Financial Trend Monitoring System: Prepared by The Finance Department

FINANCIAL TREND MONITORING SYSTEM
CITY OF GOLDEN
AN EVALUATION OF FINANCIAL TRENDS

2012 - 2016
Prepared by
The Finance Department

CITY OF GOLDEN
AN EVALUATION OF FINANCIAL TRENDS
2012 - 2016
Table of Contents
Page Number
SUMMARY ........................................................................................ 3
INTRODUCTION ………………………………………………………... 5
Financial Condition ................................................................ 6

How to Use This Report ........................................................ 6
Methodology .......................................................................... 6
Definitions ............................................................................... 7
TREND EVALUATIONS BY FACTOR
Revenues .............................................................................. 9
Expenditures........................................................................... 17
Operating Position .................................................................. 21
Debt Indicators ..................................................................... 32
Unfunded Liabilities ............................................................... 36
Capital Plant .......................................................................... 40
Local Economic and Demographic Characteristics .............. 45
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LIST OF INDICATORS
Factor Indicator Page
Revenues Revenues Per Capita .............................................................. 10

Property Tax Revenues ........................................................... 11
Intergovernmental Revenues .................................................. 12
Elastic Tax Revenues .............................................................. 13
One-Time Revenues ............................................................... 14
Restricted Operating Revenues .............................................. 15
Revenue Surplus (Shortfalls) .................................................. 16
Expenditures Expenditures Per Capita.......................................................... 18

Employees Per 1,000 Citizens ................................................ 19
Employee Benefits ................................................................... 20
Operating Position Operating Revenues Over (Under) Expenditures ................... 23

Fund Balances ......................................................................... 24
Liquidity ................................................................................... 25
Utility Operations - Income and Losses................................... 26
Community Center Operations - Income and Losses ............. 27
Cemetery Operations - Income and Losses ............................ 28
Splash Operations – Income and Losses …………………….. 29
Golf Course – Income and Losses …………………….. .......... 30
Museums – Income and Losses …………………….. .............. 31
Debt Indicators Current Liabilities ..................................................................... 33

Combined Long-Term (Overlapping) Debt .............................. 34
Debt Service ............................................................................ 35
Unfunded Liabilities Unfunded Pension Liability and Pension Assets

(Volunteer Firefighters’ Pension) ....................................... 37
Accumulated Employee Leave ................................................ 38
Pension Plan Assets (Volunteer Firefighters’ Pension) ........... 39
Capital Plant Capital Equipment Outlay ........................................................ 41

Depreciation – Governmental and Business ........................... 42
Type Activities
Infrastructure Replacement ..................................................... 43
Local Economic and Median Age ............................................................................. 46

Demographic Property Value ......................................................................... 47
Characteristics Employment Base ................................................................... 48
Business Activity...................................................................... 49
Population ................................................................................ 50
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SUMMARY
As part of the annual budget review and process, the City of Golden has prepared an historic evaluation of
the financial condition of the City. This evaluation organizes the numerous factors that affect the City’s
financial condition into identifiable trends that can be monitored. Analysis of positive and negative trends
allows the City to make informed plans and recommendations.
Methodology:
Financial condition is defined as the ability of the City to fund the services required both now and in the
future. Services are costs essential to maintaining the quality desired and required for the health, safety
and general welfare of the citizens. The City uses the Financial Trend Monitoring System developed
specifically for local governments by the International City/County Management Association (ICMA) as the
foundation for this analysis.
This analysis is developed around seven major factors, each having measurable financial condition
indicators:
Factors
 Revenues
 Expenditures
 Operating Position
 Debt Indicators
 Unfunded Liabilities
 Capital Plant
 Local Economic and Demographic Characteristics
For each factor, the quantifiable indicators of the level of solvency are identified, graphed and the trend
analyzed. To assist in understanding the detailed information, the definitions included in the introductory
section should be reviewed.
Analysis:
In 2016, the national, state, and many local economies saw fluctuations due to the political environment,
wage and unemployment issues, housing inventory and rising prices, energy issues and oil prices, and
stock market volatility. The City had another good year financially in 2016 and continues to maintain a
strong and favorable financial position. In the General Fund, most revenues and many expenditures
increased in 2016. Sales tax remained strong with an increase of 6.3% over 2015, which increased 7.2%
over 2014. Use tax, much more prone to fluctuations, was down 11.2% in 2016 and 10.8% in 2015,
following a 26.3% increase in 2014. But overall, the trends based on 2016 data have stayed stable or
improved.
In looking at the 5-year trends, it is important to keep in mind significant happenings in prior years so as to
not overreact to the changes in the trends. The collection of a large audit assessment in 2012 impacted
most trends that have a revenue component, in both 2012 (mostly favorably) and 2013 (mostly unfavorably).
Trends impacted include: Revenue per Capita, Revenue Surplus, Operating Surplus, Elastic Tax
Revenues, One-Time Revenues, and Unreserved Fund Balance as a Percentage of Net Operating
Revenues. The decrease in expenditures in 2013 is primarily a result of the ARRA grant, with its pass-thru
expenditures, that was completed in 2012 and a decrease in costs associated with the Northwest
Corridor/Jefferson Parkway transportation issues.
Recent trends of concern included Restricted Operating Revenues, Cemetery Operations, and Museums
Operations. The reason for the increase in Restricted Operating Revenues is primarily General Fund
transfers of available fund balance to the SUT Fund (in 2012 for the Planning/PW Admin building, and in
2013 for the 6th and 19th Interchange). Additional large transfers occurred in 2014 for the 6th & 19th
Interchange, in 2015 for a new skate park, and in 2016 for work on the Astor House. General Fund reserves
have been sufficient to cover these transfers and still maintain a healthy fund balance. The concern
continues to be that there becomes a future expectation to help fund capital projects with General Fund
money even when reserves are not sufficient to do so. Another factor in the Restricted Operating Reserve
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calculation is operating transfers to other funds from the General Fund. The General Fund provides
operating subsidies to the Community Center Fund and the Museums Fund on an annual basis. Subsidies
are also provided to the Splash Fund and Cemetery Fund as needed. In 2012 and 2013, the Cemetery
Fund experienced significantly higher operating losses than in prior years. Similarly, the Museums Fund
has required larger subsidies since the City took over the operations in 2010, and the operating loss
increased in 2012 and 2013. And, the Community Center Fund has required increased subsidies in 2015
and 2016. The Cemetery had much better results in 2014 and 2015 and covered all its costs in 2016. All
three funds still warrant monitoring going forward.
Over the years, the City’s revenues have been buffered by its diverse sales and use tax base. Sales tax
revenues have increased 28.6% over the last five years. Property tax revenues took a hit as a result of the
recession. Total assessed valuation in the City rebounded significantly with the latest reassessment in
2015 and again in 2016 with new residential and commercial developments. On the expenditure side,
increasing operational costs, upward pressures on wages and benefits, and capital infrastructure
maintenance continue to have significant impacts to the City’s budget. Golden Vision 2030, neighborhood
plans, and various master plans have identified numerous capital wants and needs – finding sufficient
revenues to pay for these projects will be an on-going challenge.
General inflation remains relatively low. Construction inflation had a dramatic increase in recent years, and
continues to be a factor in determining the amount of capital maintenance and new capital projects that the
City can afford to do. Along with fluctuating fuel costs, these factors continue to put added pressure on the
City as well as consumers and businesses. Interest rates are finally starting to rise. The stock market had
large increases in 2012 and 2013, stayed relatively stable in 2014, a lot of fluctuation in 2015, and another
large increase in 2016. With 8-9 years of essentially a bull market, some experts are fearing another
recession in the near future.
The following provides additional analysis and summary of some of the specific trend areas for the City:
 Revenues
Most revenues and trends are up for 2016. Sales taxes increased 6.3% compared to 2015, with use tax
down 11.2%. Audit revenue collected in 2016 was $962,000, up $273,000 from 2015. For 2017, year-to-
date sales tax revenues are up 3.5% compared to 2016. For the future, the City still has space available
for residential and commercial growth. Proactive marketing efforts continue to highlight the City and
generate interest in Golden businesses, particularly in the downtown area.
Final assessed valuation information in 2015 resulted in an overall increase of 20% in property values and
corresponding property tax revenue received in 2016. The construction industry has rebounded from the
recession years with several new multi-family and mixed use complexes completed and others under
construction. Property tax revenues should increase accordingly over the next few years.
 Expenditures
Expenditures have been increasing over the past several years as growth occurs on the perimeters of the
City’s boundaries, service needs increase, and outside pressures on costs climb. Salaries and benefits
continue to experience upward pressure in order for the City to recruit and retain quality employees. Health
care and the related cost of insurance continue to increase annually. But again in 2016, the City was able
to keep those increases to a minimum.
Given the increasing demand on the various City operations and the General Fund subsidies to some
operations, the City must continue to address expenditures to keep them in line with the anticipated
revenues and utilize sustainable adjustments to expenditures going forward.
The health of the City’s operating position in the General Fund is reflected in the indicators. The Fund
consistently shows an operating surplus, with 2012 and 2014-16 showing a surplus compared to a budget
deficit, and the 2013 operating deficits significantly less than planned and budgeted for. Fund balances
and liquidity ratios continue to be at acceptable levels. The operating position of several of the managerial
enterprise funds (Cemetery, Community Center, and Museums) of the City bear watching as to the amount
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of subsidies (typically from the General Fund) needed to keep the funds solvent. Net losses before
depreciation for 2015 and 2016 at the Splash Aquatic Park Fund indicate a need to monitor this fund going
forward.
 Debt Indicators
In 2010, the City issued $19.915 million in bonds to refund the outstanding Sales/Use Tax Revenue Bonds
issued in 2001. The refunding took advantage of the low interest rate environment and recognized reduced
debt service costs through 2013 as a result of the savings. The bonds are fully insured and are pledged
against sales/use tax revenues. In 2016, the City issued $8.655 million of Certificates of Participation
(COP’s) to refund the 2006 COP’s. The reduction in the annual debt service payments on the COP’s will
begin with the 2017 payments. Sales and use tax revenues dedicated to capital improvements (accounted
for in the Sales and Use Tax Capital Improvement Fund) are budgeted to make the annual debt service
payments. The City does not have any debt that is to be repaid from property tax or other general funds of
the City.
The Volunteer Firefighters’ Pension Fund actuarial study as of January 1, 2015 has indicated that the
current level of contributions is not adequate to support the plan. The plan was closed to new volunteers
as of January 1, 2011 and the City increased its contribution beginning in 2013 and has budgeted another
increase for 2016 to address the adequacy of the plan. The amount of benefits paid as a percentage of
plan assets over the last 3 years also indicates a trend that bears watching.
 Capital Equipment
Expenditures in infrastructure, vehicles and equipment in 2016 and over the past several years continue to
demonstrate the City’s dedication to maintaining, replacing and upgrading its capital assets. Fleet,
Information Technologies, Streets, and Utilities all have standard maintenance and replacement schedules.
Larger projects are laid out in the 10-Year Capital Improvement Plan.
Golden’s housing market generally maintained stable prices through the recession and recovery, with
increases occurring since 2013. Residentially, the City is close to build out, with some single family and
multi-family properties still available for construction. The West 8 Apartments were completed in 2014 and
Golden Vistas, a mixed use, multi-family complex was completed in 2016. Scrape-offs and reconstruction
is occurring both residentially and commercially. Downtown Golden continues to be vibrant and a tourism
destination, signs of a healthy local economy. Updated demographic information for Jefferson County
shows that the median age is declining and per capita income is above national averages. School
enrollment has held fairly steady over the last 5 years, but is declining over the past decade. Unemployment
dropped to 6.0% at the end of 2016.
INTRODUCTION
This report provides analytical information on the City of Golden. It is prepared in accordance with the
Financial Trend Monitoring System (FTMS) developed by the International City/County Management
Association (ICMA). Generally accepted government accounting standards were followed for the data
presented in this report.
The FTMS was developed by the ICMA with assistance from representatives of more than 30 state and
local jurisdictions. The FTMS identifies and organizes factors that affect financial condition so they can be
evaluated. Data is collected from the City's annual financial reports, budgets, local population and other
demographic information. The FTMS provides for consistent reporting and display of the information to
permit the analysis of historical trends.
The system incorporates the major financial indicators used by national bond-rating organizations to
evaluate the City's credit-worthiness. The FTMS identifies more than 30 measures or indicators of financial
condition. Tracking the indicators over a number of years offers a way to quantify and evaluate a
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government's financial condition and identify strengths and potential problem areas. The indicators can be
used as early warning signs when certain trends are apparent.
FINANCIAL CONDITION
Sound financial condition encompasses four measures of solvency: cash, budgetary, long-term and
service-level.
 Cash solvency is the ability of a government to generate sufficient cash over a 30 to 90 day
period to pay its bills.
 Budgetary solvency is the ability to generate enough revenues during the budget year to meet
expenditures and not incur deficits.
 Long-term solvency is the ability to pay not only the costs of doing business in the current year,
but also those that will come due in future years (i.e., accrued employee leave, pension costs).
 Service-level solvency is the ability to provide service at the level and quality desired by citizens
and required for the health, safety and welfare of the community.
The solvency or sound financial condition of the government depends on the organization's ability to
balance the demands for service with its available financial resources.
Monitoring financial condition allows managers to identify existing and emerging financial problems and
develop solutions in a timely manner. Effective monitoring can also provide additional information for the
annual budget process, give City Council a wider context for decision-making and establish a starting point
for setting financial policies. The FTMS is just one tool to accomplish financial monitoring.
HOW TO USE THIS REPORT
The report is divided into seven sections, one for each major financial condition factor:
 Revenues
 Expenditures
 Debt Indicators
 Capital Plant
Each section contains quantifiable indicators that are used to analyze the factor. The format of the analysis
of each indicator is as follows:
 Formula for computing the indicator

