city of arvada 1st qtr 2013 financial report

Financial Report2013 First Quarter

Table of Contents

2013 Outlook .......................................................................1

General Fund ................................................................... 2-6

Arvada Center ..................................................................... 7

Parks Fund ....................................................................... 8-9

Special Revenue Funds .................................................. 10-11

Capital Improvement Fund ........................................... 12-13

Enterprise Funds ............................................................ 14-17

Internal Service Funds ...................................................18-20

Arvada Economic Development Association ..................... 21

City of Arvada Investment Report ............................... 22-24

1

overview OVERVIEW

2013 OutlookThe same revenue trends that we saw in 2012 are continuing through the first quarter of 2013. Sales tax receipts are 7.67% higher than the first quarter of 2012.

Grocery store and general department store receipts, the two largest categories of sales tax, continue to increase over prior year receipts. Another growing

sector of sales tax includes the fast food, fast casual and restaurant categories, all of which are still showing increases. The one lagging category that we saw

in 2012 was sales tax from public utilities. Although we have experienced a dry winter, a few weeks of cold weather caused a 1.75% increase in this source of

sales tax. This source of sales tax is impacted by the weather and temperatures in summer and the first part of the winter. We are also experiencing growth in

building and auto-use tax. While one quarter certainly does not constitute a trend for 2013, the results are positive and speak to a growing economy.

Water revenues in the first quarter increased slightly from 2012 as many customers started watering due to a dry winter through March. As we approach the

summer months, there are concerns of reduced water consumption as Denver Water declared mandatory water restrictions and temporary drought surcharges

from April through September. Because the City obtains most of its water from Denver Water, we must adopt equivalent water restrictions that Denver Water

imposes on its Denver customers. This will result in reduced water revenues during the summer months. We will look at reducing expenditures to offset the

reduction in revenues. However, a majority of these are necessary to maintain the water system regardless of the amount of water used by our customers.

The City’s other two utilities, Wastewater and Stormwater, are operating within the budget. Tap fee revenues in Wastewater are outpacing 2012 revenues as we

continue to see growth in housing. Expenditures are slightly ahead of last year as the timing of the main replacement project is ahead of last year. Stormwater

revenues should be on pace with 2012 as there was no change in the stormwater fee. The Stormwater Fund will see a major capital expenditure of over $5 million

in 2013 related to the completion of the Garrison Street Bridge and channelization project.

It is still very early to predict how the Golf Fund will fare in 2013. Both golf and restaurant revenues are down compared to first quarter 2012. This decrease can

be attributed to the abnormally warm winter in 2012 compared to a cooler and wetter winter in 2013. Restaurant revenues are down due to the remodeling at

both West Woods and Lake Arbor, which necessitated closures at both restaurants, with West Woods’ restaurant closure lasting three weeks.

Hospitality Services is off to a slower start than in 2012; however staff is able to reduce expenditures when the level of bookings decreases. There are also

planned capital replacement projects this year which will close the facility for one month, and which will have an effect on revenues.

The established rates for the internal service funds are sufficient to cover expenditures and planned replacements in these funds. The transfers in these funds

are at 2012 levels. Major replacements for 2013 include the computer–aided dispatch management system, desktop/laptop computer replacement, mobile data

systems for police vehicles, a new street sweeper, and the second order of new Ford Interceptors.

Again, it is very early in the year to predict the financial results of 2013. However, the positive trends in revenue appear to be continuing in an encouraging

manner.

2

general fund GENERAL FUND

General Fund2013

Budget

As of

3/31/13

As of

3/31/12

Beginning Fund Balance $22,965,000 $22,965,000

REVENUES $67,932,479 $12,627,684 $11,206,774

EXPENDITURES

Ongoing $65,649,288 $11,787,477 $11,374,022

Capital 3,217,466 - -

JPPHA - 155,000 200,000

AEDA - - 500,000

2013 Expenditures $68,866,754 $11,942,477 $12,074,022

Income/Loss (934,275) 685,207 (867,240)

Ending Fund Balance $22,030,725 $23,650,207

General Fund OverviewThe 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:

• OperationalsupporttotheArvadaCenter

• OperationalsupporttotheParksFund

• GeneralDebtServicepayments

• TransfertotheCapitalImprovementsFundfornewparks,

transportation and other infrastructure projects

The following table provides a comparison of budgeted cash balances,

revenues and expenditures to budget and prior year amounts in the

same areas.

As the table illustrates, we began the year with $22,965,000 in cash

reserves. Of this amount, $3,680,903 was reserved for projects that

were started in 2012 but not scheduled to be completed until 2013

(carryover items). In addition, since expenditures of $68,866,754

exceeded revenues of $67,932,479, Council made a decision in 2012 to

use $934,275 of cash reserves to balance the 2013 budget. Details of the

carryover items will be shown in the mid-year report as approval of the

carryover items did not occur until after the close of the first quarter.

