2014 Mid-Year
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 Midyear
The “Great Recession� is a distant memory as almost every revenue source has rebounded and is showing positive returns. For the first five months of 2014, sales tax is outpacing 2013 actuals by 6.62%. The growth has been widespread, with double-digit gains in the categories of Fast-Casual Restaurants, Sit-Down Restaurants, Furniture, Appliance and Flooring stores. General Department Stores are not far behind with 4.25% year-over-year growth. The only category showing a decline is Health and Specialty Foods. Auto Use tax, a volatile revenue source, continues its upward trend with a 12.6% increase over 2013. This marks the fifth straight year of growth after bottoming out in 2009. Finally, the story of revenues continues to be the building activity. The graph below shows single-family building permits for the first half of the past five years. As you can see, 2014 has far outpaced any of the other years. In fact, the number of single-family building permits issued through June (298) is greater than the total number of permits issued in any single year from 2005 through 2011. Adding to this activity will be the repairs to roofs, siding and windows caused by the July 7 hail storm in Western Arvada.
Dollars
General Fund Building Revenue through June
315
$4,500,000
280
$4,000,000
245
$3,500,000
210
$3,000,000
175
$2,500,000
140
$2,000,000
105
$1,500,000
70
$1,000,000
35
$500,000 $0 GF Building Revenue Single Family (Detached) Permits
0
2010 $2,141,038
2011 $1,537,119
2012 $2,488,239
2013 $3,337,113
2014 $4,451,433
62
75
157
228
298
Photo: Richard Assmus
Through June, 2014 has outpaced the prior four years in terms of single-family building permits, with more activity expected to follow due to repairs resulting from the July 7 hail storm in Western Arvada.
1
Progress continues on the Gold Line Extension as RTD and Denver Transit Partners are laying track and preparing intersections for the mid-2016 opening. Activity has already started in Olde Town with the closing of parking lots and the demolition of some buildings. Full construction of the parking structure, bus transfer facility and plazas will begin late third quarter. Water charges have reversed the downward trend from the first quarter, up 6.3% for the year. With reservoirs full and no water restrictions, citizens are opting for green lawns! Water taps are on pace to exceed their budget in the third quarter due to the incredible building activity. Tap fees are set aside for future capital needs, such as the Gross Reservoir expansion. West Woods and Lake Arbor continue to have good years with double-digit growth in both restaurant and course-related revenues. A small percentage of this is due to a fee increase implemented in April, with the majority coming from increased rounds and restaurant visits. The hiring of three new golf maintenance employees has the courses in top shape. The City has just completed the 2015-2016 budget process. The City Manager’s recommendations will be presented to Council before Labor Day. Budget overviews and departmental presentations will occupy all of September’s and the first part of October’s workshops, with Council approval in late October.
Photo: Richard Assmus
The City’s current financial picture is positive with resources able to sustain, and in some cases add to, City services. Over the next few years aging areas of the City will see a face lift, starting with Olde Town and eventually moving into Ralston Creek. These are exciting times!
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 one-time 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 06/30/14
$25,675,000
$25,675,000
$71,572,813
$33,461,029
$30,740,643
Ongoing
69,459,872
28,809,639
27,380,567
Capital
6,908,690
-
-
JPPHA
1,455,000
200,000
200,000
$77,823,562
$29,009,639
$27,580,567
4,451,390
3,160,076
Revenues
As of 06/30/13
EXPENDITURES
Total Expenditures Income/(Loss)
(6,250,749)
Ending Fund Balance
$19,424,251
$30,126,390
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 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 report 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 early 2015.
3
Sales Tax Sales Tax Collections
The graph below shows actual second quarter sales tax collections from 2010 to 2014.
$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
06/30/2010 $13,831,761
06/30/2011 $14,281,950
06/30/2012 $15,085,589
06/30/2013 $15,743,984
06/30/2014 $16,788,754
2014 Budget $40,657,040
Sales tax collections lag one month; therefore, collections through the second quarter represent sales tax collections for five months. The City has now seen an increase in second quarter sales tax collections for six straight years (2009-2014). Sales tax receipts for the first five months of 2014 are 6.6% above 2013 actuals. Sales tax collections are on track to exceed the 2014 budget of $40,657,040. As the next ten-year financial plan is reviewed, the sales tax base will be reset to reflect the increased collections.
