City of Arvada 2015 Year-End Financial Report

Financial Report

2015 Year-End

Olde Town Transit Hub - Rick Assmus

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

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.

Revenues started out 2015 with a bang and never slowed down. The reduction in the price of oil, and the corresponding decrease in gas prices, led to increased consumer confidence and spending. The Federal Reserve did not adjust target interest rates until December, keeping borrowing rates at all-time lows throughout 2015. Lower rates resulted in a continued strong housing market, especially in the single-family detached category.

General Fund revenues finished the year with 7.8% growth over 2014. This marks the fourth consecutive year of growth (2012-2015) since the recession in 2011. All major revenue categories participated, led by building revenues and sales tax. Even interest revenue experienced an uptick, albeit a small one, at 13 basis points over 2014 to close at .78%.

Sales tax numbers continued to be strong, closing out the sixth consecutive year of growth (2009-2015). This included double-digit increases in the major categories of Fast-Casual Restaurants, Health and Specialty Foods, Auto Care, Office Supplies, Office Equipment, Furniture, Appliances and Flooring. Grocery Stores and General Department Stores also returned strong year-over-year growth with 4.9% and 3.7%, respectively. The only major category to experience a decline was Public Utilities. An unseasonably warm spring, coupled with a mild summer, led to reduced energy costs for residents.

The graph below represents single-family detached building permits and overall building revenues for the past five years. Since the recession, building activity has increased every year, with 647 single-family permits issued in 2015. This represents the highest number of single-family permits issued going back to the early 1990s. Colorado continues to have one of the strongest financial markets, which has driven the housing market to its all-time high.

$12,000,000

700

$10,000,000

580

$8,000,000

460

$6,000,000

340

$4,000,000

220

$2,000,000

100

$0 GF Building Revenue Single-Family (Detached) Permits

2011 $3,896,438

2012 $5,137,472

2013 $6,072,258

2014 $9,200,979

2015 $10,501,613

125

321

427

581

647

Permits

Dollars

General Fund Building Revenue through December

-20

Auto Use tax collections almost broke the $7 million dollar mark for the first time in history. Aided by increased population and lower interest rates, revenue grew 16.6% over 2014. Long-term forecasts do not show this revenue pattern continuing, but for the short term, auto use should be a reliable source.

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OVERVIEW

R. Assmus

2015 Year-End Report

The Gold Line, now called the G Line, is scheduled to open in October of 2016. Preparations along the line continue, with most of the work concentrated around the stations. Plazas at all three stations in Arvada are almost complete. Testing of trains along the track will start in early spring. The parking structure at the Olde Town Station is now out of the ground with construction beginning on the second deck. Progress is steady with crews working multiple shifts and six days a week.

The transition of the operation of the Arvada Center from the City to a nonprofit is fast approaching. With a planned cut-over date of July 1, 2016, many operational items still need to be worked out. Dedicated teams from the current Center staff, along with many City employees, take the time to meet weekly to keep checklist items from falling through the cracks. While this is going on, there is still a business to run. Controlling costs while trying to increase market share will always be a challenge. 2015 had some improvement compared to the previous couple of years, but there is still more work to do. Final numbers show the Center ended with a $239,000 deficit, partially offset by an additional cash transfer from the General Fund of $180,000.

The Parks Fund experienced a wonderful milestone in 2015, the completion of a master plan that was started in 1973. With the addition of Britton and Griffith Parks, all Arvada residents now have a park with a 10-minute walk of their home. Parks’ focus will now shift to upgrading some of the older parks, as playground equipment, irrigation and design standards have changed since the 1970s and 1980s.

The Arvada Housing Authority is feeling the effects of the very tight rental market. Currently, they are only able to help 471 families out of a maximum of 508 through the Section 8 housing program. This is because of the growth in rental costs over the past couple of years.

https://www.rentrange.com/arvada-co/ The City of Arvada is in the middle of a significant growth pattern. Single-family and multi-family residential homes are springing up out west by the hundreds.

Transit-Oriented Development is in full swing around each of the light rail stations and businesses are interested in obtaining a presence in our City. This has created some opportunities but has also brought with it a list of challenges. Infrastructure, specifically street maintenance and capacity, will need to be addressed in the very new future. As the City continues to grow, the ability to provide the services our residents count on, without additional resources, will become a challenge. Strategic planning, coupled with long-term financial planning, should allow the City to identify these areas and work on solutions.

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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 • Transfer to the Capital Improvement Projects Fund for new parks, transportation and other infrastructure projects The following table provides a comparison of budgeted fund balances, revenues and expenditures to actual amounts in 2015. We have included the original 2015 budget adopted in October 2014 and the 2015 revised budget, which was a result of the ten-year financial planning model that was completed in the third quarter 2015 and adopted by council in the fourth quarter 2015.

General Fund

2015 Budget

2015 Revised (ten-year plan)

2015 Actual

Beginning Fund Balance

$30,847,000

$30,847,000

$30,847,000

Revenues

$75,878,254

$83,052,567

$87,032,183

$77,197,814

$77,777,914

$72,286,074

EXPENDITURES Ongoing Capital

7,299,974

7,357,082

7,357,082

JPPHA (Jefferson Parkway Public Highway Authority)

1,255,000

1,255,000

770,650

$85,752,788

$86,389,996

$80,413,806

Expenditures Net Income/(Loss) Ending Fund Balance Goal (17% of Expenditures) Excess/(Deficit)

(9,874,534)

(3,337,429)

6,618,377

$20,972,466

$27,509,571

$37,465,377

14,577,974

14,686,299

13,670,347

$ 6,394,492

$12,823,272

$23,795,030

Budget Dedicated for 2016-2024 JPPHA (Jefferson Parkway Public Highway Authority)

$

-

$

-

$

484,350

Carryovers to 2016

-

-

1,569,725

One-time Items added in 2016

-

-

2,929,100

Olde Town Transit Hub in 2016

-

-

4,260,596

10,549,702

10,549,702

$10,549,702

$19,793,473

Use of Fund Balance 2016-2024 Total Dedicated Budget

$

-

The General Fund will end 2015 with a fund balance of a little more than $28 million, after carry-over and one-time items that will be expended in 2016.

