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Rendering of New Linda McNatt Animal Care & Adoption Center

City of Denton, Texas2014-2015

4th Quarter Financial ReportSeptember 2015

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About This Report

This report has been prepared by the City of Denton’s Finance Department. The Quarterly Financial Report is intended to provide our users (internal and external) with information regarding the City’s financial position and economic activity. This report includes information for the quarter ending September 30, 2015. This report is presented in five sections. 1. The Executive Dashboard section contains a high level

summary of the major operating funds using graphic illustrations and key economic indicators. Narrative disclosures are also included to highlight any significant changes or fluctuations.

2. The Financial Summary section reports the performance of the

major operating funds of the City. In addition, the report provides an end of year projection and a comparison to the budget for major revenue sources and expenditure items.

3. The Revenue & Economic Analysis section provides additional

analysis regarding key revenue sources and economic indicators.

4. The Quarterly Investment Report provides a summary of the

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

5. The Performance Report provides Key Performance Indicators (KPIs) for each of the goals identified in the City’s strategic plan.

The Quarterly Financial Report is intended to provide our users with timely and relevant information. Please provide us with any comments or suggestions you may have. If you would like additional information, feel free to contact me.

Chuck Springer Director of Finance 215 East McKinney Street Denton, TX 76201 940-349-8260

1

Section 1

City of Denton Quarterly Financial Report

September 2015

Executive Dashboards

3

Note: All figures presented are in millions of dollars.

FY 2014-15 FY 2014-15ANNUAL PRELIMINARY FY 2014-15

DESCRIPTIO N BUDGET 1 ACTUALS VARIANCEBeginning Fund Balance as of 09/30/14 25.00$ 25.84$ RESO URCES: Ad Valorem Taxes 37.99 37.75 -1% Sales Tax 28.15 30.60 9% Franchise Fees 6.23 6.23 0% O ther Taxes 0.41 0.50 22% Service Fees 6.33 6.30 0% Fines and Fees 4.56 3.72 -18% Licenses and Permits 2.31 2.78 20% Miscellaneous Revenue 1.48 1.53 3% Transfers In 14.73 14.48 -2%Total Revenues 102.19 103.89 2%Total Resources 127.19 129.73 EXPENDITURES: Personal Service 73.64 72.85 -1% Material and Supplies 2.43 2.44 0% Maintenance and Repairs 3.19 3.02 -5% Insurance 1.06 1.06 0% Miscellaneous 0.89 0.92 3% O perations 12.91 12.45 -4% Transfers O ut 8.93 9.06 1% Fixed Assets 0.56 0.57 2%Total Expenditures 103.61 102.37 -1%Net Income (Loss) (1.42) 1.52 Ending Fund Balance 23.58$ 27.36$

City of Denton, Texas General Fund Executive Dashboard

$‐

$20

$40

$60

$80

$100

$120

Oct‐14

Nov

‐14

Dec‐14

Jan‐15

Feb‐15

Mar‐15

Apr‐15

May‐15

Jun‐15

Jul‐1

5

Aug‐15

Sep‐15

Revenue & Expenses (in Millions)YTD Revenue YTD Expenses

Key Trends

Sales Tax revenues are higher than budget due to stronger collections in retail activities.Fines and Fees are lower than budget due to decreased activity in the number of municipal citations and fines.Operations expenditures are lower than budget mainly due to fuel costs savings.

$‐

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

3Q‐10

4Q‐10

1Q‐11

2Q‐11

3Q‐11

4Q‐11

1Q‐12

2Q‐12

3Q‐12

4Q‐12

1Q‐13

2Q‐13

3Q‐13

4Q‐13

1Q‐14

2Q‐14

3Q‐14

4Q‐14

1Q‐15

2Q‐15

3Q‐15

4Q‐15

Sales Tax Monthly Average by Quarter

1Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which was estimated in the FY 2014‐15 budget process.

4


City of Denton, Texas Electric Fund Executive Dashboard

DESCRIPTIO N

FY 2014-15 ANNUAL BUDGET 1

FY 2014-15 PRELIMINARY

ACTUALS FY 2014-15 VARIANCE

Beginning Working Capital and Reserves as of 9/30/14 54.76$ 59.01$ RESO URCES: O perating Revenues 165.80 165.46 0% Non-operating Revenues 0.35 0.31 -12%

Total Revenues 166.15 165.77 0%Total Resources 220.91 224.78

EXPENDITURES: Purchased Power 102.72 98.02 -5% O peration and Maintenance 36.69 29.39 -20% Non-O perating Expenditures 37.63 37.40 -1%Total Expenditures 177.04 164.81 -7%Net Income (Loss) (10.89) 0.96

Ending Working Capital and Reserves 43.87$ 59.97$

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180Revenue & Expenses (in Millions)

YTD Revenue YTD Expense

Key TrendsNon‐operating Revenues were 12% lower than budgeted due to historically low interest rates.Purchase Power expenses were $4.7 million lower than budgeted due to:

‐ The expiration of DME’s third‐party incremental power supply contract which allows for wholesale market supply and

‐ The significant decrease of market power prices since the adoption of the budget.Operation and Maintenance was 20% lower than budgeted due to position vacancies, lower than budgeted materials & supplies, maintenance & repair, licenses, bad debt expense, vehicle operation, outside contract services, consultant fees, training, advertising and marketing costs.

0

100

200

300

400

500

600

1Q10

3Q10

1Q11

3Q11

1Q12

3Q12

1Q13

3Q13

1Q14

3Q14

1Q15

3Q15

2010 – 2015 Historical Quarterly GWH Sales

1Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which was estimated in the FY 2014‐15 budget process.

5



DESCRIPTION BUDGET 1 ACTUALS VARIANCEBeginning Working Capital and Reserves as of 09/30/142 18.67$ 17.49$ RESOURCES: Water Sales 35.01 31.11 -11% Other Water Revenues 0.99 1.15 16% Transfers In 6.16 5.61 -9% Impact Fee Revenue 3.60 3.60 0%Total Revenues 45.76 41.47 -9%

Total Resources 64.43 58.96

EXPENDITURES: Personal Service 9.92 9.30 -6% Operations, Services 11.38 9.54 -16% Capital Outlay 7.85 7.50 -4% Debt Service 13.84 13.84 0% Transfers Out 3.21 3.22 0%Total Expenditures 46.20 43.40 -6%Net Income (Loss) (0.44) (1.93) Ending Working Capital and Reserves 18.23$ 15.56$

0

500

1,000

1,500

2,000

2,500

3,000

1Q10

3Q10

1Q11

3Q11

1Q12

3Q12

1Q13

3Q13

1Q14

3Q14

1Q15

3Q15

2010‐2015 Historical Quarterly Gallons Sold (in Millions)

City of Denton, Texas Water Fund Executive Dashboard

$‐ $5

$10 $15 $20 $25 $30 $35 $40 $45 $50

Revenue & Expenses (in Millions)

YTD Revenue YTD Expenses

Key TrendsWater Sales are under budget due to weather and per capita usage decline. Transfer revenues are under budget due to a decrease in Customer Service and Administration spending. Operations, Services are under budget due to reduced materials & supplies and outside services expenses.1Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which was estimated in the FY 2014‐15 budget process.2The Beginning Working Capital balance excludes $3.7 million of Impact Fees Reserves and $1.0 million of Development Plan Line Reserves.

6


DESCRIPTION BUDGET 1 ACTUALS VARIANCEBeginning Working Capital and Reserves as of 09/30/142 8.91$ 9.21$ RESOURCES: Wastewater Fees 22.25 22.29 0% Other Wastewater Revenue 1.65 1.57 -5% Drainage Fees 4.40 4.53 3% Transfer In 0.64 0.88 38% Impact Fee Revenue 1.80 1.80 0%Total Revenues 30.74 31.07 1%

Total Resources 39.65 40.28 EXPENDITURES: Personal Service 7.86 7.27 -8% Operations, Services 8.14 6.94 -15% Capital Outlay 4.74 5.15 9% Debt Service 7.04 7.04 0% Transfer Out 3.14 3.04 -3%Total Expenditures 30.92 29.44 -5%

Net Income (Loss) (0.18) 1.63 Ending Working Capital

and Reserves 8.73$ 10.84$


0

200

400

600

800

1,000

1,200

1Q10

3Q10

1Q11

3Q11

1Q12

3Q12

1Q13

3Q13

1Q14

3Q14

1Q15

3Q15

2010‐2015 Historical Quarterly Gallons Billed (in Millions)

City of Denton, Texas Wastewater Fund Executive Dashboard

$‐

$5

$10

$15

$20

$25

$30

$35Revenue & Expenses (in Millions)


Key TrendsTransfer Revenue exceeds budget due to the 91.4 acre land sale to Solid Waste. Operations, Services are under budget due to reduced materials & supplies and outside services expenses.Capital Outlay is over budget due to savings in other expenditures.

1Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which was estimated in the FY 2014‐15 budget process.2The Beginning Working Capital balance excludes $2.7 million of Impact Fees Reserves , $1.0 million of Development Plan Line Reserves and $1.0 million for Drainage Reserves.

7


DESCRIPTION BUDGET ACTUALS VARIANCEREVENUES: Residential Drainage Fees 1.59$ 1.67$ 5% Nonresidential Drainage Fees 2.82 2.87 2% Wastewater Resources 0.10 0.10 0% General Fund Transfer 0.51 0.51 0%Total Revenues 5.02 5.15 3%

EXPENDITURES: Personal Service 1.76 1.61 -9% Operations, Services 0.93 0.71 -24% Capital Outlay 0.71 1.23 73% Debt Service 1.06 1.06 0% Transfer Out 0.56 0.54 -4%Total Expenditures 5.02 5.15 3%

Net Income (Loss) -$ -$


City of Denton, Texas Drainage Operations Executive Dashboard

$‐

$1.0

$2.0

$3.0

$4.0

$5.0

$6.0



Key Trends

Personal Services are under budget due to position vacancies.Operations, Services are under budget due to reduced materials & supplies and outside services expenses.Capital Outlay is higher than budget due to savings in other expenditures and funding of projects.

