QUARTERLY FINANCIAL REPORT 3rd Qtr FY14-15 PERFORMANCE AT A GLANCE GENERAL FUND REVENUE Economic Indicators General Fund Revenue Quarterly Analysis General Fund Revenue Category Analysis Sales Tax (& collection detail) Franchise Fees Primary Property Tax Revenue Detail by State Shared Revenue Category Licenses & Permits Charges for Services Other Revenues GENERAL FUND EXPENDITURE YEAR TO DATE COMPARED TO HISTORICAL % REFERENCE POSITIVE Page 2 Page 3 POSITIVE Page 3 POSITIVE Page 4 POSITIVE Page 5 POSITIVE Page 5 POSITIVE Page 6 POSITIVE Page 6 POSITIVE Page 7 POSITIVE Page 7 YEAR TO DATE COMPARED TO BUDGET % General Fund Expenditure + Enc. Analysis by Function and by Expenditure Category Mayor & Council City Clerk City Manager Law City Magistrate Expenditure Communications & Public Affairs Detail by Management Services Department Non-Departmental Transportation & Development Community & Neighborhood Services Police Fire, Health & Medical (including Fleet) OTHER FUNDS POSITIVE POSITIVE POSITIVE POSITIVE POSITIVE POSITIVE POSITIVE POSITIVE POSITIVE POSITIVE POSITIVE POSITIVE YEAR TO DATE COMPARED TO BUDGET % POSITIVE Water Fund Analysis Wastewater Fund Analysis Solid Waste Fund Analysis Airport Fund Analysis System Development & Impact Fee Analysis Highway User Revenue Fund Analysis Grants POSITIVE WARNING POSITIVE POSITIVE POSITIVE INFORMATIONAL REFERENCE Page 8 Page 8 Page 9 Page 9 Page 10 Page 10 Page 11 Page 11 Page 12 Page 12 Page 13 Page 13 Page 14 Page 14 REFERENCE Page 15 Page 15 Page 16 Page 16 Page 17 Page 18 Page 18 PERFORMANCE INDICATORS POSITIVE = Variance < 2% compared to historical trends or positive variance > 0% for % to budget. WARNING = Variance of 2 - 5% compared to historical trends. NEGATIVE = Variance of > 5% compared to historical trends or negative variance < 0% for % to budget. 1 4/27/2015 THE QUARTERLY FINANCIAL REPORT Report Objectives * Provide historical comparisons to identify trends or deviations from trends. * Develop performance benchmarks to measure positive and negative results. * Create an executive level report to highlight potential issues or concerns. What is Included in the Report The report emphasizes General Fund, with analysis of its revenue and each category of revenue, and the expenditures by department. Also included is a summary and analysis of Enterprise Funds, System Development Fee and Impact Fee Funds, the Highway User Tax Fund, and Grants. How to Read the Report * Page 1 serves as a table of contents and quick view of performance issues. * The benchmarks are Positive (navy colored), Warning (grey colored), and Negative (maroon colored), providing an initial indicator to determine if the category needs to be monitored closely in the upcoming period. * Performance indicators for General Fund revenue are comparing the percent of year-to-date actuals collected to total budget AND the budget prorated based on the historical trend (last four years) of average actual year-to-date collections. * Performance indicators for General Fund expenditures are based on whether they are within budget for the percent of year-to-date actuals expended plus encumbrances compared to the total budgeted expenditures. * Performance indicators for Enterprise Funds focus on the relationship between Operating Revenues and Operating Expenses (including debt service and indirect cost allocation) and the percentage of budget received/expended. ECONOMIC INDICATORS GROSS DOMESTIC PRODUCT (GDP) INTEREST RATES Real gross domestic product - the output of goods and services produced by labor and property located in the US. This table reflects the four most recent changes to the Federal Funds Rate by the Federal Reserve Board. The change to the GDP is an indicator of the general direction of the economy. Slow or negative growth will likely mean lower revenues for the City. Lowering the Federal Funds Rate is a way for the Federal Reserve Board to make it less expensive for banks to borrow money for loans and investments and (in theory) pumping additional dollars into the economy. Recent announcements state this rate will remain low through 2015. 2.0% April 30, 2008 1.5% October 8, 2008 1.0% October 29, 2008 0% - 0.25% December 16, 2008 to date First Quarter 2014 (revised estimate) Second Quarter 2014 (third estimate) Third Quarter 2014 (revised estimate) Fourth Quarter 2014 (third estimate) -2.1% 4.6% 5.0% 2.2% Source: US Department of Commerce Source: Federal Reserve Bank UNEMPLOYMENT National 5.6% 5.7% 5.5% 5.5% Dec-14 Jan-15 Feb-15 Mar-15 State of Arizona 6.7% 6.6% 6.5% 6.2% Phoenix Metro Area 5.6% 5.8% 5.4% 4.8% High unemployment rates are a reflection of a slow economy and the reduced demand for goods and services. The Phoenix Metro Area unemployment rate is typically lower than the national and state rates. Source: Arizona Department of Commerce, "Arizona Workforce" Newsletter CITY INVESTMENT PORTFOLIO BUILDING PERMITS Single-family building permits are an indicator of the general economy. The City splits its investment portfolio between two investment Higher numbers of permits indicate an active construction market and firms with a different mix of holdings at each firm to reduce risk. resultant home sales. Fiscal Year 2014-15 Rate of Return 3rd Quarter Fiscal Year State of Arizona Chandler Benchmark: 0.38% 0.53% Oct - Nov - Dec 2013 3,908 102 Wells Capital Management: 0.33% 0.45% Jan - Feb - Mar 2014 4,079 87 PFM: 0.41% 0.59% Apr - May - Jun 2014 5,120 147 Fiscal Year 2013-14 Rate of Return 3rd Quarter Fiscal Year Jul - Aug - Sep 2014 4,506 126 Benchmark: 0.11% 0.38% Oct - Nov - Dec 2014 3,850 105 Wells Capital Management: 0.15% 0.50% Jan - Feb - Mar 2015 Not available 195 PFM: 0.17% 0.49% The City's benchmark is the 0-3 year Merrill Lynch Treasury Index. Single family building permits are lower than the high-growth years, Rate of return includes interest earnings as well as both realized averaging 127 permits over the last six quarters. Fewer building permits and unrealized gains/(losses). generally equates to less new construction, lower permit fees revenues and lower sales tax revenues. Source: Investment Advisors Source: U.S. Census Bureau, City of Chandler Transportation & Development Department. 