Quarterly Financial Report - Fourth Quarter, 2015

"A colorful past, a bright future"

Quarterly Financial Report

Fourth Quarter 2015

City of Vancouver Fourth Quarter 2015 Financial Report 1

Fourth Quarter 2015 Financial Report (This report contains un-audited financial information as of March 14, 2016)

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 32 C Outstanding Debt 34 D Investment Portfolio Tables 36

- - - - - 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 grew in 2015. The annualized growth rate of the U.S. Gross Domestic Product during the last quarter of the year was 1%, significantly slower than it was during the other earlier quarters of the year. Overall, the U.S. economy grew by 1.9% during 2015. Most recent data indicates continued strong personal consumption expenditures, residential fixed investment and government spending. The national unemployment rate continued to decline through the year, reaching 5.0% by year end, significantly below the 6.7% rate experienced at the end of 2013 and 5.6% rate at the end of 2014.

City of Vancouver General Fund revenues in 2015 totaled $138.5 million, or 102% of the forecast for the year. The 2015 collections exceeded those in 2014 by $1.8 million. Tax revenues received in 2015 exceed those received in 2014 mostly due to stronger sales, property and utility tax collections, offset by lower than forecasted revenues in taxes on privately owned utilities, including electrical, natural gas and telephone taxes. Overall, the actual revenues in 2015 exceeded the revenue forecast for the year by $3 million. Expenditures in the General Fund totaled $139.6 million, or 96% of the budget for the year. The 2015 expenditures exceeded those in 2014 by $5.3 million. The ending 2015 General Fund budget, with supplemental appropriations, anticipated utilizing approximately $5.7 million of the General Fund reserve to cover the expenditures in the fund. With revenues coming in higher than forecasted, and expenditures remaining below budget, the impact on the fund balance was a reduction of $0.9 million. The balances referenced above do not include the impact of the carry-forwards. Those are estimated at $1.5 million for the General fund and represent budgeted 2015 items that were delayed until 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% 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.

The General Fund operating cash balance was $40.95 million at the end of December 2015. II. Economic Report Many economic indicators continue to show signs of economic improvement. The unemployment rate continues to decline, the housing sector is showing a consistent level of activity and higher prices than in the prior four years, but the annual rate of increase has cooled, and consumer confidence continues to be very strong. The following is specific information related to some of the major national economic indicators, beginning with Gross Domestic Product. The annual rate of growth of Gross Domestic Product in the last quarter of 2015 was finalized at 1%, according to a preliminary estimate released by the Bureau of Economic Analysis, up from a revised to 0.6% growth rate during the first quarter of 2015.1 The increase in GDP in the last quarter was accounted for by personal consumer spending, government spending and residential fixed investment. A strong dollar continued to hurt U.S. business abroad. Overall, accounting for the slowdown in the rate of economic expansion during the fourth quarter, the U.S. economy grew by 1.9% during 2015.

1http://www.bea.gov/newsreleases/national/gdp/gdphighlights.pdf, Bureau of Economic Analysis.


The national seasonally adjusted unemployment rate has been trending down since February of 2013, reaching 5.0% in December of 2015. Nationally, employment gains occurred in several industries, led by professional and business services, construction, health care and food services. The numbers of unemployed workers have declined slightly since the end of 2014, reaching an estimated $7.9 million nation-wide2.

Data Source: www.bls.gov

• The February 2016 Monetary Policy report from the Federal Open Market Committee confirmed that the labor market conditions continued to improve, but the labor force

2 http://www.bls.gov/news.release/archives/empsit_01082016.pdf

A


participation rate remained somewhat below most assessments of its trend and noted that an unusually large number of people continue to work part time. The Committee confirmed that inflation remains below the FOMC’s goal of 2%, largely due to being held down by the drop in energy prices and declines in the prices of non-oil imported goods. The Committee has assessed the domestic financial conditions as becoming “somewhat less supportive of economic growth since mid-2015 due to concerns about the global economic outlook and developments in oil markets. The Committee’s assessment of the economic conditions was that these would continue to evolve in a manner that will warrant only gradual increases in the federal funds rate.3

• One of the major measures of consumer confidence is the Conference Board’s compiled Index of Consumer Confidence. The Index is based on consumer perceptions of current business and employment conditions, as well as consumer expectations for the following six months. The level of consumer confidence is associated with consumer anticipation of future developments in the economy, and is utilized as an indicator of the likely general direction of consumer spending in the coming months. The December 2015 reading indicates that during the last quarter of 2015, the index of consumer confidence slightly declined to a reading of 96.5. “Consumer confidence improved in December, following a moderate decrease in November,” said Lynn Franco, Director of Economic Indicators at The Conference Board. “As 2015 draws to a close, consumers’ assessment of the current state of the economy remains positive, particularly their assessment of the job market. Looking ahead to 2016, consumers are expecting little change in both business conditions and the labor market. Expectations regarding their financial outlook are mixed, but the optimists continue to outweigh the pessimists.”

• The second measure of consumer attitude, the University of Michigan Consumer Sentiment paints a very similar picture. The December 2015 reading is below that from January of 2015, mostly due to consumer skepticism about the future -- -half of the respondents anticipated gas prices to increase and only a third expected their income to improve over the next year. Both indices clearly indicate that consumer attitudes have deteriorated since the beginning of last year.

3 FOMC Monetary Policy, February 10, 2016 https://www.federalreserve.gov/monetarypolicy/files/20160210_mprfullreport.pdfhttp://www.federalreserve.gov/newsevents/press/monetary/20150917a.htm


• 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. As of the end of the year, the index reached the level of 123.7 (2010=100).

“The U.S. LEI fell slightly in December, led by a drop in housing permits and weak new orders in manufacturing,” said Ataman Ozyildirim, Director of Business Cycles and Growth Research at The Conference Board. “However, the index continues to suggest moderate growth in the near-term despite the economy losing some momentum at the end of 2015. While the LEI’s growth rate has been on the decline, it’s too early to interpret this as a substantial rise in the risk of recession.”4 The graphic representation of the Conference Board Leading Economic Index for the U.S. since 1999 is shown in the following graph.

• At the national level, housing permits and starts fell in December, but followed large gains in November. Year-on-year starts were up 6.4% with permits for the year at 14.4%. Starts for single-family homes were up 6.1% in 2015 and those for multi-family were up by 7%.5 Housing starts measure construction of residential units per month. The graph below shows national data.

4 The Conference Board, January 22, 2016 release, https://www.conference-board.org/data/bciarchive.cfm?cid=1&pid=6666 5 http://www.nasdaq.com/markets/us-economic-calendar.aspx


• 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 0.1% in June, as reported by the U.S. Department of Labor. Inflation has been fluctuating between 1.5% and 2% annual estimated rates over the last 18 months. The graph below shows annualized inflation rate changes in both CPI and Core CPI (less food and energy). In the second quarter of 2015 increases in energy prices, food, airfares and tobacco were offset by a decline in hospital services costs and apparel. Core CPI has remained in the “just below a 2% annual rate” zone.

State Economy • The Washington Economic and Revenue Forecast Council’s February 2016 Economic

and Revenue Forecast stated that the Washington economy “…is expanding at a solid pace. In recent months Washington employment has grown faster than expected in the


November forecast but historical estimates were revised slightly lower. Annual Washington exports declined for the first time since 2009. Home prices and housing construction activity are improving but construction employment growth has slowed in the last year.”6 Overall, the forecast for Washington State is weaker than was expected in November mainly as a result of the weaker national forecast.

