HomeMy WebLinkAboutJune-30-2004City of Paducah
Paducah, Kentucky
Comprehensive Annual Financial Report
Year Ended June 30, 2004
Issued by the
Finance Department
CITY OF PADUCAH, KENTUCKY
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2004
TABLE OF CONTENTS
Exhibit No.
Palle No.
Introductory Section:
Letter of Transmittal
1- 9
Organizational Chart
10
Principal Officials
11
GFOA Certificate of Achievement
12
Financial Section:
Independent Auditor's Report
13-14
Required Supplementary Information:
Management's Discussion and Analysis
15-26
Basic Financial Statements:
Government -wide Financial Statements:
Statement of Net Assets
1
27-28
Statement of Activities
2
29-30
Fund Financial Statements:
Governmental Funds:
Balance Sheet
3
31-32
Reconciliation of the Governmental Funds Balance
Sheet to Statement of Net Assets
4
33-34
Statement of Revenues, Expenditures and Changes
in Fund Balances
5
35-36
Reconciliation of the Statement of Revenues,
Expenditures and Changes in Fund Balances of
Governmental Funds to the Statement of Activities
6
37-38
Proprietary Funds:
Statement of Net Assets
7
39
Statement of Revenues, Expenses and Changes in
Fund Net Assets
8
40
Statement of Cash Flows
9
41
Fiduciary Funds:
Statement of Net Assets
10
42
Statement of Changes in Net Assets
11
43
Component Units Financial Statements:
Statement of Net Assets
12
44-45
Statement of Activities
13
46-47
Notes to Financial Statements
48-75
Required Supplementary Information:
Pension Trust Fund Schedules
A-1
76
Budgetary Comparison Schedule (Budgetary Basis) —
General Fund
A-2
77-80
Budgetary Comparison Schedule — Note to RSI
A-5
81
Supplementary Information:
Nonmajor Governmental Funds:
Combining Balance Sheet
B-1
82-83
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances
B-2
84-85
Exhibit No.
Page No.
Supplementary Information:
Detail Statement of Revenues, Expenditures, and
Changes in Fund Balance — Budget and Actual:
Municipal Aid Program Fund
B-3
86
Emergency Communication Service Fund
B-4
87
Court Awards Fund
B-5
88
Small Grant Fund
B-6
89
CDBG Fund
B-7
90
Hope 3 Implementation Grant Fund
B-8
91
Home Grant Fund
B-9
92
HUD Revolving Grant Fund
B-10
93
Paducah Housing Authority Police Grant Fund
B-11
94
Debt Service Fund
B-12
95
Nonmajor Proprietary Funds:
Combining Statement of Net Assets
C-1
96
Combining Statement of Revenues, Expenses and
Changes in Fund Net Assets
C-2
97
Combining Statement of Cash Flows
C-3
98
Internal Service Funds:
Combining Statement of Net Assets
D-1
99
Combining Statement of Revenues, Expenses, and
Changes in Fund Net Assets
D-2
100
Combining Statement of Cash Flows
D-3
101
Fiduciary Funds:
Combining Statement of Net Assets — Pension
Trust Funds
E-1
102
Combining Statement of Changes in Net Assets —
Pension Trust Funds
E-2
103
Combining Statement of Net Assets —
Private -purpose Trust Funds
E-3
104
Combining Statement of Changes in Net Assets —
Private -purpose Trust Funds
E-4
105
Statement of Changes in Assets and
Liabilities — Agency Funds
E-5
106
Table No.
Page No.
Statistical Section:
General Government Expenditures by Function
1
107
General Revenue By Source
2
108
Tax Revenue by Source
3
109
Secured Tax Levies and Collections
4
110
Assessed and Estimated Actual Value of
Taxable Property
5
111
Property Tax Rates - Direct and Overlapping
Governments
6
112
Ratio of Net General Bonded Debt to
Assessed Value and Net Bonded Debt
Per Capita
7
113
Ratio of Annual Debt Service Expenditures
for General Bonded Debt to Total General
Expenditures
8
114
Computation of Legal Debt Margin
9
115
Property Value, Construction and Bank Deposits
10
116
Schedule of Sewer Revenue Bond Coverage
11
117
Statistical Section:
Demographic Statistics
Miscellaneous Statistical Data
Principal Taxpayers
Computation of Direct and Overlapping Debt
Police and Firefighters' Retirement Fund —
Revenue by Source
Police and Firefighter's Retirement Fund — Expenses
by Type
Summary of Insurance in Force
Single Audit Section:
Schedule of Expenditures of Federal Awards
Notes to the Schedule of Expenditures of Federal
Awards
Report on Compliance and on Internal Control
__. Over Financial Reporting Based on an Audit
of Financial Statements Performed in Accordance
with Government Auditing Standards
Report on Compliance with Requirements Applicable
to each Major Program and Internal Control Over
Compliance in Accordance with OMB Circular A-133
Schedule of Findings and Questioned Costs
Table No. Page No.
12
118
13
119-120
14
121
15
122
16 123
17 124
18 125
126-127
128
129
130-131
132
CITY OF PADUCAH, KENTUCKY
INTRODUCTORY SECTION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 309 2004
c��l of PAD
Ucgd
a
yak �tHnoa ��-�
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
September 20, 2004
We are pleased to submit Paducah's Comprehensive Annual Financial Report for the year ended June 30,
2004. 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 Section - Includes required data in accordance with the Single Audit Act Amendments of 1996.
THE CITY
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 Development 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 I-24/Cairo Road interchange.
In FY2004, the Keiler family donated the Columbia and Arcade Theatre buildings valued at $740,000, and a
donation of infrastructure for Industrial Park West valued at $1.1 million was received, totaling $1.84 million.
Union Planter's Bank donated its former main bank building valued at $675,000 to the City. However, the
Union Planter's Bank building is accounted for in a trust that is not included in the government -wide
statements. The City converted the former bank building into the City's `Commerce Center', which houses
numerous economic and business development -related tenants, including the GPEDC and the Paducah Area
Chamber of Commerce. The theater buildings are being actively marketed for resale to further enhance the
downtown.
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
-2-
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.
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 quitters' 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, started out 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 `8'h 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 lineup is the `Luther F. Carson Four Rivers Center for the
Performing Arts'. The Center opened in February 2004, as a regional, multiple -purpose facility with a 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 supplements this community resource. The
combined inventories of the two libraries yield nearly 121,000 titles, 'not counting numerous periodicals and
newspapers.
-3-
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
325 full-time employees as of June 30, 2004. Department managers are responsible for their respective
departments and report directly to the City Manager.
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, and Transit Authority of the City of
Paducah are 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 expenditures/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.
-4-
Budgetary 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.
GENERAL GOVERNMENT FUNCTIONS
General Fund Revenue Based on Fund Financial Statements)
Revenue for General Government functions (General
Fund) totaled
$27,473,810
in fiscal year 2004, an
increase of 10.2% (2.7% without building donations, as noted below) over fiscal year
2003. 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:
Increase (Decrease)
From FY 2003
FY 2004
Percent
Dollar
Revenue Sources:
Amount
of Total
Amount Percent
-- Taxes
$ 5,205,422
19.07/o
$ 183,353 3.7%
Licenses and permits
18,423,244
67.0%
522,505 2.9%
Charges for services
569,320
2.1%
(83,471) (12.8)%
Grants
635,525
2.3%
43,873 7.4%
Interest
118,566
0.4%
(51,495) (30.3)%
Miscellaneous
2,521,733
9.2%
1,916,938 317.0%
TOTAL REVENUE
27.473.810 100.0% $2,531,703 10.2 %
The most substantial increase in the revenue categories above in actual dollars is in `Miscellaneous', which
- amounted to $1,916,938. The vast majority of the increase was caused by a `one-time' donation of $1.84
million for a building and infrastructure donated to the City. Net of the donations, revenues in the
`Miscellaneous' category increased $76,938. See `Economic Development Activities' section on page 2 for
additional details regarding the donations.
The most substantial increase in the revenue categories, outside of `Miscellaneous', was `Licenses and
Permits', which amounted to $522,505. Payroll taxes increased $314,992 or about 3.1 percent, while business
license collections increased $92,100 or 2.7 percent over last year. In fiscal year 1994, $7.0 million was
received in payroll tax revenues, while fiscal year 2004 revenue was $10.6 million, an average growth rate of
4.3 percent. Payroll tax revenue rate of growth was 3.6 percent for a more recent five-year period, fiscal 1999
to fiscal 2004. The FY2004 payroll tax revenue growth rate is approximately 72 percent of that of the 10 -year
historical average.
Insurance premium tax collections increased 5.2 percent or $186,900 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 below inflation, at 2.9 percent.
-5-
While overall, `License and Permits' revenue dollars grew the most, the `Interest' category decreased the most
dramatically as a percentage of change, 30.3 percent or $51,495. The interest revenue decrease was caused
primarily by the steady decline in interest rates over the past several years as investments continue to mature,
in addition to the decline in funds available to invest.
General Fund Expenditures (Based on Fund Financial Statements)
Expenditures for General Fund functions totaled
$24,593,416, an increase of 11.5%
(3.1% without building
donations, as noted below) over fiscal year 2003.
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 2003
FY 2004
Percent
Dollar
Expenditures:
Amount
of Total
Amount Percent
General government
$ 3,891,251
15.8%
$ (51,780) (1.3)%
Public safety
11,750,018
47.8%
472,721 4.2%
Public service
5,582,006
22.7%
363,110 7.0%
Recreation
1,026,297
4.2%
50,936 5.2%
Other
2,343,844
9.5%
1,698,191 263.0%
TOTAL EXPENDITURES
$24,593,416
10 .0%
$2,533,178 11.
Expenditures grew 11.5 percent or $2,533,178 (3.1% or $693,178 without building donations) between fiscal
year 2003 and fiscal year 2004, as compared to the increase in spending between fiscal year 2002 and fiscal
year 2003, of $865,890 or 4.1 percent. The fiscal year 1995 expenditure per capita was $595 and changed to
$728 and $838 in fiscal year 2000 and fiscal year 2003, respectively. Per capita expenditures have increased
on average 5.3 percent annually since fiscal year 1995. Fiscal year 2004 General Fund expenditures (net of
one-time building donations) increased $27 per citizen from the fiscal year 2003 amount of $838.
The most substantial increase in the expenditures categories above, in actual dollars, is in `Other', which
amounted to $1,698,191. The vast majority of the increase was caused by a `one-time' donation of $1.84
million for a building and infrastructure donated to the City. Net of the donations, expenditures in the `Other'
category decreased $141,809. See `Economic Development Activities' section on page 2 for additional details
regarding the donations.
The fiscal year 2004 budget process played a significant role in identifying spending trends, and that process
should be carried over into fiscal year 2005. The fiscal year 2004 expenditures more accurately reflect all
costs associated with the departments that benefit from the expenditure. The single largest net change was in
`Public Safety' for $472,721. Nearly 95% of the change was due to wage increases ($280,000) and related
pension expenses ($172,000). FOP and IAFF wage contracts provided for 3% cost of living adjustment in
fiscal year 2004. The State of Kentucky increased the City's pension expense for hazardous -duty employees
by 2.23% (a 14% increase) to an 18.51% contribution rate on all wages paid.
The next most significant change in terms of dollars and percentage change were in the 'Public Service'
category for $363,110 or 7.0% over last year. Public Service expenditures are made up of Public Works,
Engineering and Floodwall operational costs. The most substantial increase, in terms of dollars, was in the
`Landscape Maintenance' division.
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 32,888, a 1.7% decrease.
!Q
The June 30, 2004, unemployment rate was 4.3% (McCracken County), much better than the federal rate of
- 5.6%. The number of active electric and water meters was nearly the same as the prior year. The number of
residential construction permits obtained was 268 units of single and multi -family dwellings, up 16% and
valued at $17.9 million. The value of commercial construction permits was $23.6 million, down 34% 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 2004 in the General Fund was $118,566,
on rates varying from 1.65% to 3.52%.
RISK MANAGEMENT
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 $904,500 and $905,300 in fiscal year
2004 and fiscal year 2003, respectively, for general liability, public officials liability, auto, law enforcement
and workers compensation.
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 $108,421 with net assets valued at $9,352,299 on June
30, 2004. There were 6 active members and 97 retirees and/or beneficiaries in this fund as of June 30, 2004.
The most recent actuarial report prepared for the PFPF was as of July 1, 2004.
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 7.34% for non -hazardous and 18.51% for hazardous duty employees in fiscal year
2004.
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 12 retirees and/or beneficiaries receiving
-- benefits from the fund as of June 30, 2004. 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
$3,754 in fiscal year 2004, with net assets valued as of June 30, 2004, of $323,620.
-7-
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 was closed out in fiscal year 2004, since 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.
DEBT SERVICE FUND
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
equipment, which was fully paid in fiscal year 2004.
In fiscal year 2001, the City issued $9.29 million in notes payable to fund the Julian Carroll Convention Center
expansion ($6.0 million) and to assist in the financing of the Luther F. Carson Four Rivers Center (FRC) for
the Performing Arts ($3.0 million). According to an interlocal agreement between the City, McCracken
County and the Tourism and Convention Commission, principal and interest payments on the bonds are to be
made from a 2% transient room tax collected by the County. Any excess principal and interest payments on
the bonds are split equally between the City, County and the Tourism and Convention Commission.
In fiscal year 2004, the City issued $3.5 million in bonds to fund a variety of capital projects, including park
improvements ($1.0 million), downtown infrastructure improvements in conjunction with the FRC ($1.5
million), and City Hall, Police and other City -owned facility improvements ($1.0 million). In fiscal year 2004,
the City sold $5.0 million in bonds to construct the Infiniti Media Building in the Paducah Industrial Park
West, an economic development project. By interlocal agreement, McCracken County is obligated to an
amount equal to 50% of the principal amount of the bonds. After the third year of the life of the bond, the
Infiniti Media Company is obligated to make monthly lease payments to the City in an amount nearly equal to
the debt service obligation.
The total cash outlay requirements for debt service retirement; principal and interest, in fiscal year 2004 were
$900,238.
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.
-8-
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, 2003. This was the
thirteenth 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.
Respectfully submitted,
r
onathan W. Perkins, CPA
Finance Director/Treasurer
la
x
¢
�
o
�
a
O
U
�
ZW
0
c�
U
U
�
Em
U
-10-
w
w
t
Cd
ci.
Q
Q)
t
C O
O cd
on3
o
C
Q
0
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
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
Interim
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, 2003
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.
ED _� �/
-A 5L-4&—
FF¢ �y'�rr"rj�
OF TH
UMTED STA (J
CANADA
CORPORATION
SEAL aoS
uoCAGO
Executive Director
-12-
CITY OF PADUCAH, KENTUCKY
FINANCIAL SECTION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 309 2004
WILLIAMS, WILLIAMS & LENTZ, LLP
CERTIFIED PUBLIC ACCOUNTANTS
601 JEFFERSON
PADUCAH, KENTUCKY 42001
J. RICHARD WALKER
--" JERRY G. SEVERNS
MAILING ADDRESS
POST OFFICE BOX 2500
ROBERT R. ROBERTSON
PADUCAH, KY 42002-2500
C. SUZETTE CRONCH
ANNETTE T. RYAN
TELEPHONE
MICHAEL F. KARNES
270-443-3643
MARK -...
Independent Auditor's Report
ROGER G. HARRIS
ROGER .HARRS
FAX
J. DAVID BAILEY, III
270-444-0652
G. LEON WILLIAMS, 1926-2004
WEBSITE
H. WILLIAM LENTZ
w Icpa.
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, the business -type
activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining
_ fund information of the City of Paducah, Kentucky (the City), as of and for the year ended June 30, 2004,
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 opinions on these financial statements based on our audit. We did not audit the financial
statements of the following component units: Paducah Water Works, Paducah Power System, and Transit
Authority of the City of Paducah, which represent 100 percent 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, 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 opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective
financial position of the governmental activities, the business -type activities, the aggregate discretely presented
component units, each major fund, and the aggregate remaining fund information of the City of Paducah,
Kentucky as of June 30, 2004, and the respective changes in financial position and cash flows, where
applicable, thereof for the year then ended in conformity with accounting principles generally accepted in the
United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated September 20, 2004,
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.
-13-
The Management's Discussion and Analysis, Pension Trust Fund Schedules, and budgetary comparison
information on pages 15 through 26 and 76 through 81, are not a required part of the basic financial statements
but are supplementary information required by accounting principles generally accepted in the United States of
America. 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 opinions on the financial statements that collectively
comprise the City of Paducah, Kentucky's basic financial statements. The introductory section, combining
and individual nonmajor fund financial statements, and statistical tables are presented for purposes of
additional analysis and are not a required part of the basic financial statements. The accompanying schedule
of expenditures of federal awards is presented for purposes of additional analysis as required by U.S. Office of
Management and Budget Circular A-133, Audits of State, Local Governments, and Non -Profit Organizations,
and is also not a required part of the basic financial statements of the City of Paducah, Kentucky. The
combining and individual nonmajor fund financial statements and the schedule of expenditures of federal
awards have been subjected to the auditing procedures applied in the audit of the basic financial statements
and, in our opinion, are 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.
September 20, 2004
-14-
CITY OF PADUCAH, KENTUCKY
REQUIRED SUPPLEMENTARY INFORMATION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2004
CITY OF PADUCAH, KENTUCKY
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2004
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, 2004. 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 1-9) and the basic financial statements (pages 27-75) provided in this document.
The City first implemented Government Accounting Standards Board Statement 34, Basic Financial
Statements—and Management's Discussion and Analysis for State and Local Governments, for fiscal year
2003.
I. Financial Highlights
• Assets exceeded liabilities by $35.6 million at the close of the 2003-2004 fiscal year. Of this
amount, $1.6 million (unrestricted net assets) may be used to meet City government's ongoing
obligations to citizens and creditors.
• Total net assets decreased $1,174,634.
• At fiscal year end, City governmental funds reported a combined ending fund balance of $9.8
million. Approximately 55% of this total amount, $5.4 million, is unreserved and available for
spending at the City's discretion. Of the $5.4 million, $800,696 is in various special funds, which
are earmarked for specific purposes.
• At the end of the current fiscal year, unreserved general fund balance was $4.6 million,
approximately 16.7% 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, Wastewater, Civic Center and
Telecommunication Information System Authority (TISA).
(Continued)
-15-
Government -wide financial statements include not only the City (the primary government), but also
a legally separate Paducah Water Works, Paducah Power System and Transit Authority of the City
of Paducah (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 27-30 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 fourteen (14) 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 eleven (11) 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 and individual fund statements elsewhere in this report on pages 82-95.
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 (pages 33-34) and Exhibit 6 (pages 37-38)
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 31-38 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, and
public transit. TISA and Civic Center receive subsidy from the General Fund.
(Continued)
-16-
The City's component unit enterprises include the Paducah Water Works, Paducah Power
- System and Paducah Transit Authority, which provide water, electric, light and power
systems, and public transportation. These component units, each of which has their own
board of directors, are also enterprise funds and are shown on pages 44-47.
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 allocated between governmental activities and business -type
activities in the government -wide financial statements based on revenue earned.
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 96-98 of this report. Individual data for the
internal service funds is likewise presented in the form of combining statements on pages 100-
102 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, Maintenance and Rehabilitation Trust and Payroll
Agency) are presented in the form of combining statements on pages 102-106 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 48-75 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 82-106 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 $35.6 million as of June 30, 2004.
The largest portion of the City's net assets (82%) 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)
-17-
An additional portion of City net assets (13%) represents resources that are subject to external
restrictions on how they may be used. The remaining balance of unrestricted net assets ($1.6 million)
may be used to meet the City's ongoing obligations to citizens and creditors.
As of June 30, 2004, 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.
In this second year of implementation of GASB Statement 34, the City is presenting comparative
columns in the various comparisons and analyses for the prior year.
City of Paducah, Kentucky
Net Assets
June 30
The following table provides a summary of the City's operations for the years ended June 30, 2004
and 2003. The City first implemented GASB Statement 34, Basic Financial Statements — and
Management Discussion and Analysis — for State and Local Governments in fiscal year 2003.
