Quarterly Financial Report Q4 2016 - Vancouver, Washington · Expenditures in the General Fund by...

"A colorful past, a bright future"

Quarterly Financial Report

Fourth Quarter 2016

Fourth Quarter 2016 Financial Report City of Vancouver 1

Fourth Quarter 2016 Financial Report (This report contains un-audited financial information as of March 12, 2017)

Table of Contents

Section Page

I. Executive Summary 3 II. Economic Report 4 III. Financial Results 13 IV. Outstanding Debt 27 V. Investments 27 VI. Interfund Loans 29

Attachments

A Expenditure Summary by Fund 30 B Revenue Summary by Fund 33 C Investment Portfolio Tables 36 D Outstanding Debt 39

- - - - - 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 through the end of 2016, at an annualized pace of growth of 1.9% in the fourth quarter of 2016, according to the second estimate published by the Bureau of Economic Analysis. Most recent data indicates that the increase was mostly due to increases in personal consumption expenditures, private inventory investment, residential fixed investment and state and local government spending. The national unemployment rate has been stable in 2016, at 4.7% at the end of year.

City of Vancouver General Fund revenues in the end of 2016 totaled $145.4 million, 2 percent above forecast. The total 2016 collections exceeded those in 2015 by approximately $6.7 million. Most of the increase was anticipated. Tax revenues, in particular, exceeded those received in 2015 by approximately $5.0 million, mostly due to the additional 1.5% in utility tax revenue approved in 2016 for Streets Initiatives (representing $1.6 million of the excess)and stronger sales ($1.3 million increase) and property tax collections, partially offset by lower than forecasted revenues in taxes on natural gas. Expenditures in the General Fund by the end of 2016 totaled $140.6 million, or 95.0% of the budget for the year. The 2016 expenditures were lower than those in 2015 by $400 thousand. Departments in the General Fund spent approximately $2.0 million more last year, but the General Governmental expenditures in 2015 were higher due to a settlement for the purchase of the attributable to the General Fund agencies share of the Operations Center and several other one-time transactions, like support of the Waterfront Project, Fire Stations construction and the Artillery Barracks. Expenditures for 2016 were a little understated as the jail billing from the County were based on estimates, and as such, were significantly below the actual amount charged in 2015. The County has implemented a new EIS software system and has had difficulty pulling the information on City of Vancouver cases. It is highly likely that once the data is available, the City would have to true-up costs for 2017. Also, the remaining budget in 2016 includes carry-forwards that will be brought forward in the first supplemental of 2017. A separate section has been added to this report on revenues and expenditures associated with the City’s new Street Funding initiative. The General Fund operating cash balance was $51.4 million at the end of December 2016. 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 87.0% of the total 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.

II. Economic Report The US economy continues to improve. 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 national economy continued to grow through the end of 2016 at an annualized pace of growth of 1.9% in the fourth quarter of 2016, according to the second estimate published by the Bureau of Economic Analysis. Most recent data indicates that the increase was mostly due to increases in personal consumption expenditures, private inventory investment, residential fixed investment and state and local government spending.1 The national unemployment rate has been stable in 2016, at 4.7% at the end of year.

1 National Income and Product Accounts; Gross Domestic Product: Fourth Quarter and Annual 2016 (Second Estimate), February 28, 2017, https://www.bea.gov/newsreleases/national/gdp/2017/gdp4q16_2nd.htm


The national seasonally adjusted unemployment rate has been fluctuating at the 4.7% - 4.9% level. 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 beginning of 2016, at an estimated level of 7.5 million nation-wide2.

Data Source: www.bls.gov

• The December 2016 Federal Reserve press release from the Federal Open Market Committee confirmed that the labor market conditions continued to strengthen and that economic activity has continued to expand at a moderate pace. Job gains remained solid and the unemployment rate stayed near its recent lows. Growth in household spending has been growing at a moderate pace, but business fixed investment has remained soft. Measures of consumer and business sentiment have improved through the end of the year Inflation increased but is still well below the longer-run objective of 2.0%.3

2 http://www.bls.gov/news.release/pdf/empsit.pdf 3 https://www.federalreserve.gov/newsevents/press/monetary/20170201a.htm


• One of the major measures of consumer confidence is the Conference Board’s compiled Index of Consumer Confidence. Three thousand households across the country are surveyed each month to determine the index. 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 trending up in 2016, improving to the highest level of 113.3 in December. The jobs outlook and inflation expectations remain at high levels.

• The second measure of consumer attitude, the University of Michigan Consumer Sentiment, paints a very similar picture. The December 2016 reading of 98.1 is much higher than the reading at the beginning of the year. Post-election confidence readings have been high, but did not result in similar increases in consumption. The two indicators of consumer confidence represent a very similar picture.


• 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 increased slightly from the reading of 123.7 at the end of June, to a reading of 124.6 in December.

“The U.S. LEI increased in December,… suggesting that the economy should continue expanding at a moderate pace, perhaps even accelerating slightly in the early months of this year. December’s large gain was mainly driven by improving sentiment about the outlook and suggests the business cycle still showed strong momentum in the final months of 2016”, 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.

4 The Conference Board, January 26, 2017, https://www.conference-board.org/pdf_free/press/US%20LEI%20-%20Press%20Release%20January%202017.pdf


• At the national level, data on the housing sector indicates a high level of volatility. For the last quarter of 2016, housing starts jumped had large jumps in October and December, but the increase was confined to multi-unit starts. Single family homes have declined. Lack of available supply of single family homes remains an obstacle to sales acceleration in housing. The graph below shows national data.


• 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 2.1% in December, as reported by the U.S. Department of Labor. Energy prices surged by 1.5% during December alone, posted their fourth straight strong monthly gain. Medical care and housing were other areas of strength. Food prices have been soft and apparel prices posted a decline. The graph below shows annualized inflation rate changes in both CPI and Core CPI (less food and energy).

State Economy • The January Economic and Revenue update from the Washington Economic and

Revenue Forecast Council confirms that the Washington economy continues to expand. Unemployment rate is low, housing construction is strong, home prices continue to rise and personal income estimates indicate a 4.6% annual growth rate, the 4th highest in the nation, surpassing the 3.5% rate for the US as a whole.

• State revenue collections are coming in higher than anticipated.5 The Revenue Act revenues (sales, use, business and occupation, utility and tobacco taxes) came in 6.8% higher than they did in 2015. Other taxes, including property and REET taxes came in slightly lower, partially offsetting the increase in the Revenue Act revenues.

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

5 Washington June Economic & Revenue Forecast, http://www.erfc.wa.gov/publications/documents/jan17.pdf


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 2016, a total of 319 single residential units were permitted with a total valuation of $33.9 million.

• 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 total of 609 and 705 units were permitted, respectively. Year 2016 showed strong new multi-family construction activity, but there was a significant slowdown in all of the remaining quarters of the year, resulting in the total number of 367 units permitted during the year.


