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2016 Year-End Financial Report


Table of Contents Overview.......................................................................................1 General Fund...............................................................................3 Parks Fund...................................................................................7 Special Revenue Funds..............................................................9 Capital Improvements Projects Fund.................................... 13 Enterprise Funds...................................................................... 15 Internal Service Funds............................................................. 19 City of Arvada Investment Report.......................................... 23 Performance............................................................................. 27


R. Adler

Overview

2016 Year-End Report The Financial Report for the City of Arvada provides an unaudited overview of the major funds and how their revenues and expenditures performed in comparison to budget. This is not meant to be a complete accounting, but rather a quick look at the highlights. The year began with the stock market experiencing its worst two-week start in history. Concerns with the global economy, plunging oil prices and fears of interest rate hikes led to a large sell-off in the major indices. With this decline, the Federal Reserve decided in February to postpone the scheduled interest rate hike. This decision led to renewed confidence and a surge in both the US economy and the markets. June brought more uncertainty with the successful Brexit vote. While the experts expected a pullback, the economy and the markets once again shrugged off the decision and continued to move forward. The presidential election results in November sparked a rally in the markets, pushing the Dow Jones over 20,000 for the first time in history. In December, OPEC’s decision to cut production sent oil prices to $55 a barrel and the Federal Reserve raised interest rates 25 basis points, only the second increase in the past ten years. General Fund revenues grew 3.5% over the same time period in 2015, marking the fifth consecutive year of growth (2012-2016). Every major revenue source experienced some level of increase, led again by building revenues. Overall sales tax revenues were up 5.4% over the same time period in 2015. Fueled by increased population and the remittance of sales tax on internet sales, 2016 continued a growth pattern that began in 2009. The major categories of General Department Stores, Retail Hardware, and Furniture, Appliances and Flooring again performed well, all experiencing more than 8.2% year-over-year growth. The category of Public Utilities and Cable TV did under-perform in 2016, losing 3.6%. Locally, building activity continued to grow, fueled by low interest rates, population growth and the strong Colorado economy. In 2016, over 977 building permits were issued consisting of 739 single-family detached, 121 single-family attached, 61 duplex, 20 multi-family and 36 commercial. For reference, the lowest number of permits issued was in 2009 with a total of 102. Total building revenues increased 23.8% over 2015.

General Fund Building Revenue $14,000,000

800

$12,000,000

700 600

Dollars

$10,000,000

500

$8,000,000

400 $6,000,000

300

$4,000,000

200

$2,000,000 $0 GF Building Revenue Single-Family (Detached) Permits

100 2012 $5,137,472

2013 $6,072,258

2014 $9,200,979

2015 $10,503,233

2016 $13,011,532

321

427

581

647

739

1

0


Much to the surprise of industry experts, new vehicle sales in the United States exceeded 2015’s record numbers. Almost everyone was expecting some sort of reduction. The City of Arvada surpassed the $7 million mark in auto use collections for the first time in history. This source did exceed the budget and represents the seventh consecutive year of growth (2010-2016). All signs point to 2016 as being a high-water mark for auto sales with an expected pullback for 2017. Investment revenue exceeded 1% return for the first time since 2011, finishing the year at 1.005% or 23 basis points higher than 2015. The City’s portfolio outperformed its composite benchmark and has experienced consistent improvement for the past four years. With two to three anticipated interest rate hikes for 2017, improved yield should continue. Parks has an interesting challenge managing the City of Arvada’s inventory of recreation assets. A large part of the Parks system is now over 30 years old. Playground equipment, irrigation systems and recreational needs and wants have changed. The update and renovation began in 2016 with Homestead and Terrace Parks. These efforts will continue for many years to come. As was mentioned in 2014 and again in 2015, a tight rental market has reduced the number of families the housing authority is able to assist. At the end of 2016, 484 families out of a possible 508 were receiving Section 8 housing subsidies. Until something changes, either at the federal level for funding or in the local rental market, the housing authority will struggle to help the maximum allowable families. The much-anticipated opening of the Regional Transportation District G Line in October that runs through Arvada and terminates in Wheat Ridge did not happen. Until the continued problems with the software controlling the crossing gates at intersections along the A and B Lines is corrected, the Federal Railroad Administration will not allow further testing along the G Line. There is no estimate for a new opening date. The good news is that the parking structure, referred to as the Olde Town Hub, is open, and visitors to Olde Town are enjoying the additional access to parking. The City presented two ballot issues to the voters in November - 2G and 2H. 2G was a proposed ½ cent sales and use tax increase and 2H was a proposed repeal of senate bill 152 related to broadband. 2G failed with 56% of the voters opposing the measure and 2H passed with 72% of the voters approving the measure. The additional sales and use tax was to be spent on maintaining and improving the City’s street and sidewalk infrastructure. City leadership, along with Council, has committed to redirecting current and future operational funds to try and close the almost $10 million dollar annual funding gap in order to meet these infrastructure needs. This will be a focus throughout the next two-year budget and ten-year financial planning cycle. The City of Arvada has fully recovered from the Great Recession and continues to be in a growth cycle. Local unemployment is at historical lows, ending December at 2.5%! Explosive growth in the western section of the city, continued investment in Olde Town, transit-oriented development around the three train stations, and commercial and business growth have all contributed in pushing Arvada to new heights. Additional resources generated over the 2016 budget, referred to as one-time revenue, will be reinvested back into the community in the form of capital projects and streets infrastructure. Staff has begun work with City Council to identify new Strategic Results that will support the changing City needs.

“WE DREAM BIG AND DELIVER”

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General Fund Overview

General Fund

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 Parks Fund and Arvada Economic Development Association • General Debt Service payments • Transfer to the Capital Improvements Fund for new parks, transportation and other infrastructure projects • Grant support to the Arvada Center

The following table provides a comparison of budgeted fund balances, revenues and expenditures to actual amounts in 2016. We have included the original 2016 budget adopted in October 2015 and the 2016 revised budget, which was a result of the ten-year financial planning model that was completed in the third quarter 2016 and adopted by council in the fourth quarter 2016.

General Fund

2016

2016 Revised

Budget

(10-year plan)

2016 Actual

Beginning Fund Balance

$37,529,584

$37,529,584

$37,529,584

Revenues

$80,287,090

$80,287,090

$90,094,370

Ongoing

$78,409,872

$79,383,177

$73,600,944

Capital

12,094,638

12,124,638

12,157,439

EXPENDITURES

JPPHA (Jefferson Parkway Public Highway Authority) Expenditures

484,350

484,350

200,096

$90,988,860

$91,992,165

$85,958,479

Net Income/(Loss)

(10,701,770)

Ending Fund Balance

4,135,891

$26,827,814

$25,824,508

$41,665,475

15,468,106

15,638,668

14,612,941

$11,359,708

$10,185,840

$27,052,533

Goal (17% of Expenditures) Excess/(Deficit)

(11,705,075)

Budget Dedicated for 2017-2026 JPPHA (Jefferson Parkway Public Highway Authority)

$

-

$

-

$284,254

Carryovers to 2017

-

-

2,387,148

One-time Items added for 2017

-

-

5,583,500

Streets in 2017 - 2018

-

-

3,000,000

Olde Town Transit Hub in 2017

-

-

1,000,000

Use of Fund Balance 2017-2026

-

10,751,843

10,751,843

-

$10,751,843

$23,006,745

Total Dedicated Budget

$

The General Fund will end 2016 with a fund balance of a little over $27 million, after the Council-required fund balance reserve of 17.0%. Some of this balance, $2,671,402, will be used for items not completed in 2016. Another portion, $5,583,500 will be dedicated towards one-time items. Additionally, $1,000,000 will be used for items related to the Olde Town Transit Hub and $3,000,000 will be used for the streets maintenance program. The remaining amount will be used towards ongoing operations to help balance the 10-year financial plan and maintain the Council-required 17.0% fund balance reserve.

