HomeMy WebLinkAboutJune-30-2013
CITY OF PADUCAH,
KENTUCKY
COMPREHENSIVE
ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2013
FINANCE DEPARTMENT
CITY OF PADUCAH,
KENTUCKY
City of Paducah
Paducah, Kentucky
Comprehensive Annual Financial Report
Year Ended June 30, 2013
Issued by the
Finance Department
CITY OF PADUCAH, KENTUCKY
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2013
TABLE OF CONTENTS
Exhibit No. Page No.
Introductory Section:
Letter of Transmittal 1 - 7
Organizational Chart 8
Principal Officials 9
GFOA Certificate of Achievement 10
Financial Section:
Independent Auditor’s Report 11-12
Required Supplementary Information:
Management’s Discussion and Analysis 13-28
Basic Financial Statements:
Government-wide Financial Statements:
Statement of Net Position 1 29-30
Statement of Activities 2 31-32
Fund Financial Statements:
Governmental Funds:
Balance Sheet 3 33-34
Reconciliation of the Governmental Funds Balance
Sheet to Statement of Net Position 4 35-36
Statement of Revenues, Expenditures and Changes
in Fund Balances 5 37-38
Reconciliation of the Statement of Revenues,
Expenditures and Changes in Fund Balances of
Governmental Funds to the Statement of Activities 6 39-40
Statement of Revenues, Expenditures and Changes -
Budget and Actual - General Fund 7 41-44
Statement of Revenues, Expenditures and Changes -
Budget and Actual - Special Revenue Investment Fund 8 45
Proprietary Funds:
Statement of Net Position 9 46
Statement of Revenues, Expenses and Changes in
Fund Net Position 10 47
Statement of Cash Flows 11 48
Fiduciary Funds:
Statement of Net Position 12 49
Statement of Changes in Net Position 13 50
Notes to Financial Statements 51-85
Required Supplementary Information:
Pension Trust Fund Schedules A-1 86
Exhibit No. Page No.
Supplementary Information:
General Capital Improvements Detail Schedule of
Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual B-1 87
Debt Service Fund Detail Schedule of Revenues,
Expenditures, and Changes in Fund Balance - Budget
and Actual B-2 88
Nonmajor Governmental Funds:
Combining Balance Sheet B-3 89-90
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances B-4 91-92
Detail Statement of Revenues, Expenditures, and
Changes in Fund Balance - Budget and Actual:
Municipal Aid Program Fund B-5 93
Emergency Communication Service Fund B-6 94
Court Awards Fund B-7 95
Small Grant Fund B-8 96
CDBG Grant Fund B-9 97
Home Grant Fund B-10 98
Special Revenue Bond Fund B-11 99
Nonmajor Proprietary Funds:
Nonmajor Enterprise Funds:
Combining Statement of Net Position C-1 100
Combining Statement of Revenues, Expenses and
Changes in Fund Net Position C-2 101
Combining Statement of Cash Flows C-3 102
Internal Service Funds:
Combining Statement of Net Position D-1 103
Combining Statement of Revenues, Expenses, and
Changes in Fund Net Position D-2 104
Combining Statement of Cash Flows D-3 105
Fiduciary Funds:
Combining Statement of Net Position - Pension
Trust Funds E-1 106
Combining Statement of Changes in Net Position -
Pension Trust Funds E-2 107
Combining Statement of Net Position -
Private-purpose Trust Funds E-3 108
Combining Statement of Changes in Net Position -
Private-purpose Trust Funds E-4 109
Statement of Changes in Assets and
Liabilities - Agency Funds E-5 110
Table No. Page No.
Statistical Section:
Net Position by Component 1 111
Changes in Net Position 2 112-113
Fund Balances, Governmental Funds 3 114
Changes in Fund Balances, Governmental Funds 4 115
Assessed and Estimated Actual Value of
Taxable Property 5 116
Table No. Page No.
Statistical Section:
Property Tax Rates - Direct and Overlapping
Governments 6 117
Principal Taxpayers 7 118
Secured Tax Levies and Collections 8 119
Employee License Tax Collections 9 120
Principal Employee License Taxpayers 10 121
Ratio of Outstanding Debt by Type 11 122
Ratio of Net General Bonded Debt Outstanding 12 123
Direct and Overlapping Governmental
Activities Debt 13 124
Legal Debt Margin Information 14 125
Demographic and Economic Statistics 15 126
Principal Employers 16 127
City Full-Time Employees by Function 17 128
Operating Indicators by Function 18 129
Capital Asset Statistics by Function 19 130
Single Audit Section:
Schedule of Expenditures of Federal Awards 131
Notes to the Schedule of Expenditures of Federal
Awards 132
Independent Auditor’s 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 133-134
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-133 135-136
Schedule of Findings and Questioned Costs 137
Schedule of Prior Audit Findings 138
CITY OF PADUCAH, KENTUCKY
INTRODUCTORY SECTION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2013
December 20, 2013
Honorable Mayor and Commissioners
City of Paducah
Paducah, Kentucky
We are pleased to submit Paducah's Comprehensive Annual Financial Report for the year ended June 30,
2013. 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, 2013,
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.
CITY OF PADUCAH
Finance Department
P.O. Box 2267
Paducah, KY 42002-2267
270-444-8512
- 2 -
Economic Development Activities
Paducah Economic Development (PED) 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, PED
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, PED 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.
In 1997, the City of Paducah jointly with the County of McCracken acquired the ‘Industrial Park West of
Paducah and McCracken County’. This park contains 218 acres with immediate access to two major
railroad lines, Paducah and Louisville and Paducah and Illinois (formerly Illinois Central). The park is
located within the southwest quadrant of the I-24/Cairo Road interchange.
In 2007, PED 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.
The availability of higher education in the area is continuing to flourish. West Kentucky Community and
Technical College (WKCTC), formerly known as Paducah Community College, is 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. In 2011, Murray State University entered into an
agreement with the City, McCracken County, and Paducah Economic Development to construct an
approximately 40,000 square foot educational building to serve as their Paducah campus. Classes are
scheduled to begin at the Paducah campus for the spring 2014 semester.
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,
- 3 -
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.
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
11th 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 film 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 fourteenth 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.
- 4 -
The most recent addition to the City’s cultural lineup is the ‘Luther F. Carson Four Rivers Center for the
Performing Arts’. The Center opened in February 2004, as a regional, multiple-purpose facility, with a
1,800-seat main hall designed to accommodate a wide variety of cultural and educational programs.
The McCracken County Public Library offers a large selection of literature, special collections and
programs. The West Kentucky Community and Technical College Library supplement this community
resource. The combined inventories of the two libraries yield nearly 121,000 titles, not counting
numerous periodicals and newspapers.
THE GOVERNMENT
Paducah operates under a 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 309 full-time employees as of June 30, 2013. 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 services 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 City has one component unit that has been presented as a discrete unit to emphasize that it is legally
separate from the City. Paducah Water Works is included in the City’s financial statements because of its
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.
- 5 -
The City’s accounting records for the governmental funds and agency funds are maintained on a modified
accrual basis, with revenues being recorded when “measurable and available” and expenditures being
recorded when the services or goods are received and the liabilities are incurred. Accounting records for
the City’s proprietary funds and trust funds are maintained on the accrual basis, with revenues recognized
when earned and expenses recorded when the liability is incurred or economic asset used.
Internal Control
In developing and evaluating the City’s accounting system, consideration is given to the adequacy of
internal controls. Because the cost of a control should not exceed the benefits to be derived, the objective
of these internal controls is to provide reasonable, rather than absolute assurance that the financial
statements are free of any material misstatements. 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-date basis. An expenditure, which would
result in an overrun of department appropriation, cannot be made until additional funds are appropriated
and a budget amendment is approved. Purchase orders which result in an overrun of department
appropriations cannot be honored until additional appropriations are made available. 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 FY2013, one 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 FY2013
this contribution was $422 thousand. This amount was $392 thousand in FY2012.
As part of the City’s annual budget process, financial policies are reviewed and amended as necessary. In
FY2013, there were no official changes in policy that would have a significant impact on the financial
statements of the City.
LONG-TERM FINANCIAL PLANNING
On October 1, 2005, the City’s payroll tax was increased ½ cent. As a result of the payroll tax increase,
the City Commission created the Investment Fund. The Investment Fund is funded with the ½ cent
increase and is dedicated to the following purposes: economic development, community redevelopment,
infrastructure capital investment, and property tax relief. During the FY 2013 budget process, the
- 6 -
Commission reviewed numerous decision packages proposed for the Investment Fund Budget;
expenditures totaling approximately $5 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 12.5-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 65% of the project. In FY2009, the City
proceeded with making the most seriously needed repairs by borrowing around $2 million. In FY2011,
the U.S. Army Corps of Engineers (USACE) issued a Feasibility Report, which recommended certain
rehabilitation projects to improve the reliability and restore the system performance of the floodwall. The
USACE and the City are now ready to initiate Preconstruction Engineering and Design (PED) and prepare
plans and specifications for the reconstruction projects as listed within the Feasibility Report.
Riverfront Redevelopment Plan. The City’s Riverfront Redevelopment Plan includes proposed
improvements that will provide public amenities, recreational facilities & 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. In FY2007 the City was allocated
$5.3 million in federal funds for construction of Phase 1 and the Ohio River Boat Launch Project.
Environmental assessment and remediation procedures required by the permitting process temporarily
stalled the construction of this phase of the project. However, permits were finally secured, and the
official groundbreaking for the project was held in November 2012. The boat launch portion of the
project was completed in fall 2013. However, the remaining portion of Phase 1 is now at another
crossroad. Bids to complete the first phase have greatly exceeded estimates. The entire project is now
under review to determine what the next steps will be. Once construction is complete, operating costs
will be a long-term planning consideration.
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 29,690 persons employed (McCracken County) as of
June 30, 2013.
The June 2013 unemployment rate was 8.4% (McCracken County), which is an increase from 8.0% in the
prior year, and slightly exceeds the June 2013 federal unemployment rate of 7.6%. 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 1,202 for fiscal year 2013 valued at $50 million, which is down $3.9 million from
fiscal year 2012.
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
Kemper CPA Group, 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.
- 7 -
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, 2012. This was the twenty-
second 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 Kemper CPA Group, 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.
CITY OF PADUCAH, KENTUCKY ORGANIZATIONAL CHART CITIZENS OF PADUCAH CITIZENS OF PADUCAH Mayor and Commissioners Advisory Board and Committees City Manager City Attorney Finance Department City Clerk Paducah Riverfront Development Authority Parks Department Fire Department Police Department Planning Department Engineering/ Public Works Department -8- Information Systems Human Resources /Risk Management Paducah Renaissance Alliance
CITY OF PADUCAH, KENTUCKY
PRINCIPAL OFFICIALS
BOARD OF COMMISSIONERS
Mayor Gayle Kaler
Mayor Pro tem Sandra Wilson
Commissioner Richard Abraham
Commissioner Carol Gault
Commissioner Allan Rhodes, Jr.
CITY MANAGER
Jeff Pederson
Finance Jonathan Perkins, C.P.A.
Police Chief James Berry
Fire Chief Steve Kyle
City Engineer/Public Works Richard Murphy
Planning Stephen Ervin
Parks Services Mark Thompson
Paducah Riverfront Development Authority Steve Doolittle
Information Services Greg Mueller
City Clerk Tammy Brock
Risk Manager Cindy Medford
Public Information Pam Spencer
-9-
CITY OF PADUCAH, KENTUCKY
FINANCIAL SECTION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2013
INDEPENDENT AUDITOR’S REPORT
Honorable Gayle Kaler, Mayor
Members of the Board of Commissioners
City of Paducah
Paducah, Kentucky
Report on the Financial Statements
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, as of and for the year ended June 30, 2013, and the related notes to the financial statements,
which collectively comprise the City’s basic financial statements as listed in the table of contents. We did not audit the
financial statements of the following component unit: Paducah Water Works, which represent 100 percent of the assets
and revenues of the Component Units column. These financial statements were audited by another auditor whose
report has been furnished to us, and our opinion on the basic financial statements, insofar as it relates to the amounts
included for Paducah Water Works, discretely presented component unit, is based on the reports of the other auditor.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with
accounting principles generally accepted in the United States of America; this includes the design, implementation, and
maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free
from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. 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 financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material
misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to
design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on
the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates
made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial
position of the governmental activities, the business-type activities, the aggregate discretely presented component units,
each major fund, and the aggregate remaining fund information of the City of Paducah, Kentucky, as of June 30, 2013,
and the respective changes in financial position, and, where applicable, cash flows thereof and the respective budgetary
comparison for the General Fund and the Special Revenue Investment Fund for the year then ended in accordance with
accounting principles generally accepted in the United States of America.
333 Broadway Suite 1001 Paducah, KY 42001
Phone: (270)443-4400 Fax: (270)443-0963 kempercpa.com
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and
analysis and pension trust fund schedules on pages 13–28 and 86 be presented to supplement the basic financial
statements. Such information, although not a part of the basic financial statements, is required by the Governmental
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.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the
City of Paducah, Kentucky’s basic financial statements. The introductory section, combining and individual nonmajor
fund, nonmajor enterprise, internal service and fiduciary financial statements, and statistical section, are presented for
purposes of additional analysis and are not a required part of the basic financial statements. The 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 States, Local Governments, and Non-Profit Organizations, and is
also not a required part of the basic financial statements.
The combining and individual nonmajor fund, nonmajor enterprise, internal service and fiduciary financial statements
and the schedule of expenditures of federal awards are the responsibility of management and were derived from and
relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such
information has been subjected to the auditing procedures applied in the audit of the basic financial statements and
certain additional procedures, including comparing and reconciling such information directly to the underlying
accounting and other records used to prepare the basic financial statements or to the basic financial statements
themselves, and other additional procedures in accordance with auditing standards generally accepted in the United
States of America. In our opinion, the combining and individual nonmajor fund, nonmajor enterprise, internal service
and fiduciary financial statements and the schedule of expenditures of federal awards are fairly stated in all material
respects in relation to the basic financial statements 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 do not express an opinion or provide any assurance on them.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 20, 2013, on our
consideration of the City of Paducah, Kentucky’s internal control over financial reporting and on 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 internal control over financial reporting or on compliance. That
report is an integral part of an audit performed in accordance with Government Auditing Standards in considering City
of Paducah, Kentucky’s internal control over financial reporting and compliance.
Certified Public Accountants and Consultants
Paducah, Kentucky
December 20, 2013
-12-
CITY OF PADUCAH, KENTUCKY
REQUIRED SUPPLEMENTARY INFORMATION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2013
- 13 -
CITY OF PADUCAH, KENTUCKY
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2013
The City of Paducah (“City”) offers Management’s Discussion and Analysis to provide a narrative overview
and analysis of City financial activities for fiscal year ended June 30, 2013. To fully understand the entire
scope of the City’s financial activities, this information should be read in conjunction with the letter of
transmittal (pages 1-7) and the basic financial statements (pages 29-85) 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 $53.5 million at the close of the 2012-2013 fiscal year. Of this
amount, $17.0 million (unrestricted net position) may be used to meet City government’s ongoing
obligations to citizens and creditors.
Total net position increased $5,374,714.
At fiscal year end, City governmental funds reported a combined ending fund balance of $20.3
million. Approximately 19% of this total amount, $3.9 million, is restricted or committed for
highways/streets and capital improvements. Assigned fund balance also comprises 19% 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’s fund balance was $12.3 million and
is available for spending at the City’s discretion. Cash makes up approximately $8 million. When
compared to actual total appropriations, the General Fund cash balance is 25.2%.
II. Overview of Financial Statements
This discussion and analysis serves as an introduction to the City’s basic financial statements, which
consist of four components: 1) government-wide financial statements, 2) fund financial statements, 3)
component unit financial statements, and 4) notes to the financial statements. This report also contains
other supplementary information in addition to the basic financial statements.
A. Government-Wide Financial Statements
Government-wide financial statements are designed to provide readers with a broad overview of
City finances in a manner similar to private-sector business.
The Statement of Net Position presents information on all City assets and liabilities, with the
difference between assets and liabilities reported as net position. Monitoring increases and/or
decreases in net position over time may serve as a useful indicator of whether the financial position
of the City is improving, stagnating, or deteriorating.
The Statement of Activities presents information showing how the City’s net position changed
during the fiscal year. All net position 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
- 14 -
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, and the Civic
Center.
Government-wide financial statements include not only the City (the primary government), but also
a legally separate Paducah Water Works (component unit) for which the City is financially
accountable. Financial information for the component unit is reported separately from the financial
information presented for the primary government itself.
The government-wide financial statements can be found on pages 29-32 of this report.
B. Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over segregated resources
for specific activities or objectives. The City of Paducah, like other state and local governments,
uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.
City funds can be divided into three categories:
1) Governmental Funds. Governmental funds are used to account for essentially the same
functions reported as governmental activities in the government-wide financial statements. Unlike
government-wide financial statements, however, governmental fund financial statements focus on
current sources and uses of spendable resources, as well as on balances of spendable resources
available at the end of the fiscal year. This information may be useful in evaluating a city’s near-
term financing requirements.
The City maintains eleven (11) 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 seven (7) 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 89-99.
Readers may better understand the long-term impact of the City’s near-term financing decisions by
comparing the narrow-focus governmental funds financial statements with governmental activities
in the government-wide financial statements. Exhibit 4 (pages 35-36) and Exhibit 6 (pages 39-40)
provide a reconciliation to ease comparison between the fund financial statements and the
government-wide statements.
The basic governmental fund financial statements can be found on pages 33-40 of this report.
2) Proprietary Funds. The City maintains two types of proprietary funds:
a. Enterprise Funds. Enterprise funds are used to report the same functions presented as
business-type activities in the government-wide financial statements and are used to account
for operations:
That are financed and operated in a manner similar to private business enterprises where
the intent of the governing body is that the costs of providing goods and services to the
general public on a continuing basis be financed or recovered primarily through user
charges; or
- 15 -
Where the governing body has decided that periodic determination of revenues earned,
expenses incurred, and/or net income is appropriate for capital maintenance, public
policy, management control, accountability or other purposes.
The City uses three enterprise funds to account for Solid Waste, Section Eight Housing, and
Civic Center. Civic Center receives subsidy from the General Fund.
The City’s component unit enterprise is the Paducah Water Works, which provides water.
This component unit, which has its own board of directors, is also an enterprise fund and is
shown on pages 29-32.
b. Internal Service Funds are used to accumulate and allocate costs internally among the
City’s various functions. The City uses internal service funds to account for fleet services,
fleet replacement, risk management (insurance) and employee health programs. Internal
service funds have been allocated between governmental activities and business-type
activities in the government-wide financial statements based on revenue earned.
Proprietary funds provide the same kind of information as government-wide financial
statements, but in greater detail. Individual data for the nonmajor proprietary funds is presented
in the form of combining statements on pages 100-102 of this report. Individual data for the
internal service funds is likewise presented in the form of combining statements on pages 103-
105 of this report.
3) Fiduciary Funds. Fiduciary funds are used to account for resources held for the benefit of
parties outside the government and are not reflected in government-wide financial statements
because those resources are not available to support City programs. Individual data for the
City’s three (3) fiduciary funds (Appointive Employees’ Pension, Police and Firefighters’
Retirement, and Cemetery and Parks Trusts Funds) are presented in the form of combining
statements on pages 106-110 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 51-85 of this report.
D. Other Information
In addition to basic financial statements and accompanying notes, this report also presents certain
required supplementary information concerning City funding of its obligation to provide pension
benefits to its employees and budgetary comparison schedules for the general and major special
revenue funds.
The combining statements referred to earlier in connection with nonmajor governmental funds,
nonmajor proprietary funds, internal service funds and fiduciary funds are presented immediately
following the required supplementary information on pensions and budgetary comparisons.
Combining fund statements and schedules can be found on pages 89-110 of this report.
- 16 -
III. Government-Wide Financial Analysis
As noted earlier, net position may serve over time as a useful indicator of the City’s financial
position. City assets exceeded liabilities by $53.5 million as of June 30, 2013.
For FY2013, the largest portion of the City’s net position (64%) reflects its investment in capital
assets (i.e., land, buildings, machinery, equipment and infrastructure) less outstanding related debt
used to acquire those assets. The City uses these capital assets to provide service to citizens and, as
a result, these assets are not available for future spending. The City’s capital assets investment is
reported net of related debt, but the resources to pay this debt must be provided from other sources
since the capital assets cannot be used to liquidate the liabilities.
An additional portion of City net position (4%) represents resources that are subject to external
restrictions on how they may be used. The remaining balance of unrestricted net position (32%)
may be used to meet the City’s ongoing obligations to citizens and creditors.
As of June 30, 2013, the City reports positive balances of net position, both for the government as a
whole, as well as for its separate governmental and business-type activities.
City of Paducah, Kentucky
Net Position
June 30
Governmental Activities Business-Type Activities Total Primary Government
2013 2012 2013 2012, 2013 2012
Current Assets $ 42,197,258 $ 36,580,489 $ 6,387,185 $ 6,529,327 $ 48,584,443 $ 43,109,816
Capital Assets 42,383,943 39,740,080 1,232,735 1,308,574 43,616,678 41,048,654
Other noncurrent assets 4,956,629 7,186,182 - - 4,956,629 7,186,182
Total Assets 89,537,830 83,506,751 7,619,920 7,837,901 97,157,750 91,344,652
Current Liabilities 12,462,807 10,296,274 468,277 473,276 12,931,084 10,769,550
Noncurrent liabilities 28,584,526 30,335,518 2,104,756 2,076,914 30,689,282 32,412,432
Total liabilities 41,047,333 40,631,792 2,573,033 2,550,190 43,620,366 43,181,982
Net position:
Invested in capital assets, net of
related debt 33,365,112 31,957,381 1,232,735 1,308,574 34,597,847 33,265,955
Restricted 1,586,181 5,003,581 385,885 732,817 1,972,066 5,736,398
Unrestricted 13,539,204 5,913,997 3,428,267 3,246,320 16,967,471 9,160,317
TOTAL NET POSITION $ 48,490,497 $ 42,874,959 $ 5,046,887 $ 5,287,711 $ 53,537,384 $ 48,162,670
- 17 -
The exhibit below charts the City’s total net position from the implementation of GASB 34 through
the present.
Annual increases to total net position 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.
After leveling off for several years, the City had a significant increase in net position of $5.4 million
in FY2013. This occurred for the following reasons:
At fiscal year-end there was $3.3 million in construction-in-progress for riverfront
development activities including a new boat launch and transient boat dock. The majority of
funding sources for this project through June 30 was from outside sources including a year-
end grant receivable for $1.7 million of federal funding as well as $809 thousand in
proceeds from the sale of property that had been acquired for development of a sports park.
The City also completed a major phase of the Greenway Trails project in FY2013, which was
partially funded with a $500 thousand federal grant.
During FY2013, Infiniti Plastic Technologies, Inc., defaulted on their capital sublease
agreement with the Paducah-McCracken Industrial Development Authority due to their
failure to fulfill and maintain employment obligations. As a result, Infiniti’s right to
purchase the leased premises has been forfeited. Although Infiniti has continued to make
lease payments as of the date of this report, the financial statements reflect the conversion of
the lease from capital to operating. The net change resulting from this event is an increase
of approximately $900 thousand to the City’s net position.
A. Analysis of the City’s Operations
The following table provides a summary of the City’s operations for the years ended June 30, 2013
and 2012. Governmental activities increased the City’s net position by $5,615,538. Business-type
activities decreased the City’s net position by $240,824.