• Activity level in the commercial sector has remained strong. A total of 71 commercial projects were permitted in 2016 with the total valuation of $141.9 million, slightly higher than the total 2015 commercial projects’ valuation of $135.1 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 December of 2016 was 2.6%.6 Energy prices fell 3.9%, largely the result of a decrease in the price of gasoline. The index for all items less food and energy rose 3.6% over the year.

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


• According to the Bureau of Labor Statistics, the city’s estimated unemployment rate at the end of December was 6.0%, similar to that at the county and below the estimated unemployment rate of 4.0% in Portland metro.

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 10.0%, indicating that locally the market has continued to be on an upward swing. The index for the metro housing market has grown faster locally than it did in the largest 20 cities of the country or nationally, and the values locally have exceeded those reached during the last housing bubble.


• The median home value price in Vancouver, WA is estimated to be $269.6 thousand, 9.5% higher on a year-over-year basis, according to the Zillow. By the end of 2016, the inventory in months has dropped to 1.5 months. 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 9 out of 10 possible.

III. Financial Results General Fund REVENUES

City of Vancouver General Fund revenues in 2016 totaled $145.4 million, exceeding the forecast for the year by 2.0%. The 2016 total General Fund collections exceeded those in 2015 by approximately $6.7 million. Most of the increase was anticipated. Tax revenues, largely utility, sales and property taxes exceeded those received in 2015 by approximately $5.0 million. Effective in 2016, an additional 1.5% in utility tax revenue was approved for Streets and utility rates were increased by 5.0%, generating additional $2.7 million in revenue. Sales tax collections exceeded those in 2015 by $1.8 million due to strong auto sales and construction. General fund also had a one-time true up for the utility tax revenue, that was close to $1.0 million. 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 87.0% 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 was $2.66 per $1,000 of assessed value, which was 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 increased 21.6%, almost the same assessed valuation as that experienced in 2008 and 2009. The increase in assessed valuation for 2016 was 6.41%.

• A total of $44.9 million in property taxes was collected in 2016. This year’s collections are

approximately $700 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 $36.7 million in sales tax revenue was received in 2016, approximately $1.7

million more than revenue received in 2015. The fastest growing categories of retail sales were auto sales, construction-related and general merchandise. Sales tax collections in 2016 exceeded forecast by approximately $2.3 million, most of it due to non-sustainable sales trends in the auto industry. Below is a graph representing an annual change in the sales tax revenues of the City of Vancouver – the pace of growth appears to be tapering off.


• 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 6.0% 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 $16.6 million in 2016, approximately $0.1

million below collections during 2015, mostly due to lower collections in the natural gas tax.

• Natural gas tax revenues in 2016 totaled $2.4 million, slightly below forecast. During 2015,

$2.6 million in natural gas revenue was collected.

• Telephone tax revenues in 2016 totaled $4.1 million, approximately $100 thousand below the comparable 2015 collections. The telephone tax revenue has been on a declining trend over the last several years.

• A total of $8.0 million was collected in electrical tax revenue in 2016, in line with the

comparable 2015 collections. The forecast for 2016 anticipated an approximate 5.0% increase over the actual 2015 revenues. The actuals came in slightly below the forecast.


• The revenue from cable franchise fees totaled $2.1 million in 2016, $100 thousand higher than the 2015 collections.

Water, Sewer, Storm Water and Solid Waste Taxes

• The City Utility tax on Water, Sewer and Storm Water utility during 2016 was 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 12.0% 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 20.0%. 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 $22.9 million was collected in taxes of City-owned utilities in 2016, approximately $2.8 million higher than was collected during the comparable period of


2015, resulting from a combination of the rate increases and a 1.5% utility tax increase on city owned utilities.

• In 2016, residential water revenues generated approximately 80.0% of the total water user revenues, while residential sewer fee revenues made up 66.0% of the total sewer user revenues.

Grant & Entitlement Revenues • The City anticipated receiving $1.2 million 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.

• Through the end of the year the City received $711 thousand in grant reimbursements. One of the larger grants in Police, to implement the new regional information system could not be fully utilized and has been returned to the granting agency. Other underspending on grants results from timing issues.

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 anticipated $5.0 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 through 2016 saw significant annual increases in land use fees. Similar trends appear to continue into 2016.

• Through the end of 2016, a total of $866 thousand in planning permit fee revenues was collected by the City, approximately $83 thousand above revenues received during 2015. The activity remains elevated locally compared to the last few years.

Recreation Program Fees

A total of $4.5 million in recreation fees was anticipated to be received in 2016. The activity in 2016 continued at the subdued levels experienced over the last five years. Revenue collections were $30 thousand higher than in the prior year.

EXPENDITURES

• General Fund expenditures in 2016 totaled $140.6 million, or 95.0% of the budget for the year. The amount spent was approximately $300 thousand lower than the amount spent during 2015. The difference was mostly due to the timing of supporting transfers, largely the transfer to the Fire Fund.

• Departmental spending was $2.0 million higher than it was 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 $45.6 million in 2016, or 96.8% of the budget for the year.

• General Fund expenditures in the supplies and services category were $12.6 million, or 77.1% 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 $72.1 million through the third quarter, or 98.0% of the budget for the year. The City has not been billed for the actual costs for jail services for city residents, since the County is having a difficult time pulling the data from the newly installed EIS system. It is highly likely, the true-up will take place in early 2017 for the actual costs of 2016. The remaining appropriation will be carried forward into 2017 to allow for the true-up.

• Internal expenditures were $10.2 million, $0.8 million below those in 2015.

• 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.

Cash Balance

• The General Fund operating cash balance was $51.4 million at the end of the fourth

quarter 2016. This is $10.5 million higher than the cash balance at the end of December 2015.

• In addition to the operating cash balance, the General Fund has an emergency reserve totaling $11.0 million at the end of December 2016, compared to $10.7 million in December 2015. Council updated the financial policy related to the emergency reserve balance in 2012. The policy requires the emergency reserve balance to equal 7.0% 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 $57.0 million, according to the City’s audited financial statements. It is estimated, that due to underspending of expenditures and slightly higher than forecasted revenues, the 2016


fund balance will be close to $68.0 million. Approximately $3.0-3.5 million from the 2016 appropriation will be carried forward and use the corresponding fund balance. A portion of the fund balance estimated at $0.3 million represents prepaid items and capital assets held for resale. This portion of the balance is not spendable. 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 $51.1 million represents reserves in accordance with the City Financial Policies: the City Emergency reserve of $11.0 million, Revenue Stabilization reserve of $3.7 million, reserve restricted for capital purposes of $0.7 million and the working capital of $30.4 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 $3.9 million represents funding of 50% of accrued compensated absences. The remaining portion of the balance of $12.6 million is estimated to be undesignated at end of 2016.

Street Fund • Expenditures in the Street Fund by the end of 2016 were $17.0 million, or 95.0% of the

budget, approximately $2.9 million lower than comparable expenditures in 2015. • The revenues in the fund, (excluding a budgeted general fund transfer), totaled $8.4 million,

$0.4 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 reached $3.6 million by the end of 2016,

approximately $600 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 on an upward trend. The real estate activity remains very upbeat.

