City of Arvada First Quarter 2021 Financial Report

FINANCIAL REPORT FIRST QUARTER 2021 SAFE COMMUNITY INFRASTRUCTURE ORGANIZATIONAL AND SERVICE EFFECTIVENESS VIBRANT COMMUNITY AND NEIGHBORHOODS COMMUNITY AND ECONOMIC DEVELOPMENT

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 Sheena Freve, Budget Analyst Chris Kelly, Budget Analyst Debra Nielson, Controller Vesta Weinhauer, Accounting Supervisor Jenna Belec, Executive Assistant Steve Milke, Bun Heng, Print Shop

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

1

OVERVIEW

2021 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 first quarter of 2021 brought increased hope in the battle against COVID-19. As of the writing of this document, over 142 million individuals in the U.S. have received their first vaccine with over 97 million fully vaccinated. Restrictions have been reduced with some states fully open and others moving from 25% to 50% in-person capacity. The Centers for Disease Control and Prevention (CDC) issued a statement that if you are fully vaccinated and are outside with other people that are fully vaccinated, you do not have to wear a mask. They have not yet removed the requirement on inside mask wearing as the CDC would like to see more of the population get vaccinated.

First quarter US Gross Domestic Product (GDP) is projected to show year over year growth of over 7.5%. This surpasses the original estimate of 5.5% and points to a faster growing economy. The $1.9 trillion dollar American Rescue Plan Act (ARP) passed by Congress and signed into law by the President in early March will help to continue the momentum with funding being wide spread, including individuals, States, local governments and businesses. The expected GDP year over year growth is 5.4%. Federal unemployment continues to edge downward, ending March at 6.0%.

At the State level, Colorado is expected to grow at a 4.1% year over year, just a little bit slower than the national economy. First quarter GDP is estimated at 4.5%, demonstrating that the reopening push has begun. State unemployment ended the quarter at 6.4% down from 6.9% at the end of 2020. The State’s budget is in much better shape than was expected and the addition of the ARP funds will allow the State to increase the support to the hardest hit and most effected by the virus.

The City continues to be resilient, doing an incredible job dealing with the COVID virus. Unemployment has moved down to 6.5% from 7.8% at the end of 2020. For comparison purposes, before the onset of COVID, unemployment was at 4.6%. There is still a ways to go to get back these levels but progress has been made. Sales tax revenues include only two months of activity but are currently up 17.1% over the same time period in 2020. The Arvada Ridge Public Improvement Fee (PIF) was terminated at the end of 2020, eight years early. The sales tax revenue that was forgiven to implement the PIF is now reinstated. This change accounts for approximately 6.4% of the year over year increase. Another exciting piece of the increase is related to “new” revenue that the City is receiving through the statewide Sales and Use Tax System (SUTS). The SUTS system was implemented last year to allow vendors both inside and outside of the State of Colorado one location to file and remit sales tax with the City of Arvada being one of the early adopters. An additional .8% of the growth is attributable to these “new” vendors. A timing difference in the collection and remittance of a couple of large sales tax vendors, with receipt in the first quarter of 2021 but the second quarter of 2020, led to 4% of the increase. Finally, large essential retailers along with the increases in online retail continue to drive the growth.

2

OVERVIEW

The housing market, especially single family homes are experiencing tremendous growth! Very low interest rates, combined with the desire to “move out of the Cities” have led to a jump in housing prices. Price increases in materials including lumber, copper and concrete, along with labor shortages, have limited the number of new homes. Reduced first quarter building revenues are the outcome of the slower building activity.

As was mentioned above, the City of Arvada will receive funds through the ARP. The estimated amount is $11.7 million dollars and will come in two distributions, one in 2021 and one in 2022. The City will have until the end of 2024 to spend these dollars and the guidance is very restrictive. Over the next few months, the City team will work on identifying areas of focus for these funds and will bring these to the City Council for review later this summer.

One capital project focus areas is discussed this month –Fiber Conduit Boring. Please take the opportunity to read about the progress this critical project has made.

The citizens of Arvada passed Ballot Issue 3F in November of 2018, approving a sales and use tax bond to fund the widening of Ralston Road from Yukon to Garrison and the widening and creation of an underpass on 72nd Avenue from Kipling to Ward. Please see the project detail pages (pages 25-26) in the document for detailed updates.

The revenue picture for the City of Arvada looks much better a year later after the onset of COVID. The Finance team will be monitoring revenues very closely in 2021. Trying to understand and then project consumer behavior will be the challenge. Will some of the habits that were formed during COVID continue will people return to pre-COVID activities or will there be new normal? Only time will tell but the first few months of 2021 might contain some of the clues.

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 • 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 actual amounts.

2021 Budget

General Fund Beginning Fund Balance

As of 03/31/21

As of 03/31/20

$47,115,000

$47,115,000

64,401,040

12,328,292

10,435,084

7,272,000

1,484,136

2,722,012

917,450

189,696

287,294

21,327,680

4,163,936

3,823,530

$93,918,170

$18,166,059

$17,267,920

$86,664,361

$18,900,864

REVENUES Sales & Use Tax

Property Tax Interest Other Total Revenues EXPENDITURES Ongoing

$19,733,222

Capital

4,597,272

-

-

Debt Service

5,361,532

-

-

Total Expenditures

$96,623,165

Income/(Loss)

(2,704,995)

Ending Fund Balance

• • •

$44,410,005

$18,900,864 (734,805)

$19,733,222 (2,465,302)

$46,380,195

The 2021 beginning fund balance was $47,115,000. $4,051,879 of the fund balance is dedicated to projects not completed in 2020, one-time items and new requests.

The 2021-2030 ten-year financial plan requires the use of $14,945,196 to balance.

60% 50%

GENERAL FUND ENDING FUND BALANCE BY QUARTER COMPARED TO FUND BALANCE GOAL OF 17% OF BUDGETED EXPENDITURES

40% 30% 20% 10% 0%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019 2019 2019 2020 2020 2020 2020 2021

4

GENERAL FUND

Sales Tax 56.3%

Revenue Highlights • Overall revenues increased $898,139 or 5.2% over 2020.

• Franchise fees saw a decrease of $208,982 or 37.5% from 2020 due to

2021 BUDGETED GENERAL FUND REVENUES

Property Tax 7.6%

decreases in cable and electric fees collected.

• Building permits decreased $181,376 or 12.1% from 2020 as building is seeing some slow down.

• Interest income saw a decrease of $97,958 or 33.9% from 2020 due to the current investment environment.

• Property tax saw a decrease from 2020 and is discussed in more detail in the “Property Tax” section.

• Sales tax saw an increase of $1,867,047 and is discussed in more detail in the “Property Tax” section.

Use Tax .7%

Other 14.5% Interest 1.0%

Auto Use Tax 6.8% Franchise Fees 6.5%

Court Fines & Fees 1.0%

Building Use Tax & Permits 5.6%

Sales Tax Collections

Sales Tax

• Sales tax collections lag one month; therefore, collections for the first quarter represent January and February collections.

• Sales tax is up 17.1% for the first quarter.

• The Arvada Ridge Public Improvement

Fee (PIF) has been terminated and sales tax has replaced the PIF. The Arvada Urban Renewal Authority (AURA) is now backfilling the sales tax base of this area.

• The increase in sales tax would be 10.7% excluding the additional sales tax from the base.

$9,000,000 $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $-

03/31/2017 $7,222,053

Sales Tax

Use Tax Building Use Tax • Building use tax decreased 5.3% for the first quarter showing that the City may be heading towards a more normal rate of building activity.

