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Third Quarter 2017 Financial Report City of Vancouver 1

"A colorful past, a bright future"

Quarterly Financial Report

Third Quarter 2017

City of Vancouver 1


Third Quarter 2017 Financial Report (This report contains un-audited financial information as of November 1, 2017)

Table of Contents

Section Page

I. Executive Summary 3 II. Economic Report 4 III. Financial Results 12 IV. Outstanding Debt 26 V. Investments 26 VI. Interfund Loans 28

Attachments

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

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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.

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I. Executive Summary

The national economy continued to grow through the third quarter of 2017, according to the “advance” estimate published by the Bureau of Economic Analysis. Real GDP increased by 3.1%. The most recent data indicates that the growth was mostly due to increased personal consumption spending, nonresidential fixed investments, exports, private inventory investments, and federal government spending that were partially offset by negative contributions from private residential fixed investment, and state and local government spending. The national unemployment rate fell slightly from 4.4% at the end of the second quarter to 4.2% in September 2017, likely reflecting the impact of hurricanes Irma and Harvey.

City of Vancouver General Fund revenues through September totaled $108.1 million, or 73% of the forecast for the year, compared to 2016 Q3 revenues of $100.0 million. The revenue increase is largely attributable to a rise in collections of Utility Tax on water, drainage, sewer, solid waste, and continuing elevated sales tax revenues. An inflationary increase in the underlying City utility rates went into effect January 1, 2017, along with a 3.4% utility tax increase dedicated to funding additional Police department staff. Summer 2017 was uncharacteristically dry and warm, resulting in higher water usage. Sales tax revenues continue to exceed projections due to strong auto sales, elevated construction, and an overall strong economy. Through September 2017, the City collected $1.7 million more in sales tax than it did through the third quarter of 2016.

General Fund expenditures at the end of September of 2017 totaled $105.9 million, or 66% of the budget for the year. Departmental budgets through September 2017 were 71% spent. Departmental expenditures exceeded those in 2016 by $7.1 million over the same time period.

The General Fund operating cash balance was $50.3 million at the end of September 2017.

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 86.0% 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.

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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 previous four years, but the annual rate of increase has cooled. 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 third quarter of 2017, according to the “advance” estimate published by the Bureau of Economic Analysis. In the third quarter, real GDP increased 3.1%. The most recent data indicates that the growth was mostly due to increased personal consumption spending, nonresidential fixed investment, exports, private inventory investment and federal government spending that were partially offset by negative contributions from private residential fixed investment, and state and local government spending.1 The national unemployment rate fell slightly from 4.4% at the end of the second quarter to 4.2% in September of 2017, likely reflecting the impact of hurricanes Irma and Harvey.

The national seasonally adjusted unemployment rate declined in 2016 and the trend continued into 2017, falling to a historically low of 4.2% in September of 2017. Average hourly earnings spiked 0.5 percent, with the year-on-year rate jumping 4 tenths to 2.9 percent. Nationally, employment gains occurred in several industries, led by health care, transportation and warehousing and partially offsetting declines in the food services industry. The numbers of unemployed workers have decreased slightly since the beginning of 2016 to an estimated 6.8 million nation-wide2.

1 National Income and Product Accounts; Gross Domestic Product: Third Quarter 2017 (Advance Estimate), October 27, 2017, https://bea.gov/newsreleases/national/gdp/2017/gdp3q17_adv.htm 2 http://www.bls.gov/news.release/pdf/empsit.pdf

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http://www.bls.gov/news.release/pdf/empsit.pdf


Data Source: www.bls.gov

• The September 2017 Federal Open Market Committee’s press release confirmed that labor market conditions continued to strengthen and economic activity has risen moderately. Job gains remained solid and the unemployment rate declined. Growth in household spending has been modest and growth in business fixed investment has picked up in recent quarters. Overall inflation is currently running below 2 percent.3

• 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 consumer perceptions of current business and employment conditions, as well as consumer expectations for the upcoming six months. The level of consumer confidence is associated with consumer anticipation about future developments in the economy, and is used as an indicator of the likely general direction of consumer spending in the coming months. The index began moving up in 2016 with the trend continuing into 2017, and increased from 113.3 in December 2016 to 119.8 in September 2017. This reading remains to be unusually strong. Income expectations have increased to a noteworthy level, with the spread between optimists and pessimists widening, pointing to fundamental confidence in the economy.

• A second measure of consumer attitudes, the University of Michigan Consumer

Sentiment, paints a similar picture. The indicator peaked at 98.5 in January, and continued to trend downward, ending in September at 95.3. The current conditions index remains high, but the economic expectations are falling, pointing to potential slowing ahead.

3 https://www.federalreserve.gov/newsevents/pressreleases/monetary20170920a.htm

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http://www.bls.gov/

http://www.federalreserve.gov/newsevents/pressreleases/monetary20170920a.htm

http://www.federalreserve.gov/newsevents/pressreleases/monetary20170920a.htm


• The US Conference Board tracks ten different economic indicators in order 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 increased steadily since early 2009, reaching a high level of 128.6 in September.

“The US LEI declined slightly in September for the first time in the last twelve months, partly a result of the temporary impact of the recent hurricanes,” said Ataman Ozyildirim, Director of Business Cycles and Growth Research at The Conference Board. “The source of weakness was concentrated in labor markets and residential construction, while the majority of the LEI components continued to contribute positively. Despite September’s decline, the trend in the US LEI remains consistent with continuing solid growth in the US economy for the second half of the year.”4 The graphic representation of the Conference Board Leading Economic Index for the U.S. since 1999 is shown in the following graph.

4 https://www.conference-board.org/pdf_free/press/US%20LEI%20-%20Press%20Release%20October%202017.pdf

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http://www.conference-board.org/pdf_free/press/US%20LEI%20-%20Press%20Release%20October%202017.pdf


• National level housing sector data indicates fluctuations, driven by the multi-family component. Housing starts increased through the end of 2016, but have gradually declined since. The latest national data indicates that starts fell 4.7% in September to an annualized rate of 1.127 million. Permits also fell by 4.5 percent. Even though monthly data declined, the annualized numbers still point to a year-on-year gain of 9.3 percent in single family homes. The multi-family permits that had been on an upswing over the last two years fell 16.1 percent, indicating a 24 percent decline on a year-on-year basis. The housing sector has slowed in 2017.

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• 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 increased 2.2% over the last 12 months, as reported by the U.S. Department of Labor. The fundamental costs look soft in September’s report. Housing rose only 0.2 percent, and medical costs declined by 0.1 percent; prescription drugs, apparel, and new and used vehicles also declined. Positive increases were limited to wireless services, recreation, and food (0.1 percent increase). The graphs below shows monthly CPI changes and the annualized inflation rate changes in both the CPI and the Core CPI (the CPI less food and energy).

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State Economy

• The October Economic and Revenue update from the Washington Economic and Revenue Forecast Council confirms that the Washington economy continues to expand at a rapid pace. Employment grew as expected in the third quarter, along with Washington personal income. The state’s manufacturing activity and vehicle sales remained strong (4.8% increase). Residential building permits increased, but housing starts and sales declined. The Seattle area consumer price inflation is well above the national average due to higher shelter cost inflation, including a 13.5% increase in prices over the previous year in July.

• State revenue collections are coming in slightly higher than anticipated.5 Most of the

additional revenue came from a one-time payment for past due taxes.

Local Economy

• The number of residential permits issued is the local data equivalent for housing starts. In 2012 and 2013, the City saw a significant increase in both the number of residential units permitted and their respective valuation. In 2014 only 189 single family residential houses were permitted with a total valuation of $21.0 million. In 2015 - 2016, the pace of permitting increased; however, single family residential growth has been very slow in 2017. The number of single family residential houses built in the third quarter of 2017 was in line with those built in the third quarter of 2016, but at a very low level historically -- only 38 houses were permitted.

