Proposed Biennial Operating and Capital Budget

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1 Proposed Biennial Operating and Capital Budget

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3 Proposed BIENNIAL OPERATING AND CAPITAL BUDGET TABLE OF CONTENTS VOLUME I Overview Budget Transmittal Letter FOCUS Overview...In final version Community Profile...13 Legal Requirements and Budget Process Introduction Proposed Revised Operating and Capital Budget Summary Ten-Year Assumptions and Models Budget in Brief Section Capital Improvements Debt Obligations Additional Information Proposed 2017 Pay Plan Position and Schedules Budget Adoption Resolution...In final version 2017 Appropriation Ordinance...In final version Mill Levy Ordinance...In final version 2017 Pay Plan Adoption Resolution...In final version 2017 Capital Improvement Adoption Resolution...In final version Glossary of Terms Line-Item Budget Detail VOLUME II Performance-Based Budgeting (FOCUS) VOLUME III Capital Improvement Plan Cover Design Provided By: Special Thanks To: Arlene Martinez, Executive Assistant Lisa Yagi, Assistant Finance Director Ryan Adler, Budget Analyst Deanne Gibboney, Budget Analyst Debra Nielson, Controller Arlene Martinez, Executive Assistant i

4 Proposed BIENNIAL OPERATING AND CAPITAL BUDGET CITY OFFICIALS Marc Williams Mayor (Term expires 2019) Don Allard Councilmember At-Large (Term expires 2017) Bob Fifer Mayor Pro Tem At-Large (Term expires 2019) Nancy Ford Councilmember District 1 (Term expires 2017) Mark McGoff Councilmember District 2 (Term expires 2019) John Marriott Councilmember District 3 (Term expires 2017) David Jones Councilmember District 4 (Term expires 2019) CITY MANAGER AND KEY STAFF Mark G. Deven Lorie Gillis William Ray David Cooke Christopher K. Daly Bryan Archer Ron Czarnecki Linda Haley Robert Manwaring Rita McConnell Maureen Phair Gordon Reusink Kristen Rush Ryan Stachelski James Sullivan Don Wick Kelley Hartman Jessica Prosser Maria VanderKolk City Manager Deputy City Manager Deputy City Manager Municipal Judge City Attorney Director of Finance Chief Information Officer Director of Human Resources Director of Public Works Director of Community Development Executive Director of Arvada Urban Renewal Authority Director of Parks, Golf and Hospitality Services City Clerk Director of Arvada Economic Development Association Director of Utilities Chief of Police Performance Budget Manager Assistant to the City Manager Communications Manager ii

5 Proposed BIENNIAL OPERATING AND CAPITAL BUDGET CITIZENS OF ARVADA City Attorney Mayor and City Council Municipal Judge City Manager Deputy City Manager Deputy City Manager iii

6 Proposed BIENNIAL OPERATING AND CAPITAL BUDGET The Government Finance Officers Association of the United States and Canada (GFOA) presented a Distinguished Budget Presentation Award to the City of Arvada for its Biennial Budget for the fiscal years In order to receive this award, a governmental unit must publish a budget document that meets program criteria as a policy document, as an operations guide, as a financial plan, and as a communications device. iv The City of Arvada has received this Distinguished Budget Presentation Award for the past 24 years!

7 August 31, 2016 Members of City Council City of Arvada 8101 Ralston Road Arvada, Colorado Members of City Council and the Arvada Community: Transmitted with this letter is the City of Arvada s Proposed Biennial Operating and Capital Budget. As required by City Council Policy No , Arvada Budget and Fiscal Policy, staff must develop a Biennial Operating and Capital Budget which is to be presented within the FOCUS Arvada framework for consideration by the City Council. Each Biennial Operating and Capital budget is presented in late August and Council approval must be completed by October 31 of the even-numbered year prior to the odd-numbered year the budget is implemented. Council approval authorizes expenditure authority for only one year. Staff must develop and present an updated budget for the second year which Council will consider and approve in the same manner in order to authorize expenditures for the second year of the Biennial Operating and Capital Budget. Presentation of the proposed operating and capital within the FOCUS Arvada framework provides the foundation for accomplishing the Council Strategic Results and other key results identified by the departments through the performance budgeting process. Each department presents their proposed budget in a consistent manner by utilizing the following elements: a) A Mission Statement that summarizes services, identifies the customer(s) and describes what the customer(s) will experience; b) Issue Statements that describe the impacts of the services; c) Department Strategic Results that align to and may include one or more Council Strategic Results; d) Lines of Business that more specifically define services, customers and experiences associated with a set of inter-related Programs; and e) Programs with Purpose Statements that define individual services and performance measures stated as results, outputs, demands and efficiencies. This framework is intended to identify the key results and customer experience that are to be accomplished during the next two years. Specifically, the City Council and the community will see the Golden Thread which will link the Council Strategic Plan to the day-to-day business operations of the City organization. Please note that our budget information is still a work in progress. The proposed budget utilizes a new technology platform for presentation of the FOCUS Arvada framework. This technology will facilitate tracking of strategic results, performance measures and financial data in real time which will improve reporting and transparency. It is important to note that the

8 Proposed Biennial Operating and Capital Budget Members of City Council August 31, 2016 Page 2 new technology was implemented in June While we have worked hard to integrate the FOCUS framework and the financial system, it is possible that some of the information will need to be adjusted in order to accurately reflect our work. We will continue to refine this information in a manner that honors our commitment to the following statement which is included within the purpose of the Budget and Fiscal Policy: The City desires to continue its efforts to achieve and maintain service excellence by building a data-driven, results-orients, customer-focused and responsive organization. With this purpose in mind, this letter will introduce the Council and the community to the information provided in the Proposed Biennial Operating and Capital Budget and present highlights of the budget and the updated ten-year financial models for all major funds. Presentation of the Budget Document This budget document is presented in three parts which we have identified as Volume I, Volume II and Volume III. Volume I includes an overview of the proposed operating and capital budget revenues and expenditures, presentations of the ten-year financial models, capital improvements, debt obligations and additional information. The additional information section reserves space for the insertion of resolutions and ordinances that the City Council will consider as part of this process which will result in the appropriation of resources and provide the authority to expend City funds. This section also includes the proposed Pay Plan (to include the salary schedule in the final version of the document), and includes a Glossary of Terms to aid readers of the budget document. Volume I also includes a section entitled Budget in Brief. This section provides a high-level review of each department s proposed budget by summarizing expenditures for and proposed budgeted expenditures for Staffing levels for each of those years is also provided. In addition, the Budget in Brief section provides a summary of key results, including specific results from the City Council Strategic Plan which are owned by that department. These results are designated by a c that is placed within a graphic presentation on each page. Finally, in Volume I, there is a line-item budget included to provide further detail breakdown of departmental expenditures. Volume II includes an overview of FOCUS and then provides more details on each department s proposed budget. The overview of FOCUS appropriately begins with the City Council Strategic Plan which explains the four Priority Areas and aligned 30 Strategic Results. This section also includes a graphic that illustrates which department has responsibility for achieving each of the Strategic Results, known as the Golden Thread.

9 Proposed Biennial Operating and Capital Budget Members of City Council August 31, 2016 Page 3 Following the FOCUS overview, a complete presentation is provided for each department within the FOCUS framework. This information will include the primary elements of FOCUS, including each department s Mission Statement, Issue Statements and Lines of Business and Programs. Within each Department the City Council and the community will be able to review the proposed expenditures, staffing levels and performance measures for operations ranging from Planning and Development in Community Development to Golf Course operations within Parks, Golf and Hospitality. There are over 260 pages of information regarding the wide range of City operations that present the results expected through the expenditure of approximately $200 million in public resources. Volume III is the complete Capital Improvement Plan for and includes detailed financial models for each project in the plan. Biennial Operating and Capital Budget Highlights Pages within Volume I of the budget document summarize major changes and assumptions associated with the proposed budget. As Council is aware, revenue generated through sources such as sales and use tax and development-related activities have reflected a robust economy fueled by growth over the last six years. While acknowledging the last six years of a robust economy, staff has included conservative assumptions in the proposed revenues and expenditures for and the ten-year financial models. These assumptions are based on the fact that economic activity is cyclical wherein robust growth is followed by a slow-down or, as was the case in the Great Recession, a significant down turn. While most economists are not forecasting a significant down turn, there is some uncertainty characteristic of a Presidential election year and continued instability throughout the world. It is important to note that staff reviews various economic forecasting sources, including the University of Colorado Leeds School Of Business. The most recent economic forecast produced by the Leeds School Of Business was generally positive. Colorado outperforms the nation in most economic indicators such as unemployment and housing starts. There is a strong inmigration of a younger, more diverse and well-educated demographic that are attracted by the Colorado lifestyle and the availability of excellent employment opportunities. While these are positive factors, the economic forecast also cautioned that the state s economy could be negatively impacted by the falling price of oil, actions by the Federal Reserve, the availability of labor, weather patterns from the forecasted El Niño, housing affordability and sluggish median family income. These factors could have a related negative impact on the City s primary sources of income such as sales and use tax. Therefore, assumptions associated with the proposed budget reflect an appropriate level of caution. As an example, sales tax, which increased at unforeseen rates as high as over 6% in , is assumed to increase at 1.5% in 2017 and 2.5% in The forecast for the remaining eight years of the General Fund ten-year model ranges from 2.75% to 3.25% which is based on declining growth rates, moderate inflation and the addition of sales tax generated

10 Proposed Biennial Operating and Capital Budget Members of City Council August 31, 2016 Page 4 by the Candelas King Soopers and Amazon. Other revenue categories such as auto use tax and building fees are expected to trend downward through the first three years of the ten-year model to more normal levels. Staff believes these assumptions are appropriately conservative, yet still allow for some level of expenditure increase in order to meet the demand for public services generated by Arvada s population growth as well as our existing residents. The proposed budget includes 12 new full-time positions. Six of the positions are included in the General Fund, with the remaining six allocated to the Police Tax Increment funds, Parks Fund and Wastewater Enterprise Fund. Two other positions slated for discontinuation in 2018 will be continued through at least 2020 because of continued development activity. These positions within Community Development and the Building Division will be supported by the fees paid in association with development applications and building review and inspection. The new full-time positions are summarized within a chart showing major changes proposed within the budget on pages There are several other proposed additional expenditures primarily within the General Fund that are generated by a combination of factors, including the G Line, operation of the Olde Town Hub, recent state legislation and achievement of Council Strategic Results. In order to appropriately explain these changes, the summary of the ten-year model for each fund will include an itemized list. Ten-year Financial Models Preparation of the budget continued our commitment to long-range financial planning as required by the Budget and Fiscal Policy. Developing long-range financial models encompasses many different elements, including ten-year planning for all major funds to view costs within a longer framework, a ten-year Capital Improvement Plan that identifies projects, funding sources and any associated operating costs and the allocation of all resources in a manner that reflects the Council s strategic priorities. These elements must also be consistent with associated long-term planning efforts, such as the City s Comprehensive Plan. Pages of the budget document summarize assumptions and present each of the ten-year financial models for the major city funds. The first set of bullet points summarize the assumptions that were applied to all funds. These assumptions include market rate adjustments that reflect the City s total compensation philosophy such as the cost of salaries and benefits. One of the benefits which is closely monitored is health care. As Council is aware, the City achieved an excellent result in 2016 with no increase in the cost of health insurance. The assumptions for reflect an increase of 6% and increases ranging from 4% to 8% throughout the remaining eight years in order to account for potential fluctuations. In addition, the looming cost to employers with so-called Cadillac plans associated with the Affordable Care Act required staff to propose a cumulative impact of $1.8 million for all ten-year models beginning in On the positive side, expenditure assumptions for most line items such as supplies and equipment were reduced based on actual expenditures over the last several years. Staff has done an excellent job in controlling costs in this area. With these overall assumptions in mind, the following information briefly summarizes the major changes in each fund. Justification for the proposed changes is referenced, where applicable, as a Council Strategic Result and/or in association with a Council Strategic Plan Priority Area.

11 Proposed Biennial Operating and Capital Budget Members of City Council August 31, 2016 Page 5 General Fund The General Fund is fully balanced for the ten-year period by meeting its minimum fund balance level of 17% every year. As stated previously herein, the primary sources of revenue, sales and use tax, increase by 1.5% in 2017 and 2.5% in The forecast for the remaining eight years of the General Fund ten-year model ranges from 2.75% to 3.25%. The following major changes are included in the proposed budget and ten-year model. The costs expressed are the 2017 costs or the first-year impact: Adds one Chief Probation Officer for the Municipal Court to support the Council Strategic Result for the reduction of juvenile recidivism $114,649 Adds one Court Clerk position in 2018 in anticipation of additional cases due to population growth and to support Vibrant Community and Neighborhood $81,285 Continues the Planner I position for three additional years until 2020 with associated development revenue to support Growth and Economic Development $78,484 Continues Finance Revenue Technician position for one more year to 2018 to support Organizational and Service Effectiveness $52,946 Adds an Organizational Development position and contract resources for expanded training activities within Human Resources to support full implementation of the new Vision, Mission and Values which in turn supports Organizational and Service Effectiveness $127,824 Adds two new Police Sergeant positions and associated costs for operation of the Delta community station to support population growth in northwest Arvada and which in turn supports Vibrant Community and Neighborhoods $391,210 Adds one Craftsman position within Public Works in recognition of additional building space and to support Infrastructure $63,631 Eliminates a Police Services Technician since the City will be entering into a third-party parking enforcement contract ($78,760) Forecasts management reductions within the City Manager s Office beginning in 2022 necessary at this time in order to fund the proposed additional positions ($228,566) Forecasts additional Municipal Court revenue based on increased caseload to support Vibrant Community and Neighborhoods ($165,000) Add materials for street maintenance and snow/ice control to support Infrastructure $200,000 Adds materials and contract costs for Neighborhood Rehabilitation which supports the Council Strategic Result associated with neighborhood engagement $50,000 Adds funding to upgrade the Trak-it system used in planning and buildings $10,000 Adds relief judges for the Municipal Court beginning in 2018 to support Vibrant Community and Neighborhoods $16,000 in 2017 and $30,000 beginning in 2018 Adds funding for Court-appointed attorney costs required by implementation of state legislation $40,000 Adds Municipal Court interpreters $5,600 Adds funding for technology costs for the Municipal Court to support Vibrant Community and Neighborhoods $21,900 Adds Olde Town Hub parking structure operation and enforcement, maintenance and equipment costs to support the Council Strategic Result associated with the development of Transit Stations and associated facilities in collaboration with RTD $406,000

12 Proposed Biennial Operating and Capital Budget Members of City Council August 31, 2016 Page 6 Adds equipment to support parking management at the Olde Town Hub parking structure beginning in 2018 to support the Council Strategic Result associated with the development of Transit Stations and associated facilities in collaboration with RTD $150,000 Adds revenue from RTD to partially offset Olde Town Hub costs ($44,000) Adds annual revenue generated by parking management beginning in 2018 ($50,000) Adds increased fees for the Jefferson County Crime Lab to support Vibrant Community and Neighborhoods $28,000 Adds increased fees for the Foothills Animal Shelter to support Vibrant Community and Neighborhoods $78,116 Adds Taser replacement costs to support Vibrant Community and Neighborhoods $25,000 Adds Police Academy costs to support police staffing expansion which in turn supports Vibrant Community and Neighborhoods $20,000 Adds ammunition costs for recruits required by the academy to support Vibrant Community and Neighborhoods $8,000 Adds a bicycle replacement program to public safety to support Vibrant Community and Neighborhoods $4,400 Adds additional trash removal costs to support Vibrant Community and Neighborhoods $20,000 Adds additional temporary and overtime wages for asphalt patching and plowing to support Infrastructure $50,000 Adds aerial photography to enhance GIS information to support Infrastructure $8,500 Adds miscellaneous operating costs for the Olde Town Hub to support Operational and Service Effectiveness $30,000 Increases credit card fees in buildings to support Organizational and Service Effectiveness $70,000 Adds for increases in long-term disability insurance $45,000 Identification of miscellaneous annual operational savings otherwise not described above to offset/reallocate the additional costs described herein ($300,000) The net additional impact to the General Fund of the major changes described above is $1,098,934 in 2017 and $1,284,111 in The additional cumulative impact for the entire ten-year model is $13,116,042. Parks Fund The Parks Fund is fully balanced for the ten-year period by meeting its minimum fund balance level of 11% every year. The primary sources of revenue include intergovernmental transfers such as Jefferson County Open Space and Revenue Transfers from the General Fund The following major changes are included in the proposed budget and ten-year model. The costs expressed are the 2017 costs or the first-year impact: Adds an Administrative Coordinator beginning in 2020 to support operation of an expanding department which in turn supports Vibrant Community and Neighborhoods $89,277 Adds a Parks Program Manager to support management of additional facilities associated with Arvada s growth which in turn supports Vibrant Community and Neighborhoods $106,071

13 Proposed Biennial Operating and Capital Budget Members of City Council August 31, 2016 Page 7 Adds a Parks Worker position to support open space which in turn supports Vibrant Community and Neighborhoods $73,916 Adds a slope mower to support Infrastructure $42,024 for purchase in 2017 with $11,266 thereafter to amortize the replacement cost Adds a contract for open space mowing to support Vibrant Community and Neighborhoods $28,000 Adds funding to replace technology that collects mapping and inventory data to support Organizational and Service Effectiveness $20,550 Adds temporary wages to the Majestic View Nature program $2,655 Adds funding for the 4th of July celebration to support Vibrant Community and Neighborhoods $10,000 The net additional impact to the Parks Fund of the major changes described above is $314,594 in 2017 and $314,052 in The additional cumulative impact for the entire ten-year model is $4,445,318. Police Tax Increment.21 Fund The Police Tax Increment.21 Fund is fully balanced for the ten-year period by meeting its minimum fund balance level of 11% every year. The primary source of revenue is.21 of sales tax increment generated from a voter-approved measure to fund expanded police services. The following major changes are included in the proposed budget and ten-year model. The costs expressed are the 2017 costs or the first-year impact: Adds a Commander position and related equipment and vehicle costs to direct expanded police services for the proposed Delta Sector community station to support Arvada s growth in the northwest area which in turn supports Vibrant Community and Neighborhoods $191,003 Adds an Evidence Technician and related equipment and facilities costs to support expanded police services for the proposed Delta Sector community station which in turn supports Vibrant Community and Neighborhoods $94,878 Adds increased fees for the Foothills Animal Shelter to support Vibrant Community and Neighborhoods $13,019 Adds combined capital outlay costs in 2017 and 2018 to fund part of the design and construction of the proposed Delta Sector community station to support Vibrant Community and Neighborhoods $3,532,202 Identifies reductions in professional service to partially offset the proposed additional costs ($25,000) The net additional impact to the Police Tax increment.21 Fund of the major operational changes described above is $273,900 in 2017 and $242,414 in The capital outlay costs of $3,532,202 are limited to 2017 and The additional cumulative impact of the operational and capital costs for the entire ten-year model is $6,892,378.

