HomeMy WebLinkAboutJune-30-2011CITY OF PADUCAH,
KENTUCKY
COMPREHENSIVE
ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2011
FINANCE DEPARTMENT
CITY OF PADUCAH,
KENTUCKY
City of Paducah
Paducah, Kentucky
Conlprehensive Annual Financial Report
Year Ended June 30,2011
Issued by the
Finance Department
CITY OF PADUCAH, KENTUCKY
COMPREHENSNE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2011
Introductory Section:
Letter of Transmittal
Organizational Chart
Principal Officials
GFOA Certificate of Achievement
Financial Section:
Independent Auditor's Report
Required Supplementary Information:
TABLE OF CONTENTS
Management's Discussion and Analysis
Basic Financial Statements:
Government-wide Financial Statements:
Statement of Net Assets
Statement of Activities
Fund Financial Statements:
Governmental Funds:
Balance Sheet
Reconciliation of the Governmental Funds Balance
Sheet to Statement of Net Assets
Statement of Revenues, Expenditures and Changes
in Fund Balances
Reconciliation of the Statement of Revenues,
Expenditures and Changes in Fund Balances of
Governmental Funds to the Statement of Activities
Budgetary Comparison Statement (Budgetary Basis) -
General Fund
Budgetary Comparison Statement -Note to RSI -General Fund
Budgetary Comparison Statement (Budgetary Basis) -
Special Revenue Investment Fund
Budgetary Comparison Statement -Note to RSI -Special
Revenue Investment Fund
Proprietary Funds:
Statement of Net Assets
Statement of Revenues, Expenses and Changes in
Fund Net Assets
Statement of Cash Flows
Fiduciary Funds:
Statement of Net Assets
Statement of Changes in Net Assets
Component Units Financial Statements:
Statement of Net Assets
Statement of Activities
Notes to Financial Statements
Required Supplementary Information:
Pension Trust Fund Schedules
Exhibit No. Page No.
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8
9
10
11-12
13-27
1 28-29
2 30-31
3 32-33
4 34-35
5 36-37
6 38-39
7 40-43
8 44
9 45
10 46
11 47
12 48
13 49
14 50
15 5]
16 52-53
17 54-55
56-90
A-I 91
Exhibit No. Page No.
Supplementary Information:
Nonmajor Governmental Funds:
General Capital Improvements Detail Statement of
Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual B-1 92
Debt Service Fund Detail Statement of Revenues,
Expenditures, and Changes in Fund Balance -Budget
and Actual B-2 93
Combining Balance Sheet B-3 94-95
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances B-4 96-97
Detail Statement of Revenues, Expenditures, and
Changes in Fund Balance -Budget and Actual:
Municipal Aid Program Fund B-5 98
Emergency Communication Service Fund B-6 99
Court A wards Fund B-7 100
Small Grant Fund B-8 101
CDBG Grant Fund B-9 102
Special Revenue Bond Fund B-lO 103
Home Grant Fund B-ll 104
PRAFund B-12 105
Nonmajor Proprietary Funds:
Nonmajor Enterprise Funds:
Combining Statement of Net Assets C-l 106
Combining Statement of Revenues, Expenses and
Changes in Fund Net Assets C-2 107
Combining Statement of Cash Flows C-3 108
Internal Service Funds:
Combining Statement·of Net Assets D-1 109
Combining Statement of Revenues, Expenses, and
Changes in Fund Net Assets D-2 110
Combining Statement of Cash Flows D-3 111
Fiduciary Funds:
Combining Statement of Net Assets -Pension
Trust Funds E-1 112
Combining Statement of Changes in Net Assets -
Pension Trust Funds E-2 113
Combining Statement of Net Assets
Private-purpose Trust Funds E-3 114
Combining Statement of Changes in Net Assets -
Private-purpose Trust Funds E-4 115
Statement of Changes in Assets and
Liabilities -Agency Funds E-5 116
Table No. Page No.
Statistical Section:
Net Assets by Component 1 117
Changes in Net Assets 2 118-120
Fund Balances, Governmental Funds 3 121
Changes in Fund Balances, Governmental Funds 4 122
Assessed and Estimated Actual Value of
Taxable Property 5 123
Statistical Section:
Property Tax Rates -Direct and Overlapping
Governments
Principal Taxpayers
Secured Tax Levies and Collections
Employee License Tax Collections
Principal Employee License Taxpayers
Ratio of Outstanding Debt by Type
Ratio of Net General Bonded Debt Outstanding
Direct and Overlapping Governmental
Activities Debt
Legal Debt Margin Information
Demographic and Economic Statistics
Principal Employers
City Full-Time Employees by Function
Operating Indicators by Function
Capital Asset Statistics by Function
Single Audit Section:
Schedule of Expenditures of Federal A wards
Notes to the Schedule of Expenditures of Federal
Awards
Report on Internal Control Over Financial Reporting
and on Compliance and Other Matters Based on an
Audit of Financial Statements Performed in Accordance
with Government Auditing Standards
Report on Compliance with Requirements That Could Have
a Direct and Material Effect on Each Major Program and
on Internal Control Over Compliance in Accordance with
OMB Circular A-133
Schedule of Findings and Questioned Costs
Schedule of Prior Audit Findings
Table No.
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7
8
9
10
11
12
13
14
15
16
17
18
19
Page No.
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CITY OF PADUCAH, KENTUCKY
INTRODUCTORY SECTION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2011
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
December 16, 2011
We are pleased to submit Paducah's Comprehensive Annual Financial Report for the year ended June 30,
2011. 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.
City management's narrative on the financial activities of the City for the fiscal year ended June 30, 2011,
is in the Management's Discussion and Analysis (MD&A) section of this report, immediately following
the Report of Independent Auditors. The letter of transmittal is written to complement the MD&A and
the financial statements, and should be read from that perspective and in conjunction with all other
sections of the CAFR.
THE CITY
Paducah was established in 1827 by explorer General William Clark. The City of Paducah is situated at
the confluence of the Ohio and Tennessee Rivers 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.
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.
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.
In the early 1990s, 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
was centered on the Resource Center, which was designed to coordinate resources of government,
business, and education.
In 1997, the City of Paducah jointly with the County of McCracken acquired the 'Industrial Park West of
Paducah and McCracken County'. This park contains 218 acres with immediate access to two major
railroad lines, Paducah and Louisville and Paducah and Illinois (formerly Illinois Central). The park is
located within the southwest quadrant of the 1-24/Cairo Road interchange.
In 2007, GPEDC began assembling property to establish Riverport West, a 673-acre industrial park with
rail and river access in western McCracken County.
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. In 2008, WKCTC opened a Paducah School of
Art, which is currently holding classes in its temporary location while the permanent facility is developed.
In 2010, a new 65,000 square feet Emergency Technology Center was opened, offering industrial and
manufacturing technologies, engineering technology, as well as business and industry training, and
information technology programs. This is the first state supported new building to be constructed on the
WKCTC campus in over 20 years.
Medical Facilities
Paducah serves as the regional medical center for much of the Jackson Purchase Area of Western
Kentucky, a large portion of Southern Illinois, and Northwestern Tennessee. Paducah's medical industry
has almost every major medical specialty represented in the physician population. The medical industry,
represented by Lourdes Hospital and Western Baptist Hospital, provides over 550 beds for medical needs.
The two largest hospitals, together, employ approximately 3,300 persons.
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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, disc golf, skate
boarding, soccer, hiking, 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.
The LowerTown Art and Music Festival is uniquely showcased within the borders of Paducah's 140-
year-old historic neighborhood. The LowerTown Art and Music Festival is an outdoor-juried show in its
9th year. The weekend exhibits the work of local artists and includes jazz, salsa, zydeco, and blues
music as well as food from area restaurants.
Started in 2004, the 'Rivers Edge International Film Festival' is a four-day event built around the
showing of independent films from around the world. The festival is held in multiple venues including
Maiden Alley Cinema, Market House Theatre, and Yeiser Art Center. In addition to appealing to the
film lover, the festival also provides filmmakers opportunities for exhibition, education, and networking.
Paducah is the site of the Museum of the American Quilter's Society. In May 2008, a congressional
designation was passed naming the museum as the National Quilt Museum of the United States. The
museum, dedicated in 1991, is the centerpiece for the quilters' annual convention held in April. The
convention attracts an estimated 30,000 visitors to Paducah annually.
'Live on Broadway', which began as the 'Downtown After Dinner Program' in May 1997, started out as
an experiment to draw people to Paducah's downtown district. From Memorial Day through July,
businesses remain open late on Saturday night while street corner musicians of all types entertain.
One of Paducah's oldest celebrations is the '8th of August Emancipation Celebration', which features
African American family reunions or a homecoming. It is a time for African Americans to pay tribute to
their heritage and roots, and a time of reconciliation.
The 'Barbecue on the River' event was started in 1995 as a way for local charities to raise funds. It
attracts in excess of 70,000 participants to Paducah's riverfront during the last weekend in September.
Over time, this annual event has grown to incorporate other events, including 'Marine Industry Day' and
'Old Market Days'.
Paducah Power sponsors the annual 'Christmas in the Park' lighting display at Noble Park. The public is
invited to a special lighting ceremony the Friday after Thanksgiving. This is the thirteenth year for the
event. Although the event is free, volunteers collect more than $30,000 in cash and thousands of pounds
of canned food annually.
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. 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.
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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.
THE GOVERNMENT
Paducah operates under a Council-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 318 full-time employees as of June 30, 2011. 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. 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 of
Paducah.
Blended units are presented as such because the units' governing bodies are substantially the same as the
governing body of the City, or provide service almost entirely to the City of Paducah. The City has only
one blended unit; the 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 and Paducah Transit Authority 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.
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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.
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-<late 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. Unencumbered
funds at year-end roll into the fund balance.
Financial Policies
The City's financial policies are shaped by state law and established by management and the City
Commission. Financial policies include budgeting and financial planning, capital planning, revenue,
investment, debt management, procurement, and accounting and auditing.
During FY2011, some of the City's financial policies did have a significant impact on the financial
statements:
Pension Obligation Costs. In FY2006, the City issued general obligation bonds of $6,100,000 to finance
the police and firefighters' pension fund actuary liability. Since the issuance of these bonds, the City has
made it policy to contribute the normal cost as well as the minimum actuarially sound contribution
annually that would arise from the fund being in a deficit position as of the actuarial date. For FY2011,
this contribution was $451 thousand. This amount was $465 thousand in FY2010.
Refinance 2001 Bond Issue. The City's debt management policy states that periodic reviews of all
outstanding debt will be conducted to determine refunding opportunities. The policy also states that
refunds will be undertaken when a net present value of savings of at least 5% of the refunded debt can be
achieved. In August 2010, the City refinanced its 2001 Convention and Arts Center bonds, saving the
City 8.8% of the refunded debt, or $590,344 (net present value) over the life of the issue. The $7.165
million general obligation bond issue will be paid off in June of 2026.
Fund Balance Reserve. The City's operating budget policy states that the general fund's minimum
undesignated cash balance shall be 8% of the general fund's budgeted expenditures. Any year-end
operating surpluses in excess of the required reserve may be kept as additional reserve or made available
for capital projects and/or "one-time only" general fund expenditures as determined by the Board of
Commissioners. During the FY2011 budget process, the Commission made an additional appropriation
of $408,780 based on the projected FY2011 budget. The most significant appropriations included
$150,000 for a pay/classification survey and implementation plan, $79,000 for fire station repairs, and
$51,500 for the Microsoft Office 2010 Suite.
As part of the City's annual budget process, financial policies are reviewed and amended as necessary. In
FY2011, there were no official changes in policy that would have a significant impact on the financial
statements of the City.
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LONG-TERM FINANCIAL PLANNING
On October 1, 200S, the City's payroll tax was increased V2 cent. As a result of the payroll tax increase,
the City Commission created the Investment Fund. The Investment Fund is funded with the V2 cent
increase and is dedicated to the following purposes: economic development, community redevelopment,
infrastructure capital investment, and property tax relief. During the FY2011 budget process, the
Commission reviewed numerous decision packages proposed for the Investment Fund Budget and
expenditures totaling $4.78 million were appropriated.
The City has numerous infrastructure/capital items that will affect the long-term financial planning
process. The following projects are examples of future considerations facing the City:
Floodwall Restoration. The 12.S-mile long floodwall system protecting a large portion of the Paducah-
McCracken area is approaching 60 years of age. It is still in good condition long beyond its design life;
however, it is in need of necessary repairs. The estimated cost of this restoration project is approximately
$6 million. It is anticipated that grant funds will cover 6S% of the project. In FY2009, the City
proceeded with making the most seriously needed repairs by borrowing around $2 million. This phase of
repairs was completed in FY2011.
Riverfront Redevelopment Plan. The City's Riverfront Redevelopment Plan includes proposed
improvements that will provide public amenities, recreational facilities, and public spaces that will tie the
City's downtown to the Ohio River. The plan includes a public marina, boat ramp, recreational trails and
shoreline enhancements, and a steamboat landing, just to name a few. If completed, Phase I and Phase II
of the riverfront redevelopment plan will cost an estimated $46.2 million. In FY2007, the City was
allocated $S.3 million in federal funds for construction of Phase I and the Ohio River Boat Launch
Project. Environmental assessment and remediation procedures required by the permitting process have
temporarily stalled the construction of this phase of the project. Once all permits are secured,
construction will be able to begin. Operating costs will be a long-term planning consideration.
Sports Park. In FY20ll, the City made final payment for a land purchase that will be used to develop a
sports park. In the future, a plan will be developed which will likely include soccer fields,
softbaillbaseball fields, trails, shelters, and ancillary buildings. Depending on possible partnerships and
construction phasing, future development costs may range between $2 million and $6 million dollars.
Future operating costs of the facility will be a long-term planning consideration and is estimated at build-
out to be $lS0,000 to $200,000 annually.
ECONOMIC CONDITION
The City continues to be aggressive 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 remained fairly steady considering the nation's recent economic
struggles. It is expected that the economy will continue to hold over the near term. Area employment
remained flat in comparison to the prior year, with 29,749 persons employed (McCracken County) as of
June 30, 2011.
The June 2011 unemployment rate was 8.7% (McCracken County), which is only a slight increase from
8.S% in the prior year, and is favorable compared to the June 2011 federal unemployment rate of 9.2%.
The number of active electric and water meters was nearly the same as the prior year. The number of
building and electric permits obtained was 1,239 for fiscal year 2011 valued at $71.7 million, which is up
$48.9 million from fiscal year 2010.
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INDEPENDENT AUDIT
Kentucky Revised Statute 91 A-040 requires an annual audit of each fund of the City by an auditor of
public accounts or a certified public accountant. The independent certified public accounting firm of
Williams, Williams & Lentz, LLP, has conducted this audit and their opinion has been included in this
report. The City is also subject to the Single Audit Act Amendments of 1996 reporting requirements.
The Single Audit Report is included within this report.
CERTIFICATE OF ACHIEVEMENT
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a
Certificate of Achievement for Excellence in Financial Reporting to the City of Paducah, Kentucky for its
comprehensive annual financial report for the fiscal year ended June 30, 2010. This was the twentieth
consecutive year that the City achieved this prestigious award.
In order to be awarded a Certificate of Achievement for Excellence in Financial Reporting, a government
must publish an easily readable and efficiently organized comprehensive annual financial report. This
report must satisfy 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 comprehensive annual financial report continues to meet the Certificate of
Achievement Program's 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, City Manager, and City Commission for
their interest and support in planning and conducting the financial operations of the City in a responsible
and progressive manner.
lly submitted, &
onathan W. Perkins, CPA
Finance Directorrrreasurer
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City Clerk
Engineering!
Public Works
Department
Advisory Board
and
Committees
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Police
Department
CITY OF PADUCAH, KENTUCKY
ORGANIZATIONAL CHART
CITIZENS OF PADUCAH I
Mayor and Commissioners I
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City Manager I
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Fire Department
Parks
Department
City Attorney I
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Paducah Human
Renaissance Resources fRisk
Alliance Management
Information Planning Finance Department
Department Inspection Systems
Mayor
Mayor Pro tern
Commissioner
Commissioner
Commissioner
Finance
Police Chief
Fire Chief
City EngineerlPublic Works
Planning
Parks Services
Inspections
Information Services
CITY OF PADUCAH, KENTUCKY
PRINCIPAL OFFICIALS
BOARD OF COMMISSIONERS
CITY MANAGER
Jeff Pederson
Human Resources & Risk Management
City Clerk
Public Information
Paducah Renaissance Alliance
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William F. Paxton
Gayle Kaler
Gerald Watkins
Richard Abraham
Carol Gault
Jonathan Perkins, c.P.A.
James Berry
Steve Kyle
Richard Murphy
Stephen Ervin
Mark Thompson
Joel Scarbrough
Greg Mueller
Cindy Medford
Tammy Brock
Pam Spencer
Steve Doolittle
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 30,2010
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
standard. .. in government accounting
and financial reporting.
Executive Director
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CITY OF PADUCAH, KENTUCKY
FINANCIAL SECTION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2011
J. RICHARD WALKER
ROBERT R. ROBERTSON
C. SUZETTE CRONCH
MICHAEL F. KARNES
MARK A. THOMAS
ROGER G. HARRIS
J. DAVID BAILEY. III
G. LEON WILLIAMS, 1926-2004
H. WILLIAM LENTZ, 1925·2007
JERRY G. SEVERNS
WILLIAMS, WILLIAMS & LENTZ, LLP
CERTIFIED PUBLIC ACCOUNTANTS
601 JEFFERSON
PADUCAH, KENTUCKY 42001
Independent Auditor's Report
Honorable William F. Paxton, Mayor
Members of the Board of Commissioners
City of Paducah
Paducah, Kentucky
MAILING ADDRESS
POST OFFICE BOX 2500
PADUCAH, KY 42002·2500
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, 2011,
which collectively comprise the City'S basic financial statements as listed in the table of contents. These
fmancial 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 Transit Authority of the City of Paducah, a component unit, which represents nineteen
percent of the assets and revenues of the Component Units column. Those financial statements were audited
by another auditor whose reports have been furnished to us; and, our opinion on the basic financial statements,
insofar as it relates to the amounts included for the Transit Authority of the City of Paducah, a discretely
presented component unit, is based on the report of another auditor.
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, based on our audit and the report of another auditor, the fmancial 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, 2011, and the
respective changes in financial position and cash flows, where applicable, thereof and the respective budgetary
comparisons for the General Fund and Special Revenue Investment Fund, for the year then ended in
conformity with accounting principles generally accepted in the United States of America. In addition, in our
opinion, the financial statements referred to above present fairly, in all material respects, the respective
financial positions of each nonmajor governmental, nonmajor enterprise, internal service, and fiduciary fund,
which collectively comprise the City's combining and individual fund statements and schedules as listed in the
table of contents as of June 30, 2011, and the respective changes in financial position and cash flows, where
applicable, thereof and the respective budgetary comparisons for the General Capital Improvements, Debt
Service Fund, and the non-major governmental funds, for the year then ended in conformity with accounting
principles generally accepted in the United States of America.
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In accordance with Government Auditing Standards, we have also issued our report dated December 16,2011,
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 grant agreements, and other matters. The purpose of that
report is to describe the scope of our testing of internal control over financial reporting and compliance and the
results of that testing and not to provide an opinion on the internal control over financial reporting or on
compliance. That report is an integral part of an audit performed in accordance with Government Auditing
Standards and important for assessing the results of our audit.
Accounting principles generally accepted in the United States of America require that the management's
discussion and analysis, Pension Trust Fund Schedules on pages 13 through 27 and 91, be presented to
supplement the basic financial statements. Such information, although not a part of the basic financial
statements, is required by the Government Accounting Standards Board, who considers it to be an essential
part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or
historical context. We have applied certain limited procedures to the required supplementary information in
accordance with auditing standards generally accepted in the United States of America, which, consisted of
inquiries of management about the methods of preparing the information and comparing the information for
consistency with management's responses to our inquiries, the basic financial statements, and other knowledge
we obtained during our audit of the basic financial statements. We do not express an opinion or provide any
assurance on the information because the limited procedures do not provide us with sufficient evidence to
express an opinion or provide any assurance.
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 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 schedule of expenditures of federal awards has been
subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the basic financial statements taken as a whole. The
introductory and statistical sections 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.
trltiP....:..; td~fi -7 .tV'
December 16, 2011
-12-
CITY OF PADUCAH, KENTUCKY
REQUIRED SUPPLEMENTARY INFORMATION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2011
CITY OF PADUCAH, KENTUCKY
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2011
The City of Paducah ("City") offers Management's Discussion and Analysis to provide a narrative overview
and analysis of City fmancial activities for fiscal year ended June 30, 2011. To fully understand the entire
scope of the City's financial activities, this infonnation should be read in conjunction with the letter of
transmittal (pages 1-7) and the basic financial statements (pages 28-90) 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 $49.7 million at the close of the 2010-2011 fiscal year. Of this
amount, $7.2 million (unrestricted net assets) may be used to meet City government's ongoing
obligations to citizens and creditors.
• Total net assets increased $156,958.
• At fiscal year end, City governmental funds reported a combined ending fund balance of $17.2
million. Approximately 20% of this total amount, $3.5 million, is restricted or committed for
highways/streets and capital improvements. Assigned fund balance comprises 16%, or $2.8 million,
of combined fund balance; the majority of which is set aside for capital improvements.
• At the end of the current fiscal year, unassigned General Fund fund balance was $10.9 million and is
available for spending at the City's discretion. Cash and investments make up approximately $5.6
million. When compared to total appropriations, the General Fund cash and investments balance is
18%.
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 infonnation 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 fmances in a manner similar to private-sector business.
The Statement of Net Assets presents infonnation 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 fmancial position of
the City is improving, stagnating, or deteriorating.
The Statement of Activities presents infonnation 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
-13-
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, Section Eight Housing, Civic Center,
and Telecommunication Information System Authority (TISA).
Government-wide financial statements include not only the City (the primary government), but also
a legally separate Paducah Water Works and Paducah Transit Authority (component units) for which
the City is financially accountable. Financial information for the component units is reported
separately from the fmancial information presented for the primary government itself.
The government-wide financial statements can be found on pages 28-31 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 fmancial statements. Unlike
government-wide financial statements, however, governmental fund fmancial 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 twelve (12) 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,
Investment, and Debt Service Funds, all of which are considered to be major funds. Data from the
other eight (8) 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 92-105.
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 fmancial statements. Exhibit 4 (pages 34-35) and Exhibit 6 (pages 38-39)
provide a reconciliation to ease comparison between the fund financial statements and the
government-wide statements.
The basic governmental fund fmancial statements can be found on pages 32-39 of this report.
2) Proprietary Funds. The City maintains two types of proprietary funds:
a. 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 earued,
expenses incurred, and/or net income is appropriate for capital maintenance, public
policy, management control, accountability, or other purposes.
-14-
The City uses four enterprise funds to account for Solid Waste, Section Eight Housing,
Civic Center, and TISA, as well as certain component units that provide water and public
transit. TISA and Civic Center receive subsidy from the General Fund.
The City's component unit enterprises include the Paducah Water Works and Paducah
Transit Authority which provide water and public transportation. These component units,
each of which has their own board of directors, are also enterprise funds and are shown on
pages 52-55.
h. 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 106-108 of this report. Individual data for the
internal service funds is likewise presented in the form of combining statements on pages 109-
111 ofthis 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 fmancial statements
because those resources are not available to support City programs. Individual data for the
City's four (4) fiduciary funds (Appointive Employees' Pension, Police and Firefighters'
Retirement, Other Trust Funds, and Maintenance and Rehabilitation Trust) are presented in the
form of combining statements on pages 112-116 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 56-90 ofthis 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 94-115 ofthis report.
m. 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 $49.7 million as of June 30,2011.
For FY2011, the largest portion of the City's net assets (69%) reflects its investment in capital assets
(i.e., land, buildings, machinery, equipment, and infrastructure) less outstanding related debt used to
-15-
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.
An additional portion of City net assets (16%) represents resources that are subject to external
restrictions on how they may be used. The remaining balance of unrestricted net assets (15%) may
be used to meet the City's ongoing obligations to citizens and creditors.
As of June 30, 2011, the City reports positive balances of net assets, both for the governrnent as a
whole, as well as for its separate governrnental and business-type activities.
City of Paducah, Kentucky
Net Assets
June 30
Governmental Activities Business-Tl:Re Activities Total PrimarIGovernment
2011 2010 2011 2010 2011 2010
Current assets $36,714,968 $38,121,799 $ 6,555,797 $4,886,893 $43,270,765 $43,008,692
Capital assets 40,927,948 39,531,590 1,334,230 1,652,961 42,262,178 41,184,551
Other noncurrent
assets 7,715,136 7,822,828 7,715,136 7,822,828
Total assets 85,358,052 85,476,217 7,890,027 6,539,854 93,248,079 92,016,071
Current liabilities 11,727,758 9,880,596 475,439 372,106 12,203,197 10,252,702
Noncurrent liabilities 29,242,431 30,116,284 2,075,690 2,077,282 31,318,121 32,193,566
Total liabilities 40,970,189 39,996,880 2,551.129 2,449,388 43,521,318 42.446,268
Net assets:
Invested in capital
assets, net of related
debt 32,905,977 31,136,514 1,334,230 1,652,961 34,240,207 32,789,475
Restricted 7,252,385 6,177,722 999,885 620,800 8,252,270 6,798,522
Unrestricted 4,229,501 8,165,101 3,004,783 1,816,705 7,234,284 9,981,806
TOTAL NET
ASSETS $44,387,863 $45,479,331 $ 5,338,898 $4,090,466 $49,726,161 $42,569,803
-16-
The exhibit below charts the City's total net assets from the implementation of GASB 34 through
the present.
~ = .2
.. ~
= ....
60
50
40
30
20
10
0
Government Wide Analysis
Total Net Assets
2003 2004 2005 2006 2007 2008 2009 2010 2011
Annual increases to total net assets began in FY2005 primarily due to the increase of the City's
payroll tax and the creation of the Investment Fund. The additional tax generates approximately $4
million in revenue each year which is used mostly for capital investment. Increases have leveled off
for the past few years due to mid-year appropriations made by the Commission, reducing the City's
unreserved cash balance at June 30 to the minimum requirement of 8% each time.
The 2.4% decrease in net assets for governmental activities was driven by the liability accrued for
payment of judgment in the firefighters' overtime lawsuit. This matter is further explained in
Section VII of this discussion. Exclusive of this event, stable revenue (as a whole) and the
Commission's decisions described above have kept net assets for governmental activities relatively
flat.
