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HomeMy WebLinkAboutMemo - Mail Packet - 8/22/2023 - Memorandum From Blaine Dunn And Randy Bailey Re: 2022 Annual Financial ReportPEOPLE’S ANNUAL FINANCIAL REPORT 2022 FORT COLLINS, COLORADO FISCAL YEAR ENDING DECEMBER 31, 2022 1873 2023 yesyes OF CITY SERVICE CONTENTS Letter from the City Manager & CFO .....................1 Meet Fort Collins ........................................................2 About the City Government Organization ..........3 Customer-Focused Service ....................................4 2022 Snapshot ...........................................................6 Fort Collins by the Numbers ...................................7 Fort Collins Financial Results ...........................10-11 Revenues .....................................................................12 Expenses .....................................................................13 Treasury Administration ..........................................15 Capital Assets ...........................................................16 Glossary ......................................................................17 The purpose of this report is to provide an overview of the financial position and operations of the City of Fort Collins, as reported in the City's Annual Comprehensive Financial Report, along with other information of interest. The financial information presented is unaudited and in a summarized and condensed form, and does not substitute for the City’s Annual Comprehensive Financial Report. The City’s Annual Comprehensive Financial Report is prepared in conformity with generally accepted accounting principles (GAAP). Included in the Annual Comprehensive Financial Report is the Independent Auditor’s Report by FORVIS, LLP on the general purpose financial statements of the City. This report summarizes more than 200 pages of the Annual Comprehensive Financial Report’s financial and statistical data. The financial statements condense information of all funds included in the “Total Primary Government.” GAAP requires certain financial presentation and disclosures, which are omitted in this report. As a result, the Balance Sheet and Income Statement presented here are not in strict conformity with GAAP. The City has received awards for outstanding financial reporting from the Government Finance Officers Association. The Annual Comprehensive Financial Report and the City Manager’s Budget are available on the City’s website, fcgov.com/finance. ABOUT THIS REPORT CITY OF FORT COLLINS 1 Travis Storin Chief Financial Officer Fort Collins Community Members, One of the City of Fort Collins’ primary responsibilities is to steward taxpayer dollars to provide the programs and services you expect and deserve from your local government. It is one we take seriously and strive to do so thoughtfully and with transparency. This includes providing regular reports on the City’s finances. As part of this commitment to financial transparency, we are pleased to present the City of Fort Collins People’s Annual Financial Report for the 2022 fiscal year. We hope it is an easy-to-understand, concise way for you to learn more about the City’s financial activity. This report includes condensed and simplified information from the 2022 Annual Comprehensive Financial Report. It is important to note that this report is unaudited and is presented on a non- Generally Accepted Accounting Principles (GAAP) basis, as it does not provide all of the necessary financial statements and note disclosures required by GAAP. This document includes information on the Fort Collins Urban Renewal Authority, a legally separate, blended component unit of the City, which is therefore included in the City’s governmental activity figures. It excludes discrete component units and fiduciary fund information. The Annual Comprehensive Financial Report is a more detailed and complete financial presentation, which is prepared in conformity with GAAP and is audited by the City’s independent auditors. For 150 years, the City of Fort Collins has provided high quality municipal services to the community. As Fort Collins has grown and the scope of services has evolved, our financial practices and transparency remain a cornerstone of our ability to provide those services. The City's financial