2 4/27/2015 GENERAL FUND REVENUE ANALYSIS: OVERALL GENERAL FUND REVENUES FY 2014-15 1st Qtr Jul - Sep 14 $ 43,033,811 FY 15 Actual Revenue $ % of Budget Rec'd *% of Budget Hist. Rec'd 45,719,281 23.4% 22.1% 2nd Qtr Oct - Dec 14 48,275,977 50,744,354 26.0% 26.3% 3rd Qtr Jan - Mar 15 48,367,363 53,851,256 27.6% 27.8% 4th Qtr Apr - Jun 15 55,738,909 $ 150,314,891 77.0% 76.2% Total $ 195,416,060 Actual Revenue FY 15 Actual Revenue Historical Trend Actual to Budget Dollars in Millions FY 15 Adopted Budget FY 14 70 60 50 40 30 20 10 - * Pro-rated based upon a four year Historical Trend of Actual Year-to-date Collections 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr POSITIVE General Fund revenue collections through the third quarter of FY 2014-15 are $10.6M (7.6%) above the budget based on historical trend and $6.7M (4.7%) higher than actual collections through the third quarter of FY 2013-14. Additionally, 77.0% of budgeted revenue has been received through the third quarter compared to 76.2% historically received through the third quarter, resulting in a positive performance indicator. Overall, General Fund revenue, led by continuing strong Sales Tax and License and Permit collections, are performing well due to higher consumer confidence and a steady stream of new development activity in Chandler. The following charts provide more detail regarding the various sources of General Fund revenues. GENERAL FUND REVENUES BY CATEGORY FY 2014-15 General Fund Collection History by Category % Revenue Categories Sales Tax Franchise Fees Primary Property Tax State Shared Revenue Licenses & Permits Charges for Services Other Revenues Indirect Cost Allocation FY 15 Adopted Budget $ 99,261,000 2,979,000 6,964,900 57,907,000 3,580,400 11,003,060 6,141,800 7,578,900 FY 15 Actual Revenue $ 80,501,292 1,949,992 4,101,221 41,363,026 3,667,308 8,595,458 4,452,419 5,684,175 % of Budget Rec'd to Date 81.1% 65.5% 58.9% 71.4% 102.4% 78.1% 72.5% 75.0% Total $ 195,416,060 $ 150,314,891 77.0% Indirect Costs 100% 4% 3% 7% 3% 4% 4% 6% 2% 4% 3% 6% 3% 4% 3% 6% 2% 25% 26% 28% 28% 4% 4% 4% 3% 80% 60% 2% 1% 2% 1% Other Revenues Charges for Services Licenses & Permits State Shared Revenue 40% 52% 52% 52% 54% Primary Property Taxes 20% Franchise Fees 0% FY12 $188M FY13 $196M FY14 $201M FY15 Q3 YTD $150M Local Sales Taxes POSITIVE This chart summarizes General Fund revenue collections by category for FY 2014-15. The graph helps us visualize what percentage each revenue category is to the total General Fund. As you can see, the percentage spread of revenue sources are relatively consistent over the years with local sales taxes and state shared revenues being the largest General Fund revenue sources. The next several pages provide an analysis of each revenue category except Indirect Cost Allocation (payments by the Water, Wastewater, Solid Waste, and Airport Enterprise Funds to the General Fund for City services provided for operations). 3 4/27/2015 GENERAL FUND REVENUE ANALYSIS (continued): SALES TAX REVENUE FY 2014-15 1st Qtr Jul - Sep 14 $ 2nd Qtr Oct - Dec 14 24,633,529 FY 15 Actual Revenue *% of Budget Hist. Rec'd 26,750,744 26.9% 27.1% 23,737,389 25,387,630 25.6% 26.3% 28,362,918 28.6% 27.7% 80,501,292 81.1% 81.1% 3rd Qtr Jan - Mar 15 25,008,062 4th Qtr Apr - Jun 15 25,882,020 $ % of Budget Rec'd Actual Revenue FY 15 Actual Revenue Historical Trend Actual to Budget 30 Dollars in Millions FY 15 Adopted Budget FY 14 25 20 15 10 Total $ 99,261,000 $ 5 * Pro-rated based upon a four year Historical Trend of Actual Year-to-date Collections 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr POSITIVE Figures above include General Fund Local Sales Tax Collections and the related revenues of License Fees, Audit Assessments, Penalties, and Interest. Sales tax collections for the third quarter of FY 2014-15 are $7.1M (9.7%) above the budget based on historical trend and $3.9M (5.1%) higher than FY 2013-14 actual collections through the third quarter. The percentage of budget received through the third quarter of 81.1% is equal to the percentage of budget historically received through the third quarter, resulting in a positive performance indicator. It should be noted that House Bill (HB) 2111 required the State of Arizona to begin licensing and collecting sales tax for all Cities beginning January 1, 2015, which the City anticipated to have a negative impact on sales tax revenue collections during FY 2014-15. This deadline was extended one year by the State to January 1, 2016. SALES TAX COLLECTION HISTORY 4 Years Actual Sales Tax by Category (in millions) Retail Contracting Utilities Real Property Rentals Restaurants & Bars Telecommunications Personal Prop. Rentals Hotels/Motels Publishing/Printing FY 15 Adopted Budget $ 46,500,000 9,450,000 12,500,000 10,000,000 9,000,000 3,500,000 2,100,000 2,000,000 250,000 Amusements Use Tax TOTAL SALES TAX FY 15 Actual % of Actual Revenue to Budget $ 36,351,663 78.2% 6,801,329 72.0% 10,373,781 83.0% 8,818,120 88.2% 7,327,100 81.4% 2,582,228 73.8% 2,378,955 113.3% 1,855,315 92.8% 199,019 79.6% 700,000 1,000,000 $ 97,000,000 $ % Chg from Prior Yr 5.4% -6.1% 8.0% 8.8% 6.4% -1.7% 9.0% 15.1% 4.7% 626,064 817,173 89.4% 81.7% 19.2% -5.7% 78,130,747 80.5% 5.1% 39 FY 10-11 FY 11-12 43 FY 12-13 45 FY 13-14 47 0 20 6 11 11 10 10 40 Retail Utilities Restaurants & Bars Personal Prop. Rentals Publishing/Printing Use Tax 9 8 4 12 10 12 12 60 9 4 11 9 4 11 10 4 80 100 120 Contracting Real Property Rentals Telecommunications Hotels/Motels Amusements The above figures reflect General Fund Sales Tax Collections by category and exclude the related revenues of License Fees, Audit Assessments, Penalties, and Interest. Sales Tax collections through the third quarter of FY 2014-15 were $6.5M (9.1%) above the budget based on historical trend and $3.8M (5.1%) higher than FY 2013-14 actual collections through the third quarter. Lower contracting and use tax collections reflect a slowdown of development through the third quarter of FY 2014-15 compared to through the third quarter of the last fiscal year. 4 4/27/2015 GENERAL FUND REVENUE ANALYSIS (continued): FRANCHISE FEE REVENUE FY 2014-15 1st Qtr Jul - Sep 14 $ 2nd Qtr Oct - Dec 14 58,142 2.0% 715,482 718,439 24.1% 24.4% 1,171,980 39.3% 34.2% 1,949,992 65.4% 60.6% 1,000,149 4th Qtr Apr - Jun 15 1,205,227 $ *% of Budget Hist. Rec'd 2.0% Jan - Mar 15 2,979,000 $ % of Budget Rec'd 59,573 3rd Qtr Total FY 15 Actual Revenue $ Actual Revenue FY 15 Actual Revenue Historical Trend Actual to Budget Dollars in Thousands FY 15 Adopted Budget FY 14 1,400 1,200 1,000 800 600 400 200 - * Pro-rated based upon a four year Historical Trend of Actual Year-to-date Collections 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr POSITIVE Franchise Fees are paid by Arizona Public Service (2% of Commercial and Residential Sales), Southwest Gas Corporation (2% of Commercial and Residential Sales), Cox Communications (5% of Gross Revenue), Air Products (2% of Gross Sales), and CenturyLink Cable Services (5% of Gross Sales). The historical trend (FY 2010-11 through FY 2013-14) reflects Qwest's exit from the cable business