Use Tax Use Tax Collections
The City has three primary use tax types: general, building and automobile. These are taxes paid in lieu of sales tax on purchases. $9,000,000 $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 General Auto Building
06/30/2010
06/30/2011
06/30/2012
$509,620
$503,006
$394,476
$519,287
$458,523
2014 Budget $1,390,500
$1,518,685
$1,788,104
$1,922,856
$2,036,811
$2,295,021
$5,145,327
$804,671
$614,700
$1,203,992
$1,622,447
$2,209,249
$2,200,000
Building
06/30/2013
Auto
06/30/2014
General
General use tax is $61,000 less than 2013 actuals through six months; however, will be close to the budget of $1.39 million. Building use tax for 2014 is at $2.2 million which is the 2014 budget amount. This revenue source will be adjusted for the revised ten-year plan. Auto use tax collections are showing a 12% increase over 2013 collections. Auto use tax collections are on track to exceed the 2014 budgeted amount of $5,145,327.
4
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 year-to-date collections for the current and past four years.
Property Tax Collections
$5,000,000 $4,500,000 $4,000,000 $3,500,000
Currently, property tax receipts are $161,000 above the 2013 receipts for the first six months of the year and should be on pace to meet the budget amount of $4.75 million.
$3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 Property Tax
06/30/2010 $3,266,618
06/30/2011 $2,642,707
06/30/2012 $3,226,229
06/30/2013 $3,296,677
06/30/2014 $3,463,858
2014 Budget $4,750,000
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 $4.8 million in 2014. Road and Bridge funds are disbursed quarterly. The graph shows the first disbursement received in April. The next disbursement will be received in July. HUTF funds are received monthly and the graph shows five months of revenue. While these funds have been a stable revenue source, they have increased less than 1% in the Intergovernmental Revenues past three years and will not meet the budget for 2014. $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
06/30/2010
06/30/2011
06/30/2012
06/30/2013
06/30/2014
$1,506,893
$1,506,597
$1,534,607
$1,510,437
$1,567,171
2014 Budget $4,039,116
$457,907
$324,825
$367,274
$296,266
$298,400
$783,750
Jefferson County
5
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 third quarter.
Salary and Benefit Savings Salary & Benefits Salaries & Wages
2014 Budget
As of 6/30/14
$28,879,080
As of 6/30/13
$12,663,240
$12,264,669
-
-
Vacancy Savings
(782,730)
Overtime
940,502
392,466
420,589
Group Insurance
5,179,173
2,279,685
2,054,226
Retirement
3,292,954
1,460,595
1,433,616
Medicare
343,436
152,965
144,529
Temporary Wages & SS
541,949
108,788
163,029
Other
365,968
167,517
175,645
$38,760,332
$17,225,256
$16,656,303
Total
The 6.7% decrease in Overtime expenditures was primarily due to drops for both PD and the Streets Division’s snow plowing operations. Substantial drops in costs for both the Streets and Traffic Divisions versus 2013 are reflected in the decreased Temporary Wage & SS Expenditures.
6
ARVADA CENTER
ARVADA CENTER
Arvada Center Through the first six months of 2014, the Arvada Center continued to decrease expenses compared to 2013. Total expenditures are down over 7%. Paired with a revenue decrease of 1% over last year, the result is a net improvement over the first six months of 2013 of $240,000. While the Center is still running a deficit over the first six months of 2014, they continue to move in the right direction.
Revenue Highlights
Expenditure Highlights By far the largest area of reduced expenses is in the Performing Arts Division. Performing Arts has decreased expenses by over $230,000 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
As of 06/30/14
$ 232,000
$ 232,000
$6,282,791
$1,997,785
$2,064,623
1,096,970
278,278
283,286
City Cash Transfer
1,643,122
861,061
821,561
City In-Kind Transfer
2,040,000
-
-
$11,062,883
$3,137,124
$3,169,470
Ongoing
$9,112,374
$3,443,797
$3,719,703
In-Kind
2,040,000
-
-
$11,152,374
$3,443,797
$3,719,703
Beginning Fund Balance
As of 06/30/13
REVENUES Generated SCFD
Total Revenues EXPENDITURES
Total Expenditures Income/(Loss)
(89,491)
Ending Fund Balance
$
142,509
(306,673) $
(550,233)
(74,673)
Photo: P. Switzer
The second quarter continues the trend of decreased revenues as compared to 2013. However, that revenue decrease is now 1%. In the first quarter the decrease was over 4%. Although ticket revenue is the primary driver for the decrease, the expenses related to ticketed events is down significantly more, as stated below.