8


DESCRIPTION BUDGET 1 ACTUALS VARIANCEBeginning Working Capital

and Reserves as of 09/30/142 3.77$ 4.05$

RESOURCES: Collection & Disposal 26.36 27.34 4% Recycling 0.79 0.78 -1% Other Revenue 0.53 0.68 28%Total Revenues 27.68 28.80 4%


EXPENDITURES: Personal Service 9.17 9.22 1% Operations, Services 7.94 8.05 1% Capital Outlay 1.26 1.13 -10% Debt Service 6.90 6.88 0% Transfer Out 2.53 2.52 0%Total Expenditures 27.80 27.80 0%

Net Income (Loss) (0.12) 1.00 Ending Working Capital and Reserves 3.65$ 5.05$

0600

1,2001,8002,4003,0003,6004,2004,8005,4006,0006,6007,200

2014Qtr 1

2014Qtr 2

2014Qtr 3

2014Qtr 4

2015Qtr 1

2015Qtr 2

2015Qtr 3

2015Qtr 4

Refuse Tonnage Recycling Tonnages

Residential Curbside Collection Tonnage


City of Denton, Texas Solid Waste Fund Executive Dashboard

Key TrendsOther Revenue is more than budget due to gains on the sale of fixed assets. Capital Outlay spending is less than budget due to increased spending in Operations, Services.

02,5005,0007,500

10,00012,50015,00017,50020,00022,50025,00027,50030,00032,500

2014Qtr 1

2014Qtr 2

2014Qtr 3

2014Qtr 4

2015Qtr 1

2015Qtr 2

2015Qtr 3

2015Qtr 4

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 2014‐15 budget process.2The Beginning Working Capital Reserve excludes $6.52 million of Landfill Closure/Post Closure reserves.

9

City of Denton, Texas Airport Fund Executive Dashboard

Key TrendsRevenue for Airport Ground Leases are less than budget due the timing of the completion of a new hangar.Gas Well Royalties are less than projected due to the combination of falling gas prices and lower production. Capital Expenditures are below budget because expected land purchases were delayed.

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

$3.5

$4.0

$4.5

2007 2008 2009 2010 2011 2012 2013 2014 2015

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

- 5,000

10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 55,000

1Q -

102Q

- 10

3Q -

104Q

- 10

1Q -

112Q

- 11

3Q -

114Q

- 11

1Q -

122Q

- 12

3Q -

124Q

- 12

1Q -

132Q

- 13

3Q -

134Q

- 13

1Q -

142Q

- 14

3Q -

144Q

- 14

1Q -

152Q

- 15

3Q -

154Q

- 15

AIRPORT OPERATIONS BY QUARTER(takeoff or landing)

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


DESCRIPTIO N BUDGET 1 ACTUALS VARIANCEBeginning Working Capital and Reserves as of 09/30/14 5.10$ 5.23$ RESO URCES: Airport Ground Leases 0.79 0.40 -49% FBO Commissions 0.39 0.23 -41% Miscellaneous 0.04 0.06 50%Total O perating Revenues 1.22 0.69 -43%EXPENDITURES: Personal Service 0.62 0.59 -5% O perations, Services 0.45 0.39 -13% Transfer O ut 0.43 0.43 0%Total O perating Expenditures 1.50 1.41 -6%

Net O perating Income (Loss) (0.28) (0.72) NO N-O PERATING REVENUES: Investment Income 0.04 0.02 -50% Gas Well Royalties 0.90 0.54 -40%Total Non-O perating Revenues 0.94 0.56 -40%

NO N-O PERATING EXPENDITURES: Debt Service 0.48 0.48 0% Transfer O ut - Capital 2.59 1.24 -52%Total Non-O perating Expenditures 3.07 1.72 -44%Net Non-O perating Income (Loss) (2.13) (1.16)

Net Income (Loss) (2.41) (1.88)

Ending Working Capital and Reserves 2.69$ 3.35$

1Annual adopted budget as amended or modified. Beginning Working Capital and Reserves represents the amount which was estimated in the FY 2014‐15 budget process.

10


DESCRIPTIO N BUDGET 1 ACTUALS VARIANCEBeginning Fund Balance

as of 09/30/2014 0.87$ 0.92$ RESO URCES: Franchise Fees 9.28 9.03 -3% Street Cuts 0.35 0.37 6% Investment Income 0.01 0.01 0% Transfers In 0.54 0.56 4%Total Revenues 10.18 9.97 -2%


EXPENDITURES: Personal Service 2.50 2.44 -2% Materials & Supplies 0.08 0.07 -13% Maintenance & Repairs 5.99 5.31 -11% O perations, Services 0.88 0.96 9% Transfer O ut 0.73 0.72 -1%Total Expenditures 10.18 9.50 -7%Net Income (Loss) - 0.47

Ending Fund Balance 0.87$ 1.39$

1Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which was estimated in the FY 2014-15 budget process.

City of Denton, Texas Street Improvement Fund Executive Dashboard

Key Trends

Lane miles of surface treatment was 0 because surface treatment are seasonal activities and resources were focused on other projects.


$-

$1.6

$3.2

$4.8

$6.4

$8.0

$9.6

$11.2

Oct-14 Dec-14 Feb-15 Apr-15 Jun-15 Aug-15



0

11

22

33

44

55

66

Qtr1 Qtr2 Qtr3 Qtr4

Tons of Asphalt Laid (in Thousands)

FY13-14 FY14-15

0

10

20

30

Qtr 1 Qtr 2 Qtr3 Qtr4

Lane Miles Surface Treatment

FY 13-14 FY 14-15

11

FY 2014-15 FY 2014-15

GRANT PREMINARY FY 2014-15

DESCRIPTIO N AMO UNT ACTUAL VARIANCE2014-15 Budget Comm Development 2.90$ 2.09$ -28% Public Safety 0.71 0.96 35% Parks & Recreation 0.18 0.18 0% O ther 0.19 0.19 0%Total Budget 3.98 3.42 -14%

New Awards Comm Development 0.13 0.13 0% Parks & Recreation 1.34 1.34 0% O ther 0.48 0.45 -6%Total New Awards 1.95 1.92 -2%

Totals 5.93$ 5.34$ -10%

COMM DEV51%

PUBLIC SAFETY15%

PARKS & REC26%

OTHER8%

FY 2014‐15 Grants Awarded

$‐

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

$3.5

COMMDEV

PUBLICSAFETY

PARKS&REC

OTHER

Awards Expenses

FY 2014‐15 Awards & Expenses (in Millions)

Key Trends

The following grants have been received in FY 2014‐15: Community Development : ESG additional award $68,249, Amy Young Program $66,000.Parks: Tx Dot NW Trail Extension $1,341,617.Other: Farmers’ Market Promotion Program: $77,871, US380‐I35 $102,211, TCEQ $112,667.Fire: 2014 DFWA UASI $131,500, 2014 SHSP LETPA $36,796.Library: Inter Library Loan Program $20,038.

City of Denton, Texas Grants Dashboard


12

Section 2


September 2015

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

FINANCIAL SUMMARY

13

City of Denton General FundSchedule of Revenues - Budget vs. Actuals (Unaudited)For the Period Ended September 30, 2015

PRIOR ANNUAL PRELIMINARY BUDGET VS

REVENUE DESCRIPTION Y-T-D BUDGET ACTUALS ACTUALS

Current Year - Ad Valorem 32,997,851$ 37,346,130$ 37,150,961$ -1%

Delinquent - Ad Valorem 239,838 298,769 265,668 -11%

Miscellaneous Penalties & Fees 337,207 346,285 331,423 -4%

Ad Valorem Taxes 33,574,896 37,991,184 37,748,052 -1%

Sales Tax 27,764,114 28,145,925 30,601,964 9%

Franchise - Gas Utilities 707,322 564,087 564,087 0%

Franchise - Private Electric Utilities 195,578 167,615 167,615 0%

Franchise - Cable 793,397 177,934 177,934 0%

Franchise - Telecom 406,228 758,279 758,279 0%

Franchise - Denton Municipal Utilities 5,475,918 4,560,934 4,560,934 0%

Franchise - DISD Fiber 14,127 - - 0%

Franchise Fees 7,592,570 6,228,849 6,228,849 0%

Other Taxes 440,182 412,748 494,138 20%

Ambulance Service Fees 2,480,582 2,599,250 2,653,613 2%

Charges to Bond Funds 180,400 187,500 90,200 -52%

Fire Department Fees 200,732 209,103 158,299 -24%

Building Inspections Fees 448,617 430,707 504,011 17%

Park Department Fees 1,468,350 1,546,273 1,722,074 11%

Planning Department Fees 898,000 774,407 705,244 -9%

Reprographics Fees 392,577 463,828 354,925 -23%

Miscellaneous Service Fees 117,043 114,269 114,939 1%

Service Fees 6,186,301 6,325,337 6,303,305 0%

Denton Municipal Fines 2,259,273 2,219,548 1,622,093 -27%

Parking Fines 176,935 215,250 188,010 -13%

Miscellaneous Fines and Fees 1,031,145 1,054,890 930,377 -12%

Court Administrative and Service Fees 1,071,858 1,068,500 981,198 -8%

Fines and Fees 4,539,211 4,558,188 3,721,678 -18%

Demolition Permits 12,335 9,500 9,900 4%

Building Permits 1,810,197 2,127,694 2,649,942 25%

Certificate of Occupancy 77,505 84,000 68,186 -19%

Miscellaneous Licenses and Permits 78,384 87,749 54,367 -38%

Licenses and Permits 1,978,421 2,308,943 2,782,395 21%

Investment Income 172,684 196,541 221,867 13%

Miscellaneous Revenues 1,589,006 1,289,831 1,310,482 2%

Miscellaneous Resources 1,761,690 1,486,372 1,532,349 3%

ROI - Denton Municipal Utilities 6,297,100 6,976,466 6,740,778 -3%

Transfers 7,828,344 7,751,083 7,739,917 0%

Transfers 14,125,444 14,727,549 14,480,695 -2%

Total General Fund Revenues 97,962,829$ 102,185,095$ 103,893,425$ 2%

14

City of Denton

General Fund

Schedule of Expenditures - Budget vs Actuals (Unaudited)

