City of Arvada 1st Qtr 2013 Financial Report

2013 First Quarter

Financial Report

Table of Contents 2013 Outlook........................................................................1 General Fund.................................................................... 2-6 Arvada Center...................................................................... 7 Parks Fund........................................................................ 8-9 Special Revenue Funds................................................... 10-11 Capital Improvement Fund............................................ 12-13 Enterprise Funds............................................................. 14-17 Internal Service Funds....................................................18-20 Arvada Economic Development Association...................... 21 City of Arvada Investment Report................................ 22-24

overview

OVERVIEW

2013 Outlook The same revenue trends that we saw in 2012 are continuing through the first quarter of 2013. Sales tax receipts are 7.67% higher than the first quarter of 2012.

Grocery store and general department store receipts, the two largest categories of sales tax, continue to increase over prior year receipts. Another growing sector of sales tax includes the fast food, fast casual and restaurant categories, all of which are still showing increases. The one lagging category that we saw in 2012 was sales tax from public utilities. Although we have experienced a dry winter, a few weeks of cold weather caused a 1.75% increase in this source of sales tax. This source of sales tax is impacted by the weather and temperatures in summer and the first part of the winter. We are also experiencing growth in building and auto-use tax. While one quarter certainly does not constitute a trend for 2013, the results are positive and speak to a growing economy.

Water revenues in the first quarter increased slightly from 2012 as many customers started watering due to a dry winter through March. As we approach the summer months, there are concerns of reduced water consumption as Denver Water declared mandatory water restrictions and temporary drought surcharges from April through September. Because the City obtains most of its water from Denver Water, we must adopt equivalent water restrictions that Denver Water imposes on its Denver customers. This will result in reduced water revenues during the summer months. We will look at reducing expenditures to offset the reduction in revenues. However, a majority of these are necessary to maintain the water system regardless of the amount of water used by our customers.

The City’s other two utilities, Wastewater and Stormwater, are operating within the budget. Tap fee revenues in Wastewater are outpacing 2012 revenues as we continue to see growth in housing. Expenditures are slightly ahead of last year as the timing of the main replacement project is ahead of last year. Stormwater revenues should be on pace with 2012 as there was no change in the stormwater fee. The Stormwater Fund will see a major capital expenditure of over $5 million in 2013 related to the completion of the Garrison Street Bridge and channelization project.

It is still very early to predict how the Golf Fund will fare in 2013. Both golf and restaurant revenues are down compared to first quarter 2012. This decrease can be attributed to the abnormally warm winter in 2012 compared to a cooler and wetter winter in 2013. Restaurant revenues are down due to the remodeling at both West Woods and Lake Arbor, which necessitated closures at both restaurants, with West Woods’ restaurant closure lasting three weeks.

Hospitality Services is off to a slower start than in 2012; however staff is able to reduce expenditures when the level of bookings decreases. There are also planned capital replacement projects this year which will close the facility for one month, and which will have an effect on revenues.

The established rates for the internal service funds are sufficient to cover expenditures and planned replacements in these funds. The transfers in these funds are at 2012 levels. Major replacements for 2013 include the computer–aided dispatch management system, desktop/laptop computer replacement, mobile data systems for police vehicles, a new street sweeper, and the second order of new Ford Interceptors.

Again, it is very early in the year to predict the financial results of 2013. However, the positive trends in revenue appear to be continuing in an encouraging manner.

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general fund General Fund Overview The General Fund pays for the City’s basic services. This includes police, street maintenance, planning, transportation planning, street light maintenance and costs, building activity and general administration. In addition, the General Fund also provides for the following: • Operational support to the Arvada Center • Operational support to the Parks Fund • General Debt Service payments • Transfer to the Capital Improvements Fund for new parks, transportation and other infrastructure projects The following table provides a comparison of budgeted cash balances, revenues and expenditures to budget and prior year amounts in the same areas.

As the table illustrates, we began the year with $22,965,000 in cash reserves. Of this amount, $3,680,903 was reserved for projects that were started in 2012 but not scheduled to be completed until 2013 (carryover items). In addition, since expenditures of $68,866,754 exceeded revenues of $67,932,479, Council made a decision in 2012 to use $934,275 of cash reserves to balance the 2013 budget. Details of the carryover items will be shown in the mid-year report as approval of the carryover items did not occur until after the close of the first quarter.

General Fund

GENERAL FUND

As of 3/31/13

2013 Budget

As of 3/31/12

Beginning Fund Balance

$22,965,000

$22,965,000

REVENUES

$67,932,479

$12,627,684

$11,206,774

$65,649,288

$11,787,477

$11,374,022

EXPENDITURES Ongoing Capital

3,217,466

-

-

JPPHA

-

155,000

200,000

AEDA

-

-

500,000

$68,866,754

$11,942,477

$12,074,022

(934,275)

685,207

(867,240)

$22,030,725

$23,650,207

2013 Expenditures Income/Loss Ending Fund Balance

In general, revenues are in line with the budget estimates for the majority of revenue categories. The major revenue categories of sales tax, use tax, property tax and intergovernmental revenues are discussed in more detail in the “Revenue Highlights” section. The investment report at the end of this report will provide details of the City’s investments. Investment revenue will most likely be short of budget because of the current investment environment which is not expected to improve in 2013.

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Expenditures in 2013 are slightly less than expenditures in 2012. This is due to the one-time transfer of $500,000 to AEDA made in 2012. If the transfer is removed, expenditures are 3.1% more in 2013 than in 2012. This increase is expected as personnel-related expenditures were budgeted to increase 3.9% as a result of step and market increases and non-personnel related expenditures increased an average of 3%.

