Quarterly Financial Report Q3 2013 - Vancouver, Washington

"A colorful past, a bright future"

Quarterly Financial Report

Third Quarter 2013

Third Quarter 2013 Financial Report City of Vancouver 11

Third Quarter 2013 Financial Report (This report contains un-audited financial information as of October 20, 2013)

Table of Contents

Section Page

I. Executive Summary 3 II. Economic Report 4 III. Financial Results 11 IV. Outstanding Debt 24 V. Investments 24 VI. Interfund Loans 26

Attachments

A Expenditure Summary by Fund 27 B Revenue Summary by Fund 29 C Outstanding Debt 31 D Investment Portfolio Tables 33

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


I. Executive Summary

The national economy officially is out of the recession. Estimated annual growth in real U.S. Gross Domestic Product for the third quarter was 2.5%, according to a preliminary estimate released by the Bureau of Economic Analysis, up from a revised 1.1% annualized rate experienced in the first quarter. The national unemployment rate continued to decline through the third quarter reaching 7.2%, below the 7.8% rate experienced at the end of 2012. General Fund revenues in the third quarter of 2013 totaled $91.4 million, or 70% of the forecast for the year. Grant revenues in the General Fund are coming in slower than anticipated due to the lag in expenditures of the grant revenues. Expenditures related to grants are also running significantly below budget. Other General Fund revenues are coming in as anticipated. Revenues in all city funds seem to be on track and will likely come in as forecasted by the end of 2013.

Following is detailed information on the main revenue sources of the General Fund. Cumulatively, the seven major sources of revenue listed on the chart below represent more than 82% of the total forecasted revenues in the City’s General Fund.

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

General Fund expenditures in the third quarter of 2013 were $87.7 million, or 68% of the budget, approximately $3.8 million higher than the comparable 2012 expenditures. The General Fund operating cash balance was $38.1 million at the end of September 2013.


II. Economic Report The world economy continued to improve through the third quarter of 2013. The annual rate of growth of Gross Domestic Product in the third quarter of 2013 is estimated to be 2.5%, according to a preliminary estimate released by the Bureau of Economic Analysis. For all of 2012, Real GDP increased by 2.2%.1 Most economic indicators are showing signs of improvement: the unemployment rate continues to decline, the housing sector is showing more activity and increasing housing prices, and consumer confidence continues to improve. The following is specific information related to some of the major national economic indicators. The national seasonally adjusted unemployment rate has been coming down over the last three months reaching 7.2% in September, 0.6% lower than the reading at the end of 2012. The numbers of marginally attached and discouraged workers are slowly decreasing as well. The marginally attached workers are not considered unemployed because they did not actively look for work in the four weeks preceding the employment survey.

The September press release from the Federal Open Market Committee confirmed that “. . . economic activity has been expanding at a moderate pace. Some indicators of labor market conditions have shown further improvement in recent months, but the unemployment rate remains elevated. Household spending and business fixed investment advanced, and the housing sector has been strengthening, but mortgage rates have risen further and fiscal policy is restraining economic growth. …Longer-term inflation expectations have remained stable.”2

• One of the major measures of consumer confidence, the Conference Board’s compiled Index of Consumer Confidence, indicates that during the last quarter consumer confidence remained at the higher reading level of 79.9 since the beginning of recovery, compared to a reading of 58.6 at the end of December 2012. The largest increases are attributed to the perceived improvements of the job market and buying plans for homes and cars. The Index is based on consumer perceptions of current business and

1 http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm, Bureau of Economic Analysis 2 FOMC Press Release, September18, 2013 http://www.federalreserve.gov/newsevents/press/monetary/20130918a.htm


http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm

http://www.federalreserve.gov/newsevents/press/monetary/20130918a.htm

employment conditions, as well as consumer expectations for the following six months period. The level of consumer confidence is associated with consumer anticipation of the future developments in the economy and is utilized as an indicator of the likely general direction of consumer spending in the coming months.

The US Conference Board tracks economic indicators in ten different areas to assess the health of the economy and to evaluate the direction of economic development in the nearest future. The cumulative product of the ten indicators is called the US Leading Economic Index. The US LEI increased 1.2% in July and August 2013, pointing to growth environment. According to Ataman Ozyildirim, Economist at The Conference Board: “If the LEI’s six-month growth rate, which has nearly doubled, continues in the coming months, economic growth should gradually strengthen through the end of the year. Despite weakness in residential construction, consumer expectations, and the stock market, improvements in the LEI’s labor market and financial components, as well as new manufacturing orders, drove this month’s gain.”3 Due to the recent federal shutdown, updated information through the end of September is being delayed, with the unknown release date.

3 The Conference Board US Business Cycle Indicators, US Leading Economic Indicators for the U.S. Increases, September 19, 2013, http://www.conference-board.org/data/bciarchive.cfm?cid=1&pid=4943


State and Local Economy • The Washington Economic and Revenue Forecast Council’s September Economic and

Revenue forecast states that the “Washington economy continues to expand at a moderate pace.” “Employment and income growth have been close to the forecast and historical estimates were revised up indicating a slightly stronger local economy. On the downside, housing permits have weakened and mortgage rates have jumped, threatening to slow down the housing recovery”.4 The outlook for improvement remains positive. State revenues are coming in higher than the forecast due to slightly stronger economy than was anticipated.

• At the national level, housing starts in the third quarter of 2013 were on a slightly declining

trend, following an upward trend through May of this year. The declines were driven by a downswing in the multifamily component. Multifamily component tends to be volatile.5 Housing starts measure construction of residential units per month. The graph below shows national data.

4. Economic and Revenue Update, State Economic and Revenue Forecast, State of Washington, http://www.erfc.wa.gov/publications/documents/sep13pub.pdf 5 http://www.nasdaq.com/markets/us-economic-calendar.aspx


• The City of Vancouver experienced an unprecedented slowdown in the number and valuation of residential permits issued in late 2008 through 2011. The number of residential permits is the local data equivalent for housing starts. In 2012, the City saw a welcome change in this trend – a significant increase in the number of residential units permitted and their respective valuation. The 2013 activity is consistent with that in 2012. There were 223 single family permits issued through the third quarter of 2013, valued at $23.1million.

• Similarly to the national trends, the City has been seeing an increase in the number of multifamily units permitted within the city limits. A total of 323 multi-family units were permitted in 2012, consistent with 2011 which had 317 multi-family permits issued. So far in 2013, a total of 657new multi-family units were permitted.

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


• There has been a significant decline in commercial permitting activity in years 2009-2010, reflecting the downturn in the economy. The trend somewhat changed in 2011, when several large commercial projects were permitted, several of those in the Port of Vancouver. There were 36 commercial permits issued in 2011, valued at $186.8 million, compared to 34 commercial permits issued in 2012, valued at $72.3 million. In the three quarters of 2013 the number and valuation of the commercial permits is comparable to the data from the last several years. Several projects with higher valuation were permitted.

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

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

Consumers (CPI-U) on a year over year basis declined from 3% at the end 2011 to an annual rate of 1.8% through June 2013, as reported by the U.S. Department of Labor. Inflation has been fluctuating between 1.5% and 2% annual estimated rates. The graph below shows annualized inflation rate changes.


