2019-171 Third Quarter Financial ReportDate: September 6, 2019 Report No. 2019-171
INFORMAL STAFF REPORT
TO MAYOR AND CITY COUNCIL
SUBJECT:
Quarterly Financial Report for the period ending June 30, 2019.
BACKGROUND:
Attached for your review is the Quarterly Financial Report for the period ending June 30,
2019. If you have any questions or need additional information, please let me know.
STAFF CONTACT:
David Gaines, Finance Director
(940) 349-8260
David.Gaines@cityofdenton.com
REQUESTOR:
Staff Generated
PARTICIPATING DEPARTMENTS:
Finance, Budget, and Accounting.
STAFF TIME TO COMPLETE REPORT:
15 Hours
About This Quarterly Financial
Report
This report has been prepared by the City of Denton’s Finance
Department. The Quarterly Financial Report is intended to provide
our users (internal and external) with information regarding the City’s
financial position and economic activity. This report includes
information for the quarter ending June 30, 2019.
This report is presented in four sections.
1. The Executive Dashboard section contains a high level
summary of the major operating funds using graphic
illustrations and key economic indicators. Narrative disclosures
are also included to highlight any significant changes or
fluctuations.
2. The Financial Summary section reports the performance of the
major operating funds of the City. In addition, the report
provides an end of year projection and a comparison to the
budget for major revenue sources and expenditure items.
3. The Revenue & Economic Analysis section provides additional
analysis regarding key revenue sources and economic
indicators.
4. The Quarterly Investment Report section provides a summary
of the City’s investment portfolio, interest earnings and a brief
market outlook.
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.
David Gaines
Finance Director
215 East McKinney StreetDenton, TX 76201(940) 349-8260
Section 1
City of Denton
Quarterly Financial Report
June 2019
Executive Dashboards
Note: All figures presented are in millions of dollars.FY 2018-19 FY 2018-19ANNUAL ANNUAL FY 2018-19DESCRIPTION BUDGET 1PROJECTION VARIANCEBeginning Fund Balance as of 09/30/18 31.09$ 30.32$ RESOURCES: Ad Valorem Taxes 46.26 46.26 0% Sales Tax 41.43 37.95 -8% Franchise Fees 4.36 4.98 14% Other Taxes 0.51 0.51 0% Service Fees 8.11 7.54 -7% Fines and Fees 3.72 3.44 -8% Licenses and Permits 3.86 3.73 -3% Miscellaneous Revenue 2.29 2.58 13% Transfers In 17.16 18.72 9%Total Revenues 127.70 125.71 -2%Total Resources 158.79 156.03 EXPENDITURES : Personal Service 87.10 86.90 0% Material and Supplies2.99 2.70 -10% Maintenance and Repairs3.04 2.71 -11% Insurance1.44 1.44 0% Miscellaneous1.15 1.47 28% Operations18.52 16.94 -9% Transfers Out14.38 13.14 -9% Fixed Assets0.56 0.45 -20%Total Expenditures129.18 125.75 -3%Net Income (Loss)(1.48) (0.04) Ending Fund Balance29.61$ 30.28$ City of Denton, Texas General Fund Executive Dashboard $‐ $20 $40 $60 $80 $100 $120Revenue & Expenses (in Millions)YTD RevenueYTD ExpensesKey TrendsSales Tax revenues are projected $3.48M less than budget and are consistent with what was presented to Council.Franchise Fees revenues are projected $0.62M higher than budget due to a reduction in transfers to the Street Improvement Fund.Service Fees revenues are projected $0.57M less than budget mainly due to building rentals and ambulance fees.Transfers In revenues are projected $1.56M higher than budget due to recapture in previously cash funded transportation projects.Operations expenditures are projected $1.58M less than budget mainly due to savings related to 380 Agreements.Transfers Out expenditures are projected $1.24M less than budget mainly due to the Fleet right sizing effort and elimination of cash funding for renovations to the facility at 651 Mayhill. $‐ $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 $3.5Sales Tax Monthly Average by Quarter1Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which was estimated in the FY 2018‐19 budget process.
Note: All figures presented are in millions of dollars.City of Denton, Texas Electric Fund Executive DashboardDESCRIPTIONFY 2018-19 ANNUAL BUDGET 1FY 2018-19 ANNUAL PRO JEC TIO NS FY 2018-19 VARIANCEBeginning Working Capital and Reserves as of 9/30/1862.95$ 73.94$ RESOURCES: Rate Revenues135.52 139.69 3% Transmission Revenue40.06 40.06 0% Other Revenues3.75 3.96 6% DEC Revenues36.30 29.40 -19%Total Revenues215.63 213.11 -1%Total Resources278.58 287.05 EXPENDITURES: Purchased Power67.19 75.36 12% DEC Fuel14.97 14.71 -2% Transmission of Power12.50 12.50 0% Personnel Service21.46 20.45 -5% Operation and Maintenance27.92 27.86 0% Debt Service69.30 50.64 -27% Transfers Out14.33 14.43 1% Capital Outlay16.02 15.46 -3%Total Expenditures243.69 231.41 -5%Net Income (Loss)(28.06) (18.30) Ending Working Capital and Reserves34.89$ 55.64$ $0$20$40$60$80$100$120$140$160$180Oct‐18 Nov‐18 Dec‐18 Jan‐19 Feb ‐ 19 Mar‐19 Apr‐19 May‐19 Jun‐19Revenue & Expenses (in Millions)YTD RevenueYTD ExpenseKey TrendsDEC Revenues are projected to be $6.9 Million less than budgeted due to lower market prices and unseasonably cool summer temperatures.Purchased Power expenditures are projected to be $8.2 Million more than budgeted based on market movement, renewable energy value reduction, and the closure of Gibbons Creek.Debt Service is projected to be $18.7 Million less than budgeted due to not paying off the TMPA Scrubber debt in the amount of $28.6 Million and an increase in DEC Debt Service in the amount of $9.9 Million. As of June 30, $13.6 Million in reserves was utilized to cover the deficit in the ECA account balance. An additional $6 Million is expected to be used by the end of September.01002003004005006001Q 13 3Q 13 1Q 14 3Q 14 1Q 15 3Q 15 1Q16 3Q16 1Q17 3Q17 1Q18 3Q18 1Q19 3Q192013 – 2018 Historical Quarterly GWH Sales1 Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which was estimated in the FY 2018‐19 budget process.
Note: All figures presented are in millions of dollars.FY 2018-19 FY 2018-19ANNUAL ANNUAL FY 2018-19DESCRIPTION BUDGET 1PROJECTION VARIANCEBeginning Working Capital and Reserves as of 09/30/18223.98$ 25.95$ RESOURCES: Water Sales 37.51 33.42 -11% Other Water Revenues1.01 1.77 75% Transfers In1.49 1.49 0% Impact Fee Revenue5.70 5.70 0%Total Re ve n u e s45.71 42.38 -7%Total Resources69.69 68.33 EXPENDITURES: Personal Service8.86 7.68 -13% Operations, Services10.00 7.87 -21% Capital Outlay15.28 14.80 -3% Debt Service12.66 12.70 0% Transfers Out3.39 3.58 6%Total Expenditures50.19 46.63 -7%Net Income (Loss)(4.48) (4.25) Ending Working Capital and Reserves 19.50$ 21.70$ 05001,0001,5002,0002,5001Q143Q141Q153Q151Q163Q161Q173Q171Q183Q181Q193Q192014‐2019 Historical Quarterly Gallons Sold (in Millions)City of Denton, Texas Water Fund Executive Dashboard $‐ $5 $10 $15 $20 $25 $30 $35 $40Oct‐18 Nov‐18 Dec‐18 Jan‐19 Feb‐19 Mar‐19 Apr‐19 May‐19 Jun‐19Revenue & Expenses (in Millions)YTD RevenueYTD ExpensesKey TrendsWater sales are projected to be below budget due to weather conditions. Personal Service expenses are projected to be below budget due to position vacancies.Operations, Services are projected to be below 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 2018‐19 budget process.2The Beginning Working Capital balance excludes $10.88M of Impact Fee Reserves and $0.75 million for Development Plan Line Reserves.
FY 2018-19 FY 2018-19ANNUAL ANNUAL FY 2018-19DESCRIPTIONBUDGET 1PROJECTION VARIANCEBeginning Working Capital and Reserves as of 09/30/18219.19$ 18.67$ RESOURCES: Wastewater Fees23.64 24.28 3% Other Wastewater Revenue1.83 1.73 -5% Drainage Fees4.73 4.84 2% Transfer In0.55 0.63 15% Impact Fee Revenue2.00 2.00 0%Total Revenues32.75 33.48 2%Total Resources51.94 52.15 EXPENDITURES: Personal Service8.61 7.95 -8% Operations, Services8.67 7.18 -17% Capital Outlay10.09 10.16 1% Debt Service6.81 6.86 1% Transfer Out3.29 3.55 8%Total Expenditures37.47 35.70 -5%Net Income (Loss)(4.72) (2.22) Ending Working Capital and Reserves 14.47$ 16.45$ Note: All figures presented are in millions of dollars.02004006008001,0001,2001,4001Q143Q141Q153Q151Q163Q161Q173Q171Q183Q181Q193Q192014‐2018 Historical Quarterly Gallons Billed (in Millions)City of Denton, Texas Wastewater Fund Executive Dashboard $‐ $5 $10 $15 $20 $25 $30Oct‐18 Nov‐18 Dec‐18 Jan‐19 Feb‐19 Mar‐19 Apr‐19 May‐19 Jun‐19Revenue & Expenses (in Millions)YTD RevenueYTD ExpensesKey TrendsPersonal Services are projected to be lower than budget due to position vacancies.Operations, Services are projected to be below 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 2018‐19 budget process.2The Beginning Working Capital balance excludes $4.19 million of Impact Fee Reserves, $1.0 million for Drainage Reserves, and $0.54 million for Development Plan Line Reserves.
