City of Arvada 2014 Third Quarter Financial Report

2014 Third Quarter

Financial Report

Table of Contents Overview........................................................... 1 General Fund................................................... 3 Arvada Center.................................................. 7 Parks Fund....................................................... 9 Special Revenue Funds................................ 11 Capital Improvements Fund.........................13 Enterprise Funds........................................... 15 Internal Service Funds.................................. 21 City of Arvada Investment Report............... 25

overview

2014 Third Quarter The City of Arvada continues to be in a historical growth pattern with revenues up across the board. This includes year-over-year increases in sales tax (7.3%), use tax (2%) and auto use tax (11%), but the real story continues to be the building activity. The chart below represents single-family building permits.

Through the first nine months we have issued 471 permits, an increase of 38% over 2013, and the largest number of permits in the last 15 years. Revenue from these permits has grown 45% over 2013 and is already one million dollars over budget. If the mild weather continues into and through the 4th quarter, we should set a record high for single-family permits.

General Fund Building Revenue through September 480

$8,000,000

420

$7,000,000

360

$6,000,000

300

Dollars

$5,000,000

240

$4,000,000

180

$3,000,000 120

$2,000,000 60

$1,000,000 $0 GF Building Revenue Single Family (Detached) Permits

0

2010 $ 3,446,002

2011 $ 3,182,772

114

99

2012 $ 4,044,707 253

2013 $ 4,873,086 341

2014 $ 7,087,076 471

As one would expect, the largest increases in sales tax are being seen in Restaurants, Auto Care, Furniture, Flooring, Appliances and Equipment. All of these categories are related to the building activity and the increased number of new residents.

When this third quarter report went to print, the initial contract to start construction on the Olde Town Transit Hub was approved by City Council. This project, expected to last 18 months, will transform the Wadsworth stop on the Gold Line Extension into a destination for Arvada residents and others wanting to visit Olde Town. Through conservative fiscal practices and improving economic conditions, the City will be able to cash finance its share of the estimated $30 million dollar price tag. RTD, CDOT and others are also contributing to this monumental undertaking. Opening date is scheduled for fall 2016.

The Arvada Center continues to work on cost-control measures while maintaining performances at a high level. Year-over-year expenditures are down almost 4% with revenues being flat. These control measures have led to a positive income balance at the end of the third quarter. There are some large expenditures planned for the fourth quarter which may result in the Center needing additional cash support to break even for 2014.

The Police Tax Increment Funds are also seeing the benefits of a recovering economy. Sales Tax revenues are up over 7% with Building Use Tax experiencing a 22% increase. These revenues will be put towards increasing our police force with 4 new police officer positions set to start in January 2015. The Funds will also start setting aside dollars in anticipation of building a third substation in the western part of Arvada.

1

The Housing Authority has been able to maintain support for over 500 families with a monthly rent subsidy, all while dealing with a 5% mandatory reduction in its Federal funding. By using some identified historical reserves, the Authority has kept its number of clients at or near the maximum allowed.

The CIP Fund has experienced some large expenditures in 2014, including Ralston Central Park, Long Lake Ranch restrooms, the completion of the two police substations and development costs related to the Olde Town Transit Hub. 2015 will see the completion of Britton and Griffith Parks and ongoing construction on the Transit Hub. The 2015-2016 Budget was approved by City Council on October 22. The budget includes maintaining City services across the board while adding some positions to help out with demand. The positions we are adding are directly tied to the increased building activity so that the City can better meet the demands.

We feel very fortunate to be off to such a good start. Assuming the final three months of the year stay consistent, we should end the year in good financial condition and with some additional funds that we can apply towards our growing list of capital needs.

Assuming the final three months of the year stay consistent, we should end the year in good financial condition and with some additional funds that we can apply towards our growing list of capital needs.

2

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 General Fund • Transferto the Capital Improvements Fund for new parks, transportation and other infrastructure projects Beginning Fund Balance The following table provides a comparison of budgeted cash balances, revenues and expenditures to budget and prior year amounts in the same areas.

The General Fund began 2014 with a $25,675,000 fund balance. Some of this fund balance, $3,008,076, was dedicated to 2013 carryover and one-time items not completed in 2013. An additional $3,125,000 of onetime funds was added to the Capital Fund for Gold Line TOD improvements. Removing these items, revenue and expenditure budgets are in balance for 2014.

2014 Budget

As of 09/30/14

$25,675,000

$25,675,000

$71,572,813

$54,261,127

$48,739,995

Ongoing

69,459,872

45,623,615

43,429,109

Capital

6,908,690

-

-

JPPHA

1,455,000

200,000

200,000

$77,823,562

$45,823,615

$43,629,109

8,437,512

5,110,886

Revenues

As of 09/30/13

EXPENDITURES

Total Expenditures Income/(Loss)

(6,250,749)

Ending Fund Balance

$19,424,251

$34,112,512

GENERAL FUND REVENUE Sales Tax 49%

Property Tax 6%

Use Tax 2%

Auto Use Tax 7% Other 20% Franchise Fees 6%

Interest 1%

Court Fines & Fees 2%

Building Use Tax & Permits 7%

Revenue Highlights Overall, revenues are up 11% compared to the same time period in 2013. In general, revenues are in line with or exceeding the 2014 budget estimate for the majority of revenue categories. The major revenue categories of sales tax, use tax, property tax, building and intergovernmental revenues are discussed in more detail in the “Revenue Highlights” section. The investment report at the end of this document will provide details of the City’s investments. Investment revenue will continue to be low as the current investment environment is not expected to change until late 2015.

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Sales Tax Sales Tax Collections

The graph shows actual third quarter sales tax collections from 2010 to 2014.

Sales tax collections lag one month; therefore, collections through the third quarter represent eight months. The City has now seen an increase in third quarter sales tax collections for six straight years (2009-2014).

Sales tax receipts for the first eight months of 2014 are 7.3% above 2013 actuals. Based on the postive trend of sales tax revenue, the sales tax budget was revised to $42,215,271 and sales tax collections are on track to meet or exceed the revised budget.