• The local Portland-Vancouver metro inflation rate is published twice a year by the Bureau of Labor Statistics. The metro inflation rate (CPI-U) for the 12 month period ending in December 2012 was 2.1%, compared to 3.1% in 2011. Prices in the Portland Metro area increased by 1.3% in the first half of 2013, largely driven by increasing prices of food and shelter. (Over the past 12 months, the CPI-U rose 2.2%, after a 3.9% reduction in the price of gasoline is factored in).6

Data prepared by Bureau of Labor Statistics

• According to the Bureau of Labor Statistics, the county and the city estimated unemployment rate at the end of August 2013 were at 8.3 and 8.5 percent, respectively, more than a whole percentage point higher than the Portland Metro estimated unemployment rate. In the last several months, the estimate was revised upwards by more than a percent in the following month, after the numbers were finalized. The Bureau of Labor statistics has revised the City’s unemployment rate back to January of 2009. The resulting rate is significantly higher than was previously indicated, but closer in line with the Clark county unemployment rate.

6 http://www.bls.gov/ro9/cpiport.htm


Data provided by the Bureau of Labor Statistics

• Home sales are cyclical. Typically, they increase in the second and third quarters of the year. Home prices continue to stabilize nationally and locally, according to the S&P’s Case-Shiller Home price Index. Data through July 2013 indicates that locally, prices have started to increase significantly. Housing prices for the Portland metro area are estimated to have increased by 12.2% on a year-over-year basis as of July 2013.

Data source: S&P, www2.standardandpoors.com

• The median home price for Clark County reached the same median home price range experienced in the county in 2004. The median sale price in Vancouver is estimated at $204,000, representing an 11.8% increase in value over the last 12 months as of September of 2013. The graph below represents home sales and changes in the median home price over time.


Source of Data: Zillow

III. Financial Results General Fund REVENUES

General Fund revenues through the third quarter of 2013 totaled $91.4 million, or 70% of the forecast for the year, very consistent with the data from the last four years. Following is detailed information on the main revenue sources of the General Fund. Cumulatively, the seven chief sources of revenue listed on the chart below represent more than 82% of the total forecasted revenues in the City’s General Fund.


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

Property Tax

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

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

• By Council action, there was a 1% property tax levy increase for 2013 taxes. The total City

of Vancouver levy rate in 2013 is $3.1722 per $1,000 of assessed value. • The City experienced a 20% combined reduction in assessed valuation between 2009

and 2011, following by an additional 3.5% reduction in 2012 for 2013 taxes. The reduction in assessed valuation resulted in an increase of the city’s property tax levy rate, but did not have any impact on the revenues. Preliminary indicators point to an increase in the City’s assessed valuation for the 2014 taxes.

• A total of $24.3 million was collected through the third quarter of 2013 in property taxes,

in line with projections.


Sales Tax

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

• A total of $20.2 million in sales tax revenue was received through the third quarter of

2013, or 76% of forecast. Collections are approximately $1 million higher than those in 2012. It is likely that Sales Tax revenue will exceed projections by approximately $1 million by the end of the year. In mid-2011, the City started receiving monthly installments of the state sales tax credit for the Local Revitalization Program, ($220,000 annually). This new sales tax revenue helps fund the bonds issued in 2011 to fund the Waterfront Access project. The new revenue is included in the Sales Tax projection for the year and in the information on revenue received below.


• Growth in taxable retail sales in past years was fueled by a robust real estate market and new construction. Construction and real estate related sectors (construction, building materials/hardware, furniture and home furnishings and appliances) had a double-digit growth in the City between 2005 and 2007. Retail sales at the national level are higher than those in 2008. In 2012, two major sectors of sales tax categories saw improvement in the city. These were related to retail trade and construction. This trend continues into 2013.

Taxes on Privately Owned Utilities • Vancouver collects a 6% utility tax on electrical, natural gas and telephone services

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

• Utility tax on privately owned utilities generated $13.9 million through the third quarter of

2013, slightly exceeding collections during the comparable period of time in 2012. The City received a $1.8 million Brokered Natural Gas one-time reimbursement payment for deferred taxes from 2009 and 2010 which took place in early 2011. It was a one-time event.

• Natural gas tax revenues through the third quarter of 2013 totaled $2.1 million, or 80% of

the forecast for the year, approximately $330 thousand higher than was received through the third quarter of 2012. Collections to-date are on forecast.

• Telephone tax revenues through the third quarter of 2013 totaled $3.7 million, or 72% of

the forecast for the year, approximately $200 thousand below the 2012 third quarter collections. Over the last three years, the City has seen a 7.8% reduction in revenues from this tax. So far, the collections in 2013 are approximately 4% below the 2012 collections during the comparable time period. The forecast for the year anticipated a 2.2% reduction in 2013 compared with the 2012 revenues. This revenue is likely to come in slightly lower than forecasted, by approximately $200 thousand.


• A total of $6.6 million was collected in electrical tax revenue through the third quarter of

2013, approximately $100 thousand below collections during the same period of time in 2012.

• The revenue from cable franchise fees received through the third quarter of 2013 totaled $1.4 million, or 82% of the forecast for the year, higher than anticipated due to some timing irregularities of revenue receipts. Cable franchise revenue is likely to come in as forecasted.

Water, Sewer, Storm Water and Solid Waste Taxes

• The City Utility tax on Water, Sewer and Storm Water utilities is currently set at 20%. • Prior to 2010, the City charged a solid waste franchise fee for garbage collection services

to fund operations of the Solid Waste fund with a portion of the fees, equivalent to approximately a 12% tax rate, deposited into the General Fund for general use. In 2010, the franchise fee portion, (related to the general use), was converted to a utility tax of 20%.

• Through the third quarter of 2013, the City received $13.7 million in utility tax on city-

owned utilities, compared with $12.9 million collected during the comparable time period in 2012. The underlying utility rates were increased by 5% in Water Utility in 2013, so the increase in revenues is primarily driven by the rate increase.


• In 2012, residential water revenues generated 82% of the total water user revenues, while residential sewer fee revenues made up 69% of the total sewer user revenues. Similar proportionality of revenue is anticipated to take place in 2013.

Grant & Entitlement Revenues • Grant revenues recognized through the third quarter of 2013 were $0.8 million, or 22% of

the anticipated grant revenues to be received in 2013. The majority of grants reimburse the City for the eligible expenses after these expenditures occur. There have been delays in hiring under one of the largest grants that funds positions in Police.

Charges for Goods and Services Through the third quarter of 2013, the City recorded approximately $4.3 million in charges for services, not taking into account internal charges for services provided by City agencies to each other. The largest program areas that generate fee revenue are the Development Review Services and Recreation programs. Land Use and Other Planning Permits

During 2008, 2009 and 2010, the City experienced a significant decrease in both the number of single family residential permits issued and in their valuation. The collections in 2011 were 10% greater than those in 2010. In 2012, permit collections remained at the level of the 2011. Collections are slightly lower in 2013 -- only $352.6 thousand was collected in planning permits, compared to collections of $435 thousand during the same time period of 2012. Planning permit revenue in the General Fund in 2013 is coming in at the 2010 levels, significantly reduced from the 2012 levels, and will likely be $150 thousand short of forecast by year end.


Recreation Program Fees A total of $3.5 million in recreation fees was collected through the third quarter of

2013, almost exactly the amount collected during the comparable time period of 2012. In 2012, reductions on the expenditures side were implemented to balance them to the lower fee and permit revenues. It appears that the activity remains at the reduced levels experienced over the last two years.

EXPENDITURES

• General Fund expenditures through the third quarter of 2013 were $87.7 million, or 66% of the budget, approximately $3.8 million higher than the comparable 2012 expenditures, and slightly below budget.

• Expenses vs. budget by category within the General Fund are shown in the chart below. The pace of spending appears to be in line with that experienced in 2012 and will likely result in budget savings by the end of the year.

• Salaries and benefits expenditures totaled $32.7 million through the third quarter of 2013, compared to the budget of $47.3 million and $33.1 million spent in the three quarters of 2012.

