City of Arvada 2014 Year-End Financial Report

2014 Year-End

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 Year End The Financial Report provides an unaudited overview of the City’s major funds, including revenue and expenditure overall performance. This document is not meant to be a complete representation of the City’s financial performance, but rather a high-level look at the highlights.

2014 was a historic year for revenues throughout the City of Arvada, but especially in the General Fund. Total revenues grew by 15% over 2013 and surpassed budget by $6.5 million. Growth was experienced in all major revenue categories, highlighted by sales tax, auto use tax and building-related revenues.

Building activity continued its torrid pace through the fourth quarter of 2014. As the graph shows below, the City issued 581 single-family building permits, generating a little more than $9 million in building-related revenues. This was a 53% increase over 2013 and the largest number of single-family building permits generated on record.

General Fund Building Revenue 600

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

480

Dollars

$7,000,000

360

$6,000,000 $5,000,000

240

$4,000,000 $3,000,000

120

$2,000,000 $1,000,000 $0 GF Building Revenue Single Family (Detached) Permits

0

2010 $4,201,763

2011 $3,896,438

2012 $5,137,472

2013 $6,072,258

2014 $9,200,979

151

125

321

427

581

Sales tax was up 7.5% over 2013 with the growth spread across all of the major categories except health and specialty foods. The largest increases, greater than 20%, were in fast-casual restaurants and furniture, appliance and flooring stores. These categories show a direct relationship to the increased building activity. Other sales tax categories demonstrated strong growth including grocery at 6.3%, department stores at 5.4%, retail hardware at 5.5% and restaurants at 8.8%. Finally, auto care also demonstrated a double-digit increase, likely driven by the continued growth in new auto sales. Auto use tax was up 11% over 2013. This represents the sixth straight year of growth in this revenue category.

The highly anticipated Olde Town Transit Hub began construction in the fourth quarter. Removal of the Olde Town Grandview parking lot, utility relocations, shoring and phase one of excavation are the current tasks. The project, which includes over 600 parking spaces, multiple plazas and a bus transfer facility, is scheduled for completion in the third quarter of 2016. The City will use some of its 2014 one-time revenues to help complete the financial plan for the project.

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Permits

$8,000,000

The Arvada Center continues to work on a proposed governance change. The creation of a new 501(c)3 has been completed and the proposed operating agreement will go to Council for approval later in 2015. 2014 saw much of the same for the Center, award-winning performances and successful education sessions. However, rising costs and flat revenues resulted in the need for the General Fund to supplement the Center with an additional cash transfer of $375,000. The current theater season represents a first, as there will be no summer musical offered. This is just one of many cost-cutting measures that will be implemented in the upcoming months.

The Police Tax Increment Funds share the same revenue trends as the General Fund with sales tax, auto use tax and building-related revenues all up for the year. Overall revenues will exceed budget by $700,000. The two substations opened in the spring and have already cemented themselves in the community.

Planning has begun for a third station in the northwest part of City. Some of the one-time revenues will be set aside for the additional substation, with the remaining funds used to complete the remodel of Baker station, aka police headquarters.

The Housing Authority was able to assist 508 families with monthly rent subsidies. Due to the mandatory 5% federal reduction, reserves were used to maintain consistent support levels. If the cuts in funding continue, the Authority will have to look at future program changes.

Taps fees continue to be the highlight of the Water and Wastewater funds. This will add much needed capital funds that can be used for system build out, including the pending Gross Reservoir project. Water and Sewer sales are both up small percentage over 2013 but did not increase to meet 2014. This trend will be monitored closely in 2015 as future rates are being established.

The Golf Fund returned to profitability in 2014. Rounds again eclipsed the 90,000 golfer mark and over 110,000 patrons visited the restaurants. Revenues increased 13% as “Grow the Game� initiatives, such as Ladies Night and Family Night, continued to bring new golfers to the courses and the restaurants.

Course conditions also improved with the addition of three maintenance staff positions.

Investment income for 2014 reversed a seven-year declining trend with a 13 basis point increase over 2013. This is still a revenue source that is well under historic averages and one that will probably remain low for a few more years as the Federal Reserve will be slow to raise short-term rates. For perspective, in 2006, our yearly average investment return was 5.07%, and in 2014, it was .647%.

As we close the books on 2014, the City has emerged from the recession. Some revenue sources have not returned to pre-recession levels, specifically interest income and HUTF, but many have. Unemployment was 3.7%, lower than both the State average at 4.0% and the National average at 5.6%. Arvada continues to be a place for new business and business expansions with over 70 in 2014 alone. The one-time resources generated in 2014 will be dedicated to one-time reinvestments back into our community, including the Olde Town Transit Hub, AEDA and the land redevelopment code. Additional ongoing revenues will be used to balance our ten-year financial plans and to continue to implement the Strategic Results that have been defined by Council.

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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 • Transferto the Capital Improvements Fund for new parks, transportation and other infrastructure projects The following table provides a comparison of 2014 budget to 2014 actual fund balance, revenues and projections. We have included the original 2014 budget adopted in October 2013 and the 2014 revised budget, which was a result of the ten-year financial planning model that was completed in the third quarter 2014 and adopted by council in the fourth quarter 2014.

General Fund

2014 Budget

2014 Revised (ten-year plan)

2014 Actual

Beginning Fund Balance

$25,675,000

$25,675,000

$25,675,000

Revenues

$71,572,813

$74,097,724

$80,681,245

$69,459,872

$70,461,599

$68,132,722

6,908,690

7,003,690

7,003,690

EXPENDITURES Ongoing Capital

Revenue Highlights The General Fund will end 2014 with a fund balance of a little more than $31 million. Some of this balance, $2,270,250, will be used for items not completed in 2014. Another portion, $1,864,882, will be dedicated towards one-time items. Some, $3,106,146, will be used to complete the funding package for the Olde Town Transit Hub. The remaining amount will be used towards ongoing operations to help balance our 10-year financial plan and maintain our Council-directed 17% fund balance reserve.

