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About This Quarterly Financial 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 December 31, 2017. This report is presented in six 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 section provides a summary

of the City’s investment portfolio, interest earnings and a brief market outlook.

5. The Performance Report section provides Key Performance Indicators (KPIs) for each of the goals identified in the City’s strategic plan. In addition, the progress on Key Action Steps are highlighted.

2

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.

Antonio Puente, Jr. Director of Finance 215 East McKinney Street Denton, TX 76201 940-349-8260

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Section 1

City of Denton Quarterly Financial Report

December 2017

Executive Dashboards

4

Note: All figures presented are in millions of dollars.

FY 2017-18 FY 2017-18ANNUAL ANNUAL FY 2017-18

DESCRIPTIO N BUDGET 1 PRO JECTIO N VARIANCEBeginning Fund Balance as of 09/30/17 28.17$ 31.77$ RESO URCES: Ad Valorem Taxes 45.06 45.06 0% Sales Tax 36.18 36.18 0% Franchise Fees 4.99 4.99 0% O ther Taxes 0.49 0.49 0% Service Fees 8.27 8.27 0% Fines and Fees 3.96 3.96 0% Licenses and Permits 2.73 2.73 0% Miscellaneous Revenue 1.99 1.99 0% Transfers In 16.05 16.05 0%Total Revenues 119.72 119.72 0%Total Resources 147.89 151.49 EXPENDITURES: Personal Service 84.59 84.59 0% Material and Supplies 3.10 3.10 0% Maintenance and Repairs 2.98 2.98 0% Insurance 1.21 1.21 0% Miscellaneous 1.16 1.16 0% O perations 15.94 15.94 0% Transfers O ut 12.81 12.81 0% Fixed Assets 0.59 0.59 0%Total Expenditures 122.38 122.38 0%Net Income (Loss) (2.66) (2.66) Ending Fund Balance 25.51$ 29.11$

City of Denton, Texas General Fund Executive Dashboard

$‐

$5

$10

$15

$20

$25

$30

$35

$40

$45

Revenue & Expenses (in Millions)YTD Revenue YTD Expenses

Key TrendsAt this point in the fiscal year, revenues and expenditures are projected to meet budgeted levels.Budget amended on January 9, 2018 for $2.695M to fund one‐time capital projects as a result of better than anticipated results for FY 2016‐17.

$‐

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

$3.5Sales Tax Monthly Average by Quarter

1Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which wasestimated in the FY 2017‐18 budget process.

5


City of Denton, Texas Electric Fund Executive Dashboard

DESCRIPTIO N

FY 2017-18 ANNUAL BUDGET 1

FY 2017-18 ANNUAL

PRO JECTIO NS FY 2017-18 VARIANCE

Beginning Working Capital and Reserves as of 9/30/17 72.51$ 76.94$ RESO URCES: O perating Revenues 173.23 173.23 0% Non-operating Revenues 0.45 0.45 0%

Total Revenues 173.68 173.68 0%Total Resources 246.19 250.62

EXPENDITURES: Purchased Power 84.55 84.55 0% O peration and Maintenance 47.20 47.20 0% Non-O perating Expenditures 49.15 49.15 0%Total Expenditures 180.90 180.90 0%Net Income (Loss) (7.22) (7.22)

Ending Working Capital and Reserves 65.29$ 69.72$

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

$50

Oct‐17 Nov‐17 Dec‐17

Revenue & Expenses (in Millions)

YTD Revenue YTD Expense

Key TrendsAt this point in the fiscal year, revenues and expenses are projected to meet budgeted levels.

0

50

100

150

200

250

300

350

400

450

500

1Q 13 3Q 13 1Q 14 3Q 14 1Q 15 3Q 15 1Q16 3Q16 1Q17 3Q17 1Q18

2013 – 2018 Historical Quarterly GWH Sales

1Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which was estimated in the FY 2017‐18 budget process.

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DESCRIPTION BUDGET 1 PROJECTION VARIANCEBeginning Working Capital and Reserves as of 09/30/172 20.85$ 23.34$ RESOURCES: Water Sales 37.12 37.12 0% Other Water Revenues 0.98 0.98 0% Transfers In 5.95 5.95 0% Impact Fee Revenue 3.75 3.75 0%Total Revenues 47.80 47.80 0%

Total Resources 68.65 71.14

EXPENDITURES: Personal Service 11.41 11.41 0% Operations, Services 11.22 11.22 0% Capital Outlay 9.06 9.06 0% Debt Service 12.64 12.64 0% Transfers Out 3.47 3.47 0%Total Expenditures 47.80 47.80 0%Net Income (Loss) - - Ending Working Capital and Reserves 20.85$ 23.34$

0

500

1,000

1,500

2,000

2,500

3Q12

1Q13

3Q13

1Q14

3Q14

1Q15

3Q15

1Q16

3Q16

1Q17

3Q17

1Q18

2012‐2017 Historical Quarterly Gallons Sold (in Millions)

City of Denton, Texas Water Fund Executive Dashboard

$‐

$2

$4

$6

$8

$10

$12

$14

$16



YTD Revenue YTD Expenses

Key Trends

At this point in the fiscal year, expenditures and revenues are projected to meet budgeted levels.

1Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which was estimated in the FY 2017‐18 budget process.2The Beginning Working Capital balance excludes $6.7M of Impact Fee Reserves and $0.25 million for Development Plan Line Reserves.

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DESCRIPTION BUDGET 1 PROJECTION VARIANCEBeginning Working Capital and Reserves as of 09/30/172 15.93$ 17.86$ RESOURCES: Wastewater Fees 24.14 24.14 0% Other Wastewater Revenue 1.76 1.76 0% Drainage Fees 4.67 4.67 0% Transfer In 0.66 0.66 0% Impact Fee Revenue 2.00 2.00 0%Total Revenues 33.23 33.23 0%

Total Resources 49.16 51.09 EXPENDITURES: Personal Service 8.10 8.10 0% Operations, Services 8.59 8.59 0% Capital Outlay 6.87 6.87 0% Debt Service 7.17 7.17 0% Transfer Out 3.29 3.29 0%Total Expenditures 34.02 34.02 0%

Net Income (Loss) (0.79) (0.79) Ending Working Capital

and Reserves 15.14$ 17.07$


0

200

400

600

800

1,000

1,200

3Q12

1Q13

3Q13

1Q14

3Q14

1Q15

3Q15

1Q16

3Q16

1Q17

3Q17

1Q18

2012‐2017 Historical Quarterly Gallons Billed (in Millions)

City of Denton, Texas Wastewater Fund Executive Dashboard

$‐

$2

$4

$6

$8

$10

$12




Key Trends

At this point in the fiscal year, revenues and expenditures are projected to meet budgeted levels.

1Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which was estimated in the FY 2017‐18 budget process.2The Beginning Working Capital balance excludes $2.2 million of Impact Fee Reserves, $1.0 million for Drainage Reserves, and $0.33 million for Development Plan Line Reserves.

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DESCRIPTION BUDGET PROJECTION VARIANCEREVENUES: Residential Drainage Fees 1.78$ 1.78$ 0% Nonresidential Drainage Fees 2.90 2.90 0% Wastewater Resources 0.04 0.04 0% General Fund Transfer 0.42 0.42 0%Total Revenues 5.14 5.14 0%

EXPENDITURES: Personal Service 1.78 1.78 0% Operations, Services 0.80 0.80 0% Capital Outlay 1.28 1.28 0% Debt Service 0.68 0.68 0% Transfer Out 0.60 0.60 0%Total Expenditures 5.14 5.14 0%

Net Income (Loss) -$ -$


City of Denton, Texas Drainage Operations Executive Dashboard

$‐

$0.2

$0.4

$0.6

$0.8

$1.0

$1.2

$1.4




Key Trends

At this point in the fiscal year, expenditures and revenues are projected to meet budgeted levels.

9


DESCRIPTIO N BUDGET 1 PRO JECTIO N VARIANCEBeginning Working Capital

and Reserves as of 09/30/172 8.15$ 9.47$ RESO URCES: Collection & Disposal 35.86 35.86 0% Recycling 0.87 0.87 0% O ther Revenue 1.29 1.29 0%Total Revenues 38.02 38.02 0%

Total Resources 46.17 47.49 EXPENDITURES: Personal Service 11.68 11.68 0% O perations, Services 11.51 11.51 0% Capital O utlay 2.67 2.67 0% Debt Service 9.70 9.70 0% Transfer O ut 2.97 2.97 0%Total Expenditures 38.53 38.53 0%

Net Income (Loss) (0.51) (0.51) Ending Working Capital and Reserves 7.64$ 8.96$

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2016Qtr 2

2016Qtr 3

2016Qtr 4

2017Qtr 1

2017Qtr 2

2017Qtr 3

2017Qtr 4

2018Qtr 1

Refuse Tonnage Recycling Tonnages

Residential Curbside Collection Tonnage


City of Denton, Texas Solid Waste Fund Executive Dashboard

Key Trends

Expenditures and revenues have been reflected at budget, but staff anticipates significant reductions in expenditures as a result of various operational changes. A detailed discussion about these reductions is scheduled for March 2018 with the City Council.

0

5,000

10,000

15,000

20,000

25,000

30,000

2016Qtr 2

2016Qtr 3

2016Qtr 4

2017Qtr 1

2017Qtr 2

2017Qtr 3

2017Qtr 4

2018Qtr 1

Commercial Refuse & Recycling (Front & Side Load)Cubic Yards Serviced per Week

Commercial Refuse Commercial Recycling

1Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which was estimated in the FY 2017‐18 budget process.2The Beginning Working Capital and Reserves excludes $8.65 million of Landfill Closure/Post Closure reserves.

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City of Denton, Texas Airport Fund Executive Dashboard

Key TrendsAt this point in the fiscal year, all revenues and expenditures are projected to be at budget.

$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

GAS WELL REVENUE(in millions of dollars by fiscal year)

20,000

30,000

40,000

50,000

60,000

AIRPORT OPERATIONS BY QUARTER(takeoff or landing)

Note: All financial amounts presented are in millions of dollars.


