Quarterly Financial Report, Q1 2018 - City of Vancouver

"A colorful past, a bright future"

Quarterly Financial Report

First Quarter 2018

1Q 2018 Financial Report Final City of Vancouver 1

First Quarter 2018 Financial Report (This report contains un-audited financial information as of March 7, 2018)

Table of Contents

Section Page

I. Executive Summary 3 II. Economic Report 4 III. Financial Results 13 IV. Outstanding Debt 26 V. Investments 26 VI. Interfund Loans 29

Attachments

A Expenditure Summary by Fund 30 B Revenue Summary by Fund 32 C Investment Portfolio Tables 34 D Outstanding Debt 38

- - - - - For additional information on the City’s financial performance please contact Natasha Ramras in the City’s Financial & Management Services Department at 360-487-8484.


I. Executive Summary

The national economy continued to grow through the first quarter of 2018, according to the advance estimate published by the Bureau of Economic Analysis. Real GDP increased by 2.3% in the last quarter of the year, slightly slower than the 2.9% annual growth rate during the last quarter of 2017. The most recent data indicates that the increase was mostly due to increased nonresidential fixed investment and government spending at all levels, that were partially offset by negative contributions from residential fixed investment and exports.

City of Vancouver General Fund revenues in the first quarter of 2018 totaled $32.3 million, exceeding comparable 2017 collections by close to $4.0 million. The revenue increase is largely attributable to increased collections of Utility Tax on water, drainage, sewer, solid waste and continuing elevated sales tax revenues. An inflationary increase in the underlying City utility rates went into effect January 1, 2018. The first three months of 2018 include revenue from the 3.4% utility tax increase dedicated to funding additional Police department staff that went into effect in 2017. Sales tax revenues continue to exceed projections due to strong auto sales, elevated construction, and an overall strong economy. General Fund expenditures at the end of 2017 totaled $37.2 million, $6.6 million higher than in the prior year. The difference is primarily due to the City purchasing a building on Grand Boulevard to convert to a day center for the homeless. Another contributing factor included the timing of inter-fund transfers. The General Fund operating cash balance was $46.7 million at the end of March 2018. Following is detailed information on the main revenue sources of the General Fund. Cumulatively, the seven major sources of revenue listed on the chart below represent more than 88.0% of the total revenues in the City’s General Fund.

Note: Utility tax revenue above includes the tax on Solid Waste; Charges for Services exclude the Business License revenue.


II. Economic Report The US economy continued to improve into the first quarter of 2018. The unemployment rate continued to decline, the housing sector has been showing a consistent level of activity and higher prices than in the previous four years, but the annual rate of increase has cooled. The following is specific information related to some of the major national economic indicators, beginning with Gross Domestic Product. The pace of growth of the national economy, as reported by the Bureau of Economic Analysis, decreased slightly in the last quarter of the year, from a 2.9% annual rate in the last quarter of 2017 to a 2.3% rate in the first quarter of 2018. The most recent data indicates that the increase was mostly due to increased nonresidential fixed investment and government spending at all levels, that were partially offset by negative contributions from residential fixed investment and exports.1

The national seasonally adjusted unemployment rate continued to decline during the first quarter of 2018, falling to a historically low level of 4.1%, consistent over the last three months of the year. The number of long-term unemployed (those jobless for 27 weeks or more) declined slightly through March, accounting for 20.3 percent of the unemployed. Nationally, employment gains occurred in several industries, led by health care, construction and manufacturing. The numbers of unemployed workers have decreased slightly to an estimated 6.3 million nation-wide2.

1 National Income and Product Accounts; Gross Domestic Product: Fourth Quarter and Annual 2017 (Second Estimate), https://www.bea.gov/newsreleases/national/gdp/2018/gdp4q17_2nd.htm 2 https://www.bls.gov/news.release/archives/empsit_04062018.htm


Data Source: www.bls.gov

• The March of 2018 Federal Open Market Committee’s press release confirmed that “labor market conditions have continued to strengthen and economic activity has been rising at a moderate rate. Job gains have been strong in recent months and the unemployment rate has stayed low. Recent data suggests that growth rates of household spending and business fixed investment have moderated from their strong fourth-quarter readings. On a 12-month basis, both overall inflation and inflation for items other than food and energy have continued to run below 2 percent.3

• One of the major measures of consumer confidence is the Conference Board’s compiled Index of Consumer Confidence. Three thousand households across the country are surveyed each month to determine consumer perceptions of current business and employment conditions, as well as consumer expectations for the upcoming six months. The level of consumer confidence is associated with anticipation about future developments in the economy, and is used as an indicator of the likely general direction of consumer spending in the coming months. The index began moving up in 2016 with the trend continuing during 2017, and increased from 113.3 in December 2016 to 122.1 in December of 2017. This index continued to increase in 2018, reaching 127.7 by March.

• A second measure of consumer attitudes, the University of Michigan Consumer Sentiment, paints a similar picture. The indicator came in at a 14-year high of 101.4 in March. The gain was tied to rising confidence among lower income respondents in contrast to the expectation component of the higher income respondents. The report noted that the risk of rising interest rates, tied to federal policy, is a negative factor for the high-income group.4

3 https://www.federalreserve.gov/monetarypolicy/files/monetary20180321a1.pdf 4 https://www.nasdaq.com/markets/us-economic-calendar.aspx


• The US Conference Board tracks ten different economic indicators in order to assess the health of the economy and to evaluate the direction of economic development in the near future. The cumulative product of the ten indicators is called the US Leading Economic Index (LEI). The US LEI has increased steadily since early 2009, reaching a high level of 109 in March of 2018.

“The U.S. LEI increased in March, and while the monthly gain is slower than in previous months, its six-month growth rate increased further and points to continued solid growth in the U.S. economy for the rest of the year”, said Ataman Ozyildirim, Director of Business Cycles and Growth Research at The Conference Board. “The strengths among the components of the leading index have been very widespread over the last six months. However, labor market components made negative contributions in March and bear watching in the near future.” The graphic representation of the Conference Board Leading Economic Index for the U.S. since 1999 is shown in the following graph.


• National level housing sector data indicates strength in the residential starts during the first quarter of 2018 driven by the multi-family component and residential starts. Housing starts for multi-family units indicated an increase of 14.4 percent in just the last month alone, single family reclined slightly by 3.7 percent. Permits came in very strong.

• The national inflation rate as measured by the U.S. Consumer Price Index for All Urban

Consumers (CPI-U) on a year-over-year basis increased 2.4% over the last 12 months, as reported by the U.S. Department of Labor. Energy was the weakest factor in March, with gasoline down 4.9 percent. There are few items that are indicating a little upwards pressure, such as medical care costs and housing. The graphs below shows monthly CPI changes and the annualized inflation rate changes in both the CPI and the Core CPI (the CPI less food and energy).


State Economy • The May of 2018 Washington State Economic and Revenue Update from the Washington

Economic and Revenue Forecast Council confirmed that the Washington economy continues to expand at a rapid pace. Employment, income and population all grew much faster than the corresponding national averages. Seattle home prices continued to rise rapidly and residential construction remained strong. The Seattle area consumer price inflation is well above the national average due to higher shelter cost inflation. Over the last 12 months it has increased by 3.3%, compared to 2.4% for the U.S. city average.

• For the second consecutive year, Washington ranked first in the nation in real GDP growth. In May, the U.S. Department of Commerce, Bureau of Economic Analysis released Real Gross Domestic Product estimates by state through 2017. The 4.4% growth rate in Washington real GDP was the highest among the state and was significantly higher than the 2.1% growth rate for the U.S. as a whole5.

5 https://erfc.wa.gov/sites/default/files/public/documents/publications/may18.pdf


• State revenue collections in the first quarter of 2018 came in higher than anticipated, mostly due to the strong real estate excise taxes.6

Local Economy

• The number of residential permits is the local data equivalent for housing starts. The

activity has been slow on the residential side. The number of houses permitted in 2017 – a total of 177 was the lowest number of single family residences permitting in a given year since 2011. The first quarter of 2018 paints a rosier picture of the single family residential market – a total of 89 houses was permitted with a valuation of $10.1 mil.

