2012 Annual Financial Report

Financial Report 2012 Year-End

Table of Contents 2012 Overview......................................................................1 General Fund......................................................................3-7 Arvada Center....................................................................8-9 Parks Fund..................................................................... 10-11 Special Revenue Funds................................................... 12-13 Capital Improvement Fund............................................ 14-15 Enterprise Funds............................................................. 16-21 Internal Service Funds....................................................22-24 Arvada Economic Development Association....................... 25 City of Arvada Investment Report.................................26-28

overview

2012 OVERVIEW

2012 Overview The completion of the fourth quarter of 2012 was positive, much like the previous three quarters. Sales tax receipts finished the year 5.86% higher than 2011 and automobile use tax was 10.7% over 2011 following the nation’s trend of increased automobile purchases.

The City issued 321 single-family permits compared to 125 in 2011. (See the following graph.)

BUILDING REVENUE AND SINGLE-FAMILY PERMITS 350 $5,000,000

315

$4,500,000

280

$4,000,000

245

Dollars

$3,500,000

210

$3,000,000

175

$2,500,000

140

$2,000,000

105

$1,500,000

70

$1,000,000

35

$500,000 $0 GF Building Revenue Single Family (Detached) Permits

0 2007 2008 2009 2010 2011 2012 $3,220,678 $3,171,672 $4,844,389 $3,882,867 $3,428,420 $4,585,077 113

96

64

1

151

125

321

We see the benefits of increased building activity in the General Fund, Water and Wastewater Funds. In the General Fund, building use tax, building permit fees and plan review fees totaled $4.5 million in 2012, a $1.1 million increase over 2011. Water and Wastewater tap fees also increased in 2012 and are used for capital improvements in both funds.

golf cart fleet from gas to electric and to provide a face lift to both the clubhouse and restaurants at Lake Arbor and West Woods started in 2012 and will be finished by the first quarter of 2013.

The Internal Service Funds that account for the costs of the City’s insurance, vehicle purchases and maintenance, computer purchases and maintenance and building maintenance all have healthy funds balances and are accumulating monies to replace assets based on a planned replacement schedule.

Major purchases in 2012 included a new telephone system, replacement of some police vehicles with the new Ford Interceptors, and seal coats of the parking lots at City Hall, the Annex and the Arvada Center.

The Tax Increment Funds also reported increases in sales and use tax receipts similar to the General Fund. The fund balance in these funds is adequate to fund the two police substations that are planned in 2013, while still meeting the reserve goal of 11%.

The City’s three utilities, Water, Wastewater and Stormwater, all ended 2012 on a positive note. City residents used over 5.764 billion gallons of water in 2012 compared to 5.049 billion gallons of water in 2011 due to the exceptionally dry spring and summer. Total revenues in the Water Fund increased by $3.6 million over 2011, generated by higher water consumption and tap fees. In 2012, we also expected that initial payments for the Denver Water Moffat Water project would be due. This project was delayed, but we are now expecting that payments will start in 2013 upon approval of necessary permits for this project. The Wastewater Fund revenues also exceeded 2011 revenues by $1.1 million, resulting from increased sewer tap fees and sewer charges. Expenditures were in line with the budget. However, there are some timing issues with sewer main replacement work for the Gold Line, which we will need to re-appropriate in 2013 in order to complete the project. The focus of the Stormwater Fund in 2012 was the Garrison Street Bridge and channelization projects. We expected to spend $9.8 million in 2012.

At the end of 2012, only $5.5 million was paid, so there will also be monies that require re-appropriation in 2013. This project is expected to be completed in the spring of 2013.

The only dim light in the financial pictures is the level of interest earnings. As in the previous two years, the City’s interest revenues continue to fall. However, due to the low interest rate environment, the City will be able to refinance the outstanding Series 2003 Sales and Use Tax Bonds in the first quarter of 2013. Refinancing these bonds will enable the City to realize over $500,000 in savings through decreased debt service payments.

Fitch assigns a “AAA” rating to the 2013 Sales and Use Tax Bonds based on the City’s strong financial position, characterized by large reserves, ample liquidity, and resilient revenue sources.

As we close the books for 2012, the story of the City’s finances is a positive one. We completed the City’s first ten-year financial plan, emphasizing the strategy of Taking Lasting Care, Building on the Base and Building for the Future. There are many programs and projects that are currently underway and planned for the future that will prepare the City for the upcoming changes with police community substations, the arrival of the Gold Line, and completion of the Northwest area of the City. The ten-year plan, along with the City’s conservative budgeting philosophy, will help to ensure that services to the citizens are maintained.

2012 was also a good year for the Golf Fund. Revenues are $510,000 higher than 2011. Rounds of play were up 11.5%. The additional revenues in the Golf Fund helped to fund some needed capital maintenance items of the courses. The projects to convert the entire

Fitch assigns a “AAA” rating to the 2013 Sales and Use Tax Bonds based on the City’s strong financial position, characterized by large reserves, ample liquidity, and resilient revenue sources.

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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

2012 Revised (10-Year Plan)

Budget 2012

2012 Actual

Beginning Fund Balance

$23,065,000

$23,065,000

$23,065,000

REVENUES

$63,883,931

$66,536,824

$68,301,048

$65,700,632

$66,562,219

$65,405,243

JPPHA

300,000

2,038,333

1,128,333

AEDA

500,000

500,000

500,000

EXPENDITURES Ongoing One Time

The following table provides a comparison of budgeted fund balance, revenues and expenditures to actual amounts in 2012. We have included the original 2012 budget adopted in October 2011 and the 2012 revised budget, which was a result of the ten-year financial planning model that was completed in the third quarter 2012.

