quarterly financial report q2 2016 - vancouver, washington · second quarter 2016 financial report...

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Quarterly Financial Report

Second Quarter 2016

Second Quarter 2016 Financial Report City of Vancouver 1

Second Quarter 2016 Financial Report (This report contains un-audited financial information as of August 2, 2016)

Table of Contents

Section Page

I. Executive Summary 1 II. Economic Report 2 III. Financial Results 13 IV. Outstanding Debt 26 V. Investments 26 VI. Interfund Loans 28

Attachments

A Expenditure Summary by Fund 29 B Revenue Summary by Fund 31 C Investment Portfolio Tables 34 D Outstanding Debt 37

- - - - - For additional information on the City’s financial performance please contact Natasha Ramras in the City’s Financial & Management Services Department at 360-487-8484.

I. Executive Summary

The national economy continued to grow in the first half of 2016, but the pace of growth remains anemic. The annualized growth rate of the U.S. Gross Domestic Product during the second quarter of 2016 was 1.2%, according to the preliminary estimate published by the Bureau of Economic Analysis. Most recent data indicates that the increase was mostly due to increases in personal consumption expenditures and exports. The national unemployment rate through June of 2016 remained at a level of 4.9%.

City of Vancouver General Fund revenues in the second quarter of 2016 totaled $72.2 million, or 51 % of the forecast for the year. The 2016 collections exceeded those in the second quarter of 2015 by approximately $2 million. Tax revenues exceeded those received in the second quarter of 2015 by approximately $2.5 million, mostly due to the additional 1.5% in utility tax revenue approved in 2016 for Streets and slightly stronger sales and property tax collections, partially offset by lower than forecasted revenues in taxes on natural gas and telephone taxes. Overall, the second quarter revenues remain on track. Expenditures in the General Fund by the end of the second quarter totaled $77.7 million, or 53% of the budget for the year. The second quarter expenditures exceeded those in 2015 by $15 million, mostly due to the timing of transfers to other funds. The departments in the General Fund spent 45% of their budget, or $32.6 million during the first two quarters of 2016, approximately $1 million below the amounts spent during the comparable time period in 2015. Following is detailed information on the main revenue sources of the General Fund. Cumulatively, the seven major sources of revenue listed on the chart below represent more than 87% of the total forecasted revenues in the City’s General Fund. A separate section has been added to this report to report on revenues and expenditures associated with the City’s new Street Funding initiative.

Note: Utility tax revenue above includes the tax on Solid Waste, Charges for Services exclude the Business License revenue.


The General Fund operating cash balance was $40.2 million at the end of June 2016. II. Economic Report Many economic indicators continue to show signs of economic improvement. The unemployment rate continues to decline, the housing sector is showing a consistent level of activity and higher prices than in the prior four years, but the annual rate of increase has cooled, and consumer confidence continues to be very strong. The following is specific information related to some of the major national economic indicators, beginning with Gross Domestic Product. The annual rate of growth of Gross Domestic Product in the second quarter of 2016 was estimated at 1.2%, according to a preliminary estimate released by the Bureau of Economic Analysis, up from the 0.8% growth rate in the first quarter of 2016.1 The increase in GDP so far this year was due to increases in personal consumer spending and exports. Overall, accounting for the slowdown in the rate of economic expansion during the fourth quarter, the U.S. economy grew by 1.9% during 2015 and appears to be on a comparable track in 2016.

The national seasonally adjusted unemployment rate has been fluctuating at the 5.0% level, slightly dipping to 4.9% in June of 2016. Nationally, employment gains occurred in several industries, led by leisure and hospitality, health care, financial, information and professional and business services. The numbers of unemployed workers have declined slightly since the end of the second quarter of 2016, at an estimated level of 7.8 million nation-wide2.

1http://www.bea.gov/newsreleases/national/gdp/gdphighlights.pdf, Bureau of Economic Analysis. 2 http://www.bls.gov/news.release/pdf/empsit.pdf


Data Source: www.bls.gov

• The June 2016 Monetary Policy report from the Federal Open Market Committee confirmed that the labor market conditions continued to improve as growth in economic activity appears to remain paced. Growth in household spending has been growing, but business fixed investment has been soft. Since the beginning of the year, the housing sector has improved further but business fixed investment has been soft. The Committee confirmed that inflation remains below the FOMC’s goal of 2%, largely due to the drop in energy prices and declines in the prices of non-oil imported goods. The Committee’s assessment of the economic conditions was that these would continue to evolve in a manner that will warrant only gradual increases in the federal funds rate.3

• One of the major measures of consumer confidence is the Conference Board’s compiled Index of Consumer Confidence. The Index is based on consumer perceptions of current business and employment conditions, as well as consumer expectations for the following six months. The level of consumer confidence is associated with consumer anticipation of future developments in the economy, and is utilized as an indicator of the likely general direction of consumer spending in the coming months. The index reading has been fluctuating in the first half of 2016, dropping in February and May but improving by July to a reading of 97.3, one of the best readings of the year, since October last year.

3 http://www.federalreserve.gov/newsevents/press/monetary/20160727a.htm


• The second measure of consumer attitude, the University of Michigan Consumer Sentiment, paints a very similar picture. The July of 2016 reading is slightly below that from April of this year, mostly due to the expectations component that fell in July to one of the weakest readings of the last two years. Weakness in expectations indicates some doubts over the jobs outlook. It is unusual to see different readings in the two indicators of consumer expectations, thus indicating some uncertainty that will likely impact the next months’ readings of both indicators.

• The US Conference Board tracks economic indicators in ten different areas to assess the health of the economy and to evaluate the direction of economic development in the


near future. The cumulative product of the ten indicators is called the US Leading Economic Index (LEI). The US LEI has been on an increasing trend since early 2009. The index so far has stayed relatively flat at 123.7, slightly higher than the level reached at the end of 2015.

“The U.S. LEI picked up in June. Improvements in initial claims for unemployment insurance, building permits and financial indicators were the primary drivers. While LEI continues to point to moderating economic growth in the U.S. through the end of 2016, the expansion still appears resilient enough to weather volatility in financial markets and a moderating outlook in labor markets.” said Ataman Ozyildirim, Director of Business Cycles and Growth Research at The Conference Board.4 The graphic representation of the Conference Board Leading Economic Index for the U.S. since 1999 is shown in the following graph.

• At the national level, data on the housing sector indicates smaller fluctuations around the somewhat flat five-month average activity level. For the second quarter, starts nationally represented a 0.8% gain from the first quarter with permits indicating a fractional decline, but increasing in June. The graph below shows national data.

4 The Conference Board, July 21, 2016, https://www.conference-board.org/pdf_free/press/US%20LEI%20-%20Press%20Release%20JULY%2021%202016.pdf


• The national inflation rate as measured by the U.S. Consumer Price Index for All Urban Consumers (CPI-U) on a year-over-year basis came in at 1% in June, as reported by the U.S. Department of Labor. It appears to be slowing down from the annualized reading of 1.1% annual inflation during the first quarter of the year. The graph below shows annualized inflation rate changes in both CPI and Core CPI (less food and energy).


State Economy • The latest outlook from the Washington Economic and Revenue Forecast Council stated

that the Washington economy “…is subject to risks from the U.S. and global economies. The forecast expects slower growth in the Washington personal income and slightly higher Washington employment and residential construction. Overall the expectations are that the Washington economy will outperform the U.S. by a small margin.”

• State revenue collections are coming in higher than anticipate in the General Fund, by 3.8% percent, mostly due to stronger revenue collections of the sales tax and real estate taxes. The forecast has been increased by $294 million for the 2015-2017 biennium and decreased by $126 million for the 2017-2019 biennium.5

Local Economy

• The number of residential permits is the local data equivalent for housing starts. In 2012 through 2013, the City saw a significant increase in the number of residential units permitted and their respective valuation. The 2014 data on single family residential houses permitted shows that only 189 were permitted during the year with a total valuation of $21.0 million. In 2015, the pace of permitting picked up -- a total of 366 residential permits were issued with a total valuation of $38.3 million. In the first half of 2016, a total of 244 single residential units were permitted.

• Similarly to the national trends, the City has been seeing an increase in the number of

multi-family units permitted within the city limits. The number of new multi-family units permitted in 2013 was 657, roughly double that of 2011 and 2012. In 2014 and 2015, a

5 Washington June Economic & Revenue Forecast, http://www.erfc.wa.gov/forecasts/documents/rev20160615_bw.pdf


total of 609 and 705 units were permitted. The first quarter of 2016 showed strong new multi-family construction activity, but there was a significant slowdown in the second quarter of 2016.

