About This Report. 3. The Revenue & Economic Analysis section provides additional analysis regarding key revenue sources and economic indicators.

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2 About This Report This report has been prepared by the City of Denton s Finance Department. The Quarterly Financial Report is intended to provide our users (internal and external) with information regarding the City s financial position and economic activity. This report includes information for the quarter ending March 31, This report is presented in four sections. 1. The Executive Dashboard section contains a high level summary of the major operating funds using graphic illustrations and key economic indicators. Narrative disclosures are also included to highlight any significant changes or fluctuations. 2. The Financial Summary section reports the performance of the major operating funds of the City. In addition, the report provides an end of year projection and a comparison to the budget for major revenue sources and expenditure items. 3. The Revenue & Economic Analysis section provides additional analysis regarding key revenue sources and economic indicators. 4. The Quarterly Investment Report provides a summary of the City s investment portfolio, interest earnings and a brief market outlook. 5. The Performance Report provides Key Performance Indicators (KPIs) for each of the goals identified in the City s strategic plan. The Quarterly Financial Report is intended to provide our users with timely and relevant information. Please provide us with any comments or suggestions you may have. If you would like additional information, feel free to contact me. Chuck Springer Director of Finance 215 East McKinney Street Denton, TX

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4 Section 1 City of Denton Quarterly Financial Report March 2014 Executive Dashboards 3

5 City of Denton, Texas General Fund Executive Dashboard FY FY ANNUAL ANNUAL FY DESCRIPTION BUDGET 1 PROJECTION VARIANCE Beginning Fund Balance as of 09/30/13 $ $ RESOURCES: AdValorem Taxes % Sales Taxes % Franchise Fees % Other Taxes % Service Fees % Fines and Fees % Licenses and Permits % Miscellaneous Revenue % Transfers In % $20 Total Revenues % Total Resources $10 EXPENDITURES: Personal Service % Material and Supplies % Maintenance and Repairs % Insurance % Miscellaneous % Operations % Transfers Out % Fixed Assets % Total Expenditures % $2.4 Net Income (Loss) (1.62) (1.62) Ending Fund Balance $ $ $2.2 $70 $60 $50 $40 $30 $ $2.6 Revenue & Expenses (in Millions) YTD Revenue YTD Expenses Oct 13 Nov 13 Dec 13 Jan 14 Feb 14 Mar 14 Sales Tax Monthly Average by Quarter $2.0 Key Trends $1.6 At this point in the fiscal year, revenues and expenditures are projected to meet budgeted levels. $1.8 $1.4 $1.2 $1.0 1Q 09 2Q 09 3Q 09 4Q 09 1Q 10 2Q 10 3Q 10 4Q 10 1Q 11 2Q 11 3Q 11 4Q 11 1Q 12 2Q 12 3Q 12 4Q 12 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 1 Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which was estimated in the FY budget process. Note: All figures presented are in millions of dollars. 4

6 DESCRIPTION Beginning Working Capital City of Denton, Texas Electric Fund Executive Dashboard FY ANNUAL BUDGET 1 FY ANNUAL PROJECTIONS FY VARIANCE and Reserves as of 9/30/13 $ $ % RESOURCES: Operating Revenues % Non-operating Revenues % Total Revenues % Total Resources EXPENDITURES: Purchased Power % Operation and Maintenance % Non-Operating Expenditures % Total Expenditures % Net Income (Loss) (17.12) 12) (23.39) 39) Ending Working Capital and Reserves $ $ $100 $90 $80 $70 $60 $50 $40 $30 $20 $10 $ Revenue & Expenses (in Millions) Oct 13 Nov 13 Dec 13 Jan 14 Feb 14 Mar 14 YTD Revenue YTD Expense Historical Quarterly GWH Sales Key Trends GWH Purchase Power expenses are projected 7% higher than budgeted due to higher energy costs directly related to the fluctuations in the natural gas market and also as a result of the operating schedule of Gibbons Creek generation facility Operations and Maintenance expenses are projected 3% below budget due to vacancies, anticipated cost saving on materials, supplies, maintenance and operations cost. 0 1Q 09 3Q 09 1Q 10 3Q 10 1Q 11 3Q 11 1Q 12 3Q 12 1Q 13 3Q 13 1 Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which was estimated in the FY budget process. Note: All figures presented are in millions of dollars. 1Q 14 5

7 City of Denton, Texas Water Fund Executive Dashboard FY FY ANNUAL ANNUAL FY DESCRIPTION BUDGET 1 PROJECTION VARIANCE Beginning Working Capital and dr Reserves as of 09/30/13 2 $ $ RESOURCES: Water Sales % Other Water Revenues % Transfers In % Impact Fee Revenue % Total Revenues % Total Resources EXPENDITURES: Personal Service % Operations, Services % Capital Outlay % Debt Service % Transfers Out % Total Expenditures % Net Income (Loss) (0.32) 0.44 Ending Working Capital and Reserves $ $ $25 $20 $15 $10 $5 $ 3,000 2,500 2,000 1,500 Revenue & Expenses (in Millions) Oct 13 Nov 13 Dec 13 Jan 14 Feb 14 Mar 14 YTD Revenue YTD Expenses Historical QuarterlyGallonsSold (in Millions) Key Trends 1,000 Operations, Services are projected to be $0.43 million under budget due to seasonal fluctuations in materials & supplies and reduced outside services expenses. Personal Service expenditures are expected to be below budget due to position vacancies. 1 Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which was estimated in the FY budget process. 2 The Beginning Working Capital balance excludes $3.3 million of Impact Fees Reserves and $1.0 million of Development Plan Line Reserves Q 09 3Q 09 1Q 10 3Q 10 1Q 11 Note: All figures presented are in millions of dollars. 3Q 11 1Q 12 3Q 12 1Q 13 3Q 13 1Q 14 6

8 City of Denton, Texas Wastewater Fund Executive Dashboard FY FY ANNUAL ANNUAL FY DESCRIPTION BUDGET 1 PROJECTION VARIANCE Beginning Working Capital and Reserves as of 09/30/13 2 $ 8.59 $ 9.19 RESOURCES: Wastewater Fees % Other Wastewater Revenue % Drainage Fees % Transfer In % Impact Fee Revenue % $4 Total Revenues % $2 $ Total Resources EXPENDITURES: Personal Service % Operations, Services % $18 $16 $14 $12 $10 $8 $6 Revenue & Expenses (in Millions) Oct 13 Nov 13 Dec 13 Jan 14 Feb 14 Mar 14 YTD Revenue YTD Expenses Capital Outlay % Historical QuarterlyGallonsBilled (in Millions) Debt Service % 1,200 Transfer Out % 1,000 Total Expenditures % Net Income (Loss) (0.55) (0.28) 800 Ending Working Capital 600 and Reserves $ 8.04 $ 8.91 Key Trends Operations, Services are projected to be under budget due to lower than anticipated Materials & Supplies and Maintenance & Repair costs. 0 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which was estimated in the FY budget process. 2 The Beginning Working Capital balance excludes $2.12 million of Impact Fees Reserves, $1.0 million of Development Plan Line Reserves and $1.0 million for Drainage Reserves. Note: All figures presented are in millions of dollars. 7

9 City of Denton, Texas Drainage Operations Executive Dashboard FY FY ANNUAL ANNUAL FY DESCRIPTION BUDGET PROJECTION VARIANCE REVENUES: Residential Drainage Fees $ 1.55 $ % Nonresidential Drainage age Fees % Wastewater Resources % General Fund Transfer % Total Revenues % $3.0 $2.5 $2.0 Revenue & Expenses (in Millions) EXPENDITURES: Personal Service % Operations, Services % $1.0 Capital Outlay % Debt Service % $0.5 Transfer Out % Total Expenditures % $ Net Income (Loss) $ - $ - $1.5 Oct 13 Nov 13 Dec 13 Jan 14 Feb 14 Mar 14 YTD Revenue YTD Expenses Key Trends Personal Services are projected to be lower than budget due to a vacant engineer position. Capital Outlay is projected to be higher than budget due to savings in other expenditures. Note: All figures presented are in millions of dollars. 8

10 City of Denton, Texas Solid Waste Fund Executive Dashboard FY FY ANNUAL ANNUAL FY DESCRIPTIO N BUDGET 1 PRO JECTIO N VARIANCE Beginning Working Capital 6,600 6,000 5,400 4,800 and Reserves as of 09/30/13 2 $ 3.06 $ ,200 RESO URCES: Collection & Disposal % Recycling % Other Revenue % Total Revenues % Total Resources EXPENDITURES: Personal Service % Operations, Services % Capital Outlay % Debt Service % Transfer Out % Total Expenditures % Net Income (Loss) Ending Working Capital and Reserves $ 3.10 $ 3.77 Key Trends Recycling revenue is anticipated to be greater than budget because Commodity Revenue from Construction and Demolition is expected to increase. Other Revenue is less than expected because Truck Wash Revenue has not materialized as anticipated. 3,600 3,000 2,400 1,800 1, ,500 30,000 27,500 25,000 22,500 20,000 17,500 15,000 12,500 10,000 7,500 5,000 2, Qtr 3 Residential Curbside Collection Tonnage 2012 Qtr Qtr Qtr Qtr Qtr Qtr 1 Refuse Tonnage Recycling Tonnages 2014 Qtr 2 Commercial Refuse & Recycling (Front & Side Load) Cubic Yards Serviced per Week Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Commercial Refuse Commercial Recycling 1 Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which was estimated in the FY budget process. 2 The Beginning Working Capital Reserve excludes $6.15 million of Landfill Closure/Post Closure reserves. Note: All figures presented are in millions of dollars. 9

11 City of Denton, Texas Airport Fund Executive Dashboard FY FY ANNUAL ANNUAL FY DESCRIPTION BUDGET 1 PROJECTION VARIANCE Beginning Working Capital and Reserves as of 09/30/13 $ 6.03 $ 5.89 RESOURCES: Airport Ground Leases % FBO Commissions % Miscellaneous % Total Operating Revenues % EXPENDITURES: Personal Service % Operations, Services % Transfer Out % TtlO Total Operating Expenditures % Net Operating Income (Loss) (0.51) (0.54) NON-OPERATING REVENUES: Investment Income % Gas Well Royalties % Total Non-Operating Revenues % NON-OPERATING OPERATING EXPENDITURES: Debt Service % Transfer Out - Capital % Total Non-Operating Expenditures % Net Non-Operating Income (0.43) (0.25) Net Income (0.94) (0.79) Edi Ending Working Capital itl and dr Reserves $ $ Key Trends Airport Ground Leases and Miscellaneous revenues are projected to be $0.06 million less than budget and Operation expenditures are projected to be $0.06 million less due to the timing of the construction of new hangars and Airport development. Gas Well Royalties are projected to be $ million more than budget due to well head $4.5 $4.0 $3.5 $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 - GAS WELL REVENUE (in millions of dollars by fiscal year) YTD AIRPORT OPERATIONS BY QUARTER (takeoff or landing) 1Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q - 14 prices and pumping activities. Transfer Out Capital is projected to be $0.13 million under budget due to fewer opportunities for investment projects than anticipated. 1 Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which was estimated in the FY budget process. Note: All financial amounts presented are in millions of dollars. 10

