City of Arvada 1st Quarter 2018 Financial Report

Financial report First Quarter 2018

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 Vesta Weinhauer, Accounting Supervisor Arlene Martinez, Executive Assistant

Table of Contents

Table of Contents Overview............................................................................................................................... 2-3 General Fund........................................................................................................................ 4-7 Street Maintenance Fund...................................................................................................... 8-9 Parks Fund....................................................................................................................... 10-11 Special Revenue Funds Tax Increment Funds..................................................................................................... 12-13 Community Development................................................................................................... 14 Arvada Housing Authority................................................................................................... 15 Capital Improvements Projects Fund................................................................................. 16-17 Enterprise Funds Water Fund........................................................................................................................ 18 Wastewater Fund............................................................................................................... 19 Stormwater Fund............................................................................................................... 20 Golf Fund........................................................................................................................... 21 Food Service Fund (Arvada Events)................................................................................ 22-23 Internal Service Funds Insurance Fund.................................................................................................................. 24 Computer Fund.................................................................................................................. 25 Vehicle Fund...................................................................................................................... 26 Print Services Fund............................................................................................................ 27 Buildings Fund................................................................................................................... 27 Arvada Economic Development Association (AEDA)...........................................................28-29 City of Arvada Investment Report...................................................................................... 30-31

1

OVERVIEW

2018 First Quarter Financial Report 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.

The US economy grew at an annualized rate of 2.3% in the first quarter of 2018. The stock market performed much like a roller coaster, with violent swings up and down depending on the news of the day. The revamped tax code and better than expected corporate earnings rocketed markets upward but tariffs and threats of trade wars sent the market back down. Economists continue to warn that the economy’s upward path is unlikely to continue beyond next year.

Growing national debt and the Federal Reserve’s plan to continue to raise interest rates put fear in future expansion models. Even with this cautious long-term outlook, short-term projections appear to be right on track with growth at around 3%.

In March, the Federal Reserve voted to raise short-term interest rates 25 basis points to a range of 1.50% to 1.75%. This was the first of three projected raises in 2018, with a rumored fourth raise possible. Federal Reserve officials stated “The economic outlook has strengthened in recent months,” and that “Americans should expect even faster growth and lower unemployment ahead.” Unemployment is now expected to fall to 3.8 percent in 2018, the lowest level since 1969.

Colorado continues its rapid expansion, rated the number 1 economy in the United States for 2017 and continuing right where it left off in 2018. Unemployment sits at 2.9% and wage growth outpaced inflation for the first quarter. The biggest barrier to future economic expansion is the labor force.

Locally, the slow but steady growth pattern continues. Sales tax remains strong, up 5.81% for the quarter, led by fast-casual restaurants, clothing stores and grocery chain stores. The rebound in grocery chain stores was a nice trend as this category was underperforming in 2017. It should be pointed out that these results are only for two months.

Auto Use tax, up 7.8%, and Property tax, up 15.5%, are outpacing expectations. Auto sales nationally are on the decline but locally are staying strong.

Property tax continues to grow with the increased building activity and skyrocketing home values.

The Street Maintenance fund begins its second year in existence with an ambitious list of projects that includes mill, overlay, patch, full reconstruction and concrete work. A listing of the streets that are scheduled to have some form of work done is included later in this report. Work has already begun, as the construction season is short in duration.

The average rent for a 2-bedroom unit in Arvada has grown to $1,381 per month, up 7.2% over 2017. A 3-bedroom unit runs $1,691, up 3.2% over 2017. Due to these increases, and no additional federal funding, the number of families the Arvada Housing Authority is able to help is down to 416. This is 57 less than in 2017, and 92 less than allowed.

The transition of the police dispatch to the new Jefferson County Communications Center Authority (Jeffcom 911) was completed in March, and included seven other local entities. This project was many years in the making and should offer efficiencies and enhanced communication across the agencies.

Three capital improvement projects are highlighted this month – Public Restrooms in Olde Town, Traffic Signals and Guardrails. Please take the opportunity to read about some of the new and exciting projects the City has in the works.

Overall, how satisfied are you with the government services provided by the City of Arvada?

CITIZEN SURVEY

2

OVERVIEW

The IT Department, working in conjunction with the City Manager’s Office and Public Works Department, set a strategic result of getting every City facility, along with City traffic lights, “connected” through high-speed fiber. Using existing City-owned conduit, leasing private conduit and colocating conduit as development occurs, this result is close to being achieved. The map below shows the current progress.

Esri, HERE, Garmin, © OpenStreetMap contributors, and the GIS user community

ARVADA CONDUIT

I

0

2,050 4,100

8,200 Feet

L E G E N D

DATE: 05/03/2018

All City/Leased/Partner Conduit Arvada Missing Links/Gaps Proposed Co-Locate

The maps provided are graphical representations intended for general informational purposes only, and may not reflect the most current information or conditions. THE CITY OF ARVADA MAKES NO WARRANTY OF MECHANTABILITY OR WARRANTY FOR FITNESS OF USE FOR A PARTICULAR PURPOSE, EXPRESSED OR IMPLIED, WITH RESPECT TO THESE GRAPHICAL REPRESENTATIONS OR THE UNDERLYING DATA. Any users of these graphical representations or map products accepts same AS IS, WITH ALL FAULTS, and assumes all responsibility for the use thereof, and further covenants to hold the City harmless from and against all damage, loss, or liability arising from the use of this map product, in consideration of the City's having made this information available.

The City operates five internal service funds – Insurance (Rick Management), Computer, Print Shop, Vehicles and Buildings. These funds allocate charges to internal programs and departments for the purchase of insurance and for the replacement and maintenance of identified items. The budget for 2018 calls for the complete replacement of the City’s desktop and laptop computers, continued repair work related to the May 2017 hail storm and more than double the normal replacement of vehicles.

The City will begin work on the 2019-2020 budget process this summer. Many challenges lie ahead, including the funding gap in streets, additional service needs in police and parks, homelessness, transportation capacity and mobility. City Council will consider the possibility of placing a bond issue on the ballot this November. The bond issue would be a reauthorization (no new taxes) of current sales and use tax debt that will pay off this December. If City Council does decide to move forward with the ballot, projects will need to be identified and agreed upon later this summer.

Finally, The City of Arvada has been awarded a 2018 Top Workplaces honor by the Denver Post. It is the only local government organization awarded in the “large company” category. Arvada was also named a Denver Post Top Workplace in 2012 and 2015.

2018

R. Assmus

3

GENERAL FUND

General Fund Overview The General Fund pays for the City’s basic services. This includes police, planning, transportation planning, street light maintenance and costs, building activity and general administration. In addition, the General Fund also provides for the following: • Operational support to the Parks Fund and Arvada Economic Development Association • General Debt Service payments • Transfer to the Capital Improvements Fund for new parks, transportation and other infrastructure projects • Grant support to the Arvada Center The following table provides a comparison of budgeted cash balances, revenues and expenditures to budget, including prior year amounts in the same areas.