$45,000,000 $40,000,000 $35,000,000 $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $0 Sales Tax

09/30/2010 $22,684,401

09/30/2011 $23,156,589

09/30/2012 $24,552,903

09/30/2013 $25,953,189

09/30/2014 $27,844,593

2014 Budget $42,215,271

09/30/2014

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

Use Tax Collections

$10,000,000 $9,000,000

General use tax is slightly more than 2013 actuals through nine months and will be close to the revised budget of $1.5 million if this source of revenue follows the trend from 2013.

$8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000

Building use tax for 2014 is at $3.4 million which is one millon over the revised budget. This is a result of the 471 single-family permits issued in 2014.

$1,000,000 $0

$800,273

$897,032

$682,027

$873,197

$890,495

2014 Budget $1,538,799

Auto

$2,605,134

$2,894,875

$3,239,957

$3,516,156

$3,914,176

$5,375,000

Building

$1,423,798

$1,495,301

$1,898,048

$2,348,796

$3,429,533

$2,400,000

General

09/30/2010

09/30/2011

09/30/2012

Building

Auto use tax collections are showing a 11% increase over 2013 collections and are on track to exceed the 2014 budgeted amount of $5,375,000.

4

Auto

09/30/2013

General

Property Tax The City’s property tax rate is 4.31 mills per $100 of valuation.

In Colorado, the mill rate is placed on the assessed valuation. The following graph illustrates the yearto-date collections for the current and past four years.

Property Tax Collections

$5,500,000 $5,000,000 $4,500,000 $4,000,000 $3,500,000 $3,000,000

Currently, property tax receipts are slightly above the 2013 receipts for the first nine months of the year and might fall slightly short of the budgeted amount of $4.65 million.

$2,500,000

A majority of property tax revenues are received in the first two quarters.

Property Tax

$2,000,000 $1,500,000 $1,000,000 $500,000 $0

09/30/2010 $4,571,151

09/30/2011 $4,594,045

09/30/2012 $4,457,676

09/30/2013 $4,532,720

09/30/2014 $4,565,024

2014 Budget $4,650,000

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 between $4.5 million and $4.7 million in the past five years and are budgeted for a little more than $4.6 million in 2014. Road and Bridge funds are disbursed quarterly. HUTF funds are received monthly and the graph shows eight months of revenue. While these funds have been a stable revenue source, the budget for these revenues was reduced based on the actual collections through nine months.

Intergovernmental Revenues $5,000,000 $4,500,000 $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 HUTF Jefferson County

09/30/2010

09/30/2011

09/30/2012

09/30/2013

09/30/2014

$2,506,204

$2,528,738

$2,549,159

$2,539,390

$2,600,435

2014 Budget $3,895,536

$848,108

$754,282

$834,335

$701,103

$715,791

$720,750

Jefferson County

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HUTF

GENERAL FUND EXPENDITURES Miscellaneous 1%

Transfers 18%

Debt Service 5% Personnel 50%

Contracts 10%

Supplies and Expenses 7% Services and Charges 9%

Expenditure Highlights Expenditures in 2014 rose 5% over 2013. The compherensive plan and the use of outside consultants for building and plan reviews make up the majority of this increase. Personnel and other ongoing operating costs make up the difference, increasing at just over 3%. All of these items are in the budget for 2014. The transfer to the CIP fund, which makes up all of the Capital budget listed above, will occur in the forth quarter.

Salary and Benefit Savings Salary & Benefits Salaries & Wages

2014 Budget

As of 09/30/14

$28,879,080

As of 09/30/13

$19,122,680

$18,487,630

-

-

Vacancy Savings

(782,730)

Overtime

940,502

545,482

595,407

Group Insurance

5,179,173

3,486,183

3,105,420

Retirement

3,292,954

2,207,871

2,154,873

Medicare

343,436

232,997

218,550

Temporary Wages & SS

541,949

181,926

278,328

Other

365,968

249,096

259,304

$38,760,332

$26,026,235

$25,099,512

Total

The 8.4% decrease in Overtime expenditures was primarily due to drops for both PD and the Streets Division’s snow plowing operations. Substantial drops in Temporary Wage & Social Security Expenditures for Public Works versus 2013 are reflected in that decrease.

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ARVADA CENTER

ARVADA CENTER

Arvada Center

Through the third quarter 2014, the Arvada Center continued to decrease expenses compared to 2013. Total expenditures are down almost 4%. Revenue has decreased 1% from last year. The result is a net improvement over the first nine months of 2013 of $313,000. With the decrease in expenditures and 1% decrease in revenues from 2013, the Center is now showing positive income through the third quarter of 2014. The fourth quarter is always the most difficult with so much competition for your entertainment dollars.

Revenue Highlights The third quarter continues the trend of decreased revenues as compared to 2013. However, that revenue decrease is steady from the second quarter at 1%. In the first quarter the decrease was over 4%. Ticket sales through the third quarter 2014 are showing an increase over 2013 ticket sales of approximately 4%. Year-to-date consignment art sales in 2014 are 8.5% lower than 2013, which contributes to the overall 1% revenue decrease.

Expenditure Highlights By far the largest area of reduced expenses is in the Performing Arts Division.

Performing Arts has decreased expenses by over $182,000 as compared to 2013. Marketing and Patron Services has also decreased significantly. These decreases can be attributed to a number of factors, but primarily they are due to the evolving approach to play productions that require less expense through cast, design and labor.

