Financial Report 2012 Mid-Year
Table of Contents 2012 Overview.....................................................1 General Fund........................................................3 Arvada Center......................................................9 Parks Fund......................................................... 11 Special Revenue Funds....................................... 13 Enterprise Funds................................................. 16 Internal Service Funds........................................22 City of Arvada Investment Report..................... 25
overview
2012 OVERVIEW
2012 Overview As we close the first half of 2012, the City’s revenues are better than they have been since 2008 with the beginning of the Great Recession. In the General Fund, sales taxes for the first five months of the year are 5.62 percent more than the same period last year. Revenue related to building activity reflects the overall health of the economy and, as such, we also closely analyze those activities. As the following graph illustrates, we are beginning to see more single-family homes permitted in the City. Also, while the graph does not show this, there was one major multi-family residential development permitted at the beginning of 2012 at the Kipling area, with over 300 units.
SINGLE FAMILY PERMITS AND REVENUE $2,500,000
180 160
$2,000,000
140 120
$1,500,000
100 80
$1,000,000
60 40
$500,000
20 $-
2007
2008
2009
2010
2011
2012
GF Revenue
$1,690,476
$1,426,773
$1,175,794
$1,971,382
$1,323,638
$2,285,984
SFD Permits
72
60
24
62
75
157
1
0
Another building activity-related revenue is “tap fees.” These fees are paid by developers for each building that connects to the City’s water and waste water system. As presented later in the report, these combined revenues are 40.4 percent higher than they were at this time in 2011.
through July. The golf course revenue reflects one of the best years they have had since the mid of the last decade. Using just this data, a rational conclusion would be that the economy is finding a “new normal,” and it is slowly climbing out of any negative environment. The challenge continues to be fluctuating economic news. Unemployment is still high, the international economy is difficult to discern as to its health and the economic challenges this country is facing between the taxes and spending issues have to have long-term influences.
Water revenue has been a source of concern since the last drought in the early part of this century. First, Arvada residents are learning to conserve water. Last year was a particularly wet year. Now the area is experiencing another drought. We have not had to place any significant restrictions on water use in 2012, thereby increasing the revenue. Water consumption, as shown in the discussion of the Water Fund, is 20 percent higher than at this same period last year.
Admittedly, the fact our revenue base is grocery-store based may bode well for the City to withstand these external forces. We do expect to end the year with additional cash resources to invest in the city’s future. These investments will add to the remarkable assets being completed this year, including the Skate Park, widening of sidewalks along Wadsworth, building parks along Ralston Creek and maintaining our streets.
Golf is one area that has significantly benefitted from the moderate weather the area has had. Throughout the year, the average temperature has been 4.4 degrees warmer each month with over 55 percent less precipitation
We do expect to end the year with additional cash resources to invest in the city’s future. These investments will add to the remarkable assets being completed this year, including the Skate Park, widening of sidewalks along Wadsworth, building parks along Ralston Creek and maintaining our streets.
2
general fund
GENERAL FUND
General Fund Overview The General Fund pays for the City’s basic services. This includes police, street maintenance, planning, transportation planning, street light maintenance and costs, building activity and general administration. In addition, the General Fund also provides for the following: • Operational support to the Arvada Center • Operational support to the Parks Fund • General Debt Service payments • Transfer to the Capital Improvements Fund for new parks, transportation and other infrastructure projects
General Fund Beginning Fund Balance
Budget 2012
2012 YTD
2011 YTD
$23,065,000
$23,065,000
67,923,050
29,975,754
27,785,184
69,739,751
30,152,441
24,299,287
Section 16
300,000
300,000
-
AEDA
500,000
500,000
500,000
$70,539,751
$30,952,441
$24,799,287
1,738,333
200,000
-
-
583,000
2,490,000
-
-
39,000
-
-
Traffic Calming
250,000
250,000
-
Long Lake Ranch Restrooms
611,000
611,000
-
Other
105,650
-
-
$75,773,734
$32,596,441
$25,660,954
REVENUES EXPENDITURES Ongoing
The following table provides a comparison of budgeted cash balances, revenues and expenditures to budget and prior year amounts in the same areas.
EXPENDITURES 2012 CARRYOVERS JPPHA Section 16 Street Major Maintenance Citywide Training
Total Expenditures
3
As the table illustrates, we began the year with $23,065,000 in cash reserves. We budgeted $67,923,000 in revenues and $70,539,000 in expenditures. Since expenditures exceeded revenues, Council made a decision in 2011 to use $2,616,000 of cash reserves to balance the 2012 budget. At the end of 2011, we also had projects that were not completed in the calendar year. Since appropriations lapse at the end of the calendar year, there are requests to re-appropriate these monies in the next year to complete the projects. On May 7, 2012 the Council approved the carryover ordinance for projects that needed to be re-appropriated. These amounts are added to the 2012 budgeted expenditures. In general, revenues are in line with the budget. Sales tax, auto use tax and building revenues are all up over 2011 collections and are on pace to exceed budget estimates. Property tax and intergovernmental revenues should be close to budget estimates. General use tax is the only category that is lagging and will be monitored closely throughout the rest of the year. Expenditures are $6,935,000 more than the same period in 2011. This is due to the timing of the transfer to the Capital Improvements Fund as the transfer in 2012 for $4,875,000 was made in the second quarter 2012 compared to the fourth quarter in 2011. 2012 expenditures also reflect a transfer to JPPHA of $1,083,000 for operating expenditures and the purchase of land. The next few pages discuss the City’s revenues and expenditures in more detail.
