2020-005 - Fourth Quarter Financial Report FY 2018-19Date: January 17, 2020
INFORMAL STAFF REPORT
TO MAYOR AND CITY COUNCIL
SUBJECT:
Quarterly Financial Report for the period ending September 30, 2019.
BACKGROUND:
Attached for your review is the Quarterly Financial Report for the period ending September 30,
2020. If you have any questions or need additional information, please let me know.
PARTICIPATING DEPARTMENTS:
Finance, Accounting
STAFF TIME TO COMPLETE REPORT:
The estimated amount of cumulative staff time to complete the report is 20 hours.
STAFF CONTACT:
David Gaines, Finance Director
(940) 349-8260
David.Gaines@cityofdenton.com
FY 2018-19
FOURTH QUARTER FINANCIAL REPORT
SEPTEMBER 2019
TEXAS
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 September 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.
Antonio Puente, Jr.
Chief Financial Officer
215 East McKinney Street
Denton, TX 76201
940-349-8260
Section 1
City of Denton
Quarterly Financial Report
September 2019
Executive Dashboards
Note: All figures presented are in millions of dollars.FY 2018-19 FY 2018-19ANNUAL PRELIMINARY FY 2018-19DESCRIPTION BUDGET 1ACTUALS VARIANCEBeginning Fund Balance as of 09/30/18 31.09$ 30.32$ RESOURCES: Ad Valorem Taxes 46.26 46.30 0% Sales Tax 41.43 38.33 -7% Franchise Fees 4.36 4.98 14% Other Taxes 0.51 0.52 2% Service Fees 8.11 7.22 -11% Fines and Fees 3.72 3.65 -2% Licenses and Permits 3.86 3.89 1% Miscellaneous Revenue 2.29 2.85 24% Transfers In 17.16 19.11 11%Total Revenues 127.70 126.85 -1%Total Resources 158.79 157.17 EXPENDITURES : Personal Service 86.87 86.49 0% Material and Supplies 3.01 2.79 -7% Maintenance and Repairs 2.81 2.63 -6% Insurance 1.43 1.43 0% Miscellaneous 1.20 1.16 -3% Operations 18.25 17.26 -5% Transfers Out 15.07 13.97 -7% Fixed Assets 0.54 0.74 37%Total Expenditures 129.18 126.47 -2%Net Income (Loss) (1.48) 0.38 Ending Fund Balance 29.61$ 30.70$ City of Denton, Texas General Fund Executive Dashboard $‐ $20 $40 $60 $80 $100 $120 $140Revenue & Expenses (in Millions)YTD RevenueYTD ExpensesKey TrendsSales Tax revenues are $3.10M lower than expected.Service Fees revenues are $0.89M lower than expected mainly due to ambulance fees.Transfers In revenues are $1.95M higher than expected due to recapture in previously cash funded transportation projects and an increase in administrative transfers.Operations expenditures are $0.99M less than expected mainly due to savings related to 380 Agreements.Transfers Out expenditures are $1.10M less than expected 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 $3.5Sales Tax Monthly Average by Quarter1Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which was estimated in the FY 2018‐19 budget process.
Note: All figures presented are in millions of dollars.City of Denton, Texas Electric Fund Executive DashboardDESCRIPTIONFY 2018-19 ANNUAL BUDGET 1FY 2018-19 PRELIMINARY ACTUALS FY 2018-19 VARIANCEBeginning Working Capital and Reserves as of 9/30/18 62.95$ 73.94$ RESOURCES: Rate Revenues 135.52 147.84 9% Transmission Revenue 40.06 44.61 11% Other Revenues 3.75 8.88 137% DEC Revenues 36.30 37.48 3%Total Revenues 215.63 238.81 11%Total Resources 278.58 312.75 EXPENDITURES: Purchased Power 67.19 90.12 34% DEC Fuel 14.97 6.95 -54% Transmission of Power 12.50 17.00 36% Personnel Service 21.77 17.80 -18% Operation and Maintenance 27.23 22.80 -16% Debt Service 69.30 50.65 -27% Transfers Out 14.33 14.31 0% Capital Outlay 16.40 16.31 -1%Total Expenditures 243.69 235.94 -3%Net Income (Loss) (28.06) 2.87 Ending Working Capital and Reserves 34.89$ 76.81$ $0$50$100$150$200$250$300Revenue & Expenses (in Millions)YTD RevenueYTD ExpenseKey TrendsRevenues are 11% higher than budgeted. Rate Revenues are $12.3 million higher than budgeted due to higher kWh sales in August & September. DEC Revenues are $1.2 Million higher than budgeted due to high temperatures in August and fluctuations in ERCOT Market prices. TCOS Revenue is $4.6 million higher than budgeted due to an increase in the interim rate filing. Other Revenue includes $4.2 Million from TMPA for transmission cost of service.Purchased Power expenditures are higher than budgeted due to higher market prices and DEC Fuel expenses are lower than budgeted due to lower fuel usage.Transmission of Power expenditures are $4.5 million more than budgeted due to filings by other electric utilities.Personnel Services are $4.0 million less than budgeted due to vacancies.Debt Service is $18.7 Million less than budgeted due to not paying off the TMPA Scrubber debt in the amount of $28.6 Million and an accounting change increasing DEC Debt Service $9.9 Million. As of September 30, $18.5 Million in reserves was utilized to cover the deficit between ECA revenues and power cost.01002003004005006001Q 13 3Q 13 1Q 14 3Q 14 1Q 15 3Q 15 1Q16 3Q16 1Q17 3Q17 1Q18 3Q18 1Q19 3Q192013 – 2018 Historical Quarterly GWH Sales1 Annual adopted budget as amended or modified. Beginning Fund Balance representsthe amount which was estimated in the FY 2018‐19 budget process.
Note: All figures presented are in millions of dollars.FY 2018-19 FY 2018-19ANNUAL PRELIMINARY FY 2018-19DESCRIPTION BUDGET 1ACTUALS VARIANCEBeginning Working Capital and Reserves as of 09/30/18223.98$ 25.95$ RESOURCES: Water Sales 37.51 35.35 -6% Other Water Revenues 1.01 1.82 80% Transfers In 1.49 1.49 0% Impact Fee Revenue 5.70 5.70 0%Total Re ve n u e s 45.71 44.36 -3%Total Resources 69.69 70.31 EXPENDITURES: Personal Service 8.86 7.65 -14% Operations, Services 9.85 8.83 -10% Capital Outlay 15.43 15.11 -2% Debt Service 12.66 12.70 0% Transfers Out 3.39 3.69 9%Total Expenditures 50.19 47.98 -4%Net Income (Loss) (4.48) (3.62) Ending Working Capital and Reserves 19.50$ 22.33$ 05001,0001,5002,0002,5001Q143Q141Q153Q151Q163Q161Q173Q171Q183Q181Q193Q192014‐2019 Historical Quarterly Gallons Sold (in Millions)City of Denton, Texas Water Fund Executive Dashboard $‐ $10 $20 $30 $40 $50 $60Revenue & Expenses (in Millions)YTD RevenueYTD ExpensesKey TrendsWater Sales are down compared to budget due to a cool and wet first nine months of the fiscal year. Rainfall totals were 48.2” (2019) compared to 42.39” (2018).Other Water Revenues are above budget due to increase in tapping fee revenues as a result of increased growth in the community. 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 $0.75 million for Development Plan Line Reserves.
FY 2018-19 FY 2018-19ANNUAL PRELIMINARY FY 2018-19DESCRIPTION BUDGET 1ACTUALS VARIANCEBeginning Working Capital and Reserves as of 09/30/18219.19$ 18.67$ RESOURCES: Wastewater Fees 23.64 24.16 2% Other Wastewater Revenue 1.83 1.81 -1% Drainage Fees 4.73 4.88 3% Transfer In 0.55 0.65 18% Impact Fee Revenue 2.00 2.00 0%Total Revenues 32.75 33.50 2%Total Resources 51.94 52.17 EXPENDITURES: Personal Service 8.30 7.91 -5% Operations, Services 8.24 7.63 -7% Capital Outlay 10.83 10.96 1% Debt Service 6.81 6.86 1% Transfer Out 3.29 3.70 12%Total Expenditures 37.47 37.06 -1%Net Income (Loss) (4.72) (3.56) Ending Working Capital and Reserves 14.47$ 15.11$ 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 $30 $35 $40Revenue & Expenses (in Millions)YTD RevenueYTD ExpensesKey TrendsTransfer in are over budget due to a transfer from solid waste for a haul truck.Transfer out are over budget due to general fund cost of service adjustments.Personal Service expenses are below budget due to position vacancies.Operations, Services are below budget due to reduced maintenance and repairs expenditures.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 $0.54 million for Development Plan Line Reserves.