Some of this balance, $2,054,076, will be used for items not completed in 2015. Another portion, $2,929,100, will be dedicated towards one-time items.

Additionally, $4,260,596, 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.

Revenue Highlights 2015 was an outstanding year for revenue in the General Fund. All revenue categories were up over 2014 and exceeded their budgets except franchise fees. As you will see on the following pages, sales tax, auto use tax and building-related revenues led the way with increases of 5.6%, 16.6% and 17.1%, respectively, over 2014. Overall, revenues experienced a 7.8% increase over 2014 and finished $3.9 million dollars over the revised 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.

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GENERAL FUND

General Fund Overview

GENERAL FUND REVENUES Sales Tax 48%

Use Tax 2%

Property Tax 5%

Auto Use Tax 8%

Other 19% Interest 1%

Franchise Fees 5%

Sales Tax

In 2015, sales tax collections increased 5.6% over 2014. This is very respectable, considering that this increase follows five consecutive years of sales tax increases, three years which exceeded 5%.

Grocery stores and general department stores increased 4.96% and 3.67%, respectively, over 2014. These two categories account for 36% of total sales tax. Other large categories which include retail hardware, restaurants, furniture/ appliances/flooring and auto care/leasing, all showed increases over 7%. Utilities/cable and telephone equipment were the only categories that showed decreases over the prior year. The utilities/cable category decreased primarily due to the wet weather during the spring of 2015.

Court Fines & Fees 2%

Building Use Tax & Permits 10%

Sales Tax Collections

$50,000,000 $40,000,000 $30,000,000 $20,000,000 $10,000,000 $0

2011 2012 2013 2014 2015 Sales Tax $35,852,374 $37,954,667 $40,205,021 $43,211,510 $45,642,944

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

Use Tax Collections $14,000,000 $12,000,000

General use tax is a stable source of revenue and showed a slight increase over 2014.

$10,000,000

Auto use tax collections for 2015 were almost $7 million or 16.6% over 2014, demonstrating that there is still strong demand for new vehicles. However, we continue to be conservative when budgeting for this revenue source as these increases cannot be sustained over time.

$6,000,000

Building use tax is also up over 17% from 2014 due to new home construction, primarily in northwest Arvada, and around the light rail stations. There was some commercial development, mostly infill, with additional planned over the next few years.

$8,000,000

$4,000,000 $2,000,000 $0 General

2011 $1,511,848

2012 $1,220,977

2013 $1,554,343

2014 $1,533,818

2015 $1,598,995

Auto

$4,340,794

$4,804,227

$5,379,579

$5,982,520

$6,973,208

Building

$1,780,442

$2,385,633

$2,884,866

$4,431,197

$5,215,500

Building

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

In Colorado, the mill rate is placed on the assessed valuation.

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

Auto

General

Property Tax Collections

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

Property tax collections in 2015 were slightly ahead of 2014.

Given the increases that we have seen in assessed valuations, many may wonder why there isn’t a larger increase in property tax. Since real property is only appraised every odd-numbered year, tax collections trail the actual change in values, so we will not see the effect from increased valuations until 2016. This increase has been incorporated into the 10-year financial plans.

$3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 Property Tax

Intergovernmental Revenues

2011 $4,643,015

2012 $4,500,376

2013 $4,556,940

2014 $4,600,995

2015 $4,668,082

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 2015, intergovernmental revenue increased 4% over 2014. While these revenue sources are stable, they have not increased at the same pace as the cost of street maintenance; therefore, other general fund revenues have had to fill the gap, reducing resources for other services.

$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 Jefferson County HUTF

2011 $776,092

2012 $855,684

2013 $718,844

2014 $730,239

2015 $734,993

$3,809,048

$3,818,142

$3,847,443

$3,949,386

$4,134,398

HUTF

5

Jefferson County

Expenditure Highlights Total expenditures show savings of over $5.9 million. Unspent JPPHA funds in the amount of $484,350, personnel and benefit savings of $1,975,521 and carryovers of $1,569,726 make up the bulk of this savings. The remaining dollars are spread across all of the major expenditure categories, as departments did a good job of monitoring their budgets and spending appropriately in 2015.

GENERAL FUND EXPENDITURES

Miscellaneous 2%

Transfers 19%

Personnel 48%

Debt Service 5%

Contracts 12%

Supplies and Expenses 6%

Services and Charges 8%

Salary and Benefit Savings Salary & Benefits

2015 Budget

Salaries & Wages

$30,161,104

Vacancy Savings

2015 Actual $29,320,181

(809,226)

-

Overtime

1,049,122

976,735

Group Insurance

6,042,442

5,531,833

Retirement

3,404,792

3,352,421

Medicare

374,456

373,360

Temporary Wages & SS

373,118

527,497

Other

359,185

360,667

$40,954,992

$40,442,693

Total

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Temporary Wages were up significantly in 2015, due primarily to the use of independent contractors by Public Works to help manage Transit-Oriented Development projects currently underway.

Overall savings of 1.2% compared to budget were achieved in 2015.

ARVADA CENTER

Arvada Center Overview

2015 Budget

2015 Actual

For the Arvada Center, 2015 presented many of the same challenges as in prior years, increasing market share while trying to control costs.

