QUARTERLY FINANCIAL REPORT 2nd Qtr FY16-17 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 & Organizational Support 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 POSITIVE 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 2/3/2017 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 deb 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. Fourth Quarter 2015 (revised estimate) First Quarter 2016 (revised estimate) Second Quarter 2016 (third estimate) Third Quarter 2016 (third estimate) October 29, 2008 December 16, 2008 December 17, 2015 December 15, 2016 0.9% 0.8% 1.4% 3.5% Source: U.S. Department of Commerce 1.0% 0% - 0.25% 0.25% - 0.50% 0.50% - 0.75% Source: Federal Reserve Bank UNEMPLOYMENT National 5.0% 4.9% 4.6% 4.7% Sep-16 Oct-16 Nov-16 Dec-16 State of Arizona 5.5% 5.2% 5.0% 4.8% Phoenix Metro Area 4.8% 4.5% 4.1% 4.1% 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 Administration, "Arizona's Workforce" Newsletter CITY INVESTMENT PORTFOLIO The City splits its investment portfolio between two investment firms with a different mix of holdings at each firm to reduce risk. The City's benchmark changed to the 1-3 year Merrill Lynch Treasury Index as of July 2016. Rate of return includes interest earnings as well as both realized and unrealized gains/(losses). Fiscal Year 2016-17 Rate of Return 2nd Quarter Fiscal Year Benchmark: -0.43% -0.54% Wells Capital Management: -0.34% -0.37% PFM: -0.31% -0.30% Fiscal Year 2015-16 Rate of Return 2nd Quarter Fiscal Year Benchmark: -0.31% -0.07% Wells Capital Management: -0.21% -0.05% PFM: -0.15% 0.12% Beginning January 2015, the City began investing in a community bank deposit program called Certificate of Deposit Account Registry Services (CDARS) to maximize the return on short-term investments. Interest earned in this program is recorded upon maturity of the securities; $23,013 of interest has been recorded through the second quarter of FY 2016-17. As interest rates rise, CDARS will become less beneficial. BUILDING PERMITS Single-family building permits are an indicator of the general economy. Higher numbers of permits indicate an active construction market and resultant home sales. State of Arizona Chandler Jul - Aug - Sep 2015 6,175 328 Oct - Nov - Dec 2015 5,289 261 Jan - Feb - Mar 2016 5,814 319 Apr - May - Jun 2016 6,955 398 Jul - Aug - Sep 2016 5,869 243 Oct - Nov - Dec 2016 5,606 205 Single family building permits average 327 permits per quarter for FY 2015-16, compared to 177 average permits per quarter for FY 2014-15. Fewer building permits generally equates to less new construction, lower permit fees revenues and lower related sales tax revenues. As shown above, 205 permits were recorded in the second quarter of FY 2016-17. Source: Investment Advisors 2 2/3/2017 GENERAL FUND REVENUE ANALYSIS: OVERALL GENERAL FUND REVENUES FY 2016-17 1st Qtr Jul - Sep 16 $ 45,875,879 2nd Qtr Oct - Dec 16 51,597,596 3rd Qtr Jan - Mar 17 53,601,803 4th Qtr Apr - Jun 17 59,746,000 Total $ 210,821,277 FY 17 Actual Revenue $ % of Budget Rec'd * % of Budget Hist. Rec'd 51,155,298 24.3% 22.6% 56,955,020 27.0% 25.3% Actual Revenue FY 17 Actual Revenue Historical Trend Actual to Budget Dollars in Millions FY 17 Adopted Budget FY 16 70 60 50 40 30 20 $ 108,110,318 51.3% 47.9% 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 second quarter of FY 2016-17 are $10.6M (10.9%) above the budget based on historical trend and $7.1M (7.1%) higher than actual collections through the second quarter of FY 2015-16. Overall, General Fund revenue, led by continuing strong Sales Tax and License and Permit collections, are performing well due to higher consumer confidence locally and a steady stream of new development activity in Chandler. Additionally, the percentage of budget received for the fiscal year is greater than the historical percentage of budget received, resulting in a positive performance indicator. The following charts provide more detail regarding the various sources of General Fund revenues. GENERAL FUND REVENUES BY CATEGORY FY 2016-17 Revenue Categories Sales Tax Franchise Fees Primary Property Tax State Shared Revenue Licenses & Permits Charges for Services Other Revenues Indirect Cost Allocation FY 17 Adopted Budget $ 107,391,000 3,275,000 7,556,520 62,907,000 4,921,000 11,199,607 6,502,550 7,068,600 FY 17 Actual Revenue $ 58,419,029 820,426 3,896,827 29,976,048 3,225,686 5,460,686 2,777,314 3,534,300 % of Budget Rec'd to Date 54.4% 25.1% 51.6% 47.7% 65.5% 48.8% 42.7% 50.0% Total $ 210,821,277 $ 108,110,318 51.3% General Fund Collection History by Category % Indirect Costs 100% 4% 3% 6% 3% 4% 3% 6% 2% 3% 3% 6% 3% 28% 28% 28% 28% 4% 3% 3% 4% 2% 2% 52% 52% 80% 60% 2% 3% 3% 5% 3% 1% Other Revenues Charges for Services Licenses & Permits State Shared Revenue 40% 52% 54% Primary Property Taxes 20% Franchise Fees 0% FY14 $201M FY15 $209M FY16 $216M FY17 Q2 YTD $108M Local Sales Taxes POSITIVE This chart summarizes General Fund revenue collections by revenue category for FY 2016-17. 