7
SCFD Revenue $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $0 SCFD
06/30/2010 $247,668
06/30/2011 $248,791
06/30/2012 $248,321
06/30/2013 $283,286
06/30/2014 278,278
2014 Budget $1,096,970
Scientific and Cultural Facilities District (SCFD) grant contributions decreased 2% from 2013. The revenue source should meet its budget for 2014. As the economy improves, the pot of money will increase, as the source of this grant funding is sales tax-based. 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 a 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
06/30/2010 $1,013,144
06/30/2011 $983,635
06/30/2012 $1,048,749
06/30/2013 $1,058,665
06/30/2014 $1,020,000
2014 Budget 2,040,000
$604,300
$591,322
$821,562
$821,561
861,061
1,643,122
The City of Arvada increased the budget for its in-kind support of the Center in 2014 as compared to 2013. The cash support has stayed flat at $1,643,122. Both numbers are set to meet their budget.
The Arvada Center continues to be a leader in the TIER 2 institutional category for funding.
8
PARKS FUND
PARKS FUND
Parks Fund Revenue Highlights 2014 Parks fund year-to-date revenue continued 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 even compared to last year. The city cash transfer is 3% greater in 2014. Also posting increases in 2014 are Majestic View Nature Center revenues and pavilion rentals.
Expenditure Highlights 2014 Parks fund expenditures are within 6% of 2013 spending levels and are in line with projections for the first half of the year. Parks Fund Beginning Fund Balance
2014 Budget
As of 06/30/14
As of 06/30/13
$4,300,000
$4,300,000
$3,514,740
$1,101,534
$1,096,646
2,971,913
1,485,957
1,441,773
APEX Reimbursement
954,810
7,349
Other
187,848
458,845
89,806
$7,629,311
$3,053,684
$2,628,225
$7,881,273
$3,014,857
$2,853,322
-
-
-
$7,881,273
$3,014,857
$2,853,322
REVENUES Open Space City Cash Transfer
Total Revenues
-
EXPENDITURES Capital Total Expenditures Income/(Loss) Ending Fund Balance
(251,962) $4,048,038
38,828
(225,097)
$4,338,828
Photo: Richard Assmus
Ongoing
9
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
APEX Cash Transfer Open Space
06/30/10
06/30/11
06/30/12
06/30/13
06/30/14
$17
$-
$2,541
$-
$7,349
2014 Budget $954,810
$1,554,980
$1,420,137
$1,404,022
$1,441,773
$1,485,957
$2,971,913
$975,083
$998,042
$1,033,966
$1,096,646
$1,101,534
$3,514,740
Photo: Richard Assmus
$-
10
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 voter-approved 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 Both Sales & Use Tax Revenues mirror the General Fund with substantial year-over-year growth. Most of the increase in Other Revenue was due to an offsetting transfer from Capital Projects related to fiber and conduit work serving, among other City infrastructure, the Lake Arbor Community Station.
Expenditure Highlights Capital Expenditures in 2014, all related to the completion of the Community Stations, represent nearly all final project costs. Among relatively minor work to finish off the buildings are installations of signal amplifiers (BDAs) to boost radio reception within the stations. Personnel Expenditures in both Tax Increment Funds are down a combined 2.1%, representing a vast majority of the year-over-year drop in Ongoing Expenditures. These decreases are due primarily to dips in Salary and Overtime costs through the first half of the year.
.21 and .25 Tax Increment Funds
2014 Budget
As of 06/30/14
As of 06/30/13
Beginning Fund Balance
$7,979,000
$7,979,000
$6,415,140
$2,653,467
$2,491,605
1,311,541
762,148
642,946
117,000
212,973
100,267
$7,843,681
$3,628,588
$3,234,818
Ongoing
$7,525,559
$3,093,757
$3,167,920
Capital
3,344,728
2,466,614
247,209
$10,870,287
$5,560,371
$3,415,129
REVENUES Sales Tax/Audit Revenue Use Tax Other Total Revenues
Total Expenditures Income/(Loss) Ending Fund Balance
(3,026,606) $4,952,394
(1,931,783)
(180,311)
$6,047,217
11
Photo: Ryan Adler
EXPENDITURES
Community Development Community Development Fund Beginning Fund Balance
2014 Budget
Arvada Housing Authority
As of 6/30/14
$6,896,000
As of 6/30/13
$6,896,000
2014 Budget
As of 6/30/14 As of 6/30/13
Beginning Fund Balance
$ 195,000
$ 195,000
$
$
Revenues
Revenues Recovered
Arvada Housing Authority
Recovered $
19,178
16,479
$
11,456
40,943
$ 254,835
668,000
204,654
130,229
City Cash Transfer
45,000
22,500
22,500
Interest/Other
5,464
151
362
Interest/Other
19,500
5,265
4,922
Total Revenues
$3,950,642
$1,684,531
$1,911,306
Total Revenues
$847,237
$273,362
$412,486
Ongoing
$ 430,579
$ 161,087
$ 180,165
Rents
3,532,200
1,611,389
1,938,448
30,420
11,608
26,233
$3,993,199
$1,784,084
Grants
$ 114,737
Grants
$1,111,628
$229,823
$269,912
380,625
155,633
135,095
Loans
-
-
-
Capital Project Transfer
-
170,077
-
$1,492,253
$555,532
$405,007
(645,016)
(282,170)
7,479
$6,250,984
$6,613,830
Essential Home Repairs
Total Expenditures Income/(Loss) Ending Fund Balance
1,617,901
1,849,642
26,000
50,000
49,846
Transfers
Expenditures
Expenditures Ongoing
3,900,000
Transfers Total Expenditures Income/(Loss) Ending Fund Balance
(42,557) $ 152,444
$2,144,846
(99,554)
(233,540)
$ 95,446
Revenue Highlights 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.
