HomeMy WebLinkAboutJune-30-2003CITY OF PADUCAH,
KENTUCKY
COMPREHENSIVE
ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 309 2003
FINANCE DEPARTMENT
CITY OF PADUCAH,
KENTUCKY
City of Paducah
Paducah, Kentucky
Comprehensive Annual Financial Report
Year Ended June 30, 2003
Issued by the
Finance Department
CITY OF PADUCAH, KENTUCKY
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2003
TABLE OF CONTENTS
Exhibit No.
Page No.
Introductory Section:
Letter of Transmittal
1- 8
Organizational Chart
9
Principal Officials
10
GFOA Certificate of Achievement
11
Financial Section:
Independent Auditor's Report
12-13
Required Supplementary Information:
Management's Discussion and Analysis
Basic Financial Statements:
Government -wide Financial Statements:
Statement of Net Assets
1
25-26
Statement of Activities
2
27-28
Fund Financial Statements:
Governmental Funds:
Balance Sheet
3
29-30
Reconciliation of the Governmental Funds Balance
Sheet to Statement of Net Assets
4
31
Statement of Revenues, Expenditures and Changes
in Fund Balances
5
32-33
Reconciliation of the Statement of Revenues,
Expenditures and Changes in Fund Balances of
Governmental Funds to the Statement of Activities
6
34-35
Proprietary Funds:
Statement of Net Assets
7
36
Statement of Revenues, Expenses and Changes in
Fund Net Assets
8
37
Statement of Cash Flows
9
38
Fiduciary Funds:
Statement of Net Assets
10
39
Statement of Changes in Net Assets
11
40
Component Units Financial Statements:
Statement of Net Assets
12
41-44
Statement of Activities
13
45
Notes to Financial Statements
46-70
Required Supplementary Information:
Pension Trust Fund Schedules
A-1
71
Budgetary Comparison Schedule (Budgetary Basis) —
General Fund
A-2
72-76
Budgetary Comparison Schedule (Budgetary Basis) —
General Capital Improvements Fund
A-3
77
Budgetary Comparison Schedule (Budgetary Basis) —
Downtown Capital Improvements Fund
A-4
78
Budgetary Comparison Schedule — Note to RSI
A-5
79
Exhibit No.
Paze No.
Supplementary Information:
Nonmajor Governmental Funds:
Combining Balance Sheet
B-1
80-81
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances
B-2
82-83
Nonmajor Proprietary Funds:
Combining Statement of Net Assets
C-1
84
Combining Statement of Revenues, Expenses and
Changes in Fund Net Assets
C-2
85
Combining Statement of Cash Flows
C-3
86
Internal Service Funds:
Combining Statement of Net Assets
D-1
87
Combining Statement of Revenues, Expenses, and
Changes in Fund Net Assets
D-2
88
Combining Statement of Cash Flows
D-3
89
Fiduciary Funds:
Combining Statement of Net Assets — Pension
Trust Funds
E-1
90
Combining Statement of Changes in Net Assets —
Pension Trust Funds
E-2
91
Combining Statement of Net Assets —
Private -purpose Trust Funds
E-3
92
Combining Statement of Changes in Net Assets —
Private -purpose Trust Funds
E-4
93
Combining Statement of Changes in Assets
and Liabilities — Agency Funds
E-5
94
Nonmajor Component Units:
Combining Statement of Net Assets — Authorities
F-1
95-96
Combining Statement of Activities — Authorities
F-2
97
Table No.
Paze No.
Statistical Section:
General Government Expenditures by Function
1
98
General Revenue By Source
2
99
Tax Revenue by Source
3
100
Secured Tax Levies and Collections
4
101
Assessed and Estimated Actual Value of
Taxable Property
5
102
Property Tax Rates - Direct and Overlapping
Governments
6
103
Ratio of Net General Bonded Debt to
Assessed Value and Net Bonded Debt
Per Capita
7
104
Ratio of Annual Debt Service Expenditures
for General Bonded Debt to Total General
Expenditures
8
105
Computation of Legal Debt Margin
9
106
Property Value, Construction, and Bank Deposits
10
107
Schedule of Sewer Revenue Bond Coverage
11
108
Demographic Statistics
12
109
Miscellaneous Statistical Data
13
110-111
Principal Taxpayers
14
112
Computation of Direct and Overlapping Debt
15
113
Police and Firefighter's Retirement Fund —
Revenue by Source
16
114
Police and Firefighter's Retirement Fund — Expenses
by Type
17
115
Summary of Insurance in Force
18
116
Page No.
Single Audit Section:
Schedule of Expenditures of Federal Awards
117-118
Notes to the Schedule of Expenditures of Federal
Awards
119
Report on Compliance and on Internal Control
Over Financial Reporting Based on an Audit
of Financial Statements Performed in Accordance
with Government Auditing Standards
120
Report on Compliance with Requirements Applicable
to each Major Program and Internal Control Over
Compliance in Accordance with OMB Circular A-133
121-122
Schedule of Findings and Questioned Costs
123
CITY OF PADUCAH, KENTUCKY
INTRODUCTORY SECTION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2003
Honorable Mayor and Commissioners
City of Paducah
Paducah, Kentucky
CITY OF PADUCAH
Finance Department
P.O. Box 2267
Paducah, KY 42002-2267
270-444-8512
October 6, 2003
We are pleased to submit Paducah's Comprehensive Annual Financial Report for the year ended June 30,
2003. Responsibility for the accuracy of the presented data and the completeness and fairness of the
presentation, including all disclosures, rests with the City.
The major objective of this report is to describe the City's financial condition and the financial results of its
operation in a format designed to be useful to the general public, elected officials, investors and creditors. We
believe the data, as presented, is accurate in all material aspects; that it is reported in a manner designed to
present fairly the financial position and results of operations of the various funds. All disclosures necessary to
enable the reader to gain maximum understanding of the City's financial activities have been included.
This Comprehensive Annual Financial Report consists of four sections as follows:
Introductory Section - Contains a list of principal officials, an organizational chart for Paducah and this
transmittal letter from the Finance Director.
Financial Section - Includes the Management's Discussion and Analysis (MD&A), basic financial statements,
required supplementary information, and combining and individual fund statements and schedules, as well as
the independent auditor's report on the basic financial statements. The MD&A is a narrative introduction,
overview and analysis to accompany the basic financial statements. This letter of transmittal should be read in
conjunction with the MD&A which can be found immediately following the report of the independent
auditors.
Statistical Section - Includes a number of statistical tables that present various financial, economic, social and
demographic data about Paducah for the last ten years.
Single Audit Section -Audit Section - Includes required data in accordance with the Single Audit Act Amendments of 1996.
00 11 We] Iy1
Paducah was established in 1827 by explorer General William Clark and was named after local legendary
Chickasaw Indian Chief "Paduke". The City of Paducah is situated on the southern bank of the Ohio River in
the north central portion of McCracken County. Paducah is the largest city both in the county and in the
Jackson Purchase eight county region. The City has established itself as the cultural, economic, medical and
- transportation center for not only the Jackson Purchase region but for a large portion of Southern Illinois and
portions of Western Tennessee and Southeastern Missouri.
Equal Opportunity Employer
Industry
The Paducah area has moved from the traditional "manufacturing industry" to a "service industry" economy.
Multi -state computer services, significant banking corporations, wholesale and retail trade, river -related
services, the health care industry and related services are the major employment centers. Traditional
manufacturing employment is heavily concentrated in the categories of chemicals, petroleum, coal and rubber,
and enriched uranium.
Economic Develoament Activities
The Greater Paducah Economic Development Council (GPEDC) coordinates the City's efforts in
strengthening and building economic development activities. Representatives of financial institutions, utilities,
local government, education and the business community serve as the Board of Directors. In existence since
1987, GPEDC assumes and carries out the responsibility of working with existing industry and business as
well as identifying and recruiting new companies to the City of Paducah. Additionally, GPEDC is responsible
for development of long-term strategy for economic development activities and coordinates local entities in the
accomplishment of those strategies.
Several years ago, the City of Paducah, the State of Kentucky and several federal agencies, in conjunction with
business, developed a 650 -acre `Information Age' Park. This park is designed to appeal to firms needing
advanced telecommunications and computing capabilities. The Info Park's focal point is centered on the
Resource Center, which was designed to coordinate resources of government, business and education.
In 1997, the City of Paducah jointly with the County of McCracken acquired the `Industrial Park West of
Paducah and McCracken County'. This park contains 218 acres with immediate access to two major railroad
lines, Paducah and Louisville and Paducah and Illinois (formerly Illinois Central). The park is located within
the southwest quadrant of the 1-24/Cairo Road interchange.
Churches And Schools
A relatively strong religious base is evident in the community, as demonstrated by the many churches in
Paducah. Numerous churches representing many of the major denominations are located within the City.
Several area churches offer televised activities as a convenience to those who do not attend church.
Elementary and secondary education in Paducah is provided by the Paducah Independent School System, the
McCracken County School System, Community Christian Academy, and by the St. Mary's Parochial School
System. Higher education is available locally from West Kentucky Community and Technical College
(WKCTC), formerly known as Paducah Community College, a two-year institution affiliated with the
University of Kentucky's community college system. WKCTC also serves as a site for the University of
Kentucky extended campus graduate programs, in addition to a four-year engineering college in conjunction
with the University of Kentucky.
Medical Facilities
Paducah serves as the regional medical center for much of the Jackson Purchase Area of Western Kentucky, a
large portion of Southern Illinois, and Northwestern Tennessee. Paducah's medical industry has almost every
major medical specialty represented in the physician population. The medical industry, represented by
Lourdes Hospital and Western Baptist Hospital, provides over 750 beds for medical needs. The two largest
hospitals, together, employ approximately 3,200 persons.
Recreation And Culture
Citizens have available a wide range of recreational and cultural activities which cater to diverse tastes. Area
residents may choose from fishing on nearby Kentucky and Barkley Lakes to enjoying the performing arts.
City parks provide areas for baseball, softball, golf, football, tennis, soccer and picnicking. The Parks Services
Department offers a substantial number of activities for people of all ages.
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The `Dogwood Festival', held in April, highlights the coming of spring in Paducah. Residents are encouraged
to spotlight their trees to illuminate a driving tour to celebrate an abundance of dogwood trees.
Paducah is the site of the American Quilter Society's National Museum. The museum, dedicated in 1991, is
the centerpiece for the quilters' annual convention held in April. The convention attracts an estimated 30,000
visitors to Paducah annually.
The `After Dinner Downtown Program' began in May 1997 as an experiment to draw people to Paducah's
downtown district. From May to September, businesses remain open late on Saturday night while street corner
musicians of all types entertain.
The `Paducah Summer Festival', started in 1967, is an annual celebration held during the last week in July.
Some of the Festival's activities include skydiving, hot air balloon races, a variety of music concerts, and
usually concludes with a spectacular riverfront fireworks display.
One of Paducah's oldest celebrations is the `8th of August Emancipation Celebration' which features African
American family reunions, or a homecoming. It is a time for African Americans to pay tribute to their heritage
and roots, and a time of reconciliation.
The "Barbecue on the River" event was started in 1995 as a way for local charities to raise funds. It attracts in
excess of 20,000 participants to Paducah's riverfront during the last weekend in September. Over time, this
annual event has grown to incorporate other events including `Arts in Action', `Lowertown Fine Arts
Festival', `Marine Industry Day' and `Old Market Days'.
The `Festival of Lights', started in 1992, is another annual event. This festival marks the beginning of the
winter holiday season with the official lighting of the trees and buildings in downtown Paducah. The season
includes a `Holiday Parade' and features a `Candle Light Christmas Trail'.
Paducah has an active symphony and several theater groups. The Paducah Symphony Orchestra stages
concerts during the winter season with the Market House Theater presenting several productions during the
same time period. The Paducah Live Corporation annually schedules a series of concerts, which brings some
of the finest artists to the Paducah stage. In addition, West Kentucky Community and Technical College's
"Arts in Focus" series sponsors a variety of professional productions.
The most recent addition to the City's cultural line up is the `Luther F. Carson Four Rivers Center for the
Performing Arts'. The Center is scheduled to open in February 2004, as a regional, multiple -purpose facility
with an 1,800 -seat main hall designed to accommodate a wide variety of cultural and educational programs.
The McCracken County Public Library offers a large selection of literature, special collections and programs.
The West Kentucky Community and Technical College Library supplement this community resource. The
combined inventories of the two libraries yield nearly 121,000 titles, not counting numerous periodicals and
newspapers.
THE GOVERNMENT
Paducah operates under a City Manager form of government. The Paducah Board of Commissioners is made
up of a Mayor and four Commissioners elected at large by the citizens on a non-partisan basis. The Mayor is
elected for a four-year term and Commissioners, for a two-year term. The Mayor and Commissioners have
equal voting powers.
The Board of Commissioners sets the policies that govern the City. It appoints advisory citizens groups that
help in the decision-making process. The City Manager is appointed by the Board and assists it in formulating
objectives, policies and programs. The City Manager is responsible for the day-to-day operation of the City's
326 full-time employees as of June 30, 2003. Department managers are responsible for their respective
departments and report directly to the City Manager.
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REPORTING ENTITY AND ITS SERVICES
For financial statement purposes, as required by generally accepted accounting principles, the City's
Comprehensive Annual Financial Report includes all City of Paducah financial statements (primary
government) and its component units. Component units discussed below are included in the City's reporting
entity because of the significance of their operational or financial relationships with the City of Paducah.
The following component units have been presented as blended units because the units' governing body is
substantially the same as the governing body of the City, or provides services almost entirely to the City of
Paducah: the Paducah Public Improvement Corporation, whose sole purpose is to finance long-term debt; and
Police and Firefighters' Pension Fund, which was established for the benefit of police and firemen of the City.
The following component units have been presented as discrete units to emphasize that they are legally
separate from the City. Paducah Water Works, Paducah Power System, Paducah Junior College, Inc., Paducah
Mainstreet, Inc., Transit Authority of the City of Paducah, Forest Hills Village, Inc., and Edwin J. Paxton Park
Golf Course were all included in the City's financial statements because of their financial relationship with the
City.
The City provides a full range of municipal services, including police and fire protection; maintenance of
streets and infrastructure; sanitation services; storm sewer services; cultural events and recreation activities.
Accounting System
The City's accounting system is organized on the basis of separate funds, each of which is considered to be a
separate accounting entity. The financial activities of each fund generate a separate set of self -balancing
accounts, which comprise its assets, liabilities, fund equity, revenues, and expenditure/expenses. Municipal
resources are allocated to and accounted for in individual funds based upon the purposes for which they are to
be spent and the means by which spending activities are controlled.
The City's accounting records for the governmental funds and agency funds are maintained on a modified
accrual basis, with revenues being recorded when "measurable and available" and expenditures being recorded
when the services or goods are received and the liabilities are incurred. Accounting records for the City's
proprietary funds and trust funds are maintained on the accrual basis, with revenues recognized when earned
and expenses recorded when the liability is incurred or economic asset used.
Internal Control
In developing and evaluating the City's accounting system, consideration is given to the adequacy of internal
controls. Internal controls were designed for Paducah's accounting system to reasonably safeguard its assets
against loss from unauthorized use or disposition, check the accuracy of accounting data, promote operational
efficiency and encourage adherence to prescribed managerial policies.
Budtetary Control
Paducah's budget process provides for input from department managers, top management, elected officials and
the public to determine what programs and services will be provided for during the upcoming year. Budgetary
control is maintained at the departmental level by comparing budgeted expenditures with actual expenditures
on a periodic and year to date basis. An expenditure, which would result in an overrun of department
appropriation, cannot be made until additional funds are appropriated and a budget amendment is approved.
Purchase orders which result in an overrun of department appropriations cannot be honored until additional
appropriations are made available. Open encumbrances at fiscal year end, if any, are reported as reservations
of fund balance. Unencumbered funds at year-end roll into the fund balance.
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GENERAL GOVERNMENT FUNCTIONS
General Fund Revenue (Based on Fund Financial Statements)
Revenue for General Government functions (General Fund) totaled $24,942,107 in fiscal year 2003, an
increase of 2.1 % over fiscal year 2002. The amount of revenue from various sources, percent of total, and the
increase or decrease from last year in dollars and as a percentage are shown in the following tabulation:
The most substantial increase in the revenue categories above in actual dollars is in `Licenses & Permits',
which amounted to $601,339. Payroll tax increased $428,029 or about 4.3 percent, while business license
collections increased $155,624 or 4.8 percent over last year. In fiscal year 1993, $6.5 million was received in
payroll tax revenues, while fiscal year 2003 revenue was $10.3 million, an average growth rate of 4.8 percent.
Payroll tax revenue rate of growth was 3.5 percent for a more recent five-year period, fiscal 1998 to fiscal
2003. More recent payroll tax revenue growth rate has been approximately 73 percent of that of the 10 -year
historical average.
Insurance premium tax collections decreased 1.1 percent or $39,630 last year. In fiscal year 1992, $2.28
million was received, and in fiscal year 1999, the revenue hit $3.36 million, giving an average compounded
growth rate of 5.7 percent a year. While insurance premium tax revenue was $3.36 million in 1999, it
subsequently hit a 7 -year low in 2000 at $2.97 million. In fiscal years 2001 and 2002, the insurance premium
tax sustained positive growth but declined 1.1 percent in fiscal 2003. The average growth rate for the
insurance premium tax over the past 5 years has stayed slightly ahead of inflation at 3.2 percent.
While overall, `License and Permits' revenue dollars grew the most, the `Interest' category decreased the most
dramatically as a percentage of change, 22.8 percent or $50,127. The interest revenue decrease was caused
primarily by the steady decline in interest rates over the past several years as investments continue to mature.
General Fund Expenditures (Based on Fund Financial Statements)
Expenditures for General Fund functions totaled $22,060,238, an increase of 4.1% over fiscal year 2002.
Increases and decreases in levels of expenditures by major functions compared to the preceding year are
shown in the following tabulation:
Increase (Decrease)
From FY 2002
FY 2003
Percent
Dollar
Revenue Sources:
Amount
of Total
Amount Percent
Taxes
$ 5,022,069
20.14%
$ 15,531 -0.3%
Licenses and permits
17,900,739
71.77%
601,339 3.5%
Charges for services
652,791
2.62%
(5,035) (0.8)%
Grants
591,652
2.37%
(73,962) (11.1)%
Interest
170,061
0.68%
(50,127) (22.8)%
Miscellaneous
604,795
2.42%
18,250 3.1 %
TOTAL REVENUE
$24,942,107
100.0%QS
2.1%
The most substantial increase in the revenue categories above in actual dollars is in `Licenses & Permits',
which amounted to $601,339. Payroll tax increased $428,029 or about 4.3 percent, while business license
collections increased $155,624 or 4.8 percent over last year. In fiscal year 1993, $6.5 million was received in
payroll tax revenues, while fiscal year 2003 revenue was $10.3 million, an average growth rate of 4.8 percent.
Payroll tax revenue rate of growth was 3.5 percent for a more recent five-year period, fiscal 1998 to fiscal
2003. More recent payroll tax revenue growth rate has been approximately 73 percent of that of the 10 -year
historical average.
Insurance premium tax collections decreased 1.1 percent or $39,630 last year. In fiscal year 1992, $2.28
million was received, and in fiscal year 1999, the revenue hit $3.36 million, giving an average compounded
growth rate of 5.7 percent a year. While insurance premium tax revenue was $3.36 million in 1999, it
subsequently hit a 7 -year low in 2000 at $2.97 million. In fiscal years 2001 and 2002, the insurance premium
tax sustained positive growth but declined 1.1 percent in fiscal 2003. The average growth rate for the
insurance premium tax over the past 5 years has stayed slightly ahead of inflation at 3.2 percent.
While overall, `License and Permits' revenue dollars grew the most, the `Interest' category decreased the most
dramatically as a percentage of change, 22.8 percent or $50,127. The interest revenue decrease was caused
primarily by the steady decline in interest rates over the past several years as investments continue to mature.
General Fund Expenditures (Based on Fund Financial Statements)
Expenditures for General Fund functions totaled $22,060,238, an increase of 4.1% over fiscal year 2002.
Increases and decreases in levels of expenditures by major functions compared to the preceding year are
shown in the following tabulation:
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Increase (Decrease)
From FY 2002
FY 2003
Percent
Dollar
Expenditures:
Amount
of Total
Amount Percent
General government
$ 3,943,031
17.9%
$ 496,623 14.4%
Public safety
11,277,297
51.1%
201,145 1.8%
Public service
5,218,896
23.7%
(234,922) (4.3)%
Recreation
975,361
4.4%
78,301 8.7%
Other
645,653
2.9%
324,743 101.2%
TOTAL EXPENDITURES
$22.060.238
100.0%
86 8 0 4.1%
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Expenditures grew 4.1 percent or $865,890 between fiscal year 2002 and fiscal year 2003, as compared to the
increase in spending between fiscal year 2001 and fiscal year 2002, of $1,567,361 or 8.0 percent. The fiscal
year 1995 expenditure per capita was $595 and changed to $728 and $806 in fiscal year 2000 and fiscal year
2002, respectively. Per capita expenditures have increased on average 4.5 percent annually since fiscal year
1995. Fiscal year 2003 General Fund combined expenditures and transfers out increased $9 per citizen from
the fiscal year 2002 amount of $921.
The fiscal year 2003 budget process played a significant role in identifying spending trends, and that process
should be carried over into fiscal year 2004. The fiscal year 2003 expenditures more accurately reflect all
costs associated with the departments that benefit from the expenditure. The single largest net change was in
`General Government' for $496,623. The majority of the change, or nearly 77 percent, was caused by
increased economic development -related projects spending ($177,420), River Heritage Museum funding
assistance ($50,000) and a payment to settle a long-term land acquisition suit near the Kentucky Oaks Mall
($153,650).
The second most significant change was in the 'Other' category for $324,743 or 101.2% over fiscal year 2002.
Nearly all of the change in this category ($282,204) was due to a change in the way we present the property
taxes collected for the Paducah Junior College (PJC). In past years, PJC property tax revenues and related
expenditures were not included in the City's General Fund. Starting in fiscal year 2003, PJC revenues and
related expenditures are included in the General Fund because the PJC Board does not have taxing authority so
the City is required to set PJC levy.
The next largest expenditure change was for `Public Service', a $234,922 or 4.3% decrease over last year.
Public Service expenditures are made up of Public Works, Engineering and Floodwall operational costs. The
entire Public Service category decrease is attributed to the Public Works Department. Most of the decrease is
associated with salary slippage and reduced capital outlays for building improvements in Public Works as
compared to the prior year.
ECONOMIC CONDITION
The City continues to be actively involved in promoting economic development since new developmental job
growth is necessary to ensure the continued stability of the City's tax base. Economic indicators and trends
reflect that the area's economy has slowed in recent years but is expected to continue to grow over the near-
term. Area employment was down slightly from the prior 12 -month period and was 33,468, a 3.2% decrease.
The June 30, 2003, unemployment rate was 5.9% (McCracken County), slightly better than the federal rate.
The number of active electric and water meters was nearly the same as the prior year. The number of
residential construction permits obtained was 231 units of single and multi -family dwellings, up 15% and
valued at $9.8 million. The value of commercial construction permits was $35.9 million, down 16.5% from
the prior year.
CASH MANAGEMENT
Idle cash in the City's various funds, except for pension funds, is invested for terms ranging from overnight to
23 months to maturity depending upon liquidity needs. Independent money managers handle Police and
Firefighters' Pension Funds. City deposits/investments are protected by FDIC insurance and pledged U.S
Government securities. The amount of interest earned in fiscal year 2003 in the General Fund was $170,601,
on rates varying from 1.50% to 4.46%.
I i I.y;16u EMU" old oleo 1
In recent years, attention has been focused on safety in the workplace. Working with the Kentucky League of
Cities (KLC) has produced numerous enhancements in worker safety. The City has selected various insurance
coverage to mitigate potential risk, with premiums costing more than $905,300 and $799,000 in fiscal year
2003 and fiscal year 2002, respectively, for general liability, public officials liability, auto, law enforcement
and workers compensation.
IN
PENSION FUND MANAGEMENT
The City of Paducah employees are covered by one of three retirement systems: (1) Police and Firefighters'
Pension Fund (PFPF); (2) County Employees' Retirement System (CERS); and (3) Appointive Employees'
Pension Fund (AEPF).
The PFPF is a single -employer contributory defined benefit plan established by local ordinance under State
Statutes. Members contribute 8% of their gross earnings. The investments of this fund are managed by a six -
member board of trustees, which utilizes BB&T as money managers. Monthly reports are received and
monthly meetings are held with the money managers to review investment progress and strategy.
In the past year, the PFPF had a net asset decrease of $921,497 with net assets valued at $9,460,720 on June
30, 2003. There were 7 active members and 99 retirees and/or beneficiaries in this fund as of June 30, 2003.
The most recent actuarial report prepared for the PFPF was as of July 1, 2003.
The CERS is a multiple employer cost sharing defined benefit plan administered by Kentucky Retirement
System. Effective August 1, 1988, all but 21 active police and firefighters opted to transfer from the present
plan to the County Employees Retirement System.
Non -hazardous duty employees contribute 5% while hazardous duty employees contributed 7% until August 1,
1998. Hazardous duty employees contribute 8% effective August 1, 1998, due to a change in state pension
law. The City contributed 6.34% for non -hazardous and 16.28% for hazardous duty employees in fiscal year
2003.
The AEPF is a single -employer contributory defined benefit plan created by local ordinance under State
Statute. While there are no active members in the plan, there are 15 retirees and/or beneficiaries receiving
benefits from the fund as of June 30, 2003. Retirees are former non -hazardous duty municipal employees who
retired prior to the statewide CERS plan. Funding was formerly provided by a special ad valorem tax, with
any shortfall to be covered by a transfer from the City's General Fund. The AEPF had a net asset decrease of
$16,899 in fiscal year 2003, with net assets valued as of June 30, 2003, of $327,374.
SPECIAL REVENUE FUNDS
Special revenue funds (Nonmajor Governmental Funds) included in this report are the Municipal Aid
Program, Emergency Communication Service Fund, Court Awards Fund, and various Federal and State
Grants. Revenues accounted for in these funds are restricted to specific purposes.
PROPRIETARY FUNDS
The City maintains eight proprietary funds which are: Solid Waste, Wastewater/Stormwater, Civic Center,
Telecommunication Information System Authority (TISA) (Business -type Activities); and Fleet Maintenance,
Fleet Lease Trust, Insurance and Health Insurance Funds (Internal Service Funds).
In fiscal year 1990, the Solid Waste Fund and the Wastewater/Stormwater Fund were reclassified from
General Government and established as proprietary funds. The City's fleet operation was broken out as a
proprietary fund in fiscal year 1992 in order to more accurately reflect the true cost of the City's vehicle and
equipment fleet maintenance program. The Civic Center's operation was converted into a proprietary fund in
fiscal year 1993. In fiscal year 1999, the City set up two new funds called Fleet Lease Trust and Health
Insurance Funds, in order to more accurately monitor the City's fleet lease program and health, dental and
flexible benefits programs, respectively. All these changes were made to better account for the cost of
operations. The Wastewater/Stormwater Fund will hopefully phase out in fiscal year 2004, as accounts are
settled with the Paducah -McCracken County Joint Sewer Authority (JSA). This agency has taken over the
planning, financing, operation and maintenance of all county and city sewer systems.