position is strong and provides an important foundation for resiliency, operational excellence and innovation. We would like to thank the staff of the Accounting and Treasury department for producing this report and the Annual Comprehensive Financial Report. Their commitment to accountability and integrity provides a great service to the Fort Collins community. We also invite you to seek more in-depth information online. The Annual Comprehensive Financial Report, Biennial Budget, and other detailed reporting are available online at fcgov.com/finance. LETTER FROM THE CITY MANAGER & CFO Kelly DiMartino City Manager 2 PEOPLE’S ANNUAL FINANCIAL REPORT 2022 Fort Collins is recognized by various national organizations and magazines as one of the best places to live in the nation. Incorporated in 1873 and located in Northern Colorado, Fort Collins is home to Colorado State University (CSU), an outstanding public school system, several large high-tech employers and leading businesses in the craft brewing industry. The community offers exciting recreational opportunities, unique cultural offerings and amenities, and is a regional center for employment and commerce. As with many cities that house a large university, the economy and culture of both entities are closely tied. CSU is the largest employer in Fort Collins, and both the university and the community have grown considerably in population in recent history. Despite the vibrancy and general economic stability the community enjoys, the City has several challenges to navigate in coming years. The community has set ambitious climate action goals that will require thoughtful planning to achieve while still maintaining economic vitality and social health. Housing affordability and availability is a top priority for the community and City leadership, as is continuing to address transportation infrastructure needs in Fort Collins and across the region. In addition, challenges remain in closing the gap between available funding and ongoing parks, trails and recreation asset maintenance needs. QUICK FACTS • Estimated Population: 168,538 U.S. Census Bureau, 2022 Estimate • Unemployment Rate: 2.9% Bureau of Labor Statistics, 2022 average • Median Age: 30.4 2021 American Community Survey 1-Year Estimates • Median Household Income: $72,932 2021 American Community Survey 5-Year Estimates • Educational Attainment (bachelor's degree or higher): 58.5% 2021 American Community Survey 1-Year Estimates MEET FORT COLLINS TOP TEN EMPLOYERS BY HEADCOUNT Colorado State University 8,100 Educational Services UC Health 6,400 Healthcare & Social Assistance Poudre School District 4,500 Educational Services City of Fort Collins 2,000 Public Administration Larimer County 2,000 Public Administration Woodward 1,300 Manufacturing Broadcom 1,100 Public Administration Department of Agriculture 1,000 Manufacturing Otter Products 900 Manufacturing Dillon Companies (multiple King Soopers locations)750 Grocery CITY OF FORT COLLINS 3 CITY LEADERSHIP Fort Collins is a home rule city with a Council/ Manager form of government. The Council is made up of six district Councilmembers who are elected on a non-partisan basis for a four- year term and a Mayor who is elected at-large on a non-partisan basis for a two-year term. The Council appoints the City Manager, the City Attorney and the Municipal Judge, who in turn manage the professional municipal organization. CITY SERVICES The Fort Collins municipal organization provides a full range of services, including: • Police • Fire protection through a local authority • Streets, transportation and transit infrastructure and operations • Parks, recreation, natural areas and cultural facilities • Planning, engineering and community services • Sustainability services – economic health, environmental services and social sustainability • Utilities – electric, water, wastewater and stormwater • Connexion high-speed internet service • Internal and operational support services A full department directory can be found at fcgov.com/cityservices. KEY OUTCOME AREAS The City’s entire strategic planning, budgeting, execution, and performance measurement revolves around seven outcome areas. Our strategic plan is located at fcgov.com/StrategicPlan; the City budget can be reviewed at fcgov.com/budget. Neighborhood Livability & Social Health