 Yearly graphic and chart representations of the indicator’s trend
 Indicator warning trends
 General description of how the indicator is used to measure financial condition
 Commentary on the City of Golden indicators
 Analysis of the indicator trends for the City of Golden
METHODOLOGY
The objective of the review is to evaluate the financial condition of the City of Golden for the past five years.
The analysis is based on the City's Comprehensive Annual Financial Report (CAFR), revenue and
expenditure reporting, statistical/demographic data, payroll records and other subsidiary records. The
Public Works Department provided capital plant measurements, and the Planning and Development
Department provided input on demographic and socio-economic data.
When required for analysis, indicators were expressed in constant dollars based upon the Denver-Boulder
Consumer Price Index for All Urban Consumers.
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The FTMS excludes Enterprise and Internal Service Funds from its definition of operating revenues and
expenditures, as well as revenues dedicated to specific types of capital improvements. The following funds
are excluded, except when otherwise stated: Water, Wastewater, Drainage, Community Center, Cemetery,
The Splash Aquatic Park, Fossil Trace Golf Club, Rooney Road Sports Complex, Museums, Fleet,
Information Technology, Insurance Fund, Medical Benefits Fund, Worker’s Compensation Fund and Capital
Projects Funds.
DEFINITIONS
The terminology defined below is used consistently throughout this document. Reviewing definitions prior
to analysis will make the report easier to understand.
REVENUES
 General Fund Revenues
The General Fund is used to account for most of the government’s activities, including Police, Fire,
Administration, Public Works, Streets, Municipal Court and Parks. General Fund revenues are those
which are collected for unspecified uses including, but not limited to, two cents of the three cent
sales/use tax, property taxes, and building use tax and permit fees.
 Net Operating Revenues
Included are general fund revenues from property and sales/use taxes, franchise fees,
administrative service fees, campground fees and other user fees (not including community center
and water/wastewater enterprise fund fees which are looked at individually by fund). Also included
are various intergovernmental revenues.
 Intergovernmental Revenue
Subset of net operating revenues. Includes County and State collected shared revenues as well as
grant monies received from other governmental agencies.
 Restricted Operating Revenues
Includes general fund grant monies and funds set aside for specific capital projects.
 Elastic Tax Revenues
Includes general fund sales and non-building use tax revenues.
 One-Time Revenues
Includes all grants, and certain General Fund revenues over a base amount (sales/use tax, building
permits/fees, building use tax, audit assessments).
EXPENDITURES
 Net Operating Expenditures
Includes salaries and wages, fringe benefits, operating costs, and machinery and equipment
purchased by the General Fund.
 Fringe Benefit Expenditures
Includes General Fund vacation/sick accruals, insurance, disability and education expenditures.
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 Capital Equipment Outlay
Includes machinery and equipment purchased for the general government operations, primarily with
General Fund dollars.
OPERATING POSITION
 General Fund Operating Surplus (Deficit)
General Fund gross revenues less expenditures including transfers to/from other funds.
 Enterprise Operations Income and Loss
Enterprise funds for the City include Water, Wastewater, Storm Drainage, Community Center,
Cemetery Operations, The Splash Aquatic Park, Fossil Trace Golf Club, and Museums. Income
includes charges for services and user fees. Depreciation is included as an expense since costs of
replacement should be accounted for in user charges and fees.
DEBT LEVELS
 Current Liabilities
Includes General Fund accounts payable and accrued liabilities for amounts to be paid within the
current calendar year.
 Net Direct Debt Service
Includes principal and interest payments on the sales and use tax revenue bonds.
UNFUNDED LIABILITIES
 Unfunded Pension Plan Liability
Calculated as the net of the amount available in the plan for benefit distribution and the total
obligation to be paid as determined by actuarial calculations.
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TREND EVALUATION: REVENUES
SUMMARY
Revenues determine the capacity of the City to provide services. Important issues to consider in revenue
analysis are growth, flexibility, elasticity, dependability, diversity and administration. Under ideal conditions,
revenues would be growing at a rate equal to or greater than the combined effects of inflation and
expenditures. Revenues would be sufficiently flexible (free from spending restrictions) to allow adjustments
to changing conditions. Revenues would be balanced between elastic and inelastic in relation to inflation
and the economic base; that is, some would grow with inflation and the economic base and others would
remain relatively constant. Revenue sources would be diversified--not overly dependent on residential,
commercial, industrial land uses, or on external funding sources such as federal grants or discretionary
State aid. User fees would be regularly evaluated to cover cost increases.
Analyzing revenue structure will help to identify the following types of problems:
 Deterioration of the revenue base

 Practices or policies that may adversely affect revenue yields
 Lack of cost controls, or poor revenue-estimating practices
 Inefficiency in the collection and administration of revenues
 Over dependence on obsolete or intergovernmental revenue sources
 User fees that are not covering the cost of services
 Changes in the tax burden on various segments of the population
INDICATORS
 Revenues Per Capita

 Property Tax Revenues
 Intergovernmental Revenues
 Elastic Tax Revenues
 One-Time Revenues
 Restricted Operating Revenues
 Revenue Surplus (Shortfalls)
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Revenues per Capita
$2,000
Revenues per Capita
Warning Trend: $1,500
Decreasing Net Operating Revenues per Capita
(constant dollars) $1,000
$500
Formula:
Net Operating Revenues (constant dollars) $0
Population 2012 2013 2014 2015 2016
Fiscal Year
Fiscal year: 2012 2013 2014 2015 2016

Net Operating Revenues * 31,304,000 30,235,000 31,618,000 33,837,000 36,716,000
Consumer Price Index 224.6 230.8 237.2 240.0 246.6
Net Operating Revenues (constant dollars) 31,304,000 29,423,000 29,938,000 31,666,000 33,440,000
Population 19,035 19,186 19,393 19,615 20,330
Net Operating Revenues per Capita
(constant dollars) 1,645 1,534 1,544 1,614 1,645
* Operating revenues : general fund revenues, including carryover cash, plus operating transfers from other funds.
Description:
Examining per capita revenues shows changes in revenues relative to changes in population size and rate
of inflation. As population increases, it might be expected that revenues and the need for services would
increase proportionately and therefore that the level of per capita revenues would remain at least constant
in real terms. If per capita revenues are decreasing, the government may be unable to maintain existing
service levels unless it finds new revenue sources or increases productivity. This reasoning assumes that
the cost of services is directly related to population size.
Commentary:
Operating revenues consist of amounts received in the General Fund from property taxes, sales and use
taxes, fire contract fees, recreation fees, fines & forfeitures, license & permit fees, utility administration fee,
state-shared revenue, county-shared revenue, interest and unexpended cash (carryover cash) brought
forward from the prior year. They are used for on-going City services such as fire, police, public works,
streets, parks, planning and central administration. The City also transfers a significant amount of General
Fund Revenues to the Community Center, Museums, and Capital Improvements Funds. Revenues from
enterprise operations such as water and sewer services are excluded.
Decreasing operating revenues per capita may reduce a government's ability to maintain existing service
levels. Therefore, decreases are a warning trend for this indicator.
Analysis:
Net Operating Revenues increased each of the last three years after a decrease in 2013. 2012 saw an
extraordinary amount of audit revenue that skewed the trends to some extent. General sales tax and
property taxes had large increases in 2016, while general use and building use taxes showed some decline.
Carryover cash increased 17.6% in 2016, even though the 2016 budget anticipated a slight spend down of
reserves, as revenues came in higher than expected. The carryover cash balance remains more than
sufficient to cover unexpected needs.
The population estimates are updated annually by the City’s Planning Department. New multi-family
residential construction and increased housing at the School of Mines have resulted in an increase in the
population estimates over the past few years.
The continued increase in the CPI over the 5-year period is a good indicator that the local economy has
recovered from the recession.
The fluctuations in Net Operating Revenues per Capita are not material and the overall trend remains
stable.
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Property Tax Revenues Property Tax Revenues Constant Dollars
$7,000,000
Warning Trend:
Decline in Property Tax Revenues $5,600,000
(constant dollars)
$4,200,000
$2,800,000
Formula: $1,400,000
Property Tax Revenues
$0
(constant dollars) 2012 2013 2014 2015 2016
Fiscal year
Fiscal year: 2012 2013 2014 2015 2016

Property Tax Revenues 4,950,000 5,050,000 5,216,000 5,356,000 6,430,000
Property Tax Revenues (constant dollars) 4,950,000 4,914,000 4,939,000 5,012,000 5,856,000
Description:
Property Tax Revenues should be considered separately from other revenues, because most local
governments rely heavily on them. A decline or a diminished growth rate in property taxes can have a
number of causes. First, it may reflect an overall decline in property values resulting from the aging of
buildings; a decline in local economic health; or a decline in total number of households, which can depress
the housing market. Second, it may result from unwilling default on property taxes by property owners.
Third, it may result from inefficient assessment or appraisal. Finally, a decline can be caused by deliberate
default by property owners, who realize that delinquency penalties are less than short-run interest rates
and that nonpayment is therefore an economical way to borrow money.
Commentary:
Property taxes are paid on the assessed values of real, personal and utility property. City property taxes
are generated by a mill levy which supports on-going General Fund services and transfers to Capital
Programs. The mill levy has remained constant since 1992. Taxes levied for the Golden Downtown
General Improvement District (GDGID) and the Downtown Development Authority (DDA) are excluded from
this analysis.
The Colorado Constitution via the Taxpayer Bill of Rights amendment (TABOR) does not allow a mill levy
increase without an affirmative vote of the electorate in Golden. Golden taxpayers have paid $12.34 per
$1,000 of assessed value each year since 1992.
Decreasing Property Tax Revenues (when expressed in constant dollars) constitute a warning trend.
Analysis:
The health of the local housing market is indicated by the increasing assessed valuations and related
property tax revenues over the last few years. Golden's one percent growth limit continues to keep demand
for residential property in excess of supply.
The slight decline in constant dollar revenues in some odd numbered years is due to the biennial
reassessment of property by Jefferson County. As the County reassesses properties, the revenues show
large gains in even numbered years,
Due to the lag in the timing of the property valuations used by the assessor, the decline in valuations from
the recession impacted property tax revenues for 2011-2013. The increase in 2015 is a reflection of new
construction in the City. The increase in 2016 is a result of the latest reassessment and is an indication
that property values have more than recovered from the 2008/09 recession.
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Intergovernmental Revenues Intergovernmental Revenues
10.0%
Warning Trend: 7.5%

Increasing amount of Intergovernmental
Operating Revenues as a percentage of
Net Operating Revenues 5.0%
2.5%
Formula:
Intergovernmental Operating Revenues
0.0%
Net Operating Revenues
2012 2013 2014 2015 2016
Fiscal year
Fiscal year: 2012 2013 2014 2015 2016

Intergovernmental Operating Revenues 1,386,000 1,148,000 1,327,000 1,090,000 1,153,000
Net Operating Revenues 31,304,000 30,235,000 31,618,000 33,837,000 36,716,000
Intergovernmental Operating Revenues
as a percentage of Net Operating Revenues 4.4% 3.8% 4.2% 3.2% 3.1%
Description:
Intergovernmental Revenues (revenues received from another governmental entity) are important, but an
overdependence on such revenues can be harmful. As Federal and state governments struggle with their
own budgetary problems, frequent withdrawal or reduction of payments to local governments serve as one
of their cutback measures. Local governments with budgets largely supported by intergovernmental
revenues have been particularly harmed by this, but almost all local governments have been impacted.
The reduction of intergovernmental funds leaves the municipal government with the dilemma of cutting
programs or funding them from general fund revenues.
Nevertheless, a municipality might want to maximize its use of Intergovernmental Revenues, consistent
with its service priorities and financial condition. For example, a local government might want to rely on
Intergovernmental Revenues to finance a federal or state mandated service or a one-time capital project.
The primary concern in analyzing intergovernmental revenues is to know and monitor the local
government's vulnerability to reductions of such revenues, and determine whether the local government is
controlling its use of the external revenue, or whether these revenues are controlling local policies.
Commentary:
Increasing Intergovernmental Revenue to support general City services signals an overdependence on
such revenue. If there is a risk that these revenues could be withdrawn, the City would be forced to find
additional revenue or to cut services to reduce costs. Therefore, an increasing percentage can be viewed
as a warning.
Analysis:
Revenues come from County shared taxes as well as State and Federal grants. The tax revenues received
(Cigarette Tax, Automobile Tax, and County Road & Bridge Tax) are projected to decline slightly as the
rest of the County grows at a faster rate than the City, thus reducing the City’s proportionate share.
However, all these revenues showed modest increases in 2016 and continue to be a fairly stable revenue
source. Annual revenues from the State Gaming Impact Grant help offset related public safety
expenditures. The larger increases in 2012 and 2014 are a result of one-time grants.
The small fluctuations from year to year are not material and within a reasonable percentage. The trend
remains positive as the City is not overly reliant on Intergovernmental revenues to subsidize operations.
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Elastic Tax Revenues Elastic Tax Revenues
40%
Warning Trend: 30%