- 18 -
City of Paducah, Kentucky
Changes in Net Position
June 30
Governmental Activities Business-Type Activities Total Primary Government
Revenues: 2013 2012 2013 2012 2013 2012
Program revenues:
Charges for services $ 2,950,117 $ 3,128,991 $ 4,400,785 $ 4,570,982 $ 7,350,902 $ 7,699,973
Operating grants/
contributions 3,067,581 2,215,247 1,724,385
1,647,981 4,791,966 3,863,228
Capital grants/
contributions 2,165,548 533,169 - 15,266 2,165,548 548,435
General Revenues:
Property taxes 4,502,276 4,267,812 - - 4,502,276 4,267,812
Franchise taxes 199,134 150,974 - - 199,134 150,974
Telecommunications tax 709,852 710,951 - - 709,852 710,951
Insurance premium tax 3,863,464 3,690,806 - - 3,863,464 3,690,806
Vehicle tax 626,772 614,786 - - 626,772 614,786
Bank tax 243,203 216,829 - - 243,203 216,829
Gross receipts license tax 4,391,352 4,359,835 - - 4,391,352 4 ,359,835
Employee license tax 18,336,124 18,095,182 - - 18,336,124 18,095,182
Other taxes 654,734 677,409 - - 654,734 677,409
Intergovernmental revenue 365,348 340,975 - - 365,348 340,975
Unrestricted investment
earnings 211,306 203,261 49,382 48,806 260,688 252,067
Gain on sale of capital assets 383,370 36,718 52,710 2,443 436,080 39,161
Miscellaneous (82,992) -95,386 - 12,394 -
Insurance recoveries - 27,448 -- - 27,448
Total revenues 42,587,189 39,270,393 6,322,648 6,285,478 48,909,837 45,555,871
Expenses:
General Government 7,843,140 12,937,997 - - 7,843,140 12,937,997
Public safety 18,204,945 17,045,731 - - 18,204,945 17,045,731
Public service 6,167,510 6,163,602 - - 6,167,510 6,163,602
Park & recreation 2,710,659 2,654,098 - - 2,710,659 2,654,098
Planning & development 1,463,659 1,192,952 - - 1,463,659 1,192,952
Interest on long-term debt 1,066,876 1,059,537 - - 1,066,876 1,059,537
Solid Waste - - 3,967,490 3,900,264 3,967,490 3,900,264
Section Eight Housing - - 2,032,844 1,921,004 2,032,844 1,921,004
Civic Center - - 78,000 71,069 78,000 71,069
TISA - - - 173,708 - 173,708
Total expenses 37,456,789 41,053,917 6,078,334 6,066,045 43,535,123 47,119,962
Increase (decrease) in Net
position before transfers 5,130,400 (1,783,524) 244,314 219,433 5,374,714 (1,564,091)
Transfers 485,138 270,620 (485,138) (270,620) - -
Change in net position 5,615,538 (1,512,904) (240,824) (51,187) 5,374,714 (1,564,091)
Net position, July 1 42,874,959 44,387,863 5,287,711 5,338,898 48,162,670 49,726,761
NET POSITION, JUNE 30 $ 48,490,497 $ 42,874,959 $ 5,046,887 $ 5,287,711 $ 53,537,384 $ 48,162,670
- 19 -
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 of tax
revenue to essential functions of the City.
The graph below depicts the breakdown of revenue by source for fiscal year 2013.
- 20 -
In fiscal year 2013, the City derived 79% of its revenue from taxes/licenses. Occupational licenses,
which include payroll withholding tax, business licenses, and insurance premium tax is the largest
source of income to the City, totaling $26.6 million. This category of revenue increased 1.7% from
fiscal year 2012. Insurance premium tax experienced the largest change percentage-wise within this
category with an increase of $172,658, or 4.7%. This is the second consecutive year of increase for
this tax. It is believed that economic recovery may be driving the increase. Although City staff is
hopeful this revenue source will continue to grow, receipts are still over a million dollars below
FY2008 levels, and FY2014 budget estimates for this revenue type are very conservative to reflect
the uncertainty. Employee license tax increased $240,942, or 1.3% from the prior year. 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. Property taxes continue to
be a stable source of revenue, comprising 11% of total revenue in both FY2013 and FY2012.
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 2013, business-type activities as a whole had a decrease in net assets of
$240,824. The Solid Waste Fund once again had a positive change in net assets that is consistent
with the prior year. Beginning in FY2012, an annual transfer of approximately $250,000 is made
from Solid Waste to the General Fund. The Phase II Storm Water Act requires that the City make
an effort to curb solid waste from the landfill/sewer system. As a result, three full time street
sweepers and eighteen right of way maintenance employees (one day a week) have been assigned to
this program. Because these are General Fund employees, the Solid Waste Fund is making monthly
interfund transfers to the General Fund to compensate for their use. Analysis of the remaining
business-type activities is included in Section IV-B of this report.
- 21 -
IV. Financial Analysis of the City’s Funds
A. Governmental Funds
The focus of the City’s governmental funds is to provide information on near-term inflows, outflows
and balances of spendable resources. Such information is useful in determining the City’s financing
requirements. Unreserved fund balance serves as a useful measure of the City’s net resources
available for spending at the end of the fiscal year.
At the end of the fiscal year, the City governmental funds reported combined ending fund balances
of $20.3 million. In FY2011, the City implemented GASB Statement No. 54, Fund Balance
Reporting and Governmental Fund Type Definitions. The redefined categories of fund balance are
described below:
Restricted fund balance has external limitations on use that may be imposed by creditors,
grantors, contributors, or laws and regulations. For example, at the end of the fiscal year,
the City had $1,301,421 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
$2,589,099 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 19% of the City’s fund balance is assigned for various purposes,
including capital improvements, public safety, and debt service.
Unassigned fund balance is the total fund balance in the General Fund in excess of the other
fund balance categories.
Approximately 61% of total fund balance, $12.3 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 $8 million available as cash; the balance is tied up in other assets
including accounts receivable and property taxes collectible. City fiscal policy (Ordinance 2012-6-
7929) requires that an amount not less than 8% of the General Fund’s budgeted expenditures remain
- 22 -
undesignated in the fund balance, or $2.5 million, which leaves $9.8 million as unreserved for fiscal
year 2013.
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 39% of expenditures and transfers out ($31.6 million). This has remained stable
since the implementation of GASB 34, as illustrated in the table below.
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 whose 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 ½ cent payroll tax increase, effective
October 1, 2005. The original FY2013 budget included appropriations in excess of anticipated
revenue by $344 thousand to fulfill ongoing commitments as well as fund several large multi-year
projects. However, not all of those funds were spent, leading to a decrease to the Investment Fund’s
fund balance of $42 thousand. For FY2013, just a few of those projects included: future hotel site
development; riverfront development; City-owned facility maintenance; continued support of
economic development agencies such as Paducah Economic Development and Entre-Paducah; debt
service payments on economic development and capital projects; community development in the
Fountain Avenue District; and resurfacing and sidewalk programs.
Fund balance in the General Capital Improvements fund increased by approximately $1.6 million
from the prior year to $3.1 million. The increase is due to funds set aside to complete several large
capital projects in FY2014. Capital improvement projects for the year are discussed in Section VI-A
of this report.
B. Proprietary Funds
The City’s proprietary funds provide the same information found in the government-wide financial
statements, but in more detail.
- 23 -
Net positions of the respective proprietary funds are:
Solid Waste $4,030,583
Section Eight Housing 392,898
Civic Center 155,026
TISA -
Combined total net asset change for the four funds was a decrease of $323,817, broken down as
follows: Solid Waste ($348 thousand increase), Section Eight Housing ($353 thousand decrease),
Civic Center ($9 thousand decrease), and TISA ($310 thousand decrease). The largest proprietary
fund, Solid Waste, was discussed under Business Type Activities (Section III-C). Section Eight had
successfully reduced program expenditures over the past few years to replenish reserves. However,
in FY2012, there was a nationwide HUD recapture effort to reduce housing agency reserves down to
an acceptable national average. Cuts were intensified in FY2013 as a result of the federal budget
sequester, and funding will continue to be unstable until there is resolution in passing the federal
budget for FY2014. The TISA fund was closed in FY2013. In mid-fiscal year 2012, TISA’s largest
partner other than the City, McCracken County, left the agency. Because there was minimal
external revenue flowing into the fund, the fund was dissolved, user charges were eliminated and
expenditures were transferred to the City’s Information Systems Department in the General Fund.
V. General Fund Budgetary Highlights
Differences between the original budget and the final budget resulted in a $705 thousand increase in
appropriations and can be briefly summarized as follows:
Appropriations
Department Increase Decrease
(In Thousands)
General Administration $ - $ 195
Finance - 34
Planning - 10
Radio and Rental Property 88 -
Human Rights - 6
Information Systems - 175
Risk Management - 1
Police - 122
Fire 7 -
Public Works - 192
Engineering Services - 75
Recreation - 202
PRDA - 6
Other 1,628 -
General Administration had a decrease in appropriations of $195 thousand. This was due to salary
slippage and unutilized contingency funds.
Radio and Rental Property had an $88 thousand increase in appropriations. There was a major
building maintenance project in FY2014 involving two of the City’s rental properties.
Police, Public Works, Recreation and Information Systems experienced decreases in excess of $100
thousand. These decreases in appropriations were due to significant salary slippage in these
departments.
The primary components of the “Other” department category are operating transfers out, which are
typically made to the capital project fund. Several large unanticipated interfund transfers were made
- 24 -
this year to fund shortages in the Riverfront and Greenway Trails projects, as well as to establish a
cash reserve in the debt service fund.
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,
2013, is $44 million (net of accumulated depreciation). This investment in capital assets includes
land, buildings and improvements, vehicles and equipment, park facilities, roads, highways, and
bridges, and construction in progress.
Capital improvements are included in each department budget until improvements are completed.
At the end of the fiscal year, completed projects are capitalized in the Government-wide Statements.
During fiscal year 2013, project and equipment additions totaled over $8.6 million, with $3.6 million
of that remaining in Construction in Progress at year-end. Some of the largest capital-type projects,
in terms of dollars in fiscal year 2013, are shown in the following table:
Infiniti Land & Building (conversion from capital lease) $ 2,759,012
Greenway Trails – Phase 1 640,121
Market House/River Discovery (Rental property) Roof Replacement 225,169
Vehicle Purchases 263,536
Front Loader 223,696
Street Sweeper 180,576
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, City-owned facility improvements, continued
neighborhood revitalization, and street and sidewalk rehabilitation are among the projects to be
addressed.
City of Paducah, Kentucky
Capital Assets
(Net of Accumulated Depreciation)
June 30
Governmental Activities Business-Type Activities Total Primary Government
2013 2012 2013 2012 2013 2012
Land $ 10,376,432 $ 11,107,875 $ 62,152 $ 62,152 $ 10,438,584 $ 11,170,027
Land improvements 2,509,348 1,902,527 - - 2,509,348 1,902,527
Construction in
progress 6,527,866 3,797,562 - - 6,527,866 3,797,562
Buildings and
improvements 6,868,297 4,910,512 299,337 316,061 7,167,634 5,226,573
Infrastructure 11,905,517 13,349,077 - - 11,905,517 13,349,077
Equipment 1,468,264 1,788,200 285,541 331,189 1,753,805 2,119,389
Furnishings and
fixtures 1,265 1,522 - - 1,265 1,522
Vehicles 2,726,954 2,882,805 585,705 599,172 3,312,659 3,481,977
TOTALS $ 42,383,943 $ 39,740,080 $ 1,232,735 $ 1,308,574 $ 43,616,678 $41,048,654
- 25 -
Additional information on City capital assets can be found in Note 3 in the notes to financial
statements on pages 66-69.
B. Long-Term Debt
At year-end, the City had $31,301,557 in outstanding bonds, accrued compensated absences and
notes payable, compared to $33,000,039 at June 30, 2012 with maturities extending through 2031.
Governmental Activities
2013 2012
Kentucky League of Cities – 2003 $ 2,024,294 $ 2,193,730
General Fund accrued compensated absences 2,018,813 2,028,218
Police/Firefighter Pension Fund Liability – 2006 4,655,000 4,895,000
Floodwall Rehabilitation – 2008 2,341,790 2,455,210
Convention Center Renovation – 2008 2,181,250 2,276,250
Public Improvement Projects – 2010 5,825,000 6,100,000
Refinanced Convention Center – 2010 6,220,000 6,630,000
Margaret Hank Agreement – 2011 151,812 176,255
Refinanced Infiniti Media Building – 2011 3,320,116 3,571,283
Murray State University Agreement – 2011 2,563,482 2,674,093
TOTALS $ 31,301,557 $ 33,000,039
The City had no new debt issues this fiscal year.
Debt issues prior to July 1, 2012 are described below:
Infiniti Media Building – Refinance. In August 2011, a $3.91 million bond obligation was issued
to advance refund $3.78 million of outstanding 2004 series bonds. The 2004 bonds were issued to
finance the construction of the Infiniti Media Building in the Paducah Industrial Park West. The
previous agreement with McCracken County was renewed: 50% of the principal amount of the
bonds was issued on behalf of McCracken County, Kentucky.
Murray State University (MSU) Agreement. In November 2011, the City entered into a general
obligation note in the amount of $2,674,093 with McCracken County and MSU to finance the
construction of an educational facility to be occupied by Murray State University.
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 finance 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% of the principal amount of the bonds.
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.
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 the public portion of a hotel purchase.
- 26 -
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.
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 was
obligated to make monthly lease payments to the City in an amount nearly equal to the debt service
obligation.
Police/Firefighter 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 $221,497,836. The City’s latest bond rating
by Standard & Poor’s is AA-. The City has a relatively low amount of general obligation debt, which
explains our large legal debt margin.
The City of Paducah, Kentucky, issues and incurs debt in order to fund capital improvement projects,
purchase major capital equipment and facilities, and respond to other special funding needs. In fiscal
year 2012, 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 debt can be found in Note 3 in the notes to financial
statements on pages 70-74.
VII. Other Potentially Significant Matters.
A. 2013A & S013B Bond Issues. In September 2013 the City issued $1.12 million in general
obligation bonds (Series 2013A) for the renovation and improvement of the City’s swimming pool.
Taxable general obligation bonds (Series 2013B) in the amount of $2.475 million were issued for
the following economic development purposes: 1) pay a portion of the cost of improvements to an
industrial facility to be leased to Macco Organiques Incorporated and 2) to pay a portion of the costs
of acquisition and construction of a building to be leased by the City and McCracken County and
subleased to TeleTech Services Corporation.
B. Post-employment Benefits. Over the years, the City’s contribution to the Kentucky Retirement
System (CERS) has seen a substantial rise in costs that has significantly impacted the City’s
operating budget. The table and graph below show the actual cost of the City’s contributions to
- 27 -
CERS for both Non-Hazardous and Hazardous employees for selected fiscal years 1994, 2004, and
2013.
CERS Employer Contributions
Non-Hazardous Hazardous
FY Rate Amount % Chg Rate Amount % Chg
1994 8.82% $386,815 18.49% $829,079
2004 7.34% $453,965 17% 18.51% $1,176,285 42%
2013 19.55% $1,506,420 232% 37.60% $2,999,285 155%
In early spring 2013, the State passed a pension reform bill (Senate Bill 2) to prevent pension costs
from escalating even higher. This legislation established a hybrid cash balance plan for participants
entering the plan after January 1, 2014, that provides a retirement benefit based on an individual’s
accumulated account balance. It also reset the amortization period to a new 30-year period
beginning with FY2015. Other highlights include the elimination of automatic cost of living
increases for retirees and provisions for retirement “spiking.” However, employer contribution rates
will not differ for employees beginning participation after January 1, 2014. The contribution rates
will be determined based on all CERS membership, and any excess funds contributed on new
employees will be used to pay down the system’s unfunded liability. The City is hopeful that the
enactment of this legislation will reduce its required contribution over time.
C. 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% of the beginning net
assets (July 1, 2008). The Fund still remains in an unfunded position due to these events. The July
2013 actuary study shows that the PFPF unfunded pension liability is approximately $4.1 million as
the following chart displays.
- 28 -
Since the 2009 drop, the City has contributed approximately $400,000 annually to meet the
actuary’s recommended amount toward the unfunded pension liability. The valuation as of July 1,
2013, indicates the minimum actuarially sound contribution for FY2014 will be $421,933.
VIII. Requests for Information
This financial report is designed to provide a general financial overview for those interested in the City
of Paducah government finances. Questions or requests for additional financial information may be
addressed to Jonathan Perkins, Finance Director, City of Paducah, 300 South 5th Street, Paducah, KY
42003.
CITY OF PADUCAH, KENTUCKY
BASIC FINANCIAL STATEMENTS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2013
Exhibit 1
Component
Unit
Paducah
Governmental Business-type Water Works
Current Assets:Activities Activities Total Authority
Cash and cash equivalents 19,529,468$ 5,427,308$ 24,956,776$ 1,516,811$
Receivables, net:
Notes 1,253,875 - 1,253,875 -
Accounts 6,848,325 491,497 7,339,822 513,212
Grants 2,353,457 - 2,353,457 -
Interest 6,946 - 6,946 -
Property tax 4,868,184 - 4,868,184 -
Accrued unbilled revenues - - - 1,030,255
Internal balances (468,380) 468,380 - -
Inventory 1,397,248 - 1,397,248 770,605
Prepaid pension obligation 5,519,099 - 5,519,099 -
Prepaid expenses 861,783 - 861,783 143,270
Other current assets 27,253 - 27,253 772,793
Total current assets 42,197,258 6,387,185 48,584,443 4,746,946
Noncurrent Assets:
Notes receivable 4,552,500 - 4,552,500 -
Lease receivable 0- - -
Bond issuance costs, net 404,129 - 404,129 -
Capital assets:
Land and construction in progress 16,904,298 62,152 16,966,450 2,093,776
Depreciable capital assets 25,479,645 1,170,583 26,650,228 44,734,960
Other assets - - - 4,341,574
Total noncurrent assets 47,340,572 1,232,735 48,573,307 51,170,310
Total assets 89,537,830$ 7,619,920$ 97,157,750$ 55,917,256$
CITY OF PADUCAH, KENTUCKY
STATEMENT OF NET POSITION
JUNE 30, 2013
ASSETS
-29-
Primary Government
Component
Unit
Paducah
Governmental Business-type Water Works
Current Liabilities:Activities Activities Total Authority
Voucher and accounts payable 3,549,833 283,297 3,833,130 337,793
Line of credit 308,112 - 308,112 -
Accrued payables 936,834 53,220 990,054 705,571
Unearned revenue 4,816,882 45,478 4,862,360 -
Accrued compensated absences 1,034,389 86,282 1,120,671 236,567
Accrued interest 134,115 - 134,115 -
Notes payable due within one year 353,916 - 353,916 758,698
Bonds payable due within one year 1,328,726 - 1,328,726 -
Other current liabilities - - - 136,447
Total current liabilities 12,462,807 468,277 12,931,084 2,175,076
Noncurrent Liabilities:
Accrued compensated absences 984,424 42,256 1,026,680 -
Landfill post-closure costs - 2,062,500 2,062,500 -
Notes payable 6,566,922 - 6,566,922 6,289,366
Bonds payable 21,033,180 - 21,033,180 -
Total noncurrent liabilities 28,584,526 2,104,756 30,689,282 6,289,366
Total liabilities 41,047,333 2,573,033 43,620,366 8,464,442
Invested in capital assets, net
of related debt 33,365,112 1,232,735 34,597,847 40,201,577
Restricted for:
Housing and development projects 225,665 385,885 611,550 -
Capital projects & infrastructure 1,301,421 - 1,301,421 -
Public safety 59,095 - 59,095 -
Unrestricted 13,539,204 3,428,267 16,967,471 7,251,237
TOTAL NET POSITION 48,490,497$ 5,046,887$ 53,537,384$ 47,452,814$
See accompanying notes to the basic financial statements.
-30-
LIABILITIES
NET POSITION
Primary Government
Exhibit 2
FUNCTIONS/PROGRAMS Operating
Charges for Grants and
Primary Government: Expenses Services Contributions
Governmental activities:
General government 7,843,140$ 1,525,212 670,142$ 1,729,689$
Public safety 18,204,945 354,829 647,553 430,622
Public service 6,167,510 963,893 813,179 -
Parks and recreation 2,710,659 106,183 - -
Planning and development 1,463,659 - 583,518 5,237
Interest on long-term debt 1,066,876 - 353,189 -
Total governmental activities (See Note 1) 37,456,789 2,950,117 3,067,581 2,165,548
Business-type activities:
Solid Waste 3,967,490 4,362,520 47,200 -
Section Eight Housing 2,032,844 - 1,677,185 -
Civic Center 78,000 38,265 - -
TISA - - - -
Total business-type activities 6,078,334 4,400,785 1,724,385 -
TOTAL PRIMARY GOVERNMENT 43,535,123$ 7,350,902$ 4,791,966$ 2,165,548$
Component Unit:
Paducah Water Works Authority 8,427,423$ 10,672,573$ -$ 811,645$
TOTAL COMPONENT UNITS 8,427,423$ 10,672,573$ -$ 811,645$
General revenues:
Taxes and licenses:
Property taxes, levied for general purposes
Franchise tax
Telecommunications tax
Insurance premium tax
Vehicle tax
Bank tax
Gross receipts license tax
Employee license tax
Other taxes
Transient room tax
Unrestricted investment earnings
Gain (loss) on sale of capital assets
Miscellaneous
Total general revenues
Transfers
Total general revenues and transfers
Change in net position
Net position - beginning
Net position of merger Hendron Water District Operations
Net position - ending
See accompanying notes to the basic financial statements.
CITY OF PADUCAH, KENTUCKY
Grants and
Contributions
FOR THE YEAR ENDED JUNE 30, 2013
STATEMENT OF ACTIVITIES
Program Revenues
Capital
-31-
Component Unit
Governmental Business-type Paducah Water
Activities Activities Total Works Authority
(3,918,097)$ -$ (3,918,097)$ -$
(16,771,941) - (16,771,941) -
(4,390,438) - (4,390,438) -
(2,604,476) - (2,604,476) -
(874,904) - (874,904) -
(713,687) - (713,687) -
(29,273,543) - (29,273,543) -
- 442,230 442,230 -
- (355,659) (355,659) -
- (39,735) (39,735) -
- - - -
- 46,836 46,836 -
(29,273,543) 46,836 (29,226,707) -
- - - 3,056,795
- - - 3,056,795
4,502,276 - 4,502,276 -
199,134 - 199,134 -
709,852 - 709,852 -
3,863,464 - 3,863,464 -
626,772 - 626,772 -
243,203 - 243,203 -
4,391,352 - 4,391,352 -
18,336,124 - 18,336,124 -
654,734 - 654,734 -
365,348 - 365,348 -
211,306 49,382 260,688 17,221
383,370 52,710 436,080 39,405
(82,992) 95,386 12,394 34,404
34,403,943 197,478 34,601,421 91,030
485,138 (485,138) - -
34,889,081 (287,660) 34,601,421 91,030
5,615,538 (240,824) 5,374,714 3,147,825
42,874,959 5,287,711 48,162,670 42,665,176
1,639,813
48,490,497$ 5,046,887$ 53,537,384$ 47,452,814$
Net (Expense) Revenue and Changes in Net Assets
Primary Government
-32-
Exhibit 3
Special
General
Fund
Assets
Cash and cash equivalents 7,971,715$ 3,024,012$ 1,514,608$
Receivables:
Accounts 6,729,187 809,094 -
Grants 50,258 1,753,830 -
Property taxes (net of
allowances for uncollectibles)4,945,184 - -
Due from other funds 262,626 - 1,105,491
Total Assets 19,958,970$ 5,586,936$ 2,620,099$
Liabilities
Voucher and accounts payable 515,979$ 2,380,686$ 31,000$
Accrued payroll and payroll taxes 867,602 - -
Due to other funds 1,105,491 - -
Unearned revenue - other - 151,000 -
Accrued compensated absences 252,090 - -
Total liabilities 2,741,162 2,531,686 31,000
Deferred Inflows of Resources
Unavailable revenue-property taxes 4,906,243 - -
Fund Balances:
Restricted for:
Highways and streets - - -
Public safety - - -
Program purposes - - -
Committed for:
Capital improvements - - 2,589,099
Assigned for:
Capital improvements - 3,055,250 -
Public safety - - -
Debt service - - -
Unassigned:
General Fund 12,311,565 - -
Total fund balances 12,311,565 3,055,250 2,589,099
TOTAL LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES 19,958,970$ 5,586,936$ 2,620,099$
See accompanying notes to the basic financial statements.