In general, revenues are in line with the budget estimates for the

majority of revenue categories. The major revenue categories of sales

tax, use tax, property tax and intergovernmental revenues are discussed

in more detail in the “Revenue Highlights” section. The investment

report at the end of this report will provide details of the City’s

investments. Investment revenue will most likely be short of budget

because of the current investment environment which is not expected to

improve in 2013.

3

Expenditures in 2013 are slightly less than expenditures in 2012. This is due to the one-time transfer of $500,000 to AEDA made in 2012. If the transfer is

removed, expenditures are 3.1% more in 2013 than in 2012. This increase is expected as personnel-related expenditures were budgeted to increase 3.9% as a

result of step and market increases and non-personnel related expenditures increased an average of 3%.

Revenue HighlightsThe following section highlights the sources generated to meet the operating expenditures of the General Fund. The City’s revenues come from many sources as

illustrated in the graph below. Sales tax, use tax, property tax and intergovernmental revenues are the largest sources of revenue and are detailed in the next

few pages. 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.

GENERAL FUND REVENUE

Sales Tax55%Utility Fees

7%

Building Activity5%

Property Tax7%

Intergovernmental7% Use Tax

8%

Administrative Services

4%

All Other7%

4

SALES TAX COLLECTIONS

USE TAX COLLECTIONS

Sales Tax

Use TaxThe City has three prime use tax types: general,

building and automobile. These are taxes paid in

lieu of sales tax on purchases.

Sales tax collections in 2013 are continuing the

upward trend from 2012. The graph below shows

actual sales tax collections. Sales tax collections lag

one month; therefore, the first quarter collections

represent sales tax collections for two months.

Sales tax receipts for the first quarter in 2013 are

7.67% above 2012 actuals.

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

$1,600,000

$1,800,000

03/31/2008 03/31/2009 03/31/2010 03/31/2011 03/31/2012 03/31/2013

Building Auto General

$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

$7,000,000

03/31/2008 03/31/2009 03/31/2010 03/31/2011 03/31/2012 03/31/2013Sales Tax $5,549,908 $5,233,376 $5,252,127 $5,335,005 $5,620,783 $6,051,902

Property Tax

PROPERTY TAX COLLECTIONS

$0

$500,000

$1,000,000

$1,500,000

$2,000,000

03/31/2008 03/31/2009 03/31/2010 03/31/2011 03/31/2012 03/31/2013Property Tax $1,646,477 $1,552,911 $1,500,684 $1,361,462 $1,723,913 $1,611,945

The City’s property tax rate is 4.31 mills per $100

of valuation. In Colorado, the mill is placed on

the assessed valuation. The graph illustrates the

collections for the past five years and the first

three months of 2013.

Budgeted sales tax collections for 2013 represented

a 3% increase over the 2012 budget. Because

of increased sales tax collections in 2012, 2013

budgeted sales tax of $35,589,702 represents

a 1.7% over 2012 actuals. As the next ten-year

financial plan is reviewed, future sales tax will be

revised to reflect the 2012 actual collections.

For the first two months of 2013, general use tax

is showing a 4.2% increase over 2012 first quarter

collections. Building use tax for 2013 is at $764,557

which is a 54.7% increase over 2012 first quarter

collections. We expect building use tax to exceed

budget estimates in 2013 as the ten-year financial

plan anticipated growth, but not as quickly as we

have seen in the last 16 months. The 2013 budget

for use tax is $7,647,510.

Consumers continue to purchase vehicles. Auto use

tax collections are showing a 15.2% increase over

the previous year.

Property tax is a stable revenue source for the

City. Currently, property tax receipts are $112,000

below first quarter 2012 receipts.

5

Intergovernmental RevenuesThis 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 five years and are

budgeted for $4.7 million in 2013. Road and

Bridge funds are disbursed a couple months

after collection, so we will not receive January’s

revenue until early April. HUTF funds are

disbursed the month after they are collected, so

the graph represents two months’ revenue.

INTERGOVERNMENTAL REVENUES

Expenditure HighlightsThe largest expenditure in the General Fund is personnel costs which account for 52% of expenditures.

GENERAL FUND EXPENDITURES

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

03/31/2008 03/31/2009 03/31/2010 03/31/2011 03/31/2012 03/31/2013

HUTF Jefferson County

Personnel52%

Transfers12%

Debt Service6%

Services & Charges10%

Supplies & Expenses

7%

Contracts12% Misc.

1%

6

PERSONNEL 2013 Budget As of 3/31/13 As of 3/31/12

Salaries & Wages $27,687,938 $4,970,781 $4,944,439

Vacancy Savings (861,394) - -

Overtime 903,476 154,155 145,981

Group Insurance 4,701,740 865,464 775,678

Retirement 3,172,604 584,910 581,183

Medicare 321,853 58,837 57,300

Temporary Wages & SS 542,216 52,872 36,423

Other 332,149 83,295 81,244

Total $36,800,582 $6,770,313 $6,622,249

Heightened use in Traffic Engineering, Building Inspection, Streets, and Facilities Management represents the bulk of

the increase in Temporary Wage expenditures. The General Fund is currently on pace to meet the budgeted Vacancy

Savings total for 2013.