For the Period Ended September 30, 2015


Y-T-D BUDGET ACTUALS ACTUALS

NEIGHBORHOOD SERVICES

Building Inspections 2,026,546$ 2,452,355$ 2,247,012$ -8%

Community Improvement Services 1,247,091 1,605,801 1,451,441 -10%

Libraries 5,616,126 5,713,529 5,620,536 -2%

Parks and Recreation 11,296,983 11,788,704 11,375,212 -4%

Planning 2,003,631 2,420,812 2,255,606 -7%

Gas Well Review 406,030 420,504 359,824 -14%

Social Services 421,579 458,770 450,326 -2%

23,017,986 24,860,475 23,759,957 -4%

PUBLIC SAFETY

Animal Services 1,214,843 1,134,965 1,396,137 23%

Fire 23,182,541 24,547,262 23,805,971 -3%

Municipal Court 1,327,260 1,489,335 1,382,821 -7%

Municipal Judge 357,333 479,259 407,660 -15%

Police 25,403,995 27,099,174 26,638,880 -2%

51,485,972 54,749,995 53,631,469 -2%

TRANSPORTATION

Traffic Operations 2,049,178 2,406,217 2,398,372 0%

Transportation Operations 360,666 448,312 406,982 -9%

Street Lighting 681,065 735,000 743,809 1%

3,090,909 3,589,529 3,549,163 -1%

ADMINISTRATIVE & COMMUNITY SERVICES

Cable Television 293,646 313,607 306,815 -2%

City Manager's Office 2,693,540 2,768,897 2,742,979 -1%

Economic Development 2,400,934 3,038,854 2,850,772 -6%

Facilities Management 3,469,834 3,712,457 3,784,155 2%

Finance 3,434,642 3,543,503 3,457,264 -2%

Human Resources 1,537,736 1,565,523 1,487,037 -5%

Internal Audit 59,184 75,000 29,206 -61%

Legal Administration 2,281,523 2,194,662 2,424,705 10%

Public Communications Office 419,185 457,112 429,928 -6%

Reprographics 431,184 463,828 474,997 2%

Non-Departmental 3,263,450 2,278,714 3,445,447 51%

20,284,858 20,412,157 21,433,305 5%

TOTAL EXPENDITURES 97,879,725$ 103,612,156$ 102,373,894$ -1%

15

City of Denton

Electric Fund

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



DESCRIPTION Y-T-D BUDGET1

ACTUALS ACTUALS

Beginning Working Capital

and Reserves as of 9/30/14 54,758,487$ 59,009,001$

REVENUES:

Operating Revenues 150,494,469$ 165,802,333 165,458,293 0%

Non-operating Revenues 306,064 350,000 309,436 -12%

Total Revenues 150,800,533 166,152,333 165,767,729 0%

EXPENDITURES:

Purchased Power 106,437,641 102,718,421 98,019,717 -5%

Operation and Maintenance 26,953,174 36,693,474 29,385,850 -20%

Return on Investment 4,461,630 4,884,489 4,839,573 -1%

Franchise Fee 6,377,226 6,977,841 6,907,042 -1%

Non-Operating Expenditures 22,033,551 25,770,605 25,651,848 0%

Total Expenditures 166,263,222 177,044,830 164,804,030 -7%

Net Income (Loss) (15,462,689)$ (10,892,497) 963,699

Ending Working Capital and Reserves 43,865,990$ 59,972,700$

1 Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which was estimated in the FY 2014-15 budget process.

16

City of Denton

Water Fund





ACTUALS ACTUALS


and Reserves as of 09/30/141

18,666,699$ 17,493,722$

REVENUES:

Water Sales Residential 15,009,227$ 18,029,014 15,767,866 -13%

Water Sales Commercial 14,274,905 15,915,885 14,303,188 -10%

Water for Resale 1,265,871 1,070,592 1,042,231 -3%

Other Water 1,108,327 897,037 1,071,327 19%

Transfers In 4,790,896 6,160,732 5,606,308 -9%

Investment Income 75,542 92,000 75,589 -18%

Impact Fee Revenue 3,100,000 3,600,000 3,600,000 0%

Total Revenues 39,624,768 45,765,260 41,466,509 -9% Use of Reserves - -

EXPENDITURES:

Personal Service 8,658,233 9,923,556 9,296,703 -6%

Purchased Power 1,299,081 1,517,918 1,398,275 -8%

Purchase of Water 89,421 109,800 68,198 -38%

Materials and Supplies 1,537,071 1,838,363 1,441,099 -22%

Maintenance and Repairs 943,217 1,323,599 1,262,680 -5%

Insurance 217,201 219,527 219,527 0%

Miscellaneous 84,712 448,332 300,312 -33%

Operations, Services 1,958,453 2,896,376 2,175,298 -25%

Capital Outlay 6,411,734 7,848,799 7,504,856 -4%

Return on Investment 1,070,853 1,256,938 1,099,858 -12%

Franchise Fee 1,529,789 1,772,319 1,571,226 -11%

Debt Service 13,201,829 13,837,735 13,834,731 0%

Transfers Out 3,060,171 3,209,009 3,224,541 0%


Net Income (Loss) (436,997)$ (437,011) (1,930,795)

Ending Working Capital

and Reserves 18,229,688$ 15,562,927$

1 The Beginning Working Capital and Reserves excludes Fund Balance from the Impact Fee Reserve Fund of $3,731,476 and $1,000,000

of Development Plan Line Reserves.

2 Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which was estimated in the FY 2014-15

budget process.

17

City of Denton

Wastewater Fund





ACTUALS ACTUALS



8,908,860$ 9,212,033$

REVENUES:

Residential Fees 10,358,193$ 10,657,561 10,580,535 -1%

Commercial Fees 10,276,321 10,997,342 11,004,457 0%

Effluent Irrigation Fees 105,049 62,899 114,453 82%

Wholesale Fees 550,328 530,333 585,668 10%

Other Wastewater Fees 1,395,279 1,610,119 1,524,064 -5%

Drainage Fees 4,390,051 4,404,640 4,534,118 3%

Transfer In 623,213 644,506 879,506 36%

Interest Revenue 46,006 39,000 52,124 34%

Impact Fee Reserves 1,100,000 1,800,000 1,800,000 0%

Total Revenues 28,844,440 30,746,400 31,074,925 1%

EXPENDITURES:


Purchased Power 887,862 821,000 987,428 20%

Materials and Supplies 607,398 1,082,071 599,930 -45%

Maintenance and Repairs 1,024,291 1,392,954 1,183,519 -15%

Insurance 217,122 250,460 250,460 0%

Miscellaneous 36,042 55,670 44,921 -19%

Operations, Services 1,815,434 2,512,324 1,932,716 -23%

Capital Outlay 5,695,733 4,739,821 5,147,430 9%

Return on Investment 764,617 835,039 801,347 -4%

Franchise Fee 1,092,310 1,192,913 1,144,782 -4%

Debt Service 7,042,939 7,039,645 7,037,899 0%

Transfers Out 2,898,165 3,143,772 3,041,982 -3%


Net Income (Loss) 22,758$ (179,504) 1,635,634


and Reserves 8,729,356$ 10,847,667$

1 The Beginning Working Capital and Reserves excludes Fund Balance from the Impact Fee Reserve Fund of $2,695,213,

$1,000,000 of Development Plan Line Reserves, and $1,000,000 of Drainage Reserves.

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

the FY 2014-15 budget process.

18

City of Denton

Drainage Operations




DESCRIPTION Y-T-D BUDGET ACTUALS ACTUALS

REVENUES:

Residential Drainage Fees 1,619,175$ 1,591,366$ 1,666,951$ 5%

Nonresidential Drainage Fees 2,770,876 2,813,274 2,867,167 2%

Wastewater Resources 75,680 100,000 100,000 0%

General Fund Transfer 483,066 513,030 513,030 0%

Total Revenues 4,948,797 5,017,670 5,147,148 3%

EXPENDITURES:


Materials and Supplies 57,674 86,896 50,071 -42%

Maintenance and Repairs 61,472 149,892 95,201 -36%

Insurance 24,232 24,373 24,373 0%

Miscellaneous 4,905 16,950 14,315 -16%

Operations, Services 366,963 644,086 532,238 -17%

Capital Outlay 1,280,780 709,062 1,226,296 73%

Debt Service 1,104,198 1,059,849 1,059,925 0%

Transfer Out 505,962 564,188 535,319 -5%

Total Expenditures 4,948,797 5,017,670 5,147,148 3%

Net Income (Loss) -$ -$ -$

19

City of Denton

Solid Waste Fund




DESCRIPTION Y-T-D BUDGET3 ACTUALS ACTUALS



3,767,241$ 4,053,725$

REVENUES:

Garbage Fees - Residential 9,375,487$ 9,940,753 9,993,277 1%

Garbage Fees - Commercial 11,669,606 12,945,252 12,987,770 0%

Landfill Fees 3,682,564 3,470,988 4,359,788 26%

Recycling 746,631 790,220 775,920 -2%

Construction - 120,000 1,016 -99%

Site Operations 247,722 253,000 229,630 -9%

Other Revenue 655,908 155,000 443,135 186%

Interest Revenue 6,055 5,500 7,605 38%

Total Revenues 26,383,973 27,680,713 28,798,141 4%

EXPENDITURES:

Personal Service 8,720,578 9,174,529 9,220,156 0%


Maintenance and Repairs 377,999 318,033 415,629 31%

Insurance 198,855 157,178 157,178 0%

Miscellaneous 43,548 63,800 43,557 -32%

Operations, Services 5,637,055 5,329,859 5,349,423 0%

Capital Outlay 1,602,483 1,251,336 1,127,731 -10%

Debt Service2

5,934,448 6,897,359 6,879,085 0%

Franchise Fee 1,255,534 1,374,396 1,391,481 1%

Landfill Closure 344,469 364,200 364,200 0%

Transfer Out 2,143,342 2,527,861 2,519,548 0%

Total Expenditures 26,584,941 27,802,592 27,794,903 0%

Net Income (Loss) (200,968)$ (121,879) 1,003,238


and Reserves 3,645,362$ 5,056,963$

1 The Beginning Working Capital and Reserves excludes Fund Balance from the Landfill Closure/Post Closure Reserve Fund of $6,521,833.

2 Adjusted timing of debt service transfers to meet required debt service payment in FY2014-15.

3 Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which was estimated in the FY 2014-15 budget process.

20

City of Denton

Airport Fund





ACTUALS ACTUALS


and Reserves as of 09/30/14 5,095,195$ 5,234,484$

OPERATING REVENUES:

Airport Ground Leases 423,372$ 787,546 402,004 -49%

FBO Commissions 309,284 391,853 232,881 -41%

Miscellaneous 44,024 40,000 60,695 52%

Total Operating Revenues 776,680 1,219,399 695,580 -43%

OPERATING EXPENDITURES:

Personal Service 582,653 617,974 589,971 -5%

Materials and Supplies 25,545 46,725 46,919 0%

Maintenance and Repairs 71,224 78,997 70,367 -11%

Insurance 21,324 21,359 21,359 0%

Miscellaneous 1,211 1,500 1,352 -10%

Operations 203,000 244,711 222,043 -9%

Transfers Out - Operating 464,208 429,148 429,148 0%

Franchise Fee 37,853 60,970 34,778 -43%

Total Operating Expenses 1,407,018 1,501,384 1,415,937 -6%

Operating (Loss) (630,338) (281,985) (720,357)

NON-OPERATING REVENUES:


Gas Well Royalties 1,132,478 900,000 539,138 -40%

Total Non-Operating Revenues 1,158,064 940,000 564,157 -40%

NON-OPERATING EXPENDITURES:

Debt Service2

357,205 481,356 481,266 0%

Capital 816,636 2,584,637 1,238,911 -52%

Total Non-Operating Expenses 1,173,841 3,065,993 1,720,177 -44%

Non-Operating Income (Loss) (15,777) (2,125,993) (1,156,020)

Net Income (Loss) (646,115)$ (2,407,978) (1,876,377)

Ending Working Capital 2,687,217$ 3,358,107$

1 Annual adopted budget as amended or modified. Beginning Working Capital and Reserves represents the amount which was estimated in the FY 2014-15 budget process.