The Solid Waste function continues to thrive in the second year following reorganization. The
decision to reorganize personnel, equipment, and routes, as well as the implementation of rate
increases in the previous years, have proven to generate a positive effect on the City's net assets.
A. Analysis of the City's Operations
The following table provides a summary of the City's operations for the years ended June 30, 2011
and 2010. Governmental activities would have resulted in an increase in the City's net assets by
$391,269; however, the lawsuit liability discussed above for $1,482,743 led to a decrease in net
assets of $1,091,474. Business-type activities increased the City's net assets by $1,248,432.
-17-
City of Paducah, Kentucky
Changes in Net Assets
June 30
Governmental Activities Business-Tvne Activities Total Priman:Government
Revenues: 2011 2010 2011 2010 2011 2010
Program revenues:
Charges for services $ 3,177,615 $ 2,828,209 $4,648,702 $4,617,153 $7,826,317 $ 7,445,362
Operating grants/
contributions 2,086,625 1,813,019 2,400,540 2,340,267 4,487,165 4,153,286
Capital grants/
contributions 1,767,093 1,390,848 8,659 27,239 1,775,752 1,418,087
General revenues:
Property taxes 4,402,226 4,207,736 4,402,226 4,207,736
Franchise taxes 140,570 149,642 140,570 149,642
Telecommunications tax 752,147 794,027 752,147 794,027
Insurance premium tax 3,476,309 3,797,347 3,476,309 3,797,347
Vehicle tax 598,509 585,495 598,509 585,495
Bank tax 218,137 204,522 218,137 204,522
Gross receipts license tax 4,243,511 4,229,102 4,243,511 4,229,102
Employee license tax 17,345,033 16,384,509 17,345,033 16,384,509
Other taxes 524,878 610,984 524,878 610,984
Intergovernmental
revenue 478,576 499,484 478,576 499,484
Unrestricted investment
earnings 264,913 172,213 46,052 33,724 310,965 205,937
Gain on sale of capital
assets 62,539 64,620 67,657 1,112 130,196 65,732
Insurance recoveries 410,462
Total revenues 7,171,610 7,019,495 47,120,753
Expenses:
General government 9,786,052 9,763,178 9,786,052 9,763,178
Public safety 16,993,228 16,239,042 16,993,228 16,239,042
Public service 7,328,806 7,669,729 7,328,806 7,669,729
Park and recreation 2,748,333 2,653,474 2,748,333 2,653,474
Planning and development 1,212,103 970,022 1,212,103 970,022
Interest on long-term debt 1,363,580 1,099,450 1,363,580 1,099,450
Solid Waste 3,832,130 3,797,097 3,832,130 3,797,097
Section Eight Housing 1,956,728 2,061,370 1,956,728 2,061,370
Civic Center 76,546 69,537 76,546 69,537
TISA 183,546 206,798 183,546 206,798
Litigation settlement
Total expenses 40,914,845 38.394,895 6,048,950 6,134,802 46,963,795
Increase (decrease) in
Net assets before transfers (965,702) (663,138) 1,122,660 884,693 156,958 221,555
Transfers (78,893) 125,772 78,893
Change in net assets (1,091,474) (742,031) 1,248,432 963,586 156,958 221,555
Net assets, July 1 46,221.368 4,090,466 3,126,880 49.569,803 49.348,248
NET ASSETS, JUNE 30 $45.479.337 $ 5.338,898 $4,090,466
-18-
B. Governmental Activities
As with most municipalities, the City's governmental activities are heavily subsidized by taxes with
little or no program revenue for each function. The chart below demonstrates the importance oftax
revenue to essential functions of the City.
'"
$20
$18
$16
$14
~ $12
g $10
~ $8
$6
$4
$2
$0
Government
Governmental Activities
Expenses and Program Revenues
recreation
• Expenses
• Revenues
The graph below depicts the breakdown of revenue by source for fiscal year 2011.
Cap1tallrautsl
contributioDs
4%
Operatlullr&Dts/
cODtributions
5%
revenue
1%
Other Taxes
60/0
recoveries
1%
Governmental Activities
Revenue by Source
iDvestmeut
eamiDp
1%
-19-
In fiscal year 2011, the City derived 80% of its revenue from taxesllicenses. Occupational licenses,
which include payroll withholding tax, business licenses, and insurance premium tax is the largest
source of income to the City, totaling $25.1 million. This category of revenue increased 2.7% from
fiscal year 2010. Employee license tax experienced the largest change within this category with an
increase of $960,524, while insurance premium tax decreased by $321,038. The increase in
employee license tax does not appear to be the result of one significant employer's activity, but the
result of several employers having moderate increases. Insurance premium tax continues to decline.
This is the third sequential year of decrease in this revenue, down 26.1 % since FY2008. City staff
has conducted extensive research in efforts to determine the reason for decline. General economic
downturn is believed to be a major factor, leading to downgrades in insurance coverage or
elimination of certain coverage altogether. Staff is continuing to monitor this revenue stream; and,
the FY2012 budget estimates for this revenue type are very conservative to reflect the uncertainty.
c. Business-Type Activities
The chart below shows the operating results for each of the City's business-type activities. These
activities should break-even; that is, the charges for services should be large enough to sustain
operations. For fiscal year 2011, business-type activities as a whole had an increase in net assets of
$1,248,432. This was primarily due to the performance of the Solid Waste Fund. Continuous
efforts have been made over the last few years to improve the performance of the Solid Waste
function. Department reorganization, including equipment and personnel, rate increases, reduced
spending, and elimination of unnecessary equipment, has been implemented. This has resulted in a
positive change in net assets in excess of $600,000 for the third year in a row.
5.00
4.50
4.00
3.50
3.00
2.50
2.00
1.50
1.00
0.50
Business-Type ActlvlUes
Expenses and Revenues
Solid Waste Section Eight Civic Center TISA
Housing
-20-
• Expenses
• Revenues
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 ofthe fiscal year.
At the end of the fiscal year, the City governmental funds reported combined ending fund balances
of $17.2 million. The categories of fund balances have changed significantly from the prior year
due to the implementation of GASB Statement No. 54, Fund Balance Reporting and Governmental
Fund Type Definitions.
• Restricted fund balance has external limitations on use that may be imposed by creditors,
grantors, contributors, or laws and regulations. At the end of the fiscal year, the City had
$892,175 of municipal aid funds which are restricted in use for paving by the State of
Kentucky.
• Committed fund balance has self-imposed limitations enacted by the highest level of decision
making that requires formal action at the same level to remove the limitations. The City had
$2,587,012 in fund balance committed for capital improvements in the Investment Fund.
• Assigned fund balance has limitations resulting from intended use. Formal action is not
required. Approximately 16% of the City's fund balance is assigned for various purposes,
including capital improvements, public safety, planning and development, and debt service.
• Unassigned fund balance is the total fund balance in the general fund in excess of the other
fund balance categories.
Governmental Funds Ending Fund Balance
Restricted for
Hlgbways and
Streets
Commlttedfdr:
Capital
15%
Assigned for
Cap~
'Assigned for
Safety
3%
\...A..sSI:!Cn&!id for
otber Pnrposes
1%
Approximately 64% of total fund balance, $10.9 million, is unassigned general fund fund balance
which is available for spending at the government's discretion but only up to the amount represented
by cash. At year-end, there was $5.6 million available as cash. The balance is tied up in other assets
-21-
including accounts receivable and property taxes collectible. City fiscal policy (Ordinance 2010-6-
7700) requires that an amount not less than 8% of the General Fund's budgeted expenditures remain
undesignated in the fund balance, or $2.5 million, which leaves $8.4 million as unreserved for fiscal
year 2011.
As a measure of General Fund liquidity, readers may compare unassigned (formerly reported as
''unreserved'') fund balance to total General Fund expenditures. Unassigned General Fund fund
balance represents approximately 35% of expenditures and transfers out ($31 million). This has
remained stable since the implementation of GASB 34, staying between approximately 30% and
35% since fiscal year 2003.
40.00%
35.00%
30.00%
20;00%
15.00%
10.00%
5.00%
0.00%
General Fund
Fund Balance as a % of Expenditures
The Investment Fund had a fund balance of $2.6 million, all of which is committed for capital
projects. The Investment Fund was authorized by the City Commission in fiscal year 2005-2006 as
a special revenue fund in which the use is restricted to property tax reduction, economic
development, community redevelopment, and capital and infrastructure projects. The Investment
Fund captures all manner of financial activities related to revenue from the Yz cent payroll tax
increase effective October 1,2005. The Investment Fund's fund balance decreased $258 thousand
from the prior year. Although payroll tax revenue increased, the fund was budgeted in FY2011 to
utilize dollars set aside in previous years, primarily to finance the demolition and related expenses of
a derelict hotel along the City's riverfront.
Fund balance in the General Capital Improvements fund decreased by approximately $653 thousand
from the prior year. This decrease is primarily due to a project undertaken by the City in FY2011 to
place utilities underground in an area of downtown along the floodwall in conjunction with an
economic development project. This expense was not part of the original budget; and, therefore,
there was no revenue in place to fund the project.
-22-
B. Proprietary Funds
The City's proprietary funds provide the same infonnation found in the government-wide financial
statements, but in more detail.
Net assets of the respective proprietary funds are:
Solid Waste
Section Eight Housing
Civic Center
TISA
$3,361,167
1,018,176
174,570
433,699
Combined total net asset change for the four funds was an increase of $1.1 million, broken down as
follows: Solid Waste ($709 thousand increase), Section Eight Housing ($375 thousand increase),
Civic Center ($10 thousand decrease), and TISA ($57 thousand increase). The most significant
change, Solid Waste, was discussed under Business Type Activities (Section III-C). Section Eight
experienced an increase in fund balance in FY2011 for the second year in a row. Annual HUD grant
funding is based on expected rentals for the year. During fiscal years 2008 and 2009, rental costs
exceeded what had been projected. For fiscal years 2010 and 2011, the Section Eight office
implemented a plan to reduce program expenditures so that reserves would be replenished.
V. General Fund Budgetary Highlights
Differences between the original budget and the final budget resulted in a $410 thousand increase in
appropriations and can be briefly summarized as follows:
Department
General administration
Finance
Planning
Human rights
Inspection
Infonnation systems
Risk management
Police
Fire
Public works
Engineering services
Recreation
PRDA
Other
Appropriations
Increase Decrease
(In Thousands)
$ $ 398
3
1
684
121
656
85
9
124
55
126
35
134
89
Appropriations decreased by $398 thousand in General Administration. Approximately one-half of
the Commission's budgeted contingency funds were transferred out of General Administration for
various projects during the year; the largest being an $80,860 transfer to the Police and Firefighters'
Retirement Fund to cover the budget shortage for the actuarial requirement for the year. Unspent
contingency funds of $243 thousand were removed from the General Administration budget in an
end-of-year budget adjustment.
Inspection, Police, and Public Works experienced decreases in excess of $100 thousand. These
decreases in appropriations were due to significant salary slippage in these departments.
-23-
Appropriations for Engineering Services increased $684 thousand. The activity for the City's
floodwall is accounted for in this department. The City experienced significant flooding in the
spring of2011. The Ohio River peaked at 55.03 feet on May 5, 2011, which is over 16 feet above
flood stage. Forty-five ofthe City's forty-seven flood gates were installed. This event was declared
a federal disaster; and, reimbursement from FEMA and the State is expected to be received in an
amount exceeding $400 thousand. Mitigation costs to prevent flooding of the PaducahlMcCracken
Convention & Expo Center were also expended through Engineering Services and are expected to
be reimbursed through insurance.
The Paducah Riverfront Development Authority (PRDA) was a new department created in FY2011
as a result of reorganization within the Paducah Renaissance Alliance (PRA). This department is
responsible for handling riverfront development issues associated with the Convention & Expo
Center and establishing a hotel along the riverfront to be linked to the convention facilities, in
addition to other riverfront development activities.
The "Other" Department is primarily composed of inter-fund transfers. The largest change in
appropriations within this department was an increase in transfers to the General Capital
Improvements resulting from the additional appropriations made from the Commission's
contingency funds.
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,
2011, is $42.3 million (net of accumulated depreciation). This investment in capital assets includes
land, buildings and improvements, vehicles and equipment, park facilities, roads, highways, 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 2011, projects and equipment expenditures totaled almost $5 million. Some of
the largest capital-type projects, in terms of dollars in fiscal year 2011, are shown in the following
table:
Hotel Demolition/Convention Center Wall Reconstruction
Sports Park Property Purchase
Noble Park Parking Lot
Underground UtilitieslParking Lot Construction
Olivet Church Road Property Acquisition
Homeland Security Bomb Squad Equipment
$1,208,765
612,000
623,915
571,084
409,853
291,501
In the upcoming years, several street, economic development, riverfront development, quality of
life, and drainage projects will continue and are estimated to cost several million dollars. Capital
improvement projects including infrastructure, recreational facility improvements, continued
neighborhood revitalization, and street and sidewalk rehabilitation are among the projects to be
addressed.
-24-
Land
City of Paducah, Kentucky
Capital Assets
(Net of Accumulated Depreciation)
June 30
Governmental Activities Business-TIne Activities
2011 2010 2011 2010
$ 7,394,561 $ 7,181,028 $ 62,152 $ 62,152
Total Primae: Government
2011 2010
$ 7,456,713 $ 7,243,180
Land improvements 1,643,180 1,729,014 1,643,180 1,729,014
Construction in progress 7,150,928 9,097,164 7,150,928 9,097,164
Buildings and
improvements 5,251,215 3,754,087 205,306 218,220 5,456,521 3,972,307
Infrastructure 14,990,871 13,361,137 14,990,871 13,361,137
Equipment 2,003,441 1,826,536 372,097 427,177 2,375,538 2,253,713
Furnishings and frxtures 2,556 4,081 2,556 4,081
Vehicles 2,491,196 2,578,543 694,675 945,412 3,185,871 3,523,955
TOTALS $40,921,948 $39.531,52Q $ 1,334,230 $42,262,118 $41,184,551
Additional information on City capital assets can be found in Note 3 in the notes to fmancial
statements on pages 70-73.
B. Long-Term Debt
At year-end, the City had $31,720,403 in outstanding bonds, accrued compensated absences, and
notes payable, compared to $33,306,354 at June 30, 2010, with maturities extending through 2031.
Convention and Performing Arts Center 2001
Kentucky League of Cities -2003
Infiniti Media Building -2004
General Fund accrued compensated absences
PolicelFirefighter Pension Fund Liability -2006
Floodwall Rehabilitation 2008
Convention Center Renovation -2008
HOME grant -2009
Public Improvement Projects -2010
Sports Park property -2010
Refmanced Convention Center-2010
Margaret Hank Agreement -2011
TOTALS
During the year, the City had two new debt issues:
Governmental Activities
$
2011 2010
2,358,171
3,780,000
1,929,712
5,125,000
2,564,948
2,364,039
6,370,000
7,040,000
188.533
$ 7,030,000
2,517,763
3,975,000
1,836,647
5,340,000
2,671,440
2,417,500
273,004
6,645,000
600,000
$31.720.403 $33,~Q6.354
Convention and Performing Arts Center -Refinance. In August 2010, a $7.165 million general
obligation was issued to advance refund $6.725 million of outstanding 2001 series bonds. The 2001
bonds were issued to fmance construction of the Luther F. Carson Four Rivers Center for the
Performing Arts and the expansion of the Julian Carroll Convention Center. The previous agreement
with McCracken County was renewed: 50% of the principal amount of the bond was issued on
behalf of McCracken County, Kentucky; and, the County has issued the City a general obligation
note in a principal amount equal to 50% ofthe principal amount of the bonds.
-25-
Margaret Hank Building Agreement. In June 2011, the City entered into an agreement in the
amount of $188,533 with Margaret Hank Memorial Cumberland Presbyterian Church to finance the
acquisition of real property to be used for the development of an indoor recreational facility.
Debt issues prior to July 1,2010, are described below:
Public Improvement Projects. In March 2010, a $6.645 million general obligation was issued to
finance several public improvement projects including a major park parking lot renovation and
several resurfacing projects, sports park property acquisition, pavilion acquisition, greenway trail
development, and a portion of the hotel purchase described earlier in this document.
Sports Park Property Purchase. In December 2009, the City entered into an agreement in the
amount of $600,000 with L. Wayne and Linda Lindsey to finance the acquisition of real property to
be used for the development of a sports park with soccer complex in the community. This obligation
will be met with bond proceeds issued in March 20 10.
Floodwall Rehabilitation. In March 2009, a $2.8 million general obligation was issued to finance
significant repairs to the City's 60-year-old floodwall. The first stage of a $6 million project, this
money was used to fund the relining of the pipes which have deteriorated with age.
Convention Center Renovation. In March 2009, McCracken County entered into an agreement in
the amount $5,000,000 with the Kentucky Association of Counties to finance renovations to the
Julian Carroll Convention Center. The note was issued by McCracken County; however, the City is
obligated for 50% of the principal amount through an Interlocal Cooperative Agreement between the
City and McCracken County.
Convention and Performing Arts Center. 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). 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 50010
of the principal amount of the bonds. This general obligation bond issue was advanced refunded in
August 2010, reducing debt service payments by $658,023 over the next 16 years.
Kentucky League of Cities. In fiscal year 2003, 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).
Infiniti Media Building. 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.
PolicelFirefighter Pension Fund Liability. In fiscal year 2006, the City issued $6.1 million in
general obligation bonds to finance the police and firefighter's pension fund estimated pension
liability.
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 $210,312,025. The City's latest bond rating
by Standard & Poor's is AA-. The City has a low amount of general obligation debt which explains
our large legal debt margin.
-26-
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. In fiscal
year 2011, less than 2% of the General Fund budget was expended for debt service and, thus, has
minimal impact on current and future operations.
Additional information on the City's long-term liability can be found in Note 3 in the notes to
financial statements on pages 74-78.
VII. Other Potentially Significant Matters.
A. Post-employment Benefits. Personal service costs make up over two-thirds of the City's annual
operating budget; and, that number is continuously affected by rising retirement costs. In the past
five years, the City's combined hazardous and non-hazardous retirement matching contribution has
increased from approximately $2.9 million in fiscal year 2007 to $3.9 million in fiscal year 2011.
The rates for FY2012 have increased. Combined with cost of living adjustments, this increase
caused budgeted figures for the upcoming year to increase another $410,000 compared to what was
incurred in FY2011. Based on trends and projections provided by the Retirement System, the long-
term outlook on funding requirements is of utmost concern.
B. Police & Fire Pension Fund (PFPF) Unfunded Liability. In fiscal year 2006, the City issued $6.1
million in general obligation bonds to eliminate the unfunded pension liability. With the sharp
decline in value of the national stock market in 2009, the PFPF's equity investment dropped
accordingly. PFPF net assets dropped in 2009 by nearly $3.5 million, or 28.5%, ofthe beginning net
assets (July 1, 2008). Since the 2009 drop, the City has contributed in excess of $400,000 annually
to meet the actuary's recommended amount toward the unfunded pension liability. The valuation as
of July 1, 2011, indicates the amount for FY20 12 will be $361,701.
C. Barry Carter et at. vs. City of Paducah. A lawsuit was filed against the City of Paducah under
Wage and Hour Law that affects 71 former and current firefighters named as Plaintiffs, relating to
the way the City administered State Incentive Overtime Pay for the five years preceding filing of the
lawsuit. Based upon the court's rulings that were entered in April and September 2011, the City's
liability in this lawsuit has been established at $1,482,743 and has been accrued on the government-
wide financial statements. Payment will be made for a significant amount of back pay and related
payroll expenses, interest, and a possible fee award to the plaintiffs attorney in FY2012.
D. Bond Refunding. In July 2011, the Commission approved an ordinance to refmance a bond issued
in 2004. The original bond issued was a 20-year/$5 million general obligation bond used to finance
the construction of the Infiniti Media Building. Through the remaining life of the bond issue
(through 2024), the savings by refinancing will be approximately $590,000 (net present value). The
bonds were sold July 2011.
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 fmancial information may be
addressed to Jonathan Perkins, Finance Director, City of Paducah, 300 South 5th Street, Paducah, KY
42001.
-27-
CITY OF PADUCAH, KENTUCKY
BASIC FINANCIAL STATEMENTS
GOVERNMENT-WIDE FINANCIAL STATEMENTS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2011
THIS PAGE INTENTIONALLY LEFT BLANK
Exhibit 1
CITY OF PADUCAH, KENTUCKY
STATEMENT OF NET ASSETS
JUNE 30, 2011
ASSETS Primary Government
Governmental Business-type Component
Current Assets: Activities Activities Total Units
Cash and cash equivalents $12,042,826 $3,925,737 $15,968,563 $ 2,722,745
Investments 4,500,000 1,625,000 6,125,000
Receivables, net:
Notes 1,200,282 1,200,282
Lease 180,754 180,754
Accounts 6,175,920 535,618 6,711,538 426,489
Grants 1,042,973 95,568 1,138,541 359,250
Interest 58,025 12,998 71,023
Property tax 4,459,265 4,459,265
Other 881,172
Internal balances (351,286) 35] ,286
Inventory 1,327,317 1,327,317 518,702
Prepaid pension obligation 5,634,932 5,634,932
Prepaid expenses 418,130 9,590 427,720 23,778
Other current assets 25,830 25,830 972,331
Total current assets 36,714,968 6,555,797 43,270,765 5,904,467
Noncurrent Assets:
Notes receivable 3,488,467 3,488,467
Lease receivable 3,428,067 3,428,067
Bond issuance costs, net 451,225 451,225
Net capital assets:
Land and construction in progress ]4,545,488 62,152 14,607,640 9,425,203
Depreciable capital assets 26,382,460 1,272,078 27,654,538 36,664,295
Other assets 347,377 347,377 2,178,584
Total noncurrent assets 48,643,084 1,334,230 49,977,314 48,268,082
Total assets 85,358,052 7,890,027 93,248,079 54,172,549
-28-
LIABILITIES Primary Government
Governmental Business-type Component
Current Liabilities: Activities Activities Total Units
Voucher and accounts payable $ 2,449,292 $ 2,774,162 $ 1,360,428
Accrued pay abIes 817,681 49,303 866,984 149,552
Due to other taxing agencies 14,623 14,623
Unearned revenue 4,311,611 4,311,611
Accrued compensated absences 1,008,713 75,436 1,084,149
Accrued interest 173,836 173,836
Notes payable due within one year 244,521 244,521 212,811
Bonds payable due within one year 1,224,738 1,224,738
Other current liabilities 1,482,743 25,830 1,508,573 1,186,155
Total current liabilities 11,727,758 475,439 12,203,197 2,908,946
Noncurrent Liabilities:
Accrued compensated absences 920,999 13,190 934,189
Landfill post-closure costs 2,062,500 2,062,500
Notes payable 4,666,222 4,666,222 6,269,718
Bonds payable 23,655,210 23,655,210
Total noncurrent liabilities 29,242,431 2,075,690 31,318,121 6,269,718
Total liabilities 40,970,189 2,551,129 43,521,318 9,178,664
NET ASSETS
Invested in capital assets, net
of related debt 32,905,977 1,334,230 34,240,207 39,399,573
Restricted for:
Housing and development projects 1,264,986 999,885 2,264,871
Capital projects 5,987,399 5,987,399
Unrestricted 4,229,501 3,004,783 7,234,284 12
TOTAL NET ASSETS $44,387,863 $49,726,761 $44,993,885
See accompanying notes to the basic financial statements.
-29-
FUNCTIONSIPROGRAMS
Primary Government:
Governmental activities:
General government
Public safety
Public service
Parks and recreation
Planning and development
Interest on long-term debt
CITY OF PADUCAH, KENmCKY
STAJEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2011
Expenses
$ 9,786,052
16,993,228
7,328,806
2,748,333
1,212,103
1,363,580
Cbarges for
Services
$ 1,051,509
790,650
1,205,666
129,790
Total governmental activities (See Note 1) 39,432,102 3,177,615
Business-type activities:
Solid Waste
Section Eight Housing
Civic Center
TL.'SA
Total business-type activities
TOTAL PRIMARY GOVERNMENT
Component Units:
Authorities:
Paducah Water Works
Paducah Transit Authority
TOTAL COMPONENT UNITS
General revenues:
3,832,130
1,956,728
76,546
183,546
6,048,950
$45,481,052
$ 7,250,667
4,584,350
$11,835,017
Taxes and licenses:
4,476,139
33,766
138,797
4,648,702
$ 7,826,317
$ 8,803,131
950,243
$ 9,753,374
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
Transient room tax
Unrestricted investment earnings
Gain (loss) on sale of capital assets
Insurance recoveries
Special item -litigation settlement
Miscellaneous
Total general revenues and special items
Transfers
Total general revenues, special items and transfers
Change in net assets
Net assets, July 1, 2010
NET ASSETS, JUNE 30, 2011
See accompanying notes to the basic financial statements.
-30-
Program Revenues
Operating
Grants and
Contributions
$ 212,259
1,091,927
91,978
479,665
210,796
2,086,625
69,642
2,330,898
2,400,540
$4,487,165
$
2,034,913
$2,034,913
Exbibit2
Capital
Grants and
Contributions
$ 400
1,345,735
420,958
1,767,093
8,659
8,659
$1,775,752
$ 211,190
943,367
$1,154,557
Net (Expense) Revenue and Changes in Net Assets
Primary Government
Governmental Business-type Component
Activities Activities Total Units
$ (8,521,884)
(13,764,916)
(5,610,204)
(2,618,543)
(732,438)
(32,400,769)
(32,400,769)
4,402,226
140,570
752,147
3,476,309
598,509
218,137
4,243,511
17,345,033
524,878
478,576
264,913
62,539
410,462
(1,482,743)
31,435,067
31,309,295
(1,091,474)
45,479,337
$ 44,387,863
$
713,651
374,170
(42,780)
(36,090)
1,008,951
1,008,951
46,052
67,657
113,709
1,248,432
4,090,466
$ (8,521,884)
(13,764,916)
(5,610,204)
(2,618,543)
(732,438)
(1,152,784)
(32,400,769)
713,651
374,170
(42,780)
(36,090)
1,008,951
(31,391,818)
4,402,226
140,570
752,147
3,476,309
598,509
218,137
4,243,511
17,345,033
524,878
478,576
310,965
130,196
410,462
(1,482,743)
31,548,776
31,548,776
156,958
49,569,803
$ 49,726,761
$
1,763,654
(655,827)
1,107,827
13,728
(314,274)
81,227
(219,319)
(219,319)
888,508
44,105,377
$44,993,885
-31-
Cash and cash equivalents
Investments
Accounts receivable:
Accounts
Grants
Interest
ASSETS
Property taxes (net of
allowances for uncol1ectibles)
Due from other funds
TOTAL ASSETS
CITY OF PADUCAH, KENTUCKY
BALANCE SHEET
GOVERNMENTAL FUNDS
JUNE 30, 2011
General
Fund
$ 4,141,768
1,500,000
6,870,580
700,440
8,846
4,534,265
575,812
$18,331,711
LIABILITIES AND FUND BALANCES
Liabilities:
Voucher and accounts payable
Accrued payroll and payroll taxes
Due to other funds
Due to other taxing agencies
Deferred revenue
Accrued compensated absences
Total liabilities
Fund Balances:
Restricted for:
Highways and streets
Committed for:
Capital improvements
Assigned for:
Capital improvements
Public service
Public safety
Planning and development
Debt service
Unassigned:
General Fund
Total fund balances
TOTAL LIABILITIES AND FUND BALANCES
See accompanying notes to the basic financial statements.