in FY 2010-11 and reentry in the market in FY 2012-13 as CenturyLink. Franchise fee collections through the third quarter of FY 2014-15 are $176,220 (9.9%) above the budget based on historical trend and $99,365 (5.4%) higher than FY 2013-14 actual collections through the third quarter due, in part, to a larger payment by Air Products. The percentage of budget received through the third quarter of 65.4% is well above the percentage of budget historically received through the third quarter, resulting in a positive performance indicator. PRIMARY PROPERTY TAX REVENUE FY 2014-15 1st Qtr Jul - Sep 14 $ 2nd Qtr Oct - Dec 14 49,033 FY 15 Actual Revenue $ % of Budget Rec'd *% of Budget Hist. Rec'd 32,045 0.5% 0.7% 3,498,525 3,587,964 51.5% 51.2% 3rd Qtr Jan - Mar 15 511,411 481,212 6.9% 7.5% 4th Qtr Apr - Jun 15 2,905,931 4,101,221 58.9% 59.4% Actual Revenue FY 15 Actual Revenue Historical Trend Actual to Budget 4 Dollars in Millions FY 15 Adopted Budget FY 14 3 2 1 Total $ 6,964,900 $ * Pro-rated based upon a four year Historical Trend of Actual Year-to-date Collections 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr POSITIVE This presentation only includes primary property taxes (supporting General Fund operations) and does not include secondary property taxes (supporting debt service on capital projects and recorded in the General Obligation Debt Service Fund). Property tax collections are due starting October 1st and March 1st each year. For FY 2014-15, Chandler will collect a primary tax rate of $0.2992 per $100 of assessed valuation and a secondary tax rate of $0.88 per $100 of assessed valuation for a total rate of $1.1792, representing a decrease of $0.0922 from the rates adopted for FY 2013-14. There is a two-year lag between the market value and recording assessed valuations, therefore, the City's primary assessed valuation increased 5.6% in FY 2014-15, the first year of increases in assessed valution since FY 2009-10. The reduction in the property tax rate helped offset the increased valuations to relieve citizens' property tax bills to the City. Primary property tax collections through the third quarter of FY 2014-15 are $42,252 (1.0%) above the budget based on historical trend and $224,818 (-5.2%) lower than FY 2013-14 actual collections through the third quarter. The majority of collections come in the second quarter since the first half of the property tax bills are due in October. The performance indicator is positive because the difference between percentage of budget received through the third quarter and percentage of historical budget received through the third quarter is less than 2%. 5 4/27/2015 GENERAL FUND REVENUE ANALYSIS (continued): STATE SHARED REVENUE FY 2014-15 1st Qtr Jul - Sep 14 $ 12,057,349 FY 15 Actual Revenue $ % of Budget Rec'd *% of Budget Hist. Rec'd 12,041,196 20.8% 21.0% 2nd Qtr Oct - Dec 14 13,880,616 14,637,551 25.3% 24.4% 3rd Qtr Jan - Mar 15 14,846,903 14,684,279 25.4% 26.2% 4th Qtr Apr - Jun 15 17,122,132 Total $ 57,907,000 $ 41,363,026 71.5% Actual Revenue FY 15 Actual Revenue Historical Trend Actual to Budget Dollars in Millions FY 15 Adopted Budget FY 14 18 16 14 12 10 8 6 4 71.6% 2 - * Pro-rated based upon a four year Historical Trend of Actual Year-to-date Collections 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr POSITIVE -- State Shared Sales Tax: The state sales tax rate is currently 5.6%, of which a portion of the various categories of sales tax are distributed to cities and towns based on population as state shared sales tax. Collections through the third quarter of FY 2014-15 are $313,890 (2.3%) above the budget based on historical trend and $485,771 (3.6%) higher than FY 2013-14 actual collections through the third quarter. This revenue category reflects a small but steady growth in Arizona's overall economy. -- Vehicle License Tax: Cities and towns receive 25% of the net revenues collected for vehicle licensing within their county from the state. The respective city shares are determined by the proportion of city population to total incorporated population of the county. Collections through the third quarter of FY 2014-15 are $264,443 (4.7%) above the budget based on historical trend and $1,708 (-0.03%) lower than FY 2013-14 actual collections through the third quarter. -- Urban Revenue Sharing: Fifteen percent (15%) of the 2012 State income tax collection is distributed to cities and towns as urban revenue sharing based upon population and is known for budget purposes since there is a two year lag in distribution. Collections through the third quarter of FY 2014-15 are $175 (less than 0.01%) below the budget based on historical trend and $1.7M (8.4%) higher than FY 2013-14 actual collections through the third quarter. The overall state shared revenue performance indicator is positive because the difference between the percentage of budget received through the third quarter and the percentage of historical budget received through the third quarter is less than 2%. LICENSES & PERMITS REVENUE FY 2014-15 1st Qtr Jul - Sep 14 1,169,528 32.7% 18.7% 1,040,699 29.1% 30.4% 3rd Qtr Jan - Mar 15 931,678 1,457,081 40.7% 32.5% 4th Qtr Apr - Jun 15 1,245,364 3,667,308 102.5% 81.6% 3,580,400 $ *% of Budget Hist. Rec'd 869,232 $ 534,126 % of Budget Rec'd 2nd Qtr Oct - Dec 14 Total $ FY 15 Actual Revenue $ * Pro-rated based upon a four year Historical Trend of Actual Year-to-date Collections Actual Revenue FY 15 Actual Revenue Historical Trend Actual to Budget Dollars in Thousands FY 15 Adopted Budget FY 14 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr POSITIVE This category includes revenue for various licenses: transaction privilege sales tax, alcoholic beverages, peddlers and solicitors, secondhand and junk dealers, amusements, and professional/occupational licenses, as well as cable license application fees. In addition, revenue from building, alarm, and fiber optic permits are included. License and permit collections through the third quarter of FY 2014-15 are $1.3M (57.1%) above the budget based on historical trend and $144,857 (4.1%) above FY 2013-14 actual collections through the third quarter. Budgeted amounts have been kept at moderate levels since it is difficult to predict the timing of new development, but this category is performing very strong and exceeded expectations through the third quarter, resulting in a positive performance indicator. 