• State revenue collections have been slightly higher than expected; the outlook for the rest of the biennium and the next biennium has dimmed. The February economic forecast was weaker in three areas that affect revenue growth: personal income, housing permits and inflation. The reduction is smaller for the current biennium and slightly larger for the next.7

Local Economy

• The number of residential permits is the local data equivalent for housing starts. In 2012 through 2013, the City saw a significant increase in the number of residential units permitted and their respective valuation. The 2014 data on single family residential houses permitted shows that only 189 were permitted during the year with a total valuation of $21.0 million. In 2015, the pace of permitting has picked up. A total of 366 residential permits were issued with a total valuation of $38.3 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, a total of 609 units were permitted, with a total valuation of $26.9 million. In 2015, a total of 705 new units were permitted with a valuation of $57.9 million.

• The activity level in the commercial sector during 2015 has been strong. A total of 46 commercial projects were permitted with a total valuation of $135.1 million.

6 Washington State Economic and Revenue Forecast, February 2016, Volume XXXIX, No. 1, pp. 25-26 7 Washington September Economic & Revenue Update, February 2016, Volume XXXIX, No. 1, pp. 25-26


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 2015 was 1.1%.8 Energy prices fell 14 percent, largely the result of a decrease in the price of gasoline. The index for all items less food and energy increased 2.6 percent over the year.

• According to the Bureau of Labor Statistics, the city estimated unemployment rate at the end of August was at 6.1%, slightly higher than that at the county and Portland metro at 6.0% and 4.7%, respectively. The local unemployment rate has generally been on a declining trend since early 2010.

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, prices have been consistently higher than those in the prior year by approximately 11.4%, indicating that locally the market has been on an upward swing. The chart for the Portland Metro area is displayed on the following page.

• Housing prices in Vancouver have been increasing since December of 2011. The median sale price in Vancouver is estimated at $240,025, 4% from the prior year, according to Zillow. The graph below represents changes in the median home price over time in Vancouver. Housing prices in the local area have likely reached their peak and are anticipated to start showing signs of slowdown in the coming months.

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


S&P Case/Shiller Index, Portland Metro Area

Data source: S&P, www2.standardandpoors.com

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

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

Source of Data: Zillow

• Zillow estimates that only 11.6% of all houses in Vancouver have negative equity, compared

to 15.4% on the national basis. Approximately 4.6% of all house owners are delinquent of their


mortgages, up from a 4.2% reading at the end of the last quarter, compared to 6.0% nation-wide.

Homes Foreclosed (Per 10,000)

Source of Data: Zillow

III. Financial Results General Fund REVENUES

General Fund revenue totaled $138.5 million, or 102% of the forecast, within historical averages and approximately $1.8 million higher than was collected through 2014. Tax revenues came in strong, mostly due to stronger sales and property tax collections, partially offset by lower than forecasted revenues in taxes on privately owned utilities. Following is detailed information on the main revenue sources of the General Fund. Cumulatively, the seven chief sources of revenue listed on the chart below represent more than 87% of the total forecasted revenues in the City’s General Fund.


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

Property Tax

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

year. The amount of revenue is based on 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 1.0% property tax levy increase for 2015 taxes. The total City of Vancouver levy rate in 2015 is $2.7996 per $1,000 of assessed value, which is applied to a total taxable value of approximately $15.8 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 for 2014 increased by 8.3%, and another 10.4% for 2015. With the recent increases in assessed valuation, the City has reached the 2008 level, but remains 6.4% below the highest assessed valuation level experienced in 2009.

• A total of $44.3 million was collected in 2015 in property taxes, which is above

comparable 2014 collections by approximately $900 thousand, largely due to a higher 2015 levy and new construction.


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 $34.5 million in sales tax revenue was received in 2015, approximately $4.5

million more than revenue received during 2014. In 2013, the City’s collections finally caught up with those in the pre-recession time, year 2007, without adjustment for inflation for the past six-year period. The fastest growing categories of retail sales are auto sales, construction-related and general merchandise. Sales tax collections in 2015 exceeded forecast by almost $4 million, most of it due to non-sustainable sale trends in the auto industry.

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

estate market, new construction and auto sales.


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

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

• Utility tax on privately owned utilities generated $16.9 million during the year,

approximately $0.9 million below collections during the comparable period of time in 2014, mostly due to lower collections in the natural gas and electrical taxes.

• Natural gas tax revenues during 2015 totaled $2.7 million, as forecasted. During the similar

time period of 2014, $3.1 million in natural gas revenue was collected.

• Telephone tax revenues in 2015 totaled $4.3 million, approximately $350 thousand below the 2014 collections. The telephone tax revenue has been on a declining trend over the last several years. In 2014, the top five phone companies contributed to the reduction – New Cingular, Qwest, Verizon, Cricket, and T-Mobile.

• A total of $8 million was collected in electrical tax revenue during 2015, below the

comparable 2014 collections by approximately $200 thousand. The reduction in tax collections was due to a very mild winter experienced by the Pacific Northwest last year. The forecast for 2015 had anticipated a slight decline in this revenue compared to 2014, but the actuals came in slightly below the anticipated level.


• The revenue from cable franchise fees totaled $2 million in 2015, approximately $100 thousand higher than the comparable collections in 2014. The trend in this revenue has been declining over the past years, resulting in a forecast reduction for the year by approximately $90 thousand compared to 2014.

Water, Sewer, Storm Water and Solid Waste Taxes

• The City Utility tax on Water, Sewer and Storm Water utility during 2015 was set at 20%. • Prior to 2010, the City charged a solid waste franchise fee for garbage collection services

to fund operations of the Solid Waste fund with a portion of the fees, equivalent to approximately a 12% tax rate, deposited into the General Fund for general use. In 2010, the franchise fee portion, (related to the general use), was converted to a utility tax of 20%.

• Utility revenue on city-owned utilities has been slowly increasing due to increases in 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.

• A total of $20.2 million was collected in taxes of City-owned utilities during 2015, approximately $800 thousand higher than was collected during the comparable period of 2014. The forecast anticipated approximately a $500 thousand revenue increase and the actuals came exactly as forecasted.


• In 2014, residential water revenues generated 80% of the total water user revenues, while residential sewer fee revenues made up 66% of the total sewer user revenues. A similar breakdown is anticipated in 2015.

Grant & Entitlement Revenues • The City anticipated receiving $2.2 million in grants in 2015. The largest grants include a

grant in Vancouver Police Department (VPD) for replacement of the records management system, and the remainder of the COPS grant, funding 10 positions in VPD. There are large grants in the Community and Economic Development departments that have been underspent by the end of 2014 but the supporting appropriation was carried forward into the 2015-2016 biennium. Grants are frequently reimbursing the City for the expenditures incurred, so most of the revenue comes in the second through last quarters of the year.

• Through the end of the year, the City received $1.3 million in grant reimbursements, approximately 61% of the forecast for the year.

Charges for Goods and Services The largest program areas that generate fee revenue are the Development Review Services and Recreation programs. The forecast for the year anticipated $5.0 million to be received in these two categories. Recreation program fees came in approximately $400 below forecast but at the 2014 levels, and the land use fees came in approximately $350 thousand higher than anticipated, offsetting lower than anticipated collections in recreation fees.