• Following the national trends, the City has seen an increase in the number of multi-family

units permitted within the city limits. The number of new multi-family units permitted in

5 Washington March Economic & Revenue Forecast, http://erfc.wa.gov/sites/default/files/public/documents/publications/oct17.pdf

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http://erfc.wa.gov/sites/default/files/public/documents/publications/oct17.pdf

http://erfc.wa.gov/sites/default/files/public/documents/publications/oct17.pdf


2013 was 657; roughly double that of 2011 and 2012. In 2014 and 2015, a total of 609 and 705 units were permitted, respectively. Both 2016 and 2017 show strong new multi-family construction and 875 units were permitted in the first two quarters of 2017, but the activity cooled off significantly in the third quarter, with only 138 multi-family units permitted.

• Activity in the commercial sector has remained strong. Fewer commercial projects were permitted to-date than in the comparable 2016 time period, but the valuation of the projects permitted is larger. So far in 2017, 79 commercial projects were permitted, with a total valuation of $99.4 million.

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

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• The Portland-Vancouver metro inflation rate is published twice a year by the Bureau of Labor Statistics. The metro inflation rate (CPI-U) for the 12 month period ending in June 2017 was 4.4%.6 Energy prices increased 10.5%, largely as a result of a jump in gasoline prices. The index for all items less food and energy rose 4.6% over the year.

• According to the Bureau of Labor Statistics, the City’s estimated unemployment rate at the end of December was 5.1%, similar to the county rate and above the estimated unemployment rate of 3.9% in the Portland metro area.

Data provided by the Bureau of Labor Statistics

• Home sales are cyclical, typically increasing in the second and third quarters of the year. Home prices continue to stabilize both nationally and locally, according to the S&P’s Case- Shiller Home Price Index. During the last twelve months, ending in August of 2017, the prices of houses in the Portland-Vancouver metro area have been approximately 7.3% higher than

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


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


in the prior year, indicating that the local market continues to be on an unsustainable upward swing. The index for the local metro housing market has grown faster than the largest 20 cities nationally, and local home values have exceeded those reached during the last housing bubble.

• The median home value in Vancouver, WA is estimated to be $289.1 thousand, according to

Zillow. Vancouver home values have increased 8.4% over the past year. Local housing prices have likely peaked, and are anticipated to show signs of slowing in the coming months.

• Zillow evaluates Vancouver’s real estate market as healthy, relative to other markets across

the county. The Market Health index is based on up to 10 metrics, including past and projected home values, the prevalence of foreclosures, foreclosure re-sales, negative equity, and delinquency. The Vancouver market is currently rated 9.2 out of a possible 10. Only 0.9% of all houses are currently delinquent on mortgages, compared to the U.S. average rate of 1.6%.

III. Financial Results

General Fund REVENUES

City of Vancouver General Fund revenues through the third quarter of 2017 totaled $108 million, exceeding comparable 2016 revenues by $8 million. Tax revenues (largely utility, sales, and property taxes) exceeded 2016 third quarter collections by approximately $6.2 million. An inflationary increase in City Utility rates went into effect in 2017, along with a 3.4% utility tax increase which had been approved in 2017 in order to fund a d d i t i o n a l s t a f f i n g i n police. Utility rates were increased accordingly. Sales tax collections through the third quarter of the year exceeded comparable 2016 collections by $1.7 million, due to strong auto sales and construction activity. The remaining revenue increase is due to the timing of the indirect cost plan revenue in the General Fund and increased property tax revenues.



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 86.0% of the City’s total forecasted General Fund revenues.

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 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% property tax levy increase in 2017, bringing the total

City of Vancouver levy rate to $2.477 per $1,000 of assessed value, which was applied to a total taxable value of approximately $18.6 billion. The General Fund collects $2.47 per $1,000 in assessed value of the total levy. An additional $0.32 levy was approved by voters in November of 2016 for the Affordable Housing Fund. The new levy is anticipated to generate $6 million per year to be dedicated to increasing the number of affordable housing units in the City. The Affordable Housing tax levy does not come into the City’s General Fund, but goes to a newly created Affordable Housing Fund.

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

between 2009 and 2012. The assessed valuation reduction resulted in an increase of the City’s property tax levy rate, but did not impact revenues. The City’s assessed valuation between 2013 and 2017 increased by 32.3%. The increase in assessed valuation in 2017 alone was 10.7%.

• A total of $45.8 million in property taxes (exclusive of the Affordable Housing Levy) is

anticipated to be collected in 2017. Through the third quarter of 2017 $26.5 million was



collected; approximately $630 thousand more than was collected over a comparable period of 2016, mostly due to the levy increase and the timing of revenues.

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

Sales Tax

• The 8.4% sales tax rate 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.

• $28.6 million in sales tax revenue was received by the end of September 2017,

approximately $1.7 million more than was received at the end of September 2016. The fastest growing categories of retail sales were auto sales, construction-related, and general merchandise. The 2017 sales tax forecast anticipated a mild recession in late 2017, but it is unlikely that will take place. 2017 Sales tax revenues are anticipated to exceed the forecast by $3 million.

• Growth in taxable retail sales over 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 6.0% 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.

• The utility tax on privately owned utilities generated $13.7 million through September

2017, approximately $0.5 million above comparable collections in 2016, mostly due to higher electrical and natural gas tax revenues.

• Natural gas tax revenues through September 2017 totaled $2.1 million, approximately

$230 thousand higher than comparable 2016 collections.

• Telephone tax revenues through the third quarter of 2017 totaled $3.2 million, compared to $3.1 million collected during the comparable time period of 2016.

• $6.9 million was collected in electrical tax revenue through the third quarter of 2017,

approximately $145 thousand higher than comparable 2016 collections. The 2017 forecast anticipated an approximate 3.0% increase over actual 2016 revenues, and 2017 actuals are expected to come in slightly below the forecast.



• The cable franchise fees revenue totaled $1.6 million through September of 2017, $77 thousand higher than comparable 2016 collections.

Water, Sewer, Storm Water and Solid Waste Taxes

• The City Water, Sewer, and Storm Water Utility tax was increased to 24.9% on April 1, 2017 to fund increased Police staffing and related services.

• Before 2010, the City charged a solid waste franchise fee for garbage collection services

to fund Solid Waste fund operations. A portion of the fee, equivalent to approximately a 12.0% tax rate, was deposited into the General Fund for general use. In 2010, the portion of the franchise fee related to general use was converted to a utility tax and levied at the same rate as water, sewer and storm water utilities tax.

• Utility revenue on city-owned utilities has risen slowly due to an increasing customer base

and underlying rate increases. The water, sewer, and drainage utility rates had inflationary increases in 2017. The rates were also increased to accommodate the additional utility tax for streets and police.

• A total of $20.2 million in City-owned utilities taxes was collected through September

2017, $3.3 million more than through September of last year. The utility tax increase started impacting revenues in the second quarter of 2017. By year end, utility tax on city owned utilities is anticipated to generate approximately $4.2 million more than it did in 2016.



• In 2017, residential water revenues generated approximately 80.0% of total water user revenues, while residential sewer fee revenues made up 66.0% of total sewer user revenues.

Grant & Entitlement Revenues

• The City anticipates receiving $1.1 million in grants in the General Fund in 2017. The largest i n c l u d e the COPS grant that partially funds additional Police staff, and the Brownfield and Commute Trip Reduction grants in the Community and Economic Development department.

• Through the end of the third quarter, the City received approximately $380 thousand in

grant reimbursements. Most grants are cost-reimbursable, with the majority of the reimbursement coming in during the second through fourth quarters of the year.

Charges for Goods and Services

The largest fee-revenue generating program areas are the Development Review Services and Recreation programs. The 2017 revenue forecast for these two sources is $4.7 million.Land Use and Other Planning Permits

• From 2008 through 2010, the City experienced a significant decrease in both the number of single family residential permits issued and in their valuation. Collections from 2011 through 2013 remained relatively flat, but 2014 through 2016 saw significant annual increases in land use fees. Similar trends appear to continue into 2017.

• $807 thousand in planning permit fee revenues were collected by the City

through September 2017, approximately $45 thousand above revenues received during a comparable 2016 time period. Local activity remains elevated compared to the last few years.



Recreation Program Fees

$4.0 million in recreation fees were anticipated to be received in 2017. However, one of the two recreation centers underwent a major swimming pool renovation, and a portion of the center was closed to customers for longer than originally anticipated. The total recreation fee revenue received through the end of September was $3.1 million; approximately $280 thousand lower than comparable revenues in 2016.