DESCRIPTIO N BUDGET 1 PRO JECTIO N VARIANCEBeginning Working Capital and Reserves as of 09/30/17 2.47$ 2.75$ RESO URCES: Airport Ground Leases 0.71 0.71 0% FBO Commissions 0.20 0.20 0% Miscellaneous 0.09 0.09 0%Total O perating Revenues 1.00 1.00 0%EXPENDITURES: Personal Service 0.53 0.53 0% O perations, Services 0.41 0.41 0% Transfer O ut 0.55 0.55 0%Total O perating Expenditures 1.49 1.49 0%

Net O perating Income (Loss) (0.49) (0.49) NO N-O PERATING REVENUES: Investment Income 0.03 0.03 0% Gas Well Royalties 0.47 0.47 0%Total Non-O perating Revenues 0.50 0.50 0%

NO N-O PERATING EXPENDITURES: Transfer O ut - Capital 0.22 0.22 0%Total Non-O perating Expenditures 0.22 0.22 0%Net Non-O perating Income (Loss) 0.28 0.28

Net Income (Loss) (0.21) (0.21)

Ending Working Capital and Reserves 2.26$ 2.54$

1Annual adopted budget as amended or modified. Beginning Working Capital and Reserves represents the amount which was estimated in the FY 2017‐18 budget process.

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DESCRIPTIO N BUDGET 1 PRO JECTIO N VARIANCEBeginning Working Capital

and Reserves as of 09/30/2017 1.25$ 1.16$ RESO URCES: Franchise Fees 12.47 12.47 0% Street Cuts 0.36 0.36 0% Investment Income 0.01 0.01 0% Transfers In 1.12 1.12 0%Total Revenues 13.96 13.96 0%

Total Resources 15.21 15.12

EXPENDITURES: Personal Service 3.44 3.44 0% Materials & Supplies 0.09 0.09 0% Maintenance & Repairs 8.04 8.04 0% O perations, Services 0.76 0.76 0% Transfer O ut 1.63 1.63 0%Total Expenditures 13.96 13.96 0%Net Income (Loss) - -

Ending Fund Balance 1.25$ 1.16$

1Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount

which was estimated in the FY 2017-18 budget process.

City of Denton, Texas Street Improvement Fund Executive Dashboard

Key Trends

At this point in the fiscal year, revenues and expenditures are projected to meet budgeted levels.No surface treatments were completed in the 1st quarter due to cold weather.


0

3

6

9

12

Qtr1

Tons of Asphalt Laid (in Thousands)

FY16-17 FY17-18

0

3

6

9

12

Qtr 1

Lane Miles Surface Treatment

FY 16-17 FY 17-18

$-

$1.0

$2.0

$3.0

$4.0

Oct-17 Nov-17 Dec-17



12

FY 2017-18 FY 2017-18

GRANT ANNUAL FY 2017-18

DESCRIPTIO N AMO UNT PRO JECTIO N VARIANCE2017-18 Budget Comm Development1 2.94$ 1.05$ -64% Public Safety 0.80 0.80 0% Transportation1 95.14 26.98 -72% O ther 0.03 0.03 0%Total Budget 98.91 28.86 -71%

New Awards Public Safety 0.06 0.06 0% Transportation1 3.39 1.48 -56% Parks & Recreation 0.21 0.21 0%Total New Awards 3.66 1.75 -52%

Totals 102.57$ 30.61$ -70%

COMM DEV2.87%

PUBLIC SAFETY0.83%

TRANS96.06%

PARKS & REC0.21%

OTHER0.03%

FY 2017‐18 Grants Awarded

$‐

$20.0

$40.0

$60.0

$80.0

$100.0

$120.0

COMM

DEV

PUBLIC

SAFETY

TRAN

S

PARK

S &

REC

OTH

ER

Awards Expenses

FY 2017‐18 Awards & Expenses (in Millions)

Key Trends

The following grants have been received in FY 2017-18: Federal Equitable Sharing: $5,149Chapter 59 Asset Forfeitures: $15,664U.S. Marshals Violent Offenders Task Force: $5,814PD-Law Enforcement Officer Standard & Education:$3,942

Sexual Assault Examiners Reimbursement:$13,4572017 SHSP Ballistic Blankets: $3,0002017 SHSP Night Vision: $14,200Transportation Projects: $3,387,898NW Trail Extension Grant: $212,273

City of Denton, Texas Grants Dashboard

Note: All figures presented are in millions of dollars.1 This grant amount will be spent over several years and the fiscal year 2017-18 projections are estimated expenditures for one year. Remaining grant amounts will be spent in future fiscal year.

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Section 2


December 2017

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

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City of Denton General FundSchedule of Revenues - Budget vs Projection (Unaudited)For the Period Ended December 31, 2017

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 16,607,825$ 16,894,868$ 21,575,628$ 44,460,191$ 44,460,191$ 0%

Delinquent - Ad Valorem 118,622 60,688 41,034 288,991 288,991 0%

Miscellaneous Penalties & Fees 46,850 68,875 50,553 315,384 315,384 0%

Ad Valorem Taxes 16,773,297 17,024,431 21,667,215 45,064,566 45,064,566 0%

Sales Tax 9,542,996 9,052,582 9,700,411 36,181,384 36,181,384 0%

Franchise - Gas Utilities - - 11,298 342,738 342,738 0%

Franchise - Private Electric Utilities - - - 122,751 122,751 0%

Franchise - Cable - - - 480,873 480,873 0%

Franchise - Telecom 58,710 - - 233,956 233,956 0%

Franchise - Denton Municipal Utilities 915,498 774,439 845,451 3,804,531 3,804,531 0%

Franchise Fees 974,208 774,439 856,749 4,984,849 4,984,849 0%

Other Taxes - - - 491,400 491,400 0%

Ambulance Service Fees 704,310 420,565 624,307 3,726,629 3,726,629 0%

Fire Department Fees 36,987 48,756 48,989 195,027 195,027 0%

Building Inspections Fees 106,787 127,201 126,084 560,145 560,145 0%

Park Department Fees 123,859 214,121 102,485 2,406,263 2,406,263 0%

Planning Department Fees 250,253 221,663 262,243 886,355 886,355 0%

Reprographics Fees 91,093 92,613 74,747 370,160 370,160 0%

Miscellaneous Service Fees 21,597 30,759 15,775 123,043 123,043 0%

Service Fees 1,334,886 1,155,678 1,254,630 8,267,622 8,267,622 0%

Denton Municipal Fines 332,266 412,260 329,521 1,649,042 1,649,042 0%

Parking Fines 72,335 61,800 65,170 247,200 247,200 0%

Miscellaneous Fines and Fees 220,956 235,754 199,753 1,077,838 1,077,838 0%

Court Administrative and Service Fees 198,093 214,500 231,570 988,000 988,000 0%

Fines and Fees 823,650 924,314 826,014 3,962,080 3,962,080 0%

Demolition Permits 1,805 2,521 2,090 10,082 10,082 0%

Building Permits 319,376 578,682 638,082 2,571,085 2,571,085 0%

Certificate of Occupancy 15,865 23,622 13,015 94,488 94,488 0%

Miscellaneous Licenses and Permits 6,885 13,960 3,210 55,822 55,822 0%

Licenses and Permits 343,931 618,785 656,397 2,731,477 2,731,477 0%

Investment Income 55,889 132,500 92,272 530,000 530,000 0%

Miscellaneous Revenues 12,558 189,714 73,753 1,458,388 1,458,388 0%

Miscellaneous Resources 68,447 322,214 166,025 1,988,388 1,988,388 0%

ROI - Denton Municipal Utilities 1,685,653 1,902,930 1,781,588 7,997,918 7,997,918 0%

Transfers 2,015,667 2,013,119 2,008,981 8,050,688 8,050,688 0%

Transfers 3,701,320 3,916,049 3,790,569 16,048,606 16,048,606 0%

Total General Fund Revenues 33,562,735$ 33,788,492$ 38,918,010$ 119,720,372$ 119,720,372$ 0%

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City of Denton

General Fund

Schedule of Expenditures - Budget vs Projection (Unaudited)

For the Period Ended December 31, 2017


Y-T-D Y-T-D Y-T-D BUDGET PROJECTION PROJECTION

NEIGHBORHOOD SERVICES

Building Inspections 744,189$ 769,589$ 677,286$ 3,075,893$ 3,075,893$ 0%

Community Improvement Services 415,441 391,392 316,381 1,564,294 1,564,294 0%

Libraries 1,575,265 1,517,243 1,609,959 6,064,112 6,064,112 0%

Parks and Recreation 2,690,768 3,351,854 2,810,636 13,971,655 13,971,655 0%

Planning 806,742 853,413 687,820 3,410,931 3,410,931 0%

Gas Well Review 60,831 98,334 61,025 393,026 393,026 0%

Social Services 123,125 157,561 123,488 629,738 629,738 0%

6,416,361 7,139,386 6,286,595 29,109,649 29,109,649 0%

PUBLIC SAFETY

Animal Services 295,447 390,113 393,984 1,559,205 1,559,205 0%

Fire 6,918,199 7,183,634 7,412,533 28,711,580 28,711,580 0%

Municipal Court 338,173 345,705 327,449 1,381,702 1,381,702 0%

Municipal Judge 93,676 109,116 100,114 436,124 436,124 0%

Police 7,423,503 8,080,901 7,899,347 32,297,806 32,297,806 0%

15,068,998 16,109,469 16,133,427 64,386,417 64,386,417 0%

TRANSPORTATION

Traffic Operations 486,255 468,381 325,273 3,992,028 3,992,028 0%

Transportation Operations 111,759 211,833 101,030 846,658 846,658 0%

Street Lighting 197,247 188,901 192,254 755,000 755,000 0%

795,261 869,115 618,557 5,593,686 5,593,686 0%

ADMINISTRATIVE & COMMUNITY SERVICES

Cable Television 74,463 80,878 76,138 323,271 323,271 0%

City Manager's Office 636,409 707,888 683,528 2,829,303 2,829,303 0%

Economic Development 407,126 1,115,415 333,147 4,458,071 4,458,071 0%

Facilities Management 802,435 1,082,022 889,407 4,324,642 4,324,642 0%

Finance 737,415 769,665 745,870 3,076,220 3,076,220 0%

Human Resources 462,730 439,319 475,940 1,755,865 1,755,865 0%

Internal Audit 12,900 65,900 54,810 263,381 263,381 0%

Legal Administration 545,139 613,941 504,011 2,453,772 2,453,772 0%

Public Communications Office 94,419 123,853 117,778 495,021 495,021 0%

Reprographics 132,415 108,496 88,114 433,646 433,646 0%

Non-Departmental 920,332 720,589 1,363,843 2,880,047 2,880,047 0%

4,825,783 5,827,966 5,332,586 23,293,239 23,293,239 0%

TOTAL EXPENDITURES 27,106,403$ 29,945,936$ 28,371,165$ 122,382,991$ 122,382,991$ 0%

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City of Denton

Electric Fund

Schedule of Revenues and Expenditures - Budget vs Projections (Unaudited)



DESCRIPTION Y-T-D Y-T-D Y-T-D BUDGET1

PROJECTION PROJECTION

Beginning Working Capital

and Reserves as of 9/30/17 72,510,304$ 76,942,756$

REVENUES:

Operating Revenues 37,459,978$ 39,096,328$ 38,318,935$ 173,229,784 173,229,784 0%

Non-operating Revenues 171,559 98,985 274,798 450,000 450,000 0%

Total Revenues 37,631,537 39,195,313 38,593,733 173,679,784 173,679,784 0%

EXPENDITURES:

Purchased Power 21,086,101 18,854,056 18,430,133 84,547,684 84,547,684 0%

Operation and Maintenance 8,723,157 11,540,096 8,862,576 47,203,956 47,203,956 0%

Return on Investment Return on Investment1,173,243 1,391,200 1,233,960 5,767,985 5,767,985 0%

Franchise Fee Franchise Fee1,673,314 1,984,775 1,760,373 8,239,978 8,239,978 0%

Non-Operating Expenditures 13,082,628 15,876,429 15,690,179 35,144,150 35,144,150 0%

Total Expenditures 45,738,443 49,646,556 45,977,221 180,903,753 180,903,753 0%

Net Income (Loss) (8,106,906)$ (10,451,243)$ (7,383,488)$ (7,223,969) (7,223,969)

Ending Working Capital and Reserves 65,286,335$ 69,718,787$

1 Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which was estimated in the FY 2017-18 budget process.

