City of Arvada 2015 First Quarter Financial Report by City of Arvada

Financial Report

2015 First Quarter

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

2015 First Quarter The Financial Report for the City of Arvada provides an unaudited overview of the major funds and how their revenues and expenditures performed in comparison to budget. This is not meant to be a complete accounting, but rather a quick look at the highlights. General Fund revenues in the first quarter of 2015 continued a growth pattern that started in 2012. Sales tax revenues are up 7.1% over the same time period in 2014. The increase has been widespread with many categories experiencing double-digit growth. This includes Fast Food and Fast Casual Restaurants, Clothing, Auto Care, Retail Hardware, Furniture, Appliances and Flooring. The last four categories are directly related to the continued explosive building activity. The City issued 142 single-family building permits in the first three months of the year. This is a 36% increase over 2014 and three times the normal average. It is no surprise that Colorado was named the number one economy in the United States. We are experiencing it firsthand.

General Fund Building Revenue through March 150

$1,800,000 $1,600,000

120

$1,400,000 90

$1,000,000 60

$800,000 $600,000

$400,000 $200,000 $0 GF Building Revenue Single Family (Detached) Permits

2011 $664,651

2012 $965,674

2013 $1,549,612

2014 $1,519,817

2015 $2,099,580

104

142

Auto Use tax was up 11% and experienced the highest first quarter collections since 2002. We have experienced five years of growth and all signs point to continuing that trend in 2015. Many large Capital projects continued work in the first part of 2015. The Olde Town Transit Hub is well underway. Current efforts include relocation of utility lines, shoring and excavation. Three other projects, Britton and Griffith Parks and the Kipling Trail Underpass, are discussed in detail later in the document. Recommendations for future capital projects from the Citizens Capital Improvement Project Committee will be made to council later in June. Water and Wastewater Funds are also feeling the effects of the building activity with tap fees in both funds increasing over 75% as compared to the same time period in 2014. Tap fees are solely used for capital work on the two systems including water storage and expansion.

Permits

Dollars

$1,200,000

Golfers were out in force as the weather turned warm early in 2015. Rounds at West Woods were up 51% and Lake Arbor experienced a 12% gain. While this is exciting news, the largest part of the golf season happens between May and October. Investment income experienced an uptick in return of almost 10 basis points, as compared to first quarter 2014, to a yield of .695%. While this seems like a small number, it is higher than our benchmark and the highest first quarter return since 2011. Yield will still be a challenge as the Feds have not raised shortterm rates. It does not seem like they will do so until later in 2015. The first quarter results all point to continued growth in our local economy. We will continue our conservative approach with a focus on our growing operating and capital maintenance needs.

The General Fund pays for the City’s basic services. This includes police, street maintenance, planning, transportation planning, code enforcement, 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 budgeted cash balances, revenues and expenditures to budget and prior year amounts in the same areas. General Fund

2015 Budget

As of 3/31/15

Beginning Fund Balance

$30,847,000

Revenues

$75,878,254

$14,516,159

$13,156,874

77,038,736

12,985,618

12,456,463

Ongoing

7,439,052

Capital

1,255,000

770,650

200,000

$85,732,788

$13,756,268

$12,656,463

$20,992,466

$31,606,891

EXPENDITURES

JPPHA Expenditures Income/(Loss) Ending Fund Balance

(9,854,534) $20,992,466

As of 3/31/14

759,891

500,411

$31,606,891

The General Fund began 2015 with a $30,847,000 fund balance. Some of this fund balance, $4,135,132, was dedicated to 2014 carryover items not completed in 2014 and one-time requests. An additional $3,106,146 of one-time funds was added to the Capital Fund for the Olde Town Transit Hub improvements. We will also use $2,613,256 to balance the budget. These dollars will be taken from fund balance.

Revenue Highlights Overall, revenues are up 10% compared to the same time period in 2014. In general, revenues are in line with the 2015 budget estimate for the majority of revenue categories, except sales tax and building revenue, which are on pace to surpass estimates. The major revenue categories of sales tax, use tax, property tax, building and intergovernmental revenues are discussed in more detail in the following graphs and tables. The investment report at the end of this financial 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 now until late 2015.

GENERAL FUND

General Fund Overview

GENERAL FUND REVENUES

Sales Tax 53%

Property Tax 7%

Use Tax 2%

Other 15%

Auto Use Tax 7% Interest 1%

Franchise Fees 8%

Court Fines & Fees Building Use Tax & Permits 2% 5%

Sales Tax We continue to see the same growth in sales tax that occurred in 2014. Sales tax collections in the first quarter of 2015 increased 7.06% over the same quarter in 2014. Sales tax collections lag one month; therefore, collections for the first quarter represent only two months.

Sales Tax Collections

$7,000,000 $6,000,000 $5,000,000 $4,000,000

The 2015 sales tax budget is $43,587,267 which reflects a 3.25% increase over the 2014 budget and a .9% increase over the 2014 actual sales tax collections. If this trend continues, we will look to revise sales tax estimates later this summer.