Revenue Highlights 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 makes up the rest of the difference.
Expenditure Highlights The Arvada Housing Authority currently assists 480 families with monthly rent subsidies. 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.
Expenditure Highlights Representing most of the year-over-year change in Ongoing Expenditures was $57,042 provided to Family Tree for housing and family emergency supportive services in 2013. This year’s Capital Project Transfer reflects payments for the Memorial Neighborhood Park Revitalization project. It’s also worth noting that the wide gap between budgeted Revenues and Expenditures reflects the anticipated use of some HODAG funding in 2014.
EOC ENERGY ASSISTANCE 2010-2014 through June - Dollars (Grants)
$35,000 Total Dollars
$30,000
The City directly receives funding from Energy Outreach Colorado (EOC), a nonprofit corporation, and disburses it to low income residents of Arvada as assistance with costs related to energy. The drops in both expenditures and grants are due to a lack of supplemental disbursements to the City thus far in 2014.
$25,000 $20,000 $15,000 $10,000 $5,000 $0
2010 Dollars $13,339
12
2011 $30,799
2012 $29,473
2013 $27,500
2014 $17,500
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
CAPITAL iMPROVEMENT FUND
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 Phase I of the transit improvements.
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. 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.
Capital Projects Capital Improvement Fund
2014 Budget
As of 6/30/14
Beginning Fund Balance
$44,830,000
$44,830,000
$4,358,690
$1,785,554
$1,123,566
CIP Administration
$1,974,070
$4,359,727
$457,419
CIP Street Projects
422,000
307,621
225,047
CIP Traffic Projects
3,026,382
694,142
265,162
790,230
2,354,767
874,854
51,500
120,190
248,117
$6,264,182
$7,836,447
$2,070,599
Revenues
As of 6/30/13
Expenditures
CIP Park Projects CIP Arvada Center Expenditures Income/Loss Ending Fund Balance
(1,905,492)
(6,050,893)
$42,924,508
$38,779,107
13
(947,033)
Photo: Ryan Adler
Photo: Ryan Adler Photo: Ryan Adler
14
Smaller projects in the Transportation area include Garrison Street Trail, traffic control equipment replacement and traffic signal replacement.
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 6/30/14
As of 6/30/13
$66,779,000
$66,779,000
$20,026,271
$5,640,669
$5,304,368
Tap Fees
4,835,189
3,776,037
3,678,618
Interest
266,645
123,588
203,124
Other
682,972
1,016,317
4,961,210
$25,811,077
$10,556,611
$14,147,320
$16,845,528
$7,022,092
$10,630,452
REVENUES Water Charges
Total Revenues
Revenue Highlights
EXPENDITURES Ongoing Debt Service
2,260,700
417,711
178,926
Major Capital Maintenance
4,065,596
2,299,735
1,498,336
Capital
4,096,356
652,484
42,535
$27,268,180
$10,392,022
$12,350,249
164,588
1,797,071
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
$66,943,588
15
Revenues from Water Charges were up 6.3% for the first quarter, with consumption up 5.8% 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 annual water rights assessment payments and water treatment chemical acquisition round out the bulk of differences in Ongoing Expenditures between the first half of 2013 and 2014. 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 June by year since 2010.
WATER CONSUMPTION
Thousands of Gallons
As of June
1,800,000 1,600,000 1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0
1000s of Gallons
2010 1,471,564
2011 1,508,338
2012 1,743,469
2013 1,419,752
2014 1,501,877
Water Tap Fees This chart shows water tap fee revenue through June by year since 2010.