Revenue Highlights The following section highlights the sources generated to meet the operating expenditures of the General Fund. The City’s revenue comes from many sources as illustrated in the graph below. Information about sales tax, use tax, property tax and intergovernmental revenues is detailed in the next few pages.
GENERAL FUND REVENUE
4
Sales Tax Sales tax collections in 2012 show that we continue to recover from the Great Recession. The graph below shows actual sales tax collections. Sales tax collections lag one month, therefore the 2012 collections represent sales tax collections for five months.
SALES TAX COLLECTIONS
Sales tax receipts for the first five months in 2012 are 5.62 percent above 2011 actuals. Sales tax collections are on track to exceed the 2012 budget of $36,118,000, which will be the first year that we exceed our pre-recession high in 2008.
Use Tax The City has three prime use tax types: general, building and automobile. These are taxes paid in lieu of sales tax on purchases.
USE TAX COLLECTIONS
General use tax is the only type that is lagging. Current collections are $394,000 which is down over 20 percent from the prior year. We will continue to monitor general use tax, however building and auto use tax will most likely cover the deficit in general use tax. Building use tax for 2012 is at $1,200,000, which will easily exceed the budget of $1,300,000. Both single-family attached and detached permits are up and a large assisted-living facility development also contributed to the increase in building use tax. Consumers continue to purchase vehicles. Auto use tax collections are showing a 7.5 percent increase over the previous year. Auto use tax is budgeted to increase 6.2 percent for annual collections of $4,275,000.
5
Property Tax The City’s property tax rate is 4.31 mills per $100 of valuation. In Colorado, the mill rate is placed on the assessed valuation. The following graph illustrates the collections for the past three years and the first six months of 2012.
PROPERTY TAX COLLECTIONS
Property tax is a stable revenue source for the City. The budget for 2012 is $4,550,000. At this point of the year, we are estimating our actual collections will be $4,450,000.
Intergovernmental Revenues This category is made up of 2 revenue sources, Highway Users Trust Fund (HUTF), which is the City’s share of State-collected gas tax revenue, and Road and Bridge, which is the City’s share of property tax collected by Jefferson County and dedicated to the maintenance of roads and bridges. Combined, these revenues have averaged a little over $4.5 million in the past three years. We are budgeted to receive a little more than $4.7 million in 2012. The collection rate through the first half of the year shows that we should exceed this budget by 1 INTERGOVERNMENTAL REVENUES percent or approximately $50,000. Costs of street repair continue to escalate. In 2011, we saw asphalt-related items rise 12 percent. This trend continues in 2012, with an average of an 8 percent increase. As costs continue to rise, added pressure is put on other revenue sources to help fill in the increasing shortage.
6
All Other Revenue Sources As the pie chart of General Fund Revenues illustrates, the remaining revenue sources consist of building permits, utility fees, fees we receive from other funds for general services, fees and fines and miscellaneous revenues. Investment interest earnings fall under the miscellaneous category and in the past were a healthy source of revenue, generating just over $1,000,000. Since the onset of the Great Recession, interest earnings continue to fall and the estimate for 2012 is $250,000. The last section of this report reviews the investment portfolio in detail.
Expenditure Highlights The largest expenditure in the General Fund is personnel costs which account for 47 percent of expenditures.
GENERAL FUND EXPENDITURES
7
Salary and Benefit Savings Salary & Benefits*
2012 Budget
2012 YTD
2011 YTD
Salaries & Wages
$ 26,900,997
$ 11,815,447
$ 11,462,339
(586,000)
(270,462)
-
877,161
309,713
304,225
Group Insurance
4,494,739
1,861,954
1,741,498
Retirement
3,081,596
1,387,040
1,343,867
Medicare
311,913
137,416
132,418
Temporary Wages & SS
507,855
120,439
94,600
Other
368,414
169,922
176,351
Total
$35,956,675
$15,531,468
$15,255,299
Vacancy Savings Overtime
*These figures have been adjusted to show the same number of pay periods for both years. Twelve pay periods fell within the first half of 2012, while only 11 fell within the first half of 2011. In order to make clearer personnel expenditure comparison, the totals for the first pay period in July 2011 have been added to the 2011 YTD figures. Fuel General Fund Parks Police Tax Increments Utilities Other Total Expenditures
2012 Budget
2012 YTD
2011 YTD
519,851
$ 258,588
$ 230,532
196,296
82,042
74,761
48,668
29,153
26,408
219,349
72,444
79,335
57,257
32,514
36,053
$1,041,421
$474,740
$447,089
$
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arvada center
ARVADA CENTER
Arvada Center Arvada Center
2012 Budget
Beginning FB
$
232,174
2012 YTD $
2011 YTD
232,174
REVENUES Generated
6,199,444
2,536,902
2,349,919
SCFD
1,034,000
248,321
248,791
City Cash TransferOriginal
1,218,122
609,061
591,321
City Cash TransferAdditional
425,000
212,500
1,967,270
-
-
3,606,784
$ 3,190,031
City In-Kind Transfer Total Revenues
$ 10,843,836
$
EXPENDITURES Ongoing
8,876,566
3,958,526
3,485,154
In-Kind
1,967,270
-
-
3,958,526
$ 3,485,154 (295,122)
Total Expenditures
$ 10,843,836
$
Income/(Loss)
-
(351,742)
Cash Balance
232,174
(119,568)
Goal (11% of Expenditures)
1,192,822
435,438
Excess/(Deficit)
$
(960,648)
$
