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2022-022 Quarterly Financial Report - December 2021Date: April 1, 2022 Report No. 2022-022 Report No. 2021-075 INFORMAL STAFF REPORT TO MAYOR AND CITY COUNCIL SUBJECT: Quarterly Financial Report for the period ending December 31, 2021. BACKGROUND: Attached for your review is the Quarterly Financial Report for the period ending December 31, 2021. If you have any questions or need additional information, please let me know. STAFF CONTACT: Cassey Ogden, Finance Director (940) 349-7195 cassandra.ogden@cityofdenton.com First QuarterFinancial Report 21-22FISCAL YEAR CITY OF DENTON About This Quarterly Financial Report This report has been prepared by the City of Denton’s Finance Department. The Quarterly Financial Report is intended to provide our users (internal and external) with information regarding the City’s financial position and economic activity. This report includes information for the quarter ending December 31, 2021. 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 preliminary actuals 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. Cassandra Ogden Director of Finance 215 East McKinney Street Denton, TX 76201 940-349-7195 Section 1 City of Denton Quarterly Financial Report December 2021 Executive Dashboards Note: All figures presented are in millions of dollars.FY 2021-22 FY 2021-22ANNUAL YTDDESCRIPTION BUDGET 1ACTUALS ANNUALVARIANCEBeginning Fund Balance as of 09/30/21 39.39$ 38.63$ 38.63$RESOURCES: Ad Valorem Taxes 49.73 22.19 49.73 0% Sales Tax 46.25 12.96 46.25 0% Franchise Fees 3.63 0.87 3.63 0% Other Taxes 0.44 - 0.44 0% Service Fees 8.70 1.48 8.70 0% Fines and Fees 2.63 0.41 2.63 0% Licenses and Permits 6.08 1.57 6.08 0% Miscellaneous Revenue 3.86 0.51 3.86 0% Transfers In 29.01 7.38 29.01 0%Total Revenues 150.33 47.37 150.33 0%Total Re sou rce s 189.72 86.00 188.96 EXPENDITURES: Personal Service 103.47 24.25 103.47 0% Material and Supplies 3.75 0.44 3.75 0% Maintenance and Repairs 1.96 0.23 1.96 0% Insurance 1.63 0.36 1.63 0% Miscellaneous 1.74 0.28 1.74 0% Operations 17.38 3.58 17.38 0% Transfers Out 19.49 6.88 19.49 0% Fixed Assets 0.58 0.12 0.58 0%Total Expe n di ture s 150.00 36.14 150.00 0%Net Income (Loss) 0.33 11.23 0.33 Ending Fund Balance 39.72$ 49.86$ 38.96$ FY 2021-22PROJECTIONSCity of Denton, Texas General Fund Executive Dashboard $‐ $5 $10 $15 $20 $25 $30 $35 $40 $45 $50Revenue & Expenses (in Millions)YTD RevenueYTD ExpensesKey TrendsAt this point in the fiscal year, revenues and expenditures are projected to meet budgeted levels. $‐ $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 $3.5 $4.0 $4.5Sales Tax Monthly Average by Quarter1Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which was estimated in the FY 2021‐22 budget process. Note: All figures presented are in millions of dollars. City of Denton, Texas Electric Fund Executive Dashboard FY 2021-22 ANNUAL YTD DES CRIP TION B UDGET 1 ACTUALS ANNUAL VARIANCE B e ginning Wo rking Capital and Re s e rve s as o f 9/30/21 109.04$ 119.50$ 119.50$ RES OURCES : Rate Re ve nue s 163.52 34.54 163.52 0% Trans mis s io n Re ve nue 56.16 9.54 56.16 0% Othe r Re ve nue s 4.75 16.46 4.75 0% DEC Re ve nue s 21.29 7.26 21.29 0% To tal Re ve nue s 245.72 67.80 245.72 0% To tal Re s o urc e s 354.76 187.30 365.22 EXP ENDITURES : P urc has e d P o we r 75.40 14.88 75.40 0% DEC Fue l 12.48 3.59 12.48 0% Trans mis s io n o f P o we r 19.18 3.20 19.18 0% P e rs o nne l S e rvic e 20.10 5.07 20.10 0% Ope ratio n and Mainte nanc e 37.80 9.10 37.80 0% De bt S e rvic e 58.98 23.84 58.98 0% Trans fe rs Out 16.22 5.24 16.22 0% Capital Outlay 0.57 0.10 0.57 0% To tal Expe nditure s 240.73 65.02 240.73 0% Ne t Inc o me (Lo s s ) 4.99 2.78 4.99 Ending Wo rking Capital and Re s e rve s 114.03$ 122.28$ 124.49$ FY 2021-22 P ROJECTIONS $0 $10 $20 $30 $40 $50 $60 $70 $80 Oct-21 Nov-21 Dec-21 Revenue & Expenses (in Millions) YTD Revenue YTD Expense Key Trends At this point in the fiscal year, both revenues and expenditures are projected to meet budgeted levels. Increase in Transmission Revenues due to higher rates from two interim filings approved in Nov 2020 and Oct 2021. Other Revenues of $16.4 million include proceeds of $15.2 million from the TMPA Coal Mine sale. DEC Fuel increased $3.0 million YTD due to higher natural gas costs.0 100 200 300 400 500 600 1Q16 3Q16 1Q17 3Q17 1Q18 3Q18 1Q19 3Q19 1Q20 3Q20 1Q21 3Q21 1Q22 2015 – 2022 Historical Quarterly GWH Sales 1 Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which was estimated in the FY 2021-22 budget process. Note: All figures presented are in millions of dollars. FY 2021-22 ANNUAL YTD DES CRIP TION B UDGET 1 ACTUALS ANNUAL VARIANCE B e ginning Wo rking Capital and Re s e rve s as o f 09/30/21 2 20.55$ 24.58$ 24.58$ RES OURCES : Wate r S ale s 41.42 11.66 41.42 0% Othe r Wate r Re ve nue s 2.19 0.36 2.19 0% Trans fe rs In 2.03 0.51 2.03 0% Impac t Fe e Re ve nue 6.61 1.65 6.61 0% To tal Re ve nue s 52.25 14.18 52.25 0% To tal Re s o urc e s 72.80 38.76 76.83 EXP ENDITURES : P e rs o nal S e rvic e 8.80 1.83 8.80 0% Ope ratio ns , S e rvic e s 12.20 2.58 12.20 0% Capital Outlay 13.70 2.36 13.70 0% De bt S e rvic e 10.84 5.76 10.84 0% Trans fe rs Out 5.71 1.44 5.71 0% To tal Expe nditure s 51.25 13.97 51.25 0% Ne t Inc o me (Lo s s ) 1.00 0.21 1.00 Ending Wo rking Capital and Re s e rve s 21.55$ 24.79$ 25.58$ FY 2021-22 P ROJECTIONS City of Denton, Texas Water Fund Executive Dashboard $- $2 $4 $6 $8 $10 $12 $14 $16 Oct-21 Nov-21 Dec-21 Revenue & Expenses (in Millions) YTD Revenue YTD Expenses Key Trends At this point in the fiscal year, expenditures and revenues are projected to meet budgeted levels. 1Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which was estimated in the FY 2021-22 budget process. 2The Beginning Working Capital balance excludes $19.9 M of Impact Fee Reserves and $1.00 million for Development Plan Line Reserves. 0 500 1,000 1,500 2,000 2,500 2014-2022 Historical Quarterly Gallons Sold (in Millions) FY 2021-22 ANNUAL YTD DES CRIP TION B UDGET 1 ACTUALS ANNUAL VARIANCE B e ginning Wo rking Capital and Re s e rve s as o f 09/30/21 2 17.07$ 16.46$ 16.46$ RES OURCES : Was te wate r Fe e s 26.19 6.19 26.19 0% Othe r Was te wate r Re ve nue 1.94 0.42 1.94 0% Drainage Fe e s 5.64 1.34 5.64 0% Trans fe r In 0.61 0.15 0.61 0% Impac t Fe e Re ve nue 4.27 1.07 4.27 0% To tal Re ve nue s 38.65 9.17 38.65 0% To tal Re s o urc e s 55.72 25.63 55.11 EXP ENDITURES : P e rs o nal S e rvic e 8.88 1.95 8.88 0% Ope ratio ns , S e rvic e s 9.65 1.96 9.65 0% Capital Outlay 5.64 0.24 5.64 0% De bt S e rvic e 7.83 3.56 7.83 0% Trans fe r Out 5.91 1.41 5.91 0% To tal Expe nditure s 37.91 9.12 37.91 0% Ne t Inc o me (Lo s s ) 0.74 0.05 0.74 Ending Wo rking Capital and Re s e rve s 17.81$ 16.51$ 17.20$ FY 2021-22 P ROJECTIONS Note: All figures presented are in millions of dollars. City of Denton, Texas Wastewater Fund Executive Dashboard $- $1 $2 $3 $4 $5 $6 $7 $8 $9 $10 Oct-21 Nov-21 Dec-21 Revenue & Expenses (in Millions) YTD Revenue YTD Expenses Key Trends At this point in the fiscal year, expenditures and revenues are projected to meet budgeted levels. 1Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which was estimated in the FY 2021-22 budget process. 2The Beginning Working Capital balance excludes $11.6 million of Impact Fee Reserves, $1.0 million for Drainage Reserves, and $0.94 million for Development Plan Line Reserves. 