12 City of Denton, Texas Street Improvement Fund Executive Dashboard FY FY ANNUAL ANNUAL FY DESCRIPTIO N BUDGET 1 PROJECTIO N VARIANCE Beginning Fund Balance as of 09/30/2013 $ 0.99 $ 1.33 RESO URCES: Franchise Fe es % Street Cuts % Inve stme nt Income % Transfers In % Total Revenues % Total Resources $3.5 $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $ Revenue & Expenses (in Millions) Oct 13 Nov 13 Dec 13 Jan 14 Feb 14 Mar 14 EXPENDITURES: Personal Service % Materials & Supplies % Maintenance & Repairs % Operations, Services % Transfer Out % Total Expe nditure s % Net Income (Loss) (0.48) (0.48) Ending Fund Balance $ 0.51 $ 0.85 Key Trends YTD Revenue YTD Expenses Tons of Asphalt Laid(in Thousands) Qtr 1 Qtr2 FY FY Lane MilesSurface Treatment Tons of asphalt laid declined 88% in the 2 nd quarter as compared to last year due to wet and icy road conditions. Lane miles of surface treatment declined 73% in the 2 nd quarter as compared to last year due to wet and icy road conditions Qtr 1 Qtr 2 FY FY Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which was estimated in the FY budget process. Note: All figures presented are in millions of dollars. 11

13 City of Denton, Texas Grants Dashboard FY FY GRANT ANNUAL FY DESCRIPTIO N AMO UNT PRO JECTION VARIANCE Budget Comm Development $ 2.32 $ % Public Safety % Parks & Recreation % Other % Total Budget % New Awards Comm Development % Public Safety % Other % Total New Awards % $2.5 $2.0 $1.5 $1.0 $0.5 $ FY Awards & Expenses (in Millions) Public Safety % FY Grants Awarded COMM DEV OTHER 12% PUBLIC SAFETY PARKS & REC Awards Expenses OTHER Totals $ 5.64 $ % PARKS & REC Key Trends PARKS & REC 3% The following grants have been received in FY : Police: Auto Theft Grant $239,233 ($8,901 in Sept 2013), Tobacco Grant $7,500, JAG grant $21, % Fire : 2012 SHSP LETPA $9,500. Community Development : ESG $497,011 ($370 in Sept 2013), Amy Young Program $110,000. Solid Waste: Landfill $29,040 in March 2014 PUBLIC SAFETY 33% COMM DEV 52% Note: All figures presented are in millions of dollars. 12

14 Section 2 City of Denton Quarterly Financial Report March 2014 This report is designed for internal use and does not include all the funds and accounts included in the City of Denton s operations. The information provided is unaudited; for a complete audited report, please refer to the City of Denton Comprehensive Annual Financial Report, available through the City s Finance Department, City Secretary s Office, or Denton Public Libraries. FINANCIAL SUMMARY 13

15 City of Denton General Fund Schedule of Revenues - Budget vs. Projection (Unaudited) For the Period Ended March 31, 2014 PRIOR BUDGET CURRENT ANNUAL ANNUAL BUDGET VS REVENUE DESCRIPTION Y-T-D Y-T-D Y-T-D BUDGET PROJECTION PROJECTION Current Year - Ad Valorem $ 31,205,233 $ 32,065,144 $ 32,550,227 $ 33,056,849 $ 33,056,849 0% Delinquent - Ad Valorem 162, , , , ,000 0% Miscellaneous Penalties & Fees 170, , , , ,085 0% Ad Valorem Taxes 31,537,395 32,396,094 32,790,688 33,698,934 33,698,934 0% Sales Tax 12,957,764 13,668,536 13,400,573 27,326,141 27,326,141 0% Franchise - Gas Utilities 132, , , , ,322 0% Franchise - Private Electric Utilities 46,143 57,109 45, , ,578 0% Franchise - Cable 211, , , , ,397 0% Franchise - Telecom 143, , , , ,228 0% Franchise - Denton Municipal Utilities 2,378,314 1,582,312 2,504,607 5,475,918 5,475,918 0% Franchise - DISD Fiber ,127 14,127 0% Franchise Fees 2,912,589 2,978,178 3,037,695 7,592,570 7,592,570 0% Other Taxes 92, , , , ,978 0% Ambulance Service Fees 1,186, ,000 1,222,340 2,425,000 2,425,000 0% Charges to Bond Funds 88, , , ,500 0% Fire Department Fees 85, ,613 93, , ,227 0% Building Inspections Fees 201, , , , ,362 0% Park Department Fees 235, , ,244 1,582,786 1,582,786 0% Planning Department Fees 664, , , , ,822 0% Reprographics Fees (1) - 227, , , ,158 0% Miscellaneous Service Fees 45,669 51,154 59, , ,309 0% Service Fees 2,508,311 2,012,685 2,844,193 6,130,164 6,130,164 0% Denton Municipal Fines 983,204 1,032,193 1,032,554 2,064,384 2,064,384 0% Parking Fines 123, ,612 99, , ,225 0% Miscellaneous Fines and Fees 478, , ,449 1,166,680 1,166,680 0% Court Administrative and Service Fees 490, , ,062 1,128,800 1,128,800 0% Fines and Fees 2,076,322 2,290,478 2,141,345 4,725,089 4,725,089 0% Demolition Permits 3,420 4,776 6,255 9,551 9,551 0% Building Permits 635, , ,713 1,584,692 1,584,692 0% Certificate of Occupancy 31,000 35,151 42,585 70,304 70,304 0% Miscellaneous Licenses and Permits 21,695 55,215 4, , ,395 0% Licenses and Permits 691, , ,293 1,774,942 1,774,942 0% Investment Income 83,086 87,500 80, , ,000 0% Miscellaneous Revenues 351, , ,909 1,468,925 1,468,925 0% Miscellaneous Resources 435, , ,546 1,643,925 1,643,925 0% ROI - Denton Municipal Utilities 2,689,674 3,067,861 2,995,964 6,536,205 6,536,205 0% Transfers 3,653,847 3,915,152 3,913,999 7,829,273 7,829,273 0% Transfers 6,343,521 6,983,013 6,909,963 14,365,478 14,365,478 0% Total General Fund Revenues $ 59,554,867 $ 61,691,395 $ 62,374,457 $ 97,658,221 $ 97,658,221 0% (1) In fiscal year Reprographics moved from Technology Services, an Internal Services Fund, to the General Fund. 14

16 City of Denton General Fund Schedule of Expenditures - Budget vs Projection (Unaudited) For the Period Ended March 31, 2014 PRIOR BUDGET CURRENT ANNUAL ANNUAL BUDGET VS Y-T-D Y-T-D Y-T-D BUDGET PROJECTION PROJECTION NEIGHBORHOOD SERVICES Building Inspections $ 929,911 $ 1,035,828 $ 992,550 $ 2,067,713 $ 2,067,713 0% Community Improvement Services 549, , ,383 1,417,248 1,417,248 0% Libraries 2,557,156 2,855,053 2,888,195 5,694,026 5,694,026 0% Parks and Recreation 4,631,016 5,891,628 5,059,663 11,738,853 11,738,853 0% Planning 895,774 1,143, ,824 2,308,343 2,308,343 0% Development Review Engineering (1) 148, % Gas Well Review 238, , , , ,040 0% Social Services 169, , , , ,098 0% 10,119,343 12,066,016 10,911,186 24,078,321 24,078,321 0% PUBLIC SAFETY Animal Services 460, , ,154 1,114,890 1,114,890 0% Fire 11,164,938 11,773,962 11,198,184 23,533,276 23,533,276 0% Municipal Court 656, , ,151 1,403,132 1,403,132 0% Municipal Judge 167, , , , ,210 0% Police 12,106,936 12,963,520 12,606,441 25,905,460 25,905,460 0% 24,555,547 26,220,370 25,183,049 52,395,968 52,395,968 0% TRANSPORTATION Traffic Operations 810,495 1,068, ,623 2,132,489 2,132,489 0% Transportation Operations 179, , , , ,715 0% Street Lighting 330, , , , ,000 0% 1,320,094 1,622,949 1,396,224 3,240,204 3,240,204 0% ADMINISTRATIVE & COMMUNITY SERVICES Cable Television 129, , , , ,829 0% City Manager's Office 1,233,004 1,442,371 1,314,408 2,796,706 2,796,706 0% Economic Development 828,411 1,155, ,251 2,298,693 2,298,693 0% Facilities Management 1,453,051 1,714,900 1,520,090 3,427,147 3,427,147 0% Finance 1,602,726 1,762,024 1,604,408 3,485,408 3,485,408 0% Human Resources 724, , ,912 1,654,149 1,654,149 0% Internal Audit 68,072 38,061 6,662 76,093 76,093 0% Legal Administration 934,795 1,089,182 1,066,029 2,371,071 2,371,071 0% Public Communications Office 186, , , , ,511 0% Reprographics (2) - 227, , , ,158 0% Non-Departmental 1,107,966 1,006,420 1,694,042 2,241,002 2,241,002 0% 8,267,910 9,628,020 9,241,654 19,560,767 19,560,767 0% TOTAL EXPENDITURES $ 44,262,894 $ 49,537,355 $ 46,732,113 $ 99,275,260 $ 99,275,260 0% (1) In fiscal year Development Review Engineering moved from the General Fund to the newly established Engineering Services Fund, an Internal Services Fund. (2) In fiscal year Reprographics moved from Technology Services, an Internal Services Fund, to the General Fund. 15

17 City of Denton Electric Fund Schedule of Expenditures - Budget vs Actual(Unaudited) For the Period Ended March 31, 2014 PRIOR BUDGET CURRENT ANNUAL ANNUAL BUDGET VS DESCRIPTION Y-T-D Y-T-D Y-T-D BUDGET 2 PROJECTION PROJECTION Beginning Working Capital and Reserves as of 9/30/13 $ 74,609,630 $ 78,102,530 REVENUES: Operating Revenues $ 60,413,546 $ 65,140,698 $ 71,454, ,892, ,274,463 0% Non-operating Revenues 233, , , , ,620-1% Total Revenues 60,647,161 65,305,738 71,615, ,242, ,622,083 0% EXPENDITURES: Purchased Power 45,198,152 44,518,520 49,485, ,578, ,995,740 7% Operation and Maintenance 12,277,212 16,670,224 14,467,009 32,465,779 31,627,578-3% Return on Investment 1,860,092 1,970,808 2,148,971 4,507,707 4,532,714 1% Franchise Fee 2,657,274 2,812,864 3,073,728 6,439,581 6,475,306 1% Non-Operating Expenditures 1 9,611,597 18,783,702 18,670,493 22,368,035 22,368,035 0% Total Expenditures 71,604,327 84,756,118 87,845, ,359, ,999,373 4% Net Income (Loss) $ (10,957,166) $ (19,450,380) $ (16,229,558) (17,116,770) (23,377,290) Ending Working Capital and Reserves $ 57,492,860 $ 54,725,240 1 Adjusted timing of debt service transfers to meet required debt service payment in FY Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which was estimated in the FY budget process. 16