6 Washington March Economic & Revenue Update, https://erfc.wa.gov/sites/default/files/public/documents/publications/may18.pdf


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

units permitted within the city limits. The number of new multi-family units permitted in 2013 was 657, roughly double that of 2011 and 2012. In 2014 and 2015, a total of 609 and 705 units were permitted, respectively. In 2017 a total of 1,357 new multi-family units were permitted, more than making up for the sluggish single family residential activity. Only 22 new units were permitted in the first quarter of 2018.


• Activity in the commercial sector has remained strong. A total of 11 commercial projects were permitted in the City of Vancouver during the first quarter of 2018, with a total valuation of $21.9 million, on the lower side of historical averages.

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

• The Portland-Vancouver metro inflation rate is published twice a year by the Bureau of Labor Statistics. The metro inflation rate (CPI-U) for the 12 month period ending in


December 2017 was 3.9%.7 Energy prices increased 7.1%, largely as a result of a jump in gasoline prices. The index for all items less food and energy rose 4.1% over the year.

• According to the Bureau of Labor Statistics, the City’s estimated unemployment rate at the end of December was 5.1%, similar to the county rate and above the estimated unemployment rate of 3.6% in the Portland metro area.

Data provided by the Bureau of Labor Statistics

• Home sales are cyclical, typically increasing in the second and third quarters of the year. Home prices continue to stabilize both nationally and locally, according to the S&P’s Case-

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


Shiller Home Price Index. During the last twelve months, home prices have climbed at about 7 percent since August in the Portland-Vancouver metro. The Portland metro home prices remain in the record-setting territory, climbing more than 20% higher than the housing bubble-era prices.

• The median home value in Vancouver, WA is estimated to be $303.8 thousand, according to Zillow. Vancouver home values have increased 10% over the past year. Local housing prices have likely peaked, and are anticipated to show signs of slowing in the coming months.

• Zillow evaluates Vancouver’s real estate market as very healthy, relative to other markets across the county. The Market Health index is based on up to 10 metrics, including past and projected home values, the prevalence of foreclosures, foreclosure re-sales, negative equity, and delinquency.

III. Financial Results General Fund REVENUES

City of Vancouver General Fund revenues for Q1 2018 totaled $32.3 million, exceeding comparable 2017 revenues by $4.0 million. Tax revenues (largely utility, sales, and property taxes) exceeded 2017 collections by a combined amount of approximately $3.0 million. Sales tax collections in 2018 have exceeded comparable 2017 collections by $1.1 million, due to strong auto sales and construction activity. Following is detailed information on the main revenue sources of the General Fund. Cumulatively, the seven chief sources of revenue listed on the chart below represent more than 88% of the City’s total forecasted General Fund revenues.


Note: Utility tax revenue above includes the tax on Solid Waste, Charges for Services exclude the Business License revenue.

Property Tax

• Property tax revenues are typically received during the second and fourth quarters of the

year. The amount of revenue is based on the assessed valuation and is estimated using County Assessor’s data. Deviations from estimates in this revenue source are mostly related to the amount of new construction and delinquency rates.

• By Council action, there was a 1% property tax levy increase in 2017, bringing the total City of Vancouver levy rate to $2.6111 per $1,000 of assessed value, which was applied to a total taxable value of approximately $18.6 billion. The General Fund collects $2.32 per $1,000 in assessed value of the total levy. An additional $0.29 levy was approved by voters in November of 2016 for the Affordable Housing Fund. The new levy is anticipated to generate $6.0 million per year to be dedicated to increasing the number of affordable housing units in the City.

• The City experienced a 23.5% combined reduction in assessed housing valuation between 2009 and 2012. The assessed valuation reduction resulted in an increase of the City’s property tax levy rate, but did not impact revenues. The recessionary drop in assessed valuation has been more than made up during the post recessionary years. The increase in assessed valuation between 2017 and 2018 was 10.7%.

• A total of $3.6 million in property taxes (excluding the Affordable Housing Levy) was

collected in Q1 2018, exceeding first quarter 2017 revenue by $0.1 million. The Affordable housing Levy generated $0.5 million, slightly less than was collected for the comparable period in 2017.


Note: The dollar amounts above represent the General Fund collections of Property Tax. These have not been adjusted for inflation.

Sales Tax

• The 8.4% sales tax rate in the incorporated area is distributed as follows: 6.5% to the State, 0.5% for the City’s “basic” sales tax, 0.3% for the City’s “optional” sales tax, 0.2% for the City restricted to funding Public Safety, the County’s additional optional 0.1% for Law and Justice and 0.1% for addressing the region’s methamphetamine drug addiction and related crime, and 0.7% for C-TRAN.

• Sales tax revenue of $9.3 million was received by the end of March 2018, approximately

$1.1 million more than at the end of March 2017. The fastest growing categories of retail sales were auto sales, construction related activities, and general merchandise. A mild recession is not predicted to occur until late in 2019.

• Growth in taxable retail sales over the last several years was fueled by an improving real

estate market, new construction, and auto sales.


Taxes on Privately Owned Utilities • Vancouver collects a 6.0% utility tax on electrical, natural gas, and telephone services

provided within the incorporated area by entities other than the City. The City also charges cable franchise fees.

• The utility tax on privately owned utilities generated $4.8 million through March 2018,

slightly lower than comparable collections in 2017.

o Natural gas tax revenues through March 2018 totaled $0.7 million, approximately $30 thousand higher than comparable 2017 collections.

o Telephone tax revenues through the first quarter of 2018 totaled $0.9 million

and were slightly lower than revenues collected during the comparable time period in 2017.

o $3.1 million was collected in electrical tax revenue through the first quarter of

2018, approximately $0.1 million less than comparable 2017 collections.

• The cable franchise fees revenue totaled $0.5 million through March of 2018, slightly less than comparable 2017 collections.


Water, Sewer, Storm Water and Solid Waste Taxes

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

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

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

• Revenue on city-owned utilities increased due to a growing customer base and underlying rate increases. The underlying water, sewer, and drainage utility rates had inflationary increases in 2017. The rates were also increased to accommodate the additional utility tax for streets and police.

• A total of $6.9 million in City-owned utilities taxes was collected through the first quarter of 2018, $1.9 million more than through the first quarter of last year. The utility tax increase started impacting revenues in the second quarter of 2017, so revenues in the rest of 2018 are expected to more closely align with the previous year.


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

Grant & Entitlement Revenues

• The City anticipates receiving $1.1 million in grants in the General Fund in 2018. The largest grants are the COPS grant that partially funds additional Police staff, and the Brownfield and Commute Trip Reduction grants in the Community and Economic Development department.

• Through the end of Q1 2018, the City received approximately $16 thousand in grant reimbursements, falling well short of expectations. Most grants are cost-reimbursable, with the majority of the reimbursement funding coming in during the second through fourth quarters of the year.

Charges for Goods and Services

The largest fee-revenue generating program areas at the City are the Development Review Services and Recreation programs. The Q1 2018 revenue generated by these two sources is $1.3 million.


Land Use and Other Planning Permits

• From 2008 through 2010, the City experienced a significant decrease in both the number of single family residential permits issued and in their valuation. Collections from 2011 through 2013 remained relatively flat, but 2014 through 2016 saw significant annual increases in land use fees. Similar trends continued into 2017 and are expected to continue in 2018.

• Planning permit fee revenues of $365 thousand were collected by the City through March 2018, approximately $90 thousand more than revenues received during the same period in 2017. Local activity remains elevated compared to the last few years.

Recreation Program Fees

• The City anticipates receiving $4.2 million in recreation fees in 2018. Revenues are anticipated to be higher than 2017, when one of the two recreation centers underwent a major swimming pool renovation and a portion of the center was closed to customers longer than originally anticipated.

• The total recreation fee revenue received through the end of March was $983 thousand; approximately $111 thousand higher than comparable revenues in 2017.

EXPENDITURES

• General Fund expenditures in Q1 2018 totaled $37.2 million, or 22% of the year’s budget after the appropriation carry-forward process took place.

• Departments in the General Fund spent $18.2 million, $0.1 million more than was spent through the end of the first quarter 2017. The spending resulted from broadly increased departmental costs and new Police staffing.

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

chart.