Long Lake Ranch restrooms

-

611,000

611,000

Traffic Calming

-

250,000

250,000

Supplemental Appropriation

-

541,352

541,352

$66,500,632

$70,502,904

$68,435,928

JPPHA

-

-

910,000

Carryovers to 2013

-

-

270,903

2012 Expenditures Money Dedicated for 2013

Gold Line parking

-

-

2,500,000

Total Expenditures

$66,500,632

$70,502,904

$72,116,831

Ending Fund Balance

$20,448,299

$19,098,920

$19,249,217

17% of Expenditures

11,305,107

11,985,494

11,985,494

-

7,113,426

7,263,723

Use of cash to balance 2013-2018

3

As the table illustrates, we began the year with a $23,065,000 fund balance and, after completing the ten-year financial plan, anticipated ending 2012 with a fund balance of $19,098,920.

Expenditures increased due to unfinished projects in the 2011 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 addition, on December 3, 2012, Council approved a supplemental appropriation that added $541,352 for unexpected expenditures incurred throughout the year.

At the end of 2012, city staff reviewed the 2012 project budgets and determined there were monies in the 2012 budget for projects that will be completed in 2013 that totaled $1,180,526. The majority of these funds relate to JPPHA ($910,000) and completion of a small section of the street maintenance project that could not be completed in 2012 ($163,721). In addition, during the capital improvement planning process, Council set aside $11,500,000 for Gold Line parking requirements. $9,000,000 was a loan from the Wadsworth corridor monies, $1,500,000 from RTD, and $2,500,000 from the excess fund balance from 2012. These amounts are shown in the table as “Money Dedicated for 2013” and will be presented for Council’s approval in the carryover ordinance in April.

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

Other 17%

Property Tax 7% Sales Tax 52%

Use Tax 2% Auto Use Tax 7%

Building Use Tax & Permits 6% Court Fines and Fees 3% Franchise Fees 6%

4

Interest 0%

Sales Tax SALES TAX COLLECTIONS

Sales tax collections in 2012 exceeded the prior year collections by 5.8% and also exceed pre recession sales tax levels.

$40,000,000 $35,000,000 $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $-

2008 $35,945,909

2009 $34,584,747

2010 $34,776,789

2011 $35,852,374

2012 $37,954,667

Use Tax

Grocery chain sales, which are a stable sales tax resource in the City, grew 10.8% in 2012, due to the renovation of a large grocery store and the opening of a new store. We have also seen an increase in all three categories of fast food, fast casual and restaurants, showing that people are spending more money on eating out. General department stores also showed an increase of 5.47% over 2011. The only area of concern was the utilities category, which decreased 2.72% from 2011, showing the effects from the warm winter temperatures.

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 $9,000,000 $8,000,000

Nationally, vehicles sales were up in 2012 and the City saw the same trend as auto use tax increased 10.7% over 2011 collections. In 2012, the City saw the largest number of single family permits issued in the last five years which contributed to strong building use tax collections. General use tax was a concern throughout 2012, finishing the year down about 6.5% from the budget estimates.

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

2008

2009

2010 Building

Auto

2011

2012

General

Property Tax The City’s property tax rate is 4.31 mills per $100 of valuation. In Colorado, the mill is placed on the assessed value. Property tax collections in 2012 were $49,624 less than budget. While this is a small amount of the overall City revenue, 7%, it is a very stable source of revenue for the City.

PROPERTY TAX COLLECTIONS $5,000,000 $4,500,000 $4,000,000

Property Tax Revenue

$3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $-

2008 $4,718,719

2009 $4,770,519

2010 $4,637,622

2011 $4,643,015

5

2012 $4,500,376

Intergovernmental Revenues This category is made up of two revenue sources, Highway Users Trust Fund (HUTF), which is the City’s share of State collected gas tax revenue, and Road and Bridge, which is the City’s share of property tax collected

by Jefferson County and dedicated to the maintenance of roads and bridges. Combined these revenues have averaged a little over $4.5 million in the past three years. In 2012, we received $4.67 million or about 1% less than our budget. Both revenue sources were up from 2011 and we think this is a sustainable trend. Costs of street maintenance do continue to escalate. In 2011, we saw asphalt related items rise 12% .

This trend continues in 2012, with an average of a 9% increase. As costs continue to rise, added pressure is put on other revenue sources to help fill in the increasing shortage.

INTERGOVERNMENTAL REVENUES

$5,000,000 $4,500,000 $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0

2009

HUTF

2010

2011

Jefferson County

2012

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. Since the onset of the Great Recession, interest earnings continue to fall and in 2012 generated about $273,000. 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 51% of expenditures.

GENERAL FUND EXPENDITURES Supplies and Expenses 7%

Misc 1%

Services and Charges 9%

Debt Service 7%

Personnel 51%

Contracts 12%

Transfers 13%

6

Salary and Benefit Savings PERSONNEL

2012 Budget

2012 Actual

Salaries & Wages

$26,900,997

$26,015,957

Vacancy Savings

(1,086,000)

(1,086,000)

877,161

736,065

Group Insurance

4,494,739

4,134,460

Retirement

3,081,596

3,055,856

Medicare

311,913

304,837

Temporary Wages & SS

516,355

371,397

Other

368,414

357,573

Total

$35,465,175

$33,890,145

Overtime

Three Divisions represent the substantial increase in temporary wage costs: Information Technology’s use of temps for vacancy coverage, Building Inspection’s use of temps to manage increased workload due to the rise in building activity, and Traffic Engineering’s use of temps for the Olde Town parking study.

Fuel General Fund Parks Police Tax Increments Utilities Other Total Expenditures

7

2012 Budget

2012 Actual

$519,851

$494,213

196,296

162,603

48,668

54,967

222,008

131,022

88,052

87,216

$1,074,875

$930,021

arvada center

ARVADA CENTER

Arvada Center Arvada Center Beginning Fund Balance

2012 Budget $

232,174

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 2012, the Arvada Center gained recognition for a number of accomplishments and new initiatives. The Performing Arts Division won the Henry Award for Best Season by a Theater Company, the Education Division introduced Spring Break Camps to the area and had a resounding success, and the Galleries completed one of their most ambitious and recognized series of exhibitions in the 37-year history of the Arvada Center, just to name a few.

