2021 Annual Comprehensive Financial Report

GREENSBORO C I T Y O F N O R T H C A R O L I NA ANNUAL COMPREHENSIVE FINANCIAL REPORT

F O R T H E F I S C A L Y E A R E N D E D J U N E 3 0 , 2 0 2 1

Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2021

Prepared by the City of Greensboro, North Carolina Finance Department

Marlene F. Druga, NCCLGFO Finance Director Nagesh V. Annambhotla, NCCLGFO Principal Analyst Kathryn K. Hayes, NCCLGFO Principal Analyst Delma Wilson Administrative Assistant Sarah M. Rupp, NCCLGFO Financial Reporting Manager Christina N. Smith, NCCLGFO Financial Analyst Donna H. Craig Financial Analyst Arthur D. Lands, NCCLGFO Accountant Anita B. Wilson, NCCLGFO Accounting Manager Jeanne E. Tyndall, NCCLGFO Business Analyst Emanual V. Hill Business Process Analyst Elizabeth Y. Lewis, NCCLGFO Accountant Evin B. Sims, NCCLGFO Accountant Amanda J. Cartrette, NCCLGFO Treasury Manager James R. Holfield, NCCLGFO Assistant Treasury Manager Jeffery L. Roberts, NCCLGFO Accountant

CITY OF GREENSBORO Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2021

Table of Contents

Exhibit Number

Page

Number

Introductory Section

Letter of Transmittal........................................................................................................................................................................ I

Certificate of Achievement for Excellence in Financial Reporting ........................................................................................... XX V I

Organizational Chart .............................................................................................................................................................. XXV II

City Officials .......................................................................................................................................................................... XXV III

Financial Section

Report of Independent Auditor ....................................................................................................................................................... 1

Management’s Discussion and Analysis ...................................................................................................................................... 2

Basic Financial Statements: I. Government-Wide Financial Statements:

Statement of Net Position ............................................................................................ A-1 ................................................. 3 Statement of Activities .................................................................................................. A-2 ................................................. 5

II. Fund Financial Statements: Balance Sheet-Governmental Funds . ......................................................................... A-3 ................................................. 7 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position ................................................................... A-4 ................................................. 8 Statement of Revenues, Expenditures, and Changes in Fund Balances-Governmental Funds ...................................................................... A-5 ................................................. 9 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities ............................................................................................. A-6 ............................................... 10 Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual - General Fund . ................................................. A-7 ............................................... 12 Statement of Net Position - Proprietary Funds . ........................................................... A-8 ............................................... 20 Reconciliation of the Statement of Net Position of Proprietary Funds to the Statement of Net Position ……………………………..………………...A-9 . ............................................. 24

Exhibit/ Schedule Number

Page Number

Statement of Revenues, Expenses, and Changes in Net Position - Proprietary Funds . .......................................................................... A-10 ............................................... 25 Reconciliation of the Statement of Revenues, Expenses, and Changes in Net Position of Proprietary Funds to the Statement of Activities ........................................................................................... A-11 ............................................... 27 Statement of Cash Flows - Proprietary Funds ........................................................... A-12 ............................................... 28 Statement of Fiduciary Net Position - Fiduciary Funds . ............................................ A-13 ............................................... 32 Statement of Changes in Fiduciary Net Position - Fiduciary Funds .......................... A-14 ............................................... 33 Statement of Net Position - Component Units ........................................................... A-15 ............................................... 34 Statement of Activities - Component Units ................................................................ A-16 ............................................... 35 III. Notes to the Financial Statements . ....................................................................................................................................... 37 Required Supplementary Information: Law Enforcement Officers’ Special Separation Allowance (LEOSSA) Pension Benefit Trust: Schedule of Changes in Net Pension Liability and Related Ratios .............................1............................................... 38 Schedule of Employer Contributions ...........................................................................2............................................... 40 Schedule of Investment Returns . ................................................................................3............................................... 42 Other Postemployment Benefit Plan (OPEB) Trust: Schedule of Changes in Net OPEB Liability and Related Ratios ................................ 4 ............................................... 43 Schedule of Employer Contributions ...........................................................................5............................................... 45 Schedule of Investment Returns . ................................................................................ 6 ............................................... 47 Local Government Employees’ Retirement System: Employer’s Proportionate Share of Net Pension Liability (Asset) and Employer Contributions ........................................................................................7............................................... 48 Combining and Individual Fund Statements and Schedules: Combining Balance Sheet - Nonmajor Funds: Governmental Funds ...................................................................................................8............................................... 50 Special Revenue Funds . .............................................................................................9............................................... 51 Capital Projects Funds . .............................................................................................10............................................... 54 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Nonmajor Funds: Governmental Funds .................................................................................................11............................................... 59 Special Revenue Funds . ...........................................................................................12............................................... 60 Capital Projects Funds . .............................................................................................13............................................... 63 Schedule of Changes in Long-Term Debt-Enterprise Funds and Water Resources Capital Assets ................................................................................... 14 ............................................... 68