Auto Use Tax • Auto use tax is down .5% in the first quarter.

• This category will continue to be monitored since the City saw auto sales increase in 2020 during the pandemic.

General Use Tax • General use tax increased 24.7% in the first quarter.

• The increase is due to several businesses with larger use tax remittances.

• General use tax collections have been declining the past several years. This category will be monitored to determine if businesses may be starting capital reinvestment or if this is just a one-time increase.

03/31/2018 $7,641,687

03/31/2019 $7,614,354

03/31/2020 $7,947,112

03/31/2021 $8,920,211

Use Tax Collections

$3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $General

03/31/2017 $178,734

03/31/2018 $256,726

03/31/2019 $241,379

03/31/2020 $113,659

03/31/2021 $301,032

Auto

$1,215,351

$1,309,753

$1,462,767

$1,455,296

$1,438,010

Building

$1,802,747

$1,343,554

$818,913

$919,016

$775,149

5

GENERAL FUND

Property Tax Collections

Property Tax • The

City’s property tax rate is 4.31 mills per $1,000 of valuation.

• 2021 property tax is based on the mill which is placed on the assessed valuation from 2020.

• Property tax is down 45.4% from 2020.

• The decrease appears to be a timing issue of how homeowner’s have chosen to pay their property tax as property tax collections through April 2021 are even with 2020.

$3,000,000

$2,500,000

$2,000,000

$1,500,000

$1,000,000

$500,000

$-

03/31/2017 $2,148,442

Property Tax

03/31/2018 $2,481,791

03/31/2019 $2,550,891

03/31/2020 $2,722,011

03/31/2021 $1,484,135

Intergovernmental Revenues

Intergovernmental Revenues • Highway Users Tax Fund (HUTF), the City’s share of statecollected gas tax revenue, is down 24.3% for the first quarter.

• HUTF revenues are based on gas tax and are continuing to be impacted by people that are working from home.

• 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.

$800,000 $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $Jefferson County HUTF

6

03/31/2017 $-

03/31/2018 $-

03/31/2019 $-

03/31/2020 $-

03/31/2021 $-

$669,322

$671,071

$745,146

$677,451

$564,064

GENERAL FUND

Expenditure Highlights

• Overall expenditures decreased $823,358 or 4.2% from 2020.

• Services and charges decreased $672,887 or 20.6% from 2020 due to

Personnel, 47.8%

Debt Service 5.5%

decreases in training, snow and ice materials and electric costs.

2021 BUDGETED GENERAL FUND EXPENDITURES

• Professional services decreased $231,131 or 12.9% from 2020 due to professional services in 2019 for the pavement evaluation in Leyden Ranch/Rock area, conversion of a police software system.

• Transfers increased $190,288 or 5.2% over 2020 due to increases in transfers to the Street Maintenance Fund, Park Fund, Food Service Fund and the Buildings fund.

Miscellaneous 0.7%

Transfers 20.7%

Contracts 5.5%

Supplies and Expenses, 7.1% Services and Charges, 12.7%

Salary and Benefit As of 03/31/21

As of 03/31/20

$6,726,784

$6,822,317

-

-

827,673

231,471

238,701

Group Insurance

6,253,356

1,177,972

1,175,692

Retirement

3,934,191

767,632

791,698

Medicare

506,228

94,654

95,862

Temporary Wages & SS

279,351

67,816

136,699

Other

481,635

117,299

148,683

$46,115,734

$9,183,628

$9,409,653

Salary & Benefits Salaries & Wages Vacancy Savings Overtime

Total

2021 Budget $35,482,059 (1,648,759)

• The decrease in Salary & Benefits is due to employee vacancies from retirements and employee turnover.

• The decision to halt the annual salary rate adjustment and the pay step increases was made to plan for the uncertain effects of the COVID pandemic. decision has resulted in the 2021 personnel expenditures being comparable to the previous year’s amounts.

7

This

STREET MAINTENANCE FUND Street Maintenance Fund Overview The Street Maintenance Fund accounts for costs associated with street maintenance, repair and replacement including: crack sealing, chip sealing, seal coating, reconstruction, milling and overlay. 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.

Revenue Highlights • Revenues consist of a transfer from the General Fund, payments from participants in the 50/50 Sidewalk Replacement program and street degradation fees.

Expenditure Highlights • 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. Other expenditures include personnel costs for staff associated with the Street Maintenance fund and partial funding for a new patch truck.

Street Maintenance Fund Beginning Fund Balance

2021 Budget

As of 03/31/21

As of 03/31/20

$363,000

$363,000

$9,950,504

$2,487,626

REVENUES General Fund Transfer Other Total Revenues

$2,437,244

120,000

-

49,925

$10,070,504

$2,487,626

$2,487,168

$4,550,804

$-

EXPENDITURES Asphalt Replacement Concrete Replacement

$-

4,632,029

-

185

Crack Sealing

354,802

150

37

Other

541,429

157,418

16,316

$10,079,063

$157,568

$16,537

2,330,058

2,470,631

Total Expenditures Income/(Loss) Ending Fund Balance

8

(8,559) $354,441

$2,693,058

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Hot Chip

3 in Mill & Overlay (HMA)

Slurry Seal Type II

3 in Mill & Overlay (SMA)

2023Mill&Olay_2021Concrete

GRANDVIEW AVE

W 56TH AVE

Chip Seal Type II (1/4 in)

W 48TH AVE

W 46TH AVE

SHEET

OF

6161 Wadsworth Blvd.

Arvada, Colorado 80002 Phone 720-898-7720

Public Works Department Streets Division

W 69TH AVE

W 60TH AVE

K. Bohan

PROJECT MANAGER

DRAWN BY

J. SMITH

DATE

3/23/21

1 OF 1

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REVISION

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PROJECT NO. 21-ST-01 & 21-ST-10 2021 Planned Concrete Repairs, Street Resurfacing, & Surface Sealing