Decreasing amount of Elastic Tax Revenues
as a percentage of Net Operating Revenues 20%
Formula: 10%
Elastic Tax Revenues
0%
2012 2013 2014 2015 2016
Fiscal year
Fiscal year: 2012 2013 2014 2015 2016

Elastic Tax Revenues 9,806,000 10,237,000 11,379,000 11,795,000 12,139,000
Elastic Operating Revenues as a percentage
of Net Operating Revenues 31.3% 33.9% 36.0% 34.9% 33.1%
Description:
The yields of Elastic Tax Revenues are highly responsive to changes in economic base and inflation. As the economic
base expands or inflation goes up, elastic revenues will generally rise proportionally, and vice versa. A good example
is sales tax revenue, which increases during good economic periods through increased retail business and declines
during poor times, even though the tax rate remains the same. Yields from inelastic revenue sources, such as license
fees or user charges, are relatively unresponsive to changes in economic conditions and require that government
officials change fees or charges to create a change in revenue. The yields from these revenues usually lag behind
economic growth and inflation because local legislative bodies are reluctant to increase them each year. If properties
are not frequently reassessed, property tax revenues can also be inelastic, especially during periods of economic
growth.
A balance between elastic and inelastic revenues mitigates the effects of economic growth or decline. During inflation,
it is desirable to have a high percentage of elastic revenues because inflation pushes up revenue yield, keeping pace
with the higher prices the government must pay. If the percentage of elastic revenues declines during inflation, the
government becomes more vulnerable because inflation pushes up the price of services but not the yields of new
revenues. The reverse is also true (i.e., a low percentage of elastic revenues is desirable in times of deflation), but
significant deflation has seldom occurred in recent years.
During a recession, a high percentage of inelastic revenues is an advantage. This insulates the tax base to some
degree from the reduced yield it can receive during a recession.
Commentary:
Elastic Tax Revenues are highly responsive to economic changes. The City's only major General Fund revenue that
is classified as elastic is sales/use tax. A balance between elastic and inelastic revenues mitigates the effects of
economic growth and decline.
Declining elastic revenues are considered a warning trend because they may place a government in jeopardy during
periods of high inflation or rapid economic growth. However, overdependence on Elastic Sales Tax Revenues can
reduce resources during economic downturns.
Analysis:
Historically, the City has enjoyed increasing sales and use tax revenues as a result of a strong local economy. The
improvement to the economy has resulted in increases in elastic tax over the last few years. The large amount of audit
revenue in 2012 inflated the Net Operating Revenue and negatively impacted the trend that year. Larger than normal
use tax in 2014 resulted in a larger percentage increase that year and a slight decline in 2015. Some fluctuations are
expected from year-to-year. Overall, the fluctuations are not material and the trend is stable.
Golden's sales tax base has a large component of inelastic remitters included in the utilities (including
telecommunications) and grocery sectors. The percentage of sales tax paid for electricity, gas, phone service and food
purchases are considered necessities and a stable tax component. Over 25% of the City's sales tax revenues come
from utilities, grocery, and telecommunications.
13
One-Time Revenues
One-Time Revenues
15%
Warning Trend: 12%
Increasing use of One-Time Operating Revenues
9%
as a percentage of Net Operating Revenues
6%
Formula: 3%
One-Time Operating Revenues 0%
Net Operating Revenues 2012 2013 2014 2015 2016
Fiscal year
Fiscal year: 2012 2013 2014 2015 2016

One-Time Operating Revenues 3,626,000 2,362,000 1,593,000 1,974,000 1,490,000
One-Time Operating Revenues as a percentage
Description:
A One-Time Revenue is one that cannot reasonably be expected to continue, such as a single-purpose
federal grant, an interfund transfer, or use of a reserve. Also included as One-Time Revenues are use taxes
derived from unusual new construction projects or upgrades of existing facilities. Continual use of One-
Time Revenues to balance the annual budget can indicate that the revenue base is not strong enough to
support current service levels. It can also mean that the government is incurring operating deficits and
would have little room to maneuver if there were a downturn in revenues (such as occurs during a regional
or national recession or because of the sudden expenditures occasioned by a natural disaster). Use of
One-Time Revenues increases the probability that the government will have to make large cutbacks if such
revenues cease to be available, which may occur when the Federal Government reduces a major grant
program or when reserves are depleted.
Commentary:
One-Time Revenues are resources that cannot reasonably be expected to continue beyond a single year.
These revenues include sales/use tax audits, interfund transfers and loans, grants, use of reserves and
surpluses, and sales of property.
Continued use of one-time revenues to balance the budget indicates current service level costs exceed
ordinary revenue. Therefore, increases constitute a warning trend.
Analysis:
Changes in the dollar amount of one time revenues is driven by the timing of grants, new commercial
construction, and audit revenues.
The majority of the changes from year to year are from audit revenues. These changes are also reflected
in the total Net Operating Revenues and carryover cash.
Especially in 2012 and to a lesser degree in 2013, the audit revenue was higher than normal. Overall
though, the City's reliance on one-time revenues continues to be minimal.
14
Restricted Operating Revenues Restricted Operating Revenues
10%
Warning Trend: 8%
Increasing amount of Restricted Operating Revenues
6%
as a percentage of Net Operating Revenues
4%
Formula: 2%
Restricted Operating Revenues
Net Operating Revenues 0%
2012 2013 2014 2015 2016
Fiscal year
Fiscal year: 2012 2013 2014 2015 2016

Restricted Operating Revenues 2,425,000 2,773,000 2,419,000 2,342,000 1,698,000
Restricted Operating Revenues as a
percentage of Net Operating Revenues 7.7% 9.2% 7.7% 6.9% 4.6%
Description:
A Restricted Operating Revenue is legally earmarked for a specific use, as may be required by state law,
bond covenants, or grant requirements. For example, many states require that gas tax revenues be used
only for street maintenance or construction. Also included in Restricted Operating Revenues are General
Fund transfers to other funds, including the Community Center Fund and the Museums Fund. While these
General Fund transfers are discretionary, the dollars are earmarked for specific projects and are not
budgeted as available for general expenditures.
From one perspective, it would seem that many of these restrictions, especially those relating to outside
funding, should not affect a local government's financial health. The government has the option of not
accepting the revenue and of not providing the service. This option, however, is not always easy to
exercise; governments develop economic and political dependencies on these revenues and on the
programs they support. Moreover, many governments finance their own essential services with
intergovernmental revenues, making it harder to cut them out.
Commentary:
These revenues are reserved for specific purposes including certain grants, donations, lease proceeds,
capital and operating transfers.
As the percentage of Restricted Operating Revenues increases, the City loses its ability to respond to
changing conditions and citizen needs and demands. Increases in the use of restricted revenues may
indicate an overdependence on external revenues and signal a future inability to maintain service levels.
The warning trend for this indicator is an increasing percentage.
Analysis:
Fluctuations in Restricted Operating Revenue will depend primarily on amounts transferred to other funds
and on grant revenues received. Restricted Operating Revenues include Police, Fire, Gaming, Historical
Society and other grant revenues; the sales tax vendor fee, specifically earmarked for economic
development; and transfers to the Community Center Fund and Museums Fund. Transfers to the Cemetery
Operating Fund and the Splash Aquatic Park Fund occur if needed based on the results of those operations
annually. One-time transfers to Capital Programs or SUT Funds also occur periodically for specific projects
if General Fund reserves are sufficient to support the transfer.
During this 5-year period, several transfers occurred from the General Fund to the SUT Fund, including:
$900,000 in 2012 towards the construction of the new Planning/Public Works Admin building; $1.5 million
in 2013 and $1.2 million in 2014 as part of the local match requirement for the Hwy 6 and 19th Street
Interchange project; $1 million in 2015 for the construction of a new skate park; and $290,000 in 2016 for
renovation of the Astor House.
There were valid explanations for the increases in 2012 and 2013, and the trend shows improvement
beginning in 2014.
15
Revenue Surplus (Shortfalls) Revenue Surplus (Shortfalls)
10%
Warning Trend: 8%
Increase in revenue shortfalls as a 6%
percentage of actual Net Operating Revenues 4%
2%
Formula: 0%
Revenue Surplus (Shortfall)
2012 2013 2014 2015 2016
Fiscal year
Fiscal year: 2012 2013 2014 2015 2016

Revenue Surplus (Shortfall) 2,756,000 491,000 1,624,000 1,966,000 1,188,000
Revenue Surplus (Shortfall) as a
percentage of Net Operating Revenues 8.8% 1.6% 5.1% 5.8% 3.2%
Description:
This indicator examines the differences between revenue estimates and revenues actually received during
the fiscal year. Major discrepancies that continue year after year can indicate a declining economy,
inefficient collection procedures, or inaccurate estimating techniques. Discrepancies may also indicate that
high revenue estimates are being made to accommodate political pressures. If revenue shortfalls are
increasing in frequency or size, a detailed analysis should be made to pinpoint the source.
Commentary:
This indicator reflects the difference between revenues estimated in the Final Adopted Budget and
revenues actually received. Major shortfalls can indicate inaccurate estimating techniques, sharp
fluctuations in the economy or inefficient revenue collection.
Revenue shortfalls may result in mid-year cuts of services, spending of reserve funds, or increased use of
short-term borrowing. Large or frequent shortfalls constitute a warning trend and indicate a need to be
more conservative in revenue projections during the budget process.
Analysis:
The City's budgeting process combines historical revenue trends with current and anticipated economic
conditions. Budget amounts are compared to actual throughout the year and adjustments made through
supplemental appropriations. Surplus or shortfalls within +/- 4% are considered reasonable.
The City has shown a surplus each of the last five years. The amount of the each surplus indicates
conservative, yet reasonable budgeting.
2012: The surplus is primarily from the receipt on December 31st of a large audit assessment that had
been in litigation for several years.
2013: The surplus is primarily a result of increased construction related revenues and additional audit
revenue received.
2014: The surplus is primarily a result of increased sales and use tax revenues.
2015: The surplus is primarily a result of increased sales and use tax revenues and a refund of
accumulated retirement plan forfeitures.
2016: The surplus is a result of modest increases across most revenue categories.
16
TREND EVALUATION: EXPENDITURES
SUMMARY
Expenditures are a rough measure of the City's service output. Generally, the more the City spends in
constant dollars, the more services it is providing. However, this formula does not take into account how
effective the services are or how efficiently they are delivered. To determine whether the City of Golden is
living within its revenues, the first issue to consider is expenditure growth rate.
Because the City is required to have a balanced budget, it would seem unlikely that expenditure growth
would exceed revenue growth. Nevertheless, the annual budget can be balanced in a number of subtle
ways that could create a long-run imbalance in which expenditure outlays and commitments grow faster
than revenues. Some of the more common ways are to borrow, use reserves, use bond proceeds for
operations, or siphon small amounts from intergovernmental grants. Other ways are to defer capital
maintenance or to defer funding of a future liability such as a pension plan. In each of these cases, the
annual budget remains balanced, but the long-term budget develops a deficit. Although long-term deficits
can be funded through windfalls such as state grants or revenue surges created by inflation, allowing such
deficits to develop is risky.
A second issue to consider is expenditure flexibility. Expenditure flexibility is a measure of the freedom to
adjust service levels to changing conditions and considers the level of mandatory or fixed costs. An
increase in mandatory costs such as debt service, matching requirements and pension benefits renders
the City less able to adjust to change.
Analyzing the City's expenditure profile will help to identify the following types of problems:
 Excessive growth of expenditures as compared to revenue growth or community wealth

 An undesirable increase in fixed costs
 Ineffective budgetary controls
 A decline in personnel productivity
 Excessive growth in programs that create future expenditure liabilities
INDICATORS
 Expenditures Per Capita

 Employees Per 1,000 Citizens
 Employee Benefits
17
Expenditures per Capita Constant dollar expenditures
per household and per capita
$3,000
$2,500

Increasing Net Operating Expenditures per Capita $1,500
(constant dollars) $1,000
$500
Formula: $0
2012 2013 2014 2015 2016
Net Operating Expenditures (constant dollars)
Population Fiscal year
Per household Per capita
Fiscal year: 2012 2013 2014 2015 2016

Net Operating Expenditures 22,016,000 21,900,000 22,809,000 23,002,000 24,905,000
Constant dollar expenditures 22,016,000 21,312,000 21,597,000 21,526,000 22,683,000
Estimated population 19,035 19,186 19,393 19,615 20,330
Estimated households 8,153 8,259 8,343 8,404 8,479
Per capita expenditures
Per household expenditures
Description:
Changes in per capita expenditures reflect changes in expenditures relative to changes in population.
Increasing per capita expenditures can indicate that the cost of providing services is outstripping the
community's ability to pay, especially if spending is increasing faster than the residents' collective personal
income. From a different perspective, if the increase in spending is greater than can be accounted for by
inflation or the addition of new services, it may indicate declining productivity--that is, that the government
is spending more real dollars to support the same level of services.
Commentary:
Operating expenditures include personnel cost, materials and services and capital equipment costs in the
General Fund. Operating expenditures do not include transfers to other funds. Increasing expenditures per
capita can indicate that service costs are exceeding the community's ability to pay. Also, increases not
caused by new services many indicate declining productivity.
Analysis:
The City continues its moderate growth with residential and commercial development, with improvements
and occasional expansion to parks and open space. With these additions have come increased service
needs from Police, Fire, Parks, and Public Works. Salaries generally increase an average of 2-4% per
year. Utilities and other operating expenditures have also seen increases.
With the City's efforts to keep expenditures in check along with modest increases in population and number
of households, the fluctuations are minimal and the trends are stable over the 5-year period.
18
Employees per 1,000 Citizens General Fund Municipal Employees per 1,000
Citizens
10.0
Warning Trend:
Increasing number of municipal 8.0
employees per capita 6.0
4.0
Formula:
Number of municipal employees 2.0
Population 0.0
2012 2013 2014 2015 2016
Fiscal year
Fiscal year: 2012 2013 2014 2015 2016