Revenue Highlights The following section highlights the sources generated to meet the operating expenditures of the General Fund. The City’s revenues come from many sources as illustrated in the graph below. Sales tax, use tax, property tax and intergovernmental revenues are the largest sources of revenue and are detailed in the next few pages. The remaining revenue sources consist of building permits, utility fees, fees we receive from other funds for general services, fees and fines, and miscellaneous revenues.

GENERAL FUND REVENUE

Intergovernmental 7%

All Other 7%

Administrative Services Use Tax 4% 8%

Property Tax 7% Building Activity 5%

Sales Tax 55%

Utility Fees 7%

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Sales Tax SALES TAX COLLECTIONS

Sales tax collections in 2013 are continuing the upward trend from 2012. The graph below shows actual sales tax collections. Sales tax collections lag one month; therefore, the first quarter collections represent sales tax collections for two months.

Sales tax receipts for the first quarter in 2013 are 7.67% above 2012 actuals.

$7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0

03/31/2008 $5,549,908

Sales Tax

03/31/2009 $5,233,376

03/31/2010 $5,252,127

03/31/2011 $5,335,005

03/31/2012 $5,620,783

03/31/2013 $6,051,902

Budgeted sales tax collections for 2013 represented a 3% increase over the 2012 budget. Because of increased sales tax collections in 2012, 2013 budgeted sales tax of $35,589,702 represents a 1.7% over 2012 actuals. As the next ten-year financial plan is reviewed, future sales tax will be revised to reflect the 2012 actual collections.

Use Tax The City has three prime use tax types: general, building and automobile. These are taxes paid in lieu of sales tax on purchases.

USE TAX COLLECTIONS $1,800,000

For the first two months of 2013, general use tax is showing a 4.2% increase over 2012 first quarter collections. Building use tax for 2013 is at $764,557 which is a 54.7% increase over 2012 first quarter collections. We expect building use tax to exceed budget estimates in 2013 as the ten-year financial plan anticipated growth, but not as quickly as we have seen in the last 16 months. The 2013 budget for use tax is $7,647,510.

$1,600,000 $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $0

03/31/2008

03/31/2009

03/31/2010 Building

03/31/2011

Auto

03/31/2012

03/31/2013

General

Consumers continue to purchase vehicles. Auto use tax collections are showing a 15.2% increase over the previous year.

Property Tax The City’s property tax rate is 4.31 mills per $100 of valuation. In Colorado, the mill is placed on the assessed valuation. The graph illustrates the collections for the past five years and the first three months of 2013.

PROPERTY TAX COLLECTIONS $2,000,000

$1,500,000

Property tax is a stable revenue source for the City. Currently, property tax receipts are $112,000 below first quarter 2012 receipts.

$1,000,000

$500,000

$0 Property Tax

03/31/2008 $1,646,477

03/31/2009 $1,552,911

03/31/2010 $1,500,684

03/31/2011 $1,361,462

03/31/2012 $1,723,913

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03/31/2013 $1,611,945

Intergovernmental Revenues This category is made up of two revenue sources, Highway Users Trust Fund (HUTF), which is the City’s share of State collected gas tax revenue, and Road and Bridge, which is the City’s share of property tax collected by Jefferson County and dedicated to the maintenance of roads and bridges.

Combined, these revenues have averaged a little over $4.5 million in the past five years and are budgeted for $4.7 million in 2013. Road and Bridge funds are disbursed a couple months after collection, so we will not receive January’s revenue until early April. HUTF funds are disbursed the month after they are collected, so the graph represents two months’ revenue.

INTERGOVERNMENTAL REVENUES

$700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $0

03/31/2008

03/31/2009

03/31/2010

HUTF

03/31/2011

03/31/2012

Jefferson County

Expenditure Highlights The largest expenditure in the General Fund is personnel costs which account for 52% of expenditures.

GENERAL FUND EXPENDITURES

Supplies & Expenses 7% Services & Charges 10%

Contracts 12%

Misc.

1%

Debt Service 6%

Transfers 12%

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Personnel 52%

03/31/2013

Salary and Benefit Savings PERSONNEL

2013 Budget

As of 3/31/13

As of 3/31/12

$27,687,938

$4,970,781

$4,944,439

(861,394)

-

-

903,476

154,155

145,981

Group Insurance

4,701,740

865,464

775,678

Retirement

3,172,604

584,910

581,183

Medicare

321,853

58,837

57,300

Temporary Wages & SS

542,216

52,872

36,423

Other

332,149

83,295

81,244

Total

$36,800,582

$6,770,313

$6,622,249

Salaries & Wages Vacancy Savings Overtime

Heightened use in Traffic Engineering, Building Inspection, Streets, and Facilities Management represents the bulk of the increase in Temporary Wage expenditures. The General Fund is currently on pace to meet the budgeted Vacancy Savings total for 2013.

Fuel General Fund Parks Police Tax Increments Utilities Other Total Expenditures

2013 Budget

As of 3/31/13

As of 3/31/12

$536,447

$114,769

$120,145

202,185

22,869

28,166

50,204

12,560

12,382

225,929

28,536

31,259

63,094

3,877

5,810

$1,077,859

$182,610

$197,762

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arvada center

ARVADA CENTER

Arvada Center Arvada Center

2013 Budget

As of 03/31/13

$232,000

$232,000

$6,138,453

$826,740

$821,722

SCFD

1,065,020

283,286

248,320

City Cash Transfer

1,643,122

410,780

410,780

City In-Kind Transfer

2,000,000

-

-

$10,846,595

$1,520,806

$1,480,822

Ongoing

$8,844,820

$1,545,117

$1,537,068

In-Kind

2,000,000

-

-

$10,844,820

$1,545,117

$1,537,068

1,775

(24,311)

(56,246)

233,775

207,689

Beginning Fund Balance

As of 03/31/12

REVENUES Generated

Total Revenues EXPENDITURES

Total Expenditures Income/(Loss) Ending Fund Balance

performance production was on track to match or exceed the 2012 PHAMALY production; however, a sold-out performance was canceled due to the weather. The cancellation resulted in approximately $12,000 refunded to patrons. The production still made net positive revenue, but did not meet previous results or current-year expectations. The other production in the Black Box, and part of our subscription series, was Blithe Spirit. The play performed well, meeting projections and garnering critical acclaim.