Land Use and Other Planning Permits

• During 2008, 2009 and 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. Year 2014 saw a significant $200 thousand annual increase in land use fees. The trend continued into 2015.

• The 2015 planning permit fee collections reached $782 thousand, approximately $50 thousand higher than revenues received during 2014. The forecast anticipated a normalization of permitting activity to the 2013 levels, but the activity only strengthened.

Recreation Program Fees A total of $4.1 million in recreation fees was collected during 2015, comparable to

last year’s collections. It appears that the activity in 2015 continues at the same level experienced over the last three years.

The forecast for the year anticipated an increase in recreation revenue of $450 thousand in 2015 over 2014. The recreation revenues fell short of forecast.

EXPENDITURES

• General Fund expenditures in 2015 were $139.6 million, or 96% of the budget. One of the main changes in the 2015-2016 budget in the General Fund was the creation of a separate fund for internal services departments – Finance, Human Resources, Information Technology and General Services. These departments are recovering the cost of providing services in their areas from all funds and departments of the City.

• By the year, General Fund departments spent 94% of their budgets for the year.

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


• Salaries and benefits expenditures totaled $42.9 million in 2015, or 98% of the budget for

the year.

• General Fund expenditures in the supplies and services category were 10.3 million, or 76% 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 $75.2 million in 2015, 99% of the budget for the year.

• Internal expenditures were $3.8 million greater than those in 2014. Beginning in 2015, the cost of the internal services departments, (such as IT, HR, Finance and General Services), is proportionately reflected in the respective budgets of the direct service departments. Expenditures for internal services were at 93.2% of the budget for the year.

Cash Balance

• The General Fund operating cash balance was $40.955 million at the end of the fourth quarter 2015. This is $923 thousand lower than the cash balance at the end of December 2014. The balance includes set asides for the carried-forward appropriation items.

• The General Fund emergency reserve was $10.7 million at the end of December 2015, compared to $10.5 million in December 2014. Council updated the financial policy


related to the emergency reserve balance in 2012. In previous years, the balance was based on 7.0% of the prior year’s General Fund revenues. The new 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 is estimated at $60.5 million. A portion of the fund balance estimated at $0.2 million represents the long term notes receivable and capital assets held for resale. The remaining balance is composed of the Restricted, Committed, Assigned and Unassigned balances. The Restricted balance of $0.2 million represents the grant revenue received in advance of expenditures in VPD. The Committed balance of $43.5 million represents reserves in accordance with the City Financial Policies: the City Emergency reserve of $10.7 million, Revenue Stabilization reserve of $3.4 million, reserve restricted for capital purposes of $0.9 million and the working capital of $28.5 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 $4.3 million represents funding of 50% of accrued compensated absences. The remaining portion of the balance of $12.3 million is anticipated to be unassigned at the end of 2015. All the numbers above are estimates, the official audited numbers will be available in late Spring of 2016.

Street Fund • Expenditures in the Street Fund through September were $20 million, or 96% of the budget,

$3.1 million higher than comparable expenditures in 2014. • The revenues (excluding a budgeted general fund transfer) totaled $7.9 million, $1.4 million

higher than comparable collections in 2014. 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. General Fund transferred $10 million dollars to support operations of the fund in 2014 and transferred $11.8 million to support the fund in 2015.

• Motor Vehicle Fuel Tax (MVFT) revenues were $3.5 million in 2015, approximately $100 thousand higher than the 2014 collections. This revenue source is a set tax per gallon that does

not depend on the price of gasoline.


Real Estate Excise Tax (REET)

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

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

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

• REET revenue received in 2015 totaled $3.2 million, approximately $0.8 million higher than

the comparable 2014 collections and almost at the 2007 level. The graph below demonstrates fluctuations in REET collections over the past eleven years.


Consolidated Fire Fund

• The City has an Operating Fire Fund, and a Capital Fire Fund which largely funds vehicle

replacements and set up. The Operating Fire Fund fully supports the Capital Fire Fund. The graph below represents the operating funds’ financial information.

• Operating Fire Fund revenues in 2015, (exclusive of General Fund support, the Fire District 5 transfer and the transfer between Fire Operating and Capital), were $1.2 million, mostly representing permit and inspection fees. Permit and inspection fees exceeded last year collections by approximately $200 thousand. A pilot project is under way in the Fire Marshall’s office. Two new inspector positions were created in the 2015-2016 budget with an expectation of generating sufficient revenues to cover the costs associated with these positions. So far, the two inspectors generated more than sufficient revenue to cover the costs. Total Fire Operating Fund revenue, including the General Fund transfer, totaled $35.2 million.


• Total Fire Operating expenditures in 2015 were $35.5 million, approximately $2.7 million higher than those in 2014, at 98% of the budget. Overtime expenditures are running high due to a large number of vacant fire fighter positions.

Building Inspection Fund

• Building inspection fee revenues received in 2015 totaled $3.9 million, almost $800 thousand higher than permit revenue generated during 2014.

• Building Fund expenditures during 2015 were at $3.5 million, approximately $500

thousand higher than in 2014.

• 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 during 2015 were $2 million, approximately $200 thousand above the comparable collections in 2014.

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

• Operating expenses during 2015 totaled $3 million, approximately $90 thousand greater

than those in 2014.

Utility Operations Operating transfers between the Water, Sewer and Storm Water funds are included in the accompanying report, Attachment A, per budget requirements. These transfers are generally eliminated when financial statements are prepared. Financial statements for utility funds are prepared on a quarterly basis. Please call (360) 487-8444 to receive a copy of the detailed financial statements for the utility funds. Water

• Water sales revenues were $29.5 million in 2015, 106% of the forecast. Collections were almost $3 million above the comparable 2014 collections, largely due to a combination of the impact of fee increases effective in 2015 as well as an elevated water usage caused by


hotter than average summer weather this year. There was a 5.0% increase in rates effective in 2014 and an additional 5.0% increase in 2015.

• Expenditures in the Water fund in 2015 totaled $40.8 million, or 97% of the budget.

Sewer

• Sewer charge revenues in the Sewer Fund were $39.4 million in 2015, approximately $0.9 million above the 2014 comparable revenues. Sewer rates were increased by 9% in 2011, 6.5% in 2012, 2.5% in 2013 and 2014 and 2% in 2015.

• The Sewer fund has been borrowing from the Water fund to support operations. This support

has been decreasing in the last several years due to increases in rates and revenues; however, the fund had to borrow $4.0 million in 2015 to fund capital projects.

• Sewer expenditures in 2015 totaled $50.7 million, $5 mil above the 2014 expenditures.

Storm Water

• A total of $13.7 million in storm water fee revenue was received in 2015, approximately $1.5 million higher than the 2014 revenues, mostly due to higher private capital contributions. The Storm Water rates were increased by 5% in 2013, 2014 and 2015.

• Overall, the expenditures in the Storm Water fund in 2015 were $12.8 million, or 97% of the budget, higher than those in 2014 by approximately $1.5 million.


IV. Outstanding Debt

• At the end of the fourth quarter of 2015, the City had about $91.7 million of general obligation (G.O.) debt outstanding and approximately $31.0 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 3.46% while the average interest rate for the City’s revenue bond debt is 3.97%.