2012 Actual $

232,174

REVENUES Generated

$ 6,199,444

$ 5,446,139

SCFD

1,034,000

1,026,866

City Cash Transfer-Original

1,218,122

1,218,122

725,000

625,970

1,967,270

2,097,497

$11,143,836

$10,414,594

$ 8,876,566

$ 8,317,097

1,967,270

2,097,497

$10,843,836

$10,414,594

Income/(Loss)

300,000

(0)

Cash Balance

532,174

232,174

1,192,822

1,145,605

$(660,648)

$(913,432)

City Cash Transfer-Additional City In-Kind Transfer Total Revenues EXPENDITURES Ongoing In-Kind Total Expenditures

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

The Center’s impact on the community and the region continues to grow through summer programming, collaboration, and partnerships. The relationships continued with Creede Repertory Theatre, Lone Tree Arts Centers, and numerous other cultural institutions. In addition, the Center, with the support of the City Council, embarked on a process to examine the overall structure of the Center and determine if there may be a better way to move the Center forward in the coming years. This effort has taken shape in the form of the Ad Hoc Task Force, meeting throughout the spring of 2013.

2012 was a volatile year for revenues at the Center. Due to this volatility, the Center did request and receive a supplemental

8

appropriation to address a shortfall in revenues. The Center requested $300,000; however, after all year-end revenues and expenditures were accounted, the final amount needed was $200,970.

The primary reason for the financial gap is reduced revenue as overall expenditures grew by only 2%. Revenue did grow by 7.66% and 9% in Education and Development, respectively, in 2012, but the largest driver in the revenue gap was performing arts. Performing arts revenue was down 6.6% in 2012. Specifically, two major musicals performed below expectations. The musicals, Chess (part of the 2011 – 2012 theater season) and Dirty Rotten Scoundrels (part of the 2012 – 2013 SCFD Revenue theater season) combined to perform approximately $225,000 below initial projections. With regard to Chess, only 71% of the capacity of the theater was $1,200,000 sold. This was primarily due to a lack of single ticket $1,000,000 $800,000 sales as compared to other shows during the 2011 – $600,000 2012 season. With regard to Dirty Rotten Scoundrels, $400,000 only 60% of capacity was utilized. Dirty Rotten $200,000 Scoundrels was very well received by audiences and $0 critics; however, ticket sales were very slow. This was 2009 2010 2011 2012 experienced throughout the region at theaters and concert venues this fall. It should be noted that there were several specific cost reductions made to the production of Dirty Rotten Scoundrels, including a decrease in the number of actors cast (from 30 to 23); however, the decrease was not enough to offset the subpar sales. In addition to a lack of single ticket sales, subscriptions for the 2012 – 2013 season are down as compared to 2011-2012.

With a supplemental appropriation of $200,000 in 2012, the total cash operating support given to the Arvada Center by the General Fund was $1,843,000. Last year that support was $1,643,000, City of Arvada Contributions and over the last six (6) years that support has averaged approximately $1,870,000. $4,000,000 $3,500,000 $3,000,000 $2,500,000

2010

$2,000,000

2011

$1,500,000

2012

$1,000,000 $500,000 $0

Cash

In-Kind

Total

9

Total support, cash and in-kind, from the General Fund, including the $500,000 shown for rent, and the remainder of the support services provided by the City, will equal approximately $3,810,270. Last year that support was approximately $3,575,000, and over the last six (6) years that support has averaged approximately $3,877,835, or approximately 5.75% of the General Fund.

parks fund

PARKS FUND

Parks Fund Parks Fund Beginning Fund Balance

2012 Budget

2012 Actual

$4,047,373

$4,047,373

$

$

REVENUES Generated Open Space

182,025

175,878

3,203,449

3,312,980

898,000

880,906

City Cash Transfer

2,808,044

2,790,916

Total Revenues

$ 7,091,518

$ 7,160,680

$ 7,089,653

$ 6,965,841

200,000

200,000

$ 7,289,653

$ 7,165,841

(198,135)

(5,161)

3,849,238

4,042,212

801,862

788,243

$3,047,376

$3,253,969

APEX Reimbursement

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

10

Revenue Highlights Jefferson County Open Space revenue, the main source of revenue for the Parks Fund, increased 5% over 2011 actuals, while the city cash transfer to the Parks Fund increased 1.8%. Earned income from the Majestic View Nature Center was similar to 2011 actuals. Total Parks Fund revenues, when comparing 2012 original budget to 2012 actuals, are 1% above budget.

Expenditure Highlights Total actual expenditures are 6.2% more in 2012 compared to 2011 as a result of the increased use of temporary staff, overtime and program expenses.

PARKS REVENUE

4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0

Open Space As of YE 2010

Cash Transfer As of YE 2011

11

APEX As of YE 2012

special revenue funds SPECIAL REVENUE FUNDS

Special Revenue Funds Overview Special Revenue Funds account for revenues that are to be used for specific purposes. The following 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 voterapproved 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 Revenue numbers continue to steadily increase through year-end 2012 with Sales Tax/Audit revenue up 5.66%, from $5,664,005 in 2011 to $5,984,582 in 2012. Use Tax revenue was up 10% over 2011 actuals, from $1,172,604 in 2011 to $1,291,014 in 2012. Recovered Costs in 2012 (onetime miscellaneous reimbursements from outside agencies) continued to decline over 22% through the end of 2012.

Expenditure Highlights Salaries and benefits increased 7.92% over 2011. Police Officer positions are filled at 96%. Total actual expenditures for year-end 2012 are at 99.39% of budget. The fund balance increased $524,232 in 2012. However, we will see the fund balance decrease in 2013 with the construction of two police community substations.