Schedule Number

Page Number

Schedules of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual: Special Revenue Funds:

State Highway Allocation ...............................................................................................15............................................... 71 Cemetery....................................................................................................................... 16 ............................................... 72 Hotel/Motel Occupancy Tax ...........................................................................................17............................................... 73 Economic Development .................................................................................................18............................................... 74 Special Tax Districts . .....................................................................................................19............................................... 75 Housing Partnership Revolving .....................................................................................20............................................... 76 Community Development ..............................................................................................21............................................... 77 HOME Program .............................................................................................................22............................................... 79 Workforce Investment Act ..............................................................................................23............................................... 80 State and Federal Grants .............................................................................................. 24 ............................................... 81 State and Federal Grants (ARRA) .................................................................................25............................................... 85 American Rescue Plan Act (ARPA/SLFRF) Fund . ........................................................ 26 ............................................... 86 Emergency Telephone System ......................................................................................27............................................... 87 Debt Service Fund ..............................................................................................................28............................................... 89 Capital Projects Funds: Street and Sidewalk .......................................................................................................29............................................... 91 State Highway Allocation ...............................................................................................30............................................... 92 General Capital Improvements ......................................................................................31............................................... 93 General Capital Improvements II ...................................................................................32............................................... 94 Neighborhood Redevelopment Bond — Series 2005 and 2006A . ................................33............................................... 95 Library Facilities Bond — Series 2008 . ......................................................................... 34 ............................................... 96 Historical Museum Bond — Series 2008 .......................................................................35............................................... 97 Parks and Recreation Bond — Series 2008 .................................................................. 36 ............................................... 98 Economic Development Bond — Series 2008 . .............................................................37............................................... 99 Fire Station Bond — Series 2008 ..................................................................................38............................................. 100 War Memorial Stadium Bond — Series 2008 ................................................................39............................................. 101 Street Improvements Bond — Series 2010 ................................................................... 40 ............................................. 102 Parks and Recreation Bond — Series 2010 .................................................................. 41 ............................................. 103 Housing Bond — Series 2010 ....................................................................................... 42 ............................................. 104 Greensboro Science Center Bond — Series 2010 ........................................................ 43 ............................................. 105 Transportation Bond — Series 2016 . ............................................................................ 44 ............................................. 106

Schedule Number

Page Number

Parks and Recreation Bond — Series 2016 .................................................................. 45 ............................................. 107 Housing Bond — Series 2016 ....................................................................................... 46 ............................................. 108 Community & Economic Development Bond — Series 2016 ........................................ 47 ............................................. 109 Fire Station Bond — Series 2019 .................................................................................. 48 ..............................................110 Perpetual Care Fund .............................................................................................................................................................111 Enterprise Funds: Schedules of Revenues and Expenses-Budget and Actual (Non-GAAP): Water Resources ....................................................................................................... 49 .............................................. 114 Water Resources Bond — Series 2014 .....................................................................50.............................................. 116 Water Resources Bond Fund — Series 2018 . ..........................................................51..............................................117 Guilford County Construction Project ........................................................................52..............................................118 Water Resources Capital Improvement .....................................................................53..............................................119 Water Resources Extension Project .......................................................................... 54 ............................................. 120 Water Resources Bond Fund — Series 2022 . ..........................................................55............................................. 121 Stormwater Management .......................................................................................... 56 ............................................. 12 2 Stormwater Capital Improvement ..............................................................................57............................................. 124 Coliseum ....................................................................................................................58............................................. 125 Performing Arts Fund .................................................................................................59............................................. 127 Performing Arts Center Capital Project ...................................................................... 60 ............................................. 129 Coliseum Capital Improvement Bond ........................................................................ 61 ............................................. 130 Coliseum Capital Improvement . ................................................................................ 62 ............................................. 131 Solid Waste Management . ........................................................................................ 63 ............................................. 132 Solid Waste Capital Improvement . ............................................................................ 64 ............................................. 134 Greensboro Transit Advisory Commission . ............................................................... 65 ............................................. 135 Greensboro Transit Advisory Commission Grand Fund ............................................ 66 ............................................. 137 Parking Facilities . ...................................................................................................... 67 ............................................. 138 Parking Facilities Capital Project ............................................................................... 68 ............................................. 140 Parking Facilities Bond .............................................................................................. 69 ............................................. 141 Internal Service Funds: Combining Statement of Net Position ............................................................................70............................................. 143 Combining Statement of Revenues, Expenses and Changes in Net Position . .............71............................................. 145 Combining Statement of Cash Flows ............................................................................72............................................. 147 Schedule of Changes in Long-Term Debt ......................................................................73............................................. 149