FY 2018-19 FY 2018-19ANNUAL ANNUAL FY 2018-19DESCRIPTIONBUDGET PROJECTION VARIANCEREVENUES: Residential Drainage Fees1.82$ 1.86$ 2% Nonresidential Drainage Fees 2.91 2.98 2% Wastewater Resources0.04 - -100% General Fund Transfer0.32 0.32 0%Total Revenues5.09 5.16 1%EXPENDITURES: Personal Service1.97 1.72 -13% Operations, Services0.80 0.65 -19% Capital Outlay1.40 1.84 31% Debt Service0.48 0.48 0% Transfer Out0.44 0.47 7%Total Expe n di tu re s5.09 5.16 1%Net Income (Loss)-$ -$ Note: All figures presented are in millions of dollars.City of Denton, Texas Drainage Operations Executive Dashboard $‐ $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 $3.5 $4.0 $4.5Oct‐18 Nov‐18 Dec‐18 Jan‐19 Feb‐19 Mar‐19 Apr‐19 May‐19 Jun‐19Revenue & Expenses (in Millions)YTD RevenueYTD ExpensesKey TrendsPersonal Services are projected to be lower than budget due to position vacancies.Operations, Services are projected to be below budget due to reduced materials & supplies and outside services expenses.
FY 2018-19 FY 2018-19ANNUAL ANNUAL FY 2018-19DESCRIPTION BUDGET 1PROJECTIONS VARIANCEBeginning Working Capital and Reserves as of 09/30/1828.64$ 10.92$ RESOURCES: Collection & Disposal 26.29 26.73 2% Recycling6.84 6.69 -2% Other Revenue1.39 0.57 -59%Total Revenues34.52 33.99 -2%Total Resources43.16 44.91 EXPENDITURES: Personal Service11.21 10.10 -10% Operations, Services8.80 8.73 -1% Capital Outlay1.33 0.81 -39% Debt Service9.00 9.00 0% Landfill Closure1.16 1.16 0% Transfer Out3.37 3.78 12%Total Expenditures34.87 33.58 -4%Net Income (Loss)(0.35) 0.41 Ending Working Capital and Reserves8.29$ 11.33$ 01,0002,0003,0004,0005,0006,0007,0002017Qtr 42018Qtr 12018Qtr 22018Qtr 32018Qtr 42019Qtr 12018Qtr 22018Qtr 3Refuse TonnageRecycling and ReuseTonnageResidential Curbside Collection TonnageNote: All figures presented are in millions of dollars.City of Denton, Texas Solid Waste Fund Executive DashboardKey TrendsOther revenue is projected less than budget due to the return of transfers from Materials Management for 651 Mayhill Project.Operations, Services is less than budget due to less than expected spending on Materials and Supplies and Maintenance and Repairs.Decrease in Capital outlay is due to decrease in container and cart purchases.Transfers‐Out are projected higher due to increased transfers to Engineering and Utility Admin. 05,00010,00015,00020,00025,00030,0002017Qtr 42018Qtr 12018Qtr 22018Qtr 32018Qtr 42019Qtr 12019Qtr 22019Qtr 3Commercial Refuse & Recycling (Front & Side LoadCubic Yards Serviced per WeekCommercial RefuseCommercial Recycling1Annual adopted budget as amended or modified. Beginning Working Capital and Reserves represents the amount which was estimated in the FY 2018‐19 budget process.2The Beginning Working Capital and Reserves excludes $9.90 million of Landfill Closure/Post Closure reserves.
City of Denton, Texas Airport Fund Executive DashboardKey TrendsAnticipating several new leases at fair market value later in the year.Fuel flowage revenue is expected to increase due to increased operations.Diminishing gas well revenues.Reduced personnel cost due to staff turnover.Operations services expense is less than expected due to savings on maintenance contracts.$0.0$1.0$2.0$3.0$4.0$5.02009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019GAS WELLREVENUE(in millions of dollars by fiscal year) 20,000 30,000 40,000 50,000 60,000AIRPORT OPERATIONS BY QUARTER(takeoff or landing by fiscal year)Note: All financial amounts presented are in millions of dollars.FY 2018-19 FY 2018-19ANNUAL ANNUAL FY 2018-19DESCRIPTION BUDGET 1PROJECTION VARIANCEBeginning Working Capital and Reserves as of 09/30/182.67$ 2.93$ RESOURCES: Airport Ground Leases0.770.73 -5% FBO Commissions0.110.12 9% Fuel Flowage Fees0.210.21 0%Total Operating Revenues1.09 1.06 -3%EXPENDITURES: Personal Service0.550.48 -13% Operations, Services0.420.35 -17% Transfer Out0.52 0.52 0%Total Operating Expenditures1.49 1.35 -9%Net Operating Income (Loss)(0.40) (0.29) NON-OPERATING REVENUES: Investment Income0.020.05 150% Gas Well Royalties0.430.37 -14%Total Non-Operating Revenues0.45 0.42 -7%NON-OPERATING EXPENDITURES: Transfer Out - Capital0.25 0.25 0%Total Non-Operating Expenditures0.25 0.25 0%Net Non-Operating Income (Loss)0.20 0.17 Net Income (Loss)(0.20) (0.12) Ending Working Capital and Reserves2.47$ 2.81$ 1Annual adopted budget as amended or modified. Beginning Working Capital and Reserves represents the amount which was estimated in the FY 2018‐19 budget process.
FY 2018-19 FY 2018-19ANNUAL ANNUAL FY 2018-19DESCRIPTION BUDGET 1PROJECTION VARIANCEBeginning Working Capital and Reserves as of 09/30/20181.16$ 1.62$ RESOURCES: Franchise Fees13.52 12.90 -5% Street Cuts0.36 0.36 0% Investment Income0.01 0.01 0% Transfers In1.20 1.20 0%Total Revenues15.09 14.47 -4%Total Resources16.25 16.09 EXPENDITURES: Personal Service3.64 3.49 -4% Materials & Supplies0.10 0.10 0% Maintenance & Repairs9.15 7.99 -13% Operations, Services0.78 0.78 0% Transfer Out1.40 1.38 -1%Total Expe n di tu re s15.07 13.74 -9%Net Income (Loss)0.02 0.73 Ending Fund Balance1.18$ 2.35$ 1Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which was estimated in the FY 2018-19 budget process.City of Denton, Texas Street Improvement Fund Executive DashboardKey TrendsFranchise fees are projected $0.62 lower than budget due to a reduction in transfers from the General Fund.Maintenance & Repairs are projected lower than budgeted due to a delay of street projects related to weather.No surface treatments were completed in the 1stquarter of the prior year due to cold weather.No surface treatments were completed in the 2ndand 3rdquarter of the current or prior year, several are in progress and will be completed in the 4thquarter or 1stquarter in 2020.Note: All figures presented are in millions of dollars.0123456Qtr1 Qtr2 Qtr3Tons of Asphalt Laid (in Thousands)FY17-18FY18-190204060Qtr 1Qtr 2Qtr 3Lane Miles Surface TreatmentFY 17-18FY 18-19 $- $2.0 $4.0 $6.0 $8.0 $10.0 $12.0Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19Revenue & Expenses (in Millions)YTD RevenueYTD Expenses
FY 2018-19 FY 2018-19GRANT ANNUAL FY 2018-19DESCRIPTION AMOUNT PROJECTION VARIANCE2018-19 Budget Comm Development13.64$ 1.25$ -66% Public Safety1.02 1.02 0% Transportation172.92 31.55 -57% Other 0.28 0.28 0%Total Budget 77.86 34.10 -56%New Awards Public Safety0.15 0.15 0%Total New Awards0.15 0.15 0%Totals 78.01$ 34.25$ -56%COMM DEV4.66%PUBLIC SAFETY1.50%TRANS93.47%OTHER0.37%FY 2018‐19 Grants Awarded $‐ $20.0 $40.0 $60.0 $80.0COMMDEVPUBLICSAFETYTRANSOTHERAwardsExpensesFY 2018‐19 Awards & Expenses (in Millions)City of Denton, Texas Grants DashboardNote: All figures presented are in millions of dollars.1This grant amount will be spent over several years and the fiscal year 2018-19 projections are estimated expenditures for one year. Remaining grant amounts will be spent in future fiscal year.Key TrendsThe following grants amounts have been received in FY 2018-19: Federal Equitable Sharing: $22,605Chapter 59 Asset Forfeitures: $22,517U.S. Marshals Violent Offenders Task Force: $14,168Organized Crime Drug Enforcement Task Force: $12,911PD-Law Enforcement Officer Standard & Education:$10,371Sexual Assault Examiners Reimbursement:$39,0622017 UASI: $29,574
Section 2
City of Denton
Quarterly Financial Report
June 2019
This report is designed for internal use and does not include all the funds and accounts included in the City of Denton’s operations. The
information provided is unaudited; for a complete audited report,
please refer to the City of Denton Comprehensive Annual Financial Report, available through the City’s Finance Department, City Secretary’s Office, or Denton Public Libraries.