2014 was a tremendous financial year for the General Fund. All revenue categories were up over 2013 and exceeded budgets except interest and property taxes. As you will see on the following pages, sales tax, auto use tax and building-related revenues led the way with increases of 7.5%, 11% and 53% respectively.

Overall, revenues experienced a 15% increase over 2013 and finished $6.5 million dollars over budget. A large percentage of this revenue is considered one-time, not able to support ongoing operations, and will be used towards one-time expenditures as mentioned above.

JPPHA Expenditures

1,455,000

1,455,000

200,000

$77,823,562

$78,920,289

$75,336,412

Income/(Loss)

(6,250,749)

(4,822,565)

5,344,833

Money Dedicated for 2015 JPPHA

$

-

$

-

$1,255,000

Carryovers to 2015

-

-

1,015,250

One-time Items added in 2015

-

-

1,864,882

2015 Olde Town Transit Hub

-

-

3,106,146

Total Dedicated Expenditures

$77,823,562

$78,920,289

$82,577,690

Ending Fund Balance

$19,424,251

$20,852,435

$23,778,555

13,230,006

13,416,449

12,807,190

7,435,986

10,971,365

$7,311,054

$7,311,054

Goal (17% of Expenditures) Excess/(Deficit) Use of Fund Balance 2015-2024

Overall, revenues experienced a 15% increase over 2013 and finished $6.5 million dollars over budget. A large percentage of this revenue is considered one-time, not able to support ongoing operations, and will be used towards one-time expenditures.

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GENERAL FUND REVENUES Sales Tax 48%

Property Tax 6%

Use Tax 2%

Auto Use Tax 7% Other 18% Interest 1%

Franchise Fees 6%

Court Fines & Fees 2%

Building Use Tax & Permits 10%

Sales Tax 2014 sales tax collections increased 7.5% over 2013.

Four of the top five sales tax producing categories, which include grocery stores, general department stores, retail hardware and restaurants, all showed increases over 5.5%. Utilities and cable television providers, the other top five category, increased a respectable 2.2% over the prior year.

Fast-casual restaurants and furniture, appliance and flooring stores each posted increases of more than 20% over 2013. Health and specialty foods was the only category that posted a decrease.

Sales Tax Collections

$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

2010 Sales Tax $34,776,789

2011 $35,852,374

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2012 $37,954,667

2013 $40,205,021

2014 $43,211,510

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

As previously discussed, building-related revenue is up 53% over last year due to all the new home construction.

General use tax is a stable source of revenue and showed a slight decrease versus 2013.

Use Tax Collections

$12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $0

Auto use tax collections finished 11% over 2013, which demonstrates that vehicle sales are still strong.

General

2010 $1,374,997

2011 $1,511,848

2012 $1,220,977

2013 $1,554,343

2014 $1,533,818

Auto

$3,981,079

$4,340,794

$4,804,227

$5,379,579

$5,982,520

Building

$1,732,770

$1,780,442

$2,385,633

$2,884,866

$4,426,409

Building

Property Tax

Auto

General

Property Tax Collections

The City’s property tax rate is 4.31 mills per $100 of valuation. In Colorado, the mill rate is placed on the assessed valuation.

The following graph illustrates the yearto-date collections for the current and past four years.

$5,500,000 $5,000,000 $4,500,000 $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000

Property tax collections in 2014 were $49,005 below the budgeted amount.

However, since real property is only appraised every odd-numbered year, tax collections trail the actual change in values.

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. In 2014, this revenue increased 2% over 2013. While these revenue sources are a stable source of revenue, they have not increased at the same pace as the cost of street maintenance; therefore, other general fund revenues have filled the gap.

$1,500,000 $1,000,000 $500,000 $0 Property Tax

2010 $4,637,622

2011 $4,643,015

2012 $4,500,376

2013 $4,556,940

2014 $4,600,995

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

2010 $3,791,075

2011 $3,809,048

2012 $3,818,142

2013 $3,847,443

2014 $3,949,386

$970,357

$776,092

$855,684

$718,844

$730,239

Jefferson County

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HUTF

Expenditure Highlights Total expenditures show savings of a little over $3.5 million. Unspent JPPHA funds, or $1,255,000, and carryovers of $1,015,250, make up the bulk of this savings.

The remaining dollars are spread across all of the major expenditure categories due to departments’ conservative spending and strong financial management.

GENERAL FUND EXPENDITURES

Miscellaneous 1%

Transfers 20%

Personnel 48% Debt Service 5%

Contracts 11%

Supplies and Expenses 6% Services and Charges 9%

Salary and Benefit Savings Salary & Benefits Salaries & Wages Vacancy Savings Overtime

2014 Budget $28,894,508

2014 Actual $28,377,493

(782,730)

-

967,013

845,602

Group Insurance

5,481,633

5,189,265

Retirement

3,269,351

3,258,280

Medicare

357,499

352,629

Temporary Wages & SS

345,916

299,968

Other Total

388,736

352,144

$38,921,926

$38,675,381

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Despite seven high-impact retirements in 2014, the General Fund met its budgeted Vacancy Savings total for the year.

ARVADA CENTER

ARVADA CENTER

Arvada Center Revenue Highlights SCFD revenues saw an increase over 2013 of just over 1% or $10,491. This was a disappointment as the budget included a 3% increase. Greater competition in the Tier II market impacted the Center’s ability to hit the revenue targets.

Arvada Center

2014 Budget

2014 Actual

Beginning Fund Balance

$

232,000

$ 232,000

$ 6,283,090

$ 5,115,836

SCFD

1,096,970

1,039,076

City Cash Transfer-Original

1,643,122

1,643,122

-

375,000

2,040,000

1,957,871

REVENUES Generated

City Cash Transfer-Additional City In-Kind Transfer Total Revenues

$11,063,182

$10,130,905

$ 9,044,290

$ 8,204,755

EXPENDITURES Ongoing In-Kind Total Expenditures

2,040,000

1,957,871

$11,084,290

$10,162,626

Income/(Loss)

(21,108)

Ending Fund Balance

211,173

200,560

1,219,272

1,117,889

$(1,008,099)

$ (917,329)

Goal (11% of Expenditures) Excess/(Deficit)

(31,721)

SCFD Revenue $1,200,000 $1,000,000

Contributed revenue increased slightly in total from 2013 by approximately $6,000 or 2.2%.