• General Fund salaries and benefits expenditures totaled $12.9 million through March of 2018, or 23% of the budget for the year.

• General Fund supplies and services category expenditures were $2.8 million, or 18% of the budget.

• Intergovernmental expenditures include payments by the City to other jurisdictions based on inter-local agreements, and internal transfers supporting other funds, such as the Debt Fund, Fire Fund, and Street Fund. Intergovernmental expenditures reached $13.5 million through the first quarter of 2017, or 18% of the budget for the year.

• Internal expenditures were $3.6 million, or 23% of the budget for the year. Beginning in

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

• Capital expenses totaled $4.4 million and are mostly reflective of the City purchasing the Grand Boulevard property for the purpose of providing day center services to Vancouver residents who are experiencing homelessness.

Cash Balance

• The General Fund operating cash balance was $46.7 million at the end of March 2018. The balance was $0.6 million less than the cash balance at the end of March 2017.


• In addition to the operating cash balance, the General Fund had an emergency reserve totaling $11.7 million at the end of March 2018, compared to $11.5 million in March 2017. The Council updated the emergency reserve balance financial policy in 2012, requiring that the emergency reserve balance equal 7.0% of actual external revenues in the preceding fiscal year for the General, Street, and Fire Funds. These funds are intended to be used only for extraordinary events, such as natural disasters.

Fund Balance • The cash balance represents a snapshot at a particular point in time, while the fund

balance factors in revenues and expenditures that are anticipated to occur by the end of the year.

• The total fund balance in the General Fund at the end of 2017 was $67.4 million, according to the very preliminary City’s unaudited financial statements. The balance is composed of the Restricted, Committed, Assigned, and Unassigned balances. The Restricted balance of $0.02 million represents grant revenue received in advance of expenditures in VPD. The Committed balance of $21.7 million represents reserves in accordance with the City Financial Policies including the City Emergency reserve of $11.6 million, Revenue Stabilization reserve of $3.8 million, and capital reserve of $6.3 million. The balance pays for the ongoing operations of the General Fund when incoming seasonal revenues are not sufficient to cover expenses, and eliminates the need for short-term borrowing. The Assigned reserve of an estimated $35.8 million represents the City’s $31.6 million working capital, which is required to ensure sufficient cash flow in the fund. The Assigned balance also includes $4.0 million representing funding for 50% of accrued compensated absences. The remaining $9.8 million portion of the balance was determined to be undesignated at the end of 2017. Approximately $4.5 million of the 2017 appropriation was carried forward and used the corresponding fund balance.

Street Fund • Street Fund expenditures in Q1 2018 totaled $3.3 million, or 16% of the budget,

approximately $0.1 million higher than comparable expenditures in 2017. • Street Fund revenues (excluding a budgeted general fund transfer) totaled $1.9 million, less

than the comparable collections in 2017 by $0.7 million. The fund’s largest sources of revenue are state-shared revenues from the motor vehicle fuel tax (MVFT), the real estate excise tax (REET), and a transfer from the General Fund. The 2018 budgeted General Fund to Street fund transfer is $11.2 million.

• Motor Vehicle Fuel Tax (MVFT) revenues totaled $0.9 million in the first quarter of 2018, slightly

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


Real Estate Excise Tax (REET)

• A Real Estate Excise Tax (REET) of one-quarter of 1.0% of the selling price is imposed on each sale of real property in the corporate limits of the City. The tax is deposited into the Street Fund and is restricted to fund preservation of the City’s street system. The City also collects a REET for Parks and Transportation capital.

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

increasing home prices. REET revenues declined significantly through 2010 after the housing bubble in 2005 and 2006. Since 2011, collections have been increasing. Real estate activity remains very upbeat. In 2017, the revenue exceeded the pre-recession years.

• A total of $0.7 million in REET revenue was received in Q1 2018, approximately $0.3 million

less than comparable collections in 2017. The graph below demonstrates the fluctuations in REET collections since 2005. The real estate market is anticipated to start cooling off in the later part of 2018, resulting in a lower forecast for the year.


Street Funding Initiative • During 2015, an extensive, six-month long public process took place to determine the desired

level of services in the city street and right-of-way maintenance program and what additional funding sources would be most appropriate to fund any desired enhancements in the service level. The recommendations prepared by the Commission on the desired service level and funding were accepted and acted upon by City Council, resulting in new/increased revenues being directed to Streets to fund the desired operating and capital outcomes. The ultimate anticipated outcomes of this initiative are, among other things, an improvement in the condition of City streets from the current “fair” to “good” over a period of twenty years, reconstruction of a major arterial every two years, and improved maintenance of right-of-ways. Following is a link to the specific set of recommendations: http://www.cityofvancouver.us/sites/default/files/fileattachments/public_works/page/12554/streets_funding_commission_recommendation_final.pdf

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

related to right-of-way maintenance with City dollars so that some of the results could be seen in 2016. A portion of the new revenue - vehicle license fees – started coming into the Transportation Benefits District (TBD) beginning July 1, 2016.

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

2017 2018 2018 %Revenues March Budget March Budget Street Initiative Operating Fund 767,443 5,041,820 1,939,423 38%

Street Funding Initiative - Capital Fund 28,078 5,719,586 19,967 0%

Transportation Benefits District 2,036,041 3,600,000 397,300 11%

ExpendituresStreet Initiative- NEW Fund 145,326 5,499,263 253,301 5%Capital Streets Initiative Fund (NEW) 43,182 6,199,564 181,265 3%

Transportation Benefits District 232,791 6,355,539 151,385 2%


Consolidated Fire Fund

• The City has an Operating Fire Fund and a Capital Fire Fund. The Capital Fire Fund largely funds vehicle replacements and purchases. The Operating Fire Fund fully supports the Capital Fire Fund. The graph below represents the operating fund’s financial information.

• Operating Fire Fund revenues in the first quarter of 2018 were $0.4 million (exclusive of General Fund support, the Fire District 5 transfer and the transfer between Fire Operating and Capital), mostly representing permit and inspection fees, as well as grants.

• Total Fire Operating expenditures in first quarter of 2018 were $10.2 million, 24% of the budget for the year and $0.7 million higher than during the comparable period of 2017.

Building Inspection Fund

• Building review and inspection fee revenues received in the first quarter of 2018 totaled $1.3 million, $0.3 million higher than those received in the same period in 2017.

• Building Fund expenditures in Q1 2018 totaled $1.2 million, approximately $0.1 million

higher than in Q1 2017.


• The fund balance in the Building fund targets funding for 18 months of permitting activity after revenue is collected. The projected fund balance at the end of 2018 can cover less than 12 months of permitting activity.

Parking Fund

• Fee and fine revenues through March 2018 were $1.1 million. Hourly and monthly parking rates were increased across the parking system in 2017.

• Operating expenses in Q1 2018 totaled $0.5 million, or 15% of the budget for the year, approximately $30 thousand higher than in 2017 over the comparable time period. The increase is mainly due to the system expansion projects underway.

Utility Operations • Operating transfers between the Water, Sewer and Storm Water funds are included in

the accompanying Attachment A, per budget requirements. These transfers are generally eliminated when financial statements are prepared. Financial statements for utility funds are prepared on a quarterly basis. Please call (360) 487-8441 to receive a copy of the detailed financial statements for the Utility Funds.

Water

• Water sales revenues totaled $7.1 million through March 2018, or 21% of the annual forecast. Collections were $0.5 million above comparable 2017 collections, largely due to the tax increase for Street Initiatives, inflationary rate increases, and the 3.4% utility tax increase to fund additional staffing in police (effective April 1, 2017).


• Water fund expenditures in 2017 totaled $7.6 million, or 16% of the 2018 budget.

Sewer • Fee revenues in the Sewer Fund were $11.0 million in Q1 2018, approximately $0.8 million

above comparable 2017 revenues. Sewer rates had inflationary increases in 2017 and an adjustment for a 3.4% utility tax increase to fund increased police staffing.

• Sewer expenditures in Q1 2018 totaled $10.5 million, $0.9 million above the 2017

comparable expenditures.

Storm Water • A total of $3.7 million in storm water fee revenue was received in Q1 2018, approximately

$0.5 million higher than 2017 comparable revenues. In 2017, the rates had an inflationary increase as well as an adjustment for a 3.4% utility tax increase to fund increased police staffing.