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BEECH ST

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ESTES ST

W 68TH AVE

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15200 W. KENDRICK 15100 W. JUNIPER 15000 W. JOYCE 14900 W. ISABELL 14800 W. INDIANA 14700 W. HOWELL 14600 W. HOLMAN 14500 W. GLADIOLA 14400 W. GARDENIA 14300 W. FLORA 14200 W. FIG 14100 W. ELLIS 14000 W. ELDRIDGE 13900 W. DEVINNEY 13800 W. DEFRAME 13700 W. COORS 13600 W. COLE 13500 W. BRAUN 13400 W. BEECH 13300 W. ARBUTUS 13200 W. ALKIRE 13100 W. ZINNIA 13000 W. ZANG 12900 W. YANK 12800 W. YOUNGFIELD 12700 W. XENOPHON 12600 W. XENON 12500 W. WRIGHT 12400 W. WARD 12300 W. VIVIAN 12200 W. VAN GORDON 12100 W. URBAN 12000 W. UNION 11900 W. TAFT 11800 W. TABOR 11700 W. SWADLEY 11600 W. SIMMS 11500 W. ROUTT 11400 W. ROBB 11300 W. QUEEN 11200 W. QUAIL 11100 W. PIERSON 11000 W. PARFET 10900 W. OWENS 10800 W. OAK 10700 W. NEWCOMBE 10600 W. NELSON 10500 W. MOORE 10400 W. MILLER 10300 W. LEWIS 10200 W. LEE 10100 W. KLINE 10000 W. KIPLING 9900 W. JOHNSON 9800 W. JELLISON 9700 W. IRIS 9600 W. INDEPENDENCE 9500 W. HOYT 9400 W. HOLLAND 9300 W. GARLAND 9200 W. GARRISON 9100 W. FLOWER 9000 W. FIELD 8900 W. EVERETT 8800 W. ESTES 8700 W. DUDLEY 8600 W. DOVER 8500 W. CODY 8400 W. CARR 8300 W. BRENTWOOD 8200 W. BALSAM 8100 W. AMMONS 8000 W. ALLISON 7900 W. ZEPHYR 7800 W. YARROW 7700 W. YUKON 7600 W. WADSWORTH 7500 W. WEBSTER 7400 W. VANCE 7300 W. UPHAM 7200 W. TELLER 7100 W. SAULSBURY 7000 W. REED 6900 W. QUAY 6800 W. PIERCE 6700 W. OTIS 6600 W. NEWLAND 6500 W. MARSHALL 6400 W. LAMAR 6300 W. KENDALL 6200 W. JAY 6100 W. INGALLS 6000 W. HARLAN 5900 W. GRAY 5800 W. FENTON 5700 W. EATON 5600 W. DEPEW 5500 W. CHASE 5400 W. BENTON 5300 W. AMES 5200 W. SHERIDAN 5100 W. ZENOBIA 5000 W. YATES 4900 W. XAVIER 4800 W. WOLFF 4700 W. WINONA 4600 W. VRAIN 4500 W. UTICA 4400 W. TENNYSON

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DEFR

20800 W. MASSIVE 20700 W. LIBERTY CAP 20600 W. LA PLATA 20500 W. KENOSHA 20400 W. KEBLER 20300 W. JAGGED MT. 20200 W. JAGERHORN 20100 W. IRON MT. 20000 W. INGRAM 19900 W. HANDIES 19800 W. HALLETT 19700 W. GARNETT 19600 W. GORE 19500 W. FLATTOP 19400 W. FLAGSTAFF 18300 W. ELDORA 19200 W. EL DIENTE 19100 W. DUNRAVEN 19000 W. DEVILS HEAD 18900 W. CULEBRA 18800 W. CRESTONE 18700 W. BROSS 18600 W. BLANCA 18500 W. ANVIL 18400 W. ANTERO 18300 W. ZIRCON 18200 W. ZETA 18100 W. YUCCA 18000 W. YANKEE 17900 W. YULE 17800 W. WINDY 17700 W. WILKERSON 17600 W. WIER 17500 W. VIRGIL 17400 W. VIOLET 17300 W. UMBER 17200 W. ULYSSES 17100 W. TORREY 17000 W. TERRY 16900 W. SECREST 16800 W. SALVIA 16700 W. RUSSELL 16600 W. ROGERS 16500 W. QUARTZ 16400 W. QUAKER 16300 W. POPPY 16200 W. PIKE 16100 W. ORION 16000 W. ORCHARD 15900 W. NOBLE 15800 W. NILE 15700 W. MOSS 15600 W. MCINTYRE 15500 W. LUPINE 15400 W. LOVELAND 15300 W. KILMER

STREET MAINTENANCE FUND

The 2021 Concrete Program will: • Complete any warranty work from the 2019 project • Complete 25 addresses for the 50/50 Concrete Replacement Program • Remove and replace qualifying combination sidewalk curb and gutter and/or vertical curb and gutter for the 2023 Overlay Program • Remove and replace ADA ramps on intersecting streets for the 2023 Overlay Program

The 2021 Asphalt Program will:

• Mill and overlay according to the map provided • Chip seal the EE Ranch neighborhood on Ward road east from Alkire and West 72nd Ave. from Beech St. to Indiana • Slurry Seal the remaining streets in EE Ranch, the southern side of the Whisper Creek subdivision, and Alkire Estates

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

2021 Budget

As of 03/31/21

$6,055,000

$6,055,000

$5,066,964

$435,186

$392,540

3,784,869

960,607

924,307

APEX Reimbursement

901,564

-

-

Other

326,024

49,402

53,177

$10,079,421

$1,445,195

$1,370,024

$9,918,238

$1,696,990

$1,708,449

-

-

-

$9,918,238

$1,696,990

$1,708,449

Parks Fund

• Overall revenues increased $75,171 or 5.5% over

Beginning Fund Balance

2020.

• Open space experienced an increase of $42,626 or 8.6% over 2020.

• The cash transfer from the General Fund increased $36,300 or 3.9%.

• Other revenues saw a decrease of $3,775.

REVENUES Open Space City Cash Transfer

Total Revenues

Expenditure Highlights

EXPENDITURES

• Ongoing expenditures decreased $11,459 or .6% from 2020.

As of 03/31/20

Ongoing Capital Total Expenditures Income/(Loss)

161,183

Ending Fund Balance

$6,216,183

(251,795)

(338,425)

$5,803,205

$10,000,000 $9,000,000 $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $-

2017 $-

2018 $-

2019 $-

2020 $-

2021 $-

2021 Budget $901,564

Cash Transfer

$820,819

$832,935

$887,148

$924,307

$960,607

$3,784,869

Open Space

$317,330

$338,294

$354,348

$392,540

$435,186

$5,066,964

APEX

10

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

2021 Budget

As of 03/31/21

As of 03/31/20

$14,413,000

$14,413,000

$8,714,675

$1,563,121

$1,301,903

1,510,135

352,620

381,563

(182,227)

30,232

REVENUES Sales Tax/Audit Revenue Use Tax Other Total Revenues

480,667 $10,705,477

$1,733,514

$1,713,697

$11,466,175

$2,168,949

$2,225,809

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

15,681

3,561

34,078

$11,481,856

$2,172,510

$2,259,887

(776,379) $13,636,621

(438,996)

(546,190)

$13,974,004

11

Revenue Highlights

• Sales tax and audit revenue was higher than the same time period in 2020. Sales tax revenue increased due to several revenue categories having double digit percentage increases. The largest percentage increase was in Online Retail Sales which had an increase of 80%.

• The decrease in other revenue is due to a much larger accounting adjustment entry for daily interest in 2021 than the entry made in 2020.

Expenditure Highlights • Ongoing expenditures decreased due to the purchase of audio-video equipment and safety vests in 2020 which did not repeat in the following year.

• Capital expenditures decreased because of the Lake Arbor Substation parking lot project that was completed in 2020.

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

2021 Budget

As of 03/31/21

As of 03/31/20

Beginning Fund Balance

$6,061,000

$6,061,000

$156,810

$195

$590,370

475,207

9,164

9,626

City Cash Transfer

45,000

11,250

Interest/Other

34,000

767

14,885

Total Revenues

$711,017

$21,376

$614,881

$758,556

$537,280

$109,969

283,544

43,357

29,001

REVENUES Recovered Grants

-

EXPENDITURES Ongoing

Essential Home Repairs Loans Total Expenditures

$1,042,100

Income/(Loss) Ending Fund Balance

(331,083) $5,729,917

$580,637 (559,261)

$138,970 475,911

$5,501,739

Revenue Highlights

• Overall revenues decreased $593,505 or 96.5% from 2020.

• A loan repayment of $540,000 was received during the first quarter 2020 from Sheridan Ridge Apartment and makes up the majority of the decrease. Interest revenue was also lower due to the current investment environment.

Expenditure Highlights

• Overall expenditures increased $441,667 which is a 300% increase over 2020. This increase is due to assisting residents with emergency rental assistance during the Covid 19 pandemic.

