CAFR 2017

Comprehensive Annual Financial Report c i t y o f g r e e n s b o r o • n o r t h c a r o l i n a

For the FiscalYear Ended June 30, 2017

Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2017

Prepared by the City of Greensboro, North Carolina Finance Department

Richard L. Lusk, NCCLGFO Finance Director Marlene F. Druga, NCCLGFO Deputy Finance Director- Financial Services Nagesh V. Annambhotla, NCCLGFO

Principal Analyst Linda R. Jones Administrative Assistant

Bobby D. Fitzjohn, NCCLGFO Financial Reporting Manager Christina N. Smith, NCCLGFO Financial Analyst Sarah M. Rupp, NCCLGFO Financial Analyst Arthur D. Lands Accountant Susan C. Smith, NCCLGFO Accountant Anita B. Wilson, NCCLGFO Accounting Manager James R. Holfield, NCCLGFO Business Analyst Jeanne E. Tyndall Business Analyst Elizabeth Y. Lewis Accountant Evin B. Sims Accountant Roberta K. Johnson, NCCLGFO Treasury Manager Ashley C. Grindstaff Assistant Treasury Manager Jeffery L. Roberts, NCCLGFO Accountant

CITY OF GREENSBORO Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2017

Table of Contents

Exhibit Number

Page

Number

Introductory Section

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

Certificat e of Achievement for Excellence in Financial Reporting............................................................................................. XIX

Organizational Chart.................................................................................................................................................................. XX

City Official .............................................................................................................................................................................. XXI

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 Fiduciary Funds: Statement of Fiduciary Net Position - Fiduciary Funds.........................................A-13............................................... 33 Statement of Changes in Fiduciary Net Position - Fiduciary Funds......................A-14............................................... 34 Statement of Net Position - Component Units...........................................................A-15............................................... 35 Statement of Activities - Component Units................................................................A-16............................................... 36 III. Notes to the Financial Statements........................................................................................................................................ 38 Required Supplementary Information: Law Enforcement Officers Special Separation Allowance (LEOSSA) Pension Benefi Trust: Schedule of Changes in Net Pension Liability and Related Ratios.............................1............................................... 39 Schedule of Employer Contributions...........................................................................2............................................... 40 Schedule of Investment Returns.................................................................................3............................................... 41 Other Postemployment Benefi Plan (OPEB) Trust: Schedule of Funding Progress and Employer Contributions.......................................4............................................... 42 Schedule of Changes in Net OPEB Liability and Related Ratios................................5............................................... 43 Schedule of Employer Contributions...........................................................................6............................................... 44 Schedule of Investment Returns.................................................................................7............................................... 45 Local Government Employees’ Retirement System: Employer’s Proportionate Share of Net Pension Liability (Asset) and Employer Contributions........................................................................................8............................................... 46 Combining and Individual Fund Statements and Schedules: Combining Balance Sheet - Nonmajor Funds: Governmental Funds...................................................................................................9............................................... 47 Special Revenue Funds............................................................................................10............................................... 48 Capital Projects Funds..............................................................................................11............................................... 51 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Nonmajor Funds: Governmental Funds.................................................................................................12............................................... 56 Special Revenue Funds............................................................................................13............................................... 57 Capital Projects Funds..............................................................................................14............................................... 60