AC Presents is down a little over $75,000 compared to 2012. Lone Tree had made a down payment in the first quarter of 2012 of $50,000 for their presentation of Chess.

Revenues from Education classes are up $10,000 from last year.

This growth is primarily due to a tuition increase. This is the second year the Center successfully offered Spring Break camps.

With the recovering economy, SCFD revenue collections increased in 2012. This growth will result in an increase in the SCFD contribution to the Center for 2013. The amount for the first quarter was an increase of $35,000, or 12% over the 2012 contribution.

Expense Highlights Revenue Highlights First quarter results at the Arvada Center have been positive overall. Ticket sales had an overall increase of $57,000 or 10.62% from last year. This increase is mainly due to the success of Man Of LaMancha, the spring musical. The show exceeded sales projections significantly and will also contribute some revenue to the second quarter.

Two other theater productions took place in the first quarter. The first was “The Foreigner� presented by PHAMALY in partnership with the Arvada Center. This three-

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Overall, expenses are tracking upward, with most of the increase related to Payroll and Benefits. Historically, expenses are not out of line in the first quarter of the year. Previous experience shows that expenses can easily ratchet up in the third and fourth quarters.

Therefore, the Center is taking a proactive approach and addressing issues related to show costs and personnel expenses now.

parks fund

PARKS FUND

Parks Fund Parks Fund Beginning Fund Balance

2013 Budget As of 3/31/13

As of 3/31/12

$4,061,000

$4,061,000

Generated

$184,618

$25,282

$25,477

Open Space

3,398,539

261,769

250,590

927,000

-

-

City Cash Transfer

2,883,545

720,886

702,011

Total Revenues

$7,393,702

$1,007,937

$978,077

$7,408,892

$1,162,525

$1,144,372

-

-

-

$7,408,892

$1,162,525

$1,144,372

(15,190)

(154,588)

(166,295)

$4,045,810

$3,906,412

REVENUES

APEX Reimbursement

EXPENDITURES Ongoing Capital Total Expenditures Income/(Loss) Ending Fund Balance

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Revenue Highlights Jefferson County Open Space receipts, which represent the largest source of revenue for the Parks Fund, continue to trend up nearly 4.5% over 2012 during the same period. However, year-to-date receipts reflect only one month of revenue as this revenue source lags by two months.

Expenditure Highlights An approximately 4% decrease in personnel expenditures was offset by increases in professional services and internal service fund contributions, resulting in a year-to-date increase of 1.59%.

PARKS FUND REVENUE

3,500 3,000 2,500 2,000 1,500 1,000 500 0

Open Space As of 3/31/11

Cash Transfer As of 3/31/12

As of 3/31/13

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APEX 2013 Budget

special revenue funds SPECIAL REVENUE FUNDS

Special Revenue Funds Overview Special Revenue Funds account for revenues that are to be used for specific purposes. The following are considered special revenue funds: • Tax Increment Funds • Community Development • Housing

Tax Increment Funds Overview There are two tax increment funds which account for the voterapproved sales tax increases to fund expanded police services.

The first fund accounts for the .21 cent sales tax for police services and the second accounts for the .25 cent sales tax. Sources in the tax increment fund include sales tax, general use tax, auto use tax, building use and interest income. Since the tax increment is in addition to the City’s 3% sales tax, the revenue trends in the tax increment fund will closely follow those in the general fund.

.21 and .25 Tax Increment Funds .21 and .25 Tax Increment Funds

2013 Budget

As of 3/31/13

Beginning Fund Balance

$12,898,000

$12,898,000

$6,132,531

$968,415

$881,615

1,148,832

269,107

209,520

51,168

42,418

3,373

$7,332,531

$1,279,940

$1,094,507

Ongoing

$7,068,514

$1,342,525

$1,332,517

Capital

$8,000,000

$106,729

-

$15,068,514

$1,449,253

$1,332,517

(7,735,983)

(169,313)

(238,010)

$5,162,017

$12,728,687

As of 3/31/12

REVENUES Sales Tax / Audit Revenue Use Tax Other Total Revenues EXPENDITURES

Total Expenditures

Revenue Highlights Sales tax, building use tax, and auto use tax receipts continued their upward trends into 2013. Total tax revenues were up 13.4% versus the first quarter of 2012.

Income/(Loss) Ending Fund Balance

Expenditure Highlights Costs associated with the construction of two new community stations dominate the 2013 budgets for the two Tax Increment Funds. Each fund will bear the cost of a community station.

10

s

Community Development Community Development Fund Beginning Fund Balance

2013 Budget As of 3/31/13 As of 3/31/12 $6,920,000

$6,920,000

Recovered

$114,737

$156,539

Grants

REVENUES $25,340

638,000

45,266

19,469

City Cash Transfer

45,000

11,250

11,250

Interest/Other

19,500

2,908

456,123

$817,237

$215,962

$63,393

$591,852

$180,540

$78,865

380,625

93,796

28,250

67,958

-

-

$1,040,435

$274,336

$107,115

(223,198)

(58,374)

(43,722)

$6,696,802

$6,861,626

Total Revenues

Both the timing of the City Cash Transfer to the Arvada Housing Authority due to changes in federal reporting practices and $57,042 provided to Family Tree for housing and family emergency supportive services represent the increase in Ongoing expenditures.