• Essential home repairs increased approximately $14,000 from 2020.

• Three essential home repair projects were completed during the first quarter of 2021 as compared to four projects in 2020.

• The wait list for essential home repairs sat at 41 as of March 31, 2020.

12

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.

Arvada Housing Authority

2021 Budget

As of 03/31/21

As of 03/31/20

Beginning Fund Balance

$127,000

$127,000

$13,200

$5,047

$7,718

5,765,738

1,756,933

1,347,688

REVENUES Recovered Grants Transfers

75,000

-

9,280

Interest/Other

1,000

19

370

Total Revenues

$5,854,938

$1,761,999

$1,365,056

Ongoing

$423,959

$76,779

$101,980

Rents

5,309,021

1,408,141

1,130,501

EXPENDITURES

Transfers Total Expenditures

37,413

10,758

7,635

$5,770,393

$1,495,678

$1,240,116

84,545

266,322

124,940

$211,545

$393,322

Income/(Loss) Ending Fund Balance

Revenue Highlights

• Overall revenues increased $396,943 or 29.1% over 2020.

• Grants revenue increased $409,245 or 34.6% from 2020 due to rising rental costs and the addition of the Mainstream Voucher program during 2020 which aids families with disabled members.

• For the first quarter 2021 there have not been transfers from the General Fund or Community Development fund due to staffing changes.

Expenditure Highlights • Overall expenditures increased $255,562 or 20.6% over 2020.

• Rent expenditures increased $277,640 or 24.6% due to increased rental costs and the addition during 2020 of the Mainstream Voucher program to assist families with disabled family members.

• Ongoing expenditures decreased $25,201 or 24.7% due to staffing changes as 2020 saw some long tenured employee departures.

• The Arvada Housing Authority served 450 families during the first quarter 2021 while 451 were served during the first quarter of 2020.

The Housing Authority also served 41 families with disabilities through the Mainstream Voucher program.

13

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

2021 Budget

As of 03/31/21

As of 03/31/20

$33,905,000

$33,905,000

• Contributions

REVENUES Transfers

$5,663,272

$-

$117,000

Grants and Recovered Costs

-

-

75,000

Contributions

-

4,875,708

2,602,737

300,000

137,217

86,016

$5,963,272

$5,012,925

$2,880,753

Interest Total Revenues EXPENDITURES CIP Administration

$422,790

$(169,610)

$575,571

CIP Technology

$231,855

$333,837

$221,121

1,361,815

9,771

98,848

CIP Traffic Projects

4,452,601

506,850

140,371

CIP Park Projects

2,898,000

6,723

8,605

Total Expenditures

$9,367,061

$687,571

$1,044,516

Income/(Loss)

(3,403,789)

4,325,354

1,836,237

CIP Street Projects

Ending Fund Balance

$30,501,211

Revenue Highlights

$38,230,354

CIP Park Projects 6,723

CIP Technology $333,837

CIP Traffic Projects 506,850

CIP Street Projects 9,771

14

reflect traffic impact fees and development fees that are designated for specific capital projects.

Expenditure Highlights

• Administration expenditures are related to final payments for the parks/fleet building.

• Technology expenditures are related to the fiber conduit boring project.

• Traffic expenditures are related to the traffic signal rebuilds.

• Park expenditures are for a new entry door at the Majestic View Nature Center.

CAPITAL IMPROVEMENTS PROJECTS FUND Project Updates Fiber Conduit Boring In 2017, the City completed a conduit master plan. The plan identified approximately 55 miles of conduit necessary to connect anchor institutions, such as the City, schools and fire stations. The City continues to work on the plan to build out a city-wide communication network that will play a critical role in helping Arvada and its citizens address challenges in safety, mobility and economic vitality and will provide for future communication needs. The map shows those areas that will be completed in 2021.

Pink = conduit in the ground Area on map

Yellow = vision for 2022

Master Plan Route

From

To

Distance

1

Indiana Street

Bus Terminal

W 72nd Avenue

2,894 feet

2

West 76th Avenue

Across Wadsworth

182 feet

3

Pomona Drive

Across Wadsworth

140 feet

4

West 64th Avenue

Lamar Street

Eaton Street

2,477 feet

5

Ward Road

West 65th Avenue

West 67th Avenue

1,479 feet

80th and Alkire

Via West 86th Parkway

Fiber Boring (in blue)

Fiber Pull (in red) 1

15

32,635 feet

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.

Revenue Highlights

• Water Charges revenue has increased as a result of the new 2021 rate schedule while consumption is about the same as last year.

• Tap Fees and Other revenue decreased due to the slowdown in new construction.

Residential as well as commercial construction in the 1st quarter 2021 was less than the 1st quarter of 2020.

Expenditure Highlights • The Ongoing expenditures increased due to a sediment disposal fee in 2021.

• The Major Capital Maintenance expenditures increased because of the Raw Water Meter project payment occurring in 2021.

• Capital expenditures increased from large payments for the Ralston Water Pump Station and Pipeline project made in 2021 in relation to the low dollar amount of payments made last year for other capital projects.

2021 Budget

As of 03/31/21

$108,708,000

$108,708,000

$25,037,798

$3,285,618

$3,172,314

Tap Fees

7,155,114

568,925

740,120

Interest

1,182,400

251,334

328,137

Other

1,244,976

263,335

386,417

$34,620,288

$4,369,212

$4,626,989

$24,204,580

$4,045,796

$3,869,485

Water Fund Beginning Fund Balance

As of 03/31/20

REVENUES Water Charges

Total Revenues EXPENDITURES Ongoing Debt Service

-

Major Capital Maintenance Capital Total Expenditures

-

-

4,555,101

537,943

199,382

33,402,641

3,027,717

186,931

$62,162,322

$7,611,456

$4,255,799

Income/(Loss)

(27,542,034)

Ending Fund Balance

$81,165,966

(3,242,245)

371,190

$105,465,755

*$36,258,693 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 2026.

16

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 Beginning Fund Balance

2021 Budget

As of 03/31/21

As of 03/31/20

$8,242,000

$8,242,000

$13,701,004

$3,065,055

$3,022,077

Tap Fees

778,446

65,995

87,949

Interest

213,787

8,113

22,594

1,570,136

2,011

1,446

$16,263,373

$3,141,173

$3,134,066

$9,581,748

$2,083,136

$2,027,868

Ongoing

3,505,055

674,175

616,094

Major Capital Maintenance

2,412,896

392,190

Capital

2,015,737

(235,175)

Revenue Highlights

REVENUES Sewer Charges

Other Total Revenues EXPENDITURES Metro District

Total Expenditures

$17,515,436

Income/(Loss)

(1,252,063)

Ending Fund Balance

$6,989,937

73,674 348,651

$2,914,326

$3,066,287

226,847

67,779

$8,468,847

17

• Sewer

Charges revenue is comparable to the previous year’s revenue.

Expenditure Highlights • The

increase in Major Capital Maintenance expenditures is due to payments made in 2021 for the Trenchless Sewer Main Replacement project that had not yet started in the first quarter of 2020.

• The Capital expenditures decreased because payments for the Ralston Trunk Sewer Replacement project were made in the 1st quarter of 2020 but not the 1st quarter of 2021.

ENTERPRISE FUNDS

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

Revenue Highlights • The increase in other revenue is due to a grant for the Lower Ralston Creek Restoration project and a development fee for a capital project.

