’s requirements, and we are submitting it to the GFOA to determine its eligibility for another certificate.

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The cooperation of each City department is appreciated as we continue to provide a high level of public services at a reasonable tax rate. We appreciate the professional competency and dedication of the Finance Department staff throughout the year, especially during the preparation of this CAFR. Credit is given to the Mayor and City Council for their leadership and support in maintaining the highest standards of professionalism in the fiscal management of the City. Respectfully submitted,

W. Curtis Walton, Jr. City Manager

Greg C. Gaskins Chief Financial Officer

Cover photographs: Front cover – The Charlotte skyline taken near the site of Romare Bearden Park and BB&T Park 2012 Back cover – A view of the Charlotte skyline from the observation tower at Marshall Park circa 1975 Photos courtesy of Scott Greer and Tony Crumbley 13

14

City of Charlotte
Organizational Chart
Mayor and City Council City Clerk* Stephanie Kelly City Attorney* Robert Hageman

City Manager* Curt Walton

Departments
Aviation Jerry Orr Charlotte Area Transit System Carolyn Flowers Charlotte-Mecklenburg Planning Commission Debra Campbell Charlotte-Mecklenburg Police Rodney Monroe Charlotte-Mecklenburg Utilities Barry Gullet Engineering & Property Mgmt. Jeb Blackwell Fire Jon Hannan Neighborhood & Business Services Patrick Mumford Solid Waste Services Victoria Johnson Transportation Danny Pleasant * Council Appointed

Leadership Team
Deputy City Manager Ron Kimble Assistant City Managers—3 Julie Burch Eric Campbell Ruffin Hall

Support Departments
Budget & Evaluation Randy Harrington Shared Services Chuck Robinson Finance Greg Gaskins Human Resources Cheryl Brown

Constituent Relations Kimberly Oliver Intergovernmental Relations Dana Fenton Chief Information Officer Jeff Stovall CharMeck 311 Janice Quintana Community Relations Willie Ratchford Corporate Communications & Marketing Kim McMillan Internal Audit Greg McDowell

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THIS PAGE INTENTIONALLY BLANK.

16

Financial Section

MANAGEMENT’S DISCUSSION AND ANALYSIS (Dollar Amounts in Millions)
This section of the City of Charlotte’s (City) annual financial report presents a narrative overview and analysis of the City’s financial performance for the fiscal year ended June 30, 2012. Please read it in conjunction with the transmittal letter at the front of this report and the City’s financial statements, which follow this section.

FINANCIAL HIGHLIGHTS
The assets of the City exceeded its liabilities at the close of the most recent fiscal year by $8,998.8, (net assets). Of this amount, $1,324.7 (unrestricted net assets) may be used to meet the government’s ongoing obligations to citizens and creditors. The overall financial position of the City improved in 2012 as evidenced by an increase in total net assets of $272.3. This increase was from both governmental ($102.1) and business-type ($170.2) activities. As of the close of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $624.0, an increase of $5.4 in comparison with the prior year. This increase resulted from increased property tax revenue. Unassigned fund balance in the General fund was $88.4 at June 30, 2012 and represents a traditional fund balance reserve maintained for emergencies, liquidity and overall financial strength. This meets the City Council’s goal of 16 percent of the budget for fiscal year 2013. The amount exceeding the City Council’s goal of 16 percent, $5.7, is committed. The City maintained its AAA bond rating from all three major rating agencies.

OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis

serves as an introduction to the City’s basic financial statements. The basic financial statements present two different views of the City through the use of This the government-wide statements and fund financial statements. diagram shows how

Components of the Annual Financial Report
Management's Discussion and Analysis

Basic Financial Statements

components of the annual report are arranged and relate to one another.

Governmentwide Financial Statements

Fund Financial Statements

Notes to the Financial Statements

Summary

Detail

19

The first two statements (pages 31-33) are government-wide financial statements that provide both long-term and short-term information about the City’s overall financial status. The remaining statements (pages 34-51) are fund financial statements that focus on individual parts of the City government, reporting the City’s operations in more detail than the government-wide statements. The governmental funds statements tell how general government services like public safety were financed in the short term as well as what remains for future spending. A budgetary comparison statement has been provided for the General fund to demonstrate budgetary compliance. Proprietary funds statements offer short- and long-term financial information about the activities the City operates like businesses, such as the water and sewer system. The fiduciary funds statements reflect the financial relationship with the Firefighters’ Retirement System, which provides benefits exclusively for certain City employees, and the Employee Benefit Trust, which accumulates resources for the provision of other postemployment benefit payments for retirees and their beneficiaries. The financial statements also include notes that explain some of the information in the financial statements and provide more detailed data (pages 52-114). A section is also included with combining statements that provides details about nonmajor governmental funds, internal service funds, and fiduciary funds, each of which are totaled and presented in single columns in the basic financial statements. This section (pages 115-164) also includes detailed budgetary information required by North Carolina General Statutes. The remainder of this overview section explains the structure and contents of the government-wide and fund financial statements. Government-wide financial statements. The government-wide statements report information about the City as a whole using accounting methods similar to those used by private-sector companies. The statement of net assets includes all of 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 financial position is improving or deteriorating. Other nonfinancial factors such as changes in the City’s property tax base and the condition of the City’s roads must be considered to assess the overall health of the City. The statement of activities presents information showing how the City’s net assets changed during the most recent fiscal year. The statement accounts for all of the current year’s revenues and expenses regardless of when cash is received or paid. The government-wide financial statements are divided into three categories: Governmental activities - Most of the City’s basic services are included here, such as public safety, community planning and development, and streets and highways. Property taxes, other taxes, and grants and contributions finance most of these activities. Business-type activities - The City charges fees to customers to cover the costs of certain services provided. The City’s water and sewer system, storm water system, airport, and public transit system are included here. 20

Component unit - The City’s annual report includes one other entity, the Charlotte Regional Visitors Authority. Although legally separate, the City appoints the governing board and provides financial support. Fund financial statements. The fund financial statements provide more detailed information about the City’s most significant funds, not the City as a whole. Funds are accounting groups that the City uses to keep track of specific sources of funding and spending for particular purposes. Some funds are required by State Statutes. designated for specific purposes. The City has three kinds of funds: Governmental funds - Most of the City’s basic services are included in governmental funds, which focus on (1) the flow in and out of cash and other financial assets that can readily be converted to cash and (2) the balances left at year-end that are available for spending. These funds are reported using the modified accrual accounting basis and a current financial resources measurement focus. Consequently, the governmental funds statements provide a detailed short-term view that helps determine the financial resources available in the near future to finance the City’s programs. The relationship between governmental activities (reported in the Statement of Net Assets and the Statement of Activities) and governmental funds is described in a reconciliation that follows the governmental fund financial statements. The City adopts an annual budget for the General fund, as required by State Statutes. A budgetary comparison statement is presented for the General fund using the City’s budgetary basis of accounting. This statement reflects the following: (a) the original budget, (b) the final budget as amended, (c) actual resources, and (d) the variance between the final budget and actual resources. statement. Proprietary funds – Services for which the City charges customers a fee are generally reported in proprietary funds. Proprietary funds, like the government-wide statements, provide both long- and short-term financial information. The City has two types of proprietary funds. Enterprise funds are the same as the business-type activities (shown in the government-wide financial statements), but provide more detail and additional information, such as cash flows. Internal service funds are used to report activities that provide supplies and services for the City’s other programs and activities. These internal service activities predominately benefit governmental rather than business-type activities; therefore, they have been included with governmental activities in the government-wide financial statements. Fiduciary funds - The City is the trustee, or fiduciary, for the Firefighters’ Retirement System and the Employee Benefit Trust. The City is responsible for ensuring that the assets reported in these funds are used for their intended purposes. This fiduciary activity is reported in a separate statement of fiduciary net assets and a statement of changes in fiduciary net assets. These funds are excluded from the City’s government-wide financial statements because the City cannot use these assets to finance its operations. 21 Because the budgetary basis of accounting differs from the modified accrual basis used in the funds statements, a reconciliation is provided at the end of the Other funds are established to control and manage resources

FINANCIAL ANALYSIS OF THE CITY AS A WHOLE
Net assets. As noted earlier, net assets may serve over time as a useful indicator of a government’s financial position. For the City, assets exceeded liabilities by $8,998.8 at the close of the most recent fiscal year. A summary of the City’s net assets at June 30, 2012 and 2011 is presented below.
Net Assets Governm ental Activities 2012 Current and other assets Capital assets Total assets Current and other liabilities Noncurrent liabilities Total liabilities Net assets: Invested in capital assets, net of related debt Restricted Unrestricted Total net assets $ 961.2 6,020.7 6,981.9 132.9 1,564.0 1,696.9 $ 2011 897.8 5,886.7 6,784.5 111.4 1,490.2 1,601.6 Business-type Activities 2012 $ 1,622.5 5,206.3 6,828.8 139.8 2,975.2 3,115.0 2011 $ 1,454.2 5,076.1 6,530.3 135.1 2,851.5 2,986.6 Total Prim ary Governm ent 2012 $ 2,583.7 11,227.0 13,810.7 272.7 4,539.2 4,811.9 2011 $ 2,352.0 10,962.8 13,314.8 246.5 4,341.7 4,588.2

4,642.1 221.8 421.1 $ 5,285.0

4,523.2 233.3 426.4 $ 5,182.9

2,493.3 316.9 903.6 $ 3,713.8

2,450.4 256.0 837.2 $ 3,543.6

7,135.4 538.7 1,324.7 $ 8,998.8

6,973.6 489.3 1,263.6 $ 8,726.5

By far the largest portion of the City’s net assets (79 percent) reflects its investment in capital assets (land, buildings, roads, bridges, etc.), less any related debt used to acquire those assets that are still outstanding. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. An additional portion of the City’s net assets (6 percent) represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net assets ($1,302.1) may be used to support operations and provide for payment of long-term debt. At the end of the current fiscal year, the City is able to report positive balances in all three categories of net assets, both for the government as a whole, as well as for its separate governmental and business-type activities. The same situation held true for the prior fiscal year. Government-wide net assets increased by $272.2 during the current fiscal year from increases in both governmental and business-type activities. The increases resulted in part from contributed assets including the addition of streets due to annexation and contributions of infrastructure assets from developers.

22

Changes in net assets. The following table presents the City’s changes in net assets for the fiscal years ended June 30, 2012 and 2011:
Change in Net Assets Governm ental Activities 2012 Revenues Program revenues: Fees, fines and charges for services Operating grants and contributions Capital grants and contributions General revenues: Property taxes Other taxes Grants and contributions not restricted to specific programs Other Total revenues Program expenses Public safety Sanitation General administration Support services Engineering and property management Streets and highw ays Culture and recreation Community planning and development Interest and other charges Water Sew er Storm w ater Airport Public transit Total expenses Excess before transfers Transfers Increase in net assets Net assets - beginning Net assets - ending 2011 Business-type Activities 2012 2011 Total Prim ary Governm ent 2012 2011

$

93.9 78.6 121.7 377.3 206.4 18.5 (14.4) 882.0 347.4 47.9 45.0 35.4 24.9 114.4 17.9 73.5 55.1 761.5 120.5 (18.4) 102.1 5,182.9

$

87.3 64.0 103.0 362.8 190.1 17.0 12.1 836.3 324.9 48.2 38.3 21.4 27.3 119.0 10.1 83.6 57.4 730.2 106.1 (18.4) 87.7 5,095.2

$

591.4 12.6 73.9 65.8 7.7 751.4 116.6 132.8 20.7 168.7 160.8 599.6 151.8 18.4 170.2 3,543.6

$

552.0 12.9 85.3 57.3 17.5 725.0 105.1 141.7 20.2 160.3 151.1 578.4 146.6 18.4 165.0 3,378.6

$

685.3 91.2 195.6 377.3 272.2 18.5 (6.7) 1,633.4 347.4 47.9 45.0 35.4 24.9 114.4 17.9 73.5 55.1 116.6 132.8 20.7 168.7 160.8 1,361.1 272.3 272.3 8,726.5

$

639.3 76.9 188.3 362.8 247.4 17.0 29.6 1,561.3 324.9 48.2 38.3 21.4 27.3 119.0 10.1 83.6 57.4 105.1 141.7 20.2 160.3 151.1 1,308.6 252.7 252.7 8,473.8

$ 5,285.0

$ 5,182.9

$ 3,713.8

$ 3,543.6

$ 8,998.8

$ 8,726.5

Total government-wide revenues of $1,633.4 were derived primarily from grants and contributions (18 percent) and property and other taxes (40 percent). These sources of revenues increased 7 percent from the prior year, primarily due to increased sales tax due to the improving economy. The total expenses of all programs were $1,361.1. The expenses cover a range of services with the two largest being transportation (streets and highways, airport and public transit) for 33 percent and public safety (fire and police) for 26 percent. Transportation expenses increased over the prior year due in part to the addition of staff for the Blue Line Extension project. 23

Governmental Activities As shown in the chart, property, sales and other taxes (66 percent) and grants and contributions (25 percent) were the major sources of revenues for governmental activities. 25% Governmental expenses increased from $730.2 to $761.5 during this fiscal year. Expenses in the current year related to the Democratic National Convention (funded by a Federal grant), purchase of digital radios, and the Broadband Technology Opportunities Programs where broadband access is being expanded in the area. As in prior years, public safety continues to be the largest expense with 46 percent in the current and 44 percent in the prior year. This chart highlights the net cost (total cost less fees generated by the activities and intergovernmental grants) of the City’s governmental programs mainly public safety, streets and highways and community planning and development. The net cost shows the financial support provided by taxes and other general revenue sources not restricted to specific programs. 66%

Governmental Revenues by Source
11% -2%

Taxes (Property, sales, and other) Grants and contributions Fees, fines and charges for services Other

Governmental Expenses Compared with Program Revenues
$400 $300 $200 $100 $-

General administration

Sanitation

Streets and highways

Support services

Public safety

Culture and recreation

Expenses

Program revenues

In addition to property and other taxes, the total cost of services of $761.5 was supported by $200.3 provided by other governments and organizations for specific programs and $93.9 provided by fees, fines and charges from those who directly benefited from the programs.

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Community planning and development

Engineering and property management

Business-type Activities Revenues for the business-type activities were $751.4, an increase of 4 percent from the prior year. This increase is due in part to a 8.8 percent increase in water and sewer rates in the current year. The chart below highlights the net cost of the City’s business-type programs. For all business-

Business-type Revenues by Source
9% 11% 1%

79% Fees, fines and charges for services Grants and contributions Sales taxes levied for Public Transit Other

type activities except Public Transit, user rates and fees are established to provide for operating expenses, debt service costs and adequate working capital. Public transit passenger fares are established to provide reasonably priced public mass transportation and therefore may not cover all operating costs. In addition to fare revenues, state operating assistance grants, a one-half percent sales tax and contributions from other local governments fund the transit program.

$250 $200 $150 $100 $50 $-

Business-type Expenses Compared with Program Revenues

Sewer

Expenses

Program revenues

Airport expenses increased $8.4 or 5 percent from the prior year due in part to increased fuel costs, the expansion of runways and issuing new debt. Transit expenses increased $9.7 or 6 percent from the prior year due in part to the purchase of new equipment such as buses, the addition of staff for the Blue Line Extension project and the North Davidson facility renovation was also completed.

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Airport

Public transit

Water

Storm water

FINANCIAL ANALYSIS OF THE CITY’S FUNDS
The City uses fund accounting 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 nearterm inflows, outflows, and balances of spendable resources. Such information is useful in assessing the financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. At June 30, 2012, the governmental funds reported a combined fund balance of $624.0, an increase of $5.4, or 1 percent from last year. This amount consists of the following: (a) $4.1 nonspendable for inventories and perpetual care, (b) $218.7 restricted for State Statutes, special obligation debt service and specific programs, (c) $95.3 committed primarily for capital projects, (d) $217.5 assigned for debt service and specific programs, and (e) $88.4 unassigned. The general fund is the chief operating fund of the City. At the end of the current fiscal year,

unassigned fund balance of the general fund was $88.4, while total fund balance reached $159.2. The City’s Capital Investment Plan Financial Policies include a policy to maintain fund balance at 16 percent of the operating budget. Any portion in excess of 16 percent is dedicated to capital expenses, unless otherwise directed by City Council. $5.7 is committed for capital projects. Other major governmental funds are the debt service and the capital projects funds. The debt service fund has a total fund balance of $229.9, all of which will be used for either the payment of debt service or is restricted by State Statutes. Debt service fund balance increased $9.4 from the prior year due primarily to transfers from other funds to pay future debt service. The capital projects fund has a total fund balance of $86.9, all of which is committed for future capital projects. balance decreased $5.1 from the prior year due to construction of public facilities. Proprietary funds. Proprietary funds provide the same type of information found in the governmentwide financial statements, but in more detail. Unrestricted net assets at the end of the year amounted to $342.8 in the Water and Sewer fund, $47.9 in the Storm Water fund, $365.6 in the Airport fund and $150.2 in the Public Transit fund. The change in net assets for the funds was $54.0, $35.5, $60.4 and $16.5 respectively. Factors concerning the finances of these funds have already been addressed in the discussion of the business-type activities. Capital project fund

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GENERAL FUND BUDGETARY HIGHLIGHTS
During the fiscal year, City Council approved several immaterial budget amendments. bond refunding savings to be applied to the other post-employment benefit liability. Revenues were $5.4 above the final budgeted amount. Property tax revenues were $6.1 greater than expected due in part to lower than estimated rebates and higher than expected collection rates. The fiscal 2012 budget reflected slow growth following a three-year period of economic decline, which the City weathered through budget reductions and conservative financial strategies. As a result, the most significant expenditure increases were $2.3 to fund 50 police officers hired under the American Recovery and Reinvestment Act Grant, $1.6 to fund increased operating costs for Police, and $1.0 for maintenance and repair of the digital and analog Public Safety Radio System. Actual expenditures were $2.9 below final budget amounts for fiscal year 2012. The most

significant amendments related to funding a transfer from the debt service fund from general obligation

CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets. At June 30, 2012, the City had $11,227.0 (net of accumulated depreciation) in capital assets consisting primarily of land, buildings, roads, and water and sewer lines. assets at June 30, 2012 and 2011:
Capital Assets (Net of Depreciation) Governm ental Activities 2012 Land Buildings Improvements other than buildings Infrastructure Intantibles Machinery and equipment Construction in progress Totals $ 3,110.4 809.1 1,652.2 1.7 43.9 403.4 6,020.7 $ 2011 3,045.5 822.1 1,653.6 1.6 41.2 322.7 5,886.7 $ Business-type Activities 2012 388.7 325.6 3,229.0 3.4 133.9 1,125.7 5,206.3 $ 2011 382.3 341.9 3,236.6 3.8 125.4 986.1 5,076.1 $ Total Prim ary Governm ent 2012 3,499.1 1,134.7 3,229.0 1,652.2 5.1 177.8 1,529.1 $ 2011 3,427.8 1,164.0 3,236.6 1,653.6 5.4 166.6 1,308.8

This amount

represents a net increase of $264.2, or 2 percent over last year. The following is a summary of capital

$

$

$

$

$ 11,227.0

$ 10,962.8

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This year’s major capital asset additions included: Discovery Place museum improvements - $.9 Streets in annexed areas - $110.9 Water main construction - $9.5 Sanitary sewer rehabilitation - $11.4 Airport Master Plan land acquisition - $5.3 Airport ticket lobby renovations - $5.5 Bus expansion and replacement - $18.9 At June 30, 2012, authorized and unexpended capital projects totaled $1,866.9 as follows: governmental ($558.2), water and sewer ($798.2), airport ($299.9), storm water ($117.8), and public transit ($92.8). The City has plans to issue additional debt to finance these projects in addition to using resources currently available. More detailed information about the City’s capital assets is presented in Note 4.f. to the financial statements. Long-term Debt. At June 30, 2012, the City had $4,335.3 of debt outstanding in bonds, installment purchases, commercial paper notes, derivative instrument liability, and other financing agreements. This was a increase of $146.9 or 4 percent over last year. Details by type of debt are presented in the following table:
Outstanding Debt Governm ental Activities 2012 General obligation bonds (backed by the City’s taxing authority) Revenue bonds (backed by specific fee revenues) Special obligation bonds Installment purchases Commercial paper notes Derivative instrument liability Other financial agreements Totals $ 547.2 10.1 712.2 24.1 68.0 56.4 $ 1,418.0 2011 $ 456.0 11.0 722.8 109.2 28.3 58.0 $ 1,385.3 Business-type Activities 2012 $ 241.4 2,404.9 163.8 101.6 5.6 $ 2,917.3 2011 $ 266.6 2,299.4 173.4 57.4 6.3 $ 2,803.1 Total Prim ary Governm ent 2012 $ 788.6 2,404.9 10.1 876.0 24.1 169.6 62.0 $ 4,335.3 2011 $ 722.6 2,299.4 11.0 896.2 109.2 85.7 64.3 $ 4,188.4

New debt for 2012 resulted from issuing general obligation bonds ($175.5) to repay commercial paper notes for governmental activities and to refund debt; and Airport revenue bonds ($201.6) for airport improvements and constructing a consolidated rental car facility.

28

The City’s sound financial condition is evidenced by the continuation of its Aaa rating from Moody’s Investors Service and AAA rating from Standard & Poor’s Ratings Services and Fitch Ratings. Charlotte is one of the few cities in the nation that maintains the highest financial category rating from these major rating agencies. This achievement is a primary factor in keeping interest costs low on the City’s outstanding debt. The City’s total debt of $4,335.3 arises from both governmental and business-type activities. The largest portion of debt is revenue bonds (55 percent), which are backed by specific fee revenues, rather than the City’s taxing authority. North Carolina General Statutes limit the amount of general obligation debt that the City can issue to 8 percent of the total assessed value of taxable property. The legal debt margin for the City at June 30, 2012, was $5.2 billion. The City had $428.2 in authorized but unissued debt for streets, housing, and neighborhood improvements. More detailed information about the City’s long-term liabilities is presented in Note 4.j. of the financial statements.

ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS AND RATES
The following economic indicators impact the City’s budget outlook: During fiscal year 2012, 14,572 building permits were issued with a value of over $2.4 billion compared to 13,209 permits for 2011. Retail sales during 2011 were $14.3 billion compared to $13.3 billion for 2010. The June 2012 unemployment rate was 8.8 percent compared to 9.9 percent for the state and 8.4 percent for the nation. Assessed property valuations are expected to exceed $89.2 billion for 2012 compared to $85.5 billion for 2011, or an increase of 4 percent, and is due primarily to a county-wide revaluation. The fiscal 2013 operating budget reflects slow growth following the economic recession, weathered by the City through budget reductions and a continuation of conservative financial strategies. The fiscal 2013 capital budget primarily reflects Enterprise Fund projects, as City Council did not approve any new bond-supported General Fund capital projects. The General fund budget increased to $552.6. Property tax revenues including current and prior year collections, interest, and other penalties and rebates are expected to increase 4.7 percent over 2012. Sales tax and user fees are expected to increase 3.9 and 8.4 percent respectively. The most significant expenditure increases are $2.43 to fund 50 police officers hired under the American Recovery and Reinvestment Act Grant, $.7 for maintenance and repair of Fire vehicles and equipment plus fuel price escalations, $.9 for increased solid waste disposal costs, and $.4 for maintenance and repair of Solid Waste Service vehicles and equipment.

29

The following are highlights for the 2013 budgets for the business-type activities: Utilities customers will experience an increase in the volume rate, fixed billing charge, and the availability fee for both water and sewer. The average monthly total water and sewer bill for residential customers is estimated to increase $3.30 per month. increase by $128.8 over 2012. Storm water impervious surface fee rate will increase 6 percent while expenses are expected to increase by 5.3 percent. Airport revenues are expected to increase 10.5 percent largely due to cargo area and ground rent increases. Operating expenses are also expected to increase 10.5 percent. This increase is due primarily to increased transfers to debt service funds. Public transit revenues are expected to increase from the Sales and Use Tax by 4.5 percent along with $1.0 increase from advertising revenue. Operating expenditures are expected to increase 3.4 percent due in part to increased projected fuel costs. Operating expenses will

CONTACTING THE CITY’S FINANCIAL MANAGEMENT
This financial report is designed to provide citizens, taxpayers, customers, investors and creditors with a general overview of the City’s finances and to demonstrate the City’s accountability. Questions concerning this report or requests for additional financial information should be directed to the City of Charlotte’s Finance Department, 600 East Fourth Street, Charlotte, NC 28202-2848.

30

Financial Section– Basic Financial Statements

CITY OF CHARLOTTE, NORTH CAROLINA STATEMENT OF NET ASSETS JUNE 30, 2012 (In Thousands) Primary Government Governmental Business-type Activities Activities ASSETS Cash and cash equivalents $ Receivables, net Due from other governmental agencies Due from component unit Due from primary government Internal balances Inventories Other Restricted assets: Temporarily restrictedCash and cash equivalents Investments Permanently restrictedCash and cash equivalents Receivables Notes receivable Deferred charges Deferred outflow of resources Other postemployment benefit assets (Note 5.f.) Pension assets (Note 5.b.) Capital assets (Note 4.f.) Land Buildings, improvements, infrastructure, intangibles, and machinery and equipment, net Construction in progress Total assets LIABILITIES Accounts payable/claims payable Deposits and retainage payable Accrued interest payable Due to component unit Due to primary government Unearned revenues Liabilities payable from restricted assets Noncurrent liabilities (Note 4.j.): Due within one year Due after one year Total liabilities NET ASSETS Invested in capital assets, net of related debt Restricted for: State statute Debt service Perpetual care - Nonexpendable Public safety Streets and highways Culture and recreation Community planning and development Passenger facility charges Contract facility charges Airport working capital Unrestricted Total net assets 689,316 18,227 71,982 7,407 3,003 1,004 272 $ 1,046,448 $ 75,115 62,309 (3,003) 8,581 Component Unit Charlotte Regional Visitors Authority $ 8,759 3,383 548 1,223 378 613

Total 1,735,764 93,342 134,291 7,407 9,585 272

1,894 21,699 3,111 10 97,692 7,790 31,793 6,033 3,110,363 2,506,897 403,399 6,981,892

70,767 203,172 29,101 101,626 28,361 388,669 3,691,917 1,125,712 6,828,775

72,661 224,871 3,111 10 97,692 36,891 133,419 28,361 6,033 3,499,032 6,198,814 1,529,111 13,810,667

14,904

111,772 4,526 9,354 981 3,158 3,157 96,151 1,467,831 1,696,930

50,706 8,857 31,386 242 48,540 86,440 2,888,804 3,114,975

162,478 13,383 40,740 1,223 3,158 51,697 182,591 4,356,635 4,811,905

4,220 4,001 7,407 694 3,321 19,643

4,642,043 65,271 10,120 3,121 9,003 8,359 120,924 5,034 421,087 5,284,962

2,493,316 57,099 215,358 22,851 21,606 903,570 $ 3,713,800

7,135,359 65,271 67,219 3,121 9,003 8,359 120,924 5,034 215,358 22,851 21,606 1,324,657 8,998,762

20 (4,759) (4,739)

$

$

$

The notes to the financial statements are an integral part of this statement. 31

CITY OF CHARLOTTE, NORTH CAROLINA STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2012 (In Thousands) Program Revenues Fees, Fines and Operating Capital Charges for Grants and Grants and Services Contributions Contributions

ACTIVITIES Primary Government: GovernmentalPublic safety Sanitation General administration Support services Engineering and property management Streets and highways Culture and recreation Community planning and development Interest and other charges Total governmental Business-typeWater Sewer Storm water Airport Public transit Total business-type Total primary government Component Unit: Charlotte Regional Visitors Authority

Expenses

$

347,380 47,925 45,030 35,427 24,876 114,400 17,856 73,513 55,101 761,508

$

23,761 12,336 16,851 25,815 5,436 5,386 1,047 3,290 93,922

$

29,465 501 12 4,554 22,930 4,562 16,569 78,593 8 8 12,570 12,586 91,179

$

3,913 191 3,734 38 111,798 1,258 713 121,645 6,615 6,126 1,962 5,396 53,801 73,900 195,545

116,634 132,829 20,742 168,661 160,776 599,642 $ 1,361,150

115,459 177,377 52,075 219,990 26,508 591,409 $ 685,331

$

$

$

53,458

$

31,909

$

-

$

-

General revenues: TaxesProperty Sales Sales, levied for Public Transit Utility franchise Occupancy Prepared foods Business privilege Municipal vehicle Payment from City of Charlotte Grants and contributions not restricted to specific programs Investment earnings Miscellaneous Transfers Total general revenues and transfers Change in net assets Net assets - beginning Net assets - ending The notes to the financial statements are an integral part of this statement.

32

Net (Expense) Revenue and Changes in Net Assets Primary Government Component Unit Charlotte Regional Governmental Business-type Visitors Activities Activities Total Authority

$ (290,241) $ (34,897) (28,167) (5,878) (14,848) 25,714 (10,989) (52,941) (55,101) (467,348) (467,348)

5,448 50,682 33,295 56,725 (67,897) 78,253 78,253

$ (290,241) $ (34,897) (28,167) (5,878) (14,848) 25,714 (10,989) (52,941) (55,101) (467,348) 5,448 50,682 33,295 56,725 (67,897) 78,253 (389,095)

-

-

-

-

(21,549)

377,309 82,730 36,442 32,590 22,523 16,375 15,740 -

65,754 -

377,309 82,730 65,754 36,442 32,590 22,523 16,375 15,740 18,513 (10,085) 3,427 661,318 272,223 8,726,539 $ 8,998,762 $

19,066 47 160 19,273 (2,276) (2,463) (4,739)

18,513 (16,546) 6,461 2,167 1,260 (18,399) 18,399 569,444 91,874 102,096 170,127 5,182,866 3,543,673 $ 5,284,962 $ 3,713,800

33

CITY OF CHARLOTTE, NORTH CAROLINA BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2012 (In Thousands) General ASSETS Cash and cash equivalents Receivables, net: Property taxes Accounts Other Total receivables Due from other governmental agencies Due from other funds Due from component unit Inventories Prepaid expenses Restricted assets: Cash and cash equivalents Investments Total restricted assets Notes receivable Total assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Deposits and retainage payable Due to other funds Due to component unit Deferred revenues Liabilities payable from restricted assets Total liabilities Fund balances: Nonspendable: Inventories Perpetual care Restricted: State statute Special obligation debt service Public safety Streets and highways Culture and recreation Community planning and development Committed: Capital projects Culture and recreation Component unit Assigned: Debt service Capital projects Community planning and development Unassigned Total fund balances Total liabilities and fund balances $ 163,082 6,176 3,252 9,428 38,489 3,585 1,004 46 $ 215,634 Debt Service $ 228,873 142 142 3,592 5,460 7 7 $ 238,074 Other Total Capital Governmental Governmental Projects Funds Funds $ 74,651 901 5,127 6,028 3,784 298 1,894 21,692 23,586 44,862 $ 153,209 $ 139,481 191 4 57 252 26,117 22 52,784 218,656 $ 606,087 7,410 8,383 57 15,850 71,982 3,585 5,758 1,004 22 1,894 21,699 23,593 97,692 825,573

$

$

$ 43,021 2,395 503 10,565 56,484

$

2,551 5,602 8,153

$ 10,204 1,502 200 51,200 3,157 66,263

$

10,859 629 3,585 781 54,861 70,715

$

66,635 4,526 4,088 981 122,228 3,157 201,615

1,004 61,679 5,674 1,100 395 875 88,423 159,150 $ 215,634

3,592 10,120 216,209 229,921 $ 238,074

86,946 86,946 $ 153,209

3,121 9,003 8,359 120,924 5,034 1,500 147,941 218,656

1,004 3,121 65,271 10,120 9,003 8,359 120,924 5,034 92,620 1,500 1,100 216,209 395 875 88,423 623,958 825,573

$

$

The notes to the financial statements are an integral part of this statement.
34

CITY OF CHARLOTTE, NORTH CAROLINA RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET ASSETS JUNE 30, 2012 (In Thousands) Total fund balances for governmental funds Total net assets reported for governmental activities in the statement of net assets is different because: Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. Pension assets resulting from contributions in excess of the annual required contributions are not financial resources and therefore are not reported in the funds. Other long-term assets are not available to pay for current-period expenditures and, therefore, are deferred in the funds. Internal service funds are used to charge the costs of insured and uninsured risks of loss as well as employee health and life claims to individual funds. The assets and liabilities of the internal service funds are included in governmental activities in the statement of net assets. Long-term liabilities are not due and payable in the current period and therefore are not reported in the funds. (Note 2.a.) Total net assets of governmental activities The notes to the financial statements are an integral part of this statement. $ $ 623,958

6,020,650

6,033

162,149

38,795

(1,566,623) 5,284,962

35

CITY OF CHARLOTTE, NORTH CAROLINA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2012 (In Thousands) Debt Service $ 55,242 13,294 1,414 55 1,417 1,258 570 73,250 Other Total Capital Governmental Governmental Projects Funds Funds $ 10,210 8,616 5,519 12,343 358 1,119 688 38,853 $ 4,473 54,164 78,169 907 1,071 4,672 143,456 $ 378,409 149,564 149,958 61,103 3,544 2,377 29,406 8,325 8,614 791,300

General REVENUES: Property taxes Other taxes Intergovernmental Licenses, fees and fines Investment earnings Private contributions Administrative charges Charges for current services Miscellaneous Total revenues EXPENDITURES: CurrentPublic safety Sanitation General administration Support services Engineering and property management Streets and highways Culture and recreation Community planning and development Debt servicePrincipal Interest and other charges Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES): Sales of capital assets Commercial paper issued Installment purchases issued Refunding debt issued Premium on debt issuance Private loan Payment to refunded bond escrow agent Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances - beginning Fund balances - ending $ 308,484 73,490 64,856 47,798 698 29,406 8,325 2,684 535,741

302,251 45,419 39,928 26,820 20,944 29,066 27,449 491,877 43,864

72,849 58,606 131,455 (58,205)

137,506 137,506 (98,653)

38,136 275 2,051 4,028 1,773 27,300 13,632 23,766 110,961 32,495

340,387 45,694 41,979 30,848 22,717 56,366 13,632 51,215 72,849 58,606 137,506 871,799 (80,499)

568 1,288 64,846 33,155 177,485 33,320 2,705 270 - (209,457) 6,366 69,994 18,134 (41,165) (3,712) (26,871) (34,231) 67,630 93,527 9,633 9,425 (5,126) 149,517 220,496 92,072 $ 159,150 $ 229,921 $ 86,946 $

87 1,943 64,846 33,155 177,485 36,025 270 (209,457) 16,710 111,204 (57,855) (129,603) (41,058) 85,868 (8,563) 5,369 156,504 618,589 147,941 $ 623,958

The notes to the financial statements are an integral part of this statement.