GOVERNMENTAL FUNDS
BALANCE SHEET
CITY OF PADUCAH, KENTUCKY
General
Capital
-33-
Revenue
Investment
FundImprovements
JUNE 30, 2013
Debt
Service
Fund
316,458$ 2,014,877$ 14,841,670$
37,359 231,859 7,807,499
- 549,368 2,353,456
- - 4,945,184
- - 1,368,117
353,817$ 2,796,104$ 31,315,926$
-$ 522,707$ 3,450,372$
- 52,969 920,571
- 235,373 1,340,864
- - 151,000
- - 252,090
- 811,049 6,114,897
- - 4,906,243
- 1,301,421 1,301,421
- 59,095 59,095
- 225,665 225,665
- - 2,589,099
- - 3,055,250
- 398,874 398,874
353,817 - 353,817
- - 12,311,565
353,817 1,985,055 20,294,786
353,817$ 2,796,104$ 31,315,926$
Governmental
-34-
Nonmajor
Governmental
Funds
Total
Funds
Exhibit 4
Total fund balance - total governmental funds 20,294,786$
Amounts reported for governmental activities in the Statement
of Net Position are different because:
187,316
4,795,000
6,946
1,336,234
5,519,099
42,383,944
404,129
(1,714,013)
(Continued)
The portion of accrued compensatedabsences not due and payable in
the current period, and therefore, not reported in the governmental
funds balance sheet.
Inventory is not a current financial resource and, therefore, is not
reported in the governmental funds balance sheet.
-35-
Bond issuance costs used in governmental activities are not current
financialresources and, therefore,are not reportedin the governmental
funds balance sheet.
Capital assets used in governmentalactivities are not current financial
resources and, therefore, are not reported in the governmentalfunds
balance sheet. This amount includescapital assets of Internal Service
Funds.
A prepaid pension obligation is not a current financial resource, and
therefore, is not reported in the governmental funds balance sheet.
CITY OF PADUCAH, KENTUCKY
RECONCILIATION OF THE GOVERNMENTAL FUNDS
BALANCE SHEET TO STATEMENT OF NET POSITION
Delinquent property taxes receivable are not reported in the
governmental funds balance sheet since they are not considered
"available" revenues.
Interest receivableon the long-termnotes receivableis not reported on
the governmentalfunds balance sheet since neither the note receivable
nor the interest is available to pay current period expenditures.
JUNE 30, 2013
The long-term notes receivable are not reported in the governmental
funds balance sheet since they are not available to pay current period
expenditures.
Exhibit 4
(Continued)
(134,115)$
$ 1,990,755
27,600,101 (29,590,856)
5,662,794$
(192,387)
(468,380) 5,002,027
NET POSITION OF GOVERNMENTAL ACTIVITIES 48,490,497$
See accompanying notes to the basic financial statements
JUNE 30, 2013
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.
business-type activities
Long-term liabilities of ($29,590,856) are not due and payable in the
current period and, therefore, they are not reported in the
governmentalfunds balance sheet. See Note 3 for detail. The long-
term liabilities are:
CITY OF PADUCAH, KENTUCKY
RECONCILIATION OF THE GOVERNMENTAL FUNDS
BALANCE SHEET TO STATEMENT OF NET POSITION
-36-
Due within one year
Due after one year
Current assets
Net amount allocated to
Internal service funds are used by managementto charge the costs of
certain activities, such as insurance and fleet management, to
individual funds. The assets and liabilities of the Internal Service
Funds (net of amount allocated to business-type activities) not
included in other reconciling items are:
Current liabilities
Exhibit 5
Special
General
Revenues: Fund
Taxes 6,148,969$ -$ -$
Licenses 22,674,348 - 4,522,942
Charges for services 589,360 - -
Intergovernmental - - -
Grants 781,628 2,255,963 -
Interest 144,899 5,609 5,609
Property upkeep, rentals, sales and other 1,142,445 1,160,641 -
Total revenues 31,481,649 3,422,213 4,528,551
Expenditures:
Current operations:
General government 4,481,485 - -
Public safety 16,530,378 - -
Public service 4,518,039 - -
Parks and recreation 2,664,164 - -
Planning and development - - 899,687
Intergovernmental and other 766,847 - -
Capital outlay - 4,324,821 -
Debt service:
Principal requirement - - -
Interest requirement - - -
Total expenditures 28,960,913 4,324,821 899,687
Excess (deficiency) of revenues over expenditures 2,520,736 (902,608) 3,628,864
Other Financing Sources (Uses):
Proceeds from debt issued - - -
Capital lease - - -
Transfers in 1,096,057 2,692,394 117,083
Transfers out (2,626,666) (222,474) (3,788,081)
Total other financing sources (uses) (1,530,609) 2,469,920 (3,670,998)
Net change in fund balances 990,127 1,567,312 (42,134)
Fund balances - beginning 11,321,438 1,487,938 2,631,233
Fund balances - ending 12,311,565$ 3,055,250$ 2,589,099$
See accompanying notes to the basic financial statements.
CITY OF PADUCAH, KENTUCKY
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2013
-37-
Improvements
Revenue
Investment
Fund
General
Capital
Debt
Service
Fund
-$ 434,721$ 6,583,690$
- - 27,197,290
- 226,431 815,791
577,255 663,057 1,240,312
93,684 606,127 3,737,402
- 19,254 175,371
- 440,612 2,743,698
670,939 2,390,202 42,493,554
- - 4,481,485
- 1,643,971 18,174,349
- 1,191,979 5,710,018
- - 2,664,164
- 877,210 1,776,897
- - 766,847
- - 4,324,821
1,698,468 - 1,698,468
1,089,447 - 1,089,447
2,787,915 3,713,160 40,686,496
(2,116,976) (1,322,958) 1,807,058
- 308,112 308,112
405,796 - 405,796
1,996,093 1,561,317 7,462,944
- (487,803) (7,125,024)
2,401,889 1,381,626 1,051,828
284,913 58,668 2,858,886
68,904 1,926,387 17,435,900
353,817$ 1,985,055$ 20,294,786$
Funds
Nonmajor
Governmental Governmental
Total
-38-
Funds
Exhibit 6
Net change in fund balances - total governmental fund 2,858,886$
Amounts reported for governmental activities in the Statement
of Activities are different because:
407,315
(169,385)
4,486,536
(351,111)
15,972
825,461
(67,253)
34,097
(308,112)
(Continued)
-39-
Realized gain from converting a direct financing lease to an operating lease
increases net position in the statement of activities, but does not appear in
governmental funds activity.
CITY OF PADUCAH, KENTUCKY
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
Inventorypurchases 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.
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.
Donationof capital assets from proprietary funds withhistoricalcost of $486,886
less depreciation of $452,789 is not reported in governmental funds activity.
FOR THE YEAR ENDED JUNE 30, 2013
Collections on long-term notes receivables and related interest receivable are
revenues in the government funds when collected.
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 depreciationexpense. This is the amount of capital outlays in the
current period. This amount includes Internal Service Fund's capital outlays of
$452,112.
Proceeds of the issuance of debt provides current financial resources and is
reported as an other financing source in governmental funds.
Payments on property taxes recognized as revenues when received in the
governmental funds.
Exhibit 6
(Continued)
(1,402,393)$
(3,213,827)
1,689,077
31,062
34,810
(30,557)
699,847$
(82,992)
Capital Outlays (452,112)
610,217 774,960
CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES 5,615,538$
See accompanying notes to the basic financial statements.
Governmentalfunds report the effect of bond issuance costs when debt is issued,
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. Accruedinterest is reported as an expenditurein the government-wide
Statement of Activities.
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2013
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND
Long-term accrued compensated absences do not require the use of current
financial resources and, therefore, are not reported as expenditures in
governmental funds.
Depreciation expense on capital assets is reported in the government-wide
Statementof Activitiesand Changesin Net Assets, but doesnot requirethe use of
current financialresources. Therefore,depreciationexpenseis not reported as an
expenditurein governmentalfunds. This amount includesInternal ServiceFunds'
depreciation expense of $610,217.
Principal payments of debt require the use of current financial resources and,
therefore, are reported as expenditures in governmental funds. However,
principal payments of debt do not affect net assets in the government-wide
Statement of Activities.
Only the loss on the disposal of capital assets is reported in the Statement of
Activities, whereas in the governmental funds, the proceeds from the sale
increases financial resources. Thus, the change in net position differs by the net
book value of capital assets disposed.
TO THE STATEMENT OF ACTIVITIES
-40-
Internal service funds are used by management to charge the costs of certain
activities, such as insurance and fleet management,to individualfunds. The net
revenueof the Internal Service Funds is reported with governmentalactivitiesnet
of the amount allocated to business-type activities and depreciation expense.
These amounts are as follows:
Change in net assets
business-type activities
Depreciation expense
CITY OF PADUCAH, KENTUCKY
Net of amount allocated to
Exhibit 7
Variance with
Final Budget
Positive
Original Final (Negative)
Revenues:
Taxes:
Real and personal,
current year 4,759,000$ 4,903,355$ 4,903,369$ 14$
Real and personal,
prior year 150,000 148,525 148,529 4
Franchise 125,000 199,130 199,134 4
Bank taxes 223,000 243,200 243,203 3
In lieu of tax payment 250,700 319,705 319,713 8
Penalty, interest and
advertising 52,000 34,925 34,934 9
Paducah Junior College
tax collections - 300,085 300,087 2
Total taxes 5,559,700 6,148,925 6,148,969 44
Licenses:
Business licenses 4,286,000 4,391,350 4,391,352 2
Employee earnings 13,770,000 13,813,180 13,813,180 -
Comcast fees 301,000 301,575 301,577 2
Penalties 170,000 196,335 196,329 (6)
Alcoholic beverages 125,000 135,810 135,815 5
Insurance premium tax 3,333,000 3,863,460 3,863,464 4
Building permits 120,000 134,445 134,449 4
Electrical permits 36,000 32,440 32,444 4
Zoning change fees 8,000 6,915 6,920 5
Miscellaneous building
and electrical fees 250 3,540 3,500 (40)
KJDA payroll rebate (225,000) (204,685) (204,682) 3
Total licenses 21,924,250 22,674,365 22,674,348 (17)
Charges for services:
Tax collection fee 157,000 164,525 164,528 3
Administrative charge 259,020 262,140 262,145 5
Base court revenue 61,000 56,500 56,504 4
Recreation fees 81,500 106,175 106,183 8
Total charges for services 558,520 589,340 589,360 20
(Continued)
ActualBudgeted Amounts
-41-
CITY OF PADUCAH, KENTUCKY
GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2013
Amounts
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE - BUDGET AND ACTUAL
Exhibit 7
(Continued)
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Grants:
Police State Incentive 320,000$ 325,835$ 325,840$ 5$
Fire State Incentive 283,500 260,855 260,857 2
Police supplemental grants 209,000 194,920 194,931 11
Total grants 812,500 781,610 781,628 18
Interest 108,500 144,895 144,899 4
Other:
Property rent and sales 678,120 707,235 707,280 45
Property upkeep and
maintenance 129,000 114,800 114,812 12
Contractual programs 5,000 6,460 6,460 -
E911 - GIS 26,100 26,100 26,100 -
Miscellaneous 177,465 287,745 287,793 48
Total other 1,015,685 1,142,340 1,142,445 105
Total revenues 29,979,155 31,481,475 31,481,649 174
Expenditures:
General government:
General administration:
Mayor and Commissioners 194,985 189,250 189,308 (58)
City Manager 409,335 387,570 387,548 22
City Clerk 173,585 114,740 114,604 136
Corporate Counsel 172,160 106,865 106,754 111
Non-departmental 814,810 877,055 877,051 4
Memberships and contingency 125,605 22,345 22,275 70
Civic beautification 3,800 1,655 1,651 4
Total general administration 1,894,280 1,699,480 1,699,191 289
PRDA 123,725 117,325 117,475 (150)
Finance:
Finance administration 247,010$ 240,035$ 239,962$ 73$
Accounting and payroll 328,050 321,700 321,682 18
Revenue collection 404,520 383,220 382,934 286
Total finance 979,580 944,955 944,578 377
(Continued)
-42-
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
Budgeted Amounts
GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2013
FUND BALANCE - BUDGET AND ACTUAL
CITY OF PADUCAH, KENTUCKY
Exhibit 7
(Continued)
Variance with
Final Budget
Actual Positive
General government:Original Final Amounts (Negative)
Planning:
Administration 265,365 261,515 261,490 25
Planning 88,305 89,625 89,632 (7)
Grants 144,395 137,195 136,887 308
Total planning 498,065 488,335 488,009 326
Radio and rental property 242,520 331,000 330,877 123
Human rights 47,380 41,300 41,141 159
Information systems 739,170 564,400 564,263 137
Risk management 294,925 296,040 295,951 89
Total general government 4,819,645 4,482,835 4,481,485 1,350
Public safety:
Police:
Police administration 792,550 804,400 803,940 460
Patrol 6,466,660 6,197,700 6,197,574 126
Investigations 1,899,335 2,033,870 2,034,099 (229)
Total police 9,158,545 9,035,970 9,035,613 357
Fire:
Fire administration 435,020 450,055 449,967 88
Suppression 6,070,535 6,112,440 6,112,375 65
Prevention and inspection 94,620 112,635 112,725 (90)
Training 125,990 128,215 128,137 78
Construction 389,295 338,988 338,778 210
Code enforcement 373,170 352,892 352,783 109
Total fire 7,488,630 7,495,225 7,494,765 460
Total public safety 16,647,175 16,531,195 16,530,378 817
Public service:
Public works:
Street maintenance 2,000,085 1,760,960 1,761,036 (76)
Street lighting 535,000 604,555 604,585 (30)
Landscape maintenance 1,103,270 1,080,260 1,080,062 198
Total public works 3,638,355 3,445,775 3,445,683 92
(Continued)
Budgeted Amounts
GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2013
-43-
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE - BUDGET AND ACTUAL
CITY OF PADUCAH, KENTUCKY
Exhibit 7
(Continued)
Variance with
Final Budget
Actual Positive
Public service:Original Final Amounts (Negative)
Engineering services:
Engineering services 617,470$ 507,575$ 507,459$ 116$
Flood control 530,680 565,175 564,897 278
Total engineering services 1,148,150 1,072,750 1,072,356 394
Total public service 4,786,505 4,518,525 4,518,039 486
Parks and recreation:
Parks and recreation administration 783,955 745,250 744,966 284
Grounds maintenance 1,482,320 1,428,525 1,428,330 195
Pools and recreation programs 601,155 491,105 490,868 237
Total parks and recreation 2,867,430 2,664,880 2,664,164 716
Intergovenmental and other:
Cable authority 83,600 84,250 84,250 -
Mainstreet progra m 448,320 357,015 356,774 241
Leave expense - 25,740 25,736 4
Intergovernmental expense - 300,090 300,087 3
Total intergovernmental and other 531,920 767,095 766,847 248
Total expenditures 29,652,675 28,964,530 28,960,913 3,617
Excess (deficiency) of revenues
over expenditures 326,480 2,516,945 2,520,736 3,791
Other financing sources (uses):
Operating transfers in 933,000 1,096,045 1,096,057 12
Operating transfers out (1,233,370) (2,626,685) (2,626,666) 19
Total other financing sources (uses) (300,370) (1,530,640) (1,530,609) 31
Net change in fund balance 26,110 986,305 990,127 3,822
Fund balance - beginning 11,321,438 11,321,438 11,321,438 -
Fund balance - ending 11,347,548$ 12,307,743$ 12,311,565$ 3,822$
See accompanying notes to the basic financial statements.
-44-
CITY OF PADUCAH, KENTUCKY
Budgeted Amounts
GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2013
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE - BUDGET AND ACTUAL
Exhibit 8
Variance with
Final Budget
Positive
Original Final (Negative)
Revenues:
Licenses:
Employee earnings 4,590,000 4,522,940 4,522,942 2
Total licenses 4,590,000 4,522,940 4,522,942 2
Interest 6,500 5,605 5,609 4
Total revenues 4,596,500 4,528,545 4,528,551 6
Expenditures:
General government:
Planning and development:
Economic development 1,087,700 899,690 899,687 3
Total expenditures 1,087,700 899,690 899,687 3
Excess (deficiency) of revenues
over expenditures 3,508,800 3,628,855 3,628,864 9
Other financing sources (uses):
Operating transfers in 38,170 117,080 117,083 3
Operating transfers out (3,890,470) (3,788,090) (3,788,081) 9
Total other financing sources (uses) (3,852,300) (3,671,010) (3,670,998) 12
Net change in fund balance (343,500) (42,155) (42,134) 21
Fund balance - beginning 1,692,872 2,631,233 2,631,233 -
Fund balance - ending 1,349,372$ 2,589,078$ 2,589,099$ 21$
See accompanying notes to the basic financial statements.
ActualBudgeted Amounts
-45-
Amounts
CITY OF PADUCAH, KENTUCKY
SPECIAL REVENUE INVESTMENT FUND
FOR THE YEAR ENDED JUNE 30, 2013
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE - BUDGET AND ACTUAL
Exhibit 9
Nonmajor
Solid Enterprise
Current Assets: Waste Funds Totals
Cash and cash equivalents 4,860,928$ 566,380$ 5,427,308$ 4,687,798$
Investments - - - -
Accounts receivable 491,497 - 491,497 -
Interest receivable - - - 52,201
Prepaid expenses - - - 861,783
Inventory - - - 61,012
Total current assets 5,352,425 566,380 5,918,805 5,662,794
Noncurrent Assets:
Net capital assets:
Land 62,152 - 62,152 -
Depreciable capital assets 1,003,973 166,610 1,170,583 2,916,141
Total noncurrent assets 1,066,125 166,610 1,232,735 2,916,141
Total assets 6,418,550 732,990 7,151,540 8,578,935
Current Liabilities:
Voucher and accounts payable 159,877 96,167 256,044 99,460
Accrued payroll and payroll taxes 53,220 - 53,220 16,263
Accrued compensated absences 84,665 1,617 86,282 36,750
Unearned revenue - 45,478 45,478 23,955
Due to other funds - 27,253 27,253 -
Total current liabilities 297,762 170,515 468,277 176,428
Noncurrent Liabilities:
Landfill post-closure costs 2,062,500 - 2,062,500 -
Accrued compensated absences 27,705 14,551 42,256 15,959
Total noncurrent liabilities 2,090,205 14,551 2,104,756 15,959
Total liabilities 2,387,967 185,066 2,573,033 192,387
Invested in capital assets 1,066,125 166,610 1,232,735 2,916,141
Restricted - Housing - 385,885 385,885 -
Unrestricted 2,964,458 (4,571) 2,959,887 5,470,407
TOTAL NET POSITION 4,030,583$ 547,924$ 4,578,507 8,386,548$
Reconciliation to government-wide statements of net position:
Adjustment to reflect the consolidation of Internal Service Funds'
activities related to Enterprise Funds 468,380
NET POSITION OF BUSINESS-TYPE ACTIVITIES 5,046,887$
See accompanying notes to the basic financial statements.
-46-
Business-type Activities
ASSETS
LIABILITIES
NET POSITION
Funds
Service
Internal
Governmental
Activities
CITY OF PADUCAH, KENTUCKY
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
JUNE 30, 2013
Exhibit 10
Nonmajor
Solid Enterprise
Operating Revenues: Waste Funds Totals
Charges for services - internal -$ 38,265$ 38,265$ 5,991,759$
Charges for services - external 4,362,520 - 4,362,520 275,582
Miscellaneous 9,540 2,853 12,393 -
Total operating revenues 4,372,060 41,118 4,413,178 6,267,341
Operating Expenses:
Cost of sales and service 3,635,571 2,095,184 5,730,755 5,142,279
Depreciation and amortization 331,919 15,660 347,579 610,217
Total operating expenses 3,967,490 2,110,844 6,078,334 5,752,496
Operating income (loss)404,570 (2,069,726) (1,665,156) 514,845
Nonoperating Revenues (Expenses):
Grants - program purpose 47,200 1,677,185 1,724,385 -
Interest and investment income 49,292 90 49,382 35,935
Gain (loss) on disposal of property
and equipment 86,807 (34,097) 52,710 1,849
Total nonoperating revenues (expenses)183,299 1,643,178 1,826,477 37,784
Income (loss) before contributions and
transfers 587,869 (426,548) 161,321 552,629
Contributions and Transfers:
Transfers in - 30,359 30,359 155,992
Transfers out (240,000) (275,497) (515,497) (8,774)
Total contributions and transfers (240,000) (245,138) (485,138) 147,218
Change in net position 347,869 (671,686) (323,817) 699,847
Total net position, July 1, 2012 3,682,714 1,219,610 7,686,701
TOTAL NET POSITION - JUNE 30, 2013 4,030,583$ 547,924$ 8,386,548$
Reconciliation to government-wide statements of net position:
Adjustment to reflect the consolidation of Internal Service Funds'
activities related to Enterprise Funds 82,992
CHANGE IN NET POSITION OF BUSINESS-TYPE ACTIVITIES (240,825)$
See accompanying notes to the basic financial statements.
Internal
Service
Funds
-47-
ActivitiesBusiness-type Activities
CITY OF PADUCAH, KENTUCKY
STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN NET POSITION
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2013
Governmental
Exhibit 11
Nonmajor
Solid Enterprise
Cash Flows from Operating Activities: Waste Funds Totals
Cash received from customers 4,482,014$39,300$ 4,521,314$ -$
Cash received from interfund services provided - - - 6,835,999
Payments to suppliers (2,253,104)- (2,253,104) (1,022,823)
Payments to employees (927,150) (141,890) (1,069,040) (290,335)
Claims paid - - - (3,558,712)
Payments to internal service funds (411,958) (2,290) (414,248) -
Other receipts 9,540 2,853 12,393 -
Other payments - (1,983,297) (1,983,297) (1,280,320)
Net cash provided (used) by operating activities 899,342 (2,085,324) (1,185,982) 683,809
Cash Flows from Noncapital Financing Activities:
Grants - program purpose 47,200 1,722,663 1,769,863 -
Transfers from other funds - 30,359 30,359 155,992
Transfers to other funds (240,000) (275,497) (515,497) (8,774)
Net cash provided (used) by noncapital
financing activities (192,800) 1,477,525 1,284,725 147,218
Cash Flows from Capital and Related
Financing Activities:
Purchase of capital assets (305,837) - (305,837) (452,112)
Proceeds from sale of capital assets 86,807 - 86,807 21,408
Net cash provided (used) by capital and
related financing activities (219,030) - (219,030) (430,704)
C h Fl f I ti A ti iti
CITY OF PADUCAH, KENTUCKY
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2013
Governmental
Activities
Internal
Service
Business-type Activities
Funds
Cash Flows from Investing Activities:
Proceeds from sale of investment securities 900,000 - 900,000 550,000
Interest on cash and investments 57,381 90 57,471 35,935
Net cash provided (used) by investing
activities 957,381 90 957,471 585,935
Net increase (decrease) in cash and cash
equivalents 1,444,893 (607,709) 837,184 986,258
Cash and cash equivalents, July 1, 2012 3,416,035 1,174,089 4,590,124 3,701,540
CASH AND CASH EQUIVALENTS,
JUNE 30, 2013 4,860,928$566,380$ 5,427,308$ 4,687,798$
Reconciliation of Operating Income (Loss) to Net
Cash Provided by Operating Activities:
Operating income (loss) 451,770$ (2,069,726)$(1,617,956)$ 514,845$
Adjustments to reconcile operating income to
net cash provided by operating activities:
Depreciation and amortization 331,919 15,660 347,579 610,217
Change in assets and liabilities:
Receivables 153,194 1,035 154,229 33,892
Prepaid expenses - - - (861,783)
Inventories - - - 15,877
Unearned revenues (33,700) (45,478) (79,178) -
Due to other funds - - - 510,810
Account and accrued payables 43,359 13,185 56,544 (140,049)
NET CASH PROVIDED (USED) BY OPERATING
ACTIVITIES 946,542$ (2,085,324)$ (1,138,782)$ 683,809$
See accompanying notes to the basic financial statements.