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Revenue Highlights 2016 was an outstanding year for revenue production in the General Fund. All revenue categories were up over 2015 and all sources except use tax, court fines and fees and franchise fees exceeded their budgets. As you will see on the following pages, sales tax and building-related revenues led the way with increases of 5.4% and 23.8%, respectively, over 2015. Overall, revenues experienced a 3.5% increase over 2015 and finished $9.8 million dollars over the revised budget. A large percentage of this revenue is considered one-time, not able to support ongoing operations, and will be used towards one-time expenditures as mentioned above.

GENERAL FUND REVENUES Sales Tax 49.1%

Property Tax 6.2%

Use Tax 1.5%

Auto Use Tax 7.9%

Other 14.9% Interest 0.9% Franchise Fees 4.8%

Sales Tax The close of 2016 marks seven straight years of sales tax revenue increases. In 2016, sales tax collections increased 5.4% over 2015. Grocery stores and general department stores increased 2.4% and 8.2%, respectively, over 2015. These two categories account for 35.7% of total sales tax. The increase in general department stores is primarily due to several companies that are collecting sales tax on internet sales. Other large categories which include retail hardware, restaurants, furniture/appliances/flooring,auto care/leasing and liquor, all showed increases over 2015. Utilities/ cable, telephone equipment and office supplies were the only categories that showed decreases over the prior year. The utilities/ cable category decreased primarily due to the warmer weather during the spring and fall of 2016.

Sales Tax Collections $50,000,000 $45,000,000 $40,000,000 $35,000,000 $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $0

2012 2013 2014 2015 2016 Sales Tax $37,954,667 $40,205,021 $43,211,510 $45,642,944 $48,111,671

Use Tax The City has three prime use tax categories: building, automobile and general. These are taxes paid in lieu of sales tax on purchases. General use tax is a stable source of revenue; however in 2016 there was a decrease in use tax. The decrease in this source of use tax was covered by the increases in auto and building use tax. Auto use tax collections increased 2.7% over 2016. While the increase in auto use tax may seem low, this year follows fours years of double-digit increases in auto use tax and represents record collections in this category. Building use tax is up 30.3% from 2015 due to new home construction, primarily in northwest Arvada, and around the light rail stations. Several commercial developments, including Walmart, Hilton Garden Inn and Solana contributed to this increase.

Building Use Tax & Permits 12.8%

Court Fines & Fees 1.9%

Use Tax Collections $16,000,000 $14,000,000 $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $0 General

2012 $1,220,977

2013 $1,554,343

2014 $1,533,818

2015 $1,598,995

2016 $1,312,887

Auto

$4,804,227

$5,379,579

$5,982,520

$6,973,208

$7,162,404

Building

$2,385,633

$2,884,866

$4,431,197

$5,215,500

$6,799,066

Building

4

Auto

General


Property Tax The City’s property tax rate is 4.31 mills per $100 of valuation. In Colorado, the mill rate is placed on the assessed valuation. The following graph illustrates the year-to-date collections for the current and past four years. Property tax collections in 2016 were 19.6% ahead of 2015. The increase is primarily due to the increase in assessed valuations in 2015. Real property is only appraised every odd-numbered year and there is a lag in tax collections, so the City didn’t see the increase in tax collections until 2016. This increase has been incorporated into the City’s 10-year financial plan. However, in 2017 the assessment rate for residential properties, currently at 7.96%, will drop to 6.56% due to the Gallagher Amendment. This change will reduce much of the increase that occurred in 2016.

Property Tax Collections

$5,500,000 $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 Property Tax

2012 $4,500,376

Intergovernmental Revenues

2014 $4,600,995

2015 $4,668,082

2016 $5,583,064

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 Jefferson County HUTF

2012 $855,684

2013 $718,844

2014 $730,239

2015 $734,993

2016 $799,693

$3,818,142

$3,847,443

$3,949,386

$4,134,398

$4,123,134

HUTF

Jefferson County

R. Adler

This category is made up of two revenue sources: Highway Users Trust Fund (HUTF), which is the City’s share of Statecollected motor fuel tax revenue, and Road and Bridge, which is the City’s share of property tax collected by Jefferson County and dedicated to the maintenance of roads and bridges. In 2016, this revenue is almost the same as 2015. While these revenue sources are stable, they have not increased at the same pace as the cost of street maintenance; therefore, other General Fund revenues have had to fill the gap, reducing resources for other services.

2013 $4,556,940

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Expenditure Highlights Total expenditures show savings of over $6 million. Unspent JPPHA funds in the amount of $284,254, personnel and benefit savings of $789,762, and carryovers of $2,387,148, make up a portion of this savings. Another $1,982,720 in savings was seen in the transfers line as the in-kind transfer to the Arvada Center was moved to the services and charges line item. The remaining dollars are spread across all of the major expenditure categories, as departments did a good job of monitoring their budgets and spending appropriately in 2016.

GENERAL FUND EXPENDITURES Miscellaneous 1.5%

Transfers 21.0%

Personnel 45.5%

Debt Service 5.1%

Contracts 10.8%

Supplies and Expenses 5.5%

Services and Charges 10.6%

Salary and Benefit Savings Salary & Benefits Salaries & Wages Vacancy Savings Overtime

2016

2016

Budget

Actual

$31,036,134

$30,109,512

(834,435)

-

943,473

1,012,935

Group Insurance

6,133,151

5,412,212

Retirement

3,436,657

3,392,455

Medicare

395,251

396,031

Temporary Wages & Social Security

438,032

540,327

Other Total

345,838

346,487

$41,894,101

$41,209,960

Total Overtime Expenditures cleared $1 million for the first time since 2008, which included an 11.6% increase in Public Safety versus 2015. Persistently high vacancy rates in the Police Department were the major drivers behind the increase, with the department’s increased participation in grant-funded Overtime reimbursement programs also playing a role. Temporary Wages remained elevated over historic levels again in 2016 due primarily to the use of independent contractors by Public Works to help manage the construction of the Olde Town Transit Hub. Total Personnel expenditures were up 1.8% over 2015 but still under budget by 1.6%.

Adobe stock

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PARKS FUND

Parks Fund

Parks Fund

Overview The Parks Fund accounts for costs associated with the acquisition, design, development, maintenance and beautification of parks, open space and trails within the City. Revenues are derived from the City’s General Fund, Grants Fund, Apex and Jefferson County Open Space funds.