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 2/3/2017 GENERAL FUND REVENUE ANALYSIS (continued): SALES TAX REVENUE FY 2016-17 1st Qtr Jul - Sep 16 $ 26,518,307 2nd Qtr Oct - Dec 16 25,540,285 3rd Qtr Jan - Mar 17 27,354,265 4th Qtr Apr - Jun 17 27,978,142 Total $ 107,391,000 FY 17 Actual Revenue $ $ % of Budget Rec'd * % of Budget Hist. Rec'd 30,080,008 28.0% 27.0% 28,339,021 26.4% 26.2% 58,419,029 54.4% 53.2% Actual Revenue FY 17 Actual Revenue Historical Trend Actual to Budget Dollars in Millions FY 17 Adopted Budget FY 16 35 30 25 20 15 10 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 through the second quarter of FY 2016-17 are $6.4M (12.2%) above the budget based on historical trend and $4.3M (8%) higher than FY 2015-16 actual collections through the second quarter. The performance indicator is positive because the difference between percentage of budget received through the second quarter and percentage of historical budget received through the second quarter is less than 2%. It should be noted that House Bill (HB) 2111 requires the State of Arizona to begin licensing and collecting transaction privilege tax (TPT), commonly referred to as sales tax, for all Cities. The Arizona Department of Revenue (ADOR) will begin collecting for Chandler on January 1, 2017, which may affect timing of collections in the second half of the fiscal year. SALES TAX COLLECTION HISTORY Retail Contracting Utilities Real Property Rentals Restaurants & Bars Telecommunications Personal Prop. Rentals Hotels/Motels Publishing/Printing Amusements Use Tax TOTAL SALES TAX FY 17 Adopted Budget $ 49,200,000 8,500,000 15,000,000 11,800,000 9,900,000 3,500,000 3,000,000 2,500,000 250,000 FY 17 Actual % of Actual Revenue to Budget $ 25,953,341 52.8% 5,651,010 66.5% 8,093,453 54.0% 6,674,723 56.6% 5,299,054 53.5% 1,437,057 41.1% 1,814,148 60.5% 1,287,907 51.5% 89,009 35.6% 750,000 900,000 $ 105,300,000 $ % Chg from Prior Yr 9.6% 35.7% -1.1% 3.7% 7.7% -9.1% 20.2% 24.3% -32.8% 462,445 989,873 61.7% 110.0% -0.5% 106.4% 57,752,019 54.8% 9.8% 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 second quarter of FY 2016-17 were $6.7M (13.2%) above the budget based on historical trend and $5.2M (9.8%) higher than FY 2015-16 actual collections through the second quarter. 4 2/3/2017 GENERAL FUND REVENUE ANALYSIS (continued): FRANCHISE FEE REVENUE FY 2016-17 1st Qtr Jul - Sep 16 $ 2nd Qtr Oct - Dec 16 51,699 $ 746,572 3rd Qtr Jan - Mar 17 1,172,161 4th Qtr Apr - Jun 17 1,304,568 Total FY 17 Actual Revenue $ 3,275,000 $ % of Budget Rec'd *% of Budget Hist. Rec'd 26,465 0.8% 1.7% 793,961 24.2% 24.4% 820,426 25.1% Actual Revenue FY 17 Actual Revenue Historical Trend Actual to Budget Dollars in Thousands FY 17 Adopted Budget FY 16 26.1% 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). Franchise fee collections through the second quarter of FY 2016-17 are $22,155 (2.8%) above the budget based on historical trend and $164 (<0%) less than FY 2015-16 actual collections through the second quarter. The performance indicator is positive because the difference between percentage of budget received through the second quarter and percentage of historical budget received through the second quarter is less than 2%. PRIMARY PROPERTY TAX REVENUE FY 2016-17 1st Qtr Jul - Sep 16 $ 2nd Qtr Oct - Dec 16 40,652 FY 17 Actual Revenue $ 3,774,967 3rd Qtr Jan - Mar 17 525,669 4th Qtr Apr - Jun 17 3,215,232 % of Budget Rec'd *% of Budget Hist. Rec'd 28,348 0.4% 0.6% 3,868,480 51.2% 51.8% Actual Revenue FY 17 Actual Revenue Historical Trend Actual to Budget 4 Dollars in Millions FY 17 Adopted Budget FY 16 3 2 1 Total $ 7,556,520 $ 3,896,827 51.6% 52.3% - * 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 2016-17, Chandler will collect a primary tax rate of $0.29 per $100 of assessed valuation and a secondary tax rate of $0.87 per $100 of assessed valuation for a total rate of $1.16, representing a $0.0192 cent decrease from the rates adopted for FY 2015-16 to help offset the City's assessed valuation increase of 7.3% in FY 2016-17. This resulted in only a small net increase for the median home value. Primary property tax collections through the second quarter of FY 2016-17 are $81,207 (2.1%) higher than the budget based on historical trend and $55,378 (1.4%) higher than FY 2015-16 actual collections through the second quarter. The majority of collections come in the second and fourth quarters, as the first half of the property tax bills are due in October and the second half are due in March. The performance indicator is positive because the difference between percentage of budget received through the second quarter and percentage of historical budget received through the second quarter is less than 2%. 