14 Proposed Biennial Operating and Capital Budget Members of City Council August 31, 2016 Page 8 Police Tax Increment.25 Fund The Police Tax Increment.25 Fund is fully balanced for the ten-year period by meeting its minimum fund balance level of 11% every year. The primary source of revenue is.25 of sales tax increment generated from a voter-approved measure to fund expanded police services. The following major changes are included in the proposed budget and ten-year model. The costs expressed are the 2017 costs or the first-year impact: Adds a Police Officer position and related equipment and vehicle costs to support expanded police services for the proposed Delta Sector community station which in turn supports Vibrant Community and Neighborhoods $125,673 Adds increased fees for the Foothills Animal Shelter to support Vibrant Community and Neighborhoods $13,019 Adds combined capital outlay costs in 2017 and 2018 to fund the remainder of the design and development of the proposed Delta Sector community station to support Vibrant Community and Neighborhoods $1,533,659 Identifies reductions in professional service to partially offset the proposed additional costs ($25,000) The net additional impact to the Police Tax increment.25 Fund of the major operational changes described above is $113,692 in 2017 and $118,505 in The capital outlay costs of $1,533,659 are limited to 2017 and The additional cumulative impact of the operational and capital costs for the entire ten-year model is $2,914,591. Water Enterprise Fund The Water Enterprise Fund is fully balanced for the ten-year period by meeting its minimum fund balance level of 25% every year. This fund accounts for all phases associated with the operation of the water utility and is supported by charges for services and licenses, permit and fees. The following major changes are included in the proposed budget and ten-year model. The costs expressed are the 2017 costs or the first-year impact: Ditch assessment costs imposed by the ditch companies which supports Infrastructure $66,281 Credit card fees assessed by financial institutions for processing credit card payments which supports Infrastructure $65,000 Implementation of a new Water Conservation program to facilitate reductions in customer water use which supports an associated Council Strategic Result $14,000 The net additional impact to the Water Enterprise Fund of the major changes described above is $145,281 in 2017 and $152,689 in The additional cumulative impact for the entire ten-year model is $1,805,793.

15 Proposed Biennial Operating and Capital Budget Members of City Council August 31, 2016 Page 9 Wastewater Enterprise Fund The Wastewater Enterprise Fund is fully balanced for the ten-year period by meeting its minimum fund balance level of 25% every year. This fund accounts for all phases associated with the operation of the water utility is primarily supported by charges for services. The following major changes are included in the proposed budget and ten-year model. The costs expressed are the 2017 costs or the first-year impact: Utility System Technician to handle the increase in utility locates mandated by State Law $69,137 The net additional impact to the Water Enterprise Fund of the major changes described above is $69,137 in 2017 and $73,040 in The additional cumulative impact for the entire ten-year model is $856,476. Golf Course Enterprise Fund The Golf Course Enterprise Fund is not fully balanced over the ten-year period. This fund does not meet its minimum 11% fund balance minimum for eight of ten years and therefore staff will need to develop a strategy to improve the financial model. This fund accounts for all phases of the operation of Lake Arbor and West Woods Golf Clubs. The major change reflected in this fund is the assumption of debt service for the West Woods clubhouse renovation and expansion which is approximately $430,000 annually and about $4.3 million over the ten-year model. Stormwater Fund The Stormwater Enterprise Fund is fully balanced for the ten-year period by meeting its minimum fund balance level of 25% every year. This fund accounts for all phases associated with the operation of the stormwater management plan and is primarily supported by charges for services. There are no major changes proposed for this fund. Hospitality Fund The Hospitality Fund is not fully balanced in the ten-year period as it does not meet its minimum 11% fund balance in each of the last five years. This fund accounts for all revenue and expenses associated with food/hospitality services at the Arvada Center and golf clubs for the enterprise now known by the brand Arvada Events. The primary change associated with this fund is the loss of concession revenue from performing arts events at the Arvada Center. This impact is estimated at $44,000 annually.

16 Proposed Biennial Operating and Capital Budget Members of City Council August 31, 2016 Page 10 Vehicle Fund The Vehicle Fund maintains a Fund Balance to replace every vehicle used for public safety, public works parks and utilities operations. The primary sources of revenue are contributions from the funds that own the vehicles. The following major changes are included in the proposed budget and ten-year model. The costs expressed are the 2017 costs or the first-year impact: Adds one four-wheel drive dump truck to support Infrastructure $65,000 for purchase in 2017 with $5,000 thereafter to amortize the replacement cost Capital Improvements The final section of the budget document referenced in this letter is the Capital Improvement Plan (CIP) summary, found on pages in Volume I. Volume III contains the complete Capital Improvement Plan for As discussed during the July 25 workshop, the budget already allocated funds to certain projects based on the previously approved CIP. These projects include both ongoing and one-time items in the following categories: Transportation - $13,871,592 in 2017 and $11,890,971 in 2018 Facilities - $12,850,000 in 2017 Parks- $1,061,938 in 2017 and $3,571,784 in 2018 Golf - $3,839,581 in 2017 Hospitality - $112,551 in 2017 and 150,706 in 2018 Public Art - $53,045 in 2017 and $54,636 in 2018 Ongoing projects include traffic signal replacement, intersection safety improvements, playground and irrigation renovations and maintenance of public art. One-time capital projects include the W. 72nd and Indiana intersection improvements, Arvada Ridge Station Access, replacement of the West Woods irrigation system and the Club Crest trail. Additional projects summarized in the CIP include repair and replacement of utilities assets within our water, wastewater and stormwater infrastructure. These projects are typically scheduled far ahead of time based on continuous analysis of our infrastructure. Over $14.7 million is allocated for 2017 and approximately $15.1 million is allocated for Additional projects referenced within the discussion of the financial models herein include the Delta Sector community station and the West Woods Golf Clubhouse. These projects are also included in the updated CIP. Council may recall that adoption of the 2016 budget update included the addition of projects recommended by the Citizens Capital Improvements Project Committee (CCIPC). Seventeen projects totaling approximately $72.8 million will now be referenced as part of the updated ten-year CIP.

17 Proposed Biennial Operating and Capital Budget Members of City Council August 31, 2016 Page 11 Finally, it is important to reference the Council s continuous discussion associated with the longterm maintenance of Arvada s local streets and roads. This discussion has recognized a gap of approximately $10 million annually and well over $80 million through If not addressed, this gap will grow as the new ten-year model extending to 2026 is updated. The City Council has courageously engaged in discussions with staff and the community on how to address this matter. This discussion began in July 2015 with the CCIPC report which called attention to this issue and recommended that a sustainable long-term funding source be identified so the problem could be addressed. Discussion continued during workshops and retreats in November 2015, January, March, July and August 2016 wherein data was collected, reviewed and evaluated to determine a course of action. On August 29, 2016, that course of action was determined when the City Council approved the submission of a ballot measure for a half-cent sales and use tax increase to create a long-term and sustainable funding source in order to address the deteriorated condition of Arvada s streets and roads. If this ballot measure is approved by Arvada voters on November 8, staff will immediately get to work in order to execute the program. This action will require an amendment to the CIP in order to authorize traffic congestion relief projects scheduled during the first five years and the phased expansion of road maintenance. Amending the budget will be required because the City Council is expected to adopt the budget on October 17 in advance of the October 31 deadline required by state law. Therefore, budget adoption will occur before the results of the November 8 election are known. If the ballot measure is not approved, staff would propose further discussion with Council and the consideration of options to address the street maintenance gap. If discussion of the options extends into January 2017, staff would propose to freeze implementation of the service expansion elements of the adopted budget as there may need to be consideration of expenditure and service-level reductions in order to address the street maintenance gap. In summary, it would not make sense to hire additional staff and implement actions to expand services if longterm, service-level reductions are to be considered. In closing, I want to thank the Finance staff for their work on this new budget. Preparing the financial system for implementation of the new technology platform and development of new ten-year models that reflect the incredible changes over the last two years has been a major challenge and the entire team has responded in an efficient, effective and professional manner. In fact, all departments have responded to the development of the budget with information, analysis and effort that is entirely consistent with our new Vision, Mission and Values. In service for the Arvada community, we do Dream Big and Deliver! Respectfully submitted, Mark G. Deven City Manager

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19 Proposed BIENNIAL OPERATING AND CAPITAL BUDGET Community Profile 2015 Average Home Price Unemployment Rate in thousands $70 a e d a nc v r A Gla a t a ARVADA PUBLIC SCHOOLS Elementary (K-8) Middle schools (7-8) High schools (9-12) Option school Charter schools Median Household Income $60 $50 $40 Per Capita Income $30 $20 3,400 Acres Parks, Open Space & Trails $338,744 3% 122 PARKS 149 Miles Hiking, Biking & Horseback Trails 13

20 Proposed BIENNIAL OPERATING AND CAPITAL BUDGET The City Charter requires the adoption of budgets for the general fund, special revenue funds, debt service funds, capital projects funds, and proprietary funds. Budgets are not required for fiduciary funds. A fiduciary fund is custodial in nature and is used to account for assets that the government holds for others in an agent or trustee capacity. LEGAL REQUIREMENTS AND BUDGET PROCESS The City of Arvada is a political subdivision of the State of Colorado, located in Jefferson and Adams Counties in the Northwest quadrant of the greater Denver, Colorado, metropolitan area. The City Charter establishes a Council-Manager form of government. The City s governing body consists of an elected Mayor and six -member Council. The Mayor and Council appoint a City Manager. The City of Arvada is a home rule City, governed by its City Charter, the Colorado State Constitution, and City ordinances as adopted by the City Council. DECEMBER Publication of final Budget and CIP OCTOBER Adoption of 2017 Operating Budget and CIP with 10-year considerations SEPTEMBER Council reviews recommended 2017 operating budget with 10-year revenue & expenditure plans JULY Council begins review of Proposed CIP & 10-Year Plan City Council annually appropriates all budgeted funds with the exception of the capital projects funds. Project-length budgets are adopted for these funds. The City adopts budgets for all funds using the modified accrual basis of accounting, the same basis used in the entity s financial statements, consistent with generally accepted accounting principles (GAAP). JANUARY Council Strategic Retreat BUDGET PROCESS CALENDAR JUNE Departments develop Operating Budgets for FEBRUARY Revenue assumption criteria completed MARCH Funding criteria developed for expenditures APRIL Departments present capital requests with associated operating costs MAY City Manager & departments develop CIP recommendations/ Update 10-year Model

21 Proposed BIENNIAL OPERATING AND CAPITAL BUDGET The City Manager submits a proposed budget to the City Council for each of two budget years (January 1 to December 31). The budget includes an explanatory message and is submitted in early September. The proposed budget contains a complete and detailed financial plan for all City funds. The proposed budget is open for public inspection and review. By October 15th, City Council conducts at least one public hearing on the proposed budget. Not less than sixty days prior to the first day of the next fiscal year, City Council adopts the City budget by resolution and the annual appropriation by ordinance. The City prepares a combination line-item and department budget, but the legal level of control is at the fund level which is the amount approved by ordinance. TEN-YEAR FINANCIAL MODELS In 2015, City Council adopted a budget and fiscal policy that utilizes long-range planning for each of the City s major operating funds to maintain the fiscal health of the City. Specifically, the City prepares a two-year budget based on a ten-year financial model. This method of budgeting is used to determine if future impacts of the current proposed budget are fiscally sound. Using this ten-year model, the City is able to test the effects of current financial decisions on future years financial conditions when approving funding requests throughout the organization. There are many variables and factors that impact the ten-year model. These components include the following: beginning fund balance, projected revenues, projected expenditures (including capital expenditures), ending fund balance and required Council established fund balance goals. Revenue and expenditure projections are based on historical trends, various economic and inflation forecasts, and known changes in operations, legislation and capital outlay requirements. The budget process begins with the estimated beginning fund balance for the current year. Projected revenues and expenditures are applied to the beginning balance to calculate the ending balance for the proposed budget year. This process is continued for the next ten years. The resulting calculation of the ending balance in year ten is compared to the calculation of the minimum required fund balance goal. The bottom line is that each fund should work towards maintaining a fund balance that is equal to, or 15 exceeds, the required fund balance goal in the tenth year. The Ten-Year Models section of this document includes summaries of ten-year financial models for the City s major operating funds. The comparison of ending balances to the required fund balance goal in the tenth year reveals whether or not adjustments in the current level of proposed expenditures are necessary in order to maintain longterm financial stability. If the ending balance is equal to or exceeds the fund balance goal, no adjustment in the current proposed budget is necessary. The fund may also contemplate additional expenditures based on the needs in the fund. However, if there is a discrepancy between ending fund balance and the fund balance goal, the City has ten years to either eliminate one-time capital expenditures, reduce ongoing operating expenditures, or some combination of the above to work toward the fund balance goal. Taking a long-term view of the City s current operations insures that the City acts in a fiscally responsible manner. Budgeting in this manner also allows management time to react and respond to changes in the economy and minimizes the effect of budget fluctuations on service delivery. The City defines a balanced budget when proposed expenditures are equal to or less than forecasted revenues and fund balance for each year of the two-year budget. For the budget, the City proposed a balanced budget. Basis of Budgeting Annual budgets for governmental funds (General, Special Revenue and Debt Service funds) are prepared separately using the modified accrual basis of accounting, the same basis of accounting that is used in the entity s financial statements. Under the modified accrual basis of accounting, revenues are recognized in the accounting period in which they become available and measurable, and expenditures are recognized in the accounting period when the liability is incurred, if measurable. Annual budgets are also created for all Enterprise and Internal Service funds. This basis used to budget these funds is also a modified accrual basis of accounting which includes capital expenditures and current debt service principal and interest payments

22 Proposed BIENNIAL OPERATING AND CAPITAL BUDGET and excludes depreciation, amortization and adjustments for accrued compensation absences. FUND STRUCTURE A brief description of the City of Arvada s fund structure follows: Governmental Funds (General, Special Revenue and Debt Service) General Fund - This fund accounts for all the financial resources of the City which are not required to be accounted for in another fund. Lands Dedicated Fund This fund accounts for annexation requirements of a 6% land dedication or an equivalent cash contribution to be used primarily for park purposes. Arvada Housing Authority Fund The Section 8 Housing Assistance Payments Program is administered by the Arvada Housing Authority. Community Development Fund This fund accounts for all entitlements, revenues and expenditures of the Community Development Block Grant (CDBG), the Home Rehabilitation and the Essential Home Repairs programs. Parks Fund This fund accounts for costs associated with the acquisition, design, development, maintenance and beautification of parks, open space and trails within the City. Police Seizure Colorado State Statutes authorize local law enforcement agencies to seize cash and other assets belonging to persons convicted of public nuisance crimes. This fund was established to account for these resources as they are awarded and expended by the City s law enforcement agency. Police Tax Increment Funds The purpose of the tax increment funds is to account for the voter-approved sales tax increment (.21 and.25) to fund expanded police services. Grants Fund This fund accounts for receipt of lottery monies through the Conservation Trust Fund. Debt Service Funds This fund accounts for the payment of principal and interest on the $19,885,000 Series 2009 Sales and Use Tax Revenue Refunding bonds, the $5,675,000 Series 2013 Sales and Use Tax Refunding and Improvement Revenue Bonds, and the $11,820,000 Series 2015 Refunding Certificates of Participation. 16 Capital Improvement Projects Fund This fund accounts for the financial resources to be used for the acquisition or construction of major capital facilities (other than those financed by the Enterprise or Internal Service Funds). The major Governmental Funds, as reported in the 2015 City of Arvada CAFR, were the General Fund, Community Development Fund, Arvada Center Fund, Parks Fund, and the General Capital Improvement Projects Fund. Internal Service Funds Insurance Service Fund This fund accounts for the activities associated with the City s worker s compensation and property and liability insurance activities. Print Shop Fund This fund accounts for the activities associated with the print shop operations. Computer Fund This fund accounts for the accumulation of financial resources necessary for the timely and orderly replacement and maintenance of the City s computers. Vehicles Fund This fund accounts for the accumulation of financial resources necessary for the timely and orderly replacement and maintenance of the City s vehicles and equipment. Building Fund This fund accounts for the accumulation of financial resources necessary for the maintenance of City buildings. Enterprise Funds Water Fund This fund accounts for administration, operations, capital outlay, maintenance, financing and related debt service and billing and collection for the water utility operations. Wastewater Fund This fund accounts for administration, operations, capital outlay, maintenance, billing and collection for the collection, transmission and disposal of sewage and wastewater. Stormwater Fund This fund accounts for all activities necessary to maintain a stormwater management plan. Golf Course Fund This fund accounts for all revenues and expenses of the Lake Arbor and West Woods Golf Courses. Food Services Fund This fund accounts for all revenues and expenses associated with food