Schedule/ Table Number

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Schedules of Revenues, Expenses, and Changes in Fund Balance-Budget and Actual (Non-GAAP):

Equipment Services ....................................................................................................... 74 ............................................. 151 Technical Services .........................................................................................................75............................................. 153 Technical Services Capital Project . ............................................................................... 76 ............................................. 155 Information Systems ......................................................................................................77............................................. 156 Graphic Services ...........................................................................................................78............................................. 158 Guilford Metro Communications ....................................................................................79............................................. 160 Employee Risk Retention ..............................................................................................80............................................. 162 General Risk Retention . ................................................................................................81............................................. 164 Capital Leasing ..............................................................................................................82............................................. 166 Fiduciary Funds: Statement of Fiduciary Net Position – Fiduciary Funds .................................................83............................................. 169 Statement of Changes in Fiduciary Net Position – Fiduciary Funds . ............................ 84 ............................................. 170 General Capital and Debt Schedules: Schedule of General Capital Assets by Source .............................................................85............................................. 171 Schedule of General Capital Assets by Function and Activity ....................................... 86 ............................................. 172 Schedule of Changes in General Capital Assets by Function and Activity ....................87............................................. 174 Schedule of Long-Term Debt .........................................................................................88............................................. 176 Schedule of Changes in General Long-Term Debt ........................................................89............................................. 178 I. Financial Trends: Net Position by Component ...................................................................................................I............................................. 181 Changes in Net Position, Expenses, Program Revenues, and Net (Expenses)/Revenue . .......................................................II............................................. 183 Changes in Net Position, General Revenues and Total Changes in Net Position ................................................................III............................................. 185 Fund Balances, Governmental Funds . ............................................................................... IV............................................. 187 Changes in Fund Balances, Governmental Funds .............................................................. V............................................. 189 II. Revenue Capacity: Tax Revenues by Source, Governmental Funds . ............................................................... VI............................................. 191 Schedule of Ad Valorem Taxes Receivable ........................................................................ VII............................................. 192 Analysis of Current Tax Levy . ........................................................................................... VIII............................................. 193 Assessed Value and Estimated Actual Value of All Taxable Property ................................. IX............................................. 194 Statistical Section (unaudited)