36

CITY OF CHARLOTTE, NORTH CAROLINA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2012 (In Thousands) Net change in fund balances - total governmental funds The change in net assets reported for governmental activities in the statement of activities is different because: 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 in the current period. (Note 2.b.) The net effect of various miscellaneous transactions involving capital assets (i.e., sales and donations) is to increase net assets. (Note 2.b.) Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. The issuance of long-term debt (e.g., bonds and installment purchases) provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction has any effect on net assets in the government-wide statements. Also, governmental funds report the effect of issuance costs, premiums, discounts and similar items when debt is issued, whereas these amounts are deferred and amortized in the statement of activities. This amount is the net effect of these differences in the treatment of long-term debt and related items. (Note 2.b.) Some expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. (Note 2.b.) Internal service funds are used to charge the costs of insured and uninsured risks of loss as well as employee health and life claims to individual funds. The net revenue of certain activities of the internal service funds is reported with governmental activities. Change in net assets of governmental activities The notes to the financial statements are an integral part of this statement. $ 5,369

26,079

107,885

4,430

(48,439)

(1,468)

8,240 $ 102,096

37

CITY OF CHARLOTTE, NORTH CAROLINA STATEMENT OF BUDGETARY COMPARISON GENERAL FUND FOR THE YEAR ENDED JUNE 30, 2012 (In Thousands) Variance with Final Budget Positive (Negative) $ 6,095 2,704 (1,158) (15) 166 (208) (978) (62) (453) (1,538) 1,029 1,492 338 (11) 24 (1,248) (44) 331 (1,023) (77) 5,364

Budgeted Amounts Original Final Resources (inflows): Property tax Sales tax Utilities franchise tax Police services Tax reimbursements Solid waste fee Business privilege licenses Licenses and permits Fines, forfeits and penalties Interlocal grants and agreements Federal and state shared revenues General government Public safety Cemeteries Use of money and property Sale of salvage and land Other Occupancy taxes Intragovernmental Transfers from other funds Resources available for appropriation Fund balance appropriated Total amounts available for appropriation Charges to appropriations (outflows): Police Fire Solid waste Transportation Engineering and property management Neighborhood development Planning Mayor and council City attorney City clerk City manager Human resources Finance Business support services Budget and evaluation Non-departmentals Total charges to appropriations $ 302,389 66,800 37,600 14,006 3,916 12,290 16,800 15,609 2,907 9,452 2,023 3,904 3,915 503 1,271 1,816 963 3,276 26,826 3,032 529,298 16,061 $ 545,359 $ 302,389 66,800 37,600 14,006 3,916 12,290 16,800 15,665 2,907 10,649 2,053 3,904 3,915 503 1,178 1,816 983 3,276 30,218 6,443 537,311 15,716 $ 553,027

Actual (Budgetary Basis) $ 308,484 69,504 36,442 13,991 4,082 12,082 15,822 15,603 2,454 9,111 3,082 5,396 4,253 492 1,202 568 939 3,607 29,195 6,366 542,675 7,406 550,081

$

$

$ 203,349 100,430 46,360 22,073 20,459 12,123 5,470 1,468 2,239 534 16,422 4,656 10,674 25,756 1,665 71,681 $ 545,359

$ 204,652 101,630 46,528 20,981 18,388 11,910 5,470 1,550 2,239 533 15,483 4,656 10,674 30,622 1,665 76,046 $ 553,027

$

$

204,420 101,630 46,291 20,844 17,922 11,625 4,922 1,521 2,223 500 15,473 4,229 10,387 30,622 1,426 76,046 550,081

$

$

232 237 137 466 285 548 29 16 33 10 427 287 239 2,946

The notes to the financial statements are an integral part of this statement.

38

CITY OF CHARLOTTE, NORTH CAROLINA RECONCILIATION OF THE STATEMENT OF BUDGETARY COMPARISON TO THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GENERAL FUND FOR THE YEAR ENDED JUNE 30, 2012 (In Thousands) Sources (inflows) of resources: Actual amounts (budgetary basis) "available for appropriation" from the statement of budgetary comparison Differences - budget to GAAP: Contributed fund balance is a budgetary resource available for appropriation but is not a current-year revenue for financial reporting purposes. Transfers from other funds are inflows of budgetary resources but are not revenues for financial reporting purposes. Proceeds from the sale of salvage and land are budgetary resources but are regarded as other financing resources, rather than revenue, for financial reporting purposes. Total revenues as reported on the statement of revenues, expenditures and changes in fund balances - governmental funds Uses (outflows) of resources: Actual amounts (budgetary basis) "total charges to appropriations" from the statement of budgetary comparison Differences - budget to GAAP: Encumbrances for supplies and equipment ordered but not received are reported in the year the order is placed for budgetary purposes, but in the year the supplies are received for financial reporting purposes. Transfers to other funds are outflows of budgetary resources but are not expenditures for financial reporting purposes. Total expenditures as reported on the statement of revenues, expenditures and changes in fund balances - governmental funds The notes to the financial statements are an integral part of this statement.

$ 550,081

(7,406) (6,366)

(568) $ 535,741

$ 550,081

(17,039) (41,165) $ 491,877

39

CITY OF CHARLOTTE, NORTH CAROLINA STATEMENT OF NET ASSETS PROPRIETARY FUNDS JUNE 30, 2012 (In Thousands) Business-type Activities Storm Water Airport

Water and Sewer ASSETS Current assets: Cash and cash equivalents Receivables, netAccounts Other Total receivables Due from other governmental agencies Due from other funds Prepaid insurance Inventories Restricted assetsCash and cash equivalents Investments Total restricted assets Total current assets Noncurrent assets: Deferred charges Deferred outflow of resources Other postemployment benefit assets Capital assetsLand Buildings Improvements other than buildings: Water and sewer systems Storm water systems Runways Transit corridors Other Total improvements other than buildings Intangibles Machinery and equipment Construction in progress Total capital assets Less accumulated depreciation Total capital assets, net Total noncurrent assets Total assets

$ 218,084 43,847 643 44,490 606 1,339 2,555 5,259 7,814 272,333 11,627 101,626 17,897 40,378 25,763 3,541,365 3,541,365 13,238 27,259 535,319 4,183,322 1,099,933 3,083,389 3,214,539 3,486,872

$ 47,785 6,873 175 7,048 2,352 1,691 1,691 58,876 880 1,404 184,457 184,457 3,359 69 299,918 487,803 40,995 446,808 449,092 507,968

$

678,473 20,248 2,004 22,252 3,318 66,521 197,913 264,434 968,477 14,726 7,078 297,504 626,667 392,108 85,647 477,755 34,785 104,231 1,540,942 533,894 1,007,048 1,028,852 1,997,329

40

Enterprise Funds Public Transit Total

Governmental Activities Internal Service Funds

$

102,106 993 332 1,325 56,033 7,242 166,706 1,868 1,982 50,787 85,840 336,040 28,743 364,783 6,951 205,389 186,244 899,994 230,941 669,053 672,903 839,609

$ 1,046,448 71,961 3,154 75,115 62,309 8,581 70,767 203,172 273,939 1,466,392 29,101 101,626 28,361 388,669 738,270 3,541,365 184,457 392,108 336,040 114,390 4,568,360 23,548 267,502 1,125,712 7,112,061 1,905,763 5,206,298 5,365,386 6,831,778

$

86,340 540 540 503 250 87,633 159 159 150 9 9 87,642

Continued on next page

41

CITY OF CHARLOTTE, NORTH CAROLINA STATEMENT OF NET ASSETS-(Continued) PROPRIETARY FUNDS JUNE 30, 2012 (In Thousands) Business-type Activities Storm Water Airport

Water and Sewer LIABILITIES Current liabilities: Accounts payable Claims payable Deposits and retainage payable Accrued interest payable Due to component unit Current maturities of long-term liabilities Current liabilities payable from restricted assetsAccounts payable Deposits and retainage payable Accrued interest payable Revenue bonds payable Total current liabilities payable from restricted assets Total current liabilities Noncurrent liabilities: General obligation bonds payable - net of deferred amount on refunding and unamortized premium Revenue bonds payable - net of deferred amount on refunding and unamortized premium Other financing agreements - net of unamortized premium Derivative instrument liability Federal revolving loan payable Refundable water and sewer construction deposits Due to participants Compensated absences payable Net OPEB liability Total noncurrent liabilities Total liabilities NET ASSETS Invested in capital assets, net of related debt Restricted for: Debt service Passenger facility charges Contract facility charges Working capital Unrestricted Total net assets

$

9,389 3,890 30,283 73,394

$

5,923 2,888 512 4,910

$

19,181 1,492 242 770

1,990 1,990 118,946

14,233

3,865 2,169 19,846 20,670 46,550 68,235

211,603 1,434,631 9,223 101,626 4,789 1,484 1,763,356 1,882,302

9,812 110,674 126 247 120,859 135,092

848,881 742 849,623 917,858

1,258,432 3,302 342,836 $ 1,604,570

323,267 1,691 47,918 $ 372,876

401,919 52,106 215,358 22,851 21,606 365,631 $ 1,079,471

Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds. Net assets of business-type activities

The notes to the financial statements are an integral part of this statement. 42

Enterprise Funds Public Transit Total

Governmental Activities Internal Service Funds

$

16,213 587 591 7,366

$

50,706 8,857 31,386 242 86,440

$

45,137 -

24,757

5,855 2,169 19,846 20,670 48,540 226,171

45,137

152,900 2,066 154,966 179,723

221,415 2,394,186 162,123 101,626 126 4,789 4,539 2,888,804 3,114,975

6,439 146 128 6,713 51,850

509,698 150,188 659,886

2,493,316 57,099 215,358 22,851 21,606 906,573 3,716,803

9 35,783 35,792

$

$

(3,003) $ 3,713,800

43

CITY OF CHARLOTTE, NORTH CAROLINA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2012 (In Thousands) Business-type Activities Storm Water Airport

Water and Sewer OPERATING REVENUES: Charges for services Availability fees Capacity fees Miscellaneous Total operating revenues OPERATING EXPENSES: Administration Operations and maintenance Claims and insurance premiums Other Depreciation Total operating expenses Operating income (loss) NONOPERATING REVENUES (EXPENSES): Sales tax Grant contributions Passenger facility charges Contract facility charges Investment earnings Interest expense and other charges Non-airline terminal revenue distribution Miscellaneous Total nonoperating revenues (expenses) Income (loss) before contributions and transfers CAPITAL CONTRIBUTIONS TRANSFERS IN TRANSFERS OUT Change in net assets Total net assets - beginning Total net assets - ending

$ 255,742 25,813 7,443 3,838 292,836 30,782 70,235 1,475 88,601 191,093 101,743

$

52,075 52,075 1,792 10,288 3,087 15,167 36,908

$ 132,144 25,845 157,989 13,320 46,741 19,289 37,935 117,285 40,704

16 53,094 8,907 1,316 328 4,217 (60,188) (5,679) (33,954) (17,913) (1,616) 2,015 (55) (60,472) (3,336) 14,296 41,271 33,572 55,000 12,741 1,962 5,396 54,012 35,534 60,396 1,550,558 337,342 1,019,075 $ 1,604,570 $ 372,876 $ 1,079,471

Adjustments to reflect the consolidation of internal service fund activities related to enterprise funds. Change in net assets of business-type activities

The notes to the financial statements are an integral part of this statement.

44

Enterprise Funds Public Transit Total

Governmental Activities Internal Service Funds

$

26,508 26,508 11,640 102,602 40,380 154,622 (128,114) 65,754 12,570 600 (7,420) 916 72,420 (55,694) 53,801 18,402 (3) 16,506 643,380 659,886

$ 466,469 25,813 7,443 29,683 529,408 57,534 229,866 20,764 170,003 478,167 51,241 65,754 12,586 53,094 8,907 6,461 (107,241) (17,913) 1,260 22,908 74,149 73,900 18,402 (3) 166,448

$

102,003 102,003 6,854 83,817 2 90,673 11,330 589 589 11,919 11,919 23,873 35,792

$

$ 3,679 $ 170,127

45

CITY OF CHARLOTTE, NORTH CAROLINA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2012 (In Thousands) Business-type Activities Water and Storm Sewer Water Airport CASH FLOWS FROM OPERATING ACTIVITIES: Receipts from customers Receipts from participants Payments to suppliers Internal activity - (payments to) receipts from other funds Receipts from trust Payments to employees Payments to airlines for non-airline terminal revenue distribution Payments for claims Payments for premiums Other receipts (payments) Net cash provided (used) by operating activities CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Operating grants Sales tax Transfers Net cash provided by noncapital financing activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Proceeds from capital debt Water and sewer construction deposits Passenger facility charges Contract facility charges Acquisition and construction of capital assets Principal paid on capital debt Interest and other charges paid on capital debt Capital contributions Net cash provided (used) by capital and related financing activities CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of investments Proceeds from sale and maturities of investments Interest received Net cash provided (used) by investing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents - beginning of year Cash and cash equivalents - end of year $ 287,634 $ 51,762 $ 165,747 (45,252) (3,937) (54,582) (22,083) (1,961) (9,650) (35,521) (5,361) (15,835) (7,360) 177,418 238 238 951 41,454 (18,577) 31 67,134 -

1,515 24 (110,342) (63,157) (81,632) 268 (253,324)

(37,331) (4,424) (6,168) (47,923)

205,387 52,933 8,744 (78,837) (38,840) (32,840) 23,258 139,805

(7,063) - (279,582) 103,986 150,443 798 321 3,958 97,721 321 (125,181) 22,053 (6,148) 81,758 198,586 55,624 663,236 $ 220,639 $ 49,476 $ 744,994

46

Enterprise Funds Public Transit Total $ 26,251 $ (47,726) (9,236) (58,183) 1,158 (87,736) 12,570 64,071 18,398 95,039

Governmental Activities Internal Service Funds 37,884 (5,376) 59,427 17,345 (1,530) (79,685) (16,229) 11,836 -

531,394 $ (151,497) (42,930) (114,900) (18,577) (5,220) 198,270 12,808 64,071 18,398 95,277

(40,562) (6,122) (7,415) 38,071 (16,028)

206,902 24 52,933 8,744 (267,072) (112,543) (128,055) 61,597 (177,470)

597 597 12,433 73,907 86,340

$

(286,645) 254,429 607 5,684 607 (26,532) (8,118) 89,545 110,224 1,027,670 102,106 $ 1,117,215 $

Continued on next page

47

CITY OF CHARLOTTE, NORTH CAROLINA STATEMENT OF CASH FLOWS-(Continued) PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2012 (In Thousands) Business-type Activities Water and Storm Sewer Water Airport RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: Operating income (loss) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activitiesDepreciation Other receipts (payments) Non-airline terminal revenue distribution Change in assets and liabilities: (Increase) decrease in receivables (Increase) decrease in due from other governmental agencies Decrease in due from other funds (Increase) decrease in inventories Decrease in prepaid insurance Decrease in other postemployment benefit assets Increase (decrease) in accounts payable (Decrease) in claims payable Increase in due to participants Increase in deposits and retainage payable Increase in due to component unit Increase (decrease) in compensated absences payable Increase in net OPEB liability Total adjustments Net cash provided (used) by operating activities NONCASH INVESTING, CAPITAL AND FINANCING ACTIVITIES: Donated assets Proceeds from refunding bonds Payment to refunded bond escrow agent Net noncash investing, capital and financing activities The notes to the financial statements are an integral part of this statement.

$ 101,743

$ 36,908

$ 40,704

88,601 (7,360) -

3,087 951 -

37,935 31 (18,577)

(5,217) (313) 7,758 5 (106) 19 43 53 41 (683) 736 (1,020) 15 153 135 252 32 80 75,675 4,546 26,430 $ 177,418 $ 41,454 $ 67,134 $ 12,454 $ 93,390 (93,390) $ 12,454 $ 2,045 2,045 $ -

$

48

Enterprise Funds Public Transit Total

Governmental Activities Internal Service Funds

$

(128,114) $

51,241

$

11,330

40,380 1,158 (257) 12 1 (905) 274 (462) 177 40,378 (87,736) $ $

170,003 (5,220) (18,577) 1,971 (89) 1 (886) 411 (1,429) 168 135 541 147,029 198,270 $ 14,499 $ 93,390 (93,390) 14,499 $

2 605 298 65 (5,008) 4,517 (5) 32 506 11,836 -

$ $

$

$

49

CITY OF CHARLOTTE, NORTH CAROLINA FIDUCIARY FUNDS STATEMENT OF FIDUCIARY NET ASSETS JUNE 30, 2012 (In Thousands) Firefighters' Retirement Pension Trust ASSETS Cash and cash equivalents Receivables: Employer contributions Member contributions Interest and dividends Total receivables Investments: Equity securities - stocks Fixed income securities - bonds Mutual funds Total investments Capital assets, at cost, net of accumulated depreciation of $284 Total assets LIABILITIES Deposits payable NET ASSETS Held in trust for pension/other postemployment benefits $ 6,209 145 143 366 654 133,794 41,347 181,122 356,263 311 363,437 1,045 $ 362,392 $ Employee Benefit Other Employee Benefit Trust $ 9,203 393 71 464 37,459 37,459 47,126 139 46,987

The notes to the financial statements are an integral part of this statement.

50

CITY OF CHARLOTTE, NORTH CAROLINA FIDUCIARY FUNDS STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS FOR THE YEAR ENDED JUNE 30, 2012 (In Thousands) Firefighters' Retirement Pension Trust ADDITIONS: ContributionsMember Employer Other Total contributions Investment income Net appreciation (depreciation) in fair value of investments Interest Dividends Investment expense Net investment income Total additions DEDUCTIONS: Benefits Refunds Insurance premiums Administration Depreciation Total deductions Change in net assets Net assets - beginning Net assets - ending Employee Benefit Other Employee Benefit Trust

$

8,374 7,720 16,094 (1,481) 1,449 4,326 4,294 1,860 2,434 18,528

$

6,140 15,375 263 21,778 1,631 445 2,076 187 1,889 23,667 11,803 5,141 401 17,345 6,322 40,665 46,987

$

21,135 505 517 49 22,206 (3,678) 366,070 362,392 $

The notes to the financial statements are an integral part of this statement.

51

CITY OF CHARLOTTE, NORTH CAROLINA INDEX TO THE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2012 Note 1. Topic SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Reporting Entity .................................................................................................................................... 54 Basis of Presentation ............................................................................................................................ 55 Measurement Focus and Basis of Accounting ..................................................................................... 57 Assets, Liabilities and Net Assets/Fund Balances Cash and Investments ................................................................................................................... 58 Receivables and Payables ............................................................................................................. 58 Inventories ...................................................................................................................................... 59 Capital Assets ................................................................................................................................ 59 Compensated Absences ................................................................................................................ 59 Long-term Liabilities ....................................................................................................................... 60 Net Assets/Fund Balances ............................................................................................................. 60 2. RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS Explanation of certain differences between the governmental funds balance sheet and the government-wide statement of net assets………………… .................................................................. 63 Explanation of certain differences between the governmental funds statement of revenues, expenditures and changes in fund balances and the government-wide statement of activities .......... 64 3. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY Budgetary Information .......................................................................................................................... 66 4. DETAILED DISCLOSURES ON ALL FUNDS Deposits ................................................................................................................................................ 66 Investments .......................................................................................................................................... 67 Receivables .......................................................................................................................................... 71 Property Taxes ..................................................................................................................................... 71 Restricted Assets .................................................................................................................................. 72 Capital Assets ....................................................................................................................................... 73 Interfund Receivables, Payables and Transfers................................................................................... 76 Payables ............................................................................................................................................... 77 Deferred Revenues .............................................................................................................................. 78 Long-term Liabilities ............................................................................................................................. 79 General Obligation Bonds .............................................................................................................. 81 Special Obligation Bonds ............................................................................................................... 83 Page

52

CITY OF CHARLOTTE, NORTH CAROLINA INDEX TO THE NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 Note 4. Topic DETAILED DISCLOSURES ON ALL FUNDS-(Continued) Revenue Bonds .............................................................................................................................. 84 Installment Purchases .................................................................................................................... 87 Commercial Paper ......................................................................................................................... 88 Other Long-term Liabilities Section 108 Loan Guarantee................................................................................................... 89 Private Loan............................................................................................................................. 90 Municipal Systems ................................................................................................................... 90 Federal Revolving Loan ........................................................................................................... 91 Derivative Instruments ................................................................................................................... 92 Refundings ..................................................................................................................................... 95 Other Debt Information................................................................................................................... 95 Early Extinguishment ..................................................................................................................... 96 Subsequent Events ........................................................................................................................ 96 Fund Balance........................................................................................................................................ 96 5. PENSION PLANS AND OTHER BENEFITS Local Governmental Employees’ Retirement System .......................................................................... 97 Charlotte Firefighters’ Retirement System ........................................................................................... 97 Law Enforcement Officers’ Separation Allowance ............................................................................. 100 Supplemental Retirement Income Plan for Law Enforcement Officers .............................................. 102 Death Benefit Plan .............................................................................................................................. 103 Other Postemployment Benefits ......................................................................................................... 103 Deferred Compensation Plan ............................................................................................................. 106 6. OTHER INFORMATION Airport Leasing Arrangements with Tenants ...................................................................................... 107 Passenger Facility Charges ................................................................................................................ 108 Insurance Employee Health and Life ............................................................................................................ 108 Risk Management ........................................................................................................................ 108 Commitments and Contingencies....................................................................................................... 110 Arena…… ........................................................................................................................................... 112 NASCAR Hall of Fame ....................................................................................................................... 112 Cultural Arts Facilities ......................................................................................................................... 113 US Airways ......................................................................................................................................... 113 Page

53

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2012 (Dollar Amounts In Thousands) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES a. Reporting Entity The City of Charlotte (City) is a municipal corporation governed by an elected mayor and elevenmember council. The accompanying financial statements present the activities of the City and its two component units, entities for which the City is financially accountable. The Charlotte Firefighters’ Retirement System (System) is so intertwined with the City that it is, in substance, the same as the City. Accordingly, the System is blended and reported as if it was part of the City. The Charlotte Regional Visitors Authority (Authority) is reported in a separate column in the government-wide financial statements to emphasize that it is legally separate from the City. describes the City’s component units: Component Unit Charlotte Firefighters’ Retirement System Reporting Method provides Blended The following table

Criteria for Inclusion The System retirement, disability and death benefits to civil service employees of the Charlotte Fire Department. These services are exclusively for the City.

Separate Financial Statements Charlotte Firefighters’ Retirement System 428 East Fourth Street, Suite 205 Charlotte, North Carolina 28202

Charlotte Regional Visitors Authority

A “special district” as defined by state statutes. The City Council appoints the governing board and the City pays outstanding general obligation bonded debt. Net operating proceeds are to be used to pay principal and interest on the bonded debt or as otherwise directed by City Council.

Discrete

Charlotte Regional Visitors Authority 501 South College Street Charlotte, North Carolina 28202

The Charlotte Housing Authority (Housing Authority), which is excluded from the City’s financial statements, is considered a related organization. The City Council appoints the Housing Authority’s governing board; however, the City is not financially accountable for the Housing Authority. The Charlotte Transit Center, Inc. is a joint venture resulting from an agreement between the City and Bank of America. The corporation was established to build and operate a public transportation terminal known as the Charlotte Transit Center (Center). The Board of Directors is comprised of two members appointed by the City and two members appointed by Bank of America. The City provided 54

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands) the land and Bank of America constructed the building. The Center has two sections, transit and retail. The City funds all expenses related to the transit section and common areas which benefit transit riders and employees. Bank of America funds all expenses related to the retail area which is available for lease to tenants. The City does not have an equity interest but does have an ongoing financial responsibility because the Center’s existence depends on continued funding by the City. The City’s expenditures related to the transit section are reflected in the Public Transit Enterprise Fund. The financial statements of the Center, which has a December 31 year-end, may be obtained from the following address: Charlotte Transit Center, Inc c/o Lincoln Harris, LLC 401 North Tryon Street, Suite 200 Charlotte, North Carolina 28202 b. Basis of Presentation Government-wide Statements: The statement of net assets and the statement of activities display information about the primary government (the City) and its component unit. These statements include the financial activities of the overall government, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. These statements distinguish between the governmental and business-type activities of the City as well as the City and its discretely presented component unit. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange transactions. financed in whole or in part by fees charged to external parties. Business-type activities are

The statement of activities presents a comparison between direct expenses and program revenues for a given function or activity. Direct expenses are those that are clearly identifiable with a specific program. Program revenues include (a) charges paid by recipients of goods or services offered by the program and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Taxes and other items not properly included as program revenues are reported as general revenues. As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are certain charges between the City’s enterprise functions and various other functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Fund Financial Statements: The fund financial statements provide information about the City’s

funds. Separate statements for each fund category – governmental, proprietary, and fiduciary – are presented. The emphasis of fund financial statements is on major governmental and enterprise funds, each displayed in a separate column. All remaining governmental funds are aggregated and reported as nonmajor funds. 55

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands) 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. The principal operating revenues of the enterprise funds, charges for services, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially equal values. Nonoperating revenues, such as subsidies and investment earnings, result from nonexchange transactions or ancillary activities. The City reports the following major governmental funds: General fund. fund. Debt Service. This fund accounts for the resources accumulated and payments made for principal and interest on debt of governmental activities. Capital projects. This fund accounts for financial resources, primarily proceeds from bonds, other financing agreements and taxes, used for the acquisition, construction and improvement of capital equipment and facilities. The City reports the following major enterprise funds: Water and sewer. This fund accounts for the activities of Charlotte-Mecklenburg Utilities, provider of water and sewer services. Storm water. This fund accounts for the activities of Storm Water Services, administrator of storm water programs and policies. Airport. This fund accounts for the activities of the Charlotte/Douglas International Airport. Public transit. This fund accounts for the activities of the Charlotte Area Transit System, provider of public mass transportation. The City reports the following fund types: Internal service funds. These funds account for (a) the general insurance program of the City, as well as risk management services provided, on a cost-reimbursement basis, to other governmental units and agencies in Mecklenburg County, and (b) funds contributed by the City and its employees for health and life benefits. This is the City’s primary operating fund. It accounts for all financial

resources of the general government, except those required to be accounted for in another

56

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands) Fiduciary funds. These funds account for (a) resources accumulated for the provision of benefit payments to the Charlotte Firefighters’ Retirement System members and their beneficiaries, and (b) resources accumulated for the provision of other postemployment benefit payments for retirees and their beneficiaries. c. Measurement Focus and Basis of Accounting

Government-wide, Proprietary, and Fiduciary Fund Financial Statements: The government-wide, proprietary fund, and fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Nonexchange transactions, in which the City gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, grants, and donations. Revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from grants and donations is recognized in the fiscal year in which all requirements have been satisfied. Governmental Fund Financial Statements: Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The City considers all revenues reported in the governmental funds to be available if the revenues are collected within ninety days after the end of the current fiscal period except reimbursement grants which are accrued based on expenditures. Primary sources of revenue susceptible to accrual include occupancy tax, sales tax, Alcoholic Beverage Commission profits and federal and state grants. Expenditures are recorded when a liability is incurred, except for principal and interest on general debt, claims and judgments, and compensated absences, which are recognized as expenditures when payment occurs. General capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of debt issues are reported as other financing sources. The government-wide and proprietary funds financial statements follow Financial Accounting Standards Board (FASB) Statements and Interpretations issued on or before November 30, 1989; Accounting Principles Board (APB) Opinions; and Accounting Research Bulletins, unless those pronouncements conflict with GASB pronouncements. 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 grant resources to such programs followed by general revenues.

57

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands) d. Assets, Liabilities and Net Assets/Fund Balances (1) Cash and Investments The City maintains a cash management pool to facilitate disbursement and investment and maximize investment income. Earnings on the pooled funds are apportioned and credited to the funds monthly based on the average daily balance of each fund. Since individual funds may deposit additional amounts at any time and may withdraw funds at any time without prior notice or penalty, the pool is used essentially as a demand deposit account and considered cash and cash equivalents. The pool is used by all funds except the Firefighters’ Retirement System Fund. For arbitrage purposes, the City also maintains separate pools for the proceeds of each bond sale subsequent to 1986 in compliance with the Internal Revenue Code relative to yield restrictions and rebate requirements. For funds not included in the pools described above, cash and cash equivalents consist of cash, demand deposits and short-term, highly liquid investments. Short-term refers to investments with an original maturity of three months or less at date of acquisition. Highly liquid investments are those that are both readily convertible to known amounts of cash and so near their maturity that the risk of changes in value because of changes in interest rates is insignificant. The restricted cash and cash equivalents/investments are restricted pursuant to bond covenants and other financing agreements. All restricted money market funds of the enterprise funds are considered cash and cash equivalents. The remaining amount of restricted assets is considered investments. Investments, except for North Carolina Capital Management Trust (NCCMT) and Firefighters’ Retirement System Fund, are reported at fair value as determined by quoted market prices. The securities of the NCCMT Cash Portfolio, a SEC registered money market mutual fund, are valued at fair value, which is the NCCMT’s share price. The NCCMT Term Portfolio’s securities are valued at fair value. Money market investments that have a remaining maturity at the time of purchase of one year or less are reported at amortized cost. Non-participating interest earning investment contracts are reported at cost. See Note 5.b., “Method Used to Value Investments,” for an explanation of reporting the Firefighters’ Retirement System’s investments at fair value. Component Unit: The authority considers investments with an original maturity of three months or less to be cash equivalents. (2) Receivables and Payables Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as “due to/from other funds.” Any residual balances outstanding between the governmental activities and business-type activities are reported in the governmentwide financial statements as “internal balances.” 58

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands)

Property tax and accounts receivables are shown net of an allowance for uncollectibles. Notes receivable in governmental funds consist of housing rehabilitation and economic development loans that are generally not expected or scheduled to be collected in the subsequent year. (3) Inventories Inventories are recorded as an expenditure/expense when consumed rather than when purchased. Inventories are valued at cost, which approximates market, using the first-in, first-out (FIFO) method. (4) Capital Assets Purchased or constructed capital assets are reported at cost or estimated historical cost. Donated capital assets are recorded at their estimated fair value at the date of donation. General infrastructure assets include annexed streets that were acquired or received substantial improvements subsequent to July 1, 1980 and are reported at estimated historical cost using deflated replacement cost. The cost of normal maintenance and repairs that do not add value to the assets or materially extend assets’ lives are not capitalized. Capital assets are assets with an initial, individual cost of more than $5, except intangible assets which have a minimum cost of $100. Capital assets are depreciated using the straight-line method over the following estimated useful lives: Buildings Infrastructure Improvements other than buildings Intangible Machinery and equipment 20 - 40 years 40 years 10 - 60 years 5 - 10 years 3 - 40 years

Net interest cost on debt issued to finance the construction of capital assets was capitalized during the construction period in the Water and Sewer, Storm Water and Airport Enterprise Funds in the amounts of $18,486, $510, and $1,972, respectively, for the year ended June 30, 2012. (5) Compensated Absences Employees earn vacation leave at the rate of 10 to 20 days per year and can accrue a maximum of 20 to 40 days, depending on length of service. Unused vacation days are payable upon termination, resignation, retirement or death.

59

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands) Employees accumulate sick leave at the rate of one day per month and can accrue an unlimited number of days. Sick leave can be taken for personal illness or illness of a member of the immediate family. Sick leave is lost upon termination or resignation. However, twenty percent of outstanding sick leave, with a maximum of 43.5 days, is payable upon retirement or death. Compensated absences payable includes accumulated unpaid vacation leave and sick leave. This liability is recorded in the government-wide and proprietary fund financial statements. (6) Long-term Liabilities In the government-wide financial statements and proprietary 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 funds statement of net assets. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the straight-line method. Bonds payable are reported net of the applicable premium or discount. Long-term liabilities are reported net of the deferred amounts on refunding. The deferred amount on refunding is the difference between the reacquisition price and the net carrying amount of the old debt. This amount is amortized as a component of interest expense, using the straight-line basis, over the life of the old debt or new debt, whichever is shorter. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of the debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. The City enters into interest rate swap agreements to modify interest rates on outstanding debt. The swaps are reported at fair market value in the government-wide financial statements and proprietary fund financial statements using hedge accounting. (7) Net Assets/Fund Balances Net Assets. 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 represent constraints on resources that are externally imposed by creditors, grantors, contributors, bond covenants, regulations of other governments or by State statute.

60

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands) Fund Balances. In the governmental fund financial statements, fund balance is composed of five classifications designed to disclose the hierarchy of constraints placed on how fund balance can be spent. North Carolina State law [G.S. 159-13(b)(16)] restricts appropriation of fund balance for the subsequent year’s budget to an amount not to exceed the sum of cash and investments minus the sum of liabilities, encumbrances, and deferred revenues arising from cash receipts as those amounts stand at the close of the fiscal year preceding the budget year. The governmental fund types classify fund balances as follows: Nonspendable fund balance – This classification includes amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact. Inventories – portion of fund balance that is not an available resource because it represents the year-end balance of ending inventories, which are not spendable resources. Perpetual care – portion of fund balance that is required to be retained in perpetuity for maintenance of cemeteries. Restricted fund balance – This classification includes amounts that are restricted to specific purposes externally imposed by creditors or imposed by law. Restricted for State statute – portion of fund balance that is not an available resource for appropriation in accordance with State law [G.S. 159-8(a)]. Restricted for Special obligation debt service – portion of fund balance that is legally restricted through financing agreements for future payment of debt service requirements. Restricted for Public safety – portion of fund balance that is restricted by revenue source for public safety expenditures. Restricted for Streets and highways – Powell Bill and other portion of fund balance that is restricted by revenue source for street construction and maintenance expenditures. For the Special Revenue funds, this amount represents the balance of the total unexpended Powell Bill and other grant funds. Restricted for Culture and Recreation – portion of fund balance that is restricted by revenue source for culture and recreation expenditures.