23 Proposed BIENNIAL OPERATING AND CAPITAL BUDGET service activities including the operations of the banquet facilities at the Arvada Center for the Arts and Humanities. The major Enterprise Funds, as reported in the 2015 City of Arvada CAFR, were the Water Fund, the Wastewater Fund and the Stormwater Fund. The Golf Course Fund and Food Service Fund did not meet the requirements to be major funds, but were presented as major. Budget Control and Budget Transfers Control of expenditures is exercised at the fund level. Once the City Council adopts the budget, the City s financial management system is used to monitor activity. Quarterly financial reports are prepared for City Council and compare actual expenditures and revenues against the budgeted and prior year amounts. Reviewing actual expenditures to budgeted amounts on a fund-by-fund basis ensures that expenditures are within the legal appropriated limits required by the City s Charter. Once the budget is adopted, transfers between line items for regular operating expenses, within funds and programs, can be accomplished with the approval of the department director. Transfers from any personnel accounts require the approval of the department director and the City Manager. Budget Amendments and Supplemental Appropriation The adopted budget can be amended during the year. This action requires City Council approval in the form of a resolution. At the end of the year City Council approves a supplemental appropriation by ordinance for the budget amendments approved throughout the year for any unforeseen changes arising after the adoption of the annual appropriation. A supplemental appropriation can be made as long as the total amount budgeted does not exceed the actual or anticipated revenues and the available fund balance. Lapsed Appropriations All appropriations not spent at the end of the year lapse into the fund balance applicable to the specific fund except for appropriations in the Capital Improvement Fund which do not lapse until the project is complete or abandoned. 17 Fund Balance Policy A top priority of the City Council is to maintain the fiscal health of the City. Revenue projections are conservative and expenditures are monitored throughout the year. In stable economic times, the combination of these two strategies leads to revenue collections being higher than budgeted and expenditures being lower than budgeted. The combination of the two usually leads to additional monies in the fund balance which can be used for unanticipated increases in expenditures, unforeseen reductions in revenues, financing of one-time capital expenditures, adding to the fund balance or a combination of all the above. If these monies are used for expenditures, their use is not approved until the next year. Included in the budget and fiscal policy adopted by City Council in 2015, is a required fund balance reserve that is established to mitigate current and future risks (e.g. revenue shortfalls or unanticipated expenditures). The City maintains a fund balance in its General Fund equal to 17% of annual expenditures. Three percent is reserved for emergencies as required by Article X of the Colorado Constitution. The remaining 14% protects the City from cyclical fluctuations in revenues or unanticipated expenditures. The City also establishes an individualized fund balance requirement for various operating funds. Use of fund balance reserves must be recommended by the Finance Director, and approved by the City Manager and City Council. Cash Management and Investment Policy The Colorado statutes and the City of Arvada Investment Policy govern general provisions for the City s investment strategies. The investment policy for the City shall apply to the investment of all general and special funds of the City of Arvada over which it exercises financial control. The City s objectives for cash management and investments are: Observation of investment management objectives of safety, liquidity and yield Preservation of capital through the protection of investment principal Maximization of cash available for investment Maintenance of sufficient liquidity to meet the City s cash needs Diversification of the types and maturities of investments purchased to avoid incurring unreasonable credit or market risk regarding a

24 Proposed BIENNIAL OPERATING AND CAPITAL BUDGET specific security, maturity period or institution Maximization of the rate of return for prevailing market conditions for eligible securities Conformance with all federal, state and other legal requirements Debt Policies Short-term borrowing or lease-purchase contracts may be considered for financing major operating capital equipment when the Finance Director, with approval of the City Manager and City Council, determines that this is in the City s best financial interest. Long-term debt will not be used to finance current operating expenses. When long-term debt is warranted for a project, the payback period for bonds used for the project must not exceed the useful life of the project. The City of Arvada will attempt to obtain a minimum AA bond rating and maintain a favorable rating through prudent financial management and adherence to a policy of full disclosure on financial reports. As required by State Statute, appropriate elections will be held to obtain voter approval for debt issuance. Taxpayers Bill of Rights (TABOR) In 1992, voters approved an amendment to the Colorado Constitution (Article X, Section 20) that places limits on revenue and expenditures of the state and local governments. Even though the limit is placed on both revenue and expenditures, the constitutional amendment ultimately applies to a limit on revenue collections. Growth in revenue is limited to the increase in the Denver-Boulder Consumer Price Index plus local growth (new construction and annexation). This percentage is added to the preceding year s revenue base, giving the dollar limit allowed for revenue collection in the ensuing year. Any revenue collected over the limit must be refunded to the citizens. Federal grants or gifts to the City are excluded in the revenue limit. In November 1996, the qualified electors of the City approved Resolution R which reads as follows: Without creating any new tax or increasing any current taxes, shall the City of Arvada be permitted, in 1996 and each year thereafter, to retain and spend City revenues in excess of the spending, revenue raising, or other limits in Article X, Section 20 of the Colorado Constitution, utilizing such revenues for public safety, municipal services, transportation and other public improvements, parks and recreational facilities, and any other lawful public purpose? 18

25 INTRODUCTION Proposed BIENNIAL OPERATING AND CAPITAL BUDGET All the revenue and expenditure assumptions for the Proposed Biennial Operating Budget were made in the context of the FOCUS Arvada framework. Each department s budget was based upon five key elements: a mission statement, a vision statement, department strategic results, lines of business and programs. Using this framework and keeping the customer experience in mind, key results are identified that are to be accomplished during the next two-year cycle. Overall Economy The overall economy has stabilized since the end of the Great Recession. Unemployment is below pre-recession levels, housing activity has continued to be strong and consumer confidence has returned. Business and government balance sheets have improved. The challenge to the current two-year budget and our ten-year financial plan how long will this continue? An evaluation of the overall economy needs to be completed as part of the budget process to determine what could be addressed, both today and into the future. Every current decision has a long life. Each recommendation is included in the ten-year plan, including all operating costs for any new capital or ongoing recommendation. While the city will continue to grow in both population and revenue, the questions will be multi-faceted: what are the priorities as the city changes; what are the levels of services the population wants; what levels of services can be afforded; and can we accomplish our work differently? All of these issues are addressed each and every day. Local Economy The City s general revenue base has several different influences. Two of the major contributors are sales tax and building activity. As illustrated in the discussion below, the City has experienced very positive results in nearly every major revenue category for the past five years. Sales Tax A 3% sales tax rate on all goods sold within the city limits pays for more than 58% of the General Fund services. In addition, it pays for 75 police positions through an additional dedicated 0.46% tax on the same goods. Over the past five years, there has been significant sales tax growth. The following graph illustrates the percentage increase month over month. This type of increase is not expected to continue; however, there is confidence that the City will continue to experience some level of growth for the remainder of Expected sales tax growth for 2017 is 1.5% and 2.5% in This is a slowdown compared to the prior five-year period of time % 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Sales Tax Percent Growth Month-Over-Month Previous Year Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 19

26 Proposed BIENNIAL OPERATING AND CAPITAL BUDGET Building Activity Building permits continue to trend in a positive manner. The following graph demonstrates the trend in singlefamily housing permits. The majority of this growth can be seen in two new housing developments in northwest Arvada. In addition to the single-family home permits, the City has a very large apartment building complex under construction in the Olde Town transit-oriented development area and a large retail store being constructed in the Ralston Fields Urban Renewal area *As of August 19, 2016 Single-Family - Detached Home Permits * Revenues from building activity will generate over $6 million of our 2017 estimated revenues for general operating purposes, including building use tax and building permits for both the General Fund and the Police Tax Increment Funds. The current direction of the economy in Arvada is quite healthy. However, current building activity levels cannot be sustained and revenue estimates related to building activity will decline in the future. Economic Environment Colorado Unemployment The unemployment rate has leveled off and continues to be lower than the national average. As the graph indicates, we are below pre-recession unemployment levels Mar '05 Sept '05 Colorado Unemployment Rate Mar ' Sept Mar Sept Mar Sept Mar Sept Mar Sept Mar Sept Mar Sept Mar Sept Mar 06 '06 '07 '07 '08 '08 '09 '09 '10 '10 '11 '11 '12 '12 '13 '13 '14 Sep '14 Mar '15 Sep '15 Mar '16 20

27 Proposed BIENNIAL OPERATING AND CAPITAL BUDGET Ten-Year Planning All of these indicators and more went into development of the assumptions for the Ten-Year Plans. The Operating Budget document has a separate section on each Fund and the assumptions included in the tenyear plan. The emphasis on the ten-year concept is that this is a planning document. It is important to understand the longterm implications of all current decisions as they relate to both revenues and expenditures. Ten-year plans typically anticipate both upticks and downward trends. Both 2015 and 2016 have reflected the benefits of economic growth, and the resulting increased revenues. With that said, projections in this ten-year plan include impacts of a slowing economy. For example, Revenue growth is expected to be much lower in 2017 and Following is a summary of significant revenue and expenditure assumptions in this updated ten-year plan. Revenues Sales Tax revenue assumes variable growth rates from a low of 1.5% to a high of 3.25%. We use a base growth rate of 3% and adjust up or down depending on a host of factors. Planned development is used as our main driver. Building use tax revenue assumes a 2% growth for all years of the model with a reset of the base in 2020 and again in Revenue changes reflect assumptions on future development in the Ralston Creek Urban Renewal Area. Open Space revenues are derived from sales tax throughout the region. These are assumed to increase between 2% at 3% annually. Water Rates are budgeted to increase 2% in 2017 and 2-3% in the years thereafter. Wastewater Rates increase 3% in 2017 and 3-5% in the years thereafter. Over 67% of the change in rates is due to the regional costs of cleaning wastewater. Stormwater Rates are budgeted for no increase in the odd years of the budget: 2017, 2019, 2021 and 2023 and a 2% rate increase in the even years. Expenditures Personnel-related costs were calculated based upon each employee s current grade and step and include an assumption for future market range adjustments (MRA s). The MRA methodology is not based on cost of living adjustments, but rather an analysis of each job class in an identified market. The model assumes a 2.5% change for all personnel for 2017 and 2018 and 2% thereafter. Medical cost increases are the most unknown due to external national forces and the full implementation of the Affordable Care Act. The City has implemented a near-site clinic with Paladina as a provider to help curb future medical increases. At this time, the increases are budgeted to be 6% for 2017 and 2018, 8% in 2019, 4% for , 8% in 2023 and 4% through the rest of the model. The financial plans also include an estimate for the Cadillac tax (the 40% excise tax on health insurance premiums that exceed a predetermined threshold starting in 2020 as part of the Affordable Care Act). Internal Service costs insurance, building maintenance, and computer costs have a 1% increase through the model. Staff vacancy savings have been assumed in many of the funds. These are not the same across each fund due to the analysis of change in personnel by fund. Vacancy savings range from 1% and go as high as 3%. Every other year, starting in 2017, the ten-year model does assume $200,000 for the community curbside clean-up program. Street maintenance is budgeted at $6.1 million, growing at 2.5%, for the entire model. In 2018 all sales and use tax debt is retired. There will be additional monies available for cash financed capital improvement projects, or a new bond issue, beginning in

28 Proposed BIENNIAL OPERATING AND CAPITAL BUDGET Fund Balances In 2015, City Council adopted a budget and fiscal policy setting out minimum reserve levels, also called fund balance goals. All expenditures and revenues have to be considered within the context of ten-year implications. The goal is to ensure all Funds have a positive balance within the end of the ten-year planning horizon. General Fund: 17% of General Fund expenditures. Parks, Golf and Hospitality: 11% of fund expenditures. Utility Enterprise Funds: 25% of all expenditures. These funds include: Water, Wastewater and Stormwater. Enterprise Funds: 11% of all expenditures. These funds include Golf and Hospitality. Internal Service Funds: These funds have no Council-adopted levels, except for the Print Shop which is 11%. All have healthy balances throughout the model. Performance-Based Budgeting (FOCUS) Arvada is continuing to enhance its implementation of FOCUS. This integrated performance management system is not a project with a defined end date. Instead this is a change of how our staff looks at what we do each day. It provides data for decision making and helps drive funding decisions for the many programs Arvada citizens want and need. Citizens will be able to see the value they receive for their investment on a day to day basis. Recapping the process, on June 17, 2013, City Council adopted the City Strategic Plan 2013 to Their plan outlined four priority areas and 30 strategic goals over the next six years. City staff used the Council s identified strategic measures to develop their department s targets to identify what results are being achieved and what needs refinement. With these measures in place, discussions follow pertaining to process and budget, with the goal of resulting in a true performance-based system. On July 23, 2015, City Council adopted a revision to the strategic plan to recognize updates to current goals and remove goals that have already been achieved. SUMMARY The factors noted above were all evaluated in developing the Operating Budget. After we considered the priorities and the parameters, the 2017 budget process was very focused. As presented in the following section, the emphasis was on previously identified priorities and changes occurring in our environment. The nation is under enormous pressures: healthcare costs, weather impacts on our food supply, uncertain issues at the national leadership level, changing demographics, aging workforce, interest rates, the stock market and international issues. Overall, the City and, it appears, the region, are doing very well. However, there are more unknown economic factors than occurred in the first decade of this century. The Proposed Operating Budget offers an appropriately conservative direction. 22

29 Proposed BIENNIAL OPERATING AND CAPITAL BUDGET PROPOSED REVISED OPERATING AND CAPITAL BUDGET The following pages provide an overview of revenues and expenditures including changes by fund. All Funds Summary The total 2017 Proposed Budget is $197,615,347 with $182,361,088 in revenues to meet these expenditures. Beginning Funds Budgeted Budgeted Funds Budgeted Budgeted Funds Funds Available Revenues Expenditures Available Revenues Expenditures Available General Fund $ 28,176,488 $ 80,881,226 $ 81,513,104 $ 27,544,610 $ 83,004,190 $ 82,158,764 $ 28,390,036 Special Revenue Funds: Grants Fund 1,659, ,996 1,354, , , , ,908 Lands Dedicated 1,352, ,600-1,460, ,718-1,569,147 Community Development 5,399, ,740 1,033,216 5,207, ,741 1,066,628 4,982,840 Arvada Housing Authority 77,672 4,017,743 4,035,913 59,502 4,038,291 4,058,793 39,000 Parks 5,169,159 8,853,381 9,123,396 4,899,144 9,046,984 9,329,950 4,616,178 Police Seizure 452,250 28,939 27, ,871 29,057 28, ,790 Police Tax Increment Fund.21 3,733,942 4,273,262 5,222,966 2,784,238 4,439,503 6,835, ,853 Police Tax Increment Fund.25 5,614,194 5,512,255 5,846,663 5,279,786 5,682,794 6,555,715 4,406,865 Economic Development 407, , , , , , ,707 Total Special Revenue Funds: 23,866,093 25,076,619 27,461,735 21,480,977 25,625,107 29,425,796 17,680,288 Debt Service Funds: COP Series 2005 Debt Service 99,210 1,290,418 1,299,418 90,210 1,300,154 1,310,154 80,210 COP Series 2016 Debt Service - 919, , , ,208 - Debt Service Fund 330,033 3,914,750 3,914, ,733 4,046,900 4,045, ,233 Total Debt Service Funds 429,243 6,124,756 6,133, ,943 6,266,262 6,274, ,443 Capital Projects Funds: Capital Projects Fund 23,998,887 5,202,156 16,740,907 12,460,136 5,361,312 15,418,853 2,402,595 Special Assessments Fund 142, , ,441 Total Capital Projects Funds 24,141,328 5,202,156 16,740,907 12,602,577 5,361,312 15,418,853 2,545,036 Enterprise Funds: Water Fund 84,337,907 32,204,067 30,168,668 86,373,306 32,903,121 29,434,133 89,842,294 Wastewater Fund 6,365,227 13,920,901 14,525,932 5,760,196 14,467,617 17,458,950 2,768,863 Golf Course Fund 223,355 4,561,269 4,779,640 4,984 5,874,860 5,672, ,348 Stormwater Fund 4,604,092 3,416,120 4,256,281 3,763,931 3,442,354 3,805,022 3,401,263 Hospitality Fund 733,893 1,580,338 1,550, ,475 1,626,912 1,600, ,038 Total Enterprise Funds 96,264,474 55,682,695 55,281,277 96,665,892 58,314,864 57,970,950 97,009,806 Internal Service Funds: Insurance Fund 3,191,597 2,145,006 2,310,626 3,025,977 2,167,205 2,340,543 2,852,639 Computers 4,929,782 2,168,666 2,679,891 4,418,557 2,179,327 2,166,261 4,431,623 Print Shop 169, , , , , , ,043 Vehicles 3,389,391 4,053,690 4,188,800 3,254,281 4,131,089 3,907,330 3,478,040 Buildings 2,710, , ,632 2,400, , ,867 2,454,547 Total Internal Service Funds: 14,390,353 9,393,636 10,485,268 13,298,721 9,533,318 9,389,147 13,442,892 Total All Budgeted Funds $ 187,267,980 $ 182,361,088 $ 197,615,347 $ 172,013,721 $ 188,105,053 $ 200,638,272 $ 159,480,502 23

30 Proposed BIENNIAL OPERATING AND CAPITAL BUDGET The major differences between 2016 and 2017 are in the following areas: The market rate adjustment in the ten-year financial plan was 2%. Based on a market rate study, the market rate change is estimated to be closer to 2.5%. The new ten-year financial plan assumes a 2.5% market rate adjustment for 2017 and The increase in health insurance is still estimated to be 6%. The Affordable Care Act (ACA) that proposed a 40% excise tax for health insurance premiums that exceed a pre-determined dollar threshold was postponed to 2020, so the ten-year model reflects this change. The ten-year financial plan creates a placeholder for the estimated cost of this tax. Staff, with the assistance of the City s benefit consultant, will work to change the structure of the City s health plan to mitigate and delay impacts of this legislated cost increase. The Olde Town Hub, scheduled to open in October 2016, will require an increase in operating expenditures related to management and parking enforcement. The City has seen tremendous growth in northwest Arvada. Public Safety will be working on opening a Delta station in 2019, which will require additional staff. All changes to the 2017 and 2018 Budget are as presented in the following table. General Fund Fund/ Department City Manager's Office Community Development Community Development Community Development Finance Finance Human Resources Human Resources Judicial Description Cost Notes Management reductions in the City Manager's Office starting in 2022 Extend Planner I position for three years through 2020 Neighborhood Rehab Program $(228,566) This position will be eliminated starting in $78,484 This position will be extended through 2020 because of increased development activity. $50,000 This program will help to revitalize declining neighborhoods utilizing volunteer labor. This funding will cover materials for the program. Upgrade to TRAKIT $10,000 This increase is for the Trak-it upgrades. Extend Revenue Technician position for one year to 2018 Reduce credit card fee expenditures Add Organizational Development Specialist Long-term disability insurance Add Chief Probation Officer $52,946 This position is taking over additional duties while a business licensing module is added. Starting in 2019, this position will be part-time. $(15,000) Credit card fees have been paid in Finance. Starting in 2017, they will be costed to the programs that accept credit cards. Fees will be reduced in Finance and increased in other programs. $127,824 This position will coordinate the organizational development program that will include Arvada University. $45,000 This represents the increase in long-term disability insurance policy. $114,649 The Court currently lacks appropriate resources to adequately address recidivism, compliance rates and behavioral changes. This position will handle the probation program. Judicial Add Court Clerk $81,285 This position is needed to handle the increase in the number and complexity of cases. This position will start in Judicial Court revenue $(165,000) Additional court revenues based on increased caseload 24