Schedule Number

Page Number

Schedule of Changes in Long-Term Debt-Enterprise Funds and Water Resources Capital Assets...................................................................................15............................................... 65 Statement of Revenues, Expenses, and Changes in Net Position-Component Unit - Greensboro Transit Authority.......................................16............................................... 66 Statement of Cash Flows - Component Unit - Greensboro Transit Authority......................17............................................... 67 Schedules of Revenues and Expenses-Budget and Actual-Component Unit (Non-GAAP): Greensboro Transit Authority.........................................................................................18............................................... 69 Greensboro Transit Planning and Grant Project Fund..................................................19............................................... 71 Greensboro Transit Authority Grant Fund......................................................................20............................................... 72 Schedules of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual: Special Revenue Funds: State Highway Allocation...............................................................................................21............................................... 75 Cemetery.......................................................................................................................22............................................... 76 Hotel/Motel Occupancy Tax...........................................................................................23............................................... 77 Economic Development.................................................................................................24............................................... 78 Neighborhood Development Revolving.........................................................................25............................................... 79 Special Tax Districts. .....................................................................................................26............................................... 80 Housing Partnership Revolving.....................................................................................27............................................... 81 Community Development..............................................................................................28............................................... 82 HOME Program.............................................................................................................29............................................... 84 Workforce Investment Act..............................................................................................30............................................... 85 South Elm Street Redevelopment.................................................................................31............................................... 86 State and Federal Grants..............................................................................................32............................................... 87 State and Federal Grants (ARRA).................................................................................33............................................... 90 Emergency Telephone System......................................................................................34............................................... 91 Debt Service Fund..............................................................................................................35............................................... 93 Capital Projects Funds: Street and Sidewalk.......................................................................................................36............................................... 95 State Highway Allocation...............................................................................................37............................................... 96 General Capital Improvements......................................................................................38............................................... 97 General Capital Improvements II...................................................................................39............................................... 98 Street Improvement Bond — Series 2003, 2006 and 2008...........................................40............................................... 99 Public Transportation Bond — Series 2003, 2005A and 2008......................................41............................................. 100 Parks and Recreation Bond — Series 2003, 2005A and 2006A...................................42............................................. 101 Neighborhood Redevelopment Bond — Series 2005 and 2006A.................................43............................................. 102

Schedule Number

Page Number

Library Facilities Bond — Series 2008..........................................................................44............................................. 103 Historical Museum Bond — Series 2008.......................................................................45............................................. 104 Parks and Recreation Bond — Series 2008..................................................................46............................................. 105 Economic Development Bond — Series 2008..............................................................47............................................. 106 Fire Station Bond — Series 2008..................................................................................48............................................. 107 War Memorial Stadium Bond — Series 2008................................................................49............................................. 108 Street Improvements Bond — Series 2010...................................................................50............................................. 109 Parks and Recreation Bond — Series 2010..................................................................51..............................................110 Housing Bond — Series 2010.......................................................................................52..............................................111 Greensboro Science Center Bond — Series 2010........................................................53..............................................112 Transportation Bond — Series 2016.............................................................................54..............................................113 Parks and Recreation Bond — Series 2016..................................................................55..............................................114 Housing Bond — Series 2016.......................................................................................56..............................................115 Community & Economic Development Bond — Series 2016........................................57..............................................116 Perpetual Care Fund.............................................................................................................................................................117 Enterprise Funds: Schedules of Revenues and Expenses-Budget and Actual (Non-GAAP): Water Resources.......................................................................................................58............................................. 120 Water Resources Bond — Series 2014.....................................................................59............................................. 122 Guilford County Construction Project........................................................................60............................................. 123 Water Resources Capital Improvement.....................................................................61............................................. 124 Water Resources Extension Project..........................................................................62............................................. 125 Stormwater Management..........................................................................................63............................................. 126 Stormwater Capital Improvement..............................................................................64............................................. 128 War Memorial Coliseum............................................................................................65............................................. 129 War Memorial Coliseum Capital Project....................................................................66............................................. 131 Performing Arts Center Capital Project......................................................................67............................................. 132 War Memorial Coliseum Capital Improvement Bond.................................................68............................................. 133 War Memorial Coliseum Capital Improvement..........................................................69............................................. 134 Solid Waste Management. ........................................................................................70............................................. 135 Solid Waste Capital Improvement.............................................................................71............................................. 137 Parking Facilities.......................................................................................................72............................................. 138 Parking Facilities Capital Project...............................................................................73............................................. 140 Parking Facilities Bond..............................................................................................74............................................. 141