• General Fund expenditures in the supplies and services category through the third quarter of 2013 were at $7.9 million, approximately $0.6 million lower than those during the comparable period of 2012.

• The intergovernmental category of expenditures includes payments by the City to other jurisdictions based on inter-local agreements in place and internal transfers supporting other funds, including the debt fund and the fire and street funds. Expenditures in the


Intergovernmental category reached $41.8 million, approximately $3.8 million higher than those during the third quarter of 2012.

Cash Balance

• The General Fund operating cash balance was $38.1 million at the end of September 2013. This is $11.9 million higher than the cash balance at the end of September 2012.

• The General Fund emergency reserve was $10.1 million at the end of June 2013, compared to $8.9 million in June 2012. Council updated the financial policy related to the emergency reserve balance in 2012. In previous years, the balance was based on 7% of the prior year’s General Fund revenues. The new policy requires the emergency reserve balance to equal 7% of actual external revenues in the preceding fiscal year for the General, Street, and Fire Funds. These funds are intended to be used only for extraordinary events, such as natural disasters.

Fund Balance • The cash balance represents a snapshot on a particular date, while the fund balance

factors in revenues that are anticipated to be received by the end of the year and expenditures that are anticipated to happen through the end of the year.

• The undesignated fund balance in the General Fund at the end of 2012 was $50.4 million. A portion of the fund balance of $0.9 million represents the long term notes receivable and capital assets held for resale. The remaining balance is composed of the Restricted, Committed Assigned and Unassigned balances. The Restricted balance of $1 million represents the grant revenue received in advance of expenditures and the liabilities resulting from accepting the COPS grant in police. The Committed balance represents reserves in accordance with the City Financial Policies: the City Emergency reserve of $9.9 million, Revenue Stabilization reserve of $3.2 million, reserve restricted for capital purposes of $0.9 million and the working capital of $26 million. The working capital is required to ensure sufficient cash flow in the fund. The balance pays for the ongoing operations of the General Fund when the incoming seasonal revenues are not sufficient to cover the expenses and eliminate the need for short term borrowing. The Assigned reserve of $4 million represents funding of 50% of accrued compensated absences. The remaining portion of the balance of $4.8 million was unassigned at the end of 2012. A portion of the Un-assigned balance will be utilized during the 2013-2014 biennium to fund carry-forward appropriation requests.

Street Fund • Expenditures in the Street Fund through September 2013 were at $8.7 million, or 53% of the

budget, approximately $2 million lower than during the comparable period of 2012. Due to the timing of the construction season, expenditures tend to be significantly higher in the second and third quarters of the year.


• Third quarter 2013 Street Fund revenues, excluding a budgeted general fund transfer, totaled $4.4 million, compared to $3.8 million collected in the three quarters of 2012. This fund’s largest sources of revenue are state shared revenues from the motor vehicle fuel tax (MVFT), real estate excise tax (REET), and a transfer from the General Fund.

• Motor Vehicle Fuel Tax (MVFT) revenues were $2.5 million at the end of September of 2013,

in line with MVFT collections during the comparable time period of 2012. This revenue source is a set tax per gallon that does not depend on the price of gasoline. The significant increase in gasoline prices nation-wide that were experienced over the past two years resulted in declining gasoline consumption in the state. The decline in consumption has been negatively impacting tax revenue collections state-wide and decreased the proportionate share of the tax received by the City.

Real Estate Excise Tax (REET)

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

• REET revenue was growing rapidly in years 2004-2006 fueled by the favorable real estate

market and increasing home prices. REET revenues declined significantly since the housing bubble in 2005 and 2006. The 2011 and 2012, collections showed some improvement over the low in 2010. The 2013 collections indicate an upward trend. The real estate market is showing signs of improvement. It is highly likely that the city will see increased REET revenues in the remainder of this year. To-date, revenue collections have exceeded the total revenue received through the end of the year in 2012.

• REET revenue received through the third quarter of 2013 totaled $1.5 million, approximately

$0.5 million higher than the comparable 2012 collections. The graph below demonstrates


fluctuations in REET collections over the past eleven years. It is highly likely REET collections by the year end will exceed the forecast by approximately $500 thousand.

Consolidated Fire Fund

• The City has an Operating Fire Fund and the Capital Fire Fund, largely funding vehicle replacements and set up. The Operating Fire Fund is fully supporting the Capital Fire Fund. Financial information in Attachment A and B contains the combined financials of the operating and capital funds, including the interfund transfer. The graph below represents the operating funds’ financial information.

• Operating Fire Fund revenues (exclusive of General Fund support, the Fire District 5 transfer and the transfer between Fire Operating and Capital) through the third quarter of 2013 were $1.5 mil, mostly representing permit fees and grant revenue.


• Total operating Fire Operating expenditures through the third quarter were $24.1 million, including the transfer from Fire Operating to Fire Equipment Fund.

Building Inspection Fund

• Building inspection fee revenues received through the third quarter of 2013 totaled $3.1 million approximately $800 thousand higher than the revenues received during the comparable period of 2012. There is a noticeable increase in valuation of commercial permits – several large projects were permitted in March and multi-family residential permitting is at its highest levels.

• Building Fund expenditures were at $2.9 million through the third quarter of 2013, or 74%

of the budget, comparable to the amount spent in 2012.

• The fund balance in the Building fund anticipates funding 18 months of permitting activity after the revenue is collected. A portion of the fund balance in the Building Fund is being utilized to fund a replacement of the Tidemark permitting system with a new Hansen system.


Parking Fund

• Fee and fine revenues through the third quarter of 2013 were $1.5 million, slightly higher than the comparable 2012 collections.

• The General Fund support of the Parking fund remained at the $1.25 million level in 2013. Over time, the fund is anticipated to become self-supporting.

• Operating expenses through the third quarter totaled $1.3 million, excluding

depreciation, slightly above those in 2012. The second quarter financial report included depreciation of the assets of the Parking Fund in the total expenditures, which is a non-cash item. The third quarter report eliminated the depreciation charges.

Utility Operations Operating transfers between the Water, Sewer and Storm Water funds are included in the accompanying report, Attachment A, per budget requirements. These transfers are generally eliminated when financial statements are prepared. Financial statements for utility funds are prepared on a quarterly basis. Please call (360) 487-8444 to receive a copy of the detailed financial statements for the utility funds. Water

• Water sales revenues were $19.2 million through the third quarter of 2013, or 77% of the forecast. The amount is approximately $1.6 thousand higher than collected during the comparable period of 2012. There was a 5% increase in rates effective in 2013. Private total contributions totaled $1.2 million, approximately $100 higher than received during a comparable time period in 2012.


• Expenditures in the Water fund through the third quarter of 2013 totaled $26.6 million, or 72% of the budget, approximately $8 million higher than those in 2012, largely due to a transfer to Sewer Capital fund.

Sewer

• Sewer charge revenues in the Sewer Fund came in at $27.6 million through the third quarter of 2013, approximately $0.8 million above the comparable 2012 revenues. Sewer rates were increased by 9% in 2011, 6.5% in 2012 and an additional 2.5% in 2013.

• There has been a significant drop in the amount of private development contributions

received resulting from the sluggish development activity in the City. Sewer fund borrowed $5.3 million from Water fund to support its operations in 2009, $3.2 million in 2010, and $2 million in 2011 to address the insufficient level of revenues compared to the fund’s expenditures. So far in 2013, the fund borrowed $2.5 million from the Water Operating fund.