This increase is attributed to an increase of approximately 45% or $12,700 in foundation contributions.

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

2010

2011

2012

2013

2014

For the summer concert series in 2014, the Center created a new partnership with Swallow Hill Music Association, a SCFD Tier II organization. This partnership uses Swallow Hill’s expertise and experience in identifying and booking talent in combination with the Center’s outdoor amphitheater and reputation for high-quality production. The Swallow Hill partnership provides for revenue sharing, something that did not exist previously and allowed the Center to generate net revenue from the concert series. After the first year with Swallow Hill the Center had increased attendance by 2,800 and in ticket sales by about $120,000. As the two organizations continue to work together, the series is expected to generate larger audiences and larger revenue gains.

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The Arvada Center experienced another topsy-turvy year in 2014. There were positives along the way including: SCFD, contributed revenue, summer concert series and marketing. The challenges included: education, overall ticket sales and production costs related to the theater shows. When the books were closed on the year, the Center needed an additional $405,200 to make ends meet. A portion of this difference was funded in the form of a $375,000 supplemental cash transfer from the General Fund, leaving a gap of $31,700. This gap will come out of the Center’s fund balance. The total cash contributed from the General Fund to the Center for 2014 was $2,017,122. An additional $1,957,871 of in-kind support was provided, for total General Fund support of $3,975,993.

The 2014-2015 theater season continues the Center’s tradition of positive reaction from both patrons and critics. The partnership with Creede Repertory Theater was extended for the fifth year with great success in the production of The Last Romance. This season marks a change that will be realized in 2015: the Center will not be offering a summer musical. This change will benefit the Center financially but is a significant change to the season structure.

City of Arvada Contributions $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

Cash

In-Kind 2010

2011

2012

Total 2013

2014

Expenditure Highlights Education programs decreased expenses by $73,900 or 8.49% from 2013 but experienced a 10.1% decrease in revenue from 2013.

Performing Arts programs continue to work toward reduced show expenses. Although show expenses were reduced in the first half of the year, overall there was a 10%, or $375,000, increase in expenses.

Marketing expenditures are down 11.06% or $143,513 from 2013. The Center is constantly working on the right mix in support of increased ticket sales.

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PARKS FUND

PARKS FUND

Parks Fund Revenue Highlights Total revenues were 5% greater in 2014 than in 2013, primarily driven by a 4% increase in Jefferson County Open Space monies and a 2% increase in General Fund cash transfer. Program revenues at the Majestic View Nature Center increased as a result of expanded public hours authorized in the 2014 budget; more than 20,000 visited the center in 2014. Lake recreation revenue exceeded $40,000 with more than 20,000 visitiors to Arvada Blunn Reservoir.

Expenditure Highlights Total expenses were 6% greater in 2014 than in 2013, highlighted by the completion of many park projects including Ralston Central Park, Memorial Park and many “Taking Lasting Care� projects. 2014 actual expenditures came in 3.5% below budget due to savings in personnel, fuel and professional services.

Parks Fund Beginning Fund Balance

2014 Budget

2014 Actual

$4,300,000

$4,300,000

$3,514,740

$3,685,566

2,971,913

2,937,398

APEX Reimbursement

954,810

866,384

Other

187,848

288,958

$7,629,311

$7,778,305

$7,878,273

$7,612,786

-

-

$7,878,273

$7,612,786

REVENUES Open Space City Cash Transfer

Total Revenues EXPENDITURES Ongoing Capital Total Expenditures Income/(Loss) Ending Fund Balance Goal (11% of Expenditures) Excess/(Deficit)

9

(248,962)

165,519

$4,051,038

$4,465,519

866,610

837,406

$3,184,428

$3,628,113

PARKS FUND REVENUE

$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 $-

2010 $917,719

2011 $868,652

2012 $890,116

2013 $829,762

2014 $864,698

Cash Transfer

$3,109,960

$2,740,040

$2,790,917

$2,883,545

$2,937,398

Open Space

$4,001,617

$3,142,349

$3,312,981

$3,537,126

$3,685,566

APEX

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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 Sales Tax and Use Taxes (Auto, General and Building) have all increased in comparison to year-end 2013. 2014 Sales Tax has increased by 7.40% and Use Taxes by 21.56%. Revenue generated from partnership with agencies such as Colorado Automobile Theft Prevention Program (BATTLE), High Visibility Impaired Driving Enforcement (HVE) and Jefferson County Emergency Communications Authority has provided reimbursement recovered costs just under $59,000 for 2014. Continued participation with grant programs such as; Rocky Mountain High Intensity Drug Trafficking Association (HIDTA), a state grant, and Enforcing Underage Drinking Laws (EUDL), a federal grant, created revenue in 2014 of $82,000. 2014 saw the expected completion of the two Community Stations. Lake Arbor Community Station ground preparation was more extensive than the West Woods Community Station and as a result $400,000 was transferred between funds to equalize the project burden.

.21 and .25 Tax Increment Funds

2014 Budget

2014 Actual

Beginning Fund Balance

$7,979,000

$7,979,000

$6,559,220

$6,793,186

1,529,040

1,834,322

158,040

718,180

$8,246,300

$9,345,689

Ongoing

$7,554,599

$7,330,252

Capital

3,344,728

2,546,692

$10,899,327

$9,876,944

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

Total Expenditures Income/(Loss)

(2,653,027)

Ending Fund Balance

$5,325,973

$7,447,745

1,198,926

1,086,464

$4,127,047

$6,361,281

Goal (11% of Expenditures) Excess/(Deficit)

(531,255)

Expenditure Highlights With the timely completion of the Community Stations, the realignment of personnel and the rollout of FOCUS, 2014 experienced seven retirements which resulted in promotions throughout the programs. This resulted in salaries using 95.82% of budget with a salary savings of $175,275 and combined benefits only utilizing 89.46% of budget with an overall savings of $161,966. Overtime also saw a savings in over $50,000 or 81% of their budget.