EXPENDITURES

• General Fund expenditures through the third quarter of 2017 totaled $105.9 million, or 66% of the year’s budget, on track with the adopted budget.

• Departments spent 57.1 million, $7.1 million more than was spent through the third

quarter of 2016. The rise in spending was a result of broadly increased departmental costs and new Police staffing.

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



• General Fund salaries and benefits expenditures totaled $37 million through September of 2017, or 73% of the budget for the year.

• General Fund supplies and services category expenditures were $8.8 million, or 58% of

the budget.

• Intergovernmental expenditures include payments by the City to other jurisdictions based

on inter-local agreements, and internal transfers supporting other funds, such as the Debt Fund, Fire Fund, and Street Fund. Intergovernmental expenditures reached $44 mil l ion through the third quarter of 2017, or 62% of the budget for the year. The City has not been billed for the actual costs of jail services for city residents during the last three quarters of 2016 or first three quarters of 2017, because the County continues experience difficulty extracting the data from the newly installed EIS system.

• Internal expenditures were $10.4 million, or 70% of the budget for the year. Beginning in

2015, the cost of the internal services departments (such as IT, HR, Finance and General Services) is proportionately reflected in the respective budgets of the direct service departments.

• Capital expenses totaled $5.7 million and are mostly reflective of the City purchasing the

Tower Mall property for the purpose of economic development and job growth facilitation.

Cash Balance

• The General Fund operating cash balance was $50.3 million at the end of the third quarter 2017. This is $8.7 million higher than the cash balance at the end of September 2016. Of that amount approximately $7 million relates to unpaid cost of the Jail services provided by Clark County from early 2016 and to-date.

• In addition to the operating cash balance, the General Fund had an emergency reserve

totaling $11.5 million at the end of September 2017, compared to $10.9 million in September 2016. The Council updated the emergency reserve balance financial policy in 2012, requiring that the emergency reserve balance 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 of 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 2016 was $65.2 million, according to the City’s audited financial statements. An estimated $0.3 million of the fund balance represents prepaid items. 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 grant revenue received in advance of expenditures in VPD. The Committed balance of $20.9 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, and $6.2 million of reserve restricted for capital purposes.

The balance pays for the ongoing operations of the General Fund when incoming seasonal revenues are not sufficient to cover expenses, and eliminates the need for short-term borrowing. The Assigned reserve of an estimated $34.3 million represents the City’s $30.4 million working capital, which is required to ensure sufficient cash flow in the fund. The Assigned balance also includes funding for 50% of accrued compensated absences. The remaining $9.8 million portion of the balance was determined to be undesignated at the end of 2016. The undesignated fund balance declined by approximately $3.8 million between 2015 and 2016, due to planned spending. Approximately $3.0-3.5 million of the 2016 appropriation was carried forward and used the corresponding fund balance.

Street Fund

• Street Fund expenditures through the third quarter of 2017 totaled $11.7 million, or 55% of the budget, approximately $0.4 million lower than comparable expenditures in 2016.

• Street Fund revenues (excluding a budgeted general fund transfer) totaled $6.6 million,

exceeding the comparable collections in 2016 by $0.6 million. The fund’s largest sources of revenue are state-shared revenues from the motor vehicle fuel tax (MVFT), the real estate excise tax (REET), and a transfer from the General Fund. The 2017 budgeted General Fund to Street fund transfer is $11.0 million.

• Motor Vehicle Fuel Tax (MVFT) revenues totaled $2.7 million through the third quarter of

2017, matching those in 2016. This revenue source is a set tax per gallon that does not depend on the price of gasoline. The significant nation-wide increase in gasoline prices over the past two years has resulted in declining gasoline consumption. The decline in consumption negatively impacted tax revenue collections state-wide and decreased the proportionate share of the tax received by the City.



Real Estate Excise Tax (REET)

• A 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 a REET for Parks and Transportation capital.

• REET revenue increased rapidly in 2004-2006, fueled by a favorable real estate market and

increasing home prices. REET revenues declined significantly through 2010 after the housing bubble in 2005 and 2006. Since 2011, collections have been increasing. Real estate activity remains very upbeat. In 2016, the revenue generated came close to the pre-recession years.

• A total of $3.1 million in REET revenue was received through the third quarter of 2017,

approximately $600 thousand higher than comparable collections in 2016. The graph below demonstrates the fluctuations in REET collections since 2005. REET collections will likely exceed the forecast by approximately $900 thousand in 2017.



Street Funding Initiative • During 2015, an extensive, six-month long public process took place to determine 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, among other things, an 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. 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

• 2016 was the first year of the new Street Initiatives revenue. The City pre-funded the activities

related to right-of-way maintenance with City dollars so that 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 (TBD) beginning July 1, 2016.

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


http://www.cityofvancouver.us/sites/default/files/fileattachments/public_works/page/12554

http://www.cityofvancouver.us/sites/default/files/fileattachments/public_works/page/12554


2015 2016 2017 2017 % Revenues Street Initiative Operating Fund

Actual 50,852

Actual 1,356,246

Budget 4,463,580

September 3,423,571

Budget 77%

Street Funding Initiative - Capital Fund - 549,617 1,654,715 1,048,457 63%

Transportation Benefits District - 1,058,954 3,400,000 1,846,906 54%

Expenditures Street Initiative- NEW Fund - 748,655 4,719,183 3,333,746 71% Capital Streets Initiative Fund (NEW) - 999,039 1,654,715 180,554 11%

Transportation Benefits District - - 1,731,165 1,498,374 87%

Consolidated Fire Fund

• The City has an Operating Fire Fund and a Capital Fire Fund. The Capital Fire Fund largely

p a y s f o r vehicle replacements and purchases. The Operating Fire Fund fully supports the Capital Fire Fund. The graph below represents the operating fund’s financial information.

• Operating Fire Fund revenues through the third quarter of 2017 were $1.2 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 and grants.

• Total Fire Operating expenditures through the third quarter were $31.1 million, 72% of the budget for the year and $3.7 million higher than during the comparable period of 2016.



Building Inspection Fund

• Building review and inspection fee revenues received through the third quarter totaled $2.8 million, representing an 8% decline in fee revenues received in 2016 during the comparable time period.

• Building Fund expenditures through September of 2017 totaled $3.7 million, slightly higher

than those in 2016 due to the addition of new positions.

• The fund balance in the Building fund targets funding for 18 months of permitting activity after revenue is collected. The projected fund balance at the end of 2017 can cover less than 12 months of permitting activity.

Parking Fund

• Fee and fine revenues through the September of 2017 were $2.3 million, approximately $600 thousand above comparable collections in 2016. Hourly parking rates were increased across the parking system in 2017. Additional revenue of $1.245 million is anticipated in the budget from both increased fees and parking meter expansion into areas that were previously not revenue-generating. Based on collections to-date, the new revenue is anticipated to be lower than forecasted by approximately $500 thousand by the end of 2017 and the General Fund is expected to backfill the shortfall on a one-time basis.

• The Fund was anticipated to become fully self-supporting beginning in 2018.



• Operating expenses through the third quarter of 2017 totaled $2.1 million, or 55% of the budget for the year, approximately $600 thousand higher than in 2016 over the comparable time period. The increase is mainly due to the system expansion projects underway.

Utility Operations

• Operating transfers between the Water, Sewer and Storm Water funds are included in the accompanying 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 totaled $25.7 million through September, or 81% of the forecast. Collections were $2.4 million above comparable 2016 collections, largely due to the tax increase for Street Initiatives (effective in 2016), inflationary rate increases, and the 3.4% utility tax increase to fund additional staffing in police (effective April 1, 2017).

• Water fund expenditures through September of 2017 totaled $24.8 million, or 56% of the

budget.

Sewer

• Fee revenues in the Sewer Fund were $32.8 million by September 2017, approximately $2.8 million above comparable 2016 revenues. Sewer rates had inflationary increases in 2017 and an adjustment for a 3.4% utility tax increase to fund increased police staffing.

• Sewer expenditures through September of 2017 totaled $29.2 million, $1.6 million above the

2016 comparable expenditures, mostly due to the timing of capital projects.