Culture & Recreation Economic Health Environmental Health Safe Community Transportation & Mobility High Performing Government VISION, MISSION & VALUES Mission: Exceptional service for an exceptional community. Vision: We foster a thriving and engaged community through our operational excellence and culture of innovation. Values: • Partnership • Service • Safety & Wellbeing • Sustainability • Integrity • Belonging ABOUT THE CITY GOVERNMENT ORGANIZATION 4 PEOPLE’S ANNUAL FINANCIAL REPORT 2022 CUSTOMER-FOCUSED SERVICE INTERACTING WITH THE CITY People have many avenues to keep up to speed on initiatives, news, programs, or requests for City services: Access Fort Collins - An easy way to reach the City with questions, comments, or service requests. fcgov.com/accessfortcollins FCTV - Regularly updated video content, available on demand, on the City's YouTube channel, and on basic cable, with several programming options designed to inform, educate, and inspire. fcgov.com/fctv Social Media - People can also stay current and provide feedback via social media platforms such as Facebook, Twitter, or Instagram. @fortcollinsgov OpenData - Designed to take transparency to the next level. The goal of OpenData is to create a web portal to host data sets, including expense records, that are available to the public in a format that people can easily search, filter, or use in innovative and creative ways. fcgov.com/opendata Our City - This is your chance to get involved in the City’s biggest projects! Engagement and feedback opportunities on this site mirror what is happening on the ground so everyone can join. ourcity.fcgov.com City News - monthly updates on City services, programs, and events. Subscriptions are also available for specialized newsletters about recreation, natural areas, public art, environmental news and more. CITY OF FORT COLLINS 5 DATA TRANSPARENCY Community Dashboard – An online tool that measures the community’s progress in attaining the City’s Key Outcome Areas.  Important metrics such as voluntary code compliance, unemployment rate, community energy use, number of local traffic crashes and transit ridership are measured and monitored so the City can adapt certain programs to ensure targets are met and improve performance where necessary. The Community Dashboard can be viewed at fcgov.com/dashboard.  Climate Dashboard – A snapshot of the community’s progress toward reducing carbon emissions. The City tracks emissions annually using 2005 as a baseline year. The community aims to reduce carbon 80% by 2030 with the goal of being carbon neutral by 2050. View the Climate Dashboard at ftcollinscap.clearpointstrategy.com. Financial Reporting – A wide collection of financial and performance reporting is maintained by the Finance department, including quarterly budget variance reporting, seven-year comparative statements, monthly sales tax reporting, and more. Access these reports at fcgov.com/finance. Community Survey – A statistically valid survey is conducted annually to poll the public on their perceptions and satisfaction with local government. The information gained from this survey is an important step in the Strategic Plan and the Budgeting for Outcomes processes. Learn more at fcgov.com/communitysurvey. Recovery Dashboard - In collaboration with the community, the City of Fort Collins adopted a Resilient Recovery Plan in March 2022. This plan serves as a guide to long-term response and rebuilding from the COVID-19 pandemic, along with guiding the spending of the $28.1 million of American Rescue Plan Act (ARPA) funds the City received. To provide transparency about how ARPA funds are being spent a Recovery Dashboard was launched to provide quarterly updates on all ARPA-funded programs. View the dashboard at fcgov.com/recoverydashboard. 