• Activity level in the commercial sector has been strong. A total of 12 commercial projects were permitted in the second quarter with the total valuation of $37.6 million.

Data provided by the Community and Economic Development Department, City of Vancouver.


• The local Portland-Vancouver metro inflation rate is published twice a year by the Bureau

of Labor Statistics. The metro inflation rate (CPI-U) for the 12 month period ending in June of 2016 was 1.7%.6 Energy prices fell 10.8%, largely the result of a decrease in the price of gasoline. The index for all items less food and energy rose 3.2% over the year.

• According to the Bureau of Labor Statistics, the city estimated unemployment rate at the end of June was 6.8%, slightly higher than the 6.5% reading at the county and below that in Portland metro at 5.1%. The local unemployment rate has generally been on a growing trend since August of 2015.

6 http://www.bls.gov/regions/west/news-release/consumerpriceindex_portland.htm


Data provided by the Bureau of Labor Statistics

• Home sales are cyclical. Typically, they increase in the second and third quarters of the year. Home prices continue to stabilize nationally and locally, according to the S&P’s Case-Shiller Home price Index. During the last twelve months, the prices of houses in the Portland-Vancouver metro area have been consistently higher than those in the prior year by approximately 9%, indicating that locally the market has continued to be on an upward swing.

• Housing prices in Vancouver have been increasing since December of 2011. The median sale price in Vancouver is estimated at $256.9 thousand, 13.1% higher on a year-over-year basis, according to Zillow. The graph below represents changes in the median home price over time in Vancouver, Clark County, and Portland. Housing prices in the local area have likely reached their peak and are anticipated to start showing signs of slowdown in the coming months.

• Zillow evaluates Vancouver real estate market as healthy, relative to other markets across the county. The Market Health index is based on up to 10 metrics including those capturing the past and projected evolution of home values, the prevalence of foreclosures, foreclosure re-sales, negative equity and delinquency among others. The Vancouver market is currently rated at 8.2 out of 10 possible.

Median Sale Prices: Vancouver, WA, Clark Co, WA and Portland, OR.

Source of Data: Zillow


III. Financial Results General Fund REVENUES

City of Vancouver General Fund revenues in the second quarter of 2016 totaled $72.2 million, or 51 % of the forecast for the year. The 2016 collections exceeded those in the second quarter of 2015 by approximately $2 million. Tax revenues exceeded those received in the second quarter of 2015 by approximately $2.5 million, mostly due to the additional 1.5% in utility tax revenue approved in 2016 for Streets and slightly stronger sales and property tax collections, partially offset by lower than forecasted revenues in taxes on natural gas and telephone taxes. Overall, the second quarter revenues remain on track. Following is detailed information on the main revenue sources of the General Fund. Cumulatively, the seven chief sources of revenue listed on the chart below represent more than 87% of the total forecasted revenues in the City’s General Fund.

Note: Utility tax revenue above includes the tax on Solid Waste, Charges for Services exclude the Business License revenue.

Property Tax • Property tax revenues are typically received during the second and fourth quarters of the

year. The amount of revenue is based on the assessed valuation and is estimated using


the County Assessor’s data. Deviations from estimates in this revenue source are mostly related to the amount of new construction and delinquency rates.

• By Council action, there was a 0.251% property tax levy increase for 2016 taxes. The total City of Vancouver levy rate in 2016 is $2.66 per $1,000 of assessed value, which is applied to a total taxable value of approximately $16.8 billion.

• The City experienced a 23.5% combined reduction in assessed valuation between 2009

and 2012. The reduction in assessed valuation resulted in an increase of the City’s property tax levy rate, but did not have any impact on the revenues. The City’s assessed valuation between 2013 and 2016 in total was the increase of 21.6%, almost reading the assessed valuation experienced in 2008 and 2009. The increase for 2016 was 6.41% in assessed valuation.

• A total of $25.1 million was collected in the second quarter of 2016 in property taxes. This

year’s collections are approximately $400 thousand above comparable 2015 collections, reflecting the revenue increase due to new construction and the levy increase.

Note: The dollar amounts have not been adjusted for inflation.

Sales Tax

• The sales tax rate of 8.4% in the incorporated area is distributed as follows: 6.5% to the State, 0.5% for the City’s “basic” sales tax, 0.3% for the City’s “optional” sales tax, 0.2% for the City restricted to funding Public Safety, the County’s additional optional 0.1% for Law and Justice, 0.1% for addressing the region’s methamphetamine drug addiction and related crime, and 0.7% for C-TRAN.


• A total of $8.8 million in sales tax revenue was received through in the first quarter of 2016, approximately $0.6 million more than revenue received in the first quarter of 2015. In 2013, the City’s collections finally caught up with those in the pre-recession time, year 2007, (without adjustment for inflation for the past six year period). The fastest growing categories of retail sales are auto sales, construction-related and general merchandise. Sales tax collections in 2015 exceeded forecast by almost $4 million, most of it due to non-sustainable sales trends in the auto industry. The revenues are anticipated to remain at the 2015 level in 2016.

• Growth in taxable retail sales in the last several years was fueled by improving real estate

market, new construction and auto sales.

Taxes on Privately Owned Utilities • Vancouver collects a 6% utility tax on electrical, natural gas and telephone services

provided within the incorporated area by entities other than the City. The City also charges cable franchise fees.

• Utility tax on privately owned utilities generated $8.9 million through the second quarter

of 2016, approximately $0.2 million below collections during the comparable period of 2015, mostly due to lower collections in the natural gas and telephone taxes.

• Natural gas tax revenues in the second quarter of 2016 totaled $1.5 million, slightly below

forecast. During the similar time period of 2015, $1.7 million in natural gas revenue was collected.

• Telephone tax revenues in the second quarter of 2016 totaled $2.1 million, approximately $140 thousand below the comparable 2015 collections. The telephone tax revenue has been on a declining trend over the last several years.


• A total of $4.4 million was collected in electrical tax revenue during the second quarter of 2016, in line with the comparable 2015 collections. The forecast for 2016 anticipates an approximate 5% increase over the actual 2015 revenues. The actuals are coming in slightly below the anticipated level.

• The revenue from cable franchise fees totaled $1 million through the second quarter of 2016, similar to the comparable collections in 2015. The trend in this revenue has been declining over the past years, resulting in a forecast reduction for the year by approximately $150 thousand compared to 2015 collections.

Water, Sewer, Storm Water and Solid Waste Taxes

• The City Utility tax on Water, Sewer and Storm Water utility during 2016 is set at 21.5%. • Prior to 2010, the City charged a solid waste franchise fee for garbage collection services

to fund operations of the Solid Waste fund with a portion of the fees, equivalent to approximately a 12% tax rate, deposited into the General Fund for general use. In 2010, the franchise fee portion, (related to the general use), was converted to a utility tax of 20%. There was an increase of 1.5% in the utility tax on city-owned utilities fully dedicated to funding city streets.

• Utility revenue on city-owned utilities has been slowly increasing due to increases in the customer base as well as the underlying rate increases. The underlying water utility rates were increased by 5.0% in 2013, 2014 and 2015. Storm water rates were increased by 5.0% in 2014 and 2015 and sewer rates increased by 2.5% in 2014 and 2015. The rates had


to be increased by 1.9% going into 2016 to allow for generation of the additional utility tax.

• A total of $10.6 million was collected in taxes of City-owned utilities through the second quarter of 2016, approximately $1.3 million higher than was collected during the comparable period of 2015. The forecast anticipates approximately a $1.5 million revenue increase over the 2015 collections.

• In 2015, residential water revenues generated approximately 80% of the total water user revenues, while residential sewer fee revenues made up 66% of the total sewer user revenues. A similar breakdown is anticipated in 2016.

Grant & Entitlement Revenues • The City anticipates receiving $1.1million in grants in 2016. The largest grants are those for

equipment in Police, and Brownfield and Commute Trip Reduction grants in the Community and Economic Development department. Grants are frequently reimbursing the City for the expenditures incurred, so most of the revenue comes in the second through last quarters of the year.

• During the first two quarters, the City received $205 thousand in grant reimbursements, approximately 18% of the anticipated revenue for the year.

Charges for Goods and Services


The largest program areas that generate fee revenue are the Development Review Services and Recreation programs. The forecast for the year anticipates $4.9 million to be received in these two categories. Land Use and Other Planning Permits

• During 2008 through 2010, the City experienced a significant decrease in both the number of single family residential permits issued and in their valuation. The collections over 2011 through 2013 remained relatively flat. Years 2014 and 2015 saw significant annual increases in land use fees. Similar trends appear to continue into 2016.