• Sewer expenditures through the third quarter of 2013 totaled $28.7 million, approximately

$600 thousand higher than in 2012. Storm Water

• A total of $8.1 million in storm water fee revenue was received through the third quarter of 2013, or 75% of the forecast. The Storm Water rates were increased by 5% in 2013. Overall, the expenditures in the Storm Water fund through the third quarter of 2013 were $7.1 million, or 64% of the budget for the year.


IV. Outstanding Debt

• At the end of the third quarter of 2013, the City had about $114.1 million of general obligation (G.O.) debt outstanding and approximately $50 million of revenue bond debt outstanding. General obligation debt is backed by the full faith and credit of the City and by general taxes. Revenue bond debt is supported by a pledge of specific revenues. All of the City’s revenue bond debt is supported by the City’s water and sewer utilities. The weighted average interest rate for the City’s general obligation debt is 3.91% while the average interest rate for the City’s revenue bond debt is 3.94%.

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

V. Investments

Market Conditions • Information received since the Federal Open Market Committee met in September suggests

that economic activity has been expanding at a moderate pace. Some indicators of labor market conditions have shown further improvement in recent months, but the unemployment rate remains elevated. Household spending and business fixed investment advanced, and the housing sector has been strengthening, but mortgage rates have risen further and fiscal policy is restraining economic growth. Apart from fluctuations due to changes in energy prices, inflation has been running below the Committee's longer-run objective, but longer-term inflation expectations have remained stable.

• The FOMC’S statutory dual mandate is to foster both maximum employment and price stability. The Committee expects that, with appropriate policy accommodation, economic growth will proceed at a moderate pace and the unemployment rate will gradually decline toward levels the Committee judges consistent with its dual mandate. The Committee recognizes that inflation persistently below its 2 percent objective could pose risks to economic performance, but it anticipates that inflation will move back toward its objective over the medium term.

• The FOMC also decided to keep the target range for the federal funds rate at 0 to ¼ percent and currently anticipates that this exceptionally low range for the federal funds rate will be appropriate as long as the unemployment rate remains above 6-1/2 percent with inflation between one and two years ahead is projected to be no more than ½ percentage point above the committee’s 2 percent longer-run goal and longer term inflation continues to be anchored.

• The overall yield curve increased during the third quarter of 2013. The yield on the three-

month Treasury has decreased ending at 0.02% at the end of the third quarter. The six-month Treasury yield has decreased to 0.051%. The yield on the two-year Treasury has decreased to 0.34%. The thirty-year Treasury yield increased, ending the third quarter at 3.69% from 3.52%. Market risk of the City’s portfolio is low. Investment purchase maturities have been kept at two years and in due to the Federal Reserve’s statement of continued low overnight rates into late-2015 early 2016. The investment maturities are expected to meet the cash flow needs of the city and it is unlikely that an investment would have to be liquidated before maturity to meet the city cash needs.

• The City complies with State statutory guidelines and the City’s investment policies that limit

the types of securities purchased. These consist of U.S. Treasury securities, federally-backed


agency securities, and other relatively risk-free investments. The City does not leverage its portfolio nor does it invest in derivatives.

Investment Performance The average amount invested during the third quarter of 2013 was $240 million compared to $237 million on June 30, 2013. The portfolio had an average yield of 0.388% year to date, which is 0.07% less than the projected yield of .45% for 2013. The projected yield is based upon the blended yield between existing rates and expected market rates when new investments are purchased during the year. The year-to-date yield is 26 bps higher than the State Investment Pool, which had an average yield of 0.123%. The State Pool has a weighted average maturity of 54 days. The City’s investment portfolio weighted average maturity is approximately 12 months. Longer-term portfolio yields will outperform shorter-term portfolio yields in a falling interest rate environment. Interest revenue distributed through the third quarter of 2013 to all funds is approximately $659,680 compared to $865,469 during the same period of 2012. The City’s investment portfolio profile is detailed in Attachment D.


VI. Interfund Loans In 2003, Council passed an ordinance giving the City Treasurer the authority to make interfund loans to meet the short term liquidity and cash flow needs of the City’s various funds. The ordinance requires the City Treasurer to provide a quarterly report to City Council showing the amount of all interfund loans outstanding and the repayment plan for those loans. The table below provides this information. Seven funds required interfund loans through September 2013. City of Vancouver Outstanding Interfund LoansThrough Third Quarter 2013

Balance InterestOutstanding Interest Expense

Fund Description 09/30/13 Lending Fund Rate Paid in 2013 Repayment Plan

330 Transportation Capital -$ 001 0.39% 2,288.59$

Loan due to timing between when deposits received vs.

expenditures paid

330 Transportation Capital 197,176$ 001 0.39% -$ Loan for LID - until bonds are

issued

337 VNHR Property Capital -$ 001 0.39% 503.76$

Loan due to timing between when deposits received vs. expenditures paid - Grant

343 Parks Capital -$ 001 0.39% 58.20$


expenditures paid

443 Drainage Construction Fund -$ 448 0.39% 61.92$


expenditures paid

475 Sewer Utility Fund -$ 445 0.39% 359.88$


expenditures paid

477 Sewer System Development Fund -$ 475 0.39% 19.43$


expenditures paid

478 Sewer Construction Fund 398,484$ 448 0.39% 1,215.27$


expenditures paid

Total Outstanding Interfund Loan Balance 595,659$


Quarterly Expense SummaryCity of VancouverThird Quarter of 2013 Financial Report

Attachment A

2011 Sep-11 2012 Sep-12 2013 Sep-13Actual Actual Actuals Actuals Budget Actuals

GENERAL FUNDCity Council 361,816 243,636 67% 409,233 244,839 60% 453,094 283,461 63%City Manager's Office 2,392,922 1,711,392 72% 2,449,760 1,807,718 74% 2,914,964 1,701,503 58%Legal Services 3,193,747 2,315,253 72% 3,323,409 2,385,406 72% 3,390,603 2,449,832 72%Community Economic Development 5,259,127 3,996,477 76% 4,654,404 3,357,546 72% 5,607,049 3,208,608 57%Parks Administration 1,300,966 911,060 70% 1,142,838 779,589 68% 1,192,191 775,632 65%Parks, Trails, & Natural Resources 936,037 716,352 77% 924,671 708,470 77% 1,608,116 719,297 45%Recreation Services 6,678,995 5,163,448 77% 5,457,937 4,211,165 77% 5,760,967 4,341,102 75%Police 31,358,106 23,163,029 74% 31,215,355 23,821,130 76% 34,030,523 24,232,187 71%Transportation 1,240,793 1,062,662 86% 691,640 510,103 74% 812,072 477,810 59%Grounds Maintenance 2,789,485 1,991,765 71% 2,801,905 1,995,973 71% 2,991,016 2,141,863 72%Facilities Maintenance 2,817,771 1,901,839 67% 3,247,010 2,113,359 65% 3,379,582 2,047,707 61%Financial and Mgmt Services 3,774,860 2,771,588 73% 3,949,047 2,790,757 71% 4,152,885 2,644,259 64%General Services 413,960 283,748 69% 306,371 223,292 73% 576,210 220,922 38%Media Services 55,556 57,357 103% - 1,500 - - Information Technology 3,094,618 2,088,156 67% 2,696,927 1,969,795 73% 3,486,855 1,745,579 50%COBRA 266,371 221,449 83% 127,382 106,491 84% 180,000 59,047 33%Human Resources 1,275,453 947,719 74% 1,225,425 872,033 71% 1,533,509 846,472 55%

Subtotal Non-Gen. Governmental 67,210,584 49,546,930 74% 64,623,312 47,899,165 74% 72,069,636 47,895,282 66%