• Overall, the expenditures in the Storm Water fund were $3.4 million in Q1 2018, or 21% of

the overall 2018 budget, approximately $1.2 million lower than comparable 2017 expenses.

Internal Service Funds Equipment Services Operating and Capital Funds

• A total of $1.6 million was spent by Equipment Services on operating activities in Q1 2018, or 22% of the budget for the year. The ER&R Capital fund spent only $180 thousand by the end of March 2018, or 3% of the budget for the year due to delays in new and replacement vehicle purchases.

Technology ER&R Fund

• A total of $1.0 million, or 16% of the budget, was spent on technology and software replacement through March 2018. A large portion of the $5.9 million 2018 budget is earmarked to replace the City’s 17-year old ERP System, Oracle. The project is expected to continue through the end of 2018.

Internal Services Fund

• $3.7 million was spent by Internal Services departments (IT, Finance, HR and General Services) in Q1 2018, approximately $587 thousand higher than was spent in Q1 2017.

Risk Fund

• $0.9 million was spent in through Q1 2018, or 20% of the budget.

Benefits and Self Insured Health Insurance Funds


• $5.0 million was spent in the first quarter of 2018 on employee benefits, including health insurance and payments to medical trusts, approximately $1.1 million more than was spent last year over the same time period. The amount spent represents 29% of the budget for the year.

IV. Outstanding Debt

• At the end of the first quarter of 2018, the City had around $75.0 million of general

obligation (G.O.) debt outstanding and approximately $14.6 million of revenue bond debt outstanding. General obligation debt is backed by the full faith and credit of the City and by general taxes. Revenue bond debt is supported by a pledge of specific revenues. All of the City’s revenue bond debt is supported by the City’s water and sewer utilities. The weighted-average interest rate for the City’s general obligation debt is 3.14%, while the average interest rate for the City’s revenue bond debt is 4.01%.

A complete list of the City’s outstanding debt is included in Attachment C.

V. Investments

Market Conditions • Information received since the Federal Open Market Committee met in January indicates

that the labor market has continued to strengthen and that economic activity has been rising at a moderate rate. Job gains have been strong in recent months, and the unemployment rate has stayed low. Recent data suggests that growth rates of household spending and business fixed investment have moderated from their strong fourth-quarter readings. On a 12-month basis, both overall inflation and inflation for items other than food and energy have continued to run below 2 percent. Market-based measures of inflation compensation have increased in recent months but remain low; survey-based measures of longer-term inflation expectations are little changed, on balance.

• Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The economic outlook has strengthened in recent months. The Committee expects that, with further gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace in the medium term and labor market conditions will remain strong. Inflation on a 12-month basis is expected to move up in coming months and to stabilize around the Committee's 2 percent objective over the medium term. Near-term risks to the economic outlook appear roughly balanced, but the Committee is monitoring inflation developments closely.

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

decided to raise the target range for the federal funds rate to 1-1/2 to 1-3/4 percent. The stance of monetary policy remains accommodative, thereby supporting strong labor market conditions and a sustained return to 2 percent inflation.

• The overall yield curve increased during the first quarter of 2018. The yield on the three-

month Treasury has increased to 1.73% at the end of the first quarter. The six-month Treasury yield has increased to 1.93%. The yield on the two-year Treasury has increased to 2.27%. The thirty-year Treasury yield increased, ending the fourth quarter at 2.97% from 2.74%. Market risk of the City’s portfolio is low. The average maturity of the portfolio has been kept below one


year. The investment maturities are expected to meet the cash flow needs of the city and it is unlikely that an investment would have to be liquidated before maturity to meet the city cash flow needs.

• The City complies with State statutory guidelines and the City’s investment policies that limit the types of securities purchased. These consist of U.S. Treasury securities, federally-backed agency securities, and other relatively risk-free investments. The City does not leverage its portfolio nor does it invest in derivatives.

Investment Performance The average amount invested during the first quarter of 2018 was $313 million compared to $318 million on March 2017. The portfolio had a weighted average yield of 1.225% year to date, which is 77 basis points lower than the projected annual yield of 2.0% for 2018. The projected yield is based upon the blended yield between existing rates and expected market rates when new investments are purchased during the year. The year-to-date yield is 26 bps lower than the State Investment Pool, which had an average yield of 1.49%. The State Pool has a weighted average maturity of 37 days. The City’s investment portfolio weighted average maturity is approximately 8 months. Longer-term portfolio yields will outperform shorter-term portfolio yields in a falling interest rate environment. Interest revenue distributed through the first quarter of 2018 to all funds is approximately $977M compared to $711M during the same period of 2017.


The City’s investment portfolio profile is detailed in Attachment D.

VI. Interfund Loans In 2003, Council passed an ordinance giving the City Treasurer the authority to make interfund loans to meet the short term liquidity and cash flow needs of the City’s various funds. The ordinance requires the City Treasurer to provide a quarterly report to City Council showing the amount of all interfund loans outstanding and the repayment plan for those loans. During 2018 there was only one interfund loan. No interfund loans were outstanding at the end of 2018. City of Vancouver Outstanding Interfund LoansThrough First Quarter 2018

Balance InterestOutstanding Interest Expense

Fund Description 03/31/18 Lending Fund Rate Paid in 2018 Repayment Plan

108 CDBG Fund -$ 001 1.29% 17.94$

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

Total Outstanding Interfund Loan Balance -$


Attachment A

ATTACHMENT A 2017 2017 % of 2018 2018 % ofExpenditures December March YE Budget March BudgetGENERAL FUNDCity Council 744,765 134,506 18% 661,652 139,685 21%City Manager's Office 3,062,688 729,606 24% 3,133,108 756,631 24%Econ. Dev.: Real Estate operating 50,000 - 0% - 3,562 Legal Services 4,918,428 1,206,563 25% 5,617,930 1,267,607 23%Community Economic Development 6,036,470 1,525,688 25% 7,154,830 1,305,405 18%Parks Administration - - - - Parks, Trails, & Natural Resources 1,952,710 401,277 21% 2,086,750 404,023 19%Recreation Services 7,999,280 1,601,851 20% 8,898,148 1,852,522 21%Police 44,849,666 10,846,450 24% 49,544,330 10,711,284 22%Transportation - - - - Grounds Maintenance 4,471,996 825,940 18% 4,457,936 902,855 20%Facilities Maintenance 3,881,244 868,232 22% 3,878,410 894,540 23%

Subtotal Non-Gen. Governmental 77,967,246 18,140,112 23% 85,433,093 18,238,114 21%General Governmental

Child Justice Center Support 370,957 - 0% 382,085 105,090 28%City Cable Programming 511,520 127,881 25% 511,520 127,881 25%Fire District #6 23,250 - 0% 22,000 - 0%Emergency Mgmt (CRESA) 160,685 37,116 23% 161,106 - 0%Air Pollution Control Authority 55,786 55,832 100% 74,605 74,305 100%Humane Society 280,000 32,205 12% 290,000 50,980 18%Animal Control 250,000 61,322 25% 255,000 53,427 21%Alcoholism Support 40,000 - 0% 40,000 - 0%Regional Transp Council 45,700 45,623 100% 45,700 45,623 100%Election Support 200,000 - 0% 200,000 - 0%AWC, Chamber of Commerce Memberships 80,818 77,552 96% 80,818 80,653 100%Opportunity Reserve 115,296 1,944 2% 218,580 15,767 7%Miscellaneous 2,099,198 73,623 4% 456,395 51,496 11%Real Estate Transactions 8,541,648 8,634 0% 7,481,111 4,542,377 61%Public Defender 1,279,395 412,281 32% 1,457,586 375,656 26%County Jail Costs 2,728,854 907 0% 4,751,373 (415) 0%County Corrections Costs 1,087,792 218,596 20% 1,138,483 104,821 9%County District Court Costs 1,092,991 3,607 0% 1,202,000 2,445 0%General Obligation Debt Payment 4,744,666 4,192 0% 5,715,950 - 0%General Govt Support 6,631,852 577,471 9% 11,061,626 690,800 6%Street Support (formerly in General Support) 13,682,775 3,098,927 23% 14,185,724 4,184,408 29%Fire Support (formerly in General Support) 29,055,828 6,927,624 24% 30,251,468 7,739,457 26%LEOFF Pension Support (formerly in General Suppo 2,900,000 725,001 25% 2,900,000 725,000 25%