Arvada Center

2014 Budget

Beginning Fund Balance

$

As of 09/30/14

As of 09/30/13

232,000

$ 232,000

$ 6,282,791

$3,916,215

$3,915,694

SCFD

1,096,970

768,407

767,211

City Cash Transfer

1,643,122

1,303,592

1,232,341

REVENUES Generated

City In-Kind Transfer Total Revenues

2,040,000

-

-

$11,062,883

$5,988,213

$5,915,246

$ 9,112,374

$5,811,662

$6,051,722

2,040,000

-

-

$11,152,374

$5,811,662

$6,051,722

EXPENDITURES Ongoing In-Kind Total Expenditures Income/(Loss)

(89,491)

Ending Fund Balance

7

$142,509

176,551 $408,551

(136,475)

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

09/30/2010 $680,527

09/30/2011 $706,943

09/30/2012 $758,167

09/30/2013 $767,211

09/30/2014 $768,407

2014 Budget $1,096,970

The largest portion of the Scientific and Cultural Facilities District (SCFD) grant contributions was received in September. Currently, contributions are up slightly over 2013 but it looks like we will be under the 2014 budget projection. The difficulty with projecting this grant revenue is that there is increased competition each year from other arts and cultural facilities. The Arvada Center continues to be the leader in the TIER 2 institutional category for funding.

City of Arvada Contributions $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 In-Kind Cash

09/30/2010 $1,519,716

09/30/2011 $1,475,453

09/30/2012 $1,573,123

09/30/2013 $1,587,997

09/30/2014 $1,530,000

2014 Budget $2,040,000

$906,451

$886,982

$1,232,341

$1,232,341

$1,303,592

$1,643,122

The cash support for the Arvada Center in 2014 is budgeted to stay at $1,643,122, which is the same level as 2013. This transfer is made monthly. The In-kind support is calculated at the end of the year and is tracking to budget.

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PARKS FUND

PARKS FUND

Parks Fund Revenue Highlights Parks Fund year-to-date revenue continues to track at a pace exceeding 2013 levels. City attributable Jefferson County Open Space Funds, which represent the largest source of Parks Fund revenue, are up compared to last year. The city cash transfer is budgeted to be 3% greater in 2014 compared to 2013.

Expenditure Highlights 2014 Parks fund expenditures are within 6% of 2013 spending levels and are in line with projections for the year.

Parks Fund

2014 Budget

Beginning Fund Balance

As of 09/30/14

As of 09/30/13

$4,300,000

$4,300,000

$3,514,740

$2,036,513

$1,979,571

2,971,913

2,228,935

2,162,659

APEX Reimbursement

954,810

7,349

-

Other

187,848

213,129

141,946

$7,629,311

$4,485,926

$4,284,176

$7,881,273

$5,125,862

$4,844,862

-

-

10,786

$7,881,273

$5,125,862

$4,855,648

REVENUES Open Space City Cash Transfer

Total Revenues EXPENDITURES Ongoing Capital Total Expenditures Income/(Loss)

(251,962)

Ending Fund Balance

9

$4,048,038

(639,936) $3,660,064

(571,472)

PARKS FUND REVENUE

Parks Fund Revenue

$8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $-

$1,952

$2,040

$2,541

$-

$7,349

2014 Budget $954,810

Cash Transfer

$2,332,470

$2,130,205

$2,106,033

$2,162,659

$1,733,616

$2,971,913

Open Space

$2,670,871

$1,789,135

$1,867,491

$1,689,316

$2,036,513

$3,514,740

APEX

09/30/10

09/30/11

09/30/12

10

09/30/13

09/30/14

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 funds 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 accounts for the .21 cent sales tax for police services and the second accounts for the .25 cent sales tax. Sources in the funds 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, revenue trends in the tax increment fund will closely follow those in the general fund.

Revenue Highlights Sales Tax and Audit Revenue increased in the third quarter by 7.51% while Use Tax continues its upward increase by just over 22% in comparison to the 2013 third quarter. Not including the one-time recovery of $26,902 from the Jefferson County Emergency Communications Authority in 2013, Recovered Costs reflects a 2.25% decrease from third quarter 2013.

Recovered costs include: Enforcing Underage Drinking Laws (EUDL), a Federal grant, and Rocky Mountain High Intensity Drug Trafficking Association (HIDTA), a State grant. .21 and .25 Tax Increment Funds

2014 Budget

As of 09/30/14

As of 09/30/13

Beginning Fund Balance

$7,979,000

$7,979,000

$6,415,140

$4,403,165

$4,095,508

1,311,541

1,264,835

1,035,495

117,000

268,565

162,071

$7,843,681

$5,936,565

$5,293,073

Ongoing

$7,525,559

$4,816,859

$4,776,780

Capital

3,344,728

2,524,736

1,932,177

$10,870,287

$7,341,595

$6,708,956

(3,026,606)

(1,405,030)

(1,415,883)

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

Total Expenditures Income/(Loss) Ending Fund Balance

$4,952,394

$6,573,970

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Expenditure Highlights 2014 third quarter salaries increased by $11,992. Overtime costs decreased by 16%, resulting in a net savings of $10,784 in comparison to the same time period in 2013. Additionally, Assignment Pay, Shift Differential and Beeper Pay reflected a net increase of $8,391 due to the realignment of personnel within the Community Stations. Additional benefits including Group Insurance, Retirement, Medicare and Long-Term Disability show an increase of just under 5%, with Group Insurance and Medicare having the largest combined increase in that segment by $47,030. Overall Personnel Expenditures in comparison to the third quarter 2013 have increased less than 1%.

Capital Expenditures in 2014, all related to the completion of the Community Stations, represent nearly all the final project costs. Installation of Signal amplifiers (BDAs) to boost radio reception within the stations is one of the final projects remaining.

Community Development Community Development Fund

2014 Budget

As of 09/30/14

Beginning Fund Balance

$6,896,000

$6,896,000

$114,737

$42,358

$309,825

668,000

402,574

374,688

City Cash Transfer

45,000

33,750

33,750

Interest/Other

19,500

7,508

7,211

Total Revenues

$847,237

$486,190

$725,475

$861,551

$415,734

$335,890

380,625

286,199

274,460

80,000

80,000

-

170,077

170,077

-

$1,492,253

$952,011

$610,350

(465,821)

115,125

Revenue Highlights

As of 09/30/13

The decline in Recovered Revenues versus 2013 was primarily due to a one-time $150,000 repayment last year on a promissory note for a 2010 loan made to the JeffCo Housing Authority for repairs and upgrades to the Parkview Village Apartments. Lower deferred loan repayments make up the rest of the difference.