Governmental activities decreased the City's net assets by $1,626,943. The primary reason for the
decrease was a $3.0 million payment to the Luther F. Carson Four Rivers Center for the Center's
building construction fund. Additionally, while most funds' net assets increased, the Municipal Aid
Fund's net assets decreased $349,264. Business -type activities increased the City's net assets by
$452,309.
The following table provides a summary of the City's operations for the years ended June 30, 2004
and June 30, 2003:
(Continued)
-18-
Business -Type
Total
Governmental Activities
Activities
Primary Government
2004
2003
2004
2003
2004
2003
Current assets
$20,080,043
$19,306,855
$2,205,856
$1,970,437
$22,285,899
$21,277,292
Capital assets
38,764,453
32,412,164
1,463,669
1,425,753
40,228,122
33,837,917
Total assets
58,844,496
51,719,019
3,669,525
3,396.190
62,514,021
55,115,209
Long-term liabilities
17,889,770
9,979,680
14,002
18,671
17,903,772
9,998,351
Other liabilities
8,788.311
7,915,025
212,361
386,666
9,000,672
8,301,691
Total liabilities
26,678,081
17,894,705
226,363
405,337
26,904,444
18,300,042
Net assets:
Invested in capital
assets, net of related
debt
27,826,117
27,955,839
1,463,668
1,425,753
29,289,785
29,381,592
Restricted
4,746,340
4,297,355
-
-
4,746,340
4,297,355
Unrestricted
(406,042)
1,571,120
1,979,494
1,565,100
1,573,452
3,136,220
TOTAL NET
ASSETS32.166.415
33.824.314
$3,443,162
S2 990 853
$35,609,577
36.815.167
A. Analysis of the City's Operations
The following table provides a summary of the City's operations for the years ended June 30, 2004
and 2003. The City first implemented GASB Statement 34, Basic Financial Statements — and
Management Discussion and Analysis — for State and Local Governments in fiscal year 2003.
Governmental activities decreased the City's net assets by $1,626,943. The primary reason for the
decrease was a $3.0 million payment to the Luther F. Carson Four Rivers Center for the Center's
building construction fund. Additionally, while most funds' net assets increased, the Municipal Aid
Fund's net assets decreased $349,264. Business -type activities increased the City's net assets by
$452,309.
The following table provides a summary of the City's operations for the years ended June 30, 2004
and June 30, 2003:
(Continued)
-18-
City of Paducah, Kentucky
Changes in Net Assets
For the Years Ended June 30
- - 4,012,168
Governmental Activities
Revenues:
2004
2003
Program revenues:
Primary Government
2004
Charges for services
$ 3,867,699
$ 2,370,110
Operating grants/
$ 3,413,172
$ 7,795,064
contributions
3,290,134
4,176,548
Capital grants/
4,176,548
24,990
contributions
3,221,637
2,213,757
General revenues:
4,020,156 3,480,606 39,146,752
36,601,486
Property taxes
4,012,168
3,893,211
Franchise tax
244,877
298,251
Telecommunications
123,719
184,166
tax
665,807
751,802
Insurance premium tax 3,767,864
3,580,964
Vehicle tax
493,800
492,077
Bank tax
161,550
169,668
Gross receipts license
821,602
68,964
tax
3,496,438
3,404,338
Employee licenses tax
10,616,223
10,301,231
Other taxes
198,106
181,266
Intergovernmental
revenue
871,273
836,132
Unrestricted investment
earnings
220,992
325,811
Gain on sale of
capital assets
(972)
125,714
Total revenues
35,126,596
33,120,880
Expenses:
General
government
7,969,027
7,396,882
Public safety
13,243,912
12,964,120
Public service
8,618,901
7,376,791
Parks and recreation
1,026,293
975,362
Planning and
development
5,330,393
3,108,192
Interest on long-term
debt
496,049
428,578
Solid Waste
-
-
Civic Center
-
-
TI SA
Total expenses
36,684,575
32,249,925
Increase (decrease) in net
assets before transfers
(1,557,979)
870,955
Transfer
(68,964)
18,666
Change in net assets
(1,626,943)
889,621
Adjustment to beginning
net assets
(30,956)
-
Net assets, July 1
33,824,314
32,934,693
NET ASSETS, JUNE 30
32.166.415
$ 33.824.314
- - 4,012,168
3,893,211
Total
298,251
Business-Tvue
Activities
Primary Government
2004
2003
2004
2003
$ 3,927,365
$ 3,413,172
$ 7,795,064
$ 5,783,282
-
-
3,290,134
4,176,548
24,990
3,666
3,246,627
2,217,423
- - 4,012,168
3,893,211
- - 244,877
298,251
- - 665,807
751,802
- - 3,767,864
3,580,964
- - 493,800
492,077
- - 161,550
169,668
- - 3,496,438
3,404,338
- - 10,616,223
10,301,231
- - 198,106
181,266
- - 871,273
836,132
32,826 39,530 253,818
365,341
34,975 24,238 33,003
149,952
4,020,156 3,480,606 39,146,752
36,601,486
-
-
7,969,027
7,396,882
-
-
13,243,912
12,964,120
-
-
8,618,901
7,376,791
-
-
1,026,293
975,362
-
-
5,330,393
3,108,192
-
-
496,049
428,578
3,419,464
3,359,731
3,419,464
3,359,731
33,181
46,509
33,181
46,509
184,166
123,719
184,166
123,719
3,636,811
3,529,959
40,321,386
35,779,884
383,345
(49,353)
(1,174,634)
821,602
68,964
(18,666)
-
-
452,309
(68,019)
(1,174,634)
821,602
-19-
- - (30,956) -
2,990,853 3,058,872 36,815,167 35,993,565
3.443,162 S 2,990,853 35,609,577 $36,815,167
(Continued)
B. Governmental Activities
$14
o $12
$10
$8
$6
$4
$2
$0
Governmental Activities
Expenses and Program Revenues
°' -� 0
ani a`"i a" o
> a c
oon >
a a �
Vehicle Tax
1%
Occul
Governmental Activities
Intergovernmental Revenue by Source
-20-
(E911)
2%
>ervices
Operating
s/contributions
9%
Capital
/contributions
9%
Property taxes
12%
(Continued)
C. Business -Type Activities
Business -type activities increased the City's net assets by $452,309, in contrast to the negative
position in net assets for Governmental Activities for the year.
Business -Type Activities
Expenses and Revenues
$4.0
c
$3.5
$3.0
$2.5
$2.0
$1.5
$1.0
$0.5
$0.0
■ Expenses
■ Revenues
Solid Waste Wastewater Civic Center TISA
Business -Type Activities
Revenue by Source
Interest Income
Capital
grants/contributions
0%
1% Gain on sale of capital
assets and transfers
l%
Charges for services
98%
-21-
(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 $9.8 million. Approximately 55% of this total amount, $5.4 million, is unreserved fund balance,
which is available for spending at the government's discretion. Of the $5.4 million, $800,696 is in
the debt service fund and various grant funds. The remaining $4.4 million of fund balance is
reserved for specific future uses.
Governmental Activities
Ending Fund Balances
Unreserved - other Unreserved - general
funds fund
8% 47%
Reserved
45%
The general fund is the chief operating fund of the City. At the end of the 2003-2004 fiscal year, the
general fund unreserved fund balance was $4.6 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 $3.5 million, which leave $1.1 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 16.7% of
expenditures and transfers out ($27.8 million).
The General Fund fund balance decreased by $284 thousand during the 2003-2004 fiscal year and
was the result of expenditures increasing at a more rapid rate than revenues. Key factors
contributing to this decrease are:
o Economic development incentives, and
o State pension plan cost increases.
The General Capital Improvements Fund had a fund balance of $738 thousand all of which is
reserved. The General Capital Improvements fund balance increased $155 thousand.
The Downtown Capital Improvements Fund had a fund balance of $3.1 million all of which is
reserved and it has already been committed to the Infinity Media project in Paducah's Industrial
Park West. The Downtown Capital Improvements fund balance increased $148 thousand.
B. Proprietary Funds
The City's proprietary funds provide the same information found in the government -wide financial
statements, but in more detail.
Unrestricted net assets of the respective proprietary funds are:
Solid Waste $1,914,969
Wastewater -
Civic Center 21,117
TISA 49,412
(Continued)
-22-
Combined net asset growth for the four funds was $362 thousand broken down as follows: Solid
Waste $345 thousand, Civic Center $3 thousand, and TISA $14 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 $975,660 decrease in
appropriations and can be briefly summarized as follows:
Transfers out were also increased $1,126,515. The net increase to appropriations and transfers out was
$2,386,525 for the year. Since expenditures and transfers out were slightly more than budgetary
estimates, fund balance was reduced more 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,
2004, is $33.4 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 2004, projects and equipment expenditures totaled nearly $13.3 million. The
largest capital -type projects, in terms of dollars in fiscal year 2004, are shown in the following table:
Four Rivers Center capital building fund $3,000,000
Infiniti Media building project 3,400,000
Four Rivers Center parking lot and related infrastructure 1,800,000
Park improvements (including recreation trails) 714,000
Pecan Drive improvements project (row, bridges) 632,000
Streetscape — Phase IV 412,000
GIS project 266,000
River Heritage Museum project 250,000
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
including 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.
(Continued)
-23-
Appropriations
Department
Increase
Decrease
General administration
$ -
$255,005
Finance
-
26,290
Planning
114,915
-
Human rights
-
3,075
Human resources
-
8,800
Inspection
-
49,475
Information systems
-
29,540
Police
-
220,600
Fire
-
21,965
Public works
-
434,660
Engineering services
14,465
-
Recreation
-
55,630
Transfers out were also increased $1,126,515. The net increase to appropriations and transfers out was
$2,386,525 for the year. Since expenditures and transfers out were slightly more than budgetary
estimates, fund balance was reduced more 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,
2004, is $33.4 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 2004, projects and equipment expenditures totaled nearly $13.3 million. The
largest capital -type projects, in terms of dollars in fiscal year 2004, are shown in the following table:
Four Rivers Center capital building fund $3,000,000
Infiniti Media building project 3,400,000
Four Rivers Center parking lot and related infrastructure 1,800,000
Park improvements (including recreation trails) 714,000
Pecan Drive improvements project (row, bridges) 632,000
Streetscape — Phase IV 412,000
GIS project 266,000
River Heritage Museum project 250,000
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
including 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.
(Continued)
-23-
Land
Land improvements
Construction in progress
Buildings and
improvements
Infrastructure
Equipment
Furnishings and
fixtures
Vehicles
101F RLI
City of Paducah, Kentucky
Capital Assets
(Net of Accumulated Depreciation)
June 30
Business -Type
Governmental Activities Activities
2004 2003 2004 2003
T-5,420,685 $ 5,084,335 $ 65,908 $ 65,908
53,502 - - -
1,719,363 2,988,191 - -
Total
Primary Government
2004 2003
$ 5,486,593 $ 5,150,243
53,502 -
1,719,363 2,988,191
3,645,717 3,096,982 194,339 183,855 3,840,056 3,280,837
18,604,571 14,242,704 - - 18,604,571 14,242,704
825,402 1,032,988 288,321 376,358 1,113,723 1,409,346
1,755 5,687 - - 1,755 5,687
1,666,547 1,584,777 915,101 799,632 2,581,648 2,384,409
31.937.54228.035.664 $1,463,669 $33,401,211 $29,461,417
Additional information on City capital assets can be found in Note 3 in the notes to financial
statements on pages 60-61.
B. Long -Term Debt
At year end, the City had $18,793,259 in outstanding bonds, accrued compensated absences and
capital leases, compared to $10,622,534 at June 30, 2003 with maturities extending through 2026.
During the year, the City's total debt increased by $8,170,725 or 80%, as shown in the following
table:
General Obligation Bonds:
Convention and Performing Arts Center — 2001
Kentucky League of Cities — 2003
Infiniti Media Building — 2004
General Fund accrued compensated absences
Paducah Bank — Lowertown property
Capital lease — fire equipment
TOTALS
Governmental Activities
2004
2003
$ 8,620,000
$ 8,850,000
3,381,211
-
5,000,000
-
1, 744,404
1,692,709
47,644
-
-
79,825
18.793.25910.622.534
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.
In fiscal year 2004, the City borrowed $3.5 million to fund a variety of capital projects, including
park improvements ($1.0 million), downtown infrastructure improvements in conjunction with the
FRC ($1.5 million), and City Hall, Police and other City -owned facility improvements ($1.0
million).
(Continued)
-24-
In fiscal year 2004, the City sold $5.0 million in bonds to construct the Infiniti Media Building in the
Paducah Industrial Park West, an economic development project. By interlocal agreement,
McCracken County is obligated to an amount equal to 50% of the principal amount of the bonds.
After the third year of the life of the bond, the Infiniti Media Company is obligated to make monthly
lease payments to the City in an amount nearly equal to the debt service obligation.
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 $149,036,256. 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.
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 3.7% 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 63-65.
VII. Economic Factors and Next Year's Budgets and Rates.
A. General Comments. Paducah continued to experience steady -slow -growth in the local economy as
compared to the national economy in fiscal year 2004. Paducah continues 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 was improved with the opening of the Luther F.
Carson Four Rivers Center for the Performing Arts (FRC). The FRC opened 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. Four Rivers
Behavioral Health Systems Corporate offices moving into the former J C Penney building which had
been vacant for years further enhanced downtown. These major additions to the downtown area will
significantly increase the flow of commerce and traffic flow.
B. Unemployment Rate. The unemployment rate for the City of Paducah (McCracken County) as of
June, 2004 was 4.3%. This rate compares favorably to state and federal unemployment rates, 5.4%
and 5.6%, 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.
(Continued)
-25-
F. Enterprise Zone. Since its inception, the Paducah Enterprise Zone Program has produced 325
qualified businesses, which have pledged expenditures of $91 million in addition to creating 322
targeted jobs.
All the above factors, in addition to current and future needs of the City, were considered when the
2004-2005 Budget for the City of Paducah was prepared. The beginning general fund balance for
fiscal year 2004-2005 is $4,642,073. The City has estimated an ending fund balance of $3,400,000,
or 12.5% 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 2004-2005.
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.
-26-
CITY OF PADUCAH, KENTUCKY
BASIC FINANCIAL STATEMENTS
GOVERNMENT -WIDE FINANCIAL STATEMENTS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2004
THIS PAGE INTENTIONALLY LEFT BLANK
ASSETS
Current Assets:
Cash and cash equivalents
Investments
Receivables, net:
Note
Accounts
Grants
Interest
Property tax
Other
Internal balances
Inventory
Prepaid pension obligation
Prepaid expenses
Other current assets
Total current assets
Noncurrent Assets:
Investments, restricted
Notes receivable
Bond issuance costs, net
Net capital assets:
Land and construction in progress
Depreciable capital assets
Restricted assets
Other assets
Total noncurrent assets
Total assets
Exhibit 1
CITY OF PADUCAH, KENTUCKY
STATEMENT OF NET ASSETS
JUNE 30, 2004
Primary Government
-
-
Governmental
Business -type
-
Component
Activities
Activities
Total
Units
$ 7,419,546
$ 943,762 $
8,363,308
$ 1,596,627
5,774,204
1,200,000
6,974,204
-
195,000
-
195,000
-
296,499
55,536
352,035
2,829,582
617,121
-
617,121
190,065
32,900
5,568
38,468
-
4,121,736
-
4,121,736
-
-
-
-
1,211,561
6,004
(6,004)
-
-
376,874
-
376,874
1,366,349
212,055
-
212,055
-
1,028,104
6,994
1,035,098
39,231
20,080,043 2,205,856 22,285,899 8,069,304
-
-
-
5,480,663
6,681,500
-
6,681,500
-
145,411
-
145,411
-
7,140,048
65,908
7,205,956
3,628,208
24,797,494
1,397,761
26,195,255
71,152,006
-
-
-
69,111
-
-
-
116,329
38,764,453
1,463,669
40,228,122
80,446,317
58,844,496
3,669,525
62,514,021
88,515,621
-27-
LIABILITIES
Primary Government
Governmental
Business -type
Component
Current Liabilities:
Activities
Activities
Total
Units
Voucher and accounts payable
$ 1,917,833
$ 129,568
$ 2,047,401
$ 3,832,690
- Accrued payroll and payroll taxes
778,491
31,608
810,099
505,363
Due to other taxing agencies
51,491
-
51,491
-
Unearned revenue
5,137,007
-
5,137,007
1,379,222
Accrued compensated absences
370,130
51,185
421,315
26,956
Accrued interest
-
-
-
161,023
Notes payable due within one year
133,359
-
133,359
29,182
Bonds payable due within one year
400,000
-
400,000
1,215,000
Other current liabilities
-
-
-
1,850,610
Total current liabilities
8,788,311
212,361
9,000,672
9,000,046
Noncurrent Liabilities:
Accrued compensated absences
1,374,274
14,002
1,388,276
-
Notes payable
3,295,496
-
3,295,496
275,025
Bonds payable
13,220,000
-
13,220,000
9,085,621
Total noncurrent liabilities
17,889,770
14,002
17,903,772
9,360,646
Total liabilities
26,678,081
226,363
26,904,444
18,360,692
NET ASSETS
Invested in capital assets, net
of related debt
27,826,117
1,463,668
29,289,785
64,644,282
Restricted for:
Program purposes
714,538
-
714,538
-
Capital projects
4,031,802
-
4,031,802
1,113,399
-- Unrestricted
(406,042)
1,979,494
1,573,452
4,397,248
TOTAL NET ASSETS
$32,166,415
$3,443,162
$35,609,577
$70,154,929
See accompanying notes to the basic financial statements.
-28-
CITY OF PADUCAH, KENTUCKY
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2004
FUNCTIONSIPROGRAMS
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
Wastewater
Civic Center
TISA
Total business -type activities
TOTAL PRIMARY GOVERNMENT
Component Units:
Authorities:
Paducah Water Works
Paducah Power System
Paducah Transit Authority
TOTAL COMPONENT UNITS
Exhibit 2
General revenues:
Taxes and licenses:
Property taxes, levied for general purposes
Franchise tax
Telecommunications tax
Insurance premium tax
Vehicle tax
Bank tax
Gross receipts license tax
Employee license tax
Other taxes
Intergovernmental revenue
Unrestricted investment earnings
Gain on sale of capital assets
Rent income
Miscellaneous
Total general revenues
Transfers
Total general revenues and transfers
Change in net assets
Net assets, July 1, 2003, as previously reported
Adjustment to beginning net assets
NET ASSETS, JUNE 30,2004
See accompanying notes to the basic financial statements.
-29-
Program Revenues
Operating
Capital
Charges for
Grants and
Grants and
Expenses
Services
Contributions
Contributions
$ 7,969,027
$ 1,601,414
$ -
$1,840,000
13,243,912
1,134,386
61,400
363,446
8,618,901
986,618
710,715
1,009,920
1,026,293
132,388
10,102
-
5,330,393
12,893
2,507,917
8,271
496,049
-
-
-
36,684,575
3,867,699
3,290,134
3,221,637
3,419,464
3,568,056
-
-
-
222,076
-
-
33,181
36,455
-
-
184,166
100,778
-
24,990
3,636,811
3,927,365
-
24,990
$40,321,386
$ 7,795,064
$3,290,134
$3,246,627
$ 5,950,078
$ 6,141,550
$ -
$ 416,757
39,969,207
40,438,080
-
-
5,849,879
2,883,911
2,339,780
1,226,325
$51,769,164
$49,463,541
$2,339,780
$1,643,082
General revenues:
Taxes and licenses:
Property taxes, levied for general purposes
Franchise tax
Telecommunications tax
Insurance premium tax
Vehicle tax
Bank tax
Gross receipts license tax
Employee license tax
Other taxes
Intergovernmental revenue
Unrestricted investment earnings
Gain on sale of capital assets
Rent income
Miscellaneous
Total general revenues
Transfers
Total general revenues and transfers
Change in net assets
Net assets, July 1, 2003, as previously reported
Adjustment to beginning net assets
NET ASSETS, JUNE 30,2004
See accompanying notes to the basic financial statements.