17

City of Denton

Water Fund







and Reserves as of 09/30/171

20,851,375$ 23,340,901$

REVENUES:

Water Sales Residential 4,019,558$ 4,634,213$ 4,503,572$ 19,550,225 19,550,225 0%

Water Sales Commercial 4,061,524 4,584,174 4,401,205 17,016,173 17,016,173 0%

Water for Resale 138,317 155,728 1,222,766 553,406 553,406 0%

Other Water 250,548 194,759 317,734 811,832 811,832 0%

Transfers In 1,599,894 1,486,820 1,486,820 5,947,281 5,947,281 0%


Impact Fee Revenue 1,000,800 938,851 939,603 3,755,404 3,755,404 0%

Total Revenues 11,113,917 12,038,295 12,934,853 47,809,321 47,809,321 0% Use of Reserves - - - -

EXPENDITURES:

Personal Service 2,496,006 2,473,986 2,558,827 11,408,173 11,408,173 0%

Purchased Power 281,438 439,855 309,963 1,600,000 1,600,000 0%

Materials and Supplies 299,834 390,664 292,667 1,721,614 1,721,614 0%

Maintenance and Repairs 304,202 252,567 256,357 1,552,572 1,552,572 0%

Insurance 59,737 55,620 55,620 222,481 222,481 0%

Miscellaneous 86,558 92,556 80,676 340,278 340,278 0%

Operations, Services 490,008 679,330 420,502 2,563,509 2,563,509 0%

Capital Outlay 1,981,764 1,459,005 2,197,981 9,062,143 9,062,143 0%

Return on Investment 293,572 352,845 325,216 1,327,607 1,327,607 0%

Franchise Fee 419,390 504,064 464,594 1,896,582 1,896,582 0%

Debt Service 5,505,916 6,497,330 6,497,330 12,640,594 12,640,594 0%

Transfers Out 902,938 868,444 870,659 3,473,768 3,473,768 0%


Net Income (Loss) (2,007,446)$ (2,027,971)$ (1,395,929)$ - -

Ending Working Capital

and Reserves 20,851,375$ 23,340,901$

1 The Beginning Working Capital balance excludes $6,650,271 of Impact Fee Reserves and $250,000 for Development Plan Line Reserves.

budget process.

2 Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which was estimated in the FY 2017-18

18

City of Denton

Wastewater Fund




DESCRIPTION Y-T-D Y-T-D Y-T-D BUDGET2PROJECTION PROJECTION



15,926,057$ 17,861,887$

REVENUES:

Residential Fees 2,791,911$ 2,772,439$ 2,902,097$ 11,103,223 11,103,223 0%

Commercial Fees 3,155,613 3,166,292 3,150,476 12,306,031 12,306,031 0%

Effluent Irrigation Fees 20,369 13,262 27,709 61,530 61,530 0%

Wholesale Fees 157,513 156,339 138,085 667,670 667,670 0%

Other Wastewater Fees 379,455 383,211 277,695 1,642,282 1,642,282 0%

Drainage Fees 1,132,638 1,170,724 1,160,122 4,673,206 4,673,206 0%

Transfer In 160,205 164,758 164,757 659,030 659,030 0%


Impact Fee Reserves 880,704 500,000 500,400 2,000,000 2,000,000 0%

Total Revenues 8,709,245 8,356,400 8,373,081 33,230,472 33,230,472 0%

EXPENDITURES:


Purchased Power 197,118 290,831 252,338 1,221,000 1,221,000 0%

Materials and Supplies 218,717 165,695 196,588 1,260,309 1,260,309 0%

Maintenance and Repairs 253,629 280,312 265,509 1,464,909 1,464,909 0%

Insurance 46,919 45,123 45,123 180,492 180,492 0%

Miscellaneous 31,540 32,942 35,671 54,631 54,631 0%

Operations, Services 482,426 656,951 420,115 2,212,647 2,212,647 0%

Capital Outlay 3,806,502 2,779,087 1,417,699 6,871,781 6,871,781 0%

Return on Investment 218,838 226,171 222,411 902,326 902,326 0%

Franchise Fee 312,626 323,101 317,730 1,289,037 1,289,037 0%

Debt Service 3,486,541 3,768,607 3,768,607 7,169,780 7,169,780 0%

Transfers Out 849,657 823,098 824,855 3,292,383 3,292,383 0%


Net Income (Loss) (3,074,778)$ (2,722,948)$ (1,335,192)$ (792,569) (792,569)


and Reserves 15,133,488$ 17,069,318$

1 The Beginning Working Capital balance excludes $2,194,686 of Impact Fee Reserves, $1,000,000 for Drainage Reserves,

and $335,000 for Development Plan Line Reserves.

2 Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which was estimated

in the FY 2017-18 budget process.

19

City of Denton

Drainage Operations




DESCRIPTION Y-T-D Y-T-D Y-T-D BUDGET PROJECTION PROJEC TION

REVENUES:

Residential Drainage Fees 435,569$ 438,234$ 438,139$ 1,773,100$ 1,773,100$ 0%

Nonresidential Drainage Fees 697,068 732,543 721,983 2,900,106 2,900,106 0%

Wastewater Resources - 10,950 10,950 43,800 43,800 0%

General Fund Transfer 125,334 106,008 106,007 424,030 424,030 0%

Total Revenues 1,257,971 1,287,735 1,277,079 5,141,036 5,141,036 0%

EXPENDITURES:

Personal Service 362,366 367,023 401,425 1,773,782 1,773,782 0%

Materials and Supplies 8,620 18,958 9,466 82,425 82,425 0%

Maintenance and Repairs 20,820 32,129 21,947 131,300 131,300 0%

Insurance 4,957 6,365 6,365 25,461 25,461 0%

Miscellaneous 2,041 6,176 5,887 16,000 16,000 0%

Operations, Services 67,193 93,237 109,987 549,531 549,531 0%

Capital Outlay 279,413 242,570 200,919 1,281,581 1,281,581 0%

Debt Service 353,763 370,485 370,485 677,790 677,790 0%

Transfer Out 158,798 150,792 150,598 603,166 603,166 0%


Net Income (Loss) -$ -$ -$ -$ -$

20

City of Denton

Solid Waste Fund

Schedule of Revenues and Expenditures - Budget vs Projection (Unaudited)



DESCRIPTION Y-T-D Y-T-D Y-T-D BUDGET2 PROJECTION PROJECTION



8,151,875$ 9,468,891$

REVENUES:

Garbage Fees - Residential 2,749,311$ 2,786,456$ 2,767,275$ 11,341,462 11,341,462 0%

Garbage Fees - Commercial 3,604,045 3,849,964 3,830,542 16,127,040 16,127,040 0%

Landfill Fees 1,480,287 1,685,722 1,435,709 6,836,245 6,836,245 0%

Materials Processing and Mining 24,943 387,585 29,403 1,549,100 1,549,100 0%

Recycling and Public Outreach 217,534 218,868 213,925 874,776 874,776 0%

Site Operations 71,508 207,879 44,234 830,851 830,851 0%

Other Revenue 40,311 110,976 38,610 443,550 443,550 0%


Total Revenues 8,194,140 9,251,203 8,376,705 38,018,024 38,018,024 0%

EXPENDITURES:




Insurance 56,126 58,453 58,408 233,631 233,631 0%

Miscellaneous 32,255 20,644 33,047 74,400 74,400 0%

Operations, Services 1,380,880 1,907,699 1,184,777 7,724,368 7,724,368 0%

Capital Outlay 1,531,192 692,931 - 2,669,510 2,669,510 0%

Debt Service 4,212,877 5,108,893 5,108,893 9,700,467 9,700,467 0%

Franchise Fee 405,617 475,608 418,743 1,900,902 1,900,902 0%

Landfill Closure 66,438 94,764 94,689 378,757 378,757 0%

Transfer Out 620,081 742,098 736,497 2,966,003 2,966,003 0%


Net Income (Loss) (2,897,039)$ (3,072,107)$ (2,102,437)$ (510,062) (510,062)


and Reserves 7,641,813$ 8,958,829$

1 The Beginning Working Capital Reserve excludes $8,654,114 Landfill Closure/Post Closure Reserves.

2 Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which was estimated in the FY 2017-18 budget process.

21

City of Denton

Airport Fund

Schedule of Revenues and Expenditures - Budget vs Projection (Unaudited)






and Reserves as of 09/30/17 2,471,421$ 2,748,875$

OPERATING REVENUES:

Airport Ground Leases 131,021$ 178,431$ 167,014$ 713,154 713,154 0%

FBO Commissions 34,286 49,992 25,170 199,808 199,808 0%

Miscellaneous 13,884 23,173 11,197 92,619 92,619 0%

Total Operating Revenues 179,191 251,596 203,381 1,005,581 1,005,581 0%

OPERATING EXPENDITURES:

Personal Service 162,272 132,723 121,413 530,482 530,482 0%



Insurance 5,401 5,460 5,456 21,823 21,823 0%

Miscellaneous 210 300 156 1,200 1,200 0%

Operations 30,686 59,589 22,818 238,160 238,160 0%

Transfers Out - Operating 117,556 136,877 129,960 547,070 547,070 0%

Total Operating Expenses 339,104 372,952 287,959 1,490,628 1,490,628 0%

Operating (Loss) (159,913) (121,356) (84,578) (485,047) (485,047)

NON-OPERATING REVENUES:


Gas Well Royalties 55,057 118,627 38,651 474,130 474,130 0%

Total Non-Operating Revenues 63,377 124,882 52,398 499,130 499,130 0%

NON-OPERATING EXPENDITURES:

Transfers Out - Capital - 56,295 - 225,000 225,000 0%

Total Non-Operating Expenses - 56,295 - 225,000 225,000 0%

Non-Operating Income (Loss) 63,377 68,587 52,398 274,130 274,130

Net Income (Loss) (96,536)$ (52,769)$ (32,180)$ (210,917) (210,917)

Ending Working Capital 2,260,504$ 2,537,958$

1 Annual adopted budget as amended or modified. Beginning Working Capital and Reserves represents the amount which was estimated in the FY 2017-18 budget process.