Number of general fund full-time municipal employees * 145 147 147 154 156
Population 19,035 19,186 19,393 19,615 20,330
Number of City employees per 1,000 citizens 7.6 7.7 7.6 7.9 7.7
* Budgeted employees
Description:
Because personnel costs are a major portion of a local government's operating budget, plotting changes in
the number of employees per capita is a good way to measure changes in expenditures. An increase in
employees per capita might indicate that expenditures are rising faster than revenues, the government is
becoming more labor intensive or personnel productivity is declining.
Commentary:
This measure is based on the number of full-time employees in the General Fund. It excludes employees
of enterprise operations like water, sewer and internal service functions like fleet management and
information systems.
An increasing number of employees is a warning trend, which may indicate more labor intensive work or
declining productivity. An increasing number of employees could also indicate a new service or a higher
level of existing service.
Analysis:
Employees Per Capita has remained relatively stable during the 5-year period. The City has experienced
moderate growth over the past five years in terms of population, commercial/residential construction, and
recreation areas.
Much of the staff increases have been administrative in nature to address workloads internal to the
organization and to address changing needs and expectations within the community.
In 2012, a part-time accounting technician and a part-time community marketing manager were both made
full-time. In 2013, Human Resources added a technician position and the Police Department added a
records clerk. Additions in 2015 include: making a part-time GIS technician full-time; adding an
administrative assistant in the Police Department; adding three shift officer positions in the Fire Department
with one replacing a vacant volunteer coordinator position; and adding three senior maintenance workers,
one in Streets and two in Parks. In 2016, the Police Department added two officer positions.
19
Employee Benefits General Fund Employee Benefits as a
Percentage of Salaries and Wages
40%
Warning Trend:
Increasing fringe benefit expenditures as a 30%
percentage of salaries and wages
20%
Formula: 10%
Fringe benefit expenditures
Salaries and wages 0%
2012 2013 2014 2015 2016
Fiscal year
Fiscal year: 2012 2013 2014 2015 2016

General Fund employee benefit expenditures 3,055,000 3,088,000 3,149,000 3,264,000 3,685,000
Total salaries and wages 9,692,000 10,090,000 10,070,000 10,810,000 11,497,000
Employee benefits as a percentage
of total salaries and wages 31.5% 30.6% 31.3% 30.2% 32.1%
Description:
The most common forms of fringe benefits are pension plans, health and life insurance, vacation, sick and
holiday leave, deferred compensation, automobile allowances, disability insurance, educational and
incentive pay. Benefits represent a significant share of operating costs, often amounting to more than 30%
of employee compensation. Some benefits, such as health and life insurance, require immediate cash
outlays; some, such as pension benefits or accumulated vacation pay, can be deferred for ten to twenty
years; others, such as accumulated holiday and sick leave, may require either payment for the opportunity
cost of not having the work done or payment to additional employees to handle the work. Because the
funding and recording of fringe benefits is a complex process, these costs can escalate unnoticed, straining
the government's finances.
Commentary:
Employee benefits include the cost of health insurance, worker's compensation, retirement, unemployment
insurance, long-term disability, life insurance and the employer portion of social security. Paid holidays,
vacation and sick pay are not included. This analysis includes employees in the General Fund. It does not
include employees from enterprise operations such as water and sewer or internal service functions such
as fleet management or information systems.
Increasing employee benefits as a percent of salaries is a warning trend.
Analysis:
Expenditure dollars for Employee Benefits have continued to increase each year as a result of additional
staffing and higher costs. The cost of retirement benefits increases with the cost of salaries. One of the
provisions of the Affordable Care Act has required the City to open enrollment for health insurance
(previously, employees could only change health coverage due to a qualifying event). Open enrollment for
2016 resulted in an increase in dependent coverage under the City’s heath insurance.
Salary increases have averaged 3% in 2012 – 2016, with appropriate step increases for sworn police
officers.
Benefit costs and plan options are carefully monitored by Human Resources. Health insurance costs are
split between employees and the City. The Front Range average for governmental entities for benefits is
approximately 42%, including holidays, sick, and vacation pay.
20
TREND EVALUATION: OPERATING POSITION
SUMMARY
The term operating position refers to the City's ability to (1) balance its budget on a current basis, (2)
maintain reserves for emergencies and (3) have sufficient liquidity to pay its bills on time.
Operating position in the General Fund includes interest earnings and expenditures, and transfers to/from
other funds. For enterprise funds, interest and transfers are not included in operating revenues and
expenses. Debt service payments and the cost of capital projects/equipment are also not included in
operating expenses in enterprise funds.
BALANCING THE CURRENT BUDGET
During a typical year, the City generates either an operating surplus or an operating deficit. An operating
surplus develops when current revenues exceed current expenditures, and an operating deficit happens
when the reverse occurs. Only in rare instances do revenues and expenditures balance exactly. An
operating surplus or deficit may be created intentionally by a policy decision, or unintentionally because of
the difficulty of precisely predicting revenues and expenditures, or trends in the underlying local and national
economies. Usually, unreserved fund balances pay for deficits while surpluses are used to increase the
fund balance. By Colorado statute, the City must always ensure that its total expenditures and reserves
equal its total resources.
RESERVES
The accumulation of operating surpluses builds reserves, which provide a financial cushion against events
such as the loss of a revenue source, an economic downturn, unanticipated expenditures required by
natural disasters, insurance loss and the like; unexpected large-scale capital expenditures, or other
nonrecurring expenses; or an uneven cash flow.
Reserves are budgeted in a contingency account at the City to ensure they are always fully discussed as
part of the annual budget process.
Per City Budget Policy, the City’s objective is to establish the proper level for the fund balance in the General
Fund, provide a budget target, maintain year-to-year consistency, avoid wide fluctuations in budget strategy
and provide resources for maximum service levels, while keeping the City in a strong financial position.
The City’s budget policy allows for some flexibility in its fund balance target to allow for changing economic
times. The goal, as outlined in the policy, is to maintain a fund balance in the General Fund of 10-20% of
annual operating expenditures. The target during each budget process and at the end of each fiscal year
is to keep the fund balance within those parameters. This amount covers approximately two months’
expenditures, plus the 3% emergency reserve required under Colorado’s TABOR Amendment.
LIQUIDITY
Liquidity refers to the flow of cash in and out of the treasury. The City receives some revenues such as
property taxes, in large installments at infrequent intervals during the first half of the year. If revenues are
received before they need to be spent, the result is a positive liquidity/cash flow position. Excess liquidity
or "cash reserves" are a valuable cushion against unexpected financial pressures.
21
An analysis of operating position can help to identify the following situations:
 A pattern of continuing operating deficits

 A decline in reserves
 Ineffective revenue forecasting techniques
 Ineffective budgetary controls
INDICATORS
 Operating Revenues Over/(Under) Expenditures

 Fund Balances
 Liquidity
 Utility Operations Income and Losses
 Community Center Operations Income and Losses
 Cemetery Operations Income and Losses
 Splash Operations Income and Losses
 Golf Course Operations Income and Losses
 Museums Operations Income and Losses
22
Operating Revenues Over (Under) Operating Surplus/Deficit
Expenditures 10%
Warning Trend: 5%
Increasing General Fund Operating Deficits as a
0%
percentage of Net Operating Revenues
-5%
Formula:
General Fund Operating Surplus/Deficit -10%
Fiscal year
Fiscal year: 2012 2013 2014 2015 2016

General Fund Operating (Deficit)/Surplus* 719,000 (440,000) 302,000 1,078,000 1,389,000
General Fund Operating (Deficit)/Surplus as a
percentage of Net Operating Revenues 2.3% -1.5% 1.0% 3.2% 3.8%
*Encumbrances not included
Description:
An operating deficit occurs when current expenditures exceed current revenues. This may not mean that the budget
will be out of balance ("budget deficit"), because reserves ("fund balances") from prior years can be used to cover the
difference. It does mean, however, that during the current year, the government is spending more than it is receiving.
This may be caused by an emergency (such as a natural catastrophe) requiring a large immediate expenditure or the
spending pattern may be part of a policy to use accumulated surplus fund balances. An operating deficit in any one
year may not be cause for concern, but frequent and increasing deficits can indicate that current revenues are not
supporting current expenditures and that serious problems may lie ahead. Budgetary analysis does not always reveal
operating deficits because they can be temporarily financed by short-term loans or by accounting transactions that, for
example, inappropriately accrue future revenues or transfer surplus fund balances from other funds. An analyst looking
for operating deficits should consider each fund separately, so that a surplus in one fund cannot hide a deficit in another.
Analyzing funds separately also helps to pinpoint emerging problems. Although such transactions can provide
necessary opportunities to meet current needs and can serve as a positive source of financing, they should be
scrutinized and used on a short term/temporary basis only.
Commentary:
This indicator shows the difference between the revenues and expenditures of the General Fund. Unlike the Federal
government, Colorado municipalities are prohibited by Local Budget Law from spending more money than they have.
However, when a city spends more than it collects in a year, the deficit can be covered by cash reserves, transfers
from other funds or from other sources. An operating deficit may occur as a result of lower revenues or higher costs
than were budgeted. An operating deficit may also result when City Council intentionally spends accumulated surplus
funds.
Frequent and increasing operating deficits may indicate that revenues are not supporting current expenditures. The
following occurrences are warning trends:
• Two consecutive years of operating deficits;
• A current operating fund deficit greater than that of the previous year;
• An operating deficit in two or more of the last five years;
• An abnormally large deficit - more than 5 to 10 percent of net operating revenues in any one year.
Analysis:
Overall this trend remains positive with no significant surpluses or deficits. The surplus in 2012 is a result of the increase
in audit revenue, in 2014 and 2015 from sales and use taxes, with retirement forfeitures also contributing to the surplus
in 2015. In 2016, property taxes, sales taxes, and audit revenue all contributed to the surplus. In 2013, while the City’s
budget anticipated spending down reserves by $3.4 million, reserves were spent down by just $440,000 at year end.
It should be noted that a $1.8 million interfund loan from the General Fund to the SUT Capital Fund in 2013 is considered
an expenditure for budgetary purposes, but is recorded as a non-spendable reserve at year-end.
23
Fund Balances Fund Balances
(General Fund)
20%
Warning Trend: 15%

Declining unrestricted Fund Balances as a
percentage of Net Operating Revenues 10%
5%
Formula:
Unrestricted Fund Balances 0%
Fiscal year
Fiscal year: 2012 2013 2014 2015 2016

Unrestricted Fund Balances 5,589,000 3,488,000 4,066,000 5,237,000 6,641,000
Unrestricted Fund Balances as a percentage
Description:
Positive fund balances can also be thought of as reserves, although the "fund balance" entry on a local
government's annual report is not always synonymous with "available for appropriation." The report may
show allocations on the fund balances, such as "Nonspendable" or “Restricted” for the TABOR required
"Emergency Reserve".
The size of a local government's fund balances can affect its ability to withstand financial emergencies. It
can also affect its ability to accumulate funds for capital purchases without having to borrow. In states that
allow it, jurisdictions usually try to operate each year at a small surplus to maintain positive fund balances
and thus maintain adequate reserves.
Nonspecific or general reserves are usually carried on the books as unrestricted fund balance in the general
operating fund. Sometimes special reserves are maintained in a separate fund. For example, reserves for
replacing equipment such as computers or vehicles may be kept in the fund balance of an internal service
fund (i.e., a fund used to charge operating departments for the use of equipment). Reserves can also be
appropriated as a budget item in some form of contingency account. Regardless of the way in which
reserves are recorded, an unplanned decline in fund balances may mean that the government will be unable
to meet a future need.
Commentary:
The City's Budget Policy regarding Fund Balance is to maintain a level for the Fund Balance in the General
Fund which provides a budget target, maintains year to year consistency, avoids wide fluctuations in budget
strategy, and provides resources for maximum service levels to keep the City in a strong financial position.
Analysis:
In 2012, the City intentionally spent down reserves, although audit revenue received in December 2012
resulted in an increased year-end fund balance. In 2013, the General Fund made a $1.8 million interfund
loan to the SUT Capital Fund to help finance a solar/photovoltaic project. Strong tax revenues in 2014-16
helped increase the fund balance.
The fluctuations in this trend are generally minimal and the percentage of Unreserved Fund Balance
remains at a very healthy level, even with the restriction of the interfund loan.
24
Liquidity Cash and Short-term Investments to Current
Liabilities
4.0
Warning Trend: 3.0
Decreasing amount of Cash and Short-term
Investments as a percentage of Current Liabilities 2.0
1.0
Formula:
Cash and Short-term Investments 0.0
Current Liabilities 2012 2013 2014 2015 2016
Fiscal year
Fiscal year: 2012 2013 2014 2015 2016