• By the end of 2016, a total of $3.6 million was received in the REET revenue, $600 thousand

higher than was received during the comparable time period of 2015. 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 was 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 – started coming into the Transportation 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

Revenues Actual Budget Actual Street Initiative Operating Fund 50,852 1,404,822 1,494,477 Street Funding Initiative - Capital Fund - 2,325,023 2,052,575 Transportation Benefits District - - 1,237,043

Expenditures Street Initiative- NEW Fund - 1,243,585 748,655

Capital Streets Initiative Fund (NEW) - 1,000,000 999,039

Consolidated Fire Fund

• The City has an Operating Fire Fund and Capital Fire Fund. The Capital Fire Fund largely funds 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 in 2016 were at $1.0 million, (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 was 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. In 2016, fee revenues came in short by approximately $120 thousand compared to those in 2015.

• Total Fire Operating expenditures in 2016 were $38.0 million, 100% of the budget for the year and $2.2 million higher than in 2015. Overtime expenditures were very high in 2016.

Building Inspection Fund

• Building inspection fee revenues received in 2016 totaled $3.9 million, showing no change from the 2015 revenues.

• Building Fund expenditures through September of 2016 totaled $5.2 million,

approximately $300 thousand higher than those in 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 in 2016 were $2.2 million, approximately $200 thousand above the

comparable collections in 2015.

• The General Fund support of the Parking fund remained at the $1.25 million level in 2015 2016. The fund is anticipated to become fully self-supporting beginning in 2017.

• Operating expenses in 2016 totaled $3.1 million; approximately $193.0 thousand higher

than those in 2015, mostly due to the Government Parking District program that will extend pay stations into a currently unregulated part of downtown.

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) 487-8441 to receive a copy of the detailed financial statements for the utility funds.

Water • Water sales revenues were $30.5 million in 2016, or 102% of the forecast. Collections were

almost $1.0 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 2016 totaled $40.8 million, or 96.0% of the budget.


Sewer

• Sewer charge revenues in the Sewer Fund were $41.1 million 2016, approximately $1.7 million above the comparable 2015 revenues. Sewer rates were increased by 9.0% in 2011, 6.5% in 2012, 2.5% in 2013 and 2014 and 2.0% in 2015. The only rate increase in 2016 was to generate the tax revenue of 1.5%, dedicated to street funding.

• Sewer expenditures in 2016 totaled $40.6 million, $2.3 million below the 2015 comparable

expenditures. Storm Water

• A total of $13.5 million in storm water fee revenue was received in 2016, approximately $1.1 million higher than the 2015 comparable revenues. The Storm Water rates were increased by 5.0% 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 were $12.5 million, or 88.0% of the budget, comparable to those in 2015.


IV. Outstanding Debt

• At the end of the fourth quarter of 2016, the City had about $82.9 million of general obligation (G.O.) debt outstanding and approximately $21.3 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 3.21% 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 November indicates

that the labor market has continued to strengthen and growth of economic activity has been expanding at a moderate pace since mid-year. Job gains have been solid in recent months and the unemployment rate has declined. Household spending has been rising moderately but business fixed investment has remained soft. Inflation has increased since earlier this year but is still below the Committee's two percent longer-run objective, partly reflecting earlier declines in energy prices and in prices of non-energy imports. Market-based measures of inflation compensation have moved up but remain low; 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 two 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 two 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 increased during the fourth quarter of 2016. The yield on the three-

month Treasury has increased ending at 0.56% at the end of the fourth quarter. The six-month Treasury yield has increased to 0.67%. The yield on the two-year Treasury has increased to 1.2%. The thirty-year Treasury yield increased, ending the fourth quarter at 3.06% from 2.32%. Market risk of the City’s portfolio is low. The average maturity of the portfolio has been kept at one year. 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 fourth quarter of 2016 was $314.0 million compared to $293.0 million on December 31, 2015. The portfolio had a weighted average yield of 0.68% year to date, which is 2 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 29 bps higher than the State Investment Pool, which had an average yield of 0.51%. The State Pool has a weighted average maturity of 35 days. The City’s investment portfolio weighted average maturity is approximately 12 months. Longer-term portfolio yields will outperform shorter-term portfolio yields in a falling interest rate environment. Interest revenue distributed through the fourth quarter of 2016 to all funds is approximately $2,135,732 compared to $1,289,796 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 fourth 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 Fourth Quarter 2016

Balance InterestOutstanding Interest Expense

Fund Description 12/31/16 Lending Fund Rate Paid in 2016 Repayment Plan

108 CDBG -$ 001 0.77% 116.07$

Loan due to timing between when deposits received vs.

expenditures paid

Total Outstanding Interfund Loan Balance -$


ATTACHMENT A 2014 2015 2016 2016 % ofExpenditures Actuals Actuals Budget Actuals BudgetGENERAL FUNDCity Council 502,486 485,079 645,121 455,038 71%City Manager's Office 2,520,791 2,435,737 2,798,597 2,548,079 91%Legal Services 3,996,081 4,155,107 5,020,728 4,332,597 86%Community Economic Development 4,524,665 5,429,961 5,813,849 5,005,711 86%Parks Administration 749,735 801,613 962,974 830,295 86%Parks, Trails, & Natural Resources 2,910,587 1,114,145 1,206,305 1,186,800 98%Recreation Services 5,716,035 6,702,990 7,401,441 6,880,364 93%Police 35,136,837 38,395,903 41,501,040 39,888,051 96%Transportation 633,729 28,461 - - Grounds Maintenance 2,827,743 3,242,014 3,742,974 3,669,660 98%Facilities Maintenance 3,307,052 3,556,871 3,695,110 3,548,378 96%

Subtotal Non-Gen. Governmental 62,825,741 66,347,881 72,788,140 68,344,974 94%General Governmental

Child Justice Center Support 333,864 336,720 347,348 360,156 104%City Cable Programming 460,596 460,596 425,644 425,640 100%Fire District #6 17,437 18,157 17,640 21,392 121%Emergency Mgmt (CRESA) 140,758 143,244 146,631 145,811 99%Air Pollution Control Authority 53,356 53,885 56,166 54,692 97%Humane Society 226,386 255,631 292,853 268,914 92%Animal Control 243,743 281,137 248,056 245,290 99%Alcoholism Support 35,544 38,449 30,168 45,259 150%Regional Transp Council - 21,300 21,300 21,300 100%Election Support 182,675 303,549 350,000 184,349 53%AWC, Chamber of Commerce Membership 82,237 84,239 87,318 86,309 99%Opportunity Reserve 137,244 133,248 230,752 165,831 72%Miscellaneous 5,096,702 7,105,727 2,408,525 1,537,757 64%Public Defender 714,676 1,216,412 1,250,933 1,351,973 108%County Jail Costs 3,934,134 3,567,397 3,769,360 2,731,016 72%County Corrections Costs 1,299,551 1,255,606 1,319,539 1,385,759 105%County District Court Costs 903,924 935,985 1,034,054 1,016,123 98%General Obligation Debt Payment 6,892,169 6,881,850 6,027,302 5,908,141 98%General Govt Support 40,964,483 53,577,055 9,372,677 7,950,349 85%Street Support (formerly in General Support) - 14,648,451 14,648,451 100%Fire Support (formerly in General Support) - 30,886,091 30,886,091 100%LEOFF Pension Support (formerly in General Support) - 2,836,000 2,835,996 100%