Expenditure Highlights • The Capital expenditures decreased due to the change order payment in 2020 on the Leyden Creek Drainage and Flood Control project whereas there were no project charges in 2021.

Stormwater Fund

2021 Budget

As of 03/31/21

As of 03/31/20

Beginning Fund Balance

$7,352,000

$7,352,000

$3,935,577

$1,035,247

$1,015,470

99,813

144,478

31,900

$4,035,390

$1,179,726

$1,047,370

$2,439,487

$402,663

$371,637

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

866,466

216,617

215,965

1,183,205

8,403

385,142

$4,489,158

$627,683

$972,744

552,042

74,625

(453,768)

Ending Fund Balance

18

$6,898,232

$7,904,042

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.

Golf Fund

2021 Budget

As of 03/31/21

Beginning Fund Balance

$(705,000)

As of 03/31/20

Revenue Highlights

$(705,000)

• Overall revenues decreased in 1st quarter 2021 $183,752 or 27.29% from 2020.

• Golf course revenue decreased $32,264 or 10.56% from 2020.

The weather was not as nice as it was in 2020.

• Golf rounds played in the first quarter 2021 decreased by 366 from 2020.

• Restaurant revenue is down $151,732 or 50.7% from 2020.

This is due to restaurants only being able to operate at 25% or 50% capacity.

REVENUES Golf Courses

$3,976,578

$273,315

$305,579

Restaurants

1,903,032

147,537

299,269

266,262

68,631

68,386

$6,145,872

$489,482

$673,234

City Cash Transfer Total Revenues EXPENDITURES Golf Courses

$2,256,273

$362,435

$355,205

Restaurants

2,296,756

295,499

381,415

Administration

1,859,634

543,784

343,919

Capital Total Expenditures

$6,412,663

Income/(Loss) Ending Fund Balance

$1,201,717

(266,791)

(712,235)

$(971,791)

$(1,417,235)

Expenditure Highlights -

$1,080,539 (407,305)

• Overall

first quarter expenditures increased $121,178 or 11.21% over 2020.

• Horticulture and Facilities expenditures increased, while Restaurant expenditures decreased due to limited capacity.

Golf Rounds by Type - January - March Player Support

Super Users Annuals

Super Users Clubs

Tournament/ Corp Leagues

Grow the Game

Total

West Woods 2020

2,745

471

-

-

11

3,227

2021

2,704

665

-

-

2

3,371

Variance

(41)

194

-

-

(9)

144

-1%

41%

0%

0%

-82%

4%

1,939 1,610 (329) -17%

1,259 1,078 (181) -14%

0%

0%

0%

3,198 2,688 (510) -16%

4,684 4,314 (370) -8%

1,730 1,743 13 1%

0%

0%

11 2 (9) -82%

6,425 6,059 (366) -6%

Lake Arbor 2020 2021 Variance Combined Rounds Total 2020 2021 Variance

19

ENTERPRISE FUNDS

Solid Waste Fund Overview In 2020, the Arvada City Council approved a new waste and recycling program. The City entered into an agreement with a single trash company to provide waste and recycling collection for residents. The trash and recycling services will begin in July 2021.

Solid Waste Fund Beginning Fund Balance

2021 Budget

As of 03/31/21 $-

Expenditure Highlights

As of 03/31/20

• TThe expenditures in the 1st quarter are for a

$-

new software module to handle the tracking of the waste hauling services.

REVENUES Charges & Fees Other Total Revenues

$3,039,485

$-

3,282,400

-

$6,321,885

$-

$$-

EXPENDITURES Operating Debt Services

$6,035,427 285,833

Other Total Expenditures Income/(Loss) Ending Fund Balance

$41,403 -

$6,321,260

$-

-

-

-

$41,403

625

(41,403)

$625

$(41,403)

$-

20

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.

2021 Budget

Insurance Fund Beginning Fund Balance

As of 03/31/20

$3,830,000

$3,830,000

$2,433,742

$603,270

$646,506

80,000

19,627

22,777

-

13,196

23,182

$2,513,742

$636,093

$692,465

$1,876,391

$206,191

$274,620

412,824

66,127

65,535

$2,289,215

$272,318

$340,155

224,527

363,775

352,310

$4,054,527

$4,193,775

$352,310

REVENUES Contributions Interest Other Total Revenues EXPENDITURES Risk Management Administration

*Per GASB Statement 10, an additional $1,547,851 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 2020.

As of 03/31/21

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

Revenue Highlights • Revenues decreased $56,372 or 8% from 2020.

• The decreases were caused by lower interest revenue due to the current investment environment and reduced recovered costs as insurance recoveries were lower in 2021.

Expenditure Highlights • Overall expenditures decreased $67,837 or 19.9% from 2020.

• Contract services increased $25,000 over 2020 as a software maintenance agreement was paid during first quarter 2021 and in second quarter in 2020.

• Workers compensation claims decreased $67,000 or 49.6% from 2020 due to fewer claim payments in 2021.

• Liability claims decreased approximately $35,000 or 67.8% due to fewer claims in 2021.

• Auto claims increased $30,525 over 2020 • Supplies and expenses saw an increase of approximately $9,000 due to ergonomic purchases for employees working remotely.

21

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

2021 Budget

As of 03/31/21

As of 03/31/20

Beginning Fund Balance

$7,718,000

$7,718,000

Maintenance

$1,443,636

$411,574

$363,652

Replacement

1,043,556

273,887

250,696

REVENUES

Other Total Revenues

91,146

(127,603)

11,551

$2,578,338

$557,858

$625,899

$1,282,707

$469,491

$435,333

Replacement

527,728

92,752

97,433

Other

106,567

10,091

24,937

$1,917,002

$572,333

$557,702

EXPENDITURES Maintenance

Total Expenditures Income/(Loss) Ending Fund Balance

661,336 $8,379,336

(14,474)

68,196

$7,703,526

Revenue Highlights • Replacement

revenue and Maintenance revenue are comparable to the previous year.

• The decrease in other revenue is due to a much larger accounting adjustment entry for daily interest in 2021 than the entry made in 2020.

Expenditure Highlights • Maintenance expenditures increased from the purchase of Zoom software licenses and an increased number of Windows Enterprise licenses needed.

22

INTERNAL SERVICE FUNDS

Vehicle Fund 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.

2021 Budget

As of 03/31/21

$6,651,000

$6,651,000

Maintenance Contributions

$2,850,577

$660,713

$675,046

Replacement Contributions

2,716,765

741,610

672,893

140,000

486,262

63,957

$5,707,342

$1,888,585

$1,411,897

Maintenance

$2,695,373

$650,546

$629,373

Replacement

2,962,313

481,344

400,210

$5,657,686

$1,131,889

$1,029,583

49,656

756,696

382,314

$6,700,656

$7,407,696

Vehicles Fund Beginning Fund Balance

As of 03/31/20

Revenue Highlights • Overall revenues increased by 33.8% over last year in the same time period. This is largely due to transfers from other departments for the purchase of new vehicles not included in the annual replacement contributions. Replacement contributions increased by 10% over the prior year.

REVENUES

Other Total Revenues

Expenditure Highlights

EXPENDITURES

Total Expenditures Income/(Loss) Ending Fund Balance

• Expenditures

23

have increased by 9.9% over the first quarter of 2020, primarily due to greater spending on vehicle replacements. In the first quarter of 2021, the City purchased: • One tractor and two Toro Aerator machines with a seeder attachment and a snow blower attachment for Parks.