WATER FUND - TAP FEES
Dollars
As of June
$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 $Tap Fees
2010 $913,652
2011 $1,113,787
2012 $1,733,754
16
2013 $3,678,618
2014 $3,776,037
Wastewater Fund The wastewater fund accounts for all activities necessary in the collection, transmission and disposal of sewage and wastewater. WasteWater Fund
2014 Budget
As of 6/30/14
Beginning Fund Balance
$11,893,000
$11,893,000
$11,730,087
$4,898,635
$4,663,799
Tap Fees
380,403
350,220
377,063
Interest
633,620
47,340
37,166
As of 6/30/13
Revenue Highlights Sewer Tap Fee Revenues, while below 2013’s record level, remain at an historically high level due to continued residential construction.
REVENUES Sewer Charges
Other
594,738
208,960
186,398
$13,338,848
$5,505,155
$5,264,427
$7,500,000
$3,690,364
$3,611,495
Ongoing
3,128,500
1,310,094
1,393,780
Major Capital Maintenance
1,961,852
15,862
478,769
204,600
-
-
$12,794,952
$5,016,320
$5,484,044
543,896
488,835
$12,436,896
$12,381,835
Total Revenues
Expenditure Highlights Treatment charges from the Metro Wastewater Reclamation District represented about 74% 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
(219,617)
Wastewater Tap Fees This chart shows sewer tap fee revenue through June by year since 2010.
WASTEWATER FUND - TAP FEES
Dollars
As of June
$400,000 $360,000 $320,000 $280,000 $240,000 $200,000 $160,000 $120,000 $80,000 $40,000 $Tap Fees
2010 $100,352
2011 $109,741
2012 $190,893
17
2013 $377,063
2014 $350,220
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 6/30/14
As of 6/30/13
$5,941,000
$5,941,000
$3,147,497
$1,521,698
$1,502,211
28,031
43,459
41,722
$3,175,528
$1,565,157
$1,543,932
$2,062,029
$604,741
$ 592,558
REVENUES Stormwater Fee Other Total Revenues EXPENDITURES Ongoing Debt Service
932,800
466,400
466,244
5,415,414
367,992
1,014,496
Total Expenditures
$8,410,243
$1,439,133
$2,073,298
Income/(Loss)
(5,234,715)
Ending Fund Balance
$ 706,285
Capital
126,024
(529,365)
$6,067,024
Revenue Highlights The City’s Stormwater Utility Fee Revenue, which represents nearly all revenue for the Stormwater Fund, came in consistent with 2013 levels. The rate for the Stormwater Utility Fee has not changed since 2009.
Expenditure Highlights
Photo: Ryan Adler
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. Substantially higher Garrison project expenditures in the first half of 2013 account for the substantial drop in Capital Expenditures.
18
Golf Fund Revenue Highlights Through the second quarter, golf-related revenue is 10% greater than in 2013 and more than 6% ahead of the rolling three-year average. Restaurant revenue collected is more than 15% greater year-todate than in 2013, while the city cash transfer, which is used to fund capital projects, is 3% greater than last year. The increases are due to a modest golf fee rate increase that went into effect in April and a modest increase in menu prices that also went into effect in April. In addition, improved weather made for a stronger first quarter of play. Rounds through May are up 13% over 2013 (West Woods + 26% and Lake Arbor + 2% ). Metro-area rounds through May are up 11.4% over 2013 (golfdatatech). June rounds are down 6% (West Woods -4% and Lake Arbor -8%). A fee increase started in April has increased YTD $/round by $1.75. Lake Arbor tournament rounds decreased due to events moving to July and companies going out of business. The Lake Arbor daily fee senior category is a new fee for 2014 drawing from regular rounds.
2014 Budget
As of 06/30/14
$ 101,000
$ 101,000
Golf Courses
$3,383,085
$1,433,806
$1,299,723
Restaurants
1,193,135
634,943
549,955
209,475
104,738
100,647
$4,785,695
$2,173,486
$1,950,324
Golf Courses
$2,395,843
$973,113
$954,599
Restaurants
1,258,466
613,400
522,594
Administration
938,500
522,091
465,156
Capital
103,000
13,772
368,007
$4,695,809
$2,122,375
$2,310,356
Golf Fund Beginning Fund Balance REVENUES
City Cash Transfer Total Revenues EXPENDITURES
Total Expenditures
Expenditure Highlights
As of 06/30/13
Income/(Loss) 89,886 51,110 (360,031) Total expeditures are more than 8% below 2013 levels, mostly due to Ending Fund Balance $ 190,886 $ 152,110 spending less for capital projects. The West Woods Golf Course Pro Shop and Restaurant and Lake Arbor Restaurant remodels occurred in 2013. Other highlights for the first two quarters of the year include hiring three new Golf Maintenance employees approved in the 2014 budget and increasing staffing levels at both golf restaurants.