FY 2018-19 FY 2018-19ANNUAL PRELIMINARY FY 2018-19DESCRIPTION BUDGET ACTUALS VARIANCEREVENUES: Residential Drainage Fees 1.82$ 1.88$ 3% Nonresidential Drainage Fees 2.91 3.00 3% Wastewater Resources 0.04 - -100% General Fund Transfer 0.32 0.32 0%Total Revenues 5.09 5.20 2%EXPENDITURES: Personal Service 1.70 1.70 0% Operations, Services 0.73 0.68 -7% Capital Outlay 1.74 1.87 7% Debt Service 0.48 0.48 0% Transfer Out 0.44 0.47 7%Total Expenditures 5.09 5.20 2%Net Income (Loss) -$ -$ Note: All figures presented are in millions of dollars.City of Denton, Texas Drainage Operations Executive DashboardKey TrendsOperations, Services are under budget due to lower materials & supplies and outside services costs. $‐ $1.0 $2.0 $3.0 $4.0 $5.0 $6.0Revenue & Expenses (in Millions)YTD RevenueYTD Expenses
FY 2018-19 FY 2018-19ANNUAL PRELIMINARY FY 2018-19DESCRIPTION BUDGET 1ACTUALS VARIANCEBeginning Working Capital and Reserves as of 09/30/1828.64$ 10.92$ RESOURCES: Collection & Disposal 26.29 27.55 5% Recycling 6.84 6.73 -2% Other Revenue 1.39 0.47 -66%Total Revenues 34.52 34.75 1%Total Resources 43.16 45.67 EXPENDITURES: Personal Service 11.21 9.83 -12% Operations, Services 8.69 8.61 -1% Capital Outlay 1.44 1.33 -8% Debt Service 9.00 9.00 0% Landfill Closure 1.16 0.84 -28% Transfer Out 3.37 3.68 9%Total Expenditures 34.87 33.29 -5%Net Income (Loss) (0.35) 1.46 Ending Working Capital and Reserves 8.29$ 12.38$ 01,0002,0003,0004,0005,0006,0007,0008,0002018Qtr 12018Qtr 22018Qtr 32018Qtr 42019Qtr 12018Qtr 22018Qtr 32018Qtr 4Refuse 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 less than budget due to transfers from Materials Management being returned.Personal Services are less than budget due to unfilled fulltime positions.Decrease in Capital outlay is due to decrease in container and cart purchases.Landfill Closure is less than expected due to a recalculation of the Closure / Post Closure liability.Transfers‐Out are projected higher due to increased transfers to Engineering and Utility Admin. 05,00010,00015,00020,00025,00030,0002018Qtr 12018Qtr 22018Qtr 32018Qtr 42019Qtr 12019Qtr 22019Qtr 32019Qtr 4Commercial 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 TrendsGas well revenues continue to decrease throughout the year.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$5.02009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019GAS WELLREVENUE(in millions of dollars by fiscal year) 20,000 30,000 40,000 50,000 60,000AIRPORT OPERATIONS BY QUARTER(takeoff or landing by fiscal year)Note: All financial amounts presented are in millions of dollars.FY 2018-19 FY 2018-19ANNUAL PRELIMINARY FY 2018-19DESCRIPTION BUDGET 1ACTUALS VARIANCEBeginning Working Capital and Reserves as of 09/30/18 2.67$ 2.93$ RESOURCES: Airport Ground Leases 0.77 0.74 -4% FBO Commissions 0.11 0.12 9% Fuel Flowage Fees 0.21 0.21 0%Total Operating Revenues 1.09 1.07 -2%EXPENDITURES: Personal Service 0.55 0.50 -9% Operations, Services 0.42 0.32 -24% Transfer Out 0.52 0.52 0%Total Operating Expenditures 1.49 1.34 -10%Net Operating Income (Loss) (0.40) (0.27) NON-OPERATING REVENUES: Investment Income 0.02 0.10 400% Gas Well Royalties 0.43 0.31 -28% Miscellaneos Income 0.00 0.02 0%Total Non-Operating Revenues 0.45 0.43 -4%NON-OPERATING EXPENDITURES: Transfer Out - Capital 0.25 0.25 0%Total Non-Operating Expenditures 0.25 0.25 0%Net Non-Operating Income (Loss) 0.20 0.18 Net Income (Loss) (0.20) (0.09) Ending Working Capital and Reserves 2.47$ 2.84$ 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 PRELIMINARY FY 2018-19DESCRIPTION BUDGET 1ACTUAL VARIANCEBeginning Working Capital and Reserves as of 09/30/2018 1.16$ 1.62$ RESOURCES: Franchise Fees 13.52 12.72 -6% Street Cuts 0.36 0.19 -47% Investment Income 0.01 0.05 400% Transfers In 1.20 1.03 -14%Total Revenues 15.09 13.99 -7%Total Resources 16.25 15.61 EXPENDITURES: Personal Service 3.64 3.28 -10% Materials & Supplies 0.12 0.11 -8% Maintenance & Repairs 9.13 6.78 -26% Operations, Services 0.78 0.91 17% Transfer Out 1.40 1.09 -22%Total Expe n di tu re s 15.07 12.17 -19%Net Income (Loss) 0.02 1.82 Ending Fund Balance 1.18$ 3.44$ 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 $0.80M lower than budget due to a reduction in transfers from the General Fund.Maintenance & Repairs are lower than budgeted due to a delay of street projects related to weather.No surface treatments were completed in the FY17‐18 due to weather.No surface treatments were completed in the 2nd, 3rd,or 4thquarter of the current year, several are in progress and expected be completed in the 1stquarter in 2020.Note: All figures presented are in millions of dollars.0246810Qtr1 Qtr2 Qtr3 Qtr4Tons of Asphalt Laid (in Thousands)FY17-18FY18-190204060Qtr 1Qtr 2Qtr 3Qtr 4Lane Miles Surface TreatmentFY 17-18FY 18-19 $- $3.0 $6.0 $9.0 $12.0 $15.0Oct-18 Dec-18 Feb-19 Apr-19 Jun-19 Aug-19Revenue & Expenses (in Millions)YTD RevenueYTD Expenses
FY 2018-19 FY 2018-19GRANT PRELIMINARY FY 2018-19DESCRIPTION AMOUNT ACTUALS VARIANCE2018-19 Budget 1 Comm Development 3.64$ 1.21$ -67% Public Safety 1.02 1.00 -2% Transportation 72.92 17.62 -76% Other 0.28 0.03 -89%Total Budget 77.86 19.86 -74%New Awards 1 Public Safety 0.32 0.32 0% Other 0.03 0.03 0%Total New Awards 0.35 0.35 0%Totals 78.21$ 20.21$ -74%COMM DEV4.65%PUBLIC SAFETY1.72%TRANS93.23%OTHER0.40%FY 2018‐19 Grants Awarded $‐ $20.0 $40.0 $60.0 $80.0COMMDEVPUBLICSAFETYTRANSOTHERMillionsAwardsExpensesFY 2018‐19 Awards & Expenses (in Millions)Key TrendsThe following grants have been received in FY 2018-19: Federal Equitable Sharing: $25,677Chapter 59 Asset Forfeitures: $26,290U.S. Marshals Violent Offenders Task: $30,560Organized Crime Drug Enforcement: $18,344PD-Law Enforcement Officer Education:$10,764Fire-Law Enforcement Officer Education:$2,406Sexual Assault Nurse Examiners:$54,1402017 UASI: $29,574Domestic & Sexual Violence Initiative: $15,706Staffing for Adequate Fire & Emergency: $90,716Victim Assistance Coordinator Grant: $20,182Interlibrary Loan Program: $8,552Collaborative Summer Library Program: $1,482Historic Preservation-CLG Grant:$20,000City of Denton, Texas Grants DashboardNote: All figures presented are in millions of dollars.1This grant amount will be spent over several years and the fiscal year 2018-19 projections are estimated expenditures for one year. Remaining grant amounts will be spent in future fiscal year.
Section 2
City of Denton
Quarterly Financial Report
September 2019
This report is designed for internal use and does not include all the
funds and accounts included in the City of Denton’s operations. The
information provided is unaudited; for a complete audited report,
please refer to the City of Denton Comprehensive Annual Financial
Report, available through the City’s Finance Department, City
Secretary’s Office, or Denton Public Libraries.
FINANCIAL SUMMARY
City of Denton General FundSchedule of Revenues - Budget vs Actuals (Unaudited)For the Period Ended September 30, 2019
PRIOR ANNUAL PRELIMINARY BUDGET VS
REVENUE DESCRIPTION Y-T-D BUDGET ACTUALS ACTUALS
Current Year - Ad Valorem 44,411,291$ 45,674,373$ 45,518,887$ 0%
Delinquent - Ad Valorem 127,769 296,882 373,348 26%
Miscellaneous Penalties & Fees 318,650 288,727 402,957 40%
Ad Valorem Taxes 44,857,710 46,259,982 46,295,192 0%
Sales Tax 38,270,025 41,425,582 38,330,825 -7%
Franchise - Gas Utilities 342,739 298,753 341,345 14%
Franchise - Private Electric Utilities 122,750 105,949 121,054 14%
Franchise - Cable 480,873 410,188 468,667 14%
Franchise - Telecom 233,956 201,058 229,722 14%
Franchise - Denton Municipal Utilities 3,804,531 3,346,901 3,824,060 14%
Franchise Fees 4,984,849 4,362,849 4,984,849 14%
Other Taxes 493,461 505,936 523,268 3%
Ambulance Service Fees 3,288,454 3,700,000 3,057,599 -17%
Fire Department Fees 214,715 206,000 195,104 -5%
Building Inspections Fees 591,916 589,172 594,962 1%
Park Department Fees 1,957,227 2,003,991 1,760,319 -12%
Planning Department Fees 982,744 1,063,557 1,134,739 7%