18 City of Denton Water Fund Schedule of Expenditures - Budget vs Actual(Unaudited) For the Period Ended March 31, 2014 PRIOR BUDGET CURRENT ANNUAL ANNUAL BUDGET VS DESCRIPTION Y-T-D Y-T-D Y-T-D BUDGET 3 PROJECTION PROJECTION Beginning Working Capital and Reserves as of 09/30/13 1 $ 16,063,152 $ 18,230,641 REVENUES: Water Sales Residential $ 6,544,407 $ 6,834,933 $ 6,274,625 17,197,614 17,031,963-1% Water Sales Commercial 6,623,601 6,887,733 6,647,250 15,354,720 15,491,987 1% Water for Resale 461, , , ,462 1,069,230 14% Other Water 625, , , , ,226 1% Public Works Fees and Permits 213, % Public Works Cap Lbr/Subledger 57, % Engineering Fees & Permits 1, % Engineering Capital Charges 966, % Transfers In 2,283,114 2,572,188 2,572,186 5,144,373 5,073,020-1% Investment Income 40,965 23,369 34,560 46,000 74,000 61% Impact Fee Revenue 1,300,520 1,550,000 1,550,620 3,100,000 3,100,000 0% Total Revenues 19,117,570 18,522,547 17,841,824 42,577,060 42,643,426 0% EXPENDITURES: Personal Service 5,232,109 4,724,526 4,211,859 9,680,858 9,473,257-2% Purchased Power 503, , ,770 1,501,504 1,489,319-1% Purchase of Water 35,287 38,928 40,966 91,500 97,730 7% Materials and Supplies 595, , ,391 1,813,589 1,697,794-6% Maintenance and Repairs 366, , ,140 1,281,646 1,308,642 2% Insurance 101, , , , ,201 0% Miscellaneous 55,024 61,722 50,242 98,639 94,596-4% Operations, Services 936,848 1,376, ,955 2,757,227 2,419,862-12% Capital Outlay 997,452 1,536,481 1,301,903 6,272,893 6,211,393-1% Return on Investment 478, , ,220 1,200,034 1,203,874 0% Franchise Fee 682, , ,885 1,691,258 1,696,744 0% Debt Service 2 6,604,939 11,658,413 11,658,413 13,201,756 13,199,256 0% Transfers Out 1,762,760 1,548,852 1,605,683 3,097,700 3,097,700 0% Total Expenditures 18,352,676 24,152,107 22,590,027 42,905,805 42,207,368-2% Net Income (Loss) $ 764,894 $ (5,629,560) $ (4,748,203) (328,745) 436,058 Ending Working Capital and Reserves $ 15,734,407 $ 18,666,699 1 The Beginning Working Capital and Reserves excludes Fund Balance from the Impact Fee Reserve Fund of $3,289,014 and $1,000,000 of Development Plan Line Reserves. 2 Adjusted timing of debt service transfers to meet required debt service payment in FY Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which was estimated in the FY budget process. 17

19 City of Denton Wastewater Fund Schedule of Expenditures - Budget vs Actual(Unaudited) For the Period Ended March 31, 2014 PRIOR BUDGET CURRENT ANNUAL ANNUAL BUDGET VS DESCRIPTION Y-T-D Y-T-D Y-T-D BUDGET 3 PROJECTION PROJECTION Beginning Working Capital and Reserves as of 09/30/13 1 $ 8,592,154 $ 9,193,103 REVENUES: Residential Fees $ 4,676,366 $ 5,007,315 $ 5,315,862 10,280,865 10,452,402 2% Commercial Fees 4,802,957 5,726,307 5,048,586 11,499,902 10,252,443-11% Effluent Irrigation Fees 46,420 24,817 42,330 61,468 72,899 19% Wholesale Fees 228, , , , ,379 4% Other Wastewater Fees 686, , ,569 1,328,719 1,489,119 12% Drainage Fees 2,149,970 2,178,516 2,186,977 4,373,117 4,348,393-1% Transfer In 209, , , , ,713 0% Interest Revenue 22,244 11,500 19,300 23,000 34,000 48% Impact Fee Reserves 550, , ,220 1,100,000 1,100,000 0% Total Revenues 13,372,343 14,635,696 14,404,445 29,777,228 28,878,348-3% EXPENDITURES: Personal Service 3,207,961 3,735,763 3,301,401 7,396,085 7,091,547-4% Purchased Power 367, , , , ,000-7% Materials and Supplies 251, , , , ,303-12% Maintenance and Repairs 353, , ,283 1,318,349 1,141,735-13% Insurance 67, , , , ,122 0% Miscellaneous 29,259 45,252 31,713 45,857 35,941-22% Operations, Services 958,364 1,325, ,419 2,453,022 2,201,203-10% Capital Outlay 1,807,124 2,355,162 1,197,071 5,072,243 4,910,432-3% Return on Investment 351, , , , ,483-4% Franchise Fee 502, , ,104 1,183,520 1,139,262-4% Debt Service 2 3,376,015 6,314,874 6,314,874 7,047,929 7,045,429 0% Transfers Out 1,380,816 1,513,830 1,487,554 3,027,655 3,013,134 0% Total Expenditures 12,653,568 17,660,115 15,494,724 30,327,234 29,162,591-4% Net Income (Loss) $ 718,775 $ (3,024,419) $ (1,090,279) (550,006) (284,243) Ending Working Capital and Reserves $ 8,042,148 $ 8,908,860 1 The Beginning Working Capital and Reserves excludes Fund Balance from the Impact Fee Reserve Fund of $2,115,050, $1,000,000 of Development Plan Line Reserves, and $1,000,000 of Drainage Reserves. 2 Adjusted timing of debt service transfers to meet required debt service payment in FY Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which was estimated in the FY budget process. 18

20 City of Denton Drainage Operations Schedule of Expenditures - Budget vs Actual(Unaudited) For the Period Ended March 31, 2014 PRIOR BUDGET CURRENT ANNUAL ANNUAL BUDGET VS DESCRIPTION Y-T-D Y-T-D Y-T-D BUDGET PROJECTION PROJECTION REVENUES: Residential Drainage Fees $ 786,457 $ 773,117 $ 802,301 $ 1,552,522 $ 1,572,862 1% Nonresidential Drainage Fees 1,363,513 1,405,412 1,384,676 2,820,595 2,775,531-2% Wastewater Resources 32, ,128 37,840 75,680 75,680 0% General Fund Transfer 134, , , , ,066 0% Total Revenues 2,317,859 2,871,190 2,466,350 4,933,863 4,907,139-1% EXPENDITURES: Personal Service 617, , ,435 1,793,130 1,597,194-11% Materials and Supplies 33,516 44,728 15,221 95,596 88,100-8% Maintenance and Repairs 26,612 64,925 26, , ,292 2% Insurance 9,945 12,116 12,116 24,232 24,232 0% Miscellaneous 2,019 2,883 2,455 2,888 2,732-5% Operations, Services 186, , , , ,160 0% Capital Outlay 687, , , , ,814 27% Debt Service 1 494, , ,611 1,104,805 1,104,805 0% Transfer Out 259, , , , ,810-1% Total Expenditures 2,317,859 2,871,190 2,466,350 4,933,863 4,907,139-1% Net Income (Loss) $ - $ - $ - $ - $ - 1. Adjusted timing of debt service transfers to meet required debt service payment in FY

21 City of Denton Solid Waste Fund Schedule of Expenditures - Budget vs Actual(Unaudited) For the Period Ended March 31, 2014 PRIOR BUDGET CURRENT ANNUAL ANNUAL BUDGET VS DESCRIPTION Y-T-D Y-T-D Y-T-D BUDGET 3 PROJECTION PROJECTION Beginning Working Capital and Reserves as of 09/30/13 1 $ 3,062,371 $ 3,759,193 REVENUES: Garbage Fees - Residential $ 3,831,703 $ 4,091,546 $ 4,107,342 8,314,421 8,324,252 0% Garbage Fees - Commercial 5,081,518 5,170,602 4,943,751 10,617,476 10,911,411 3% Landfill Fees 1,346,683 1,781,281 1,567,885 3,649,385 3,130,889-14% Recycling 1,475,124 1,575,610 1,564,629 3,150,699 3,302,017 5% Other Revenue 98, , , , ,185-10% Interest Revenue 3,326 3,154 2,241 6,304 5,000-21% Total Revenues 11,836,419 12,929,690 12,294,414 26,353,035 26,226,754 0% EXPENDITURES: Personal Service 3,959,053 4,499,965 4,324,201 9,039,891 8,769,675-3% Materials and Supplies 117, , , , ,291-13% Maintenance and Repairs 114, , , , ,886 13% Insurance 84,481 99,464 99, , ,515 2% Miscellaneous 27,045 40,793 31,612 70,660 69,850-1% Operations, Services 2,680,608 2,960,872 2,644,260 5,695,362 5,855,870 3% Capital Outlay 17, , , , ,185 2% Debt Service 2 2,689,541 5,487,303 5,486,944 5,938,830 5,937,331 0% Franchise Fee 578, , ,503 1,308,247 1,304,831 0% Landfill Closure 163, , , , ,900 0% Transfer Out 1,095,183 1,120,631 1,092,153 2,240,372 2,240,372 0% Total Expenditures 11,527,130 15,968,521 15,149,403 26,312,990 26,218,706 0% Net Income (Loss) $ 309,289 $ (3,038,831) $ (2,854,989) 40,045 8,048 Ending Working Capital and Reserves $ 3,102,416 $ 3,767,241 1 The Beginning Working Capital and Reserves excludes Fund Balance from the Landfill Closure/Post Closure Reserve Fund of $6,145, Adjusted timing of debt service transfers to meet required debt service payment in FY Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which was estimated in the FY budget process. 20

22 City of Denton Airport Fund Schedule of Expenses- Budget vs Projection (Unaudited) For the Period Ended March 31, 2014 PRIOR BUDGET CURRENT ANNUAL ANNUAL BUDGET VS DESCRIPTION Y-T-D Y-T-D Y-T-D BUDGET 2 PROJECTION PROJECTION Beginning Working Capital and Reserves as of 09/30/13 $ 6,029,131 $ 5,890,583 OPERATING REVENUES: Airport Ground Leases $ 191,311 $ 229,666 $ 198, , ,884-9% FBO Commissions 109, , , , ,000-8% Miscellaneous 19,320 29,513 26,532 59,000 44,683-24% Total Operating Revenues 320, , , , ,567-10% OPERATING EXPENSES: Personal Service 207, , , , ,070 0% Materials and Supplies 5,246 23,369 11,568 46,725 46,001-2% Maintenance and Repairs 16,296 39,513 35,461 78,997 71,670-9% Insurance 9,282 10,666 10,662 21,324 21,324 0% Miscellaneous ,500 1,200-20% Operations 53, ,044 50, , ,511-23% Transfers Out - Operating 180, , , , ,208 0% Franchise Fee 16,010 18,042 17,321 36,071 36,071 0% Total Operating Expenses 489, , ,114 1,421,901 1,361,055-4% Operating (Loss) (169,202) (256,039) (292,699) (511,902) (538,488) NON-OPERATING REVENUES: Investment Income 15,758 13,506 12,670 27,000 27,000 0% Gas Well Royalties 387, , , , ,000 6% Total Non-Operating Revenues 403, , , , ,000 5% NON-OPERATING EXPENSES: Debt Service 1 113, , , , ,262 0% Transfers Out - Capital 625, , ,457 1,000, ,638-12% Total Non-Operating Expenses 738, , ,657 1,357,462 1,233,900-9% Non-Operating Income (Loss) (335,000) (337,714) (442,272) (430,462) (256,900) Net Income (Loss) $ (504,202) $ (593,753) $ (734,971) (942,364) (795,388) Ending Working Capital $ 5,086,767 $ 5,095,195 1 Adjusted timing of debt service transfers to meet required debt service payment in FY Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which was estimated in the FY budget process. 21