Schedule/ Table Number

Page Number

Internal Service Funds: Combining Statement of Net Position............................................................................75............................................. 143 Combining Statement of Revenues, Expenses and Changes in Net Position..............76............................................. 145 Combining Statement of Cash Flows............................................................................77............................................. 147 Schedule of Changes in Long-Term Debt......................................................................78............................................. 149 Schedules of Revenues, Expenses, and Changes in Fund Balance-Budget and Actual (Non-GAAP): Equipment Services.......................................................................................................79............................................. 151 Technical Services.........................................................................................................80............................................. 153 Technical Services Capital Project................................................................................81............................................. 155 Information Systems......................................................................................................82............................................. 156 Graphic Services...........................................................................................................83............................................. 158 Guilford Metro Communications....................................................................................84............................................. 160 Employee Risk Retention..............................................................................................85............................................. 162 General Risk Retention.................................................................................................86............................................. 164 Capital Leasing..............................................................................................................87............................................. 166 General Capital and Debt Schedules: Schedule of General Capital Assets by Source.............................................................88............................................. 168 Schedule of General Capital Assets by Function and Activity.......................................89............................................. 169 Schedule of Changes in General Capital Assets by Function and Activity....................90............................................. 171 Schedule of Long-Term Debt.........................................................................................91............................................. 173 Schedule of Changes in General Long-Term Debt........................................................92............................................. 175 I. Financial Trends: Net Position by Component...................................................................................................I............................................. 178 Changes in Net Position, Expenses, Program Revenues, and Net (Expenses)/Revenue........................................................II............................................. 180 Changes in Net Position, General Revenues and Total Changes in Net Position................................................................III............................................. 182 Fund Balances, Governmental Funds................................................................................ IV............................................. 184 Changes in Fund Balances, Governmental Funds.............................................................. V............................................. 186 II. Revenue Capacity: Tax Revenues by Source, Governmental Funds................................................................ VI............................................. 188 Analysis of Current Tax Levy. ............................................................................................ VII............................................. 189 Assessed Value and Estimated Actual Value of All Taxable Property............................... VIII............................................. 190

Statistical Section (unaudited)

Schedule/ Table Number

Page Number

Direct and Overlapping Property Tax Rates........................................................................ IX............................................. 192 Principal Property Taxpayers............................................................................................... X............................................. 193 Property Tax Levies and Collections................................................................................... XI............................................. 195 III. Debt Capacity: Ratios of Outstanding Debt by Type.................................................................................. XII............................................. 197 Ratio of Net General Obligation Bonded Debt.................................................................. XIII............................................. 199 Computation of Direct and Overlapping Bonded Debt......................................................XIV............................................. 201 Legal Debt Margin Information...........................................................................................XV............................................. 202 Pledged Revenue Coverage.............................................................................................XVI............................................. 204 IV. Demographic and Economic Information: Demographic and Economic Statistics............................................................................XVII............................................. 206 Principal Employers........................................................................................................XVIII............................................. 207 Full-Time Equivalent City Government Employees by Function/Program........................XIX............................................. 209 V . Operating Information: Operating Indicators by Function.......................................................................................XX............................................. 210 Capital Asset Statistics by Function..................................................................................XXI............................................. 212 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 .......................... 215 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............................... 217 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........................................ 219 Schedule of Findings and Questioned Costs................................................................................................................................ 221 Corrective Action Plan................................................................................................................................................................... 223 Summary Schedule of Prior Year Findings................................................................................................................................... 224 Schedule of Expenditures of Federal Awards............................................................................................................................... 225 Schedule of Expenditures of State Awards................................................................................................................................... 228 Notes to the Schedule of Expenditures of Federal and State Awards.......................................................................................... 229