Reprographics Fees 333,984 370,160 324,216 -12%
Miscellaneous Service Fees 147,805 181,671 154,641 -15%
Service Fees 7,516,845 8,114,551 7,221,580 -11%
Denton Municipal Fines 1,432,420 1,482,000 1,465,332 -1%
Parking Fines 227,670 260,000 282,940 9%
Miscellaneous Fines and Fees 846,873 901,000 839,388 -7%
Court Administrative and Service Fees 1,016,104 1,080,000 1,064,037 -1%
Fines and Fees 3,523,067 3,723,000 3,651,697 -2%
Demolition Permits 5,320 6,500 6,555 1%
Building Permits 3,638,497 3,738,024 3,784,319 1%
Certificate of Occupancy 71,575 80,000 70,810 -11%
Miscellaneous Licenses and Permits 24,298 39,000 28,136 -28%
Licenses and Permits 3,739,690 3,863,524 3,889,820 1%
Investment Income 514,938 460,000 1,114,348 142%
Miscellaneous Revenues 1,501,624 1,825,526 1,732,730 -5%
Miscellaneous Resources 2,016,562 2,285,526 2,847,078 25%
ROI - Denton Municipal Utilities 8,278,398 8,427,209 8,458,558 0%
Transfers 8,036,527 8,733,146 10,650,174 22%
Transfers 16,314,925 17,160,355 19,108,732 11%
Total General Fund Revenues 121,717,134$ 127,701,305$ 126,853,041$ -1%
City of Denton
General Fund
Schedule of Expenditures - Budget vs Actuals (Unaudited)
For the Period Ended September 30, 2019
PRIOR ANNUAL PRELIMINARY BUDGET VS
Y-T-D BUDGET ACTUALS ACTUALS
NEIGHBORHOOD SERVICES
Building Inspections 2,796,226$ 3,052,886$ 3,055,220$ 0%
Community Improvement Services 1,461,586 1,561,728 1,443,258 -8%
Libraries 5,742,354 5,963,678 5,847,381 -2%
Parks and Recreation 13,353,602 10,702,253 10,291,254 -4%
Planning 2,977,515 3,563,561 3,364,924 -6%
Gas Well Review 407,229 415,606 332,675 -20%
Social Services 639,312 672,928 637,046 -5%
27,377,824 25,932,640 24,971,758 -4%
PUBLIC SAFETY
Animal Services 1,531,051 1,633,265 2,014,949 23%
Fire 29,473,020 30,330,574 30,477,640 0%
Municipal Court 1,233,130 1,273,547 1,094,975 -14%
Municipal Judge 403,188 448,161 422,835 -6%
Police 31,583,773 35,697,544 34,929,226 -2%
64,224,162 69,383,091 68,939,625 -1%
TRANSPORTATION
Traffic Operations 3,975,051 2,092,526 2,062,024 -1%
Transportation Operations 626,389 398,291 192,080 -52%
Street Lighting 801,318 777,000 825,907 6%
5,402,758 3,267,817 3,080,011 -6%
ADMINISTRATIVE & COMMUNITY SERVICES
City Manager's Office 2,994,797 2,236,693 2,351,618 5%
Economic Development 3,493,832 5,951,194 4,759,609 -20%
Facilities Management 4,111,625 5,386,980 4,696,820 -13%
Finance 2,991,561 3,517,675 3,327,966 -5%
Human Resources 1,755,565 1,827,469 1,762,011 -4%
Internal Audit 370,105 548,905 444,879 -19%
Legal Administration 2,000,836 2,703,529 2,547,530 -6%
Public Affairs 1,101,446 2,060,264 1,950,990
Non-Departmental 7,346,011 6,368,179 7,637,622 20%
26,165,778 30,600,888 29,479,045 -4%
TOTAL EXPENDITURES 123,170,522$ 129,184,436$ 126,470,439$ -2%
City of Denton
Electric Fund
Schedule of Revenues and Expenditures - Budget vs Actuals (Unaudited)
For the Period Ended September 30, 2019
PRIOR ANNUAL PRELIMINARY BUDGET VS
DESCRIPTION Y-T-D BUDGET1 ACTUALS ACTUALS
Beginning Working Capital
and Reserves as of 9/30/18 62,950,654$ 73,942,033$
REVENUES:
Rate Revenues 156,488,941$ 135,522,850 147,838,341 9%
Transmission Revenues 34,365,230 40,055,256 44,607,697 11%
Other Revenues 7,061,137 3,750,515 8,888,971 137%0%
DEC Revenues - 36,304,634 37,482,023 3%
Total Revenues 197,915,308 215,633,255 238,817,032 11%
EXPENDITURES:
Purchased Power 76,585,910 67,185,014 90,120,153 34%
DEC Fuel - 14,967,553 6,954,969 -54%
Transmission of Power 12,074,283 12,500,000 16,997,292 36%
Personnel Services 16,253,725 21,768,231 17,795,822 -18%
Materials and Supplies 992,396 1,085,645 679,912 -37%
Maintenance and Repair 701,778 1,729,069 670,898 -61%
Insurance 703,503 745,715 745,713 0%
Return on Investment Return on Investment5,991,680 6,204,970 6,331,599 2%
Franchise Fee Franchise Fee8,554,188 8,864,243 9,039,835 2%
Miscellaneous 491,054 1,413,893 616,222 -56%
Operations 4,140,379 7,198,477 4,719,211 -34%
Debt Service 34,364,908 69,303,309 50,649,750 -27%
Interfund Transfers 11,971,526 14,326,242 14,310,408 0%
Capital Outlay 25,036,734 16,402,335 16,312,335 -1%
Total Expenditures 197,862,064 243,694,696 235,944,119 -3%
Net Income (Loss)53,244$ (28,061,441) 2,872,914
Ending Working Capital and Reserves 34,889,213$ 76,814,947$
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.
City of Denton
Water Fund
Schedule of Revenues and Expenditures - Budget vs Actuals (Unaudited)
For the Period Ended September 30, 2019
PRIOR ANNUAL PRELIMINARY BUDGET VS
DESCRIPTION Y-T-D BUDGET2 ACTUALS ACTUALS
Beginning Working Capital
and Reserves as of 09/30/181 23,982,828$ 25,947,230$
REVENUES:
Water Sales Residential 20,300,407$ 19,496,211 18,035,192 -7%
Water Sales Commercial 17,483,857 16,841,145 16,203,789 -4%
Water for Resale 2,812,263 1,168,296 1,113,851 -5%
Other Water 1,448,887 767,349 1,387,309 81%
Transfers In 5,466,087 1,487,762 1,490,053 0%
Investment Income 319,526 251,000 427,212 70%
Impact Fee Revenue 3,755,404 5,700,000 5,700,000 0%
Total Revenues 51,586,431 45,711,763 44,357,406 -3% Use of Reserves - -
EXPENDITURES:
Personal Service 9,975,274 8,855,034 7,654,405 -14%
Purchased Power 1,340,181 1,431,895 1,277,220 -11%
Purchase of Water 1,857 3,000 2,059 -31%
Materials and Supplies 1,695,733 1,413,230 1,396,965 -1%
Maintenance and Repairs 1,224,639 1,439,203 1,200,652 -17%
Insurance 222,481 223,433 223,433 0%
Miscellaneous 254,174 411,219 245,728 -40%
Operations, Services 1,634,402 1,693,297 1,434,569 -15%
Capital Outlay 11,749,877 15,429,831 15,105,245 -2%
Return on Investment 1,376,185 1,339,555 1,255,412 -6%
Franchise Fee 1,965,981 1,898,986 1,793,445 -6%
Debt Service 12,638,093 12,662,613 12,700,195 0%
Transfers Out 3,482,633 3,390,738 3,686,482 9%
Total Expenditures 47,561,510 50,192,034 47,975,810 -4%
Net Income (Loss)4,024,921$ (4,480,271) (3,618,404)
Ending Working Capital
and Reserves 19,502,557$ 22,328,826$
1 The Beginning Working Capital balance excludes $10,884,298 of Impact Fee Reserves and $750,000 for Development Plan Line Reserves.
budget process.
2 Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which was estimated in the FY 2018-19
City of Denton
Wastewater Fund
Schedule of Revenues and Expenditures - Budget vs Actuals (Unaudited)
For the Period Ended September 30, 2019
PRIOR ANNUAL PRELIMINARY BUDGET VS
DESCRIPTION Y-T-D BUDGET2 ACTUALS ACTUALS
Beginning Working Capital
and Reserves as of 09/30/18 19,188,011$ 18,669,754$
REVENUES:
Residential Fees 12,199,424$ 10,657,173 11,536,543 8%
Commercial Fees 12,336,480 12,218,689 11,807,867 -3%
Effluent Irrigation Fees 119,802 68,576 113,177 65%
Wholesale Fees 590,985 694,234 699,724 1%
Other Wastewater Fees 1,656,837 1,624,678 1,513,552 -7%
Drainage Fees 4,782,259 4,727,006 4,880,196 3%
Transfer In 659,030 551,795 651,795 18%
Investment Income 254,222 208,000 297,875 43%
Impact Fee Reserves 2,000,000 2,000,000 2,000,000 0%
Total Revenues 34,599,039 32,750,151 33,500,729 2%
EXPENDITURES:
Personal Service 7,434,742 8,301,606 7,910,033 -5%
Purchased Power 1,028,092 1,135,567 1,064,075 -6%
Materials and Supplies 1,010,518 1,220,962 1,003,992 -18%
Maintenance and Repairs 1,132,435 1,278,137 1,071,889 -16%
Insurance 180,492 232,020 232,020 0%
Miscellaneous 42,141 80,218 73,183 -9%
Operations, Services 1,567,762 2,143,364 2,072,895 -3%
Capital Outlay 8,633,897 10,834,071 10,963,806 1%
Return on Investment 910,533 882,684 871,548 -1%
Franchise Fee 1,300,761 1,260,978 1,245,069 -1%
Debt Service 7,166,884 6,808,831 6,858,723 1%
Transfers Out 3,176,251 3,292,816 3,695,404 12%
Total Expenditures 33,584,508 37,471,254 37,062,637 -1%
Net Income (Loss)1,014,531$ (4,721,103) (3,561,908)
Ending Working Capital
and Reserves 14,466,908$ 15,107,846$
1 The Beginning Working Capital balance excludes $4,189,562 of Impact Fee Reserves, $1,000,000 for Drainage Reserves,
and $535,000 for Development Plan Line Reserves.
2 Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which was estimated
in the FY 2018-19 budget process.