FINANCIAL SUMMARY
City of Denton General FundSchedule of Revenues - Budget vs Projection (Unaudited)For the Period Ended June 30, 2019
PRIOR BUDGET CURRENT ANNUAL ANNUAL BUDGET VS
REVENUE DESCRIPTION Y-T-D Y-T-D Y-T-D BUDGET PROJECTION PROJECTION
Current Year - Ad Valorem 44,207,271$ 45,517,522$ 45,411,613$ 45,674,373$ 45,674,373$ 0%Delinquent - Ad Valorem 74,528 195,942 141,538 296,882 221,882 -25%Miscellaneous Penalties & Fees 271,219 222,005 330,966 288,727 363,727 26% Ad Valorem Taxes 44,553,018 45,935,469 45,884,117 46,259,982 46,259,982 0%
Sales Tax 28,455,130 31,073,329 28,159,957 41,425,582 37,953,567 -8%
Franchise - Gas Utilities 288,782 188,410 224,196 298,753 341,345 14%Franchise - Private Electric Utilities 54,067 28,636 46,035 105,949 121,054 14%Franchise - Cable 206,681 277,201 169,458 410,188 468,667 14%Franchise - Telecom 142,998 135,873 98,784 201,058 229,722 14%Franchise - Denton Municipal Utilities 2,637,828 2,226,915 2,257,469 3,346,901 3,824,060 14% Franchise Fees 3,330,356 2,857,035 2,795,942 4,362,849 4,984,849 14%
Other Taxes 153,629 252,968 168,626 505,936 508,264 0%
Ambulance Service Fees 1,924,018 2,224,080 1,891,357 3,700,000 3,520,000 -5%Fire Department Fees 173,266 154,500 150,394 206,000 188,021 -9%Building Inspections Fees 444,475 436,660 446,894 589,172 562,284 -5%Park Department Fees 1,291,744 1,150,035 1,108,444 2,003,991 1,706,555 -15%Planning Department Fees 827,380 797,701 775,097 1,063,557 1,048,425 -1%Reprographics Fees 249,668 277,657 234,065 370,160 370,160 0%Miscellaneous Service Fees 105,124 135,887 106,813 181,171 142,509 -21% Service Fees 5,015,675 5,176,520 4,713,064 8,114,051 7,537,954 -7%
Denton Municipal Fines 1,079,914 1,111,502 1,083,679 1,482,000 1,403,486 -5%Parking Fines 169,078 195,000 216,650 260,000 254,971 -2%Miscellaneous Fines and Fees 630,840 652,431 631,350 901,000 801,658 -11%Court Administrative and Service Fees 758,373 780,000 780,948 1,080,000 977,741 -9% Fines and Fees 2,638,205 2,738,933 2,712,627 3,723,000 3,437,856 -8%
Demolition Permits 4,180 4,875 3,420 6,500 4,343 -33%Building Permits 2,439,247 2,799,517 2,602,671 3,738,024 3,630,981 -3%Certificate of Occupancy 46,875 60,000 53,995 80,000 64,640 -19%Miscellaneous Licenses and Permits 21,944 29,252 24,038 39,000 27,755 -29% Licenses and Permits 2,512,246 2,893,644 2,684,124 3,863,524 3,727,719 -4%
Investment Income 448,902 345,376 678,735 460,500 904,877 96%Miscellaneous Revenues 1,137,007 674,077 1,271,141 1,825,526 1,673,982 -8% Miscellaneous Resources 1,585,909 1,019,453 1,949,876 2,286,026 2,578,859 13%
ROI - Denton Municipal Utilities 5,582,042 6,084,787 5,587,372 8,427,209 7,938,871 -6%Transfers 6,028,098 6,550,736 7,641,000 8,733,146 10,777,970 23% Transfers 11,610,140 12,635,523 13,228,372 17,160,355 18,716,841 9%
Total General Fund Revenues 99,854,308$ 104,582,874$ 102,296,705$ 127,701,305$ 125,705,891$ -2%
City of DentonGeneral FundSchedule of Expenditures - Budget vs Projection (Unaudited)
For the Period Ended June 30, 2019
PRIOR BUDGET CURRENT ANNUAL ANNUAL BUDGET VSY-T-D Y-T-D Y-T-D BUDGET PROJECTION PROJECTION
NEIGHBORHOOD SERVICESBuilding Inspections 2,064,831$ 2,289,979$ 2,300,791$ 3,052,886$ 3,052,886$ 0%Community Improvement Services 1,057,997 1,171,466 1,007,604 1,561,728 1,510,152 -3%Libraries 4,349,109 4,473,385 4,458,359 5,963,678 5,835,854 -2%Parks and Recreation 9,576,809 8,027,814 7,140,588 10,702,253 10,402,253 -3%Planning 2,272,589 2,673,040 2,178,377 3,563,561 3,563,561 0%Gas Well Review 306,405 311,756 219,563 415,606 415,606 0%Social Services 451,346 504,770 447,837 672,928 685,639 2%20,079,086 19,452,210 17,753,119 25,932,640 25,465,951 -2%
PUBLIC SAFETYAnimal Services 1,154,755 1,226,176 1,472,668 1,633,265 1,878,572 15%Fire 22,149,770 22,750,994 22,898,284 30,330,574 30,113,987 -1%Municipal Court 944,423 955,293 830,262 1,273,547 1,273,547 0%Municipal Judge 300,265 336,168 314,654 448,161 448,161 0%Police 23,409,531 26,776,796 26,100,548 35,697,544 35,685,302 0%47,958,744 52,045,427 51,616,416 69,383,091 69,399,569 0%
TRANSPORTATIONTraffic Operations 3,271,367 1,569,616 1,229,715 2,092,526 2,042,917 -2%Transportation Operations 496,386 298,763 146,322 398,291 847,311 113%Street Lighting 597,651 582,828 614,822 777,000 160,406 -79%4,365,404 2,451,207 1,990,859 3,267,817 3,050,634 -7%
ADMINISTRATIVE & COMMUNITY SERVICESCity Manager's Office 2,160,313 1,594,875 1,789,631 2,126,205 2,120,681 0%Economic Development 1,634,344 4,464,006 2,610,174 5,951,194 5,150,718 -13%Facilities Management 2,899,817 4,040,793 3,409,172 5,386,980 3,883,323 -28%Finance 2,209,506 2,715,744 2,495,789 3,620,494 3,631,229 0%Human Resources 1,297,822 1,370,794 1,321,710 1,827,469 1,675,498 -8%Internal Audit 297,113 411,740 314,142 548,905 517,655 -6%Legal Administration 1,485,253 2,027,927 1,825,246 2,703,529 2,566,894 -5%Public Affairs 841,337 1,545,421 1,413,017 2,060,264 1,817,064 Non-Departmental 5,616,519 4,781,483 5,627,500 6,375,848 6,474,959 2%18,442,024 22,952,783 20,806,381 30,600,888 27,838,021 -9%
TOTAL EXPENDITURES 90,845,258$ 96,901,627$ 92,166,775$ 129,184,436$ 125,754,175$ -3%
City of Denton
Electric Fund
Schedule of Revenues and Expenditures - Budget vs Projections (Unaudited)
For the Period Ended June 30, 2019
PRIOR BUDGET CURRENT ANNUAL ANNUAL BUDGET VS
DESCRIPTION Y-T-D Y-T-D Y-T-D BUDGET PROJECTION PROJECTION
Beginning Working Capital
and Reserves as of 9/30/18 62,950,654$ 73,942,033$
REVENUES:
Rate Revenues 109,984,527$ 91,592,089$ 101,046,654$ 135,522,850 139,693,662 3%
Transmission Revenues 16,070,591 23,772,766 31,467,284 40,055,256 40,055,256 0%
Other Revenues 5,358,306 2,599,777 3,493,377 3,750,515 3,963,129 6%0%
DEC Revenues - 25,033,720 9,666,842 36,304,634 29,397,964 -19%
Total Revenues 131,413,424 142,998,352 145,674,157 215,633,255 213,110,011 -1%
EXPENDITURES:
Purchased Power 61,479,586 58,013,453 44,256,021 67,185,014 75,359,657 12%
DEC Fuel - 13,070,521 4,102,393 14,967,553 14,713,147 -2%
Transmission of Power 2,842,161 6,519,046 13,757,937 12,500,000 12,500,000 0%
Personnel Services 12,171,590 15,878,711 13,530,176 21,458,231 20,451,967 -5%
Materials and Supplies 471,804 599,276 510,341 1,019,461 925,500 -9%
Maintenance and Repair 402,194 1,215,089 478,526 1,772,438 1,626,900 -8%
Insurance 194,950 362,149 204,045 705,178 745,178 6%
Return on Investment Return on Investment4,020,221 4,224,013 4,136,664 6,204,970 6,159,377 -1%
Franchise Fee Franchise Fee5,744,978 6,032,479 5,910,147 8,864,243 8,799,110 -1%
Miscellaneous 491,054 1,280,768 463,664 1,414,132 1,410,789 0%
Operations 2,980,192 5,973,834 3,569,571 7,957,596 8,187,689 3%
Debt Service 31,626,333 43,493,607 43,493,607 69,303,309 50,644,987 -27%
Interfund Transfers 9,234,285 10,744,677 10,510,058 14,326,236 14,425,987 1%
Capital Outlay 24,196,980 8,160,000 8,160,000 16,016,335 15,459,386 -3%
Total Expenditures 155,856,328 175,567,623 153,083,150 243,694,696 231,409,674 -5%
Net Income (Loss)(24,442,904)$ (32,569,271)$ (7,408,993)$ (28,061,441) (18,299,663)
Ending Working Capital and Reserves 34,889,213$ 55,642,370$
City of Denton
Water Fund
Schedule of Revenues and Expenditures - Budget vs Projections (Unaudited)
For the Period Ended June 30, 2019
PRIOR BUDGET CURRENT ANNUAL ANNUAL BUDGET VS
DESCRIPTION Y-T-D Y-T-D Y-T-D BUDGET2 PROJECTION PROJECTION
Beginning Working Capital
and Reserves as of 09/30/181 23,982,828$ 25,947,230$
REVENUES:
Water Sales Residential 12,957,395$ 12,397,132$ 11,057,531$ 19,496,211 16,771,313 -14%
Water Sales Commercial 11,555,785 11,459,586 10,692,401 16,841,145 15,723,031 -7%
Water for Resale 2,103,263 889,416 629,227 1,168,296 928,743 -21%
Other Water 1,013,326 542,783 1,069,444 767,349 1,401,204 83%
Transfers In 4,460,461 1,115,822 1,117,540 1,487,762 1,490,053 0%
Investment Income 203,682 188,250 318,672 251,000 372,580 48%
Impact Fee Revenue 2,816,929 4,275,000 4,275,570 5,700,000 5,700,000 0%
Total Revenues 35,110,841 30,867,989 29,160,385 45,711,763 42,386,924 -7% Use of Reserves - - - -
EXPENDITURES:
Personal Service 7,539,530 6,223,930 5,805,850 8,855,034 7,683,364 -13%
Purchased Power 906,960 1,025,269 883,570 1,431,895 1,214,370 -15%
Purchase of Water 1,346 - 1,520 3,000 1,520 -49%
Materials and Supplies 1,113,587 961,773 852,456 1,413,230 1,195,774 -15%
Maintenance and Repairs 780,312 987,253 831,878 1,589,203 1,071,073 -33%
Insurance 166,861 167,575 167,575 223,433 223,433 0%
Miscellaneous 187,524 307,277 197,507 411,219 249,504 -39% Operations, Services 1,184,624 1,313,484 1,011,020 1,693,297 1,305,818 -23%
Capital Outlay 3,800,163 9,717,973 9,940,797 15,279,831 14,804,322 -3%
Return on Investment 897,521 907,361 805,076 1,339,555 1,073,435 -20% Franchise Fee 1,282,173 1,286,297 1,150,108 1,898,986 1,533,477 -19%
Debt Service 12,035,024 12,168,436 12,168,436 12,662,613 12,700,195 0%
Transfers Out 2,611,976 1,745,256 2,641,946 3,390,738 3,577,965 6%
Total Expenditures 32,507,601 36,811,884 36,457,739 50,192,034 46,634,250 -7%
Net Income (Loss)2,603,240$ (5,943,895)$ (7,297,354)$ (4,480,271) (4,247,326)
Ending Working Capital
and Reserves 19,502,557$ 21,699,904$
1 The Beginning Working Capital balance excludes $10,884,298 of Impact Fee Reserves and $750,000 for Development Plan Line Reserves.
budget process.