-29-
Net (Expense) Revenue and Changes in Net Assets
Primary Government
148,592
Governmental Business -type
Component
Activities Activities
Total Units
$ (4,527,613) $ -
$ (4,527,613) $ -
(11,684,680) -
(11,684,680) -
(5,911,648) -
(5,911,648) -
(883,803) -
(883,803) -
(2,801,312) -
(2,801,312) -
(496,049) -
(496,049) -
(26,305,105) -
(26,305,105) -
-
148,592
148,592
-
-
222,076
222,076
-
-
3,274
3,274
-
-
(58,398)
(58,398)
-
-
315,544
315,544
-
(26,305,105)
315,544
(25,989,561)
-
-
-
-
608,229
-
-
-
468,873
-
-
-
600,137
-
-
-
1,677,239
4,012,168
-
4,012,168
-
244,877
-
244,877
-
665,807
-
665,807
-
3,767,864
-
3,767,864
-
493,800
-
493,800
-
161,550
-
161,550
-
3,496,438
3,496,438
-
10,616,223
10,616,223
-
198,106
-
198,106
-
871,273
-
871,273
-
220,992
32,826
253,818
88,846
(1,972)
34,975
33,003
-
-
-
-
13,900
-
_
-
21,264
24,747,126
67,801
24,814,927
124,010
(68,964)
68,964
-
-
24,678,162
136,765
24,814,927
124,010
(1,626,943)
452,309
(1,174,634)
1,801,249
33,824,314
2,990,853
36,815,167
68,353,680
(30,956)
-
(30,956)
-
$32,166,415 $3,443,162 $35,609,577 $70,154,929
-30-
CITY OF PADUCAH, KENTUCKY
BASIC FINANCIAL STATEMENTS
FUND FINANCIAL STATEMENTS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 309 2004
THIS PAGE INTENTIONALLY LEFT BLANK
CITY OF PADUCAH, KENTUCKY
BALANCESHEET
GOVERNMENTAL FUNDS
JUNE 30, 2004
ASSETS
Cash and cash equivalents
Investments
Accounts receivable:
Accounts
Grants
Interest
Property taxes (net of
allowances for uncollectibles)
Prepaid items
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 other taxing agencies
Unearned 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.
-31-
General
2,300,000
72,354
71,393
6,844
3,993,055
Exhibit 3
General
Downtown
Capital
Capital
Improvements
Improvements
$ 823,868
$2,164,514
-
1,674,204
453,472 -
- 3,728
$9,952,571 $1,277,340 $3,842,446
$ 298,438 $ 292,672 $ 694,215
739,288 - -
51,491 - -
3,875,525 246,508 -
5,310,498 539,180 694,215
- 738,160 3,148,231
4,642,073 - -
4,642,073 738,160 3,148,231
$9,952,571 $1,277,340 $3,842,446
Nonmajor
Total
Governmental
Governmental
Funds
Funds
$1,099,082
$ 6,548,643
500,000
4,474,204
133,737
206,091
92,256
617,121
3,267
13,839
-
3,993,055
12,962
12,962
-
1,047,746
$1,841,304
$16,913,661
$ 243,126
$ 1,528,451
30,102
769,390
49,405
49,405
-
51,491
234,552
4,356,585
-
345,756
557,185
7,101,078
483,423
483,423
-
3,886,391
-
4,642,073
770,453
770,453
30,243
30,243
1,284,119
9,812,583
$1,841,304
$16,913,661
-32-
Exhibit 4
CITY OF PADUCAH, KENTUCKY
RECONCILIATION OF THE GOVERNMENTAL FUNDS
BALANCE SHEET TO STATEMENT OF NET ASSETS
JUNE 30, 2004
Total fund balance - total governmental funds $ 9,812,583
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. 128,681
The long-term notes receivable are not reported in the governmental
funds balance sheet since they are not available to pay current period
expenditures. 6,827,500
Interest receivable on the long-term notes receivable is not reported
on the governmental funds balance sheet since neither the note
receivable nor the interest is available to pay current period
expenditures. 12,451
Inventory is not a current financial resource and, therefore, is not
reported in the governmental funds balance sheet. 278,760
A prepaid pension obligation is not a current financial resource, and
therefore, is not reported in the governmental funds balance sheet. 212,055
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. 31,937,542
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 $ 533,359
Due after one year 17,889,770 (18,423,129)
Bond issuance costs used in governmental activities are not current
financial resources and, therefore, are not reported in the
governmental funds balance sheet. 145,411
(Continued)
-33-
CITY OF PADUCAH, KENTUCKY
RECONCILIATION OF THE GOVERNMENTAL FUNDS
BALANCE SHEET TO STATEMENT OF NET ASSETS
JUNE 30, 2004
Debt proceeds deferred for future construction are not current
financial resources and, therefore, are not reported in the
governmental funds balance sheet.
Accrued interest payments on debt are not due and payable in the
current period and, therefore, are not reported in the governmental
funds balance sheet.
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 $ 3,430,393
Current liabilities (1,396,399)
Net amount allocated to
business -type activities 6,004
NET ASSETS OF GOVERNMENTAL ACTIVITIES
See accompanying notes to the basic financial statements.
-34-
Exhibit 4
(Continued)
$ (780,637)
(24,800)
2,039,998
$32,166,415
Exhibit 5
CITY OF PADUCAH, KENTUCKY
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2004
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 (deficiency) of revenues over expenditures
Other Financing Sources (Uses):
Long-term debt issued
Transfers in
Transfers out
Total other financing sources (uses)
Net change in fund balances
Fund balances, July 1, 2003
Adjustment to beginning fund balance
FUND BALANCES, JUNE 30, 2004
3,891,251 - -
11,750,018 - -
5,582,006 - -
1,026,297 - -
2,343,844 - -
- 4,063,505 6,923,679
24,593,416 4,063,505 6,923,679
2,880,394 (2,665,996) (6,538,245)
-
General
Downtown
General
Capital
Capital
Fund
Improvements
Improvements
$ 5,205,422
$ -
$ -
18,423,244
-
-
569,320
-
-
-
48,036
-
635,525
926,120
-
118,566
627
49,084
2,521,733
422,726
336,350 -
27,473,810
1,397,509
385,434
3,891,251 - -
11,750,018 - -
5,582,006 - -
1,026,297 - -
2,343,844 - -
- 4,063,505 6,923,679
24,593,416 4,063,505 6,923,679
2,880,394 (2,665,996) (6,538,245)
-
-
8,500,000
3,282
2,820,567
-
(3,167,585)
-
(1,813,524)
(3,164,303)
2,820,567
6,686,476
(283,909)
154,571
148,231
4,925,982
583,589
3,000,000
$ 4,642,073
$ 738,160
$ 3,148,231
See accompanying notes to the basic financial statements.
-35-
Nonmajor
Total
Governmental
Governmental
Funds
Funds
$ 665,807
$ 5,871,229
-
18,423,244
99,339
668,659
981,271
1,029,307
2,441,076
4,002,721
22,073
190,350
500,225
3,781,034
4,709,791
33,966,544
-
3,891,251
1,213,667
12,963,685
1,332,517
6,914,523
-
1,026,297
2,570,473
2,570,473
-
2,343,844
-
10,987,184
428,613
428,613
471,625
471,625
6,016,895
41,597,495
(1,307,104)
(7,630,951)
-
8,500,000
1,115,339
3,939,188
(314,467)
(5,295,576)
-- 800,872
7,143,612
(506,232)
(487,339)
1,821,307
10,330,878
(30,956)
(30,956)
$1,284,119
$ 9,812,583
-36-
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, 2004
Net change in fund balances - total governmental funds $ (487,339)
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. 264,120
Inventory sales provide current financial resources and are reported
as revenues in governmental funds. (51,558)
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. 6,068,511
The loss on disposal of capital assets is not recorded in the
governmental funds because the assets were recorded as
expenditures when purchased. (216)
Interest revenue on the long-term note receivable is not reported on
the governmental funds since neither the note receivable nor the
interest is available to pay current period expenditures. 12,451
Delinquent property taxes receivable are not considered "available"
revenues in the governmental funds. (94,922)
Governmental funds report contributions of buildings and
infrastructure as revenue and expense. However, in the Statement of
Activities, the value of the assets is allocated over their estimated
useful life as depreciation expense. 1,840,000
The prepayment of a pension obligation requires the use of current
financial resources and, therefore, is reported as an expenditure in
governmental funds. However, the prepayment does not affect net
assets in the government -wide Statement of Activities. 212,055
(Continued)
-37-
Exhibit 6
(Continued)
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, 2004
The issuance of long-term debt provides current financial resources
to governmental funds and is reported as a revenue in governmental
- funds. However, the proceeds do not affect net assets in the
government -wide Statement of Net Assets. $ (8,500,000)
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 an expenditure in
governmental funds. This amount includes Internal Service Funds'
depreciation expense of $410,068. (2,853,770)
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 Activities. 318,613
Accrued interest payments on debt do not require the use of current
financial resources. Accrued interest is reported as an expenditure in
the government -wide statement of activities. (24,800)
Long-term accrued compensated absences do not require the use of
current financial resources and, therefore, are not reported as
- expenditures in governmental funds. (11,078)
Governmental funds report the effect of bond issuance costs when
debt is issued, whereas these amounts are deferred and amortized in
the statement of activities. Includes amortization expense of $3,192. 145,411
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 $1,215,437
Net of amount allocated to
business -type activities (89,926)
Depreciation expense 410,068 1,535,579
CHANGE IN NET ASSETS OF GOVERNMENTAL ACTIVITIES $ (1,626,943)
See accompanying notes to the basic financial statements.
-38-
Exhibit 7
CITY OF PADUCAH, KENTUCKY
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
JUNE 30, 2004
NET ASSETS
Invested in capital assets,
net of related debt 1,125,481 338,187 1,463,668
Unrestricted 1,914,969 70,529 1,985,498
TOTAL NET ASSETS $3,040,450 $408,716 3,449,166
Reconciliation to government -wide statements of net assets:
Adjustment to reflect the consolidation of Internal Service Funds'
activities related to Enterprise Funds (6,004)
NET ASSETS OF BUSINESS -TYPE ACTIVITIES $3,443,162
See accompanying notes to the basic financial statements.
-39-
1,648,369
1 00K '207
$3,644,761 -
Governmental
Business
-type Activities
Activities
ASSETS
Nonmajor
Internal
Solid
Enterprise
Service
Current Assets:
Waste
Funds
Totals
Funds
Cash and cash equivalents
$ 904,874
$ 38,888
$ 943,762
$ 870,903
Investments
1,200,000
-
1,200,000
1,300,000
Accounts receivable
28,530
27,006
55,536
-
Interest receivable
5,568
-
5,568
146,233
Prepaid expenses
-
6,994
6,994
1,015,142
Inventory
-
-
-
98,115
Total current assets
2,138,972
72,888
2,211,860
3,430,393
Noncurrent Assets:
Net capital assets:
Land
65,908
-
65,908
-
Depreciable capital assets
1,059,574
338,187
1,397,761
1,648,369
Total noncurrent assets
1,125,482
338,187
1,463,669
1,648,369
Total assets
3,264,454
411,075
3,675,529
5,078,762
LIABILITIES
Current Liabilities:
Voucher and accounts payable
127,209
2,359
129,568
364,583
Accrued payroll and payroll taxes
31,608
-
31,608
9,101
Accrued compensated absences
51,185
-
51,185
24,374
Due to other funds
-
-
-
998,341
Total current liabilities
210,002
2,359
212,361
1,396,399
Noncurrent Liabilities:
Accrued compensated absences
14,002
-
14,002
37,602
Total liabilities
224,004
2,359
226,363
1,434,001
NET ASSETS
Invested in capital assets,
net of related debt 1,125,481 338,187 1,463,668
Unrestricted 1,914,969 70,529 1,985,498
TOTAL NET ASSETS $3,040,450 $408,716 3,449,166
Reconciliation to government -wide statements of net assets:
Adjustment to reflect the consolidation of Internal Service Funds'
activities related to Enterprise Funds (6,004)
NET ASSETS OF BUSINESS -TYPE ACTIVITIES $3,443,162
See accompanying notes to the basic financial statements.
-39-
1,648,369
1 00K '207
$3,644,761 -
CITY OF PADUCAH, KENTUCKY
STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN FUND NET ASSETS
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2004
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
Contributions and Operating Transfers:
Capital contributions
Transfers in
Transfers out
Total contributions and operating transfers
Change in net assets
Total net assets, July 1, 2003
TOTAL NET ASSETS - JUNE 30, 2004
Exhibit 8
32,617 209 32,826
34,975 - 34,975
67,592 209 67,801
18,129
(1,972)
1L 1 C 7
126,258 142,171 268,429 619,006
-
24,990
24,990
Governmental
Business -type Activities
Activities
(3,282)
Nonmajor
(225,358)
Internal
Solid
Enterprise
345,052
Service
Waste
Funds
Totals
Funds
$3,463,958
$359,309
$3,823,267
$4,529,915
-
-
-
501,809
14,172
-
14,172
-
3,478,130
359,309
3,837,439
5,031,724
3,129,575
140,017
3,269,592
4,018,807
289,889
77,330
367,219
410,068
3,419,464
217,347
3,636,811
4,428,875
58,666
141,962
200,628
602,849
32,617 209 32,826
34,975 - 34,975
67,592 209 67,801
18,129
(1,972)
1L 1 C 7
126,258 142,171 268,429 619,006
-
24,990
24,990
222,076
72,246
294,322
(3,282)
(222,076)
(225,358)
218,794
(124,840)
93,954
345,052
17,331
362,383
2,695,398 391,385
$3,040,450 $408,716
Reconciliation to government -wide statements of net assets:
Adjustment to reflect the consolidation of Internal Service Funds'
activities related to Enterprise Funds 89,926
CHANGE IN NET ASSETS OF BUSINESS -TYPE ACTIVITIES $ 452,309
See accompanying notes to the basic financial statements.
-40-
596,431
CnL A71
1,215,437
2,429,324
$3,644,761
CITY OF PADUCAH, KENTUCKY
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2004
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
Purchase of capital assets
Proceeds from sale of capital assets
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, 2003
CASH AND CASH EQUIVALENTS,
JUNE 30, 2004
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.
-41-
Exhibit Q
Governmental
Business -type Activities Activities
Nonmajor Internal
Solid Enterprise Service
Waste Funds Totals Funds
$ 3,440,728 $332,304 $ 3,773,032 $ 5,144,721
(2,130,618) -
(2,130,618)
(789,579) -
(789,579)
(174,524) -
(174,524)
14,073 (360,839)
(346,766)
360,080 (28,535)
331,545
222,076 (149,830) 72,246
(208,108)
(206,830)
(2,990,822
(1,076,335)
662,626
596,431
-
24,990
24,990
-
(352,718)
(64,106)
(416,824)
(581,525
43,381
-
43,381
12,836
(309,337)
(39,116)
(348,453)
(568,689,.
1,636,997
-
1,636,997
743,333
32,617
209
32,826
15,491
(1,204,071)
-
(1,204,071)
(1,304,232)
465,543
209
465,752
(545,408,
738,362
(217,272)
521,090
144,960
166,512
256,160
422,672
725,943
$ 904,874 $ 38,888 $ 943,762 $ 870,903
$ 58,666 $141,962 $ 200,628
289,889 77,330 367,219
$ 602,845
410,06f
(23,329) (27,006) (50,335) 112,996
(6,994) (6,994) (1,015,14:
- - - 34,751..-..
34,854 (213,827) (178,973) 517,097
$ 360,080 $ (28,535) $ 331,545 $ 662,626--
CITY OF PADUCAH, KENTUCKY
STATEMENT OF NET ASSETS
FIDUCIARY FUNDS
JUNE 30, 2004
ASSETS
Cash and cash equivalents
Receivables:
Interest
Other
Investments at fair value
Total assets
LIABILITIES
Voucher and accounts payable
Payroll taxes and withholdings
payable
Total liabilities
NET ASSETS
Held in trust for pension benefits
and other purposes
See accompanying notes to the basic financial statements
-42-
Exhibit 10
Primary Government
Private -
Pension
purpose Agency
Funds
Trusts Funds
$ 353,580
$ 2,825 $306,560
64,151
- -
1,425
- -
9,257,586
77,651 -
9,676,742
80,476 $306,560
823 - $ -
- - 306,560
823 - $306,560
$9,675,919 $80,476
Exhibit 11
CITY OF PADUCAH, KENTUCKY
STATEMENT OF CHANGES IN NET ASSETS
FIDUCIARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2004
See accompanying notes to the basic financial statements.
-43-
Private- _
Pension
purpose
Additions:
Funds
Trusts
Contributions:
Employer
$ 195,962
$ -
Plan members
27,355
-
Intergovernmental revenues
-
9,235
Private donations
-
675,000
Total contributions
223,317
684,235
Investment income:
Net increase (decrease) in
fair value of investments
607,613
(217)
Interest and dividends
270,310
2,912
Net investment income
877,923
2,695
Interfund transfers
690,992
1
Total additions
1,792,232
686,931
Deductions:
Benefits
1,849,974
-
Capital outlay
-
679,493
Administrative expenses
54,433
2,457
Total deductions
1,904,407
681,950
Change in net assets
(112,175)
4,981
Net assets, July 1, 2003
9,788,094
75,495
NET ASSETS, JUNE 30, 2004
$9,675,919
$ 80,476
See accompanying notes to the basic financial statements.
-43-
CITY OF PADUCAH, KENTUCKY
BASIC FINANCIAL STATEMENTS
COMPONENT UNITS FINANCIAL STATEMENTS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2004
THIS PAGE INTENTIONALLY LEFT BLANK
CITY OF PADUCAH, KENTUCKY
STATEMENT OF NET ASSETS
COMPONENT UNITS
JUNE 30, 2004
ASSETS
Current Assets:
Cash and cash equivalents
Receivables, net:
Accounts
Grants
Other
Inventories
Prepaid expenses
Other current assets
Total current assets
Noncurrent Assets:
Investments, restricted
Net capital assets:
Land and construction in progress
Depreciable capital assets
Restricted assets
Other assets
Total noncurrent assets
Total assets
Paducah
Water
336,441
627,370
351,682
835,889
3,341,719
Paducah Paducah
Power
Transit
System
Authority
$ 229,422
$ 176,868
2,446,431
46,710
-
190,065
579,427
4,764
998,920
15,747
39,231
-
2,561,030 2,919,633
- 3,155,682
30,568,317 36,377,984
69,111 -
- 116,329
.. .. ,.�., .rn An min inn
36,540,177
-44-
Exhibit 12
All
Component
Unit
2,829,582
190,065
1,211,561
1,366,349
39,231
434,154 8,069,304
5,480,663
472,526 3,628,208
4,205,705 71,152,006
- 69,111
4,678,231 80,446,317
5,112,385 88,515,621
LIABILITIES
Current Liabilities:
Voucher and accounts payable
Accrued payroll and payroll taxes
Unearned revenue
Accrued compensated absences
Accrued interest
Notes payable due within one year
Bonds payable due within one year
Other current liabilities
Total current liabilities
Noncurrent Liabilities:
Bonds payable
Notes payable
Total noncurrent liabilities
Total liabilities
NET ASSETS
Net Assets:
Invested in capital assets,
net of related debt
Restricted for:
Capital projects
Unrestricted
TOTAL NET ASSETS
25,913,758 34,054,660
4,675,864 64,644,282
- 1,113,399
All
Paducah
Paducah
Paducah
Component
Water
Power
Transit
Unit
Works
System
Authority
Totals
$ 369,864
$ 3,424,532
$ 38,294
$ 3,832,690
-
404,006
101,357
505,363
-
1,379,222
-
1,379,222
-
-
26,956
26,956
-
161,023
-
161,023
29,182
-
-
29,182
870,000
345,000
-
1,215,000
972,739
875,504
2,367
1,850,610
2,241,785
6,589,287
168,974
9,000,046
3,578,947
5,121,223
385,451
9,085,621
275,025
-
-
275,025
3,853,972
5,121,223
385,451
9,360,646
6,095,757
11,710,510
554,425
18,360,692
25,913,758 34,054,660
4,675,864 64,644,282
- 1,113,399
- 1,113,399
4,530,662 (15,510)
(117,904) 4,397,248
$30,444,420 $35,152,549
$4,557,960 $70,154,929
See accompanying notes to the basic financial statements
-45-
CITY OF PADUCAH, KENTUCKY
STATEMENT OF ACTIVITIES
COMPONENT UNITS
FOR THE YEAR ENDED JUNE 30, 2004
FUNCTIONS/PROGRAMS
Authorities:
Business -type activities:
Paducah Water Works
Paducah Power System
Paducah Transit Authority
TOTAL COMPONENT UNITS
General Revenues:
Unrestricted investment earnings
Rent income
Miscellaneous general
Total general revenues and transfers
Change in net assets
Net assets, July 1, 2003
NET ASSETS, JUNE 30, 2004
Exhibit 13
See accompanying notes to the basic financial statements
-46-
Program Revenues
Operating
Capital
Charges for
Grants and
Grants and
Expenses
Services
Contributions
Contributions
$ 5,950,078
$ 6,141,550
$ -
$ 416,757
39,969,207
40,438,080
-
-
5,849,879
2,883,911
2,339,780
1,226,325
$51,769,164
$49,463,541
$2,339,780
$1,643,082
See accompanying notes to the basic financial statements
-46-
Net (Expense) Revenue and Changes in Net Assets
Paducah
Paducah
Paducah
Water
Power
Transit
Works
System
Authority
Totals
$ 608,229
$ -
$ -
$ 608,229
-
468,873
-
468,873
-
-
600,137
600,137
608,229
468,873
600,137
1,677,239
53,929
33,672
1,245
88,846
-
-
13,900
13,900
4,388
15,922
954
21,264
58,317
49,594
16,099
124,010
666,546
518,467
616,236
1,801,249
29,777,874
34,634,082
3,941,724
68,353,680
$30,444,420
$35,152,549
$4,557,960
$70,154,929
-47-
CITY OF PADUCAH, KENTUCKY
NOTES TO THE FINANCIAL STATEMENTS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2004
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2004
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. 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' Pension 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.