-48-
Exhibit 12
Private-
Pension purpose Agency
Funds Trusts Funds
Cash and cash equivalents 76,929$ 3,965$ 532,049$
Receivables:
Interest 28,684 - -
Investments at fair value
Money market funds 139,107 3,925 -
Common stock 2,599,294 - -
Corporate bonds 992,120 - -
U.S. agencies bonds 989,387 - -
Mortgage backed securities - - -
Mutual funds 2,395,903 1,090,393 -
Total assets 7,221,424 1,098,283 532,049
Voucher and accounts payable 156 - -
Payroll taxes and withholdings
payable - - 532,049
Total liabilities 156 - 532,049
Held in trust for pension benefits
and other purposes 7,221,268$ 1,098,283$
See accompanying notes to the basic financial statements
NET POSITION
Primary Government
-49-
ASSETS
LIABILITIES
CITY OF PADUCAH, KENTUCKY
STATEMENT OF NET POSITION
FIDUCIARY FUNDS
JUNE 30, 2013
Exhibit 13
Private-
Pension purpose
Additions: Funds Trusts
Contributions:
Employer 476,951$ -$
Plan members 5,537 -
Intergovernmental revenues - 255
Total contributions 482,488 6,010
Investment income:
Net increase (decrease) in
fair value of investments 448,722 69,611
Interest and dividends 220,914 69,902
Net investment income 669,636 139,513
Total additions 1,152,124 145,523
Deductions:
Benefits 1,549,841 -
Capital outlay - 136,135
Administrative expenses 55,320 17,170
Total deductions 1,605,161 153,305
Change in net position (453,037) (7,782)
Net position - beginning 7,674,304 1,106,065
Net position - ending 7,221,267$ 1,098,283$
See accompanying notes to the basic financial statements.
-50-
STATEMENT OF CHANGES IN NET POSITION
CITY OF PADUCAH, KENTUCKY
FIDUCIARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2013
CITY OF PADUCAH, KENTUCKY
NOTES TO THE FINANCIAL STATEMENTS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2013
- 51 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
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. The pension fund is reported as a fiduciary fund and does not issue separate financial statements.
Discretely Presented Component Units
The component unit column in the basic financial statements includes the financial data of the City’s other
component unit. It is reported in a separate column to emphasize that it is legally separate from the City.
The following component unit is included in the reporting entity because of its financial relationship with
the City; and, the City is able to impose its will on the organization.
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.
Complete financial statements of the individual component unit can be obtained from its respective
administrative office at the following location:
Paducah Water Works
1801 N. 8th Street
Paducah, Kentucky 42003
(Continued)
- 52 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
Note 1 - Summary of Significant Accounting Policies:
Related Organizations
City officials are also responsible for appointing the members of boards of other organizations; but, the
City’s accountability for these organizations do not extend beyond appointing authority. The
organizations listed below are notable related organizations which have not been included as component
units in the City’s report.
Transit Authority of the City of Paducah – The Transit Authority is a legally separate entity that
provides for transit operations both within and outside the City. The Transit Authority is not financially
accountable to the City.
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.
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.
Joint Sewer Agency – As of July 1, 1999, the assets and liabilities of the Wastewater/Stormwater Fund
were transferred to the Paducah-McCracken County Joint Sewer Agency pursuant to a municipal order
dated June 29, 1999. The Paducah-McCracken County Joint Sewer Agency is a legally separate entity
and is not financially accountable to the City.
Forest Hills Village, Inc. – The Corporation’s purpose is to manage City of Paducah properties known
as “Forest Hills Housing Development”. The City and Corporation have a lease agreement detailing
the terms and conditions of operations. Forest Hills Village, Inc. is a legally separate entity and is not
financially accountable to the City.
Paducah Junior College, Incorporated (PJC) – The College is a part of the University of Kentucky
Community College System which is now administered by the Kentucky Community and Technical
College System. Under this system, the University of Kentucky receives the monies from student
tuition, fees and other related income and provides the financing for the operational budget of the
College. A tax levied and collected by the City is a primary revenue source for the College. These
funds, as well as gifts and grants made to the College, may be used for the acquisition or improvement
of property or to finance programs beyond the level of those normally provided by community colleges
in the University of Kentucky system. PJC is a legally separate entity and is not financially
accountable to the City.
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.
(Continued)
- 53 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
Note 1 - Summary of Significant Account Policies:
Basis of Presentation
Government-wide Financial Statements
The Statement of Net Position 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, deferred outflows of resources, liabilities, deferred inflows of resources,
fund equity, revenues, and expenditure or 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)
- 54 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
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 Position and the Statement of Activities, both governmental
and business-like activities are presented using the economic resources measurement focus as defined in
item b. below.
In the fund financial statements, the “current financial resources” measurement focus or the “economic
resources” measurement focus is used as appropriate:
a. All governmental funds utilize a “current financial resources” measurement focus. Only current
financial assets and liabilities are generally included on their balance sheets. (The City’s deferred
outflows of resources and deferred inflows of resources are noncurrent) 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 position (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 position.
c. Agency funds are not involved in the measurement of results of operations; therefore, measurement
focus is not applicable to them.
Basis of Accounting
In the government-wide Statement of Net Position 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.
In the fund financial statements, governmental funds are presented on the modified accrual basis of
accounting. Under this modified accrual basis of accounting, revenues are recognized when “measurable
and available.” Measurable means knowing or being able to reasonably estimate the amount. Available
(Continued)
- 55 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
Note 1 - Summary of Significant Account Policies:
Basis of Accounting
means collectible within the current period or within sixty days after year end. Expenditures (including
capital outlay) are recorded when the related fund liability is incurred, except for general obligation bond
principal and interest which are reported when due. Agency funds are presented using the accrual basis of
accounting.
All proprietary, 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.
Available means that the resources will be collected within the current fiscal year or are expected to be
collected soon enough thereafter to be used to pay liabilities of the current fiscal year. For the City,
available means expected to be received within sixty days of year end.
Non-exchange transactions, in which the City receives value without directly giving equal value in return,
include employee license taxes, property taxes, grants, entitlements, and donations. The City considers
property taxes as available if they are collected within sixty days after year end. Revenue from grants,
entitlements, and donations is recognized in the year in which all eligibility requirements have been
satisfied. Eligibility requirements include timing requirements, which specify the year when the resources
are required to be used or the year when use is first permitted, matching requirements, in which the City
must provide local resources to be used for a specified purpose, and expenditure requirements, in which
the resources are provided to the City on a reimbursement basis. On a modified accrual basis, revenue
from non-exchange transactions must also be available before it can be recognized.
The revenues susceptible to accrual are taxes, intergovernmental, employer and employees’ contributions
to trust funds, interest revenue, and charges for services. Permit revenues are not susceptible to accrual
because generally they are not measurable until received in cash.
Unearned revenue
The City reports unearned revenue on its government-wide statement of net position and the fund financial
statements. Unearned revenues arise when potential revenue does not meet both the "measurable” and
“available” criteria for recognition in the current period. Unearned revenues also arise when resources are
received by the City before it has a legal claim to them, as when grant monies are received prior to the
incurrence of qualifying expenditures. In subsequent periods, when both revenue recognition criteria are
met, or when the City has a legal claim to the resources, the liability for unearned revenue is removed 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.
(Continued)
- 56 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
Note 1 - Summary of Significant Accounting Policies:
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:
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, 2013.
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 Position, “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.
(Continued)
- 57 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
Note 1 - Summary of Significant Accounting Policies:
Receivables
In the government-wide statements, receivables consist of all revenues earned at year end and not yet
received. Major receivable balances for the governmental activities include property taxes, employee
earnings taxes, business licenses, insurance premiums taxes, franchise taxes, grant revenue, and interlocal
note receivables. Business-type activities report utilities and interest earnings as their major receivables.
Interlocal note receivables include an outstanding loan of $911,375 at the end of the fiscal year due from
the Greater Paducah Economic Development Council, Inc. related to development and construction of an
intermodal industrial park. The note is non-interest bearing, secured by real property within the industrial
park, and due in full by June 30, 2015. The City expects full collection of the receivable.
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.
Interfund Receivables and Payables
During the course of operations, numerous transactions occur between individual funds that may result in
amounts owed between funds. Those related to goods and services type transactions are classified as “due
to and from other funds.” Short-term interfund loans are reported as “interfund receivables and payables.”
Long-term interfund loans (noncurrent portion) are reported as “advances from and to other funds.”
Interfund receivables and payables between funds within governmental activities are eliminated in the
Statement of Net Position. 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
$61,012 held for consumption and real property of $1,336,235 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.
(Continued)
- 58 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
Note 1 - Summary of Significant Accounting Policies:
Capital Assets
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.
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 10-15 Years
Buildings 30 Years
Building improvements 10-15 Years
Infrastructure 15-30 Years
Equipment 7-9 Years
Furnishings and fixtures 3-5 Years
Vehicles 5-7 Years
Fund Financial Statements
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.
Deferred Inflows of Resources
In addition to liabilities, the statement of financial position will sometimes report a separate section for
deferred inflows of resources. This separate financial statement element, deferred inflows of resources,
represents an acquisition of net position that applies to a future period(s) and so will not be recognized as
an inflow of resources (revenue) until that time. The government has only one type of item, which arises
only under a modified accrual basis of account, which qualifies for reporting in the category. Accordingly,
the item, unavailable revenue, is reported only in the governmental funds balance sheet. The governmental
funds report unavailable revenues for one source: property taxes. This amount is deferred and recognized
as an inflow of resources in the period that the amount becomes available.
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.
(Continued)
- 59 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
Note 1 - Summary of Significant Accounting Policies:
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 Employees’
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.
Equity Classifications
Government-wide Statements
Equity is classified as net position 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 position – 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 position – All other net assets that do not meet the definition of “restricted” or
“invested in capital assets, net of related debt.”
(Continued)
- 60 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
Note 1 - Summary of Significant Accounting Policies:
Equity Classifications
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, as stated in the Finance
Department Accounting Policy (FIN-20). 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.
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.
(Continued)
- 61 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
Note 1 - Summary of Significant Accounting Policies:
Operating and Non-Operating Revenues and Expenses – Proprietary Funds
Operating revenues and expenses for proprietary funds are those that result from providing services and
producing and delivering goods and/or services. It also includes all revenue and expenses not related to
capital and related financing, noncapital financing, or investing activities. Operating expenses for the
enterprise and internal service funds include the cost of sales and services, administrative expenses, and
depreciation on capital assets. All revenues and expenses not meeting this definition are reported as
nonoperating revenues and expenses.
Expenditures/Expenses
In the government-wide financial statements, expenses are classified by function for both governmental
and business-type activities.
In the fund financial statements, expenditures are classified as follows:
Governmental Funds – by character: Current (further classified by function)
Debt Service
Capital Outlay
Proprietary Fund – by operating and nonoperating
In the fund financial statements, governmental funds report expenditures of financial resources.
Proprietary funds report expenses relating to use of economic resources.
Interfund Transfers
Permanent reallocation of resources between funds of the reporting entity are classified as interfund
transfers. For the purposes of the Statement of Activities, all interfund transfers between individual
governmental funds have been eliminated.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles
requires management to make assumptions that affect reported amounts and disclosures. Accordingly,
actual results could differ from those estimates.
Stewardship, Compliance, and Accountability
By its nature as a local government unit, the City and its component units are subject to various federal,
state, and local laws and contractual regulations. An analysis of the City’s compliance with significant
laws and regulations and demonstration of its stewardship over City resources follows.
Fund Accounting Requirements
The City complies with all state and local laws and regulations requiring the use of separate funds.
(Continued)
- 62 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
Note 1 - Summary of Significant Accounting Policies:
Stewardship, Compliance, and Accountability
Revenue Restrictions
The City has various restrictions placed over certain revenue sources from state or local requirements or
contractual agreements. The primary restricted revenue sources include:
Revenue Source Legal Restrictions of Use
Section Eight Housing Choice Voucher Program Subsidize Rental Costs for Low-
Income Families
FEMA - Disaster Grants Debris Removal and Disaster Recovery
American Recovery & Reinvestment Act Grants Job creation and retention
HOME Investment Partnerships Grant Construction of Low-income
Rental Units
Emergency Communication Revenue E-911 Emergency Services
County Bed Tax Debt Obligations
Homeland Security Grant Program Homeland Security Enhancement
Kentucky Housing Corporation Façade Loans
Other Grants Grant Program Expenditures
Bond Proceeds Defeasance of debt and Capital Projects
25% of Employee Earning Tax Economic, Community and
Capital Development
Revenue Restrictions
For the year ended June 30, 2013, 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.
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)
- 63 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
Note 2 - Property Taxes:
The due dates and collection period for all property taxes, exclusive of vehicle taxes, for the fiscal year
ended June 30, 2013, are as follows:
Description Date
Assessment and enforceable lien January 1, 2012
Levy September 25, 2012
Face value amount payment dates 1st half by November 1, 2012
2nd half by February 1, 2013
Delinquent date - 10% penalty
plus 1/2% per month 1st half - November 30, 2012
2nd half - February 28, 2013
Note 3 - Detail Notes on Transaction Classes/Accounts:
The following notes present detail information to support the amounts reported in the basic financial
statements for its various assets, liabilities, equity, revenues, and expenditures/expenses.
Deposits
Custodial credit risk for deposits is the risk that in the event of a bank failure, the City's deposits may not
be returned 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 101% 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 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, 2013, 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 were $25,569,719 and
$26,787,656, respectively.
(Continued)
- 64 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
Note 3 - Detail Notes on Transaction Classes/Accounts:
Investments
As of June 30, 2013, the City's reporting entity had the following investments:
Fair Value/ Average Investment Maturities (In Years) (2)
Carrying Credit Quality/ Less Greater
Types of Investments Amount Rating (1) Than 1 1-5 6-10 Than 10
Fiduciary and Private
Purpose Trust Funds
Money market funds $ 143,032 NA NA NA NA NA
Common stock 2,559,294 NA NA NA NA NA
Corporate bonds 992,120 AA+/A- $ 50,269 $ 941,851 $ - $ -
U.S. agencies 989,387 Aaa/A 636,982 259,016 93,389 -
Mutual funds
Equity 3,486,296 NA NA NA NA NA
TOTAL FIDUCIARY AND
PRIVATE PURPOSE
TRUST FUNDS $8,210,129
(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.
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)
- 65 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
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:
PFPF Retirement Plan
Minimum Target Maximum
Equities 45% 55% 65%
Fixed income 35% 45% 55%
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 any one issuer with the exception of U.S.
government. Policy further prohibits investment of more than 20% in any one 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 A1, P1.
(Continued)
- 66 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
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, 2013, was as follows:
Balance Balance
Primary Government: July 1, 2012 Additions Deductions June 30, 2013
Capital assets, not being depreciated:
Land $11,107,875 $ 210,000 $ 941,443 $10,376,432
Construction-in-progress 3,797,562 3,638,928 908,624 6,527,866
Total capital assets, not being
depreciated 14,905,437 3,848,928 1,850,067 16,904,298
Capital assets, being depreciated:
Land improvements 3,421,914 718,754 - 4,140,668
Buildings and improvements 17,257,912 2,809,682 675,000 19,392,594
Infrastructure 38,698,324 15,951 - 38,714,275
Equipment 9,761,738 803,927 3,000 10,562,665
Furnishings and fixtures 207,830 - - 207,830
Vehicles 8,209,120 444,112 416,552 8,236,680
Totals at historical cost 77,556,838 4,792,426 1,094,552 81,254,712
Less accumulated depreciation:
Land improvements 1,519,387 111,933 - 1,631,320
Buildings and improvements 12,347,400 390,647 213,750 12,524,297
Infrastructure 25,349,247 1,459,511 - 26,808,758
Equipment 7,973,538 1,123,863 3,000 9,094,401
Furnishings and fixtures 206,308 257 - 206,565
Vehicles 5,326,315 580,406 396,995 5,509,726
Total accumulated depreciation 52,722,195 3,666,617 613,745 55,775,067
Total capital assets, being
depreciated, net 24,834,643 1,125,809 480,807 25,479,645
PRIMARY GOVERNMENT
ACTIVITIES CAPITAL
ASSETS, NET $39,740,080 $ 4,974,737 $2,330,874 $42,383,943
(Continued)
- 67 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
Note 3 - Detail Notes on Transaction Classes/Accounts:
Capital Assets
During the year ended June 30, 2013, the City converted a direct financing lease to an operating lease (See
Note 9). The capital lease receivable was removed and the related lease building and land was recorded at
original cost. Accordingly, governmental capital asset activities reflect building and land additions of
$2,549,012 and $210,000, respectively. The conversion resulted in an economic gain of $825,461.
During the year ended June 30, 2013, TISA business type operations ceased and the remaining assets were
transferred to governmental activities. Accordingly, governmental capital asset activities reflect equipment and
related accumulated depreciation additions of $486,886 and $452,789 respectively.
Balance Balance
Business-type Activities: July 1, 2012 Increases Decreases June 30, 2013
Capital assets, not being depreciated:
Land $ 62,152 $ - $ - $ 62,152
Construction-in-progress - - - -
Total capital assets, not being
depreciated 62,152 - - 62,152
Capital assets, being depreciated:
Buildings and improvements 554,827 - - 554,827
Equipment 1,571,867 115,116 507,635 1,179,348
Vehicles 2,575,540 190,721 374,780 2,391,481
Totals at historical cost 4,702,234 305,837 882,415 4,125,656
Less accumulated depreciation:
Buildings and improvements 238,766 16,724 - 255,490
Equipment 1,240,678 126,667 473,538 893,807
Vehicles 1,976,368 204,188 374,780 1,805,776
Total accumulated depreciation 3,455,812 347,579 848,318 2,955,073
Total capital assets, being
depreciated, net 1,246,422 (41,742) 34,097 1,170,583
BUSINESS-TYPE ACTIVITIES
CAPITAL ASSETS, NET $ 1,308,574 $ (41,742) $ 34,097 $ 1,232,735
(Continued)
- 68 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
Note 3 - Detail Notes on Transaction Classes/Accounts:
Capital Assets
Depreciation expense was charged to governmental activities as follows:
General government:
General administration $ 331,535
Finance 36,805
Planning 23,228
Inspections -
Personnel -
Information systems 22,626
Fleet maintenance 10,725
Total general government 424,919
Public safety:
Police 238,345
Fire 65,449
Grants -
Emergency 911 24,596
Court awards 4,389
Fleet Lease Trust 599,493
Total public safety 932,272
Public service:
Public works 54,862
Engineering 46,512
Total public service 101,374
Parks and recreation 179,076
Planning and development:
Infrastructure 1,574,315
Grants 1,871
Total planning and development 1,576,186
TOTAL DEPRECIATION EXPENSE –
GOVERNMENTAL ACTIVITIES $3,213,827
Depreciation expense was charged to business-type activities as follows:
Solid Waste Fund $ 331,919
Section Eight Housing 5,639
Civic Center 10,021
TISA Fund -
TOTAL DEPRECIATION EXPENSE –
BUSINESS-TYPE ACTIVITIES $ 347,579
(Continued)
- 69 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
Note 3 - Detail Notes on Transaction Classes/Accounts:
Capital Assets
Balance Balance
Discretely Presented July 1, 2012 Increases Decreases June 30, 2013
Component Units:
Capital assets, not being depreciated:
Land $ 2,316,981 $ - $ 223,205 $ 2,093,776
Total capital assets, not being
depreciated 2,316,981 - 223,205 2,093,776
Capital assets, being depreciated:
Utility plant 72,478,176 7,998,812 153,023 72,478,176
Total capital assets, being
depreciated 72,478,176 7,998,812 153,023 72,478,176
Less accumulated depreciation:
Utility plant 29,783,431 3,772,793 60,995 33,495,229
Total accumulated depreciation 29,783,431 3,772,793 60,995 33,495,229
Total capital assets, being
depreciated, net 42,694,745 4,226,019 92,028 46,828,736
COMPONENT UNIT
CAPITAL ASSETS, NET $45,011,726 $4,226,019 $ 315,233 $48,922,512
Increases in capital assets include $3,731,595 in utility plant assets received from Hendron Water District
as part of the merger on August 1, 2012. These assets had accumulated depreciation of $2,044,869.
Depreciation expense, charged to functions/programs of discretely presented major component units as
follows:
Paducah Water Works $ 1,727,924
TOTAL DEPRECIATION EXPENSE BY ACTIVITY $ 1,727,924
Accounts Payable
Payables in the governmental and proprietary funds are composed of payables to vendors and accrued
salaries and benefits.
(Continued)
- 70 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
Note 3 - Detail Notes on Transaction Classes/Accounts:
Short-Term Liabilities
On October 16, 2012, the City entered into an agreement with Banterra Bank for a fixed rate line of credit
not to exceed $900,000 for construction of new residential homes for the Fountain Avenue Neighborhood
Program. Short-term debt activity for the year ended June 30, 2013, was as follows:
Beginning Ending
Governmental Activities Balance Additions Payments Balance
Home Grant Fund Line of Credit $ - $ 308,112 $ - $ 308,112
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, 2013, the governmental long-term liabilities consisted of the following:
General obligation bonds:
Current portion $ 1,328,726
Noncurrent portion 21,033,180
TOTAL GENERAL OBLIGATION
BOND COSTS $22,361,906
Note payable:
Current portion $ 353,916
Noncurrent portion 6,566,922
TOTAL NOTE PAYABLE PAYMENTS $ 6,920,838
Accrued compensated absences:
Current portion $ 1,034,389
Noncurrent portion 984,424
TOTAL ACCRUED COMPENSATED
ABSENCES $ 2,018,813
Business-type Activities
As of June 30, 2013, the long-term liabilities payable from proprietary fund resources consisted of the
following:
Accrued compensated absences:
Current portion $ 86,281
Noncurrent portion 42,256
TOTAL ACCRUED COMPENSATED
ABSENCES $ 128,537
(Continued)
- 71 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
Note 3 - Detail Notes on Transaction Classes/Accounts:
Long-Term Liabilities
General Obligation Bonds
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 of approximately 3.13%. 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 by 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.
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 Position. In accordance with an Interlocal Cooperation Agreement
between the City, McCracken County, Kentucky (the County), and the Paducah-McCracken County
Tourist and Convention Commission (the Bureau), principal and interest payments on the bonds are being
made from an additional 2% transient room tax collected by the County with the remaining payments split
evenly between the City, the County, and the Bureau.
Series 2011 Bond Issue – The City of Paducah issued general obligation taxable refunding bonds of
$3,910,000 in August 2011 with an interest rate of 3.68%, to refund $3,780,000 of outstanding 2004 series
bonds with interest rates ranging from 2.25% to 6%. These bonds are required to be fully paid within 13
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 and used to call $3,780,000 of outstanding 2004 series
bonds. In the Statement of Net Position, the net costs associated with the early retirement of the issues are
deferred and amortized over the remaining life of the defeased debt. The amount deferred is reported as a
decrease to the book value of the new debt issued to finance the refunding. Total deferred costs were
$66,065. Amortization for the year was $8,833 and is included as a component of interest expense.
The City advance refunded the 2004 series bonds to reduce its total debt service payments over the next 13
years by $591,765 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 $540,961.