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 October suggests

that economic activity is expanding at a moderate pace. Household spending and business fixed investment have been increasing at solid rates in recent months, and the housing sector has improved further; however, net exports have been soft. The labor market continued to improve, with ongoing job gains and declining unemployment. On balance, labor market indicators show that underutilization of labor resources has diminished since early this year. Inflation has continued to run below the Committee's two percent longer-run objective, partly reflecting declines in energy prices and in prices of non-energy imports. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations have edged down.

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

• The overall yield curve increased during the fourth quarter of 2015. The yield on the three-month Treasury has increased ending at 0.265% at the end of the fourth quarter. The six-month Treasury yield has increased to 0.561%. The yield on the two-year Treasury has increased to 1.06%. The thirty-year Treasury yield increased, ending the fourth quarter at 3.01% from 2.87%. Market risk of the City’s portfolio is low. Investment purchase maturities have been kept at less than one year and are due to the Federal Reserve’s statement of continued low overnight rates into late-2015 early 2016. 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 2015 was $294.0 million compared to $270.0 million on December 31, 2014. The portfolio had an average yield of 0.45% year to date, which is 10 basis points lower than the projected yield of 0.55% for 2015. 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 24 bps higher than the State Investment Pool, which had an average yield of 0.25%. The State Pool has a weighted average maturity of 35 days. The City’s investment portfolio weighted average maturity is approximately 8 months. Longer-term portfolio yields will outperform shorter-term portfolio yields in a falling interest rate environment. Interest revenue distributed through the fourth quarter of 2015 to all funds is approximately $1,289,796 compared to $1,052,300 during the same period of 2014. 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 2015, no funds were on interfund loans.


2013 2014 2015 2015 % Actuals Actuals Budget Actuals of Budget

GENERAL FUNDCity Council 432,073 502,486 20% 600,505 485,079 80.8%City Manager's Office 2,374,176 2,520,791 24% 2,726,119 2,435,737 89.3%Legal Services 3,495,360 3,996,081 22% 4,775,365 4,155,107 87.0%Community Economic Development 4,427,824 4,524,665 22% 6,328,299 5,420,664 85.7%Parks Administration 1,166,420 749,735 26% 952,343 801,613 84.2%Parks, Trails, & Natural Resources 1,272,931 2,910,587 3% 1,381,991 1,114,106 80.6%Recreation Services 5,544,458 5,716,035 23% 6,963,034 6,701,260 96.2%Police 33,717,499 35,136,837 24% 39,734,868 38,390,205 96.6%Transportation 647,732 633,729 23% 75,000 28,461 Grounds Maintenance 2,887,179 2,827,743 21% 3,339,452 3,240,140 97.0%Facilities Maintenance 3,121,541 3,307,052 18% 3,671,652 3,556,789 96.9%Financial and Mgmt Services 3,663,304 4,192,714 21% - - General Services 300,284 411,089 24% - - Information Technology 2,507,612 3,518,528 18% - - Human Resources 1,288,501 1,198,944 25% - -

Subtotal Non-Gen. Governmental 66,846,893 72,147,015 22% 70,548,629 66,329,163 94.0%General Governmental

Child Justice Center Support 304,632 333,864 25% 345,537 336,720 97.4%City Cable Programming 441,567 460,596 25% 439,290 460,596 104.9%Fire District #6 15,235 17,437 0% 17,640 18,157 102.9%Emergency Mgmt (CRESA) 139,646 140,758 50% 144,464 143,244 99.2%Air Pollution Control Authority 53,109 53,356 100% 56,166 53,885 95.9%Humane Society 232,423 226,386 6% 278,908 255,631 91.7%Animal Control 198,806 243,743 23% 256,243 281,137 109.7%Alcoholism Support 33,959 35,544 0% 29,577 38,449 130.0%Regional Transp Council 21,300 - n/a 21,300 21,300 100.0%Election Support 340,053 182,675 0% 350,000 303,549 86.7%AWC, Chamber of Commerce Membership 81,336 82,237 87% 85,733 84,239 98.3%Opportunity Reserve 115,634 137,244 9% 188,941 133,248 70.5%Miscellaneous 429,902 5,096,702 1% 3,947,842 3,661,882 92.8%Public Defender 670,126 714,676 32% 1,222,630 1,216,412 99.5%County Jail Costs 3,967,375 3,934,134 0% 3,584,188 3,567,397 99.5%County Corrections Costs 1,072,182 1,299,551 10% 1,141,900 1,255,606 110.0%County District Court Costs 1,015,460 903,924 2% 1,240,632 935,985 75.4%General Obligation Debt Payment 7,001,668 6,892,169 0% 6,995,887 6,881,850 98.4%General Govt Support 44,797,908 40,964,483 36% 53,950,409 53,577,055 99.3%

Subtotal General Govermental 60,932,321 61,719,478 25% 74,297,287 73,226,341 98.6%Total General Fund 127,779,214 133,866,493 24% 144,845,916 139,555,504 96.3%

SPECIAL REVENUE FUNDSStreet 14,537,885 16,836,378 12% 20,786,549 19,951,888 96.0%Fire Operating Fund 32,603,178 32,818,755 23% 35,616,636 35,521,217 99.7%Fire Capital Fund 2,293,960 908,202 16% 2,409,059 859,647 35.7%AMR Compliance Fund (New) - 753,867 416,594 55.3%Drug Enforcement and Investigative Funds 89,407 81,459 29% 365,397 187,098 51.2%Community Development Block Grant 2,479,292 1,713,037 25% 4,934,823 3,889,611 78.8%Tourism 786,937 872,934 19% 2,711,210 1,064,322 39.3%Criminal Justice/LLEBG 126,939 126,730 0% 226,816 127,246 56.1%Real Estate Excise Tax - I 1,977,908 1,965,718 0% 3,406,694 3,341,023 98.1%Transportation Special Revenue 2,050,590 2,116,927 1% 2,228,680 2,094,516 94.0%Parks & Recreation Special Revenue 53,291 45,088 2% 40,407 40,407 100.0%Parks Construction - Residual REET 28,613 34,308 0% 89,877 54,116 60.2%Downtown Initiatives 87,480 93,102 32% 401,676 397,616 99.0%VNHR Properties 206,367 100,453 11% 249,894 158,884 63.6%Senior Messenger 261,649 254,888 26% 320,853 244,420 76.2%TIF Funds 1,748,600 1,968,172 1% 4,593,722 1,476,234 32.1%

% of Final


EXPENDITURES Attachment A

2013 2014 2015 2015 % Actuals Actuals Budget Actuals of Budget % of Final

PIF Funds 12,139,486 1,162,750 3% 2,092,034 881,954 42.2%

DEBT SERVICE FUNDSG O Debt Service Fund 11,840,874 11,850,517 0% 40,243,555 36,376,833 90.4%L I D Debt Fund 3,630 458,167 n/a 153,082 153,082 100.0%