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Community Development

Arvada Housing Authority

Community Development Fund

2014 Budget

2014 Actual

Arvada Housing Authority

2014 Budget

2014 Actual

Beginning Fund Balance

$6,896,000

$6,896,000

Beginning Fund Balance

$ 195,000

$ 195,000

$114,737

$277,969

Recovered

$

$

668,000

511,352

Grants

3,900,000

3,516,725

City Cash Transfer

45,000

45,000

26,000

60,000

Interest/Other

19,500

(22,835)

Interest/Other

5,464

281

Total Revenues

$ 847,237

$ 811,486

Total Revenues

$3,950,642

$3,598,298

$ 922,859

$ 749,709

Ongoing

$ 430,578

$ 352,165

380,625

350,074

Rents

3,532,200

3,398,974

80,000

80,000

Transfers

330,077

227,370

Total Expenditures

$1,713,561

$1,407,153

(866,324)

(595,667)

$6,029,676

$6,300,333

Revenues Recovered Grants

Revenues

Transfers

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

19,178

21,291

Expenditures

30,420

26,378

$3,993,198

$3,777,517

Income/(Loss)

(42,557)

Ending Fund Balance

$ 152,444

(153,166) $

15,780

Arvada Housing Authority

Community Development Revenue Highlights

Revenue Highlights

Among Recovered Revenues were two repayments from the Jefferson County Housing Authority totaling $55,000 related to the Viking Square and Aspen Ridge apartment complexes. Grants Revenue was below budget due to spending constraints from cuts related to Federal budget sequestration.

The Housing Authority operated at a 95% proration in Grants Revenue in 2014 due to mandatory cuts initiated during the prior year Federal budget sequestration.

Due to the mandatory cuts, Grants Revenue fell well below the original budget.

Expenditure Highlights Expenditure Highlights

As of 12/31/2014, the Arvada Housing Authority was assisting 508 families with monthly rent subsidies. These subsidies constituted approximately 90% of the Fund’s expenditures in 2014.

The Capital Project Transfer reflects funding for the Memorial Neighborhood Park Revitalization project and sidewalk replacements along West 59th Place between Kipling Street and Miller Street. The gap between Revenues and Expenditures reflects the use of some HODAG funding in 2014. Loan Expenditures represent payments to the Jefferson County Housing Authority related to Viking Square and Aspen Ridge.

EOC ENERGY ASSISTANCE 2010-2014 Dollars (Grants)

The City directly receives funding from Energy Outreach Colorado (EOC), a nonprofit

$60,000

corporation, and disburses it to low-income related to energy. Since 2011, the City received supplemental funding from EOC, which accounts for the notable increase in 2011.

(119)

$50,000

Total Dollars

residents of Arvada as assistance with costs

(113)

$40,000

(119)

(117)

(67)

$30,000 $20,000 $10,000 $0 Dollars

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2010 $24,309

2011 $48,800

2012 $52,000

2013 $44,212

2014 $44,492

CAPITAL iMPROVEMENT FUND

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

Revenue Highlights In 2014, the majority of the revenues in the Capital Improvement Project (CIP) fund consisted of transfers from the General Fund, Water Fund, Grants Fund and Community Development Fund.

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

Capital Projects Capital Improvement Fund Beginning Fund Balance

2014 Budget

2014 Actual

$44,829,977

$44,829,977

$4,358,690

$7,734,936

-

2,056,222

$4,358,690

$9,791,158

CIP Administration

$21,312,544

$7,139,260

CIP Street Projects

497,000

1,568,041

CIP Traffic Projects

3,888,832

2,201,453

CIP Park Projects

1,294,106

4,832,200

146,500

370,533

Total Expenditures

$27,138,982

$16,111,487

Ending Fund Balance

$22,049,685

$38,509,648

REVENUES Transfers in Other revenue Total Revenues EXPENDITURES

CIP Arvada Center Projects

Anticipated Grant Revenue

10,280,844

Assigned for Projects: CIP Administration CIP Buildings

$25,078,370 589,165

CIP Street Projects

6,860,367

CIP Traffic Projects

7,505,257

CIP Park Projects

6,791,994

CIP Arvada Center Projects 8% Reserve Total Assigned for Projects Ending Fund Balance

510,480 1,288,919 48,624,553 $165,938

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Expenditure Highlights The City’s three priority areas are reflected throughout 2014 expenditures. Playground renovation at Bridgeside, Homestead, Yankee Doodle, Lady Bug, Lew Walsh and Club Crest South Parks, as well as an internal project to replace the outdated police radio system, demonstrate “Taking Lasting Care” of current assets.

There are several park projects that continue “Building our Base”, including the completion of Ralston Central Park and the very popular spray park, the Memorial Neighborhood Revitalization Park project, restrooms at Long Lake Ranch and water taps for Mesa Maverick and Church’s Crossing Parks. The planned transit hub at the Gold Line station along the Gold Line represents “Investing for the Future” and the largest project that the City is currently undertaking. The design and construction of a transit hub will support the activities related to the future Gold Line station in Olde Town. In 2014, property was purchased to expand the plaza and the rest of 2014 was spent designing the transit hub. In the fourth quarter of 2014, the City began excavation for the Transit Hub. Construction will continue through 2015 with a planned opening in 2016. Finally, the City started to install fiber along 64th Avenue.

Reserved Funds The CIP fund ended 2014 with a fund balance of over $38 million and confirmed grant revenues of $10 million that will fund a variety of projects in various stages of design and construction.