6 4/27/2015 GENERAL FUND REVENUE ANALYSIS (continued): CHARGES FOR SERVICES REVENUE FY 2014-15 1st Qtr Jul - Sep 14 $ 2,420,101 FY 15 Actual Revenue $ 2,618,345 % of Budget Rec'd *% of Budget Hist. Rec'd 23.8% 24.3% 2nd Qtr Oct - Dec 14 2,363,036 2,306,054 21.0% 23.7% 3rd Qtr Jan - Mar 15 2,541,659 3,671,059 33.4% 25.5% 4th Qtr Apr - Jun 15 3,678,264 Total $ 11,003,060 $ 8,595,458 78.2% Actual Revenue FY 15 Actual Revenue Historical Trend Actual to Budget 5 Dollars in Millions FY 15 Adopted Budget FY 14 4 3 2 73.5% 1 - * Pro-rated based upon a four year Historical Trend of Actual Year-to-date Collections 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr POSITIVE Charges for Services include revenue from various engineering, recreation, and library fees, police and fire miscellaneous service reimbursements, and public school reimbursement. Charges for services collections through the third quarter of FY 2014-15 are $1.3M (17.3%) above the budget based on historical trend and $769,691 (9.8%) higher than FY 2013-14 actual collections through the third quarter due, in part, to increased public school revenues that were received in the third quarter for FY 2014-15 as opposed to in the fourth quarter for FY 2013-14, resulting in a positive performance indicator. OTHER REVENUE FY 2014-15 1st Qtr Jul - Sep 14 $ 2nd Qtr Oct - Dec 14 1,386,806 24.0% 1,316,972 1,171,291 19.1% 21.0% 2,128,002 34.6% 27.8% 4,452,419 72.5% 72.8% Jan - Mar 15 1,632,776 Apr - Jun 15 1,805,246 $ *% of Budget Hist. Rec'd 18.8% 3rd Qtr 6,141,800 $ % of Budget Rec'd 1,153,126 4th Qtr Total FY 15 Actual Revenue Actual Revenue FY 15 Actual Revenue Historical Trend Actual to Budget 3 Dollars in Millions FY 15 Adopted Budget FY 14 2 1 $ - * Pro-rated based upon a four year Historical Trend of Actual Year-to-date Collections 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr POSITIVE Other revenue captures interest income, fines and forfeitures, sale of land and fixed assets, and other miscellaneous items. Revenue streams in this category are not constant. Other revenue collections through the third quarter of FY 2014-15 are $115,865 (2.7%) above the budget based on historical trend and $124,091 (2.9%) higher than FY 2013-14 actual collections through the third quarter. The performance indicator is positive because the difference between the percentage of budget received through the third quarter and the percentage of historical budget received through the third quarter is less than 2%. 7 4/27/2015 GENERAL FUND EXPENDITURE ANALYSIS: GENERAL FUND EXPENDITURES + ENCUMBRANCES for FY 2014-15 by FUNCTION Dollars in Millions FY 15 Adjusted Budget * Dept. Operating General Government $ 52,280,260 FY15 Actual Exp+Enc $ % of Budget Exp'd % of Budget Prior Yr 37,940,603 72.6% 71.3% Comm. & Neigh. Services 20,371,567 14,779,099 72.5% 72.0% Public Safety 95,214,818 70,484,599 74.0% 73.8% Transportation & Dev. 19,718,800 14,859,777 75.4% 73.1% Non-Dept. Pers. & O&M 15,463,032 2,924,207 18.9% 46.6% Subtotal $ 203,048,477 $ 140,988,285 69.4% 71.9% Non-Dept. Reserves $ $ - 0.0% 0.0% - 0.0% 0.0% 61.6% 63.6% Non-Dept. Contingencies Total 2,498,000 23,352,016 $ 228,898,493 $ 140,988,285 * Excluding Interfund Transfers 3 15 3 14 Non-Dept. Pers. & O&M 70 68 Transportation & Dev. Public Safety 18 15 32 38 Comm. & Neigh. Services General Government FY 14 3Q YTD Exp+Enc FY 15 3Q YTD Exp+Enc Total General Fund operating expenditures are reflected by City function, along with budgeted non-departmental reserves (encumbrance and unencumbered carryforward, utility, fuel, and downtown redevelopment) and contingencies (15% and Council). Since General Obligation debt and General Fund capital expenditures are reflected in the General Obligation Debt and General Capital Projects Funds, this presentation only includes General Fund operating expenditures to more clearly reflect the results of operations. FY 2014-15 operating spending through the third quarter is 69.4% of the adjusted budget compared to 71.9% of adjusted budget spent last fiscal year through the third quarter. As shown on the following pages, departments have expended between 67.3% and 78.2% of their General Fund adjusted budgets through the third quarter of FY 2014-15. GENERAL FUND EXPENDITURES + ENCUMBRANCES for FY 2014-15 by CATEGORY FY 2014-15 General Fund Actual Expenditures + Encumbrances *Dept. Operating Personnel Operations & Maint. Reserves Contingencies Total FY 15 Adjusted Budget FY 15 Actual Exp+Enc $ 145,647,489 $ 103,527,198 57,400,988 37,461,087 FY 14 Actual Exp+Enc $ % Change from Prior Yr Actual 99,837,296 3.7% 34,790,127 7.7% 2,498,000 - - 0.0% 23,352,016 - - 0.0% $ 228,898,493 $ 140,988,285 $ 134,627,423 Operations & Maint. 27% 4.7% Personnel 73% * Excluding Interfund Transfers Total General Fund operating expenditures and encumbrances are reflected by spending category. Operating spending through the third quarter of FY 2014-15 is 4.7% higher than spending through the third quarter of FY 2013-14 mainly due to increases from labor negotiations and benefit changes in Personnel, and street improvements for Operations & Maintenance. 8 4/27/2015 GENERAL FUND EXPENDITURE ANALYSIS (continued / department summaries): MAYOR & COUNCIL EXPENDITURE FY 2014-15 COMPARISON Operating Only 1st Qtr Jul - Sep 14 $ 197,944 FY 15 Actual Exp+Enc $ 185,082 22.4% 22.7% 2nd Qtr Oct - Dec 14 197,944 185,845 22.5% 22.7% 3rd Qtr Jan - Mar 15 214,439 207,188 25.2% 24.7% 4th Qtr Apr - Jun 15 214,439 Total $ 824,766 $ 578,115 70.1% FY 14 Actual Exp+Enc FY 15 Actual Exp+Enc Historical Trend Actual to Budget Dollars in Thousands FY 15 Adjusted Budget % of Budget *Hist. Expended Trend % of by Qtr Budget 250 200 150 100 50 70.1% * Historical Trend represents the average of the past 4 years % of actual to budget 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr POSITIVE Mayor and Council spent 70.1% of their FY 2014-15 adjusted budget and has historically spent 70.1% of their adjusted budget through the third quarter of the fiscal year, resulting in a positive performance indicator. CITY CLERK EXPENDITURE FY 2014-15 COMPARISON Operating Only 1st Qtr Jul - Sep 14 $ 284,332 FY 15 Actual Exp+Enc $ 309,958 37.1% 30.0% 2nd Qtr Oct - Dec 14 183,979 221,711 26.5% 19.5% 3rd Qtr Jan - Mar 15 183,979 122,038 14.6% 19.6% 4th Qtr Apr - Jun 15 183,980 653,707 78.2% 69.1% Total $ 836,270 $ FY 14 Actual Exp+Enc FY 15 Actual Exp+Enc Historical Trend Actual to Budget Dollars in Thousands FY 15 Adjusted Budget % of Budget *Hist. Expended Trend % of by Qtr Budget 350 300 250 200 150 100 50 - * Historical Trend represents the average of the past 4 years % of actual to budget 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr POSITIVE The City Clerk has spent 78.2% of their FY 2014-15 adjusted budget and has historically spent 69.1% of their adjusted budget through the third quarter of the fiscal year, resulting in a positive performance indicator. Spending through the third quarter in FY 2014-15 included expenditures for the primary and general elections held in the fall of 2014 that are not an every year expense. 