2012 Mid-Year Financial Report

Financial Report2012 Mid-Year

Table of Contents

2012 Overview ....................................................1

General Fund .......................................................3

Arvada Center .....................................................9

Parks Fund ........................................................ 11

Special Revenue Funds ...................................... 13

Enterprise Funds ................................................ 16

Internal Service Funds .......................................22

City of Arvada Investment Report .................... 25

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overview 2012 OVERVIEW

2012 OverviewAs we close the first half of 2012, the City’s revenues are better than they have been since 2008 with the beginning of the Great Recession. In the General Fund, sales taxes for the first five months of the year are 5.62 percent more than the same period last year. Revenue related to building activity reflects the overall health of the economy and, as such, we also closely analyze those activities. As the following graph illustrates, we are beginning to see more single-family homes permitted in the City. Also, while the graph does not show this, there was one major multi-family residential development permitted at the beginning of 2012 at the Kipling area, with over 300 units.

SINGLE FAMILY PERMITS AND REVENUE

$2,500,000 180

160

140

120

100

80

60

40

20

0

$2,000,000

$1,500,000

$1,000,000

$500,000

$ - 2007

$1,690,476 $1,426,773 $1,175,794 $1,971,382 $1,323,638 $2,285,984GF Revenue

72 60 24 62 75 157SFD Permits

2008 2009 2010 2011 2012

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Another building activity-related revenue is “tap fees.” These fees are paid by developers for each building that connects to the City’s water and waste water system. As presented later in the report, these combined revenues are 40.4 percent higher than they were at this time in 2011.

Water revenue has been a source of concern since the last drought in the early part of this century. First, Arvada residents are learning to conserve water. Last year was a particularly wet year. Now the area is experiencing another drought. We have not had to place any significant restrictions on water use in 2012, thereby increasing the revenue. Water consumption, as shown in the discussion of the Water Fund, is 20 percent higher than at this same period last year.

Golf is one area that has significantly benefitted from the moderate weather the area has had. Throughout the year, the average temperature has been 4.4 degrees warmer each month with over 55 percent less precipitation

through July. The golf course revenue reflects one of the best years they have had since the mid of the last decade.

Using just this data, a rational conclusion would be that the economy is finding a “new normal,” and it is slowly climbing out of any negative environment. The challenge continues to be fluctuating economic news.

Unemployment is still high, the international economy is difficult to discern as to its health and the economic challenges this country is facing between the taxes and spending issues have to have long-term influences.

Admittedly, the fact our revenue base is grocery-store based may bode well for the City to withstand these external forces. We do expect to end the year with additional cash

resources to invest in the city’s future. These investments will add to the remarkable assets being completed this year, including the Skate Park, widening of sidewalks along Wadsworth, building parks along Ralston Creek and maintaining our streets.

We do expect to end the year with additional cash resources to invest in the city’s future. These investments will add to the remarkable assets being completed this year, including the Skate Park, widening of sidewalks along Wadsworth, building parks along Ralston Creek and maintaining our streets.

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general fund GENERAL FUND

General Fund Budget 2012 2012 YTD 2011 YTD

Beginning Fund Balance $23,065,000 $23,065,000

REVENUES 67,923,050 29,975,754 27,785,184

EXPENDITURES

Ongoing 69,739,751 30,152,441 24,299,287

Section 16 300,000 300,000 -

AEDA 500,000 500,000 500,000

EXPENDITURES $70,539,751 $30,952,441 $24,799,287

2012 CARRYOVERS

JPPHA 1,738,333 200,000 -

Section 16 - 583,000

Street Major Maintenance

2,490,000 - -

Citywide Training 39,000 - -

Traffic Calming 250,000 250,000 -

Long Lake Ranch Restrooms 611,000 611,000 -

Other 105,650 - -

Total Expenditures $75,773,734 $32,596,441 $25,660,954

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• TransfertotheCapitalImprovementsFundfornew parks, 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.

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As the table illustrates, we began the year with $23,065,000 in cash reserves. We budgeted $67,923,000 in revenues and $70,539,000 in expenditures. Since expenditures exceeded revenues, Council made a decision in 2011 to use $2,616,000 of cash reserves to balance the 2012 budget.

At the end of 2011, we also had projects that were not completed in the calendar year. Since appropriations lapse at the end of the calendar year, there are requests to re-appropriate these monies in the next year to complete the projects. On May 7, 2012 the Council approved the carryover ordinance for projects that needed to be re-appropriated. These amounts are added to the 2012 budgeted expenditures.

In general, revenues are in line with the budget. Sales tax, auto use tax and building revenues are all up over 2011 collections and are on pace to exceed budget estimates. Property tax and intergovernmental revenues should be close to budget estimates. General use tax is the only category that is lagging and will be monitored closely throughout the rest of the year. Expenditures are $6,935,000 more than the same period in 2011. This is due to the timing of the transfer to the Capital Improvements Fund as the transfer in 2012 for $4,875,000 was made in the second quarter 2012 compared to the fourth quarter in 2011. 2012 expenditures also reflect a transfer to JPPHA of $1,083,000 for operating expenditures and the purchase of land. The next few pages discuss the City’s revenues and expenditures in more detail.

