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December 31, 2013 - Quarterly Review for the period ended SOUTHLAKE 1 � Quarterly Review For the period ended December 31, 2013 5 SOUTHLAKE CITY OF TEXAS Finance Department's Q uarterly For the period ended December 31, 2013 City of Southlake February 2014 Integrity ♦ Innovation a Accountability • Commitment to Excellence ♦ Teamwork 4 To: Shana Yelverton, City Manager From: Sharen Jackson, Chief Financial Officer Re: First Quarter FY 2014 Financial Report Date: February 28, 2014 The finance department is pleased to submit a financial report for the first quarter of FY2014 for the period ended December 31, 2013. This report contains financial statements for the City's operating funds and selected special revenue funds, status reports of the Capital Projects and a report of the City's Investment portfolio. GENERAL FUND REVENUES Property tax. In the General Fund, $8,170,547 of $18,888,326 or 43.3% of budgeted property tax has been collected. Since property tax bills are delinquent as of February 1, most tax collections are received in the first four months of the fiscal year. It is anticipated that collections will meet projections. Tarrant County has collected the City's taxes since 1982. Sales tax. Sales tax budgeted for Fiscal Year 2014 is $10,320,000. For FY2014 first quarter (October through December) the City has collected $3,498,630 in sales tax. This is 28.9% or $785,324 above the projected amounts to date. The increase is due to budget collections are net Grand Avenue 380 agreement and actual collections include 100% of Grand Avenue collections sales tax. Net the Grand Avenue 380 payments, sales tax collections are 9.2% above budget. Franchise fees. Franchise fees include amounts received for use of public rights of way from utility companies. To date the City has received $ of $2,678,977 budgeted. FY2014 collections are comparable to prior year's collections. A large portion of the franchise fees are collected in the fourth quarter of the fiscal year. Tri- County pays their second semi - annual payment in July. Fines/Forfeitures. Revenues from Fines and Forfeitures are $337,066, which is 27.7% of the $1,215,000 budgeted. This revenue source depends on many variables, such as the 1 number of citations issued, warrants issued and collected, plus the number of cases assigned to deferred adjudication. Citation volume is slightly lower for first quarter FY2014 compared to first quarter FY 2013. Citation volume is expected to remain consistent and revenues from fines are anticipated to meet budget. Charges for services. This category includes revenue from ambulance transport, recreation class fees, and amounts received from the Cities of Grapevine and Colleyville for participation in the Teen Court program. Revenues to date total $221,727, compared with $221,498 collected for the same period in the prior year. The majority of the revenue for this category is seasonal and collected during the summer months. It is anticipated that revenue from Charges for Services will be within budgeted amounts. Permits /fees. Revenues from permits and fees are $454,504 or 33.4% of the budgeted amount of $1,362,300. This is more than $399,488 collected as of December 31, 2012. 54 residential permits have been issued to date compared to 32 issued in the prior fiscal year's first quarter. The largest increase in permits /fees revenue is due to the increased number of residential permits and increased value in commercial permits issued during the first quarter FY2014. 3 and 5 commercial permits were issued for the first quarter December 31, 2013 and December 31, 2012, respectively. Miscellaneous. This category includes amounts from tower leases, the 10% administrative fee retained from Municipal Court State taxes remitted quarterly to the Comptroller, and library fees /fines. The City has received $165,182 to date. Revenues from miscellaneous income will meet the $810,000 budgeted. Interest income. Interest earnings to date total $31,045. It is anticipated that interest income will be within budgeted amounts. GENERAL FUND EXPENDITURES For the first quarter ended December 31, 2013 of the fiscal year, General Fund total expenditures are $7,973,838 or 23.1% of the $34,520,625 budget. A brief discussion of each department will follow, providing a summary explanation of major expenditures trends. General government department. Department expenditures for the City Secretary's Office, Human Resources, City Manager's Office, Information Technology and Support Services total $1,367,132 which is 25.7% of budget. Personnel, contract services and utility expenditures are on target with budget. Therefore it is anticipated that expenditures in General Government will be within the amount budgeted. Finance department. For the Finance, Municipal Court, Teen Court Divisions, total expenditures to date are $509,860 or 25.6% of the $1,992,483 budgeted. Personnel, operations and capital expenditures are within budget. 2 Public safety department. Total expenditures for Police Services, Fire Services, and Public Safety Support, are $3,415,279, which is 23.1% of the $14,803,806 budgeted. Currently, public safety expenditures are within budget and on target for the fiscal year. Public works department. Budgeted within this department are Streets/Drainage, Facility Maintenance and Public Works Administration. Expenditures to date are $842,225 or 19.6% of the $4,288,276 budgeted. Personnel, operations and capital expenditures are within budget. Planning and development department. Total expenditures for Planning and Building Inspections are $395,568 or 20.6% of the $1,916,824 budgeted for the year. Expenditures in the Department are within budget. Economic development department. The department has expended $33,405, or 12.0% of the $279,071 budgeted for the year. Expenditures in the Department are within budget. Community services department. Total expenditures for Community Services, Parks and Recreation, and Library Services are $1,410,369 or 23.8% of the $5,917,764 budgeted. Personnel, operations and capital expenditures are on target with budget. Expenditures in the Department are expected to be within budget projections. WATER AND SEWER ENTERPRISE FUND Revenues. As of December 31, 2013, the City has received $5,213,864 or 22.3% in revenues of the $23,338,875 estimated. This is less than $5,566,196 received through December of last year. The majority of the decrease is due to December 2013 sales were significantly less than December 2012 due to the increased precipitation and colder weather during December 2013. Total revenues for the year will most likely be within budget. Expenses. The City has expended $2,981,915 or 12.9% of the $23,092,618 budgeted for personnel, operations, capital, and debt services. Of the total expenses, $1,271,475 has been paid to the City of Fort Worth for treated water. STORMWATER ENTERPRISE FUND Revenues. On October 17, 2006, City Council approved Ordinance No. 900 and 901 establishing the Storm Water Drainage Utility System and establishing the fee respectively. As of December 31, 2013, the City has received $339,266 or 28.2% in revenue of the $1,286,500 estimated. 3 Expenses. The City has expended $99,980 or 19.5% of the $512,426 budgeted for personnel and operations. $65,460 expended for drainage materials and contract services. DEBT SERVICE FUND Revenues. The City has received $2,870,482 in current and delinquent property taxes through December 31, 2013. This fund pays the property tax supported debt requirements for the City. The first semi - annual payments are due beginning February 2014. SOUTHLAKE PARKS DEVELOPMENT CORPORATION (SPDC) Operating Fund. As of December 31, 2013, $1,723,206 in the 1 /2 cent sales tax has been collected. SPDC sales tax receipts are 9.2% above estimates, or $145,337. CRIME CONTROL AND PREVENTION DISTRICT (CCPD) Operating Fund. As of December 31, 2013, $1,692,672 in the %2 cent sales tax has been collected. Sales tax receipts are 11.5% above estimates, or $174,832. PARK DEDICATION FEE FUND Revenues. The City has not collected any park dedication funds as of December 31, 2013. This revenue source varies depending on the number of developments during a fiscal year, and the park dedication fee credits given, if any, for open space and amenities. TAX INCREMENT FINANCIAL DISTRICT (TIF) Revenues. To date TIF has not received any revenues for the fiscal year. Historically, the TIF revenues are not collected until the third quarter of the fiscal year. STRATEGIC INITIATIVE FUND Expenditures. As of December 31, 2013, the expenditures were $25,967 for community enhancement and technology infrastructure. 4 HOTEL OCCUPANCY FUND Revenues. The City has collected $166,292 or 18.9% in revenue of the $881,176 budgeted for the year. The Hotel Occupancy Tax is authorized under the Texas Tax Code, Chapter 351. The City of Southlake adopted Ordinance No. 769 in February 2000, levying a 7% tax on room receipts. The Hilton Hotel in Town Square opened in June 2007. Expenditures. As of December 31, 2013, the expenditures were $110,339 for personnel, advertising and marketing and promotion. 