$3,000,000 $2,000,000 $1,000,000 $Sales Tax

03/31/2011 $5,335,005

03/31/2012 $5,620,783

03/31/2013 $6,051,902

03/31/2014 $6,279,068

03/31/2015 $6,722,639

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. Building activity in 2014 went into the books with the highest number of single-family permits on record. Although, we are only three months into 2015, the building activity appears to be continuing its pace. Building use tax collections are already at 48% of budget. Therefore, during the budget process, this number will be revised. Auto use tax is a similar story. In 2014, the City saw the highest auto use collections since the previous high in 2002. First quarter auto use collections are 11% ahead of first quarter 2014, so we should easily exceed budget for 2015 assuming this trend continues. General use tax is a stable source of revenue that does not have the up and down swings that we see in building and auto use tax. It is trending higher in the first quarter of 2015 and on pace to meet budget.

Use Tax Collections $2,500,000

$2,000,000

$1,500,000

$1,000,000

$500,000

03/31/2011 $172,091

03/31/2012 $172,571

03/31/2013 $179,830

03/31/2014 $164,311

Auto

$614,804

$699,804

$806,298

$868,221

$971,504

Building

$259,116

$494,072

$764,557

$667,925

$1,015,778

General

Property Tax The City maintains one of the lowest property tax rates in the Denver Metro Area with a mill levy of 4.31. In Colorado, the mill is placed on the assessed valuation. Although property tax accounts for less than 7% of General Fund revenues, it is a stable source of revenue . The budget for 2015 is $4,850,000.

03/31/2015 $240,906

Property Tax Collections $1,800,000 $1,600,000 $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $Property Tax

03/31/2011 $1,361,462

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. Road and Bridge funds are disbursed several months after collection, so January revenues will not be received until April. HUTF funds are disbursed the month after they are collected, so the graph represents two months’ revenue. The decrease in this source of revenue is due to gas tax receipts that were not processed in time for the normal distribution. The April distribution should include these missed amounts. The total 2015 budget for these two sources of revenue is $4,695,980.

03/31/2012 $1,723,913

03/31/2013 $1,611,945

03/31/2014 $1,608,708

03/31/2015 $1,610,624

Intergovernmental Revenues $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $Jefferson County HUTF

03/31/2011 $-

03/31/2012 $-

03/31/2013 $-

03/31/2014 $-

03/31/2015 $-

$593,804

$609,840

$602,577

$621,173

$438,760

Expenditure Highlights Expenditures in 2014 rose 4% over 2014. The majority of the increase is made up of a one-time transfer of $500,000 to the Arvada Economic Development Association. Personnel and other ongoing operating costs make up the rest of the difference, increasing at just over 3%. All of these items are in the budget for 2015. The transfer to the CIP fund, which makes up all of the Capital budget listed prior, will occur later in the year.

GENERAL FUND EXPENDITURES

Miscellaneous 1%

Transfers 19%

Personnel 47%

Debt Service 5%

Contracts 13%

Supplies and Expenses 6%

Services and Charges 9%

Salary and Benefit Savings Salary & Benefits Salaries & Wages

2015 Budget

As of 3/31/14

$5,128,995

$5,079,935

980,122

235,535

211,174

Group Insurance

6,135,343

976,756

909,887

Retirement

3,400,792

593,553

590,919

Medicare

373,809

64,856

61,165

Temporary Wages & SS

227,365

83,910

47,573

Vacancy Savings Overtime

Other Total

$30,171,876

As of 3/31/15

(809,226)

359,185

79,502

81,394

$40,839,265

$7,163,108

$6,982,047

Temp Wages were up significantly in the first quarter of 2015, due primarily to the use of independent contractors in PW to help manage TOD projects currently underway, as well as increases in the City Attorneyâ€™s Office. The timing and increased frequency of snow events is reflected in the elevated Overtime Expenditures.

Overview

The Arvada Center Fund accounts for all revenues and expenditures related to performing arts, development, marketing, education and gallery at the Arvada Center. Sources of revenue include grants, charges for services and transfer from the City’s General Fund.

Arvada Center

2015 Budget

Beginning Fund Balance

As of 03/31/15

$ 201,000

$5,335,306

$ 864,607

As of 03/31/14

REVENUES Generated

$ 821,334

SCFD

1,029,553

306,842

278,277

City Cash Transfer

1,611,251

402,813

446,339

City In-Kind Transfer

2,225,881

$10,201,991

$1,574,262

$1,545,950

Ongoing

$7,819,253

$1,293,011

$1,433,307

In-Kind

2,225,881

$10,045,134

$1,293,011

$1,433,307

156,857

281,251

112,643

$357,857

$482,251

Total Revenues EXPENDITURES

Total Expenditures Income/(Loss) Ending Fund Balance

Revenue Highlights Performing Arts ticket sales experienced a 2.4% decrease in the first quarter compared to the same time period in 2014. The Center produced one play and one musical in the first quarter of 2014. In 2015, the Center opted to produce two plays instead. This change has led to decreased revenues and expenditures. Both Harvey and Charlotte’s Web exceeded their revenue goals, offsetting the shortfall from The Archbishop’s Ceiling. Overall revenues for the first quarter of 2015 increased as compared to 2014 due to increased SCFD revenues of $28,566.

Expenditure Highlights Total expenditures are down 9.8% in the first quarter of 2014 compared to the same time period last year. This reduction was due to changes in the Center’s theatrical season structure for 2015.

