You’d think that when a local government freely and frequently raises taxes that they would at least have enough money coming in to stay out of trouble with the state’s financial oversight hawks, however, you would be wrong if you thought that.
The Greensboro City Council called an emergency meeting Thursday afternoon after the State of North Carolina placed the city on a financial monitoring list that will subject Greensboro to additional oversight by the Local Government Commission.
The city received formal notice shortly before 4 p.m. on Wednesday, Sept. 2, that it had been placed on the state’s “Unit Assistance List” based on Greensboro’s fiscal year 2025 audited financial statements.
Mayor Marikay Abuzuaiter said Thursday that the issue raised by state financial officials involves the amount of money Greensboro keeps in its fund balance, commonly referred to as the city’s rainy-day fund, as well as the city’s use of fund balance for operating expenses.
Greensboro ended fiscal year 2025 with nearly $100 million in reserves.
The city reported an available fund balance of roughly $98.3 million – equal to about 22.9 percent of General Fund expenditures.
In 2022, the City Council adopted a plan committing Greensboro to increase that percentage to 25 percent.
City officials said Thursday that they believed Greensboro remained on track to reach the 25 percent target under the timetable previously adopted by the council.
But the state wants to see more progress.
Abuzuaiter said state financial officials want Greensboro to reach the 25 percent level more quickly and also want the city to avoid using reserves for regular operating expenses.
City staff has already identified about $1 million in personnel savings and another $1 million in contract savings as part of the effort to improve the city’s financial position.
City Manager Trey Davis told the council that being placed on the Unit Assistance List doesn’t mean Greensboro is in a financial crisis.
It does, however, mean the city will face additional requirements and additional oversight from the Local Government Commission.
Among those requirements, Davis will have to complete six hours of financial management education.
The city will also need Local Government Commission approval for some financing transactions involving capital assets and motor vehicles that previously could be handled without that additional review.
Greensboro officials spent much of Thursday’s meeting explaining how the city got to this point.
Finance staff said Greensboro’s available fund balance actually increased during the most recent fiscal year, from about $94 million to roughly $98 million.
However, city expenditures increased faster.
As a result, the fund balance as a percentage of expenditures declined from about 23.3 percent to 22.9 percent.
City officials said that rising expenses during fiscal year 2024-2025 included increased public safety costs, building maintenance and money set aside for future fire truck purchases. The unusual market for fire trucks has required governments to commit money far in advance in order to get vehicles ordered and into the production schedule.
City officials said those expenditures contributed to the use of fund balance even as the actual dollar amount in reserves increased.
The council also learned on Thursday that concerns over Greensboro’s fund balance had come up in previous discussions with the Local Government Commission.
City finance staff said the issue was raised during a June discussion involving borrowing for the city’s water system.
According to staff, Local Government Commission officials questioned why Greensboro wasn’t moving more quickly toward the 25 percent fund balance level and why it continued to use fund balance for some expenses.
That led to some frustration Thursday over how much warning the city had received before being placed on the Unit Assistance List.
The mayor said the formal notice Wednesday appeared to come suddenly and questioned why the city hadn’t received more explicit notification following earlier conversations with state officials.
She said the city understood the seriousness of the matter but had expected some additional warning that placement on the list was coming.
Councilmember Hugh Holston compared the state action to a corporate performance improvement plan.
Holston said the city needs to “pump the brakes” and get its fiscal house in order.
He also said the situation could require “some strong austerity steps” and he questioned exactly what steps the state expects Greensboro to take and how quickly it expects them to be completed.
Davis said he had spoken Thursday with a Local Government Commission supervisor and had been told that the state’s concern with Greensboro was specific and “very fixable.”
He said there is not yet a definitive timetable for the city to get off the Unit Assistance List.
According to Davis, the city will have to demonstrate improvement in its financial performance and show that it’s consistently strengthening its fund balance.
The Local Government Commission is expected to assign someone to work with Greensboro as the city takes those steps.
Thursday’s discussion also spilled over into another major issue facing the city – borrowing.
Council members questioned whether Greensboro should rethink some planned bond projects in light of the new financial oversight.
Abuzuaiter said the city needs more information before making those decisions and noted that delaying needed capital projects can carry costs of its own.
She specifically mentioned fire stations – saying failure to maintain adequate fire protection could ultimately affect the city’s fire protection rating and residents’ insurance costs.
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The more money they take, the more they mismanage it. “Easy come, easy go”, as my father used to say.
They piss it away carelessly because when they need more, they just take it from us. It’s not like they have to work harder for it, like everyone else..
But I was impressed with the Mayor Pro Tem’s anger at this coming out of the blue. She’s right, and right to be angry at the bureaucrats (Denise Roth).
AHHHHHHHHHH!!!! THE SUN,,,THE SUN!!!
AND CROSSES!!…AND GARLIC!!! AHHHHHHHHHHHH
NO NO…NOT THE STAKES…NOT THE STAKES!!!
Meanwhile, the Board of Commissars are cringing in their coffins.
I have an easy solution: Stop spending more money than you bring in.
You’re welcome, city council.
(By the way, don’t forget that they paid some firm countless thousands of dollars to come up with “You’re Welcome” as a city slogan. Also Trey is now paying an outside firm countless thousands of dollars to look at how the city is spending money. That’s insane. STOP SPENDING MONEY.)
When a city manager is required to go to financial education classes that shows you he has no clue what he is doing. This is what you get previous city council. He is woefully unqualified. Ms. Roth knows it. Scott, you failed to mention how she was restrained but wanted to go nuclear. She was pissed. 5 votes to get him out. Davis has always had other people do his work. Smooth talker over his head.
So perhaps bloated salaries, too many employees in the legal department, reduction of funding to NGO’s, better tax collections from industries at a reasonable level, overall better fiscal responsibility. This is so long overdue, as they thing we are just a piggy bank to be cracked open at will. I hope the state puts the clamps on things in a way that prevents future excess. The people that have been being elected are just irresponsible and incapable. Time for a change. I hope the recall is successful.