.21 and .25 Tax Increment Funds .21 and .25 Tax Increment Funds

2012 Budget

2012 Actual

Beginning Fund Balance

$ 12,356,000

$ 12,356,000

$

$

REVENUES Sales Tax / Audit Revenue Use Tax

5,598,455

5,984,582

1,084,240

1,291,014

216,340

168,228

$ 6,899,035

$ 7,443,825

Ongoing

$ $6,962,397

$ 6,919,593

Total Expenditures

$6,962,397

$6,919,593

(63,362)

524,232

$12,292,638

$12,880,232

Goal (11% of Total Expenditures)

765,864

761,155

Excess/(Deficit)

$11,526,774

$12,119,076

Other Total Revenues EXPENDITURES

Income/(Loss) Ending Fund Balance

12

Community Development Community Development Fund Beginning Fund Balance

Arvada Housing Authority

2012 Budget

2012 Actual

Arvada Housing Authority

$ 7,098,000

$ 7,098,000

Beginning Fund Balance

2012 Budget

2012 Actual

$ 390,000

$

390,000

$

$

12,118

REVENUES

REVENUES Recovered

$

114,737

Grants

$

132,348

Recovered Grants

638,000

336,151

City Cash Transfer

45,000

45,000

Interest/Other

19,500

17,603

$ 817,237

$ 531,103

$

$

Total Revenues Ongoing

454,826 380,625

296,827

Loans

125,000

-

$ 960,451

$ 710,140

(143,214)

(179,037)

$6,954,786

$6,918,963

Total Expenditures Income/(Loss) Ending Fund Balance

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

The Loans line item provides for appropriation in the event that opportunities arise for assistance related to multifamily housing. Since no such opportunities arose in 2012, the Loans line had no expenditures.

Among the ongoing expenditures is funding for primary nonprofits who serve disadvantaged Arvada residents each year. Additionally, a considerable amount of federal Community Development Block Grant (CDBG) funding has been reserved for use reconstructing Memorial Neighborhood Park in 2013.

$50,000 $40,000

(113)

(119)

(83) (83)

$30,000

(67)

$20,000 $10,000 $0 Dollars

2008 $31,514

2009 $22,026

2010 $24,309

80,000

5,464

1,857

$3,950,642

$3,747,876

$

$

355,323

394,520

3,532,200

3,488,481

53,674

50,627

$3,941,197

$3,933,629

9,445

(185,752)

$ 399,445

$ 204,248

As of the end of 2012, the Arvada Housing Authority assisted 480 families with rent subsidies on a monthly basis. These subsidies constitute nearly 90% of this Fund’s expenditures.

EOC ENERGY ASSISTANCE 2008-2012 Dollars (Grants) $60,000

26,000

EXPENDITURES

413,313

Essential Home Repairs

3,653,901

Interest/Other Total Revenues

19,178 3,900,000

City Cash Transfer

EXPENDITURES

Total Dollars

s

2011 $48,800

13

2012 $52,000

The City directly receives funding from Energy Outreach Colorado (EOC), a nonprofit corporation, and disburses it to low income residents of Arvada as assistance with costs related to energy. In 2011 and 2012, the City has received supplemental funding from EOC, which accounts for the increase in dollars and grants over the past two years.

capital improvement CAPITAL IMPROVEMENT FUND

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

Revenue Highlights In 2012, the majority of the revenues in the Capital Improvement Project (CIP) fund consisted of transfers from the General Fund, Construction Fund and Lands Dedicated Fund.

Other revenues include park development fees, grant revenue and contributions from other governmental agencies.

Expenditure Highlights The majority of expenditures in this fund in 2012 relate to the construction of various park projects. Some of the park projects include Wolff, Forest Springs, Sunrise Ridge, Saddlebrook, Four Acre and Thundercloud parks. Park staff also completed the Shelter at Indiana Esquestrian and 80th Avenue medians as well as renovations of Davis Lane and Westwoods parks. Two major transportation projects included the Olde Town streetscape project and the Sheridan bridge. There was also the purchase of land needed for parking at the future Olde Town station for the Gold Line.

Reserved Funds The CIP fund ended 2012 with a fund balance of $39 million and has confirmed grant revenues of $4 million that will be received upon completion of the projects. Reserved projects total approximately $43 million.

14

Capital Improvement Fund

2012 Budget

2012 Actual

Beginning Fund Balance

$38,822,184

$38,822,184

$10,505,777

$11,641,532

1,600,000

1,099,776

$12,105,777

$12,741,308

CIP Administration

$ 3,362,116

$ 927,057

CIP Street Projects

3,992,047

2,144,288

CIP Traffic Projects

6,047,052

1,743,429

11,038,834

6,923,673

310,000

238,630

Total Expenditures

$24,750,049

$ 11,977,077

Ending Fund Balance

$26,177,912

$39,586,415

REVENUES Transfers in Other revenue Total Revenues EXPENDITURES

CIP Park Projects CIP Arvada Center Projects

Anticipated Grant Revenue

$ 4,078,005

ASSIGNED FOR PROJECTS: CIP Administration

$16,929,648

CIP Buildings

3,494,822

CIP Street Projects

7,360,530

CIP Traffic Projects

6,391,617

CIP Park Projects

8,179,690

CIP Arvada Center Projects

338,814

8% Reserve

958,166

Total Assigned for Projects

$43,653,287

Ending Fund Balance

$

15

11,133

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 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 Annual revenues from water sales were up by 14.0% over 2011 totals, with consumption up 14.1% over the same period.

Expenditure Highlights The substantial difference between the Capital budget and the Capital expenditures stems from Gross Reservoir. For 2012, the City had budgeted $2.5 million for Gross Reservoir Expansionrelated costs, but the project saw no City expenditures for the year. As for the Major Capital Maintenance budget, approximately $300,000 of Gold Line-related water main work in railroad rightof-way planned for 2012 will be completed and billed in 2013.

Delays and postponements related to other planned 2012 projects account for the remaining budget-to-actual difference.

Water Bonds Fitch Ratings performed an annual review of the Water Enterprise Bonds, Series 2009, and affirmed the “AAA” rating for these bonds. In arriving at the stable outlook for the Water Enterprise Bonds, Fitch cited a strong financial profile, low debt levels, solid management and a stable local economy as key rating drivers.