0 200 400 600 800 1,000 1,200 1,400 2015-2022 Historical Quarterly Gallons Billed (in Millions) FY 2021-22ANNUAL YTDDESCRIPTION BUDGET ACTUALS ANNUALVARIANCEREVENUES: Residential Drainage Fees 2.16$ 0.52$ 2.16$ 0% Nonresidential Drainage Fees 3.48 0.82 3.48 0% Investment Income - - - 0% Wastewater Resources - - - 0% General Fund Transfer 0.37 0.09 0.37 0%Total Revenues 6.01 1.43 6.01 0%EXPENDITURES: Personal Service 2.03 0.42 2.03 0% Operations, Services 0.81 0.19 0.81 0% Capital Outlay 2.13 0.71 2.13 0% Debt Service - - - 0% Transfer Out 0.67 0.14 0.67 0%Total Expenditures 5.64 1.46 5.64 0%Net Income (Loss) 0.37$ (0.03)$ 0.37$ FY 2021-22PROJECTIONSNote: All figures presented are in millions of dollars.City of Denton, Texas Drainage Operations Executive Dashboard $‐ $0.2 $0.4 $0.6 $0.8 $1.0 $1.2 $1.4 $1.6Oct‐21 Nov‐21 Dec‐21Revenue & Expenses (in Millions)YTD RevenueYTD ExpensesKey TrendsAt this point in the fiscal year, expenditures and revenues are projected to meet budgeted levels. FY 2021-22 FY 2021-22 ANNUAL YTD PROJECTIONS DESCRIPTION BUDGET 1 ACTUALS ANNUAL VARIANCE Beginning Working Capital and Reserves as of 09/30/212 6.21$ 6.63$ 6.63$ RESOURCES: Collection & Disposal 32.74 7.88 32.74 0% Recycling 6.16 1.79 6.16 0% Other Revenue 0.98 0.49 0.98 0% Total Revenues 39.88 10.16 39.88 0% Total Resources 46.09 16.79 46.51 EXPENDITURES: Personnel Service 11.55 2.65 11.55 0% Operations, Services 10.68 2.07 10.68 0% Capital Outlay 2.56 1.53 2.56 0% Debt Service 5.69 3.14 5.69 0% Landfill Closure 0.72 0.18 0.72 0% Transfer Out 5.97 1.45 5.97 0% Total Expenditures 37.17 11.02 37.17 0% Net Income (Loss) 2.71 (0.86) 2.71 Ending Working Capital and Reserves 8.92$ 5.77$ 9.34$ 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 2020 Qtr 2 2020 Qtr 3 2020 Qtr 4 2021 Qtr1 2021 Q2 2021 Q3 2021 Q4 2022 Q1 Refuse Tonnage Recycling and ReuseTonnage Residential Curbside Collection Tonnage Note: All figures presented are in millions of dollars. City of Denton, Texas Solid Waste Fund Executive Dashboard Key Trends Currently all revenues and expenses are expected to meet budget projections.0 5,000 10,000 15,000 20,000 25,000 30,000 2020 Qtr 2 2020 Qtr 3 2020 Qtr 4 2021 Q1 2021 Q2 2021 Q3 2021 Q4 2022 Q1 Commercial Refuse & Recycling (Front & Side Load) Cubic Yards Serviced per Week Commercial Refuse Commercial Recycling 1Annual adopted budget as amended or modified. Beginning Working Capital and Reserves represents the amount which was estimated in the FY 2021 - 22 budget process. 2The Beginning Working Capital and Reserves excludes $12.0 million of Landfill Closure/Post Closure reserves. City of Denton, Texas Airport Fund Executive Dashboard Key Trends At this point in the year, revenues and expenses are expected to reach budget projections. $0.0 $1.0 $2.0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 GAS WELL REVENUE (in millions of dollars by fiscal year) 20,000 30,000 40,000 50,000 60,000 AIRPORT OPERATIONS BY QUARTER (takeoff or landing by fiscal year) Note: All financial amounts presented are in millions of dollars. FY 2021-22 FY 2021-22 ANNUAL YTD DES CRIP TION B UDGET 1 ACTUALS ANNUAL VARIANCE B e ginning Wo rking Capital and Re s e rve s as o f 09/30/21 2.61$ 2.90$ 2.90$ RES OURCES : Airpo rt Gro und Le as e s 0.80 0.21 0.80 0% FB O Co mmis s io ns 0.21 0.07 0.21 0% Fue l Flo wage Fe e s 0.12 0.03 0.12 0% To tal Ope rating Re ve nue s 1.13 0.31 1.13 0% EXP ENDITURES : P e rs o nal S e rvic e 0.43 0.09 0.43 0% Ope ratio ns , S e rvic e s 0.40 0.04 0.40 0% Trans fe r Out 0.46 0.12 0.46 0% To tal Ope rating Expe nditure s 1.29 0.25 1.29 0% Ne t Ope rating Inc o me (Lo s s ) (0.16) 0.06 (0.16) NON-OP ERATING REVENUES : Inve s tme nt Inc o me 0.04 0.01 0.04 0% Gas We ll Ro yaltie s 0.23 0.11 0.23 0% Mis c e llane o s Inc o me 0.00 0.00 0.00 0% To tal No n-Ope rating Re ve nue s 0.27 0.12 0.27 0% NON-OP ERATING EXP ENDITURES : De bt S e rvic e 0.72 0.36 0.72 0% Trans fe r Out - Capital - - - 0% To tal No n-Ope rating Expe nditure s 0.72 0.36 0.72 0% Ne t No n-Ope rating Inc o me (Lo s s ) (0.45) (0.24) (0.45) Ne t Inc o me (Lo s s ) (0.61) (0.19) (0.61) Ending Wo rking Capital and Re s e rve s 2.00$ 2.71$ 2.29$ P ROJECTIONS 1Annual adopted budget as amended or modified. Beginning Working Capital and Reserves represents the amount which was estimated in the FY 2021 - 22 budget process. FY 2021-22 ANNUAL YTD DES CRIP TION B UDGET 1 ACTUALS ANNUAL VARIANCE B e ginning Wo rking Capital and Re s e rve s as o f 09/30/21 3.93$ 4.50$ 4.50$ RES OURCES : Franc his e Fe e s 14.48 3.45 14.48 0% S tre e t Cuts 0.03 - - -100% Inve s tme nt Inc o me 0.04 - 0.04 0% Trans fe rs In 1.31 0.38 1.31 0% To tal Re ve nue s 15.86 3.83 15.82 0% To tal Re s o urc e s 19.79 8.33 20.32 EXP ENDITURES : P e rs o nal S e rvic e 3.55 0.69 3.55 0% Mate rials & S upplie s 0.10 0.02 0.10 0% Mainte nanc e & Re pairs 6.51 0.78 6.51 0% Ope ratio ns , S e rvic e s 0.91 0.19 0.91 0% Trans fe r Out 5.25 0.36 5.25 0% To tal Expe nditure s 16.32 2.04 16.32 0% Ne t Inc o me (Lo s s ) (0.46) 1.79 (0.50) Ending Fund B alanc e 3.47$ 6.29$ 4.01$ FY 2021-22 P ROJECTIONS 1Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which was estimated in the FY 2021-22 budget process. City of Denton, Texas Street Improvement Fund Executive Dashboard Key Trends Revenues and expenditures are projected to meet budgeted levels except for Street Cuts which has been reduced due to the utilities anticipating completion of their own repairs for the remainder of the year. Note: All figures presented are in millions of dollars. 0 3 6 9 12 Qtr1 Qtr2 Qtr3 Qtr4 Tons of Asphalt Laid (in Thousands) FY20-21 FY21-22 0 20 40 60 80 100 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Lane Miles Surface Treatment FY 20-21 FY21-22 $- $1.0 $2.0 $3.0 $4.0 $5.0 Oct-21 Nov-21 Dec-21 Revenue & Expenses (in Millions) YTD Revenue YTD Expenses FY 2021-22 FY 2021-22 GRANT YTD DESCRIPTION AMOUNT ACTUALS 2021-22 Budget Comm Development 7.61$ 0.76$ Public Safety 2.18 0.09 Transportation 44.47 1.70 Other 25.24 0.08 Total Budget 79.50 2.63 New Awards Public Safety 0.04 0.04 Total New Awards 0.04 0.04 Totals 79.54$ 2.67$ COMM DEV 9.56%PUBLIC SAFETY 2.79% TRANS 55.91% OTHER 31.72% FY 2021-22 Grants Awarded $- $20.0 $40.0 $60.0 COMMDEVPUBLICSAFETYTRANSOTHERAwards Expenses FY 2021-22 Awards & Expenses (in Millions) City of Denton, Texas Grants Dashboard Note: All figures presented are in millions of dollars. Key Trends The following grants have been received in FY 2021-22: Chapter 59 Asset Forfeitures: $8,000 U.S. Marshals Violent Offenders Task Force: $4,932 North Texas Organized Crime Task Force: $1,455 PD-Law Enforcement Officer Standards & Education:$21,535 Section 2 City of Denton Quarterly Financial Report December 2021 This report is designed for internal use and does not include all the funds and accounts included in the City of Denton’s operations. The information provided is unaudited; for a complete audited report, please refer to the City of Denton Comprehensive Annual Financial Report, available through the City’s Finance Department, City Secretary’s Office, or Denton Public Libraries. FINANCIAL SUMMARY City of Denton General FundSchedule of Revenues - Budget vs Projection (Unaudited)For the Period Ended December 31, 2021 PRIOR BUDGET CURRENT ANNUAL ANNUAL BUDGET VS REVENUE DESCRIPTION Y-T-D Y-T-D Y-T-D BUDGET PROJECTION PROJECTION Current Year - Ad Valorem 22,696,635$ 12,280,638$ 22,173,401$ 49,083,288$ 49,083,288$ 0% Delinquent - Ad Valorem 47,041 53,675 (25,176) 255,594 255,594 0% Miscellaneous Penalties & Fees 30,308 64,372 41,506 388,256 388,256 0% Ad Valorem Taxes 22,773,984 12,398,685 22,189,731 49,727,138 49,727,138 0% Sales Tax 10,800,526 12,024,204 12,959,880 46,246,938 46,246,938 0% Franchise - Gas Utilities 7,936 - 9,843 277,532 277,532 0% Franchise - Private Electric Utilities - - - 87,393 87,393 0% Franchise - Cable - 18,747 4,498 175,007 175,007 0% Franchise - Telecom - 1,999 4,272 18,660 18,660 0% Franchise - Denton Municipal Utilities 720,083 323,397 854,361 3,070,044 3,070,044 0% Franchise Fees 728,019 344,143 872,974 3,628,636 3,628,636 0% Other Taxes - - - 446,522 446,522 0% Ambulance Service Fees 704,830 474,428 733,320 4,334,724 4,334,724 0% Fire Department Fees 31,146 36,989 49,940 147,952 147,952 0% Building Inspections Fees 130,392 126,334 145,221 556,742 556,742 0% Park Department Fees 43,785 113,596 141,840 1,448,690 1,448,690 0% Planning Department Fees 540,379 502,632 384,740 2,010,213 2,010,213 0% Miscellaneous Service Fees 18,866 28,381 22,058 113,486 113,486 0% Service Fees 1,469,398 1,282,360 1,477,119 8,611,807 8,611,807 0% Denton Municipal Fines 151,755 289,017 152,939 1,156,000 1,156,000 0% Parking Fines 6,670 34,750 21,730 139,000 139,000 0% Miscellaneous Fines and Fees 87,133 79,143 106,975 471,536 471,536 0% Court Administrative and Service Fees 94,048 194,676 124,612 866,137 866,137 0% Fines and Fees 339,606 597,586 406,256 2,632,673 2,632,673 0% Demolition Permits 4,119 3,625 3,105 14,500 14,500 0% Building Permits 2,000,288 1,345,346 1,552,323 6,008,546 6,008,546 0% Certificate of Occupancy 12,190 13,250 11,325 53,000 53,000 0% Miscellaneous Licenses and Permits 7,370 1,504 3,054 6,009 6,009 0% Licenses and Permits 2,023,967 1,363,725 1,569,807 6,082,055 6,082,055 0% Investment Income 72,761 196,250 19,766 785,000 785,000 0% Miscellaneous Revenues 392,148 406,019 492,687 3,154,231 3,154,231 0% Miscellaneous Resources 464,909 602,269 512,453 3,939,231 3,939,231 0% ROI - Denton Municipal Utilities 2,864,672 3,752,608 4,059,388 15,459,438 15,459,438 0% Transfers 4,954,915 3,390,494 3,321,476 13,551,129 13,551,129 0% Transfers 7,819,587 7,143,102 7,380,864 