2022 Annual Comprehensive 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, 2022. 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 $1.21 billion (net position) . The City’s net position increased by $40.4 million (3.5%) compared to FY 2021. The governmental net position increased $26.3 million (9.3%) primarily due continued increases in local sales tax revenue, culture and recreation and neighborhood development revenue related to federal operating grants. Business-type net position increased $14.1 million (1.6%) primarily due to the return of operations and events following the peak of the COVID-19 pandemic. Events at the Coliseum resumed, and transit resumed operations in FY 2022. Transit also received $16.1 million more in operating and capital grants than in FY 2021.  The governmental activities program revenue was higher than last year’s results by approximately $21.8 million at $104.6 million. The difference is primarily related to FY 2022 culture and recreation and neighborhood development operating grants, an increase over prior year of $17.1 million mainly coming from emergency rental assistance and Shuttered Venue Operators Grants provided in FY 2022. General governmental revenues increased by $11.2 million (3.9%), primarily due to increased sales tax collected. Sales tax receipts increased by 20.0% or approximately $13.2 million for FY 2022 due to continued unexpected strong consumer spending. The property tax rate remained the same as last year at $.6625 per $100 assessed valuation. Base property values are projected to grow at 23.8% in FY 2023 following revaluation conducted by Guilford County. Investment earnings (excluding changes in fair market value) were the equivalent of 1.01 cents on the property tax rate compared to 1.19 cents last year. For budgeting purposes, management projects interest earnings to have modest growth for the near-term planning cycle for conservatism. In the City’s business-type activities, total revenues increased by about $85.6 million from the prior year. The increase comes primarily from Coliseum events resuming after the peak of Covid-19. Transit also received additional grant funding from federal and state operating and capital grants such as Coronavirus Response and Relief Supplemental Appropriations Act grant and American Rescue Plan Act funding.  During the year, the City’s governmental expenses at the entity-wide level were $366.9 million, an increase of $27.3 million or 8.0% more than last year, primarily due to continued increases of expenses related to emergency rental assistance, (assisting households that are unable to pay rent or utilities) as well as increased expenses related to culture and recreation returning back to normal programing after Covid-19 and increased spending on the Battleground Park District project and public safety expenses increased for added staffing and support. In all, expenses increased $100.4

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