61

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands) Restricted for Community planning and development – portion of fund balance that is restricted by revenue source for community planning and development expenditures. Committed fund balance – This classification includes amounts that can only be used for specific purposes imposed by ordinance approved by the City Council, the highest level of decision-making authority. Any changes or removal of specific purposes requires action by the City Council. Committed for Capital projects – portion of fund balance committed by the City Council for capital projects. Committed for Culture and recreation – portion of fund balance that is committed by contractual obligation for culture and recreation expenditures. Committed for Component unit – portion of fund balance committed by the City Council for the Charlotte Regional Visitors Authority. Assigned fund balance – This classification includes amounts that the City intends to use for specific purposes. Assigned for Debt service – portion of fund balance in the Debt Service fund that is not nonspendable, restricted, nor committed that will be used for future payment of debt service requirements. Assigned for Capital projects – portion of fund balance in the General fund that is not nonspendable, restricted, nor committed that will be used for low-income housing projects. Assigned for Community planning and development – portion of fund balance in the General fund that is not nonspendable, restricted, nor committed that will be used for business incentive expenditures. Unassigned fund balance – This classification includes amounts that have not been assigned to another fund or is restricted, committed, or assigned to specific purposes within the general fund. When expenditures are incurred for purposes for which both restricted and unrestricted fund balance is available, the City considers restricted amounts to have been spent first. For purposes of fund balance classification, expenditures are to be spent from restricted fund balance first, followed in order by committed, assigned, and unassigned fund balance. The City’s Capital Investment Plan Financial Policies which are approved annually by the City Council include a policy to maintain the General fund balance at sixteen percent of the operating budget. Any portion of the General fund balance in excess of sixteen percent of budgeted expenditures is dedicated to capital expenses, unless otherwise directed by City Council. 62

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands)

2. RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS a. Explanation of certain differences between the governmental fund balance sheet and the government-wide statement of net assets The governmental fund balance sheet includes a reconciliation between fund balance - total government funds and net assets - governmental activities as reported in the government-wide statement of net assets. One element of that reconciliation explains that “Long-term liabilities are not due and payable in the current period and therefore are not reported in the funds.” The details of this $1,566,623 difference are as follows:

Bonds and installment purchases payable Net of deferred amounts on refunding, premiums and discounts Commercial paper notes Derivative instrument liability Swaption borrowing payable Compensated absences Section 108 loan guarantee Private Loan Law enforcement officers' separation allowance Unfunded OPEB liability Accrued interest payable Net adjustment to reduce fund balance - total governmental funds to arrive at net assets governmental activities

$ 1,269,509 72,885 24,094 68,019 7,931 42,721 9,342 39,100 15,250 8,418 9,354

$ 1,566,623

63

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands) b. Explanation of certain differences between the governmental funds statement of revenues, expenditures and changes in fund balances and the government-wide statement of activities The governmental fund statement of revenues, expenditures and changes in fund balances includes a reconciliation between net changes in fund balances - total governmental funds and changes in net assets of governmental activities as reported in the government-wide statement of activities. One element of that reconciliation explains that “Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense.” The details of this $26,079 difference are as follows:

Capital outlay Depreciation expense Net adjustment to increase net changes in fund balances - total governmental funds to arrive at changes in net assets of governmental activities

$ 126,483 (100,404)

$

26,079

Another element of that reconciliation states “The net effect of various miscellaneous transactions involving capital assets (i.e., sales and donations) is to increase net assets.” The details of this $107,885 difference are as follows:

In the statement of activities, only the loss on the sale of capital assets is reported. However, in the governmental funds, the proceeds from the sale increase financial resources. Thus, the change in net assets differs from the change in fund balance by the cost of the capital assets sold. Donations of capital assets increase net assets in the statement of activities, but do not appear in the governmental funds because they are not financial resources. Net adjustment to increase net changes in fund balances - total governmental funds to arrive at changes in net assets of governmental activities

$

(230)

108,115

$

107,885

64

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands)

Another element of that reconciliation states “The issuance of long-term debt (e.g., bonds and installment purchases) provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction has any effect on net assets. Also, governmental funds report the effect of issuance costs, premiums, discounts, and similar items when debt is issued, whereas these amounts are deferred and amortized in the statement of activities.” The details of this ($48,439) difference are as follows:

Debt issued or incurred: Issuance of installment purchase Issuance of commercial paper notes Private loan Plus premium on debt issuance Less deferred amount on refunding Less issuance cost Derivative instrument Swaption borrowing Principal repayments: General obligation debt Installment purchases Commercial paper Section 108 loan guarantee Net adjustment to decrease net changes in fund balances - total governmental funds to arrive at changes in net assets of governmental activities

$

(33,155) (64,846) (270) (36,025) 31 1,341 (20,838) (344) 36,982 44,572 21,880 2,233

$

(48,439)

Another element of that reconciliation states, “Some expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds.” The details of this ($1,468) difference are as follows:

Accrued interest Amortization on deferred amount on refunding Amortization of issuance costs Amortization of debt premiums Amortization of discounts Compensated absences Law enforcement officers' separation allowance Unfunded OPEB liability Change in pension assets Net adjustment to increase net changes in fund balances - total governmental funds to arrive at changes in net assets of governmental activities

$

172 (860) (579) 5,163 (32) (2,157) (1,929) (670) (576)

$ (1,468)

65

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands) 3. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY Budgetary Information As required by State statutes, prior to July 1 each year the City Council adopts an annual appropriation ordinance for all funds except those for which expenditures are authorized by project ordinance and the Internal Service and Fiduciary Funds. City funds budgeted by project ordinance include the Capital Projects Fund, Democratic National Convention, Public Safety and Other Grants, Neighborhood Development, Employment and Training, Stimulus Grants, and Emergency Telephone System Special Revenue Funds and the Enterprise Funds capital projects. The annual budgets are adopted at the fund level which is the legal level of budgetary control. Supplemental appropriations at this level require approval of the City Council. During the year, several amendments to the budget were necessary. Administrative control is maintained through the establishment of more detailed line-item budgets. The budget is entered into the accounting records and comparisons of actual to budget are made throughout the year. City administration has the authority to amend line-item budgets. The final budgets shown in the statements are as amended at June 30, 2012. Annual budgets are adopted on the modified accrual basis except that they include encumbrances for the current year. Current year’s appropriations are charged for encumbrances when commitments for the expenditures of monies are issued. Encumbrances outstanding at year-end are reported as reservations of fund balances and do not constitute expenditures or liabilities because the commitments will be reappropriated and honored during the subsequent year. The accompanying Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual (Non-GAAP Basis) - General Fund presents comparisons of the original and final budget with actual data. Since the legally adopted budget is on a basis which differs from GAAP, the actual data is similarly presented on a budgetary basis for comparison purposes. A reconciliation of the non-GAAP basis to the GAAP basis is presented.

4. DETAILED DISCLOSURES ON ALL FUNDS a. Deposits As of June 30, 2012, the bank balances and carrying amounts of bank deposits were as follows: Bank Balance City - Governmental and Business-type Activities City - Fiduciary Fund Component unit - Authority $152,232 83 9,197 Carrying Amount $ 133,913 15,412 8,398

66

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands) All deposits of the City are made in board-designated official depositories and are secured as required by State statutes. The City may designate as an official depository any bank or savings and loan association whose principal office is located in North Carolina. Also, the City may establish time deposit accounts such as NOW and SuperNOW accounts, money market accounts, and certificates of deposit. All of the City’s deposits are either insured or collateralized by using the Pooling Method. Under the Pooling Method, a collateral pool, all uninsured deposits are collateralized with securities held by the State Treasurer’s agent in the name of the State Treasurer. Since the State Treasurer is acting in a fiduciary capacity for the City, these deposits are considered to be held by the City’s agent in the City’s 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 the escrow agent. Because of the inability to measure the 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 has no policy regarding custodial credit risk for deposits. Of the City’s bank balances, $151,965 was covered at the federal depository insurance coverage level and $350 was covered by collateral held under the Pooling Method. Component Unit: The Authority must comply with the requirements of the State statutes as previously described for the City. Of the bank balances, $1,561 was covered by federal depository insurance (including coverage by the Certificate of Deposit Account Registry Service Program). The remaining balances were covered by collateral held under the Pooling Method. b. Investments State statute 159-30 authorizes the City and the Authority to invest in obligations of the United States or obligations fully guaranteed both as to principal and interest by the United States; obligations of the State of North Carolina; bonds and notes of any North Carolina local government or public authority; obligations of certain non-guaranteed federal agencies; certain high quality issues of commercial paper and bankers’ acceptances; repurchase agreements having third-party safekeeping; and the North Carolina Capital Management Trust (NCCMT), an SEC registered mutual fund. The City is not authorized to enter into reverse repurchase agreements. The investments of the Charlotte Firefighters’ Retirement System (System) Pension Trust fund are governed by the North Carolina Act (Act) establishing the System. This Act authorizes additional investment types which include corporate bonds, common stock, guaranteed investment contracts and mutual funds. The investments of the Employee Benefit Trust Plan (EBTP) are governed by state statute 14769.2(b)(1)-(6)&(8). This legislation authorizes additional investment types which include corporate bonds, common stock, and mutual funds. 67

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands) City - Governmental and Business-type Activities – The investments and maturities at June 30, 2012, were as follows:
Investment Maturities (in Years) Less than 1 1-3 More than 3 $ 434,525 100,000 N/A N/A 8,000 542,525 $ 945,711 N/A N/A $ 945,711 $ 110,707 N/A N/A $ 110,707

Fair Value Investment type U.S. Agencies Commercial Paper Mutual Funds NCCMT Cash Portfolio NCCMT Term Portfolio* Total $ 1,490,943 100,000 70,243 233,068 8,000 $ 1,902,254

$

* Because the NCCMT Term Portfolio had a weighted average maturity of 0.17 years, it was presented as an investment with a maturity of 6-12 months.

Interest Rate Risk. Although the City does not have a formal investment policy, internal investment guidelines prohibit maturities longer than five years which helps manage exposure to fair value losses in rising interest rate environments. Credit Risk. State law limits investments in commercial paper to the top rating issued by nationally recognized statistical rating organizations (NSRO’s). Although the City had no formal policy on managing credit risk, internal investment guidelines for commercial paper require at least two ratings from either Standard & Poor’s (S&P), Fitch Ratings (Fitch), or Moody’s Investors Service (Moody’s). As of June 30, 2012, the City’s investments in commercial paper carried at least S&P A1, Moody’s P1 or Fitch F1 ratings. The City’s investments in the NCCMT Cash Portfolio carried a credit rating of AAAm by S&P as of June 30, 2012. The City’s investment in the NCCMT Term Portfolio is unrated. The Term Portfolio is authorized to invest in instruments permitted by State statute 159-30 described above. The City’s investments in U.S. Agencies (Federal Home Loan Bank, Federal National Mortgage Association, Federal Home Loan Mortgage Corporation and Federal Farm Credit Bank) are rated AA+ by S&P and Aaa by Moody’s. Custodial Credit Risk. For an investment, custodial credit risk is the risk that in the event of the failure of the counterparty, the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. At June 30, 2012, the City had no investments subject to custodial credit risk. The City had no formal policy on custodial credit risk. However, the City’s internal policy limits custodial credit risk by providing that security in the collateral be delivered to a third party safekeeping bank designated by the City. Concentration of Credit Risk. The City’s informal investment policy limits the amount of commercial paper or bankers acceptances to a maximum of 25 percent of the portfolio. For commercial paper, a maximum of $20 million may be invested in any one issuer. For bankers acceptances, the maximum investment is limited to 10 percent of the portfolio for any one issuer. 68

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands)

City – Fiduciary Fund: Charlotte Firefighters’ Retirement System – The investments and maturities at June 30, 2012 were as follows:
Investment Maturities (in Years) More than 1-5 6 - 10 10 $ 2,028 $ 1,432 $ 1,854 12,566 10,099 5,876 6,664 N/A N/A N/A N/A N/A N/A $ 12,127 $ 7,308 $ 21,084

Investment type U.S. Treasuries U.S. Agencies Corporate bonds Common stocks Mutual funds Total

Fair Value $ 5,314 12,566 23,467 133,794 181,122 $ 356,263

Less than 1 $ 828 N/A N/A $ 828

Interest Rate Risk. The System does not have a formal investment policy that limits investment maturities. Credit Risk. The System is authorized to invest in bonds with a quality rating of no less than investment grade and unrated U.S. Treasuries and Agencies. The quality ratings of investments in fixed income securities as described by nationally recognized statistical rating organizations at June 30, 2012 are as follows:
Quality Rating AAA Baa > AA Total credit risk debt securities US Government fixed income securities: Government National Mortgage Association U.S. Treasury Not rated Total fixed income securities Fair Value $ 11,532 17,177 28,709 2,673 5,315 4,650 41,347 Percentage of Portfolio 27.89% 41.54% 69.43% 6.47% 12.85% 11.25% 100.00%

$

Concentration of Credit Risk. The System limits the amount of equity holdings in any one company to 8 percent of the market value of the portfolio; the amount of equity holdings in any one sector to 30 percent of the market value of the portfolio; and the amount of fixed-income securities in any one corporation to 5 percent of the market value of the portfolio. There is no limit on securities backed by the full faith and credit of the U.S. Government or any of its instrumentalities. In accordance with the Act, the System has invested in collateralized mortgage obligations (CMO) and mortgage backed securities. CMO and mortgage backed securities are based on cash flows from principal and interest payments on underlying mortgages. CMO rates trade in sympathy with treasury rates. At year-end, the System held $913 of these securities.

69

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands) City – Fiduciary Fund: Employee Benefit Trust Plan (EBTP) – At June 30, 2012, the EBTP had investments of $37,459 in mutual funds. Interest Rate Risk. The EBTP does not have a formal investment policy that limits investment maturities. Credit Risk. The EBTP adheres to state statutes which limit credit risk by limiting investments in below investment grade securities and restricting the purchase of non-exchange traded investments. Concentration of Credit Risk. The EBTP fund investments will be diversified by policy according to a strategic asset allocation across a range of company capitalizations in domestic and international equities as well as domestic and global bonds. The EBTP limits the amount of equity holdings in any one company to 8 percent of the market value of the portfolio; the amount of equity holdings in any one sector to 30 percent of the market value of the portfolio; and the amount of fixed-income securities in any one corporation to 5 percent of the market value of the portfolio. There is no limit on securities backed by the full faith and credit of the U.S. Government or any of its instrumentalities. Component Unit – At June 30, 2012, the Authority had investments of $190 in the NCCMT’s Cash Portfolio, which carried a credit rating of AAAm by Standard and Poor’s.

70

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands) c. Receivables

Accounts receivable are presented net of allowance for uncollectibles in the accompanying financial statements. The receivables and applicable allowances for uncollectibles are as follows:
Gross Net Receivable Allowance Receivable Governmental General Debt Service Capital Projects Nonmajor Total Governmental Proprietary Water and Sewer Storm Water Airport Public Transit Internal Service Total Proprietary Fiduciary Firefighters' Retirement Employee Benefit Total $ 36,620 3,103 12,468 3,737 55,928 52,752 9,382 22,499 1,700 540 86,873 654 464 $143,919 $ 27,192 2,961 6,440 3,485 40,078 8,262 2,334 247 375 11,218 $ 51,296 $ 9,428 142 6,028 252 15,850 44,490 7,048 22,252 1,325 540 75,655 654 464 $ 92,623

In February 2002, City Council approved an interest-free loan to the Authority for $5,000 for the renovation of Ovens Auditorium. In May 2007, the Council approved a new repayment schedule for the loan agreement. The term of the loan was extended by thirty years and established a $160 per year repayment through fiscal year 2037. At June 30, 2012 the balance of the loan outstanding was $3,758. d. Property Taxes Pursuant to State statutes, property taxes levied on July 1, the beginning of the fiscal year, are due September 1; however, penalties do not accrue until January 6. The taxes levied effective July 1, 2011, were based on the assessed values listed as of January 1, 2011, which is the lien date.

71

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands) The City and Mecklenburg County have a common tax base and overlapping bonded debt. Mecklenburg County is the City’s agent for listing and collecting property taxes levied. distribution of the City’s levy for 2012 (tax rate per $100 valuation) to its funds is shown below:
General Debt Service Capital Projects Total $ 0.3600 0.0650 0.0120 $ 0.4370

The

In addition, special taxes are levied on areas referred to as Municipal Services Districts.

The

purpose of these taxes is to aid the revitalization of these areas. The tax rates for 2012 for Districts 1, 2, 3, 4 and 5 were $.0168, $.0233, $.0358, $.0668 and $.0279, respectively. e. Restricted Assets Cash, cash equivalents and investments are restricted in the accompanying statements as follows by fund:
GovernmentalDebt Service Capital Projects Total Governmental EnterpriseWater and Sewer Storm Water Airport Total Enterprise Total

$

7 23,586 23,593 7,814 1,691 264,434 273,939

$ 297,532

These fund assets are restricted pursuant to bond orders and other financing agreements.

72

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands) f. Capital Assets

Capital asset activity for governmental activities for the year ended June 30, 2012 was as follows:
Beginning Balance Governmental activitiesCapital assets, not being depreciated: Land Construction in progress Total capital assets, not being depreciated Capital assets, being depreciated: Buildings Infrastructure Intangibles Machinery and equipment Total capital assets being depreciated Less accumulated depreciation for: Buildings Infrastructure Intangibles Machinery and equipment Total accumulated depreciation Total capital assets, being depreciated, net Governmental activities capital assets, net Increases Decreases Ending Balance

$ 3,045,512 $ 64,875 $ 24 $3,110,363 322,745 121,823 41,169 403,399 3,368,257 1,051,832 2,344,308 12,963 157,460 3,566,563 229,685 690,753 11,398 116,287 1,048,123 2,518,440 186,698 12,962 57,933 620 17,632 89,147 26,011 59,248 473 14,674 100,406 (11,259) 41,193 78 5,594 5,672 5,388 5,388 284 3,513,762 1,064,794 2,402,163 13,583 169,498 3,650,038 255,696 750,001 11,871 125,573 1,143,141 2,506,897

$ 5,886,697 $ 175,439 $ 41,477 $6,020,659

Depreciation expense was charged to activities as follows:

Governmental activities: Public safety Sanitation General administration Support services Engineering and property management Streets and highways Community planning and development Culture and recreation Capital assets held by the City's internal service funds are charged to the various functions based on the usage of assets Total depreciation expense - governmental activities

$

11,767 3,271 1,581 1,330 3,094 56,696 9,737 12,928

$

2 100,406

73

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands) Capital asset activity for business-type activities for the year ended June 30, 2012 was as follows:
Beginning Balance Business-type activitiesWater and Sewer: Capital assets, not being depreciated: Land Construction in progress Total capital assets, not being depreciated Capital assets, being depreciated: Buildings Improvements other than buildings: Water and sewer systems Intangibles Machinery and equipment Total capital assets being depreciated Less accumulated depreciation for: Buildings Improvements other than buildings: Water and sewer systems Intangibles Machinery and equipment Total accumulated depreciation Total capital assets, being depreciated, net Water and Sewer capital assets, net Storm Water: Capital assets, not being depreciated: Construction in progress Capital assets, being depreciated: Improvements other than buildings: Storm water systems Intangibles Machinery and equipment Total capital assets being depreciated Less accumulated depreciation for: Improvements other than buildings: Storm water systems Intangibles Machinery and equipment Total accumulated depreciation Total capital assets, being depreciated, net Storm Water capital assets, net Increases Decreases Ending Balance

$

40,379 468,456 508,835 25,704 3,476,396 13,238 26,140 3,541,478 5,471 975,963 11,167 19,559 1,012,160 2,529,318 3,038,153

$

124,142 124,142 59 68,738 1,904 70,701 634 84,968 777 2,222 88,601 (17,900) 106,242

$

1 57,279 57,280 3,769 785 4,554 48 780 828 3,726 61,006

$

40,378 535,319 575,697 25,763 3,541,365 13,238 27,259 3,607,625 6,105 1,060,883 11,944 21,001 1,099,933 2,507,692 3,083,389

265,499

38,035

3,616

299,918

178,825 3,359 33 182,217

5,632 36 5,668

-

184,457 3,359 69 187,885

34,517 3,359 32 37,908 144,309 409,808

3,083 4 3,087 2,581 40,616

3,616

37,600 3,359 36 40,995 146,890 446,808

continued on next page

74

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands)
Beginning Balance Airport: Capital assets, not being depreciated: Land Construction in progress Total capital assets, not being depreciated Capital assets, being depreciated: Buildings Improvements other than buildings: Runways Other Machinery and equipment Total capital assets being depreciated Less accumulated depreciation for: Buildings Improvements other than buildings: Runways Other Machinery and equipment Total accumulated depreciation Total capital assets, being depreciated, net Airport capital assets, net Public Transit: Capital assets, not being depreciated: Land Construction in progress Total capital assets, not being depreciated Capital assets, being depreciated: Buildings Improvements other than buildings: Transit corridors Other Intangibles Machinery and equipment Total capital assets being depreciated Less accumulated depreciation for: Buildings Improvements other than buildings: Transit corridors Other Intangibles Machinery and equipment Total accumulated depreciation Total capital assets, being depreciated, net Public Transit capital assets, net Business-type capital assets, net Increases Decreases Ending Balance

$

291,994 80,607 372,601 618,045 356,693 80,318 33,234 1,088,290 353,461 100,698 27,313 14,664 496,136 592,154 964,755

$

5,510 78,503 84,013 8,622 35,415 5,329 1,812 51,178 21,040 10,963 3,302 2,630 37,935 13,243 97,256

$

54,879 54,879 261 261 177 177 84 54,963

$

297,504 104,231 401,735 626,667 392,108 85,647 34,785 1,139,207 374,501 111,661 30,615 17,117 533,894 605,313 1,007,048

49,964 171,545 221,509 85,242 335,994 24,090 5,885 184,437 635,648 28,200 65,019 12,177 4,147 84,231 193,774 441,874 663,383 $ 5,076,099

823 46,292 47,115 598 46 4,653 1,066 24,407 30,770 3,894 18,859 2,502 669 14,456 40,380 (9,610) 37,505 $ 281,619

31,593 31,593 3,455 3,455 3,213 3,213 242 31,835 $ 151,420

50,787 186,244 237,031 85,840 336,040 28,743 6,951 205,389 662,963 32,094 83,878 14,679 4,816 95,474 230,941 432,022 669,053 $ 5,206,298

75

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands) g. Interfund Receivables, Payables and Transfers The following is a summary of interfund receivables and payables at June 30, 2012, by fund:
Interfund Due to/from other funds: General Nonmajor governmental Employee Health and Life Total Receivables $ 3,585 503 4,088 $ Interfund Payables 503 3,585 4,088

$

$

The balances are for reimbursable expenditures and will be paid within 30 days. Due to/from primary government and component unit for reimbursable expenditures:
Receivable Entity Primary Government: Debt Service Capital Projects Nonmajor governmental Enterprise - Airport Component Unit - Authority Total $ 7,109 $ 298 1,223 8,630 $ Payable Entity 200 781 242 7,407 8,630

$

Interfund transfers:
Transfers In: Capital Nonmajor Enterprise Projects Governmental Public Transit $ 16,830 42 1,259 3 $ 18,134 $ $ 6,454 243 8,025 1,988 16,710 $ $ 2 18,400 18,402

Transfer out:

General

Debt Service $ 17,881 52,113 $ 69,994

Total $ 41,165 3,712 26,871 57,855 3 $ 129,606

General $ Debt Service 3,425 Capital Projects 446 Nonmajor governmental 2,495 Enterprise Public Transit Total $ 6,366

The transfers consist primarily of the following: (a) $69,994 to Debt Service from General and nonmajor governmental to cover debt service costs, (b) $18,400 to Enterprise - Public Transit from Capital Projects pursuant to an interlocal agreement for regional mass transit, (c) $14,722 to nonmajor governmental from General, Debt Service and Capital Projects. 76

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands)

h. Payables Payables at June 30, 2012 were as follows:
Vendors Governmental General Debt Service Capital Projects Nonmajor governmental Total Governmental Proprietary Water and Sewer Storm Water Airport Public Transit Internal Service Total Business-type Total $ $ 37,242 $ 2,551 13,361 10,846 64,000 9,560 5,756 22,531 11,853 45,089 94,789 158,789 $ Salaries 5,147 $ 13 5,160 1,134 167 515 578 48 2,442 7,602 $ Other 632 $ 632 685 3,782 4,467 5,099 $ Total 43,021 2,551 13,361 10,859 69,792 11,379 5,923 23,046 16,213 45,137 101,698 171,490

77

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands) i. Deferred Revenues

Governmental funds report deferred revenue in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. Governmental funds also defer revenue recognition in connection with resources received but not yet earned. At the end of the current fiscal year, the components of deferred revenue and unearned revenue reported in the governmental funds were as follows:
Unavailable Property taxes receivable: General Debt Service Capital Projects Nonmajor governmental Notes receivable: General Capital Projects Nonmajor governmental Accounts receivable: General Capital Projects Nonmajor governmental Due from component unit: Debt Service Capital Projects Grant advances: Capital Projects Nonmajor governmental $ 7,156 142 901 191 46 44,862 52,473 3,363 5,127 12 5,460 298 12 2,185 $ 122,228 $ Unearned $ 961 12 2,185 3,158

78

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands) j. Long-term Liabilities

A summary of changes in long-term liabilities for governmental activities for the year ended June 30, 2012 follows:
Beginning Balance Governmental Activities General obligation bonds Less unamortized deferred on refundings Plus unamortized premiums Total bonds payable Special obligation bonds Installment purchases Less unamortized deferred on refundings Plus unamortized premiums Less unamortized discounts Total installment purchases Commercial paper notes payable Derivative instrument liability Swaption borrowing payable Compensated absences Section 108 loan guarantee Private loan Due to participants Law enforcement officers' separation allowance Unfunded OPEB liability Total governmental activities $ 456,009 (5,955) 29,324 479,378 10,970 722,809 (3,510) 22,185 (882) 740,602 109,248 28,322 7,587 40,715 11,575 38,830 1,842 13,321 7,844 $ 1,490,234 $ 175,495 32,706 208,201 35,145 (31) 3,319 38,433 64,846 39,697 344 33,535 270 4,597 1,929 4,029 $ 395,881 $ 84,357 (504) 2,973 86,826 850 45,712 (356) 2,190 (32) 47,514 150,000 31,383 2,233 3,327 $ 322,133 $ 547,147 (5,451) 59,057 600,753 10,120 712,242 (3,185) 23,314 (850) 731,521 24,094 68,019 7,931 42,867 9,342 39,100 6,439 15,250 8,546 $ 1,563,982 $ 25,124 (505) 3,648 28,267 900 39,019 (301) 2,286 (32) 40,972 25,572 440 $ 96,151 Ending Balance Due Within One Year

Additions

Reductions

For governmental activities, compensated absences, law enforcement officers’ separation allowance, and the unfunded OPEB liability are primarily liquidated by the General Fund. Payments due to participants are made by Internal Service Funds.

79

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands) A summary of changes in long-term liabilities for business-type activities for the year ended June 30, 2012 follows:
Beginning Balance Business-type Activities Water and Sewer: General obligation bonds Less unamortized deferred on refundings Plus unamortized premiums Revenue bonds Less unamortized deferred on refundings Plus unamortized premiums Total bonds payable Installment purchases Plus unamortized premiums Total installment purchases Other financing agreements Municipal systems Derivative instrument liablity Refundable construction deposits Compensated absences Arbitrage Total Water and Sewer Storm Water: General obligation bonds Less unamortized deferred on refundings Plus unamortized premiums Revenue bonds Less unamortized deferred on refundings Plus unamortized premiums Total bonds payable Federal revolving loan Compensated absences Total Storm Water (1,459) 2,394 129,517 506 130,023 148 423 571 (108) 101 4,418 15 392 4,825 (1,351) 2,293 125,099 133 537 125,769 (108) 101 4,613 7 290 4,910 (547) 750 116,965 (49) 65 3,550 (498) 685 113,415 (48) 64 3,690 11,414 859 10,555 914 6,275 57,426 6,501 3,209 662 1,866,970 44,200 24 3,027 153,246 835 1,041 2,775 662 183,466 5,440 101,626 5,484 3,461 1,836,750 830 695 1,977 73,394 (9,776) 44,920 1,781,728 10,646 523 11,169 (1,149) 12,239 104,480 1,365 150 1,515 (1,023) 2,522 173,028 4,898 227 5,125 (9,902) 54,637 1,713,180 7,113 446 7,559 (1,068) 2,992 66,946 2,746 200 2,946 (12,287) 18,686 1,485,035 93,390 (1,594) 1,791 147,045 (10,693) 16,895 1,431,380 (1,291) 1,791 39,560 $ 255,150 $ $ 24,287 $ 230,863 $ 24,962 Additions Reductions Ending Balance Due Within One Year

continued on next page

80

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands)

Beginning Balance Airport: Revenue bonds Less unamortized deferred on refundings Plus unamortized premiums Total bonds payable Compensated absences Total Airport Public Transit: General obligation bonds Installment purchases Less unamortized deferred on refundings Plus unamortized premiums Total installment purchases Compensated absences Total Public Transit Total business-type activities (250) 3,060 165,580 2,800 168,382 $ 2,870,273 1,573 1,573 $ 361,877 (29) 134 6,225 1,396 7,623 $ 236,236 2 162,770 2 6,120 (2,414) 8,510 703,466 1,432 704,898 3,822 205,387 1,100 206,487 (269) 731 39,302 1,020 40,322 $ 697,370 $ 201,565 $ 38,840 $ Additions Reductions

Ending Balance 860,095 (2,145) 11,601 869,551 1,512 871,063 156,650 (221) 2,926 159,355 2,977 162,332 $ 2,995,914

Due Within One Year $ 20,145 (269) 794 20,670 770 21,440 6,350 (29) 134 6,455 911 7,366 $ 107,110

The government-wide statement of net assets includes $20,670 of long-term liabilities due within one year for business-type activities in the liabilities payable from restricted assets. The remaining amount of $86,440 is displayed as noncurrent liabilities, due within one year on that same statement. (1) General Obligation Bonds The City issues general obligation bonds to finance acquisition or construction of major capital facilities and the purchase of other major capital items. Bonded indebtedness has also been issued to advance refund several general obligation bonds. Interest rates on fixed rate general obligation bonds outstanding range from 2.00 to 5.25 percent with final maturity in the year 2033.