• During the first half of 2016, a total of $484 thousand in planning permit fee revenues was collected by the City, approximately $30 thousand below revenues received during the first two quarters of 2015. The forecast anticipated a normalization of permitting activity to the 2013 levels, but the activity remains elevated locally.

Recreation Program Fees A total of $4.5 million in recreation fees is anticipated to be received in 2016,

representing a 9% increase over the actual revenues received in 2015. It appears that the activity in 2016 continues at the subdued level experienced over the last four years. Revenues will likely be short of forecast by approximately $0.3 million.

EXPENDITURES

• General Fund expenditures in the first half of 2016 were $77.7 million, or 53% of the budget, approximately $15 million higher than those at the end of the second quarter of 2015. The difference is solely due to the timing of supporting transfers, largely the transfer to the Fire Fund.

• Departmental spending remains in line with that in 2015.

• Expenses vs. budget by category within the General Fund are shown in the chart below.


• Salaries and benefits expenditures in the General Fund totaled $22.1 million through the second quarter of 2016, or 48% of the budget for the year.

• General Fund expenditures in the supplies and services category were $4.9 million, or 33.7% of the budget.

• The intergovernmental category of expenditures includes payments by the City to other jurisdictions, based on inter-local agreements in place and internal transfers supporting other funds, including the Debt Fund, Fire Fund, and Street Fund. Expenditures in the Intergovernmental category reached $46.2 million through the second quarter, or 63% of the budget for the year.

• Internal expenditures were $4.6 million, $1.3 million below those in 2015. The reason for the lower expenditures is largely due to the fact that direct billing has not taken place between the General Fund and the Building Fund for the activity performed on behalf of the other fund. These expenditures have historically been part of the indirect cost plan, but are on the pilot basis pulled out of the indirect cost plan in 2016 and are direct billed. The true up is anticipated to happen in the third quarter of the year.

• Beginning in 2015, the cost of the internal services departments, (such as IT, HR, Finance and General Services), is proportionately reflected in the respective budgets of the direct service departments. Expenditures for internal services were at 37.9% of the budget for the year.


Cash Balance

• The General Fund operating cash balance was $40.2 million at the end of the second quarter 2016. This is $7.7 million lower than the cash balance at the end of June 2015. This is largely attributed to earlier than normal transfers to the Fire fund and other funds as well as planned expenditures on high priority capital projects.

• In addition to the operating cash balance, the General Fund has an emergency reserve totaling $10.9 million at the end of June 2016, compared to $10.7 million in June 2015. Council updated the financial policy related to the emergency reserve balance in 2012. The policy requires the emergency reserve balance to equal 7% of actual external revenues in the preceding fiscal year for the General, Street, and Fire Funds. These funds are intended to be used only for extraordinary events, such as natural disasters.

Fund Balance • The cash balance represents a snapshot on a particular date, while the fund balance

factors in revenues that are anticipated to be received by the end of the year and expenditures that are anticipated to happen through the end of the year.

• The total fund balance in the General Fund at the end of 2015 was $57 million, according to the City’s unaudited financial statement. A portion of the fund balance estimated at $0.3 million represents prepaid items and capital assets held for resale. The remaining balance is composed of the Restricted, Committed, Assigned and Unassigned balances. The Restricted balance of $0.1 million represents the grant revenue received in advance of expenditures in VPD. The Committed balance of $44.9 million represents reserves in accordance with the City Financial Policies: the City Emergency reserve of $10.7 million, Revenue Stabilization reserve of $3.6 million, reserve restricted for capital purposes of $0.9 million and the working capital of $29.7 million. The working capital is required to ensure sufficient cash flow in the fund. The balance pays for the ongoing operations of the General Fund when the incoming seasonal revenues are not sufficient to cover the expenses and eliminate the need for short-term borrowing. The Assigned reserve of an estimated $3.8 million represents funding of 50% of accrued compensated absences. The remaining portion of the balance of $7.9 million was undesignated at end of 2015.

Street Fund • Expenditures in the Street Fund through June were $6.3 million, or 36% of the budget,

approximately $50 thousand higher than comparable expenditures in 2015. • The revenues in the fund, (excluding a budgeted general fund transfer), totaled $3.9 million,

$0.8 million higher than comparable collections in 2015. This fund’s largest sources of revenue are state shared revenues from the motor vehicle fuel tax (MVFT), real estate excise tax (REET), and a transfer from the General Fund. The budgeted General Fund transfer to the Street fund is $11.8 million for 2016.

• Motor Vehicle Fuel Tax (MVFT) revenues almost reached $1.7 million in the first two quarters

of 2016, approximately $70 thousand higher than the comparable 2015 collections. This revenue source is a set tax per gallon that does not depend on the price of gasoline. The


significant increase in gasoline prices nation-wide that were experienced over the past two years resulted in declining gasoline consumption in the state. The decline in consumption has been negatively impacting tax revenue collections state-wide and decreased the proportionate share of the tax received by the City.

Real Estate Excise Tax (REET)

• Real Estate Excise Tax (REET) of one-quarter of 1.0% of the selling price is imposed on each sale of real property in the corporate limits of the City. The tax is deposited into the Street Fund and is restricted to fund preservation of the City’s street system. The City also collects REET for Parks and Transportation capital.

• REET revenue was growing rapidly in years 2004-2006 fueled by the favorable real estate

market and increasing home prices. REET revenues declined significantly through 2010 since the housing bubble in 2005 and 2006. Since 2011 collections have been representing an upward trend. The real estate market is showing consistent signs of improvement.

• During the first half of the year a total of $1.7 million was received in the REET revenue, $600

thousand higher than was received during the comparable time period of 2015. If the trend continues, the revenues will significantly exceed the forecast for the year. The graph below demonstrates fluctuations in REET collections over the past eleven years.


Street Funding Initiative • During 2015, an extensive, six-month long public process took place to determine what

would be the desired level of services in the city street and right-of-way maintenance program and what additional funding sources would be most appropriate to fund any desired enhancements in the service level.

• A special commission that reviewed the issue at hand was composed of individuals representing City Council, the community, businesses and neighborhoods.

• The recommendations prepared by the Commission on the desired service level and funding

were accepted and acted upon by City Council, resulting in new/increased revenues being directed to Streets to fund the desired operating and capital outcomes. The ultimate anticipated outcomes of this initiative are the improvement in the condition of City streets from the current “fair” to “good” over a period of twenty years, reconstruction of a major arterial every two years and improved maintenance of right-of-ways, among other things. Following is a link to the specific set of recommendations: http://www.cityofvancouver.us/sites/default/files/fileattachments/public_works/page/12554/streets_funding_commission_recommendation_final.pdf

• Year 2016 is anticipated to be the first year when the revenue is collected by City. The City

has pre-funded the activities related to right-of-way maintenance with City dollars so some of the results could be seen in 2016. A portion of the new revenue, vehicle license fees, will be coming into the Transportations Benefits District beginning July 1, 2016.

Below is the financial information related to the Operating Street Initiatives and the Capital Street Initiatives funds.

2015 2016 2016 %

Actual Budget Actual Budget

Revenues

Street Initiatives Operating Fund 50,852 1,106,316 921,851 83%

Street Funding Initiative - Capital Fund - 2,588,506 348,921 13%

Expenditures


Street Initiatives Operating Fund - 1,243,585 376,835 30%

Street Funding Initiative - Capital Fund - 1,000,000 3,683 0%

Consolidated Fire Fund

• The City has an Operating Fire Fund and Capital Fire Fund, largely funding vehicle replacements and set up. The Operating Fire Fund fully supports the Capital Fire Fund. The graph below represents the operating fund’s financial information.

• Operating Fire Fund revenues through the second quarter of 2016 were at $618 thousand, (exclusive of General Fund support, the Fire District 5 transfer and the transfer between Fire Operating and Capital), mostly representing permit and inspection fees. A pilot project is under way in the Fire Marshall’s office. Two new inspector positions were created in the 2015-2016 budget with an expectation of generating sufficient revenues to cover the costs associated with these positions. In 2015, the two inspectors generated more than sufficient revenue to cover the costs.

• Total Fire Operating expenditures through the second quarter of 2016 were $18.3 million, approximately $1.3 million higher than those in the comparable time period of 2015, at 36% of the budget. Overtime expenditures are running high in 2016.

Building Inspection Fund

• Building inspection fee revenues received through the second quarter of 2016 totaled $2.2 million, approximately $400 thousand permit revenues generated during the comparable period of 2015.


• Building Fund expenditures through June of 2016 were at $2.2 million, approximately $100 thousand lower than in the comparable time period of 2015.

• The fund balance in the Building fund anticipates funding 18 months of permitting activity after the revenue is collected.