City of Denton
Drainage Operations
Schedule of Revenues and Expenditures - Budget vs Actuals (Unaudited)
For the Period Ended September 30, 2019
PRIOR ANNUAL PRELIMINARY BUDGET VS
DESCRIPTION Y-T-D BUDGET ACTUALS ACTUALS
REVENUES:
Residential Drainage Fees 1,816,999$ 1,820,000$ 1,882,655$ 3%
Nonresidential Drainage Fees 2,965,262 2,907,006 2,997,541 3%
Wastewater Resources - 43,800 - -100%
Investment Interest Income - - - 0%
General Fund Transfer 424,030 316,795 316,795 0%
Total Revenues 5,206,291 5,087,601 5,196,991 2%
EXPENDITURES:
Personal Service 1,522,588 1,702,299 1,696,084 0%
Materials and Supplies 51,318 76,075 56,702 -25%
Maintenance and Repairs 85,974 122,487 128,623 5%
Insurance 25,461 35,767 35,767 0%
Miscellaneous 9,221 17,200 14,342 -17%
Operations, Services 392,818 477,707 447,521 -6%
Capital Outlay 1,863,499 1,739,590 1,874,843 8%
Debt Service 676,769 477,433 477,433 0%
Transfer Out 578,643 439,043 465,676 6%
Total Expenditures 5,206,291 5,087,601 5,196,991 2%
Net Income (Loss)-$ -$ -$
City of Denton
Solid Waste Fund
Schedule of Revenues and Expenditures - Budget vs Actuals (Unaudited)
For the Period Ended September 30, 2019
PRIOR ANNUAL PRELIMINARY BUDGET VS
DESCRIPTION Y-T-D BUDGET2 ACTUALS ACTUALS
Beginning Working Capital
and Reserves as of 09/30/181 8,639,290$ 10,918,907$
REVENUES:
Refuse Fees - Residential 6,063,401$ 5,788,754 5,797,050 0%
Refuse Fees - Commercial 14,214,548 14,533,461 15,202,835 5%
Residential Recycling 5,536,022 5,337,119 5,318,817 0%
Commercial Recycling 1,335,654 1,505,187 1,409,972 -6%
Landfill Gate and Material Sales 5,929,098 5,967,459 6,553,633 10%
Recycled Material Sales 66,684 60,590 67,342 11%
Asset Sales and Interest Income 1,290,685 459,217 161,356 -65%
Other Revenue 355,789 871,269 243,748 -72%
Total Revenues 34,791,881 34,523,056 34,754,753 1%
EXPENDITURES:
Personal Service 10,317,660 11,207,879 9,828,170 -12%
Materials and Supplies 224,887 429,792 224,971 -48%
Maintenance and Repairs 212,333 314,425 238,423 -24%
Insurance 233,631 272,954 269,506 -1%
Miscellaneous 60,163 117,419 77,954 -34%
Operations, Services 5,695,984 5,860,122 6,060,704 3%
Capital Outlay 2,146,941 1,440,290 1,327,649 -8%
Debt Service 9,543,240 8,996,579 8,995,454 0%
Franchise Fee 1,737,792 1,694,293 1,733,559 2%
Transfers for Landfill Closure 1,143,059 1,169,349 854,201 -27%
Admin Transfers Out 3,657,201 3,368,559 3,684,699 9%
Total Expenditures 34,972,891 34,871,661 33,295,290 -5%
Net Income (Loss)(181,010)$ (348,605) 1,459,463
Ending Working Capital
and Reserves 8,290,685$ 12,378,370$
1 The Beginning Working Capital Reserve excludes $9,896,590 Landfill Closure/Post Closure Reserves.
2 Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which was estimated in the FY 2018-
19 budget process.
City of Denton
Airport Fund
Schedule of Revenues and Expenditures - Budget vs Actual (Unaudited)
For the Period Ended September 30, 2019
PRIOR ANNUAL PRELIMINARY BUDGET VS
DESCRIPTION Y-T-D BUDGET1 ACTUALS ACTUALS
Beginning Working Capital
and Reserves as of 09/30/18 2,668,447$ 2,930,368$
OPERATING REVENUES:
Airport Leases 779,840$ 770,886 739,765 -4%
FBO Commissions 111,111 110,004 119,727 9%
Fuel Flowage Fees 291,467 209,100 209,927 0%
Total Operating Revenues 1,182,418 1,089,990 1,069,419 -2%
OPERATING EXPENDITURES:
Personal Service 485,569 545,217 501,861 -8%
Materials and Supplies 45,990 37,640 17,554 -53%
Maintenance and Repairs 25,744 103,500 31,657 -69%
Insurance 21,823 43,792 43,792 0%
Miscellaneous 449 100 - -100%
Operations 161,653 239,235 226,056 -6%
Transfers Out - Operating 519,841 519,730 521,547 0%
Total Operating Expenses 1,261,069 1,489,214 1,342,467 -10%
Operating (Loss)(78,651) (399,224) (273,048)
NON-OPERATING REVENUES:
Investment Income 65,183 22,263 101,244 355%
Gas Well Royalties 441,913 431,456 313,325 -27%
Miscellaneous Income 1,944 - 15,252
Total Non-Operating Revenues 509,040 453,719 429,821 -5%
NON-OPERATING EXPENDITURES:
Transfers Out - Capital 225,000 250,000 250,000 0%
Total Non-Operating Expenses 225,000 250,000 250,000 0%
Non-Operating Income (Loss)284,040 203,719 179,821
Net Income (Loss)205,389$ (195,505)(93,227)
Ending Working Capital 2,472,942$ 2,837,141$
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 Actuals (Unaudited)
For the Period Ended September 30, 2019
PRIOR ANNUAL PRELIMINARY BUDGET VS
DESCRIPTION Y-T-D BUDGET1 ACTUALS ACTUALS
Beginning Fund Balance
as of 9/30/2018 1,158,668$ 1,623,427$
RESOURCES:
Franchise Fees 12,743,755$ 13,519,911 12,717,231 -6%
Street Cuts 292,517 364,140 192,014 -47%
Investment Income 933 10,000 50,522 405%
Transfers In 1,149,075 1,196,404 1,034,582 -14%
Miscellaneous 1,505 - -
Total Resources 14,187,785 15,090,455 13,994,349 -7%
EXPENDITURES:
Personal Service 3,241,181 3,641,249 3,282,814 -10%
Materials and Supplies 85,054 121,901 108,903 -11%
Maintenance and Repairs 6,734,598 9,125,194 6,776,684 -26%
Insurance 51,693 72,727 72,727 0%
Miscellaneous 4,320 5,000 5,062 1%
Operations, Services 736,304 700,302 837,101 20%
Transfer Out 2,869,873 1,401,632 1,092,753 -22%
Total Expenditures 13,723,023 15,068,005 12,176,044 -19%
Net Income (Loss)464,762$ 22,450 1,818,305
Ending Fund Balance 1,181,118$ 3,441,732$
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
Grants
Schedule of Expenses - Budget vs Preliminary Actuals (Unaudited)
For the Period Ended September 30, 2019
GRANT DESCRIPTION
EXPENDITURES
AS OF 9/30/20182
ANNUAL
BUDGET
PRELIMINIARY
ACTUALS
BUDGET VS
ACTUALS
FY 2018-19 Budget
US Dept of HUD -
Community Development Block Grant(CDBG)3,511,216$ 2,146,395$ 763,211$ -64%
US Dept of HUD -
HOME Investment Partnership Program 3,320,362 1,279,659 405,422 -68%
Emergency Solutions Grant (ESG)506,879 210,994 41,587 -80%
Community Development1 7,338,457 3,637,048 1,210,220 -67%
TxDot STEP Comprehensive Grant - 88,537 82,462 -7%
Domestic and Sexual Violence Initiative IACP
Grant 204,202 225,000 225,000 0%
2018 UASI - 125,956 124,066 -2%
Emergency Management Performance Grant - 43,956 40,009 -9%
Staffing for Adequate Fire & Emergency Response
(SAFER) Grant 225,381 419,971 419,971 0%
2018 SHSP SWAT Equipment Enhancement - 24,000 23,549 -2%
BG-Rifle-Resistant Body Armor Grant Program
(BAGP)- 91,692 82,542 -10%
Public Safety 429,583 1,019,112 997,599 -2%
Airport Maintenance (RAMP) Grant - 50,000 50,000 0%
TxDot-RTR-Mayhill Rd-IH35 E to US 380 28,569,138 21,115,515 10,820,636 -49%
TxDot-RTR-Bonnie Brae Rd-IH35 E to US 377 13,770,118 26,938,818 3,279,850 -88%
TxDot-IH35E at Loop 288/Lillian Miller Pkwy - 53,865 - -100%
TxDot-RTR-McKinney (Formerly FM426) 1,336,448 17,598,079 2,498,158 -86%
TxDot-RTR-Hickory Creek FM2181-FM2499 79,163 2,396,190 145,393 -94%
TxDot-RTR-North Texas Boulevard Roundabout 15,393 1,986,592 52,125 -97%
TxDot-RTR-ITS COMM Trunk Line 438,382 1,277,294 771,102 -40%
Bicycle & Pedestrian Projects Grant - 1,500,000 - -100%
Transportation1 44,208,642 72,916,353 17,617,264 -76%
Interlibrary Loan Program (ILL) - 25,000 25,000 0%
TIFMAS Training Tuition Grant - 10,500 7,370 -30%
Miscellaneous New Grants - 250,000 - -100%
Other - 285,500 32,370 -89%
Total FY 2018-19 Budget 51,976,682 77,858,013 19,857,453 -74%
City of Denton
Grants
Schedule of Expenses - Budget vs Preliminary Actuals (Unaudited)
For the Period Ended September 30, 2019
GRANT DESCRIPTION
EXPENDITURES
AS OF 9/30/20182
ANNUAL
BUDGET
PRELIMINIARY
ACTUALS
BUDGET VS
ACTUALS
New Awards
Federal Equitable Sharing - 25,677 25,677 0%
Chapter 59 Asset Forfeitures - 26,290 26,290 0%
U.S. Marshals Violent Offenders Task Force - 30,560 30,560 0%
Organized Crime Drug Enforcement Task Force - 18,344 18,344 0%
PD-Law Enforcement Officer Standards &
Education - 10,764 10,764 0%
Fire-Law Enforcement Officer Standards &
Education - 2,406 2,406 0%
Sexual Assault Nurse Examiners (SANE)
Reimbursement - 54,140 54,140 0%
2017 UASI - 29,574 29,574 0%
Domestic and Sexual Violence Initiative IACP
Grant - 15,706 15,706 0%
Staffing for Adequate Fire & Emergency Response
(SAFER) Grant - 90,716 90,716 0%
Victim Assistance Coordinator Grant - 20,182 20,182 0%
Public Safety - 324,359 324,359 0%
Interlibrary Loan Program (ILL)- 8,552 8,552 0%
Collaborative Summer Library Program
Scholarship Award - 1,482 1,482 0%
Historic Preservation-Certified Local Government
(CLG) Grant - 20,000 20,000 0%
Others - 30,034 30,034 0%
Total New Awards - 354,393 354,393 0%
TOTALS 51,976,682$ 78,212,406$ 20,211,846$ -74%
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
September 2019
REVENUE & ECONOMIC
ANALYSIS
Revenue & Economic Analysis
Summary
The data included in this section provides information on local, state
and national trends impacting the City’s financial position.
The following notes are provided to facilitate this section’s readability.
1. Positive Outlook – Represents favorable conditions for the local
economy. Color code – Green.
2. Cautious Outlook – Represents changing conditions that
require close monitoring. Color code – Yellow.
3. Negative Outlook – Represents unfavorable conditions for the
local economy. Color code – Red.
The data included in this section have been obtained from a variety of
sources. Sales tax and construction related data have been obtained
from internal city departments. Economic data for the State have
been obtained from the Federal Reserve Bank of Dallas and may be
subject to availability. National economic data were compiled with
assistance from the City’s investment advisor, First Southwest Asset
Management.