With a Mission “to inspire the residents of our region to live and learn creatively by experiencing the performing arts, visual arts, educational programs, and historical exhibits”, the Arvada Center continues to focus on partnerships, collaboration, and innovation to maintain and increase programming, audience base and revenue. The Mission of the Center requires constant vigilance and balance between and amongst commercially viable, revenue producing productions, classes, and workshops and reduced cost and free offerings, as well as community-focused and accessible programs. In the first half of 2012, there were several highlights of the Center’s work to remain focused on the Mission and maintain fiduciary responsibility. Examples include the continuation of the Center’s relationship with the Lone Tree Arts Center and the touring of one production to Lone Tree; the co-production of The Twelfth Night with the Colorado Shakespeare Festival, decreasing costs for both theaters. For the first time, Education Camps were held during Spring Break, to great success, and the Galleries continued to offer award-winning exhibitions free to the public. In addition, the Center was able to secure a significant Presenting Sponsor to help underwrite some summer programming. Although the Center has increased revenue during the first half of 2012 over the first half of 2011, costs have also increased. The Performing Arts Division is a primary revenue and cost center that continues to be difficult to predict year-to-year due to market conditions,
(555,006)
9
show availability, consumer choice, and maintaining cost controls. Center staff continues to work through the challenges associated with producing theater and continues to make adjustments to better align the budget. Through the first four productions of 2012, in total, costs have outstripped revenue, although revenue and attendance is increased over the same period in 2011. Overall, 2012 shows an additional loss of $56,000 through June compared to 2011 for the same time frame. It should be pointed out that the General Fund transferred an additional $425,000 to the Center in 2011. This amount was budgeted for 2012 and is already being transferred to the Center on a monthly basis, reflected in the City Cash Transfer - Additional line. If you remove this additional monthly transfer amount, the 2012 loss through June would be at a $564,000, a $269,000 increase over 2011. However, there are two significant operational issues that do account for a major portion of the deficit showing in the first 6 months of 2012. First, there is an additional pay period in the first six months of the year as compared to 2011; therefore, payroll was approximately $200,000 greater in June of 2012 versus June of 2011. In addition, and much related to increased payroll, is the fact that the calendar was changed in 2012 to accommodate the installation of new theater seats. This change moved the summer production from July to June, further increasing May and June costs, not only in regular wages, but, due to the compressed schedule between shows, overtime and temporary wages were significantly impacted. It is anticipated that much of these increased costs will be offset by decreased costs In July and August. The Center will continue to monitor the budget and adjust accordingly.
SCFD REVENUE
Scientific and Cultural Facilities District (SCFD) grant contributions are budgeted to increase almost 6 percent compared to 2011. The SCFD is expected to contribute a little over $1 million dollars for the calendar year 2012.
CITY OF ARVADA CONTRIBUTIONS
The City of Arvada is budgeted to contribute $1,643,122 in cash support in 2012 or a 2.2 percent increase over total 2011 cash support.
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parks fund
PARKS FUND
Parks Fund Parks Fund Beginning Fund Balance
2012 Budget
2012 YTD
$ 3,794,000
$ 3,794,000
2011 YTD
REVENUES Generated Open Space APEX Reimbursement City Cash Transfer Total Revenues
$ 182,025
$
92,282
$
95,496
3,203,449
1,033,966
998,042
898,000
2,541
-
2,808,044
1,404,022
1,420,136
$ 7,091,518
$ 2,532,811
$ 2,513,674
$ 7,289,653
$ 3,008,386
$ 2,724,319
-
-
12,759
$ 7,289,653
$ 3,008,386
$ 2,737,078
(198,135)
(475,575)
(223,404)
3,595,865
3,318,425
801,862
330,922
$ 2,794,003
$ 2,987,503
EXPENDITURES Ongoing Capital Total Expenditures Income/(Loss) Ending Fund Balance Goal (11% of Total Expenditures) Excess/(Deficit)
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Revenue Highlights Generated revenue was down 3.37 percent, primarily related to a reduction in Education Classes. Open space revenue increased 3.60 percent. The City transfer was reduced by 1.13 percent in 2012 for an overall revenue increase of .76 percent.
Expenditure Highlights Total actual expenditures are 45 percent of the 2012 budget. Salaries and benefits, with overtime, are 17.9 percent higher in 2012 than the same period in 2011. Of this amount, overtime comprises $32,000 more in 2012 over 2011.
PARKS REVENUE
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special revenue fund 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 fund accounts for the .21 cent sales tax for police services and the second accounts for the .25 cent sales tax. Sources in the tax increment fund 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, the revenue trends in the tax increment fund will closely follow those in the general fund.
Revenue Highlights Sales and Use Tax revenue continues to increase over mid-year 2011, with 4.55 percent increase in Sales Tax, and 28.83 percent in Use Tax.
Expenditure Highlights Total actual expenditures are 45 percent of the 2012 budget. Salaries and benefits, with overtime, are 17.9 percent higher in 2012 than the same period in 2011. Of this amount, overtime comprises $32,000 more in 2012 over 2011.