Fuel 2013 Budget As of 3/31/13 As of 3/31/12

General Fund $536,447 $114,769 $120,145

Parks 202,185 22,869 28,166

Police Tax Increments 50,204 12,560 12,382

Utilities 225,929 28,536 31,259

Other 63,094 3,877 5,810

Total Expenditures $1,077,859 $182,610 $197,762

Salary and Benefit Savings

7

arvada centerARVADA CENTER

Arvada CenterArvada Center 2013 Budget As of 03/31/13 As of 03/31/12

Beginning Fund Balance $232,000 $232,000

REVENUES

Generated $6,138,453 $826,740 $821,722

SCFD 1,065,020 283,286 248,320

City Cash Transfer 1,643,122 410,780 410,780

City In-Kind Transfer 2,000,000 - -

Total Revenues $10,846,595 $1,520,806 $1,480,822

EXPENDITURES

Ongoing $8,844,820 $1,545,117 $1,537,068

In-Kind 2,000,000 - -

Total Expenditures $10,844,820 $1,545,117 $1,537,068

Income/(Loss) 1,775 (24,311) (56,246)

Ending Fund Balance 233,775 207,689

performance production was on track to match or exceed the

2012 PHAMALY production; however, a sold-out performance

was canceled due to the weather. The cancellation resulted in

approximately $12,000 refunded to patrons. The production still

made net positive revenue, but did not meet previous results or

current-year expectations. The other production in the Black Box,

and part of our subscription series, was Blithe Spirit. The play

performed well, meeting projections and garnering critical acclaim.

AC Presents is down a little over $75,000 compared to 2012. Lone

Tree had made a down payment in the first quarter of 2012 of

$50,000 for their presentation of Chess.

Revenues from Education classes are up $10,000 from last year.

This growth is primarily due to a tuition increase. This is the

second year the Center successfully offered Spring Break camps.

With the recovering economy, SCFD revenue collections increased

in 2012. This growth will result in an increase in the SCFD

contribution to the Center for 2013. The amount for the first

quarter was an increase of $35,000, or 12% over the 2012

contribution.

Expense HighlightsOverall, expenses are tracking upward, with most of the increase

related to Payroll and Benefits. Historically, expenses are not out

of line in the first quarter of the year. Previous experience shows

that expenses can easily ratchet up in the third and fourth quarters.

Therefore, the Center is taking a proactive approach and addressing

issues related to show costs and personnel expenses now.

Revenue HighlightsFirst quarter results at the Arvada Center have been positive overall. Ticket sales

had an overall increase of $57,000 or 10.62% from last year. This increase is mainly

due to the success of Man Of LaMancha, the spring musical. The show exceeded sales

projections significantly and will also contribute some revenue to the second quarter.

Two other theater productions took place in the first quarter. The first was “The

Foreigner” presented by PHAMALY in partnership with the Arvada Center. This three-

8

parks fund PARKS FUND

Parks FundParks Fund 2013 Budget As of 3/31/13 As of 3/31/12


REVENUES

Generated $184,618 $25,282 $25,477

Open Space 3,398,539 261,769 250,590

APEX Reimbursement 927,000 - -

City Cash Transfer 2,883,545 720,886 702,011

Total Revenues $7,393,702 $1,007,937 $978,077

EXPENDITURES

Ongoing $7,408,892 $1,162,525 $1,144,372

Capital - - -


Income/(Loss) (15,190) (154,588) (166,295)


Revenue HighlightsJefferson County Open Space receipts, which represent the

largest source of revenue for the Parks Fund, continue to trend

up nearly 4.5% over 2012 during the same period. However,

year-to-date receipts reflect only one month of revenue as this

revenue source lags by two months.

Expenditure HighlightsAn approximately 4% decrease in personnel expenditures

was offset by increases in professional services and internal

service fund contributions, resulting in a year-to-date increase

of 1.59%.

9

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Open Space Cash Transfer APEX

As of 3/31/11 As of 3/31/12 As of 3/31/13 2013 Budget

PARKS FUND REVENUE

10

special revenue funds SPECIAL REVENUE FUNDS

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

2013 Budget As of 3/31/13 As of 3/31/12


REVENUES

Sales Tax / Audit Revenue $6,132,531 $968,415 $881,615

Use Tax 1,148,832 269,107 209,520

Other 51,168 42,418 3,373

Total Revenues $7,332,531 $1,279,940 $1,094,507

EXPENDITURES

Ongoing $7,068,514 $1,342,525 $1,332,517

Capital $8,000,000 $106,729 -


Income/(Loss) (7,735,983) (169,313) (238,010)


Special Revenue Funds OverviewSpecial Revenue Funds account for revenues that are to be used for

specific purposes. The following are considered special revenue

funds:

• TaxIncrementFunds

• CommunityDevelopment

• Housing

Tax Increment Funds OverviewThere are two tax increment funds which account for the voter-

approved sales tax increases to fund expanded police services.