Revenue HighlightsThe following section highlights the sources generated to meet the operating expenditures of the General Fund. The City’s revenue comes from many sources as illustrated in the graph below. Information about sales tax, use tax, property tax and intergovernmental revenues is detailed in the next few pages.

GENERAL FUND REVENUE

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SALES TAX COLLECTIONS

USE TAX COLLECTIONS

Sales TaxSales tax collections in 2012 show that we continue to recover from the Great Recession. The graph below shows actual sales tax collections. Sales tax collections lag one month, therefore the 2012 collections represent sales tax collections for five months.

Use TaxThe City has three prime use tax types: general, building and automobile. These are taxes paid in lieu of sales tax on purchases.

General use tax is the only type that is lagging. Current collections are $394,000 which is down over 20 percent from the prior year. We will continue to monitor general use tax, however building and auto use tax will most likely cover the deficit in general use tax.

Building use tax for 2012 is at $1,200,000, which will easily exceed the budget of $1,300,000. Both single-family attached and detached permits are up and a large assisted-living facility development also contributed to the increase in building use tax.

Consumers continue to purchase vehicles. Auto use tax collections are showing a 7.5 percent increase over the previous year. Auto use tax is budgeted to increase 6.2 percent for annual collections of $4,275,000.

Sales tax receipts for the first five months in 2012 are 5.62 percent above 2011 actuals. Sales tax collections are on track to exceed the 2012 budget of $36,118,000, which will be the first year that we exceed our pre-recession high in 2008.

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Property TaxThe City’s property tax rate is 4.31 mills per $100 of valuation. In Colorado, the mill rate is placed on the assessed valuation. The following graph illustrates the collections for the past three years and the first six months of 2012.

Intergovernmental RevenuesThis category is made up of 2 revenue sources, Highway Users Trust Fund (HUTF), which is the City’s share of State-collected gas tax revenue, and Road and Bridge, which is the City’s share of property tax collected by Jefferson County and dedicated to the maintenance of roads and bridges. Combined, these revenues have averaged a little over $4.5 million in the past three years. We are budgeted to receive a little more than $4.7 million in 2012. The collection rate through the first half of the year shows that we should exceed this budget by 1 percent or approximately $50,000. Costs of street repair continue to escalate. In 2011, we saw asphalt-related items rise 12 percent. This trend continues in 2012, with an average of an 8 percent increase. As costs continue to rise, added pressure is put on other revenue sources to help fill in the increasing shortage.

PROPERTY TAX COLLECTIONS

INTERGOVERNMENTAL REVENUES

Property tax is a stable revenue source for the City. The budget for 2012 is $4,550,000. At this point of the year, we are estimating our actual collections will be $4,450,000.

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All Other Revenue SourcesAs the pie chart of General Fund Revenues illustrates, the remaining revenue sources consist of building permits, utility fees, fees we receive from other funds for general services, fees and fines and miscellaneous revenues. Investment interest earnings fall under the miscellaneous category and in the past were a healthy source of revenue, generating just over $1,000,000. Since the onset of the Great Recession, interest earnings continue to fall and the estimate for 2012 is $250,000. The last section of this report reviews the investment portfolio in detail.

Expenditure HighlightsThe largest expenditure in the General Fund is personnel costs which account for 47 percent of expenditures.

GENERAL FUND EXPENDITURES

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Salary and Benefit SavingsSalary & Benefits* 2012 Budget 2012 YTD 2011 YTD

Salaries & Wages $ 26,900,997 $ 11,815,447 $ 11,462,339

Vacancy Savings (586,000) (270,462) -

Overtime 877,161 309,713 304,225

Group Insurance 4,494,739 1,861,954 1,741,498

Retirement 3,081,596 1,387,040 1,343,867

Medicare 311,913 137,416 132,418

Temporary Wages & SS 507,855 120,439 94,600

Other 368,414 169,922 176,351

Total $35,956,675 $15,531,468 $15,255,299

*These figures have been adjusted to show the same number of pay periods for both years. Twelve pay periods fell within the first half of 2012, while only 11 fell within the first half of 2011. In order to make clearer personnel expenditure comparison, the totals for the first pay period in July 2011 have been added to the 2011 YTD figures.