Arvada Center

There were positives along the way including: Scientific and Cultural Facilities District (SCFD) revenues, Performing Arts ticket sales, Education programs, and Marketing expenditures. The challenges included: high production costs related to show revenue and operational overhead. When the year closed, the Center needed an additional $239,222 to balance the books –an improvement from the $405,200 needed in 2014. A portion of this difference was funded from the General Fund in the form of $180,000 supplemental cash transfer, leaving a gap of $59,222. This gap will come out of the Center’s fund balance. The total cash contributed from the General Fund to the Center for 2015 was $1,875,536. An additional $1,810,854 of in-kind support was provided, for total General Fund support of $3,686,390.

REVENUES

Total Revenues

Revenue Highlights

Ending Fund Balance

357,857

141,778

The 2015-2016 theater season continues the Center’s tradition of positive reaction from both patrons and critics. The winter musical White Christmas was a success, grossing $912,800 in total tickets sales.

Goal (11% of Expenditures)

1,104,965

1,099,584

Excess/(Deficit)

$ (747,108)

$ (957,806)

Beginning Fund Balance

Generated

$

201,000

$

201,000

$ 5,335,306

$ 5,128,293

SCFD

1,029,553

1,122,316

City Cash Transfer-Original

1,611,251

1,695,536

City Cash Transfer-Additional City In-Kind Transfer

180,000 2,225,881

1,810,854

$10,201,991

$9,936,999

Ongoing

$7,819,253

$8,185,367

In-Kind

2,225,881

1,810,854

$10,045,134

$9,996,221

EXPENDITURES

Total Expenditures Income/(Loss)

156,857

(59,222)

SCFD revenues saw an increase over 2014 of 8% or $83,200. This was also 9% over the 2015 budget. The SCFD’s current authority to levy sales and use tax expires on June 30, 2018. A ballot measure for reauthorization of the tax could happen as soon as November of 2016.

Contributed revenue increased from 2014 by approximately $48,800 or 17%; however, this revenue source was short of its $575,000 budget by 42%.

In addition, another $24,000 was raised to fund a portion of the 2016 Jeffery Siegel concerts. The amount rests in deferred revenue at the end of 2015.

The Center’s second collaboration with Swallow Hill Music Association resulted in 12 concert shows during Summer State. While the budgeted expectation was set at $576,400, total shows grossed just $396,500.

Expenditure Highlights Irving Berlin’s White Christmas - P Switzer Photography 2015

Education programs exceeded their budgeted revenue goal by $30,000, while expenditures were in line with budget. Both runs of Charlotte’s Web were well-received by patrons.

Performing arts programs continue to work toward reducing show expenses. However, Musical Theatre, Theatrical Play, and Production concluded the year at 30% above budget. This will continue to be a challenge in the upcoming years as the Center transitions to non-profit status.

Marketing expenditures are down 4% or $40,000 from 2014. The Center is constantly working on the right mix to increase ticket sales.

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

2011

2012

2013

2014

2015

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 Cash

In-Kind 2011

2012

2013

Total 2014

2015

Irving Berlin’s White Christmas - P Switzer Photography 2015

$0

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Parks Fund Overview 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 City’s General Fund, Grants Fund, Apex and Jefferson County Open Space funds.

Revenue Highlights In 2015, total Park Fund revenue was 6.5% greater than 2014 due to an especially strong year for Jefferson County Open Space tax collections. Open Space tax collections in 2015 were 7.35% greater than 2014, representing an additional $292,500 in revenue. APEX reimbursement revenue was 4.60% higher in 2015 as compared to 2014, but still under budget. All remaining revenue categories performed as expected.

2015 Budget

Parks Fund Beginning Fund Balance

$4,455,000

$3,620,182

$3,978,094

3,061,070

3,079,070

APEX Reimbursement

983,454

842,284

Other

193,076

400,598

$7,857,783

$8,300,045

$8,217,022

$7,766,797

-

-

$8,217,022

$7,766,797

REVENUES Open Space City Cash Transfer

Total Revenues EXPENDITURES Ongoing Capital Total Expenditures

(359,239)

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

533,249

$4,095,761

$4,988,249

903,872

854,348

$3,191,889

$4,133,901

R. Assmus

In 2015, total Park Fund expenditures were approximately 1.89% greater than in 2014 and under 2015 budget by 5%. As a result, the ending fund balance was greater than originally forecasted - a strong performance year for Arvada Parks.

2015 Actual

$4,455,000

Income/(Loss)

Expenditure Highlights

PARKS FUND

PARKS FUND

9

PARKS FUND REVENUE

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

2012 $877,333

2013 $828,696

2014 $829,498

2015 $842,284

Cash Transfer

$2,740,040

$2,790,917

$2,883,545

$2,937,398

$3,079,070

Open Space

$3,142,349

$3,312,981

$3,537,126

$3,685,566

$3,978,094

R. Assmus

2011 $865,995

APEX

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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 and the second accounts for the .25 cent sales tax.

Sources 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

2015 Actual

$7,449,000

$7,449,000

$6,811,046

$7,170,115

1,475,580

2,124,922

117,000

210,257

$8,403,626

$9,505,294

$9,088,698

$7,774,747

420,000

396,221

$9,508,698

$8,170,968

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

Revenue Highlights

Capital

In 2015 Sales Tax increased by 5.73% and Use Taxes (Auto, General and Building) by 15.84%. Sales Tax and Use Taxes increased in total by $678,000 over 2014. Partnerships with outside agencies increased by 2.39%. These partnerships provided over $60,000 in 2015 and included agencies such as Colorado Automobile Theft Prevention program (BATTLE) and High Visibility Impaired Driving Enforcement (HVE). In 2015, a Community-Oriented Policing Services (COPS) Program federal grant for $875,000 was awarded for salary and fringe benefits for seven new Police Officer positions for three years, beginning in 2016. The City’s required match is 20% in 2016, 30% in 2017 and 50% in 2018.