-32-
$ 925,780
756,576
1,015,450
14,623
4,498,774
180,387
7,391,590
10,940,121
10,940,121
$18,331,711
General
Capital
Improvements
$1,770,996
500,000
5,949
191,077
2,949
$2,470,971
$ 891,329
891,329
1,579,642
1,579,642
$2,470,971
Exhibit 3
Special
Revenue
Investment
Fund
$ 483,370
1,000,000
80,000
8,174
1,015,468
$2,587,012
$
2,587,012
2,587,012
$2,587,012
Debt Nonmajor Total
Service Governmental Governmental
Fund Funds Funds
$74,272 $2,077,832 $ 8,548,238
3,000,000
309,385 7,265,914
151,456 1,042,973
19,969
4,534,265
1,591,280
$74,272 $2,538,673 $26,002,639
$ $ 394,847 $ 2,211,956
46,596 803,172
1,015,450
14,623
41,605 4,540,379
180,387
483,048 8,765,967
892,175 892,175
2,587,012
554,144 2,133,786
568,483 568,483
40,823 40,823
74,272 74,272
10,940,121
74,272 2,055,625 17,236,672
$74,272 $2,538,673 $26,002,639
-33-
CITY OF PADUCAH, KENTUCKY
RECONCILIATION OF THE GOVERNMENTAL FUNDS
BALANCE SHEET TO STATEMENT OF NET ASSETS
JUNE 30,2011
Total fund balance -total governmental funds
Amounts reportedfor governmental activities in the Statement
of Net Assets are different because:
Delinquent property taxes receivable are not reported in the
governmental funds balance sheet since they are not considered
"available" revenues.
The long-term notes receivable are not reported in the governmental
funds balance sheet since they are not available to pay current period
expenditures.
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.
Inventory is not a current financial resource, and therefore, is not
reported in the governmental funds balance sheet.
A prepaid pension obligation is not a current financial resource, and
therefore, is not reported in the governmental funds balance sheet.
Capital assets used in governmental activities are not current financial
resources, and therefore, are not reported in the governmental funds
balance sheet. This amount includes capital assets of Internal Service
Funds.
Governmental funds report losses on direct financing leases when
incurred; whereas, the loss of direct financing leases are deferred and
amortized over the life of the lease in the Statement of Net Assets.
Bond issuance costs used in governmental activities are not current
financial resources, and therefore, are not reported in the
governmental funds balance sheet.
Other current liabilities not due and payable in the current period, and
therefore, not reported in the governmental funds balance sheet.
-34-
Exhibit 4
$17,236,672
177,282
3,597,371
24,658
1,253,953
5,634,932
40,927,948
347,377
451,225
(1,482,743)
(Continued)
CITY OF PADUCAH, KENTUCKY
RECONCILIATION OF THE GOVERNMENTAL FUNDS
BALANCE SHEET TO STATEMENT OF NET ASSETS
JUNE 30, 2011
Receivables from direct financing leases are not available in the
current period, and therefore, are deferred 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.
The portion of accrued compensated absences not due and payable in
the current period, and therefore, not reported in the governmental
funds balance sheet.
Long-term debts of ($29,790,691) are not due and payable in the
current period; and, therefore, they are not reported in the
governmental funds balance sheet. See Note 3 for detail. The long-
term debts are:
Due within one year
Due after one year
$ 1,469,259
28,321,432
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
Total liabilities
Net amount allocated to
business-type activities
$ 5,500,862
(871,236)
(351,286)
NET ASSETS OF GOVERNMENTAL ACTNITIES
See accompanying notes to the basic financial statements.
-35-
Exhibit 4
(Continued)
$ 3,608,821
(173,836)
(1,703,446)
(29,790,691)
4,278,340
$44,387,863
CITY OF PADUCAH, KENTUCKY
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2011
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):
Capital lease
Proceeds of refunding bond, net
Transfer to refunded bond escrow agent
Long-term debt draws
Long-term debt issued
Transfers in
Transfers out
Total other financing sources (uses)
Net change in fund balances
Fund balances, July I, 2010
FUND BALANCES, JUNE 30, 2011
See accompanying notes to the basic financial statements.
-36-
General
Fund
$ 5,753,774
21,456,796
576,309
1,644,256
122,500
1,106,635
30,660,270
5,151,370
15,267,598
5,410,058
2,781,663
486,239
29,096,928
1,563,342
910,855
(1,742,754)
(831,899)
731,443
10,208,678
$10,940,121
Exhibit 5
Special
General Revenue
Capital Investment
Improvements Fund
$ $
4,248,053
42,622
948,818
38,830 13,975
88,719
1,118,989 4,262,028
941,500
5,121,682
600,000
5,721,682 941,500
(4,602,693) 3,320,528
366,039
3,820,237 58,918
(236,261) (3,637,140)
3,950,015 (3,578,222)
(652,678) (257,694)
2,232,320 2,844,706
$ 1,579,642 $ 2,587,012
Debt Nonmajor Total
Service Governmental Governmental
Fund Funds Funds
$ $ 469,737 $ 6,223,511
25,704,849
235,281 811,590
552,502 553,238 1,148,362
399,445 2,992,519
30,532 205,837
595,536 1,790,890
552,502 2,283,769 38,877,558
5,151,370
1,586,538 16,854,136
1,036,445 6,446,503
2,781,663
738,797 1,680,297
486,239
5,121,682
1,360,584 273,004 2,233,588
1,519,329 1,519,329
2,879,913 3,634,784 42,274,807
(2,327,411) (1,351,015) (3,397,249)
405,796 405,796
7,165,000 7,165,000
(7,165,000) (7,165,000)
366,039
1,903,443 1,761,980 8,455,433
(2,585,098) (8,201,253)
2,309,239 (823,118) 1,026,015
(18,172) (2,174,133) (2,371,234)
92,444 4,229,758 19,607,906
$ 74,272 $ 2,055,625 $17,236,672
-37-
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, 201]
Net change in fund balances total governmental funds
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.
Inventory sales provide current financial resources and are reported
as revenues in governmental funds.
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. This
amount includes Internal Service Fund's capital outlays of $564,350.
Proceeds from the disposal of capital assets are reported gross in the
governmental funds because the related assets were recorded as
expenditures when purchased. However, the proceeds are netted
with the book value in the government-wide statement of activities.
This amount includes Internal Service Fund's book value of $18,217.
Collections on long-term notes receivable and related interest
receivable are revenues in the governmental funds when collected.
Delinquent property taxes receivable are not considered "available"
revenues in the governmental funds.
Direct financing leases receivable are not considered "available"
revenues in the governmental funds.
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.
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 resourees. Therefore,
depreciation expense is not reported as an expenditure in
governmental funds. This amount includes Internal Service Funds'
depreciation expense of $548,728.
-38-
Exhibit 6
$ (2,371,234)
233,424
(395,600)
4,833,547
(18,217)
(6,434)
91,942
(607,151)
(71,908)
(3,418,972)
(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, 2011
Proceeds from the issuance and draw down of debt provides current
financial resources and is reported as an other financing source in
governmental funds.
Capital acquisitions financed with long term financing excluded from
the governmental funds because it does not a produce or use current
financial resources
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.
Governmental funds report the effect of losses on direct financing
leases when incurred; whereas, these amounts are deferred and
amortized in the Statement of Activities.
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.
Long-term accrued compensated absences do not require the use of
current financial resources, and therefore, are not reported as
expenditures in governmental funds.
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.
Governmental funds report the litigation judgments in the period in
which they are determined.
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
Net of amount allocated to
business-type activities
Capital Outlays
Book value of disposals
Depreciation expense
$ 492,959
(117,916)
(564,350)
18,217
548,728
CHANGE IN NET ASSETS OF GOVERNMENTAL ACTIVITIES
See accompanying notes to the basic financial statements.
-39-
Exhibit 6
(Continued)
$ (366,039)
(188,533)
2,233,588
(26,894)
9,460
(65,142)
147,794
(l,482,743)
377,638
$ (1,091,474)
Exhibit 7
CITY OF PADUCAH, KENTUCKY
BUDGETARY COMPARISON STATEMENT (BUDGETARY BASIS)
GENERAL FUND
FOR THE YEAR ENDED JUNE 30,2011
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
Beginning budgetary fund balance $10,208,678 $10,208,678 $10,208,678 $
Resources (Inflows):
Taxes:
Real and personal,
current year 4,785,000 4,649,990 4,650,003 13
Real and personal,
prior year (net of refunds) 101,500 212,180 212,376 196
Franchise 150,000 148,375 148,380 5
Bank taxes 215,000 218,135 218,137 2
In lieu of tax payment 231,000 156,575 156,581 6
Penalty, interest and
advertising 42,500 63,310 63,320 10
Paducah Junior College
tax collections 304,975 304,977 2
Total taxes 5,525,000 5,753,540 5,753,774 234
Licenses:
Business licenses 4,120,000 4,243,510 4,243,510
Employee earnings 12,525,000 13,096,980 13,096,982 2
Comcast fees 307,250 305,800 305,961 161
Penalties 135,000 211,485 211,486 1
Alcoholic beverages 132,000 123,905 123,905
Insurance premium tax 4,186,000 3,476,305 3,476,309 4
Building permits 85,000 161,525 161,529 4
Electrical permits 22,500 37,520 37,522 2
Zoning change fees 7,500 8,145 8,148 3
Miscellaneous building
and electrical fees 500 210 210
KJDA payroll rebate (193,500) (208,770) (208,767) 3
Total licenses 21,327,250 21,456,615 21,456,795 180
Charges for services:
Tax collection fee 135,000 151,120 151,122 2
Administrative charge 231,300 237,300 237,300
Base court revenue 42,000 58,095 58,097 2
Recreation fees 172,750 128,190 129,791 1,601
Total charges for services 581,050 574,705 576,310 1,605
(Continued)
-40-
Exhibit 7
(Continued)
CITY OF PADUCAH, KENTUCKY
BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS)
GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2011
Variance with
Final Budget
Budgeted Amounts Actual Positive
Grants: Original Final Amounts (Negative)
Police State Incentive $ 320,000 $ 308,130 $ 308,133 $ 3
Police hiring supplement 184,000 157,185 157,186 1
Fire State Incentive 260,000 261,540 261,543 3
Ronald McDonald Grant 1,100 1,104 4
Kentucky League of Counties grants 410,460 410,462 2
Highway safety grant 25,000 41,235 41,237 2
Paducah Housing Authority 36,000
Federal emergency
management agency 458,450 458,454 4
Police supplemental grants 6,135 6,137 2
Total grants 825,000 1,644,235 1,644,256 21
Interest 115,100 122,495 122,500 5
Other:
Property rent and sales 651,565 650,455 652,250 1,795
Property upkeep and
maintenance 257,340 205,320 205,324 4
Contractual programs 7,500 4,765 4,769 4
E911 -GIS 24,600 24,600 24,602 2
Miscellaneous 199,015 219,025 219,690 665
Total other 1,140,020 1,104,165 1,106,635 2,470
Other financing sources:
Operating transfers in 179,380 910,340 910,855 515
Amounts available for appropriation 39,901,478 41,774,773 41,779,803 5,030
Charges to Appropriations (Outflows):
General government:
General administration:
Mayor and Commissioners 191,820 189,085 187,568 1,517
City Manager 360,420 397,425 395,214 2,211
City Clerk 175,690 176,950 174,619 2,331
Corporate Counsel 169,270 194,455 194,524 (69)
Non-departmental 613,720 709,580 709,501 79
Memberships and contingency 595,555 43,495 43,444 51
Civic beautification 4,010 1,790 1,612 178
Total general administration 2,110,485 1,712,780 1,706,482 6,298
(Continued)
-41-
Exhibit 7
(Continued)
CITY OF PADUCAH, KENTUCKY
BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS)
GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2011
Variance with
Final Budget
Budgeted Amounts Actual Positive
General government: Original Final Amounts (Negative)
Finance:
Finance administration $ 203,700 $ 175,070 $ 172,258 $ 2,812
Accounting and payroll 312,435 295,730 293,891 1,839
Human resources 269,860 272,470 268,556 3,914
Rental property 33,720 33,495 31,978 1,517
Radio operations 74,335 45,925 45,739 186
Revenue collection 393,270 380,020 377,917 2,103
Total finance 1,287,320 1,202,710 1,190,339 12,371
Planning:
Administration 253,990 255,185 254,948 237
Planning 83,775 86,735 86,618 117
Grants 165,715 164,345 164,174 171
Total planning 503,480 506,265 505,740 525
Human rights 60,375 50,990 49,759 1,231
Inspection:
Inspection administration 180,165 179,885 178,331 1,554
Construction 357,100 341,265 339,001 2,264
Code enforcement 408,005 300,395 297,066 3,329
Total inspection 945,270 821,545 814,398 7,147
Information technology 581,895 526,360 524,305 2,055
Risk management 110,960 111,900 109,889 2,011
Public safety:
Police:
Police administration 906,650 901,405 896,777 4,628
Patrol 6,236,970 6,044,350 6,038,406 5,944
Investigations 1,852,705 1,924,875 1,919,749 5,126
Total police 8,996,325 8,870,630 8,854,932 15,698
Fire:
Fire administration 234,715 274,170 273,877 293
Suppression 5,900,705 5,850,135 5,849,162 973
Prevention 189,530 179,055 178,528 527
Training 125,250 111,455 110,805 650
Total fire 6,450,200 6,414,815 6,412,372 2,443
(Continued)
-42-
Exhibit 7
(Continued)
CITY OF PADUCAH, KENTUCKY
BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS)
GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2011
Variance with
Final Budget
Budgeted Amounts Actual Positive
Public service: Original Final Amounts (Negative)
Public works:
Street maintenance $ 2,184,680 $ 2,139,915 $ 2,136,265 $ 3,650
Street lighting 515,000 544,890 544,888 2
Maintenance 1,108,625 989,440 984,570 4,870
Total pubJic works 3,808,305 3,674,245 3,665,723 8,522
Engineering services:
Engineering services 573,345 554,575 551,452 3,123
GIS operation
Flood control 492,945 1,195,565 1,192,883 2,682
Total engineering services 1,066,290 1,750,140 1,744,335 5,805
Parks and recreation
Parks administration 774,330 723,385 718,834 4,551
Grounds maintenance 1,418,070 1,438,045 1,437,183 862
Pool 124,830 163,665 162,053 1,612
Recreation programs 563,910 467,145 463,595 3,550
Total recreation 2,881,140 2,792,240 2,781,665 10,575
PRDA 121,200 120,806 394
Other:
Cable authority 85,690 84,240 84,189 51
Mainstreet program 363,465 209,565 207,661 1,904
Leave expense 19,360 19,356 4
Intergovernmental expense 304,980 304,977 3
Total other 449,155 618,145 616,183 1,962
Other financing uses:
Operating transfers out 1,255,920 1,743,575 1,742,754 821
Total charges to appropriations 30,507,120 30,917,540 30,839,682 77,858
BUDGETARY FUND BALANCE,
JUNE 30, 2011 $ 9,394,358 $10,857,233 $10,940,121 $82,888
See accompanying notes to the basic financial statements.
-43-
CITY OF PADUCAH, KENTUCKY
BUDGETARY COMPARISON STATEMENT
GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2011
Exhibit 8
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 other 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
See accompanying notes to the basic financial statements.
-44-
General
Fund
$41,779,803
(10,208,678)
(910,855)
$30,660,270
$30,839,682
(1,742,754)
$29,096,928
Exhibit 9
CITY OF PADUCAH, KENTUCKY
BUDGETARY COMPARISON STATEMENT (BUDGETARY BASIS)
SPECIAL REVENUE INVESTMENT FUND
FOR THE YEAR ENDED JUNE 30, 2011
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
Beginning budgetary fund balance $2,844,706 $2,844,706 $
Resources (Inflows):
Licenses:
Employee earnings 4,175,000 4,248,050 4,248,053 3
Interest 13,975
Total licenses 4,175,000 4,262,025 4,262,028 3
Other financing sources:
Long-term debt issued
Operating transfers in 58,915 58,918 3
Total licenses 58,915 58,918 3
Amounts available for appropriation 7,019,706 7,165,646 7,165,652 6
Charges to Appropriations (Outflows):
General government:
Planning and development:
Economic development 1,169,500 941,500 941,500
Other financing uses:
Operating transfers out 3,607,500 3,637,145 3,637,140 5
Total charges to appropriations 4,777,000 4,578,645 4,578,640 5
BUDGETARY FUND BALANCE,
JUNE 30, 2011 $2,242,706 $2,587,001 $ 11
See accompanying notes to the basic financial statements.
-45-
CITY OF PADUCAH, KENTUCKY
BUDGETARY COMPARISON STATEMENT
SPECIAL REVENUE INVESTMENT FUND
FOR THE YEAR ENDED JUNE 30,2011
Exhibit 10
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
Proceeds from the issuance of debt are inflows of budgetary
resources, but are not revenues for financial
reporting purposes
Transfers from other 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
See accompanying notes to the basic financial statements.
-46-
$ 7,165,652
(2,844,706)
(58,918)
$ 4,262,028
$4,578,640
(3,637,140)
$ 941,500
CITY OF PADUCAH, KENTUCKY
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
JUNE 30, 2011
Business-type Activities
ASSETS
Current Assets:
Cash and cash equivalents
Investments
Accounts receivable
Grants receivable
Interest receivable
Prepaid expenses
Inventory
Total current assets
Noncurrent Assets:
Net capital assets:
Land
Depreciable capital assets
Total noncurrent assets
Total assets
LIABILITIES
Current Liabilities:
Voucher and accounts payable
Accrued payroll and payroll taxes
Accrued compensated absences
Due to other funds
Total current liabilities
Noncurrent Liabilities:
Landfill post-closure costs
Accrued compensated absences
Total noncurrent liabilities
Total liabilities
NET ASSETS
Invested in capital assets
Restricted for:
Housing development projects
Unrestricted
TOTAL NET ASSETS
Solid
Waste
$2,410,231
1,625,000
525,989
95,568
12,998
4,669,786
62,152
1,006,756
1,068,908
5,738,694
191,753
49,303
73,971
315,027
2,062,500
2,062,500
2,377,527
1,068,908
2,292,259
$3,361,167
Reconciliation to government-wide statements of net assets:
Adjustment to reflect the consolidation of Internal Service Funds'
activities related to Enterprise Funds
NET ASSETS OF BUSINESS-TYPE ACTIVITIES
See accompanying notes to the basic financial statements.
-47-
Nonmajor
Enterprise
Funds
$1,515,506
9,629
9,590
1,800,047
133,117
1,465
160,412
173,602
265,322
999,885
361,238
$1,626,445
Totals
$3,925,737
1,625,000
535,618
95,568
12,998
9,590
6,204,511
62,152
1,272,078
7,538,741
324,870
49,303
75,436
475,439
2,062,500
190
2,075,690
129
1,334,230
999,885
2,653,497
4,987,612
351,286
Exhibit 11
Governmental
Activities
Internal
Service
Funds
$3,494,588
1,500,000
14,780
418,130
73,364
5,500,862
2,659,287
2,659,287
8,160,149
260,848
14,509
550,000
825,357
45,879
45,879
2,659,260
CITY OF PADUCAH, KENTUCKY
STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN FUND NET ASSETS
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2011
Business-type Activities
Nonmajor
Solid Enterprise
Operating Revenues: Waste Funds
Charges for services -internal $ $ 134,812
Charges for services -external 4,333,813 2,363,081
Miscellaneous 94,052 5,569
Total operating revenues 4,427,865 2,503,462
Operating Expenses:
Cost of sales and service 3,483,654 2,167,804
Depreciation and amortization 348,476 49,147
Total operating expenses 3,832,130 2,216,951
Operating income (loss) 595,735 286,511
Nonoperating Revenues (Expenses):
Interest and investment income 45,715 467
Gain (loss) on disposal of property
and equipment 67,657
Total nonoperating revenues (expenses) 113,372 467
Income (loss) before contributions and
transfers 709,107 286,978
Contributions and Transfers:
Capital contributions 8,659
Transfers in 125,772
Transfers out
Total contributions and transfers 134,431
Change in net assets 709,107 421,409
Total net assets, July 1,2010 2,652,060 1,205,036
TOTAL NET ASSETS JUNE 30,2011 $3,361,167 $1,626,445
Reconciliation to government-wide statements of net assets:
Adjustment to reflect the consolidation of Internal Service Funds'
activities related to Enterprise Funds
CHANGE IN NET ASSETS OF BUSINESS-TYPE ACTIVITIES
See accompanying notes to the basic financial statements.
-48-
Totals
$ 134,812
6,696,894
99,621
6,931,327
5,651,458
397,623
6,049,081
882,246
46,182
67,657
113,839
996,085
8,659
125,772
134,431
1,130,516
117,916
$1,248,432
Exhibit 12
Governmental
Activities
Internal
Service
Funds
$5,598,538
256,160
5,854,698
4,542,210
548,728
5,090,938
763,760
46,076
62,540
108,616
872,376
(379,417)
(379,417)
492,959
6,795,954
$7,288,913
CITY OF PADUCAH, KENTUCKY
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2011
Business-type Activities
Cash Flows from Operating Activities:
Cash received from customers
Cash received from interfund services provided
Payments to suppliers
Payments to employees
Claims paid
Payments to internal service funds
Other receipts
Other 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, 2010
CASH AND CASH EQUN ALENTS, JUNE 30,2011
Reconciliation of Operating Income (Loss) to Net
Cash Provided (Used) 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
Due to other funds
Accrued expenses
Accounts payable
NET CASH PROVIDED (USED) BY OPERATING
ACTIVITIES
See accompanying notes to the basic financial statements.
Solid
Waste
$ 4,372,526
(1,473,861)
(1,336,053)
(581,455)
63,497
1,044,654
(52,768)
67,658
14,890
650,000
45,715
(750,000)
(54,285)
1,005,259
1,404,972
$ 2,410,231
$ 595,735
348,476
8,158
15,652
76,633
$ 1,044,654
-49-
Nonmajor
Enterprise
Funds
$ 2,492,462
(137,320)
(4,223)
5,569
(2,019,914)
336,574
125,772
8,659
(26,124)
(17,465)
467
467
445,348
1,070,158
$ 1,515,506
$ 286,511
49,147
(5,431)
(3,108)
(1,770)
11,225
$ 336,574
Totals
$ 6,864,988
(1,473,861)
(1,473,373)
(585,678)
69,066
(2,019,914)
1,381,228
125,772
8,659
(78,892)
67,658
(2,575)
650,000
46,182
(750,000)
(53,818)
1,450,607
2,475,130
$ 3,925,737
$ 882,246
397,623
2,727
(3,108)
13,882
87,858
$ 1,381,228
Exhibit 13
Governmental
Activities
Internal
Service
Funds
$
5,870,692
(228,335)
(280,349)
(2,636,652)
(1,291,392)
1,433,964
(379,417)
(564,350)
80,756
(483,594)
46,076
(250,000)
(203,924)
367,029
3,127,559
$ 3,494,588
$ 763,760
548,728
15,994
(403,130)
(2,398)
550,000
9,829
(48,819)
$ 1,433,964
CITY OF PADUCAH, KENTUCKY
STATEMENT OF NET ASSETS
FIDUCIARY FUNDS
JUNE 30, 2011
Exhibit 14
Primary Government
ASSETS
Cash and cash equivalents
Receivables:
Accounts
mterest
mvestments at fair value:
Money market funds
Certificates of deposit
Common stock
Corporate bonds
U.S. agencies bonds
Mutual funds
Total assets
LIABILITIES
Voucher and accounts payable
Due to other funds
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.
-50-
Pension
Funds
$ 14,955
30,886
228,148
125,000
2,658,537
1,745,601
1,677,033
2,372,434
8,852,594
168
168
$8,852,426
Private-
purpose
Trusts
$ 49,226
1,000
1,109,092
1,159,318
885
885
$1,158,433
Agency
Funds
$133,077
133,077
133,077
$133,077
Additions:
Contributions:
Employer
Plan members
futergovernmental revenues
Private donations
futerfund transfers in
Total contributions
fuvestment income:
Net increase (decrease) in
fair value of investments
Loss on sale of investments
futerest and dividends
Net investment income
Total additions
Deductions:
Benefits
Capital outlay
Administrative expenses
futerfund transfers out
Total deductions
Change in net assets
Net assets, July 1, 2010
NET ASSETS, JUNE 30, 2011
CITY OF PADUCAH, KENTUCKY
STATEMENT OF CHANGES IN NET ASSETS
FIDUCIARY FUNDS
FOR THE YEAR ENDED JUNE 30,2011
See accompanying notes to the basic financial statements.