29,010,567 29,010,567 0% Total General Fund Revenues 46,419,996$ 35,756,074$ 47,369,084$ 150,325,567$ 150,325,567$ 0% City of Denton General Fund Schedule of Expenditures - Budget vs Projection (Unaudited) For the Period Ended December 31, 2021 PRIOR BUDGET CURRENT ANNUAL ANNUAL BUDGET VS Y-T-D Y-T-D Y-T-D BUDGET PROJECTION PROJECTION NEIGHBORHOOD SERVICES Building Inspections 840,286$ 917,942$ 815,809$ 3,668,837$ 3,668,837$ 0% Community Improvement Services 193,667 195,003 40,653 779,379 779,379 0% Libraries 1,625,691 1,665,420 1,598,109 6,656,368 6,656,368 0% Parks and Recreation 2,346,212 3,556,448 4,256,096 14,214,432 14,214,432 0% Planning 477,713 582,174 493,429 2,326,834 2,326,834 0% Development Services Admin 280,282 379,934 226,951 1,518,530 1,518,530 0% Gas Well Review 59,005 94,299 5,989 376,899 376,899 0% Social Services 259,810 584,294 458,436 2,255,382 2,255,382 0% 6,082,666 7,975,514 7,895,472 31,796,661 31,796,661 0% PUBLIC SAFETY Animal Services 596,741 671,318 563,210 2,683,147 2,683,147 0% Fire 8,308,336 8,732,447 8,941,585 34,901,872 34,901,872 0% Municipal Court 328,020 - - - - 0% Municipal Judge 100,819 141,883 122,960 567,082 567,082 0% Police 10,151,480 11,359,177 10,804,013 45,400,386 45,400,386 0% 19,485,396 20,904,825 20,431,768 83,552,487 83,552,487 0% TRANSPORTATION Traffic Operations 417,528 596,761 478,386 2,385,130 2,385,130 0% Street Lighting 214,305 212,670 246,390 850,000 850,000 0% 631,833 809,431 724,776 3,235,130 3,235,130 0% ADMINISTRATIVE & COMMUNITY SERVICES City Manager's Office 497,440 585,299 479,762 2,419,193 2,419,193 0% Economic Development 396,067 1,109,536 265,961 4,434,595 4,434,595 0% Finance 979,223 1,412,617 1,311,911 5,645,942 5,645,942 0% Human Resources 566,441 694,777 622,506 2,776,895 2,776,895 0% Internal Audit 74,333 140,432 101,337 561,268 561,268 0% Legal Administration 994,178 828,257 645,137 3,310,390 3,310,390 0% Public Affairs 460,951 642,813 442,066 2,569,200 2,569,200 0% Non-Departmental 2,835,718 2,424,932 3,215,760 9,691,981 9,691,981 0% 6,804,351 7,838,663 7,084,440 31,409,464 31,409,464 0% TOTAL EXPENDITURES 33,004,246$ 37,528,433$ 36,136,456$ 149,993,742$ 149,993,742$ 0% City of Denton Electric Fund Schedule of Revenues and Expenditures - Budget vs Projection (Unaudited) For the Period Ended December 31, 2021 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 9/30/21 109,035,229$ 119,498,711$ REVENUES: Rate Revenues 32,023,091$ 39,915,231$ 34,537,030$ 163,523,145 163,523,145 0% Transmission Revenues 7,810,337 6,850,073 9,543,478 56,160,399 56,160,399 0% Other Revenues 837,319 1,145,406 16,462,540 4,752,353 4,752,353 0% DEC Revenues 4,234,057 4,901,622 7,258,064 21,293,023 21,293,023 0% Total Revenues 44,904,804 52,812,332 67,801,112 245,728,920 245,728,920 0% EXPENDITURES: Purchased Power 13,794,244 16,303,319 14,881,582 75,398,210 75,398,210 0% DEC Fuel 590,013 2,696,008 3,587,133 12,475,775 12,475,775 0% Transmission of Power 2,158,370 2,022,579 3,205,687 19,182,169 19,182,169 0% Personnel Services 4,541,098 5,328,480 5,067,483 20,102,836 20,102,836 0% Materials and Supplies 59,905 336,362 194,776 2,544,748 2,544,748 0% Maintenance and Repair 108,454 200,062 245,911 1,312,671 1,312,671 0% Insurance 97,887 528,531 905,564 2,114,125 2,114,125 0% Return on Investment 2,312,842 2,489,954 3,472,280 11,785,382 11,785,382 0% Franchise Fee 1,925,239 2,248,847 2,891,241 10,644,166 10,644,166 0% Miscellaneous 164,539 306,895 65,242 755,600 755,600 0% Operations 1,140,379 2,062,834 1,323,221 8,653,171 8,653,171 0% Debt Service 22,092,299 23,839,791 23,839,791 58,984,872 58,984,872 0% Interfund Transfers 4,109,223 4,054,051 5,237,133 16,216,204 16,216,204 0% Capital Outlay - 103,494 103,494 573,494 573,494 0% Total Expenditures 53,094,492 62,521,207 65,020,538 240,743,423 240,743,423 0% Net Income (Loss) (8,189,688)$ (9,708,875)$ 2,780,574$ 4,985,497 4,985,497 Ending Working Capital and Reserves 114,020,726$ 124,484,208$ 1Annual adopted budget as amended or modified. Beginning Working Capital and Reserves represents the amount which was estimated in the FY 2021-22 budget process. City of Denton Water Fund Schedule of Revenues and Expenditures - Budget vs Projections (Unaudited) For the Period Ended December 31, 2021 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 09/30/211 20,546,185$ 24,582,745$ REVENUES: Water Sales Residential 4,833,871$ 5,384,056$ 5,152,618$ 21,519,010 21,519,010 0% Water Sales Commercial 4,313,171 4,622,679 4,885,429 18,475,937 18,475,937 0% Water for Resale 1,490,237 356,259 1,620,118 1,423,894 1,423,894 0% Other Water 424,630 473,477 355,698 1,892,391 1,892,391 0% Transfers In 419,221 508,727 508,319 2,033,275 2,033,275 0% Investment Income 35,885 75,060 10,979 300,000 300,000 0% Impact Fee Revenue 1,652,571 1,652,571 1,651,251 6,605,000 6,605,000 0% Total Revenues 13,169,586 13,072,829 14,184,412 52,249,507 52,249,507 0% EXPENDITURES: Personal Service 2,023,856 2,201,491 1,833,066 9,013,419 9,013,419 0% Purchased Power 292,124 352,980 369,279 1,410,789 1,410,789 0% Materials and Supplies 312,283 445,506 382,657 1,789,771 1,789,771 0% Maintenance and Repairs 363,354 527,314 339,474 2,169,508 2,169,508 0% Insurance 63,969 60,167 56,427 244,905 244,905 0% Miscellaneous 47,362 85,263 60,747 348,584 348,584 0% Operations, Services 457,862 701,277 488,131 2,481,117 2,481,117 0% Capital Outlay 3,764,604 3,427,933 2,361,930 13,700,759 13,700,759 0% Return on Investment 335,657 362,705 364,159 1,449,659 1,449,659 0% Franchise Fee 479,510 518,150 520,227 2,070,942 2,070,942 0% Debt Service 5,846,012 2,710,944 5,755,526 10,835,105 10,835,105 0% Transfers Out 1,373,689 1,428,577 1,441,390 5,733,661 5,733,661 0% Total Expenditures 15,360,282 12,823,057 13,973,232 51,251,219 51,251,219 0% Net Income (Loss)(2,190,696)$ 249,772$ 211,180$ 998,288 998,288 Ending Working Capital and Reserves 21,544,473$ 25,581,033$ 1 The Beginning Working Capital balance excludes $19,916,357 of Impact Fee Reserves and $750,000 for Development Plan Line Reserver. budget process. 2 Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which was estimated in the FY 2021-22 City of Denton Wastewater Fund Schedule of Revenues and Expenditures - Budget vs Projections (Unaudited) For the Period Ended December 31, 2021 PRIOR BUDGET CURRENT ANNUAL ANNUAL BUDGET VS DESCRIPTION Y-T-D Y-T-D Y-T-D BUDGET2 PROJECTION PROJECTION Beginning Working Capital and Reserves as of 09/30/211 17,068,351$ 16,455,340$ REVENUES: Residential Fees 2,905,573$ 3,088,786$ 2,849,251$ 11,879,945 11,879,945 0% Commercial Fees 2,917,512 3,537,650 3,138,908 13,504,172 13,504,172 0% Effluent Irrigation Fees 25,590 24,138 32,834 96,470 96,470 0% Wholesale Fees 173,426 178,419 171,731 713,103 713,103 0% Other Wastewater Fees 390,052 458,863 411,231 1,833,982 1,833,982 0% Drainage Fees 1,285,685 1,396,362 1,340,526 5,638,695 5,638,695 0% Transfer In 149,913 153,033 152,911 611,645 611,645 0% Investment Income 25,269 25,020 7,360 100,000 100,000 0% Impact Fee Reserves 1,068,354 1,068,354 1,067,499 4,270,000 4,270,000 0% Total Revenues 8,941,374 9,930,625 9,172,251 38,648,012 38,648,012 0% EXPENDITURES: Personal Service 2,161,021 2,222,227 1,951,435 8,881,839 8,881,839 0% Purchased Power 238,853 305,493 245,222 1,221,000 1,221,000 0% Materials and Supplies 227,913 331,128 255,749 1,323,420 1,323,420 0% Maintenance and Repairs 353,478 574,356 259,941 2,375,605 2,375,605 0% Insurance 67,446 68,624 63,584 274,271 274,271 0% Miscellaneous 22,254 9,158 4,454 36,617 36,617 0% Operations, Services 385,179 572,022 588,395 2,206,212 2,206,212 0% Capital Outlay 1,435,308 1,411,212 243,729 5,640,309 5,640,309 0% Return on Investment 216,174 228,204 222,949 912,087 912,087 0% Franchise Fee 308,819 326,007 318,499 1,302,981 1,302,981 0% Debt Service 3,417,479 1,957,848 3,554,141 7,825,131 7,825,131 0% Transfers Out 1,353,975 1,477,945 1,414,118 5,907,049 5,907,049 0% Total Expenditures 10,187,899 9,484,224 9,122,216 37,906,521 37,906,521 0% Net Income (Loss)(1,246,525)$ 446,401$ 50,035$ 741,491 741,491 Ending Working Capital and Reserves 17,809,842$ 17,196,831$ 2 Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which was estimated in the FY 2021-22 budget process. 