(Continued)
- 72 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
Note 3 - Detail Notes on Transaction Classes/Accounts:
Long-Term Liabilities
General Obligation Bonds
Series 2011 Bond Issue – 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 and has guaranteed 50% of the principal amount of the bonds. This note
receivable is reflected in the government-wide Statement of Net Position. In accordance with an Interlocal
Cooperation Agreement between the City and McCracken County, Kentucky (the County), principal and
interest payments on the bonds are being made from an operating lease with Infiniti Plastic Technologies,
Inc. collected by the City. The rental revenues collected from the lease with Infiniti Plastic Technologies,
Inc. during the current year were sufficient to cover the entire bond and interest payments due. The
County will not be required to make any payments unless Infiniti Plastic Technologies, Inc. defaults on
lease payments (See Note 9 – Operating Leases).
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.
Margaret Hank Cumberland Presbyterian Church Agreement – On June 16, 2011, the City entered into an
agreement in the amount of $188,533 with Margaret Hank Cumberland Presbyterian Church to finance the
acquisition of real property to be used for the development of an indoor recreational facility. The note
matures on July 1, 2019 and has an imputed interest rate of 3.25%.
Murray State University Paducah Agreement – On November 22, 2011, the City entered into a general
obligation note in the amount of $2,674,093 with McCracken County to finance the construction of an
educational facility to be occupied by Murray State University. The note matures on December 1, 2031
and has interest rates ranging from 1.0% to 3.5%.
(Continued)
- 73 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
Note 3 - Detail Notes on Transaction Classes/Accounts:
Long-Term Liabilities
Changes in Long-Term Liabilities
The following is a summary of changes in long-term debt for the year ended June 30, 2013:
Deferred Amounts
Beginning Cost Ending Due within
Type of Liability: Balance Additions Reductions Amortization Balance One Year
Governmental activities:
General obligation bonds:
Pension $ 4,895,000 $ - $ 240,000 $ - $ 4,655,000 $ 255,000
Floodwall Rehabilitation 2,455,210 - 113,420 - 2,341,790 116,926
Build America Bonds 6,100,000 - 275,000 - 5,825,000 280,000
Refinanced Convention Center 6,630,000 - 410,000 - 6,220,000 415,000
Refinanced Infiniti Media
Building 3,571,283 - 251,167 - 3,320,116 261,800
Notes payable:
Kentucky League of Cities 2,193,730 - 169,436 - 2,024,294 150,319
Kentucky Association of
Counties 2,276,250 - 95,000 - 2,181,250 91,875
Margaret Hank Agreement 176,255 - 24,443 - 151,812 -
Murray State University
Agreement 2,674,093 - 110,611 - 2,563,482 111,722
Accrued compensated absences 2,028,218 1,230,763 1,240,168 - 2,018,813 1,034,389
TOTAL GENERAL LONG-
TERM LIABILITIES $33,000,039 $ 1,230,763 $ 2,929,245 $ $31,301,557 $2,717,031
Business-type activities:
Accrued compensated
Absences $ 106,737 $ 102,800 $ 80,999 $ - $ 128,538 $ 86,282
(1) The calculation to reconcile amounts in this schedule to the "net position invested in capital assets, net
of related debt" for governmental activities is:
Net Capital Assets $42,383,943
Less:
19.75% of the outstanding 2010B
general obligation bonds $ (1,228,450)
100% of the outstanding 2011
General obligation bonds (3,370,000)
Net of the County's portion 2,299,225
(2,299,225)
78% of the outstanding 2010
general obligation bonds (4,543,500)
100% of the Margaret Hank Agreement (151,812)
100% of the outstanding Kentucky League
of Cities' note payable (2,024,294)
Net position invested in capital assets, net of related debt $33,365,112 (Continued)
- 74 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
Note 3 - Detail Notes on Transaction Classes/Accounts:
Long-Term 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, 2013, are as follows:
Federal
Year Ending Interest
June 30 Principal Interest Subsidy
2014 $ 1,706,908 $ 1,009,656 $ (91,759)
2015 1,760,426 966,079 (89,554)
2016 1,836,797 925,703 (86,614)
2017 1,899,140 865,998 (83,315)
2018 1,957,239 806,921 (79,443)
2019-2023 10,831,370 3,000,730 (327,258)
2024-2028 7,530,458 1,135,600 (185,592)
2029-2032 1,760,406 122,382 (24,649)
TOTALS $29,282,744 $ 8,833,069 $ (968,184)
Accrued Compensated Absences
Compensated absence obligations arise from amounts due to City employees for vested amounts of
vacation pay and sick pay which will be payable in the future. 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, 2013, are as
follows:
Accrued Compensated Absences
Governmental Business-type
Activities Activities
Accrued sick leave $ 732,649 $ 47,152
Accrued vacation leave 1,286,164 81,386
Totals 2,018,813 128,538
Less current portion 1,034,389 86,282
LONG-TERM PORTION $ 984,424 $ 42,256
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. No termination benefits were paid for the year ended June 30, 2013.
(Continued)
- 75 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
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, 2013, no payments 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 will
begin upon approval from the Commonwealth of Kentucky regarding the environmental condition of the
landfill site. As of June 30, 2013, 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, 2013, were as follows:
Interfund Interfund
Governmental Funds: Transfers In Transfers Out
General Fund $1,096,057 $2,626,666
Capital Project Fund 2,692,394 222,474
Special Revenue Investment Fund 117,083 3,788,081
Special Revenue Bond Fund - -
Debt Service Fund 1,996,093 -
Nonmajor Governmental Funds 1,561,317 487,803
Internal Service Funds 155,992 8,774
Proprietary Funds:
Solid Waste - 240,000
Nonmajor Proprietary Funds 30,359 275,497
TOTALS $7,649,295 $7,649,295
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)
- 76 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
Note 3 - Detail Notes on Transaction Classes/Accounts:
Due To/From Balances
Due to/from balances used to cover current operating expenses were as follows as of June 30, 2013:
Due From Due To
General Fund $ 262,626 $1,105,491
Special Revenue Investment Fund 1,105,491 -
Nonmajor Governmental Funds - 235,373
Nonmajor Proprietary Funds - 27,253
Internal Service Funds - -
TOTALS $1,368,117 $1,368,117
Note 4 - Pension Plans - City of Paducah:
The City provides retirement benefits to its employees through three pension funds. Two of these funds
are single-employer defined benefit funds and are administered by the City. These funds are Police and
Firefighters’ Pension Fund (PFPF) and Appointive Employee’ Pension Fund (AEPF). The other pension is
a multi-employer public employee retirement fund administered by the Kentucky County Employees
Retirement System (CERS). The City also participates in 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)
- 77 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
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, 2013, the schedule of funding progress
was as follows:
Actuarial Actuarial Unfunded Annual UAAL as a
Value of Accrued AAL Funded Covered Percentage of
Assets Liability (AAL) (UAAL) Ratio Payroll Covered
(a) (b) (b-a) (a/b) (c) ((b-a)/c)
$7,145,361 $11,296,982 $4,151,621 63.3 $69,211 5,998.50%
A schedule of the funded status and funding progress for the previous six years can be found on page
86, 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 30, 2013 June 30, 2012 June 30, 2011
Beginning NPO balance $(5,428,344) $ (5,457,076) $ (5,511,936)
ARC 462,154 361,701 455,139
Interest on NPO (434,268) (436,566) (440,955)
Unfunded ARC adjustment 493,328 495,341 492,104
Pension cost 521,214 420,476 506,288
Less actual contribution 476,951 391,744 451,428
Net change in NPO 44,263 28,732 54,860
ENDING NPO BALANCE $ (5,384,081) $ (5,428,344) $ (5,457,076)
PERCENTAGE OF PENSION
COST CONTRIBUTED 92% 93% 89%
(Continued)
- 78 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
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:
Statement of Fiduciary Net Position
Police and Firefighters’ Retirement Fund
June 30, 2013
Assets:
Cash and cash equivalents $ 1,018
Receivables 28,684
Investment at fair value 7,115,811
Total assets 7,145,513
Liabilities:
Voucher and accounts payable 151
Net Position:
Held in trust for pension benefits and
other purposes $ 7,145,362
Statement of Changes in Net Position
Police and Firefighters’ Retirement Fund
For the Year Ended June 30, 2013
Additions:
Employer contributions $ 476,951
Plan members’ contributions 5,537
Total contributions 482,488
Investment earnings:
Net change in fair value of investments 448,772
Interest and dividends 219,875
Net investment earnings 668,597
Total additions 1,151,085
Deductions:
Benefits 1,524,801
Administrative expenses 48,244
Total deductions 1,573,045
Change in net position (421,960)
Net position, July 1, 2012 7,567,321
NET POSITION, JUNE 30, 2013 $ 7,145,361
(Continued)
- 79 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
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, 2013. 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, 2012, the schedule of funding progress
was as follows:
Actuarial Unfunded Annual UAAL as a
Value of Accrued AAL Funded Covered Percentage of
Assets Liability (AAL) (UAAL) Ratio Payroll Covered
(a) (b) (b-a) (a/b) (c) ((b-a)/c)
$ 75,905 $148,208 $ 72,303 51.2 n/a* n/a*
A schedule of the funded status and funding progress for the previous six years can be found on page
86, 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 30, 2013 June 30, 2012 June 30, 2011
Beginning NPO balance $(158,008) $(177,856) $(194,904)
ARC 12,217 7,722 3,760
Interest on NPO (9,480) (10,671) (11,694)
Unfunded ARC adjustment 20,253 22,797 24,982
Pension cost 22,990 19,848 17,048
Less actual contribution - - -
Net change in NPO 20,990 19,848 17,048
ENDING NPO BALANCE $(135,018) $(158,008) $(177,856)
PERCENTAGE OF PENSION
COST CONTRIBUTED 0% 0% 0%
(Continued)
- 80 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
Note 4 - Pension Plans - City of Paducah:
Appointive Employees' Pension Fund
The financial statements for the Appointive Employees' Pension Fund are as follows:
Statement of Fiduciary Net Position
Appointive Employees’ Pension Fund
June 30, 2013
Assets:
Cash and cash equivalents $ 75,911
Receivables -
Investment at fair value -
Total assets 75,911
Liabilities:
Voucher and accounts payable 5
Net Position:
Held in trust for pension benefits and
other purposes $ 75,906
Statement of Changes in Net Position
Appointive Employees’ Pension Fund
For the Year Ended June 30, 2013
Additions:
Interest and dividends $ 1,039
Employer contributions -
Total additions 1,039
Deductions:
Benefits 25,040
Administrative expenses 7,076
Total deductions 32,116
Change in net position (31,077)
Net position, July 1, 2012 106,983
NET POSITION, JUNE 30, 2013 $ 75,906
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, 2013, the date of the latest actuarial valuation is as
follows:
(Continued)
- 81 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
Note 4 - Pension Plans - City of Paducah:
Single Employer Defined Benefit Funds (Police and Firefighters' Pension Fund and Appointive
Employees Pension Fund)
Contribution Information
PFPF AEPF
Valuation date 7/1/13 7/1/13
Actuarial cost method Entry age normal Aggregate (1)
Amortization method Level dollar closed Level dollar closed
Remaining amortization period 20 Years 10 Years
Asset valuation method Market value Market value
Actuarial assumptions:
Investment rate of return 7.75% 6.0%
Projected salary increases 4.00% (2)
Inflation rates adjustments 3.00% (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, 2013:
PFPF AEPF
Active participants 1 0
Beneficiaries 35 3
Retired participants 29 1
TOTAL PARTICIPANTS 65 4
Cost-Sharing Multiple-Employer Defined Benefit Plan
County Employees’ Retirement System
Plan Description: The City is a participant in the County Employees Retirement System (CERS), a
cost sharing, multi-employer public employee retirement system. CERS provides retirement, disability,
and death benefits to plan members. Retirement benefits may be extended to beneficiaries of plan
members under certain circumstances. Cost-of-living adjustments are provided at the discretion of the
State legislature. 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. (Continued)
- 82 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
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, 2013, 2012, and
2011, the City contributed 37.60%, 35.76%, and 33.25%, respectively, of each hazardous employee’s
creditable compensation and 19.55%, 18.96%, and 16.93%, respectively, of each nonhazardous
employee’s creditable compensation. These actuarially determined rates are set by the Board of
Trustees of Kentucky Retirement Systems. Total contributions to CERS for the years ending June 30,
2013, 2012, and 2011, were $5,517,201, $5,114,775, and $4,885,288, of which $4,471,077, $4,144,624
and $3,882,925 were made by the employer and $1,046,124, $970,151 and $1,002,363 were made by
employees, 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, 2013.
Note 6 - Component Unit Long-Term Liabilities:
Long-term liabilities of the discretely presented component units consist of the following at June 30, 2013:
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 rate is 1.00%, with a .25% annual service fee. The annual requirements to amortize the
outstanding debt as of June 30, 2013, are as follows:
.25%
Year Ending Service R & M
June 30 Principal Interest Fee Reserve Total
2014 $ 337,793 $ 65,429 $ 16,357 $ 18,750 $ 438,329
2015 341,179 62,043 15,511 18,750 437,483
2016 344,600 58,623 14,656 18,750 436,629
2017 348,054 55,168 13,792 18,750 435,764
2018 351,543 51,679 12,920 18,750 434,892
2019-2023 1,811,292 204,818 51,205 56,250 2,123,565
2024-2028 1,903,922 112,188 28,047 - 2,044,157
2029-2031 1,188,776 20,890 5,223 - 1,214,889
TOTALS $6,627,159 $630,838 $157,711 $150,000 $7,565,708
(Continued)
- 83 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
Note 7 - Commitments and Contingencies:
Grant Contingencies
Amounts received from grantor agencies are subject to audit and adjustment by grantor agencies,
principally the federal government. Any disallowed claims, including amounts already collected, may
constitute a liability of the applicable funds. The amount, if any, of expenditures which may be disallowed
by the grantor cannot be determined at this time although the government expects such amounts, if any, to
be immaterial.
Construction Commitments
The City has various on-going contracts for construction, renovations, paving materials, equipment, and
labor. As of June 30, 2013, the significant construction commitments were as follows:
Cumulative Estimated
Costs Incurred Total Costs
Olivet Church Road Improvement Project $ 1,738,073 $ 1,738,300
Riverfront Development - Phase I 2,359,808 5,725,000
Riverfront - Other River Boat Launch Project 927,391 2,878,540
Greenway Trail Projects 749,241 1,303,000
$ 5,774,513 $11,644,840
Loan Guarantee
The City of Paducah and McCracken County Fiscal Court (County) are co-guarantors for a Greater
Paducah Economic Development Council, Inc. (GPEDC) commercial loan for development of the
Information Age Park. The balance outstanding as of fiscal year end is $361,438 of which the City and
County have equally guaranteed. The GPEDC is current on required payments and is expected to make full
restitution of the loan.
Note 8 - Risk Management and Litigation:
The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets;
errors and omissions; injuries to employees; and natural disasters. The City obtains coverage from
commercial insurance companies to handle the risk of loss. There have been no decreases in insurance
coverage from the prior year. There have been no settlements in excess of insurance coverage during the
prior three years.
An analysis of claims activity is presented below:
Current Year
Beginning of Claims and Actual Balance at
Fiscal Year Changes in Claim Fiscal
Liability Estimates Payments Year End
2010 - 2011 $ - $ 70,643 $ 70,643 $ -
2011 - 2012 - 119,319 117,856 1,463
2012 - 2013 1,463 29,551 31,014 -
(Continued)
- 84 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
Note 8 - Risk Management and Litigation:
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, 2013, that number
was $3,086,787. 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 $84,602 at June 30, 2013.
The analysis of claims activity is presented below:
Current Year
Beginning of Claims and Actual Balance at
Fiscal Year Changes in Claim Fiscal
Liability Estimates Payments Year End
2010 - 2011 $228,648 $2,118,069 $2,118,437 $228,280
2011 - 2012 228,280 3,224,703 3,203,329 249,654
2012 - 2013 249,654 2,700,338 2,865,390 84,602
Several lawsuits are pending involving citizens’ complaints and the City of Paducah. Various allegations
have been made seeking damages which the legal counsel of the City, along with its management, has
determined to be immaterial to the City’s financial position.
Note 9 - Lease Agreements:
Operating Leases
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. In December 2003, with the authorization of the City, the
Center secured financing of $6.5 million subject to a mortgage against the leasehold and real property on
which the performing arts center is located. The City also consented to an assignment of the lease as
security for the loan.
The City is leasing land and building to Infiniti Media, Inc. for use by Infiniti Plastic Technologies, Inc.
Originally accounted for as a direct financing lease agreement commencing on September 1, 2007, with a
monthly payment of $33,816 and ending with the final payment due August 1, 2024 which coincides with
debt service payments the City is required to make on bonds maturing annually through year ending June
30, 2024 (Note 3 – Long-Term Liabilities). During the fiscal year ending June 30, 2013, Infiniti Media,
Inc. was notified it was in default per the lease agreement due to failure met its required employment
covenants. In accordance with the lease terms, the default resulted in cancellation of the buyout options
available. Accordingly, the City is accounting for the lease as an operating lease with required monthly
payments of $33,816 until the lease is terminated by either party under the terms of the lease agreement.
Rental payments received during 2013 were $405,796 which coincided with the debt service requirements
on the related property debt.
(Continued)
- 85 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
Note 9 - Lease Agreements:
Operating Leases
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 2013 totaled $442,322.
The following is an analysis of property leased under these leases at June 30, 2013:
Land $ 480,000
Buildings 3,422,261
Equipment 110,126
Total 4,012,387
Less: accumulated depreciation (919,530)
NET BOOK VALUE $3,092,857
Depreciation expense for the year ended June 30, 2013, on leased property was $81,466.
The following is a schedule of future minimum rental income from operating leases at June 30, 2013:
Lease
Income
2014 $ 786,348
2015 448,185
2016 263,955
2017 65,024
2018 60,123
2019-2022 135,277
TOTAL MINIMUM LEASE RECEIPTS $1,758,912
Note 10 – Subsequent Events:
In September of 2013, the City issued general obligation bond series 2013A and 2013B of $1,120,000 and
$2,475,000, respectively. The series 2013A bonds were issued for the costs of renovation and
improvement of the municipal pool. The series 2013B bonds were issued for a portion of the costs of the
construction of improvements to an industrial/distribution facility and a portion of the costs of the
acquisition, construction, installation and equipping of an approximately 30,000 square foot building for
the economic development.
In preparing these financial statements, management has evaluated events and transactions for potential
recognition or disclosure through December 20, 2013, the date financial statements were available to be
issued.
CITY OF PADUCAH, KENTUCKY
REQUIRED SUPPLEMENTARY INFORMATION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2013
- 86 -
Exhibit A-1
CITY OF PADUCAH, KENTUCKY
REQUIRED SUPPLEMENTARY INFORMATION
PENSION TRUST FUNDS SCHEDULES
Schedules of Funding Progress
Actuarial Actuarial Unfunded Annual UAAL as a
Actuarial Value of Accrued AAL Funded Covered Percentage of
Valuation Assets Liability (AAL) (UAAL) Ratio Payroll Covered Payroll
Date (a) (b) (b-a) (a/b) (c) ((b-a)/c)
Police and Firefighters’ Pension Fund (PFPF) (Using Entry Age Normal Method)
7/1/2008 $ 12,097,054 $ 14,076,843 $1,979,789 85.9 $ 56,475 $ 3,505.60
7/1/2009 8,647,519 13,476,007 4,828,488 64.2 55,475 8,641.74
7/1/2010 8,443,296 13,134,852 4,691,556 64.3 63,434 7,395.96
7/1/2011 8,715,408 12,375,144 3,659,736 70.4 62,915 5,816.95
7/1/2012 7,567,321 12,000,339 4,433,018 63.1 77,148 5,746.12
7/1/2013 7,145,361 11,296,982 4,151,621 63.3 69,211 5,998.50
Appointive Employees’ Pension Fund (AEPF) (Using Entry Age Actuarial Method)
7/1/2008 $ 271,701 $ 317,849 $ 46,148 85.5 n/a* n/a*
7/1/2009 226,016 306,287 80,271 73.8 n/a* n/a*
7/1/2010 178,245 294,784 116,539 60.5 n/a* n/a*
7/1/2011 137,018 161,229 24,211 85.0 n/a* n/a*
7/1/2012 106,983 154,679 47,696 69.2 n/a* n/a*
7/1/2013 75,905 148,208 72,303 51.2 n/a* n/a*
* 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 (NPO)
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)
2012 361,701 108 (5,428,344)
2013 462,154 103 (5,384,081)
AEPF
Year Annual Percent Ending
Ended Required ARC Net Pension
June 30 Contribution (ARC) Contributed Obligation (NPO)
2008 $ 8,925 0 $ (250,893)
2009 6,278 0 (227,510)
2010 17,095 0 (194,904)
2011 3,760 0 (177,855)
2012 7,722 0 (158,008)
2013 12,217 0 (135,018)
CITY OF PADUCAH, KENTUCKY
SUPPLEMENTARY INFORMATION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2013
Exhibit B-1
Variance with
Final Budget
Final Positive
Budget (Negative)
Revenues:
Intergovernmental and grants
Intergovernmental -$ -$ -$
Grants 2,255,955 2,255,963 8
Interest 5,605 5,609 4
Miscellaneous 1,160,625 1,160,641 16
Total revenues 3,422,185 3,422,213 28
Expenditures:
Capital outlay 4,324,845 4,324,821 24
Excess (deficiency) of revenues over
expenditures (902,660) (902,608) 4
Other Financing Sources (Uses):
Operating transfers in 2,692,385 2,692,394 9
Operating transfers out (222,485) (222,474) (11)
Total other financing sources 2,469,900 2,469,920 (2)
Net change in fund balance 1,567,240$ 1,567,312 2$
Fund balance, July 1, 2012 1,487,938
FUND BALANCE, JUNE 30, 2013 3,055,250$
See auditors report on pages 11-12.
-87-
Actual
CITY OF PADUCAH, KENTUCKY
DETAIL SCHEDULE OF REVENUES, EXPENDITURES, AND
GENERAL CAPITAL IMPROVEMENTS FUND
FOR THE YEAR ENDED JUNE 30, 2013
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
Exhibit B-2
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
Revenues:
Intergovernmental 577,245$ 577,255$ 10$
Grants - 93,684 93,684
Total revenues 577,245 670,939 93,694
Expenditures:
Debt service:
Principal requirement 1,698,475 1,698,468 7
Interest and fiscal requirement 995,785 1,089,447 (93,662)
Total expenditures 2,694,260 2,787,915 (93,655)
Excess (deficiency) of revenues over
expenditures (2,117,015) (2,116,976) 39
Other Financing Sources (Uses):
Capital lease 405,800 405,796 (4)
Operating transfers in 1,996,090 1,996,093 3
Total other financing sources 2,401,890 2,401,889 (1)
Net change in fund balance 284,875$ 284,913 38$
Fund balance, July 1, 2012 68,904
FUND BALANCE, JUNE 30, 2013 353,817$
See auditors report on pages 11-12.
-88-
FOR THE YEAR ENDED JUNE 30, 2013
CITY OF PADUCAH, KENTUCKY
DEBT SERVICE FUND
DETAIL SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
CITY OF PADUCAH, KENTUCKY
SUPPLEMENTARY INFORMATION
NONMAJOR GOVERNMENTAL FUNDS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2013
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.