-51-
Pension
Funds
$ 451,428
5,033
456,461
1,304,282
244,543
1,548,825
2,005,286
1,719,034
55,367
1,774,401
230,885
8,621,541
$8,852,426
Exhibit 15
$
Private-
purpose
Trusts
10,025
40,000
50,025
160,519
13,340
19,612
193,471
243,496
79,139
14,447
535
94,121
149,375
1,009,058
$1,158,433
CITY OF PADUCAH, KENTUCKY
BASIC FINANCIAL STATEMENTS
COMPONENT UNITS FINANCIAL STATEMENTS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2011
THIS PAGE INTENTIONALLY LEFT BLANK
ASSETS
Current Assets:
Cash and cash equivalents
Receivables, net:
Accounts
Grants
Other
Inventories
Prepaid expenses
Other current assets
Total current assets
Noncurrent Assets:
Net capital assets:
CITY OF PADUCAH, KENTUCKY
STATEMENT OF NET ASSETS
COMPONENT UNITS
JUNE 30, 2011
Paducah
Water
Works
$ 2,298,823
374,287
881,172
508,702
972,331
5,035,315
Land and construction in progress
Depreciable capital assets
8,938,889
32,332,797
2,178,584 Other assets
Total noncurrent assets
Total assets
-52-
43,450,270
48,485,585
Paducah
Transit
Authority
$ 423,922
52,202
359,250
10,000
23,778
869,152
486,314
4,331,498
4,817,812
5,686,964
Exhibit 16
All
Component
Unit
Totals
$ 2,722,745
426,489
359,250
881,172
518,702
23,778
972,331
5,904,467
9,425,203
36,664,295
2,178,584
48,268,082
54,172,549
All
LIABILITIES Paducah Paducah Component
Water Transit Unit
Current Liabilities: Works Authority Totals
Voucher and accounts payable $ 752,832 $ 607,596 $ 1,360,428
Accrued payables 149,552 149,552
Notes payable due within one year 170,109 42,702 212,811
Other current liabilities 936,155 250,000 1,186,155
Total current liabilities 1,859,096 1,049,850 2,908,946
Noncurrent Liabilities:
Notes payable 6,234,636 35,082 6,269,718
Total noncurrent liabilities 6,234,636 35,082 6,269,718
Total liabilities 8,093,732 1,084,932 9,178,664
NET ASSETS
Net Assets:
Invested in capital assets,
net of related debt 34,872,994 4,526,579 39,399,573
Unrestricted 5,518,859 75,453 5,594,312
TOTAL NET ASSETS $40,391,853 $4,602,032 $44,993,885
See accompanying notes to the basic financial statements
-53-
FUNCTIONSIPROGRAMS
Authorities:
Business-type activities:
Paducah Water Works
Paducah Transit Authority
TOTAL COMPONENT UNITS
General Revenues:
Unrestricted investment earnings
Gain (loss) on disposal of assets
Miscellaneous general
Total general revenues and transfers
Change in net assets
Net assets, July 1, 2010
NET ASSETS, JUNE 30,2011
CITY OF PADUCAH, KENTUCKY
STATEMENT OF ACTNITIES
COMPONENT UNITS
FOR THE YEAR ENDED JUNE 30, 2011
Charges for
Expenses Services
$ 7,250,667 $ 8,803,131
4,584,350 950,243
$11,835,017 $ 9,753,374
See accompanying notes to the basic financial statements.
-54-
Exhibit 17
Program Revenues
Operating Capital
Grants and Grants and
Contributions Contributions
$ $ 211,190
2,034,913 943,367
$2,034,913 $1,154,557
Net (Expense) Revenue and Changes
in Net Assets
Paducah Paducah
Water Transit
Works Authority Totals
$ 1,763,654 $ $ 1,763,654
(655,827) (655,827)
1,763,654 1,107,827
13,523 205 13,728
(314,274) (314,274)
81,227
(300,751) 81,432 (219,319)
1,462,903 (574,395) 888,508
38,928,950 5,176,427 44,105,377
$40,391,853 $44,993,885
-55-
CITY OF PADUCAH, KENTUCKY
NOTES TO THE FINANCIAL STATEMENTS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2011
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30,2011
Note 1 -Summary of Significant Accounting Policies:
General Statement
The City of Paducah (City) complies with generally accepted accounting principles (GAAP) as applied to
governmental units. This requires the use of the accrual basis of accounting for government-wide
financial statements and proprietary funds financial statements and a modified accrual basis of accounting
for the governmental funds financial statements. The Governmental Accounting Standards Board (GASB)
is the accepted standard-setting body for establishing governmental accounting and financial reporting
principles. 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
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 fmancial 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; and, the City is able to impose its will on the organizations.
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.
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.
(Continued)
-56-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
Note 1 -Summary of Significant Accounting Policies:
Discretely Presented Component Units
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
Transit Authority of the
City of Paducah
850 Harrison Street
Paducah, Kentucky 4200 1
City officials are also responsible for appointing the members of boards of other organizations; but, the
City's accountability for these organizations does not extend beyond appointing authority. The
organizations listed below are notable related organizations which have not been included in the City's
report.
Paducah Housing Authority -The Paducah Housing Authority (PHA) is a legally separate entity that
provides for construction, operation, and management of low income housing projects within the City.
PHA is a legally separate entity and is not financially accountable to the City. This organization is not
included as a component unit of the City.
Paducah Power System -The Paducah Power System (PPS) is a legally separate entity that provides
electric utilities to residents in the Paducah area. PPS 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 l, 1999, the assets and liabilities of the WastewaterlStormwater 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 Vlllage, 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 (P.Je) -The College is a part of the University of Kentucky
Community College System which is now administered by the Kentucky Community and Technical
Co]]ege 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.
Mainstreet Mainstreet is a 501 (c)3 established for the promotion of cultural and economic growth in
Downtown Paducah. Mainstreet 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)
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CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCLAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
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.
Special Revenue Investment Fund -To account for restricted funds from employee license fee used for
economic development, community redevelopment and infrastructure capital investments within
Paducah.
Debt Service Fund -To account for the accumulation of resources and payment of bond and note
principal and interest, and capital lease activity.
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)
-58-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
Note 1 -Summary of Significant Account Policies:
Basis of Presentation
Fund Financial Statements
Fiduciary funds report resources held in trust. 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). Pension trust funds report the receipt, investment, and
distribution of retirement contributions. The remaining funds are private-purpose trust funds which report
the receipt and distribution of in accordance with maintenance trust agreements.
The Agency Fund accounts for the City'S payroll wages, taxes and related withholdings.
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.
ill 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 general1y inc1uded 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, pension and private-purpose trust funds, and financial statements of City
component units utilize 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, pension and private-purpose
trust 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
ill the government-wide Statement of Net Assets and Statement of Activities, both governmental and
business-type activities are presented using the accrual basis of accounting generally including the
reclassification or elimination of internal activity (between or within funds). Under the accrual basis of
accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred
or economic asset used.
ill 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
(Continued)
-59-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
Note 1 . Summary of Significant Account Policies:
Basis of Accounting
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, pension, and private-purpose 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.
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.
A vailable 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. Permit revenues are not susceptible to accrual
because generally they are not measurable until received in cash.
Deferred/unearned revenue
The City reports unearned revenue on its government-wide statement of net assets and deferred revenue on
the fund financial statements. Deferred/unearned revenues arise when potential revenue does not meet
both the "measurable" and "available" criteria for recognition in the current period. Deferred/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 deferred/unearned revenue is removed and revenue is recognized.
Allocation of Indirect Expenses
The City allocates indirect expenses primarily comprised of fleet management services and various self-
funded insurance coverage provided to departments and employees of the City not directly allocated.
Allocations are charged to functions based on use by weighted-average methodology.
Budgets and Budgetary Accounting
The City legally adopts annual budgets for all governmental and proprietary funds except for Section Eight
Housing Fund. The City follows these procedures in establishing the budgetary data reflected in these
financial statements:
(Continued)
-60-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
Note 1 -Summary of Significant Accounting Policies:
Budgets and Budgetary Accounting
1. Prior to July, the City Manager submits to the City Commission a proposed operating budget for the
fiscal year commencing on July 1. The operating budget includes proposed expenditures and the
means of financing those.
2. Public hearings are conducted by the City to obtain taxpayer comments.
3. Prior to July, the budget is legally enacted through passage of an ordinance.
4. The City Manager is authorized to transfer budgeted amounts between department line items;
however, any revisions that alter the total expenditures of any department must be approved by the
City Commission.
5. Formal budgetary integration is employed as a management control device during the year; and, the
budget is legally adopted. Budget amendments are also legally adopted.
6. The budget is adopted on a basis (budget basis), which differs from generally accepted accounting
principles (GAAP basis).
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, 2011.
Cash and Investments
The City Council updated and adopted formal deposit and investment policies in January 2001. These
policies apply to all City funds not contained in public trusts. Pension trust fund has investment policies
separately approved by their oversight board. The private purpose trust has no adopted deposit and
investment policy.
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. Securities traded on a national or international
exchange are valued at the last reported sales price at current exchange rates. Managed funds, related to
the pension and private purpose trust funds not listed on an established market, are reported at estimated
fair value as determined by the respective fund managers based on quoted sales prices of the underlying
securities. Cash deposits and certificates of deposit are reported at carrying amount which reasonably
estimates fair value. Additional cash and investment disclosures are presented in Note 3.
Receivahles
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, employee
earnings taxes, business licenses, insurance premiums taxes, franchise taxes, grant revenue, and interlocal
note receivable. Business-type activities report utilities and interest earnings as their major receivables.
(Continued)
-61-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
Note 1 -Summary of Significant Accounting Policies:
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, receivables in
governmental funds include revenue accruals such as franchise tax, employee earnings taxes, business
licenses, insurance and grants, and other similar intergovernmental revenues since they are usually both
measurable and available.
Nonexchange transactions collectible but not available are deferred. 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 receivables include 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.
Intenund 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.
Inventories
Inventories are stated at cost on a first-in, first-out basis. Inventory consists of expendable supplies of
$73,363 held for consumption and real property of $1,253,954 held for urban development.
Capital Assets
The accounting treatment of property, plant, and equipment (capital 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, property, plant, and equipment are accounted for as capital
assets. All capital assets are valued at historical cost, or estimated historical cost if actual is unavailable,
except for donated capital 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, $2,500 or more after July 1,
1999, and $3,000 or more after June 24, 2009. Prior to July 1, 2002, governmental funds' infrastructure
assets were not capitalized. These assets have been valued at estimated historical cost.
(Continued)
-62-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
Note 1 -Summary of Significant Accounting Policies:
Capital Assets
Capital assets of the primary government are depreciated over the estimated useful lives using the straight-
line method. The estimated useful lives are as follows:
Land improvements
Buildings
Building improvements
Infrastructure
Equipment
Furnishings and fixtures
Vehicles
Fund Financial Statements
10-15 Years
30 Years
10-15 Years
15-30 Years
7-9 Years
3-5 Years
5-7 Years
In the fund financial statements, capital assets used in governmental fund operations are accounted for as
capital outlay expenditures of the governmental fund upon acquisition. Capital 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
matured compensated absence liability payable from expendable available financial resources, while the
proprietary funds report the liability as it is incurred.
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. Qualified participants in the County Employee's
Retirement System, under certain circumstances, are eligible to convert accrued sick pay benefits into
additional credit for years of service upon retirement.
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, notes 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.
(Continued)
-63-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2010
Note 1 -Summary of Significant Accounting Policies:
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 and displayed in five components:
a. Nonspendable fund balance includes amounts that are not in a spendable form or are required to be
maintained intact indefinitely.
b. Restricted fund balance includes amounts that can be spent only for the specific purpose stipulated
by creditors, grantors, contributors, or laws or regulations of other governments.
c. Committed fund balance includes amounts that can be used only for the specific purposes
determined by the City Commissioners through the approval of City ordinances. Commitments
may be changed or lifted only by the City Commissioners making the same formal action that
imposed the constraint originally.
d. Assigned fund balance comprises the amounts intended to be used for a specific purpose. Intent can
be expressed by the City Commissioners or the City Finance Officer. No formal action is required.
e. Unassigned fund balance is the residual balance not contained in nonspendable fund balance or
restricted fund balance or committed fund balance or assigned fund balance.
When both restricted and unrestricted fund balances are available for use, it is the City'S policy to use
restricted fund balance first, then unrestricted fund balance. Furthermore, committed fund balances are
reduced first, followed by assigned amounts, and then unassigned amounts when expenditures are
incurred for purposes for which amounts in any of those unrestricted fund balance classifications can be
used.
Proprietary fund equity is classified the same as in the government-wide statements.
Interfund Transactions
Interfund services provided and used 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.
All other interfund transactions are reported as operating transfers.
(Continued)
-64-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
Note 1 • Summary of Significant Accounting Policies:
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:
Proprietary Fund -by operating and nonoperating
Current (further classified by function)
Debt Service
Capital Outlay
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.
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.
(Continued)
-65-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
Note 1· Summary of Significant Accounting Policies:
Stewardship, Compliance, and Accountability
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
Section Eight Housing Choice Voucher Program
FEMA -Disaster Grants
American Recovery & Reinvestment Act Grants
HOME Investment Partnerships Grant
Emergency Communication Revenue
County Bed Tax
Homeland Security Grant Program
Kentucky Housing Corporation
Other Grants
25% of Employee Earning Tax
Revenue Restrictions
Legal Restrictions of Use
Subsidize Rental Costs for Low-
Income Families
Debris Removal and Disaster Recovery
Job creation and retention
Construction of Low-income
Rental Units
E-911 Emergency Services
Debt Obligations
Homeland Security Enhancement
Fa~ade Loans
Grant Program Expenditures
Economic, Community and
Capital Development
For the year ended June 30, 2011, 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.
Subsequent Events
In preparing these fInancial statements, management has evaluated events and transactions for potential
recognition or disclosure through December 16, 2011, the date financial statements were available to be
issued.
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)
-66-
Note 2 -Property Taxes:
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
The due dates and collection period for all property taxes, exclusive of vehicle taxes, for the fiscal year
ended June 30, 2011, are as follows:
Description
Assessment and enforceable lien
Levy
Face value amount payment dates
Delinquent date -10% penalty
plus 112% per month
Note 3 • Detail Notes on Transaction Classes! Accounts:
Date
January 1,2010
September 25,2010
1 st half by November 1, 2010
2nd half by February 1, 2011
1 st half -November 30, 2010
2nd half -February 28, 2011
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
Custodial credit risk for deposits is the risk that in the event of a bank failure, the City's deposits may not
be returued or the City will not be able to recover collateral securities in the possession of an outside party.
The City's investment policy requires all investments be made in accordance with applicable legal
requirements with consideration of investment safety. Accordingly, the City maintains collateral
agreements with its financial institutions. Deposits are 10 1 % secured with collateral valued at market or
par, whichever is lower, less the amount of the Federal Deposit Insurance Corporation insurance (FDIC).
The City Commission approves and designates a list of authorized depository institutions based on
evaluation of solicited responses and certifications provided by financial institutions and recommendations
of an evaluation committee and/or Finance Director.
Deposits
Deposits of the City'S reporting entity are insured or collateralized with securities held by the City, its
agent, or by the pledging financial institution's trust department or agent in the name of City. During the
year ended June 30, 2011, the City's only cash and cash equivalents were demand deposits. At year end,
the carrying amount and the bank balance of the City'S cash and cash equivalents was $16,165,821 and
$16,779,360, respectively.
(Continued)
-67-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
Note 3 -Detail Notes on Transaction Classes/Accounts:
Investments
As of June 30, 2011, the City's reporting entity had the following investments:
Fair Value! Average Investment Maturities (In Years) (2)
Types of Investments
Primary Government
Certificates of deposit (2)
TOTAL PRIMARY
GOVERNMENT
Fiduciary and Private
Purpose Trust Funds
Money market funds
Certificates of deposit (1)
Common stock
Corporate bonds
U.S. agencies
Mutual funds
Equity
TOTAL FIDUCIARY AND
PRIVATE PURPOSE
TRUST FUNDS
Carrying Credit Quality!
Amount Rating (1)
$6,125,000 NA
$6,125,000
$ 228,148 NA
125,000 NA
2,658,537 NA
1,745,601 AlA-
1,677,033 AAAlA
2,372,434 NA
$8,806,753
Less
Than!
$6,125,000 $
$ 230,787 $
125,000
NA
NA
1·5
-$
-$
NA
1,695,460
1,487,033
NA
6-10
Greater
Than 10
-$
$
NA NA
50,141
190,000
NA NA
(1) Ratings are provided where applicable to indicate associated Credit Risk. NA indicates not applicable.
NR indicates that instrument is not rated.
(2) Maturities are provided for debt instruments with maturity dates. NA indicates not applicable.
(3) $125,000 of the fiduciary's certificates of deposit is pooled with the primary government's certificates
of deposit.
Investment Policies
City Policy
Credit Risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations.
Generally, the City'S investing activities are managed under the custody of the City's Finance Director.
Investing is performed in accordance with investment policies adopted by the City Commission complying
with State Statutes. In accordance with the City'S investment policy and the State Statutes, the City may
invest funds temporarily in excess of operating needs in the following:
Kentucky Revised Statutes (KRS 66.480) authorize the City to invest in:
1. Obligations of the U.s. Treasury, agencies, and instrumentalities, including obligations subject to
repurchase agreements, provided delivery of obligations subject to repurchase agreements are held
by the City or through an authorized agent;
2. Obligations and contracts for future delivery or purchase of obligations backed by the full faith and
credit of the United States or a United States government agency;
3. Obligations of any corporation of the United States government;
(Continued)
-68-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
Note 3 -Detail Notes on Transaction Classes/Accounts:
Investment Policies
City Policy
4. Bonds or certificates of indebtedness of the Commonwealth of Kentucky and of its agencies and
instrumentalities;
5. Certificates of deposit issued by or other interest-bearing accounts of any bank or savings and loan
institution which are insured by the Federal Deposit Insurance Corporation or similar entity or which
are collateralized, to the extent uninsured, by any obligations permitted by section 41.240(4) of the
Kentucky Revised Statutes;
6. Securities issued by a state or local government, or any instrumentality or agency thereof, in the
United States, and rated in one of the three highest categories by a national recognized rating
agency.
Interest Rate Risk is the risk that changes in interest rates will adversely affect the fair value of an
investment. The City policy provides that, to the extent practicable, investments are matched with
anticipated cash flows. Investments are diversified to minimize the risk of loss resulting from
overconcentration of assets in a specific maturity period, a single issuer, or an individual class of
securities. Unless matched to a specific cash flow, investments are not, in general, made in securities
maturing more than five years from the date of purchase. Surplus cash may be invested in securities
exceeding five years if the maturity of such investments is made to coincide as nearly as practicable with
the expected use of the investment. Concentration of credit risk is the risk of loss attributed to the
magnitude of the City's investment in a single issuer. The City policy does not specifically address
concentration of credit risk.
Pension Trust Policy
The City's pension trust is the Police and Firefighters' Pension Fund (PFPF). Investment policy provides
for investment manager(s) who have full discretion of assets allocated to them subject to the overall
investment guidelines set out in the policy. Overall investment guidelines provide for diversification and
allow investment in domestic and international common stocks, fixed income securities, and cash
equivalents. Custodial credit risk is addressed by the policy providing for the engagement of a custodian
who accepts possession of securities for safekeeping; collects and disburses income; collects principal of
sold, matured, or called items; and provides periodic accounting to the pension board.
Asset allocation guideline for the plan is as follows:
Equities
Fixed income
PFPF Retirement Plan
Minimum Target Maximum
35% 50% 65%
35% 50% 65%
The retirement plan addresses credit risk and concentration of credit risk with a policy that prohibits
investment of more than 5% of its assets in the securities of anyone issuer with the exception of U.S.
government. Policy further prohibits investment of more than 20% in anyone market sector. No more
than 10% of corporate debt securities in the fixed income portfolio may be rated below-investment grade.
Commercial paper must be rated AI, PI.
-69-
(Continued)
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30,2011
Note 3· Detail Notes on Transaction Classes/Accounts:
Investment Policies
Pension Trust Policy
Interest rate risk is addressed by the policy requiring the plan manager(s) to maintain both diversification
and a predictable and dependent source of current income. Fixed income investments are flexibly
allocated among maturities of different lengths.
Private Purpose Trust
The private purpose trust does not have a formal investment policy. The City established the trust in
accordance with Kentucky Revised Statutes. The trust provides for an investment manager who has full
discretion of assets allocated to him subject to the provisions of the trust agreement. The trust invests in
domestic and international mutual funds, fixed income securities, U.S. treasury securities, and cash and
equivalents.
Capital Assets
Capital asset activity for the year ended June 30, 2011, was as follows:
Primary Government:
Capital assets, not being depreciated:
Land
Construction-in-progress
Total capital assets, not being
depreciated
Capital assets, being depreciated:
Land improvements
Buildings and improvements
Infrastructure
Equipment
Furnishings and fixtures
Vehicles
Totals at historical cost
Less accumulated depreciation:
Land improvements
Buildings and improvements
Infrastructure
Equipment
Furnishings and fixtures
Vehicles
Total accumulated depreciation
Total capital assets, being
depreciated, net
Balance
July 1,2010
$ 7,181,028
9,097,164
16,278,192
3,061,972
15,445,256
35,202,879
8,705,696
210,980
7,451,068
70,077,851
1,332,958
11,691,169
21,841,742
6,879,160
206,899
4,872.525
46,824,453
23,253,398
Additions
$ 213,533
2,133,560
2,347,093
1,812,656
3,489,148
803,993
460,453
6,566,250
85,834
315,528
1,859,414
627,088
1,525
529,583
3,418,972
3,147,278
Balance
Deductions June 30, 2011
$
4,079,796
4,079,796
240,784
240,784
222,567
222,567
18,217
$ 7,394,561
7,150,928
14,545,489
3,061,972
17,257,912
38,692,027
9,509,689
210,980
7,670,737
76,403,317
1,418,792
12,006,697
23,701,156
7,506,248
208,424
5,179,541
50,020,858
26,382,459
PRIMARY GOVERNMENT
ACTNITIES CAPITAL
ASSETS, NET $39,531.590 ~94.371 $4,098,013 $40,927,948
(Continued)
-70-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
Note 3 * Detail Notes on Transaction Classes/Accounts:
Capital Assets
Business-type Activities:
Capital assets, not being depreciated:
Land
Construction-in-progress
Total capital assets, not being
depreciated
Capital assets, being depreciated:
Buildings and improvements
Equipment
Vehicles
Totals at historical cost
Less accumulated depreciation:
Buildings and improvements
Equipment
Vehicles
Total accumulated depreciation
Total capital assets, being
depreciated, net
BUSINESS-TYPE ACTNITIES
CAPITAL ASSETS, NET
Balance
July 1, 2010 Increases
$ 62,152 $
62,152
429,254
1,516,829 77,844
2,771,463 1,048
4,717,546 78,892
$ 211,034 $ 12,914
1,089,652 132,924
1,826,051 251,785
3,126,737 397,623
1,590,809 (318,731)
:Ii 1!652.961 :Ii (318.731)
Depreciation expense was charged to governmental activities as follows:
General government:
General administration
Finance
Planning
Inspections
Personnel
Information systems
Fleet maintenance
Total general government
Public safety:
Police
Fire
Grants
Emergency 911
Court awards
Fleet Lease Trust
Total public safety
-71-
Balance
Decreases June 30,2011
$ $ 62,152
161,815
161,815
$
161,815
161,815
62,152
429,254
1,594,673
2,610,696
4,634,623
$ 223,948
1,222,576
1,916,021
3,362,545
1,272,078
:Ii 1,334.230
$ 313,706
25,419
4,532
308
1,295
11,051
356,311
198,603
61,429
22,900
82,394
12,577
915,580
(Continued)
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
Note 3· Detail Notes on Transaction Classes/Accounts:
Capital Assets
Public service:
Public works
Engineering
Total public service
Parks and recreation
Planning and development:
Infrastructure
Grants
Total planning and development
TOTAL DEPRECIATION EXPENSE
GOVERNMENTAL ACTIVITIES
Depreciation expense was charged to business-type activities as follows:
Solid Waste Fund
Section Eight Housing
Civic Center
TISAFund
TOTAL DEPRECIATION EXPENSE-
BUSINESS-TYPE ACTNITIES
-72-
$ 69,997
53,718
162,081
1,859,414
1,861,285
$ 348,476
5,496
10,397
(Continued)
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
Note 3 -Detail Notes on Transaction Classes/Accounts:
Capital Assets
Balance
Discretely Presented .lui! 1~ 2010 Increases
Component Units:
Capital assets, not being depreciated:
Land $ 486,314
Total capital assets, not being
depreciated 486,314
Capital assets, being depreciated:
Buildings and improvements 1,751,413 94,202
Equipment 8,201,306 824,303
Utility plant 66,011,840 4,942,678
Total capital assets, being
depreciated 75,964,559 5,861,183
Less accumulated depreciation:
Buildings and improvements 863,009 109,405
Equipment 4,316,372 1,010,129
Utility plant 27,969,771 1,398,787
Total accumulated depreciation 33,149,152 2,518,321
Total capital assets, being
depreciated, net 42,815.407 3,342,862
COMPONENT UNIT
CAPITAL ASSETS, NET $43.301.721 $3.342,862
Balance
Decreases June 302 2011
$ 486,314
486,314
1,845,615
1,339,275 7,686,334
1,345,081 69,609.437
2,684,356 79,141,386
972,414
1,098,464 4,228,037
1,030,807 28,337,751
2,129,271 33,538,202
555,085 45,603,184
$ ~55,085 $412.089.498
Depreciation expense, charged to functions/programs of discretely presented major component units as
follows:
Paducah Water Works
Paducah Transit Authority
TOTAL DEPRECIATION EXPENSE BY ACTNITY
Accounts Payable
$ 1,398,787
1,119,534
$ 2.518.321
Pay abies in the governmental and proprietary funds are composed of payables to vendors and accrued
salaries and benefits.
(Continued)
-73-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30,2011
Note 3 -Detail Notes on Transaction Classes! Accounts:
Long-Term Liabilities
The City's long-term liabilities are 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, 2011, the governmental long -term liabilities consisted of the following:
General obligation bonds:
Current portion
Noncurrent portion
TOTAL GENERAL OBLIGATION
BOND COSTS
Note payable:
Current portion
Noncurrent portion
TOTAL NOTE PAYABLE PAYMENTS
Accrued compensated absences:
Current portion
Noncurrent portion
TOTAL ACCRUED COMPENSATED
ABSENCES
Business-type Activities
$ 1,224,738
23,655,210
$24.879,948
$ 244,521
4.666,222
$ 4.910,743
$ 1,008,713
920,999
$ 1.929.712
As of June 30, 2011, the long-term liabilities payable from proprietary fund resources consisted of the
following:
Accrued compensated absences:
Current portion
Noncurrent portion
TOTAL ACCRUED COMPENSATED
ABSENCES
Long-Term Liabilities
General Obligation Bonds
$ 75,436
13,190
$ 88.626
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
(Continued)
-74-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
Note 3· Detail Notes on Transaction Classes/Accounts:
Long-Term Liabilities
General Obligation Bonds
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. Principal and interest payments prior to September 1,
2007, on the bonds were split evenly between the City and the County. After September 1, 2007, the City
and County will pay 2.031 % of the bond payments with the remaining amount being made from a sale-
lease with Infiniti Plastic Technologies, Inc.