1 I Do 3MIT41-9210 D]
This fund is used to account for payment of general obligation indebtedness, which includes debt associated
with the Paducah Public Improvement Corporation and the Fifth Third Bank lease for fire department
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equipment, which will be fully paid in fiscal year 2004. In fiscal year 1992, a $5.0 general obligations bond
was added to the City's debt obligations, but was subsequently paid off entirely in 1997. A few of the more
significant projects funded by the proceeds of this bond included the Downtown Riverfront Redevelopment
Project ($1.5 million), Noble Park Pool and recreation facility building renovation ($1.33 million), Senior
Citizen Center renovation ($416,600) and Annex renovation which houses the Emergency 911 Command
Center ($214,100). Lease/debt payments were fully funded by the General Fund.
In fiscal year 2001, since the Debt Service Fund is funding -dependent upon the General Fund, $591,900 in
excess funds was transferred to the General Fund. In fiscal year 2003, another $200,000 in funds were
transferred from the Debt Service Fund to the General Fund. The total cash outlay requirements for debt
service retirement; principal and interest, in fiscal year 2003 were $807,807.
INDEPENDENT AUDIT
Kentucky Revised Statute 91 A-040 requires an annual audit of each fund of the City by an auditor of public
accounts or a certified public accountant. The independent certified public accounting firm of Williams,
Williams & Lentz, LLP has conducted this audit and their opinion has been included in this report. The City is
also subject to the Single Audit Act Amendments of 1996 reporting requirements. The Single Audit Report is
included within this report.
CERTIFICATE OF ACHIEVEMENT
The Government Finance Officers Association (GFOA) of the United States and Canada awarded a Certificate
of Achievement for Excellence in Financial Reporting for fiscal year ended June 30, 2002. This was the
twelfth year for Paducah to receive this prestigious award.
In order to be awarded a Certificate of Achievement for Excellence in Financial Reporting, the City published
an easily readable and efficiently organized comprehensive annual financial report, the contents of which
conform to program standards. The report satisfied both generally accepted accounting principles and
applicable legal requirements.
A Certificate of Achievement for Excellence in Financial Reporting is valid for a period of one year only. We
believe our current report continues to conform to program requirements, and we are submitting it to GFOA to
determine its eligibility for another certificate.
ACKNOWLEDGMENTS
The preparation of this report on a timely basis could not be accomplished without the efficient and dedicated
services of the entire staff of the Finance Department. We wish to express our appreciation to all members of
the Finance Department who assisted and contributed to its preparation, and special thanks to Williams,
Williams & Lentz, LLP. We also thank the Mayor and City Commission for their interest and support in
planning and conducting the financial operations of the City in a responsible and progressive manner.
;Refully submitted, ajn W. Perkins, CPA
Finance Director/Treasurer
-8-
In
Mayor
Mayor Pro tem
Commissioner
Commissioner
Commissioner
Personnel
Finance
Police Chief
Fire Chief
City Engineer
Planning
Parks Services
Inspections
Public Works
Information Services
City Clerk
CITY OF PADUCAH, KENTUCKY
PRINCIPAL OFFICIALS
BOARD OF COMMISSIONERS
CITY MANAGER
James Zumwalt
-10-
William F. Paxton
Gerry Montgomery
Buz Smith
Robert Coleman
David Guess
Herschel Dungey
Jonathan Perkins, C.P.A.
Randy Bratton
Redell Benton
Richard Murphy
Thomas Barnett
Mark Thompson
Joel Scarbrough
Bob Freudenthal
Greg Mueller
Tammy Brock
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Paducah,
Kentucky
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
June 30, 2002
A Certificate of Achievement for Excellence in Financial
Reporting is presented by the Government Finance Officers
Association of the United States and Canada to
government units and public employee retirement
systems whose comprehensive annual financial
reports (CAFRs) achieve the highest
standards in government accounting
and financial reporting.
E
AGOFp,r 5 �-"
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Q�a E E� 7NF9
W UNITED STATES 1ytn
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CORYORATN President
s NIN n
S]ERI,�s
CMICA6t
*1'Wr 4-eo�
Executive Director
CITY OF PADUCAH, KENTUCKY
FINANCIAL SECTION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2003
WILLIAMS, WILLIAMS & LENTZ, LLP
CERTIFIED PUBLIC ACCOUNTANTS
601 JEFFERSON - P.O. BOX 2500
PADucAH, KENTucKY 42002-2500
J. RICHARD WALKER
TELEPHONE
JERRY G. SEVERNS
AREA CODE 270
ROBERT R. ROBERTSON
443-3643
C. SUZETTE CRONCH
ANNETTE T. RYAN
MICHAEL F. KARNES
MARK A. THOMAS Independent Auditor's Report
ROGER G. HARRIS
J. DAVID BAILEY, III
G. LEON WILLIAMS
H. WILLIAM LENTZ
Honorable William F. Paxton, Mayor
Members of the Board of Commissioners
City of Paducah
Paducah, Kentucky
We have audited the accompanying financial statements of the governmental activities, business -type
activities, discretely presented component units, major funds, and the aggregate remaining fund information of
the City of Paducah, Kentucky (the City), as of and for the year ended June 30, 2003, which collectively
comprise the City's basic financial statements as listed in the table of contents. These financial statements are
the responsibility of the City of Paducah, Kentucky's management. Our responsibility is to express an opinion
on these basic financial statements based on our audit. We did not audit the financial statements of the
following component units: Paducah Water Works, Forest Hills Village, Inc., Paducah Power System, and
Transit Authority of the City of Paducah, which represent 80 percent and 96 percent, respectively, of the assets
and revenues of the Component Units column. Those financial statements were audited by other auditors
whose reports have been furnished to us, and our opinion on the basic financial statements, insofar as it relates
to the amounts included for Paducah Water Works, Forest Hills Village, Inc., Paducah Power System, and
Transit Authority of the City of Paducah, discretely presented component units, is based on the reports of the
other auditors.
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards, issued
by the Comptroller General of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the basic financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall basic financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective
financial position of the governmental activities, business -type activities, discretely presented component
units, major funds, and the aggregate remaining fund information of the City of Paducah, Kentucky as of June
30, 2003, and the respective changes in financial position and cash flows, where applicable, thereof for the
year ended in conformity with accounting principles generally accepted in the United States of America.
As described in Note 1, the City implemented a new financial reporting model, as required by the provisions of
GASB Statement No. 34, Basic Financial Statements—and Management's Discussion and Analysis for State
and Local Governments, as of July 1, 2002.
-12-
In accordance with Government Auditing Standards, we have also issued our report dated October 6, 2003, on
our consideration of the City's internal control over financial reporting and our tests of its compliance with
certain provisions of laws, regulations, contracts and grants. That report is an integral part of an audit
performed in accordance with Government Auditing Standards and should be read in conjunction with this
report in considering the results of our audit.
The Management's Discussion and Analysis, Pension Trust Fund Schedules, and budgetary comparison
information on pages 14 through 24 and 71 through 79, are not a required part of the basic financial statements
but are supplementary information required by the Governmental Accounting Standards Board. We have
applied certain limited procedures, which consisted principally of inquiries of management regarding the
methods of measurement and presentation of the supplementary information. However, we did not audit the
information and express no opinion on it.
Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively
comprise the City of Paducah, Kentucky's basic financial statements. The introductory section, the
supplementary information section as listed in the table of contents, including the schedule of expenditures of
federal awards, which is required by the U.S. Office of Management and Budget Circular A-133, Audits of
State, Local Governments, and Non -Profit Organizations, and statistical tables are presented for purposes of
additional analysis and are not a required part of the basic financial statements. The supplementary
information has been subjected to the auditing procedures applied in the audit of the basic financial statements
and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as
a whole. The introductory section and statistical section have not been subjected to the auditing procedures
applied in the audit of the basic financial statements and, accordingly, we express no opinion on them.
October 6, 2003
-13-
CITY OF PADUCAH, KENTUCKY
REQUIRED SUPPLEMENTARY INFORMATION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2003
CITY OF PADUCAH, KENTUCKY
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 3 0, 2003
The City of Paducah ("City") offers Management's Discussion and Analysis to provide a narrative overview
and analysis of City financial activities for fiscal year ended June 30, 2003. To fully understand the entire
scope of the City's financial activities, this information should be read in conjunction with the letter of
transmittal (pages 1-8) and the basic financial statements (pages 25-70) provided in this document.
The City implemented Government Accounting Standards Board Statement 34, Basic Financial Statements—
and Management's Discussion and Analysis for State and Local Governments, for the first time this year.
I. Financial Highlights
• Assets exceeded liabilities by $36.8 million at the close of the 2002-2003 fiscal year. Of this
amount, $3.1 million (unrestricted net assets) may be used to meet City government's ongoing
obligations to citizens and creditors.
• Total net assets increased $821,602.
• At fiscal year end, City governmental funds reported a combined ending fund balance of $10.3
million. Approximately 59% of this total amount, $6.1 million, is unreserved and available for
spending at the City's discretion. Of the $6.1 million, $1.1 million is in various special funds, which
are earmarked for specific purposes.
• At the end of the current fiscal year, unreserved general fund balance was $4.9 million, nearly 20%
of total general fund expenditures and transfers out.
II. Overview of Financial Statements
This discussion and analysis serves as an introduction to the City's basic financial statements, which
consist of four components: 1) government -wide financial statements, 2) fund financial statements, 3)
component unit financial statements, and 4) notes to the financial statements. This report also contains
other supplementary information in addition to the basic financial statements.
A. Government -Wide Financial Statements
Government -wide financial statements are designed to provide readers with a broad overview of
City finances in a manner similar to private -sector business.
The Statement of Net Assets presents information on all City assets and liabilities, with the
difference between assets and liabilities reported as net assets. Monitoring increases and/or
decreases in net assets over time may serve as a useful indicator of whether the financial position of
the City is improving, stagnating, or deteriorating.
The Statement of Activities presents information showing how the City's net assets changed during
the fiscal year. All net asset changes are reported as soon as the underlying event giving rise to the
change occurs regardless of the timing of related cash flows. Revenues and expenses are reported in
the Statement of Activities for some items that will only result in cash flows in the future (e.g.,
uncollected taxes and earned but unused vacation leave).
Both of the government -wide financial statements distinguish City functions that are primarily
supported by taxes and intergovernmental revenues (governmental activities) from other City
functions that are intended to recover all or a significant portion of their costs through user fees and
charges (business -type activities). City governmental activities include general government, public
safety, public service, park and recreation, planning and development, and interest on long-term
debt. Business -type activities of the City include Solid Waste, Civic Center and Telecommunication
System Authority (TISA).
-14-
Government -wide financial statements include not only the City (the primary government), but also
a legally separate Paducah Water Works, Paducah Power System and other authorities (component
units) for which the City is financially accountable. Financial information for the component units
is reported separately from the financial information presented for the primary government itself.
The government -wide financial statements can be found on pages 25-28 of this report.
B. Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over segregated resources
for specific activities or objectives. The City of Paducah, like other state and local governments,
uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements.
City funds can be divided into three categories:
1) Governmental Funds. Governmental funds are used to account for essentially the same
functions reported as governmental activities in the government -wide financial statements. Unlike
government -wide financial statements, however, governmental fund financial statements focus on
current sources and uses of spendable resources, as well as on balances of spendable resources
available at the end of the fiscal year. This information may be useful in evaluating a city's near-
term financing requirements.
The City maintains thirteen (13) individual governmental funds. Information is presented separately
in the governmental fund balance sheet and in the governmental fund statement of revenues,
expenditures, and changes in fund balances for the General, General Capital Improvements, and
Downtown Capital Improvements Funds, all of which are considered to be major funds. Data from
the other ten (10) funds are combined into a single, aggregated presentation. Individual fund data
for each of these non -major governmental funds is provided in the form of combining statements
elsewhere in this report.
Readers may better understand the long-term impact of the City's near-term financing decisions by
comparing the narrow -focus governmental funds financial statements with governmental activities
in the government -wide financial statements. Exhibit 4 (page 31) and Exhibit 6 (pages 34-35)
provide a reconciliation to ease comparison between the fund financial statements and the
government -wide statements.
The basic governmental fund financial statements can be found on pages 25-35 of this report.
2) Proprietary Funds. The City maintains two types of proprietary funds:
a. Enterprise Funds. Enterprise funds are used to report the same functions presented as
business -type activities in the government -wide financial statements and are used to account
for operations:
• That are financed and operated in a manner similar to private business enterprises where
the intent of the governing body is that the costs of providing goods and services to the
general public on a continuing basis be financed or recovered primarily through user
charges; or
Where the governing body has decided that periodic determination of revenues earned,
expenses incurred, and/or net income is appropriate for capital maintenance, public
policy, management control, accountability or other purposes.
The City uses four enterprise funds to account for Solid Waste, Civic Center, TISA and
Wastewater operations, as well as certain component units that provide electric, water,
public transit, and golf course services. TISA and Civic Center receive subsidy from the
General Fund.
(Continued)
-15-
The City's component unit enterprises include the Paducah Water Works, Paducah Power
System, Paducah Transit Authority, Forest Hills, and Edwin J. Paxton Park Golf Course,
which provide water, electric, light and power systems, public transportation, City owned
housing, and a public golf course. These component units, each of which has their own
board of directors, are also enterprise funds.
b. Internal Service Funds are used to accumulate and allocate costs internally among the
City's various functions. The City uses internal service funds to account for fleet services,
fleet replacement, risk management (insurance) and employee health programs. Internal
Service Funds have been included within governmental activities in the government -wide
financial statements because these funds predominantly benefit governmental functions
versus business -type functions.
Proprietary funds provide the same kind of information as government -wide financial
statements, but in greater detail. Individual data for the nonmajor proprietary funds is presented
in the form of combining statements on pages 84-86 of this report. Individual data for the
internal service funds is likewise presented in the form of combining statements on pages 87-89
of this report.
3) Fiduciary Funds. Fiduciary funds are used to account for resources held for the benefit of
parties outside the government and are not reflected in government -wide financial statements
because those resources are not available to support City programs. Individual data for the
City's five (5) fiduciary funds (Appointive Employees' Pension, Police and Firefighters'
Retirement, Oak Grove Cemetery Trust, Rinkleff Estate and Agency) are presented in the form
of combining statements on pages 90-94 of this report.
C. Notes to the Financial Statements
The notes provide additional information that is essential to fully understanding data provided in the
government -wide and fund financial statements. Notes to the financial statements can be found on
pages 46-70 of this report.
D. Other Information
In addition to basic financial statements and accompanying notes, this report also presents certain
required supplementary information concerning City funding of its obligation to provide pension
benefits to its employees and budgetary comparison schedules for the general and major special
revenue funds.
The combining statements referred to earlier in connection with nonmajor governmental funds,
nonmajor proprietary funds, internal service funds and fiduciary funds are presented immediately
following the required supplementary information on pensions and budgetary comparisons.
Combining fund statements and schedules can be found on pages 80-94 of this report.
III. Government -Wide Financial Analysis
As noted earlier, net assets may serve over time as a useful indicator of the City's financial position.
City assets exceeded liabilities by $36.8 million as of June 30, 2003.
The largest portion of the City's net assets (80%) reflects its investment in capital assets (i.e., land,
buildings, machinery, equipment and infrastructure) less outstanding related debt used to acquire those
assets. The City uses these capital assets to provide service to citizens and as a result, these assets are
not available for future spending. The City's capital assets investment is reported net of related debt, but
the resources to pay this debt must be provided from other sources since the capital assets cannot be used
to liquidate the liabilities.
(Continued)
510
An additional portion of City net assets (12%) represents resources that are subject to external
restrictions on how they may be used. The remaining balance of unrestricted net assets ($3.1 million)
may be used to meet the City's ongoing obligations to citizens and creditors.
As of June 30, 2003, the City reports positive balances in all three categories of net assets, both for the
government as a whole, as well as for its separate governmental and business -type activities.
With the first year of implementation of GASB Statement 34, the City is not presenting comparative
columns in the various comparisons and analyses. Comparative analyses will be provided in future
years when prior year information is available.
City of Paducah, Kentucky
Net Assets
June 30, 2003
A. Analysis of the City's Operations
The following table provides a summary of the City's operations for the year ended June 30, 2003.
The City first implemented GASB Statement 34, Basic Financial Statements — and Management
Discussion and Analysis —for State and Local Governments in 2003. Therefore, comparative data is
not presented. Governmental activities increased the City's net assets by $889,621, accounting for
all of the increase in net assets. Business -type activities decreased the City's net assets by $68,019.
The following table provides a summary of the City's operations for the year ended June 30, 2003.
(Continued)
-17-
Governmental
Business -Type
Activities
Activities
Total
Current assets
$19,306,855
$1,970,437
$21,277,292
Capital assets
32,412,164
1,425,753
33,837,917
Total assets
51,719,019
3,396,190
55,115,209
Long-term liabilities
9,979,680
18,671
9,998,351
Other liabilities
7,915,025
386,666
8,301,691
Total liabilities
17,894,705
405,337
18,300,042
Net assets:
Invested in capital assets, net of
related debt
27,955,839
1,425,753
29,381,592
Restricted
4,297,355
-
4,297,355
Unrestricted
1,571,120
1,565,100
3,136,220
TOTAL NET ASSETS33,824,314
2 990 3
$36,815,167
A. Analysis of the City's Operations
The following table provides a summary of the City's operations for the year ended June 30, 2003.
The City first implemented GASB Statement 34, Basic Financial Statements — and Management
Discussion and Analysis —for State and Local Governments in 2003. Therefore, comparative data is
not presented. Governmental activities increased the City's net assets by $889,621, accounting for
all of the increase in net assets. Business -type activities decreased the City's net assets by $68,019.
The following table provides a summary of the City's operations for the year ended June 30, 2003.
(Continued)
-17-
City of Paducah, Kentucky
Changes in
Net Assets
For the Year Ended June 30, 2003
Governmental
Business -Type
Revenues:
Activities
Activities
Total
Program revenues:
Charges for services
$ 2,370,110
$3,413,172
$ 5,783,282
Operating grants/contributions
4,176,548
-
4,176,548
Capital grants/contributions
2,213,757
3,666
2,217,423
General revenues:
Property taxes
3,893,211
-
3,893,211
Franchise tax
298,251
-
298,251
Telecommunications tax (E911)
751,802
-
751,802
Insurance premium tax
3,580,964
-
3,580,964
Vehicle tax
492,077
-
492,077
Bank tax
169,668
-
169,668
Business licenses
3,404,338
-
3,404,338
Employee earnings
10,301,231
-
10,301,231
Other taxes
181,266
-
181,266
Intergovernmental revenues
836,132
-
836,132
Unrestricted investment earnings
325,811
39,530
365,341
Gain on sales of capital assets
125,714
24,238
149,952
Total revenues
33,120,880
3,480,606
36,601,486
Expenses:
General government
7,397,233
-
7,397,233
Public safety
12,964,120
-
12,964,120
Public service
7,376,791
-
7,376,791
Park and recreation
975,362
-
975,362
Planning and development
3,108,192
-
3,108,192
Interest on long-term debt
428,227
-
428,227
Solid waste
-
3,359,731
3,359,731
Civic Center
-
46,509
46,509
TISA
-
123,719
123,719
Total expenses
32,249,925
3,529,959
35,779,884
Increase (decrease) in net assets
before transfers
870,955
(49,353)
821,602
Transfers
18,666
(18,666)
-
Increase (decrease) in net assets
889,621
(68,019)
821,602
Net assets - July 1, 2002
32,934,693
3,058,872
35,993,565
NET ASSETS - JUNE 30, 200333.824.314
2 990 8 3
36.815.167
(Continued)
-18-
B. Governmental Activities
$14,000,000
$12,000,000
$10,000,000
$8,000,000
$6,000,000
$4,000,000
$2,000,000
$0
Governmental Activities
Expenses and Program Revenues
a�
a
C7 0
to
Governmental Activities
Revenue by Source
Intergovernmental
revenues
3% Other Taxes Charges for services
1% 7%
Interest Income
1%
Vehicle Tax
1% IOperating
grants/contributions
13%
Capital
grants/contributions
7%
Occupation Licenses
52% Property taxes
13%
Telecommunication Tax
(E911)
2%
(Continued)
-19-
C. Business -Type Activities
Business -type activities decreased the City's net assets by $68,019, in contrast to the positive gain in
net assets for Governmental Activities for the year.
Business -Type Activities
Expenses and Revenues
4,000,000 —
3,500,000
3,000,000 ■ Expenses
2,500,000 ■ Revenues
2,000,000
1,500,000
1,000,000
500,000
0
Solid Waste Civic Center TISA
Capital grants/contributions
0%
Business -Type Activities
Revenue by Source
Interest hicane
1% Gain on sale of capital assets
transfers
0%
Charges for services
99%
6►IIM
(Continued)
IV. Financial Analysis of the City's Funds
A. Governmental Funds
The focus of the City's governmental funds is to provide information on near-term inflows, outflows
and balances of spendable resources. Such information is useful in determining the City's financing
requirements. Unreserved fund balance serves as a useful measure of the City's net resources
available for spending at the end of the fiscal year.
At the end of the fiscal year, the City governmental funds reported combined ending fund balances
of $10.3 million. Approximately 59% of this total amount, $6.1 million, is unreserved fund balance,
which is available for spending at the government's discretion. Of the $6.1 million, $1.1 million is
in various special funds, which are restricted to specific purposes including grant programs and road
paving programs. The remainder of fund balance is reserved to indicate it is not available for new
spending because it has already been committed to liquidate contracts and purchase orders of the
prior period for $4.2 million.
Governmental Activities
Ending Fund Balances
Unreserved fund
balance
Special restricted use 48.1%
10.5%
Contract and
purchase order
liquidation
41.4%
The general fund is the chief operating fund of the City. At the end of the 2002-2003 fiscal year, the
general fund unreserved fund balance was $4.9 million. City ordinance requires that an amount not
less than 12.5% of the General Fund's budgeted expenditures remain undesignated in the fund
balance, or $3.1 million, which leave $1.8 million as truly unreserved. As a measure of general fund
liquidity, readers may compare both unreserved fund balance and total fund balance to total general
fund expenditures. Unreserved General Fund fund balance represents approximately 20% of
expenditures and transfers out ($24.7 million).
The General Fund fund balance increased by $484 thousand during the 2002-2003 fiscal year and
was the result of decreased expenditures due to a number of unfilled vacancies or `salary slippage'.
The General Capital Improvements Fund had a fund balance of $583,589 all of which is reserved
because it has already been committed to liquidate contracts and purchase orders of the prior period.
The General Capital Improvements fund balance decreased $297 thousand.
The Downtown Capital Improvements Fund had a fund balance of $3 million all of which is
reserved because it has already been committed to the Luther F. Carson Four River Center for the
Performing Arts. The Downtown Capital Improvements fund balance decreased $330 thousand.
D. Proprietary Funds
The City's proprietary funds provide the same information found in the government -wide financial
statements, but in more detail.
(Continued)
IPAM
Unrestricted net assets of the respective proprietary funds are:
Solidwaste $1,621,057
Wastewater -
Civic Center 13,973
TISA 26,000
Combined net asset growth for the four funds was $28 thousand broken down as follows: Solid
Waste $70 thousand, Civic Center ($15 thousand), and TISA ($27 thousand). Other factors
concerning the proprietary enterprise funds have been addressed in the discussion of City business -
type activities.
V. General Fund Budgetary Highlights
Differences between the original budget and the final amended budget resulted in a $1,020,235 decrease
in appropriations and can be briefly summarized as follows:
Department
General administration
Finance
Planning
Human rights
Human resources
Inspection
Information systems
Police
Fire
Public works
Engineering services
Recreation
Annronriations
Increase Decrease
$ 156,155
$ 53,865
4,670
4,035
32,315
66,890
47,745
272,925
84,205
559,215
100,090
24,405
Transfers out were also increased $351,215. The net decrease to appropriations and transfers out was
$669,020 for the year. Since expenditures were less than budgetary estimates, fund balance was reduced
_ less than expected.
VI. Capital Asset and Debt Administration
A. Capital Assets
The City's investment in capital assets for governmental and business -type activities as of June 30,
2003, is $33.8 million (net of accumulated depreciation). This investment in capital assets includes
land, buildings and system, improvements, machinery and equipment, park facilities, roads,
highways, and bridges, and construction in progress.
Capital improvements are included in each department budget until improvements are completed.
At the end of the fiscal year, completed projects are capitalized in the `Government -wide
Statements'. During fiscal year 2003, projects and equipment expenditures totaled nearly $5.5
million. The largest capital -type projects, in terms of dollars in fiscal year 2003, were for the
completion of the Convention Center ($921,170), Police mobile data terminals ($748,760), followed
by the City's Geographic Information System or GIS ($437,909), the third phase of the downtown
Streetscape project ($375,219), the first phase of Pecan Drive Upgrade project ($282,503), the
completion of the downtown Convenience Center ($255,087), and another construction phase
completed at the River Heritage Museum ($187,734).
(Continued)
-22-
In the upcoming years, several street, economic development, quality of life and drainage projects
will continue and are estimated to cost several million dollars. Capital improvement projects such as
the Luther F. Carson Four Rivers Center for the Performing Arts parking lot and related
infrastructure, the continuing airport expansion, police and recreational facility improvements,
continued neighborhood revitalization, and street and sidewalk rehabilitation are among the projects
to be addressed.
City of Paducah, Kentucky
Capital Assets
(Net of Accumulated Depreciation)
June 30, 2003
TOTALS 28.035.664 1 42 7 329.461.417
Additional information on City capital assets can be found in Note 3 in the notes to financial
statements on pages 58-59.
B. Long -Term Debt
At year end, the City had $10,622,533 in outstanding bonds, accrued compensated absences and
capital leases, compared to $10,955,290 at June 30, 2002 with maturities extending through 2026.
During the year, the City's total debt decreased by $332,757 or of 3%, as shown in the following
table:
Governmental Activities
General Obligation Bonds: 2003 2002
Convention and Arts Center $ 9,075,000 $ 8,850,000
General Fund accrued compensated
absences 1,646,236 1,692,709
Capital lease — fire equipment 234,054 79,824
TOTALS
10.955.290 10.622.533
In June 2001, a $9.29 million general obligation bond was added to the City's debt obligation to
finance construction of the Luther F. Carson Four Rivers Center for the Performing Arts
(approximately $3.0 million) and the expansion of the Julian Carroll Convention Center
(approximately $6.0 million). These bonds are required to be fully paid within 25 years from the date
of issue and are backed by the full faith and credit of the City. While the City issued these bonds,
50% of the principal amount of the bonds is being issued on behalf of the County of McCracken,
Kentucky. McCracken County has issued the City a general obligation note in a principal amount
equal to 50% of the principal amount of the bonds.