81

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands) Debt service requirements to maturity for general obligation bonds are as follows:
Governmental Activities Year Ended June 30 Principal 2013 $ 25,124 2014 30,533 2015 31,187 2016 30,763 2017 32,300 2018-2022 164,627 2023-2027 158,083 2028-2032 68,125 2033 6,405 $ 547,147

Interest $ 23,692 24,747 23,349 21,781 20,312 77,920 37,940 7,686 160 $ 237,587

Business-type Activities Year Ended Water and Sewer June 30 Principal Interest 2013 $ 24,962 $ 10,733 2014 26,087 9,508 2015 26,453 8,231 2016 27,513 6,913 2017 28,072 5,578 2018-2022 89,330 10,715 2023-2024 8,446 353 $ 230,863 $ 52,031

Storm Water Principal Interest $ 914 $ 508 960 463 1,000 415 969 364 1,013 316 4,738 847 961 40 $ 10,555 $ 2,953

82

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands)

(2) Special Obligation Bonds In November 2004, the City issued taxable variable rate special obligation bonds to acquire property for purposes of revitalizing the uptown area. Interest on the variable-rate bonds is determined by a remarketing agent based upon market conditions. These bonds are solely secured by and payable from a portion of the sales and use tax distributed revenues and are non-general obligation financings. These revenues are not pledged by the City, directly or indirectly, as collateral, and no lien or claim can be made against such revenues. In accordance with State statutes, no deficiency judgment may be rendered against the City for amounts owed and the taxing power of the City may not be pledged directly or indirectly to collateralize amounts due pursuant to these bonds. Debt service requirements to maturity for special obligation bonds are as follows:
Governmental Activities Year Ended June 30 Principal 2013 $ 900 2014 950 2015 1,000 2016 1,055 2017 1,115 2018-2021 5,100 $ 10,120

Interest $ 21 20 17 15 13 28 $ 114

83

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands) (3) Revenue Bonds The following table summarizes the City’s revenue bonds for Business-type activities:
Purpose Water and Sewer, Series 2002A Water and Sewer, Series 2002B Water and Sewer, Series 2002C Water and Sewer, Refunding Series 2005A Water and Sewer, Refunding Series 2005B Water and Sewer, Series 2006A Water and Sewer, Series 2006B Water and Sewer, Series 2008 Water and Sewer, Refunding Series 2009 Water and Sewer, Series 2009B Water and Sewer, Refunding Series 2011 Total Water and Sewer Storm Water, Refunding Series 2002 Storm Water, Series 2004 Storm Water, Series 2006 Total Storm Water Airport, Series 2004A Airport, Series 2004B Airport, Refunding Series 2007A Airport, Series 2007B Airport, Refunding Series 2008D Airport, Refunding Series 2009B Airport, Series 2010A Airport, Refunding Series 2010B Airport, Series 2010C Airport, Series 2011A Airport, Series 2011B Airport, Series 2011C Airport Special Facility, Refunding Series 1998 Airport Special Facility, Series 2000 Airport Special Facility, Series 2011 CONRAC Total Airport Total business-type activities 4.75% - 5.25% 4.75% - 5.25% 4.00% - 5.00% Variable Variable 2.50% - 5.00% 2.00% - 5.50% 1.25% - 5.50% Variable 2.00% - 5.00% 2.00% - 5.00% Variable 5.60% 7.75% 2.48% - 6.06% 09/15/2004 09/15/2004 08/16/2007 08/16/2007 11/05/2008 02/17/2009 02/10/2010 02/10/2010 02/10/2010 11/09/2011 11/09/2011 11/09/2011 03/01/1998 08/15/2000 11/09/2011 2035 2024 2038 2038 2035 2017 2040 2029 2040 2042 2042 2042 2028 2028 2042 87,095 48,465 99,995 47,570 40,585 51,180 130,100 67,770 31,145 76,100 34,250 30,920 86,000 34,700 60,295 3.00% - 5.25% 3.00% - 5.00% 4.00% - 5.00% 01/15/2002 10/27/2004 10/25/2006 2025 2034 2036 29,840 54,265 43,675 Interest Rates 3.50% - 5.50% Variable Variable 3.00% - 5.00% 5.00% 4.00% - 5.00% Variable 3.50% - 5.00% 3.00% - 5.25% 3.50% - 5.00% 1.50% - 5.00% Date Issued 02/15/2002 03/13/2002 08/08/2002 03/03/2005 03/03/2005 07/26/2006 07/26/2006 09/10/2008 08/25/2009 12/09/2009 08/03/2011 Final Maturity 2016 2028 2025 2022 2015 2037 2037 2039 2036 2040 2025 Original Issue $ 61,035 114,430 108,390 33,115 35,675 100,290 300,000 342,715 93,765 366,380 93,390 Balance June 30, 2012 $ 25,900 114,430 101,890 23,685 20,970 91,360 174,755 329,995 91,945 366,380 90,070 1,431,380 25,775 47,400 40,240 113,415 87,095 45,485 93,070 27,380 39,565 37,865 127,860 62,335 22,965 76,100 34,250 30,920 86,000 28,910 60,295 860,095 $2,404,890

Interest on the variable-rate bonds is determined by a remarketing agent based upon market conditions. The City entered into interest rate swap agreements for the variable rate Water and Sewer Revenue Bonds Series 2002B, 2002C, and 2006B. See note 4.j.7 for additional information concerning derivative instruments. The principal and interest on the Airport Revenue bonds are payable from net revenues of the Airport. Pursuant to the Revenue Bond Order, the City has covenanted to charge rates which produce revenues sufficient to cover principal and interest payments. 84

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands) The Airport Special Facility Revenue Bonds are payable solely from and secured solely by a pledge of debt service rentals pursuant to a Special Facility Lease (Lease) agreement with US Airways Group, Inc. The principal and interest on the Water and Sewer and Storm Water Revenue Bonds are payable from net revenues of the water and sewer and storm water systems, respectively. Pursuant to the general trust indentures, the City has covenanted to charge rates that produce net revenues which (1) including 50 percent of the surplus fund, after providing for a two-month operating reserve, are at least 120 percent of the principal and interest requirements plus 100 percent of non-revenue bond debt service requirements and (2) are at least 110 percent of the principal and interest requirements plus 100 percent of non-revenue bond debt service requirements. Based on the 2012 Water and Sewer Fund budgets, revenue bond debt service coverage was at least 128 percent. Based on the 2012 Storm Water Fund budgets, revenue bond debt service coverage was at least 423 percent. The Revenue and Special Facility Revenue Bonds do not constitute a legal or equitable pledge, charge, lien or encumbrance upon any of the City’s property or upon any of its income, receipts or revenues, except as provided in the Revenue Bond Orders or Lease. Neither the credit nor the taxing power of the City is pledged for the payment of the principal or interest, and no owner has the right to compel the exercise of the taxing power of the City or the forfeiture of any of its property in connection with any default under the Revenue Bond Orders or Lease. The Revenue Bond Orders provide for the establishment of reserves for working capital and debt service. The reserves in the Airport Enterprise Fund at June 30, 2012 are $21,606 for working capital and $52,106 for debt service. The reserve requirements for the Water and Sewer Revenue Bonds, except for Series 2002A, were satisfied with the purchase of surety bonds or insurance policies. For the Water and Sewer Series 2002A and the Storm Water Revenue bonds, the reserve for debt service in the Water and Sewer and Storm Water Enterprise Funds is $3,143 and $1,691, respectively, at June 30, 2012.

85

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands) Revenue bond debt service requirements to maturity are as follows:
Business-type Activities Year Ended Water and Sewer June 30 Principal Interest 2013 $ 39,560 $ 50,131 2014 43,770 48,483 2015 45,185 46,662 2016 47,290 44,758 2017 50,200 43,273 2018-2022 284,450 193,944 2023-2027 287,605 150,747 2028-2032 237,860 107,538 2033-2037 286,575 55,450 2038-2042 108,885 6,981 $ 1,431,380 $ 747,967

Storm Water Principal Interest $ 3,690 $ 5,463 3,845 5,310 4,025 5,128 4,220 4,933 4,435 4,718 25,550 20,206 26,635 13,618 24,225 7,752 16,790 1,736 $ 113,415 $ 68,864

Airport Principal Interest $ 20,145 $ 38,463 21,910 36,687 23,745 35,864 24,745 34,912 25,825 33,910 100,435 157,098 138,375 132,826 268,465 72,151 144,600 35,551 91,850 8,882 $ 860,095 $ 586,344

86

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands) (4) Installment Purchases The following table summarizes the City’s installment purchases:
Purpose Governmental activities: Convention Center, Refunding Series 2003A Convention Center, Refunding Series 2003B Convention Center, Refunding Series 2005C Convention Center, Series 2009B Tourism, Series 2003F Tourism, Series 2003 Tourism, Series 2003G Hall of Fame, Series 2009C Hall of Fame, Series 2009D Cultural Facilities, Series 2009E Public Safety, Refunding Series 2001 Public Safety, Refunding Series 2003E Public Safety, Series 2005A Public Safety, Refunding Series 2005D Public Safety, Series 2009A Public Safety, Series 2010A Public Safety, Series 2012A Public Safety, Refunding Series 2012A Public Safety Equipment, Series 2009A Equipment, Series 2009A Equipment, Series 2010A Equipment, Series 2012A Total governmental activities Business-type activities: Water and Sewer: Equipment, Series 2009A Equipment, Series 2010A Equipment, Series 2012A Total Water and Sewer Public Transit: Equipment and Facilities, Series 2004A Equipment and Facilities, Series 2004B Equipment and Facilities, Series 2005E Equipment and Facilities, Series 2008A Total Public Transit Total business-type activities Interest Rates 5.00% - 5.50% Variable 3.00% - 5.00% 2.00% - 5.00% Variable 2.00% 4.00% - 5.38% 5.00% Variable 3.00% - 5.00% 3.50% - 4.50% 2.00% - 4.00% Variable 3.00% - 5.00% 3.00% - 5.00% 3.63% - 5.00% 1.25% - 5.00% 1.25% - 5.00% 3.00% - 5.00% 3.00% - 5.00% 4.00% - 5.00% 3.00% - 5.00% Date Issued 09/01/2003 09/10/2003 05/04/2005 06/25/2009 05/29/2003 07/25/2003 08/28/2003 06/25/2009 07/30/2009 09/30/2009 10/15/2001 05/15/2003 04/06/2005 05/04/2005 06/25/2009 05/27/2010 01/04/2012 01/04/2012 06/25/2009 06/25/2009 05/27/2010 01/04/2012 Final Maturity 2020 2022 2026 2034 2034 2015 2033 2039 2035 2039 2016 2013 2025 2025 2029 2024 2032 2021 2019 2014 2016 2017 Original Issue $102,245 24,335 33,665 30,620 41,000 16,800 136,850 37,295 100,000 139,135 7,680 8,810 15,725 16,805 28,470 13,685 23,195 1,990 13,205 27,002 20,174 9,960 Balance June 30, 2012 $ 77,370 19,490 19,160 29,035 19,785 3,540 132,635 37,295 95,850 136,565 3,065 1,000 11,395 14,930 25,680 12,630 23,195 1,990 9,885 11,648 16,139 9,960

$712,242

3.00% - 5.00% 4.00% - 5.00% 3.00% - 5.00%

06/25/2009 05/27/2010 01/04/2012

2014 2016 2017

10,078 1,751 1,365

$

4,347 1,401 1,365 7,113

2.00% - 5.00% Variable 3.00% - 5.00% 3.50% - 5.00%

12/01/2003 01/08/2004 08/31/2005 06/04/2008

2033 2014 2035 2035

58,440 28,595 74,400 34,965

53,580 6,440 64,595 32,035 156,650 $163,763

Interest on the variable-rate installment purchases is determined by a remarketing agent based upon market conditions.

87

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands) These installment purchase contracts are non-general obligation financings. In accordance with State statutes, no deficiency judgment may be rendered against the City for amounts owed and the taxing power of the City may not be pledged directly or indirectly to collateralize amounts due pursuant to these contracts. The City enters into installment purchase contracts annually for the purchase of capital equipment. These financings are payable over five years. Installment purchases debt service requirements to maturity are as follows:
Governmental Activities Year Ended June 30 Principal 2013 $ 39,019 2014 39,342 2015 34,562 2016 34,587 2017 31,002 2018-2022 163,400 2023-2027 125,895 2028-2032 110,105 2033-2037 99,915 2038-2039 34,415 $ 712,242

Interest $ 27,500 25,887 24,110 22,603 21,163 86,224 59,333 35,788 18,866 2,558 $ 324,032

Business-type Activities Year Ended Water and Sewer June 30 Principal Interest 2013 $ 2,746 $ 331 2014 2,848 203 2015 623 61 2016 623 29 2017 273 7 2018-2022 2023-2027 2028-2032 2033-2035 $ 7,113 $ 631

Public Transit Principal Interest $ 6,350 $ 7,217 6,570 7,089 4,415 6,951 4,600 6,766 4,805 6,560 27,590 29,241 34,740 22,079 44,225 12,601 23,355 2,119 $ 156,650 $ 100,623

(5) Commercial Paper The City has available a general obligation commercial paper bond program to finance street improvements, neighborhood improvements, public improvements and housing projects. The City has authorized the issuance of bonds up to the amount of $150,000 outstanding at any time. The bonds are general obligations of the City, and the City has pledged its faith and credit to the payment 88

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands) of principal of and interest on the bonds. In addition, the City has entered into a Standby Bond

Purchase Agreement which will expire in April 2015. The bonds will mature no later than 270 days after the date of issuance or October 1, 2034. The bonds will be replaced by general obligation bonds. The City had general obligation commercial paper bonds payable of $24,094 outstanding at June 30, 2012. Interest rates are based upon market conditions. Commercial paper debt service requirements to maturity are as follows:
Governmental Activities Year Ended June 30 Principal 2013 $ 2014 2015 24,094 $ 24,094

Interest $ 48 48 39 $ 135

(6) Other Long-term Liabilities (a) Section 108 Loan Guarantee This is the loan guarantee provision of the Community Development Block Grant (CDGB) program that provides communities with a source of financing for economic development, housing rehabilitation, public facilities, and large-scale physical development projects. Local governments borrowing funds guaranteed by Section 108 loans must pledge their current and future CDBG allocations to cover the loan amount as security for the loan. Debt service requirements to maturity are as follows:
Governmental Activities Year Ended June 30 Principal 2013 $ 440 2014 458 2015 501 2016 405 2017 426 2018-2022 2,469 2023-2027 3,151 2028-2029 1,492 $ 9,342

Interest $ 320 312 300 289 279 1,180 658 65 $ 3,403

89

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands) (b) Private Loan The City has entered into a private loan agreement for up to $41.5 million dollars to finance preopening expenses for the NASCAR Hall of Fame project, construction of additional parking and construction of the facility. The interest rate is 4.00 percent and will be due in June 2014. As of June 30, 2012, $39,100 had been advanced under this agreement. Debt service requirements to maturity are as follows:
Governmental Activities Year Ended June 30 Principal 2013 $ 2014 39,100 $ 39,100

Interest $ 1,564 1,564 $ 3,128

(c) Municipal Systems Pursuant to agreements, the City is leasing water and sewer facilities owned by municipalities within Mecklenburg County. These lease agreements continue until the outstanding bonds on these facilities have been retired, at which time title to the facilities will be conveyed to the City. Debt service requirements to maturity are as follows:
Business-type Activities Year Ended June 30 Principal 2013 $ 830 2014 835 2015 825 2016 820 2017 810 2018-2020 1,320 $ 5,440

Interest $ 246 210 175 139 103 115 $ 988

Certain developers have contracted with the City for construction of water and sewer lines. Under terms of these contracts, the developers are required to deposit with the City an amount equal to the estimated cost of constructing the lines. The lines become the property of the City upon completion and acceptance. Refunds of deposits may be either wholly or partially refundable depending upon terms of the contracts. They will be paid over periods of five to twenty years. There are no stated interest requirements for these deposits.

90

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands) (d) Federal Revolving Loan Pursuant to the North Carolina Clean Water Revolving Loan & Grant Act of 1987 and the Federal Clean Water Act Amendments of 1987 and American Recovery and Reinvestment Act of 2009, the City utilized loan proceeds to construct wastewater treatment works projects. The loans to be repaid are one-half of the total project costs reimbursed. Principal is forgiven for one-half of the total project costs reimbursed. Debt service requirements to maturity are as follows:
Business-type Activities Year Ended June 30 Principal 2013 $ 7 2014 8 2015 7 2016 8 2017 7 2018-2022 37 2023-2027 37 2028-2030 22 $ 133

In accordance with Section 148 of the Internal Revenue Code of 1986, as amended, and Sections 1.103-13 to 1.103-15 of the related Treasury Regulations, the City must rebate to the federal government “arbitrage profits” earned on governmental bonds issued after August 31, 1986. Arbitrage profits are the excess of the amount earned on investments over the interest paid on the borrowings. At June 30, 2012, the City had no liability for estimated arbitrage profits payable.

91

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands) (7) Derivative Instruments The fair value balances and notional amounts of derivative instruments outstanding at June 30, 2012 classified by type, and the changes in fair value of such derivative instruments for the year then ended are as follows:

Changes in Fair Value Classification Governmental activities Cash flow hedges: Pay-fixed interest rate sw ap Pay-fixed interest rate sw aption Deferred outflow $ (18,859) Amount

Fair Value at June 30 Classification Amount Notional

Debt Debt

$ (31,793) $

95,850

Investment revenue $ (20,838)

$ (36,226) $ 128,245

Business-type activities Cash flow hedges: Pay-fixed interest rate sw ap Deferred outflow $ (44,200) Debt $ (101,626) $ 391,075

The following table displays the objective and terms of the City’s hedging derivative instruments outstanding at June 30, along with the credit rating of the associated counterparty:
Notional Type Pay-fixed interest rate sw ap Objective Hedge of changes in cash flow s on the 2002B Water and Sew er Revenue Bonds Hedge of changes in cash flow s on the 2002C Water and Sew er Revenue Bonds Hedge of changes in cash flow s on the 2006B Water and Sew er Revenue Bonds Hedge of changes in cash flow s on the 2009D Hall of Fame Certificates of Participation Hedge of changes in cash flow s in the 2003G Tourism Certificates of Participation Amount $ 114,430 Effective Date 3/13/2002 Maturity Date Terms 7/1/2027 Pay 4.03%; receive 67% of LIBOR Counterparty Credit Rating Baa2/A-

Pay-fixed interest rate sw ap

$ 101,890

8/8/2002

6/1/2025 Pay 3.79%; receive lesser of the bond floating rate or 67% of LIBOR not to exceed 12.00% 7/1/2036 Pay 4.04%; receive SIFMA sw ap index

Baa2/A-

Pay-fixed interest rate sw ap

$ 174,755

8/1/2006

Aa3/AA-

Pay-fixed interest rate sw ap

$

95,850

8/18/2009

6/1/2035 Pay 4.725%; receive LIBOR

Aa3/AA-

Pay-fixed interest rate sw aption

$ 128,245

6/1/2013

6/1/2033 Pay 5.10%; receive SIFMA sw ap index

Aa3/AA-

92

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands) Interest rate risk. The City is exposed to interest rate risk on its interest rate swaps. On its payfixed, receive-variable interest rate swaps, as LIBOR, the bond floating rate swap index, or the SIFMA swap index decreases, the City’s net payment on the swaps increases. Basis risk. The City’s hedging derivative instruments expose the City to basis risk since the variable payment received from the counterparty is determined on a basis different from that used to calculate the bond floating rate for the associated bonds. As of June 30 the rate received by the City for the 2002B and 2002C agreements was 67 percent of LIBOR or 0.16 percent, whereas the bond floating rates paid by the City were 0.15 percent for Series 2002B and 0.21 percent for Series 2002C. As of June 30 the rate received by the City for the 2006B agreement was 0.16 percent, whereas the bond floating rate paid by the City was 0.15 percent. As of June 30 the rate received by the City for the 2009D agreement was 0.24 percent, whereas the bond floating rate paid by the City was 0.28 percent. Termination risk. Either the City or its counterparties may terminate the hedging derivative

instruments if the other party fails to perform under the terms of the contract. Termination could result in the City being required to make a termination payment. Rollover risk. The City is exposed to rollover risk on hedging derivative instruments that are hedges of debt that may be terminated prior to the maturity of the hedged debt. If the option to terminate the hedging derivative instrument is exercised, then the City will be re-exposed to the risks being hedged by the hedging derivative instrument.

93

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands) Hedging derivative instrument payments and hedged debt. As of June 30, aggregate debt service requirements of the City’s variable-rate debt and net receipts/payments on associated hedging derivative instruments are as follows. These amounts assume that current interest rates on variablerate bonds and the current reference rates of hedging derivative instruments will remain the same for their term. As these rates vary, interest payments on variable-rate bonds and net receipts/payments on the hedging derivative instruments will vary.
Governmental Activities Year Ended June 30 2013 2014 2015 2016 2017 2018-2022 2023-2027 2028-2032 2033-2035 $ Variable Rate Bonds Principal 2,255 2,380 2,510 2,640 2,795 16,490 21,625 28,335 16,820 $ 95,850 Business-type Activities Year Ended June 30 2013 2014 2015 2016 2017 2018-2022 2023-2027 2028-2032 2033-2037 Total $ Variable Rate Bonds Principal 4,780 4,955 5,145 13,270 21,335 120,255 114,615 49,640 57,080 $ 391,075 $ Interest $ 633 637 629 621 585 2,323 1,212 575 248 7,463 Hedging Derivatives, Net $ 14,818 14,619 14,426 14,226 13,463 54,410 30,342 14,912 6,438 $ 177,654 Total $ 20,231 20,211 20,200 28,117 35,383 176,988 146,169 65,127 63,766 $ 576,192 $ Interest $ 268 262 256 248 241 1,079 820 482 84 3,740 Hedging Derivatives, Net $ 4,268 4,160 4,054 3,943 3,826 17,120 13,024 7,653 1,340 $ 59,388 $ Total 6,791 6,802 6,820 6,831 6,862 34,689 35,469 36,470 18,244 $ 158,978

Commitments. The City’s derivative instruments include provisions that require the City to post collateral in the event its credit rating falls below A3 by Moody’s and A- by S&P. The hedging derivative instruments will be collateralized at fair value with cash and/or U.S. government securities. Collateral will be posted with the City or its agent. At June 30, the aggregate fair value of all hedging derivative instruments with these collateral posting provisions is ($169,645). If the collateral posting requirements were triggered at June 30, the City would not be required to post collateral to its counterparties because they had negative fair values. The City’s credit rating is Aaa/AAA, therefore, no collateral has been posted at June 30.

94

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands) (8) Refundings In August 2011, the City issued $93,390 in fixed rate Water Sewer Revenue Refunding Bonds with interest rates ranging from 1.50 to 5.00 percent. The net proceeds of $104,910 (after payment of $719 in underwriting fees, insurance and other issue costs) were used to refund $114,930 of outstanding fixed rate Water and Sewer System Revenue Bonds, Series 2001. The refunding resulted in a difference between the reacquisition price and the net carrying amount of the old debt of $1,149. This difference, reported in the accompanying financial statements as a deduction from revenue bonds payable, is being charged to operations through the year 2025 using the effectiveinterest method. The City completed the refunding to reduce its total debt service payments over a period of 15 years by $23,160 and to obtain an economic gain (difference between the present values of the old and new debt service payments) of $18,896. In January 2012, the City issued $1,990 in fixed rate installment purchase contracts, series 2012A. The net proceeds of $2,213 (after payment of $22 in underwriting fees, insurance and other issue costs) were used to refund $2,190 of outstanding fixed rate installment purchase contracts, series 2001B. The refunding resulted in a difference between the reacquisition price and the net carrying amount of the old debt of $31. This difference, reported in the accompanying financial statements as a deduction from installment contracts payable, is being charged to operations through the year 2021 using the effective-interest method. The City completed the refunding to reduce its total debt service payments over a period of 10 years by $328 and to obtain an economic gain (difference between the present values of the old and new debt service payments) of $285. In April 2012, the City issued $175,495 fixed rate general obligation refunding bonds. The net proceeds of $207,246 (after payment of $955 in underwriting fees, insurance and other issue costs) were used to refund $30,615 and $25,265 of outstanding general obligation bonds, series 2002A and 2002C, respectively, and to refund $150,000 of outstanding commercial paper certificates of participation. The 2002A and 2002C series net proceeds were used to purchase U.S. government securities. The fixed rate general obligation bonds have interest rates ranging from 1.25 to 5.00 percent with a final maturity in 2033. See note 4.j.5 for additional information on the general obligation commercial paper bond program. (9) Other Debt Information In prior years, the City defeased various general obligation bonds, revenue bonds and installment purchases by placing the proceeds of the new debt in an irrevocable trust to provide for all future debt service payments on the old debt. Accordingly, the trust account assets and the liability for the defeased debt are not included in the City’s financial statements. At June 30, 2012, $12,285 of general government debt outstanding is considered defeased. As of June 30, 2012, the City has authorized but unissued bonds of $428,186 consisting of $334,138 for street improvements, $34,373 for housing and $59,675 for neighborhood improvements. 95

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands)

Pursuant to the North Carolina General Statutes, the City’s outstanding general obligation debt is subject to a legal limitation based on 8 percent of the total assessed value of real and personal property. As of June 30, 2012, the City’s legal debt limit was $7,229,929. The outstanding debt subject to this limit was $2,081,308, leaving a net legal debt margin of $5,148,621. (10)Early Extinguishment On October 3, 2011, the City early extinguished $9,405 of variable rate Airport Revenue Bonds, Series 2007B. On October 3, 2011, the City early extinguished $7,395 of variable rate Airport Revenue Bonds, Series 2010C. On December 1, 2011, the City early extinguished $3,695 of variable rate Airport Revenue Bonds, Series 2007B. (11)Subsequent Events On August 1, 2012, the City early extinguished $1,745 of variable rate Airport Revenue Bonds, Series 2007B. k. Fund Balance

The following schedule provides information on the portion of General fund balance that is available for appropriation:

Total fund balance - General Fund Less: Inventories Restricted by State statute Committed for Capital projects Commited for Component unit Assigned for Capital projects Assigned for Community planning and development Fund balance policy Remaining fund balance

$

159,150 1,004 61,679 5,674 1,100 395 875 88,423

$

-

96

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands)

5. PENSION PLANS AND OTHER BENEFITS Primary Government: The City participates in the North Carolina Local Governmental Employees’ Retirement System (LGERS), administered by the State of North Carolina; the Charlotte Firefighters’ Retirement System, administered through a board of trustees; and the Law Enforcement Officers’ Separation Allowance (LEO Separation). The City also participates in a Supplemental Retirement Income Plan for Law Enforcement Officers. Component Unit: The Authority participates in the North Carolina LGERS which is described in Note 5.a. The Authority’s contribution to the LGERS for the year ended June 30, 2012 was $804, which was 6.88 percent of annual covered payroll. a. LGERS Description: The City of Charlotte contributes to the statewide LGERS, a cost-sharing multipleemployer defined benefit pension plan. All employees of the City, except members of the Charlotte Firefighters’ Retirement System, participate in LGERS which provides retirement and disability benefits to plan members and beneficiaries. Article 3 of G.S. Chapter 128 assigns the authority to establish and amend benefit provisions to the North Carolina General Assembly. The Local Governmental Employees Retirement System is included in the Comprehensive Annual Financial Report (CAFR) for the State of North Carolina. The State’s CAFR includes financial statements and required supplementary information for LGERS. That report may be obtained by writing to the North Carolina Office of the State Controller, Accounting and Financial Reporting Section, 1410 Mail Service Center, Raleigh, North Carolina 27699-1410. Funding Policy: Plan members are required to contribute 6.0 percent of their annual covered salary. The City is required to contribute at an actuarially determined rate. For the City, the current rate for employees not engaged in law enforcement and for law enforcement officers is 6.88 percent and 7.05 percent, respectively, of annual covered payroll. The contribution requirements of members and of the City are established and may be amended by the North Carolina General Assembly. The City’s contributions to LGERS for the years ended June 30, 2012, 2011, and 2010, were $21.4 million, $18.8 million, and $14.0 million, respectively. The contributions made by the City equaled the required contributions for each year. b. Charlotte Firefighters’ Retirement System Description: The Charlotte Firefighters’ Retirement System (System), a single-employer defined benefit plan, provides retirement, disability and death benefits to civil service employees of the Charlotte Fire Department. The System issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained by

97

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands) writing to Charlotte Firefighters’ Retirement System, 428 East Fourth Street, Suite 205, Charlotte, North Carolina 28202. Basis of Accounting: The financial statements of the System are presented on the accrual basis of accounting. Plan member and City 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. Interest and dividend income are reported as earned. The net appreciation (depreciation) in the fair value of investments includes realized gains and losses on investments that were both bought and sold during the year. Method Used to Value Investments: The investments of the System are reported at fair value. Short-term investments are reported at cost, which approximates fair value. Securities traded on a national or international exchange are valued at the last reported sales price at current exchange rates. Mortgages are valued on the basis of future principal and interest payments and are discounted at prevailing interest rates for similar instruments. investments is based on independent appraisals. market are reported at estimated fair values. The fair value of real estate Investments that do not have an established

Contributions: Pursuant to the North Carolina Act (Act) which established the System, the City is required to match the member’s contribution. The Act establishes the contribution rate pursuant to the Board of Trustees’ recommendation and approval by the City Council. The current rate is 12.65 percent. The Act was established and may be amended by the North Carolina General Assembly. Annual Pension Cost and Net Pension Obligation: The City’s annual pension cost and net pension obligation to the System for the current year were as follows:
Annual required contribution Interest on net pension obligation Adjustment to annual required contribution Annual pension cost Contributions made Increase in net pension obligation Net pension obligation, beginning of year Net pension obligation, end of year $ $ 8,409 (512) 399 8,296 (7,720) 576 (6,609) (6,033)

98

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands)

Trend Information Year Ended June 30 2010 2011 2012 Annual Pension Cost (APC) $ 8,205 7,988 8,296 Percentage of APC Contributed 90.68% 96.02 93.06 Net Pension Obligation $ (6,927) (6,609) (6,033)

Schedule of Funding Progress Actuarial Accrued Liability (AAL)Entry Age (b) $ 395,393 408,999 431,942 UAAL as a Percentage of Covered Payroll [(b-a)/c] 63.88% 72.52 105.89

Actuarial Valuation Date 7/1/2010 7/1/2011 7/1/2012

Actuarial Value of Assets (a) $ 357,652 366,147 367,183

Unfunded AAL (UAAL) (b-a) $ 37,741 42,852 64,759

Funded Ratio (a/b) 90.45% 89.52 85.01

Covered Payroll (c) $ 59,080 59,086 61,158

The information presented in the schedule of funding progress was determined as part of the actuarial valuation. Additional information follows: Actuarial valuation date Actuarial cost method Amortization method Remaining amortization period Asset valuation method Actuarial assumptions: Investment rate of return Projected salary increases Includes inflation at Cost of living adjustments 7/01/12 Entry age Level Percent of Pay, Open 30 years 5-year smoothed market value 7.75% 4.25 to 11.25% 3.25% None

99

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands) Concentrations: The System had individual fixed income or equity investments at June 30, 2012 managed by the following organizations that represented five percent or more of the System’s net assets:

State Street Global Advisors Morgan Stanley Barrow, Hanley, Mewhinney & Strauss Winslow Capital Management Aronson + Johnson + Oritz Robeco Boston Partners DE Shaw Investment Management Cadence Capital Management Investment Counselors of Maryland Eagle Asset Management

16% 12 12 10 10 6 6 6 6 5

c.

LEO Separation The City of Charlotte administers a public employee retirement system (LEO

Description:

Separation), a single-employer defined benefit pension plan that provides retirement benefits to the City’s qualified sworn law enforcement officers. The LEO Separation is equal to .85 percent of the annual equivalent of the base rate of compensation most recently applicable to the officer for each year of creditable service. The retirement benefits are not subject to any increases in salary or retirement allowances that may be authorized by the General Assembly. Article 12D of G.S. Chapter 143 assigns the authority to establish and amend benefit provisions to the North Carolina General Assembly. A stand-alone financial report is not issued for the LEO Separation. All full-time law enforcement officers of the City are covered by the LEO Separation. At December 31, 2011, the LEO Separation’s membership consisted of: Retirees receiving benefits Active plan members Total 193 1,819 2,012

Basis of Accounting: The City has chosen to fund the LEO Separation on a pay-as-you-go basis. Pension expenditures are made from the General Fund, which is maintained on the modified accrual basis of accounting. Method Used to Value Investments: No funds are set aside to pay benefits and administration costs. These expenditures are paid as they become due. 100

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands) Contributions: The City is required by Article 12D of G.S. Chapter 143 to provide these retirement benefits and has chosen to fund the benefit payments on a pay-as-you-go basis through appropriations made in the General Fund operating budget. The City’s obligation to contribute to this plan is established and may be amended by the North Carolina General Assembly. There were no contributions made by employees. Annual Pension Cost and Net Pension Obligation: The City’s annual pension cost and net pension obligation to the LEO Separation for the current year were as follows:
Annual required contribution Interest on net pension obligation Adjustment to annual required contribution Annual pension cost Contributions made Increase in net pension obligation Net pension obligation, beginning of year Net pension obligation, end of year $ $ 5,635 666 (795) 5,506 (3,577) 1,929 13,321 15,250

Trend Information Year Ended June 30 2010 2011 2012 Annual Pension Cost (APC) $ 4,629 5,856 5,506 Percentage Net of APC Pension Contributed Obligation 70.85% $ 10,915 58.91 13,321 64.96 15,250

Schedule of Funding Progress UAAL as a Percentage of Covered Payroll [(b-a)/c] 38.70% 42.40 42.86 55.46 51.19 53.16

Actuarial Valuation Date 12/31/2006 12/31/2007 12/31/2008 12/31/2009 12/31/2010 12/31/2011

Actuarial Value of Assets (a) $ -

Actuarial Accrued Liability (AAL)Project Unit Credit (b) $ 34,026 39,453 42,984 58,656 54,478 58,552

Unfunded AAL (UAAL) (b-a) $ 34,026 39,453 42,984 58,656 54,478 58,552

Funded Ratio (a/b) -

Covered Payroll (c) $ 87,917 93,043 100,289 105,765 106,419 110,146

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CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands)

Schedule of Employer Contributions Annual Required Contribution $ 3,268 3,538 4,079 4,538 5,894 5,635

Year Ended June 30 2007 2008 2009 2010 2011 2012

Percentage Contributed 82.83% 85.30 74.28 72.27 58.53 63.48

The information presented in the previous schedules was determined as part of the actuarial valuation. Additional information follows: Actuarial valuation date Actuarial cost method Amortization method Remaining amortization period Asset valuation method Actuarial assumptions: Investment rate of return Projected salary increases Includes inflation at Cost of living adjustments 12/31/11 Projected unit credit Level percent of pay closed 19 years Market value 5.00% 4.25 to 7.85% 3.00% None

d. Supplemental Retirement Income Plan for Law Enforcement Officers Description: The City contributes to the Supplemental Retirement Income Plan (Plan), a defined contribution pension plan administered by the Department of State Treasurer and a Board of Trustees. The Plan provides retirement benefits to law enforcement officers employed by the City. Article 5 of G.S. Chapter 135 assigns the authority to establish and amend benefit provisions to the North Carolina General Assembly. Funding Policy: Article 12E of G.S. Chapter 143 requires the City to contribute each month an amount equal to 5.0 percent of each officer’s salary, and all amounts contributed are vested immediately. Also, the law enforcement officers may make voluntary contributions to the plan. The City is currently making contributions for 1,788 law enforcement officers. Contributions for the year ended June 30, 2012 were $8,782, which consisted of $5,554 from the City and $3,228 from the law enforcement officers. 102

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands)

e. Death Benefit Plan The City provides death benefits to law enforcement officers through the Death Benefit Plan for members of the Local Governmental Employees’ Retirement System (LGERS), a multiple-employer, State-administered, cost-sharing plan funded on a one-year term cost basis. The beneficiaries of those employees who die in active service after one year of contributing membership in the LGERS, or who die within 180 days after retirement of termination of service and have at least one year of contributing membership service in the System at the time of death are eligible for death benefits. Lump sum death benefit payments to beneficiaries are equal to the employee’s 12 highest months’ salary in a row during the 24 months prior to the employee’s death, but the benefit may not exceed $50 or be less than $25. All death benefit payments are made from the Death Benefit Plan. The City has no liability beyond the payment of monthly contributions. Contributions are determined as a percentage of monthly payroll, based upon rates established annually by the State. Because the benefit payments are made by the Death Benefit Plan and not by the City, the City does not determine the number of eligible participants. For the fiscal year ended June 30, 2012, the City made contributions of $154 to the State for death benefits. The City’s contributions for employees engaged in law enforcement represented .14 percent of covered payroll. f. Other Postemployment Benefits

Description: The City of Charlotte Employee Benefit Trust Plan (EBTP) is a single-employer defined benefit healthcare plan administered by the City of Charlotte. The EBTP provides health and welfare benefit plans for the benefit of eligible retired employees of the City. Section 4.05 of the Charlotte City Code assigns the authority to establish benefit provisions for EBTP to the City Council. A standalone financial report is not issued. Membership of the EBTP consisted of the following at July 1, 2011, the date of the latest actuarial valuation:
Retirees and beneficiaries receiving benefits Active plan members 2,673 5,361 8,034

Funding Policy. The contribution requirements of plan members and the City are established and may be amended by the City Council. The City Council set the employer contribution rate based on the annual required contribution (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC 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 (or fund excess) of the plan over a period not to exceed thirty years.