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

(1,105,071)

1,334,326

$6,343,929

$8,783,326

1,045,957

898,806

$5,297,972

$7,884,520

Expenditure Highlights

Arvada Police Department

Personnel-related expenditures increased in total by $644,000 or 10.36% in 2015. With continued personnel realignment into the Community Stations, salaries increased by 10.29% from 2014. Retirements and resulting promotions throughout the ranks provided some savings in 2015, approximately $201,000 or 4.4%.

With the 2015 approved policy change, Assignment Pay and On-Call Pay combined to increase just under $39,000. Shift Differential matched 2014 with no noticeable increase. Overtime, however, did see an increase of 34.91% or $75,000 over 2014.

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Community Development

2015 Budget

2015 Actual

$6,299,000

$6,299,000

$ 114,737

$ 200,315

668,001

468,259

45,000

45,000

Community Development Fund

Overview

Beginning Fund Balance

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.

REVENUES

Revenue Highlights

City Cash Transfer

Due to some substantial deferred loan payments reflected in Recovered Revenues, the City was limited in how much it could draw from HUD in 2015. This is the cause of the gap between Budget and Actual for Grants Revenue.

Interest/Other

9,000

11,212

Total Revenues

$836,738

$724,786

$ 884,001

$ 683,275

302,044

281,760

-

-

500,000

500,000

$1,686,045

$1,465,035

(849,307)

(740,249)

$5,449,693

$5,558,751

Recovered Grants

EXPENDITURES Ongoing

Expenditure Highlights A drop in expenditures on energy efficiency audits and improvements represents much of the overall decreases in Ongoing Expenditures.

The Capital Project Transfer represents the use of $500,000 in HODAG funding for sidewalk improvements along West 60th Avenue between Lamar Street and Sheridan Boulevard.

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

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.

Revenue Highlights

Arvada Housing Authority Beginning Fund Balance

Grants

Expenditure Highlights As of December 31, the Arvada Housing Authority was assisting 471 families with monthly rent subsidies out of a maximum 508. These subsidies continue to constitute approximately 90% of the Fund’s expenditures. As with Grants Revenue, increased Rents Expenditures were due primarily to timing in the first half of the year.

The historically low number of client families is notable due to the current rental market. Normally, when a family leaves the program, the Authority would fill the vacancy with another family. However, with drastic increases in rental costs, the AHA hasn’t been filling vacancies like before. Instead, it is using the cost savings to cover elevated costs for the remaining families in the program.

2015 Actual

$

16,000

$

16,000

$

19,178

$

18,002

REVENUES Recovered

Revenues came in generally as expected for 2015..

2015 Budget

3,939,000

3,919,406

82,400

50,000

Interest/Other

1,000

326

Total Revenues

$4,041,578

$3,987,734

$ 399,777

$ 362,576

3,638,166

3,519,798

31,333

33,578

$4,069,275

$3,915,952

(27,697)

71,782

Transfers

EXPENDITURES Ongoing Rents Transfers Total Expenditures Income/(Loss) Ending Fund Balance

$ (11,697)

$

87,782

EOC ENERGY ASSISTANCE 2011-2015 - Dollars (Grants) $60,000

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

Total Dollars

$50,000 $40,000 $30,000 $20,000 $10,000 $0 Series1

2011 $48,800

2012 $52,000

2013 $44,212

2014 $44,492

2015 $52,078

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

Capital Projects 2015 Budget

2015 Actual

$ 38,551,182

$ 38,551,182

$7,528,952

$10,578,593

-

2,267,797

$7,528,952

$12,846,390

CIP Administration

$11,254,790

$10,134,212

CIP Street Projects

5,311,078

1,654,795

CIP Traffic Projects

2,269,479

4,091,726

CIP Park Projects

4,463,580

4,622,350

50,000

348,843

Total Expenditures

$23,348,927

$20,851,926

Ending Fund Balance

$22,731,207

$30,545,646

Capital Improvement Fund Beginning Fund Balance REVENUES Transfers in Other revenue Total Revenues EXPENDITURES

CIP Arvada Center Projects

Anticipated Grant Revenue

10,127,074

Assigned for Projects: CIP Administration

$20,361,295

CIP Street Projects

7,918,980

CIP Traffic Projects

5,144,792

CIP Park Projects

5,103,744

CIP Arvada Center Projects

40,408,602 1,668,154

Ending Fund Balance

$

264,118

R. Assmus

8% Reserve

R. Assmus

Total Assigned for Projects

211,637

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CAPITAL IMPROVEMENT PROJECTS FUND

Capital Improvement Projects (CIP) Fund Overview

Revenue Highlights In 2015, the majority of the revenues in the Capital Improvement Project (CIP) fund consisted of transfers from the General Fund, Lands Dedicated Fund, Community Development Fund and Special Assessments Fund. Other revenues include park development fees, grant revenue and contributions from other governmental agencies.

Expenditure Highlights In 2015, capital expenditures totaled over $20 million. Almost half of the expenditures are related to the Olde Town Transit Hub. With the retaining wall and plaza work complete, construction will begin on the parking garage. Completion is anticipated to coincide with the opening of the Gold Line in October. The Kipling Street Underpass and the Ridge Road improvements are also two new projects that will provide pedestrians and bicyclists easier access to the Gold Line stations. Britton and Griffith parks also opened in 2015, giving citizens in southern and eastern Arvada new choices to enjoy the outdoors.

Not all the capital dollars were spent on new capital projects. Budgeted dollars were spent on renovation of three existing playgrounds and reconstruction of five traffic signals. The construction of 74th Avenue pedestrian and bicyclist bridge will connect Robby Ferrufino Park to a trail

by Indian Tree Golf Course.

Reserved Funds Even though the level of spending on capital projects was over $20 million, there is $30 million reserved for future projects and $10 million in grant revenue that will also supplement these projects.

R. Assmus

Future Work In 2015, the City Council convened a citizen capital improvement projects committee to recommend future capital projects in anticipation of two bond issues being paid off in 2018. In 2016, planning for and construction of the recommended projects will begin.