5 GENERAL FUND Statement of Revenues, Expenditures and Changes in Fund Balance for the period ended December 31, 2013 with comparative actual amounts for the period ended December 31, 2012 (fiscal month 3- 25.00 %) Percent % Increase/ Year to Date 2014 Collected/ Year to Date - Decrease REVENUES 12/31/13 Budget Expended 12/31/12 Prior Year Ad Valorem Taxes $8,170,547 $18,888,326 43.3% $8,310,938 -1.7% Sales Tax 3,498,630 10,320,000 33.9% 2,980,042 17.4% Franchise Fees 269,787 2,678,977 10.1% 283,392 -4.8% Fines 337,066 1,215,000 27.7% 317,067 6.3% Charges for Services 221,727 1,248,100 17.8% 221,498 0.1% Permits /Fees 454,504 1,362,300 33.4% 399,488 13.8% Miscellaneous 165,182 810,000 20.4% 124,803 32.4% Interest Income 31,045 70 44.4% 19,945 55.7% Total Revenues $13,148,488 $36,592,703 35.9% $12,657,173 3.9% EXPENDITURES City Secretary $82,404 $393,009 21.0% $90,213 -8.7% Human Resources 111,911 636,951 17.6% 87,725 27.6% City Manager 182,849 810,044 22.6% 143,734 27.2% Information Technology 453,791 2,095,122 21.7% 515,146 -11.9% Support Services 536,177 1,387,275 38.6% 451,605 18.7% General Government Total 1,367,132 5,322,401 25.7% 1,288,423 6.1% Finance 358,286 1,186,892 30.2% 374,932 -4.4% Municipal Court 124,431 657,354 18.9% 121,256 2.6% Municipal Court-Teen Court 27,143 148,237 18.3% 26,489 2.5% Finance Total 509,860 1,992,483 25.6% 522,677 -2.5% Fire 1,720,162 7,595,181 22.6% 1,329,393 29.4% Police 1,388,606 5,946,894 23.4% 1,316,675 5.5% Public Safety Support 306,511 1,261,731 24.3% 371,522 -17.5% Public Safety Total 3,415,279 14,803,806 23.1% 3,017,590 13.2% Streets /Drainage 389,473 1,637,590 23.8% 386,638 0.7% Facility Maintenance 228,021 1,560,737 14.6% 338,488 -32.6% Public Works Administration 224,731 1,089,949 20.6% 227,298 -1.1% Public Works Total 842,225 4,288,276 19.6% 952,424 -11.6% Building Inspections 199,619 949,024 21.0% 192,757 3.6% Planning 195,949 967,800 20.2% 198,662 -1.4% Planning and Dev Total 395,568 1,916,824 20.6% 391,419 1.1% Economic Development 33,405 279,071 12.0% 43,776 -23.7% Economic Development Total 33,405 279,071 12.0% 43,776 - 23.7% Community Services 204,840 751,839 27.2% 173,262 18.2% Parks and Recreation 1,030,485 4,506,432 22.9% 1,040,679 -1.0% Library Services 175,044 659,493 26.5% 159,921 9.5% Community Services Total 1,410,369 5,917,764 23.8% 1,373,862 2.7% Total Expenditures $7,973,838 $34,520,625 23.1% $7,590,171 5.1% Excess (deficiency) of Revenue over Expenditures $5,174,650 $2,072,078 $5,067,002 OTHER FINANCING SOURCES AND (USES) Proceeds from lease /CO (net) $0 $0 $0 Transfer In -Other Funds 1,481,115 1,481,115 1,324,541 Transfer To -Other Funds (3,220,000) (3,220,000) (1,500,000) Total Other Sources /(Uses) ($1,738,885) ($1,738,885) ($175,459) Excess (deficiency) of Revenues /other sources over Exp. $3,435,765 $333,193 $4,891,543 FUND BALANCE OCT 1 $8,601,791 Change in reserved fund balance $0 ENDING FUND BALANCE $8,934,984 fund balance percentage 25.88% WATER AND SEWER ENTERPRISE FUND Comparative Statement of Revenues and Expenses for the period ended December 31, 2013 and December 31, 2012 (fiscal month 3- 25.00 %) C Percent % Increase/ Year to Date 2014 Collected/ Year to Date - Decrease REVENUES 12/31/13 Budget Expended 12/31/12 Prior Year Water Sales- residential $2,656,734 $12,850,000 20.7% $3,022,045 -12.1% Water Sales- commercial 798,456 3,300,000 24.2% 863,711 -7.6% Sewer Sales 1,256,923 5,100,000 24.6% 1,219,534 3.1% Sanitation Sales 363,138 1,550,000 23.4% 323,479 12.3% Other utility charges 113,860 395,375 28.8% 114,411 -0.5% Miscellaneous 17,689 118,500 14.9% 17,632 0.3% Interest Income 7,064 25,000 28.3% 5,384 31.2% Total Revenues $5,213,864 $23,338,875 22.3% $5,566,196 -6.3% EXPENSES Water $1,935,708 $12,257,902 15.8% $1,891,582 2.3% Utility Billing 100,980 494,640 20.4% 100,663 0.3% Sewer 744,651 2,422,441 30.7% 690,022 7.9% Sanitation 200,576 1,138,800 17.6% 176,760 13.5% Debt Service 0 6,778,835 0.0% 0 0.0% Total Expenses $2,981,915 $23,092,618 12.9% $2,859,027 4.3% Excess (deficiency) of Revenue over Expenses $2,231,949 $246,257 $2,707,169 THER FINANCING SOURCES AND (USES) Transfer In -Other Funds $0 $0 Developer Contributions $0 $50,000 $0 Transfer Out -Other Funds (935,555) (935,555) (836,220) Total Other Sources /(Uses) ($935,555) ($885,555) ($836,220) Excess (deficiency) of Revenues and other sources over Expenses $1,296,394 ($639,298) $1,870,949 I STRATEGIC INITIATIVE FUND Comparative Statement of Revenues and Expenditures for the period ended December 31, 2013 and December 31, 2012 (fiscal month 3- 25.00 %) Percent % Increase/ Year to Date 2014 Collected/ Year to Date - Decrease REVENUES 12/31/13 Budget Expended 12/31/12 Prior Year Interest Income $5,946 $8,000 74.3% $829 617.2% Total Revenues $5,946 $8,000 74.3% $829 617.2% EXPENDITURES Infrastructure Maintenance $0 $0 0.0% $0 0.0% Community Enhancement 9,007 290,000 3.1% 10,250 -12.1% Technology Infrastructure 16,960 70,630 24.0% 0 169599900.0% Capital Acquisition 0 520,000 0.0% 0 0.0% Total Expenditures $25,967 $880,630 2.9% $10,250 153.3% Excess (deficiency) of Revenue over Expenses ($20,021) ($872,630) ($9,421) OTHER FINANCING SOURCES AND (USES) Transfer In -Other Funds $2,200,000 $2,200,000 $1,300,000 Transfer Out -Other Funds (4,100,000) (4,100,000) (3,400,000) Total Other Sources /(Uses) ($1,900,000) ($1,900,000) ($2,100,000) _xcess (deficiency) of Revenues and other sources over Expenses ($1,920,021) ($2,772,630) ($2,109,421) FUND BALANCE OCT 1 $5,870,691 ENDING FUND BALANCE $3,098,061 SOUTHLAKE PARKS DEVELOPMENT CORPORATION Comparative Statement of Revenues and Expenditures for the period ended December 31, 2013 and December 31, 2012 (fiscal month 3- 25.00 %) Percent % Increase/ Year to Date 2014 Collected/ Year to Date - Decrease REVENUES 12/31/13 Budget Expended 12/31/12 Prior Year Sales Tax $1,723,206 $5,650,000 30.5% $1,467,782 17.4% Rental Income 38,457 153,816 25.0% 38,457 0.0% Interest Income 419 14,000 3.0% (270) - 255.2% Total Revenues $1,762,082 $5,817,816 30.3% $1,505,969 17.0% EXPENDITURES Personnel $27,664 $102,976 26.9% $13,147 110.4% Operations 4,025 472,000 0.9% $5,268 -23.6% Capital 0 158,000 0.0% 73,893 - 100.0% Total Expenditures $31,689 $732,976 4.3% $92,308 - 65.7% Excess (deficiency) of Revenue over Expenses $1,730,393 $5,084,840 $1,413,661 OTHER FINANCING SOURCES AND (USES) Transfer In -Other Funds $0 $0 $0 ansfer Out -Other Funds (5,918,311) (5,918,311) (4,296,433) ital Other Sources /(Uses) ($5,918,311) ($5,918,311) ($4,296,433) Excess (deficiency) of Revenues and other sources over Expenses ($4,187,918) ($833,471) ($2,882,772) FUND BALANCE OCT 1 $7,158,675 ENDING FUND BALANCE $6,325,204 CRIME CONTROL AND PREVENTION DISTRICT Comparative Statement of Revenues and Expenditures for the period ended December 31, 2013 and December 31, 2012 (fiscal month 3- 25.00 %) Percent % Increase/ Year to Date 2014 Collected/ Year to Date - Decrease REVENUES 12/31/13 Budget Expended 12/31/12 Prior Year Sales Tax $1,692,672 $5,650,000 30.0% $1,448,489 16.9% Interest Income 203 3,500 5.8% 534 - 62.0% Total Revenues $1,692,875 $5,653,500 29.9% $1,449,023 16.8% EXPENDITURES Personnel $160,027 $584,407 27.4% $11,180 1331.4% Operations 38,655 251,692 15.4% 25,168 53.6% Capital 0 0 0.0% 296,016 - 100.0% Total Expenditures $198,682 $836,099 23.8% $332,364 -40.2% Excess (deficiency) of Revenue over Expenses $1,494,193 $4,817,401 $1,116,659 OTHER FINANCING SOURCES AND (USES) Transfer In -Other Funds $0 $0 $0 Transfer Out -Other Funds (5,245,275) (5,245,275) (5,176,740) , tal Other Sources /(Uses) ($5,245,275) ($5,245,275) ($5,176,740) Excess (deficiency) of Revenues and other sources over Expenses ($3,751,082) ($427,874) ($4,060,081) FUND BALANCE OCT 1 $4,248,189 ENDING FUND BALANCE $3,820,315 HOTEL OCCUPANCY TAX Comparative Statement of Revenues and Expenditures for the period ended December 31, 2013 and December 31, 2012 (fiscal month 3- 25.00 %) Percent % Increase/ Year to Date 2014 Collected/ Year to Date - Decrease REVENUES 12/31/13 Budget Expended 12/31/12 Prior Year Taxes $166,091 $879,176 18.9% $156,785 5.9% Interest Income 201 2,000 10.1% 530 -62.1% Total Revenues $166,292 $881,176 18.9% $157,315 5.7% EXPENDITURES Personnel $17,722 $183,613 9.7% $33,567 -47.2% Operations $92,617 663,231 14.0% $104,148 -11.1% Capital 0 0 0.0% 0 0.0% Total Expenditures $110,339 $846,844 13.0% $137,715 -19.9% Excess (deficiency) of Revenue over Expenses $55,953 $34,332 $19,600 OTHER FINANCING SOURCES AND (USES) Transfer In -Other Funds $0 $0 $0 Transfer Out -Other Funds (167,423) (167,423) (150,043) )tal Other Sources /(Uses) ($167,423) ($167,423) ($150,043) Excess (deficiency) of Revenues and other sources over Expenses ($111,470) ($133,091) ($130,443) FUND BALANCE OCT 1 $1,288,078 ENDING FUND BALANCE $1,154,987 CITY OF SOUTHLAKE 1% SALES TAX REPORT 2014 Collected Budget Balance Budget to Date Balance Percent $ 10,100,000 $3,498,630 ($6,601,370) - 65.36% FISCAL FISCAL FISCAL YEAR % Inc YEAR % Inc YEAR % Inc MONTH 2012 -Dec 2013 -Dec 2014 -Dec October 639,737 -6.8% 848,376 32.6% 983,585 15.94% November 790,535 -1.5% 837,828 6.0% 995,373 18.80% December 1,246,867 6.2% 1,293,838 3.8% 1,519,672 17.45% January 691,298 -9.1% 837,172 21.1% - 100.00% February 696,332 12.3% 816,932 17.3% - 100.00% March 957,766 11.9% 976,128 1.9% - 100.00% April 823,333 9.8% 925,224 12.4% - 100.00% May 818,901 4.0% 992,062 21.1% - 100.00% June 947,763 3.3% 1,127,745 19.0% - 100.00% July 892,534 18.8% 934,070 4.7% - 100.00% August 789,664 20.1% 917,449 16.2% - 100.00% September 980,649 13.5% 991,136 1.1% - 100.00% TOTAL $10,275,380 $11,497,962 $3,498,630 Three Year Revenue Comparison by Month 1,600,000 1,400,000 r 1,200, 000 "'IC o 1,000,000 o ° c oo 800,000 `� a o c � 600,000 I - _`^ - i 400,000 - 200,000 0 . . - A., ., ._ - --..) -rte 7 O ° � 9 , e� .oe� Ue o�ec a ,,) `Ja c1 ,b. PQ�\ •k. , ��0 ..,--\ Q , )4 se c e F ,e pe 4 C P •FISCAL YEAR 2012 OFISCAL YEAR 2013 FISCAL YEAR 2014 Actual Budget Actual Estimated (budget -est.) 2013 2014 2014 2014 Difference Change October( *) $848,376 $741,937 $983,585 $ 983,585 $ 241,648 32.57% November( *) $837,828 $798,045 $995,373 $ 995,373 $ 197,328 24.73% December( *) $1,293,838 $1,173,324 $1,519,672 $ 1,519,672 $ 346,348 29.52% January( *) $837,172 $725,785 $0 $ 725,785 $ - 0.00% February( *) $816,932 $602,598 $0 $ 602,598 $ - 0.00% March( *) $976,128 $993,437 $0 $ 993,437 $ - 0.00% April ( *) $925,224 $784,570 $0 $ 784,570 $ - 0.00% May ( *) $992,062 $762,835 , $0 $ 762,835 $ - 0.00% June *) $1,127,745 $997,966 $0 $ 997,966 $ - 0.00% July ( *) $934,070 $768,392 $0 $ 768,392 $ - 0.00% August( *) $917,449 $785,474 $0 $ 785,474 $ - 0.00% September( *) $991,136 $965,637 SO $ 965,637 $ - 0.00% TOTAL $ 11,497,962 _ $ 10,100,000 $ 3,498,630 $ 10,885,324 $ 785,324 * Beginning April 2006 includes Grand Avenue sales tax collections per 380 agreement 80% of collections will be distributed to Cooper & Stebbins SOUTHLAKE PARKS DEVELOPMENT CORPORATION 1/2% SALES TAX REPORT 2014 Collected Budget Balance Budget to Date Balance Percent $ 5,650,000 $1,723,206 ($3,926,794) - 69.50% FISCAL FISCAL FISCAL YEAR % Inc YEAR % Inc YEAR % Inc MONTH 2012 -Dec 2013 -Dec 2014 -Dec October $315,095 -6.8% $417,857 32.6% $484,453 15.94% November $389,368 -1.5% $412,661 6.0% $490,258 18.80% December $614,129 6.2% $637,264 3.8% $748,495 17.45% January $340,490 -9.1% $412,338 21.1% - 100.00% February $342,969 12.3% $402,370 17.3% - 100.00% March $471,735 11.9% $480,779 1.9% - 100.00% April $405,522 9.8% $455,708 12.4% - 100.00% May $403,340 4.0% $488,628 21.1% - 100.00% June $466,809 