EXPENDITURES Ongoing Essential Home Repairs Loans Total Expenditures Income/(Loss) Ending Fund Balance

Arvada Housing Authority Arvada Housing Authority

2013 Budget

As of 3/31/13

$390,000

$390,000

$19,178

$9,500

$10,671

3,900,000

2,773,415

2,762,785

26,000

18,760

28,502

5,464

1,455

933

$3,950,642

$2,803,129

$2,802,891

Ongoing

$380,323

$272,510

$273,257

Rents

3,532,200

2,942,589

2,776,379

28,674

35,628

41,007

$3,941,197

$3,250,728

$3,090,642

9,445

(447,598)

(287,751)

$399,445

$(57,598)

Beginning Fund Balance

As of 3/31/12

REVENUES Recovered Grants City Cash Transfer Interest/Other Total Revenues EXPENDITURES

Transfers Total Expenditures Income/(Loss) Ending Fund Balance

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The Arvada Housing Authority currently assists exactly 500 families with monthly rent subsidies. These subsidies constitute approximately 90% of this Fund’s expenditures.

capital improvement CAPITAL IMPROVEMENT FUND

Capital Improvement Fund Overview The Capital Improvement Fund is where the City keeps track of capital projects for streets, traffic, parks, and the Arvada Center.

Revenue Highlights In 2013, the majority of the revenue in the CIP Fund consists of transfers from the General Fund, Risk Management Fund and Lands Dedicated Fund.

Other revenues include park development fees, grant revenue and contributions from other governmental agencies.

Expenditure Highlights The guiding principles for the City’s CIP Fund are identified as: • Taking Lasting Care • Building Our Base • Investing for the Future There are many CIP projects which fall into the Taking Lasting Care category. The City sets aside monies to replace or renovate the current infrastructure.

The projects for 2013 include collector street improvements, ADA ramps, intersection safety improvements, signal replacement, playground renovation, trail renovation and tree replacement.

In 2011, the City purchased two large parcels for the South Central Park (to be named Griffith Station Park) and East Arvada Park (to be called Britton Park). In 2013 we will begin construction of these parks which will be Building our Base.

In 2013, we are appropriating over $12 million for the transit-oriented development (TOD) projects along the Gold Line rail project. Although most of the monies will not be spent in 2013, planning for this project must be started now to allow sufficient time for design and construction by opening day in 2016. The City, the Arvada Urban Renewal Authority (AURA) and the Regional Transportation District (RTD) are jointly issuing a request for proposal to develop the eight-acre site for the Olde Town station. This is one example of Investing for the Future.

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Capital Projects Capital Improvement Fund

2013 Budget

As of 3/31/13

As of 3/31/12

Beginning Fund Balance

$39,138,000

$39,138,000

$4,590,966

$219,780

$128,112

CIP Administration

$13,200,000

$281,484

$965,231

CIP Street Projects

250,000

60,718

308,325

CIP Traffic Projects

2,172,000

85,766

146,856

CIP Park Projects

2,466,000

355,830

957,414

678,500

32,032

49,571

Total Expenditures

$18,766,500

$815,830

$2,427,397

Income/Loss

(14,175,534)

(596,050)

(2,299,285)

Ending Fund Balance

$24,962,466

$38,541,950

REVENUES Total Revenues EXPENDITURES

CIP Arvada Center Projects

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enterprise funds

ENTERPRISE FUNDS

Enterprise Funds Overview Enterprise funds account for activities that generate a fee that makes the entity self supporting. The five enterprise funds in the City are: • • • • •

Water Fund Wastewater Fund Stormwater Fund Golf Fund Hospitality Fund

Water Fund

Expenditure Highlights Four million dollars of the year-to-date Ongoing Expenditures represent a payment to Consolidated Mutual for water rights in the JCMD, which was covered by a payment to the City from JCMD in January 2013. The year-to-date drops in both Major Capital Maintenance and Capital are solely functions of timing. Over $37 million of the Capital budget represents the scheduled first major payment to Denver Water for the Gross Reservoir Expansion project.

Water Fund Water Fund

2013 Budget As of 3/31/13 As of 3/31/12

The Water Fund accounts for all activities within the scope of the water utility operations including administration, operations, capital water projects, financing and related debt service and billing and collection.

Beginning Fund Balance

$63,980,000

$63,980,000

$19,053,224

$2,651,864

$2,530,542

Tap Fees

3,204,761

1,309,849

418,267

Revenue Highlights

Interest

1,190,885

112,448

160,816

Year-to-date revenue from water sales is up by 4.8 %, with consumption up 2.8% over the same period in 2012. However, we do not anticipate this trend to continue with mandatory water restrictions and the five snow storms in April. The spike in Other Revenues is due to a payment received from the Jefferson Center Metropolitan District (JCMD).

REVENUES Water Charges

Other

667,875

4,482,865

636,764

$24,116,745

$8,557,026

$3,746,388

$16,003,618

$6,629,498

$2,731,406

Debt Service

2,265,300

-

-

Major Capital Maintenance

4,046,252

616,871

871,798

38,842,708

18,514

60,070

$61,157,878

$7,264,883

$3,663,275

Income/(Loss)

(37,041,133)

1,292,142

83,113

Ending Fund Balance

$26,938,867

$65,272,142

Total Revenues EXPENDITURES Ongoing

Capital Total Expenditures

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Wastewater Fund

Wastewater Fund

The wastewater fund accounts for all activities necessary in the collection, transmission and disposal of sewage and wastewater.