Fuel 2012 Budget 2012 YTD 2011 YTD

General Fund $ 519,851 $ 258,588 $ 230,532

Parks 196,296 82,042 74,761

Police Tax Increments 48,668 29,153 26,408

Utilities 219,349 72,444 79,335

Other 57,257 32,514 36,053

Total Expenditures $1,041,421 $474,740 $447,089

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arvada centerARVADA CENTER

Arvada CenterArvada Center 2012 Budget 2012 YTD 2011 YTD

Beginning FB $ 232,174 $ 232,174

REVENUES

Generated 6,199,444 2,536,902 2,349,919

SCFD 1,034,000 248,321 248,791

City Cash Transfer-Original 1,218,122 609,061 591,321

City Cash Transfer-Additional 425,000 212,500

City In-Kind Transfer 1,967,270 - -

Total Revenues $ 10,843,836 $ 3,606,784 $ 3,190,031

EXPENDITURES

Ongoing 8,876,566 3,958,526 3,485,154

In-Kind 1,967,270 - -

Total Expenditures $ 10,843,836 $ 3,958,526 $ 3,485,154

Income/(Loss) - (351,742) (295,122)

Cash Balance 232,174 (119,568)

Goal (11% of Expenditures) 1,192,822 435,438

Excess/(Deficit) $ (960,648) $ (555,006)

With a Mission “to inspire the residents of our region to live and learn creatively by experiencing the performing arts, visual arts, educational programs, and historical exhibits”, the Arvada Center continues to focus on partnerships, collaboration, and innovation to maintain and increase programming, audience base and revenue. The Mission of the Center requires constant vigilance and balance between and amongst commercially viable, revenue producing productions, classes, and workshops and reduced cost and free offerings, as well as community-focused and accessible programs.

In the first half of 2012, there were several highlights of the Center’s work to remain focused on the Mission and maintain fiduciary responsibility. Examples include the continuation of the Center’s relationship with the Lone Tree Arts Center and the touring of one production to Lone Tree; the co-production of The Twelfth Night with the Colorado Shakespeare Festival, decreasing costs for both theaters. For the first time, Education Camps were held during Spring Break, to great success, and the Galleries continued to offer award-winning exhibitions free to the public. In addition, the Center was able to secure a significant Presenting Sponsor to help underwrite some summer programming.

Although the Center has increased revenue during the first half of 2012 over the first half of 2011, costs have also increased. The Performing Arts Division is a primary revenue and cost center that continues to be difficult to predict year-to-year due to market conditions,

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Scientific and Cultural Facilities District (SCFD) grant contributions are budgeted to increase almost 6 percent compared to 2011. The SCFD is expected to contribute a little over $1 million dollars for the calendar year 2012.

The City of Arvada is budgeted to contribute $1,643,122 in cash support in 2012 or a 2.2 percent increase over total 2011 cash support.

SCFD REVENUE

CITY OF ARVADA CONTRIBUTIONS

show availability, consumer choice, and maintaining cost controls. Center staff continues to work through the challenges associated with producing theater and continues to make adjustments to better align the budget. Through the first four productions of 2012, in total, costs have outstripped revenue, although revenue and attendance is increased over the same period in 2011.

Overall, 2012 shows an additional loss of $56,000 through June compared to 2011 for the same time frame. It should be pointed out that the General Fund transferred an additional $425,000 to the Center in 2011. This amount was budgeted for 2012 and is already being transferred to the Center on a monthly basis, reflected in the City Cash Transfer - Additional line. If you remove this additional monthly transfer amount, the 2012 loss through June would be at a $564,000, a $269,000 increase over 2011. However, there are two significant operational issues that do account for a major portion of the deficit showing in the first 6 months of 2012. First, there is an additional pay period in the first six months of the year as compared to 2011; therefore, payroll was approximately $200,000 greater in June of 2012 versus June of 2011. In addition, and much related to increased payroll, is the fact that the calendar was changed in 2012 to accommodate the installation of new theater seats. This change moved the summer production from July to June, further increasing May and June costs, not only in regular wages, but, due to the compressed schedule between shows, overtime and temporary wages were significantly impacted. It is anticipated that much of these increased costs will be offset by decreased costs In July and August. The Center will continue to monitor the budget and adjust accordingly.

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parks fund PARKS FUND

Parks FundParks Fund 2012 Budget 2012 YTD 2011 YTD

Beginning Fund Balance $ 3,794,000 $ 3,794,000

REVENUES

Generated $ 182,025 $ 92,282 $ 95,496

Open Space 3,203,449 1,033,966 998,042

APEX Reimbursement 898,000 2,541 -

City Cash Transfer 2,808,044 1,404,022 1,420,136

Total Revenues $ 7,091,518 $ 2,532,811 $ 2,513,674

EXPENDITURES

Ongoing $ 7,289,653 $ 3,008,386 $ 2,724,319

Capital - - 12,759


Income/(Loss) (198,135) (475,575) (223,404)

Ending Fund Balance 3,595,865 3,318,425

Goal (11% of Total Expenditures) 801,862 330,922

Excess/(Deficit) $ 2,794,003 $ 2,987,503

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Revenue HighlightsGenerated revenue was down 3.37 percent, primarily related to a reduction in Education Classes. Open space revenue increased 3.60 percent. The City transfer was reduced by 1.13 percent in 2012 for an overall revenue increase of .76 percent.