3.3% $555,457 19.0% - 100.00% July $439,607 18.8% $460,065 4.7% - 100.00% August $388,939 20.1% $451,878 16.2% - 100.00% September $483,006 13.5% $488,172 1.1% - 100.00% TOTAL $ 5,061,008 $5,663,175 $1,723,206 Three Year Revenue Comparison by Month $800,000 $600,000 , $400,000 - -' �`` -' -! -9-1 -' r -i --11 1 -- $200,000 j - - - I - , _ _ L i $0 ,> 1... ! i ,� *-7 o Gp ,cc, cs. • � � X91 , , ) Jae � a �� P , §:5 vs?' 5 e'9 ■FISCAL YEAR 2012 0 FISCAL YEAR 2013 6 FISCAL YEAR 2014 Actual Budget Actual Estimated (budget -est.) % 2013 2014 2014 2014 Difference Change MONTH October $417,857 $ 425,551 $484,453 $ 484,453 $ 58,902 13.84% November $412,661 $ 431,481 $490,258 $ 490,258 $ 58,778 13.62% December $637,264 $ 720,838 $748,495 $ 748,495 $ 27,657 3.84% January $412,338 $ 373,719 $0 $ 373,719 $ - 0.00% February $402,370 $ 377,711 $0 $ 377,711 $ - 0.00% March $480,779 $ 525,100 $0 $ 525,100 $ - 0.00% April $455,708 $ 446,422 $0 $ 446,422 $ - 0.00% May $488,628 $ 409,713 $0 $ 409,713 $ - 0.00% June $555,457 $ 545,185 $0 $ 545,185 $ - 0.00% July $460,065 $ 426,689 $0 $ 426,689 $ - 0.00% August $451,878 $ 430,888 $0 $ 430,888 $ - 0.00% September $488,172 $ 536,703 $0 $ 536,703 $ - 0.00% TOTAL $ 5,663,175 $ 5,650,000 $ 1,723,206 $ 5,795,337 $ 145,337 SOUTHLAKE CRIME CONTROL AND PREVENTION DISTRICT 1/2% SALES TAX REPORT 2014 Collected Budget Balance Budget to Date Balance Percent $ 5,650,000 $1,692,672 (3,957,328) - 70.04% Fiscal Year Percent Fiscal Year Percent Fiscal Year Percent 2012 Increase/ 2013 Increase/ 2014 Increase/ MONTH Actual (Decrease) Actual (Decrease) Actual (Decrease) October $319,722 -4.32% $413,388 29.30% $478,241 15.69% November 390,919 3.90% 410,740 5.07% 487,762 18.75% December 600,491 11.94% 624,361 3.98% 726,669 16.39% January 336,540 -7.21% 415,721 23.53% - 100.00% February 342,427 14.40% 399,585 16.69% - 100.00% March 456,232 19.19% 459,901 0.80% - 100.00% April 406,820 12.05% 454,612 11.75% - 100.00% May 402,611 3.71% 489,002 21.46% - 100.00% June 447,319 6.14% 537,558 20.17% - 100.00% July 432,748 19.43% 451,139 4.25% - 100.00% August 381,654 19.70% 445,542 16.74% - 100.00% September 453,470 14.58% 469,916 3.63% - 100.00% TOTAL $4,970,953 $5,571,465 $1,692,672 Three Year Revenue Comparison by Month $800,000 $700,000k $600,000 $500,000 i r i -/ I - $400,000 Il ; $200,000 ' ® II I ■ t i l ■ $100,000 , i ill 0 ' ii o� °te e� vs) e� xa c ,g) � °a a e,.. P ,4, ° tee � J\ � v K s> ) ,.0 O ° J Off � (<0 P � Q '�e 5 •Fiscal Year 2012 Actual EFiscal Year 2013 Actual Fiscal Year 2014 Actual Actual Budget Actual Estimated (budget -est.) % MONTH 2013 2014 2014 2014 Difference Change October $ 413,388 $ 415,044 $ 478,241 $ 478,241 $ 63,197 15.23% November $ 410,740 $ 446,431 $ 487,762 $ 487,762 $ 41,331 9.26% December $ 624,361 $ 656,365 $ 726,669 $ 726,669 $ 70,304 10.71% January $ 415,721 $ 406,008 $ - $ 406,008 $ - 0.00% February $ 399,585 $ 337,097 $ - $ 337,097 $ - 0.00% March $ 459,901 $ 555,735 $ - $ 555,735 $ - 0.00% April $ 454,612 $ 438,893 $ - $ 438,893 $ - 0.00% May $ 489,002 $ 426,734 $ - $ 426,734 $ - 0.00% June $ 537,558 $ 558,268 $ - $ 558,268 $ - 0.00% July $ 451,139 $ 429,843 $ - $ 429,843 $ - 0.00% August $ 445,542 $ 439,399 $ - $ 439,399 $ - 0.00% September $ 469,916 $ 540,183 $ - $ 540,183 $ - 0.00% TOTAL $ 5,571,465 $ 5,650,000 $ 1,692,672 $ 5,824,832 $ 174,832 1 FirstSouthwest4010 Investment Portfolio APlainsCapital Company .., Summary City of Southlake CITY OF SOUTHLA1KE For the Quarter Ended December 31, 2013 Prepared by FirstSouthwest Asset Management I gt ; FirstSouthwest Table of Contents 1 Market Recap A PlairisCapital Company MARKET RECAP: Report Name The major economic data released during December has been unequivocally strong. The month kicked off with the ISM manufacturing index rising for a sixth straight month and climbing to its Certification Page highest level in 31 months at 57.3. Reinforcing the strong manufacturing picture, industrial production climbed 1.1 %, while capacity utilization jumped to 79 %. A better than forecast Executive Summary employment report showed 203k jobs were created in November. Revisions to prior months Benchmark Comparison added another 8k to the tally and brought the 2013 monthly average up to 189k. The unemployment rate fell to a five -year low at 7% and for once the decline was not the result of a Detail of Security Holdings decline in the participation rate, which actually increased slightly from a 35 -year low of 62.8% to 63.0 %. Two upward revisions have brought third quarter GDP up from an originally reported Change in Value 2.8% to an impressive 4.1 %, Retail sales grew the most in five months, advancing by 0.7% in November following an upwardly revised 0.6% gain in October. On a year- over -year basis retail Earned Income sales are up 4.7 %. Inflation remains well contained as the consumer price index (CPI) was Investment Transactions unchanged in November and is up a scant 1.2% year- over -year. Excluding food and energy, the core CPI was up 0.2% last month and 1.7% year- over -year. November housing starts rose to Amortization and Accretion the highest level in nearly six years, increasing by 22.7% to a 1.09 million unit annualized pace. Existing home sales were the lone detractor, falling for the second straight month with a 4.3% Projected Fixed Income Cash Flows decline in November. The Fed, taking all of this data into account, decided at last to announce the much anticipated tapering of their quantitative easing program. The plan is to reduce its monthly purchases by $10 billion, split evenly between Treasury and MBS purchases. Any additional reductions will likely come in "measured steps." This suggests a very gradual tapering process, which markets are interpreting to mean something on the order of a further $10 billion reduction every month or two, with QE expected to conclude entirely by late -2014. The Fed also attempted to reinforce its "tapering is not tightening" message by saying it will be appropriate to maintain the current overnight funds target "well past the time that the unemployment rate declines below 6.50% percent, especially if projected inflation continues to run below the Committee's 2.0% percent longer -run goal." Stock markets cheered the news, with the Dow shooting up nearly 300 points following the announcement, then ratcheting higher to close 2013 at a record. The initial reaction in fixed income markets was muted, but yields have since risen sharply, particularly in the intermediate sector of the curve. For the month, yields on the 2 -, 3 -, 5 -, and 7 -year Treasury notes are higher by 10, 22, 37, and 36 basis points respectively. Page 2 of 13 City of Southlake FirstSouthwest Investment Officers' Certification A PlainsCapital Company For the Quarter Ended December 31, 2013 This report is prepared for the City of Southlake (the "Entity ") in accordance with Chapter 2256 of the Texas Public Funds Investment Act ( "PFIA "). Section 2256.023(a) of the PFIA states that: "Not less than quarterly, the investment officer shall prepare and submit to the governing body of the entity a written report of the investment transactions for all funds covered by this chapter for the preceding reporting period." This report is signed by the Entity's investment officers and includes the disclosures required in the PFIA. To the extent possible, market prices have been obtained from independent pricing sources. The investment portfolio complied with the PFIA and the Entity's approved Investment Policy and Strategy throughout the period. All investment transactions made in the portfolio during this period were made on behalf of the Entity and were made in full compliance with the PFIA and the approved Investment Policy. Officer Names and Titles: r • L_AA ' tc, / ∎l Cl' 1 Page 3 of 13 jiillP City of South lake FirstSouthwest Executive Summary A PtainsCapitat company As of 12/31/13 Account Summary Allocation by Security Type Beginning Values as of 09130113 Ending Values as of 12/31/13 Par Value 115,393,575.54 115,496,563.26 4W, Market Value 115,098,249.24 115,163,527.86 Book Value 115,514,504.03 115,603,668.01 ■ AGCY CALL 38% • AGCY STEP 4% Unrealized Gain / Loss (416,254.79) (440,140.15) • CD 7% Market Value % 99.64% 99.62% ■ cP LGIP 4% ■ 41% MUNICIPAL 5% Total: 100% Weighted Avg. YTW 0.413% 0.395% Weighted Avg. YTM 0.449% 0.431% Allocation by Issuer Maturity Distribution % Credit Quality 45% 41% ao% 35% 30% • FNMA 32% • TEXSTAR 25% 25% 24% - • TEXPOOL 16% • A -1 3% • FHLB 9% 20% iii fa A -1+ 2% • COMERICA 7% 1 r% • AAA 89% TX TRANS 5% 15% • Collateralized 7% / • Other Issuers 7% Total: 100% Total: 100% 10% 9% All 5% . 3% 4% 0% _ Overnight 2 -90 6 -12 1 -2 2 -3 3 -4 4. Days Months Years Years Years Years Weighted Average Days to Maturity: 525 Print Date: 2/4/2014 Print Time: 3:53 pm Page 1 of 1 Page 4 of 13 f410 City of Southlake Benchmark Comparison FirstSouthwest As of 12/31/2013 A Plains Capital Company 0.60% 0.50% • 0.40% 0.30% 0.20% INININ�i 0.10% - - -- - - 0.00% Jul -12 Aug -12 Sep -12 Oct -12 Nov -12 Dec -12 Jan -13 Feb -13 Mar -13 Apr -13 May -13 Jun -13 Jul -13 Aug -13 Sep -13 Oct -13 Nov -13 Dec -13 -f - 3 -MO CMT 6 -MO CMT -f 1 -YR CMT TEXPOOL f City of Southlake Note 1: CMT stands for Constant Maturity Treasury. This data is published in Federal Reserve Statistical Release H.15 and represents an average of all actively traded Treasury securities having that time remaining until maturity. This is a standard industry benchmark for Treasury securities. The CMT benchmarks are moving averages. The 3 -month CMT is the daily average for the previous 3 months, the 6 -month CMT Is the daily average for the previous 6 months, and the 1 -year and 2 -year CMT's are the daily averages for the previous 12- months. Note 2: Benchmark data for TexPool is the monthly average yield. Print Date: 2/4 /2014 Print Time: 3:54 pm Page 1 of I Page 5 of 13 jra) City of Southlake FirstSouthwest Detail of Security Holdings A PlainsCapital Company As of 12/31/2013 Settle Purch Mkt Days Days CUSIP Date Sec. Type Sec. Description CPN Mty Date Next Call Call Type Par Value Price Orlg Cost Book Value Price Market Value to Mty to Call YTM YTW General Operating TEXPOOL LGIP TexPool 14,566,764.40 100.000 14,566,764.40 14,566,764.40 100.000 14,566,764.40 1 0.037 0.037 TEXSTAR LGIP TexSTAR 26,640,725.32 100.000 26,640,725.32 26,640,725.32 100.000 