9 4/27/2015 GENERAL FUND EXPENDITURE ANALYSIS (continued / department summaries): CITY MANAGER EXPENDITURE FY 2014-15 COMPARISON Operating Only 1st Qtr Jul - Sep 14 $ 9,655,379 FY 15 Actual Exp+Enc $ 9,203,460 28.7% 27.9% 2nd Qtr Oct - Dec 14 7,819,047 7,842,105 24.5% 22.6% 3rd Qtr Jan - Mar 15 7,029,432 6,552,891 20.4% 20.3% 4th Qtr Apr - Jun 15 7,554,536 23,598,456 73.6% 70.8% Total $ 32,058,394 $ FY 14 Actual Exp+Enc FY 15 Actual Exp+Enc Historical Trend Actual to Budget Dollars in Millions FY 15 Adjusted Budget % of Budget *Hist. Expended Trend % of by Qtr Budget 10 9 8 7 6 5 4 3 2 1 - * Historical Trend represents the average of the past 4 years % of actual to budget 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr POSITIVE City Manager includes the following divisions budgeted in the General Fund: Administration, Buildings & Facilities, Cultural Affairs, Downtown Redevelopment, Economic Development, Human Resources, Information Technology, and Planning. Combined, these divisions spent 73.6% of their FY 2014-15 adjusted budget and have historically spent 70.8% of their adjusted budget through the third quarter of the fiscal year, resulting in a positive performance indicator. Starting July 1, 2014, the Planning Division is reported in this Department instead of in the Transportation & Development Department (but is not part of this Department's historical trend). Starting October 1, 2014, the Office of Neighborhood Resources is reflected as part of the new Community and Neighborhood Resources Department and the Cultural Affairs Division is moved into the City Manager Department (this switch is also not part of this Department's historical trend). LAW EXPENDITURE FY 2014-15 COMPARISON Operating Only 1st Qtr Jul - Sep 14 $ 865,973 FY 15 Actual Exp+Enc $ 767,810 21.3% 23.0% 2nd Qtr Oct - Dec 14 829,890 887,668 24.6% 22.1% 3rd Qtr Jan - Mar 15 974,219 784,849 21.7% 25.8% 4th Qtr Apr - Jun 15 938,137 Total $ 3,608,219 $ 2,440,327 67.6% 70.9% FY 14 Actual Exp+Enc FY 15 Actual Exp+Enc Historical Trend Actual to Budget Dollars in Thousands FY 15 Adjusted Budget % of Budget *Hist. Expended Trend % of by Qtr Budget 1,000 800 600 400 200 - * Historical Trend represents the average of the past 4 years % of actual to budget 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr POSITIVE Law spent 67.6% of their FY 2014-15 adjusted budget and has historically spent 70.9% of their adjusted budget through the third quarter of the fiscal year, resulting in a positive performance indicator. 10 4/27/2015 GENERAL FUND EXPENDITURE ANALYSIS (continued / department summaries): CITY MAGISTRATE EXPENDITURE FY 2014-15 COMPARISON Operating Only 1st Qtr Jul - Sep 14 $ 2nd Qtr Oct - Dec 14 1,028,967 865,870 20.4% 22.2% 995,077 1,013,172 23.9% 21.4% 973,957 23.0% 23.7% 3rd Qtr Jan - Mar 15 1,098,513 4th Qtr Apr - Jun 15 1,119,674 Total $ FY 15 Actual Exp+Enc 4,242,231 $ $ 2,852,999 67.3% FY 14 Actual Exp+Enc FY 15 Actual Exp+Enc Historical Trend Actual to Budget Dollars in Thousands FY 15 Adjusted Budget % of Budget *Hist. Expended Trend % of by Qtr Budget 1,200 1,000 800 600 400 200 67.3% 1st Qtr * Historical Trend represents the average of the past 4 years % of actual to budget 2nd Qtr 3rd Qtr 4th Qtr POSITIVE City Magistrate spent 67.3% of their FY 2014-15 adjusted budget and has historically spent 67.3% of their adjusted budget through third quarter of the fiscal year, resulting in a positive performance indicator. COMMUNICATIONS & PUBLIC AFFAIRS EXPENDITURE FY 2014-15 COMPARISON Operating Only 1st Qtr Jul - Sep 14 $ 647,688 FY 15 Actual Exp+Enc $ 595,483 25.7% 23.8% 2nd Qtr Oct - Dec 14 555,161 575,173 24.9% 20.3% 3rd Qtr Jan - Mar 15 578,293 612,549 26.5% 21.3% 4th Qtr Apr - Jun 15 532,028 1,783,205 77.1% 65.4% Total $ 2,313,170 $ FY 14 Actual Exp+Enc FY 15 Actual Exp+Enc Historical Trend Actual to Budget Dollars in Thousands FY 15 Adjusted Budget % of Budget *Hist. Expended Trend % of by Qtr Budget 700 600 500 400 300 200 100 - * Historical Trend represents the average of the past 4 years % of actual to budget 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr POSITIVE Communications and Public Affairs (CAPA) also includes Video Production and Print, Mail, & Graphics. CAPA spent 77.1% of their FY 2014-15 adjusted budget and has historically spent 65.4% of their adjusted budget through the third quarter of the fiscal year. This is due to increased spending on printing supplies and postage, which will be recharged to the departments using those services in the fourth quarter, keeping them at a positive performance indicator. 11 4/27/2015 GENERAL FUND EXPENDITURE ANALYSIS (continued / department summaries): MANAGEMENT SERVICES EXPENDITURE FY 2014-15 COMPARISON Operating Only 1st Qtr Jul - Sep 14 $ 2,030,723 FY 15 Actual Exp+Enc $ 1,759,101 24.3% 25.5% 2nd Qtr Oct - Dec 14 1,668,094 1,866,452 25.7% 21.1% 3rd Qtr Jan - Mar 15 1,813,145 1,516,071 20.9% 23.3% 4th Qtr Apr - Jun 15 1,740,619 5,141,624 70.9% 69.9% Total $ 7,252,581 $ FY 14 Actual Exp+Enc FY 15 Actual Exp+Enc Historical Trend Actual to Budget Dollars in Thousands FY 15 Adjusted Budget % of Budget *Hist. Expended Trend % of by Qtr Budget 2,100 1,800 1,500 1,200 900 600 300 - * Historical Trend represents the average of the past 4 years % of actual to budget 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr POSITIVE Management Services Department includes the following divisions budgeted in the General Fund: Administration, Budget, Accounting, Purchasing, Central Supply, Tax & License, and Utility Services (reimbursed by the Municipal Utilities Department through the Indirect Cost Allocation). These divisions spent 70.9% of their FY 2014-15 adjusted budget and have historically spent 69.9% of their adjusted budget through the third quarter of the fiscal year, resulting in a positive performance indicator. NON-DEPARTMENTAL EXPENDITURE FY 2014-15 COMPARISON Operating Only 1st Qtr Jul - Sep 14 $ 2nd Qtr Oct - Dec 14 5,566,692 $ 463,891 3rd Qtr Jan - Mar 15 5,721,322 4th Qtr Apr - Jun 15 3,711,127 Total** FY 15 Actual Exp+Enc $ 15,463,032 1,659,342 (371,505) $ 10.7% 24.6% -2.4% 2.2% 1,636,370 10.6% 25.1% 2,924,207 18.9% 51.9% FY 14 Actual Exp+Enc FY 15 Actual Exp+Enc Historical Trend Actual to Budget 5 Dollars in Millions FY 15 Adjusted Budget % of Budget *Hist. Expended Trend % of by Qtr Budget 4 3 2 1 - * Historical Trend represents the average of the past 4 years % of actual to budget 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr ** Excludes Reserves and Contingencies POSITIVE Non-Departmental includes citywide costs that do not belong to a specific department (i.e., memberships, legal fees, studies, Strategic Economic Development, and miscellaneous Downtown Redevelopment). Spending in this category fluctuates due to the changing "onetime" needs from year to year. Spending for this category for FY 2014-15 and the prior year consists mainly of contract encumbrances for the Strategic Economic Development Continuum project, the Photo Red Light contract, and the Animal Control contract with Maricopa County. The percentage of budget expended through the third quarter is significantly lower than the percentage of historical budget expended through the third quarter since Council approved Resolution No. 4838 at the 2/12/15 Council Meeting to transfer $4.1 million in appropriation from contingency to non-departmental in order to conduct a Special Census, mid-decade, and has spent $1.3 million through the end of the third quarter. 