Wastewater Fund

2013 Budget

As of 3/31/13

Beginning Fund Balance

$11,510,000

$11,510,000

Revenue Highlights

REVENUES

Reflective of the continued health of building activity within the City, first quarter tap fee revenues more than doubled over the first quarter of 2012. The apparent drop in Sewer Charge revenue is due to the timing of receipts.

Sewer Charges

Expenditure Highlights

EXPENDITURES

Costs for the purchase of a new Manhole Spray Lining System and associated maintenance materials represent the vast majority of the increase in ongoing expenditures. The timing of payments for sewer main replacements represent the increase in Major Capital Maintenance.

Charges from the Metro Wastewater Reclamation District continue to represent nearly two-thirds of all expenditures.

Metro District

Stormwater Fund The Stormwater fund accounts for all activities necessary to maintain a stormwater management plan.

Revenue Highlights The apparent drop in Stormwater Fee revenue is due to the timing of receipts. The fee has remained at the same level since 2009.

As of 3/31/12

$11,248,581

$2,308,845

$2,478,408

Tap Fees

235,258

153,953

71,369

Interest

566,480

21,282

27,175

Other

577,416

3,555

6,275

$12,627,735

$2,487,636

$2,583,226

$7,222,990

$1,805,748

$1,635,240

Ongoing

3,035,709

778,188

607,655

Major Capital Maintenance

1,904,762

193,560

22,189

154,500

-

-

$12,317,961

$2,777,496

$2,265,083

309,774

(289,860)

318,143

$11,819,774

$11,220,140

2013 Budget

As of 3/31/13

$9,316,000

$9,316,000

$3,157,295

$723,609

$793,286

66,480

18,460

53,883

$3,223,775

$742,069

$847,169

$1,882,648

$316,059

$208,112

933,288

233,122

233,122

3,928,050

196,011

56,452

$6,743,986

$745,192

$497,686

Income/(Loss)

(3,520,211)

(3,123)

349,483

Ending Fund Balance

$5,795,789

$9,312,877

Total Revenues

Capital Total Expenditures Income/(Loss) Ending Fund Balance

Stormwater Fund Stormwater Beginning Fund Balance

As of 3/31/12

REVENUES Stormwater Fee Other Total Revenues

Expenditure Highlights

EXPENDITURES

The timing of the City’s annual contribution for the Rooney Road Recycling Center and an accounting for uncollectible utility charges as bad debt represent the rise in ongoing expenditures. The increase in capital expenditures is due to project work on the Garrison Street Bridge and Lee Street Outfall projects in the first quarter.

Ongoing Debt Service Capital Total Expenditures

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Golf Fund Golf Fund

Revenue Highlights

2013 Budget

As of 3/31/13

$632,000

$632,000

$3,015,108

$277,040

$400,943

1,119,828

146,305

165,163

City Cash Transfer

201,294

50,324

54,869

Total Revenues

$4,336,230

$473,668

$620,974

$2,151,379

$342,374

$283,761

1,113,966

161,491

134,035

Administration

893,969

299,876

159,101

Capital

131,419

296,816

30

$4,290,733

$1,100,558

$576,927

45,497

(626,889)

44,047

$677,497

$5,111

Beginning Fund Balance

As of 3/31/12

Both Golf Course and Restaurant revenues were down considerably compared to the first quarter 2012, respectively 31% and 11%. Weather played a substantial role in comparing March 2012 to 2013. March 2012 is the anomaly due to a record lack of precipitation, while March 2013 was both cooler and wetter. Playable days were down 62% at West Woods and down 52% at Lake Arbor. Cottonwood 9 at West Woods was closed all three months to accommodate a ditch company siphon project. As for the Restaurants, West Woods, which generates a vast majority of total Restaurant revenue, lost three weeks of business due to closure for remodeling. The Lake Arbor Restaurant was closed for remodeling, as well, but for a lesser period of time.

REVENUES Golf Restaurant

EXPENDITURES Golf Restaurants

Total Expenditures Income/(Loss) Ending Fund Balance

Expenditure Highlights Both the timing of debt payments and substantial capital outlays represent the increases in expenditures for the first quarter. The budget for Capital Expenditures was increased in April per the carry-over ordinance to accommodate the costs of completing the West Woods Cart & Equipment Building and accompanying infrastructure upgrades to service electric carts.

Rounds by Type - January thru March 2012/2013 WEST WOODS

Regular

Special

Tournament

Annual

Senior

Junior

Other

Total

2012

794

2,500

0

662

626

54

139

4,775

2013

0

1,389

0

410

62

12

62

1,935

-794

-1,111

0

-252

-564

-42

-77

-2,840

-100%

-44%

0%

-38%

-90%

-78%

-55%

-59%

LAKE ARBOR

Regular

Special

Tournament

Annual

Junior

Other

Total

2012

1,687

2,122

0

2,867

51

170

6,897

2013

992

1,015

0

2,212

54

153

4,426

-695

-1,107

0

-655

3

-17

-2,471

-41%

-52%

0%

-23%

6%

-10%

-36%

16

Hospitality Fund Hospitality Fund

2013 Budget

As of 3/31/13

$674,000

$674,000

Banquets

$973,117

$158,071

$176,906

Concessions

183,320

16,476

12,018

Miscellaneous

516,836

73,132

84,898

$1,673,273

$247,679

$273,822

Beginning Fund Balance

As of 3/31/12

REVENUES

Total Revenues

Administration

$292,009

$46,423

$50,939

Operations

1,279,389

194,507

216,629

263,096

885

-

25,952

6,488

28,914

$1,860,446

$248,304

$296,482

(187,173)

(625)

(22,660)

$486,827

$673,375

Transfer to General Fund Total Expenditures Income/(Loss) Ending Fund Balance

Banquet and conference-related revenue saw a decline of 9.55% in comparison to 2012. This variance is due to the number of organizations responding to internal scheduling conflicts or the need to rotate demographically for their organization. This shortfall is anticipated to level out in April as anticipated revenue in April has increased approximately $38,000 over 2012.