Revenue Highlights

Parks Fund

In 2016, Arvada Parks’ two most important revenue sources exceeded amounts compared to the same period in 2015. City-attributable Jefferson County Open Space Funds were 5.6% greater in 2016 as compared to the same period in 2015 and the transfer from the City’s General Fund to Arvada Parks was 3.8% greater. Reimbursement from the Apex Park and Recreation District for maintenance services provided was .8% greater than revenues collected in 2015 but below the budgeted number. These revenues, along with other revenue sources derived from the Majestic View Nature Center and Arvada Festivals programs, resulted in total revenue exceeding the 2016 budget.

Beginning Fund Balance

2016

2016

Budget

Actual

$4,974,000

$4,974,000

$4,191,816

$4,202,050

City Cash Transfer

3,177,602

3,196,839

APEX Reimbursement

1,012,958

856,904

186,452

351,323

$8,568,827

$8,607,116

$8,590,536

$8,266,831

REVENUES Open Space

Other Total Revenues

Expenditure Highlights

EXPENDITURES

In 2016, total expenses were 3.7% below budget estimates and approximately $500,034 greater as compared to the same period in 2015. Four areas account for the majority of the increase: trash removal; transfer to the vehicles fund for the purchase of new vehicles; temporary wages; and water, sewer and stormwater charges.

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

$8,590,536 (21,709)

$8,266,831 340,285

$4,952,291

$5,314,285

944,959

909,351

$4,007,332

$4,404,934

R. Assmus

7

-


PARKS FUND REVENUE

$8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $Cash Transfer

2012 $2,790,917

2013 $2,883,545

2014 $2,937,398

2015 $3,079,070

2016 $3,196,839

Open Space

$3,312,981

$3,537,126

$3,685,566

$3,978,094

$4,202,050

R. Assmus

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Special Revenue Funds

Special Revenue Funds Overview Special Revenue Funds account for revenues that are to be used for specific purposes. The following funds are considered special revenue funds: • Tax Increment Funds • Community Development • Housing

.21 and .25 Tax Increment Funds

Tax Increment Funds

Beginning Fund Balance

Overview There are two tax increment funds which account for the voter-approved sales tax increases to fund expanded police services. The first accounts for the .21 cent sales and use tax and the second accounts for the .25 cent sales and use tax. Sources include sales tax, general use tax, auto use tax, building use and interest income. Since the tax increment is in addition to the City’s 3% sales tax, revenue trends in the tax increment fund will closely follow those in the general fund.

2016

2016

Budget

Actual

$8,716,000

$8,716,000

$7,625,379

$7,570,235

2,087,896

2,345,682

456,000

645,939

$10,169,275

$10,561,856

$9,343,106

$8,037,966

245,348

104,111

$9,588,454

$8,142,077

580,821

2,419,779

$9,296,821

$11,135,779

1,054,730

895,628

$8,242,091

$10,240,151

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

Revenue Highlights

Capital

Sales tax in 2016 reflects an increase of 5.0% and Use tax an increase of 10.4% from 2015. Other Revenue has increased a total of 207.2% or $435,682 from 2015 for personnel and overtime reimbursements. This increase is attributed to strong continued partnerships with organizations such as: CDOT High-Visibility Enforcement and Law Enforcement Fund for DUI enforcement, Federal and State of Colorado Justice Assistance Grants (JAG), CommunityOriented Policing Services (COPS), a hiring grant related to personnel costs, and High-Intensity Drug Trafficking Areas (HIDTA) for drug surveillance and seizures.

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

Expenditure Highlights

R. Assmus

2016 salaries and benefits increased 3.1% from 2015 while overtime increased 11.4% over the same time period. These costs were offset by partnerships that were developed for overtime reimbursements. Ongoing costs are up 3.4% in comparison to 2015, but are under budget in total. Costs related to software have increased due to our participation with the Colorado Information Sharing Consortium (CISC) and Lumen software, which provides the ability to share information with other metro area law enforcement agencies. Go Bags, which were partially grant funded, were provided to all police officers with supplies helpful to first responders in the event of an active shooter situation. These kits provide additional resources such as ammunition, relevant equipment, and medical supplies. Fourteen vacant police officer positions were filled in the 4th quarter of 2016. The remaining Capital budget will be carried over into 2017 to complete fencing around the patrol cars lot, Charlie sector locker room remodel and the re-configuration of the records office.

9


Community Development Overview The Community Development Fund accounts for all entitlements, revenues and expenditures of the Community Development Block Grants (CDBG) program and the Home Rehabilitation program and Essential Home Repairs program.

Community Development Fund Beginning Fund Balance

2016

2016

Budget

Actual

$5,558,000

$5,558,000

$ 114,737

$ 254,007

668,002

401,920

City Cash Transfer

45,000

45,000

Interest/Other

14,000

291,758

Total Revenues

$ 841,739

$ 992,685

$ 870,234

$ 525,927

403,805

205,585

$1,274,039

$ 731,511

(432,300)

261,173

$5,990,300

$5,296,827

REVENUES

Revenue Highlights

Recovered

Due to some substantial deferred loan payments received in 2016, the Recovered Revenues were over budget. Because of the additional loan payments, the City was limited in how much it could draw from HUD in 2016, which caused Grant Revenue to be under budget. The City Cash Transfer represents HODAG funds that were transferred in 2015 for sidewalk improvements along West 60th Avenue between Lamar Street and Sheridan Boulevard. It turned out that these funds were not needed, and so were therefore transferred back to HODAG.

Grants

EXPENDITURES Ongoing Essential Home Repairs Total Expenditures

Expenditure Highlights

Income/(Loss)

The difference between budget and actual in ongoing expenditures is due to funds that were budgeted for ICAST and were not used. The variance from budget in the Essential Home Repairs program is due to a variety of projects that did not proceed as expected in 2016. The fourth quarter alone saw four planned projects that did not get started or were not completed in the time frame expected.

R. Assmus

Ending Fund Balance

10


Arvada Housing Authority Overview

The Authority administers funds received for rent subsidy to low/moderate income households under Section 8 of the U.S. Housing Assistance Payment Program.

Revenue Highlights The slight increase in revenues is due to increased rents in the Denver market, thus increasing the costs to the authority which increased Grant funding received for 2016.

Arvada Housing

Expenditure Highlights

REVENUES

As of December 31, the Arvada Housing Authority was assisting 484 families with monthly rent subsidies out of a maximum of 508. This is an increase from the 471 families receiving rent subsidies during the same period in 2015. The subsidies represent approximately 90.0% of the Authority’s overall expenditures. The increase in Rents is due to the increase in average rent costs in the Denver housing market.

Recovered

Authority Beginning Fund Balance

Grants

2016

2016

Budget

Actual

$

88,000

$

88,000

$

19,178

$

22,709

3,888,390

4,015,326

84,872

65,000

Interest/Other

1,000

887

Total Revenues

$3,993,440

$4,103,922

$ 403,499

$ 375,732

3,727,311

3,750,630

32,273

35,640

$4,163,083

$4,162,002

(169,643)

(58,080)

Transfers

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

$ (80,643)

Adobe stock

11

$

30,920


EOC ENERGY ASSISTANCE 2011-2016 Dollars (Grants)

Total Dollars

$50,000

(113)

$40,000

(111) (119)

(119)

(117)

2013 $32,462

2014 $33,242

2015 $34,256

$30,000 $20,000 $10,000 $0 Dollars

2012 $45,500

2016 $40,605

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.