6 PEOPLE’S ANNUAL FINANCIAL REPORT 2022 2022 Snapshot LEADERSHIP TRANSITIONS In July, City Council appointed Kelly DiMartino as Fort Collins' new city manager, concluding a national search that began when the former city manager departed in 2021. The City also welcomed new executives in the roles of Utilities executive director, assistant city manager and deputy city manager. PANDEMIC RECOVERY In March, Council unanimously adopted the Resilient Recovery Plan to guide long-term response and recovery from the COVID-19 pandemic. The plan also lays out priorities for spending the $28.1M of federal ARPA funds received by the City. City Council appropriated this funding to a variety of projects, including: • Mental Health Response Team Buildout • Human Services and Equity Grants • Multicultural Business and Entrepreneur Center • Recreation Reduced Fee Scholarships FORT COLLINS CONNEXION 2022 marked three years of municipal broadband service through Fort Collins Connexion. Construction has reached 95% community buildout, meaning service will be available citywide in 2023. NATURAL AREAS 30TH ANNIVERSARY Natural Areas began a year of celebrations in 2022 to honor the landmark ballot measure that established a quarter-cent sales tax dedicated to conserving local natural areas. The celebration included the debut of the Natural Areas Conservation Award to recognize extraordinary achievements in conserving local lands and resources. MENTAL HEALTH RESPONSE TEAM EXPANSION The Fort Collins Police Services co-responder program was originally formed in 2018 with one UCHealth mental health clinician. In 2022, the program expanded and was renamed the Mental Health Response Team, which now includes four clinicians, four police officers and a sergeant. In 2022, the team responded to 2,732 calls for service. MUSEUM 10TH ANNIVERSARY The Fort Collins Museum of Discovery celebrated its 10th anniversary and welcomed its one-millionth visitor. The Museum of Discovery is a public-private partnership that creates a unique destination blending science, music and local history. CITY OF FORT COLLINS 7 FORT COLLINS BY THE NUMBERS OPERATING STATISTICS 2,381 2,4132,381 2,413 2021 2022 +32 STAFFING YEAR-END HEADCOUNTS* 2021 1,596 full- and part-time employees and 785 hourly employees. 2022 1,692 full- and part-time employees and 721 hourly employees. * Contractual employees included in full- and part-time employee count. 2022 OPERATING & CAPITAL BUDGET $578.1M (AS AMENDED) Net Operating Budget $510.9M Capital Budget $67.2M UTILITIES 575 Miles of Water Distribution Mains 2,045 Miles of Primary Voltage Cable 142,645 Customer Inquiries Processed 99.99% Electric System Reliability TRANSPORTATION 1.77M Transfort & Dial-a-Ride Passengers 1,986 Street Lane Miles 246 Traffic Signals 220.4 Bike Lane Centerlane Miles SUSTAINABILITY $5.9M Awarded to Human Services & Affordable Housing Agencies CO2 24% Reduction in Greenhouse Gases (against 2005 levels) 58 Affordable Housing Units Constructed COMMUNITY SERVICES 345Natural Areas Activities for 13,324 participants 971Parks Acreage 48 Paved Trail Miles 1,103,001 Recreation Facility Attendance & Program Participation 1,497 Kids Enrolled in Camp FunQuest PUBLIC SAFETY 18,715 Medical Calls 74,954 Police Incidents 4:27 Avg. Response Time 6:52 Avg. Response Time 7,898 Fire Calls includes Wellington Fire ECONOMIC RECOVERY 43+ new businesses launched through the Multicultural Business and Entrepreneur Center 65+ programs funded with federal ARPA $ 110+ small businesses provided grants totaling more than $830K 17+ grants awarded to businesses impacted by construction, totaling more than $34K 8 PEOPLE’S ANNUAL FINANCIAL REPORT 2022 1873 2023 yesyes OF CITY SERVICE For 150 years, the City has provided high quality municipal services to the community, and our strong financial position provides an important foundation for resiliency, operational excellence and innovation.” — Kelly DiMartino Fort Collins City Manager CITY OF FORT COLLINS 9 10 PEOPLE’S ANNUAL FINANCIAL REPORT 2022 Fort Collins Financial Results NET POSITION The net position, or net worth, of the City at December 31, 2022 was $2.12 billion. Of the net position balance, $413.4 million is unrestricted and is available to meet ongoing obligations in accordance with the City’s fund designations and fiscal policies. The City’s net position increased from the prior year by over $22.5 million (1.1%). The governmental net position increased by $18.5 million (1.6%) and the business-type position increased by $4.0 million (0.4%). The City’s total long-term liabilities increased in 2022 by $23.1 million (10.0%) during the current year. Within that activity, the City’s governmental long-term liabilities increased by $13.9 million (20.8%) and business-type longterm liabilities increased by $9.2 million (5.6%). NET POSITION (at December 31 in