Expenditure Highlights

EXPENDITURES

Capital

Revenue Highlights

Total actual expenditures decreased from first quarter 2012 by 16.25%. The transfer to General Fund monies reflect the biggest portion of this percentage. However, expenditures are expected to increase in 2013 due to the capital replacement projects which will close the facility for one month in 2013.

Expenditures are expected to increase in 2013 due to the capital replacement projects which will close the facility for one month in 2013.

17

internal service

INTERNAL SERVICE FUNDS

Internal Service Funds Overview We have four Internal Service Funds. These Funds charge for goods and services to each division that uses them. The Funds then pay for all associated costs of things such as purchasing insurance, vehicle purchases and maintenance, computer purchases and maintenance, and buildings maintenance.

Risk Management Risk Management Beginning Fund Balance

Overview

2013 Budget

As of 3/31/13

As of 3/31/12

$4,433,000

$4,433,000

2,010,729

502,587

576,016

67,980

20,465

30,086

$2,078,709

$523,053

$606,101

$2,540,540

$583,280

$479,171

622,527

134,314

134,193

$3,163,067

$717,594

$613,364

(1,084,358)

(194,541)

-7,263

$3,348,642

$4,238,459

REVENUES Transfers Other Total Revenues EXPENDITURES RM Administration RM Operations Total Expenditures Income/(Loss) Ending Fund Balance

The Insurance Fund, administered by the Risk Management Division of Finance, provides the means by which the City self-insures against loss. It is funded with contributions by all City divisions based on their levels and types of exposure. The Fund is also used for programs for loss prevention, the protection of City personnel and the preservation of City property and assets.

Revenue Highlights Due to continuing trends of relatively low claims costs and an effective focus on safety, charges to participating funds were reduced by nearly 13% for 2013.

Expenditure Highlights The apparent spike in Administration costs is due to purchase orders for renewals of the City’s insurance coverages being created in March instead of April. Of note, the RM Administration budget includes a $573,500 transfer to the Capital Projects Fund for three safety-related projects in 2013: video security, front entry repair and exterior lighting improvements at the Arvada Center. *Per GASB Statement 10, an additional $935,705 in cash is currently held in the Risk Management Fund to cover potentially incurred liabilities as of the beginning of the year. This figure was reached by Risk Management’s actuary.

18

Information Technology and Print Services Overview

Information Technology and Print Services

2013 Budget

As of 3/31/13

Beginning Fund Balance

$8,088,000

$8,088,000

Maintenance

$959,712

$239,942

$239,928

Replacement

896,767

289,596

212,757

Print Shop

437,801

78,975

69,073

$2,294,280

$608,512

$521,757

Maintenance

$1,149,621

$295,837

$247,315

Replacement

972,295

156,742

965,557

Print Shop

403,825

88,723

55,999

Total Expenditures

$2,525,742

$541,302

$1,268,872

Ending Fund Balance

$7,856,538

$8,155,210

As of 3/31/12

REVENUES

Total Revenues EXPENDITURES

The Computer Fund provides resources for both the ongoing maintenance and replacement of the City’s computers, network hardware and other electronic infrastructure. It is funded with contributions by all City divisions based on their levels of use of information technology. The Print Shop Fund provides ongoing capital support for the City’s printing needs.

Revenue Highlights Computer Maintenance and Replacement contributions by participating Funds remain at 2012 levels. Recovered costs associated with CAD maintenance are reflected in the Replacement revenue increase.

Expenditure Highlights The substantial drop in Replacement expenditures is due to the bulk of phone system replacement expenditures having been made in the first quarter of 2012. Major projects for the remainder of 2013 include computer-aided dispatch management system , budget software replacement and desktop/laptop computer replacement, as well as mobile data systems for police vehicles.

Vehicles Vehicles

2013 Budget

As of 3/31/13

$6,522,000

$6,522,000

Maintenance Transfers

$2,196,638

$549,145

$533,177

Replacement Transfers

1,095,582

278,943

273,896

136,177

49,547

68,204

$3,428,397

$877,635

$875,277

Maintenance

$3,746,934

$520,343

$481,046

Replacement

1,645,963

353,616

586,661

Total Expenditures

$5,392,897

$873,959

$1,067,707

Income/(Loss)

(1,964,500)

3,676

(192,431)

Ending Fund Balance

$6,226,589

$6,504,850

Beginning Fund Balance

As of 3/31/12

REVENUES

Other Total Revenues EXPENDITURES

19

Overview The Vehicles Fund provides resources for the maintenance of City vehicles and heavy equipment, as well as their replacement when various factors demand their retirement.

It is funded with contributions by all City divisions based on their vehicle inventory and use.

Revenue Highlights Charges for Fleet Maintenance services, which include personnel costs, rose 3% over 2012 levels. Increases for Vehicle Maintenance transfers for some, but not all, divisions net to a rise of 1.8%.

Expenditure Highlights A large piece of the increase in Maintenance expenditures stems from the timing of an annual payment for the FASTER electronic fleet management system. The decrease in Replacement reflects the timing of a 2012 purchase order for the acquisition of new Ford Police Interceptors. Among this year’s acquisitions will be a new street sweeper.