Parking Fund

• Fee and fine revenues through June of 2016 were $1.2 million, approximately $100

thousand above the comparable collections in 2015.

• The General Fund support of the Parking fund remained at the $1.25 million level in 2015 and is planned at the same level for 2016. Over time, the fund is anticipated to become fully self-supporting.

• Operating expenses during the first quarter of 2016 totaled $1.5 million, approximately

$500 thousand higher than those in 2015.

Utility Operations Operating transfers between the Water, Sewer and Storm Water funds are included in the accompanying report, Attachment A, per budget requirements. These transfers are generally eliminated when financial statements are prepared. Financial statements for utility


funds are prepared on a quarterly basis. Please call (360) 487-8444 to receive a copy of the detailed financial statements for the utility funds. Water

• Water sales revenues were $12.9 million through the second quarter of 2016, or 43% of the forecast. Collections were almost $1 million above the comparable 2015 collections, largely due to the impact of tax increases for Street Initiatives, effective in 2016.

• Expenditures in the Water fund in the first half of 2016 totaled $15.6 million, or 37% of the

budget.

Sewer

• Sewer charge revenues in the Sewer Fund were $20 million during the first two quarters, approximately $0.8 million above the comparable 2015 revenues. Sewer rates were increased by 9% in 2011, 6.5% in 2012, 2.5% in 2013 and 2014 and 2% in 2015. The only rate increase in 2016 was to generate the tax revenue of 1.5%, dedicated to street funding.

• Sewer expenditures during the first quarter of 2016 totaled $23.6 million, $3.5 mil above the

2015 comparable expenditures. Storm Water

• A total of $6.7 million in storm water fee revenue was received in the first half of 2016, approximately $0.1 million higher than the 2015 comparable revenues. The Storm Water rates were increased by 5% in 2013, 2014 and 2015. In 2016 the rates were increased to generate the 1.5% utility tax dedicated to streets.

• Overall, the expenditures in the Storm Water fund during the first quarter were $6 million, or 44% of the budget, higher than those in 2015 by approximately $0.7 million.


IV. Outstanding Debt

• At the end of the second quarter of 2016, the City had about $91.6 million of general obligation (G.O.) debt outstanding and approximately $28.5 million of revenue bond debt outstanding. General obligation debt is backed by the full faith and credit of the City and by general taxes. Revenue bond debt is supported by a pledge of specific revenues. All of the City’s revenue bond debt is supported by the City’s water and sewer utilities. The weighted average interest rate for the City’s general obligation debt is 3.28% while the average interest rate for the City’s revenue bond debt is 4.02%.

A complete list of the City’s outstanding debt is included in Attachment C.

V. Investments

Market Conditions • Information received since the Federal Open Market Committee met in April indicates that

the pace of improvement in the labor market has slowed while growth in economic activity appears to have picked up. Although the unemployment rate has declined, job gains have diminished. Growth in household spending has strengthened. Since the beginning of the year, the housing sector has continued to improve and the drag from net exports appears to have lessened, but business fixed investment has been soft. Inflation has continued to run below the Committee's 2 percent longer-run objective, partly reflecting earlier declines in energy prices and in prices of non-energy imports. Market-based measures of inflation compensation declined; most survey-based measures of longer-term inflation expectations are little changed, on balance, in recent months.

• In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its objectives of maximum employment and 2 percent inflation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments. In light of the current shortfall of inflation from 2 percent, the Committee will carefully monitor actual and expected progress toward its inflation goal. The Committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run. However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data.

• The overall yield curve decreased during the second quarter of 2016. The yield on the three-

month Treasury has decreased ending at 0.22% at the end of the second quarter. The six-month Treasury yield has decreased to 0.345%. The yield on the two-year Treasury has decreased to 0.58%. The thirty-year Treasury yield decreased, ending the second quarter at 2.3% from 2.61%. Market risk of the City’s portfolio is low. Investment purchase maturities have been kept at less than one year and are due to the Federal Reserve’s statement of continued low overnight rates into late-2017. The investment maturities are expected to meet the cash flow needs of the city and it is unlikely that an investment would have to be liquidated before maturity to meet the city cash needs.


• The City complies with State statutory guidelines and the City’s investment policies that limit the types of securities purchased. These consist of U.S. Treasury securities, federally-backed agency securities, and other relatively risk-free investments. The City does not leverage its portfolio nor does it invest in derivatives.

Investment Performance The average amount invested during the second quarter of 2016 was $311.4 million compared to $280.9 million on June 30, 2015. The portfolio had an average yield of 0.67% year to date, which is 3 basis points lower than the projected yield of 0.70% for 2016. The projected yield is based upon the blended yield between existing rates and expected market rates when new investments are purchased during the year. The year-to-date yield is 18 bps higher than the State Investment Pool, which had an average yield of 0.49%. The State Pool has a weighted average maturity of 35 days. The City’s investment portfolio weighted average maturity is approximately 8 months. Longer-term portfolio yields will outperform shorter-term portfolio yields in a falling interest rate environment. Interest revenue distributed through the second quarter of 2016 to all funds is approximately $955,409 compared to $647,690 during the same period of 2015. The City’s investment portfolio profile is detailed in Attachment D.


VI. Interfund Loans

In 2003, Council passed an ordinance giving the City Treasurer the authority to make interfund loans to meet the short term liquidity and cash flow needs of the City’s various funds. The ordinance requires the City Treasurer to provide a quarterly report to City Council showing the amount of all interfund loans outstanding and the repayment plan for those loans. Through the second quarter of 2016, one fund had an interfund loan, although the balance was zero at the end of the quarter. City of Vancouver Outstanding Interfund LoansThrough Second Quarter 2016

Balance InterestOutstanding Interest Expense

Fund Description 06/30/16 Lending Fund Rate Paid in 2016 Repayment Plan

108 CDBG -$ 001 0.68% 99.35$

Loan due to timing between when deposits received vs.

expenditures paid

Total Outstanding Interfund Loan Balance -$


ATTACHMENT A 2015 2015 % 2016 2016 % of

Expenditures Actuals JuneYE

Actuals Budget June BudgetGENERAL FUNDCity Council 485,079 294,677 60.7% 645,121 226,317 35%City Manager's Office 2,435,737 1,325,071 54.4% 2,593,466 1,234,024 48%Legal Services 4,155,107 2,288,849 55.1% 4,964,020 2,116,899 43%Community Economic Development 5,429,961 2,847,998 52.4% 6,374,497 2,269,926 36%Parks Administration 801,613 442,414 55.2% 945,390 383,132 41%Parks, Trails, & Natural Resources 1,114,145 321,270 28.8% 1,171,459 440,650 38%Recreation Services 6,702,990 3,034,439 45.3% 7,064,469 3,225,489 46%Police 38,395,903 19,894,215 51.8% 41,244,270 19,590,347 47%Transportation 28,461 13,817 - 10,812 Grounds Maintenance 3,242,014 1,520,940 46.9% 3,551,703 1,575,547 44%Facilities Maintenance 3,556,871 1,519,956 42.7% 3,631,110 1,561,790 43%

Subtotal Non-Gen. Governmental 66,347,881 33,503,165 50.5% 72,185,505 32,634,933 45%General Governmental 49.5%

Child Justice Center Support 336,720 168,360 50.0% 347,348 180,078 52%City Cable Programming 460,596 230,298 50.0% 425,644 212,820 50%Fire District #6 18,157 18,157 100.0% 17,640 21,392 121%Emergency Mgmt (CRESA) 143,244 71,622 50.0% 146,631 109,358 75%Air Pollution Control Authority 53,885 53,885 100.0% 56,166 54,692 97%Humane Society 255,631 89,744 35.1% 292,853 101,674 35%Animal Control 281,137 131,194 46.7% 248,056 122,645 49%Alcoholism Support 38,449 8,999 23.4% 30,168 10,968 36%Regional Transp Council 21,300 21,300 100.0% 21,300 21,300 100%Election Support 303,549 - 0.0% 350,000 - 0%AWC, Chamber of Commerce Membership 84,239 73,629 87.4% 87,318 75,699 87%Opportunity Reserve 133,248 68,152 51.1% 221,102 27,250 12%Miscellaneous 7,105,727 432,785 6.1% 2,256,043 789,894 35%Public Defender 1,216,412 567,356 46.6% 1,250,933 674,715 54%County Jail Costs 3,567,397 968,312 27.1% 3,769,360 738,319 20%County Corrections Costs 1,255,606 537,538 42.8% 1,319,539 602,292 46%County District Court Costs 935,985 215,982 23.1% 1,034,054 300,860 29%General Obligation Debt Payment 6,881,850 831,341 12.1% 6,027,302 749,339 12%General Govt Support 53,577,055 24,710,856 46.1% 7,571,481 1,857,430 25%Street Support (formely in General Support) - - 14,613,428 6,597,174 45%Fire Support (formely in General Support) - - 30,886,091 30,386,091 98%LEOFF Pension Support (formely in General - - 2,836,000 1,417,998 50%