Storm Water

• $11 million in storm water fee revenue was received through the third quarter of 2017, approximately $0.8 million higher than 2016 comparable revenues. In 2017, the rates had an inflationary increase as well as an adjustment for a 3.4% utility tax increase to fund increased police staffing.

• Overall, the expenditures in the Storm Water fund were $11.1 million by September 2017, or

67% of the budget, approximately $2.5 million higher than those through the third quarter of 2016.

Internal Service Funds

Equipment Services Operating and Capital Funds

• $4.8 million was spent by Equipment Services on operating activities, or 64% of the budget for the year. The ER&R Capital fund spent only $1.3 million by the end of



September, or 18% of the budget for the year due to delays in new and replacement vehicle purchases.

Technology ER&R Fund

• $1.7 million, or 26% of the budget, was spent on technology and software replacement. A large portion of the 2017 budget of $6.9 million is earmarked to replace the City’s 16-year old ERP System, Oracle. A successful vendor, Workday, began working on the project in September 2017. The project is expected to continue through the end of 2018.

Internal Services Fund

• $10 million was spent by Internal Services departments (IT, Finance, HR and General Services) through September of 2017. This represents 67% of the budget for the year.

Risk Fund

• $1.9 million was spent by September of 2017, or 38% of the budget. The majority of the costs typically occur later during the year.

Benefits and Self Insured Health Insurance Funds

• $12.8 million was spent through September of 2017 on employee benefits, including health insurance and payments to medical trusts, approximately $1.1 million more than was spent last year over the same time period. The amount spent represents 75% of the budget for the year.

IV. Outstanding Debt

• At the end of the third quarter of 2017, the City had around $82.9 million of general

obligation (G.O.) debt outstanding and approximately $14.6 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 4.01%.

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 September indicates that the labor market has continued to strengthen, and that economic activity has been rising at a solid rate despite hurricane-related disruptions. Although the hurricanes caused a drop in payroll employment in September, the unemployment rate declined further. Household spending has expanded at a moderate rate, and growth in business fixed investment has picked up in recent quarters. Gasoline prices rose in the aftermath of the hurricanes, boosting overall inflation in September; however, inflation for items other than



food and energy remained soft. On a 12-month basis, both inflation measures have declined and are running below 2 percent. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed, on balance.

• Consistent with its statutory mandate, the Federal Open Market Committee seeks to foster

maximum employment and price stability. Hurricane-related disruptions and rebuilding will continue to affect economic activity, employment, and inflation in the near term, but past experience suggests that the storms are unlikely to materially alter the course of the national economy over the medium term. Consequently, the Committee continues to expect that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace, and labor market conditions will strengthen somewhat further. Inflation on a 12-month basis is expected to remain somewhat below 2 percent in the near term, but to stabilize around the Committee's 2 percent objective over the medium term. Near-term risks to the economic outlook appear roughly balanced, but the Committee is monitoring inflation developments closely.

• In view of realized and expected labor market conditions and inflation, the Federal Open

Market Committee decided to raise the target range for the federal funds rate from 1 to 1-1/4 percent. The stance of monetary policy remains accommodative, thereby supporting some further strengthening in labor market conditions and a sustained return to 2 percent inflation.

• The overall yield curve increased during the third quarter of 2017. The yield on the three-

month Treasury has increased to 1.06% at the end of the third quarter. The six-month Treasury yield has increased to 1.2%. The yield on the two-year Treasury has increased to 1.47%. The thirty-year Treasury yield slightly increased, ending the third quarter at 2.86% from 2.84%. Market risk of the City’s portfolio is low. The average maturity of the portfolio has been kept below 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 flow 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 third quarter of 2017 was $317.6 million compared to $329.3 million in June 2016. The portfolio had a weighted average yield of 1.06% year to date, 6 basis points higher than the projected yield of 1.0% for 2017. 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 7 bps lower than the State Investment Pool, which had an average yield of 1.129%. The State Pool has a weighted average maturity of 39 days. The City’s investment portfolio weighted average maturity is approximately 10 months. Longer-term portfolio yields will outperform shorter-term portfolio yields in a falling interest rate environment. Interest revenue distributed through the third quarter of 2017 to all funds is approximately $2,496,332 compared to $1,513,801 during the same period of 2016.

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 third quarter of 2017, one fund was on an interfund loan for a short time period.

City of Vancouver Outstanding Interfund Loans Through Third Quarter 2017

Balance Interest

Outstanding Interest Expense Fund Description 09/30/17 Lending Fund Rate Paid in 2017 Repayment Plan

108 CDBG Fund

$ - 001 1.21% $

0.64

Timing delay of receiving grant proceeds after expenditures have been paid.

Total Outstanding Interfund Loan Balance $ -


A A B ARANGE NAME ADJ-16 SEP-16 SEP-17 SEP-17ATTACHMENT A 2016 2016 % of 2017 2017 % ofExpenditures Year End September Year End Budget September BudgetGENERAL FUNDCity Council 455,038 342,355 75% 744,765 418,909 56%City Manager's Office 2,548,079 1,891,795 74% 3,735,661 2,282,782 61%Econ. Dev.: Real Estate operating - - 10,000 392 4%Legal Services 4,332,597 3,242,627 75% 5,188,428 3,674,830 71%Community Economic Development 5,005,711 3,727,726 74% 6,521,772 4,208,238 65%Parks Administration 830,295 571,661 69% - - Parks, Trails, & Natural Resources 1,229,865 707,309 58% 2,108,018 1,495,942 71%Recreation Services 6,880,444 5,296,375 77% 8,739,963 6,136,190 70%Police 39,888,051 29,334,948 74% 45,657,705 33,093,097 72%Transportation - 1,623 - - Grounds Maintenance 3,669,660 2,564,467 70% 4,565,148 3,167,552 69%Facilities Maintenance 3,548,864 2,336,845 66% 3,555,186 2,620,084 74%

Subtotal Non-Gen. Governmental 68,388,606 50,017,731 73% 80,826,645 57,098,016 71%General Governmental

Child Justice Center Support 360,156 270,117 75% 370,957 315,270 85%City Cable Programming 425,640 319,230 75% 511,520 383,643 75%Fire District #6 21,392 21,392 100% 23,250 23,235 100%Emergency Mgmt (CRESA) 145,811 109,358 75% 160,685 162,474 101%Air Pollution Control Authority 54,692 54,692 100% 55,786 55,832 100%Humane Society 268,914 181,484 67% 280,000 222,470 79%Animal Control 245,290 183,967 75% 250,000 240,420 96%Alcoholism Support 45,259 22,847 50% 40,000 23,141 58%Regional Transp Council 21,300 21,300 100% 45,700 45,623 100%Election Support 184,349 3,000 2% 200,000 - 0%Celebrate Freedom - - - - AWC, Chamber of Commerce Memberships 86,309 75,699 88% 80,818 86,484 107%Opportunity Reserve 165,831 73,845 45% 177,922 26,646 15%Miscellaneous 1,283,608 931,140 73% 214,384 182,138 85%Real Estate Transactions 254,250 - 0% 7,789,571 5,421,987 70%Public Defender 1,351,973 1,121,118 83% 1,466,298 1,057,552 72%County Jail Costs 3,769,359 752,165 20% 4,348,854 4,869 0%County Corrections Costs 1,385,759 951,572 69% 1,087,792 913,878 84%County District Court Costs 1,015,954 572,193 56% 1,166,990 537,369 46%General Obligation Debt Payment 5,908,141 749,339 13% 5,244,666 649,741 12%General Govt Support 9,558,103 2,534,570 27% 10,109,885 4,727,220 47%Street Support (formerly in General Support) 14,648,451 9,975,976 68% 13,599,744 10,257,047 75%Fire Support (formerly in General Support) 30,886,091 30,886,091 100% 29,100,904 21,334,488 73%LEOFF Pension Support (formerly in General Suppor 2,835,996 2,126,997 75% 2,900,000 2,175,003 75%

Subtotal General Govermental 74,922,627 51,938,091 69% 79,225,725 48,846,531 62%Total General Fund 143,311,233 101,955,821 71% 160,052,370 105,944,547 66%