National Economic Trends
Period Ending September 30, 2019
Gross Domestic Product (GDP) Third quarter GDP increased at annualized pace of +1.9%, down from +2.0% in the second quarter. The result was better than the +1.6% median estimate in Bloomberg’s survey, but the sharp slowing from earlier this year reinforces the view of a deteriorating economy that supports additional Fed rate cuts. Early estimates for Q4 GDP are lower still.
The U.S. consumer continues to be the driving force behind the economy as personal consumption grew +2.9% while business fixed
investment contracted for a second straight quarter, falling -3.0% in Q3 after a -1.0% decline in Q2. Other positive contributors
included government spending, up +2.0%, and residential fixed income, up +5.1%. Business inventories were essentially flat. The Q3 GDP report indicates yet again that trade uncertainty is weighing on business spending.
Nonfarm Payrolls
The labor picture is mixed with the business survey showing a pronounced slowdown in the growth of nonfarm payrolls, while the household survey continues to show unemployment at a five-decade low. Since January, the average monthly payroll gain has slowed to +142k, a sharp deceleration from 2018’s average of +223k. By contrast, the official unemployment
rate fell to 3.5% in September, the lowest since 1969. Although the labor market participation rate has been creeping higher as more and more
reenergized workers resume their job searches, unemployment has moved lower as a greater number of these job seekers either find or create new jobs. Business hiring has been constrained by the trade war which suggests some pent-up demand which could be released in the event an agreement can be reached.
Inflation
Overall inflation retreated during the quarter as energy prices were generally lower, but core inflation crept higher. The core consumer
price index, (CPI), which excludes food and energy prices, rose +0.1% in September after three straight months of +0.3% gains. The
year-over-year core rate held steady at +2.4%, matching an 11-year high. Core CPI has now been at, or above the Fed’s target rate for 19 consecutive months. Core PCE, a Fed favorite, was unchanged in September pulling the year-over-year rate down from 1.77% to 1.67%. Many believe recent tariff increases will have a more significant impact on prices in the fourth quarter, but the Fed would have little
influence in containing this advance.
Retail Sales
Headline retail sales dropped -0.3% in September, ending an impressive six-month streak of solid gains while falling well below the +0.3% median forecast. Weakness was widespread with eight of 13 spending categories declining during the month. Building materials, autos and gasoline station sales made the biggest negative contributions. The retail sales “control group,” used to calculate GDP, was unchanged in September
after rising +0.3% and +0.8% in the previous two months. One troubling side note is that much of this spending has been fueled by the
biggest jump in consumer debt since November 2017.
Denton County and Texas Home Sales
Texas home sales slipped -0.6% in the third quarter, but rose +5.6% over the same three-month period a year ago. The average Texas home price in September was $298.5k, down from the record high of $306.3k in June, but an increase of +3.6% from a year ago.
In Denton County, unit home sales rose +1.3% during the third quarter, and +11.4% over the same three-month period a year ago. The average home price in September was $352.4k, an increase of +2.5% year-over-year, but below the $371.4 high point set two months earlier. Denton County home listings totaled 3,954 in September, approximately +0.03% 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 3.6%decrease from the prior quarter at the national level
and a 4.5% decrease 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
4Q '15 2Q '16 4Q '16 2Q '17 4Q '17 2Q '18 4Q '18 2Q '19 4Q '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 4th Quarter of 2018-19 shows an increase of 0.2%over the prior quarter and an increase of 1.4%over the 4th
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
230.00
235.00
240.00
245.00
250.00
255.00
2Q '17 3Q '17 4Q '17 1Q '18 2Q '18 3Q '18 4Q '18 1Q '19 2Q '19 3Q '19 4Q '19
Municipal Cost Index
Hotel Occupancy Tax Analysis Outlook Positive
4th Quarter FY 2018-19
Actual Y-T-D
Occupancy Tax Revenue:813,433$ 3,107,201$
FY 2018-19 Budget 820,080$ 3,207,406$
Over (Under) Budget (6,647)$ (100,205)$
Hotel Occupancy Tax Budget:3,207,406$
End of Year Projection:3,052,174$
End of Year Actual:3,107,201$
(100,205)$
Variance - Actual to Projection 55,027$
Description:Tax imposed on a person who,under a lease,concession,permit,right of access,license,contract,or
agreement,pays for the use of a room that is in a hotel.A hotel includes:any building in which the public may obtain
sleeping accomodations;motels;a tourist home,house or court;lodginghouse;inn;roominghouse;or bed and
breakfast. The tax rate levied by the City is 7% of the price paid for a room. The State also levies a tax equal to 6%.
Analysis:While the use of this revenue source is restricted by state law,it is an essential revenue source for various
tourist related activities within the community and an important indicator of local economic activity.Hotel Occupancy
tax revenue through the 4th Quarter of FY 2019 was .81%less than budget and 13.9%more than prior year's actual.
Staff has rated the outlook for this economic indicator as Positive.
FISCAL YEAR FORECAST
Variance - Actual to Budget
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
$900,000
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
Hotel Occupancy Tax Collections
FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19
Sales and Use Tax Analysis Outlook Cautious
4th Quarter FY 2018‐19
Actual Y‐T‐D
Revenue: Gross Sales Tax
Municipal Operations 628,646$ 1,928,488$
General Retail & Others 9,927,737 37,873,424
Comptroller Fees (194,704) (742,973)
Amount Retained (190,810) (728,113)
Total Revenue 10,170,869$ 38,330,826$
Expenses: Economic Incentives*
Economic Encentives1 742,710$ 3,415,121$
Net Total 9,428,159 34,915,705
FY 2018‐19 Budget 9,938,610 37,571,568
Over(Under) Budget (510,451)$ (2,655,863)$
Sales Tax Budget: 41,425,582$
Year End Projection: 37,953,567
38,330,826
Variance to Original Budget: (3,094,756)$
Variance to Year End Projection: 377,259$
Economic Development Expenditure Budget: 3,854,014$
Year End Projection: 3,224,148
Year End Actual: 3,415,121
Variance to Original Budget: 438,893$
Variance to Year End Projection: (190,973)$
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 4th Quarter of FY 2019 compared to revenues from
the prior year 4th Quarter shows a 3.63% Increase, and compared to the budget shows a 7.18% decrease. Staff has rated
this indicator as Positive.
Year End Actual:
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
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 13.33%from the prior quarter and increased 205.13%from
the 4th 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
140.0
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
4Q
'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 decreased 6.9%from the prior quarter and increased 0.7%from the 4th
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
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
4Q
'19
Residential Permits
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 decreased .43%from the prior quarter and
decreased .55% from the 4th 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
2Q
'10
4Q
'10
2Q
'11
4Q
'11
2Q
'12
4Q
'12
2Q
'13
4Q
'13
2Q
'14
4Q
'14
2Q
'15
4Q
'15
2Q
'16
4Q
'16
2Q
'17
4Q
'17
2Q
'18
4Q
'18
2Q
'19
4Q
'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 2.97%for the 4th Quarter.
The unemployment rates for most of the other reported sectors were either up slightly or flat from the prior
quarter.As a result of the doward trend since the high of the 4th 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
4Q '13 2Q '14 4Q '14 2Q '15 4Q '15 2Q '16 4Q '16 2Q '17 4Q '17 2Q '18 4Q '18 2Q '19 4Q '19
Unemployment Rate Index
Dallas-Plano-Irving MD Denton Texas U6 Unemployment United States
Section 4
City of Denton
Quarterly Financial Report
September 2019
INVESTMENT REPORT
4th Fiscal Quarter 2019- September 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 596,080,671$ 597,577,745$ 595,794,891$ 1,782,854$ 282 550 2.08%1.80%
*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 160,000,000 160,421,080 159,877,995 543,085 420 2.19%26.83%100.00%
U.S. Federal Agencies 292,281,000 293,474,372 292,230,562 1,243,810 330 2.07%49.05%100.00%
Municipal Bonds 4,000,000 4,000,000 4,000,000 - 0 1.22%0.67%15.00%
Certificates of Deposit 5,000,000 5,000,000 5,000,000 - 128 2.30%0.84%35.00%
Commercial Paper 37,500,000 37,382,622 37,386,663 (4,041) 90 1.72%6.28%15.00%
Local Government Investment Pools 94,609,584 94,609,584 94,609,584 - 1 2.11%15.88%50.00%
Demand Deposits 2,690,087 2,690,087 2,690,087 - 1 1.00%0.45%-
Total Portfolio 596,080,671$ 597,577,745$ 595,794,891$ 1,782,854$ 282 2.08%100.00%-
Current 3 Months Ago 3 Month 1 Year Ago
Investment Pool Comparisons:9/30/2019 6/30/2019 Difference 9/30/2018
Par Value 596,080,671$ 571,880,125$ 24,200,546$ 610,092,457$
Market Value 597,577,745$ 572,216,038$ 25,361,707$ 606,716,884$
Book Value 595,794,891$ 570,837,285$ 24,957,606$ 609,567,636$
Unrealized Gain(Loss)1,782,854$ 1,378,753$ 404,101$ (2,850,752)$
Weighted Average Maturity 282 276 6 206
Yield to Maturity 2.08%2.20%-0.124%1.73%
Portfolio Composition:
U.S. Treasuries 26.83%17.41%9.43%4.42%
U.S. Federal Agencies 49.05%51.20%-2.15%42.26%
Municipal Bonds 0.67%0.70%-0.03%1.80%
Certificates of Deposit 0.84%5.26%-4.42%13.45%
Commercial Paper 6.28%6.53%-0.26%5.86%
Local Government Investment Pools 15.88%18.54%-2.66%31.94%
Demand Deposits 0.45%0.36%0.09%0.27%
Bank Collateral Review**:Institution Collateral Type Market Value Collected Balance Collateral Ratio
Wells Fargo Demand Deposits BNY Mellon U.S. Agency MBS 25,528,772$ 2,690,087$ 948.99%
Independent Bank Certificates of Deposit Fed Home Loan Bank Standby LOC 8,137,730$ 4,920,665$ 165.38%
**Does not include FDIC insurance
Depository Ledger Balance Review:Institution Account Type Beginning Bal.Deposits Ending Bal.