The City's legal debt limit under § 158 of the Kentucky Constitution is 10% of total assessed value of
taxable property in Paducah; therefore, the debt limit is $155,879,607. The City's latest bond rating
by Moody is A2. The City has a low amount of general obligation debt, which explains our large
legal debt margin.
(Continued)
-23-
Governmental
Business -Type
Activities
Activities
Total
Land
$ 5,084,335
$ 65,908
$ 5,150,243
Construction in progress
2,988,191
-
2,988,191
Buildings and improvements
3,096,982
183,855
3,280,837
Infrastructure
14,242,704
-
14,242,704
Equipment
1,032,988
376,358
1,409,346
Furnishings and fixtures
5,687
-
5,687
Vehicles
1,584,777
799,632
2,384,409
TOTALS 28.035.664 1 42 7 329.461.417
Additional information on City capital assets can be found in Note 3 in the notes to financial
statements on pages 58-59.
B. Long -Term Debt
At year end, the City had $10,622,533 in outstanding bonds, accrued compensated absences and
capital leases, compared to $10,955,290 at June 30, 2002 with maturities extending through 2026.
During the year, the City's total debt decreased by $332,757 or of 3%, as shown in the following
table:
Governmental Activities
General Obligation Bonds: 2003 2002
Convention and Arts Center $ 9,075,000 $ 8,850,000
General Fund accrued compensated
absences 1,646,236 1,692,709
Capital lease — fire equipment 234,054 79,824
TOTALS
10.955.290 10.622.533
In June 2001, a $9.29 million general obligation bond was added to the City's debt obligation to
finance construction of the Luther F. Carson Four Rivers Center for the Performing Arts
(approximately $3.0 million) and the expansion of the Julian Carroll Convention Center
(approximately $6.0 million). These bonds are required to be fully paid within 25 years from the date
of issue and are backed by the full faith and credit of the City. While the City issued these bonds,
50% of the principal amount of the bonds is being issued on behalf of the County of McCracken,
Kentucky. McCracken County has issued the City a general obligation note in a principal amount
equal to 50% of the principal amount of the bonds.
The City's legal debt limit under § 158 of the Kentucky Constitution is 10% of total assessed value of
taxable property in Paducah; therefore, the debt limit is $155,879,607. The City's latest bond rating
by Moody is A2. The City has a low amount of general obligation debt, which explains our large
legal debt margin.
(Continued)
-23-
The City of Paducah, Kentucky, issues and incurs debt in order to fund capital improvement projects,
purchase major capital equipment and facilities, and respond to other special funding needs. Less
than 3.5% of the General Fund budget is expended for debt service, and thus has minimal impact on
current and future operations.
Additional information on the City's Long-term debt can be found in Note 3 in the notes to financial
statements on pages 60-63.
VII. Economic Factors and Next Year's Budgets and Rates
A. General Comments. Paducah experienced a slow down in economic growth due to the national
economic slow down in fiscal year 2003. In spite of the national slowdown, Paducah has continued
to experience retail growth in the Kentucky Oaks Mall area and the City's Southside. The
downtown area continues to be enhanced with the addition of new retail establishments, further
expanding the property tax value base as well as the payroll tax base. Downtown will be further
enhanced with the opening of the Luther F. Carson Four Rivers Center for the Performing Arts
(FRC). The FRC is scheduled to open in early 2004 at a cost in excess of $35 million. The State of
Kentucky contributed $20 million toward the project, with the balance of the cost funded locally by
government, tourism taxes and private donations.
B. Unemployment Rate. The unemployment rate for the City of Paducah (McCracken County) as of
June 2003 was 5.9%. This rate compares favorably to state and federal unemployment rates, 5.9%
and 6.4%, respectively.
C. Inflationary Trends. Inflationary trends in the City compare favorably to state and national trends.
D. Annexation Policy. The City's major long-term concern is revenue for capital projects. Incentive
investments in annexation and economic development should enable revenue to increase over the
next 5-8 years. Paducah will continue to pursue its annexation efforts as these efforts will insure
long-term financial stability for the City in terms of increased property taxes, payroll taxes, and
business gross receipts fees through further commercial, industrial, and residential development.
City policy will continue to provide annexation incentives that should pay for themselves in the
long-term and serve as incentive investments in future revenues to offset the cost of providing
services to the newly annexed areas. The policy of balanced and controlled growth will be one of
the City's greatest challenges in the next five to ten years.
E. Strategic Fleet Acquisition Plan. The City's effort to limit expenditure growth and seek cost
savings opportunities assists our effort to insure that funds are available for future capital projects.
Paducah implemented the Strategic Fleet Acquisition Plan fiscal year 1998-1999 in an effort to
systematically review the City's fleet of vehicles. This plan allows the City to make long-range
plans for replacing vehicles at the optimal time to avoid high maintenance costs and take advantage
of a higher resale value.
F. Enterprise Zone. Since its inception, the Paducah Enterprise Zone Program has produced 321
qualified businesses, which have pledged expenditures of $88.9 million in addition to creating 320 -
targeted jobs.
All the above factors, in addition to current and future needs of the City, were considered when the
2003-2004 Budget for the City of Paducah was prepared. The beginning general fund balance for
fiscal year 2003-2004 is $4,925,982. The City has estimated an ending fund balance of $3,200,000,
or 12% of projected general fund expenditures. At the present time, the City is in good financial
condition and no tax increase is planned for fiscal year 2003-2004.
VIII. Requests for Information
This financial report is designed to provide a general financial overview for those interested in the City
of Paducah government finances. Questions or requests for additional financial information may be
addressed to Jonathan Perkins, Finance Director, City of Paducah, 500 South 5th Street, Paducah, KY
42003.
-24-
CITY OF PADUCAH, KENTUCKY
BASIC FINANCIAL STATEMENTS
GOVERNMENT -WIDE FINANCIAL STATEMENTS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2003
THIS PAGE INTENTIONALLY LEFT BLANK
ASSETS
Current Assets:
Cash and cash equivalents
Beneficial interest in investments
held by Community Foundation
Investments
Receivables, net:
Note
Accounts
Grants
Interest
Property tax
Other
Due from other governments
Internal balances
Inventories
Prepaid expenses
Other current assets
Total current assets
Noncurrent Assets:
Investments, restricted
Investments, unrestricted
Notes receivable
Net capital assets
Restricted assets
Other assets
Total noncurrent assets
Total assets
Exhibit 1
CITY OF PADUCAH, KENTUCKY
STATEMENT OF NET ASSETS
JUNE 30, 2003
Primary Government
Governmental Business -type Component
12,795
5,945,622
1,632,926
7,578,548
4,003,411
110,000
-
110,000
-
542,662
5,300
547,962
2,381,756
470,786
-
470,786
303,110
42,905
5,469
48,374
3,571
4,158,143
-
4,158,143
619,570
-
-
-
1,233,032
-
-
-
84,475
95,930
(95,930)
-
-
151,426
-
151,426
2,163,009
8,765
-
8,765
53,015
-
-
-
720,462
19,306,855
1,970,437
21,277,292
15,368,524
-
-
-
5,660,235
-
-
-
150,000
4,376,500
-
4,376,500
-
28,035,664
1,425,753
29,461,417
87,426,186
-
-
-
69,111
-
-
-
151,528
32,412,164
1,425,753
33,837,917
93,457,060
51,719,019
3,396,190
55,115,209
108,825,584
See accompanying notes to the basic financial statements.
-25-
LIABILITIES
Current Liabilities:
Voucher and accounts payable
Accrued payroll and payroll taxes
Due to other taxing agencies
Deferred revenue
Accrued compensated absences
Accrued interest
Prepaid grants
Notes payable due within one year
Revenue bonds due within one year
Public improvement bonds payable - current
Other current liabilities
Total current liabilities
Primary Government
27,955,839
1,425,753 29,381,592
Governmental
Business -type
1,359,680
Component
Activities
Activities
Total
Units
$ 2,042,789
$ 320,232
$ 2,363,021
$ 2,817,509
614,489
20,272
634,761
417,215
110,628
-
110,628
-
4,504,265
-
4,504,265
1,329,802
333,029
46,162
379,191
176,349
-
-
-
176,534
-
-
-
58,410
79,825
-
79,825
88,298
230,000
-
230,000
835,000
-
-
-
330,000
-
-
-
1,864,616
7,915,025
386,666
8,301,691
8,093,733
Noncurrent Liabilities:
27,955,839
1,425,753 29,381,592
76,200,366
Accrued compensated absences
1,359,680
18,671 1,378,351
112,793
Obligation under capital lease
-
- -
2,367
Revenue bonds payable
8,620,000
- 8,620,000
4,389,737
Public improvement bonds payable
-
- -
5,433,508
Public improvement loans payable
-
- -
353,207
Total noncurrent liabilities
9,979,680
18,671 9,998,351
10,291,612
Total liabilities
17,894,705
405,337 18,300,042
18,385,345
NET ASSETS
Invested in capital assets, net of related debt
27,955,839
1,425,753 29,381,592
76,200,366
Restricted for:
Program purposes
713,766
- 713,766
-
Youth programs
-
- -
6,003
Capital projects
3,583,589
- 3,583,589
1,807,186
Art collection
-
- -
28,443
Unrestricted
1,571,120
1,565,100 3,136,220
12,398,241
TOTAL NET ASSETS
$33,824,314
$ 2,990,853 $36,815,167
$90,440,239
-26-
CITY OF PADUCAH, KENTUCKY
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2003
FUNCTIONS/PROGRAMS
Primary Government:
Governmental activities:
General government
Public safety
Public service
Parks and recreation
Planning and development
Interest on long-term debt
Total governmental activities (See Note 1)
Business -type activities:
Solid waste
Civic Center
TISA
Total business -type activities
TOTAL PRIMARY GOVERNMENT
Component Units:
Authorities:
Governmental activities:
Other authorities
Business -type activities:
Paducah Water Works
Paducah Power System
Other authorities
Universities and colleges:
Exhibit 2
$ 113,059 $ - $ 69,725 $ -
5,696,370 5,953,642 - 458,669
37,969,395 38,416,177 - -
5,273,523 3,681,597 1,395,604 1,570,565
Paducah Junior College 1,659,437 349,631 318,045 -
TOTAL COMPONENT UNITS $50,711,784 $48,401,047 $1,783,374 $2,029,234
General revenues:
Taxes and licenses:
Property taxes, levied for general purposes
Franchise tax
Telecommunications tax
Insurance premium tax
Vehicle tax
Bank tax
Business licenses
Employee earnings
Othertaxes
Intergovernmental revenue
Unrestricted investment earnings
Gain on sale of capital assets
Miscellaneous
Transfers
Total general revenues and transfers
Change in net assets
Net assets - beginning
NET ASSETS - ENDING
See accompanying notes to the basic financial statements.
-27-
Program Revenues
Operating
Capital
Charges for
Grants and
Grants and
Expenses
Services
Contributions
Contributions
$ 7,396,882
$ 1,445,383
$ 1,628
$ 120,000
12,964,120
94,386
663,027
911,952
7,376,791
683,119
1,079,537
976,155
975,362
131,355
10,314
-
3,108,192
15,867
2,422,042
205,650
428,578
-
-
-
32,249,925
2,370,110
4,176,548
2,213,757
3,359,731
3,298,964
-
-
46,509
20,825
-
-
123,719
93,383
-
3,666
3,529,959
3,413,172
-
3,666
$35,779,884
$ 5,783,282
$4,176,548
$2,217,423
$ 113,059 $ - $ 69,725 $ -
5,696,370 5,953,642 - 458,669
37,969,395 38,416,177 - -
5,273,523 3,681,597 1,395,604 1,570,565
Paducah Junior College 1,659,437 349,631 318,045 -
TOTAL COMPONENT UNITS $50,711,784 $48,401,047 $1,783,374 $2,029,234
General revenues:
Taxes and licenses:
Property taxes, levied for general purposes
Franchise tax
Telecommunications tax
Insurance premium tax
Vehicle tax
Bank tax
Business licenses
Employee earnings
Othertaxes
Intergovernmental revenue
Unrestricted investment earnings
Gain on sale of capital assets
Miscellaneous
Transfers
Total general revenues and transfers
Change in net assets
Net assets - beginning
NET ASSETS - ENDING
See accompanying notes to the basic financial statements.
-27-
Net (Expense) Revenue and Changes in Net Assets
Primary Government
-
Governmental
Business -type
Component
Activities
Activities
Total Units
$ (5,829,871)
$ -
$ (5,829,871) $ -
(11,294,755)
-
(11,294,755) -
(4,637,980)
-
(4,637,980) -
(833,693)
-
(833,693) -
(464,633)
-
(464,633) -
(428,578)
-
(428,578) -
(23,489,510)
-
(23,489,510) -
-
(60,767)
(60,767) -
-
(25,684)
(25,684) -
-
(26,670)
(26,670) -
-
(113,121)
(113,121) -
(23,489,510)
(113,121)
(23,602,631) -
(43,334)
-
-
-
715,941
-
-
-
446,782
-
-
-
1,374,243
-
-
-
(991,761)
-
-
-
1,501,871
3,893,211
-
3,893,211
739,192
298,251
-
298,251
-
751,802
-
751,802
-
- 3,580,964
-
3,580,964
-
492,077
-
492,077
-
169,668
-
169,668
-
3,404,338
3,404,338
-
10,301,231
10,301,231
-
181,266
-
181,266
-
836,132
-
836,132
102,650
325,811
39,530
365,341
306,781
125,714
24,238
149,952
-
-
-
-
63,835
18,666
(18,666)
-
-
24,379,131
45,102
24,424,233
1,212,458
889,621
(68,019)
821,602
2,714,329
32,934,693
3,058,872
35,993,565
87,725,910
$ 33,824,314
$ 2,990,853
$ 36,815,167
$ 90,440,239
-28-
CITY OF PADUCAH, KENTUCKY
BASIC FINANCIAL STATEMENTS
FUND FINANCIAL STATEMENTS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 309 2003
THIS PAGE INTENTIONALLY LEFT BLANK
CITY OF PADUCAH, KENTUCKY
BALANCESHEET
GOVERNMENTAL FUNDS
JUNE 30, 2003
ASSETS
Cash and cash equivalents
Investments
Accounts receivable:
Accounts
Grants
Interest
Property taxes (net of
allowances for uncollectibles)
Prepaid expenses
Due from other funds
TOTAL ASSETS
LIABILITIES AND FUND BALANCES
Liabilities:
Voucher and accounts payable
Accrued payroll and payroll taxes
Due to other funds
Due to component units
Deferred revenue
Accrued compensated absences
Total liabilities
Fund Balances:
Reserved for:
Program purposes
Capital improvements
Unreserved:
General Fund
Special Revenue Funds
Debt Service Fund
Total fund balances
TOTAL LIABILITIES AND FUND BALANCES
See accompanying notes to the basic financial statements.
-29-
General
4,575,860
84,550
71,356
36,600
3,934,540
436,574
$10,328,815
$ 609,681
571,141
110,628
3,800,336
311,047
5,402,833
4,925,982
4,925,982
$10,328,815
Exhibit 3
General
Downtown
Capital
Capital
Improvements
Improvements
$1,121,203
$3,000,000
105,158
-
-
189,173
292,842
-
1,062
-
$1,520,265
$3,189,173
$ 426,340 $ -
2,586 189,173
507,750 -
936,676 189,173
583,589 3,000,000
583,589 3,000,000
$1,520,265 $3,189,173
Nonmajor
Total
Governmental
Governmental
Funds
Funds
$1,744,135
$ 7,054,673
525,503
5,206,521
65,320
339,043
106,588
470,786
1,270
38,932
-
3,934,540
8,765
8,765
U,4J1,J)81 $ 1 /,469,834
$ 359,561
$ 1,395,582
36,503
607,644
67,394
259,153
-
110,628
166,816
4,474,902
- -
311,047
630,274
7,158,956
695,213 695,213
- 3,583,589
- 4,925,982
1,080,043 1,080,043
"" 1,IS11,3U/ 1U,33U,2S/2S
$2,451,581 $ 17,489,834
-30-
CITY OF PADUCAH, KENTUCKY
RECONCILIATION OF THE GOVERNMENTAL FUNDS
BALANCE SHEET TO STATEMENT OF NET ASSETS
JUNE 30, 2003
Total fund balance - total governmental funds
Amounts reported for governmental activities in the Statement
of Net Assets are different because:
Delinquent property taxes receivable are not reported in the
governmental funds balance sheet since they are not considered
"available" revenues.
The long-term note receivable is not reported in the governmental
funds balance sheet since it is not available to pay current period
expenditures.
Inventory is not a current financial resource and, therefore, is not
reported in the governmental funds balance sheet.
Capital assets used in governmental activities are not current
financial resources and, therefore, are not reported in the
governmental funds balance sheet. This amount includes capital
assets of Internal Service Funds.
Long-term liabilities are not due and payable in the current period
and, therefore, they are not reported in the governmental funds
balance sheet. This amount includes Internal Service Funds' non-
current liabilities. The long-term liabilities are:
Due within one year 309,825
Due within more than one year 9,979,680
Internal service funds are used by management to charge the costs
of certain activities, such as insurance and fleet management, to
individual funds. The assets and liabilities of the Internal Service
Funds (net of amount allocated to business -type activities) not
included in other reconciling items are:
Current assets 1,854,509
Current liabilities (882,817)
Net of amount allocated to
business -type activities 95,930
NET ASSETS OF GOVERNMENTAL ACTIVITIES
See accompanying notes to the basic financial statements.
-31-
Exhibit 4
$10,330,878
223,603
4,437,500
18,552
28,035,664
(10,289,505)
1.067.622
$ 33,824,314
THIS PAGE INTENTIONALLY LEFT BLANK
CITY OF PADUCAH, KENTUCKY
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2003
Revenues:
Taxes
Licenses
Charges for services
Intergovernmental
Grants
Interest
Miscellaneous
Total revenues
Expenditures:
Current operations:
General government
Public safety
Public service
Parks and recreation
Planning and development
Other
Capital outlay
Debt Service:
Principal requirement
Interest and fiscal requirement
Total expenditures
Excess revenues over (under)
expenditures
Other Financing Sources (Uses):
Transfers in
Transfers out
Total other financing sources (uses)
Excess revenues and other financing sources
over (under) expenditures and other uses
Fund balances - beginning of the year,
as adjusted
Adjustment to beginning fund balance
FUND BALANCES - END OF YEAR
See accompanying notes to the basic financial statements.
-32-
Exhibit 5
3,943,031 - -
11,277,297 - -
5,218,896 - -
975,361 - -
645,653 - -
- 3,251,808 921,170
22,060,238 3,251,808 921,1-70
2,881,869
General
Downtown
General
Capital
Capital
Fund
Improvements
Improvements
$ 5,022,069
$ -
$ -
17,900,739
-
-
652,791
-
-
-
56,000
189,173
591,652
2,035,476
-
170,061
3,290
119,103
604,795
573,272
-
24,942,107
2,668,038
308,276
3,943,031 - -
11,277,297 - -
5,218,896 - -
975,361 - -
645,653 - -
- 3,251,808 921,170
22,060,238 3,251,808 921,1-70
2,881,869
(583,770) (612,894)
281,209
361,407 282,119
(2,678,758)
(74,991) -
(2,397,549)
286,416 282,119
484,320 (297,354)
4,441,662 880,943
$ 4,925,982 $ 583,589
(330,775)
3,330,775
s i'mu'um
Nonmajor
Total
Governmental
Governmental
Funds
Funds
$ 751,802
$ 5,773,871
-
17,900,739
91,035
743,826
941,133
1,186,306
2,273,647
4,900,775
24,340
316,794
625,341
1,803,408
4,707,298
32,625,719
-
3,943,031
1,258,085
12,535,382
776,500
5,995,396
-
975,361
2,204,395
2,204,395
-
645,653
-
4,172,978
379,229
379,229
428,578
428,578
5,046,787
31,280,003
(339,489)
1,345,716
1,149,724
2,074,459
(413,937)
(3,167,686)
735,787 (1,093,227)
396,298 252,489
1,526,792
10,180,172
(101,783)
(101,783)
$1,821,307
$10,330,878
-33-
Exhibit 6
CITY OF PADUCAH, KENTUCKY
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2003
Net change in fund balances - total governmental funds $ 252,489
Amounts reported for governmental activities in the Statement
of Activities are different because:
Inventory purchases require the use of current financial resources
and, therefore, are reported as expenditures in governmental funds. 26,642
Inventory sales provide current financial resources and are reported
as revenues in governmental funds. (55,039)
Governmental funds report capital outlays as expenditures.
However, in the Statement of Activities, the cost of those assets is
allocated over their estimated useful lives as depreciation expense.
This is the amount of capital outlays in the current period. 1,907,998
The loss on disposal of capital assets is not recorded in the
governmental funds because the assets were recorded as
expenditures when purchased. (1,040)
Delinquent property taxes receivable are not considered "available"
revenues in the governmental funds. 12,405
A contribution of land was received. The value of the land is not
reported in the governmental funds. 120,000
Depreciation expense on capital assets is reported in the
government -wide statement of activities and changes in net assets
but does not require the use of current financial resources.
Therefore, depreciation expense is not reported as expenditure in
governmental funds. This amount includes Internal Service Funds'
depreciation expense of $359,900. (2,336,317)
Principal payments of debt require the use of current financial
resources and, therefore, are reported as expenditures in
governmental funds. However, principal payments of debt do not
affect net assets in the government -wide statement of net assets. 274,229
(Continued)
-34-
CITY OF PADUCAH, KENTUCKY
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2003
Long-term accrued compensated absences do not require the use of
current financial resources and, therefore, are not reported as
expenditures in governmental funds.
Internal service funds are used by management to charge the costs
of certain activities, such as insurance and fleet management, to
individual funds. The net revenue of the Internal Service Funds is
reported with governmental activities net of the amount allocated to
business -type activities and depreciation expense. These amounts
are as follows:
Change in net assets $ 245,639
Net of amount allocated to
business -type activities 95,930
Depreciation expense 359,900
CHANGE IN NET ASSETS OF GOVERNMENTAL ACTIVITIES
See accompanying notes to the basic financial statements.
-35-
Exhibit 6
(Continued)
$ (13,215)
701,469
$ 889,621
Exhibit 7
CITY OF PADUCAH, KENTUCKY
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
JUNE 30, 2003
LIABILITIES
Current Liabilities:
Voucher and accounts payable
104,045 216,187
320,232
647,207
Governmental
20,272 -
Business -type Activities
Activities
ASSETS
46,162 -
Nonmajor
21,982
Internal
- -
Solid
Enterprise
Deferred revenue
Service
Current Assets:
Waste
Funds
Totals
Funds
Cash and cash equivalents
$ 166,512
$256,160
$ 422,672
$ 725,943
Investments
1,632,926
-
1,632,926
739,101
Accounts receivable
5,300
-
5,300
-
Interest receivable
5,469
-
5,469
256,592
Inventory
-
-
-
132,873
Total current assets
1,810,207
256,160
2,066,367
1,854,509
Noncurrent Assets:
Property, plant and equipment, net
1,074,341
351,412
1,425,753
1,491,719
Total assets
2,884,548
607,572
3,492,120
3,346,228
LIABILITIES
Current Liabilities:
Voucher and accounts payable
104,045 216,187
320,232
647,207
Accrued payroll and payroll taxes
20,272 -
20,272
6,845
Accrued compensation absences
46,162 -
46,162
21,982
Due to other funds
- -
-
177,420
Deferred revenue
- -
-
29,363
Total current liabilities
170,479 216,187
386,666
882,817
Noncurrent Liabilities:
Accrued compensation absences
18,671 -
18,671
34,087
Total liabilities
189,150 216,187
405,337
916,904
NET ASSETS
Invested in capital assets,
net of related debt 1,074,341 351,412 1,425,753
Unrestricted 1,621,057 39,973 1,661,030
TOTAL NET ASSETS $2,695,398 $391,385 3,086,783
Reconciliation to government -wide statements of net assets:
Adjustment to reflect the consolidation of Internal Service Funds'
activities related to Enterprise Funds (95,930)
NET ASSETS OF BUSINESS -TYPE ACTIVITIES $2,990,853
See accompanying notes to the basic financial statements.
-36-
1,491,719
937,605
$2,429,324
CITY OF PADUCAH, KENTUCKY
STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN FUND NET ASSETS
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2003
Operating Revenues:
Charges for services - internal
Charges for services - external
Miscellaneous
Total operating revenues
Operating Expenses:
Cost of sales and service
Depreciation and amortization
Total operating expenses
Operating income (loss)
Nonoperating Revenues (Expenses):
Interest and investment income
Gain (loss) on disposal of property
and equipment
Total nonoperating revenues (expenses)
Income (loss) before contributions and
operating transfers
Other Financing Sources (Uses):
Capital contributions
Disposal of contributed assets
Transfers in
Transfers out
Total other financing sources (uses)
Change in net assets
Total net assets - beginning of the year,
Exhibit 8
24,238
63,488
04 4<1
(28,666)
(28,666)
69,985
24,238 125,714
280 63,768 134,731
(55,740) 42,911 (310,186)
3,666
10,000
13,666
(42,074)
as restated 2,625,413 433,459
TOTAL NET ASSETS - END OF YEAR $2,695,398 $391,385
Reconciliation to government -wide statements of net assets:
Adjustment to reflect the consolidation of Internal Service Funds'
activities related to enterprise funds
CHANGE IN NET ASSETS OF BUSINESS -TYPE ACTIVITIES
See accompanying notes to the basic financial statements.
-37-
3,666
10,000
(28,666)
(15,000)
27,911
(95,930)
$ (68,019)
(63,758)
619,583
555,825
245,639
2,183,685
$2,429,324
Governmental
Business
-type Activities
Activities
Nonmajor
Internal
Solid
Enterprise
Service
Waste
Funds
Totals
Funds
$3,283,461
$114,208
$3,397,669
$4,350,871
-
-
-
375,419
15,503
-
15,503
-
3,298,964
114,208
3,413,172
4,726,290
2,949,109
109,659
3,058,768
4,811,307
314,692
60,569
375,261
359,900
3,263,801
170,228
3,434,029
5,171,207
35,163
(56,020)
(20,857)
(444,917)
39,250
280
39,530
9,017
24,238
63,488
04 4<1
(28,666)
(28,666)
69,985
24,238 125,714
280 63,768 134,731
(55,740) 42,911 (310,186)
3,666
10,000
13,666
(42,074)
as restated 2,625,413 433,459
TOTAL NET ASSETS - END OF YEAR $2,695,398 $391,385
Reconciliation to government -wide statements of net assets:
Adjustment to reflect the consolidation of Internal Service Funds'
activities related to enterprise funds
CHANGE IN NET ASSETS OF BUSINESS -TYPE ACTIVITIES
See accompanying notes to the basic financial statements.
