CAFR 2016

Economic Factors and Next Year’s Budgets and Rates The Greensboro area economy continued to rebound in several areas including building permit and housing activity. The dollar value of residential building permits authorized in Q2 of 2016 was up 12.4% over 2015. National indicators report a 10.2% increase in the number of permits issued in the U.S. for the twelve month period. The number of existing homes sold in the Triad in Q2 of 2016 was up 19.3% compared to last year. Average home prices are also up 8.7% over June 2015 at $193,756. Unemployment decreased from 6.3% in June 2015 to a seasonally adjusted rate of 5.3%, slightly above the national average. Hotel/Motel occupancy taxes continued to increase for the sixth year in a row. Sales taxes grew more than 6.1% compared to FY 2015, partially due to a change in the distribution percentage received from Guilford County which is based on the ad valorem tax rates of municipalities within the County in a given year. The City’s adopted FY 2017 budget for all funds increased $22 million or 4.4% to approximately $520 million, primarily in the infrastructure area for utility improvements, increased debt service payments, and Coliseum improvements. The assessed base value of all real and personal property is projected to grow approximately 1.5% in FY 2017. The FY 2017 budget was adopted with a property tax rate of $.6325 cents per $100 of assessed value (the same rate for the past six years) and includes allocations of $.035, $.0069 and $.5856 to fund transit, housing and general government initiatives, respectively, along with another $.0050 to fund economic development projects, amounting to about $1.3 million each year. Funds for FY 2016 are fully allocated for a variety of items, which should spur additional economic growth. City Council has reaffirmed its intention to continue to maintain the unassigned fund balance of the General Fund at 9% of the 2017 fiscal year budget, or approximately $24.8 million. Budget Highlights for the Fiscal Year Ending June 30, 2017 Governmental Activities: The General Fund budget for FY 2017 was adopted at approximately $275.6 million (up 3.3%) with approximately $8.8 million in increased appropriations over the amended FY 2016 budget. Overall the General Fund budget shows a net increase of about 10 positions, including 6 positions in Fire and 1 position each in Finance and Communications. The budget includes approximately $850,000 in estimated fuel cost reductions. The budget also estimates increased projected revenues of more than 4.5% from local option sales tax and 2.2% from electric utility sales taxes shared with the state. Major budgeted initiatives continue to include economic development and job creation. One half cent on the tax rate in the Economic Development Fund will generate approximately $1.3 million, set aside to serve as the primary funding source to support the Triad Stage and National Folk Festival. Additional capital needs in FY 2017 include continued renovation of Greensboro Police headquarters, roof replacement at MMOB, resurfacing and bridge repair and maintenance to City-owned buildings. Appropriated General Fund fund balance is $6.7 million, or 2.4% of the total budget, but has historically been unused. No significant services or programs were eliminated and few new service enhancements were funded. The budget included a 2.75% average merit increase for employees. The second year budget for FY 2018 is balanced with a 63.25 cent tax rate, unchanged from the adopted FY 2017 rate.

2w