HomeMy WebLinkAboutJune-30-2014
CITY OF PADUCAH,
KENTUCKY
COMPREHENSIVE
ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2014
FINANCE DEPARTMENT
CITY OF PADUCAH,
KENTUCKY
City of Paducah
Paducah, Kentucky
Comprehensive Annual Financial Report
Year Ended June 30, 2014
Issued by the
Finance Department
CITY OF PADUCAH, KENTUCKY
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2014
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:
Schedule of Changes in the Police and Firefighters’
Pension Trust Fund’s Net Pension Liability and Related Ratio A-1 86
Schedule of Changes in the Appointive Employees’
Pension Trust Fund’s Net Pension Liability and Related Ratio A-2 87
Schedule of Police and Firefighters’ Pension Trust Fund
Contributions and Investment Returns A-3 88
Schedule of Changes in the Appointive Employees’
Pension Trust Fund Contributions and Investment Returns A-4 89
Exhibit No. Page No.
Supplementary Information:
General Capital Improvements Detail Schedule of
Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual B-1 90
Debt Service Fund Detail Schedule of Revenues,
Expenditures, and Changes in Fund Balance - Budget
and Actual B-2 91
Nonmajor Governmental Funds:
Combining Balance Sheet B-3 92-93
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances B-4 94-95
Detail Statement of Revenues, Expenditures, and
Changes in Fund Balance - Budget and Actual:
Municipal Aid Fund B-5 96
Emergency Communication Service Fund B-6 97
Court Awards Fund B-7 98
Small Grant Fund B-8 99
CDBG Grant Fund B-9 100
Home Grant Fund B-10 101
Special Revenue Bond Fund B-11 102
Nonmajor Proprietary Funds:
Nonmajor Enterprise Funds:
Combining Statement of Net Position C-1 103
Combining Statement of Revenues, Expenses and
Changes in Fund Net Position C-2 104
Combining Statement of Cash Flows C-3 105
Internal Service Funds:
Combining Statement of Net Position D-1 106
Combining Statement of Revenues, Expenses, and
Changes in Fund Net Position D-2 107
Combining Statement of Cash Flows D-3 108
Fiduciary Funds:
Combining Statement of Net Position - Pension
Trust Funds E-1 109
Combining Statement of Changes in Net Position -
Pension Trust Funds E-2 110
Combining Statement of Net Position -
Private-purpose Trust Funds E-3 111
Combining Statement of Changes in Net Position -
Private-purpose Trust Funds E-4 112
Statement of Changes in Assets and
Liabilities - Agency Funds E-5 113
Table No. Page No.
Statistical Section:
Net Position by Component 1 114
Changes in Net Position 2 115-116
Fund Balances, Governmental Funds 3 117
Changes in Fund Balances, Governmental Funds 4 118
Assessed and Estimated Actual Value of
Taxable Property 5 119
Table No. Page No.
Statistical Section:
Property Tax Rates - Direct and Overlapping
Governments 6 120
Principal Taxpayers 7 121
Secured Tax Levies and Collections 8 122
Employee License Tax Collections 9 123
Principal Employee License Taxpayers 10 124
Ratio of Outstanding Debt by Type 11 125
Ratio of Net General Bonded Debt Outstanding 12 126
Direct and Overlapping Governmental
Activities Debt 13 127
Legal Debt Margin Information 14 128
Demographic and Economic Statistics 15 129
Principal Employers 16 130
City Full-Time Employees by Function 17 131
Operating Indicators by Function 18 132
Capital Asset Statistics by Function 19 133
Single Audit Section:
Schedule of Expenditures of Federal Awards 134
Notes to the Schedule of Expenditures of Federal
Awards 135
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 136-137
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-133 138-139
Schedule of Findings and Questioned Costs 140
Schedule of Prior Audit Findings 141
CITY OF PADUCAH, KENTUCKY
INTRODUCTORY SECTION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2014
December 8, 2014
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,
2014. 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, 2014,
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
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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, an industrial park with rail and river
access in western McCracken County. So far, 229 acres have been purchased.
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. 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 began at the Paducah campus
in 2014.
Medical Facilities
Paducah serves as the regional medical center for much of the Jackson Purchase Area of Western
Kentucky, a large portion of Southern Illinois, and Northwestern Tennessee. Paducah’s medical industry
has almost every major medical specialty represented in the physician population. The medical industry,
represented by Lourdes Hospital and Western Baptist Hospital, provides over 550 beds for medical needs.
The two largest hospitals, together, employ over 3,000 persons.
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Recreation And Culture
Citizens have available a wide range of recreational and cultural activities which cater to diverse tastes.
Area residents may choose from fishing on nearby Kentucky and Barkley Lakes to enjoying the
performing arts. City parks provide areas for baseball, softball, golf, football, tennis, disc golf, skate
boarding, soccer, hiking and picnicking. The Parks Services Department offers a substantial number of
activities for people of all ages.
The ‘Dogwood Festival’, held in April, highlights the coming of spring in Paducah. Residents are
encouraged to spotlight their trees to illuminate a driving tour to celebrate an abundance of dogwood
trees.
The LowerTown Art and Music Festival is uniquely showcased within the borders of Paducah’s 140-
year-old historic neighborhood. The LowerTown Art and Music Festival is an outdoor-juried show in its
12th 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 $35,000 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.
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The ‘Luther F. Carson Four Rivers Center for the Performing Arts’ 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 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 307 full-time employees as of June 30, 2014. 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.
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
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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 FY2014, a few 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 FY2014
this contribution was $417 thousand. This amount was $477 thousand in FY2013.
Reserve Requirement. As part of the City’s annual budget process, financial policies are reviewed and
amended as necessary. In FY2014, in conjunction with the approval of the annual budget, the General
Fund restricted reserve requirement was raised from 8% to 10%.
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: community redevelopment, economic development,
infrastructure capital investment, and property tax relief. During the FY2014 budget process, the
Commission reviewed numerous decision packages proposed for the Investment Fund Budget;
expenditures totaling approximately $5 million were appropriated.
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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 and levee system protecting a large portion of the
Paducah-McCracken area is approaching 70 years of age. It is still in good condition long beyond its
design life; however, it is in need of necessary repairs. 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. It is anticipated the USACE will cover
65% of the expenses incurred and the City will be responsible for the remainder 35% by payment or
credited by in-kind services. The USACE and the City are now initiating Preconstruction Engineering
and Design (PED) and preparing plans and specifications for the reconstruction projects as listed within
the Feasibility Report. The estimated City’s portion for the total project costs is approximately $6
million. In FY2009, the City proceeded with making the seriously needed repairs to the corrugated metal
pipes under the Floodwall by borrowing around $2 million, of which the USACE will allow in-kind credit
for this expense.
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 has been completed. As of June 30, 2014, Phase 1a of the riverfront development project, which
consists of installation of the pilings and the placement of stone for mass fill, was completed. At this
time, plans and specifications for Phase 1b are being finalized. This phase will include the gangway,
transient dock, wave attenuator, and the completion of the mass fill. Construction for this portion of the
project will be bid out during this winter. Once construction is complete, operating costs will be a long-
term planning consideration.
City Hall Structure. In May 2014, the City Commission heard the findings of an engineering firm they
engaged to perform an assessment of City Hall’s structure, layout, security, seismic upgrade requirements,
and renovation possibilities. This study shows that the 61,000 square foot building which opened in 1964
is showing significant deterioration in its concrete roof canopy and with many of its electrical and
mechanical systems. With these impending costly repairs, the Commission now faces the decision of
whether to renovate the existing City Hall building or design a new facility. Either decision that is made
will have a significant financial impact.
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
decreased slightly in comparison to the prior year, with 28,469 persons employed (McCracken County) as
of June 30, 2014.
The June 2014 unemployment rate was 8.2% (McCracken County), which is a decrease from 8.4% in the
prior year, and exceeds the June 2014 federal unemployment rate of 6.1%. 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 1,251 for fiscal year 2014 valued at $54 million, which is up nearly $5 million from fiscal
year 2013.
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INDEPENDENT AUDIT
Kentucky Revised Statute 91 A-040 requires an annual audit of each fund of the City by an auditor of
public accounts or a certified public accountant. The independent certified public accounting firm of
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.
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, 2013. This was the twenty-third
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 Brandon Barnhill
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
Human Resources/Risk Manager Cindy Medford
Public Information Pam Spencer
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CITY OF PADUCAH, KENTUCKY
FINANCIAL SECTION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2014
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, 2014, and the related notes to the financial statements,
which collectively comprise the City’s basic financial statements as listed in the table of contents.
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 did not audit the financial
statements of the following component unit: Paducah Water Works, which represent 100 percent, 100 percent, and 100
percent, respectively, of the assets, net position and revenues of the Component Units column. These financial
statements were audited by another auditor whose report has been furnished to us, and our opinions, insofar as it relates
to the amounts included for Paducah Water Works, discretely presented component unit, is based solely on the reports
of the other auditor. We conducted our audit in accordance with auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued
by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the 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, 2014,
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 86-89 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, budgetary comparison schedules,
combining and individual nonmajor fund, budgetary comparison for the nonmajor funds, 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 budgetary comparison schedules, combining and individual nonmajor fund, budgetary comparison for the
nonmajor funds, 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 budgetary comparison schedules, combining and individual nonmajor fund, budgetary comparison for the
nonmajor funds, 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 8, 2014, 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 8, 2014
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CITY OF PADUCAH, KENTUCKY
REQUIRED SUPPLEMENTARY INFORMATION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2014
- 13 -
CITY OF PADUCAH, KENTUCKY
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2014
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, 2014. 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 $61.1 million at the close of the 2013-2014 fiscal year. Of this
amount, $17.2 million (unrestricted net position) may be used to meet City government’s ongoing
obligations to citizens and creditors.
Total net position increased $7,689,420.
At fiscal year end, City governmental funds reported a combined ending fund balance of $20.8
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 balance was $12.7 million and is
available for spending at the City’s discretion. Cash makes up approximately $8.6 million. When
compared to final total appropriations, the General Fund cash balance is 27%.
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 92-102.
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
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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. 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 103-105 of this report. Individual data for the
internal service funds is likewise presented in the form of combining statements on pages 106-
108 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 109-112 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 92-112 of this report.
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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 $61.1 million as of June 30, 2014.
For FY2014, the largest portion of the City’s net position (67%) 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 (5%) represents resources that are subject to external
restrictions on how they may be used. The remaining balance of unrestricted net position (28%)
may be used to meet the City’s ongoing obligations to citizens and creditors.
As of June 30, 2014, 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
2014
2013
(Restated) 2014 2013 2014
2013
(Restated)
Current Assets $ 42,910,707 $ 42,403,160 $ 6,867,521 $ 6,387,185 $ 49,778,228 $ 48,790,345
Capital Assets 50,620,162 42,383,943 1,210,415 1,232,735 51,830,577 43,616,678
Other noncurrent assets 4,333,300 4,906,745 - - 4,333,300 4,906,745
Total Assets 97,864,169 89,693,848 8,077,936 7,619,920 105,942,105 97,313,768
Deferred Outflows of Resources 124,131 49,884 -- 124,131 49,884
Current Liabilities 12,051,940 12,462,807 482,116 468,277 12,534,056 12,931,084
Noncurrent liabilities 30,335,342 28,931,282 2,110,888 2,104,756 32,446,230 31,036,038
Total liabilities 42,387,282 41,394,089 2,593,004 2,573,033 44,980,286 43,967,122
Net position:
Invested in capital assets, net of
related debt 39,844,772 33,365,112 1,210,415 1,232,735 41,055,187 34,597,847
Restricted 2,374,180 1,586,181 437,483 385,885 2,811,663 1,972,066
Unrestricted 13,382,066 13,398,350 3,837,034 3,428,267 17,219,100 16,826,617
TOTAL NET POSITION $ 55,601,018 $ 48,349,643 $ 5,484,932 $ 5,046,887 $ 61,085,950 $ 53,396,530
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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
$4.5 million in revenue each year, which is used mostly for capital investment and economic
development related activities.
For FY2014, the City had a significant increase in net position of $7.7 million. The bulk of that
increase occurred for the following reasons:
This is the second consecutive year of heavy capital development that was funded primarily
with grant funding. Over $3.5 million dollars was received and expended in FY2014 for
riverfront development activities, including a new boat launch and transient boat dock. At
the end of FY2014 the boat launch and Phase 1A of the transient boat dock were
substantially complete.
In FY2014, the City and McCracken County began the construction of a 30,000 square foot
building to be leased to TeleTech Services Corporation. The City borrowed $1.35 million
for the project and is acting as the “agent” on this project. The County and Paducah
Economic Development together have contributed nearly $2 million toward the project,
leading to an increase in 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, 2014
and 2013. Governmental activities increased the City’s net position by $7,251,375. Business-type
activities increased the City’s net position by $438,045.