-37-
3,666
10,000
(28,666)
(15,000)
27,911
(95,930)
$ (68,019)
(63,758)
619,583
555,825
245,639
2,183,685
$2,429,324
CITY OF PADUCAH, KENTUCKY
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2003
Cash Flows from Operating Activities:
Cash received from customers
Payments to suppliers
Payments to employees
Claims paid
Payments to internal service funds
Other receipts (payments)
Net cash provided (used) by operating activities
Cash Flows from Noncapital Financing Activities:
Transfers (to) from other funds
Cash Flows from Capital and Related
Financing Activities:
Capital contributions
Acquisition and construction
of capital assets
Proceeds from sale of capital assets
Insurance proceeds received
Net cash provided (used) by capital and
related financing activities
Cash Flows from Investing Activities:
Proceeds from sale of investment securities
Interest on cash and investments
Purchase of investments
Net cash provided (used) by investing
activities
Net increase (decrease) in cash and cash
equivalents
Cash and cash equivalents, July 1, 2002
CASH AND CASH EQUIVALENTS,
JUNE 30, 2003
Reconciliation of Operating Income (Loss) to Net
Cash Provided by Operating Activities:
Operating income (loss)
Adjustments to reconcile operating income to
net cash provided by operating activities:
Depreciation and amortization
Change in assets and liabilities:
Receivables
Prepaid expenses
Inventories
Accounts payable
NET CASH PROVIDED (USED) BY OPERATING
ACTIVITIES
See accompanying notes to the basic financial statements.
-38-
Exhibit 9
Governmental
Business -type Activities
Activities
359,900
Nonmajor
(8,441)
Internal
Solid
Enterprise
(7,465)
Service
Waste
Funds
Totals
Funds
$3,278,161
$114,208
$3,392,369
$4,613,595
(2,101,074)
-
(2,101,074)
(183,681)
(747,137)
-
(747,137)
(200,522)
-
-
-
(3,044,151)
(179,400)
-
(179,400)
-
12,362
(86,830)
(74,468)
(914,325)
262,912
27,378
290,290
270,916
(28,666)
10,000
(18,666)
619,583
-
3,666
3,666
-
(277,258)
(12,778)
(290,036)
(491,338)
24,238
-
24,238
-
-
-
-
125,714
(253,020)
(9,112)
(262,132)
(365,624)
-
-
-
229,781
39,250
280
39,530
9,320
(1,225,803)
-
(1,225,803)
(739,101)
(1,186,553)
280
(1,186,273)
(500,000)
(1,205,327)
28,546
(1,176,781)
24,875
1,371,839
227,614
1,599,453
701,068
$ 166,512 $256,160 $ 422,672 $ 725,943
$ 35,163 $ (56,020) $ (20,857) $ (444,917)
314,692 60,569
375,261
359,900
(8,441) -
(8,441)
(112,695)
359 -
359
(7,465)
(78,861) 22,829
(56,032)
476,093
$ 262,912 $ 27,378 $ 290,290 $ 270,916
ASSETS
Cash and cash equivalents
Receivables:
Interest
Other
Investments at fair value
Total assets
LIABILITIES
Voucher and accounts payable
Payroll taxes and withholdings
payable
Due to other funds
Deposits held and due to others
Total liabilities
NET ASSETS
Held in trust for pension benefits
and other purposes
Exhibit 10
CITY OF PADUCAH, KENTUCKY
STATEMENT OF NET ASSETS
FIDUCIARY FUNDS
JUNE 30, 2003
Primary Government
Component
Unit
Private-
Private -
Pension purpose Agency
purpose
Agency
Funds Trusts Funds
Trust
Fund
$ 523,693 $ 3,020 $251,099
$ 270
$30,228
62,251 - -
-
-
5,552 - -
-
-
9,197,151 72,476 -
2,178,908
-
9,788,647 75,496 251,099
2,179,178
30,228
553 - -
- - 251,099
- 1 -
553 1 $251,099
$9,788,094 $75,495
See accompanying notes to the basic financial statements
-39-
$2,179,178
30,228
$30,228
CITY OF PADUCAH, KENTUCKY
STATEMENT OF CHANGES IN NET ASSETS
FIDUCIARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2003
Additions:
Contributions:
Employer
Plan members
Intergovernmental revenues
Total contributions
Investment income:
Net increase (decrease) in
fair value of investments
Interest and dividends
Net investment income
Interfund transfers
Total additions
Deductions:
Benefits
Health insurance
Administrative expenses
Interfund transfers
Total deductions
Change in net assets
Net assets - beginning of the year
NET ASSETS - END OF YEAR
See accompanying notes to the basic financial statements.
-40-
Exhibit 11
(93,230)
1,826
Component
315,478
3,865
Unit
222,248
Private-
Private -
Pension
purpose
purpose
Funds
Trusts
Trust
$ 214,778
$ -
$ -
29,981
-
-
-
2,295
189,871
244,759
2,295
189,871
(93,230)
1,826
-
315,478
3,865
111,667
222,248
5,691
111,667
505,995
-
-
973,002
7,986
301,538
1,851,259
-
-
22,183
-
-
37,956
1,527
188,306
-
13,685
-
1,911,398
15,212
188,306
(938,396)
(7,226)
113,232
10,726,490
82,721
2,065,946
$9,788,094
$75,495
$2,179,178
CITY OF PADUCAH, KENTUCKY
BASIC FINANCIAL STATEMENTS
COMPONENT UNITS FINANCIAL STATEMENTS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 309 2003
THIS PAGE INTENTIONALLY LEFT BLANK
Exhibit 12
CITY OF PADUCAH, KENTUCKY
STATEMENT OF NET ASSETS
COMPONENT UNITS
JUNE 30, 2003
See accompanying notes to the basic financial statements
-41-
Authorities
Nonmajor
Nonmajor
ASSETS
Paducah
Paducah
Governmental
Business -type
Water
Power
Component
Component
Current Assets:
Works
System
Units
Units
Cash and cash equivalents
$ 1,827,222
$ 371,751
$ 31,543
$1,420,810
Beneficial interest in investments
held by Community Foundation
-
-
-
12,795
Investments
-
-
-
-
Receivables, net:
Accounts
311,132
2,065,174
-
450
Grants
-
-
-
303,110
Interest
-
-
-
3,571
Property tax
-
-
-
-
Other
555,036
569,408
21,678
22,160
Due from other governments
-
-
-
-
Inventories
374,272
1,762,017
-
26,720
Prepaid expenses
-
34,018
-
18,997
Other current assets
720,462
-
-
-
Total current assets
3,788,124
4,802,368
53,221
1,808,613
Noncurrent Assets:
Investments, restricted
2,061,256
3,548,979
-
50,000
Investments, unrestricted
-
-
-
150,000
Capital assets:
Land
-
13,761
-
225,181
Improvements other than buildings
-
-
-
85,569
Buildings
-
-
-
1,709,405
Rolling stock and equipment
-
-
16,024
3,818,796
Utility plant
50,158,029
60,456,108
-
-
Vehicles
-
-
-
15,548
Less: accumulated depreciation
(19,620,488)
(23,388,336)
(6,503)
(2,375,003)
Net capital assets
30,537,541
37,081,533
9,521
3,479,496
Restricted assets
69,111
-
-
-
Other assets
-
123,085
-
-
Total noncurrent assets
32,667,908
40,753,597
9,521
3,679,496
Total assets
36,456,032
45,555,965
62,742
5,488,109
See accompanying notes to the basic financial statements
-41-
Universities
and
Colleges
Paducah
Junior
College
All
Component
Unit
Totals
$ 138,992
$ 3,790,318
-
12,795
4,003,411
4,003,411
5,000
2,381,756
-
303,110
-
3,571
619,570
619,570
64,750
1,233,032
84,475
84,475
-
2,163,009
-
53,015
-
720,462
4,916,198
15,368,524
- 5,660,235
150,000
-
238,942
123,883
209,452
17,594,321
19,303,726
1,355,673
5,190,493
-
110,614,137
-
15,548
(2,755,782)
(48,146,112)
16,318,095
87,426,186
-
69,111
28,443
151,528
16,346,538
93,457,060
21,262,736
108,825,584
-42-
(Continued)
Exhibit 12
(Continued)
CITY OF PADUCAH, KENTUCKY
STATEMENT OF NET ASSETS
COMPONENT UNITS
JUNE 30, 2003
Noncurrent Liabilities:
Accrued compensated absences
-
Authorities
-
112,793
Obligation under capital lease
-
Nonmajor
Nonmajor
LIABILITIES
Paducah
Paducah
Governmental
Business -type
-
Water
Power
Component
Component
Current Liabilities:
Works
System
Units
Units
Voucher and accounts payable
$ 192,768
$ 2,497,240
$ 215
$ 59,848
Accrued payroll and payroll taxes
-
355,648
975
60,592
Deferred revenues
-
1,266,508
-
15,490
Accrued compensated absences
-
-
783
22,987
Accrued interest
-
176,528
-
6
Prepaid grants
-
-
-
58,410
Notes payable due within one year
28,298
-
-
60,000
Revenue bonds due within one year
835,000
-
-
-
Public improvement bonds payable -
Capital projects
-
1,807,186
-
current
-
330,000
-
-
Other current liabilities
928,148
862,451
-
74,017
Total current liabilities
1,984,214
5,488,375
1,973
351,350
Noncurrent Liabilities:
Accrued compensated absences
-
-
-
112,793
Obligation under capital lease
-
-
-
2,367
Revenue bonds payable
4,389,737
-
-
-
Public improvement bonds payable
-
5,433,508
-
-
Public improvement loan payable
304,207
-
49,000
-
Total noncurrent liabilities
4,693,944
5,433,508
49,000
115,160
Total liabilities
6,678,158
10,921,883
50,973
466,510
NET ASSETS
Net Assets:
Invested in capital assets,
net of related debt
25,097,835
31,302,348
9,521
3,472,567
Restricted for:
Youth programs
-
-
-
6,003
Capital projects
-
1,807,186
-
-
Art collection
-
-
-
-
Unrestricted
4,680,039
1,524,548
2,248
1,543,029
TOTAL NET ASSETS
$29,777,874
$34,634,082
$ 11,769
$5,021,599
-43-
Universities
and
Colleges
All
Paducah
Component
Junior
Unit
College
Totals
$ 67,438
$ 2,817,509
-
417,215
47,804
1,329,802
152,579
176,349
-
176,534
-
58,410
-
88,298
-
835,000
-
330,000
-
1,864,616
267,821
8,093,733
-
112,793
-
2,367
- -
4,389,737
-
5,433,508
-
353,207
-
10,291,612
267,821 18,385,345
16,318,095 76,200,366
- 6,003
- 1,807,186
28,443 28,443
4,648,377 12,398,241
$20,994,915 $ 90,440,239
-44-
Exhibit 13
CITY OF PADUCAH, KENTUCKY
STATEMENT OF ACTIVITIES
COMPONENT UNITS
FOR THE YEAR ENDED JUNE 30, 2003
Program Revenues
FUNCTIONS/PROGRAMS Operating Capital Net
Charges for Grants and Grants and (Expenses)
Authorities: Expenses Services Contributions Contributions Revenue
Governmental activities:
Other authorities $ 113,059
$ -
Business -type activities:
Paducah Water Works 5,696,370
5,953,642
Paducah Power System 37,969,395
38,416,177
Other authorities 5,273,523
3,681,597
Universities and Colleges:
Paducah Junior College 1,659,437
349,631
TOTAL COMPONENT UNITS $50,711,784
$48,401,047
General Revenues:
Property tax
Intergovernmental, not restricted to
specific functions/programs
Unrestricted investment earnings
Miscellaneous general
Total general revenues and transfers
Change in net assets
Net assets at July 1, 2002, as restated
NET ASSETS AT JUNE 30, 2003
See accompanying notes to the basic financial statements
-45-
$ 69,725 $ - $ (43,334)
- 458,669 715,941
- - 446,782
1,395,604 1,570,565 1,374,243
318,045 - (991,761)
$1,783,374 $2,029,234 1,501,871
739,192
102,650
306,781
2,714,329
87,725,910
$90,440,239
CITY OF PADUCAH, KENTUCKY
NOTES TO THE FINANCIAL STATEMENTS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 309 2003
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2003
Note 1 - Summary of Significant Accounting Policies:
General Statement
The City of Paducah (City) complies with generally accepted accounting principles (GAAP). GAAP
includes all relevant Governmental Accounting Standards Board (GASB) pronouncements. In the
government -wide financial statements and the fund financial statements for the proprietary funds,
Financial Accounting Standards Board (FASB) pronouncements and Accounting Principles Board (APB)
opinions issued on or before November 30, 1989, have been applied unless those pronouncements conflict
with or contradict GASB pronouncements, in which case, GASB prevails. For enterprise funds, GASB
Statement Nos. 20 and 34 provide the City the option of electing to apply FASB pronouncements issued
after November 30, 1989. The City has elected not to apply those pronouncements. The accounting and
reporting framework and the more significant accounting policies are discussed in subsequent subsections
of this Note. For the fiscal year ended June 30, 2003, the City implemented the new financial reporting
requirements of GASB Statement No. 34. As a result, an entirely new financial presentation format has
been implemented. The financial reporting entity, basis of accounting, and other significant policies
employed by the City are summarized as follows:
Financial Reporting Entity
The City operates under a City Manager form of government. The Board of Commissioners consists of a
Mayor and four Commissioners elected at large by the citizens on a non-partisan basis. As required by
generally accepted accounting principles, the financial statements of the reporting entity include those of
the City of Paducah (the primary government) and its component units. The component units discussed
below are included in the City's reporting entity because of the significance of their operational or
financial relationships with the City.
Blended Component Units
The following component units have been presented as blended component units because the component
unit's governing body is substantially the same as the governing body of the City, or the component unit
provides services almost entirely to the primary government.
Paducah Public Improvement Corporation - The Mayor and Commissioners serve as the governing
body for the Corporation. Although it is legally separate from the City, the Paducah Public
Improvement Corporation is reported as if it were part of the primary government because its sole
purpose is to finance long-term debt since the City may not legally obligate itself beyond one year.
Police and Firefighters' Retirement Fund - This Retirement Fund was established for the benefit of
the police and firemen of the City. It is administered by a Board of Trustees consisting of the Mayor,
City Finance Director and representatives of the Police and Fire Departments. The Board is authorized
to establish benefit levels and to approve actuarial assumptions used in the determination of
contribution levels.
Discretely Presented Component Units
The component unit column in the basic financial statements includes the financial data of the City's other
component units. They are reported in a separate column to emphasize that they are legally separate from
the City. The following component units are included in the reporting entity because of their financial
relationship with the City.
Paducah Water Works - The City of Paducah Water Works Commission is appointed by the Mayor.
The rates for user charges and bond issuance authorizations are subject to approval by the City
Commission of the City of Paducah.
(Continued)
-46-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2003
Note I - Summary of Significant Accounting Policies:
Paducah Power System - The members of the Electric Plant Board are appointed by the Mayor. The
system provides a financial benefit to the City through a payment in lieu of taxes.
Paducah Mainstreet, Inc. — The governing board consists of sixteen members appointed by the
Mayor. Paducah Mainstreet is an organization that provides for the preservation and revitalization of
the historic buildings in downtown Paducah, Kentucky.
Transit Authority of the City of Paducah - The Transit Authority's governing board is appointed by
the Mayor of the City of Paducah. The City is the grantee agency receiving, on behalf of the Transit
Authority, its principal revenues. The City also contributes substantially to the operation of the
Authority by providing cash subsidies and facilities.
Forest Hills Village, Inc. - The Corporation's Board is appointed by the City, and their only purpose is
to manage City of Paducah properties known as "Forest Hills Housing Development". The City and
Corporation have a lease agreement detailing the terms and conditions of operations.
Edwin J. Paxton Park Golf Course — The Paducah Golf Commission is appointed by the Mayor.
Paxton Park is a public recreational golf course operating in McCracken County, Kentucky for the
enjoyment of the golf community.
Paducah Junior College, Incorporated - The Board of Trustees of the junior college are appointed by
the Mayor. The College is a part of the University of Kentucky Community College System which is
now administered by the Kentucky Community and Technical College System. Under this system, the
University of Kentucky receives the monies from student tuition, fees and other related income and
provides the financing for the operational budget of the College. A tax levied and collected by the City
is a primary revenue source for the College. These funds, as well as gifts and grants made to the
College, may be used for the acquisition or improvement of property or to finance programs beyond the
level of those normally provided by community colleges in the University of Kentucky system.
Complete financial statements of the individual component units can be obtained from their respective
administrative offices in the following locations:
Paducah Water Works
401 Washington Street
Paducah, Kentucky 42003
Paducah Power System
1500 Broadway
Paducah, Kentucky 42001
Paducah Mainstreet, Inc.
124 Broadway
Paducah, Kentucky 42001
Transit Authority of the
City of Paducah
850 Harrison St.
Paducah, Kentucky 42001
-47-
Forest Hills Village, Inc.
238 Highland Boulevard
Paducah, Kentucky 42003
Paducah Golf Commission
P.O. Box 7624
Paducah, Kentucky 42002
Paducah Junior College, Incorporated
4810 Blandville Road
Paducah, Kentucky 42001
(Continued)
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2003
Note 1 - Summary of Significant Accounting Policies:
Related Organizations
City officials are also responsible for appointing the members of boards of other organizations, but the
City's accountability for these organizations does not extend beyond appointing authority. The
organizations listed below are notable related organizations which have not been included in the City's
report.
Paducah Housing Authority — The Paducah Housing Authority (PHA) is a legally separate entity that
provides for construction, operation and management of low income housing projects within the City.
PHA is a legally separate entity and is not financially accountable to the City. This organization is not
included as a component unit of the City.
Joint Sewer Agency — As of July 1, 1999, the assets and liabilities of the Wastewater/Stormwater Fund
were transferred to the Paducah -McCracken County Joint Sewer Agency pursuant to a municipal order
dated June 29, 1999. The Paducah -McCracken County Joint Sewer Agency is a legally separate entity
and is not financially accountable to the City. This organization is not included as a component unit of
the City.
Basis of Presentation
Government -wide Financial Statements
The Statement of Net Assets and Statement of Activities display information about the reporting
government as a whole. They include all funds of the reporting entity except for fiduciary funds. The
statements distinguish between governmental and business -type activities. Governmental activities
generally are financed through taxes, intergovernmental revenues, and other nonexchange revenues.
Business -type activities are financed in whole or in part by fees charged to external parties for goods or
services.
Fund Financial Statements
Fund financial statements of the reporting entity are organized into funds, each of which is considered to
be separate accounting entities. Each fund is accounted for by providing a separate set of self -balancing
accounts that constitute its assets, liabilities, fund equity, revenues, and expenditure/expenses. Funds are
organized into three major categories: governmental, proprietary, and fiduciary. An emphasis is placed
on major funds within the governmental and proprietary categories. A fund is considered major if it is the
primary operating fund of the City or meets the following criteria:
a. Total assets, liabilities, revenues, or expenditures/expenses of that individual governmental or
enterprise fund are at least ten percent of the corresponding total for all funds of that category or
type; and
b. Total assets, liabilities, revenues, or expenditures/expenses of the individual governmental fund or
enterprise fund are at least five percent of the corresponding total for all governmental and enterprise
funds combined.
The funds of the financial reporting entity are described below:
Governmental funds are those funds through which most governmental functions typically are financed.
The measurement focus of governmental funds is on the sources, uses and balance of current financial
resources. The City has presented the following major governmental funds:
(Continued)
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2003
Note 1 - Summary of Significant Account Policies:
General Fund - To account for resources traditionally associated with governments which are not
required to be accounted for in another fund.
General Capital Improvements - To account for the acquisition or construction of major capital projects
other than those financed by proprietary fund operations and special assessments.
Downtown Capital Improvements — To account for the acquisition or construction of major capital
facilities related to the development of downtown Paducah.
Proprietary funds are accounted for using the economic resources measurement focus and the accrual basis
of accounting. The accounting objectives are determinations of net income, financial position and cash
flow. All assets and liabilities are included on the Statement of Net Assets. The City has presented the
following major proprietary fund:
Solid Waste Fund — To account for the provision of refuse services to the residents of the City.
Additionally, the City reports the internal service funds which are used to account for the fleet
management services, self funded property and casualty self insurance and self funded health and
disability insurance provided to departments of the city.
Fiduciary funds, which are not included in government -wide statements, include Police and Firefighters'
Retirement Fund, Appointive Employees' Pension Fund, two private -purpose trusts, and two agency
funds.
Measurement Focus and Basis of Accounting
Measurement focus is a term used to describe "which" transactions are recorded within the various
financial statements. Basis of accounting refers to "when" transactions are recorded regardless of the
measurement focus applied.
Measurement Focus
On the government -wide Statement of Net Assets and the Statement of Activities, both governmental and
business -like activities are presented using the economic resources measurement focus as defined in item
b. below.
In the fund financial statements, the "current financial resources" measurement focus or the "economic
resources" measurement focus is used as appropriate:
a. All governmental funds utilize a "current financial resources" measurement focus. Only current
financial assets and liabilities are generally included on their balance sheets. Their operating
statements present sources and uses of available spendable financial resources during a given period.
These funds use fund balance as their measure of available spendable financial resources at the end
of the period.
The proprietary fund utilizes an "economic resources" measurement focus. The accounting
objectives of this measurement focus are the determination of operating income, changes in net
assets (or cost recovery), financial position, and cash flows. All assets and liabilities (whether
current or noncurrent) associated with their activities are reported. Proprietary fund equity is
classified as net assets.
c. Agency funds are not involved in the measurement of results of operations; therefore, measurement
focus is not applicable to them.
(Continued)
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2003
Note 1 - Summary of Significant Account Policies:
Basis of Accounting
In the government -wide Statement of Net Assets and Statement of Activities, both governmental and
business -like activities are presented using the accrual basis of accounting. Under the accrual basis of
accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred
or economic asset used. Revenues, expenses, gains, losses, assets, and liabilities resulting from exchange
and exchange -like transactions are recognized when the exchange takes place.
In the fund financial statements, governmental funds and agency funds are presented on the modified
accrual basis of accounting. Under this modified accrual basis of accounting, revenues are recognized
when "measurable and available." Measurable means knowing or being able to reasonably estimate the
amount. Available means collectible within the current period or within sixty days after year end.
Expenditures (including capital outlay) are recorded when the related fund liability is incurred, except for
general obligation bond principal and interest which are reported when due.
All proprietary funds utilize the accrual basis of accounting. Under the accrual basis of accounting,
revenues are recognized when earned and expenses are recorded when the liability is incurred or economic
asset used.
Those revenues susceptible to accrual are taxes, intergovernmental, employer and employees'
contributions to trust funds, interest revenue and charges for services. License and permit revenues are not
susceptible to accrual because generally they are not measurable until received in cash.
The City reports deferred revenue on its statement of net assets. Deferred revenues arise when potential
revenue does not meet both the "measurable" and "available" criteria for recognition in the current period.
Deferred revenues also arise when resources are received by the City before it has a legal claim to them, as
when grant monies are received prior to the incurrence of qualifying expenditures. In subsequent periods,
when both revenue recognition criteria are met, or when the City has a legal claim to the resources, the
liability for deferred revenue is removed from the statement of net assets and revenue is recognized.
Budgets and Budgetary Accounting
The City follows these procedures in establishing the budgetary data reflected in these financial
statements:
1. Prior to July, the City Manager submits to the City Commission a proposed operating budget for the
fiscal year commencing on July 1. The operating budget includes proposed expenditures and the
means of financing those.
2. Public hearings are conducted by the City to obtain taxpayer comments.
3. Prior to July, the budget is legally enacted through passage of an ordinance.
4. The City Manager is authorized to transfer budgeted amounts between department line items;
however, any revisions that alter the total expenditures of any department must be approved by the
City Commission.
5. Formal budgetary integration is employed as a management control device during the year and the
budget is legally adopted. Budget amendments are also legally adopted.
6. The budget is adopted on a basis (budget basis), which differs from generally accepted accounting
principles (GAAP basis).
(Continued)
-50-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2003
Note 1 - Summary of Significant Accounting Policies:
Encumbrance accounting, under which purchase orders, contracts, and other commitments for the
expenditure of monies are recorded in order to reserve that portion of the applicable appropriation, is
employed as an extension of formal budgetary integration in the General Fund, Special Revenue Funds,
Debt Service Fund, and Capital Projects Funds. In accordance with generally accepted accounting
principles (GAAP), encumbrances outstanding at year end are reported as reservations of fund balances
since they do not constitute expenditures or liabilities. There are no encumbrances at June 30, 2003.
Cash and Investments
For the purpose of the Statement of Net Assets, "cash, including time deposits" includes all demand,
savings accounts, and certificates of deposit of the City. For the purpose of the proprietary fund Statement
of Cash Flows, "cash and cash equivalents" include all demand and savings accounts, and certificates of
deposit or short-term investments with an original maturity of three months or less.
Investments are reported at fair value which is determined using selected bases. Short-term investments
are reported at cost, which approximates fair value. Additional cash and investment disclosures are
presented in Note 3.
Receivables
In the government -wide statements, receivables consist of all revenues earned at year end and not yet
received. Major receivable balances for the governmental activities include property taxes, franchise taxes
and grant revenue. Business -type activities report utilities and interest earnings as their major receivables.
The government -wide statements also include a general obligation note receivable related to the general
obligation bonds outstanding as described in Note 3.
In the fund financial statements, material receivables in governmental funds include revenue accruals such
as franchise tax and grants and other similar intergovernmental revenues since they are usually both
measurable and available. Nonexchange transactions collectible but not available are deferred in the fund
financial statements in accordance with modified accrual, but not deferred in the government -wide
financial statements in accordance with the accrual basis. Interest and investment earnings are recorded
when earned only if paid within 60 days since they would be considered both measurable and available.
Proprietary fund material receivables consist of all revenues earned at year end and not yet received.
Utility accounts receivable and interest earnings compose the majority of proprietary fund receivables.
Allowances for uncollectible accounts receivable are based upon historical trends and the periodic aging of
accounts receivable.
Interfund Receivables and Payables
During the course of operations, numerous transactions occur between individual funds that may result in
amounts owed between funds. Those related to goods and services type transactions are classified as "due
to and from other funds." Short-term interfund loans are reported as "interfund receivables and payables."
Long-term interfund loans (noncurrent portion) are reported as "advances from and to other funds."
Interfund receivables and payables between funds within governmental activities are eliminated in the
Statement of Net Assets. See Note 3 for details of interfund transactions, including receivables and
payables at year end.
(Continued)
-51-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2003
Note 1 - Summary of Significant Accounting Policies:
Inventories
Inventories are stated at cost on a first -in, first -out basis.
Fixed Assets
The accounting treatment over property, plant, and equipment (fixed assets) depends on whether the assets
are used in governmental fund operations or proprietary fund operations and whether they are reported in
the government -wide or fund financial statements.
Government -wide Statement
In the government -wide financial statements, fixed assets are accounted for as capital assets. All fixed
assets are valued at historical cost, or estimated historical cost if actual is unavailable, except for donated
fixed assets which are recorded at their estimated fair value at the date of donation. Estimated historical
cost was used to value the majority of the assets acquired prior to June 30, 2003.
Assets capitalized have an original cost of $500 or more prior to July I, 1999, and $2,500 or more after
July 1, 1999. Prior to July 1, 2002, governmental funds' infrastructure assets were not capitalized. These
assets have been valued at estimated historical cost.