The first fund accounts for the .21 cent sales tax for police services

and the second accounts for the .25 cent sales tax. Sources in the

tax increment fund include sales tax, general use tax, auto use

tax, building use and interest income. Since the tax increment is in

addition to the City’s 3% sales tax, the revenue trends in the tax

increment fund will closely follow those in the general fund.

Revenue HighlightsSales tax, building use tax, and auto use tax receipts continued

their upward trends into 2013. Total tax revenues were up 13.4%

versus the first quarter of 2012.

Expenditure Highlights Costs associated with the construction of two new community

stations dominate the 2013 budgets for the two Tax Increment

Funds. Each fund will bear the cost of a community station.

11

special revenue funds Community Development

Community Development Fund 2013 Budget As of 3/31/13 As of 3/31/12


REVENUES

Recovered $114,737 $156,539 $25,340

Grants 638,000 45,266 19,469

City Cash Transfer 45,000 11,250 11,250

Interest/Other 19,500 2,908 456,123

Total Revenues $817,237 $215,962 $63,393

EXPENDITURES

Ongoing $591,852 $180,540 $78,865

Essential Home Repairs 380,625 93,796 28,250

Loans 67,958 - -


Income/(Loss) (223,198) (58,374) (43,722)


Both the timing of the City Cash Transfer to the Arvada

Housing Authority due to changes in federal reporting

practices and $57,042 provided to Family Tree for housing

and family emergency supportive services represent the

increase in Ongoing expenditures.

Arvada Housing Authority

Arvada Housing Authority 2013 Budget As of 3/31/13 As of 3/31/12


REVENUES

Recovered $19,178 $9,500 $10,671

Grants 3,900,000 2,773,415 2,762,785


Interest/Other 5,464 1,455 933

Total Revenues $3,950,642 $2,803,129 $2,802,891

EXPENDITURES

Ongoing $380,323 $272,510 $273,257

Rents 3,532,200 2,942,589 2,776,379

Transfers 28,674 35,628 41,007


Income/(Loss) 9,445 (447,598) (287,751)

Ending Fund Balance $399,445 $(57,598)

The Arvada Housing Authority currently assists exactly

500 families with monthly rent subsidies. These subsidies

constitute approximately 90% of this Fund’s expenditures.

12

capital improvementCAPITAL IMPROVEMENT FUND

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

Revenue HighlightsIn 2013, the majority of the revenue in the CIP Fund consists of transfers from the General Fund, Risk Management Fund and Lands Dedicated Fund.

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

Expenditure HighlightsThe guiding principles for the City’s CIP Fund are identified as:

There are many CIP projects which fall into the Taking Lasting Care category. The City sets aside monies to replace or renovate the current infrastructure.

The projects for 2013 include collector street improvements, ADA ramps, intersection safety improvements, signal replacement, playground renovation,

trail renovation and tree replacement.

In 2011, the City purchased two large parcels for the South Central Park (to be named Griffith Station Park) and East Arvada Park (to be called Britton

Park). In 2013 we will begin construction of these parks which will be Building our Base.

In 2013, we are appropriating over $12 million for the transit-oriented development (TOD) projects along the Gold Line rail project. Although most of

the monies will not be spent in 2013, planning for this project must be started now to allow sufficient time for design and construction by opening day in

2016. The City, the Arvada Urban Renewal Authority (AURA) and the Regional Transportation District (RTD) are jointly issuing a request for proposal to

develop the eight-acre site for the Olde Town station. This is one example of Investing for the Future.

• TakingLastingCare

• BuildingOurBase

• InvestingfortheFuture

13

capital improvementCapital Improvement Fund 2013 Budget As of 3/31/13 As of 3/31/12


REVENUES

Total Revenues $4,590,966 $219,780 $128,112

EXPENDITURES

CIP Administration $13,200,000 $281,484 $965,231

CIP Street Projects 250,000 60,718 308,325

CIP Traffic Projects 2,172,000 85,766 146,856

CIP Park Projects 2,466,000 355,830 957,414

CIP Arvada Center Projects 678,500 32,032 49,571

Total Expenditures $18,766,500 $815,830 $2,427,397

Income/Loss (14,175,534) (596,050) (2,299,285)


Capital Projects

14

enterprise fundsENTERPRISE FUNDS

Enterprise Funds OverviewEnterprise funds account for activities that generate a fee that

makes the entity self supporting. The five enterprise funds in the

City are:

• WaterFund

• WastewaterFund

• StormwaterFund

• GolfFund

• HospitalityFund

Water FundThe 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 HighlightsYear-to-date revenue from water sales is up by 4.8 %, with

consumption up 2.8% over the same period in 2012. However,

we do not anticipate this trend to continue with mandatory water

restrictions and the five snow storms in April. The spike in Other

Revenues is due to a payment received from the Jefferson Center

Metropolitan District (JCMD).