General GovernmentalChild Justice Center Support 235,600 212,040 90% 345,284 270,743 78% 329,850 228,474 69%City Cable Programming 330,630 330,630 100% 340,549 255,411 75% 441,567 331,173 75%Fire District #6 16,042 16,042 100% 16,392 16,392 100% 16,000 15,235 95%Emergency Mgmt (CRESA) 134,120 100,590 75% 138,525 138,525 100% 139,538 139,646 100%Air Pollution Control Authority 53,985 53,985 100% 54,115 54,115 100% 56,166 53,109 95%Humane Society 150,769 93,238 62% 212,236 130,621 62% 335,769 160,667 48%Animal Control 90,101 48,167 53% 199,403 149,552 75% 433,625 149,104 34%Alcoholism Support 29,223 20,601 70% 40,513 26,081 64% 46,697 14,669 31%Regional Transp Council 21,300 21,300 100% 21,300 21,300 100% 21,300 21,300 100%Election Support 368,592 - 0% 283,313 9,102 3% 350,000 - 0%Celebrate Freedom 110,000 110,000 100% 110,000 110,000 100% - - AWC, Chamber of Commerce Members 142,059 71,723 50% - - 84,562 81,336 96%Opportunity Reserve 49,495 29,451 60% 138,970 63,445 46% 193,135 67,711 35%Miscellaneous 2,342,128 172,917 7% 244,027 124,263 51% 3,243,404 261,663 8%Public Defender 617,292 513,665 83% 643,050 520,602 81% 706,723 543,179 77%County Jail Costs 3,355,126 1,662,624 50% 3,485,238 1,686,468 48% 4,736,109 1,879,609 40%County Corrections Costs 1,070,118 715,482 67% 1,123,636 760,907 68% 1,984,495 609,458 31%County District Court Costs 1,125,508 568,431 51% 1,018,965 538,372 53% 1,652,305 523,759 32%General Obligation Debt Payment 6,963,275 1,915,166 28% 7,271,967 1,226,347 17% 7,752,679 1,045,518 13%General Govt Support 39,450,986 32,667,287 83% 35,359,614 29,876,141 84% 38,766,394 33,641,033 87%

Subtotal General Govermental 56,656,347 39,323,339 69% 51,047,097 35,978,387 70% 61,290,318 39,766,645 65%Total General Fund 123,866,931 88,870,268 72% 115,670,409 83,877,552 73% 133,359,954 87,661,927 66%g ( g g ( g g ( g g ( g g ( g g ( g

SPECIAL REVENUE FUNDSStreet 14,368,554 9,091,584 63% 16,187,971 10,499,732 65% 16,387,754 8,730,485 53%Fire Operating Fund 29,487,814 20,576,576 70% 31,721,473 22,493,311 71% 33,615,578 23,194,517 69%Fire Capital Fund 1,198,379 1,010,047 84% 386,102 370,803 96% 4,809,277 857,465 18%Drug Enforcement and Investigative Funds 143,652 81,862 57% 125,130 107,888 86% 147,785 65,770 45%Community Development Block Grant 2,318,532 1,289,400 56% 2,637,342 1,666,053 63% 3,735,380 1,096,125 29%Tourism 631,871 432,118 68% 1,143,903 675,593 59% 1,241,827 519,940 42%Criminal Justice/LLEBG 113,343 85,005 75% 106,515 79,884 75% 103,023 - 0%Real Estate Excise Tax - I 1,645,699 467,686 28% 1,473,784 475,830 32% 1,977,908 531,812 27%Transportation Special Revenue 3,170,330 1,482,392 47% 2,195,157 794,532 36% 2,301,549 635,753 28%Parks & Recreation Special Revenue 50,697 41,958 83% 51,523 35,063 68% 31,561 31,171 99%Parks Construction - Residual REET 489,591 222,299 45% 165,307 232,255 140% 65,000 11,661 18%Downtown Initiatives 92,986 76,288 82% 93,507 79,073 85% 95,381 72,361 76%VNHR Properties 614,257 506,747 82% 223,647 173,425 78% 267,391 196,339 73%Senior Messenger 271,020 200,413 74% 263,217 187,247 71% 310,279 195,406 63%TIF Funds 586,788 282,766 48% 1,532,710 844,831 55% 5,374,468 696,873 13%PIF Funds 894,826 1,329,890 149% 553,803 697,807 126% 6,307,851 1,534,981 24%Miscellaneous Special Revenue Funds 250,718 250,000 100% - - - -

DEBT SERVICE FUNDSG O Debt Service Fund 11,224,357 3,159,956 28% 30,629,622 18,894,697 62% 11,928,279 2,363,477 20%L I D Debt Fund 4,035 - 0% 3,832 - 0% 3,630 - 0%

as % of Budget

3Q as % of Annual

3Q as % of Annual

27

Quarterly Expense SummaryCity of VancouverThird Quarter of 2013 Financial Report

Attachment A

2011 Sep-11 2012 Sep-12 2013 Sep-13Actual Actual Actuals Actuals Budget Actuals

as % of Budget

3Q as % of Annual

3Q as % of Annual

ENTERPRISE FUNDSStorm Water 10,975,868 7,420,483 68% 10,215,913 6,704,730 66% 11,472,164 7,080,627 62%Water 24,106,118 20,099,416 83% 25,622,770 18,837,609 74% 36,975,117 26,650,948 72%Sewer 37,353,990 32,194,199 86% 38,060,728 28,120,957 74% 39,886,766 28,710,423 72%Building Inspection 3,509,960 2,949,218 84% 3,427,836 2,703,467 79% 4,015,394 2,924,715 73%Solid Waste 2,062,335 1,337,777 65% 2,103,487 1,410,139 67% 2,902,569 1,493,039 51%Parking 3,233,868 2,565,837 79% 2,344,951 1,578,532 67% 2,880,753 1,328,867 46%Tennis Center 1,011,666 881,628 87% 1,108,335 802,539 72% 1,027,764 760,436 74%Airpark 482,300 482,492 100% 476,996 302,430 63% 1,343,681 344,909 26%

INTERNAL SERVICE FUNDSFire Shop Fund 389,704 1,011,836 260% 628,964 628,964 100% - - 0%Equipment Services Operations Fund 4,396,367 3,309,818 75% 4,484,899 3,539,398 79% 5,566,837 3,770,557 68%Equipment ER&R Capital 177,423 1,349,922 761% 2,078,743 1,474,332 71% 2,815,292 752,666 27%Technology ER&R 2,259,483 1,915,795 85% 2,408,941 1,562,939 65% 3,601,363 2,398,380 67%Self Insurance 5,094,655 2,926,741 57% 2,536,682 2,591,886 102% 4,953,721 3,501,483 71%Self Insurance Benefits 13,617,240 10,655,925 78% 13,831,568 10,418,009 75% 14,427,158 10,638,518 74%Print Shop & Mail Services 214,758 177,605 83% 191,398 135,389 71% 254,402 117,361 46%

AGENCY FUNDSSWAT Team 130,846 106,639 81% 179,241 113,223 63% 214,879 123,690 58%Police Pension 882,708 674,036 76% 828,249 614,574 74% 1,470,263 608,794 41%Fire Pension 1,690,418 1,291,670 76% 1,747,250 1,346,406 77% 2,625,904 1,209,774 46%Cable TV 1,547,702 1,464,312 95% 914,206 823,686 90% 983,908 725,773 74%

Notes1. This report contains the unaudited results through the end of 3rdQuarter of 2013

3. Operating transfers between funds are included within this report.4. Capital project and Water/Sewer Debt Funds are excluded; Proprietary funds only include operating revenues.5. The Water, Sewer and Storm Water funds are adopted as one legal fund but are shown separately for informational purposes.