31 Proposed BIENNIAL OPERATING AND CAPITAL BUDGET General Fund (continued) Fund/ Department Judicial Judicial Judicial Judicial Public Safety Public Safety Public Safety Public Safety Finance Description Cost Notes Additional funding for relief judges Additional funding for court-appointed attorneys Additional funding for interpreters Funding for court technology Add two Police Sergeants Reduce one Police Services Technician Reduce various line items Jefferson County Crime Lab Foothills Animal Shelter $16,000 This will supplement funding for relief judges. $40,000 This is needed for court-appointed attorneys for indigent defendants which has increased due to state legislation. $5,600 This will supplement funding for interpreters. $21,900 This will fund court technology including Court Smart and Alert Works and costs connected with new servers and software updates. $391,210 These positions and related costs are needed for the new Delta station. $(78,760) This position will be eliminated starting in 2017 since the City will be entering into a third-party parking enforcement contract. $(285,000) After a comprehensive review of the budget, Public Safety was able to reduce funding in various line items. $28,000 Increase in Jefferson County Crime Lab costs per the intergovernmental agreement. $78,116 Increases the fees paid to Foothills Animal Shelter to assist with debt service for the center. Public Safety Academy costs $20,000 Increase in academy costs for new police recruits. Public Safety Parking Enforcement services $195,000 This will cover the funding for a parking enforcement contract for the Olde Town Hub and surrounding areas. Public Safety Taser replacement $25,000 This will replace 36 of 180 tasers. The tasers will now be set up on a five-year replacement schedule. Public Safety Bicycle replacement $4,400 This will add two new bicycles for the Delta station and start a bicycle replacement program for existing bicycles. Public Safety Police recruit ammunition $8,000 This increase is to provide ammunitions to police recruits per a new requirement at the academy. Public Works Add Craftsworker $63,631 This position is needed to handle the additional workload in facilities. Public Works Public Works Olde Town Hub management and maintenance Maintenance and materials $211,000 This will cover the contract for management and maintenance of the Olde Town Hub. $100,000 This will increase the amount of materials that are used for asphalt patching, potholes, concrete curb, gutter, sidewalk and cross-pan replacement and weed spraying and mitigation. Public Works Trash removal $20,000 This increase will be used to address trash removal in rights of way, ditches and creeks. Public Works Public Works Snow and ice material Parking management equipment $100,000 This will increase the snow and ice material due to an increase in lane miles plowed and the use of more costly salts and liquid de-icers to reduce sweeping costs and air quality issues resulting from sand materials. $150,000 This is to purchase parking management equipment in the area around the Olde Town Hub starting in

32 Proposed BIENNIAL OPERATING AND CAPITAL BUDGET General Fund (continued) Fund/ Department Public Works Public Works Public Works Description Cost Notes Regional Tranasportation District (RTD) contribution Parking Management revenue Increase utilities for Olde Town Hub $(44,000) This is RTD's share of operating expenses for the Olde Town Hub. $(50,000) This represents parking management revenue from the Olde Town Hub. $30,000 This will cover the electrical and water charges for the Olde Town Hub. Public Works DRCOG aerial $8,500 This represents the City's share of an aerial photography program that will include planimetric information. This is intended to be updated on a two-year cycle. Public Works Temporary and overtime wages $50,000 This will increase temporary wages to be used for asphalt patching and concrete and right-of-way maintenance and overtime for plowing of primary and secondary routes. Utilities Credit card fees $70,000 This increase is needed to fund the credit card fees that are assessed by financial institutions for processing credit card payments. Other Funds Fund/ Department Parks/Parks, Golf & Hospitality Parks/Parks, Golf & Hospitality Parks/Parks, Golf & Hospitality Parks/Parks, Golf & Hospitality Parks/Parks, Golf & Hospitality Parks/Parks, Golf & Hospitality Parks/Parks, Golf & Hospitality Parks/Parks, Golf & Hospitality Public Safety/T21 Public Safety/T21 Description Cost Notes Add Parks Worker II Add Parks Program Manager Extend Administrative Coordinator position $73,916 This position is needed for increased parks maintenance. $106,071 This position will handle administrative duties of the parks program. $89,227 This position was set to end in The position is now a full FTE throughout the ten-year model. Temporary wages $2,655 This will increase the temporary wages budget at the Majestic View Nature Center. Fireworks $10,000 This will increase the budget for the 4th of July celebration due to increased firework costs and the decrease in duration. Slope Mower $42,024 This will add a second slope mower for open space mowing. Mowing $28,000 This will increase the budget for open space mowing. Mobile devices $20,550 This will fund the purchase of 25 ipads used for collecting mapping and inventory data and referencing diagrams and maps for all parks. Add one Commander position Add Evidence Technician $191,003 This change adds a Commander and related equipment and vehicle costs to direct expanded police services for the new Delta station. $94,878 The evidence unit is currently understaffed. This position will help to maintain current requirements and address future workload. 26

33 Proposed BIENNIAL OPERATING AND CAPITAL BUDGET Other Funds (continued) Fund/ Department Public Safety/T21 Public Safety/T21 Public Safety/T22 Public Safety/T22 Public Safety/T22 Description Cost Notes Foothills Animal Shelter Reduce various line items Add one Police Officer Foothills Animal Shelter Reduce various line items $13,019 Increases the fees paid to Foothills Animal Shelter to assist with debt service for the center. $(25,000) After a comprehensive review of the budget, Public Safety was able to reduce funding in various line items. $125,673 Jefferson County plans to build a K-8 school in northwest Arvada. The City currently has a School Resource Officer (SRO) in all high schools and K-8 schools. This position will allow Public Safety to keep pace. This position (including related equipment costs) may be partially offset over three years through a Department of Justice grant. $13,019 Increases the fees paid to Foothills Animal Shelter to assist with debt service for the center. $(25,000) After a comprehensive review of the budget, Public Safety was able to reduce funding in various line items. Water Credit card fees $65,000 This increase is needed to fund the credit card fees that are assessed by financial institutions for processing credit card payments. Water Water Vehicle Fund/ Public Works Computer Fund/ Public Works Wastewater Ditch assessment charges Water conservation program $66,281 This will cover the increased ditch assessment charges. $14,000 This increase will be used to identify water conservation incentive programs. One-ton dump truck $65,000 Purchase of a new 4 X 4 truck and a dump truck body with a plow and sander for concrete and drainage projects in the summer and snow and ice control in the winter. Auto Cad license $3,450 This is needed to cover the increase cost of Auto Cad licenses for GIS. Add Utility System Technician $69,137 This position will handle the increase in utility locate requests which is mandated by State Law. 27

34 Proposed BIENNIAL OPERATING AND CAPITAL BUDGET 2017 Proposed Operating Revenue by Source Intergovernmental Reveues 13.11% Licenses & Permits 7.97% Transfers 7.19% Fines & Forfeits 1.10% Miscellaneous 2.33% Other Financing Sources 0.04% Taxes 42.93% Taxes $78,290,709 Charges for Services $46,196,729 Intergovernmental Reveues $23,902,603 Transfers $13,105,893 Licenses & Permits $14,542,845 Charges for Services 25.33% Fines & Forfeits $2,014,294 Miscellaneous $4,233,015 Other Financing Sources $75,000 Total $182,361, Proposed Expenditures by Category Miscellaneous 0.45% Transfers 8.58.% Debt Service 4.32% Supplies 6.96% Personnel Costs 36.52% Professional Services 10.36% Services & Charges 14.59% Capital Maintenance & Replacement 18.22% Personnel Costs $72,162,551 Capital Maintenance & Replacement $36,002,472 Services & Charges $28,826,416 Professional Services $20,472,525 Supplies $13,747,928 Debt Service $8,544,748 Miscellaneous $892,300 Transfers $16,966,407 Total $197,615,347 28

35 Proposed BIENNIAL OPERATING AND CAPITAL BUDGET Revenues Taxes, Charges for Services and Intergovernmental Revenue comprise 65% of the total revenues the City generates to pay for all services. These three types of revenues are expected to generate over $118 million of the $181 million for Taxes Taxes provide over 43% of the total budgeted revenue. The major sources of taxes are as follows with over $78 million going to the General, Debt Service and Police Tax Increment Funds Actual 2016 Revised 2017 Proposed Budget 2018 Proposed Budget Sales and Use Tax $55,025,620 $56,646,583 $57,310,015 $59,129,048 Property & Ownership Tax 5,073,521 5,930,433 5,979,416 6,407,649 Auto Use Tax 8,042,434 7,494,379 7,421,700 7,347,483 Building Use Tax 6,015,272 3,024,500 2,519,849 2,570,246 Franchise 4,350,525 4,252,883 4,322,584 4,394,010 Other 659, , , ,073 Total Taxes $79,167,322 $77,982,274 $78,290,709 $80,592,509 $ Change (1,185,048) 308,435 2,301,800 % Change -1.50% 0.40% 2.94% Sales Taxes Sales Tax Collections $60,000,000 $50,000,000 $40,000,000 $30,000,000 $20,000,000 $10,000,000 $ Revised 2017 Proposed Budget 2018 Proposed Budget General Fund Tax Increment Sales tax collections have increased for six straight years ( ) with 2016 collections budgeted for a 3.0% increase. There have been some signs of a softening in the economy, so the expectation in 2017 is an increase of only 1.5%. It is also assumed there will be some loss from the Ralston Creek Urban Renewal Area. 29

36 Proposed BIENNIAL OPERATING AND CAPITAL BUDGET Property Tax The City has had the same property tax rate since 1993, or for over 23 years 4.31 mills or 4.31 cents for every $100 of assessed value. Assessed value is 7.96% of appraised value on residential and 29% on all other property. Real property is appraised every odd-numbered year and collections lag one year from valuations. There was more than a 20% increase in 2016 collections (based on 2015 valuations) due to the increase in property valuations. The budget for property tax in 2017 is $5,611,710, which is only a.7% increase over 2016 since there will be no revaluation in Assessed Valuation to Property Tax Collections Property Tax Revenue $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $2,000,000,000 $1,500,000,000 $1,000,000,000 $500,000,000 Assessed Valuation $1,000,000 $ Revised 2017 Proposed Budget 2018 Proposed Budget 0 Prop Tax Revenue Assessed Valuation Use Taxes We have three types of use taxes: General, Auto and Building Use. Auto Use and Building Use tax revenue have seen tremendous growth over the past five years, with double-digit increases for This reflects the economy in Colorado and continued growth in Arvada. The budget for 2017 is based on a resetting of the base for both auto and building use tax, as the growth for the past five years is not sustainable into the future. General use tax is a stable source of revenue of approximately $1.8 million on an annual basis. Auto, Building and General Use Tax $16,000,000 $14,000,000 $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $ Revised 2017 Proposed Budget Auto Use Building Use General Use 2018 Proposed Budget 30

37 Proposed BIENNIAL OPERATING AND CAPITAL BUDGET Charges for Services The largest area of this revenue source is for the Water, Wastewater and Stormwater revenues. The following table highlights these revenue sources. Water rates will increase 2% in 2017 and Wastewater rates will increase 3% in There will be no increase in Stormwater rates. Utility Rate Revenue $40,000,000 $35,000,000 $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $ Revised Water Wastewater Stormwater 2017 Proposed Budget 2018 Proposed Budget Intergovernmental This revenue category declined sharply in 2010 and has experienced limited growth since. There are two primary reasons. The Highway Users Trust Fund (HUTF) is from the sales tax on vehicle gas purchases. The State allocates the resources in a methodology based on number of vehicles and population. The challenge with this source of revenue is that the actual tax is a fixed amount on total gallons sold. As vehicles become more efficient and due to the economic conditions, the population drives less, and the total resource decreases. The second major source comes from the Jefferson County mill levy for road and bridge costs. They have the authority to change this allocation each year, and have been decreasing the mill levy for this purpose. Statistically, this revenue type has remained stable. The challenge is that these monies are used for street maintenance and these costs have been growing 8% to 11% over the past five years, while the revenue has been flat. This requires that the City dedicate more general revenues to street maintenance expenses. $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 Intergovernmental Revenue $ Revised 2017 Proposed Budget 2018 Proposed Budget HUTF County Road and Bridge 31

38 Proposed BIENNIAL OPERATING AND CAPITAL BUDGET Interest Earnings Interest earnings have not seen much of a change since the Great Recession. The following graph provides a short history of our total interest earnings and rate of return for the past five years, with the revised 2016 estimate and the 2017 and 2018 Budget. Given the national trends, the Federal Reserve indicating that interest rates will remain low with gradual growth for some time, and international challenges, we do not anticipate the yields growing substantially over the next two years. Interest Earnings and Yield $2,500, % Interest $2,000,000 $1,500,000 $1,000,000 $500, % 0.80% 0.60% 0.40% 0.20% Yield $ Revised 2017 Proposed Budget 2018 Proposed Budget 0.00% Revenue Summary Overall, revenues are expected to be stable from 2016 to Although sales and use taxes are going to increase at approximately inflationary levels, we do not expect the level of building activity to continue and have reduced 2017 estimates for building-related revenue. Water and Wastewater rates will increase, primarily due to cost increases from Denver Water and Metro Wastewater, the utility s providers. 32

39 Proposed BIENNIAL OPERATING AND CAPITAL BUDGET Expenditures by Category As the following chart illustrates, salaries comprise 37% of the total costs in Actual 2016 Revised 2017 Proposed Budget 2018 Proposed Budget Salaries $65,275,464 $69,196,497 $72,162,551 $75,532,712 Capital 9,033,115 33,628,892 36,002,472 36,233,344 Services & Charges 38,667,261 27,203,995 28,826,416 28,104,518 Professional Services 21,998,502 26,776,691 20,472,525 20,377,274 Supplies & Expenses 10,542,025 14,151,689 13,747,928 13,655,320 Debt Service 17,505,527 7,764,757 8,544,748 8,690,460 Miscellaneous 1,173,510 1,090, ,300 1,346,344 Transfers 25,353,093 25,659,358 16,966,407 16,698,300 A review of the larger costs is provided. $189,548,495 $205,472,239 $197,615,347 $200,638,272 Salaries 2015 Actual 2016 Revised 2017 Proposed Budget 2018 Proposed Budget Salaries and Wages $43,055,551 $48,230,303 $51,056,383 $53,243,842 Temporary Wages 3,769,931 2,170,367 2,301,887 2,606,145 Benefits 16,265,342 16,578,081 17,907,042 18,815,629 Overtime and Other 2,184,640 2,217, , ,096 Total Personnel Costs $65,275,464 $69,196,497 $72,162,551 $75,532,712 $ Change 3,921,033 2,966,054 3,370,161 % Change 6.01% 4.29% 4.67% For 2017, we have assumed a 2.5% Market Rate Adjustment for all positions and that each employee will receive their appropriate step increase. The remaining increase in salaries and wages is due to eleven new positions, primarily in the General, Parks, Wastewater, and Police Tax Increment Funds. Benefits are primarily comprised of health and dental costs. Total health costs in 2017 are expected to be $9,895,058. This is an 8% increase over the 2016 budgeted amount for current benefitted employees. This reflects the estimated 6% increase in health insurance premiums and benefits for the eleven new positions. Most of the overtime and special pays are in the streets, police and water divisions, all due to general emergencies such as weather and other extraordinary events. 33

40 Proposed BIENNIAL OPERATING AND CAPITAL BUDGET Services and Charges 2015 Actual 2016 Revised 2017 Proposed Budget 2018 Proposed Budget Housing Program $3,567,819 $3,633,632 $3,651,477 $3,660,604 Insurance 3,108,940 2,917,972 2,964,524 2,982,233 CDBG Program 467, , , ,498 Utilities 8,405,504 9,294,224 10,915,376 9,916,719 Program Expense 2,956,946 3,004,413 2,526,803 2,588,329 Training 808,010 1,007,029 1,010,356 1,030,761 Contract Services 1,311,458 1,333,443 1,664,029 1,586,067 Other 18,040,935 5,541,854 5,608,876 5,840,307 Total Services and Charges $38,667,261 $27,203,995 $28,826,416 $28,104,518 $ Change (11,463,266) 1,622,421 (721,898) % Change % 5.96% -2.50% The services and charges include expenses related to paying other agencies or organizations. Examples include: the utility costs the City pays for electricity, natural gas, water, wastewater and stormwater; monies paid to Denver Water for the purchase of water and the services to Metro Wastewater for the treatment of the City s sewage. The City pays outside consultants for a variety of trainings, including state and federal mandated training. Capital The City now has a Capital Improvements Plan (CIP) document detailing both the 2017 and 2018 appropriations as well as a ten-year plan for the City s capital expenditures. The final version of this document will include a summary of the CIP appropriations under a separate tab. For the specificity of projects, please see the Capital Improvement Plan document. The City has a legal provision to dedicate 60% of the first cent of sales tax to infrastructure, major capital maintenance, new construction or debt service. This is referred to as money after the section of the City s code authorizing the sales tax dedication for capital needs. As the following table shows, in 2017 a total of $9.6 million will be generated from sales tax for capital needs. Of this total, $4.3 million will be used to pay for debt service issued for previous capital needs. The remainder will be dedicated to capital improvement projects. Funding 2017 Proposed Budget 2018 Proposed Budget $9,541,012 $9,835,097 Debt Service Obligations (4,338,856) (4,473,785) Transfer to the capital improvement program $5,202,156 $5,361,312 In addition to these monies, the CIP recommendations include using water, wastewater and stormwater rates for major utility projects. There will also be a variety of grants and other intergovernmental revenues to meet various needs. 34

41 Proposed BIENNIAL OPERATING AND CAPITAL BUDGET The table below is an overview of the types of capital expenditures. Category 2017 Proposed Budget 2018 Proposed Budget General Government $13,423,045 $ 574,636 Transportation 13,871,592 11,890,971 Parks, Golf, & Hospitality 5,014,070 3,722,489 Utilities 13,935,376 15,241,498 TOTAL $46,244,083 $31,429,594 Debt Service The City s sales tax debt obligation will be paid off in This area also accounts for the Certificates of Participation issued in 2015, this obligation to be retired by The 2017 budget includes debt service for Certificates of Participation that will be issued in the fall of 2016 for capital improvement projects. Transfers There are a host of transfers to and from various departments. Examples include the following highlights: From To Amount General Fund Parks 3,283,227 General Fund Certificate of Participation 1,290,418 General Fund CIP 6,683,859 General Fund AEDA 815,703 General Fund Golf 466,311 Water CIP 357,203 Water General Fund 2,074,022 Wastewater General Fund 781,203 The largest transfers are from the General Fund to help support the activities of the other departments missions. The Water and Wastewater Funds pay the General Fund for building, utility and overhead expenses of operating these lines of businesses. Conclusion The City has seen tremendous growth in northwest Arvada over the past three years. This has put a strain on existing City resources. Therefore, the budget recommends the addition of twelve new positions. Five positions will be in Public Safety. It is anticipated that a new Delta station will open in 2019 to serve northwest Arvada. Two positions will be added in the courts area. A new probation program will be added and a court clerk will be added in The planner position that was set to end in 2017 will now be extended to 2020 due to the increase in building activity. The City has been working with the Regional Transportation District (RTD) to build a transit hub in Olde Town in anticipation of the opening of the G Line in October. While the City contributed much of its one-time money for the construction of the hub, this budget will add operating and maintenance funds for ongoing support of this new facility. This budget also adds funding for parking enforcement of the hub and surrounding areas. This budget also recommends building on the base of our services in the parks area. The City s parks 35