2 Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which was estimated in the FY 2018-19
City of Denton
Wastewater Fund
Schedule of Revenues and Expenditures - Budget vs Projections (Unaudited)
For the Period Ended June 30, 2019
PRIOR BUDGET CURRENT ANNUAL ANNUAL BUDGET VS
DESCRIPTION Y-T-D Y-T-D Y-T-D BUDGET2 PROJECTION PROJECTION
Beginning Working Capital
and Reserves as of 09/30/171 19,188,011$ 18,669,754$
REVENUES:
Residential Fees 9,058,029$ 7,972,990$ 8,730,268$ 10,657,173 11,636,837 9%
Commercial Fees 8,833,574 8,889,404 8,539,786 12,218,689 11,837,998 -3%
Effluent Irrigation Fees 65,719 40,134 52,933 68,576 80,649 18%
Wholesale Fees 436,884 513,259 559,053 694,234 728,574 5%
Other Wastewater Fees 1,090,632 1,163,646 1,030,799 1,624,678 1,475,793 -9%
Drainage Fees 3,573,064 3,521,260 3,648,037 4,727,006 4,841,142 2%
Transfer In 553,022 413,846 492,180 551,795 630,128 14%
Investment Income 168,600 156,000 210,303 208,000 251,781 21%
Impact Fee Reserves 1,500,200 1,500,000 1,500,200 2,000,000 2,000,000 0%
Total Revenues 25,279,724 24,170,539 24,763,559 32,750,151 33,482,902 2%
EXPENDITURES:
Personal Service 5,642,099 5,993,611 5,993,564 8,607,813 7,954,857 -8%
Purchased Power 768,801 944,959 816,544 1,221,000 1,061,314 -13%
Materials and Supplies 685,840 734,308 638,731 1,259,075 876,929 -30%
Maintenance and Repairs 840,832 973,315 710,529 1,428,270 1,001,729 -30%
Insurance 135,369 174,015 174,015 232,020 232,020 0%
Miscellaneous 40,366 73,881 72,526 80,218 87,031 8%
Operations, Services 1,261,429 1,531,069 1,435,767 2,212,527 1,834,359 -17%
Capital Outlay 2,871,038 7,638,767 7,225,858 10,185,022 10,160,967 0%
Return on Investment 664,299 652,054 645,632 882,684 860,843 -2%
Franchise Fee 948,999 931,506 922,331 1,260,978 1,229,775 -2%
Debt Service 6,871,488 6,808,831 6,600,030 6,808,831 6,858,067 1%
Transfers Out 2,474,570 2,469,613 2,666,606 3,292,816 3,547,121 8%
Total Expenditures 23,205,130 28,925,929 27,902,133 37,471,254 35,705,011 -5%
Net Income (Loss)2,074,594$ (4,755,390)$ (3,138,574)$ (4,721,103) (2,222,109)
Ending Working Capital
and Reserves 14,466,908$ 16,447,645$
1 The Beginning Working Capital balance excludes $4,189,562 of Impact Fee Reserves, $1,000,000 for Drainage Reserves,
and $535,000 for Development Plan Line Reserves.
2 Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which was estimated
in the FY 2018-19 budget process.
City of Denton
Drainage Operations
Schedule of Revenues and Expenditures - Budget vs Projections (Unaudited)
For the Period Ended June 30, 2019
PRIOR BUDGET CURRENT ANNUAL ANNUAL BUDGET VS
DESCRIPTION Y-T-D Y-T-D Y-T-D BUDGET PROJECTION PROJECTION
REVENUES:
Residential Drainage Fees 1,355,944$ 1,360,021$ 1,405,447$ 1,820,000$ 1,863,363$ 2%
Nonresidential Drainage Fees 2,217,120 2,161,302 2,242,590 2,907,006 2,977,779 2%
Wastewater Resources - 32,850 - 43,800 - -100%
Investment Interest Income - - - - - 0%
General Fund Transfer 318,022 237,596 237,596 316,795 316,795 0%Total Revenues 3,891,086 3,791,769 3,885,633 5,087,601 5,157,937 1%
EXPENDITURES:
Personal Service 1,150,814 1,387,314 1,281,953 1,968,225 1,719,000 -13%
Materials and Supplies 32,241 54,747 30,876 76,075 40,275 -47%
Maintenance and Repairs 53,238 100,975 89,439 123,300 127,184 3%
Insurance 19,096 26,825 26,825 35,767 35,767 0%
Miscellaneous 7,681 14,878 13,765 17,200 17,211 0%
Operations, Services 258,687 414,848 323,512 546,870 432,565 -21%
Capital Outlay 1,260,538 985,466 1,304,039 1,403,688 1,837,741 31%
Debt Service 656,998 477,433 462,153 477,433 477,433 0%
Transfer Out 451,793 329,283 353,071 439,043 470,761 7%
Total Expenditures 3,891,086 3,791,769 3,885,633 5,087,601 5,157,937 1%
Net Income (Loss)-$ -$ -$ -$ -$
City of Denton
Solid Waste Fund
Schedule of Revenues and Expenditures - Budget vs Projection (Unaudited)
For the Period Ended June 30, 2019
PRIOR BUDGET CURRENT ANNUAL ANNUAL BUDGET VS
DESCRIPTION Y-T-D Y-T-D Y-T-D BUDGET2 PROJECTION PROJECTION
Beginning Working Capital
and Reserves as of 09/30/181 8,639,290$ 10,918,907$
REVENUES:
Refuse Fees - Residential 4,628,174$ 4,313,306$ 4,317,373$ 5,788,754 5,756,498 -1%
Refuse Fees - Commercial 10,543,830 10,743,924 11,145,834 14,533,461 14,858,112 2%
Residential Recycling 4,228,692 3,999,296 3,969,821 5,337,119 5,232,832 -2%
Commercial Recycling 999,639 1,129,041 1,050,283 1,505,187 1,459,029 -3%
Landfill Gate and Material Sales 4,334,499 4,394,523 4,620,246 5,967,459 6,110,575 2%
Recycled Material Sales 49,854 45,448 50,506 60,590 61,000 1%
Asset Sales and Interest Income 441,386 344,459 114,767 459,217 152,900 -67%
Other Revenue 266,830 653,538 177,198 871,269 358,092 -59%
Total Revenues 25,492,904 25,623,535 25,446,028 34,523,056 33,989,038 -2%
EXPENDITURES:
Personal Service 7,762,427 8,407,056 7,488,187 11,207,879 10,099,925 -10%
Materials and Supplies 161,147 322,395 141,258 429,792 175,427 -59%
Maintenance and Repairs 177,506 237,188 173,121 374,506 245,048 -35%
Insurance 175,223 204,743 202,129 272,954 269,506 -1%
Miscellaneous 44,896 88,078 71,404 117,419 107,064 -9%
Operations, Services 3,897,002 4,432,834 4,541,428 5,909,622 6,253,942 6%
Capital Outlay 847,120 998,169 748,478 1,330,709 812,716 -39%
Debt Service 9,200,029 8,703,621 8,702,688 8,996,579 8,995,034 0%
Franchise Fee 1,273,090 1,270,890 1,270,491 1,694,293 1,671,547 -1%
Transfers for Landfill Closure 1,058,750 877,130 877,014 1,169,349 1,169,349 0%
Admin Transfers Out 2,268,243 2,570,494 2,850,563 3,368,559 3,779,277 12%
Total Expenditures 26,865,433 28,112,598 27,066,761 34,871,661 33,578,835 -4%
Net Income (Loss)(1,372,529)$ (2,489,063)$ (1,620,733)$ (348,605) 410,203
Ending Working Capital
and Reserves 8,290,685$ 11,329,110$
1 The Beginning Working Capital Reserve excludes $9,896,590 Landfill Closure/Post Closure Reserves.
2 Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which was estimated in the FY 2018-19 budget process.
City of Denton
Airport Fund
Schedule of Revenues and Expenditures - Budget vs Projection (Unaudited)
For the Period Ended June 30, 2019
PRIOR BUDGET CURRENT ANNUAL ANNUAL BUDGET VS
DESCRIPTION Y-T-D Y-T-D Y-T-D BUDGET1 PROJECTION PROJECTION
Beginning Working Capital
and Reserves as of 09/30/18 2,668,447$ 2,930,368$
OPERATING REVENUES:
Airport Leases 596,013$ 578,243$ 551,996$ 770,886 732,835 -5%
FBO Commissions2 76,007 82,514 96,246 110,004 123,030 12%
Fuel Flowage Fees 216,326 156,846 142,776 209,100 207,404 -1%
Total Operating Revenues 888,346 817,603 791,018 1,089,990 1,063,269 -2%
OPERATING EXPENDITURES:
Personal Service 355,017 408,970 381,800 545,217 481,715 -12%
Materials and Supplies 13,946 28,234 14,282 37,640 22,688 -40%
Maintenance and Repairs 18,825 77,637 13,188 103,500 64,167 -38%
Insurance 16,367 32,850 32,846 43,792 43,792 0%
Miscellaneous 349 75 - 100 100 0%
Operations 86,879 179,459 126,419 239,235 214,702 -10%
Transfers Out - Operating 389,880 389,849 391,161 519,730 519,730 0%
Total Operating Expenses 881,263 1,117,074 959,696 1,489,214 1,346,894 -10%
Operating (Loss)7,083 (299,471) (168,678) (399,224) (283,625)
NON-OPERATING REVENUES:
Investment Income 45,791 16,700 74,594 22,263 47,949 115%
Gas Well Royalties 165,771 323,635 174,084 431,456 370,000 -14%
Total Non-Operating Revenues 211,562 340,335 248,678 453,719 417,949 -8%
NON-OPERATING EXPENDITURES:
Transfers Out - Capital 225,000 187,525 250,000 250,000 250,000 0%
Total Non-Operating Expenses 225,000 187,525 250,000 250,000 250,000 0%
Non-Operating Income (Loss)(13,438)152,810 (1,322)203,719 167,949
Net Income (Loss)(6,355)$ (146,661)$ (170,000)$ (195,505)(115,676)
Ending Working Capital 2,472,942$ 2,814,692$
2 FBO Commissions includes unbudgeted revenue for "Sale of Scrap Metal" and NSF Check Fees totaling $288.
1 Annual adopted budget as amended or modified. Beginning Working Capital and Reserves represents the amount which was estimated in the FY 2018-19 budget process.