General Fund Beginning Fund Balance

• The

2018 Budget

As of 03/31/18

As of 03/31/17

$44,405,000

$44,405,000

$88,541,067

$18,385,155

$17,155,569

$80,920,502

$15,422,587

$15,720,853

5,002,609

-

-

REVENUES Total Revenues EXPENDITURES Ongoing Capital JPPHA (Jefferson Parkway Public Highway Authority) Total Expenditures Income/(Loss) Ending Fund Balance

400,000

-

-

$86,323,111

$15,422,587

$15,720,853

2,217,956

2,962,568

1,434,716

$46,622,956

$47,367,568

2018 beginning fund balance was $44,405,000.

• $8,694,692 of the fund balance is dedicated to projects not completed in 2017 and one-time items.

• The 2018-2026 financial plan requires $10,982,503 of the fund balance.

General Fund Ending Fund Balance by Quarter Compared to Fund Balance Goal of 17% of Budgeted Expenditures 60% 50% 40% 30% 20% 10% 0%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2015 2015 2015 2015 2016 2016 2016 2016 2017 2017 2017 2017 2018

4

GENERAL FUND Sales Tax 55.7%

Revenue Highlights

• Overall revenues are up $1,230,000 or 7.1% over 2017.

• Building use tax and building permits are at 45.7% of the budget for the year.

• In general remaining revenues are in line with budget for 2018.

• Major revenue categories of sales tax, use tax, property tax, building and intergovernmental revenues are discussed in more detail in the “Revenue Highlights” section.

2018 BUDGETED GENERAL FUND REVENUES

Property Tax 6.4%

Use Tax 1.8% Other 16.1% Interest .8%

Auto Use Tax 7.5% Building Use Tax & Court Fines & Fees Permits 2.1% 5.0%

Franchise Fees 4.6%

Sales Tax

Sales Tax Collections

• Sales tax collections lag one month; therefore, collections for the first quarter represent two months’ collections • Sales tax is up 5.8% for the first quarter • Most sales tax categories increased in the first quarter, with the largest categories being fast-casual restaurants and clothing stores. Grocery stores also increased, but this is primarily because of the new Sprouts • Public utilities, retail hardware, auto care and office supplies/ equipment categories are all down in the first quarter

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

03/31/2014 $6,279,068

Sales Tax

Use Tax Building Use Tax • Building use tax decreased 25.5% for the first quarter reflecting the general slowing of building permits • Budget is $2,430,360 and is based on an historical average number of permits; therefore, building use tax is likely to exceed the budget even though growth is slowing Auto Use Tax • Auto use tax increased 7.8% in the first quarter • Nationally auto sales are slowing; however, this trend has not yet affected the City General Use Tax • General use tax is up 43.6% in the first quarter • General use tax can fluctuate; therefore, it is unlikely that this increase will continue for the rest of the year

03/31/2015 $6,722,639

03/31/2016 $6,947,247

03/31/2017 $7,222,053

03/31/2018 $7,641,687

Use Tax Collections $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $-

03/31/2014 $164,311

General

03/31/2015 $240,906

03/31/2016 $204,498

03/31/2017 $178,734

03/31/2018 $256,726

Auto

$868,221

$971,504

$482,717

$1,215,351

$1,309,753

Building

$667,925

$1,015,778

$1,608,219

$1,802,747

$1,343,554

5

GENERAL FUND

Property Tax

Property Tax Collections

• The City’s property tax rate is 4.31 mills per $1,000 of valuation • The mill is placed on the assessed valuation • Property tax is up 15.5% due to the increase in assessed valuation and new growth

$2,500,000

$2,000,000

$1,500,000

$1,000,000

$500,000

$-

03/31/2014 $1,608,708

Property Tax

Intergovernmental Revenues

03/31/2015 $1,610,624

03/31/2016 $2,044,002

03/31/2017 $2,148,442

03/31/2018 $2,481,791

Intergovernmental Revenues

• Highway Users Tax Fund (HUTF), the City’s share of state-

$700,000

collected gas tax revenue, is up .3% for the first quarter • Road and Bridge funds, the City’s share of property tax collected by Jefferson County & Adams County and dedicated to the maintenance of roads and bridges, is disbursed several months after it is collected, so January revenues will not be received until April

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

03/31/2014 $-

03/31/2015 $-

03/31/2016 $-

03/31/2017 $-

03/31/2018 $-

$621,173

$438,760

$630,298

$669,322

$671,071

85% of businesses are voluntarily compliant with City tax codes

6

GENERAL FUND

Miscellaneous 0.7%

Transfers 22.4%

Expenditure Highlights

Personnel, 48.9%

• Overall expenditures are down $298,000 or 1.9%, when compared to 2017.

• All major expenditure categories are in line with the 2018 budget.

• Other expenditures are in line with budget for 2018.

Debt Service 4.5%

2018 BUDGETED GENERAL FUND EXPENDITURES

Contracts 3.8%

Supplies and Expenses, 6.2% Services and Charges, 13.5%

Salary and Benefit Salary & Benefits

2018 Budget

As of 03/31/18

As of 03/31/17

Salaries & Wages

$33,019,385

$6,426,383

$6,378,230

-

-

1,009,661

264,031

212,369

Group Insurance

6,633,126

1,182,288

1,167,720

Retirement

3,581,623

717,069

716,047

Medicare

446,518

87,809

84,209

Temporary Wages & Social Security

524,904

128,377

81,085

Other

432,996

109,234

106,343

$44,163,831

$8,915,191

$8,746,002

Vacancy Savings Overtime

Total

(1,484,382)

• Notable increases in Expenditures in the Municipal Court, City Attorney’s Office, and Police Dispatch represent the bulk of the sizable increase in Temporary Wages & Social Security costs through the first three months of the year.

• Nearly all of the increase in Overtime took place in Police.

• The impact of the City’s transition of dispatch services to JeffCom will begin to reflect in second quarter figures.

75% of Citizens’ Survey respondents report they receive good value for their tax dollar

7

STREET MAINTENANCE FUND Street Maintenance Fund Overview The Street Maintenance Fund accounts for costs associated with street repair and replacement including crack sealing, chip sealing, seal coating, milling and overlay and reconstruction. Revenues are derived from the City’s General Fund and the Highway Users Tax Fund which is the City’s share of state-collected gas tax revenue. The vast majority of the street construction season is after March 31st, which is reflected in the very low level of expenditures in the first quarter.

Crack Sealing 0.00%

Other 5.01%

Street Maintenance Fund

2018 Budget

Beginning Fund Balance

As of 03/31/18

$2,581,000

As of 03/31/17

$2,581,000

REVENUES General Fund Transfer

$9,525,656

Other

$

-

Total Revenues

-

$

-

$9,525,656

$

-

-

$

$6,163,599

$44,906

$

2,988,412

261,133

-

Crack Sealing

280,164

-

-

Other

103,201

16,148

-

$9,535,375

$322,187

(9,719)

(322,187)

$2,571,281

$2,258,813

Asphalt Replacement Concrete Replacement

2018 ACTUAL EXPENDITURES

Total Expenditures Income/(Loss)

Concrete Replacement 81.05%

Ending Fund Balance

$

MillAND & Overlay MILL OVERLAYProjects PROJECTS To Street Club Crest Dr. W 56th Ave. Grandview Ave. W 57th Ave.