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City of Paducah, Kentucky
Changes in Net Position
June 30
Governmental Activities Business-Type Activities Total Primary Government
Revenues: 2014
2013
(Restated) 2014 2013 2014
2013
(Restated)
Program revenues:
Charges for services $ 3,002,214 $ 2,950,117 $ 4,451,325 $ 4,410,325 $ 7,453,539 $ 7,360,442
Operating grants/
contributions 5,419,715 3,273,483 1,956,995
1,727,238 7,376,710 5,000,721
Capital grants/
contributions 4,136,749 2,165,548 - - 4,136,749 2,165,548
General Revenues:
Property taxes 4,622,292 4,502,276 - - 4,622,292 4,502,276
Franchise taxes 178,729 199,134 - - 178,729 199,134
Telecommunications tax 691,916 709,852 - - 691,916 709,852
Insurance premium tax 3,831,792 3,863,464 - - 3,831,792 3,863,464
Vehicle tax 658,289 626,772 - - 658,289 626,772
Bank tax 225,373 243,203 - - 225,373 243,203
Gross receipts license tax 4,444,440 4,391,352 - - 4,444,440 4,391,352
Employee license tax 18,114,396 18,336,124 - - 18,114,396 18,336,124
Other taxes 656,828 654,734 - - 656,828 654,734
Intergovernmental revenue 374,198 365,348 - - 374,198 365,348
Unrestricted investment
earnings 232,204 211,306 48,255 49,382 280,459 260,688
Gain on sale of capital assets (482,137) 383,370 13,422 52,710 (468,715) 436,080
Miscellaneous - (82,992)103,260 82,992 103,260 -
Total revenues 46,106,998 42,793,091 6,573,257 6,322,647 52,680,255 49,115,738
Expenses:
General Government 8,005,619 8,189,896 - - 8,005,619 8,189,896
Public safety 18,439,670 18,204,945 - - 18,439,670 18,204,945
Public service 6,982,536 6,167,510 - - 6,982,536 6,167,510
Park & recreation 2,750,531 2,710,659 - - 2,750,531 2,710,659
Planning & development 1,805,379 1,463,659 - - 1,805,379 1,463,659
Interest on long-term debt 1,084,016 1,066,876 - - 1,084,016 1,066,876
Solid Waste - - 3,985,233 3,967,490 3,985,233 3,967,490
Section Eight Housing - - 1,855,869 2,032,843 1,855,869 2,032,843
Civic Center - - 81,982 78,000 81,982 78,000
TISA - - - - - -
Total expenses 39,067,751 37,803,545 5,923,084 6,078,333 44,990,835 43,881,878
Increase (decrease) in Net
position before transfers 7,039,247 4,989,546 650,173 244,314 7,689,420 5,233,860
Transfers 212,128 485,138 (212,128) (485,138) - -
Change in net position 7,251,375 5,474,684 438,045 (240,824) 7,689,420 5,233,860
Net position, July 1, restated 48,349,643 42,874,959 5,046,887 5,287,711 53,396,530 48,162,670
NET POSITION, JUNE 30 $ 55,601,018 $ 48,349,643 $ 5,484,932 $ 5,046,887 $ 61,085,950 $ 53,396,530
- 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 2014.
- 20 -
In fiscal year 2014, the City derived 72% 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 $26.4 million. This category of revenue decreased .8% from
fiscal year 2013. All revenue sources within this category were fairly flat compared to the prior
year. Business license was the one category that increased, which was by $53,088 or 1.2%.
Insurance premium tax and payroll withholding tax both decreased, by $31,672 (.8%) and $221,728
(1.2%), respectively. None of these changes appear to be the result of one significant taxpayer’s
activity, but the result of multiple entities having modest increases/decreases. Property taxes
continue to be a stable source of revenue, comprising 10% of total revenue in FY2014.
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 2014, business-type activities as a whole had an increase in net position
of $438,045. 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.
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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 $20.8 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 $904,252 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
$1,758,934 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, $12.7 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 $8.6 million available as cash; the balance is tied up in other assets
including accounts receivable and property taxes collectible. City fiscal policy (Ordinance 2013-6-
8042) 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 $10.2 million as unreserved for
fiscal year 2014.
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 ($12.7 million) represents 40% of expenditures and transfers out ($31.4 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 $1.8 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 FY2014 budget included appropriations in excess of anticipated
revenue by $791 thousand to fulfill ongoing commitments as well as fund several large multi-year
projects, including future hotel site development, riverfront development, continued support of
economic development agencies, street & sidewalk resurfacing, and community development in the
Fountain Avenue neighborhood. Actual results of an $830 thousand decrease in fund balance reflect
the net result of a few different issues. First of all, payroll tax revenue was slightly less than
anticipated, coming in at approximately $147 thousand under the original budget. Secondly, there
were a few budgeted expenditures that did not take place, including a $100,000 appropriation for a
contractual agreement that did not occur due to the lack of performance by the other party.
Fund balance in the General Capital Improvements fund increased by approximately $151 thousand
from the prior year to $3.2 million. The increase is due to funds set aside to complete capital
projects in FY2015. 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.
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Net position of the respective proprietary funds are:
Solid Waste $4,341,775
Section Eight Housing 440,619
Civic Center 142,182
Combined total net asset change for the three funds was an increase of $346,069, broken down as
follows: Solid Waste ($311 thousand increase), Section Eight Housing ($48 thousand increase), and
Civic Center ($13 thousand decrease). The largest proprietary fund, Solid Waste, was discussed
under Business Type Activities (Section III-C).
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 $ - $ 122
Finance - 29
Planning 16 -
Radio and Rental Property - 88
Human Rights - 4
Information Systems - 62
Human Resources/Risk Management - 7
Police - 74
Fire - 154
Public Works - 87
Engineering Services 66 -
Recreation - 103
PRDA - 4
Other 881 -
General Administration had a decrease in appropriations of $122 thousand. The majority of this
decrease was due to unutilized contingency funds.
Fire and Recreation both experienced decreases in excess of $100 thousand. Recreation had some
programs that were below capacity. In addition, they only had their after-school program for the
first semester and used year-round employees to staff the program rather than part-time labor. Fire’s
decrease resulted from the combination of several line items from their operating budget including a
renegotiated phone contract and fewer than expected fleet repair charges, to name a few.
Engineering had an increase in appropriations of $66 thousand. There were unanticipated repairs to
one of the floodwall pump stations totaling over $160 thousand. This was partially offset by an
unfilled position in the administrative division.
The primary components of the “Other” department category are operating transfers out, which are
typically made to the capital project fund. Large unanticipated interfund transfers were made this
year to fund a downtown development project ($200,000) and establish funding for an upcoming
hotel project loan fund ($200,000). A transfer was also made to increase the cash reserve in the debt
service fund in the amount of $150,000.
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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,
2014, is $52 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 2014, project and equipment additions totaled over $16 million, with $10 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 2014, are shown in the following table:
Transient Boat Dock (Construction in Progress) $3,799,187
TeleTech Building (Construction in Progress) 3,057,435
Riverfront – Boat Launch 2,903,021
Noble Park Pool Renovation 1,386,325
(2) Pumper Trucks 838,693
Olivet Church Road ROW & Utility Relocation (Construction in Progress) 517,150
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
2014 2013 2014 2013 2014 2013
Land $ 10,408,932 $ 10,376,432 $ 62,152 $ 62,152 $ 10,471,084 $ 10,438,584
Land improvements 3,716,137 2,509,348 - - 3,716,137 2,509,348
Construction in
progress 12,299,347 6,527,866 - - 12,299,347 6,527,866
Buildings and
improvements 6,162,826 6,868,297 283,659 299,337 6,446,485 7,167,634
Infrastructure 13,413,098 11,905,517 - - 13,413,098 11,905,517
Equipment 1,337,857 1,468,264 463,695 285,541 1,801,552 1,753,805
Furnishings and
fixtures 16,165 1,265 - - 16,165 1,265
Vehicles 3,265,800 2,726,954 400,909 585,705 3,666,709 3,312,659
TOTALS $ 50,620,162 $ 42,383,943 $ 1,210,415 $ 1,232,735 $ 51,830,577 $43,616,678
Additional information on City capital assets can be found in Note 3 in the notes to financial
statements on pages 66-69.
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B. Long-Term Debt
At year-end, the City had $31,225,647 in outstanding bonds and notes payable, compared to
$29,275,256 at June 30, 2013 with maturities extending through 2032.
Governmental Activities
2014 2013
Kentucky League of Cities – 2003 $1,849,709 $2,024,294
Police/Firefighter Pension Fund Liability – 2006 4,400,000 4,655,000
Floodwall Rehabilitation – 2008 2,224,863 2,341,790
Convention Center Renovation – 2008 2,081,250 2,181,250
Public Improvement Projects – 2010 - 5,825,000
Refinanced Convention Center – 2010 5,805,000 6,220,000
Margaret Hank Agreement – 2011 136,637 151,812
Refinanced Infiniti Media Building – 2011 3,100,000 3,370,000
Murray State University Agreement – 2011 2,451,760 2,563,482
Public Pool Renovations – 2013 1,120,000 -
Economic Development – 2013 2,475,000 -
Refinanced Public Projects – 2014 5,460,000 -
Discounts/Premiums - Net 121,428 (57,372)
TOTALS $31,225,647 $29,275,256
During the year, the City had the following new debt issues:
Public Improvement Projects – Refinance. In May 2014, a $5.46 million general obligation was
issued to refund $5.545 million of outstanding 2010 series bonds. The 2010 bonds were 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.
Economic Development. In September 2013, $2.475 million in general obligation taxable bonds
were issued to finance a portion of construction of 1) improvements to an industrial distribution
center and 2) an approximately 30,000 square foot building. Each of these buildings are being
utilized for separate economic development projects.
Public Pool Renovations. In September 2013, $1.12 million in general obligation bonds were issued
to finance Noble Park’s pool renovation project.
Debt issues prior to July 1, 2013 are described below:
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.
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.
- 26 -
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.
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.
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.
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.
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.
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).
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 $227,059,775. 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 2014, only 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. Police and Fire Pension Bonds – Refinance. In July 2014, the City issued advance refunding bond
Series 2014B for refunding of the Police and Firefighters Pension Plan Series 2005 bonds maturing
on or after November 1, 2016.
B. Hotel/Showroom Renovation. In January 2015, the City plans to issue $2.265 million (Series
2014C) in in general obligation bonds to finance the renovation of convention center space
(formerly known as “the showroom”) located at the Julian Carroll Convention Center. Also, in
January 2015, the City plans to issue $4.325 million (Series 2014D) in taxable general obligation
- 27 -
bonds to pay a portion of the costs of the acquisition and construction of a hotel to be located
adjacent to the Julian Carroll Convention Center. This hotel will be leased to Paducah Convention
Hotel, LLC.
C. 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
CERS for both Non-Hazardous and Hazardous employees for selected fiscal years 1995, 2005, and
2014.
CERS Employer Contributions
Non-Hazardous Hazardous
FY Rate Amount % Chg Rate Amount % Chg
1995 8.82% $396,690 18.46% $879,995
2005 8.48% $584,660 47% 22.08% $1,541,057 75%
2014 18.89% $1,415,877 142% 35.70% $2,974,471 93%
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.
D. 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
- 28 -
2014 actuary study shows that the PFPF unfunded pension liability is approximately $3.8 million as
the following chart displays.
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,
2014, indicates the minimum actuarially sound contribution for FY2015 will be $391,468.
VIII. Requests for Information
This financial report is designed to provide a general financial overview for those interested in the City
of Paducah government finances. Questions or requests for additional financial information may be
addressed to Jonathan Perkins, Finance Director, City of Paducah, 300 South 5th Street, Paducah, KY
42003.