Cash and Short-term Investments 6,017,000 3,739,000 4,246,000 5,360,000 7,293,000
Current Liabilities * 1,855,000 1,908,000 1,882,000 2,052,367 2,169,000
Cash and short-term investments ratio to current
liabilities 3.2 2.0 2.3 2.6 3.4
* Includes amounts in escrow for development fees.
Description:
A good measure of a local government's short-run financial condition is its cash position. Cash position,
which includes cash on hand and in the bank, as well as other assets that can be easily converted to cash,
determines a government's ability to pay its short-term obligations. This is also known as liquidity, and the
immediate effect of insufficient liquidity is insolvency--the inability to pay bills. Low or declining liquidity can
indicate that a government has overextended itself in the long run. A cash shortage may be the first sign.
Commercial entities use a standard ratio of liquidity called the "quick ratio"; cash, short-term investments
and accounts receivable divided by current liabilities (short-term debt, current portion of long-term debt,
accounts payable, accrued and other current liabilities). If this ratio is less than one to one (or less than
100%), the commercial entity is considered to be facing liquidity problems. However, most of a commercial
entity's accounts receivable is collected within thirty days; a municipality's receivables are usually not
collected that quickly. Accordingly, the ratio of cash and short-term investments to current liabilities is a
better measure of a municipality's liquidity.
Comparing cash and short-term investments to current liabilities is also referred to as current account
analysis. In this terminology, an excess of liabilities over cash and short-term investments (a ratio of less
than one to one) would be referred to as a current account deficit and the reverse (a ratio of greater than
one to one) would be a current account surplus.
Commentary:
Liquidity is an indicator of the City's ability to pay its short-term obligations. Liquidity is the ratio of cash and
short-term investments to current liabilities. A low ratio may result in cash-flow problems for the City and
require greater use of short-term borrowing to cover expenses. The credit rating industry considers a
liquidity ratio of less than 1:1 cash to current liabilities to be a negative factor, although a single year at this
level is not considered serious.
Decreasing liquidity is a warning trend.
Analysis:
In 2013, the $1.8 million interfund loan reduced the cash and investments balance in the General Fund.
Cash increased in 2014-16 from operations and as portions of the loan was repaid. The trend continues to
be positive as the ratio remains well over 1:1.
25
Utility Operations Income and
Utility Operations Income and Loss
$1,500,000
Losses $1,000,000
$500,000
Warning Trend: $0
Recurring enterprise losses (deficits) 2012 2013 2014 2015 2016
-$500,000
(constant dollars)
-$1,000,000
Water Fund Operating Results - Net Income or (Loss)
Formula: Wastewater Fund Operating Results - Net Income or

Enterprise operating income or loss in constant dollars (Loss)
Drainage Fund Operating Results - Net Income or (Loss)
Fiscal year: 2012 2013 2014 2015 2016

Water Fund Operating Results - Net Income or (Loss) 1,090,000 536,000 735,000 864,000 443,000
Wastewater Fund Operating Results - Net Income or (Loss) 118,000 142,000 566,000 398,000 353,000
Drainage Fund Operating Results - Net Income or (Loss) 296,000 314,000 364,000 451,000 722,000
Description:
Enterprise losses are a special and highly visible type of operating deficit because enterprise fund programs
are expected to function as if they were commercially operated private entities, rather than governmental
"not for profit" entities. This means that the costs (expenses, including depreciation) of providing goods
and services to the public are to be recovered through user charges. In addition, enterprise operations
usually need to issue revenue bonds to finance capital improvement projects, and the interest rates and
covenants associated with the issuance of such bonds can be significantly affected by the operating position
of the enterprise. However, the cost of annual debt payments, along with costs associated with capital
projects, are not included in the calculations of net income/loss.
Enterprise fund programs common to local government are water, gas, electric utilities, swimming pools,
golf courses, airports, parking garages and transit systems. In times of financial strain, a local government
can raise taxes to increase support for a general fund program. However, enterprises are typically subject
to the laws of supply and demand. Managers of such programs who raise user fees or rates may find that
revenues actually decrease because customers limit their use of the service.
Commentary:
The City operates three utility enterprises that provide water and wastewater services as well as a storm
drainage utility. Like private businesses, these entities charge customers for services to cover costs of
operations. Net income or loss is the difference between the revenues and costs of providing these
services. Income is used to retire debt, fund capital construction, and to maintain an adequate level of
working capital.
Recurrent enterprise losses represent a warning trend.
Analysis:
Over the five year period, the Water, Wastewater, and Drainage Funds have all shown a net profit from
operations each year. The Water and Wastewater Funds had annual fee increases in 2012-14 to help
ensure positive operating results. Beginning in 2015, the Drainage Fund implemented a 5-year temporary
surcharge to maintain positive operating results and build reserves for needed capital projects.
Fluctuations in the profits in the Water Fund can be weather related as summer rains mean less water
consumption for irrigation purposes.
26
Community Center Operations - Community Center Operations Net Income or Loss
Income and Losses $300,000
$0
Warning Trend: -$300,000

Recurring enterprise losses (deficits)
-$600,000
Formula: -$900,000
Enterprise operating income or losses 2012 2013 2014 2015 2016
Fiscal year
Fiscal year: 2012 2013 2014 2015 2016

Community Center Operating Results - Net Income or (Loss) (279,000) (256,000) (381,000) (390,000) (472,000)
excluding depreciation
Net income or (loss)* (597,000) (577,000) (728,000) (743,000) (842,000)
*Net income or loss is after depreciation expense and before interest or transfers
Description:
usually need to issue revenue bonds to finance capital improvement projects, and the interest rates and
of the enterprise.
can raise taxes to increase support for a general fund program. Enterprises, however, are typically subject
to the laws of supply and demand, and managers of such programs who raise user fees or rates may find
that revenues actually decrease because customers limit their use of the service.
Commentary:
The City operates a community recreation center as a managerial enterprise fund. In many cases, the
community center entity charges customers amounts sufficient to cover costs of operations. However,
many of the services and programs established are not designed to cover operating costs and an annual
subsidy from the General Fund is required. Net income or loss is the difference between the revenues, not
including subsidies, and costs of providing these services. Depreciation is included as an expense in the
calculation of income/loss. Recurrent enterprise losses represent a warning trend.
Analysis:
The Golden Community Center operations are subsidized by an annual transfer from the General Fund.
The City Council has adopted policies regarding subsidies and percentages of cost recovery for various
programs and overall operations. The net operating losses are at acceptable levels per the policies.
Revenues have steadily improved since the expansion of the facility in 2007. Depreciation also increased
as a result of the expansion. Increased revenues and cost controls have resulted in lower operating losses
in 2012 and 2013. Higher wages needed to retain part-time and summer help, and higher operating costs
to support youth programs with increasing attendance have impacted the operating losses since 2014.
27
Cemetery Operations -
Cemetery Operations Net Income Or Loss
Income and Losses
$200,000
Warning Trend:
Recurring enterprise losses (deficits) $100,000
$0
-$100,000
Formula:
Enterprise operating income or losses
-$200,000
2012 2013 2014 2015 2016
Fiscal year
Fiscal year: 2012 2013 2014 2015 2016

Cemetery Operating Results - Net Income or (Loss) (121,000) (129,000) 7,000 (19,000) 149,000
Net income or (loss)* (157,000) (165,000) (30,000) (56,000) 114,000
Description:
usually need to issue revenue bonds to finance capital improvement projects and the interest rates and
of the enterprise.
Commentary:
The City operates a community cemetery. Like private businesses, this entity charges customers for
services to cover costs of operations. Net income or loss is the difference between the revenues and costs
of providing these services. Depreciation is included as an expense in the calculation of profit/loss.
Analysis:
The Cemetery was set up as a Managerial Enterprise Fund in 1994 to better track revenues and expenses,
with the anticipation that the Cemetery would not cover its costs. The Fund is subsidized as necessary
with appropriations from the General Fund. Investment earnings from the Cemetery Perpetual Care Fund
may also be used to subsidize cemetery operations.
Most operating expenses at the Cemetery are on-going and necessary while revenues fluctuate from year
to year based on need and service requests. The trend also changes as operating costs increase and with
periodic fee increases.
The amount of the loss in 2012 and 2013 was a concern. Subsequent fee increases and growing requests
for services resulted in a much smaller loss in 2015 and net income in 2014 and 2016. While recent results
are much more encouraging, the trend still warrants close monitoring going forward.
28
Splash Operations -
Splash Operations Net Income Or Loss
$0
Warning Trend:
Recurring enterprise losses (deficits) -$50,000
-$100,000
-$150,000
-$200,000
Formula: -$250,000
Enterprise operating income or losses 2012 2013 2014 2015 2016
Fiscal year
Fiscal year: 2012 2013 2014 2015 2016

Splash Operating Results - Net Income or (Loss) 13,000 2,000 13,000 (25,000) (5,000)
Description:
of the enterprise.
Commentary:
The City operates a community outdoor aquatic park. Like private businesses, this entity charges
customers for services to cover costs of operations. Net income or loss is the difference between the
revenues and costs of providing these services. Depreciation is included as an expense in the calculation
of income/loss.
Analysis:
When the Splash Aquatic Park opened in 2002, the goal was for revenues to cover operating costs. It was
never anticipated that the Fund would cover its capital costs, including depreciation. Capital maintenance
and equipment replacements are funded through the SUT Capital Fund or the Conservation Trust Fund.
Originally, the Park stayed open through Labor Day weekend. In recent years, the Park has seen reduced
hours or closure in mid-August as kids go back to school and the availability of lifeguards declines.
Fluctuations in temperatures have the greatest impact on financial performance. Favorable weather
conditions generally result in net operating income before depreciation.
The fund receives subsidies from the General Fund as necessary. The operating losses in 2015 and 2016
(excluding depreciation) are minimal and due to a combination of weather and higher wages. This may be
indicative of a trend that warrants monitoring going forward.
29
Golf Course Operations -
Golf Course Operations Net Income Or Loss
Income and Losses $1,000,000

Recurring enterprise losses (deficits)
$500,000
$250,000
Formula: $0
Enterprise income or losses 2012 2013 2014 2015 2016
Fiscal year
Fiscal year: 2012 2013 2014 2015 2016

Golf Course Operating Results - Net Income or (Loss) 993,000 720,000 1,059,000 1,057,000 949,000
Net income or (loss)* 327,000 55,000 391,000 380,000 222,000
Description:
of the enterprise.
Commentary:
The City operates Fossil Trace Golf Club, a municipal golf course. Like private businesses, this entity
charges customers for services to cover costs of operations. Net income or loss is the difference between
the revenues and costs of providing these services. Depreciation is included as an expense in the
calculation of income/loss.
Analysis:
Fossil Trace Golf Club continues to outperform all other municipal courses in the Denver metro area. It is
expected that the course will cover all costs of operations, including equipment replacement and capital
improvements, as well as pay its share of the debt issued to build the course.
Net profits excluding depreciation continue to be strong for the operation. Excellent weather in 2012
resulted in increased income. The reduced income in 2013 was weather related. Continued aggressive
marketing efforts, excellent merchandising, and great weather all contributed to strong income for the
course in 2014 and 2015. 2016 was an especially good year considering that the course replaced the golf
cart fleet. The fleet is replace every 4-5 years and typically results in a significant drop in income for the
year.
30
Museums Operations -
Museums Operations Net Income Or Loss
$0
Warning Trend:
Recurring enterprise losses (deficits) -$100,000
-$200,000
-$300,000
Formula: -$400,000
Enterprise income or losses 2012 2013 2014 2015 2016
Fiscal year
Fiscal year: 2012 2013 2014 2015 2016

Museums Operating Results - Net Income or (Loss) (314,000) (339,000) (291,000) (290,000) (317,000)
Description:
of the enterprise.
Commentary:
The City operates three museum related properties (the Golden History Center, the Astor House Museum,
and the Clear Creek History Park. Operating revenues come in the form of memberships, admission fees,
facility rentals, gift shop sales, food and beverage sales, advertising, grants and donations. Net income or
loss is the difference between the revenues and costs of operating the facilities. Depreciation is included
as an expense in the calculation of income/loss.
Analysis:
The Museums became City operated facilities July 1, 2010, and was set up as a Managerial Enterprise
Fund to track revenues and expenses, with the anticipation that they would not cover their costs. The
General Fund subsidizes the operations of the Museums.
The net loss was expected to stabilize at approximately the 2012 level and show improvement over time
as revenues are anticipated to increase through additional admissions, memberships, grants, and
donations. The increased loss in 2013 is of concern. Reduced operating expenses and increased
operating revenues in 2014 and 2015 brought the net loss to a more appropriate level. The increased loss
in 2016 is partly due to a decline in admissions and donations revenue from the temporary closure of the
Astor House for renovations.
31
TREND EVALUATION: DEBT INDICATORS
SUMMARY
Debt is an effective way to finance capital improvements and to balance out short-term revenue flows, but
its misuse can cause serious financial problems. Even a temporary inability to repay debt can damage the
City's credit rating, possibly increasing its rate for future borrowing.
The most common forms of long-term debt are general obligation, special assessment and revenue bonds.
Even when these types of debt are used exclusively for capital projects, the City needs to ensure that its
outstanding debt does not exceed its ability to repay as measured by the wealth of the community. Another
way to evaluate ability to repay is to consider the amount of principal and interest, or debt service that the
City is obligated to repay each year. Also to be considered are overlapping debt and other jurisdiction debts
against which the City has pledged its full faith and credit. Under the most favorable circumstances, the
City's debt is proportional in size and rate of growth to its tax base, does not extend past the useful life of
the facilities that it finances, is not used to balance the operating budget, does not require repayment
schedules that put excessive burdens on operating expenditures; and is not too high as to jeopardize its
credit rating.
An examination of the City's debt structure can reveal the following:
 Inadequacies in cash management procedures or expenditure controls