Revenues Recovered Grants

Expenditure Highlights Funding for energy-efficiency audits and improvements for eligible housing represents most of the year-over-year increase in Ongoing Expenditures. This year’s Capital Project Transfer reflects payments for the Memorial Neighborhood Park Revitalization project. It’s worth noting that the wide gap between budgeted Revenues and Expenditures reflects the anticipated use of some HODAG funding in 2014.

Expenditures Ongoing Essential Home Repairs Loans Capital Project Transfer Total Expenditures Income/(Loss) Ending Fund Balance

(645,016) $6,250,984

$6,430,179

Arvada Housing Authority Arvada Housing Authority Beginning Fund Balance

2014 Budget

As of 09/30/14

$ 195,000

$ 195,000

$

$

Revenue Highlights

As of 09/30/13

The Housing Authority is operating at a 95% proration, or a 5% reduction, in Grants Revenue as compared to prior years. This decrease in funding was reflected in the decrease in Grants Revenue.

Revenues Recovered Grants

19,178

18,139

$

18,295

3,900,000

2,518,163

2,740,045

26,000

50,000

49,846

Interest/Other

5,464

216

477

Total Revenues

$3,950,642

$2,586,518

$2,808,663

Ongoing

$ 430,579

$ 239,638

$ 284,966

Rents

3,532,200

2,480,279

2,765,862

30,420

19,767

36,846

$3,993,199

$2,739,684

$3,087,674

Transfers

Expenditure Highlights The Arvada Housing Authority was assisting 508 families with monthly rent subsidies as of September 30th. These subsidies constituted approximately 90% of the Fund’s expenditures thus far in 2014. The drop in Rents Expenditures corresponds to the decrease in Grants Revenue.

Expenditures

Total Expenditures Income/(Loss) Ending Fund Balance

(42,557) $ 152,444

(153,166) $

EOC ENERGY ASSISTANCE 2010-2014 through September - Dollars (Grants)

(279,011)

41,834

$50,000 Total Dollars

Transfers

The City directly receives funding from Energy Outreach Colorado (EOC), a nonprofit corporation, and disburses it to low-income residents of Arvada for assistance with costs related to energy.

$40,000 $30,000 $20,000 $10,000 $0

2010 Dollars $20,609

12

2011 $40,972

2012 $45,500

2013 $32,462

2014 $33,242

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.

CAPITAL iMPROVEMENT FUND Revenue Highlights In 2014, the majority of the revenue in the CIP Fund will consist of transfers from the General Fund, Water Fund and Lands Dedicated Fund.

The revenues will also include a one-time transfer of $3,150,000 from the General Fund for the Olde Town Transit Hub.

Expenditure Highlights CIP Administration includes expenditures for the construction at Ralston Creek, the new police radio system and the purchase of property for the expanded plaza at the Olde Town station and design work for the Olde Town Transit Hub. The expenditures in the Parks area include construction at Ralston Central Park, Long Lake Ranch restrooms, Memorial Neighborhood Park Revitalization project, renovation and construction of play areas at multiple parks, and tap fees for Maverick Mesa and Church’s Crossing parks. Smaller projects in the Transportation area include Garrison Street Trail, traffic control equipment replacement, traffic signal replacement and design work for two projects on 72nd Avenue and signal modification betterments along the Gold Line.

Capital Projects Capital Improvement Fund Beginning Fund Balance

2014 Budget

As of 09/30/14

As of 09/30/13

$44,830,000

$44,830,000

$4,358,690

$2,114,681

$3,095,587

CIP Administration

$1,974,070

$5,010,676

$1,942,736

CIP Street Projects

422,000

1,040,443

463,416

CIP Traffic Projects

3,026,382

1,524,139

735,261

790,230

3,593,714

1,268,634

51,500

248,973

255,302

$6,264,182

$11,417,945

$4,665,349

Revenues Expenditures

CIP Park Projects CIP Arvada Center Expenditures Income/Loss Ending Fund Balance

(1,905,492)

(9,303,264)

$42,924,508

$35,526,736

13

(1,569,762)

Revenues to the CIP fund in 2014 include a one-time transfer of $3,150,000 from the General Fund for the Olde Town Transit Hub.

14

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 the Water Fund, the Wastewater Fund, the Stormwater Fund, the Golf Fund and the Hospitality Fund.

Water Fund Water Fund Beginning Fund Balance

2014 Budget

As of 09/30/14

As of 09/30/13

$66,779,000

$66,779,000

$20,026,271

$12,808,614

$12,757,767

Tap Fees

4,835,189

5,663,693

5,075,958

Interest

266,645

187,239

313,292

Other

682,972

1,459,514

5,583,368

$25,811,077

$20,119,060

$23,730,385

$16,845,528

$10,687,986

$15,268,295

Debt Service

2,260,700

167,361

178,926

Major Capital Maintenance

4,065,596

3,187,542

2,691,856

Capital

4,096,356

1,020,953

357,470

$27,268,180

$15,063,843

$18,496,548

5,055,217

5,233,837

REVENUES Water Charges

Total Revenues

Revenue Highlights

EXPENDITURES Ongoing

Total Expenditures Income/(Loss) Ending Fund Balance

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

(1,457,103) $65,321,897

$71,834,217

15

Revenues from Water Charges were up 0.4% through three quarters, with consumption down 2.8% over the same period in 2013. Water taps continue to be bought at an incredible pace, reflecting both continued substantial building activity and the purchase of three substantial irrigation taps for developer-constructed parks in northwest Arvada. The significant year-over-year drop in Other Revenues was due to a $4 million pass-through payment in 2013 related to water rights acquisition received from the Jefferson Center Metropolitan District (JCMD).

Expenditure Highlights Four million dollars of 2013 Ongoing Expenditures represented 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 timing of payments for raw water purchases from Denver Water round out the bulk of differences in Ongoing Expenditures between this year and last. Increases in both Major Capital Maintenance and Capital Expenditures are due to the timing of annual expenditures.

Water Consumption This chart, with data provided by Utilities, shows water consumption through September by year since 2010.