5 2/3/2017 GENERAL FUND REVENUE ANALYSIS (continued): STATE SHARED REVENUE FY 2016-17 1st Qtr Jul - Sep 16 $ 13,066,449 2nd Qtr Oct - Dec 16 15,151,931 3rd Qtr Jan - Mar 17 15,978,720 4th Qtr Apr - Jun 17 18,709,901 Total $ 62,907,000 FY 17 Actual Revenue $ $ % of Budget Rec'd *% of Budget Hist. Rec'd 13,879,057 22.1% 21.2% 16,096,992 25.6% 24.6% 29,976,048 47.7% 45.8% Actual Revenue FY 17 Actual Revenue Historical Trend Actual to Budget Dollars in Millions FY 17 Adopted Budget FY 16 * Pro-rated based upon a four year Historical Trend of Actual Year-to-date Collections 20 18 16 14 12 10 8 6 4 2 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 second quarter of FY 2016-17 are $281,918 (3.1%) above the budget based on historical trend and $554,206 (6.2%) higher than FY 2015-16 actual collections through the second 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, as well as surcharges from vehicle rentals. The respective city shares are determined by the proportion of city population to total incorporated population of the county. Collections through the second quarter of FY 2016-17 are $505,174 (12.6%) above the budget based on historical trend and $233,871 (5.5%) higher than FY 2015-16 actual collections through the second quarter. -- Urban Revenue Sharing: Fifteen percent (15%) of the 2014 State income tax collection is distributed to cities and towns as urban revenue sharing based upon the updated census population updated annually. Collections through the second quarter of FY 2016-17 are $970,577 (6.5%) above the budget based on historical trend and $1.7M (12.2%) higher than FY 2015-16 actual collections through the second quarter. The overall state shared revenue performance indicator is positive because the difference between the percentage of budget received through the second quarter and the percentage of historical budget received through the second quarter is less than 2%. LICENSES & PERMITS REVENUE FY 2016-17 1st Qtr Jul - Sep 16 $ 761,965 2nd Qtr Oct - Dec 16 1,042,181 3rd Qtr Jan - Mar 17 1,442,630 4th Qtr Apr - Jun 17 1,674,223 Total $ 4,921,000 FY 17 Actual Revenue $ $ % of Budget Rec'd *% of Budget Hist. Rec'd 1,456,234 29.6% 19.2% 1,769,451 36.0% 26.3% 3,225,686 65.5% 45.5% FY 16 Actual Revenue FY 17 Actual Revenue Historical Trend Actual to Budget Dollars in Thousands FY 17 Adopted Budget 2,500 2,000 1,500 1,000 500 - * 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 category includes revenue for various licenses: transaction privilege (sales) tax, alcoholic beverages, transient merchants, 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 second quarter of FY 2016-17 are $1.4M (78.8%) above the budget based on historical trend and $172,837 (-5.1%) below FY 2015-16 actual collections through the second quarter. Budgeted amounts for building permits (the largest revenue in this category) 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 second quarter, resulting in a positive performance indicator. 6 2/3/2017 GENERAL FUND REVENUE ANALYSIS (continued): CHARGES FOR SERVICES REVENUE FY 2016-17 1st Qtr Jul - Sep 16 $ 2,349,329 2nd Qtr Oct - Dec 16 2,317,550 3rd Qtr Jan - Mar 17 2,948,311 4th Qtr Apr - Jun 17 3,584,416 Total $ 11,199,607 FY 17 Actual Revenue $ $ % of Budget Rec'd *% of Budget Hist. Rec'd 2,409,321 21.5% 22.0% 3,051,365 27.2% 21.7% 5,460,686 48.8% Actual Revenue FY 17 Actual Revenue Historical Trend Actual to Budget 5 Dollars in Millions FY 17 Adopted Budget FY 16 4 3 2 43.7% 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 second quarter of FY 2016-17 are $793,807 (17%) over the budget based on historical trend and $662,035 (13.8%) higher than FY 2015-16 actual collections through the second quarter. The performance of this category is very strong and has exceeded expectations through the second quarter, resulting in a positive performance indicator. OTHER REVENUE FY 2016-17 1st Qtr Jul - Sep 16 $ 1,320,325 2nd Qtr Oct - Dec 16 1,256,962 3rd Qtr Jan - Mar 17 1,751,977 4th Qtr Apr - Jun 17 2,173,286 Total $ 6,502,550 FY 17 Actual Revenue $ % of Budget Rec'd *% of Budget Hist. Rec'd 1,508,715 23.2% 21.8% 1,268,600 19.5% 21.3% 2,777,314 42.7% 43.0% Actual Revenue FY 17 Actual Revenue Historical Trend Actual to Budget 3 Dollars in Millions FY 17 Adopted Budget FY 16 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 second quarter of FY 2016-17 are $200,028 (7.8%) over the budget based on historical trend and $191,483 (-6.4%) less than FY 2015-16 actual collections through the second quarter. The performance indicator is positive because the difference between percentage of budget received through the second quarter and percentage of historical budget received through the second quarter is less than 2%. 