• Six Ford Fusions for Police • A tracker boat, motor, and trailer for the Water Treatment Plant and two Ford F350s with utility boxes for Water • Two Ford F250s for Streets (one with front-end plow) • A Chevrolet Bolt for Mobility and Planning Innovation

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

2021 Budget

As of 03/31/21

$369,000

$369,000

$210,166

$39,343

As of 03/31/20

Revenue Highlights

REVENUES Print Shop Copiers Total Revenues

• Print shop revenue is down from 2020 due to fewer

$59,351

148,352

20,811

23,278

$358,518

$60,154

$82,629

jobs.

• Copier revenue in 2021 continues to decline as the majority of employees are still working from home.

Expenditure Highlights

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

$268,396

$46,222

77,903

20,359

9,400

19,583 -

$355,699

-

$66,581

2,819

$71,638

(6,427)

$371,819

• Print

$52,055

10,991

shop expenditures are lower than 2020 primarily due to a reduction in supplies and expenses.

• Copier expenditures are up slightly compared to 2020 because of a new lease for mail machine.

$362,573

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

2021 Budget

As of 03/31/21

As of 03/31/20

Beginning Fund Balance

$(84,000)

$(84,000)

$819,723

$162,517

$113,459

46,000

1,211

16,132

$865,723

$163,728

$129,591

Personnel

$67,181

$14,121

$14,422

Replacement

332,346

3,150

1,754

244,404

118,238

$261,674

$134,414

REVENUES Replacement Transfers Other Total Revenues EXPENDITURES

Equipment Total Expenditures Income/(Loss) Ending Fund Balance

$399,527 466,196

(97,946)

$382,196

$(181,946)

(4,823)

24

Revenue Highlights • Replacement transfers have increased by 43% over the prior year. This is due to savings from the Ameresco Energy Performance project being transferred to the Buildings fund to help offset the construction costs.

Other revenues include rebates associated with the Ameresco Energy Performance project and interest on investments.

Expenditure Highlights • Replacement

spending includes the Majestic View Roof replacement. Equipment expenditures are for final payments to the Ameresco Energy Performance contract to conserve energy and generate savings through efficiencies in electricity, gas, and water consumption.

3F BOND PROJECTS

Overview On November 6, 2018 the citizens of Arvada approved Ballot Issue 3F to fund improvements to Ralston Road and West 72nd Avenue. Municipal bonds are commonly used by cities to fund capital improvement projects. In 2018, the City finished paying off a previous bond issue, freeing up $4.5 million in annual payments already accounted for in the City’s current budget. “Debt re-authorization” allows the money from the previous bond to be applied to a new bond whose funds will be used for these new capital improvement projects.

Ralston Road Design

Budget

Actual

Remaining

$1,809,992

$1,809,992

Right-of-Way

4,861,539

3,429,219

1,432,320

Construction

10,540,410

189,009

10,351,401

671,059

36,806

634,253

$17,883,000

$5,465,026

$12,417,974

Miscellaneous Total Project

$-

Ralston Road

72nd Avenue

Ralston Road - Yukon to Garrison Bond Project Description: Ralston Road is an arterial roadway and a major east-west corridor for Arvada’s transportation network, serving 23,000 vehicle trips each day. It provides connectivity to major north-south corridors including three State Highways (SH-95/Sheridan Boulevard, SH-121/Wadsworth Boulevard, and SH-72/Ward Road).

The Regional Transportation District (RTD) operates five bus lines using portions of Ralston Road.

The Citizens Capital Improvement Plan Committee (CCIPC) has twice ranked Ralston Road improvements as the number one transportation priority and recommended it for funding to the City Council. The project also addresses concerns expressed in recent Arvada Citizen Surveys. The 2014 Comprehensive Plan generated transportation models indicating that the congestion, operation, and safety of Ralston Road will deteriorate with the build-out of the City, and roadways will perform at the lowest levels of services.

Progress:

• • •

The City has one remaining property (7805 Ralston Rd) to acquire for the right-of-way.

Overhead utility conversions by Xcel Energy are currently on-going.

The City received six responses to the advertisement of the construction contract. After a thorough review and checking references, the City awarded Hamon Infrastructure, Inc. the contract worth $12,360,000.00.

Next Steps: Virtual open house was held on April 15, 2021, prior to construction. This was an opportunity for the public to learn more about the project, meet the team members, and learn how to stay informed during construction.

Overhead utility conversions by CenturyLink and Comcast to start in the next few weeks. Also, Site Wise will be on-site to relocate the 2” gas line to make room for the construction of the new 12” waterline. Overnight work is to be expected.

The project will be completed in two years and in three phases. The first phase will include work related to utilities. The second phase will be the widening on the north side and the third phase will be the widening on the south side. Notice to Proceed 1 is scheduled for April 26, 2021 for Hamon to start construction of the first phase.

25

3F BOND PROJECTS 72nd Avenue Design Right-of-Way Professional Services

Budget

Actual

Remaining

$2,915,584

$3,427,081

$(511,497)

5,550,000

2,286,461

3,263,539

2,695,226

938,170

Construction

53,339,190

Total Project

$64,500,000

1,757,056 -

$6,651,712

53,339,190 $57,848,288

W. 72nd Avenue Bond Project

Description:

W. 72nd Avenue is an arterial parkway and a major east-west corridor for Arvada’s transportation network, serving 21,000 vehicle trips each day. It provides connectivity to major north-south corridors including three State Highways (SH-95/Sheridan Boulevard, SH-121/Wadsworth Boulevard, and SH-72/Indiana Street). The regional corridor not only serves all of Arvada, it provides access to Westminster and Golden/Jefferson County.

The Citizens Capital Improvement Plan Committee (CCIPC) twice ranked improvements to W. 72nd Avenue as a high priority. The project also meets concerns expressed in recent Arvada Citizen Surveys. And the 2014 Comprehensive Plan generated transportation models indicating that the congestion, operations, and safety of W. 72nd Avenue will deteriorate with the build-out of the City and roadways will perform at the lowest levels of service.

Progress:

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Design has been completed for Construction Package 1 (CP-1) (tree removal, utility relocation for the entire corridor, and new utilities,) and is under contract with a Notice to Proceed (NTP) dated March 25, 2021. A pre-construction meeting was held on April 7, 2021 to discuss Contractor expectations. The first activity for CP-1, tree removal, will begin the week of April 27th.

•

Construction Package 2 (Swadley Ct. to Oak Street) 90% FOR plans were submitted to the City on February 26th and were reviewed by City staff over the 3 weeks that followed. City review comments are currently being addressed by the design consultant and 100% plans will be back to the City in early May once the City comments are reconciled. Quantity reconciliation and unit pricing will begin shortly after in mid-May to develop a construction agreed price (CAP). The CAP and construction plans will then go to City Council in June for a likely July or early August NTP date depending on the progress of the Utility clearances.

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Construction Package 3 (Oak to Kipling, including the UPRR underpass) has five components: bridge structure; railroad shoofly; temporary vehicular bypass; roadway design plans from Oak to Kipling Street; and a Construction and Maintenance Agreement (C & M Agreement), which are all at varying stages of review by UPRR and the City. Each of the review timelines have been occurring within the expected timelines by UPRR. The 90% FOR roadway plans will be submitted to the City in August. The City is anticipating the C & M Agreement negotiation to get started in late summer to early autumn.

• •

All Notices of Intent (NOIs) have gone out. Of the 78 Parcels impacted, 56 offers have been extended to property owners and 34 offers have been accepted.