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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.

enterprise funds

Water Fund Water Fund

2014 Budget

2014 Actual

Beginning Fund Balance

$66,779,000

$66,779,000

$20,026,271

$17,647,949

Tap Fees

4,835,189

10,167,203

Interest

266,645

250,504

Other

682,972

2,234,348

$25,811,077

$30,300,004

REVENUES Water Charges

Total Revenues EXPENDITURES Ongoing

$17,194,402

$15,918,172

Debt Service

2,260,700

2,253,407

Major Capital Maintenance

4,065,596

4,538,880

Capital

4,096,356

1,879,908

$27,617,054

$24,590,368

Total Expenditures Income/(Loss)

(1,805,977)

5,709,636

Ending Fund Balance

$64,973,023

$72,488,636

Cash Escrow for Gross Reservoir

$36,989,586

$36,989,586

6,904,264

6,147,592

$21,079,173

$29,351,458

Goal (25% of Expenditures) Excess/(Deficit)

15

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

Revenue Highlights Revenues from Water Charges were up 3.9% for the year, with consumption up 1.4% over 2013. Despite this modest increase in consumption, Water Charges came in under budget.

Water taps continue to be sold at an incredible pace, reflecting both continued substantial building activity and the purchase of four substantial irrigation taps for developer-constructed parks in northwest Arvada. As for Other Revenues, substantial sales of water meters and water used for construction purposes came in well above the budget.

Expenditure Highlights Major Capital Maintenance expenditures exceeded the budget in 2014 as a direct result of 2013 flooding. The flood delayed the 2013 completion of pipe replacement and associated asphalt work under contract. Funding originally programmed to complete that contract in 2013 was diverted to immediately address flood damage in various areas of the City’s water system. As a result, those funds were not available to carry over into 2014 to pay for the completion of the work which started in 2013. With that said, both sufficient funding and appropriation were otherwise available in the Water Fund to offset the net increase in Major Capital Maintenance work for the year.

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

WATER CONSUMPTION

Thousands of Gallons

6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 1000s of Gallons

2010 5,150,842

2011 5,049,729

2012 5,700,412

2013 4,707,585

2014 4,775,208

Water Tap Fees This chart shows water tap fee revenue since 2010.

Dollars

WATER FUND - TAP FEES $10,400,000 $9,600,000 $8,800,000 $8,000,000 $7,200,000 $6,400,000 $5,600,000 $4,800,000 $4,000,000 $3,200,000 $2,400,000 $1,600,000 $800,000 $Tap Fees

2010 $1,785,928

2011 $2,394,111

2012 $4,378,473

16

2013 $7,896,850

2014 $10,167,203

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

WasteWater Fund

2014 Budget

2014 Actual

Beginning Fund Balance

$11,893,000

$11,893,000

$11,730,087

$10,503,782

Tap Fees

380,403

1,001,500

Interest

633,620

95,282

Other

523,451

933,791

$13,267,561

$12,534,355

REVENUES Sewer Charges

Total Revenues EXPENDITURES Metro District

$7,500,000

$7,380,728

Ongoing

3,128,501

2,742,535

Major Capital Maintenance

1,961,852

1,194,471

204,600

-

$12,794,953

$11,317,735

472,608

1,216,621

$12,365,608

$13,109,621

3,198,738

2,829,434

$9,166,869

$10,280,187

Capital Total Expenditures Income/(Loss) Ending Fund Balance Goal (25% of Expenditures) Excess/(Deficit)

Revenue Highlights Sewer Tap Fee Revenues remained at an historically high level due to continued incredible levels of residential construction. Revenue from Sewer Charges for 2014 rose a modest 1.6% over the previous year. Receipts from Clear Creek Valley Water & Sanitation District for the use of the City’s sewer mains to transport its effluent to Metro Wastewater facilities came in higher than what was budgeted, as reflected in the elevated Other Revenues.

Expenditure Highlights Treatment charges from the Metro Wastewater Reclamation District represented nearly two-thirds of Total Expenditures in 2014.

Expenditures on Major Capital Maintenance came in well under budget due to the timing of work. Utilities has requested that most of this funding be carried over into 2015.

Wastewater Tap Fees

Dollars

This chart shows sewer tap fee revenue since 2010.

WASTEWATER FUND - TAP FEES

$1,040,000 $960,000 $880,000 $800,000 $720,000 $640,000 $560,000 $480,000 $400,000 $320,000 $240,000 $160,000 $80,000 $Tap Fees

2010 $232,062

2011 $343,561

17

2012 $834,078

2013 $849,001

2014 $1,001,500

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

Stormwater Fund Beginning Fund Balance

2014 Budget

2014 Actual

$5,941,000

$5,941,000

$3,147,497

$3,223,720

28,031

258,193

$3,175,528

$3,481,913

$2,062,029

$1,277,821

932,800

932,800

5,415,414

1,644,892

Total Expenditures

$8,410,243

$3,855,513

Income/(Loss)

(5,234,715)

REVENUES Stormwater Fee Other Total Revenues EXPENDITURES Ongoing Debt Service Capital

(373,600)

Ending Fund Balance

$706,285

$5,567,400

Goal (25% of Expenditures)

2,102,561

963,878

Excess/(Deficit)

$(1,396,276)

$4,603,521

18

Revenue Highlights The City’s Stormwater Utility Fee Revenue, which represents nearly all revenue for the Stormwater Fund, came in consistent with the Budget. The rate for the Stormwater Utility Fee in 2014 had not changed since 2009, though it was increased as of January 1, 2015.

Expenditure Highlights The budget for capital included substantial carryovers from previous years to address potential scenarios for the Garrison Street Bridge Replacement. With all Stormwater-related work completed, this appropriation will be allowed to expire. Ongoing Expenditures came in well under budget due to unspent funding for minor work as opportunities arose.

Golf Fund Revenue Highlights Total revenues were 13% greater in 2014 than in 2013, with golf revenues exceeding $3,000,000 in sales and restaurant revenues topping $1,400,000. Fueling this was a 6% increase in rounds played at West Woods Golf Club, a rate increase in the golf and restaurant price structure and a number of new Grow the Game initiatives that brought new customers to Arvada Golf. Additionally, West Woods Golf Club ran a well-received, year-long 20th anniversary celebration.