(Continued)
-48-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2004
Note 1 - Summary of Significant Accounting Policies:
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.
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.
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.
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
Related Organizations
Paducah Power System
1500 Broadway
Paducah, Kentucky 42001
Transit Authority of the
City of Paducah
850 Harrison Street
Paducah, Kentucky 42001
City officials are also responsible for appointing the members of boards of other organizations, but the
City's accountability for these organizations do 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.
Forest Hills Village, Inc. — The Corporation's 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. Forest Hills Village, Inc. 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.
Paducah Junior College, Incorporated (PJC) — 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. PJC 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.
(Continued)
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2004
Note 1 - Summary of Significant Account Policies:
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:
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.
(Continued)
-50-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2004
Note 1 - Summary of Significant Account Policies:
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
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.
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.
b. 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.
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.
In the fund financial statements, governmental 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. Agency funds are presented using the accrual basis of
accounting.
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.
(Continued)
-51-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2004
Note 1 - Summary of Significant Account Policies:
Revenues - Exchange and Non -Exchange Transactions
Revenue resulting from exchange transactions, in which each party gives and receives essentially equal
value, is recorded on the accrual basis when the exchange takes place. On a modified accrual basis,
revenue is recorded in the fiscal year in which the resources are measurable and become available.
Available means that the resources will be collected within the current fiscal year or are expected to be
collected soon enough thereafter to be used to pay liabilities of the current fiscal year. For the City,
available means expected to be received within sixty days of year end.
Non-exchange transactions, in which the City receives value without directly giving equal value in return,
include employee license taxes, property taxes, grants, entitlements and donations. The City considers
- property taxes as available if they are collected within sixty days after year end. Revenue from grants,
entitlements, and donations is recognized in the year in which all eligibility requirements have been
satisfied. Eligibility requirements include timing requirements, which specify the year when the resources
are required to be used or the year when use is first permitted, matching requirements, in which the City
must provide local resources to be used for a specified purpose, and expenditure requirements, in which
the resources are provided to the City on a reimbursement basis. On a modified accrual basis, revenue
from non-exchange transactions must also be available before it can be recognized.
The 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.
Unearned revenue
The City reports unearned revenue on its statement of net assets. Unearned revenues arise when potential
revenue does not meet both the "measurable" and "available" criteria for recognition in the current period.
Unearned 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 unearned 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.
(Continued)
-52-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2004
Note 1 - Summary of Sil!nilicant Accounting Policies:
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).
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, 2004.
Cash and Investments
For the purpose of the Statement of Net Assets, "cash and cash equivalents" includes all demand and
savings accounts 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 general obligation notes 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 sixty 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)
-53-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2004
Note I - 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, 2004.
Assets capitalized have an original cost of $500 or more prior to July 1, 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)
-54-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2004
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 is 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.
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)
-55-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2004
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.
Program Revenues
Amounts reported as program revenues include 1) charges to customers or applicants for goods, services,
or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions,
including special assessments. Internally dedicated resources are reported as general revenues rather than
as program revenues. Likewise, general revenues include all taxes.
Operating and Non -Operating Revenues and Expenses — Proprietary Funds
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. Operating expenses for the
enterprise and internal service funds include the cost of sales and services, administrative expenses, and
depreciation on capital assets. All revenues and expenses not meeting this definition are reported as
nonoperating revenues and expenses.
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.
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.
(Continued)
-56-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2004
Note 1- Summary of Significant Accounting Policies:
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.
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.
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
Legal Restrictions of Use
Kentucky Police Incentive Grant
Salaries
Kentucky Fire Incentive Grant
Salaries
HOME Investment Partnerships Grant
Construction of Low-income
Rental Units
Emergency Communication Revenue
E-911 Emergency Services
County Bed Tax
Debt Obligations
Kentucky Transportation Cabinet
Street Repairs and Maintenance
Kentucky Housing Corporation
Facade Loans
Other Grants
Grant Program Expenditures
For the year ended June 30, 2004, the City complied, in all material respects, with these revenue
restrictions.
Debt Restrictions and Covenants
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, 2004, the City
incurred no such indebtedness.
Note 2 — Property Taxes:
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 unearned revenue. Property tax revenues are recognized during the period for
which they are levied.
(Continued)
-57-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2004
Note 2 - Property Taxes:
The due dates and collection period for all property taxes, exclusive of vehicle taxes, for the fiscal year
ended June 30, 2004, are as follows:
Description Date
Assessment and enforceable lien January 1, 2003
Levy October 7, 2003
Face value amount payment dates ls` half by November 1, 2003
2°d half by February 1, 2004
Delinquent date - 10% penalty
plus 1/2% per month ls` half - November 30, 2003
2°a half - February 29, 2004
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 $8,697,848 and the bank balance was
$9,496,736. These balances include $345,411 of trust and agency fund cash not included in the
government -wide statements. The balances below also include bank certificates of deposit of $5,550,000,
including $550,000 of agency fund certificates of deposit not included in the government -wide statements
and $5,000,000 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 $ 500,000
Amount collateralized with securities held by the
pledging institution's agent in the City's name 14,496,736
Amount uncollateralized 50,000
TOTAL BANK BALANCE 15.046.736
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)
-58-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2004
Note 3 - Detail Notes on Transaction Classes/Accounts:
5. Deposit accounts with banking institutions;
6. State treasurer investment pool.
The Police and Firefighters' Pension 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
Category
1 2 3
$2,851,936-
42,289 - -
1,645,813
4 540 038 � �
Investment in mutual funds
TOTAL INVESTMENTS (excluding $5,000,000
of bank CD's)
Carrying
Fair
Amount
Value
$ 2,851,936
$ 2,851,936
42,289
42,289
1,645,813
1,645,813
4,540,038
4,540,038
6,219,403
6,219,403
10.759.441 $10.759.441
The above amounts include $8,785,237 of fiduciary fund investments not included in the government -wide
financial statements, but do not include $550,000 of fiduciary fund bank CD's.
Investments of the discretely presented component units are classified as follows:
Investment in mutual funds and money markets
TOTAL INVESTMENTS (excluding $3,443,769
of bank CD's and savings accounts)
-59-
Carrying Fair
Amount Value
$ 2,036,894 $ 2,036,894
2.036.894 $2,036,894
(Continued)
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2004
Note 3 - Detail Notes on Transaction Classes/Accounts:
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, 2004, was as follows:
Balance
Balance
Governmental Activities:
July 1, 2003
Increases
Decreases
June 30, 2004
Capital assets, not being depreciated:
Land
$ 5,084,335
$ 336,350
$ -
$ 5,420,685
Construction -in -progress
2,988,191
1,719,363
2,988,191
1,719,363
Total capital assets, not being
depreciated
8,072,526
2,055,713
2,988,191
7,140,048
Capital assets, being depreciated:
Land improvements
950,000
55,955
-
1,005,955
Buildings and improvements
13,119,697
751,660
-
13,871,357
Infrastructure
21,760,735
6,185,597
-
27,946,332
Equipment
5,808,004
121,926
46,390
5,883,540
Furnishings and fixtures
237,285
-
4,300
232,985
Vehicles
6,508,552
686,429
821,444
6,373,537
Total capital assets, being
depreciated
48,384,273
7,801,567
872,134
55,313,706
- Less accumulated depreciation:
Land improvements
950,000
2,453
-
952,453
Buildings and improvements
10,022,715
202,925
-
10,225,640
Infrastructure
7,518,031
1,823,730
-
9,341,761
Equipment
4,775,016
329,294
46,172
5,058,138
Furnishings and fixtures
231,598
3,932
4,300
231,230
Vehicles
4,923,775
557,009
773,794
4,706,990
Total accumulated depreciation
28,421,135
2,919,343
824,266
30,516,212
Total capital assets, being
depreciated, net
19,963,138
4,882,224
47,868
24,797,494
GOVERNMENTAL ACTIVITIES
CAPITAL ASSETS, NET
$6,937,937
$31,937,542
The increases in accumulated depreciation
for governmental funds include $65,573
in prior year
accumulated depreciation on capital assets transferred from business
-type activities.
(Continued)
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2004
Note 3 - Detail Notes on Transaction Classes/Accounts:
(Continued)
-61-
Balance
Balance
Business -type Activities:
July 1, 2003
Increases
Decreases
June 30, 2004
Capital assets, not being depreciated:
Land
$ 65,908
$ -
$ -
65,908
Capital assets, being depreciated:
Buildings and improvements
324,882
20,901
-
345,783
Equipment
1,996,135
64,107
-
2,060,242
Vehicles
1,905,498
331,818
239,680
1,997,636
Total capital assets, being
depreciated
4,226,515
416,826
239,680
4,403,661
Less accumulated depreciation:
Buildings and improvements
141,027
10,417
-
151,444
Equipment
1,619,777
152,144
-
1,771,921
Vehicles
1,105,866
204,658
227,989
1,082,535
Total accumulated depreciation
2,866,670
367,219
227,989
3,005,900
Total capital assets, being
depreciated, net
1,359,845
49,607
11,691
1,397,761
BUSINESS -TYPE ACTIVITIES
CAPITAL ASSETS, NET
1 425 753
49 607
11 691
1 463 669
Depreciation expense was charged to governmental activities
as follows:
General government:
General administration
$ 82,043
Finance
2,505
Planning
11,107
Human rights
862
Personnel
1,188
Information systems
16,602
Fleet maintenance
11,408
Total general government
125,715
Public safety:
Police
41,333
Fire
124,095
Grants
149,670
Emergency 911
21,757
Court awards
19,757
Fleet Lease Trust
398,660
Total public safety
755,272
Public service:
Public works
77,392
Engineering
11,095
Total public service
88,487
(Continued)
-61-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2004
Note 3 - Detail Notes on Transaction Classes/Accounts:
Parks and recreation $ 51,297
Planning and development:
Infrastructure 1,823,730
Grants 9,269
Total planning and development 1,832,999
TOTAL DEPRECIATION EXPENSE —
GOVERNMENTAL ACTIVITIES $2,853,770
Depreciation expense was charged to business -type activities as follows:
Solid Waste Fund $ 289,889
Civic Center 8,173
TISA Fund 69,157
TOTAL DEPRECIATION EXPENSE —
BUSINESS -TYPE ACTIVITIES
367 219
Balance
Balance
_.._ Discretely Presented
July 1, 2003
Increases
Decreases
June 30, 2004
Component Units:
Capital assets, not being depreciated:
Land
$ 1,644,512
$ 333,395
$ 87,028
$ 1,890,879
Construction -in -progress
797,763
3,261,060
2,321,494
1,737,329
Total capital assets, not being
-- depreciated
2,442,275
3,594,455
2,408,522
3,628,208
Capital assets, being depreciated:
Buildings and improvements
19,513,178
339,532
18,184,484
1,668,226
Equipment
5,206,041
1,568,176
2,470,523
4,303,694
Utility plant
108,410,804
5,063,913
740,745
112,733,972
- Total capital assets, being
depreciated
133,130,023
6,971,621
21,395,752
118,705,892
Less accumulated depreciation:
Buildings and improvements
2,926,276
101,012
2,808,142
219,146
Equipment
2,211,011
438,466
1,102,408
1,547,069
Utility plant
43,008,825
3,454,202
675,356
45,787,671
Total accumulated depreciation
48,146,112
3,993,680
4,585,906
47,553,886
Total capital assets, being
depreciated, net
84,983,911
2,977,941
16,809,846
71,152,006
COMPONENT UNIT
CAPITAL ASSETS, NET
87,426,186
$6,572,396
$19,218,368
74,780,214
(Continued)
-62-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2004
Note 3 - Detail Notes on Transaction Classes/Accounts:
The decreases in component units include $20,469,118 in capital assets and $3,687,879 in accumulated
depreciation related to prior year component units that are no longer component units of the City of
Paducah.
Depreciation expense, charged to functions/programs of discretely presented major component units as
follows:
Paducah Water Works $ 1,216,550
Paducah Power System 2,237,652
Paducah Transit Authority 539,478
TOTAL DEPRECIATION EXPENSE BY ACTIVITY3.993.680
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, 2004, the governmental long-term debt consisted of the following:
General obligation bonds:
Current portion $ 400,000
Noncurrent portion 13,220,000
TOTAL GENERAL OBLIGATION
BOND COSTS $13,620,000
Note payable:
Current portion $ 133,359
Noncurrent portion 3,295,496
TOTAL NOTE PAYABLE PAYMENTS3.428.855
Accrued compensated absences:
Current portion $ 370,130
Noncurrent portion 1,374,274
TOTAL ACCRUED COMPENSATED
ABSENCES $ 1.744.404
(Continued)
-63-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2004
Note 3 - Detail Notes on Transaction Classes/Accounts:
Business -type Activities
As of June 30, 2004, the long-term debt payable from proprietary fund resources consisted of the
following:
Accrued compensated absences:
Current portion $51,185
Noncurrent portion 14,002
TOTAL ACCRUED COMPENSATED
ABSENCES 65 187
General Obligation Bonds
Series 2001 Bond Issue - 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 Agreement
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.
Series 2004 Bond Issue - The City of Paducah issued general obligation bonds of $5,000,000 in June,
2004, to finance construction of the new Infiniti Media Building. Interest rates range from 2.25% to 6%.
These bonds are required to be fully paid within 20 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 a Capital Sublease Agreement
between McCracken County, Kentucky (the County) and Infiniti Plastic Technologies, Inc., principal and
interest payments prior to June 1, 2007, on the bonds are being split evenly between the City and the
County. After June 1, 2007, The County will pay 2.031% of the bond payments with the remaining
amount being made from Infiniti's lease payments.
Notes Payable
Kentucky League of Cities - On July 1, 2003, the City entered into an agreement in the amount of
$3,500,000 with the Kentucky League of Cities to finance the acquisition and installation of various public
projects. Interest is charged at a rate of approximately 2.98%. The note is required to be fully paid within
20 years from the date of issue and is backed by the full faith and credit of the City.
(Continued)
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2004
Note 3 - Detail Notes on Transaction Classes/Accounts:
Paducah Bank - On April 1, 2003, the City entered into a note for up to $70,000 with Paducah Bank &
Trust Company to help finance the purchase of property located at 233 North 6th Street, which is part of the
LowerTown property acquired for resell. Interest is charged at a rate of 3.25% with the full amount of the
note due to be paid in a lump sum on April 1, 2006.