26,640,725.32 1 0.036 0.036 89233HAA2 04/16/13 CP - DISC Toyota Mtr Cr 01/10/14 2,000,000.00 99.798 1,995,965.00 1,999,865.00 99.998 1,999,962.00 10 0.271 0.271 3024A7B41 05/10/13 CP - DISC FCAR Owner Trust II 02/04/14 3,000,000.00 99.723 2,991,675.00 2,998,951.68 99.990 2,999,709.00 35 0.371 0.371 CD -0403 -4 08/26/13 CD -IAM ComericaBkCD 0.150 02/24/14 5,081,458.44 100.000 5,081,458.44 5,081,458.44 100.000 5,081,458.44 55 0.150 0.150 CD- 7910 -1 03/15/13 CD Comerica Bk CD 0.360 09/15/14 3,039,623.11 100.000 3,039,623.11 3,039,623.11 100.000 3,039,623.11 258 0.361 0.361 3135G0QR7 10/30/12 AGCY CALL FNMA 0.460 10/30/15 01/30/14 QRTLY 2,500,000.00 99.960 2,499,000.00 2,499,388.18 99.990 2,499,750.00 668 30 0.473 0.473 3135G0US0 02126/13 AGCY CALL FNMA 0.550 02/26/16 02/26/14 ONETIME 3,000,000.00 99.970 2,999,100.00 2,999,352.69 99.970 2,999,100.00 787 57 0.560 0.560 8827226Y2 12/1 9/1 2 MUNICIPAL TX Trans Comm Hwy !met 1.500 04/01/16 5,650,000.00 103.023 5,820,799.50 5,767,369.71 101.234 5,719,743.60 822 0.569 0.569 GO 3134G42L1 04/29/13 AGCY CALL FHLMC 0.500 04/29/16 01/29/14 QRTLY 3,000,000.00 99.995 2,999,850.00 2,999,883.42 99.680 2,990,400.00 850 29 0.502 0.502 3135O0ON6 10/29/12 AGCY CALL FNMA 0.550 04/29/16 01/29/14 QRTLY 5,000,000.00 99.875 4,993,750.00 4,995,829.30 99.870 4,993,500.00 850 29 0.586 0.586 3135GOWG4 04/29/13 AGCY CALL FNMA 0.500 04/29/16 01/29/14 QRTLY 3,000,000.00 99.990 2,999,700.00 2,999,766.87 99.630 2,988,900.00 850 29 0.503 0.503 3135GORZ8 11/27/12 AGCY CALL FNMA 0.550 05/26/16 11/26/14 ONETIME 3,000,000.00 99.950 2,998,500.00 2,998,966.35 99.730 2,991,900.00 877 330 0.564 0.564 3135G0SR5 12/27/12 AGCY CALL FNMA 0.560 06/27/16 03/27/14 QRTLY 5,000,000.00 99.950 4,997,500.00 4,998,217.10 99.660 4,983,000.00 909 86 0.574 0.574 3136FTH36 09/26/12 AGCY STEP FNMA 1.000 02/14/17 02/14/14 QRTLY 5,000,000.00 100.688 5,034,400.00 5,002,977.30 100.090 5,004,500.00 1,141 45 1.314 0.500 3135GOPL1 02121/13 AGCY CALL FNMA 1.050 10/04/17 01/04/14 MTHLY 5,000,000.00 99.915 4,995,750.00 4,996,537.15 98.780 4,939,000.00 1,373 4 1.069 1.069 3133813R4 01/1 7/13 AGCY CALL FHLB 1.000 11/09/17 01/09/14 MTHLY 10,000,000.00 100.000 10,000,000.00 10,000,000.00 98.020 9,802,000.00 1,409 9 1.000 0.998 313500UX9 03 /1 2/13 AGCY CALL FNMA 1.200 02/28/18 02/28/14 QRTLY 5,000,000.00 100.000 5,000,000.00 5,000,000.00 98.110 4,905,500.00 1,520 59 1,200 1.199 Total for General Operating 109,478,571.27 100.164 109,654,560.77 109,585,676.02 99.697 109,145,535.87 555 0.452 0.415 Parks Development Corporation TEXPOOL LGIP TexPool 4,003,414.60 100.000 4,003,414.60 4,003,414.60 100.000 4,003,414.60 1 0.037 0.037 TEXSTAR LGIP TexSTAR 2,014,577.39 100.000 2,014,577.39 2,014,577.39 100.000 2,014,577.39 1 0.036 0.036 Total for Parks Development Corporation 6,017,991.99 100.000 6,017,991.99 6,017,991.99 100.000 6,017,991.99 1 0.037 0.037 Total for City of Southlake 115,496,563.26 100.155 115,672,552.76 115,603,668.01 99.713 115,163,527.86 526 0.431 0.395 Print Date: 2/4 /2014 Print Time: 3:54 pm Page 1 of 1 Page 6 of 13 4 °411' City of Southlake Change in Value FirstSouthwest From 09/30/2013 to 12/31/2013 A PlainsCapital Company CUSP Security Type Security Description 09130/13 Cost of Maturities I Amortization 1 Realized 12/31/13 09/30113 12/31/13 Change in Book Value Purchases Calls I Sales Accretion Gainl(Loss) Book Value Market Value Market Value Mkt Value General Operating TEXPOOL LGIP TexPool 8,950,516.23 5,616,248.17 0.00 0.00 0.00 14,566,764.40 8,950,516.23 14,566,764.40 5,616,248.17 TEXSTAR LGIP TexSTAR 27,138,049.36 1,694.75 (499,018.79) 0.00 0.00 26,640,725.32 27,138,049.36 26,640,725.32 (497,324.04) CD- 3414 -3 CD Comerica Bk CD 0.420 10/03113 5,019,307.78 0.00 (5,019,307.78) 0.00 0.00 0.00 5,019,307.78 0.00 (5,019,307.78) 89233HAA2 CP - DISC Toyota MtrCr 0.000 01/10/14 1,998,485.00 0.00 0.00 1,380.00 0.00 1,999,865.00 1,998,980.00 1,999,962.00 982.00 3024A7841 CP - DISC FCAR Owner Trust II 0.000 02/04/14 2,996,115.00 0.00 0.00 2,836.68 0.00 2,998,951.68 2,997,144.00 2,999,709.00 2,565.00 CD- 0403 -4 CD-IAM Comerica Bk CD 0.150 02/24/14 5,081,458.44 0.00 0.00 0.00 0.00 5,081,458.44 5,081,458.44 5,081,458.44 0.00 CD- 7910 -1 CD Comerica Bk CD 0.360 09/15/14 3,036,896.58 2,726.53 0.00 0.00 0.00 3,039,623.11 3,036,896.58 3,039,623.11 2,726.53 3135G00R7 AGCY CALL FNMA 0.460 10/30/15 2,499,305.00 0.00 0.00 83.18 0.00 2,499,388.18 2,498,500.00 2,499,750.00 1,250.00 3135000S0 AGCY CALL FNMA 0.550 02/26/16 2,999,277.99 0.00 0.00 74.70 0.00 2,999,352.69 2,995,200.00 2,999,100.00 3,900.00 8827226Y2 MUNICIPAL TX Trans Comm Hwy lmpt GO 1.500 04/01) 5,780,328.55 0.00 0.00 (12,958.84) 0.00 5,767,369.71 5,740,049.70 5,719,743.60 (20,306.10) 3134G42L1 AGCY CALL FHLMC 0500 04/29/16 2,999,870.97 0.00 0.00 12.45 0.00 2,999,883.42 2,985,600.00 2990,400.00 4,800.00 3135G0QN6 AGCY CALL FNMA 0.550 04/29/16 4,995,384.60 0.00 0.00 444.70 0.00 4,995,829.30 4,987,000.00 4,993,500.00 6,500.00 3135G0WG4 AGCY CALL FNMA 0.500 04/29/16 2,999,741.97 0.00 0.00 24.90 0.00 2,999,766.87 2,984,100.00 2,988,900.00 4,800.00 3135G0R28 AGCY CALL FNMA 0.550 05/26/16 2,998,859.61 0.00 0.00 106.74 0.00 2,998,966.35 2,987,100.00 2,991,900.00 4,800.00 3135G0SR5 AGCY CALL FNMA 0.560 06/27/16 4,998,039.50 0.00 0.00 177.60 0.00 4,998,217.10 4,975,000.00 4,983,000.00 8,000.00 3136FTH36 AGCY STEP FNMA 1.000 02/14/17 5,009,208.90 0.00 0.00 (6,231.60) 0.00 5,002,977.30 5,012,000.00 5,004,500.00 (7,500.00) 3135G0PL1 AGCY CALL FNMA 1.050 10/04/17 4,996,311.40 0.00 0.00 225.75 0.00 4,996,537.15 4,944,500.00 4,939,000.00 (5,500.00) 3133813R4 AGCY CALL FHLB 1.000 11/09/17 10,000,000.00 0.00 0.00 0.00 0.00 10,000,000.00 9,822,000.00 9,802,000.00 (20,000.00) 3135G0UX9 AGCY CALL FNMA 1.200 02/28/18 5,000,000.00 0.00 0.00 0.00 0.00 5,000,000.00 4,927,500.00 4,905,500.00 (22,000.00) Total for General Operating 109,497,156.88 5,620,669.45 (5,518,326.57) (13,823.74) 0.00 109,585,676.02 109,080,902.09 109,145,535.87 64,633.78 Parks Development Corporation TEXPOOL LGIP TexPool 4,002,972.13 442.47 0.00 0.00 0.00 4,003,414.60 4,002,972.13 4,003,414.60 442.47 TEXSTAR LGIP TexSTAR 2,014,375.02 202.37 0.00 0.00 0.00 2,014,577.39 2,014,375.02 2,014,577.39 202.37 Total for Parks Development Corporation 6,017,347.15 644.84 0.00 0.00 0.00 6,017,991.99 6,017,347.15 6,017,991.99 644.84 Total for City of Southlake 115,514,504.03 5,621,314.29 (5.518,326.57) (13,823.74) 0.00 115,603,668.01 115,098,249.24 115,163,527.86 65,278.62 Print Date: 2/4/2014 Print Time: 3:54 pm Page 1 of 1 Page 7 of 13 ji:4110 City of Southlake FirstSouthwest Earned Income A PlainaCapilCal Company From 09/30/2013 to 12/31/2013 CUSIP Security Type Security Description Beg. Accrued Interest Earned Interest Recd / Interest Purchased Ending Accrued Disc Accrl Net Income Sold I Matured Prem Amort General Operating TEXPOOL LGIP TexPool 0.00 1,570.59 1,570.59 0.00 0.00 0.00 1,570.59 TEXSTAR LGIP TexSTAR 0.00 2,675.96 2,675.96 0.00 0.00 0.00 2,675.96 CD- 3414 -3 CD Comerica Bk CD 0.420 10/03/13 1,617.18 115.51 1,732.69 0.00 0.00 0.00 115.51 89233HAA2 CP - DISC Toyota Mtr Cr 0.000 01/10/14 0.00 0.00 0.00 0.00 0.00 1,380.00 1,380.00 3024A7B41 CP - DISC FCAR Owner Trust II 0.000 02/04/14 0.00 0.00 0.00 0.00 0.00 2,836.68 2,836.68 CD- 0403 -4 CD -IAM Comerica Bk CD 0.150 02/24/14 751.78 1,921.21 0.00 0.00 2,672.99 0.00 1,921.21 CD- 7910 -1 CD Comerica Bk CD 0.360 09/15/14 479.25 2,756.94 2,726.53 0.00 509.66 0.00 2,756.94 3135G0QR7 AGCY CALL FNMA 0.460 10/30/15 4,823.61 2,875.00 5,750.00 0.00 1,948.61 83.18 2,958.18 3135G0US0 AGCY CALL FNMA 0.550 02/26/16 1,604.17 4,125.00 0.00 0.00 5,729.17 74.70 4,199.70 8827226Y2 MUNICIPAL TX Trans Comm H' Impt GO 1.500 04/01/16 42,375.00 21,187.50 42,375.00 0.00 21,187.50 (12,958.84) 8,228.66 3134G42L1 AGCY CALL FHLMC 0.500 04/29/16 6,333.33 3,750.00 7,500.00 0.00 2,583.33 12.45 3,762.45 3135G0QN6 AGCY CALL FNMA 0.550 04/29/16 11,611.11 6,875.00 13,750.00 0.00 4,736.11 444.70 7,319.70 3135G0WG4 AGCY CALL FNMA 0.500 04/29/16 6,333.33 3,750.00 7,500.00 0.00 2,583.33 24.90 3,774.90 3135G0RZ8 AGCY CALL FNMA 0.550 05/26/16 5,729.17 4,125.00 8,250.00 0.00 1,604.17 106.74 4,231.74 3135G0SR5 AGCY CALL FNMA 0.560 06/27/16 7,311.11 7,000.00 14,000.00 0.00 311.11 177.60 7,177.60 3136FTH36 AGCY STEP FNMA 1.000 02/14/17 6,527.78 12,500.00 0.00 0.00 19,027.78 (6,231.60) 6,268.40 3135GOPL1 AGCY CALL FNMA 1.050 10/04/17 25,812.50 13,125.00 26,250.00 0.00 12,687.50 225.75 13,350.75 3133813R4 AGCY CALL FHLB 1.000 11/09/17 39,444.44 25,000.00 50,000.00 0.00 14,444.44 0.00 25,000.00 3135000X9 AGCY CALL FNMA 1.200 02/28/18 5,500.00 15,000.00 0.00 0.00 20,500.00 0.00 15,000.00 Total for General Operating 166,253.76 128,352.71 184,080.77 0.00 110,525.70 (13,823.74) 114,528.97 Parks Development Corporation TEXPOOL LGIP TexPool 0.00 442.47 442.47 0.00 0.00 0.00 442.47 TEXSTAR LGIP TexSTAR 0.00 202.37 202.37 0.00 0.00 0.00 202.37 Total for Parks Development Corporation 0.00 644.84 644.84 0.00 0.00 0.00 644.84 Total for City of Southlake 166,253.76 128,997.55 184,725.61 0.00 110,525.70 (13,823.74) 115.173.81 Print Date: 2/4 /2014 Print Time: 3:54 pm Page 1 of 1 Page 8 of 13 4 :31? City of Southlake First Southwest Investment Transactions A PlainsCapital Company From 10/01/2013 to 12/31/2013 Trade Settle Security Principal Int Purchased I Realized Date Date CUSIP Type Security Description Coupon Mty Date Call Date Par Value Price Amount Received Total Amount Gain 1 Loss YTM YTW General Operating Maturities 10/03/13 10/03/13 CD- 3414 -3 CD Comerica Bk CD 0.420 10/03/13 5,019,307.78 100.000 5,019,307.78 0.00 5,019,307.78 0.420 Total for: Maturities 5,019,307.78 5,019,307.78 0.00 5,019,307.78 0.420 Income Payments 10/01/13 10/01/13 8827226Y2 MUNICIPAL TX Trans Comm Hwy Impt C 1.500 04/01/16 0.00 42,375.00 42,375.00 10/03/13 10/03/13 CD- 3414 -3 CD Comerica Bk CD 0.420 10/03/13 0.00 1,732.69 1,732.69 10/04/13 10/04/13 3135G0PL1 AGCY CALL FNMA 1.050 10/04/17 0.00 26,250.00 26,250.00 10/15/13 10/15/13 CD- 7910 -1 CD Comerica Bk CD 0.360 09/15/14 0.00 898.59 898.59 10/29/13 10/29/13 3134G42L1 AGCY CALL FHLMC 0.500 04/29/16 0.00 7,500.00 7,500.00 10/29/13 10/29/13 3135G0QN6 AGCY CALL FNMA 0.550 04/29/16 0.00 13,750.00 13,750.00 10/29/13 10/29/13 3135G0WG4 AGCY CALL FNMA 0.500 04/29/16 0.00 7,500.00 7,500.00 10/30/13 10/30/13 3135G0QR7 AGCY CALL FNMA 0.460 10/30/15 0.00 5,750.00 5,750.00 11/10/13 11/09/13 3133813R4 AGCY CALL FHLB 1.000 