Expenditure HighlightsTotal actual expenditures are 45 percent of the 2012 budget. Salaries and benefits, with overtime, are 17.9 percent higher in 2012 than the same period in 2011. Of this amount, overtime comprises $32,000 more in 2012 over 2011.

PARKS REVENUE

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special revenue funds SPECIAL REVENUE FUNDS

.21 and .25 Tax Increment Funds.21 and .25 Tax Increment Funds 2012 Budget 2012 YTD 2011 YTD

Beginning Fund Balance

$ 12,356,000 $ 12,356,000

REVENUESSales Tax / Audit Revenue $ 5,598,455 $ 2,369,259 $ 2,266,044

Use Tax 866,240 477,848 370,922

Other 333,000 124,708 211,145

Total Revenues $ 6,797,695 $ 2,971,815 $ 2,848,111

EXPENDITURES

Ongoing $ 6,911,727 $ 3,114,296 $ 2,665,402


Income/(Loss) (114,032) (142,481) 182,709

Ending Fund Balance $ 12,241,968 $ 12,213,519 $ 182,709

Goal (11% of Total Expenditures) 760,290 342,573

Excess/(Deficit) $ 11,481,678 $ 11,870,947

Special Revenue Funds OverviewSpecial Revenue Funds account for revenues that are to be used for specific purposes. The following funds 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 and Use Tax revenue continues to increase over mid-year 2011, with 4.55 percent increase in Sales Tax, and 28.83 percent in Use Tax.

Expenditure Highlights Total actual expenditures are 45 percent of the 2012 budget. Salaries and benefits, with overtime, are 17.9 percent higher in 2012 than the same period in 2011. Of this amount, overtime comprises $32,000 more in 2012 over 2011.

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Community Development

Community Development Fund 2012 Budget 2012 YTD 2011 YTD


REVENUES

Recovered $ 114,737 $ 31,250 $ 13,920

Grants 638,000 185,990 91,352

City Cash Transfer 45,000 22,500 22,500

Interest/Other 19,500 9,967 6,459

Total Revenues $ 817,237 $ 249,707 $ 134,231

EXPENDITURES

Ongoing $ 454,826 $ 165,457 $ 156,496

Essential Home Repairs 380,625 175,217 99,429

Loans 125,000 - -

Total Expenditures $ 960,451 $ 340,674 $ 255,925

Income/(Loss) (143,214) (90,966) (121,694)

Ending Fund Balance $ 6,954,786 $ 7,007,034

Having completed a ten-year plan for effective use of the substantial fund balance over time, much of which came from the Apple Creek Repayment, Community Development will see a notable increase in expenditures over the coming years.

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Arvada Housing Authority

Arvada Housing Authority 2012 Budget 2012 YTD 2011 YTD

Beginning Fund Balance $ 390,000 $ 390,000

REVENUES

Recovered $ 19,178 $ 4,716 $ 7,464

Grants 3,900,000 1,845,164 1,865,554

City Cash Transfer 26,000 - 19,004

Interest/Other 5,464 906 721

Total Revenues $ 3,950,642 $ 1,850,786 $ 1,892,744

EXPENDITURES

Ongoing $ 380,323 $ 167,605 $ 181,894

Rents 3,532,200 2,065,072 1,948,033

Transfers 28,674 23,179 22,470


Income/(Loss) 9,445 (405,070) (259,654)

Ending Fund Balance $ 399,445 $ (15,070)

EOC ENERGY ASSISTANCE 2008-2012Dollars (Grants) through June

The Arvada Housing Authority currently assists just under 500 families with monthly rent subsidies. These subsidies constitute almost 90 percent of this Fund’s expenditures.

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

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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 with 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 14.5 percent. However, consumption is up nearly 20 percent over the same period, and increased revenues in the future months will continue to exceed 2011 levels.

Expenditure HighlightsThe increase in ongoing expenses represents the additional pay period that occurred in the first half of 2012 as compared to 2011. A pay period represents about $200,000 in expenditures.

Water Fund

Water Fund 2012 Budget 2012 YTD 2011 YTD


REVENUES

Water Charges $ 18,224,100 $ 6,075,812 $ 5,306,203

Tap Fees 3,093,671 1,733,754 1,113,787

Interest 1,154,839 290,148 382,300

Other 790,371 705,439 20,098

Total Revenues $ 23,262,981 $ 8,805,153 $ 6,822,387

EXPENDITURES

Ongoing $ 15,001,149 $ 6,712,785 $ 6,529,105

Debt Service 2,265,700 195,773 212,118

Major Capital Maintenance 3,929,857 1,454,127 1,767,121

Capital 3,036,959 136,440 1,673,182


Income/(Loss) (970,684) 306,029 (3,359,138)


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Water Tap FeesThis chart shows a six year history of tap fees. This is the fourth year of increased tap fee collection at mid-year. Residential development in the northwest of the City continues to drive the increases.