Subtotal General Govermental 75,979,010 12,490,339 16% 82,883,130 18,969,772 23%Total General Fund 153,946,256 30,630,451 20% 168,316,223 37,207,885 22%

SPECIAL REVENUE FUNDSStreet 20,321,222 3,251,363 16% 20,885,783 3,333,936 16%Street Initiative- NEW Fund 4,032,524 145,326 4% 5,499,263 253,301 5%Fire Operating Fund 42,540,641 9,490,465 22% 42,028,450 10,173,818 24%Fire Capital Fund 1,423,389 237,528 17% 1,892,356 196,525 10%AMR Compliance Fund (New) 638,502 28,186 4% 772,822 132,669 17%Drug Enforcement and Investigative Funds 382,845 7,664 2% 387,741 7,496 2%Community Development Block Grant 2,010,388 449,501 22% 2,009,511 648,536 32%Tourism 2,512,015 280,130 11% 1,507,824 261,764 17%


Attachment A

ATTACHMENT A 2017 2017 % of 2018 2018 % ofExpenditures December March YE Budget March BudgetAffordable Housing 338,843 - 0% 11,661,156 532,731 5%Criminal Justice/LLEBG 684,654 482 0% 289,971 496 0%Real Estate Excise Tax - I 3,242,364 14 0% 3,776,586 14 0%Transportation Special Revenue 2,577,775 36,531 1% 3,376,484 37,620 1%Parks & Recreation Special Revenue 30,220 53 0% 30,208 55 0%Parks Construction - Residual REET - - - - Downtown Initiatives 587,026 34,886 6% 110,003 35,883 33%VNHR Properties 575,137 42,040 7% 656,382 39,014 6%Senior Messenger 352,640 57,495 16% 357,151 64,615 18%TIF Funds 1,744,858 - 0% 2,343,494 - 0%PIF Funds 1,529,827 - 0% 9,095,199 - 0%

DEBT SERVICE FUNDSG O Debt Service Fund 10,853,680 40,727 0% 11,237,966 39,704 0%L I D Debt Fund 54,925 - 0% 34,000 - 0%g ( g g ( gCAPITAL FUNDS2011 Bond Capital Fund - Waterfront 1,025,946 - 0% 3,317,262 - 0%Transportation Capital Fund 17,746,053 1,501,605 8% 22,177,554 1,347,617 6%Capital Streets Initiative Fund (NEW) 740,151 43,182 6% 6,199,564 181,265 3%Fire Acquisition Fund 11,281,315 985,275 9% 2,814,089 599,160 21%Capital Improvement Fund 7,191,368 1,120,154 16% 3,489,301 345,106 10%VNHR Property Capital 4,777,939 1,129,740 24% 1,893 - 0%2015 Bond Capital Fund - VNHR (New) 41,182 - - - Parks Construction Fund (Capital Projects only) 12,189,647 1,291,337 11% 20,259,592 2,161,341 11%City Tree Reserve Fund 45,481 5,597 12% 45,679 3,177 7%Drainage Construction Fund 765,843 326,540 43% 4,574,799 90,530 2%Systems Development Reserves 6,750,000 - 0% 3,750,000 - 0%Water Construction Fund 13,154,859 1,394,991 11% 25,897,708 1,641,288 6%Utility Customer Assistance 30,000 1,009 30,000 4,823 Water Revenue Bond Debt Service Fund 103,817 - 0% 103,909 - 0%Sewer Revenue Bond Debt Service Fund 7,548,447 - 0% 7,549,805 - 0%Sewer System Development 6,800,000 - 0% 2,800,000 - 0%Sewer Construction Fund 6,625,489 235,815 4% 17,034,879 1,441,449 8%

ENTERPRISE FUNDSStorm Water 16,972,650 4,593,606 27% 16,479,854 3,413,716 21%Water 47,137,555 6,878,651 15% 47,284,028 7,578,766 16%Sewer 55,032,529 9,593,230 17% 53,907,071 10,496,758 19%Building Inspection 5,611,095 1,113,036 20% 6,054,276 1,232,170 20%Solid Waste 3,108,170 399,061 13% 2,697,948 512,638 19%Parking 3,762,716 518,305 14% 3,583,650 548,149 15%Tennis Center 1,171,814 277,178 24% 1,098,306 247,624 23%Airpark 903,237 116,715 13% 766,115 117,118 15%

INTERNAL SERVICE FUNDSFacilities Asset Mgmt & Replacement Reserve Fund 5,566,078 67 0% 3,172,184 69 0%Equipment Services Operations Fund 7,142,584 1,358,124 19% 7,428,833 1,637,613 22%Equipment ER&R Capital 2,779,567 217,443 8% 7,098,598 180,185 3%Technology ER&R 3,211,555 248,189 8% 5,884,478 965,853 16%Risk Fund 5,450,043 308,220 6% 4,679,677 920,207 20%Internal Administrative Services Fund (New) 3,717,677 Finance 5,693,615 1,219,393 21% 6,145,162 1,279,273 21% Information Technology 6,651,620 1,380,854 21% 6,570,717 1,949,284 30% Human Resources 1,855,395 433,939 23% 2,011,627 443,923 22%


Attachment A

ATTACHMENT A 2017 2017 % of 2018 2018 % ofExpenditures December March YE Budget March Budget General Services 327,723 96,728 30% 212,384 45,198 21%Benefits Fund 10,812,206 2,572,467 24% 10,453,850 2,839,311 27%Self Insured Health Insurance (New) 7,313,357 1,336,067 18% 7,105,927 2,164,382 30%Print Shop & Mail Services - 46,407 0 - 0%

AGENCY FUNDSSWAT Team 233,188 30,446 13% 274,812 90,962 33%Police Pension 1,091,234 233,057 21% 1,091,440 243,098 22%Fire Pension 1,810,754 299,432 17% 1,810,973 324,033 18%Cable TV 1,194,596 291,112 24% 1,254,893 254,571 20%PEG 710,680 2,731 0% 674,680 58,907 9%Transportation Benefits District (NEW) 1,731,165 232,791 13% 6,355,539 151,385 2%Notes

2. Operating transfers between funds are included within this report.

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

3. In 2015, Finance, Information Technology, Human Resources and General Services moved from General Fund to an Intenral Administrativce Services Fund.


5/17/2018

Revenues 2017 2017 % of 2018 2018 % ofDecember March YE Budget March Budget

GENERAL FUNDTax Revenue

Property Tax 45,935,186 3,554,446 8% 48,737,924 3,636,006 7%Sales Tax 39,069,501 9,297,768 24% 36,359,947 10,437,787 29%Electrical Tax 8,219,294 3,192,728 39% 8,558,165 3,140,591 37%Natural Gas 2,506,760 685,529 27% 2,941,179 715,600 24%Telephone 4,099,506 978,848 24% 3,834,355 963,330 25%Cable Franchise Fee 2,303,128 566,121 25% 1,910,713 511,754 27%Water/Sewer/Storm Water 22,597,417 4,313,703 19% 23,785,154 5,479,857 23%Solid Waste Utility Tax 4,822,171 735,796 15% 4,541,041 1,448,279 32%Gambling and Leasehold Taxes 664,342 67,458 10% 657,823 69,573 11%

Subtotal Tax Revenue 130,217,305 23,392,398 18% 131,326,300 26,402,778 20%Business Licenses 1,794,748 320,969 18% 2,088,835 522,172 25%Grants & Entitlements 747,203 20,286 3% 1,052,873 15,733 1%State Shared Revenues 3,804,352 692,314 18% 3,675,196 862,674 23%Parks Contract with Clark County 125,694 17,489 14% 75,000 17,881 24%Charges for Services

Planning Permits 790,370 274,002 35% 876,285 364,203 42%Recreation Program Fees 3,926,510 872,087 22% 4,229,884 983,351 23%Interfund Service Charges 4,930,805 1,073,992 22% 5,152,954 994,011 19%Other Charges & Services 979,195 259,278 26% 968,903 270,438 28%