All “Grow the Game�/Player Development programs offered continue to sell out.
Golf Rounds by Type - January thru June 2014 WEST WOODS
Regular
Special
Tournament
Annual
Senior
Junior
Other
Total
2013
11,655
2,150
604
2,648
1,552
322
351
19,282
2014
12,487
1,948
997
3,407
2,446
384
605
22,274
832
-202
393
759
894
62
254
2,992
7%
-9%
65%
29%
58%
19%
72%
16%
LAKE ARBOR
Regular
Special
Tournament
Annual
Senior
Junior
Other
Total
2013
8,465
1,317
582
8,022
0
298
825
19,509
2014
5,767
3,037
142
7,738
1,737
280
889
19,590
-2,698
1,720
-440
-284
1,737
-18
64
81
-32%
131%
-75%
-4%
100%
-6%
8%
0%
19
Hospitality Fund Revenue Highlights 2014 Hospitality fund year-to-date revenue is 4% greater in 2014, reflecting an increase in events held and number of guests served. The association, corporate and religious market segments continue to post increases over 2013 levels while the wedding and social market segments continue to be a challenge. The Arvada Center and in-house market segments continue to decline, reflecting the Arvada Center and City departments’ decision to use outside caterers for their events.
Expenditure Highlights 2014 Hospitality fund expenditures are 2% below 2013 spending levels and are in line with projections for the first half of the year.
Hospitality Fund Beginning Fund Balance
2014 Budget
As of 06/30/14
$ 554,000
$ 554,000
$1,002,311
$393,688
As of 06/30/13
REVENUES Banquets
$399,805
Concessions
176,994
67,872
45,869
Miscellaneous
523,074
225,589
213,882
Total Revenues
$1,702,378
$687,149
$659,556
$ 298,178
$ 121,523
$131,427
1,291,653
502,098
503,850
263,000
-
-
27,468
13,734
12,976
$1,880,299
$ 637,355
$648,254
49,794
11,302
EXPENDITURES Administration Operations Capital Transfer to General Fund Total Expenditures Income/(Loss)
(177,920)
Ending Fund Balance
$ 376,080
$ 603,794
Association, corporate and religious market segments continue to post increases over 2013 levels.
20
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 6/30/14
As of 6/30/13
Beginning Fund Balance
$4,593,000
$4,593,000
2,032,528
1,016,437
1,005,175
70,019
49,823
92,042
$2,102,547
$1,066,260
$1,097,216
Revenues Transfers Other Total Revenues Expenditures Risk Mgmt Administration Risk Mgmt Operations Total Expenditures Income/(Loss) Ending Fund Balance
$1,993,796
$994,541
$940,840
645,062
253,285
288,240
$2,638,858
$1,247,827
$1,229,080
(536,311) $4,056,689
(181,567)
(131,864)
$4,411,433
21
A year-over-year increase for the first six months in Workers’ Compensation claims expenses comprise nearly all of the net rise in Administration Expenditures, which was partially offset by the lack of a one-time contribution for repairs at George Meyers Pool in 2013. Both Property and Auto Physical claims costs also rose, while Auto Liability and General Liability dropped. As for Operations expenditures, the movement of two City Attorney’s Office positions from the Risk Management Fund to the General Fund earlier this year represent the 12% drop. A coresponding transfer to the General Fund will be added 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 06/30/14
As of 06/30/13
Beginning Fund Balance
$6,134,000
$6,134,000
Maintenance
$959,787
$552,261
$479,883
Replacement
899,054
431,495
513,145
Print Shop
450,935
159,480
165,269
$2,309,776
$1,143,236
$1,158,297
Maintenance
$1,171,777
$510,602
$541,214
Replacement
949,250
431,254
381,521
Print Shop
501,610
208,191
149,595
$2,622,637
$1,150,047
$1,072,330
Revenues
Total Revenues Expenditures
Total Expenditures Income/(Loss) Ending Fund Balance
(312,861) $5,821,139
(6,811)
The Print Shop recently made an outright purchase of new equipment. The proposed chargeback model for the Print Shop will allow us to continue to provide a high-quality product at a cost well below commercial rates.