12


Capital Improvement Projects Fund

Capital Improvement Projects (CIP) Fund Overview The Capital Improvement Fund is where the City keeps track of capital projects for streets, traffic, parks and buildings.

Capital Projects Capital Improvement Fund Beginning Fund Balance

2016

2016

Budget

Actual

$30,757,000

$30,757,000

$ 6,856,843

$14,034,827

REVENUES Transfers in Other revenue Total Revenues

-

3,500,196

$ 6,856,843

$17,535,023

CIP Administration

$ 8,751,977

$22,829,464

CIP Street Projects

4,276,396

4,828,105

CIP Traffic Projects

2,297,288

4,368,279

CIP Park Projects

3,202,667

2,713,487

231,750

61,509

Total Expenditures

$18,760,078

$34,800,844

Ending Fund Balance

$18,853,765

$13,491,179

EXPENDITURES

CIP Arvada Center Projects

Anticipated Grant Revenue

8,394,103

Assigned for Projects: CIP Administration

$ 7,226,132

CIP Street Projects

4,631,901

CIP Traffic Projects

1,912,099

CIP Park Projects

5,301,034

CIP Arvada Center Projects Total Assigned for Projects

217,127 19,288,293

Reserve Ending Fund Balance

2,436,059 $

R. Assmus

160,930

Revenue Highlights In 2016, the majority of the revenue in the CIP fund consisted of transfers from the General Fund. Other revenues included transfers from the Lands Dedicated Fund, developer contributions, grants, park development fees and interest income.

13


Expenditure Highlights Expenditures in the third quarter include such projects as the Kipling underpass, quiet zones, Ridge Road bicycle/pedestrian improvements and Terrace and Homestead parks. The Olde Town Hub accounts for the majority of the expenditures in this fund as it nears completion.

Project Highlights In 2016, the City invested over $34 million in infrastructure improvements. Almost half of this was spent on the Olde Town Hub which opened in February 2017. Although the opening of the Regional Transportation District’s G Line is delayed, the hub is providing much-needed parking to the Olde Town area, which is growing in popularity as a place to visit due to the variety of restaurants and retail establishments. The City also invested in new streets and bicycle and pedestrian improvements that will allow the residents of Arvada easier access to the G Line stations. The completion of West 56th Avenue, Kipling Street Underpass and Ridge Road improvements will improve access. In addition, the City completed four quiet zones on railroad intersections. With these quiet zones, trains will no longer be required to blow their horns while crossing intersections, which is a common complaint from residents and businesses in the areas of these crossing intersections. Access to park amenities earns consistently high ratings in the City’s citizen survey. In 2016, the City renovated Homestead and Terrace Parks to encourage residents to enjoy a more active lifestyle. There are many older parks in the City which are in need of renovation. The City invested over $700,000 to renovate three parks with new play areas, benches and trash receptacles, and replaced an aging computer irrigation system, which plays a key role in managing water usage in the parks, medians and facilities.

Reserved Funds Even though the level of spending on capital projects was over $34 million, there is still over $13 million reserved for future projects and $8 million in grant revenue that will also supplement these projects.

Future Work In 2016, the City Council approved the reconstruction and widening of the intersection of West 72nd Avenue and Indiana Street and the remodel of the West Woods Golf Clubhouse. More information on the status of these two projects will occur in 2017.

R. Adler

14


Enterprise Funds

Water Fund Water Fund Beginning Fund Balance

2016

2016

Budget

Actual

$79,052,000

$79,052,000

$19,915,014

$21,172,518

Tap Fees

10,481,179

15,373,929

Interest

476,173

519,453

1,008,246

2,285,593

$31,880,612

$39,351,493

REVENUES Water Charges

Other Total Revenues

Overview The Water Fund accounts for all activities within the scope of the water utility operations including administration, operations, capital water projects, financing and related debt service and billing and collection.

Revenue Highlights Annual Tap Fee receipts set a record for 2016, beating the record set in 2015 by nearly $5 million. Revenues from the sale of metered water rose 13.9% versus 2015.

EXPENDITURES Ongoing

$17,611,250

$17,983,886

Debt Service

2,262,550

2,253,938

Major Capital Maintenance

4,360,191

2,408,469

Capital

6,941,197

352,513

$31,175,187

$22,998,806

705,425

16,352,687

$79,757,425

$95,404,687

7,793,797

5,749,702

$71,963,628

$89,654,985

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

As for Other Revenues, the sale of the Ward Road Ponds in early 2016 greatly contributed to the high total. Sales of water for construction purposes, as well as water meters, also came in well above budget.

Expenditure Highlights Much of the remaining budget in Capital Expenditures includes funding for the Gross Reservoir Expansion, construction on which is yet to begin. Major Capital Maintenance Expenditures came in under budget due to the timing of payments on contract work, with Utilities intending to request a substantial carryover for main replacements into 2017.

*$37,620,485 of the Fund Balance is a cash escrow reserved in Denver Water’s name related to the Gross Reservoir expansion.

WATER CONSUMPTION

Water Consumption Thousands of Gallons

6,000,000

This chart, with data provided by Utilities, shows annual water consumption since 2012. Total consumption increased by 10.5% versus 2015.

5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 -

1000s of Gallons

2012 5,700,412

2013 4,707,585

2014 4,775,208

2015 4,781,570

2016 5,281,851

WATER FUND - TAP FEES $16,000,000 $14,000,000 $12,000,000 $10,000,000

Dollars

This chart shows annual water tap fee revenue since 2012. The substantial increase over 2015 was partially due to fees paid for taps related to a major multifamily development near Olde Town.

$8,000,000 $6,000,000 $4,000,000 $2,000,000 $Tap Fees

15

2012 $4,378,473

2013 $7,896,850

2014 $10,167,203

2015 $10,597,733

2016 $15,373,929


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

As with Water Taps, Sewer Tap Fee Revenues remain substantially elevated, with 2015 being the third consecutive year of Tap Fee Revenue above $1,000,000. Sewer Charges for 2016 were down compared to budget and flat compared to 2015.

Expenditure Highlights Ongoing Expenditures include a $5 million loan made by the Wastewater Fund to AURA approved by Council in May of 2016. The year-over-year drop in Metro Wastewater charges was due to the calculation methodology utilized by the District. This year’s charges were set by budget in June of 2015, which were adjusted down based on actual usages in 2014. Major Capital Maintenance Expenditures came in under budget due to the timing of payments on contract work, with Utilities intending to request a substantial carryover for main replacements into 2017.