7 2/3/2017 GENERAL FUND EXPENDITURE ANALYSIS: GENERAL FUND EXPENDITURES + ENCUMBRANCES for FY 2016-17 by FUNCTION Dollars in Millions FY 17 Adjusted Budget * Dept. Operating General Government $ Community Services Public Safety Transportation & Dev. Non-Dept. Pers. & O&M 59,658,921 FY17 Actual Exp+Enc $ % of Budget Exp'd % of Budget Prior Yr 30,407,521 51.0% 52.7% 18,831,529 10,120,578 53.7% 53.6% 102,784,394 53,765,421 52.3% 52.0% 20,726,452 10,876,062 52.5% 55.3% 11,465,550 2,135,817 18.6% 36.3% Subtotal $ 213,466,846 $ 107,305,399 50.3% 51.5% Non-Dept. Reserves $ $ - 0.0% 0.0% - 0.0% 0.0% 43.4% 45.8% Non-Dept. Contingencies Total 3,326,492 30,419,276 $ 247,212,614 $ 107,305,399 * Excluding Interfund Transfers 2 5 11 12 Non-Dept. Pers. & O&M 54 54 Transportation & Dev. Public Safety 10 10 Community Services 30 30 General Government FY 16 2Q YTD Exp+Enc FY 17 2Q YTD Exp+Enc Total General Fund operating expenditures and encumbrances are reflected by City function, along with budgeted non-departmental reserves (encumbrance and unencumbered carryforward, utility, fuel, and downtown redevelopment) and contingencies (15% of revenues 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 2016-17 operating spending through the second quarter is 50.3% of the adjusted budget compared to 51.5% of adjusted budget spent last fiscal year through the second quarter. As shown on the following pages, departments (excluding Non-Departmental) have expended between 44.8% and 56.6% of their General Fund adjusted budgets through the second quarter of FY 2016-17. GENERAL FUND EXPENDITURES + ENCUMBRANCES for FY 2016-17 by CATEGORY FY 2016-17 General Fund Actual Expenditures + Encumbrances *Dept. Operating Personnel Operations & Maint. Reserves Contingencies Total FY 17 Adjusted Budget $ 160,792,484 51,459,638 FY17 Actual Exp+Enc $ 76,882,730 30,422,669 FY 16 Actual Exp+Enc $ % Change from Prior Yr Actual 75,759,010 1.5% 35,398,519 -14.1% 3,326,492 - - 0.0% 31,634,000 - - 0.0% $ 247,212,614 $ 107,305,399 $ 111,157,529 Operations & Maint. 28% -3.5% Personnel 72% * Excluding Interfund Transfers Total General Fund operating expenditures and encumbrances are reflected by spending category. Operating spending through the second quarter of FY 2016-17 is 3.5% less than spending through the second quarter of FY 2015-16, primarily due to the decrease in the Operations & Maintenance category as compared to FY 2015-16, which included significant encumbrances for the 2015 mid-decade Special Census. 8 2/3/2017 GENERAL FUND EXPENDITURE ANALYSIS (continued / department summaries): MAYOR & COUNCIL EXPENDITURE FY 2016-17 COMPARISON Operating Only 1st Qtr Jul - Sep 16 $ 215,406 2nd Qtr Oct - Dec 16 215,406 3rd Qtr Jan - Mar 17 233,357 4th Qtr Apr - Jun 17 233,357 Total $ 897,526 FY 17 Actual Exp+Enc $ $ 206,149 23.0% 23.2% 220,625 24.6% 23.4% 426,774 47.6% FY 16 Actual Exp+Enc FY 17 Actual Exp+Enc Historical Trend Actual to Budget Dollars in Thousands FY 17 Adjusted Budget % of Budget *Hist. Expended Trend % of by Qtr Budget 250 200 150 100 50 46.7% * 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 47.6% of their FY 2016-17 adjusted budget and has historically spent 46.7% of their adjusted budget through the second quarter of the fiscal year, resulting in a postive performance indicator. CITY CLERK EXPENDITURE FY 2016-17 COMPARISON Operating Only 1st Qtr Jul - Sep 16 $ 328,090 2nd Qtr Oct - Dec 16 210,166 3rd Qtr Jan - Mar 17 160,889 4th Qtr Apr - Jun 17 201,272 Total $ 900,418 FY 17 Actual Exp+Enc $ $ 286,052 31.8% 33.0% 223,442 24.8% 21.1% 509,494 56.6% 54.1% FY 16 Actual Exp+Enc FY 17 Actual Exp+Enc Historical Trend Actual to Budget Dollars in Thousands FY 17 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 spent 56.6% of their FY 2016-17 adjusted budget and has historically spent 54.1% of their adjusted budget through the second quarter of the fiscal year, resulting in a positive performance indicator. Spending in FY 2016-17 includes one-time expenditures for the primary and general elections being held in the fall of 2016 that did not occur in FY 2015-16. 9 2/3/2017 GENERAL FUND EXPENDITURE ANALYSIS (continued / department summaries): CITY MANAGER & ORGANIZATIONAL SUPPORT EXPENDITURES FY 2016-17 COMPARISON Operating Only 1st Qtr Jul - Sep 16 $ 13,491,935 2nd Qtr Oct - Dec 16 8,298,824 3rd Qtr Jan - Mar 17 8,283,620 4th Qtr Apr - Jun 17 9,263,562 Total $ 39,337,941 FY 17 Actual Exp+Enc $ $ 12,245,687 31.1% 32.3% 8,385,185 21.3% 19.9% 20,630,872 52.4% FY 16 Actual Exp+Enc FY 17 Actual Exp+Enc Historical Trend Actual to Budget Dollars in Millions FY 17 Adjusted Budget % of Budget *Hist. Expended Trend % of by Qtr Budget 15 12 9 6 3 52.2% - * 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 & Organization Support includes the following divisions budgeted in the General Fund: Administration, Buildings & Facilities, Cultural Affairs, Downtown Redevelopment, Economic Development, Fleet, Human Resources, Information Technology, Neighborhood Resources, and Planning. Combined, these divisions spent 52.4% of their FY 2016-17 adjusted budget and have historically spent 52.2% of their