23 City of Denton Street Improvement Fund Schedule of Expenditures - Budget vs Actual(Unaudited) For the Period Ended March 31, 2014 PRIOR BUDGET CURRENT ANNUAL ANNUAL BUDGET VS DESCRIPTION Y-T-D Y-T-D Y-T-D BUDGET 1 PROJECTION PROJECTION Beginning Fund Balance as of 9/30/2013 $ 991,942 $ 1,330,184 RESOURCES: Franchise Fees $ 2,521,346 $ 3,594,626 $ 2,875,669 7,186,378 7,186,378 0% Street Cuts 188, , , , ,914 0% Investment Income 2,537 5,002 2,487 10,000 10,000 0% Transfers In 132, , , , ,911 0% Total Resources 2,844,789 3,953,682 3,214,849 7,904,203 7,904,203 0% EXPENDITURES: Personal Service 984,779 1,138,200 1,083,192 2,275,487 2,275,487 0% Materials and Supplies 31,569 37,574 29,762 75,130 75,130 0% Maintenance and Repairs 1,759,478 1,982, ,449 3,964,379 3,964,379 0% Insurance 23,876 30,652 15,985 61,280 61,280 0% Miscellaneous 3,084 2,501 3,417 5,000 5,000 0% Operations, Services 255, , ,709 1,048,596 1,048,596 0% Transfer Out 40, , , , ,331 0% Fixed Assets - - Total Expenditures 3,099,486 4,103,737 2,743,724 8,379,203 8,379,203 0% Net Income (Loss) $ (254,697) $ (150,055) $ 471,125 (475,000) (475,000) Ending Fund Balance $ 516,942 $ 855,184 1 Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which was estimated in the FY budget process. 22

24 City of Denton Grants Schedule of Grants For the Period Ended March 31, 2014 GRANT DESCRIPTION EXPENDITURES AS OF CURRENT 9/30/ Y-T-D ANNUAL BUDGET ANNUAL PROJECTION BUDGET VS PROJECTION FY Budget US Dept of HUD - Community Development Block Grant(CDBG) $ 3,106,152 $ 243,023 $ 1,349,511 $ 950,000 70% US Dept of HUD - HOME Investment Partnership Program 1,410, , , ,000 67% Community Development 4,516, ,115 2,324,960 1,600,000 69% Public Safety Training Facility Grant - 349, , , % 2010 Congressional Setaside Grant - - 1,000,000 1,000, % TxDot Comprehensive Grant - 27,007 68,350 68, % 2013 Byrne Assistance Grant (JAG) - 21,298 21, % 2013 UASI , , % Emergency Management Performance Grant - 35,640 75,728 75, % Public Safety - 412,559 1,641,114 1,641, % Clean Transportation Triangle (CTT) - 400,000-0% Alternative Fuel & Advanced Technology Grant - 200,000-0% Airport Maintenance (RAMP) Grant - 23,147 50,000 50, % Summer Food Grant , , % Other - 23, , ,000 25% 2009 Congressional Setaside Grant - 500, ,000 0% 2011 UASI State Homeland Security Grant 197,851 49,531-49,531 0% 2012 UASI - 99,190-99,190 0% 2012 UASI - LETPA - 54,950-54,950 0% Prior year's budget 197, , ,671 0% Total FY Budget 4,714,608 1,870,492 4,766,074 4,144,785 87% New Awards Emergency Solutions Grant , , , % Amy Young Barrier Removal Program - 34, , , % Community Development , , , % 2012 SHSP-LETPA State Homeland Security Grant - - 9,500-0% Tobacco Enforcement Program Grant - 4,800 7,500 7, % Auto Theft Grant 8,901 85, , , % Public Safety 8,901 90, , ,832 96% Landfill Charging Station - 29,040 29,040 29,040 0% Other - 29,040 29,040 29,040 0% Total New Awards 9, , , ,513 99% TOTALS $ 4,723,879 $ 2,229,267 $ 5,649,087 $ 5,018,298 89% 1 A portion of the grants presented cover multiple years. 23

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26 Section 3 City of Denton Quarterly Financial Report March 2014 REVENUE & ECONOMIC ANALYSIS 25

27 Revenue & Economic Analysis Summary The data included in this section provides information on local, state and national trends impacting the City s financial position. The following notes are provided to facilitate this section s readability. 1. Positive Outlook Represents favorable conditions for the local economy. Color code Green. 2. Cautious Outlook Represents changing conditions that require close monitoring. Color code Yellow. 3. Negative Outlook Represents unfavorable conditions for the local economy. Color code Red. The data included in this section have been obtained from a variety of sources. Sales tax and construction related data have been obtained from internal city departments. Economic data for the State have been obtained from the Federal Reserve Bank of Dallas and may be subject to availability. National economic data were compiled with assistance from the City s investment advisor, First Southwest Asset Management. 26

28 National Economic Trends Period ending March 31, 2014 Gross Domestic Product (GDP) Severe winter weather helped derail economic growth in the first three months of 2014, as the initial reading of Q1 annualized GDP grew by just 0.1%, below the +1.2% median forecast, and significantly under the +3.2% historical average. Big negative contributions during the quarter were concentrated in business investment, which dropped by an annualized 2.8%, the worst showing since Q Slower growth in business inventories shaved 0.6 percentage point from the overall GDP number, while exports fell by 7.6%, subtracting another 0.8 from GDP. Government spending also dropped as did residential investment. Personal consumption actually rose by a solid 3.0%. This would normally be seen as quite positive except that the spending gains were concentrated in services rather than goods, with the majority of spending on healthcare. Nonfarm Payrolls Nonfarm payrolls grew by an average of 255k in the Oct-Nov period, 112k in Dec-Jan period and 194k in Feb-March. The economy has now recovered all but 437k of the 8.7 million jobs lost during the recent recession. However, this fact suggests total job creation has been negative since The unemployment rate, calculated from a separate survey of U.S. households, reached a fiveyear low of 6.6% in January, before drifting up to 6.7% in February and March. Since the beginning of last year, the broader U6 unemployment rate, which includes everyone who would accept a fulltime job if it were offered to them, has fallen from 14.4% to 12.7%, a substantial decline from the 17.2% peak in April There are now only 10.5 million Americans actively seeking work, although the number of underemployed, diverted and discouraged workers probably doubles this number 27

29 Housing Severe weather conditions have combined with higher mortgage rates and higher home prices to slow sales. Existing home sales fell for the third straight month, declining by 0.2% in March to a 4.59 million annualized unit pace, the lowest since June 2012, and nearly a 15% drop from the recovery high point of 5.38 million in July. New home sales fell 14.5% in March while the number of available home rose. This pushed the inventoryto-sales ratio to 6 months, the highest since Nov Since reaching a six-year annualized high of 1.1 million in November, the pace of U.S. housing starts has fallen by almost 15% to 946k in March. Pending home sales, which track contract signings, fell for the eighth straight month in February. On a year-over-year basis, contract signings are now down 10.2%, representing the largest annual decrease in almost three years. Retail Sales Severe cold temperatures and snow had a negative impact on spending during the winter months, as retail sales fell by 0.3% in December and 0.7% in January, but as the temperatures warmed up, sales rebounded to gain 0.7% in February and 1.1% in March. U.S. auto sales followed a similar pattern, reaching a 6½-year high of 16.3 million annualized units in November, before averaging just 15.2mm in the Dec-Feb period, and rebounding back to 16.3mm in March. In the upcoming coming months, there is reason to expect retail sales will be decidedly positive. The Conference Board s measure of consumer confidence rose to a postrecession high of 82.3 in March as the future expectations index jumped. This suggests that consumers feel confident enough to make purchases. The longer term spending constraint is sluggish wage growth and a relatively low U.S. savings rate. 28

30 Texas Home Sales The Texas housing market seems to be taking a breather after several years of brisk expansion. As of March 2014, Texas sales volume was unchanged on a year-over-year basis, while dollar volume was up 9.1%. During this same period, average home prices also climbed by 9.1% to $234,300, while the month s supply fell from 4.2 to 3.4 months, within 1/10 th of the record low. In Denton County, on a year-over-year basis through March, sales volume was up 5.7% while dollar volume rose 15.8%. The average sales price rose 9.5% to $233,300 from a year earlier. Total listings are currently at 1,399 units or a lean 1.8 month supply, down from 1,565 and 2.3 a year earlier. The number of homes available for sale in Denton County remains near record lows. Lean housing inventories across the state suggest that future construction could be significant in The paper was prepared by FirstSouthwest Asset Management, is intended for educational and informational purposes only and does not constitute legal or investment advice, nor is it an offer or a solicitation of an offer to buy or sell any investment or other specific product. Information provided in this paper was obtained from sources that are believed to be reliable; however, it is not guaranteed to be correct, complete, or current, and is not intended to imply or establish standards of care applicable to any attorney or advisor in any particular circumstances. The statements within constitute the views of FirstSouthwest Asset Management as of the date of the report and may differ from the views of other divisions/departments of First Southwest Company. In addition, the views are subject to change without notice. This paper represents historical information only and is not an indication of future performance. 29

31 Fuel Prices Outlook Cautious Description: Quarterly fuel trends for the United States and Texas. Analysis: Fuel prices are a major commodity source in the economy. Studies have shown a positive effect on disposable income levels when fuel prices decrease. It is estimated that for every penny decrease in the price of fuel, $1.3 billion is available to the consumer for disposable income. Therefore, the price of fuel is likely to be a key predictor of sales tax collections. Fuel prices showed a 3.5% increase from the prior quarter at the national level and a 3.4% increase at the state level. Sales tax returns are flat from the prior quarter. Because of the instability in this commodity, staff has rated this outlook as Cautious. Fuel Prices Sales Tax Texas Fuel Prices US Fuel Prices $4.00 $8 $3.50 $7 $3.00 $6 $2.50 $5 Dollars $2.00 $4 Millions $1.50 $3 $1.00 $2 $0.50 $1 $0.00 2Q '10 4Q '10 2Q '11 4Q '11 2Q '12 4Q '12 2Q '13 4Q '13 2Q '14 $0 Source: U.S. Department of Energy 30

32 Municipal Cost Index Outlook Negative Description: The Municipal Cost Index was developed to show the rate of inflation for the cost of goods purchased frequently by local governments. The MCI draws on the monthly statistical data collected by the U.S. Departments of Commerce and Labor as well as independently compiled data to project a composite cost picture for the municipal budget officer or operating department manager. Costs of labor, materials and contract services are all factored into the composite MCI. Major indicators of these items used for the MCI include the Consumer Price Index, the Wholesale Price Index for Industrial Commodities (now known as the Producer Price Index) and the construction cost indexes published by the U.S. Department of Commerce, respectively. Analysis: The Municipal Cost Index (MCI) pulls a variety of prices for frequently purchased commodities for local governments. The cost for labor, materials and contract services are factored for the MCI. An increase in MCI means the overall price mix for these types of commodities will cost local governments more to do routine business. The 2nd fiscal quarter of 2014 shows an increase of 1.7% over the prior quarter and an increase of 4.8% over the 2nd fiscal quarter of Staff has rated this indicator as Negative Municipal Cost Index Q '12 3Q '12 4Q '12 1Q '13 2Q '13 3Q '13 4Q '13 1Q '14 2Q '14 Source: American City and County Magazine Note: The Municipal Cost Index is designed to show the effects of inflation on the cost of providing municipal services. State and local government officials rely on American City & County's Municipal Cost Index to stay on top of price trends, help control price increases for commodities, make informed government contract decisions and intelligent budget planning. Since 1978, readers have loyally referred to the Municipal Cost Index to determine the cost of inflation and, hence, the rising cost of doing business as a local government. 31