SPECIAL REVENUE FUNDSStreet 17,065,151 12,029,775 70% 21,194,520 11,653,080 55%Street Initiative- NEW Fund 748,655 486,220 65% 4,719,183 3,333,746 71%Fire Operating Fund 37,848,546 27,389,154 72% 42,919,745 31,114,531 72%Fire Capital Fund 785,964 756,466 96% 2,376,285 1,209,577 51%AMR Compliance Fund (New) 516,908 341,424 66% 638,502 278,666 44%Drug Enforcement and Investigative Funds 334,745 12,985 4% 424,147 160,445 38%Community Development Block Grant 2,569,835 1,898,636 74% 2,010,388 1,330,477 66%Tourism 1,177,457 773,004 66% 2,529,137 1,331,499 53%


ATTACHMENT A 2016 2016 % of 2017 2017 % ofExpenditures Year End September Year End Budget September BudgetAffordable Housing - - 5,993,843 30,982 1%Criminal Justice/LLEBG 160,705 96,087 60% 700,470 494,296 71%Real Estate Excise Tax - I 3,597,901 507,713 14% 3,340,950 1,650,431 49%Transportation Special Revenue 2,279,917 648,860 28% 3,855,029 519,902 13%Parks & Recreation Special Revenue 32,767 17,704 54% 30,214 15,088 50%Parks Construction - Residual REET 17,527 17,527 100% - - Downtown Initiatives 102,549 83,841 82% 1,155,026 87,826 8%VNHR Properties 662,435 150,643 23% 1,042,080 229,770 22%Senior Messenger 248,967 211,239 85% 352,640 189,189 54%TIF Funds 2,082,380 292,072 14% 4,038,352 137,635 3%PIF Funds 839,761 629,425 75% 7,926,198 1,011,028 13%

DEBT SERVICE FUNDSG O Debt Service Fund 20,239,463 10,981,379 54% 10,853,680 1,954,607 18%L I D Debt Fund 67,878 67,878 100% 54,925 39,925 73%g ( gCAPITAL FUNDS2011 Bond Capital Fund - Waterfront 313,075 108,712 35% 4,343,208 186,899 4%Transportation Capital Fund 4,918,878 3,575,554 73% 35,379,954 10,267,542 29%Capital Streets Initiative Fund (NEW) 999,039 448,326 45% 1,654,715 180,554 11%Fire Acquisition Fund 2,498,128 1,282,622 51% 12,527,904 7,890,524 63%Capital Improvement Fund 3,491,233 2,671,605 77% 7,008,585 5,369,244 77%VNHR Property Capital 5,369,326 2,466,437 46% 4,577,939 4,539,932 99%2015 Bond Capital Fund - VNHR (New) 4,649,016 - 0% - 41,181 Parks Construction Fund (Capital Projects only) 7,139,254 2,479,772 35% 28,511,255 5,621,412 20%City Tree Reserve Fund 23,332 22,415 96% 45,481 16,639 37%Drainage Construction Fund 1,461,915 461,073 32% 3,702,826 600,328 16%Systems Development Reserves 2,500,000 - 0% 6,750,000 - 0%Water Construction Fund 6,435,864 5,107,960 79% 26,181,994 7,982,017 30%Utility Customer Assistance 18,673 18,673 100% 30,000 1,846 Water Revenue Bond Debt Service Fund 645,158 645,158 100% 103,817 97,603 94%Sewer Revenue Bond Debt Service Fund 10,769,067 10,769,067 100% 7,548,447 7,178,197 95%Sewer System Development 2,500,000 - 0% 6,800,000 - 0%Sewer Construction Fund 2,382,843 1,812,573 76% 17,396,878 4,326,939 25%

ENTERPRISE FUNDSStorm Water 12,480,541 8,638,107 69% 16,476,097 11,115,346 67%Water 40,790,658 22,498,497 55% 43,923,411 24,750,229 56%Sewer 40,608,576 27,519,224 68% 54,227,679 29,162,771 54%Building Inspection 4,886,350 3,712,334 76% 5,776,125 3,747,631 65%Solid Waste 2,357,066 1,630,384 69% 3,398,170 1,732,695 51%Parking 3,063,941 1,493,625 49% 3,762,716 2,076,871 55%Tennis Center 1,241,826 947,535 76% 1,156,814 863,510 75%Airpark 983,798 433,756 44% 899,090 662,228 74%

INTERNAL SERVICE FUNDSFacilities Asset Mgmt & Replacement Reserve Fund 6,352,481 4,200,185 66% 5,076,633 592,458 12%Equipment Services Operations Fund 4,905,000 3,742,814 76% 7,506,363 4,788,847 64%Equipment ER&R Capital 1,904,782 1,463,427 77% 7,244,831 1,318,672 18%Technology ER&R 1,060,355 755,615 71% 6,513,195 1,683,050 26%Risk Fund 5,150,682 2,899,655 56% 5,060,543 1,942,636 38%Internal Administrative Services Fund (New) Finance 4,921,022 3,611,537 73% 5,891,213 3,840,011 65% Information Technology 5,999,301 4,565,598 76% 6,685,444 4,569,128 68%


ATTACHMENT A 2016 2016 % of 2017 2017 % ofExpenditures Year End September Year End Budget September Budget Human Resources 1,627,801 1,169,877 72% 1,925,395 1,360,534 71% General Services 191,972 132,884 69% 327,723 206,719 63%Benefits Fund 9,877,303 7,274,334 74% 10,012,206 7,951,328 79%Self Insured Health Insurance (New) 6,166,580 4,422,510 72% 7,113,357 4,849,550 68%Print Shop & Mail Services 165,676 138,760 84% - -

AGENCY FUNDSSWAT Team 145,912 104,853 72% 264,268 107,284 41%Police Pension 944,471 732,814 78% 1,091,234 719,687 66%Fire Pension 1,445,796 1,098,692 76% 1,810,754 917,342 51%Cable TV 991,071 702,723 71% 1,310,352 895,162 68%PEG 517,072 240,234 46% 692,680 228,489 33%Transportation Benefits District (NEW) - - 1,731,165 1,498,374 87%Notes

2. Operating transfers between funds are included within this report.3. In 2015, Finance, Information Technology, Human Resources and General Services moved from General Fund to an Intenral Administrativce Services Fund.

1. This report was prepared using the methodology prescribed under the basis of budgeting, depreciation, appreciation costs have be


SEP-16 SEP-17A A B A

ATTACHMENT B ADJ-16 SEP-16 JUL-17 SEP-17Revenues 2016 2016 % of 2017 2017 % of

Year End September Year End Budget September BudgetGENERAL FUNDTax Revenue

Property Tax 44,917,701 25,903,997 58% 45,793,636 26,532,570 58%Sales Tax 36,737,708 26,871,744 73% 34,813,368 28,609,279 82%Electrical Tax 7,952,266 6,729,921 85% 8,172,775 6,875,616 84%Natural Gas 2,405,698 1,837,596 76% 2,781,475 2,065,283 74%Telephone 4,120,340 3,114,813 76% 4,138,824 3,191,060 77%Cable Franchise Fee 2,093,791 1,523,841 73% 1,862,190 1,600,829 86%Water/Sewer/Storm Water 18,456,731 13,628,012 74% 21,330,241 16,748,246 79%Solid Waste Utility Tax 4,403,448 3,251,613 74% 4,168,886 3,403,670 82%Gambling and Leasehold Taxes 683,387 431,861 63% 647,775 493,407 76%

Subtotal Tax Revenue 121,771,070 83,293,398 68% 123,709,170 89,519,959 72%Business Licenses 1,206,219 881,660 73% 1,821,733 1,308,817 72%Grants & Entitlements 682,623 379,856 56% 1,076,659 378,893 35%State Shared Revenues 4,058,159 3,337,425 82% 3,573,410 3,143,366 88%Parks Contract with Clark County 81,710 51,708 63% 75,000 95,204 127%Charges for Services

Planning Permits 865,873 761,324 88% 701,326 806,714 115%Recreation Program Fees 4,166,722 3,406,849 82% 4,023,000 3,122,918 78%Interfund Service Charges 4,777,379 2,459,030 51% 5,128,905 3,621,652 71%Other Charges & Services 925,853 635,051 69% 860,000 705,611 82%

