CAFR 2016

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, 2016. 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 of the City of Greensboro exceeded its liabilities at the close of the fiscal year by $1.053 billion (net position) . The City’s net position increased by $28.6 million (2.8%) compared to FY 2015, restated. The prior year net position includes a prior period adjustment addition of $408 thousand due to implementation of Governmental Accounting Standards Board (GASB) Statement No. 73, applying new pension standards to assets not under the scope of GASB 68. The governmental net position increased by $2.8 million (0.8%) and the business-type net position increased $25.8 million (3.9%) primarily due to increases in certain general revenues above plan, water rate increases effective July 1, 2015 and certain cost sharing reimbursements from Guilford County for utility projects outside of the City limits, along with other cost containments.  The governmental activities program revenue was lower than last year’s results by approximately $3 million at $58.6 million. Approximately $2.8 million of the difference can be attributed to the elimination of business privilege license fees by the General Assembly. General governmental revenues increased by $4.4 million (1.9%) and include increased property tax receipts, higher local option sales tax receipts and increased collections from state-shared utility sales tax. The property tax rate remained the same as last year at $.6235 per $100 of assessed valuation. Base property values are projected to grow at 1.5% in FY 2017. Sales tax receipts increased 6.1% or approximately $2.7 million due to improved economic conditions in the region. Investment earnings were the equivalent of 1.38 cents on the property tax rate compared to 1.23 cents last year. For budgeting purposes, management projects interest earnings to remain flat for the near- term planning cycle for conservatism. In the City’s business-type activities, total revenues decreased by about $500 thousand despite revenue increases of $7.5 million partially generated from rate increases, offset by decreased event revenue in the War Memorial Coliseum Complex operation.  During the year, the City’s governmental expenses at the entity-wide level were $290.6 million, an increase of $19 million or 7% more than last year, primarily due to increased street and sidewalk improvements and additional public safety expenditures. In all, expenses increased $21.6 million or 5.3% citywide with approximately $2.6 million of the increase affecting business-type fund activity, or 1.8%. Increased expenditures in the proprietary funds of $10.3 million, primarily for water and sewer operations, were offset by decreased expenditures of $7.7 million in the War Memorial Coliseum Fund.

2a