14

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 Beginning Fund Balance

2015 Budget

Revenue Highlights

2015 Actual

$71,970,000

$71,970,000

$20,700,210

$18,595,392

Tap Fees

8,329,106

10,597,733

Interest

329,438

345,041

Other

698,449

1,882,494

$30,057,203

$31,420,659

$17,744,709

$17,346,414

Debt Service

2,261,700

2,252,725

Major Capital Maintenance

4,087,564

3,572,004

Capital

5,058,656

1,626,854

$29,152,629

$24,797,998

904,574

6,622,661

$72,874,574

$78,592,661

7,288,157

6,199,499

$65,586,416

$72,393,162

REVENUES Water Charges

Total Revenues EXPENDITURES

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

As for Other Revenues, sales of water for construction purposes, as well as water meters, came in well above budget.

Expenditure Highlights Capital Expenditures included substantial work to expand the City’s water system to better serve the northwest area of Arvada. For 2016, deferred work on the Leyden Cavern water storage project and further work to augment cathodic protection for the City’s water transmission lines are planned. *$37,352,971 of the Fund Balance is a cash escrow reserved in Denver Water’s name for the Gross Reservoir expansion.

R. Assmus

Ongoing

For the Fourth Quarter of 2015, Water Charges showed a sharp reversal compared to the preceding three quarters, rising 143% over the Fourth Quarter of 2014. Total consumption finished 2015 down 6.3%. Annual Tap Fee receipts cleared $10 million for the second consecutive year due to continued robust building activity.

15

ENTERPRISE FUNDS

Water Fund

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

WATER CONSUMPTION 6,000,000

Thousands of Gallons

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

2011 5,049,729

2012 5,700,412

2013 4,707,585

2014 4,775,208

2015 4,474,570

This chart shows water tap fee revenue since 2011.

Dollars

WATER FUND - TAP FEES $11,200,000 $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

2011 $2,394,111

2012 $4,378,473

16

2013 $7,896,850

2014 $10,167,203

2015 $10,597,733

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

Revenue Highlights

2015 Budget

2015 Actual

$13,048,000

$13,048,000

$12,401,341

$10,858,398

Tap Fees

555,211

1,146,951

Interest

128,674

116,262

Other

612,581

862,790

$13,697,807

$12,984,401

$ 7,832,149

$ 7,832,149

Ongoing

3,140,527

2,891,011

Major Capital Maintenance

2,720,762

2,304,786

501,500

-

$14,194,938

$13,027,946

Wastewater Fund

As with Water Taps, Sewer Tap Fee Revenues remain substantially elevated, with 2015 being the second consecutive year of Tap Fee Revenue above $1,000,000.

Beginning Fund Balance

Expenditure Highlights

Sewer Charges

REVENUES

Treatment charges from the Metro Wastewater Reclamation District represented three-fifths of Total Expenditures for the year. The Department of Utilities will request that the budgets for Capital, specifically for infill sewer system extensions and easement modifications, be approved for carry-over into 2016.

Total Revenues EXPENDITURES Metro District

Capital Total Expenditures

R. Assmus

Income/(Loss)

(497,131)

Ending Fund Balance

$12,550,869

$13,004,455

3,548,734

3,256,987

$ 9,002,135

$ 9,747,468

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

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

Dollars

WASTEWATER FUND - TAP FEES $1,200,000 $1,120,000 $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

2011 $343,561

2012 $834,078

2013 $849,001

17

2014 $1,001,500

(43,545)

2015 $1,146,951

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

Stormwater Fund Beginning Fund Balance

2015 Budget

2015 Actual

$5,565,000

$5,565,000

$3,326,374

$3,348,154

32,341

82,745

$3,358,715

$3,430,899

$2,306,716

$2,169,427

933,288

869,731

1,385,000

1,660

Total Expenditures

$4,625,004

$3,040,817

Income/(Loss)

(1,266,289)

Ending Fund Balance

$4,298,711

$5,955,082

1,156,251

760,204

$3,142,460

$5,194,877

REVENUES Stormwater Fee Other Total Revenues

Revenue Highlights The City’s Stormwater Utility Fee rate rose by 2% as of the beginning of 2015, the first increase since 2009. Total Utility Fee receipts rose 3.2% for 2015 over 2014.

Expenditure Highlights The Department of Utilities will request that the budgets for Capital, specifically for an Estes Street Outfall and further flood mitigation efforts in the wake of 2013 flooding, be approved for carry-over into 2016.

EXPENDITURES Debt Service Capital

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

390,082

R. Assmus

Ongoing

18

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

2015 Budget

2015 Actual

$ 207,000

$ 207,000

Golf Courses

$3,489,178

$3,309,361

Restaurants

1,228,929

1,473,308

215,759

230,274

$4,933,866

$5,012,944

Golf Courses

$2,210,080

$2,076,137

Restaurants

1,285,904

1,558,779

Administration

1,298,795

1,241,367

241,000

10,201

$5,035,779

$4,886,484

Golf Fund

In 2015, total Golf Fund revenue exceeded the original budget by 7.7%. Golf-related revenue was approximately 8.8% greater in 2015 compared to 2014 due to exceptionally strong retail sales in the pro shops and outside tournament rounds played. While rounds were down at Lake Arbor almost 11%, they were up at West Woods over 3%.

Restaurant sales were 4.8% greater in 2015, with more than 128,000 people served at both golf course restaurants, an increase of 18,000 customers over 2014.

Beginning Fund Balance REVENUES

City Cash Transfer Total Revenues

Expenditure Highlights

EXPENDITURES

In 2015, total Golf Fund expenditures were approximately 7.41% greater than in 2014 and under the 2015 budget by 3%. As a result, the ending fund balance was approximately $228,000 greater than originally forecast. 2015 was a strong performance year for Arvada Golf considering the challenges faced with the wet start to the golf season.

