City of Arvada, CO 2014 Mid-Year Financial Report

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.

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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!

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GENERAL FUND

General Fund Overview The General Fund pays for the City’s basic services. This includes police, street maintenance, planning, transportation planning, street light maintenance and costs, building activity and general administration. In addition, the General Fund also provides for the following: • Operational support to the Arvada Center • Operational support to the Parks Fund • General Debt Service payments 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.

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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.

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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

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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 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.

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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.

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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.

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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

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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

$-

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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

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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

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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

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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

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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.

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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