2016

2016

Budget

Actual

$12,991,000

$12,991,000

$12,894,275

$10,872,011

Tap Fees

591,738

1,817,277

Interest

132,200

114,671

Other

630,958

640,951

$14,249,171

$13,444,910

$8,223,756

$7,552,684

Beginning Fund Balance

Revenue Highlights

REVENUES Sewer Charges

Total Revenues EXPENDITURES Metro District Ongoing

8,154,875

7,883,617

Major Capital Maintenance

2,404,704

1,585,097

Capital

1,222,500

11,896

$20,005,835

$17,033,293

Total Expenditures

WASTEWATER FUND - TAP FEES $2,000,000

Dollars

Wastewater Fund

Income/(Loss)

(5,756,664)

(3,588,383)

Ending Fund Balance

$7,234,336

$9,402,617

$1,750,000

Goal (25% of Expenditures)

$1,500,000

Excess/(Deficit)

5,001,459

4,258,323

$2,232,877

$5,144,294

$1,250,000 $1,000,000 $750,000 $500,000 $250,000 $Tap Fees

2012 $834,078

2013 $849,001

2014 $1,001,500

2015 $1,146,951

2016 $1,817,277

This chart shows sewer tap fee revenue through the third quarter since 2012.

Stormwater Fund

Stormwater Fund

Overview

Beginning Fund Balance

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

2016

2016

Budget

Actual

$5,948,000

$5,948,000

$3,266,474

$3,337,042

63,809

120,010

$3,330,283

$3,457,052

$1,931,078

$1,483,764

866,673

865,680

REVENUES Stormwater Fee

Revenue Highlights

Other

The City’s Stormwater Utility Fee was unchanged in 2016, with receipts up a mere 0.3%. Total revenues rose 3.8% for 2016 over 2015.

Total Revenues

Expenditure Highlights

Ongoing

The Department of Utilities will request that over $500,000 in unexpended budget for miscellaneous drainage projects, reflected in Ongoing Expenditures, be approved for carryover into 2017. A couple of large repairs to banks and waterway infrastructure systems have been delayed, resulting in no Capital dollars being spent in 2016.

Debt Service

EXPENDITURES

Capital Total Expenditures

$4,553,544

$2,349,444

Income/(Loss)

(1,223,261)

Ending Fund Balance

$4,724,739

$7,055,608

1,138,386

587,361

$3,586,353

$6,468,247

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

16

1,755,793

1,107,608


Golf Fund Overview The Golf Course Fund accounts for all revenues and expenses of the Lake Arbor and West Woods Golf Courses, including food service operations.

Revenue Highlights In 2016, Arvada Golf total revenue was approximately 2.5% less as compared to the same period in 2015. Revenue from golf operations is approximately 3.7% below 2015 levels, and golf restaurant revenue is approximately 0.8% below 2015 levels. A decrease in total rounds played is the cause of the decline in total revenues. Concentrated sales efforts, focused marketing and increased tournament rounds could not offset the decline in overall rounds, resulting from poor weather, in the first quarter and the beginning of the second quarter of 2016.

Golf Fund

2016

2016

Budget

Actual

$ 330,000

$ 330,000

Golf Courses

$3,600,754

$3,187,358

Restaurants

1,515,798

1,461,387

229,285

242,257

$5,345,837

$4,891,002

$2,197,815

$2,034,637

Beginning Fund Balance REVENUES

City Cash Transfer Total Revenues

Expenditure Highlights

EXPENDITURES

In 2016, expenses were in line with budget projections and approximately $260,000 greater in 2016 as compared to the same period in 2015. Three areas account for the majority of the increase: inventory costs for food, temporary wages and capital projects at West Woods and Lake Arbor Golf Courses.

Golf Courses Restaurants

1,757,261

1,657,319

Administration

1,350,751

1,113,293

358,430

291,489

$5,664,257

$5,096,737

Capital Total Expenditures Income/(Loss)

(318,420)

(205,735)

Ending Fund Balance

$11,580

$124,265

Goal (11% of Expenditures)

623,068

560,641

$(611,488)

$(436,376)

Excess/(Deficit)

Golf Rounds by Type - January - December West Woods

Variance

2016

2015

33,825

34,186

(361)

(1%)

Super Users Annuals

6,311

8,029

(1,718)

(21%)

Super Users Clubs

2,542

2,835

(293)

(10%)

Tournament/Corp Leagues

5,226

4,942

284

6%

762

729

33

5%

48,666

50,721

Player Support

Grow the Game Total

Lake Arbor

(2,055)

(4%)

Variance

2016

2015

Player Support

22,806

20,383

Super Users Annuals

13,465

14,065

(600)

(4%)

1,731

1,486

245

16%

Tournament/Corp Leagues

685

901

(216)

(24%)

Grow the Game

447

496

(49)

(10%)

39,134

37,331

Super Users Clubs

Total

2,423

1,803

17

12%

5%

Adobe Stock


Hospitality Fund Overview The Hospitality Fund accounts for all revenue and expenses associated with food service activities including the operation of banquet facilities at the Arvada Center for the Arts and Humanities and off-site catering.

Revenue Highlights

Hospitality Fund

In 2016, Arvada Events at the Arvada Center exceeded 2015 revenues by over $170,000. In 2016, Arvada Events served 37 more groups than served in 2015, representing an increase of over 4,700 guests. Arvada Events at the Arvada Center contributes this increase to a combination of having a full sales staff, concentrated sales efforts, new website, focused marketing, economic recovery, increased brand identity and, finally, excellent customer service. Concession revenue is down approximately 73.4% as operations were transferred to the Arvada Center nonprofit on July 1, 2016.

Beginning Fund Balance

2016

2016

Budget

Actual

$ 704,000

$ 704,000

$ 792,516

$ 944,917

Concession Services

135,283

47,767

Banquet and Guest Services

503,317

502,227

$1,431,116

$1,494,911

$ 433,832

$ 397,762

1,241,707

1,119,825

REVENUES Sales

Total Revenues EXPENDITURES Administration Operations

Expenditure Highlights

Capital

In 2016, total expenses were in line with projections and were approximately $200,000 greater than compared to the same period in 2015. Three areas account for the majority of the increase: expenses associated with re-branding to Arvada Events at the Arvada Center, temporary wages and inventory costs for food and beverage.

Total Expenditures

-

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

-

$1,675,538

$1,517,587

(244,423)

(22,676)

$ 459,577

$ 681,324

184,309

166,935

$ 275,268

$ 514,389

Events by Market Segment January - December ARVADA CENTER Arvada Center Association

2016

2015

Variance

9

21

(12)

WEST WOODS

(57%)

2016

2015

Association

2

3

Variance (1)

(33%)

76

63

13

21%

Corporate

8

8

-

Corporate

102

85

17

20%

Education

2

4

(2)

(50%)

Education

14

17

(3)

(18%)

Fraternal

2

1

1

100%

Fraternal

93

98

(5)

(5%)

Golf Tournament

30

37

(7)

(19%)

Government

14

12

2

17%

In-House

16

25

(9)

(36%)

In-House

51

33

18

55%

Religious

1

1

Religious

61

60

1

2%

15

18

Social

28

25

3

12%

Wedding/Anniversary Total

Wedding/Anniversary Total

8

5

3

60%

456

419

37

9%

Social

LAKE ARBOR

79 2016

97 2015

-

0%

(3)

(17%)

3

0%

(18)

(19%)

Variance

Corporate

1

-

1

0%

Golf Tournament

11

10

1

10%

In-House

2

2

-

0%

Social

1

-

1

0%

12

3

25%

Total

18

3

0%

15


Internal Service Funds Overview The City has five Internal Service Funds – Insurance Fund (Risk Management), Computer Fund, Print Services Fund, Vehicles Fund and Building Fund. Internal Service Funds charge internal programs and departments for use of goods and services. The Funds then pay for all associated costs of things such as purchasing insurance, vehicle purchases and maintenance, computer purchases and maintenance, and buildings maintenance.

