2019 Comprehensive Annual Financial Report (CAFR)

NOTES TO THE FINANCIAL STATEMENTS CITY OF GREENSBORO, NORTH CAROLINA JUNE 30, 2019

I. Summary of Significant Accounting Policies The accounting policies of the City of Greensboro (City) and its component units conform to US Generally Accepted Accounting Principles (“GAAP”) as applicable to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The following is a summary of the more significant accounting policies of the City: A. The Financial Reporting Entity The City is a municipal corporation governed by an elected Mayor and eight–member Council. As required by GAAP, these financial statements present the City (the primary government) and its component units (entities for which the City is considered to be financially accountable). Criteria used to establish financial accountability include appointment of a voting majority of the component unit’s governing board and imposition of will or a financial benefit/burden relationship, fiscal dependency or other significant operational and financial relationships. 1. Blended Component Unit Blended component units, although legally separate entities, are, in substance, part of the City’s operation. Financial amounts from these units are combined with amounts of the primary government. The Greensboro Center City Corporation (GCCC) assists the City in financing, acquiring and constructing public facilities and in purchasing equipment. The sole purpose of the GCCC is to provide a funding source for City assets, lease the assets to the City and to use the lease payments to repay the debt. The corporation has no other operations. The GCCC’s twelve member governing board is appointed by the Mayor. A financial burden exists, as the City is required to transfer funds to the GCCC in an amount sufficient to pay the scheduled debt service on GCCC certificates of participation. The GCCC’s cash and debt are considered with assets of the Coliseum Enterprise Fund and general government liabilities for financial statement purposes. 2. Discretely Presented Component Units The component unit column in the basic financial statements includes the financial data of the City’s other component units. The units are reported in a separate column to emphasize that they are legally separate from the City. Separate statements of net position and activities for the component units are presented in Exhibits A-15 and A-16. Greensboro Housing Development Partnership, Inc (GHDP) provides first-time buyers, with low to moderate income, affordable financing. GHDP also serves as a conduit to sell surplus land to builders to develop affordable housing for City citizens. The City appoints the voting majority of the Board and guarantees support for any deficits for certain programs and loan obligations. The City also influences the operations of the GHDP by providing loan initiatives and rehabilitation of properties. Related transactions of this partnership are reflected in the City records in a Special Revenue Fund. The Greensboro Redevelopment Commission (Commission) conducts studies, formulates plans, purchases and sells properties and oversees redevelopment projects in the City. The Commission performs legislative duties such as defining a redevelopment area and carries out delegated activities, subject to the consent, approval and policies of the City. The governing board is composed of five residents of the City who are appointed by City Council. No property transactions may be taken without City approval. City Council must agree before any expenditures or contracts are made by the board or any debt entered into for which the City could be liable. Budgets for the Commission are set by City Council and any changes require City approval through normal budget procedures. The City provides all staff and other resources necessary for operations and administration of the Commission. All funding is derived from City sources and federal grants and loans. The Commission’s inventory of properties and associated notes receivable are recorded as “Assets Held for Resale” and “Accounts, Notes and Mortgages” and “Unearned Revenues”. The Commission’s financial activity is recorded in the Housing Partnership Revolving Fund. The Commission is considered to almost exclusively benefit the City even though it does not provide services directly to it.

37a