Subtotal Charges for Services 10,735,827 7,262,255 68% 10,713,231 8,256,895 77%District Court 1,629,866 1,226,673 75% 2,262,156 1,570,811 69%Miscellaneous 929,048 731,781 79% 684,321 955,767 140%Lease Revenue (short and long-term) 3,566,102 2,764,757 78% 1,894,151 2,314,952 122%Operating Transfers 744,765 117,440 16% 1,386,325 523,969 38%

Total General Fund 145,405,390 100,046,953 69% 147,196,156 108,068,633 73%

SPECIAL REVENUE FUNDSStreet Fund

Real Estate Excise Tax 3,570,349 2,531,673 71% 2,790,449 3,125,900 112%Motor Vehicle Fuel Tax 3,556,557 2,621,167 74% 3,616,882 2,651,932 73%Permits and Misc. 1,333,673 807,216 61% 1,112,228 841,889 76%Operating Transfers 11,876,066 8,906,429 75% 11,063,177 8,302,295 75%

Total Street Fund 20,336,645 14,866,485 73% 18,582,737 14,922,017 80%Operating Street Initiative Fund (NEW) 1,494,477 1,356,246 91% 4,463,580 3,423,571 77%

Operating Fire FundService Charges-Fire Dist. #5 8,514,974 4,257,487 50% 9,830,606 5,015,236 51%Grant Revenue 17,045 1,290 8% 414,138 287,327 n/aPermit/Other Fees and Misc 1,054,256 859,374 82% 1,958,212 1,150,930 59%Operating Transfers 25,916,940 25,886,091 100% 29,311,121 21,334,488 73%

Total Operating Fire Fund 35,503,214 31,004,242 87% 41,514,077 27,787,980 67% Fire Equipment Fund 1,310,702 932,665 71% 1,081,679 799,441 74%

AMR Compliance Fund (New) 681,844 568,769 83% 681,000 631,272 93%Other Special Revenue Funds

Drug Enforcement 295,815 213,907 72% 124,900 184,567 148%Community Development Block Grant 2,564,205 1,901,077 74% 3,597,863 1,379,971 38%Tourism 2,330,616 1,639,369 70% 1,869,689 1,762,388 94%Affordable Housing - - 6,000,000 3,478,180 58%Criminal Justice/LLEBG 250,435 186,363 74% 242,177 195,692 81%

Transportation Special Fund 2,642,083 1,960,093 74% 2,610,000 1,981,376 76%Real Estate Excise Tax - I 3,464,231 2,417,873 70% 2,562,729 2,983,210 116%Parks & Recreation Special Revenue Fund 21,807 5,226 24% 15,200 15,296 101%Downtown Initiatives 179,435 134,505 75% 1,175,733 136,549 12%VNHR Properties 566,481 215,786 38% 527,456 215,224 41%Senior Messenger 284,284 220,750 78% 287,000 188,539 66%TIF Funds 1,822,547 1,404,569 77% 1,794,796 1,883,188 105%PIF Funds 1,507,145 1,105,282 73% 1,130,029 1,753,711 155%

Attachment B



Year End September Year End Budget September BudgetParkhill Cemetery Fund 3,545 12,856 363% 17,600 18,489 105%

DEBT SERVICE FUNDSG O Debt Service Fund 20,239,463 10,984,156 54% 10,853,681 1,954,607 18%L I D Fund 33,905 770 2% - 6,182 CAPITAL FUNDS2011 Bond Capital Fund - Waterfront 19,799 21,899 n/a - 32,195 n/aTransportation Capital Fund 5,158,734 2,455,762 48% 34,328,514 6,996,878 20%Capital Streets Initiative Fund (NEW) 2,052,575 549,617 27% 1,654,715 1,048,457 63%Capital Improvement Fund 2,878,202 484,349 17% 3,075,769 3,003,387 98%Fire Acquisition Fund 11,142,240 11,146,485 100% 3,916,900 738,698 19%VNHR Property Capital 6,107,863 785,934 13% 1,526,443 1,269,746 83%Parks Construction Fund (Capital Projects only) 6,201,153 1,861,048 30% 18,251,710 3,813,838 21%City Tree Reserve Fund 144,517 86,874 60% 30,000 51,131 170%Drainage Construction Fund 1,484,885 90,151 6% 3,778,650 2,017,309 53%Water/Sewer Capital Reserves 13,257 14,953 113% 14,000 23,730 169%Systems Development Reserves 3,531,230 3,032,634 86% 3,265,000 2,685,827 82%Water Construction Fund 14,635,836 208,665 1% 17,665,000 1,963,528 11%SCIP Fund 632,209 461,177 73% 685,000 408,617 60%Utility Customer Assistance 15,696 5,917 38% 13,000 (3,855) n/aWater Revenue Bond Debt Service Fund 555,282 536,483 97% 103,817 85,545 82%Sewer Revenue Bond Debt Service Fund 10,258,981 8,887,576 87% 7,558,447 6,233,579 82%Debt Service Reserves 8,106 9,143 113% 8,200 14,509 177%Sewer Utility Fund 45,577,108 32,048,477 70% 49,429,819 33,747,559 68%Sewer System Development 3,619,458 3,126,203 86% 3,210,000 2,602,992 81%Sewer Construction Fund 4,600,030 21,865 0% 11,300,000 1,114,853 10%ENTERPRISE FUNDSStorm Water

Storm Drainage Fees 13,504,975 9,655,144 71% 14,515,793 10,772,040 74%Private Capital Contributions 458,820 271,218 59% - - Miscellaneous 375,593 268,697 72% 244,079 249,315 102%

Total Storm Water Fund 14,339,388 10,195,059 71% 14,759,872 11,021,355 75%Water

Residential Water Sales 24,452,333 18,616,867 76% 25,095,327 20,603,882 82%Commercial Water Sales 5,082,179 3,830,503 75% 5,509,025 4,082,282 74%Governmental Water Sales 998,001 777,554 78% 1,054,938 985,312 93%

Subtotal Water Sales 30,532,514 23,224,925 76% 31,659,290 25,671,476 81%Private Capital Contributions 2,815,152 1,315,080 47% 240,000 1,406,518 n/aInterfund Transfers 2,835,055 34,062 1% 2,972,748 33,323 1%Indirect Cost Plan Revenue 1,555,384 1,176,631 76% 1,932,385 1,412,604 73%Miscellaneous 1,820,842 1,371,407 75% 1,918,071 1,605,086 84%

Total Water Fund 39,558,947 27,122,106 69% 38,722,494 30,129,008 78%Sewer

Residential Sewer Charges 27,034,852 20,258,631 75% 27,450,622 21,710,797 79%Commercial, Industrial Sewer Charges 12,784,902 9,447,556 74% 12,436,576 9,771,274 79%Governmental Sewer Charges 1,299,665 963,453 74% 1,270,931 1,272,508 100%

Subtotal Sewer Charges 41,119,419 30,669,639 75% 41,158,129 32,754,579 80%Private Capital Contributions 996,489 950,982 95% 150,000 264,242 176%Interfund Transfers 2,850,508 - 0% 7,300,000 - 0%Miscellaneous 610,692 427,856 70% 821,690 666,911 81%

Total Sewer Fund 45,577,108 32,048,477 70% 49,429,819 33,685,732 68%Building Inspection

Permits 3,702,305 2,983,380 81% 3,754,851 2,694,628 72%Miscellaneous 158,949 130,896 82% 161,794 155,344 96%Interfund Services 398,093 248,881 63% 404,279 216,209 53%

Total Building Fund 4,259,347 3,363,156 79% 4,320,924 3,066,182 221%Solid Waste

Solid Waste Utility Tax 1,127,889 849,000 75% 1,122,373 897,866 80%Service Charges-Recycling 676,497 331,992 49% 632,419 112,472 18%Miscellaneous 104,259 29,919 29% 42,450 42,951 101%

Attachment B



Year End September Year End Budget September BudgetTotal Solid Waste Fund 1,908,646 1,210,912 63% 1,797,242 1,053,290 59%

ParkingParking Fines 534,974 405,693 76% 405,500 400,235 99%Parking Meters & Lots 1,734,500 1,291,359 74% 3,158,829 1,880,525 60%Miscellaneous (46,461) 8,373 n/a 35,300 106,305 n/aOperating Transfers 1,245,540 - 0% - -