Series 2005 Bond Issue -The City of Paducah issued general obligation bonds of $6,100,000 in November
2005, to finance the police and firefighter's pension fund estimated actuary liability. Interest rate is fixed
at 5.35%. 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.
Series 2008 Bond Issue -The City of Paducah issued general obligation bonds of $2,800,000 in March
2009, to finance the Floodwall Rehabilitation. Interest rates are variable. 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.
Series 2010 Bond Issue -The City of Paducah issued general obligation Build America Bonds of
$6,645,000 in March 2010, to finance several public improvement projects. Interest rates range from
1.00% to 5.50%, with a Federal subsidy equal to 35% of the interest payments. These bonds are required
to be fully paid within 20 years from the date of issue and are backed hy the full faith and credit of the
City.
Series 2010B Bond Issue The City of Paducah issued general obligation bonds of $7,165,000 in August
2010 with interest rates ranging between 1% and 3.25%, to advance refund $6,725,000 of outstanding
2001 series bonds with interest rates ranging between 4.5% and 5%. These bonds are required to be fully
paid within 16 years from the date of issue and are backed by the full faith and credit of the City.
The net proceeds were placed in an escrow account to provide for all future debt service on the refunded
portion of the 2001 series bonds. As a result the 2001 series bonds are considered defeased; and, the City
has removed the liability from its accounts. As of June 30, 2011 the defeased bonds were called and no
unpaid principal is outstanding.
The City advance refunded the 2001 series bonds to reduce its total debt service payments over the next 16
years by $658,023 and to obtain an economic gain (the difference between the present values of the debt
service payments on the old debt and the new debt) of $590,344.
While these 2010B series 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.
(Continued)
-75-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
Note 3 -Detail Notes on Transaction Classes/Accounts:
Long-Term Liabilities
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
capital 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.
Kentucky Association of Counties -The County of McCracken, Kentucky entered into an agreement in
the amount of $5,000,000 in March 2009, with the Kentucky Association of Counties to assist with the
Julian Carroll Convention Center. The interest rate is variable. The note is required to be fully paid within
20 years from the date of issue and is backed jointly by the full faith and credit of the City and the County.
While the note is issued by the County, 50% of the principal amount of the note was issued on behalf of
the City which intends to participate on an equal basis with the County in accordance with an Interlocal
Cooperation Agreement between the City and McCracken County, Kentucky on February 23, 2009.
L. Wayne & Linda Lindsey Agreement On December 18, 2009, the City entered into an agreement in the
amount of $600,000 with L. Wayne & Linda Lindsey to finance the acquisition of real property to be used
for the development of a sports park in the community. The note matured on December 19,2010 and had
an annual interest rate of 2%.
Community Financial Services Bank -On February 6, 2009, the City entered into a multiple draw
agreement in the amount of $500,000 with Community Financial Service Bank (CFSB) to finance the
program activities ofthe Home Grant Fund. As of June 30, 2011, the agreement has been fully repaid.
Margaret Hank Agreement -On June 16, 2011, the City entered into an agreement in the amount of
$188,533 with Margaret Hank to finance the acquisition of real property to be used for the development of
a an indoor recreational facility. The note matures on July 1, 2019 and has an imputed interest rate of
3.25%.
(Continued)
-76-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
Note 3 -Detail Notes on Transaction Classes/Accounts:
Long-Tenn Liabilities
Changes in Long-Term Liabilities
The following is a summary of changes in long-tenn debt for the year ended June 30, 2011:
Amounts
Beginning Ending Due within
Type of Liabllity: Balance Additions Reductions Balance One Year
Governmental activities:
General obligation bonds:
Convention and Arts Center $ 7,030,000 $ $7,030,000 $ -$
Infiniti Media Building 3,975,000 195,000 3,780,000 205,000
Pension 5,340,000 215,000 5,125,000 230,000
Floodwall Rehabilitation 2,671,440 106,492 2,564,948 109,738
Build America Bonds 6,645,000 275,000 6,370,000 270,000
Refinanced Convention Center 7,165,000 125,000 7,040,000 410,000
Notes payable:
Kentucky League of Cities 2,517,763 159,592 2,358,171 164,441
Kentucky Association of Counties 2,417,500 53,461 2,364,039 80,080
CFSB 273,004 273,004
Lindsey Agreement 600,000 600,000
Margaret Hank Agreement 188,533* 188,533
Accrued compensated absences 1,836,647 770,568 677,503
TOTAL GENERAL LONG-
TERM LIABILITIES $33,306,354 $8,124,101
* Acquisition of land for the indoor recreational facility was financed directly with the seller. This
transaction did not create or use current fmancial resources and, therefore, was not reported as another
financing source on the Statement of Revenues, Expenditures, and Changes in Fund Balances
Governmental Funds.
Business-type activities:
Accrued compensated absences $ 86, 112 ~44,684 $ 13,190
(1) The calculation to reconcile amounts in this schedule to the "net assets invested in capital assets, net of
related debt" for governmental activities is:
Net Capital Assets
Less:
19.75% ofthe outstanding 2001
general obligation bonds
Net of the County's portion
78% of the outstanding 2010
general obligation bonds
100% of the outstanding Kentucky League
of Cities' note payable
Net assets invested in capital assets, net of related debt
-77-
$(1,390,400)
$40,927,948
(695,200)
(4,968,600)
(2,358,171)
$32.905.977
(Continued)
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
Note 3 -Detail Notes on Transaction Classes/Accounts:
Long-Tenn Liabilities
Annual Debt Service Requirements
The annual debt service requirements to maturity, excluding obligations associated with compensated
absences, for long-term debt as of June 30, 2011, are as follows:
Year Ending
June 30
2012
2013
2014
2015
2016
2017-2021
2022-2026
2027-2031
TOTALS
Accrued Compensated Absences
Principal
$ 1,469,259
1,517,440
1,583,372
1,634,396
1,699,707
9,474,864
9,789,181
2,622,472
$29.790.691
Interest
$ 1,210,817
1,164,441
1,131,985
1,075,630
1,018,030
4,066,012
1,956,627
330,354
$11.953.896
Federal
Interest
Subsidy
$ (95,102)
(93,684)
(91,759)
(89,554)
(86,614)
(374,305)
(246,561)
(79,391)
$(1.156.970)
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. Typically, the compensated absence
obligations have been paid by the General Fund, Emergency Communication Service Fund, Section Eight
Housing Fund, Solid Waste Fund, and Fleet Maintenance Fund. Amounts accrued at June 30, 2011, are as
follows:
Accrued Compensated Absences
Governmental Business-type
Activities Activities
Accrued sick leave $ 717,626 $30,581
Accrued vacation leave 1,212,086 58,045
Totals 1,929,712 88,626
Less current portion 920,999 13,190
LONG-TERM PORTION .$1.D08.713 $75.436
Termination Benefits
Ten employees, through employment contracts, are entitled to certain termination benefits upon
involuntary termination of employment by the City Commission. These benefits include provision for
salary payments for three to six months, as well as, certain health, life, dental, and disability insurance
coverage for same period of time. As these benefits are only provided for involuntary termination of
employment, no provision has been made for these benefits. The City funds these benefits on a pay-as-
you-go basis in the period incurred. For the year ended June 30, 2011, $0 was paid for termination
benefits.
(Continued)
-78-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30,2011
Note 3 -Detail Notes on Transaction Classes/Accounts:
Termination Benefits
In addition, qualified participants in the County Employee's Retirement System (CERS), under certain
circumstances are eligible to convert accrued sick pay benefits into additional credit for years of service
upon retirement. Costs and notification of payment for these benefits are not calculated by the CERS
actuary until a qualified participant submits an application for retirement benefits. Accordingly, no
provision has been made for these benefits; and, the City funds these benefits in the period of notification
for payment by the CERS. For the year ended June 30, 2011, payments of $25,610 were made for these
benefits.
Landfill Closure and Post-Closure Costs
The County of McCracken, Kentucky (County) closed the local landfill to the public on June 30, 1995.
The County must comply with established state and federal landfill closure procedures and must perform
maintenance and monitoring procedures at the site for thirty years after closure. The 30-year period wiH
begin upon approval from the Commonwealth of Kentucky regarding the environmental condition of the
landfIll site. As of June 30, 2011, approval had not yet been granted. The County estimated post-closure
care costs totaling $4,125,000 or $125,000 per year plus 10% for inflation. Actual costs may be higher due
to inflation, changes in technology, or changes in regulations. In the year ending June 30, 2001, the City
entered into an inter-local agreement to share equally the costs for post-closure costs and, accordingly, has
recorded a long-term liability for 50% of the estimated closure expense. It is anticipated that post-closure
costs will be paid out of the Solid Waste Fund to the extent that funds are available with any excess costs
being funded using long-term borrowing.
Interfund Transactions and Balances
Interfund transfers during the year ended June 30, 2011, were as follows:
Interfund Interfund
Governmental Funds: Transfers In Transfers Out
General Fund $ 910,855 $1,742,754
Capital Project Fund 3,820,237 236,261
Special Revenue Investment Fund 58,918 3,637,140
Special Revenue Bond Fund
Debt Service Fund 1,903,443
Nonmajor Governmental Funds 1,761,980 2,585,098
Internal Service Funds 379,417
Fiduciary Funds:
Other trusts 535
Proprietary Funds:
Nonmajor Proprietary Funds 125,772
TOTALS $8.581.205 $8~581~205
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.
(Continued)
-79-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30,2011
Note 3 -Detail Notes on Transaction Classes/Accounts:
Due TolFrom Balances
Due to/from balances used to cover current operating expenses were as follows as of June 30, 2011:
General Fund
Special Revenue Investment Fund
Nonmajor Proprietary Funds
Internal Service Funds
TOTALS
Note 4 -Pension Plans -City of Paducah:
Due From
$ 575,812
1,015,468
$1.591.280
Due To
$1,015,450
25,830
550.000
$1.591.280
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 three deferred compensation plans. Information
regarding these plans follows:
Single Employer Defined Benefit Funds (Police and Firefighters' Pension Fund and Appointive
Employees Pension Fund)
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, pursuant to formal commitments. Benefits and refunds are recognized when due and payable in
accordance with the terms of each plan.
Single Employer Defined Benefit Funds (police and Firefighters' Pension Fund and Appointive
Employees Pension Fund)
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.
Administrative Costs -Administrative costs are funded from investment earnings.
Valuation of Investments Investments are reported at fair value. Investments are composed of
securities valued at current market prices.
(Continued)
-80-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
Note 4 -Pension Plans -City of Paducah:
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. PFPF does not issue a
separate, stand-alone report. Accordingly, 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.
Funding: As of the most recent actuarial valuation dated July 1,2011, the schedule offunding progress
was as follows:
Actuarial Actuarial Unfunded Annual UAALasa
Value of Accrued AAL Funded Covered Percentage of
Assets Liability (AAL) (UAAL) Ratio Payroll Covered
{a} (b} {b-a} {albl (c} 1{b-allc}
$ 8,715,408 $12,375,144 $3,659,736 70A $62,915 5,816.95%
A schedule of the funded status and funding progress for the previous six years can be found on page
91, which contains trend information about the changes in actuarial value of the plan assets relative to
the actuarially determined liability for benefits over time.
Components of annual pension cost for PFPF are as follows:
Year Ended Year Ended Year Ended
Component June 302 2011 ,lune 302 2010 June 302 2009
Beginning NPO balance $( 5 ,511,936) $(5,551,753) $(5,546,740)
ARC 455,139 460,892 183,661
Interest on NPO (440,955) (444,140) (443,739)
Unfunded ARC adjustment 492,104 488,235 481,122
Pension cost 506,288 504,987 221,044
Less actual contribution 451,428 465,170 226,057
Net change in NPO 54,860 39,817 (5,013)
ENDING NPO BALANCE $(5.457,076) $(5.511,936) $(5,551.753)
PERCENTAGE OF PENSION
COST CONTRIBUTED 82% 92% 102%
(Continued)
-81-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
Note 4 • Pension Plans· City of Paducah:
Police and Firefighters' Pension Fund
The financial statements for the Police and Firefighters' Pension Fund are as follows:
Assets:
Cash and cash equivalents
Receivables
Investment at fair value
Total assets
Liabilities:
Statement of Fiduciary Net Assets
Police and Firefighters' Retirement Fund
June 30,2011
Voucher and accounts payable
Net Assets:
Held in trust for pension benefits and
other purposes
Statement of Changes in Net Assets
Police and Firefighters' Retirement Fund
For the Year Ended June 30, 2011
Additions:
Employer contributions
Plan members' contributions
Total contributions
Investment earnings:
Net increase in fair value of investments
Interest and dividends
Net investment earnings
Total additions
Deductions:
Benefits
Administrative expenses
Total deductions
Change in net assets
Net assets, July 1,2010
NET ASSETS, JUNE 30, 2011
-82-
$ 3,674
30,148
8,681.754
8,715,576
168
$ 8,715,408
$ 451,428
5,033
456.461
1,304,282
242,039
1,546.321
2,002,782
1,682,095
48,575
1,730,670
(272,112)
8,443,296
$ 8.715.408
(Continued)
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
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, 2010. AEPF does not issue a separate, stand-alone report.
Accordingly, 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.
Funding: As of the most recent actuarial valuation dated July 1, 2011, the schedule of funding progress
was as follows:
Actuarial Unfunded Annual UAALasa
Value of Accrued AAL Funded Covered Percentage of
Assets Liability (AAL) (UAAL) Ratio Payroll Covered
(a) (b) (b-a) (alb) (c) «b-a)/c)
$137,018 $161,229 $24,211 85 nla* nfa*
A schedule of the funded status and funding progress for the previous six years can be found on page
91, which contains trend information about the changes in actuarial value of the plan assets relative to
the actuarially determined liability for benefits over time.
Components of annual pension cost for AEPF are as follows:
Year Ended Year Ended Year Ended
Component June 301 2011 June 301 2010 June 301 2009
Beginning NPO balance $(194,904) $(227,510) $(250,893)
ARC 3,760 17,095 6,278
Interest on NPO (11,694) (13,651) (15,054)
Unfunded ARC adjustment 24,982 29,162 32,159
Pension cost 17,048 32,606 23,383
Less actual contribution
Net change in NPO 17.048 32.606 23,383
ENDING NPO BALANCE $(177.856) 1(124.904) $(227.510)
PERCENTAGE OF PENSION
COST CONTRmUTED -.0% .0% -.0%
(Continued)
-83-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
Note 4 -Pension Plans· City of Paducah:
Appointive Employees' Pension Fund
The financial statements for the Appointive Employees' Pension Fund are as follows:
Assets:
Cash and cash equivalents
Receivables
Investment at fair value
Total assets
Liabilities:
Statement of Fiduciary Net Assets
Appointive Employees' Pension Fund
June 30, 2011
Voucher and accounts payable
Net Assets:
Held in trust for pension benefits and
other purposes
Additions:
Interest and dividends
Employer contributions
Total additions
Deductions:
Benefits
Administrative expenses
Total deductions
Change in net assets
Net assets, July 1,2010
NET ASSETS, JUNE 30, 2011
Statement of Changes in Net Assets
Appointive Employees' Pension Fund
For the Year Ended June 30, 2011
$ 11,281
737
125,000
137,018
$137,018
$ 2,504
2,504
36,939
6,792
43,731
(41,227)
178,245
$137,018
Single Employer Defined Benefit Funds (Police and Firefighters' Pension Fund and Appointive
Employees Pension Fund)
Contribution Information
A summary of actuarial assumptions at June 30, 2011, the date of the latest actuarial valuation is as
follows:
(Continued)
-84-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
Note 4 -Pension Plans -City of Paducab:
Single Employer Defined Benefit Funds (Police and Firefighters' Pension Fund and Appointive
Employees Pension Fund)
Contribution Information
PFPF AEPF
Valuation date 711111 7/1111
Actuarial cost method Entry age normal Aggregate (l)
Amortization method Level dollar closed Level dollar closed
Remaining amortization period 22 Years 10 Years
Asset valuation method Market value Market value
Actuarial assumptions:
Investment rate of return 8.00% 6.0%
Projected salary increases 4.00% (2)
Inflation rates adjustments 3.00% (2)
(1) The Aggregate Method does not identify or separately amortize the unfunded actuarial
liabilities. Information about funded status and funding progress is presented using the entry
age actuarial cost method for that purpose; and, that information presented is intended to serve
as a surrogate for the funding progress of the plan.
(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.
Membership Information
Membership of each plan consisted of the following at June 30, 2011:
Active participants
Beneficiaries
Retired participants
TOTAL P ARTICIP ANTS
Cost-Sharing Multiple-Employer Defined Benefit Plan
County Employees' Retirement System
PFPF
1
41
34
AEPF
o
3
_1
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. Under the provisions of Kentucky Revised Statute 61.645, the Board of Trustees of
Kentucky Retirement Systems administers the CERS. 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.
-85-
(Continued)
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
Note 4 -Pension Plans -City of Paducah:
Cost-Sharing Multiple-Employer Defined Benefit Plan
County Employees' Retirement System
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. For employees hired on September 1, 2008, or thereafter, an additional 1 % must be
contributed to a health insurance account. 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, 2011, 2010, and
2009, the City contributed 33.25%, 32.97%, and 29.50%, respectively, of each hazardous employee's
creditable compensation and 16.93%, 16.16%, and 13.50%, respectively, of each nonhazardous
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, 2011, 2010, and 2009, were $4,885,288, $4,538,848, and $4,198,042, respectively, equal to the
required contributions for each year.
Note 5 -Appropriations Deficit:
No departments that adopted budgets annually had excess expenditures over appropriations for the fiscal
year ended June 30, 2011.
Note 6 -Component Unit Long-Term Liabilities:
Long-term liabilities of the discretely presented component units consist of the following at June 30, 2011:
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 1.59% to 5.19%, with a .2% annual service fee. The annual requirements
to amortize the outstanding debt as of June 30, 2011, are as follows:
Year Ending
June 30 Principal Interest Fee !0.2%1 Total
2012 $ 170,109 $ 42,625 $ 219 $ 212,953
2013 312,850 78,042 252 391,144
2014 286,398 72,947 183 359,528
2015 289,989 69,539 174 359,702
2016 293,625 65,738 165 359,528
2017-2021 1,524,283 272,672 683 1,797,638
2022-2026 1,622,276 174,924 438 1,797,638
2027-2031 1,905,215 72,007 180 1,977,402
TOTALS ~404.745 $848;424 $2,294 W55,533
(Continued)
-86-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
Note 6 -Component Unit Long-Term Liabilities:
Notes Payable, Kentucky Association of Counties (KACO) -Paducah Transit Authority
On February 13, 2004, the Transit Authority of the City of Paducah entered into an agreement with the
KACO in connection with grant match projects. Interest rate on this agreement is 4.186%. As of June 30,
2011, the outstanding balance was $77,784.
The following schedule summarizes the remaining debt service requirements for the Transit Authority of
the City of Paducah notes payable:
Fiscal Year
2012
2013
TOTALS
Note 7 -Commitments and Contingencies:
Grant Contingencies
Princi(!al
$ 42,702
35,082
$111:Z8~
Total
Debt
Interest Service
$ 2,446 $45,148
854 35,936
$ 3!300 $81,084
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.
Construction Commitments
The City has various on-going contracts for construction, renovations, paving materials, equipment, and
labor. As of June 30, 2011, the significant construction commitments were as follows:
Olivet Church Road Improvement Project
Riverfront Development -Phase I
Riverfront -Other River Boat Launch Project
Greenway Trail Project
-87-
Cumulative
Costs Incurred
$1,677,489
876,091
284,163
225,759
Estimated
Total Costs
$1,677,489
3,236,680
291,075
1,240,000
$3,063.502 $6.445.244
(Continued)
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
Note 8 • Risk Management and Litigation:
The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets;
errors and omissions; injuries to employees; and natural disasters. The City obtains coverage from
commercial insurance companies to handle the risk of loss. There have been no decreases in insurance
coverage from the prior year. There have been no settlements in excess of insurance coverage during the
prior three years.
An analysis of claims activity is presented below:
2008 -2009
2009 -2010
2010 -2011
Beginning of
Fiscal Year
Liability
$
Current Year
Claims and
Changes in
Estimates
$76,686
46,051
70,643
Actual
Claim
Payments
$76,686
46,051
70,643
Balance at
Fiscal
YearEnd
$
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, which is
based on a formula that considers group census and anticipated claims. As of June 30, 2011, that number
was $2,692,473. 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 $228,280 at June 30, 2011.
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 YearEnd
2008 2009 $106,364 $2,650,054 $2,702,832 $ 53,586
2009 -2010 53,586 2,682,055 2,506,993 228,648
2010 -2011 228,648 2,118,069 2,118,437 228,280
During the fiscal year ended June 30, 2006, several current and former firefighters of the City of Paducah
filed a lawsuit for unpaid compensation benefits and related pension obligations. This suit was settled in
favor of the firefighters. Accordingly, the City has accrued $1,482,743 in other current liabilities (in the
government-wide financial statements), which represents the court ordered compensation and related
benefits to be paid by the City.
In addition, 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.
(Continued)
-88-
Note 9 -Lease Agreements:
Operating Leases
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
The City is leasing land and building 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 is deemed
the property of the City; however, for financial reporting, the building is reported with the Luther F.
Carson Four Rivers Center financial records. fu 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 also leases certain other property to various lessees under non-cancelable agreements that have
various expiration dates through November 30, 2021. Rental revenue received from leased property
during 2011 totaled $437,943.
The following is an analysis of property leased under these leases at June 30, 2011:
Land $ 270,000
Buildings 873,250
Equipment 110,126
Total 1,253,376
Less: accumulated depreciation 817,290
NET BOOK VALUE $ 436!Q86
Depreciation expense for the year ended June 30, 2011, on leased property was $20,775.
The following is a schedule of future minimum rental income from operating leases at June 30, 2011:
2012
2013
2014
2015
2016
2017-2021
2022
TOTAL MINIMUM LEASE RECEIPTS
Direct Financing Lease
Lease
Income
$ 437,943
437,943
437,943
257,943
77,943
60,123
25,051
$1.734,889
The City is leasing land and a building to fufiniti Media, fucorporated for use by fufiniti Plastic
Technologies, fucorporated for a primary term of 20 years. No rental revenue was required during the first
three years of the lease term which resulted in a loss of $450,353. For the government-wide statement, the
loss is amortized over the life of the lease. Rental payments commenced on September 1, 2007, at a
(Continued)
-89-
Note 9 -Lease Agreements:
Direct Financing Lease
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
monthly payment of $33,816 and end with the final payment due August 1, 2024. Infiniti Media may
purchase the property during the term of lease by paying off the related indebtedness. In addition, at the
end of the lease term, Infiniti Media may purchase the property for $1. Infiniti Media has tbe option to
cancel this lease at any time after the sixth year of the lease term by providing written notice 18 months
prior to the date of termination. The lease payments received coincide with debt service payments the City
is required to make on bonds maturing annually through year ending June 30, 2024.
Future minimum lease payments to be received under the lease agreement for tbe fiscal year ending June
30 are as follows:
2012
2013
2014
2015
2016
2017 through 2024
Net minimum lease payments
Less amount representing interest
PRESENT VALUE OF MINIMUM
LEASE PAYMENTS
Note 10 -Subsequent Events:
Lease
Income
$ 405,796
405,796
405,796
405,796
405,796
3,246,364
5,275,344
(1,666,523)
$ 3,608,821
In July 2011, tbe City issued bond series 2011 in tbe amount of $3,910,000. The bonds mature over 13
years starting December 1, 2011 and ending June 1,2024; with optional redemption prior to maturity at
any time. The stated interest rate is 3.68%. This issuance is intended to defease tbe City's 2004 bond
issue.
-90-
CITY OF PADUCAH, KENTUCKY
REQUIRED SUPPLEMENTARY INFORMATION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2011
Actuarial
Valuation
Date
Actuarial
Value of
Assets
(a)
CITY OF PADUCAH, KENTUCKY
REQUIRED SUPPLEMENTARY INFORMATION
PENSION TRUST FUNDS SCHEDULES
Schedules of Funding Progress
Actuarial
Accrued
Liability (AAL)
(b)
Unfunded
AAL
(UAAL)
(b-a)
Funded
Ratio
(alb)
Annual
Covered
Payroll
(c)
Exhibit A-1
UAALasa
Percentage of
Covered Payroll
«b-a)/c)
Police and Firefighters' Pension Fund (PFPF) (Using Entry Age Normal Method)
7/112006 $ 14,163,498 $ 14,527,020 $ 363,522 97.5 $165,414 $ 219.76
7/112007 14,470,016 14,463,785 (6,231) 100.0 100,986 (6.17)
7/112008 12,097,054 14,076,843 1,979,789 85.9 56,475 3,505.60
7/112009 8,647,519 13,476,007 4,828,488 64.2 55,475 8,641.74
7/112010 8,443,296 13,134,852 4,691,556 64.3 63,434 7,395.96
7/112011 8,715,408 12,375,144 3,659,736 70.4 62,915 5,816.95
Appointive Employees' Pension Fund (AEPF) (Using Entry Age Actuarial Method)
7/1/2006 $ 344,644 $ 443,207 $ 98,563 77.8 nla* nla*
7/112007 317,575 382,916 65,341 82.9 nla* nla*
7/112008 271,701 317,849 46,148 85.5 nla* nla*
7/112009 226,016 306,287 80,271 73.8 nla* n/a*
7/112010 178,245 294,784 116,539 60.5 nla* nla*
7/112011 137,018 161,229 24,211 85.0 nla* nla*
* There are no active participants.
Schedules of Employer Contributions
PFPF
Year Annual Percent Ending
Ended Required ARC Net Pension
June 30 Contribution (ARC) Contributed Obligation {NPOl
2006 $719,348 854 $(5,425,468)
2007 46,948 446 (5,552,551)
2008 12,887 345 (5,546,740)
2009 183,661 123 (5,551,753)
2010 460,892 109 (5,511,936)
2011 455,139 99 (5,457,076)
AEPF
Year Annual Percent Ending
Ended Required ARC Net Pension
June 30 Contribution (ARC) Contributed Obligation {NPOl
2006 $ 17,182 437 $ (287,297)
2007 13,883 180 (278,827)
2008 8,925 0 (250,893)
2009 6,278 0 (227,510)
2010 17,095 0 (194,904)
2011 3,760 0 (177,855)
-91-
CITY OF PADUCAH, KENTUCKY
SUPPLEMENTARY INFORMATION
NONMA]OR GOVERNMENTAL FUNDS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2011
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.