CITY OF PADUCAH, KENTUCKY
BASIC FINANCIAL STATEMENTS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2014
Exhibit 1
Component
Unit
Paducah
Governmental Business-type Water Works
Current Assets:Activities Activities Total Authority
Cash and cash equivalents 22,517,630$ 5,599,630$ 28,117,260$ 1,254,787$
Receivables, net:
Notes 1,261,375 - 1,261,375 -
Accounts 7,064,776 549,858 7,614,634 591,627
Grants 385,872 - 385,872 -
Interest 11,492 - 11,492 -
Property tax 5,004,528 - 5,004,528 -
Accrued unbilled revenues - - - 1,099,201
Internal balances (560,356) 560,356 - -
Inventory 1,562,395 - 1,562,395 630,723
Prepaid pension obligation 5,410,532 - 5,410,532 -
Prepaid expenses 203,677 157,677 361,354 104,397
Other current assets 48,786 - 48,786 873,089
Total current assets 42,910,707 6,867,521 49,778,228 4,553,824
Noncurrent Assets:
Notes receivable 4,333,300 - 4,333,300 -
Capital assets:
Land and construction in progress 22,708,279 62,152 22,770,431 2,685,360
Depreciable capital assets 27,911,883 1,148,263 29,060,146 45,858,423
Other assets - - - 4,561,661
Total noncurrent assets 54,953,462 1,210,415 56,163,877 53,105,444
Total assets 97,864,169 8,077,936 105,942,105 57,659,268
Deferred Outflows of Resources:
Deferred charges on refunding 124,131 - 124,131
Total deferred outflows of resources 124,131 - 124,131 -
CITY OF PADUCAH, KENTUCKY
STATEMENT OF NET POSITION
JUNE 30, 2014
ASSETS
-29-
Primary Government
Component
Unit
Paducah
Governmental Business-type Water Works
Current Liabilities:Activities Activities Total Authority
Voucher and accounts payable 2,636,630 251,830 2,888,460 747,382
Cash deficit - - - -
Line of credit 279,301 - 279,301 -
Accrued payables 1,012,302 60,587 1,072,889 782,946
Unearned revenue 4,926,350 79,190 5,005,540 -
Accrued compensated absences 1,015,737 90,509 1,106,246 239,106
Accrued interest 103,092 - 103,092 -
Notes payable due within one year 417,876 - 417,876 341,179
Bonds payable due within one year 1,660,652 - 1,660,652 -
Other current liabilities - - - 233,235
Total current liabilities 12,051,940 482,116 12,534,056 2,343,848
Noncurrent Liabilities:
Accrued compensated absences 1,188,223 48,388 1,236,611 -
Landfill post-closure costs - 2,062,500 2,062,500 -
Notes payable 6,101,480 - 6,101,480 5,948,187
Bonds payable 23,045,639 - 23,045,639 -
Total noncurrent liabilities 30,335,342 2,110,888 32,446,230 5,948,187
Total liabilities 42,387,282 2,593,004 44,980,286 8,292,035
Invested in capital assets, net
of related debt 39,844,772 1,210,415 41,055,187 42,254,417
Restricted for:
Housing and development projects 83,792 437,483 521,275 -
Capital projects & infrastructure 2,168,201 - 2,168,201 -
Public safety 122,187 - 122,187 -
Unrestricted 13,382,066 3,837,034 17,219,100 7,112,816
TOTAL NET POSITION 55,601,018$ 5,484,932$ 61,085,950$ 49,367,233$
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 8,005,619 1,672,552 697,183$ 3,596,995$
Public safety 18,439,670 264,143 769,079 539,754
Public service 6,982,536 960,271 1,468,652 -
Parks and recreation 2,750,531 105,248 - -
Planning and development 1,805,379 - 2,332,436 -
Interest on long-term debt 1,084,016 - 152,365 -
Total governmental activities (See Note 1) 39,067,751 3,002,214 5,419,715 4,136,749
Business-type activities:
Solid Waste 3,985,233 4,410,059 55,112 -
Section Eight Housing 1,855,869 - 1,901,883 -
Civic Center 81,982 41,266 - -
Total business-type activities 5,923,084 4,451,325 1,956,995 -
TOTAL PRIMARY GOVERNMENT 44,990,835$ 7,453,539$ 7,376,710$ 4,136,749$
Component Unit:
Paducah Water Works Authority 8,983,272$ 10,387,966$ -$ 430,100$
TOTAL COMPONENT UNITS 8,983,272$ 10,387,966$ -$ 430,100$
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 as restated (Note 10)
Net position - ending
See accompanying notes to the basic financial statements.
CITY OF PADUCAH, KENTUCKY
Grants and
Contributions
FOR THE YEAR ENDED JUNE 30, 2014
STATEMENT OF ACTIVITIES
Program Revenues
Capital
-31-
Component Unit
Governmental Business-type Paducah Water
Activities Activities Total Works Authority
(2,038,889)$ -$ (2,038,889)$ -$
(16,866,694) - (16,866,694) -
(4,553,613) - (4,553,613) -
(2,645,283) - (2,645,283) -
527,057 - 527,057 -
(931,651) - (931,651) -
(26,509,073) - (26,509,073) -
- 479,938 479,938 -
- 46,014 46,014 -
- (40,716) (40,716) -
- 485,236 485,236 -
(26,509,073) 485,236 (26,023,837) -
- - - 1,834,794
- - - 1,834,794
4,622,292 - 4,622,292 -
178,729 - 178,729 -
691,916 - 691,916 -
3,831,792 - 3,831,792 -
658,289 - 658,289 -
225,373 - 225,373 -
4,444,440 - 4,444,440 -
18,114,396 - 18,114,396 -
656,828 - 656,828 -
374,198 - 374,198 -
232,204 48,255 280,459 15,849
(482,137) 13,422 (468,715) 60,017
- 103,260 103,260 3,759
33,548,320 164,937 33,713,257 79,625
212,128 (212,128) - -
33,760,448 (47,191) 33,713,257 79,625
7,251,375 438,045 7,689,420 1,914,419
48,349,643 5,046,887 53,396,530 47,452,814
55,601,018$ 5,484,932$ 61,085,950$ 49,367,233$
Net (Expense) Revenue and Changes in Net Assets
Primary Government
-32-
Exhibit 3
Special
General
Fund
Assets
Cash and cash equivalents 8,610,392$ 1,041,762$ 4,076,872$
Receivables:
Accounts 6,767,832 - 914,669
Grants 63,983 - 105,606
Property taxes (net of
allowances for uncollectibles)5,073,528 - -
Due from other funds 221,069 1,117,172 -
Total Assets 20,736,804$ 2,158,934$ 5,097,147$
Liabilities
Voucher and accounts payable 660,847$ -$ 1,081,066$
Line of credit - - 164,669
Accrued payroll and payroll taxes 939,410 - -
Due to other funds 1,117,172 400,000 500,000
Unearned revenue - other 2,084 - 145,000
Accrued compensated absences 337,499 - -
Total liabilities 3,057,012 400,000 1,890,735
Deferred Inflows of Resources
Unavailable revenue-property taxes 4,985,182 - -
Fund Balances:
Restricted for:
Highways and streets - - -
Public safety - - -
Program purposes - - -
Capital improvements - - -
Committed for:
Capital improvements - 1,758,934 -
Assigned for:
Capital improvements - - 3,206,412
Public safety - - -
Debt service - - -
Unassigned:
General Fund 12,694,610 - -
Total fund balances 12,694,610 1,758,934 3,206,412
TOTAL LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES 20,736,804$ 2,158,934$ 5,097,147$
See accompanying notes to the basic financial statements.
-33-
Fund Improvements
CITY OF PADUCAH, KENTUCKY
BALANCE SHEET
GOVERNMENTAL FUNDS
JUNE 30, 2014
Revenue
Investment
General
Capital
Debt
Service
Fund
503,817$ 2,754,276$ 16,987,119$
- 260,612 7,943,113
- 216,283 385,872
- - 5,073,528
- 500,000 1,838,241
503,817$ 3,731,171$ 32,227,873$
-$ 716,257$ 2,458,170$
- 114,633 279,302
- 54,943 994,353
- 172,283 2,189,455
- - 147,084
- - 337,499
- 1,058,116 6,405,863
- - 4,985,182
- 904,252 904,252
- 122,187 122,187
- 83,792 83,792
- 1,263,949 1,263,949
- - 1,758,934
- - 3,206,412
- 298,875 298,875
503,817 - 503,817
- - 12,694,610
503,817 2,673,055 20,836,828
503,817$ 3,731,171$ 32,227,873$
-34-
Governmental
Nonmajor
Governmental
Funds
Total
Funds
Exhibit 4
Total fund balance - total governmental funds 20,836,828$
Amounts reported for governmental activities in the Statement
of Net Position are different because:
160,038
4,452,500
11,492
1,497,659
5,410,532
50,620,162
2,703
(1,808,457)
(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-
Premiums, discounts and deferred charges on refunding debt used in
governmental activities are not current financial resources and,
therefore, are not reported in 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, 2014
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)
(103,092)$
$ 2,078,528
29,025,692 (31,104,220)
6,462,761$
(277,532)
(560,356) 5,624,873
NET POSITION OF GOVERNMENTAL ACTIVITIES 55,601,018$
See accompanying notes to the basic financial statements
JUNE 30, 2014
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 ($31,104,220) are not due and payable in the
current period and, therefore, they are not reported in the
governmentalfunds balance sheet. See Note 3 for detail. The long-
term liabilities are:
CITY OF PADUCAH, KENTUCKY
RECONCILIATION OF THE GOVERNMENTAL FUNDS
BALANCE SHEET TO STATEMENT OF NET POSITION
-36-
Due within one year
Due after one year
Current assets
Net amount allocated to
Internal service funds are used by managementto charge the costs of
certain activities, such as insurance and fleet management, to
individual funds. The assets and liabilities of the Internal Service
Funds (net of amount allocated to business-type activities) not
included in other reconciling items are:
Current liabilities
Exhibit 5
Special
Revenue General
General Investment Capital
Revenues:Fund Fund Improvements
Taxes 6,297,086$ -$ -$
Licenses 22,517,253 4,469,857 -
Charges for services 587,071 - -
Intergovernmental - - 1,350,029
Grants 723,957 - 4,050,116
Interest 167,379 - -
Property upkeep, rentals, sales and other 1,009,510 3,701 1,314,048
Total revenues 31,302,256 4,473,558 6,714,193
Expenditures:
Current operations:
General government 4,311,103 - -
Public safety 16,802,514 - -
Public service 4,802,274 - -
Parks and recreation 2,763,773 - -
Planning and development - 718,199 -
Intergovernmental and other 640,452 - -
Capital outlay - - 11,926,435
Debt service:
Principal requirement - - -
Debt issuance costs - - -
Interest requirement - - -
Total expenditures 29,320,116 718,199 11,926,435
Excess (deficiency) of revenues over expenditures 1,982,140 3,755,359 (5,212,242)
Other Financing Sources (Uses):
Proceeds from debt issued - - -
Payment to refunded bond escrow agent - - -
Premium on debt issued - - -
Discount on debt issued - - -
Transfers in 490,000 2,500 5,363,404
Transfers out (2,089,095) (4,588,024) -
Total other financing sources (uses)(1,599,095) (4,585,524) 5,363,404
Net change in fund balances 383,045 (830,165) 151,162
Fund balances - beginning 12,311,565 2,589,099 3,055,250
Fund balances - ending 12,694,610$ 1,758,934$ 3,206,412$
See accompanying notes to the basic financial statements.
-37-
CITY OF PADUCAH, KENTUCKY
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2014
Debt
Service
Fund
-$ 416,803$ 6,713,889$
- - 26,987,110
- 264,009 851,080
677,255 597,079 2,624,363
84,467 1,065,111 5,923,651
- 32,204 199,583
202,898 741,703 3,271,860
964,620 3,116,909 46,571,536
- - 4,311,103
- 1,672,957 18,475,471
- 1,521,207 6,323,481
- - 2,763,773
- 1,368,328 2,086,527
- - 640,452
- - 11,926,435
1,748,233 - 1,748,233
- 109,292 109,292
1,078,357 8,509 1,086,866
2,826,590 4,680,293 49,471,633
(1,861,970) (1,563,384) (2,900,097)
- 9,055,000 9,055,000
- (5,627,447) (5,627,447)
- 220,683 220,683
- (53,529) (53,529)
2,011,970 1,280,887 9,148,761
- (2,522,000) (9,199,119)
2,011,970 2,353,594 3,544,349
150,000 790,210 644,252
353,817 1,882,845 20,192,576
503,817$ 2,673,055$ 20,836,828$
-38-
Governmental
Total
FundsFunds
Nonmajor
Governmental
Exhibit 6
Net change in fund balances - total governmental fund 644,252$
Amounts reported for governmental activities in the Statement
of Activities are different because:
834,152
(672,725)
11,814,543
(337,954)
(27,278)
(108,567)
(9,055,000)
(522,218)
(Continued)
Proceeds of the issuance of debt provides current financial resources and is
reported as an other financing source in governmental funds.
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.
Payments on property taxes recognized as revenues when received in the
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.
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.
FOR THE YEAR ENDED JUNE 30, 2014
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
$970,817.
-39-
Exhibit 6
(Continued)
(3,054,114)$
7,283,408
31,023
(94,444)
(104,555)
1,063,814$
(91,976)
Capital Outlays (970,817)
619,832 620,853
CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES 7,251,375$
See accompanying notes to the basic financial statements.
-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
Governmental funds report the effect of bond premiums,discounts and refunding
costs when debt is issued, whereas these amounts are deferred and amortized in
the Statement of Activities.