thousands*) Governmental Business-type Total Primary Government 2021 2022 2021 2022 2021 2022 ASSETS Current and other assets $ 376,693 $ 399,178 $ 251,666 $ 242,958 $628,358 $ 642,136 Capital assets 961,472 977,821 852,239 865,499 1,813,711 1,843,320 Total assets 1,338,165 1,376,999 1,103,905 1,108,457 2,442,069 2,485,456 Deferred outflows of resources 564 2,353 847 2,500 1,412 4,853 LIABILITIES Long-term liabilities 66,602 80,451 163,749 172,988 230,351 253,439 Other liabilities 41,605 51,790 36,112 32,275 77,717 84,064 Total liabilities 108,270 132,240 199,861 205,263 308,068 337,503 Deferred inflows of resources 38,765 36,858 3,225 -41,990 36,858 NET POSITION Net investment in capital assets 905,257 921,666 691,652 703,114 1,596,909 1,624,780 Restricted 81,510 77,766 --81,510 77,766 Unrestricted 204,990 210,821 210,014 202,580 415,004 413,401 TOTAL NET POSITION $ 1,191,757 $ 1,210,253 $ 901,666 $ 905,694 $ 2,093,423 $ 2,115,947 * Totals may not add due to rounding CITY OF FORT COLLINS 11 Fort Collins Financial Results SUMMARY OF ACTIVITIES Governmental program revenues increased over 2021 by $1.4 million, or 2.0%, while sales & use tax revenues increased by $11.3 million, or 6.9% while Governmental expenses increased by $33.2 million over 2021. The increase in program revenue is attributed primarily to charges for services, which have steadily grown due to higher consumption following the wake of the pandemic. Other increases to program revenue include operating grants and contributions from the Coronavirus Local Fiscal Recovery Fund – ARPA, while the sales and use tax revenue has continued to rebound from pandemic driven impacts that affected 2021 commerce. On the business-type side, program revenues increased by $9.3 million with expenses increasing by $13.6 million. This 3.7% increase to program revenue was largely driven Electric & Telecommunication revenues for the build out of the Connexion internet service, and increased electric rates and consumption. Other increases include higher Water revenues for increased raw water surcharges, as well as higher commercial and industrial Wastewater sales. Expenses are described in greater detail in the following pages. For in-depth analysis, and multi- year trends of revenues & expenses see the 2022 Annual Comprehensive Financial Report. CONDENSED SUMMARY OF ACTIVITIES (at December 31 in thousands*) Governmental Business-type Total Primary Government 2021 2022 20212021 2022 2021 2022 REVENUES Program revenues, primarily service charges $ 69,453 $ 70,876 $ 248,157 $ 257,445 $ 317,610 $ 328,321 Sales & use taxes 162,698 173,971 - - 162,698 173,971 Other general revenues 73,582 63,976 783 ( 6,456 )74,365 57,520 TOTAL REVENUES 305,733 308,822 248,939 250,989 554,672 559,811 Expenses 258,746 291,906 231,799 245,380 490,545 537,286 Transfers 2,917 1,580 ( 2,917 )( 1,580 )- - CHANGE IN NET POSITION 49,903 18,496 14,223 4,029 64,127 22,525 Net position, beginning of year 1,141,854 1,191,757 887,442 901,665 2,029,296 2,093,423 NET POSITION, END OF YEAR $ 1,191,757 $ 1,210,253 $ 901,665 $ 905,694 $ 2,093,423 $ 2,115,947 * Totals may not add due to rounding 12 PEOPLE’S ANNUAL FINANCIAL REPORT 2022 SALES & USE TAX Many City services are funded through service charges, such as our Utility or Recreation services. However, the City assesses a 3.85% tax on sales, purchases, and certain services in order to fund other services that are not charged based on volume or usage. Base Rate 2.85% Funds government services like police, transportation, and administration. Streets and Transportation 0.25%, EXPIRES DECEMBER 31, 2025 Streets maintenance taxes were first approved in 1984 and were renewed in 1989, 1998, 2006, and 2016. The Street Maintenance Program focuses on extending the lifespan of roadways and minimizing the cost of maintaining a viable road surface. Good roads cost less to maintain than those in poor condition, and this tax allows the City to maintain the current level of service. Community Capital Improvement Program (CCIP) 0.25%, RENEWED APRIL 2015 AND EXPIRES DECEMBER 31, 2025 IS DEDICATED TO COMMUNITY IMPROVEMENTS CCIP taxes were initiated in 1985 and were renewed in 1990, 1998, 2006, and 2016. Project highlights using this funding for 2016-2025 include Club Tico renovations, Downtown Poudre River Whitewater Park, a Visitor’s Center