Water ConsumptionThis chart shows water consumption from 2007-2012. Dry conditions throughout the first half of 2012 led to substantial increases in consumption. The City has been able to meet demand because incredibly high snow pack levels in 2011 kept reservoir storage levels above historic averages into the beginning of 2012.

WATER FUND - TAP FEESAs of June

WATER CONSUMPTION(thousands of gallons) As of June

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

Wastewater Fund

2012 Budget 2012 YTD 2011 YTD


REVENUES

Sewer Charges $10,704,387 $4,962,684 $5,150,662

Tap Fees 234,486 190,893 109,741

Interest 209,614 49,913 52,680

Other 560,683 123,083 149,853

Total Revenues $11,709,170 $5,326,573 $5,462,936

EXPENDITURES

Metro District $6,536,367 $3,270,480 $2,944,310

Ongoing 2,859,070 1,288,131 1,319,650

Major Capital Maintenance 1,849,283 29,476 757,649

Capital 360,500 60,700 -


Income/(Loss) 103,950 677,787 441,328

Ending Fund Balance $10,843,950 $11,417,787

Revenue HighlightsReflective of the considerable increase in building activity within the City, year-to-date tap fee revenues are up nearly 74 percent.

Expenditure HighlightsCharges from the Metro Wastewater Reclamation District, up 11 percent year-to-date, continue to represent a majority of total expenditures for the Wastewater Fund.

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

Stormwater Fund

2012 Budget 2012 YTD 2011 YTD


REVENUES

Stormwater Fee $ 3,119,747 $ 1,584,213 $1,648,525

Other 66,268 42,314 40,967

Total Revenues $ 3,186,015 $ 1,626,527 $1,689,492

EXPENDITURES

Ongoing $ 1,158,846 $ 42,205 $ 479,567

Debt Service 932,488 466,244 466,794

Capital 9,850,000 1,016,792 908,234


Income/(Loss) (8,755,319) (398,713) (165,103)

Ending Fund Balance $ 2,197,681 $10,554,287

Revenue HighlightsThe Stormwater Utility Fee, which represents 97 percent of the Fund’s total revenue, remains at rates that became effective in 2009.

Expenditure HighlightsCosts related to the replacement of the Garrison Street Bridge and related channelization on Ralston Creek continue to dominate Stormwater expenditures.

Wastewater Tap FeesThis chart shows the history of tap fees from 2007-2012. As with water tap fees, residential development in the northwest of the City continues to drive the increases.

WASTEWATER FUND - TAP FEESAs of June

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Golf FundGolf Fund 2012 Budget 2012 YTD 2011 YTD


REVENUES

Golf $ 2,570,729 $ 1,542,832 $ 1,254,219

Restaurant 1,079,401 564,550 491,458

City Cash Transfer 219,474 109,737 106,541

Total Revenues $ 3,869,604 $ 2,217,119 $ 1,852,218

EXPENDITURES

Golf $ 2,048,912 $ 899,911 $ 852,740

Food 955,835 512,388 444,869

Operations 860,152 366,333 530,545

Capital 9,546 9,546 -


Income/(Loss) (4,841) 428,941 24,064

Ending Fund Balance $ 201,159 $ 634,941

Revenue HighlightsRounds at West Woods continue to increase with a 19 percent increase from 2011. Lake Arbor rounds increased 13 percent and continue to be the best valued golf course in the region. West Woods Restaurant increased revenue by 13.19 percent. Beverage increased by 16.55 percent and food by 11.34 percent. Lake Arbor Restaurant increased by 13.08 percent, beverage by 10.24 percent and food by 19.31 percent. Overall revenue increased by 19.70 percent from 2011.

Expenditure HighlightsTotal actual expenditures decreased by 2.19 percent from 2011. The restaurants experienced an increase due to increased use of temporary staff and inventory demands from 2011 to 2012, primarily at the West Woods Restaurant. Operations decreased by 30.95 percent due to a combination of realignment of Risk Management services, retirement of debt principal related to the golf carts transitioning from gas to electricity, and 2012 CIP projects which were prefunded and completed in 2011.

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Rounds by Type - January thru June 2011/2012

WEST WOODS Regular Special Tournament Annual Senior Junior Other Total

2011 7,711 7,087 748 2,042 1,961 469 199 20,217

2012 11,239 4,964 1,142 2,649 3,033 531 470 24,028

3,528 -2,123 394 607 1,072 62 271 3,811

46% -30% 53% 30% 55% 13% 136% 19%

LAKE ARBOR Regular Special Tournament Annual Junior Other Total

2011 6,628 4,959 692 9,016 258 490 22,043

2012 10,159 3,828 375 9,367 289 891 24,909

3,531 -1,131 -317 351 31 401 2,866

53% -23% -46% 4% 12% 82% 13%

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Hospitality FundHospitality Fund 2012 Budget 2012 YTD 2011 YTD