CAPITAL FUNDS2011 Bond Capital Fund - Waterfront 4,309,388 228,785 50% 445,074 134,284 30.2%Transportation Capital Fund 18,304,852 6,745,219 14% 28,313,732 11,746,438 41.5%Fire Acquisition Fund - - n/a 4,396,594 2,325,869 52.9%Capital Improvement Fund 566,207 700,357 16% 7,070,000 4,048,825 57.3%VNHR Property Capital 665 997 0% 8,004,854 547,900 6.8%2015 Bond Capital Fund - VNHR (New) - - 5,156,529 448,403 8.7%Parks Construction Fund (Capital Projects on 1,762,587 3,197,673 0% 13,423,313 2,580,737 19.2%City Tree Reserve Fund 11,687 6,318 1% 28,480 14,900 52.3%Drainage Construction Fund 468,802 988,111 10% 959,507 568,769 59.3%Systems Development Reserves 4,000,000 1,100,000 0% 2,500,000 2,500,000 100.0%Water Construction Fund 5,852,968 7,802,090 12% 21,174,031 10,586,911 50.0%Utility Customer Assistance 23,094 15,709 23% 35,000 23,013 65.8%Water Revenue Bond Debt Service Fund 122,692 85,123 0% 643,574 58,454 9.1%Sewer Revenue Bond Debt Service Fund 2,645,841 2,208,819 0% 10,774,586 1,769,485 16.4%Sewer System Development 3,499,999 1,200,000 0% 2,500,000 2,500,000 100.0%Sewer Construction Fund 849,118 856,241 2% 7,151,214 759,811 10.6%

ENTERPRISE FUNDSStorm Water 10,786,175 11,287,864 19% 13,189,682 12,789,060 97.0%Water 33,592,014 29,544,969 21% 42,376,996 40,759,664 96.2%Sewer 39,723,888 45,556,229 24% 46,174,485 50,670,434 109.7%Building Inspection 3,973,900 4,189,595 23% 5,249,309 5,109,266 97.3%Solid Waste 2,351,891 2,352,590 12% 3,046,890 2,434,568 79.9%Parking 3,348,340 2,902,377 13% 3,519,164 2,993,065 85.1%Tennis Center 1,014,048 1,076,443 25% 1,280,562 1,127,246 88.0%Airpark 775,500 631,450 12% 1,102,924 645,384 58.5%

INTERNAL SERVICE FUNDSFacilities Asset Mgmt & Replacement Reserv - - 0% 3,960,236 1,939,670 49.0%Equipment Services Operations Fund 4,977,631 5,010,721 23% 5,772,933 4,675,821 81.0%Equipment ER&R Capital 1,030,062 1,501,203 43% 2,158,234 1,661,764 77.0%Technology ER&R 3,428,347 2,939,024 32% 1,297,349 927,527 71.5%Risk Fund 5,659,313 5,418,316 18% 4,537,274 4,638,489 102.2%Internal Administrative Services Fund (New) - - Finance - - 5,334,886 4,814,941 90.3% Information Technology - - 6,445,860 5,119,735 79.4% Human Resources - - 1,874,442 1,708,443 91.1% General Services - - 334,598 198,329 59.3%Benefits Fund 14,218,373 14,584,536 25% 12,831,025 11,168,963 87.0%Self Insured Health Insurance (New) - - 6,772,631 5,162,871 76.2%Print Shop & Mail Services 171,814 172,753 23% 238,034 195,891 82.3%

AGENCY FUNDSSWAT Team 167,072 172,819 12% 182,845 181,626 99.3%Police Pension 787,310 923,385 31% 989,413 745,942 75.4%Fire Pension 1,554,499 1,430,425 26% 1,799,238 1,412,026 78.5%Cable TV 860,114 1,086,578 23% 1,266,617 1,316,627 103.9%

Notes1. This report contains the unaudited results through the end of March 2016.

3. Operating transfers between funds are included within this report.4. Capital project and Water/Sewer Debt Funds are excluded; Proprietary funds only include operating revenues.5. The Water, Sewer and Storm Water funds are adopted as one legal fund but are shown separately for informational purposes.

2. This report was prepared using the methodology prescribed under the basis of budgeting, depreciation, appreciation costs have been excluded


EXPENDITURES Attachment A

ADJ-13 ADJ-14 ADJ-15 ADJ-152013 2014 2015 2015 % of

Actuals Actual Budget Actual BudgetGENERAL FUND Tax Revenue

Property Tax 41,935,772 43,327,557 43,862,543 44,251,063 101%Sales Tax 27,577,775 30,500,677 30,489,436 34,517,195 113%Electrical Tax 7,828,191 8,106,823 8,063,037 7,952,775 99%Natural Gas 2,685,425 3,384,782 2,656,426 2,668,786 100%Telephone 4,910,455 4,551,567 4,572,738 4,318,611 94%Cable Franchise Fee 1,843,998 1,892,519 1,807,303 1,960,685 108%Water/Sewer/Storm Water 14,546,537 15,316,069 16,323,213 16,302,977 100%Solid Waste Utility Tax 3,716,225 3,760,104 3,862,095 3,863,970 100%Gambling and Leasehold Taxes 693,743 630,085 612,403 644,042 105%

Subtotal Tax Revenue 105,738,120 111,470,185 112,249,194 116,480,102 104%Business Licenses 878,768 851,489 912,464 1,095,295 120%Grants & Entitlements 1,521,613 1,526,260 2,183,911 1,328,212 61%State Shared Revenues 2,809,224 2,883,948 2,961,392 3,569,646 121%Parks Contract with Clark County 783,202 59,845 - 67,396 Charges for Services

Planning Permits 454,235 831,119 428,593 782,485 183%Recreation Program Fees 4,312,844 4,112,593 4,580,851 4,136,526 90%Interfund Service Charges 8,629,172 7,553,700 3,167,624 3,371,937 106%Other Charges & Services 810,295 801,809 718,476 819,322 114%

Subtotal Charges for Services 14,206,546 13,299,222 8,895,544 9,110,270 102%District Court 1,504,876 1,841,392 1,659,372 1,618,593 98%Miscellaneous 832,541 868,402 2,033,256 977,640 48%Lease Revenue (short and long-term) 3,063,080 3,249,652 3,573,475 3,574,825 100%Operating Transfers 332,722 550,353 967,285 625,064 65%

Total General Fund 131,670,692 136,600,747 135,435,892 138,447,043 102%

SPECIAL REVENUE FUNDSStreet Fund

Real Estate Excise Tax 2,277,238 2,403,493 2,203,355 3,246,532 147%Motor Vehicle Fuel Tax 3,396,802 3,410,953 3,490,789 3,506,747 100%Permits and Misc. 588,125 745,722 1,259,410 1,413,478 112%Operating Transfers 9,914,887 9,987,907 11,838,428 11,831,555 100%

Total Street Fund 16,177,053 16,548,074 18,791,982 19,998,313 106%Operating Fire Fund -

Service Charges-Fire Dist. #5 7,585,090 7,784,190 8,322,836 8,091,492 97%Grant Revenue 2,583,299 1,450,493 57,939 62,011 0%Permit/Other Fees and Misc 910,321 960,782 945,544 1,164,508 123%Operating Transfers 22,581,482 23,113,786 26,060,330 25,892,554 99%

Total Operating Fire Fund 33,660,191 33,309,251 35,386,649 35,210,565 100% Fire Equipment Fund 2,437,882 2,772,948 1,117,777 1,445,335 129%