85,967
$6,127,189
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 on track and as expected in 2014. Print Shop revenue is nearly flat from 2013 to 2014. We are proposing a rate change starting 1/1/15 that will increase revenue to a level that will allow us to sustain the Print Shop operations, 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. We are going to City Council in August requesting $486,250 to purchase replacement data center infrastructure hardware. $350,000 was budgeted for expenditure in 2015 and we are seeking to use those funds in 2014 to replace equipment that will not be covered under maintenance after December 2014. We are seeking an additional $138,250 to purchase additional computing capacity to help handle several new initiatives that are currently underway. Examples 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 well 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 proposed chargeback model for the Print Shop will allow us to continue to provide a high-quality product at a cost well below commercial rates.
22
Vehicles Vehicles Fund
2014 Budget
As of 6/30/14
As of 6/30/13
Beginning Fund Balance
$6,350,000
$6,350,000
Maintenance Transfers
$2,262,414
$1,126,759
$1,098,290
Replacement Transfers
1,115,772
559,875
557,886
116,579
53,831
58,708
$3,494,765
$1,740,465
$1,714,884
Maintenance
$2,071,728
$971,638
$1,022,129
Replacement
1,972,400
425,861
$370,783
$4,044,128
$1,397,499
$1,392,912
342,966
321,971
Revenues
Other Total Revenues Expenditures
Total Expenditures Income/(Loss) Ending Fund Balance
(549,363) $5,800,637
$6,692,966
Building Fund
2014 Budget
As of 6/30/14
Beginning Fund Balance
$2,131,000
$2,131,000
$431,165
$215,651
$203,675
134,721
126,653
121,441
$565,886
$342,304
$325,116
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. The increase in Replacement Expenditures year-over-year is due, in part, to the timing of delivery. In 2013, approximately 30 units were replaced.
Buildings As of 6/30/13
Revenues Replacement Transfers Other Total Revenues Expenditures Replacement
$366,681
Capital Lease Total Expenditures Income/(Loss) Ending Fund Balance
$
486
$38,016
117,396
56,476
55,657
$484,077
$56,962
$93,673
81,809
285,342
231,443
$2,212,809
$2,416,342
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. Activity scheduled for 2014 includes the replacement of the Arvada Community Food Bank parking lot and concrete repair at the George Meyers Pool.
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.
Expenditure Highlights Year-to-date expenditures in 2014 are at 44% of budgeted expenditures and are comparable to 2013 expenditures. Salaries and benefits represent the largest expenditure at approximately 45% of the expenditures.
Beginning Fund Balance Revenue
775,000
387,801
376,909
Expenditures
766,881
333,990
349,832
$405,009
$450,701
Ending Fund Balance
Beginning Cash Balance
$875,781
Ending Cash Balance Reserved for AEDA Loan Program
2,057 (155,024) 722,814
(23,500)
Reserved for New Entrepreneur Program
(19,500)
Arvada Manufacturing Initiative
(19,200)
Small Business Grant Program Phase 5
(74,344)
Revenues in 2014 consist of interest income.
Expenditure Highlights Expenditures in 2014 reflect nine AEDA small business grants and one loan. The grants were used to help Arvada businesses improve signage, landscaping, facades, and site improvements.
(362,616) $23,655
Photo: Richard Assmus
Available Unallocated Cash Balance
Revenue Highlights
(200,000)
Reserved for Job Creation Program
Commitments
As of 6/30/13
$396,890
2014
Expenditures
As of 6/30/14
$396,890
Program
Revenue
2014 Budget
Operations
24
CITY OF ARVADA INVESTMENT REPORT
Investment Portfolio Objectives
Photo: Richard Assmus
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 second quarter 2014 yield of .676% which is an increase of 15bps when compared to the year-to-date second quarter 2013 yield of .527%. The benchmark yield for the City’s portfolio, as established by the investment policy, is a weighted benchmark of allowable securities. For the second quarter, the weighted benchmark return was .43%, 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. However 2014 interest revenue has decreased from 2013 due to the reduction in the overall portfolio to fund the escrow for the Gross Reservoir Expansion Project. 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 $33 million in investment calls during the first two quarters of the year due to the expiration of call “lockout” periods. Balances in LGIP funds have decreased due to the $36 million funding of an escrow account for the Gross Reservoir Expansion Project during the third quarter of 2013. 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 06/30/2014 06/30/2013 $494,956 $542,741 0.676% 0.527% 0.430% 0.280% +25bps +25ps