Wells Fargo Bank Checking 1,882,315$ 121,501,465$ 2,690,087$
Compliance Statement & Review:
CITY OF DENTON : QUARTERLY INVESTMENT REPORT
1 Year Ago
Difference
(14,011,786)$
1Unrealized gain/(loss)isthe difference between the market and book valueand doesnotrepresent an actualgain or loss.Gains and losses are realized only
when a security is sold prior to maturity.Since it is the City's practice to hold investments until they mature,the temporary gains and losses are unlikely to be
realized.
76
0.35%
-1.13%
(9,139,139)$
(13,772,745)$
4,633,606$
22.41%
Withdrawals
The QuarterlyInvestmentReportis in full compliance withthe objectives,restrictions,and strategies asset forth in the City ofDenton's InvestmentPolicyand the
Public Funds Investment Act (Texas Government Code, Chapter 2256.023).
Reviewer: Antonio Puente, Jr., CGFO
6.79%
-12.61%
0.18%
Pledge Required
0.42%
> 102%
> 100%
-16.06%
ANTONIO PUENTE JR.
120,693,693$
Treasury Manager
Preparer: Nancy Towle, CGFO
NANCY TOWLE
Chief Financial Officer Director of Finance
Reviewer: David Gaines
DAVID GAINES
4th Fiscal Quarter 2019- September 30, 2019 Page 2
INVESTMENT POOL
Current 3 Months Ago 3 Month 1 Year Ago 1 Year
9/30/2019 6/30/2019 Difference 9/30/2018 Difference
Par Value - U.S. Treasuries 160,000,000 100,000,000$ 60,000,000$ 27,000,000$ 133,000,000$
Par Value - U.S. Federal Agencies 292,281,000 292,536,000 (255,000) 257,756,000 34,525,000
Par Value - Municipal Bonds 4,000,000 4,000,000 - 11,000,000 (7,000,000)
Certificates of Deposit 5,000,000 30,000,000 (25,000,000) 82,000,000 (77,000,000)
Par Value - Commercial Paper 37,500,000 37,500,000 - 36,000,000 1,500,000
Local Government Investment Pools 94,609,584 105,804,194 (11,194,610) 194,701,747 (100,092,163)
Demand Deposits 2,690,087 2,039,931 650,156 1,634,710 1,055,377
Total Par Value 596,080,671$ 571,880,125$ 24,200,546$ 610,092,457$ (14,011,786)$
Market Value - U.S. Treasuries 160,421,080 99,902,745$ 60,518,335$ 26,893,742$ 133,527,338$
Market Value - U.S. Federal Agencies 293,474,372 293,165,540 308,832 254,844,355 38,630,017
Market Value - Municipal Bonds 4,000,000 3,991,640 8,360 10,930,770 (6,930,770)
Certificates of Deposit 5,000,000 30,000,000 (25,000,000) 82,000,000 (77,000,000)
Market Value - Commercial Paper 37,382,622 37,311,988 70,634 35,711,560 1,671,062
Local Government Investment Pools 94,609,584 105,804,194 (11,194,610) 194,701,747 (100,092,163)
Demand Deposits 2,690,087 2,039,931 650,156 1,634,710 1,055,377
Total Market Value 597,577,745$ 572,216,038$ 25,361,707$ 606,716,884$ (9,139,139)$
Book Value - U.S. Treasuries 159,877,995 99,375,096$ 60,502,899$ 26,947,477$ 132,930,518$
Book Value - U.S. Federal Agencies 292,230,562 292,317,285 (86,723) 257,563,816 34,666,746
Book Value - Municipal Bonds 4,000,000 4,000,000 - 11,000,000 (7,000,000)
Certificates of Deposit 5,000,000 30,000,000 (25,000,000) 82,000,000 (77,000,000)
Book Value - Commercial Paper 37,386,663 37,300,778 85,885 35,719,886 1,666,777
Local Government Investment Pools 94,609,584 105,804,194 (11,194,610) 194,701,747 (100,092,163)
Demand Deposits 2,690,087 2,039,931 650,156 1,634,710 1,055,377
Total Book Value 595,794,891$ 570,837,285$ 24,957,606$ 609,567,636$ (13,772,745)$
Accrued Interest 1,925,422$ 2,706,286$ (780,864)$ 2,671,966$ (746,545)$
Cash Value -599,503,167$ 574,922,324$ 24,580,842$ 609,388,850$ (9,885,684)$
(Total Market Value + Accrued Interest)
Unrealized Gain/(Loss)1,782,854$ 1,378,753$ 404,101$ (2,850,752)$ 4,633,606$
Change in Fair Value since 9/30/18 -(671,478)$ (1,980,866)$ 1,309,389$ (1,356,603)$ 685,125$
(GASB 31)
Strategy Statement:
CITY OF DENTON : QUARTERLY INVESTMENT REPORT
The investment pool is an aggregation of the majority ofCity fundswhichmay include tax receipts,enterprise fundrevenues,fine and fee income,as
well as some,butnot necessarily all bond proceeds,grants,gifts and endowments.This portfolio is maintained to meet anticipated daily cash needs
for the City's operations,capital projects and debt service.In order 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)ensure
safety of principal by investing in only high quality securities for which a strong secondary market exists;(2)ensure that anticipated cash flow needs
are matched with adequate investment liquidity;(3)limit market and credit risk through diversification;and (4)attain the best feasible yield,
commensurate with the objectives and restrictions set forth inthe Investment Policy,by actively managing the portfolio to meet or exceed the twelve
month moving average yield of a one year U.S. Treasury bill as derived from the Federal Reserve Statistical Release H.15 for constant maturities.
4th Fiscal Quarter 2019- September 30, 2019 Page 3
INVESTMENT POOL
Current 3 Months Ago 1 Year Ago
Summary By Security Type:9/30/2019 6/30/2019 9/30/2018
U.S. Treasuries - Coupon 159,877,995$ 99,375,096$ 26,947,477$
U.S. Federal Agencies - Amort - 6,184,686 -
U.S. Federal Agencies - Coupon 276,474,562 270,376,599 236,808,052
U.S. Federal Agencies - Callable 15,756,000 15,756,000 20,755,765
Municipal Bonds - Coupon 4,000,000 4,000,000 11,000,000
Certificates of Deposit - CDARS - 25,000,000 42,000,000
Certificates of Deposit - SLOC 5,000,000 5,000,000 40,000,000
Commercial Paper - Discount 37,386,663 37,300,779 35,719,886
Local Government Investment Pools 94,609,584 105,804,194 194,701,747
Demand Deposits 2,690,087 2,039,931 1,634,710
Total Book Value 595,794,891$ 570,837,285$ 609,567,636$
Objective:
Current 3 Months Ago 1 Year Ago
Summary By Security Type:9/30/2019 6/30/2019 9/30/2018
U.S. Treasuries - Coupon 26.83%17.41%4.42%
U.S. Federal Agencies - Amort -1.08%-
U.S. Federal Agencies - Coupon 46.40%47.37%38.85%
U.S. Federal Agencies - Callable 2.65%2.76%3.41%
Municipal Bonds - Coupon 0.67%0.70%1.80%
Certificates of Deposit - CDARS -4.38%6.89%
Certificates of Deposit - SLOC 0.84%0.88%6.56%
Commercial Paper - Discount 6.28%6.53%5.86%
Local Government Investment Pools 15.88%18.53%31.94%
Demand Deposits 0.45%0.36%0.27%
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 ratedAAor
better (maturing in less than three years);insured,collateralized,or standby letter of credit backed certificates of deposit (maturing in less than three years);
collateralized repurchase agreements (maturing in less than thirtydays);commercial paper rated A-1/P-1 or better (maturing in less than 270 days);and local
government pools & SEC registered government money market mutual funds (weighted average maturity of less than 60 days).
U.S. Treasuries -Coupon
26.83%
U.S. Federal Agencies -Coupon
46.40%
U.S. Federal Agencies -
Callable
2.65%
CD -SLOC
0.84%
Commercial Paper -Discount
6.28%
Local Government Investment Pools
15.88%
Municipal Bonds -Coupon
0.67%
Demand Deposits
0.45%
Current
9/30/2019
4th Fiscal Quarter 2019- September 30, 2019 Page 4
INVESTMENT POOL
Current 3 Months Ago 1 Year Ago
Summary By Issuer:9/30/2019 6/30/2019 9/30/2018
CDARS CDs -$ 25,000,000$ 42,000,000$
DALLAS, TX WTR & SWR REV BDS 4,000,000 4,000,000 10,000,000
FFCB 68,582,551 82,779,293 57,996,001
FHLB 142,993,541 108,984,950 105,978,215
FHLMC 45,854,964 45,785,962 25,932,308
FNMA 34,799,506 54,767,080 67,657,291
INDEPENDENT BANK CDs 5,000,000 5,000,000 15,000,000
JP MORGAN SECURITIES LLC 4,966,447 9,923,192 10,923,670
KAISER 9,968,250 - -
LEGACYTEXAS BANK CDs*- - 25,000,000
NATIXIS NY BRANCH - 19,926,197 4,976,038
NESTLE FINANCE INTL LTD 4,994,906 4,961,428 -
NORTHWESTERN UNIVERSITY 2,488,863 2,489,962 -
STATE OF CALIFORNIA 5,000,000 - -
TEXAS A&M UNIV REV BDS - - 1,000,000
TEXPOOL 25,054,194 25,054,194 -
TEXSTAR 69,555,390 80,750,000 194,701,747
TOYOTA MOTOR CREDIT CORP 4,968,197 - 19,820,178
U.S. TREASURY 159,877,995 99,375,096 26,947,477
UNIVERSITY OF NORTH CAROLINA 5,000,000 - -
WELLS FARGO DEMAND DEPOSITS 2,690,087 2,039,931 1,634,710
Total Book Value 595,794,891$ 570,837,285$ 609,567,636$
Objective:
Current 3 Months Ago 1 Year Ago
Summary By Issuer:9/30/2019 6/30/2019 9/30/2018
CDARS CDs - 4.38%6.89%
DALLAS, TX WTR & SWR REV BDS 0.67%0.70%1.64%
FFCB 11.51%14.50%9.51%
FHLB 24.00%19.08%17.39%
FHLMC 7.70%8.02%4.25%
FNMA 5.84%9.59%11.10%
INDEPENDENT BANK CDs 0.84%0.88%2.46%
JP MORGAN SECURITIES LLC 0.83%1.74%1.79%
KAISER 1.67%--
LEGACYTEXAS BANK CDs*- -4.10%
NATIXIS NY BRANCH - 3.49%0.82%
NESTLE FINANCE INTL LTD 0.84%0.87%-
NORTHWESTERN UNIVERSITY 0.42%0.44%-
STATE OF CALIFORNIA 0.84%--
TEXAS A&M UNIV REV BDS - -0.16%
TEXPOOL 4.22%4.39%-
TEXSTAR 11.67%14.15%31.94%
TOYOTA MOTOR CREDIT CORP 0.83%-3.25%
U.S. TREASURY 26.83%17.41%4.42%
UNIVERSITY OF NORTH CAROLINA 0.84%--
WELLS FARGO DEMAND DEPOSITS 0.45%0.36%0.27%
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.