Bond Fund -to account for revenues associated with bonds issued by the City.
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.
PRA -Paducah Renaissance Alliance -to account for the revenues associated with the economic
promotion of downtown Paducah, Kentucky.
CITY OF PADUCAH, KENTUCKY
GENERAL CAPITAL IMPROVEMENTS
DETAIL STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE -BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30,2011
Final
Revenues: Budget Actual
Grants $ 948,810 $ 948,818
Intergovernmental 42,620 42,622
Interest 8,750 38,830
Miscellaneous 87,185 88,719
Total revenues 1,087,365 1,118,989
Expenditures:
Principal requirement 600,000 600,000
Capital outlay 5,121,705 5,121,682
Total expenditures 5,721,705 5,721,682
Excess (deficiency) of revenues over
expenditures (4,634,340) (4,602,693)
Other Financing Sources (Uses):
Long-term debt issued 396,120 366,039
Operating transfers in 3,820,220 3,820,237
Operating transfers out (236,265) (236,261)
Total other financing sources (uses) 3,980,075 3,950,015
Net change in fund balance $ (654,265) (652,678)
Fund balance, July 1, 2010 2,232,320
FUND BALANCE, JUNE 30,2011 $1,579,642
See auditors report on pages 12-13.
-92-
Exhibit B-1
Variance with
Final Budget
Positive
(Negative)
$ 8
2
30,080
1,534
31,624
23
23
31,647
(30,081)
17
4
(30,060)
$ 1,587
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 30,2011
Final
Revenues: Budget Actual
Intergovernmental $ 552,500 $ 552,502
Expenditures:
Principal requirement 1,360,745 1,360,584
Interest and fiscal requirement 1,519,525 1,519,329
Total expenditures 2,880,270 2,879,913
Excess (deficiency) of revenues over
expenditures (2,327,770) (2,327,411)
Other Financing Sources (Uses):
Capital lease 405,790 405,796
Operating transfers in 1,903,435 1,903,443
Total other financing sources (uses) 2,309,225 2,309,239
Net change in fund balance $ (18,545) (18,172)
Fund balance, July 1,2010 92,444
FUND BALANCE, JUNE 30, 2011 $ 74,272
See auditors report on pages 12-13.
-93-
Exhibit B-2
Variance with
Final Budget
Positive
(Negative)
$ 2
161
196
357
359
6
8
14
$ 373
ASSETS
Cash and cash equivalents
Investments
Receivables, net:
Accounts
Grants
Interest
TOTAL ASSETS
Liabilities:
LIABILITIES
AND
FUND BALANCES
CITY OF PADUCAH, KENTUCKY
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2011
Municipal
Aid Program
$ 955,534
73,162
$1,028,696
Special Revenue Funds
Emergency Court
Communication Awards
Service Fund Fund
$315,461 $153,563
233,032
$548,493 $153,563
Voucher and accounts payable
Accrued payroll and payroll taxes
Due to other funds
$ 136,521 $ 3,022
46,596
$ 83,955
Deferred revenues
Accrued compensated absences
Total liabilities
Fund Balances:
Restricted for:
Highways and streets
Assigned for:
Public service
Public safety
Planning and development
Capital improvements
Total fund balances
TOTAL LIABILITIES AND
FUND BALANCES
See auditors report on pages 12-13.
136,521 49,618 83,955
892,175
498,875 69,608
892,175 498,875 69,608
$1,028,696 $548,493 $153,563
-94-
Exhibit B-3
Small
Grant
Fund
$48,730
$48,730
$ 7,125
41,605
48,730
$48,730
Special Revenue Funds
CDBG Home
Grant Bond Grant
Fund Fund Fund
$ $554,144 $
151,456
$151,456 $554,144 $
$151,456 $ $
151,456
554,144
554,144
$151,456 $554,144 $
PRA
Fund
$50,400
3,191
$53,591
$12,768
12,768
40,823
40,823
Total Nonmajor
Governmental
Funds
$2,077,832
309,385
151,456
$2,538,673
$ 394,847
46,596
41,605
483,048
892,175
568,483
40,823
554,144
2,055,625
$2,538,673
-95-
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2011
Special Revenue Funds
Revenues:
Taxes
Charges for services
Intergovernmental
Grants
Interest
Miscellaneous
Total revenues
Expenditures:
Current operations:
Public safety
Public service
Planning and development
Principle requirement
Total expenditures
Excess (deficiency) of revenues
over expenditures
Other Financing Sources (Uses):
Capital lease
Proceeds of refunding bond, net
Transfer to refunded bond escrow agent
Long-term debt issued
Transfers in
Transfers out
Total other financing sources (uses)
Net change in fund balances
Fund balances, July 1,2010
FUND BALANCES, JUNE 30,2011
See auditors report on pages 12-13.
Municipal
Aid Program
$
553,238
9,029
562,267
1,036,445
1,036,445
(474,178)
942,722
(12,998)
929,724
455,546
436,629
$ 892,175
-96-
Emergency Court
Communication Awards
Service Fund Fund
$ 469,737 $
235,281
3,309 1,205
368,551 63,311
1,076,878 64,516
1,558,546 27,992
1,558,546 27,992
(481,668) 36,524
466,295
466,295
(15,373) 36,524
514,248 33,084
$ 498,875 $69,608
ExhibitB-4
Small
Grant
Fund
$
49,999
6,000
55,999
57,124
57,124
(1,125)
1,125
1,125
$
Special Revenue Funds
CDBG Home Total Nonmajor
Grant Bond Grant PRA Governmental
Fund Fund Fund Fund Funds
$ $ $ $ $ 469,737
235,281
553,238
339,646 9,800 399,445
16,148 841 30,532
111,952 45,722 595,536
339,646 16,148 121,752 46,563 2,283,769
1,586,538
1,036,445
339,646 34,619 307,408 738,797
273,004 273,004
339,646 307,623 307,408 3,634,784
16,148 (185,871) (260,845) (1,351,015)
7,165,000 7,165,000
(7,165,000) (7,165,000)
71,730 280,108 1,761,980
(2,381,475) (61,262) (129,363) (2,585,098)
(2,381,475) 10,468 150,745 (823,118)
(2,365,327) (175,403) (110,100) (2,174,133)
2,919,471 175,403 150,923 4,229,758
$ $ 554,144 $ $ 40,823 $ 2,055,625
-97-
CITY OF PADUCAH, KENTUCKY
MUNICIPAL AID PROGRAM FUND
DETAIL SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE -BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2011
Final
Revenues: Budget Actual
Intergovernmental $ 553,235 $ 553,238
Interest 9,025 9,029
Total revenues 562,260 562,267
Expenditures:
Public service 1,036,445 1,036,445
Excess (deficiency) of revenues over
expenditures (474,185) (474,178)
Other Financing Sources (Uses):
Operating transfers in 942,720 942,722
Operating transfers out (13,000) (12,998)
Total other financing sources 929,720 929,724
Net change in fund balance $ 455,535 455,546
Fund balance, July 1, 2010 436,629
FUND BALANCE, JUNE 30, 2011 $ 892,175
See auditors report on pages 12-13.
-98-
Exhibit B-5
Variance with
Final Budget
Positive
(Negative)
$ 3
4
7
7
2
2
4
$ 11
CITY OF PADUCAH, KENTUCKY
EMERGENCY COMMUNICATION SERVICE FUND
DETAIL SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE -BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30,2011
Revenues:
Taxes
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, 2010
FUND BALANCE, JUNE 30,2011
See auditors report on pages 12-13.
-99-
Final
Budget
$ 469,735
235,280
3,305
368,550
1,076,870
1,562,198
(485,328)
466,295
$ (19,033)
Actual
$ 469,737
235,281
3,309
368,551
1,076,878
1,558,546
(481,668)
466,295
(15,373)
514,248
$ 498,875
Exhibit B-6
Variance with
Final Budget
Positive
(Negative)
$ 2
1
4
1
8
3,652
3,660
$3,660
CITY OF PADUCAH, KENTUCKY
COURT AWARDS FUND
DETAIL SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE -BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2011
Final
Revenues: Budget Actual
Court awarded forfeitures $63,310 $63,311
Interest 520 1,205
Total revenues 63,830 64,516
Expenditures:
Public safety 27,995 27,992
Excess (deficiency) of revenues over
expenditures $35,835 36,524
Fund balance, July 1,2010 33,084
FUND BALANCE, JUNE 30, 2011 $69,608
See auditors report on pages 12-13.
-100-
Exhibit B-7
Variance with
Final Budget
Positive
(Negative)
$ 1
685
686
3
689
CITY OF PADUCAH, KENTUCKY
SMALL GRANT FUND
DETAlL SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30,2011
Revenues:
Grants
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
Net change in fund balance
Fund balance, July 1, 2010
FUND BALANCE, JUNE 30, 2011
See auditors report on pages 12-13.
Final
Budget Actual
$49,995 $49,999
6,000 6,000
55,995 55,999
57,125 57,124
(1,130) (1,125)
1,125 1,125
1,125 1,125
$ (5)
$
Exhibit B-8
Variance with
Final Budget
Positive
(Negative)
$ 4
4
1
5
$ 5
CITY OF PADUCAH, KENTUCKY
CDBG GRANT FUND
DETAIL SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE -BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2011
Revenues:
Grants
Miscellaneous
Total revenues
Expenditures:
Planning and development
Excess (deficiency) of revenues over
expenditures
Net change in fund balance
Fund balance, July 1,2010
FUND BALANCE, JUNE 30, 2011
See auditors report on pages 12-13.
-102-
Final
Budget Actual
$339,645 $339,646
339,645 339,646
339,645 339,646
$
$
ExhibitB-9
Variance with
Final Budget
Positive
(Negative)
$ 1
1
(1)
$
CITY OF PADUCAH, KENTUCKY
SPECIAL REVENUE BOND FUND
DETAIL SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE -BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2011
Revenues:
Interest
Expenditures:
General government:
Planning and development:
Bond issuance costs
Excess (deficiency) of revenues over
expenditures
Other Financing Sources (Uses):
Proceeds of refunding bond, net
Transfer to refunded bond escrow agent
Operating transfers out
Total other financing sources (uses)
Net change in fund balance
Fund balance, July 1, 2010
FUND BALANCE, JUNE 30, 2011
See auditors report on pages 12-13.
-103-
Final Actual
Budgeted Amounts
$ 16,145 $ 16,148
16,145 16,148
7,165,000 7,165,000
(7,165,000) (7,165,000)
(2,381,480) (2,381,475)
(2,381,480) (2,381,475)
$ (2,365,335) (2,365,327)
2,919,471
$ 554,144
Exhibit B-10
Variance with
Final Budget
Positive
(Negative)
$ 3
3
5
5
$ 8
CITY OF PADUCAH, KENTUCKY
HOME GRANT FUND
DETA1L SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE -BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2011
Revenues:
Grants
Miscellaneous
Total revenues
Expenditures:
Principal requirement
Planning and development
Total expenditures
Excess (deficiency) of revenues over
expenditures
Other Financing Sources (Uses):
Long-term debt issued
Operating transfers out
Operating transfers in
Total other financing sources (uses)
Net change in fund balance
Fund balance, July 1,2010
FUND BALANCE, JUNE 30, 2011
See auditors report on pages 12-13.
-104-
Final
Budget Actual
$ 9,800 $ 9,800
111,950 111,952
121,750 121,752
272,925 273,004
34,700 34,619
307,625 307,623
(185,875) (185,871)
(61,265) (61,262)
71,730 71,730
10,465 10,468
$ (175,410) (175,403)
175,403
$
Exhibit B-11
Variance with
Final Budget
Positive
(Negative)
$
2
2
(79)
81
2
4
3
3
$ 7
CITY OF PADUCAH, KENTUCKY
PRAFUND
DETAIL SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE -BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30,2011
Final
Revenues: Budget Actual
Interest $ 860 $ 841
Other 45,720 45,722
Total revenues 46,580 46,563
Expenditures:
Planning and development 308,300 307,408
Excess (deficiency) of revenues over
expenditures (261,720) (260,845)
Other Financing Sources (Uses):
Operating transfers in 280,105 280,108
Operating transfers out (129,365) (129,363)
Total other financing sources (uses) 150,740 150,745
Net change in fund balance $(110,980) (110,100)
Fund balance, July 1,2010 150,923
FUND BALANCE, JUNE 30, 2011 $ 40,823
See auditors report on pages 12-13.
-105-
Exhibit B·12
Variance with
Final Budget
Positive
(Negative)
$ (19)
2
(17)
892
875
2
2
$ 877
CITY OF PADUCAH, KENTUCKY
SUPPLEMENTARY INFORMATION
NONMA]OR PROPRIETARY FUNDS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2011
COMBINING FINANCIAL STATEMENTS
NONMAJOR ENTERPRISE FUNDS
Section Eight Housing Fund -to account for the housing choice voucher program grant governed
by the United States Department of Housing and Urban Development.
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-l
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF NET ASSETS
NONMAJOR ENTERPRISE FUNDS
JUNE 30, 2011
ASSETS Section Civic h
Eight Center TISA Enterprise
Current Assets: Housing Fund Fund Funds
Cash and cash equivalents $1,166,940 $ 107 $348,459 $1,515,506
Accounts receivable 9,629 9,629
Prepaid expense 9,590 9,590
Total current assets 1,166,940 107 367,678 1,534,725
Noncurrent Assets:
Net depreciable capital assets 18,291 179,827 67,204 265,322
Total assets 1,185,231 179,934 434,882 1,800,047
LIABILITIES
Current Liabilities:
Voucher and accounts payable 126,570 5,364 1,183 133,117
Accrued compensated absences 1,465 1,465
Due to other funds 25,830 25,830
Total current liabilities 153,865 5,364 1,183 160,412
Noncurrent Liabilities:
Accrued compensated absences 13,190 13,190
Total liabilities 167,055 5,364 1,183 173,602
NET ASSETS
Invested in capital assets 18,291 179,827 67,204 265,322
Restricted for:
Housing and development projects 999,885 999,885
Unrestricted (5,257) 366,495 361,238
TOTAL NET ASSETS $1,018,176 $174,570 $433,699 $1,626,445
See auditors report on pages 12-13.
-106-
Exhibit C-2
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN FUND NET ASSETS
NONMAJOR ENTERPRISE FUNDS
FOR THE YEAR ENDED JUNE 30, 2011
Section Civic Total Nonmajor
Eight Center TISA Enterprise
Operating Revenues: Housing Fund Fund Funds
Charges for services $2,329,315 $ 33,766 $134,812 $2,497,893
Miscellaneous 1,584 3,985 5,569
Total operating revenues 2,330,899 33,766 138,797 2,503,462
Operating Expenses:
Cost of sales and service 1,951,233 66,280 150,291 2,167,804
Depreciation and amortization 5,496 10,397 33,254 49,147
Total operating expenses 1,956,729 76,677 183,545 2,216,951
Operating income (loss) 374,170 (42,911) (44,748) 286,511
Non-Operating Revenues (Expenses):
Interest and investment income 467 467
Income (loss) before contributions and
operating transfers 374,637 (42,911) (44,748) 286,978
Contributions and Operating Transfers:
Capital contributions 8,659 8,659
Transfers in 32,933 92,839 125,772
Total contributions and operating transfers 32,933 101,498 134,431
Change in net assets 374,637 (9,978) 56,750 421,409
Net assets, July 1,2010 643,539 184,548 376,949 1,205,036
NET ASSETS, JUNE 30, 2011 $1,018,176 $174,570 $433,699 $1,626,445
See auditors report on pages 12-13.
-107-
Exhibit C-3
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF CASH FLOWS
NONMAJOR ENTERPRISE FUNDS
FOR THE YEAR ENDED JUNE 30, 2011
Section Civic Total Nonmajor
Eight Center TISA Enterprise
Cash Flows from Operating Activities: Housing Fund Fund Funds
Cash received from customers $ 2,329,315 $ 33,766 $ 129,381 $ 2,492,462
Payments to employees (137,320) (137,320)
Payments to internal service funds (2,474) (1,749) (4,223)
Other receipts 1,584 3,985 5,569
Other payments (1,798,752) (64,118) (157,044) (2,019,914)
Net cash provided (used) by operating activities 394,827 (32,826) (25,427) 336,574
Cash Flows from Noncapital
Financing Activities:
Transfers (to) from other funds 32,933 92,839 125,772
Cash Flows from Capital and Related
Financing Activities:
Capital contributions 8,659 8,659
Acquisition and construction
of capital assets (1,047) (25,077) (26,124)
Net cash used by capital and
related financing activities (1,047) (16,418) (17,465)
Cash Flows from Investing Activities:
Interest on cash and investments 467 467
Net increase (decrease) in cash and cash
equivalents 394,247 107 50,994 445,348
Cash and cash equivalents, July 1,2010 772,693 297,465 1,070,158
CASH AND CASH EQUIVALENTS,
JUNE 30, 2011 $ 1,166,940 $ 107 $ 348,459 $ 1,515,506
Reconciliation of Operating Income (Loss) to
Net Cash Provided by Operating Activities:
Operating income (loss) $ 374,170 $ (42,911) $ (44,748) $ 286,511
Adjustments to reconcile operating income (loss)
to net cash provided by operating activities:
Depreciation and amortization 5,496 10,397 33,254 49,147
Change in assets and liabilities:
Receivables (5,431 ) (5,431)
Prepaid expense (3,108) (3,108)
Accrued expenses (1,770) (1,770)
Accounts payable 16,931 (312) (5,394) 11,225
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES $ 394,827 $ (32,826) $ (25,427) $ 336,574
See auditors report on pages 12-13.
-108-
CITY OF PADUCAH, KENTUCKY
SUPPLEMENTARY INFORMATION
INTERNAL SERVICE FUNDS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2011
COMBINING FINANCIAL STATEMENTS
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 acqulSltlons 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 coverage on a
continuing basis be financed primarily through user charges.
Exhibit D-l
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF NET ASSETS
INTERNAL SERVICE FUNDS
JUNE 30, 2011
ASSETS
Health
Fleet Fleet Lease Insurance Insurance Combined
Current Assets: Maintenance Trust Fund Fund Total
Cash and cash equivalents $ 300 $1,995,010 $283,858 $1,215,420 $3,494,588
Investments 1,500,000 1,500,000
Receivables, net 14,399 113 268 14,780
Prepaid expense 403,130 15,000 418,130
Inventories 73,364 73,364
Total current assets 73,664 3,912,539 283,971 1,230,688 5,500,862
Noncurrent Assets:
Net depreciable capital assets 28,597 2,630,690 2,659,287
Total assets 102,261 6,543,229 283,971 1,230,688 8,160,149
LIABILITIES
Current Liabilities:
Voucher and accounts payable 8,649 406 251,793 260,848
Accrued payroll and payroll taxes 14,509 14,509
Accrued compensated absences
Due to other funds 550,000 550,000
Total current liabilities 23,158 406 801,793 825,357
Noncurrent Liabilities:
Accrued compensated absences 45,879 45,879
Total liabilities 69,037 406 801,793 871,236
NET ASSETS
Invested in capital assets, net
of related debt 28,570 2,630,690 2,659,260
Unrestricted 4,654 3,912,539 283,565 428,895 4,629,653
TOTAL NET ASSETS $33,224 $6,543,229 $283,565 $ 428,895 $7,288,913
See auditors report on pages 12-13.
-109-
Exhihit D-2
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF REVENUES, EXPENSES,
AND CHANGES IN FUND NET ASSETS
INTERNAL SERVICE FUNDS
FOR THE YEAR ENDED JUNE 30, 2011
Health
Fleet Fleet Lease Insurance Insurance Combined
Operating Revenues: Maintenance Trust Fund Fund Total
Charges for services -internal $355,113 $ 768,165 $945,409 $3,529,851 $5,598,538
Charges for services external 256,160 256,160
Total operating revenues 355,113 768,165 945,409 3,786,011 5,854,698
Operating Expenses:
Vehicle maintenance 502,995 502,995
Administrative 13,872 390,380 404,252
Insurance 984,556 2,641,057 3,625,613
Leave expense 9,350 9,350
Depreciation 11,051 537,677 548,728
Total operating expenses 523,396 551,549 984,556 3,031,437 5,090,938
Operating income (loss) (168,283) 216,616 (39,147) 754,574 763,760
Nonoperating Revenues and
(Expenses):
Interest and investment income 22 46,054 46,076
Gain (loss) on disposal of property
and equipment 2,066 60,474 62,540
Total nonoperating revenues
(expenses) 2,088 106,528 108,616
Income (loss) before operating
transfers (166,195) 323,144 (39,147) 754,574 872,376
Contributions and Operating
Transfers:
Transfers in 143,080 (4,523) 32,026 (550,000) (379,417)
Change in net assets (23,115) 318,621 (7,121) 204,574 492,959
Net assets, July 1,2010 56,339 6,224,608 290,686 224,321 6,795,954
NET ASSETS, JUNE 30, 201] $ 33,224 $6,543,229 $283,565 $ 428,895 $7,288,913
See auditors report on pages 12-13.
-110-
Exhibit D-3
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF CASH FLOWS
INTERNAL SERVICE FUNDS
FOR THE YEAR ENDED JUNE 30, 2011
Health
Fleet Fleet Lease Insurance Insurance Combined
Cash Flows from Operating Activities: Maintenance Trust Fund Fund Total
Receipts from other funds for services $ 355,113 $ 761,529 $ 962,929 $ 3,791,121 $ 5,870,692
Payments to suppliers (228,335) (228,335)
Payments to employees (280,349) (280,349)
Claims paid (2,636,652) (2,636,652)
Other receipts
Other payments (432,262) (1,018,750) 159,620 (1,291,392)
Net cash provided (used) by
operating activities (153,571) 329,267 (55,821) 1,314,089 1,433,964
Cash Flows from Noncapital Financing
Activities:
Transfers from other funds 143,080 (4,523) 32,026 (550,000) (379,417)
Cash Flows from Capital and Related
Financing Activities:
Purchase of capital assets (10,148) (554,202) (564,350)
Proceeds from sale of capital assets 2,066 78,690 80,756
Net cash used by capital and related financing (8,082) (475,512) (483,594)
Casb Flows from Investing Activities:
Proceeds from sales and maturities
of investments
Interest and dividends 22 46,054 46,076
Purchase of investments (250,000) (250,000)
Net cash provided (used) by investing activities 22 (203,946) (203,924)
Net increase (decrease) in cash
and cash equivalents (18,551) (354,714) (23,795) 764,089 367,029
Cash and cash equivalents, July I, 201 0 18,851 2,349,724 307,653 451,331 3,127,559
CASH AND CASH EQUIVALENTS,
JUNE 30, 2011 $ 300 $1,995,010 $ 283,858 $ 1,215,420 $ 3,494,588
Reconciliation of Operating Income (Loss) to
Net Cash Provided (Used) by Operating
Activities:
Operating income (loss) $ (168,283) $ 216,616 $ (39,147) $ 754,574 $ 763,760
Adjustments to reconcile operating
income (loss) to net cash provided
(used) by operating activities:
Depreciation and amortization 11,051 537,677 548,728
Change in assets and liabilities:
Receivables (6,636) 17,520 5,110 15,994
Prepaid expense (403,130) (403,130)
Inventories (2,398) (2,398)
Due to other funds 550,000 550,000
Accrued expenses 9,829 9,829
Accounts payable (3,770) (15,260) (34,194) 4,405 (48,819)
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES $ (153,571) $ 329,267 $ (55,821) $ 1,314,089 $ 1,433,964
See auditors report on pages 12-13.
-111-
CITY OF PADUCAH, KENTUCKY
SUPPLEMENTARY INFORMATION
FIDUCIARY FUNDS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2011
COMBINING FINANCIAL STATEMENTS
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.
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF FIDUCIARY NET ASSETS
FIDUCIARY FUNDS -PENSION TRUST FUNDS
JUNE 30, 2011
ASSETS
Cash and cash equivalents
Receivables:
Interest
Investments at fair value
Money market funds
Certificates of deposit
Common stock
Corporate bonds
U.S. agencies bonds
Mutual funds
Total assets
LIABILITIES
Voucher and accounts payable
NET ASSETS
Held in trust for pension benefits and
other purposes
See auditors report on pages 12-13.
Police and Appointive
Firefighters' Employees'
Retirement Fund Pension Fund
$ 3,674 $ 11,281
30,149 737
228,148
125,000
2,658,537
1,745,601
1,677,033
2,372,434
8,715,576 137,018
168
$8,715,408 $137,018
-112-
ExhibitE·l
Total
$ 14,955
30,886
228,148
125,000
2,658,537
1,745,601
1,677,033
2,372,434
8,852,594
168
$8,852,426
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF CHANGES IN NET ASSETS
FIDUCIARY FUNDS -PENSION TRUST FUNDS
FOR THE YEAR ENDED JUNE 30,2011
Police and Appointive
Firefighters' Employees'
Additions: Retirement Fund Pension Fund
Contributions:
Employer $ 451,428 $
Plan members 5,033
Total contributions 456,461
Investment earnings:
Net increase in fair value of investments 1,304,282
Interest and dividends 242,039 2,504
Net investment earnings 1,546,321 2,504
Total additions 2,002,782 2,504
Deductions:
Benefits 1,682,095 36,939
Administrative expenses 48,575 6,792
Total deductions 1,730,670 43,731
Change in net assets 272,112 (41,227)
Net assets, July 1, 2010 8,443,296 178,245
NET ASSETS, JUNE 30, 2011 $8,715,408 $137,018
See auditors report on pages 12-13.
-113-
Exhibit E·2
Totals
$ 451,428
5,033
456,461
1,304,282
244,543
1,548,825
2,005,286
1,719,034
55,367
1,774,401
230,885
8,621,541
$8,852,426
COMBINING FINANCIAL STATEMENTS
FIDUCIARY FUNDS
Private-purpose Trust Funds
Other Trusts 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 -PRN ATE-PURPOSE TRUST FUNDS
JUNE 30, 2011
ASSETS
Cash and cash equivalents
Accounts receivable
Investments at fair value
Mutual funds
Total assets
LIABILITIES
Due to other funds
NET ASSETS
Held in trust for other purposes
See auditors report on pages 12-13.