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

28

Quarterly Revenue SummaryCity of VancouverThird Quarter of 2013 Financial Report

Attachment B

10/30/2013

2011 Sep-11 3Q as 2012 Sep-12 3Q as 2013 Sep-13 3QActual Actual % of YE Actual Actual % of YE Budget Actual % of Bud.

GENERAL FUNDTax Revenue

Property Tax 40,334,028 23,252,582 58% 40,947,711 23,557,720 58% 41,379,237 24,269,982 59%Sales Tax 24,701,043 18,426,080 75% 26,165,994 19,201,877 73% 26,424,026 20,210,430 76%Electrical Tax 7,987,586 6,778,782 85% 7,875,459 6,700,500 85% 7,262,943 6,610,242 91%Natural Gas 4,506,777 3,962,897 88% 2,357,432 1,848,736 78% 2,730,000 2,180,088 80%Telephone 5,483,887 4,155,464 76% 5,269,838 3,942,699 75% 5,155,499 3,729,774 72%Cable Franchise Fee 1,755,859 878,380 50% 1,797,577 872,317 49% 1,703,535 1,390,370 82%Water/Sewer/Storm Water 13,177,598 9,794,984 74% 13,920,197 10,231,280 73% 14,513,940 10,907,087 75%Solid Waste Utility Tax 3,614,091 2,711,628 75% 3,633,251 2,716,091 75% 3,767,346 2,784,480 74%Gambling and Leasehold Taxes 622,875 364,815 59% 627,300 411,289 66% 614,829 433,484 71%

Subtotal Tax Revenue 102,183,745 70,325,614 69% 102,594,758 69,482,509 68% 103,551,355 72,515,935 70%Business Licenses 819,683 600,545 73% 871,782 640,458 73% 986,559 620,174 63%Grants & Entitlements 2,251,760 1,456,278 65% 1,844,092 1,269,434 69% 3,469,196 750,167 22%State Shared Revenues 2,916,994 2,462,169 84% 3,176,881 3,000,674 94% 2,536,584 2,222,035 88%Parks Contract with Clark County 891,694 630,400 71% 802,180 467,028 58% 880,361 508,610 58%Charges for Services

Planning Permits 510,225 451,627 89% 525,024 435,889 83% 537,345 352,611 66%Recreation Program Fees 4,744,041 3,868,416 82% 4,336,076 3,526,776 81% 4,047,129 3,524,541 87%Interfund Service Charges 7,209,003 5,446,028 76% 8,161,464 6,093,102 75% 8,619,085 6,523,648 76%Other Charges & Services 659,969 474,396 72% 701,605 473,423 67% 811,498 550,524 68%

Subtotal Charges for Service 13,123,238 10,240,466 78% 13,724,169 10,529,190 77% 14,015,057 10,951,323 78%District Court 1,645,349 1,215,416 74% 1,721,965 1,308,011 76% 1,550,027 1,125,700 73%Miscellaneous 3,319,050 2,081,041 63% 4,688,276 1,779,330 38% 3,619,533 2,670,547 74%Operating Transfers 223,442 90,148 40% 324,834 139,301 43% 481,097 64,427 13%

Total General Fund 127,374,954 89,102,077 70% 129,748,937 88,615,936 68% 131,089,769 91,428,918 70%

SPECIAL REVENUE FUNDSStreet Fund - -

Real Estate Excise Tax 1,373,945 1,138,270 83% 1,315,273 992,079 75% 1,269,509 1,469,229 116%Motor Vehicle Fuel Tax 3,371,269 2,517,706 75% 3,316,804 2,439,381 74% 3,422,007 2,488,217 73%Permits 521,769 342,072 66% 487,688 348,228 71% 1,071,093 429,116 40%Miscellaneous 131,303 125,082 95% 31,818 25,268 79% 20,000 15,895 79%Operating Transfers 9,244,038 6,686,438 72% 9,847,687 7,462,088 76% 9,822,342 7,419,339 76%

Total Street Fund 14,642,324 10,809,568 74% 14,999,270 11,267,045 75% 15,604,951 11,821,796 76%Consolidated Fire Fund

Service Charges-Fire Dist. #5 8,079,459 3,860,739 48% 7,977,703 3,794,835 48% 7,938,954 3,792,545 48%Grant Revenue 405,428 69,051 17% 1,399,807 690,566 49% 2,287,372 763,142 33%Permit/Other Fees 683,575 534,394 78% 723,150 514,155 71% 370,000 611,297 165%Miscellaneous 94,294 65,153 69% 375,773 123,889 33% 275,463 133,437 48%Operating Transfers 21,886,953 23,272,032 106% 21,098,865 20,312,938 96% 22,564,835 22,564,835 100%Fire Equipment Fund revenue 1,471,737 1,918,668 130% 2,493,544 1,927,257 77% 3,349,341 1,208,088 36%

Total Consolidated Fire Fund 32,621,446 29,720,037 91% 34,068,842 27,363,640 80% 36,785,965 29,073,344 79%Other Special Revenue Funds

Drug Enforcement 245,048 181,950 74% 249,414 202,220 81% 237,025 214,313 90%Community Development Block 2,281,733 1,157,539 51% 2,831,446 1,822,428 64% 3,730,195 1,007,706 27%Tourism (469,529) 905,098 N/A 1,360,069 949,826 70% 1,260,000 1,097,601 87%Criminal Justice/LLEBG 207,351 158,072 76% 207,693 154,053 74% 212,378 160,648 76%Transportation Special Revenue 2,156,202 1,526,693 71% 2,344,410 1,628,747 69% 2,212,000 1,589,847 72%Real Estate Excise Tax - I 1,447,270 1,084,289 75% 1,284,225 924,791 72% 1,387,509 1,330,471 96%Parks & Recreation Special Reve 67,704 65,771 97% 44,080 30,518 69% 30,000 32,696 109%Parks Construction - Residual REE 4,431 4,053 91% 849 798 94% 1,000 267 27%Downtown Initiatives 140,866 106,097 75% 156,473 119,641 76% 140,000 120,692 86%VNHR Properties 359,765 242,442 67% 304,809 237,733 78% 265,000 219,223 83%Senior Messenger 294,569 193,331 66% 307,428 225,232 73% 250,000 205,390 82%TIF Funds 628,765 366,511 58% 460,027 373,935 81% 297,500 463,638 156%PIF Funds 1,150,017 691,714 60% 1,890,143 1,166,541 62% 1,000,000 2,463,455 246%Miscellaneous Special Revenue 497,491 204,296 41% 321,569 235,017 73% 264,600 213,911 81%

DEBT SERVICE FUNDSG O Debt Service Fund 11,222,171 3,157,771 28% 30,630,580 18,894,697 62% 11,928,279 2,362,518 20%L I D Fund 2,165 486 22% 4,020 359 9% 5,900 211 N/A

ENTERPRISE FUNDSStorm Water

Storm Drainage Fees 10,024,411 7,398,567 74% 10,129,259 7,438,358 73% 10,768,855 7,984,627 74%Private Capital Contributions 610,110 603,574 99% 433,989 396,934 91% - 2,399 N/AInterfund Transfers 137,999 137,999 100% 56,237 - 0% 17,000 - 0%

29

Quarterly Revenue SummaryCity of VancouverThird Quarter of 2013 Financial Report

Attachment B

10/30/2013

2011 Sep-11 3Q as 2012 Sep-12 3Q as 2013 Sep-13 3QActual Actual % of YE Actual Actual % of YE Budget Actual % of Bud.

Miscellaneous 166,535 143,702 86% (87,340) 186,144 -213% - 129,626 N/ATotal Drainage Fund 10,939,055 8,283,842 76% 10,532,145 8,021,436 76% 10,785,855 8,116,651 75%