Net of amount allocated to
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2014
CITY OF PADUCAH, KENTUCKY
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 $619,832.
Principal payments of debt require the use of current financial resources and,
therefore, are reported as expenditures in governmental funds. However,
principal payments of debt do not affect net assets in the government-wide
Statement of Activities.
TO THE STATEMENT OF ACTIVITIES
Accrued interest payments on debt do not require the use of current financial
resources. Accruedinterest is reported as an expenditurein the government-wide
Statement of Activities.
Exhibit 7
Variance with
Final Budget
Positive
Original Final (Negative)
Revenues:
Taxes:
Real and personal,
current year 4,905,500$ 5,096,280$ 5,096,289$ 9$
Real and personal,
prior year 145,000 139,865 139,866 1
Franchise 156,000 178,725 178,729 4
Bank taxes 240,000 225,370 225,373 3
In lieu of tax payment 312,000 299,360 299,367 7
Penalty, interest and
advertising 44,000 54,990 54,998 8
Paducah Junior College
tax collections - 302,460 302,463 3
Total taxes 5,802,500 6,297,050 6,297,085 35
Licenses:
Business licenses 4,400,000 4,444,435 4,444,440 5
Employee earnings 13,850,000 13,644,535 13,644,540 5
Comcast fees 302,000 301,850 301,854 4
Penalties 170,000 202,920 202,920 -
Alcoholic beverages 121,000 143,660 143,660 -
Insurance premium tax 3,500,000 3,831,790 3,831,792 2
Building permits 125,000 130,400 130,401 1
Electrical permits 35,000 29,010 29,010 -
Zoning change fees 6,500 5,240 5,244 4
Miscellaneous building
and electrical fees 4,250 6,000 6,000 -
KJDA payroll rebate (227,000) (222,610) (222,607) 3
Total licenses 22,286,750 22,517,230 22,517,254 24
Charges for services:
Tax collection fee 161,000 163,535 163,537 2
Administrative charge 261,720 271,090 271,095 5
Base court revenue 56,000 47,190 47,191 1
Recreation fees 100,000 105,240 105,248 8
Total charges for services 578,720 587,055 587,071 16
(Continued)
ActualBudgeted Amounts
-41-
CITY OF PADUCAH, KENTUCKY
GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2014
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 326,000$ 310,010$ 310,014$ 4$
Fire State Incentive 265,000 260,280 260,281 1
Police supplemental grants 53,500 153,645 153,662 17
Total grants 644,500 723,935 723,957 22
Interest 111,000 167,375 167,379 4
Other:
Property rent and sales 685,565 686,230 686,238 8
Property upkeep and
maintenance 103,585 121,325 121,328 3
Contractual programs 5,000 3,365 3,369 4
E911 - GIS 26,880 26,880 26,883 3
Miscellaneous 163,000 171,555 171,693 138
Total other 984,030 1,009,355 1,009,511 156
Total revenues 30,407,500 31,302,000 31,302,257 257
Expenditures:
General government:
General administration:
Mayor and Commissioners 182,090 187,625 187,565 60
City Manager 422,725 411,780 411,928 (148)
City Clerk 120,670 120,830 120,981 (151)
Corporate Counsel 172,520 163,795 163,743 52
Non-departmental 796,845 787,175 787,172 3
Memberships and contingency 123,750 25,605 25,599 6
Civic beautification 3,500 3,205 3,196 9
Total general administration 1,822,100 1,700,015 1,700,184 (169)
PRDA 123,725 119,840 119,630 210
Finance:
Finance administration 254,275 254,375 254,398 (23)
Accounting and payroll 331,250 320,405 320,232 173
Revenue collection 394,055 376,205 375,951 254
Total finance 979,580 950,985 950,581 404
(Continued)
CITY OF PADUCAH, KENTUCKY
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
Budgeted Amounts
GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2014
FUND BALANCE - BUDGET AND ACTUAL
-42-
Exhibit 7
(Continued)
Variance with
Final Budget
Actual Positive
General government:Original Final Amounts (Negative)
Planning:
Administration 266,475$ 267,930$ 267,783$ 147$
Planning 89,610 88,435 88,413 22
Grants 143,450 137,630 137,367 263
Economic development - 21,660 21,596 64
Total planning 499,535 515,655 515,159 496
Radio and rental property 175,845 88,005 87,972 33
Human rights 41,970 37,460 37,369 91
Information systems 668,170 605,695 605,538 157
Human resources/risk management 302,290 294,940 294,670 270
Total general government 4,613,215 4,312,595 4,311,103 1,492
Public safety:
Police:
Police administration 833,300 826,970 826,563 407
Patrol 6,343,705 6,240,690 6,240,444 246
Investigations 2,080,445 2,116,270 2,116,236 34
Total police 9,257,450 9,183,930 9,183,243 687
Fire:
Fire administration 479,075 473,005 472,910 95
Suppression 6,229,925 6,064,165 6,063,841 324
Prevention and inspection 163,845 164,125 163,925 200
Training 140,130 137,515 137,541 (26)
Construction 386,695 379,390 379,347 43
Code enforcement 374,925 401,980 401,707 273
Total fire 7,774,595 7,620,180 7,619,271 909
Total public safety 17,032,045 16,804,110 16,802,514 1,596
Public service:
Public works:
Street maintenance 1,955,530 1,769,690 1,769,575 115
Street lighting 630,000 764,985 764,983 2
Landscape maintenance 1,126,355 1,090,610 1,090,377 233
Total public works 3,711,885 3,625,285 3,624,935 350
(Continued)
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE - BUDGET AND ACTUAL
CITY OF PADUCAH, KENTUCKY
Budgeted Amounts
GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2014
-43-
Exhibit 7
(Continued)
Variance with
Final Budget
Actual Positive
Public service:Original Final Amounts (Negative)
Engineering services:
Engineering services 561,630$ 476,555$ 476,429$ 126$
Flood control 550,690 701,270 700,910 360
Total engineering services 1,112,320 1,177,825 1,177,339 486
Total public service 4,824,205 4,803,110 4,802,274 836
Parks and recreation:
Parks and recreation administration 790,365 784,395 784,232 163
Grounds maintenance 1,481,570 1,457,615 1,457,591 24
Pools and recreation programs 595,495 522,325 521,950 375
Total parks and recreation 2,867,430 2,764,335 2,763,773 562
Intergovernmental and other:
Cable authority 81,595 84,050 84,041 9
Mainstreet progra m 448,320 168,615 168,538 77
Leave expense - 85,410 85,409 1
Intergovernmental expense - 302,465 302,463 2
Total intergovernmental and other 529,915 640,540 640,451 89
Total expenditures 29,866,810 29,324,690 29,320,115 4,575
Excess (deficiency) of revenues
over expenditures 540,690 1,977,310 1,982,142 4,832
Other financing sources (uses):
Operating transfers in 515,000 490,000 490,000 -
Operating transfers out (1,228,610) (2,089,105) (2,089,096) 9
Total other financing sources (uses) (713,610) (1,599,105) (1,599,096) 9
Net change in fund balance (172,920) 378,205 383,046 4,841
Fund balance - beginning 12,311,565 12,311,565 12,311,565 -
Fund balance - ending 12,138,645$ 12,689,770$ 12,694,611$ 4,841$
See accompanying notes to the basic financial statements.
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE - BUDGET AND ACTUAL
-44-
CITY OF PADUCAH, KENTUCKY
Budgeted Amounts
GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2014
Exhibit 8
Variance with
Final Budget
Positive
Original Final (Negative)
Revenues:
Licenses:
Employee earnings 4,617,000$ 4,469,855$ 4,469,857$ 2$
Total licenses 4,617,000 4,469,855 4,469,857 2
Other:
Miscellaneous - 3,700 3,701 1
Total other - 3,700 3,701 1
Total revenues 4,617,000 4,473,555 4,473,558 3
Expenditures:
General government:
Planning and development:
Economic development 886,000 718,200 718,200 -
Total expenditures 886,000 718,200 718,200 -
Excess (deficiency) of revenues
over expenditures 3,731,000 3,755,355 3,755,358 3
Other financing sources (uses):
Operating transfers in - 2,500 2,500 -
Operating transfers out (4,521,680) (4,588,030) (4,588,024) 6
Total other financing sources (uses) (4,521,680) (4,585,530) (4,585,524) 6
Net change in fund balance (790,680) (830,175) (830,166) 9
Fund balance - beginning 2,589,099 2,589,099 2,589,099 -
Fund balance - ending 1,798,419$ 1,758,924$ 1,758,933$ 9$
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, 2014
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 4,971,751$ 627,879$ 5,599,630$ 5,530,512$
Accounts receivable 549,858 - 549,858 263,839
Due from other funds - - - 400,000
Prepaid expenses 157,677 - 157,677 203,677
Inventory - - - 64,733
Total current assets 5,679,286 627,879 6,307,165 6,462,761
Noncurrent Assets:
Net capital assets:
Land 62,152 - 62,152 -
Depreciable capital assets 995,552 152,711 1,148,263 3,265,133
Total noncurrent assets 1,057,704 152,711 1,210,415 3,265,133
Total assets 6,736,990 780,590 7,517,580 9,727,894
Current Liabilities:
Voucher and accounts payable 125,388 77,656 203,044 178,459
Accrued payroll and payroll taxes 60,587 - 60,587 17,948
Accrued compensated absences 88,613 1,896 90,509 40,344
Unearned revenue 26,800 52,390 79,190 23,122
Due to other funds - 48,786 48,786 -
Total current liabilities 301,388 180,728 482,116 259,873
Noncurrent Liabilities:
Landfill post-closure costs 2,062,500 - 2,062,500 -
Accrued compensated absences 31,327 17,061 48,388 17,659
Total noncurrent liabilities 2,093,827 17,061 2,110,888 17,659
Total liabilities 2,395,215 197,789 2,593,004 277,532
Invested in capital assets 1,057,704 152,711 1,210,415 3,265,133
Restricted - Housing - 437,483 437,483 -
Unrestricted 3,284,071 (7,393) 3,276,678 6,185,229
TOTAL NET POSITION 4,341,775$ 582,801$ 4,924,576 9,450,362$
Reconciliation to government-wide statements of net position:
Adjustment to reflect the consolidation of Internal Service Funds'
activities related to Enterprise Funds 560,356
NET POSITION OF BUSINESS-TYPE ACTIVITIES 5,484,932$
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, 2014
Exhibit 10
Nonmajor
Solid Enterprise
Operating Revenues: Waste Funds Totals
Charges for services - internal -$ 41,266$ 41,266$ 5,288,401$
Charges for services - external 4,410,059 - 4,410,059 286,492
Miscellaneous 9,643 1,639 11,282 -
Total operating revenues 4,419,702 42,905 4,462,607 5,574,893
Operating Expenses:
Cost of sales and service 3,682,041 1,923,951 5,605,992 4,223,092
Depreciation and amortization 303,192 13,898 317,090 619,832
Total operating expenses 3,985,233 1,937,849 5,923,082 4,842,924
Operating income (loss)434,469 (1,894,944) (1,460,475) 731,969
Nonoperating Revenues (Expenses):
Grants - program purpose 55,112 1,901,883 1,956,995 -
Interest and investment income 48,189 66 48,255 32,622
Gain (loss) on disposal of property
and equipment 13,422 - 13,422 36,737
Total nonoperating revenues (expenses)116,723 1,901,949 2,018,672 69,359
Income (loss) before contributions and
transfers 551,192 7,005 558,197 801,328
Contributions and Transfers:
Transfers in - 27,872 27,872 270,986
Transfers out (240,000) - (240,000) (8,500)
Total contributions and transfers (240,000) 27,872 (212,128) 262,486
Change in net position 311,192 34,877 346,069 1,063,814
Total net position (as restated), July 1, 2013 4,030,583 547,924 8,386,548
TOTAL NET POSITION - JUNE 30, 2014 4,341,775$ 582,801$ 9,450,362$
Reconciliation to government-wide statements of net position:
Adjustment to reflect the consolidation of Internal Service Funds'
activities related to Enterprise Funds 91,976
CHANGE IN NET POSITION OF BUSINESS-TYPE ACTIVITIES 438,045$
See accompanying notes to the basic financial statements.