-114-
Maintenance
Other and Rehab
Trusts Trust
$ 49,226 $
1,000
1,109,092
1,158,318 1,000
885
$1,158,318 $ 115
Exhibit E·3
Total
$ 49,226
1,000
1,109,092
1,159,318
885
$1,158,433
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF CHANGES IN NET ASSETS
FIDUCIARY FUNDS -PRN ATE-PURPOSE TRUST FUNDS
FOR THE YEAR ENDED JUNE 30, 2011
Additions:
Contributions:
Intergovernmental revenues
Private donations
Total contributions
Investment earnings:
Net increase in fair value of investments
Loss on sale of investments
Interest and dividends
Net investment earnings
Total additions
Deductions:
Capital outlay
Administrative expenses
Transfers:
Interfund transfers in
Interfund transfers out
Total deductions
Change in net assets
Net assets, July 1,2010
NET ASSETS, JUNE 30, 2011
See auditors report on pages 12-13.
-115-
Maintenance
Other and Rehab
Trusts Trust
$ 2,025 $8,000
40,000
42,025 8,000
160,519
13,340
19,612
193,471
235,496 8,000
76,028 3,111
10,208 4,239
535
86,236 7,885
149,260 115
1,009,058
$1,158,318 $ 115
Exhibit E-4
Totals
$ 10,025
40,000
50,025
160,519
13,340
19,612
193,471
243,496
79,139
14,447
535
94,121
149,375
1,009,058
$1,158,433
COMBINING FINANCIAL STATEMENTS
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.
Payroll Fund:
Assets:
Cash and cash equivalents
Liabilities:
Payroll taxes and withholdings
payable
See auditors report on pages 12-13.
CITY OF PADUCAH, KENTUCKY
AGENCY FUND
STATEMENT OF CHANGES
IN ASSETS AND LIABILITIES
FOR THE YEAR ENDED JUNE 30, 2011
Balance
July 1,2010
$111,335
$111,335
-116-
Additions
$14,123,965
$14,123,965
Deductions
$14,102,223
$14,102,223
Exhibit E·5
Balance
June 30, 2011
$133,077
$133,077
CITY OF PADUCAH, KENTUCKY
STATISTICAL SECTION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2011
STATISTICAL SECTION
This part of the City of Paducah's comprehensive annual financial report presents
detailed information as a context for understanding what the information in the
financial statements, note disclosures, and required supplementary information say
about the City's overall financial health.
Contents
Financial Trends
These schedules contain trend information to help the reader understand how the
City's financial performance and well-being changed over time.
Revenue Capacity
These schedules contain information to help the reader assess the factors
affecting the City'S ability to generate its property and employee taxes.
Debt Capacity
These schedules present information to help the reader assess the afford ability of
the City'S current levels of outstanding debt and the City's ability to issue
additional debt in the future.
Economic and Demographic Information
These schedules offer economic and demographic indicators to help the reader
understand the environment within which the City's financial activities take
place.
Operating Information
These schedules contain service and infrastructure data to help the reader
understand how the information in the City's financial report relates to the
services the City provides and the activities it performs.
Sources: Unless otherwise noted, the information in these schedules is derived from
the comprehensive annual financial reports for the relevant year. The City
implemented the new reporting model in the fiscal year ended June 30, 2003.
Schedules presenting government-wide information include information beginning in
that year.
Page
117-122
123-128
129-132
133-135
136-137
. .....
;;:;
TABLE 1
CITY 01" PADUCAH, KENTUCKY
NET ASSETS BY COMPONENT
Last Nine Fiscal Years (1)
(accrual basis of accounting)
J!'iscal Year
2011 2010 (3) 2009 2008 2007 2006
Governmental Activities:
Invested in capital assets, net of related debt $32,905,977 $31,136,514 $31,215,252 $31,766,783 $32,557,572 $30,664,671
Restricted for:
Program purposes 1,264,986 1,100,696 2,183,559 1,782,251 1,904,321 1,018,231
Capital projects 5,987,399 5,077,026 4,363,913 5,028,420 4,618,923 2,689,804
Unrestricted 4,229,501 8,165,101 8,621,077 9,432,763 9,057,641 7,718,198
TOTALGOVERNMENTALACTIV~
NET ASSETS $44,387,863 $45,479,337 $46,383,801 $48,010,217 $48,138,457 $42,090,904
Business-Type Activities:
Invested in capital assets, net of related debt $ 1,334,230 $ 1,652,961 $ 1,721,419 $ 1,863,975 $ 1,491,523 $ 1,277,720
Restricted for:
Program purposes 999,885 620,800 369,368 579,460
Unrestricted 3,004,783 1,816,705 1,036,093 (19,965) (147,286) 132,090
TOTAL BUSINESS-TYPE
ACTIVITIES NET ASSETS $ 5,338,898 $ 4,090,466 $ 3,126,880 $ 2,423,470 $ 1,409,810
Primary Government:
Invested in capital assets, net of related debt $34,240,207 $32,789,475 $32,936,671 $33,630,758 $34,049,095 $31,942,391
Restricted for:
Program purposes 2,264,871 1,721,496 2,552,927 2,361,711 1,904,321 1,018,231
Capital projects 5,987,399 5,077,026 4,363,913 5,028,420 4,618,923 2,689,804
Unrestricted 7,234,284 9,981,806 9,657,170 9,412,798 8,910,355 7,850,288
TOTAL PRIMARY GOVERNMENT
NET ASSETS $49,726,761 $49,569,803 $49,510,681 $50,433,687 $49,482,694 $43,500,714
(1) The City began to report accrual information when it implemented GASB Statement 34 in fiscal year 2003. Therefore, ten years of data is not available but
will be accumulated over time.
(2) Significant change in governmental and business-type net assets due to reclassification for prior year omitted receivables, capital assets, and post-closure
landfill expenses,
(3) Significant change in governmental net assets due to restatement of prior year grant receivables,
2005 (2) 2004 2003
$29,492,197 $27,826,117 $27,955,839
727,699 714,538 713,766
940,323 4,031,802 3,583,589
7,419,037 (406,042) 1,571,120
$38,579,256 $32,166,415 $33,824,314
$ 1,463,118 $ 1,463,668 $ 1,425,753
(27,648) 1,979,494 1,565,100
$ 1,435,470 $ 2,990,853
$30,955,315 $29,289,785 $29,381,592
727,699 714,538 713,766
940,323 4,031,802 3,583,589
7,391,389 3,136,220
$40,014,726 $35,609,577 $36,815,167
Pages 1 of3
TABLE 2
CITY OF PADUCAH, KENTUCKY
CHANGES IN NET ASSETS
Last Nine Fiscal Years (1)
(accrual basis of accounting)
Fiscal Year
Expenses: 2011 2010 (4) 2009 2008(3) 2007 2006 2005 (2) 2004 2003
Governmental activities:
General government $ 9,786,052 $ 9,763,178 $ 12,148,118 $ 10,709,641 $ 9,462,543 $ 9,057,295 $ 8,431,994 $ 7,969,027 $ 7,396,882
Public safety 16,993,228 16,239,042 15,734,557 15,938,831 15,182,704 14,592,756 14,620,938 13,243,912 12,964,120
Public service 7,328,806 7,669,729 12,849,566 9,543,714 8,299,658 8,486,662 6,249,860 8,618,901 7,376,791
Parks and recreation 2,748,333 2,653,474 1,492,306 1,286,955 1,197,072 1,044,361 1,045,024 1,026,293 975,362
Planning and development 1,212,103 970,022 708,827 282,042 1,891,725 2,404,636 2,521,412 5,330,393 3,108,192
Interest on long-term debt 1,363,580 1,099,450 1,029,888 1,066,067 1,134,898 974,101 775,122 496,049 428,578
Total governmental activities expense 39,432,102 38,394,895 43,963,262 38,827,250 37,168,600 36,559,811 33,644,350 36,684,575
Business-type activities:
Solid Waste 3,832,130 3,797,097 4,037,845 4,086,747 4,079,684 3,893,013 3,683,954 3,419,464 3,359,731
Section Eight Housing 1,956,728 2,061,370 2,154,360 1,949,899
Civic Center 76,546 69,537 75,692 84,908 54,562 45,894 39,008 33,181 46,509
TISA 183,546 206,798 162,849 156,388 269,781 170,264 184,166 123,719
..:...
"{' Total business-type activities expense 6,048,950 6,134,802 6,430,746 6,277,942 4,401,438 4,208,688 3,893,226 3,529,959
TOTAL PRIMARY GOVERNMENT
EXPENSES $ 45,481,052 $ 44,529,697 $ 50,394,008 $ 41,570,038 $ 40,768,499 $ 37,537,576 $ 40,321,386 $ 35,779,884
Program Revenues:
Governmental activities:
Charges for services:
General government $ 1,051,509 $ 993,371 $ 1,303,667 $ 1,415,943 $ 1,730,046 $ 1,618,903 $ 1,485,005 $ 1,601,414 $ 1,445,383
Public safety 790,650 484,754 602,262 268,839 1,024,610 767,086 794,814 1,134,386 94,386
Public service 1,205,666 1,197,194 1,220,999 1,111,188 1,150,507 942,355 895,155 986,618 683,119
Parks and recreation 129,790 152,890 180,420 124,606 122,929 103,932 117,317 132,388 131,355
Planning and development 1,600 30,627 10,810 20,602 13,501 12,893 15,867
Operating grants and contributions 2,086,625 1,813,019 2,119,845 1,340,261 2,797,216 2,988,612 2,452,694 3,290,134 4,176,548
Capital grants and contributions 1,767,093 1,390,848 4,889,520 1,297,900 3,681,490 3,302,568 1,100,064 3,221,637 2,213,757
Total governmental activities program
revenues 7,031,333 6,032,076 10,318,313 5,589,364 10,517,608 9,744,058 6,858,550 10,379,470 8,760,415
Pages 20f3
TABLE 2
CITY OF PADUCAH, KENTUCKY
CHANGES IN NET ASSETS
Last Nine Fiscal Years (1)
(accrual basis of accounting)
Fiscal Year
Program Revenues: 2011 2010 (4) 2009 2008 (3) 2007 2006 2005 (2) 2004 2003
Business-type activities:
Solid Waste $ 4,476,139 $ 4,436,540 $ 4,547,959 $ 4,165,094 $ 3,928,140 $ 3,696,609 $ 3,583,417 $ 3,790,132 $ 3,298,964
Section Eight Housing
Civic Center 33,766 32,455 38,577 32,932 31,372 26,378 32,828 36,455 20,825
TlSA 138,797 148,158 148,291 143,833 193,713 106,697 104,087 100,778 93,383
Operating grants and contributions 2,400,540 2,340,267 1,965,936 1,785,809
Capital grants and contributions 8,659 27,239 129,032 9,480 23,969 22,894 14,735 24,990 3,666
Total business-type acti vities program
revenues 7,057,901 6,984,659 6,829,795 6,137,148 4,177,194 3,852,578 3,735,067 3,952,355 3,416,838
TOTAL PRIMARY GOVERNMENT
PROGRAM REVENUES $ 14,089,234 $ 13,016,735 $ 17,148,108 $ 11,726,512 $ 14,694,802 $ 13,596,636 $ 10,593,617 $ 14,331,825 $ 12,177,253
Net (Expense)lRevenue:
, Governmental activities: (32,400,769) (32,362,819) (33,644,949) (33,237,886) (26,650,992) (26,815,753) (26,785,800) (26,305,105) (23,489,510) -Business-type activities: 1,008,951 849,857 399,049 (140,794) (224,244) (356,110) (158,159) 315,544 (113,121) tp
TOTAL PRIMARY GOVERNMENT
NET (EXPENSE) $ (31,391,818) $ (31 ,512,962) $ (33,245,900) $ (33,378,680) $ (26,875,236) $ (27,171,863) $ (26,943,959) $ (25,989,561) $ (23,602,631)
General Revenues and Other Changes
in Net Assets:
Governmental activities:
Taxes and licenses:
Property taxes, levied for
general purposes 4,402,226 4,207,736 3,986,760 4,221,957 4,122,538 4,107,934 3,919,113 4,012,168 3,893,211
Insurance premium tax 3,476,309 3,797,347 4,055,228 4,699,458 4,414,672 3,863,953 3,957,289 3,767,864 3,580,964
Gross receipts license tax 4,243,511 4,229,102 4,320,850 4,061,587 4,050,057 3,899,432 3,720,784 3,496,438 3,404,338
Employee license tax 17,345,033 16,384,509 16,584,636 16,520,523 16,273,966 14,794,217 11,192,445 10,616,223 10,301,231
Other taxes 2,712,817 2,844,154 2,776,407 2,259,956 1,964,101 2,105,014 2,116,403 1,764,140 1,893,064
Intergovernmental revenue 1,401,400 1,243,028 1,201,973 955,645 871,273 836,132
Unrestricted investment earnings 264,913 172,213 336,960 540,620 639,702 462,292 290,647 220,992 325,811
Gain on sale of capital assets 62,539 64,620 68,530 119,200 48,656 8,340 (1,972) 125,714
Insurance recoveries 410,462
Litigation settlement (1,482,743)
Transfers (125,772) (78,893) (110,838) (96,609) (58,175) (115,754) (133,959) (68,964) 18,666
Total governmental activities 31,309,295 31,620,788 32,018,533 33,728,092 32,698,545 30,327,401 26,018,367 24,678,162 24,379,131
,
t?
TABLE 2
CITY OF PADUCAH, KENTUCKY
CHANGES IN NET ASSETS
Last Nine Fiscal Years (1)
(accrual basis of accounting)
Fiscal Year
General Revenues and Other Changes 2011 2010 (4) 2009 2008 (3) 2007 2006 2005 (2)
in Net Assets:
Business-type activities:
Unrestricted investment earnings $ 46,052 $ 33,724 $ 52,961 S 73,985 $ 83,854 $ 85,786 $
Gain on sale of capital assets 67,657 1,112 98,369 127,131 16,641 55,337
Transfers 125,772 78,893 110,838 96,609 58,176 115,754
Total business-type activities 239,481 113,729 262,168 297,725 158,671 256,877
Change in Net Assets:
Governmental activities: (1,091,474) (742,031) (1,626,416) 490,206 6,047,553 3,511,648
Business-type activities: 1,248,432 963,586 661,217 156,931 (65,573) (99,233)
TOTAL PRIMARY GOVERNMENT $ 156,958 $ 221,555 $ (965,199) S 647,137 $ 5,981,980 $ 3,412,415 $
(1) The City began to report accrual information when it implemented GASB Statement 34 in fiscal year 2003. Therefore, ten years of data is not available but will
be accumulated over time.
(2) Significant change in governmental and business-type net assets due to reclassification for prior year omitted receivables, capital assets, and post-closure landfill
expenses.
(3) The City began reporting Section Eight Housing fund as a business-type activity previously reported as a governmental fund. Prior years have not been restated.
(4) Significant change in governmental net assets due to restatement of prior year grant receivables.
51,508
27,500
133,959
212,967
(767,433)
54,808
(712,625)
Pages30f3
2004 2003
$ 32,826 $ 39,530
34,975 24,238
68,964 ( 18,666)
136,765 45,102
(1,626,943) 889,621
452,309 (68,019)
$ (l,174,634) $ 821,602
, ......
t::: ,
General Fund:
Unassigned
TOTAL GENERAL FUND
All Other Governmental
Funds:
Committed for:
Capital improvements
Assigned for:
Program purposes
Capital improvements
TOTAL ALL OTHER
GOVERNMENTAL
FUNDS
2011
$10.940,121
$10,940.121
$ 2,587,012
683,578
2,133,786
$ 5,404,376
2010 (4)
$ 10,208,678
$ 10,208,678
$ 2,844,706
1,402,731
5,151,791
$ 9,399,228
TABLE 3
CITY OF PADUCAH, KENTUCKY
FUND BALANCES, GOVERNMENT FUNDS
Last Ten Fiscal Years
(modified accrual basis of accounting)
2009
$ 10,311,490
$10,311,490
$ 2,618,147
1,634,547
1,745,766
$ 5,998,460
2008 (3)
$9,416,427
$9,416,427
$2,081,280
1,193,968
2,947,140
$6,222,388
Fiscal Year
2007 2006
$ 9,976,079 $ 9,157,310
$9,976,079
$1,692,872
1,543,547
2,926,051
$6,162,470
$9,157,310
$ 719,801
1,573,977
1,970,003
$4,263,781
2005 (1)
$8,303,702
$8,303,702
$
1,548,082
940,323
$2,488,405
(1) Significant increase in general fund balance due to reclassification for prior year omitted license and tax receivables in the amount of $3,870,992.
(2) Significant increase in capital improvements fund balance due to $9,290,000 bond issue for convention and arts center construction.
(3) Significant decrease in reserve for program purpose due to converting governmental fund to proprietary fund.
(4) Significant decrease in general fund balance due to restatement of prior year grant receivables.
2004
$4,642,073
$4,642,073
$
1,284,119
3,886,391
$5,170,510
2003
$4,925,982
$4,925,982
$
1,821,307
3,583,589
$5,404,896
2002
$ 4,441,662
$ 4,441,662
$
1.526,792
4,211,718
$ 5,738,510
TABLE 4
CITY OF PADUCAH, KENTUCKY
CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS
Last Ten Fiscal Years
(modified accrual basis o/accounting)
Fiscal Year
Revenues: 2011 2010 2009 2008 2007 2006 2005 2004 2003 (1) 2002
Taxes $ 6,223,511 $ 6,326,740 $ 5,867,782 $ 6,139,164 $ 6,044,069 $ 6,204,686 $ 6,016,570 $ 5,871,229 $ 5,773,871 $ 5,377,865
Licenses 25,704,849 24,979,768 25,411,112 25,924,562 25,140,615 23,432,565 19,368,765 18,423,244 17,900,739 17,299,400
Charges for services 811,590 846,087 866,688 835,105 783,018 654,059 625,281 668,659 743,826 1,452,732
Intergovernmental 1,148,362 1,091,324 1,086,377 1,565,348 1,676,783 1,529,879 1,192,724 1,029,307 1,186,306 590,372
Grants 2,992,519 2,062,554 5,405,810 1,673,936 6,089,711 5,797,500 3,758,041 4,002,721 4,900,775 3,990,245
Interest 205,837 121,246 225,251 419,103 540,204 402,943 251,302 190,350 316,794 541,277
Miscellaneous 1,790,890 2,653,382 2,250,344 1,944,310 1,832,161 1,844,285 1,377,175 3,781,034 1,803,408 963,956
Total revenues 38,877,558 38,081,101 41,113,364 38,501,528 42,106,561 39,865,917 32,589,858 33,966,544 32,625,719 30,215,847
Expenditures:
General government 5,151,370 5,277,916 4,726,435 5,051,374 4,763,839 4,286,431 4,171,662 3,891,251 3,943,031 3,446,408
Public safety 16,854,136 15,999,437 15,599,613 15,696,728 14,759,735 14,366,846 14,376,161 12,963,685 12,535,382 12,293,481
Public service 6,446,503 5,984,115 7,855,846 7,935,188 7,226,542 7,418,656 5,947,105 6,914,523 5,995,396 7,163,787
Parks and recreation 2,781,663 2,582,382 1,490,732 1,298,329 1,192,727 1,044,299 1,045,024 1,026,297 975,361 897,060
Planning and development 1,680,297 1,868,369 1,811,083 803,976 2,424,198 2,545,227 2,267,774 2,570,473 2,204,395 2,231,628
Other 486,239 847,188 514,488 520,611 526,238 481,690 462,099 2,343,844 645,653 323,844 ,
Capital outlay 5,121,682 8,324,312 8,580,910 4,826,983 6,504,491 5,003,091 4,870,136 10,987,184 4,172,978 7,579,179 -t-J
t;-> Debt service:
Principal requirement 2,233,588 1,020,585 830,682 880,887 782,870 594,047 552,938 428,613 379,229 362,275
Interest and fiscal
requirement 1,519,329 1,077,128 1,003,439 1,051,008 1,108,385 949,537 745,676 471,625 428,578 413,364
Total expenditures 42,274,807 42,981,432 42,413,228 38,065,084 39,289,025 36,689,824 34,438,575 41,597,495 31,280,003 34,711,026
Other Financing Sources
(Uses):
Bonds issued 6,645,000 1,718,605 6,100,000 5,000,000
Long-term debt draws 366,039 1,222,390
Long-term debt issued 258,391 69,032 246,667 275,000 3,500,000
Capital lease 405,796 405,796 405,796 371,979
Transfers in 8,455,433 9,722,852 5,928,413 6,241,886 5,209,977 6,034,070 3,394,420 3,939,188 2,074,459 1,788,462
Transfers out (8,201,253) (9,893,709) (6,150,847) (7,086,517) (5,556,722) (12,681,180) (4,712,171) (5,295,576) (3,167,686) (3,062,056)
Total other financing
sources (uses) 1,026,015 8,360,720 1,970,999 (472,652) (100,078) (547,110) (1,042,751) 7,143,612 (1,093,227) (1,273,594)
NET CHANGE IN FUND
BALANCES $ (2,371 ,234) $ 3,460,389 $ 671,135 $ (36,208) $ 2,717,458 $ 2,628,983 $ (2,891,468) $ (487,339) $ 252,489 $ (5,768,773)
Capital outlay (2) $ 4,833,547 $ 8,763,073 $ 2,850,717 $ 2,857,189 $ 4,638,045 $ 3,779,542 $ 3,981,143 $ 9,144,907 $ 1,907,998 $
Debt service as a percentage
of noncapital expenditures 10.02% 6.13% 4.64% 5.49% 5.46% 4.69% 4.26% 2,77% 2.75% 2.86%
(I) The City implemented GASB 34, the new reporting standard, in fiscal year 2003.
(2) For reports after fiscal year 2002, capital outlay is reported on the Reconciliation 0/ the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental
Funds to the Statements 0/ Activities.
I -N
W ,
TABLES
CITY OF PADUCAH, KENTUCKY
ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY
LAST TEN FISCAL YEARS
Assessed Valne Estimated
Fiscal Real Estate Personal Actual
Year Commercial Residential Property Franchise Total Value
2002 $ 575,900,884 $448,383,787 $466,849,195 $71,286,784 $ 1,562,420,650 $ 1,623,844,461
2003 592,033,879 461,336,810 453,327,389 79,952,984 1,586,651,062 1,647,809,422
2004 602,788,179 484,958,897 438,024,336 73,121,063 1,598,892,475 1,661,522,546
2005 622,478,658 500,350,485 425,304,684 74,460,202 1,622,594,029 1,684,469,469
2006 636,606,837 525,613,365 452,475,748 74,683,129 1,689,379,079 1,750,930,676
2007 692,018,288 561,151,216 482,481,332 51,455,112 1,787,105,948 1,847,595,428
2008 748,189,877 603,688,455 481,049,523 74,068,797 1,906,996,652 1,970,156,891
2009 776,876,510 645,672,462 526,966,182 56,333,800 2,005,848,954 2,069,450,607
2010 797,902,456 659,381,375 495,273,730 57,459,000 2,010,016,561 2,076,961,686
2011 780,357,859 670,841,459 536,894,082 46,722,282 2,034,815,682 2,103,120,249
Source: McCracken County Property Valuation Administrator.
Notes: Property in McCracken county is reassessed once every four years on average.
Percent
Total Assessed
Direct To
Tax Estimated
Rate Value Exemptions
0.328 96.2% $60,449,948
0.327 96.3% 60,184,497
0.326 96.2% 61,656,208
0.325 96.3% 60,901,557
0.325 965% 61,551,597
0.307 96.7% 60,489,480
0,287 96.8% 63,160,239
0.288 96.9% 63,601,653
0.286 96.8% 66,945,125
0.288 96.8% 68,304,567
I -N
.j:>.
I
Fiscal Real
Year Estate
2002 0.300
2003 0.300
2004 0.300
2005 0.300
2006 0.300
2007 0.275
2008 0.250
2009 0.250
2010 0.250
2011 0.250
TABLE 6
CITY OF PADUCAH, KENTUCKY
PROPERTY TAX RATES -DIRECT AND OVERLAPPING GOVERNMENTS
(PER $100 OF ASSESSED VALUE)
LAST TEN FISCAL YEARS
City Direct Rates
McCracken Co. City of Paducah Paducah
General Fund School Districts School Districts Juuior College
Total
Direct Real Real Real
Personal Rate Estate Personal Estate Personal Estate Personal
0.390 0.328 0.385 0.385 0.600 0.597 0.022 0.022
0.390 0.327 0.396 0.396 0.598 0.603 0.022 0.022
0.390 0.326 0.394 0.394 0.617 0.605 0.021 0.021
0.390 0.325 0.448 0.448 0.618 0.617 0.021 0.021
0.390 0.325 0.433 0.433 0.631 0.619 0.020 0.021
0.390 0.307 0.433 0.433 0.628 0.631 0.019 0.019
0.390 0.287 0.488 0.488 0.672 0.635 0.D18 0.018
0.390 0.288 0.489 0.491 0.672 0.678 0.021 0.023
0.390 0.286 0.504 0.504 0.678 0.678 0.022 0.022
0.390 0.288 0.504 0.504 0.711 0.711 0.016 0.020
Source: McCracken County Property Valuation Administrator and City Tax Levy Ordinance.
McCracken
County
Real
Estate Personal
0.196 0.237
0.196 0.221
0.190 0.199
0.196 0.226
0.197 0.236
0.197 0.236
0.189 0.219
0.096 0.106
0.095 0.095
0.095 0.098
Taxpayer
Kentucky Oaks Mall
Amerisourcebergen Drug Corp
NRE Acquisition Co LLC
Ducmall LLC
Paducah Medical Investors
Ingram Barge Company
South Central Bell
Wal-Mart Real Estate Business
Sams Real Estate Business Trust
Computer Services Inc
Wal-Mart Store
Alliant Foodservice, Inc.
Drury Inns, Inc.
NBS Equipment Service Corp.
Lowe's
H.B. Fuller
TOTALS
TABLE 7
CITY OF PADUCAH, KENTUCKY
PRINCIPAL TAXPAYERS
CURRENT YEAR AND NINE YEARS AGO
2011
(1)
(1) Percentage of
Assessed Total Assessed
Valuation Valuation
(2)
Assessed
Valuation
$ 50,900,262 2.50% $ 45,570,900
34,762,796 1.71% 19,987,875
21,689,324 1.07%
14,374,800 0.71%
13,440,090 0.66% 13,440,090
11,462,278 0.56%
11,396,600 0.56%
10,646,400 0.52%
9,222,955 0.45%
9,083,185 0.45% 12,728,139
0.00% 36,901,571
0.00% 17,725,575
0.00% 13,687,418
0.00% 13,453,438
0.00% 13,333,468
0.00% 10,771,209
$186,978,690 9.19% $197,599,683
(1) Source -Property Valuation Administration; Assessed value as of January 1,2010.