33 Hotel Occupancy Tax Analysis Outlook Positive Description: Tax imposed on a person who, under a lease, concession, permit, right of access, license, contract, or agreement, pays for the use of a room that is in a hotel. A hotel includes: any building in which the public may obtain sleeping accomodations; motels; a tourist home, house or court; lodginghouse; inn; roominghouse; or bed and breakfast. The tax rate levied by the City is 7% of the price paid for a room. The State also levies a tax equal to 6%. Analysis: While the use of this revenue source is restricted by state law, it is an essential revenue source for various tourist related activities within the community and an important indicator of local economic activity. Hotel Occupancy tax revenue through the 2nd Quarter of 2014 was 3.8% more than budget but 4.2% less than the prior year's actual. Collections for FY included delinquent payments from one property totaling $166,365. This additional revenue is the reason the current quarterly collections are less than last fiscal year. Staff has rated the outlook for this economic indicator as Positive. 2nd Quarter FY Actual Y-T-D Occupancy Tax Revenue: $ 445,749 $ 886,126 FY Budget $ 400,169 $ 816,136 Over(Under) Budget $ 45,580 $ 69,990 FISCAL YEAR FORECAST Hotel Occupancy Tax Budget: $ 1,739,454 End of Year Projection: $ 1,739,454 Variance: $ - $500,000 Hotel Occupancy Tax Collections $400,000 $300,000 $200,000 $100,000 $0 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr FY FY FY FY FY

34 Sales and Use Tax Analysis Outlook Cautious Description: Tax imposed on all retail sales, leases and rentals of most goods, as well as taxable services. The total tax rate levied within the City is 8.25% (State, 6.25%; City, 1.5%; DCTA, 0.5%). Analysis: As the second largest revenue source to the City's General Fund, sales and use taxes are essential to the delivery of services to the community. Gross sales tax revenues through the 2nd quarter of FY 2014 compared to revenues from the prior year 2nd quarter shows a 4.48% increase, and compared to the budget it is -.11% below. Staff has rated this indicator as Cautious. 2nd Quarter FY Actual Y-T-D Revenue: Gross Sales Tax Municipal Operations $ 395,766 $ 775,859 General Retail & Others 6,560,628 13,134,827 Comptroller Fees (128,622) (257,634) Amount Retained (126,049) (252,479) Total Revenue $ 6,701,723 $ 13,400,573 Expenses: Economic Incentives Denton Crossing $ 121,978 $ 277,072 Unicorn Lake 15,270 28,593 Rayzor Ranch 211, ,692 Total Expenses $ 348,596 $ 764,357 Net Total 6,353,127 12,636,216 FY Budget 6,347,169 12,938,648 Over(Under) Budget $ 5,958 $ (302,432) Sales Tax Budget: $ 27,326,141 Year End Projection: 27,326,141 Variance to Original Budget: $ - Economic Development Expenditure Budget: $ 1,472,000 Year End Projection: 1,472,000 Variance to Original Budget: $ - $7.0 Gross Sales Tax Collections (Millions) $6.0 $5.0 $4.0 $3.0 $2.0 $1.0 $0.0 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr FY Actual FY Actual FY Actual FY Actual 33

35 Certificates of Occupancy Outlook Cautious Description: Certificates of Occupancy (CO) are permits issued in compliance with the 2009 International Building Code (IBC) and applicable City ordinances. The IBC states, "that no building shall be used or occupied, and no change in the existing occupancy classification of a building or structure or portion thereof shall be made, until the building official has issued a certificate of occupancy.." Certificates of Occupancy ensure that applicable building, fire and consumer health codes are met. Analysis: Certificates of Occupancy are an economic indicator that provides a framework for the overall condition of the local economy. Certificates of Occupancy decreased 13.6% from the prior quarter and increased 40.7% from the 2th quarter of Staff has rated the outlook for this revenue indicator as Cautious Certificates of Occupancy Q '09 3Q '09 4Q '09 1Q '10 2Q '10 3Q '10 4Q '10 1Q '11 2Q '11 3Q '11 4Q '11 1Q '12 2Q '12 3Q '12 4Q '12 1Q '13 2Q '13 3Q '13 4Q '13 1Q '14 2Q '14 Source: City of Denton's Planning and Development Department. 34

36 Residential Permits Outlook Cautious Description: Residential Permits are issued in compliance with the 2009 International Residential Code (IRC) and applicable City ordinances. The data presented in this analysis only include new permits issued and not remodels/alterations. Analysis: Residential Permits are an economic indicator that provides a framework for the overall condition of the local economy. In particular, residential permits have a direct correlation with building inspection fees and appraised values. Residential permits decreased 12.8% from the prior quarter and increased 25.9% from the 2nd Quarter of Staff has rated the outlook for this revenue indicator as Cautious Residential Permits Q '09 3Q '09 4Q '09 1Q '10 2Q '10 3Q '10 4Q '10 1Q '11 2Q '11 3Q '11 4Q '11 1Q '12 2Q '12 3Q '12 4Q '12 1Q '13 2Q '13 3Q '13 4Q '13 1Q '14 2Q '14 Source: City of Denton's Planning and Development Department. 35

37 Texas Leading Indicators Index Outlook Positive Description: The Texas Leading Indicators Index is a single weighted summary statistic that sheds light on the future of the state's economy. The index is designed to signal movements and changes in the state's rate of growth. The index includes the following leading indicators: Texas Value of the Dollar, U.S. Leading Index, Real Oil Prices, Well Permits, Initial Claims for Unemployment Insurance, Texas Stock Index, Help-Wanted Advertising, and Average Weekly Hours Worked in Manufacturing. Analysis: Texas Leading Indicators provide a framework for the overall condition of the local economy. Data for this quarter shows continued increases in the state's rate of growth. The index increased by 0.9% from the prior quarter and increased 4.0% from the 1st quarter of Staff has rated this indicator as Positive Texas Leading Indicators Index Q '04 3Q '04 1Q '05 3Q '05 1Q '06 3Q '06 1Q '07 3Q '07 1Q '08 3Q '08 1Q '09 3Q '09 1Q '10 3Q '10 1Q '11 3Q '11 1Q '12 3Q '12 1Q '13 3Q '13 1Q '14 Source: Federal Reserve Bank of Dallas 36

38 Unemployment Rate Index Outlook Cautious Description: Unemployment is defined as the number or proportion of people looking for work at the prevailing wage who are unable to find employment. Analysis: Unemployment is an economic indicator that provides a framework for the overall condition of the national, state and local economies. The unemployment rate for the City of Denton increased 0.8% from the prior quarter and decreased 13% from the 2nd Quarter of The unemployment rate for the other reported sectors were lower than the prior quarter except for U6 was up slightly. As a result of the continued downward trend since the high of the 1st Quarter of 2010, staff has rated the outlook for this revenue indicator as Cautious Unemployment Rate Index Q '08 4Q '08 2Q '09 4Q '09 2Q '10 4Q '10 2Q '11 4Q '11 2Q '12 4Q '12 2Q '13 4Q '13 2Q '14 Dallas-Plano-Irving MD Denton Texas U6 Unemployment United States Source: Federal Reserve Bank of Dallas, U.S. Bureau of Labor Statistics, and Texas Workforce Commission Note: U6 unemployment includes marginally attached workers who currently are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the recent past. Discouraged workers, a subset of the marginally attached, have given a job-market related reason for not looking currently for a job. Persons employed part-time for economic reasons are those who want and are available for full-time work but have had to settle for a part-time schedule. 37

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40 Section 4 City of Denton Quarterly Financial Report March 2014 INVESTMENT REPORT 39

41 CITY OF DENTON : QUARTERLY INVESTMENT REPORT 2nd Fiscal Quarter March 31, 2014 Page 1 INVESTMENT POOL Policy Par Market Book Unrealized Max. Benchmark Portfolio: Value Value Value Gain/(Loss) 1 WAM Wam YTM Yield* Investment Pool $ 423,599,935 $ 426,355,468 $ 426,043,811 $ 311, % 0.13% *Twelve month moving average of a one year U.S. T-bill yield % of Total Par Market Book Unrealized Portfolio Policy Securities By Investment Type: Value Value Value Gain/(Loss) 1 WAM YTM (Book Value) Max. U.S. Treasuries 15,000,000 15,146,289 15,168,984 (22,695) % 3.56% % U.S. Federal Agencies 216,000, ,533, ,241, , % 50.99% % Municipal Bonds 29,585,000 30,670,109 30,626,792 43, % 7.19% 15.00% Certificates of Deposit 107,000, ,000, ,000, % 25.11% 35.00% Commercial Paper 4,000,000 3,990,468 3,991,420 (952) % 0.94% 5.00% Demand Deposits 52,014,935 52,014,935 52,014, % 12.21% - Total Portfolio $ 423,599,935 $ 426,355,468 $ 426,043,811 $ 311, % % - 1 Unrealized gain/(loss) is the difference between the market and book value and does not represent an actual gain or loss. Gains and losses are realized only when a security is sold prior to maturity. Since it is the City's practice to hold investments until they mature, the temporary gains and losses are unlikely to be realized. Current 3 Months Ago 3 Month 1 Year Ago Investment Pool Comparisons: 3/31/ /31/2013 Difference 3/31/2013 Par Value $ 423,599,935 $ 438,890,680 $ (15,290,745) $ 420,334,259 Market Value $ 426,355,468 $ 442,019,975 $ (15,664,507) $ 422,931,520 Book Value $ 426,043,811 $ 441,790,765 $ (15,746,954) $ 422,510,776 Unrealized Gain(Loss) $ 311,657 $ 229,210 $ 82,447 $ 420,744 Weighted Average Maturity (14) 446 Yield to Maturity 0.49% 0.50% -0.01% 0.50% $ $ $ $ 1 Year Ago Difference 3,265,676 3,423,948 3,533,035 (109,087) (11) -0.01% Portfolio Composition: U.S. Treasuries 3.56% 2.29% 1.27% 0.00% U.S. Federal Agencies 50.99% 53.10% -2.11% 55.66% Municipal Bonds 7.19% 6.96% 0.22% 0.71% Certificates of Deposit 25.11% 26.26% -1.14% 33.37% Commercial Paper 0.94% 0.00% 0.94% 0.00% Demand Deposits 12.21% 11.39% 0.82% 10.26% 3.56% -4.67% 6.48% -8.26% 0.94% 1.95% Bank Collateral Review**: Institution Collateral Type Market Value Collected Balance Pledge Required Collateral Ratio Wells Fargo Demand Deposits BNY Mellon U.S. Agency MBS $ 58,758,827 $ 51,519,709 > 102% % Comerica Collateralized CDs Federal Reserve U.S. Agency MBS $ 72,282,879 $ 48,222,005 > 110% % ViewPoint Bank Collateralized CDs Fed Home Loan Bk U.S. Agency MBS $ 11,483,749 $ 10,078,498 > 102% % **Does not include FDIC insurance Depository Ledger Balance Review: Institution Account Type Beginning Bal. Deposits Withdrawals Ending Bal. Wells Fargo Bank Checking $ 50,708,623 $ 36,544,622 $ (35,238,310) $ 52,014,935 Compliance Statement & Review: The Quarterly Investment Report is in full compliance with the objectives, restrictions, and strategies as set forth in the City of Denton's Investment Policy and the Public Funds Investment Act (Texas Government Code, Chapter ). Reviewer: Antonio Puente, Jr., CGFO Assistant Director of Finance Preparer: Caroline Finley Treasury Administrator Reviewer: Chuck Springer, CGFO Director of Finance 40