Schedule/ Table Number

Page Number

Direct and Overlapping Property Tax Rates ......................................................................... X............................................. 196 Principal Property Taxpayers . ............................................................................................. XI............................................. 197 Property Tax Levies and Collections .................................................................................. XII............................................. 199 III. Debt Capacity: Ratios of Outstanding Debt by Type ................................................................................. XIII............................................. 201 Ratio of Net General Obligation Bonded Debt ..................................................................XIV............................................. 203 Computation of Direct and Overlapping Bonded Debt .......................................................XV............................................. 205 Legal Debt Margin Information ..........................................................................................XVI............................................. 206 Pledged Revenue Coverage ............................................................................................XVII............................................. 208 IV. Demographic and Economic Information: Demographic and Economic Statistics . ..........................................................................XVIII............................................. 210 Principal Employers ..........................................................................................................XIX..............................................211 Full-Time Equivalent City Government Employees by Function/Program .........................XX............................................. 213 V. Operating Information: Operating Indicators by Function ......................................................................................XXI............................................. 214 Capital Asset Statistics by Function .................................................................................XXII............................................. 216 Single Audit Section Report of Independent Auditors on Internal Control Over Financial Reporting and On Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards.........................219 Report of Independent Auditors on Compliance For Each Major Federal Program and Internal Control Over Compliance In Accordance with OMB Uniform Guidance and the State Single Audit Implementation Act..............................221 Report of Independent Auditors on Compliance For Each Major State Program and Internal Control Over Compliance In Accordance with Uniform Guidance and the State Single Audit Implementation Act.......................................223 Schedule of Findings and Questioned Costs............................................................................................................................225 Corrective Action Plan...............................................................................................................................................................228 Summary Schedule of Prior Year Findings...............................................................................................................................229 Schedule of Expenditures of Federal Awards...........................................................................................................................230 Schedule of Expenditures of State Awards...............................................................................................................................233 Notes to the Schedule of Expenditures of Federal and State Awards..................................................................................... . . 234

October 31, 2021

The Honorable Mayor And Members of the City Council Greensboro, North Carolina

The Annual Comprehensive Financial Report of the City of Greensboro, North Carolina for the fiscal year ended June 30, 2021, is submitted for your review. This report was prepared by the City's Finance Department and it is the comprehensive publication of the City's financial position and results of operations for the fiscal year ended June 30, 2021, for all funds and component units of the City. Responsibility for both the accuracy of the presented data and the completeness and fairness of the presentation, including all disclosures, rests with City management. To provide a reasonable basis for making these representations, we have 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 of Greensboro’s financial statements in conformity with accounting principles generally accepted in the United States of America (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 frommaterial misstatement. As management, we believe the data, as presented, is accurate in all material respects and is reported in a manner designed to present fairly the financial position and results of operations of the various funds and component units of the City. All disclosures necessary to enable the reader to gain an understanding of the City's financial activities have been included. The City is required by state law to have an annual independent financial audit. The independent auditors’ report on the Basic Financial Statements is included in the Financial Section of this report. The independent auditor concluded, based upon the audit that the financial statements of the City of Greensboro present fairly in conformity with GAAP, in all material respects, the financial position of the City of Greensboro, North Carolina, as of June 30, 2021. GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the Basic Financial Statements in the form of the Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. In conformity with the standards of the Governmental Accounting Standards Board, this report includes all funds of the City, as well as all of its component units. Component units are legally separate entities, for which the City is financially accountable. Discretely presented component units are not considered to be part of the City’s primary operations and, therefore, are reported in total as a separate column to differentiate their financial position, results of operations and cash flows from those of the City. The Greensboro Housing Development Partnership, Inc., the Greensboro Redevelopment Commission, and the Greensboro ABC Board are presented as discrete component units. Additional information on the discretely presented component units can be found in Note I. A.

PROFILE OF THE GOVERNMENT The City of Greensboro is located in central piedmont North Carolina, midway between Washington, D.C. and Atlanta. The Town was incorporated in 1808 and is the county seat of Guilford County. Greensboro has a population of 297,878 and presently covers a land area of approximately 136 square miles. In the past 10 years, population growth has averaged approximately one percent per year. Since 2000, 16,726 acres were added or 26 square miles, an increase of 24 percent. The City is empowered to levy a property tax on the appraised value of all real and certain categories of tangible personal property located in the City. The County is the only other unit levying such taxes within the City's corporate limits. The City is also empowered by state statute to extend its corporate limits by annexation, which occurs periodically when deemed appropriate by the governing council. Approximately 300 acres were annexed during the fiscal year 2020-21. The City operates as a Council-Manager form of government. The Council is the policy-making and legislative body of City government and includes a Mayor and eight Council members who serve four-year concurrent terms. The Mayor and three Council members are elected at-large and the remaining five Council members are elected from districts within the City. The Mayor is a voting member and the presiding officer of the Council. A Mayor Pro Tempore is selected by the Council from its members. The City Manager is appointed by the Council as Chief Executive Officer and is responsible for carrying out the policies and ordinances of the Council and administering the daily operations and programs of the City through appointed department directors and staff members.