Water Fund Water Fund

2012 Budget

2012 Actual

$ 58,524,000

$ 58,524,000

$ 18,224,100

$ 19,717,158

Tap Fees

3,093,671

4,378,473

Interest

1,154,839

537,263

Beginning Fund Balance REVENUES Water Charges

Other

790,371

1,424,771

$23,262,981

$26,057,665

$14,986,506

$15,272,587

Debt Service

2,265,700

2,257,346

Major Capital Maintenance

3,944,500

3,093,631

Capital

3,036,959

114,720

$24,233,665

$20,738,283

(970,684)

5,515,007

$57,553,316

$64,039,007

6,998,452

6,848,901

$50,554,865

$56,994,481

Total Revenues EXPENDITURES Ongoing

Total Expenditures Income/(Loss) Ending Fund Balance Goal (25% of Ops+Debt Svc) Excess/(Deficit)

16

Water Consumption This chart shows annual water consumption since 2008. Historically dry conditions led to substantial increases in consumption.

WATER CONSUMPTION

Thousands of Gallons

(Thousands of Gallons)

6,000,000 5,600,000 5,200,000 4,800,000 4,400,000 4,000,000 3,600,000 3,200,000 2,800,000 2,400,000 2,000,000 1,600,000 1,200,000 800,000 400,000 -

2008 Water Consumption 5,437,028

2009 4,577,112

2010 5,150,842

2011 5,049,729

2012 5,700,412

Water Tap Fees This chart shows a history of annual water tap fee collections since 2008. The substantial increase of 83% in 2012 reflects the considerable increase in residential building activity.

Dollars

WATER FUND - TAP FEES $4,400,000 $4,000,000 $3,600,000 $3,200,000 $2,800,000 $2,400,000 $2,000,000 $1,600,000 $1,200,000 $800,000 $400,000 $0

2008 Tap Fees $2,227,346

2009 $1,185,036

2010 $1,785,928

17

2011 $2,394,111

2012 $4,378,473

Wastewater Fund

Wastewater Fund

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

Wastewater Fund

2012 Budget

2012 Actual

Beginning Fund Balance

$10,740,000

$10,740,000

$10,704,387

$10,075,096

Tap Fees

234,486

834,078

Interest

209,614

95,260

Revenue Highlights

REVENUES

Illustrative of the considerable increase in building activity within the City, tap fee revenues for 2012 were up nearly 143% over 2011 totals.

These figures include many, but not all, of the wastewater tap fees for the Arvada Station development.

Sewer Charges

Other Total Revenues

560,683

624,334

$11,709,170

$11,628,768

$6,536,367

$6,540,959

EXPENDITURES

Expenditure Highlights

Metro District

Approximately $800,000 of Gold Line-related sewer main replacement work in railroad right-ofway planned for 2012 will be completed and billed in 2013. Charges from the Metro Wastewater Reclamation District represent over 63% of all expenditures in 2012.

Ongoing

2,900,070

2,688,896

Major Capital Maintenance

1,808,283

1,003,145

360,500

105,086

$11,605,220

$10,338,087

103,950

1,290,681

$10,843,950

$12,030,681

2,811,180

2,558,250

$ 8,032,770

$ 9,472,431

Capital Total Expenditures Income/(Loss) Ending Fund Balance Goal (25% of Op. Exp.) Excess/(Deficit)

Wastewater Tap Fees This chart shows a history of annual wastewater tap fee collections since 2008. As with water tap fee collections, the substantial increase in 2012 reflects the considerable increase in residential building activity.

Due to its location, the Arvada Station development falls within the City’s wastewater system, but its water service is provided by the Valley Water District.

This is a reason for the greater increase in wastewater tap fee collections in 2012 as compared to water tap fee collections.

Dollars

WASTEWATER FUND - TAP FEES $840,000 $800,000 $760,000 $720,000 $680,000 $640,000 $600,000 $560,000 $520,000 $480,000 $440,000 $400,000 $360,000 $320,000 $280,000 $240,000 $200,000 $160,000 $120,000 $80,000 $40,000 $0 Tap Fees

2008 $242,368

2009 $128,576

2010 $232,062

18

2011 $343,561

2012 $834,078

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

Stormwater

2012 Budget

2012 Actual

Beginning Fund Balance

$10,953,000

$10,953,000

$3,119,747

$3,152,909

66,268

2,888,904

$3,186,015

$6,041,813

$1,158,846

$1,050,716

932,488

932,490

10,650,000

5,428,119

$12,741,334

$7,411,325

Income/(Loss)

(9,555,319)

(1,369,512)

Ending Fund Balance

$1,397,681

$9,583,488

Goal (25% of Ops + Debt Svc)

1,222,200

1,195,169

Excess/(Deficit)

$175,482

$8,388,319

REVENUES Stormwater Fee Other Total Revenues EXPENDITURES Ongoing Debt Service Capital Total Expenditures

Revenue Highlights In August, $1.98 million was transferred from the Drainage Fund to the Stormwater Fund. These funds, comprised of Unit Drainage Fees (or UDFs, last collected in 2003) and interest, reimbursed the Stormwater Fund for work completed by the Stormwater Utility within the drainage basins for which the UDFs were paid. In addition, the City received just over $600,000 in reimbursements from the Urban Drainage and Flood Control District (UDFCD) for drainage improvements associated with the Garrison Street Bridge Replacement.

Expenditure Highlights Costs related to the replacement of the Garrison Street Bridge and related channelization on Ralston Creek represented nearly 58% of all Stormwater expenditures in 2012. As of the end of 2012, the Stormwater Utility’s Garrison project was over 50% done. However about $4,379,000 will need to be carried over into the 2013 budget. Due to some add-ons to the project, completion is expected in April 2013, weather permitting. An additional $800,000 was spent on the City’s share of costs pertaining to the Ridge Road Tributary pursuant to an IGA with UDFCD and the City of Wheat Ridge.