12 4/27/2015 GENERAL FUND EXPENDITURE ANALYSIS (continued / department summaries): TRANSPORTATION & DEVELOPMENT EXPENDITURE FY 2014-15 COMPARISON Operating Only 1st Qtr Jul - Sep 14 $ 6,112,828 FY 15 Actual Exp+Enc $ 6,086,813 30.9% 28.6% 2nd Qtr Oct - Dec 14 4,535,324 3,724,920 18.9% 21.6% 3rd Qtr Jan - Mar 15 4,732,512 5,048,044 25.6% 22.5% 4th Qtr Apr - Jun 15 4,338,136 14,859,777 75.4% 72.7% Total $ 19,718,800 $ FY 14 Actual Exp+Enc FY 15 Actual Exp+Enc Historical Trend Actual to Budget 7 6 Dollars in Millions FY 15 Adjusted Budget % of Budget *Hist. Expended Trend % of by Qtr Budget 5 4 3 2 1 - * Historical Trend represents the average of the past 4 years % of actual to budget 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr POSITIVE Transportation and Development includes the following divisions budgeted in the General Fund: Administration, Development Services, Engineering, Capital Projects, Streets, Traffic Engineering, Transit Services, and Street Sweeping. Starting July 1, 2014, the Planning Division is no longer reported in this Department, but instead is in the City Manager's Department (but is part of this Department's historical trend). The department spent 75.4% of their FY 2014-15 adjusted budget and has historically spent 72.7% of their adjusted budget through the third quarter of the fiscal year, resulting in a positive performance indicator. COMMUNITY & NEIGHBORHOOD SERVICES EXPENDITURE FY 2014-15 COMPARISON Operating Only 1st Qtr Jul - Sep 14 $ 8,759,774 FY 15 Actual Exp+Enc $ 8,348,415 41.0% 40.9% 2nd Qtr Oct - Dec 14 2,240,872 2,937,626 14.4% 11.0% 3rd Qtr Jan - Mar 15 4,278,029 3,493,058 17.1% 19.9% 4th Qtr Apr - Jun 15 5,092,892 Total $ 20,371,567 FY 14 Actual Exp+Enc FY 15 Actual Exp+Enc Historical Trend Actual to Budget 9 Dollars in Millions FY 15 Adjusted Budget % of Budget *Hist. Expended Trend % of by Qtr Budget 8 7 6 5 4 3 $ 14,779,099 72.5% 2 71.8% 1 - * Historical Trend represents the average of the past 4 years % of actual to budget 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr POSITIVE Community & Neighborhood Services includes the following divisions budgeted in the General Fund: Administration, Aquatics, Code Enforcement, Community Development, Housing, Parks Development & Operations, Neighborhood Resources, Recreation, Sports & Fitness Facilities, and Nature & Recreation Facilities. The department spent 72.5% of their FY 2014-15 adjusted budget and has historically spent 71.8% of their adjusted budget through the third quarter of the fiscal year, resulting in a positive performance indicator. Starting October 1, 2014, the Office of Neighborhood Resources merged with this Department to reflect a new Community & Neighborhood Services Department. The Center for the Arts, Library, and Museum have moved to report to the City Manager Department as the Cultural Affairs Division. These changes have not been reflected in the Department's historical trend. 13 4/27/2015 GENERAL FUND EXPENDITURE ANALYSIS (continued / department summaries): POLICE EXPENDITURE FY 2014-15 COMPARISON Operating Only 1st Qtr Jul - Sep 14 $ 18,715,803 FY 15 Actual Exp+Enc $ 16,678,052 25.8% 28.7% 2nd Qtr Oct - Dec 14 14,198,195 16,685,380 25.9% 21.3% 3rd Qtr Jan - Mar 15 15,488,940 14,352,169 22.2% 24.0% 4th Qtr Apr - Jun 15 16,134,313 47,715,601 73.9% 74.0% Total $ 64,537,251 FY 14 Actual Exp+Enc FY 15 Actual Exp+Enc Historical Trend Actual to Budget Dollars in Millions FY 15 Adjusted Budget % of Budget *Hist. Trend Expended % of by Qtr Budget 21 18 15 12 9 6 $ 3 - * Historical Trend represents the average of the past 4 years % of actual to budget 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr POSITIVE Police includes Administration, Professional Standards, Property & Evidence, Forensic Services, Field Operations, Criminal Investigations, Planning & Research, Communications, Technology, Records, Detention Services, and Community Resources & Training. The department spent 73.9% of their FY 2014-15 adjusted budget and has historically spent 74.0% of their adjusted budget through the third quarter of the fiscal year, resulting in a positive performance indicator. FIRE, HEALTH & MEDICAL EXPENDITURE FY 2014-15 COMPARISON Operating Only 1st Qtr Jul - Sep 14 $ 8,910,215 FY 15 Actual Exp+Enc $ 8,854,965 27.8% 28.0% 2nd Qtr Oct - Dec 14 7,000,883 8,035,171 25.3% 21.4% 3rd Qtr Jan - Mar 15 7,637,327 6,771,032 21.3% 24.1% 4th Qtr Apr - Jun 15 8,273,771 Total $ 31,822,196 FY 14 Actual Exp+Enc FY 15 Actual Exp+Enc Historical Trend Actual to Budget Dollars in Millions FY 15 Adjusted Budget % of Budget *Hist. Trend Expended % of by Qtr Budget 9 8 7 6 5 4 3 $ 23,661,168 74.4% 73.5% 2 1 - * Historical Trend represents the average of the past 4 years % of actual to budget 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr POSITIVE Fire, Health & Medical includes Administration, Emergency Services, Operations, Prevention & Preparedness, and Support Services. In addition, Citywide Fleet is managed by this department. The department spent 74.4% of their FY 2014-15 adjusted budget and has historically spent 73.5% of their adjusted budget through the third quarter of the fiscal year, resulting in a positive performance indicator. 