Internal Service Funds

Insurance Fund Overview The Insurance Fund, administered by the Risk Management Program of Finance, accounts for the City’s self-insurance against loss. It is funded with contributions by all City departments and programs based on their levels and types of exposure. The Fund is also used for loss prevention programs, the protection of City personnel and the preservation of City property and assets.

Revenue Highlights Contributions for 2016 have decreased 4.3% from 2015 due to the Arvada Center moving to the non-profit entity as of July 1, 2016. The Other revenue category is made up of interest and recovered costs. This category was over budget due to a larger number of subrogations on insurance claims.

Expenditure Highlights The year saw an 11.5% increase in Administration expenditures due to higher dollar workers compensation claims and the payout of some lump sum payments for complex claims that were initiated in prior years. In addition, there was a large property claim at the Lake Arbor Golf Course for netting damage due to the blizzard in March. 2016 saw reductions in auto physical damage, with fewer City vehicles damaged, and in general liability as expenditures in 2015 included payments for the December 2014 sewer backup on 76th Avenue.

Insurance Fund Beginning Fund Balance

2016

2016

Budget

Actual

$3,710,000

$3,710,000

$1,834,010

$1,740,286

74,284

92,005

$1,908,294

$1,832,291

$2,323,151

$2,149,393

REVENUES Contributions Other Total Revenues EXPENDITURES Risk Management Administration Risk Management Operations Total Expenditures Income/(Loss) Ending Fund Balance*

310,945

427,176

$2,634,096

$2,576,569

(725,802) $2,984,198

(744,278) $2,965,722

*Per GASB Statement 10, an additional $1,165,402 in cash is currently held in the Risk Management fund to cover potentially incurred liabilities as of the beginning of the year. This figure was reached by Risk Management’s actuary for 2016.

19


Computer Fund & Print Services Fund Overview The Computer Fund provides resources for both ongoing maintenance and replacement of the City’s computers, network hardware, and other electronic infrastructure. It is funded with contributions by all City departments based on their levels of use of this technology. The Print Services Fund provides ongoing capital support for the City’s printing needs. Because these two funds operate to support combined activities within the Innovation and Technology Department, the financial reporting is combined for these two funds. Computer Fund/ Print Services Fund

2016

2016

Budget

Actual

$6,848,000

$6,848,000

Maintenance

$950,006

$933,722

Replacement

971,449

1,381,793

Beginning Fund Balance REVENUES

Print Shop

471,780

379,842

$2,393,235

$2,695,356

Maintenance

$1,315,060

$950,135

Replacement

2,456,639

785,237

Total Revenues EXPENDITURES

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

438,772

305,795

$4,210,471

$2,041,167

(1,817,236) $5,030,764

654,190 $7,502,190

Revenue Highlights Revenues in the Information Technology Fund have remained on track for 2016. The excess of $394,000 from the planned budget was due to reimbursements for functions related to the Police Dispatch Center, Technology Security, and other business system needs. Print Shop revenues are down 1.8% compared to 2015 and almost 19.5% compared to budget.

Expenditure Highlights Expenditures for the replacement and maintenance of technology systems covered under the Information Technology Fund remained under the allocated budget. Proper planning for the upgrade and replacement of a few large systems - specifically the Enterprise Backup System and upgrades to the Police CAD/RMS - took longer than expected. These expenditures will be moved into 2017. There were also a few unplanned expenses related to the Document Imaging System, GIS System and HR System in the fourth quarter of 2016. These systems all had funds currently saved or transferred into the Information Technology Fund to cover the expenses. Increases in maintenance costs for some technologies were presented to the Budget Committee for the 2017-2018 Budget. The City is seeing new costing models based on capacity and/or performance of certain systems. Appropriate planning is being done to make adjustments to technology in order to stay within the revenues appropriated. The Print Shop expenditure budget remained on track for 2016 and was able to meet the needs of City operations. Starting in 2017, the management of the Print Shop will be moved to the Community and Civic Engagement program within the City Manager’s Office as the functions provided by the Print Shop are better aligned with the overall function of both employee and external communications.

20


Vehicles Overview The Vehicles Fund provides resources for the maintenance of City vehicles and heavy equipment and/or replacement. It is funded with contributions by all City departments based on their vehicle inventory and use. 2016

2016

Revenue Highlights

Budget

Actual

$6,697,000

$6,697,000

Due to a high number of vehicle retirements in 2016, substantial gains from the sale of retired units are reflected in the Other Revenues. All other revenue sources are in line with budget.

Maintenance Transfers

$2,413,967

$2,440,388

Expenditure Highlights

Replacement Transfers

1,198,805

1,251,160

146,230

491,527

$3,759,002

$4,183,075

Maintenance

$2,964,256

$3,062,039

Replacement

4,086,879

3,981,607

Total Expenditures

$7,051,135

$7,043,646

Income/(Loss)

(3,292,133)

(2,860,571)

Ending Fund Balance

$3,404,867

Vehicles Fund Beginning Fund Balance REVENUES

Other Total Revenues EXPENDITURES

For 2016, Fleet acquisitions included several vehicles, including seven dump trucks valued at over $200,000 each, as well as dozens of pieces of equipment. Budgeted Maintenance Expenditures included $586,000 for the construction of a new storage building at the Indiana Shops, which will include a PD weapons testing range. Construction was completed in 2016.

$3,836,429

Buildings Overview The Buildings Fund provides resources for maintaining major portions of facility infrastructure as replacement becomes necessary. The primary types of infrastructure are HVAC equipment, parking lots, roofs, and carpet. It is funded with contributions by all City departments based on their facility occupancy. Building Fund

2016

2016

Revenue Highlights Monthly replacement charges from contributing funds were generally increased by 3.0% for 2016. The shortfall of Actual to Budget was due to the Arvada Center leaving the City in July of 2016.

Budget

Actual

$2,893,000

$2,893,000

$ 460,217

$ 405,238

160,011

133,418

$ 620,228

$ 538,656

Replacement

$ 680,067

$ 120,172

Capital Lease

124,546

100,436

$ 804,613

$ 220,607

Beginning Fund Balance REVENUES Replacement Transfers Other Total Revenues EXPENDITURES

Total Expenditures Income/(Loss) Ending Fund Balance

(184,385) $2,708,615

Expenditure Highlights The Capital Lease Expenditures represent payments per an agreement with Siemens Building Technologies in 2004 for energy-efficiency improvements at various City facilities. The term of this lease expired in 2016. Several HVAC replacements scheduled for the past couple of years are being deferred to 2017 in order to exploit better pricing with economies of scale. This represents the gap between the Replacement Budget and Actual.

318,049 $3,211,049

21


Arvada Economic Development Association (AEDA) Overview AEDA was established to encourage and stimulate all forms of economic development – commercial and industrial. The services provided by AEDA benefit both the City and citizens by providing information and services to existing and prospective businesses and industries. AEDA is funded by a transfer from the General Fund for services it renders to the City and its citizens. The City also provides administrative support for AEDA. A Board of Directors appointed by City Council governs AEDA.