Buildings 2013 Budget

As of 3/31/13

$1,704,000

$1,704,000

$407,351

$101,838

$101,838

131,233

4,044

5,631

$538,584

$105,882

$107,469

Replacement

$60,925

$41,946

$58,080

Capital Lease

113,977

27,304

26,784

$174,902

$69,250

$84,863

363,682

36,631

22,606

$2,067,682

$1,740,631

Buildings Beginning Fund Balance

As of 3/31/12

REVENUES Replacement Transfers Other Total Revenues EXPENDITURES

Total Expenditures Income/(Loss) Ending Fund Balance

20

Overview The Buildings Fund provides resources for maintaining major portions of facility infrastructure as replacement becomes necessary. The primary types of infrastructure are HVAC equipment, parking lots, roofs, and carpet. It is funded with contributions by all City divisions based on their facility occupancy.

Revenue Highlights Monthly replacement charges from contributing funds remain at 2012 levels.

Expenditure Highlights The Capital Lease expenditures represent payments per an agreement with Siemens Building Technologies in 2004 for energy efficiency improvements at various City facilities.

Among the projects funded in 2013 is the floor replacement for the gallery at the Arvada Center, which was converted to concrete in lieu of replacing the existing carpet.

Arvada Economic Development Association 2013 Budget

As of 3/31/12

$405,500

$405,500

Revenue

754,000

188,547

182,306

Expenditures

730,683

168,111

169,267

$428,817

$425,936

Operations Beginning Fund Balance

Ending Fund Balance

As of 3/31/13

Program

2013

Beginning Cash Balance

$1,135,001

Revenue

3,174

Expenditures

(81,633)

Ending Cash Balance

1,056,542

Reserved for AEDA Loan Program

(300,000)

Reserved for AEDA Small Business Grants

(100,000)

Reserved for Job Creation Program

(23,500)

Commitments Available Unallocated Cash Balance

(257,848) $ 375,194

21

Revenue Highlights Revenue in the AEDA Operations Fund consists of a transfer from the general fund equal to the personnel and operating expenditures.

Expenditure Highlights Year-to-date expenditures in 2013 are at 23% of budgeted expenditures and are comparable to 2012 expenditures. Salaries and benefits represent the largest expenditure at approximately 53% of the expenditures.

Revenue Highlights Revenues in 2013 consist of interest income and loan payments from two loans.

Expenditure Highlights Expenditures in 2013 reflect seven AEDA small business grants. The grants were used to help Arvada businesses improve signage, landscaping, facades, and site improvements.

investment report

CITY OF ARVADA INVESTMENT REPORT

Investment Portfolio Objectives Pursuant to the City’s investment policy, the primary objectives of the City’s investment activities, in priority order, are safety, liquidity and yield. Consistent with this policy, the portfolio of securities is invested in US Treasuries, US Agency debt, local government investment pools (LGIP’s), commercial paper, and corporate debt subject to rating and concentration limits. The City’s investment portfolio is managed to provide sufficient liquidity to meet all reasonably anticipated operating cash needs without selling securities prior to maturity.

Investment Portfolio Performance The portfolio saw a first quarter 2013 yield of .548% which is a decrease of 33bps when compared to the first quarter 2012 yield of .878%. The benchmark yield for the City’s portfolio, as established by the investment policy, is a weighted benchmark of allowable securities. For the first quarter, the weighted benchmark return was .37 percent, constructed using the average 2013 monthly returns. The City’s portfolio yield continued to decline from the previous rolling four quarters, as evidenced by the considerable reduction in investment income and the unfavorable reinvestment environment. One contributing factor to these performance results is that the Fed has left rates at very low levels. The discount rate remains at .25 percent and the Fed has announced that we will continue to experience these rates most likely into 2015. The Federal Reserve will keep rates unchanged until the dynamics of our economy significantly change. The portfolio saw $19 million in investment calls during the first quarter due to the expiration of call “lockout” periods. These calls resulted in reinvestment in lower-yielding securities, which contributes to the reduction in investment income. An indirect benefit to the Arvada portfolio has been the capital appreciation that has been attained in this time, although this is considered as “paper gains” and has no profound effect on the yield we use to benchmark. The gain during the first quarter of 2013 was $242,231. Key information regarding the City’s portfolio is shown in the tables and graphs below:

PORTFOLIO CHANGES

PORTFOLIO PERFORMANCE

01/01/2013

3/31/2013

Money Market

$ 5,006,842

$5,009,265

-0.330%

Savings/Cash

20,163,693

20,167,698

0.000%

CD

19,270,465

19,285,268

14,803

-24bps

Corporate

5,000,000

3,000,000

-2,000,000

LGIP

45,407,414

44,158,330

-1,249,084

108,000,000

117,600,000

9,600,000

7,000,000

2,000,000

-5,000,000

$209,848,414

$211,220,561

$1,372,147

YTD Mar-13

YTD Mar-12

Difference

Interest Earnings

$303,680

$445,118

-$141,437

Portfolio Yield

0.548%

0.878%

Benchmark Yield

0.370%

0.370%

Tracking Error

+18bps

+51ps

US Agency US Treasury Total

22

Difference $

2,423 4,005

ACCOUNT SUMMARY

PORTFOLIO CHARACTERISTICS

Par Value

$211,220,561

Average Duration (yrs)

2.05

Book Value

$211,250,904

Average Coupon

0.631%

Market Value

$211,462,792

Average Cost YTM

0.624%

Average Market YTM

0.544%

Unrealized Gain/(Loss)

$242,231

MATURITY DISTRIBUTION

PORTFOLIO ALLOCATION Money Market 2%

35.0%

U.S. Agencies 56%

34.8%

30.0% 25.0% 20.0%

LGIP 21%

Corporate 1%

20.4%

17.5%

15.4%

15.0%

CD 9%

6.2%

10.0%

U.S. Treasuries 1%

5.0% 0.0%

Savings/cash 10%

2.4% 3.3%

0-.25 .25-.5 .5-1 1-2 2-3 Maturity (yrs)

3-4

4-5

City of Arvada Investments as of March 31, 2013 The City’s portfolio as of March 31, 2013 is shown below, which includes credit ratings as of March 31, face value and interest earnings for 2013.