ARVADA CENTER

Arvada Center

SCFD Revenue $400,000 $300,000 $200,000 $100,000 $0

03/31/2011

03/31/2012

03/31/2013

03/31/2014

03/31/2015

City of Arvada Contributions $500,000 $400,000 $300,000 $200,000 $100,000 $0

03/31/2011

03/31/2012

03/31/2013

03/31/2014

Cash

03/31/2015

In-Kind

Both Harvey and Charlotte’s Web exceeded their revenue goals, offsetting the shortfall from The Archbishop’s Ceiling. 8

Parks Fund Overview

Parks Fund

The Parks Fund accounts for costs associated with the acquisition, design, development, maintenance and beautification of parks, open space and trails within the City. Revenues are derived from the Cityâ€™s General Fund, Grants Fund, Lands Dedicated Fund and Jefferson County Open Space funds.

Beginning Fund Balance

2015 Budget

As of 03/31/15

As of 03/31/14

$4,455,000

$3,620,182

$299,620

$272,892

3,061,070

765,734

742,978

APEX Reimbursement

963,454

6,015

Other

213,076

64,651

60,520

$7,857,783

$1,130,039

$1,082,406

$8,169,021

$1,214,589

$1,138,653

$8,169,021

$1,214,589

$1,138,653

REVENUES Open Space City Cash Transfer

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

(311,238)

Ending Fund Balance

$4,143,762

(84,550) $4,370,450

Revenue Highlights Jefferson County Open Space Revenue, reflecting only January collections, was 9.79% greater in 2015 compared to a similar period in 2014. All other revenue categories are performing as expected.

Expenditure Highlights First quarter expenses are in line with previous yearâ€™s expenses for a similar time period. Many projects will get started as the calendar finally turns to spring and summer.

PARKS FUND

PARKS FUND REVENUE

Parks Fund Revenue $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $APEX

03/31/11 $-

03/31/12 $-

03/31/13 $-

03/31/14 $6,015

03/31/15 $35

Cash Transfer

$710,068

$702,011

$720,886

$742,978

$765,734

Open Space

$227,774

$250,590

$261,769

$272,892

$299,620

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.

.21 and .25 Tax Increment Funds Beginning Fund Balance

2015 Budget

As of 03/31/15

As of 03/31/14

$7,449,000

$6,811,046

$1,057,487

$997,077

1,475,580

343,222

260,840

117,000

45,053

85,466

$8,403,626

$1,445,761

$1,343,383

$8,098,926

$1,472,422

$1,301,028

420,000

788

1,428,518

$8,518,926

$1,473,210

$2,729,546

REVENUES Sales Tax/Audit Revenue Use Tax Other Total Revenues EXPENDITURES Ongoing Capital Total Expenditures Income/(Loss)

(115,300)

Ending Fund Balance

$7,333,700

(27,449)

(1,386,163)

$7,421,551

Revenue Highlights Sales Tax and Use Taxes (Auto, General, Building and Public Improvement) continue to increase. First quarter 2015 shows an overall increase of 11.35% compared to the first quarter 2014. Sales Tax increased just over 6% and Use Tax by 31.58%, spurred by the continued building activity.

Expenditure Highlights Salaries and Benefits in the first quarter of 2015 have increased just under 11% in comparison to the same time period in 2014. While Overtime saw a reduction of over 7% or $3,372 from 2014, both Assignment Pay and On-Call Pay combined increased over $10,113, with the 2015 approved policy change. This increase also represents the hiring of two new police officers. The large decrease in Capital expenditures is related to the completion of the community stations in the first quarter of 2014.

SPECIAL REVENUE FUNDS

Special Revenue Funds Overview

Community Development Overview The Community Development Fund accounts for all entitlements, revenues and expenditures of the Community Development Block Grants (CDBG) program and the Home Rehabilitation program and Essential Home Repairs program.

Community Development Fund

2015 Budget

As of 3/31/15

As of 3/31/14

Beginning Fund Balance

$6,299,000

$ 114,737

$ 31,197

$34,197

668,001

13,988

10,797

45,000

11,250

Revenues

Revenue Highlights

Recovered

Revenues for 2015 were running consistently with 2014 Revenues through the first three months of the year.

Grants

Expenditure Highlights

Interest/Other

9,000

2,294

2,162

Expenditures on energy efficiency improvements for Parkview Village West Apartments represent the increase in Ongoing Expenditures. Last yearâ€™s Capital Project Transfer reflects payments for the renovation of the Memorial Neighborhood Park Revitalization project, which was completed in 2014.

Total Revenues

$ 836,738

$ 58,729

$58,407

$ 624,727

$ 82,982

$ 68,512

Essential Home Repairs

392,044

34,779

66,232

Capital Project Transfer

64,123

$1,016,771

$117,760

$198,867

City Cash Transfer

Expenditures Ongoing

Total Expenditures Income/(Loss)

(180,033)

(59,031)

$6,118,967

$6,239,969

2015 Budget

As of 3/31/15

$ 16,000

Recovered

$ 19,178

Grants

3,939,000

996,925

905,825

82,400

1,000

$4,041,578

$998,377

$913,257

Ongoing

$ 381,443

$ 67,903

$ 71,247

Rents

3,638,166

918,011

774,109

31,333

5,984

4,688

$4,050,941

$ 991,898

$850,044

(9,363)

6,479

63,214

Ending Fund Balance

(140,460)

Arvada Housing Authority Overview The Authority administers funds received for rent subsidy to low/ moderate income households under Section 8 of the U.S. Housing Assistance Payment Program.

Arvada Housing Authority Beginning Fund Balance Revenues

Revenue Highlights The 10% increase in Grants Revenue was primarily due to the timing of receipts from the US Department of Housing & Urban Development.