Subtotal General Govermental 76,670,185 29,199,509 38.1% 73,808,457 45,051,988 61%Total General Fund 143,018,067 62,702,674 43.8% 145,993,962 77,686,921 53%

SPECIAL REVENUE FUNDSStreet 19,966,124 6,251,409 31.3% 17,760,898 6,318,634 36%Street Initiative- NEW Fund - - 1,243,585 376,835 30%Fire Operating Fund 35,602,460 17,007,438 47.8% 36,845,259 18,341,739 50%Fire Capital Fund 859,647 169,943 19.8% 2,130,544 232,906 11%AMR Compliance Fund (New) 416,594 174,282 41.8% 664,717 298,452 45%Drug Enforcement and Investigative Funds 187,098 37,401 20.0% 438,073 4,817 1%Community Development Block Grant 3,889,529 1,391,630 35.8% 2,815,806 1,309,743 47%Tourism 1,064,322 391,877 36.8% 2,825,224 462,508 16%Criminal Justice/LLEBG 127,246 (255) -0.2% 819,574 64,058 8%Real Estate Excise Tax - I 3,341,023 501,142 15.0% 3,599,695 506,351 14%Transportation Special Revenue 2,094,516 597,495 28.5% 2,557,201 609,612 24%Parks & Recreation Special Revenue 40,407 23,228 57.5% 18,605 1,803 10%Parks Construction - Residual REET 54,116 13,147 24.3% 4,664 - 0%Downtown Initiatives 397,616 56,849 14.3% 100,750 58,963 59%VNHR Properties 158,584 53,343 33.6% 660,901 124,488 19%Senior Messenger 244,420 138,333 56.6% 321,998 136,484 42%TIF Funds 1,516,745 371,014 24.5% 4,937,482 227,607 5%PIF Funds 881,954 46,034 5.2% 3,102,179 55,697 2%

DEBT SERVICE FUNDSG O Debt Service Fund 36,456,827 4,046,646 11.1% 20,452,671 10,720,743 52%


ATTACHMENT A 2015 2015 % 2016 2016 % of

Expenditures Actuals JuneYE

Actuals Budget June BudgetL I D Debt Fund 153,082 - 0.0% 107,400 553 1%

CAPITAL FUNDS2011 Bond Capital Fund - Waterfront 155,487 16,446 10.6% 4,315,835 101,878 2%Transportation Capital Fund 11,697,485 7,233,896 61.8% 26,655,077 1,566,180 6%Capita Streets Initiative Fund (NEW) - 1,000,000 3,683 0%Fire Acquisition Fund 2,325,869 1,904,579 81.9% 12,989,130 777,950 6%Capital Improvement Fund 4,048,825 1,070,308 26.4% 7,920,408 348,186 4%VNHR Property Capital 547,900 413,428 75.5% 8,754,542 1,355,346 15%2015 Bond Capital Fund - VNHR (New) 448,403 413,689 92.3% 4,649,016 - 0%Parks Construction Fund (Capital Projects on 2,580,737 273,670 10.6% 29,201,361 1,703,536 6%City Tree Reserve Fund 14,900 4,110 27.6% 39,201 13,398 34%Drainage Construction Fund 586,011 193,828 33.1% 2,192,648 302,285 14%Systems Development Reserves 2,549,589 - 0.0% 2,554,548 - 0%Water Construction Fund 10,807,140 3,140,569 29.1% 28,482,410 3,312,620 12%Utility Customer Assistance 23,013 13,295 57.8% 35,000 11,511 33%Water Revenue Bond Debt Service Fund 58,454 620,017 1060.7% 645,160 636,605 99%Sewer Revenue Bond Debt Service Fund 1,769,485 9,984,715 564.3% 10,769,068 10,221,820 95%Sewer System Development 2,550,478 - 0.0% 2,555,525 - 0%Sewer Construction Fund 759,811 482,670 63.5% 8,407,881 1,292,317 15%

ENTERPRISE FUNDSStorm Water 12,501,417 5,288,612 42.3% 13,619,409 5,965,910 44%Water 39,374,091 13,813,078 35.1% 41,912,823 15,552,112 37%Sewer 44,580,281 20,126,602 45.1% 44,618,795 23,572,662 53%Building Inspection 4,926,400 2,349,770 47.7% 5,518,541 2,224,671 40%Solid Waste 2,455,379 879,755 35.8% 3,030,709 942,041 31%Parking 2,082,286 1,021,192 49.0% 3,602,379 1,523,307 42%Tennis Center 1,093,253 580,898 53.1% 1,336,982 559,406 42%Airpark 432,959 222,186 51.3% 1,280,469 376,940 29%

INTERNAL SERVICE FUNDSFacilities Asset Mgmt & Replacement Reserve 1,939,670 1,500,123 77.3% 8,526,826 473,714 6%Equipment Services Operations Fund 4,774,153 2,459,829 51.5% 5,740,269 2,304,460 40%Equipment ER&R Capital 2,083,724 1,070,234 51.4% 3,522,448 985,908 28%Technology ER&R 659,372 457,423 69.4% 1,633,819 539,629 33%Risk Fund 5,498,356 1,637,958 29.8% 5,113,017 2,125,562 42%Internal Administrative Services Fund (New) Finance 4,855,685 2,399,645 49.4% 5,506,739 2,358,582 43% Information Technology 5,137,694 2,699,752 52.5% 7,159,844 2,780,062 39% Human Resources 1,716,057 890,900 51.9% 1,864,562 771,769 41% General Services 183,683 170,917 93.0% 347,412 87,002 25%Benefits Fund 11,170,964 7,291,989 65.3% 11,321,358 4,859,485 43%Self Insured Health Insurance (New) 5,162,871 2,284,737 44.3% 6,896,631 2,963,927 43%Print Shop & Mail Services 193,415 97,080 50.2% 213,220 90,241 42%

AGENCY FUNDSSWAT Team 181,626 132,989 73.2% 182,754 45,445 25%Police Pension 740,132 309,864 41.9% 974,012 483,167 50%Fire Pension 1,417,836 615,777 43.4% 1,782,023 693,538 39%Cable TV 1,125,216 445,444 39.6% 1,091,098 478,591 44%PEG 656,684 224,857 34.2% 704,161 236,814 34%Transportation Benefits District (NEW) - - Notes

2. Operating transfers between funds are included within this report.1. This report was prepared using the methodology prescribed under the basis of budgeting, depreciation, appreciation costs have be

3. In 2015, Finance, Information Technology, Human Resources and General Services moved from General Fund to an Intenral Administrativce Services Fund.


ATTACHMENT B ADJ-15 JUN-15 JUN-16 JUN-16Revenues 2015 2015 % of 2016 2016 % of

Actual June YE Actual Budget June BudgetGENERAL FUND Tax Revenue

Property Tax 44,230,563 24,708,639 56% 44,959,107 25,057,928 56%Sales Tax 35,035,394 16,274,250 46% 34,334,609 17,258,369 50%Electrical Tax 7,941,368 4,245,717 53% 8,304,928 4,356,373 52%Natural Gas 2,621,807 1,651,675 63% 2,728,642 1,479,354 54%Telephone 4,154,451 2,190,963 53% 4,412,693 2,052,237 47%Cable Franchise Fee 1,968,024 984,420 50% 1,789,230 1,012,443 57%Water/Sewer/Storm Water 16,248,095 7,408,581 46% 17,297,391 8,457,325 49%Solid Waste Utility Tax 3,877,313 1,911,915 49% 4,200,716 2,137,930 51%Gambling and Leasehold Taxes 672,174 335,714 50% 618,079 380,736 62%

Subtotal Tax Revenue 116,749,189 59,711,873 51% 118,645,395 62,192,694 52%Business Licenses 1,095,045 519,916 47% 913,138 587,009 64%Grants & Entitlements 1,374,629 580,848 42% 1,114,651 205,257 18%State Shared Revenues 3,569,646 920,968 26% 3,531,579 1,536,444 44%Parks Contract with Clark County 67,396 33,319 49% - 34,219 Charges for Services