Subtotal Charges for Services 10,626,880 2,479,359 23% 11,228,026 2,612,002 23%District Court 2,113,073 319,225 15% 2,461,828 555,094 23%Miscellaneous 1,213,900 337,961 28% 653,481 393,267 60%Lease Revenue (short and long-term) 3,267,597 773,823 24% 2,252,879 949,609 42%Operating Transfers 949,916 - 0% 3,437,007 - 0%

Total General Fund 154,860,668 28,353,823 18% 158,251,426 32,331,211 20%

SPECIAL REVENUE FUNDSStreet Fund

Real Estate Excise Tax 4,452,187 953,243 21% 2,885,531 683,739 24%Motor Vehicle Fuel Tax 3,628,148 837,417 23% 3,735,316 888,232 24%Permits and Misc. 1,362,197 158,694 12% 1,141,171 305,427 27%Operating Transfers 11,266,306 2,747,044 24% 11,204,580 2,795,372 25%

Total Street Fund 20,708,839 4,696,399 23% 18,966,598 4,672,770 25%Operating Street Initiative Fund (NEW) 4,546,611 767,443 17% 5,041,820 1,939,423 38%

Operating Fire FundService Charges-Fire Dist. #5 9,574,179 - 0% 8,800,220 - 0%Grant Revenue 356,690 44,187 n/a 116,941 1,222 n/aPermit/Other Fees and Misc 1,891,016 364,399 19% 1,926,312 351,822 18%Operating Transfers 29,210,437 6,927,624 24% 30,584,005 7,739,457 25%

Total Operating Fire Fund 41,032,322 7,336,210 18% 41,427,478 8,092,501 20% Fire Equipment Fund 1,188,983 256,509 22% 1,065,679 290,536 27%

AMR Compliance Fund (New) 752,215 293,180 39% 681,000 302,845 44%Other Special Revenue Funds

Drug Enforcement 226,356 66,301 29% 124,900 90,570 73%Community Development Block Grant 1,679,259 398,188 24% 2,009,297 625,150 31%Tourism 2,485,292 456,149 18% 1,638,521 458,693 28%Affordable Housing 5,961,121 521,038 9% 6,000,000 515,586 9%Criminal Justice/LLEBG 264,019 64,238 24% 245,764 68,010 28%

Transportation Special Fund 2,554,322 596,461 23% 2,610,000 586,674 22%Real Estate Excise Tax - I 3,811,141 928,286 24% 3,413,189 662,831 19%Parks & Recreation Special Revenue Fund 32,100 1,175 4% 15,200 1,086 7%Downtown Initiatives 186,032 45,349 24% 179,248 84,831 47%VNHR Properties 758,063 47,986 6% 573,713 50,084 9%Senior Messenger 250,476 46,452 19% 287,000 66,526 23%TIF Funds 2,668,499 557,241 21% 1,794,796 319,419 18%PIF Funds 2,601,654 667,578 26% 1,246,000 320,802 26%Parkhill Cemetery Fund 21,636 4,207 19% 17,500 7,619 44%

DEBT SERVICE FUNDSG O Debt Service Fund 10,353,676 40,727 0% 11,237,965 39,704 0%L I D Fund 6,335 126 27,000 161


5/17/2018


CAPITAL FUNDS2011 Bond Capital Fund - Waterfront 44,114 9,483 n/a - 11,094 n/aTransportation Capital Fund 15,026,900 42,105 0% 19,196,786 66,585 0%Capital Streets Initiative Fund (NEW) 1,134,914 28,078 2% 5,719,586 19,967 0%Capital Improvement Fund 4,830,211 8,907 0% 3,182,409 9,984 0%Fire Acquisition Fund 3,194,644 19,462 1% 2,172,847 4,399 0%VNHR Property Capital 1,272,031 8,021 1% - 1,849 n/aParks Construction Fund (Capital Projects only) 7,313,121 23,432 0% 15,552,833 66,361 0%City Tree Reserve Fund 83,351 18,680 22% 30,000 31,202 104%Drainage Construction Fund 6,430,754 1,803,136 28% 1,321,184 4,907 0%Water/Sewer Capital Reserves 33,609 6,868 20% 14,000 9,595 69%Systems Development Reserves 3,363,175 834,503 25% 3,265,000 742,811 23%Water Construction Fund 20,509,027 107,889 1% 14,665,000 140,244 1%SCIP Fund (16,770) 142,181 -848% 685,000 308,562 45%Utility Customer Assistance 17,059 (570) n/a 13,000 3,108 n/aWater Revenue Bond Debt Service Fund 104,249 48,876 47% 103,909 50,184 48%Sewer Revenue Bond Debt Service Fund 7,580,124 3,594,543 47% 7,559,805 3,690,685 49%Debt Service Reserves 2,014,315 4,199 0% 8,200 11,845 144%Sewer System Development 3,342,671 696,859 21% 3,210,000 763,569 24%Sewer Construction Fund 13,331,900 13,963 0% 5,800,000 33,192 1%ENTERPRISE FUNDSStorm Water

Storm Drainage Fees 14,734,698 3,195,133 22% 16,704,690 3,654,115 22%Private Capital Contributions - - - - Miscellaneous 331,216 106,527 32% 244,079 111,202 46%

Total Storm Water Fund 15,065,914 3,301,660 22% 16,948,769 3,765,317 22%Water

Residential Water Sales 27,259,902 5,561,331 20% 26,971,708 5,958,053 22%Commercial Water Sales 5,459,866 895,281 16% 5,797,160 957,096 17%Governmental Water Sales 1,223,407 147,117 12% 1,108,251 171,322 15%

Subtotal Water Sales 33,943,175 6,603,729 19% 33,877,119 7,086,471 21%Private Capital Contributions 2,459,156 68,792 n/a 240,000 79,816 n/aInterfund Transfers 2,733,467 - 0% 3,055,330 - 0%Indirect Cost Plan Revenue 1,891,970 450,596 24% 1,979,857 471,933 24%Miscellaneous 2,152,069 448,669 21% 1,918,071 496,328 26%

Total Water Fund 43,179,836 7,571,786 18% 41,070,377 8,134,548 20%Sewer

Residential Sewer Charges 29,234,944 6,881,103 24% 31,600,080 7,708,864 24%Commercial, Industrial Sewer Charges 12,871,260 2,972,981 23% 12,498,759 2,763,985 22%Governmental Sewer Charges 1,990,630 313,777 16% 1,299,395 548,345 42%

Subtotal Sewer Charges 44,096,834 10,167,861 23% 45,398,234 11,021,194 24%Private Capital Contributions 404,666 42,210 10% 150,000 74,682 50%Interfund Transfers 6,269,670 - 0% 3,300,000 - 0%Miscellaneous 922,249 279,142 30% 1,228,354 116,651 9%

Total Sewer Fund 51,693,419 10,489,213 20% 50,076,588 11,212,527 22%Building Inspection

Permits 3,719,143 876,540 24% 3,907,000 1,296,963 33%Miscellaneous 203,094 68,170 34% 163,773 40,788 25%Interfund Services 313,797 65,558 21% 417,620 - 0%

Total Building Fund 4,236,034 1,010,269 78% 4,488,393 1,337,750 58%Solid Waste

Solid Waste Utility Tax 1,204,395 297,220 25% 1,270,132 423,814 33%Service Charges-Recycling 529,057 37,491 7% 635,581 51,578 8%Miscellaneous 156,521 14,856 9% 43,226 18,257 42%

Total Solid Waste Fund 1,889,973 349,567 18% 1,948,939 493,648 25%Parking

Parking Fines 574,954 (5,028) -1% 411,000 360,814 88%Parking Meters & Lots 2,593,769 549,037 21% 3,643,309 727,190 20%Miscellaneous 122,670 12,465 n/a 35,300 18,322 n/aOperating Transfers 500,629 - - -


5/17/2018


Total Parking Fund 3,792,023 556,474 15% 4,089,609 1,106,326 27%Tennis Center

Membership Fees 731,431 217,385 30% - 212,461 n/aInstruction and Miscellaneous 15,607 3,437 22% - 3,239 n/aOperating Transfers 323,009 - 0% 1,098,306 - 0%