22

City of Denton

Street Improvement Fund

Schedule of Expenditures - Budget vs Projection (Unaudited)






and reserves as of 9/30/2017 1,253,048$ 1,158,667$

REVENUES:

Franchise Fees 2,017,003$ 3,121,509$ 2,144,267$ 12,476,060 12,476,060 0%

Street Cuts 65,218 89,322 75,252 357,000 357,000 0%

Investment Income 4,682 2,502 - 10,000 10,000 0%

Transfers In 241,069 279,757 258,645 1,118,135 1,118,135 0%

Total Revenues 2,327,972 3,493,090 2,478,164 13,961,195 13,961,195 0%

EXPENDITURES:

Personal Service 732,190 860,680 860,520 3,439,984 3,439,984 0%


Maintenance and Repairs 838,740 1,706,970 1,427,229 8,041,573 8,041,573 0%

Insurance 10,756 12,933 12,923 51,693 51,693 0%

Miscellaneous 3,609 1,251 4,292 5,000 5,000 0%

Operations, Services 202,898 175,213 133,274 700,302 700,302 0%

Transfer Out 450,505 714,231 753,758 1,635,493 1,635,493 0%


Net Income (Loss) 61,386$ 10$ (738,042)$ - -

Ending Fund Balance 1,253,048$ 1,158,667$

1Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which was estimated in the FY 2017-18 budget process.

23

City of DentonGrantsSchedule of Expenditures - Budget vs Projection (Unaudited)For the Period Ended December 31, 2017

GRANT DESCRIPTION

EXPENDITURES

AS OF 9/30/20172

CURRENT

Y-T-D

ANNUAL

BUDGET

ANNUAL

PROJECTION

BUDGET VS

PROJECTION

FY 2017-18 Budget

US Dept of HUD -

Community Development Block Grant(CDBG) 2,775,354$ 103,859$ 1,893,649$ 600,000$ -68%

US Dept of HUD -

HOME Investment Partnership Program 2,816,384 180,307 1,046,759 450,000 -57%

Community Development1

5,591,738 284,166 2,940,408 1,050,000 -64%

TxDot STEP Comprehensive Grant - 15,920 91,464 91,464 0%

2016 UASI - - 130,000 130,000 0%

2017 UASI - - 98,200 98,200 0%

Emergency Management Performance Grant - - 46,825 46,825 0%

2016 Tobacco Enforcement Grant - - 7,350 - -100%

Staffing for Adequate Fire & Emergency Response - - 419,971 419,971 0%

Public Safety - 15,920 793,810 786,460 -1%

Airport Maintenance (RAMP) Grant - - 50,000 50,000 0%

TxDot-RTR-Mayhill Rd-IH35 E to US 380 14,203,683 3,358,118 33,197,821 18,000,000 -46%

TxDot-RTR-Bonnie Brae Rd-IH35 E to US 377 9,189,164 707,876 39,579,553 7,000,000 -82%

County-Traffic Signal-US 380-Cindy Lane - - 53,865 - -100%

TxDot-IH35E at Loop 288/Lillian Miller Pkwy - - 37,000 37,000 0%

TxDot-RTR-McKinney (Formerly FM426) 138 686 18,267,303 1,300,000 -93%

TxDot-Hickory Creek FM2181-FM2499 2,294 - 2,397,706 400,000 -83%

NCTCOG Regional HHW Drop-Off Facility Project - - 55,898 - -100%

Bicycle & Pedestrian Projects Grant - - 1,500,000 195,000 -87%

Transportation1

23,395,279 4,066,680 95,139,146 26,982,000 -72%

Interlibrary Loan Program (ILL) - - 25,000 25,000 0%

TIFMAS Training Tuition Grant - - 10,000 10,000 0%

Other - - 35,000 35,000 0%

Total FY 2017-18 Budget 28,987,017 4,366,766 98,908,364 28,853,460 -71%

New Awards

Federal Equitable Sharing - 5,149 5,149 5,149 0%

Chapter 59 Asset Forfeitures - 15,664 15,664 15,664 0%

U.S. Marshals Violent Offenders Task Force - 5,814 5,814 5,814 0%

PD-Law Enforcement Officer Standards &

Education - 3,942 3,942 3,942 0%

Sexual Assault Nurse Examiners (SANE)

Reimbursement - 13,457 13,457 13,457 0%

2017 SHSP Ballistic Blankets - - 3,000 3,000 0%

2017 SHSP Night Vision - - 14,200 14,200 0%

Public Safety - 44,026 61,226 61,226 0%

24

City of DentonGrantsSchedule of Expenditures - Budget vs Projection (Unaudited)For the Period Ended December 31, 2017

GRANT DESCRIPTION

EXPENDITURES

AS OF 9/30/20172

CURRENT

Y-T-D

ANNUAL

BUDGET

ANNUAL

PROJECTION

BUDGET VS

PROJECTION

TxDot-N TX Blvd Roundabout 11,805 - 1,988,195 400,000 -80%

TxDot-RTR-ITS COMM Trunk Line 253,372 14,442 1,318,228 1,000,000 -24%

TxDot-US 77 At Nicosia Street - 3,100 38,240 38,240 0%

TxDot-FM 2499 At State School Road - - 21,597 21,597 0%

TxDot-FM 2499 At Unicorn Lake - - 21,638 21,638 0%

Transportation1

265,177 17,542 3,387,898 1,481,475 -56%

TxDot NW Trail Extension Grant 1,086,685 119,353 212,273 212,273 0%

Parks and Recreations 1,086,685 119,353 212,273 212,273 0%

Total New Awards 1,351,862 180,921 3,661,397 1,754,974 -52%

TOTALS 30,338,879$ 4,547,687$ 102,569,761$ 30,608,434$ -70%

1 This grant amount will be spent over several years and the fiscal year 2017-18 projections are just estimated expenditure in the one year.

Remaining grant amounts will be spent in future fiscal year.2 A portion of the grants presented cover multiple years.

25

Section 3


December 2017

REVENUE & ECONOMIC ANALYSIS

26

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.

27

National Economic TrendsPeriod Ending December 31, 2017

Gross Domestic Product (GDP)The first measure of fourth quarter GDP fellshort of forecast with a +2.6% annualizedgrowth rate. Although hopes for three straightquarters of +3.0% growth didn’t materialize,the overall growth rate for 2017 was +2.5%,the strongest year of the recovery thus far.Within the composite, personal consumptionclimbed +3.8%, the biggest increase since Q22016, business investment rose +6.8%, andresidential spending jumped +11.6%. Importsrose +13.9% while exports gained just +6.9%.The resulting trade gap extracted 1.13% fromoverall GDP. Inventory adjustments shavedanother 0.67%. Looking forward into the firstquarter of 2018, inventories are likely to add,rather than subtract from growth, while the taxreform bill is expected to incentivizebusinesses to expend labor and productivity.

Nonfarm PayrollsNonfarm payrolls rose by +148k jobs during themonth of December, falling short of both the+190k median forecast and the revised +252kNovember gain. Revisions to the two previousmonths subtracted -9k, bringing the 2017average payroll gain down to +171k, theslowest pace since 2010.

Headline unemployment (calculated through aseparate household survey) held steady at a 17-year low of 4.1% in December, but the broaderU6 unemployment rate crept up from 8.0% to8.1%. Average hourly earnings climbed by+0.3% in December after slipping by -0.1% inthe previous month, allowing the year-over-year wage gain to hold steady at a mediocre+2.5%.

28

Inflation

The overall consumer price index (CPI) roseby just +0.1% in December as energy pricesfell -1.2%, but rising housing costs pushedcore CPI up +0.3%. The year-over-yearheadline CPI slipped from +2.2% to +2.1%,but y-o-y core CPI climbed from +1.7% to+1.8%. The Fed’s preferred measure, PCEcore, rose for the fourth straight month,climbing from +1.49% to 1.53% inDecember, still well below the recent peak of+1.89% in Jan 2017.

Overall, the rate of consumer inflation(although still below the Fed’s +2.0% target)is creeping gradually higher as both thedomestic and global economies gain strength.As long as the inflation trend is upward, theFOMC should remain on its tightening path.

Retail Sales

Retailers declared 2017 as the best holidaybuying season in seven years.

December retail sales rose by +0.4%.Although slightly below forecasts, theheadline masked stronger underlying details.

Retail sales ex auto and gas also rose +0.4%in December, but November’s number wasboosted from +1.0% to +1.3%. The resulting+8.4% annualized quarterly gain was thelargest in 12 years.

The retail sales “control group,” which feedsinto the GDP calculations, also saw a bigrevision with November’s original +0.8%gain revised upward to +1.4% whileDecember’s increase came in at a respectable+0.3%.

29

Texas Home SalesTexas home sales fell by -11.3% from the thirdto the fourth quarter, but still grew +6.5% ona year-over-year basis. The average Texashome price in December was $281k, a +5%increase over the previous year, but downfrom the high of $287.1k six months earlier.

In Denton County unit home sales fell -19.2%during the quarter, but rose +5.5% over thesame period a year ago. The average homeprice in December was $353.7k, a +9.7% year-over-year increase and the highest averagerecorded in any single month. Total DentonCounty listings in December were 2,331,about +11% higher than a year ago. Theavailable inventory at year end was just 1.9months; very close to the 1.7 month historicallow.

The paper was prepared by FirstSouthwest Asset Management, is intended for educational and informational purposes only and does not constitute legal orinvestment 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 wasobtained 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 establishstandards of care applicable to any attorney or advisor in any particular circumstances. The statements within constitute the views of FirstSouthwest AssetManagement as of the date of the report and may differ from the views of other divisions/departments of Hilltop Securities. In addition, the views are subjectto change without notice. This paper represents historical information only and is not an indication of future performance.