REVENUES Banquets $ 944,776 $ 473,589 $ 449,749

Concessions 148,841 55,666 63,091

Miscellaneous 573,146 235,822 236,423

Total Revenues $ 1,666,763 $ 765,077 $ 749,263

EXPENDITURESOverhead $ 587,282 $ 139,779 $ 155,808

Operations 1,263,406 601,701 535,097

Capital 263,096 - -

Transfer to General Fund 128,000 - 56,037

Total Expenditures $ 2,241,784 $ 741,480 $ 746,942

Income/(Loss) (575,021) 23,597 2,321

Ending Fund Balance 182,979 781,597 2,321 Goal (25% of Total Expenditures) 560,446 185,370

Excess/(Deficit) $ (377,467) $ 596,227

Revenue HighlightsBanquets increased 5.30 percent over 2011 in events related to governments and non-profits. Concessions percentage decreased 11.77, for an overall revenue increase from 2011 by 2.11 percent.

Expenditure HighlightsOverhead expenditures have decreased by 10.29 percent in 2012 versus 2011. This was caused by the elimination of the Transfer to General Fund in 2012, with those funds to be used for the purchase of equipment, which is now reflected in the budget under Capital. There was an alignment with Risk Management services from 2011 and a vacant position for salary savings in 2012.

Operational-related expenditures have increased by 12.45 percent in 2012 versus 2011. This was caused by an increased use in Temporary Wages, Supplies and Expenses, and adjustment to reflect correct costing on 3 positions’ salaries and benefits from 2011.

Banquets increased 5.30 percent over 2011 in events related to governments and non-profits. Concessions percentage decreased 11.77, for an overall revenue increase from 2011 by 2.11 percent.

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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 well-managed safety and cost controls, overall charges to participating Funds were reduced by 16 percent for 2012.

Expenditure Highlights The Risk Management Division became fully staffed for the first time in a couple of years in September 2011. This is reflected in the increase in Operations expenditures in 2012. Additionally, about $170,000 in expenses related to network liability are reflected in the increased 2012 Administration expenditures.

Risk Management

Risk Management 2012 Budget 2012 YTD 2011 YTD

Beginning Fund Balance

$ 4,684,000 $ 4,684,000

REVENUES

Transfers $ 2,310,582 $ 1,152,032 $ 1,337,024

Other 66,000 24,694 45,533

Total Revenues $ 2,376,582 $ 1,176,726 $ 1,382,557

EXPENDITURES

RM Administration $ 1,916,248 $ 1,189,180 $ 1,011,263

RM Operations 603,648 283,551 234,837


Income/(Loss) (143,314) (296,004) 136,457


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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 services remain frozen in 2012, providing relief to all contributing Funds.

Expenditure Highlights Among the replacement purchases being made in 2012 are fifteen new Ford Police Interceptor Utility Vehicles.

Information Technology and Print ServicesInformation Technology and Print Services

2012 Budget

2012 Actual

2011 Actual


REVENUES

Maintenance $ 959,712 $ 479,856 $ 479,500

Replacement 897,441 440,278 458,040

Print Shop 425,049 149,869 153,530

Total Revenues $ 2,282,202 $ 1,070,003 $ 1,091,070

EXPENDITURES

Maintenance $ 1,259,365 $ 461,083 $ 211,601

Replacement 2,493,850 1,395,381 447,412

Print Shop 389,265 117,201 121,670

Total Expenditures $ 4,142,480 $1,973,665 $ 780,683


Vehicles

Vehicles 2012 Budget 2012 YTD 2011 YTD


REVENUESMaintenance Transfers $2,132,707 $1,066,354 $1,066,324

Replacement Transfers 1,095,582 547,791 545,552

Other 379,476 86,005 75,436

Total Revenues $ 3,607,765 $ 1,700,150 $ 1,687,311

EXPENDITURESMaintenance $ 2,240,356 $1,054,680 $ 945,685

Replacement 2,125,820 1,132,625 1,954,959


Income/(Loss) (758,411) (487,155) (1,213,333)

Ending Fund Balance $ 6,226,589 $6,497,845

OverviewThe Computers Fund provides resources for both the ongoing maintenance and replacement of the City’s computers, network hardware, and other electronic infrastructure. It is funded with contributions by all City divisions based on their levels of use of information technology. The Print Shop Fund provides ongoing capital support for the City’s printing needs.

Revenue HighlightsWhile contributing Funds remain consistent from 2011, Computer Replacement and Print Shop revenues were reduced in comparison to mid-year 2011 by approximately 6 percent. Computer Maintenance increased by a small percentage. Overall revenue was reduced 1.97 percent.

Expenditure Highlights The phone system replacement project is in its final closing stages and the kick-off of the email system replacement has begun. There are a couple of upgrades still planned for 2012 including the continuation of the desktop virtualization program which currently has 100 users in production, and the police information systems upgrade scheduled for the end of the year. The Print Shop is replacing hardware for the plate maker and should be completed the end of 2012.