Expenditure Highlights As of March 31st, the Arvada Housing Authority was assisting 501 families with monthly rent subsidies. These subsidies continue to constitute approximately 90% of the Fundâ€™s expenditures. As with Grants Revenue, increased Rents Expenditures were due primarily to timing in the first three months of the year.

Transfers Interest/Other Total Revenues

EOC ENERGY ASSISTANCE 2011-2015 through March - Dollars (Grants)

Total Expenditures Income/(Loss) Ending Fund Balance

$12,000

1,383

6,637

22,479

Total Dollars

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

Series1

2011 $9,002

2012 $9,287

2013 $6,972

2014 $9,007

2015 $11,250

7,346

Expenditures

Transfers

As of 3/31/14

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

Capital Projects Capital Improvement Fund

2015 Budget

As of 3/31/15

As of 3/31/14

Beginning Fund Balance

$38,551,182

REVENUES

$ 7,528,952

$ 2,017,280

$ 803,523

CIP Administration

$10,011,960

996,811

$2,995,792

CIP Street Projects

1,181,090

$326

145,437

CIP Traffic Projects

2,269,479

$217,978

142,549

CIP Park Projects

2,807,848

$541,658

929,046

50,000

$87,384

110,228

$16,320,377

$ 1,844,157

$4,323,052

EXPENDITURES

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

(8,791,425)

173,123

$29,759,757

$35,031,653

(3,519,529)

Revenue Highlights In 2015, the revenue in the CIP Fund will be transfers from the General and Lands Dedicated Funds. The revenues will also include an additional one-time transfer of $3,106,046 from the General Fund for the Olde Town Transit Hub and $90,000 for improvements to 82nd and Simms approved in the carry-over ordinance in March.

Expenditure Highlights There are many CIP projects that fall into the Taking Lasting Care category. The City sets aside monies to replace or renovate the current infrastructure. The projects for 2015 include collector street improvements, ADA ramps, intersection safety improvements, signal replacement, playground renovation, trail renovation and tree replacement. Current expenditures reflect charges for projects started in 2014 that include Britton and Griffith parks, the Kipling underpass and the Olde Town Transit Hub. New projects for 2015 will consist of a study for the City Hall master plan, Clear Creek Valley Park (which is being performed in conjunction with Hyland Hills), and Leyden Creek Trail. We expect much more work on parks, traffic and street projects as we move into summer and peak construction season.

CAPITAL IMPROVEMENT FUND

Capital Improvement Fund Overview

Project Highlights With a fund balance of over $35 million, there are many capital improvement projects in various stages of construction being worked on in the City. In 2015, we would like to highlight several projects each quarter. The first quarter will highlight Britton and Griffith Station Parks and the Kipling Street Underpass. Britton Park is a 6.9 acre site at 69th and Eaton and is approximately 35 percent complete. The park project, when completed, will contain shelters, two new playgrounds, seating areas taking advantage of the beautiful views, a large multi-purpose court, walkways featuring a large trail loop around the park, horseshoe pits, new site furniture, a large native grass/wildlife area, sod, pedestrian lighting, irrigation system and landscaping. The project will also include utility and drainage improvements including new curb and gutter and attached sidewalks on 69th and Eaton streets. Griffith Station Park is a 3.5 acre site at 52nd and Carr Street near the old trolley car route which is the now the location of the inter-urban trail. The Park is 45 percent complete. The Griffith Station project design follows the historic rail theme. When completed the park will contain shelters, a large themed playground, trails, a multi-purpose court, seating areas, site furniture, pedestrian lighting, irrigation system, walkways, horseshoe pits and landscaping. The project will also include utility and drainage improvements including new curb and gutter along Carr Street with an attached walkway which will connect the new park to the inter-urban Trail, providing additional access to the park from surrounding neighborhoods. Both Britton and Griffith Station parks are scheduled to be completed at the end of June. Kipling Street Underpass will allow bicyclists and pedestrians to cross Kipling Parkway near W 56th Place and extend Van Bibber Creek Trail from Oak Street to Independence Avenue. This connection is in preparation for the 2016 commencement of the Gold Line commuter rail system and will add bicyclepedestrian facilities to access the Olde Town and Kipling Ridge stations. Additionally, the project will benefit neighborhood residents accessing retail, sport, and recreational destinations at the Lutz/Stenger Sports Complex and Ralston Central Park. The City was awarded a $1,600,000 grant from the Denver Regional Council of Governments and will match the grant with 20%, or $400,000, of its own funds. The construction contract will be awarded this summer and completed in July 2016.

Overview 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. Water Fund

2015 Budget

As of 3/31/15

As of 3/31/14

Beginning Fund Balance

$71,970,000

$20,700,210

$2,519,132

$2,299,237

Tap Fees

8,329,106

2,438,322

1,559,970

Interest

329,438

78,992

65,138

Other

698,449

435,666

561,975

$30,057,203

$5,472,112

$4,486,321

$17,644,709

$3,352,068

$3,228,581

Major Capital Maintenance

4,187,564

529,076

887,370

Capital

5,058,656

$439,920

371,007

$29,152,629

$4,321,064

$4,486,959

904,574

1,151,048

$72,874,574

$73,121,048

REVENUES Water Charges

Total Revenues EXPENDITURES Ongoing

Total Expenditures Income/(Loss) Ending Fund Balance

(638)

Revenue Highlights Revenues from Water Charges were up 9.6% for the first quarter, with consumption effectively even with 2014 through three months. The apparent rise was due to the timing of utility cycle batch postings. Tap Fees continued to be sold at an incredible pace, reflecting continued substantial residential building activity. Lower sales of construction water accounted for most of the decrease in Other Revenues.