Water FundWater Fund 2013 Budget As of 3/31/13 As of 3/31/12


REVENUES

Water Charges $19,053,224 $2,651,864 $2,530,542

Tap Fees 3,204,761 1,309,849 418,267

Interest 1,190,885 112,448 160,816

Other 667,875 4,482,865 636,764

Total Revenues $24,116,745 $8,557,026 $3,746,388

EXPENDITURES

Ongoing $16,003,618 $6,629,498 $2,731,406

Debt Service 2,265,300 - -

Major Capital Maintenance 4,046,252 616,871 871,798

Capital 38,842,708 18,514 60,070


Income/(Loss) (37,041,133) 1,292,142 83,113


Expenditure HighlightsFour million dollars of the year-to-date Ongoing Expenditures represent a payment

to Consolidated Mutual for water rights in the JCMD, which was covered by a

payment to the City from JCMD in January 2013. The year-to-date drops in both

Major Capital Maintenance and Capital are solely functions of timing. Over $37

million of the Capital budget represents the scheduled first major payment to

Denver Water for the Gross Reservoir Expansion project.

15

Wastewater FundThe wastewater fund accounts for all activities

necessary in the collection, transmission and

disposal of sewage and wastewater.

Revenue HighlightsReflective of the continued health of building

activity within the City, first quarter tap fee

revenues more than doubled over the first quarter

of 2012. The apparent drop in Sewer Charge

revenue is due to the timing of receipts.

Expenditure HighlightsCosts for the purchase of a new Manhole Spray

Lining System and associated maintenance

materials represent the vast majority of the

increase in ongoing expenditures. The timing of

payments for sewer main replacements represent

the increase in Major Capital Maintenance.

Charges from the Metro Wastewater Reclamation

District continue to represent nearly two-thirds of

all expenditures.

Wastewater Fund 2013 Budget As of 3/31/13 As of 3/31/12


REVENUES

Sewer Charges $11,248,581 $2,308,845 $2,478,408

Tap Fees 235,258 153,953 71,369

Interest 566,480 21,282 27,175

Other 577,416 3,555 6,275

Total Revenues $12,627,735 $2,487,636 $2,583,226

EXPENDITURES

Metro District $7,222,990 $1,805,748 $1,635,240

Ongoing 3,035,709 778,188 607,655

Major Capital Maintenance 1,904,762 193,560 22,189

Capital 154,500 - -


Income/(Loss) 309,774 (289,860) 318,143


Revenue HighlightsThe apparent drop in Stormwater Fee revenue is due to the

timing of receipts. The fee has remained at the same level

since 2009.

Expenditure HighlightsThe timing of the City’s annual contribution for the Rooney

Road Recycling Center and an accounting for uncollectible

utility charges as bad debt represent the rise in ongoing

expenditures. The increase in capital expenditures is

due to project work on the Garrison Street Bridge and Lee

Street Outfall projects in the first quarter.

Stormwater 2013 Budget As of 3/31/13 As of 3/31/12


REVENUES

Stormwater Fee $3,157,295 $723,609 $793,286

Other 66,480 18,460 53,883

Total Revenues $3,223,775 $742,069 $847,169

EXPENDITURES

Ongoing $1,882,648 $316,059 $208,112

Debt Service 933,288 233,122 233,122

Capital 3,928,050 196,011 56,452


Income/(Loss) (3,520,211) (3,123) 349,483


Stormwater FundThe Stormwater fund accounts for all activities

necessary to maintain a stormwater management

plan.

Wastewater Fund

Stormwater Fund

16

Golf FundGolf Fund 2013 Budget As of 3/31/13 As of 3/31/12


REVENUES

Golf $3,015,108 $277,040 $400,943

Restaurant 1,119,828 146,305 165,163


Total Revenues $4,336,230 $473,668 $620,974

EXPENDITURES

Golf $2,151,379 $342,374 $283,761

Restaurants 1,113,966 161,491 134,035

Administration 893,969 299,876 159,101

Capital 131,419 296,816 30

Total Expenditures $4,290,733 $1,100,558 $576,927

Income/(Loss) 45,497 (626,889) 44,047

Ending Fund Balance $677,497 $5,111

Rounds by Type - January thru March 2012/2013

WEST WOODS Regular Special Tournament Annual Senior Junior Other Total

2012 794 2,500 0 662 626 54 139 4,775

2013 0 1,389 0 410 62 12 62 1,935

-794 -1,111 0 -252 -564 -42 -77 -2,840

-100% -44% 0% -38% -90% -78% -55% -59%

LAKE ARBOR Regular Special Tournament Annual Junior Other Total

2012 1,687 2,122 0 2,867 51 170 6,897

2013 992 1,015 0 2,212 54 153 4,426

-695 -1,107 0 -655 3 -17 -2,471

-41% -52% 0% -23% 6% -10% -36%

Revenue HighlightsBoth Golf Course and Restaurant revenues were down

considerably compared to the first quarter 2012, respectively

31% and 11%. Weather played a substantial role in comparing

March 2012 to 2013. March 2012 is the anomaly due to a record

lack of precipitation, while March 2013 was both cooler and

wetter. Playable days were down 62% at West Woods and

down 52% at Lake Arbor. Cottonwood 9 at West Woods was

closed all three months to accommodate a ditch company siphon

project. As for the Restaurants, West Woods, which generates

a vast majority of total Restaurant revenue, lost three weeks

of business due to closure for remodeling. The Lake Arbor

Restaurant was closed for remodeling, as well, but for a lesser

period of time.

