2020 Comprehensive Annual Financial Report

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, 2020. 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 $1.14 billion (net position) . The City’s net position increased by $72.1 million (6.8%) compared to FY 2019. The governmental net position increased $17.0 million (7.2%) primarily due to increased transportation revenue related to capital grants and business-type net position increased $55.0 million (6.6%) primarily due to private donations related to the construction of the Steven Tanger Center for the Performing Arts. Growth in assessed property value along with the increase in the property tax rate also attributed to the increase in the city’s net position.  The governmental activities program revenue was higher than last year’s results by approximately $15.4 million at $78.5 million. The difference is primarily related to FY 2020 transportation capital grants, an increase over prior year of $12.2 million mainly coming from an increase in street and sidewalk projects in FY 2020. General governmental revenues increased by $11.2 million (4.2%), primarily due to increased property tax. The property tax rate for the FY 2020 adopted budget is $.6625 per $100 assessed valuation, three cents higher than the FY 2019 budgeted rate. Base property values are projected to grow at 1.87% in FY 2021. Sales tax receipts increased by 2.95% or approximately $1.7 million not showing signs that sales were negatively impacted by the effects of the coronavirus pandemic during the 4th quarter of FY 2020. Investment earnings were the equivalent of 3.28 cents on the property tax rate compared to 2.85 cents last year. For budgeting purposes, management projects interest earnings to stay flat for the near-term planning cycle for conservatism. In the City’s business-type activities, total revenues increased by about $31.3 million primarily due to private donations received for the Steven Tanger Center for the Performing Arts.  During the year, the City’s governmental expenses at the entity-wide level were $331.5 million, an increase of $5.2 million or 1.6% more than last year, primarily due to increased expenses related to the demolition and the reconstruction of two fire stations as well as increased expenses related to the coronavirus pandemic. In all, expenses increased $17.1 million or 3.3% citywide with approximately $11.9 million of the increase affecting business-type activity. Increased expenditures in the proprietary funds were primarily due to the coliseum’s increased maintenance and operations from larger events and initial costs for the new Steven Tanger Center of the Performing Arts facility. Water operations also had an increase in expenditures due to debt issuance cost relating to the issuance of bonds and bond anticipation notes. Of the City’s various

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