Expenditure Highlights The decrease in Major Capital Maintenance Expenditures was due to the timing of annual expenditures. Much of the increase in Capital Expenditures was for work to extend the Cityâ€™s water system northwest to accommodate growth.

ENTERPRISE FUNDS

Water Fund

Water Consumption This chart, with data provided by Utilities, shows first quarter water consumption since 2011.

WATER CONSUMPTION As of March

Thousands of Gallons

700,000 600,000 500,000 400,000 300,000 200,000 100,000 1000s of Gallons

2011 658,633

2012 680,612

2013 699,889

2014 623,164

2015 622,815

This chart shows first quarter water tap fee revenue since 2011.

WATER FUND - TAP FEES As of March $2,800,000 $2,400,000 Dollars

$2,000,000 $1,600,000 $1,200,000 $800,000 $400,000 $Tap Fees

2011 $585,481

2012 $418,267

2013 $1,309,849

2014 $1,559,970

2015 $2,438,322

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

2015 Budget

As of 3/31/15

As of 3/31/14

Beginning Fund Balance

$13,048,000

$12,401,341

$2,498,704

$2,274,034

Tap Fees

555,211

272,210

117,951

Interest

128,674

27,467

23,735

Other

612,581

8,575

$13,697,807

$2,798,456

$2,424,295

$7,832,149

$1,958,037

$1,845,182

Ongoing

3,140,527

587,086

596,321

Major Capital Maintenance

2,720,762

286,002

13,300

501,500

$14,194,938

$2,831,125

$2,454,803

REVENUES Sewer Charges

Total Revenues EXPENDITURES Metro District

Capital Total Expenditures Income/(Loss)

(497,131)

Ending Fund Balance

$12,550,869

(32,669)

Revenue Highlights Sewer Tap Fee Revenues remain elevated due to robust residential construction. Most of the yearover-year increase in Sewer Charges was due to the timing of utility cycle batch postings.

Expenditure Highlights Treatment charges from the Metro Wastewater Reclamation District represented about 70% of Total Expenditures in the first quarter. The jump in Major Capital Maintenance Expenditures was due to the timing of payments on contract work.

(30,507)

$13,015,331

Wastewater Tap Fees This chart shows first quarter sewer tap fee revenue since 2011.

WASTEWATER FUND - TAP FEES As of March $280,000 $240,000

Dollars

$200,000 $160,000 $120,000 $80,000 $40,000 $0 Tap Fees

2011 $40,265

2012 $71,369

2013 $153,953

2014 $117,951

2015 $272,210

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

2015 Budget

As of 3/31/15

As of 3/31/14

$5,565,000

$3,326,374

$ 834,836

$ 732,783

32,341

13,566

13,265

$3,358,715

$ 848,402

$ 746,049

$1,931,716

$ 301,807

$ 283,191

933,288

233,322

233,200

1,635,000

1,140

176,010

$4,500,004

$ 536,270

$ 692,401

312,132

53,647

REVENUES Stormwater Fee Other Total Revenues EXPENDITURES Ongoing Debt Service Capital Total Expenditures Income/(Loss)

(1,141,289)

Ending Fund Balance

$4,423,711

$5,877,132

Revenue Highlights The Cityâ€™s Stormwater Utility Fee rate rose by 2% as of the beginning of 2015, the first increase since 2009. However, a vast majority of the reflected year-over-year increase was due to the timing of utility cycle batch postings.

Expenditure Highlights The drop in Capital Expenditures was due to the absence of payments on the Garrison Street Bridge Replacement and related Ralston Creek channelization, which were wrapping up in early 2014.

Golf Fund Overview The Golf Course Fund accounts for all revenues and expenses of the Lake Arbor and West Woods Golf Courses, including food service operations

Revenue Highlights

Golf Fund

2015 Budget

As of 03/31/15

$ 207,000

Golf Courses

$3,489,178

$ 303,598

$ 347,462

Restaurants

1,228,929

229,765

186,785

215,759

54,475

52,369

$4,933,866

$ 587,838

$ 586,616

Golf Courses

$2,046,354

$ 398,105

$ 320,309

Expenditure Highlights

Restaurants

1,276,254

215,941

201,294

Total first quarter expenses were up in 2015 compared to 2014, most noteably in golf operations as sales inventory, in the pro shop and restaurants, was purchased earlier this year compared to last year.

Administration

1,472,172

318,480

302,395

241,000

5,560

$5,035,779

$ 938,085

$ 823,998

The first quarter 2015 was an excellent one for Arvada Golf. Total rounds played at West Woods Golf Course were up 51% over 2014 and up 12% at Lake Arbor Golf Course. Although the majority of rounds played are in the second and third quarters of the year, this performance represents an excellent way to begin 2015. Revenue from the sale of Lake Arbor Golf Course annual memberships, totaling $101,000, was posted in the second quarter of this year, as opposed to the first quarter in 2014. Restaurant operations posted a 7% increase over first quarter 2014.