Planning Permits 782,485 516,755 66% 436,905 484,476 111%Recreation Program Fees 4,136,526 2,352,259 57% 4,511,632 2,424,703 54%Interfund Service Charges 3,371,937 2,343,938 70% 3,438,695 1,001,926 29%Other Charges & Services 819,322 436,402 53% 689,613 443,971 64%

Subtotal Charges for Services 9,110,270 5,649,354 62% 9,076,845 4,355,075 48%District Court 1,618,593 864,255 53% 1,675,240 847,147 51%Miscellaneous 977,065 355,078 36% 832,061 544,485 65%Lease Revenue (short and long-term) 3,574,825 1,602,105 45% 3,363,599 1,819,183 54%Operating Transfers 625,064 33,069 5% 1,503,016 43,218 3%

Total General Fund 138,761,723 70,270,786 51% 140,655,524 72,164,731 51%SPECIAL REVENUE FUNDSStreet Fund

Real Estate Excise Tax 3,246,532 1,150,792 35% 2,229,795 1,743,196 78%Motor Vehicle Fuel Tax 3,506,747 1,641,312 47% 3,560,605 1,710,536 48%Permits and Misc. 1,413,478 279,290 20% 980,886 459,055 47%Operating Transfers 11,831,555 5,881,714 50% 11,808,428 5,908,411 50%

Total Street Fund 19,998,313 8,953,109 45% 18,579,714 9,821,197 Operating Street Initiative Fund (NEW) 1,106,316 921,851 83%

Operating Fire FundService Charges-Fire Dist. #5 8,091,492 4,045,746 50% 8,373,653 4,257,487 51%Grant Revenue 43,329 57,945 134% 1,290 1,290 n/aPermit/Other Fees and Misc 1,164,508 604,586 52% 1,045,913 618,337 59%Operating Transfers 25,923,859 12,943,046 50% 26,005,283 25,886,091 100%

Total Operating Fire Fund 35,223,189 17,651,323 50% 35,426,139 30,763,205 87% Fire Equipment Fund 1,445,335 599,245 41% 1,363,945 640,046 47%

AMR Compliance Fund (New) 680,972 397,078 58% 680,000 397,965 59%Other Special Revenue Funds Street Initiative Operating Fund 50,852 - 0% 1,106,316 921,851 83%

Drug Enforcement 348,898 74,729 21% 335,000 185,023 55%Community Development Block Grant 3,818,039 1,396,326 37% 2,203,342 1,240,051 56%Tourism 2,129,442 803,192 38% 1,528,866 920,817 60%Criminal Justice/LLEBG 238,686 118,461 50% 301,490 122,502 41%Real Estate Excise Tax - I 3,124,470 1,085,692 35% 2,915,007 1,672,481 57%Parks & Recreation Special Revenue Fund 36,656 16,447 45% 18,605 924 5%Downtown Initiatives 177,035 85,750 48% 162,344 89,539 55%VNHR Properties 240,457 98,906 41% 563,053 168,623 30%Senior Messenger 290,206 134,442 46% 250,000 125,748 50%TIF Funds 588,500 381,101 65% 581,692 468,662 81%



Actual June YE Actual Budget June BudgetPIF Funds 1,820,394 858,818 47% 655,000 898,153 137%Miscellaneous Special Revenue Funds 716,670 143,187 20% 262,000 695,216 265%

DEBT SERVICE FUNDSG O Debt Service Fund 36,456,827 4,046,646 11% 20,302,666 10,723,521 53%L I D Fund 121,768 330 0% 4,000 1,898 47%CAPITAL FUNDS2011 Bond Capital Fund - Waterfront 19,013 10,497 55% - 13,969 n/aTransportation Capital Fund 10,786,104 2,091,349 19% 24,741,314 1,790,189 7%Capital Streets Initiative Fund (NEW) 2,588,506 348,921 13%Capital Improvement Fund 2,698,435 17,557 1% 5,789,441 477,860 8%Fire Acquisition Fund - 2,400,364 12,326,500 5,203,745 42%VNHR Property Capital 2,957,571 411,904 14% 6,781,056 342,787 5%Parks Construction Fund (Capital Projects o 13,457,520 120,726 1% 17,930,734 1,204,322 7%City Tree Reserve Fund 37,952 3,093 8% 81,348 126,117 155%Drainage Construction Fund 911,766 238,898 26% 2,282,157 26,827 1%Water/Sewer Capital Reserves 12,485 6,872 55% 10,000 9,466 95%Systems Development Reserves 3,321,361 1,674,077 50% 1,506,000 1,841,689 122%Water Construction Fund 15,343,983 86,803 1% 13,180,000 126,722 1%SCIP Fund 732,951 396,057 54% 615,000 350,668 57%Utility Customer Assistance 13,436 4,171 31% 41,000 4,574 11%Water Revenue Bond Debt Service Fund 646,305 520,770 81% 645,158 532,200 82%Sewer Revenue Bond Debt Service Fund 10,813,597 8,454,762 78% 10,784,067 8,613,620 80%Debt Service Reserves 7,633 4,202 55% 6,000 5,787 96%Sewer Utility Fund 46,840,575 21,130,599 45% 44,642,888 20,525,129 46%Sewer System Development 3,376,952 1,621,544 48% 2,053,000 1,749,003 85%Sewer Construction Fund 5,725,049 132,680 2% 3,370,000 14,541 0%ENTERPRISE FUNDSStorm Water

Storm Drainage Fees 12,373,597 6,151,713 50% 12,920,548 6,573,662 51%Private Capital Contributions 974,406 338,296 35% 150,000 - 0%Miscellaneous 373,501 124,955 33% 100,000 161,067 161%

Total Storm Water Fund 13,721,505 6,614,963 48% 13,170,548 6,734,729 51%Water

Residential Water Sales 23,338,172 9,652,493 41% 23,940,772 10,536,661 44%Commercial Water Sales 5,136,383 1,837,247 36% 4,987,379 1,995,917 40%Governmental Water Sales 985,320 312,318 32% 919,397 342,775 37%

Subtotal Water Sales 29,459,874 11,802,058 40% 29,847,548 12,875,353 43%Private Capital Contributions 6,338,529 1,705,709 27% 2,500,000 159,684 6%Interfund Transfers 2,681,098 912 0% 2,904,354 29,987 1%Indirect Cost Plan Revenue 1,570,615 788,451 50% 1,465,300 721,684 49%Miscellaneous 1,923,196 1,008,222 52% 1,301,308 881,946 68%

Total Water Fund 41,973,312 15,305,351 36% 38,018,510 14,668,653 39%Sewer

Residential Sewer Charges 26,033,424 13,022,737 50% 26,413,188 13,425,344 51%Commercial, Industrial Sewer Charges 12,145,094 5,619,415 46% 12,454,344 5,989,935 48%Governmental Sewer Charges 1,220,077 609,037 50% 1,412,056 632,014 45%

Subtotal Sewer Charges 39,398,594 19,251,189 49% 40,279,588 20,047,293 50%Private Capital Contributions 2,909,577 1,655,054 57% 600,000 229,756 38%Interfund Transfers 3,981,178 - 0% 2,820,000 - 0%Miscellaneous 551,225 224,356 41% 943,300 248,080 26%

Total Sewer Fund 46,840,575 21,130,599 45% 44,642,888 20,525,129 46%Building Inspection

Permits 3,747,752 1,839,710 49% 3,480,455 2,244,933 65%Miscellaneous 157,101 80,007 51% 153,421 86,461 56%



Actual June YE Actual Budget June BudgetInterfund Services 692,966 402,916 58% 932,137 - 0%

Total Building Fund 4,597,819 2,322,634 51% 4,566,013 2,331,394 121%Solid Waste

Solid Waste Utility Tax 1,096,068 548,034 50% 1,705,200 572,578 34%Service Charges-Recycling 618,174 184,374 30% 913,500 74,309 8%Miscellaneous 112,014 26,374 24% 30,450 22,985 75%

Total Solid Waste Fund 1,826,256 758,782 42% 2,649,150 669,872 117%Parking

Parking Fines 382,537 260,745 68% 578,000 269,068 47%Parking Meters & Lots 1,587,946 777,670 49% 1,707,560 860,739 50%Miscellaneous 38,423 15,095 39% (9,500) 33,149 n/aOperating Transfers 1,246,145 - 0% 1,245,540 - 0%

Total Parking Fund 3,255,051 1,053,510 32% 3,521,600 1,162,956 33%Tennis Center

Membership Fees 799,355 434,211 54% 910,306 424,944 47%Instruction and Miscellaneous 24,669 13,296 54% 132,535 11,531 9%Operating Transfers 391,598 81,849 21% 278,194 47,430 17%

Total Tennis Center Fund 1,215,622 529,356 44% 1,321,035 483,905 37%Other Enterprise Funds