19

Golf Fund Golf Fund

2012 Budget

2012 Actual

$ 206,000

$ 206,000

$ 2,868,767

$ 3,076,259

1,151,363

1,189,846

City Cash Transfer

219,474

265,043

Total Revenues

$4,239,604

$4,531,148

Beginning Fund Balance REVENUES Golf Restaurant

EXPENDITURES Golf

$ 2,041,579

$ 2,052,284

Food

1,122,922

1,186,173

Operations

769,103

768,978

Capital

310,841

76,897

$4,244,445

$4,084,332

(4,841)

446,816

$ 201,159

$ 652,816

Total Expenditures Income/(Loss) Ending Fund Balance

Revenue Highlights Total earned revenue from Golf and Restaurant operations increased 12% over 2011 actuals, from $3,807,574 to $4,266,105, a difference of $458,531. Revenue growth was fueled by an 11.5% increase in total rounds played at city golf courses: 104,281 in 2012 compared to 93,533 in 2011. West Woods Golf Club was named Best Golf Course in Jefferson County in a Colorado Community Media reader’s poll.

Expenditure Highlights Total actual expenditures increased $33,650 in 2012, from $4,050,682 in 2011 to $4,084,332 in 2012 as the increase in Golf and Restaurant revenues were re-invested into turf maintenance and capital improvements projects, most notably a new maintenance building at West Woods Golf Club and the conversion from gas to electric golf cart fleet. These projects were not completed in 2012 and monies necessary to complete them will be carried forward to 2013.

Rounds by Type - January thru December 2011/2012 WEST WOODS

Regular

Special

Tournament

Annual

Senior

Junior

Other

Total

2011

18,606

14,530

2,535

4,544

4,930

934

525

46,604

2012

23,875

10,633

3,040

5,982

7,486

1,039

1,283

53,338

5,269

-3,897

505

1,438

2,556

105

758

6,734

28%

-27%

20%

32%

52%

11%

144%

14%

LAKE ARBOR

Regular

Special

Tournament

Annual

Junior

Other

Total

2011

13,659

11,207

1,661

18,695

481

1,226

46,929

2012

20,176

6,969

1,348

19,595

617

2,238

50,943

6,517

-4,238

-313

900

136

1,012

4,014

48%

-38%

-19%

5%

28%

83%

9%

20

Hospitality Fund Hospitality Fund Beginning Fund Balance

2012 Budget $ 758,000

2012 Actual $

758,000

$

932,006

REVENUES Banquets

$

944,776

Concessions

148,841

131,925

Miscellaneous

573,146

433,266

$1,666,763

$1,497,197

$ 587,282

$ 285,388

1,263,406

1,272,724

Capital/Equipment

263,096

24,533

Transfer to General Fund

128,000

-

$2,241,784

$1,582,644

Income/(Loss)

(575,021)

(85,447)

Ending Fund Balance

182,979

672,553

560,446

395,661

Total Revenues EXPENDITURES Overhead Operations

Total Expenditures

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

$ (377,467)

$

Revenue Highlights Total fund revenue decreased $54,337 or 3.6% in 2012 compared to 2011 actuals: $1,497,197 in 2012 compared to $1,551,534 in 2011. This decrease is attributed to a decrease in concession sales at the Arvada Center and Stenger Sports Complex.

Expenditure Highlights Total actual expenditures decreased in 2012: from $1,700,589 in 2011 to $1,582,644 in 2012, a decrease of 7.45%. Less monies were spent on salaries, benefits and inventory in 2012 compared to 2011. Capital/Equipment and the Transfer to General Fund monies in 2012 were to be used for both a kitchen and banquet replacement project and a ceiling and flooring replacement project. To schedule the project, the facility will need to be closed for one month in order to complete the work. Therefore the projects are now scheduled to take place in 2013.

276,892

Major projects, including kitchen and banquet replacement and ceiling and flooring replacement, will take place in 2013. This will require a one-month facility closure for completion of this work.

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 Overview Risk Management

2012 Budget

2012 Actual

Beginning Fund Balance

$ 4,684,000

$ 4,684,000

$ 2,310,582

$ 2,061,825

66,000

71,577

$2,376,582

$2,133,402

$ 2,016,248

$ 1,794,018

603,648

605,771

$2,619,896

$2,399,789

$(243,314)

$(266,387)

$4,440,686

$4,417,613

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.

REVENUES Transfers Other Total Revenues

Revenue Highlights Transfers came in under budget due to the suspension of Risk Management Operations charges to all Funds for the final quarter of 2012. It was determined mid year that the Insurance Fund could forego the revenue, saving all Funds a total of $242,239 for the year.

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

Expenditure Highlights Administration expenditures include $170,000 in costs related to network liability and $113,000 relating to the remodeling of PD’s Dispatch area. There were also $18,000 in Professional Services expenditures in Operations as part of an in-depth analysis of the Insurance Fund. *Per GASB Statement 10, an additional $1,486,072 in cash is currently held in the Risk Management Fund to cover potentially incurred liabilities as of the beginning of the year. This figure was reached by Risk Management’s actuary.

22

Information Technology and Print Services Overview

Information Technology and Print Services

2012 Budget

2012 Actual

Beginning Fund Balance

$ 8,679,000

$ 8,679,000

Maintenance

$959,712

$959,712

Replacement

897,441

898,168

Print Shop

425,049

296,687

$2,282,202

$2,154,567

Maintenance

$1,259,365

$817,486

Expenditure Highlights

Replacement

2,493,850

1,666,761

389,265

263,714

Total Expenditures

$4,142,480

$2,747,961

Income (Loss)

$(1,860,278)

$(593,394)

Ending Fund Balance

$6,826,722

$8,093,606

The majority of replacement monies spent in 2012 were related to the replacement of the current phone system software with a VoIP -based Unified Communication System (UCS). The project cost was $807,000 and was completed on time with minimal impact to the City’s workflow.

Both the computer replacement and maintenance lines are below budget as the CAD, Records Management System upgrade and budget software replacement scheduled in 2012 have been delayed until 2013. $1,138,000 for those projects will be carried forward into 2013.

The Computer 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.

REVENUES

Total Revenues

Revenue Highlights Print Shop revenues and expenses are both well below projections.

However, revenues exceed expenditures by $32,973. The Print Shop is maintaining a fund balance slightly above $100,000, which will be drawn down by about $28,000 in early 2013 with the purchase of a new platemaker.