Changes in Long -Term Debt
The following is a summary of changes in long-term debt for the year ended June 30, 2004:
Amounts
Ending Due within
Reductions Balance One Year
$230,000 $ 8,620,000 $240,000
- 5,000,000 160,000
79,825 - -
118,789 3,381,211 133,359
- 47,644 -
333,029 1,744,404 370,130
TOTAL GENERAL LONG-
TERM DEBT 10.622.534 8 932 368 761 643 18.793.259 903 489
Business -type activities:
Accrued compensated
absences $ 64,833 46,516 46 162 $ 65,187 51 185
Annual Debt Service Requirements
The annual debt service requirements to maturity,
Beginning
absences, for general long-term debt as of June 30, 2004, are as follows:
Type of Debt:
Balance
Additions
Governmental activities:
June 30
Principal
General obligation bonds:
2005
$ 533,359
Convention and Arts Center $ 8,850,000
$ -
Infiniti Media Building
-
5,000,000
Capital lease
79,825
-
Notes payable:
712,329
2009
Kentucky League of Cities
-
3,500,000
Paducah Bank
-
47,644
Accrued compensated
2,200,361
2020-2024
absences
1,692,709
384,724
Amounts
Ending Due within
Reductions Balance One Year
$230,000 $ 8,620,000 $240,000
- 5,000,000 160,000
79,825 - -
118,789 3,381,211 133,359
- 47,644 -
333,029 1,744,404 370,130
TOTAL GENERAL LONG-
TERM DEBT 10.622.534 8 932 368 761 643 18.793.259 903 489
Business -type activities:
Accrued compensated
absences $ 64,833 46,516 46 162 $ 65,187 51 185
Annual Debt Service Requirements
The annual debt service requirements to maturity,
excluding obligations associated with compensated
absences, for general long-term debt as of June 30, 2004, are as follows:
Year Ending
June 30
Principal
Interest
2005
$ 533,359
$ 764,531
2006
595,055
750,642
2007
566,585
732,677
2008
590,887
712,329
2009
610,319
689,772
2010-2014
3,442,940
3,047,839
2015-2019
4,305,782
2,200,361
2020-2024
5,203,928
1,079,835
2025-2026
1,200,000
90,750
TOTALS
$17,048,855
$10,068,736
(Continued)
-65-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2004
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, 2004, are as
follows:
Interfund Transactions and Balances
Interfund transfers during the year ended June 30, 2004, were as follows:
Governmental
Business -type
Governmental Funds:
Activities
Activities
Accrued sick leave
$ 766,820
$16,960
Accrued vacation leave
853,620
43,594
Applicable payroll taxes
123,964
4,633
Totals
1,744,404
65,187
Less current portion
370,130
51,185
LONG-TERM PORTION
1 374 274
14 002
Interfund Transactions and Balances
Interfund transfers during the year ended June 30, 2004, were as follows:
Proprietary Funds:
Solid Waste Fund 222,076 3,282
Nonmajor Proprietary Funds 72,246 222,076
TOTALS 5 520 934 5 520 934
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, 2004:
General Fund
Nonmajor Governmental Funds
Internal Service Funds
TOTALS
Due From Due To
$1,047,746 $ -
49,405
- 998,341
1,047,746$1,047,746
(Continued)
Interfund
Interfund
Governmental Funds:
Transfers In
Transfers Out
General Fund
$ 3,282
$3,167,585
Capital Project Fund
2,820,567
-
Downtown Capital Project Fund
-
1,813,524
Nonmajor Governmental Funds
1,115,339
314,467
Internal Service Funds
596,431
-
Fiduciary Funds:
Appointive Employee Pension Fund
75,553
-
Police and Firefighters' Pension Fund
615,439
-
Oak Grove Cemetery Trust Fund
1
-
Proprietary Funds:
Solid Waste Fund 222,076 3,282
Nonmajor Proprietary Funds 72,246 222,076
TOTALS 5 520 934 5 520 934
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, 2004:
General Fund
Nonmajor Governmental Funds
Internal Service Funds
TOTALS
Due From Due To
$1,047,746 $ -
49,405
- 998,341
1,047,746$1,047,746
(Continued)
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2004
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:
Year Ended
Component June 30, 2004
Beginning NPO balance $ -
ARC 811,401
Pension cost 811,401
Less actual contribution 811,401
Net change in NPO
ENDING NPO BALANCE $
PERCENTAGE OF PENSION
COST CONTRIBUTED 100%
-67-
Year Ended Year Ended
June 30, 2003 June 30, 2002
645,773 806,632
645,773 806,632
645,773 806,632
100% 100%
(Continued)
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2004
Note 4 - Pension Plans - City of Paducah:
The financial statements for the Police and Firefighters' Pension Fund are as follows:
Statement of Fiduciary Net Assets
Police and Firefighters' Retirement Fund
June 30, 2004
Assets:
Cash and cash equivalents $ 330,591
Receivables 64,770
Investment at fair value 8,957,586
Total assets 9,352,947
Liabilities:
Voucher and accounts payable 648
Net Assets:
Held in trust for pension benefits and
other purposes $9,352,299
Statement of Changes in Net Assets
Police and Firefighters' Retirement Fund
For the Year Ended June 30, 2004
Additions:
Employer contributions
$ 195,962
Plan members' contributions
27,355
Total contributions
223,317
Investment earnings:
Net increase in fair value of investments
607,613
Interest and dividends
265,306
Net investment earnings
872,919
Interfund transfers
615,439
Total additions
1,711,675
Deductions:
Benefits
1,773,398
Administrative expenses
46,698
Total deductions
1,820,096
Change in net assets
(108,421)
Net assets, July 1, 2003
9,460,720
NET ASSETS, JUNE 30, 2004
U 352 299
(Continued)
-68-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2004
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, 2004. 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
Assets:
Year Ended
Year Ended
Year Ended
June 30, 2004
June 30, 2003
June 30, 2002
$(198,365)
$086,170)
$ 182 940)
48,339
50,112
59,297
(11,902)
(11,170)
(10,976)
25,426
23,863
23,449
61,863
62,805
71,770
75,553
75,000
75,000
(13,690)
(12,195)
(3,230)
212 055)
$(198,365)
186170
COST CONTRIBUTED 122% 120% 105%
Statement of Fiduciary Net Assets
Appointive Employees' Pension Fund
June 30, 2004
Cash and cash equivalents $ 22,989
Receivables 806
Investment at fair value 300,000
Total assets 323,795
Liabilities:
Voucher and accounts payable 175
Net Assets:
Held in trust for pension benefits and
other purposes M3,620
(Continued)
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2004
Note 4 - Pension Plans - City of Paducah:
Statement of Changes in Net Assets
Appointive Employees' Pension Fund
For the Year Ended June 30, 2004
Additions:
Interest and dividends
$ 5,004
Interfund transfers
75,553
Total additions
80,557
Deductions:
Benefits
76,576
Administrative expenses
7,735
Total deductions
84,311
Change in net assets
(3,754)
Net assets, July 1, 2003
327,374
NET ASSETS, JUNE 30, 2004
S323,620
Contribution Information
A summary of actuarial assumptions at June 30, 2004, the date of the latest
actuarial valuation is as
follows:
PFPF
AEPF
Valuation date 7/l/04
7/l/04
Actuarial cost method Entry age normal
Aggregate (1)
Amortization method Level dollar closed
Level dollar closed
Remaining amortization period 28 Years
10 Years
Asset valuation method Market value
Market value
Actuarial assumptions:
- Investment rate of return 7.75%
6.0%
Projected salary increases 4.00%
(2)
Inflation rates adjustments 3.27%
(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)
-70-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2004
Note 4 - Pension Plans - City of Paducah:
Membership Information
Membership of each plan consisted of the following at June 30, 2004:
PFPF AEPF
Active participants 6 -
Beneficiaries 43 8
Retired participants 54 4
TOTAL PARTICIPANTS 103 12
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, 2004, 2003 and 2002, the City contributed 7.34%,
6.34%, and 6.41%, respectively, of each nonhazardous employee's creditable compensation and
18.51%, 16.28%, and 16.28%, 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, 2004, 2003 and 2002, were $2,387,011,
$2,104,841, and $2,092,620, respectively, equal to the required contributions for each year.
Note 5 - Budget Deficits:
No departments that adopted budgets annually had excess expenditures over appropriations for the fiscal
year ended June 30, 2004.
Note 6 - Component Unit Long -Term Debt:
Long-term debt of the discretely presented component units consists of the following at June 30, 2004:
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, 2004, the total
bonds that are considered extinguished under an in -substance defeasance (refund) are $11,790,000. 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.
(Continued)
-71-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2004
Note 6 - Component Unit Long -Term Debt:
The following schedule summarizes the debt service requirements for the Refunding Revenue Bonds,
Series of 1991:
Fiscal Year
2005
2006
2007
2008
2009
Less deferred debit arising
from advanced refunding
TOTALS
(296,053 - (296,053)
$4,448,947
648 715 5 097 662
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, 2004, are as follows:
Year Ending
Total
Debt
Principal
Interest
Service
$ 870,000
$209,790
$1,079,790
905,000
171,510
1,076,510
950,000
131,690
1,081,690
990,000
89,890
1,079,890
1,030,000
45,835
1,075,835
(296,053 - (296,053)
$4,448,947
648 715 5 097 662
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, 2004, are as follows:
Year Ending
June 30
Principal
Interest
Fee (0.2%)
Total
2005
$ 29,182
$12,106
$ 608
$ 41,897
2006
30,066
11,231
550
41,847
2007
30,950
10,329
489
41,768
2008
31,835
9,246
428
41,509
2009
33,603
7,972
183
41,758
2010-2018
148,571
16,101
940
165,612
TOTALS
$304,207
66 985
3 198
374 391
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.
(Continued)
-72-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2004
Note 6 - Component Unit Long -Term Debt:
The following schedule summarizes the remaining debt service requirements for the Paducah Electric
Plant Board 1991 Bond Issue:
TOTALS 1ZAL6.482
Bonds payable totaling $5,466,223 are recorded net of $238,777 unamortized bond discount and advance
refunding deferred charges.
Note 7 - Commitments and Contingencies:
Construction Commitments
The City has on-going contracts for paving materials, equipment, and labor. As of June 30, 2004, the
balance of the contract commitments were $264,993.
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 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.
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.
(Continued)
-73-
Total
Debt
Fiscal Year
Principal
Interest
Service
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
400,000
175,532
575,532
2010-2014
2,260,000
619,560
2,879,560
2015-2018
1,590,000
136,850
1,726,850
TOTALS 1ZAL6.482
Bonds payable totaling $5,466,223 are recorded net of $238,777 unamortized bond discount and advance
refunding deferred charges.
Note 7 - Commitments and Contingencies:
Construction Commitments
The City has on-going contracts for paving materials, equipment, and labor. As of June 30, 2004, the
balance of the contract commitments were $264,993.
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 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.
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.
(Continued)
-73-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2004
- Note 8 - Risk Management and Litigation:
An analysis of claims activity is presented below:
Current Year
Beginning of Claims and Actual Balance at
Fiscal Year Changes in Claim Fiscal
Liability Estimates Payments Year End
1996- 1997 $ - $ 85,326 $ 85,326 $ -
1997 - 1998 - 96,101 96,101 -
1998 - 1999 - 26,457 26,457 -
1999-2000 - 26,455 26,455 -
2000-2001 - 102,380 102,380 -
2001-2002 - 2,879 2,879 -
2002-2003 - 3,277 3,277 -
2003-2004 - 133,383 133,383 -
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
$150,000 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 $350,000 at June 30, 2004.
The analysis of claims activity is presented below:
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
2003-2004 332,000 2,217,067 2,199,067 350,000
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, has
determined to be immaterial to the City's financial position.
Note 9 - Lease Agreements:
The City is 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. 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.
The City is leasing land and a building to Infiniti Media, Incorporated for use by Infiniti Plastic
Technologies, Incorporated for a primary term of 20 years. No rental revenue is collected for the first
three years of the lease term. Rental payments will commence on September 1, 2007, at a monthly
payment of $33,816 and end with the final payment due May 1, 2024. Infiniti Media has the option to
cancel this lease at any time after the sixth year of the lease term.
(Continued)
-74-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2004
Note 9 - Lease Agreements:
The City leases certain other property to various lessees under agreements that have various expiration
dates through June 30, 2079. Rental revenue received from leased property during 2004 totaled $271,292.
The following is an analysis of property leased under these operating leases at June 30, 2004:
Land $ 606,350
Buildings 2,592,613
Equipment 110,126
Total 3,309,089
Less: accumulated depreciation 671,865
NET BOOK VALUE2.637.224
Depreciation expense for the year ended June 30, 2004, on leased property was $20,775.
The following is a schedule of future minimum rental income from operating leases at June 30, 2004:
TOTAL MINIMUM LEASE RECEIPTS7.554.602
Note 10 - Reclassification of Beginning Fund Balance:
A reclassification was made to the following beginning fund balance as follows:
Lease
Paducah Mainstreet, Inc.
Income
2005
$ 216,963
2006
141,973
2007
61,973
2008
398,786
2009
466,419
Future years
6,268,488
TOTAL MINIMUM LEASE RECEIPTS7.554.602
Note 10 - Reclassification of Beginning Fund Balance:
A reclassification was made to the following beginning fund balance as follows:
Beginning net assets for component units were decreased as a result of entities previously considered
component units no longer being component units of the City of Paducah. The beginning net assets
decreased as follows:
Total
Component
Units
June 30, 2003, balance as
previously reported
Section 8
Paducah Mainstreet, Inc.
Housing
June 30, 2003, balance as
(612,002)
previously reported
$ 193,265
Section 8 Housing adjustment
(30,956)
JULY 1, 2003, BALANCE AS
RESTATED
$ 162,309
Beginning net assets for component units were decreased as a result of entities previously considered
component units no longer being component units of the City of Paducah. The beginning net assets
decreased as follows:
Total
Component
Units
June 30, 2003, balance as
previously reported
$ 90,440,239
Paducah Mainstreet, Inc.
(11,769)
Forest Hills Village, Inc.
(612,002)
Edwin J. Paxton Park Golf Course
(467,873)
Paducah Junior College, Inc.
(20,994,915)
JULY 1, 2004, BALANCE AS
RESTATED
68.353.680
-75-
CITY OF PADUCAH, KENTUCKY
REQUIRED SUPPLEMENTARY INFORMATION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2004
Exhibit A-1
CITY OF PADUCAH, KENTUCKY
REQUIRED SUPPLEMENTARY INFORMATION
PENSION TRUST FUNDS SCHEDULES
Schedules of Funding Progress
-76-
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)
7/1/1999
$11,949,160
$16,011,730
$4,062,570 74.6%
$332,825
1220.63%
7/1/2000
11,914,754
15,923,034
4,008,280 74.8
345,500
1160.14
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
7/1/2004
9,352,299
15,204,717
5,852,418 61.5
287,923
2032.63
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.
Schedules of Employer Contributions
_.
PFPF
AEPF
Year
Annual Required
Percent
Annual Required
Percent
Ending
Ended
Contribution
ARC
Contribution
ARC
Net Pension
June 30
(ARC)
Contributed
(ARC)
Contributed
Obligation (NPO)
1999
$593,776
100%
$72,984
103%
$(186,860)
2000
649,274
100
66,716
112
(182,405)
2001
865,026
100
62,029
121
(182,940)
2002
806,632
100
59,297
126
(186,170)
2003
645,773
100
50,112
150
(198,365)
2004
811,401
100
48,339
156
(212,055)
-76-
CITY OF PADUCAH, KENTUCKY
BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS)
GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2004
Beginning budgetary fund balance
Resources (Inflows):
Taxes:
Real and personal,
current year
Real and personal,
prior year
Franchise
Bank taxes
In lieu of tax payment
Penalty, interest and
advertising
Paducah Junior College
tax collections
Total taxes
Licenses:
Business licenses
Employee earnings
Comcast fees
Penalties
Alcoholic beverages
Insurance premium tax
Building permits
Electrical permits
Zoning change fees
Miscellaneous building
and electrical fees
KJDA payroll rebate
Total licenses
Charges for services:
Tax collection fee
Administrative charge
Base court revenue
Recreation fees
Total charges for services
Budgeted Amounts Actual
Original Final Amounts
me An a ." m A n m.- --
Exhibit A-2
Variance with
Final Budget
Positive
(Negative)
�D
4,077,000
4,196,940
4,196,949
9
165,000
139,775
140,776
1,001
244,000
233,845
233,854
9
165,200
161,550
161,550
-
115,000
146,145
146,145
-
35,000
51,630
51,630
-
-
-
274,518
274,518
4,801,200
4,929,885
5,205,422
275,537
3,400,000
3,496,440
3,496,438
(2)
10,600,000
10,616,225
10,616,223
(2)
300,000
281,245
281,244
(1)
57,000
61,500
61,532
32
115,000
113,685
113,685
-
3,700,000
3,781,365
3,767,864
(13,501)
105,000
112,820
112,820
-
31,000
34,570
34,569
(1)
3,500
3,680
3,681
1
1,000
600
602
2
-
(65,415)
(65,414)
1
18,312,500
18,436,715
18,423,244
(13,471)
125,000
111,840
111,860
20
240,700
240,700
240,696
(4)
84,375
84,375
84,376
1
121,500
132,400
132,388
(12)
571,575
569,315
569,320
5
109
(Continued)
CITY OF PADUCAH, KENTUCKY
BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS)
GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2004
Exhibit A-2
(Continued)
Variance with
-78-
Final Budget
Budgeted Amounts
Actual
Positive
Grants:
Original
Final
Amounts
(Negative)
Police State Incentive
$ 270,000
$ 268,625
$ 268,626
$ 1
Fire State Incentive
265,000
259,410
259,410
-
Paducah Housing Authority
after school program
29,000
52,380
52,384
4
Police supplemental grants
28,000
52,520
55,105
2,585
Total grants
592,000
632,935
635,525
2,590
Interest
183,400
118,565
118,566
1
Other:
Property rent and sales
428,475
458,370
465,124
6,754
Property upkeep and
maintenance
106,700
100,245
100,260
15
Contractual programs
3,000
5,755
5,754
(1)
E911 - GIS
-
9,870
9,868
(2)
Miscellaneous
84,300
1,940,695
1,940,727
32
Total other
622,475
2,514,935
2,521,733
6,798
Other financing sources:
Operating transfers in
-
3,280
3,282
2
Amounts available for appropriation
30,177,572
32,131,612
32,403,074
271,462
Charges to Appropriations (Outflows):
General government:
General administration:
Mayor and Commissioners
176,300
185,005
185,003
2
City Manager
219,690
211,580
211,227
353
City Clerk
125,395
131,480
131,366
114
Corporate Counsel
227,625
142,925
142,921
4
Non -departmental
230,000
280,000
280,000
-
Memberships and contingency
248,925
21,920
21,872
48
Civic beautification
2,625
2,645
2,645
-
Total general administration
1,230,560
975,555
975,034
521
Finance:
Finance administration
150,420
154,815
154,815
-
Accounting and payroll
303,945
288,410
288,409
1
Revenue collection
294,290
279,140
279,077
63
Total finance
748,655
722,365
722,301
64
(Continued)
-78-
CITY OF PADUCAH, KENTUCKY
BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS)
GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2004
Exhibit A-2
(Continued)
Variance with
Inspection:
Inspection administration
149,305
145,555
145,551
Final Budget
Construction
Budgeted
Amounts
Actual
Positive
General government:
Original
Final
Amounts
(Negative)
Planning:
750,680
701,205
700,983
222
Administration
$ 217,115
$ 245,310
$ 245,303
$ 7
Planning
205,365
205,700
205,696
4
Grants
104,025
103,375
103,052
323
Economic development
212,500
299,535
299,532
3
Total planning
739,005
853,920
853,583
337
Human rights
99,545
96,470
96,309
161
Human resources
338,570
329,770
329,740
30
Inspection:
Inspection administration
149,305
145,555
145,551
4
Construction
272,140
271,485
271,289
196
Code enforcement
329,235
284,165
284,143
22
Total inspection
750,680
701,205
700,983
222
Total fire
Information systems
242,845
213,305
213,301
4
Public safety:
Public works:
Police:
Public Works Administration
188,970
Police administration
1,114,190
1,135,870
1,135,867
3
Patrol
4,576,425
4,323,205
4,323,142
63
Investigations
1,176,475
1,187,415
1,187,224
191
Total police
6,867,090
6,646,490
6,646,233
257
Fire:
Fire administration
233,560
227,325
226,985
340
Suppression
4,584,010
4,596,320
4,596,318
2
Prevention
174,900
170,055
169,952
103
Training
133,730
110,535
110,530
5
Total fire
5,126,200
5,104,235
5,103,785
450
Public service:
Public works:
Public Works Administration
188,970
156,995
156,993
2
Street maintenance
2,225,560
1,924,855
1,924,712
143
Street lighting
458,185
480,370
480,369
1
(Continued)
-79-
CITY OF PADUCAH, KENTUCKY
BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS)
GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2004
Public service:
Public works:
Facility maintenance
Custodial service
Landscape maintenance
Summer youth program
Total public works
Engineering services:
Engineering services
Flood control
Total engineering services
Recreation:
Recreation administration
Pools and recreation
Total recreation
Other:
Cable authority
Grant match expense
Leave expense
Intergovernmental expense
Donated assets
Total other
Other financing uses:
Operating transfers out
Total charges to appropriations
BUDGETARY FUND BALANCE,
JUNE 30, 2004
Budgeted Amounts
Actual
Original
Final
Amounts
$ 561,930
$ 444,025
$ 443,730
230,770
201,300
201,294
1,347,740
1,402,200
1,402,197
100,765
69,115
69,113
5,113,920 4,678,860 4,678,408
Exhibit A-2
(Continued)
Variance with
Final Budget
Positive
(Negative)
$ 295
6
3
2
452
508,675
461,095
461,042
53
380,960
443,005
442,556
449
889,635
904,100
903,598
502
589,195
553,190
553,172
18
492,820
473,195
473,125
70
1,082,015
1,026,385
1,026,297
88
107,785
70,975
70,971
4
-
120,255
120,252
3
-
34,710
34,709
1
-
277,915
277,912
3
-
1,840,000
1,840,000
-
107,785
2,343,855
2,343,844
11
2,177,065
3,303,580
3,167,585
135,995
25,513,570
27,900,095
27,761,001
139,094
$4,664,002
$4,231,517
$ 4,642,073
$410,556
-80-
Exhibit A-3
CITY OF PADUCAH, KENTUCKY
BUDGETARY COMPARISON SCHEDULE
NOTE TO RSI
FOR THE YEAR ENDED JUNE 30, 2004
Note A - Explanation of Differences Between Budgetary Inflows and Outflows 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
IF -3E
General
Fund
$32,403,074
(4,925,982)
(3,282)
$27,473,810
$27,761,001
(3,167,585)
$24,593,416
CITY OF PADUCAH, KENTUCKY
SUPPLEMENTARY INFORMATION
NONMAJOR GOVERNMENTAL FUNDS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2004
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 bond principal and interest, note principal and interest, and capital
lease payments.
THIS PAGE INTENTIONALLY LEFT BLANK
Exhibit B-1
CITY OF PADUCAH, KENTUCKY
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2004
See auditors report on pages 13-14.