Exhibit B-3
Court Small
Awards Grant
Fund Fund
Cash and cash equivalents 1,410,332$ 302,134$ 171,706$ 11,040$
Receivables, net:
Accounts 60,007 171,852 - -
Grants - - - -
TOTAL ASSETS 1,470,339$473,986$ 171,706$ 11,040$
Liabilities:
Voucher and accounts payable 168,918$ 22,143$ 112,611$ 11,040$
Accrued payroll and payroll taxes - 52,969 - -
Due to other funds - - - -
Total liabilities 168,918 75,112 112,611 11,040
Fund Balances:
Restricted for:
Highway and streets 1,301,421 - - -
Public safety - - 59,095 -
Program purposes - - - -
Assigned for:
Public safety 398,874
Unrestricted - - - -
Total fund balances 1,301,421 398,874 59,095 -
TOTAL LIABILITIES AND
FUND BALANCES 1,470,339$473,986$ 171,706$ 11,040$
See auditors report on pages 11-12.
LIABILITIES
Municipal
Aid Program Service Fund
Communication
CITY OF PADUCAH, KENTUCKY
Special Revenue Funds
COMBINING BALANCE SHEET
ASSETS
-89-
Emergency
AND
NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2013
FUND BALANCES
CDBG Home
Grant Grant Bond
Fund Fund Fund
-$ 119,665$ -$ 2,014,877$
- - - 231,859
443,368 106,000 - 549,368
443,368$ 225,665$ -$ 2,796,104$
207,995$ -$ -$ 522,707$
- - - 52,969
235,373 - - 235,373
443,368 - - 811,049
- - - 1,301,421
- - - 59,095
- 225,665 - 225,665
398,874
- - - -
- 225,665 - 1,985,055
443,368$ 225,665$ -$ 2,796,104$
Special Revenue Funds
-90-
Governmental
Funds
Total Nonmajor
Exhibit B-4
Court Small
Awards Grant
Revenues:Fund Fund
Taxes -$ 434,721$ -$ -$
Charges for services - 226,431 - -
Intergovernmental 663,057 - - -
Grants - - 27,662 36,372
Interest 13,662 2,450 1,615 -
Miscellaneous - 397,363 - 5,052
Total revenues 676,719 1,060,965 29,277 41,424
Expenditures:
Current operations:
Public safety - 1,593,690 50,281 -
Public service 1,191,979 - - -
Planning and development - - - 46,473
Total expenditures 1,191,979 1,593,690 50,281 46,473
Excess (deficiency) of revenues
over expenditures (515,260) (532,725) (21,004) (5,049)
Other Financing Sources (Uses):
Proceeds of line of credit - - - -
Transfers in 860,000 528,268 - 5,049
Transfers out (200,000) - - -
Total other financing sources (uses) 660,000 528,268 - 5,049
Net change in fund balances 144,740 (4,457) (21,004) -
Fund balances, July 1, 2012 1,156,681 403,331 80,099 -
FUND BALANCES, JUNE 30, 2013 1,301,421$398,874$ 59,095$ -$
See auditors report on pages 11-12.
-91-
Special Revenue Funds
Municipal
Emergency
Service FundAid Program
Communication
CITY OF PADUCAH, KENTUCKY
FOR THE YEAR ENDED JUNE 30, 2013
NONMAJOR GOVERNMENTAL FUNDS
AND CHANGES IN FUND BALANCES
COMBINING STATEMENT OF REVENUES, EXPENDITURES
CDBG Home
Grant Grant Bond
Fund Fund Fund
-$ -$ -$ 434,721$
- - - 226,431
- - - 663,057
434,593 107,500 - 606,127
- - 1,527 19,254
38,197 - - 440,612
472,790 107,500 1,527 2,390,202
- - - 1,643,971
- - - 1,191,979
472,790 357,947 - 877,210
472,790 357,947 - 3,713,160
- (250,447) 1,527 (1,322,958)
- 308,112 - 308,112
- 168,000 - 1,561,317
- - (287,803) (487,803)
- 476,112 (287,803) 1,381,626
- 225,665 (286,276) 58,668
- - 286,276 1,926,387
-$ 225,665$ -$ 1,985,055$
-92-
Special Revenue Funds
Funds
Total Nonmajor
Governmental
Exhibit B-5
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
Revenues:
Intergovernmental 663,055$ 663,057$ 2$
Interest 13,660 13,662 2
Other - - -
Total revenues 676,715 676,719 4
Expenditures:
Public service 1,191,980 1,191,979 1
Excess (deficiency) of revenues over
expenditures (515,265) (515,260) 5
Other Financing Sources (Uses):
Operating transfers in 860,000 860,000 -
Operating transfers out (200,000) (200,000) -
Total other financing sources (uses) 660,000 660,000 -
Net change in fund balance 144,735$ 144,740$ 5$
Fund balance, July 1, 2012 1,156,681
FUND BALANCE, JUNE 30, 2013 1,301,421$
See auditors report on pages 11-12.
-93-
FOR THE YEAR ENDED JUNE 30, 2013
CITY OF PADUCAH, KENTUCKY
MUNICIPAL AID PROGRAM FUND
DETAIL SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
Exhibit B-6
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
Revenues:
Local contributions 434,720$ 434,721$ 1$
Telephone surcharges 226,430 226,431 1
Interest 2,500 2,450 (50)
Miscellaneous 397,360 397,363 3
Total revenues 1,061,010 1,060,965 (45)
Expenditures:
Public safety 1,593,735 1,593,690 45
Excess (deficiency) of revenues over
expenditures (532,725) (532,725) -
Other Financing Sources (Uses):
Operating transfers in 528,265 528,268 3
Operating transfers out - - -
Total other financing sources (uses)528,265 528,268 3
Net change in fund balance (4,460)$ (4,457) 3$
Fund balance, July 1, 2012 403,331
FUND BALANCE, JUNE 30, 2013 398,874$
See auditors report on pages 11-12.
-94-
FOR THE YEAR ENDED JUNE 30, 2013
CITY OF PADUCAH, KENTUCKY
EMERGENCY COMMUNICATION SERVICE FUND
DETAIL SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
Exhibit B-7
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
Revenues:
Grants 27,660$ 27,662$ 2$
Interest 1,615 1,615 -
Total revenues 29,275 29,277 2
Expenditures:
Public safety 50,285 50,281 4
Excess (deficiency) of revenues over
expenditures (21,010) (21,004) 6
Net change in fund balance (21,010)$ (21,004) 6$
Fund balance, July 1, 2012 80,099
FUND BALANCE, JUNE 30, 2013 59,095$
See auditors report on pages 11-12.
-95-
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, 2013
Exhibit B-8
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
Revenues:
Grants 36,370$ 36,372$ 2$
Other 5,050 5,052 2
Total revenues 41,420 41,424 4
Expenditures:
Planning and development 46,475 46,473 2
Excess (deficiency) of revenues over
expenditures (5,055) (5,049) 6
Other Financing Sources (Uses):
Operating transfers in 5,045 5,049 4
Operating transfers out - - -
Total other financing sources (uses)5,045 5,049 4
Net change in fund balance (10)$ - 10$
Fund balance, July 1, 2012 -
FUND BALANCE, JUNE 30, 2013 -$
See auditors report on pages 11-12.
-96-
FOR THE YEAR ENDED JUNE 30, 2013
CITY OF PADUCAH, KENTUCKY
SMALL GRANT FUND
DETAIL SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
Exhibit B-9
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
Revenues:
Grants 434,590$ 434,593$ 3$
Other 38,195 38,197 2
Total revenues 472,785 472,790 5
Expenditures:
Planning and development 472,790 472,790 -
Excess (deficiency) of revenues over
expenditures (5) - 5
Net change in fund balance (5)$ - 5$
Fund balance, July 1, 2012 -
FUND BALANCE, JUNE 30, 2013 -$
See auditors report on pages 11-12.
-97-
FOR THE YEAR ENDED JUNE 30, 2013
CITY OF PADUCAH, KENTUCKY
CDBG FUND
DETAIL SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
Exhibit B-10
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
Revenues:
Grants 107,500$ 107,500$ -$
Total revenues 107,500 107,500 -
Expenditures:
Planning and development 357,950 357,947 3
Excess (deficiency) of revenues over
expenditures (250,450) (250,447)3
Other Financing Sources (Uses):
Proceeds from line of credit 308,110 308,112 2
Operating transfers in 168,000 168,000 -
Operating transfers out - - -
Net change in fund balance 225,660$ 225,665 5$
Fund balance, July 1, 2012 -
FUND BALANCE, JUNE 30, 2013 225,665$
See auditors report on pages 11-12.
-98-
FOR THE YEAR ENDED JUNE 30, 2013
CITY OF PADUCAH, KENTUCKY
HOME GRANT FUND
DETAIL SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
Exhibit B-11
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
Revenues:
Grants -$ -$ -$
Interest 1,525 1,527 2
Total revenues 1,525 1,527 2
Expenditures:
Capital outlay - - -
Total expenditures - - -
Excess (deficiency) of revenues over
expenditures 1,525 1,527 2
Other Financing Sources (Uses):
Operating transfers in - - -
Operating transfers out (287,810) (287,803) 7
Total other financing sources (uses)(287,810) (287,803) 7
Net change in fund balance (286,285)$ (286,276) 9$
Fund balance, July 1, 2012 286,276
FUND BALANCE, JUNE 30, 2013 -$
See auditors report on pages 12-13.
-99-
FOR THE YEAR ENDED JUNE 30, 2013
CITY OF PADUCAH, KENTUCKY
BOND FUND
DETAIL SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
CITY OF PADUCAH, KENTUCKY
SUPPLEMENTARY INFORMATION
NONMAJOR PROPRIETARY FUNDS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2013
COMBINING FINANCIAL STATEMENTS
NONMAJOR PROPRIETARY 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-1
Civic
Center TISA
Current Assets: Fund Fund
Cash and cash equivalents 565,998$ 382$ -$ 566,380$
Receivables, net - - - -
Prepaid expense - - - -
Total current assets 565,998 382 - 566,380
Noncurrent Assets:
Net depreciable capital assets 7,013 159,597 - 166,610
Total assets 573,011 159,979 - 732,990
Current Liabilities:
Voucher and accounts payable 91,214 4,953 - 96,167
Accrued compensated absences 1,617 - - 1,617
Unearned revenues 45,478 - - 45,478
Due to other funds 27,253 - - 27,253
Total current liabilities 165,562 4,953 - 170,515
Noncurrent Liabilities:
Accrued compensated absences 14,551 - - 14,551
Total liabilities 180,113 4,953 - 185,066
Invested in capital assets 7,013 159,597 - 166,610
Restricted - Housing 385,885 - - 385,885
Unrestricted - (4,571) - (4,571)
TOTAL NET POSITION 392,898$ 155,026$-$ 547,924$
See auditors report on pages 11-12.
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF NET POSITION
NONMAJOR PROPRIETARY FUNDS
JUNE 30, 2013
ASSETS
LIABILITIES
NET POSITION
-100-
Total Nonmajor
Enterprise
Funds
Section
Eight
Housing
Exhibit C-2
Civic
Center TISA
Operating Revenues: Fund Fund
Charges for services -$ 38,265$ -$ 38,265$
Miscellaneous 2,853 - - 2,853
Total operating income 2,853 38,265 - 41,118
Operating Expenses:
Cost of sales and service 2,027,205 67,979 - 2,095,184
Depreciation and amortization 5,639 10,021 - 15,660
Total operating expenses 2,032,844 78,000 - 2,110,844
Operating income (loss)(2,029,991) (39,735) - (2,069,726)
Non-Operating Revenues (Expenses):
Grants - program purpose 1,677,185 - - 1,677,185
Interest and investment income 235 (145) - 90
Gain (loss) on disposal of property
and equipment - - (34,097) (34,097)
Total nonoperating revenues
(expenses)1,677,420 (145) (34,097) 1,643,178
Income (loss) before contributions and
transfers (352,571) (39,880) (34,097) (426,548)
Contributions and Operating Transfers:
Transfers in - 30,359 - 30,359
Transfers out - - (275,497) (275,497)
Total contributions and operating transfers - 30,359 (275,497) (245,138)
Change in net position (352,571) (9,521) (309,594) (671,686)
Net position, July 1, 2012 745,469 164,547 309,594 1,219,610
NET POSITION, JUNE 30, 2013 392,898$ 155,026$-$ 547,924$
See auditors report on pages 11-12.
-101-
FOR THE YEAR ENDED JUNE 30, 2013
NONMAJOR PROPRIETARY FUNDS
AND CHANGES IN NET POSITION
Funds
Section
Eight
Housing
COMBINING STATEMENT OF REVENUES, EXPENSES
CITY OF PADUCAH, KENTUCKY
Total Nonmajor
Enterprise
Exhibit C-3
Civic
Center TISA
Cash Flows from Operating Activities: Fund Fund
Cash received from customers -$ 38,265$ 1,035$ 39,300$
Payments to employees (141,890) - - (141,890)
Payments to internal service funds - (2,290) - (2,290)
Other receipts 2,853 - - 2,853
Other payments (1,914,989) (65,807) (2,501) (1,983,297)
Net cash provided (used) by operating activities (2,054,026) (29,832) (1,466) (2,085,324)
Cash Flows from Noncapital
Financing Activities:
Grants - program purpose 1,722,663 - - 1,722,663
Transfers from other funds - 30,359 - 30,359
Transfers to other funds - - (275,497) (275,497)
Net cash provided (used) by noncapital
financing activities 1,722,663 30,359 (275,497) 1,477,525
Cash Flows from Investing Activities:
Interest on cash and investments 235 (145) - 90
Net increase (decrease) in cash and cash
equivalents (331,128) 382 (276,963) (607,709)
Cash and cash equivalents, July 1, 2012 897,126 - 276,963 1,174,089
CASH AND CASH EQUIVALENTS,
JUNE 30, 2013 565,998$ 382$ -$ 566,380$
Reconciliation of Operating Income (Loss) to
Net Cash Provided by Operating Activities:
Operating income (loss)(2,029,991)$ (39,735)$-$ (2,069,726)$
Adjustments to reconcile operating income (loss)
to net cash provided by operating activities:
Depreciation and amortization 5,639 10,021 - 15,660
Change in assets and liabilities:
Receivables - - 1,035 1,035
Unearned revenues (45,478) - - (45,478)
Accounts payable and accrued expenses 15,804 (118) (2,501) 13,185
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES (2,054,026)$ (29,832)$(1,466)$ (2,085,324)$
See auditors report on pages 11-12.
-102-
Section
Eight
Housing
Total Nonmajor
Enterprise
Funds
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF CASH FLOWS
NONMAJOR PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2013
CITY OF PADUCAH, KENTUCKY
SUPPLEMENTARY INFORMATION
INTERNAL SERVICE FUNDS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2013
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 acquisitions provided by one
department or agency to other departments or agencies of the government and to other
governmental units, on a cost reimbursement basis.
Insurance Fund – to account for the costs of obtaining insurance for other City departments.
Health Insurance Fund – to account for the costs associated with the City’s health insurance
activities. The intent of the City of Paducah is that the cost of providing insurance coverage on a
continuing basis be financed primarily through user charges.
Exhibit D-1
Health
Fleet Lease Insurance Insurance Combined
Current Assets: Trust Fund Fund Total
Cash and cash equivalents 26,546$ 3,283,154$ 278,437$ 1,099,661$ 4,687,798$
Investments - - - - -
Receivables, net - - 383 51,818 52,201
Prepaid expense - 832,354 - 29,429 861,783
Inventories 61,012 - - - 61,012
Total current assets 87,558 4,115,508 278,820 1,180,908 5,662,794
Noncurrent Assets:
Net depreciable capital assets 28,744 2,887,397 - - 2,916,141
Total assets 116,302 7,002,905 278,820 1,180,908 8,578,935
Current Liabilities:
Voucher and accounts payable 10,039 35 4,784 84,602 99,460
Accrued payroll and payroll taxes 16,263 - - - 16,263
Accrued compensated absences 36,750 - - - 36,750
Deferred revenue - - - 23,955 23,955
Total current liabilities 63,052 35 4,784 108,557 176,428
Noncurrent Liabilities:
Accrued compensated absences 15,959 - - - 15,959
Total liabilities 79,011 35 4,784 108,557 192,387
Invested in capital assets, net
of related debt 28,744 2,887,397 - - 2,916,141
Unrestricted 8,547 4,115,473 274,036 1,072,351 5,470,407
TOTAL NET POSITION 37,291$ 7,002,870$274,036$ 1,072,351$ 8,386,548$
See auditors report on pages 11-12.
-103-
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF NET POSITION
INTERNAL SERVICE FUNDS
JUNE 30, 2013
LIABILITIES
ASSETS
NET POSITION
Fleet
Maintenance
Exhibit D-2
Health
Fleet Lease Insurance Insurance Combined
Trust Fund Fund Total
Operating Revenues:
Charges for services - internal 371,954$ 769,342$ 909,105$ 3,941,358$ 5,991,759$
Charges for services - external - - - 275,582 275,582
Total operating revenues 371,954 769,342 909,105 4,216,940 6,267,341
Operating Expenses:
Vehicle maintenance 503,049 425 - - 503,474
Administrative - 26,909 - 333,536 360,445
Insurance - - 919,732 3,358,959 4,278,691
Leave expense (331) - - - (331)
Depreciation 10,724 599,493 - - 610,217
Total operating expenses 513,442 626,827 919,732 3,692,495 5,752,496
Operating income (loss)(141,488) 142,515 (10,627) 524,445 514,845
Nonoperating Revenues and (Expenses):
Interest and investment income 22 35,913 - - 35,935
Gain (loss) on disposal of property
and equipment 131 1,718 - - 1,849
Total nonoperating revenues
(expenses)153 37,631 - - 37,784
Income (loss) before transfers (141,335) 180,146 (10,627) 524,445 552,629
Contributions and Transfers:
Transfers in 149,107 - 6,885 - 155,992
Transfers out - (8,774) - - (8,774)
Total contributions and operating transfers 149,107 (8,774) 6,885 - 147,218
Change in net position 7,772 171,372 (3,742) 524,445 699,847
Net position, July 1, 2012 29,519 6,831,498 277,778 547,906 7,686,701
NET POSITION, JUNE 30, 2013 37,291$ 7,002,870$274,036$ 1,072,351$ 8,386,548$
See auditors report on pages 11-12.
-104-
Fleet
Maintenance
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF REVENUES, EXPENSES,
AND CHANGES IN NET POSITION
INTERNAL SERVICE FUNDS
FOR THE YEAR ENDED JUNE 30, 2013
Exhibit D-3
Health
Fleet Lease Insurance Insurance Combined
Cash Flows from Operating Activities: Trust Fund Fund Total
Receipts from other funds for services 371,954$ 1,285,095$ 911,099$ 4,267,851$ 6,835,999$
Payments to suppliers (190,469) (832,354) - - (1,022,823)
Payments to employees (290,335) - - - (290,335)
Claims paid - - - (3,558,712) (3,558,712)
Other payments - (27,298) (919,486) (333,536) (1,280,320)
Net cash provided (used) by operating activities (108,850) 425,443 (8,387) 375,603 683,809
Cash Flows from Noncapital Financing
Activities:
Transfers from other funds 149,107 - 6,885 - 155,992
Transfers to other funds - (8,774) - - (8,774)
Net cash provided (used) by noncapital
financing activities 149,107 (8,774) 6,885 - 147,218
Cash Flows from Capital and Related
Financing Activities:
Proceeds from sale of capital assets 132 21,276 - - 21,408
Purchase of capital assets (16,775) (435,337) - - (452,112)
Net cash used by capital and related financing (16,643) (414,061) - - (430,704)
Cash Flows from Investing Activities:
Proceeds from sales and maturities
of investments - 550,000 - - 550,000
Interest and dividends 22 35,913 - - 35,935
Net cash used by investing activities 22 585,913 - - 585,935
Net increase (decrease) in cash
and cash equivalents 23,636 588,521 (1,502) 375,603 986,258
Cash and cash equivalents, July 1, 2012 2,910 2,694,633 279,939 724,058 3,701,540
CASH AND CASH EQUIVALENTS,
JUNE 30, 2013 26,546$ 3,283,154$278,437$ 1,099,661$ 4,687,798$
Reconciliation of Operating Income (Loss) to
Net Cash Provided by Operating Activities:
Operating income (loss) (141,488)$ 142,515$ (10,627)$ 524,445$ 514,845$
Adjustments to reconcile operating
income (loss) to net cash provided
(used) by operating activities:
Depreciation and amortization 10,724 599,493 - - 610,217
Change in assets and liabilities:
Receivables - 4,943 1,993 26,956 33,892
Prepaid expense - (832,354) - (29,429) (861,783)
Inventories 15,877 - - - 15,877
Due form other funds - 510,810 - - 510,810
Accounts payable and accrued expenses 6,037 36 247 (146,369) (140,049)
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES (108,850)$425,443$ (8,387)$ 375,603$ 683,809$
See auditors report on pages 11-12.
-105-
Fleet
Maintenance
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF CASH FLOWS
INTERNAL SERVICE FUNDS
FOR THE YEAR ENDED JUNE 30, 2013
CITY OF PADUCAH, KENTUCKY
SUPPLEMENTARY INFORMATION
FIDUCIARY FUNDS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2013
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.
Exhibit E-1
Total
Cash and cash equivalents 1,018$ 75,911$ 76,929$
Receivables:
Interest 28,684 - 28,684
Prepaid expenses - - -
Investments at fair value
Money market funds 139,107 - 139,107
Certificates of deposits - - -
Common stock 2,599,294 - 2,599,294
Corporate bonds 992,120 - 992,120
U.S. agencies bonds 989,387 - 989,387
Mortgage backed securities - - -
Mutual funds 2,395,903 - 2,395,903
Total assets 7,145,513 75,911 7,221,424
Voucher and accounts payable 151 5 156
Held in trust for pension benefits and
other purposes 7,145,362$ 75,906$ 7,221,268$
See auditors report on pages 11-12.
AppointivePolice and
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF FIDUCIARY NET POSITION
FIDUCIARY FUNDS - PENSION TRUST FUNDS
JUNE 30, 2013
ASSETS
LIABILITIES
NET POSITION
-106-
Employees'
Retirement Fund Pension Fund
Firefighters'
Exhibit E-2
Additions:Totals
Contributions:
Employer 476,951$ -$ 476,951$
Plan members 5,537 - 5,537
Total contributions 482,488 - 482,488
Investment earnings:
Net change in fair value of investments 448,722 - 448,722
Interest and dividends 219,875 1,039 220,914
Net investment earnings 668,597 1,039 669,636
Total additions 1,151,085 1,039 1,152,124
Deductions:
Benefits 1,524,801 25,040 1,549,841
Administrative expenses 48,244 7,076 55,320
Total deductions 1,573,045 32,116 1,605,161
Employees'Firefighters'
FIDUCIARY FUNDS - PENSION TRUST FUNDS
FOR THE YEAR ENDED JUNE 30, 2013
COMBINING STATEMENT OF CHANGES IN NET POSITION
CITY OF PADUCAH, KENTUCKY
Police and Appointive
Retirement Fund Pension Fund
Total deductions 1,573,045 32,116 1,605,161
Change in net position (421,960) (31,077) (453,037)
Net position - beginning 7,567,321 106,983 7,674,304
Net position - ending 7,145,361$ 75,906$ 7,221,267$
See auditors report on pages 11-12.
-107-
COMBINING FINANCIAL STATEMENTS
FIDUCIARY FUNDS
Private-purpose Trust Funds
Cemetery and Park Trusts - to account for assets held by the City in the capacity of trustee for
specified purposes.
Exhibit E-3
Cemetery
and
Park
Trusts
Cash and cash equivalents 3,965$
Investments at fair value
Money market funds 3,925
Mutual funds 1,090,393
Total assets 1,098,283
Accounts payable -
Held in trust for other purposes 1,098,283$
See auditors report on pages 11-12.