The City provides services to its citizens in the following areas: police, fire, transportation, waste collection and disposal, water resources, parks and recreation, libraries, neighborhood development, public improvements and general administration. The City also operates an arena, exhibition building complex, aquatic center, performing arts center, golf course facilities, downtown parking facilities and government access cable television. The budget serves as the foundation for the City’s financial planning and control. Annually, the City Manager presents a proposed budget to Council for review as well as to the citizens of Greensboro for questions and/or concerns. North Carolina General Statutes require all governmental units to adopt a balanced budget by July 1 of each year for all funds for which a budget is required. Activities of the General Fund, Special Revenue Funds (except for Grant Project Funds), Debt Service Fund, and Proprietary Funds are included in the annual appropriated budget. Project-length financial plans are adopted for Grant and Capital Projects Funds. The City Manager may

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make transfers of appropriations within funds and department heads may make transfers of appropriations within a department. Transfers of appropriations between funds, however, require approval by the City Council. Budget to-actual comparisons are provided in this report for each individual governmental fund for which an appropriated annual budget has been adopted. Budgetary control is facilitated by the use of a personnel/payroll data system that requires every position, including applicable fringe benefits, be budgeted. In addition, the North Carolina General Statutes require an encumbrance system and a finance officer’s “preaudit” certification that budgeted funds are available prior to the placement of all purchase orders, contracts and electronic payments. Outstanding purchase orders and contracts are reported as a restriction of fund balance at June 30, 2021 in the category “Stabilization by State Statute.” The appropriated budget is prepared by fund, function (e.g., public safety), and department (e.g., police). A budgetary comparison for the General Fund is presented beginning on page 12 as part of the Basic Financial Statements. Detailed budget to actual comparisons for other funds with annual and project-length budgets are presented in this report beginning on page 71.

COUNCIL BUDGET PRIORITIES Four strategic goals are the primary focus of funding within the City’s budget:

• Economic Development and Job Creation – The City’s approach to economic development focuses on creating an environment that promotes job creation, facilitates private business expansion, and utilizes community development grants, bonds and other resources to advance economic and infrastructure development. PLAN IT GSO is the City’s Comprehensive Plan and guiding document that articulates the vision, goals, growth policy and action plans for Greensboro through 2025. In June 2020, Greensboro City Council adopted the updated plan, now called GSO2040. As part of this plan, the City completed over 150 public events that included dozens of public engagement initiatives ranging from workshops, pop-ups at public events, focus groups and on-line discussions netting over 6,000 individual contributions of input on

the long-term vision and goals for the next twenty years. The Minority-owned and Women-owned Business Enterprise (MWBE) program is a critical element of the City’s economic development initiatives. In February 2019, City Council adopted enhancements to the MWBE Program Plan to intentionally incorporate the utilization of minority and women owned businesses as an integral part of the City contracting process. In 2020, the City achieved MWBE utilization of 15.5% in construction services and 20.5% in professional services. In November 2016, Greensboro citizens authorized $38.5 million general obligation bonds dedicated to economic development

efforts. The Downtown Streetscape Master Plan has been completed through a significant public involvement effort. Design work is nearing completion for downtown streetscape improvements for Greene Street, Summit Avenue, Eugene Street, David Street and Bellemeade Street. These projects are expected to begin construction by end of 2021 and will create a safe, comfortable and well-connected streetscape system. In March 2021, City Council adopted updated economic development guidelines that provide tiered investments to strategic industries and promote jobs with livable wages. The FY 2021-22 budget includes economic development incentive payments to HAECO, Charles Aris, Qorvo, and Centric Brands for existing industry expansion projects that have created at least 954 new jobs and capital investment of $170 million. Investment funds are also included for Self Help Ventures Fund to support the redevelopment of Revolution Mill that has supported a capital investment of more than $82 million. City Council has approved economic development incentive support for The Fresh Market, Syngenta and PACTIV, as well as a new industry to Greensboro, Sunlight Batteries USA, Inc. These new projects have a combined estimated investment of $87 million with at least 124 new jobs and 1,029 retained jobs. The most recent incentive was awarded by City Council on August 17, 2021 to Procter & Gamble Manufacturing Company for $1.8 million to construct a manufacturing facility and create 46 new full-time jobs with an average annual salary of $62,609. The project is expected to generate approximately $110 million in capital investment. On the horizon are the approved incentives for Publix, pending annexation, to develop a $400 million food processing and