City of Denton
Street Improvement Fund
Schedule of Expenditures - Budget vs Actual(Unaudited)
For the Period Ended June 30, 2019
PRIOR BUDGET CURRENT ANNUAL ANNUAL BUDGET VS
DESCRIPTION Y-T-D Y-T-D Y-T-D BUDGET1 PROJECTION PROJECTION
Beginning Fund Balance
as of 9/30/2018 1,158,668$ 1,623,427$
RESOURCES:
Franchise Fees 8,335,204$ 10,141,286$ 8,664,269$ 13,519,911 12,897,911 -5%
Street Cuts 200,265 273,141 150,632 364,140 364,140 0%
Investment Income 440 7,501 21,021 10,000 10,000 0%
Transfers In 775,936 897,423 775,936 1,196,404 1,196,404 0%
Miscellaneous 1,505 - - - -
Total Resources 9,313,350 11,319,351 9,611,858 15,090,455 14,468,455 -4%
EXPENDITURES:
Personal Service 2,493,245 2,731,301 2,486,603 3,641,249 3,485,284 -4%
Materials and Supplies 64,788 65,125 54,814 101,901 101,901 0%
Maintenance and Repairs 5,194,393 6,676,341 4,962,128 9,145,194 7,992,516 -13%
Insurance 38,770 54,554 54,545 72,727 72,727 0%
Miscellaneous 4,320 3,751 5,062 5,000 5,000 0%
Operations, Services 513,643 525,299 593,575 700,302 700,302 0%
Transfer Out 2,839,077 1,246,152 1,026,319 1,401,632 1,385,882 -1%
Total Expenditures 11,148,236 11,302,523 9,183,046 15,068,005 13,743,612 -9%
Net Income (Loss)(1,834,886)$ 16,828$ 428,812$ 22,450 724,843
Ending Fund Balance 1,181,118$ 2,348,270$
1Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which was estimated in the FY 2017-18 budget process.
City of DentonGrantsSchedule of Expenditures - Budget vs Projection (Unaudited)For the Period Ended June 30, 2019
GRANT DESCRIPTION
EXPENDITURES
AS OF 9/30/20182 CURRENT Y-T-D ANNUAL BUDGET ANNUAL PROJECTION BUDGET VS PROJECTION
FY 2017-18 Budget
US Dept of HUD - Community Development Block Grant(CDBG)3,511,216$ 566,337$ 2,146,395$ 700,000$ -67%
US Dept of HUD - HOME Investment Partnership Program 3,320,362 304,369 1,279,659 500,000 -61%
Emergency Solutions Grant (ESG)506,879 41,587 210,994 46,000 -78%
Community Development1 7,338,457 912,293 3,637,048 1,246,000 -66%
TxDot STEP Comprehensive Grant - 65,650 88,537 88,537 0%
Domestic and Sexual Violence Initiative IACP
Grant 204,202 184,099 225,000 225,000 0%2018 UASI - 100,071 125,956 125,956 0%
Emergency Management Performance Grant - - 43,956 43,956 0%
Staffing for Adequate Fire & Emergency
Response (SAFER) Grant 225,381 379,907 419,971 419,971 0%
2018 SHSP SWAT Equipment Enhancement - 23,549 24,000 24,000 0%BG-Rifle-Resistant Body Armor Grant Program (BAGP)- 82,542 91,692 91,692 0%
Public Safety 429,583 835,818 1,019,112 1,019,112 0%
Airport Maintenance (RAMP) Grant - 13,612 50,000 50,000 0%TxDot-RTR-Mayhill Rd-IH35 E to US 380 28,569,138 7,142,735 21,115,515 13,500,000 -36%
TxDot-RTR-Bonnie Brae Rd-IH35 E to US 377 13,770,118 2,750,951 26,938,818 8,300,000 -69%TxDot-IH35E at Loop 288/Lillian Miller Pkwy - - 53,865 53,865 0%TxDot-RTR-McKinney (Formerly FM426) 1,336,448 520,139 17,598,079 7,300,000 -59%
TxDot-RTR-Hickory Creek FM2181-FM2499 79,163 115,920 2,396,190 600,000 -75%TxDot-RTR-North Texas Boulevard Roundabout 15,393 38,341 1,986,592 380,000 -81%
TxDot-RTR-ITS COMM Trunk Line 438,382 757,801 1,277,294 1,176,170 -8%Bicycle & Pedestrian Projects Grant - - 1,500,000 195,000 -87%
Transportation1 44,208,642 11,339,499 72,916,353 31,555,035 -57%
Interlibrary Loan Program (ILL) - - 25,000 25,000 0%
TIFMAS Training Tuition Grant - - 10,500 10,500 0%Miscellaneous New Grants - - 250,000 250,000 0%
Other - - 285,500 285,500 0%
Total FY 2018-19 Budget 51,976,682 13,087,610 77,858,013 34,105,647 -56%
New Awards
Federal Equitable Sharing - 22,605 22,605 22,605 0%
Chapter 59 Asset Forfeitures - 22,517 22,517 22,517 0%
U.S. Marshals Violent Offenders Task Force - 14,168 14,168 14,168 0%
Organized Crime Drug Enforcement Task
Force - 12,911 12,911 12,911 0%PD-Law Enforcement Officer Standards & Education - 10,371 10,371 10,371 0%
Sexual Assault Nurse Examiners (SANE) Reimbursement - 39,062 39,062 39,062 0%
2017 UASI - 29,574 29,574 29,574 0%Public Safety - 151,208 151,208 151,208 0%
Total New Awards - 151,208 151,208 151,208 0%
TOTALS 51,976,682$ 13,238,818$ 78,009,221$ 34,256,855$ -56%
1 This grant amount will be spent over several years and the fiscal year 2018-19 projections are just estimated expenditure in the one year.
Remaining grant amounts will be spent in future fiscal year.
2 A portion of the grants presented cover multiple years.
Section 3
City of Denton
Quarterly Financial Report
June 2019
REVENUE & ECONOMIC
ANALYSIS
Texas Leading Indicators Index Outlook Negative
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 decrease in the state's rate of growth. The index increased 1.63%from the prior quarter and
decreased 1.26% from the 3rd Quarter of 2017-18. Staff has rated this indicator as Negative
100.0
105.0
110.0
115.0
120.0
125.0
130.0
135.0
140.0
1Q
'10
3Q
'10
1Q
'11
3Q
'11
1Q
'12
3Q
'12
1Q
'13
3Q
'13
1Q
'14
3Q
'14
1Q
'15
3Q
'15
1Q
'16
3Q
'16
1Q
'17
3Q
'17
1Q
'18
3Q
'18
1Q
'19
3Q
'19
Texas Leading Indicators Index
Unemployment Rate Index Outlook Positive
Description:Unemployment is defined as the number or proportion of people looking for work at the prevailing
wage who are unable to find employment.
Analysis:Unemployment is an economic indicator that provides a framework for the overall condition of the
national, state and local economies. The unemployment rate for the City of Denton is at 2.60%for the 3rd Quarter.
The unemployment rates for most of the other reported sectors were either down slightly or flat from the prior
quarter.As a result of the doward trend since the high of the 2nd Quarter of 2013,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 '13 1Q '14 3Q '14 1Q '15 3Q '15 1Q '16 3Q '16 1Q '17 3Q '17 1Q '18 3Q '18 1Q '19 3Q '19
Unemployment Rate Index
Dallas-Plano-Irving MD Denton Texas U6 Unemployment United States
National Economic Trends
Period Ending June 30, 2019
Gross Domestic Product (GDP) The initial reading of second quarter GDP was surprisingly solid, bettering the +1.8% median forecast with a +2.1% increase. On the surface, the +2.1% second quarter annualized quarterly advance was well below the +3.1% first quarter gain, but the second quarter advance was driven primarily by consumer spending, which soared by
+4.3% (the best in five years) and government spending which jumped +5.0% (the best in 10 years). The drag on second
quarter GDP growth came primarily from net exports and business inventories. On a side note, very quietly, fourth quarter 2018
GDP growth was sliced in half from +2.2% to +1.1%. This is a big move, probably having something to do with fact that the Commerce Department was closed in January. As a result of this revision, the previously reported +2.9% growth for all of 2018 falls to just +2.5%.
Nonfarm Payrolls
The labor market has been wildly volatile over the past several months as employers deal with uncertainty associated with trade. Nonfarm payrolls added +224k jobs in June, well above the +160k median forecast and a solid rebound following a surprisingly poor +72 (revised)
showing in May. Company job growth is now averaging +172k per month for the first half of 2019, well below the +223k average for all of
2018, but still quite solid for so late in the cycle. Headline unemployment fell during the quarter, ending June at 3.7%, just a tenth
above a five decade low. However, the increase in the unemployment rate was primarily the result of additional workers entering (or reentering) the labor force. This is traditionally a sign of a healthy job market.
Inflation
Overall inflation was relatively stable
during the quarter, but remains lower than the Fed would prefer. Headline Consumer Price Index (CPI) climbed just +0.1% in June, pulling the year-over-year increase down from +1.8% in May to +1.6% in June. Core CPI rose +0.3% in June, pushing the year-over-year pace up from +2.0% to +2.1%. Core PCE, a Fed favorite, was advancing at a +1.6% pace through June, but is now at +2.1% on a quarter-over-quarter annualized basis.
With nearly all of the imported goods from China now being taxed, many believe that goods prices could move higher even as the economy cools. Normally, the Fed watches inflation closely, but price
movement may be out of their hands.
Retail Sales
Consumer spending was surprisingly brisk in the second quarter. Retail sales rose +0.4% in June, doubling expectations, while the retail control group climbed +0.7%. April and May headline retail
sales were revised upward to match the +0.4% June advance. The result is a strong Q2 after a mediocre Q1. The consumer drove GDP during the quarter as the “consumption” component climbed +4.3% (the best in five years), helping to mitigate
weakness in other areas of the economy. Auto sales were volatile, retreating from a 17.5 million unit pace in March to 16.4 in April and back to 17.3 in May as shoppers
tried to front-run vehicle tariffs.