1 The Beginning Working Capital balance excludes $11.6 million of Impact Fee Reserves, $1.0 million for Drainage Reserves, and $0.94 million for Development Plan Line Reserves. City of Denton Drainage Operations Schedule of Revenues and Expenditures - Budget vs Projections (Unaudited) For the Period Ended December 31, 2021 PRIOR BUDGET CURRENT ANNUAL ANNUAL BUDGET VS DESCRIPTION Y-T-D Y-T-D Y-T-D BUDGET PROJECTION PROJECTION REVENUES: Residential Drainage Fees 496,871$ 515,771$ 523,170$ 2,158,037$ 2,158,037$ 0% Nonresidential Drainage Fees 788,814 880,591 817,356 3,480,658 3,480,658 0% Wastewater Resources - - - - - 0% General Fund Transfer 89,988 91,860 91,788 367,151 367,151 0% Total Revenues 1,375,673 1,488,222 1,432,314 6,005,846 6,005,846 0% EXPENDITURES: Personal Service 431,105 505,906 423,134 2,022,003 2,022,003 0% Materials and Supplies 8,974 22,249 15,579 88,900 88,900 0% Maintenance and Repairs 35,858 33,651 24,258 134,500 134,500 0% Insurance 11,142 10,710 9,284 42,801 42,801 0% Miscellaneous 2,080 4,227 4,327 16,900 16,900 0% Operations, Services 97,747 132,404 137,839 529,182 529,182 0% Capital Outlay 679,541 480,232 705,296 2,130,982 2,130,982 0% Debt Service - - - - - 0% Transfer Out 109,226 168,491 139,902 673,428 673,428 0% Total Expenditures 1,375,673 1,357,870 1,459,619 5,638,696 5,638,696 0% Net Income (Loss) -$ 130,352$ (27,305)$ 367,150$ 367,150$ City of Denton Solid Waste Fund Schedule of Revenues and Expenditures - Budget vs Projection (Unaudited) For the Period Ended December 31, 2021 PRIOR BUDGET CURRENT ANNUAL ANNUAL DESCRIPTION Y-T-D Y-T-D Y-T-D BUDGET2 PROJECTION Beginning Working Capital and Reserves as of 09/30/211 6,210,148$ 6,629,830$ REVENUES: Refuse Fees - Residential 1,154,045$ 1,315,214$ 1,192,447$ 5,429,866 5,429,866 Refuse Fees - Commercial 3,609,564 3,586,494 3,660,764 15,134,905 15,134,905 Residential Recycling 1,386,565 1,193,288 1,454,004 4,769,339 4,769,339 Commercial Recycling 317,305 347,535 337,800 1,389,027 1,389,027 Landfill Gate and Material Sales 2,666,742 3,014,184 3,019,532 12,183,212 12,183,212 Recycled Material Sales 16,836 17,355 16,836 69,364 69,364 Asset Sales and Interest Income 73,576 103,179 379,751 412,385 412,385 Other Revenue 114,471 119,516 90,836 493,295 493,295 Total Revenues 9,339,104 9,696,765 10,151,970 39,881,393 39,881,393 EXPENDITURES: Personal Service 2,756,066 2,890,366 2,645,079 11,552,240 11,552,240 Materials and Supplies 55,898 243,270 89,634 772,522 772,522 Maintenance and Repairs 61,763 61,680 86,917 246,516 246,516 Insurance 73,671 74,044 65,699 295,935 295,935 Miscellaneous 26,208 46,593 12,500 96,320 96,320 Operations, Services 1,196,045 1,765,124 1,325,022 7,344,496 7,344,496 Capital Outlay 7,269,773 641,280 1,533,508 2,563,064 2,563,064 Debt Service 3,819,621 3,139,139 3,139,139 5,690,617 5,690,617 Franchise Fee 460,033 478,314 485,696 1,911,728 1,911,728 Transfers for Landfill Closure 175,662 719,000 179,751 719,000 719,000 Admin Transfers Out 1,302,393 1,494,758 1,448,755 5,974,266 5,974,266 Total Expenditures 17,197,133 11,553,568 11,011,700 37,166,704 37,166,704 Net Income (Loss) (7,858,029)$ (1,856,803)$ (859,730)$ 2,714,689 2,714,689 Ending Working Capital and Reserves 8,924,837$ 9,344,519$ 1 The Beginning Working Capital Reserve excludes $11,992,859 Landfill Closure/Post Closure Reserves. 2 Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which was estimated in the FY 2021-22 budget process. City of Denton Airport Fund Schedule of Revenues and Expenditures - Budget vs Projection (Unaudited) For the Period Ended December 31, 2021 PRIOR BUDGET CURRENT ANNUAL ANNUAL DESCRIPTION Y-T-D Y-T-D Y-T-D BUDGET1 PROJECTION Beginning Working Capital and Reserves as of 09/30/21 2,606,662$ 2,899,720$ OPERATING REVENUES: Airport Ground Leases 199,057$ 200,284$ 208,139$ 800,492 800,492 FBO Commissions 26,932 53,082 68,065 212,160 212,160 Miscellaneous 34,180 29,664 33,844 118,560 118,560 Total Operating Revenues 260,169 283,030 310,048 1,131,212 1,131,212 OPERATING EXPENDITURES: Personal Service 97,305 108,063 94,570 431,901 431,901 Materials and Supplies 983 8,701 976 34,790 34,790 Maintenance and Repairs 3,985 19,116 427 76,400 76,400 Insurance 6,653 6,858 7,133 27,412 27,412 Miscellaneous - 24 - 100 100 Operations 23,104 65,582 34,250 262,135 262,135 Transfers Out - Operating 113,094 115,765 117,131 462,696 462,696 Total Operating Expenses 245,124 324,109 254,487 1,295,434 1,295,434 Operating (Loss) 15,045 (41,079) 55,561 (164,222) (164,222) NON-OPERATING REVENUES: Investment Income 10,723 10,209 2,933 40,800 40,800 Gas Well Royalties 48,916 58,005 112,492 231,830 231,830 Total Non-Operating Revenues 59,639 68,214 115,425 272,630 272,630 NON-OPERATING EXPENDITURES: Debt Service 374,662 358,234 358,234 724,659 724,659 Transfers Out - Capital - - - - - Total Non-Operating Expenses 374,662 358,234 358,234 724,659 724,659 Non-Operating Income (Loss) (315,023) (290,020) (242,809) (452,029)(452,029) Net Income (Loss)(299,978)$ (331,099)$ (187,248)$ (616,251) (616,251) Ending Working Capital 1,990,411$ 2,283,469$ 1 Annual adopted budget as amended or modified. Beginning Working Capital and Reserves represents the amount which was estimated in the FY 2021-22 budget process. City of Denton Street Improvement Fund Schedule of Expenditures - Budget vs Projections (Unaudited) For the Period Ended December 31, 2021 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 9/30/2021 3,928,623$ 4,503,637$ RESOURCES: Franchise Fees 2,482,239$ 3,621,978$ 3,446,001$ 14,476,328 14,476,328 0% Street Cuts 24,873 8,463 - 33,827 - -100% Investment Income 8,325 10,509 2,340 42,000 42,000 0% Transfers In 311,282 326,763 382,475 1,306,002 1,306,002 0% Total Resources 2,826,719 3,967,713 3,830,816 15,858,157 15,824,330 0% EXPENDITURES: Personal Service 739,175 887,937 689,823 3,548,910 3,548,910 0% Materials and Supplies 11,233 25,322 19,058 101,200 101,200 0% Maintenance and Repairs 495,864 1,629,888 782,253 6,514,348 6,514,348 0% Insurance 21,770 22,440 31,616 89,690 89,690 0% Miscellaneous 3,536 1,777 615 7,100 7,100 0% Operations, Services 193,784 202,671 163,198 810,047 810,047 0% Transfer Out 225,049 1,312,605 357,578 5,246,213 5,246,213 0% Total Expenditures 1,690,411 4,082,640 2,044,141 16,317,508 16,317,508 0% Net Income (Loss) 1,136,308$ (114,927)$ 1,786,675$ (459,351) (493,178) Ending Fund Balance 3,469,272$ 4,010,459$ 1Annual adopted budget as amended or modified. Beginning Fund Balance represents the amount which was estimated in the FY 2021-22 budget process. City of Denton Grants Schedule of Expenditures (Unaudited) For the Period Ended December 31, 2021 GRANT DESCRIPTION EXPENDITURES AS OF 9/30/20211 CURRENT Y-T-D ANNUAL BUDGET FY 2021-22 Budget US Dept of HUD - Community Development Block Grant(CDBG)6,293,330$ 295,751$ 2,372,988$ US Dept of HUD - Community Development Block Grant(CDBG)- CARES ACT 529,359 235,932 1,180,791 Texas Emergency Rental Assistance Program-CARES Act 187,444 - 18,957 US Dept of HUD - HOME Investment Partnership Program 5,241,002 189,810 3,015,263 Emergency Solutions Grants Program-CARES Act 1,039,136 36,533 1,018,267 Community Development1 13,290,271 758,026 7,606,266 TxDot STEP Comprehensive Grant - 4,333 78,500 National Sexual Assault Kit Initiative Grant 100,888 11,080 445,149 Sustainment 132,416 11,291 123,003 Sustainment - - 94,575 2021 UASI-Regional Warning Siren Cyber Security - - 43,692 2019 Staffing for Adequate Fire & Emergency Response (SAFER) Grant 167,676 71,225 1,026,738 Urban Search & Rescue Response System (TEEX)- - 330,000 Texas Intrastate Fire Mutual Aid System-Emergency Response - 119 40,000 Denton Police Department-Coronavirus Response Grant 80,416 - 3,088 Public Safety1 481,396 98,048 2,184,745 Airport Maintenance (RAMP) Grant - 1,038 50,000 TxDot-RTR-Mayhill Rd-IH35 E to US 380 48,984,689 1,302,647 14,896,002 TxDot-RTR-Bonnie Brae Rd-IH35 E to US 377 27,295,314 246,665 19,907,802 TxDot-IH35E at Loop 288/Lillian Miller Pkwy - - 53,865 TxDot-RTR-McKinney (Formerly FM426) 15,977,398 140,689 2,895,944 TxDot-RTR-Hickory Creek FM2181-FM2499 2,041,307 3,172 359,920 TxDot-RTR-North Texas Boulevard Roundabout 268,344 1,566 1,891,555 Bicycle & Pedestrian Projects Grant - - 1,500,000 NCTCOG-Waze Data Sharing - - 5,000 Airport Grant-CARES Act 157,000 - 157,100 Airport Coronavirus Relief Grant Program 57,000 - 57,000 Airport Coronavirus Relief Grant Program - - 34,162 Denton County Transportation Authority (DCTA) Transportation Reinvestment Program (TRiP) - - 2,517,997 American Rescue Plan (ARP) Act of 2021 - Airport Rescue Grants - - 148,000 Transportation1 94,781,052 1,695,777 44,474,347 City of Denton Grants Schedule of Expenditures (Unaudited) For the Period Ended December 31, 2021 GRANT DESCRIPTION EXPENDITURES AS OF 9/30/20211 CURRENT Y-T-D ANNUAL BUDGET Interlibrary Loan Program (ILL) - - 35,000 TexTreasures Grant - - 24,820 Green