-108-
ASSETS
LIABILITIES
NET POSITION
JUNE 30, 2013
FIDUCIARY FUNDS - PRIVATE-PURPOSE TRUST FUNDS
STATEMENT OF NET POSITION
CITY OF PADUCAH, KENTUCKY
Exhibit E-4
Cemetery
and
Park
Additions:Trusts
Contributions:
Intergovernmental revenues 255$
Private donations 5,755
Total contributions 6,010
Investment earnings:
Change in fair value of investments 69,611
Interest and dividends 69,902
Net investment earnings 139,513
Interfund transfers -
Total additions 145,523
Deductions:
Capital outlay 136,135
Administrative expenses 17,170
Total deductions 153,305
Change in net position (7,782)
Net position - beginning 1,106,065
Net position - ending 1,098,283$
See auditors report on pages 11-12.
STATEMENT OF CHANGES IN NET POSITION
CITY OF PADUCAH, KENTUCKY
-109-
FOR THE YEAR ENDED JUNE 30, 2013
FIDUCIARY FUNDS - PRIVATE-PURPOSE TRUST FUNDS
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.
Exhibit E-5
Payroll Fund: Additions Deductions
Assets:
Cash and cash equivalents 684,762$ 14,217,592$ 14,370,305$ 532,049$
Liabilities:
Payroll taxes and withholdings
payable 684,762$ 14,217,592$ 14,370,305$ 532,049$
See auditors report on pages 11-12.
CITY OF PADUCAH, KENTUCKY
AGENCY FUND
IN ASSETS AND LIABILITIES
STATEMENT OF CHANGES
-110-
FOR THE YEAR ENDED JUNE 30, 2013
Balance Balance
July 1, 2012 June 30, 2013
CITY OF PADUCAH, KENTUCKY
STATISTICAL SECTION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2013
STATISTICAL SECTION
Contents Page
Financial Trends 111-115
Revenue Capacity 116-121
Debt Capacity 122-125
Economic and Demographic Information 126-127
Operating Information 128-130
These schedules offer economic and demographic indicators to help the reader understand
the environment within which the City's financial activities take place.
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 ending June 30, 2003. Schedules presenting government-
wide information include information beginning in that year.
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.
These schedules contain trend information to help the reader understand how the City's
financial performance and well-being changed over time.
These schedules contain information to help the reader assess the factors affecting the
City's ability to generate its property and employee taxes.
These schedules present information to help the reader assess the affordability of the City's
current levels of outstanding debt and the City's ability to issue additional debt in the
future.
201320122011 2010 (2) 20092008200720062005 (1)2004Governmental activities:Invested in Capital Assets, Net of Related Debt33,365,112$ 31,957,381$ 32,905,977$ 31,136,514$ 31,215,252$ 31,766,783$ 32,557,572$ 30,664,671$ 29,492,197$ 27,826,117$ Restricted for:Program purposes284,760 897,942 1,264,986 1,100,696 2,183,559 1,782,251 1,904,321 1,018,231 727,699 714,538 Capital projects1,301,421 4,105,639 5,987,399 5,077,026 4,363,913 5,028,420 4,618,923 2,689,804 940,323 4,031,802 Unrestricted13,539,204 5,913,997 4,229,501 8,165,101 8,621,077 9,432,763 9,057,641 7,718,198 7,419,037 (406,042) Total governmental activities net position48,490,497$ 42,874,959$ 44,387,863$ 45,479,337$ 46,383,801$ 48,010,217$ 48,138,457$ 42,090,904$ 38,579,256$ 32,166,415$ Business-type activities:Invested in Capital Assets, Net of Related Debt1,232,735 1,308,574 1,334,230 1,652,961 1,721,419 1,863,975 1,491,523 1,277,720 1,463,118 1,463,668 Restricted for:Program purposes385,885 732,817 999,885 620,800 369,368 579,460 - - - - Unrestricted3,428,267 3,246,320 3,004,783 1,816,705 1,036,093 (19,965) (147,286) 132,090 (27,648) 1,979,494 Total business-type activities net postion5,046,887$ 5,287,711$ 5,338,898$ 4,090,466$ 3,126,880$ 2,423,470$ 1,344,237$ 1,409,810$ 1,435,470$ 3,443,162$ Primary government:Invested in Capital Assets, Net of Related Debt34,597,847 33,265,955 34,240,207 32,789,475 32,936,671 33,630,758 34,049,095 31,942,391 30,955,315 29,289,785 Restricted for:Program purposes670,645 1,630,759 2,264,871 1,721,496 2,552,927 2,361,711 1,904,321 1,018,231 727,699 714,538 Capital projects1,301,421 4,105,639 5,987,399 5,077,026 4,363,913 5,028,420 4,618,923 2,689,804 940,323 4,031,802 Unrestricted16,967,471 9,160,317 7,234,284 9,981,806 9,657,170 9,412,798 8,910,355 7,850,288 7,391,389 1,573,452 Total primary government net position53,537,384$ 48,162,670$ 49,726,761$ 49,569,803$ 49,510,681$ 50,433,687$ 49,482,694$ 43,500,714$ 40,014,726$ 35,609,577$ (1) Significant change in governmental and business-type net position due to reclassification for prior year omitted receivables, capital assets and post-closure landfill expenses. (2) Significant change in governmental net position due to reclassification for prior year grant receivables. Fiscal YearTABLE 1CITY OF PADUCAH, KENTUCKYNET POSITION BY COMPONENTLast Ten Fiscal Years (accrual basis of accounting)-111-
Pages 1 of 22013 2012 2011 2010 (3) 2009 2008 (2) 2007 2006 2005 (1) 2004ExpensesGovernmental activities:General government 7,843,140$ 12,937,997$ 9,786,052$ 9,763,178$ 12,148,118$ 10,709,641$ 9,462,543$ 9,057,295$ 8,431,994$ 7,969,027$ Public safety 18,204,945 17,045,731 16,993,228 16,239,042 15,734,557 15,938,831 15,182,704 14,592,756 14,620,938 13,243,912 Public service 6,167,510 6,163,602 7,328,806 7,669,729 12,849,566 9,543,714 8,299,658 8,486,662 6,249,860 8,618,901 Parks and recreation 2,710,659 2,654,098 2,748,333 2,653,474 1,492,306 1,286,955 1,197,072 1,044,361 1,045,024 1,026,293 Planning and development 1,463,659 1,192,952 1,212,103 970,022 708,827 282,042 1,891,725 2,404,636 2,521,412 5,330,393 Interest on long-term debt 1,066,876 1,059,537 1,363,580 1,099,450 1,029,888 1,066,067 1,134,898 974,101 775,122 496,049 Total governmental activities expenses 37,456,789 41,053,917 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 3,967,490 3,900,264 3,832,130 3,797,097 4,037,845 4,086,747 4,079,684 3,893,013 3,683,954 3,419,464 Section Eight Housing 2,032,843 1,921,004 1,956,728 2,061,370 2,154,360 1,949,899 - - - - Civic Center78,000 71,069 76,546 69,537 75,692 84,908 54,562 45,894 39,008 33,181 TISA- 173,708 183,546 206,798 162,848 156,388 267,192 269,781 170,264 184,166 Total business-type activities expenses6,078,333 6,066,045 6,048,950 6,134,802 6,430,745 6,277,942 4,401,438 4,208,688 3,893,226 3,636,811 Total primary government expenses43,535,122$ 47,119,962$ 45,481,052$ 44,529,697$ 50,394,007$ 45,105,192$ 41,570,038$ 40,768,499$ 37,537,576$ 40,321,386$ Program RevenuesGovernmental activities:Charges for services:General government 1,525,212$ 1,488,845$ 1,051,509$ 993,371$ 1,303,667$ 1,415,943$ 1,730,046$ 1,618,903$ 1,485,005$ 1,601,414$ Public safety354,829 509,297 790,650 484,754 602,262 268,839 1,024,610 767,086 794,814 1,134,386 Public service963,893 1,032,953 1,205,666 1,197,194 1,220,999 1,111,188 1,150,507 942,355 895,155 986,618 Parks and recreation106,183 97,896 129,790 152,890 180,420 124,606 122,929 103,932 117,317 132,388 Planning and development- - - - 1,600 30,627 10,810 20,602 13,501 12,893 Operating grants and contributions3,067,581 2,215,247 2,086,625 1,813,019 2,119,845 1,340,261 2,797,216 2,988,612 2,452,694 3,290,134 Capital grants and contributions2,165,548 533,169 1,767,093 1,390,848 4,889,520 1,297,900 3,681,490 3,302,568 1,100,064 3,221,637 Total governmental activities program revenues 8,183,246 5,877,407 7,031,333 6,032,076 10,318,313 5,589,364 10,517,608 9,744,058 6,858,550 10,379,470 Business-type activities:Solid Waste4,372,060$ 4,437,341$ 4,476,139$ 4,436,540$ 4,547,959$ 4,165,094$ 3,928,140$ 3,696,609$ 3,583,417$ 3,790,132$ Section Eight Housing- - - - - - - - - - Civic Center 38,265 34,038 33,766 32,455 38,577 32,932 31,372 26,378 32,828 36,455 TISA 99,603 138,797 148,158 148,291 143,833 193,713 106,697 104,087 100,778 Operating grants and contributions 1,727,238 1,647,981 2,400,540 2,340,267 1,965,936 1,785,809 - - - - Capital grants and contributions - 15,266 8,659 27,239 129,032 9,480 23,969 22,894 14,735 24,990 Total business-type activities program revenues 6,137,563 6,234,229 7,057,901 6,984,659 6,829,795 6,137,148 4,177,194 3,852,578 3,735,067 3,952,355 Total primary government program revenues 14,320,809$ 12,111,636$ 14,089,234$ 13,016,735$ 17,148,108$ 11,726,512$ 14,694,802$ 13,596,636$ 10,593,617$ 14,331,825$ Fiscal Year-112-TABLE 2CITY OF PADUCAH, KENTUCKYCHANGES IN NET POSITIONLast Ten Fiscal Years (accrual basis of accounting)
Pages 2 of 22013 2012 2011 2010 (3) 2009 2008 (2) 2007 2006 2005 (1) 2004Net (Expense)/RevenueGovernmental activities(29,273,543)$ (35,176,510)$ (32,400,769)$ (32,362,819)$ (33,644,949)$ (33,237,886)$ (26,650,992)$ (26,815,753)$ (26,785,800)$ (26,305,105)$ Business-type activities59,230 168,184 1,008,951 849,857 399,050 (140,794) (224,244) (356,110) (158,159) 315,544 Total primary government net (expense) (29,214,313)$ (35,008,326)$ (31,391,818)$ (31,512,962)$ (33,245,899)$ (33,378,680)$ (26,875,236)$ (27,171,863)$ (26,943,959)$ (25,989,561)$ General Revenues and Other Changesin Net PositionGovernmental activities:Taxes and licenses:Property taxes, levied for general purpose4,502,276 4,267,812 4,402,226 4,207,736 3,986,760$ 4,221,957 4,122,538$ 4,107,934$ 3,919,113$ 4,012,168$ Insurance premium tax3,863,464 3,690,806 3,476,309 3,797,347 4,055,228 4,699,458 4,414,672 3,863,953 3,957,289 3,767,864 Gross receipts license tax4,391,352 4,359,835 4,243,511 4,229,102 4,320,850 4,061,587 4,050,057 3,899,432 3,720,784 3,496,438 Employee license tax18,336,124 18,095,182 17,345,033 16,384,509 16,584,636 16,520,523 16,273,966 14,794,217 11,192,445 10,616,223 Other taxes2,799,043 2,711,924 2,712,817 2,844,154 2,776,407 2,259,956 1,964,101 2,105,014 2,116,403 1,764,140 Intergovernmental revenue- - - - - 1,401,400 1,243,028 1,201,973 955,645 871,273 Unrestricted investment earnings211,306 203,261 264,913 172,213 336,960 540,620 639,702 462,292 290,647 220,992 Gain on sale of capital assets383,370 36,718 62,539 64,620 68,530 119,200 48,656 8,340 - (1,972) Miscellaneous(82,992) Insurance recoveries- 27,448 410,462 - - - - - - - Litigation settlement- - (1,482,743) - - - - - - - Transfers in/out485,138 270,620 (125,772) (78,893) (110,838) (96,609) (58,175) (115,754) (133,959) (68,964) Total governmental activities34,889,081 33,663,606 31,309,295 31,620,788 32,018,533 33,728,092 32,698,545 30,327,401 26,018,367 24,678,162 Business-type activities:Unrestricted investment earnings49,382 48,806 46,052 33,724 52,961 73,985 83,854 85,786 51,508 32,826 Gain on sale of capital assets52,710 2,443 67,657 1,112 98,369 127,131 16,641 55,337 27,500 34,975 Miscellaneous82,992 Transfers(485,138) (270,620) 125,772 78,893 110,838 96,609 58,176 115,754 133,959 68,964 Total business-type activities(300,054) (219,371) 239,481 113,729 262,168 297,725 158,671 256,877 212,967 136,765 Change in Net PositionGovernmental activities:5,615,538 (1,512,904) (1,091,474) (742,031) (1,626,416) 490,206 6,047,553 3,511,648 (767,433) (1,626,943) Business-type activities:(240,824) (51,187) 1,248,432 963,586 661,218 156,931 (65,573) (99,233) 54,808 452,309 Total primary government 5,374,714$ (1,564,091)$ 156,958$ 221,555$ (965,198)$ 647,137$ 5,981,980$ 3,412,415$ (712,625)$ (1,174,634)$ (1) Significant change in governmental and business-type net position due to reclassification for prior year omitted receivables, capital assets and post-closure landfill expenses. (2) The City began reporting Section Eight Housing fund as a business-tpye activity previously reported as a governmental fund. Prior years have not been restated.(3) Significant change in governmental net position due to restatement of prior year grant receivables.(accrual basis of accounting)CHANGES IN NET POSITION-113-Fiscal YearCITY OF PADUCAH, KENTUCKYLast Ten Fiscal Years TABLE 2
201320122011 2010 (3) 2009 2008 (2) 20072006 2005 (1) 2004General FundUnassigned12,311,565$ 11,321,438$ 10,940,121$ 10,208,678$ 10,311,490$ 9,416,427$ 9,976,079$ 9,157,310$ 8,303,702$ 4,642,073$ Total general fund12,311,565$ 11,321,438$ 10,940,121$ 10,208,678$ 10,311,490$ 9,416,427$ 9,976,079$ 9,157,310$ 8,303,702$ 4,642,073$ All Other Governmental FundsRestricted for:Program purposes284,760$ 1,236,780$ -$ -$ -$ -$ -$ -$ -$ -$ Capital improvements1,301,421 286,276 - - - - - - - - Committed for:Capital improvements2,589,099 2,631,233 2,587,012 2,844,706 2,618,147 2,081,280 1,692,872 719,801 - - Assigned for:Program purposes752,691 472,235 683,578 1,402,731 1,634,547 1,193,968 1,543,547 1,573,977 1,548,082 1,284,119 Capital improvements3,055,250 1,487,938 2,133,786 5,151,791 1,745,766 2,947,140 2,926,051 1,970,003 940,323 3,886,391 Total all other governmental funds 7,983,221$ 6,114,462$ 5,404,376$ 9,399,228$ 5,998,460$ 6,222,388$ 6,162,470$ 4,263,781$ 2,488,405$ 5,170,510$ (1) Significant increase in general fund balance due to reclassification for prior year omitted license and tax receivables in the amount of $3,870,992. (2) Significant decrease in reserve for program purpose due to converting governmental fund to proprietary fund.(3) Significant decrease in general fund balance due to restatement of prior year grant receivables-114-Fiscal YearTABLE 3CITY OF PADUCAH, KENTUCKYFund Balances, Governmental FundsLast Ten Fiscal Years (modified accrual basis of accounting)
2012201220112010200920082007200620052004Revenues:Taxes6,583,690$ 6,343,608$ 6,223,511$ 6,326,740$ 5,867,782$ 6,139,164$ 6,044,069$ 6,204,686$ 6,016,570$ 5,871,229$ Licenses27,197,290 26,753,432 25,704,849 24,979,768 25,411,112 25,924,562 25,140,615 23,432,565 19,368,765 18,423,244 Charges for services815,791 817,607 811,590 846,087 866,688 835,105 783,018 654,059 625,281 668,659 Intergovernmental1,240,312 1,191,835 1,148,362 1,091,324 1,086,377 1,565,348 1,676,783 1,529,879 1,192,724 1,029,307 Grants3,737,402 1,699,399 2,992,519 2,062,554 5,405,810 1,673,936 6,089,711 5,797,500 3,758,041 4,002,721 Interest175,371 162,580 205,837 121,246 225,251 419,103 540,204 402,943 251,302 190,350 Miscellaneous2,743,698 1,902,075 1,790,890 2,653,382 2,250,344 1,944,310 1,832,161 1,844,285 1,377,175 3,781,034 Total revenues42,493,554 38,870,536 38,877,558 38,081,101 41,113,364 38,501,528 42,106,561 39,865,917 32,589,858 33,966,544 Expenditures:General government4,481,485 5,117,194 5,151,370 5,277,916 4,726,435 5,051,374 4,763,839 4,286,431 4,171,662 3,891,251 Public safety18,174,349 18,479,428 16,854,136 15,999,437 15,599,613 15,696,728 14,759,735 14,366,846 14,376,161 12,963,685 Public service5,710,018 5,596,702 6,446,503 5,984,115 7,855,846 7,935,188 7,226,542 7,418,656 5,947,105 6,914,523 Parks and recreation2,664,164 2,677,781 2,781,663 2,582,382 1,490,732 1,298,329 1,192,727 1,044,299 1,045,024 1,026,297 Planning and development1,776,897 2,216,665 1,680,297 1,868,369 1,811,083 803,976 2,424,198 2,545,227 2,267,774 2,570,473 Other766,847 516,534 486,239 847,188 514,488 520,611 526,238 481,690 462,099 2,343,844 Capital outlay4,324,821 2,104,993 5,121,682 8,324,312 8,580,910 4,826,983 6,504,491 5,003,091 4,870,136 10,987,184 Debt service:Principal requirement1,698,468 1,434,246 2,233,588 1,020,585 830,682 880,887 782,870 594,047 552,938 428,613 Interest and fiscal requirement1,089,447 1,114,852 1,519,329 1,077,128 1,003,439 1,051,008 1,108,385 949,537 745,676 471,625 Total expenditures40,686,496 39,258,395 42,274,807 42,981,432 42,413,228 38,065,084 39,289,025 36,689,824 34,438,575 41,597,495 Other Financing Sources (Uses):Bonds issued- - - 6,645,000 1,718,605 - - 6,100,000 - 5,000,000 Long-term debt draws308,112 101,983 366,039 1,222,390 - Long-term debt issued- - - 258,391 69,032 - 246,667 - 275,000 3,500,000 Capital lease405,796 405,796 405,796 405,796 405,796 371,979 - - - - Transfers in7,462,944 5,888,847 8,455,433 9,722,852 5,928,413 6,241,886 5,209,977 6,034,070 3,394,420 3,939,188 Transfers out(7,125,024) (5,809,539) (8,201,253) (9,893,709) (6,150,847) (7,086,517) (5,556,722) (12,681,180) (4,712,171) (5,295,576) Total other financing sources (uses)1,051,828 587,087 1,026,015 8,360,720 1,970,999 (472,652) (100,078) (547,110) (1,042,751) 7,143,612 Net change in fund balances2,858,886$ 199,228$ (2,371,234)$ 3,460,389$ 671,135$ (36,208)$ 2,717,458$ 2,628,983$ (2,891,468)$ (487,339)$ Capital outlay (1)4,034,424$ 2,156,290$ 4,833,547$ 8,763,073$ 2,850,717$ 2,857,189$ 4,638,045$ 3,779,542$ 3,981,143$ 9,144,907$ Debt service as a percentageof noncapital expenditures7.61%6.87%10.02%6.13%4.64%5.49%5.46%4.69%4.26%2.77%(1) Capital outlay is reported on the Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities.-115-Fiscal Year(modified accrual basis of accounting)TABLE 4CITY OF PADUCAH, KENTUCKYChanges in Fund Balances, Governmental FundsLast Ten Fiscal Years
TotalEstimated DirectFiscalPersonalActual Tax Year Commercial Residential Property FranchiseTotalValue RateExemptions2004 602,788,179 484,958,897 438,024,336 73,121,063 1,598,892,475 1,661,522,546 0.326 96.2% 61,656,208 2005 622,478,658 500,350,485 425,304,684 74,460,202 1,622,594,029 1,684,469,469 0.325 96.3% 60,901,557 2006 636,606,837 525,613,365 452,475,748 74,683,129 1,689,379,079 1,750,930,676 0.325 96.5% 61,551,597 2007 692,018,288 561,151,216 482,481,332 51,455,112 1,787,105,948 1,847,595,428 0.307 96.7% 60,489,480 2008 748,189,877 603,688,455 481,049,523 74,068,797 1,906,996,652 1,970,156,891 0.287 96.8% 63,160,239 2009 776,876,510 645,672,462 526,966,182 56,333,800 2,005,848,954 2,069,450,607 0.288 96.9% 63,601,653 2010 797,902,456 659,381,375 495,273,730 57,459,000 2,010,016,561 2,076,961,686 0.286 96.8% 66,945,125 2011 780,357,859 670,841,459 536,894,082 46,722,282 2,034,815,682 2,103,120,249 0.288 96.8% 68,304,567 2012 781,685,815 685,984,380 524,400,400 48,227,212 2,040,297,807 2,108,802,723 0.287 96.8% 68,504,916 2013 787,762,105 731,842,861 564,154,697 60,279,730 2,144,039,393 2,214,978,356 0.288 96.8% 70,938,963 Source: McCracken County Property Valuation AdministratorNotes: Property in McCracken county is reassessed once every four years on average.-116-TABLE 5CITY OF PADUCAH, KENTUCKYASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTYLAST TEN FISCAL YEARSEstimatedValuePercentAssessedToAssessed ValueReal Estate
TotalFiscal RealDirect RealRealRealRealYear Estate Personal Rate Estate Personal Estate Personal Estate Personal Estate Personal2004 0.300 0.390 0.326 0.394 0.394 0.617 0.605 0.021 0.021 0.190 0.199 2005 0.300 0.390 0.325 0.448 0.448 0.618 0.617 0.021 0.021 0.196 0.226 2006 0.300 0.390 0.325 0.433 0.433 0.631 0.619 0.020 0.021 0.197 0.236 2007 0.275 0.390 0.307 0.433 0.433 0.628 0.631 0.019 0.019 0.197 0.236 2008 0.250 0.390 0.287 0.488 0.488 0.672 0.635 0.018 0.018 0.189 0.219 2009 0.250 0.390 0.288 0.489 0.491 0.672 0.678 0.021 0.023 0.096 0.106 2010 0.250 0.390 0.286 0.504 0.504 0.678 0.678 0.022 0.022 0.095 0.095 2011 0.250 0.390 0.288 0.504 0.504 0.711 0.711 0.016 0.020 0.095 0.098 2012 0.250 0.390 0.287 0.504 0.504 0.747 0.747 0.018 0.030 0.098 0.119 2013 0.250 0.390 0.288 0.504 0.504 0.747 0.747 0.018 0.018 0.096 0.102 Source: McCracken County Property Valuation Administrator and City Tax Levy Ordinance.City Direct RatesMcCracken Co.City of Paducah-117-TABLE 6CITY OF PADUCAH, KENTUCKYPROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS(PER $100 OF ASSESSED VALUE)LAST TEN FISCAL YEARSMcCracken PaducahSchool DistrictsSchool DistrictsJunior CollegeCountyGeneral Fund
(1)(2)
(1)(2)
Assessed Assessed
Taxpayer Valuation Valuation
Kentucky Oaks Mall 50,900,262$ 2.37%41,626,900$ 3.10%
Paducah Medical Investors 13,440,090 0.63%13,440,090 1.00%
Ducmall LLC 13,119,800 0.61%14,225,000 1.06%
Woodstone Enterprises LP 12,429,000 0.58%-
Wal Mart Real Estate Business 10,646,400 0.50%-
Sams Real Estate Business Trust 9,222,955 0.43%-
Computer Services Inc 9,083,185 0.42%14,661,833 1.09%
Wal Mart Store 9,000,000 0.42%34,007,318 2.53%
USF Propco I LLC 8,156,900 0.38%-
Lowes Home Centers, Inc.8,134,350 0.38%13,790,170 1.03%
Sams East Inc - 13,950,726 1.04%
Lourdes Medical Pavilion - 19,071,118 1.42%
TOTALS 144,132,942$ 6.72%164,773,155$ 12.27%
(1) Source - Property Valuation Administration; Assessed value as of January 1, 2012.