Carr St. Devinney Ct. Everette St. Gardenia Ct. Howell St Independence St. Newcombe St. Oak St. Otis Dr. Pomona Dr.

W 57th Ave. W 72nd Dr. W 81st Ln. W 68th Pl. W 69th Ave. Brooks Dr. W 84th Ave. W 80th Ave. Chase Dr. Wadsworth Bypass

Rensselaer Dr. W 52nd Ave.

W 52nd Ave. W 74th Dr. W 81st Pl. W 69th Dr. W 68th Pl. W 66th Ave. W 86th Pkwy.

W 76th Dr. Lamar Dr. Harlan St./Dead End W 64th Ave. Independence St. Wadsworth Bypass Marshall St.

Awaiting Start

W 58th Ave. W 62nd Ave. W 68th Ave. W 68th Pl. W 69th Ave. W 69th Dr. W 72nd Dr. W 74th Dr. W 81st Dr. W 84th Ave.

From To Wadsworth Bypass Marshall St. Old Wadsworth Independence St. Blvd.

Independence St. Garrison St. Independence St. Garrison St. Quail St. Oak St. Howell St. Gardenia Ct Indiana St. Howell St. Gardenia Ct. Cul de Sac Beech St. Devinney Ct. Devinney Ct. Alkire St. Pomona Dr. Everett St. Simms St. Newcombe St.

W 85th Ave.

Otis Dr.

In Progress

8

Complete

-

-

* This fund was established effective 2017

From Everett St. W 58th Ave.

-

EXPENDITURES

Asphalt Replacement 13.94%

Street 81st Ln. Balsam St.

-

Lamar Dr.

STREET MAINTENANCE FUND Concrete Projects CONCRETEReplacement REPLACEMENT PROJECTS Street 68th Pl 69th Ave Howell St 69th Dr Kendrick Dr

From Howell St Indiana St 69th Ave Cul de sac 64th Ave

To 69th Dr Howell St 68th Pl

67th Ave Westwood Cir Pike St Yank Wy 70th Ave 72nd Ave 86th Pkwy 82nd Ave

Kendrick Dr Quaker St (east loop) 64th Ave 64th Ave Orion St Indiana St Indiana St Simms St

McIntyre St Quaker St (west loop) Westwood Cir Deframe St Nile St Ward Rd Alkire St 100-ft W of Ward Rd

80th Ave Carr St

Simms St 64th Ave

Kipling St 72nd Ave

Street Allison St. Balsam St. Brooks Dr Carr St. Columbine Dr. Easley Rd. Grandview Ave. Lamar St. Newland St

From Grandview Ave. Dead End Garrison St. W 64th Ave. W 54th Pl. W 60th Ave. Yarrow St. W 66th Ave. W 54th Pl.

Crack Seal PROJECTS Projects CRACK SEAL To Street W 52nd Ave. Umber St. Ralston Rd. Van Voorhis Way Carr St. Vance St. Ralston Rd. Violet Way Otis St. Virgil Way W 64th Ave. W 52nd Ave. Lamar St. W 53rd Ave. W 72nd Ave. W 53rd Pl. W 54th Ave. W 54th Ave.

Nolan St. Olde Wadsworth Blvd.

Otis St. Pierce St. Quay Ct.

W 55th Ave. W 65th Ave.

Quay St. Ralston Rd. Reed Ct. Reed St. Robinson Way

W 55th Ave. Wadsworth Bypass W 55th Ave. W 55th Ave. Allison St.

Russell Ct. Salvia St. Secrest Ct. Terry Cir.

67th Ave

Street Johnson Wy Ralston Rd Kipling Pkwy Oberon Rd Vacher-Sullivan Subdivision Dudley Ct Sharon Ln

From Brooks Dr Miller St Allendale Dr Garrison St

To Brooks Dr 58th Ave 58th Ave Carr St

Grandview Ave Field St

Ridge Rd Everett St

Garland St Holland St Hoyt St 53rd Ave Saulsbury Ct Teller Ct

53rd Ave 53rd Ave 53rd Ave Field St Pomona Dr. Pomona Dr.

53rd Pl 53rd Pl 53rd Pl Dead End Dead End Dead End

67th Ave

Everett St

to New Overlay

From W 72nd Ave. Robinson Way Ralston Rd. Virgil Way W 64th Ave. Wadsworth Bypass Pierce St. Saulsbury Ct. Allison St.

To W 70th Ave. W 59th Ave. W 60th Ave. Virgil Way W 72nd Ave. Independence St. Marshall St. Pierce St Olde Wadsworth Blvd.

Newland St. Olde Wadsworth Blvd.

Carr St. Secrest Dr. Olde Wadsworth Blvd.

Quaker St. Violet Way Violet Way Cul De Sac Torrey St.

W 53rd Ave. Wads Bypass Wadsworth Bypass W 54th Pl. W 54th Pl. W 52nd Pl.

W 54th Pl. W 55th Ave.

Pierce St. Allison St.

W 59th Ave. W 60th Ave. W 62nd Ave.

Cul De Sac Vance St. Carr St.

W 64th Ave. W 67th Ave. W 67th Pl W 69th Ave. W 70th Ave.

Indiana St. Cul De Sac Cul De Sac Virgil Way Cul De Sac

Cul De Sac W 72nd Ave. W 71st Pl. W 71st Pl.

W 54th Ave. Sheridan Blvd.

W 54th Ave. W 54th Ave. Olde Wadsworth Blvd.

Cul De Sac W 69th Cir. W 71st Ave. Cul De Sac

W 71st Ave. W 71st Pl. W 72nd Ave W 86th Pkwy

Cul De Sac Torrey St. Virgil Way Alkire St

Terry Ct. Torrey St.

W 71st Pl. Cul De Sac

Cul De Sac W 70th Ave.

Webster St. Yarrow St.

Ralston Rd. W 52nd Ave.

Ulysses St.

W 72nd Ave.

W 70th Ave.

Wyndham Park Subdivision

Umber Ct.

W 72nd Ave.

W 70th Ave.

W 55th Ave. W 54th Ave. W 53rd Pl.

9

Russell Ct. Secrest Ct. Quaker St. Westminster City Line Grandview Ave. South End Costco Gas Station

PARKS FUND 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

• Open Space increased $20,964 or 6.6% over 2017 first quarter.

• All other revenue categories performed as expected.

2018 Budget

As of 03/31/18

$5,291,000

$5,291,000

$4,409,252

$ 338,294

$ 317,330

City Cash Transfer

3,371,741

832,935

820,819

APEX Reimbursement

1,074,647

-

1,043,347

188,244

106,777

$9,043,884

$1,278,006

$1,234,830

$9,239,456

$1,587,765

$1,627,485

-

-

-

$9,239,456

$1,587,765

$1,627,485

Parks Fund Beginning Fund Balance REVENUES Open Space

Other

Expenditure Highlights

• Personnel costs related to salaries, overtime, oncall pay and temporary wages have increased $63,275 or 8.9% over first quarter 2017.