November 21, 2017

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

The Comprehensive Annual Financial Report of the City of Greensboro, North Carolina for the fiscal year ended June 30, 2017, 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, 2017, 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 from material 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. A compliance audit on federal and state financial assistance programs is also required under the Federal Single Audit Act of 1984, as amended, and the State Single Audit Implementation Act. Uniform Guidance has also been considered in these financial statements. 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, 2017. In addition, the auditors’ reports, required as part of a single audit, are found in the Single Audit Section of this report. This report focuses not only on the fair presentation of the financial statements, but also on the City’s internal controls and compliance with legal requirements involving the administration of state and federal awards. 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 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 (blended or discrete) are legally separate entities, for which the City is financially accountable. Blended component units are, in substance, part of the City’s operations. The City has one blended component unit, the Greensboro Center City Corporation, reported in the Hotel/Motel Occupancy Tax Fund. 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 Transit Authority, the Greensboro Redevelopment Commission, and the Greensboro ABC Board are presented as discrete component units. Additional information on the blended and 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 287,019 and presently covers a land area of approximately 135 square miles. In the past 10 years population growth has averaged 1 to 2 percent per year with the most notable increase of 5.7 percent occurring between 2007 and 2008, due primarily to significant City-initiated annexations in the northwest region. Since 2000, 15,938 acres were added or 24 square miles, an increase of 23 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 33 acres were annexed during the fiscal year 2016-17. 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 two-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, golf course facilities, downtown parking facilities and government access cable television.

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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 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. Also, 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, 2017 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 the supplementary information subsection of this report, which starts on page 69. 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 promoting job creation, facilitating private business and expansion, utilizing community development grants, bonds and other resources to advance economic development and infrastructure development, and providing enhanced access to City contracting opportunities. The Economic Development Fund is supported by a one-half cent property tax levy that generates approximately $1.3 million per year. Since FY 14-15, the City revised its Minority and Women’s Business Enterprise (MWBE) program with a new coordinator and staff, advancing goals of promoting an inclusive bidding process. A disparity study update was initiated to assess the effectiveness of efforts to achieve MWBE goals. The Study will be completed in FY17-18 with recommendations for program improvements. Also being updated over the next two fiscal years is the City’s Comprehensive Plan, a guiding document that articulates the vision, goals and action plan for Greensboro through 2025. In November 2016, Greensboro citizens passed $126 million in general obligation bonds, $38.5 million of which are dedicated to economic development efforts for downtown streetscape improvements, continuing development for Union Square Campus, Citywide infill development and investments in east Greensboro. The FY 17-18 budgets also continues funding for the Gateway Corridor, renamed Gate City Boulevard (formerly High Point Road/West Lee Street), and the downtown greenway. The Recommended Budget also includes ongoing support for various economic development and cultural partners such as Guilford County Economic Development Alliance, Greensboro Community Development Fund, the Greensboro Partnership Launch Lab (Lab Accelerator), Triad Stage and East Greensboro NOW.  Public Safety – During FY 16-17, the Police Department expanded its focus on increasing community collaboration and partnerships to address crime trends, improve police facilities and ensure that the department remains at the forefront of innovative police initiatives. The department established the Safe City Summit, a community grass roots collaborative addressing violent crime. The Summit will continue in FY 17-18. The department combatted opioid abuse, working with Guilford County partners to provide officers with medication to reverse opioid related overdoses. Police partnered with Cone Health to provide additional mental health training for first responders to increase awareness, de-escalation and successful outcomes involving mental health crisis incidents. Police also began implementing ICAT (Integrated Communications and Tactics), a national model that provides officers with more tools, skills and options for handling critical incidents, particularly those involving persons experiencing mental illness. Police also partnered with Guilford County to fund and operate a Family Justice Center as a “one stop shop” for victims of domestic violence, sexual assault, child abuse and elder abuse. In addition, new Fire Station #63 will house both Fire