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

Golf Rounds by Type - January - December Westwoods

Variance

2014

2015

33,561

34,186

625

2%

7,617

8,029

412

5%

Super User Clubs

3,162

2,835

(327)

(10%)

Tournament

4,334

4,955

621

14%

510

729

219

43%

49,184

50,734

Player Support Super Users Annuals

Grow the Game Total

Lake Arbor

1,550

3%

Variance

2014

2015

Player Support

23,033

20,383

(2,650)

(12%)

Super Users Annuals

16,370

14,065

(2,305)

(14%)

Super User Clubs

1,263

1,486

223

18%

Tournament

716

901

185

26%

Grow the Game

373

496

123

33%

41,755

37,331

Total

(4,424)

(11%)

19

(101,912)

126,460

$ 105,088

$ 333,460

553,936

537,513

$ (448,848)

$ (204,053)

Hospitality Fund Overview The Hospitality 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 off-site catering.

Revenue Highlights In 2015, total Hospitality Fund revenue exceeded 2014 by .18%.

Sales revenue saw a slight decrease of 1.29% due to economic challenges primarily within the education and government market segments. The wedding market is currently down 50% compared to the average of the past five years. The main challenge is the aesthetics in the ballroom. While Concession Services revenue in 2015 reflected a slight 1% decrease, Banquet and Guest Service increased 3.21% over 2014. In 2015, a total of 38,346 people received culinary services.

2015 Budget

Hospitality Fund Beginning Fund Balance

2015 Actual

$

602,000

$

602,000

$

784,557

$

773,708

REVENUES Sales Concession Services

172,960

180,195

1,006,193

466,867

$1,963,710

$1,420,770

Banquet and Guest Services Total Revenues

Expenditure Highlights

EXPENDITURES

In 2015, total Hospitality Fund expenditures were approximately 3.65% less than in 2014 and $762,965 or 36.76% under the 2015 budget. The large reduction in budget was due to the delay of replacing capital equipment until after the master plan study has been completed. The plan study is scheduled for completion in the summer of 2016. As a result, the ending fund balance was greater than originally forecast.

Administration

$

Operations

724,055

$

352,262

1,351,275

962,833

Capital

-

-

Transfer to General Fund

-

-

$2,075,330

$1,315,095

Total Expenditures Income/(Loss) Ending Fund Balance

(111,620) $

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

20

490,380

105,676 $

228,286 $

262,094

707,676 144,660

$

563,015

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 Beginning Fund Balance

2015 Budget

2015 Actual

$4,065,000

$4,065,000

$1,817,992

$1,818,190

72,120

80,216

$1,890,112

$1,898,406

$2,301,669

$1,928,655

434,889

427,491

$2,736,558

$2,356,147

REVENUES Contributions Other Total Revenues EXPENDITURES

Total Expenditures Income/(Loss) Ending Fund Balance*

(846,446) $3,218,554

(457,741) $3,607,259

Revenue Highlights Contributions Revenue was down overall by 11.8% for 2015 from 2014, due to 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 The Risk Management program had another successful year in 2015. One of the large projects was the updating of the Motor Vehicle Records for employees whose job responsibilities include driving, other than Public Safety, which conducts their own review. Working with representatives from other City departments to design a manageable program, Risk reviewed records for over 300 employees, and recommended remedial training for only a handful of individuals.

*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.

21

R. Assmus

Risk Mgmt Administration Risk Mgmt Operations

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 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 Innovation and Technology Department, the financial reporting is combined for these two funds.

Computer Fund/ Print Services Fund

2015 Budget

2015 Actual

$6,240,000

$6,240,000

Maintenance

$ 950,006

$ 953,429

Replacement

961,061

1,163,908

Print Shop

464,463

386,848

$2,375,530

$2,504,185

Maintenance

$1,072,121

$ 766,142

Replacement

2,323,213

741,968

450,581

336,735

$3,845,915

$1,844,845

Beginning Fund Balance REVENUES

Total Revenues EXPENDITURES

Print Shop Total Expenditures Income/(Loss)

(1,470,385)

Ending Fund Balance

$4,769,615

659,340 $6,899,340

22

Revenue Highlights The Maintenance and Replacement funds, combined, exceeded their anticipated budgets by 10.79% The Print Shop is 16.71% short of revenue budget, but with expenditures utilizing only 75%, this leaves the Print Shop with a $50,113 net income for 2015. Overall, Print Shop revenue increased just under 22% in comparison to 2014.

Expenditure Highlights Combined, the Maintenance and Replacement Fund utilized just under 50% of their budget. A large work effort was rolled out in 2015 to properly evaluate existing products and their anticipated replacement. As a result, there are several expenditures that will be pushed into 2016. Some existing maintenance expenses have increased as the pricing models on certain systems (i.e. back-up software) are based on the performance capability of the hardware. These systems are in the process of being evaluated to determine if they are still appropriate for the changing environment. The Print Shop expenses were below budget and 9.35% less than 2014 expenditures.

Vehicles Overview 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.

2015 Budget

2015 Actual

$6,247,000

$6,247,000

Maintenance Transfers

$2,321,122

$2,321,122

Replacement Transfers

1,130,947

1,130,947

144,378

892,227

$3,596,447

$4,344,296

Maintenance

$3,056,258

$2,449,476

Replacement

1,725,440

1,494,333

Total Expenditures

$4,781,698

$3,943,809

Income/(Loss)

(1,185,251)

Ending Fund Balance

$5,061,749

Vehicles Fund Beginning Fund Balance REVENUES

Other Total Revenues EXPENDITURES

400,487 $6,647,487

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. Substantial gains from the sale of retired units are reflected in the Other Revenues.

Expenditure Highlights For 2015, Fleet acquired 12 new vehicles and 15 new pieces of equipment. Several additional units were put on order in 2015, but will not be delivered until 2016.