A Facebook Group has started voicing concerns that environmental regulations were not followed for this project. Our design consultant has provided the City a Nationwide 14 permit from the US Army Corps of Engineers. Further environmental regulations are being assessed to ensure the City has met its federal obligations.

•

The project team is developing a plan to mitigate high groundwater and possible environmental issues by discharging it to the surface. Consideration of options is ongoing to discharge groundwater to the public sanitary sewer system, or to treat for heavy metal removal and discharge into the storm sewer system. A possible test hole is being considered at a City-owned property at the northwest quadrant of the 72nd and UPRR intersection to ascertain inflow rates from the walls of the test hole to better understand the dewatering method needed to waterproof the underpass excavation limits.

•

Sonheim Underground Stream- The project team is assessing how the new underpass may cut off underground stream flow to several properties on the south side of 72nd immediately east of the existing railroad tracks. A french drain is being proposed to recharge the water table in that location. Assessments are ongoing as to the recharge rates of the water table after construction.

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The project team met with property owners on October 9th, 2020 to discuss sound levels, air quality, ROW acquisitions, temporary and permanent fencing types, and retaining wall types. The team further emphasized that there was no technical justification for sound walls. The City has decided against sound walls, but did determine that the 6-foot high cedar fencing should have metal posts. The project noise report and technical memo analysis were made available to the public via the City website. Noise concerns are ongoing, however the City has determined that no further sound studies are warranted.

• •

All complete property acquisitions of the four parcels on the east of UPRR, on the north side, have occurred.

Right-of-way needs are set and acquisition, negotiations, and appraisals are ongoing. Several parcels have large discrepancies in the two appraisals which have complicated acquisitions. Negotiations are ongoing with further assessments of both private and City appraisals.

•

Project scheduling is fluid and will remain fluid until there is a better understanding of the UPRR coordination and response time. Overlapping construction packages are being considered to mitigate potential delays, based the slow turnaround review time for UPRR and possible utility relocation delays.

• •

Utilities coordination and design for early construction packages have progressed and Xcel, Comcast, and CenturyLink are all active in the coordination.

Several meetings with the critical properties, as shown below, have occurred and informal agreements have been made.

• Blackbird farms – relocate dock - negotiation and design • Lincoln Academy – relocate entrance - design; relocated water quality pond; provided information about possible site upgrades, based on the acquisition fees they will receive and will be required to use for said upgrades • First United Church – Rework parking lot design; relocate church monument sign; added water quality pond on south side of property. Negotiated an easement on the west side of the building for storm sewer • The Grange – provided new parking layout along with some extra paving on the west side of their lot, and agreed to relocate their sanitary sewer to tie in on 72nd Ave • Sunrise Village – Creekside Development submitted a preliminary plat showing dedication of 30’ of right of way along the frontage of the parcel. The Developer is requesting a statement from the City with respect to what the City will pay for and what the developers responsibilities will be to connect to the City’s new infrastructure. A cost estimate was provided to the Developer’s attorney with the expectation that the City will be reimbursed for any expenditures the City has in order to facilitate their new development

Next Steps:

Continue pushing Union Pacific to review plans in a timely fashion in order to get the negotiation of the Construction and Maintenance Agreement negotiation to start in late summer.

Start development of a construction organizational chart to allow City staff to forecast construction staffing needs for the different construction packages (Project Engineer/CM and City inspectors) Continue Coordination efforts with stakeholders, including the Union Pacific Railroad, Xcel Energy, Jefferson County School District, and others.

Individually craft language for large-parcel offer packets to provide more information to the recipients of the offers, thus addressing and clarifying multi-appraisal discrepancies.

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CITY OF ARVADA INVESTMENT REPORT PORTFOLIO CHANGES

Investment Portfolio Objectives As stated in the City’s investment policy, the primary objectives of the City’s investment activities, in priority order, is 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), commercial paper, and corporate debt subject to rating restrictions and concentration limits which are outlined in 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.

Par Value as of 03/31/21

Par Value as of 03/31/20

Difference

CITY-MANAGED PORTFOLIO MM/Savings/ Cash

$9,544,945

$1,407,823

$8,137,122

LGIP

21,916,151

56,376,513

(34,460,362)

7,012,251

6,882,465

Corporate

26,669,000

27,661,000

Municipal

16,580,000

8,755,000

7,825,000

US Agency

88,000,000

68,000,000

20,000,000

8,000,000

7,000,000

1,000,000

Time CD

US Treasury Subtotal - City

$177,722,346

129,786 (992,000)

$176,082,800

$1,639,546

The first quarter of 2021 brought a more positive outlook for the US economy.

The rollout of vaccines, additional fiscal stimulus, and favorable monetary policy, fueled economic recovery and boosted consumer confidence. The economists are forecasting the US economy to expand at an annualized rate of 6-7% in 2021. The market’s expectations for a higher inflation drove the long-term yields higher, while the short-term remain at nearly the same levels. The 10-year Treasury increased from 0.93% to 1.74% in the first quarter. In contrast, the yield on a 3-months T-bill decreased by 6 basis points (bps). With more and more people vaccinated and the lockdown restrictions being eased, the hiring accelerated in March and the unemployment rate fell to 6%.

PFM-MANAGED PORTFOLIO

Cash

$9,544,945

$1,407,823

$8,137,122

The City’s investment portfolio remained stable at $230 million.

Approximately a quarter of the total portfolio is managed by the outside investment advisor PFM, the rest is managed in-house. The most significant change in the allocation of the investments in the City’s managed portion was the decrease in LGIP balances by $34 million. After the Fed cut rates to nearly zero in March of 2020, the rates in LGIP funds gradually fell from 1.46% to only 0.06% as of March 2021. The City sought out better investment opportunities in other sectors. PFM made some changes in their allocation as well. With the steepening yield curve and widening spreads on US Agencies, the allocation to that sector was increased in lieu of US Treasuries. Municipal bond market was also favored over corporate debt as more new municipal issues hit the tape in 2020 and it offered relative value with lower credit risk.

LGIP

21,916,151

56,376,513

(34,460,362)

Time CD

7,012,251

6,882,465

Negotiable CD

1,070,000

1,070,000

Corporate

34,982,000

36,229,000

(1,247,000)

Municipal

19,950,000

11,330,000

8,620,000

US Agency

108,880,000

72,195,000

36,685,000

27,505,000

42,540,000

(15,035,000)

$228,030,800

$2,829,546

Negotiable CD

$1,070,000

$1,070,000

8,313,000

8,568,000

Corporate

$(255,000)

Municipal

3,370,000

2,575,000

795,000

US Agency

20,880,000

4,195,000

16,685,000

US Treasury

19,505,000

35,540,000

(16,035,000)

$53,138,000

$51,948,000

$1,190,000

Subtotal - PFM

SUMMARY OF CONSOLIDATED PORTFOLIO MM/Savings/

US Treasury Total - Combined

CONSOLIDATED PORTFOLIO ALLOCATION

$230,860,346

129,786 -

CONSOLIDATED MATURITY DISTRIBUTION

US Agency 47.2%

25.9%

30.0% US Treasury 11.9% Municipal 8.6% Corporate 15.2%

20.0%

0.0%

Time CD 3.0%

13.9%

15.8%

7.4%

10.0%

MM/Savings/ Cash LGIP 4.1% 9.5% Negotiable CD 0.5%

16.7%

0-.25

.25-1

1-2

2-3

Maturity (years)

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20.3%

3-4

4-5

CITY OF ARVADA INVESTMENT REPORT The first quarter of 2021 saw an average year-to-date yield of 1.25% in the City-managed portfolio and 1.53% in the PFM portfolio. This is a decrease of 53 bps for both portfolios when compared to the same period last year. Both portfolios show a strong performance over the trailing twelve months (TTM) 2-year Treasury benchmark of 0.20%. The total investment earnings amounted to $781,489 in the first quarter of 2021, which is a decrease of $213,163 in comparison with the first quarter of 2020. With the steepening of the yield curve, PFM is more actively utilizing their “roll-down” strategy by carefully choosing the yield curve placement. PFM seeks the opportunities to sell securities prior to maturities at a gain and reinvest them into longer maturity with higher yields.