Expenditure HighlightsBoth the timing of debt payments and substantial capital

outlays represent the increases in expenditures for the first

quarter. The budget for Capital Expenditures was increased in

April per the carry-over ordinance to accommodate the costs

of completing the West Woods Cart & Equipment Building and

accompanying infrastructure upgrades to service electric carts.

17

Hospitality FundHospitality Fund 2013 Budget As of 3/31/13 As of 3/31/12


REVENUES

Banquets $973,117 $158,071 $176,906

Concessions 183,320 16,476 12,018

Miscellaneous 516,836 73,132 84,898

Total Revenues $1,673,273 $247,679 $273,822

EXPENDITURES

Administration $292,009 $46,423 $50,939

Operations 1,279,389 194,507 216,629

Capital 263,096 885 -

Transfer to General Fund 25,952 6,488 28,914


Income/(Loss) (187,173) (625) (22,660)


Revenue HighlightsBanquet and conference-related revenue saw a decline of

9.55% in comparison to 2012. This variance is due to the

number of organizations responding to internal scheduling

conflicts or the need to rotate demographically for their

organization. This shortfall is anticipated to level out

in April as anticipated revenue in April has increased

approximately $38,000 over 2012.

Expenditure HighlightsTotal actual expenditures decreased from first quarter

2012 by 16.25%. The transfer to General Fund monies

reflect the biggest portion of this percentage. However,

expenditures are expected to increase in 2013 due to the

capital replacement projects which will close the facility

for one month in 2013.

Expenditures are expected to increase in 2013 due to the capital replacement projects which will close the facility

for one month in 2013.

18

internal serviceINTERNAL SERVICE FUNDS

Internal Service Funds OverviewWe 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.

OverviewThe Insurance Fund, administered by the Risk Management Division

of Finance, provides the means by which the City self-insures

against loss. It is funded with contributions by all City divisions

based on their levels and types of exposure. The Fund is also used

for programs for loss prevention, the protection of City personnel

and the preservation of City property and assets.

Revenue HighlightsDue to continuing trends of relatively low claims costs and an

effective focus on safety, charges to participating funds were

reduced by nearly 13% for 2013.

Expenditure Highlights

The apparent spike in Administration costs is due to purchase

orders for renewals of the City’s insurance coverages being created

in March instead of April. Of note, the RM Administration budget

includes a $573,500 transfer to the Capital Projects Fund for three

safety-related projects in 2013: video security, front entry repair

and exterior lighting improvements at the Arvada Center.

*Per GASB Statement 10, an additional $935,705 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.

Risk ManagementRisk Management 2013 Budget As of 3/31/13 As of 3/31/12


REVENUES

Transfers 2,010,729 502,587 576,016

Other 67,980 20,465 30,086

Total Revenues $2,078,709 $523,053 $606,101

EXPENDITURES

RM Administration $2,540,540 $583,280 $479,171

RM Operations 622,527 134,314 134,193


Income/(Loss) (1,084,358) (194,541) -7,263


19

OverviewThe 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.

Revenue HighlightsCharges for Fleet Maintenance services, which include

personnel costs, rose 3% over 2012 levels. Increases

for Vehicle Maintenance transfers for some, but not all,

divisions net to a rise of 1.8%.

Expenditure Highlights A large piece of the increase in Maintenance expenditures

stems from the timing of an annual payment for the FASTER

electronic fleet management system. The decrease in

Replacement reflects the timing of a 2012 purchase order

for the acquisition of new Ford Police Interceptors. Among

this year’s acquisitions will be a new street sweeper.

Information Technology and Print ServicesInformation Technology and Print Services

2013 Budget As of 3/31/13 As of 3/31/12


REVENUES

Maintenance $959,712 $239,942 $239,928

Replacement 896,767 289,596 212,757

Print Shop 437,801 78,975 69,073

Total Revenues $2,294,280 $608,512 $521,757

EXPENDITURES

Maintenance $1,149,621 $295,837 $247,315

Replacement 972,295 156,742 965,557

Print Shop 403,825 88,723 55,999



Vehicles

Vehicles 2013 Budget As of 3/31/13 As of 3/31/12


REVENUES

Maintenance Transfers $2,196,638 $549,145 $533,177

Replacement Transfers 1,095,582 278,943 273,896

Other 136,177 49,547 68,204

Total Revenues $3,428,397 $877,635 $875,277

EXPENDITURES

Maintenance $3,746,934 $520,343 $481,046

Replacement 1,645,963 353,616 586,661


Income/(Loss) (1,964,500) 3,676 (192,431)


OverviewThe 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.