Subtotal General Govermental 61,719,478 76,670,185 75,806,808 72,276,599 95%Total General Fund 124,545,219 143,018,067 148,594,948 140,621,573 95%

SPECIAL REVENUE FUNDSStreet 16,836,378 19,966,124 18,030,898 17,064,321 95%Street Initiative- NEW Fund - 1,243,585 748,655 60%Fire Operating Fund 32,818,755 35,602,460 38,003,849 37,848,273 100%Fire Capital Fund 908,202 859,647 2,299,414 785,964 34%AMR Compliance Fund (New) - 416,594 664,717 516,908 78%Drug Enforcement and Investigative Funds 81,459 187,098 438,073 334,745 76%Community Development Block Grant 1,713,037 3,889,529 2,843,520 2,552,712 90%Tourism 872,934 1,064,322 2,840,087 1,177,457 41%Criminal Justice/LLEBG 126,730 127,246 819,574 160,705 20%Real Estate Excise Tax - I 1,965,718 3,341,023 3,599,695 3,597,901 100%Transportation Special Revenue 2,116,927 2,094,516 2,739,834 2,279,917 83%


ATTACHMENT A 2014 2015 2016 2016 % ofExpenditures Actuals Actuals Budget Actuals BudgetParks & Recreation Special Revenue 45,088 40,407 36,189 32,767 91%Parks Construction - Residual REET 34,308 54,116 22,191 17,527 79%Downtown Initiatives 93,102 397,616 115,298 110,142 96%VNHR Properties 100,453 158,584 662,548 662,535 100%Senior Messenger 254,888 244,420 321,998 248,967 77%TIF Funds 1,968,172 1,516,745 4,937,482 2,032,380 41%PIF Funds 1,162,750 881,954 3,122,179 839,761 27%

DEBT SERVICE FUNDSG O Debt Service Fund 11,850,517 36,456,827 20,452,671 20,239,463 99%L I D Debt Fund 458,167 153,082 107,400 67,878 63%

CAPITAL FUNDS2011 Bond Capital Fund - Waterfront 228,785 155,487 4,315,835 313,075 7%Transportation Capital Fund 6,745,219 11,697,485 26,655,077 4,918,878 18%Capital Streets Initiative Fund (NEW) - 1,000,000 999,039 100%Fire Acquisition Fund - 2,325,869 12,989,130 2,498,128 19%Capital Improvement Fund 700,357 4,048,825 7,920,408 3,491,719 44%VNHR Property Capital 997 547,900 8,754,542 5,369,326 61%2015 Bond Capital Fund - VNHR (New) - 448,403 4,649,016 4,649,016 100%Parks Construction Fund (Capital Projects on 3,197,673 2,580,737 29,221,361 7,139,254 24%City Tree Reserve Fund 6,318 14,900 49,201 23,332 47%Drainage Construction Fund 988,111 586,011 2,192,648 1,461,915 67%Systems Development Reserves 1,100,000 2,549,589 2,554,548 2,500,000 98%Water Construction Fund 7,802,090 10,807,140 26,282,410 6,435,864 24%Utility Customer Assistance 15,709 23,013 35,000 18,673 53%Water Revenue Bond Debt Service Fund 643,681 643,572 645,160 645,158 100%Sewer Revenue Bond Debt Service Fund 10,782,157 10,774,584 10,769,068 10,769,067 100%Sewer System Development 1,200,000 2,550,478 2,555,525 2,500,000 98%Sewer Construction Fund 856,241 759,811 9,140,854 2,382,843 26%

ENTERPRISE FUNDSStorm Water 11,287,864 12,501,417 14,130,732 12,480,541 88%Water 29,544,969 39,374,091 42,511,331 40,790,658 96%Sewer 45,556,229 44,580,281 45,911,563 40,608,576 88%Building Inspection 4,189,595 4,926,400 5,551,752 4,886,350 88%Solid Waste 2,352,590 2,455,379 3,030,709 2,357,066 78%Parking 2,902,377 2,082,286 3,602,379 3,063,941 85%Tennis Center 1,076,443 1,093,253 1,336,982 1,241,826 93%Airpark 631,450 432,959 1,280,469 983,798 77%

INTERNAL SERVICE FUNDSFacilities Asset Mgmt & Replacement Reserve - 1,939,670 8,526,826 6,352,481 74%Equipment Services Operations Fund 5,010,721 4,774,153 5,740,269 4,904,899 85%Equipment ER&R Capital 1,501,203 2,083,724 3,558,723 1,904,782 54%Technology ER&R 2,939,024 659,372 1,966,758 1,060,355 54%Risk Fund 5,418,316 5,498,356 5,504,411 5,150,682 94%Internal Administrative Services Fund (New) - Finance - 4,855,685 5,506,739 4,921,022 89% Information Technology - 5,137,694 7,159,844 5,999,148 84% Human Resources - 1,716,057 1,864,562 1,627,801 87% General Services - 183,683 347,412 191,972 55%Benefits Fund 14,584,536 11,170,964 11,612,275 9,877,303 85%


ATTACHMENT A 2014 2015 2016 2016 % ofExpenditures Actuals Actuals Budget Actuals BudgetSelf Insured Health Insurance (New) - 5,162,871 6,896,631 6,166,580 89%Print Shop & Mail Services 172,753 193,415 213,220 165,676 78%

AGENCY FUNDSSWAT Team 172,819 181,626 222,754 145,912 66%Police Pension 923,385 740,132 981,926 944,471 96%Fire Pension 1,430,425 1,417,836 1,818,733 1,445,796 79%Cable TV 1,086,578 1,125,216 1,117,760 991,071 89%PEG 911,517 656,684 704,161 517,072 73%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, apprecia

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


ADJ-14 ADJ-15 ADJ-16ADJ-14 A B A

ATTACHMENT B DEC-14 ADJ-15 ADJ-16 ADJ-16Revenues 2014 2015 2016 2016 % of

Actual Actual Forecast Actual BudgetGENERAL FUND Tax Revenue

Property Tax 43,327,557 44,230,563 44,959,107 44,917,701 100%Sales Tax 30,052,170 35,035,394 34,334,609 36,737,708 107%Electrical Tax 8,168,161 7,941,368 8,304,928 7,952,266 96%Natural Gas 3,056,112 2,621,807 2,728,642 2,405,698 88%Telephone 4,672,282 4,154,451 4,412,693 4,120,340 93%Cable Franchise Fee 1,863,702 1,968,024 1,789,230 2,093,791 117%Water/Sewer/Storm Water 15,316,069 16,248,095 17,997,391 18,456,731 103%Solid Waste Utility Tax 4,104,064 3,877,313 4,002,716 4,403,448 110%Gambling and Leasehold Taxes 614,357 672,174 618,079 683,387 111%