Ribbon Grant - 3,605 773,666 Texas Commission on the Arts Cultural District Grant - - 100,000 NCTCOG-Solid Waste Implementation Grant-Parks & Recreation - - 200,000 NCTCOG-Solid Waste Implementation Grant-Solid Waste - - 67,723 Governor's Community Achievement Award - - 290,000 American Rescue Plan (ARP) Act of 2021 6,136 73,200 23,290,438 Miscellaneous New Grants - - 460,000 Other 6,136 76,805 25,241,647 Total FY 2021-22 Budget 108,558,855 2,628,656 79,507,005 New Awards Chapter 59 Asset Forfeitures - 8,000 8,000 U.S. Marshals Violent Offenders Task Force - 4,932 4,932 North Texas Organized Crime Task Force (NTOCTF)- 1,455 1,455 PD-Law Enforcement Officer Standards & Education - 21,535 21,535 Public Safety - 35,922 35,922 Total New Awards - 35,922 35,922 TOTALS 108,558,855$ 2,664,578$ 79,542,927$ 1 A portion of the grants presented cover multiple years. Section 3 City of Denton Quarterly Financial Report December 2021 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 December 31, 2021 Gross Domestic Product (GDP) The fourth quarter started out on a strong note as consumers began their holiday shopping early, fearing that store shelves would clear long before Christmas. The early spending was a pleasant surprise to analysts who boosted growth projections, but the brisk pace slowed in November and December as the Omicron variant asserted itself. The new variant was less severe, but millions were quickly infected, which caused many businesses to close or operate on a limited basis. The initial fourth quarter GDP reading actually exceeded forecasts, up +6.9%, but nearly five percentage points of the increase was due to business inventory accumulation, a volatile and unpredictable component that will likely reverse itself in future quarters. The 2022 outlook is solid, but an economic slowdown is extremely likely in the absence of additional government stimulus and expected brisk tightening of Fed policy. Employment Nonfarm payrolls growth slumped in November and December, falling well short of forecasts, and leaving total payroll additions over the past 20 months 3.5 million jobs short of the 22.3 million lost during the first two months of the pandemic. For the better part of the year, Fed officials had been fixated on these missing jobs. Only in recent weeks have they acknowledged that it’s not the jobs that are missing, but rather, the workers. With 10.5 million job postings in November and 6.3 million Americans officially unemployed and actively seeking work in December, the Fed has done all it can on the labor front. The headline unemployment rate fell from 4.2% to 3.9% in December, the lowest in 22 months and within half a percentage point of a five- decade low. First-time claims for unemployment benefits fell to the lowest level since 1969, highlighting how reluctant employers are to release workers. Inflation Inflation has continued to climb on a year-over- year basis, with the headline consumer price index reaching +7.0% for the first time since 1982. In 2020, headline consumer prices increased by just +1.4%, and in 2019, consumer prices rose at a +2.3% pace. As eye-popping as the +7.0% annual increase appeared, it was right on top of the median forecast. Core CPI, which excludes food and energy prices, rose +0.4% in December and +5.5% year-over-year, a new 30-year high. To a large degree, the markets have already factored-in higher prices …for a few more months anyway. The Fed is on track to address the problem by completing its taper in March and is now expected to begin tightening interest rates shortly thereafter. Although it’s possible that most inflation measures may be nearing a peak, it’s unlikely that inflation will move significantly lower on an annual basis until late spring. Retail Sales December retail sales fell short of forecasts as the rapid spread of the Omicron variant and misplaced seasonal adjustment factors conspired to create a distorted picture of consumer health. Headline sales fell -1.9%, well short of the -0.1% median forecast, highlighting once again how difficult it has been to make accurate predictions in the pandemic era. Overall retail sales were still up +16.9% year-over-year despite the December shortfall. The retail sales “control group,” which excludes sales at food services, auto dealers, gas stations and building materials stores (and is used in the GDP calculation) fell -3.1% in December. Retail sales measure total store receipts and are not adjusted for inflation. Sales would have appeared even weaker with if inflated goods prices hadn’t contributed mightily to total receipts. The overall season was solid, with total retail sales up +8.7% for the quarter on an annualized basis. Denton County and Texas Home Sales Texas home sales slipped -10.7% in the fourth quarter and -2.1% over the same three-month period a year ago. The average sales price in December was $390.7k, the highest on record, and roughly $53k above the same period in the previous year. The available inventory was just 1.2 months at the end of the quarter, matching the lowest level since the data series began in 1990, and a fraction of the 3.0 month supply from two years earlier. Sales certainly would have been much brisker if there was adequate inventory available. In Denton County, unit home sales fell -12.8% in the fourth quarter and -10.1% year-over-year as the available supply remained historically lean. The average sales price in December was $477.6k, down from a record $502.1k in August, but roughly $77k or +19.3% above the same period in the previous year. The available inventory was just 0.6 months at the end of the quarter, the lowest level since the data series began in 1990, and a fraction of the 3.6 month supply from June 2019. Home listings totaled just 800 in December, down considerably from 1,503 in September, and well below the 2,929 total from two years earlier. 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 Negative Description: Quarterly fuel trends for the United States and Texas. Analysis:Fuel prices are a major commodity source in the economy. Studies have shown a positive effect on disposable income levels when fuel prices decrease. It is estimated that for every penny decrease in the price of fuel, $1.3 billion is available to the consumer for disposable income. Therefore, the price of fuel is likely to be a key predictor of sales tax collections. Fuel prices showed a 4.8% increase from the prior quarter at the national level and a 3.7% increase at the state level. Staff has rated this outlook as Negative. Source: U.S. Department of Energy $0 $2 $4 $6 $8 $10 $12 $14 $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00 1Q '18 3Q '18 1Q '19 3Q '19 1Q '20 3Q '20 1Q '21 3Q '21 1Q '22 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 1st Quarter of 2021-22 shows an increase of 5.0 for a 1.77% increase over the prior quarter and an increase of 29.6 for a 11.45% increase over the 1st Quarter of 2020-21. Staff has rated this indicator as Negative. Source: American City and County Magazine 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. 230.00 240.00 250.00 260.00 270.00 280.00 290.00 4Q '19 1Q '20 2Q '20 3Q '20 4Q '20 1Q '21 2Q '21 3Q '21 4Q '21 1Q '22 Municipal Cost Index Hotel Occupancy Tax Analysis Outlook Positive 1st Quarter FY 2021-22 Actual Y-T-D Occupancy Tax Revenue:841,800$ 841,800$ FY 2020-21 Budget 468,542$ 468,542$ Over (Under) Budget 373,259$ 373,259$ Hotel Occupancy Tax Budget:2,875,354$ 2,875,354$ 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 accommodations;motels;a tourist home,house or court;lodging house;inn;rooming house;or bed and breakfast.The tax rate levied by the City is 7%of the price paid for a room.The State also levies a tax equal to 6%. Analysis:While the use of this revenue source is restricted by state law,it is an essential revenue source for various tourist related activities within the community and an important indicator of local economic activity.Hotel Occupancy tax revenue through the 1st Quarter of FY 2021 was 79.7% more than budget and 49.7% more than prior year's actual.Hotel receipts have exceeded pre COIVD-19 pandemic revenues.