2 Adjusted timing of debt service transfers to meet required debt service payment in FY2014-15.

21

City of Denton

Street Improvement Fund

Schedule of Expenditures - Budget vs Actuals (Unaudited)




ACTUALS ACTUALS

Beginning Fund Balance

as of 9/30/2014 870,687$ 916,613$

RESOURCES:

Franchise Fees 7,111,758$ 9,279,639 9,026,403 -3%

Street Cuts 305,910 350,000 372,051 6%


Transfers In 416,418 541,387 562,440 4%

Miscellaneous - - 1,080

Total Resources 7,840,737 10,181,026 9,968,536 -2%

EXPENDITURES:



Maintenance and Repairs 3,921,988 5,992,989 5,311,905 -11%

Insurance 61,280 61,280 55,524 -9%

Miscellaneous 3,606 5,000 3,655 -27%

Operations, Services 792,019 817,986 892,021 9%

Transfer Out 1,181,606 726,010 724,797 0%


Net Income (Loss) (413,570)$ - 471,610

Ending Fund Balance 870,687$ 1,388,223$

1Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which was estimated in the FY 2014-15 budget process.

22

City of Denton

Grants

Schedule of Expenses - Budget vs Actuals (Unaudited)


GRANT DESCRIPTION

EXPENDITURES

AS OF

9/30/20141ANNUAL

BUDGET

PRELIMINARY

ACTUALS

BUDGET VS

ACTUALS

FY 2014-15 Budget

US Dept of HUD -

Community Development Block Grant(CDBG) 3,106,152$ 1,172,677$ 850,000$ 72%

US Dept of HUD -

HOME Investment Partnership Program 1,410,605 1,137,523 650,000 57%

Emergency Solutions Grant 698 591,880 591,880 100%

Community Development 4,517,455 2,902,080 2,091,880 72%

TxDot Comprehensive Grant - 95,830 95,830 100%

2010 Congressional Grant 782,525 - 271,391 0%

2013 Byran Justice Assistance Grant (JAG) 19,055 - 2,243 0%

2014 Byran Justice Assistance Grant (JAG) - 24,357 24,357 100%

2013 UASI 1,860 42,000 42,000 100%

2013 UASI-LETPA - 36,000 36,000 100%

2013-SHSP-LETPA - 9,500 9,500 100%

2014 UASI - 125,000 125,000 100%

2014-UASI-LETPA - 55,000 55,000 100%

Emergency Management Performance Grant - 71,280 57,024 80%

Auto Theft Grant 12,993 239,233 239,233 100%

Tobacco Grant - 7,500 7,350 98%

Public Safety 816,433 705,700 964,928 137%

Summer Food Grant 180,000 180,000 100%

Parks and Recreation - 180,000 180,000 100%

CNG Fuel Station Grant - 100,000 100,000 100%

Texas Historical Commission Grant - 37,775 37,775 100%

Airport Maintenance (RAMP) Grant - 50,000 50,000 100%

Other - 187,775 187,775 100%

Total FY 2014-15 Budget 5,333,888 3,975,555 3,424,583 86%

New Awards

Amy Young Barrier Removal Program - 66,000 66,000 100%

Emergency Solutions Grant additional award - 68,249 68,249 100%

Community Development - 134,249 134,249 100%

TxDot NW Trail Extension Grant - 1,341,617 1,341,617 100%

Parks and Recreation - 1,341,617 1,341,617 100%

Farmers' Market Promotion Program - 77,871 49,269 63%

2014 DFWA UASI - 131,500 131,500 0%

2014 SHSP LETPA - 36,796 36,796 0%

Inter Library Loan Program (ILL) - 20,038 20,038 0%

TxDot US380 - I35 Traffic Lights Grant - 102,211 102,211 100%

TCEQ Emission Reduction Rebate Grant - 112,667 112,667 100%

Other - 481,083 452,481 94%

Total New Awards - 1,956,949 1,928,347 99%

TOTALS 5,333,888$ 5,932,504$ 5,352,930$ 90%

1A portion of the grants presented cover multiple years.

23

Section 3


September 2015

REVENUE & ECONOMIC ANALYSIS

25

Revenue & Economic Analysis Summary

The data included in this section provides information on local, state and national trends impacting the City’s financial position. The following notes are provided to facilitate this section’s readability. 1. Positive Outlook – Represents favorable conditions for the local

economy. Color code – Green.

2. Cautious Outlook – Represents changing conditions that require close monitoring. Color code – Yellow.

3. Negative Outlook – Represents unfavorable conditions for the local economy. Color code – Red.

The data included in this section have been obtained from a variety of sources. Sales tax and construction related data have been obtained from internal city departments. Economic data for the State have been obtained from the Federal Reserve Bank of Dallas and may be subject to availability. National economic data were compiled with assistance from the City’s investment advisor, First Southwest Asset Management.

26

National Economic TrendsPeriod ending September 30, 2015

Gross Domestic Product (GDP)The first look at third quarter GDP showed a+1.5% annualized increase, on the surface asharp decline from the +3.9% final secondquarter gain. The Q3 number is subject to tworevisions in the coming months, and recenthistory suggests that the final reading couldlook significantly different. One veryimportant consideration is that inventoryaccumulation, which had overstated growth inthe previous two quarters, reversed itself inQ3, subtracting 1.4 percentage points from theheadline, and perhaps setting the stage foranother build-up in the final quarter of theyear. Personal consumer rose by a solid +3.2%last quarter. Auto sales were a hugecontributor, adding 0.4 percentage points tothe total. Housing rose +6.1%, whileinvestment in business equipment climbed+5.3%. Neither of these make a hugecontribution to overall GDP growth, but anyrelated drag that had existed in the past seemsto be gone.

Nonfarm PayrollsThe September employment report marked the60th straight month of job gains, but signaled asignificant deceleration from the +243,000monthly average over the prior 12 months.Nonfarm payrolls surprised to the downsidewith September gains of just +143,000 and arevision that pushed August from a previouslyreported increase of +173,000 to only+136,000. A majority of analysts viewed theSeptember report as disappointing andacknowledged that the Fed was now much lesslikely to raise rates in 2015. Unemploymentremained at a seven-year low of 5.1%throughout the quarter as the laborparticipation rate dropped to a new 38-yearlow of 62.4%. But, underlying labor conditionsstill appear quite positive. According to the JobOpenings and Labor Turnover (JOLT) surveyfor July, there were 1.4 unemployed personsfor each job opening. In July, 2009, this ratiowas 6.8.

27

HousingThe housing market continues to excel,although not all indicators flashed strength.Existing home sales, which make up about90% of the market, rose by +4.7% to a 5.55million annual pace in September. Strongsales pushed available supply down from 5.1to 4.8 months, while the median price for anexisting home rose by +6.1% on a year-over-year basis to $221,900. By contrast, new homesales surprisingly plunged -11.5% inSeptember to a 468,000 unit annual pace,while the previously reported 8-year high inAugust was revised downward from 552,000unit sales to 529,000. The number of newhomes listed for sale rose by +4.2% inSeptember to a five-year high of 225,000,pushing the average months’ supply up from4.9 to 5.8. The median price for a new homeclimbed +13.5% on a year-over-year basis to$296,900.

Retail SalesFollowing a relatively strong period of springconsumption, the consumer retrenched in thethird quarter. After posting an unchanged0.0% reading for August, headline retail salesrose by just +0.1% in September and +2.1%year-over-year. While the weakness waspartially due to a drop in service station sales(which are a direct result of falling gasolineprices), the details of the report were generallysoft. Sales ex-autos fell -0.3% and sales ex-autos and gas were unchanged. The retailsales control group, which strips out thevolatile auto, gas, and building materialscategories and is used to calculate GDP,actually contracted -0.1% in September, wellshort of the median forecast for a gain of+0.3%. Making matters worse, the controlgroup data for August was revised lower from+0.4% to +0.2% and July was cut to +0.5%from +0.6%. All of this suggests a slowing ofthe domestic economy in the near future.

28

Texas Home SalesThe well-established autumn slowingtrend reestablished itself in the thirdquarter, but as has been the case duringthe economic recovery, total home sales inTexas rose on a year-over-year basis. Theannual rate of increase during the thirdquarter of 2015 was +6.9%. A year ago,the rate of increase was just +1.5%. Theaverage home price in Texas climbed+3.3% YOY to $247,400 while availablesupply held near record lows at a very lean3.6 months. In Denton County during thethird quarter, unit home sales jumped+8.2% over the same period a year ago.The average sales price in Septemberactually dropped by -3.6% from 12 monthsearlier to $257.600, although the mediansales price rose +10.2% to $229,100. Ahistorical high was reached in May at anaverage price of $274,800. Total listingsfor Denton County are currently at 1,651units or a lean 1.9 month supply.

The paper was prepared by FirstSouthwest Asset Management, is intended for educational and informational purposes only and does not constitute legalor investment advice, nor is it an offer or a solicitation of an offer to buy or sell any investment or other specific product. Information provided in thispaper was obtained from sources that are believed to be reliable; however, it is not guaranteed to be correct, complete, or current, and is not intended toimply or establish standards of care applicable to any attorney or advisor in any particular circumstances. The statements within constitute the views ofFirstSouthwest Asset Management as of the date of the report and may differ from the views of other divisions/departments of First SouthwestCompany. In addition, the views are subject to change without notice. This paper represents historical information only and is not an indication of futureperformance.

29

Fuel Prices Outlook Positive

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 2.2% decrease from the prior quarter at the national level

and a 3.6% decrease at the state level. Staff has rated this outlook as Positive.

Source: U.S. Department of Energy

$0

$1

$2

$3

$4

$5

$6

$7

$8

$9

$10

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

4Q '11 2Q '12 4Q '12 2Q '13 4Q '13 2Q '14 4Q '14 2Q '15 4Q '15

Mill

ion

s

Do

llars

Fuel Prices

Sales Tax Texas Fuel Prices US Fuel Prices

30

Municipal Cost Index Outlook Cautious

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 4th fiscal quarter of 2015 shows an increase of 0.6% over the prior quarter and an decrease of 1.6% over the 4th

fiscal quarter of 2014. Staff has rated this indicator as Cautious.