Total Tennis Center Fund 1,070,048 220,821 21% 1,098,306 215,700 20%Other Enterprise Funds

Pearson Airfield 861,841 167,401 19% 880,123 160,284 18%Utility Customer Assistance 17,059 (570) n/a 13,000 3,108 n/a

INTERNAL SERVICE FUNDSFacilities Asset Mgmt & Replacement Reserve Fund 4,636,553 423,982 9% 139,805 435,241 311%Equipment Services Operations Fund 6,649,556 1,360,935 20% 6,851,180 1,387,180 20%Equipment Services Capital Fund 4,979,827 746,813 15% 3,291,166 825,811 25%Computer Repair & Replacement 2,899,283 22,122 1% 3,001,133 734,639 24%Self-Insured Worker's Comp & Liability Fund 6,166,525 1,508,352 24% 6,023,717 1,541,315 26%Internal Administrative Services Fund 15,940,041 3,589,828 23% 16,359,237 3,836,050 23%Benefits Fund 10,430,290 2,543,964 24% 10,442,056 2,691,908 26%Self-Insured Health Insurance Fund 7,435,331 1,770,456 24% 7,210,634 1,868,496 26%Mail Services Fund - 42,948 n/a - - n/aAGENCY FUNDSSWAT Team 257,891 69,107 27% 311,065 147,036 47%Police Pension 1,106,022 277,946 25% 1,100,000 280,344 25%Fire Pension 2,083,653 469,201 23% 2,038,228 479,092 24%Cable TV 1,259,797 259,515 21% 1,135,237 429,032 38%PEG 577,225 189,928 33% 788,064 163,915 21%Notes1. This report was prepared using the methodology prescribed under the basis of budgeting.2. Operating transfers between funds are included within this report.


City of VancouverInvestment Activity

First Quarter of 2018(Dollars in thousands)

As of Percent of As of Percent of12/31/2017 Portfolio 3/31/2018 Portfolio

State Investment Pool 73,298$ 22.6% 68,046$ 21.7%Clark County Investment Pool 325$ 0.1% 950$ 0.3%U.S. Agencies 249,728$ 77.1% 244,738$ 77.9%Municipal Bonds 509$ 0.2% 507$ 0.2%

Total by Investment Type 323,860$ 100.0% 314,241$ 100.0%

As of Percent of As of Percent of12/31/2017 Portfolio Cumulative 3/31/2018 Portfolio Cumulative

Overnight 73,623$ 22.7% 22.7% 68,996$ 22.0% 22.0%One Month 5,000$ 1.5% 24.3% 15,000$ 4.8% 26.7%Two to Six Months 54,981$ 17.0% 41.3% 69,996$ 22.3% 49.0%Six Months to One Year 75,487$ 23.3% 64.6% 50,457$ 16.1% 65.1%One to Five Years 114,769$ 35.4% 100.0% 109,792$ 34.9% 100.0%

Total by Length of Maturity 323,860$ 100.0% 314,241$ 100.0%

12 Months 8 Months


Investment Activity1st Quarter 2018

Issuer Type of InvestmentTransaction

DateMaturity

Date Purchase or

Deposit Redemption or

Withdrawal

Effective Interest

Rate

JanuaryClark County Treasurer* Local Government Investment Pool 1,000,218.35 989,691.93 1.22%FNMA Federal Agency Coupon Securities 1/30/2018 5,000,000.00 1.00%Washington State Treasurer* Local Government Investment Pool 19,827,733.25 24,000,000.00 1.57%

20,827,951.60 29,989,691.93

FebruaryClark County Treasurer* Local Government Investment Pool 331.35 200,607.87 1.22%FHLB Federal Agency Coupon Securities 2/15/2018 5,000,000.00 - 1.25%FHLMC Federal Agency Coupon Securities 2/26/2018 5,000,000.00 1.05%Washington State Treasurer* Local Government Investment Pool 16,639,068.98 17,000,000.00 1.57%

21,639,400.33 22,200,607.87

MarchClark County Treasurer* Local Government Investment Pool 1,000,204.45 185,026.60 1.22%Washington State Treasurer* Local Government Investment Pool 13,358,248.59 14,000,000.00 1.57%

14,358,453.04 14,185,026.60 * Investments in the County and State Local Government Investment Pools can change daily, therefore no purchase dates are shownand the maturity dates are the last date for each reporting period.


