2019 Comprehensive Annual Financial Report (CAFR)

MANAGEMENT’S DISCUSSION AND ANALYSIS As management of the City of Greensboro, we offer readers of our financial statements this narrative overview and analysis of the financial activities of the City of Greensboro for the fiscal year ended June 30, 2019. The Management Discussion and Analysis (MD&A) section is designed to assist the reader in focusing on significant financial issues, provide an overview of the City’s financial activity, identify changes in the City’s financial condition, identify material deviations from the financial budget, and identify individual fund issues or concerns. Since the MD&A is structured to focus on the current year’s activities, resulting changes and currently known facts, we encourage readers to consider the information presented here in conjunction with the transmittal letter, which can be found beginning on page I of this report, and the City’s financial statements, which follow this section. FINANCIAL HIGHLIGHTS  The assets and deferred outflows of the City of Greensboro exceeded its liabilities and deferred inflows at the close of the fiscal year by $1.07 billion (net position) . The City’s net position increased by $89.0 million (9.1%) compared to FY 2018, restated. The prior year net position includes a prior period restatement increase of $57.8 million primarily due to the inclusion of the newly formed Greensboro Transit Advisory Commission (GTAC) in the FY 2019 financial statements whereby its predecessor, Greensboro Transit Authority, was reported as a separately presented discrete component unit for FY 2018 and prior. The governmental net position decreased ($13.2) million (5.6%) primarily due to increased bond fund expenditures related to the 2016 referendum and the business-type net position increased $102.2 million (12.3%) primarily due to the inclusion of GTAC, the increase in investment income due to the increase in interest rates and increase in cash and investments due to the issuance of Limited Obligation Bonds and General Obligation Bonds in fiscal year 2019. Growth in assessed property value and the increase in local sales tax also attributed to the increase in the city’s net position.  The governmental activities program revenue was lower than last year’s results by approximately $8.9 million at $63.1 million. The difference is primarily related to FY 2018 donations from Greensboro Beautiful, and the transfer of a GTA facility to our Parks and Recreation department. General governmental revenues increased by $16.3 million (6.4%), due to increased investment income from an increase in cash from the 2018 General Obligation bond, and increased property and local option sales tax. The property tax rate remained the same as last year at $.6325 per $100 of assessed valuation. Base property values are projected to grow at 1.88% in FY 2020. Sales tax receipts increased 7.8% or approximately $4.1 million due to improved economic conditions in the region and an expanded sales tax base. Investment earnings were the equivalent of 2.85 cents on the property tax rate compared to 1.99 cents last year. For budgeting purposes, management projects interest earnings to modestly increase for the near-term planning cycle for conservatism. In the City’s business-type activities, total revenues increased by about $50.8 million primarily due to the inclusion of GTAC and an increase in Coliseum revenue which was offset by additional expenses. During the year, the City’s governmental expenses at the entity-wide level were $326.3 million, an increase of $14.8 million or 4.8% more than last year, primarily due to increased transportation and neighborhood development and interest and fees on long term debt expenditures due to the issuance of the 2018 General Obligation Bonds. In all, expenses increased $52.4 million or 11.1% citywide with approximately $37.6 million of the increase affecting business-type activity. Increased expenditures in the 2a