.21 and .25 Tax Increment Funds .21 and .25 Tax Increment Funds
2012 Budget
2012 YTD
Beginning Fund Balance
$ 12,356,000
$ 12,356,000
$ 5,598,455
$ 2,369,259
$ 2,266,044
Use Tax
866,240
477,848
370,922
Other
333,000
124,708
211,145
$ 6,797,695
$ 2,971,815
$ 2,848,111
Ongoing
$ 6,911,727
$ 3,114,296
$ 2,665,402
Total Expenditures
$ 6,911,727
$ 3,114,296
$ 2,665,402
Income/(Loss)
(114,032)
(142,481)
182,709
Ending Fund Balance
$ 12,241,968
$ 12,213,519
$ 182,709
760,290
342,573
$ 11,481,678
$ 11,870,947
2011 YTD
REVENUES Sales Tax / Audit Revenue
Total Revenues EXPENDITURES
Goal (11% of Total Expenditures) Excess/(Deficit)
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Community Development Community Development Fund Beginning Fund Balance
2012 Budget
2012 YTD
$ 7,098,000
$ 7,098,000
2011 YTD
REVENUES Recovered Grants
$ 114,737
$
31,250
$
13,920
638,000
185,990
91,352
City Cash Transfer
45,000
22,500
22,500
Interest/Other
19,500
9,967
6,459
$ 817,237
$ 249,707
$
134,231
$ 454,826
$ 165,457
$
156,496
Essential Home Repairs
380,625
175,217
99,429
Loans
125,000
-
-
$ 960,451
$ 340,674
(143,214)
(90,966)
$ 6,954,786
$ 7,007,034
Total Revenues EXPENDITURES Ongoing
Total Expenditures Income/(Loss) Ending Fund Balance
$
255,925 (121,694)
Having completed a ten-year plan for effective use of the substantial fund balance over time, much of which came from the Apple Creek Repayment, Community Development will see a notable increase in expenditures over the coming years.
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Arvada Housing Authority Arvada Housing Authority
2012 Budget
2012 YTD
Beginning Fund Balance
$
390,000
$
390,000
$
19,178
$
4,716
2011 YTD
REVENUES Recovered Grants
7,464
3,900,000
1,845,164
1,865,554
26,000
-
19,004
5,464
906
721
$ 3,950,642
$ 1,850,786
$ 1,892,744
City Cash Transfer Interest/Other Total Revenues
$
EXPENDITURES Ongoing
$
Rents
380,323
$
$
181,894
2,065,072
1,948,033
28,674
23,179
22,470
$ 3,941,197
$ 2,255,856
$ 2,152,398
9,445
(405,070)
(259,654)
Income/(Loss) Ending Fund Balance
167,605
3,532,200
Transfers Total Expenditures
$
399,445
$
(15,070)
The Arvada Housing Authority currently assists just under 500 families with monthly rent subsidies. These subsidies constitute almost 90 percent of this Fund’s expenditures.
EOC ENERGY ASSISTANCE 2008-2012 Dollars (Grants) through June
The City directly receives funding from Energy Outreach Colorado (EOC), a nonprofit corporation, and disburses it to low income residents of Arvada as assistance with costs related to energy. In 2011 and 2012, the City received supplemental funding from EOC, which accounts for the increase in dollars and grants over the past two years.
15
enterprise funds
ENTERPRISE FUNDS
Enterprise Funds Overview Enterprise funds account for activities that generate a fee that makes the entity self supporting. The five enterprise funds in the City are: • • • • •
Water Fund Wastewater Fund Stormwater Fund Golf Fund Hospitality Fund
Water Fund Water Fund
2012 Budget
2012 YTD
2011 YTD
Beginning Fund Balance
$ 58,524,000
$ 58,524,000
$ 18,224,100
$ 6,075,812
$ 5,306,203
Tap Fees
3,093,671
1,733,754
1,113,787
Interest
1,154,839
290,148
382,300
790,371
705,439
20,098
$ 23,262,981
$ 8,805,153
$ 6,822,387
$ 15,001,149
$ 6,712,785
$ 6,529,105
REVENUES Water Charges
Water Fund
Other
The Water Fund accounts for all activities with the scope of the water utility operations including administration, operations, capital water projects, financing and related debt service and billing and collection.
Total Revenues
Debt Service
2,265,700
195,773
212,118
Revenue Highlights
Major Capital Maintenance
3,929,857
1,454,127
1,767,121
Capital
3,036,959
136,440
1,673,182
Total Expenditures
$ 24,233,665
$ 8,499,125
$ 10,181,525
Income/(Loss)
(970,684)
306,029
(3,359,138)
Ending Fund Balance
$ 57,553,316
$ 58,830,029
Year-to-date revenue from water sales is up by 14.5 percent. However, consumption is up nearly 20 percent over the same period, and increased revenues in the future months will continue to exceed 2011 levels.
Expenditure Highlights The increase in ongoing expenses represents the additional pay period that occurred in the first half of 2012 as compared to 2011. A pay period represents about $200,000 in expenditures.
EXPENDITURES Ongoing
16
Water Consumption This chart shows water consumption from 2007-2012. Dry conditions throughout the first half of 2012 led to substantial increases in consumption. The City has been able to meet demand because incredibly high snow pack levels in 2011 kept reservoir storage levels above historic averages into the beginning of 2012.
WATER CONSUMPTION (thousands of gallons) As of June
Water Tap Fees This chart shows a six year history of tap fees. This is the fourth year of increased tap fee collection at midyear. Residential development in the northwest of the City continues to drive the increases.
WATER FUND - TAP FEES As of June
17
Wastewater Fund
Wastewater Tap Fees
The wastewater fund accounts for all activities necessary in the collection, transmission and disposal of sewage and wastewater.
This chart shows the history of tap fees from 2007-2012. As with water tap fees, residential development in the northwest of the City continues to drive the increases.