adjusted budget through the second quarter of the fiscal year, resulting in a positive performance indicator. The Neighborhood Resources Division moved from the Community Services Department and the Fleet Division moved from the Fire, Health & Medical Department to City Manager, Organizational Support at the beginning of FY 2016-17. The historical comparisons have been updated to reflect the transfers. LAW EXPENDITURE FY 2016-17 COMPARISON Operating Only 1st Qtr Jul - Sep 16 $ 868,742 2nd Qtr Oct - Dec 16 899,090 3rd Qtr Jan - Mar 17 934,705 4th Qtr Apr - Jun 17 967,768 Total $ 3,670,305 FY 17 Actual Exp+Enc $ $ 841,760 22.9% 22.4% 907,298 24.7% 23.2% 1,749,058 47.7% 45.5% FY 16 Actual Exp+Enc FY 17 Actual Exp+Enc Historical Trend Actual to Budget Dollars in Thousands FY 17 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 47.7% of their FY 2016-17 adjusted budget and has historically spent 45.5% of their adjusted budget through the second quarter of the fiscal year, resulting in a positive performance indicator. 10 2/3/2017 GENERAL FUND EXPENDITURE ANALYSIS (continued / department summaries): CITY MAGISTRATE EXPENDITURE FY 2016-17 COMPARISON Operating Only 1st Qtr Jul - Sep 16 $ 1,069,987 2nd Qtr Oct - Dec 16 1,089,021 3rd Qtr Jan - Mar 17 1,116,309 4th Qtr Apr - Jun 17 1,173,715 Total $ 4,449,032 FY 17 Actual Exp+Enc $ $ 1,026,480 23.1% 22.0% 1,079,626 24.3% 22.4% 2,106,106 47.3% FY 16 Actual Exp+Enc FY 17 Actual Exp+Enc Historical Trend Actual to Budget Dollars in Thousands FY 17 Adjusted Budget % of Budget *Hist. Expended Trend % of by Qtr Budget 1,200 1,000 800 600 400 200 44.3% 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 47.3% of their FY 2016-17 adjusted budget and has historically spent 44.3% of their adjusted budget through the second quarter of the fiscal year, resulting in a positive performance indicator. COMMUNICATIONS & PUBLIC AFFAIRS EXPENDITURE FY 2016-17 COMPARISON Operating Only 1st Qtr Jul - Sep 16 $ 820,530 2nd Qtr Oct - Dec 16 709,423 3rd Qtr Jan - Mar 17 725,285 4th Qtr Apr - Jun 17 562,086 Total $ 2,817,324 FY 17 Actual Exp+Enc $ $ 807,967 28.7% 24.2% 455,417 16.2% 20.9% 1,263,384 44.8% 45.1% FY 16 Actual Exp+Enc FY 17 Actual Exp+Enc Historical Trend Actual to Budget Dollars in Thousands FY 17 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 Communications and Public Affairs (CAPA) also includes Video Production and Print, Mail, & Graphics. CAPA spent 44.8% of their FY 2016-17 adjusted budget and has historically spent 45.1% of their adjusted budget through the second quarter of the fiscal year, resulting in a positive performance indicator. 11 2/3/2017 GENERAL FUND EXPENDITURE ANALYSIS (continued / department summaries): MANAGEMENT SERVICES EXPENDITURE FY 2016-17 COMPARISON Operating Only 1st Qtr Jul - Sep 16 $ 2,193,613 2nd Qtr Oct - Dec 16 1,773,089 3rd Qtr Jan - Mar 17 1,799,856 4th Qtr Apr - Jun 17 1,819,817 Total $ 7,586,375 FY 17 Actual Exp+Enc $ $ 1,993,117 26.3% 26.7% 1,728,716 22.8% 21.6% 3,721,833 49.1% FY 16 Actual Exp+Enc FY 17 Actual Exp+Enc Historical Trend Actual to Budget Dollars in Thousands FY 17 Adjusted Budget % of Budget *Hist. Expended Trend % of by Qtr Budget 48.2% 2,400 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 49.1% of their FY 2016-17 adjusted budget and have historically spent 48.2% of their adjusted budget through the second quarter of the fiscal year, resulting in a positive performance indicator. NON-DEPARTMENTAL EXPENDITURE FY 2016-17 COMPARISON Operating Only 1st Qtr Jul - Sep 16 $ 5,487,429 2nd Qtr Oct - Dec 16 2,713,629 3rd Qtr Jan - Mar 17 1,706,760 4th Qtr Apr - Jun 17 1,557,733 Total** $ 11,465,550 FY 17 Actual Exp+Enc $ $ 1,825,350 15.9% 21.9% 310,467 2.7% 10.9% 2,135,817 18.6% FY 16 Actual Exp+Enc FY 17 Actual Exp+Enc Historical Trend Actual to Budget 5 Dollars in Millions FY 17 Adjusted Budget % of Budget *Hist. Expended Trend % of by Qtr Budget 4 3 2 1 32.8% - * 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 opportunities, and miscellaneous downtown redevelopment expenses). Spending in this category fluctuates significantly due to changing one-time needs from year to year. Non-departmental spending through the second quarter of FY 2016-17 is 18.6% of the adjusted budget, with historical spending of 32.8% through the second quarter of the fiscal year. The historical trend was significantly impacted in FY 2015-16 due to the approval of Resolution No. 4838 at the February 12, 2015 Council Meeting to transfer $4.1 million in appropriation from contingency to non-departmental in order to conduct a 2015 mid-decade Special Census. 