 Increasing reliance on long-term debt
 Decreasing expenditure flexibility (due to increased fixed costs in the form of debt service)
 Use of short-term debt to finance current operations
 Existence of sudden large increases or decreases in future debt service
 Amount of additional debt that the community can absorb
INDICATORS
 Current Liabilities
 Combined Long-Term (Overlapping) Debt
 Debt Service
32
Current Liabilities Current Liabilities
9%
Warning Trend:
Increasing Current Liabilities at the end of the
year as a percentage of Net Operating Revenues 6%
Formula: 3%
Current Liabilities 2012 2013 2014 2015 2016
Fiscal year
Fiscal year: 2012 2013 2014 2015 2016

Current Liabilities * 1,855,000 1,908,000 1,882,000 2,052,000 2,169,000
Current Liabilities as a percentage of Net Operating
Revenues 5.9% 6.3% 6.0% 6.1% 5.9%
* Includes amounts in escrow for development fees.
Description:
Current liabilities are defined as the sum of all liabilities due at the end of the fiscal year, including short-
term debt, current portion of long-term debt, all accounts payable, accrued liabilities and other current
liabilities.
A major component of current liabilities may be short-term debt in the form of tax or bond anticipation notes.
Although short-term borrowing is an accepted way to deal with uneven cash flow, an increasing amount of
short-term debt outstanding at the end of successive years can indicate liquidity problems, deficit spending
or both. Current Liabilities do not include interfund loans between funds.
Commentary:
Current liabilities are those amounts which the General Fund owes and expects to pay within one year.
This indicator shows City payments due at year end as a percentage of operating revenues. These liabilities
are comprised of accounts payable, payroll taxes, employee benefits payable and obligations to perform a
service in the near future.
Increasing current liabilities may indicate cash shortages and, therefore, is a warning trend.
Analysis:
Current Liabilities include accounts payable, deferred revenue and various escrow accounts that fluctuate
with normal operations.
The trend is stable and favorable over the five-year period, as the fluctuations in the percentage are minimal.
33
Combined Long-term Overlapping Debt as a Percentage of Assessed
(Overlapping) Debt Valuation
9%
Warning Trend: 6%
Increasing Long-term Overlapping Bonded Debt
as a percentage of Assessed Valuation 3%
Formula: 0%
Long-term Direct and Overlapping G.O. Debt 2012 2013 2014 2015 2016
Assessed Valuation Fiscal year
Fiscal year: 2012 2013 2014 2015 2016

Long-term Direct and Overlapping G.O. Debt 27,340,000 28,595,000 27,503,000 25,162,000 23,278,000
Assessed Valuation 426,755,000 444,619,000 454,315,000 518,624,000 535,804,000
Long-term Overlapping G.O. Debt as a percentage
of Assessed Valuation 6.4% 6.4% 6.1% 4.9% 4.3%
Description:
Overlapping debt is the net direct bonded debt of another jurisdiction that is issued against a tax base within
part or all of the boundaries of the community. Examples of other jurisdictions are the county, school, and
special districts. The level of overlapping debt is only that debt applicable to the property shared by the two
jurisdictions.
The overlapping debt indicator measures the ability of the community's tax base to repay the debt
obligations issued by all of its governmental and quasi-governmental jurisdictions. Like long-term debt of
the government itself, overlapping debt can be measured in terms of assessed valuation or another tax
base or repayment source.
Both special-purpose and overlapping debt need to be considered in assessing total indebtedness. First,
although the probability that your community would have to repay the debt may be slim, the potential is
real. Second, during depressed economic times, your government may be affected by the same adverse
conditions that might cause an overlapping agency to default, which would render the burden of assuming
additional debt even more severe.
Commentary:
Combined long-term debt represents the portion of debt which is dependent on property taxes for payment.
It is a measure of the community's ability to pay the combination of the City's long-term debt with the bonded
debt of jurisdictions overlapping the City.
The warning signals are as follows:

• Combined debt exceeding 10 percent of assessed valuation;
• An increase of 20 percent over the previous year in combined debt as a percentage of market
valuation;
• Combined debt as a percentage of market valuation increasing 50 percent over four years;
• Combined debt exceeding 90 percent of the amount authorized by state law.
Analysis:
The overlapping G.O. debt is from the Jefferson County School District and the Fairmount Fire Protection
District (FFPD). The percentage reduced in 2012 and 2014-16 as a result of lower outstanding debt
combined with higher assessed valuations. In 2013, the School District issued more G.O. debt and in 2014,
the FFPD issued additional G.O. debt. A very small percentage of properties within the City are also within
the FFPD.
The City does not have any G.O. debt.
34
Debt Service Debt Service
75%
Warning Trend:
Increasing Net Direct Debt Service as a 50%
Percentage of Sales/Use Tax One Cent Capital Revenue
25%
Formula:
Net Direct Debt Service
Sales/Use Tax One Cent Capital Revenue 0%
2012 2013 2014 2015 2016
Fiscal year
Fiscal year: 2012 2013 2014 2015 2016

Net Direct Debt Service 3,190,000 3,176,000 3,509,000 3,515,000 3,545,000
Sales/Use Tax One Cent Capital Revenue 6,420,000 5,835,000 6,176,000 6,368,000 6,581,000
Net Direct Debt Service as a percentage of Pledged
Revenue 49.7% 54.4% 56.8% 55.2% 53.9%
Description:
Debt service is defined here as the amount of principal and interest that a local government must pay each
year on net direct bonded long-term debt plus the interest it must pay on direct short-term debt. Increasing
debt service reduces expenditure flexibility by adding to the government's obligations. Debt service can be
a major part of a government's fixed costs, and its increase may indicate excessive debt and fiscal strain.
Commentary:
Debt service represents the annual payment of principal and interest on long-term debt. The only non-
enterprise debt of the City is paid from a portion of sales and use tax revenue. In November 2000, voters
approved Sales and Use Tax Revenue Bonds Series A, B, and C to fund construction of the Golf Course
and Splash Aquatic Park at Fossil Trace. $29 million in new debt was issued in 2001. Sales and Use Tax
Revenue Bonds pledge one cent of the City's three cent sales tax. In February 2006, Certificates of
Participation (COP's) were issued to finance the construction of the new Shops Facility and to assist in the
construction of the new Fire Station #1. The City has budgeted Sales and Use Tax Capital Fund revenues
to cover the debt service payments.
This indicator measures debt service on the bonds to the sales & use tax revenue stream which supports
it.
Analysis:
As the economy has improved, sales and use tax revenues have increased, including the additional audit
revenue in 2012. In 2010, the City took advantage of the low interest rate environment and issued bonds
to refund outstanding sales and use tax revenue bonds resulting in reduced debt service in 2011 – 2013,
with debt payments increasing in 2014. In December of 2016, the City refunding the 2006 COP’s, with the
decrease in annual debt service to begin in 2017.
As the Sales and Use Tax Capital Fund is specifically for capital needs of the City and is strictly discretionary
funds, the use of debt to finance capital needs is certainly acceptable. The fund still has sufficient and
available resources to address other capital needs of the City.
35
TREND EVALUATION: UNFUNDED LIABILITIES
SUMMARY
An unfunded liability is one that has been incurred during past/current year(s), but does not have to be paid
until a future year and for which reserves have not been set aside. It is similar to long-term debt in that it
represents a legal commitment to pay at some time in the future. If such obligations are permitted to grow
over a long period of time they can have a substantial effect on the City’s financial condition.
Two types of unfunded liability have been considered in this report. They are pension liability and employee
leave (compensated absences) liability. Both have significant potential to affect the City’s financial condition
because (1) they do not show up in the primary financial statements in a way that makes their impact easy
to assess and (2) they accumulate gradually over time. Pension and employee leave liabilities may go
unnoticed until they have created severe problems.
An analysis of the City’s unfunded liabilities can answer the following questions:
 Is the pension increasing? How fast is it growing? How much is unfunded?
 Are pension contributions, pension system assets and investment earnings keeping pace with the growth
in benefits?
 Is the amount of unused vacation, sick and compensatory leave time per employee increasing?
 Are policies for the payment of unused leave realistic compared to the City’s ability to pay?
INDICATORS
 Unfunded Pension Liability and Pension Assets (Volunteer Firefighters’ Pension)

 Accumulated Employee Leave
 Pension Plan Assets (Volunteer Firefighters’ Pension)
36
Unfunded Pension Liability
Unfunded Pension Liability and Pension
And Pension Assets Assets (Volunteer Firefighters' Pension)
(Volunteer Firefighters' Pension) 1.00%
Warning Trend: 0.75%
Increasing unfunded pension liability as a
percentage of assessed valuation 0.50%
0.25%
Formula: 0.00%
Unfunded pension liability
2012 2013 2014 2015 2016
Assessed Valuation Fiscal year
Fiscal year: 2012 2013 2014 2015 2016

Unfunded pension plan liability (vested benefits) na* 1,869,000 na* 1,932,000 na*
Assessed Valuation 426,755,000 444,619,000 454,315,000 518,624,000 535,804,000
Unfunded pension plan liability (vested benefits) as
a percentage of Assessed Valuation na* 0.42% na* 0.37% na*
*The actuarial study is performed every 2 years.
Description:
Pension plans can represent a significant expenditure obligation for local governments. Basically, there are two
ways to fund pension plans: "pay as you go," when benefits need to be paid, or "full funding" in which benefits
are paid as accrued; money is invested in a reserve against the time when benefits will have to be paid. Under
the pressure of balancing the annual budget, some governments choose the pay-as-you-go approach or a partial
funding approach. Either approach can work on a short-term basis, however, deferral can create a problem in a
future year that is more serious than the problem being avoided in the current year--if the dollars are not available
in the future year to meet the pension obligations.
Growth in unfunded liability for vested benefits places an increasing burden on the tax base. The significance of
this burden in relation to the community's ability to pay can be measured by comparing the unfunded liability to
changes in assessed valuation. This comparison assumes that the ability to pay is directly related to assessed
valuation, as would be the case if property taxes were the primary source of revenue for the payment of vested
benefits.
If another revenue source will be the primary source for the payment of pension liabilities, that source can be
substituted for assessed valuation. In cases where assessed valuation or other categories of the revenue base
do not seem appropriate, the per capita measure can be used to show the growth of pension liability in relation
to population growth; this measure assumes that the community's ability to generate revenues is directly related
to population size.
Commentary:
The unfunded pension liability is an estimate of the cost of the future retirement payments of present and retired
volunteer firefighters for which the City does not have funds already set aside. Pension assets are funds reserved
for retirement payments.
Inadequate funding of retirement programs can cause large, long-term liabilities. An increasing unfunded
pension liability or diminishing pension assets are both warning indicators.
Analysis:
The actuarial studies are completed every two years dated January 1 of odd numbered years, but not available
until later in the year.
The Unfunded Pension Liability increased per the January 2013 actuarial study, primarily based on a reduced
assumed contribution from the City and a reduced assumed interest rate. As a result, the City made an additional
contribution in 2013 and increased the contribution for 2014. Market volatility had a negative impact on the 2015
study, resulting on the need for the City to increase the contribution again beginning in 2016.
37
Accumulated Employee Leave Unused Leave per General Fund Employee (in days)
30
Warning Trend:
Increasing number of unused vacation and 20
sick leave days per employee
10
Formula:
Total days of unused vacation and sick leave
Number of employees 0
2012 2013 2014 2015 2016
Fiscal year
Fiscal year: 2012 2013 2014 2015 2016

Total days of unused vacation and sick leave 3,437 3,496 3,159 3,727 3,309
Number of general fund employees* 145 147 147 154 156
Days of unused leave per general fund municipal
employee 23.7 23.8 21.5 24.2 21.2
* Budgeted full-time employees
Description:
Local governments usually allow their employees to accumulate some portion of unused vacation and sick
leave to be paid at termination or retirement. Although leave benefits initially represent only the opportunity
cost of not having work performed, these benefits become a real cost when employees are actually paid
for their accumulated leave, either during their employment or at termination or retirement.
Commentary:
Accumulated employee leave is the value of unused vacation, sick and compensatory time leave accrued
by General Fund City employees. For employees who retire or leave the employment of the City, the
unused leave represents an actual cost. For employees who remain on the payroll and use their leave, it
poses no additional costs to the City, except in loss of services while they are absent.
Increasing accumulated leave indicates growing unfunded liabilities and is considered a warning trend.
Analysis:
Minimal employee turnover over the years’ account for the increase in leave time. The decreases in 2014
and 2016 are due to retirements and other long-term employees separating employment with the City.
Additional employees and minimal turnover caused the increase in 2015.
Vacation time accrues anywhere from 8 to 14 hours per month depending on years of service. Sick leave
accrues at 8 hours per month.
The City has caps at which point vacation and sick time stop accumulating. This limits the liability the City
incurs and provides an incentive for employees to use leave time as needed.
38
Pension Plan Assets (Volunteer Volunteer Firefighters' Pension Benefits Paid
Firefighters' Pension) 20%
as a Percentage of Plan Assets
10%
Warning Trend: 0%
Increasing benefits paid 2012 2013 2014 2015 2016
as a percentage of Pension Plan Assets
Annual Pension Plan Contributions as a
Formula: Percentage of Annual Benefits
Pension benefits paid 60%
Pension Plan Assets
55%
Pension plan contributions
50%
Pension benefits paid
45%
2012 2013 2014 2015 2016
Fiscal year: 2012 2013 2014 2015 2016