Depreciation of all exhaustible fixed assets used by propriety funds is charged as an expense against their
operations. Accumulated depreciation is reported on proprietary fund balance sheets. Depreciation has
been provided over the estimated useful lives using the straight-line method. The estimated useful lives
are as follows:
Land improvements
10-20 Years
Buildings
30-60 Years
Building improvements
3- 7 Years
Infrastructure
15-20 Years
Equipment
5-25 Years
Furnishings and fixtures
3-10 Years
Vehicles
3- 9 Years
Fund Financial Statements
In the fund financial statements, fixed assets used in governmental fund operations are accounted for as
capital outlay expenditures of the governmental fund upon acquisition. Fixed assets used in proprietary
fund operations are accounted for the same as in the government -wide statements.
Restricted Assets
Certain proceeds of enterprise fund revenue bonds, as well as certain resources set aside for their
repayment, are classified as restricted assets on the balance sheet because their use is limited to applicable
bond covenants.
Compensated Absences
Accumulated unpaid vacation, sick pay, and other employee benefit amounts are recorded as long-term
debt in the government -wide statements. The current portion of accrued compensated absences is
estimated based on historical trends. In the fund financial statements, governmental funds report only the
compensated absence liability payable from expendable available financial resources, while the proprietary
funds report the liability as it is incurred.
(Continued)
-52-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2003
Note 1 - Summary of Significant Accounting Policies:
Accumulations for vacation pay are restricted to a maximum of 50 days and provide vesting rights upon
completion of six months service. Accumulations for sick pay are restricted to a maximum of 150 days
and provide payment to employees or beneficiaries for accumulations in excess of 50 days and up to 120
days upon death or retirement from City service.
Long -Term Debt
The accounting treatment of long-term debt depends on whether the assets are used in governmental fund
operations or proprietary fund operations and whether they are reported in the government -wide or fund
financial statements.
All long-term debt to be repaid from governmental and business -type resources are reported as liabilities in
the government -wide statements. The long-term debt consists primarily of bonds payable and accrued
compensated absences.
Long-term debt for governmental funds is not reported as liabilities in the fund financial statements. The
debt proceeds are reported as other financing sources and payment of principal and interest as
expenditures. The accounting for proprietary funds is the same in the fund statements as it is in the
government -wide statements.
Equity Classifications
Government -wide Statements
Equity is classified as net assets and displayed in three components:
a. Invested in capital assets, net of related debt — Consists of capital assets including restricted capital
assets, net of accumulated depreciation and reduced by the outstanding balances of any bonds,
mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or
improvement of those assets.
b. Restricted net assets — Consists of net assets with constraints placed on the use either by (1) external
groups such as creditors, grantors, contributors, or laws or regulations of other governments; or (2)
law through constitutional provisions or enabling legislation.
c. Unrestricted net assets — All other net assets that do not meet the definition of "restricted" or
"invested in capital assets, net of related debt."
Fund Statements
Governmental fund equity is classified as fund balance. Fund balance is further classified as reserved and
unreserved. Proprietary fund equity is classified the same as in the government -wide statements.
Revenues, Expenditures, and Expenses
Interfund Transactions
Quasi -external transactions are accounted for as revenues, expenditures or expenses. Transactions that
constitute reimbursements to a fund for expenditures/expenses initially made from it that are properly
applicable to another fund, are recorded as expenditures/expenses in the reimbursing fund and as
reductions of expenditures/expenses in the fund that is reimbursed.
(Continued)
-53-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2003
Note 1 - Summary of Significant Accounting Policies:
All other interfund transactions, except quasi -external transactions and reimbursements, are reported as
transfers. Nonrecurring or nonroutine permanent transfers of equity are reported as residual equity
transfers. All other interfund transfers are reported as operating transfers.
General Fund Revenues
The City bills and collects its own property taxes. The City elects to use the annual property assessment
prepared by McCracken County as its base to apply the property tax rate. According to Kentucky Revised
- Statutes, the assessment date for the City must conform to the assessment date of McCracken County, and
the annual increase in the property tax levy cannot exceed 4%. City property tax revenues are recorded as
a receivable when assessed because the City has an enforceable legal claim to the resources. At this time,
the receivable is offset by deferred revenue. Property tax revenues are recognized during the period for
which they are levied.
The due dates and collection period for all property taxes, exclusive of vehicle taxes, for the fiscal year
ended June 30, 2003, are as follows:
Description Date
Assessment and enforceable lien January 1, 2002
Levy October 8, 2002
Face value amount payment dates I" half by November 1, 2002
2nd half by February 1, 2003
Delinquent date - 10% penalty
plus 1/2% per month 15` half - November 30, 2002
2"d half - February 28, 2003
Operating Revenues and Expenses
Operating revenues and expenses for proprietary funds are those that result from providing services and
producing and delivering goods and/or services. It also includes all revenue and expenses not related to
capital and related financing, noncapital financing, or investing activities.
Expenditures/Expenses
In the government -wide financial statements, expenses are classified by function for both governmental
and business -type activities.
In the fund financial statements, expenditures are classified as follows:
Governmental Funds - by character: Current (further classified by function)
Debt Service
Capital Outlay
Proprietary Fund - by operating and nonoperating
In the fund financial statements, governmental funds report expenditures of financial resources.
Proprietary funds report expenses relating to use of economic resources.
Interfund Transfers
Permanent reallocation of resources between funds of the reporting entity are classified as interfund
transfers. For the purposes of the Statement of Activities, all interfund transfers between individual
governmental funds have been eliminated.
(Continued)
-54-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2003
Note 1 - Summary of Significant Accounting Policies:
Statement of Cash Flows
In September, 1989, the Governmental Accounting Standards Board issued Statement No. 9, Reporting
Cash Flows of Proprietary and Nonexpendable Trust Funds and Governmental Entities That Use
Proprietary Fund Accounting. The City adopted the provisions of the Statement in its 1991 financial
statements. For purposes of the statement of cash flows, the City considers all highly liquid investments
with a maturity of three months or less when purchased to be cash equivalents.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles
requires management to make assumptions that affect reported amounts and disclosures. Accordingly,
actual results could differ from those estimates.
Note 2 - Stewardship, Compliance, and Accountability:
By its nature as a local government unit, the City and its component units are subject to various federal,
state, and local laws and contractual regulations. An analysis of the City's compliance with significant
laws and regulations and demonstration of its stewardship over City resources follows.
Fund Accounting Requirements
The City complies with all state and local laws and regulations requiring the use of separate funds.
Deposits and Investments Laws and Regulations
In accordance with state law, all uninsured deposits of municipal funds in financial institutions must be
secured with acceptable collateral valued at the lower of market or par. Acceptable collateral includes
certain U.S. Government of Government Agency securities, certain State of Kentucky or political
subdivision debt obligations, or surety bonds.
Investments of the City are limited to the following:
a. Direct obligations of the U.S. Government or its agencies or instrumentalities to which the full faith
and credit of the U.S. Government is pledged.
b. Certificates of deposit or savings accounts that are either insured or secured with acceptable
collateral.
Revenue Restrictions
The City has various restrictions placed over certain revenue sources from state or local requirements. The
primary restricted revenue sources include.
Revenue Source
Kentucky Police Incentive Grant
Kentucky Fire Incentive Grant
HOME Investment Partnerships Grant
Emergency Communication Revenue
County Bed Tax
Public Safety and Community
Policing Grant
Kentucky Transportation Cabinet
Kentucky Housing Corporation
Other Grants
-55-
Legal Restrictions of Use
Salaries
Salaries
Construction of Low-income
Rental Units
E-911 Emergency Services
Debt Obligations
Police Mobile Data
Terminal System
Street Repairs and Maintenance
Facade Loans
Grant Program Expenditures
(Continued) _.
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2003
Note 2 - Stewardship, Compliance, and Accountability:
For the year ended June 30, 2003, the City complied, in all material respects, with these revenue
restrictions.
Debt Restrictions and Covenants
General Obligation Debt
The City has general obligation bonds outstanding at June 30, 2003, in the amount of $8,850,000. In
addition to the bonds, the City has a capital lease for fire equipment through the Kentucky Municipal
Finance Corporation. Additional long-term debt disclosures are present in Note 3.
Other Long -Term Debt
The City may not incur any indebtedness that would require payment from resources beyond the current
fiscal year revenue without first obtaining voter approval. For the year ended June 30, 2003, the City
incurred no such indebtedness.
Note 3 — Detail Notes on Transaction Classes/Accounts:
The following notes present detail information to support the amounts reported in the basic financial
statements for its various assets, liabilities, equity, revenues, and expenditures/expenses.
Deposits - Primary Government
At year end, the carrying amount of the City's demand deposits was $8,453,265 and the bank balance was
$8,672,357. These balances include $261,260 of trust and agency fund cash not included in the
government -wide statements. The balances below also include bank certificates of deposit of $8,078,548,
including $800,000 of agency fund certificates of deposit not included in the government -wide statements
and $7,078,548 of certificates of deposit classified as investments in the financial statements. The bank
balance is categorized as follows:
- Amount secured by the FDIC, or collateralized
with securities held by the City in its name $ 400,000
Amount collateralized with securities held by the
pledging institution's agent in the City's name 15,850,905
Amount collateralized with securities held by the
pledging financial institution 500,000
TOTAL BANK BALANCE $16,750,905
Investments
Kentucky Revised Statutes (KRS 66.480) authorize the City to invest in:
1. Obligations of the U.S. Treasury, agencies, and instrumentalities. Such investments may be
accomplished through repurchase agreements reached with national or state banks chartered in
Kentucky;
2. Bonds or certificates of indebtedness of the state of Kentucky and of its agencies and
instrumentalities;
3. Savings and loan associations insured by the U.S. government;
4. Interest-bearing deposits in national or state banks chartered in Kentucky and insured by an agency
of the U.S. government;
(Continued)
-56-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2003
Note 3 - Detail Notes on Transaction Classes/Accounts:
5. Deposit accounts with banking institutions;
6. State treasurer investment pool.
The Police and Firemen's Retirement Fund is also authorized to invest in real estate mortgage notes, bonds
and other interest bearing or dividend paying securities.
Investments made by the City, including repurchase agreements, are summarized below. The investments
that are represented by specific identifiable investment securities are classified as to credit risk by the three
categories described below:
Category 1 - Insured or registered, with securities held by the City or its agent in the City's
name.
Category 2 - Uninsured and unregistered, with securities held by the counterparty's trust
department or agent in the City's name.
Category 3 - Uninsured and unregistered, with securities held by the counterpart, or by its
trust department or agent, but not in the City's name.
Investments of the primary government are classified as follows:
U.S. government securities
Mortgage backed securities
Corporate bonds and notes
Investment in mutual funds
TOTAL INVESTMENTS (excluding $8,078,548
of bank CD's)
Category Carrying Fair
1 2 3 Amount Value
$2,871,868 $ - $ - $2,871,868 $2,871,868
53,866 - - 53,866 53,866
1.284.546 - - 1.284.546 1.284.546
4.210.280 S- $- 4,210,280 4,210,280
4,559,347 4,559,347
i9j69 627 $8.769,627
The above amounts include $8,469,627 of fiduciary fund investments not included in the government -wide
financial statements.
Investments of the discretely presented component units are classified as follows:
U.S. government securities
Corporate bonds and notes
Corporate equity stocks
Category
1 2 3
$ 539,275 $ - $ -
594,801 - -
1,314,720
2 448 796
Investment in mutual funds and money markets
TOTAL INVESTMENTS (excluding $2,962,489
of bank CD's and savings accounts), including
$5,660,235 classified as restricted on
combined balance sheet
-57-
Carrying
Amount
$ 539,275
594,801
1,314,720
2,448,796
6,594,064
Fair
Value
$ 539,275
594,801
1,314,720
2,448,796
6,594,064
$9,042,860
9 042 860
(Continued)
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2003
Note 3 - Detail Notes on Transaction Classes/Accounts:
The above amounts include $2,178,908 of fiduciary fund investments not included in the government -wide
financial statements.
The following methods and assumptions were used by the entities in estimating fair values for financial
instruments:
Certificates of Deposit - The carrying amounts reported for certificates of deposit approximate their
fair value.
Investment Securities (including
Mortgage -Backed
Securities) -
Fair values
for investment
securities are based on quoted market
prices.
Capital Assets
Capital asset activity for the year ended June 30, 2003, was as follows:
Balance
Balance
Governmental Activities:
July 1, 2002
Additions
Disposals
June 30, 2003
Land
$ 5,083,637
$ 698
$ -
$ 5,084,335
Land improvements
950,000
-
-
950,000
Construction -in -progress
2,070,096
918,095
-
2,988,191
Buildings and improvements
13,119,697
-
-
13,119,697
Infrastructure
21,414,552
346,183
-
21,760,735
Equipment
5,494,947
763,023
449,966
5,808,004
Furnishings and fixtures
238,585
-
1,300
237,285
Vehicles
6,159,197
506,337
156,982
6,508,552
Totals at historical cost
54,530,711
2,534,336
608,248
56,456,799
Less accumulated depreciation:
Land improvements
950,000
-
-
950,000
Buildings and improvements
9,820,375
202,340
-
10,022,715
Infrastructure
6,121,404
1,396,627
-
7,518,031
Equipment
5,003,716
220,226
448,926
4,775,016
Furnishings and fixtures
225,784
7,114
1,300
231,598
Vehicles
4,491,988
510,010
78,223
4,923,775
Total accumulated depreciation
26,613,267
2,336,317
528,449
28,421,135
GOVERNMENTAL ACTIVITIES
CAPITAL ASSETS, NET
27.917.444
$ 198,01979
799
28,035.664
Business -type Activities:
Land
$ 65,908
$ -
$ -
$ 65,908
Buildings and improvements
324,882
-
-
324,882
Equipment
2,165,175
12,778
181,818
1,996,135
Vehicles
1,628,240
277,258
-
1,905,498
Totals at historical cost
4.184,205
290,036
181,818
4,292,423
Less accumulated depreciation:
Buildings and improvements
131,413
9,614
-
141,027
Equipment
1,645,925
155,670
181,818
1,619,777
Vehicles
895,889
209,977
-
1,105,866
Total accumulated depreciation
2,673,227
375,261
181,818
2,866,670
BUSINESS -TYPE ACTIVITIES
CAPITAL ASSETS, NET
1,510 978
&IA25 753
(Continued)
-58-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2003
Note 3 - Detail Notes on Transaction Classes/Accounts:
Depreciation expense was charged to governmental activities as follows:
General government:
General administration
Finance
Planning
Human rights
Personnel
Inspection
Information systems
Fleet maintenance
Total general government
Public safety:
Police
Fire
Grants
Emergency 911
Court awards
Fleet Lease Trust
Total public safety
Public service:
Public works
Engineering
Total public service
Parks and recreation
Planning and development:
Infrastructure
Grants
Total planning and development
TOTAL DEPRECIATION EXPENSE —
GOVERNMENTAL ACTIVITIES
Depreciation expense was charged to business -type activities as follows:
Solid waste fund
Civic Center
TISA Fund
TOTAL DEPRECIATION EXPENSE —
BUSINESS -TYPE ACTIVITIES
-59-
$ 82,939
1,917
7,699
862
68
3,501
18,127
12.585
127,698
57,801
163,233
37,725
30,724
23,465
347.315
660,263
81,246
8,185
89,431
53,029
1,396,627
9,269
1,405,896
$ 314,692
8,318
52,251
375 261
(Continued)
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2003
Note 3 - Detail Notes on Transaction Classes/Accounts:
$1,205,382
Paducah Power System
2,182,549
Paducah Junior College
Balance
Nonmajor component units
344,518
Balance
Discretely Presented
July 1, 2002
Additions
Disposals
June 30, 2003
Component Units:
Land
$ 1,419,331
$ -
$ -
$ 1,419,331
Construction -in -progress
456,115
341,648
-
797,763
Buildings and improvements
17,718,204
-
-
17,718,204
Equipment
1,258,756
96,917
-
1,355,673
Utility plant
105,644,401
3,545,763
779,360
108,410,804
Nonmajor component units
4,568,669
1,328,204
26,350
5,870,523
Totals at historical cost
131,065,476
5,312,532
805,710
135,572,298
Less accumulated depreciation:
Buildings and improvements
2,036,929
467,320
-
2,504,249
Equipment
133,128
118,404
-
251,532
Utility plant
40,528,280
3,387,931
907,386
43,008,825
Nonmajor component units
2,063,338
344,518
26,350
2,381,506
Total accumulated depreciation
44,761,675
4,318,173
933,736
48,146,112
COMPONENT UNIT
CAPITAL ASSETS, NET86.303.801_ x__994,359 128 026) _$j7,42_6,1.86
Depreciation expense, charged to functions/programs of discretely presented major component units as
follows:
Paducah Water Works
$1,205,382
Paducah Power System
2,182,549
Paducah Junior College
585,724
Nonmajor component units
344,518
TOTAL DEPRECIATION EXPENSE BY ACTIVITY _S 4 318 173
Accounts Payable
Payables in the governmental and proprietary funds are composed of payables to vendors and accrued
salaries and benefits.
Long -Term Debt
The City's long-term debt is segregated between the amounts to be repaid from governmental activities
and amounts to be repaid from business -type activities.
Governmental Activities
As of June 30, 2003, the governmental long-term debt consisted of the following:
General obligation bonds:
Current portion $ 230,000
Noncurrent portion 8,620,000
TOTAL GENERAL OBLIGATION
BOND COSTS &9-85-0 000
(Continued)
-60-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2003
Note 3 - Detail Notes on Transaction Classes/Accounts:
Capital lease:
Current portion $ 79,825
Noncurrent portion -
TOTAL CAPITAL LEASE PAYMENTS 79,825
Accrued compensated absences:
Current portion $ 333,029
Noncurrent portion 1,359,680
TOTAL ACCRUED COMPENSATED
ABSENCES iLAK2,709
Business -type Activities
As of June 30, 2003, the long-term debt payable from proprietary fund resources consisted of the
following:
Accrued compensated absences:
Current portion $ 46,162
Noncurrent portion 18,671
TOTAL ACCRUED COMPENSATED
ABSENCES 64 833
Changes in Long -Term Debt
The following is a summary of changes in long-term debt for the year ended June 30, 2003:
(Continued)
-61-
Amounts
Beginning
Ending
Due within
Type of Debt:
Balance
Additions Reductions
Balance
One Year
Governmental activities:
General obligation bonds:
Convention and Arts Center$ 9,075,000
$ - $225,000
$ 8,850,000
$230,000
Capital lease
234,054
- 154,229
79,825
79,825
General fund accrued
compensated absences
1,646,236
46,473 -
1,692,709
333,029
TOTAL GENERAL LONG-
TERM DEBT
10.955.290
46 473
110,622.534
S642,854
Business -type activities:
Accrued compensated
absences
59 696
5 137 $ _
S-64 ,833
$ 46,162
(Continued)
-61-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2003
Note 3 - Detail Notes on Transaction Classes/Accounts:
Annual Debt Service Requirements
General Obligation Bonds
The City of Paducah issued general obligation bonds of $9,290,000 in June, 2001, to finance construction
of the new Luther F. Carson Four Rivers Center for the Performing Arts and the expansion of the Julian
Carroll Convention Center. Interest rates range from 3.5% to 5%. These bonds are required to be fully
paid within 25 years from the date of issue and are backed by the full faith and credit of the City. While
these bonds are issued by the City, 50% of the principal amount of the bonds was issued on behalf of the
County of McCracken, Kentucky which intends to participate on an equal basis with the City in financing
the projects and has issued the City a general obligation note in a principal amount equal to 50% of the
principal amount of the bonds and bearing interest at the same rates as the City's bonds in order to secure
the County's obligations to the City. This note receivable is reflected in the government -wide Statement
of Net Assets. In accordance with an Interlocal Cooperation Compact between the City, McCracken
County, Kentucky (the County), and the Paducah -McCracken County Tourist and Convention
Commission (the Bureau), principal and interest payments on the bonds are being made from an additional
2% transient room tax collected by the County with the remaining payments split evenly between the City,
the County, and the Bureau.
The annual debt service requirements to maturity, including principal and interest, for general long-term
debt as of June 30, 2003, are as follows:
TOTALS 8,850,000 5 958 105
Capital Lease
On December 20, 1993, the City agreed to lease new fire equipment through the Kentucky Municipal
Finance Corporation. All the equipment was acquired prior to June 30, 1996, at a total cost of $1,674,251.
The City paid $400,000 of the purchase price, with the remaining $1,274,251 financed with the lease. The
lease is classified as a capital lease. Assets under capital leases totaled $1,274,251 at June 30, 2003.
The following schedule calculates the net present value of the final minimum lease payment to be made in
2004 under this capital lease:
Minimum lease payment for
capital lease at June 30, 2003
General Obligation
Year Ending
Bonds
June 30
Principal Interest
2004
$ 230,000 $ 412,150
2005
240,000 404,100
2006
250,000 394,500
2007
260,000 384,500
2008
270,000 374,100
2009-2013
1,525,000 1,691,135
2014-2018
1,910,000 1,310,508
2019-2023
2,410,000 808,612
2024-2026
1,755,000 178,500
TOTALS 8,850,000 5 958 105
Capital Lease
On December 20, 1993, the City agreed to lease new fire equipment through the Kentucky Municipal
Finance Corporation. All the equipment was acquired prior to June 30, 1996, at a total cost of $1,674,251.
The City paid $400,000 of the purchase price, with the remaining $1,274,251 financed with the lease. The
lease is classified as a capital lease. Assets under capital leases totaled $1,274,251 at June 30, 2003.
The following schedule calculates the net present value of the final minimum lease payment to be made in
2004 under this capital lease:
Minimum lease payment for
capital lease at June 30, 2003
$81,216
Less: amount representing interest
at the City's incremental borrowing
rate of interest
1,391
PRESENT VALUE OF MINIMUM
LEASE PAYMENT
X79,825
(Continued)
-62-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2003
Note 3 - Detail Notes on Transaction Classes/Accounts:
Accrued Compensated Absences
Compensated absence obligations arise from amounts due to City employees for vested amounts of
vacation pay and sick pay which will be payable in the future. Amounts accrued at June 30, 2003, are as
follows:
Governmental Business -type
Interfund Transactions and Balances
Interfund transfers during the year ended June 30, 2003, were as follows:
Activities
Activities
Accrued sick leave
$ 729,371
$18,435
Accrued vacation leave
843,048
41,791
Applicable payroll taxes
120,290
4,607
Total
1,692,709
64,833
Less current portion
333,029
46,162
LONG-TERM PORTION
&IJ5_9 680
18 671
Interfund Transactions and Balances
Interfund transfers during the year ended June 30, 2003, were as follows:
Transfers are used to (a) move revenues from the fund that statute or budget requires to collect them to the
fund that statute or budget requires to expend them and to (b) use unrestricted revenues collected in the
general fund to finance various programs accounted for in other funds in accordance with budgetary
authorizations.
Due To/From Balances
Due to/from balances used to cover current operating expenses were as follows as of June 30, 2003:
Due From Due To
General Fund $436,574 $ -
Capital Project Fund - 2,586
Downtown Capital Project Fund - 189,173
Nonmajor Governmental Funds - 67,394
Internal Service Funds - 177,420
Fiduciary Funds - 1
TOTALS $436,574 436 574
(Continued)
-63-
Interfund
Interfund
Governmental Funds:
Transfers In
Transfers Out
General Fund
$ 281,209
$2,678,758
Capital Project Fund
361,407
74,991
Downtown Capital Project Fund
282,119
-
Nonmajor Governmental Funds
1,149,724
413,937
Internal Service Funds
619,583
-
Fiduciary Funds:
Appointive Employee Pension Fund
75,000
-
Police and Firemen's Pension Fund
430,995
-
Rinkleff Estate Trust Fund
-
13,685
Proprietary Funds:
Solid Waste Fund
-
28,666
Nonmajor Proprietary Funds
10,000
-
TOTALS
3 210 037
3 210 037
Transfers are used to (a) move revenues from the fund that statute or budget requires to collect them to the
fund that statute or budget requires to expend them and to (b) use unrestricted revenues collected in the
general fund to finance various programs accounted for in other funds in accordance with budgetary
authorizations.
Due To/From Balances
Due to/from balances used to cover current operating expenses were as follows as of June 30, 2003:
Due From Due To
General Fund $436,574 $ -
Capital Project Fund - 2,586
Downtown Capital Project Fund - 189,173
Nonmajor Governmental Funds - 67,394
Internal Service Funds - 177,420
Fiduciary Funds - 1
TOTALS $436,574 436 574
(Continued)
-63-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2003
Note 4 - Pension Plans - City of Paducah:
The City provides retirement benefits to its employees through three pension funds. Two of these funds
_ are single -employer defined benefit funds and are administered by the City. These funds are Police and
Firefighters' Pension Fund (PFPF) and Appointive Employee' Pension Fund (AEPF). The other pension is
a multi-employer public employee retirement fund administered by the Kentucky County Employees
Retirement System (CERS). The City also participates in two deferred compensation plans. Information
regarding these plans follows:
Single Employer Defined Benefit Funds
Basis of Accounting - The financial statements are prepared using the accrual basis of accounting.
Plan member and employer contributions are recognized in the period in which the contributions are
due. Benefits and refunds are recognized when due and payable in accordance with the terms of each
plan.
Funding - The Appointive Employee's Pension Fund Board and the City of Paducah Police and
Firefighter's Pension Fund Board are responsible for establishing or amending contribution rates and
requirements for their respective plans.
Valuation of Investments - Investments are reported at fair value. Investments are composed of
securities valued at current market prices.
Police and Firefighters' Pension Fund
Plan Description: PFPF is a single -employer defined benefit plan. On August 1, 1988, the plan was
closed to new entrants and current active duty police and firemen of the City were given a choice of
remaining in this plan or transferring into the CERS. Effective August 1, 1988, the PFPF covered 21
active duty members; all other active duty members elected coverage under CERS. PFPF provides
retirement, disability and death benefits to plan members and their beneficiaries. These benefits are
determined by Kentucky Revised Statutes (KRS) sections 95.851 to 95.884. The plan financial
statements are included in this audit report.
Contributions: Plan members are required to contribute 8% of their annual covered salary. A member
reserve is established for member contributions, less amounts transferred to reserves for retirement and
disability and amounts refunded to terminated employees.
Components of annual pension cost for PFPF are as follows:
(Continued)
-64-
Year Ended
Year Ended
Year Ended
Component
June 30, 2003
June 30, 2002
June 30, 2001
Beginning NPO balance
$ -
$ -
$ -
ARC
645,773
806,632
865,026
Pension cost
645,773
806,632
865,026
Less actual contribution
645,773
806,632
865,026
Net change in NPO
-
-
-
ENDING NPO BALANCE
$ -
$ -
PERCENTAGE OF PENSION
COST CONTRIBUTED
100%
100%
100%
(Continued)
-64-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2003
Note 4 - Pension Plans - City of Paducah:
Appointive Employees' Pension Fund
Plan Description: AEPF is a single -employer defined benefit plan which covers past appointed
employees of the City. In 1975, the City froze admission of new entrants into the plan. There are no
active participants in the plan at June 30, 2003. The plan financial statements are included in this audit
report.