at the Gardens on Spring Creek, Willow and Linden Street improvements, Lincoln Avenue bridge, and a Southeast Community Center. Natural Areas 0.25%, EXPIRES DECEMBER 31, 2030 Open Space Yes!, originally passed in 1992 and renewed in 1998 and 2006, is a key component in the conservation and management of natural areas and trails. Expenditures from this tax include land acquisition, resource and land management, public improvements, and educational programming. General Fund Renewable 0.25%, EXPIRES DECEMBER 31, 2030 This tax was passed by Fort Collins voters in April 2020 to continue funding services and programs residents value. This is also used in conjunction with the Base Rate to fund general government services. REVENUES HOW IS FUNDING RAISED? BASE TAX RATE 2.85% GENERAL FUND RENEWABLE .25% STREETS AND TRANSPORTATION .25% COMMUNITY CAPITAL IMPROVEMENT PROGRAM .25% NATURAL AREAS .25% $131.5 M $10.5 M $10.5 M $10.5 M$10.5 M SALES & USE TAX Dollar amounts in millions and reflect 2022 revenue CITY OF FORT COLLINS 13 EXPENSES WHERE DOES THE MONEY GO? Every two years, the City Manager submits a budget for City Council’s adoption. The proposed budget cannot include expenditures that exceed estimated reserve balances and anticipated revenue. The budget represents six months of input from residents, City staff and City management, and serves as the two-year blueprint for advancing results in the seven key outcome areas. Fort Collins uses Budgeting for Outcomes (BFO) for its budget. The process focuses on results and priorities, not on cost. The process shifts from paying for costs to buying results. Service providers, or “sellers," make offers to results teams aligned behind one of the seven outcomes. Teams evaluate effectively purchasing these offers from the seller based on their priority. These purchase decisions put residents and their priorities first. For more information, please visit fcgov.com/bfo. In 2022, governmental expenditures totaled $291.8 million, an increase of $33.0 million, or 12.8%, when compared to 2021. General Government and Public Safety expenses both increased over 2021 by $7.2 million and $9.3 million, respectively, with these increases largely due to expenses incurred from grant revenues, and other City improvements. Additionally, Culture, Parks, Recreation and Natural Areas and Transportation expenses also increased by $11.7 million and $5.6 million, respectively, also due to grant-related activity and rebounding economic activity following the pandemic. Planning and Development meanwhile decreased $0.8 million while interest on long- term debt decreased by $0.1 million. The City in 2022 also incurred $0.1 million of expenses that primarily pertains to principal paid on debt. Business-type Expenses totaled $245.5 million in 2022, an increase of $13.7 million, or 5.9%, when compared to 2021. Increases seen over prior years were largely due to inflationary pressures in energy cost, labor, equipment, and supplies, with the largest impact seen in Light & Power increasing $9.7 million over 2021, because of these factors and the continued build out of the Connexion internet service. Water also had a significant increased of $3.3 million also due to these impacts, while Wastewater & Golf expenditures only increased $0.2 million and $0.7 million, respectively. Storm Drainage was the only Business-type expense to decrease over 2021, declining by $0.2 million in 2022. 20182019202020212022 GENERAL GOVERNMENT PUBLIC SAFETY CULTURE, PARKS, RECREATION AND NATURAL AREAS PLANNING AND DEVELOPMENT TRANSPORTATION INTEREST ON LONG-TERM DEBT OTHER300M 250M 200M 150M 100M 50M $1.2 $72.0 $17.5 $46.6 $74.9 $45.4 $1.9 $62.5 $19.2 $42.1 $87.0 $57.4 $2.3 $73.0 $17.5 $44.9 $78.8 $44.0 $1.8 $67.7 $20.8 $41.0 $80.3 $47.2 $1.7 $73.3 $20.0 $52.7 $89.6 $54.4 $0.1 OTHER GOVERNMENT EXPENSES BY SERVICE 20182019202020212022 LIGHT & POWER WATER WASTEWATER STORMWATER GOLF 250M 200M 150M 100M 50M $3.6 $12.6 $22.4 $34.4 $158.8 $3.4 $11.3 $22.5 $31.1 $145.1 $3.2 $10.5 $20.5 $31.3 $145.6 $3.3 $10.7 $22.2 $29.9 $145.0 $4.3 $12.4 $22.6 $37.7 $168.5 BUSINESS-TYPE EXPENSES BY SERVICE 14 PEOPLE’S ANNUAL FINANCIAL REPORT 2022 SERVICE AREA Department General Fund Transportation Fund Capital Projects Fund Urban Renewal Authority Other Gov. Funds Grand Total POLICE SERV. TOTAL $163,730 ----$163,730 Investigations 28,810 ----28,810 Police Information Services 26,732 ----26,732 Patrol 57,327 ----57,327 Special Operations 31,911 ----31,911 Police Administration 18,950 ----18,950 FINANCIAL SERV. TOTAL 33,910 ----33,910 COMMUNITY & OPERATION SERV. TOTAL 53,982 -12,588 -125,567 192,137 Recreation 168 -4,766 -26,479 31,413 Community Serv. Admin. 