11/09/17 0.00 50,000.00 50,000.00 11/15/13 11/15/13 CD- 7910 -1 CD Comerica Bk CD 0.360 09/15/14 0.00 928.81 928.81 11/26/13 11/26/13 3135G0RZ8 AGCY CALL FNMA 0.550 05/26/16 0.00 8,250.00 8,250.00 12/15/13 12/15/13 CD- 7910 -1 CD Comerica Bk CD 0.360 09/15/14 0.00 899.13 899.13 12/27/13 12/27/13 3135G0SR5 AGCY CALL FNMA 0.560 06/27/16 0.00 14,000.00 14,000.00 Total for: Income Payments 0.00 179,834.22 179,834.22 Capitalized Interest 10/15/13 10/15/13 CD- 7910 -1 CD Comerica Bk CD 0.360 09/15/14 898.59 100.000 898.59 0.00 898.59 11/1 5/13 11/15/13 CD- 7910 -1 CD Comerica BkCD 0.360 09/15/14 928.81 100.000 928.81 0.00 928.81 12/1 5/1 3 12/15/13 CD- 7910 -1 CD Comenca Bk CD 0.360 09/15/14 899.13 100.000 899.13 0.00 899.13 Total for: Capitalized Interest 2,726.53 2,726.53 0.00 2,726,53 Print Date: 2/4/2014 Print lime: 3:54 pm Page 1 of 2 Page 9 of 13 40 City of Southlake FirstSouthwest Investment Transactions A PlainsCapital Company. From 10/01/2013 to 12/31/2013 Trade Settle Security Principal Int Purchased 1 Realized Date Date CUSIP Type Security Description Coupon Mty Date Call Date Par Value Price Amount Received Total Amount Gain / Loss YTM YTW Total for All Portfolios Transaction Type Quantity Total Amount Realized GIL YTM YTW Total Maturities 5,019,307.78 5,019,307.78 0.420 Total Income Payments 0.00 179,834.22 Total Capitalized Interest 2,726.53 2,726.53 Print Date: 2/4 /2014 Print Time: 3:54 pm Page 2 of 2 Page 10 of 13 jat. City of Southlake FirstSouthwest Amortization and Accretion A Plainscapital Company From 09/30/2013 to 12/31/2013 Orig AmrtiAccr Total AmrtiAccr Remaining CUSIP Settle Date Security Type Security Description Next Call Date Purchase Qty Price Original Cost for Period Since Purch Disc I Pram Book Value General Operating CD- 3414 -3 10/03/12 CD Comerica Bk CD 0.420 10/03/13 0.00 100.000 0.00 0.00 0.00 0.00 0.00 89233HAA2 04/16/13 CP - DISC Toyota Mtr Cr 0.000 01 /10/14 2,000,000.00 99.798 1,995,965.00 1,380.00 3,900.00 135.00 1,999,865.00 3024A7B41 05110/13 CP - DISC FCAR Owner Trust II 0.000 02/04/14 3,000,000.00 99.723 2,991,675.00 2,836.68 7,276.68 1,048.32 2,998,951.68 CD- 0403 -4 08/26/13 CD -IAM Comedca Bk CD 0.150 02/24/14 5,081,458.44 100.000 5,081,458.44 0.00 0.00 0.00 5,081,458.44 CD- 7910 -1 03/15/13 CD Comedca Bk CD 0.360 09/15/14 3,039,623.11 100.000 3,039,623.11 0.00 0.00 0.00 3,039,623.11 3135G00R7 10/30/12 AGCY CALL FNMA 0.460 10/30/15 10/30/13 2,500,000.00 99.960 2,499,000.00 8318 388.18 611.82 2,499,388.18 3135G0US0 02,26/13 AGCY CALL FNMA 0.550 02/26/16 02/26/14 3,000,000.00 99.970 2,999,100.00 74.70 252.69 647.31 2,999,352.69 8827226Y2 12/19/12 MUNICIPAL TX Trans Comm Hwy lmpt GO 1.500 04/01/16 5,650,000.00 103.023 5,820,799.50 (12,958.84) (53,429.79) (117,369.71) 5,767,369.71 3134G42L1 04/29/13 AGCY CALL FHLMC 0.500 04/29/16 01/29/14 3,000,000.00 99.995 2,999,850.00 12.45 33.42 116.58 2,999,883.42 3135000N6 10/29/12 AGCY CALL FNMA 0.550 04/29/16 10/29/13 5,000,000.00 99.875 4,993,750.00 444.70 2,079.30 4,170.70 4,995,829.30 3135G0WG4 04/29/13 AGCY CALL FNMA 0.500 04/29/16 01/29/14 3,000,000.00 99.990 2,999,700.00 24.90 66.87 233.13 2,999,766.87 3135G0RZ8 11127/12 AGCY CALL FNMA 0.550 05/26/16 11/26/14 3,000,000.00 99.950 2,998,500.00 106.74 466.35 1,033.65 2,998,966.35 3135G0SR5 12127/12 AGCY CALL FNMA 0.560 06/27/16 03/27/14 5,000,000.00 99.950 4,997,500.00 177.60 717.10 1,782.90 4,998,217.10 3136FTH36 09/26/12 AGCY STEP FNMA 1.000 02/14/17 02/14/14 5,000,000.00 100.688 5,034,400.00 (6,231.60) (31,422.70) (2,977.30) 5,002,977.30 3135GOPL1 02/21/13 AGCY CALL FNMA 1.050 10/04/17 01/04/14 5,000,000.00 99.915 4,995,750.00 225.75 787.15 3,462.85 4,996,537.15 3133813R4 01/17/13 AGCY CALL FHLB 1.000 11/09/17 10/09/13 10,000,000.00 100.000 10,000,000.00 0.00 0.00 0.00 10,000,000.00 3135G0UX9 03/12/13 AGCY CALL FNMA 1.200 02/28/18 02/28/14 5,000,000.00 100.000 5,000,000.00 0.00 0.00 0.00 5,000,000.00 Total for General Operating 68,271,081.55 68,447,071.05 (13,823.74) (68,884.75) (107,104.75) 68,378,186.30 Total for City of Southlake 68,271,081.55 68,447,071.05 (13,823.74) (68,884.75) 1107,104.75) 68,378,186.30 Print Date: 2/4/2014 Print Time: 3:55 pm Page 1 of 1 Page 11 of 13 jM City of Southlake FirstSouthwest Projected as Flows A PlainsCafaltal Company Cash Flows for next 180 days from 12/31/2013 CUSIP Security Type Security Description Pay Date Interest Principal Total Amount General Operating 89233HAA2 CP - DISC Toyota Mtr Cr 0.000 01/10/14 01/10/14 0.00 2,000,000.00 2,000,000.00 CD- 7910 -1 CD Comerica Bk CD 0.360 09/15/14 01/15/14 929.37 0.00 929.37 3024A7B41 CP - DISC FCAR Owner Trust II 0.000 02/04/14 02/04/14 0.00 3,000,000.00 3,000,000.00 CD- 7910 -1 CD Comerica Bk CD 0.360 09/15/14 02/15/14 929.37 0.00 929.37 CD- 0403 -4 CD-IAM Comerica Bk CD 0.150 02/24/14 02/24/14 3,800.65 5,081,458.44 5,085,259.09 3135G0U50 AGCY CALL FNMA 0.550 02/26/16 02/26/14 8,250.00 0.00 8,250.00 3135G0UX9 AGCY CALL FNMA 1.200 02/28/18 02/28/14 30,000.00 0.00 30,000.00 CD- 7910 -1 CD Comerica Bk CD 0.360 09/15/14 03/15/14 839.43 0.00 839.43 8827226Y2 MUNICIPAL TX Trans Comm Hwy Impt GO 1.500 04/01/16 04/01/14 42,375.00 0.00 42,375.00 3135G0PL1 AGCY CALL FNMA 1.050 10/04/17 04/04/14 26,250.00 0.00 26,250.00 CD- 7910 -1 CD Comerica Bk CD 0.360 09/15/14 04/15/14 929.37 0.00 929.37 3134G42L1 AGCY CALL FHLMC 0.500 04/29/16 04/29/14 7,500.00 0.00 7,500.00 3135GOQN6 AGCY CALL FNMA 0.550 04/29/16 04/29/14 13,750.00 0.00 13,750.00 3135GOWG4 AGCY CALL FNMA 0.500 04/29/16 04/29/14 7,500.00 0.00 7,500.00 3135G0QR7 AGCY CALL FNMA 0.460 10/30/15 04/30/14 5,750.00 0.00 5,750.00 3133813R4 AGCY CALL FHLB 1.000 11/09/17 05/09/14 50,000.00 0.00 50,000.00 CD- 7910 -1 CD Comerica Bk CD 0.360 09/15/14 05/15/14 899.39 0.00 899.39 3135G0R28 AGCY CALL FNMA 0.550 05/26/16 05/26/14 8,250.00 0.00 8,250.00 CD- 7910 -1 CD Comerica Bk CD 0.360 09/15/14 06/15/14 929.37 0.00 929.37 3135G0SR5 AGCY CALL FNMA 0.560 06/27/16 06/27/14 14,000.00 0.00 14,000.00 Total for General Operating 222,881.95 10,081,458.44 10,304,340.39 Print Date: 2/4/2014 Print Time: 3:55 pm Page 1 of 2 Page 12 of 13 410 City of Southlake FirstSouthwest Projected Cash Flows A PlainsCapital Company Cash Flows for next 180 days from 12/31/2013 CUSIP Security Type Security Description Pay Date interest Principal Total Amount Total for All Portfolios January 2014 929.37 2,000,000.00 2,000,929.37 February 2014 42,980.02 8,081,458.44 8,124,438.46 March 2014 839.43 0.00 839.43 April 2014 104,054.37 0.00 104,054.37 May 2014 59,149.39 0.00 59,149.39 June 2014 14,929.37 0.00 14,929.37 Total Projected Cash Flows for City of Southlake 222,881.95 10,081,458.44 10,304,340.39 Print Date: 2/412014 Print Time: 3:55 pm Page 2 of 2 Page 13 of 13 - - SOUTHLAKE TEXAS CAPITAL PROJECTS UPDATE December 2013 ACTIVE CITY CONSTRUCTION PROJECTS • 8 -inch Water Line connector from Lake Dr /Burney Ln to Palo Duro /Lonesome Dove This project involves connecting an 8 -inch water line at Lake Dr. and Burney Ln. to the existing 6 -inch waterline at Palo Duro and Lonesome Dove by installing 1600 feet of 8 -inch PVC. The new line will provide increased water pressure and flow, and will establish a loop for fire protection to the Dove Estates Subdivision. This section of water line is located on the Southlake 2030 Master Water Plan. Current funding $250,000 Expenditures to date 13,493 Available balance $236,507 • Brumlow Avenue Widening from Continental Blvd. to SH 26 The Brumlow Ave widening project will expand the existing road to four divided lanes in order to accommodate the TxDOT construction of dual left turns for SH 26 to north bound Brumlow; as well as the addition of the north bound thru lanes for Pool Road into Southlake along Brumlow Avenue. The project is currently under design and engineering plans are in the final stages. Negotiations are ongoing with property owners for ROW. Current funding $145,000 Expenditures to date 70,979 Available balance $ 74,021 • Citywide Pavement Rehabilitation (PMA) The PMA is an on -going program which consists of the major repair and /or rehabilitation of local streets throughout the City of Southlake to improve pavement condition and rideability after the completion of neighborhood utility projects. One - third of the City's streets are surveyed annually with the Pavement Management Application (PMA) software designed by Stantec, which generates a pavement quality report. The PMA scores each street on the surface condition of the road (SDI), the riding quality of pavement (RCI), and the structural adequacy of the pavement (SAO. These scores are then averaged to calculate the Pavement Quality Index (PQI) for the roadway. The overall PQI for the City is the average of all the road's PQIs. The Department has established a minimum overall PQI of 7.8 out of a possible 10.0. The FY 2013 score is 8.3. Innovation 0 Integrity 0 Accountability 0 Commitment to Excellence 0 Teamwork Page 1 of 8 CITY OF SOUTHLAKE TEXAS • Citywide Pavement Rehabilitation (PMA), continued Current funding $2,843,923 Expenditures to date 1,882,099 Available balance $ 961,824 • FM 1709 at Watermere Traffic Signal This project will install a traffic signal at the intersection of Watermere Drive /Jellico West and FM 1709 to better manage traffic flow through the intersection and facilitate access to FM 1709 (Southlake Blvd.). TxDOT construction anticipated to be completed early 2014. Current funding $250,000 Expenditures to date 261,626 Available balance $- 11,626 • FM1938 The FM1938 project involves paving, utility, and drainage improvements along the existing Randol Mill Road from FM1709 to SH114 to four lanes divided. Construction of FM1938 will be in two phases. Construction of Phase I from the bend in Randol Mill Road to SH114 through Westlake is complete. Phase II from the intersection of FM1709 and Randol Mill Road /Davis Blvd. to the bend in Randol Mill in Southlake is nearing 100% design. The Public Hearing on the entire project was held November 6, 2008 at the Cross Timbers Community Church in Keller, TX. Phase I of the project was awarded in August 2009. Phase II right of way and easement acquisition by Tarrant County nearing completion. Franchise utilities (gas, electric, cable, telephone, etc.) have begun relocating. Funding and construction are scheduled for FY 2015. Roadway Roadway Impact Utility Current funding $2,566,449 $660,000 $2,558,127 Expenditures to date 