(2) Source -Property Valuation Administration; Assessed value as of January 1,2001.
-125-
2002
(2)
Percentage of
Total Assessed
Valuation
3.11%
1.37%
0.00%
0.00%
0.92%
0.00%
0.00%
0.00%
0.00%
0.87%
2.52%
1.21%
0.94%
0.92%
0.91%
0.74%
13.51%
Fiscal (1)
Year Taxes Levied
Ended for the
June 30, Fiscal Year
2002 $ 3,635,741
2003 3,667,855
2004 3,801,144
2005 3,834,896
2006 4,014,169
2007 4,000,684
2008 3,975,096
2009 4,202,029
2010 4,258,350
2011 4,202,236
TABLES
CITY OF PADUCAH, KENTUCKY
SECURED TAX LEVIES AND COLLECTIONS*
LAST TEN FISCAL YEARS
Collected within the
Fiscal Year of the Levy
(1) Percent of Collections
Amount of Levy in Subsequent
Collections Collected Years
$ 3,449,887 94.9% $170,130
3,414,329 93.1% 244,375
3,685,957 97.0% 104,797
3,762,592 98.1% 61,771
3,911,868 97.5% 88,998
3,855,679 96.4% 128,139
3,814,940 96.0% 140,425
4,017,032 95.6% 145,800
4,131,454 97.0% 74,926
4,110,973 97.8%
(1) Includes current year real and personal property tax.
* Source -City of Paducah Finance Department.
-126-
Total Collections to Date
Percent of
Total Levy
Collections Collected
$ 3,620,017 99.6%
3,658,704 99.8%
3,790,754 99.7%
3,824,363 99.7%
4,000,866 99.7%
3,983,818 99.6%
3,955,365 99.5%
4,162,832 99.1%
4,206,380 98.8%
4,110,973 97.8%
TABLE 9
CITY OF PADUCAH, KENTUCKY
EMPLOYEE LICENSE TAX COLLECTIONS
LAST TEN FISCAL YEARS
(1) Direct
Fiscal Taxes Tax
Year Collected Rate
2002 $ 9,873,201 1.50%
2003 10,301,231 1.50%
2004 10,616,222 1.50%
2005 11,183,157 1.50%
2006 14,947,835 2.00%
2007 16,258,946 2.00%
2008 16,535,542 2.00% (2)
2009 16,584,618 2.00%
2010 16,384,509 2.00%
2011 17,345,034 2.00%
$140,030,295
(1) Source -City of Paducah Finance Department -Actual collections during the fiscal year.
(2) Effective October 1,2005, employee license tax rate increased from 1.5% to 2.0%.
-127-
Taxpayers
By Range
$0 -$50,000
$50,001 -$100,000
$100,001 -$500,000
Greater than $500,000
TOTALS
Taxpayers
By Range
$0 -$50,000
$50,001 -$100,000
$100,001 -$500,000
Greater than $500,000
TOTALS
TABLE 10
CITY OF PADUCAH, KENTUCKY
PRINCIPAL EMPLOYEE LICENSE TAXPAYERS
CURRENT YEAR AND FIVE YEARS AGO*
2011
(1)
Number of Percentage Taxes
Filers of Total Collected
2,015 99.26% $12,302,244
10 0.49% 1,595,813
5 0.25% 3,446,977
0 0.00%
2,030 100.00% $17,345,034
2006
(1)
Number of Percentage Taxes
Filers of Total Collected
1,603 97.80% $ 7,462,359
19 1.16% 1,326,451
15 0.92% 2,907,406
2 0.12% 1,879,464
1,639 100.00% $13,575,680
(1) Source -City of Paducah Finance Department -Actual collections during the fiscal year.
*Principal employee license taxpayers five years ago is the earliest date this statistic is available.
-128-
Percentage of
Total Employee
License Tax
70.93%
9.20%
19.87%
0.00%
100.00%
Percentage of
Total Employee
License Tax
54.97%
9.77%
21.42%
13.84%
100.00%
, -N
\Q ,
Net
General Public
Fiscal Obligation Improvement
Year Bonds Debt
2002 $ 8,830,276 $
2003 8,803,949
2004 13,589,757 3,428,855
2005 13,210,195 3,503,274
2006 18,877,636 3,319,227
2007 18,278,164 3,320,522
2008 17,614,952 2,946,303
2009 19,706,394 5,187,262
2010 25,568,996 5,808,267
2011 24,805,676 4,910,742
TABLE 11
CITY OF PADUCAH, KENTUCKY
RATIO OF OUTSTANDING DEBT BY TYPE
LAST TEN FISCAL YEARS
Net Net
Public Refunding
Capital Improvement Revenue
Lease Debt Bonds
$ 234,054 $ $
79,825
Total
Primary
Government
$ 9,064,330
8,883,774
17,018,612
16,713,469
22,196,863
21,598,686
20,561,255
24,893,656
31,377,263
29,716,418
Notes: Details regarding the City'S outstanding debt can be found in the notes to the financial statements.
(1)
Ratio of
Net
Debt to
Actual
Value
0.56
0.54
1.02
0.99
1.27
1.17
1.04
1.20
1.51
1.41
(1) See Table 5 for estimated actual property value. This ratio is calculated using estimated property value for the prior year.
(2) See Table 16 for population data.
(3) See Table 16 for personal income data.
(3)
Net Debt as (2)
Percentage Net
of Personal Debt Per
Income Capita
1.87% $ 345
1.83% 338
3.51% 647
3.45% 635
4.58% 844
4.46% 821
4.24% 782
5.14% 946
6.48% 1,193
6.13% 1,188
. ......
t.J.)
0
I
Police and
Convention and Fire Pension
Fiscal Art Center Fund
Year Bonds Bonds
2002 $9,075,000 $
2003 8,850,000
2004 8,620,000
2005 8,380,000
2006 8,130,000 6,100,000
2007 7,870,000 5,925,000
2008 7,600,000 5,740,000
2009 7,320,000 5,545,000
2010 7,030,000 5,340,000
2011 7,040,000 5,125,000
TABLE 12
CITY OF PADUCAH, KENTUCKY
RATIO OF NET GENERAL BONDED DEBT OUTSTANDING
LAST TEN FISCAL YEARS
~neral Bonded Debt Outstanding
Infiniti Public Less
Media FloodwaU Improvement Resources
Building Rehabilitation Project Restricted for
Bonds Bonds Bonds Debt Service
$ $ $ $244,724
46,051
5,000,000 30,246
4,840,000 9,805
4,680,000 32,364
4,515,000 31,836
4,340,000 65,048
4,160,000 2,774,638 93,244
3,975,000 2,671,440 6,645,000 92,444
3,780,000 2,564,948 6,370,000 74,272
Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements.
(I) See Table 5 for estimated actual property value. This ratio is calculated using estimated property value for the prior year.
(2) See Table 16 for population data.
(1)
Ratio of
Net (2)
Bonds to Net
Actual Bonds Per
Total Value Capita
$ 8,830,276 0.54 $ 336
8,803,949 0.53 335
13,589,754 0.82 517
13,210,195 0.78 502
18,877,636 1.08 718
18,278,164 0.99 695
17,614,952 0.89 670
19,706,394 0.95 749
25,568,996 1.23 972
24,805,676 1.18 991
TABLE 13
CITY OF PADUCAH, KENTUCKY
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
AS OF JUNE 30, 2011
(1)
Percentage
Net Debt Applicable
Outstanding to the City
City of Paducah $ 29,716,418 100.00%
Paducah Independent School District 32,327,737 * 100.00%
McCracken County 14,969,190 * 45.60%
McCracken County Board of Education 81,143,335 * 30.90%
Overlapping debt 128,440,262
TOTAL DIRECT AND OVERLAPPING DEBT $158,156,680
Estimated
Share of
Direct and
Overlapping
Debt
$ 29,716,418
32,327,737
6,825,951
25,073,291
64,226,979
$ 93,943,397
(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.
* Information from finance office at each location.
-131-
Net assessed value
Add exemption
Total assessed value
Debt limit 10% of total assessed (1)
Debt outstanding:
General obligation bonds outstanding
Note 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
Debt limit
Total net debt
applicable to limit
LEGAL DEBT
MARGIN
Total net debt
applicable to the
limited as a
percentage of
debt limit
2011
$210,312,025
29,716,418
$180,595,607
14.13%
2Olf) 2009
$207,696,169 $206,945,061
24,893,656
$176,318,906 $182,051,405
15.11% 12.03%
TABLE 14
CITY OF PADUCAH, KENTUCKY
LEGAL DEBT MARGIN INFORMATION
LAST TEN FISCAL YEARS
Fiscal Year
2008 2007 2006
$197,015,689 $182,759,543 $175,093,068
21,598,686 22,196,863
$176,454,434 $161,160,857 $152,896,205
10.44% 11.82% 12.68%
2005
$168,349,559
16,713,469
$151,636,090
9.93%
2004
$166,054,868
17,018,612
$149,036,256
10.25%
$ 24,879,948
4,910,742
29,790,690
2003
$164,683,556
8,883,774
$155,799,782
5.39%
$2,034,815,682
68,304,567
$2,103,120,249
$ 210,312,025
29,716,418
$ 180,595,607
2002
$ 162,287,060
9,064,330
$ 153,222,730
5.59%
(1) "Cities shall not be authorized or permitted to incur indebtedness to an amount, including existing indebtedness, in the aggregate exceeding the following names 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."
TABLE1S
CITY OF PADUCAH, KENTUCKY
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN FISCAL YEARS
(1) (1) (1) (1) (2) (3)
Personal Per Capita Median School Unemployment
Fiscal Year Population Income Income Age Enrollment
2001-2002 26,307 $484,496,019 $ 18,417 39.9 2,909
2002-2003 26,307 484,496,019 18,417 39.9 2,887
2003-2004 26,307 484,496,019 18,417 39.9 2,977
2004-2005 26,307 484,496,019 18,417 39.9 2,819
2005-2006 26,307 484,496,019 18,417 39.9 2,834
2006-2007 26,307 484,496,019 18,417 39.9 2,804
2007-2008 26,307 484,469,019 18,417 39.9 2,832
2008-2009 26,307 484,469,019 18,417 39.9 2,774
2009-2010 26,307 484,469,019 18,417 39.9 2,659
2010-2011 25,024 484,469,019 * 18,417 * 41.4 2,789
Sources:
(1) Bureau of the Census Count 2010.
(2) Board of Education; represents elementary and secondary public schools.
(3) Kentucky Cabinet for Human Resources, Department for Employment Services.
* Personal income information from the 2010 Census Count has not been released as of the day of
this report.
-133-
Rate
6.3%
7.2%
5.8%
6.4%
5.7%
5.6%
6.1%
9.3%
8.5%
8.7%
, -w
.j::o.. ,
Employer
Western Baptist Hospital
Lourdes Hospital
Wal-Mart
Paducah Public Schools
LYNX Services
State of Kentucky
City of Paducah
Paxton Media Group
NRE Acquisitions
West Kentucky Community and Technical College
TOTALS
(1) Source -City of Paducah Finance Department.
TABLE 16
CITY OF PADUCAH, KENTUCKY
PRINCIPAL EMPLOYERS
CURRENT YEAR AND FIVE YEARS AGO*
2011
Percentage of
Total
Employees (1) Employment (2)
1864 6.27%
1390 4.67%
1108 3.72%
1679 5.64%
191 0.64%
370 1.24%
370 1.24%
225 0.76%
224 0.75%
510 1.71%
7931 26.64%
Employees (1)
1,660
1,500
570
600
390
390
380
285
280
270
6,325
(2) State of Kentucky Office of Employment and Training. Ratio based on employment within County of McCracken.
* Principal employers five years ago is the earliest date this statistic is available.
2006
Percentage of
Total
Employment (2)
5.55%
5.01%
2.01%
1.91%
1.30%
1.30%
1.27%
0.95%
0.94%
0.90%
21.14%
TABLEt7
CITY OF PADUCAH, KENTUCKY
CITY FULL-TIME EMPLOYEES BY FUNCTION*
Last Ten Fiscal Years
Fiscal Year
2011 2010 2009 20iis 2007 20ii6 2005 2004 2003 2002
Governmental Activities
General Government:
General administration 12 12 12 12 12 12 11 11 11 12
Finance 14 14 17 14 14 14 13 13 13 13
Human resources 0 0 0 3 3 3 4 3 3 3
Inspection 11 10 13 13 13 12 12 12 12 13
Information systems 6 6 4 4 4 3 3 3 3 2
Risk management 1 1 1 1 1 I 0 0 0 0
Public Safety:
Police 90 90 93 93 93 93 96 94 95 94
Fire 64 65 69 69 71 76 75 76 76 77
I Public Service: ...... w
Ul Streets 23 23 29 29 30 31 28 28 28 28 I
Facilities 14 34 36 35 34 35 38 39 39 38
Engineering 7 5 8 9 9 9 9 8 8 8
Other 6 4 6 6 6 4 4 2 2 2
Parks and recreation 24 7 7 7 7 7 9 9 8 8
Planning and development 9 9 10 11 11 11 11 11 11 10
Other:
Renaissance 5 3 5 0 0 0 0 0 0 0
Fleet maintenance 6 8 6 7 7 7 7 6 6 6
Business-we Activities
Solid waste 26 27 27 27 27 29 29 29 29 29
TOTALPRTIMARYGOVERNMENT 318 318 343 340 342 347 349 344 344 343 = = --= = ----= =-== =
* Employee budget census.
TABLE 18
CITY OF PADUCAH, KENTUCKY
OPERATING INDICATORS BY FUNCTION**
Last Ten Fiscal Years
2011 2010 2009 2008 2007 2006 2005 2004 2003 2002
General Government:
Building and electrical pennits issued 1,239 1,263 1,179 1,203 1,411 1,362 1,376 * * *
Business licenses issued 3,254 3,397 3,691 3,507 3,500 3,700 * * * *
Public Safety:
Police:
Adult arrests 3,564 3,859 4,454 4,170 5,012 3,827 * * * *
Murder 3 1 5 * * * *
Rape 22 12 20 15 18 15 * * * *
Robberies 31 56 41 49 42 35 * * * *
Burglary 155 245 169 203 208 211 * * * *
Auto theft 54 62 57 60 117 104 * * * *
Arson 6 7 7 8 16 7 * * * *
Traffic accidents 1,762 1,774 1,368 1,519 1,949 1,815 * * * *
Traffic violations 7,701 7,240 9,143 7,109 7,323 7,468 * * * * , Fire: -w
3,305 2,456 3,638 2,845 0\ Emergency responses 3,181 2,603 2,603 2,546 3,219 3,569 I
Fires extinguished 122 133 136 102 163 181 176 189 198 194
Structure fires 37 49 57 49 40 53 49 64 70 72
Incidents with reported losses 73 89 85 70 80 91 97 106 111 129
Medical/rescue 2,133 1,690 1,616 1,506 1,369 1,589 1,997 2,266 2,290 1,551
Tours/in-serviceslcar seats 671 676 907 699 485 485 485 485 485 468
Training man hours 7,033 8,493 7,716 4,344 1,183 1,418 1,188 965 1,058 804
Inspections 1,063 985 1,183 1,449 * * * * * *
Refuse Collection:
Residential:
Refuse collected (tons per day) 34 38 32 25 28 34 * * * *
Customers served 9,568 9,445 9,435 9,446 9,388 9,368 * * * *
Commercial:
Refuse collected (tons per day) 71 70 75 83 85 84 * * * *
Customers served 806 810 810 821 832 801 * * * *
Public Service:
911 dispatches 82,268 79,768 81,525 83,871 76,815 83,348 85,273 91,408 92,698 88,512
Police 44,794 42,496 40,921 43,420 41,887 47,091 48,275 53,504 54,521 53,318
Fire 3,226 2,702 2,490 2,720 2,399 2,907 3,424 4,190 4,058 2,467
Other 34,248 34,570 38,114 37,731 32,529 33,350 33,574 33,714 34,119 32,727
* Information not available.
** Information from city departments.
TABLE 19
CITY OF PADUCAH, KENTUCKY
CAPITAL ASSET STATISTICS BY FUNCTION*
Last Ten Fiscal Years
Fiscal Year
2011 2010 2009 2008 2007 2006 2005 2004 2003 2002
Public Safety:
Police:
Stations 1 1 1 1 1 1 1 1
Fire:
Stations 5 5 5 5 5 5 5 5 5 5
Refuse Collection:
Collection trucks:
Residential 9 9 7 10 9 8 8 # # #
Commercial 4 5 4 5 5 4 4 # # #
Other Public Works:
Streets (miles paved) 218 218 216 216 216 214 214 213 209 209
I Sidewalks (miles) 47 47 45 45 45 45 45 45 45 45 -w
...J Traffic signals 13 13 12 11 11 11 11 10 0 0 I
Parks and Recreation:
Parks 27 27 27 27 27 18 18 18 18 18
Acreage 1290 1290 960 960 960 325 325 325 325 325
Community centers 2 1 1 1 1 1 1 1 1 1
Swimming pools 1 1 1 1 1 1 1 1 3 3
Public tennis courts 6 6 6 6 6 6 6 6 6 6
Public golf courses 2 2 2 2 2 2 2 2 2 2
# Information not available.
* Information from city departments.
CITY OF PADUCAH, KENTUCKY
SINGLE AUDIT SECTION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30,2011
CITY OF PADUCAH, KENTUCKY
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2011
Federal GrantorlPass-Through Grantorl
Program Title:
Department of Housing and Urban
Development:
Direct Programs:
Section 8 Housing Choice Vouchers
Passed-through Kentucky Governors
Office for Local Development:
Community Development Block Grant
Passed-through Kentucky Housing
Corporation:
Home Investment Partnerships Program
Total Department of Housing and Urban
Development
Department of Justice:
Direct Programs:
Bulletproof Vest Partnership Program
Edward Byrne Memorial Justice
Assistance Grant Program
ARRA -Edward Byrne Memorial Justice
Assistance Grant Program
ARRA -Community Oriented
Policing Services
Passed-through Kentucky Department
of Revenue:
Project Safe Neighborhoods
Total Department of Justice
Department of Energy:
Passed-through Kentucky Department for
Local Government:
ARRA -Energy Efficient and Conservation
Block Grant
Total Department of Agriculture
Department of Homeland Security:
Direct Programs:
Port Security Grant Program
Port Security Grant Program
Assistance to Fire Fighters Grant Program
Passed-through Kentucky Emergency Management:
Disaster Grants -Public Assistance
Passed-through Kentucky Office of
Homeland Security:
Homeland Security Grant Program
Homeland Security Grant Program
Total Department of Homeland Security
-138-
Federal
CFDA
Number
14.871
14.228
14.239
16.607
16.738
16.804
16.710
16.609
81.128
97.056
97.056
97.044
97.036
97.067
97.067
N/A
Pass-Through
Grantor Number
KY20070109-0026
N/A
N/A
2010-DJ-BX-1069
2009-SB-B 9-1734
2009-RK-WX-0377
CT-073-100
PON2 112 1100000648 1
2008GBT80131
2009PUT90154
EMW-2009-FO-11526
FEMA-1976-DR-KY
P02 094 1000002706 1
P02 094 1000002289 1
Expenditures
$2,321,173
339,645
9,800
2,670,618
6,917
33,300
83,576
157,186
13,499
294,478
49,999
49,999
1,474
5,975
38,609
507,941
134,633
156,868
845,500
(Continued)
CITY OF PADUCAH, KENTUCKY
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2011
Federal GrantorlPass.Through Grantorl
Program Title:
Department of Transportation:
Passed-through Kentucky Department
of Transportation:
State and Community Highway Safety
State and Community Highway Safety
Highway Planning and Construction
Total Department of Transportation
Department of Interior:
Passed-through National Park Service:
Historic Preservation Fund Grants-In-Aid
Preserve America Grant Program
Total Department of Interior
TOTAL EXPENDITURES OF FEDERAL AWARDS
Federal
CFDA
Numher
20.600
20.600
20.205
15.904
15.904
See accompanying notes to schedule of expenditures of federal awards.
-139-
Pass-Through
Grantor Nnmher
PR-U-36
AL-1O-23
C05024679
21-10-21924
21-08-AP-4115
Expenditures
$ 23,656
10,438
13,409
47,503
4,000
39,393
43,393
$3,951,491
CITY OF PADUCAH, KENTUCKY
NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL A WARDS
FOR THE YEAR ENDED JUNE 30, 2011
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
Four Rivers Recovery Center
River Heritage Museum
-140
Federal
CFDA
Number
14.228
20.205
Amount
Provided
$322,663
13,409
$336.072
THIS PAGE INTENTIONALLY LEFT BLANK
J. RICHARD WALKER
ROBERT R. ROBERTSON
C. SUZETTE CRONCH
MICHAEL F. KARNES
MARK A. TflOMAS
ROGER G. HARRIS
J. DAVID BAILEY, III
G. LEON WIWAMS. 192<>-2004
H. WILLIAM LENTZ, 1925-2007
JERRY G. SEVERNS
WILUAMS, WILLIAMS & LENTZ, LLP
CERTIFIED PUBLIC ACCOUNTANTS
601 JEFFERSON
PADUCAH, KENTUCKY 42001
Report on Internal Control Over Financial Reporting
and on Compliance and other Matters Based on an
Audit of Financial Statements Performed in Accordance
with Government Auditing Standards
Honorable William F. Paxton, Mayor
Members of the Board of Commissioners
City of Paducah
Paducah, Kentucky
MAILING ADDRESS
POST OFFICE BOX 2500
PADUCAH, KY 42002·2500
TELEPHONE
270-443·3643
E8l!:
270·444-0652
WEBSITE
wwlcpa.com
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, 2011, which collectively
comprise the City of Paducah, Kentucky's basic financial statements and have issued our report thereon dated
December 16,2011. Our report includes a reference to 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.
Other auditors audited the financial statements of the Transit Authority of the City of Paducah, a component
unit, as described in our report on the City of Paducah, Kentucky'S financial statements. This report does not
include the results of the other auditor's testing of internal control over financial reporting or compliance and
other matters that are reported on separately by those auditors.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the City of Paducah, Kentucky's internal control over
financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions
on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City of
Paducah, Kentucky's internal control over financial reporting. Accordingly, we do not express an opinion on
the effectiveness of the City of Paducah, Kentucky's internal control over financial reporting.
A deficiency in internal control exists when the design or operation of a control does not allow management or
employees, in the normal course of performing their assigned functions, to prevent, or detect and correct
misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in
internal control such that there is a reasonable possibility that a material misstatement of the entity's financial
statements will not be prevented, or detected and corrected on a timely basis.
Our consideration of internal control over financial reporting was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control over financial
reporting that might be deficiencies, significant deficiencies, or material weaknesses. We did not identify any
deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined
above.
-141-
Compliance and Other Matters
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 grant agreements, 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 or other matters that are required to be
reported under Government Auditing Standards.
This report is intended solely for the information and use of management, City Commission, others within the
entity, 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.
December 16,2011
-142-
J. RICHARD WALKER
ROBERT R. ROBERTSON
C. SUZETTE CRONCH
ANNETTE T. RYAN
MICHAEL F. KARNES
MARK A. THOMAS
ROGER G. HARRIS
J. DAVID BAILEY, III
G.LEON WILLIAMS, 1926·2004
H. WILLIAM LENTZ, 1925·2007
JERRY G. SEVERNS
WILLIAMS, WILLIAMS & LENTZ, LLP
CERTIFIED PUBLIC ACCOUNTANTS
601 JEFFERSON
PADUCAH, KENTUCKY 42001
Independent Auditor's Report on Compliance with
Requirements That Could Have a Direct and Material Effect
on Each Major Program and on Internal Control Over
Compliance in Accordance with OMB Circular A·133
Honorable William F. Paxton, Mayor
Members of the Board of Commissioners
City of Paducah
Paducah, Kentucky
Compliance
MAILING ADDRESS
POST OFFICE BOX 2500
PADUCAH, KY 42002·2500
TELEPHONE
270-443·3643
FAX
270444·0652
WEBSITE
wwlcpa.com
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, 2011. 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 compliance
requirements referred to above that could have a direct and material effect on each of its major federal
programs for the year ended June 30, 2011.
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 the 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, but not for the purpose of expressing an opinion on the effectiveness of internal control over
compliance. Accordingly, we do not express an opinion on the effectiveness of City of Paducah, Kentucky'S
internal control over compliance.
-143-
A deficiency in internal control over compliance exists when the design or operation of a control over
compliance does not allow management or employees, in the normal course of performing their assigned
functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal
program on a timely basis. A material weakness in internal control over compliance is a deficiency, or
combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that
material noncompliance with a type of compliance requirement of a federal program wil1 not be prevented, or
detected and corrected, on a timely basis.
Our consideration of internal control over compliance was for the limited purpose described in the first
paragraph of this section and would not necessarily identify all deficiencies in internal control that might be
significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over
compliance that we consider to be material weaknesses, as defined above.
This report is intended solely for the information and use of management, City Commission, others within the
entity, 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.
t?'d'.d,;..,/ tt/~T ~ :0 .. /1
December 16, 2011
-144-
CITY OF PADUCAH, KENTUCKY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2011
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 instances of a significant control deficiency 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 instances of significant deficiencies were disclosed during the audit of the major federal award
programs.
5. The auditor's report on compliance for the major federal award programs for the City of Paducah,
Kentucky expresses an unqualified opinion.
6. There are no audit findings relative to the major federal awards program to be reported.
7. The programs tested as major programs included:
Name
Section 8 Housing Choice Vouchers
Community Development Block Grant
Disaster Grants -Public Assistance
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 -Major Federal Award Programs:
None
-145-
CFDA#
14.871
14.228
97.036
CITY OF PADUCAH, KENTUCKY
SCHEDULE OF PRIOR AUDIT FINDINGS
FOR THE YEAR ENDED JUNE 30, 2011
Findings. Financial Statements Audit:
1. Segregation of Duties -The payroll clerk is responsible for the processing of payroll and the direct
deposit transmission to employees. At a minimum, someone independent of the payroll function
should review the direct deposit transmission to validate the employees being paid and to check the
accuracy of the wages transmitted.
Management's Response: When management was notified of this finding during audit fieldwork,
additional controls were immediately enacted. A staff member independent of the payroll function
reviews the payroll file before transmission, examining the payees as well as verifying the
transmittal amount. Upon transmittal, this staff member also confirms that the correct amount was
transmitted to the bank.
Findings and Questioned Costs· Major Federal Awards Programs:
None
-146-