12 2/3/2017 GENERAL FUND EXPENDITURE ANALYSIS (continued / department summaries): TRANSPORTATION & DEVELOPMENT EXPENDITURE FY 2016-17 COMPARISON Operating Only 1st Qtr Jul - Sep 16 $ 7,254,258 2nd Qtr Oct - Dec 16 3,938,026 3rd Qtr Jan - Mar 17 5,388,878 4th Qtr Apr - Jun 17 4,145,290 Total $ 20,726,452 FY 17 Actual Exp+Enc $ $ 7,142,476 34.5% 32.5% 3,733,586 18.0% 18.1% 10,876,062 52.5% FY 16 Actual Exp+Enc FY 17 Actual Exp+Enc Historical Trend Actual to Budget 9 8 Dollars in Millions FY 17 Adjusted Budget % of Budget *Hist. Expended Trend % of by Qtr Budget 7 6 5 4 3 2 50.6% 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. The Department spent 52.5% of their FY 2016-17 adjusted budget and has historically spent 50.6% of their adjusted budget through the second quarter of the fiscal year, resulting in a positive performance indicator. COMMUNITY SERVICES EXPENDITURE FY 2016-17 COMPARISON Operating Only 1st Qtr Jul - Sep 16 $ 6,591,035 2nd Qtr Oct - Dec 16 3,577,991 3rd Qtr Jan - Mar 17 4,896,198 4th Qtr Apr - Jun 17 3,766,306 Total $ 18,831,529 FY 17 Actual Exp+Enc $ 6,362,459 33.8% 35.7% 3,758,118 20.0% 19.9% FY 16 Actual Exp+Enc FY 17 Actual Exp+Enc Historical Trend Actual to Budget 9 Dollars in Millions FY 17 Adjusted Budget % of Budget *Hist. Expended Trend % of by Qtr Budget 8 7 6 5 4 3 $ 10,120,578 53.7% 2 55.7% 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 Services includes the following divisions budgeted in the General Fund: Administration, Aquatics, Parks Development & Operations, Recreation, Sports & Fitness Facilities, and Nature & Recreation Facilities. The department spent 53.7% of their FY 2016-17 adjusted budget and has historically spent 55.7% of their adjusted budget through the second quarter of the fiscal year, resulting in a positive performance indicator. At the beginning of FY 2016-17, the Neighborhood Resources cost centers (Neighborhood Resources, Housing and Redevelopment, and Code Enforcement) moved from the Community & Neighborhood Services Department to City Manager, Organizational Support (and the Department was renamed Community Services). The historical comparisons have been updated to reflect the transfer. 13 2/3/2017 GENERAL FUND EXPENDITURE ANALYSIS (continued / department summaries): POLICE EXPENDITURE FY 2016-17 COMPARISON Operating Only 1st Qtr Jul - Sep 16 $ 18,537,321 2nd Qtr Oct - Dec 16 17,164,186 3rd Qtr Jan - Mar 17 15,791,051 4th Qtr Apr - Jun 17 17,164,186 Total $ 68,656,745 FY 17 Actual Exp+Enc $ 19,000,442 27.7% 26.8% 17,130,189 25.0% 24.1% FY 16 Actual Exp+Enc FY 17 Actual Exp+Enc Historical Trend Actual to Budget Dollars in Millions FY 17 Adjusted Budget % of Budget *Hist. Expended Trend % of by Qtr Budget 21 18 15 12 9 6 $ 36,130,631 52.6% 50.9% 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 the following cost centers: 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 52.6% of the FY 2016-17 adjusted budget and has historically spent 50.9% of their adjusted budget through the second quarter of the fiscal year, resulting in a positive performance indicator. FIRE, HEALTH & MEDICAL EXPENDITURE FY 2016-17 COMPARISON Operating Only 1st Qtr Jul - Sep 16 $ 9,555,742 2nd Qtr Oct - Dec 16 8,190,636 3rd Qtr Jan - Mar 17 7,849,359 4th Qtr Apr - Jun 17 8,531,912 Total $ 34,127,649 FY 17 Actual Exp+Enc $ 9,543,436 28.0% 27.3% 8,091,354 23.7% 23.7% FY 16 Actual Exp+Enc FY 17 Actual Exp+Enc Historical Trend Actual to Budget Dollars in Millions FY 17 Adjusted Budget % of Budget *Hist. Expended Trend % of by Qtr Budget 12 10 8 6 4 $ 17,634,790 51.7% 50.9% 2 - * 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 the following cost centers: Administration, Emergency Services, Operations, Prevention & Preparedness, and Support Services. The Department spent 51.7% of their FY 2016-17 adjusted budget and has historically spent 50.9% of their adjusted budget throught the second quarter of the fiscal year, resulting in a positive performance indicator. The Fleet Services Division was managed by Fire, Health & Medical prior to FY 2016-17, at which time it was moved to City Manager, Organizational Support. The historical comparisons have been updated to reflect the transfer. 14 2/3/2017 ENTERPRISE FUNDS ENTERPRISE FUNDS ANALYSIS: WATER FUND ANALYSIS FY 2016-17 COMPARISON WATER FUND Operating Revenues FY 17 Actual Revenue/ Exp+Enc $ 50,114,800 $ 26,723,435 53% 50% Total Revenues $ 50,114,800 $ 26,723,435 53% 50% Operating Expenses $ 30,112,203 $ 18,316,417 61% 55% 8,549,758 8,289,758 97% 1% Debt Service 14,255,008 3,560,975 25% 13% Transfers Out 3,376,446 1,756,851 52% 48% 31,924,001 57% 33% Major Capital Expenses WATER FUND ANALYSIS % of Budget Rec'd/Exp'd % of Budget to Date Prior Yr Revenues Expenses 60 Dollars in Millions FY 17 Adjusted Budget 50 40 30 20 10 0 Total Expenses Net Rev / Exp POSITIVE $ 56,293,415 $ $ (6,178,615) $ FY16 Actual Q2 YTD FY17 Actual Q2 YTD FY17 Budget (5,200,566) 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 2016-17 includes a budgeted $6.2 million drawdown of fund balance (change from first quarter due to carryforward expenditures). The budgeted Transfers Out include indirect cost allocation to the General Fund of $3,216,800, payment of $137,256 