Pension benefits paid 352,000 381,000 389,000 380,000 394,000
Volunteer's firefighters' pension assets 2,717,000 2,921,000 2,915,000 2,777,000 2,750,000
Annual pension plan benefits paid as a percentage
of plan assets 13.0% 13.0% 13.3% 13.7% 14.3%
Pension plan contributions 208,000 198,000 198,000 198,000 228,000
Pension benefits paid 352,000 381,000 389,000 380,000 394,000
Annual pension plan contributions as a percentage
of annual benefits 59.1% 52.0% 50.9% 52.1% 57.9%
Description:
The Volunteer Firefighters' Pension Plan's assets are held primarily as cash or investments. A decline in
the ratio of plan assets to benefits can indicate serious problems in the management of the pension plan.
An additional ratio to consider is the annual amount of pension receipts as a percentage of annual benefits
paid, which focuses more specifically on a pension plan's ability to meet its current cash requirements.
Commentary:
Pension assets are funds reserved for retirement payments. Inadequate funding of retirement programs
can cause large, long-term liabilities. An increasing unfunded pension liability or diminishing pension assets
are both warning indicators. The Plan receives contributions from the City in an amount not to exceed one-
half mill of property tax revenue. The State contributes up to 90% of the City's Contribution, but not to
exceed one-half mill of property tax revenues.
Analysis:
The City's Volunteer Fire Fighters' Pension Fund is administered by the Fire and Police Pension Association
(FPPA) and is overseen by the City of Golden Fire Pension Board. The Board is comprised of
representatives from City Administration, City Council, the Fire Department and Citizen Representatives.
Benefits paid increased in 2013 as additional firefighters began receiving benefits.
Due to fewer volunteers staying with the department long enough to vest in the plan, it was closed to new
volunteers as of January 1, 2011. The City reduced its contribution amount accordingly. Based on the
results of the 2015 actuarial study, the City increased its contribution. The State matching contribution has
stayed constant at $77,940 annually. Plan Assets historically have increased each year as a result of
contributions and investment earnings. Increased benefits paid and market volatility has impacted plan
assets since 2013.
Although the increase in the trend is not significant, it still bears watching.
39
TREND EVALUATION: CAPITAL PLANT
SUMMARY
Most of the City's wealth is invested in its physical assets or capital plant (i.e. streets, buildings, utility
networks and equipment). If these assets are not properly maintained or are allowed to become obsolete,
the following often results: (1) decreased usefulness of the assets, (2) increased cost of maintenance and
replacement, and (3) decreased attractiveness of the community as a place to live or do business.
The City is committed to both the maintenance and upkeep of its capital assets. Over the past five years,
the City has made extreme efforts to avoid the deferral of needed capital plant expenditures. As part of its
budget process, the City commits a significant amount of capital program budget dollars to both maintaining
its various infrastructure (including streets; curbs, gutters and sidewalks; parks and open space; and
utilities) and to catch-up on improvements deferred in prior periods. Some of the problems associated with
continued deferred maintenance are the following:
 Reduction in residential and business property values.
 Loss of efficiency that, for example, can result from an obsolete truck that spends more time in the garage
than on the street.
 Increased costs of bringing a facility up to acceptable standards (retrofitting); i.e., if resurfacing a street
has been delayed for too long so that the street now has to be completely reconstructed.
 Potential for a large future financial obligation to complete a backlog of maintenance work and necessary
equipment purchase replacement.
 Transference of the true cost of receiving current services to future taxpayers.
INDICATORS
 Capital Equipment Outlay

 Depreciation – General Government and Business Type Activities
 Infrastructure Replacement
40
Capital Equipment Outlay
Capital Equipment Outlay
20%
Warning Trend:
15%
Three or more years decline in capital outlay from operating
and internal service funds as a percentage of net operating
10%
expenditures.
Formula: 5%
Capital outlay from operating and internal service funds
Net Operating Expenditures 0%
2012 2013 2014 2015 2016
Fiscal year
Fiscal year: 2012 2013 2014 2015 2016

Total Capital Equipment Outlay 2,265,000 1,291,000 1,578,000 3,474,000 1,155,000
Net Operating Expenditures 22,016,000 21,900,000 22,809,000 23,002,000 24,905,000
Capital Outlay as a percentage of Operating
Expenditures 10.3% 5.9% 6.9% 15.1% 4.6%
Description:
Expenditures for operating equipment--such as vehicles and computers--drawn from the operating budget
are usually referred to as "capital outlay." Capital outlay items normally include equipment that will last
longer than one year and have an initial cost above a significant minimum amount, such as $5000. Capital
outlay does not include capital budget expenditures for construction of infrastructure such as streets,
buildings or water/wastewater lines. The purpose of capital outlay in the operating budget is to replace
worn equipment or add new equipment. The ratio of capital outlay to net operating expenditures is a rough
indicator of whether the stock of equipment is being adequately replaced. Over a number of years, the
relationship between capital outlay and operating expenditures is likely to remain about the same. If this
ratio declines in the short run (one to three years), it may mean that the local government's needs are
temporarily satisfied, since most equipment lasts more than one year. A decline persisting over three or
more years can indicate that capital outlay needs are being deferred, which can result in the use of
inefficient or obsolete equipment.
Commentary:
This category does not measure expenditures for major capital projects funded by the one cent sales and
use tax or in the enterprise capital programs funds such as drainage, water, and wastewater.
The warning trend is declining capital expenditures, which may indicate the use of inefficient or obsolete
equipment.
Analysis:
With the City's capital expenditure threshold at $5,000, a large portion of office and computer equipment is
not considered capital. A percentage of capital outlay between 5 - 7% appears to be appropriate.
Over the five-year period, the average capital outlay is within the appropriate range. The spike in 2012 is
a result of the purchase of a new fire truck and a new finance software system. The increase in 2015 is
due to the installation of numerous PV/Solar panels at several locations within the City.
41
Depreciation - Governmental and Business
Type Activities Warning Trend:
Decreasing Depreciation Expense as a
Formula: Percentage of Depreciable Capital Assets (at cost) for
Depreciation Expense Governmental and Business Type Activities
Cost of Capital Assets
Governmental Activities Business Type Activities

5% 5%
4% 4%
3% 3%
2% 2%
1% 1%
0% 0%
2012 2013 2014 2015 2016 2012 2013 2014 2015 2016
Fiscal year Fiscal year
Fiscal year: 2012 2013 2014 2015 2016

Depreciation Expense for Governmental Activities 3,643,000 3,995,000 4,325,000 4,497,000 4,857,000
Cost of Depreciable Capital Assets Governmental Activities 122,746,000 127,148,000 135,250,000 118,671,000 122,321,000
Depreciation Expense as a Percentage of total Fixed
Assets 3.0% 3.1% 3.2% 3.8% 4.0%
Depreciation Expense for Business Type Activities 3,199,000 3,232,000 3,340,000 3,838,000 3,964,000
Cost of Depreciable Capital Assets Business Type Activities 117,431,000 119,438,000 122,868,000 147,825,000 152,258,000
Depreciation Expense as a percentage of total Fixed
Assets 2.7% 2.7% 2.7% 2.6% 2.6%
Description:
Depreciation is the mechanism by which the cost of a fixed asset is amortized over its estimated useful life. Depreciation
is usually recorded only in enterprise and internal service funds. Total depreciation cost is generally a stable proportion
of the cost of fixed assets, because older assets that have been fully depreciated are often removed from service and
replaced by newer assets.
If depreciation costs are declining as a proportion of fixed asset costs, the assets on hand are probably being used
beyond their estimated useful life. This can result in the inefficiencies and higher costs discussed under Capital
Equipment Outlay and Infrastructure Replacement. If the ratio is declining because obsolete assets are not being
replaced, it can indicate that the enterprise or internal service funds lack the resources to remain solvent. However, it
could be that the estimated useful life of an asset or assets was initially underestimated or that the scale of operations
has been reduced; either instance could also produce a decline in the ratio of expenses to cost of assets.
Commentary:
This indicator primarily provides information about assets in the City’s enterprise funds (water, wastewater, community
center, golf course, etc.), and internal service funds (fleet management and I.T. operations). Depreciation allocates
the cost of a fixed asset over its useful life. Total depreciation cost is generally a stable proportion of the cost of fixed
assets, because older assets that have been fully depreciated are removed from service and replaced with newer
assets.
Analysis:
The City has an ongoing commitment to purchase and replace machinery and equipment as needed. The capitalization
threshold is currently $5,000. Large investments in capital assets in a given year can cause the percentage to decline.
Overall, the percentages over the five year period have remained very stable.
42
Infrastructure Replacement Street Paving
$2,400,000
$2,000,000
Warning Trend: $1,600,000

Recurring capital funded less than capital required $1,200,000
$800,000
Formula: $400,000
$0
Capital funded 2012 2013 2014 2015 2016
Capital required
Street paving funded
Funding needed to keep streets in current condition
Concrete Replacement Utility Line Replacement

$1,200,000 $1,800,000
$1,500,000
$800,000 $1,200,000
$900,000
$400,000 $600,000
$300,000
$0 $0
2012 2013 2014 2015 2016 2012 2013 2014 2015 2016
Concrete replacement funded Utility line replacement funded

Funding needed to keep concrete in current condition Funding needed to keep utility lines in current condition
Fiscal year: 2012 2013 2014 2015 2016

Street paving funded 1,440,000 1,392,000 1,322,431 1,897,000 2,019,000
Funding needed to keep streets in current condition 1,200,000 1,300,000 1,400,000 1,500,000 1,800,000
Paving funded as a percentage of capital required 120.0% 107.1% 94.5% 126.5% 112.2%
Concrete replacement funded 828,000 681,000 917,010 954,000 1,023,000
Funding needed to keep concrete in current
condition 750,000 800,000 850,000 900,000 980,000
Concrete replacement funded as a percentage of
capital required 110.4% 85.1% 107.9% 106.0% 104.4%
Utility line replacement funded 1,279,000 1,281,000 1,305,000 1,247,000 1,295,000
Funding needed to keep utility lines in current
condition 1,200,000 1,225,000 1,250,000 1,250,000 1,270,000
Utility line replacement funded as a percentage of
capital required 106.6% 104.6% 104.4% 99.8% 102.0%
43
Description:
Enduring assets, such as streets, municipal buildings and bridges, are built at tremendous cost, and their
decline can have far-reaching effects on business activity, property value and operating expenditures.
Deferring maintenance of such assets can also create significant unfunded liability.
In general, maintenance expenditures should remain relatively stable (in constant dollars), relative to the
amount and nature of the assets. A declining ratio between maintenance expenditures and size of asset
stock may be a sign that the government's assets are deteriorating. If the trend persists, deterioration will
push up maintenance expenditures.
Commentary:
Infrastructure includes streets, fire hydrants, storm sewers, manholes, traffic lights, curb, gutter and
sidewalk (concrete), water and wastewater pipelines (utility lines), etc. The City of Golden's Public Works
Department has an excellent infrastructure management program. Public Works assesses the condition of
the City's largest infrastructure investments (streets, concrete and utility lines) on an annual basis. By
projecting the total life of these assets with their replacement cost in today's dollars, the City derives the
annual dollar amount needed to invest in the City's infrastructure to maintain its current condition.
Any year in which actual funding of infrastructure replacement was less than the funding needed produces
a negative indicator.
Analysis:
The average funding for Infrastructure Replacement for the past five years is 106.8%. Street paving is
funded through Highway Users Tax revenues and transfers from the Sales & Use Tax Capital Fund, with
additional transfers from the General Fund as funds are available and needed. Concrete replacement is
funded through the Sales & Use Tax Capital Fund and balanced against other capital requirements. Utility
lines are funded through the Water, Wastewater, and Storm Drainage Funds.
Annual replacement percentages can vary based on the availability of contractors and materials, and is
weather dependent. Unspent budgets are carried over to the following year to help ensure the infrastructure
replacement program continues to be adequately funded.
The City is committed to maintaining its infrastructure and replacing old, worn out, and outdated plant and
equipment as needed.
Beginning in 2011, the City has allocated additional funds to street paving in an effort to improve the overall
street quality index.
44
TREND EVALUATION: LOCAL ECONOMIC AND DEMOGRAPHIC
CHARACTERISTICS
SUMMARY
Community needs and resource indicators encompass economic and demographic characteristics, such
as population, income, property value, employment and business activity. Local Economic and
Demographic Characteristics is a category in which tax base and economic and demographic
characteristics are treated as different sides of the same coin. On one side, tax base determines a
community's wealth and its ability to generate revenue (that is, level of personal, commercial and industrial
income). On the other side are economic and demographic characteristics that affect community demands,
like public safety, capital improvements and social services.
Changes in community needs and resources are interrelated in a continuous, cumulative cycle of cause
and effect. For example, a decrease in population lowers the demand for housing and causes a
corresponding decline in the market value of homes. This in turn reduces property tax revenue. Initial
population decline also has a negative effect on retail sales and income, causing City revenues to drop
even further. Expenditures for fixed costs that are impervious to declines in population and business activity
cannot always be balanced to the revenue loss with a proportionate reduction in expenditures. In fact, the
City may be forced to raise taxes to make up for lost revenue, placing a greater burden on the remaining
population. As economic conditions decline and taxes rise, the community becomes a less attractive place
to live and the population may further decline.
An examination of local economic and demographic characteristics can identify the following situations:
 A decline in the tax base as measured by population, property value, employment or business activity;
 A need to shift public service priorities due to a change in the age or income of residents, or the type of
density of physical development; and/or
 A need to reassess public policies if, for example, the jurisdiction has lost business to surrounding
communities, and/or national/regional economic conditions have changed.
INDICATORS
 Median Age
 Property Value
 Employment Base
 Business Activity
 Population
45
Median Age Median Age
50
Warning Trend: 40
Increasing median age of population
30
20
Formula: 10
Median age of population
0
2012 2013 2014 2015 2016
Fiscal year
Fiscal year: 2012 2013 2014 2015 2016