Sales
Texas home sales rose +44.8% in the second quarter, but just +1.6% over the same three month period a year ago. The average Texas home price in June was $308.4k, a new record high, a +7.7% gain from March, and a +3.5% increase from a year ago. In Denton County, unit home sales jumped +55.2% during the second quarter, but just +2.5% over the same three month period a year ago. The average home price in June was $365k, a -0.80% year-over-year decline, and just below the $367.9 high set in June 2018. County home listings in June totaled 4,499, approximately +15.7% higher than a year ago.
The paper was prepared by Hilltop Securities Asset Management, is intended for educational and informational purposes only and does not constitute legal or investment advice, nor is it an offer or a solicitation of an offer to buy or sell any investment or other specific product. Information provided in this paper was obtained from sources that are believed to be reliable; however, it is not guaranteed to be correct, complete, or current, and is not intended to imply or establish standards of care applicable to any attorney or advisor in any particular circumstances. The statements within constitute the views of Hilltop Securities Asset Management as of the date of the report and may differ from the views of other divisions/departments of Hilltop Securities. In addition, the views are subject to change without notice. This paper represents historical information only and is not an indication of future performance.
Fuel Prices Outlook Cautious
Description: Quarterly fuel trends for the United States and Texas.
Analysis:Fuel prices are a major commodity source in the economy. Studies have shown a positive effect on
disposable income levels when fuel prices decrease.It is estimated that for every penny decrease in the price of
fuel,$1.3 billion is available to the consumer for disposable income. Therefore, the price of fuel is likely to be a key
predictor of sales tax collections. Fuel prices showed an 7.1%increase from the prior quarter at the national level
and a 29.9% increase at the state level. Staff has rated this outlook as Cautious.
Source: U.S. Department of Energy
$0
$2
$4
$6
$8
$10
$12
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
1Q '15 3Q '15 1Q '16 3Q '16 1Q '17 3Q '17 1Q '18 3Q '18 1Q '19 3Q '19 MillionsDollarsFuel Prices
Sales Tax Texas Fuel Prices US Fuel Prices
Municipal Cost Index Outlook Negative
Description:The Municipal Cost Index was developed to show the rate of inflation for the cost of goods purchased
frequently by local governments. The MCI draws on the monthly statistical data collected by the U.S. Departments
of Commerce and Labor as well as independently compiled data to project a composite cost picture for the
municipal budget officer or operating department manager. Costs of labor, materials and contract services are all
factored into the composite MCI. Major indicators of these items used for the MCI include the Consumer Price
Index, the Wholesale Price Index for Industrial Commodities (now known as the Producer Price Index) and the
construction cost indexes published by the U.S. Department of Commerce, respectively.
Analysis:The Municipal Cost Index (MCI) pulls a variety of prices for frequently purchased commodities for local
governments. The cost for labor, materials and contract services are factored for the MCI.An increase in MCI
means the overall price mix for these types of commodities will cost local governments more to do routine business.
The 3rd Quarter of 2018-19 shows an increase of 0.5% over the prior quarter and an increase of 3.5% over the 3rd
Quarter of 2017-18. Staff has rated this indicator as Negative.
Note: The Municipal Cost Index is designed to show the effects of inflation on the cost of providing municipal services. State
and local government officials rely on American City & County's Municipal Cost Index to stay on top of price trends, help control
price increases for commodities, make informed government contract decisions and intelligent budget planning. Since 1978,
readers have loyally referred to the Municipal Cost Index to determine the cost of inflation and, hence, the rising cost of doing
business as a local government.
Source: American City and County Magazine
225.00
230.00
235.00
240.00
245.00
250.00
255.00
1Q '17 2Q '17 3Q '17 4Q '17 1Q '18 2Q '18 3Q '18 4Q '18 1Q '19 2Q '19 3Q '19
Municipal Cost Index
Hotel Occupancy Tax Analysis Outlook Positive
3rd Quarter FY 2018-19
Actual Y-T-D
Occupancy Tax Revenue:831,966$ 2,266,180$
FY 2018-19 Budget 971,853$ 2,387,326$
Over (Under) Budget (139,886)$ (121,146)$
Hotel Occupancy Tax Budget:3,052,174$
3,052,174$
Variance:-$
Description:Tax imposed on a person who, under a lease, concession, permit, right of access, license, contract,or
agreement, pays for the use of a room that is in a hotel. A hotel includes: any building in which the public may obtain
sleeping accomodations; motels; a tourist home, house or court; lodginghouse;inn;roominghouse;or bed and
breakfast. The tax rate levied by the City is 7% of the price paid for a room. The State also levies a tax equal to 6%.
Analysis:While the use of this revenue source is restricted by state law,it is an essential revenue source for various
tourist related activities within the community and an important indicator of local economic activity. Hotel Occupancy
tax revenue through the 3rd Quarter of FY 2019 was 15.51% less than budget and 2.12% more than the prior year's
actual. Staff has rated the outlook for this economic indicator as Positive.
FISCAL YEAR FORECAST
End of Year Projection:
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
$900,000
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
Hotel Occupancy Tax Collections
FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19
Sales and Use Tax Analysis Outlook Cautious
3rd Quarter FY 2018-19
Actual Y-T-D
Revenue: Gross Sales Tax
Municipal Operations 431,055$ 1,299,842$
General Retail & Others 9,698,215 27,945,687
Comptroller Fees (190,332) (548,269)
Amount Retained (186,525) (537,303)
Total Revenue 9,752,413$ $28,159,957
Economic Incentives1 673,646$ 2,609,821$
Net Total 9,078,767 25,550,136
FY 2018-19 Budget 9,331,680 27,632,958
Over(Under) Budget (252,913)$ (2,082,822)$
Sales Tax Budget:41,425,582$
Year End Projection:37,953,567
Variance to Original Budget:(3,472,015)$
Economic Development Expenditure Budget:3,854,014$
Year End Projection:3,282,141
Variance to Original Budget:(571,873)$
1. Includes Denton Crossing, Unicorn Lake, Rayzor Ranch, Golden Triangle and O'Reilly Hospitality.
Description:Tax imposed on all retail sales, leases, and rentals of most goods,as well as taxable services. The total tax
rate levied within the City is 8.25% (State, 6.25%; City, 1.5%; DCTA, 0.5%).
Analysis:As the second largest revenue source to the City's General Fund, sales and use taxes are essential to the
delivery of services to the community. Sales tax revenues through the 3rd quarter of FY 2019 compared to revenues from
the prior year 3rd quarter shows a 2.27% increase, and compared to the budget it is 2.71% below. Staff has rated this
indicator as Cautious.
$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
$7.0
$8.0
$9.0
$10.0
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
Gross Sales Tax Collections (Millions)
FY 2014-15 Actual FY 2015-16 Actual FY 2016-17 Actual FY 2017-18 Actual FY 2018-19 Actual
Certificates of Occupancy Outlook Positive
Source: City of Denton's Development Services Department.
Description:Certificates of Occupancy (CO) are permits issued in compliance with the 2009 International Building
Code (IBC) and applicable City ordinances. The IBC states, "that no building shall be used or occupied, and no
change in the existing occupancy classification of a building or structure or portion thereof shall be made, until the
building official has issued a certificate of occupancy." Certificates of Occupancy ensure that applicable building,
fire and consumer health codes are met.
Analysis:Certificates of Occupancy are an economic indicator that provides a framework for the overall condition
of the local economy. Certificates of Occupancy increased 94.44% from the prior quarter and increased 266.28%
from the 3rd Quarter of 2018. Staff has rated the outlook for this revenue indicator as positive.
0.0
20.0
40.0
60.0
80.0
100.0
120.0
1Q
'14
2Q
'14
3Q
'14
4Q
'14
1Q
'15
2Q
'15
3Q
'15
4Q
'15
1Q
'16
2Q
'16
3Q
'16
4Q
'16
1Q
'17
2Q
'17
3Q
'17
4Q
'17
1Q
'18
2Q
'18
3Q
'18
4Q
'18
1Q
'19
2Q
'19
3Q
'19
Certificates of Occupancy
Residential Permits Outlook Positive
Source: City of Denton's Development Services Department.
Description:Residential Permits are issued in compliance with the 2009 International Residential Code (IRC)and
applicable City ordinances. The data presented in this analysis only include new permits issued and not
remodels/alterations.
Analysis:Residential Permits are an economic indicator that provides a framework for the overall condition of the
local economy.In particular, residential permits have a direct correlation with building inspection fees and
appraised values. Residential permits increased 50.5%from the prior quarter and increased 88.8%from the 3rd
Quarter of 2018. Staff has rated the outlook for this revenue indicator as Positive.