WATER CONSUMPTION

Thousands of Gallons

As of September

4,500,000 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0

1000s of Gallons

2010 3,573,218

2011 3,386,517

2012 4,261,633

2013 3,536,589

2014 3,438,791

Water Tap Fees This chart shows water tap fee revenue through September by year since 2010.

WATER FUND - TAP FEES

Dollars

As of September

6,000,000 5,600,000 5,200,000 4,800,000 4,400,000 4,000,000 3,600,000 3,200,000 2,800,000 2,400,000 2,000,000 1,600,000 1,200,000 800,000 400,000 0 Tap Fees

2010 1,127,111

2011 1,683,340

2012 2,662,486

16

2013 5,075,958

2014 5,663,693

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

WasteWater Fund

As of 09/30/13

Revenue Highlights

$7,665,501

$7,573,254

Expenditure Highlights

380,403

546,327

555,486

633,620

72,310

56,203

2014 Budget

As of 09/30/14

$11,893,000

$11,893,000

$11,730,087

Tap Fees Interest

Beginning Fund Balance

Sewer Tap Fee Revenues, though down 2% year-todate versus 2013, remain at an historically high level due to continued residential construction.

REVENUES Sewer Charges

Other

594,738

442,833

406,549

$13,338,848

$8,726,971

$8,591,493

$7,500,000

$5,535,546

$5,417,243

Ongoing

3,128,500

1,993,995

2,093,153

Major Capital Maintenance

1,961,852

593,844

1,533,822

204,600

-

-

$12,794,952

$8,123,384

$9,044,218

543,896

603,586

$12,436,896

$12,496,586

Total Revenues

Treatment charges from the Metro Wastewater Reclamation District represented about two-thirds of Total Expenditures year-to-date. The substantial drop in Major Capital Maintenance is due to the timing of and payments for sewer system work.

EXPENDITURES Metro District

Capital Total Expenditures Income/(Loss) Ending Fund Balance

(452,725)

Wastewater Tap Fees This chart shows sewer tap fee revenue through September by year since 2010.

WASTEWATER FUND - TAP FEES

Dollars

As of September

$560,000 $520,000 $480,000 $440,000 $400,000 $360,000 $320,000 $280,000 $240,000 $200,000 $160,000 $120,000 $80,000 $40,000 $Tap Fees

2010 $130,041

2011 $152,845

2012 $356,045

17

2013 $555,486

2014 $546,327

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

Stormwater Fund Beginning Fund Balance

2014 Budget

As of 09/30/14

As of 09/30/13

$5,941,000

$5,941,000

$3,147,497

$2,342,044

$2,388,844

28,031

193,410

55,302

$3,175,528

$2,535,454

$2,444,145

$2,062,029

$855,707

$854,051

REVENUES Stormwater Fee Other Total Revenues EXPENDITURES Ongoing Debt Service

932,800

699,600

699,366

5,415,414

1,104,096

4,192,340

Total Expenditures

$8,410,243

$2,659,403

$5,745,757

Income/(Loss)

(5,234,715)

Capital

Ending Fund Balance

$706,285

(123,949)

(3,301,611)

$5,817,051

Revenue Highlights The City’s Stormwater Utility Fee Revenue, which represents the vast majority of all revenue for the Stormwater Fund, came in consistent with 2013 levels. The rate for the Stormwater Utility Fee has not changed since 2009. Most of the increase in Other Revenues is due to recovered costs from other jurisdictions participating in drainage projects with the City.

Expenditure Highlights Capital Expenditures thus far in 2014 include final bills for the Garrison Street Bridge Replacement and related Ralston Creek channelization, as well as initial work on flood threat mitigation in the wake of last year’s significant flooding. Higher Garrison project expenditures in the first half of 2013 account for the substantial drop in Capital Expenditures.

18

Golf Fund Revenue Highlights West Woods rounds were up 6% over the 2013 same time period due to less special discounting. (Metro area rounds were up 1% - Golf Datatech.) Improved course conditions are a positive factor. A DryJect aeration process with quicker green recover period eliminated the need for an aeration discount in September. Lake Arbor is offering more specials to generate rounds. The new senior category green fee is drawing from annual and regular rounds.

Expenditure Highlights Total expenditures are more than 6% below 2013 levels, mostly due to spending less on capital projects. Other highlights include hiring three new Golf Maintenance employees approved in the 2014 budget and increasing staffing levels at both the Lake Arbor and West Woods restaurants. All Grow the Game/Player Development programs continue to sell out.

2014 Budget

As of 09/30/14

$ 101,000

$ 101,000

Golf Courses

$3,383,085

$2,660,448

$2,367,445

Restaurants

1,193,135

1,158,277

999,561

209,475

122,194

150,971

$4,785,695

$3,940,919

$3,517,976

Golf Courses

$2,395,843

$1,452,632

$1,560,372

Restaurants

1,258,466

1,030,602

967,031

Administration

938,500

901,562

728,509

Capital

103,000

13,549

383,657

$4,695,809

$3,398,344

$3,639,570

89,886

542,574

$ 190,886

$ 643,574

Golf Fund Beginning Fund Balance

As of 09/30/13

REVENUES

City Cash Transfer Total Revenues EXPENDITURES

Total Expenditures Income/(Loss) Ending Fund Balance

Golf Rounds by Type - January thru September 2014 WEST WOODS

Regular

Special

Tournament

Annual

Senior

Junior

Other

Total

2013

16,538

7,989

4,770

5,344

4,304

833

367

40,145

2014

23,200

2,394

4,264

6,042

5,320

834

338

42,392

6,662

-5,595

-506

698

1,016

1

-29

2,247

40%

-70%

-11%

13%

24%

0%

-8%

6%

LAKE ARBOR

Regular

Special

Tournament

Annual

Senior

Junior

Other

Total

2013

17,496

1,756

940

14,615

0

633

887

36,327

2014

11,399

4,636

716

13,417

3,765

651

919

35,503

-6,097

2,880

-224

-1,198

3,765

18

32

-824

-35%

164%

-24%

-8%

100%

3%

4%

-2%

19

(121,593)

Hospitality Fund Revenue Highlights Year-to-date revenue is 5.6% greater than in 2013, reflecting an increase in events held and the number of guests served. 51 more groups have been served this year over last, representing 4,743 more guests.