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

227.00

228.00

229.00

230.00

231.00

232.00

233.00

234.00

235.00

236.00

4Q '13 1Q '14 2Q '14 3Q '14 4Q '14 1Q '15 2Q '15 3Q '15 4Q '15

Municipal Cost Index

31

Hotel Occupancy Tax Analysis Outlook Positive

4th Quarter FY 2014-15

Actual Y-T-D

Occupancy Tax Revenue: 576,406$ 2,168,251$

FY 2014-15 Budget 476,528$ 1,809,406$

Over(Under) Budget 99,878$ 358,845$

Hotel Occupancy Tax Budget: 1,809,406$

2,082,586$

2,168,251$

358,845$

Variance - Actual to Projection: 85,665$

Variance - Actual to Budget:

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 4th Quarter of 2015 was 17% more than budget and 9% more than the prior

year's actual. Staff has rated the outlook as positive.

FISCAL YEAR FORECAST

End of Year Projection:

End of Year Actual:

$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 2010-11 FY 2011-12 FY 2012-13 FY 2013-14 FY 2014-15

32

Sales and Use Tax Analysis Outlook Positive

4th Quarter FY 2014‐15Actual Y‐T‐D

Revenue: Gross Sales Tax Municipal Operations 612,754$ 1,884,806$ General Retail & Others 7,876,098 29,877,642 Comptroller Fees (154,508) (586,102) Amount Retained (151,418) (574,380) Total Revenue 8,182,926$ 30,601,966$

Expenses: Economic Incentives* Denton Crossing 128,129$ 515,120$ Unicorn Lake 16,015 60,271 Rayzor Ranch 271,576 1,109,709 Total Expenses 415,720$ 1,685,100$

Net Total 7,767,206 28,916,866

FY 2014‐15 Budget 6,939,367 26,325,053

Over(Under) Budget 827,839$ 2,591,813$

Sales Tax Budget: 28,145,925$ Year End Projection: 30,025,114

30,601,966

Variance to Original Budget: 2,456,041$ Variance to Year End Projection: 576,852$

Economic Development Expenditure Budget: 1,820,872$ Year End Projection: 1,761,994Year End Final: 1,685,100

Variance to Original Budget: 135,772$ Variance to Year End Projection: 76,894$

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 4th quarter of FY 2015 compared to revenues fromthe prior year 4th quarter shows a 10.35% increase, and compared to the budget shows a 5.80% increase. Staff has ratedthis indicator as Positive.

Year End Final:

$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

$6.0

$7.0

$8.0

$9.0

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

Gross Sales Tax Collections (Millions)

FY 2011‐12 Actual FY 2012‐13 Actual FY 2013‐14 Actual FY 2014‐15 Actual

33

Certificates of Occupancy Outlook Cautious

Source: City of Denton's Planning and Development 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 26% from the prior quarter and decrease 9.7% from the 4th

quarter of 2014. 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

4Q'10

1Q'11

2Q'11

3Q'11

4Q'11

1Q'12

2Q'12

3Q'12

4Q'12

1Q'13

2Q'13

3Q'13

4Q'13

1Q'14

2Q'14

3Q'14

4Q'14

1Q'15

2Q'15

3Q'15

4Q'15

Certificates of Occupancy

34

Residential Permits Outlook Positive

Source: City of Denton's Planning and Development 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 22.6% from the prior quarter and increased 9.9% from the 4th

Quarter of 2014. Staff has rated the outlook for this revenue indicator as Positive.

0.0

50.0

100.0

150.0

200.0

250.0

4Q'10

1Q'11

2Q'11

3Q'11

4Q'11

1Q'12

2Q'12

3Q'12

4Q'12

1Q'13

2Q'13

3Q'13

4Q'13

1Q'14

2Q'14

3Q'14

4Q'14

1Q'15

2Q'15

3Q'15

4Q'15

Residential Permits

35

Texas Leading Indicators Index Outlook Cautious

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 a slow down in the state's rate of growth. The index decreased by 1.8% from the prior quarter and

decreased 7.2% from the 4th quarter of 2014. Staff has rated this indicator as Cautious

100.0

105.0

110.0

115.0

120.0

125.0

130.0

135.0

140.0

4Q'05

2Q'06

4Q'06

2Q'07

4Q'07

2Q'08

4Q'08

2Q'09

4Q'09

2Q'10

4Q'10

2Q'11

4Q'11

2Q'12

4Q'12

2Q'13

4Q'13

2Q'14

4Q'14

2Q'15

4Q'15

Texas Leading Indicators Index

36

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 3.3% for the 4th quarter.

The unemployment rates for most of the other reported sectors were down from the prior quarter. As a result of

the downward trend since the high of the 1st Quarter of 2010, 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

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

Unemployment Rate Index

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

37

Section 4


September 2015

INVESTMENT REPORT

39

4th Fiscal Quarter 2015 - September 30, 2015 Page 1

INVESTMENT POOL

Policy

Par Market Book Unrealized Max. Benchmark

Portfolio: Value Value Value Gain/(Loss)1

WAM WAM YTM Yield*

Investment Pool 503,987,672$ 505,837,398$ 505,326,347$ 511,051$ 344 550 0.65% 0.24%

*Twelve month moving average of a one year

U.S. T-bill yield

% of Total

Par Market Book Unrealized Portfolio Policy

Securities By Investment Type: Value Value Value Gain/(Loss)1

WAM YTM (Book Value) Max.

U.S. Treasuries 22,000,000 22,097,838 22,052,492 45,346 323 0.57% 4.36% 100.00%U.S. Federal Agencies 242,000,000 243,135,237 242,733,724 401,513 397 0.64% 48.04% 100.00%Municipal Bonds 37,470,000 38,121,872 38,070,745 51,127 297 0.66% 7.53% 15.00%Certificates of Deposit 127,000,000 127,000,000 127,000,000 - 439 0.89% 25.13% 35.00%Commercial Paper 21,000,000 20,964,779 20,951,714 13,065 153 0.53% 4.15% 5.00%Demand Deposits 54,517,672 54,517,672 54,517,672 - 1 0.19% 10.79% -Total Portfolio 503,987,672$ 505,837,398$ 505,326,347$ 511,051$ 344 0.65% 100.00% -

Current 3 Months Ago 3 Month 1 Year Ago

Investment Pool Comparisons: 9/30/2015 6/30/2015 Difference 9/30/2014

Par Value 503,987,672$ 536,569,150$ (32,581,478)$ 474,376,251$ Market Value 505,837,398$ 537,910,259$ (32,072,861)$ 476,339,747$ Book Value 505,326,347$ 537,527,645$ (32,201,298)$ 476,136,081$ Unrealized Gain(Loss) 511,051$ 382,614$ 128,437$ 203,666$ Weighted Average Maturity 344 345 (1) 403Yield to Maturity 0.65% 0.57% 0.08% 0.51%

Portfolio Composition:

U.S. Treasuries 4.36% 4.11% 0.25% 4.64% U.S. Federal Agencies 48.04% 45.84% 2.20% 49.34% Municipal Bonds 7.53% 6.57% 0.96% 6.37% Certificates of Deposit 25.13% 22.88% 2.25% 24.36%

Commercial Paper 4.15% 2.97% 1.18% 4.20%

Demand Deposits 10.79% 17.63% -6.84% 11.09%

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

Wells Fargo Demand Deposits BNY Mellon U.S. Agency MBS 68,466,213$ 54,366,078$ 125.94%Comerica Bank Certificates of Deposit Federal Reserve U.S. Agency MBS 57,163,300$ 28,301,172$ 201.98%LegacyTexas Bank Certificates of Deposit*** Fed Home Loan Bank Standby LOC 25,845,000$ 25,062,422$ 103.12%Independent Bank Certificates of Deposit Fed Home Loan Bank Standby LOC 13,500,000$ 13,038,686$ 103.54%**Does not include FDIC insurance

***Formerly, ViewPoint Bank

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

Wells Fargo Bank Checking 55,463,212$ 53,856,217$ 54,517,672$

Compliance Statement & Review:

Assistant Director of Finance Treasury Administrator

(54,801,757)$

Director of Finance

Reviewer: Chuck Springer, CGFO Reviewer: Bryan Langley, CGFOAssistant City Manager & CFO

Withdrawals

The Quarterly Investment Report is in full compliance with the objectives, restrictions, and strategies as set forth in the City of Denton'sInvestment Policy and the Public Funds Investment Act (Texas Government Code, Chapter 2256.023).

Reviewer: Antonio Puente, Jr., CGFO Preparer: Caroline Finley

-1.30%

0.77%

> 110%

-0.30%

Pledge Required

-0.05%

> 102%

> 100%> 100%

(59) 0.14%

1.16%

29,497,651$ 29,190,266$

307,385$

-0.28%

CITY OF DENTON : QUARTERLY INVESTMENT REPORT

1 Year Ago

Difference

29,611,421$

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 asecurity 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.

40


INVESTMENT POOL

Current 3 Months Ago 3 Month 1 Year Ago 1 Year

9/30/2015 6/30/2015 Difference 9/30/2014 Difference

Par Value - U.S. Treasuries 22,000,000$ 22,000,000$ -$ 22,000,000$ -$ Par Value - U.S. Federal Agencies 242,000,000 246,000,000 (4,000,000) 234,000,000 8,000,000

Par Value - Municipal Bonds 37,470,000 34,785,000 2,685,000 29,585,000 7,885,000

Certificates of Deposit 127,000,000 123,000,000 4,000,000 116,000,000 11,000,000

Par Value - Commercial Paper 21,000,000 16,000,000 5,000,000 20,000,000 1,000,000

Demand Deposits 54,517,672 94,784,150 (40,266,478) 52,791,251 1,726,421

Total Par Value 503,987,672$ 536,569,150$ (32,581,478)$ 474,376,251$ 29,611,421$

Market Value - U.S. Treasuries 22,097,838$ 22,119,297$ (21,459)$ 22,117,852$ (20,014)$ Market Value - U.S. Federal Agencies 243,135,237 246,707,739 (3,572,502) 235,057,523 8,077,714

Market Value - Municipal Bonds 38,121,872 35,337,432 2,784,440 30,380,867 7,741,005


Market Value - Commercial Paper 20,964,779 15,961,641 5,003,138 19,992,254 972,525

Demand Deposits 54,517,672 94,784,150 (40,266,478) 52,791,251 1,726,421

Total Market Value 505,837,398$ 537,910,259$ (32,072,861)$ 476,339,747$ 29,497,651$

Book Value - U.S. Treasuries 22,052,492$ 22,068,261$ (15,769)$ 22,115,056$ (62,564)$ Book Value - U.S. Federal Agencies 242,733,724 246,403,834 (3,670,110) 234,902,406 7,831,318

Book Value - Municipal Bonds 38,070,745 35,318,681 2,752,064 30,340,496 7,730,249