to the Technology Replacement Fund, and payment of $22,390 to the Workers Compensation Self-Insurance Trust. Year-todate Operating Revenues through the second quarter are 53% of budget compared to 50% through the second quarter of FY 2015-16, while Operating Expenses through the second quarter are 61% of budget as compared to 55% through the second quarter of FY 201516. Beginning in FY 2016-17, a new fund was created for Reclaimed Water revenues and expenditures, separating expenditures from the Water Fund. WASTEWATER FUND ANALYSIS FY 2016-17 COMPARISON WASTEWATER FUND Revenues $ Intel Rev/Receivable 43,266,720 FY 17 Actual Revenue/ Exp+Enc $ 2,259,754 22,223,131 51% 50% 1,686,368 75% 21% Total Revenues $ 45,526,474 $ 23,909,499 53% 52% Operating Expenses $ 20,671,320 $ 10,002,112 48% 49% Major Capital Expenses 14,914,849 9,683,186 65% 80% 2,259,754 2,259,753 100% 0% Debt Service 14,463,696 2,734,571 19% 13% Transfers Out 2,444,782 1,249,545 51% 49% 25,929,167 47% 46% Intel Exp/Payable Total Expenses Net Rev / Exp POSITIVE $ 54,754,401 $ $ (9,227,927) $ WASTEWATER FUND ANALYSIS % of Budget Rec'd/Exp'd % of Budget to Date Prior Yr Revenues Expenses 60 Dollars in Millions FY 17 Adjusted Budget 50 40 30 20 10 0 FY16 Actual Q2 YTD FY17 Actual Q2 YTD FY17 Budget (2,019,668) 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 2016-17 includes a budgeted $9.2M drawdown of fund balance (change from first quarter due to carryforward expenditures). The budgeted Transfers Out include indirect cost allocation to the General Fund of $2,374,900, payment of $54,307 to the Technology Replacement Fund, and payment of $15,575 to the Workers Compensation Self-Insurance Trust. Year-to-date Operating Revenues through the second quarter are 51% of budget compared to 50% through the second quarter of FY 2015-16, while Operating Expenses through the second quarter are 48% of budget as compared to 49% through the second quarter of FY 2015-16. Beginning in FY 2016-17, a new fund was created for Reclaimed Water revenues and expenditures, separating revenues and expenditures from the Wastewater Fund. 15 2/3/2017 ENTERPRISE FUNDS ENTERPRISE FUNDS ANALYSIS (continued): SOLID WASTE FUND ANALYSIS FY 2016-17 COMPARISON SOLID WASTE FUND ANALYSIS SOLID WASTE Operating Revenues $ Transfers In Total Revenues Operating Expenses $ - 7,200,327 - % of Budget Rec'd/Exp'd % of Budget to Date Prior Yr 47% 46% 0% 170% $ 15,392,682 $ 7,200,327 47% 51% $ 13,721,132 $ 11,481,877 84% 82% 755,854 715,942 95% 14% 1,003,867 528,213 53% 47% 12,726,032 82% 76% Major Capital Expenses Transfers Out Total Expenses 15,392,682 FY 17 Actual Revenue/ Exp+Enc $ 15,480,853 $ Revenues Expenses 18 15 Dollars in Millions FY 17 Adjusted Budget 12 9 6 3 - Net Rev / Exp POSITIVE $ (88,171) $ FY16 Actual Q2 YTD (5,525,705) FY17 Actual Q2 YTD FY17 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 2016-17 reflects a budgeted decrease of $88,171 to fund balance. Transfers Out include an indirect cost allocation to the General Fund of $940,600, payment of $52,559 to the Technology Replacement Fund, and payment of $10,708 to the Workers Compensation Self-Insurance Trust. Year-to-date Operating Revenues through the second quarter are 47% of budget compared to 46% through the second quarter of FY 2015-16, while Operating Expenses through the second quarter are 84% of budget as compared to 82% through the second quarter of FY 2015-16. Operating Expenses through the second quarter reflect large encumbrances ($5.8M) that are 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. By adjusting for those encumbrances, the resulting fund indicator is positive. AIRPORT FUND ANALYSIS FY 2016-17 COMPARISON AIRPORT FUND ANALYSIS AIRPORT FUND Operating Revenues $ General Fund Subsidy Total Revenues Operating Expenses 1,073,995 FY 17 Actual Revenue/ Exp+Enc $ 949,675 467,311 - % of Budget Rec'd/Exp'd % of Budget to Date Prior Yr 44% 47% 0% 0% $ 2,023,670 $ 467,310 23% 26% $ 1,065,369 $ 508,689 48% 50% Major Capital Expenses 826,358 236,103 29% 10% Debt Service 26,563 781 3% 4% Transfers Out 105,380 55,380 53% 47% $ 800,954 40% 33% $ (333,644) Total Expenses Net Rev / Exp POSITIVE $ $ 2,023,670 - Revenues Expenses 2,100 1,800 Dollars in Thousands FY 17 Adjusted Budget 1,500 1,200 900 600 300 FY16 Actual Q2 FY17 Actual Q2 YTD YTD FY17 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 Airport Fund supports operating functions and major capital costs that can be paid without borrowing. The Net Revenue/Expense for FY 2016-17 reflects no budgeted change in fund balance since the General Fund Subsidy is budgeted from the General Fund to make up the funding needed to help support operations and/or Major Capital Expenses. The budgeted Transfers Out include indirect cost allocation to the General Fund of $100,000 and payment of $5,380 to the Technology Replacement Fund. The Debt Service expense will be paid off by July 1, 2018. Year-to-date Operating Revenues through the second quarter are 44% of budget compared to 47% through the second quarter of FY 2015-16. Operating Expenses through the second quarter are 48% of budget as compared to 50% through the second quarter of FY 2015-16. Operating expenditures, Debt Service and indirect costs through the second quarter reflect 33% of budgeted expenditures in these categories, which is 14% less than Operating Revenues through the second quarter, resulting in a positive indicator. 