Median Age 34.60 33.90 31.40 31.70 30.10
Description:
As is the case with changes in population size, the relationship between the population's median age and
other economic and demographic factors is not clear. However, evidence does indicate that an aging
population and an increase in the number of senior citizens can hurt both the revenue and expenditure
profiles of a local government.
Revenues can be affected for two reasons: first, the income of senior citizens is often in the form of social
security and pension payments, which might not change at the same rate as the general economy, and
senior citizens often have full or partial exemption from property taxes and user charges; second, older
persons may spend less money than younger persons and generally spend less money on items subject
to sales tax.
Meanwhile, as the proportion of senior citizens increases, expenditure rates for government services may
increase because senior citizens often require specialized programs, especially in the areas of health,
welfare and transportation.
As younger age groups leave a community or decrease as a percentage of population, business activity
can decrease in greater proportion, especially if most of the people leaving are between the age of twenty-
five and forty; people in this age group usually spend more of their income than any other age group. In
addition, if this age group leaves, the community loses a significant portion of its labor force, which can
further damage the local economy. However, if the increase in median age is caused by a drop in the
number of families with young children, this can have a favorable effect on expenditures because it reduces
needs for schools, recreation, and related programs.
Commentary:
An aging population can affect the type of services the City provides and the amount of resources with
which the City has to address the service need.
An increasing trend is a warning signal.
Analysis:
Nationally the trend has been and continues to be an aging population. The trend is not unexpected as the
baby boomers advance with no offsetting increase in births. Along with this trend is the fact that many
retiring baby boomers have the greatest share of disposable income.
The median age information is for Jefferson County as a whole. This information is not available for Golden,
although it is estimated by the City's Planning Department that the median age of Golden residents is 2-3
years younger. Golden continues to have a healthy population mix with students from the Colorado School
of Mines, young adults and families. Recent construction of apartments and mixed use development in
Golden has been a draw for young adults and young families.
46
Property Value Property Values
30%
Warning Trend: 20%
Declining growth or drop in the market
value of residential, commercial, or
10%
industrial property (constant dollars)
0%
Formula:
Change in property value (constant dollars) -10%
Property value in prior year (constant dollars) 2012 2013 2014 2015 2016
Fiscal Years
Fiscal year: 2012 2013 2014 2015 2016

Market value of property 2,621,108,000 2,671,838,000 2,676,553,000 3,250,502,000 4,198,831,000
Property value
(constant dollars) 2,570,786,000 2,600,064,000 2,534,375,000 3,041,928,000 3,824,239,000
Property value in prior
year (constant dollars) 2,504,511,000 2,570,786,000 2,600,064,000 2,534,375,000 3,041,928,000
Percent change in
property value
(constant dollars) 2.6% 1.1% -2.5% 20.0% 25.7%
Description:
Changes in property value are important because most local governments depend on property taxes for a
substantial portion of their revenues. This is especially true in a community with a stable or fixed tax rate;
the higher the aggregate property value, the higher the revenues. Communities in the midst of population
and economic growth are likely to experience short-run, per unit increases in property value. This is
because in the short-run, the housing supply is fixed and the increase in demand created by growth forces
prices up. Declining areas are more likely to see a decrease in the market value of properties. The effect
of declining property value on governmental revenues depends on the government's reliance on property
taxes; the extent to which the decline will ripple through the community's economy affecting other revenues
such as sales tax, is more difficult to determine. All economic and demographic factors are closely related;
a decline in property value will most likely not be a cause, but a symptom of other underlying problems.
Commentary:
Assessor's market value of taxable real, personal and utility property in the City of Golden is expressed in
constant dollars to determine if it is changing in an overall positive or negative direction.
A decreasing trend is seen as a warning signal.
Analysis:
Property values are reassessed every other year (odd year) resulting in spikes in the indicator as
assessments catch up with the market.
Increases in property values are due to a combination of rising residential housing prices, commercial and
residential development, and annexations.
The amount of the decline 2014 is minimal and is more an indicator of the increased CPI, which shows
signs of an improved economy. The 2015 property valuation reassessment, along with new residential and
commercial construction that hit the property tax rolls in 2016 resulted in large increases in the overall
market value of properties in the City.
47
Employment Base Unemployment Rate
10.0%
Warning Trend: 7.5%

Increasing rate of local unemployment or a
5.0%
decline in the number of jobs within the community
2.5%
Formula: 0.0%
Local unemployment rate and/or 2012 2013 2014 2015 2016
the number of jobs within the community Fiscal year
Fiscal year: 2012 2013 2014 2015 2016
Unemployment rate 7.4% 7.0% 7.6% 6.4% 6.0%
Description:
The unemployment rate and the number of jobs within the community are considered together because
they are closely related; for the purpose of this discussion, they will be referred to as the employment base.
Employment base is related directly to business activity and personal income. Changes in the
unemployment rate are related to changes in personal income; and thus a measure of, and an influence
on, the community's ability to support its business sector. 1
If the employment base is growing, is sufficiently diverse to provide a cushion against short-run economic
fluctuations or a downturn in one sector, and it provides sufficient income to support the local business
community, then it will have a positive influence on the local government's financial condition. A decline in
the employment base--as measured by unemployment rate or number of available jobs--can be an early
sign that overall economic activity is declining and that government revenues may be declining as well.
Commentary:
The unemployment rate is the number of unemployed persons as a percent of all persons working or
seeking work. A decline in unemployment may signal a strong employment base. An increase would signal
a warning.
Analysis:
Unemployment figures are for Jefferson County as a whole.
The recession of 2008 and 2009 caused increased unemployment that carried into 2012. Colorado and
Jefferson County have recovered faster than most of the nation, with unemployment rates declining in 2013.
The increase in 2014 was unexpected, but has corrected and improved in 2015 and 2016.
1
The unemployment rate reflects the employment status of citizens who live within a community's
geographic boundaries, regardless of whether their jobs are within or outside the community.
48
Business Activity
Retail Sales (constant dollars)
$600,000,000
Warning Trend:
Decline in business activity as measured by retail sales, $450,000,000
number of business units, gross business receipts,
number of acres devoted to business and market or $300,000,000
assessed value of business property
$150,000,000
(constant dollars where appropriate)
$0
2012 2013 2014 2015 2016
Formula: Fiscal year
Retail Sales constant dollars
Number of Businesses
600
500
400
300
200
100
0
2012 2013 2014 2015 2016
Fiscal year
Fiscal year: 2012 2013 2014 2015 2016

Retail Sales 392,186,000 409,146,000 440,947,000 472,511,000 502,231,000
Retail Sales (constant dollars) 392,186,000 398,155,000 417,524,000 442,192,000 457,425,000
Number of Retail Businesses (within City limits) 496 516 528 532 532
Description:
The level of business activity affects a local government's financial condition in two ways. First, it directly
affects any revenue yields that are a product of business activity, such as those from sales taxes. Second,
it has indirect influences; a change in business activity affects demographic and economic areas such as
personal income, property value and the employment base. Changes in business activity also tend to have
cumulative effects. For example, a decline in business activity can harm a community's employment base,
income and property value, which can in turn create further decline in business activity.
Commentary:
For both indicators, an increasing trend is a positive indicator. A decrease signals a downward trend in the
economy which will adversely affect City revenues.
Analysis:
In general, retail sales fluctuate with the economy and changes in the CPI. For 2012-16, both retail sales
in constant dollars and gross retail sales have improved each year, clearly an indication of the strong
economy in Golden.
The number of businesses can fluctuate as businesses close and new businesses open (including home
based businesses). Commercial development, especially downtown, in recent years has provided
additional opportunities for new businesses to locate in the City. The overall increase in the number of
retail businesses over the last 5 years is another indication of the confidence in the local economy.
49
Population Population
25,000
Warning Trend: 20,000
Rapid change in population size 15,000
10,000
5,000
0
Formula: 2012 2013 2014 2015 2016
Population
Fiscal year
Fiscal year: 2012 2013 2014 2015 2016
Population 19,035 19,186 19,393 19,615 20,330
Description:
The exact relationship between population change and other economic and demographic factors is
uncertain. However, population change can directly affect governmental revenues. For example, some
taxes are collected on a per capita basis, and many intergovernmental revenues and grants are distributed
according to population; a sudden increase in population can create immediate pressures for new capital
outlay and higher levels of service. In the case of annexations, where the capital infrastructure is already
in place, there may still be a need to expand operating programs.
A decline in population would at first glance, appear to relieve the pressure for expenditures, because the
population requiring services is smaller, but in practice, a local government faced with population decline is
rarely able to make reductions in expenditures that are proportional to population loss. First, many costs,
such as debt service, pensions and governmental mandates, are fixed and cannot be reduced in the short-
run. Second, if the out-migration is composed of middle and upper-income households, then those
remaining in the community are likely to be the poor and aged who depend the most on government
services. In addition, the interrelationship of population levels, and other economic and demographic
factors tends to give population decline a negative cumulative effect on revenues; the greater the decline,
the more adverse the effects on employment, income, housing and business activity.
Commentary:
The population of the City of Golden is determined by the U. S. Census count made every 10 years and
estimates during non-Census years prepared by the City of Golden planning department.
Rapid change is the warning trend for this indicator, because abrupt increases or decreases in population
can increase service costs or reduce City revenue bases.
Analysis:
The Denver Metro Area continues to see a net population influx.
The City's annual population changes continue to be minimal and fairly stable due the one percent growth
cap for residential construction approved in 1995. The economic downturn impacted the housing market
for a few years as housing starts were well below the City’s growth cap. Increased housing at the School
of Mines and multi-family developments since 2013 have resulted in increased population numbers that
should continue over the next few years.
Planning for future needs and the continued growth of the population are addressed annually in the Budget
and in the 10-Year Capital Improvement Plan.
50

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FINANCIAL TREND MONITORING SYSTEM

AN EVALUATION OF FINANCIAL TRENDS

The Finance Department

Financial Condition ................................................................ 6

TREND EVALUATIONS BY FACTOR

Factor Indicator Page

Revenues Revenues Per Capita .............................................................. 10

Expenditures Expenditures Per Capita.......................................................... 18

Operating Position Operating Revenues Over (Under) Expenditures ................... 23

Debt Indicators Current Liabilities ..................................................................... 33

Unfunded Liabilities Unfunded Pension Liability and Pension Assets

Capital Plant Capital Equipment Outlay ........................................................ 41

Local Economic and Median Age ............................................................................. 46

 Local Economic and Demographic Characteristics

HOW TO USE THIS REPORT

 Formula for computing the indicator

 General Fund Revenues

 Net Operating Revenues

 Restricted Operating Revenues

 Elastic Tax Revenues

Includes general fund sales and non-building use tax revenues.

 Net Operating Expenditures

 Fringe Benefit Expenditures

 General Fund Operating Surplus (Deficit)

 Enterprise Operations Income and Loss

 Net Direct Debt Service

 Unfunded Pension Plan Liability

 Deterioration of the revenue base

 Revenues Per Capita

Fiscal year: 2012 2013 2014 2015 2016

Fiscal year: 2012 2013 2014 2015 2016

Warning Trend: 7.5%

Fiscal year: 2012 2013 2014 2015 2016

Warning Trend: 30%

Fiscal year: 2012 2013 2014 2015 2016

Fiscal year: 2012 2013 2014 2015 2016

Fiscal year: 2012 2013 2014 2015 2016

Fiscal year: 2012 2013 2014 2015 2016

 Excessive growth of expenditures as compared to revenue growth or community wealth

 Expenditures Per Capita

Warning Trend: $2,000

Per household Per capita

Fiscal year: 2012 2013 2014 2015 2016

Fiscal year: 2012 2013 2014 2015 2016

Fiscal year: 2012 2013 2014 2015 2016

Increasing employee benefits as a percent of salaries is a warning trend.

BALANCING THE CURRENT BUDGET

 A pattern of continuing operating deficits

 Operating Revenues Over/(Under) Expenditures

Fiscal year: 2012 2013 2014 2015 2016

*Encumbrances not included

Warning Trend: 15%

Fiscal year: 2012 2013 2014 2015 2016

Fiscal year: 2012 2013 2014 2015 2016

Decreasing liquidity is a warning trend.

Formula: Wastewater Fund Operating Results - Net Income or

Fiscal year: 2012 2013 2014 2015 2016

Recurrent enterprise losses represent a warning trend.