42 Proposed BIENNIAL OPERATING AND CAPITAL BUDGET are one of the most important assets. This budget adds one additional parks worker position to maintain the new and expanded parks created in the past several years. A parks program manager will also be added to assist with management of the parks. Finally, the City first introduced FOCUS, the performance management system in This system sets strategic goals and tracks the City s performance and accomplishments towards those goals. These goals cannot be accomplished without the commitment and dedication of each and every employee of the City. The addition of the organizational development specialist position will help maintain the organizational culture that will ensure the success of FOCUS. Bryan Archer Director of Finance 36

43 Proposed BIENNIAL OPERATING AND CAPITAL BUDGET Revenue Trend Analysis 2015 Actuals, 2016 Revised, 2017 and 2018 Proposed Budgets 2015 Actual 2016 Revised 2017 Proposed 2018 Proposed Budget Budget General Fund $ 87,106,650 $ 80,269,470 $ 80,881,226 $ 83,004,190 Grants 554, , , ,030 Lands Dedicated 191, , , ,718 Drainage Community Development 724, , , ,741 Arvada Housing Authority 3,987,864 3,993,440 4,017,743 4,038,291 Parks 8,284,366 8,568,827 8,853,381 9,046,984 Police Seizure 21,720 28,825 28,939 29,057 COP Series 2005 Debt Service 13,130,467 1,299,510 1,290,418 1,300,154 COP Series 2016 Debt Service , ,208 Police Tax Increment.21 4,327,666 4,402,624 4,273,262 4,439,503 Police Tax Increment.25 5,181,055 5,766,651 5,512,255 5,682,794 Debt Service 3,917,575 3,921,400 3,914,750 4,046,900 Capital Projects 13,229,931 6,856,843 5,202,156 5,361,312 Construction Special Assessments 104, Water 34,689,638 31,880,692 32,204,067 32,903,121 Wastewater 14,671,596 13,288,152 13,920,901 14,467,617 Golf Courses 5,011,529 5,095,837 4,561,269 5,874,860 Stormwater 6,610,485 3,330,283 3,416,120 3,442,354 Food Services 1,416,443 1,431,116 1,580,338 1,626,912 Insurance 1,895,499 1,908,294 2,145,006 2,167,205 Computers 2,080,927 1,921,455 2,168,666 2,179,327 Print Shop 386, , , ,251 Vehicles 4,335,007 3,759,002 4,053,690 4,131,089 Buildings 680, , , ,446 AEDA 1,204, , , ,989 Total All Budgeted Funds $ 213,745,682 $ 181,129,947 $ 182,361,088 $ 188,105,053 37

44 Proposed BIENNIAL OPERATING AND CAPITAL BUDGET Expenditure Trend Analysis 2015 Actuals, 2016 Revised, 2017 and 2018 Proposed Budgets 2015 Actual 2016 Revised 2017 Proposed 2018 Proposed Budget Budget General Fund $ 80,424,377 $ 89,622,856 $ 81,513,104 $ 82,158,764 Grants 418, ,100 1,354, ,135 Lands Dedicated 1,492, , Drainage Community Development 1,465,474 1,000,766 1,033,216 1,066,628 Arvada Housing Authority 3,915,141 4,004,269 4,035,913 4,058,793 Parks 7,766,734 8,373,504 9,123,396 9,329,950 Police Seizure 10,686 26,523 27,318 28,138 COP Series 2005 Debt Service 13,131,598 1,308,510 1,299,418 1,310,154 COP Series 2016 Debt Service , ,208 Police Tax Increment.21 3,970,196 4,308,044 5,222,966 6,835,888 Police Tax Increment.25 4,271,619 5,227,961 5,846,663 6,555,715 Debt Service 3,918,000 3,917,400 3,914,050 4,045,400 Capital Projects 21,024,495 13,614,575 16,740,907 15,418,853 Construction Special Assessments 520, Water 18,318,898 26,594,561 30,168,668 29,434,133 Wastewater 10,723,160 19,913,925 14,525,932 17,458,950 Golf Courses 4,726,539 5,203,500 4,779,640 5,672,496 Stormwater 3,039,502 4,674,191 4,256,281 3,805,022 Food Services 1,314,707 1,401,855 1,550,756 1,600,349 Insurance 2,251,586 2,425,611 2,310,626 2,340,543 Computers 1,520,140 3,703,699 2,679,891 2,166,261 Print Shop 336, , , ,146 Vehicles 3,927,928 7,066,440 4,188,800 3,907,330 Buildings 44, , , ,867 AEDA 1,016, , , ,549 Total All Budgeted Funds $ 189,548,495 $ 205,472,239 $ 197,615,347 $ 200,638,272 38

45 Ten-Year Models TEN-YEAR MODEL ASSUMPTIONS All Funds Personnel-related expenses are calculated in detail based upon each employee s current grade and step and include future estimated market rate adjustments. The market rate adjustment is budgeted at 2.5% for all positions in 2017 and 2018 and 2% for Increases for the City s medical plan are budgeted at 6% for , 8% for 2019, 4% for , 8% for 2023 and 4% for 2024 and beyond. The plans also include an estimate for the Cadillac tax (the 40% excise tax on health insurance premiums that exceed a predetermined threshold starting in 2020). Transfers to fund insurance lines, building maintenance, vehicle replacement, computer maintenance and computer replacement have a 1% increase throughout the models. Transfers to fund vehicle maintenance and risk management services are increased at 3% throughout the models. General Fund The fund balance goal is 17% of all expenditures. Sales tax revenue assumes variable growth rates from a low of 1.50% to a high of 3.25%. We use a base growth rate of 3% and adjust up or down depending on a host of factors. Planned development is used as the main driver. Building use tax revenue assumes a base of $2,142,000 in 2016 and a 2% growth until 2019, with a tax base reset to $2,000,000 in 2020 and 2% growth thereafter. Assumes revenue offsets of increasing amounts for pending redevelopment in the Ralston Creek Urban Renewal Area. Assumes $6.1 million for streets maintenance for with a 2.5% growth factor. Assumes a salary and benefits vacancy savings of 3% in 2017 and 2018 and 2.5% for 2019 and beyond. All non-personnel expenditures increase 1.5% each year. Parks The fund balance goal is 11% of all expenditures. Open Space revenues are budgeted to increase at 3% for all years of the model The City s attributable share of Open Space revenue will continue to be used 100% for park maintenance and operations in 2017 and thereafter. Police Tax.21 The fund balance goal is 11% of all expenditures. Sales tax and building use tax assumptions are the same as the General Fund and also assumes an increase for development in the Ralston Creek Urban Renewal Area. Assumes construction of the Delta station in 2017 and 2018 ($3,500,000 of the $5,000,000 total cost). Model maintains a fund balance above the 11% goal through Police Tax.25 The fund balance goal is 11% of all expenditures. Sales tax and building use tax assumptions are the same as the General Fund and also assumes an increase for development in the Ralston Creek Urban Renewal Area. Assumes construction of the Delta station in 2017 and 2018 ($1,500,000 of the $5,000,000 total cost). Model maintains a fund balance well above the 11% goal through

46 Ten-Year Models TEN-YEAR MODEL ASSUMPTIONS (Continued) Water The working capital goal is 25% of expenditures. Rates are budgeted to increase 2% in 2016 and increases of 3-4% thereafter. Wastewater The working capital goal is 25% of all expenditures. Rates are budgeted to increase 2.3% in 2016 and increases of 3-4% thereafter. Golf The working capital goal is 11% of all expenditures. Assumes an increase in rates and a new menu at West Woods after completion of the expansion and in most years thereafter. Assumes that the Golf fund will also pay for its share of the debt to finance the expansion. No debt payments in 2017 and 2018 and increasing payments of $417,000 to $452,000 from Storm Water The working capital goal is 25% of all expenditures. There is no increase in rates for 2017 and a 2% increase in 2018, 2020, 2022, 2024 and Hospitality The working capital goal is 11% of all expenditures. Assumes no operating transfer to or from the General Fund. Insurance Services The fund balance goal is $3,000,000 plus the annual actuarial projection for limited loss. Revenues for insurance lines are assumed to increase at 1% throughout the model. Revenues for risk management services are increased at 3% throughout the model. 40

47 Ten-Year Models Ten Year Financial Models General Fund - Table Actual Actual Revised Proposed Proposed Estimated Estimated Estimated Estimated REVENUES Taxes $ 61,392,739 $ 65,928,752 $ 64,356,599 $ 65,064,143 $ 66,921,812 $ 74,004,078 $ 78,065,823 $ 83,911,925 $ 87,071,814 Licenses, Permits and Fees 4,832,991 5,152,382 3,045,904 3,036,003 3,037,805 2,671,424 2,757,057 2,845,969 2,938,288 Intergovernmental 5,052,092 6,034,016 5,375,294 5,082,070 5,177,849 5,340,489 5,508,381 5,681,697 5,901,159 Charges for Services 6,071,757 6,204,553 4,058,770 4,042,498 4,157,154 4,375,978 4,608,130 4,854,417 5,115,702 Fines & Forfeits 1,609,392 1,846,112 1,830,984 2,014,294 2,037,787 2,079,329 2,121,626 2,164,855 2,217,883 Miscellaneous 1,154,999 1,654,157 1,394,395 1,423,395 1,446,395 1,561,395 1,587,395 1,446,395 1,375,395 Revenue Transfer 466, , , , , , , , ,108 Total General Fund Revenue $ 80,580,957 $ 87,106,649 $ 80,269,470 $ 80,881,226 $ 83,004,190 $ 90,237,472 $ 94,865,662 $ 101,135, ,864,350 $ EXPENDITURES Personnel $ 38,757,628 $ 40,471,747 $ 42,629,347 $ 43,892,197 $ 45,609,278 $ 48,747,080 $ 51,223,059 $ 54,367,564 $ 57,238,995 Services & Charges 7,055,737 6,831,368 10,007,118 11,323,317 10,140,023 10,622,779 11,137,191 11,579,081 12,258,464 Supplies & Expenses 4,829,449 4,833,441 5,428,503 5,628,783 5,868,256 6,155,532 6,323,423 6,613,290 6,893,410 Contract & Leases 8,795,533 9,993,770 11,633,494 9,942,662 9,634,048 9,937,544 10,324,563 12,282,422 10,975,082 Inventory 5,377 8, Capital Maintenance 381, , , , , , , , ,528 Capital Outlay 44,949 1,291, ,883 97,229 33,317 34,324 35,362 36,431 37,532 Transfers 15,534,889 16,669,272 19,192,742 10,091,986 10,330,657 15,241,528 16,193,614 15,974,447 18,316,618 Other 3,489 2,041 3,607 3,661 3,716 3,828 3,944 4,063 4,186 Total General Fund Expenditures $ 75,408,449 $ 80,424,375 $ 89,622,856 $ 81,513,104 $ 82,158,764 $ 91,294,762 $ 95,806,364 $ 101,435, ,316,814 $ Fund Balance, Beginning $ 25,675,091 $ 30,847,599 $ 37,529,873 $ 28,176,488 $ 27,544,610 $ 27,923,015 $ 25,395,886 $ 22,790,162 20,461,864 Fund Balance, Ending $ 30,847,599 $ 37,529,873 $ 28,176,488 $ 27,544,610 $ 28,390,036 $ 26,865,725 $ 24,455,184 $ 22,489,553 $ 19,009,400 $ Fund Balance Goal (17% of Expenditures) $ 12,819,436 $ 13,672,144 $ 15,235,885 $ 13,857,228 $ 13,966,990 $ 15,520,110 $ 16,287,082 $ 17,244,114 $ 18,073,858 Excess/(Deficiency) $ 18,028,163 $ 23,857,730 $ 12,940,602 $ 13,687,382 $ 14,423,047 $ 11,345,616 $ 8,168,102 $ 5,245,440 $ 935,541 *2019, 2021, 2023 and 2025 data has been collapsed from this chart to allow for optimal presentation. 41

48 Ten-Year Models Ten Year Financial Models Parks - Table Actual Actual Revised Proposed Proposed Estimated Estimated Estimated Estimated REVENUES Licenses, Permits and Fees $ 48,336 $ 44,773 $ 54,334 $ 55,964 $ 17,642 $ 61,153 $ 64,878 $ 68,829 $ 73,020 Intergovernmental 3,685,566 3,983,094 4,196,889 4,322,796 4,409,252 4,677,775 4,962,652 5,264,877 5,585,508 Charges for Services 69,196 67,033 54,235 68,222 70,269 74,548 79,088 83,905 89,015 Miscellaneous 1,037,809 1,062,397 1,099,871 1,137,996 1,168,080 1,238,524 1,308,378 1,371,168 1,452,047 Revenue Transfer 2,937,398 3,127,070 3,163,498 3,268,403 3,381,741 3,587,230 3,805,254 4,036,583 4,281,907 Total Revenues $ 7,778,305 $ 8,284,366 $ 8,568,827 $ 8,853,381 $ 9,046,984 $ 9,639,230 $ 10,220,250 $ 10,825,361 11,481,497 $ EXPENDITURES Personnel $ 4,508,414 $ 4,528,480 $ 4,822,340 $ 5,196,186 $ 5,413,526 $ 5,816,039 $ 6,192,155 $ 6,588,358 $ 6,940,349 Services & Charges 1,468,574 1,691,756 1,702,623 1,900,102 1,935,472 2,040,086 2,150,163 2,268,993 2,394,132 Supplies & Expenses 1,344,941 1,303,575 1,358,387 1,524,938 1,571,489 1,652,285 1,741,918 1,865,904 1,963,824 Contract & Leases 163, , , , , , , , ,430 Inventory 431 (9) 2,122 2,185 2,251 2,388 2,534 2,688 2,852 Capital Maintenance 90,378 77, , , , , , , ,975 Capital Outlay 23, , , Transfers 24,074 3,268 3, Other Total Expenditures $ 7,622,903 $ 7,766,734 $ 8,373,504 $ 9,123,396 $ 9,329,950 $ 9,942,789 $ 10,545,048 $ 11,212,108 11,816,919 $ Fund Balance, Beginning $ 4,300,802 $ 4,456,204 $ 4,973,836 $ 5,169,159 $ 4,899,144 $ 4,307,165 $ 3,669,431 $ 2,907,188 $ 2,148,095 Fund Balance, Ending $ 4,456,204 $ 4,973,836 $ 5,169,159 $ 4,899,144 $ 4,616,178 $ 4,003,607 $ 3,344,634 $ 2,520,442 $ 1,812,674 Fund Balance Goal (11% of Expenditures) $ 838,519 $ 854,341 $ 921,085 $ 1,003,574 $ 1,026,294 $ 1,093,707 $ 1,159,955 $ 1,233,332 $ 1,299,861 Excess/(Deficiency) $ 3,617,685 $ 4,119,496 $ 4,248,074 $ 3,895,570 $ 3,589,883 $ 2,909,900 $ 2,184,678 $ 1,287, ,813 $ *2019, 2021, 2023 and 2025 data has been collapsed from this chart to allow for optimal presentation. 42

49 Ten-Year Models Ten Year Financial Models Police Tax Increment.21 - Table 3 REVENUES Actual Actual Revised Proposed Proposed Estimated Estimated Estimated Estimated Taxes $ 3,872,392 $ 4,188,294 $ 4,292,624 $ 4,161,262 $ 4,320,503 $ 4,521,620 $ 4,780,638 $ 5,064,685 $ 5,360,080 Intergovernmental 559,517 30,780 50,000 50,000 50,000 50,000 50,000 50,000 50,000 Miscellaneous 103, ,593 60,000 62,000 69,000 84, , , ,000 Total Revenues $ 4,535,030 $ 4,327,666 $ 4,402,624 $ 4,273,262 $ 4,439,503 $ 4,655,620 $ 4,932,638 $ 5,235,685 $ 5,536,080 EXPENDITURES Personnel $ 2,644,615 $ 2,939,376 $ 3,101,909 $ 3,459,623 $ 3,608,314 $ 3,889,253 $ 4,123,459 $ 4,351,579 $ 4,560,896 Services & Charges 148, , , , , , , , ,061 Supplies & Expenses 472, , , , , , , , ,670 Contract & Leases 62, , ,401 65,966 66,470 61,654 61,924 65,118 69,083 Capital Maintenance ,859 8,094 8,337 8,845 9,384 9,954 10,559 Capital Outlay 1,322, , ,761 1,032,202 2,500, Transfers 75, ,647 79,766 81,784 83,863 88,209 92,820 97, ,898 Total Expenditures $ 4,727,543 $ 3,971,287 $ 4,308,044 $ 5,222,966 $ 6,835,888 $ 4,654,176 $ 4,857,803 $ 5,172,822 $ 5,420,167 Fund Balance, Beginning $ 3,475,497 $ 3,282,984 $ 3,639,363 $ 3,733,942 $ 2,784,238 $ 431,187 $ 512,862 $ 623,285 $ 775,556 Fund Balance, Ending $ 3,282,984 $ 3,639,363 $ 3,733,942 $ 2,784,238 $ 387,853 $ 432,631 $ 587,697 $ 686,149 $ 891,470 Fund Balance Goal (11% of Expenditures) $ 520,030 $ 436,842 $ 455,761 $ 460,984 $ 476,948 $ 511,959 $ 534,358 $ 569,010 $ 596,218 Excess/(Deficiency) $ 2,762,954 $ 3,202,522 $ 3,278,181 $ 2,323,254 $ (89,095) $ (79,328) $ 53,338 $ 117,138 $ 295,251 *2019, 2021, 2023 and 2025 data has been collapsed from this chart to allow for optimal presentation. 43