Beginning Fund Balance REVENUES

City Cash Transfer Total Revenues EXPENDITURES

Capital Total Expenditures Income/(Loss)

(101,913)

Ending Fund Balance

Golf Rounds by Type - January - March Westwoods Player Support Super Users Annuals Tournament Grow the Game Total

Variance

2014

2015

2,327

3,721

1,394

60%

855

1,075

220

26%

58%

3,194

4,815

1,621

51%

Lake Arbor

Variance

2014

2015

Player Support

2,136

2,647

511

24%

Super Users Annuals

2,138

2,140

(14)

-50%

4,302

4,801

499

12%

Tournament Grow the Game Total

As of 03/31/14

$ 105,087

(350,247) $ (143,247)

Hospitality Fund Overview The Hospitaliuty Fund accounts for all revenue and expenses associated with food service activities including the operation of banquet facilities at the Arvada Center for the Arts and Humanities and offsite catering. Hospitality Fund

2015 Budget

As of 03/31/15

As of 03/31/14

Beginning Fund Balance

$ 602,000

$1,032,380

$ 146,073

$ 154,146

Concession Services

192,444

14,979

15,875

Banquet and Guest Services

614,514

88,142

95,603

$1,839,338

$249,194

$ 265,624

REVENUES Sales

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

$ 695,763

59,979

55,052

1,351,302

158,982

183,840

28,292

6,867

$2,075,357

$218,960

$ 245,759

(236,019) $ 365,981

30,234 $ 632,234

Revenue Highlights The first quarter 2015 was comparable to the first quarter 2014 as measured by the number of events held, attendance and income generated. In first quarter 2015, there were 87 events held, serving approximately 11,000 guests. The Arvada Center market segment continues to decline as they no longer use hospitality for their catering needs. The association market segment also declined compared to first quarter 2014. The wedding market segment posted an increase over last year, as did the education market segment.

Expenditure Highlights Total expenses in the first quarter 2015 were comparable to first quarter 2014.

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 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. Insurance Fund

2015 Budget

As of 3/31/15

Beginning Fund Balance

$4,065,000

1,817,992

454,547

As of 3/31/14

Revenues Contributions Other Total Revenues

508,218

72,120

34,399

32,356

$1,890,112

$ 488,947

$ 540,575

$2,126,669

$ 467,743

$ 306,583

426,889

116,364

137,179

$2,553,558

$ 584,107

$ 443,762

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

(663,446) $3,401,554

(95,161)

96,813

$3,969,839

Revenue Highlights The reduction in Contributions Revenue was due was due to a 28% reduction in charges for operations, which was caused by the move of two City Attorney’s Office FTEs from the Insurance Fund to the General Fund. Charges for lines of coverage - Workers Compensation, General Liability, Auto Liability, Property, and Auto Physical - remained generally unchanged.

Expenditure Highlights Year-over year increases in Administration for the first quarter were due primarily to workers compensation and general liability lines of coverage. The increase in expenditures for first quarter Workers Compensation costs was due to the timing of annual premium payments, March in 2015 and April in 2014. Payments for workers compensation claims and ergonomic supplies were actually lower for first quarter 2015 compared to 2014. General liability was higher for two reasons. The first was again the timing of the annual liability insurance premium being booked in March, and payments for the 76th Avenue water incident started hitting the account in 2015. The reduction in Operations expenses was primarily due to the move of two City Attorney’s Office FTEs out of the Insurance Fund. *Per GASB Statement 10, an additional $1,269,963 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 2014.

INTERNAL SERVICE FUNDS

Internal Service Funds Overview

Computer Fund & Print Services Fund Overview The Computer Fund provides resources for both ongoing maintenance and replacement of the Cityâ€™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 Cityâ€™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. Computer Fund/ Print Services Fund

2015 Budget

As of 03/31/15

As of 03/31/14

Beginning Fund Balance

$6,240,000

Maintenance

$ 950,006

$ 238,357

$ 239,911

Replacement

961,061

260,920

279,139

Print Shop

464,463

102,136

56,453

$2,375,530

$ 601,413

$ 575,503

Maintenance

$1,072,121

$225,497

$205,733

Replacement

2,323,213

94,963

252,805

450,581

70,583

51,522

$3,845,915

$391,043

$510,060

210,370

65,444

Revenues

Total Revenues Expenditures

Print Shop Total Expenditures Income/(Loss)

(1,470,385)

Ending Fund Balance

$4,769,615

$6,450,370

Revenue Highlights Maintenance and Replacement Fund revenues are on track as budgeted for 2015. While the Maintenance Fund is right on target at 25% of budget, the Replacement Fund is tracking at 27%. Print Shop revenue is only at 22% of budget for 2015, but when comparing this to the same time period in 2014, revenue has increased 81%. This is reflective of the rate change increase that was implemented for 2015.

Expenditure Highlights Expenditures associated with replacement and maintenance of systems across City operations are currently on track for 2015. Operational network expenses of both maintenance of current systems and replacement of infrastructure components have included departments such as Courts, Police, Arvada Center, Finance and Parks, Golf and Hospitality. All expenses are tied to keeping systems running efficiently in order to provide reliable quality customer service. Print Shop expenses are below projections. No large expenditures are anticipated for 2015, as a majority of equipment purchases were completed in 2014.

Vehicles Vehicles Fund

Overview

2015 Budget

As of 3/31/15

$6,247,000

Maintenance Transfers

$2,321,122

$ 580,280

$ 563,380

Replacement Transfers

1,130,947

282,737

279,938

144,378

112,616

93,614

$3,596,447

$ 975,634

$ 936,931

Maintenance

$3,056,258

$ 464,774

$ 420,105

Replacement

1,725,440

27,664

$66,540

Total Expenditures

$4,781,698

$ 492,439

$ 486,645

Income/(Loss)

(1,185,251)

483,195

450,286

Ending Fund Balance

$5,061,749

Beginning Fund Balance

As of 3/31/14

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.