Revenue HighlightsComputer Maintenance and Replacement contributions

by participating Funds remain at 2012 levels. Recovered

costs associated with CAD maintenance are reflected in the

Replacement revenue increase.

Expenditure Highlights The substantial drop in Replacement expenditures is due to

the bulk of phone system replacement expenditures having

been made in the first quarter of 2012. Major projects for

the remainder of 2013 include computer-aided dispatch

management system , budget software replacement and

desktop/laptop computer replacement, as well as mobile

data systems for police vehicles.

20

Buildings

Buildings 2013 BudgetAs of

3/31/13As of

3/31/12


REVENUES

Replacement Transfers $407,351 $101,838 $101,838

Other 131,233 4,044 5,631

Total Revenues $538,584 $105,882 $107,469

EXPENDITURES

Replacement $60,925 $41,946 $58,080

Capital Lease 113,977 27,304 26,784

Total Expenditures $174,902 $69,250 $84,863

Income/(Loss) 363,682 36,631 22,606


OverviewThe 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.

Revenue HighlightsMonthly replacement charges from contributing funds

remain at 2012 levels.

Expenditure HighlightsThe Capital Lease expenditures represent payments per an

agreement with Siemens Building Technologies in 2004 for

energy efficiency improvements at various City facilities.

Among the projects funded in 2013 is the floor replacement

for the gallery at the Arvada Center, which was converted

to concrete in lieu of replacing the existing carpet.

21

Arvada Economic Development Association

Operations 2013 BudgetAs of

3/31/12As of

3/31/13


Revenue 754,000 188,547 182,306

Expenditures 730,683 168,111 169,267


Revenue HighlightsRevenue in the AEDA Operations Fund consists of a

transfer from the general fund equal to the personnel

and operating expenditures.

Expenditure Highlights Year-to-date expenditures in 2013 are at 23% of

budgeted expenditures and are comparable to 2012

expenditures. Salaries and benefits represent the

largest expenditure at approximately 53% of the

expenditures.

Program 2013

Beginning Cash Balance $1,135,001

Revenue 3,174

Expenditures (81,633)

Ending Cash Balance 1,056,542

Reserved for AEDA Loan Program (300,000)

Reserved for AEDA Small Business Grants (100,000)

Reserved for Job Creation Program (23,500)

Commitments (257,848)

Available Unallocated Cash Balance $ 375,194

Revenue HighlightsRevenues in 2013 consist of interest income and loan

payments from two loans.

Expenditure HighlightsExpenditures in 2013 reflect seven AEDA small business

grants. The grants were used to help Arvada businesses

improve signage, landscaping, facades, and site

improvements.

22

investment reportCITY OF ARVADA INVESTMENT REPORT

Investment Portfolio ObjectivesPursuant 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.

Investment Portfolio PerformanceThe portfolio saw a first quarter 2013 yield of .548% which is a decrease of 33bps when compared to the first quarter 2012 yield of .878%. The benchmark

yield for the City’s portfolio, as established by the investment policy, is a weighted benchmark of allowable securities. For the first quarter, the weighted

benchmark return was .37 percent, constructed using the average 2013 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 remains 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 $19 million in investment calls during the first quarter 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. An indirect benefit to the Arvada portfolio

has been the capital appreciation that has been attained in this time, although this is considered as “paper gains” and has no profound effect on the yield we

use to benchmark. The gain during the first quarter of 2013 was $242,231. Key information regarding the City’s portfolio is shown in the tables and graphs

below:

PORTFOLIO PERFORMANCE

YTD Mar-13 YTD Mar-12 Difference

Interest Earnings $303,680 $445,118 -$141,437

Portfolio Yield 0.548% 0.878% -0.330%

Benchmark Yield 0.370% 0.370% 0.000%

Tracking Error +18bps +51ps -24bps

PORTFOLIO CHANGES

01/01/2013 3/31/2013 Difference

Money Market $ 5,006,842 $5,009,265 $ 2,423

Savings/Cash 20,163,693 20,167,698 4,005

CD 19,270,465 19,285,268 14,803

Corporate 5,000,000 3,000,000 -2,000,000

LGIP 45,407,414 44,158,330 -1,249,084

US Agency 108,000,000 117,600,000 9,600,000

US Treasury 7,000,000 2,000,000 -5,000,000

Total $209,848,414 $211,220,561 $1,372,147

23

0.0%5.0%

10.0%15.0%20.0%25.0%30.0%35.0%

0-.25 .25-.5 .5-1 1-2 2-3 3-4 4-5

34.8%

6.2%2.4% 3.3%

20.4%17.5%

15.4%

Maturity (yrs)

ACCOUNT SUMMARY

Par Value $211,220,561

Book Value $211,250,904

Market Value $211,462,792

Unrealized Gain/(Loss) $242,231

PORTFOLIO ALLOCATION

Savings/cash10%

CD9%

Corporate1%

LGIP21%

Money Market

2%

U.S. Agencies

56%

U.S. Treasuries

1%

PORTFOLIO CHARACTERISTICS

Average Duration (yrs) 2.05

Average Coupon 0.631%

Average Cost YTM 0.624%

Average Market YTM 0.544%

City of Arvada Investments as of March 31, 2013The City’s portfolio as of March 31, 2013 is shown below, which includes credit ratings as of March 31, face value and interest earnings for 2013.