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Department and Guilford County Emergency Services personnel, to be located on Burlington Road serving approximately 4,200 City residents and additional County residents. The City will construct the new station during FY 17-18 and open the station during FY 18-19.  Infrastructure / Growth – Greensboro residents passed bond referenda in 2006, 2008 and 2009 authorizing borrowing of more than $228 million for streets, fire stations, parks and other improvements. Much of these projects are complete with the remaining $65 million, mostly street improvements, scheduled for the next two to three years. The successful 2016 bond referendum includes $34.5 million for new parks capital improvements. $5 million are 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 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 million for new sidewalk and intersection improvements, and $500,000 for renovations to the Galyon Depot. Voters also approved $25 million for various housing efforts, including $8 million for a Workforce Housing Initiative designed to make housing more affordable for working families with incomes slightly above poverty designations. Funds to support affordable multi-family housing, emergency repair programs, and housing for homeless and disabled veterans are also included. The City’s Capital Improvements Plan (CIP) totals $1.69 billion in identified projects and outlines a future financing plan to maintain our current infrastructure and develop new facilities as needed. Over one-third of the entire proposed Capital Improvements Plan is devoted to the City’s water and sewer infrastructure.  Customer Service/Diverse Workforce and Fiscal Management – The City’s focus on customer service, fiscal stewardship, transparency and accountability ensures the City has the right people doing the right job. The FY17-18 budget includes an average 3.0% merit increase for all employees, based on performance evaluation. The recommended budget also continues the Public Safety Step Program and includes a 7.5% increase for all sworn fire and police personnel. Bloomberg Philanthropies selected the City of Greensboro to participate in the “What Works City” program, which is supporting the City’s efforts to implement an Open Data policy that will make a variety of city information, statistics and data easier for the public to access. In addition, we also continue to make customer service improvements to our Development Services area to make the City’s technical review process easier to navigate and more business friendly. 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. Greensboro is home to VF Corporation, a Fortune 500 company. Five of the top 60 companies on the Fortune 500 list have operations in Greensboro, these include: Proctor & Gamble, UPS, FedEx, AT&T and UnitedHealth Group. This area experiences an excellent market location which 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. The Urban Loop , a 44-mile state-constructed beltway around Greensboro, is in progress at a cost of approximately $1 billion, with over 30 miles of roadway completed. There are four projects in various stages of construction that will complete the remaining 15 miles of the 44-mile long loop around the city, starting at the western end near Piedmont Triad International Airport and working eastward to U.S. 70. The Southern and FACTORS AFFECTING FINANCIAL CONDITION A. Local Economy

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portions of the Eastern and Western Loop are currently open. The construction on the last leg of the Western portion is split into two phases with the first phase to be completed in 2018 and the second phase in 2020. The Eastern Loop is in various stages of construction that began in 2014 with a future phase scheduled to begin in 2018. The entire project is to be completed by 2022 and has been funded by the N.C. legislature. Nearly one-third of the Piedmont Triad region’s transportation/logistics clusters of industries are located in the greater Greensboro area, and the Colonial Pipeline serves the area with a large fuel transfer/storage facility near PTIA. The region hopes to continue to build on these strengths with an initiative to create an “aerotropolis” aimed at positioning the Triad as the global logistics center of the U.S. East Coast. This will help recoup some of the jobs lost in the textile and furniture industries over the past two decades. The Triad's location, halfway between New York and Florida and Atlanta and Washington, D.C., and the fact that half of the U.S. population is within 650 miles (1,046 km.), are major advantages. FedEx and Honda Aircraft are expected to create approximately 200,000 jobs over a 16 year period. Major industrial and business parks , with fully developed infrastructure, continue to develop in and around PTIA, covering about 1,000 acres with more than 50 companies and approximately 4,000 employees. 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 FedEx hub at PTIA should 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.

In June 2012, PTIA developed plans for $350 million in projects including building a taxiway over a future interstate, buying more land, moving roads, relocating a radar tower and grading large tracts of land. The work will open approximately 900 acres for aviation-related development. The projects will be partially funded by the airport with existing revenues, but additional funding will be needed from federal, state and local assistance with participation from both the public and the private sector. A $34 million taxiway features a 214-foot wide bridge over future Interstate 73 (I-73). This portion of the program was completed during the summer of 2017 for both I-73 and the taxiway bridge. This project connects the airport to hundreds of acres within a mile of the runway and will help attract large aviation tenants. This developed area 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. For the calendar year ending on December 31, 2016, approximately 50 scheduled daily departures carried 847,004 enplaned passengers. 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 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, aerostructures manufacturing and repair, that will prepare students for specialization in an industrial and advanced manufacturing setting. PTIA is also the corporate headquarters of HAECO Americas , formerly known as TIMCO Aviation Services. HAECO provides aircraft maintenance, repair and overhaul services, and acquired TIMCO Aviation services for $388 million in 2014. The company has 1,600 employees at PTIA and additional employees at its interiors