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distribution center that will bring more than 1,000 jobs to the area. Construction is underway, and completion is anticipated in 2022. • Public Safety – The Greensboro Police Department (GPD) remains focused on violent and property crime reductions through creative strategies that combine technology with innovative police initiatives, allowing the department to remain at the forefront of its profession. In December 2020, the GPD presented an updated strategic plan to City Council with a focus on the adopted goal of reducing violent crime by 20% by 2022. A central component of the plan includes the implementation of the Violent Crime Reduction Strategy which calls for inter-agency

collaboration, expansion of the priority offender program, and cross-departmental focus on reducing violent crime. The approved plan includes an additional five homicide detectives, an additional crime analyst, and a victim’s advocate. The 2021-22 budget also includes the addition of eight patrol officers in FY 2021-22 and another eight projected for FY 2022-23. The GPD continues to lead robust community engagements by hosting a number of community collaborations geared at increasing awareness and education on critical topics affecting our community. Topics included Opioid Abuse, Active Shooters Responses and Gang Awareness. City funding to support the efforts of the Cure Violence program continue in FY 2021-22, as does funding to support the new Behavioral Health Response program. A behavioral response team was established in January

2021 consisting of six counselors and one team leader. Additional support was established with a dedicated police team to co-respond to calls. Fire facility growth and maintenance continues with the opening of Fire Station #63 in April 2019 and replacement of Fire Station #7 and #56 that are under construction with anticipated completion by late fall 2021. The Public Safety Training Facility’s 60 year-old buildings were replaced during summer 2020 with a new five-story drill tower and three-story burn building, funded by bonds. • Infrastructure and Sustainable Growth – The successful 2016 bond referendum totaling $126 million includes $34.5 million for new parks capital improvements. Five million is programmed for the initial development of the Battleground Parks District, an innovative concept that will integrate the current recreation options at the City’s Country Park with nearby Guilford Courthouse Military Park and the Greensboro Science Center. $3.0 million are allocated to citywide improvements to Greensboro’s many public tennis courts, and $4.5 million are included for further development at Gateway Gardens and Barber Park. For transportation enhancements, $4.5 million are allocated to new transit buses, $5.0 million for new sidewalk and intersection improvements, $500,000 for renovations to the Galyon Depot and $18 million for street resurfacing. In 2016, voters approved $25 million in Housing Bonds to support the development and

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repair of an estimated 1,007 housing units and to leverage approximately $54 million from other funds. To date, $18 million in Housing Bond funds have been committed to 1,100 units with over $100 million in anticipated leverage funds. The City’s proposed FY 2022-2031 Capital Improvements Plan (CIP) totals almost $1.5 billion in identified projects and outlines a future financing plan to maintain our current infrastructure and develop new facilities as needed. The proposed CIP includes $660 million in water and sewer infrastructure projects, nearly 44% of the total capital improvement plan.

• Customer Service, Diverse Workforce, and Fiscal Management – The City’s focus on customer service, a diverse workforce and fiscal stewardship, transparency and accountability ensures the City has the right people doing the right job. The budget continues a variety of employee development initiatives, including MentorMe (employee-to employee mentoring program), Toastmasters, and development programs, such as Leadership Edge and Leadership Prime, designed for employees wishing to pursue supervisory roles in the organization. The FY2021-22 budget includes a 3.0% average

merit increase for all eligible employees. The recommended budget includes funding to advance sworn police and fire personnel to the appropriate next steps in the Public Safety Step Program. Finally, this budget maintains external competitiveness by adjusting general and executive pay range structures by two percent.