0.0
50.0
100.0
150.0
200.0
250.0
300.0
350.0
1Q
'14
2Q
'14
3Q
'14
4Q
'14
1Q
'15
2Q
'15
3Q
'15
4Q
'15
1Q
'16
2Q
'16
3Q
'16
4Q
'16
1Q
'17
2Q
'17
3Q
'17
4Q
'17
1Q
'18
2Q
'18
3Q
'18
4Q
'18
1Q
'19
2Q
'19
3Q
'19
Residential Permits
Section 4
City of Denton
Quarterly Financial Report
June 2019
INVESTMENT REPORT
3rd Fiscal Quarter 2019- June 30, 2019 Page 1
INVESTMENT POOL
Policy
Par Market Book Unrealized Max.Benchmark
Portfolio:Value Value Value Gain/(Loss)1 WAM WAM YTM Yield*
Investment Pool 571,880,125$ 572,216,038$ 570,837,285$ 1,378,753$ 276 550 2.20%2.00%
*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 100,000,000 99,902,745 99,375,096 527,649 450 2.40%17.41%100.00%U.S. Federal Agencies 292,536,000 293,165,540 292,317,285 848,255 369 2.04%51.21%100.00%
Municipal Bonds 4,000,000 3,991,640 4,000,000 (8,360) 92 1.22%0.70%15.00%
Certificates of Deposit 30,000,000 30,000,000 30,000,000 - 68 1.77%5.26%35.00%Commercial Paper 37,500,000 37,311,988 37,300,779 11,209 70 2.89%6.53%15.00%
Local Government Investment Pools 105,804,194 105,804,194 105,804,194 - 1 2.42%18.53%50.00%
Demand Deposits 2,039,931 2,039,931 2,039,931 - 1 1.00%0.36%-Total Portfolio 571,880,125$ 572,216,038$ 570,837,285$ 1,378,753$ 276 2.20%100.00%-
Current 3 Months Ago 3 Month 1 Year Ago
Investment Pool Comparisons:6/30/2019 3/31/2019 Difference 6/30/2018
Par Value 571,880,125$ 583,840,573$ (11,960,448)$ 555,902,431$
Market Value 572,216,038$ 582,174,414$ (9,958,376)$ 552,367,304$ Book Value 570,837,285$ 582,543,347$ (11,706,062)$ 555,370,737$
Unrealized Gain(Loss)1,378,753$ (368,933)$ 1,747,686$ (3,003,433)$
Weighted Average Maturity 276 242 34 291Yield to Maturity 2.20%2.20%0.006%1.58%
Portfolio Composition:
U.S. Treasuries 17.41%7.63%9.78%4.85%
U.S. Federal Agencies 51.21%45.85%5.36%54.11%
Municipal Bonds 0.70%0.86%-0.16%1.98%
Certificates of Deposit 5.26%11.16%-5.90%18.36%
Commercial Paper 6.53%9.37%-2.83%3.74%
Local Government Investment Pools 18.53%24.86%-6.32%11.92%
Insured Cash Sweep Savings Deposits 0.00%0.00%0.00%4.50%
Demand Deposits 0.36%0.27%0.09%0.54%
Bank Collateral Review**:Institution Collateral Type Market Value Collected Balance Collateral RatioWells Fargo Demand Deposits BNY Mellon U.S. Agency MBS 35,810,134$ 2,039,931$ 1755.46%
Independent Bank Certificates of Deposit Fed Home Loan Bank Standby LOC 8,137,478$ 5,141,507$ 158.27%
**Does not include FDIC insurance
Depository Ledger Balance Review:Institution Account Type Beginning Bal.Deposits Ending Bal.Wells Fargo Bank Checking 2,064,119$ 111,915,698$ 2,039,931$
Compliance Statement & Review:
111,939,886$
Treasury Manager
Preparer: Nancy Towle, CGFO
NANCY TOWLE
Chief Financial Officer Director of Finance
Reviewer: David Gaines
DAVID GAINES
Withdrawals
The Quarterly Investment Report is infull compliance with the objectives, restrictions,andstrategies asset forth in theCity of Denton's Investment Policy and thePublic Funds Investment Act (Texas Government Code, Chapter 2256.023).
Reviewer: Antonio Puente, Jr., CGFO
-2.90%
-13.10%
-0.18%
Pledge Required
2.79%
> 102%
> 100%
6.62%
-4.50%
ANTONIO PUENTE, JR.
(15) 0.62%
-1.28%
19,848,734$ 15,466,548$
4,382,186$
12.56%
CITY OF DENTON : QUARTERLY INVESTMENT REPORT
1 Year Ago
Difference
15,977,694$
1Unrealized gain/(loss)is the difference between the market and book valueand does not represent an actual gain or loss. Gains and losses are realized onlywhen a security is sold prior to maturity. Since it is the City's practice to hold investments until they mature,the temporary gains and losses are unlikely to berealized.
3rd Fiscal Quarter 2019- June 30, 2019 Page 2
INVESTMENT POOL
Current 3 Months Ago 3 Month 1 Year Ago 1 Year
6/30/2019 3/31/2019 Difference 6/30/2018 Difference
Par Value - U.S. Treasuries 100,000,000 45,000,000$ 55,000,000$ 27,000,000$ 73,000,000$
Par Value - U.S. Federal Agencies 292,536,000 267,456,000 25,080,000 300,756,000 (8,220,000)
Par Value - Municipal Bonds 4,000,000 5,000,000 (1,000,000) 11,000,000 (7,000,000)
Certificates of Deposit 30,000,000 65,000,000 (35,000,000) 102,000,000 (72,000,000)
Par Value - Commercial Paper 37,500,000 55,000,000 (17,500,000) 21,000,000 16,500,000
Local Government Investment Pools 105,804,194 144,804,194 (39,000,000) 66,174,172 39,630,022
Insured Cash Sweep Savings Deposits - - - 25,000,000 (25,000,000)
Demand Deposits 2,039,931 1,580,379 459,553 2,972,259 (932,328)
Total Par Value 571,880,125$ 583,840,573$ (11,960,447)$ 555,902,431$ 15,977,694$
Market Value - U.S. Treasuries 99,902,745 44,629,860$ 55,272,885$ 26,827,579$ 73,075,166$
Market Value - U.S. Federal Agencies 293,165,540 266,588,486 26,577,054 297,698,394 (4,532,854)
Market Value - Municipal Bonds 3,991,640 4,972,860 (981,220) 10,904,650 (6,913,010)
Certificates of Deposit 30,000,000 65,000,000 (35,000,000) 102,000,000 (72,000,000)
Market Value - Commercial Paper 37,311,988 54,598,635 (17,286,647) 20,790,250 16,521,738
Local Government Investment Pools 105,804,194 144,804,194 (39,000,000) 66,174,172 39,630,022
Insured Cash Sweep Savings Deposits - - - 25,000,000 (25,000,000)
Demand Deposits 2,039,931 1,580,379 459,552 2,972,259 (932,328)
Total Market Value 572,216,038$ 582,174,414$ (9,958,376)$ 552,367,304$ 19,848,734$
Book Value - U.S. Treasuries 99,375,096 44,450,199$ 54,924,897$ 26,910,229$ 72,464,867$
Book Value - U.S. Federal Agencies 292,317,285 267,137,471 25,179,814 300,518,882 (8,201,597)
Book Value - Municipal Bonds 4,000,000 5,000,000 (1,000,000) 11,000,000 (7,000,000)
Certificates of Deposit 30,000,000 65,000,000 (35,000,000) 102,000,000 (72,000,000)
Book Value - Commercial Paper 37,300,779 54,571,104 (17,270,325) 20,795,195 16,505,584
Local Government Investment Pools 105,804,194 144,804,194 (39,000,000) 66,174,172 39,630,022
Insured Cash Sweep Savings Deposits - - - 25,000,000 (25,000,000)
Demand Deposits 2,039,931 1,580,379 459,552 2,972,259 (932,328)
Total Book Value 570,837,285$ 582,543,347$ (11,706,062)$ 555,370,737$ 15,466,548$
Accrued Interest 2,706,286$ 3,010,592$ (304,306)$ 3,171,462$ (465,176)$
Cash Value -574,922,324$ 585,185,006$ (10,262,682)$ 555,538,766$ 19,383,558$
(Total Market Value + Accrued Interest)
Unrealized Gain/(Loss)1,378,753$ (368,933)$ 1,747,686$ (3,003,433)$ 4,382,186$
Change in Fair Value since 9/30/18 -(1,980,866)$ (1,348,219)$ (632,648)$ (1,631,152)$ (349,714)$
(GASB 31)
Strategy Statement:The investment pool is an aggregation of the majority ofCity fundswhich may include tax receipts, enterprise fundrevenues, fine and fee income,as
well as some,but not necessarily all bond proceeds, grants, gifts and endowments. This portfolio is maintained to meet anticipated daily cash needsfor the City's operations, capital projects and debt service.In order tomeet these obligations and to minimize potential liquidation losses,the dollar-weighted stated average maturity of the investment pool shall not exceed 1.5 years or 550 days. The objectives of this portfolio are to:(1) ensuresafetyofprincipalbyinvestinginonly high quality securities for which a strong secondary market exists; (2) ensure that anticipated cash flow needsare matched with adequate investment liquidity; (3) limit market and credit risk through diversification;and (4) attain the best feasible yield,commensurate with the objectives and restrictions set forth inthe Investment Policy,by actively managing the portfolio to meet or exceed the twelvemonth moving average yield of a one year U.S. Treasury bill as derived from the Federal Reserve Statistical Release H.15 for constant maturities.
CITY OF DENTON : QUARTERLY INVESTMENT REPORT
3rd Fiscal Quarter 2019- June 30, 2019 Page 3
INVESTMENT POOL
Current 3 Months Ago 1 Year Ago
Summary By Security Type:6/30/2019 3/31/2019 6/30/2018
U.S. Treasuries - Coupon 99,375,096$ 44,450,199$ 26,910,229$
U.S. Federal Agencies - Amort 6,184,686 6,145,976 -
U.S. Federal Agencies - Coupon 270,376,599 240,235,562 279,762,927
U.S. Federal Agencies - Callable 15,756,000 20,755,933 20,755,955
Municipal Bonds - Coupon 4,000,000 5,000,000 11,000,000
Certificates of Deposit - CDARS 25,000,000 25,000,000 42,000,000
Certificates of Deposit - SLOC 5,000,000 40,000,000 60,000,000
Commercial Paper - Discount 37,300,779 54,571,104 20,795,195
Local Government Investment Pools 105,804,194 144,804,194 66,174,172
Insured Cash Sweep Savings Deposits - - 25,000,000
Demand Deposits 2,039,931 1,580,379 2,972,259
Total Book Value 570,837,285$ 582,543,347$ 555,370,737$
Objective:
Current 3 Months Ago 1 Year Ago
Summary By Security Type:6/30/2019 3/31/2019 6/30/2018
U.S. Treasuries - Coupon 17.41%7.63%4.85%
U.S. Federal Agencies - Amort 1.08%1.06%-
U.S. Federal Agencies - Coupon 47.37%41.23%50.37%
U.S. Federal Agencies - Callable 2.76%3.56%3.74%
Municipal Bonds - Coupon 0.70%0.86%1.98%
Certificates of Deposit - CDARS 4.38%6.87%7.56%
Certificates of Deposit - SLOC 0.88%4.29%10.80%
Commercial Paper - Discount 6.53%9.37%3.74%
Local Government Investment Pools 18.53%24.86%11.92%
Insured Cash Sweep Savings Deposits --4.50%
Demand Deposits 0.36%0.27%0.54%
Total 100.00%100.00%100.00%
CITY OF DENTON : QUARTERLY INVESTMENT REPORT
The portfolio is restricted to U.S. Treasuries and agency securities (maturinginless than five years); state and locally issued Texas municipal bonds ratedAAorbetter(maturing in less than three years); insured, collateralized,or standby letter of credit backed certificates of deposit (maturing in less than three years);collateralized repurchase agreements (maturing in less than thirty days); commercial paper rated A-1/P-1 or better (maturing in less than 270 days);and localgovernment pools & SEC registered government money market mutual funds (weighted average maturity of less than 60 days).