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manufacturing facility in Wallburg, Davidson County. It services both wide-body and small body aircraft and is able to provide both high-end interiors for luxury airliners as well as more modest coach configurations. In addition to the four existing hangars in operation at PTIA, HAECO is constructing a new $60 million, 250,000 square-foot hanger construction project at PTIA that would create up to 500 jobs, with the City offering an economic incentive grant of $400,000 to be paid out over five years if certain jobs are created. Pending approvals of FAA permits and other State agencies, the hangar is expected to be completed by January, 2018. Honda Aircraft Company, a division of Honda Motor Company, has invested $140 million to establish its world headquarters at the 130-acre campus at PTIA in Greensboro. With manufacturing, testing, training, maintenance and customer service facilities, the company currently employs 1,700 people in the area. Following 12 years of design and testing, the HondaJet HA-420, a lightweight 7-passenger passenger jet, received all required FAA certifications to produce, flight test, and issue airworthiness certificates for customers. In June, 2017, HondaJet also received Canadian type certification, authorizing the company to deliver jets to Canadian customers. This follows prior certification for delivery to Europe and Mexico. The Company also announced that it will begin sales of HondaJet in Southeast Asia by partnering with Thai Aerospace Services to provide sales, service and

support across the region. HondaJet was named the most- delivered jet in its category for the first half of 2017 by the General Aviation Manufacturers Association, delivering 24 aircraft to customers in the U.S., Canada, Mexico, and Europe. The company expects HondaJet to be a formidable player in the light business jet market, with annual production expected to reach 80 units per year by mid-2019. Greensboro’s City Council had previously approved an economic incentive grant in the amount of $523,750 ($1,250 per new job) for Honda Aircraft Company. The grant was provided for the purpose of real property improvements, new equipment and creating jobs .

Federal Express began operating a major aircraft hub and cargo handling facility at PTIA in 2009. The cargo handling facility is located on an approximately 160 acre site that has been leased by the Authority to Federal Express for an initial term of 25 years. The cost of the $500 million cargo handling facility was funded by Federal Express, and the Authority constructed a new 9,000-foot public runway parallel to an existing runway, as well as related taxiway, airfield and road improvements. The expansive FedEx Ground distribution center is part of an ongoing nationwide network expansion and transit time acceleration plan to boost daily package volume capacity and further enhance the speed and service capabilities of its network. The 415,000 square foot hub has a workforce of 550 full and part-time employees and about 200 independent contractor opportunities. This facility features the latest in automated handling technology and can process 24,000 packages per hour. With projected future expansion, the hub could eventually process 45,000 packages per hour serving the Southeast Region. To further augment this growing logistics network, United Parcel Service (UPS) Ground has a more than 280,000 square foot small package operations hub capable of sorting more than 59,000 packages per hour. UPS Freight has a facility which moves approximately 1 million pounds of freight daily. Together with its High Point operations, UPS employs over 2,000 people in the area (Greensboro Economic Development Alliance). In the City’s downtown area, a Business Improvement District (BID) was established in FY 2005 with an additional separate tax rate assessed for properties within the district boundaries. Currently the tax is $.08 per $100 valuation, down from $.09 at inception of the district rate. The BID generated close to $743,000 in the fiscal year ended June 30, 2017 from property taxes, to be used for downtown improvement projects. A variety of activities have been completed, including new housing developments, business location loans, business facade improvements, landscaping and public safety programs. In FY 2013, City Council adopted aspects of a “Good Repair” Ordinance to further enhance the attractiveness of downtown sites.

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