Wastewater Fund Beginning Fund Balance
2012 Budget
2012 YTD
WASTEWATER FUND - TAP FEES
2011 YTD
As of June
$10,740,000 $10,740,000
REVENUES Sewer Charges
$10,704,387
$4,962,684
$5,150,662
Tap Fees
234,486
190,893
109,741
Interest
209,614
49,913
52,680
Other
560,683
123,083
149,853
$11,709,170
$5,326,573
$5,462,936
$6,536,367
$3,270,480
$2,944,310
Ongoing
2,859,070
1,288,131
1,319,650
Major Capital Maintenance
1,849,283
29,476
757,649
360,500
60,700
-
Total Expenditures
$11,605,220
$4,648,786
$5,021,609
Income/(Loss)
103,950
677,787
441,328
Ending Fund Balance
$10,843,950
$11,417,787
Total Revenues EXPENDITURES Metro District
Capital
Stormwater Fund The Stormwater fund accounts for all activities necessary to maintain a stormwater management plan. Stormwater Fund Beginning Fund Balance
2012 Budget
2012 YTD
2011 YTD
$10,953,000 $10,953,000
REVENUES Stormwater Fee
$ 3,119,747
$ 1,584,213
$1,648,525
66,268
42,314
40,967
$ 3,186,015
$ 1,626,527
$1,689,492
Other Total Revenues
Revenue Highlights
EXPENDITURES
Reflective of the considerable increase in building activity within the City, year-to-date tap fee revenues are up nearly 74 percent.
Ongoing
Expenditure Highlights
$ 1,158,846
42,205
$ 479,567
932,488
466,244
466,794
9,850,000
1,016,792
908,234
Total Expenditures
$11,941,334
$2,025,241
$1,854,595
Income/(Loss)
(8,755,319)
(398,713)
(165,103)
Debt Service Capital
Charges from the Metro Wastewater Reclamation District, up 11 percent year-to-date, continue to represent a majority of total expenditures for the Wastewater Fund.
Ending Fund Balance
$
$ 2,197,681 $10,554,287
Revenue Highlights The Stormwater Utility Fee, which represents 97 percent of the Fund’s total revenue, remains at rates that became effective in 2009.
Expenditure Highlights Costs related to the replacement of the Garrison Street Bridge and related channelization on Ralston Creek continue to dominate Stormwater expenditures.
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Golf Fund Golf Fund
2012 Budget
2012 YTD
$ 206,000
$ 206,000
$ 2,570,729
$ 1,542,832
$ 1,254,219
1,079,401
564,550
491,458
219,474
109,737
106,541
$ 3,869,604
$ 2,217,119
$ 1,852,218
$ 2,048,912
$ 899,911
$ 852,740
Food
955,835
512,388
444,869
Operations
860,152
366,333
530,545
9,546
9,546
-
$ 3,874,445
$ 1,788,178
$ 1,828,154
Income/(Loss)
(4,841)
428,941
24,064
Ending Fund Balance
$ 201,159
$ 634,941
Beginning Fund Balance
2011 YTD
REVENUES Golf Restaurant City Cash Transfer Total Revenues EXPENDITURES Golf
Capital Total Expenditures
Revenue Highlights Rounds at West Woods continue to increase with a 19 percent increase from 2011. Lake Arbor rounds increased 13 percent and continue to be the best valued golf course in the region. West Woods Restaurant increased revenue by 13.19 percent. Beverage increased by 16.55 percent and food by 11.34 percent. Lake Arbor Restaurant increased by 13.08 percent, beverage by 10.24 percent and food by 19.31 percent. Overall revenue increased by 19.70 percent from 2011.
Expenditure Highlights Total actual expenditures decreased by 2.19 percent from 2011. The restaurants experienced an increase due to increased use of temporary staff and inventory demands from 2011 to 2012, primarily at the West Woods Restaurant. Operations decreased by 30.95 percent due to a combination of realignment of Risk Management services, retirement of debt principal related to the golf carts transitioning from gas to electricity, and 2012 CIP projects which were prefunded and completed in 2011.
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Rounds by Type - January thru June 2011/2012 WEST WOODS
Regular
Special
Tournament
Annual
Senior
Junior
Other
Total
2011
7,711
7,087
748
2,042
1,961
469
199
20,217
2012
11,239
4,964
1,142
2,649
3,033
531
470
24,028
3,528
-2,123
394
607
1,072
62
271
3,811
46%
-30%
53%
30%
55%
13%
136%
19%
LAKE ARBOR
Regular
Special
Tournament
Annual
Junior
Other
Total
2011
6,628
4,959
692
9,016
258
490
22,043
2012
10,159
3,828
375
9,367
289
891
24,909
3,531
-1,131
-317
351
31
401
2,866
53%
-23%
-46%
4%
12%
82%
13%
20
Hospitality Fund Hospitality Fund Beginning Fund Balance
2012 Budget
2012 YTD
2011 YTD
$ 758,000
$
758,000
$ 944,776
$
473,589
$ 449,749
REVENUES Banquets Concessions
148,841
55,666
63,091
Miscellaneous
573,146
235,822
236,423
Total Revenues
$ 1,666,763
$
765,077
$ 749,263
Overhead
$ 587,282
$
139,779
$ 155,808
Operations
1,263,406
601,701
535,097
Capital
263,096
-
-
Transfer to General Fund
128,000
-
56,037
741,480
$ 746,942
(575,021)
23,597
2,321
Ending Fund Balance
182,979
781,597
2,321
Goal (25% of Total Expenditures)
560,446
185,370
EXPENDITURES
Total Expenditures Income/(Loss)
Excess/(Deficit)
$ 2,241,784
$ (377,467)
$
$
596,227
Revenue Highlights Banquets increased 5.30 percent over 2011 in events related to governments and non-profits. Concessions percentage decreased 11.77, for an overall revenue increase from 2011 by 2.11 percent.