Pearson Airfield 693,637 348,905 50% 749,346 344,472 46%Utility Customer Assistance 13,436 4,171 31% 41,000 4,574 11%

INTERNAL SERVICE FUNDSFacilities Asset Mgmt & Replacement Reser 1,838,531 921,387 50% 1,820,000 928,435 51%Equipment Services Operations Fund 5,090,883 2,493,595 49% 5,092,223 2,406,226 47%Equipment Services Capital Fund 3,137,085 1,635,471 52% 3,061,744 1,935,501 63%Computer Repair & Replacement 2,898,327 1,282,759 44% 3,103,980 605,759 20%Self-Insured Worker's Comp & Liability Fund 3,817,442 1,786,748 47% 3,567,982 1,798,782 50%Internal Administrative Services Fund 14,042,429 9,230,812 66% 14,227,672 5,703,491 40%Benefits Fund 9,913,855 8,532,048 86% 11,507,985 4,927,895 43%Self-Insured Health Insurance Fund 9,181,215 5,387,829 59% 5,860,865 3,503,266 60%Mail Services Fund 253,035 124,028 49% 254,511 114,154 45%AGENCY FUNDSSWAT Team 183,090 71,695 39% 209,898 91,796 44%Police Pension 1,087,546 542,528 50% 1,082,468 543,368 50%Fire Pension 1,962,342 1,070,592 55% 1,981,000 1,089,277 55%Cable TV 1,157,137 489,696 42% 1,029,923 395,670 38%PEG 742,603 372,002 50% 750,000 373,743 50%Notes1. This report was prepared using the methodology prescribed under the basis of budgeting.2. Operating transfers between funds are included within this report.


City of VancouverInvestment Activity

Second Quarter of 2016(Dollars in thousands)

As of Percent of As of Percent of3/31/2016 Portfolio 6/30/2016 Portfolio

State Investment Pool 86,148 28.9% 68,950 22.2%Clark County Investment Pool 77 0.0% 253 0.1%U.S. Agencies 180,983 60.8% 210,994 67.9%Corporate Bonds (Pension Fund) 1,028 0.3% 1,022 0.3%Municipal Bonds 13,480 4.5% 13,443 4.3%Municipal Bonds Zero Coupon 1,984 0.7% 1,987 0.6%Federal Agency Discount Bond 4,974 1.7% 4,982 1.6%Zero Coupon 9,188 3.1% 9,193 3.0%

Total by Investment Type 297,862$ 100.0% 310,824$ 100.0%

As of Percent of As of Percent of3/31/2016 Portfolio Cumulative 6/30/2016 Portfolio Cumulative

Overnight 86,225 28.9% 28.9% 74,523 24.0% 24.0%One Month 5,000 1.7% 30.6% 500 0.2% 24.1%Two to Six Months 5,000 1.7% 32.3% 77,097 24.8% 48.9%Six Months to One Year 107,922 36.2% 68.5% 62,427 20.1% 69.0%One to Five Years 93,715 31.5% 100.0% 96,277 31.0% 100.0%

Total by Length of Maturity 297,862$ 100.0% 310,824$ 100.0%

12 Months 10 Months


Investment Activity2nd Quarter 2016

Issuer Type of InvestmentTransaction

DateMaturity

Date Purchase or

Deposit Redemption or

Withdrawal

Effective Interest

Rate

AprilClark County Treasurer* Local Government Investment Pool 1,000,080.39 434,635.86 0.71%FFCB Federal Agency Coupon Securities 4/27/2016 5,000,000.00 0.25%FFCB Federal Agency Coupon Securities 4/8/2016 5,000,000.00 1.10%FHLB U.S. Agency 4/28/2016 5,000,000.00 0.65%FHLB U.S. Agency 4/26/2016 5,000,000.00 0.63%FHLB U.S. Agency 4/27/2016 5,000,000.00 1.03%Washington State Treasurer* Local Government Investment Pool 17,027,428.69 21,000,000.00 0.49%

38,027,509.08 26,434,635.86

MayClark County Treasurer* Local Government Investment Pool 336.15 238,411.72 0.71%FFCB Federal Agency Coupon Securities 5/19/2016 5,000,000.00 1.25%FHLB Federal Agency Coupon Securities 5/18/2016 5,000,000.00 0.25%FHLB Federal Agency Coupon Securities 5/4/2016 5,000,000.00 1.04%FNMA Federal Agency Coupon Securities 5/5/2016 5,000,000.00 1.03%FNMA Federal Agency Coupon Securities 5/24/2016 5,000,000.00 1.35%Washington State Treasurer* Local Government Investment Pool 26,330,555.52 24,000,000.00 0.49%

46,330,891.67 29,238,411.72

JuneClark County Treasurer* Local Government Investment Pool 233.72 151,283.87 0.71%FFCB Federal Agency Coupon Securities 6/13/2016 5,000,000.00 1.02%FFCB Federal Agency Coupon Securities 6/27/2016 5,000,000.00 1.12%FHLM Federal Agency Coupon Securities 6/23/2016 5,000,000.00 0.65%FNMA Federal Agency Coupon Securities 6/28/2016 5,000,000.00 1.20%Washington State Treasurer* Local Government Investment Pool 16,444,008.77 32,000,000.00 0.49%

26,444,242.49 42,151,283.87 * Investments in the County and State Local Government Investment Pools can change daily, therefore no purchase dates are shownand the maturity dates are the last date for each reporting period.


City of Vancouver Investment Portfolio Including Call Dates

6/30/2016Purchase Maturity Par Market Book Percent Cumulative Interest Effective

CUSIP Issuer Date Date Value Value Value of Portfolio Percent Rate YieldCLARK CO LGIP Clark County LGIP 253,193.45 253,193.45 253,193.45 0.1% 0.08% 0.557 0.549