50 Ten-Year Models Ten Year Financial Models Police Tax Increment.25 - Table 4 REVENUES Actual Actual Revised Proposed Proposed Estimated Estimated Estimated Estimated Taxes $ 4,755,117 $ 5,146,571 $ 5,420,651 $ 5,156,255 $ 5,309,794 $ 5,558,936 $ 5,878,019 $ 6,228,040 $ 6,591,811 Intergovernmental $ - 291, , , Miscellaneous 55,871 34,484 55,000 64,000 81, , , , ,000 Total Revenues $ 4,810,988 $ 5,181,055 $ 5,766,651 $ 5,512,255 $ 5,682,794 $ 5,664,936 $ 5,999,019 $ 6,338,040 $ 6,692,811 EXPENDITURES Personnel $ 3,129,935 $ 3,478,097 4,243,113 4,552,262 4,800,157 5,263,257 5,606,193 5,912,782 6,193,936 Services & Charges 121, , , , , , , ,888 $ 282,676 Supplies & Expenses 187, , , , , , , , ,615 Contract & Leases , ,624 15,739 14,736 6,770 3,697 3,346 3,550 Capital Maintenance ,970 5,119 5,272 5,593 5,934 6,296 6,679 Capital Outlay 1,224, , , ,920 1,000, Transfers 485, ,584 90,001 92,326 94,721 99, , , ,655 Total Expenditures $ 5,149,401 $ 4,271,619 $ 5,227,962 $ 5,846,663 $ 6,555,715 $ 6,052,650 $ 6,426,984 $ 6,759,510 $ 7,075,047 Fund Balance, Beginning $ 4,504,482 $ 4,166,068 $ 5,075,505 $ 5,614,194 $ 5,279,786 $ 4,125,454 $ 3,307,518 $ 2,450,203 $ 1,622,350 Fund Balance, Ending $ 4,166,068 $ 5,075,505 $ 5,614,194 $ 5,279,786 $ 4,406,865 $ 3,737,741 $ 2,879,553 $ 2,028,733 $ 1,240,114 Fund Balance Goal (11% of Expenditures) $ 566,434 $ 469,878 $ 575,076 $ 643,133 $ 721,129 $ 665,791 $ 706,968 $ 743,546 $ 778,255 Excess/(Deficiency) $ 3,599,634 $ 4,605,627 $ 5,039,118 $ 4,636,653 $ 3,685,736 $ 3,071,949 $ 2,172,585 $ 1,285,187 $ 461,859 *2019, 2021, 2023 and 2025 data has been collapsed from this chart to allow for optimal presentation. 44

51 Ten-Year Models Ten Year Financial Models Water Fund - Table Actual Actual Revised Proposed Proposed Estimated Estimated Estimated Estimated REVENUES Licenses, Permits and Fees $ 16,025,193 $ 13,956,980 $ 10,787,679 $ 10,521,993 $ 10,592,688 $ 10,169,597 $ 9,695,204 $ 10,082,590 $ 9,532,065 Intergovernmenatl 544, Charges for Services 18,789,322 19,483,786 20,090,839 20,665,448 21,261,756 22,606,978 24,032,237 25,504,329 27,023,218 Miscellaneous 124, , , , , ,104 1,013,311 1,346,543 1,674,798 Revenue Transfer 440, , , , , , , , ,281 Other Financing Sources Total Revenues $ 35,379,811 $ 34,689,674 $ 31,880,692 $ 32,204,067 $ 32,903,121 $ 33,910,691 $ 35,299,859 $ 37,526,619 $ 38,859,362 EXPENDITURES Personnel $ 5,783,394 $ 5,944,230 $ 6,139,213 $ 6,419,283 $ 6,692,441 $ 7,180,910 $ 7,638,458 $ 8,105,004 $ 8,530,035 Services & Charges 6,129,838 6,676,848 7,296,117 7,644,940 7,867,131 8,329,961 8,818,629 9,324,701 9,879,857 Supplies & Expenses 881, ,947 1,116,258 1,259,476 1,292,277 1,350,998 1,424,470 1,505,742 1,580,065 Contract & Leases 791,976 1,313, , , , , , , ,394 Debt Service 2,253,407 2,252,725 2,262,550 2,261,750 2,261,000 3,866, Inventory Capital Maintenance 4,773,684 3,694,994 4,360,191 4,151,389 4,275,930 4,536,334 4,812,597 5,105,684 5,416,620 Capital Outlay 7,651,652 4,610,000 2,601,197 5,447,644 3,975,633 15,956,667 35,502,976 8,990, ,078 Transfers 2,332,940 2,584,002 2,374,412 2,431,225 2,497,570 2,636,165 2,783,025 2,938,649 3,103,561 Other 37, ,000 5,075 5,228 5,386 5,549 5,717 Total Expenditures $ 30,636,380 $ 27,937,307 $ 26,594,561 $ 30,168,668 $ 29,434,133 $ 44,469,828 $ 61,635,133 $ 36,671,462 $ 29,654,327 Working Capital, Beginning $ 30,141,216 $ 34,884,647 $ 79,051,775 $ 84,337,907 $ 86,373,306 $ 93,761,626 $ 70,466,016 $ 24,505,646 $ 33,746,082 Working Capital, Ending $ 34,884,647 $ 41,637,014 $ 84,337,907 $ 86,373,306 $ 89,842,294 $ 83,202,489 $ 44,130,743 $ 25,360,803 $ 42,951,117 Working Capital Goal (25%) $ 7,659,095 $ 6,984,327 $ 5,998,341 $ 6,180,256 $ 6,364,625 $ 7,128,290 $ 6,533,039 $ 6,920,341 $ 7,315,562 Excess/(Deficiency) $ 27,225,552 $ 34,652,687 $ 78,339,566 $ 80,193,050 $ 83,477,669 $ 76,074,199 $ 37,597,703 $ 18,440,463 $ 35,635,555 *2019, 2021, 2023 and 2025 data has been collapsed from this chart to allow for optimal presentation. 45

52 Ten-Year Models Ten Year Financial Models Wastewater Fund - Table 6 REVENUES Actual Actual Revised Proposed Proposed Estimated Estimated Estimated Estimated Licenses, Permits and Fees $ 3,801,955 $ 3,829,726 $ 1,007,737 $ 928,885 $ 928,984 $ 850,235 $ 771,490 $ 771,699 $ 692,962 Charges for Services 11,315,083 11,700,455 12,156,415 12,682,760 13,223,951 14,351,836 15,555,185 16,831,201 18,182,999 Miscellaneous (450,312) (804,082) 124, , , , , , ,452 Revenue Transfer Total Revenues $ 14,666,725 $ 14,726,099 $ 13,288,152 $ 13,920,901 $ 14,467,617 $ 15,946,764 $ 17,080,451 $ 18,376,086 $ 19,668,413 EXPENDITURES Personnel $ 1,153,005 $ 1,222,682 $ 1,239,310 $ 1,368,906 $ 1,432,378 $ 1,549,931 $ 1,657,133 $ 1,779,774 $ 1,885,387 Services & Charges 128,775 $154, , , , , , , ,280 Supplies & Expenses 424,496 $435, , , , , , , ,251 Contract & Leases 6,794,621 $7,832,494 13,226,620 8,900,556 9,069,730 9,622,076 10,208,061 10,829,732 11,489,263 Capital Maintenance 1,221,012 $2,337,484 2,545,676 2,210,045 2,276,347 2,414,977 2,562, , ,946 Capital Outlay 2,793,426 $1,766,671 1,256, ,186 2,920, , , , ,103 Transfers 996,512 $1,033,213 1,064,201 1,095,909 1,128,786 1,197,529 1,270,458 1,347,829 1,429,912 Other Total Expenditures $ 13,511,970 $ 14,782,855 $ 19,913,925 $ 14,525,932 $ 17,458,950 $ 15,735,787 $ 16,689,445 $ 15,893,377 $ 16,856,141 Working Capital, Beginning $ 11,893,000 $ 13,047,755 $ 12,991,000 $ 6,365,227 $ 5,760,196 $ 2,694,108 $ 3,249,204 $ 5,939,859 $ 11,027,437 Working Capital, Ending $ 13,047,755 $ 12,991,000 $ 6,365,227 $ 5,760,196 $ 2,768,863 $ 2,905,086 $ 3,640,209 $ 8,422,567 $ 13,839,709 Working Capital Goal (25% of Expenditures) $ 3,377,992 $ 3,695,714 $ 4,978,481 $ 3,631,483 $ 4,364,737 $ 3,933,947 $ 4,172,361 $ 3,973,344 $ 4,214,035 Excess/(Deficiency) $ 9,669,763 $ 9,295,286 $ 1,386,746 $ 2,128,713 $ (1,595,874) $ (1,028,861) $ (532,152) $ 4,449,223 $ 9,625,673 *2019, 2021, 2023 and 2025 data has been collapsed from this chart to allow for optimal presentation. 46

53 Ten-Year Models Ten Year Financial Models Golf Course - Table 7 REVENUES Actual Actual Revised Proposed Proposed Estimated Estimated Estimated Estimated Charges for Services $ 4,415,462 $ 4,501,138 $ 4,651,410 $ 3,903,679 $ 5,610,160 $ 5,999,992 $ 6,412,216 $ 6,854,450 $ 7,331,678 Miscellaneous 29,252 50,116 15,142 11,279 21,140 18,100 24,416 35,851 46,362 Revenue Transfer 209, , , , , , , , ,880 Total Revenues $ 4,654,189 $ 5,011,529 $ 5,095,837 $ 4,561,269 $ 5,874,860 $ 6,276,558 $ 6,710,926 $ 7,181,399 $ 7,686,920 EXPENDITURES Personnel $ 2,246,360 $ 2,615,468 $ 2,542,958 $ 2,518,830 $ 3,019,849 $ 3,213,505 $ 3,408,305 $ 3,616,741 $ 3,814,942 Services & Charges 491, , , , , , , , ,502 Supplies & Expenses 649, , , , , , , , ,629 Contract & Leases 147, , , , ,262 17,734 18,814 19,960 21,175 Debt Service 155, , , , , , , , ,822 Inventory 756, , , , ,969 1,021,615 1,083,829 1,149,834 1,219,860 Capital Maintenance 56,650 70, ,521 48,919 54,722 52,751 55,962 59,370 62,986 Capital Outlay 13,549 84, , ,081 15, Transfers 31,049 13,617 3, Miscellaneous Total Expenditures $ 4,548,314 $ 4,887,386 $ 5,203,500 $ 4,779,640 $ 5,672,496 $ 6,248,371 $ 6,623,604 $ 7,013,465 $ 7,391,121 Working Capital, Beginning $ 101,000 $ 206,875 $ 331,018 $ 223,355 $ 4,984 $ 200,686 $ 297,095 $ 403,144 $ 800,020 Working Capital, Ending $ 206,875 $ 331,018 $ 223,355 $ 4,984 $ 207,348 $ 228,873 $ 384,417 $ 571,079 $ 1,095,820 Working Capital Goal (11% of Expenditures) $ 500,314 $ 537,612 $ 572,385 $ 525,760 $ 623,975 $ 687,321 $ 728,596 $ 771,481 $ 813,023 Excess/(Deficiency) $ (293,439) $ (206,594) $ (349,030) $ (520,776) $ (416,627) $ (458,448) $ (344,179) $ (200,402) $ 282,796 *2019, 2021, 2023 and 2025 data has been collapsed from this chart to allow for optimal presentation. 47

54 Ten-Year Models Ten Year Financial Models Stormwater Utility - Table 8 REVENUES Actual Actual Revised Proposed Proposed Estimated Estimated Estimated Estimated Licenses, Permits and Fees $ 1,902,594 $ 3,227,372 $ - $ - $ - $ - $ - $ - $ - Intergovernmental Charges for Services 3,224,066 3,348,154 3,266,474 3,352,511 3,370,427 3,472,677 3,574,475 3,675,995 3,704,712 Miscellaneous 154,932 59,540 63,809 63,609 71,927 84,593 90,299 82,048 59,842 Revenue Transfer Total Revenues $ 5,281,592 $ 6,635,066 $ 3,330,283 $ 3,416,120 $ 3,442,354 $ 3,557,270 $ 3,664,774 $ 3,758,043 $ 3,764,554 EXPENDITURES Personnel $ 390,923 $ 393,003 $ 593,750 $ 622,943 $ 648,469 $ 690,650 $ 729,378 $ 771,081 $ 809,929 Services & Charges 193, , , , , , , , ,759 Supplies & Expenses 38,156 41,079 60,196 80,444 82,612 86,815 91,744 97, ,857 Contract & Leases 128, , , , , , , , ,893 Capital Outlay 3,441,576 3,211,910 1,755,793 1,300, , , , ,899 1,043,819 Transfers 1,444,830 1,786,614 1,424,812 1,435,496 1,459,899 1,492,052 1,528,555 1,569, ,093 Other 20, Total Expenditures $ 5,658,591 $ 6,251,068 $ 4,674,191 $ 4,256,281 $ 3,805,022 $ 3,871,807 $ 4,164,702 $ 4,404,282 $ 3,747,349 Working Capital, Beginning $ 5,941,000 $ 5,564,001 $ 5,948,000 $ 4,604,092 $ 3,763,931 $ 3,044,239 $ 2,245,020 $ 1,190,320 $ 663,771 Working Capital, Ending $ 5,564,001 $ 5,948,000 $ 4,604,092 $ 3,763,931 $ 3,401,263 $ 2,729,702 $ 1,745,092 $ 544,081 $ 680,976 Working Capital Goal (25%) $ 1,414,648 $ 1,562,767 $ 729,599 $ 739, ,005 Excess/(Deficiency) $ 4,149,353 $ 4,385,233 $ 3,874,492 $ 3,024,861 2,630,258 $ $ 790, ,812 $ $ 1,939, ,280 $ $ 855,096 $ 675,883 $ $ (311,015) $ 5,093 *2019, 2021, 2023 and 2025 data has been collapsed from this chart to allow for optimal presentation. 48

55 Ten-Year Models Ten Year Financial Models Hospitality - Table 9 REVENUES Actual Actual Revised Proposed Proposed Estimated Estimated Estimated Estimated Charges for Services $ 1,354,283 $ 1,359,366 $ 1,358,787 $ 1,453,611 $ 1,497,219 $ 1,609,419 $ 1,707,430 $ 1,811,414 $ 1,921,729 Miscellaneous 57,563 45,584 58,383 61,944 64,023 68,084 68,821 70,374 74,355 Revenue Transfer 12,970 13,946 64,783 65,670 16,948 18,331 19,827 21,238 Total Revenues $ 1,411,847 $ 1,417,919 $ 1,431,116 $ 1,580,338 $ 1,626,912 $ 1,694,451 $ 1,794,582 $ 1,901,615 $ 2,017,322 EXPENDITURES Personnel $ 756,198 $ 776,688 $ 815,977 $ 917,635 $ 949,705 $ 1,014,186 $ 1,075,331 $ 1,139,666 $ 1,201,815 Services & Charges 112, , , , , , , , ,924 Supplies & Expenses 121, , , , , , , , ,194 Inventory 321, , , , , , , , ,428 Capital Maintenance 19,148 8,810 18,180 18,725 19,286 20,461 21,707 23,018 24,410 Capital Outlay - 14,863 40,000 20,000 20,000 20,000 20,000 20,000 20,000 Transfers 27, Other 5,538-1,000 1,000 1,000 1,000 1,000 1,000 1,030 Total Expenditures $ 1,364,039 $ 1,315,094 $ 1,401,855 $ 1,550,756 $ 1,600,349 $ 1,705,536 $ 1,805,763 $ 1,911,911 $ 2,018,801 Working Capital, Beginning $ 554,000 $ 601,808 $ 704,633 $ 733,893 $ 763,475 $ 822,803 $ 800,286 $ 775,793 $ 758,652 Working Capital, Ending $ 601,808 $ 704,633 $ 733,893 $ 763,475 $ 790,038 $ 811,718 $ 789,105 $ 765,497 $ 757,173 Working Capital Goal (11% of Expenditures) $ 150,044 $ 144,660 $ 154,204 $ 170,583 $ 176,038 $ 187,609 $ 198,634 $ 210,310 $ 222,068 Excess/(Deficiency) $ 451,764 $ 559,972 $ 579,689 $ 592,892 $ 614,000 $ 624,109 $ 590,471 $ 555,186 $ 535,105 *2019, 2021, 2023 and 2025 data has been collapsed from this chart to allow for optimal presentation. 49

56 Ten-Year Models Ten Year Financial Models Insurance Services - Table 10 REVENUES Actual Actual Revised Proposed Proposed Estimated Estimated Estimated Estimated Intergovernmental $ 2,032,874 $ 1,818,559 $ 1,834,010 $ 2,085,006 $ 2,101,505 $ 2,136,008 $ 2,172,608 $ 2,211,439 2,252,634 Miscellaneous 119,226 76,941 74,284 60,000 65,700 79,500 94,400 94,000 94,000 Total Revenue $ 2,152,100 $ 1,895,499 $ 1,908,294 $ 2,145,006 $ 2,167,205 $ 2,215,508 $ 2,267,008 $ 2,305,439 2,346,634 $ $ EXPENDITURES Personnel $ 350,898 $ 362,297 $ 374,918 $ 396,608 $ 417,225 $ 453,104 $ 485,184 $ 515,377 $ 541,198 Services & Charges 1,960,642 1,755,782 1,841,140 1,623,374 1,626,428 1,632,814 1,639,590 1,646,782 1,654,416 Supplies & Expenses 107,953 80, , , , , , , ,590 Contract & Leases 28,384 12,533 98,541 71,497 74,542 80,909 87,663 94, ,430 Capital Outlay Transfers 232,223 40, Total Expenditures $ 2,680,100 $ 2,251,586 $ 2,425,611 $ 2,310,626 $ 2,340,543 $ 2,395,865 $ 2,448,566 $ 2,500,634 2,549,634 $ Fund Balance, Beginning $ 4,593,000 $ 4,065,000 $ 3,708,913 $ 3,191,597 $ 3,025,977 $ 2,674,576 $ 2,312,271 $ 1,940,724 $ 1,545,258 Fund Balance, Ending $ 4,065,000 $ 3,708,913 $ 3,191,597 $ 3,025,977 $ 2,852,639 $ 2,494,219 $ 2,130,713 $ 1,745,529 1,342,258 $ Beginning Cash $ 5,230,402 Ending Cash $ 4,874,315 Actuarial Projection Adjustment $ (1,165,402) Available Cash Ending 3,708,913 $ NOTE: The Actuarial Projection Adjustment is a component throughout the model, reflected in the Fund Balance. *2019, 2021, 2023 and 2025 data has been collapsed from this chart to allow for optimal presentation. 50