Expenditure Highlights Overhead expenditures have decreased by 10.29 percent in 2012 versus 2011. This was caused by the elimination of the Transfer to General Fund in 2012, with those funds to be used for the purchase of equipment, which is now reflected in the budget under Capital. There was an alignment with Risk Management services from 2011 and a vacant position for salary savings in 2012. Operational-related expenditures have increased by 12.45 percent in 2012 versus 2011. This was caused by an increased use in Temporary Wages, Supplies and Expenses, and adjustment to reflect correct costing on 3 positions’ salaries and benefits from 2011.
Banquets increased 5.30 percent over 2011 in events related to governments and non-profits. Concessions percentage decreased 11.77, for an overall revenue increase from 2011 by 2.11 percent.
21
internal service
INTERNAL SERVICE FUNDS
Internal Service Funds Overview We have four Internal Service Funds. These Funds charge for goods and services to each division that uses them. 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.
Risk Management Risk Management Beginning Fund Balance
2012 Budget
2012 YTD
2011 YTD
$ 4,684,000
$ 4,684,000
$ 2,310,582
$ 1,152,032
$ 1,337,024
66,000
24,694
45,533
$ 2,376,582
$ 1,176,726
$ 1,382,557
REVENUES Transfers Other Total Revenues EXPENDITURES RM Administration
$ 1,916,248
$ 1,189,180
$ 1,011,263
603,648
283,551
234,837
$ 2,519,896
$ 1,472,731
$ 1,246,100
Income/(Loss)
(143,314)
(296,004)
136,457
Ending Fund Balance
$ 4,540,686
$ 4,387,996
RM Operations Total Expenditures
22
Overview The Insurance Fund, administered by the Risk Management Division of Finance, provides the means by which the City self-insures against loss. It is funded with contributions by all City divisions based on their levels and types of exposure. The Fund is also used for programs for loss prevention, the protection of City personnel and the preservation of City property and assets.
Revenue Highlights Due to well-managed safety and cost controls, overall charges to participating Funds were reduced by 16 percent for 2012.
Expenditure Highlights The Risk Management Division became fully staffed for the first time in a couple of years in September 2011. This is reflected in the increase in Operations expenditures in 2012. Additionally, about $170,000 in expenses related to network liability are reflected in the increased 2012 Administration expenditures.
Information Technology and Print Services Information Technology and Print Services Beginning Fund Balance
Overview 2012 Budget
2012 Actual
$ 8,679,000
$ 8,679,000
The Computers Fund provides resources for both the ongoing maintenance and replacement of the City’s computers, network hardware, and other electronic infrastructure. It is funded with contributions by all City divisions based on their levels of use of information technology. The Print Shop Fund provides ongoing capital support for the City’s printing needs.
2011 Actual
REVENUES Maintenance
$ 959,712
Replacement
$
479,856
$ 479,500
897,441
440,278
458,040
Print Shop
425,049
149,869
153,530
Total Revenues
$ 2,282,202
$ 1,070,003
$ 1,091,070
Maintenance
$ 1,259,365
$ 461,083
$ 211,601
Replacement
2,493,850
1,395,381
447,412
389,265
117,201
121,670
Total Expenditures
$ 4,142,480
$1,973,665
$ 780,683
Ending Fund Balance
$ 6,818,722
$ 7,775,338
2012 Budget
2012 YTD
$6,985,000
$6,985,000
Maintenance Transfers
$2,132,707
$1,066,354
$1,066,324
Replacement Transfers
1,095,582
547,791
545,552
379,476
86,005
75,436
$ 3,607,765
$ 1,700,150
$ 1,687,311
Revenue Highlights While contributing Funds remain consistent from 2011, Computer Replacement and Print Shop revenues were reduced in comparison to mid-year 2011 by approximately 6 percent. Computer Maintenance increased by a small percentage. Overall revenue was reduced 1.97 percent.
EXPENDITURES
Print Shop
Expenditure Highlights The phone system replacement project is in its final closing stages and the kick-off of the email system replacement has begun. There are a couple of upgrades still planned for 2012 including the continuation of the desktop virtualization program which currently has 100 users in production, and the police information systems upgrade scheduled for the end of the year. The Print Shop is replacing hardware for the plate maker and should be completed the end of 2012.
Vehicles Vehicles Beginning Fund Balance
Overview
2011 YTD
The Vehicles Fund provides resources for the maintenance of City vehicles and heavy equipment, as well as their replacement when various factors demand their retirement. It is funded with contributions by all City divisions based on their vehicle inventory and use.
REVENUES
Other Total Revenues
Revenue Highlights Charges for Fleet services remain frozen in 2012, providing relief to all contributing Funds.
Expenditure Highlights Among the replacement purchases being made in 2012 are fifteen new Ford Police Interceptor Utility Vehicles.