Golf Fund

2014 Budget

2014 Actual

Beginning Fund Balance

$ 101,000

$ 101,000

Golf Courses

$3,383,085

$3,041,055

Restaurants

1,193,135

1,405,089

209,475

209,475

Expenditure Highlights

Total Revenues

$4,785,695

$4,655,619

Golf Courses

$1,942,006

$1,699,493

Restaurants

1,363,125

1,348,756

Administration

1,491,869

1,487,835

Total expenditures were 10% greater in 2014 than in 2013. Highlights include the addition of three benefitted Golf Maintenance Worker positions, authorized in the 2014 budget, and increased building maintenance and equipment replacement expenses relating to aging golf facilities. More than 90,000 golfers played at the City’s golf courses and more than 110,000 guests were served at its restaurants.

The Golf Fund fund balance increased by more than $100,000.

REVENUES

City Cash Transfer

EXPENDITURES

Capital Total Expenditures

33,000

13,549

$4,830,000

$4,549,634

(44,305)

105,985

Income/(Loss) Ending Fund Balance

$

56,695

$ 206,985

Goal (11% of Expenditures)

531,300

500,460

Excess/(Deficit)

(474,605)

(293,475)

Golf Rounds by Type - January thru December WEST WOODS

Regular

Special

Tournament

Annual

Senior

Junior

Other

Total

2013

21,548

9,544

2,226

6,687

4,987

780

488

46,260

2014

29,241

2,559

2,105

7,617

6,302

876

484

49,184

7,693

-6,985

-121

930

1,315

96

-4

2,924

36%

-73%

-5%

14%

26%

12%

-1%

6%

LAKE ARBOR

Regular

Special

Tournament

Annual

Senior

Junior

Other

Total

2013

19,996

2,764

878

17,964

0

650

1,865

44,117

2014

12,971

5,517

716

16,370

4,283

656

1,242

41,755

-7,025

2,753

-162

-1,594

4,283

6

-623

-2,362

-35%

100%

-18%

-9%

100%

1%

-33%

-5%

19

Hospitality Fund Revenue Highlights In addition to looking at program revenues in the Hospitality fund, for purposes of more detailed analysis in reviewing and understanding sources and trends, revenues are further broken down into market segments. Total revenues were 4% greater in 2014 than in 2013, driven by increases in the government, association and religious market segments. Arvada Center and In-House market segments decreased $32,000 compared to 2013; historically, these segments produced over $200,000 in revenue annually. Over the last five years, this has been reduced to approximately $75,000. The education and government market segments are slow in responding to an improving economy and showed a decrease of $29,000 in 2014 compared to 2013.

Expenditure Highlights Total expenditures were 7% less in 2014 than in 2013, highlighted by fewer commodities and less replacement equipment being purchased. Overall, 12% or 5,847 more guests visited the Arvada Center Banquet and Conference Center in 2014 compared to 2013, for a total of 52,877. This increase was due to the Arvada Covenant Church hosting their weekly services, as well as an increase in the association and corporate markets segments.

Hospitality Fund

2014 Budget

2014 Actual

$ 554,000

$ 554,000

$1,002,310

$ 783,811

Concession Services

176,994

181,900

Banquet and Guest Services

523,074

444,229

$1,702,378

$1,409,940

$ 347,603

$ 370,882

1,378,228

965,196

127,000

-

27,468

27,468

$1,880,299

$1,363,546

Beginning Fund Balance REVENUES Sales

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

(177,921)

Ending Fund Balance Goal (11% of Expenditures) Excess/(Deficit)

Overall, 12% or 5,847 more guests visited the Arvada Center Banquet and Conference Center in 2014 compared to 2013.

20

46,393

$376,079

$600,393

206,833

149,990

$169,247

$450,403

Internal Service Funds Overview We have five Internal Service Funds – Insurance Fund (Risk Management), Computer Fund, Print Services Fund, Vehicles Fund and Building Fund. Internal Service Funds charge internal programs and departments for use of goods and services. 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.

Insurance Fund

Overview

Insurance Fund

2014 Budget

2014 Actual

Beginning Fund Balance

$4,593,000

$4,593,000

2,030,187

2,032,874

70,019

135,604

$2,100,206

$2,168,478

$2,193,468

$1,886,526

445,398

442,976

$2,638,866

$2,329,502

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

INTERNAL SERVICE funds

(538,660) $4,054,340

(161,024) $4,431,976

The Insurance Fund, administered by the Risk Management Program of Finance, accounts for the City’s self-insurance against loss. It is funded with contributions by all City departments and programs based on their levels and types of exposure. The Fund is also used for loss prevention programs, the protection of City personnel and the preservation of City property and assets.

Revenue Highlights With the exception of a modest increase in Operations charges that includes personnel costs, contributions in 2014 by participating Funds generally remained at 2013 levels.

Expenditure Highlights Expenditures related to Workers’ Compensation rose in 2014, due in large part to payments on a small number of high-dollar claims.

General liability expenditures also increased due to water & sewer main incidents, as well as additional premiums for increased umbrella liability coverage. The continued emphasis on controlling loss frequency and severity allows for accurate forecasting year over year. Variances in annual costs for premiums, claims and loss control activities have remained stable. *Per GASB Statement 10, an additional $807,882 in cash is currently held in the Insurance Fund to cover potentially incurred liabilities as of the beginning of the year. This figure was reached by Risk Management’s actuary for 2013, the revised figure for 2014 was not available at the time of publication.

21

Computer Fund & Print Services Fund Computer Fund/ Print Services Fund

2014 Budget

2014 Actual

Beginning Fund Balance

$6,134,000

$6,134,000

Maintenance

$956,872

$1,057,563

Replacement

899,318

943,888

Print Shop

450,935

316,980

$2,307,125

$2,318,431

Maintenance

$1,176,321

$693,936

Replacement

1,432,956

1,110,593

501,610

371,727

$3,110,887

$2,176,256

Revenues

Total Revenues Expenditures

Print Shop Total Expenditures Income/(Loss) Ending Fund Balance

(803,762) $5,330,238

142,175 $6,276,175

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 Services Fund provides ongoing capital support for the City’s printing needs. Because these two funds operate to support combined activities within the Information Technology Department, the financial reporting is combined for these two funds.