16 2/3/2017 OTHER FUNDS OTHER FUNDS ANALYSIS (continued): SYSTEM DEVELOPMENT FEE FUNDS ANALYSIS FY 2016-17 COMPARISON Water FY 17 Adjusted Budget $ Reclaimed Water Wastewater Total SDF Revenue $ 12,371,100 FY 17 Actual Revenue 5,667,690 46% 1,807,300 920,164 51% 12,675,600 5,955,763 47% 12,543,617 47% 26,854,000 $ % of Budget Rec'd to Date $ FY 16 Actual Q2 YTD FY 16 Adjusted Budget FY 17 Actual Q2 YTD FY 17 Adjusted Budget 14 12 Dollars in Millions SYSTEM DEVELOPMENT FEE (SDF) FUNDS 10 8 6 4 2 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 2016-17 budget and year-to-date collections through the second quarter as compared to the FY 2015-16 budget and year-to-date collections through the second quarter. Collections through the second quarter of FY 2016-17 were 47% of the budget as compared to the prior year's collections of 81% through the second quarter. FY 2015-16 collections reflect permits for two large multi-family developments resulting in higher than normal collections in all three categories. FY 17 Adjusted Budget IMPACT FEE FUNDS Arterial Streets $ Parks 12,169,200 FY 17 Actual Revenue $ 6,520,200 % of Budget Rec'd to Date 3,257,656 27% 3,182,401 49% Library 135,400 66,279 49% Public Buildings 387,400 141,267 36% Police 1,020,800 374,662 37% Fire 1,540,700 571,839 37% 7,594,105 35% Total Impact Revenue $ 21,773,700 $ Dollars in Thousands IMPACT FEE FUNDS ANALYSIS FY 2016-17 COMPARISON FY 16 Actual Q2 YTD FY 16 Adjusted Budget FY 17 Actual Q2 YTD FY 17 Adjusted Budget 12,000 10,000 8,000 6,000 4,000 2,000 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. 0 POSITIVE Impact fees are based on development and fluctuate quarterly as well as from year to year. The graph shows the FY 2016-17 budget and year-to-date collections through the second quarter as compared to FY 2015-16 budget and year-to-date collections through the second quarter. Collections through the second quarter of FY 2016-17 were 35% of the budget as compared to the prior year's collections through the second quarter of 128% of the budget. FY 2015-16 collections reflect permits for two large multi-family developments resulting in higher than normal collections. 17 2/3/2017 OTHER FUNDS OTHER FUNDS ANALYSIS (continued): HIGHWAY USER FUND (HURF) ANALYSIS FY 2016-17 COMPARISON HIGHWAY USER FUND ANALYSIS Highway Users Tax $ Other 15,720,459 FY 17 Actual Revenue/ Exp+Enc $ 143,000 6,288,010 40% 42% 63,754 45% 48% Total Revenues $ 15,863,459 $ 6,351,764 40% 42% Operating Expenses $ 9,820,645 $ 5,202,008 53% 53% Major Capital Expenses 2,994,961 743,512 25% 90% Debt Service 2,671,438 2,671,438 100% 100% 24,853 100% 0% 8,641,811 56% 72% Transfers Out Total Expenses 24,853 $ 15,511,897 $ Revenues % of Budget Rec'd/Exp'd % of Budget to Date Prior Yr Expenses 18 15 Dollars in Millions FY 17 Adjusted Budget 12 9 6 3 0 Net Rev / Exp $ 351,562 $ FY16 Actual Q2 YTD (2,290,047) FY17 Actual Q2 YTD FY17 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 2016-17 reflects a budgeted fund balance surplus of $352K. Transfers Out include payment of $24,853 to the Technology Replacement Fund. Operating Revenues received through the second quarter are 40% of budget, which is 2% lower than the percentage through the second quarter of last fiscal year. Operating Expenses through the second quarter are 53% of adjusted budget, which is the same as the second quarter of last fiscal year. GRANT FUNDS ANALYSIS FY 2016-17 COMPARISON GRANT REVENUES General Government* $ 3,827,932 FY 17 Actual Revenue $ 349,757 % of Budget Rec'd to Date 4,000 9% 3,500 3,000 Community Services 120,092 4,974 4% Neighborhood Res. Neighborhood Res. CDBG & HOME 10,000 3,136 31% 3,035,201 434,206 14% 12,519,442 3,791,328 30% Neighborhood Res. - HUD Municipal Utilities 100,000 Public Safety T & D - Streets Total Grant Revenue $ - 0% 4,199,148 443,880 11% 11,871,507 3,267,458 28% 8,294,739 23% 35,683,322 $ FY 16 Actual Revenue 2,500 Thousands FY 17 Adjusted Budget FY 17 Actual Revenue 2,000 1,500 1,000 500 - * Includes Airport, CAPA, City Manager, Cultural Affairs, Economic Development, Law, and Magistrate 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, in most cases 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 second quarter of FY 2016-17 were $8.3M (23% of adjusted budget) as compared to $8M (28% of adjusted budget) collected through the second quarter of FY 2015-16. 18 2/3/2017