103

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands) For the current year, the City contributed $15,375 to the plan. Plan members receiving benefits contributed $6,140 through their required contribution. The required contribution rates for plan members were dependent on the years of service and the coverage selected. Monthly rates ranged from $152 to $1,281 per retiree. Summary of Significant Accounting Policies. The City’s financial statements are prepared using the accrual basis of accounting. Plan member contributions are recognized in the period in which the contributions are due. Employer contributions to the plan are recognized when due and the employer has made a formal commitment to provide the contributions. 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 assets, consistent with the long-term perspective of the calculations. Short-term money market debt instruments, and deposits, are reported at cost or amortized cost, which approximates fair value. Certain longer term United States Government and United States Agency securities are valued at the last reported sales price. Administration costs of the plan are financed through contributions and investment earnings. Annual OPEB Cost and Net OPEB Obligation: The City’s annual other postemployment benefit (OPEB) cost (expense) and net OPEB Obligation for the current year were as follows:

Annual required contribution Interest on net OPEB obligation Adjustment to annual required contribution Annual OPEB cost (expense) Contributions made Increase in net OPEB obligation Net OPEB obligation, beginning of year Net OPEB obligation, end of year

$ 15,656 (382) 1,214 16,488 (15,375) 1,113 (20,928) $ (19,815)

Trend Information Year Ended June 30 2010 2011 2012 Annual OPEB Cost $ 15,009 15,042 16,488 Percentage of Annual OPEB Cost Contributed 77.51 93.25 Net OPEB Obligation (20,928) (19,815)

99.72% $ (24,311)

104

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands) Funded Status and Funding Progress: As of July 1, 2012, the most recent actuarial valuation date, the plan was 18 percent funded. The actuarial accrued liability for benefits was $224,184. The actuarial value of assets was $40,742, resulting in an unfunded actuarial accrued liability (UAAL) of $183,442. The covered payroll (annual payroll of active employees covered by the plan) was $294,793 and the ratio of the UAAL to the covered payroll was 62.23 percent. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions 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 below, presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits.
Schedule of Funding Progress UAAL as a Actuarial Accrued Actuarial Valuation Date 01/01/07 07/01/09 07/01/11 Actuarial Value of Assets (a) $ - $ 33,006 40,742 Liability (AAL) Projected Unit Credit (b) 229,764 $ 207,301 224,184 Unfunded AAL (UAAL) (b - a) 229,764 174,295 183,442 Funded Ratio (a / b) Covered Payroll ( c) Percentage of Covered Payroll ([b - a] / c) 83.26% 54.10 62.23

-% $ 275,955 15.92 322,162 18.17 294,793

Schedule of Employer Contributions Annual Year Ended June 30 2008 2009 2010 2011 2012 $ Required Contribution 17,041 14,405 14,405 14,405 15,656 Percentage Contributed 166.49% 195.06 103.90 80.94 98.21

105

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands) Actuarial 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 shortterm volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. Additional information follows: Actuarial valuation date Actuarial cost method Asset valuation method Actuarial assumptions: Investment rate of return Projected salary increases Annual healthcare cost trend rate Includes inflation at Amortization method Remaining amortization period

07/01/11
Projected unit credit Market value 7.75% 4.50% 7.00 to 5.00% (year of ultimate trend rate 2016) 4.50% Level percentage of projected payroll, closed 26 years

g. Deferred Compensation Plan The City offers its employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457. The plan, which is available to all City employees, permits them to defer a portion of their salary until future years. The deferred compensation is not available to employees until termination, retirement, death, or unforeseeable emergency. The plan assets are placed in trust for the exclusive benefit of the participants and their beneficiaries and therefore are not included in the City’s financial statements.

106

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands) 6. OTHER INFORMATION a. Airport Leasing Arrangements with Tenants A major portion of the Airport’s assets are leased under operating agreements with airlines and other tenants. The total cost and accumulated depreciation of the assets at June 30, 2012 follows:
Land Buildings Runways Improvements other than buildings Machinery and equipment Total Less accumulated depreciation Total $ $ 297,504 626,667 392,108 85,647 34,785 1,436,711 533,894 902,817

The following is a schedule of minimum future rental income on noncancelable operating leases subsequent to June 30, 2012:
2013 2014 2015 2016 2017 2018-2022 2023-2027 2028 Total minumum future rental income $ 35,734 35,854 35,975 30,363 7,056 35,283 35,283 119,558 335,106

$

Of the $335,106 minimum future rental income on noncancelable operating leases, $266,154 relates to agreements with US Airways, Inc. See Note 6.h. for additional information related to US Airways, Inc. Contingent rentals that may be received under certain leases based on the tenant’s revenues, fuel flow or usage are not included above. Contingent rentals of approximately $57,121 were received during the year ended June 30, 2012.

107

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands) b. Passenger Facility Charges The Federal Aviation Administration (FAA) authorized the Airport to collect Passenger Facility Charges (PFC) of $3 per qualifying enplaned passenger commencing November 1, 2004. The net receipts from PFC are accounted for on the accrual basis of accounting and are restricted to use on FAA approved projects. The Airport has been authorized to collect PFC in the aggregate amount of $1,039,776. Collections during fiscal year 2012 were $53,094 and aggregate collections from inception through June 30, 2012 were $356,153. c. Insurance

(1) Employee Health and Life The City provides health and life benefits to employees and retirees. Private companies administer these benefits pursuant to administrative services agreements. The City maintains insurance coverage with private carriers for life claims, vision claims, and excess coverage for health claims in excess of $350 per year per person. The City has an Employee Health and Life Insurance Fund (EHLIF), an internal service fund, to account for and finance its health and life insurance program. All City funds participate in the program and make payments to the EHLIF for both an amount per employee and a proportionate share of the administrative cost. The amount per employee is based on actuarial estimates of amounts needed to pay prior and current year claims. The employees and retirees contribute a portion of the cost for health coverage. The City provides life insurance for employees in the amount of two times the employees’ salary up to a maximum of $100. Employees may purchase additional life insurance up to a maximum of four times their salary. Liabilities include amounts for both reported and incurred but not reported claims. The changes in the fund’s liabilities follow:
Claims and Beginning Changes in Claims Of Year Estimates Payments End of Year 2012 $ 8,104 $ 64,196 $ (64,383) $ 7,917 2011 7,499 59,404 (58,799) 8,104

At June 30, 2012, the EHLIF held $20,902 in cash and equivalents for payments of these claims. (2) Risk Management The City is exposed to various risks of loss related to torts; thefts of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters.

108

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands) The City has a Risk Management Fund (RMF), an internal service fund, to account for and finance its insured and uninsured risks of loss. Currently, insurance coverage is purchased for excess property damage for buildings, contents and City buses; excess workers’ compensation; excess vehicle and general liability; police professional liability; police helicopter hull liability and airport liability, City bus liability, railroad protective liability, passenger railway liability for the light rail train operations and property insurance on the light rail vehicles. Insurance coverage includes vehicle and general liability claims in excess of $2,000 but less than $22,000 per occurrence, workers’ compensation claims in excess of $2,000, property damage claims in excess of $100 and flood insurance $100,000 in all flood zones, except $10,000 in flood zone A in excess of federal flood program maximums. The finance officer is bonded for $100. Employees who handle funds or have access to inventories are bonded under a blanket bond for $250. Settled claims have not exceeded insurance coverage in the past three years. The actuarially determined losses for the remaining risks and deductible amounts are funded in the RMF. All funds of the City participate in the risk management program and make payments to the RMF based on historical cost information or actuarial estimates of the amounts needed to pay prior and current year claims and establish a reserve for catastrophic losses. Pursuant to administrative agreements, the City provides risk management services to Mecklenburg County and the Charlotte-Mecklenburg Board of Education. There is no transfer or pooling of risks among entities. Amounts collected or due and amounts paid or to be paid to settle claims for Mecklenburg County and the Charlotte-Mecklenburg Board of Education are reported as a net liability on an accrual basis. At June 30, 2012, $6,439 was held as deposits for these entities. This amount is reflected as a long-term liability, Due to Participants, in the RMF. The claims liability of $37,220 reported in the RMF at June 30, 2012, is based on GASB Statement No. 10, which requires that a liability for claims be reported if information prior to the issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. Claims liabilities are based on the estimated ultimate cost of settling the claims, which includes incremental claim adjustment expenditures/expenses (i.e., outside legal assistance) and estimated recoveries on unsettled claims as required by GASB Statement No. 30. The changes in the fund’s liabilities follow:
Claims and Beginning Changes in Claims Of Year Estimates Payments End of Year 2012 $ 42,041 $ 10,481 $ (15,302) $ 37,220 2011 39,355 19,401 (16,715) 42,041

At June 30, 2012, the RMF held $65,438 in cash and cash equivalents for payments of these claims.

109

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands) d. Commitments and Contingencies Noise litigation suits have been filed against the City in connection with the operation of the Charlotte/Douglas International Airport. In the opinion of the City’s attorney and management, the ultimate outcome of the suits is not expected to have a significant impact upon the financial position or results of operations of the Airport Fund. The City is also party to a number of other civil injustice lawsuits and legal actions. In the opinion of the City’s attorney and management, the ultimate outcome of these legal matters is not expected to have a significant impact upon the City’s financial position. The City is currently evaluating a number of environmental issues including two former landfill sites. Until site assessments and further studies are completed, the cleanup costs can only be estimated. During the current fiscal year a provision for cleanup costs of $592 has been provided within the financial statements. In the opinion of City management, costs ultimately incurred are not expected to have a material effect on the City’s financial position after giving effect to the provision for clean-up costs. The City manages a Brownfield Assessment Grant Program which assists property and business owners and infill developers in overcoming barriers that contamination presents for the redevelopment of underutilized brownfield sites in distressed business districts and neighborhoods. The Program provides fifty percent matching funds, up to $20 per site, to property owners for site assessment, design of remediation activities, and legal expenses for redevelopment sites suspected of contamination. When the City enters into the agreements, it legally obligates itself to participate in the cleanup activities of the remediation effort. The amount of the liability is derived from the grant agreements and assumes no unexpected change orders. The City has received a number of federal and state grants for specific purposes that are subject to review by the grantor agencies. Such reviews could lead to requests for reimbursement to the grantor agencies for expenditures disallowed under terms of the grants. The City management believes that such disallowances, if any, would not be significant.

110

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands) Authorized capital projects at June 30, 2012, are comprised of the following by fund:
Project Authorization GovernmentalCapital Projects EnterpriseWater and Sewer Storm Water Airport Public Transit Total Enterprise Total

Expended

Unexpended 558,178 798,208 117,808 299,943 92,830 1,308,789

$ 1,853,438 $ 1,295,260 $ 2,374,614 420,073 1,087,437 908,537 4,790,661 1,576,406 302,265 787,494 815,707 3,481,872

$ 6,644,099 $ 4,777,132 $ 1,866,967

Financial resources are available to fund the total amount of unexpended authorizations. Outstanding encumbrances are amounts needed to pay any commitments related to purchase orders and contracts that remain unperformed at year-end. For governmental funds, encumbrances are included within the restricted, committed, or assigned fund balances, as appropriate and are established in the funds as follows:
General Capital Projects Nonmajor governmental Total $ $ 17,039 118,131 41,298 176,468

The City has construction and other contractual commitments at June 30, 2012, as follows by fund:
GovernmentalCapital Projects Nonmajor governmental Total Governmental EnterpriseWater and Sewer Storm Water Airport Public Transit Total Enterprise Total $

$

6,349 4,729 11,078 139,481 46,464 183,852 29,311 399,108 410,186

111

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands) The City has operating lease commitments for land and office space with future rentals under these leases at June 30, 2012, as shown below:
Year 2013 2014 2015 2016 2017 2018-2030 Amount $ 2,668 1,830 1,287 1,027 496 1,972 $ 9,280

Related lease expense was approximately $2,874 in 2012. e. Arena Time Warner Cable Arena was constructed and financed by the City of Charlotte and opened in October 2005. The primary tenant of the arena is the National Basketball Association’s Charlotte Bobcats. Terms of a twenty-five year lease entitle the team to all operating revenues and the team is responsible for all operating expense, including non-basketball related events. The City and the Team each contribute $250 annually (escalating at five percent per year to a maximum of $500) to a capital reserve fund. Any capital expenses in excess of the reserve are the responsibility of the City. While the City of Charlotte retains ownership of the facility, the Charlotte Regional Visitors Authority provides operation support for the Arena. The $200 million project was funded primarily through a combination of installment financing obligations supported by a portion of an occupancy tax and a dedicated rental car tax, private contributions and the sale of City assets. The City is entitled to damages based on the number of years remaining on the lease if the team violates the agreement. f. NASCAR Hall of Fame

NASCAR Hall of Fame was constructed and financed by the City of Charlotte and opened in May 2010. The $140 million project was funded through a combination of installment financing obligations supported by a dedicated two percent occupancy tax and private loans repaid through land sales and private contributions. The City also receives a portion of sponsorship money and deferred NASCAR royalty payments to help service the debt. The City of Charlotte owns the facility and the Charlotte Regional Visitors Authority is fully responsible for Hall operations. However, the City can supplement capital maintenance and repair costs through the dedicated revenues if funds are available. The City is responsible for any capital costs for the facility.

112

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands) g. Cultural Arts Facilities The Cultural Arts Facilities consist of the Harvey B. Gantt Center for African-American Arts & Culture, the Bechtler Museum of Modern Art, the Mint Museum, and the Knight Theater, and are known collectively as the Levine Center for the Arts. All four facilities opened in fiscal year 2010 and are owned by the City, with Mecklenburg County entitled to a 30 percent share when the debt is retired. The $120 million project is part of a $600 million mixed-use development project, including the 50 story Duke Energy Center. The projects were funded through a combination of installment financing obligations supported by City revenues and ongoing City and County contributions derived from a synthetic tax increment finance payment of $1,650 (divided proportionally between the City and County) annually through 2026. In addition, Wells Fargo Corporation is under contract to pay the difference between actual tax collections and $1,650 annually. All four sites are leased by the City to non-profits, which are responsible for operating the facilities. The City and County (70/30 share) are responsible for capital repairs and major maintenance. h. US Airways US Airways, Inc. (US Airways), a wholly owned subsidiary of US Airways Group, Inc., is the major passenger airline serving Charlotte/Douglas International Airport (Airport). For the fiscal year ended June 30, 2012, US Airways and its affiliates provided 23.67 percent of the Airport’s operating revenues. US Airways conducts its passenger air carrier operations at the Airport pursuant to several agreements, the most significant of which is the City of Charlotte’s 1985 Airport Agreements and Lease (Airport Agreement), which has also been executed by American Airlines, Continental Airlines, Delta Air Lines, Northwest Airlines, and United Airline (collectively, the Signatory Airlines). Pursuant to the Airport Agreement, the Signatory Airlines lease certain premises in the passenger terminal building (terminal) and are obligated to pay landing fees and terminal rentals which, in the aggregate, are sufficient to enable the City to pay the annual operating expenses of the airfield and terminal, and the annual debt service on General Airport Revenue Bonds (GARBS) issued by the City to fund airfield and terminal improvements. As of June 30, 2012, the City had $684,890 of GARBS outstanding, the proceeds of which were used for airfield and terminal improvements. The GARBS are not general obligations of the City and are payable solely from revenues generated by the City in the airfield and terminal. The City has $35,451 in reserve to pay principal and interest on GARBS. In addition to the GARBS, the City has also issued Special Facility Revenue Bonds to finance the construction of crew training, airfield maintenance and other Airport facilities (Special Facilities) that are leased to US Airways by the City. As rental for the Special Facilities, US Airways is obligated to pay directly to the City a Ground Rental and an Airport Service Fee Rental. In addition, US Airways is obligated to pay directly to a Trustee for the benefit of bondholders a facility rental (Special 113

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS-(Continued) JUNE 30, 2012 (Dollar Amounts In Thousands) Facilities Debt Service Rental) in an amount equal to the annual installments of principal and interest on the Special Facility Revenue Bonds. The Special Facilities Debt Service Rental is not a general obligation of the City. If US Airways fails to pay the Special Facilities Debt Service Rentals, the City is obligated to use reasonable efforts to re-let the Special Facilities to another tenant and apply the debt service rentals from such re-letting to the payment of the principal and interest on the Special Facility Revenue Bonds. The City is not obligated to make any payments relating to the Special Facilities or the Special Facility Revenue Bonds except for such debt service rentals as it receives from the tenant of the Special Facilities. As of June 30, 2012, there was $114,910 of Special Facility Revenue Bonds outstanding. The Special Facility Revenue Bonds provide for the semi-annual payment of interest with a lump-sum payment of principal on the maturity date of the bonds. The Special Facility Revenue Bonds mature on July 1, 2027 and February 1, 2028.

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Financial Section– Combining and Individual Fund Statements and Schedules

CITY OF CHARLOTTE, NORTH CAROLINA NONMAJOR GOVERNMENTAL FUNDS Special Revenue Funds Special Revenue Funds are used to account for the proceeds from specific revenue sources (other than funding for major capital projects) that are restricted to expenditures for specified purposes.  Convention Center Tax Fund – Accounts for room occupancy and prepared food and beverage tax revenues to be used for convention and tourism purposes, including debt service, maintenance and operation of convention center facilities, and promotion of tourism.  Tourism Fund – Accounts for room occupancy and other tax revenues to be used for tourism purposes.  Hall of Fame Tax Fund – Accounts for room occupancy tax and private contribution revenues to be used for the NASCAR Hall of Fame.  Municipal Services District Fund – Accounts for property tax on property within designated Municipal Services Districts to be used to enhance economic vitality and quality of life within the districts.  Democratic National Convention (DNC) Fund – Accounts for the federal grant to be used for security activities related to the 2012 DNC.  Public Safety and Other Grants Fund – Accounts for federal and state grants to be used for public safety, including police, fire and emergency management, and other governmental-type activities.  Neighborhood Development Fund – Accounts for federal grants to be used for neighborhood activities which develop viable urban communities providing adequate housing and economic opportunities, principally for persons of low and moderate income.  Employment and Training Fund – Accounts for federal grants to be used for activities providing comprehensive employment and training services to enable individuals to secure and retain employment at their maximum capacity.  Stimulus Grants Fund – Accounts for American Recovery and Reinvestment Act (ARRA) grants to be used for governmental-type activities.  State Street Aid Fund – Accounts for motor fuel taxes distributed by the State on the basis of local street mileage and population to be used for maintenance, repair and construction of streets and highways.  Emergency Communications Fund – Accounts for revenues remitted by the NC 911 Board from service charges imposed on voice communications service connections to be used for the operation and enhancement of the 911 system. Permanent Fund A permanent fund is used to report resources that are legally restricted to the extent that only earnings, not principal, may be used. Perpetual Care Fund – Accounts for monies held by the City for cemetery maintenance.

115

CITY OF CHARLOTTE, NORTH CAROLINA NONMAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEET JUNE 30, 2012 (In Thousands)

Convention Center Tax ASSETS Cash and cash equivalents Receivables, net: Property taxes Accounts Other Total receivables Due from other governmental agencies Notes receivable Prepaid expenses Total assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Deposits and retainage payable Due to other funds Due to component unit Deferred revenues Total liabilities Fund balances: Nonspendable: Perpetual care Restricted: Public safety Cultural and recreation Community planning and development Streets and highways Committed: Cultural and recreation Total fund balances Total liabilities and fund balances $ 42,528 3,287 45,815 $

Tourism 54,889 4 39 43 921 55,853

Hall of Fame Tax $ 20,636 905 21,541 $

Municipal Services District 1,016 191 191 1,207

Democratic Public Safety National and Other Convention Grants $ 5,194 5,194 $ 82 9,608 9,690

$

$

$

$

$

$

$

585 585

$

4 4

$

196 196

$

771 191 962

$

3,669 1,525 5,194

$

1,827 1,518 3,345

45,230 45,230 45,815

54,349 1,500 55,849 55,853

21,345 21,345 21,541

245 245 1,207

5,194

5,951 389 5 6,345 9,690

$

$

$

$

$

$

116

Special Revenue Funds Neighborhood Employment Development and Training $ 3,962 1,784 52,784 58,530 $ 1,371 1,371 $ Stimulus Grants 2,659 2,659 $ State Street Aid 10,176 8 8 187 10,371 $ Emergency Telephone System 3,081 201 22 3,304

Permanent Fund

Total $ 136,370 191 4 47 242 26,117 52,784 22 $ 215,535

Total Nonmajor Perpetual Governmental Care Funds $ 3,111 10 10 3,121 $ 139,481 191 4 57 252 26,117 52,784 22 218,656

$

$

$

$

$

$

$

$

1,114 456 52,560 54,130

$

921 450 1,371

$

411 15 1,610 580 2,616

$

1,851 158 8 2,017

$

295 295

$ 10,859 629 3,585 781 54,861 70,715

$

-

$

10,859 629 3,585 781 54,861 70,715

4,400 4,400 58,530

1,371

43 43 2,659

8,354 8,354 10,371

3,009 3,009 3,304

9,003 120,924 5,034 8,359 1,500 144,820 $ 215,535

3,121 3,121 3,121

3,121 9,003 120,924 5,034 8,359 1,500 147,941 218,656

$

$

$

$

$

$

$

117

CITY OF CHARLOTTE, NORTH CAROLINA NONMAJOR GOVERNMENTAL FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED JUNE 30, 2012 (In Thousands)

Convention Center Tax REVENUES: Property taxes Other taxes Intergovernmental Licenses, fees and fines Investment earnings Miscellaneous Total revenues EXPENDITURES: CurrentPublic safety Sanitation General administration Support services Engineering and property management Streets and highways Culture and recreation Community planning and development Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES): Sales of capital assets Transfers inGeneral Special revenue Debt service Capital projects Total transfers in Transfers outGeneral Special revenue Debt service Capital projects Total transfers out Total other financing sources (uses) Net change in fund balances Fund balances - beginning Fund balances - ending $ 35,952 299 36,251

Tourism $ 9,248 2,948 57 374 970 13,597

Hall of Fame Tax $ 8,964 146 9,110

Municipal Democratic Public Safety Services National and Other District Convention Grants $ 4,473 1 4,474 $ 13,106 13,106 $ 11,374 45 1,657 13,076

12,759 12,759 23,492 (2,477) (20,478) (22,955)

13,597 1,345 243 6,763 8,351 (60) (21,023) (1,259) (22,342)

873 873 8,237 (9,554) (9,554) (9,554) (1,317) 22,662 21,345 $

4,519 4,519 (45) 60 60 60 15 230 245

13,106 13,106 -

12,741 1,854 277 14,872 (1,796) 848 1,928 20 2,796 2,796 1,000 5,345 6,345

(22,955) (13,991) 537 (394) 44,693 56,243 $ 45,230 $ 55,849 $

$

$

118

Special Revenue Funds Neighborhood Employment Stimulus Development and Training Grants $ 7,833 21 1,743 9,597 $ 7,103 7,103 $ 14,806 7 292 15,105 $ State Street Aid 18,589 850 69 10 19,518 $ Emergency Telephone System 2,410 90 2,500 $

Permanent Fund

Total 4,473 54,164 78,169 907 1,052 4,672 143,437

Total Nonmajor Perpetual Governmental Care Funds $ 19 19 $ 4,473 54,164 78,169 907 1,071 4,672 143,456

1,076 9,424 10,500 (903) 1,242 1,242 1,242 339 4,061 4,400

665 6,438 7,103 -

4,990 275 310 4,028 1,773 614 3,108 15,098 7 7 36 43

24,832 24,832 (5,314) 87 4,261 4,261 (1,058) (1,058) 3,290 (2,024) 10,378 $ 8,354 $

7,299 7,299 (4,799) (1,928) (1,928)

38,136 275 2,051 4,028 1,773 27,300 13,632 23,766 110,961 32,476 87 6,454 1,988 243 8,025 16,710 (2,477) (1,988) (52,113) (1,259) (57,837)

19 (18) (18) (18) 1 3,120 3,121 $

38,136 275 2,051 4,028 1,773 27,300 13,632 23,766 110,961 32,495 87 6,454 1,988 243 8,025 16,710 (2,495) (1,988) (52,113) (1,259) (57,855) (41,058) (8,563) 156,504 147,941

$

$

$

(1,928) (41,040) (6,727) (8,564) 9,736 153,384 3,009 $ 144,820

$

119

CITY OF CHARLOTTE, NORTH CAROLINA SPECIAL REVENUE FUNDS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCESBUDGET AND ACTUAL (NON-GAAP BASIS) FOR THE YEAR ENDED JUNE 30, 2012 (In Thousands) Convention Center Tax VariancePositive Budget Actual (Negative) REVENUES: Property taxes Other taxes Intergovernmental Licenses, fees and fines Investment earnings Miscellaneous Total revenues EXPENDITURES: CurrentGeneral administration Streets and highways Culture and recreation Community planning and development Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES): Sales of capital assets Transfers in Transfers out Total other financing sources (uses) Revenues and other sources over (under) expenditures and other uses RECONCILIATION TO GAAP BASIS: Current year encumbrances Net change in fund balances Fund balances - beginning (annually budgeted funds) Fund balances - ending (annually budgeted funds) Project funds: Fund balances - beginning Net change in fund balances Fund balances - ending Fund balances - ending $ 33,702 475 34,177 $ 35,952 299 36,251 $ Tourism VariancePositive (Negative) $ 1,334 57 (177) 654 1,868

Budget $

Actual 9,248 2,948 57 374 970 13,597

- $ 2,250 7,914 2,948 (176) 551 316 2,074 11,729

75 13,670 13,745 20,432 (23,526) (23,526) $ (3,094)

12,759 12,759 23,492 (22,955) (22,955) 537 537 44,693 $ 45,230 $

75 911 986 3,060 571 571 3,631

100 100 11,629 8,370 (22,365) (13,995) $ (2,366)

13,597 8,351 (22,342) (13,991) (394) $ (394) 56,243 $ 55,849

100 100 1,968 (19) 23 4 1,972

120

Hall of Fame Tax VariancePositive Budget Actual (Negative) $ 8,159 133 8,292 $ 8,964 146 9,110 $ 805 13 818 $

Municipal Services District VariancePositive Budget Actual (Negative) 3,756 3,756 $ 4,473 1 4,474 $ 717 1 718 $

State Street Aid VariancePositive (Negative) $ 1,683 200 (331) 10 1,562

Budget 16,906 650 400 17,956 $

Actual 18,589 850 69 10 19,518

1,044 1,044 7,248 (9,761) (9,761) $ (2,513)

873 873 8,237 (9,554) (9,554) (1,317) $ (1,317) 22,662 $ 21,345

171 171 989 207 207 1,196 $

4,587 4,587 (831) 60 60 (771)

4,519 4,519 (45) 60 60 15 15 230 $ 245 $

68 68 786 786 $

29,832 29,832 (11,876) 4,261 (1,283) 2,978 (8,898)

28,772 28,772 (9,254) 87 4,261 (1,058) 3,290 (5,964) $ 3,940 (2,024) 10,378 $ 8,354

1,060 1,060 2,622 87 225 312 2,934

Continued on next page

121

CITY OF CHARLOTTE, NORTH CAROLINA SPECIAL REVENUE FUNDS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCESBUDGET AND ACTUAL (NON-GAAP BASIS)-(Continued) FOR THE YEAR ENDED JUNE 30, 2012 (In Thousands) Total VariancePositive (Negative) $ 717 4,389 1,683 257 (670) 664 7,040

Budget REVENUES: Property taxes Other taxes Intergovernmental Licenses, fees and fines Investment earnings Miscellaneous Total revenues EXPENDITURES: CurrentGeneral administration Streets and highways Culture and recreation Community planning and development Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES): Sales of capital assets Transfers in Transfers out Total other financing sources (uses) Revenues and other sources over (under) expenditures and other uses RECONCILIATION TO GAAP BASIS: Current year encumbrances Net change in fund balances Fund balances - beginning (annually budgeted funds) Fund balances - ending (annually budgeted funds) Project funds: Fund balances - beginning Net change in fund balances Fund balances - ending Fund balances - ending $ 3,756 49,775 19,854 650 1,559 316 75,910 $

Actual 4,473 54,164 21,537 907 889 980 82,950

75 29,832 14,814 4,587 49,308 26,602 12,691 (56,935) (44,244) $ (17,642)

28,772 13,632 4,519 46,923 36,027 87 12,672 (55,909) (43,150) (7,123) $ 3,940 (3,183) 134,206 131,023 19,178 (5,381) 13,797 144,820

75 1,060 1,182 68 2,385 9,425 87 (19) 1,026 1,094 10,519

$

122

CITY OF CHARLOTTE, NORTH CAROLINA DEMOCRATIC NATIONAL CONVENTION SCHEDULE OF EXPENDITURES COMPARED WITH AUTHORIZATIONS FOR THE YEAR ENDED JUNE 30, 2012 (In Thousands) Expenditures Current Prior Unexpended Authorizations Year Year Total Authorizations $ 49,850 $ 13,106 $ - $ 13,106 $ 36,744

Federal: 2012 DNC Grant

123

CITY OF CHARLOTTE, NORTH CAROLINA PUBLIC SAFETY AND OTHER GRANTS FUND SCHEDULE OF EXPENDITURES COMPARED WITH AUTHORIZATIONS FOR THE YEAR ENDED JUNE 30, 2012 (In Thousands) Expenditures Current Prior Year Years Total $ 119 2,937 88 30 616 370 113 748 4,082 39 116 59 1,587 97 91 (2) 686 130 99 92 3 1,772 544 267 189 $ 14,872 $ 2 965 1,320 1,043 511 436 138 3,504 258 4,951 364 102 68 77 75 2,273 241 1 2 87 1,633 2,539 $ 20,590 $ 121 3,902 88 1,350 1,659 881 549 138 4,252 258 9,033 403 218 127 1,587 97 168 73 2,959 371 99 93 5 87 3,405 3,083 267 189 $ 35,462

Authorizations Federal: High Intensity Drug Trafficking Areas $ Assistance to Firefighters Fair Housing Assistance Part E - Promising New Programs Public Safety Partnership and Community Policing Forensic DNA Backlog Reduction Federal pass through: Public Health and Social Services Emergency State/Local Homeland Security Exercise Support Urban Areas Security Initiative Metropolitan Medical Response System Homeland Security Buffer Zone Protection Plan Emergency Management Performance Crime Victim Assistance Highway Planning and Construction Project Safe Neighborhoods Coverdell Forensic Science Improvement Antigang Initiative Justice Assistance State and Local Law Enforcement Assistance National Institute of Justice Highway Safety State: State Medical Assistance Gang of One Asset forfeiture Other public safety programs Other streets and highways programs Other community planning and development programs Total public safety grants $ 363 7,480 325 2,062 4,167 1,429 565 141 4,970 258 17,440 560 366 151 1,880 219 172 91 4,104 554 486 131 15 100 4,684 3,514 267 571 57,065

Unexpended Authorizations $ 242 3,578 237 712 2,508 548 16 3 718 8,407 157 148 24 293 122 4 18 1,145 183 387 38 10 13 1,279 431 382 21,603

$

124

CITY OF CHARLOTTE, NORTH CAROLINA NEIGHBORHOOD DEVELOPMENT FUND SCHEDULE OF EXPENDITURES COMPARED WITH AUTHORIZATIONS FOR THE YEAR ENDED JUNE 30, 2012 (In Thousands) Expenditures Current Prior Year Years Total $ 4,370 211 3,417 916 361 59 11 39 205 5 906 $ 10,500 $ 3,933 210 2,535 346 4,271 2,511 287 176 63 20 1,140 2,328 $ 17,820 $ 8,303 421 5,952 1,262 4,632 2,570 287 187 39 63 225 1,145 3,234 $ 28,320

Authorizations Federal: Community Development Block Grants Emergency Shelter HOME Investment Partnerships Program Housing Opportunities For Persons With AIDS National Stabilization Program Federal pass through: Community Development Block Grants Community Capacity Development Housing Rehabilitation Program State: One NC Grant Housing Urgent Repair Program Local: Property Acquisitions for Housing Wingate Community Other Total neighborhood development $ 12,262 421 11,875 2,321 5,432 2,625 292 187 4,130 150 291 1,145 5,232 46,363

Unexpended Authorizations $ 3,959 5,923 1,059 800 55 5 4,091 87 66 1,998 18,043

$

$

125

CITY OF CHARLOTTE, NORTH CAROLINA EMPLOYMENT AND TRAINING FUND SCHEDULE OF EXPENDITURES COMPARED WITH AUTHORIZATIONS FOR THE YEAR ENDED JUNE 30, 2012 (In Thousands) Expenditures Current Prior Unexpended Authorizations Year Year Total Authorizations $ 16,946 $ 7,103 $ 6,226 $ 13,329 $ 3,617

Workforce Investment Act

126

CITY OF CHARLOTTE, NORTH CAROLINA STIMULUS GRANTS FUND SCHEDULE OF EXPENDITURES COMPARED WITH AUTHORIZATIONS FOR THE YEAR ENDED JUNE 30, 2012 (In Thousands) Expenditures Current Prior Year Years Total $ 4,026 3,646 475 452 455 2,649 284 191 1 2,341 578 $ 15,098 $ 17 2,551 707 1,478 2,401 4,666 $ 4,043 6,197 1,182 1,930 2,856 7,315 463 191 1 5,156 4,510 4,870 $ 38,714

Authorizations Federal: Broadband Technology Opportunities (BTOP) $ Energy Efficiency and Conservation Block Grant Community Development Block Grant Homelessness Prevention and Rapid Re-Housing Lead-Based Paint Hazard Control Public Safety Partnership and Community Policing Federal pass through: State Energy Conservation Research and Development Energy Efficiency and Conservation Block Grant Justice Assistance Workforce Investment Act Highway Planning and Construction Total stimulus grants $ 16,702 6,780 1,262 1,930 3,000 8,546 463 191 607 5,908 4,510 5,076 54,975

Unexpended Authorizations $ 12,659 583 80 144 1,231 606 752 206 16,261

179 2,815 4,510 4,292 $ 23,616

$

127

CITY OF CHARLOTTE, NORTH CAROLINA EMERGENCY TELEPHONE SYSTEM FUND SCHEDULE OF EXPENDITURES COMPARED WITH AUTHORIZATIONS FOR THE YEAR ENDED JUNE 30, 2012 (In Thousands) Expenditures Current Prior Unexpended Authorizations Year Year Total Authorizations $ 1,081 $ 542 $ 539 $ 1,081 $ 3,957 1,078 1,285 2,363 1,594 269 257 11 268 1 3,336 2,008 406 2,414 922 3,298 2,871 296 3,167 131 3 1 2 3 4,318 613 3,705 4,318 $ 16,262 $ 7,370 $ 6,244 $ 13,614 $ 2,648

Implemental functions Telephone Furniture Software maintenance Hardware maintenance Training 50% Public safety need Total expenditures

Amounts reported on the Emergency Telephone System Fund Schedule of Expenditures Compared with Authorizations are different from the PSAP RevenueExpenditure Report because: Ineligible 911 expenditures reported in Emergency Telephone System Fund (71) $ 7,299

128

CITY OF CHARLOTTE, NORTH CAROLINA

DEBT SERVICE FUND The Debt Service fund is used to account for the accumulation of resources and the payment of principal, interest and related costs for all long-term debt other than debt issued for and serviced by business-type activities.