42 CITY OF DENTON : QUARTERLY INVESTMENT REPORT 2nd Fiscal Quarter March 31, 2014 Page 2 INVESTMENT POOL Current 3 Months Ago 3 Month 1 Year Ago 1 Year 3/31/ /31/2013 Difference 3/31/2013 Difference Par Value - U.S. Treasuries $ 15,000,000 $ 10,000,000 $ 5,000,000 $ - $ 15,000,000 Par Value - U.S. Federal Agencies 216,000, ,000,000 (17,000,000) 233,000,000 (17,000,000) Par Value - Municipal Bonds 29,585,000 29,585,000-3,000,000 26,585,000 Certificates of Deposit 107,000, ,000,000 (9,000,000) 141,000,000 (34,000,000) Par Value - Commercial Paper 4,000,000-4,000,000-4,000,000 Demand Deposits 52,014,935 50,305,680 1,709,255 43,334,259 8,680,676 Total Par Value $ 423,599,935 $ 438,890,680 $ (15,290,745) $ 420,334,259 $ 3,265,676 Market Value - U.S. Treasuries $ 15,146,289 $ 10,109,370 $ 5,036,919 $ - $ 15,146,289 Market Value - U.S. Federal Agencies 217,533, ,864,482 (17,330,815) 235,601,731 (18,068,064) Market Value - Municipal Bonds 30,670,109 30,740,443 (70,334) 2,995,530 27,674,579 Certificates of Deposit 107,000, ,000,000 (9,000,000) 141,000,000 (34,000,000) Market Value - Commercial Paper 3,990,468-3,990,468-3,990,468 Demand Deposits 52,014,935 50,305,680 1,709,255 43,334,259 8,680,676 Total Market Value $ 426,355,468 $ 442,019,975 $ (15,664,507) $ 422,931,520 $ 3,423,948 Book Value - U.S. Treasuries $ 15,168,984 $ 10,124,502 $ 5,044,482 $ - $ 15,168,984 Book Value - U.S. Federal Agencies 217,241, ,590,642 (17,348,962) 235,176,517 (17,934,837) Book Value - Municipal Bonds 30,626,792 30,769,941 (143,149) 3,000,000 27,626,792 Certificates of Deposit 107,000, ,000,000 (9,000,000) 141,000,000 (34,000,000) Book Value - Commercial Paper 3,991,420-3,991,420-3,991,420 Demand Deposits 52,014,935 50,305,680 1,709,255 43,334,259 8,680,676 Total Book Value $ 426,043,811 $ 441,790,765 $ (15,746,954) $ 422,510,776 $ 3,533,035 Accrued Interest $ 1,422,707 $ 1,855,837 $ (433,130) $ 1,434,931 $ (12,224) Cash Value - $ 427,778,175 $ 443,875,812 $ (16,097,637) $ 424,366,451 $ 3,411,724 (Total Market Value + Accrued Interest) Unrealized Gain/(Loss) $ 311,657 $ 229,210 $ 82,447 $ 420,744 $ (109,087) Change in Fair Value since 9/30/13 - $ (787,000) $ (384,041) $ (402,959) $ (987,191) $ 200,191 (GASB 31) Strategy Statement: The Investment Pool is an aggregation of the majority of City funds which may include tax receipts, enterprise fund revenues, fine and fee revenues, reserve funds for outstanding utility system revenue bonds, as well as some, but not necessarily all bond proceeds, grants, gifts and endowments. This portfolio is maintained to meet anticipated daily cash needs for the City's operations, capital projects and debt service. In order to ensure the ability of the City to meet obligations and to minimize potential liquidation losses, the dollar-weighted average stated maturity of the Investment Pool shall not exceed 1.5 years or 550 days. The objectives of this portfolio are to: (1) ensure safety of principal by investing in only high quality securities for which a strong secondary market exists; (2) ensure that anticipated cash flow needs are matched with adequate investment liquidity; (3) limit market and credit risk through diversification; and (4) attain the best feasible yield commensurate with the objectives and restrictions set forth in the Investment Policy by actively managing the portfolio to meet or exceed the twelve month moving average yield of a one year U.S. Treasury bill as derived from the Federal Reserve Statistical Release H.15 for constant maturities. 41

43 CITY OF DENTON : QUARTERLY INVESTMENT REPORT 2nd Fiscal Quarter March 31, 2014 Page 3 INVESTMENT POOL Current 3 Months Ago 1 Year Ago Summary By Security Type: 3/31/ /31/2013 3/31/2013 U.S. Treasuries - Coupon $ 15,168,984 $ 10,124,502 $ - U.S. Federal Agencies - Coupon 196,264, ,598, ,179,415 U.S. Federal Agencies - Callable 20,977,067 25,992,319 19,997,102 Municipal Bonds - Coupon 30,626,792 30,769,941 3,000,000 Certificates of Deposit - CDARS 49,000,000 59,000,000 62,000,000 Certificates of Deposit - Collateralized 58,000,000 57,000,000 79,000,000 Commercial Paper - Discount 3,991, Demand Deposits 52,014,935 50,305,680 43,334,259 Total Book Value $ 426,043,811 $ 441,790,765 $ 422,510,776 Current 3/31/2014 U.S. Federal Agencies - Coupon 46.07% U.S. Federal Agencies - Callable 4.92% Municipal Bonds - Coupon 7.19% U.S. Treasuries - Coupon 3.56% Demand Deposits 12.21% Commercial Paper - Discount 0.94% Certificates of Deposit - Collateralized 13.61% Certificates of Deposit - CDARS 11.50% Objective: The portfolio is restricted to U.S. Treasuries and agency securities (maturing in less than five years), state and locally issued bonds of Texas rated AA or better (maturing in less than three years), insured or collateralized certificates of deposit (maturing in less than three years), collateralized repurchase agreements (maturing in less than thirty days), commercial paper rated A-1/P-1 or better (maturing in less than 270 days), and local government pools & SEC registered money market mutual funds (weighted average maturity of less than 60 days). Current 3 Months Ago 1 Year Ago Summary By Security Type: 3/31/ /31/2013 3/31/2013 U.S. Treasuries - Coupon 3.56% 2.29% 0.00% U.S. Federal Agencies - Coupon 46.07% 47.22% 50.93% U.S. Federal Agencies - Callable 4.92% 5.88% 4.73% Municipal Bonds - Coupon 7.19% 6.96% 0.71% Certificates of Deposit - CDARS 11.50% 13.36% 14.67% Certificates of Deposit - Collateralized 13.61% 12.90% 18.70% Commercial Paper - Discount 0.94% 0.00% 0.00% Demand Deposits 12.21% 11.39% 10.26% Total % % % 42

44 CITY OF DENTON : QUARTERLY INVESTMENT REPORT 2nd Fiscal Quarter March 31, 2014 Page 4 INVESTMENT POOL Current 3 Months Ago 1 Year Ago Summary By Issuer: 3/31/ /31/2013 3/31/2013 CDARS CDs $ 49,000,000 $ 59,000,000 $ 62,000,000 COMERICA BANK CDs 48,000,000 47,000,000 49,000,000 BBVA COMPASS BANK CDs ,000,000 VIEWPOINT BANK CDs 10,000,000 10,000,000 14,000,000 U.S. TREASURY 15,168,984 10,124,502 - FFCB 22,997,994 29,997,944 34,344,755 FHLB 42,194,056 49,269,498 30,435,968 FHLMC 60,338,667 60,459,786 72,853,536 FNMA 91,710,963 94,863,415 97,542,258 GARLAND, TX GENERAL OBG BONDS 3,221,626 3,247,882 - TEXAS STATE GENERAL OBG BONDS 3,000,000 3,000,000 3,000,000 TEXAS SCHOOL DIST GEN OBG BONDS* 24,405,166 24,522,058 - JP MORGAN SECURITIES LLC 3,991, WELLS FARGO DEMAND DEPOSITS 52,014,935 50,305,680 43,334,259 Total Book Value $ 426,043,811 $ 441,790,765 $ 422,510,776 Current 3/31/2014 JP MORGAN SECURITIES LLC, 0.94% TEXAS SCHOOL DIST GEN OBG BONDS, 5.72% TEXAS STATE GEN OBG BONDS, 0.70% GARLAND, TX GEN OBG BONDS, 0.76% WF DEMAND DEPOSITS, 12.21% CDARS CDs, 11.50% COMERICA BANK CDs, 11.27% VIEWPOINT BANK CDs, 2.35% U.S. TREASURY, 3.56% FNMA, 21.53% FFCB, 5.40% FHLB, 9.90% FHLMC, 14.16% Objective: It is the policy of the City to diversify its investment portfolio by restricting investments in a single issuer/institution to no more than 35 percent of the portfolio's total book value and to those offering repurchase agreements, collateralized CDs, and local or state of Texas municipal securities to no greater than 15 percent. The purpose of this requirement is to limit market and credit risk. Commercial paper issuers are further restricted by a 5 percent total portfolio limitation. There are no issuer limitations on U.S. Treasuries or FDIC insured products except as they pertain to the overall 35% certificates of deposit restriction. Current 3 Months Ago 1 Year Ago Summary By Issuer: 3/31/ /31/2013 3/31/2013 CDARS CDs 11.50% 13.35% 14.67% COMERICA BANK CDs 11.27% 10.64% 11.60% BBVA COMPASS BANK CDs 0.00% 0.00% 3.79% VIEWPOINT BANK CDs 2.35% 2.26% 3.31% U.S. TREASURY 3.56% 2.29% 0.00% FFCB 5.40% 6.79% 8.13% FHLB 9.90% 11.15% 7.20% FHLMC 14.16% 13.69% 17.24% FNMA 21.53% 21.47% 23.09% GARLAND, TX GENERAL OBG BONDS 0.76% 0.74% 0.00% TEXAS STATE GENERAL OBG BONDS 0.70% 0.68% 0.71% TEXAS SCHOOL DIST GEN OBG BONDS* 5.72% 5.55% 0.00% JP MORGAN SECURITIES LLC 0.94% 0.00% 0.00% WELLS FARGO DEMAND DEPOSITS 12.21% 11.39% 10.26% Total % % % *Individual issuers are listed on the attached Portfolio Details Report 43

45 CITY OF DENTON : QUARTERLY INVESTMENT REPORT 2nd Fiscal Quarter March 31, 2014 Page 5 INVESTMENT POOL Current 3 Months Ago 1 Year Ago Maturity Time Frame: 3/31/ /31/2013 3/31/ Months $ 72,014,935 $ 92,305,680 $ 79,334, Months 39,000,000 20,000,000 40,000, Months 77,000,000 55,000,000 80,000, Months 149,585, ,375, ,000, Months & Over 86,000, ,210,000 84,000,000 Total Par Value $ 423,599,935 $ 438,890,680 $ 420,334,259 $500,000,000 $450,000,000 $400,000,000 $350,000,000 $300,000,000 $250,000,000 $200,000,000 $150,000,000 $100,000,000 $50,000,000 $0 Current 3 Months Ago 1 Year Ago Months Months Months 24 Months & Over Objective: The risk of market price volatility is minimized through maturity diversification. Investment maturities are staggered to provide cash flow based on the anticipated needs of the City. Liquidity is achieved by matching investment maturities with forecasted cash flow requirements and by investing in securities with active secondary markets. Short-term local government investment pools and money market mutual funds help to provide daily liquidity and may be utilized as a competitive alternative to fixed income investments. Current 3 Months Ago 1 Year Ago Maturity Time Frame: 3/31/ /31/2013 3/31/ Months 17.00% 21.03% 18.87% Months 9.21% 4.56% 9.52% Months 18.18% 12.53% 19.03% Months 35.31% 35.63% 32.59% 24 Months & Over 20.30% 26.25% 19.99% Total % % % 44