Total Parking Fund 3,468,553 1,705,424 49% 3,599,629 2,387,066 66%Tennis Center

Membership Fees 808,240 626,766 78% 822,000 559,257 68%Instruction and Miscellaneous 99,932 15,610 16% 24,000 11,604 48%Operating Transfers 334,794 278,193 83% 323,009 161,505 50%

Total Tennis Center Fund 1,242,966 920,569 74% 1,169,009 732,365 63%Other Enterprise Funds

Pearson Airfield 744,106 525,829 71% 796,255 578,022 73%Utility Customer Assistance 15,696 5,917 38% 13,000 (3,855) n/a

INTERNAL SERVICE FUNDSFacilities Asset Mgmt & Replacement Reserve Fund 2,278,907 1,390,693 61% 4,256,451 3,278,880 77%Equipment Services Operations Fund 5,067,610 3,602,776 71% 8,015,325 4,640,158 58%Equipment Services Capital Fund 3,498,562 2,694,927 77% 2,942,491 3,122,773 106%Computer Repair & Replacement 3,634,663 2,259,373 62% 2,953,860 2,110,316 71%Self-Insured Worker's Comp & Liability Fund 3,653,845 2,704,467 74% 6,023,717 4,586,958 76%Internal Administrative Services Fund 15,052,821 8,539,517 57% 15,842,843 10,918,514 69%Benefits Fund 9,869,526 7,374,192 75% 10,000,412 7,745,851 77%Self-Insured Health Insurance Fund 7,169,740 5,368,077 75% 7,210,634 5,494,600 76%Mail Services Fund 229,457 171,905 75% - - n/aAGENCY FUNDSSWAT Team 163,787 127,952 78% 219,268 231,695 106%Police Pension 1,090,271 817,340 75% 1,100,000 887,033 81%Fire Pension 1,984,793 1,543,948 78% 2,032,746 1,546,106 76%Cable TV 947,627 620,245 65% 1,275,488 781,106 61%PEG 749,491 561,869 75% 765,110 573,080 75%Notes1. This report was prepared using the methodology prescribed under the basis of budgeting.2. Operating transfers between funds are included within this report.

Attachment B


City of VancouverInvestment Activity

Third Quarter of 2017(Dollars in thousands)

As of Percent of As of Percent of6/30/2017 Portfolio 9/30/2017 Portfolio

State Investment Pool 70,969 21.9% 77,466 24.6%Clark County Investment Pool 407 0.1% 606 0.2%U.S. Agencies 249,789 77.1% 234,808 74.5%Corporate Bonds (Pension Fund) 510 0.2% 504 0.2%Municipal Bonds 2,269 0.7% 1,761 0.6%

Total by Investment Type 323,944$ 100.0% 315,145$ 100.0%

As of Percent of As of Percent of6/30/2017 Portfolio Cumulative 9/30/2017 Portfolio Cumulative

Overnight 71,376 22.0% 22.0% 78,072 24.8% 24.8%One Month 5,000 1.5% 23.6% 15,000 4.8% 29.5%Two to Six Months 42,265 13.0% 36.6% 21,753 6.9% 36.4%Six Months to One Year 59,958 18.5% 55.1% 84,978 27.0% 63.4%One to Five Years 145,344 44.9% 100.0% 115,342 36.6% 100.0%

Total by Length of Maturity 323,944$ 100.0% 315,145$ 100.0%

12 Months 12 Months

Attachment C


Investment Activity3rd Quarter 2017

Issuer Type of InvestmentTransaction

DateMaturity

Date Purchase or

Deposit Redemption or

Withdrawal

Effective Interest

Rate

JulyClark County Treasurer* Local Government Investment Pool 366.29 160,895.00 1.05%FFCB Federal Agency Coupon Securities 7/3/2017 5,000,000.00 0.68%FFCB Federal Agency Coupon Securities 7/14/2017 5,000,000.00 1.00%Washington State Treasurer* Local Government Investment Pool 17,824,708.07 18,000,000.00 1.14%

22,825,074.36 23,160,895.00

AugustClark County Treasurer* Local Government Investment Pool 257.67 44,829.39 1.05%FHLMC Federal Agency Coupon Securities 8/25/2017 5,000,000.00 0.80%Washington State Treasurer* Local Government Investment Pool 16,442,962.15 17,000,000.00 1.14%

16,443,219.82 22,044,829.39

SeptemberClark County Treasurer* Local Government Investment Pool 1,000,189.37 595,710.28 1.05%Douglas County Municipal Bonds Zero Coupon 9/1/2017 500,000.00 1.45%FHLMC Federal Agency Coupon Securities 9/28/2017 5,000,000.00 0.80%FNMA Federal Agency Coupon Securities 9/20/2017 5,000,000.00 1.00%Washington State Treasurer* Local Government Investment Pool 20,228,892.05 13,000,000.00 1.14%

21,229,081.42 24,095,710.28 * Investments in the County and State Local Government Investment Pools can change daily, therefore no purchase dates are shownand the maturity dates are the last date for each reporting period.