1,831 ----1,831 Park Planning & Dev. 213 -4,485 -15,744 20,442 Cultural Services 1,991 -224 -24,581 26,796 Parks 48,171 -2,290 -3,160 53,621 Natural Areas 1,608 -822 -55,604 58,034 PLANNING, DEV. & TRANS. TOTAL 36,545 109,409 30,754 -102,455 279,163 PDT Administration 3,466 467 ---3,934 Transfort / Parking --574 -97,256 97,830 Comm. Dev & Neighborhood Svcs. 29,704 ---8 29,712 FC Moves -5,324 962 -1 6,287 Streets 3,375 79,284 --3 82,662 Traffic -15,545 --18 15,562 Engineering -8,789 29,217 -5,170 43,177 EXECUTIVE SERVICES TOTAL 15,228 ----15,228 JUDICIAL SERVICES TOTAL 4,925 ----4,925 LEGAL SERVICES TOTAL 10,071 ----10,071 INFO. & EMPLOYEE SVCS. TOTAL 65,213 -554 --65,767 SUSTAINABILITY SERVICES TOTAL 26,390 --18,371 9,204 53,965 Economic Health Office 3,051 ---54 3,106 Social Sustainability 12,783 ---8,567 21,349 Environmental Services 8,890 ----8,890 Administration 1,666 ---583 2,249 Urban Renewal Auth. ---18,371 -18,371 OTHER NON DEPT. TOTAL 7,091 ---14,181 21,272 POUDRE FIRE AUTHORITY TOTAL 101,635 ----101,635 GRAND TOTAL $518,719 $109,409 $43,895 $18,371 $251,408 $941,802 EXPENSES (CONTINUED) – WHERE DOES THE MONEY GO? Many expenditures of the City are segregated from other expenditures by a dedicated revenue source. Below is a breakdown by department of how proceeds from the various dedicated tax components are spent. Dedicated revenues, such as Keep Fort Collins Great, are contained to specified areas of spending by ballot language. Figures presented are expressed in thousands; totals may not add due to rounding. CITY OF FORT COLLINS 15 TREASURY ADMINISTRATION WHERE’S THE MONEY KEPT? CASH & INVESTMENT MANAGEMENT Investment policies are governed by City Council-adopted policy. The principal objective of the City's cash and investment strategy is preservation of investment principal. Thus, the policy allows for only fixed-income investments, such as state or local government debt, U.S. agency obligations, or highly rated U.S. corporate debt. Equity investments, such as common stock or mutual funds, are disallowed under the City’s policy. At Dec. 31, 2022, the fair market value of the City’s cash and investments was $516.2 million. The portfolio's overall market yield for 2022 was -3.35% and the realized and unrealized interest losses were $17.3 million. BONDED DEBT OBLIGATIONS The City’s credit rating was Aaa by Moody’s Investors Service at Dec. 31, 2022. This highly favorable investment rating, maintained by less than 5% of governments, allows the City to pay less interest on its debt issuances. At Dec. 31, 2022, the City held total bonded debt of $206.3 million. Of this amount, $47.5 million was related to government activities and $158.8 million was related to business-type activities. The debt service due within one year is $21.7 million. $82.2M FEDERAL FARM CREDIT BANK 15.3% $106.9M FEDERAL HOME LOAN BANK 37.6% FEDERAL NAT’L MORTGAGE ASSOC. 6.8%$35.2 M CASH & DEPOSITS 15.8% CORPORATE BONDS 20.6% $77.3 M $18.8 MFEDERAL HOME LOAN MORTGAGE CORP. 3.6% $0.9 MUS TREASURIES AND CERTIFICATES OF DEPOSIT 0.2% $194.9M 202020212022 REVENUE BONDS CERTIFICATES OF PARTICIPATION ASSIGNMENT OF LEASE PAYMENTS120M 100M 80M 60M 40M $0 $36.1 $171.5 $0 $39.9 $166.4 $0.3 $39.7 $176.3 CASH & INVESTMENTS December 31, 2022 in millions CITY DEBT OBLIGATIONS December 31, 2022 in millions 16 PEOPLE’S ANNUAL FINANCIAL REPORT 2022 CAPITAL ASSETS WHAT DOES THE CITY OWN? The book value, historical cost less depreciation, of the City’s capital assets totaled $1.8 billion at Dec. 31, 2022. This investment in capital assets includes buildings and improvements, infrastructure and other improvements, including streets, bridges, and the full utility delivery system, land and right-of-way, various equipment and construction in progress. Total investment in capital assets increased $29.6 million compared to 2021. While the City reports its assets at net book value based on acquisition cost and accumulated depreciation, estimated fair market value