1,178,303 628,964 143,459 Available balance $1,388,146 $ 31,036 $2,414,668 Project Total Available Balance: $3,833,850 • FM1938 Waterline and Sewer Relocation Project for Phase II Relocation of City water and sanitary sewer lines to begin Fall 2013 with an anticipated completion of Summer 2014. Innovation 0 Integrity 0 Accountability 0 Commitment to Excellence 0 Teamwork Page 2 of 8 . h ✓ . CITY Y F S OUTH LAKE TEXAS • FM1938 Drainage Relief for Phase II This project will benefit those areas and drainage structures that are in need of rehabilitation in order to alleviate reported flooding and potential flooding due to undersized culverts or inadequate drainage. These improvements have been included in the FM 1938 construction plans. • Illuminated Street Name Signs along Southlake Boulevard This project includes the installation of backlit intersection signage at up to 14 major intersections along Southlake Blvd. similar to the existing signage at Kimball Avenue and SH114. This project includes the intersections of FM1709 at SH114, Commerce St., Nolen Dr., Kimball Ave., Village Center Dr., Carroll Ave., Byron Nelson Parkway, White Chapel Blvd., Shady Oaks Dr., Waterford Dr., Peytonville Ave., Randol Mill Rd., and Pearson Ln. This project will improve safety for the driving public by improving the visibility of major intersection signage. Construction anticipated to begin FY 2014. Current funding $700,000 Expenditures to date 44,062 Available balance $655,938 • Love Henry Ct. Drainage Improvements This project will implement drainage improvements along Love Henry Ct. north of Southlake Blvd. and Bicentennial Park, and east of Shady Oaks Dr. An engineering study was conducted by Nathan D. Maier Consulting Engineers. The improvements to the current drainage system will include upsizing of the pipe and excavation of swales in order to prevent possible flooding on Love Henry Ct. during heavy rainfall conditions. Engineering design is in progress. Current funding $340,000 Expenditures to date 40,180 Available balance $299,820 • McPherson Channel Improvements This project involves drainage improvements to the open channel located between Village Center Dr. and Ferrar Additions (Kroger). The channel improvements increase the function and aesthetics of the channel. The improvements will also facilitate the ability to construct a future connector road between the two shopping centers contingent upon right of way acquisition. This construction project was awarded to HQS Construction in April 2013. Construction is underway and expected to be completed early 2014. Current funding $624,014 Expenditures to date 100,310 Available balance $523,704 Innovation 0 Integrity 0 Accountability 0 Commitment to Excellence 0 Teamwork Page 3 of 8 CITY OF SOUTH LA KE TEXAS • North Carroll Avenue at Federal Way This project will construct a traffic signal at the intersection of Federal Way at North Carroll Avenue. This is part of a larger intersection improvement project which will include a right turn lane from Federal Way to northbound Carroll Avenue as well as an 8 -foot sidewalk along Federal Way. Construction anticipated to begin FY 2014. Current funding $315,000 Expenditures to date 46,860 Available balance $268,140 • Nolen Drive Connector This project will complete the roadway connection of Nolen Dr. between Exchange Blvd. and Industrial Blvd. in Grapevine. This project is a joint project between the City of Southiake and the City of Grapevine. Design and ROW acquisition is currently underway. Current funding $150,000 Expenditures to date 5,900 Available balance $144,100 • North Kimball Avenue Street Widening from SH114 to Dove Road This project involves paving, utility, and drainage improvements for the widening of North Kimball Ave. from SH114 to Dove Rd. to its ultimate four lane divided pavement section with center landscaped medians and six -foot sidewalks on both sides of the street. Phase I for SH 114 to Kirkwood Blvd is complete. Phase II is the continuation along N. Kimball Ave. from Kirkwood Blvd. up to Dove Rd. Right of way acquisition is complete. The construction contract was awarded to Pavecon in August 2013. Construction is under way and is expected to be completed Summer 2014. Roadway Roadway Impact Current funding $8,406,606 $1,260,000 Expenditures to date 7,163,824 1,034,262 Available balance $1,242,782 $ 225,738 Project Total Available Balance: $1,468,520 • N. White Chapel from Emerald to SH114 This project involves paving, utility, and drainage improvements for the widening of N. White Chapel Blvd. from Emerald Blvd. to SH114 to its ultimate pavement section of four lanes divided. This project has been divided into two phases. Phase I extends from Emerald Blvd. to Highland St. and is currently at 95% design. Phase II is the continuation of the widening from Highland St. to SH114 including a dual -lane roundabout at the N. White Chapel Blvd /Highland St. intersection, and the design is Innovation 0 Integrity 0 Accountability 0 Commitment to Excellence 0 Teamwork Page 4 of 8 CITY OF 5 SOUTH LAKE TEXAS • N. White Chapel from Emerald to SH114, continued currently 90% complete. Right of way acquisition is currently underway. Utility relocations will begin once all right of way is acquired. Roadway Roadway Impact Utility Current funding $8,135,000 $1,060,000 $445,000 Expenditures to date 935,236 640,457 80,274 Available balance $7,199,764 $ 419,543 $364,726 Project Total Available Balance: $7,984,033 • Sanitary Sewer System Rehabilitation Program This project was the result of a three year Sanitary Sewer Evaluation Study conducted by RJN from FY2008 to FY2010. The final report from the SSES recommended the rehabilitation of 358 sewer manholes including replacing manhole rings /lids, corbel, invert, clean -out, and point repairs, as well as street and pavement repairs resulting from activities associated with conducting the manhole repairs. These repairs were recommended in order to prevent inflow and infiltration of storm water and ground water which should lower the City's treatment costs to Trinity River Authority. The project is in its last year. C Current funding $350,000 Expenditures to date 275.473 Available balance $ 74,527 • Shady Oaks Roadway and Utility Improvements Project This project will implement utility improvements along Shady Oaks beginning at the north property line of Durham Elementary School to the intersection of Fox Glen. These improvements will include an 8" sanitary sewer line and a 12" water line from just south of Highland Street to Fox Glen along Shady Oaks Drive. The project is currently under design. Construction schedule TBD based on area impact in conjunction with other projects. Utility Sewer Impact Current funding $1,450,000 $300,000 Expenditures to date 38,450 38,450 Available balance $1,411,550 $261,550 Project Total Available Balance: $1,673,100 Innovation 0 Integrity 0 Accountability 0 Commitment to Excellence 0 Teamwork Page 5 of 8 TY F S O U TH LA l�E TEXAS • South White Chapel at Big Bear Creek Scour Mitigation This project will address the immediate problem of scour (erosion) around columns supporting the main bridge deck. Engineering design is in progress. Current funding $150,000 Expenditures to date 3.317 Available balance $146,683 • Southlake Boulevard Sidewalks This ongoing TxDOT construction project will fill in gaps and missing sidewalk segments in order to increase pedestrian connectivity along FM 1709. This project will also increase safety and security by eliminating the need for pedestrians to enter unsafe areas while walking or running. Construction is expected to be completed early 2014. This is a TxDot project that costs $1.28 million total, with Southlake covering $298,255 of the total cost. • Street Rehabilitation Partnership Program This is an annual project which involves the rehabilitation of arterial streets within Southlake in partnership with Tarrant County. The City of Southlake funds the costs of materials, and Tarrant County provides labor and equipment. The current project presented to Tarrant County will focus on Ridgecrest. The limits of this projects have not been determined yet. Current funding $935,000 Expenditures to date 652,083 Available balance $282,917 • Texas Turnaround at SH 114 /North Carroll The Texas Turnaround project will ease the traffic congestion at the SH 114 and North Carroll Avenue intersection. The project will focus on easing traffic along the DFW Connector project and allow greater access to the Town Square retail developments. The Texas Turnaround is a partnership project between the City of Southlake, Tarrant County, TxDOT, Cooper & Stebbins and Gateway Church and bid out by TxDOT in July 2013. Construction set to begin later in 2013. The project cost is $2 million total, with Southlake covering $410,000 of the total cost. • Torian Lane Sanitary Sewer Lift Station This project consists of the design and construction of a sanitary sewer lift station at Torian Ln. to serve the Royal Oaks and Twin Creek Neighborhoods as well as future development along Torian Ln. The project is currently in the conceptual design stage. Current funding $600,000 Expenditures to date 0 Available balance $600,000 Innovation 0 Integrity 0 Accountability 0 Commitment to Excellence 0 Teamwork Page 6 of 8 - _____..