(2) Source - Property Valuation Administration; Assessed value as of January 1, 2003.
TABLE 7
CITY OF PADUCAH, KENTUCKY
PRINCIPAL TAXPAYERS - PROPERTY TAX
CURRENT YEAR AND NINE YEARS PRIOR
2013 2004
-118-
Percentage of Percentage of
Total Assessed Total Assessed
Valuation Valuation
Total Collections to Date
(1)
(1) Percent of Percent of
Amount of Levy Total Levy
Collections Collected Collections Collected
3,800,622 3,685,957 97.0% 106,269 3,792,226 99.8%
3,834,188 3,762,592 98.1% 63,654 3,826,246 99.8%
4,013,524 3,911,868 97.5% 91,671 4,003,539 99.8%
3,999,832 3,855,679 96.4% 132,206 3,987,885 99.7%
3,974,451 3,814,940 96.0% 147,056 3,961,996 99.7%
4,201,359 4,017,032 95.6% 162,116 4,179,148 99.5%
4,258,351 4,131,454 97.0% 100,583 4,232,037 99.4%
4,198,057 4,110,973 97.9% 53,844 4,164,817 99.2%
4,228,887 4,119,689 97.4% 55,172 4,174,861 98.7%
4,446,362 4,334,698 97.5%- 4,334,698 97.5%
(1) Includes current year real and personal property tax.
* Source - City of Paducah Finance Department.
TABLE 8
CITY OF PADUCAH, KENTUCKY
SECURED TAX LEVIES AND COLLECTIONS*
LAST TEN FISCAL YEARS
June 30,
Ended
Year
Fiscal Year
Collections
in Subsequent
Years
2005
2004
Collected within the
Fiscal Year of the Levy
Taxes Levied
Fiscal
for the
-119-
2007
2006
2013
2012
2011
2010
2009
2008
(1)Direct
Fiscal Taxes Tax
Year Collected Rate
2004 10,616,222 1.50%
2005 11,183,157 1.50%
2006 14,947,835 2.00% (2)
2007 16,258,946 2.00%
2008 16,535,542 2.00%
2009 16,584,618 2.00%
2010 16,384,509 2.00%
2011 17,345,034 2.00%
2012 18,095,182 2.00%
2013 18,336,124 2.00%
156,287,169
(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%.
-120-
TABLE 9
CITY OF PADUCAH, KENTUCKY
EMPLOYEE LICENSE TAX COLLECTIONS
LAST TEN FISCAL YEARS
(1) Percentage of
Number of Percentage Taxes Total Employee
Filers of Total Collected License Tax
$0 - $50,000 2,553 98.04% 8,895,868 48.52%
$50,001 - $100,000 28 1.08% 2,069,371 11.29%
$100,001 - $500,000 21 0.81% 4,412,746 24.07%
Greater than $500,000 2 0.08% 2,958,139 16.13%
TOTALS 2,604 100.00% 18,336,124$ 100.00%
(1) Percentage of
Number of Percentage Taxes Total Employee
Filers of Total Collected License Tax
$0 - $50,000 1,603 97.80% 7,462,359 54.97%
$50,001 - $100,000 19 1.16% 1,326,451 9.77%
$100,001 - $500,000 15 0.92% 2,907,406 21.42%
Greater than $500,000 2 0.12% 1,879,464 13.84%
TOTALS 1,639 100.00% 13,575,680$ 100.00%
(1) Source - City of Paducah Finance Department - Actual collections during the fiscal year.
*Principal employee license taxpayers seven years prior is the earliest date this statistic is available.
2013
2006
TABLE 10
CITY OF PADUCAH, KENTUCKY
PRINCIPAL EMPLOYEE LICENSE TAXPAYERS
CURRENT YEAR AND SEVEN YEARS PRIOR*
-121-
Taxpayers
By Range
Taxpayers
By Range
(1)Ratio of (3)Reported Net Net Net Debt as (2)General Refunding Total Debt to Percentage NetFiscal Obligation Capital Revenue Primary Actual of Personal Debt PerYear Bonds Lease Bonds GovernmentValue Income Capita2004 13,589,757 3,428,855 - - - 17,018,612 1.02 3.51% 647 2005 13,210,195 3,503,274 - - - 16,713,469 0.99 3.45% 635 2006 18,877,636 3,319,227 - - - 22,196,863 1.27 4.58% 844 2007 18,278,164 3,320,522 - - - 21,598,686 1.17 4.46% 821 2008 17,614,952 2,946,303 - - - 20,561,255 1.04 4.24% 782 2009 19,706,394 5,187,262 - - - 24,893,656 1.20 5.14% 946 2010 25,568,996 5,808,267 - - - 31,377,263 1.51 6.48% 1,193 2011 24,805,676 4,910,742 - - - 29,716,418 1.41 5.91% 1,188 2012 23,616,405 7,320,328 - - - 30,936,733 1.47 6.15% 1,236 2013 22,045,448 6,920,838 - - - 28,966,286 1.31 5.76% 1,158 Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements.(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-122-ImprovementDebtNetPublicDebtImprovementTABLE 11CITY OF PADUCAH, KENTUCKYRATIO OF OUTSTANDING DEBT BY TYPELAST TEN FISCAL YEARSPublic
(1)Ratio ofInfiniti Public NetMedia Floodwall ImprovementBonds toFiscal Building Rehabilitation Project ActualYear Bonds Bonds Bonds Total Value2004 8,620,000 - 5,000,000 - - 30,246 13,589,754 0.82 517 2005 8,380,000 - 4,840,000 - - 9,805 13,210,195 0.78 502 2006 8,130,000 6,100,000 4,680,000 - - 32,364 18,877,636 1.08 718 2007 7,870,000 5,925,000 4,515,000 - - 31,836 18,278,164 0.99 695 2008 7,600,000 5,740,000 4,340,000 - - 65,048 17,614,952 0.89 670 2009 7,320,000 5,545,000 4,160,000 2,774,638 - 93,244 19,706,394 0.95 749 2010 7,030,000 5,340,000 3,975,000 2,671,440 6,645,000 92,444 25,568,996 1.23 972 2011 7,040,000 5,125,000 3,780,000 2,564,948 6,370,000 74,272 24,805,676 1.18 991 2012 6,630,000 4,895,000 3,571,283 2,455,210 6,100,000 35,088 23,616,405 1.12 944 2013 6,220,000 4,655,000 3,320,116 2,341,790 5,825,000 316,458 22,045,448 1.00 881 Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements.(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.Fire PensionFundBondsConvention andArt Center-123-TABLE 12CITY OF PADUCAH, KENTUCKYRATIO OF NET GENERAL BONDED DEBT OUTSTANDINGLAST TEN FISCAL YEARSGeneral Bonded Debt OutstandingCapitaLessResourcesAvailable forDebt Service(2)NetBonds PerBondsPolice and
Estimated
(1) Share of
Reported Percentage Direct and
Debt Applicable Overlapping
Outstanding to the City Debt
City of Paducah 28,966,286$ 100.00% 28,966,286$
Paducah Independent School District 50,172,345 * 100.00% 50,172,345
McCracken County 23,610,675 * 45.50% 10,742,857
McCracken County Board of Education 74,127,598 * 30.90% 22,905,428
Overlapping debt 147,910,618 83,820,630
TOTAL DIRECT AND OVERLAPPING DEBT 176,876,904$112,786,916$
(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.
-124-
TABLE 13
CITY OF PADUCAH, KENTUCKY
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
AS OF JUNE 30, 2013
Net assessed value2,144,039,393$ Add exemption70,938,963 Total assessed value2,214,978,356$ Debt limit - 10% of total assessed (1)221,497,836$ Debt outstanding:General obligation bonds outstanding22,361,906$ Note payable6,920,838 Less debt not subject to limit- Gross bonded debt29,282,744 Less amount available in debt servicefunds316,458 Net bonded indebtedness subject tolimit28,966,286 LEGAL DEBT MARGIN192,531,550$ 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004Debt limit 221,497,836$ 212,207,634$ 210,312,025$ 207,696,169$ 206,945,061$ 197,015,689$ 182,759,543$ 175,093,068$ 168,349,559$ 166,054,868$ Total net debt applicable to limit 28,966,286 30,936,733 29,716,418 31,377,263 24,893,656 20,561,255 21,598,686 22,196,863 16,713,469 17,018,612 LEGAL DEBTMARGIN192,531,550$ 181,270,901$ 180,595,607$ 176,318,906$ 182,051,405$ 176,454,434$ 161,160,857$ 152,896,205$ 151,636,090$ 149,036,256$ Total net debtapplicable to thelimited as a percentage ofdebt limit 13.08% 14.58% 14.13% 15.11% 12.03% 10.44% 11.82% 12.68% 9.93% 10.25%(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 valu 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."-125-Fiscal YearTABLE 14CITY OF PADUCAH, KENTUCKYLEGAL DEBT MARGIN INFORMATIONLAST TEN FISCAL YEARS
(1)(1)
Personal
Income
26,307 484,496,019 18,417 39.9 2,977 5.8%
26,307 484,496,019 18,417 39.9 2,819 6.4%
26,307 484,496,019 18,417 39.9 2,834 5.7%
26,307 484,496,019 18,417 39.9 2,804 5.6%
26,307 484,469,019 18,417 39.9 2,832 6.1%
26,307 484,469,019 18,417 39.9 2,774 9.3%
26,307 484,469,019 18,417 39.9 2,659 8.5%
25,024 503,179,300 20,430 41.4 2,789 8.7%
25,024 503,179,300 20,430 41.4 2,682 8.0%
25,024 503,179,300 20,430 41.4 2,744 8.4%
AgeIncome
2003-2004
2004-2005
2005-2006
2006-2007
2007-2008
2008-2009
2009-2010
2010-2011
Fiscal Year Population
2011-2012
2012-2013
TABLE 15
CITY OF PADUCAH, KENTUCKY
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN FISCAL YEARS
(1) (1) (2)(3)
Per Capita Median School Unemployment
Enrollment Rate
Sources:
(1) Bureau of the Census Count - 2000, 2010
(2) Board of Education; represents elementary and secondary public schools.
(3) Kentucky Cabinet for Human Resources, Department for Employment Services.
-126-
Percentage ofPercentage ofTotalTotalEmployees (1) Employment (2) Employees (1) Employment (2)Western Baptist Hospital 1,801 6.07% 1,660 5.55%Lourdes Hospital 1,511 5.09% 1,500 5.01%Wal Mart 1,123 3.78% 570 2.01%Paducah Public Schools 564 1.90% 600 1.91%West Kentucky Community and Technical College 512 1.72% 270 0.90%City of Paducah 400 1.35% 380 1.27%State of Kentucky 316 1.06% 390 1.30%Parkview Convalescent Center2900.98%LYNX Services2420.82%3901.30%Paxton Media Group2850.95%Computer Services, Inc.2430.82%2800.94%TOTALS7,00223.58%6,32521.14%(1) Source - City of Paducah Finance Department(2) State of Kentucky - Office of Employment and Training. Ratio based on employment within County of McCracken.* Principal employers seven years prior is the earliest date this statistic is available.-127-EmployerTABLE 16CITY OF PADUCAH, KENTUCKYPRINCIPAL EMPLOYERSCURRENT YEAR AND SEVEN YEARS PRIOR*20062013
2013 2012 2011 2010 2009 2008 2007 2006 2005 2004Governmental ActivitiesGeneral governmentGeneral administration 12 12 12 12 12 12 12 12 11 11Finance 11 11 14 14 17 14 14 14 13 13Inspection 0 11 11 10 13 13 13 12 12 12Information systems6666444333Risk/Human resources3311144443Public safetyPolice 88 90 90 90 93 93 93 93 96 94Fire 74 64.5 64 65 69 69 71 76 75 76Public serviceStreets 20 23 23 23 29 29 30 31 28 28Facilities 13.5 11.5 14 34 36 35 34 35 38 39Engineering 7.6 7.675899998Other5564666442Parks and recreation2424247777799Planning and development9999101111111111OtherPaducah Riverfront Dev. Authority1100000000Renaissance3453500000Fleet maintenance 6.5 6.5 6.58677776Business-type ActivitiesSolid waste25.4 25.4 26 27 27 27 27 29 29 29TOTAL PRIMARY GOVERNMENT309314.5318318343340342347349344* Employee budget census.-128-Fiscal YearTABLE 17CITY OF PADUCAH, KENTUCKYCITY FULL-TIME EMPLOYEES BY FUNCTION*Last Ten Fiscal Years
2013 2012 2011 2010 2009 2008 2007 2006 2005 2004General governmentBuilding and electrical permits issued1,202 1,232 1,239 1,263 1,179 1,203 1,411 1,362 1,376 *Business licenses issued 3,966 3,956 3,254 3,397 3,691 3,507 3,500 3,700 * *Public safetyPoliceAdult arrests 2,508 2,753 3,564 3,859 4,454 4,170 5,012 3,827 * *Murder- 3 3 1 5 - - - * *Rape16 14 22 12 20 15 18 15 * *Robberies38 14 31 56 41 49 42 35 * *Burglary142 123 155 245 169 203 208 211 * *Auto theft41 47 54 62 57 60 117 104 * *Arson5 7 6 7 7 8 16 7 * *Traffic accidents1,573 1,666 1,762 1,774 1,368 1,519 1,949 1,815 * *Traffic violations10,168 8,573 7,701 7,240 9,143 7,109 7,323 7,468 * *FireEmergency responses3,054 3,164 3,181 2,603 3,305 2,603 2,456 2,546 3,219 3,638 Fires extinguished 105 138 122 133 136 102 163 181 176 189 Structure fires 33 53 37 49 57 49 40 53 49 64 Incidents with reportedlosses55 89 73 89 85 70 80 91 97 106 Medical/rescue2,151 2,270 2,133 1,690 1,616 1,506 1,369 1,589 1,997 2,266 Tours/in-services/carseats570 524 671 676 907 699 485 485 485 485 Training man hours 9,155 7,232 7,033 8,493 7,716 4,344 1,183 1,418 1,188 965 Inspections1,157 1,417 1,063 985 1,183 1,449 *** *Refuse collectionResidentialRefuse collected (tons 36 34 34 38 32 25 28 34 * *per day)Customers served6478 9488 9,568 9,445 9,435 9,446 9,388 9,368 * *CommercialRefuse collected (tons65 71 71 70 75 83 85 84 * *per day)Customers served805 803 806 810 810 821 832 801 * *Public service911 dispatches92,786 79,333 82,268 79,768 81,525 83,871 76,815 83,348 85,273 91,408Police51,131 43,686 44,794 42,496 40,921 43,420 41,887 47,091 48,275 53,504Fire4,747 3,189 3,226 2,702 2,490 2,720 2,399 2,907 3,424 4,190 Other36,908 32,458 34,248 34,570 38,114 37,731 32,529 33,350 33,574 33,714* Information not available.** Information from city departments.-129-Fiscal YearTABLE 18CITY OF PADUCAH, KENTUCKYOPERATING INDICATORS BY FUNCTION**Last Ten Fiscal Years
2013 2012 2011 2010 2009 2008 2007 2006 2005 2004Public safetyPoliceStations1111111111FireStations5555555555Refuse collectionCollection trucksResidential 10 1099710988#Commercial444545544#Other public worksStreets (miles paved) 218 218 218 218 216 216 216 214 214 213Sidewalks (miles) 47 47 47 47 45 45 45 45 45 45Traffic signals 13 13 13 13 12 11 11 11 11 10Parks and recreationParks 27 27 27 27 27 27 27 18 18 18Acreage 960 1125 1125 1125 960 960 960 325 325 325Community centers2221111111Swimming pools1111111111Public tennis courts6666666666Public golf courses2222222222# Information not available.* Information from city departments.-130-Fiscal YearTABLE 19CITY OF PADUCAH, KENTUCKYCAPITAL ASSET STATISTICS BY FUNCTION*Last Ten Fiscal Years
CITY OF PADUCAH, KENTUCKY
SINGLE AUDIT SECTION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2013
Federal
CFDA Pass-Through
Program Title: Number Grantor Number
Department of Housing and Urban
Development:
Direct Programs:
Section 8 Housing Choice Vouchers 14.871 N/A 2,027,204$
Economic Development Initiative Special Project 14.251 B06NIKY0016 1,078,709
Pass-through Kentucky Governors
Office for Local Development:
Community Development Block Grants 14.228 10-109 343,773
14.228 13-005 93,945
Passed-through Kentucky Housing Corporation:
Home Investment Partnerships Program 14.239 HB12-198-01 107,500
Total Department of Housing and Urban
Development 3,651,131
Department of Justice:
Direct Programs:
Bulletproof Vest Partnership Program 16.607 N/A 600
Edward Byrne Memorial Justice
Assistance Grant Program 16.738 N/A 16,031
Public Safety Partnership and Community
Policing Grants - ARRA 16.710 127,073
Total Department of Justice 143,704
Department of Homeland Security:
Direct Programs:
Assistance to Firefighters Grant 97.044 N/A 29,718
Passed-through Kentucky Division of
Emergency Management:
Hazardous Mitigation Grant Program 97.039 PON2 095 1200003957 1 6,068
Passed-through Kentucky Office of
Homeland Security:
Homeland Security Grant Program 97.067 PO2 094 1300003018 1 37,000
Total Department of Homeland Security 72,786
Department of Transportation:
Passed-through Kentucky Department of
State Police:
State and Community Highway Safety 20.600 PT-12-40 7,692
State and Community Highway Safety 20.600 PT-13-52 11,028
Passed-through Kentucky Governor's
Office of Local Development
Recreational Trails Program 20.205 P02-628-0600003374 452,175
Passed-through Kentucky Transportation Cabinet
Highway Research and Development Program 20.200 1400001907 630,064
Total Department of Transportation 1,100,959
TOTAL EXPENDITURES OF FEDERAL AWARDS 4,968,580$
See accompanying notes to schedule of expenditures of federal awards.
Expenditures
-131-
CITY OF PADUCAH, KENTUCKY
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2013
Federal Grantor/Pass-Through Grantor/
CITY OF PADUCAH, KENTUCKY
NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2013
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:
Federal
CFDA Amount
Program Title Number Provided
Four Rivers Recovery Center 14.228 $ 93,345
-132-
INDEPENDENT AUDITOR’S 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 Gayle Kaler, Mayor
Members of the Board of Commissioners
City of Paducah
Paducah, Kentucky
We have audited, in accordance with the 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, 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, 2013, and the related
notes to the financial statements, which collectively comprise City of Paducah, Kentucky’s basic financial
statements, and have issued our report thereon dated December 20, 2013.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered City of Paducah, Kentucky’s
internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in
the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose
of expressing an opinion on the effectiveness of City of Paducah, Kentucky’s internal control. Accordingly, we do
not express an opinion on the effectiveness of City of Paducah, Kentucky’s internal control.
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. A significant deficiency is a deficiency, or a
combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough
to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section
and was not designed to identify all deficiencies in internal control that might be material weaknesses or,
significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal
control that we consider to be material weaknesses. However, material weaknesses may exist that have not been
identified.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether City of Paducah, Kentucky’s financial statements are free
from 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.
333 Broadway Suite 1001 Paducah, KY 42001
Phone: (270)443-4400 Fax: (270)443-0963 kempercpa.com
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the
results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on
compliance. This report is an integral part of an audit performed in accordance with Government Auditing
Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not
suitable for any other purpose.
Certified Public Accountants and Consultants
Paducah, Kentucky
December 20, 2013
-134-
INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM
AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY OMB CIRCULAR A-133
Honorable Gayle Kaler, Mayor
Members of the Board of Commissioners
City of Paducah
Paducah, Kentucky
Report on Compliance for Each Major Federal Program
We have audited City of Paducah, Kentucky’s compliance with the types of compliance requirements described in
the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on each of City of
Paducah, Kentucky’s major federal programs for the year ended June 30, 2013. 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.
Management’s Responsibility
Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants
applicable to its federal programs.
Auditor’s Responsibility
Our responsibility is to express an opinion on compliance for each of City of Paducah, Kentucky’s major federal
programs based on our audit of the types of compliance requirements referred to above. 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 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 on compliance for each major federal
program. However, our audit does not provide a legal determination of City of Paducah, Kentucky’s compliance.
Opinion on Each Major Federal Program
In our opinion, City of Paducah, Kentucky, complied, in all material respects, with the types of 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, 2013.
Report on Internal Control Over Compliance
Management of City of Paducah, Kentucky, is responsible for establishing and maintaining effective internal
control over compliance with the types of compliance requirements referred to above. In planning and performing
our audit of compliance, we considered City of Paducah, Kentucky’s internal control over compliance with the
types of requirements that could have a direct and material effect on each major federal program to determine the
auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on
compliance for each major federal program and to test and report on internal control over compliance in
accordance with OMB Circular A-133, 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.
333 Broadway Suite 1001 Paducah, KY 42001
Phone: (270)443-4400 Fax: (270)443-0963 kempercpa.com
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 will not be prevented, or detected and corrected, on a timely
basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of
deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that
is less severe than a material weakness in internal control over compliance, yet important enough to merit
attention by those charged with governance.
Our consideration of internal control over compliance 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 compliance that might be
material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over
compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not
been identified.
The purpose of this report on internal control over compliance is solely to describe the scope of our testing of
internal control over compliance and the results of that testing based on the requirements of OMB Circular A-133.
Accordingly, this report is not suitable for any other purpose.
Certified Public Accountants and Consultants
Paducah, Kentucky
December 20, 2013
-136-
CITY OF PADUCAH, KENTUCKY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2013
Section I – Summary of Auditor’s Results
1. The independent auditor’s report expresses an unqualified opinion on the financial statements of
the City of Paducah, Kentucky.
2. No significant deficiencies or material weaknesses relating to the audit of the financial statements
are reported.
3. No instances of noncompliance material to the financial statements of the City of Paducah,
Kentucky were disclosed during the audit.
4. No significant deficiencies or material weaknesses relating to the audit of major federal award
programs are reported.
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 findings to be reported in accordance with Section 510(a) of OMB Circular A-133.
7. The programs tested as major programs included:
Name CFDA
Economic Development Initiative Special
Project, Neighborhood Initiative
14.251
Public Safety Partnership and Community
Policing Grants - ARRA
16.710
Highway Research and Development Program 20.200
Highway Planning and Construction 20.205
8. The threshold used for distinguishing Types A and B programs was $300,000.
9. The City of Paducah, Kentucky did qualify to be audited as a low-risk auditee.
Section II – Findings – Financial Statements Audit
There are no findings related to the financial statements which are required to be reported in accordance
with Government Auditing Standards.
Section III – Findings and Questioned Costs – Major Federal Awards Programs
There are no findings or questioned costs related to the major federal programs which are required to be
reported in accordance with OMB Circular A-133, Section 510(a).
-137-
CITY OF PADUCAH, KENTUCKY
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
YEAR ENDED JUNE 30, 2012
Section II – Findings – Financial Statements Audit
There were no findings related to the financial statements which are required to be reported in accordance
with Government Auditing Standards.
Section III – Findings and Questioned Costs – Major Federal Awards Programs
There were no findings or questioned costs related to the major federal programs which are required to be
reported in accordance with OMB Circular A-133, Section 510(a).
-138-