Description

CUSIP

Credit Rating

Coupon Rate

Maturity Date

Face Value

Interest 2013

3/31/2013 Savings JP Morgan Savings

N/A

0.15%

N/A

$5,027,077

$1,854

Wells Fargo Savings

N/A

0.18%

N/A

5,140,621

2,151

JP Morgan Checking

N/A

0.35%

N/A

10,000,000

0

20,167,698

4,005

5,035,334

3,682 3,745

Sub Total Savings Certificate of Deposit FirstBank

CD5343

N/A

0.30%

7/27/13

FirstBank

CD7281

N/A

0.30%

11/30/13

5,121,008

FirstBank

CD7273

N/A

0.25%

5/28/13

4,066,290

0

FirstBank

CD8679

N/A

0.60%

5/5/14

5,062,636

7,377

19,285,268

14,803

Sub Total Certificate of Deposit Corporate Berkshire Hathaway

084664BG5

AA+

5.00%

8/15/13

Sub Total Corporate

3,000,000

75,000

3,000,000

75,000

22,021,169

7,817

Local Government Investment Pool C Safe

N/A

0.17%

N/A

Colo Trust

N/A

0.21%

N/A

Sub Total Local Government Investment Pool

22,137,162

8,867

44,158,331

16,684

Money Market Csip

AAAm

0.22%

Sub Total Money Market

N/A

5,009,265

2,422

5,009,265

2,422

Chart continues next page

23

Description

CUSIP

Credit Rating

Coupon Rate

Maturity Date

Face Value

1.05%

09/09/2013

5,000,000

Interest 2013

3/31/2013 US Agency FNMA

3136FPEL7

AAA

FHLB

3133727K4

AAA

2.13%

12/28/2015

2,000,000

FNMA

3136FTDG1

AAA

1.05%

10/21/2015

5,000,000

FNMA

3136FTM89

AAA

0.80%

02/24/2016

5,000,000

FFCB

3133EAKP2

AAA

1.36%

04/04/2017

5,000,000

FNMA

3136G0DZ1

AAA

0.65%

04/26/2016

3,000,000

FNMA

3136G0FS5

AAA

1.25%

05/17/2017

3,000,000

FNMA

3136G0GT2

AAA

1.05%

11/14/2016

5,000,000

FNMA

3136G0HP9

AAA

0.60%

05/29/2015

3,000,000

FNMA

3136G0RX1

AAA

1.00%

07/26/2017

5,000,000

25,000

FHLB

313380C70

AAA

0.55%

02/08/2016

5,000,000

13,750

FFCB

3133EAH27

AAA

0.43%

08/13/2015

5,000,000

10,750

FNMA

3136G0W1

AAA

0.55%

02/22/2016

5,000,000

13,750

FNMA

3136G0XD8

AAA

1.00%

08/28/2017

6,000,000

30,000

FNMA

3136G0XW6

AAA

0.00%

02/02/2017

3,000,000

7,500

FFCB

3133EAU22

AAA

0.68%

09/12/2016

5,000,000

17,000

FHLB

313380U96

AAA

0.50%

10/16/2015

3,000,000

FHLB

313380U88

AAA

0.80%

04/17/2017

3,000,000

FFCB

3133EC2L7

AAA

0.44%

11/13/2015

5,000,000

FFCB

3133EC3M4

AAA

0.60%

11/21/2016

3,000,000

FHLMC

3134G3V98

AAA

0.70%

11/21/2016

5,000,000

FHLB

313381QX6

AAA

0.55%

07/25/2016

3,000,000

FHLB

313381ZP3

AAA

0.43%

02/12/2016

5,000,000

FHLB

313382F65

AAA

0.60%

03/27/2018

5,600,000

FHLB

313382FL2

AAA

0.63%

03/27/2018

5,000,000

FHLB

313382HD8

AAA

0.70%

12/27/2016

5,000,000

FHLB

313382HT3

AAA

0.75%

03/27/2017

5,000,000

Sub Total Agency

26,250

20,000

117,600,000

164,000.00

2,000,000

78,750

US Treasury T-Bond

912828KY5

AAA

2.63%

Sub Total US Treasury TOTAL

06/30/14

2,000,000

78,750

$211,220,561

$355,665

Investment Management Focus - 2013 2013 continues to be a struggle for the capital markets. We will continue to monitor the two items of focus we have highlighted below.

Diversification of Maturities: We will continue to keep LGIP balances at levels to meet operating needs to capture attractive interest rates. We will focus on a blended strategy which calls for emphasis in short-term positions as well as long-term positions (5 years in the City’s case), but also staggering maturities in between to smooth the revenue stream. This will allow the ample cash should the City experience unexpected needs, allow us to take advantage of better coupons in longer maturity buckets and the ability to capitalize on investment opportunities if/when yields begin to recover.

Agency spreads are tighter, and callables will get better yield- Call provisions are a tool used by issuers to refinance debt at a more attractive rate.

Our focus will be to purchase callable securities with a call “lockout” period of six months or more to enhance investment income over the LGIP funds.

24

Finance Department • 8001 Ralston Road • Arvada, Colorado 80002 (720) 898-7120 • www.arvada.org