____._., CITY OF SOUTH LADE TEXAS • Town Square Enhancements Project This is a continuing project to make improvements to streets, drainage, and sidewalks throughout Town Square. This project will enhance the appearance of Town Square and attract visitors and shoppers. In August 2012 the sidewalks around Town Hall were reconstructed along with some drainage corrections at the ramp leading to the first floor on the southwest corner of the building. Additionally, milling and overlay of Central from FM 1709 to Main Street and Prospect from North Carroll to State were completed in March 2013. The FY 2014 improvements will include the construction of State St. from Federal Way to SH 114 to facilitate traffic egress from Town Square to SH 114. Current funding $748,966 Expenditures to date 508,821 Available balance $240,145 • Zena Rucker Culvert This project calls for culvert improvements for the crossing of Zena- Rucker Road. The construction of a culvert is intended to facilitate the future extension of Zena- Rucker Road. Engineering for this project is currently on- going. Current funding $200,000 Expenditures to date 2,091 Available balance $197,909 • Bicentennial Park improvements Phase II The Bicentennial Park Improvement Project is a multi -phase project set to transform the existing park into a beautiful, safe and functional signature park for Southlake. Phase II of this project includes a new playground, Miracle League baseball field, 60/90 baseball field, new concession /restroom facility, enhancement to the original baseball 4 -plex, park boulevard connection to White Chapel Blvd., new Park Maintenance Facility, parking, trails, enhanced landscape and irrigation improvements, including an additional new water well. Design of the project is complete, the project has been bid and a contract has been awarded. Construction will begin in January 2014 and the anticipated completion date for Phase II is July 2014. Current funding $ 10,642,892 Expenditures to date 1,065,043 Available balance $ 9,577,849 • Community Recreation Center The Community Recreation Center project was recommended by the Southlake 2030 Parks, Recreation & Open Space / Community Facilities Master Plan, and approved by the City Council as a priority project for FY 2014. An architectural / engineering design services agreement was awarded in August 2013 and is Innovation 0 Integrity 0 Accountability 0 Commitment to Excellence 0 Teamwork Page 7 of 8 CH M' OF S OUTH LAK TEXAS • Community Recreation Center, continued approximately 41% complete. The design is separated into Phase I & II. The construction of Phase I is anticipated to begin in August 2014, with an estimated completion date of August 2015. With appropriate approval and funding, the construction of Phase II is anticipated to begin in August 2015, with an estimated completion date of November 2016. Current funding $ 15,000,000 Expenditures to date 924,230 Available balance $ 14,075,770 • DPS West reconfiguration Following the construction of the new DPS North facility, the current DPS West configuration will need to be updated. The update is to reconfigure the building to increase the size and number of community /training rooms to be used by the Community Initiatives sections for community outreach and training, expand the Fire Day Room and replace the overhead doors. A needs assessment is currently underway and is 85% complete. Current funding $ 1,000,000 Expenditures to date 33,562 Available balance $ 966,438 Innovation 0 Integrity 0 Accountability 0 Commitment to Excellence 0 Teamwork Page 8 of 8 FirstSouthwest illiP i ip sset Management Economic Summary — 4th Quarter 2013 The fourth quarter began amid a huge amount of uncertainty. At come in "measured steps," although Bernanke indicated that midnight on October 1st, after Congress failed to reach a last minute purchases were likely to continue until late 2014, which suggests resolution to continue funding the Federal government, 800,000 gradual reductions averaging somewhere in the neighborhood non - essential government workers were promptly furloughed. of $10 billion per month, leaving the Fed's portfolio of assets at The sticking point was implementation of the Affordable Care Act. somewhere around $4.5 trillion by year end. The Committee also The GOP demanded that the Obamacare rollout be postponed, said it will be appropriate to maintain the current overnight funds while the Democrats refused to amend the start date. The Federal target "well past the time that the unemployment rate declines debt ceiling was expected to be reached sometime in October. below 6.50% percent, especially if projected inflation continues The biggest concern here (albeit an unlikely one) was that the to run below the Committee's 2.0% percent longer -run goal: The U.S. would experience a technical default on its debt payments. vote was 9 to 1. Interestingly, the only member who dissented Compounding the market's uncertainty was a prevailing thought was Boston Fed President Eric Rosengren, who thought the that the Fed would, at some undetermined point, begin tapering unemployment rate was still too high and inflation too low to back on its $85 billion monthly asset purchase plan under QE3. justify early tapering. The start of the taper would presumably be delayed until the March 2014 meeting as a result of the government shutdown, 8 z Unemployment Race (Left Hand ScaEe) Change in Non -Farm Payrolls (Right Hand Scale) 350 which was largely expected to take a bite out of fourth quarter 8 p economic growth. The shutdown lasted 16 days before the Senate 300 7.8 finally reached a deal to suspend the debt ceiling until February 250 7th and fund the government through January 15th. House 76 7.4 200 Speaker John Boehner compromised and allowed the measure to come to the floor for a vote, where it passed, eliminating the 7.2 ,50 00 immediate risk of default. Shortly afterwards, the markets braced 7.0 for a rash of delayed, suspect and generally weak economic data, e.8 surprisingly, the expected weakness didn't materialize. That 88 s .,ght have been the surprise of the quarter. In particular, job 8.4 p creation picked up the pace, and the official unemployment rate > c l o Z o r F 3 D a <° o Z °< n continued to grind lower. _ N N N N r, W W W W 4, W W W W W W Inflationary pressure, already light, only eased further during I Unemployment Rate ■I Change in Nonfarm Payrolls I the quarter. The ISM factory index, a reliable leading indicator, EMPLOYMENT unexpectedly rose to its highest level in 31 months. Durable Change in Non-Farm Payrolls goods orders gained 3.5% in November, falling just below an all -time high. Auto sales returned to pre- recession highs and EMPLOYMENT the housing sector performed well despite rising mortgage rates. Company payroll growth slowed in the summer months, perhaps Dovish Janet Yellen was confirmed to be Bernanke's successor in anticipation of the ObamaCare rollout, but accelerated in the as Fed Chairman, which pleased the equity markets and helped fourth quarter. A better -than- expected November employment drive the DOW and S &P 500 to a series of record highs. Total net report showed U.S. companies had added 203k workers to worth of U.S. households soared in the third quarter due almost payrolls following a 200k gain in October. As a result, nonfarm entirely to stock market gains and rising home values. The final payrolls had increased by an average of 189k through the first 11 revision of third quarter GDP boosted annualized economic months of 2013. By comparison, monthly payroll gains averaged growth in the previous quarter from 3.6% to 4.1%, the highest 183k and 175k in the previous two years. The unemployment rate, level since Q4 2011. Much of the revision can be attributed to calculated from a separate survey of U.S. households, fell from a higher rate of consumer spending as its contribution jumped 7.3% to 7.0% in November, the lowest in five years, and getting from 1.4% to 2.0%, although inventory accumulation was still a very close to the 6.5% threshold rate the Fed has been targeting large portion of the overall gain. Stronger growth reduced deficit as its tightening barometer. It's probably this particular number, spending significantly. For the 2013 fiscal year, the U.S. budget right or wrong, that's carrying the economic recovery flag. The deficit fell by 37% from $1.087 trillion, or 6.8% of GDP, to $680 other side of the falling unemployment story is that so few people billion, or 4.1% of GDP. are actually seeking work. Since January 2009, the number of Americans officially counted as being out of the labor force has F ed officials, having waited patiently for signs of a self- sustaining swelled by more than 11,000,000 to a record 91,521,000 (BLS). nomy, seized an early opportunity in December to announce The participation rate, which is the percentage of working -age —le long- awaited taper. The plan is to reduce its monthly Americans who are either working or considered to be looking purchases by $10 billion, split evenly between Treasury and MBS for work, dropped to a 35 -year low of 62.8% in October before purchases. In the future, any additional reductions would likely inching up to 63.2% in November. The broader U6 unemployment FirstSouthwest Asset Management :asure, which includes everyone who would accept a fulltime 500 8.0 job if one were offered, fell from 13.8% to 13.2%, also the lowest 75 ® Existing Home Sales in five years and showing substantial gains from the 17.1% peak 450 - U6 level reached in April 2010. However, the improvement still New Home Sales - 7 p x leaves almost 11 million without a job and actively seeking work. 5.5 5 Southwest Airlines accepted flight attendant job applications -c 400 - - s 0 3 in December for the first time since 2011. The response rate a averaged 80 per minute. At last count, there were over 10,000 - 5.5 E 350 - resumes for just 750 openings. _ s.o ■ INFLATION 2 300 - 1 - 4.5 The other monetary policy barometer is inflation. In theory, as - 4.0 long as price pressures stay below the Fed's target range of 2.0% 250 3 5 to 2.5%, the FOMC can remain accommodative. After dropping Q m m> Z Q m g > Z„ g n Z r m D Z T m D m 0.1% in October, the consumer price index (CPI) was unchanged m m o o 0 0 0_ N N N N w in November and is rising at a rather pedestrian 1.2% year -over- year rate. Much of the ease in pressure can be attributed to the NEW AND E X I S T G HOME SALES drop in gasoline prices, which are down 10% from a year ago. A n n u a l i z e d by Month Excluding food and energy, core CPI was up 0.2% in November HOUSING and just 1.7% year- over -year. Producer prices are also well contained with overall PPI declining 0.1% in November and The housing sector has been another pleasant economic surprise, rising by just 0.7% on an annual basis. Core PPI has risen at a very mainly due to fairly healthy demand paired with tight supply. modest 1.3% year - over -year. The Fed's preferred inflation gauge, New home sales rose to a 464k unit annual rate in November, well the Personal Consumption Expenditures (PCE) index increased above the 440k Bloomberg median forecast, while the October at a year- over -year rate of just 0.9% in November, while core reading was revised up from 444k to 474k, the highest annualized sales level in five years. Bloomberg reported in November that PCE rose by 1.1%. Few mention continued deceleration of price °ssure as an obstacle to the Fed's tapering plans, but if inflation the median number of months between completion and sale, at re to cool further, this could impact the timing. 