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.
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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
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$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
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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