30

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 3.0% increase from the prior quarter at the national level and

a 1.4% increase at the state level. Staff has rated this outlook as Cautious.

Source: U.S. Department of Energy

$0

$2

$4

$6

$8

$10

$12

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

1Q '14 3Q '14 1Q '15 3Q '15 1Q '16 3Q '16 1Q '17 3Q '17 1Q '18M

illio

ns

Do

llars

Fuel Prices

Sales Tax Texas Fuel Prices US Fuel Prices

31

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 1st Quarter of 2017-18 shows an increase of 1.9% over the prior quarter and an increase of 8.2% over the 1st

Quarter of 2016-17. Staff has rated this indicator as Negative.

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.

Source: American City and County Magazine

225.00

230.00

235.00

240.00

245.00

250.00

1Q '16 2Q '16 3Q '16 4Q '16 1Q '17 2Q '17 3Q '17 4Q '17 1Q '18

Municipal Cost Index

32

Hotel Occupancy Tax Analysis Outlook Positive

1st Quarter FY 2017-18

Actual Y-T-D

Occupancy Tax Revenue: 586,357$ 586,357$

FY 2017-18 Budget 685,694$ 685,694$

Over (Under) Budget (99,337)$ (99,337)$

Hotel Occupancy Tax Budget: 3,052,174$

3,052,174$

Variance: -$

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 1st Quarter of FY 2018 was 14% less than budget but 5% more than the prior year's actual.

Staff has rated the outlook for this economic indicator as Positive.

FISCAL YEAR FORECAST

End of Year Projection:

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

1st Qtr 2nd Qtr 3rd Qtr 4th Qtr

Hotel Occupancy Tax Collections

FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18

33

Sales and Use Tax Analysis Outlook Positive

1st Quarter FY 2017‐18Actual Y‐T‐D

Revenue: Gross Sales Tax Municipal Operations 437,767$ 437,767$ General Retail & Others 9,636,934 9,636,934 Comptroller Fees (189,035) (189,035) Amount Retained (185,255) (185,255) Total Revenue 9,700,411$ $9,700,411

Expenses: Economic Incentives Denton Crossing1 157,122$ 157,122$ Unicorn Lake2 21,733 21,733 Rayzor Ranch3 370,639 370,639 Golden Triangle4 39,325 39,325 Total Expenses 588,819$ 588,819$

Net Total 9,111,592 9,111,592

FY 2017‐18 Budget 8,576,527 8,576,527

Over(Under) Budget 535,065$ 535,065$

Sales Tax Budget: 36,181,385$ Year End Projection: 36,181,385

Variance to Original Budget: ‐$

Economic Development Expenditure Budget: 2,373,819$ Year End Projection: 2,373,819

Variance to Original Budget: ‐$

* Economic Incentive actuals are through October 2017 with budget amount for November and December.1. Incentive is 33% of sales taxes. For the 1st quarter sales tax equaled $476,127.2. Incentive is 33% of sales taxes. For the 1st quarter sales tax equaled $65,858.3. Incentive is 50% of sales taxes. For the 1st quarter sales tax equaled $741,2784. Incentive is 50% of sales taxes. For the 1st quarter sales tax equaled $78,650.

Description: Tax imposed on all retail sales, leases, and rentals of most goods, as well as taxable services. The total taxrate 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 thedelivery of services to the community. Sales tax revenues through the 1st quarter of FY 2018 compared to revenuesfrom the prior year 1st quarter shows a 1.65% increase, and compared to the budget it is 6.24% above. Staff has ratedthis indicator as Positive.

$0.0$1.0$2.0$3.0$4.0$5.0$6.0$7.0$8.0$9.0

$10.0

1st Qtr 2nd Qtr 3rd Qtr 4th Qtr

Gross Sales Tax Collections (Millions)

FY 2013‐14 Actual FY 2014‐15 Actual FY 2015‐16 Actual FY 2016‐17 Actual FY 2017‐18 Actual

34

Certificates of Occupancy Outlook Cautious

Source: City of Denton's Development Services Department.

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 31.8% from the prior quarter and increased 2.34% from the

1st Quarter of 2017. Staff has rated the outlook for this revenue indicator as Cautious.

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

1Q'13

2Q'13

3Q'13

4Q'13

1Q'14

2Q'14

3Q'14

4Q'14

1Q'15

2Q'15

3Q'15

4Q'15

1Q'16

2Q'16

3Q'16

4Q'16

1Q'17

2Q'17

3Q'17

4Q'17

1Q'18

Certificates of Occupancy

35

Residential Permits Outlook Cautious

Source: City of Denton's Development Services Department.

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 28.1% from the prior quarter and increased 181.7% from the 1st

Quarter of 2017. Staff has rated the outlook for this revenue indicator as Cautious

0.0

50.0

100.0

150.0

200.0

250.0

1Q'13

2Q'13

3Q'13

4Q'13

1Q'14

2Q'14

3Q'14

4Q'14

1Q'15

2Q'15

3Q'15

4Q'15

1Q'16

2Q'16

3Q'16

4Q'16

1Q'17

2Q'17

3Q'17

4Q'17

1Q'18

Residential Permits

36

Texas Leading Indicators Index Outlook Positive

Source: Federal Reserve Bank of Dallas

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 an increase in the state's rate of growth. The index increased 1.0% from the prior quarter and

increased 4.07% from the 1st Quarter of 2016-17. Staff has rated this indicator as Positive

100.0

105.0

110.0

115.0

120.0

125.0

130.0

135.0

140.0

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

3Q'14

1Q'15

3Q'15

1Q'16

3Q'16

1Q'17

3Q'17

1Q'18

Texas Leading Indicators Index

37

Unemployment Rate Index Outlook Positive

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 is at 2.6% for the 1st Quarter.

The unemployment rates for most of the other reported sectors were either down or flat from the prior quarter. As

a result of the downward trend since the high of the 1st Quarter of 2011, staff has rated the outlook for this revenue

indicator as Positive.

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.

Source: Federal Reserve Bank of Dallas, U.S. Bureau of Labor Statistics, and Texas Workforce Commission

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

1Q '12 3Q '12 1Q '13 3Q '13 1Q '14 3Q '14 1Q '15 3Q '15 1Q '16 3Q '16 1Q '17 3Q '17 1Q '18

Unemployment Rate Index

Dallas-Plano-Irving MD Denton Texas U6 Unemployment United States

38

Section 4


December 2017

INVESTMENT REPORT

39

1st Fiscal Quarter 2018 - December 31, 2017 Page 1

INVESTMENT POOLPolicy

Par Market Book Unrealized Max. Benchmark

Portfolio: Value Value Value Gain/(Loss)1

WAM WAM YTM Yield*

Investment Pool 664,555,916$ 661,960,386$ 664,403,888$ (2,443,502)$ 329 550 1.29% 1.20%

*Twelve month moving average of a one yearU.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 54,000,000 53,875,122 53,988,660 (113,538) 149 1.11% 8.13% 100.00%

U.S. Federal Agencies 338,756,000 336,610,728 338,795,485 (2,184,757) 453 1.23% 50.99% 100.00%

Municipal Bonds 22,800,000 22,686,733 22,813,784 (127,051) 242 1.09% 3.43% 15.00%

Certificates of Deposit 136,000,000 136,000,000 136,000,000 - 347 1.52% 20.47% 35.00%

Commercial Paper 46,000,000 45,787,887 45,806,043 (18,156) 98 1.57% 6.90% 15.00%

Local Government Investment Pools 39,424,172 39,424,172 39,424,172 - 1 1.18% 5.93% 50.00%

Insured Cash Sweep Savings Deposits 25,000,000 25,000,000 25,000,000 - 1 1.23% 3.76% 15.00%

Demand Deposits 2,575,744 2,575,744 2,575,744 - 1 0.60% 0.39% -

Total Portfolio 664,555,916$ 661,960,386$ 664,403,888$ (2,443,502)$ 329 1.29% 100.00% -

Current 3 Months Ago 3 Month 1 Year Ago

Investment Pool Comparisons: 12/31/2017 9/30/2017 Difference 12/31/2016

Par Value 664,555,916$ 707,614,071$ (43,058,155)$ 504,051,706$

Market Value 661,960,386$ 706,581,905$ (44,621,519)$ 504,248,614$

Book Value 664,403,888$ 707,643,535$ (43,239,647)$ 504,835,388$

Unrealized Gain(Loss) (2,443,502)$ (1,061,630)$ (1,381,872)$ (586,774)$

Weighted Average Maturity 329 382 (53) 299

Yield to Maturity 1.29% 1.25% 0.04% 0.95%

Portfolio Composition:

U.S. Treasuries 8.13% 7.64% 0.49% 7.41%

U.S. Federal Agencies 50.99% 49.86% 1.13% 37.50%

Municipal Bonds 3.43% 3.23% 0.20% 6.99%

Certificates of Deposit 20.47% 21.34% -0.87% 29.71%

Commercial Paper 6.90% 5.63% 1.27% 7.90%

Local Government Investment Pools 5.93% 8.47% -2.54% 9.86%

Insured Cash Sweep Savings Deposits 3.76% 3.53% 0.23% 0.00%

Demand Deposits 0.39% 0.30% 0.09% 0.63%

Bank Collateral Review**: Institution Collateral Type Market Value Collected Balance Collateral Ratio

Wells Fargo Demand Deposits BNY Mellon U.S. Agency MBS 35,754,621$ 2,019,881$ 1770.13%

LegacyTexas Bank Certificates of Deposit*** Fed Home Loan Bank Standby LOC 65,220,000$ 62,996,445$ 103.53%

Independent Bank Certificates of Deposit Fed Home Loan Bank Standby LOC 22,100,000$ 20,356,506$ 108.56%

**Does not include FDIC insurance

***Formerly, ViewPoint Bank

Depository Ledger Balance Review: Institution Account Type Beginning Bal. Deposits Ending Bal.

Wells Fargo Bank Checking 2,092,150$ 87,127,407$ 2,575,744$

Compliance Statement & Review:

CITY OF DENTON : QUARTERLY INVESTMENT REPORT

1 Year Ago

Difference

160,504,210$

1Unrealized 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.

30

0.34%

-3.56%

157,711,772$

159,568,500$

(1,856,728)$

0.72%

Withdrawals

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 2256.023).