14 4/27/2015 ENTERPRISE FUNDS ENTERPRISE FUNDS ANALYSIS: WATER FUND ANALYSIS FY 2014-15 COMPARISON WATER FUND ANALYSIS WATER FUND Revenues $ Intel Rev/Receivable 61,314,834 FY 15 Actual Revenue/ Exp+Enc $ 2,106,093 49,277,532 - % of Budget Rec'd/Exp'd % of Budget to Date Prior Yr 80% 67% 0% 22% Total Revenues $ 63,420,927 $ 49,277,532 78% 65% Operating Expenses $ 30,916,630 $ 21,135,324 68% 67% 1,148,792 12% 33% 0% 22% Major Capital Expenses 9,644,470 Intel Exp/Payable 2,106,093 - Revenues 60 50 40 30 20 Debt Service 18,674,175 9,209,441 49% 14% 10 Transfers Out 3,625,521 2,744,353 76% 76% 0 53% 47% Total Expenses Net Rev / Exp POSITIVE $ 64,966,889 $ 34,237,910 $ (1,545,962) $ 15,039,622 Expenses 70 Dollars in Millions FY 15 Adjusted Budget FY14 Actual Q3 YTD FY15 Actual Q3 YTD FY15 Budget The performance indicator for Enterprise Funds focuses on the relationship between Operating Revenues and Operating Expenses (including debt service and indirect cost allocation) and the percentage of budget received/expended. The Water Operating Fund includes the following cost centers: Administration, Water Distribution, Water Treatment Plant, Environmental Resources, Water Quality, Water Systems Maintenance, San Tan Vista Water Treatment Plant, Meter Services, and Water Capital. The Water Operating Fund supports operating functions and major capital costs that can be paid without borrowing. The Net Revenue/Expense for FY 2014-15 reflects a budgeted $1.5 million drawdown of fund balance. Transfers Out include Indirect Cost Allocation to the General Fund of $3,528,594 and payment of $96,927 to the Technology Replacement Fund. Year-to-date Operating Revenues through the third quarter are 77% of budget compared to 67% through the third quarter of last year, while Operating Expenses through the third quarter are 68% of budget as compared to 67% through the third quarter of last year. Capital projects reimbursed by Intel Corporation are detailed separately under Revenues and Expenses to have no impact on the fund; the third quarter reflects $8 million received from Intel Corporation to purchase water rights based on an existing agreement. WASTEWATER FUND ANALYSIS FY 2014-15 COMPARISON WASTEWATER FUND ANALYSIS WASTEWATER FUND Revenues $ Intel Rev/Receivable 46,956,231 FY 15 Actual Revenue/ Exp+Enc $ 35,836,801 Revenues % of Budget Rec'd/Exp'd % of Budget to Date Prior Yr 32,910,331 70% 72% 8,577,157 24% 79% 140 120 100 Total Revenues $ 82,793,032 $ 41,487,488 50% 77% Operating Expenses $ 19,201,408 $ 13,952,322 73% 65% 5,786,345 921,462 16% 28% Intel Exp/Payable 35,836,801 8,577,157 24% 79% 40 Debt Service 16,072,293 6,714,227 42% 16% 20 0 Major Capital Expenses Transfers Out Total Expenses Net Rev / Exp POSITIVE 1,836,766 75% 75% $ 79,332,356 2,435,509 $ 32,001,934 40% 69% $ 3,460,676 $ 9,485,554 Expenses 160 Dollars in Millions FY 15 Adjusted Budget 80 60 FY14 Actual Q3 YTD FY15 Actual Q3 YTD FY15 Budget The performance indicator for Enterprise Funds focuses on the relationship between Operating Revenues and Operating Expenses (including debt service and indirect cost allocation) and the percentage of budget received/expended. The Wastewater Operating Fund includes the following cost centers: Collection, Ocotillo Brine Reduction Facility, Lone Butte Wastewater Treatment, Wastewater Quality, Airport Water Reclamation Facility, Ocotillo Water Reclamation Facility, and Wastewater Capital. The Wastewater Operating Fund supports operating functions and major capital costs that can be paid without borrowing. The Net Revenue/Expense for FY 2014-15 reflects a budgeted $3.5M increase to fund balance. Transfers Out include Indirect Cost Allocation to the General Fund of $2,394,973 and payment of $40,536 to the Technology Replacement Fund. Year-to-date Operating Revenues through the third quarter are 70% of budget compared to 72% through the third quarter of last year, while Operating Expenses through the third quarter are 73% of budget as compared to 65% through the third quarter of last year. Capital projects reimbursed by Intel Corporation are detailed separately under Revenues and Expenses to have no impact on the fund. 15 4/27/2015 ENTERPRISE FUNDS ENTERPRISE FUNDS ANALYSIS (continued): SOLID WASTE FUND ANALYSIS FY 2014-15 COMPARISON SOLID WASTE FUND ANALYSIS SOLID WASTE Revenues $ Transfers In FY 15 Actual Revenue/ Exp+Enc 13,968,105 $ - 10,190,693 - % of Budget Rec'd/Exp'd % of Budget to Date Prior Yr 73% 71% 0% 0% 71% Total Revenues $ 13,968,105 $ 10,190,693 73% Operating Expenses $ 13,324,883 $ Major Capital Expenses Transfers Out Total Expenses $ 11,496,175 86% 85% 397,037 250,191 63% 100% 1,128,551 856,468 76% 76% 12,602,834 85% 84% 14,850,471 $ Revenues Expenses 15 Dollars in Millions FY 15 Adjusted Budget 12 9 6 3 - Net Rev / Exp WARNING $ (882,366) $ FY14 Actual Q3 YTD (2,412,141) FY15 Actual Q3 YTD FY15 Budget The performance indicator for Enterprise Funds focuses on the relationship between Operating Revenues and Operating Expenses (including debt service and indirect cost allocation) and the percentage of budget received/expended. The Solid Waste Operating Fund supports operating functions and major capital costs that can be paid without borrowing. The Net Revenue/Expense for FY 2014-15 reflects a budgeted $882,366 drawdown of fund balance. Transfers Out include Indirect Cost Allocation to the General Fund of $1,088,333 and payment of $40,218 to the Technology Replacement Fund. Year-to-date Operating Revenues through the third quarter are 73% of budget compared to 71% through the third quarter of last year, while Operating Expenses through the third quarter are 86% of budget as compared to 85% last year. A warning indicator occurs due to large encumbrances ($8.0M) recorded at the start of the fiscal year for the Solid Waste collections contract to support costs through the end of the fiscal year and then spent against for the remainder of the year, with revenues more equally apportioned throughout the year. AIRPORT FUND ANALYSIS FY 2014-15 COMPARISON AIRPORT FUND ANALYSIS AIRPORT FUND Revenues $ General Fund Subsidy 1,042,600 FY 15 Actual Revenue/ Exp+Enc $ 1,043,650 % of Budget Rec'd/Exp'd % of Budget to Date Prior Yr 765,035 73% 71% 224,458 22% 33% Total Revenues $ 2,086,250 $ 989,493 47% 64% Operating Expenses $ 1,096,364 $ 718,567 66% 71% 856,568 250,257 29% 22% Debt Service 27,938 1,469 5% 7% Transfers Out 105,380 80,380 76% 76% 1,050,673 50% 65% Major Capital Expenses Total Expenses Net Rev / Exp POSITIVE $ $ 2,086,250 - $ $ Revenues Expenses 2,400 2,100 Dollars in Thousands FY 15 Adjusted Budget 1,800 1,500 1,200 900 600 300 FY14 Actual Q3 YTD FY15 Actual Q3 YTD FY15 Budget (61,180) The performance indicator for Enterprise Funds focuses on the relationship between Operating Revenues and Operating Expenses (including debt service and indirect cost allocation) and the percentage of budget received/expended. The Airport Fund supports operating functions and major capital costs that can be paid without borrowing. The Net Revenue/Expense for FY 2014-15 reflects no budgeted change in fund balance. General Fund Subsidy reflects budgeted transfers from the General Fund to help support operations. Transfers Out include Indirect Cost Allocation to the General Fund of $100,000 and a payment of $5,380 to the Technology Replacement Fund. Year-to-date Operating Revenues through the third quarter are 73% of budget compared to 71% through the third quarter of last year. Operating Expenses through the third quarter are 66% of budget as compared to 71% through the third quarter of last year. Major capital expenses are higher through the third quarter of FY 2014-15 as pavement improvements are performed on the taxiway and runway. 