0.42%0.45%0.67%
0.83%
0.83%
0.84%
0.84%
0.84%
0.84%
1.67%
4.22%5.84%
7.70%
11.51%
11.67%
24.00%
26.83%
Current
9/30/2019
NORTHWESTERN UNIVERSITY
WELLS FARGO DEMAND DEPOSITS
DALLAS, TX WTR & SWR REV BDS
JP MORGAN SECURITIES LLC
TOYOTA MOTOR CREDIT CORP
INDEPENDENT BANK CDs
NESTLE FINANCE INTL LTD
STATE OF CALIFORNIA
UNIVERSITY OF NORTH CAROLINA
KAISER
TEXPOOL
FNMA
FHLMC
FFCB
TEXSTAR
FHLB
U.S. TREASURY
4th Fiscal Quarter 2019- September 30, 2019 Page 5
INVESTMENT POOL
Current 3 Months Ago 1 Year Ago
Maturity Time Frame:9/30/2019 6/30/2019 9/30/2018
00-03 Months 149,799,671$ 194,544,125$ 235,336,457$
03-06 Months 118,000,000 40,000,000 116,000,000
06-12 Months 136,756,000 179,000,000 96,000,000
12-24 Months 164,025,000 120,836,000 162,756,000
24 Months & Over 27,500,000 37,500,000 -
Total Par Value 596,080,671$ 571,880,125$ 610,092,457$
Objective:
Current 3 Months Ago 1 Year Ago
Maturity Time Frame:9/30/2019 6/30/2019 9/30/2018
00-03 Months 25.13%34.02%38.57%
03-06 Months 19.80%6.99%19.01%
06-12 Months 22.94%31.30%15.74%
12-24 Months 27.52%21.13%26.68%
24 Months & Over 4.61%6.56%0.00%
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 in
securities with active secondary markets.Short-term local government investment pools and government money market mutual funds help to
provide daily liquidity and may be utilized as a competitive alternative to other fixed income investments.
$0
$50,000,000
$100,000,000
$150,000,000
$200,000,000
$250,000,000
$300,000,000
$350,000,000
$400,000,000
$450,000,000
$500,000,000
$550,000,000
$600,000,000
$650,000,000
Current 3 Months Ago 1 Year Ago
00-06 Months 06-12 Months 12-24 Months 24 Months & Over
4th Fiscal Quarter 2019- September 30, 2019 Page 6
ECONOMIC SUMMARY
Interest Rate History
Source: U.S. Federal Reserve Statistical
Release (H.15)
Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16
Market Sector:Avg Avg Avg Avg Avg Avg Avg Avg Avg Avg Avg Avg
Fed Funds (effective)0.09%0.08%0.10%0.09%0.12%0.11%0.13%0.14%0.24%0.36%0.38%0.40%
3-Month U.S. T-Bill 0.07%0.05%0.04%0.02%0.03%0.03%0.02%0.02%0.23%0.30%0.27%0.29%
2-Year U.S. T-Note 0.34%0.40%0.45%0.57%0.64%0.64%0.69%0.71%0.98%0.88%0.73%0.77%
Portfolio Benchmark*0.13%0.13%0.12%0.12%0.12%0.15%0.18%0.24%0.32%0.41%0.49%0.54%
Portfolio Yield 0.50%0.49%0.49%0.51%0.55%0.57%0.57%0.65%0.72%0.79%0.81%0.90%
Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19
Market Sector:Avg Avg Avg Avg Avg Avg Avg Avg Avg Avg Avg Avg
Fed Funds (effective)0.54%0.79%1.04%1.15%1.30%1.67%1.90%2.15%2.40%2.41%2.37%1.90%
3-Month U.S. T-Bill 0.51%0.75%1.00%1.05%1.32%1.71%1.92%2.20%2.36%2.39%2.09%1.82%
2-Year U.S. T-Note 1.20%1.31%1.34%1.38%1.84%2.27%2.53%2.57%2.49%2.26%2.10%1.76%
Portfolio Benchmark*0.61%0.69%0.83%1.00%1.20%1.46%1.75%2.05%2.33%2.48%2.00%1.80%
Portfolio Yield 0.95%1.07%1.16%1.25%1.29%1.42%1.58%1.73%2.01%2.20%2.20%2.08%
*Twelve month moving average of a
one year U.S. T-bill yield
Fiscal Year:
2018-2019
2017-2018
2016-2017
2015-2016
2014-2015
QUARTERLY COMMENTARY
September 30, 2019
12,354,692$ 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
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$
Source: 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 July, there were maturities totaling $25
million, and $39 million in purchases at an average yield of 2.01%. In August, there were maturities totaling $43.7 million with an
average yield of 1.91%. Purchases in August totaled approximately $22.5 million at an average yield of 1.99%. During
September, three investments matured totaling $18 million with an average yield of 1.97%, and seven new investments were
purchased totaling $60 million with an average yield of 1.84%. The portfolio's weighted average yield remains higher than the
benchmark 12-month Treasury bill index by 28 basis points. Portfolio liquidity at the end of September was approximately 16.32%.
The Fed cut interest rates twice this quarter by 25 basis points each time, moving the target range to 1.75% to 2.0%. Further tariffs
are expected by the end of the year, along with another predicted rate cut in December. 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
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
Days to
Maturity
Page 1
Par Value Book Value Maturity
Date
Stated
RateMarket Value
September 30, 2019
Portfolio Details - Investments
Average
BalanceIssuer
Portfolio Management
City of Denton
YTM
365CUSIPInvestment #Purchase
Date
Treasury Securities - Coupon
197U.S. TREASURY3990 5,000,000.00 4,965,547.59 04/15/20201.50010/18/2018 4,990,040.00 2.814912828X21
273U.S. TREASURY3991 5,000,000.00 4,964,538.99 06/30/20201.87510/18/2018 5,000,390.00 2.852912828VJ6
258U.S. TREASURY3994 5,000,000.00 4,954,707.92 06/15/20201.50010/31/2018 4,987,095.00 2.821912828XU9
288U.S. TREASURY3995 10,000,000.00 9,897,792.94 07/15/20201.50010/31/2018 9,971,880.00 2.8369128282J8
137U.S. TREASURY3999 10,000,000.00 9,948,479.48 02/15/20201.37511/16/2018 9,978,520.00 2.782912828W22
472U.S. TREASURY4011 5,000,000.00 4,967,585.27 01/15/20212.00002/04/2019 5,013,280.00 2.5179128283Q1
182U.S. TREASURY4014 5,000,000.00 4,992,908.58 03/31/20202.25003/01/2019 5,008,790.00 2.5409128284C1
488U.S. TREASURY4016 15,000,000.00 15,025,915.79 01/31/20212.50004/10/2019 15,140,625.00 2.3669128285X4
441U.S. TREASURY4022 5,000,000.00 4,982,437.46 12/15/20201.87505/31/2019 5,004,490.00 2.1739128283L2
503U.S. TREASURY4024 10,000,000.00 10,013,810.40 02/15/20212.25005/31/2019 10,065,230.00 2.1469128283X6
638U.S. TREASURY4026 10,000,000.00 9,880,415.20 06/30/20211.12506/17/2019 9,900,780.00 1.826912828S27
243U.S. TREASURY4028 15,000,000.00 14,938,918.61 05/31/20201.37506/28/2019 14,949,030.00 1.997912828VF4
288U.S. TREASURY4031 10,000,000.00 9,961,762.64 07/15/20201.50007/25/2019 9,971,880.00 1.9939128282J8
503U.S. TREASURY4033 10,000,000.00 10,044,165.52 02/15/20212.25007/31/2019 10,065,230.00 1.9229128283X6
503U.S. TREASURY4039 10,000,000.00 10,063,989.16 02/15/20212.25009/12/2019 10,065,230.00 1.7759128283X6
653U.S. TREASURY4040 10,000,000.00 10,159,423.83 07/15/20212.62509/12/2019 10,162,500.00 1.715912828Y20
503U.S. TREASURY4042 10,000,000.00 10,053,966.69 02/15/20212.25009/17/2019 10,065,230.00 1.8499128283X6
684U.S. TREASURY4043 10,000,000.00 10,061,629.21 08/15/20212.12509/17/2019 10,080,860.00 1.788912828RC6
159,877,995.28 2.188160,421,080.00160,000,000.00141,711,593.33Subtotal and Average 420
Federal Agency Issues - Coupon
188FFCB39596,000,000.00 6,001,851.91 04/06/20201.60007/25/2017 5,993,023.08 1.5383133EHEZ2
220FFCB39765,000,000.00 4,992,227.71 05/08/20202.15003/23/2018 5,009,712.35 2.4163133EJCA5
776FFCB40067,500,000.00 7,531,778.92 11/15/20213.05012/12/2018 7,715,370.38 2.8403133EJT74
468FFCB40095,000,000.00 4,999,208.03 01/11/20212.55002/04/2019 5,045,103.65 2.5623133EJ4Q9
1,420FFCB401310,000,000.00 9,999,222.22 08/21/20232.57002/21/2019 10,362,229.00 2.5723133EKAU0
882FFCB401510,000,000.00 9,998,811.36 03/01/20222.55003/01/2019 10,207,633.80 2.5553133EKBV7
552FFCB401915,000,000.00 15,045,781.40 04/05/20212.54005/07/2019 15,187,120.65 2.3323133EJJD2
220FFCB40215,000,000.00 5,000,893.89 05/08/20202.38005/16/2019 5,016,571.00 2.3503133EKKW5