Reviewer: Antonio Puente, Jr., CGFO

13.49%

-9.24%

-0.24%

Pledge Required

-1.00%

> 102%

> 100%

> 100%

-3.93%

3.76%

ANTONIO PUENTE, JR. CAROLINE FINLEY

Director of Finance Treasury Administrator

(86,643,813)$

Preparer: Caroline Finley

40


INVESTMENT POOL

Current 3 Months Ago 3 Month 1 Year Ago 1 Year

12/31/2017 9/30/2017 Difference 12/31/2016 Difference

Par Value - U.S. Treasuries 54,000,000$ 54,000,000$ -$ 37,000,000$ 17,000,000$

Par Value - U.S. Federal Agencies 338,756,000 352,756,000 (14,000,000) 189,000,000 149,756,000

Par Value - Municipal Bonds 22,800,000 22,800,000 - 35,060,000 (12,260,000)

Certificates of Deposit 136,000,000 151,000,000 (15,000,000) 150,000,000 (14,000,000)

Par Value - Commercial Paper 46,000,000 40,000,000 6,000,000 40,000,000 6,000,000

Local Government Investment Pools 39,424,172 59,924,172 (20,500,000) 49,800,000 (10,375,828)

Insured Cash Sweep Savings Deposits 25,000,000 25,000,000 - - 25,000,000

Demand Deposits 2,575,744 2,133,899 441,845 3,191,706 (615,962)

Total Par Value 664,555,916$ 707,614,071$ (43,058,155)$ 504,051,706$ 160,504,210$

Market Value - U.S. Treasuries 53,875,122$ 54,005,424$ (130,302)$ 37,414,969$ 16,460,153$

Market Value - U.S. Federal Agencies 336,610,728 351,938,910 (15,328,182) 188,792,133 147,818,595

Market Value - Municipal Bonds 22,686,733 22,733,295 (46,562) 35,156,817 (12,470,084)


Market Value - Commercial Paper 45,787,887 39,846,205 5,941,682 39,892,989 5,894,898



Demand Deposits 2,575,744 2,133,899 441,845 3,191,706 (615,962)

Total Market Value 661,960,386$ 706,581,905$ (44,621,519)$ 504,248,614$ 157,711,772$

Book Value - U.S. Treasuries 53,988,660$ 54,062,054$ (73,394)$ 37,377,902$ 16,610,758$

Book Value - U.S. Federal Agencies 338,795,485 352,831,583 (14,036,098) 189,296,161 149,499,324

Book Value - Municipal Bonds 22,813,784 22,841,978 (28,194) 35,284,805 (12,471,021)


Book Value - Commercial Paper 45,806,043 39,849,849 5,956,194 39,884,814 5,921,229



Demand Deposits 2,575,744 2,133,899 441,845 3,191,706 (615,962)

Total Book Value 664,403,888$ 707,643,535$ (43,239,647)$ 504,835,388$ 159,568,500$

Accrued Interest 3,724,093$ 3,052,951$ 671,142$ 3,028,997$ 695,096$

Cash Value - 665,684,479$ 709,634,856$ (43,950,377)$ 507,277,611$ 158,406,868$

(Total Market Value + Accrued Interest)

Unrealized Gain/(Loss) (2,443,502)$ (1,061,630)$ (1,381,872)$ (586,774)$ (1,856,728)$

Change in Fair Value since 9/30/17 - (1,385,383)$ (1,586,781)$ 201,398$ (978,005)$ (407,378)$

(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

income, 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 meet these obligations and to minimize

potential liquidation losses, the dollar-weighted stated average 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


INVESTMENT POOL

Current 3 Months Ago 1 Year Ago

Summary By Security Type: 12/31/2017 9/30/2017 12/31/2016

U.S. Treasuries - Coupon 53,988,660$ 54,062,054$ 37,377,902$

U.S. Federal Agencies - Coupon 308,038,429 322,073,977 179,296,985

U.S. Federal Agencies - Callable 30,757,056 30,757,606 9,999,176

Municipal Bonds - Coupon 22,813,784 22,841,978 35,284,805

Certificates of Deposit - CDARS 54,000,000 59,000,000 55,000,000

Certificates of Deposit - SLOC 82,000,000 92,000,000 95,000,000

Commercial Paper - Discount 45,806,043 39,849,849 39,884,814

Local Government Investment Pools 39,424,172 59,924,172 49,800,000

Insured Cash Sweep Savings Deposits 25,000,000 25,000,000 -

Demand Deposits 2,575,744 2,133,899 3,191,706

Total Book Value 664,403,888$ 707,643,535$ 504,835,388$

Objective:


Summary By Security Type: 12/31/2017 9/30/2017 12/31/2016

U.S. Treasuries - Coupon 8.13% 7.64% 7.41%

U.S. Federal Agencies - Coupon 46.36% 45.51% 35.52%

U.S. Federal Agencies - Callable 4.63% 4.35% 1.98%

Municipal Bonds - Coupon 3.43% 3.23% 6.99%

Certificates of Deposit - CDARS 8.13% 8.34% 10.89%

Certificates of Deposit - SLOC 12.34% 13.00% 18.82%

Commercial Paper - Discount 6.90% 5.63% 7.90%

Local Government Investment Pools 5.93% 8.47% 9.86%

Insured Cash Sweep Savings Deposits 3.76% 3.53% 0.00%

Demand Deposits 0.39% 0.30% 0.63%

Total 100.00% 100.00% 100.00%


The portfolio is restricted to U.S. Treasuries and agency securities (maturing in less than five years); state and locally issued Texas municipal

bonds rated AA or better (maturing in less than three years); insured, collateralized, or standby letter of credit backed 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 government money market mutual funds (weighted average

maturity of less than 60 days).

U.S. Treasuries ‐Coupon9.27%

U.S. Federal Agencies ‐Coupon52.89%

U.S. Federal Agencies ‐Callable5.28%

Municipal Bonds ‐Coupon3.92%

Certificates of Deposit ‐ CDARS

9.27%Commercial Paper ‐Discount7.86%

Local Government Investment Pools

6.78%

Insured Cash Sweep Savings Deposits…

Demand Deposits0.44%

Current12/31/2017

42


INVESTMENT POOL


Summary By Issuer: 12/31/2017 9/30/2017 12/31/2016

CDARS CDs 54,000,000$ 59,000,000$ 55,000,000$

LEGACYTEXAS BANK CDs* 62,000,000 62,000,000 62,000,000

INDEPENDENT BANK CDs 20,000,000 30,000,000 33,000,000

U.S. TREASURY 53,988,660 54,062,054 37,377,902

FFCB 79,025,848 84,030,979 36,995,886

FHLB 130,105,703 130,125,419 56,026,810

FHLMC 47,914,577 52,934,154 44,186,681

FNMA 81,749,357 85,741,031 52,086,784

DALLAS, TX WTR & SWR REV BDS 10,000,000 10,000,000 10,000,000

TEXAS A&M UNIV REV BDS 4,500,000 4,500,000 9,509,793

WILLIAMSON COUNTY, TX GEN OBG BDS - - 1,616,402

LUBBOCK, TX GO REFUNDING BDS 3,300,517 3,301,573 3,304,742

UNIVERSITY OF HOUSTON, TX REV BDS 5,013,267 5,040,405 5,121,818

MCKINNEY, TX GENERAL OBG BONDS - - 1,202,571

TEXAS SCHOOL DIST GEN OBG BONDS - - 4,529,479

JP MORGAN SECURITIES LLC 25,911,014 24,870,611 19,970,583

TOYOTA MOTOR CREDIT CORP 14,919,698 4,990,263 19,914,231

NESTLE FINANCE INTL LTD - 9,988,975 -

ING (U.S.) FUNDING LLC 4,975,331 - -

TEXSTAR 39,424,172 59,924,172 49,800,000

INSURED CASH SWEEP SAVINGS 25,000,000 25,000,000 -

WELLS FARGO DEMAND DEPOSITS 2,575,744 2,133,899 3,191,706

Total Book Value 664,403,888$ 707,643,535$ 504,835,388$

Objective:


Summary By Issuer: 12/31/2017 9/30/2017 12/31/2016

CDARS CDs 8.13% 8.34% 10.89%

LEGACYTEXAS BANK CDs* 9.33% 8.76% 12.28%

INDEPENDENT BANK CDs 3.01% 4.24% 6.54%

U.S. TREASURY 8.13% 7.64% 7.41%

FFCB 11.89% 11.87% 7.33%

FHLB 19.58% 18.39% 11.10%

FHLMC 7.21% 7.48% 8.75%

FNMA 12.30% 12.12% 10.32%

DALLAS, TX WTR & SWR REV BDS 1.51% 1.41% 1.98%

TEXAS A&M UNIV REV BDS 0.68% 0.64% 1.89%

WILLIAMSON COUNTY, TX GEN OBG BDS 0.00% 0.00% 0.32%

LUBBOCK, TX GO REFUNDING BDS 0.50% 0.47% 0.65%

UNIVERSITY OF HOUSTON, TX REV BDS 0.75% 0.71% 1.01%

MCKINNEY, TX GENERAL OBG BONDS 0.00% 0.00% 0.24%

TEXAS SCHOOL DIST GEN OBG BONDS 0.00% 0.00% 0.90%

JP MORGAN SECURITIES LLC 3.90% 3.51% 3.96%

TOYOTA MOTOR CREDIT CORP 2.25% 0.71% 3.94%

NESTLE FINANCE INTL LTD 0.00% 1.41% 0.00%

ING (U.S.) FUNDING LLC 0.75% 0.00% 0.00%

TEXSTAR 5.93% 8.47% 9.86%

INSURED CASH SWEEP SAVINGS 3.76% 3.53% 0.00%

WELLS FARGO DEMAND DEPOSITS 0.39% 0.30% 0.63%

Total 100.00% 100.00% 100.00%

*Formerly, ViewPoint Bank


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 (including standby letters of credit), 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 and 15% savings deposit restrictions. Some investment types may be further limited.