Book Value - Commercial Paper 20,951,714 15,952,719 4,998,995 19,986,872 964,842

Demand Deposits 54,517,672 94,784,150 (40,266,478) 52,791,251 1,726,421

Total Book Value 505,326,347$ 537,527,645$ (32,201,298)$ 476,136,081$ 29,190,266$

Accrued Interest 1,698,498$ 1,569,501$ 128,997$ 1,396,000$ 302,498$

Cash Value - 507,535,896$ 539,479,760$ (31,943,864)$ 477,735,747$ 29,800,149$ (Total Market Value + Accrued Interest)

Unrealized Gain/(Loss) 511,051$ 382,614$ 128,437$ 203,666$ 307,385$

Change in Fair Value since 9/30/14 - (1,170,576)$ (906,881)$ (263,695)$ (1,805,166)$ 634,590$

(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 feerevenues, reserve funds for outstanding utility system revenue bonds, as well as some, but not necessarily all bond proceeds, grants, gifts andendowments. This portfolio is maintained to meet anticipated daily cash needs for the City's operations, capital projects and debt service. Inorder to meet these obligations and to minimize potential liquidation losses, the dollar-weighted stated average maturity of the investment poolshall 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 qualitysecurities for which a strong secondary market exists; (2) ensure that anticipated cash flow needs are matched with adequate investmentliquidity; (3) limit market and credit risk through diversification; and (4) attain the best feasible yield commensurate with the objectives andrestrictions set forth in the Investment Policy by actively managing the portfolio to meet or exceed the twelve month moving average yield of aone 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: 9/30/2015 6/30/2015 9/30/2014

U.S. Treasuries - Coupon 22,052,492$ 22,068,261$ 22,115,056$ U.S. Federal Agencies - Coupon 232,733,897 232,407,992 221,917,966 U.S. Federal Agencies - Callable 9,999,827 13,995,842 12,984,440 Municipal Bonds - Coupon 38,070,745 35,318,681 30,340,496 Certificates of Deposit - CDARS 61,000,000 65,000,000 49,000,000 Certificates of Deposit - Collateralized 28,000,000 35,000,000 67,000,000 Certificates of Deposit - SLOC 38,000,000 23,000,000 - Commercial Paper - Discount 20,951,714 15,952,719 19,986,872 Demand Deposits 54,517,672 94,784,150 52,791,251 Total Book Value 505,326,347$ 537,527,645$ 476,136,081$

Objective:


Summary By Security Type: 9/30/2015 6/30/2015 9/30/2014

U.S. Treasuries - Coupon 4.36% 4.11% 4.64%U.S. Federal Agencies - Coupon 46.06% 43.24% 46.61%U.S. Federal Agencies - Callable 1.98% 2.60% 2.73%Municipal Bonds - Coupon 7.53% 6.57% 6.37%Certificates of Deposit - CDARS 12.07% 12.09% 10.29%Certificates of Deposit - Collateralized 5.54% 6.51% 14.07%Certificates of Deposit - SLOC 7.52% 4.28% 0.00%Commercial Paper - Discount 4.15% 2.97% 4.20%Demand Deposits 10.79% 17.63% 11.09%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 municipalbonds 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 orbetter (maturing in less than 270 days); and local government pools & SEC registered money market mutual funds (weighted average maturity ofless than 60 days).

U.S. Treasuries - Coupon4.36%

U.S. Federal Agencies -Coupon46.06% U.S. Federal Agencies -

Callable1.98%

Municipal Bonds -Coupon7.53%

Certificates of Deposit -CDARS12.07%

Certificates of Deposit -Collateralized

5.54%

Certificates of Deposit -SLOC7.52%

Commercial Paper -Discount

4.15%

Demand Deposits10.79%

Current09/30/2015

42


INVESTMENT POOL


Summary By Issuer: 9/30/2015 6/30/2015 9/30/2014

CDARS CDs 61,000,000$ 65,000,000$ 49,000,000$ COMERICA BANK CDs 28,000,000 35,000,000 57,000,000 LEGACYTEXAS BANK CDs 25,000,000 10,000,000 10,000,000 INDEPENDENT BANK CDs 13,000,000 13,000,000 - U.S. TREASURY 22,052,492 22,068,261 22,115,056 FFCB 20,007,766 14,990,244 17,999,635 FHLB 96,028,380 95,033,292 66,111,221 FHLMC 62,518,223 64,090,782 73,202,644 FNMA 64,179,355 72,289,515 77,588,907 TEXAS A&M PERM UNIV FUND REV BDS 5,034,277 5,039,174 - WILLIAMSON COUNTY, TX GEN OBG BDS 1,681,880 1,694,976 - GARLAND, TX GENERAL OBG BONDS 3,064,092 3,090,347 3,169,114 TEXAS STATE GENERAL OBG BONDS - - 3,000,000 MCKINNEY, TX GENERAL OBG BONDS 1,247,915 - - TEXAS SCHOOL DIST GEN OBG BONDS* 27,042,581 25,494,185 24,171,381 JP MORGAN SECURITIES LLC 20,951,714 15,952,719 3,998,130 TOYOTA MOTOR CREDIT CORP - - 15,988,742 WELLS FARGO DEMAND DEPOSITS 54,517,672 94,784,150 52,791,251 Total Book Value 505,326,347$ 537,527,645$ 476,136,081$

Objective:


Summary By Issuer: 9/30/2015 6/30/2015 9/30/2014

CDARS CDs 12.07% 12.09% 10.29%COMERICA BANK CDs 5.54% 6.51% 11.97%LEGACYTEXAS BANK CDs 4.95% 1.86% 2.10%INDEPENDENT BANK CDs 2.57% 2.42% 0.00%U.S. TREASURY 4.36% 4.11% 4.64%FFCB 3.96% 2.79% 3.78%FHLB 19.00% 17.68% 13.88%FHLMC 12.37% 11.92% 15.37%FNMA 12.70% 13.45% 16.30%TEXAS A&M PERM UNIV FUND REV BDS 1.00% 0.94% 0.00%WILLIAMSON COUNTY, TX GEN OBG BDS 0.33% 0.32% 0.00%GARLAND, TX GENERAL OBG BONDS 0.61% 0.57% 0.67%TEXAS STATE GENERAL OBG BONDS 0.00% 0.00% 0.63%MCKINNEY, TX GENERAL OBG BONDS 0.25% 0.00% 0.00%TEXAS SCHOOL DIST GEN OBG BONDS* 5.35% 4.74% 5.08%JP MORGAN SECURITIES LLC 4.15% 2.97% 0.84%TOYOTA MOTOR CREDIT CORP 0.00% 0.00% 3.36%WELLS FARGO DEMAND DEPOSITS 10.79% 17.63% 11.09%Total 100.00% 100.00% 100.00%

*Individual issuers are listed on the

attached Portfolio Details Report


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 valueand to those offering repurchase agreements, collateralized CDs (including standby letters of credit), and local or state of Texas municipal securities to no greater than 15percent. 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 areno issuer limitations on U.S. Treasuries or FDIC insured products except as they pertain to the overall 35% certificates of deposit restriction.

CDARS CDs, 12.07%

COMERICA BANK CDs, 5.54%

LEGACYTEXAS BANK CDs, 4.95%

INDEPENDENT BANK CDs, 2.57%

U.S. TREASURY, 4.36%

FFCB, 3.96%

FHLB, 19.00%FHLMC, 12.37%

FNMA, 12.70%

TEXAS A&M PERM UNIV FUND REV BDS, 1.00%

WILLIAMSON COUNTY, TX GEN OBG BDS, 0.33%

GARLAND, TX GEN OBG BONDS, 0.61%

MCKINNEY, TX GENERAL OBG BONDS, 0.25%

TEXAS SCHOOL DIST GEN OBG BONDS, 5.35%

JP MORGAN SECURITIES LLC, 4.15%

WF DEMAND DEPOSITS, 10.79%

Current9/30/2015

43


INVESTMENT POOL


Maturity Time Frame: 9/30/2015 6/30/2015 9/30/2014

00-03 Months 104,517,672$ 131,159,150$ 88,791,251$ 03-06 Months 60,210,000 50,000,000 57,000,000 06-12 Months 90,000,000 109,210,000 63,375,000 12-24 Months 221,260,000 211,200,000 183,210,000 24 Months & Over 28,000,000 35,000,000 82,000,000 Total Par Value 503,987,672$ 536,569,150$ 474,376,251$

Objective:


Maturity Time Frame: 9/30/2015 6/30/2015 9/30/2014

00-03 Months 20.74% 24.45% 18.72%03-06 Months 11.95% 9.32% 12.02%06-12 Months 17.86% 20.35% 13.36%12-24 Months 43.90% 39.36% 38.62%24 Months & Over 5.55% 6.52% 17.28%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 flowbased on the anticipated needs of the City. Liquidity is achieved by matching investment maturities with forecasted cash disbursementsand by investing in securities with active secondary markets. Short-term local government investment pools and money market mutualfunds help to provide daily liquidity and may be utilized as a competitive alternative to 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


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

44


ECONOMIC SUMMARY

Interest Rate History

Source: U.S. Federal Reserve Statistical Release (H.15)

Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12Market Sector: Avg Avg Avg Avg Avg Avg Avg Avg Avg Avg Avg AvgFed Funds (effective) 0.12% 0.16% 0.18% 0.18% 0.18% 0.14% 0.09% 0.08% 0.07% 0.13% 0.16% 0.14%3-Month U.S. T-Bill 0.05% 0.15% 0.12% 0.16% 0.14% 0.10% 0.04% 0.01% 0.01% 0.08% 0.09% 0.11%2-Year U.S. T-Note 0.87% 0.96% 0.72% 0.43% 0.62% 0.70% 0.41% 0.21% 0.26% 0.34% 0.29% 0.26%

Portfolio Benchmark* 0.47% 0.42% 0.39% 0.34% 0.32% 0.30% 0.25% 0.22% 0.18% 0.15% 0.15% 0.16%Portfolio Yield 1.43% 1.22% 1.06% 0.62% 0.65% 0.66% 0.66% 0.62% 0.59% 0.58% 0.56% 0.55%

Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15Market Sector: Avg Avg Avg Avg Avg Avg Avg Avg Avg Avg Avg AvgFed 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%

*Twelve month moving average of a one year

U.S. T-bill yield

Fiscal Year:

2014-20152013-20142012-20132011-20122010-20112009-2010

QUARTERLY COMMENTARY

September 30, 2015

Source: First Southwest Asset Management Economic Summary & TexStar Monthly

Newsletter


Fiscal Year 2009-2010 Fiscal Year 2011-2012Fiscal Year 2010-2011

The third calendar quarter was dominated by concerns over China's economic slowdown and its global implications, as well asslumping worldwide equity and oil markets. In September, the Federal Open Market Committee (FOMC) decided, yet again, todefer an interest rate increase citing volatility in financial markets and negative developments abroad, presumably referring toChina and other emerging markets. The statement further noted various measures of labor market health; however, currentand future inflation assessments had softened, with price pressures slipping away from their 2% target. Market expectations forthe first Fed rate hike have now been pushed into 2016. According to the Bloomberg economist survey dated October 7, 2015,the inflation adjusted median growth forecast for third quarter GDP is 2.4%, followed by 2.7%, 2.5% and 2.7% for the next threequarters.