City of Vancouver Investment Portfolio Including Call Dates

3/31/2018Purchase Maturity Par Market Book Percent Cumulative Interest Effective

Issuer Date Date Value Value Value of Portfolio Percent Rate Yield CallableClark County LGIP 950,011.63 950,011.63 950,011.63 0.00 0.003 1.204 1.221 0Washington State LGIP 68,046,389.22 68,046,389.22 68,046,389.22 0.22 0.217 1.452 1.472 0Federal Home Loan Mortgage Co. 02/13/2017 04/09/2018 5,000,000.00 4,999,050.00 4,999,800.96 0.02 0.016 0.918 0.930 BulletFederal Farm Credit Bank 10/04/2016 04/12/2018 5,000,000.00 4,998,850.00 4,999,968.89 0.02 0.016 0.799 0.811 BulletFederal Home Loan Bank 04/27/2016 04/27/2018 5,000,000.00 4,997,400.00 5,000,000.00 0.02 0.016 1.016 1.030 Quarterly CallFederal Farm Credit Bank 02/09/2017 05/14/2018 5,000,000.00 4,994,800.00 4,998,577.69 0.02 0.016 0.957 0.970 BulletFederal Farm Credit Bank 04/21/2017 05/21/2018 5,000,000.00 4,996,650.00 5,000,000.00 0.02 0.016 1.085 1.100 BulletFederal Nat'l Mtg. Assoc. 05/05/2016 05/21/2018 5,000,000.00 4,995,350.00 5,000,000.00 0.02 0.016 1.016 1.030 CallableFederal Home Loan Bank 06/16/2017 06/15/2018 5,000,000.00 4,994,300.00 4,999,845.40 0.02 0.016 1.248 1.265 BulletFederal Home Loan Mortgage Co. 03/07/2017 06/22/2018 5,000,000.00 4,991,150.00 5,000,000.00 0.02 0.016 1.145 1.161 CallableFederal Home Loan Bank 02/14/2017 06/29/2018 5,000,000.00 4,988,600.00 4,998,240.00 0.02 0.016 1.006 1.020 BulletFederal Home Loan Bank 03/17/2017 06/29/2018 5,000,000.00 4,988,600.00 4,996,304.76 0.02 0.016 1.164 1.180 BulletFederal Home Loan Bank 03/22/2017 07/12/2018 5,000,000.00 4,985,700.00 5,000,000.00 0.02 0.016 1.120 1.136 CallableFederal Nat'l Mtg. Assoc. 11/17/2016 07/13/2018 5,000,000.00 4,986,750.00 5,000,000.00 0.02 0.016 0.987 1.001 CallableFederal Home Loan Mortgage Co. 07/27/2016 07/27/2018 5,000,000.00 4,985,950.00 5,000,000.00 0.02 0.016 0.986 1.000 CallableFederal Home Loan Mortgage Co. 03/02/2017 07/27/2018 5,000,000.00 4,985,950.00 5,000,000.00 0.02 0.016 1.185 1.202 CallableFederal Nat'l Mtg. Assoc. 10/24/2016 07/27/2018 5,000,000.00 4,981,800.00 5,000,000.00 0.02 0.016 0.911 0.923 CallableFederal Home Loan Bank 09/09/2016 09/14/2018 5,000,000.00 4,980,350.00 5,005,103.59 0.02 0.016 0.885 0.897 BulletFederal Home Loan Bank 05/02/2017 09/14/2018 5,000,000.00 4,980,350.00 4,998,310.37 0.02 0.016 1.184 1.200 BulletFederal Home Loan Bank 10/03/2016 10/03/2018 5,000,000.00 4,973,650.00 5,000,000.00 0.02 0.016 0.927 0.940 CallableFederal Home Loan Mortgage Co. 09/16/2016 10/12/2018 5,000,000.00 4,972,150.00 4,999,449.53 0.02 0.016 0.884 0.896 BulletFederal Farm Credit Bank 04/08/2016 10/15/2018 5,000,000.00 4,977,350.00 5,000,000.00 0.02 0.016 1.085 1.100 CallableFederal Nat'l Mtg. Assoc. 04/13/2017 10/29/2018 5,000,000.00 4,972,950.00 5,000,000.00 0.02 0.016 1.214 1.231 CallableFederal Farm Credit Bank 11/04/2016 11/01/2018 5,000,000.00 4,973,100.00 5,000,000.00 0.02 0.016 0.957 0.970 1XCall 11/17Federal Home Loan Mortgage Co. 11/15/2016 11/15/2018 5,000,000.00 4,969,250.00 5,000,000.00 0.02 0.016 0.986 1.000 CallableFederal Farm Credit Bank 11/16/2016 11/16/2018 5,000,000.00 4,968,650.00 5,000,000.00 0.02 0.016 0.967 0.980 CallableFederal Home Loan Bank 12/05/2017 11/28/2018 5,000,000.00 4,968,900.00 4,980,563.31 0.02 0.016 1.675 1.698 BulletTacoma Metropolitan Park Distr 12/01/2016 12/01/2018 500,000.00 504,745.00 506,718.33 0.00 0.002 0.947 0.960 BulletFederal Farm Credit Bank 11/17/2017 01/07/2019 5,000,000.00 4,969,850.00 5,000,000.00 0.02 0.016 1.598 1.620 CallableFederal Home Loan Bank 02/15/2018 01/16/2019 5,000,000.00 4,966,300.00 4,970,122.36 0.02 0.016 1.988 2.015 BulletFederal Farm Credit Bank 07/14/2017 04/26/2019 5,000,000.00 4,943,200.00 4,978,920.95 0.02 0.016 1.381 1.400 BulletUS Treasury N/B 11/06/2017 04/26/2019 5,000,000.00 4,948,000.00 4,979,079.25 0.02 0.016 1.625 1.648 BulletFederal Farm Credit Bank 10/26/2017 06/20/2019 5,000,000.00 4,941,000.00 5,000,000.00 0.02 0.016 1.622 1.645 CallableFederal Farm Credit Bank 06/27/2016 06/27/2019 5,000,000.00 4,928,250.00 5,000,000.00 0.02 0.016 1.105 1.120 CallableFederal Nat'l Mtg. Assoc. 06/28/2016 06/28/2019 5,000,000.00 4,939,750.00 5,000,000.00 0.02 0.016 1.184 1.200 CallableFederal Nat'l Mtg. Assoc. 10/10/2017 06/28/2019 5,000,000.00 4,939,750.00 5,000,000.00 0.02 0.016 1.516 1.537 CallableFederal Farm Credit Bank 07/08/2016 07/05/2019 5,000,000.00 4,934,500.00 5,000,000.00 0.02 0.016 1.065 1.080 CallableFederal Nat'l Mtg. Assoc. 05/16/2017 08/02/2019 5,000,000.00 4,910,100.00 4,965,556.53 0.02 0.016 1.381 1.400 BulletFederal Nat'l Mtg. Assoc. 05/22/2017 08/02/2019 5,000,000.00 4,935,950.00 5,000,000.00 0.02 0.016 1.332 1.350 CallableFederal Farm Credit Bank 05/19/2016 08/19/2019 5,000,000.00 4,928,750.00 5,000,000.00 0.02 0.016 1.233 1.250 CallableFederal Nat'l Mtg. Assoc. 05/10/2017 08/23/2019 4,900,000.00 4,833,262.00 4,900,000.00 0.02 0.016 1.480 1.500 CallableFederal Nat'l Mtg. Assoc. 09/27/2016 09/27/2019 5,000,000.00 4,926,000.00 5,000,000.00 0.02 0.016 1.233 1.250 CallableFederal Nat'l Mtg. Assoc. 11/14/2016 09/27/2019 5,000,000.00 4,920,850.00 5,000,000.00 0.02 0.016 1.199 1.215 CallableUS Treasury N/B 10/13/2017 09/30/2019 5,000,000.00 4,917,950.00 4,968,285.15 0.02 0.016 1.610 1.632 BulletFederal Home Loan Bank 07/13/2016 10/11/2019 5,000,000.00 4,915,100.00 5,000,000.00 0.02 0.016 1.141 1.157 CallableFederal Nat'l Mtg. Assoc. 11/15/2016 11/15/2019 5,000,000.00 4,908,850.00 5,000,000.00 0.02 0.016 1.163 1.179 1XCall 11/17Federal Home Loan Bank 11/22/2016 11/22/2019 5,000,000.00 4,912,000.00 5,000,000.00 0.02 0.016 1.341 1.360 CallableFederal Home Loan Mortgage Co. 11/16/2017 05/22/2020 5,000,000.00 4,937,100.00 5,000,000.00 0.02 0.016 1.856 1.882 CallableFederal Farm Credit Bank 08/24/2016 08/24/2020 5,000,000.00 4,873,900.00 5,000,000.00 0.02 0.016 1.302 1.320 CallableFederal Home Loan Bank 10/30/2017 11/05/2020 5,000,000.00 4,931,550.00 5,000,000.00 0.02 0.016 1.944 1.971 CallableFederal Farm Credit Bank 08/10/2016 11/10/2020 5,000,000.00 4,859,800.00 5,000,000.00 0.02 0.016 1.381 1.400 CallableFederal Farm Credit Bank 05/31/2017 12/14/2020 5,000,000.00 4,880,000.00 5,000,000.00 0.02 0.016 1.628 1.650 Callable

8.00 Months 314,241,247.92


Attachment CCity of VancouverOutstanding Debt - General Obligation BondsFirst Quarter 2018

True FinalIssue Original Issue Amount Interest MaturityDate Purpose Amount Outstanding Cost (TIC) Date

Oct-02 To partially refund 1993, 1996, 1997, 1999, & 2000 LTGO issues, and issue $1.6 million for the Oracle HR/Payroll Management System Implementation

39,365,000 2,290,000 4.08% 12/1/2018

Jul-05 To construct & equip the East Precinct Police facility, and to partially refund the 98A and 98B LTGO bonds.

18,090,000 1,810,000 4.07% 12/1/2026

Jun-09 To fund multiple Transportation Projects

12,970,000 620,000 4.03% 12/1/2028

Dec-10 To fund the new City Hall and partially refund the 2001 LTGO bond issue

13,410,000 8,625,000 4.50% 12/1/2035

Jun-11 To fund Transportation Projects for the Waterfront Access Project

10,515,000 8,700,000 3.93% 12/1/2035

Jan-12 To partially refund the 2003 LTGO bond issue for the Firstenburg Community Center

15,945,000 13,275,000 3.26% 12/1/2029

Dec-12 To partially refund the 2002 LTGO & Refunding bond issue for VancouverCenter, West Coast Bank, and Street Improvements

9,515,000 9,285,000 2.36% 12/1/2025

Jun-15 To fund the West Barracks rennovations (Vancouver Heritage Bonds)

1,296,500 1,296,500 4.33% 12/1/2028

Jun-15 To fund the West Barracks rennovations and to partially refund the 2005 LTGO, 2006 LTGO, and the 2008 LTGO issued for the East Police Precinct, West Police Precinct, Evidence Building, Fire Station 810, Transportation Projects, and the Marshall CC remodel.

23,100,000 21,440,000 2.72% 12/1/2034

Jun-16To Partially refund 2009 LTGO issued for Transportation Projects. 7,810,000$ 7,745,000$ 1.89% 12/1/2028

Total Outstanding General Obligation Bonds 75,086,500$ 1Q 2018 Financial Report Final City of Vancouver 39

Attachment CCity of VancouverOutstanding Debt - Revenue BondsFirst Quarter 2018

True FinalIssue Original Issue Amount Interest MaturityDate Purpose Amount Outstanding Cost (TIC) Date

Feb-04 Partially refund the 1999 Water/Sewer Revenue Bonds

26,250,000 9,795,000 3.998% 6/1/2020

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

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

14,580,000$


Quarterly Financial Report, Q1 2018 - City of Vancouver

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Transcript of Quarterly Financial Report, Q1 2018 - City of Vancouver