Contributions: Since there are only retired employees and beneficiaries receiving benefits, the City
expects little or no additional pension obligation. The City has pledged to maintain benefits and the
financial soundness of the plan by appropriations from the General Fund, as necessary.
Components of annual pension cost for AEPF are as follows:
Component
Beginning NPO balance
ARC
Interest on NPO
Unfunded ARC adjustment
Pension cost
Less actual contribution
Net change in NPO
ENDING NPO BALANCE
PERCENTAGE OF PENSION
COST CONTRIBUTED
Contribution Information
Year Ended
Year Ended
Year Ended
June 30, 2003
June 30, 2002
June 30, 2001
$(186 170)
$(182,940)
$(182 405)
50,112
59,297
62,029
(11,170)
(10,976)
(10,944)
23,863
23,449
23,380
62,805
71,770
74,465
75,000
75,000
75,000
(12,195)
(3,230)
535)
198 365)
186 170)
S(182,940)
120%
105%
101%
A summary of actuarial assumptions at June 30, 2003, the date of the latest actuarial valuation is as
follows:
Valuation date
Actuarial cost method
Amortization method
Remaining amortization period
Asset valuation method
Actuarial assumptions:
PFPF
7/1/03
Entry age normal
Level dollar closed
29 Years
Market value
AEPF
7/1/03
Aggregate (1)
Level dollar closed
10 Years
Market value
Investment rate of return
7.75% 6.0%
Projected salary increases
4.0% (2)
Inflation rates adjustments
2.0% (2)
(1) The Aggregate Method does not identify
or separately amortize the unfunded actuarial
liabilities.
(2) The plan has no active participants. The pension cost for each year is determined as an
amortization of the unfunded actuarial accrued liability over the lesser of 10 years or the
weighted average of expected term of payment of plan benefits.
(Continued)
-65-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2003
Note 4 - Pension Plans - City of Paducah:
Employer contributions were as follows:
Membership Information
Membership of each plan consisted of the following at June 30, 2003:
PFPF AEPF
Active participants
PFPF
Beneficiaries
AEPF
Retired participants
Year
Annual Required
Percent
Annual Required
Percent
Ended
Contribution
ARC
Contribution
ARC
June 30
(ARC)
Contributed
(ARC)
Contributed
2001
$ 865,026
100%
$ 62,029
121%
2002
806,632
100
59,297
126
2003
645,773
100
50,112
150
Membership Information
Membership of each plan consisted of the following at June 30, 2003:
PFPF AEPF
Active participants
7 -
Beneficiaries
43 9
Retired participants
56 6
TOTAL PARTICIPANTS
106 15
Cost -Sharing Multiple -Employer Defined Benefit Plan
County Employees' Retirement System
Plan Description: The City is a participant in the County Employees Retirement System (CERS), a
cost sharing, multi-employer public employee retirement system. CERS provides retirement, disability,
and death benefits to plan members. Retirement benefits may be extended to beneficiaries of plan
members under certain circumstances. Cost -of -living adjustments are provided at the discretion of the
State legislature. Kentucky Retirement Systems issues a publicly available financial report that
includes financial statements and required supplementary information for CERS. That report may be
obtained by writing to Kentucky Retirement Systems, Perimeter Park West, 1260 Louisville Road,
Frankfort, Kentucky 40601-6124 or by calling 1-502-564-4646.
Funding Policy: Hazardous position employees are required to contribute 8% to the plan and
nonhazardous position employees are required to contribute 5% of their creditable compensation by
State statute. The City is required by the same statute to contribute the remaining amounts necessary to
pay benefits when due. For the years ended June 30, 2003, 2002 and 2001, the City contributed 6.34%,
6.41%, and 7.17%, respectively, of each nonhazardous employee's creditable compensation and
16.28%, 16.28%, and 16.78%, respectively, of each hazardous employee's creditable compensation.
These actuarially determined rates are set by the Board of Trustees of Kentucky Retirement Systems.
The City's contributions to CERS for the years ending June 30, 2003, 2002 and 2001, were $2,104,841,
$2,092,620, and $2,101,513, respectively, equal to the required contributions for each year.
Note 5 — Fund Equity and Budget Deficits:
The following fund had a deficit in net assets at June 30, 2003:
Health Insurance Fund
Deficit
Amount
$559,509
No departments that adopted budgets annually had excess expenditures over appropriations for the fiscal
year ended June 30, 2003.
(Continued)
-66-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2003
Note 6 - Component Unit Long -Term Debt:
Long-term debt of the discretely presented component units consists of the following at June 30, 2003:
Refunding Revenue Bonds of 1991 - Paducah Water Works
The City of Paducah, Kentucky Refunding Bonds, Series of 1991, in the amount of $10,775,000 were
issued for the purpose of defeasing certain bonds of the Revenue Refunding Bonds, Series of 1985. During
the year ended June 30, 1998, Paducah Water Works refunded a portion ($6,075,000) of the 1991 bond
issue by issuing $6,780,000 of 1997 revenue refunding bonds, Series 1997. At June 30, 2003, the total
bonds that are considered extinguished under an in -substance defeasance (refund) is $13,140,000. The
bonds are secured by a first pledge of the revenues of Paducah Water Works. City bond ordinances
require that net revenues, as defined in the ordinances, equal or exceed 130% of the maximum annual debt
service. Payment of bonds and related interest is fully guaranteed by the Municipal Investors Assurance
Corporation.
The following schedule summarizes the debt service requirements for the Refunding Revenue Bonds,
Series of 1991:
Fiscal Year
2004
2005
2006
2007
2008
2009-2013
Less deferred debit arising
from advanced refunding
TOTALS
Principal
$ 835,000
870,000
905,000
950,000
990,000
1,030,000
Interest
$ 246,321
209,790
171,510
131,690
89,890
45,835
Total
Debt
Service
$1,081,321
1,079,790
1,076,510
1,081,690
1,079,890
1,075,835
(355,263) - (355,263)
5 224 737 895,036 6 119 773
Note Payable, Kentucky Infrastructure Authority (KIA) - Paducah Water Works
In connection with a merger with Reidland Water District, Paducah Water Works assumed a loan from the
KIA. Interest rates range from 2.5% to 4.25%, with a .2% annual service fee. The annual requirements to
amortize the outstanding debt as of June 30, 2003, are as follows:
Year Ending
June 30
2004
2005
2006
2007
2008
2009-2018
TOTALS
-67-
Principal Interest Fee (0.2%) Total
$ 28,298
$ 12,885
$ 665
$ 41,848
29,182
12,106
608
41,896
30,066
11,231
550
41,847
30,950
10,329
489
41,768
31,835
9,246
428
41,509
182,174
24,073
1,122
207,369
$332,505
79,
$3,862
S4162-37
(Continued)
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2003
Note 6 — Component Unit Long -Term Debt:
Paducah Electric Plant Board 1991 Bond Issue
In 1991, bonds amounting to $4,725,000 were issued to make improvements to the Paducah Power sub-
station and renovation of the building that houses the System's offices, warehouse and storage. All assets
of the System are pledged as collateral to the bond issue. Interest rates range from 6.25% to 6.30%.
On November 1, 1998, the Utility issued $3.35 million in special revenue refunding bonds with interest
rates between 3.75% and 4.20%. The Utility issued the bonds to advance refund $3.06 million of the
outstanding Series 1991 general obligation bonds with a 6.30% interest rate and were secured by all assets
of the Utility. The Utility used the net proceeds along with other resources to purchase the U. S.
Government Securities. These securities were deposited in an irrevocable trust to provide for all future
debt service on the refunded portion of the 1991 Series bonds maturing on or after January 1, 2002. As a
result, that portion of the 1991 Series bonds is considered defeased and the Utility has removed the liability
from its books.
On November 9, 2001, the System issued $3.32 million in special revenue refunding bonds with interest
rates between 3.00% and 4.25% and is secured by a first pledge of the net revenues of the System. The
System issued the bonds to finance construction of a fiber optic network in the community.
The following schedule summarizes the remaining debt service requirements:
Bonds payable totaling $5,763,508 are recorded net of $271,492 unamortized bond discount and advance
refunding deferred charges.
Note 7 - Commitments and Contingencies:
Construction Commitment
The City has an on-going contract for paving materials, equipment, and labor. As of June 30, 2003, the
balance of the contract commitment was $463,436.
Escrow Account Securing Note Payable
The City has established a $300,000 escrow account which is included in General Fund investments to
secure a note payable for the Greater Paducah Economic Development Council (GPEDC) for the
construction of a speculation building that is to be built in the McCracken County Information Age Park.
The City also signed a loan guarantee agreement in the amount of $221,876 related to another GPEDC
note payable, but does not anticipate any required payment.
(Continued)
-68-
Total
Debt
Fiscal Year
Principal
Interest
Service
2004
$ 330,000
$ 245,908
$ 575,908
2005
345,000
233,058
578,058
2006
355,000
219,607
574,607
2007
370,000
205,758
575,758
2008
385,000
191,117
576,117
2009-2013
2,170,000
707,428
2,877,428
2014-2018
2,080,000
224,515
2,304,515
TOTALS
6 035 000
2 027 391
8,062.391
Bonds payable totaling $5,763,508 are recorded net of $271,492 unamortized bond discount and advance
refunding deferred charges.
Note 7 - Commitments and Contingencies:
Construction Commitment
The City has an on-going contract for paving materials, equipment, and labor. As of June 30, 2003, the
balance of the contract commitment was $463,436.
Escrow Account Securing Note Payable
The City has established a $300,000 escrow account which is included in General Fund investments to
secure a note payable for the Greater Paducah Economic Development Council (GPEDC) for the
construction of a speculation building that is to be built in the McCracken County Information Age Park.
The City also signed a loan guarantee agreement in the amount of $221,876 related to another GPEDC
note payable, but does not anticipate any required payment.
(Continued)
-68-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2003
Note 7 - Commitments and Contingencies:
Grant Contingencies
Amounts received from grantor agencies are subject to audit and adjustment by grantor agencies,
principally the federal government. Any disallowed claims, including amounts already collected, may
constitute a liability of the applicable funds. The amount, if any, of expenditures which may be disallowed
by the grantor cannot be determined at this time although the government expects such amounts, if any, to
be immaterial.
Note 8 - Risk Management and Litigation:
The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets;
errors and omissions; injuries to employees; and natural disasters. The City obtains coverage from
commercial insurance companies to handle the risk of loss. There have been no decreases in insurance
coverage from the prior year. There have been no settlements in excess of insurance coverage during the
prior three years.
An analysis of claims activity is presented below:
Current Year
Claims and
Beginning of
Changes in
Fiscal Year
Estimates
Liability
1996- 1997
$ -
1997 - 1998
-
1998-1999
-
1999-2000
-
2000-2001
-
2001-2002
-
2002-2003
-
Current Year
Claims and
Actual Balance at
Changes in
Claim Fiscal
Estimates
Payments Year End
$ 85,326
$ 85,326 $ -
96,101
96,101 -
26,457
26,457 -
26,455
26,455 -
102,380
102,380 -
2,879
2,879 -
3,277
3,277 -
During fiscal year 1999, the City established the Health Insurance Fund (an internal service fund) to
account for and finance employee medical costs relating to the City's employee self-insured medical
benefit plan that went into effect as of July 1, 1999. The health insurance provides coverage for up to
$80,000 for each covered individual. The City purchases commercial insurance (reinsurance) for claims in
excess of the coverage provided per individual or in excess of the maximum aggregate limit of $2,000,000.
Self-insurance costs are accrued based on claims reported within 90 days of the balance sheet date as well
as an estimated liability for claims incurred but not reported. The total accrued liability for self-insurance
costs was $332,000 at June 30, 2003.
The analysis of claims activity is presented below:
Several lawsuits are pending involving citizens' complaints and the City of Paducah. Various allegations
have been made seeking damages which the legal counsel of the City, along with its management, have
determined to be immaterial to the City's financial position. In addition, the City currently has $153,650
accrued for a settlement agreement with a property owner related to property acquired for road
construction.
(Continued)
-69-
Current Year
Beginning of
Claims and
Actual
Balance at
Fiscal Year
Changes in
Claim
Fiscal
Liability
Estimates
Payments
Year End
1999-2000
$ -
$1,874,033
$1,874,033
$ -
2000-2001
-
2,636,969
2,351,969
285,000
2001 -2002
285,000
2,601,988
2,601,988
285,000
2002-2003
285,000
3,257,340
3,210,340
332,000
Several lawsuits are pending involving citizens' complaints and the City of Paducah. Various allegations
have been made seeking damages which the legal counsel of the City, along with its management, have
determined to be immaterial to the City's financial position. In addition, the City currently has $153,650
accrued for a settlement agreement with a property owner related to property acquired for road
construction.
(Continued)
-69-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2003
Note 9 - Lease Agreements:
The City leases certain property to various lessees under agreements that have various expiration dates
through June 30, 2079. Rental revenue received from leased property during 2003 totaled $240,039. The
following is a schedule of future minimum rental income from operating leases at June 30, 2003:
TOTAL MINIMUM LEASE RECEIPTS 969 476
The City is also leasing land to the Luther F. Carson Four Rivers Center for the Performing Arts (Center)
for a primary term of 99 years. No rental revenue is being collected from this lease. The rental for the
primary term of the lease is the construction of the performing arts center. After construction of the
performing arts center is completed, the Center Board and City Commission intend to place ownership of
the building in the hands of the City and to include the building in the 99 year lease to the Center. The
building will be deemed the property of the City upon termination of the lease. In December 2003, with
the authorization of the City, the Center secured financing of $6.5 million subject to a mortgage against the
leasehold and real property on which the performing arts center is located. The City also consented to an
assignment of the lease as security for the loan.
Note 10- Reclassification of Beginning Fund Balance:
A reclassification was made to the following beginning fund balance as follows:
June 30, 2002, balance as
previously reported
Section 8 Housing adjustment
JULY 1, 2002, BALANCE AS
RESTATED
Section 8
Housing
$ 255,124
(101,783)
A reclassification was made to the following beginning component unit fund balance as follows:
Edwin J.
Paxton Park
Golf Course
June 30, 2002, balance as
previously reported $ -
Balance not reported 485,870
JULY 1, 2002, BALANCE AS
RESTATED 1485 870
-70-
Lease
Income
2004
$211,952
2005
216,963
2006
141,973
2007
61,973
2008
60,623
Future years
275,992
TOTAL MINIMUM LEASE RECEIPTS 969 476
The City is also leasing land to the Luther F. Carson Four Rivers Center for the Performing Arts (Center)
for a primary term of 99 years. No rental revenue is being collected from this lease. The rental for the
primary term of the lease is the construction of the performing arts center. After construction of the
performing arts center is completed, the Center Board and City Commission intend to place ownership of
the building in the hands of the City and to include the building in the 99 year lease to the Center. The
building will be deemed the property of the City upon termination of the lease. In December 2003, with
the authorization of the City, the Center secured financing of $6.5 million subject to a mortgage against the
leasehold and real property on which the performing arts center is located. The City also consented to an
assignment of the lease as security for the loan.
Note 10- Reclassification of Beginning Fund Balance:
A reclassification was made to the following beginning fund balance as follows:
June 30, 2002, balance as
previously reported
Section 8 Housing adjustment
JULY 1, 2002, BALANCE AS
RESTATED
Section 8
Housing
$ 255,124
(101,783)
A reclassification was made to the following beginning component unit fund balance as follows:
Edwin J.
Paxton Park
Golf Course
June 30, 2002, balance as
previously reported $ -
Balance not reported 485,870
JULY 1, 2002, BALANCE AS
RESTATED 1485 870
-70-
CITY OF PADUCAH, KENTUCKY
REQUIRED SUPPLEMENTARY INFORMATION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2003
Exhibit A-1
CITY OF PADUCAH, KENTUCKY
REQUIRED SUPPLEMENTARY INFORMATION
PENSION TRUST FUND SCHEDULES
Schedules of Funding Progress
Appointive Employees' Pension Fund (AEPF) (Using Aggregate Actuarial Method)
The Aggregate Cost Method is used for the AEPF; therefore, a schedule of funding progress is not required.
-71-
Actuarial
Actuarial
Unfunded
Annual
UAAL as a
Actuarial
Value of
Accrued
AAL
Funded
Covered
Percentage of
Valuation
Assets
Liability (AAL)
(UAAL)
Ratio
Payroll
Covered Payroll
Date
(a)
(b)
(b -a)
(a/b)
(c)
((b-a)/c)
Police and Firefighters' Pension Fund (PFPF) (Using Entry Age
Normal Method)
7/1/2001
$11,346,128
$15,724,236
$4,378,108
72.2%
$356,406
1228.40%
7/1/2002
10,382,216
15,550,968
5,168,752
66.8
356,304
1450.66
7/1/2003
9,460,720
15,334,484
5,873,764
61.7
320,782
1831.08
Appointive Employees' Pension Fund (AEPF) (Using Aggregate Actuarial Method)
The Aggregate Cost Method is used for the AEPF; therefore, a schedule of funding progress is not required.
-71-
CITY OF PADUCAH, KENTUCKY
BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS)
GENERAL FUND
YEAR ENDED JUNE 30, 2003
Exhibit A-2
Variance with
Licenses:
Business licenses
3,330,000
3,404,340
3,404,338
Final Budget
Employee earnings
Budgeted
Amounts
Actual
Positive
Comcast fees
Original
Final
Amounts
(Negative)
Beginning budgetary fund balance
$4,116,767
$4,441,662
$ 4,441,662
$ -
Resources (inflows):
85,000
109,120
109,120
-
Taxes:
3,490,000
3,580,965
3,580,964
(1)
Real and personal,
75,000
120,435
120,431
(4)
current year
4,033,000
3,907,045
3,903,658
(3,387)
Real and personal,
4,000
4,235
4,235
-
prior year
122,160
209,655
209,645
(10)
Franchise
211,000
280,750
280,734
(16)
Bank taxes
185,000
165,190
165,186
(4)
In lieu of tax payment
137,500
192,660
139,754
(52,906)
Penalty, interest and
advertising
33,000
40,885
40,888
3
Paducah Junior College
tax collections
-
278,810
282,204
3,394
Total taxes
4,721,660
5,074,995
5,022,069
(52,926)
Licenses:
Business licenses
3,330,000
3,404,340
3,404,338
(2)
Employee earnings
10,400,000
10,301,235
10,301,231
(4)
Comcast fees
265,000
277,015
277,013
(2)
Penalties
57,000
69,065
69,064
(1)
Alcoholic beverages
85,000
109,120
109,120
-
Insurance premium tax
3,490,000
3,580,965
3,580,964
(1)
Building permits
75,000
120,435
120,431
(4)
Electrical permits
20,000
33,440
33,437
(3)
Zoning change fees
4,000
4,235
4,235
-
Miscellaneous building
and electrical fees
3,500
910
906
(4)
Total licenses
17,729,500
17,900,760
17,900,739
(21)
Charges for services:
Tax collection fee
120,000
115,780
115,780
-
Administrative charge
236,900
236,905
236,904
(1)
Base court revenue
168,750
168,755
168,752
(3)
Recreation fees
126,000
131,345
131,355
10
Total charges for services
651,650
652,785
652,791
6
(Continued)
-72-
CITY OF PADUCAH, KENTUCKY
BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS)
GENERAL FUND
YEAR ENDED JUNE 30, 2003
Grants:
Police State Incentive
Fire State Incentive
Paducah Housing Authority
after school program
Police supplemental grants
Total grants
Interest
Other:
Property rent and sales
Property upkeep and
maintenance
Miscellaneous
Total other
Other financing sources:
Operating transfers in
Amounts available for appropriation
Exhibit A-2
(Continued)
Variance with
411,805
112,475
nn nnn
419,105
106,020
nn Anr
594,280 607,550
419,127
22
106,023
Final Budget
Budgeted
Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
$ 252,650
$ 266,360
$ 266,362
$ 2
226,300
252,855
252,858
3
23,000
9,775
28,161
18,386
117,800
44,280
44,271
(9)
619,750
573,270
591,652
18,382
286,230
188,455
170,061
(18,394)
411,805
112,475
nn nnn
419,105
106,020
nn Anr
594,280 607,550
419,127
22
106,023
3
79,645
(2,780)
604,795
(2,755)
260,000
282,750
281,209
(1,541)
28,979,837
29,722,227
29,664,978
(57,249)
-73-
(Continued)
CITY OF PADUCAH, KENTUCKY
BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS)
GENERAL FUND
YEAR ENDED JUNE 30, 2003
Charges to appropriations (outflows):
General government:
General administration:
Mayor and Commissioners
City Manager
City Clerk
Corporate Counsel
Non -departmental
Memberships and contingency
Alcoholic beverage control
Civic beautification
Total general administration
Finance:
Finance administration
Accounting and payroll
Revenue collection
Total finance
Planning:
Administration
Planning
Grants
Economic development
Total planning
Human rights
Personnel
Inspection:
Inspection administration
Construction
Code enforcement
Total inspection
Information systems
Budgeted Amounts Actual
Original Final Amounts
Exhibit A-2
(Continued)
Variance with
Final Budget
Positive
(Negative)
$ 162,085
$ 178,775
$ 178,677
$ 98
245,850
243,390
243,189
201
106,365
101,940
101,778
162
220,675
359,030
358,953
77
240,000
300,000
300,000
-
223,800
172,105
22,054
150,051
3,030
2,720
2,715
5
1,201,805
1,357,960
1,207,366
150,594
143,585
145,570
145,587
(17)
292,730
285,140
284,766
374
298,245
252,985
252,714
271
734,560
683,695
683,067
628
179,565
178,095
177,866
229
197,585
196,650
196,634
16
100,165
98,840
98,708
132
318,500
326,900
326,899
1
795,815
800,485
800,107
378
97,980
93,945
93,674
271
215,920
248,235
247,940
295
249,410
189,415
189,229
186
259,640
257,255
256,958
297
249,835
245,325
244,944
381
758,885
691,995
691,131
864
267,735
219,990
219,746
244
-74-
(Continued)
CITY OF PADUCAH, KENTUCKY
BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS)
GENERAL FUND
YEAR ENDED JUNE 30, 2003
Public safety:
Police:
Police administration
Patrol
Investigations
Total police
Fire:
Fire administration
Suppression
Prevention
Training
Total fire
Public service:
Public works:
Public Works Administration
Street maintenance
Street lighting
Facility maintenance
Custodial service
Landscape maintenance
Summer youth program
Total public works
Engineering services:
Engineering services
Flood control
Total engineering services
Exhibit A-2
(Continued)
Variance with
182,340
168,690
168,529
Final Budget
Budgeted
Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
543,425
$1,092,755
$1,135,580
$ 1,134,522
$ 1,058
4,420,740
4,119,630
4,114,778
4,852
1,151,995
1,137,355
1,137,182
173
6,665,490
6,392,565
6,386,482
6,083
4,432,920
4,424,430
8,490
258,170
246,135
245,668
467
4,415,790
4,398,955
4,394,258
4,697
166,370
144,675
144,428
247
140,815
107,175
106,461
714
4,981,145
4,896,940
4,890,815
6,125
182,340
168,690
168,529
161
2,164,260
1,880,540
1,875,251
5,289
456,370
458,750
458,552
198
543,425
477,030
476,613
417
222,750
186,540
185,816
724
1,321,790
1,182,745
1,181,059
1,686
101,200
78,625
78,610
15
4,992,135
4,432,920
4,424,430
8,490
464,680
430,885
430,844
41
430,465
364,170
363,622
548
895,145
795,055
794,466
589
-75-
(Continued)
Exhibit A-2
(Continued)
CITY OF PADUCAH, KENTUCKY
BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS)
GENERAL FUND
YEAR ENDED JUNE 30, 2003
Other:
Cable authority 100,000 81,350 81,338 12
Grant match expense - - 254,064 (254,064)
Leave expense - - 28,047 (28,047)
Intergovernmental expense - - 282,204 (282,204)
Miscellaneous 400 - - -
Total other 100,400 81,350 645,653 (564,303)
Other financing uses:
Operating transfers out 2,605,635 2,956,850 2,678,758 278,092
Total charges to appropriations 25,312,875 24,627,805 24,738,996 (111,191)
ENDING BUDGETARY FUND
BALANCE $3,666,962 $5,094,422 $ 4,925,982 $ (168,440)
-76-
Variance with
Final Budget
Budgeted Amounts
Actual
Positive
Recreation:
Original Final
Amounts
(Negative)
Recreation administration
$ 523,035 $ 508,030
$ 507,569
$ 461
Pools and recreation
477,190 467,790
467,792
(2)
Total recreation
1,000,225 975,820
975,361
459
Other:
Cable authority 100,000 81,350 81,338 12
Grant match expense - - 254,064 (254,064)
Leave expense - - 28,047 (28,047)
Intergovernmental expense - - 282,204 (282,204)
Miscellaneous 400 - - -
Total other 100,400 81,350 645,653 (564,303)
Other financing uses:
Operating transfers out 2,605,635 2,956,850 2,678,758 278,092
Total charges to appropriations 25,312,875 24,627,805 24,738,996 (111,191)
ENDING BUDGETARY FUND
BALANCE $3,666,962 $5,094,422 $ 4,925,982 $ (168,440)
-76-
CITY OF PADUCAH, KENTUCKY
BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS)
GENERAL CAPITAL IMPROVEMENTS FUND
FOR THE YEAR ENDED JUNE 30, 2003
Budgetary fund balance - July 1, 2002
Resources (inflows):
Intergovernmental
Grants
Interest
Miscellaneous
Transfers from other funds
Amounts available for appropriation
Charges to appropriations (outflows):
Capital outlays
Transfers to other funds
Total charges to appropriations
BUDGETARY FUND BALANCE,
JUNE 30, 2003
Exhibit A-3
Variance with
-77-
Final Budget
Budgeted
Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
$ 892,431
$ 880,943
$ 880,943
$ -
-
56,000
56,000
-
55,000
2,061,730
2,035,476
(26,254)
-
3,290
3,290
-
-
592,910
573,272
(19,638)
74,000
601,615
361,407
(240,208)
1,021,431
4,196,488
3,910,388
(286,100)
129,000
3,249,250
3,251,808
(2,558)
60,000
77,645
74,991
2,654
189,000
3,326,895
3,326,799
96
$ 832,431
$ 869,593
$ 583,589
$ (286,004)
-77-
Exhibit A-4
CITY OF PADUCAH, KENTUCKY
BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS)
DOWNTOWN CAPITAL IMPROVEMENTS FUND
FOR THE YEAR ENDED JUNE 30, 2003
-78-
Variance with
Final Budget
Budgeted
Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
Budgetary fund balance - July 1, 2002
$3,412,954
$3,330,775
$3,330,775
$ -
Resources (inflows):
Taxes
-
189,175
189,173
(2)
Interest
103,800
2,860
119,103
116,243
Transfers from other funds
250,000
282,120
282,119
(1)
Amounts available for appropriation
3,766,754
3,804,930
3,921,170
116,240
Charges to appropriations (outflows):
Capital outlays
3,500,000
921,170
921,170
-
Total charges to appropriations
3,500,000
921,170
921,170
-
BUDGETARY FUND BALANCE,
JUNE 30, 2003
$ 266,754
$2,883,760
$3,000,000
$ 116,240
-78-
Exhibit A-5
CITY OF PADUCAH, KENTUCKY
BUDGETARY COMPARISON SCHEDULE
NOTE TO RSI
FOR THE YEAR ENDED JUNE 30, 2003
Note A - Explanation of Differences Between Budgetary Inflows and Outlflows and GAAP Revenues and
Expenditures
Sources/inflows of resources:
Actual amounts "available for appropriation" from
the budgetary comparison schedule
Differences - budget to GAAP:
The beginning fund balance is a budgetary resource,
but is not a current year revenue for financial
reporting purposes
Transfers from these funds are inflows of budgetary
resources, but are not revenues for financial
reporting purposes
Total revenues as reported on the statement of revenues,
expenditures, and changes in fund balances -
governmental funds
Uses/outflows of resources:
Actual amounts "total charges to appropriations" from
the budgetary comparison schedule
Differences - budget to GAAP:
Transfers to other funds are outflows of budgetary
resources, but are not expenditures for financial
reporting purposes
Total expenditures as reported on the statement of
revenues, expenditures, and changes in fund balances -
governmental funds
-79-
(2,678,758) (74,991) -
$22,060,238 $3,251,808 $ 921,170
General
Downtown
Capital
Capital
General
Improvements
Improvements
Fund
Fund
Fund
$29,664,978
$3,910,388
$3,921,170
(4,441,662)
(880,943)
(3,330,775)
(281,209)
(361,407)
(282,119)
$24,942,107
$2,668,038
$ 308,276
$24,738,996
$3,326,799
$ 921,170
(2,678,758) (74,991) -
$22,060,238 $3,251,808 $ 921,170
CITY OF PADUCAH, KENTUCKY
SUPPLEMENTARY INFORMATION
NONMAJOR GOVERNMENTAL FUNDS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2003
COMBINING FINANCIAL STATEMENTS
NONMAJOR GOVERNMENTAL FUNDS
Special Revenue Funds
Municipal Aid Program - to account for revenues and expenditures of Kentucky gas tax refunds.