46 CITY OF DENTON : QUARTERLY INVESTMENT REPORT 2nd Fiscal Quarter March 31, 2014 Page 6 ECONOMIC SUMMARY Interest Rate History Source: U.S. Federal Reserve Statistical Release (H.15) Fiscal Year Fiscal Year Fiscal Year Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Market Sector: Avg Avg Avg Avg Avg Avg Avg Avg Avg Avg Avg Avg Fed Funds (effective) 0.16% 0.18% 0.21% 0.15% 0.12% 0.16% 0.18% 0.18% 0.18% 0.14% 0.09% 0.08% 3-Month U.S. T-Bill 0.03% 0.22% 0.18% 0.12% 0.05% 0.15% 0.12% 0.16% 0.14% 0.10% 0.04% 0.01% 2-Year U.S. T-Note 0.82% 0.93% 1.18% 0.96% 0.87% 0.96% 0.72% 0.43% 0.62% 0.70% 0.41% 0.21% Portfolio Benchmark* 1.82% 1.44% 1.05% 0.63% 0.47% 0.42% 0.39% 0.34% 0.32% 0.30% 0.25% 0.22% Portfolio Yield 2.91% 2.41% 1.86% 1.63% 1.43% 1.22% 1.06% 0.62% 0.65% 0.66% 0.66% 0.62% Fiscal Year Fiscal Year Fiscal Year Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Market Sector: Avg Avg Avg Avg Avg Avg Avg Avg Avg Avg Avg Avg Fed Funds (effective) 0.07% 0.13% 0.16% 0.14% 0.16% 0.14% 0.09% 0.08% 0.09% 0.08% 3-Month U.S. T-Bill 0.01% 0.08% 0.09% 0.11% 0.07% 0.09% 0.05% 0.02% 0.07% 0.05% 2-Year U.S. T-Note 0.26% 0.34% 0.29% 0.26% 0.26% 0.26% 0.33% 0.40% 0.34% 0.40% Portfolio Benchmark* 0.18% 0.15% 0.15% 0.16% 0.18% 0.18% 0.16% 0.15% 0.13% 0.13% Portfolio Yield 0.59% 0.58% 0.56% 0.55% 0.52% 0.50% 0.48% 0.49% 0.50% 0.49% *Twelve month moving average of a one year U.S. T-bill yield 3.00% FY FY FY FY FY FY % 2.00% 1.50% 1.00% 0.50% 0.00% Dec- 08 Mar- 09 Jun- 09 Sep- Dec- Mar- Jun Sep- Dec- Mar- Jun Sep- Dec- Mar- Jun Sep- Dec- Mar- Jun Sep- Dec- Mar- Jun- Sep Fed Funds 3-Month T-Bill 2-Year T-Note Portfolio Yield Portfolio Benchmark* Fiscal Year: $ $ $ $ $ Fiscal Year to Date Earnings Oct - Dec Oct - Mar Oct - Jun Oct - Sep 3 Months 6 Months 9 Months 12 Months 568,824 $ 1,121, ,749 $ 1,177,337 $ 1,703,496 $ 2,276, ,193 $ 1,239,869 $ 1,862,207 $ 2,511, ,111 $ 1,056,309 $ 1,631,563 $ 2,216,300 1,058,175 $ 1,920,154 $ 2,655,725 $ 3,248,091 QUARTERLY COMMENTARY March 31, 2014 Source: First Southwest Asset Management Economic Summary & TexStar Monthly Newsletter The first quarter of 2014 was characterized by concerns about uneven U.S. economic growth with continued negative weather impacts, a slowdown in emerging markets, as well as turmoil in Ukraine which led to a flight to quality resulting in higher U.S. Treasury bond prices and lower yields. There was a brief upward movement in rates around the March FOMC meeting when Chairwoman Janet Yellen inadvertently stirred financial markets with comments suggesting that interest rates may rise sooner than expected. She has since back peddled from these remarks and rates have fallen closer to previous levels. It appears continued slack in U.S. labor markets remains sufficient enough to keep inflation at low levels allowing the Fed to continue its accommodative policy to assist those currently unemployed. According to the April 2014 Bloomberg economist survey, the preliminary median forecast for the first calendar quarter annualized real GDP growth is 1.6% with 3.0%, 3.0%, and 3.1% for the following three quarters. 45

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50 Section 5 City of Denton Quarterly Financial Report March 2014 PERFORMANCE REPORT 49

51 STRATEGIC PLAN The City of Denton uses a Strategic Plan as a roadmap to achieve long term goals and objectives that capture the City s Vision, Mission, and Value statements. The Strategic Plan is a product of the input generated from the 2008/2009 Citizen Survey, two City Council Planning Sessions, two Leadership Retreats, a special appointed Strategic Planning Steering Committee, and various City Council discussions. The Strategic Plan was formally approved by the City Council in April 2011, and in January 2012, the Strategic Plan was reviewed and affirmed by the City Council during their annual planning retreat. In May 2013, the City Council discussed the Strategic Plan and priorities for the FY Budget. On September 17, 2013, the City Council approved the FY Strategic Plan and associated key performance indicators along with the budget itself. The Strategic Plan serves as the basis for resource allocation decisions that are used in the development of the FY Budget. The Strategic Plan is organized into five Key Focus Areas (KFAs) and major goals associated with each KFA are also identified below. Key Focus Area 1: Organizational Excellence Goal 1.1 Manage financial resources in a responsible manner. Goal 1.2 Develop a high performance work force. Goal 1.3 Promote effective internal and external communication. Goal 1.4 Achieve high level of customer satisfaction. Goal 1.5 Utilize technology to enhance efficiency and productivity. Key Focus Area 2: Public Infrastructure Goal 2.1 Optimize resources to improve quality of City roadways. Goal 2.2 Seek solutions to mobility demands and enhance connectivity. Goal 2.3 Promote superior utility services and facilities. Goal 2.4 Manage drainage infrastructure. Goal 2.5 Develop Capital Improvement Program (CIP) based on community needs. Key Focus Area 3: Sustainable Economic Development & Environmental Stewardship Goal 3.1 Manage growth, development, and redevelopment opportunities. Goal 3.2 Encourage economic development. Goal 3.3 Promote environmental sustainability. Key Focus Area 4: Safe, Livable and Family Friendly Community Goal 4.1 Enhance public safety in the community. Goal 4.2 Seek clean and healthy neighborhoods in the City of Denton. Goal 4.3 Provide quality, diverse, and accessible neighborhood services for the community. Key Focus Area 5: Partnerships and Regional Leadership Goal 5.1 Actively participate in regional, state, and federal initiatives. Goal 5.2 Maintain visible and effective relationships with governmental and nongovernmental organizations. In addition to the above KFAs and goals, the Strategic Plan also identified a number of specific and actionable objectives for the organization. The complete version of the strategic plan is provided on the following pages. In addition, specific performance indicators have been developed to track the City s progress in accomplishing the goals and objectives identified. The performance indicators are published quarterly in the City s quarterly financial report. 50

52 The matrix below organizes the Key Focus Areas (KFAs) by service area in the organization. While every department has some level of responsibility for each KFA, the matrix is intended to only highlight the primary departments responsible for each KFA. SERVICE AREA KFA 1 KFA 2 KFA 3 KFA 4 KFA 5 UTILITIES Electric Water Wastewater Solid Waste INTERNAL SUPPORT Technology Services Materials Management Fleet Engineering Services Risk NEIGHBORHOOD SERVICES Building Inspection Community Improvement Services Libraries Parks and Recreation Planning Gas Well Review Community Development PUBLIC SAFETY Animal Services Fire Police Municipal Court Municipal Judge TRANSPORTATION Airport Streets Traffic/Transportation ADMINISTRATIVE SERVICES City Manager s Office Economic Development Facilities Management Finance Human Resources Internal Audit Legal Public Communications Key Focus Area 1: Organizational Excellence Key Focus Area 2: Public Infrastructure Key Focus Area 3: Sustainable Economic Development & Environmental Stewardship Key Focus Area 4: Safe, Livable and Family Friendly Community Key Focus Area 5: Partnerships and Regional Leadership 51

53 City of Denton, Texas Strategic Plan Executive Summary General Overview of the Strategic Plan Key Focus Area Number of Measures On or Above Target Number of Measures Below Target Number of Measures Significantly Below Target 1) Organizational Excellence 2) Public Infrastructure ) Sustainable Economic Development and Environmental Stewardship 4) Safe, Livable, and Family Friendly Community 5) Partnerships and Regional Leadership Total On or Above Target These measures have either reached or exceeded established goals. Below Target The measures rated Below Target are within 5% of reaching established goals. SignificantlyBelow Target The measures rated Significantly Below are greater than 5% from reaching established goals. 8% 12% 80% 52

54 City of Denton, Texas Strategic Plan Performance Report Dashboard Key Focus Area 1: Organizational Excellence FY FY nd FY Progress Key Performance Indicators (KPIs) Department Actual Target Qtr Year to Date Indicator Goal 1.1 Manage financial resources in a responsible manner. % of Invoices paid within 30 days Finance 91% 93% 92% 91% General Fund revenue as a % of budget (1) Finance 99% 101% 86% 64% Utility Funds expenditures as a % of budget Finance 95% 100% 100% 99% Investment return achieved / benchmark rate Finance 0 49%/ 0 42%/ 0 49%/ 0 49%/ 0.49%/ 0.15% 0.42%/ 0.10% 0.49%/ 0.13% 0.49%/ 0.13% Number of Internal Control Monitoring Plan Projects Completed Internal Audit (1) Year to date and quarterly information based upon seasonal budgetary information. 53

55 City of Denton, Texas Strategic Plan Performance Report Dashboard Key Focus Area 1: Organizational Excellence FY FY nd FY Progress Key Performance Indicators (KPIs) Department Actual Target Qtr Year to Date Indicator Goal 1.2 Develop a high performance work force. Employee turnover rate HR 7.4% <10.0% 2.8% 4.4% % of performance reviews completed within 30 days of due date HR 64% 100% 53% 52% Number of Health Risk Assessments Performed Risk Mgmt Clinic Utilization Rate (% of available appointments) Risk Mgmt. 85% 80% 88% 88% Workers compensation costs per $100 of payroll Risk Mgmt. $0.59 $0.75 $0.68 $

56 City of Denton, Texas Strategic Plan Performance Report Dashboard Key Focus Area 1: Organizational Excellence FY FY nd FY Progress Key Performance Indicators (KPIs) Department Actual Target Qtr Year to Date Indicator Goal 1.3 Promote effective internal and external communication. Number of hits on City s website (in millions) Pub. Comm Number of followers on all social media sites (1) Pub. Comm. 18,241 40,000 26,432 56,188 % of online citizen inquiries responded to within 10 business days City Manager s Office 100% 100% 100% 100% (1) The FY Target for Public Communications: Number of followers on social media sites does not include last years data. 55

57 City of Denton, Texas Strategic Plan Performance Report Dashboard Key Focus Area 1: Organizational Excellence FY FY nd FY Progress Key Performance Indicators (KPIs) Department Actual Target Qtr Year to Date Indicator Goal 1.4 Provide exemplary customer service. % of solicitations completed within 90 days of the bid opening date Materials Mgmt. 86% 80% 100% 84% % of contracts reviewed within 5 days Legal 100% 100% 100% 100% %of Customer Service requests responded to within 24 hours Planning & Development Number of permits issued within 10 days of Building receiving application Inspections 100% 100% 100% 100% 92% 95% 96% 98% % of first contact resolution for customers Customer Service 89% 85% 91% 93% Average speed of calls answered (in seconds) Customer Service

58 City of Denton, Texas Strategic Plan Performance Report Dashboard Key Focus Area 1: Organizational Excellence FY FY nd FY Progress Key Performance Indicators (KPIs) Department Actual Target Qtr Year to Date Indicator Goal 1.5 Utilize technology to enhance efficiency and productivity. %of employees that rate IT services as good or better Technology Services 93% 98% 98% 96% % of work requests completed within 5 days Technology Services 91% 95% 90% 87% % of Customer Service payment transactions completed electronically Customer Service 48% 40% 53% 52% % of customers that receive electronic billing statements Customer Service 8% 7% 8% 8% 57