AMR Compliance Fund (New) - 14 688,327 737,639 107%

Other Special Revenue FundsDrug Enforcement 277,182 239,969 398,629 348,898 88%Community Development Block Grant 2,482,463 1,570,030 3,912,321 3,847,197 98%Tourism 1,568,909 1,743,967 1,484,336 2,129,442 143%Criminal Justice/LLEBG 220,379 234,598 295,578 238,686 81%Real Estate Excise Tax - I 2,139,875 2,279,745 2,890,154 3,124,470 108%Parks & Recreation Special Revenue Fund 51,493 68,510 42,724 36,656 86%Downtown Initiatives 160,783 162,422 162,344 173,440 107%VNHR Properties 257,292 188,746 240,505 184,463 77%Senior Messenger 282,741 304,535 250,000 290,206 116%TIF Funds 569,847 941,481 531,692 588,500 111%PIF Funds 3,179,974 1,431,114 655,000 1,820,394 278%Miscellaneous Special Revenue Funds 293,962 318,110 262,000 716,670 274%

DEBT SERVICE FUNDSG O Debt Service Fund 11,839,916 11,854,562 39,884,433 36,372,857 91%L I D Fund 3,591 587,431 - 121,768 n/a

CAPITAL FUNDS2011 Bond Capital Fund - Waterfront 19,032 18,437 - 19,013 Transportation Capital Fund 15,771,562 11,073,464 27,525,660 10,706,139 39%Capital Improvement Fund 558,496 6,621,303 4,719,000 803,213 17%VNHR Property Capital 718,857 281,141 10,060,251 2,693,698 27%Parks Construction Fund (Capital Projects only) 1,825,920 3,956,902 19,864,730 13,624,862 69%City Tree Reserve Fund 129,062 16,076 81,348 37,952 47%Drainage Construction Fund 524,457 849,432 1,166,877 911,766 78%Water/Sewer Capital Reserves 5,733 12,026 10,000 12,485 125%Systems Development Reserves 2,596,434 2,103,128 1,506,000 3,321,361 221%Water Construction Fund 7,742,157 1,435,513 16,720,102 15,343,865 92%SCIP Fund 745,359 805,027 615,000 732,951 119%Utility Customer Assistance 12,258 11,437 41,000 13,436 33%Water Revenue Bond Debt Service Fund 1,199,369 645,942 643,572 646,305 100%Sewer Revenue Bond Debt Service Fund 12,373,625 10,819,027 10,789,584 10,813,597 100%


REVENUES Attachment B

ADJ-13 ADJ-14 ADJ-15 ADJ-152013 2014 2015 2015 % of

Actuals Actual Budget Actual BudgetDebt Service Reserves 3,134 7,208 6,000 7,633 127%Sewer Utility Fund 40,581,428 41,059,579 44,132,857 46,840,575 106%Sewer System Development 3,121,869 2,130,461 2,053,000 3,376,952 164%Sewer Construction Fund 2,043,767 1,449,132 6,644,000 5,724,895 86%ENTERPRISE FUNDSStorm Water

Storm Drainage Fees 10,962,432 11,661,770 11,994,129 12,373,597 103%Private Capital Contributions 140,652 347,885 150,000 974,406 650%Miscellaneous 172,489 284,692 100,000 373,501 374%

Total Storm Water Fund 11,275,573 12,294,347 12,244,129 13,721,505 112%Water

Water SalesResidential 19,945,387 21,195,019 22,243,659 23,338,172 105%Commercial 4,374,554 4,580,210 4,718,647 5,136,383 109%Governmental 751,214 821,042 875,916 985,320 112%

Subtotal Water Sales 25,071,155 26,596,271 27,838,222 29,459,874 106%Private Capital Contributions 2,657,366 2,613,959 2,500,000 6,463,117 259%Interfund Transfers 2,429,427 2,908,437 2,814,746 2,681,098 95%Indirect Cost Plan Revenue 1,393,195 1,275,294 1,398,068 1,570,615 112%Miscellaneous 2,048,825 2,152,919 1,385,278 1,923,196 139%

Total Water Fund 33,599,968 35,546,880 35,936,314 42,097,900 117%Sewer

Sewer ChargeResidential 24,621,539 25,603,987 25,815,692 26,033,424 101%Commercial, Industrial 11,220,783 11,705,089 12,154,634 12,145,094 100%Governmental 1,147,940 1,214,558 1,388,053 1,220,077 88%

Subtotal Sewer Charges 36,990,262 38,523,634 39,358,379 39,398,594 100%Private Capital Contributions 779,319 956,163 600,000 2,909,577 485%Interfund Transfers 2,499,980 1,200,000 3,981,178 3,981,178 100%Miscellaneous 311,866 379,783 193,300 551,225 285%

Total Sewer Fund 40,581,428 41,059,579 44,132,857 46,840,575 106%Building Inspection

Permits 3,604,212 2,881,245 3,412,211 3,747,752 110%Miscellaneous 132,410 155,631 151,020 157,101 104%Interfund Services 982,127 647,824 692,966 692,966 100%

Total Building Fund 4,718,749 3,684,700 4,256,197 4,597,819 108%Solid Waste

Solid Waste Utility Tax 1,662,040 1,421,536 1,680,000 1,096,068 65%Service Charges-Recycling 869,570 838,822 900,000 499,559 56%Miscellaneous 95,452 73,327 30,000 112,014 373%

Total Solid Waste Fund 2,627,062 2,333,685 2,610,000 1,707,642 65%Parking

Parking Fines 496,883 442,011 578,000 382,477 66%Parking Meters & Lots 1,473,712 1,418,557 1,707,560 1,587,946 93%Miscellaneous 175,482 (82,969) (9,500) 35,691 -376%Operating Transfers 2,137,505 1,245,540 1,245,540 1,246,145 100%

Total Parking Fund 4,283,583 3,023,138 3,521,600 3,252,259 92%Tennis Center

Membership Fees 863,081 841,874 908,223 799,355 88%Instruction Fees 2,364 2,431 2,400 3,193 133%Miscellaneous 16,573 17,857 49,333 21,477 44%Operating Transfers 112,441 189,864 391,598 391,598 100%

Total Tennis Center Fund 994,459 1,052,026 1,351,554 1,215,622 90%Other Enterprise Funds

Pearson Airfield 949,674 713,165 734,780 693,637 94%Utility Customer Assistance 12,258 11,437 41,000 13,436 33%

INTERNAL SERVICE FUNDSFacilities Asset Mgmt & Replacement Reserve Fund 7,789,087 1,832,604 1,820,000 1,838,531 101%Equipment Services Operations Fund 4,530,295 4,461,647 4,985,076 5,045,146 101%Equipment Services Capital Fund 2,744,568 2,880,158 2,890,263 3,137,085 109%Computer Repair & Replacement 2,712,378 7,461,199 2,667,556 2,898,395 109%Self-Insured Worker's Comp & Liability Fund 4,323,959 4,228,666 3,567,982 3,817,742 107%Internal Administrative Services Fund 600,088 16,320,601 14,041,604 86%Benefits Fund 15,082,943 14,658,247 11,507,985 9,913,855 86%Self-Insured Health Insurance Fund - 7,919,367 9,181,215 116%Mail Services Fund 191,108 177,863 250,682 253,035 101%