CITY OF PADUCAH, KENTUCKY
STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN NET POSITION
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2014
Governmental
Internal
Service
Funds
-47-
ActivitiesBusiness-type Activities
Exhibit 11
Nonmajor
Solid Enterprise
Cash Flows from Operating Activities: Waste Funds Totals
Cash received from customers 4,378,498$41,266$ 4,419,764$ -$
Cash received from interfund services provided - - - 5,611,044
Payments to suppliers (2,489,823)- (2,489,823) (226,502)
Payments to employees (970,534) (146,544) (1,117,078) (311,983)
Claims paid - - - (2,198,521)
Payments to internal service funds (398,914) (2,338) (401,252) -
Other receipts 9,643 1,639 11,282 -
Other payments - (1,769,257) (1,769,257) (1,394,345)
Net cash provided (used) by operating activities 528,870 (1,875,234) (1,346,364) 1,479,693
Cash Flows from Noncapital Financing Activities:
Grants - program purpose 55,112 1,908,795 1,963,907 -
Transfers from other funds - 27,872 27,872 270,986
Transfers to other funds (240,000) - (240,000) (8,500)
Net cash provided (used) by noncapital
financing activities (184,888) 1,936,667 1,751,779 262,486
Cash Flows from Capital and Related
Financing Activities:
Purchase of capital assets (294,770) - (294,770) (970,817)
Proceeds from sale of capital assets 13,422 - 13,422 38,730
Net cash provided (used) by capital and
related financing activities (281,348) - (281,348) (932,087)
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, 2014
Governmental
Activities
Internal
Service
Business-type Activities
Funds
Cash Flows from Investing Activities:
Interest on cash and investments 48,189 66 48,255 32,622
Net cash provided (used) by investing
activities 48,189 66 48,255 32,622
Net increase (decrease) in cash and cash
equivalents 110,823 61,499 172,322 842,714
Cash and cash equivalents, July 1, 2013 4,860,928 566,380 5,427,308 4,687,798
CASH AND CASH EQUIVALENTS,
JUNE 30, 2014 4,971,751$627,879$ 5,599,630$ 5,530,512$
Reconciliation of Operating Income (Loss) to Net
Cash Provided by Operating Activities:
Operating income (loss) 434,469$ (1,894,944)$(1,460,475)$ 731,969$
Adjustments to reconcile operating income to
net cash provided by operating activities:
Depreciation and amortization 303,192 13,898 317,090 619,832
Change in assets and liabilities:
Receivables (58,361) - (58,361) (211,638)
Prepaid expenses (157,677) - (157,677) 658,106
Inventories - - - (3,721)
Unearned revenues 26,800 (6,912) 19,888 -
Due to other funds - - - (400,000)
Account and accrued payables (19,553) 12,724 (6,829) 85,145
NET CASH PROVIDED (USED) BY OPERATING
ACTIVITIES 528,870$ (1,875,234)$ (1,346,364)$ 1,479,693$
See accompanying notes to the basic financial statements.
-48-
Exhibit 12
Private-
Pension purpose Agency
Funds Trusts Funds
Cash and cash equivalents 52,557$ 6,280$ 563,646$
Receivables:
Interest 17,299 - -
Investments at fair value
Money market funds 139,544 - -
Common stock 2,969,572 - -
Corporate bonds 954,013 - -
U.S. agencies bonds 253,006 - -
Mortgage backed securities - - -
Mutual funds 2,797,666 1,207,517 -
Total assets 7,183,657 1,213,797 563,646$
Payroll taxes and withholdings
payable - - 563,646$
Total liabilities - - 563,646$
Held in trust for pension benefits
and other purposes 7,183,657$ 1,213,797$
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, 2014
Exhibit 13
Private-
Pension purpose
Additions: Funds Trusts
Contributions:
Employer 420,834$ -$
Plan members 5,354 -
Private donations - 2,615
Total contributions 426,188 2,615
Investment income:
Net increase (decrease) in
fair value of investments 877,920 115,525
Interest and dividends 180,403 59,541
Net investment income 1,058,323 175,066
Total additions 1,484,511 177,681
Deductions:
Benefits 1,466,232 -
Capital outlay - 47,771
Administrative expenses 55,889 14,396
Total deductions 1,522,121 62,167
Change in net position (37,610) 115,514
Net position - beginning 7,221,267 1,098,283
Net position - ending 7,183,657$ 1,213,797$
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, 2014
CITY OF PADUCAH, KENTUCKY
NOTES TO THE FINANCIAL STATEMENTS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2014
- 51 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2014
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, 2014
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, 2014
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.
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.
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.
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.
(Continued)
- 54 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2014
Note 1 - Summary of Significant Account Policies:
Basis of Presentation
Fund Financial Statements
Additionally, the City reports the internal service funds which are used to account for the fleet
management services, self funded property and casualty self insurance, and self funded health and
disability insurance provided to departments of the City.
Fiduciary funds 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 Employees' 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.
(Continued)
- 55 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2014
Note 1 - Summary of Significant Account Policies:
Basis of Accounting
In the fund financial statements, governmental funds are presented on the modified accrual basis of
accounting. Under this modified accrual basis of accounting, revenues are recognized when “measurable
and available.” Measurable means knowing or being able to reasonably estimate the amount. Available
means collectible within the current period or within sixty days after year end. Expenditures (including
capital outlay) are recorded when the related fund liability is incurred, except for general obligation bond
principal and interest which are reported when due. Agency funds are presented using the accrual basis of
accounting.
All proprietary, 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, 2014
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, 2014.
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. The pension trust fund has investment
policies separately approved by their oversight board. The private purpose trust has not adopted a 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, 2014
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
$64,733 held for consumption and real property of $1,497,662 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, 2014
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 Outflows/Inflows of Resources
In addition to assets, the statement of financial position will sometimes report a separate section for
deferred outflows of resources. This separate financial statement element, deferred outflows of resources,
represents the consumption of net position that applies to a future period(s) and so will not be recognized
as an outflow of resources (expense/expenditure) until then. The government has only one item that
qualifies for reporting in the category. It is the deferred charge on refunding reported in the government-
wide statement of net position. A deferred charge on refunding results from the difference in the carrying
value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter
of the life of the refunded or refunding debt. A summary of change in deferred charge on refunding is as
follows:
Balance
July 1, 2013
Additions Reductions
Balance
June 30, 2014
Deferred charge on refunding $ 49,884 $ 82,447 $ (8,200) $ 124,131
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.
(Continued)
- 59 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2014
Note 1 - Summary of Significant Accounting Policies:
Deferred Outflows/Inflows of Resources
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.
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. (Continued)
- 60 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2014
Note 1 - Summary of Significant Accounting Policies:
Equity Classifications
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.”
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, 2014
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 function: Current (further classified by character)
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, 2014
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
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, 2014, 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, 2014
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, 2014, are as follows:
Description Date
Assessment and enforceable lien January 1, 2014
Levy September 25, 2014
Face value amount payment dates 1st half by November 1, 2014
2nd half by February 1, 2015
Delinquent date - 10% penalty
plus 1/2% per month 1st half - November 30, 2014
2nd half - February 28, 2015
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, 2014, 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 $28,739,743 and
$29,437,648, respectively.
(Continued)
- 64 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2014
Note 3 - Detail Notes on Transaction Classes/Accounts:
Investments
As of June 30, 2014, 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 $ 139,544 NA NA NA NA NA
Common stock 2,969,572 NA NA NA NA NA
Corporate bonds 954,013 AA-/A $ - $ 496,595 $ 457,418 $ -
U.S. agencies 253,006 Aaa 30,464 222,542 - -
Mutual funds
Equity 4,005,183 NA NA NA NA NA
TOTAL FIDUCIARY AND
PRIVATE PURPOSE
TRUST FUNDS $8,321,318
(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, 2014
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, 2014
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, 2014, was as follows:
Balance Balance
Primary Government: July 1, 2013 Additions Deductions June 30, 2014
Capital assets, not being depreciated:
Land $10,376,432 $ 225,000 $ 192,500 $10,408,932
Construction-in-progress 6,527,866 10,060,826 4,289,345 12,299,347
Total capital assets, not being
depreciated 16,904,298 10,285,826 4,481,845 22,708,279
Capital assets, being depreciated:
Land improvements 4,140,668 1,386,325 - 5,526,993
Buildings and improvements 19,392,594 - 488,153 18,904,441
Infrastructure 38,714,275 2,911,711 - 41,625,986
Equipment 10,562,665 349,638 765,015 10,147,288
Furnishings and fixtures 207,830 15,534 5,428 217,936
Vehicles 8,236,680 1,154,856 762,968 8,628,568
Totals at historical cost 81,254,712 5,818,064 2,021,564 85,051,212
Less accumulated depreciation:
Land improvements 1,631,320 179,536 - 1,810,856
Buildings and improvements 12,524,297 376,952 159,634 12,741,615
Infrastructure 26,808,758 1,404,129 - 28,212,887
Equipment 9,094,401 478,845 763,815 8,809,431
Furnishings and fixtures 206,565 635 5,428 201,772
Vehicles 5,509,726 614,017 760,975 5,362,768
Total accumulated depreciation 55,775,067 3,054,114 1,689,852 57,139,329
Total capital assets, being
depreciated, net 25,479,645 2,763,950 331,712 27,911,883
PRIMARY GOVERNMENT
ACTIVITIES CAPITAL
ASSETS, NET $42,383,943 $13,049,776 $4,813,557 $50,620,162
(Continued)
- 67 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2014
Note 3 - Detail Notes on Transaction Classes/Accounts:
Capital Assets
During the year ended June 30, 2014, a vehicle was transferred to business-type activities from governmental
activities. Accordingly, business-type capital asset activities reflect vehicle and related accumulated
depreciation additions of $18,000 and $18,000, respectively.
Balance Balance
Business-type Activities: July 1, 2013 Increases Decreases June 30, 2014
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 1,179,348 294,770 108,815 1,365,303
Vehicles 2,391,481 18,000 - 2,409,481
Totals at historical cost 4,125,656 312,770 108,815 4,329,611
Less accumulated depreciation:
Buildings and improvements 255,490 15,678 - 271,168
Equipment 893,807 116,616 108,815 901,608
Vehicles 1,805,776 202,796 - 2,008,572
Total accumulated depreciation 2,955,073 335,090 108,815 3,181,348
Total capital assets, being
depreciated, net 1,170,583 (22,320) - 1,148,263
BUSINESS-TYPE ACTIVITIES
CAPITAL ASSETS, NET $ 1,232,735 $ (22,320) $ - $ 1,210,415
(Continued)
- 68 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2014
Note 3 - Detail Notes on Transaction Classes/Accounts:
Capital Assets
Depreciation expense was charged to governmental activities as follows:
General government:
General administration $ 278,749
Finance 12,990
Planning 21,512
Inspections -
Human resources/risk management -
Information systems 11,222
Fleet maintenance 10,480
Total general government 334,953
Public safety:
Police 216,414
Fire 51,619
Grants -
Emergency 911 24,596
Court awards -
Fleet Lease Trust 609,352
Total public safety 901,981
Public service:
Public works 47,664
Engineering 12,090
Total public service 59,754
Parks and recreation 236,391
Planning and development:
Infrastructure 1,519,164
Grants 1,871
Total planning and development 1,521,035
TOTAL DEPRECIATION EXPENSE –
GOVERNMENTAL ACTIVITIES $3,054,114
Depreciation expense was charged to business-type activities as follows:
Solid Waste Fund $ 303,192
Section Eight Housing 3,877
Civic Center 10,021
TOTAL DEPRECIATION EXPENSE –
BUSINESS-TYPE ACTIVITIES $ 317,090
(Continued)
- 69 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2014
Note 3 - Detail Notes on Transaction Classes/Accounts:
Capital Assets
Balance Balance
Discretely Presented July 1, 2013 Increases Decreases June 30, 2014
Component Units:
Capital assets, not being depreciated:
Land & construction in progress $ 2,093,776 $ 591,584 $ - $ 2,685,360
Total capital assets, not being
depreciated 2,093,776 591,584 - 2,685,360
Capital assets, being depreciated:
Utility plant 78,230,189 3,168,191 604,417 80,793,963
Total capital assets, being
depreciated 78,230,189 3,168,191 604,417 80,793,963
Less accumulated depreciation:
Utility plant 33,495,229 1,828,770 388,459 34,935,540
Total accumulated depreciation 33,495,229 1,828,770 388,459 34,935,540
Total capital assets, being
depreciated, net 44,734,960 1,339,421 215,958 45,858,423
COMPONENT UNIT
CAPITAL ASSETS, NET $ 46,828,736 $ 1,931,005 $ 215,958 $ 48,543,783
Depreciation expense, charged to functions/programs of discretely presented major component units as
follows:
Paducah Water Works $ 1,828,770
TOTAL DEPRECIATION EXPENSE BY ACTIVITY $ 1,828,770
Accounts Payable
Payables in the governmental and proprietary funds are composed of payables to vendors and accrued
expenditures.