59 City of Denton, Texas Strategic Plan Performance Report Dashboard Key Focus Area 2: Public Infrastructure FY FY nd FY Progress Key Performance Indicators (KPIs) Department Actual Target Qtr Year to Date Indicator Goal 2.1 Optimize resources to improve quality of City roadways. % of intersections which need signalization Traffic 12% 12% 12% 12% Number of traffic signals serviced per month Traffic Lane markings replaced per year (feet) (1) Traffic 374, ,000 8,304 14,154 Square yards of asphalt roadway reconstructed per year Streets 43,752 21, ,637 22,346 Square yards of asphalt roadway overlayed per year (1) Streets 55,014 52, Square yards of asphalt roadway micro sealed Streets 82,607 87, per year (1) (1) Seasonal measure. Activity expected to be performed during third and fourth quarter. 58

60 City of Denton, Texas Strategic Plan Performance Report Dashboard Key Focus Area 2: Public Infrastructure FY FY nd FY Progress Key Performance Indicators (KPIs) Department Actual Target Qtr Year to Date Indicator Goal 2.2 Seek solutions to mobility demands and enhance connectivity. Ridership on DCTA transit system (bus and A Train) In millions Transportation Number of airport takeoffs/landings Airport 156, ,000 34,971 70,879 59

61 City of Denton, Texas Strategic Plan Performance Report Dashboard Key Focus Area 2: Public Infrastructure Key Performance Indicators (KPIs) Department FY FY nd FY Progress FY Actual FY Target 2nd Qtr FY Year to Date Progress Indicator Goal 2.3 Promote superior utility services and facilities. Number of work orders completed Facilities 14,916 13,000 3,424 7,194 Production of finished i water (billion of gallons) (1) Water Water mains replaced (feet) (1) Water 10,837 20,000 2,540 4,920 New water meters installed Water Wastewater treated through plant (billion of gallons) (1) Wastewater Wastewater mains replaced (feet) (1) Wastewater 5,403 8,500 1,710 2,725 Wastewater lines cleaned (feet) (1) Wastewater 525,214 5, 350, , ,381 Pounds of waste disposed per capita Solid Waste 1,996 1, % of waste diverted from the landfill Solid Waste 37% 40% 36% 39% % of electric system utilized (load factor) Electric 46% 46% 48% 48% (1) Seasonal measure. Activity expected to be performed during third and fourth quarter. 60

62 City of Denton, Texas Strategic Plan Performance Report Dashboard Key Focus Area 2: Public Infrastructure FY FY nd FY Progress Key Performance Indicators (KPIs) Department Actual Target Qtr Year to Date Indicator Goal 2.4 Manage drainage infrastructure. Lane miles of street sweeping completed (1) Drainage 6,609 4,800 1,414 2,436 Cubic yards of material collected in street sweeping Drainage 3,138 2,500 1,230 2,503 Feet of concrete channel cleaned (1) Drainage 18,916 25,000 35,558 36,758 Goal 2.5 Develop Capital Improvement Program (CIP) based on community needs. Number of projects in process CIP % of bonds (based on amount) spent within five years of sale date CIP 80% 85% 80% 80% (1) Seasonal measure. Activity expected to be performed during third and fourth quarter. 61

63 City of Denton, Texas Strategic Plan Performance Report Dashboard Key Focus Area 3: Sustainable Economic Development and Environmental Stewardship Key Performance Indicators (KPIs) Department FY FY nd FY Progress FY Actual FY Target 2nd Qtr FY Year to Date Progress Indicator Goal 3.1 Manage growth, development, and redevelopment opportunities. % of Certificates of Occupancy (COs) and Tenant Finish Outs (TFOs) reviewed within 10 days Building Inspections 92% 90% 98% 98% % of Pre Applications reviewed within a five (5) day period by all DRC members DRC 86% 90% 95% 94% % of Plats reviewed within a ten (10) day period by all DRC members DRC 86% 90% 86% 92% % of Specific Use Permit (SUP) applications reviewed within a ten (10) day period by all DRC members DRC 100% 90% 100% 100% % of Zoning Change applications reviewed within ten (10) day period by all DRC members. DRC 94% 100% 100% 100% Goal 3.2 Encourage economic development. Number of new companies contacted for business recruitment Economic Development City of Denton unemployment rate Economic Development 5.3% 5.9% 4.5% 4.5% 62

64 City of Denton, Texas Strategic Plan Performance Report Dashboard Key Focus Area 3: Sustainable Economic Development and Environmental Stewardship Key Performance Indicators (KPIs) Department FY FY nd FY Progress FY Actual FY Target 2nd Qtr FY Year to Date Progress Indicator Goal 3.2 Encourage economic development. Net sales tax collections related to economic development incentive agreements (in millions) Economic Development p g ( ) p $2.6 $2.1 $1.0 $1.8 Number of business retention visits Economic Development Value of commercial building permits issued (in millions) Building Inspections $129.5 $100.0 $27.1 $71.7 Square feet of commercial development completed (in millions) Building Inspections Goal 3.3 Promote environmental sustainability. Acreage of Brownfield sites redeveloped and number of grant fund applications (increased acres/grants filed) Environmental Services 1.94/1 1.94/1 1.94/1 1.94/1 % of city with tree canopy Planning 19% 19% 19% 19% Volunteer hours for Keep Denton Beautiful (KDB) and environmental services Solid Waste/ Environmental 15, ,930 4,708 6,485 Services 63

65 City of Denton, Texas Strategic Plan Performance Report Dashboard Key Focus Area 3: Sustainable Economic Development and Environmental Stewardship Key Performance Indicators (KPIs) Department FY FY nd FY Progress FY Actual FY Target 2nd Qtr FY Year to Date Progress Indicator Goal 3.3 Promote environmental sustainability. % of approved Alternative Development Plans (ADP) addressing water quality as a component of landscaping or parking Environmental 100% 100% 100% 100% Services Sustainable fuel used as a percentage of fuel consumed Fleet * 57% 47% 51% Fleet Availability Fleet 95% 95% 96% 96% Preventative Maintenance Compliance Fleet 100% 95% 96% 96% Cityof Denton facilities Renewable EnergyUsage Electric 57% 55% 57% 61% 64

66 City of Denton, Texas Strategic Plan Performance Report Dashboard Key Focus Area 4: Safe, Livable, and Family Friendly Community Key Performance Indicators (KPIs) Department FY FY nd FY Progress FY Actual FY Target 2nd Qtr FY Year to Date Progress Indicator Goal 4.1 Enhance Public Safety in the Community. Number of stakeholder meetings conducted Police Average patrol response time from dispatch to arrival on scene (in minutes) Police 5:57 6:45 8:27 8:19 Percentage of crime reports submitted through online self reporting system Police * 10% 20% 21% Live animal release rate for all animals housed at the Denton Animal Shelter Police 82% 75% 88% 87% Number of bicycle safety courses taught Police

67 City of Denton, Texas Strategic Plan Performance Report Dashboard Key Focus Area 4: Safe, Livable, and Family Friendly Community Key Performance Indicators (KPIs) Department FY FY nd FY Progress FY Actual FY Target 2nd Qtr FY Year to Date Progress Indicator Goal 4.1 Enhance Public Safety in the Community. Respond to all active structure fires in five minutes or less Fire 55% 90% 50% 50% Number of inspections completed for commercial /industrial / multi family structures Fire 4,366 4,320 1,211 2,493 Enhance current training program to improve alignment with the requirements of the Texas Fire 25,308 36,000 10,256 17,350 Commission on Fire Protection and ISO hours Cases processed Muni Court 39,560 41,139 9,692 17,388 66

68 City of Denton, Texas Strategic Plan Performance Report Dashboard Key Focus Area 4: Safe, Livable, and Family Friendly Community Key Performance Indicators (KPIs) Department FY FY nd FY Progress FY Actual FY Target 2nd Qtr FY Year to Date Progress Indicator Goal 4.2 Seek clean and healthy neighborhoods in the City of Denton. Building Number of food establishments inspected 1,045 1, Inspections % of food establishments with an 80 or better rating Building Inspections 94% 95% 95% 93% Number of health (Food Handler) cards issued Building Inspections 3,149 3, Number of code compliance or complaints inspected Building Inspections 4,657 2,500 1,971 3,367 Percentage of nuisance violations abated Community Imp. Services * 90% 98% 98% Percentage of minimum building standard violations abated Community Imp. Services * 85% 91% 89% Number of dangerous buildings repaired or demolished Community Imp. Services

69 City of Denton, Texas Strategic Plan Performance Report Dashboard Key Focus Area 4: Safe, Livable, and Family Friendly Community Key Performance Indicators (KPIs) Department FY FY nd FY Progress FY Actual FY Target 2nd Qtr FY Year to Date Progress Indicator Goal 4.2 Seek clean and healthy neighborhoods in the City of Denton. Community Percentage of zoning violations abated * 85% 100% 98% Imp. Services Percentage of gas well drilling and production sites that passed semi annual inspections Gas Wells 100% 95% 100% 100% 68

70 City of Denton, Texas Strategic Plan Performance Report Dashboard Key Focus Area 4: Safe, Livable, and Family Friendly Community Key Performance Indicators (KPIs) Department FY FY nd FY Progress FY Actual FY Target 2nd Qtr FY Year to Date Progress Indicator Goal 4.3 Provide quality, diverse, and accessible neighborhood services for the community. Acres of parks maintained per full time Parks equivalent Total attendance at park facilities per full time equivalent (1) Parks 17,805 17,320 2,890 5,530 Park acres per 1,000 population Parks Satisfaction rating of good or excellent for programming /number of ratings received (1) Parks 4.7/2, /3, / /806 % of programs offered that made participation Parks 86% 94% 90% 88% requirements (1) Total program attendance (1) Library * 40,000 12,857 21,423 Total number of library visits (1) Library 572, , , ,238 (1) Seasonal measure. Activity expected to be performed during third and fourth quarter. 69

71 City of Denton, Texas Strategic Plan Performance Report Dashboard Key Focus Area 4: Safe, Livable, and Family Friendly Community Key Performance Indicators (KPIs) Department FY FY nd FY Progress FY Actual FY Target 2nd Qtr FY Year to Date Progress Indicator Goal 4.3 Provide quality, diverse, and accessible neighborhood services for the community. Total circulation, including checkouts and Library * 1,200, , ,561 renewals of physical items Ebranch visits: webpage, website, mobile app, and catalog hits Library * 618, , ,869 Ebranch circulation database hits, electronic content download Library * 64, ,991 58,269 70

72 City of Denton, Texas Strategic Plan Performance Report Dashboard Key Focus Area 5: Partnerships and Regional Leadership Key Performance Indicators (KPIs) Department FY FY nd FY Progress FY Actual FY Target 2nd Qtr FY Year to Date Progress Indicator Goal 5.1 Actively participate in regional, state, and federal initiatives. Percentage of major legislative initiatives City Manager s accomplished (1) Office 100% 100% N/A N/A * Percentage of Denton area delegation at the local, state, and federal level contacted and educated regarding City of Denton legislative initiatives City Manager s Office 100% 100% 100% 100% Goal 5.2 Maintain visible and effective relationships with governmental and non governmental organizations. Number of city personnel, elected, and appointed officials serving in leadership roles in regional, state, and federal associations City Wide Number of local Chambers of Commerce events supported City Manager s Office * 10 * * * (1) Currently not in a legislative session. * Data not currently available. 71

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