Budgeted Maintenance Expenditures included $500,000 for the construction of a new storage building at the Indiana Shops, which will include a PD weapons testing range. Construction will take place in 2016.

Buildings 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.

2015 Budget

2015 Actual

$2,368,000

$2,368,000

$ 446,814

$ 443,230

136,312

241,330

$ 583,126

$ 684,561

Replacement

$ 588,615

$

Capital Lease

120,918

115,988

$ 709,533

$ 154,317

Building Fund Beginning Fund Balance REVENUES Replacement Transfers Other Total Revenues EXPENDITURES

Total Expenditures Income/(Loss) Ending Fund Balance

(126,407) $2,241,593

23

38,328

530,244 $2,898,244

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

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. Several HVAC replacements scheduled for the past couple of years are being deferred to 2016 in order to exploit better pricing with economies of scale.

This represents the gap between the Replacement Budget and Actual.

Arvada Economic Development Association (AEDA) 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.

Operations

2015 Budget

Beginning Fund Balance

$475,577

$475,577

Revenue

790,879

700,242

Expenditures

784,897

691,062

$481,559

$484,757

Ending Fund Balance

2015 Actual

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 Expenditures in 2015 are lower than budget primarily due to reduced spending in professional services, training and meetings, and dues and subscriptions.

Program Beginning Cash Balance Revenue Expenditures Ending Cash Balance

12/31/2015 $ 579,836 791,171 (525,361) $ 845,646

Reserved for Job Creation Program

(18,000)

Reserved for New Entrepreneur Program

(19,500)

Arvada Manufacturing Initiative

(5,400)

Commitments

(445,155)

Available Unallocated Cash Balance

$ 357,591

Revenue Highlights Revenues in 2015 consist of a cash contribution from the City of Arvada for $500,000, interest income and repayments on two loans.

Expenditure Highlights Expenditures in 2015 reflect 31 AEDA small business grants and one loan. The grants are used to help Arvada businesses improve signage, landscaping, facades, and site improvements.

24

R. Assmus

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

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

R. Assmus

Investment Portfolio Overview The City’s investment portfolio in 2015 can be characterized by modest but steady improvement in the form of interest income. The portfolio saw a year-to-date fourth quarter yield of .78%, an increase of 13 bps when compared to 2014 annualized yield of .65%. This resulted in additional interest earnings of $307,246. Granted, the biggest improvement was in the last quarter of the year in anticipation and after the Federal Reserve raised its target rate from .25 to .50%. The most evident improvement was on the short-term side of the Treasury yield curve. In 2015 the City’s investments increased by $11 million to a total of $184 million. The performance of the City’s portfolio is regularly assessed against the established benchmark, which is calculated on a monthly basis as a weighted average yield of relative securities of the same or similar class and maturity as in our portfolio.

In 2015 the portfolio yielded 18 bps above the composite benchmark. During the year the City’s portfolio also received $112 million in investment calls, which accounts for about 60% of the total portfolio. Callable securities always present a greater reinvestment risk, particularly in falling interest rate environments, but they offer higher coupon rates. There is some uncertainty in the markets around the Federal Reserve hiking the rates a few more times in the coming year, especially given the fact that most other central banks are doing just the opposite. In spite of the current market volatility, we continue to follow the investment strategy and put safety of investments as our first priority. Key information regarding the City’s portfolio is shown in the following tables and graphs:

25

CITY OF ARVADA INVESTMENT REPORT

Investment Portfolio Objectives

PORTFOLIO PERFORMANCE YTD Interest Earnings Portfolio Yield Benchmark Yield Tracking Error

2015 $1,341,747 0.779% 0.600% +18bps

2014 $1,034,501 0.647% 0.450% +20bps

PORTFOLIO CHANGES 2015 2014 $114,762 $1,013,883 3,645,820 13,289,185 15,088,055 10,015,299 8,987,000 5,995,000 29,382,054 20,924,908 127,050,000 121,725,000 $184,267,691 $172,963,275

Money Market Savings/ Cash CD Corporate LGIP US Agency Total

Difference $307,246 0.132% 0.150% -2bps Difference $(899,121) (9,643,366) 5,072,756 2,992,000 8,457,146 5,325,000 $11,304,416

ACCOUNT SUMMARY Par Value $184,267,691 Book Value $184,274,585 Market Value $183,672,938 Unrealized Gain/(Loss) $ (594,753)

PORTFOLIO CHARACTERISTICS Average Duration (yrs) 2.19 Average Coupon 0.921% Average Cost YTM 1.090% Average Market YTM 1.230%

PORTFOLIO ALLOCATION

Portfolio Yield vs. Custom Benchmark 1.20% 1.00%

U.S. Agencies, 68.9%

0.80% 0.60%

CD, 8.2% Corporate, 4.9%

0.40% 0.20% 0.00%

Savings/cash 2.0%

LGIP, 15.9%

2011

2012

2013

Portfolio Yield

2014

2015

Money Market 0.1%

Benchmark

MATURITY DISTRIBUTION 25.0% 20.0%

18.7%

17.1%

19.1%

21.1%

12.6%

15.0%

11.4%

10.0% 5.0% 0.0%

0-.25

.5-1

1-2

2-3

Maturity (yrs)

26

3-4

4-5

City of Arvada Investments - 2015 The City’s portfolio as of December 31, 2015 is shown below, which includes credit ratings as of December 31, face value and actual interest earnings for 2015.