AGENCY FUNDSSWAT Team 182,651 179,407 200,087 183,090 92%Police Pension 1,081,486 1,081,764 1,082,468 1,087,546 100%Fire Pension 1,960,550 1,976,417 1,981,000 1,962,342 99%Cable TV 914,191 1,330,532 1,236,517 1,157,137 94%Notes1. This report was prepared using the methodology prescribed under the basis of budgeting, accrual entries under GASB34 were excluded f 2. Operating transfers between funds are included within this report.3. Capital Project Funds are excluded.4. The Water, Sewer and Storm Water funds are adopted as one legal fund but are shown separately for informational purposes. Private capital contributions, adjustments for doubtful accounts and interfund transfers are included in this report and are categorized as

REVENUES Attachment B

City of VancouverOutstanding Debt - General Obligation BondsFourth Quarter 2015

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

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

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

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

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

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

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

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

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

Jun-09 To fund multiple Transportation Projects

12,970,000 9,650,000 4.03% 12/1/2028

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

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

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

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

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

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

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

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

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

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


Jun-15 To fund the West Barracks rennovations and to partially refund the 2005 LTGO, 2006 LTGO, and the 2008 LTGO issued for the East Police Precinct, West Police Precinct, Evidence Building, Fire Station 810, Transportation Projects, and the Marshall CC remodel.

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

Total Outstanding General Obligation Bonds 91,671,500$


City of VancouverOutstanding Debt - Revenue BondsFourth Quarter 2015

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

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

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

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

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

Jun-08 Refund the 1998 Water/Sewer Revenue Bonds

20,230,000 2,845,000 3.551% 12/1/2016

31,345,000$


City of VancouverInvestment Activity

Fourth Quarter of 2015(Dollars in thousands)

As of Percent of As of Percent of9/30/2015 Portfolio 12/31/2015 Portfolio

State Investment Pool 90,169 31.3% 80,506 27.4%Clark County Investment Pool 4,532 1.6% 791 0.3%U.S. Agencies 169,034 58.7% 188,960 64.3%Corporate Bonds (Pension Fund) 1,042 0.4% 1,035 0.4%Municipal Bonds 17,144 6.0% 16,347 5.6%Zero Coupon 6,203 2.2% 6,211 2.1%

Total by Investment Type 288,124$ 100.0% 293,850$ 100.0%

As of Percent of As of Percent of9/30/2015 Portfolio Cumulative 12/31/2015 Portfolio Cumulative

Overnight 94,701 32.9% 32.9% 84,126 28.6% 28.6%One Month - 0.0% 32.9% - 0.0% 28.6%Two to Six Months 28,593 9.9% 42.8% 24,999 8.5% 37.1%Six Months to One Year 35,815 12.4% 55.2% 87,982 29.9% 67.1%One to Five Years 129,015 44.8% 100.0% 96,743 32.9% 100.0%

Total by Length of Maturity 288,124$ 100.0% 293,850$ 100.0%

12 Months 12 Months


Investment ActivityFourth Quarter 2015

Issuer Type of InvestmentTransaction

DateMaturity

Date Purchase or

Deposit Redemption or

Withdrawal

Effective Interest

Rate

OctoberClark County Treasurer* Local Government Investment Pool 3,527.64 3,291,729.58 0.60%FHLB U.S. Agency 10/28/2015 5,000,000.00 0.47%FHLB U.S. Agency 10/28/2015 5,000,000.00 0.50%FHLB U.S. Agency 10/27/2015 5,000,000.00 0.75%FHLB U.S. Agency 10/30/2015 5,000,000.00 0.72%FHLB U.S. Agency 10/29/2015 5,000,000.00 0.75%FNMA U.S. Agency 10/15/2015 5,000,000.00 0.88%Washington State Treasurer* Local Government Investment Pool 30,568,598.93 23,000,000.00 0.39%

45,572,126.57 41,291,729.58

NovemberClark County Treasurer* Local Government Investment Pool 1,617.24 385,850.57 0.60%FHLB U.S. Agency 11/20/2015 - 5,000,000.00 0.50%FHLB U.S. Agency 11/24/2015 5,000,000.00 0.45%FHLB U.S. Agency 11/25/2015 5,000,000.00 0.80%FHLB U.S. Agency 11/24/2015 5,000,000.00 0.90%FHLB U.S. Agency 11/30/2015 5,000,000.00 1.00%Washington State Treasurer* Local Government Investment Pool 27,053,749.96 10,000,000.00 0.39%

37,055,367.20 25,385,850.57

DecemberClark County Treasurer* Local Government Investment Pool 875.05 70,023.78 0.60%MUNI Clark County School District 12/1/2015 415,000.00 2.00%MUNI City of Mountlake Terrace 12/1/2015 105,000.00 2.00%MUNI Pierce County School District 12/1/2015 105,000.00 2.00%MUNI Vancouver Wash LTGO 12/1/2015 25,000.00 2.25%MUNI Whatcom County School District 12/1/2015 105,000.00 2.00%FHLB U.S. Agency 12/10/2015 5,000,000.00 0.63%FHLB U.S. Agency 12/31/2015 5,000,000.00 0.63%FHLB U.S. Agency 12/21/2015 5,000,000.00 FHLB U.S. Agency 12/22/2015 5,000,000.00 FHLB U.S. Agency 12/31/2015 5,000,000.00 Washington State Treasurer* Local Government Investment Pool 11,714,331.69 46,000,000.00 0.39%


City of Vancouver Investment Portfolio Including Call Dates

12/31/2015Purchase Maturity Par Market Book Percent Cumulative Interest Effective

CUSIP Issuer Date Date Value Value Value of Portfolio Percent Rate YieldCLARK CO LGIP Clark County LGIP 790,621.42 790,621.42 790,621.42 0.3% 0.27% 0.594 0.174

WA STATE LGIP Washington State LGIP 80,505,567.00 80,505,567.00 80,505,567.00 27.4% 27.40% 0.246 0.575181117DQ2 Clark County WA Public Utiliti 03/08/2012 01/01/2016 330,000.00 330,000.00 330,000.00 0.1% 0.11% 1.208 0.724812626X61 City of Seattle 06/04/2013 01/01/2016 2,500,000.00 2,500,000.00 2,500,000.00 0.9% 0.85% 0.734 0.7003130A2QU3 Federal Home Loan Bank 12/11/2014 01/25/2016 5,000,000.00 5,000,600.00 5,000,199.49 1.7% 1.70% 0.276 0.825

313382B77 Federal Home Loan Bank 02/12/2013 02/12/2016 5,000,000.00 5,001,300.00 5,000,000.00 1.7% 1.70% 0.414 0.4143130A3FM1 Federal Home Loan Bank 12/16/2014 03/01/2016 5,000,000.00 4,999,900.00 4,999,655.17 1.7% 1.70% 0.337 0.6013133EDZ88 Federal Farm Credit Bank 12/03/2014 04/27/2016 5,000,000.00 4,997,650.00 4,999,654.76 1.7% 1.70% 0.268 0.316