WA STATE LGIP Washington State LGIP 68,949,884.76 68,949,884.76 68,949,884.76 22.2% 22.18% 0.424 0.418939720LH9 State of Washington 03/27/2013 07/01/2016 5,320,000.00 5,319,946.80 5,320,000.00 1.7% 1.71% 0.650 0.82536962G6Z2 General Electric Capital Corp 07/16/2015 07/12/2016 500,000.00 500,080.00 500,135.49 0.2% 0.16% 1.500 0.6013130A62Y2 Federal Home Loan Bank 08/17/2015 08/17/2016 5,000,000.00 5,001,150.00 5,000,000.00 1.6% 1.61% 0.420 0.4143130A62Y2 Federal Home Loan Bank 08/17/2015 08/17/2016 5,000,000.00 5,001,150.00 5,000,000.00 1.6% 1.61% 0.420 0.4143133EEZB9 Federal Farm Credit Bank 04/16/2015 09/16/2016 5,000,000.00 5,000,100.00 5,000,000.00 1.6% 1.61% 0.450 0.4443130A2T97 Federal Home Loan Bank 10/02/2014 09/28/2016 5,000,000.00 5,001,950.00 4,998,956.24 1.6% 1.61% 0.500 0.579812626R50 City of Seattle 06/04/2013 10/01/2016 3,425,000.00 3,447,365.25 3,445,756.02 1.1% 1.11% 3.000 0.5413130A3CW2 Federal Home Loan Bank 06/08/2015 10/17/2016 5,000,000.00 5,001,700.00 4,999,729.04 1.6% 1.61% 0.500 0.5113133EEM64 Federal Farm Credit Bank 05/19/2015 10/19/2016 5,000,000.00 5,000,650.00 5,000,000.00 1.6% 1.61% 0.480 0.4733133EEYT1 Federal Farm Credit Bank 04/20/2015 10/20/2016 2,000,000.00 2,000,080.00 2,000,000.00 0.6% 0.64% 0.510 0.5033134G3S50 Federal Home Loan Mortgage Co. 10/22/2012 11/01/2016 5,000,000.00 5,003,000.00 5,000,000.00 1.6% 1.61% 0.625 0.616735389QU5 Port of Seattle WA 08/15/2014 11/01/2016 250,000.00 251,222.50 250,751.13 0.1% 0.08% 1.762 0.8383130A3GK4 Federal Home Loan Bank 11/13/2014 11/07/2016 5,000,000.00 5,002,900.00 4,999,652.55 1.6% 1.61% 0.600 0.6123133EEBU3 Federal Farm Credit Bank 11/20/2014 11/14/2016 5,000,000.00 5,002,750.00 4,999,599.51 1.6% 1.61% 0.600 0.61331358C7L4 Federal Nat'l Mtg. Assoc. 05/02/2013 11/15/2016 4,250,000.00 4,244,645.00 4,241,885.43 1.4% 1.36% 0.5153133EEUS7 Federal Farm Credit Bank 03/23/2015 11/23/2016 5,000,000.00 5,003,250.00 5,000,000.00 1.6% 1.61% 0.625 0.6173130A3J70 Federal Home Loan Bank 12/10/2015 11/23/2016 5,000,000.00 5,002,700.00 4,996,957.14 1.6% 1.61% 0.625 0.769495026RY4 King County School District 06/23/2015 12/01/2016 2,530,000.00 2,546,293.20 2,544,667.16 0.8% 0.82% 2.000 0.909833240GJ7 Snohomish County School Distri 04/10/2015 12/01/2016 350,000.00 352,040.50 352,028.05 0.1% 0.11% 2.000 0.592962526EJ4 Whatcom County School District 07/23/2015 12/01/2016 250,000.00 251,440.00 251,407.79 0.1% 0.08% 2.000 0.631313371PV2 Federal Home Loan Bank 05/07/2014 12/09/2016 4,000,000.00 4,019,960.00 4,015,711.17 1.3% 1.29% 1.625 0.7103130A5UB3 Federal Home Loan Bank 06/30/2015 12/16/2016 5,000,000.00 5,002,050.00 5,000,000.00 1.6% 1.61% 0.550 0.542313384V22 Federal Home Loan Bank 01/15/2016 12/29/2016 5,000,000.00 4,989,950.00 4,982,402.78 1.6% 1.60% 0.700 0.7133137EADU0 Federal Home Loan Mortgage Co. 04/14/2015 01/27/2017 5,000,000.00 4,999,750.00 4,999,679.63 1.6% 1.61% 0.500 0.5043133ECG99 Federal Farm Credit Bank 03/08/2013 02/22/2017 5,000,000.00 5,003,650.00 5,000,000.00 1.6% 1.61% 0.660 0.6513130A4F72 Federal Home Loan Bank 03/04/2015 02/24/2017 5,000,000.00 5,007,100.00 4,999,671.83 1.6% 1.61% 0.700 0.7003133EFAN7 Federal Farm Credit Bank 08/24/2015 04/24/2017 5,000,000.00 5,006,500.00 5,000,000.00 1.6% 1.61% 0.750 0.7403130A7UG8 Federal Home Loan Bank 04/26/2016 04/26/2017 5,000,000.00 5,004,750.00 4,999,467.36 1.6% 1.61% 0.625 0.6293130A7TT2 Federal Home Loan Bank 04/28/2016 04/28/2017 5,000,000.00 4,997,950.00 5,000,000.00 1.6% 1.61% 0.650 0.6413133ECPJ7 Federal Farm Credit Bank 05/16/2013 05/16/2017 5,000,000.00 5,000,000.00 5,000,000.00 1.6% 1.61% 0.690 0.7243134G6R70 Federal Home Loan Mortgage Co. 12/21/2015 05/26/2017 5,000,000.00 5,011,500.00 5,000,000.00 1.6% 1.61% 0.750 0.9863134G6R70 Federal Home Loan Mortgage Co. 12/22/2015 05/26/2017 5,000,000.00 5,011,500.00 5,000,000.00 1.6% 1.61% 0.750 0.9873130A5EP0 Federal Home Loan Bank 12/31/2015 05/30/2017 5,000,000.00 5,002,300.00 4,985,324.02 1.6% 1.60% 0.625 0.936163123MM1 Chelan County Public Utility D 05/22/2015 06/01/2017 2,000,000.00 1,986,280.00 1,987,287.18 0.6% 0.64% 0.70031359MEL3 Federal Nat'l Mtg. Assoc. 03/01/2016 06/01/2017 5,000,000.00 4,971,900.00 4,951,550.00 1.6% 1.59% 0.763 0.770929903DT6 Wachovia Corp 07/16/2015 06/15/2017 500,000.00 521,510.00 521,423.86 0.2% 0.17% 5.750 1.5623133EFBS5 Federal Farm Credit Bank 09/03/2015 07/03/2017 5,000,000.00 5,002,650.00 5,000,000.00 1.6% 1.61% 0.680 0.6713134G8L49 Federal Home Loan Mortgage Co. 02/25/2016 08/25/2017 5,000,000.00 5,001,950.00 5,000,000.00 1.6% 1.61% 0.800 0.7893134G7C585 Federal Home Loan Mortgage Co. 09/28/2015 09/28/2017 5,000,000.00 5,009,450.00 5,000,000.00 1.6% 1.61% 0.800 0.7893134G7V24 Federal Home Loan Mortgage Co. 10/27/2015 10/27/2017 5,000,000.00 5,011,800.00 5,000,000.00 1.6% 1.61% 0.750 0.7183134G73X7 Federal Home Loan Mortgage Co. 10/30/2015 10/27/2017 5,000,000.00 5,001,800.00 5,000,000.00 1.6% 1.61% 0.720 0.7103134G7V24 Federal Home Loan Mortgage Co. 10/29/2015 10/27/2017 5,000,000.00 5,011,800.00 4,999,171.31 1.6% 1.61% 0.750 0.7523134G82C2 Federal Home Loan Mortgage Co. 11/24/2015 11/24/2017 5,000,000.00 5,001,400.00 5,000,000.00 1.6% 1.61% 0.900 0.8883134G8ML0 Federal Home Loan Mortgage Co. 02/24/2016 11/24/2017 5,000,000.00 5,000,700.00 5,000,000.00 1.6% 1.61% 0.950 0.918764258UL1 City of Richland, WA 08/04/2015 12/01/2017 995,000.00 1,027,596.20 1,024,361.77 0.3% 0.33% 3.000 0.878962526EK1 Whatcom County School District 07/23/2015 12/01/2017 250,000.00 254,522.50 253,667.13 0.1% 0.08% 2.000 0.937


City of VancouverOutstanding Debt - General Obligation BondsSecond Quarter 2016

True FinalIssue Original Issue Amount Interest MaturityDate Purpose Amount Outstanding Cost (TIC) Date

Oct-02 To partially refund 1993, 1996, 1997, 1999, & 2000 LTGO issues, and issue $1.6 million for the Oracle HR/Payroll Management System Implementation

39,365,000 8,120,000 4.08% 12/1/2018

Jul-05 To construct & equip the East Precinct Police facility, and to partially refund the 98A and 98B LTGO bonds.

18,090,000 5,140,000 4.07% 12/1/2026

Oct-06 To fund multiple transportation projects and to fund the Marshall Community Center remodel

14,785,000 730,000 4.25% 12/1/2025

Jun-08 To fund West Police Precinct, Fire Station 810 and Police Evidence

14,570,000 1,185,000 4.51% 12/1/2027

Jun-09 To fund multiple Transportation Projects

12,970,000 1,790,000 4.03% 12/1/2028

Dec-10 To fund the new City Hall and partially refund the 2001 LTGO bond issue

13,410,000 9,205,000 4.50% 12/1/2035

Jun-11 To fund Transportation Projects for the Waterfront Access Project

10,515,000 9,325,000 3.93% 12/1/2035

Jan-12 To partially refund the 2003 LTGO bond issue for the Firstenburg Community Center

15,945,000 14,640,000 3.26% 12/1/2029

Dec-12 To partially refund the 2002 LTGO & Refunding bond issue for VancouverCenter, West Coast Bank, and Street Improvements

9,515,000 9,375,000 2.36% 12/1/2025

Jun-15 To fund the West Barracks rennovations (Vancouver Heritage Bonds)

1,296,500 1,296,500 4.33% 12/1/2028

Jun-15 To fund the West Barracks rennovations and to partially refund the 2005 LTGO, 2006 LTGO, and the 2008 LTGO issued for the East Police Precinct, West Police Precinct, Evidence Building, Fire Station 810, T t ti P j t d th

23,100,000 23,005,000 2.72% 12/1/2034


Jun-16To Partially refund 2009 LTGO issued for Transportation Projects. 7,810,000$ 7,810,000$ 1.89% 12/1/2028

Total Outstanding General Obligation Bonds 91,621,500$


City of VancouverOutstanding Debt - Revenue BondsSecond Quarter 2016

True FinalIssue Original Issue Amount Interest MaturityDate Purpose Amount Outstanding Cost (TIC) Date

Feb-04 Partially refund the 1999 Water/Sewer Revenue Bonds

26,250,000 14,875,000 3.998% 6/1/2020

Apr-05 Partially refund the 1997 Water/Sewer Revenue Bonds

42,520,000 13,625,000 4.037% 6/1/2018

28,500,000$


quarterly financial report q2 2016 - vancouver, washington · second quarter 2016 financial report...

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