Subtotal Tax Revenue 111,174,474 116,749,189 119,147,395 121,771,070 102%Business Licenses 851,489 1,095,045 913,138 1,206,219 132%Grants & Entitlements 1,526,260 1,374,629 1,220,966 711,162 58%State Shared Revenues 2,883,948 3,569,646 3,531,579 4,058,159 115%Parks Contract with Clark County 59,845 67,396 - 81,710 Charges for Services

Planning Permits 831,119 782,485 436,905 865,873 198%Recreation Program Fees 4,112,593 4,136,526 4,543,992 4,166,722 92%Interfund Service Charges 7,553,700 3,371,937 4,440,414 4,777,379 108%Other Charges & Services 801,809 819,322 768,980 925,853 120%

Subtotal Charges for Services 13,299,222 9,110,270 10,190,291 10,735,827 105%District Court 1,841,392 1,618,593 1,675,240 1,629,866 97%Miscellaneous 868,402 977,065 931,516 928,718 100%Lease Revenue (short and long-term) 3,249,652 3,574,825 3,382,599 3,566,102 105%Operating Transfers 550,353 625,064 1,530,250 744,765 49%

Total General Fund 136,305,037 138,761,723 142,522,974 145,433,599 102%SPECIAL REVENUE FUNDSStreet Fund

Real Estate Excise Tax 2,403,493 3,246,532 2,229,795 3,577,691 160%Motor Vehicle Fuel Tax 3,410,953 3,506,747 3,560,605 3,556,557 100%Permits and Misc. 745,722 1,413,478 980,886 1,348,257 137%Operating Transfers 9,987,907 11,831,555 11,858,428 11,908,174 100%

Total Street Fund 16,548,074 19,998,313 18,629,714 20,390,679 109%Operating Street Initiative Fund (NEW) 1,404,822 1,494,477 106%

Operating Fire FundService Charges-Fire Dist. #5 7,784,190 8,091,492 8,373,653 8,514,974 102%Grant Revenue 1,450,493 43,329 16,940 1,290 8%Permit/Other Fees and Misc 960,782 1,164,508 1,045,913 1,039,256 99%Operating Transfers 23,113,786 25,923,859 26,005,283 25,916,940 100%

Total Operating Fire Fund 33,309,251 35,223,189 35,441,789 35,472,460 100% Fire Equipment Fund 2,772,948 1,445,335 977,758 1,310,702 134%

AMR Compliance Fund (New) 14 680,972 680,000 681,844 100%Other Special Revenue Funds Street Initiative Operating Fund 50,852 1,404,822 1,494,477 106%

Drug Enforcement 239,969 348,898 335,000 295,815 88%Community Development Block Grant 1,570,030 3,818,039 2,203,342 2,594,279 118%Tourism 1,743,967 2,129,442 1,528,866 2,330,616 152%Criminal Justice/LLEBG 234,598 238,686 301,490 250,435 83%Real Estate Excise Tax - I 2,279,745 3,124,470 2,915,007 3,471,573 119%



Actual Actual Forecast Actual BudgetParks & Recreation Special Revenue Fund 68,510 36,656 18,605 21,807 117%Downtown Initiatives 162,422 177,035 162,344 179,435 111%VNHR Properties 188,746 240,457 563,053 566,481 101%Senior Messenger 304,535 290,206 250,000 284,284 114%TIF Funds 941,481 588,500 581,692 554,178 95%PIF Funds 1,431,114 1,820,394 655,000 1,329,737 203%Miscellaneous Special Revenue Funds 318,110 716,670 262,000 1,271,914 485%

DEBT SERVICE FUNDSG O Debt Service Fund 11,854,562 36,456,827 20,452,671 20,239,463 99%L I D Fund 587,431 121,768 4,000 33,905 848%CAPITAL FUNDS2011 Bond Capital Fund - Waterfront 18,437 19,013 - 19,799 n/aTransportation Capital Fund 11,073,464 10,786,104 24,741,314 5,049,272 20%Capital Streets Initiative Fund (NEW) 2,325,023 2,052,575 88%Capital Improvement Fund 6,621,303 2,698,435 5,789,441 2,878,202 50%Fire Acquisition Fund 6 - 12,326,500 11,142,240 90%VNHR Property Capital 281,141 2,957,571 6,969,303 5,813,814 83%Parks Construction Fund (Capital Projects o 3,956,902 13,457,520 17,950,734 6,033,011 34%City Tree Reserve Fund 16,076 37,952 81,348 144,517 178%Drainage Construction Fund 849,432 911,766 2,282,157 1,484,885 65%Water/Sewer Capital Reserves 12,026 12,485 10,000 13,257 133%Systems Development Reserves 2,103,128 3,321,361 3,887,757 3,531,230 91%Water Construction Fund 1,435,513 15,343,983 13,180,000 14,592,129 111%SCIP Fund 805,027 732,951 615,000 632,209 103%Utility Customer Assistance 11,437 13,436 41,000 15,696 38%Water Revenue Bond Debt Service Fund 645,942 646,305 645,158 555,282 86%Sewer Revenue Bond Debt Service Fund 10,819,027 10,813,597 10,784,067 10,258,981 95%Debt Service Reserves 7,208 7,633 6,000 8,106 135%Sewer Utility Fund 41,059,579 46,840,575 44,673,396 45,577,108 102%Sewer System Development 2,130,461 3,376,952 4,031,188 3,619,458 90%Sewer Construction Fund 1,449,132 5,725,049 3,370,000 4,387,235 130%ENTERPRISE FUNDSStorm Water

Storm Drainage Fees 11,661,770 12,373,597 12,920,548 13,504,975 105%Private Capital Contributions 347,885 974,406 150,000 458,820 306%Miscellaneous 284,692 373,501 100,000 375,593 376%

Total Storm Water Fund 12,294,347 13,721,505 13,170,548 14,339,388 109%Water

Residential Water Sales 21,195,019 23,338,172 23,940,772 24,452,333 102%Commercial Water Sales 4,580,210 5,136,383 4,987,379 5,082,179 102%Governmental Water Sales 821,042 985,320 919,397 998,001 109%

Subtotal Water Sales 26,596,271 29,459,874 29,847,548 30,532,514 102%Private Capital Contributions 2,613,959 6,338,529 2,500,000 2,815,152 113%Interfund Transfers 2,908,437 2,681,098 2,904,354 37,418 1%Indirect Cost Plan Revenue 1,275,294 1,570,615 1,465,300 1,555,384 106%Miscellaneous 2,152,919 1,923,196 1,301,308 1,820,842 140%

Total Water Fund 35,546,880 41,973,312 38,018,510 36,761,310 97%Sewer

Residential Sewer Charges 25,603,987 26,033,424 26,413,188 27,034,852 102%Commercial, Industrial Sewer Charges 11,705,089 12,145,094 12,454,344 12,784,902 103%Governmental Sewer Charges 1,214,558 1,220,077 1,412,056 1,299,665 92%Fourth Quarter 2016 Financial Report City of Vancouver 34