Revenues

Other Total Revenues Expenditures

$6,730,195

Revenue Highlights Charges for Vehicle Maintenance services, which include personnel costs, rose 3% over 2014 levels. Charges for Vehicle Replacement contributions rose 1% over 2014 levels.

Expenditure Highlights The rise in Maintenance Expenditures reflects full staffing of Fleet operations in 2015, which was not the case during the first three months of 2014. Included in budgeted Maintenance Expenditures is $500,000 for the construction of a new storage building at the Indiana Shops, which will include a PD weapons testing range. There are currently 19 vehicles or pieces of equipment scheduled for replacement in the 2015 Replacement Expenditures category.

Buildings Building Fund Beginning Fund Balance

Overview

2015 Budget

As of 3/31/15

As of 3/31/14

$2,368,000

$ 446,814

$ 111,704

$ 107,825

136,312

121,677

120,808

$ 583,126

$ 233,380

$ 228,633

Revenue Highlights

Monthly replacement charges from contributing funds were generally increased by 3% for 2015, having been frozen since 2009.

Revenues Replacement Transfers Other Total Revenues Expenditures Replacement

$ 588,615

Capital Lease

120,918

Total Expenditures Income/(Loss) Ending Fund Balance

$ 709,533 (126,407) $2,241,593

28,392

27,840

204,988

27,840 200,793

$2,572,988

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.

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. Replacements planned for this year include carpet in parts of City Hall, the Annex, and Arvada Center, HVAC units at the Arvada Center, Ralston Treatment Plants and both golf course club houses, the Ralston House roof, and parking lot repairs throughout the City.

Arvada Economic Development Association Overview AEDA was established to encourage and stimulate all forms of economic development, commercial and industrial. The services provided by AEDA benefit both the City and citizens by providing information and services to existing and prospective businesses and industries. Funding for AEDA consists of compensation from the City for services it renders the City and its citizens. The City also provides administrative support for AEDA. A Board of Directors appointed by City Council governs AEDA.

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 2015 are at 19% of budgeted expenditures and are comparable to 2014 expenditures. Salaries and benefits represent the largest expenditure at approximately 56% of the expenditures.

Revenue Highlights Revenues in 2015 consist of a cash contribution from the City of Arvada for $500,000, repayments from one loan and interest revenue.

Expenditure Highlights Expenditures in 2015 reflect six AEDA small business grants. The grants were used to help Arvada businesses improve signage, landscaping, facades, and site improvements.

As of 3/31/14

2015 Budget

As of 3/31/15

$475,577

Revenue

790,879

199,250

197,196

Expenditures

784,897

150,075

167,424

$481,559

$524,752

Operations Beginning Fund Balance

Ending Fund Balance

Program

2015

Beginning Cash Balance

$579,836

Revenue

509,812

Expenditures

(93,188)

Ending Cash Balance

996,460

Reserved for Arvada Manufacturing Initiative Reserved for AEDA Small Business Grants

(9,600) (100,000)

Reserved for Job Creation Program

(23,000)

Reserved for New Entrepreneur Program

(19,500)

Commitments

(306,468)

Available Unallocated Cash Balance

$537,892

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 In the first quarter of 2015 the portfolio saw a yield of 0.695%. It is an increase of almost 10bps when compared to the first quarter 2014. The City’s portfolio has been consistently performing above the benchmark yield which is a weighted average yield of allowable securities, as established by the investment policy. For the first quarter of 2015 the weighted benchmark return was 0.457%. Short-term rates continue to be anchored by the Fed’s zero interest target rate policy. Interest rates on our savings accounts dropped even more compared to the same time last year. To maximize the earnings certain changes were made in the City’s portfolio allocation. For instance, we moved most of the money from our savings accounts to LGIPs which currently yield 6-11 bps higher and still provide the liquidity to meet our daily operating cash needs. The City’s portfolio increased by $7 million compared to the first quarter 2014. $10 million in CDs with the interest rate of 0.30% expired in March and have been renewed at a higher rate of 0.55% which is a positive sign. Overall, we can see a very modest uptrend in our investment portfolio yield since 2013 when it hit bottom at 0.534%. During the first quarter 2015, the portfolio experienced $11 million in investment calls. These calls have not been reinvested yet and are temporarily placed in LGIP funds while we are exploring the best available investment options. We continue to focus on investments within the 2-3 year maturity range, which allows us to take advantage of slightly higher yields than short-term rates but at the same time will keep us in the game when the rates do start to go up. Although the U. S. economy shows steady signs of recovery the Federal Reserve errs on the cautious side, keeping the rates near zero due to the unfavorable global economic environment and falling prices in the commodities market, specifically crude oil. However, the market expectation is that the Fed will start raising interest rates in the second half of 2015. Key information regarding the City’s portfolio is shown in the following tables and graphs:

CITY OF ARVADA INVESTMENT REPORT

Investment Portfolio Objectives

Interest Earnings Portfolio Yield Benchmark Yield Tracking Error

PORTFOLIO PERFORMANCE 03/31/2015 03/31/2014 $284,029 $246,725 0.695% 0.599% 0.457% 0.313% +24bps +29bps