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

Expenditure Highlights In most years, revenues and expenditures are budgeted at the same levels. In 2016, the year-end expenditure appropriation was increased to include a $200,000 one-time new business development grant and $75,000 for a new sales tax licensing module (which was subsequently postponed). The increased expenditures were paid from the fund balance. Operating expenditures in 2016 are lower than budget, primarily due to reduced spending in professional services, training, printing and postage.

Revenue Highlights Revenues in 2016 consist of a cash contribution from the City of Arvada for $500,000 and interest income.

Expenditure Highlights Expenditures in 2016 reflect 29 AEDA small business grants. The grants were used to help Arvada businesses improve signage, landscaping, facades, and various site improvements.

Operations Beginning Fund Balance

2016

2016

Budget

Actual

$ 398,223

$ 398,223

791,159

779,840

Expenditures

1,055,560

908,397

Ending Fund Balance

$ 133,822

$ 269,666

Revenue

Program Beginning Cash Balance Revenue

12/31/2016 $845,645 501,944

Expenditures

(465,802)

Ending Cash Balance

$881,787

Reserved for Job Creation Program Reserved for Economic Impact Fund Reserved for New Entrepreneur Program Reserved for Targeted and Professional Services Arvada Manufacturing Initiative

(3,000) (300,000) (19,500) (5,902) (24,300)

Commitments

(339,489)

Available Un-allocated Cash Balance

$189,596

Arvada Economic Development Association

22


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

City of Arvada Investment Report

Investment Portfolio Overview The yields in the first half of 2016 were moving in the downward trajectory until they hit bottom in July after the Brexit vote. A 10-year Treasury note yield dropped nearly 85 basis points (bps) in the first six months of the year. Lower interest rates triggered a wave of investment calls. As a result, $88 million of callable securities in the City’s portfolio have been redeemed. The second half of 2016 looked a lot more optimistic even though the presidential elections added more uncertainty and volatility into the markets. With all the events taking place domestically and globally, the Federal Reserve’s early projections of three interest rate hikes in 2016 did not happen. Instead, the federal funds target rate was raised only once in December. In 2016, the City’s portfolio saw a year-to-date yield of 1.005%, an increase of 23 bps compared to 2015. This increase translates into $1,822,678 in total investment revenues for 2016. The City’s portfolio continues to grow year over year. The portfolio’s net assets increased from the prior year’s level by more than $6 million. Portfolio composition has changed significantly during the year. The goal was to get better diversification between all types of allowable securities. We have increased holdings in corporate notes to pick up higher yield on the shorter end of maturities. We also reallocated a portion of the Federal Agencies to US Treasuries, which offer higher liquidity and better value in the tight spread trading environment. The City’s portfolio outperformed its composite benchmark by 9 bps. From the chart on the next page, we can see a steady improvement in the portfolio’s yield in the past four years. We anticipate this trend to continue as the rates keep rising.

23


Key information regarding the City’s portfolio is shown in the following tables and graphs:

PORTFOLIO PERFORMANCE

PORTFOLIO CHANGES 2016

2015

Difference

2016

2015

Difference

$1,822,678

$1,341,747

$480,931

Money Market

$149,040

$114,762

$34,278

Portfolio Yield

1.005%

0.779%

0.226%

Savings/Cash

3,389,502

3,645,820

(256,318)

Benchmark Yield

0.914%

0.600%

0.314%

CD

14,994,523

15,088,055

(93,532)

Tracking Error

+9bps

+18bps

-9bps

Corporate

26,662,000

8,987,000

17,675,000

LGIP

29,591,167

29,382,054

209,113

U.S. Agency

77,250,000

127,050,000

(49,800,000)

U.S. Treasury

38,580,000

Interest Earnings

Total

-

$190,616,231

PORTFOLIO YIELD VS. CUSTOM BENCHMARK

$184,267,691

38,580,000 $6,348,540

ACCOUNT SUMMARY

1.60%

Par Value

$190,616,231

1.40%

Book Value

$191,437,825

Market Value

$190,252,761

1.20% 1.00%

Unrealized Gain/(Loss)

0.80%

$(1,185,063)

0.60% 0.40%

PORTFOLIO CHARACTERISTICS

0.20%

Average Duration (yrs)

0.00% 2010

2011

2012

2013

2014

Portfolio Yield

2015

2016

Benchmark

Average Coupon

1.168%

Average Cost YTM

1.202%

Average Market YTM

1.377%

MATURITY DISTRIBUTION 25.0% 20.0%

20.5%

PORTFOLIO ALLOCATION 22.0%

17.4%

15.0%

15.9% 11.8%

2.23

U.S. Treasury, 20.2%

12.3%

Savings/Cash, Money 1.8% Market, 0.1% CD, 7.9% Corporate, 14.0%

10.0% 5.0% 0.0%

0-.25

.25-1

1-2

2-3

Maturity (years)

3-4

4-5

U.S. Agency, 40.5%

24

LGIP, 15.5%


City of Arvada Investments - Year-End 2016 The City’s portfolio as of December 31, 2016 is shown below, which includes credit ratings as of December 31, face value and actual interest earnings for 2016. Description

CUSIP/Ticker

Credit Rating 12/31/2016

Coupon Rate

Maturity Date

Ending Face

Interest

Amount/Shares

Dividends

SAVINGS/CHECKING JPMorgan Savings

CHASE

N/A

0.08%

N/A

JPMorgan Checking

CHASE

N/A

0.36%

N/A

Sub Total Savings/Checking

2,507

83

3,386,995

-

3,389,502

83

CERTIFICATE OF DEPOSIT Vectra Bank

6376

N/A

0.90%

11/29/2017

1,011,215

3,037

Vectra Bank

6384

N/A

0.90%

11/29/2017

1,011,215

3,037

Vectra Bank

6392

N/A

0.90%

11/29/2017

1,011,215

3,037

Vectra Bank

6400

N/A

0.90%

11/29/2017

1,011,215

3,037

Vectra Bank

6343

N/A

0.75%

06/29/2021

5,064,804

18,905

Vectra Bank

6350

N/A

0.75%

07/07/2021

5,062,016

15,889

Vectra Bank

6368

N/A

0.80%

08/09/2021

822,842

1,837

14,994,523

48,781

Sub Total Certificate Of Deposit CORPORATE Exxon Mobil

30231GAA0

AAA

0.92%

03/15/2017

1,500,000

13,815

Chevron Corp.

166764AE0

AA2

1.72%

06/24/2018

4,000,000

68,720

Exxon Mobil

30231GAP7

AAA

1.71%

03/01/2019

3,000,000

25,335

Apple Inc.

037833AQ3

AA1

2.10%

05/06/2019

3,000,000

31,500

Toyota Motor Cr.