CAPITAL PROJECTS FUND The Capital Projects fund accounts for financial resources, primarily bond proceeds and property taxes, used for the acquisition, construction or improvement of capital assets.

129

CITY OF CHARLOTTE, NORTH CAROLINA DEBT SERVICE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCESBUDGET AND ACTUAL (NON-GAAP BASIS) FOR THE YEAR ENDED JUNE 30, 2012 (In Thousands) VariancePositive (Negative) $ 637 (57) 68 11

Budget REVENUES: Property tax Other taxesSales tax Heavy equipment Total other IntergovernmentalMecklenburg County: ABC Board contribution Debt service contributions Total intergovernmental Licenses, fees and fines Investment earnings Private contributions Miscellaneous Total revenues EXPENDITURES: BondsPrincipal retirement Interest Installment purchasesPrincipal retirement Interest Fiscal agents fees Other Total expenditures Revenues (under) expenditures $ 54,605 13,283 13,283 $

Actual 55,242 13,226 68 13,294

718 689 1,407 60 2,527 1,258 199 73,339

725 689 1,414 55 1,417 1,258 570 73,250

7 7 (5) (1,110) 371 (89)

31,762 23,668 46,614 35,568 3,764 95 141,471 (68,132)

28,477 21,479 44,372 33,283 3,764 80 131,455 (58,205)

3,285 2,189 2,242 2,285 15 10,016 9,927

130

CITY OF CHARLOTTE, NORTH CAROLINA DEBT SERVICE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCESBUDGET AND ACTUAL (NON-GAAP BASIS)-(Continued) FOR THE YEAR ENDED JUNE 30, 2012 (In Thousands) VariancePositive (Negative) (571) (23) (207) (225) (1,026) 5 5 (1,021) 8,906

Budget OTHER FINANCING SOURCES (USES): Refunding debt issued Premium on debt issuance Payment to refunded bond escrow agent Transfers inGeneral Special revenue: Convention Center tax Tourism Hall of Fame State street aid Total transfers in Transfers outGeneral Capital projects Special revenue - Tourism Public Transit Total transfers out Total other financing sources (uses) Net change in fund balance Fund balance - beginning Fund balance - ending

Actual

$ 177,485 $ 177,485 $ 33,320 33,320 (209,457) (209,457) 17,881 21,049 21,046 9,761 1,283 71,020 3,425 42 248 2 3,717 68,651 $ 519 17,881 20,478 21,023 9,554 1,058 69,994 3,425 42 243 2 3,712 67,630 9,425 220,496 $ 229,921

$

131

CITY OF CHARLOTTE, NORTH CAROLINA CAPITAL PROJECTS FUND SCHEDULE OF EXPENDITURES AND ENCUMBRANCES COMPARED WITH AUTHORIZATIONS FOR THE YEAR ENDED JUNE 30, 2012 (In Thousands) Expenditures Prior Years Total $ 116,464 $ 139,699 325,704 375,817 358,555 361,418 136,921 167,775 61,251 78,175 158,859 172,376 $ 1,157,754 $ 1,295,260

Economic development Streets and highways Culture and recreation General government Public safety Public housing Total capital projects

Authorizations $ 267,374 679,175 369,291 228,208 112,043 197,347 $ 1,853,438

Current Year $ 23,235 50,113 2,863 30,854 16,924 13,517 $ 137,506

132

Unexpended Authorizations $ 127,675 303,358 7,873 60,433 33,868 24,971 $ 558,178

Encumbrances June 30, 2012 $ 16,043 66,231 753 19,938 14,525 641 $ 118,131

Unencumbered Authorizations June 30, 2012 $ 111,632 237,127 7,120 40,495 19,343 24,330 $ 440,047

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134

CITY OF CHARLOTTE, NORTH CAROLINA

ENTERPRISE FUNDS Enterprise funds are used to account for operations that charge a fee for service to customers similar to private business enterprises. The City has four enterprise operations.  Water and Sewer Fund – Accounts for the operation of Charlotte-Mecklenburg Utilities, provider of water and wastewater services.  Storm Water Fund – Accounts for the operation of Charlotte Storm Water Services, administrator of storm water programs and policies.  Airport Fund – Accounts for the operation of the Charlotte Douglas International Airport.  Public Transit Fund – Accounts for the operation of Charlotte Area Transit System, provider of community-wide public transportation services.

135

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136

CITY OF CHARLOTTE, NORTH CAROLINA WATER AND SEWER OPERATING FUND SCHEDULE OF REVENUES, EXPENDITURES AND TRANSFERSBUDGET AND ACTUAL (NON-GAAP BASIS) FOR THE YEAR ENDED JUNE 30, 2012 (In Thousands) VariancePositive (Negative) $ (11,622) (14,455) 25,813 1,743 (223) 132 114 1,502 3,707 3,563 1,729 1,629 1 10,629 12,131 5,843 5,843 $ 17,974

Budget REVENUES: Water sales Sewer services fees Availability fees Capacity fees Intergovernmental Other Investment earnings Total revenues EXPENDITURES: Water supply and treatment Sewer system and treatment Administration and engineering Field operations Nondepartmental charges Total expenditures Revenues over expenditures TRANSFERS IN: Water and Sewer Capital Projects TRANSFERS OUT: Water and Sewer Debt Service Water and Sewer Capital Projects Total transfers out Revenues and transfers over expenditures and transfers $ 113,066 168,753 5,700 239 5,795 677 294,230 17,094 34,950 25,538 29,669 8,719 115,970 178,260 1,125 148,081 29,156 177,237 $ 2,148 $ $

Actual 101,444 154,298 25,813 7,443 16 5,927 791 295,732 13,387 31,387 23,809 28,040 8,718 105,341 190,391 1,125 142,238 29,156 171,394 20,122

137

CITY OF CHARLOTTE, NORTH CAROLINA WATER AND SEWER DEBT SERVICE FUND SCHEDULE OF REVENUES, EXPENDITURES AND TRANSFERSBUDGET AND ACTUAL (NON-GAAP BASIS) FOR THE YEAR ENDED JUNE 30, 2012 (In Thousands) VariancePositive (Negative) $ (616) (20) 14 (622)

Budget REVENUES: Investment earnings Installment purchases issued Refunding bonds issued Premium on debt issuance Total revenues EXPENDITURES: BondsPrincipal retirement Interest Other financing agreementsPrincipal retirement Interest Payment to refunded bond escrow agent Bond issue expense Other Total expenditures Revenues (under) expenditures TRANSFERS IN: Water and Sewer Operating Water and Sewer Capital Projects Total transfers in Revenues and transfers (under) expenditures $ 668 20 93,390 12,239 106,317 $

Actual 52 93,390 12,253 105,695

58,312 82,366 5,991 837 116,079 733 2,024 266,342 (160,025) 148,081 437 148,518 $ (11,507) $

56,402 77,695 5,733 769 116,079 726 1,396 258,800 (153,105) 142,238 437 142,675 (10,430) $

1,910 4,671 258 68 7 628 7,542 6,920 (5,843) (5,843) 1,077

138

CITY OF CHARLOTTE, NORTH CAROLINA WATER AND SEWER FUND SCHEDULE OF RECONCILIATION OF BUDGETARY (NON-GAAP BASIS) TO FULL ACCRUAL BASIS FOR THE YEAR ENDED JUNE 30, 2012 (In Thousands) Revenues and transfers over (under) expenditures and transfers: Operating Fund Debt Service Fund Investment earnings in the Capital Projects Fund Current year encumbrances Bond proceeds Debt principal retirement Depreciation Capital outlay Capital contributions Bond issue expense Amortization of deferred charges Premium on debt issuance Amortization of premium Capitalized interest Other Net transfers to (from) Capital Projects Fund: Operating Fund Debt Service Fund Change in net assets

$

20,122 (10,430) 473 4,525 22,689 63,157 (88,601) 308 12,741 726 (3,354) (12,253) 4,540 18,486 (6,711)

$

28,031 (437) 54,012

Note: Pursuant to state law, budgets are adopted on an annual basis for Operating and Debt Service Funds. Budgets for Capital Projects Funds are adopted on a project basis.

139

CITY OF CHARLOTTE, NORTH CAROLINA WATER AND SEWER CAPITAL PROJECTS FUND SCHEDULE OF EXPENDITURES AND ENCUMBRANCES COMPARED WITH AUTHORIZATIONS FOR THE YEAR ENDED JUNE 30, 2012 (In Thousands) Expenditures Prior Years $ 539,739 927,389 $

Authorizations Water projects Sewer projects Total water and sewer capital projects $ 835,608 1,539,006 2,374,614

Current Year $ 48,361 60,917 $ 109,278

Total 588,100 988,306

$

$ 1,467,128

$ 1,576,406

140

Unexpended Authorizations $ 247,508 550,700 798,208

Encumbrances June 30, 2012 $ 31,933 71,948 103,881

Unencumbered Authorizations June 30, 2012 $ 215,575 478,752 694,327

$

$

$

141

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142

CITY OF CHARLOTTE, NORTH CAROLINA STORM WATER OPERATING FUND SCHEDULE OF REVENUES, EXPENDITURES AND TRANSFERSBUDGET AND ACTUAL (NON-GAAP BASIS) FOR THE YEAR ENDED JUNE 30, 2012 (In Thousands) VariancePositive (Negative) $ (496) 27 (292) (761) 392 392 (369) 24 24 (345)

Budget REVENUES: Storm water fees Other Investment earnings Total revenues EXPENDITURES: Storm water systems Administration Total expenditures Revenues over expenditures TRANSFERS OUT: Storm Water Capital Projects Storm Water Debt Service Total transfers out Revenues (under) expenditures and transfers $ 52,561 360 52,921 10,965 1,792 12,757 40,164 32,000 10,591 42,591 $

Actual $ 52,065 27 68 52,160 10,573 1,792 12,365 39,795 32,000 10,567 42,567

(2,427) $ (2,772) $

143

CITY OF CHARLOTTE, NORTH CAROLINA STORM WATER DEBT SERVICE FUND SCHEDULE OF REVENUES, EXPENDITURES AND TRANSFERSBUDGET AND ACTUAL (NON-GAAP BASIS) FOR THE YEAR ENDED JUNE 30, 2012 (In Thousands) VariancePositive (Negative)

Budget EXPENDITURES: BondsPrincipal retirement Interest Other Total expenditures TRANSFERS IN: Storm Water Operating Transfers over expenditures

Actual

$

4,410 6,151 30 10,591

$

4,409 6,135 16 10,560

$

1 16 14 31 (24) 7

10,591 $ -

10,567 $ 7

$

144

CITY OF CHARLOTTE, NORTH CAROLINA STORM WATER FUND SCHEDULE OF RECONCILIATION OF BUDGETARY (NON-GAAP BASIS) TO FULL ACCRUAL BASIS FOR THE YEAR ENDED JUNE 30, 2012 (In Thousands) Revenues and transfers over (under) expenditures and transfers: Operating Fund Debt Service Fund Capital Projects Fund: Charges for services Investment earnings Current year encumbrances Debt principal retirement Depreciation Capital outlay Capital contributions Amortization of deferred charges Amortization of premium Capitalized interest Other Net transfers to Capital Projects Fund: Operating Fund Change in net assets

$ (2,772) 7 10 260 263 4,409 (3,087) 22 1,962 (204) 166 510 1,988

32,000 $ 35,534

Note: Pursuant to state law, budgets are adopted on an annual basis for Operating and Debt Service Funds. Budgets for Capital Projects Funds are adopted on a project basis.

145

CITY OF CHARLOTTE, NORTH CAROLINA STORM WATER CAPITAL PROJECTS FUND SCHEDULE OF EXPENDITURES AND ENCUMBRANCES COMPARED WITH AUTHORIZATIONS FOR THE YEAR ENDED JUNE 30, 2012 (In Thousands) Expenditures Prior Years $ 113,145 60,654 90,941 $ 264,740

Authorizations Flood control Storm drain repair Channel and other projects Total storm water capital projects $ 173,245 88,379 158,449 420,073 $

Current Year

Total $ 127,792 71,182 103,291 $ 302,265

14,647 10,528 12,350 37,525

$

$

146

Unexpended Authorizations $ 45,453 17,197 55,158 117,808

Encumbrances June 30, 2012 $ 20,637 10,373 15,191 46,201

Unencumbered Authorizations June 30, 2012 $ 24,816 6,824 39,967 71,607

$

$

$

147

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148

CITY OF CHARLOTTE, NORTH CAROLINA AIRPORT OPERATING FUND SCHEDULE OF REVENUES, EXPENDITURES AND TRANSFERSBUDGET AND ACTUAL (NON-GAAP BASIS) FOR THE YEAR ENDED JUNE 30, 2012 (In Thousands) VariancePositive (Negative) $ 762 4,449 3,220 1,576 26,595 5,713 (1,109) 2,064 43,270 3,295 7,357 10,652 53,922 (19) (19) 4,432 4,432 $ 58,335

Budget REVENUES: Terminal area Airfield Concessions Parking Passenger facility charges Contract facility charges Other Investment earnings Total revenues EXPENDITURES: Operating Nonoperating Total expenditures Revenues over expenditures TRANSFERS IN: Airport Debt Service Airport Capital Projects Total transfers in TRANSFERS OUT: Airport Debt Service Airport Capital Projects Total transfers out Revenues and transfers over expenditures and transfers $ 28,902 10,184 39,015 36,974 26,499 3,194 26,972 1,518 173,258 89,451 25,270 114,721 58,537 65 29,673 29,738 56,647 15,691 72,338 $ 15,937

Actual $ 29,664 14,633 42,235 38,550 53,094 8,907 25,863 3,582 216,528 86,156 17,913 104,069 112,459 46 29,673 29,719 52,215 15,691 67,906 $ 74,272

149

CITY OF CHARLOTTE, NORTH CAROLINA AIRPORT DEBT SERVICE FUND SCHEDULE OF REVENUES, EXPENDITURES AND TRANSFERSBUDGET AND ACTUAL (NON-GAAP BASIS) FOR THE YEAR ENDED JUNE 30, 2012 (In Thousands) VariancePositive (Negative) $ (42) (145) (15,496) (1,678) (17,361)

Budget REVENUES: Maintenance facility Investment earnings Revenue bonds issued Premium on debt issuance Total revenues EXPENDITURES: BondsPrincipal retirement Interest Other Total expenditures Revenues (under) expenditures TRANSFERS IN: Airport Operating Airport Capital Projects Total transfers in TRANSFERS OUT: Airport Operating Revenues and transfers over expenditures and transfers $ 7,104 175 27,501 5,500 40,280 $

Actual 7,062 30 12,005 3,822 22,919

39,475 40,493 6,427 86,395 (46,115) 56,647 20,500 77,147 65 $ 30,967

38,840 34,753 3,272 76,865 (53,946) 52,215 20,495 72,710 46 $ 18,718

635 5,740 3,155 9,530 (7,831) (4,432) (5) (4,437) 19 $ (12,249)

150

CITY OF CHARLOTTE, NORTH CAROLINA AIRPORT FUND SCHEDULE OF RECONCILIATION OF BUDGETARY (NON-GAAP BASIS) TO FULL ACCRUAL BASIS FOR THE YEAR ENDED JUNE 30, 2012 (In Thousands) Revenues and transfers over expenditures and transfers: Operating Fund Debt Service Fund Investment earnings in the Capital Projects Fund Current year encumbrances Bond proceeds Debt principal retirement Depreciation Capital outlay Capital contributions Amortization of deferred charges Premium on debt issuance Bond issue expense Amortization of premium Capitalized interest Other Net transfers (from) Capital Projects Fund: Operating Fund Debt Service Fund Change in net assets

$ 74,272 18,718 605 6,105 (12,005) 38,840 (37,935) 701 5,396 (1,118) (3,822) 2,486 731 1,972 (73)

(13,982) (20,495) $ 60,396

Note: Pursuant to state law, budgets are adopted on an annual basis for Operating and Debt Service Funds. Budgets for Capital Projects Funds are adopted on a project basis.

151

CITY OF CHARLOTTE, NORTH CAROLINA AIRPORT CAPITAL PROJECTS FUND SCHEDULE OF EXPENDITURES AND ENCUMBRANCES COMPARED WITH AUTHORIZATIONS FOR THE YEAR ENDED JUNE 30, 2012 (In Thousands) Expenditures Prior Years $ 307,318 402,548 $ 709,866

Authorizations Capital improvements Airport expansion Total airport capital projects $ $ 377,522 709,915 1,087,437 $ $

Current Year 12,675 64,953 77,628

Total $ 319,993 467,501 $ 787,494

152

Unexpended Authorizations $ $ 57,529 242,414 299,943

Encumbrances June 30, 2012 $ $ 6,020 121,050 127,070

Unencumbered Authorizations June 30, 2012 $ $ 51,509 121,364 172,873

153

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154

CITY OF CHARLOTTE, NORTH CAROLINA PUBLIC TRANSIT OPERATING FUND SCHEDULE OF REVENUES, EXPENDITURES AND TRANSFERSBUDGET AND ACTUAL (NON-GAAP BASIS) FOR THE YEAR ENDED JUNE 30, 2012 (In Thousands) VariancePositive (Negative) $ 120 316 6,709 (42) 105 (1,226) 5,982 2,518 2,518 8,500 8,500

Budget REVENUES: Passenger fares Other operating Sales tax Intergovernmental Other Investment earnings Total revenues EXPENDITURES: Transit operations Transit vehicle maintenance Administration Total expenditures Revenues over (under) expenditures TRANSFERS IN: Capital Projects Public Transit Capital Projects Total transfers in TRANSFERS OUT: Public Transit Capital Projects Public Transit Debt Service Total transfers out Revenues and transfers (under) expenditures and transfers $ 24,765 1,307 59,045 12,612 1,053 1,500 100,282 83,851 11,689 12,174 107,714 (7,432) 18,400 2,658 21,058 18,077 8,611 26,688

Actual $ 24,885 1,623 65,754 12,570 1,158 274 106,264 81,333 11,689 12,174 105,196 1,068 18,400 2,658 21,058 18,077 8,611 26,688

$ (13,062) $ (4,562) $

155

CITY OF CHARLOTTE, NORTH CAROLINA PUBLIC TRANSIT DEBT SERVICE FUND SCHEDULE OF REVENUES, EXPENDITURES AND TRANSFERSBUDGET AND ACTUAL (NON-GAAP BASIS) FOR THE YEAR ENDED JUNE 30, 2012 (In Thousands) VariancePositive (Negative) (687) (6) (693)

Budget REVENUES: Grant contributions Investment earnings Total revenues EXPENDITURES: BondsPrincipal retirement Installment purchasesPrincipal retirement Interest Other Total expenditures Revenues (under) expenditures TRANSFERS IN: Public Transit Operating Debt service Total transfers in TRANSFERS OUT: Revenues and transfers over expenditures $ 5,606 5,606 $

Actual

4,919 $ (6) 4,913

2 6,122 7,762 121 14,007 (8,401) 8,611 2 8,613 212

2 6,120 7,338 66 13,526 (8,613) 8,611 2 8,613 -

2 424 55 481 (212) (212)

$

$

$

156

CITY OF CHARLOTTE, NORTH CAROLINA PUBLIC TRANSIT FUND SCHEDULE OF RECONCILIATION OF BUDGETARY (NON-GAAP BASIS) TO FULL ACCRUAL BASIS FOR THE YEAR ENDED JUNE 30, 2012 (In Thousands) Revenues and transfers (under) expenditures and transfers: Operating Fund Investment earnings in the Capital Projects Fund Current year encumbrances Debt principal retirement Depreciation Capital contributions Amortization of deferred charges Amortization of premium Other Net transfers to (from) Capital Projects Fund: Operating Fund Capital Projects Change in net assets

$ (4,562) 333 2,474 6,122 (40,380) 48,882 (150) 134 (11,763)

15,419 (3) $ 16,506

Note: Pursuant to state law, budgets are adopted on an annual basis for Operating and Debt Service Funds. Budgets for Capital Projects Funds are adopted on a project basis.

157

CITY OF CHARLOTTE, NORTH CAROLINA PUBLIC TRANSIT CAPITAL PROJECTS FUND SCHEDULE OF EXPENDITURES AND ENCUMBRANCES COMPARED WITH AUTHORIZATIONS FOR THE YEAR ENDED JUNE 30, 2012 (In Thousands) Expenditures Prior Years $ 120,835 112,774 163,794 2,505 1,367 356,619 757,894 $

Authorizations Buses and vehicles Planning and consulting Facilities Technology Passenger amenities Services expansion Total public transit capital projects $ 171,719 143,191 219,738 4,271 3,571 366,047 908,537 $

Current Year 30,644 10,878 12,236 948 529 2,578 57,813

Total 151,479 123,652 176,030 3,453 1,896 359,197 815,707

$

$

$

$

158

Unexpended Authorizations $ 20,240 19,539 43,708 818 1,675 6,850 92,830

Encumbrances June 30, 2012 $ 10,733 2,837 11,565 64 901 387 26,487

Unencumbered Authorizations June 30, 2012 $ 9,507 16,702 32,143 754 774 6,463 66,343

$

$

$

159

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160

CITY OF CHARLOTTE, NORTH CAROLINA

INTERNAL SERVICE FUNDS Internal service funds are used to account for centralized services provided to City departments and other governmental units and agencies on a cost-reimbursement basis.  Risk Management Fund – Accounts for the general insurance program, claim and loss control services for the City as well as services provided, on a cost-reimbursement basis to other governmental units and agencies in Mecklenburg County.  Employee Health and Life Fund – Accounts for funds contributed by the City and employees for health and life benefits.

161

CITY OF CHARLOTTE, NORTH CAROLINA INTERNAL SERVICE FUNDS COMBINING STATEMENT OF NET ASSETS JUNE 30, 2012 (In Thousands) Employee Risk Health Management and Life ASSETS Current assets: Cash and cash equivalents Receivables - other Due from other funds Prepaid insurance Total current assets Capital assets: Machinery and equipment Less accumulated depreciation Total capital assets, net Total assets LIABILITIES Current liabilities: Claims payable Noncurrent liabilities: Due to participants Compensated absences payable Net OPEB liability Total noncurrent liabilities Total liabilities NET ASSETS Invested in capital assets Unrestricted Total net assets

Total

$

65,438 431 65,869 159 150 9 65,878

$ 20,902 109 503 250 21,764 21,764

$ 86,340 540 503 250 87,633 159 150 9 87,642

37,220 6,439 146 128 6,713 43,933

7,917 7,917

45,137 6,439 146 128 6,713 51,850

$

9 21,936 21,945

13,847 $ 13,847

9 35,783 $ 35,792

162

CITY OF CHARLOTTE, NORTH CAROLINA INTERNAL SERVICE FUNDS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS FOR THE YEAR ENDED JUNE 30, 2012 (In Thousands) Employee Risk Health Management and Life OPERATING REVENUES: Charges for servicesRisk management and safety fees Claims: Employer Employee Other Total claims Premiums Reimbursement from trust Total operating revenues OPERATING EXPENSES: Administration Claims Insurance premiums Depreciation Total operating expenses Operating income NONOPERATING REVENUES: Investment earnings Change in net assets Total net assets - beginning Total net assets - ending

Total

$

2,906 10,605 10,605 5,044 18,555 2,892 6,199 5,077 2 14,170 4,385 347 4,732 17,213 21,945

$ 3,962 37,889 16,100 40 54,029 8,112 17,345 83,448 3,962 64,429 8,112 76,503 6,945 242 7,187 6,660 $ 13,847

$ 6,868 48,494 16,100 40 64,634 13,156 17,345 102,003 6,854 70,628 13,189 2 90,673 11,330 589 11,919 23,873 $ 35,792

$

163

CITY OF CHARLOTTE, NORTH CAROLINA INTERNAL SERVICE FUNDS COMBINING STATEMENT OF CASH FLOWS FOR THE YEAR ENDED JUNE 30, 2012 (In Thousands) Employee Risk Health Management and Life CASH FLOWS FROM OPERATING ACTIVITIES: Receipts from participants Payments to suppliers Internal activity - receipts from other funds Receipts from trust Payments to employees Payments for claims Payments for premiums Net cash provided by operating activities CASH FLOWS FROM INVESTING ACTIVITIES: Interest received Net increase in cash and cash equivalents Cash and cash equivalents - beginning of year Cash and cash equivalents - end of year RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES: Operating income Adjustments to reconcile operating income to net cash provided by operating activitiesDepreciation Change in assets and liabilities: Decrease in receivables Decrease in due from other funds Decrease in prepaid insurance (Decrease) in claims payable Increase in due to participants (Decrease) in compensated absences payable Increase in net OPEB liability Total adjustments Net cash provided by operating activities $

Total

13,632 $ 24,252 $ 37,884 (1,375) (4,001) (5,376) 17,278 42,149 59,427 17,345 17,345 (1,530) (1,530) (15,302) (64,383) (79,685) (7,988) (8,241) (16,229) 4,715 7,121 11,836 383 5,098 60,340 65,438 214 7,335 13,567 $ 20,902 597 12,433 73,907 $ 86,340

$

$

4,385

$ 6,945

$ 11,330

2

-

2

$

605 605 298 298 65 65 (4,821) (187) (5,008) 4,517 4,517 (5) (5) 32 32 330 176 506 4,715 $ 7,121 $ 11,836

164

Statistical Section

CITY OF CHARLOTTE, NORTH CAROLINA

STATISTICAL SECTION This part of the City of Charlotte’s comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the government’s overall financial health. Page Financial Trends – These schedules contain trend information to help the reader understand how the government’s financial performance and well-being have changed over time. ........................... 167 Revenue Capacity – These schedules contain information to help the reader assess the government’s most significant local revenue source, the property tax. .............................................................. 174 Debt Capacity – These schedules present information to help the reader assess the affordability of the government’s current levels of outstanding debt and the government’s ability to issue additional debt in the future. ......................................................................................................................... 180 Demographic and Economic Information – These schedules offer demographic and economic indicators to help the reader understand the environment within which the government’s financial activities take place. .................................................................................................................................... 188 Operating Information – These schedules contain service and infrastructure data to help the reader understand how the information in the government’s financial report relates to the services the government provides and the activities it performs. .................................................................... 190

Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year.

165

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166

CITY OF CHARLOTTE, NORTH CAROLINA NET ASSETS BY COMPONENT LAST TEN FISCAL YEARS (In Thousands) (accrual basis of accounting)

2003 Governmental activities Invested in capital assets, net of related debt Restricted Unrestricted 1 Total governmental activities net assets Business-type activities Invested in capital assets, net of related debt 2 Restricted Unrestricted 1, 3 Total business-type activities net assets Primary government Invested in capital assets, net of related debt Restricted Unrestricted 1 Total primary government net assets $ 2,972,120 236,683 153,994 3,362,797

2004 $ 3,190,678 296,074 157,095 3,643,847

2005 $ 3,522,102 183,105 245,322 3,950,529

2006 $ 3,619,269 165,156 302,310 4,086,735

Fiscal Year 2007 $ 3,808,344 166,634 342,353 4,317,331

2008 $ 3,926,510 183,323 417,217 4,527,050

2009 $ 4,370,958 237,956 384,115 4,993,029

2010 $ 4,443,273 237,147 414,758 5,095,178

2011 $ 4,523,168 233,293 426,405 5,182,866

2012 $ 4,642,043 221,832 421,087 5,284,962

1,386,154 67,003 393,486 1,846,643

1,564,727 67,720 297,963 1,930,410

1,593,752 78,544 440,866 2,113,162

1,783,920 104,035 496,774 2,384,729

2,049,966 143,941 603,245 2,797,152

2,129,484 177,226 790,954 3,097,664

2,393,701 199,530 642,657 3,235,888

2,522,680 245,033 610,896 3,378,609

2,450,425 256,055 837,193 3,543,673

2,493,316 316,914 903,570 3,713,800

4,358,274 303,686 547,480 $ 5,209,440

4,755,405 363,794 455,058 $ 5,574,257

5,115,854 261,649 686,188 $ 6,063,691

5,403,189 269,191 799,084 $ 6,471,464

5,858,310 310,575 945,598 $ 7,114,483

6,055,994 360,549 1,208,171 $ 7,624,714

6,764,659 437,486 1,026,772 $ 8,228,917

6,965,953 482,180 1,025,654 $ 8,473,787

6,973,593 489,348 1,263,598 $ 8,726,539

7,135,359 538,746 1,324,657 $ 8,998,762

1 2 3

2003 through 2009 have been restated for the effects of a prior period adjustment. In 2003, a wastewater treatment plant and major water mains were placed in service. In 2004, construction began on light rail projects. In 2004, unrestricted net assets declined due to an allowance for uncollectible receivables related to US Airways, Inc.