Money Market Savings/Cash CD Corporate LGIP US Agency US Treasury Total
PORTFOLIO CHANGES 06/30/2014 06/30/2013 $1,013,448 $5,010,584 10,732,898 10,170,371 20,194,478 19,290,340 5,995,000 3,000,000 9,464,976 44,967,985 114,600,000 111,600,000 0 2,000,000 $162,000,801 $196,039,279
Difference -$47,785 0.149% 0.150% 0bps
Difference -$3,997,135 562,528 904,138 2,995,000 -35,503,008 3,000,000 -2,000,000 -$34,038,478
ACCOUNT SUMMARY Par Value Book Value Market Value Unrealized Gain/(Loss)
$162,000,801 $162,001,331 $161,723,062 -$277,739 PORTFOLIO CHARACTERISTICS
Average Duration (yrs) Average Coupon Average Cost YTM Average Market YTM
2.23 0.667% 0.733% 0.801%
PORTFOLIO ALLOCATION U.S. Agencies 69.5%
Money Market 0.7%
LGIP 10.3% Corporate 3.6%
MATURITY DISTRIBUTION
CD 12.2%
35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0%
Savings/ cash 3.7%
32.5%
16.2% 9.3%
7.0% 1.9%
0-.25
.5-1
1-2
Maturity (yrs)
26
33.1%
2-3
3-4
4-5
City of Arvada Investments as of June 30, 2014 The City’s portfolio as of June 30, 2014 is shown below, which includes credit ratings as of June 30, face value and actual interest earnings for 2014. Description
CUSIP/Ticker
Credit Rating 06/30/2014
Coupon Rate
Maturity Date
Ending Face
Interest
Amount/Shares
Dividends
Savings/Checking JPMorgan Chase Savings
CHASE
N/A
0.05%
N/A
1,046,408.31
943.81
Wells Fargo Savings
WELLSFARGO
N/A
0.09%
N/A
5,035,121.59
2,510.03
N/A
0.30%
N/A
4,651,368.44
0.00
10,732,898.34
3,453.84
5,140,237.19
7,598.92 7,471.78
JP Morgan Checking Sub Total Savings/Checking Certificate Of Deposit FIRSTBANK
CD7281
N/A
0.30%
12/02/2014
FIRSTBANK
CD5343
N/A
0.30%
07/29/2014
5,054,240.60
Vectra Bank
4094504774
N/A
0.30%
03/18/2015
5,000,000.00
Vectra Bank
4049504782
N/A
0.30%
03/18/2015
Sub Total Certificate Of Deposit
5,000,000.00 20,194,477.79
15,070.70 3,172.50
Corporate Apple, Inc
037833AH3
AA1
0.45%
05/03/2016
1,410,000.00
Exxon Mobil
30231GAA0
AAA
0.92%
03/15/2017
1,500,000.00
Berkshire Hathaway
084664BX8
AA2
0.95%
08/15/2016
3,085,000.00
14,653.75
5,995,000.00
17,826.25
Sub Total Corporate Local Government Investment Pool C Safe LGIP
CSAFE
AAAm
0.12%
N/A
8,019,952.98
5,063.55
Colo Trust LGIP
COLOTRUST8001
AAAm
0.12%
N/A
1,445,023.27
825.36
9,464,976.25
5,888.91
1,013,448.40
488.85
1,013,448.40
488.85
Sub Total Local Government Investment Pool 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
3133EC940
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
17,000.00
FFCB
3133ECY57
AAA
1.58%
08/28/2017
3,000,000.00
23,700.00
FHLB
313381QX6
AAA
0.55%
07/25/2016
3,000,000.00
8,250.00
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
17,500.00
FHLB
313382HT3
AAA
0.75%
03/27/2017
5,000,000.00
18,750.00
FHLB
313382W25
AAA
0.75%
08/15/2027
5,000,000.00
18,750.00
FHLB
313380U88
AAA
0.80%
04/17/2017
3,000,000.00
12,000.00
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
16,800.00
FHLB
313382FL2
AAA
0.63%
03/27/2018
5,000,000.00
15,625.00
Chart continues next page
27
Description
CUSIP/Ticker
Credit Rating 06/30/2014
Coupon Rate
Maturity Date
Ending Face
Interest
Amount/Shares
Dividends
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
3134G56WO
AAA
0.65%
12/23/2016
5,000,000.00
0.00
FHLMC
3134G52G9
AAA
1.00%
01/23/2017
3,000,000.00
0.00
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
1.50%
09/11/2017
3,000,000.00
0.00
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
25,000.00
FNMA
3136G0XD8
AAA
1.00%
08/28/2017
6,000,000.00
30,000.00
FNMA
3136G1LA5
AAA
0.50%
05/15/2018
3,000,000.00
7,500.00
Subtotal Agency
114,600,000.00
324,375.00
Totals
162,000,800.78
367,103.55
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 needs to capture attractive interest rates. 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.
28
Photo: Richard Assmus
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