EXPENDITURES Maintenance
$ 2,240,356
$1,054,680
$
945,685
Replacement
2,125,820
1,132,625
1,954,959
Total Expenditures
$ 4,366,176
$ 2,187,305
$ 2,900,644
Income/(Loss)
(758,411)
(487,155)
(1,213,333)
Ending Fund Balance
$ 6,226,589
$6,497,845
23
Arvada Economic Development Association
Buildings Buildings Beginning Fund Balance
2012 Budget
2012 YTD
$ 1,654,000
$1,654,000
2011 YTD
Operations Beginning Fund Balance
REVENUES Replacement Transfers
2012 YTD
$ 429,231
$ 429,231
2011 YTD
Revenue
726,000
363,000
351,000
$ 407,351
$ 203,675
$ 203,675
Expenditures
744,029
354,380
325,413
112,849
113,579
117,656
$ 411,202
$ 437,851
$ 520,200
$ 317,254
$ 321,331
Ending Fund Balance
Other Total Revenues
2012 Budget
Revenue Highlights
EXPENDITURES Replacement
$ 766,799
$ 201,223
$ 54,057
Capital Lease
112,848
54,855
54,072
Total Expenditures
$ 879,647
$ 256,078
$ 108,128
Income/(Loss)
(359,447)
61,176
213,203
Ending Fund Balance
$1,294,553
$1,715,176
Revenue in the AEDA Operations Fund consists of a transfer from the general fund equal to the personnel and operating expenditures.
Expenditure Highlights Expenditures through June 2012 are about $29,000 higher than June 2011 due to a professional landscape study that is being performed. There will be some savings throughout the year as a revised commercial real estate newsletter was designed to save staff time and approximately $4,000 per year. AEDA staff researched, authored, designed and produced documents for marketing purposes such as the Arvada community profile, annual calendar, ad campaign, and annual report. Social media outreach grew significantly, increasing exposure for Arvada.
Overview The Buildings Fund provides resources for maintaining major portions of facility infrastructure as replacement becomes necessary. The primary types of infrastructure are HVAC equipment, parking lots, roofs, and carpet. It is funded with contributions by all City divisions based on their facility occupancy.
Program Beginning Cash Balance
Revenue Highlights Due to careful tracking and constant reevaluating of a comprehensive replacement schedule, contributions remain at 2009 levels.
Expenditure Highlights The Capital Lease expenditures represent payments per an agreement with Siemens Building Technologies in 2004 for energy efficiency improvements at various City facilities.
2012 $ 721,482
Revenue
513,566
Expenditures
(98,897)
Ending Cash Balance
1,136,151
Reserved for AEDA Loan Program
(300,000)
Reserved for Pilot AEDA Small Business Grants
(60,816)
Reserved for Job Creation Program
(25,000)
Commitments
(231,125)
Ending Unallocated Cash Balance
$ 519,210
Revenue Highlights Revenues in 2012 reflect the third $500,000 payment of the $1,500,000 transfer from the City of Arvada for the AEDA business financial assistance programs.
The primary types of infrastructure are HVAC equipment, parking lots, roofs, and carpet. It is funded with contributions by all City divisions based on their facility occupancy.
Expenditure Highlights Expenditures by mid-2012 reflect 12 pilot business grants and one financial assistance redevelopment grant. Four new loans were approved through the Colorado Enterprise Fund.
24
investment report
CITY OF ARVADA INVESTMENT REPORT
Investment Portfolio Objectives Pursuant to the City’s investment policy, the primary objectives of the City’s investment activities, in priority order, are safety, liquidity, and yield. Consistent with this policy, the portfolio of securities are invested in US Treasuries, US Agency debt, local government investment pools (LGIP’s), money market funds, and corporate debt subject to rating and concentration limits. The City’s investment portfolio is managed to provide sufficient liquidity to meet all reasonably anticipated operating cash needs without selling securities prior to maturity.
Investment Portfolio Performance For second quarter 2012, the portfolio yield was .770 percent following annual yield of 1.119 percent for 2011. The benchmark yield for the City’s portfolio is a weighted benchmark of allowable securities. For second quarter, the weighted benchmark return was .38 percent, constructed using the average of 2012 monthly returns. The table below shows a year-over-year comparison:
YTD Return YTD Benchmark Return Interest Booked YTD
June 2011
June 2012
Difference
1.130
.770
-36 basis points
.64
.38
-26 basis points
$1,184,011
$824,399
-$359,612
The City’s investment portfolio is managed to provide sufficient liquidity to meet all reasonably anticipated operating cash needs without selling securities prior to maturity.
25
Portfolio Changes- 2012 The City’s portfolio has decreased $3.2 million from December, 2011 to June, 2012. Changes in the portfolio are shown in the chart below: December 31, 2011 Balance
% of Portfolio
June 30, 2012
% of Portfolio
% of Change
$21,135,849
10.11%
$24,153,860
11.74%
+14.28%
Certificate of Deposit
19,185,915
9.18%
19,231,056
9.34%
+.002%
Corporate
21,000,000
10.05%
5,000,000
2.43%
-76.1%
LGIP
67,013,063
32.06%
49,425,322
24.01%
-26.2%
US Agency
73,700,000
35.26%
101,000,000
49.07%
+37.0%
US Treasury
7,000,000
3.34%
7,000,000
3.40%
0.00%
Security Sector Savings, Money Market
Total
$209,034,827
$205,810,238
As of June 30, 41 percent of the City’s portfolio has a maturity range of less than one year. This is due to the fact that many of our non-callable securities purchased in prior years will mature in within the next year and we anticipate a large payment for the Denver Water project in the next year. The maturity range of the City’s portfolio is shown in the graph below:
PORTFOLIO DISTRIBUTION BY MATURITY RANGE June 2012
As of June 30, 41 percent of the City’s portfolio has a maturity range of less than one year.