(Continued)
- 70 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2014
Note 3 - Detail Notes on Transaction Classes/Accounts:
Short-Term Liabilities
On May 21, 2014, the City renewed an agreement with Banterra Bank for a fixed rate line of credit not to
exceed $350,000 for construction of new residential homes for the Fountain Avenue Neighborhood
Program. Short-term debt activity for the year ended June 30, 2014, was as follows:
Beginning Ending
Governmental Activities Balance Additions Payments Balance
Home Grant Fund Line of Credit $ 308,112 $ 598,728 $ 627,539 $279,301
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, 2014, the governmental long-term liabilities consisted of the following:
General obligation bonds:
Current portion $ 1,660,652
Noncurrent portion 23,045,639
TOTAL GENERAL OBLIGATION
BOND COSTS, NET OF PREMIUMS AND DISCOUNTS $ 24,706,291
Note payable:
Current portion $ 417,876
Noncurrent portion 6,101,480
TOTAL NOTE PAYABLE PAYMENTS $ 6,519,356
Accrued compensated absences:
Current portion $ 1,015,737
Noncurrent portion 1,188,223
TOTAL ACCRUED COMPENSATED
ABSENCES $ 2,203,960
Business-type Activities
As of June 30, 2014, the long-term liabilities payable from proprietary fund resources consisted of the
following:
Accrued compensated absences:
Current portion $ 90,509
Noncurrent portion 48,388
TOTAL ACCRUED COMPENSATED
ABSENCES $ 138,897
(Continued)
- 71 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2014
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 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%. The 2001 series bonds were issued to
finance construction of the Performing Arts Center and Convention Center expansion. 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 issued for an economic development project in the Industrial Park West 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. 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 supported by an operating lease collected by the
City. The rental revenues collected from the lease during the current year cover $202,898 of the bond and
interest payments due with the remaining amount of $191,116 shared equally by the City and County.
Series 2013A Bond Issue – The City of Paducah issued general obligation bonds of $1,120,000 in
September 2013, to finance the municipality pool renovations. Interest rates range from 0.70% to 3.60%.
These bonds are required to be fully paid within 15 years from the date of issue and are backed by the full
faith and credit of the City.
(Continued)
- 72 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2014
Note 3 - Detail Notes on Transaction Classes/Accounts:
Long-Term Liabilities
General Obligation Bonds
Series 2013B Bond Issue – The City of Paducah issued general obligation taxable bonds of $2,475,000 in
September 2013, to finance 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. Interest rates
range from 0.60% to 4.00%. These bonds are required to be fully paid within 15 years from the date of
issue and are backed by the full faith and credit of the City.
Series 2014A Bond Issue – The City of Paducah issued general obligation refunding bonds of $5,460,000
in May 2014 with interest rates ranging from 2.00% to 3.50%, to refund $5,545,000 of outstanding 2010
series bonds issued to finance several public improvement projects with interest rates ranging from 1.00%
to 5.50%. 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.
Current Refunding
On May 21, 2014, the City issued general obligation refunding bonds of $5,460,000 with interest rates
varying from 2.00% to 3.50% to current refund 2010 series Build America Bonds with interest rates
varying from 1.00% to 5.50%. The net proceeds of the new issue were deposited into an irrevocable trust
with an escrow agent to redeem outstanding 2010 series Build America Bonds maturing on or after March
1, 2015 in the principle amount of $5,545,000 on June 27, 2014 at the redemption price of 100%. As a
result, the refunded bonds are considered to be defeased and the liability has been removed from the
statement of net position. The reacquisition price exceeded the net carrying amount of the old debt by
$82,447. This amount was deferred and amortized over the remaining life of the refunded debt. This
current refunding was undertaken to reduce future total debt service payments over the next 16 years by
$380,692 with a resulting net economic gain of $356,383. As of June 30, 2014, none of these defeased
bonds were still outstanding with applicable assets held in trust for future payoff.
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.
(Continued)
- 73 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2014
Note 3 - Detail Notes on Transaction Classes/Accounts:
Long-Term Liabilities
Notes Payable
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%.
Changes in Long-Term Liabilities
The following is a summary of changes in long-term debt for the year ended June 30, 2014:
Beginning Ending Due within
Type of Liability: Balance Additions Reductions Balance One Year
Governmental activities:
General obligation bonds:
Pension $ 4,655,000 $ - $ (255,000) $ 4,400,000 $ 270,000
Floodwall Rehabilitation 2,341,790 - (116,927) 2,224,863 120,652
Build America Bonds (BABS) 5,825,000 - (5,825,000) - -
Refinanced Convention Center 6,220,000 - (415,000) 5,805,000 420,000
Refinanced Infiniti Media
Building 3,370,000 - (270,000) 3,100,000 280,000
Public Pool Renovations - 1,120,000 - 1,120,000 65,000
Economic Development - 2,475,000 - 2,475,000 145,000
Refinancing BABS Public
Projects - 5,460,000 - 5,460,000 360,000
Premiums - 220,683 - 220,683 -
Discounts (57,372) (53,529) 11,646 (99,255) -
Total bonds payable 22,354,418 9,222,154 (6,870,281) 24,706,291 1,660,652
Notes payable:
Kentucky League of Cities 2,024,294 - (174,585) 1,849,709 179,889
Kentucky Association of
Counties 2,181,250 - (100,000) 2,081,250 104,583
Margaret Hank Agreement 151,812 - (15,175) 136,637 20,559
Murray State University
Agreement 2,563,482 - (111,722) 2,451,760 112,845
Total notes payable 6,920,838 - (401,482) 6,519,356 417,876
Accrued Compensated
Absences 2,018,813 1,429,146 (1,243,999) 2,203,960 1,015,737
TOTAL GENERAL LONG-
TERM LIABILITIES $31,294,069 $10,651,300 $ (8,515,762) $33,429,607 $ 3,094,265
Business-type activities:
Accrued compensated
Absences $ 128,538 $ 92,548 $ (82,188) $ 138,897 $ 90,509
(Continued)
- 74 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2014
Note 3 - Detail Notes on Transaction Classes/Accounts:
Long-Term Liabilities
Changes in Long-Term Liabilities
(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 $50,620,162
Less:
19.75% of the outstanding 2010B
general obligation bonds $ (1,146,488)
100% of the outstanding 2011
General obligation bonds (3,100,000)
Net of the County's portion 2,123,244
(2,123,244)
78% of the outstanding 2014A
general obligation bonds (4,258,800)
100% of the outstanding 2013A
general obligation bonds (1,120,000)
52% of the outstanding 2013B
general obligation bonds (1,287,000)
100% of the Margaret Hank Agreement (136,637)
100% of the outstanding Kentucky League
of Cities' note payable (1,849,709)
Net position invested in capital assets, net of related debt $39,844,772
Annual Debt Service Requirements
The annual debt service requirements to maturity for bonds and notes as of June 30, 2014, are as follows:
Year Ending
June 30 Principal Interest
2015 $ 2,078,528 $ 923,093
2016 2,065,160 923,319
2017 2,146,669 867,269
2018 2,209,386 807,173
2019 2,228,864 741,501
2020-2024 11,860,439 2,609,100
2025-2029 7,616,248 779,061
2030-2032 898,925 40,074
TOTALS $31,104,219 $ 7,690,589
(Continued)
- 75 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2014
Note 3 - Detail Notes on Transaction Classes/Accounts:
Accrued Compensated Absences
Compensated absence obligations arise from amounts due to City employees for vested amounts of
vacation pay and sick pay which will be payable in the future. 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, 2014, are as
follows:
Accrued Compensated Absences
Governmental Business-type
Activities Activities
Accrued sick leave $ 788,601 $ 50,478
Accrued vacation leave 1,415,359 88,419
Totals 2,203,960 138,897
Less current portion 1,015,737 90,509
LONG-TERM PORTION $1,188,223 $ 48,388
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, 2014.
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, 2014, $11,715 of payments was 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, 2014, 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.
(Continued)
- 76 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2014
Note 3 - Detail Notes on Transaction Classes/Accounts:
Interfund Transactions and Balances
Interfund transfers during the year ended June 30, 2014, were as follows:
Interfund Interfund
Governmental Funds: Transfers In Transfers Out
General Fund $ 490,000 $2,089,095
Special Revenue Investment Fund 2,500 4,588,024
Special Revenue Municipal Aid Fund 513,000 -
Capital Project Fund 5,363,404
Debt Service Fund 2,011,970 -
Nonmajor Governmental Funds 767,887 2,522,000
Internal Service Funds 270,986 8,500
Proprietary Funds:
Solid Waste - 240,000
Nonmajor Proprietary Funds 27,872 -
TOTALS $9,447,619 $9,447,619
Transfers are used to (a) move revenues from the fund that statute or budget requires to collect them to the
fund that statute or budget requires to expend them and to (b) use unrestricted revenues collected in the
general fund to finance various programs accounted for in other funds in accordance with budgetary
authorizations.
Due To/From Balances
Due to/from balances used to cover current operating expenses were as follows as of June 30, 2014:
Due From Due To
General Fund $ 221,069 $1,117,172
Special Revenue Investment Fund 1,117,172 400,000
Capital Project Fund - 500,000
Nonmajor Governmental Funds 500,000 172,283
Nonmajor Proprietary Funds - 48,786
Internal Service Funds 400,000 -
TOTALS $2,238,241 $2,238,241
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 Employees’ 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:
(Continued)
- 77 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2014
Note 4 - Pension Plans - City of Paducah:
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.
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, 2014, 2013, and
2012, the City contributed 35.70%, 37.60%, and 35.76%, respectively, of each hazardous employee’s
creditable compensation and 18.89%, 19.55%, and 18.96%, 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,
2014, 2013, and 2012, were $5,428,734, $5,517,201, and $5,114,775, of which $4,364,052, $4,471,077
and $4,144,624 were made by the employer and $1,062,830, $1,046,124 and $970,151 were made by
employees, respectively, equal to the required contributions for each year.
Single Employer Defined Benefit Funds - Police and Firefighters' Pension Fund (PFPF) and
Appointive Employees’ Pension Fund (AEPF)
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.
Administration – The Appointive Employees’ Pension Fund Board and the City of Paducah Police and
Firefighters’ 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. See investment policies in Note 3 for the pension trusts.
Plan Administration – Management of the PFPF, as authorized by Kentucky Revised Statute 95.869, is
vested in the PFPF Board of Trustees, which consist of the Mayor, City Treasurer, an active firefighter,
a retired firefighter and a retired police officer. Management of the AEPF, as authorized by Kentucky
Revised Statute 90.400, is vested in the AEPF Board of Trustees, which consists of the Mayor, City
Manager and an elected retired employee.
(Continued)
- 78 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2014
Note 4 - Pension Plans - City of Paducah:
Single Employer Defined Benefit Funds - Police and Firefighters' Pension Fund (PFPF) and
Appointive Employees’ Pension Fund (AEPF)
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 does not issue a
separate, stand-alone report. Accordingly, the plan financial statements are included in this audit report.
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, 2014. AEPF does not issue a separate, stand-alone report. Accordingly, the plan
financial statements are included in this audit report.
Membership Information:
Membership of each plan consisted of the following at June 30, 2014:
PFPF AEPF
Active participants 1 0
Beneficiaries 27 3
Retired participants 34 1
TOTAL PARTICIPANTS 62 4
These plans are closed to new members.
Benefits provided:
PFPF provides retirement, disability, and death benefits. These benefits are determined by Kentucky
Revised Statutes (KRS) sections 95.851 to 95.884. Retirement benefits for general plan members are
2½% of average salary times years of service up to and including 30 years. The maximum is 75% of
average salary. Average salary is the highest average salary of the member for any 3 consecutive years
of service. Retirement allowed any time after attainment of age 50, provided that at least 20 years of
service have been completed. Occupational disability benefits equal to 70% of the members’ final rate
of pay. Non-occupational disability benefits are available after completing 10 years of service and are
determined in a similar manner as retirement benefits subject to a maximum of 50% of average salary.
Surviving beneficiaries may receive death benefits per the terms of the plan. Benefit terms provide for
an annual cost-of-living adjustment up to 5% a year provided the adjustment is supportable on an
actuarially sound basis. Kentucky Revised Statute 95.859(2) provides that the widow’s minimum
benefit shall be increased by the same percentage as the increase in Social Security benefits, not to
exceed 5%.
AEPF provides retirement, disability, and death benefits. Retirement allowed any time after attainment
of age 60, provided that at least 20 years of service have been completed. Retirement benefits for
general plan members are 50% of monthly salary at the time of retirement. Occupational disability
benefits equal to 50% of the members’ final rate of pay. Surviving beneficiaries may receive death
benefits per the terms of the plan. Effective January 1, 1998, all persons receiving benefits received a
one-time increase of 10%.
(Continued)
- 79 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2014
Note 4 - Pension Plans - City of Paducah:
Single Employer Defined Benefit Funds - Police and Firefighters' Pension Fund (PFPF) and
Appointive Employees’ Pension Fund (AEPF)
Funding policy:
PFPF - 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.