CDARS CDs, 8.13%

LEGACYTEXAS BANK CDs, 9.33%

INDEPENDENT BANK CDs, 3.01%

U.S. TREASURY, 8.13%

FFCB, 11.89%

FHLB, 19.58%

FHLMC, 7.21%

FNMA, 12.30%

DALLAS, TX WTR & SWR REV BDS, 1.51%TEXAS A&M UNIV REV BDS, 0.68%

LUBBOCK, TX GO REFUNDING BDS, 0.50%UNIVERSITY OF HOUSTON, TX REV BDS, 0.75%

JP MORGAN SECURITIES LLC, 3.90%

TOYOTA MOTOR CREDIT CORP, 2.25%

ING (U.S.) FUNDING LLC, 0.75%

INSURED CASH SWEEP SAVINGS, 3.76%TEXSTAR, 5.93%

WF DEMAND DEPOSITS, 0.39%

Current12/31/2017

43


INVESTMENT POOL


Maturity Time Frame: 12/31/2017 9/30/2017 12/31/2016

00-03 Months 182,299,916$ 136,058,071$ 149,191,706$

03-06 Months 100,500,000 115,300,000 63,000,000

06-12 Months 87,000,000 137,500,000 81,060,000

12-24 Months 200,000,000 200,000,000 172,800,000

24 Months & Over 94,756,000 118,756,000 38,000,000

Total Par Value 664,555,916$ 707,614,071$ 504,051,706$

Objective:


Maturity Time Frame: 12/31/2017 9/30/2017 12/31/2016

00-03 Months 27.43% 19.23% 29.60%

03-06 Months 15.12% 16.30% 12.50%

06-12 Months 13.09% 19.43% 16.08%

12-24 Months 30.10% 28.26% 34.28%

24 Months & Over 14.26% 16.78% 7.54%

Total 100.00% 100.00% 100.00%


The risk of market price volatility is minimized through maturity diversification. Investment maturities are staggered to provide cash flows

based on the anticipated needs of the City. Liquidity is achieved by matching investment maturities with forecasted cash disbursements

and by investing in securities with active secondary markets. Short-term local government investment pools and government money

market mutual funds help to provide daily liquidity and may be utilized as a competitive alternative to other fixed income investments.

$0

$50,000,000

$100,000,000

$150,000,000

$200,000,000

$250,000,000

$300,000,000

$350,000,000

$400,000,000

$450,000,000

$500,000,000

$550,000,000

$600,000,000

$650,000,000

$700,000,000

$750,000,000


00-06 Months 06-12 Months 12-24 Months 24 Months & Over

44


ECONOMIC SUMMARYInterest Rate History

Source: U.S. Federal Reserve Statistical

Release (H.15)

Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15

Market Sector: Avg Avg Avg Avg Avg Avg Avg Avg Avg Avg Avg Avg

Fed Funds (effective) 0.16% 0.14% 0.09% 0.08% 0.09% 0.08% 0.10% 0.09% 0.12% 0.11% 0.13% 0.14%

3-Month U.S. T-Bill 0.07% 0.09% 0.05% 0.02% 0.07% 0.05% 0.04% 0.02% 0.03% 0.03% 0.02% 0.02%

2-Year U.S. T-Note 0.26% 0.26% 0.33% 0.40% 0.34% 0.40% 0.45% 0.57% 0.64% 0.64% 0.69% 0.71%

Portfolio Benchmark* 0.18% 0.18% 0.16% 0.15% 0.13% 0.13% 0.12% 0.12% 0.12% 0.15% 0.18% 0.24%

Portfolio Yield 0.52% 0.50% 0.48% 0.49% 0.50% 0.49% 0.49% 0.51% 0.55% 0.57% 0.57% 0.65%

Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18

Market Sector: Avg Avg Avg Avg Avg Avg Avg Avg Avg Avg Avg Avg

Fed Funds (effective) 0.24% 0.36% 0.38% 0.40% 0.54% 0.79% 1.04% 1.15% 1.30%

3-Month U.S. T-Bill 0.23% 0.30% 0.27% 0.29% 0.51% 0.75% 1.00% 1.05% 1.32%

2-Year U.S. T-Note 0.98% 0.88% 0.73% 0.77% 1.20% 1.31% 1.34% 1.38% 1.84%

Portfolio Benchmark* 0.32% 0.41% 0.49% 0.54% 0.61% 0.69% 0.83% 1.00% 1.20%

Portfolio Yield 0.72% 0.79% 0.81% 0.90% 0.95% 1.07% 1.16% 1.25% 1.29%

*Twelve month moving average of a one year

U.S. T-bill yield

Fiscal Year:

2017-2018

2016-2017

2015-2016

2014-2015

2013-2014

2012-2013

QUARTERLY COMMENTARY

December 31, 2017Source: First Southwest Asset Management

Economic Summary & TexSTAR Monthly

Newsletter

1,175,753$

612,750$

2,763,136$

-$ -$

2,743,856$ 1,771,205$

1,680,154$

1,703,496$

2,298,785$

2,276,341$

4,734,315$ 6,999,226$

3,961,971$

Oct - Dec Oct - Mar Oct - Jun Oct - Sep

Fiscal Year 2015-2016 Fiscal Year 2016-2017 Fiscal Year 2017-2018

The fourth calendar quarter was marked by both hurricane-tainted economic numbers and the much anticipated tax reform act

signed into law on December 22nd. The bill signed into law by President Trump called the "Tax Cuts and Jobs Act" is expected

to fuel the economy in the near term at an estimated cost of roughly $1.5 trillion over 10 years. Another major theme was the

Fed. The Federal Open Market Committee (FOMC) raised the overnight fed funds rate by 25 basis points in a 7-2 vote. This

brings the fed funds targeted range to 1.25 - 1.50%. The committee expects 3 more rate hikes in 2018. According to the

Bloomberg economist survey taken in early January, the median forcast for Q4 2017 real GDP is 2.4%, followed by 2.6%, 2.5%

and 2.4% for the next three quarters.

Fiscal Year to Date Earnings

3 Months 6 Months 9 Months 12 Months

849,368$

613,879$

568,825$

1,228,059$

1,121,491$

1,177,337$

2,695,211$

2,138,420$ -$

1,874,847$


Fiscal Year 2012-2013 Fiscal Year 2013-2014 Fiscal Year 2014-2015

0.00%

1.00%

2.00%

3.00%

Dec-12

Mar-13

Jun-13

Sep-13

Dec-13

Mar-14

Jun-14

Sep-14

Dec-14

Mar-15

Jun-15

Sep-15

Dec-15

Mar-16

Jun-16

Sep-16

Dec-16

Mar-17

Jun-17

Sep-17

Dec-17

Mar-18

Jun-18

Sep-18

Fed Funds 3-Month T-Bill 2-Year T-Note Portfolio Yield Portfolio Benchmark*

FY 2012-13 FY 2013-14 FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18

45

Section 5


December 2017

PERFORMANCE REPORT

50

STRA TEGIC PLAN 201 7-18

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 first Strategic Plan was formally

approved by the City Council in April 2011, and it has been updated periodically since that time. Over

the past year, the City has partnered with the Bloomberg What Works Cities initiative to refine our

strategic outcomes and identify measurable ways to mark our progress. The City Council approved

the FY 2017-18 Strategic Plan and associated performance measures on September 19, 2017.

The Strategic Plan serves as the basis for resource allocation decisions that are used in the

development of the FY 2017-18 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. Goal 1.6 Collaborate with local, regional, state, and federal partners.

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: Economic Development

Goal 3.1 Develop targeted policies and incentives to achieve desired economic growth. Goal 3.2 Make Denton a destination for visitors. Goal 3.3 Promote a business-friendly environment. Goal 3.4 Encourage development, redevelopment, recruitment, and retention.

Key Focus Area 4: Safe, Liveable and Family Friendly Community

Goal 4.1 Enhance public safety in the community. Goal 4.2 Seek clean and healthy neighborhoods in Denton. Goal 4.3 Provide quality, diverse, and accessible neighborhood services for the community. Goal 4.4 Provide and support outstanding leisure, cultural, and educational opportunities.

Goal 4.5 Provide support to citizens in need through social service agencies and programs. Key Focus Area 5: Sustainable & Environmental Stewardship

Goal 5.1 Manage Denton’s water resources. Goal 5.2 Improve air quality and greenhouse gas management. Goal 5.3 Improve energy efficiency and conservation. Goal 5.4 Manage land use and preserve open/natural spaces. Goal 5.5 Provide alternative modes of transportation. Goal 5.6 Promote sustainable materials resource management. Goal 5.7 Encourage local food production.

51

STRA TEGIC PLAN 201 7-18

The matrix below organizes the Key Focus Areas (KFAs) by select service areas 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 SERVICES Technology Services Materials Management Fleet Risk NEIGHBORHOOD SERVICES Building Inspection Community Improvement Services

Libraries Parks and Recreation Planning Gas Well Operations

Community Development

PUBLIC SAFETY Animal Services

Fire

Police

Municipal Court

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: Economic Development Key Focus Area 4: Safe, Liveable and Family-Friendly Community Key Focus Area 5: Sustainable & Environmental Stewardship

52

STRATEGIC PLAN PERFORMANCE REPORT 2017-18

City of Denton, Texas

A visual representation of performance measures can be found on the City of Denton website: http://data.cityofdenton.com/showcase/strategic-measures