Description

CUSIP/Ticker

Credit Rating 12/31/2015

Coupon Rate

Maturity Date

Ending Face

Interest

Amount/Shares

Dividends

SAVINGS/CHECKING JPMorgan Chase Savings

CHASE

N/A

0.03%

N/A

$146,657

91

Wells Fargo Savings

WELLSFARGO

N/A

0.03%

N/A

$136,286

224

N/A

0.30%

N/A

$3,362,877

-

$3,645,820

315

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

5791396061

N/A

0.55%

06/25/2016

$5,032,040

20,809

Vectra Bank

5791396079

N/A

0.55%

06/25/2016

$5,032,040

20,809

Vectra Bank

5791396095

N/A

0.55%

07/07/2016

$1,008,702

3,702

Vectra Bank

5791396103

N/A

0.65%

08/29/2016

$1,003,818

3,818

Vectra Bank

5791396111

N/A

0.65%

08/29/2016

$1,003,818

3,818

Vectra Bank

5791396129

N/A

0.65%

08/29/2016

$1,003,818

3,818

Vectra Bank

5791396137

N/A

0.65%

08/29/2016

$1,003,818

3,818

$15,088,055

60,592

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

13,815

Microsoft Corp 2 11/3/2020

594918BG8

AAA

2.00%

11/03/2020

$2,992,000

-

$8,987,000

49,468

Sub Total Corporate LOCAL GOVERNMENT INVESTMENT POOL C Safe LGIP

CSAFE

AAAm

0.29%

N/A

$10,520,519

18,133

Colo Trust LGIP

COLOTRUST8001

AAAm

0.30%

N/A

$13,948,313

23,423

Colo Trust LGIP

COLOTRUST8004

AAAm

0.30%

N/A

$174,175

326

Colo Trust LGIP

COLOTRUST8008

AAAm

0.30%

N/A

$4,557,863

7,996

Colo Trust LGIP

COLOTRUST8010

AAAm

0.30%

N/A

$181,184

650

$29,382,054

50,528

$114,762

879

$114,762

879

12/23/2016

$5,000,000

32,500

Sub Total Local Government Investment Pool MONEY MARKET CSIP MM

CSIP

AAAm

0.24%

N/A

Sub Total Money Market US AGENCY FHLMC

3134G56W0

AAA

0.65%

FHLB

313380U88

AAA

0.80%

04/17/2017

$3,000,000

24,000

FHLB

313382TR4

AAA

0.60%

04/24/2017

$5,000,000

30,000

FHLMC

3134G6UC5

AAA

0.70%

04/28/2017

$4,000,000

14,000

Chart continues next page

27

Description

CUSIP/Ticker

Credit Rating 12/31/2015

Coupon Rate

Maturity Date

Ending Face

Interest

Amount/Shares

Dividends

FFCB

3133ECP40

AAA

0.64%

05/09/2017

$5,000,000

32,000

FHLMC

3134G7ET4

AAA

0.85%

06/23/2017

$3,000,000

12,254

FHLB

313382W25

AAA

0.75%

08/15/2017

$5,000,000

37,500

FHLMC

3134G5A21

AAA

1.15%

12/26/2017

$5,000,000

57,500

FHLB

3130A5UN7

AAA

1.00%

01/29/2018

$5,000,000

-

FFCB

3133EEP46

AAA

1.09%

02/26/2018

$6,000,000

16,350

FHLMC

3134G6L76

AAA

1.25%

05/25/2018

$5,000,000

30,556

FHLB

3130A5UU1

AAA

1.05%

05/30/2018

$3,000,000

12,950

FHLMC

3134G7MU2

AAA

1.00%

08/17/2018

$4,000,000

10,000

FHLMC

3134G7A27

AAA

0.75%

10/15/2018

$3,000,000

-

FNMA

3136G2R58

AAA

1.04%

10/26/2018

$1,250,000

-

FHLMC

3134G73D1

AAA

0.50%

10/29/2018

$4,000,000

-

FHLMC

3134G8BZ1

AAA

0.75%

12/17/2018

$4,000,000

-

FFCB

3133EFBP1

AAA

1.41%

03/01/2019

$5,000,000

-

FNMA

3136G2QM2

AAA

1.20%

05/16/2019

$4,300,000

-

FHLB

3130A6UH8

AAA

1.55%

06/28/2019

$4,000,000

-

FFCB

3133EE6U9

AAA

1.73%

08/12/2019

$3,000,000

-

FFCB

3133EFEL7

AAA

1.60%

09/23/2019

$5,000,000

-

FFCB

3133EFKY2

AAA

1.36%

10/28/2019

$5,000,000

-

FHLB

3130A3EG5

AAA

1.25%

11/20/2019

$5,000,000

62,500

FNMA

3136G2SU2

AAA

1.50%

11/25/2019

$5,000,000

-

FNMA

3136G2RB5

AAA

1.43%

12/27/2019

$2,500,000

-

FFCB

3133EE2S8

AAA

1.98%

06/29/2020

$3,000,000

29,700

FHLMC

3134G7XN6

AAA

1.25%

09/30/2020

$5,000,000

-

FHLMC

3134G73S8

AAA

1.00%

10/29/2020

$5,000,000

-

FHLMC

3134G7S77

AAA

1.13%

10/29/2020

$5,000,000

-

Subtotal US Agency

$127,050,000

401,810

Total

$184,267,691

$563,591

Investment Management Focus - 2016 In December the Federal Reserve raised short-term interest rates by .25% for the first time in seven years. The anticipated four additional rate hikes in 2016 seem very unlikely given the weak economic data, strong dollar, and downside risk in the global economy. Even though the U.S. economy is doing better than emerging markets and euro zone, the futures market foresees an increased possibility of a recession. The flattening of the Treasury yield curve reflects this expectation.

The focus will continue to be on the diversification of maturities. We will keep a portion of our portfolio in LGIP, money markets, and cash balances at levels to meet operating needs and capture attractive interest rates. We will continue to use 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 strategy will allow ample cash should the City experience unexpected needs and allow us to take advantage of better coupons in longer maturity buckets.

Agency spreads are still tight, callables will get better yield: Call provisions are a tool used by issuers to refinance debt at a more attractive rate. The 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 48bps.

28

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