AEPF - 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.
Annual pension cost (APC) and Net pension asset (NPA) – The City’s APC and NPA for the PFPF and
AEPF are as follows:
PFPF AEPF Total
Annual required contribution (ARC) $ 421,933 $ 10,779 $ 432,712
Interest on NPA (403,806) (8,101) (411,907)
Adjustment to the ARC 491,290 17,306 508,596
Annual pension cost (APC) $ 509,417 $ 19,984 $ 529,401
Contributions made (420,834) - (420,834)
Decrease in net pension asset 88,583 19,984 108,567
Net pension asset, beginning of year (5,384,081) (135,018) (5,519,099)
Net pension asset, end of year $ (5,295,498) $ (115,034) $ (5,410,532)
The City’s APC, percentage of APC contributed, and NPA for the plans for the current and each of the
two preceding years were as follows:
Police and Firefighters’ Pension Fund
Annual Percentage Net
Fiscal Year Pension of APC Pension
June 30, Cost (APC) Contributed Asset
2014 $ 509,417 82.61% $ (5,295,498)
2013 521,214 91.51% (5,384,081)
2012 420,476 93.17% (5,428,344)
Appointive Employees' Pension Fund
Annual Percentage Net
Fiscal Year Pension of APC Pension
June 30, Cost (APC) Contributed Asset
2014 $ 19,984 n/a $ (115,034)
2013 22,990 n/a (135,018)
2012 19,848 n/a (158,008)
(Continued)
- 80 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2014
Note 4 - Pension Plans - City of Paducah:
Single Employer Defined Benefit Funds - Police and Firefighters' Pension Fund (PFPF) and
Appointive Employees’ Pension Fund (AEPF)
Funding status and funding progress - As of the most recent actuarial valuation dated July 1, 2014, the
funding statuses of the plans were as follows:
PFPF AEPF Total
Actuarial accrued liability (AAL) $10,975,910 $ 104,709 $11,080,619
Actuarial value of plan assets 7,135,789 47,868 7,183,657
Unfunded actuarial accrued liability (UAAL) $ 3,840,121 $ 56,841 $ 3,896,962
Funded ratio (actuarial value of plan assets/AAL) 65.0% 45.7% 64.8%
Covered payroll (annual payroll of active
Employees covered by the plan) $ 66,982 $ - $ 66,982
UAAL as a percentage of covered payroll 5,737.6% n/a 5,817.9%
The schedule of funding progress, presented as required supplementary information following the notes
to the financial statements, presents multiyear trend information about whether the actuarial value of
plan assets is increasing or decreasing relative to the actuarial accrued liability for benefits.
Actuarial assumption
PFPF AEPF
Valuation date 7/1/14 7/1/14
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 7.25% (3) 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.
(3) 7.25% Effective July 1, 2014
(Continued)
- 81 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2014
Note 4 - Pension Plans - City of Paducah:
Single Employer Defined Benefit Funds - Police and Firefighters' Pension Fund (PFPF) and
Appointive Employees’ Pension Fund (AEPF)
Actuarial assumption
Post-retirement mortality – The mortality rates for the plans were based as follows:
PFPF 1971 Group annuity mortality (GAM) table
UP-1984 table set forward 5 years for participants retiring due to disability
AEPF GAM 1983 Male
GAM 1983 Female
Rate of return – Investment return is anticipated to be the major source of additional funds for
payment of benefits. The assumed rate of return is a long-term average. The fund’s rate of return is
determined primarily by the asset allocation – the classes in which it is invested, and the
performance of the associated markets. For the July 1, 2013 PFPF plan year, the assumed rate of
return was 7.50%. Beginning with the July 1, 2014 plan year, the assumed rate of return was
changed to 7.25%. For the AEPF July 1, 2013 and 2014 plan years, the assumed rate of return was
6%.
Discount Rate – The projection of cash flows used to determine the discount rate assumed that the
plan member contributions will be made at the current contribution rate and that City contributions
will be made equal to the difference between actuarially determined contribution and the member
contribution. The pension plans’ fiduciary net position was projected to be available to make all
projected future benefit payments of current plan members. Therefore, the long-term expected rate
of return on pension plans investment was applied to all periods of projected benefit payments to
determine the total pension liability. The discount rate used to measure the total pension liability as
of July 1, 2014 was as follows:
PFPF 7.25% - changed from 7.50% for the prior plan year.
AEPF 6.00%
Sensitivity of the net pension liability to changes in the discount rate – The following presents the
net pension liability of the City’s plans would be if it were calculated using a discount rate that is 1%
point lower or 1% point higher than the current rate:
1% Current 1%
Decrease Rate Increase
PFPF Net Pension Liability $ 4,604,430 $ 3,840,121 $ 3,168,291
AEPF Net Pension Liability $ 62,447 $ 56,841 $ 51,804
Note 5 - Appropriations Deficit:
No departments that adopted budgets annually had excess expenditures over appropriations for the fiscal
year ended June 30, 2014.
(Continued)
- 82 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2014
Note 6 - Component Unit Long-Term Liabilities:
Long-term liabilities of the discretely presented component units consist of the following at June 30, 2014:
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, 2014, are as follows:
.25%
Year Ending Service R & M
June 30 Principal Interest Fee Reserve Total
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 355,068 48,155 12,039 18,750 434,012
2020-2024 1,829,450 186,660 46,665 37,500 2,100,275
2025-2029 1,923,008 93,102 23,275 - 2,039,385
2030-2031 796,464 9,980 2,495 - 808,939
TOTALS $6,289,366 $565,410 $141,353 $131,250 $7,127,379
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, 2014, the significant construction commitments were as follows:
Cumulative Estimated
Costs Incurred Total Costs
Greenway Trail Projects – Phase II $ 471,335 $ 756,402
Noble Park Lake Bank Stabilization 23,110 215,700
$ 494,445 $ 972,102
(Continued)
- 83 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2014
Note 7 - Commitments and Contingencies:
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 $341,438 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
2011 - 2012 $ - $ 119,319 $ 117,856 $ 1,463
2012 - 2013 1,463 29,551 31,014 -
2013 - 2014 - 35,888 35,888 -
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
$175,000 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, 2014, that amount
was $2,774,791. 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 $157,941 at June 30, 2014.
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
2011 - 2012 $ 228,280 $ 3,224,703 $3,203,329 $249,654
2013 - 2013 249,654 2,700,338 2,865,390 84,602
2013 - 2014 84,602 1,662,555 1,589,216 157,941
Several lawsuits are pending involving citizens’ complaints and the City of Paducah. Various allegations
have been made seeking damages which the legal counsel of the City, along with its management, has
determined to be immaterial to the City’s financial position.
(Continued)
- 84 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2014
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 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 2014 totaled $650,573.
The following is an analysis of property leased under these leases at June 30, 2014:
Land $ 480,000
Buildings 3,422,261
Equipment 110,126
Total 4,012,387
Less: accumulated depreciation (1,000,996)
NET BOOK VALUE $3,011,391
Depreciation expense for the year ended June 30, 2014, on leased property was $81,466.
The following is a schedule of future minimum rental income from operating leases at June 30, 2014:
Lease
Income
2014 $ 448,185
2015 263,955
2016 65,024
2017 60,123
2018 60,123
2019-2022 75,154
TOTAL MINIMUM LEASE RECEIPTS $ 972,564
(Continued)
- 85 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2014
Note 10 – Restatement of Fund Balance and Net Position:
During the year ended June 30, 2014, the City corrected classification of short-term borrowing and
recorded related receivables for the non-major special revenue Home Grant Fund for the year ended June
30, 2013. The net effect of the correction reduced beginning non-major governmental funds balance by
$102,210 and increased beginning net position by $205,902.
During the year ended June 30, 2014, the City implemented Governmental Accounting Standards Board
(GASB) Statement No. 65, Items Previously Reported as Assets and Liabilities, effective for years
beginning after June 15, 2013. This GASB statement reclassified certain items that were previously
reported as assets and liabilities as deferred inflows and outflows of resources, or current-period outflows
and inflows. Implementation of the new statement reclassified certain bond issue costs previously reported
as an asset in the City’s statement of net position. The effect of the new statement reduced beginning net
position by $346,756.
Beginning fund balance and net position restatement are as follows:
Home
Grant
Fund
Non-major
Governmental
Funds
Government-
Wide
Governmental
Activities
Fund balance/net position – as previously stated $ 225,665 $ 683,634 $ 48,490,497
Home Grant Fund receivables 205,902 205,902 205,902
Reclassification for short-term borrowing (308,112) (308,112) -
Reclassification for expensing bond issue costs - - (346,756)
Fund balance/net position – as restated $ 123,455 $ 581,424 $ 48,349,643
Note 11 – Subsequent Events:
In July of 2014, the City issued advance refunding bond series 2014B of $4,225,000. The series 2014B
bonds were issued for refunding the Pension bond series 2005 maturing on or after November 1, 2016.
In preparing these financial statements, management has evaluated events and transactions for potential
recognition or disclosure through December 8, 2014, the date financial statements were available to be
issued.
CITY OF PADUCAH, KENTUCKY
REQUIRED SUPPLEMENTARY INFORMATION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2014
2014
Total pension liability
Service cost 5$
Interest 792
Changes in benefit terms -
Differences between expected and actual experience 151
Changes in assumptions 176
Benefit payments/refunds (1,445)
Net change in total pension liability (321)
Total pension liability - beginning 11,297
Total pension liability - ending (a)10,976$
Plan fiduciary net position
Contributions - employer 421$
Contributions - member 5
Net investment income 1,058
Benefit payments/refunds (1,445)
Administrative expenses (48)
Other -
Net change in plan fiduciary net position (9)
Plan fiduciary net position - beginning 7,145
Plan fiduciary net position - ending (b)7,136$
Net pension liability ending (a) - (b)3,840$
Plan fiduciary net position as a percentage of total pension liability 65%
Covered-employee payroll 67$
Net pension liability as a percentage of covered-employee payroll 5738%
(1) Additional ten year of supplementary information will be provided as this information becomes available.
-86-
Exhibit A-1
CITY OF PADUCAH, KENTUCKY
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF CHANGES IN THE POLICE AND FIREFIGHTERS' PENSION
Last Fiscal Year Ending June 30 (1)
(dollar amounts in thousands)
TRUST FUND'S NET PENSION LIABILITY AND RELATED RATIOS
2014
Total pension liability
Service cost -$
Interest 8.3
Changes in benefit terms -
Differences between expected and actual experience (30.6)
Changes in assumptions -
Benefit payments/refunds (21.2)
Net change in total pension liability (43.5)
Total pension liability - beginning 148.2
Total pension liability - ending (a)104.7$
Plan fiduciary net position
Contributions - employer -$
Contributions - member -
Net investment income 0.6
Benefit payments/refunds (21.1)
Administrative expenses (7.5)
Other -
Net change in plan fiduciary net position (28.0)
Plan fiduciary net position - beginning 75.9
Plan fiduciary net position - ending (b)47.9$
Net pension liability ending (a) - (b)56.8$
Plan fiduciary net position as a percentage of total pension liability 45.7%
Covered-employee payroll n/a
Net pension liability as a percentage of covered-employee payroll n/a
(1) Additional ten year of supplementary information will be provided as this information becomes available.
(dollar amounts in thousands)
-87-
Exhibit A-2
CITY OF PADUCAH, KENTUCKY
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF CHANGES IN THE APPOINTIVE EMPLOYEES' PENSION
TRUST FUND'S NET PENSION LIABILITY AND RELATED RATIOS
Last Fiscal Year Ending June 30 (1)
2014
Actuarially determined contribution 422$
Contributions in relation to the actuarially
determined contribution 421
Contribution deficiency (excess)1$
Covered-employee payroll 67$
Contributions as a percentage of covered-employee payroll 628%
2014
Annual money-weighted rate of return, net of investment expense 15.95%
(1) Additional ten year of supplementary information will be provided as this information becomes available.
Exhibit A-3
CITY OF PADUCAH, KENTUCKY
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF POLICE AND FIREFIGHTERS' PENSION TRUST FUND
CONTRIBUTIONS AND INVESTMENT RETURNS
Last Fiscal Year Ending June 30 (1)
(dollar amounts in thousands)
Schedule of Contributions
Schedule of Investment Returns
-88-
2014
Actuarially determined contribution 10.8$
Contributions in relation to the actuarially
determined contribution -
Contribution deficiency (excess)10.8$
Covered-employee payroll n/a
Contributions as a percentage of covered-employee payroll n/a
2014
Annual money-weighted rate of return, net of investment expense 0.97%
(1) Additional ten year of supplementary information will be provided as this information becomes available.