As of 03/31/17

Total Revenues

(946,667)

EXPENDITURES Ongoing Capital Total Expenditures Income/(Loss)

(195,572)

Ending Fund Balance

Parks Playground Inspections and Repairs Provided

10

$5,095,428

(309,759) $4,981,241

(392,656)

PARKS FUND

Arvada Parks has partnered with Apex Park and Recreation District on a number of projects at Long Lake Regional Park, Stenger Sports Complex and Lutz Sports Complex.

Long Lake Regional Park improvements include a new synthetic turf field for year-round use, two new lighted baseball fields and a new concession/bathroom facility. Arvada Parks Staff serves on the project coordination team, Arvada Events Staff will manage concessions.

Stenger Sports Complex improvements include a new irrigation system and parking lot improvements completed in conjunction with the Timberline Farms Development. This is the first season of use for the new irrigation system. The new parking lot improvements include landscaping and stormwater detention.

Lutz Sports Complex improvements include a new four-field baseball complex, a new bathroom/concession facility and expanded parking. Arvada Parks Staff serves on the project coordination team and is coordinating the replacement of the irrigation pump and lining of the irrigation pond.

Parks. Parks & Athletic fields published maintenance standards met between April and October (growing season) and between November and March (dormant season).

11

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

Tax Increment Funds Beginning Fund Balance

Revenue Highlights

• Combined Sales Taxes, Audit Revenues and Use Taxes are 16.2% of the 2018 budget.

• Sales and Use Tax increased $181,902 or 11.3% over the first quarter 2017. for personnel and overtime have increased $65,854 over 2017

• Reimbursements

2018 Budget

As of 03/31/18

As of 03/31/17

$12,898,000

$12,898,000

$ 8,362,645

$ 1,352,937

$ 1,127,617

1,700,547

446,914

490,333

864,806

176,382

110,529

$10,927,998

$ 1,976,234

$ 1,728,478

$10,151,381

$ 2,194,198

$ 1,902,778

-

-

-

$10,151,381

$ 2,194,198

$ 1,902,778

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

776,617 $13,674,617

(217,965)

(174,300)

$12,680,035

By 2018, 85% Cases referred will be assigned to an investigator

12

Expenditure Highlights

• Total

personnel expenditures have increased $138,297 or 9.1% over 2017 related costs, caused by increased staffing.

• Six recruits enlisted in the January 2018 Academy are expected to graduate in June 2018.

• Ten recruits are currently in in-house training programs. (Eight recruits are from the 2017 Academy and two are lateral Police Officer hires.) All ten are expected to complete training in April 2018.

• There are currently seven vacant Police Officer positions and one vacant Police Services Technician position. With the completion of the JeffComm transfer at the end of March, there should be more defined numbers in the second quarter of 2018. This transfer impacted seven positions in the TI Funds.

SPECIAL REVENUE FUNDS

In association with the 2017-2018 biennial budget and 20172026 10-year Financial Plan, develop a cost-effective plan to provide City services into the northwest area including development and staffing of a new Police Community Station and satellite facilities deemed necessary for other City services.

Development of Delta day and hour schedule for officers and sergeants Have supervisory staff in place for Delta Sector Identification of location and ground breaking for Delta Community Station Develop a consistent police response for the community in Delta Sector

Delta Community Station Task Timeline

Dec17

Jan18

Feb- Mar18 18

Apr- May- Jun18 18 18

Planning Approval Post Sign Planning Commission - PDP Council Approval - PDP FDP Submittal - 12 Weeks - 1 Review Design Documents 100% CD's Building Dept Permit Review/Approval Fire Dept Permit Review/Approval Bid Solicitation - CMGC RFP issued Bidding Period/Bids Due Evaluation/Selection AIA 133 Agreement - Legal/CMO VE Phase (if required) AIA 201 Exhibit Final GMP - Legal City Council Title Due City Council Packet Due City Council Meeting Approval Construction Issue NTP Building Permit Issued (est.)

Fire Permit Issued (est.)

Construction Start/Completion

Jul18

Aug- Sep18 18

Oct18

Nov- Dec18 18

Jan19

Feb- Mar19 19

Apr- May- Jun19 19 19

The City's focus on strategic planning dictates the need to develop a cost-effective plan for providing services in an area of Arvada that continues to grow in population and businesses. While public safety is a critical aspect of this strategic measure, the City must also consider all other services required.

The City must be prepared to provide services required by new residents and businesses in the northwest area.

Current resources are not adequate for the projected development and resources need to be implemented to align with growth.

13

SPECIAL REVENUE FUNDS

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

2018 Budget

As of 03/31/18

Beginning Fund Balance

$5,753,000

$5,753,000

As of 03/31/17

REVENUES Recovered Grants

$ 114,737

$

25,620

$

25,628

668,004

17,443

13,072

City Cash Transfer

45,000

11,250

11,250

Interest/Other

34,000

21,644

12,169

Total Revenues

$ 861,741

$

75,957

$

62,119

$ 633,376

$

92,615

$

63,942

EXPENDITURES Ongoing Essential Home Repairs Loans Total Expenditures Income/(Loss) Ending Fund Balance

428,397

41,203

85,790

-

-

-

$1,061,773

$ 133,818

$ 149,732

(200,032) $5,552,968

(57,861)

Revenue Highlights

• Overall revenues increased $13,838 or 22.2% over 2017.

• Interest income is the majority of this increase, and is due to a more favorable investment environment.

Expenditure Highlights

• Essential home repairs decreased approximately $44,500 from 2017.

• Four essential home repair projects were completed during the first quarter of 2018 compared to five projects in 2017.

(87,613)

$5,695,139

The wait list for essential home repairs was at 160 as of March 31, 2018.

Number of Single-family rehab affordable housing grants loans and loan subsidies provided

14

SPECIAL REVENUE FUNDS

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

• Overall revenues decreased approximately $25,000

Arvada Housing Authority

or 2.3% compared to 2017.

• The decrease is in grant revenue received and is due to an adjustment calculated by the U.S. Department of Housing of Urban Development for administrative expenses.

Beginning Fund Balance

Expenditure Highlights

• Overall

expenditures decreased $58,000 or 5.5% from 2017.

• The Arvada Housing Authority served 416 families during the first quarter 2018 which is 57 less than the amount served during the first quarter 2017.

• The Authority is allowed to assist up to 508 families.

2018 Budget

As of 03/31/18

$

74,000

$

74,000

$

19,178

$

8,073

As of 03/31/17

REVENUES Recovered Grants Transfers

$

6,265

3,928,072

1,045,803

1,069,910

90,041

-

-

Interest/Other

1,000

510

285

Total Revenues

$4,038,291

$1,054,386

$1,076,460

$ 422,838

$ 111,293

$

3,592,317

875,836

975,430

34,238

9,737

7,903

$4,049,393

$ 996,866

$1,055,365

57,520

21,095

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

(11,102) $

62,898

$ 131,520

Number of Families receiving section 8 housing assistance payments on a monthly average

15

72,032

CAPITAL IMPROVEMENTS PROJECTS FUND

Capital Improvement Projects (CIP) Fund Overview The Capital Improvement Projects Fund accounts for capital projects for streets, traffic, and parks.