Emergency Communication Service Fund - to account for revenues associated with 911 program.
Court Awards Fund - to account for revenues associated with judicial system confiscations.
Federal, State, and Local Grants - to account for the grant programs awarded to the City of
Paducah from agencies of the Federal Government and the Commonwealth of Kentucky.
Debt Service Fund
To account for the payment of public project bond principal and interest, public improvement
loan principal and interest, and capital lease payments.
THIS PAGE INTENTIONALLY LEFT BLANK
CITY OF PADUCAH, KENTUCKY
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2003
ASSETS
Cash and cash equivalents
Investments
Accounts receivable:
Accounts
Grants
Interest
Prepaid expenses
TOTAL ASSETS
LIABILITIES
AND
FUND BALANCES
Liabilities:
Voucher and accounts payable
Accrued payroll and payroll taxes
Due to other funds
Deferred revenue
Total liabilities
Fund Balances:
Reserved for:
Program purposes
Unreserved
Total fund balances
TOTAL LIABILITIES AND
FUND BALANCES
See auditors report on pages 12-13.
Exhibit B-1
Special Revenue
$ 56,694
Emergency
Court
Small
CDBG
Municipal
Communication
Awards
Grant
Grant
Aid Program
Service Fund
Fund
Fund
Fund
$371,001
$153,901
$134,188
$49,531
$110,816
525,503
-
-
-
-
-
65,320
-
-
-
-
-
-
21,267
7,000
1,270
-
-
-
-
-
8,765
-
-
-
$897,774
$227,986
$134,188
$70,798
$117,816
$ 56,694
$ 8,616
$ 90,396
$ 624
$ 63,816
-
24,464
-
-
-
-
-
-
24,439
-
-
(265)
-
43,885
54,000
56,694
32,815
90,396
68,948
117,816
-
-
-
1,850
-
841,080
195,171
43,792
-
-
841,080
195,171
43,792
1,850
-
$897,774
$227,986
$134,188
$70,798
$117,816
-80-
$ - $ 53,309 $ 17,029 $ - $ 69,077 $ - $ 359,561
- - - 12,039 - 36,503
- - - 3,044 39,911 - 67,394
69,196 - - - - 166,816
- 122,505 17,029 3,044 121,027 - 630,274
146,431 - 353,667 - 193,265 - 695,213
- - - - - 46,051 1,126,094
146,431 - 353,667 - 193,265 46,051 1,821,307
$146,431 $122,505 $370,696 $3,044 $314,292 $46,051 $2,451,581
-81-
Debt
Service
HOPE 3
Home
HUD
PHA
Section
Debt
Total Nonmajor
Grant
Grant
Revolving
Police
Eight
Service
Governmental
Fund
Fund
Grant Fund
Grant Fund
Housing
Fund
Funds
$146,431
$ 47,228
$370,696
$ -
$314,292
$46,051
$1,744,135
-
-
-
-
-
-
525,503
-
-
-
-
-
-
65,320
-
75,277
-
3,044
-
-
106,588
-
-
-
-
-
-
1,270
-
-
-
-
-
-
8,765
$146,431
$122,505
$370,696
$3,044
$314,292
$46,051
$2,451,581
$ - $ 53,309 $ 17,029 $ - $ 69,077 $ - $ 359,561
- - - 12,039 - 36,503
- - - 3,044 39,911 - 67,394
69,196 - - - - 166,816
- 122,505 17,029 3,044 121,027 - 630,274
146,431 - 353,667 - 193,265 - 695,213
- - - - - 46,051 1,126,094
146,431 - 353,667 - 193,265 46,051 1,821,307
$146,431 $122,505 $370,696 $3,044 $314,292 $46,051 $2,451,581
-81-
Exhibit B-2
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2003
Adjustment to beginning fund balance -
FUND BALANCES - END OF YEAR $841,080
See auditors report on pages 12-13.
-82-
$ 195,171 $43,792 $ 1,850 $
Special Revenue _.
Emergency
Court
Small
CDBG
Municipal
Communication
Awards
Grant
Grant
Revenues:
Aid Program
Service Fund
Fund
Fund
Fund
Taxes
$ -
$ 751,802
$ -
$ -
$ -
Charges for services
-
91,035
-
-
-
Intergovernmental
373,022
-
-
-
-
Grants
-
-
-
218,489
93,052
Interest
15,477
3,280
1,742
474
-
Miscellaneous
420,670
73,379
15,468
40,275
-
Total revenues
809,169
919,496
17,210
259,238
93,052
Expenditures:
Current operations:
Public safety
-
1,150,922
23,095
-
-
Public service
776,500
-
-
-
-
Planning and development
-
-
-
272,522
93,052
Debt Service:
Principal requirement
-
-
-
-
-
Interest and fiscal requirement
-
-
-
-
-
Total expenditures
776,500
1,150,922
23,095
272,522
93,052
Excess revenues over (under)
expenditures
32,669
(231,426)
(5,885)
(13,284)
-
Other Financing Sources (Uses):
Transfers in
555,467
89,246
-
15,134
-
Transfers out
(75,000)
-
-
-
-
Total other financing sources (uses)
480,467
89,246
-
15,134
-
Excess revenues and other financing
sources over (under) expenditures
and other uses
513,136
(142,180)
(5,885)
1,850
-
Fund balances - beginning of the year,
as adjusted
327,944
337,351
49,677
-
-
Adjustment to beginning fund balance -
FUND BALANCES - END OF YEAR $841,080
See auditors report on pages 12-13.
-82-
$ 195,171 $43,792 $ 1,850 $
(33,078) - 221,204
- 39,924 (198,673) 396,298
179,509 - 132,463 - 255,124 244,724 1,526,792
- - - - (101,783) - (101,783)
$146,431 $ - $353,667 $ - $ 193,265 $ 46,051 $1,821,307
-83-
Debt
Service
HOPE 3
Home
HUD
PHA
Section
Debt
Total Nonmajor
Grant
Grant
Revolving
Police
Eight
Service
Governmental
Fund
Fund
Grant Fund
Grant Fund
Housing
Fund
Funds
$ -
$ -
$ -
$ -
$ -
$ -
$ 751,802
-
-
-
-
-
-
91,035
-
-
-
-
-
568,111
941,133
-
298,319
-
84,068
1,579,719
-
23273,647
-
-
2,556
-
811
-
24,340
-
3,000
70,906
-
15
1,628
625,341
-
301,319
73,462
84,068
1,580,545
569,739
4,707,298
-
-
-
84,068
-
-
1,258,085
-
-
-
-
-
-
776,500
-
304,633
68,567
-
1,465,621
-
2,204,395
-
-
-
-
-
379,229
379,229
-
-
-
-
-
428,578
428,578
-
304,633
68,567
84,068
1,465,621
807,807
5,046,787
-
(3,314)
4,895
-
114,924
(238,068)
(339,489)
-
3,314
247,168
-
-
239,395
1,149,724
(33,078)
-
(30,859)
-
(75,000)
(200,000)
(413,937)
(33,078)
3,314
216,309
-
(75,000)
39,395
735,787
(33,078) - 221,204
- 39,924 (198,673) 396,298
179,509 - 132,463 - 255,124 244,724 1,526,792
- - - - (101,783) - (101,783)
$146,431 $ - $353,667 $ - $ 193,265 $ 46,051 $1,821,307
-83-
CITY OF PADUCAH, KENTUCKY
SUPPLEMENTARY INFORMATION
NOAIMAJOR PROPRIETARY FUNDS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 309 2003
COMBINING FINANCIAL STATEMENTS
NONMAJOR PROPRIETARY FUNDS
Wastewater/Stormwater Fund — to account for the remaining assets and liabilities of
wastewater/stormwater operations not yet transferred to the Joint Sewer Agency.
Civic Center Fund — to account for the operation of the Civic Center.
TISA Fund — to account for revenues and expenses associated with the operation of the Paducah -
McCracken County telecommunications and information systems.
Exhibit C-1
LIABILITIES
Current Liabilities:
Voucher and accounts payable
Total liabilities
NET ASSETS
Invested in capital assets, net of related debt
Unrestricted
TOTAL NET ASSETS
See auditors report on pages 12-13.
191,079 3,756
CITY OF PADUCAH, KENTUCKY
216,187
191,079 3,756
COMBINING STATEMENT OF NET ASSETS
216,187
- 164,946
186,466
NONMAJOR PROPRIETARY FUNDS
- 13,973
26,000
39,973
JUNE 30, 2003
$212,466
$391,385
ASSETS
Wastewater/ Civic
Total Nonmajor
Stormwater Center
TISA
Enterprise
Current Assets:
Fund Fund
Fund
Funds
Cash and cash equivalents
$191,079 $ 17,729
$ 47,352
$256,160
Noncurrent Assets:
Property, plant and equipment, net
- 164,946
186,466
351,412
Total assets
191,079 182,675
233,818
607,572
LIABILITIES
Current Liabilities:
Voucher and accounts payable
Total liabilities
NET ASSETS
Invested in capital assets, net of related debt
Unrestricted
TOTAL NET ASSETS
See auditors report on pages 12-13.
191,079 3,756
21,352
216,187
191,079 3,756
21,352
216,187
- 164,946
186,466
351,412
- 13,973
26,000
39,973
$ - $178,919
$212,466
$391,385
-84-
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN FUND NET ASSETS
NONMAJOR PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2003
Operating Revenues:
Charges for services
Total operating revenues
Operating Expenses:
Cost of sales and service
Depreciation and amortization
Total operating expenses
Operating income (loss)
Non -Operating Revenues (Expenses):
Interest and investment income
Income (loss) before contributions and
operating transfers
Capital contributions
Transfers in
Change in net assets
Total net assets - beginning of the year,
as restated
TOTAL NET ASSETS - END OF YEAR
See auditors report on pages 12-13.
Wastewater/ Civic
Stormwater Center
TISA
Fund Fund
Fund
$ - $ 20,825
$ 93,383
- 20,825
93,383
Exhibit C-2
Total Nonmajor
Enterprise
Funds
$114,208
114,208
- 38,191
71,468
109,659
- 8,318
52,251
60,569
- 46,509
123,719
170,228
- (25,684)
(30,336)
(56,020)
- 280
-
280
- (25,404)
(30,336)
(55,740)
- -
3,666
3,666
- 10,000
-
10,000
- (15,404)
(26,670)
(42,074)
- 194,323
239,136
433,459
$ - $178,919
$212,466
$391,385
-85-
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF CASH FLOWS
NONMAJOR PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2003
Wastewater/ Civic
Stormwater Center
TISA
Cash Flows from Operating Activities: Fund Fund
Fund
Cash received from customers $ - $ 20,825
$ 93,383
Other receipts (payments) 2,266 (35,596)
(53,500)
Net cash provided (used) by operating activities 2,266 (14,771)
39,883
Cash Flows from Noncapital
Financing Activities:
Transfers (to) from other funds
Cash Flows from Capital and Related
Financing Activities:
Capital contributions
Acquisition and construction
of capital assets
Net cash provided (used) by capital and
related financing activities
Cash Flows from Investing Activities:
Interest on cash and investments
Net increase (decrease) in cash and cash
10,000 -
- - 3,666
- (2,750) (10,028)
Exhibit C-3
Total Nonmajor
Enterprise
Funds
$114,208
(86,830)
27,378
10,000
3,666
(12,778)
- (2,750) (6,362) (9,112)
280 -
equivalents 2,266 (7,241) 33,521
Cash and cash equivalents, July 1, 2002 188,813 24,970 13,831
CASH AND CASH EQUIVALENTS,
JUNE 30, 2003 $191,079 $ 17,729 $ 47,352
Reconciliation of Operating Income (Loss) to
Net Cash Provided by Operating Activities:
Operating income (loss) $ -
Adjustments to reconcile operating income (loss)
to net cash provided by operating activities:
280
28,546
227,614
$256,160
$ (25,684) $ (30,336) $ (56,020)
Depreciation and amortization - 8,318 52,251
Increase in accounts payable 2,266 2,595 17,968
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES $ 2,266 $ (14,771) $ 39,883
See auditors report on pages 12-13.
-86-
60,569
22,829
$ 27,378
CITY OF PADUCAH, KENTUCKY
SUPPLEMENTARY INFORMATION
INTERNAL SERVICE FUNDS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 309 2003
INTERNAL SERVICE FUNDS
Fleet Maintenance — to account for costs of operating a maintenance facility for automotive
equipment used by other City departments.
Fleet Lease Trust — to account for the financing of vehicle acquisitions provided by one
department or agency to other departments or agencies of the government and to other
governmental units, on a cost reimbursement basis.
Insurance Fund — to account for the costs of obtaining insurance for other City departments.
Health Insurance Fund — to account for the costs associated with the City's health insurance
activities. The intent of the City of Paducah is that the cost of providing insurance coverages on a
continuing basis be financed primarily through user charges.
Exhibit D-1
See auditors report on pages 12-13.
-87-
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT
OF NET ASSETS
INTERNAL SERVICE
FUNDS
JUNE
30, 2003
- ASSETS
Health
Fleet
Fleet Lease
Insurance
Insurance
Combined
Current Assets:
Maintenance
Trust
Fund
Fund
Total
Cash and cash equivalents
$ 31,724
$ 534,476
$137,560
$ 22,183
$ 725,943
Investments
-
739,101
-
-
739,101
Receivables, net
-
3,973
-
252,619
256,592
Inventories
132,873
-
-
-
132,873
Total current assets
164,597
1,277,550
137,560
274,802
1,854,509
Noncurrent Assets:
Buildings and equipment, net
42,173
1,449,546
-
-
1,491,719
Total assets
206,770
2,727,096
137,560
274,802
3,346,228
LIABILITIES
Current Liabilities:
Voucher and accounts payable
19,679
-
-
627,528
647,207
Accrued payroll and payroll taxes
6,845
-
-
-
6,845
Current maturities of long-term debt
21,982
-
-
-
21,982
Due to other funds
-
-
-
177,420
177,420
Deferred revenue
-
-
-
29,363
29,363
Total current liabilities
48,506
-
-
834,311
882,817
Noncurrent Liabilities:
Accrued compensated absences
34,087
-
-
-
34,087
Total liabilities
82,593
-
-
834,311
916,904
NET ASSETS
Invested in capital assets, net
of related debt
42,173
1,449,546
-
-
1,491,719
Unrestricted
82,004
1,277,550
137,560
(559,509)
937,605
TOTAL NET ASSETS
$124,177
$2,727,096
$137,560
$ (559,509)
$2,429,324
See auditors report on pages 12-13.
-87-
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF REVENUES, EXPENSES,
AND CHANGES IN FUND NET ASSETS
INTERNAL SERVICE FUNDS
FOR THE YEAR ENDED JUNE 30, 2003
Operating Revenues:
Charges for services - internal
Charges for services - external
Total operating revenues
Operating Expenses:
Vehicle maintenance
Administrative
Insurance
Leave expense
Depreciation
Total operating expenses
Operating income (loss)
Nonoperating Revenues and (Expenses):
Interest and investment income
Gain (loss) on disposal of property
and equipment
Total nonoperating revenues
(expenses)
Income (loss) before operating transfers
Contributions and Operating Transfers:
Disposal of contributed assets
Transfers in
Total contributions and operating
transfers
Change in net assets
Net assets - beginning of the year
NET ASSETS - END OF YEAR
See auditors report on pages 12-13.
Fleet
Maintenance
$269,627
269,627
Exhibit D-2
384,690
-
Health
-
Fleet Lease
Insurance
Insurance
Combined
Trust
Fund
Fund
Total
$ 379,150
$939,036
$2,763,058
$4,350,871
-
-
375,419
375,419
379,150
939,036
3,138,477
4,726,290
384,690
-
-
-
384,690
-
2,588
-
850
3,438
-
-
910,887
3,507,081
4,417,968
5,211
-
-
-
5,211
12,585
347,315
-
-
359,900
402,486
349,903
910,887
3,507,931
5,171,207
(132,859)
29,247
28,149
(369,454)
(444,917)
-
9,017
-
-
9,017
-
125,714
-
-
125,714
-
134,731
-
-
134,731
(132,859)
163,978
28,149
(369,454)
(310,186)
-
(63,758)
-
-
(63,758)
146,000
473,583
-
-
619,583
146,000
409,825
-
-
555,825
13,141
573,803
28,149
(369,454)
245,639
111,036
2,153,293
109,411
(190,055)
2,183,685
$124,177
$2,727,096
$137,560
$ (559,509)
$2,429,324
-88-
Exhibit D-3
CITY OF PADUCAH, KENTUCKY
COMBINING
STATEMENT
OF CASH FLOWS
INTERNAL SERVICE FUNDS
FOR THE YEAR ENDED JUNE 30, 2003
Health
Fleet
Fleet Lease
Insurance Insurance
Combined
Cash Flows from Operating Activities:
Maintenance
Trust
Fund Fund
Total
Receipts from other funds for services
$ 269,627
$ 379,150
$ 939,036 $3,025,782
$ 4,613,595
Payments to suppliers
(183,681)
-
- -
(183,681)
Payments to employees
(200,522)
-
- -
(200,522)
Claims paid
-
-
- (3,044,151)
(3,044,151)
Other receipts (payments)
-
(2,588)
(910,887) (850)
(914,325)
Net cash provided (used) by operating activities
(114,576)
376,562
28,149 (19,219)
270,916
Cash Flows from Noncapital Financing
Activities:
Transfers (to) from other funds
146,000
473,583
- -
619,583
Cash Flows from Capital and Related
Financing Activities:
Purchase of capital assets
-
(491,338)
- -
(491,338)
Insurance proceeds received
-
125,714
- -
125,714
Net cash used by capital and related financing
-
(365,624)
- -
(365,624)
Cash Flows from Investing Activities:
Proceeds from sales and maturities
of investments
-
229,781
- -
229,781
Interest and dividends
-
9,320
- -
9,320
Purchase of investments
-
(739,101)
- -
(739,101)
Net cash used by investing activities
-
(500,000)
- -
(500,000)
Net increase (decrease) in cash
and cash equivalents
31,424
(15,479)
28,149 (19,219)
24,875
- Cash and cash equivalents, July 1, 2002
300
549,955
109,411 41,402
701,068
CASH AND CASH EQUIVALENTS,
JUNE 30, 2003
$ 31,724
$534,476
$137,560 $ 22,183
$ 725,943
Reconciliation of Operating Income (Loss) to
Net Cash Provided by Operating Activities:
Operating income (loss)
$(132,859)
$ 29,247
$ 28,149 $ (369,454)
$ (444,917)
Adjustments to reconcile operating
income (loss) to net cash provided
-- (used) by operating activities:
Depreciation and amortization
12,585
347,315
- -
359,900
Change in assets and liabilities:
Receivables
-
-
- (112,695)
(112,695)
Inventories
(7,465)
-
- -
(7,465)
Accounts payable and accrued expenses
13,163
-
- 462,930
476,093
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES
$(114,576)
$376,562
$ 28,149 $ (19,219)
$ 270,916
See auditors report on pages 12-13.
-89-
CITY OF PADUCAH, KENTUCKY
SUPPLEMENTARY INFORMATION
FIDUCIARY FUNDS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2003
FIDUCIARY FUNDS
Pension Trust Funds
Police and Firefighters' Retirement Fund and Appointive Employees' Pension Fund — to account
for the accumulation of resources to be used for retirement payments at appropriate amounts and
times in the future. Resources are contributed by employees and by the City at amounts
determined by Kentucky Statutes and/or City Commission decisions.
Exhibit E-1
See auditors report on pages 12-13.
-90-
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF FIDUCIARY NET ASSETS
FIDUCIARY FUNDS - PENSION TRUST FUNDS
JUNE 30, 2003
Police and
Appointive
ASSETS
Firefighters'
Employees'
--
Retirement Fund
Pension Fund
Total
Cash and cash equivalents
$ 496,635
$ 27,058
$ 523,693
Receivables:
Interest
61,930
321
62,251
Other
5,552
-
5,552
Investments at fair value
8,897,151
300,000
9,197,151
Total assets
9,461,268
327,379
9,788,647
LIABILITIES
Voucher and accounts payable
548
5
553
NET ASSETS
Held for trust for pension benefits and
other purposes
$9,460,720
$327,374
$9,788,094
See auditors report on pages 12-13.
-90-
Exhibit E-2
See auditors report on pages 12-13.
-91-
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF CHANGES IN NET
ASSETS
FIDUCIARY FUNDS - PENSION TRUST FUNDS
FOR THE YEAR ENDED JUNE 30, 2003
Police and
Appointive
Firefighters'
Employees'
Additions:
Retirement Fund
Pension Fund
Totals
Contributions:
Employer
$ 214,778
$ -
$ 214,778
Plan members
29,981
-
29,981
Total contributions
244,759
-
244,759
Investment earnings:
Net (decrease) in fair value of
investments (93,230)
-
(93,230)
Interest and dividends
310,612
4,866
315,478
Net investment earnings
217,382
4,866
222,248
Interfund transfers
430,995
75,000
505,995
Total additions
893,136
79,866
973,002
Deductions:
Benefits
1,760,964
90,295
1,851,259
Health insurance
22,183
-
22,183
Administrative expenses
31,486
6,470
37,956
Total deductions
1,814,633
96,765
1,911,398
Change in net assets
(921,497)
(16,899)
(938,396)
Net assets - beginning of the year
10,382,217
344,273
10,726,490
NET ASSETS - END OF YEAR
$ 9,460,720
$327,374
$ 9,788,094
See auditors report on pages 12-13.
-91-
FIDUCIARY FUNDS
Private -purpose Trust Funds
Oak Grove Cemetery Trust and Rinkleff Estate — to account for assets held by the City in the
capacity of trustee for specified purposes.
Component Unit — to account for Paducah Junior College's various scholarship programs.
Exhibit E-3
See auditors report on pages 12-13.
-92-
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF NET ASSETS
FIDUCIARY FUNDS - PRIVATE -PURPOSE TRUST FUNDS
JUNE 30, 2003
Oak Grove
ASSETS
Cemetery Rinkleff
Component
Trust Estate
Total
Unit
Cash and cash equivalents
$ 3,020 $ - $
3,020
$ 270
Investments at fair value
72,476 -
72,476
2,178,908
Total assets
75,496 -
75,496
2,179,178
LIABILITIES
Due to other funds
1
- NET ASSETS
Held in trust for other purposes
$ 75,495 $ - $
75,495
$2,179,178
See auditors report on pages 12-13.
-92-
Exhibit E-4
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF CHANGES IN NET ASSETS
FIDUCIARY FUNDS - PRIVATE -PURPOSE TRUST FUNDS
FOR THE YEAR ENDED JUNE 30, 2003
See auditors report on pages 12-13.
6So
Oak Grove
Cemetery
Rinkleff
Component
Additions:
Trust
Estate
Totals
Unit
Contributions:
Intergovernmental revenues
$ 2,295
$ -
$ 2,295
$ 189,871
Investment earnings:
Net increase in fair value of investments
1,826
-
1,826
-
Interest and dividends
3,778
87
3,865
111,667
Net investment earnings
5,604
87
5,691
111,667
Total additions
7,899
87
7,986
301,538
Deductions:
Administrative expenses
1,477
50
1,527
188,306
Interfund transfers
-
13,685
13,685
-
Total deductions
1,477
13,735
15,212
188,306
Change in net assets
6,422
(13,648)
(7,226)
113,232
Net assets - beginning of the year
69,073
13,648
82,721
2,065,946
NET ASSETS - END OF YEAR
$ 75,495
$ -
$ 75,495
$2,179,178
See auditors report on pages 12-13.
6So
FIDUCIARY FUNDS
Agency Funds
Property Tax Agency Fund — previously to account for the collection and distribution of property
tax resources received by the City of Paducah for the General Fund, special voted funds and other
governmental agencies for which the City acts as collection agent. This fund was eliminated
during the current fiscal year.
Payroll Agency Fund — to account for disbursements relative to the City payroll. The various
City departments transfer amounts to this fund to cover routine payroll and the related benefits
and taxes. All payroll disbursements are made from this fund.
Component Unit Agency Fund — to account for Paducah Junior College's assets held for various
student groups and departments.