WaterWater Sales

Residential 17,709,372 13,264,978 75% 18,927,991 14,015,834 74% 19,864,086 15,339,304 77%Commercial 3,690,009 2,705,980 73% 4,210,064 3,024,639 72% 3,818,224 3,274,838 86%Governmental 717,248 545,347 76% 721,915 519,757 72% 755,188 597,343 79%

Subtotal Water Sales 22,116,629 16,516,305 75% 23,859,970 17,560,230 74% 24,437,498 19,211,485 79%Private Capital Contributions 1,448,381 885,908 61% 1,317,048 1,025,027 78% 575,000 1,162,374 202%Interfund Transfers 3,551,957 16,870 0% 3,284,767 2,434 0% 2,400,128 1,857 0%Miscellaneous 3,625,362 2,723,720 75% 3,205,680 2,396,606 75% 2,619,305 2,538,136 97%

Total Water Fund 30,742,328 20,142,803 66% 31,667,464 20,984,297 66% 30,031,931 22,913,852 76%Sewer

Sewer ChargeResidential 22,552,519 16,879,083 75% 23,891,064 17,899,001 75% 23,928,703 18,446,281 77%Commercial, Industrial 10,534,674 7,804,514 74% 10,927,583 8,060,381 74% 11,224,927 8,261,849 74%Governmental 1,231,703 907,882 74% 1,215,097 915,991 75% 1,298,420 870,684 67%

Subtotal Sewer Charges 34,318,896 25,591,479 75% 36,033,744 26,875,373 75% 36,452,050 27,578,814 76%Private Capital Contributions 860,274 642,282 75% 485,826 367,716 76% 50,000 598,125 N/AInterfund Transfers 2,000,000 - 0% 600,599 600,000 100% 2,500,000 2,499,980 100%Miscellaneous 136,342 107,496 79% 239,751 178,265 74% 1,058,301 223,570 21%

Total Sewer Fund 37,315,512 26,341,257 71% 37,359,919 28,021,353 75% 40,060,351 30,900,489 77%Building Inspection

Permits 3,151,046 2,537,404 81% 3,211,210 2,432,532 76% 2,264,000 3,131,057 138%Miscellaneous 127,682 77,898 61% 259,187 83,626 32% 30,000 109,034 363%Interfund Services 853,645 624,359 73% 627,768 470,826 75% 982,127 736,595 75%

Total Building Fund 4,132,373 3,239,661 78% 4,098,166 2,986,985 73% 3,276,127 3,976,687 121%Solid Waste

Franchise Fee-Solid WasteSolid Waste Utility Tax 2,007,402 1,505,551 75% 1,758,924 1,308,730 74% 1,500,000 1,246,465 83%Service Charges-Recycling 1,269,013 912,108 72% 1,080,465 856,524 79% 1,170,000 646,702 55%Miscellaneous 81,794 49,480 60% 16,470 109 1% 20,000 35,720 179%

Total Solid Waste Fund 3,358,209 2,467,140 73% 2,855,859 2,165,362 76% 2,690,000 1,928,887 72%Parking

Parking Fines 551,509 421,751 76% 591,512 449,727 76% 550,000 372,967 68%Parking Meters & Lots 1,500,282 1,135,237 76% 1,484,820 1,129,552 76% 1,331,000 1,092,305 82%Miscellaneous 79,624 63,193 79% 12,695 (100,448) -791% 65,000 52,962 81%Operating Transfers 1,245,540 - 0% 1,245,540 - 0% 1,245,540 - 0%

Total Parking Fund 3,376,955 1,620,182 48% 3,334,567 1,478,831 44% 3,191,540 1,518,234 48%Tennis Center

Membership Fees 850,702 640,660 75% 938,694 718,721 77% 873,000 664,214 76%Instruction Fees 3,304 1,730 52% 2,791 2,098 75% 2,550 1,880 74%Miscellaneous 117,426 94,024 80% 13,643 9,641 71% - 10,604 N/AOperating Transfers 211,265 91,008 43% 124,909 111,186 89% 64,926 73,458 113%

Total Tennis Center Fund 1,182,696 827,423 70% 1,080,037 841,645 78% 940,476 750,156 80%Other Enterprise Funds

Fire Emergency Equipment Servi 3,114 (2,982) -96% 736 736 100% - - Pearson Airfield 695,511 478,047 69% 710,726 495,854 70% 1,248,371 452,847 36%Utility Customer Assistance 99,930 - 0% 12,538 5,940 47% 6,000 5,125 85%

INTERNAL SERVICE FUNDSEquipment Services Operations Fu 5,284,262 3,803,549 72% 4,620,646 3,449,986 75% 4,541,868 3,304,189 73%Equipment ER&R Capital 2,794,424 1,953,215 70% 3,215,778 2,106,230 65% 2,679,021 2,060,978 77%Technology ER&R 2,150,891 1,237,805 58% 2,236,197 1,551,273 69% 2,900,026 1,989,364 69%Self Insurance 4,117,208 3,201,704 78% 4,508,317 3,022,351 67% 4,283,476 3,317,518 77%Self Insurance Benefits 13,798,617 10,825,778 78% 13,358,023 10,033,873 75% 16,594,528 10,363,402 62%Printshop & Mail Services 278,448 213,709 77% 243,838 182,045 75% 276,066 164,615 60%

AGENCY FUNDSSWAT Team 143,354 110,062 77% 174,547 99,359 57% 169,325 118,141 70%Police Pension 1,075,256 806,756 75% 1,082,474 811,207 75% 1,080,000 811,211 75%Fire Pension 1,975,951 1,530,725 77% 1,950,605 1,501,988 77% 1,942,000 1,519,585 78%Cable TV 1,613,586 1,471,811 91% 958,516 592,965 62% 941,012 676,463 72%

Notes1. This report was prepared using the methodology prescribed under the basis of budgeting.2. Operating transfers between funds are included within this report.3. Capital Project Funds are excluded.4. The Water, Sewer and Storm Water funds are adopted as one legal fund but are shown separately for informational purposes. Private capital contributions, adjustments for doubtful accounts and interfund transfers are included in this report and are categorized as "Misc." revenue.

30

Attachment CCity of VancouverOutstanding Debt - General Obligation BondsThrough Third Quarter 2013

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

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

39,365,000 17,810,000 4.08% 12/1/2018

Jun-03 To construct & equip the Firstenburg Community Center, and remodel Marshall & Luepke Center

18,520,000 510,000 4.43% 12/1/2013

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

18,090,000 13,405,000 4.07% 12/1/2026

Oct-06 To fund multiple transportation projects and to fund the Marshall Community Center remodel

14,785,000 11,820,000 4.25% 12/1/2025

Jun-08 To fund West Police Precinct, Fire Station 810 and Police Evidence

14,570,000 11,295,000 4.51% 12/1/2027

Jun-09 To fund multiple Transportation Projects

12,970,000 11,245,000 4.03% 12/1/2028

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

13,410,000 12,425,000 4.50% 12/1/2035

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

10,515,000 10,220,000 3.93% 12/1/2035

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

15,945,000 15,855,000 3.26% 12/1/2029

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

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

Total Outstanding General Obligation Bonds 114,100,000$

31

Attachment CCity of VancouverOutstanding Debt - Revenue BondsThrough Third Quarter 2013

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

Jul-93 Build Eastside treatment plant, upgrade Westside treatment plant

38,000,000$ -$ 5.44% 6/1/2013

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

26,250,000 20,225,000 3.998% 6/1/2020

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

42,520,000 21,630,000 4.037% 6/1/2018

Jun-08 Refund the 1998 Water/Sewer Revenue Bonds

20,230,000 8,135,000 3.551% 12/1/2016

49,990,000$

32

City of VancouverInvestment Activity

Third Quarter of 2013(Dollars in thousands)