167

CITY OF CHARLOTTE, NORTH CAROLINA CHANGES IN NET ASSETS LAST TEN FISCAL YEARS (In Thousands) (accrual basis of accounting) Fiscal Year 2008

2003 Expenses Governmental activities: Public safety 1 Sanitation General administration Support services Engineering and property management Streets and highways Culture and recreation Community planning and development Interest and other charges 2 Total governmental activities expenses Business-type activities: Water Sewer Storm water Airport Public transit Total business-type activities expenses Total primary government expenses Program Revenues Governmental activities: Fees, fines, and charges for services: Public safety Sanitation General administration Community planning and development Other activities Operating grants and contributions 1 Capital grants and contributions 3 Total governmental activities program revenues Business-type activities: Fees, fines, and charges for services: Water Sewer Storm water Airport 4 Public transit Operating grants and contributions Capital grants and contributions 5 Total business-type activities program revenues Total primary government program revenues

2004

2005

2006

2007

2009

2010

2011

2012

$ 227,189 39,833 35,653 17,737 18,830 73,742 4,019 66,122 33,958 517,083

$ 224,870 39,567 38,530 19,441 23,154 77,422 4,263 57,637 44,745 529,629

$ 241,985 38,997 37,510 19,184 22,711 81,157 7,670 56,460 42,240 547,914

$

258,375 39,726 37,688 18,907 26,828 86,217 8,336 63,773 48,248 588,098

$ 275,078 43,137 42,613 18,814 30,595 91,636 8,208 66,428 46,727 623,236

$

286,271 45,848 45,641 20,326 56,844 94,888 9,146 65,355 47,819 672,138

$

301,866 49,817 48,798 23,719 33,049 103,289 13,914 74,104 45,593 694,149

$

318,576 55,721 38,188 21,066 29,232 116,141 17,834 81,691 64,630 743,079

$

324,920 48,210 38,272 21,454 27,265 119,024 10,085 83,608 57,383 730,221

$

347,380 47,925 45,030 35,427 24,876 114,400 17,856 73,513 55,101 761,508

72,840 95,293 12,507 85,712 72,082 338,434 $ 855,517

87,894 94,013 16,039 90,912 80,320 369,178 $ 898,807

84,017 95,160 18,955 107,033 92,285 397,450 $ 945,364

88,914 114,341 19,569 128,746 110,828 462,398 $ 1,050,496

87,729 140,468 22,242 134,015 121,522 505,976 $ 1,129,212

100,020 141,511 22,613 148,369 146,155 558,668 $ 1,230,806

103,069 160,668 21,652 157,400 155,602 598,391 $ 1,292,540

97,894 157,503 21,565 137,144 155,226 569,332 $ 1,312,411

105,079 141,720 20,233 160,281 151,115 578,428 $ 1,308,649

116,634 132,829 20,742 168,661 160,776 599,642 $ 1,361,150

$

26,800 9,474 13,432 10,383 17,046 44,627 162,917 284,679

$

25,969 9,503 14,786 8,989 14,899 40,243 290,961 405,350

$

23,931 9,897 11,589 12,968 20,158 41,803 286,685 407,031

$

26,480 10,680 10,856 8,309 22,983 49,747 138,597 267,652

$

23,689 10,865 11,694 6,089 25,120 46,231 190,815 314,503

$

24,197 11,277 12,805 10,383 26,844 47,158 172,262 304,926

$

24,692 11,503 15,930 7,954 29,196 63,714 450,950 603,939

$

23,719 11,895 14,853 11,440 26,478 65,051 135,080 288,516

$

24,959 12,148 16,980 4,571 28,610 64,049 102,965 254,282

$

23,761 12,336 16,851 3,290 37,684 78,593 121,645 294,160

68,625 82,539 25,634 81,144 10,043 9,531 162,575 440,091 $ 724,770

75,133 88,610 27,643 72,982 11,068 12,749 84,798 372,983 $ 778,333

76,359 98,298 31,097 120,372 11,751 12,996 144,960 495,833 $ 902,864

100,497 118,737 34,625 161,302 13,747 12,985 173,189 615,082 882,734 168

98,444 127,870 38,286 185,079 14,907 12,880 297,368 774,834 $ 1,089,337

94,320 137,617 40,837 201,259 18,220 19,019 224,739 736,011 $ 1,040,937

90,866 144,033 43,642 190,052 23,132 14,413 119,356 625,494 $ 1,229,433

98,954 151,653 45,782 188,935 21,548 12,803 98,504 618,179 906,695

101,868 163,622 48,589 212,935 25,025 12,923 85,319 650,281 904,563

115,459 177,377 52,075 219,990 26,508 12,586 73,900 677,895 972,055

$

$

$

$

Net (Expense)/Revenue Governmental activities Business-type activities Total primary governmental net expense

$ (232,404) $ (124,279) $ (140,883) $ (320,446) $ (308,733) $ (367,212) $ 101,657 3,805 98,383 152,684 268,858 177,343 $ (130,747) $ (120,474) $ (42,500) $ (167,762) $ (39,875) $ (189,869) $

(90,210) $ (454,563) $ (475,939) $ (467,348) 27,103 48,847 71,853 78,253 (63,107) $ (405,716) $ (404,086) $ (389,095)

General Revenues and Other Changes in Net Assets Governmental activities: TaxesProperty $ 240,926 $ 263,607 $ 265,316 $ Sales 2,6 59,328 64,785 69,658 Utility franchise 2 27,636 27,731 28,372 Occupancy 7 13,611 14,499 15,622 Prepared foods 13,286 14,476 15,595 Business privilege 11,412 9,465 9,503 Municipal vehicle 12,910 6,928 14,423 Grants and contributions not restricted to specific programs 6,432 6,750 11,674 Investment earnings 2 11,791 6,879 11,955 Miscellaneous 2 8,312 8,864 10,653 Special items 8 13,444 Transfers (18,295) (18,655) (18,650) Total governmental activities 387,349 405,329 447,565 Business-type activities: Sales taxes levied for Public transit 2 Investment earnings Miscellaneous Transfers Total business-type activities Total primary government Change in Net Assets Governmental activities Business-type activities Total primary government

280,844 75,938 29,737 19,686 17,491 15,501 14,072 12,896 10,334 8,731 (10,098) (18,480) 456,652

$ 313,274 80,059 31,486 29,361 19,087 15,894 13,848 17,400 26,124 11,161 (18,365) 539,329

$

331,431 87,035 34,278 32,611 20,172 20,703 14,184 20,362 23,056 11,536 (18,437) 576,931

$

345,755 74,434 35,158 27,036 19,226 16,390 15,527 16,756 15,218 9,099 (18,410) 556,189

$

356,913 72,715 36,911 25,999 19,598 16,250 14,388 13,508 7,212 11,683 (18,465) 556,712

$

362,780 73,340 36,804 29,448 20,378 15,430 14,695 16,979 5,369 6,806 (18,402) 563,627

$

377,309 82,730 36,442 32,590 22,523 16,375 15,740 18,513 (16,546) 2,167 (18,399) 569,444

54,002 17,710 78 18,295 90,085 $ 477,434

55,191 58,606 6,657 16,716 (541) (9,603) 18,655 18,650 79,962 84,369 $ 485,291 $ 531,934 $

67,199 31,710 1,494 18,480 118,883 575,535

70,301 50,207 4,692 18,365 143,565 $ 682,894

$

71,212 51,241 (17,721) 18,437 123,169 700,100 $

59,510 29,516 3,685 18,410 111,121 667,310

$

57,870 13,181 4,358 18,465 93,874 650,586

$

57,355 8,842 8,612 18,402 93,211 656,838

$

65,754 6,461 1,260 18,399 91,874 661,318

$ 154,945 191,742 $ 346,687

$ 281,050 83,767 $ 364,817

$ 306,682 182,752 $ 489,434

$ $

136,206 271,567 407,773

$ 230,596 412,423 $ 643,019

$ $

209,719 300,512 510,231

$ $

465,979 138,224 604,203

$ $

102,149 142,721 244,870

$ $

87,688 165,064 252,752

$ $

102,096 170,127 272,223

Notes: 1 In 2012, the City hosted the Democratic National Convention, funded by a Federal grant. 2 2003 through 2009 have been restated for the effects of a prior period adjustment. 3 In 2003 and in 2006, fewer street miles were added. In 2009, more street miles were added due to annexation.
4

In 2004, a $23 million allowance for long-term receivables was recorded due to US Airways bankruptcy. In 2005, the Airport began collecting Passenger Facility Charges. In 2008, the Airport began collecting Contract Facility Charges. 5 In 2004, $105 million in water and sewer assets and $19 million in storm water assets were added due to annexation. 6 In 2004, an additional 1/2 cent sales tax was collected. 7 In 2007, an additional 2 percent occupancy tax was collected to be used for NASCAR Hall of Fame. 8 In 2005, the City sold a civic center. In 2006, the City sold the Charlotte Coliseum.

169

CITY OF CHARLOTTE, NORTH CAROLINA FUND BALANCES, GOVERNMENTAL FUNDS, POST-GASB 54 LAST TWO FISCAL YEARS1 (In Thousands) (modified accrual basis of accounting)

Fiscal Year 2011 2012 General fund Nonspendable - Inventories Restricted - State statute Committed: Captial projects Component unit Assigned: Capital Projects Culture and recreation Community planning and development Unassigned Total general fund All other governmental funds Nonspendable - Perpetual care Restricted: State statute Special obligation debt service Public safety Streets and highways Culture and recreation Community planning and development Committed: Captial projects Culture and recreation Assigned: Debt service Public safety Total all other governmental funds
1

$

951 59,131 3,790 848

$

1,004 61,679 5,674 1,100

94 84,703 $ 149,517

395 875 88,423 $159,150

$

3,120 3,402 10,970 13,190 10,878 121,702 4,291 91,572 1,896

$

3,121

3,592 10,120 9,003 8,359 120,924 5,034 86,946 1,500 216,209 $464,808

206,124 1,927 $ 469,072

In 2011, the City of Charlotte began reporting fund balance classifications as outlined in GASB Statement 54.

170

CITY OF CHARLOTTE, NORTH CAROLINA FUND BALANCES, GOVERNMENTAL FUNDS, PRE-GASB 54 LAST EIGHT FISCAL YEARS1 (In Thousands) (modified accrual basis of accounting)

2003 General Fund Reserved Unreserved 2 Total general fund All Other Governmental Funds Reserved Unreserved, reported in: Debt service funds 2 Capital projects funds 2,3 Special revenue funds Total all other governmental funds

2004

2005

Fiscal Year 2006 2007

2008

2009

2010

$ 40,162 69,199 $ 109,361

$ 39,839 74,896 $ 114,735

$ 40,327 80,978 $ 121,305

$ 44,958 101,340 $ 146,298

$ 43,915 117,699 $ 161,614

$ 34,806 128,793 $ 163,599

$ 31,887 119,197 $ 151,084

$ 54,512 100,740 $ 155,252

$ 40,245 99,870 149,959 63,486 $ 353,560

$ 39,827 100,188 195,174 67,127 $ 402,316

$ 31,555 96,063 79,328 78,443 $ 285,389

$ 21,443 114,946 57,755 95,443 $ 289,587

$ 19,236 138,259 46,641 114,513 $ 318,649

$ 46,787 168,168 58,322 123,126 $ 396,403

$ 35,463 187,409 110,301 142,212 $ 475,385

$ 34,430 195,577 128,574 122,833 $ 481,414

1

In 2011, the City of Charlotte began reporting fund balance classifications as outlined in GASB Statement 54. See preceding table. 2003 through 2009 have been restated for the effects of a prior period adjustment. 3 In 2004, the City received $50 million in private contributions to fund the uptown Arena. In 2005, the City constructed a new uptown Arena.
2

171

CITY OF CHARLOTTE, NORTH CAROLINA CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (In Thousands) (modified accrual basis of accounting)

2003 REVENUES: Property taxes 1 Other taxes 2, 3 Intergovernmental 3, 4 Licenses, fees and fines 3 Investment earnings Private contributions 5 Administrative charges Charges for current services Miscellaneous Total revenues EXPENDITURES: Public safety 4 Sanitation General administration Support services Engineering and property management Streets and highways Culture and recreation Community planning and development Debt servicePrincipal 6 Interest and other charges Capital outlay Total expenditures (Deficiency) of revenues (under) expenditures $ 237,162 87,845 101,487 52,315 11,451 17,646 4,275 7,714 519,895

2004 $ 261,499 95,390 91,393 50,006 6,247 35,096 18,602 5,232 10,366 573,831

2005 $ 262,867 107,202 104,057 48,318 10,625 3,917 19,909 6,365 11,262 574,522

2006 $ 285,746 120,424 106,786 58,971 12,720 5,686 20,175 7,421 13,167 631,096

Fiscal Year 2007 2008 $ 313,435 140,417 102,125 59,141 23,159 5,596 21,685 7,588 13,235 686,381 $ 333,032 153,985 114,400 67,907 25,030 4,545 22,420 8,259 10,698 740,276

2009 $ 344,248 130,187 135,380 62,994 18,662 14,172 25,721 7,477 9,636 748,477

2010 $ 359,279 127,482 137,647 60,330 10,588 7,598 25,446 7,717 8,196 744,283

2011 $ 363,060 133,558 129,561 60,118 4,677 12,230 28,513 9,004 9,173 749,894

2012 $ 378,409 149,564 149,958 61,103 3,544 2,377 29,406 8,325 8,614 791,300

211,635 35,780 33,343 15,346 19,721 40,470 8,439 33,981 45,577 31,671 164,396 640,359 (120,464)

217,265 36,517 38,493 17,799 21,098 42,883 6,318 36,409 48,463 36,367 160,747 662,359 (88,528)

230,386 36,742 36,253 16,650 20,185 43,524 6,649 37,747 47,552 43,476 203,074 722,238 (147,716)

248,382 37,764 36,001 17,336 22,345 44,701 8,258 42,771 46,205 43,171 145,252 692,186 (61,090)

265,133 41,439 41,402 16,971 23,684 47,564 8,352 44,207 44,049 48,366 135,814 716,981 (30,600)

274,361 43,776 43,213 19,011 26,233 48,297 9,551 41,281 55,079 47,629 170,154 778,585 (38,309)

286,542 45,736 46,183 20,069 23,793 52,132 13,478 55,330 74,356 49,710 280,708 948,037 (199,560)

305,527 46,200 37,295 18,523 21,808 58,332 17,798 54,381 68,766 70,900 252,408 951,938 (207,655)

317,255 45,930 36,649 19,895 21,164 63,922 10,068 52,248 64,029 60,296 126,119 817,575 (67,681)

340,387 45,694 41,979 30,848 22,717 56,366 13,632 51,215 72,849 58,606 137,506 871,799 (80,499)

172

OTHER FINANCING SOURCES (USES): Sales of capital assets 7 Bonds issued Commercial paper issued Installment purchases issued Refunding debt issued Premium on debt issuance Private loan 8 Payment to refunded bond escrow agent Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Debt service as a percentage of noncapital expenditures
1 2

9,824 9,031 23,610 25,361 3,968 100,000 60,900 68,196 50,545 164,576 33,137 14,662 18,694 39,357 147,587 159,272 122,655 1,648 8,734 11,027 6,338 694 1,143 (40,238) (168,340) (171,037) (122,007) 109,476 38,675 43,784 59,322 64,365 (127,771) (57,605) (62,434) (76,302) (82,730) 142,841 142,658 37,359 90,281 74,978 $ 22,377 $ 54,130 $ (110,357) $ 29,191 $ 44,378 $

14,081 953 3,160 1,435 1,943 20,000 121,348 190,636 88,192 62,786 64,846 87,491 88,595 33,155 11,674 49,102 393,509 177,485 1,027 3,629 35,845 36,025 987 357 32,558 3,785 270 (12,632) (47,731) (425,542) (209,457) 137,353 82,201 96,718 126,518 111,204 (155,790) (100,611) (115,183) (144,920) (129,603) 118,048 266,027 217,852 49,604 85,868 79,739 $ 66,467 $ 10,197 $ (18,077) $ 5,369

14.7%

15.8%

16.5%

15.4%

15.6%

16.0%

18.3%

19.3%

17.7%

17.6%

In 2004, property taxes increased as a result of annexation. In 2007, an additional 2 percent occupancy tax was collected to be used for NASCAR Hall of Fame. 3 2003 through 2009 have been restated for the effects of a prior period adjustment. 4 In 2012, the City hosted the Democratic National Convention, funded by a Federal grant. 5 In 2004, private contributions were received to fund construction of a new uptown arena. In 2011, private contributions were received to fund construction of the Mint Museum. 6 In 2009, the City early extinguished $21,215 of installment purchases. 7 In 2005, the City sold a Civic Center. In 2006, the City sold the Charlotte Coliseum. In 2008, the City sold land adjacent to Time Warner Cable Arena. 8 In 2007, the City entered into a private loan agreement to finance pre-opening expenses for NASCAR Hall of Fame.

173

CITY OF CHARLOTTE, NORTH CAROLINA ASSESSED AND ACTUAL VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS (In Thousands) Assessed Value Real Property Personal Property Residential Commercial Motor Property Property Vehicles Other $24,689,938 30,562,534 32,193,222 34,291,699 35,342,264 36,900,394 38,328,716 40,557,214 40,862,815 45,757,652 $16,491,203 12,964,970 19,949,428 20,956,252 21,807,395 24,204,284 23,791,182 24,696,512 25,231,676 32,639,066 $ 4,653,404 4,672,776 4,694,427 4,992,208 5,490,370 5,542,576 5,519,009 5,046,368 4,761,822 5,153,731 $ 5,234,389 5,437,659 5,446,359 5,503,912 5,702,971 6,123,051 6,781,909 7,092,141 6,900,642 7,071,716

Fiscal Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Less: Tax-Exempt Property $
1

Total Taxable Assessed Value $ 50,976,624 53,510,095 62,144,012 65,588,595 68,204,862 72,629,697 74,270,368 77,217,662 77,564,331 90,374,113

Total Direct Tax Rate $ 0.4670 0.4200 0.4200 0.4200 0.4586 0.4586 0.4586 0.4586 0.4586 0.4370

92,310 127,844 139,424 155,476 138,138 140,608 150,448 174,573 192,624 248,052

Source: Assessed value data provided by Mecklenburg County. Assessed value is 100% of appraised market value as of the last revaluation date.
1

In 2003, General Statute 105-277.1 increased the exemption for qualified North Carolina residents.

174

CITY OF CHARLOTTE, NORTH CAROLINA DIRECT AND OVERLAPPING PROPERTY TAX RATES LAST TEN FISCAL YEARS (rate per $100 of assessed value) City Direct Rates Fiscal Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
1 2

General $.3805 .3480 .3550 .3570 .3698 .3698 .3698 .3758 .3773 .3600

Debt Service $.0640 .0540 .0470 .0470 .0737 .0737 .0737 .0687 .0687 .0650

Capital Projects $.0225 .0180 .0180 .0160 .0151 .0151 .0151 .0141 .0126 .0120

Total Direct
1

District 1 $.0193 .0174 .0174 .0174 .0174 .0174 .0174 .0174 .0174 .0168

Overlapping Rates Municipal Service Districts District District District 2 3 4 $.0140 .0124 .0124 .0124 .0124 .0124 .0239 .0239 .0239 .0233 $.0289 .0271 .0271 .0271 .0271 .0271 .0386 .0386 .0386 .0358 $.0900 .0668 .0668 .0668 .0668 .0668 .0668 .0668 .0668 .0668

District 5
2

Mecklenburg County $.8397 .7364 .7567 .8368 .8189 .8387 .8387 .8387 .8387 .8166

$.4670 .4200 .4200 .4200 .4586 .4586 .4586 .4586 .4586 .4370

$ .0300 .0300 .0300 .0300 .0300 .0300 .0300 .0300 .0279

In 2004, tax rates decreased reflecting the revaluation of real property. Municipal Service District 5 was established in 2004.

175

CITY OF CHARLOTTE, NORTH CAROLINA PRINCIPAL PROPERTY TAX PAYERS CURRENT YEAR AND NINE YEARS AGO (Dollar Amounts In Thousands) 2012 Taxable Assessed Value Percentage of Total City Taxable Rank Assessed Value 1 2 3 4 5 6 7 8 9 10 1.71% 1.53 1.06 0.57 0.45 0.38 0.35 0.32 0.27 0.20 6.84% $ Taxable Assessed Value 731,724 407,538 805,472 512,625 353,305 211,786 296,262 173,715 144,050 129,232 2003 Percentage of Total City Taxable Rank Assessed Value 2 4 1 3 5 1.44% 0.80 1.58 1.01 0.69 0.42 0.58 0.34 0.28 0.25 7.39%

Taxpayer

Bank of America $ 1,549,033 Wells Fargo/Wachovia Corporation 1,380,710 Duke Energy Corporation 955,780 US Airways Group, Incorporated 513,448 AT&T/BellSouth, Incorporated 404,009 Southpark Mall 339,006 Time Warner Entertainment 316,609 Piedmont Natural Gas 288,930 TIAA-CREF, LLC 245,418 CK Southern/Childress Klein 183,113 Carolina Stadium Corporation Continental General Tire Charlotte Gateway Total Source: Mecklenburg County. $ 6,176,056

7 6 8 9 10

$ 3,765,709

176

CITY OF CHARLOTTE, NORTH CAROLINA PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS (Dollar Amounts In Thousands) Collected within the Fiscal Year of the Levy Percentage of Levy Amount $ 234,603 257,890 261,384 281,975 308,550 332,150 336,270 350,248 355,258 387,890 97.41% 97.37 97.78 97.54 97.50 97.61 97.64 97.97 97.91 97.98

Fiscal Year
1

Taxes Levied for the Fiscal Year $ 240,851 264,853 267,305 289,079 316,477 340,293 344,391 357,494 362,833 395,901

Collections in Subsequent Years $ 6,311 5,821 6,045 5,441 6,130 5,308 5,985 4,732 3,629 $

Total Collections to Date Percentage of Levy Amount 240,914 263,711 267,429 287,416 314,680 337,458 342,255 354,980 358,887 387,890 100.00% 99.57 100.00 99.42 99.43 99.17 99.38 99.30 98.91 97.98

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Source: Mecklenburg County.
1

Pursuant to the North Carolina General Statutes, property taxes levied on July 1, the beginning of the fiscal year, are due September 1; however, penalties do not accrue until January 6. For example, the taxes levied effective July 1, 2011, for the fiscal year 2012, were based on the assessed values listed as of January 1, 2011.

177

CITY OF CHARLOTTE, NORTH CAROLINA ANALYSIS OF CURRENT TAX LEVY CITY-WIDE LEVY FOR THE YEAR ENDED JUNE 30, 2012 (In Thousands)
1

City-Wide Property Valuation Adjusted Original levy: Property taxed at current year's rate Registered motor vehicles at prior year's rate Total Discoveries: Prior year taxes Total property valuation Net levy Current year's taxes collected Current levy collection percentage

Total Levy Property Excluding Registered Motor Vehicles

Rate

Total Levy

1

Registered Motor Vehicles

$ 84,934,831 3,752,434 88,687,265

$ 0.437 $ 0.459

$ 374,218 17,209 391,427

$

367,642 367,642

$

6,576 17,209 23,785

734,503 $ 89,421,768

Various

3,342

3,342

-

$ 394,769 $ 383,447 97.13%

$ $

370,984 363,267 97.92%

$ $

23,785 20,180 84.84%

1

Total levy includes only those taxes levied on a unit-wide basis and therefore, does not include the Municipal Services District.

178

THIS PAGE INTENTIONALLY BLANK.

179

CITY OF CHARLOTTE, NORTH CAROLINA RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS (Dollar Amounts in Thousands, except Per Capita)

Fiscal Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

General Bonded Debt Percentage of Actual Governmental Business-Type Taxable Activities Activities Value of General General Obligation 1 2 Obligation Bonds Bonds Property Per Capita $ 438,538 412,005 381,849 357,901 433,830 405,500 378,322 508,899 479,378 600,753 $ 476,481 447,227 416,522 389,455 362,245 336,213 319,004 297,315 273,168 247,807 1.79% $ 1.61 1.28 1.14 1.17 1.02 0.94 1.04 0.97 0.94 1,540 1,399 1,262 1,153 1,198 1,066 973 1,065 1,029 1,098

Other Governmental Activities Debt Special Obligation Bonds $ 10,970 10,970 10,970 10,970 10,970 10,970 10,970 10,120

Installment Purchases $ 332,130 469,684 472,569 470,397 469,109 441,590 532,448 778,569 740,602 731,521

Commercial Paper Notes $ 60,900 29,559 150,907 293,812 46,462 109,248 24,094

Private Loan $ 729 1,982 2,322 35,045 38,830 39,100

Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements.
1 2

See Schedule of Assessed Value and Actual Value of Taxable Property for value data. See Schedule of Demographic and Economic Statistics for population and personal income data.

180

Other Business-Type Activities Debt Other Federal Commercial Financing Revolving Paper Notes Agreements Loan $ 370,990 142,605 279,209 55,612 $ 12,900 12,425 11,515 10,610 9,715 8,840 7,975 7,120 6,275 5,440 $ 133 Percentage Per Total Primary of Personal 2 2 Government Income Capita $ 2,253,396 2,416,092 2,574,709 3,117,230 3,296,971 3,558,637 3,737,281 4,279,865 4,176,765 4,285,905 13.01% $ 3,792 13.55 3,933 13.65 4,069 15.86 4,810 16.03 4,963 16.97 5,113 16.71 5,213 18.57 5,654 18.07 5,710 18.96 5,547

Fiscal Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 $

Revenue Bonds 973,493 956,433 1,154,248 1,120,755 1,534,538 1,637,693 1,929,751 2,404,213 2,341,545 2,460,023 $

Installment Purchases 19,854 118,318 127,036 325,252 303,671 285,733 207,065 191,272 176,749 166,914

181

CITY OF CHARLOTTE, NORTH CAROLINA DIRECT AND OVERLAPPING BONDED DEBT JUNE 30, 2012 (Dollar Amounts in Thousands)

Net General Obligation Bonded Debt Outstanding Jurisdiction Direct: City of Charlotte Overlapping: Mecklenburg County Total
1

Percentage Applicable to City
2

Amount Applicable to City

$

600,753 1,385,045 1,985,798

100% 77

$

600,753 1,066,485 1,667,238

$

$

1 2

Excludes general obligation bonds being paid from enterprise funds. Percentage of direct and overlapping debt is based on June 30, 2012 assessed valuation of the City of Charlotte ($90,374,113) as compared to the June 30, 2012 assessed valuation of Mecklenburg County ($116,691,859).

182

CITY OF CHARLOTTE, NORTH CAROLINA LEGAL DEBT MARGIN INFORMATION LAST TEN FISCAL YEARS (Dollar Amounts in Thousands)

Fiscal Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
1

Net Debt Debt Limit $ 4,078,130 4,280,808 4,971,521 5,247,088 5,456,389 5,810,376 5,941,629 6,177,413 6,205,146 7,229,929 Outstanding $
1

Legal Debt Margin $ 2,838,721 2,848,883 3,444,548 3,563,204 3,714,749 4,155,634 4,085,845 4,162,292 4,145,970 5,148,621

Ratio of Net Debt Outstanding to Debt Limit 30.39% 33.45 30.71 32.09 31.92 28.48 31.23 32.62 33.18 28.79

1,239,409 1,431,925 1,526,973 1,683,884 1,741,640 1,654,742 1,855,784 2,015,121 2,059,176 2,081,308

Excludes debt not applicable to the limit.

Legal Debt Margin Calculation for Fiscal Year 2012: Assessed value Debt limit (8% of assessed value) Total outstanding general obligation bonded debt $ Amounts due under installment purchases primarily for Convention Center, tourism, capital improvements and equipment Bonds authorized but unissued Less- Water general obligation bonds Outstanding debt, net Legal debt margin

$ 90,374,113 $ 7,229,929 848,560

898,435 428,186 2,175,181 93,873 $ 2,081,308 5,148,621

183

CITY OF CHARLOTTE, NORTH CAROLINA SPECIAL OBLIGATION BOND COVERAGE LAST EIGHT FISCAL YEARS (Dollar Amounts in Thousands)

Fiscal Year 2005 2006 2007 2008 2009 2010 2011 2012
1

Allowable Revenues $
1

Debt Service Revenue Bond Requirement Coverage $ 1,425 1,454 1,454 1,415 1,390 1,385 1,382 1,383 6.4 7.4 8.2 9.2 8.6 11.7 12.8 14.5

9,153 10,781 11,866 13,012 11,956 16,250 17,638 20,033

Allowable revenues as defined by the Revenue Bond Order.

184

CITY OF CHARLOTTE, NORTH CAROLINA WATER AND SEWER REVENUE BOND COVERAGE LAST TEN FISCAL YEARS (Dollar Amounts in Thousands)

Fiscal Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
1

Allowable Revenues $
1

Current Expenses $
1

Net Revenues Available for Debt Service $ 98,015 96,651 117,793 166,382 183,280 177,348 182,500 200,164 224,541 257,993

Debt Service Revenue Bond Requirement Coverage $ 30,896 34,847 34,492 43,478 51,141 67,871 78,258 88,524 102,720 98,227 3.2 2.8 3.4 3.8 3.6 2.6 2.3 2.3 2.2 2.6

176,274 183,722 200,368 257,075 276,399 279,870 284,083 300,153 323,930 360,485

78,259 87,071 82,575 90,693 93,119 102,522 101,583 99,989 99,389 102,492

Allowable revenues and current expenses as defined by the Revenue Bond Order.

185

CITY OF CHARLOTTE, NORTH CAROLINA STORM WATER REVENUE BOND COVERAGE LAST TEN FISCAL YEARS (Dollar Amounts in Thousands)

Fiscal Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
1

Allowable Revenues $
1

Current Expenses $
1

Net Revenues Available for Debt Service $ 18,190 20,833 23,650 29,748 35,469 38,907 41,938 42,486 45,328 47,045

Debt Service Revenue Bond Requirement Coverage $ 4,736 4,721 6,198 7,187 9,476 10,247 10,954 11,022 10,547 10,544 3.8 4.4 3.8 4.1 3.7 3.8 3.8 3.9 4.3 4.5

27,435 32,120 36,400 41,946 48,490 51,606 53,542 54,370 56,656 59,125

9,245 11,287 12,750 12,198 13,021 12,699 11,604 11,884 11,328 12,080

Allowable revenues and current expenses as defined by the Revenue Bond Order.

186

CITY OF CHARLOTTE, NORTH CAROLINA AIRPORT REVENUE BOND COVERAGE LAST TEN FISCAL YEARS (Dollar Amounts in Thousands) Revenue Bond Coverage 1.6 2.2 2.3 3.3 3.9 3.6 3.9 3.3 3.5 3.2
3

Fiscal Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
1 2

Gross Revenues $
1

Net Revenues Application of Available for Debt Service 1 2 Revenues Debt Service Requirement $ 33,344 35,506 40,580 43,761 45,432 52,849 52,835 52,435 57,291 61,711 $ 39,565 51,237 53,876 60,435 71,748 76,185 71,085 69,589 74,275 78,247 $ 24,571 23,013 23,235 18,203 18,285 21,049 18,273 20,957 21,049 24,289

72,909 86,743 94,456 104,196 117,180 129,034 123,920 122,024 131,566 139,958

Gross revenues and application of revenues as defined by the Revenue Bond Order. Net of capitalized interest. 3 Revenue bond coverage as defined by the Revenue Bond Order.

187

CITY OF CHARLOTTE, NORTH CAROLINA DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN CALENDAR YEARS

Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Population 594,176 614,330 632,760 648,139 664,342 695,995 716,874 756,912 731,424 772,627

Personal Income (thousands of dollars) $ 17,317,300 17,827,370 18,860,073 19,655,613 20,570,513 20,970,350 22,365,015 23,046,008 23,109,445 22,605,735 $

Per Capita Personal Income 23,201 23,322 24,251 24,623 24,853 24,281 24,815 24,782 24,267 23,667

Median Age 33.4 33.4 34.7 34.5 35.1 35.1 35.1 35.2 35.2 N/A

Unemployment Rate 6.4% 5.6 5.1 4.4 4.5 5.6 10.2 9.5 10.0 8.8

Source: Data provided by Charlotte Chamber of Commerce. Personal income and median age data are for the County. N/A: Information not available.

188

CITY OF CHARLOTTE, NORTH CAROLINA PRINCIPAL EMPLOYERS CURRENT YEAR AND NINE YEARS AGO

2012 Percentage to Total City Employees Rank Employment 32,500 20,000 18,143 15,000 14,000 10,573 8,700 8,500 7,700 7,684 142,800 1 2 3 4 5 6 7 8 9 10 7.38% 4.54 4.12 3.41 3.18 2.40 1.98 1.93 1.75 1.74 32.43%

2003 Percentage to Total City Employees Rank Employment 15,679 18,000 14,195 12,000 8,140 8,658 10,000 6,418 6,894 6,154 106,138 2 1 3 4 7 6 5 9 8 10 3.96% 4.55 3.59 3.03 2.06 2.19 2.53 1.62 1.74 1.56 26.83%

Employer Carolinas Healthcare System Wells Fargo/Wachovia Corporation Charlotte-Mecklenburg Schools Bank of America Wal-Mart Stores, Incorporated Novant Healthcare Delhaize America, Inc/Food Lion, LLC Lowe's Companies, Incorporated Duke Energy Corporation North Carolina State Government Ruddick Corporation US Airways Group, Incorporated Total

Sources: Number of employees provided by Charlotte Chamber of Commerce. Total city employment provided by NC Employment Security Commission.

189

CITY OF CHARLOTTE, NORTH CAROLINA FULL-TIME EQUIVALENT EMPLOYEES BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS Full-time Equivalent Employees as of June 30 2003 Function/Program Public safety 2 Sanitation General administration Support services Engineering and property management Streets and highways Community planning and development Water and Sewer 3 Storm water Airport 4 Public transit Risk management Total 2,953.50 264.00 240.00 182.00 296.00 433.25 204.00 779.50 68.00 248.00 173.25 23.00 5,864.50 2004 3,002.50 255.00 245.00 183.50 298.00 456.25 210.00 784.50 77.00 248.00 225.25 23.00 6,008.00 2005 3,058.50 247.00 272.00 186.50 299.00 447.25 212.00 802.50 84.00 268.00 242.25 25.00 6,144.00 2006 3,094.50 239.00 295.50 187.50 301.00 437.25 225.00 802.50 92.00 268.00 289.75 25.00 6,257.00 2007 3,179.50 276.00 297.50 191.50 306.00 437.25 227.00 818.50 85.00 268.00 380.75 25.00 6,492.00 2008 3,191.50 290.00 349.00 197.50 314.00 428.50 226.00 813.50 80.00 268.00 392.75 26.00 6,576.75 2009 3,223.50 289.00 350.25 235.00 330.00 429.50 226.00 812.50 86.00 268.00 392.75 27.00 6,669.50 2010 3,392.50 296.00 367.25 223.00 329.00 434.50 233.00 802.50 83.00 268.00 392.75 27.00 6,848.50 2011
1

2012 3,408.50 289.00 373.25 254.50 330.00 431.50 220.00 746.25 84.00 283.00 361.75 27.00 6,808.75

3,388.50 283.00 371.25 246.00 330.00 432.50 229.00 791.50 84.00 266.00 360.75 27.00 6,809.50

Source: Actual position allocations per Budget and Evaluation Department. In 2011, vacant positions were eliminated. 2 In 2009, positions were added due to annexation. In 2010, positions were added due to receipt of an American Recovery and Reinvestment Act grant. 3 In 2012, vacant positions were eliminated as part of the financial stability plan. 4 In 2012, positions were added for public safety at the airport.
1

190

CITY OF CHARLOTTE, NORTH CAROLINA OPERATING INDICATORS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS Fiscal Year 2007 2008

2003 Function/Program Public safety Police physical arrests 911 call volume Fire calls answered Sanitation Refuse collected (in tons) Recyclables collected (in tons) 1 Support services Fleet maintained Streets and highways Miles resurfaced Potholes repaired Community planning and development Housing inspections conducted Affordable housing production Water Number of service connections Average daily consumption (in millions of gallons) Sewer Number of service connections Average daily treatment (in millions of gallons) Storm water Requests for services completed Airport Number of airline arrivals and departures per day Passengers boarding (in thousands) Public transit Scheduled bus/rail miles operated (in thousands) 2 Passengers (in thousands) 2

2004

2005

2006

2009

2010

2011

2012

26,853 27,226 26,163 28,015 27,005 28,875 29,703 968,055 1,030,578 1,066,176 1,081,065 1,093,542 1,069,433 1,008,457 73,190 75,624 78,656 84,348 88,024 90,743 91,309 247,938 33,096 2,833 334 453 2,045 1,005 204,110 101 181,700 87 668 1,016 11,310 10,215 15,528 257,972 32,926 2,845 304 387 2,818 1,051 226,004 105 191,148 81 1,500 1,048 12,166 10,116 16,356 278,598 33,126 2,968 283 376 2,970 1,319 223,559 100 196,906 84 1,863 1,142 13,539 14,541 17,705 281,215 33,036 3,091 195 378 2,993 1,187 232,545 111 205,569 80 1,842 1,204 14,246 15,769 19,157 338,745 33,242 3,137 194 375 3,689 1,640 237,930 114 219,268 86 1,627 1,228 15,712 15,365 19,758 331,806 34,725 3,251 306 288 3,565 1,204 241,637 106 222,887 78 1,885 1,350 17,023 16,304 23,101 311,820 33,213 3,367 319 576 3,749 1,093 242,631 99 223,855 81 2,021 1,289 17,305 17,280 26,034

28,326 27,800 967,020 1,002,790 93,139 98,569 310,376 34,188 3,470 246 895 3,142 1,172 245,854 108 226,978 83 2,266 1,281 17,725 15,617 24,355 315,717 44,520 3,465 325 790 3,196 1,310 248,257 110 229,002 76 1,890 1,359 19,614 15,598 24,901

25,389 1,093,772 95,922 295,347 46,736 3,577 222 768 3,070 1,614 253,557 101 235,157 78 2,862 1,371 20,010 15,925 26,500

1 2

The city began collecting recyclables for all four zones in 2011. Prior years only collected three zones. Light rail service began operations in 2008.