26
Current Investment Environment In June, the Feds announced that operation twist will be continued through 2012 which includes selling of $267 Billion of short term treasuries and purchasing the same amount of long term treasuries. This measure is being taken to keep long term rates low in an attempt to stimulate borrowing. The Feds have also announced that it is expected that interest rates will remain low through 2014. Treasury yields have decreased between 2bps and 172bps from June, 2011 to June, 2012 as shown in the graph below:
HISTORICAL TREASURY YIELDS June 2011-June 2012
We have been investing in securities with a call lock out period of six months or more to gain some yield in the portfolio. LGIP funds are currently yielding 22bps compared to 10bps at this time last year, we attempt to keep LGIP balances only to satisfy operating needs as other options provide more yield to the City. In the past six months we have invested in a money market fund that is available to governmental entities in Colorado which yields approximately 8-10bps more than the LGIP funds. We are currently keeping a $10 Million balance in the City’s bank account as we are earning a 35bps credit to off-set banking fees versus earning 22bps in an LGIP account. The investment policy allows for the investment in corporate bonds with a AA credit rating or better but we look to invest at a AA+ or better credit rating to allow for rating down-grades. It is becoming more and more difficult to find corporate bonds with AA or higher credit ratings and when found, large premiums are attached to these bonds which make purchase prohibitive for the City. We continue to look at corporate bonds and purchase when it is beneficial for the City, this is an area we will continue to monitor. The City’s portfolio has decreased $3.2 million from December, 2011 to June, 2012. Changes in the portfolio are shown in the chart below:
City of Arvada Investments as of June 30, 2012 Description
(LGIP not included)
CUSIP/Ticker
Credit Rating 3/31/2012
CHASE
N/A
16,132,480.81
12,874.97
WELLSFARGO
N/A
5,020,369.01
4,125.47
21,152,849.82
17,000.44
Face Value
Interest/ Dividends 2012
HIGH YIELD SAVINGS JPMorgan Chase Savings Wells Fargo Savings Sub Total Cash
Chart continues next page
27
City of Arvada Investments as of June 30, 2012
(continued)
CUSIP/Ticker
Credit Rating 3/31/2012
FIRSTBANK 0.5 7/27/2012
CD5343
N/A
5,023,363.31
12,414.61
FIRSTBANK 0.3 5/30/2012
CD7273
N/A
4,060,212.41
6068.94
FIRSTBANK 0.4 11/30/2012
CD7281
N/A
5,107,438.13
10,096.00
FIRSTBANK 0.7 5/3/2012
CD4673
N/A
5,040,042.14
16,561.72
19,231,055.99
45,141.27
Description
Face Value
Interest/ Dividends 2012
CERTIFICATE OF DEPOSIT
Sub Total Certificate of Deposit
CORPORATE Berkshire Hathaway Fin Corp 5 8/15/2013
084664BG5
AA+
3,000,000.00
75,000.00
General Electric Co 5 2/1/2013
369604AY9
AA+
2,000,000.00
50,000.00
5,000,000.00
125,000.00
Sub Total Corporate
US AGENCY FFCB .059 6/19/2015-12
3133EAUZ9
AAA
5,000,000.00
FFCB 0.73 10/17/2014-12
31331KF47
AAA
5,000,000.00
18,250.00
FFCB 1.45 8/3/2015-12
31331KTP5
AAA
6,000,000.00
43,500.00
FFCB 2.09 7/18/2016-12
31331KRN2
AAA
5,000,000.00
52,250.00
FFCB 3.875 11/13/2012
31331GEJ4
AAA
3,000,000.00
58,125.00
FFCB 1.0 3/8/2015
3133EAGG7
AAA
4,000,000.00
FFCB 1.36 4/4/2017-13
3133EAKP2
AAA
5,000,000.00
FHLB .50 2/24/2015
313376ZJ7
AAA
5,000,000.00
FHLB .90 8/22/2016
3133782E0
AAA
5,000,000.00
FHLB .50 3/28/2016
313378KH3
AAA
3,000,000.00
FHLB Step 9/30/2016-11
313375RT6
AAA
5,000,000.00
25,000.00
FHLB 2.125 12/28/2015
3133727K4
AAA
2,000,000.00
21,250.00
FHLB Step 10/30/2015-12
3133793H0
AAA
4,000,000.00
FHLB Step 4/12/2017-12
313378R29
AAA
3,000,000.00
FNMA 1.05 9/9/2013-11
3136FPEL7
AAA
5,000,000.00
FNMA .80 2/24/2016
3136FTM89
AAA
5,000,000.00
FNMA 1.05 10/21/2015
3136FTDG1
AAA
5,000,000.00
FNMA 1.35 3/14/2017
3136FT2R9
AAA
2,000,000.00
FNMA .60 5/29/2015-13
3136G0HP9
AAA
3,000,000.00
FNMA 1.05 11/14/2016-13
3136G0GT2
AAA
5,000,000.00
FNMA 1.25 5/17/2017-13
3136G0FS5
AAA
3,000,000.00
FNMA Step 4/26/2016-13
3136G0DZ1
AAA
3,000,000.00
FNMA 1.0 12/28/2016-13
3136FT3J6
AAA
5,000,000.00
12,500.00
FNMA Step 9/14/2016-12
3136FRV26
AAA
5,000,000.00
25,000.00
101,000,000.00
308,375.00
Sub Total US Agency
26,250.00 26,250.00
US TREASURY T-Bond 2.625 6/30/2014
912828KY5
AAA
2,000,000.00
26,250.00
T-Note 1.375 3/15/2013
912828MT4
AAA
5,000,000.00
34,375.00
7,000,000.00
60,625.00
156,384,916.21
556,141.71
Sub Total US Treasury Total
28
Finance Department • 8001 Ralston Road • Arvada, Colorado 80002 (720) 898-7120 • www.arvada.org