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 $900,000 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Hotel Occupancy Tax Collections FY 2018-19 FY 2019-20 FY 2020-21 FY 2021-22 Sales and Use Tax Analysis Outlook Positive 1st Quarter FY 2021‐22 Actual Y‐T‐D Revenue: Gross Sales Tax Municipal Operations 451,281$ 451,281$ General Retail & Others 13,014,657 13,014,657 Comptroller Fees (255,682) (255,682) Amount Retained (250,473) (250,473) Total Revenue 12,959,783$ $12,959,783 Expenses: Economic Incentives* Economic Incentives1 828,390$ 828,390$ Net Total 12,131,393 12,131,393 FY 2021‐22 Budget 10,684,778 10,684,778 Over(Under) Budget 1,446,615$ 1,446,615$ Sales Tax Budget: 46,246,938$ Year End Projection: 46,246,938 Variance to Original Budget: ‐$ Economic Development Expenditure Budget: 2,576,743$ Year End Projection: 2,576,743 Variance to Original Budget: ‐$ * Economic Incentive actuals are through December 2022 1. Includes Unicorn Lake, Rayzor Ranch, Golden Triangle Mall, O'Reilly Hospitality, and Buc‐ee's. 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 1st quarter of FY 2022 compared to revenues from the prior year 1st quarter shows a 19.99% increase, and compared to the budget it is 13.54% above. Staff has rated this indicator as Positive. $0.0 $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 1234 Gross Sales Tax Collections (Millions) FY 2018‐19 Actual FY 2019‐20 Actual FY 2020‐21 Actual FY 2021‐22 Actual Certificates of Occupancy Outlook Negative Source: City of Denton's Development Services Department. Description:Certificates of Occupancy (CO) are permits issued in compliance with the 2012 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, zoning, fire and consumer health codes are met. Analysis:Certificates of Occupancy are an economic indicator that provides a framework for the overall condition of the local economy. Certificates of Occupancy decreased 56.41% from the prior quarter and decreased 44.26% from the 1st Quarter of 2021. Staff has rated the outlook for this revenue indicator as Negative. 0.0 20.0 40.0 60.0 80.0 100.0 120.0 140.0 160.0 1Q '17 2Q '17 3Q '17 4Q '17 1Q '18 2Q '18 3Q '18 4Q '18 1Q '19 2Q '19 3Q '19 4Q '19 1Q '20 2Q '20 3Q '20 4Q '20 1Q '21 2Q '21 3Q '21 4Q '21 1Q '22 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 57.71% from the prior quarter and decreased 20.15% from the 1st Quarter of 2021. Staff has rated the outlook for this revenue indicator as Positive. 0.0 50.0 100.0 150.0 200.0 250.0 300.0 350.0 400.0 1Q '17 2Q '17 3Q '17 4Q '17 1Q '18 2Q '18 3Q '18 4Q '18 1Q '19 2Q '19 3Q '19 4Q '19 1Q '20 2Q '20 3Q '20 4Q '20 1Q '21 2Q '21 3Q '21 4Q '21 1Q '22 Residential Permits Texas Leading Indicators Index Outlook Positive Source: Federal Reserve Bank of Dallas Description:The Texas Leading Indicators Index is a single weighted summary statistic that sheds light on the future of the state's economy. The index is designed to signal movements and changes in the state's rate of growth. The index includes the following leading indicators: Texas Value of the Dollar, U.S. Leading Index, Real Oil Prices, Well Permits, Initial Claims for Unemployment Insurance, Texas Stock Index, Help-Wanted Advertising, and Average Weekly Hours Worked in Manufacturing. Analysis:Texas Leading Indicators provide a framework for the overall condition of the local economy. Data for this quarter shows an increase in the state's rate of growth. The index increased 3.65% from the prior quarter and increased 15.66% from the 1st Quarter of 2021. Staff has rated this indicator as Positive. 0.0 20.0 40.0 60.0 80.0 100.0 120.0 140.0 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 1Q '20 2Q '20 3Q '20 4Q '20 1Q '21 2Q '21 3Q '21 4Q '21 1Q '22 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 3.3% for the 1st Quarter. Since this is a decrease over the prior year's quarter rate, staff has rated the outlook indicator as Positive. Source: Federal Reserve Bank of Dallas, U.S. Bureau of Labor Statistics, and Texas Workforce Commission 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. 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 20.0 4Q '15 2Q '16 4Q '16 2Q '17 4Q '17 2Q '18 4Q '18 2Q '19 4Q '19 2Q '20 4Q '20 2Q '21 4Q '21 Unemployment Rate Index Dallas-Plano-Irving MD Denton Texas U6 Unemployment United States Section 4 City of Denton Quarterly Financial Report December 2021 INVESTMENT REPORT 1st Fiscal Quarter Ending December 31, 2021 Page 1 INVESTMENT POOL Policy Par Market Book Unrealized Max.Benchmark Portfolio:Value Value Value Gain/(Loss)1 WAM WAM YTM Yield* Investment Pool 720,937,705$ 722,217,892$ 721,964,964$ 252,928$ 87 550 0.17%0.30% *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)2 Max. U.S. Treasuries 205,000,000$ 205,786,070$ 205,946,180$ (160,110)$ 235 0.10%16.37%100.00% U.S. Federal Agencies 80,000,000$ 80,477,605$ 80,063,138$ 414,466$ 213 1.06%20.67%100.00% Municipal Bonds 5,000,000$ 5,027,900$ 5,029,922$ (2,022)$ 137 0.10%1.84%15.00% Certificates of Deposit -$ -$ -$ -$ 0 0.00%0.00%35.00% Commercial Paper 90,000,000$ 89,988,613$ 89,988,019$ 594$ 98 0.12%13.75%15.00% Local Government Investment Pools 297,775,270$ 297,775,270$ 297,775,270$ -$ 1 0.01%42.26%50.00% Demand Deposits 43,162,435$ 43,162,435$ 43,162,435$ -$ 1 0.22%5.11%- Total Portfolio 720,937,705$ 722,217,892$ 721,964,964$ 252,928$ 87 0.17%100.00%- Current 3 Months Ago 3 Month 1 Year Ago Investment Pool Comparisons:12/31/2021 9/30/2021 Difference 12/31/2020 Par Value 720,937,705$ 700,953,699$ 19,984,006$ 612,532,573$ Market Value 722,217,892$ 702,828,857$ 19,389,035$ 615,886,190$ Book Value 721,964,964$ 702,125,607$ 19,839,357$ 613,497,877$ Unrealized Gain(Loss)703,249$ 703,249$ -$ 2,388,314$ Weighted Average Maturity 87 115 (28) 125 Yield to Maturity 0.17%0.24%-0.07%0.80% Portfolio Composition: U.S. Treasuries 28.48%16.37%12.11%21.26% U.S. Federal Agencies 16.05%20.67%-4.62%31.63% Municipal Bonds 0.73%1.84%-1.11%2.37% Certificates of Deposit 0.00%0.00%0.00%0.00% Commercial Paper 12.81%13.75%-0.94%7.40% Local Government Investment Pools 34.86%42.26%-7.40%35.42% Demand Deposits 7.08%5.11%1.97%1.92% Bank Collateral Review**:Institution Collateral Type Market Value Collected Balance Collateral Ratio Wells Fargo Demand Deposits BNY Mellon U.S. Agency MBS 55,201,276$ 43,162,435$ > 102%127.89% **Does not include FDIC insurance Depository Ledger Balance Review:Institution Account Type Beginning Bal.Deposits Ending Bal. Wells Fargo Bank Checking 19,491,416$ 113,936,244$ 31,511,814$ Wells Fargo Bank ARPA Funds 11,649,006$ 1,614$ 11,650,620$ Compliance Statement & Review: 101,915,846$ Assistant Director of Finance Reviewer: Nicholas Vincent Chief Financial Officer Director of Finance Approver: Cassandra Ogden Preparer: Randee Klingele Treasury Manager Withdrawals The Quarterly Investment Report is in full compliance with the objectives,restrictions,and strategies as set forth in the City of Denton's Investment Policy and the Public Funds Investment Act (Texas Government Code, Chapter 2256.023). Approver: David Gaines -15.58% 0.00% 5.16% Pledge Required 5.41% -0.56% -$ CITY OF DENTON : QUARTERLY INVESTMENT REPORT 1 Year Ago Difference 108,405,132$ 1Unrealized gain/(loss)is the difference between the market and book value and does not represent an actual gain or loss.Gains and losses are realized only when a security is sold prior to maturity.Since it is the City's practice to hold investments until they mature,the temporary gains and losses are unlikely to be realized. (38) -0.63% -1.64% 106,331,702$ 108,467,087$ (1,685,065)$ 7.22% DocuSign Envelope ID: 48FC6687-705A-4246-82D0-087CFCEF465B 1st Fiscal Quarter Ending December 31, 2021 Page 2 INVESTMENT POOL Current 3 Months Ago 3 Month 1 Year Ago 1 Year 12/31/2021 9/30/2021 Difference 12/31/2020 Difference Par Value - U.S. Treasuries 205,000,000$ 199,000,000$ 6,000,000$ 144,000,000$ 61,000,000$ Par Value - U.S. Federal Agencies 80,000,000$ 112,500,000 (32,500,000) 166,525,000 (86,525,000) Par Value - Municipal Bonds 5,000,000$ 5,000,000 - 14,000,000 (9,000,000) Certificates of Deposit -$ - - - - Par Value - Commercial Paper 90,000,000$ 90,000,000 - 70,000,000 20,000,000 Local Government Investment Pools 297,775,270$ 244,775,270 53,000,000 210,478,678 87,296,592 Demand Deposits 43,162,435$ 49,678,429 (6,515,994) 7,528,895 35,633,540 Total Par Value 720,937,705$ 700,953,699$ 19,984,006$ 612,532,573$ 108,405,131$ Market Value - U.S. Treasuries 205,786,070$ 199,936,843$ 5,849,227$ 144,732,247$ 61,053,823$ Market Value - U.S. Federal Agencies 80,477,605$ 113,364,650 (32,887,045) 168,885,500 (88,407,895) Market Value - Municipal Bonds 5,027,900$ 5,088,900 (61,000) 14,270,840 (9,242,940) Certificates of Deposit -$ - - - - Market Value - Commercial Paper 89,988,613$ 89,984,765 3,848 69,990,030 19,998,583 Local Government Investment Pools 297,775,270$ 244,775,270 53,000,000 210,478,678 87,296,592 Demand Deposits 43,162,435$ 49,678,429 (6,515,994) 7,528,895 35,633,540 Total Market Value 722,217,892$ 702,828,857$ 19,389,035$ 615,886,190$ 106,331,702$ Book Value - U.S. Treasuries 205,946,180$ 199,950,655$ 5,995,525$ 144,141,559$ 61,804,620.41$ Book Value - U.S. Federal Agencies 80,063,138$ 112,659,269 (32,596,131) 167,103,591 (87,040,452) Book Value - Municipal Bonds 5,029,922$ 5,091,127 (61,205) 14,268,821 (9,238,899) Certificates of Deposit -$ - - - - Book Value - Commercial Paper 89,988,019$ 89,970,858 17,161 69,976,332 20,011,687 Local Government Investment Pools 297,775,270$ 244,775,270 53,000,000 210,478,678 87,296,592 Demand Deposits 43,162,435$ 49,678,429 (6,515,994) 7,528,895 35,633,540 Total Book Value 721,964,964$ 702,125,607$ 19,839,356$ 613,497,877$ 108,467,087$ Accrued Interest 928,600$ 728,600$ 200,000$ 2,048,931$ (1,120,330)$ Cash Value -723,146,492$ 703,557,457$ 19,589,035$ 613,153,994$ 109,992,498$ (Total Market Value + Accrued Interest) Unrealized Gain/(Loss)703,249$ 1,063,356$ (360,107)$ 3,489,943$ (2,786,694)$ Strategy Statement:The investment pool is an aggregation of the majority of City funds which may include tax receipts,enterprise fund revenues,fine and fee income, as well as some,but not necessarily all bond proceeds,grants,gifts and endowments.This portfolio is maintained to meet anticipated daily cash needs for the City's operations,capital projects and debt service.In order to meet these obligations and to minimize potential liquidation losses,the dollar-weighted stated average maturity of the investment pool shall not exceed 1.5 years or 550 days.The objectives of this portfolio are to:(1) ensure safety of principal by investing in only high quality securities for which a strong secondary market exists;(2)ensure that anticipated cash flow needs are matched with adequate investment liquidity;(3)limit market and credit risk through diversification;and (4)attain the best feasible yield,commensurate with the objectives and restrictions set forth in the Investment Policy,by actively managing the portfolio to meet or exceed the twelve month moving average yield of a one year U.S.Treasury bill as derived from the Federal Reserve Statistical Release H.15 for constant maturities. CITY OF DENTON : QUARTERLY INVESTMENT REPORT DocuSign Envelope ID: 48FC6687-705A-4246-82D0-087CFCEF465B 1st Fiscal Quarter Ending December 31, 2021 Page 3 INVESTMENT POOL (Based on Book Value) Current 3 Months Ago 1 Year Ago Summary By Security Type:12/31/2021 9/30/2021 12/31/2020 U.S. Treasuries 205,946,180$ 199,950,655$ 144,141,559$ U.S. Federal Agencies 80,063,138 112,659,269 167,103,591 U.S. Federal Agencies - Callable - 5,091,127 - Municipal Bonds 5,029,922 - 14,268,821 Certificates of Deposit - - - Commercial Paper 89,988,019 89,970,858 69,976,332 Local Government Investment Pools 297,775,270 244,775,270 210,478,678 Demand Deposits 43,162,435 49,678,429 7,528,895 Total Book Value 721,964,964$ 702,125,607$ 613,497,877$ 2976785 552720901.1 12/31/2019 Objective: Current 3 Months Ago 1 Year Ago Summary By Security Type:12/31/2021 9/30/2021 12/31/2020 U.S. Treasuries 28.48%28.48%23.50% U.S. Federal Agencies 16.05%16.05%27.24% U.S. Federal Agencies - Callable 0.00%0.00%0.00% Municipal Bonds 0.73%0.73%2.33% Certificates of Deposit 0.00%0.00%0.00% Commercial Paper 12.81%12.81%11.41% Local Government Investment Pools 34.86%34.86%34.31% Demand Deposits 7.08%7.08%1.23% Total 100.00%100.00%100.00% CITY OF DENTON : QUARTERLY INVESTMENT REPORT The portfolio is restricted to U.S.Treasuries and agency securities (maturing in less than five years);municipal bonds rated AA or better (maturing in less than three years);insured,collateralized,or standby letter of credit backed certificates of deposit (maturing in less than three years);collateralized repurchase agreements (maturing in less than thirty days);commercial paper rated A-1/P-1 or better (maturing in less than 270 days);and local government pools &SEC registered government money market mutual funds (weighted average maturity of less than 60 days). U.S. Treasuries 28.48% U.S. Federal Agencies 16.05%Municipal Bonds 0.73% Commercial Paper 12.81% Local Government Investment Pools 34.86% Demand Deposits 7.08% Current 12/31/2021 DocuSign Envelope ID: 48FC6687-705A-4246-82D0-087CFCEF465B 1st Fiscal Quarter Ending December 31, 2021 Page 4 INVESTMENT POOL (Based on Book Value) Current 3 Months Ago 1 Year Ago Summary By Issuer:12/31/2021 9/30/2021 12/31/2020 AUSTIN TEXAS -$ -$ -$ BAYLOR SCOTT 9,999,133 9,999,600 19,994,700 CORNELL UNIVERSITY - - DARTMOUTH COLLEGE - 9,990,258 FFCB 44,996,104 62,502,349 82,529,230.32 FHLB 20,064,012 35,123,715 49,311,241.94 FHLMC 4,999,582 4,999,342 15,055,549.27 FNMA 10,001,441 10,033,863 20,197,569.25 JP MORGAN SECURITIES LLC - - - JOHNS HOPKINS UNIVERSITY 10,000,000 9,999,942 - NORTHWEST ISD 5,029,922 5,091,127 - PRINCETON UNIVERSITY - - - PLANO ISD-BLDG - - 4,023,282 RBC 17,495,604 17,488,576 4,996,727.78 STATE OF CALIFORNIA 20,000,000 20,000,000 - STATE OF TEXAS - - 10,245,540 TEXPOOL 150,000,000 115,000,000 100,000,000.00 TEXSTAR 147,775,270 129,775,270 110,478,677.80 TOYOTA MOTOR CREDIT CORP 7,496,531 7,493,656 14,997,645.83 U.S. TREASURY 205,946,180 199,950,655 144,141,559.25 UNIVERSITY OF NORTH CAROLINA - - 10,000,000.00 UNIVERSITY OF TEXAS 24,996,750 24,989,083 9,997,000.00 WELLS FARGO DEMAND DEPOSITS 43,162,435 49,678,429 7,528,895.34 Total Book Value 721,962,964$ 702,125,607$ 613,487,877$ Current 3 Months Ago 1 Year Ago Summary By Issuer:12/31/2021 9/30/2021 12/31/2020 BAYLOR SCOTT 1.38%1.42%3.26% FFCB 6.23%8.90%13.45% FHLB 2.78%5.00%8.04% FHLMC 0.69%0.71%2.45% FNMA 1.39%1.43%3.29% DARTMOUTH COLLEGE 0.00%0.00%1.63% JOHNS HOPKINS UNIVERSITY 1.39%1.42%0.00% PLANO ISD-BLDG 0.00%0.00%0.66% RBC 2.42%2.49%0.81% STATE OF CALIFORNIA 2.77%2.85%0.00% NORTHWEST ISD 0.70%0.73%0.00% STATE OF TEXAS 0.00%0.00%1.67% TEXPOOL 20.78%16.38%16.30% TEXSTAR 20.47%18.48%18.01% TOYOTA MOTOR CREDIT CORP 1.04%1.07%2.44% U.S. TREASURY 28.53%28.48%23.50% UNIVERSITY OF NORTH CAROLINA 0.00%0.00%1.63% UNIVERSITY OF TEXAS 3.46%3.56%1.63% WELLS FARGO DEMAND DEPOSITS 5.98%7.08%1.23% Total 100.00%100.00%100.00% CITY OF DENTON : QUARTERLY INVESTMENT REPORT 1.38% 6.23% 2.78% 0.69% 1.39% 1.39% 2.42% 2.77% 0.70% 20.78% 20.47% 1.04% 28.53% 3.46% 5.98% Current 12/31/2021 BAYLOR SCOTT FFCB FHLB FHLMC FNMA JOHNS HOPKINS UNIVERSITY RBC STATE OF CALIFORNIA NORTHWEST ISD TEXPOOL TEXSTAR TOYOTA MOTOR CREDIT CORP U.S. TREASURY UNIVERSITY OF TEXAS WELLS FARGO DEMAND DEPOSITS DocuSign Envelope ID: 48FC6687-705A-4246-82D0-087CFCEF465B 1st Fiscal Quarter Ending December 31, 2021 Page 5 INVESTMENT POOL (Based on Par Value) Current 3 Months Ago 1 Year Ago Maturity Time Frame:12/31/2021 9/30/2021 12/31/2020 00-03 Months 500,937,705$ 390,953,699$ 370,952,573$ 03-06 Months 65,000,000 120,000,000 80,080,000 06-12 Months 125,000,000 165,000,000 101,500,000 12-24 Months 30,000,000 25,000,000 50,000,000 24 Months & Over - - 10,000,000 Total Par Value 720,937,705$ 700,953,699$ 612,532,573$ 12/31/2019 Objective: Current 3 Months Ago 1 Year Ago Maturity Time Frame:12/31/2021 9/30/2021 12/31/2020 00-03 Months 69.48%55.77%47.21% 03-06 Months 9.02%17.12%18.60% 06-12 Months 17.34%23.54%18.21% 12-24 Months 4.16%3.57%14.33% 24 Months & Over 0.00%0.00%1.65% 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 to provide cash flows based on the anticipated needs of the City. Liquidity is achieved by matching investment maturities with forecasted cash disbursements and by investing in securities with active secondary markets. Short-term local government investment pools and government money market mutual funds help to provide daily liquidity and may be utilized as a competitive alternative to other fixed income investments. $0 $50,000,000 $100,000,000 $150,000,000 $200,000,000 $250,000,000 $300,000,000 $350,000,000 $400,000,000 $450,000,000 $500,000,000 $550,000,000 $600,000,000 $650,000,000 $700,000,000 $750,000,000 $800,000,000 Current 3 Months Ago 1 Year Ago 00-06 Months 06-12 Months 12-24 Months 24 Months & Over DocuSign Envelope ID: 48FC6687-705A-4246-82D0-087CFCEF465B 1st Fiscal Quarter Ending December 31, 2021 Page 6 ECONOMIC SUMMARY Interest Rate History Source: U.S. Federal Reserve Statistical Release (H.15) Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Market Sector:Avg Avg Avg Avg Avg Avg Avg Avg Avg Avg Avg Avg Fed Funds (effective)0.54%0.79%1.04%1.15%1.30%1.67%1.90%2.15%2.40%2.41%2.37%1.90% 3-Month U.S. T-Bill 0.51%0.75%1.00%1.05%1.32%1.71%1.92%2.20%2.36%2.39%2.09%1.82% 2-Year U.S. T-Note 