Capital Improvement Fund Beginning Fund Balance

2018 Budget

As of 03/31/18

As of 03/31/17

$18,627,000

$18,627,000

Revenue Highlights

• Transfers consist of transfer from the Community

REVENUES Transfers

Development Block Grant Fund $ 5,202,156

$

28,556

$ 1,621,373

• Grants and recovered Costs are reimbursements from other agencies or companies that have shared in the cost of a project • Contributions reflect transportation tax and park development fees that help fund eligible projects

Grants and Recovered Costs

-

45,673

430,331

Contributions

-

29,538

-

Interest

-

96,471

59,105

Total Revenues

$ 5,202,156

$

200,238

$ 2,110,809

CIP Administration

$ 1,903,045

$

199,258

$ 1,212,492

CIP Street Projects

112,550

262,957

136,109

• Administration expenditures are related to the

CIP Traffic Projects

13,691,510

190,124

103,325

1,033,800

44,127

532,878

-

-

-

696,466

$ 1,984,804

(496,228)

126,005

construction of the radio tower and the Olde Town restrooms • Streets expenditures are related to the guardrail project and Leyden Road improvements • Traffic expenditures are related to the traffic signal project • Park expenditures are for landscape design services for the Holistic Health and Fitness Park and the Club Crest Trail bridge project

EXPENDITURES

CIP Park Projects CIP Arvada Center Projects Total Expenditures

$16,740,905

Income/(Loss)

(11,538,749)

Ending Fund Balance

$ 7,088,251

$

$18,130,772

Expenditure Highlights

By 2018, new public restrooms in Olde Town will be available to accommodate G Line commuters and increasing Olde Town visitation.

Calls for service information Determine maintenance vendors Develop public meeting format(s) Develop specifications Engineering project request Host public meetings Review zoning RTD discussions and utility locates Review vendor responses Vendor contract(s) Construction

16

CAPITAL IMPROVEMENTS PROJECTS FUND Project Updates Public Restrooms in Olde Town: Over the past several years, the City has invested over $30 million in infrastructure projects around the Olde Town station which is in the heart of Olde Town Arvada and future stop for the G Line. The popularity of Olde Town has grown with two new multi-family developments and numerous retail, eating and drinking establishments. In April 2017, City Council adopted the strategic result “By 2018, new public restrooms in Olde Town will be available to accommodate G Line commuters and increasing Olde Town visitation.” A restroom will provide a much-needed facility in an area with significant visitation on an ongoing basis. In addition, the G Line is proposed to generate 3,000 boardings per day, creating more activity in the public space around the platform as well as foot traffic around Olde Town. It is anticipated that the restrooms will be available around July 2018.

Traffic Signals: While there has been much focus on the Olde Town G Line Station, there are two other transit stations in Arvada. This project will focus on a second rail stop in Arvada which will provide easier access to the Arvada Ridge G Line station. This station is also within walking distance to the Arvada Ridge multi-family development, Red Rocks Community College as well as the Van Bibber Creek Trail and the upcoming Arvada Holistic Health and Fitness Park. The traffic signals will be located at the intersection of Kipling Parkway and West 55th Avenue and West 55th Avenue and Lee Street. The lights should be operational by May 2018.

Guardrails: While new infrastructure in the City of Arvada is always exciting, it is also important that the City ensure the safety of its citizens. Guardrails are critical to the overall safety of the traveling public. The City spent approximately $133,000 to install new guardrail in five locations where potential hazards can be prevented and repair and/or replace existing guardrail at four defective or damaged locations. The locations are as follows: New guardrail • West 82nd Ave east of Highway 93 (north of roadway) • Alkire Street at West 82nd Avenue (curve north of railroad) • West 86th Parkway west of Kipling Street (Croke Canal Bridge) • Ward Road north of West 67th Avenue (east of roadway) • West 74th Avenue west of Carr Street (north of roadway) Repair/replace guardrail • Alkire Street at Church Ditch Crossing (north of West 81st Avenue) • W 80th Ave at Church Ditch Crossing (intersection of Newman Street) • West 74th Avenue at Church Ditch Crossing (east of Jellison Street) • West 74th Avenue at Church Ditch Crossing (Robby Ferrufino Park) This project was completed in the first quarter 2018.

17

ENTERPRISE FUNDS Water Fund 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.

2018 Budget

As of 03/31/18

$102,049,000

$102,049,000

$ 21,866,110

$ 2,723,687

$ 2 ,737,446

Tap Fees

13,316,182

1,244,884

2,472,701

Interest

508,100

264,224

177,384

1,182,424

391,927

411,205

$36,872,816

$ 4,624,722

$

$18,934,044

$ 3,484,118

$ 3,343,070

Debt Service

2,261,000

-

-

Major Capital Maintenance

4,185,559

560,067

208,573

Water Fund

Revenue Highlights

• Revenues

from Water Charges were down 0.5% through the first quarter of 2018, with consumption down 1.9%.

• Total Tap Fee sales were nearly half of what they were over the same period of 2017, though they showed signs of picking back up, accelerating in March and April of this year.

Beginning Fund Balance REVENUES Water Charges

Other Total Revenues

• Personnel

expenditures were up 2.9% versus the same period of 2017.

• The uptick in Major Capital Maintenance expenditures was due to the timing of payments on water main replacement contracts.

5,798,737

EXPENDITURES Ongoing

Expenditure Highlights

As of 03/31/17

Capital Total Expenditures Income/(Loss) Ending Fund Balance

3,991,633

258,377

41,975

$29,372,236

$ 4,302,562

$ 3,593,618

7,500,580

322,159

2,205,119

$109,549,580

$102,371,159

*$34,397,330 of the Fund Balance is a cash escrow reserved in Denver Water’s name and related to the Gross Reservoir expansion. The Water Fund’s overall obligation is expected to total $110 million through 2025.

By 2019, the City will have 100% of the water needed for build-out of the City as defined by the Comprehensive Plan Commit Resources to construct water storage Denver Water Gross Reservoir Expansion Obtain Clear Creek Water Rights

18

ENTERPRISE FUNDS

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

Wastewater Fund

2018 Budget

As of 03/31/18

As of 03/31/17

Revenue Highlights

$12,248,000

• Sewer Tap Fee revenue through the first three

$12,391,479

$ 2,638,437

$ 2,615,225

Tap Fees

1,012,314

157,102

291,939

Interest

314,682

28,851

28,135

months of the year was down to its lowest level since 2014, which reflects both the timing of tap purchases and the deceleration of residential building activity in the City.