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Buildings

Buildings 2012 Budget 2012 YTD 2011 YTD

Beginning Fund Balance $ 1,654,000 $1,654,000

REVENUESReplacement Transfers $ 407,351 $ 203,675 $ 203,675

Other 112,849 113,579 117,656

Total Revenues $ 520,200 $ 317,254 $ 321,331

EXPENDITURES

Replacement $ 766,799 $ 201,223 $ 54,057

Capital Lease 112,848 54,855 54,072

Total Expenditures $ 879,647 $ 256,078 $ 108,128

Income/(Loss) (359,447) 61,176 213,203

Ending Fund Balance $1,294,553 $1,715,176

Arvada Economic Development Association

Operations 2012 Budget 2012 YTD 2011 YTD


Revenue 726,000 363,000 351,000

Expenditures 744,029 354,380 325,413

Ending Fund Balance $ 411,202 $ 437,851

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 HighlightsDue to careful tracking and constant reevaluating of a comprehensive replacement schedule, contributions remain at 2009 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.

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

Expenditure Highlights Expenditures through June 2012 are about $29,000 higher than June 2011 due to a professional landscape study that is being performed. There will be some savings throughout the year as a revised commercial real estate newsletter was designed to save staff time and approximately $4,000 per year. AEDA staff researched, authored, designed and produced documents for marketing purposes such as the Arvada community profile, annual calendar, ad campaign, and annual report. Social media outreach grew significantly, increasing exposure for Arvada.

Program 2012

Beginning Cash Balance $ 721,482

Revenue 513,566

Expenditures (98,897)

Ending Cash Balance 1,136,151

Reserved for AEDA Loan Program (300,000)

Reserved for Pilot AEDA Small Business Grants (60,816)

Reserved for Job Creation Program (25,000)

Commitments (231,125)

Ending Unallocated Cash Balance $ 519,210

Revenue HighlightsRevenues in 2012 reflect the third $500,000 payment of the $1,500,000 transfer from the City of Arvada for the AEDA business financial assistance programs.

Expenditure HighlightsExpenditures by mid-2012 reflect 12 pilot business grants and one financial assistance redevelopment grant. Four new loans were approved through the Colorado Enterprise Fund.

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.

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investment reportCITY OF ARVADA INVESTMENT REPORT

June 2011 June 2012 Difference

YTD Return 1.130 .770 -36 basis points

YTD Benchmark Return .64 .38 -26 basis points

Interest Booked YTD $1,184,011 $824,399 -$359,612

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

Investment Portfolio PerformanceFor second quarter 2012, the portfolio yield was .770 percent following annual yield of 1.119 percent for 2011. The benchmark yield for the City’s portfolio is a weighted benchmark of allowable securities. For second quarter, the weighted benchmark return was .38 percent, constructed using the average of 2012 monthly returns. The table below shows a year-over-year comparison:

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.

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Portfolio Changes- 2012The City’s portfolio has decreased $3.2 million from December, 2011 to June, 2012. Changes in the portfolio are shown in the chart below:

Security Sector December 31, 2011 Balance

% of Portfolio

June 30, 2012

% of Portfolio

% of Change

Savings, Money Market $21,135,849 10.11% $24,153,860 11.74% +14.28%

Certificate of Deposit 19,185,915 9.18% 19,231,056 9.34% +.002%

Corporate 21,000,000 10.05% 5,000,000 2.43% -76.1%

LGIP 67,013,063 32.06% 49,425,322 24.01% -26.2%

US Agency 73,700,000 35.26% 101,000,000 49.07% +37.0%

US Treasury 7,000,000 3.34% 7,000,000 3.40% 0.00%

Total $209,034,827 $205,810,238

As of June 30, 41 percent of the City’s portfolio has a maturity range of less than one year. This is due to the fact that many of our non-callable securities purchased in prior years will mature in within the next year and we anticipate a large payment for the Denver Water project in the next year. The maturity range of the City’s portfolio is shown in the graph below:

PORTFOLIO DISTRIBUTION BY MATURITY RANGEJune 2012

As of June 30, 41 percent of the City’s portfolio has a maturity range of less than one year.

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Current Investment EnvironmentIn June, the Feds announced that operation twist will be continued through 2012 which includes selling of $267 Billion of short term treasuries and purchasing the same amount of long term treasuries. This measure is being taken to keep long term rates low in an attempt to stimulate borrowing. The Feds have also announced that it is expected that interest rates will remain low through 2014. Treasury yields have decreased between 2bps and 172bps from June, 2011 to June, 2012 as shown in the graph below:

We have been investing in securities with a call lock out period of six months or more to gain some yield in the portfolio. LGIP funds are currently yielding 22bps compared to 10bps at this time last year, we attempt to keep LGIP balances only to satisfy operating needs as other options provide more yield to the City. In the past six months we have invested in a money market fund that is available to governmental entities in Colorado which yields approximately 8-10bps more than the LGIP funds. We are currently keeping a $10 Million balance in the City’s bank account as we are earning a 35bps credit to off-set banking fees versus earning 22bps in an LGIP account.