53

http://data.cityofdenton.com/showcase/strategic-measures

STRATEGIC PLAN PERFORMANCE MEASURES DASHBOARD 2017-18

KEY FOCUS AREA DEPARTMENT STRATEGIC PLAN PERFORMANCE MEASURES TARGET 1ST QTR

PERCENTAGE OF FIRST CONTACT RESOLUTION FOR CUSTOMERS 85% 95.4%

PERCENTAGE OF BILLING ACURACY 99% 99.99%

PERCENTAGE OF PAYMENTS PROCESSED VIA ONLINE SELF-SERVICE 55% 62.1%

PERCENTAGE OF CITIZENS RATING THE CITY WEBSITE AS A MAJOR SOURCE OF INFORMATION 65% 60%

NUMBER OF FOLLOWERS ACROSS ALL CITY SOCIAL MEDIA SITES 165,000 195,285

PERCENTAGE OF ACTUAL GENERAL FUND REVENUE COMPARED TO BUDGETED REVENUE 100% 115.2%

PERCENTAGE OF ACTUAL GENERAL FUND EXPENDITURES AS COMPARED TO BUDGETED

EXPENDITURES <100% 94.7%

ANNUAL RATE OF INVESTMENT RETURN 1.25% 1.29%

ENGINEERING PERCENTAGE OF BOND FUNDED PROJECTS COMPLETED 85% 0%

LANE MILES OF ASPHALT ROADWAY RECONSTRUCTED 12 2

LANE MILES OF ASPHALT ROADWAY OVERLAID 15 2

LANE MILES OF ASPHALT ROADWAY MICRO-SEALED 45 0

MILES OF SIDEWALK RECONSTRUCTED 2 0

AIRPORT NUMBER OF ACRES OF AIRPORT LAND NEWLY LEASED 7 0

NUMBER OF RFP'S RETURUNED IN TARGET INDUSTRY SECTORS 20 2

NUMBER OF WORKFORCE DEVELOPMENT ACTIVITIES OR GRANTS FACILITATED 12 18

NUMBER OF DOWNTOWN PROPERTIES REDEVELOPED 6 4

NUMBER OF BUSINESS RETENTION VISITS IN THE DOWNTOWN AREA 24 5

NUMBER OF BUSINESS RETENTION VISITS IN AREAS OTHER THAN DOWNTOWN 48 10

POLICE PERCENT OF RESOLVED NEIGHBORHOOD COMPLAINTS 75% 100%

PERCENT OF ACTIVE STRUCTURE FIRES RESPONDED TO IN FIVE MINUTES OR LESS (NFPA 1710

STANDARD IS 90 PERCENT OR LESS THAN FOUR MINUTES) 90% 43.3%

AVERAGE UNIT TURN-OUT TIME (TIME FROM WHEN A 911 DISPATCH IS RECEIVED TO WHEN

UNITS ARE EN ROUTE) 1:20 1:16

PARKS NUMBER OF SPECIAL EVENTS HOSTED BY THE PARKS & RECREATION DEPARTMENT 8 3

NUMBER OF INDIVIDUALS REACHED BY THE DENTON PUBLIC LIBRARY "DPL2GO" OUTREACH

SERVICE 5,000 5,298

NUMBER OF "DPL2GO" OUTREACH EVENTS 60 47

SOLID WASTE POUNDS OF WASTE DISPOSED PER CAPITA 1,900 438

MILES OF ON-STREET BIKE INFRASTRUCTURE, SUCH AS BIKE LANES AND SHARROWS, ADDED

DURING FISCAL YEAR 2017-18 7 0

NUMBER OF TRANSPORTATION SAFETY EDUCATIONAL OPPORTUNITIES AND EVENTS 11 3

NUMBER OF SUSTAINABILITY RELATED WORKSHOPS HOSTED BY THE CITY 35 9%

PERCENT OF GREENSENSE REBATE FUNDING EXPENDED 100% 10%

ENGINEERING

ENVIRONMENTAL

SERVICES

KFA 5: SUSTAINABLE

AND EVIRONMENTAL

STEWARDSHIP

FINANCE

STREETS

KFA 4: SAFE, LIVEABLE,

AND FAMILY-FRIENDLY

COMMUNITY

FIRE

LIBRARY

KFA 3: ECONOMIC

DEVELOPMENT

KFA 1:

ORGANIZATIONAL

EXCELLENCE

CUSTOMER SERVICE

PUBLIC

COMMUNICATIONS

KFA 2: PUBLIC

INFRASTRUCTURE

ECONOMIC

DEVELOPMENT

54

STRATEGIC PLAN WORK PLAN REPORT 2017-18

City of Denton, Texas

55

STRATEGIC PLAN - WORK PLAN DASHBOARD 2017-18

KEY FOCUS AREA DEPARTMENT STRATEGIC PLAN WORK PLANSTARGET

DATE1ST QTR

Implement online payment and citizen service request systems Dec 2017The City has accepted proposals and is working with a vendor to

begin implementation.

Launch a bi-monthly newsletter for citizens and stakeholders Dec 2017

The inaugural issue of the Resident Update was mailed to all

Denton residents on October 1, 2017. This newsletter will

continue to be mailed bi-monthly to citizens and stakeholders.

Expand open data initiatives and improve citizen access to information Sep 2018There are currently 148 datasets available on the City's open

data website http://data.cityofdenton.com

Hold regular performance management meetings with departments and

executive teamSep 2018

The City's first quarterly performance meeting was held on

November 17, 2017 with departments and the executive team.

These meetings will continue quarterly.

Offer key indicators of the City’s performance through an online

dashboardDec 2017

A dashboard of the City's performance related to strategic plan

measures is located at

http://data.cityofdenton.com/base/strategic-performance-

measures

Evaluate purchasing and contract management policies and procedures Jun 2018Staff has been working to update these policies and procedures.

A draft policy is expected to go before council during Quarter 2.

Complete 80% of construction on the new West Parallel Runway Sep 2018The Environmental Assessment approval was delayed, the

approval is anticipated in the second quarter.

Complete the Airport Business Plan Update Sep 2018 Outside Legal council contracted for compliance review.

TrafficEngage a consultant to assist with review of railroad crossings in the city,

as well as possible Quite ZonesSep 2018

A field review with FRA and UP staff has been completed and

the consultant has identified the proposed improvements to Complete 85% of scheduled street improvement projects for Fiscal Year

2017-18Sep 2018

Completed 10% projects during the first quarter.

Complete the 2012 and 2014 bond programs for street improvements Sep 2018

First quarter production was delayed because of inclement

weather and sub-freezing temperatures. However we are

schedule to complete 16 bond segments during the second

quarter

Econ DevelopmentActively recruit prospects from target industries, as identified by the

Economic Development Partnership BoardSep 2018

Economic Development returned two request for proposal

(RFP) responses in Q1, which is 10% of the FY17-18 target. RFP

issuances are slow in Q1, but we expect them to pick up in Q2

and Q3.-The Department has expedited communication to applicants

by providing review comments earlier in the process.

-Cleared the backlog of project applications for review, and

provided current and relevant data.

Dec 2017

-Reduced the number of inspectors visiting the same location

and the number of required customer calls for final inspections

with Building Inspections and Fire Prevention.-Completed an operational survey of 27 comparable cities

across Texas to better align with state-wide best practices to

save time and money for customers.-Stakeholder meetings to communicate initial changes were

held in November 2017.

Implement recommendations to improve the development review and

building inspections processes

KFA 2: PUBLIC

INFRASTRUCTURE

City Manager Office

KFA 1:

ORGANIZATIONAL

EXCELLENCE

Development

Services

KFA 3: ECONOMIC

DEVELOPMENT

Airport

Capital Projects

56



DATE1ST QTR

Complete the Denton Code 2030 Update June 2018

Clarion Associates along with Development Services reported

and delivered the Denton Development Code (DDC) rewrite to

the community. The draft document is currently under review

by City staff. The next phase will accommodate stakeholder

feedback. It is anticipated that the project will be complete in

May 2018.

Complete updates to building standards and design policies under the

City’s Site Design Criteria Manual and related documentsJune 2018

The Engineering Department is soliciting feedback for final

comments with stakeholders and it is expected to be submitted

to Council in late March.

Complete remodel of the Public Safety Communications Center Sep 2018

The details of the plans for the remodel are being finalized with

the architect and Technology Service. Construction will begin in

the spring.

Purchase and implement a new Computer Aided Dispatch (CAD) system

to upgrade technology and improve public safety response, data and

records

June 2018

Police, Fire and Technology Service have been meeting with

Purchasing and the consultant, Mission Critical Partners, in an

effort to develop an RFP for the new CAD/RMS system that will

meet the needs of all partners. The RFQ is expected to be out

in mid February.

Implement an Automatic Fire Station Alerting System Sep 2018

Station Alerting is a multi-year strategy with US Digital Designs.

Station 2 is operating with the new system, and a PO has been

issued for Station 1 and 5. Quotes are being obtained for

Station 6 and temporary Station 8. Station 3 and 4 will

implement the new alerting system upon completion of the

rebuilds, and funding for Station 7 will be a supplemental

funding request for the FY 18-19 Budget.

Add on Fire Medic unit in the Northeast Denton area June 2018

The Medic unit at Station 4 is planned to go into service April

2018. Recruitment testing is currently taking place, and Fleet

Services has the purchase of the ambulance on the Council

Agenda for 2/6/2018.

Complete construction of Fire Station #4March 2018

The construction commenced in March of 2017. The project is

currently ahead of scheduled and is projected to be completed

in April 2018.

Use GIS mapping to determine population distribution in relation to City

recreational amenitiesSep 2018 Staff is working with GIS to provide maps.

Implement recommendations from Denton Parks playground

replacement planSep 2018

Playground specifications for Milam, Denia, and Fred Moore

Parks are complete. TNP has been engaged to provide site plans

for each location.

Community

Development

Continue partnership with the Denton County Homeless Leadership

team to collect and analyze data on housing and service needsSep 2018

The Mayor and a Councilmember are members of HLT and CD

staff serves on the HLT Housing and Data Workgroups. The City

partially funds the Homeless Management Information System

database with seven agencies currently reporting in the same

database on housing and service needs. The City funds, in part,

$40,000 for the Homeless Coordinator and $40,000 for the

Coordinated Entry Data Coordinator who manages the data

collection and analysis.

Public Safety

Fire

Parks

Development

Services

KFA 3: ECONOMIC

DEVELOPMENT


AND FAMILY-FRIENDLY

COMMUNITY

57



DATE1ST QTR

Develop a comprehensive public education program to educate

residents on code requirements

Sep 2018

A public education program is in development, the program is

aligned with the re-write of the Denton Development Code,

updates to the building and fire code, and various initiatives

underway.

Engage homeowner's associations and neighborhod groups to improve

neighborhoods through code complianceSep 2018

Staff continues to host community engagement sessions and

has taken actions to expand the outreach opportunities.

Electric Complete construction of the Denton Engergy Center Sep 2018

Construction on the Denton Energy Center (DEC) is

approximately 89% complete. Contracting with Enterprise for

pre-commercial ‘test’ natural gas has been completed and an

IFB for longer term commercial supply has been issued.

Expenditures to date are approximately 72.4% of the allocated

project funds. The target date to begin performance testing is

late spring 2018. The target date for commercial operation is

early summer 2018.

Solid Waste Complete construction of Cell 3 to expand capacity at the landfill Sep 2018

The construction of Cell 3 is in progress, and staff anticipates

the new cell to be ready to accept waste by the end of March

2018

Environmental

ServicesEngage the community and update the City's 2012 Sustainability Plan March 2018

Reviewed Sustainability Plan and compared with STAR

communities checklist to develop strategies that will achieve

goals of improving Community and Municipal Sustainability and

our STAR community rating. Prepared for Internal stakeholder

meeting to include STAR communities update, and STAR/

Sustainability plan crosswalk and began establishing timeline for

community outreach to begin in the second quarter.

ElectricReview the City's renewable energy portfolio and present options to

increase renewable energyDec 2017

DME’s General Manager, George Morrow recently presented,

requested and gained approval for, by resolution, the Denton

Renewable Resource Plan ‘DRRP’. With existing portfolio

resources of solar and wind, ongoing review of RFP responses

with a view to an award and future solicitations identified in

DRRP, Denton’s renewable portfolio continues towards its

accelerated goal of 100% by the 2020 timeframe.

Development

Services

KFA 5: SUSTAINABLE

AND EVIRONMENTAL

STEWARDSHIP


AND FAMILY-FRIENDLY

COMMUNITY

58

City Hall, Denton Seal

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