442FFCB40235,000,000.00 5,012,775.68 12/16/20202.40005/31/2019 5,033,291.10 2.1843133EKHA7
45FHLB39337,000,000.00 6,998,629.73 11/15/20191.37502/16/2017 6,995,245.18 1.5393130AA3R7
73FHLB39345,000,000.00 5,007,638.94 12/13/20192.37502/16/2017 5,004,518.70 1.5903130A0JR2
140FHLB393920,000,000.00 19,999,715.66 02/18/20201.65003/08/2017 19,986,706.20 1.6543130AAXU7
140FHLB394515,000,000.00 14,998,375.49 02/18/20201.40004/26/2017 14,975,887.95 1.4293130ABAA4
140FHLB395115,000,000.00 15,000,000.00 02/18/20201.50006/29/2017 14,981,544.60 1.5003130ABM29
164FHLB39588,000,000.00 8,012,194.43 03/13/20201.87507/25/2017 8,000,441.60 1.528313378J77
Portfolio CITY
APRun Date: 11/12/2019 - 09:40 PM (PRF_PM2) 7.3.0
Report Ver. 7.3.6.1
Days to
Maturity
Page 2
Par Value Book Value Maturity
Date
Stated
RateMarket Value
September 30, 2019
Portfolio Details - Investments
Average
BalanceIssuer
Portfolio Management
City of Denton
YTM
365CUSIPInvestment #Purchase
Date
Federal Agency Issues - Coupon
38FHLB39735,000,000.00 4,996,875.43 11/08/20191.45001/25/2018 4,997,918.95 2.0723130AC2Q6
133FHLB397910,000,000.00 9,986,811.42 02/11/20202.12504/23/2018 10,007,240.70 2.5003130ADN32
73FHLB39844,000,000.00 3,999,901.05 12/13/20192.37505/30/2018 4,004,128.84 2.3873130AEDY3
240FHLB39855,000,000.00 5,004,241.57 05/28/20202.62505/30/2018 5,024,335.65 2.4923130AECJ7
164FHLB39895,000,000.00 4,984,842.57 03/13/20202.12510/18/2018 5,004,634.65 2.8163130A12B3
346FHLB400410,000,000.00 10,005,630.91 09/11/20202.87512/07/2018 10,094,664.90 2.812313370US5
496FHLB40293,945,000.00 3,951,992.41 02/08/20212.10007/12/2019 3,963,076.66 1.966313376XN0
528FHLB403010,000,000.00 9,970,129.33 03/12/20211.75007/12/2019 9,999,308.30 1.960313382K69
323FHLB403510,000,000.00 9,997,154.26 08/19/20201.75008/27/2019 9,984,105.30 1.7823130AGWG6
366FHLB404110,000,000.00 10,079,407.83 10/01/20202.62509/12/2019 10,077,499.10 1.8193130AEWA4
213FHLMC39605,000,000.00 4,995,266.57 05/01/20201.37507/25/2017 4,985,293.70 1.5413137EADR7
108FHLMC39875,000,000.00 4,981,252.41 01/17/20201.50010/11/2018 4,993,890.00 2.8043137EAEE5
202FHLMC400710,000,000.00 9,932,744.15 04/20/20201.37501/17/2019 9,970,849.90 2.6193137EAEF2
213FHLMC40205,000,000.00 4,972,030.43 05/01/20201.37505/16/2019 4,985,293.70 2.3503137EADR7
594FHLMC402710,080,000.00 10,023,670.62 05/17/20211.57006/17/2019 10,051,094.59 1.9213134G9HB6
150FNMA39365,000,000.00 5,000,000.00 02/28/20201.70002/28/2017 4,995,323.65 1.7003136G4MA8
150FNMA39425,000,000.00 4,998,129.22 02/28/20201.50003/29/2017 4,991,479.70 1.5943135G0T29
23FNMA397110,000,000.00 9,993,797.83 10/24/20191.00001/08/2018 9,993,977.90 1.9933135G0R39
395FNMA400110,000,000.00 10,001,578.55 10/30/20202.87511/30/2018 10,108,150.70 2.8593135G0U84
276,474,561.93 2.095277,746,666.13276,525,000.00279,697,796.99Subtotal and Average 332
Federal Agency Issues - Callable
272FHLMC39536,000,000.00 6,000,000.00 06/29/20201.62506/29/2017 5,989,123.80 1.6253134GBVD1
332FHLMC39654,950,000.00 4,950,000.00 08/28/20201.62508/29/2017 4,940,173.46 1.6253134GBD82
314FNMA39644,806,000.00 4,806,000.00 08/10/20201.70008/29/2017 4,798,408.78 1.6823136G4NZ2
15,756,000.00 1.64315,727,706.0415,756,000.0015,756,000.00Subtotal and Average 304
Municipal Bonds - Coupon
0DALLAS, TX WTR & SWR REV BDS3899 4,000,000.00 4,000,000.00 10/01/20191.21707/07/2016 4,000,000.00 1.21723542JBE4
4,000,000.00 1.2174,000,000.004,000,000.004,000,000.00Subtotal and Average 0
CDs - CDARS
1,833,333.33Subtotal and Average
Portfolio CITY
APRun Date: 11/12/2019 - 09:40 PM (PRF_PM2) 7.3.0
Days to
Maturity
Page 3
Par Value Book Value Maturity
Date
Stated
RateMarket Value
September 30, 2019
Portfolio Details - Investments
Average
BalanceIssuer
Portfolio Management
City of Denton
YTM
365CUSIPInvestment #Purchase
Date
CDs - SLOC
128CD - INDEPENDENT BANK3974 5,000,000.00 5,000,000.00 02/06/20202.29502/08/2018 5,000,000.00 2.295SYS3974
5,000,000.00 2.2955,000,000.005,000,000.005,000,000.00Subtotal and Average 128
Commercial Paper Disc. - Amortizing
56State of California4036 5,000,000.00 5,000,000.00 11/26/201908/28/2019 4,998,700.00 0.00013068BEG8
94JP MORGAN SECURITIES LLC4017 5,000,000.00 4,966,447.22 01/03/20202.57004/10/2019 4,973,345.00 2.69346640PA37
99Kaiser Foundation Hospital4034 5,000,000.00 4,970,850.00 01/08/20202.12008/08/2019 4,968,375.00 2.16948306AA80
9Kaiser Foundation Hospital4038 5,000,000.00 4,997,400.00 10/10/20192.08009/05/2019 4,996,680.00 2.11348306BXA8
14NESTLE FINANCE INTL LTD4012 5,000,000.00 4,994,905.56 10/15/20192.62002/15/2019 4,995,790.00 2.72464105SXF0
79Northwestern University4037 2,500,000.00 2,488,863.19 12/19/20192.03008/29/2019 2,484,352.50 2.07166844DZK1
107TOYOTA MOTOR CREDIT4032 5,000,000.00 4,968,197.22 01/16/20202.14007/25/2019 4,970,180.00 2.19389233GAG1
254University of North Carolina4044 5,000,000.00 5,000,000.00 06/11/202009/17/2019 4,995,200.00 0.00009657TGJ6
37,386,663.19 1.72237,382,622.5037,500,000.0036,528,090.99Subtotal and Average 90
Local Govt Investment Pools
1LOCAL GOVT INV POOL - TEXPOOL3996 25,054,193.98 25,054,193.98 2.13710/26/2018 25,054,193.98 2.137SYS3996
1LOCAL GOVT INV POOL - TEXSTAR3641 69,555,389.76 69,555,389.76 2.10569,555,389.76 2.105SYS3641
94,609,583.74 2.11494,609,583.7494,609,583.74112,716,250.41Subtotal and Average 1
Demand Deposits
1DEMAND DEPOSITS - WELLS FARGO3706 2,690,087.01 2,690,087.01 1.0002,690,087.01 1.000SYS3706
2,690,087.01 1.0002,690,087.012,690,087.012,252,775.40Subtotal and Average 1
2.078599,495,840.45 596,080,670.75 282597,577,745.42 595,794,891.15Total and Average
Portfolio CITY
APRun Date: 11/12/2019 - 09:40 PM (PRF_PM2) 7.3.0
Days to
Maturity
Page 4
Par Value Book Value Stated
RateMarket Value
September 30, 2019
Portfolio Details - Cash
Average
BalanceIssuer
Portfolio Management
City of Denton
YTM
365CUSIPInvestment #Purchase
Date
0.00
2.078599,495,840.45 596,080,670.75 282
0Average Balance
597,577,745.42 595,794,891.15Total Cash and Investments
Portfolio CITY
APRun Date: 11/12/2019 - 09:40 PM (PRF_PM2) 7.3.0
City of Denton
Aging Report
City of Denton
215 E. McKinney
Denton, TX 76201(940)349-8421By Maturity Date
As of October 1, 2019
Current
Book Value
Maturity
Par Value
Current
Market Value
Percent
of Portfolio
101,299,670.75101,299,670.75 101,299,670.75416.99%MaturitiesAging Interval: 0 days 10/01/2019 10/01/2019-()Payments0
19,986,103.3920,000,000.00 19,986,447.9033.36%MaturitiesAging Interval: 1 - 30 days 10/02/2019 10/31/2019-()Payments0
28,491,908.3428,500,000.00 28,484,864.1764.78%MaturitiesAging Interval: 31 - 90 days 11/01/2019 12/30/2019-()Payments0
117,815,295.12118,000,000.00 117,827,569.051419.80%MaturitiesAging Interval: 91 - 180 days 12/31/2019 03/29/2020-()Payments0
136,334,218.67136,756,000.00 136,665,860.622022.94%MaturitiesAging Interval: 181 - 360 days 03/30/2020 09/25/2020-()Payments0
164,337,882.38164,025,000.00 165,028,099.751827.52%MaturitiesAging Interval: 361 - 720 days 09/26/2020 09/20/2021-()Payments0
27,529,812.5027,500,000.00 28,285,233.1834.61%MaturitiesAging Interval: 721 days and after 09/21/2021 -()Payments0
Total for 597,577,745.42595,794,891.15100.00680PaymentsInvestments
Portfolio CITY
AP
Run Date: 11/12/2019 - 09:49 AG (PRF_AG) 7.2.0
Report Ver. 7.3.6.1