57 Ten-Year Models Ten Year Financial Models Computers - Table 11 REVENUES Actual Actual Revised Proposed Proposed Estimated Estimated Estimated Estimated Intergovernmental $ 1,878,346 $ 1,943,256 $ 1,838,985 $ 2,084,562 $ 2,093,540 $ 2,111,768 $ 2,130,362 $ 2,152,978 $ 2,179,393 Charges for Services - 34,288 28,000 28,000 28,000 28,000 28,000 28,000 28,000 Miscellaneous 123,105 91,759 54,470 56,104 57,787 61,307 65,040 69,001 69,001 Total Revenue $ 2,001,451 $ 2,069,303 $ 1,921,455 $ 2,168,666 $ 2,179,327 $ 2,201,075 $ 2,223,402 $ 2,249,979 $ 2,276,394 EXPENDITURES Personnel $ 109,420 $ 109,159 $ 114,195 $ 120,268 $ 126,182 $ 134,558 $ 141,036 $ 149,001 $ 156,287 Services & Charges Supplies & Expenses 1,708,666 1,325,665 3,589,504 2,559,028 2,039,477 2,380,372 2,779,296 2,172,426 2,644,003 Contract & Leases 12,000 36, Inventory Capital Maintenance 12,532 21, Transfers - 15, Total Expenditures $ 1,842,618 $ 1,508,110 $ 3,703,699 $ 2,679,891 $ 2,166,261 $ 2,515,548 $ 2,920,967 $ 2,322,082 2,800,954 $ Fund Balance, Beginning $ 5,992,000 $ 6,150,833 $ 6,712,026 $ 4,929,782 $ 4,418,557 $ 3,901,993 $ 4,068,894 $ 1,888,686 $ 1,690,667 Fund Balance, Ending $ 6,150,833 $ 6,712,026 $ 4,929,782 $ 4,418,557 $ 4,431,623 $ 3,587,521 $ 3,371,329 $ 1,816,583 1,166,107 $ *2019, 2021, 2023 and 2025 data has been collapsed from this chart to allow for optimal presentation. 51

58 Ten-Year Models Ten Year Financial Models Vehicles - Table 12 REVENUES Actual Actual Revised Proposed Proposed Estimated Estimated Estimated Estimated Intergovernmental $ 3,373,268 $ 3,452,069 $ 3,612,772 $ 3,853,690 $ 3,984,889 $ 4,277,004 $ 4,461,579 $ 4,843,242 $ 5,121,577 Miscellaneous 158, ,886 71,230 60,000 71,200 89,000 73,000 74,000 86,000 Other 215, ,803 75, ,000 75,000 75,000 75,000 75,000 75,000 Total Revenue $ 3,746,878 $ 4,361,758 $ 3,759,002 $ 4,053,690 $ 4,131,089 $ 4,441,004 $ 4,609,579 $ 4,992,242 $ 5,282,577 EXPENDITURES Personnel $ 1,255,195 $ 1,361,573 $ 1,398,122 $ 1,462,626 $ 1,525,456 $ 1,631,995 $ 1,730,186 $ 1,831,347 $ 1,922,164 Services & Charges 107, ,214 98, , , , , , ,652 Supplies & Expenses 241, , , , , , , , ,665 Contract & Leases 30,735 61,247 13,155 13,550 13,956 14,806 15,708 16,665 17,679 Inventory (936) 9, Capital Maintenance 524, , , , , , , , ,921 Capital Outlay 1,599,537 1,411,614 4,633,042 1,611,965 1,236,127 4,700,000 1,560,600 1,623,648 1,690,217 Transfers 92,400 95,172 73,520 75,726 77,997 82,747 87,787 93,133 98,805 Total Expenditures $ 3,849,879 $ 3,911,928 $ 7,066,440 $ 4,188,800 $ 3,907,330 $ 7,542,593 $ 4,571,119 $ 4,809,328 $ 5,045,103 Fund Balance, Beginning $ 6,350,000 $ 6,247,000 $ 6,696,829 $ 3,389,391 $ 3,254,281 $ 4,035,321 $ 860,679 $ 971,425 $ 1,371,785 Fund Balance, Ending $ 6,247,000 $ 6,696,829 $ 3,389,391 $ 3,254,281 $ 3,478,040 $ 933,732 $ 899,139 $ 1,154,339 $ 1,609,258 *2019, 2021, 2023 and 2025 data has been collapsed from this chart to allow for optimal presentation. 52

59 Ten-Year Models Ten Year Financial Models Buildings - Table Actual Actual Revised Proposed Proposed Estimated Estimated Estimated Estimated REVENUES Intergovernmental $ 431,301 $ 443,230 $ 460,217 $ 514,025 $ 529,446 $ 561,688 $ 595,896 $ 632,190 $ 670,695 Miscellaneous 25,965 20,683 33,000 33,000 36,000 46,000 42,000 30,000 40,000 Revenue Transfer 115, , , Total Revenue $ 572,382 $ 680,181 $ 620,228 $ 547,025 $ 565,446 $ 607,688 $ 637,896 $ 662, ,695 $ EXPENDITURES Personnel $ - - $ $ 66,700 $ 71,299 $ 75,280 $ 82,834 $ 89,674 $ 95,536 $ 100,634 Services and Charges $ - $ - - 2,938 2,966 3,025 3,087 3,153 3,222 Debt Service 114, , , Capital Maintenance 220,799 38, , , ,621 1,294,916 1,361,841 65,164 39,143 Total Expenditures $ 335,650 $ 154,317 $ 803,249 $ 856,632 $ 511,867 $ 1,380,775 $ 1,454,602 $ 163, ,999 $ Fund Balance, Beginning $ 2,131,000 $ 2,367,733 $ 2,893,597 $ 2,710,575 $ 2,400,968 $ 2,813,303 $ 1,670,513 $ 1,166,860 2,207,991 Fund Balance, Ending $ 2,367,733 $ 2,893,597 $ 2,710,575 $ 2,400,968 $ 2,454,547 $ 2,040,216 $ 853,807 $ 1,665,197 2,775,687 $ $ *2019, 2021, 2023 and 2025 data has been collapsed from this chart to allow for optimal presentation. 53

60 Ten-Year Models Ten Year Financial Models Economic Development - Table 14 REVENUES Actual Actual Revised Proposed Proposed Estimated Estimated Estimated Estimated Miscellaneous $ 11,902 $ 3,625 $ 3,000 $ 50,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 Revenue Transfer 747, , , , , , ,497 1,045,275 1,108,145 Total Revenues $ 758,959 $ 698,063 $ 791,159 $ 865,703 $ 854,989 $ 922,627 $ 989,497 $ 1,050,275 $ 1,113,145 EXPENDITURES Personnel $ 446,793 $ 394,262 $ 426,332 $ 449,776 $ 473,396 $ 518,731 $ 561,934 $ 598,395 $ 629,155 Services & Charges 138, , , , , , , , ,978 Supplies & Expenses 21,004 18,060 25,236 29,036 29,569 30,678 31,852 33,299 34,967 Contract & Leases 146, , , , , , , , ,963 Capital Maintenance Transfers 4, Total Expenditures $ 758,523 $ 691,062 $ 788,159 $ 817,763 $ 851,549 $ 918,111 $ 983,797 $ 1,044,275 $ 1,099,013 Fund Balance, Beginning $ 396,890 $ 397,326 $ 404,327 $ 407,327 $ 455,267 $ 462,673 $ 472,282 $ 484,317 $ 498,015 Fund Balance, Ending $ 397,326 $ 404,327 $ 407,327 $ 455,267 $ 458,707 $ 467,189 $ 477,982 $ 490,317 $ 512,147 Fund Balance Goal (11% of Expenditures) $ 83,438 $ 76,017 $ 86,697 $ 89,954 $ 93,670 $ 100,992 $ 108,218 $ 114,870 $ 120,891 Excess/(Deficiency) $ 313,889 $ 328,310 $ 320,630 $ 365,313 $ 365,036 $ 366,197 $ 369,764 $ 375,446 $ 391,256 *2019, 2021, 2023 and 2025 data has been collapsed from this chart to allow for optimal presentation. 54

61 BUDGET IN BRIEF SECTION 55

62 56

63 Arvad a Economic Devel o p ment Association AREAS OF FOCUS STRATEGIC RESULTS Business Growth & Stability New Business Development Marketing Strategic Alliances $350 Million in commercial capital investment by year-end new non-retail jobs will be created within targeted industries by 2019 $250,000 in additional retail sales per year Arvada will generate 75 new business prospects each year AEDA will add 300 additional social media followers on AEDA exclusive outlets MISSION The mission of the Arvada Economic Development Association (AEDA) is to provide business and commercial development services to new and existing businesses so they can grow and expand to create jobs, increase revenues and make capital investments. Aligns with City Council Goals BUDGET 2015 Actual $691, Revised $788, Proposed Budget $817, Proposed Budget $851,549 EMPLOYEES 2015 Actual Revised Proposed Budget Proposed Budget

64 HIGHLIGHTED STRATEGIC RESULTS Number of Retention Visits Conducted Exceeded 8 7 Target YTD Target thru Dec (60) YTD as of July (67) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Number of New Businesses and/or Development Projects Facilitated On Target YTD Target thru Dec 2016 (45) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD as of July (38) % of Increase in Open Rate of Real Estate E-Newsletter 100% 75% 50% YTD Target thru Dec 2016 (23%) 25% On Target 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 58 YTD as of July (30%)

65 City Attorney s Offi c e AREAS OF FOCUS STRATEGIC RESULTS City Attorney 95% of prosecution cases resolved within plea bargain standards Legal documents for all clients prepared in a timely and quality fashion Focus on the most serious offenders through tools such as plea bargaining Support the city to make informed policy decisions based on timely and quality legal advice and council Good-Excellent scores on 90% of all client satisfaction surveys MISSION The Mission of the City Attorney's Office is to provide legal services to the City Council, Boards and Commissions and Administrative Staff so they can enforce the law, avoid or mitigate risks associated with City operations and protect the legal interests of the City of Arvada. Aligns with City Council Goals BUDGET 2015 Actual $1,970, Revised $2,074, Proposed Budget $2,104, Proposed Budget $2,171,814 EMPLOYEES 2015 Actual Revised Proposed Budget Proposed Budget

66 HIGHLIGHTED STRATEGIC RESULTS 90% Legal Advice and Counsel was Scored at a Level of 5 as Outlined in the Client Satisfaction Survey On Target 100% 75% 50% 25% 90% 0 Q Q Q Q Q Q % Legal Documents were Scored at a Level 5 as Outlined in the Client Satisfaction Survey On Target 100% 75% 50% 25% 90% 0 Q Q Q Q Q Q % of Prosecution Matters were Scored at a Level 5 as Outlined in the Client Satisfaction Survey On Target 100% 75% 50% 25% 90% 0 Q Q Q Q Q Q

67 City Manager s Offi ce AREAS OF FOCUS Community and Civic Engagement Fair and Open Government Sustainable and Vibrant Community Service Excellence, Economic Vitality and Infrastructure STRATEGIC RESULTS 66% of staff opens the weekly newsletter 73% of citizens feel valued as a customer 80% of citizens perceive staff as Good or Very Good 98% staff recommendations are adopted by City Council Foster a culture of INNOVATION MISSION The Mission of the City Manager's Office is to provide leadership, policy, guidance and communication services to City Council, the community and the organization so they can successfully create a vibrant, safe, secure, and sound community. Aligns with City Council Goals BUDGET 2015 Actual $4,978, Revised $5,361, Proposed Budget $4,258, Proposed Budget $4,312,213 EMPLOYEES 2015 Actual Revised Proposed Budget Proposed Budget

68 HIGHLIGHTED STRATEGIC RESULTS % Staff Recommendations to City Council are Adopted by the City Council 100% 95% 75% On Target 50% 25% 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 50% of City Employees Open the Weekly Brief Employee Newsletter 100% 75% On Target 50% 25% 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec % of Ask Arvada Customers Who Return a Survey 100% 75% 50% Below Plan 25% 0 30% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 62

69 Community Devel opment AREAS OF FOCUS City Planning and Development Neighborhood Services Housing Preservation and Resources MISSION STRATEGIC RESULTS 99% of residential code violations resolved without the need for formal enforcement action 25% of new housing will incorporate a mix of lot size, density, styles and types by WEEKS 80% of plan reviews completed within 4 weeks The mission of the Community Development Department is to provide land use planning, affordable and quality housing, neighborhood engagement, and property code compliance services to the City and Community of Arvada so they can live and work in a well-planned, safe, and vibrant city for current and future generations. 20 single-family essential home repair grants provided in % of identified neighborhoods will have an organized community group by 2019 Beginning in 2019, 25% of new housing is located in urban centers and corridors Aligns with City Council Goals BUDGET 2015 Actual $7,973, Revised $8,032, Proposed Budget $7,939, Proposed Budget $8,127,882 EMPLOYEES 2015 Actual Revised Proposed Budget Proposed Budget

70 HIGHLIGHTED STRATEGIC RESULTS 80% of Initial Development Plan Reviews Completed Within 4 Weeks. 100% Below Plan 75% 50% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec By 2019, 50% of Identified Neighborhoods Without Organized Groups (as of end of 2013) Have Organized Neighborhood Associations, HOAs, Councils or Other Leadership/Engagement Groups with Whom the City Can Liaison. Target met Jul-16 Develop database for neighborhood contact list Jun-15 On Target MILESTONES Identify neighborhoods that are not organized Identify means to engage neighborhoods that are not organized Create GIS map to identify neighborhoods Apr-15 Jul-16 Apr-15 Neighborhood Engagement & Police Department work out database issues Feb-15 Create Neighborhood Engagement Team Oct-14 Achieve HUD CDBG 1.5 Expenditure Timeliness Ratio or Less Caution Q Q Q Q Q Q Q Q

71 F i n a nce AREAS OF FOCUS Revenue, Accounting and Financial Analysis Strategic Partnership STRATEGIC RESULTS $82 Million in sales & use tax collected in % of claiments contacted within 2 business days 85% of businesses are VOLUNTARILY COMPLIANT 2017 Review & Update 10-year financial plan annually AA Continue to maintain AA bond rating or better MISSION The mission of the Finance Department is to provide strategic partnerships, revenue and financial management, procurement and risk management services to City Council, Departments and the Community so they can make informed decisions, achieve desired results and thrive in a financially stable City. Aligns with City Council Goals BUDGET 2015 Actual $23,671, Revised $28,100, Proposed Budget $18,228, Proposed Budget $18,463,001 EMPLOYEES 2015 Actual Revised Proposed Budget Proposed Budget *Includes an additional $3,196,146 transfer to the Capital Improvement Projects Fund 65

72 HIGHLIGHTED STRATEGIC RESULTS 40% of Businesses will File Sales & Use Tax Returns Online by End of the Year % 75% Below Plan 50% 25% 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 90% of Claimants are Contacted Within 2 Business Days of Notification to Risk Management. 100% 75% On Target 50% 25% 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Obtain Government Finance Officers Association (GFOA) Budget and Comprehensive Annual Finance Report (CAFR) Awards On Target BUDGET 24 Years CAFR 31 Years 66

73 H u m a n R esources AREAS OF FOCUS Workforce and Strategic Partnerships Compensation, Benefits and Wellness Employment STRATEGIC RESULTS Promote health & wellness By 2018, city premium cost increase will be lowered to 4% annually 100% of departments utilize workforce plans annually Achieve Top Workplace recognition from the Denver Post by 2018 Connecting employee performance to the city strategic plan 90% of management positions will have a succession plan in place by 2019 MISSION The Mission of the Human Resources Department is to provide strategic partnership, workforce management and development services to all City Departments so they can have the healthy, engaged, high performing workforce they need to achieve their operational and strategic results. Aligns with City Council Goals BUDGET 2015 Actual $1,494, Revised $1,804, Proposed Budget $1,879, Proposed Budget $1,940,752 EMPLOYEES 2015 Actual Revised Proposed Budget Proposed Budget

74 HIGHLIGHTED STRATEGIC RESULTS By 2015, All Departments Will Have in Place a Department-Specific Workforce Plan Which is Annually Updated and Utilized to Make Ongoing Workforce Decisions On Target As of December 31, 2015, all participating departments have finished their 2015 workforce plans. Each department provided thoughtful and thorough strategic plans that will help prepare their workforce now and into the coming years. These initial plans serve as the foundational framework for continuous workforce planning and improvement. 8% or Less Annual Healthcare Premium Increases Over the Previous Year 20% 15% On Target 10% 5% % 10.2% 10.0% 10.0% 10.0% 10.4% 12.0% 12.0% 8.0% 5.5% 8.0% 0% Target Actual 70% City Employees Enrolled in the City s Healthcare Plan Who Receive an Annual Physical Which Will Result in a Premium Incentive the Following Year 80% 60% 70% 40% On Target 20%

75 Innovation and Tech nol ogy Management AREAS OF FOCUS Technology Infrastructure and Operations Technology and Project Management Services Business Systems STRATEGIC RESULTS 90% of technology projects involve ITM team from onset through life cycle Support innovative technology uses city-wide Collaborative partnerships with city departments COMPLETED assessment of existing broadband services in the Arvada community in % of regulated business systems adhere to information security parameters MISSION The Mission of the Innovation and Technology Management Department is to provide collaborative research analysis, software, hardware and project management services to City of Arvada Departments so they can serve our community. Aligns with City Council Goals BUDGET 2015 Actual $5,339, Revised $7,967, Proposed Budget $6,896, Proposed Budget $6,548,674 EMPLOYEES 2015 Actual Revised Proposed Budget Proposed Budget

76 HIGHLIGHTED STRATEGIC RESULTS 90% of Survey Respondents Indicate That They Were Satisfied with ITM s Response to Their Request for Service on Their Business System 100% On Target 75% 50% 25% 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Percentage of Active Projects with Charters 100% 75% 90% Below Plan 50% 25% 0 MAY JUN JUL AUG SEP OCT NOV DEC *Note this is a new measure as of May % of Performance Evaluations Completed Within 30 Days of Due Date 100% Below Plan 75% 50% 25% 0 Q Q Q Q Q Q Q Q