Description CUSIP Credit Rating

3/31/2013

Coupon Rate Maturity Date Face Value Interest 2013

Savings

JP Morgan Savings N/A 0.15% N/A $5,027,077 $1,854

Wells Fargo Savings N/A 0.18% N/A 5,140,621 2,151

JP Morgan Checking N/A 0.35% N/A 10,000,000 0

Sub Total Savings 20,167,698 4,005

Certificate of Deposit

FirstBank CD5343 N/A 0.30% 7/27/13 5,035,334 3,682

FirstBank CD7281 N/A 0.30% 11/30/13 5,121,008 3,745

FirstBank CD7273 N/A 0.25% 5/28/13 4,066,290 0

FirstBank CD8679 N/A 0.60% 5/5/14 5,062,636 7,377

Sub Total Certificate of Deposit 19,285,268 14,803

Corporate

Berkshire Hathaway 084664BG5 AA+ 5.00% 8/15/13 3,000,000 75,000

Sub Total Corporate 3,000,000 75,000

Local Government Investment Pool

C Safe N/A 0.17% N/A 22,021,169 7,817

Colo Trust N/A 0.21% N/A 22,137,162 8,867

Sub Total Local Government Investment Pool 44,158,331 16,684

Money Market

Csip AAAm 0.22% N/A 5,009,265 2,422

Sub Total Money Market 5,009,265 2,422

Chart continues next page

MATURITY DISTRIBUTION

24

Investment Management Focus - 20132013 continues 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, and 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.

Description CUSIP Credit Rating

3/31/2013

Coupon Rate Maturity Date Face Value Interest 2013

US Agency

FNMA 3136FPEL7 AAA 1.05% 09/09/2013 5,000,000 26,250

FHLB 3133727K4 AAA 2.13% 12/28/2015 2,000,000

FNMA 3136FTDG1 AAA 1.05% 10/21/2015 5,000,000

FNMA 3136FTM89 AAA 0.80% 02/24/2016 5,000,000 20,000

FFCB 3133EAKP2 AAA 1.36% 04/04/2017 5,000,000

FNMA 3136G0DZ1 AAA 0.65% 04/26/2016 3,000,000

FNMA 3136G0FS5 AAA 1.25% 05/17/2017 3,000,000

FNMA 3136G0GT2 AAA 1.05% 11/14/2016 5,000,000

FNMA 3136G0HP9 AAA 0.60% 05/29/2015 3,000,000

FNMA 3136G0RX1 AAA 1.00% 07/26/2017 5,000,000 25,000

FHLB 313380C70 AAA 0.55% 02/08/2016 5,000,000 13,750

FFCB 3133EAH27 AAA 0.43% 08/13/2015 5,000,000 10,750

FNMA 3136G0W1 AAA 0.55% 02/22/2016 5,000,000 13,750

FNMA 3136G0XD8 AAA 1.00% 08/28/2017 6,000,000 30,000

FNMA 3136G0XW6 AAA 0.00% 02/02/2017 3,000,000 7,500

FFCB 3133EAU22 AAA 0.68% 09/12/2016 5,000,000 17,000

FHLB 313380U96 AAA 0.50% 10/16/2015 3,000,000

FHLB 313380U88 AAA 0.80% 04/17/2017 3,000,000

FFCB 3133EC2L7 AAA 0.44% 11/13/2015 5,000,000

FFCB 3133EC3M4 AAA 0.60% 11/21/2016 3,000,000

FHLMC 3134G3V98 AAA 0.70% 11/21/2016 5,000,000

FHLB 313381QX6 AAA 0.55% 07/25/2016 3,000,000

FHLB 313381ZP3 AAA 0.43% 02/12/2016 5,000,000

FHLB 313382F65 AAA 0.60% 03/27/2018 5,600,000

FHLB 313382FL2 AAA 0.63% 03/27/2018 5,000,000

FHLB 313382HD8 AAA 0.70% 12/27/2016 5,000,000

FHLB 313382HT3 AAA 0.75% 03/27/2017 5,000,000

Sub Total Agency 117,600,000 164,000.00

US Treasury

T-Bond 912828KY5 AAA 2.63% 06/30/14 2,000,000 78,750

Sub Total US Treasury 2,000,000 78,750

TOTAL $211,220,561 $355,665

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

city of arvada 1st qtr 2013 financial report

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