Attachment C


City of Vancouver Investment Portfolio Including Call DatesDate: 9/30/2017

Purchase Maturity Par Market Book Percent Cumulative Interest EffectiveCUSIP Issuer Date Date Value Value Value of Portfolio Percent Rate Yield CallableCLARK CO LGIP Clark County LGIP 606,014.59 606,014.59 606,014.59 0.19% 0.19% 0.990 1.004 0WA STATE LGIP Washington State LGIP 77,466,014.78 77,466,014.78 77,466,014.78 24.58% 24.58% 1.095 1.110 03134G7V24 Federal Home Loan Mortgage Co. 10/27/2015 10/27/2017 5,000,000.00 4,999,250.00 5,000,000.00 1.59% 1.59% 0.718 0.728 Callable3134G73X7 Federal Home Loan Mortgage Co. 10/30/2015 10/27/2017 5,000,000.00 4,999,350.00 5,000,000.00 1.59% 1.59% 0.710 0.720 1XCall 4/163134G7V24 Federal Home Loan Mortgage Co. 10/29/2015 10/27/2017 5,000,000.00 4,999,250.00 4,999,954.74 1.59% 1.59% 0.752 0.763 Callable3134G82C2 Federal Home Loan Mortgage Co. 11/24/2015 11/24/2017 5,000,000.00 4,998,400.00 5,000,000.00 1.59% 1.59% 0.888 0.900 Callable3134G8ML0 Federal Home Loan Mortgage Co. 02/24/2016 11/24/2017 5,000,000.00 4,999,100.00 5,000,000.00 1.59% 1.59% 0.918 0.931 Callable764258UL1 City of Richland, WA 08/04/2015 12/01/2017 995,000.00 998,731.25 998,454.33 0.32% 0.32% 0.878 0.890 Bullet962526EK1 Whatcom County School District 07/23/2015 12/01/2017 250,000.00 250,477.50 250,431.43 0.08% 0.08% 0.937 0.950 Bullet369604BC6 General Electric Capital Corp 07/22/2016 12/06/2017 500,000.00 503,490.00 504,005.26 0.16% 0.16% 0.770 0.780 Bullet3136G1AZ2 Federal Nat'l Mtg. Assoc. 04/27/2017 01/30/2018 5,000,000.00 4,996,950.00 5,000,000.00 1.59% 1.59% 1.051 1.066 Callable3134G8L98 Federal Home Loan Mortgage Co. 02/26/2016 02/26/2018 5,000,000.00 4,994,900.00 5,000,000.00 1.59% 1.59% 1.036 1.050 Callable3137EAEA3 Federal Home Loan Mortgage Co. 02/13/2017 04/09/2018 5,000,000.00 4,986,200.00 4,995,322.60 1.59% 1.59% 0.918 0.930 Bullet3133EGUA1 Federal Farm Credit Bank 10/04/2016 04/12/2018 5,000,000.00 4,990,300.00 4,999,459.76 1.59% 1.59% 0.799 0.811 Bullet3130A7VL6 Federal Home Loan Bank 04/27/2016 04/27/2018 5,000,000.00 4,991,300.00 5,000,000.00 1.59% 1.59% 1.016 1.030 Quarterly Call3133EGG33 Federal Farm Credit Bank 02/09/2017 05/14/2018 5,000,000.00 4,987,500.00 4,992,623.85 1.58% 1.58% 0.957 0.970 Bullet3133EHGD9 Federal Farm Credit Bank 04/21/2017 05/21/2018 5,000,000.00 4,994,900.00 5,000,000.00 1.59% 1.59% 1.085 1.100 Bullet3135G0XA6 Federal Nat'l Mtg. Assoc. 05/05/2016 05/21/2018 5,000,000.00 4,990,150.00 5,000,000.00 1.59% 1.59% 1.016 1.030 Callable3130ABLY0 Federal Home Loan Bank 06/16/2017 06/15/2018 5,000,000.00 4,999,223.61 4,999,642.97 1.59% 1.59% 1.248 1.265 Bullet3134G9VF1 Federal Home Loan Mortgage Co. 03/07/2017 06/22/2018 5,000,000.00 4,990,850.00 5,000,000.00 1.59% 1.59% 1.145 1.161 Callable3130A8BD4 Federal Home Loan Bank 02/14/2017 06/29/2018 5,000,000.00 4,986,050.00 4,994,640.00 1.58% 1.58% 1.006 1.020 Bullet3130A8BD4 Federal Home Loan Bank 03/17/2017 06/29/2018 5,000,000.00 4,986,050.00 4,988,746.32 1.58% 1.58% 1.164 1.180 Bullet3130A8PZ0 Federal Home Loan Bank 03/22/2017 07/12/2018 5,000,000.00 4,981,000.00 5,000,000.00 1.59% 1.59% 1.120 1.136 Callable3135G0M42 Federal Nat'l Mtg. Assoc. 11/17/2016 07/13/2018 5,000,000.00 4,983,400.00 5,000,000.00 1.59% 1.59% 0.987 1.001 Callable3134G9X51 Federal Home Loan Mortgage Co. 07/27/2016 07/27/2018 5,000,000.00 4,986,500.00 5,000,000.00 1.59% 1.59% 0.986 1.000 Callable3134G9N60 Federal Home Loan Mortgage Co. 03/02/2017 07/27/2018 5,000,000.00 4,986,000.00 5,000,000.00 1.59% 1.59% 1.185 1.202 Callable3135G0L68 Federal Nat'l Mtg. Assoc. 10/24/2016 07/27/2018 5,000,000.00 4,977,200.00 5,000,000.00 1.59% 1.59% 0.911 0.923 Callable3130A6AE7 Federal Home Loan Bank 09/09/2016 09/14/2018 5,000,000.00 4,986,800.00 5,010,739.45 1.59% 1.59% 0.885 0.897 Bullet3130A6AE7 Federal Home Loan Bank 05/02/2017 09/14/2018 5,000,000.00 4,986,800.00 4,996,444.51 1.59% 1.59% 1.184 1.200 Bullet3130A9M24 Federal Home Loan Bank 10/03/2016 10/03/2018 5,000,000.00 4,982,350.00 5,000,000.00 1.59% 1.59% 0.927 0.940 Callable3137EAED7 Federal Home Loan Mortgage Co. 09/16/2016 10/12/2018 5,000,000.00 4,975,150.00 4,998,930.76 1.59% 1.59% 0.884 0.896 Bullet3133EFJP3 Federal Farm Credit Bank 04/08/2016 10/15/2018 5,000,000.00 4,988,050.00 5,000,000.00 1.59% 1.59% 1.085 1.100 Callable3135G0G64 Federal Nat'l Mtg. Assoc. 04/13/2017 10/29/2018 5,000,000.00 4,977,050.00 5,000,000.00 1.59% 1.59% 1.214 1.231 Callable3133EGA70 Federal Farm Credit Bank 11/04/2016 11/01/2018 5,000,000.00 4,971,400.00 5,000,000.00 1.59% 1.59% 0.957 0.970 1XCall 11/173134GAUT9 Federal Home Loan Mortgage Co. 11/15/2016 11/15/2018 5,000,000.00 4,972,900.00 5,000,000.00 1.59% 1.59% 0.986 1.000 Callable3133EGJ55 Federal Farm Credit Bank 11/16/2016 11/16/2018 5,000,000.00 4,973,050.00 5,000,000.00 1.59% 1.59% 0.967 0.980 Callable592240UD5 Tacoma Metropolitan Park Distr 12/01/2016 12/01/2018 500,000.00 511,435.00 511,757.08 0.16% 0.16% 0.947 0.960 Bullet3133EF4Y0 Federal Farm Credit Bank 07/14/2017 04/26/2019 5,000,000.00 4,966,333.33 4,979,899.14 1.58% 1.58% 1.381 1.400 Bullet3133EGHD0 Federal Farm Credit Bank 06/27/2016 06/27/2019 5,000,000.00 4,958,900.00 5,000,000.00 1.59% 1.59% 1.105 1.120 Callable3136G3TD7 Federal Nat'l Mtg. Assoc. 06/28/2016 06/28/2019 5,000,000.00 4,963,600.00 5,000,000.00 1.59% 1.59% 1.184 1.200 Callable3133EGJX4 Federal Farm Credit Bank 07/08/2016 07/05/2019 5,000,000.00 4,957,700.00 5,000,000.00 1.59% 1.59% 1.065 1.080 Callable3135G0N33 Federal Nat'l Mtg. Assoc. 05/16/2017 08/02/2019 5,000,000.00 4,941,050.00 4,952,667.09 1.57% 1.57% 1.381 1.400 Bullet3136G3K38 Federal Nat'l Mtg. Assoc. 05/22/2017 08/02/2019 5,000,000.00 4,968,250.00 5,000,000.00 1.59% 1.59% 1.332 1.350 Callable3133EGAW5 Federal Farm Credit Bank 05/19/2016 08/19/2019 5,000,000.00 4,958,650.00 5,000,000.00 1.59% 1.59% 1.233 1.250 Callable3135G0P23 Federal Nat'l Mtg. Assoc. 05/10/2017 08/23/2019 4,900,000.00 4,873,393.00 4,900,000.00 1.55% 1.55% 1.480 1.500 Callable3136G36G5 Federal Nat'l Mtg. Assoc. 09/27/2016 09/27/2019 5,000,000.00 4,945,150.00 5,000,000.00 1.59% 1.59% 1.233 1.250 Callable3135G0Q30 Federal Nat'l Mtg. Assoc. 11/14/2016 09/27/2019 5,000,000.00 4,962,450.00 5,000,000.00 1.59% 1.59% 1.199 1.215 Callable3130A8NR0 Federal Home Loan Bank 07/13/2016 10/11/2019 5,000,000.00 4,948,600.00 5,000,000.00 1.59% 1.59% 1.141 1.157 Callable3136G4GE7 Federal Nat'l Mtg. Assoc. 11/15/2016 11/15/2019 5,000,000.00 4,933,050.00 4,999,022.22 1.59% 1.59% 1.163 1.179 1XCall 11/173130AA2X5 Federal Home Loan Bank 11/22/2016 11/22/2019 5,000,000.00 4,958,200.00 5,000,000.00 1.59% 1.59% 1.341 1.360 Callable3133EGSA4 Federal Farm Credit Bank 08/24/2016 08/24/2020 5,000,000.00 4,936,500.00 5,000,000.00 1.59% 1.59% 1.302 1.320 Callable3133EGQS7 Federal Farm Credit Bank 08/10/2016 11/10/2020 5,000,000.00 4,881,250.00 5,000,000.00 1.59% 1.59% 1.381 1.400 Callable3133EGEU5 Federal Farm Credit Bank 05/31/2017 12/14/2020 5,000,000.00 4,955,200.00 5,000,000.00 1.59% 1.59% 1.628 1.650 Callable

Average Maturity: 0.88 Years Total: 315,144,770.88$

Attachment C


City of VancouverOutstanding Debt - General Obligation BondsThird Quarter 2017

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 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 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 BondsThird Quarter 2017

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 9,795,000 3.998% 6/1/2020

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

42,520,000 4,785,000 4.037% 6/1/2018

14,580,000$


quarterly financial report q3, 2017 - vancouver, washington · quarterly financial report third...

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