Actual Actual Forecast Actual BudgetSubtotal Sewer Charges 38,523,634 39,398,594 40,279,588 41,119,419 102%

Private Capital Contributions 956,163 2,909,577 600,000 996,489 166%Interfund Transfers 1,200,000 3,981,178 2,850,508 2,850,508 100%Miscellaneous 379,783 551,225 943,300 610,692 65%

Total Sewer Fund 41,059,579 46,840,575 44,673,396 45,577,108 102%Building Inspection

Permits 2,881,245 3,747,752 3,480,455 3,702,305 106%Miscellaneous 155,631 157,101 153,421 158,949 104%Interfund Services 647,824 692,966 639,402 398,093 62%

Total Building Fund 3,684,700 4,597,819 4,273,278 4,259,347 100%Solid Waste

Solid Waste Utility Tax 1,421,536 1,096,068 1,702,200 1,127,889 66%Service Charges-Recycling 838,822 618,174 718,500 520,158 72%Miscellaneous 73,327 112,014 30,450 104,259 342%

Total Solid Waste Fund 2,333,685 1,826,256 2,451,150 1,752,306 71%Parking

Parking Fines 442,011 382,537 578,000 535,176 93%Parking Meters & Lots 1,418,557 1,587,946 1,707,560 1,734,500 102%Miscellaneous (82,969) 38,423 (9,500) (46,461) n/aOperating Transfers 1,245,540 1,246,145 1,245,540 1,245,540 100%

Total Parking Fund 3,023,138 3,255,051 3,521,600 3,468,755 98%Tennis Center

Membership Fees 841,874 799,355 910,306 807,670 89%Instruction and Miscellaneous 20,288 24,669 132,535 99,932 75%Operating Transfers 189,864 391,598 334,795 334,794 100%

Total Tennis Center Fund 1,052,026 1,215,622 1,377,636 1,242,396 90%Other Enterprise Funds

Pearson Airfield 713,165 693,637 749,346 744,106 99%Utility Customer Assistance 11,437 13,436 41,000 15,696 38%

INTERNAL SERVICE FUNDSFacilities Asset Mgmt & Replacement Reser 1,832,604 1,838,531 1,820,000 2,278,907 125%Equipment Services Operations Fund 4,461,647 5,090,883 5,092,223 5,067,610 100%Equipment Services Capital Fund 2,880,158 3,137,085 3,061,744 3,498,562 114%Computer Repair & Replacement 7,461,199 2,898,327 3,103,980 3,618,202 117%Self-Insured Worker's Comp & Liability Fund 4,228,666 3,817,442 3,567,982 3,653,845 102%Internal Administrative Services Fund 600,088 14,042,429 14,227,672 13,427,944 94%Benefits Fund 14,658,247 9,913,855 11,507,985 9,869,526 86%Self-Insured Health Insurance Fund - 9,181,215 5,860,865 7,169,740 122%Mail Services Fund 177,863 253,035 254,511 229,457 90%AGENCY FUNDSSWAT Team 179,407 183,090 209,898 164,118 78%Police Pension 1,081,764 1,087,546 1,082,468 1,090,271 101%Fire Pension 1,976,417 1,962,342 1,981,000 1,984,793 100%Cable TV 1,330,532 1,157,137 1,029,923 895,961 87%PEG 743,057 742,603 750,000 749,491 100%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

Fourth Quarter of 2016(Dollars in thousands)

As of Percent of As of Percent of9/30/2016 Portfolio 12/31/2016 Portfolio

State Investment Pool 76,340 24.5% 93,988 29.9%Clark County Investment Pool 831 0.3% 530 0.2%U.S. Agencies 209,013 67.0% 209,982 66.7%Corporate Bonds (Pension Fund) 1,042 0.3% 1,031 0.3%Municipal Bonds 8,587 2.8% 2,288 0.7%Municipal Bonds Zero Coupon 1,991 0.6% 1,994 0.6%Federal Agency Discount Bond 4,991 1.6% 4,952 1.6%Zero Coupon Federal Agency 9,199 2.9% - 0.0%

Total by Investment Type 311,994$ 100.0% 314,765$ 100.0%

As of Percent of As of Percent of9/30/2016 Portfolio Cumulative 12/31/2016 Portfolio Cumulative

Overnight 80,597 25.8% 25.8% 94,519 30.0% 30.0%One Month 10,000 3.2% 29.0% 1,994 0.6% 30.7%Two to Six Months 61,631 19.8% 48.8% 10,000 3.2% 33.8%Six Months to One Year 52,949 17.0% 65.8% 105,008 33.4% 67.2%One to Five Years 106,817 34.2% 100.0% 103,243 32.8% 100.0%

Total by Length of Maturity 311,994$ 100.0% 314,765$ 100.0%

11 Months 12 Months


Investment Activity4th Quarter 2016

Issuer Type of InvestmentTransaction

DateMaturity

Date Purchase or

Deposit Redemption or

Withdrawal

Effective Interest

Rate

OctoberClark County Treasurer* Local Government Investment Pool 333.63 41,524.88 0.76%City of Seattle Municipal Bond 10/3/2016 3,425,000.00 3.00%FFCB Federal Agency Coupon Securities 10/19/2016 5,000,000.00 0.48%FFCB Federal Agency Coupon Securities 10/4/2016 5,000,000.00 0.79%FHLB Federal Agency Coupon Securities 10/17/2016 5,000,000.00 0.50%FHLB Federal Agency Coupon Securities 10/3/2016 5,000,000.00 0.94%FNMA Federal Agency Coupon Securities 10/24/2016 5,000,000.00 75.00%Washington State Treasurer* Local Government Investment Pool 23,961,697.89 19,000,000.00 0.63%

38,962,031.52 32,466,524.88

NovemberClark County Treasurer* Local Government Investment Pool 500.15 74,526.95 0.76%FFCB Federal Agency Coupon Securities 11/14/2016 5,000,000.00 0.60%FFCB Federal Agency Coupon Securities 11/23/2016 5,000,000.00 0.63%FFCB Federal Agency Coupon Securities 11/4/2016 5,000,000.00 97.00%FFCB Federal Agency Coupon Securities 11/16/2016 5,000,000.00 0.98%FHLB Federal Agency Coupon Securities 11/7/2016 5,000,000.00 0.60%FHLB Federal Agency Coupon Securities 11/23/2016 5,000,000.00 0.63%FHLB Federal Agency Coupon Securities 11/22/2016 5,000,000.00 1.33%FHLMC Federal Agency Coupon Securities 11/1/2016 5,000,000.00 0.63%FHLMC Federal Agency Coupon Securities 11/15/2016 5,000,000.00 1.00%FNMA Federal Agency Coupon Securities 11/23/2016 5,000,000.00 1.35%FNMA Federal Agency Coupon Securities 11/15/2016 5,000,000.00 1.13%FNMA Federal Agency Coupon Securities 11/14/2016 5,000,000.00 1.18%FNMA Federal Agency Coupon Securities 11/17/2016 5,000,000.00 0.90%FNMA Federal Agency Coupon Securities 11/15/2016 4,250,000.00 0.00%Port of Seattle WA Municipal Bond 11/1/2016 250,000.00 1.76%Washington State Treasurer* Local Government Investment Pool 43,898,052.36 29,000,000.00 0.63%