3130A5EJ4 Federal Home Loan Bank 05/18/2015 05/18/2016 5,000,000.00 4,995,250.00 4,999,048.61 1.7% 1.70% 0.296 0.414939720LH9 State of Washington 03/27/2013 07/01/2016 5,320,000.00 5,300,528.80 5,318,474.69 1.8% 1.81% 0.825 0.78936962G6Z2 General Electric Capital Corp 07/16/2015 07/12/2016 500,000.00 502,415.00 502,352.63 0.2% 0.17% 0.601 0.6513130A62Y2 Federal Home Loan Bank 08/17/2015 08/17/2016 5,000,000.00 5,000,600.00 5,000,000.00 1.7% 1.70% 0.414 0.5413130A62Y2 Federal Home Loan Bank 08/17/2015 08/17/2016 5,000,000.00 5,000,600.00 5,000,000.00 1.7% 1.70% 0.414 0.5113133EEZB9 Federal Farm Credit Bank 04/16/2015 09/16/2016 5,000,000.00 4,987,750.00 5,000,000.00 1.7% 1.70% 0.444 0.4353130A2T97 Federal Home Loan Bank 10/02/2014 09/28/2016 5,000,000.00 4,991,200.00 4,996,796.75 1.7% 1.70% 0.579 0.268812626R50 City of Seattle 06/04/2013 10/01/2016 3,425,000.00 3,491,479.25 3,487,268.05 1.2% 1.19% 0.541 1.1843130A3CW2 Federal Home Loan Bank 06/08/2015 10/17/2016 5,000,000.00 4,989,250.00 4,999,268.92 1.7% 1.70% 0.511 0.4443133EEM64 Federal Farm Credit Bank 05/19/2015 10/19/2016 5,000,000.00 4,999,450.00 5,000,000.00 1.7% 1.70% 0.473 1.2083133EEYT1 Federal Farm Credit Bank 04/20/2015 10/20/2016 2,000,000.00 2,000,020.00 2,000,000.00 0.7% 0.68% 0.503 0.2773134G3S50 Federal Home Loan Mortgage Co. 10/22/2012 11/01/2016 5,000,000.00 4,993,300.00 5,000,000.00 1.7% 1.70% 0.616 0.464735389QU5 Port of Seattle WA 08/15/2014 11/01/2016 250,000.00 251,992.50 251,877.83 0.1% 0.09% 0.838 0.8633130A3GK4 Federal Home Loan Bank 11/13/2014 11/07/2016 5,000,000.00 4,997,900.00 4,999,156.18 1.7% 1.70% 0.612 0.2963133EEBU3 Federal Farm Credit Bank 11/20/2014 11/14/2016 5,000,000.00 4,987,800.00 4,999,057.49 1.7% 1.70% 0.613 2.21931358C7L4 Federal Nat'l Mtg. Assoc. 05/02/2013 11/15/2016 4,250,000.00 4,221,185.00 4,231,105.48 1.4% 1.44% 0.515 0.9863133EEUS7 Federal Farm Credit Bank 03/23/2015 11/23/2016 5,000,000.00 4,990,200.00 5,000,000.00 1.7% 1.70% 0.617 0.2573130A3J70 Federal Home Loan Bank 12/10/2015 11/23/2016 5,000,000.00 4,995,750.00 4,993,100.00 1.7% 1.70% 0.769 0.473495026RY4 King County School District 06/23/2015 12/01/2016 2,530,000.00 2,564,306.80 2,562,267.76 0.9% 0.87% 0.909 0.671833240GJ7 Snohomish County School Distri 04/10/2015 12/01/2016 350,000.00 354,291.00 354,461.70 0.1% 0.12% 0.592 1.292962526EJ4 Whatcom County School District 07/23/2015 12/01/2016 250,000.00 253,070.00 253,097.13 0.1% 0.09% 0.631 0.986313371PV2 Federal Home Loan Bank 05/07/2014 12/09/2016 4,000,000.00 4,029,600.00 4,033,609.97 1.4% 1.37% 0.710 0.3373130A5UB3 Federal Home Loan Bank 06/30/2015 12/16/2016 5,000,000.00 4,988,000.00 5,000,000.00 1.7% 1.70% 0.542 0.5793134G7AH4 Federal Home Loan Mortgage Co. 06/23/2015 12/23/2016 5,000,000.00 5,001,100.00 5,000,000.00 1.7% 1.70% 0.641 0.8383137EADU0 Federal Home Loan Mortgage Co. 04/14/2015 01/27/2017 5,000,000.00 4,979,900.00 4,999,399.69 1.7% 1.70% 0.504 0.6163133ECG99 Federal Farm Credit Bank 03/08/2013 02/22/2017 5,000,000.00 4,989,850.00 5,000,000.00 1.7% 1.70% 0.651 0.2003130A4F72 Federal Home Loan Bank 03/04/2015 02/24/2017 5,000,000.00 4,992,250.00 4,999,418.31 1.7% 1.70% 0.700 0.4143133EFAN7 Federal Farm Credit Bank 08/24/2015 04/24/2017 5,000,000.00 4,978,850.00 5,000,000.00 1.7% 1.70% 0.740 0.7343134G4SZ2 Federal Home Loan Mortgage Co. 01/28/2014 04/28/2017 5,000,000.00 5,001,150.00 5,000,000.00 1.7% 1.70% 0.986 0.4933133ECPJ7 Federal Farm Credit Bank 05/16/2013 05/16/2017 5,000,000.00 4,974,950.00 5,000,000.00 1.7% 1.70% 0.724 0.3773134G6R70 Federal Home Loan Mortgage Co. 12/21/2015 05/26/2017 5,000,000.00 4,976,450.00 4,983,441.94 1.7% 1.70% 0.986 0.7103134G6R70 Federal Home Loan Mortgage Co. 12/22/2015 05/26/2017 5,000,000.00 4,976,450.00 4,983,334.42 1.7% 1.70% 0.987 0.5423130A5EP0 Federal Home Loan Bank 12/31/2015 05/30/2017 5,000,000.00 4,976,600.00 4,977,294.61 1.7% 1.69% 0.936 0.503163123MM1 Chelan County Public Utility D 05/22/2015 06/01/2017 2,000,000.00 1,974,260.00 1,980,380.51 0.7% 0.67% 0.700 0.740929903DT6 Wachovia Corp 07/16/2015 06/15/2017 500,000.00 529,305.00 532,634.02 0.2% 0.18% 1.562 0.7003133EFBS5 Federal Farm Credit Bank 09/03/2015 07/03/2017 5,000,000.00 4,971,650.00 5,000,000.00 1.7% 1.70% 0.671 0.2763134G7C585 Federal Home Loan Mortgage Co. 09/28/2015 09/28/2017 5,000,000.00 5,001,650.00 5,000,000.00 1.7% 1.70% 0.789 0.6133136G1ZD4 Federal Nat'l Mtg. Assoc. 03/28/2014 09/28/2017 5,000,000.00 5,005,900.00 5,000,000.00 1.7% 1.70% 1.292 0.5043134G7V24 Federal Home Loan Mortgage Co. 10/27/2015 10/27/2017 5,000,000.00 4,973,100.00 5,000,000.00 1.7% 1.70% 0.718 0.5153134G73X7 Federal Home Loan Mortgage Co. 10/30/2015 10/27/2017 5,000,000.00 4,973,150.00 5,000,000.00 1.7% 1.70% 0.710 0.617

3134G7V24 Federal Home Loan Mortgage Co. 10/29/2015 10/27/2017 5,000,000.00 4,973,100.00 4,998,857.94 1.7% 1.70% 0.752 0.592


Quarterly Financial Report - Fourth Quarter, 2015

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