-82-
Special Revenue Funds
Emergency
Court
Small
CDBG
ASSETS
Municipal
Communication
Awards
Grant
Grant
Aid Program
Service Fund
Fund
Fund
Fund
Cash and cash equivalents
$ 41,203
$154,354
$168,142
$113,312
$43,000
Investments
500,000
-
-
-
-
Receivables, net:
Accounts
-
114,540
-
-
-
Grants
-
-
-
9,996
7,000
Interest
3,267
-
-
-
-
Prepaid items
-
12,962
-
-
-
TOTAL ASSETS
$544,470
$281,856
$168,142
$123,308
$50,000
LIABILITIES
AND
FUND BALANCES
Liabilities:
Voucher and accounts payable
$ 52,654
$ 37,682
$116,032
$ 2,879
$ -
Accrued payroll and payroll taxes
-
17,647
-
-
-
Unearned revenue
-
-
-
93,687
50,000
Due to other funds
-
-
-
24,439
-
Total liabilities
52,654
55,329
116,032
121,005
50,000
Fund Balances:
Reserved for:
Program purposes
-
-
-
2,303
-
Unreserved
491,816
226,527
52,110
-
-
Total fund balances
491,816
226,527
52,110
2,303
-
TOTAL LIABILITIES AND
FUND BALANCES
$544,470
$281,856
$168,142
$123,308
$50,000
See auditors report on pages 13-14.
-82-
$ - $ - $ 35 $ - $ 33,844 $ -
- - 12,455 -
90,865 - - - -
- - 3,135 21,831
90,865 35 3,135 68,130 -
$ 243,126
30,102
234,552
49,405
130,761 - 212,843 - 137,516 - 483,423
- - - - - 30,243 800,696
130,761 - 212,843 - 137,516 30,243 1,284,119
$130,761 $90,865 $212,878 $3,135 $205,646 $30,243 $1,841,304
-83-
Debt
Special Revenue Funds
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
$130,761
$59,924
$212,878
$ 3
$145,262
$30,243
$1,099,082
-
-
-
-
-
-
500,000
-
-
-
-
19,197
-
133,737
-
30,941
-
3,132
41,187
-
92,256
_
-
_
-
-
-
3,267
-
-
-
-
-
-
12,962
$130,761
$90,865
$212,878
$3,135
$205,646
$30,243
$1,841,304
$ - $ - $ 35 $ - $ 33,844 $ -
- - 12,455 -
90,865 - - - -
- - 3,135 21,831
90,865 35 3,135 68,130 -
$ 243,126
30,102
234,552
49,405
130,761 - 212,843 - 137,516 - 483,423
- - - - - 30,243 800,696
130,761 - 212,843 - 137,516 30,243 1,284,119
$130,761 $90,865 $212,878 $3,135 $205,646 $30,243 $1,841,304
-83-
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2004
Revenues:
Taxes
Charges for services
Intergovernmental
Grants
Interest
Miscellaneous
Total revenues
Expenditures:
Current operations:
Public safety
Public service
Planning and development
Debt Service:
Principal requirement
Interest and fiscal requirement
Total expenditures
Excess (deficiency) of revenues
over expenditures
Other Financing Sources (Uses):
Transfers in
Transfers out
Total other financing sources (uses)
Net change in fund balances
Fund balances, July 1, 2003
Adjustment to beginning fund balance
FUND BALANCES, JUNE 30, 2004
See auditors report on pages 13-14.
Exhibit B-2
- 1,158,873 25,361 - -
1,332,517 - - - -
- - - 46,693 12,500
1,332,517
Special Revenue Funds
25,361
46,693
12,500
Emergency
Court
Small
CDBG
Municipal
Communication
Awards
Grant
Grant
Aid Program
Service Fund
Fund
Fund
Fund
$ -
$ 665,807
$ -
$ -
$ -
-
99,339
-
-
-
405,763
-
-
-
-
281,250
-
-
30,591
16,500
14,922
1,637
1,712
59
-
187,568
186,644
31,967
19,291
-
889,503
953,427
33,679
49,941
16,500
- 1,158,873 25,361 - -
1,332,517 - - - -
- - - 46,693 12,500
1,332,517
1,158,873
25,361
46,693
12,500
(443,014)
(205,446)
8,318
3,248
4,000
93,750
236,802
-
-
-
-
-
-
(2,795)
(4,000)
93,750
236,802
-
(2,795)
(4,000)
(349,264)
31,356
8,318
453
-
841,080
195,171
43,792
1,850
-
$ 491,816
-84-
$ 226,527 $52,110 $ 2,303 $ -
-85-
Debt
Special Revenue Funds
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
_._ $ -
$ -
$ -
$ -
$ -
$ -
$ 665,807
-
-
-
-
-
-
99,339
-
-
-
-
-
575,508
981,271
-
490,344
-
29,433
1,592,958
-
2,441,076
-
-
3,047
-
696
-
22,073
-
29,957
44,798
-
-
-
500,225
- -
520,301
47,845
29,433
1,593,654
575,508
4,709,791
-
-
-
29,433
-
-
1,213,667
-
-
-
-
-
-
1,332,517
15,670
564,266
312,897
-
1,618,447
-
2,570,473
-
-
-
-
-
428,613
428,613
-
-
-
-
-
471,625
471,625
15,670
564,266
312,897
29,433
1,618,447
900,238
6,016,895
(15,670)
(43,965)
(265,052)
-
(24,793)
(324,730)
(1,307,104)
-
78,356
397,509
-
-
308,922
1,115,339
-
(34,391)
(273,281)
-
-
-
(314,467)
-
43,965
124,228
-
-
308,922
800,872
(15,670)
-
(140,824)
-
(24,793)
(15,808)
(506,232)
146,431
-
353,667
-
193,265
46,051
1,821,307
-
-
-
-
(30,956)
-
(30,956)
$130,761
$ -
$212,843
$ -
$ 137,516
$ 30,243
$1,284,119
-85-
CITY OF PADUCAH, KENTUCKY
MUNICIPAL AID PROGRAM FUND
DETAIL STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2004
Revenues:
Intergovernmental
Grants
Interest
Other
Total revenues
Expenditures:
Public service
Excess (deficiency) of revenues over
expenditures
Other Financing Sources (Uses):
Operating transfers in
Net change in fund balance
Fund balance, July 1, 2003
FUND BALANCE, JUNE 30, 2004
See auditors report on pages 13-14.
Final
Budget
Actual
$ 405,760
$ 405,763
281,250
281,250
14,920
14,922
187,570
187,568
889,500
889,503
1,332,545 1,332,517
(443,045) (443,014)
93,750 93,750
$ (349,295) (349,264)
841,080
$ 491,816
Exhibit B-3
Variance with
Final Budget
Positive
(Negative)
$ 3
2
(2)
3
28
31
$31
CITY OF PADUCAH, KENTUCKY
EMERGENCY COMMUNICATION SERVICE FUND
DETAIL STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2004
Revenues:
Local contributions
Telephone surcharges
Interest
Miscellaneous
Total revenues
Expenditures:
Public safety
Excess (deficiency) of revenues over
expenditures
Other Financing Sources (Uses):
Operating transfers in
Net change in fund balance
Fund balance, July 1, 2003
FUND BALANCE, JUNE 30, 2004
See auditors report on pages 13-14.
-87-
Exhibit B-4
Variance with
226,527
Final Budget
Final
Positive
Budget
Actual
(Negative)
$ 659,080
$ 665,807
$6,727
99,340
99,339
(1)
1,635
1,637
2
186,645
186,644
(1)
946,700
953,427
6,727
1,158,820
1,158,873
(53)
(212,120)
(205,446)
6,674
236,800
236,802
2
$ 24,680
31,356
$6,676
226,527
CITY OF PADUCAH, KENTUCKY
COURT AWARDS FUND
DETAIL STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2004
Revenues:
Court awarded forfeitures
Interest
Total revenues
Expenditures:
Public safety
Excess (deficiency) of revenues over
expenditures
Fund balance, July 1, 2003
FUND BALANCE, JUNE 30, 2004
See auditors report on pages 13-14.
-88-
Final
Budget
Actual
$31,970
$31,967
1,710
1,712
33,680
33,679
25,390 25,361
$ 8,290 8,318
43,792
$52,110
Exhibit B-5
Variance with
Final Budget
Positive
(Negative)
$ (3)
2
(1)
29
$ 28
CITY OF PADUCAH, KENTUCKY
SMALL GRANT FUND
DETAIL STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2004
Revenues:
Grants
Interest
Other
Total revenues
Expenditures:
Planning and development
Excess (deficiency) of revenues over
expenditures
Other Financing Sources (Uses):
Operating transfers out
Net change in fund balance
Fund balance, July 1, 2003
FUND BALANCE, JUNE 30, 2004
See auditors report on pages 13-14.
-89-
Exhibit B-6
Variance with
Final Budget
Final
Positive
Budget
Actual
(Negative)
$30,590
$30,591
$ 1
55
59
4
19,290
19,291
1
49,935
49,941
6
46,695
46,693
2
3,240
3,248
8
(2,795)
(2,795)
-
$ 445
453
$ 8
1,850
$ 2,303
CITY OF PADUCAH, KENTUCKY
CDBG FUND
DETAIL STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2004
Revenues:
Grants
Expenditures:
Planning and development
Excess (deficiency) of revenues over
expenditures
Other Financing Sources (Uses):
Operating transfers out
Net change in fund balance
Fund balance, July 1, 2003
FUND BALANCE, JUNE 30, 2004
See auditors report on pages 13-14.
.D
Exhibit B-7
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
$16,500 $16,500 $ -
12,500 12,500 -
4,000 4,000 -
(4,000) (4,000) -
CITY OF PADUCAH, KENTUCKY
HOPE 3 IMPLEMENTATION GRANT FUND
DETAIL STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2004
Revenues:
Other
Expenditures:
Planning and development
Excess (deficiency) of revenues over
expenditures
Fund balance, July 1, 2003
FUND BALANCE, JUNE 30, 2004
See auditors report on pages 13-14.
-91-
Exhibit B-8
Variance with
Final Budget
Final
Positive
Budget
Actual
(Negative)
15,670
15,670
-
$(15,670)
(15,670)
$ -
146,431
$130,761
CITY OF PADUCAH, KENTUCKY
HOME GRANT FUND
DETAIL STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2004
Revenues:
Grants
Miscellaneous
Total revenues
Expenditures:
Planning and development
Excess (deficiency) of revenues over
expenditures
Other Financing Sources (Uses):
Operating transfers in
Operating transfers out
Total other financing sources (uses)
Net change in fund balance
Fund balance, July 1, 2003
FUND BALANCE, JUNE 30, 2004
See auditors report on pages 13-14.
-92-
Exhibit B-9
Variance with
Final Budget
Final
Positive
Budget
Actual
(Negative)
$490,340
$490,344
$ 4
29,955
29,957
2
520,295
520,301
6
564,265
564,266
(1)
(43,970)
(43,965)
5
78,360
78,356
(4)
(34,395)
(34,391)
4
43,965
43,965
-
$ (5)
-
$ 5
CITY OF PADUCAH, KENTUCKY
HUD REVOLVING GRANT FUND
DETAIL STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2004
Revenues:
Interest
Other
Total revenues
Expenditures:
Planning and development
Excess (deficiency) of revenues over
expenditures
Other Financing Sources (Uses):
Operating transfers in
Operating transfers out
Total other financing sources (uses)
Net change in fund balance
Fund balance, July 1, 2003
FUND BALANCE, JUNE 30, 2004
See auditors report on pages 13-14.
-93-
Exhibit B-10
353,667
$ 212,843
Variance with
Final Budget
Final
Positive
Budget
Actual
(Negative)
$ 3,045
$ 3,047
$ 2
44,800
44,798
(2)
47,845
47,845
-
312,900
312,897
3
(265,055)
(265,052)
3
396,185
397,509
1,324
(273,285)
(273,281)
4
122,900
124,228
1,328
$(142,155)
(140,824)
$1,331
353,667
$ 212,843
CITY OF PADUCAH, KENTUCKY
PADUCAH HOUSING AUTHORITY POLICE GRANT FUND
DETAIL STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2004
Revenues:
Grants
Expenditures:
Public safety
Excess (deficiency) of revenues over
expenditures
Fund balance, July 1, 2003
FUND BALANCE, JUNE 30, 2004
See auditors report on pages 13-14.
-94-
Final
Budget Actual
$29,430 $29,4T3-
29,510 29,433
$ (80) -
Exhibit B-11
Variance with
Final Budget
Positive
(Negative)
$3
77
$80
Exhibit B-12
CITY OF PADUCAH, KENTUCKY
DEBT SERVICE FUND
DETAIL STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES
IN FUND BALANCE - BUDGET AND ACTUAL
FOR
THE YEAR ENDED JUNE 30, 2004
Variance with
Final Budget
--
Final
Positive
Revenues:
Budget
Actual
(Negative)
Intergovernmental
$ 575,510
$ 575,508
$ (2)
Expenditures:
Debt service:
Principal requirement
428,615
428,613
2
Interest and fiscal requirement
471,655
471,625
30
Total expenditures
900,270
900,238
32
Excess (deficiency) of revenues over
expenditures
(324,760)
(324,730)
30
Other Financing Sources (Uses):
Operating transfers in
308,920
308,922
2
Net change in fund balance
$ (15,840)
(15,808)
$ 32
Fund balance, July 1, 2003
46,051
FUND BALANCE, JUNE 30, 2004
$ 30,243
See auditors report on pages 13-14.
-95-
CITY OF PADUCAH, KENTUCKY
SUPPLEMENTARY INFORMATION
NONMAJOR PROPRIETARY FUNDS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2004
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
See auditors report on pages 13-14.
-96-
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF NET ASSETS
NONMAJOR PROPRIETARY FUNDS
JUNE 30, 2004
ASSETS
Wastewater/ Civic
Total Nonmajor
Stormwater Center
TISA
Enterprise
Current Assets:
Fund Fund
Fund
Funds
Cash and cash equivalents
$ - $ 22,551
$ 16,337
$ 38,888
Receivables, net
- -
27,006
27,006
Prepaid expense
- -
6,994
6,994
Total current assets
- 22,551
50,337
72,888
Noncurrent Assets:
Net depreciable capital assets
- 161,285
176,902
338,187
Total assets
- 183,836
227,239
411,075
LIABILITIES
Current Liabilities:
Voucher and accounts payable
- 1,434
925
2,359
Total liabilities
- 1,434
925
2,359
NET ASSETS
Invested in capital assets, net of related debt - 161,285
176,902
338,187
Unrestricted
- 21,117
49,412
70,529
TOTAL NET ASSETS
$ - $182,402
$226,314
$408,716
See auditors report on pages 13-14.
-96-
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN FUND NET ASSETS
NONMAJOR PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2004
Operating Revenues:
Charges for services
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
Contributions and Operating Transfers:
Capital contributions
Transfers in
Transfers out
Total contributions and operating transfers
Change in net assets
Net assets, July 1, 2003
NET ASSETS, JUNE 30, 2004
See auditors report on pages 13-14.
Wastewater/
Civic
Stormwater
Center TISA
Fund
Fund Fund
$222,076
$ 36,455 $100,778
222,076
25,008
115,009
8,173
69,157
33,181
184,166
3,274
(83,388)
209 -
222,076 3,483 (83,388)
- 24,990
- 72,246
(222,076) - -
(222,076) - 97,236
3,483 13,848
178,919 212,466
$ - $182,402 $226,314
-97-
Exhibit C-2
Total Nonmajor
Enterprise
Funds
$359,309
140,017
77,330
217,347
141,962
209
142,171
24,990
72,246
(222,076)
(124,840)
17,331
391,385
$408,716
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF CASH FLOWS
NONMAJOR PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2004
Cash Flows from Noncapital
Financing Activities:
Transfers (to) from other funds (222,076)
Cash Flows from Capital and Related
Financing Activities:
Capital contributions -
Acquisition and construction
of capital assets -
Net cash used by capital and
related financing activities -
Cash Flows from Investing Activities:
Interest on cash and investments -
Net increase (decrease) in cash and cash
Exhibit C-3
Total Nonmajor
Enterprise
Funds
$332,304
(360,839)
(28,535)
- 72,246 (149,830)
- 24,990 24,990
(4,512) (59,594) (64,106)
(4,512) (34,604) (39,116)
209 - 209
equivalents
Wastewater/
Civic
(31,015)
(217,272)
Stormwater
Center
TISA
Cash Flows from Operating Activities:
Fund
Fund
Fund
Cash received from customers
$222,076
$ 36,455
$ 73,773
Other receipts (payments)
(191,079)
(27,330)
(142,430)
Net cash provided (used) by operating activities
30,997
9,125
(68,657)
Cash Flows from Noncapital
Financing Activities:
Transfers (to) from other funds (222,076)
Cash Flows from Capital and Related
Financing Activities:
Capital contributions -
Acquisition and construction
of capital assets -
Net cash used by capital and
related financing activities -
Cash Flows from Investing Activities:
Interest on cash and investments -
Net increase (decrease) in cash and cash
Exhibit C-3
Total Nonmajor
Enterprise
Funds
$332,304
(360,839)
(28,535)
- 72,246 (149,830)
- 24,990 24,990
(4,512) (59,594) (64,106)
(4,512) (34,604) (39,116)
209 - 209
equivalents
(191,079)
4,822
(31,015)
(217,272)
Cash and cash equivalents, July 1, 2003
191,079
17,729
47,352
256,160
--- CASH AND CASH EQUIVALENTS,
JUNE 30, 2004
$ -
$ 22,551
$ 16,337
$ 38,888
Reconciliation of Operating Income (Loss) to
Net Cash Provided by Operating Activities:
Operating income (loss)
$222,076
$ 3,274
$(83,388)
$141,962
Adjustments to reconcile operating income (loss)
to net cash provided by operating activities:
Depreciation and amortization
-
8,173
69,157
77,330
Change in assets and liabilities:
Receivables
-
-
(27,006)
(27,006)
Prepaid expense
-
-
(6,994)
(6,994)
Accounts payable and accrued expenses
(191,079)
(2,322)
(20,426)
(213,827)
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES
$ 30,997
$ 9,125
$ (68,657)
$ (28,535)
See auditors report on pages 13-14.
CITY OF PADUCAH, KENTUCKY
SUPPLEMENTARY INFORMATION
INTERNAL SERVICE FUNDS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2004
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
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF NET ASSETS
INTERNAL SERVICE FUNDS
JUNE 30, 2004
ASSETS
Health
Fleet
Fleet Lease
Insurance
Insurance
Combined
Current Assets:
Maintenance
Trust
Fund
Fund
Total
Cash and cash equivalents
$ 3,955
$ 373,284
$ 1
$493,663
$ 870,903
Investments
-
1,300,000
-
-
1,300,000
Receivables, net
-
6,610
-
139,623
146,233
Prepaid expense
-
-
1,015,142
-
1,015,142
Inventories
98,115
-
-
-
98,115
Total current assets
102,070
1,679,894
1,015,143
633,286
3,430,393
Noncurrent Assets:
Net depreciable capital assets
33,760
1,614,609
-
-
1,648,369
Total assets
135,830
3,294,503
1,015,143
633,286
5,078,762
LIABILITIES
Current Liabilities:
Voucher and accounts payable
2,584
-
-
361,999
364,583
Accrued payroll and payroll taxes
9,101
-
-
-
9,101
Accrued compensated absences
24,374
-
-
-
24,374
Due to other funds
-
-
998,341
-
998,341
Total current liabilities
36,059
-
998,341
361,999
1,396,399
Noncurrent Liabilities:
Accrued compensated absences
37,602
-
-
-
37,602
Total liabilities
73,661
-
998,341
361,999
1,434,001
NET ASSETS
Invested in capital assets, net
of related debt
33,760
1,614,609
-
-
1,648,369
Unrestricted
28,409
1,679,894
16,802
271,287
1,996,392
TOTAL NET ASSETS
$ 62,169
$3,294,503
$ 16,802
$271,287
$3,644,761
See auditors report on pages 13-14.