Revenue Highlights Revenues in both the Maintenance and Replacement Funds stayed on track for 2014. The Maintenance Fund had just over a 9% increase and the Replacement Fund 3.62% in comparison to 2013. Print Services revenues continue to be flat from 2013 to 2014. In the Spring of 2014, the Print Shop reduced the color copy charge from fifty cents per copy to thirty-five cents per copy. Effective January 1, 2015 the black and white copy charge will be increasing from five cents to five and a half cents. This rate change will increase revenue to a level that will sustain Print Shop operations, allowing for continual replacement of equipment while keeiping rates well below the commercial market average.

Expenditure Highlights Expenditures were trailing for the Maintenance and Replacement Funds as some planned projects did not get started. These include $85,000 for the replacement of the Point-of-Sales Systems for the golf courses and $75,000 for a fingerprint system for the police department. What did get completed was the purchase of replacement data center infrastructure hardware (servers and storage), which came from a budget amendment of $486,250. This replacement saved $50,000 of maintenance in 2014. The budget for the Computer and Print Services Funds can vary greatly from year to year. This is due to the differing useful life of all the different technology covered under this fund. Print Services expenditures are above 2013 numbers as a result of the outright purchase of new equipment in the Print Shop, a Color Press and a high-volume black and white printer with multiple finishing capabilities. The expected useful life of these new devices is about seven years.

22

Vehicles Vehicles Fund

2014 Budget

2014 Actual

Beginning Fund Balance

$6,350,000

$6,350,000

Maintenance Transfers

$2,253,518

$2,253,518

Replacement Transfers

1,119,750

1,119,750

116,579

376,999

$3,489,847

$3,750,267

Maintenance

$2,259,370

$2,182,275

Replacement

1,810,800

1,732,355

$4,070,170

$3,914,630

Revenues

Other Total Revenues

Income/(Loss) Ending Fund Balance

(580,323) $5,769,677

The Vehicles Fund provides resources for the maintenance of City vehicles and heavy equipment and/or replacement.

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.

Expenditures

Total Expenditures

Overview

Expenditure Highlights A total of 55 units (vehicles and equipment combined) were replaced in 2014.

(164,363) $6,185,638

Buildings Building Fund

2014 Budget

2014 Actual

Beginning Fund Balance

$2,131,000

$2,131,000

$431,301

$431,301

132,721

148,696

$564,022

$579,997

Revenues Replacement Transfers Other Total Revenues

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 Expenditures Replacement

$366,681

$220,799

Capital Lease

117,396

114,851

$484,077

$335,650

79,945

244,347

$2,210,945

$2,375,347

Total Expenditures Income/(Loss) Ending Fund Balance

23

Monthly replacement charges from contributing funds generally remained at 2013 levels, except for increases to both PD Tax Increment Funds 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. Replacement expenditures include the reconstructed Arvada Community Food Bank parking lot and concrete repair at the George Meyers Pool.

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

Operations

Expenditure Highlights

Beginning Fund Balance

Expenditures in 2014 are slightly lower than budget primarily due to reduced spending in professional services, advertising and dues and subscriptions.

2014 Budget $396,890

$396,890

Revenue

775,000

753,964

Expenditures

766,881

746,004

$405,009

$404,850

Ending Fund Balance

Revenue Highlights

Program

2014

Beginning Cash Balance

$875,781

Revenue Expenditures Ending Cash Balance

2014 Actual

21,748 (317,694) 579,835

Reserved for AEDA Loan Program

-

Reserved for Job Creation Program

(23,500)

Reserved for New Entrepreneur Program

(19,500)

Arvada Manufacturing Initiative

(15,000)

Commitments

(395,128)

Available Unallocated Cash Balance

$126,708

24

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

Expenditure Highlights Expenditures in 2014 reflect 27 AEDA small business grants and one loan. The grants were used to help Arvada businesses improve signage, landscaping, facades, and site improvements.

CITY OF ARVADA INVESTMENT REPORT

Investment Portfolio Objectives Pursuant to the City’s investment policy, the primary objectives of the City’s investment activities, in priority order are safety, liquidity and yield.

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

Investment Portfolio Overview The portfolio saw a year-to-date fourth quarter 2014 yield of .647% which is an increase of 11 basis points when compared to the year-to-date fourth quarter 2013 yield of .534%. The benchmark yield for the City’s portfolio, as established by the investment policy, is a weighted benchmark of allowable securities. For the fourth quarter, the weighted benchmark return was .450%, 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, the investment environment continues to be challenging. The Federal Reserve kept interest rates very low through 2014 and it is expected that the Fed will start raising short-term rates in mid-2015 but that process will be slow. The City’s portfolio saw $50 million in investment calls in 2014. We were able to re-invest some of that money into callable securities with a call “lockout” period of at least 6 months which typically have a little higher yield. The average portfolio duration dropped from 2.43 to 2.04 years as we have invested in shorter maturity ranges in anticipation of rates increasing in 2015. We are also keeping a higher balance in our liquid cash accounts to fund construction costs associated with the Transit Hub. 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 12/31/2014 12/31/2013 $1,034,501 $1,085,950 0.647% 0.534% 0.450% 0.340% +20bps +19bps

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

PORTFOLIO CHANGES 12/31/2014 12/31/2013 $ 1,013,883 $ 1,012,960 13,289,185 16,216,933 10,015,299 17,270,066 5,995,000 4,495,000 14,965,657 9,945,387 121,725,000 120,600,000 2,000,000 $167,004,025 $171,540,346

Difference $ (51,449) 0.113% 0.110% +1bps

Difference $ 923 (2,927,748) (7,254,767) 1,500,000 5,020,270 1,125,000 (2,000,000) $(4,536,321)

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

$167,004,025 $167,004,269 $166,585,268 $ (418,757) PORTFOLIO CHARACTERISTICS

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

2.04 0.704% 0.848% 0.970%

PORTFOLIO ALLOCATION

MATURITY DISTRIBUTION

U.S. Agencies, 72.9%

36.3%

40.0% 30.0%

23.5% 17.1%

20.0% 10.0%

Money Market, 0.6%

Corporate, 3.6% LGIP, 9.0%

CD, 6.0%

Savings/ Cash, 8.0%

0.0%

26

15.9%

4.2% 0-.25

.5-1

3.0% 1-2

2-3

Maturity (yrs)

3-4

4-5

City of Arvada Investments as of December 31, 2014 The City’s portfolio as of December 31, 2014 is shown below, which includes credit ratings as of December 31, face value and actual interest earnings for 2014.