The third quarter market segments maintained year-to-date performance with a strong increase in the Association, Religious and Corporate market segments. The Association market increased by $13,832 over last year and $31,297 over the last five-year average. The Corporate segment showed a positive increase over last year of $38,528. The continuation of the decline in the Arvada Center events is noted with a $12,814 decrease from last year and a 60.70% decrease in revenue over the past five-year average. This is due to the Arvada Center’s transition away from Hospitality. Revenue from other in-house events continues to decline as well. Year to date after the third quarter, a decrease of $19,477 was realized, a decline of 41% over the past five-year average. In addition, revenues were maintained from last year’s numbers and show a modest increase of $5,001 despite a decrease of over $32,000 in the Arvada Center and in-house market segments.

Hospitality Fund Beginning Fund Balance

2014 Budget

As of 09/30/14

As of 09/30/13

$ 554,000

$ 554,000

$1,002,310

$ 562,982

REVENUES Banquets

$ 532,128

Concessions

176,994

157,365

111,991

Miscellaneous

523,074

260,371

284,641

Total Revenues

$1,702,378

$ 980,718

$ 928,760

$ 298,178

$ 220,376

$

1,291,653

686,117

741,988

263,000

-

-

27,468

20,601

194,564

$1,880,299

$ 927,094

$1,031,927

EXPENDITURES Administration Operations Capital Transfer to General Fund Total Expenditures Income/(Loss)

(177,921)

Ending Fund Balance

Expenditure Highlights 2014 Hospitality Fund expenditures are 10% below 2013 spending levels and are in line with projections for three quarters of the year.

Year-to-date revenue is 5.6% greater than in 2013, reflecting an increase in events held and the number of guests served.

20

$ 376,079

53,624 $ 607,624

95,375

(103,167)

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.

Overview

Revenue Highlights

The Insurance Fund, administered by the Risk Management Program 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.

Save for Operations inflated at 3%, which include Risk Management’s personnel costs, contributions by participating Funds generally remain at 2013 levels.

Expenditure Highlights

Risk Management Risk Management Fund

2014 Budget

As of 09/30/14

As of 09/30/13

Beginning Fund Balance

$4,593,000

$4,593,000

2,032,528

1,524,655

1,507,762

70,019

65,820

110,751

$2,102,547

$1,590,475

$1,618,513

$1,993,796

$1,280,785

$1,232,613

645,062

245,339

421,881

$2,638,858

$1,526,124

$1,654,493

Revenues Transfers Other Total Revenues Expenditures Risk Mgmt Administration Risk Mgmt Operations Total Expenditures Income/(Loss) Ending Fund Balance

(536,311) $4,056,689

64,351

(35,980)

$4,657,351

21

A year-over-year increase for the first three quarters in Workers’ Compensation claims expenses comprises nearly all of the net rise in Administration Expenditures. The claims pattern for Workers’ Comp is following a normal variance, with a small number of higher dollar claims impacting the total. This was partially offset by the lack of a one-time contribution for repairs at George Meyers Pool in 2013.

Property claims costs also rose, but are in line with normal ups and downs influenced by the weather. Auto Liability, Auto Physical, and General Liability expenses dropped.

The movement of two City Attorney’s Office positions from the Risk Management Fund to the General Fund earlier this year represents the substantial drop in Operations Expenditures.

An offsetting transfer to the General Fund will be completed later in the year. *Per GASB Statement 10, an additional $807,882 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 for 2013.

Information Technology and Print Services Information Technology Fund

2014 Budget

As of 09/30/14

As of 09/30/13

Beginning Fund Balance

$6,134,000

$6,134,000

Maintenance

$ 959,787

$ 729,282

$ 729,825

Replacement

899,054

719,733

738,755

Print Shop

450,935

243,744

242,843

$2,309,776

$1,692,759

$1,711,422

Maintenance

$1,171,777

$613,112

$670,621

Replacement

949,250

491,879

931,335

Print Shop

501,610

284,706

227,412

$2,622,637

$1,389,697

$1,829,368

Revenues

Total Revenues Expenditures

Total Expenditures Income/(Loss) Ending Fund Balance

(312,861) $5,821,139

303,061

A proposed rate change starting January 1, 2015 will increase revenue to a level that will allow us to sustain the Print Shop operation, allow for continual replacement of equipment and still keep rates well below commercial market averages..

(117,946)

$6,437,061

Overview The Computer Fund provides resources for both 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 this technology. The Print Shop Fund provides ongoing capital support for the City’s printing needs.

Revenue Highlights Revenues in the Maintenance and Replacement funds are still on track for 2014. Print Shop revenues continue to be flat from 2013 to 2014. There is still a proposed rate change starting January 1, 2015 that will increase revenue to a level that will allow us to sustain the Print Shop operation, allow for continual replacement of equipment and still keep rates well below commercial market averages.

Expenditure Highlights Expenditures are currently on track in the Maintenance and Replacement funds. The requested $486,250 to purchase replacement data center infrastructure hardware has occurred. As a reminder, $350,000 was budgeted for expenditures in 2015 but we are seeking to use those funds in 2014 to replace equipment that will not be covered under maintenance after December 2014. We added an additional $138,250 to purchase additional computing capacity to help handle several new initiatives that are currently underway. These are Knowledge Management, test environments, Courts online payments, and enterprise content management. We will replenish the Replacement fund with funds from each of the previously mentioned projects. Print Shop expenditures are above 2013 numbers as a result of the outright purchase of new equipment in the Print Shop. We have a healthy fund balance and used just over $80,000 of the balance to purchase equipment with an expected useful life of seven years. The propsed chargeback model for the Print Shop will allow us to continue to provide a highquality product at a cost well below commercial rates.