89236TDE2

AA3

1.40%

05/20/2019

2,000,000

14,000

Wells Fargo Bank

94988J5D5

AA2

1.75%

05/24/2019

2,000,000

16,722

Microsoft Corp

594918BG8

AAA

2.00%

11/03/2020

2,992,000

59,840

18,492,000

229,933

Sub Total Corporate LOCAL GOVERNMENT INVESTMENT POOL C Safe LGIP

CSAFE

AAAm

0.67%

N/A

2,520,055

29,122

Colo Trust LGIP

COLOTRUST8001

AAAm

0.88%

N/A

22,648,375

166,011

Colo Trust LGIP

COLOTRUST8004

AAAm

0.88%

N/A

125,062

887

Colo Trust LGIP

COLOTRUST8008

AAAm

0.88%

N/A

4,111,995

29,132

Colo Trust LGIP

COLOTRUST8010

AAAm

0.88%

N/A

185,680

746

29,591,167

225,898

Sub Total Local Government Investment Pool MONEY MARKET CSIP MM

CSIP

AAAm

0.32%

N/A

124,401

9,639

UMB Money Market

UMB

N/A

0.07%

N/A

24,639

1,405

149,040

11,044

5,000,000

30,000

Sub Total Money Market US AGENCY FHLB

313382TR4

AAA

0.60%

04/24/2017

FHLB

313382W25

AAA

0.75%

08/15/2017

FHLMC

3134G5A21

AAA

1.15%

12/26/2017

5,000,000 5,000,000

37,500 57,500

Chart continues next page

25


Description

CUSIP/Ticker

Credit Rating 12/31/2016

Coupon Rate

Maturity Date

1.05%

05/30/2018

Ending Face

Interest

Amount/Shares

Dividends

FHLB

3130A5UU1

AAA

FNMA

3136G2R58

AAA

1.04%

10/26/2018

1,250,000

12,892

FHLMC

3134G8HN2

AAA

1.26%

01/25/2019

4,000,000

25,200

FFCB

3133EFKY2

AAA

1.36%

10/28/2019

5,000,000

68,000

FNMA

3136G2SU2

AAA

1.50%

11/25/2019

5,000,000

75,000

FNMA

3136G2RB5

AAA

1.43%

12/27/2019

2,500,000

35,750

FHLMC

3134G9DC8

AAA

1.32%

02/10/2020

3,000,000

9,900

FFCB

3133EFK63

AAA

1.25%

03/04/2020

3,000,000

18,750

FFCB

3133EGKM6

AAA

1.00%

07/06/2020

3,000,000

-

FHLB

3130A8M67

AAA

1.20%

07/13/2020

3,000,000

-

FHLMC

3134G73S8

AAA

1.00%

10/29/2020

5,000,000

50,000

FHLMC

3134G7S77

AAA

1.13%

10/29/2020

5,000,000

56,250

FHLMC

3134G9HL4

AAA

1.63%

11/25/2020

4,000,000

32,500

FAMC

3132X0MT5

AAA

2.00%

01/15/2021

2,000,000

-

FFCB

3133EFF28

AAA

1.65%

03/01/2021

2,000,000

16,500

FNMA

3136G3MD4

AAA

0.90%

05/12/2021

3,000,000

13,500

FHLB

313379RB7

AAA

1.88%

06/11/2021

4,000,000

37,500

Subtotal Agency

3,000,000

31,500

72,750,000

608,242

$ 188,715,218

$ 622,316

2,000,000

16,250

2,000,000

16,250

141,366,231

1,140,230

US Treasury Note

36,580,000

154,285

Federal Agency

4,500,000

9,941

Corporate Notes

4,170,000

15,773

Commercial Paper

2,000,000

-

Certificate of Deposit

2,000,000

2,640

Totals US TREASURY T-Note

912828M98

AAA

Subtotal Treasury Subtotal City's Portfolio

1.63%

11/30/2020

SUMMARY OF MANAGED PORTFOLIO

Subtotal Managed Portfolio Totals

49,250,000

182,639

190,616,231

1,322,869

Investment Management Focus - 2017 In December, the Federal Reserve raised short-term interest rates by 25 basis points (bps) to a range of 0.50-0.75%. The FOMC also released a forecast for three rate hikes in 2017. However, market participants currently expect a more modest rise. A slow pace of rate hikes is consistent with our stance for a neutral duration for our portfolio. We will continue to focus on diversification of maturities. We will keep a portion of our portfolio in LGIP, money markets, and cash balances at levels to meet operating needs and capture attractive interest rates. We will continue to use a blended strategy, which calls for emphasis in short-term positions as well as some long-term positions (five years in the City’s case), but also staggering maturities in between to smooth the revenue stream. This will allow ample cash should the City experience unexpected needs and allow us to take advantage of better coupons in longer maturity buckets. As interest rates rose, Federal Agency spreads widened modestly in December from near their tightest levels in 2016. 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 one year. A combination of callable and non-callable securities will allow us to enhance investment income over the LGIP funds and not to subject the City’s portfolio to excessive turnover if interest rates fall.

26


Performance

With attention to the City’s emphasis on setting and measuring organizational objectives, this Performance section has been created with the intent that it will highlight just a few of these many goals. This data is used to analyze and understand the effects of strategical decisions, which in turn allows leadership and management to respond to the changing needs of our community and our customers.

The ultimate intent is for the City to continue its efforts to achieve and maintain service excellence by building a datadriven, results-oriented, customer-focused and responsive organization and, in doing so, to be responsible stewards of our valuable resources.

CITY COUNCIL

City Council - Strategic Goal By 2019, create $350 million in private sector capital investments (buildings, furniture, fixtures, and equipment) 2014: $ 88,228,000 2015: 80,916,000 2016: 108,774,285 Total: $ 277,918,285

City Council - General Fund Ending Fund Balance by Quarter CITY COUNCIL

Compared to Fund Balance Goal of 17% of Budgeted Expenditures

Fund Balance Goal

60%

General Fund Reserves

50% 40% 30% 20% 10% 0%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016

27


HUMAN RESOURCES PUBLIC WORKS

Human Resources - Performance Metrics Unemployment 2014 2015 2016

ARVADA 3.7% 3.0% 2.5%

COLORADO 4.2% 3.3% 3.0%

Streets - Performance Metrics Repairs Sidewalk, Curb & Gutter Potholes Patched Square Yards of Patching

2014 1,961 l.f. 4,931 14,043

2015 2,293 l.f. 9,404 11,698

2016 1,660 l.f. 6,076 12,625

UTILITIES

Building Inspection & Investigation - Performance Metrics 98% of Inspections Conducted on the Day Scheduled Building Inspections Conducted 100% 95% 90% 85% 80%

FINANCE

75%

March

June

September

December

Finance - Performance Metrics 40% of businesses will file sales and use tax returns online by end of year 2016.

Returns Filed Online

40.00% 35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00%

Mar-15

Jun-15

Sep-15

Dec-15

28

Mar-16

Jun-16

Sep-16

Dec-16


Solana - R. Adler

Finance Department • 8101 Ralston Road • Arvada, Colorado 80002 720-898-7120 • www.arvada.org Contributors: Bryan Archer, Director of Finance Lisa Yagi, Assistant Director of Finance Ryan Adler, Budget Analyst Deanne Gibboney, Budget Analyst Debra Nielson, Controller Arlene Martinez, Executive Assistant Vesta Weinhauer, Treasury Analyst

Profile for City of Arvada

City of Arvada Year-End 2016 Financial Report  

City of Arvada Year-End 2016 Financial Report