U.S. Treasuries -
Coupon
17.41%
U.S. Federal Agencies -Amort
1.08%
U.S. Federal Agencies -Coupon
47.37%
U.S. Federal Agencies -
Callable
2.76%
CD -CDARS
4.38%
CD -SLOC
0.88%
Commercial Paper -Discount
6.53%Local Government Investment Pools
18.53%
Municipal Bonds -Coupon
0.70%
Demand Deposits
0.36%
Current6/30/2019
3rd Fiscal Quarter 2019- June 30, 2019 Page 4
INVESTMENT POOL
Current 3 Months Ago 1 Year Ago
Summary By Issuer:6/30/2019 3/31/2019 6/30/2018CDARS CDs 25,000,000$ 25,000,000$ 42,000,000$
LEGACYTEXAS BANK CDs*- 25,000,000 45,000,000 INDEPENDENT BANK CDs 5,000,000 15,000,000 15,000,000
U.S. TREASURY 99,375,096 44,450,199 26,910,229
FFCB 82,779,293 67,675,156 71,996,109
FHLB 108,984,950 108,975,042 115,963,972
FHLMC 45,785,962 35,762,186 42,928,630
FNMA 54,767,080 54,725,086 69,630,170
DALLAS, TX WTR & SWR REV BDS 4,000,000 4,000,000 10,000,000
TEXAS A&M UNIV REV BDS - 1,000,000 1,000,000
JP MORGAN SECURITIES LLC 9,923,192 9,925,267 10,854,083
TOYOTA MOTOR CREDIT CORP - 9,979,000 -
ING (U.S.) FUNDING LLC - - 4,996,125
NATIXIS NY BRANCH 19,926,197 24,756,024 4,944,988
NESTLE FINANCE INTL LTD 4,961,428 4,928,314 -
NORTHWESTERN UNIVERSITY 2,489,962 - -
RBC - 4,982,500 -
TEXSTAR 80,750,000 119,750,000 66,174,172
TEXPOOL 25,054,194 25,054,194 -
INSURED CASH SWEEP - - 25,000,000
WELLS FARGO DEMAND DEPOSITS 2,039,931 1,580,379 2,972,258
Total Book Value 570,837,285$ 582,543,347$ 555,370,737$
Objective:
Current 3 Months Ago 1 Year Ago
Summary By Issuer:6/30/2019 3/31/2019 6/30/2018CDARS CDs 4.38%4.29%7.56%
LEGACYTEXAS BANK CDs*-4.29%8.10%INDEPENDENT BANK CDs 0.88%2.57%2.70%
U.S. TREASURY 17.41%7.63%4.85%FFCB 14.50%11.62%12.96%
FHLB 19.08%18.71%20.88%
FHLMC 8.02%6.14%7.73%
FNMA 9.59%9.39%12.54%
DALLAS, TX WTR & SWR REV BDS 0.70%0.69%1.80%
TEXAS A&M UNIV REV BDS -0.17%0.18%
JP MORGAN SECURITIES LLC 1.74%1.70%1.95%
TOYOTA MOTOR CREDIT CORP -1.71%-
ING (U.S.) FUNDING LLC --0.90%
NATIXIS NY BRANCH 3.49%4.25%0.89%
NESTLE FINANCE INTL LTD 0.87%0.85%-
NORTHWESTERN UNIVERSITY 0.44%--
RBC -0.86%-
INSURED CASH SWEEP --4.50%
TEXSTAR 14.15%20.56%11.92%
TEXPOOL 4.39%4.30%-
WELLS FARGO DEMAND DEPOSITS 0.36%0.27%0.54%
Total 100.00%100.00%100.00%
*Formerly, ViewPoint Bank
CITY OF DENTON : QUARTERLY INVESTMENT 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 value and to those offering repurchase agreements, collateralized CDs (including standby letters of credit), and local or state of Texas municipal securities to no greater than 15 percent. The purpose of this requirement is to limit market and credit risk. Commercial paper issuers are further restricted by a 5 percent total portfolio limitation. There are no issuer limitations on U.S. Treasuries or FDIC insured products except as they pertain to the overall 35% certificates of deposit and 15% savings deposit restrictions. Some investment types may be further limited.
CDARS CDs, 4.38%
INDEPENDENT BANK CDs, 0.88%
U.S. TREASURY, 17.41%
FFCB, 14.50%
FHLB, 19.09%
FHLMC, 8.02%
FNMA, 9.59%
DALLAS WTR & SWR REV BDS, 0.70%
JP MORGAN SECURITIES LLC, 1.74%
NATIXIS NY BRANCH, 3.49%
NESTLE FINANCE INTL LTD, 0.87%
WELLS FARGO DEMAND DEPOSIT-0.36%
NORTHWESTERN UNIVERSITY , 0.44%
TEXSTAR, 14.15%
TEXPOOL, 4.39%
Current
6/30/2019
3rd Fiscal Quarter 2019- June 30, 2019 Page 5
INVESTMENT POOL
Current 3 Months Ago 1 Year Ago
Maturity Time Frame:6/30/2019 3/31/2019 6/30/2018
00-03 Months 194,544,125$ 222,384,573$ 162,146,431$
03-06 Months 40,000,000 84,200,000 39,000,000
06-12 Months 179,000,000 143,000,000 147,000,000
12-24 Months 120,836,000 106,756,000 192,000,000
24 Months & Over 37,500,000 27,500,000 15,756,000
Total Par Value 571,880,125$ 583,840,573$ 555,902,431$
Objective:
Current 3 Months Ago 1 Year Ago
Maturity Time Frame:6/30/2019 3/31/2019 6/30/2018
00-03 Months 34.02%38.09%29.17%
03-06 Months 6.99%14.42%7.02%
06-12 Months 31.30%24.49%26.44%
12-24 Months 21.13%18.29%34.54%
24 Months & Over 6.56%4.71%2.83%
Total 100.00%100.00%100.00%
CITY OF DENTON : QUARTERLY INVESTMENT REPORT
The risk of market price volatility is minimized through maturity diversification. Investment maturities are staggered toprovide cash flows based on
the anticipated needs of the City. Liquidity is achieved by matching investment maturities with forecasted cash disbursements and by investing insecurities with active secondary markets. Short-term local government investment pools and government money market mutual funds help toprovide daily liquidity and may be utilized as a competitive alternative to other fixed income investments.
$0
$50,000,000
$100,000,000
$150,000,000
$200,000,000
$250,000,000
$300,000,000
$350,000,000
$400,000,000
$450,000,000
$500,000,000
$550,000,000
$600,000,000
$650,000,000
Current 3 Months Ago 1 Year Ago
00-06 Months 06-12 Months 12-24 Months 24 Months & Over
3rd Fiscal Quarter 2019- June 30, 2019 Page 6
ECONOMIC SUMMARY
Interest Rate History
Source: U.S. Federal Reserve Statistical
Release (H.15)
Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16
Market Sector:Avg Avg Avg Avg Avg Avg Avg Avg Avg Avg Avg Avg
Fed Funds (effective)0.09%0.08%0.10%0.09%0.12%0.11%0.13%0.14%0.24%0.36%0.38%0.40%
3-Month U.S. T-Bill 0.07%0.05%0.04%0.02%0.03%0.03%0.02%0.02%0.23%0.30%0.27%0.29%
2-Year U.S. T-Note 0.34%0.40%0.45%0.57%0.64%0.64%0.69%0.71%0.98%0.88%0.73%0.77%
Portfolio Benchmark*0.13%0.13%0.12%0.12%0.12%0.15%0.18%0.24%0.32%0.41%0.49%0.54%
Portfolio Yield 0.50%0.49%0.49%0.51%0.55%0.57%0.57%0.65%0.72%0.79%0.81%0.90%
Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19
Market Sector:Avg Avg Avg Avg Avg Avg Avg Avg Avg Avg Avg Avg
Fed Funds (effective)0.54%0.79%1.04%1.15%1.30%1.67%1.90%2.15%2.40%2.41%2.37%
3-Month U.S. T-Bill 0.51%0.75%1.00%1.05%1.32%1.71%1.92%2.20%2.36%2.39%2.09%
2-Year U.S. T-Note 1.20%1.31%1.34%1.38%1.84%2.27%2.53%2.57%2.49%2.26%2.10%
Portfolio Benchmark*0.61%0.69%0.83%1.00%1.20%1.46%1.75%2.05%2.33%2.48%2.00%
Portfolio Yield 0.95%1.07%1.16%1.25%1.29%1.42%1.58%1.73%2.01%2.20%2.20%
*Twelve month moving average of a
one year U.S. T-bill yield
Fiscal Year:
2018-2019
2017-2018
2016-2017
2015-2016
2014-2015
QUARTERLY COMMENTARY
June 30, 2019Source: Hilltop Securities Asset Management Economic Summary
CITY OF DENTON : QUARTERLY INVESTMENT REPORT
Fiscal Year 2013-2014 Fiscal Year 2014-2015 Fiscal Year 2015-2016
Fiscal Year to Date Earnings
3 Months 6 Months 9 Months 12 Months
849,369$
613,877$ 1,228,059$
The portfolio was in compliance with the City's Investment Policy during the third quarter. In April, there were maturities totaling $25 million, and $20 million in purchases at an average yield of 2.51%. In May, there were maturities totaling $21 million with an
average yield of 1.81%. Purchases in May totaled approximately $50 million at an average yield of 2.92%. During June, five investments matured totaling $35 million with an average yield of 2.22%, and four new investments were purchased totaling $37.5 million with an average yield of 2.05%. The portfolios weighted average yield remained steady at 2.02%, while the benchmark 12-
month Treasury bill index decreased 48 basis points to 2.00%. Imposed tariffs on $200 million of Chinese imports are currently at 25%, with trade negotiations ongoing. The resulting economic slowdown has the Federal Reserve considering rate cuts. As expected Pool yields have steadily been declining as securities within the underlying pool portfolios mature and are replaced by lower yields. Staff will continue to monitor the investment portfolio and ensure compliance with the City's Investment Policy and the Public Funds Investment Act.
Fiscal Year 2017-2018
2,138,420$ 8,955,045$
1,874,846$
4,734,315$ 6,999,226$
3,961,973$
1,175,753$ 2,763,135$
4,317,890$ 6,515,166$
2,743,857$ 1,771,206$
2,695,211$
-$ 9,262,499$ 6,122,536$ 2,955,835$
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Fiscal Year 2016-2017 Fiscal Year 2018-2019
0.00%
1.00%
2.00%
3.00%
Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19
Fed Funds 3-Month T-Bill 2-Year T-Note Portfolio Yield Portfolio Benchmark*
FY 2013-14 FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19