78,898,552.51 63,574,526.95

DecemberClark County Treasurer* Local Government Investment Pool 410.69 186,427.69 0.76%FHLB Federal Agency Coupon Securities 12/9/2016 4,000,000.00 1.63%


City of Vancouver Investment Portfolio Including Call Dates

12/31/2016Purchase Maturity Par Market Book Percent Cumulative Interest Effective

CUSIP Issuer Date Date Value Value Value of Portfolio Percent Rate Yield CallableCLARK CO LGIP Clark County LGIP 530,323.05$ 530,323.05$ 530,323.05$ 0.2% 0.2% 0.640 0.649WA STATE LGIP Washington State LGIP 93,988,234.39$ 93,988,234.39$ 93,988,234.39$ 29.9% 30.0% 0.461 0.4683134G6R70 Chelan County Public Utility D 05/22/2015 06/01/2017 2,000,000.00$ 1,991,740.00$ 1,994,269.74$ 0.6% 30.7% 0.700 0.709 1x Call 10/20/2015. Continuous after.3130A3CW2 Federal Farm Credit Bank 03/08/2013 02/22/2017 5,000,000.00$ 5,001,650.00$ 5,000,000.00$ 1.6% 32.3% 0.651 0.660 Non callable.313371PV2 Federal Farm Credit Bank 08/24/2015 04/24/2017 5,000,000.00$ 5,002,750.00$ 5,000,000.00$ 1.6% 33.8% 0.740 0.750 No calls3133EEM64 Federal Farm Credit Bank 09/03/2015 07/03/2017 5,000,000.00$ 4,998,650.00$ 5,000,000.00$ 1.6% 35.4% 0.671 0.680 Bullet3137EADU0 Federal Farm Credit Bank 04/08/2016 10/15/2018 5,000,000.00$ 4,980,500.00$ 5,000,000.00$ 1.6% 37.0% 1.085 1.100 No Calls.313384V22 Federal Farm Credit Bank 05/19/2016 08/19/2019 5,000,000.00$ 4,913,700.00$ 5,000,000.00$ 1.6% 38.6% 1.233 1.250 5/24/2016. Quarterly Callable. 3133EFBS5 Federal Farm Credit Bank 06/27/2016 06/27/2019 5,000,000.00$ 4,938,800.00$ 5,000,000.00$ 1.6% 40.2% 1.105 1.120 Bullet3134G8L49 Federal Farm Credit Bank 07/08/2016 07/05/2019 5,000,000.00$ 4,934,150.00$ 5,000,000.00$ 1.6% 41.8% 1.065 1.080 Bullet3130A5UB3 Federal Farm Credit Bank 08/10/2016 11/10/2020 5,000,000.00$ 4,860,050.00$ 5,000,000.00$ 1.6% 43.4% 1.381 1.400 Bullet812626R50 Federal Farm Credit Bank 08/24/2016 08/24/2020 5,000,000.00$ 4,905,850.00$ 5,000,000.00$ 1.6% 45.0% 1.302 1.320 Quarterly Callable. 10/27/2016.3137EAED7 Federal Farm Credit Bank 10/04/2016 04/12/2018 5,000,000.00$ 4,974,050.00$ 4,998,696.08$ 1.6% 46.5% 0.799 0.811 Bullet3130A6AE7 Federal Farm Credit Bank 11/04/2016 11/01/2018 5,000,000.00$ 4,952,150.00$ 5,000,000.00$ 1.6% 48.1% 0.957 0.970 Bullet3134G3S50 Federal Farm Credit Bank 11/16/2016 11/16/2018 5,000,000.00$ 4,968,450.00$ 5,000,000.00$ 1.6% 49.7% 0.967 0.980 Quarterly Call. 11/17/2015.259561QY7 Federal Home Loan Bank 03/04/2015 02/24/2017 5,000,000.00$ 5,000,550.00$ 4,999,925.35$ 1.6% 51.3% 0.700 0.710 5/21/2016 Quarterly Callable.3136G3LR4 Federal Home Loan Bank 12/31/2015 05/30/2017 5,000,000.00$ 4,997,850.00$ 4,993,353.43$ 1.6% 52.9% 0.936 0.949 Bullet3134G6R70 Federal Home Loan Bank 04/28/2016 04/28/2017 5,000,000.00$ 5,000,050.00$ 5,000,000.00$ 1.6% 54.5% 0.641 0.650 Bullet3130A5EP0 Federal Home Loan Bank 04/26/2016 04/26/2017 5,000,000.00$ 4,999,450.00$ 4,999,792.36$ 1.6% 56.1% 0.629 0.638 Quarterly Call. 11/13/2015.163123MM1 Federal Home Loan Bank 04/27/2016 04/27/2018 5,000,000.00$ 4,983,250.00$ 5,000,000.00$ 1.6% 57.7% 1.016 1.030 Quarterly Call. 12/28/2015.31359MEL3 Federal Home Loan Bank 07/13/2016 10/11/2019 5,000,000.00$ 4,935,600.00$ 5,000,000.00$ 1.6% 59.3% 1.141 1.157 5/25/2016 Quarterly Callable.929903DT6 Federal Home Loan Bank 09/09/2016 09/14/2018 5,000,000.00$ 4,997,100.00$ 5,019,193.24$ 1.6% 60.8% 0.885 0.897 Bullet3134G7V24 Federal Home Loan Bank 10/03/2016 10/03/2018 5,000,000.00$ 4,965,150.00$ 5,000,000.00$ 1.6% 62.4% 0.927 0.940 Quarterly Call 7/28/2016.3133EFJP3 Federal Home Loan Bank 11/22/2016 11/22/2019 5,000,000.00$ 4,971,000.00$ 4,997,506.67$ 1.6% 64.0% 1.341 1.360 Bullet3136G3TD7 Federal Home Loan Mortgage Co. 04/14/2015 01/27/2017 5,000,000.00$ 4,999,950.00$ 4,999,959.56$ 1.6% 65.6% 0.504 0.511 Bullet.3134G9X51 Federal Home Loan Mortgage Co. 09/28/2015 09/28/2017 5,000,000.00$ 4,999,100.00$ 5,000,000.00$ 1.6% 67.2% 0.789 0.800 5/25/2016 Quarterly Callable.3134G7C585 Federal Home Loan Mortgage Co. 10/27/2015 10/27/2017 5,000,000.00$ 4,992,500.00$ 5,000,000.00$ 1.6% 68.8% 0.718 0.728 Bullet495026RY4 Federal Home Loan Mortgage Co. 10/30/2015 10/27/2017 5,000,000.00$ 4,997,100.00$ 5,000,000.00$ 1.6% 70.4% 0.710 0.720 05/25/2016 Quarterly Callable.3133ECG99 Federal Home Loan Mortgage Co. 10/29/2015 10/27/2017 5,000,000.00$ 4,992,500.00$ 4,999,484.68$ 1.6% 72.0% 0.752 0.763 Bullet3134G8ML0 Federal Home Loan Mortgage Co. 11/24/2015 11/24/2017 5,000,000.00$ 4,984,700.00$ 5,000,000.00$ 1.6% 73.6% 0.888 0.900 Bullet3135G0XA6 Federal Home Loan Mortgage Co. 12/21/2015 05/26/2017 5,000,000.00$ 5,002,350.00$ 5,000,000.00$ 1.6% 75.1% 0.986 1.000 Bullet.3134G73X7 Federal Home Loan Mortgage Co. 12/22/2015 05/26/2017 5,000,000.00$ 5,002,350.00$ 5,000,000.00$ 1.6% 76.7% 0.987 1.000 No Call.369604BC6 Federal Home Loan Mortgage Co. 02/25/2016 08/25/2017 5,000,000.00$ 4,996,650.00$ 5,000,000.00$ 1.6% 78.3% 0.789 0.800 1x Call 11/25/2015.3133EFAN7 Federal Home Loan Mortgage Co. 02/26/2016 02/26/2018 5,000,000.00$ 4,998,900.00$ 5,000,000.00$ 1.6% 79.9% 1.036 1.050 Bullet3130A7UG8 Federal Home Loan Mortgage Co. 02/24/2016 11/24/2017 5,000,000.00$ 4,994,750.00$ 5,000,000.00$ 1.6% 81.5% 0.918 0.931 Bullet3134G7V24 Federal Home Loan Mortgage Co. 07/27/2016 07/27/2018 5,000,000.00$ 4,983,450.00$ 5,000,000.00$ 1.6% 83.1% 0.986 1.000 Bullet.735389QU5 Federal Home Loan Mortgage Co. 09/16/2016 10/12/2018 5,000,000.00$ 4,972,850.00$ 4,998,152.61$ 1.6% 84.7% 0.884 0.896 Coninuous Call.833240GJ7 Federal Home Loan Mortgage Co. 11/15/2016 11/15/2018 5,000,000.00$ 4,972,700.00$ 5,000,000.00$ 1.6% 86.3% 0.986 1.000 11/23/2016 Quarterly Callable.3134G82C2 Federal Nat'l Mtg. Assoc. 05/05/2016 05/21/2018 5,000,000.00$ 4,965,350.00$ 5,000,000.00$ 1.6% 87.8% 1.016 1.030 Bullet.962526EJ4 Federal Nat'l Mtg. Assoc. 06/28/2016 06/28/2019 5,000,000.00$ 4,946,400.00$ 5,000,000.00$ 1.6% 89.4% 1.184 1.200 Coninuous Call.3133EGHD0 Federal Nat'l Mtg. Assoc. 09/27/2016 09/27/2019 5,000,000.00$ 4,946,850.00$ 5,000,000.00$ 1.6% 91.0% 1.233 1.250 No Calls.3133EEBU3 Federal Nat'l Mtg. Assoc. 10/24/2016 07/27/2018 5,000,000.00$ 4,969,850.00$ 4,988,605.86$ 1.6% 92.6% 0.911 0.923 Non Callable.764258UL1 Federal Nat'l Mtg. Assoc. 11/15/2016 11/15/2019 5,000,000.00$ 4,921,800.00$ 4,993,022.22$ 1.6% 94.2% 1.163 1.179 Coninuous Call.31358C7L4 Federal Nat'l Mtg. Assoc. 11/14/2016 09/27/2019 5,000,000.00$ 4,954,100.00$ 4,995,750.80$ 1.6% 95.8% 1.199 1.215 6/8/16 Quarterly Callable.3130A3GK4 Federal Nat'l Mtg. Assoc. 11/17/2016 07/13/2018 5,000,000.00$ 4,977,750.00$ 4,998,232.14$ 1.6% 97.4% 0.987 1.001 Call 1x 01/28/2016.962526EK1 General Electric Capital Corp 07/22/2016 12/06/2017 500,000.00$ 517,970.00$ 520,642.51$ 0.2% 97.5% 0.770 0.780 12/28/2016 Quarterly Callable.3130A7VL6 Wachovia Corp 07/16/2015 06/15/2017 500,000.00$ 509,525.00$ 510,213.70$ 0.2% 97.7% 1.562 1.583 Bullet3130A4F72 Federal Nat'l Mtg. Assoc. 03/01/2016 06/01/2017 5,000,000.00$ 4,985,500.00$ 4,951,550.00$ 1.6% 99.3% 0.770 0.780 Non callable.3134G8L98 City of Richland, WA 08/04/2015 12/01/2017 995,000.00$ 1,011,934.90$ 1,013,998.79$ 0.3% 99.6% 0.878 0.890 Bullet3130A7TT2 Douglas County WA Public Utili 09/26/2016 09/01/2017 500,000.00$ 500,725.00$ 501,988.06$ 0.2% 99.8% 0.838 0.850 Bullet3130A3J70 Tacoma Metropolitan Park Distr 12/01/2016 12/01/2018 500,000.00$ 516,215.00$ 519,315.21$ 0.2% 99.9% 0.947 0.960 1x Call 03/28/2016.3133EEUS7 Whatcom County School District 07/23/2015 12/01/2017 250,000.00$ 251,882.50$ 252,372.85$ 0.1% 100.0% 0.937 0.950 Non Callable.