EXPENDITURES

Print Shop

Vehicles Vehicles Beginning Fund Balance

2012 Budget

Overview

2012 Actual

$6,985,000

$6,985,000

Maintenance Transfers

$2,132,707

$2,132,707

Replacement Transfers

1,095,582

1,095,582

379,476

86,517

$3,607,765

$3,314,806

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 at 2011 levels and Vehicle Maintenance charges in 2012 are level with 2011 charges, though 2013 charges will increase by 3%.

Expenditure Highlights

EXPENDITURES Maintenance

$2,350,309

$2,241,455

Replacement

2,015,867

1,553,501

$4,366,176

$3,794,957

(758,411)

(480,150)

$6,226,589

$6,504,850

Total Expenditures Income/(Loss) Ending Fund Balance

In 2012, Fleet purchased 38 new vehicles, 21 pieces of equipment, and executed leases on eight motorcycles.

23

Buildings Buildings

2012 Budget

2012 Actual

Beginning Fund Balance

$ 1,654,000

$1,654,000

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.

REVENUES Replacement Transfers

$

Other Total Revenues

407,351

$

407,351

112,849

119,536

$520,200

$526,887

Revenue Highlights Due to careful evaluation, prudent deferments, and constant reevaluating of a comprehensive replacement schedule, contributions remain at 2011 levels.

EXPENDITURES Replacement Capital Lease Total Expenditures

Income/(Loss)

Ending Fund Balance

Expenditure Highlights $

766,799

$

The Capital Lease expenditures represent payments per an agreement with Siemens Building Technologies in 2004 for energy efficiency improvements at various City facilities, with lease obligations ending in 2016. Among the projects completed this year were seal coats of the parking lots at City Hall, the Annex, and the Arvada Center, as well as boiler replacements at the Ralston Treatment Plant.

368,826

112,848

112,609

$ 879,647

$ 481,435

(359,447)

45,452

$1,294,553

$1,699,452

24

Arvada Economic Development Association Operations

2012 Budget

2012 Actual

$429,231

$429,231

Revenue

729,000

703,100

Expenditures

744,029

703,100

$414,202

$429,231

Beginning Fund Balance

Ending Fund Balance

Revenue Highlights Revenue in the AEDA Operations Fund consists of a transfer from the general fund equal to the personnel and operating expenditures.

Expenditure Highlights Expenditures in 2012 are slightly lower than budget due to lower salary and benefit costs. Salaries and benefits account for approximately 53% of the expenditures.

Program Beginning Cash Balance Revenue

2012 $ 721,482 599,044

Expenditures

(185,525)

Ending Cash Balance

1,135,001

Reserved for AEDA Loan Program

(300,000)

Reserved for AEDA Small Business Grants

(65,447)

Reserved for Job Creation Program

(23,500)

Commitments Available Unallocated Cash Balance

(341,323) $404,731

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.

Expenditure Highlights Expenditures in 2012 reflect 12 pilot business grants and one financial assistance redevelopment grant. Four new loans were approved through the Colorado Enterprise Fund.

25

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), commercial paper, and corporate debt subject to rating and concentration limits. The City’s investment portfolio is managed to provide sufficient liquidity to meet all reasonably anticipated operating cash needs without selling securities prior to maturity.

Investment Portfolio Performance The portfolio saw a yield of .724% in 2012 compared to 1.119% in 2011. The benchmark yield for the City’s portfolio, as established by the investment policy, is a weighted benchmark of allowable securities. For the year, the weighted benchmark return was .41 percent, constructed using the average 2012 monthly returns. The City’s portfolio yield continued to decline from the previous rolling four quarters, as evidenced by the considerable reduction in investment income and the unfavorable reinvestment environment. One contributing factor to these performance results is that the Fed has left rates at very low levels. The discount rate remained constant throughout 2012 at .25 percent and the Fed has announced that we will continue to experience these rates most likely into 2015. The Federal Reserve will keep rates unchanged until the dynamics of our economy significantly change. The portfolio saw $86.7 million in investment calls due to the expiration of call “lockout” periods, these calls resulted in reinvestment in lower yielding securities which contributes to the reduction in investment income. The portfolio increased approximately $874 thousand from December, 2011 to December, 2012. LGIP balances were reduced $21.5 million during the year with investment focused in the two to four year maturity range of the curve by purchasing securities with a six month or greater “lockout” period to earn a better than average coupon before the lockout period expired. During 2012, the City invested in a money market fund which is available to Colorado Public entities, this fund provides a yield approximately 2 basis points higher than the local government investment pools. An indirect benefit to the Arvada portfolio has been the capital appreciation that has been attained in this time, even though this is considered as “paper gains” and has no profound affect on the yield we use to benchmark, the gain in 2012 was $452,870. Key information regarding the City’s portfolio follows: PORTFOLIO CHANGES

PORTFOLIO PERFORMANCE

01/01/2012

12/31/2012

Difference

$0

$5,006,842

$5,006,842

21,135,849

20,163,693

-972,156

CD

19,185,915

19,270,465

84,550

Corporate

21,000,000

5,000,000

-16,000,000

LGIP

66,953,063

45,407,414

-21,545,649

US Agency

73,700,000

108,000,000

34,300,000

US Treasury

7,000,000

7,000,000

0

$208,974,827

$209,848,414

$873,587

YTD Dec-12

YTD Dec-11

Difference

$1,531,397

$2,255,678

-$724,281

Money Market

Portfolio Yield

0.724%

1.119%

-0.395%

Savings/Cash

Benchmark Yield

0.410%

0.590%

-0.180%

Interest Earnings

Tracking Error

+31bps

+55bps

-24bps

Total

26

ACCOUNT SUMMARY

PORTFOLIO CHARACTERISTICS

Par Value

$209,848,414

Average Duration (yrs)

1.92

Book Value

209,901,724

Average Coupon

0.716%

Market Value

210,301,284

Average Cost YTM

0.646%

Average Market YTM

0.513%

Unrealized Gain/(Loss)

$452,870

MATURITY DISTRIBUTION

PORTFOLIO ALLOCATION 40.0% Money Market 2.4%

37.0%

35.0%

U.S. Agencies 51.5%

30.0% 21.4%

25.0% 20.0%

15.7%

15.0% 10.0% LGIP 21.6%

5.0%

U.S. Treasuries 3.3%

Corporate 2.4% CD 9.2%

0.0%

Savings/ cash 9.6%

11.9%

8.6% 1.9% 0-.25 .25-.5 .5-1

3.4% 1-2

2-3

3-4

4-5

Maturity (yrs)

City of Arvada Investments as of December 31, 2012 The City’s portfolio as of December 31, 2012 is shown below, which includes credit ratings as of December 31, face value and interest earnings for 2012.