1.20%1.31%1.34%1.38%1.84%2.27%2.53%2.57%2.49%2.26%2.10%1.76% Portfolio Benchmark*0.61%0.69%0.83%1.00%1.20%1.46%1.75%2.05%2.33%2.48%2.00%1.80% Portfolio Yield 0.95%1.07%1.16%1.25%1.29%1.42%1.58%1.73%2.01%2.20%2.20%2.08% Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Market Sector:Avg Avg Avg Avg Avg Avg Avg Avg Avg Avg Avg Avg Fed Funds (effective)1.56%0.02%0.08%0.09%0.08%0.06%0.05%0.05%0.07% 3-Month U.S. T-Bill 1.55%0.09%0.14%0.10%0.07%0.02%0.04%0.04%0.04% 2-Year U.S. T-Note 1.57%0.25%0.15%0.13%0.12%0.15%0.25%0.21%0.38% Portfolio Benchmark*1.55%0.33%0.18%0.13%0.12%0.08%0.07%0.08%0.30% Portfolio Yield 1.96%1.62%1.31%0.94%0.80%0.45%0.38%0.24%0.17% *Twelve month moving average of a one year U.S. T-bill yield Fiscal Year: 2021-2022 2020-2021 2019-2020 2018-2019 2017-2018 QUARTERLY COMMENTARY 12/31/2021 388,000$ 1st Quarter Fiscal Year 2018-2019 Fiscal Year 2020-2021 Fiscal Year 2021-2022 1,324,344$ 2,332,128$ 2,937,508$ 3,413,936$ 6,122,536$ 9,262,499$ 2,982,157$ 2,138,420$ 4,317,890$ Source: Hilltop Securities Asset Management Economic Summary CITY OF DENTON : QUARTERLY INVESTMENT REPORT Fiscal Year 2016-2017 Fiscal Year 2017-2018 Fiscal Year-to-Date Earnings 3 Months 6 Months 9 Months 12 Months The portfolio is in compliance with the City's Investment Policy. During the first quarter ten investments matured totaling $96.5 million and six investments were purchased totaling $70 million. The portfolio's weighted average lagged the benchmark 12- month Treasury bill index by 13 basis points. This benchmark lag is due to a sudden spike in short-term rates during the November-December months. The Investments and deposits with daily liquidity was 47.2%.This month the Fed decided to keep the target range for the federal funds rate at 0 to 1/4 percent to achieve maximum employment and inflation. They also decided to reduce the monthly pace of its net asset purchases by $20 billion for Treasuries and and $10 billion for agency mortgage- backed securities in hopes to foster smooth market functioning and and accommodative financial conditions Staff will continue to monitor the investment portfolio and ensure compliance with the City's Investment Policy and the Public Funds Investment Act. Staff will continue to monitor the investment portfolio and ensure compliance with the City's Investment Policy and the Public Funds Investment Act. Fiscal Year 2019-2020 2,955,835$ 12,354,692$ 6,515,166$ 8,955,045$ 3rd Quarter 4th Quarter 9,330,232$ 7,751,129$ 5,750,008$ 2nd Quarter 0.00% 1.00% 2.00% 3.00% Dec- 16 Mar- 17 Jun- 17 Sep- 17 Dec- 17 Mar- 18 Jun- 18 Sep- 18 Dec- 18 Mar- 19 Jun- 19 Sep- 19 Dec- 19 Mar- 20 Jun- 20 Sep- 20 Dec- 20 Mar- 21 Jun- 21 Sep- 21 Dec- 21 Fed Funds 3-Month T-Bill 2-Year T-Note Portfolio Yield Portfolio Benchmark* FY 2016-17 FY 2017-18 FY 2018-19 FY 2020-21 FY 2021-22FY 2019-20 DocuSign Envelope ID: 48FC6687-705A-4246-82D0-087CFCEF465B Days toMaturityPage 1Par Value Book ValueMaturityDateStatedRateMarket ValueDecember 31, 2021Portfolio Details - InvestmentsAverageBalanceIssuerPortfolio ManagementCity of DentonYTM365 CUSIP Investment #PurchaseDateTreasury Discounts -Amortizing54TREASURY BILL412110,000,000.00 9,999,310.00 02/24/202208/26/2021 9,999,770.00 0.047912796D3047TREASURY BILL412220,000,000.00 19,998,916.39 02/17/202209/03/2021 19,999,400.00 0.043912796L8061TREASURY BILL412320,000,000.00 19,998,475.00 03/03/202209/03/2021 19,998,800.00 0.046912796L9849,996,701.39 0.04549,997,970.0050,000,000.0049,995,788.89Subtotal and Average54Treasury Securities - Coupon226U.S. TREASURY410510,000,000.00 10,088,075.95 08/15/20221.50006/11/2021 10,078,520.00 0.078912828YA2180U.S. TREASURY410915,000,000.00 15,003,626.43 06/30/20220.12507/16/2021 14,994,720.00 0.076912828ZX1134U.S. TREASURY411210,000,000.00 10,062,203.02 05/15/20221.75007/27/2021 10,060,940.00 0.058912828SV3150U.S. TREASURY411315,000,000.00 15,003,995.03 05/31/20220.12507/27/2021 15,000,000.00 0.060912828ZR4195U.S. TREASURY411410,000,000.00 10,089,804.91 07/15/20221.75007/28/2021 10,082,810.00 0.0699128287C8242U.S. TREASURY411620,000,000.00 20,006,175.41 08/31/20220.12507/29/2021 19,982,820.00 0.07891282CAG6257U.S. TREASURY411720,000,000.00 20,198,350.48 09/15/20221.50007/29/2021 20,176,560.00 0.089912828YF1226U.S. TREASURY412410,000,000.00 10,088,026.11 08/15/20221.50009/03/2021 10,078,520.00 0.078912828YA2303U.S. TREASURY41255,000,000.00 5,001,295.90 10/31/20220.12509/15/2021 4,992,580.00 0.09491282CAR2318U.S. TREASURY412610,000,000.00 10,132,539.62 11/15/20221.62509/23/2021 10,110,940.00 0.101912828TY6348U.S. TREASURY412710,000,000.00 10,139,793.89 12/15/20221.62510/18/2021 10,120,700.00 0.156912828YW4410U.S. TREASURY412810,000,000.00 10,130,766.75 02/15/20231.37510/18/2021 10,105,470.00 0.206912828Z86438U.S. TREASURY413210,000,000.00 10,004,824.77 03/15/20230.50012/09/2021 10,003,520.00 0.460912828ZD5155,949,478.27 0.116155,788,100.00155,000,000.00153,423,024.33Subtotal and Average254Federal Agency Issues - Coupon597FFCB401310,000,000.00 9,999,672.22 08/21/20232.57002/21/2019 10,354,646.40 2.5723133EKAU059FFCB401510,000,000.00 9,999,918.03 03/01/20222.55003/01/2019 10,038,737.90 2.5553133EKBV720FFCB405610,000,000.00 10,000,861.97 01/21/20221.60001/31/2020 10,007,294.30 1.4423133ELHR8137FFCB40765,000,000.00 4,998,002.89 05/18/20220.16005/28/2020 4,998,959.65 0.2653133ELZN7258FFCB410610,000,000.00 9,999,648.67 09/16/20220.08006/16/2021 9,997,975.30 0.0853133EMK68185FHLB406710,000,000.00 10,064,211.34 07/05/20221.95503/16/2020 10,085,675.20 0.0693130ABCY0206FHLB411510,000,000.00 9,999,800.68 07/26/20220.07007/29/2021 9,991,903.40 0.0743130ANEU0158FHLMC40785,000,000.00 4,999,581.63 06/08/20220.25006/15/2020 5,001,337.85 0.2693134GVJ664FNMA406610,000,000.00 10,001,440.99 01/05/20222.00003/16/2020 10,001,074.60 0.6933135G0S3880,063,138.42 0.96980,477,604.6080,000,000.0090,075,379.34Subtotal and Average185Municipal Bonds - Coupon45Northwest Ind School Dist (TX)41085,000,000.00 5,029,922.17 02/15/20225.00007/22/2021 5,027,900.00 0.101667826AT85,029,922.17 0.1015,027,900.005,000,000.005,039,464.79Subtotal and Average45Portfolio CITYAPRun Date: 02/14/2022 - 13:19PM (PRF_PM2) 7.3.0Report Ver. 7.3.6.1 Days toMaturityPage 2Par Value Book ValueMaturityDateStatedRateMarket ValueDecember 31, 2021Portfolio Details - InvestmentsAverageBalanceIssuerPortfolio ManagementCity of DentonYTM365 CUSIP Investment #PurchaseDateCommercial Paper Disc. - Amortizing39BAYLOR SCOTT412910,000,000.00 9,999,133.33 02/09/20220.08010/19/2021 9,999,110.00 0.08107287DB9027RBC410010,000,000.00 9,998,725.00 01/28/202205/05/2021 9,999,390.00 0.17578009BAU6107RBC41107,500,000.00 7,496,879.17 04/18/20220.14007/26/2021 7,494,645.00 0.14478009BDJ8111TOYOTA MOTOR CREDIT41117,500,000.00 7,496,531.25 04/22/20220.15007/27/2021 7,495,867.50 0.15589233HDN139UNIVERSITY OF TEXAS CP411925,000,000.00 24,996,750.00 02/09/20220.12008/13/2021 25,000,000.00 0.12291510LB9559,988,018.75 0.13159,989,012.5060,000,000.0059,984,820.83Subtotal and Average54Commercial Paper - Interest Bearing75JOHNS HOPKINS UNIV CP413010,000,000.00 10,000,000.00 03/17/20220.10010/19/2021 10,000,000.00 0.10147803LLY710,000,000.00 0.10110,000,000.0010,000,000.0010,000,000.00Subtotal and Average75Commercial Paper - Cpn at Disc/Prem44State of California413120,000,000.00 20,000,000.00 02/14/20220.13011/17/2021 19,999,600.00 0.13013068FCC020,000,000.00 0.13019,999,600.0020,000,000.0020,000,000.00Subtotal and Average44Local Govt Investment Pools1LOCAL GOVT INV POOL - TEXPOOL3996150,000,000.00 150,000,000.00 0.028150,000,000.00 0.028SYS39961LOCAL GOVT INV POOL - TEXSTAR3641147,775,269.64 147,775,269.64 0.010147,775,269.64 0.010SYS3641297,775,269.64 0.019297,775,269.64297,775,269.64266,226,882.54Subtotal and Average1Demand Deposits1DEMAND DEPOSITS - WELLS FARGO370631,511,814.41 31,511,814.41 0.25031,511,814.41 0.250SYS37061DEMAND DEPOSITS - WELLS FARGO40820.00 0.000.00 0.000SYS40821DEMAND DEPOSITS - WELLS FARGO410411,650,620.45 11,650,620.45 0.17006/01/2021 11,650,620.45 0.170SYS410443,162,434.86 0.22843,162,434.8643,162,434.8638,044,593.59Subtotal and Average10.174692,789,954.32720,937,704.5087722,217,891.60721,964,963.50Total and AveragePortfolio CITYAPRun Date: 02/14/2022 - 13:19PM (PRF_PM2) 7.3.0 Days toMaturityPage 3Par Value Book ValueStatedRateMarket ValueDecember 31, 2021Portfolio Details - CashAverageBalanceIssuerPortfolio ManagementCity of DentonYTM365 CUSIP Investment #PurchaseDate0.000.174692,789,954.32720,937,704.50870Average Balance722,217,891.60721,964,963.50Total Cash and InvestmentsPortfolio CITYAPRun Date: 02/14/2022 - 13:19PM (PRF_PM2) 7.3.0