FACTORS AFFECTING FINANCIAL CONDITION A. Local Economy

Greensboro's diverse economy is attributed to its unique blend of trade, manufacturing and service businesses as well as its universities and colleges. Local industry is characterized by the production of a wide range of products, including aircraft, machinery, electronics equipment, textiles, apparel and tobacco, and expansion in the aircraft maintenance, transportation and financial services industries. Five of the top 50 companies on the Fortune 500 list have operations in the Greensboro area; these include UnitedHealth Group, AT&T, UPS, FedEx and Procter & Gamble. This area experiences an excellent market location that has access to all major domestic and international markets from Interstate Highways 40, and 85 and the Piedmont Triad International Airport (PTIA). Construction is underway for a new interstate system (I-73) that will span North Carolina, joining Detroit and Charleston, including Greensboro en route. In northern Greensboro, U.S. 29, between Danville and Greensboro, has also been designated as Interstate 785. Located at the center of North Carolina and the midpoint of the East Coast, Greensboro is strategically positioned at the hub of a dynamic region for major transportation, logistics, manufacturing and service industries. In addition, half of the U.S. population is within 650 miles (1,046 km.), another major advantage. With the significant presence of Federal Express and Honda Aircraft, the region continues to build on the strengths of its geographic location positioning the Triad as a global “aerotropolis” and logistics center on the U.S. East Coast. The Greensboro Urban Loop , a 44-mile state-constructed beltway around Greensboro, is in progress at a cost of approximately $1 billion, funded by the N.C. Legislature. The Southern, Eastern and Western portions of the loop have been completed and are currently open. The Northern section, with just 3.3 miles remaining, will

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conclude the entire project with anticipated completion by 2023. The Urban Loop beltway is comprised of four major interstates; 73, 85, 785 and 840. This connectivity significantly contributes to the distribution and logistics hub in the region. Major industrial and business parks , with fully developed infrastructure, continue to develop in and around PTIA. Existing office and industrial facilities located within 2½ miles of the I-40 airport exit include more than three million square feet of office, office/showroom, warehouse/distribution, light industrial and hotel space. The Federal Express air and ground facilities continue to generate more demand for office and other tenants associated with operations that need to be close to a logistics hub. Eight tracks of developable land, either with current or future runway access are being offered, with all utilities to the sites already installed. The developed area adjoining PTIA is anticipated to produce nearly 18,500 jobs, $3.2 billion in economic impact and more than $113 million annually in state and local tax revenue. City leaders continue to work with economic development officials in the region related to development of potential “ Megasites ”, typically with 1,000 acres or more to accommodate manufacturing and industrial facilities, including emerging technology, logistics and life science sectors. In particular, three sites within twenty-five miles of Greensboro range in size from 1,000 to 1,825 acres. In June 2016, the 1,825 acre Greensboro-Randolph megasite received industrial site certification designating the site as construction ready for a large-scale industrial user. The City of Greensboro has been working to provide needed water and sewer infrastructure to the Randolph site. The first phase of this project began in December 2020, and is anticipated to be complete by early 2022. In November 2020, the Greensboro-Randolph Megasite Foundation exercised its option to acquire 20 acres. The Chatham-Siler City Advanced Manufacturing site received official state certification as a megasite in June 2014 and was selected to participate in Duke Energy’s Site Readiness Program that helps officials recruit major industries. In support of these initiatives, a nonprofit foundation, Golden Leaf, awarded $11 million in grant funding - $7 million allocated to water and sewer line construction for the Greensboro-Randolph Megasite, and $4 million for water and wastewater infrastructure at the Chatham Siler Megasite. A third megasite, PTI Aerospace Center at Piedmont Triad International Airport, offers 1,000 acres of airport property ready for development. Piedmont Triad International Airport (PTIA) , located just eight miles from the City’s downtown area, is a major commercial and private aviation center that is owned and operated by the Piedmont Triad Airport Authority (the “Authority”). Situated along an aerospace-heavy corridor of Interstate 40, PTIA is at the center of a job-rich region for aircraft, manufacturing, aircraft parts supply and aviation repair and maintenance. The Piedmont Triad is home to nearly 200 aerospace companies including; Honda Aircraft, HAECO Americas, Cessna, North State Aviation, B/E Aerospace, Honda Aero and Federal Express. The Authority provides a complete line of aviation services, including air taxi service, aviation training and aircraft sales. Major passenger carriers include Delta, United, American, Allegiant and Spirit. For the calendar year 2019, PTIA boarded 1,078,247 passengers, making 2019 the first time PTIA surpassed 1 million since 2008, when 1,109,100 passengers were boarded. The number of people flying from PTIA in 2020 declined by 65% to 378,313 passengers due to the pandemic. Cargo traffic at the airport was down 17% for 2020 as compared to an increase of 36% in 2019. Passenger and cargo traffic for the eight months ended August 31, 2021 were up 32% and 82%, respectively, compared to the same period last year, reflecting growing recovery from the Covid 19 pandemic. PTIA’s recent capital improvement projects include; jetway foundation construction and installation of five jetways with enclosed pedestrian bridges from terminal gate locations to aircraft purchased for approximately $1.1 million, rebuilt overhead roadway at the departure level of the passenger terminal and an upgraded parking payment system. In addition, work continues on the new control tower, scheduled for completion in spring 2022. PTIA ranked as one of USA Today’s Top 10 Small Airports in the U.S. for both 2020 and 2021. The ranking compares U.S. airports that serve fewer than 10 million passengers annually while excelling in commercial flights, easy access and valuable services. The aviation industry is one of the critical business sectors of the Triad’s economic development strategy. With the ongoing collaboration of the public and private sector organizations and the educational community, the Triad is poised for strong future growth in aeronautics. Local aviation-related businesses draw heavily from