1,047,128

305

150

$14,765,603

$ 2,824,695

$ 2,935,449

Beginning Fund Balance

$12,248,000

REVENUES Sewer Charges

Other Total Revenues

Expenditure Highlights

EXPENDITURES Metro District

$ 8,897,606

$ 1,957,562

$ 2,224,402

Ongoing

3,308,268

730,224

605,490

Major Capital Maintenance

2,208,141

254,844

32,485

Capital Total Expenditures Income/(Loss) Ending Fund Balance

2,884,000

136,455

-

$17,298,015

$ 3,079,086

$ 2,862,377

(2,532,412) $ 9,715,588

(254,391) $11,993,609

73,072

• Treatment charges from the Metro Wastewater Reclamation District were down 11.9% versus 2017, which was due to a lagging calculation of inflow estimates by Metro for Arvada’s sewer system.

• Timing on sewer main replacement contracts and work infilling the City’s sewer main system into Star Acres and Oberon Acres caused the increase in Major Capital Maintenance and Capital, respectively, through March.

2 or fewer imprecise underground infrastructure locates which results in damage to the

City’s water, sewer, and/or stormwater systems

19

ENTERPRISE FUNDS

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

Revenue Highlights

• The

City’s Stormwater Utility Fee was left unchanged for 2018. Increases in revenue are reflective of the housing growth.

Stormwater Fund

2018 Budget

Beginning Fund Balance

$7,532,000

$7,532,000

• The decrease in Ongoing expenditures was due to the timing of payments on miscellaneous drainage projects throughout the City.

As of 03/31/17

$3,370,427

$ 864,412

$ 842,369

71,927

29,028

21,697

$3,442,354

$893,440

$ 864,066

$2,205,881

$ 336,199

$ 438,241

867,769

216,942

214,903

REVENUES Stormwater Fee Other Total Revenues

Expenditure Highlights

As of 03/31/18

EXPENDITURES Ongoing Debt Service Capital Total Expenditures Income/(Loss)

721,000

-

-

$3,794,650

$ 553,141

$ 653,144

340,298

210,922

(352,296)

Ending Fund Balance

$ 7,179,704

$7,872,298

95% of stormwater urgent response events will have reporting staff on site within 90 minutes of being notified.

20

ENTERPRISE FUNDS

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.

2018 Budget

Golf Fund Beginning Fund Balance

$

As of 03/31/18

477,000

$

Revenue Highlights

As of 03/31/17

• Golf Course revenue decreased $333,960 or 63.1%

477,000

REVENUES Golf Courses

$3,740,016

Restaurants

1,836,468

119,713

228,007

-

1,010

-

Construction Revenue City Cash Transfer

$

243,560

Total Revenues

195,973

$

60,890

529,933

59,078

$5,820,044

$

377,586

$

817,018

Golf Courses

$2,438,936

$

283,697

$

340,766

Restaurants

1,661,852

220,267

275,446

Administration

1,671,352

242,800

208,482

-

728,738

2,500

Total Expenditures

$5,772,140

$ 1,475,501

Income/(Loss)

$

47,904

$(1,097,916)

524,904

$ (620,916)

EXPENDITURES

Capital

Ending Fund Balance

$

$

Golf Rounds by Type - January - March Player Support

1,792

3,936

(2,144)

(54%)

598

901

(303)

(34%)

Super Users Clubs

-

-

-

-

Tournament

-

-

-

-

43

24

2,433

4,861

2018

2017

Player Support

2,381

3,334

(953)

(29%)

Super Users Annuals

1,870

2,417

(547)

(23%)

Super Users Clubs

-

-

-

-

Tournament

-

-

-

-

48

51

(3)

4,299

5,802

(1,503)

Total Lake Arbor

Grow the Game Total

Variance

19

first quarter expenses, excluding capital project-related expenses, are 9.5% below expenditures for the same period in 2017.

• Restaurant expenses decreased $55,170 or 20.1% over the first quarter 2017.

standards relating to consistency playability texture appearance and uniformity during the growing season

(April-October) WW

79%

(2,428)

• Overall

tees meeting golf course performance

2018

Grow the Game

Expenditure Highlights

Golf Maint. WW. Golf fairways and

Westwoods Super Users Annuals

2017

827,194

from 2017 first quarter. This is due to playable days down 42.6% compared to the same time period in 2017.

• Restaurants decreased $108,294 or 47.5% over the same time period in 2017. The Lake Arbor Restaurant closed in early February for remodeling, with an anticipated opening date in the third quarter of 2018.

The West Woods Restaurant remained closed for most of the first quarter, opening on March 20, 2018.

(50%)

Variance

(6%) (26%)

21

ENTERPRISE FUNDS

Food Services Fund (Arvada Events) Overview The Food Services 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.

Food Services Fund (Arvada Events)

2018 Budget

As of 03/31/18

As of 03/31/17

Beginning Fund Balance

$ 637,000

$ 637,000

$

$

REVENUES Concession Services Banquet and Guest Services Total Revenues

27,463

163

$

705

1,599,449

269,034

258,358

$1,626,912

$ 269,197

$ 259,063

$ 380,008

$

$

EXPENDITURES Administration Operations Capital Total Expenditures Income/(Loss) Ending Fund Balance

86,393

1,218,848

215,383

18,034

-

$1,616,890

$ 301,775

10,022 $ 647,022

(32,578)

86,492 202,002 -

$ 288,493 (29,430)

$ 604,422

Revenue Highlights Hospitality. Sales. Revenue Targets Achieved.

• Concession Services saw a $543 decrease from 2017, while Banquet and Guest Services increased $10,677 or 4.1%.

• The 2018 booking pace is on track to meet yearend goals. In addition to sales, marketing and servicing of groups, the Arvada Events team participated in the preparation and opening of the new West Woods Golf Course Clubhouse.

Expenditure Highlights

• Administration expenses are in line with the same time period in 2017.

• Operations increased slightly in the first quarter 2018 by $13,381 or 6.6%.

22

ENTERPRISE FUNDS

Events by Market Segment January - March ARVADA CENTER

2018

Arvada Center

2017

Variance

-

3

(3)

(100%)

Association

15

14

1

7%

Corporate

18

14

4

29%

Education

4

2

2

100%

24

24

-

0%

3

-

3

0%

Fraternal Government In-house

9

8

1

13%

Religious

17

13

4

31%

Social

3

4

(1)

(25%)

Wedding/Anniversary

-

2

(2)

(100%)

93

84

9

11%

Total WEST WOODS

2018

2017

Variance

Association

1

-

1

0%

In-house City

3

2

1

50%

Social

2

1

1

100%

Total

6

3

3

100%

LAKE ARBOR

2018

2017

Variance

Golf Tournaments

1

-

1

0%

Total

1

-

1

0%

23

INTERNAL SERVICE FUNDS

Internal Service Funds Overview There are 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.

2018 Budget

Insurance Fund Beginning Fund Balance

Contributions Interest Other Total Revenues

$798,600 in insurance funds for hail damage to buildings and property related to the May 8, 2017 hail storm.