Description

CUSIP/Ticker

Credit Rating 12/31/2014

Coupon Rate

Maturity Date

Ending Face

Interest

Amount/Shares

Dividends $

SAVINGS/CHECKING JPMorgan Chase Savings

CHASE

N/A

0.03%

N/A

$ 1,046,566

Wells Fargo Savings

WELLSFARGO

N/A

0.09%

N/A

1,036,102

3,520

N/A

0.30%

N/A

11,206,517

-

13,289,185

4,622

JP Morgan Checking Sub Total Savings/Checking

1,102

CERTIFICATE OF DEPOSIT Vectra Bank

4049504774

N/A

0.30%

03/18/2015

5,007,650

7,650

Vectra Bank

4049504782

N/A

0.30%

03/18/2015

5,007,650

7,650

10,015,299

15,299

Sub Total Certificate Of Deposit CORPORATE Apple, Inc

037833AH3

AA1

0.45%

05/03/2016

1,410,000

6,345

Berkshire Hathaway

084664BX8

AA2

0.95%

08/15/2016

3,085,000

29,308

Exxon Mobil

30231GAA0

AAA

0.92%

03/15/2017

1,500,000

6,716

5,995,000

35,653

Sub Total Corporate LOCAL GOVERNMENT INVESTMENT POOL C Safe LGIP

CSAFE

AAAm

0.12%

N/A

8,019,451

9,765

Colo Trust LGIP

COLOTRUST8001

AAAm

0.12%

N/A

6,946,207

4,939

14,965,657

14,704

1,013,883

924

1,013,883

924

5,000,000

16,500

Sub Total Local Government Investment Pool MONEY MARKET CSIP MM

CSIP

AAAm

0.08%

N/A

Sub Total Money Market US AGENCY FFCB

3133ED7L0

AAA

0.33%

11/13/2015

FFCB

3133ED6Z0

FFCB

3133EC3M4

AAA

0.55%

05/12/2016

3,000,000

16,500

AAA

0.60%

11/21/2016

3,000,000

18,000

FFCB

3133ECP40

AAA

0.64%

05/09/2017

5,000,000

32,000

FFCB

3133EAU22

AAA

0.68%

09/12/2016

5,000,000

34,000

FFCB

3133EDTR3

AAA

1.09%

08/28/2017

4,125,000

-

FFCB

3133EEEG1

AAA

1.34%

06/11/2018

5,000,000

-

FHLB

313382TR4

AAA

0.60%

04/24/2017

5,000,000

30,000

FHLB

313382HD8

AAA

0.70%

12/27/2016

5,000,000

35,000

FHLB

313382HT3

AAA

0.75%

03/27/2017

5,000,000

37,500

FHLB

313382W25

AAA

0.75%

08/15/2017

5,000,000

37,500

FHLB

313380U88

AAA

0.80%

04/17/2017

3,000,000

24,000

Chart continues next page

27

Description

CUSIP/Ticker

Credit Rating 12/31/2014

Coupon Rate

Maturity Date

Ending Face

Interest

Amount/Shares

Dividends

FHLB

3134G4ZY7

AAA

1.02%

04/21/2017

3,000,000

15,300

FHLB

3133727K4

AAA

2.13%

12/28/2015

2,000,000

42,500

FHLB

3130A3EG5

AAA

1.25%

11/20/2019

5,000,000

-

FHLB

313382F65

AAA

0.60%

03/27/2018

5,600,000

37,800

FHLB

313382FL2

AAA

0.63%

03/27/2018

5,000,000

34,375

FHLB

313382T78

AAA

0.55%

04/30/2018

3,000,000

17,625

FHLB

313382Z63

AAA

0.50%

05/22/2018

5,000,000

31,250

FHLMC

3134G56W0

AAA

0.65%

12/23/2016

5,000,000

16,250

FHLMC

3134G5SB2

AAA

0.75%

12/19/2016

3,000,000

-

FHLMC

3134G4Z76

AAA

1.00%

04/07/2017

3,000,000

15,000

FHLMC

3134G5SU0

AAA

1.00%

06/30/2017

3,000,000

-

FHLMC

3134G5A21

AAA

1.15%

12/26/2017

5,000,000

28,750

FHLMC

3134G4VU9

AAA

1.15%

09/11/2017

3,000,000

17,250

FHLMC

3134G5A54

AAA

1.25%

12/26/2017

5,000,000

31,250

FHLMC

3134G5SQ9

AAA

0.50%

06/30/2017

4,000,000

-

FNMA

3136G0XD8

AAA

1.00%

08/28/2017

6,000,000

60,000

FNMA

3136G1LA5

AAA

0.50%

05/15/2018

Subtotal US Agency Total

3,000,000

18,750

121,725,000

647,100

$ 167,004,025

$ 718,301

Investment Management Focus - 2014 2014 continued to be a struggle for the capital markets as the Fed has kept interest rates low, which will most likely continue until mid-2015. 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 (five years in the City’s case), but also staggering maturities in between to smooth the revenue stream. This will allow ample cash should the City experience unexpected needs, allow us to take advantage of better coupons in longer maturity buckets and the ability to capitalize on investment opportunities if/when yields begin to recover.

Agency spreads are tighter, callables will get better yield: Call provisions are a tool used by issuers to refinance debt at a more attractive rate. Our focus will be to purchase callable securities with a call “lockout” period of six months or more to enhance investment income over the LGIP funds, which are currently yielding 12bps.

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