Fiscal Year to Date Earnings

3 Months 6 Months 9 Months 12 Months

568,824$ 612,749$ 621,193$ 515,111$

1,058,175$

1,121,491$ 1,177,337$ 1,239,869$ 1,056,309$ 1,920,154$ 2,655,725$

2,298,785$ 2,276,341$ 2,511,585$ 2,216,300$ 3,248,091$

Fiscal Year 2014-2015

1,680,154$ 1,703,496$ 1,862,207$ 1,631,563$

613,878$ 1,228,059$ 1,874,847$ 2,695,211$

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

Fiscal Year 2012-2013 Fiscal Year 2013-2014

0.00%

0.50%

1.00%

1.50%

Dec-09

Mar-10

Jun-10

Sep-10

Dec-10

Mar-11

Jun-11

Sep-11

Dec-11

Mar-12

Jun-12

Sep-12

Dec-12

Mar-13

Jun-13

Sep-13

Dec-13

Mar-14

Jun-14

Sep-14

Dec-14

Mar-15

Jun-15

Sep-15

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

FY 2009-10 FY 2010-11 FY 2011-12 FY 2012-13 FY 2013-14 FY 2014-15

45

Section 5


September 2015

PERFORMANCE REPORT

51

STRATEGICPLAN

TheCityofDentonusesaStrategicPlanasaroadmaptoachievelong‐termgoalsandobjectivesthatcapturetheCity’sVision,Mission,andValuestatements.ThefirstStrategicPlanwasformallyapprovedbytheCityCouncil inApril2011,andInJanuary2014,theCityCouncildiscussedpotentialrevisionstotheCity’sStrategicPlan.OnSeptember16,2014,theCityCouncilapprovedtheFY2014‐15StrategicPlanandassociatedkeyperformance indicatorsalongwith thebudgetitself.

TheStrategicPlanservesasthebasisforresourceallocationdecisionsthatareusedinthedevelopmentoftheFY2014‐15Budget.TheStrategicPlanisorganizedintofiveKeyFocusAreas(KFAs)andmajorgoalsassociatedwitheachKFAarealsoidentifiedbelow.

InadditiontotheaboveKFAsandgoals,theStrategicPlanalsoidentifiedanumberofspecificandactionableobjectivesfortheorganization.Thecompleteversionofthestrategicplanisprovidedintheannualbudgetdocument.Inaddition,specific performance indicators have been developed to track the City’s progress in accomplishing the goals andobjectivesidentified.Theperformanceindicatorsarepublishedquarterlyandareshownonthefollowingpages.

KeyFocusArea1:OrganizationalExcellenceGoal1.1Managefinancialresourcesinaresponsiblemanner.Goal1.2Developahigh‐performanceworkforce.Goal1.3Promoteeffectiveinternalandexternalcommunication.Goal1.4Achievehighlevelofcustomersatisfaction.Goal1.5Utilizetechnologytoenhanceefficiencyandproductivity.Goal1.6Collaboratewithlocal,regional,state,andfederalpartners.

KeyFocusArea2:PublicInfrastructure

Goal2.1OptimizeresourcestoimprovequalityofCityroadways.Goal2.2Seeksolutionstomobilitydemandsandenhanceconnectivity.Goal2.3Promotesuperiorutilityservicesandfacilities.Goal2.4Managedrainageinfrastructure.Goal2.5DevelopCapitalImprovementProgram(CIP)basedoncommunityneeds.

KeyFocusArea3:EconomicDevelopment

Goal3.1Developtargetedpoliciesandincentivestoachievedesiredeconomicgrowth.Goal3.2MakeDentonadestinationforvisitors.Goal3.3Promoteabusiness‐friendlyenvironment.Goal3.4Encouragedevelopment,redevelopment,recruitment,andretention.

KeyFocusArea4:Safe,LiveableandFamilyFriendlyCommunity

Goal4.1Enhancepublicsafetyinthecommunity.Goal4.2SeekcleanandhealthyneighborhoodsinDenton.Goal4.3Providequality,diverse,andaccessibleneighborhoodservicesforthecommunity.Goal4.4Provideandsupportoutstandingleisure,cultural,andeducationalopportunities.

KeyFocusArea5:Sustainable&EnvironmentalStewardship

Goal5.1ManageDenton’swaterresources.Goal5.2Improveairqualityandgreenhousegasmanagement.Goal5.3Improveenergyefficiencyandconservation.Goal5.4Managelanduseandpreserveopen/naturalspaces.Goal5.5Providealternativemodesoftransportation.Goal5.6Promotesustainablematerialsresourcemanagement.Goal5.6Encouragelocalfoodproduction.

52

Thematrixbeloworganizes theKeyFocusAreas(KFAs)byselectserviceareas in theorganization. WhileeverydepartmenthassomelevelofresponsibilityforeachKFA,thematrixisintendedtoonlyhighlighttheprimarydepartmentsresponsibleforeachKFA.

SERVICEAREA KFA1 KFA2 KFA3 KFA4 KFA5 UTILITIES Electric Water Wastewater SolidWaste INTERNALSERVICES TechnologyServices MaterialsManagement Fleet Risk NEIGHBORHOODSERVICES BuildingInspection CommunityImprovementServices Libraries ParksandRecreation Planning GasWellReview CommunityDevelopment PUBLICSAFETY AnimalServices Fire Police MunicipalCourt TRANSPORTATION Airport Streets Traffic/Transportation ADMINISTRATIVESERVICES CityManager’sOffice EconomicDevelopment FacilitiesManagement Finance HumanResources InternalAudit Legal PublicCommunications KeyFocusArea1:OrganizationalExcellenceKeyFocusArea2:PublicInfrastructureKeyFocusArea3:EconomicDevelopmentKeyFocusArea4:Safe,LiveableandFamily‐FriendlyCommunityKeyFocusArea5:Sustainable&EnvironmentalStewardship

53

City of Denton, Texas Strategic Plan

Executive Summary

Key Focus Area

Number of Measures

On orAbove Target

Number of MeasuresBelow Target

Number of Measures

Significantly Below Target

1) Organizational Excellence

20 3 2

2) Public Infrastructure 15 0 9

3) Economic Development 13 2 1

4) Safe, Liveable, and Family Friendly Community

17 5 6

5) Sustainable and Environmental Stewardship

11 2 2

Total 76 12 20

These measures have either reached or exceeded established goals.

The measures rated “Below Target” are within 5% of reaching established goals.

The measures rated “Significantly Below” are greater than 5% from reaching established goals.

General Overview of the 2014-15 Strategic Plan

70%

11%

19%

On or Above Target

Below Target

Significantly Below Target

* There are 4 dashboard measures were data is not yet available from departments.

54

City of Denton, Texas

Strategic Plan

Performance Report Dashboard

Key Performance Indicators (KPIs) DepartmentFY 13-14Actual

FY 14-15Target

4thQtr

FY 14-15Year-to-Date

Progress Indicator

Goal 1.1 Manage financial resources in a responsible manner.

% of Invoices paid within 30 days Finance 91% 93% 92% 92%

Percentage of actual General Fund revenue as compared to budgeted revenue(1) Finance 100% 100% 101% 102%

Percentage of actual General Fund expenditures as compared to budgeted expenditures(1) Finance * <100% 93% 99%

Percentage rate of investment return Finance 0.51% 0.45% 0.65% 0.65%

Number of internal control or Lean Government projects implemented

Internal Audit 2 5 5 15

Key Focus Area 1: Organizational Excellence

(1) Year-to-date and quarterly information based upon seasonal budgetary information.

55


Strategic Plan



FY 14-15Target

4thQtr


Progress Indicator

Goal 1.2 Develop a high performance work force.

Percentage rate of employee turnover HR 9.7% <10.0% 2.6% 10.1%

Percentage of performance reviews completed within 30 days of due date

HR 71% 100% 94% 94%

Number of health risk assessments performed Risk Mgmt. 797 800 61 828

Percentage rate of clinic utilization based on available appointments

Risk Mgmt. 92% 80% 88% 92%

Costs per $100 of payroll for workers compensation

Risk Mgmt. $0.87 $0.75 $0.45 $0.38


56


Strategic Plan



FY 14-15Target

4thQtr


Progress Indicator

Goal 1.3 Promote effective internal and external communication.

Number of hits on City’s website (in millions) Pub. Comm. 1.5 1.5 0.4 1.6

Number of followers on all social media sites (1) Pub. Comm. 73,165 75,000 109,282 109,282

Percent of online citizen inquiries responded to within 10 business days

City Manager’sOffice

100% 100% 100% 100%


57


Strategic Plan



FY 14-15Target

4thQtr


Progress Indicator

Goal 1.4 Achieve high level of customer satisfaction

Average number of days from specifications to award for standard purchases

MaterialsMgmt.

* 75 68 68 *

Percentage of contracts reviewed within five days Legal 100% 100% 100% 100%

Percentage of Customer Service requests responded to within 24 hours

Planning & Development

100% 100% 100% 100%

Percentage of new commercial permits reviewed

within 10 days

BuildingInspections

96% 95% 71% 62%

Percentage of fleet available Fleet 97% 95% 94% 94%

Percentage of first-contact resolution for customers

CustomerService 93% 85% 94% 91%

Average speed of calls answered (in seconds)CustomerService

91 60 38 55


* Data not currently available.

58


Strategic Plan



FY 14-15Target

4thQtr


Progress Indicator

Goal 1.5 Utilize technology to enhance efficiency and productivity.

Percentage of employees that rate IT services as good or better

TechnologyServices

97% 98% 99% 99%

Percentage of work requests completed within five days

TechnologyServices

90% 95% 99% 99%

Percentage of payment transactions completed electronically

Customer Service 53% 52% 57% 56%

Percentage of customers that receive electronic billing statements

Customer Service

9% 11% 13% 13%

Goal 1.6 Collaborate with local, regional, state, and federal partners.

Number of City personnel, elected, and appointed officials serving in a leadership roles in regional, state, and federal associations


45 45 45 45

Percentage of major legislative initiatives accomplished


* 100% * * *


* Data not currently available.