Exhibit E-5
CITY OF PADUCAH, KENTUCKY
AGENCY FUNDS
COMBINING STATEMENT OF CHANGES
IN ASSETS AND LIABILITIES
YEAR ENDED JUNE 30, 2003
Balance
Balance
Property Tax Fund:
July 1, 2003
Additions
Deductions
June 30, 2003
Assets:
Taxes receivable, net
$188,841
$ -
$ 188,841
$ -
Due from other taxing agencies
2,114
-
2,114
-
Total assets
$190,955
$ -
$ 190,955
$ -
Liabilities:
Due to other funds
$100,718
$ -
$ 100,718
$ -
Due to other taxing agencies
90,237
-
90,237
-
Total liabilities
$190,955
$ -
$ 190,955
$ -
Payroll Fund:
Assets:
Cash and cash equivalents
$255,382
$10,659,787
$10,664,070
$251,099
Liabilities:
Payroll taxes and withholdings
payable
$255,382
$10,659,787
$10,664,070
$251,099
Totals - All Agency Funds:
Assets:
Cash and cash equivalents
$255,382
$10,659,787
$10,664,070
$251,099
Taxes receivable, net
188,841
-
188,841
-
Due from other taxing agencies
2,114
-
2,114
-
Total assets
$446,337
$10,659,787
$10,855,025
$251,099
_. Liabilities:
Payroll taxes and withholdings
payable
$255,382
$10,659,787
$10,664,070
$251,099
Due to other funds
100,718
-
100,718
-
Due to other taxing agencies
90,237
-
90,237
-
Total liabilities
$446,337
$10,659,787
$10,855,025
$251,099
Component Unit:
Assets:
Cash and cash equivalents
$ 30,000
$ 228
111$ 1 1-11 1111 II
$ 30,228
Liabilities:
Deposits held and due to others
$ 30,000
$ 228
$ -
$ 30,228
See auditors report on pages 12-13.
CITY OF PADUCAH, KENTUCKY
SUPPLEMENTARY INFORMATION
NONMAJOR COMPONENT UNITS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 309 2003
NONMAJOR COMPONENT UNITS
Paducah Mainstreet, Inc. — Paducah Mainstreet is an organization that provides for the
preservation and revitalization of the historic buildings in downtown Paducah, Kentucky.
Transit Authority of the City of Paducah — The City is the grantee agency receiving, on behalf of
the Transit Authority, its principal revenues. The City also contributes substantially to the
operation of the Authority by providing cash subsidies and facilities.
Forest Hills Village, Inc. — The Corporation's only purpose is to manage City of Paducah
properties known as "Forest Hills Housing Development". The City and Corporation have a
lease agreement detailing the terms and conditions of operations.
Edwin J. Paxton Park Golf Course — Paxton Park is a public recreational golf course operating in
McCracken County, Kentucky for the enjoyment of the golf community.
THIS PAGE INTENTIONALLY LEFT BLANK
Exhibit F-1
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF NET ASSETS
NONMAJOR COMPONENT UNITS - AUTHORITIES
JUNE 30, 2003
Governmental
Activities
Business -type Activities
ASSETS
Paducah
Edwin J. Paxton
Total Nonmajor
Transit
Forest
Park Golf
Business -type
Current Assets:
Mainstreet
Authority
Hills
Course
Components
Cash and cash equivalents
$ 31,543
$ 716,293
$ 677,574
$ 26,943
$1,420,810
Beneficial interest in investments
held by Community Foundation
-
-
-
12,795
12,795
Receivables, net:
Accounts
-
450
-
-
450
Grants
-
303,110
-
-
303,110
Interest
-
-
3,571
-
3,571
Other
21,678
6,034
11,126
5,000
22,160
Inventories
-
17,764
8,956
-
26,720
Prepaid expenses
-
-
18,997
-
18,997
Total current assets
53,221
1,043,651
720,224
44,738
1,808,613
Noncurrent Assets:
Investments, restricted
-
-
50,000
-
50,000
Investments, unrestricted
-
50,000
-
100,000
150,000
Capital assets:
Land
-
139,131
-
86,050
225,181
Improvements other than building:
-
-
-
85,569
85,569
Buildings
-
1,328,694
-
380,711
1,709,405
Rolling stock and equipment
16,024
3,007,457
310,294
501,045
3,818,796
Vehicles
-
-
-
15,548
15,548
Less: accumulated depreciation
(6,503)
(1,449,409)
(244,480)
(681,114)
(2,375,003)
Total capital assets
9,521
3,025,873
65,814
387,809
3,479,496
Total noncurrent assets
9,521
3,075,873
115,814
487,809
3,679,496
Total assets
62,742
4,119,524
836,038
532,547
5,488,109
See auditors report on pages 12-13.
-95-
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF
NET ASSETS
NONMAJOR COMPONENT UNITS
- AUTHORITIES
JUNE 30, 2003
Governmental
Activities
Business -type Activities
LIABILITIES
Paducah
Edwin J. Paxton
Total Nonmajor
Transit
Forest
Park Golf
Business -type
Current Liabilities:
Mainstreet
Authority
Hills
Course
Components
Voucher and accounts payable
$ 215
$ 44,012 $
12,918
$ 2,918
$ 59,848
- Accrued payroll and payroll taxes
975
45,462
13,380
1,750
60,592
Deferred revenues
-
-
15,490
-
15,490
Accrued compensated absences
783
22,987
-
-
22,987
Accrued interest
-
-
-
6
6
Prepaid grants
-
58,410
-
-
58,410
Notes payable due within one year
-
-
-
60,000
60,000
Other current liabilities
-
4,562
69,455
-
74,017
Total current liabilities
1,973
175,433
111,243
64,674
351,350
Noncurrent Liabilities:
Accrued compensated absences
-
-
112,793
-
112,793
Obligation under capital lease
-
2,367
-
-
2,367
Public improvement loan payable
49,000
-
-
-
-
Total noncurrent liabilities
49,000
2,367
112,793
-
115,160
Total liabilities
50,973
177,800
224,036
64,674
466,510
NET ASSETS
Invested in capital assets,
net of related debt
9,521
3,018,944
65,814
387,809
3,472,567
Restricted for:
Youth programs
-
-
-
6,003
6,003
Unrestricted
2,248
922,780
546,188
74,061
1,543,029
TOTAL NET ASSETS
$ 11,769
$3,941,724 $
612,002
$ 467,873
$5,021,599
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF ACTIVITIES
NONMAJOR COMPONENT UNITS - AUTHORITIES
FOR THE YEAR ENDED JUNE 30, 2003
General Revenues:
Intergovernmental revenue
Unrestricted investment earnings
Miscellaneous general
Total general revenues and transfers
Change in net assets
Net assets at July 1, 2002, as restated
NET ASSETS AT JUNE 30, 2003
See auditors report on pages 12-13.
-97-
Exhibit F-2
Net
(Expenses)
Revenue
$ (43,334)
1,455,677
(53,067)
(28,367)
2,650
40,612
50,300
93,562
1,424,471
$5,033,368
Program Revenues
FUNCTIONS/PROGRAMS
Operating
Capital
Charges for
Grants and
Grants and
Authorities:
Expenses
Services
Contributions Contributions
Governmental activities:
Mainstreet
$ 113,059
$ -
$ 69,725
$ -
Business -type activities:
Paducah Transit Authority
3,614,498
2,104,006
1,395,604
1,570,565
Forest Hills
1,336,143
1,283,076
-
-
Edwin J. Paxton Park Golf Course
322,882
294,515
-
-
TOTAL COMPONENT UNITS
$5,386,582
$3,681,597
$1,465,329
$1,570,565
General Revenues:
Intergovernmental revenue
Unrestricted investment earnings
Miscellaneous general
Total general revenues and transfers
Change in net assets
Net assets at July 1, 2002, as restated
NET ASSETS AT JUNE 30, 2003
See auditors report on pages 12-13.
-97-
Exhibit F-2
Net
(Expenses)
Revenue
$ (43,334)
1,455,677
(53,067)
(28,367)
2,650
40,612
50,300
93,562
1,424,471
$5,033,368
CITY OF PADtiCAH, KENTUCKY
STATISTICAL SECTION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2003
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-104-
TABLE 8
CITY OF PADUCAH, KENTUCKY
RATIO OF ANNUAL DEBT SERVICE EXPENDITURES FOR
GENERAL BONDED DEBT TO TOTAL GENERAL EXPENDITURES
LAST TEN FISCAL YEARS
(1) Includes the General Fund and Municipal Aid Fund
* Includes in -substance defeasance of Kentucky League of Cities - Pooled Leasing debt.
-105-
Ratio of
(1)
Debt Service
Total
To Total
Total
General
Governmental
Debt
Government
Fund Type
Fiscal Year
Principal
Interest
Service
Expenditures
Expenditures
1993-1994
$ 444,344
$379,956
$ 824,300
$15,928,276
5.2%
1994-1995
913,564
405,000
1,318,564
16,744,678
7.9%
1995-1996
438,141
355,361
793,502
17,737,044
4.5%
1996-1997
4,119,275 *
431,669
4,550,944
19,823,351
22.9%
1997-1998
150,709
46,829
197,538
18,787,240
1.1%
1998-1999
170,615
35,891
206,506
21,306,659
1.0%
1999-2000
134,295
30,536
164,831
19,817,326
0.8%
2000-2001
140,636
25,752
166,388
20,677,530
0.8%
2001-2002
362,275
413,364
775,639
22,904,317
3.4%
2002-2003
379,229
428,578
807,807
22,836,738
3.5%
(1) Includes the General Fund and Municipal Aid Fund
* Includes in -substance defeasance of Kentucky League of Cities - Pooled Leasing debt.
-105-
TABLE 9
CITY OF PADUCAH, KENTUCKY
COMPUTATION OF LEGAL DEBT MARGIN
YEAR ENDED JUNE 30, 2003
Net assessed value $1,586,651,062
Add exemption 60,184,497
Total assessed value $1,646,835,559
Debt limit - 10% of total assessed value (1) $ 164,683,556
Debt outstanding:
General oligations bonds outstanding $8,850,000
Less debt not subject to limit -
Gross bonded debt 8,850,000
Less amount available in debt
service funds 46,051
Net bonded indebtedness subject
to limit 8,803,949
Legal Debt Margin $ 155,879,607
(1) Section 158 of the Commonwealth of Kentucky states:
"Cities shall not be authorized or permitted to incur indebtedness to an amount, including existing
indebtedness, in the aggregate exceeding the following named maximum percentages on the value of the
taxable property therein, to be estimated by the assessment previous to the incurring of the indebtedness:
Cities of the first and second classes, and of the third class having a population exceeding fifteen
hundred, ten per centum."
-106-
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-108-
TABLE 12
CITY OF PADUCAH, KENTUCKY
DEMOGRAPHIC STATISTICS
LAST TEN FISCAL YEARS
Sources:
(1) Bureau of the Census Count - 1990 and 2000.
(2) Bureau of the Census Count - 1990 and 2000.
(3) Board of Education; represents elementary and secondary public schools.
(4) Kentucky Cabinet for Human Resources, Department for Employment Services.
-109-
(4)
Unemployment
Rate
5.7%
3.9%
4.4%
5.5%
4.3%
3.2%
3.8%
4.2%
5.2%
6.0%
(1)
(2)
(2)
(3)
Per Capita
Median
School
Fiscal Year
Population
Income
Age
Enrollment
1993-1994
27,256
$11,918
36.6
3,416
1994-1995
27,256
11,918
36.6
3,389
1995-1996
27,256
11,918
36.6
3,320
1996-1997
27,256
11,918
36.6
3,312
1997-1998
27,256
11,918
36.6
3,244
1998-1999
27,256
11,918
36.6
3,195
1999-2000
27,256
11,918
36.6
3,289
2000-2001
26,307
11,918
39.9
3,037
2001-2002
26,307
18,417
39.9
2,909
2002-2003
26,307
18,417
39.9
2,887
Sources:
(1) Bureau of the Census Count - 1990 and 2000.
(2) Bureau of the Census Count - 1990 and 2000.
(3) Board of Education; represents elementary and secondary public schools.
(4) Kentucky Cabinet for Human Resources, Department for Employment Services.
-109-
(4)
Unemployment
Rate
5.7%
3.9%
4.4%
5.5%
4.3%
3.2%
3.8%
4.2%
5.2%
6.0%
-110-
-111-
TABLE 14
CITY OF PADUCAH, KENTUCKY
PRINCIPAL TAXPAYERS
JANUARY 1, 2003
Taxpayer
Type of Business
Kentucky Oaks Mall
Mall
Wal-Mart
Retailer
Lourdes Medical Pavilion
Healthcare
Alliant Foodservice, Inc.
Food wholesaler
Amerisource
Drug Wholesaler
Computer Services, Inc.
Bank Data Processer
Lowe's
Retailer
Paducah Medical Investors
Healthcare
Drury Inns, Inc.
Motels
H. B. Fuller
Adhesive manufacturing
TOTALS
(1)
Assessed
Valuation
$ 41,626,900
33,851,922
19,511,911
17,907,914
15,798,498
14,257,212
13,669,186
13,440,090
13,266,765
10,941,319
$194,271,717
(1) Source - Property Valuation Administration; Assessed value as of January 1, 2003.
-112-
Percentage of
Total Assessed
Valuation
2.99%
2.43%
1.40%
1.29%
1.14%
1.03%
0.98%
0.97%
0.95%
0.79%
13.97%
TABLE 15
CITY OF PADUCAH, KENTUCKY
COMPUTATION OF DIRECT AND OVERLAPPING DEBT
JUNE 30, 2003
(1) Applicable percentage is determined by ratio of assessed valuation of property subject to taxation in
overlapping unit to valuation of property subject to taxation in reporting unit.
-113-
(1)
Amount
Percentage
Available
Applicable
Bonds/Loans
Debt Service
Net Debt
to City
Outstanding
Funds
Outstanding
of Paducah
City of Paducah
$ 8,850,000
$ 46,051
$ 8,803,949
100.0%
Paducah Independent
School District
8,100,000
-
8,100,000
100.0%
McCracken County
6,350,000
-
6,350,000
47.4%
McCracken County
Board of Education
26,308,173
-
26,308,173
23.9%
Overlapping Debt
40,758,173
-
40,758,173
TOTALS
$49,608,173
$ 46,051
$49,562,122
(1) Applicable percentage is determined by ratio of assessed valuation of property subject to taxation in
overlapping unit to valuation of property subject to taxation in reporting unit.
-113-
TABLE 16
CITY OF PADUCAH, KENTUCKY
POLICE AND FIREFIGHTERS' RETIREMENT FUND
REVENUE BY SOURCE
LAST TEN FISCAL YEARS
Other
Total
(1)
(2)
2,702
Employee
Employer
Investment
Fiscal Year
Contributions
Contributions
Income
1993-1994
$36,797
$356,200
$852,563
1994-1995
34,737
323,844
784,629
1995-1996
33,253
340,773
884,085
1996-1997
33,888
744,484
858,541
1997-1998
36,110
660,651
989,175
1998-1999
31,371
593,776
716,366
1999-2000
27,640
649,274
1,224,591
2000-2001
28,482
865,026
1,033,814
2001-2002
29,224
806,632
487,024
2002-2003
29,981
645,773
(51,867)
Other
Total
$396
$1,245,956
2,702
1,145,912
4,052
1,262,163
1,203
1,638,116
8,967
1,694,903
2,998
1,344,511
2,000
1,903,505
-
1,927,322
-
1,322,880
-
623,887
(1) Includes interfund transfers.
(2) Includes interest and dividend income and net gain (loss) on sale of investments, but does
not include net appreciation (depreciation) in fair value of investments.
-114-
-115-
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—116—
CITY OF PADUCAH, KENTUCKY
SINGLE AUDIT SECTION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2003
CITY OF PADUCAH, KENTUCKY
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2003
Federal Grantor/Pass-Through Grantor/
Program Title:
Department of Housing and Urban
Development:
Section 8 Housing Choice Vouchers
Passed through Kentucky Department
of Local Government:
Community Development Block
Grants/State's Program
Passed -through Kentucky Housing
Corporation:
HOME Investment Partnerships
Program
Total Department of Housing and Urban
Development
Department of Justice:
Local Law Enforcement Block
Grants Program
Bulletproof Vest Partnership Program
Public Safety and Community Policing Grant
Byrne Formula Grant
Total Department of Justice
Department of Agriculture:
Passed -through Kentucky Department of
Natural Resources - Division of Forestry:
Forestry Urban and Community Forestry Grant
Passed -through Kentucky Department of
Education:
Summer Food Service Program for
Children
Total Department of Agriculture
Federal Emergency Management Agency:
Passed through Division of Disaster and
Emergency Services
Assistance to Firefighter's Grant
Federal
CFDA Pass -Through
Number Grantor Number Expenditures
14.871 Contract A -2877-V
$1,540,621
M-00044473
16.592
14.228 99-101
93,052
14.239 M -98 -SG -2101-05-00
Reimbursable and not grant
M -99 -SG -2101-05-00
16.710
M -01 -SG -2101-36-00
748,350
M -01 -SG -2101-05-00
283,497
01 -DG -11083121-010
10.664 02 -DG -11083121-020 10,314
10.559 N/A 28,161
83.55 EMW-2001-FG-11523 42,300
-117-
(Continued)
2000 -LB -VX -0991
16.592
2001 -LB -BX -1375
22,954
16.607
Reimbursable and not grant
12,249
16.710
2001-CK-WX-0047
748,350
16.579
2000 -DD -VX -0047
10,149
01 -DG -11083121-010
10.664 02 -DG -11083121-020 10,314
10.559 N/A 28,161
83.55 EMW-2001-FG-11523 42,300
-117-
(Continued)
CITY OF PADUCAH, KENTUCKY
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2003
Federal
Federal Grantor/Pass-Through Grantor/ CFDA Pass -Through
Program Title: Number Grantor Number
U.S. Department of Transportation:
Small Community Air Service Development Pilot
Program
Passed -through Kentucky Transportation
Cabinet:
Transportation Enhancement
Project - River Heritage Museum
Transportation Enhancement
Project - Streetscape
Total Department of Transportation
TOTAL EXPENDITURES OF FEDERAL AWARDS
20.106 OST -2002-11590-100
20.205 C-02076510
20.205 C-021-30342
See accompanying notes to schedule of expenditures of federal awards.
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Expenditures
$ 140,805
271,054
312,285
724,144
$3,515,791
CITY OF PADUCAH, KENTUCKY
NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2003
Note 1 - Basis of Presentation:
The accompanying schedule of expenditures of federal awards includes the federal grant activity of the
City of Paducah and is presented on the accrual basis of accounting. The information in this schedule is
presented in accordance with the requirements of OMB Circular A-133, Audits of States, Local
Governments, and Non -Profit Organizations. Therefore, some amounts presented in this schedule may
differ from amounts presented in, or used in the preparation of, the financial statements.
Note 2 — Subrecipients:
The City of Paducah provided federal awards to subrecipients as follows:
Program Title
Transportation Enhancement Project
Summer Food Service Program
for Children
Federal
CFDA Amount
Number Provided
20.205 $271,054
_119-
10.559 28,161
299 215
WILLIAMS, WILLIAMS & LENTz, LLP
CERTIFIED PUBLIC ACCOUNTANTS
601 JEFFERSON - P.O. BOX 2500
PADucAH, KENTUCKY 42003-2500
J. RICHARD WALKER
JERRY G. SEVERNS
ROBERT R. ROBERTSON
C. SUZETTE CRONCH
ANNETTE T. RYAN
MICHAEL F. KARNES
MARK A. THOMAS
Report on Compliance and on Internal Control
ROGER G. HARRIS
J. DAVID BAILEY, III
Over Financial Reporting Based on an Audit
G. LEON WILLIAMS
of Financial Statements Performed in Accordance with
H. WILLIAM LENTZ Government Auditing Standards
Honorable William F. Paxton, Mayor
Members of the Board of Commissioners
City of Paducah
Paducah, Kentucky
TELEPHONE
AREA CODE 270
443-3643
We have audited the financial statements of the City of Paducah, Kentucky, as of and for the year ended June
30, 2003, and have issued our report thereon dated October 6, 2003. We conducted our audit in accordance
with auditing standards generally accepted in the United States of America and the standards applicable to
financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United
States.
Compliance
As part of obtaining reasonable assurance about whether the City of Paducah, Kentucky's financial statements
are free of material misstatement, we performed tests of its compliance with certain provisions of laws,
regulations, contracts and grants, noncompliance with which could have a direct and material effect on the
determination of financial statement amounts. However, providing an opinion on compliance with those
provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results
of our tests disclosed no instances of noncompliance that are required to be reported under Government
Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the City of Paducah, Kentucky's internal control over
financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on
the financial statements and not to provide assurance on the internal control over financial reporting. Our
consideration of the internal control over financial reporting would not necessarily disclose all matters in the
internal control that are considered to be material weaknesses. A material weakness is a condition in which
the design or operation of one or more of the internal control components does not reduce to a relatively low
level the risk that misstatements in amounts that would be material in relation to the financial statements being
audited may occur and not be detected within a timely period by employees in the normal course of
performing their assigned functions. We noted no matters involving the internal control over financial
reporting and its operation that we consider to be material weaknesses. However, we noted other matters
involving the internal control over financial reporting that we have reported to management of the City of
Paducah, Kentucky, in a separate letter dated October 6, 2003.
This report is intended for the information and use of the Board of Commissioners of the City of Paducah,
Kentucky, management, others within the organization, and federal awarding agencies and pass-through
entities and is not intended to be and should not be used by anyone other than these specified parties.
October 6, 2003
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Honorable William F. Paxton, Mayor
Members of the Board of Commissioners
City of Paducah
Paducah, Kentucky
Compliance
We have audited the compliance of the City of Paducah, Kentucky, with the types of compliance requirements
described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that
are applicable to each of its major federal programs for the year ended June 30, 2003. The City of Paducah,
Kentucky's major federal programs are identified in the summary of auditor's results section of the
accompanying schedule of findings and questioned costs. Compliance with the requirements of laws,
regulations, contracts and grants applicable to each of its major federal programs is the responsibility of the
management of the City of Paducah, Kentucky. Our responsibility is to express an opinion on the City of
Paducah, Kentucky's compliance based on our audit.
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United
States of America; the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local
Governments, and Non -Profit Organizations. Those standards and OMB Circular A-133 require that we plan
and perform the audit to obtain reasonable assurance about whether noncompliance with the types of
compliance requirements referred to above that could have a direct and material effect on a major federal
program occurred. An audit includes examining, on a test basis, evidence about the City of Paducah
Kentucky's compliance with those requirements and performing such other procedures as we considered
necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our
audit does not provide a legal determination of the City of Paducah, Kentucky's compliance with those
requirements.
In our opinion, the City of Paducah, Kentucky complied, in all material respects, with the requirements
referred to above that are applicable to each of its major federal programs for the year ended June 30, 2003.
Internal Control Over Compliance
The management of the City of Paducah, Kentucky, is responsible for establishing and maintaining effective
internal control over compliance with requirements of laws, regulations, contracts and grants applicable to
federal programs. In planning and performing our audit, we considered the City of Paducah, Kentucky's
internal control over compliance with requirements that could have a direct and material effect on a major
federal program in order to determine our auditing procedures for the purpose of expressing our opinion on
compliance and to test and report on internal control over compliance in accordance with OMB Circular A-
133.
-121-
WILLIAMS, WILLIAMS & LENTZ, LLP
CERTIFIED PUBLIC ACCOUNTANTS
601 JEFFERSON - P.O. BOX 2500
PADuCAH, KENTUCKY 42003-2500
J. RICHARD WALKER
TELEPHONE
JERRY G. SEVERNS
AREA CODE 270
ROBERT R. ROBERTSON
443-3643
C. SUZETTE CRONCH
ANNETTE T. RYAN
MICHAEL F. KARNES
MARK A. THOMAS
Report on Compliance with Requirements Applicable
ROGER G. HARRIS
J. DAVID BAILEY, I II
to Each Major Program and Internal Control Over
Compliance in Accordance with OMB Circular A-133
G. LEON WILLIAMS
H. WILLIAM LENTZ
Honorable William F. Paxton, Mayor
Members of the Board of Commissioners
City of Paducah
Paducah, Kentucky
Compliance
We have audited the compliance of the City of Paducah, Kentucky, with the types of compliance requirements
described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that
are applicable to each of its major federal programs for the year ended June 30, 2003. The City of Paducah,
Kentucky's major federal programs are identified in the summary of auditor's results section of the
accompanying schedule of findings and questioned costs. Compliance with the requirements of laws,
regulations, contracts and grants applicable to each of its major federal programs is the responsibility of the
management of the City of Paducah, Kentucky. Our responsibility is to express an opinion on the City of
Paducah, Kentucky's compliance based on our audit.
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United
States of America; the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local
Governments, and Non -Profit Organizations. Those standards and OMB Circular A-133 require that we plan
and perform the audit to obtain reasonable assurance about whether noncompliance with the types of
compliance requirements referred to above that could have a direct and material effect on a major federal
program occurred. An audit includes examining, on a test basis, evidence about the City of Paducah
Kentucky's compliance with those requirements and performing such other procedures as we considered
necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our
audit does not provide a legal determination of the City of Paducah, Kentucky's compliance with those
requirements.
In our opinion, the City of Paducah, Kentucky complied, in all material respects, with the requirements
referred to above that are applicable to each of its major federal programs for the year ended June 30, 2003.
Internal Control Over Compliance
The management of the City of Paducah, Kentucky, is responsible for establishing and maintaining effective
internal control over compliance with requirements of laws, regulations, contracts and grants applicable to
federal programs. In planning and performing our audit, we considered the City of Paducah, Kentucky's
internal control over compliance with requirements that could have a direct and material effect on a major
federal program in order to determine our auditing procedures for the purpose of expressing our opinion on
compliance and to test and report on internal control over compliance in accordance with OMB Circular A-
133.
-121-
Our consideration of the internal control over compliance would not necessarily disclose all matters in the
internal control that might be material weaknesses. A material weakness is a condition in which the design or
operation of one or more of the internal control components does not reduce to a relatively low level the risk
that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be
material in relation to a major federal program being audited may occur and not be detected within a timely
period by employees in the normal course of performing their assigned functions. We noted no matters
involving the internal control over compliance and its operation that we consider to be material weaknesses.
This report is intended for the information and use of the Board of Commissioners of the City of Paducah,
Kentucky, management, others within the organization, and federal awarding agencies and pass-through
entities and is not intended to be and should not be used by anyone other than these specified parties.
October 6, 2003
-122-
CITY OF PADUCAH, KENTUCKY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2003
A. Summary of Audit Results:
1. The auditor's report expresses an unqualified opinion on the basic financial statements of the City of
Paducah, Kentucky.
2. No reportable conditions were disclosed during the audit of the basic financial statements of the City
of Paducah, Kentucky.
3. No instances of noncompliance material to the basic financial statements of the City of Paducah,
Kentucky were disclosed during the audit.
4. No reportable conditions were disclosed during the audit of the major federal award programs.
5. The auditor's report on compliance for the major federal award programs for the City of Paducah,
Kentucky expresses an unqualified opinion.
6. There are no audit findings relative to the major federal awards program to be reported.
7. The programs tested as major programs included:
Name
Section 8 Housing Choice Vouchers
Public Safety and Community Policing Grant
Transportation Enhancement Project - Locomotive
Project and Streetscape
8. The threshold for distinguishing Types A and B programs was $300,000.
9. The City of Paducah, Kentucky was determined to be a low-risk auditee.
B. Findings - Basic Financial Statements Audit:
None
C Findings and Questioned Costs - Maior Federal Award Programs:
None
-123-
CFDA #
14.871
16.710
20.205