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

PORTFOLIO CHANGES 03/31/2015 03/31/2014 $1,014,150 $1,013,210 11,991,117 21,140,670 10,022,463 17,284,936 5,995,000 5,995,000 24,766,254 17,465,038 118,725,000 100,600,000 2,000,000 $172,513,984 $165,498,854

Difference $37,304 0.096% 0.144% -5bps

Difference $939 (9,149,553) (7,262,472) 7,301,216 18,125,000 (2,000,000) $7,015,130

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

$172,513,984 $172,513,914 $172,581,303 $ 67,319 PORTFOLIO CHARACTERISTICS

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

1.83 0.714% 0.838% 0.847%

PORTFOLIO ALLOCATION

MATURITY DISTRIBUTION

U.S. Agencies, 68.8%

37.5%

40.0% 30.0%

24.4% 18.9%

20.0%

Money Market, 0.6%

LGIP, 14.4%

Corporate, 3.5%

10.0%

Savings/ Cash, 7.0%

0.0%

CD, 5.8%

9.3%

7.0%

0-.25

2.9% .5-1

1-2

2-3

Maturity (yrs)

3-4

4-5

City of Arvada Investments as of March 31, 2015 The Cityâ€™s portfolio as of March 31, 2015 is shown below, which includes credit ratings as of March 31, face value and actual interest earnings for the first quarter of 2015. Description

CUSIP/Ticker

Credit Rating 03/31/2015

Coupon Rate

Maturity Date

Ending Face

Interest

Amount/Shares

Dividends

SAVINGS/CHECKING JPMorgan Chase Savings

CHASE

N/A

0.03%

N/A

$146,624

$58

Wells Fargo Savings

WELLSFARGO

N/A

0.08%

N/A

136,225

163

N/A

0.30%

N/A

11,708,269

11,991,117

221

JP Morgan Checking Sub Total Savings/Checking CERTIFICATE OF DEPOSIT Vectra Bank

5791396061

N/A

0.55%

06/25/2016

5,011,232

Vectra Bank

5791396079

N/A

0.55%

06/25/2016

5,011,232

10,022,463

Sub Total Certificate Of Deposit CORPORATE Apple, Inc

037833AH3

AA1

0.45%

05/03/2016

1,410,000

Berkshire Hathaway

084664BX8

0.95%

08/15/2016

3,085,000

14,654

Exxon Mobil

30231GAA0

AAA

0.92%

03/15/2017

1,500,000

6,908

5,995,000

21,561

Sub Total Corporate LOCAL GOVERNMENT INVESTMENT POOL C Safe LGIP

CSAFE

AAAm

0.14%

N/A

11,919,934

3,227

Colo Trust LGIP

COLOTRUST

AAAm

0.14%

N/A

12,846,319

2,833

24,766,254

6,060

1,014,150

267

1,014,150

267

5,000,000

Sub Total Local Government Investment Pool MONEY MARKET CSIP MM

CSIP

AAAm

0.11%

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

AAA

0.60%

11/21/2016

3,000,000

FFCB

3133ECP40

AAA

0.64%

05/09/2017

5,000,000

FFCB

3133EAU22

AAA

0.68%

09/12/2016

5,000,000

17,000

FFCB

3133EDTR3

AAA

1.09%

08/28/2017

4,125,000

22,481

FFCB

3133EEEG1

AAA

1.34%

06/11/2018

5,000,000

FHLB

313382TR4

AAA

0.60%

04/24/2017

5,000,000

FHLB

313382HD8

AAA

0.70%

12/27/2016

5,000,000

17,500

FHLB

313382HT3

AAA

0.75%

03/27/2017

5,000,000

18,750

FHLB

313382W25

AAA

0.75%

08/15/2017

5,000,000

FHLB

313380U88

AAA

0.80%

04/17/2017

3,000,000

Chart continues next page

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

FHLB

3133727K4

AAA

2.13%

12/28/2015

2,000,000

FHLB

3130A3EG5

AAA

1.25%

11/20/2019

5,000,000

FHLB

313382F65

AAA

0.75%

03/27/2018

5,600,000

21,000

FHLB

313382FL2

AAA

0.75%

03/27/2018

5,000,000

18,750

FHLB

313382T78

AAA

0.63%

04/30/2018

3,000,000

FHLB

313382Z63

AAA

0.75%

05/22/2018

5,000,000

FHLMC

3134G56W0

AAA

0.65%

12/23/2016

5,000,000

FHLMC

3134G5SB2

AAA

0.75%

12/19/2016

3,000,000

FHLMC

3134G4Z76

AAA

1.00%

04/07/2017

3,000,000

FHLMC

3134G5SU0

AAA

1.00%

06/30/2017

3,000,000

FHLMC

3134G5A21

AAA

1.15%

12/26/2017

5,000,000

FHLMC

3134G4VU9

AAA

1.15%

09/11/2017

3,000,000

17,250

FHLMC

3134G5A54

AAA

1.25%

12/26/2017

5,000,000

FHLMC

3134G5SQ9

AAA

0.50%

06/30/2017

4,000,000

FNMA

3136G0XD8

AAA

1.00%

08/28/2017

6,000,000

30,000

FNMA

3136G1LA5

AAA

0.75%

05/15/2018

3,000,000

Subtotal Agency

118,725,000

162,731

Totals

172,513,984

190,840

Investment Management Focus - 2015 2015 continues to be a struggle for the capital markets as the Fed has kept interest rates low. 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 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 with callables generating a 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 at least six months to enhance investment income over the LGIP funds, which are currently yielding 14bps.

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