191

CITY OF CHARLOTTE, NORTH CAROLINA CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS 2003 Function/Program Public safety Police stations Patrol units Fire stations Sanitation Collection trucks Streets and highways Miles of street Number of street lights Water Treatment plants Miles of water mains Fire hydrants 1 Sewer Treatment plants Miles of sanitary sewer lines Airport Feet of runway 2 Public transit Motor buses Light rail vehicles
1 2

2004

2005

2006

Fiscal Year 2007 2008

2009

2010

2011

2012

12 993 35 176 2,147 62,470 3 3,294 9,141 5 3,210 26,345 309 -

12 997 36 165 2,104 60,565 3 3,370 18,000 5 3,297 26,345 313 -

12 984 36 170 2,181 60,737 3 3,450 20,000 5 3,369 26,345 321 4

12 990 37 171 2,197 63,258 3 3,528 20,000 5 3,433 26,345 326 4

13 1,072 38 182 2,244 64,644 3 3,850 20,000 5 3,865 26,345 324 9

13 1,087 38 194 2,280 66,204 3 3,929 22,000 5 3,942 26,345 342 16

13 1,169 39 198 2,368 67,345 3 4,025 12,425 5 4,028 26,345 342 16

13 1,251 40 200 2,398 70,000 3 4,064 12,541 5 4,047 35,175 324 20

13 1,267 41 178 2,415 69,695 3 4,094 12,568 5 4,073 35,175 324 20

13 1,352 42 171 2,434 70,862 3 4,206 16,756 5 4,180 35,175 323 20

Beginning 2009, data represents only assets owned and maintained by the city. In 2010, the Airport opened its third parallel runway.

192

Single Audit

CITY OF CHARLOTTE, NORTH CAROLINA SCHEDULE OF EXPENDITURES OF FEDERAL AND STATE AWARDS FOR THE YEAR ENDED JUNE 30, 2012 Federal Catalog Number Current Year Expenditures Cumulative Expenditures

Grantor/Pass-Through Grantor/Program Title FEDERAL AWARDS: Executive Office of the President Direct Programs: High Intensity Drug Trafficking Areas High Intensity Drug Trafficking Areas High Intensity Drug Trafficking Areas Total Executive Office of the President U.S. Department of Commerce Direct Programs: ARRA - Broadband Technology Opportunities (BTOP) U.S. Department of Defense Direct Programs: Military Construction, National Guard U.S. Department of Energy Direct Programs: ARRA - Energy Efficiency and Conservation Block Grant Pass-Through N.C. Department of Commerce / Energy Division: ARRA - State Energy ARRA - State Energy Total Pass-Through N.C. Department of Commerce / Energy Division Pass-Through Triangle J. Council of Governments: ARRA - Conservation Research and Development ARRA - Conservation Research and Development Total Pass-Through Triangle J. Council of Governments

Grant Award Number

Total Grant

95.001 95.001 95.001

G10GA0007A G11GA0006A G12GA0007A

$

140,454 136,166 86,500 363,120

$

118,992 118,992

$

121,374 121,374

11.557

NT10BIX5570088

16,702,490

3,734,213

3,751,304

12.400

W91242-08-2-2104

7,200,000

488,748

6,254,530

81.128

DE-EE0000765

6,780,100

3,645,919

6,197,139

81.041 81.041

DE-EE0000157 Letter

38,042 425,359 463,401

38,042 245,891 283,933

38,042 425,359 463,401

81.086 81.086

TJCOG-CBS-048 TJCOG-CBS-050

10,000 190,977 200,977

190,977 190,977

190,977 190,977

Continued on next page

202

CITY OF CHARLOTTE, NORTH CAROLINA SCHEDULE OF EXPENDITURES OF FEDERAL AND STATE AWARDS FOR THE YEAR ENDED JUNE 30, 2012 Federal Catalog Number 81.128 Current Year Expenditures $ 995 4,121,824 $ Cumulative Expenditures 995 6,852,512

Grantor/Pass-Through Grantor/Program Title Pass-Through Southeast Energy Efficiency Alliance: ARRA - Energy Efficiency and Conservation Block Grant Total U.S. Department of Energy U.S. Department of Health and Human Services Pass-Through N.C. Department of Health and Human Services: Public Health and Social Services Emergency U.S. Department of Homeland Security Direct Programs: Assistance to Firefighters Assistance to Firefighters Assistance to Firefighters Assistance to Firefighters Assistance to Firefighters Rail and Transit Security Rail and Transit Security Rail and Transit Security ARRA - TSA Airport Checked Baggage Inspection System Total Direct Programs Pass-Through N.C. Department of Crime Control and Public Safety: State and Local Homeland Security Exercise Support Urban Areas Security initiative Metropolitan Medical Response System State Homeland Security State Homeland Security State Homeland Security Rail and Transit Security Rail and Transit Security Rail and Transit Security Rail and Transit Security Rail and Transit Security Rail and Transit Security

Grant Award Number 2011-SEEA-010 $

Total Grant 607,005 8,051,483

93.003

BT-07-1106

370,000

755

366,958

97.044 97.044 97.044 97.044 97.044 97.075 97.075 97.075 97.117

EMW-2009-FO-05755 EMW-2010-FO-04187 EMW-2011-FO-09500 EMW-2010-FR-00382 EMW-2011-FR-00617 2009-RA-T9-0082 2010-RA-T0-0038 EMW-2011-RA-00078-S01 HSTS04-10-H-REC109

1,229,712 518,000 80,000 1,680,000 2,714,312 364,373 287,760 130,128 45,431,845 52,436,130

218,295 518,000 1,649,111 269,129 98,900 3,503 252,469 3,009,407

1,183,196 518,000 1,649,111 297,597 98,900 3,503 1,120,756 4,871,063

97.006 97.008 97.071 97.073 97.073 97.073 97.075 97.075 97.075 97.075 97.075 97.075

SRT / USAR 0607-001 2007-GE-T7-0048 2007-GE-T7-0048 2007-GE-T7-0048 2007-GE-T7-0048 2007-GE-T7-0048-8017 2007-RL-T7-0004 2007-RL-T7-0021 2008-RL-T8-0002 2008-RL-T8-0002 2008-RL-T8-0002 2008-RL-T8-0002

141,000 4,970,000 258,145 170,000 50,000 65,000 548,766 414,990 78,593 270,926 250,741 253,462

747,674 30,098 141,994 283,500 17,110 195,353 143,667

137,965 4,252,068 257,982 167,246 47,930 63,209 543,000 414,900 78,052 264,745 195,353 143,667

Continued on next page
203

CITY OF CHARLOTTE, NORTH CAROLINA SCHEDULE OF EXPENDITURES OF FEDERAL AND STATE AWARDS FOR THE YEAR ENDED JUNE 30, 2012 Federal Catalog Number 97.075 97.078 97.078 97.067 97.067 97.067 97.067 97.067 97.067 97.067 97.067 97.067 97.067 97.067 97.067 97.067 97.067 97.067 97.067 97.067 97.067 97.067 Current Year Expenditures $ 115,490 39,440 59,290 57,407 119,956 180,701 775,391 26,342 11,640 1,346,792 1,170 4,328 16,100 4,843 131 1,146,049 31,096 286,648 5,782,210 $ Cumulative Expenditures 115,490 363,508 39,440 24,548 115,256 60,000 179,452 202,758 2,956,493 96,400 11,640 3,163,619 1,170 73,176 238,509 5,063 555 1,486,156 31,096 286,648 16,017,094

Grantor/Pass-Through Grantor/Program Title Rail and Transit Security Buffer Zone Protection Buffer Zone Protection Homeland Security Homeland Security Homeland Security Homeland Security Homeland Security Homeland Security Homeland Security Homeland Security Homeland Security Homeland Security Homeland Security Homeland Security Homeland Security Homeland Security Homeland Security Homeland Security Homeland Security Homeland Security Homeland Security Total Pass-Through N.C. Department of Crime Control and Public Safety Pass-Through Mecklenburg County: Emergency Management Performance Emergency Management Performance Emergency Management Performance Total Pass-Through Mecklenburg County Total U.S. Department of Homeland Security

Grant Award Number 2008-RL-T8-0002 2007-BZ-T7-0034 2009-BF-T9-0028 / 9004 2008-GE-T8-0033 2008-GE-T8-0033 2008-GE-T8-0033 2008-GE-T8-0033 2008-GE-T8-0033 2008-GE-T8-0033 2009-SS-T9-0046 2009-SS-T9-0046 2009-SS-T9-0046 2009-SS-T9-0046 2009-SS-T9-0046 2010-SS-T0-0075 2010-SS-T0-0075 2010-SS-T0-0075 2010-SS-T0-0075 2010-SS-T0-0075 2010-SS-T0-0075 2011-SS-00119 / 2003 2011-SS-00119 / 4001 $

Total Grant 249,441 365,770 194,000 25,000 321,221 60,000 350,000 205,714 4,176,370 311,584 135,714 4,442,600 80,000 100,000 238,509 55,000 51,429 62,000 4,016,970 301,548 267,608 2,132,180 25,614,281

97.042 97.042 97.042

EMPG-2009-37119 EMPG-2010-37119 EMPG-2011-37119

99,815 106,419 62,500 268,734 78,319,145

94,669 21,360 116,029 8,907,646

99,815 21,360 121,175 21,009,332

Continued on next page

204

CITY OF CHARLOTTE, NORTH CAROLINA SCHEDULE OF EXPENDITURES OF FEDERAL AND STATE AWARDS FOR THE YEAR ENDED JUNE 30, 2012 Federal Catalog Number Current Year Expenditures Cumulative Expenditures

Grantor/Pass-Through Grantor/Program Title U.S. Department of Housing and Urban Development Direct Programs: CDBG - Entitlement Grants Cluster: Community Development Block Grants/Entitlement Grants Community Development Block Grants/Entitlement Grants Community Development Block Grants/Entitlement Grants ARRA - Community Development Block Grants/Entitlement Grants Total CDBG - Entitlement Grants Cluster Emergency Shelter HOME Investment Partnerships HOME Investment Partnerships HOME Investment Partnerships Housing Opportunities For Persons With AIDS Housing Opportunities For Persons With AIDS Housing Opportunities For Persons With AIDS ARRA - Homeless Prevention and Rapid Re-Housing Fair Housing Assistance ARRA - Lead-Based Paint Hazard Control in Privately-Owned Housing Total Direct Programs Pass-Through Mecklenburg County: Community Development Block Grants/Entitlement Grants Pass-Through N.C. Department of Commerce: Community Development Block Grants/Entitlement Grants Total U.S. Department of Housing and Urban Development

Grant Award Number

Total Grant

14.218 14.218 14.218 14.253 14.231 14.239 14.239 14.239 14.241 14.241 14.241 14.262 14.401 14.907

B-08-MN-37-0001 B-10-MC-37-0003 B-11-MC-37-0003 B-09-MY-37-0003 E-11-MC-37-0002 M09DC370212 M10DC370212 M11-DC370212 NC19H09-F001 NC19H10-F001 NCH11-F001 S-09-MY-37-002 FF204K114008 NCLHB0412-08

$

5,431,777 5,195,468 4,358,311 1,262,296 16,247,852 210,491 2,841,233 2,819,428 2,475,006 714,063 793,382 813,905 1,930,217 228,919 2,999,903 32,074,399

$

360,799 4,058,766 33,717 475,417 4,928,699 210,491 2,143,666 368,107 547,808 451,923 455,291 9,105,985

$

4,631,990 5,195,468 33,717 1,182,743 11,043,918 210,491 2,705,266 714,063 547,808 1,930,217 2,856,367 20,008,130

14.218

110560

339,000

268,468

268,468

14.218

08-N-1887

2,625,000 35,038,399

59,195 9,433,648

2,570,383 22,846,981

Continued on next page

205

CITY OF CHARLOTTE, NORTH CAROLINA SCHEDULE OF EXPENDITURES OF FEDERAL AND STATE AWARDS FOR THE YEAR ENDED JUNE 30, 2012 Federal Catalog Number Current Year Expenditures Cumulative Expenditures

Grantor/Pass-Through Grantor/Program Title U.S. Department of Justice Direct Programs: Part E - Developing, Testing and Demonstrating Promising New Programs Public Safety Partnership and Community Policing Public Safety Partnership and Community Policing ARRA - Public Safety Partnership and Community Policing Forensic DNA Backlog Reduction Forensic DNA Backlog Reduction Forensic DNA Backlog Reduction Forensic DNA Backlog Reduction Total Direct Programs Pass-Through N.C. Department of Crime Control and Public Safety: Crime Victim Assistance Project Safe Neighborhoods Project Safe Neighborhoods Project Safe Neighborhoods Justice Assistance Coverdell Forensic Sciences Improvement Coverdell Forensic Sciences Improvement AntiGang Initiative AntiGang Initiative Total Pass-Through N.C. Department of Crime Control and Public Safety Pass-Through Maryland State Police: Project Safe Neighborhoods Pass-Through Mecklenburg County: Part E - Developing, Testing and Demonstrating Promising New Programs National Institute of Justice Research, Evaluation, and Development Project Grants Edward Byrne Memorial State and Local Law Enforcement Assistance Discretionary Grants Program

Grant Award Number

Total Grant

16.541 16.710 16.710 16.710 16.741 16.741 16.741 16.741

2008-JL-FX-0488 2007CKWX0044 2008CSWX0014 2009RJWX0062 2008-DN-BX-K116 2009-DN-BX-K150 2010-DN-BX-K165 2011-DN-BX-K507

$

1,162,653 2,884,170 321,350 8,545,950 362,548 351,398 349,200 365,831 14,343,100

$

145,526 435,668 34,580 2,649,311 5,192 218,524 64,614 81,513 3,634,928

$

1,100,115 1,002,645 321,350 7,314,762 362,548 351,398 85,505 81,513 10,619,836

16.575 16.609 16.609 16.609 16.738 16.742 16.742 16.744 16.744

060-1-10-055-AV-169 060-1-10-001-BA-087 PROJ008241 PROJ008261 060-1-10-006-BH-352 2009-CD-BX-0024 PROJ008231 060-1-06-001-BA-123 060-1-06-001-BK-290

151,588 20,000 16,499 29,989 303,912 52,226 83,782 51,165 40,280 749,441

59,371 13,611 4,832 9,591 81,005 (1,632) 166,778

127,740 13,611 182,740 52,226 81,005 51,165 22,386 530,873

16.609

Letter

152,549

83,832

83,832

16.541 16.560 16.580

2009-JL-FX-0285 2011-DN-BX-K525 2012-ZC-BX-0001

900,000 485,777 49,850,000

(115,311) 98,883 13,105,817

250,125 98,883 13,105,817

Continued on next page
206

CITY OF CHARLOTTE, NORTH CAROLINA SCHEDULE OF EXPENDITURES OF FEDERAL AND STATE AWARDS FOR THE YEAR ENDED JUNE 30, 2012 Federal Catalog Number 16.595 16.742 16.753 16.753 16.738 16.738 16.738 16.738 16.803 16.804 16.804 16.804 16.804 Current Year Expenditures $ 290 6,757 119,251 18,993 263,449 366,193 22,497 325,970 1,609,790 185,325 (1) 219,989 3,012,205 16,227,892 20,113,430 $ Cumulative Expenditures 144,771 34,392 50,000 138,048 325,632 1,013,364 546,776 22,497 528,649 3,873,432 474,238 9,975 234,547 7,029,110 20,851,146 32,085,687

Grantor/Pass-Through Grantor/Program Title Community Capacity Development Coverdell Forensic Sciences Improvement Congressionally Recommended Congressionally Recommended JAG Program Cluster: Justice Assistance Justice Assistance Justice Assistance Justice Assistance ARRA - Justice Assistance ARRA - Justice Assistance ARRA - Justice Assistance ARRA - Justice Assistance ARRA - Justice Assistance Total JAG Program Cluster Total Pass-Through Mecklenburg County Total U.S. Department of Justice U.S. Department of Labor Pass-Through N.C. Department of Commerce: Workforce Investment Act Workforce Investment Act Workforce Investment Act Workforce Investment Act Workforce Investment Act Workforce Investment Act Workforce Investment Act Workforce Investment Act Workforce Investment Act Workforce Investment Act Workforce Investment Act Workforce Investment Act Workforce Investment Act Total U.S. Department of Labor

Grant Award Number 2008-WS-QX-0204 170-1-06-001-BD-091 2009-DI-BX-0334 2010-DD-BX-0466 2008-DJ-BX-0318 2009-DJ-BX-0178 2010-DJ-BX-0286 2011-DJ-BX-2961 260680 2009-SB-B9-1703 2009-SC-B9-0063 260651 260681 $

Total Grant 150,000 35,540 50,000 200,000 325,632 1,060,715 940,519 714,123 543,504 4,453,144 483,825 9,975 339,765 8,871,202 60,542,519 75,787,609

17.267 17.267 17.267 17.267 17.267 17.267 17.267 17.267 17.267 17.267 17.267 17.267 17.267

09-2031 09-2050 10-2010 10-2020 10-2030 10-2031 10-2040 10-2050 11-2010 11-2020 11-2030 11-2031 11-2040

2,041,896 390,336 563,261 1,458,581 1,969,696 993,372 1,642,330 478,822 621,993 1,709,729 1,988,674 634,031 1,899,530 16,392,251

144,132 260,697 694,111 830,436 988,372 293,594 56,268 404,111 920,547 982,289 71,404 1,456,472

2,041,896 390,336 563,261 1,458,581 1,969,696 993,372 1,642,330 367,547 404,111 920,547 982,289 71,404 1,456,472

7,102,433 13,261,842 Continued on next page

207

CITY OF CHARLOTTE, NORTH CAROLINA SCHEDULE OF EXPENDITURES OF FEDERAL AND STATE AWARDS FOR THE YEAR ENDED JUNE 30, 2012 Federal Catalog Number Current Year Expenditures Cumulative Expenditures

Grantor/Pass-Through Grantor/Program Title U.S. Department of Transportation Direct Programs: Federal Aviation Administration: Airport Improvement Program Airport Improvement Program Airport Improvement Program Airport Improvement Program Airport Improvement Program Airport Improvement Program Total Federal Aviation Administration Federal Transit Administration: Federal Transit Cluster: Federal Transit - Capital Investment Grants Federal Transit - Capital Investment Grants Federal Transit - Capital Investment Grants Federal Transit - Capital Investment Grants Federal Transit - Capital Investment Grants Federal Transit - Capital Investment Grants Federal Transit - Capital Investment Grants Federal Transit - Capital Investment Grants Federal Transit - Capital Investment Grants Federal Transit - Capital Investment Grants Federal Transit - Capital Investment Grants Federal Transit - Formula Grants Federal Transit - Formula Grants Federal Transit - Formula Grants Federal Transit - Formula Grants Federal Transit - Formula Grants Federal Transit - Formula Grants Federal Transit - Formula Grants Federal Transit - Formula Grants Federal Transit - Formula Grants Federal Transit - Formula Grants

Grant Award Number

Total Grant

20.106 20.106 20.106 20.106 20.106 20.106

3-37-0012-39 3-37-0012-54 3-37-0012-60-2009 3-37-0012-64-2011 3-37-0012-065-2011 3-37-0012-66-2012

$

5,000,000 9,396,900 562,500 16,804,107 3,695,893 20,500,000 55,959,400

$

229,157 167,054 62,990 3,695,893 4,155,094

$

1,891,682 9,396,900 393,088 16,804,107 3,695,893 32,181,670

20.500 20.500 20.500 20.500 20.500 20.500 20.500 20.500 20.500 20.500 20.500 20.507 20.507 20.507 20.507 20.507 20.507 20.507 20.507 20.507 20.507

NC-03-0048 NC-03-0056 NC-03-0082-00 NC-03-0084-00 NC-04-0006-00 NC-04-0018-00 NC-04-0020-00 NC-04-0021-00 NC-04-0044-00 NC-04-0045-00 NC-05-0042-00 NC-90-X403-00 NC-90-X408-00 NC-90-X431-00 NC-90-X472-00 NC-90-X499 NC-95-X014-01 NC-95-X042-01 NC-95-X050-00 NC-95-X052-00 NC-95-X054-00

192,940,000 880,000 36,955,000 24,990,000 11,326,917 10,557,344 5,000,000 380,000 740,772 400,000 696,864 2,147,545 13,294,550 30,569,205 15,892,453 17,161,094 1,040,000 1,000,000 1,500,000 1,261,250 2,760,000

81,617 8,809,937 957,979 6,156 511,702 98,089 740,772 696,864 303,615 207,177 3,212,053 8,552,564 16,762,656 137,849 458,859 660 2,760,000

192,940,000 851,654 23,712,485 957,979 4,480,431 6,156 5,000,000 322,806 740,772 696,864 914,508 13,294,549 25,385,125 14,897,937 16,762,656 137,849 458,859 660 2,760,000

Continued on next page

208

CITY OF CHARLOTTE, NORTH CAROLINA SCHEDULE OF EXPENDITURES OF FEDERAL AND STATE AWARDS FOR THE YEAR ENDED JUNE 30, 2012 Federal Catalog Number 20.507 20.507 Current Year Expenditures $ 2,295,007 46,593,556 504,671 177,961 682,632 421,580 (11,948) 2,858,289 60,506 50,604,615 54,759,709 $ Cumulative Expenditures 17,743,199 322,064,489 1,118,091 644,354 1,762,445 421,580 225,552 2,858,289 60,506 327,392,861 359,574,531

Grantor/Pass-Through Grantor/Program Title Federal Transit - Formula Grants ARRA - Federal Transit - Formula Grants Total Federal Transit Cluster Transit Services Programs Cluster: Job Access - Reverse Commute New Freedom Program Total Transit Services Programs Cluster Clean Fuels Alternatives Analysis ARRA - Capital Assistance for Reducing Energy Consumption Capital Assistance for Reducing Energy Consumption Total Federal Transit Administration Total Direct Programs Pass-Through City of Concord, North Carolina: Federal Highway Administration: Highway Planning and Construction Pass-Through City of Gastonia, North Carolina: Federal Highway Administration: Highway Planning and Construction Pass-Through City of Rockhill, South Carolina: Federal Highway Administration: Highway Planning and Construction Pass-Through N.C. Department of Transportation: Federal Highway Administration: Highway Planning and Construction Cluster: Highway Planning and Construction Highway Planning and Construction Highway Planning and Construction Highway Planning and Construction

Grant Award Number NC-95-X055-00 NC-96-X006-00 $

Total Grant 2,130,000 20,766,306 394,389,300

20.516 20.521 20.519 20.522 20.523 20.523

NC-37-X016-01 NC-57-X005-01 NC-58-0001-00 NC-39-0002-00 NC-77-0001-00 NC-88-0003-00

1,671,099 1,048,454 2,719,553 421,580 225,552 2,858,289 1,000,000 401,614,274 457,573,674

20.205

45200.1

98,710

31,930

54,755

20.205

45200.1

62,816

20,319

34,844

20.205

45200.1

45,125

14,597

25,031

20.205 20.205 20.205 20.205

33861.1.1 / 33861.2.1 / NC C-4405 39225.1.14 / Section 104f 42844.1.1 / BRZ-1003 44055.3.1 / NC C-4955

536,995 1,534,767 160,000 3,011,275

1,955 1,247,147 382,643

536,995 1,247,147 3,011,275

Continued on next page

209

CITY OF CHARLOTTE, NORTH CAROLINA SCHEDULE OF EXPENDITURES OF FEDERAL AND STATE AWARDS FOR THE YEAR ENDED JUNE 30, 2012 Federal Catalog Number 20.205 20.205 20.205 20.205 20.205 20.205 20.205 20.205 20.205 20.205 20.205 Current Year Expenditures $ 32,569 515,086 228,556 181,967 30,053 491,985 249,709 875,619 74,046 4,311,335 $ Cumulative Expenditures 343,610 3,793,640 228,556 181,967 732,506 661,315 249,709 875,619 74,046 11,936,385

Grantor/Pass-Through Grantor/Program Title ARRA - Highway Planning and Construction ARRA - Highway Planning and Construction Highway Planning and Construction Highway Planning and Construction Highway Planning and Construction ARRA - Highway Planning and Construction Highway Planning and Construction Highway Planning and Construction Highway Planning and Construction Highway Planning and Construction Highway Planning and Construction Total Federal Highway Administration Federal Transit Administration: Federal Transit - Metropolitan Planning Grants Capital Assistance Program for Elderly Persons and Persons with Disabilities Total Federal Transit Administration National Highway Traffic Safety Administration: Highway Safety Cluster: State and Community Highway Safety State and Community Highway Safety State and Community Highway Safety Total National Highway Traffic Safety Administration Total Pass-Through N.C. Department of Transportation Pass-Through S.C. Department of Transportation: Federal Highway Administration: Highway Planning and Construction Total U.S. Department of Transportation

Grant Award Number 45051.3.ST28 45090.1.ST1 / 45090.3.ST1-4 45443.3.1 / CMS-1003(105) 45444.1.1 / 45444.2.1 / 45444.3.1 / CMS-1003(106) 45452.3.1 / CMS-1003(111) 45651.3.ST27 46093.1.1 / BRSTP-1003(97) 46285.1 / SPR-OSPR (49) 47510.3.2 / VPPP-1003(99) Section 104f Y-4810 G $

Total Grant 343,610 4,000,000 400,000 1,587,200 187,500 732,506 160,000 1,029,140 400,000 875,619 975,000 15,933,612

20.505 20.513

36230.5.10.6 / 11-08-102 51001.25.1.2-3 / 11-ED-083

34,975 533,140 568,115

26,857 233,959 260,816

34,975 233,959 268,934

20.600 20.600 20.600

52011.5.66 / PT-11-03-03-29 52012.5.8 / PT-2012-03-03-08 PT-12-03-03-23

10,000 10,000 82,875 102,875 16,604,602

5,268 890 64,562 70,720 4,642,871

5,319 890 64,562 70,771 12,276,090

20.205

45200.1

57,431 474,442,358

18,577 59,488,003

31,857 371,997,108

Continued on next page

210

CITY OF CHARLOTTE, NORTH CAROLINA SCHEDULE OF EXPENDITURES OF FEDERAL AND STATE AWARDS FOR THE YEAR ENDED JUNE 30, 2012 Federal Catalog Number Current Year Expenditures Cumulative Expenditures

Grantor/Pass-Through Grantor/Program Title U.S. Environmental Protection Agency Direct Programs: Brownfields Assessment and Cleanup Pass-Through N.C. Department of Enviornment and Natural Resources: ARRA - State Clean Diesel ARRA - Clean Water State Revolving Funds ARRA - Clean Water State Revolving Funds ARRA - Clean Water State Revolving Funds Total Pass-Through N.C. Department of Enviornment and Natural Resources Total U.S. Environmental Protection Agency TOTAL FEDERAL AWARDS STATE AWARDS: N.C. Department of Commerce One NC Fund One NC Fund One NC Fund One NC Fund One NC Fund One NC Fund One NC Fund One NC Fund One NC Fund Total N.C. Department of Commerce N.C. Department of Enviornment and Natural Resources Waste Reduction/Recycling Grant

Grant Award Number

Total Grant

66.818

BF-95462010-0

$

400,000

$

131,086

$

259,414

66.040 66.458 66.458 66.458

2D-95421809-0 E-SRF-T-09-0189 E-SRF-T-09-0190 E-SRF-T-09-0244

80,000 1,440,496 296,546 778,081 2,595,123 2,995,123 715,661,978

(34,964) 99,943 64,979 196,065 113,705,757

79,298 1,416,627 296,546 734,166 2,526,637 2,786,051 481,333,679

O-2008-4863 O-2009-5422 O-2009-5644 O-2009-5986 O-2010-6112 O-2010-6659 O-2010-6865 O-2010-6867 2011-7898

90,000 1,000,000 1,000,000 1,200,000 55,000 350,000 325,000 60,000 50,000 4,130,000

9,000 24,000 6,000 39,000

9,000 24,000 6,000 39,000

4114

30,000

30,000

30,000

Continued on next page

211

CITY OF CHARLOTTE, NORTH CAROLINA SCHEDULE OF EXPENDITURES OF FEDERAL AND STATE AWARDS FOR THE YEAR ENDED JUNE 30, 2012 Federal Catalog Number Current Year Expenditures $ 25,880,223 (5,000) $ 5,426 1,778,483 94,281 73,144 70,210 3,357 193,474 8,584 115,000 (3,205) 56,612 92,596 12,221,847 41,456 231,017 500,000 (28,469) 37,755 250,000 250,000 23,004 122,996 Cumulative Expenditures N/A 306,644 19,339 109,254,003 7,215,087 1,347,500 99,477 70,210 4,372 2,138,632 44,875 115,000 26,805 500,963 56,612 92,596 12,221,847 765,648 348,255 500,000 49,840 1,696,531 37,755 250,000 250,000 23,004 122,996 -

Grantor/Pass-Through Grantor/Program Title N.C. Department of Transportation State Street Aid-Powell Bill Traffic Agreement Apprentice/Intern Program Non Capital State Full Funding Grant Agreement Public Transportation Section 5309 Capital Program Public Transportation Section 5309 Capital Program Public Transportation Rideshare Program Public Transportation Rideshare Program Metropolitan Planning Program Public Transportation Section 5307 Capital Program Congestion Mitigation and Air Quality Public Transportation Section 5307 Capital Program Public Transportation Section 5309 Capital Program Bus Discretionary Public Transportation Section 5309 Capital Program Public Transportation Section 5309 Capital Program Public Transportation Section 5309 Capital Program Public Transportation Section 5309 Capital Program State Maintenance Assistance FY2012 Technology Program Technology Program Technology Program State Aid to Airports Municipal Agreement Municipal Agreement Traffic - Construction by Others Agreement Traffic - Construction by Others Agreement Traffic - Construction by Others Agreement Traffic - Construction by Others Agreement Locally Administered Project Locally Administered Project Locally Administered Project Locally Administered Project

Grant Award Number 32570 34410.1.11 / R-2248 BB 36223.5.15.1 / 11-DG-024 36224.22.2.3 / 05-NS-002 36224.26.1.1 / 09-NS-082 36224.26.2.1 / 09-NS-004 36225.1.9.1 / 11-RS-009 36225.1.10.1 / 12-RS-009 36230.5.10.6 / 11-08-102 36231.14.2.6 / 36231.14.2.7 36231.14.3.3 / 08-09-403 36231.14.6.3 / 08-95-014 36232.1.7.4 / 09-04-021 36232.1.7.8 / 09-04-006 36232.1.9.3 / 11-05-042 36232.1.11.3 / 11-03-018 36232.1.11.4 / 12-04-044 36232.1.11.5 / 12-04-045 36234.6.9.2 / 12-SM-004 36235.2.6.8 / 09-AT-007 36235.2.7.8 / 11-AT-007 36235.2.8.8 / 12-AT-102 36244.17.11.1 37309.1.1 40998 42213.3 42214.3 / SS-4910R 42614.3.1 42712.3.1 43142 43431 45200.1 47510.3.2

Total Grant N/A 306,644 28,169 111,548,573 18,477,500 1,347,500 99,477 103,417 4,372 2,188,223 192,682 115,000 47,500 1,356,774 56,612 1,319,668 92,596 50,000 12,221,847 765,648 923,175 369,000 500,000 49,840 1,696,531 54,000 37,755 61,500 250,000 250,000 150,000 257,285 100,000

$

Continued on next page

212

CITY OF CHARLOTTE, NORTH CAROLINA SCHEDULE OF EXPENDITURES OF FEDERAL AND STATE AWARDS FOR THE YEAR ENDED JUNE 30, 2012 Federal Catalog Number Current Year Expenditures $ 13,084 209,091 42,234,966 $ Cumulative Expenditures 13,084 4,095,529 110,833 575,752 142,353,189

Grantor/Pass-Through Grantor/Program Title Capital Assistance Program for Elderly Persons and Persons with Disabilities Transit Development Traffic Agreement Municipal Agreement Total N.C. Department of Transportation N.C. Housing Trust Fund Housing Urgent Repair Program Housing Urgent Repair Program Total N.C. Housing Trust Fund N.C. Office of Emergency Medical Services Pass-Through Metrolina Trauma Advisory Committee: SMAT III SMAT III Total N.C. Office of Emergency Medical Services S.C. Department of Transportation Locally Administered Project TOTAL STATE AWARDS

Grant Award Number 51001.25.1.2-3 / 11-ED-083 9.9051996 U-2512 BB U-4911 $

Total Grant 26,168 4,100,000 110,833 1,229,910 160,488,199

URP0705 URP08

75,000 75,000 150,000

-

63,230 63,230

Letter Letter

7,300 7,300 14,600

2,892 2,892

5,131 5,131

45200.1

14,358 164,827,157

4,644 42,311,502

7,964 142,498,514

TOTAL FEDERAL AND STATE AWARDS

$

880,489,135

$

156,017,259

$

623,832,193

213

CITY OF CHARLOTTE, NORTH CAROLINA NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AND STATE AWARDS JUNE 30, 2012 1. BASIS OF PRESENTATION The accompanying schedule of expenditures of federal and state awards includes the federal and state grant activity of the City of Charlotte and is presented on the accrual basis of accounting. 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. 2. SUBRECIPIENTS Of the federal expenditures presented in this schedule, the City of Charlotte provided federal awards to subrecipients as follows:

Program Title U.S. Department of EnergyARRA - Energy Efficiency and Conservation Block Grant ARRA - State Energy U.S. Department of Housing and Urban DevelopmentCommunity Development Block Grants/Entitlement Grants ARRA - Community Development Block Grants/Entitlement Grants Emergency Shelter HOME Investment Partnerships Housing Opportunities For Persons With AIDS ARRA - Homeless Prevention and Rapid Re-Housing U.S. Department of JusticeJustice Assistance ARRA - Justice Assistance U.S. Department of LaborWorkforce Investment Act U.S. Department of TransportationJob Access - Reverse Commute New Freedom Program

Federal CFDA Number

Amount Provided to Subrecipients

81.128 81.041 14.218 14.218 14.231 14.239 14.241 14.262 16.738 16.804 17.267 20.516 20.521

$

924,285 18,776 3,241,359 409,960 199,974 1,137,494 1,008,182 484,077 211,444 81,665 6,661,534 15,964 196,536

214…...

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