77 Municip a l Court AREAS OF FOCUS STRATEGIC RESULTS J udicial Judicial Support 75% of juvenile cases meet sentencing requirements aimed at changing behavior and decision making 95% of Judicial carses RESOLVED within 12 0 DAYS 100% security screening 80% of offenders DO NOT re-offend within 2 years in Arvada MISSION The Mission of the Municipal Court is to provide judicial and court record services to defendants, victims, court participants and the general public so they can have a fair and impartial process for determining the consequences of illegal behavior. Aligns with City Council Goals BUDGET 2015 Actual $1,245, Revised $1,296, Proposed Budget $1,482, Proposed Budget $1,548,492 EMPLOYEES 2015 Actual Revised Proposed Budget Proposed Budget

78 HIGHLIGHTED STRATEGIC RESULTS % of Juvenile Defendants Completing Judge Mentor Program 100% 80 Total Defendants Feb 2014-July % Caution 50% 25% 0 Feb July % Successfully Graduated from Program 32% Changed Programs or Sentencing or Unsuccessfully Discharged from Program 28% Currently with Active Pending Open Cases % of Adult Defendants Who do not Incur Additional Charges in Arvada Within Two Years (non-traffic defendants) 100% 94% 95% On Target 75% 50% Jan 2014-Oct 2015 Jan July 2016 By 2017, a Comprehensive Security Plan Will be in Place for Courtrooms (Division 1 and 2) 100% of people attending court sessions are being screened prior to entering courtrooms. On Target Weapon tracking is occurring to identify types of weapons entering the building. 72

79 Parks, Golf, and Hospitality AREAS OF FOCUS Parks Golf Hospitality STRATEGIC RESULTS $2.8 M Revenue generated from hospitality services in 2016 New club house facility at West Woods Golf Club built by 2019 All identified trail gaps are completed by 2019 Majestic View Nature Center 22,000 people served MISSION The mission of the Parks, Golf & Hospitality Department is to provide parks, urban design, golf, banquet, event, trails and environmental education services to the Arvada community and visitors so they can play, celebrate, and engage in the vitality of our welcoming community. Aligns with City Council Goals BUDGET 2015 Actual $13,900, Revised $14,907, Proposed Budget $15,379, Proposed Budget $16,526,779 EMPLOYEES 2015 Actual Revised Proposed Budget Proposed Budget

80 HIGHLIGHTED STRATEGIC RESULTS Arvada Parks and Athletic Fields Meet Published Maintenance Standards Between April and October (growing season) and Between November and March (dormant season) 100% 75% 95% Below Plan 50% 25% 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total Revenue and Guests Served from Arvada Hospitality Program Services Jan-Dec 2015 Total Guests Served from all Arvada Hospitality Program Services Total Associated Revenue On Target 51,510 $2,788,016 Jan-Jun 2016 Total Guests Served from All Arvada Hospitality Program Services Total Associated Revenue 31,548 $1,328,103 Total Revenue and Guests Served from All Arvada Golf Program Services Jan-Dec 2015 Total Golfers Served from all Arvada Golf Program Services Total Associated Revenue On Target 88,065 $4,546,600 Jan-Jun 2016 Total Golfers Served from All Arvada Golf Program Services Total Associated Revenue 36,629 $2,001,212 74

81 Public Saf ety AREAS OF FOCUS Community Outreach Delivery of Police Services STRATEGIC RESULTS 80% follow-up and closure on all identified citizen calls for service Decentralized Policing RESOLVE issues using resources at the sector level Increased community outreach and education through social media Established Relationship with 50% of neighborhood HOAs to better understand the needs of the community Continued strong partnerships within our school district 90% of surveyed citizens feel safe in their homes and community MISSION We, the members of the Arvada Police Department pledge: RESPECT for the law, our community and one another. DEDICATION to service and professionalism. RESPONSIBILITY for public safety and ethical conduct. We will always strive for excellence. Aligns with City Council Goals BUDGET $28,497,509 $31,379,388 $33,947,878 $37,017,872 EMPLOYEES

82 Below Plan HIGHLIGHTED STRATEGIC RESULTS # Emergency Call Responses Provided Q Q Adam Q Q Q Q Q Q By 2017, 90% of Emergency Calls Will Have Less Than Five (5) Minutes Response Time 100% Baker Charlie % Caution 75% 50% Q Q Q Q Q Q Q Q Adam Baker Charlie 25 Combined DNA Index System (CODIS) and/or Automated Fingerprint Identification System (AFIS) Hits 50 Caution 25 0 Q Q Q Q Q Q *Results dependent on Jeffco Labs ability to keep up with case load Q Q

83 P ublic W o r ks AREAS OF FOCUS Engineering Facilities Management Flood Control STRATEGIC RESULTS PCI pavement condition index study completed in 2015 Geo Data Streets Infrastructure 95% of citizens surveyed agree that their community is clean $6 Million in public improvements built as a result of construction plan review in 2015 MISSION The mission of the Public Works Department is to provide engineering, Geo Data and infrastructure services to the City and Community of Arvada so they can experience a safe, vibrant and prosperous community. Aligns with City Council Goals 77

84 HIGHLIGHTED STRATEGIC RESULTS By 2019, Energy Consumed at City Facilities Will be Reduced or Offset by 8% from 2013 Usage. 0 2% Down 3% since 2013 On Target 4% 6% 8% # of Potholes Patched On Target 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 9,404 4,931 5,011 Target 2015 & 2016 Target Thru 6/2016 By Fall of 2016 the City Will Have Completed the Olde Town Transit Hub Construction Project. It Will Contain an RTD Bus Transfer Facility and Over 600 Parking Spaces in a Parking Garage for Use by the Public and RTD Commuters. On Target 78

85 U til ities AREAS OF FOCUS Utility Customer Information Services Administration Drinking Water Wastewater Collection & Disposal Stormwater Services Building Safety Fleet Services STRATEGIC RESULTS 98% of building inspection requests completed on the same day scheduled Reduce citizen water usage from 146 to 139 gallons per day Increase customer usage of online tools 65% of sewer mains cleaned annually Promoting clean waterways Treating and delivering 5.6 Billion gallons of potable water annually 45% of city vehicles will use alternative fuels by 2019 MISSION The Mission of the Utilities Department is to provide city fleet services, safe drinking water, wastewater treatment, storm water management, and safe building construction services to the members of the Arvada community so they can confidently assume a reliable supply of safe, high quality drinking water, have buildings constructed to the highest quality standards, and the safe disposal of sewage. Aligns with City Council Goals BUDGET 2015 Actual $40,749, Revised $59,326, Proposed Budget $54,341, Proposed Budget $55,855,850 EMPLOYEES 2015 Actual Revised Proposed Budget Proposed Budget

86 HIGHLIGHTED STRATEGIC RESULTS 2.5% of the Wastewater Collection System Will be Replaced or Rehabilitated Annually to Keep Pace with Anticipated Life Expectancy 4% 3% On Target 2% Number of Building Permits Issued On Target Target Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Cumulative YTD Total 95% of Emergency Response Events Will Have Staff On Site Within 1 Hour of Reported Water Service Interruption 100% 75% On Target 50% 25% 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 80

87 Capital Improvements This Capital Improvement Plan (CIP) for represents the first two years of a ten-year plan that encompasses a strategic approach for the City s capital investments for the next decade (see Capital Improvement Plan , Volume III). This plan reflects a dual approach to utilizing scarce capital resources for vast capital improvement and major capital maintenance needs: Taking Lasting Care (TLC) and implementation of the recommendations from the 2015 Citizens Capital Improvement Planning Committee (CCIPC), which were presented to City Council in July of First, the City is continuing its focus on Taking Lasting Care (TLC) of the vast inventory of assets already held by the City. Preserving existing infrastructure is imperative for Arvada to continue to function as a community. Among TLC plans for the coming two years are: Allocation of resources for the replacement of aging traffic signals, long-life pavement markings, guardrails, and traffic signage Reinvestment in the City s park system with focus on four primary areas irrigation system replacements, playground renovations, trail renovations, and tree replacements Provision for equipment replacements in Hospitality operations Water system and sewer system repair and maintenance, including mains and ancillary infrastructure Second, the City is focused on the long-term implementation of most of the recommendations of the CCIPC. In the summer of 2014, Council appointed 21 residents from throughout the city to serve as a citizen advisory group to recommend priorities for future capital projects. Over the subsequent months of 2014, the group met weekly for briefings on the capital demands related to transportation, facilities, and park system. In 2015, the group met bi-weekly to establish and refine their criteria, have follow-up discussions on various projects and ultimately develop a list of recommended projects either fully or partially funded. These are found in the CCIPC final report, which is included as an addendum to the ten-year CIP contained in Volume III of this budget. Below is a table identifying CCIPC-recommended projects receiving funding as part of the proposed budget. Project 2017 Proposed Budget 2018 Proposed Budget W. 72nd Ave. & Indiana St. Intersection $7,124,360 $ 437,091 Utility Undergrounding $ 50,000 $ 51,500 Sidewalks/TOD/Bike & Trail Gaps $ - $ 100,000 ATMS, Conduit, and Fiber Interconnect $ 206,000 $ 212,180 Guardrails $ 25,000 $ 25,750 It is worth noting that the ten-year capital improvement plan (Volume III of this budget) includes a substantial dedication of resources for CCIPC-recommended projects starting in This contemplates a return to the voters for approval of a new bond issuance for capital projects, after current debt is retired in In addition to the project recommendations made by the CCIPC, the group particularly examined the maintenance needs of the City s street system. While street maintenance is capital in nature, the City s program for maintenance is handled under operations and not part of the adopted CIP. This committee recommended that the City quickly take action to address the pressing need for additional resources to repair and maintain roads and streets in Arvada. While the CIP does not provide for any additional resources to address either street maintenance or other capital needs in the timeframe governed by this budget, staff remains mindful of the deficit between currently available funding and identified needs. 81

88 Capital Improvements Total budgeted capital expenditures by major category for 2017 and 2018 are listed below. The remaining pages of the capital improvement section explain the process of how capital improvement projects are budgeted, how the City pays for the project, and a detailed summary of capital expenditures. Category What are Capital Improvements? 2017 Proposed Budget 2018 Proposed Budget General Government $13,423,045 $ 574,636 Transportation 13,871,592 11,890,971 Parks, Golf, & Hospitality 5,014,070 3,722,489 Utilities 13,935,376 15,241,498 TOTAL $46,244,083 $31,429,594 The Capital Improvement Plan (CIP) is a ten-year road map for creating, maintaining and paying for Arvada s present and future infrastructure needs. The CIP outlines project costs, funding sources and estimated future operating costs associated with each capital improvement. The plan is designed to ensure that capital improvements will be made when and where they are needed and that the City will have the funds to pay for and maintain them. Capital improvement projects are non-routine capital expenditures that result in the acquisition of land, design and construction of new assets, or the renovation, rehabilitation or expansion of existing capital assets. Capital projects usually have an expected useful life of at least five years. Capital improvements make up the physical infrastructure that all cities must have in place to provide essential services to current residents and support new growth and development. They are also designed to prevent the deterioration of the City s existing infrastructure such as roads, parks, buildings and underground pipes for water and sewer systems, and respond to and anticipate future growth of the City. 82

89 Capital Improvements Capital Budgeting Process The following graphic outlines the City of Arvada s ten-year Capital Improvement Plan process: Council reviews progress of past successes in first quarter of year. Re-establishes priorities in context of new information, studies, surveys. Development of Strategic Plan Develop ten-year capital maintenance and new projects to meet long-term strategic needs Analyze prior year expenditures. Identify all possible sources of resources. Develop prioritization methodology to meet Strategic Plan. Analyze and select proposed projects for plan and for the ten-year planning horizon. Departments begin various legal processes to begin the construction processes. Quarterly reporting on all progress. Build and Measure Council adopts both the two-year appropriations and the ten-year plans Council reviews Proposed Plan. Adopts two-year appropriations. Prioritizes unfunded priorities and projects. Adds operating costs into the operating budget. Paying for Capital Improvements In many respects, the planning process for selecting, scheduling and financing capital improvements parallels the way an individual might plan for buying a house or a car. This process entails assessing many competing needs, determining priorities, evaluating costs and financing options and establishing a realistic timeline for completing the projects. Since the electors of Arvada adopted a sales tax in 1969, the City Code has required that, among other things, 60% of the first cent of sales tax revenue must be appropriated annually for capital projects or debt service. Being codified as , this funding is referred to as funding. The funding for 2017 and 2018 is calculated as follows: Funding 2017 Proposed Budget 2018 Proposed Budget $9,541,012 $9,835,097 Debt service obligations (4,338,856) (4,473,785) Transfer to the capital improvement program $5,202,156 $5,361,312 83

90 Capital Improvements Other City dollars include the following sources: Water, Wastewater and Stormwater rates will pay for the necessary capital projects in those Funds. Golf and Hospitality revenue will meet all of the identified needs in their respective Funds. External Dollars are identified grant dollars or monies from another intergovernmental agency. Each year, as capital projects are planned and others are completed, the costs related to maintaining those capital assets are examined. Many times we are able to absorb these costs into our operations. There are also situations where we need to add additional staff and supplies to maintain these projects. Examples of this may be the addition of park maintenance staff when a new park is completed or an increase in utility expenditures when new street lights or signals are added. In the capital project summary, the cost of the project is shown as well as the impact of the project on the operating budget. Capital Improvement Program Categories The City has divided its capital improvement program into four major categories based on the type of improvement that is being constructed. General Government The General Government category includes items such as debt service related to capital project funding, public art, the construction of new facilities, and the expansion or replacement of existing facilities. Transportation This category includes all transportation infrastructure within the City limits. This includes roads, bridges, traffic signals and bike lanes. Parks, Golf, and Hospitality The parks system includes regional, community and neighborhood parks, as well as the trails that link neighborhoods to parks. This category also includes the Taking Lasting Care component of the parks capital improvement program which includes major capital maintenance of existing parks or park infrastructure, including playground and trail renovation, tree replacement and irrigation systems. Projects related to the City s Golf and Hospitality enterprises also fall into this category. Utilities This category includes improvements for all water, wastewater and stormwater infrastructure, including water treatment plants and the water and wastewater transmission systems. The Utilities department maintains its own capital improvement plan which is prepared in conjunction with the rate model and the City s Comprehensive Plan, to prioritize and plan for future capital needs. Within each of the four major categories, the City differentiates between recurring capital expenditures and nonrecurring capital expenditures. Recurring Capital expenditures receive consistent funding for ongoing capital infrastructure needs throughout the City and ensure that General CIP dollars are available for improvements in particular areas. Their creation grew out of the recognition that, while some recurring needs are relatively small in scope, it was still imperative that resources be reserved to fund necessary work. Routine capital expenditures generally will have no significant impact on the operating budget. Nonrecurring capital expenditures generally receive one-time funding for the construction of a public facility or acquisition of land for a future public facility. Any ongoing operating and maintenance costs related to these 84

91 Capital Improvements projects have been identified on the next page in the column listed as O&M. These estimates have also been included in our operating budget. Capital maintenance expenditures represent recurring capital expenditures intended specifically to sustain existing infrastructure and capital capacity, such as with water and sewer main replacements. Strategic Results As discussed elsewhere in this budget, the City s Performance-based Budgeting program, FOCUS, continues to act as the foundation of Arvada s budget process. When its implementation was underway in 2013, City Council adopted a new Strategic Plan for the City. Three strategic measures from previously adopted plans have been completed as of the time of publication: completion of a Pavement Condition Index (PCI) assessment on City streets, completion of a Comprehensive City Conduit Map identifying key conduit pathways, and the refinement and recommendation for a Justice Center provided to City Council. On May 16, 2016, City Council adopted the second revision to that plan, which included several results related to capital projects: In association with the biennial budget and ten-year financial plan, develop a costeffective plan to provide City services into the northwest area including development and staffing of a new Police Community Station and satellite facilities deemed necessary for other City services By the end of 2016, all right of way for the Jefferson Parkway will be legally described and committed to the JPPHA, and the CDOT Section 1601 Environmental Review process will be initiated as the next actions needed to construct the Parkway and, by 2017, an agreement for a permanent Jefferson Parkway business organization will be in place By 2017, complete a business and technical assessment of existing community broadband services to determine options for providing public and private high-speed broadband service throughout Arvada By 2019, 20% of all sidewalk gaps selected from the Transportation Committee inventory and approved by City Council will be built according to the then-current code requirements By 2019, the City will have 100% of the water needed for build-out of the City as defined by the Comprehensive Plan By 2019, 100% of all identified trail gaps and connection points recognized in the City s Parks, Trails and Open Space Master Plan and Bicycle Master Plan as identified by the Arvada Park Advisory Committee and as approved by City Council are built/completed By 2019, West Woods club house and related facilities are replaced The total of all identified projects will likely require a significant amount of funding that will not be available within the current time frame based on current revenue and expenditure projections. However, we may have opportunities to meet many of these goals over the next ten years using a long-term strategic plan guiding our allocation and prioritization. Staff will continue to work to obtain cost estimates and prioritize these goals throughout the term of this budget. 85

92 Capital Improvements Governmental Capital Expenditure Detail Listed below are six areas we wish to highlight. These represent contemplated capital expenditures through the capital planning model beyond this two-year budget cycle. Transportation Traffic Signal Replacement - $7.9 million Intersection Safety Improvements - $800,000 Arterial Road Improvements - $7 million New Traffic Signals - $2.9 million Facilities Park Maintenance Complex - $16 million Candelas Police Community Station - $5 million Central Stores & Archive Facility - $2.5 million Public Art - $500,000 Parks Playground Renovations - $8.8 million Irrigation System Renovations - $4.4 million Gold Strike Park - $1.7 million Sidewalks and Trails Sidewalk Gaps Completion - $3 million Sidewalk & Trail Improvements - $7.3 million Trail Renovation - $530,000 Ralston Road & Simms Ralston Road Reconstruction - $16.6 million Simms Street Improvements - $13.5 million Proposed Capital Expenditures Transportation Facilities Parks Public Art Sidewalks and Trails Ralston & Simms Street Improvements Transportation $28,581,033 Facilities $20,350,000 Parks $18,402,384 Public Art $494,490 Sidewalks and Trails $10,780,896 Ralston & Simms Street Improvements $30,100, Capital Expenditure Detail The table on the following two pages presents detail of the City s proposed capital expenditures. Capital expenditures are presented in major categories. Many major categories have recurring capital projects which are designated from capital projects that are considered one-time expenditures. The sources of funding are presented for each capital project as well as the impact to the operating budget. 86