01
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF REVENUES, EXPENSES,
AND CHANGES IN FUND NET ASSETS
INTERNAL SERVICE FUNDS
FOR THE YEAR ENDED JUNE 30, 2004
Operating Revenues:
Charges for services - internal
Charges for services - external
Total operating revenues
Operating Expenses:
Health
Fleet Fleet Lease Insurance Insurance
Maintenance Trust Fund Fund
Exhibit D-2
Combined
$290,164 $ 458,333 $ 933,046 $2,848,372 $4,529,915
- - - 501,809 501,809
290,164 458,333 933,046 3,350,181 5,031,724
Vehicle maintenance
434,858
-
-
-
434,858 -
Administrative
-
4,854
-
876
5,730
Insurance
-
-
1,053,804
2,518,509
3,572,313
Leave expense
5,906
-
-
-
5,906
Depreciation
11,408
398,660
-
-
410,068
Total operating expenses
452,172
403,514
1,053,804
2,519,385
4,428,875
Operating income (loss)
(162,008)
54,819
(120,758)
830,796
602,849
Nonoperating Revenues and (Expenses):
Interest and investment income
-
18,129
-
-
18,129
Gain (loss) on disposal of property
and equipment
-
(1,972)
-
-
(1,972)
Total nonoperating revenues
(expenses)
-
16,157
-
-
16,157
Income (loss) before operating transfers
(162,008)
70,976
(120,758)
830,796
619,006
Contributions and Operating Transfers:
Transfers in
100,000
496,431
-
-
596,431
Change in net assets
(62,008)
567,407
(120,758)
830,796
1,215,437
Net assets, July 1, 2003
124,177
2,727,096
137,560
(559,509)
2,429,324
NET ASSETS, JUNE 30, 2004
$ 62,169
$3,294,503
$ 16,802
$ 271,287
$3,644,761
See auditors report on pages 13-14.
-100-
Exhibit D-3
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF CASH FLOWS
INTERNAL SERVICE FUNDS
FOR THE YEAR ENDED JUNE 30, 2004
Health
Fleet
Fleet Lease
Insurance Insurance
Combined
Cash Flows from Operating Activities:
Maintenance
Trust
Fund Fund
Total
Receipts from other funds for services
$ 290,164
$ 458,333
$ 933,046 $3,463,178
$5,144,721
Payments to suppliers
(208,108)
-
- -
(208,108)
Payments to employees
(206,830)
-
- -
(206,830)
Claims paid
-
-
- (2,990,822)
(2,990,822)
Other receipts (payments)
-
(4,854)
(1,070,605) (876)
(1,076,335)
Net cash provided (used) by operating activities
(124,774)
453,479
(137,559) 471,480
662,626
Cash Flows from Noncapital Financing
Activities:
Transfers from other funds
100,000
496,431
- -
596,431
Cash Flows from Capital and Related
Financing Activities:
Purchase of capital assets
(2,995)
(578,530)
- -
(581,525)
Insurance proceeds received
-
12,836
- -
12,836
Net cash used by capital and related financing
(2,995)
(565,694)
- -
(568,689)
Cash Flows from Investing Activities:
Proceeds from sales and maturities
of investments
-
743,333
- -
743,333
Interest and dividends
-
15,491
- -
15,491
Purchase of investments
-
(1,304,232)
- -
(1,304,232)
Net cash used by investing activities
-
(545,408)
- -
(545,408)
Net increase (decrease) in cash
and cash equivalents
(27,769)
(161,192)
(137,559) 471,480
144,960
Cash and cash equivalents, July 1, 2003
31,724
534,476
137,560 22,183
725,943
- CASH AND CASH EQUIVALENTS,
JUNE 30, 2004
$ 3,955
$ 373,284
$ 1 $ 493,663
$ 870,903
Reconciliation of Operating Income (Loss) to
Net Cash Provided by Operating Activities:
Operating income (loss)
$(162,008)
$ 54,819
$ (120,758) $ 830,796
$ 602,849
Adjustments to reconcile operating
_. income (loss) to net cash provided
(used) by operating activities:
Depreciation and amortization
11,408
398,660
- -
410,068
Change in assets and liabilities:
Receivables
-
-
- 112,996
112,996
Prepaid expense
-
-
(1,015,142) -
(1,015,142)
Inventories
34,758
-
- -
34,758
Accounts payable and accrued expenses
(8,932)
-
998,341 (472,312)
517,097
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES
$(124,774)
$ 453,479
$ (137,559) $ 471,480
$ 662,626
See auditors report on pages 13-14.
-101-
CITY OF PADUCAH, KENTUCKY
SUPPLEMENTARY INFORMATION
FIDUCIARY FUNDS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 309 2004
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
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF FIDUCIARY NET ASSETS
FIDUCIARY FUNDS - PENSION TRUST FUNDS
JUNE 30, 2004
Police and Appointive
ASSETS Firefighters' Employees'
Retirement Fund Pension Fund Total
Cash and cash equivalents
Receivables:
Interest
Other
Investments at fair value
Total assets
LIABILITIES
Voucher and accounts payable
NET ASSETS
Held in trust for pension benefits and
other purposes
See auditors report on pages 13-14.
-102-
$ 330,591
$ 22,989
$ 353,580
63,345
806
64,151
1,425
-
1,425
8,957,586
300,000
9,257,586
9,352,947
323,795
9,676,742
648
175 823
$9,352,299 $323,620 $9,675,919
Exhibit E-2
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF CHANGES IN NET ASSETS
FIDUCIARY FUNDS - PENSION TRUST FUNDS
FOR THE YEAR ENDED JUNE 30, 2004
See auditors report on pages 13-14.
-103-
Police and
Appointive
Firefighters'
Employees'
Additions:
Retirement Fund
Pension Fund
Totals
Contributions:
Employer
$ 195,962
$ -
$ 195,962
Plan members
27,355
-
27,355
Total contributions
223,317
-
223,317
Investment earnings:
Net increase in fair value of investments
607,613
-
607,613
Interest and dividends
265,306
5,004
270,310
Net investment earnings
872,919
5,004
877,923
Interfund transfers
615,439
75,553
690,992
Total additions
1,711,675
80,557
1,792,232
Deductions:
Benefits
1,773,398
76,576
1,849,974
Administrative expenses
46,698
7,735
54,433
Total deductions
1,820,096
84,311
1,904,407
Change in net assets
(108,421)
(3,754)
(112,175)
Net assets, July 1, 2003
9,460,720
327,374
9,788,094
NET ASSETS, JUNE 30, 2004
$9,352,299
$323,620
$9,675,919
See auditors report on pages 13-14.
-103-
FIDUCIARY FUNDS
Private -purpose Trust Funds
Oak Grove Cemetery Trust and Maintenance and Rehab Trust — to account for assets held by the
City in the capacity of trustee for specified purposes.
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF NET ASSETS
FIDUCIARY FUNDS - PRIVATE -PURPOSE TRUST FUNDS
JUNE 30, 2004
ASSETS
r Cash and cash equivalents
Investments at fair value
Held in trust for other purposes
See auditors report on pages 13-14.
-104-
Exhibit E-3
Oak Grove
Maintenance
Cemetery
and Rehab
Trust
Trust
Total
$ 1,923
$ 902
$ 2,825
77,651
-
77,651
$79,574
$ 902
$80,476
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF CHANGES IN NET ASSETS
FIDUCIARY FUNDS - PRIVATE -PURPOSE TRUST FUNDS
FOR THE YEAR ENDED JUNE 30, 2004
Additions:
Contributions:
Intergovernmental revenues
Private donations
Total contributions
Investment earnings:
Net decrease in fair value of investments
Interest and dividends
Net investment earnings
Interfund transfers
Total additions
Deductions:
Capital outlay
Administrative expenses
Total deductions
Change in net assets
Net assets, July 1, 2003
NET ASSETS, JUNE 30, 2004
See auditors report on pages 13-14.
-105-
Oak Grove
Maintenance
Cemetery
and Rehab
Trust
Trust
$ 2,235
$ 7,000
-
675,000
2,235
682,000
(217) -
2,912 -
2,695 -
1 -
4,931 682,000
Exhibit E-4
Totals
$ 9,235
675,000
684,235
(217)
2,912
2,695
1
686,931
-
679,493
679,493
852
1,605
2,457
852
681,098
681,950
4,079
902
4,981
75,495
-
75,495
$79,574
$ 902
$ 80,476
FIDUCIARY FUNDS
Agency Fund
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.
Exhibit E-5
CITY OF PADUCAH, KENTUCKY
AGENCY FUND
STATEMENT OF CHANGES
IN ASSETS AND LIABILITIES
FOR THE YEAR ENDED JUNE 30, 2004
Balance Balance
Payroll Fund: July 1, 2003 Additions Deductions June 30, 2004
Assets:
Cash and cash equivalents $251,099 $10,257,456 $10,201,995 $306,560
Liabilities:
Payroll taxes and withholdings
payable $251,099 $10,257,456 $10,201,995 $306,560
See auditors report on pages 13-14.
-106-
CITY OF PADUCAH, KENTUCKY
STATISTICAL SECTION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 309 2004
L
00
M
r-
C�
\o
Q*,
N
r -M
O_
O O
v
CN
O�
tn
01
0*1
ON
00
CN
O
O
O O
6
000
O
Or-
+�+
N
�t
N
64
b
N
[—
00
I'D
y� O
00
00
N
ct
-�
Vn
IlO
Ile
oo
a a
\p
V1
00
to
O
l—
I'D
M
..V.
d�
CIN
N
O
-�
[
M
v
N_
C�
O�
O
M
M
to
O
N
01,
Q
a
r-
N
M
N
0�,
Q
M
"I
LnLr)
�O
Gos
00
M
CN
—
�,
00
O
�
r-
O
Z ti:
00
N
r-
N
�
�
kn
=
Vn
M
M
�O
O
M
V1
O
N
t
w
o0
0.
o
C;
o
C
C
00
00
00
-+
--
Q A
01
v)
`O
00
C\
M
M
d1
M
00
rad Q
�
tf)
Lr)
k �
N
�
M
O\
00
v G
N
N
M
M
64
00
O
Ol,
�D
00
M
v')
It
v'i
M
�D
O
M
N
%O
MC14
rte+
00
C�
r-
M
00
`O
O
00
O
00
-
C1
O
N
N
Vl
69
L
kr)
C�
C�
r-
C�
00
CN
D\
CN
O
O
O
O
O O
v
CN
O�
tn
01
0*1
ON
00
CN
O
O
O O
-107-
N
O
z
W
U
O
W �
wz u
Z U FSI
aaH
O � �
Eza
UW
C y M V) kr) \O �10 o0 01 N M
O - Q1 0\ O 00 0\ M N
y C
C 00 \C O N M O
Ni-
O FSI
w
00
r-
w
r-
N
-
to
kn
kn
L
O
w
l-
\O
M
l-
00
t-
00
OM
Q\
knN
O
r-
all
�
00
V1
'ct
m
r-
M
i4
C\
kn
O
N
O
C1
\C
�
N
Vi
C�
\C
V>
-
00
U
v1
M
O
N
O
[�
6R
V)
l
n
V-)
llO
[
O
r
N
V1
Lr)
Vl
O
l--
00
O
00
00
to
C1
N
V')
00
O
01
O
M
00
6
O
Ni-
Itt
M
It
V)
ON
V')
It
V'I
O
M
M
00
16
IlC
V'�
M
C
OM
_M
C
MO
O
00
W
N
.M.
M1
�
00
01
to
D1
H
V1
—
00
\C
V)
N
\O
00
N
V1
O
N
M
M
�
to
00
N
N
N
N
N
N
N
N
N
N
64
U.
CE
�
N
N
�
V)
t-
00
N
0000
IC
N
M
0�
y
D1
0\
C1
O
\.c
tn
0\
C\
69
01
01
01
O
O
O
O
O
C y M V) kr) \O �10 o0 01 N M
O - Q1 0\ O 00 0\ M N
y C
C 00 \C O N M O
Ni-
O FSI
w
m
r-
N
r-
N
-
to
N
"o
O
O
w
l-
\O
M
l-
00
t-
00
N
Q\
N
1
V1
M
00
—
m
r-
M
i4
C\
kn
O
N
O
C1
\C
�
N
Vi
C�
\C
V>
-
00
U
v1
M
O
N
O
[�
�n
V)
l
n
V-)
llO
[
O
O
N
V1
Lr)
kn
kn
O
IC
_M
C
w
O
O
00
W
N
c
NV
00
01
to
D1
H
14 I M m Izi- T
to tr)
-108-
III
00
M
00
00
O
0000
O
�C
�10
N
m
i4
C\
kn
O
N
O
C1
\C
�
N
Vi
C�
\C
V>
-
00
t-
V)
M
O
N
O
[�
N
n
l
n
rl
llO
[
O
O
N
V1
Lr)
kn
O
IC
_M
w
O
00
CNr
H
N
M
--
00
l-
M
O
N
M
M
�
to
00
N
N
N
N
N
N
N
N
N
N
64
U.
V)
t-
00
a1
O
N
M
y
D1
0\
C1
O
O
O
C\
O,
01
01
01
O
O
O
O
O
.�
-
C�
d'
V)
I
I
\O
1
00
01
O
N
M
U
C1
C1
O�
C\
O
C1
O
O
O
O
C1
Cl\
0l,
01
Cl)
D\
O
O
O
O
-108-
III
rA
by O C
C�
O
00
kn
(n
M
N
Cl�
v1
M
00
O
110
CSS �.• i! �:+
Itil
Ln
h
O
Cl�
M
N
O
M
00
00
Ol,
C�.-
M
O
Ln
o
Vl
"D
00
00
M
`O
O
N
M
O
00
O
G
N
C\
Lr
00
Ln
\O
Vl
kn
V)
M
V
�'
kn
a "V
H
00
N
kn
00
M
00
O
h
00
M
cp
.-
kr
cp
4r
�.
I�
O�
d00
00
O
N
ON
Ga
O�
110
00
C.
011
�
C�
oo
O
N
D\
v i
Vi
�'
N
M
•--'
—
M
00
h
E„
N
N
N
N
N
•--�
•--�
^--'
^'
•--'
b9
kr)
O
O
Ln
-
tr)
CN
Vl
M
Ln
CN
N
all
00
00
O
V
�
C
h
V)
O�
•--�
O
^
h
O�
O
M
y�
01
M
N
00
.--�
M
•--�
N
V)
N
kn
N
00
N
M
N
W
L
C�
h
00
\O
00
00
kn
N
—
kn
�
h
O\
C�
00
a,
00
cn
'n
N
O
69
~
C
CN
N
Gh
ol
Ln
v
C y
VMi
oho
000
000
N_
CN
h
N
M
00
V)
^'
O00
0o0
O
O
an
an
00
O
00
F+•1 a �„i
d•
�
�
M
M
M
t7
�
�
6�4
�O
\.D
M
Lrl
�/'�
CN
.•�
%C
h
d'
O
h
N
�O
[�
�
N
00
V'1
M
O
V)
00
N
l0
N
Ln
FI
M
�O
00
\lO
00
Ln
V)
V)
kn
69
L
C�
N
00
O�
O
^'
N
M
V'
y
CN
C1
C�
ON
O
O
O
O
O
p,
O
OLr)
O
O
v
00
o
0
0
0
�
rn
CN
N
N
N
N
�
.�
•.-�
.-�
r.
.-�
•--�
—109—
-110-
TABLE 4
CITY OF PADUCAH, KENTUCKY
SECURED TAX LEVIES AND COLLECTIONS
LAST TEN FISCAL YEARS
(1)
(1)
Percent of
Total
Total
Levy
Fiscal Year
Levy
Collections
Collected
1994-1995
$4,998,288
$4,981,828
99.6%
1995-1996
5,040,252
5,022,419
99.6%
1996-1997
4,361,298
4,350,475
97.8%
1997-1998
4,417,910
4,373,272
99.0%
1998-1999
4,614,749
4,602,800
99.7%
1999-2000
4,428,970
4,384,681
99.0%
2000-2001
4,549,413
4,406,600
96.9%
2001-2002
4,679,795
4,532,885
96.9%
2002-2003
4,653,264
4,631,782
99.5%
2003-2004
4,890,723
4,866,871
99.5%
(1) Includes current year real and personal property tax, franchise, auto and bank shares.
-110-
F
a
w
a
a
ISI
�F
z��
>d
W U d
dApLTo
E�AVZ
adEW"
Oma
00
U0.4
H
W
A
W
W
d
ci
--
00
all
lrCD
ON
d'
00
M
N
O
N
%O
M
CC
\p
M
M
�O
M
d'
M
ON
vl
O\
o0
C L
00
N
O
N
N
t--
M
M
It
Cl)
'IT
N
�c
IrL
00
lr�
00
O,
'n
69
N
L
O
O
V
rn
OO
dam
'
"It
u00M
N
M
i(•
if•
iF
*
t
iF
it
it•
M
Cpn
0
N
CC
L
69
h
_
o o
l
69
oho
00
00
ON
Q\
O
C
O
C
M
M
l
M
M
(
O�
N
N
�
00
00
ti'
00
00
00
Q\
O
IC
E
000
N
M
Q
.--i
M
Vl
'IT
kf)
to
00O1
W)
kr)
00
W)70
O
O
OC,
W
rn
0
O
a,
O,
all
N
N
ON
W
vi
O R O
kf)
N
L y
a
>
In
k!1
Vl
M
M
D,
M
CN
1616
Q1
01
ON
W
h
O,
'IT
o^
C
Cr
�
M
h
�O
M
d
kn
�
O
N
d•
�
00
�!1
'IT
O�
N
N
00
O
h
M
M
h
W a>
N
M
N
M
�t
69
ci
-111-
O
--
h
lc�
lrCD
ON
d'
00
M
N
O
N
%O
M
CC
\p
M
00
h
M
d'
M
ON
vl
O\
o0
C L
00
N
O
N
N
t--
M
M
It
Cl)
'IT
N
�c
IrL
00
lr�
00
O,
'n
69
N
N
V
rn
OO
dam
'
"It
oho
N
M
0000
M
v1
00
M
Cq
M
M
M
M
Cpn
N
N
CC
L
69
h
_
o o
l
kn
oho
-111-
O
V1
00
h
M
00
ON
d'
,N.,
M
N
N
O,
C\
00
%O
M
M
O
00
O1
N
h
h
00
h
C L
00
00
01
N
h
M
DD
O
O1
O
N
N
V
W)
OO
dam
'
"It
oho
N
M
0000
M
v1
00
M
M
M
M
M
M
Cpn
N
N
CC
L
69
h
_
o o
l
kn
oho
00
00
ON
Q\
O
O
O
-111-
O
V1
00
h
M
00
ON
d'
,N.,
M
N
N
O,
C\
00
%O
M
M
O
00
O1
N
h
h
00
h
C L
00
00
01
N
h
M
DD
O
h
rq
d
L
ar :+
h
It
O
ON
D,
41
N
O\
h
M
v1
00
M
M
M
M
M
M
Cpn
N
N
aM
69
h
N
-111-
O
O\
•--
h
00
M
00
'•-�
M
O
00
O1
N
h
h
00
h
h
N
�k
N
d^
ID00
O
M
O
ONO
o0
Cpn
N
N
aM
h
N
o o
l
kn
oho
00
00
ON
Q\
O
O
O
6
CC
kn
00
a\
O
N
M
�
C,
C\
�
O
O
O
O
O
rn
0
0
0
u
OC,
rn
rn
0
O
a,
O,
all
N
N
ON
W
N
-111-
O
-112-
=
\D
O
tn
r-
0000
[�
00
O
O
O
O
O
O
C
p.,
O
y
rC
10
N
O
00
U
00
00
iO
Q1
(71
D\
y
w
R
C
M
M
M
M
M
M
N
N
N
N
ami
L
O
O
O
O
O
O
O
O
O
O
S
�
a
to U
0
b L
RS O_
O
Q
M
M
M
M
M
N
N
N
N
N
w
0
0
0
0
0
0
0
0
0
0
R
v1
O
r-
00
O
M
(�
+y+
�
a
A
O
w
w
CA
�
O
L
O
,
H
a
C
0
C
u
w
LL
L
O
O
O
O
O
O
u_
�
u
D
CC �
�
�
M
M
•-•
O
�
�
�
�
w
_
^o
0ON
OM1
OM1
C
L
�
�
M
M
M
M
M
M
�
a
CQ
L
u
r►.
v
C
M
M
N
N
O
O
O
O
O
F+H W
i'
1p
00
01
01
01
01
01
O
O
O
O
O
N
O
O
O
�
�
�
V
0C1
O1
O1
O,
01
O1
O
O
O
O
01
O1
Q1
01
01
O,
O
O
L=.