As of Percent of As of Percent of6/30/2013 Portfolio 9/30/2013 Portfolio

State Investment Pool 97,950 41.0% 97,349 39.7%Clark County Investment Pool 49,632 21.0% 49,277 20.1%U.S. Agencies 55,194 23.3% 64,554 26.4%Corporate Bonds (Pension Fund) 1,018 0.4% 1,016 0.4%Municipal Bonds 22,002 9.8% 21,879 8.9%Zero Coupon 10,844 4.5% 10,856 4.4%

Total by Investment Type 236,640$ 100.0% 244,931$ 100.0%

As of Percent of As of Percent of6/30/2013 Portfolio Cumulative 9/30/2013 Portfolio Cumulative

Overnight 147,582$ 62.4% 62.4% 146,626 59.9% 59.9%One Month - 0.0% 0.0% - 0.0% 0.0%Two to Six Months - 0.0% 0.0% - 0.0% 0.0%Six Months to One Year - 0.0% 0.0% - 0.0% 0.0%One to Five Years 89,058 37.6% 100.0% 98,305 40.1% 100.0%

Total by Length of Maturity 236,640$ 100.0% 244,931$ 100.0%

12 Months 12 Months

33

City of VancouverInvestment ActivityThird Quarter 2013

Issuer Type of Investment Transaction Date Maturity Date Purchase or Deposit Redemption or

Withdrawal Effective Interest Rate

JulyClark County Treasurer* Local Government Investment Pool 13,235.85 67,248.37 0.35%Washington State Treasu Local Government Investment Pool 13,831,465.77 8,000,000.00 0.12%

13,844,701.62 8,067,248.37

AugustClark County Treasurer* Local Government Investment Pool 15,903.68 141,903.66 0.35%Washington State Treasu Local Government Investment Pool 9,127,887.88 11,000,000.00 0.12%

9,143,791.56 11,141,903.66

SeptemberClark County Treasurer* Local Government Investment Pool 13,965.32 189,348.21 0.35%Federal National Mtg AssoU.S. Agency 9/11/2013 4,400,000.00 0.80%Federal National Mtg AssoU.S. Agency 9/10/2013 5,000,000.00 0.50%Washington State Treasu Local Government Investment Pool 14,440,036.48 19,000,000.00 0.12%

23,854,001.80 19,189,348.21 * Investments in the County and State Local Government Investment Pools can change daily, therefore no purchase dates are shownand the maturity dates are the last date for each reporting period.

34

City of Vancouver Investment Portfolio3rd Quarter 2013

Purchase Maturity Par Market Book Percent Cumulative Interest EffectiveIssuer Date Date Value Value Value of Portfolio Percent Rate Yield

Clark County LGIP 49,277,505 49,277,505 49,277,505 20.1% 20.12% 0.316 0.321Washington State LGIP 97,349,472 97,349,472 97,349,472 39.7% 59.86% 0.121 0.123Federal Home Loan Mortgage Co. 06/13/2013 11/01/2014 5,000,000 4,960,400 4,982,743 2.0% 61.90% 0.320 0.324Vancouver Wash LTGO 06/22/2011 12/01/2014 300,000 301,557 300,000 0.1% 62.02% 1.381 1.400Clark County WA Public Utiliti 02/01/2012 01/01/2015 145,000 153,345 152,509 0.1% 62.08% 0.789 0.800Grant County Public Utility 06/13/2013 01/01/2015 5,000,000 5,292,300 5,288,266 2.2% 64.24% 0.365 0.370Seattle WA Muni Light & Power 11/15/2011 04/01/2015 155,000 166,447 164,642 0.1% 64.31% 1.006 1.020Federal Home Loan Bank 04/09/2012 04/09/2015 5,000,000 5,014,750 5,000,000 2.0% 66.35% 0.690 0.700Federal Home Loan Bank 04/09/2012 04/09/2015 5,000,000 5,014,750 5,000,000 2.0% 68.39% 0.690 0.700Federal Home Loan Mortgage Co. 07/20/2012 06/01/2015 1,705,000 1,683,057 1,690,509 0.7% 69.08% 0.515 0.522Wells Fargo Bank 04/25/2013 07/01/2015 500,000 506,270 507,815 0.2% 69.29% 0.591 0.600State of Washington 04/17/2013 07/01/2015 3,335,000 3,604,501 3,605,702 1.5% 70.76% 0.335 0.340General Electric Capital Corp 01/30/2013 07/02/2015 500,000 507,365 507,848 0.2% 70.97% 0.710 0.720Federal Nat'l Mtg. Assoc. 06/12/2013 07/28/2015 5,000,000 5,182,700 5,177,416 2.1% 73.08% 0.414 0.420Federal Home Loan Mortgage Co. 03/22/2013 11/24/2015 5,000,000 4,994,600 5,007,254 2.0% 75.13% 0.377 0.382Federal Nat'l Mtg. Assoc. 09/10/2013 11/27/2015 5,000,000 4,997,850 4,990,018 2.0% 77.17% 0.616 0.625Vancouver Wash LTGO 06/22/2011 12/01/2015 25,000 25,243 25,000 0.0% 77.18% 2.219 2.250Clark County WA Public Utiliti 03/08/2012 01/01/2016 330,000 361,112 357,337 0.1% 77.32% 1.208 1.225City of Seattle 06/04/2013 01/01/2016 2,500,000 2,487,750 2,500,000 1.0% 78.34% 0.592 0.600Federal Home Loan Bank 02/12/2013 02/12/2016 5,000,000 4,981,800 5,000,000 2.0% 80.38% 0.414 0.420Federal Nat'l Mtg. Assoc. 09/11/2013 03/11/2016 4,400,000 4,404,972 4,390,222 1.8% 82.18% 0.889 0.901Chelan County Public Utility D 11/09/2011 07/01/2016 500,000 517,025 500,000 0.2% 82.38% 1.825 1.851State of Washington 03/27/2013 07/01/2016 5,320,000 5,281,058 5,311,611 2.2% 84.55% 0.825 0.837City of Seattle 06/04/2013 10/01/2016 3,425,000 3,658,654 3,674,072 1.5% 86.05% 0.541 0.548Federal Home Loan Mortgage Co. 10/22/2012 11/01/2016 5,000,000 4,975,800 5,000,000 2.0% 88.09% 0.616 0.625Federal Nat'l Mtg. Assoc. 05/02/2013 11/15/2016 4,250,000 4,091,475 4,182,418 1.7% 89.80% 0.515 0.522Federal Nat'l Mtg. Assoc. 02/28/2012 11/28/2016 5,000,000 4,991,250 4,994,896 2.0% 91.84% 1.093 1.108Federal Nat'l Mtg. Assoc. 02/06/2013 02/06/2017 5,000,000 4,965,800 5,000,000 2.0% 93.88% 0.740 0.750Federal Farm Credit Bank 03/08/2013 02/22/2017 5,000,000 4,952,250 5,000,000 2.0% 95.92% 0.651 0.660Federal Farm Credit Bank 05/16/2013 05/16/2017 5,000,000 4,932,150 4,994,531 2.0% 97.96% 0.724 0.734Federal Nat'l Mtg. Assoc. 10/17/2012 07/17/2017 5,000,000 4,910,200 5,000,000 2.0% 100.00% 0.863 0.875

244,016,976$ 244,543,407$ 244,931,786$

35

Documents

Quarterly Financial Report Q3 2013 - Vancouver, Washington