is 2-3 times higher due to market appreciation of water rights, land and building values. This estimate is based on appraisal value, replacement cost, and/or insured values. INFRASTRUCTURE AND IMPROVEMENTS LAND AND LAND RIGHTS BUILDING AND IMPROVEMENTS MACHINERY AND EQUIPMENT CONSTRUCTION IN PROGRESS4%4 % <1%RIGHT TO USE - LEASED ASSETS 55 %27%10 % INFRASTRUCTURE AND IMPROVEMENTS LAND AND LAND RIGHTS BUILDING AND IMPROVEMENTS MACHINERY AND EQUIPMENT CONSTRUCTION IN PROGRESS9%3 % <1%RIGHT TO USE - LEASED ASSETS 64 %13 %11 % GOVERNMENT CAPITAL ASSETS $977.8M BUSINESS-TYPE CAPITAL ASSETS $865.5M CITY OF FORT COLLINS 17 GLOSSARY Assets — what the City of Fort Collins owns. Business-type activities — private sector-type operations, such as Utilities and Golf, where fees for services typically cover all or most of the cost of operations, including depreciation. Capital assets — items such as City or Utility land, construction in progress, equipment, infrastructure and buildings, and improvements net of depreciation. Component Unit — legally separate organizations for which the City is financially accountable. The Urban Renewal Authority, Downtown Development Authority, and General Improvement Districts #1 and #15 are the City’s component units. Current and other assets — items such as pooled cash and investments, cash and investments with fiscal agents, receivables, internal balances, inventories, deposits with others, prepaid items and deferred charges. Deferred inflows — an acquisition of a net asset that is applicable to a future reporting period. Deferred outflows — a consumption of a net asset that is applicable to a future reporting period. Fiduciary fund — accounts for assets held on behalf of outside parties, including other governments. Governmental activities — City basic services, including police, planning, economic development, and culture and recreation. Sales, use, and property taxes finance the majority of these services. Invested in capital assets, net of related debt—amounts invested in capital assets less accumulated depreciation and any outstanding debt used to acquire these assets. Liabilities — what the City of Fort Collins owes. Long-term liabilities — items such as bonds, loans, compensated absences, and other City of Fort Collins obligations. Net book value — represents the acquisition cost less accumulated depreciation for an asset. Net position — the difference between City of Fort Collins assets and liabilities. It is the net worth of the City. Other liabilities — items such as payables, payroll, accrued interest and unearned revenue. PILOT — payment in lieu of taxes, made to compensate the primary government for some or all of the tax revenue lost due to the tax-exempt status of the City’s utilities. Primary government — all of the governmental and business-type activities belonging to the City of Fort Collins excluding the discretely presented component units and fiduciary funds. Restricted — funds that are not available for use because they have been set aside for a specific purpose or project. Unrestricted — one-time funds available to use for operations or capital. FORT COLLINS Government Finance Officers Association Award for Outstanding Achievement in Popular Annual Financial Reporting Presented to City of Fort Collins Colorado For its Annual Financial Report For the Fiscal Year Ended December 31, 2021 Executive Director/CEO Government Finance Officers Association of the United States and Canada (GFOA) has given an Award for Outstanding Achievement in Popular Annual Financial Reporting to the City of Fort Collins for its Popular Annual Financial Report for the fiscal year ended December 31, 2021. The Award for Outstanding Achievement in Popular Annual Financial Reporting is a prestigious national award recognizing conformance with the highest standards for preparation of state and local government popular reports. In order to receive an Award for Outstanding Achievement in Popular Annual Financial Reporting, a government unit must publish a Popular Annual Financial Report, whose contents conform to program standards of creativity, presentation, understandability, and reader appeal. 23-25230 | Auxiliary aids and services are available for persons with disabilities. SPECIAL THANKS TO THE PHOTO ARCHIVE OF THE FORT COLLINS MUSEUM OF DISCOVERY