1.03 Years 314,764,583.30$


City of VancouverOutstanding Debt - General Obligation BondsFourth 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 4,605,000 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 3,525,000 4.07% 12/1/2026

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

14,570,000 605,000 4.51% 12/1/2027

Jun-09 To fund multiple Transportation Projects

12,970,000 1,220,000 4.03% 12/1/2028

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

13,410,000 8,920,000 4.50% 12/1/2035

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

10,515,000 9,015,000 3.93% 12/1/2035

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

15,945,000 13,980,000 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 9,330,000 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, 2006, and the 2008 LTGO bonds issued for the East Police Precinct, West Police Precinct, Evidence Building, Fire Station 810, Transportation Projects, and the Marshall CC remodel.

23,100,000 22,605,000 2.72% 12/1/2034

Jun-16To Partially refund 2009 LTGO issued for Transportation Projects. 7,810,000$ 7,775,000$ 1.89% 12/1/2028

Total Outstanding General Obligation Bonds 82,876,500$


City of VancouverOutstanding Debt - Revenue BondsFourth 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 11,980,000 3.998% 6/1/2020

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

42,520,000 9,320,000 4.037% 6/1/2018

21,300,000$


Quarterly Financial Report Q4 2016 - Vancouver, Washington · Expenditures in the General Fund by...

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Transcript of Quarterly Financial Report Q4 2016 - Vancouver, Washington · Expenditures in the General Fund by...