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the aviation workforce-training program at Guilford Technical Community College (GTCC) whose program has grown steadily in recent years. In 2014, GTCC completed a $10 million facility on a 23-acre campus at PTIA called Aviation III, to house its aviation management and pilot programs as well as customized industry training. The addition of the new facility allows GTCC to expand training to approximately 900 students each semester. GTCC’s aviation program is one of the largest in North Carolina and serves as a model for other community colleges. The college recently added a fifth degree program to GTCC’s aviation training, aero structures manufacturing and repair, that will prepare students for specialization in an industrial and advanced manufacturing setting.

Honda Aircraft Company , a division of Honda Motor Company, has invested $155 million to establish its world headquarters at the 133-acre campus at PTIA in Greensboro and a total capital investment in its North Carolina operations of more than $245 million. With manufacturing, testing, training, maintenance and customer service facilities, the company is headquartered at its PTIA campus. Following 12 years of

design and testing, the HondaJet HA-420, a lightweight seven passenger jet, received all required FAA certifications and sold its first HondaJet in 2015. Subsequently, HondaJet has received certifications worldwide and has established a dealer and sales network to provide service and support globally. In 2018, HondaJet unveiled and began delivery of their latest aircraft, the HondaJet Elite. The new aircraft provides improved flight range with an auxiliary fuel tank, increased payload, reduced vibration and cabin noise, enhanced avionics, and greater cabin space. In September 2020, the company completed construction of a $24.3 million, 83,000 square-foot new Wing Production and Service Parts Facility at PTIA where it has approximately 1,000 employees. The facility houses the new wing-assembly process for the HondaJet Elite, said to be the fastest, farthest and highest-flying plane in its class. The facility also provides capacity for more wings to be assembled concurrently, additional storage and distribution of service parts, a paint booth and office space. In 2019, the company embarked on diversification of uses for the HondaJet Elite with the inclusion of medevac configurations in air ambulances. For 2020, HondaJet was named the most-delivered jet in its category for the fourth consecutive year by the General Aviation Manufacturers Association, delivering 31 aircraft to customers around the globe, bringing the total number of manufactured aircraft to over 170 since it started production. In 2018, two former Honda Aircraft executives created Jet It , a Greensboro-based business providing fractional ownership of HondaJets to clients. Jet It has grown its workforce from an initial three to 73 employees and is beginning the second phase of its business model, JetClub, operating in Europe and the Far East. Within the first 18 months, Jet It acquired and put into service six HondaJet Elite aircrafts. Its fleet has grown to 12 HondaJets. In 2021, Jet It became a launch customer of Denver, Colorado-based Bye Aerospace to operate the first fleet of electric aircraft in North America. Jet It signed a purchase agreement for four eFlyer 800, a seven passenger, all-electric twin prop aircraft, and four eFlyer four-seat aircraft. By 2025, the company plans to have electric-powered planes in the sky. Key factors of Jet It’s business are private air travel, fractional ownership of an aircraft and increased health security of private terminals, aircrafts and reduced number of passengers. HondaJets are assembled at Honda Aircraft’s headquarters and manufacturing facility at PTI airport. Jet It ranks among Honda Aircraft’s largest purchasers of HondaJet Elite aircrafts. HAECO Americas’ , formerly known as TIMCO Aviation Services, corporate headquarters is located at PTIA. HAECO provides aircraft maintenance, repair and overhaul services, and acquired TIMCO Aviation services for $388 million in 2014. The company has over 2,000 employees at its five-hangar footprint at PTIA as well

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