The duration on the City’s portfolio has increased from 1.62 to 2.36 years since March of last year. Nearly 26% of the portfolio is concentrated in the 4-5 year maturity bucket with diversified maturities in between. The yield to maturity (YTM) at market indicates the average re-investment yield on all the holdings in the portfolio in the current market conditions. As long as the YTM at market remains lower than YTM at cost, the yield on the City’s portfolio will continue to fall over time. Approximately 12% of the total portfolio will be re-invested in the next year at much lower yields, which leads to decreasing interest earnings.

From the credit risk perspective, there have been no credit downgrades in the first quarter of 2021. All investments in the portfolio are closely monitored and reviewed on a regular basis. The credit quality graph shows that 92.8% of the investments in the portfolio are rated AA or better by the Standard & Poor’s credit rating agency.

PORTFOLIO PERFORMANCE 3/31/2021

3/31/2020

PORTFOLIO CHARACTERISTICS

City Interest Earnings

513,297

735,841

$(222,544)

PFM Interest Earnings

268,192

258,811

9,381

$781,489

$994,652

$(213,163)

YTD City Portfolio Yield

1.25%

1.78%

-53 bps

YTD PFM Portfolio Yield

1.53%

2.06%

-53 bps

YTD Benchmark

0.20%

1.77%

-156 bps

Total Interest Earned

City

PFM

Duration to Maturity (yrs)

2.36

2.67

Yield to Maturity at Cost

1.11%

1.48%

Yield to Maturity at Market

0.56%

0.44%

Difference

CREDIT QUALITY (S&P RATING)

ACCOUNT SUMMARY

AA+ 76.4%

City

PFM

Total

City

PFM

Total

Par Value

$177,722,346

$53,138,000

$230,860,346

Book Value

178,560,819

53,330,761

231,891,580

Market Value

180,096,502

54,445,341

234,541,843

Unrealized Gain /(Loss)

$1,535,682

$1,114,580

$2,650,262

AAA 11.0% A 0.8%

A+ 5.0%

AA1.5%

AA 5.3%

Investment Management Focus - 2021 The market expectation is that the Fed will continue to keep the interest rates low into 2023. The City will maintain a longer duration of the portfolio to take advantage of the steepening yield curve. The City will continue to utilize Local Government Investment Pools (LGIPs) for its excess cash but will keep liquidity levels at about 12% to meet daily operating needs.

Investment-grade corporate spreads are back to pre-pandemic levels and are pretty tight. However, the risk and uncertainty are still present. The City will be very selective in this sector but will look to re-invest few bonds as the current corporate bonds mature.

The municipal bonds market has been more active. There is higher number of issuers to choose from that are highly rated. As interest rates remain low many municipalities look into issuing new debt or refunding their existing bonds. With increased supply in the taxable munis market, it may be easier to get an allocation to further diversify City’s portfolio.

With the steepening of the yield curve and wider spreads on US Agencies, the City will look at adding more bullet Agencies as well as Agencies that have call provisions with a lockout period of 12 months. (Call provisions are a tool used by issuers to refinance debt at a more attractive rate. The more options the security has, the higher yield it offers). When the rates are near zero, the risk of securities being called is lower. To mitigate the risk of excessive portfolio turnover, The City will limit the allocation of callable securities to around 30% of the total portfolio.

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WE DREAM BIG AND DELIVER

Safe Community BY 12/21, OBTAIN THE SAFEST CITY DESIGNATION ACCORDING TO THE NATIONAL INCIDENT-BASED REPORTING SYSTEM (NIBRS) Annually, 80% of calls with a priority of “0” or “1” will have less than 5 minute response time By 12/21, Arvada will have a traffic accident rate lower than the national average VIOLENT CRIMES PER 1K RESIDENTS

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4/1/19 - 12/31/21 4/1/19 - 12/31/21

WE DREAM BIG AND DELIVER

Infrastructure BY 12/21, UPDATE THE WATER, SEWER, STORMWATER AND OVERALL INFRASTRUCTURE MASTER PLAN By 12/20, complete the Sewer and Stormwater Master Plans By 12/21 complete the Water Master Plans By 12/21, actions including conceptual project and operational changes to utilities programs necessary to implement the Master Plans are included in the 10 year CIP and performance budget

4/1/19 - 12/31/20 Completed 9/24/20 7/1/19 - 12/31/21

THERE WILL BE 2 OR FEWER SANITARY SEWER MAINLINE BACKUP EVENTS THAT RESULT IN RISK MANAGEMENT CLAIMS

Community and Economic Development BY 12/21, 85% OF DEVELOPMENT CUSTOMERS RATE THE DEVELOPMENT REVIEW PROCESS AS ‘GOOD’ AND/OR ‘EXCELLENT’ By 12/20, 90% of development reviews will be returned to the applicant within 15 business days By 12/20, implement a development customer service survey with at least a 50% response rate On an ongoing basis, resolve all temporary certificates of occupation (TCOs) within 6 months of issuance DEVELOPMENT CUSTOMER SURVEY

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4/1/19 - 12/31/20 Completed 1/18/21 4/1/19 - 12/31/25

WE DREAM BIG AND DELIVER

Vibrant Community and Neighborhoods BY 12/21, IMPLEMENT A TOOL KIT OF HOUSING MIX AND STYLE PLANS TO IMPROVE ACCESS TO QUALITY HOUSING AFFORDABLE FOR A BROAD RANGE OF INCOME LEVELS By 12/20, complete a list of current projects under development or planning By 12/20, complete an affordable housing assessment including incentive options and the area south of Arvada Cemetery By 12/20, create a regional strategy to address homelessness By 12/20, evaluate the Human Services Advisory Committee’s process for recommending funding

4/1/19 - 12/31/20 4/1/19 - 12/31/20 Completed 2/16/21 4/1/19 - 12/31/20

COMMUNITY SURVEY: IF YOU WERE LOOKING TO BUY A HOME IN ARVADA AND THINKING IN TERMS OF BEING ABLE TO AFFORD A PLACE TO LIVE: VALUE FOR TAX DOLLAR

Organizational and Service Effectiveness BY 6/21, IMPLEMENT A COMPREHENSIVE CITY COMMUNICATIONS AND ENGAGEMENT STRATEGY By 01/20, complete the overarching communications and engagement strategy Completed 2/9/21 By 12/20, implement external communications and engagement plans and an internal communication plan Completed 2/9/21 By 6/21, collaborate with key City partners to develop a comprehensive marketing plan for Arvada 12/2/19 - 6/30/21 By 6/21, develop a marketing plan highlighting City successes, presents information using engaging content and uses shared partner messaging 2/1/20 - 6/30/21 SEEKING RESIDENTS INVOLVEMENT AND INPUT

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