2.6 months, is the lowest on record. By contrast, sales of existing homes fell by 4.3% in November to a seasonally- adjusted annual CONSUMER SPENDING rate of 4.9 million. The National Association of Realtors blamed The government shutdown was expected to have a negative impact the third straight monthly decline in previously owned homes on consumer spending (at least in October), but this didn't turn on low inventory levels. The November inventory was a relatively lean 2.09 million, representing a 5.1 month supply, while the out to be the case. Furloughed government workers were still being paid, and many must have spent the downtime shopping. number of homes sold was down 1.2% from the previous year, Retail sales unexpectedly rose by a revised +0.6% in October, and marking the first annual drop in over two years. The median then increased another +0.7% in November, to in the +0.6% price for an existing home was 9.4% higher than a year earlier PP g at $196,300. With a relatively low number of homes available median Bloomberg forecast. The reasons behind the November on the market, builders have broken ground on new homes at jump seem legitimate given deeply discounted holiday sales pricing, lower gasoline prices, record stock market gains, improved a brisk pace. Housing starts rose to their highest level in nearly labor conditions and rising home values. U.S. auto sales climbed six years in November, increasing by 22.7% to a 1.09 million to a 16.3 million unit pace in November, the highest since May unit annualized pace, well above the 955k median forecast. The 2007. The lion's share of the November retail sales increase came single month gain was the biggest since January 1990. To put this from autos and building materials. Sales, excluding auto dealers, number in historical perspective, in the midst of the recession gasoline, food services and hardware stores (the number used for in April 2009, annualized starts bottomed out at a 478k pace. In the actual GDP calculation) rose by +0.5 %. This gain followed early 2006, at the housing bubble peak, starts had soared to a +0.7% growth in October, which was the biggest increase in this 2.27 million unit pace. The stronger housing data defies higher critical category since July 2012. A reasonable case can be made mortgage lending rates. A number of economists had speculated that spending should remain brisk in the upcoming quarters. The higher borrowing costs would crimp demand. After reaching average age of consumer durable goods, things like appliances the 2013 low point of 3.59% in early May, the Mortgage Bankers and furniture, is the highest since 1962, while the average age Association (MBA) 30 -year fixed rate mortgage index climbed of all vehicles on U.S. roads remains near an all-time high of to a average in early September, and recently averaged 11.5 years. One impediment to continued spending might be a 4.62% for the week ending December 13th. A 100 basis point -- rceived need (at some point) to increase savings. The savings increase on a $150,000 loan adds less than $100 to the monthly fell 4.5% to 4.2% in November. During the decade of the 70's payment, which apparently isn't fazing borrowers one bit. and 80's, this rate had averaged approximately 11%. Before the "Great Recession" began in December 2007, the savings rate had dropped to around 3%. E FED from 10 major Wall Street investment banks was 1,952, an increase of The most important information coming out of the Central Bank 5.6% (MarketWatch). This suggests increasing household net worth during the quarter was taper - related, although there was quite a bit would continue to drive a somewhat uneven economic recovery. of important news. Janet Yellen was successfully vetted, and expected According to a recent Gallup poll, just 52% of Americans actually to be confirmed in early January by the Senate. When confirmed, own stocks, reportedly the lowest level since at least 1998. Yellen will become the first female to lead the U.S. Central Bank in its 100 -year history. Stanley Fischer, the former Governor of the S &P Central Bank of Israel was nominated as Vice Chairman. The pairing DOW 500 NASDAQ of Yellen and Fischer seemed to be well received by the financial 9/30/13 15,130 1,682 3,771 markets, and suggests confident Fed leadership into what will likely 12/31/13 16,577 1,848 4,177 be a particularly challenging future for monetary policy. % Change for Q4 -2013 +9.6% +9.9% +10.7% EQUITY MARKETS Fed 3 mo 6 mo 2 yr 5 yr 10 yr Third quarter corporate profits rose 2.6% to a record $1,712 billion, Funds T - bill T - bill T - note T - note T - note bringing after -tax profits to almost 60% above pre- recession levels. Last 9/30/13 0.00% 0.01% 0.03% 0.32% 1.38% 2.61% The NASDAQ rose over 38% for the year, while the S &P was up nearly 30% to 1,848. The DOW rose 26.5% in 2013 and reached its High - 0.00% 0.10% 0.14% 0.41% 1.74% 3.03% 52nd record high on December 31st, finishing the year at 16,577. Low _ 0.00% 0.01% 0.04% 0.27% 1.26% 2.50% U.S. stocks had their best year since 1995. The outlook for 2014 is cautiously optimistic. The average year -end forecast for the S &P 500 End 12/31/13 0.00% 0.07% 0.09% 0.38% 1.74% 3.03% ECONOMIC AND INTEREST RATE OUTLOOK There is little doubt amongst the experts that the U.S. economy not have the same luxury, The purchases have to end sometime. k shown improvement, and broad expectations among industry As a result, yields are expected to trend higher on the long end. erts are that the momentum will continue into 2014. Interestingly, Fed accommodation under the Yellen watch, at least initially, will r,ssimism continues on Main Street. A CNN poll released in primarily be a continuation of the zero percent overnight funds late December showed that almost 70% of respondents think rate policy. Most indications point to at least another year or two of the economy is in poor shape, while only 32% believe it's in good record lows on the short end of the curve. The most recent FOMC condition. More than half of those surveyed expected the economy member projections show average GDP in 2014 of 3 %, a PCE to be in poor shape a year from now. Part of this pessimism may inflation rate of 1.5% and an unemployment rate of 6.5 %. be attributed to the unevenness of the recovery so far. Up to this point, the majority of gains in household net worth have resulted Even though the Federal budget deficit fell to $680 billion during from higher stock prices and home values, which disproportionately the last fiscal year, total U.S. debt topped $18 trillion. Clearly, benefit the wealthy. Unemployment is at a five -year low, but only most members of Congress understand this has to be contained, recently has job creation picked up. In theory, the key to sustainable especially when the cost of issuing debt is increasing. In a positive economic recovery is jobs. The good news is that virtually all of the development late in the year, Congress passed the first bi- partisan economic data and company surveys seem to indicate that businesses budget agreement in four years. Although the equity markets are in hiring mode. Obviously, employed consumers are able to spend expressed approval for the agreement, neither political party was more money, and consumer spending drives economic growth. The particularly thrilled with the details. In the hardly enthusiastic words housing market should be fueled by new household creation as of Paul Ryan, "This bill saves more than if we did nothing." John family members of cramped multigenerational households strike Boehner admitted that it was far from perfect while Nancy Pelosi was out on their own. Homeownership is at a 13 -year low, but demand "unhappy" with the bill, but still voted for it. It doesn't address the for homes should improve along with employment. Auto sales were debt ceiling, which will become an issue again in early 2014. It only at a seven year high in 2013, but demand for replacement cars and pushes back the budget sequestration for two years. It didn't extend trucks should remain quite steady simply because the average vehicle long term unemployment benefits. It didn't address the huge cuts in on U.S. roads is so old. Medicare payments to doctors. And it does nothing to address the $18 trillion national debt. Still, both sides admitted it was a step The stock markets experienced their best year since 1995, while in the right direction. A dose of optimism to begin the year has bonds suffered their first losing year since 1999. The 2 -year been sorely absent for the last several years, but with Congress taking Treasury yield increased from 0.26% to 0.38 %, the 5 -year yield tentative steps forward and economic data on the rise, 2014 is off to ' -nbed from 0.74% to 1.74% and the 10 -year rose up from an encouraging start. % to 3.02 %. The Fed's ability to support the economy will be limited by the sheer asset size of its $4 trillion (...and counting) Scott McIntyre, CFA portfolio. Whereas Bernanke was able to drag interest rates down Senior Portfolio Manager through three separate quantitative easing efforts, Yellen will January 10, 2014 IOL8L Telco"'ut;sny 061 al ?nS `laal%S glxiS M 00£ iltir Ise /mill I !®S1said FirstSouthwest OP = Asset Management Economic Summary — 4th Quarter 2013 "There is little doubt amongst the experts that the U.S. economy has shown improvement, and broad expectations among industry experts are that the momentum will continue into 2014. Interestingly, pessimism continues on Main Street. R;ad more inside. Th paper was prepared by First Southwest Asset Management (FSAM) and 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 0 r 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 tablish standards of care applicable to any attorney or advisor in any particular circumstances. The statements within constitute the views of FSAM as of the date of the report and may differ from the views of other divisionsidepartments of First Southwest Company. In addition, the views are subject to change without notice. This paper represents historical information only and is not an indication of future performance U 2013 First Southwest Company. All rights reserved. TRS0114006