22

Vehicles Vehicles Fund

2014 Budget

As of 09/30/14

$6,350,000

$6,350,000

Maintenance Transfers

$2,262,414

$1,690,139

$1,647,435

Replacement Transfers

1,115,772

839,813

836,829

116,579

125,072

116,282

$3,494,765

$2,655,023

$2,600,546

Maintenance

$2,071,728

$1,462,576

$1,534,282

Replacement

1,972,400

1,213,289

1,169,297

$4,044,128

$2,675,865

$2,703,579

Beginning Fund Balance

As of 09/30/13

Revenues

Other Total Revenues Expenditures

Total Expenditures Income/(Loss) Ending Fund Balance

(549,363)

(20,842)

$5,800,637

$6,329,158

2014 Budget

As of 09/30/14

$2,131,000

$2,131,000

$ 431,165

$ 323,476

(103,033)

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 2013 levels. For the City as a whole, Vehicle Maintenance transfers remain roughly at 2013 levels.

Expenditure Highlights A total of 51 units (vehicles and equipment combined) are scheduled for replacement in 2014. In 2013, approximately 30 units were replaced.

Buildings Building Fund Beginning Fund Balance

As of 09/30/13

Revenues Replacement Transfers Other Total Revenues

$ 305,513

134,721

130,096

125,608

$ 565,886

$ 453,572

$ 431,121

Expenditures Replacement

$ 366,681

Capital Lease

117,396

85,398

84,293

$ 484,077

$85,934

$ 168,369

81,809

367,637

262,752

$2,212,809

$2,498,637

Total Expenditures Income/(Loss) Ending Fund Balance

$

536

$

84,076

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 generally remain at 2013 levels. The minor increase is due to both PD Tax Increment Funds beginning to pay into the Fund for future replacements at the Lake Arbor and West Woods Community Stations.

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.

The term of this lease expires in 2016. Payments for the completed replacement of the Arvada Community Food Bank parking lot and concrete repair at the George Meyers Pool were posted at the beginning of the fourth quarter and are not reflected here.

23

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

Operations

Expenditure Highlights

Beginning Fund Balance

Year-to-date expenditures in 2014 are at 68% of budgeted expenditures and are comparable to 2013 expenditures. Salaries and benefits represent the largest expenditure at approximately 45% of the expenditures.

As of 09/30/13

$396,890

Revenue

775,000

585,046

564,289

Expenditures

766,881

521,780

490,081

$405,009

$460,156

Ending Fund Balance

2014

Beginning Cash Balance

$875,781

Expenditures

As of 09/30/14

$396,890

Program

Revenue

2014 Budget

11,936 (223,577)

Ending Cash Balance

664,140

Reserved for Job Creation Program

(23,500)

Reserved for New Entrepreneur Program

(19,500)

Arvada Manufacturing Initiative

(19,200)

Small Business Grant Program Phase 5

(14,144)

Commitments

(476,242)

Available Unallocated Cash Balance

$111,554

24

Revenue Highlights Revenues in 2014 consist of interest income and the repayment of one loan.

Expenditure Highlights Expenditures in 2014 reflect 18 AEDA small business grants and one loan. The grants were used to help Arvada businesses improve signage, landscaping, facades, and site improvements.

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 Overview The portfolio saw a year-to-date third quarter 2014 yield of .653% which is an increase of 14bps when compared to the year-to-date third quarter 2013 yield of .517%. The benchmark yield for the City’s portfolio, as established by the investment policy, is a weighted benchmark of allowable securities. For the third quarter, the weighted benchmark return was .42%, constructed using the average 2014 monthly returns. The City’s portfolio yield has increased over the last four quarters due to slight increases in investment yields. The Feds have left interest rates low as the discount rate remains at .25% and the Federal Reserve 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 $36 million in investment calls during the first three quarters of the year due to the expiration of call “lockout” periods. We are keeping a balance in our checking account due to the fact that the City earns .30% earnings credit on balances in our accounts. This earnings credit offsets monthly banking fees and is higher than the current LGIP rates of .12%. Keeping this balance in our checking account reduces our banking fees but will allow us to quickly invest these funds as interest rates recover. Key information regarding the City’s portfolio is shown in the following tables and graphs:

25

Interest Earnings Portfolio Yield Benchmark Yield Tracking Error

PORTFOLIO PERFORMANCE 09/30/2014 09/30/2013 $774,488 $844,124 0.653% 0.517% 0.420% 0.340% +23bps +18ps

Money Market Savings/Cash CD Corporate LGIP US Agency US Treasury Total

PORTFOLIO CHANGES 09/30/2014 09/30/2013 $1,013,670 $1,012,646 12,498,356 19,910,479 15,151,772 19,320,829 5,995,000 0 18,464,446 28,022,079 115,725,000 112,600,000 0 2,000,000 $168,848,244 $182,866,033

Difference -$69,636 0.136% 0.080% 5bps

Difference $ 1,024 -7,412,123 -4,169,057 5,995,000 -9,557,633 3,125,000 -2,000,000 -$14,017,789

ACCOUNT SUMMARY Par Value Book Value Market Value Unrealized Gain/(Loss)

$168,848,244 $168,848,559 $168,391,092 ($457,152) PORTFOLIO CHARACTERISTICS

Average Duration (yrs) Average Coupon Average Cost YTM Average Market YTM

2.03 0.656% 0.722% 0.837%

PORTFOLIO ALLOCATION

MATURITY DISTRIBUTION

U.S. Agencies, 68.5%

Money Market, 0.6%

38.3%

40.0% 30.0%

22.0%

18.7%

20.0% LGIP, 10.9%

13.3% 5.9%

10.0% Corporate, 3.6% CD, 9.0%

0.0%

Savings/ Cash, 7.4%

26

0-.25

.25-1

1.8% 1-2

2-3

Maturity (yrs)

3-4

4-5

City of Arvada Investments as of Septmeber 30, 2014 The City’s portfolio as of September 30, 2014 is shown below, which includes credit ratings as of September 30, face value and actual interest earnings for 2014.