16 4/27/2015 OTHER FUNDS OTHER FUNDS ANALYSIS (continued): SYSTEM DEVELOPMENT FEE FUNDS ANALYSIS FY 2014-15 COMPARISON Water FY 15 Adjusted Budget $ Reclaimed Water Wastewater Total SDF Revenue $ 4,408,485 FY 15 Actual Revenue 5,762,011 131% 863,775 912,816 106% 4,165,730 5,470,491 131% 12,145,318 129% 9,437,990 $ % of Budget Rec'd to Date $ FY 14 Actual Q3 YTD FY 14 Adjusted Budget FY 15 Actual Q3 YTD FY 15 Adjusted Budget 7 6 Dollars in Millions SYSTEM DEVELOPMENT FEE (SDF) FUNDS 5 4 3 2 1 0 Note: Budget and Actual amounts reflect SDF revenues and the interest earned on fund balances, and excludes loan transfers in/out or proceeds from bond sales. POSITIVE System Development Fees (SDFs) are based on development and fluctuate quarterly as well as from year to year. The graph shows the FY 2014-15 budget and year-to-date collections as compared to the FY 2013-14 budget and year-to-date collections. Collections through the third quarter of FY 2014-15 were 129% of the budget as compared to the prior year's collections through the third quarter of 128% of the budget. Starting July 28, 2014, Water Resource SDFs are combined with Water SDFs in the same fund based on the recently adopted Infrastructure Improvements Plan (IIP). For comparative purposes, both years show Water and Water Resource SDFs combined. The modified SDFs effective July 28, 2014 resulted in an increase in Water SDFs of 13%, a decrease in Reclaimed Water SDFs of -25%, and an increase in Wastewater SDFs of 7%. IMPACT FEE FUNDS ANALYSIS FY 2014-15 COMPARISON IMPACT FEE FUNDS Arterial Streets $ 100% 2,566,880 2,797,005 109% 53,170 54,005 102% Public Buildings 163,490 170,399 104% Police 279,120 450,109 161% Fire 607,340 685,340 113% 8,438,721 106% Library $ % of Budget Rec'd to Date 4,281,863 Parks 4,261,180 FY 15 Actual Revenue Dollars in Thousands FY 15 Adjusted Budget FY 14 Actual Q3 YTD FY 14 Adjusted Budget FY 15 Actual Q3 YTD FY 15 Adjusted Budget 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 Total Impact Revenue $ 7,931,180 $ 1,000 500 0 Note: Budget and Actual amounts reflect Impact Fee revenues and the interest earned on fund balances, and excludes loan transfers in/out or proceeds from bond sales. POSITIVE Impact fees are based on development and fluctuate quarterly as well as from year to year. The graph shows the FY 2014-15 budget and year-to-date collections as compared to FY 2013-14 budget and year-to-date collections. Collections through the third quarter of FY 2014-15 were 106% of the budget as compared to the prior year's collections through the third quarter of 222% of the budget. Impact fees were modified as of July 28, 2014, resulting in various changes to the fee categories depending on the land use type as noted in the recently adopted IIP. The change in single family fees for each fee category include a decrease of -2% for Arterial Streets, decreases of -13% to -40% depending on the service area for Parks, a decrease of -19% for Library, an increase of 13% for Public Buildings, an increase of 69% for Police, and an increase of 20% for Fire. 17 4/27/2015 OTHER FUNDS OTHER FUNDS ANALYSIS (continued): HIGHWAY USER FUND (HURF) ANALYSIS FY 2014-15 COMPARISON HIGHWAY USER FUND ANALYSIS Highway Users Tax $ Other FY 15 Actual Revenue/ Exp+Enc 13,000,000 $ 63,000 Total Revenues $ Operating Expenses $ 13,063,000 $ 9,275,739 $ 9,177,584 71% 64% 65,971 105% 357% 9,243,555 71% 65% 6,627,170 71% 78% Major Capital Expenses 2,698,037 1,538,912 57% 90% Debt Service 4,677,025 4,432,317 95% 100% 23,708 23,708 100% 100% 12,622,107 76% 84% Transfers Out Total Expenses $ 16,674,509 $ Revenues % of Budget Rec'd/Exp'd % of Budget to Date Prior Yr Expenses 18 15 Dollars in Millions FY15 Adjusted Budget 12 9 6 3 0 Net Rev / Exp $ (3,611,509) $ FY14 Actual Q3 YTD (3,378,552) FY15 Actual Q3 YTD FY15 Budget POSITIVE Highway Users Tax is collected by the state on all gasoline sales. It is combined with other state-level vehicle related revenues, and distributed to cities and towns by using two formulas based upon population. Funds are restricted for use on streets and related projects. The Net Revenue/Expense for FY 2014-15 reflects a budgeted fund balance drawdown of $3.6M. Transfers Out include payment of $23,708 to the Technology Replacement Fund. Operating Revenues received through the third quarter are 71% of budget, which is 7% higher than last year's third quarter percentage. Operating Expenses through the third quarter are 71% of adjusted budget, which is 7% lower than last year's third quarter percentage. GRANT FUNDS ANALYSIS FY 2014-15 COMPARISON GRANT REVENUES % of Budget Rec'd to Date 14 600,308 15% 12 1,900,000 805,899 42% 13,802,300 5,823,421 42% Public Safety 2,806,050 805,535 29% Community Services 2,301,132 353,722 15% General Government* $ General Govt - CDBG General Govt - HUD Municipal Utilities $ 100,000 T & D - Streets Total Grant Revenue 4,017,956 FY 15 Actual Revenue 6,858,485 $ 31,785,923 $ - 0% 922,000 13% 9,310,885 29% FY 15 Adjusted Budget FY 15 Actual Revenue 10 Dollars in Millions FY 15 Adjusted Budget 8 6 4 2 Gen Govt * Includes City Manager, Economic Development, Information Technology and Law Gen GovtCDBG Gen GovtHUD Public Safety Comm Svs MUD T & D-Streets Grants are an additional source of funds for major capital projects and certain operating programs. Grant sources include federal, state, and county governments as well as donations from businesses, organizations, or individuals to support particular programs. The adopted budget for grants is unique because it is developed before final approval on grant awards from other agencies is received in an effort to allow for adequate appropriation to spend anticipated grants. Additionally, grant revenues for many programs are received on a reimbursable basis, so the revenue on a large capital project may lag one to two fiscal years after the project is initiated. Actual collections through the third quarter of FY 2014-15 were $9.3M (29% of adjusted budget) as compared to $12.1M (36% of adjusted budget) collected through the third quarter of FY 2013-14. 18 4/27/2015