$1,093,000

$1,093,000

$2,101,505

$ 530,867

$ 527,093

65,700

48,698

41,713

-

838,231

24,036

$2,167,205

$1,417,796

$ 592,842

$1,834,682

$ 381,292

$ 484,540

500,163

84,820

105,758

$2,334,845

$ 466,112

$ 590,298

951,684

2,544

EXPENDITURES Risk Management Operations

• During the first quarter 2018 the City received

As of 03/31/17

REVENUES

Risk Management Administration

Revenue Highlights

As of 03/31/18

Total Expenditures Income/(Loss)

(167,640)

Ending Fund Balance

$ 925,360

$2,044,684

$

2,544

*Per GASB Statement 10, an additional $2,299,595 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 the Risk Management’s actuary for 2017.

Expenditure Highlights

• Overall

expenditures decreased $124,000 or 21.0% from first quarter 2017.

• First quarter 2018 has not experienced the level of liability claims paid that 2017 saw. Expenditures are expected to increase throughout the year as building and property damage is fixed.

Total at fault auto physical damage and auto liability claims excluding police department will be reduced by

10% in frequency and severity

24

INTERNAL SERVICE FUNDS

Computer 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 departments based on their levels of use of this technology.

Computer Fund

2018 Budget

As of 03/31/18

As of 03/31/17

Beginning Fund Balance

$7,144,000

$7,144,000

Maintenance

$1,195,180

$ 299,095

$ 299,033

Replacement

1,006,338

340,070

331,420

$2,201,518

$ 639,165

$ 630,453

Maintenance

$1,277,644

$ 424,133

$ 433,479

Replacement

886,408

48,835

103,323

$2,164,052

$ 472,967

$ 536,802

37,466

166,197

93,651

$7,181,466

$7,310,197

REVENUES

Total Revenues EXPENDITURES

Total Expenditures Income/(Loss) Ending Fund Balance

80% of Business Systems Which Are Up To Date on current supported versions

Revenue Highlights

• Revenue for both Replacement and Maintenance for 2018 is aligned and on track as expected.

Expenditure Highlights

• Replacement of desktop and laptop computers used across the City will be conducted throughout 2018.

• Maintenance of existing technology products used by the City has been initiated in the first quarter.

• Core networking gear replacement will be an expected large expenditure during both the second and third quarter.

25

INTERNAL SERVICE FUNDS

Vehicles Overview The Vehicles Fund provides resources for the maintenance and replacement of City vehicles and heavy equipment. It is funded with contributions by all City departments based on their vehicle inventory and use.

2018 Budget

As of 03/31/18

$4,047,000

$4,047,000

Maintenance Contributions

$2,391,896

$ 608,393

$ 580,088

Replacement Contributions

1,592,992

408,319

382,339

146,200

63,223

82,069

$4,131,088

$1,079,935

$1,044,496

$2,468,636

$ 557,219

$ 514,146

Vehicles Fund Beginning Fund Balance

As of 03/31/17

• Other Revenues include recovered costs from auctioning

REVENUES

Other Total Revenues EXPENDITURES Maintenance Replacement Total Expenditures Income/(Loss) Ending Fund Balance

1,404,215

608,940

30,994

$3,872,851

$1,166,159

$ 545,141

258,237 $4,305,237

(86,224)

Revenue Highlights retired vehicles and equipment.

Expenditure Highlights

• The

jump in Replacement Expenditures was due to the timing of when new vehicles and equipment were received.

Purchases are not reflected in expenditures until the City takes actual possession of the vehicle or equipment.

499,355

$3,960,776

By 2019, 60% of the City’s fleet will be capable of using alternative fuel sources

26

INTERNAL SERVICE FUNDS

Print Services Fund Overview The Print Services Fund provides ongoing operational support for the City’s printing needs.

Print Services Fund Beginning Fund Balance

2018 Budget

As of 03/31/18

As of 03/31/17

Revenue Highlights

$224,000

$224,000

$482,625

$ 56,529

$ 58,460

-

40,690

42,513

$482,625

$ 97,219

$100,973

• Print Shop and copier revenue is comparable to the

REVENUES Print Shop Copiers Total Revenues

prior year

Expenditure Highlights

EXPENDITURES Print Shop Copiers

$282,761

$ 49,864

$ 39,898

166,558

10,008

44,333

Equipment Total Expenditures Income/(Loss) Ending Fund Balance

-

-

23,034

$449,319

$ 59,872

$ 84,231

33,306

37,347

16,742

$257,306

$261,347

• Print

shop expenditures are higher in 2018 due to purchases of supplies and the payment of a maintenance agreement for the banner printer that was purchased in 2017 • Copier expenditures are lower in 2018 due to the timing of the lease payment (only two payments in 2018 compared to three in 2017) and an annual payment that has not yet been paid in 2018 • No equipment purchases are planned in 2018

Buildings Fund 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 departments based on their facility occupancy.

Building Fund Beginning Fund Balance

2018 Budget

As of 03/31/18

$3,133,000

$3,133,000

As of 03/31/17

• Replacement

REVENUES Replacement Transfers Other Total Revenues

Revenue Highlights

$ 529,446

$ 106,947

$ 103,831

36,000

12,330

9,725

$ 565,446

$ 119,276

$ 113,556

Transfers were increased by 3.0% across all contributing Funds for 2018.

Expenditure Highlights

EXPENDITURES Personnel

72,115

191

191

Replacement

$ 436,587

$

5,392

$

8,669

Total Expenditures

$ 508,702

$

5,582

$

8,860

Income/(Loss) Ending Fund Balance

56,744

113,694

$3,189,744

$3,246,694

104,696

27

• The

Personnel Expenditures represent a single FTE first budgeted for the Fund in 2015. These Expenditures reflect monthly contributions to Risk Management for Workers Compensation coverages for that FTE.

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. AEDA is funded by a transfer from the General Fund for services it renders to the City and its citizens. The City also provides administrative support for AEDA. A Board of Directors appointed by City Council governs AEDA.

2018

As of 03/31/18

As of 03/31/17

Operations

Budget

Beginning Fund Balance

$267,000

$267,000

Revenues

808,589

206,184

207,004

Expenditures

803,708

134,367

185,180

$271,881

$338,817

• Revenue consists of a transfer from the general fund equal to the operating expenditures, including personnel

Expenditure Highlights

• Expenditures in the first quarter are comparable to the prior year

By 2019, 1,000 new jobs from businesses will be created and located in urban centers and corridors 2500 2000 1500 1000

2019 Target

Ending Fund Balance

Revenue Highlights

500 0

Cumulative Jobs

28

ARVADA ECONOMIC DEVELOPMENT ASSOCIATION (AEDA)

Program

03/31/2018

Beginning Cash Balance Revenues

376

Revenue Highlights

• Revenues consist of interest revenue • No City contribution is planned for 2018

35,200

Expenditures Ending Cash Balance

570,094

Reserved for Economic Impact Fund Reserved for Arvada Manufacturing Initiative Reserved for Targeted and Professional Services Reserved for Exterior Improvement Grant Phase II

(290,000) (20,300) (5,902) (100,000) (73,121)

Commitments Available Unallocated Cash Balance

$180,771

Number of Businesses represented at Annual Appreciation Event

29

Expenditure Highlights

• Three

small business grants were paid in the first quarter • Grants help businesses improve signage, landscaping, facades and site improvements • Commitments represent six small business grants

CITY OF ARVADA INVESTMENT REPORT

Investment Portfolio Objectives Pursuant to the City’s investment policy, the primary objectives, in priority order, are safety, liquidity and yield. Consistent with this policy, the portfolio of securities is invested in U.S. Treasuries, U.S. Agencies, local government investment pools (LGIPs), Bank CDs, commercial paper, and corporate debt.