Description

CUSIP/Ticker

Credit Rating 09/30/2014

Coupon Rate

Maturity Date

Ending Face

Interest

Amount/Shares

Dividends

SAVINGS/CHECKING JPMorgan Chase Savings

CHASE

N/A

0.05%

N/A

1,046,487.25

1,022.75

Wells Fargo Savings

WELLSFARGO

N/A

0.09%

N/A

1,035,868.98

3,287.42

0.30%

N/A

10,416,000.00

Wells Fargo Checking Sub Total Savings/Checking

12,498,356.23

4,310.17

CERTIFICATE OF DEPOSIT FIRSTBANK

CD7281

N/A

0.30%

12/02/2014

5,144,125.42

11,487.15

Vectra Bank

4094504774

N/A

0.30%

03/18/2015

5,003,823.36

3,823.36

Vectra Bank

4049504782

N/A

0.30%

03/18/2015

Sub Total Certificate Of Deposit

5,003,823.36

3,823.36

15,151,772.14

19,133.87

CORPORATE Apple, Inc

037833AH3

AA1

0.45%

05/03/2016

1,410,000.00

3,172.50

Exxon Mobil

30231GAA0

AAA

0.92%

03/15/2017

1,500,000.00

6,715.62

Berkshire Hathaway

084664BX8

AA2

0.95%

08/15/2016

3,085,000.00

29,307.50

5,995,000.00

39,195.62

8,019,393.85

7,394.69

Sub Total Corporate LOCAL GOVERNMENT INVESTMENT POOL C Safe LGIP

CSAFE

AAAm

0.12%

N/A

Colo Trust LGIP

COLOTRUST8001

AAAm

0.12%

N/A

Sub Total Local Government Investment Pool

10,445,051.68

1,273.29

18,464,445.53

8,667.98

1,013,669.78

710.23

1,013,669.78

710.23

MONEY MARKET CSIP MM

CSIP

AAAm

0.09%

N/A

Sub Total Money Market US AGENCY FFCB

3133ED7L0

AAA

0.33%

11/13/2015

5,000,000.00

8,250.00

FFCB

3133ED6Z0

AAA

0.55%

05/12/2016

3,000,000.00

8,250.00

FFCB

3133EC3M4

AAA

0.60%

11/21/2016

3,000,000.00

9,000.00

FFCB

3133ECP40

AAA

0.64%

05/09/2017

5,000,000.00

16,000.00

FFCB

3133EAU22

AAA

0.68%

09/12/2016

5,000,000.00

34,000.00

FFCB

3133EDTR3

AAA

1.09%

08/28/2017

4,125,000.00

0.00

FHLB

313381QX6

AAA

0.55%

07/25/2016

3,000,000.00

16,500.00

FHLB

313382TR4

AAA

0.60%

04/24/2017

5,000,000.00

15,000.00

FHLB

313382HD8

AAA

0.70%

12/27/2016

5,000,000.00

35,000.00

FHLB

313382HT3

AAA

0.75%

03/27/2017

5,000,000.00

37,500.00

FHLB

313382W25

AAA

0.75%

08/15/2017

5,000,000.00

18,750.00

FHLB

313380U88

AAA

0.80%

04/17/2017

3,000,000.00

12,000.00

Chart continues next page

27

Description

CUSIP/Ticker

Credit Rating 09/30/2014

Coupon Rate

Maturity Date

Ending Face

Interest

Amount/Shares

Dividends

FHLB

3134G4ZY7

AAA

1.02%

04/21/2017

3,000,000.00

0.00

FHLB

3133727K4

AAA

2.13%

12/28/2015

2,000,000.00

21,250.00

FHLB

313382F65

AAA

0.60%

03/27/2018

5,600,000.00

37,800.00

FHLB

313382FL2

AAA

0.63%

03/27/2018

5,000,000.00

34,375.00

FHLB

313382T78

AAA

0.55%

04/30/2018

3,000,000.00

8,250.00

FHLB

313382Z63

AAA

0.50%

05/22/2018

5,000,000.00

12,500.00

FHLMC

3134G56W0

AAA

0.65%

12/23/2016

5,000,000.00

0.00

FHLMC

3134G52G9

AAA

1.00%

01/23/2017

3,000,000.00

7,500.00

FHLMC

3134G4Z76

AAA

1.00%

04/07/2017

3,000,000.00

0.00

FHLMC

3134G5A21

AAA

1.15%

12/26/2017

5,000,000.00

0.00

FHLMC

3134G4VU9

AAA

1.15%

09/11/2017

3,000,000.00

17,250.00

FHLMC

3134G5A54

AAA

1.25%

12/26/2017

5,000,000.00

0.00

FHLMC

3134G4KY3

AAA

1.00%

11/26/2018

3,000,000.00

15,000.00

FNMA

3136G0RX1

AAA

1.00%

07/26/2017

5,000,000.00

50,000.00

FNMA

3136G0XD8

AAA

1.00%

08/28/2017

6,000,000.00

60,000.00

FNMA

3136G1LA5

AAA

0.50%

05/15/2018

3,000,000.00

7,500.00

Subtotal Agency

115,725,000.00

481,675.00

TOTALS

168,848,243.68

553,692.87

Investment Management Focus - 2014 2014 continues to be a struggle for the capital markets as the Fed has kept interest rates low, which will continue through 2014. We will continue to monitor the two items of focus we have highlighted below.

Diversification of Maturities: We will continue to keep LGIP and cash and savings balances at levels to meet operating and capital needs. We will focus on a blended strategy which calls for emphasis in short-term positions as well as some long-term positions (5 years in the City’s case), but also staggering maturities in between to smooth the revenue stream. This will allow 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, 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, which are currently yielding 12bps.

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Finance Department • 8101 Ralston Road • Arvada, Colorado 80002 (720) 898-7120 • www.arvada.org Contributors: Bryan Archer, Director of Finance Lisa Yagi, Assistant Director of Finance Ryan Adler, Budget Analyst Deanne Gibboney, Budget Analyst Debra Nielson, Controller Arlene Martinez, Executive Assistant Vesta Weinhauer, Treasury Analyst