N
N
-112-
6
to
C*l
r.
110
CN
r-
�
.-1
oo
CN
.-11
Ol,
�
.-i
O
O
N
.-.
O
N
N
O
N
M "t
O O
N N
V
�I
C a
00
i
�
ONCN
oo
�
D\
ON
O
O
N
i
—
O
N
i i
N M
O O
N N
O
U
A
z
PC
W
abs��
C14
oo
O
r.
aZA�>
r,
M
N
y Q
zAoA
p
Ln
O
MO
o0
o
co
ao
0
00
00
y
O
00
N
O
O
kn
to
00
v1 ,
h
M
M
O
i0i
O
Ct
N
O
p A
O
0t0
00
O
N
kn
Cll
Vii
0�1
00
M
y
00
1p
O
M
`O
00
Ol�
N
N
N
M
Ln
kn
v?
Eoq
0
0
0
0
0
0
.-.
N
Ln
N
°
N
t4)
N
Ln
N
N
M
M
M
M
O
CL
%-o
�10
�10
O
N
N
N
N
N
N
N
N
N
N
a
6
to
C*l
r.
110
CN
r-
�
.-1
oo
CN
.-11
Ol,
�
.-i
O
O
N
.-.
O
N
N
O
N
M "t
O O
N N
V
�I
�
�
i
�
ONCN
oo
�
D\
ON
O
O
N
i
—
O
N
i i
N M
O O
N N
-113-
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.
-114-
Ratio of
(1)
Debt Service
Total
To Total
Total
General
Governmental
Debt
Government
Fund Type
Fiscal Year
Principal
Interest
Service
Expenditures
Expenditures
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%
2003-2004
428,613
471,625
900,238
25,925,933
3.5%
(1) Includes the General Fund and Municipal Aid Fund
* Includes in -substance defeasance of Kentucky League of Cities - Pooled Leasing debt.
-114-
TABLE 9
CITY OF PADUCAH, KENTUCKY
COMPUTATION OF LEGAL DEBT MARGIN
YEAR ENDED NNE 30, 2004
Net assessed value
Add exemption
Total assessed value
Debt limit - 10% of total assessed value (1)
Debt outstanding:
General obligation bonds outstanding
Notes payable
Less debt not subject to limit
Gross bonded debt
Less amount available in debt
service funds
Net bonded indebtedness subject
to limit
Legal Debt Margin
(1) Section 158 of the Commonwealth of Kentucky states:
$13,620,000
3,428,855
17,048,855
$1,598,892,475
61,656,208
$1,660,548,683
$ 166,054,868
17,018,612
$ 149,036,256
"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."
-115-
—116—
I-Tm
O\
tT
N
t—
00
00
r-
Th
r-
00
00
H
O
W)
-�
-RI-00
V'1
CE
p„ C
*
'�'
00
cp
00
tz
\1
M
cl
cr
�,
00
69
00
O�
t-
O
W)
O
tr)
M
00
00
N
M
O,
vl
W)
!�
Q1
00
M
W
N
=
R O
O
00
tr)
M
00
N
00
M
00
Q,
O
00
a,
a U
N
00
O
00
O
00
O
�
'IT00
�
O
O
y
N
O
M
n
On
O
-
r-
N
CO O
D
^
OM
•L
cD
V
>
O
O
N
M
O
IC
O
00
\O
rL+
MOM
69
M
M
N
M
m
M
N
8
O C
O
U U
O
Z CI
N
N
N
00
OM
N
O
\O
N
^
N
n
\O
\O
CQ
O
\O
O,
�tO
M
\C
IT
O,
O,
p
kn
gyp
\
00
vl
\O
N
O
7,
r
r-
00
000
0
O
O
O
O
^
N
69
00
\O
IT
kn
00
t—
00
M
M
lc
--
M
M
Cl�
O,00
N
r+
a'
�
�
�
00
O
�
V
N
0000
kr)y
oo
O�
00
\O
N
M
O n
'IT
V
M
V
v)
00
cp
06
�p
W
V'1
v')
v')
Wn
W')
\O
\O
\O
L
V
f3,
�
N
�
W)
N
O
O
O
^
00
L
O
M
M
O
00
t
\O
V
O,
o
M
O
O,
O
tl-
00
'T
�n
O
M
01
O
O�
[-
C�
�V
V
O
cl
:w
M
�t
N
ai
M
69
M
M
M
'
d'
V)
kn
O�
M
M
\p
0000
r
O
\O
cl
o0
l�
00
N
i'
V
O,
00
M
t--
O_
l�
O
tel'
r
�
�
�
oo0
N
oho
O
Wn
00
t`
t`
N
00
O
\O
00
V
\D
N
vl
U
rn
M
"tr
It
kn
V1
to
kn
\o
L
CQ
V
O\
Q1
O\
O\
O1
O
O
O
O
O
i
i
i
i
i
N
C'.4
N
i
N
i
N
i
eC
'ch
�n
\p
r
oo
i
D,
O
N
M
u
(7NO,
rn
rn
rn
CN
O
o
o
O
ON
all
rn
O,
O,
O,
o
O
O
o
—116—
-11%-
oA
�,
0
*
3
0
0000
0�
U
�
w
L
O
O
o
o
3
cc
O
N
v7
v� O
kr
F
C
tu
N
69
N
N
N
On
6l
�
L
cd
3
0�
Y
a �-
Clcl,
0
3F
*
*
Q
"C
N
M
3z
s_
a�
�
w
O
0
A
00
r-
�
1�0
M-
Ln
O\
0
00
CCS
r.+
00
l -
v')
kn
N
U ti
z
A
O U
N O
00
r-
\o
V)
O
r�A
\O
•--
to
v)
In
U
N QO
00
[�
M
^"
9F
iE
iF
iF
iE
p
aU+
y
O n
0000
O
w
o
'O
O
N C
•>
s
00
U
c
y
w O
N
0000
r-�\
vi
N
CC
On
M
r-
000
�
y
�O
ll�
M
M
L =
a
M
Mm
M
oq
>,
O
V U
75
O
O
U
En
C
'
m
C U
�
O
L
O
O
Q
V)�
O�
CN
r-00
O�
ON
O�
O�
O
O
�-+
O
N
O
M
O
�
O
L
�
n
y
C
4.
m
O�
O1
C\
O1
O�
O
O
O
O
O
O
v
4V1
O�
a\
\,O
a\
[�
D\
00
a\
O,
O,
O
O
OC)
N
O
CIN
�
Ql,
O�
'-+
O�
•--�
Ol,
•--�
O
N
O
N
O
N
O
N
�
�
•--
.-.
N
-11%-
TABLE 12
CITY OF PADUCAH, KENTUCKY
DEMOGRAPHIC STATISTICS
LAST TEN FISCAL YEARS
Sources:
(1) Bureau of the Census Count - 1990 and 2000.
(2) Board of Education; represents elementary and secondary public schools.
(3) Kentucky Cabinet for Human Resources, Department for Employment Services.
-118-
Unemployment
g
3.9%
4.4%
5.5%
4.3%
3.2%
3.8%
4.2%
5.2%
6.0%
4.0%
(1)
(1)
(1)
(2)
Per Capita
Median
School
Fiscal Year
Population
Income
Age
Enrollment
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
2003-2004
26,307
18,417
39.9
2,977
Sources:
(1) Bureau of the Census Count - 1990 and 2000.
(2) Board of Education; represents elementary and secondary public schools.
(3) Kentucky Cabinet for Human Resources, Department for Employment Services.
-118-
Unemployment
g
3.9%
4.4%
5.5%
4.3%
3.2%
3.8%
4.2%
5.2%
6.0%
4.0%
TABLE 13
CITY OF PADUCAH, KENTUCKY
MISCELLANEOUS STATISTICAL DATA
JUNE 30, 2004
Miscellaneous:
Date of incorporation
1830
Form of government
City Manager, Mayor
High school
and Commissioners
Area - square miles
19.92
Miles of streets/paved
213
Miles of sidewalks
45
Population
26,307
Registered voters
28037
Votes cast last general election
9879
Number of hospitals
2
Schools:
Number of public schools:
High school
1
Middle school
I
Elementary
4
Head Start
I
Alternative learning center
1
Adult education
I
Students
2977
Teachers
225
Administrative personnel
34
Support personnel
241
Parks and Recreation:
Number of parks
14
Acres of parks
280
Public golf courses
2
Public swimming pools
1
Public tennis courts
6
-119-
TABLE 13
CITY OF PADUCAH, KENTUCKY
MISCELLANEOUS STATISTICAL DATA
JUNE 30, 2004
Police and Fire Protection:
Number of employees:
Policemen 73
Firefighters 69
Number of fire stations 5
Utilities:
Water utility:
Number of users
22419
Annual consumption
2,467,110,100 Gallons
Distribution lines
476 Miles
Employees
46
Sewer utility:
Plant capacity main plant
9,000,000 Gallons/Day
Miles of collection system:
Sanitary sewers
300 Miles
Combination sewers
56 Miles
Storm sewers
38 Miles
Employees
35
Electric utility:
Number of street lights
4795
Number of city maintained
traffic light intersections
10
Employees
62
-120-
TABLE 14
CITY OF PADUCAH, KENTUCKY
PRINCIPAL TAXPAYERS
JANUARY 1, 2004
(1) Source - Property Valuation Administration; Assessed value as of January 1, 2004.
-121-
(1)
Percentage of
Assessed
Total Assessed
Taxpayer
Type of Business
Valuation
Valuation
Kentucky Oaks Mall
Mall
$ 41,626,900
3.10%
Wal-Mart
Retailer
34,007,318
2.53%
Lourdes Medical Pavilion
Healthcare
19,071,118
1.42%
Alliant Foodservice, Inc.
Food wholesaler
15,935,683
1.19%
Computer Services, Inc.
Bank Data Processor
14,661,833
1.09%
Amerisource
Drug Wholesaler
14,515,613
1.08%
Ducmall LLC
Mall
14,225,000
1.06%
Sams East Inc
Retailer
13,950,726
1.04%
Lowe's
Retailer
13,790,170
1.03%
Paducah Medical Investors
Healthcare
13,440,090
1.00%
TOTALS
$195,224,451
14.54%
(1) Source - Property Valuation Administration; Assessed value as of January 1, 2004.
-121-
TABLE 15
CITY OF PADUCAH, KENTUCKY
COMPUTATION OF DIRECT AND OVERLAPPING DEBT
JUNE 30, 2004
(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.
-122-
(1)
_
Amount
Percentage
Available
Applicable
Bonds/Loans
Debt Service
Net Debt
to City
Outstanding
Funds
Outstanding
of Paducah
City of Paducah
$17,048,855
$30,243
$17,018,612
100.0%
Paducah Independent
School District
7,595,000
-
7,595,000
100.0%
McCracken County
12,982,500
-
12,982,500
47.1%
McCracken County
Board of Education
28,562,802
-
28,562,802
24.4%
Overlapping Debt
49,140,302
-
49,140,302
TOTALS
$66,189,157
$30,243
$66,158,914
(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.
-122-
TABLE 16
CITY OF PADUCAH, KENTUCKY
POLICE AND FIREFIGHTERS' RETIREMENT FUND
REVENUE BY SOURCE
LAST TEN FISCAL YEARS
(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.
-123-
(1)
(2)
Employee
Employer
Investment
Fiscal Year
Contributions
Contributions
Income
Other
Total
1994-1995
$34,737
$323,844
$ 784,629
$ 2,702
$1,145,912
1995-1996
33,253
340,773
884,085
4,052
1,262,163
1996-1997
33,888
744,484
858,541
1,203
1,638,116
1997-1998
36,110
660,651
989,175
8,967
1,694,903
1998-1999
31,371
593,776
716,366
2,998
1,344,511
1999-2000
27,640
649,274
1,224,591
2,000
1,903,505
2000-2001
28,482
865,026
1,033,814
-
1,927,322
2001-2002
29,224
806,632
487,024
-
1,322,880
2002-2003
29,981
645,773
(51,867)
-
623,887
2003-2004
27,355
811,401
1,390,740
-
2,229,496
(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.
-123-
TABLE 17
CITY OF PADUCAH, KENTUCKY
POLICE AND FIREFIGHTERS' RETIREMENT FUND
EXPENSES BY TYPE
LAST TEN FISCAL YEARS
-124-
Benefit
Investment
Fiscal Year
Refunds Payments
Services
Other
Total
1994-1995
$ - $1,492,528
$ 6,302
$ 5,842
$1,504,672
1995-1996
- 1,535,885
7,119
12,433
1,555,437
1996-1997
- 1,585,549
7,008
2,102
1,594,659
1997-1998
- 1,613,710
15,777
7,649
1,637,136
1998-1999
28,684 1,695,198
11,756
10,831
1,746,469
1999-2000
- 1,719,043
10,993
9,868
1,739,904
2000-2001
- 1,742,179
8,008
10,437
1,760,624
2001-2002
- 1,761,979
9,107
27,002
1,798,088
2002-2003
- 1,760,964
9,509
44,160
1,814,633
2003-2004
- 1,773,398
22,687
24,011
1,820,096
-124-
tn
M �t OC1 00
-125-
CITY OF PADUCAH, KENTUCKY
SINGLE AUDIT SECTION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2004
CITY OF PADUCAH, KENTUCKY
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2004
Total Department of Housing and Urban
Development
Department of Justice:
Direct Programs:
Local Law Enforcement Block
Grants Program
Bulletproof Vest Partnership Program
Passed -through Marshall County:
Byrne Formula Grant Program
Passed -through Kentucky Department of
Juvenile Justice:
Juvenile Accountability
Incentive Block Grant
Total Department of Justice
Department of Agriculture:
Passed -through Kentucky Department of
Natural Resources - Division of Forestry:
Cooperative Forestry Assistance
Passed -through Kentucky Department of
Education:
Summer Food Service Program for
Children
Total Department of Agriculture
Department of Homeland Security:
Passed -through Division of Disaster and
Emergency Services:
Assistance to Firefighters Grant
2,108,791
16.592 N/A 57,034
16.607 N/A 5,681
16.579 2000 -DD -VX -0047 5,992
16.523 2002 -JB -BX -0023 (104) 6,920
75,627
02 -DG -11083121-020
10.664 03-DG-11083121-OIA 5,702
10.559 079V70999SU 29,703
35,405
97.044 EMW-2003-FG-12050 24,286
-126-
(Continued)
Federal
Federal Grantor/Pass-Through Grantor/
CFDA
Pass -Through
Program Title:
Number
Grantor Number Expenditures
Department of Housing and Urban
Development:
Direct Programs:
Section 8 Housing Choice Vouchers
14.871
N/A $1,618,447
Passed -through Kentucky Housing
Corporation:
HOME Investment Partnerships
14.239
M -98 -SG -2101-05-00
Program
M -99 -SG -2101-05-00
M -01 -SG -2101-36-00
M -01 -SG -2101-05-00 490,344
Total Department of Housing and Urban
Development
Department of Justice:
Direct Programs:
Local Law Enforcement Block
Grants Program
Bulletproof Vest Partnership Program
Passed -through Marshall County:
Byrne Formula Grant Program
Passed -through Kentucky Department of
Juvenile Justice:
Juvenile Accountability
Incentive Block Grant
Total Department of Justice
Department of Agriculture:
Passed -through Kentucky Department of
Natural Resources - Division of Forestry:
Cooperative Forestry Assistance
Passed -through Kentucky Department of
Education:
Summer Food Service Program for
Children
Total Department of Agriculture
Department of Homeland Security:
Passed -through Division of Disaster and
Emergency Services:
Assistance to Firefighters Grant
2,108,791
16.592 N/A 57,034
16.607 N/A 5,681
16.579 2000 -DD -VX -0047 5,992
16.523 2002 -JB -BX -0023 (104) 6,920
75,627
02 -DG -11083121-020
10.664 03-DG-11083121-OIA 5,702
10.559 079V70999SU 29,703
35,405
97.044 EMW-2003-FG-12050 24,286
-126-
(Continued)
CITY OF PADUCAH, KENTUCKY
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2004
Federal
Federal Grantor/Pass-Through Grantor/
CFDA
Pass -Through
Program Title:
Number
Grantor Number
Expenditures
Department of Homeland Security:
Passed -through Kentucky Department of
Military Affairs:
State Domestic Preparedness Equipment
M-03453577
Support Program
97.004
M-03199593
$ 47,804
Total Department of Homeland Security
72,090 -
Department of Transportation:
Direct Programs:
-
Airport Improvement Program
20.106
N/A
15,236
Recreation Trails Program
20.219
N/A
50,000
Passed -through Kentucky Transportation
Cabinet:
Highway Planning and Construction
Project - River Heritage Museum
20.205
C-02076510
78,946
Highway Planning and Construction
Project - Streetscape
20.205
C-021-30342
287,715
Passed -through Paducah Area Transit
System:
Federal Transit Formula Grant
20.507
MASS0335902
281,250
Total Department of Transportation
713,147
TOTAL EXPENDITURES OF FEDERAL AWARDS
$3,005,060
See accompanying notes to schedule of expenditures of federal awards.
-127- -
CITY OF PADUCAH, KENTUCKY
NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2004
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
River Heritage Center, Inc.
Paducah Board of Education
Federal
CFDA
Amount
Number
Provided
20.205
$ 78,946
10.559
29,703
$108,649
-128-
WILLIAMS, WILLIAMS & LENTz, LLP
CERTIFIED PUBLIC ACCOUNTANTS
601 JEFFERSON
PADUCAH, KENTUCKY 42001
J. RICHARD WALKER
JERRY G. SEVERNS MAILING ADDRESS
POST OFFICE BOX 2500
ROBERT R. ROBERTSON PADUCAH, KY 42002.2500
C. SUZETTE CRONCH
ANNETTE T. RYAN
TELEPHONE
MICHAEL F. KARNES
270-443-3643
MARK ROGER
ROGER G. HARRIS
Report on Compliance and on Internal Control
P P
.HARRS
J. DAVID BAILEY, III
Over Financial Reporting Based on an Audit
FAX
270-444-0652
of Financial Statements Performed in Accordance
G. LEON WILLIAMS, 1926-2004
with
WEBSITE
H. WILLIAM LENTZ
Government Auditing Standards
"" Lpa. m
Honorable William F. Paxton, Mayor
Members of the Board of Commissioners
City of Paducah
Paducah, Kentucky
We have audited the financial statements of the governmental activities, the business -type activities, the
aggregate discretely presented component units, each major fund, and the aggregate remaining fund
information of the City of Paducah, Kentucky, as of and for the year ended June 30, 2004, which collectively
comprise the City of Paducah, Kentucky's basic financial statements and have issued our report thereon dated
September 20, 2004. 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 September 20, 2004.
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.
September 20, 2004
9PRE
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, 2004. 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
City of Paducah, Kentucky's management. 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, 2004.
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.
-130-
WILLIAMS, WILLIAMS & LENTZ, LLP
CERTIFIED PUBLIC ACCOUNTANTS
601 JEFFERSON
PADUCAH, KENTUCKY 42001
J. RICHARD WALKER
MAILING ADDRESS
JERRY G. SEVERNS
POST OFFICE BOX 2500
ROBERT R. ROBERTSON
PADUCAH, KY 42002-2500
C. SUZETTE CRONCH
ANNETTE T. RYAN
TELEPHONE
MICHAEL F. KARNES
270-443-3643
MARK A. THOMAS
Requirements Applicable
ROGER G. HARRIS
Report on Compliance with
FAX
J. DAVID BAILEY, III
to Each Major Program and Internal Control Over
270-444-0652
Compliance in Accordance with OMB Circular A-133
WEBSITE
G. LEON WILLIAMS, 1926-2004
—Icpa.com
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, 2004. 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
City of Paducah, Kentucky's management. 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, 2004.
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.
-130-
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 solely 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.
00
September 20, 2004
-131-
CITY OF PADUCAH, KENTUCKY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2004
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
CFDA#
Section 8 Housing Choice Vouchers
14.871
Home Investment Partnerships
14.239
Highway Planning and Construction — River Heritage
Project and Streetscape
20.205
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
-132-