All security types are subject to the concentration limits and credit ratings established by the City’s investment policy. The City-managed investment portfolio is administered to provide sufficient liquidity to meet all reasonably anticipated operating cash needs without selling securities prior to maturity.

The portfolio controlled by PFM is actively managed which means that investments may be sold prior to maturity and reinvested in order to achieve the desired duration, yield or diversification of the portfolio.

corporate sector is limited to no more than 35% of the whole portfolio and no more than 5% per any one issuer.

The Federal Reserve raised its policy rates once again in March of 2018. A 25 basis points (bps) hike put the target rate range at 1.50% – 1.75%. Jerome Powell, the newly appointed Chair of the Federal Reserve, acknowledged in his public address that the “economic outlook remains strong”. The forecast remains for an additional two rate hikes in 2018. The market volatility rose significantly in early February due to fears that tax cuts and expanding Federal budget deficit will over-stimulate the economy. Despite the turmoil, the global economy began 2018 with positive momentum. The U.S. economy was characterized by a strong labor market and rising inflation.

PORTFOLIO CHANGES Par Value as of 03/31/18 MM/Savings/Cash

$ 3,075,402

$ 2,414,860

32,791,384

26,139,190

6,652,194

4,924,614

9,952,288

(5,027,675)

Corporate

23,992,000

18,992,000

5,000,000

US Agency

97,750,000

83,750,000

14,000,000

US Treasury

12,000,000

6,000,000

6,000,000

$174,533,399

$147,248,338

$27,285,061

LGIP Time CD

Subtotal - City

US Treasury 20.7%

Negotiable CD 0.9% US Agency 46.1%

$

660,542

PFM-MANAGED PORTFOLIO Negotiable CD

$ 2,000,000

$ 2,000,000

Corporate

7,450,000

6,680,000

770,000

US Agency

5,500,000

5,500,000

-

US Treasury Subtotal - PFM

34,275,000

35,120,000

$49,225,000

$49,300,000

$

-

(845,000) $

(75,000)

SUMMARY OF CONSOLIDATED PORTFOLIO MM/Savings/Cash LGIP Time CD Negotiable CD

$ 3,075,402

$ 2,414,860

$ 660,542

32,791,384

26,139,190

6,652,194

4,924,614

9,952,288

(5,027,675)

2,000,000

2,000,000

-

Corporate

31,442,000

25,672,000

5,770,000

US Agency

103,250,000

89,250,000

14,000,000

US Treasury

46,275,000

41,120,000

5,155,000

$223,758,399

$196,548,338

$27,210,061

Total - Combined

CONSOLIDATED PORTFOLIO ALLOCATION LGIP 14.7% Time CD 2.2%

Difference

CITY-MANAGED PORTFOLIO

The City’s total investment portfolio over the same time period last year has increased by more than $27 million due to the City’s strong tax base and responsible spending. The holdings in all investment sectors grew almost proportionately. Certificates of Deposit interest rates were not keeping up with the Federal Reserve’s rate increases and therefore were unattractive for re-investment. The City allocates its investments among all maturity ranges to smooth the revenue stream. However, the current allocation is more focused around the 1-3 year mark, along with cash in LGIPs, to have the ability to re-invest at higher rates. Consistent with the City’s practices the majority of the portfolio is invested in U.S. Agencies and U.S. Treasuries, accounting for almost 67% of all investments. According to our investment policy, the

MM/Savings/ Cash 1.4%

Par Value as of 03/31/17

CONSOLIDATED MATURITY DISTRIBUTION

25.0%

22.8%

19.6%

22.7%

20.0%

15.3%

15.0%

10.0%

9.6%

10.0% 5.0%

Corporate 14.1%

0.0%

0-.25

.25-1

1-2

2-3

Maturity (years)

30

3-4

4-5

CITY OF ARVADA INVESTMENT REPORT The average yield on the City-managed portfolio in the first quarter of 2018 was 1.58%, which is an increase of 41 basis points (bps) from the same period last year. The City’s interest earnings are on the rise as the Federal Reserve’s tightening policy continues. The total interest earnings for the first quarter were $827,358, an increase of $283,672 from the prior year. The City’s duration to maturity is 1.82 years, whereas the duration on the PFM-managed portfolio is 2.19 years. Keeping the duration shorter will allow the City to take advantage of the re-investment opportunities at higher rates as the current securities mature.

The average year-to-date yield on the PFM-managed portfolio was 1.38%, an increase of 20 bps from last year. The year-to-date benchmark is at 2.13%. The City’s portfolio is below the benchmark, primarily due to the City’s investment strategy of buying and holding to maturity. Principal preservation is the City’s first priority. Over 90% of investments the City holds are rated AA+ or better.

PORTFOLIO PERFORMANCE

PORTFOLIO CHARACTERISTICS

03/31/2018

03/31/2017

Difference

City Interest Earnings

$657,048

$410,733

$246,315

Duration to Maturity (yrs)

PFM Interest Earnings

170,310

132,953

37,357

Yield to Maturity at Cost

1.67%

1.38%

Total Interest Earned

$827,358

$543,686

$283,672

Yield to Maturity at Market

2.36%

2.36%

YTD City Portfolio Yield

1.58%

1.17%

+41 bps

YTD PFM Portfolio Yield

1.38%

1.18%

+20 bps

YTD Benchmark

2.13%

1.25%

+88 bps

City

PFM 1.83

2.19

CREDIT QUALITY (S&P RATING) AA+ 73.2%

ACCOUNT SUMMARY City

PFM

Total

Par Value

$174,533,399

$49,225,000

$223,758,399

Book Value

174,696,422

49,573,112

224,269,535

Market Value

172,456,187

48,531,833

220,988,020

Unrealized Gain /(Loss)

$(2,240,235)

$(1,041,280)

$(3,281,515)

AAA 18.5%

A-1 0.9%

A-1+ 0.5%

AA6.0%

AA 0.9%

Investment Management Focus - 2018 Jerome Powell is expected to continue former Chair of the Federal Reserve Yellen’s gradual approach towards monetary tightening. The FOMC forecasts three interest rate hikes for 2018.

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

The U.S. Agencies’ spreads are still tight. Callable securities normally get better yield. (Call provisions are a tool used by issuers to refinance debt at a more attractive rate.) In the rising interest rates environment the risk of securities being called decreases; therefore, the focus will be to take advantage of the option-adjusted spreads of callable securities. A combination of callable and non-callable securities will allow us to enhance investment income over the LGIP funds and not to subject the City’s portfolio to excessive turnover if interest rates suddenly fall.

31

Rick Assmus