The investment policy allows for the investment in corporate bonds with a AA credit rating or better but we look to invest at a AA+ or better credit rating to allow for rating down-grades. It is becoming more and more difficult to find corporate bonds with AA or higher credit ratings and when found, large premiums are attached to these bonds which make purchase prohibitive for the City. We continue to look at corporate bonds and purchase when it is beneficial for the City, this is an area we will continue to monitor.

The City’s portfolio has decreased $3.2 million from December, 2011 to June, 2012. Changes in the portfolio are shown in the chart below:

HISTORICAL TREASURY YIELDSJune 2011-June 2012

City of Arvada Investments as of June 30, 2012 (LGIP not included)

Description CUSIP/Ticker Credit Rating 3/31/2012 Face Value Interest/

Dividends 2012

HIGH YIELD SAVINGSJPMorgan Chase Savings CHASE N/A 16,132,480.81 12,874.97

Wells Fargo Savings WELLSFARGO N/A 5,020,369.01 4,125.47

Sub Total Cash 21,152,849.82 17,000.44

Chart continues next page

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Description CUSIP/Ticker Credit Rating 3/31/2012 Face Value Interest/

Dividends 2012

CERTIFICATE OF DEPOSITFIRSTBANK 0.5 7/27/2012 CD5343 N/A 5,023,363.31 12,414.61

FIRSTBANK 0.3 5/30/2012 CD7273 N/A 4,060,212.41 6068.94

FIRSTBANK 0.4 11/30/2012 CD7281 N/A 5,107,438.13 10,096.00

FIRSTBANK 0.7 5/3/2012 CD4673 N/A 5,040,042.14 16,561.72

Sub Total Certificate of Deposit 19,231,055.99 45,141.27

CORPORATEBerkshire Hathaway Fin Corp 5 8/15/2013 084664BG5 AA+ 3,000,000.00 75,000.00

General Electric Co 5 2/1/2013 369604AY9 AA+ 2,000,000.00 50,000.00

Sub Total Corporate 5,000,000.00 125,000.00

US AGENCYFFCB .059 6/19/2015-12 3133EAUZ9 AAA 5,000,000.00

FFCB 0.73 10/17/2014-12 31331KF47 AAA 5,000,000.00 18,250.00

FFCB 1.45 8/3/2015-12 31331KTP5 AAA 6,000,000.00 43,500.00

FFCB 2.09 7/18/2016-12 31331KRN2 AAA 5,000,000.00 52,250.00

FFCB 3.875 11/13/2012 31331GEJ4 AAA 3,000,000.00 58,125.00

FFCB 1.0 3/8/2015 3133EAGG7 AAA 4,000,000.00

FFCB 1.36 4/4/2017-13 3133EAKP2 AAA 5,000,000.00

FHLB .50 2/24/2015 313376ZJ7 AAA 5,000,000.00

FHLB .90 8/22/2016 3133782E0 AAA 5,000,000.00

FHLB .50 3/28/2016 313378KH3 AAA 3,000,000.00

FHLB Step 9/30/2016-11 313375RT6 AAA 5,000,000.00 25,000.00

FHLB 2.125 12/28/2015 3133727K4 AAA 2,000,000.00 21,250.00

FHLB Step 10/30/2015-12 3133793H0 AAA 4,000,000.00

FHLB Step 4/12/2017-12 313378R29 AAA 3,000,000.00

FNMA 1.05 9/9/2013-11 3136FPEL7 AAA 5,000,000.00 26,250.00

FNMA .80 2/24/2016 3136FTM89 AAA 5,000,000.00

FNMA 1.05 10/21/2015 3136FTDG1 AAA 5,000,000.00 26,250.00

FNMA 1.35 3/14/2017 3136FT2R9 AAA 2,000,000.00

FNMA .60 5/29/2015-13 3136G0HP9 AAA 3,000,000.00

FNMA 1.05 11/14/2016-13 3136G0GT2 AAA 5,000,000.00

FNMA 1.25 5/17/2017-13 3136G0FS5 AAA 3,000,000.00

FNMA Step 4/26/2016-13 3136G0DZ1 AAA 3,000,000.00

FNMA 1.0 12/28/2016-13 3136FT3J6 AAA 5,000,000.00 12,500.00

FNMA Step 9/14/2016-12 3136FRV26 AAA 5,000,000.00 25,000.00

Sub Total US Agency 101,000,000.00 308,375.00

US TREASURYT-Bond 2.625 6/30/2014 912828KY5 AAA 2,000,000.00 26,250.00

T-Note 1.375 3/15/2013 912828MT4 AAA 5,000,000.00 34,375.00

Sub Total US Treasury 7,000,000.00 60,625.00

Total 156,384,916.21 556,141.71

City of Arvada Investments as of June 30, 2012 (continued)

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

2012 Mid-Year Financial Report

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