Description

CUSIP

Credit Rating

Coupon Rate

Maturity Date

Face Value

Interest 2012

12/31/2012 Savings JP Morgan Savings

N/A

0.15%

N/A

$5,138,767

$19,161

Wells Fargo Savings

N/A

0.18%

N/A

5,024,927

8,683

JP Morgan Checking

N/A

0.35%

N/A

10,000,000

0

20,163,693

27,844

5,031,652

20,703 19,922

Sub Total Savings Certificate of Deposit FirstBank

CD5343

N/A

0.30%

7/27/13

FirstBank

CD7281

N/A

0.30%

11/30/13

5,117,264

FirstBank

CD7273

N/A

0.25%

5/28/13

4,066,290

19,922

FirstBank

CD8679

N/A

0.60%

5/5/14

5,055,259

20,086

19,270,465

80,633

Sub Total Certificate of Deposit Corporate Berkshire Hathaway

084664BG5

AA+

5.00%

8/15/13

3,000,000

150,000

General Electric Co

369604AY9

AA+

5.00%

2/1/13

2,000,000

100,000

5,000,000

250,000

Sub Total Corporate Local Government Investment Pool C Safe

N/A

0.17%

N/A

22,021,856

38,709

Colo Trust

N/A

0.21%

N/A

23,385,557

64,399

45,407,414

103,109

Sub Total Local Government Investment Pool Money Market Csip

AAAm

0.22%

Sub Total Money Market

N/A

5,006,842

6,842

5,006,842

6,842

Chart continues next page

27

Description

CUSIP

Credit Rating

Coupon Rate

Maturity Date

Face Value

Interest 2012

0.43%

08/13/2015

5,000,000.00

0

12/31/2012 US Agency FFCB

3133EAH27

AAA

FFCB

3133EC2L7

AAA

0.44%

11/13/2015

5,000,000.00

0

FFCB

3133EC3M4

AAA

0.60%

11/21/2016

3,000,000.00

0

FFCB

3133EAU22

AAA

0.68%

09/12/2016

5,000,000.00

0

FFCB

3133EAGG7

AAA

1.00%

03/08/2016

4,000,000.00

20,000.00

FFCB

3133EAKP2

AAA

1.36%

04/04/2017

5,000,000.00

34,000.00

FHLB

313380U96

AAA

0.50%

10/16/2015

3,000,000.00

0

FHLB

313376ZJ7

AAA

0.50%

02/24/2015

5,000,000.00

12,500.00

FHLB

3133816B6

AAA

0.55%

11/13/2015

5,000,000.00

0

FHLB

313380C70

AAA

0.55%

02/08/2016

5,000,000.00

0

FHLB

313380U88

AAA

0.80%

04/17/2017

3,000,000.00

0

FHLB

3133727K4

AAA

2.13%

12/28/2015

2,000,000.00

42,500.00

FHLMC

3134G3V98

AAA

0.70%

11/21/2016

5,000,000.00

0

FNMA

3136G0W1

AAA

0.55%

02/22/2016

5,000,000.00

0

FNMA

3136G0HP9

AAA

0.60%

05/29/2015

3,000,000.00

9,000.00

FNMA

3136FTM89

AAA

0.80%

02/24/2016

5,000,000.00

20,000.00

FNMA

3136FT3J6

AAA

1.00%

12/28/2016

5,000,000.00

37,500.00 0

FNMA

3136G0RX1

AAA

1.00%

07/26/2017

5,000,000.00

FNMA

3136G0XD8

AAA

1.00%

08/28/2017

6,000,000.00

0

FNMA

3136FTDG1

AAA

1.05%

10/21/2015

5,000,000.00

52,500.00

FNMA

3136G0GT2

AAA

1.05%

11/14/2016

5,000,000.00

26,250.00

FNMA

3136FPEL7

AAA

1.05%

09/09/2013

5,000,000.00

52,500.00

FNMA

3136G0FS5

AAA

1.25%

05/17/2017

3,000,000.00

18,750.00

FNMA

3136G0XW6

AAA

0.50%

02/28/2017

3,000,000.00

0

FNMA

3136G0DZ1

AAA

0.65%

04/26/2016

Sub Total Agency

3,000,000.00

9,375.00

108,000,000.00

334,875.00

US Treasury T-Bond

912828KY5

AAA

2.63%

06/30/14

2,000,000

78,750

T-Note

912828MT4

AAA

1.38%

03/15/13

5,000,000

68,750

7,000,000

147,500

$209,848,414

$950,803

Sub Total US Treasury TOTAL

Investment Management Focus - 2013 2012 continued to be a struggle for the capital markets. We will continue to monitor the two items of focus we have highlighted below.

Diversification of Maturities. We will continue to keep LGIP balances at levels to meet operating needs to capture attractive interest rates. We will focus on a blended strategy which calls for emphasis in short-term positions as well as long-term positions (5 years in the City’s case), but also staggering maturities in between to smooth the revenue stream. This will allow the ample cash should the City experience unexpected needs, allow us to take advantage of better coupons in longer maturity buckets, and the ability to capitalize on investment opportunities if/when yields begin to recover.

Agency spreads are tighter, callables will get better yield. Call provisions are a tool used by issuers to refinance debt at a more attractive rate. Our focus will be to purchase callable securities with a call “lockout” period of six months or more to enhance investment income over the LGIP funds.

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Finance Department • 8001 Ralston Road • Arvada, Colorado 80002 (720) 898-7120 • www.arvada.org