59


Strategic Plan



FY 14-15Target

4thQtr


Progress Indicator

Goal 2.1 Optimize resources to improve quality of City roadways.

Number of traffic signs serviced Traffic * 2,000 555 2,974

Number of traffic signals serviced Traffic 888 1,140 185 992

Lane markings replaced (feet) Traffic 245,448 225,000 82,793 238,244

Square yards of asphalt roadway reconstructed(2) Streets 56,693 112,736 9,059 42,882

Square yards of asphalt roadway overlaid (2) Streets 122,104 86,956 17,241 45,574

Square yards of asphalt roadway micro-sealed (2) Streets 93,306 114,285 0 72,468

Goal 2.2 Seek solutions to mobility demands and enhance connectivity.

Number of airport takeoffs/landings Airport 156,711 164,000 50,167 165,454

Key Focus Area 2: Public Infrastructure

(2) FY 14-15 data only reflects projects that have been completed and closed.

60


Strategic Plan



FY 14-15Target

4thQtr


Progress Indicator

Goal 2.3 Promote superior utility services and facilities.

Number of work orders completed Facilities 14,934 13,000 3,677 14,519

Gallons of finished water produced (billion of gallons)(1) Water 6.16 6.97 2.61 6.36

Feet of water mains replaced Water 10,995 14,025 3,660 11,197

Number of valves exercised Water * 7,100 933 4,221

Number of hydrants painted Water * 1,025 80 224

New water meters installed Water 703 530 183 837

Number of water meters replaced Water * 2,000 856 3,537


61


Strategic Plan



FY 14-15Target

4thQtr


Progress Indicator

Goal 2.3 Promote superior utility services and facilities

Gallons of wastewater treated through plant (billion of gallons)

Wastewater 4.926 5.108 1.328 5.834

Feet of wastewater mains replaced Wastewater 8,500 8,000 2,790 8,157

Feet of wastewater lines cleaned Wastewater 582,100 450,000 128,014 537,317

Number of annual grease trap inspections EnvironmentalServices

* 200 65 252

Percentage of electric system utilized (load factor)

Electric 46% 46% 48% 48%

Goal 2.4 Manage drainage infrastructure.

Lane miles of street sweeping completed Drainage 5,574 5,200 1,558 6,122

Cubic yards of material collected in street sweeping

Drainage 2,980 4,000 511 3,035

Feet of concrete channel cleaned Drainage 37,443 35,000 705 45,782


62


Strategic Plan



FY 14-15Target

4thQtr


Progress Indicator

Goal 2.5 Develop Capital Improvement Program (CIP) based on community needs.

Number of projects in process CIP 798 750 969 969

Percentage of GO bonds issued (based on recommended packages presented to voters)

CIP * 25% 26% 26%


63


FY 14-15Target

4thQtr

FY 14-15Year-to-

DateProgress Indicator

Goal 3.1 Develop targeted policies and incentives to achieve desired economic growth.

Increase in residential and commercial property values

Finance * 5% 8.54% 8.54%

Increase in owner-occupied housing Community Development

* 5% * * *

Increase in average value of new housing construction

Finance * 5% 7% 8% *

Goal 3.2 Make Denton a destination for visitors.

Hotel occupancy rates CVB 57% 62% 64% 62%

Increase in tourism spending (in millions) CVB * 4.9 1.1 3.7

Increase in number of festival/event attendees CVB/ Parks * 28,000 191,100 215,405

Goal 3.3 Promote a business-friendly environment.

Percentage of Certificates of Occupancyreviewed within 10 days

Building Inspections

97% 95% 95% 98%

Percentage of Tenant Finish Outs reviewed within 10 days


97% 95% 92% 92%


Strategic Plan


Key Focus Area 3: Economic Development

64


Strategic Plan



FY 14-15Target

4thQtr


Progress Indicator

Goal 3.3 Promote business-friendly environment.

Percentage of pre-applications reviewed and comments sent to the applicant by the published deadline

Planning 90% 90% 98% 94%

Percentage of Plats reviewed and comments sent to the applicant by the published deadline

Planning 90% 90% 97% 91%

Percentage of Specific Use Permit applications reviewed and sent to the applicant by the published deadline

Planning 90% 90% 100% 100%

Percentage of Zoning Change applications reviewed and sent to the applicant by the published deadline

Planning 90% 90% 100% 100%

Increase Return on Investment (ROI) of incentives awarded (1)

Economic Development

333% 350% * * *

Increase in net sales tax collections related to Economic Development incentives


* 5% 26% 39%


(1) Information expected to be available in December 2015.

65


Strategic Plan



FY 14-15Target

4thQtr


Progress Indicator

Goal 3.4 Encourage development, redevelopment, recruitment, and retention.

Increase in ratings of business climate in the community (1)


* 5% * * *

Increase in average household income Economic Development

$43,976 5% 10% 10%

Number of business retention visitsEconomic Development

108 100 20 131

Percentage rate of unemploymentEconomic Development 4.0% 5.0% 3.3% 3.3%

Increase in new jobs created Economic Development 35,521 5% 4% 4%


(1) Information expected to be available in December 2015.

66


Strategic Plan



FY 14-15Target

4thQtr


Progress Indicator

Goal 4.1 Enhance Public Safety in the Community.

Number of stakeholder meetings conducted Police 586 100 183 357

Average number of minutes for patrol response time from dispatch to arrival on scene

Police 8:25 6:00 7:33 7:48

Percentage of crime reports submitted through online self reporting system

Police 20% 10% 18% 18%

Live animal release rate for all animals housed at the Denton Animal Shelter

Police 86% 75% 88% 87%

Number of bicycle safety courses taught Police 2 1 1 1

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

67


Strategic Plan



FY 14-15Target

4thQtr


Progress Indicator

Goal 4.1 Enhance Public Safety in the Community.

Percentage of active structure fires responded to in five minutes or less

Fire 44% 90% 28% 46%

Number of inspections completed for commercial /industrial / multi-family structures

Fire 4,830 4,320 855 4,066

Number of hours completed to enhance current training program to improve alignment with the requirements of the Texas Commission on Fire Protection and ISO

Fire 36,309 36,000 7,983 36,162

Number of cases processed Muni Court 35,215 37,000 8,231 30,279

Goal 4.2 Seek clean and healthy neighborhoods in the City of Denton.

Number of food establishments inspectedBuilding Inspections

1,268 1,200 338 1,721


68


Strategic Plan



FY 14-15Target

4thQtr


Progress Indicator

Goal 4.2 Seek clean and healthy neighborhoods in the City of Denton.

Percentage of food establishments with an 80 or better rating


93% 95% 97% 95%

Number of health (food handler) cards issuedBuilding Inspections

2,693 3,000 474 2,503

Number of code compliance or follow-up inspections


6,087 2,500 469 2,829

Percentage of nuisance violations abatedCommunity Imp. Services

99% 90% 100% 100%

Percentage of minimum building standardviolations abated

Community Imp. Services

93% 85% 97% 98%

Percentage of zoning violations abatedCommunity Imp. Services

99% 85% 100% 99%

Number of dangerous buildings repaired or demolished

Community Imp. Services

31 40 7 23

Percentage of gas well drilling and production sites that passed semi-annual inspections

Gas Wells 100% 95% 100% 100%


69


Strategic Plan



FY 14-15Target

4thQtr

FY 14-15Year-to-

DateProgress Indicator

Goal 4.3 Provide quality, diverse, and accessible neighborhood services for the community.

Acres of parks maintained per full-time

equivalent Parks 52.4 52.4 50.1 50.1

Total number of attendees at park facilities per full-time equivalent

Parks 18,736 17,320 8,565 20,223

Acres of park per 1,000 population Parks 4.17 4.17 4.17 4.17

Satisfaction rating of “good” or “excellent” for

programming /number of ratings receivedParks 4.6/3,036 4.5/3,600 4.7/513 4.7/1,289

Percentage of programs offered that made participation requirements

Parks 92% 94% 92% 95%

Total number of program attendees Library 50,940 40,000 12,883 43,479

Total number of library visits Library 549,987 575,000 147,618 521,564


70


Strategic Plan



FY 14-15Target

4thQtr


Progress Indicator

Goal 4.3 Provide quality, diverse, and accessible neighborhood services for the community.

Total circulation, including checkouts and renewals of physical items

Library 1,255,577 1,200,000 318,597 1,198,798

Number of Ebranch visits: webpage, website, mobile app, and catalog hits Library 905,422 800,000 207,472 794,324

Total Ebranch circulation database hits, electronic content download

Library 105,110 100,000 76,841 206,563


71


Strategic Plan


Key Focus Area 5: Sustainable & Environmental Stewardship


FY 14-15Target

4thQtr


Progress Indicator

Goal 5.1 Manage Denton’s water resources.

Gallons of sanitary overflow Wastewater * <100,000 4,075 106,380

Goal 5.2 Improve air quality and greenhouse gas management.

Percentage of alternative fuel used from total fuel consumed

Environmental Services

* 57% 73% 50%

Number of alternative fuel vehicles Fleet * 65 187 187

Goal 5.3 Improve energy efficiency and conservation

Decrease in municipal energy use annuallyEnvironmental Services

* -5% +5% +6%

Percentage of Non-Solar Energy Rebate funding used from base amount


* 75% 100% 100%

Percentage of Solar Energy Rebate funding from base amount


* 75% 100% 100%

Percentage of renewable energy used by City of Denton facilities


* 55% 78% 78%

72


Strategic Plan




FY 14-15Target

4thQtr


Progress Indicator

Goal 5.4 Manage land use and preserve open/ natural spaces.

Amount of Non-upland Habitat Environmentally Sensitive Land removed from protection through Alternative Development Plans

Environmental Services * 0 0 0 *

Amount of Upland Habitat Environmentally Sensitive Land removed from protection through Alternative Development Plans

Environmental Services * 0 N/A 0 *

Percentage of approved Alternative Development Plans addressing water quality as a component of landscaping or parking

Environmental Services * 100% N/A 100%

Goal 5.5 Provide alternative modes of transportation.

Number of Bike and Pedestrian Action Plan components initiated

Transportation * 12 10 31

Total number of riders on DCTA transit system (bus and A-Train)

Transportation 2.1 2.4 0.5 2.4

73


Strategic Plan




FY 14-15Target

4thQtr


Progress Indicator

Goal 5.6 Promote sustainable materials resource management.

Pounds of waste disposed per capitaSolid Waste

1,996 1,852 415 2,021

Percentage of waste diverted from the landfillSolid Waste

37% 40% 32% 35%

Goal 5.7 Encourage local food production.

Total cumulative acres of community gardens Environmental Services * >1.0 19 19

74

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