(dollar amounts in thousands)
-89-
Schedule of Contributions
Schedule of Investment Returns
Last Fiscal Year Ending June 30 (1)
Exhibit A-4
CITY OF PADUCAH, KENTUCKY
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF APPOINTIVE EMPLOYEES' PENSION TRUST FUNDS
CONTRIBUTIONS AND INVESTMENT RETURNS
CITY OF PADUCAH, KENTUCKY
SUPPLEMENTARY INFORMATION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2014
Exhibit B-1
Variance with
Final Budget
Final Positive
Budget (Negative)
Revenues:
Intergovernmental and grants
Intergovernmental 1,350,025$ 1,350,029$ 4$
Grants 4,050,100 4,050,116 16
Interest - - -
Miscellaneous 1,314,035 1,314,047 12
Total revenues 6,714,160 6,714,192 32
Expenditures:
Capital outlay 11,926,460 11,926,435 25
Excess (deficiency) of revenues over
expenditures (5,212,300) (5,212,243) 57
Other Financing Sources (Uses):
Long-term debt issued - - -
Operating transfers in 5,363,390 5,363,404 14
Actual
CITY OF PADUCAH, KENTUCKY
DETAIL SCHEDULE OF REVENUES, EXPENDITURES, AND
GENERAL CAPITAL IMPROVEMENTS FUND
FOR THE YEAR ENDED JUNE 30, 2014
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
Operating transfers in 5,363,390 5,363,404 14
Operating transfers out - - -
Total other financing sources 5,363,390 5,363,404 14
Net change in fund balance 151,090$ 151,161 71$
Fund balance, July 1, 2013 3,055,250
FUND BALANCE, JUNE 30, 2014 3,206,411$
See auditors report on pages 11-12.
-90-
Exhibit B-2
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
Revenues:
Intergovernmental 677,250$ 677,255$ 5$
Grants* - 84,467 84,467
Property upkeep, rentals, sales and other 202,895 202,898 3
Total revenues 880,145 964,620 84,475
Expenditures:
Debt service:
Principal requirement 1,748,240 1,748,233 7
Interest and fiscal requirement*993,925 1,078,357 (84,432)
Total expenditures 2,742,165 2,826,590 (84,425)
Excess (deficiency) of revenues over
expenditures (1,862,020) (1,861,970) 50
Other Financing Sources (Uses):
FOR THE YEAR ENDED JUNE 30, 2014
CITY OF PADUCAH, KENTUCKY
DEBT SERVICE FUND
DETAIL SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
Other Financing Sources (Uses):
Operating transfers in 2,011,965 2,011,970 5
Total other financing sources 2,011,965 2,011,970 5
Net change in fund balance 149,945$ 150,000 55$
Fund balance, July 1, 2013 353,817
FUND BALANCE, JUNE 30, 2014 503,817$
* Non-cash federal interest subsidies are not budgeted.
See auditors report on pages 11-12.
-91-
CITY OF PADUCAH, KENTUCKY
SUPPLEMENTARY INFORMATION
NONMAJOR GOVERNMENTAL FUNDS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2014
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 1,473,393$ 243,565$ 206,314$ -$
Receivables, net:
Accounts 51,846 121,396 - -
Grants - - - -
Due from other funds - - - -
TOTAL ASSETS 1,525,239$364,961$ 206,314$ -$
Liabilities:
Voucher and accounts payable 620,987$ 11,143$ 84,127$ -$
Line of credit - - -
Accrued payroll and payroll taxes - 54,943 - -
Due to other funds - - - -
Total liabilities 620,987 66,086 84,127 -
Fund Balances:
Restricted for:
Highway and streets 904,252 - - -
Public safety - - 122,187 -
Capital Improvements - - - -
Program purposes - - - -
Assigned for:
Public safety 298,875
Unrestricted - - - -
Total fund balances 904,252 298,875 122,187 -
TOTAL LIABILITIES AND
FUND BALANCES 1,525,239$364,961$ 206,314$ -$
See auditors report on pages 11-12.
NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2014
FUND BALANCES
Municipal
Aid Program
Special Revenue Funds
CITY OF PADUCAH, KENTUCKY
COMBINING BALANCE SHEET
ASSETS
-92-
Emergency
AND
LIABILITIES
Service Fund
Communication
CDBG Home
Grant Grant Bond
Fund Fund Fund
-$ 67,055$ 763,949$ 2,754,276$
- 87,370 - 260,612
172,283 44,000 - 216,283
- - 500,000 500,000
172,283$ 198,425$ 1,263,949$ 3,731,171$
-$ -$ -$ 716,257$
- 114,633 - 114,633
- - - 54,943
172,283 - - 172,283
172,283 114,633 - 1,058,116
- - - 904,252
- - - 122,187
- - 1,263,949 1,263,949
- 83,792 - 83,792
298,875
- - - -
- 83,792 1,263,949 2,673,055
172,283$ 198,425$ 1,263,949$ 3,731,171$
Funds
Total Nonmajor
Special Revenue Funds
-93-
Governmental
Exhibit B-4
Court Small
Awards Grant
Revenues: Fund Fund
Taxes -$ 416,803$ -$ -$
Charges for services - 264,009 - -
Intergovernmental 597,079 - - -
Grants - - 82,704 21,500
Interest 13,959 2,341 1,954 -
Miscellaneous - 395,445 - -
Total revenues 611,038 1,078,598 84,658 21,500
Expenditures:
Current operations:
Public safety - 1,651,391 21,566 -
Planning and development - - - 21,500
Capital Outlay - - - -
Debt Service:
Debt issuance costs
Interest and fiscal requirement - - - -
Total expenditures 1,521,207 1,651,391 21,566 21,500
Excess (deficiency) of revenues
over expenditures (910,169) (572,793) 63,092 -
Other Financing Sources (Uses):
Proceeds of debt - - - -
Payment to refunded bond escrow agent
Premium on debt issued
Discount on debt issued
Transfers in 513,000 472,794 - -
Transfers out - - - -
Total other financing sources (uses) 513,000 472,794 - -
Net change in fund balances (397,169) (99,999) 63,092 -
Fund balances (as restated), July 1, 2013 1,301,421 398,874 59,095 -
FUND BALANCES, JUNE 30, 2014 904,252$ 298,875$ 122,187$ -$
See auditors report on pages 11-12.
Municipal
Aid Program
Special Revenue Funds
Communication
CITY OF PADUCAH, KENTUCKY
FOR THE YEAR ENDED JUNE 30, 2014
NONMAJOR GOVERNMENTAL FUNDS
AND CHANGES IN FUND BALANCES
COMBINING STATEMENT OF REVENUES, EXPENDITURES
-94-
Emergency
Service Fund
CDBG Home
Grant Grant Bond
Fund Fund Fund
-$ -$ -$ 416,803$
- - - 264,009
- - - 597,079
802,907 158,000 - 1,065,111
- - 13,950 32,204
75,903 270,355 - 741,703
878,810 428,355 13,950 3,116,909
- - - 1,672,957
878,810 468,018 - 1,368,328
- - - -
109,292 109,292
- - 8,509 8,509
878,810 468,018 117,801 4,680,293
- (39,663) (103,851) (1,563,384)
- - 9,055,000 9,055,000
(5,627,447) (5,627,447)
220,683 220,683
(53,529) (53,529)
- - 295,093 1,280,887
- - (2,522,000) (2,522,000)
- - 1,367,800 2,353,594
- (39,663) 1,263,949 790,210
- 123,455 - 1,882,845
-$ 83,792$ 1,263,949$ 2,673,055$
Governmental
-95-
Special Revenue Funds
Funds
Total Nonmajor
Exhibit B-5
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
Revenues:
Intergovernmental 597,075$ 597,079$ 4$
Interest 13,955 13,959 4
Other - - -
Total revenues 611,030 611,038 8
Expenditures:
Public service 1,521,210 1,521,207 3
Excess (deficiency) of revenues over
expenditures (910,180) (910,169) 11
Other Financing Sources (Uses):
Operating transfers in 513,000 513,000 -
Operating transfers out - - -
Total other financing sources (uses)513,000 513,000 -
Net change in fund balance (397,180) (397,169) 11
Fund balance, July 1, 2013 1,301,421 1,301,421 -
FUND BALANCE, JUNE 30, 2014 904,241$ 904,252$ 11$
See accompanying notes to the basic financial statements.
-96-
FOR THE YEAR ENDED JUNE 30, 2014
CITY OF PADUCAH, KENTUCKY
MUNICIPAL AID PROGRAM FUND
STATEMENT 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 416,800$ 416,803$ 3$
Telephone surcharges 264,005 264,009 4
Interest 2,340 2,341 1
Miscellaneous 395,440 395,445 5
Total revenues 1,078,585 1,078,598 13
Expenditures:
Public safety 1,651,525 1,651,391 134
Excess (deficiency) of revenues over
expenditures (572,940) (572,793) 147
Other Financing Sources (Uses):
Operating transfers in 472,790 472,794 4
Operating transfers out - - -
Total other financing sources (uses)472,790 472,794 4
Net change in fund balance (100,150)$ (99,999) 151$
Fund balance, July 1, 2013 398,874
FUND BALANCE, JUNE 30, 2014 298,875$
See auditors report on pages 11-12.
-97-
FOR THE YEAR ENDED JUNE 30, 2014
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 82,700$ 82,704$ 4$
Interest 1,950 1,954 4
Total revenues 84,650 84,658 8
Expenditures:
Public safety 21,570 21,566 4
Excess (deficiency) of revenues over
expenditures 63,080 63,092 12
Net change in fund balance 63,080$ 63,092 12$
Fund balance, July 1, 2013 59,095
FUND BALANCE, JUNE 30, 2014 122,187$
See auditors report on pages 11-12.
-98-
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, 2014
Exhibit B-8
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
Revenues:
Grants 21,500$ 21,500$ -$
Other - - -
Total revenues 21,500 21,500 -
Expenditures:
Planning and development 21,500 21,500 -
Excess (deficiency) of revenues over
expenditures - - -
Other Financing Sources (Uses):
Operating transfers in - - -
Operating transfers out - - -
Total other financing sources (uses)- - -
Net change in fund balance -$ - -$
Fund balance, July 1, 2013 -
FUND BALANCE, JUNE 30, 2014 -$
See auditors report on pages 11-12.
-99-
FOR THE YEAR ENDED JUNE 30, 2014
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 802,900$ 802,907$ 7$
Other 75,900 75,903 3
Total revenues 878,800 878,810 10
Expenditures:
Planning and development 878,815 878,810 5
Excess (deficiency) of revenues over
expenditures (15) - 5
Net change in fund balance (15)$ - 5$
Fund balance, July 1, 2013 -
FUND BALANCE, JUNE 30, 2014 -$
See auditors report on pages 11-12.
-100-
FOR THE YEAR ENDED JUNE 30, 2014
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 158,000$ 158,000$ -$
Other 270,355 270,355 -
Total revenues 428,355 428,355 -
Expenditures:
Planning and development 468,020 468,018 2
Excess (deficiency) of revenues over
expenditures (39,665) (39,663) 2
Other Financing Sources (Uses):
Proceeds from line of credit - - -
Operating transfers in - - -
Operating transfers out - - -
FOR THE YEAR ENDED JUNE 30, 2014
CITY OF PADUCAH, KENTUCKY
HOME GRANT FUND
DETAIL SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
Net change in fund balance (39,665)$ (39,663) 2$
Fund balance, July 1, 2013 123,455
FUND BALANCE, JUNE 30, 2014 83,792$
See auditors report on pages 11-12.
-101-
Exhibit B-11
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
Revenues:
Grants -$ -$ -$
Interest 13,945 13,950 5
Total revenues 13,945 13,950 5
Expenditures:
Debt issuance costs 109,295 109,292 3
Interest and fiscal requirement 8,510 8,509 1
Total expenditures 117,805 117,801 4
Excess (deficiency) of revenues over
expenditures (103,860) (103,851) 9
Other Financing Sources (Uses):
Proceeds of debt 9,054,995 9,055,000 5
Payment to refunded bond escrow agent (5,627,450) (5,627,447) 3
Premium on debt issued 220,680 220,683 3
Discount on debt issued (53,530) (53,529) 1
Operating transfers in 295,095 295,093 (2)
Operating transfers out (2,522,000) (2,522,000) -
Total other financing sources (uses)1,367,790 1,367,800 (2)
Net change in fund balance 1,263,930$ 1,263,949 7$
Fund balance, July 1, 2013 -
FUND BALANCE, JUNE 30, 2014 1,263,949$
See auditors report on pages 11-12.
-102-
FOR THE YEAR ENDED JUNE 30, 2014
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, 2014
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.
Exhibit C-1
Civic
Center
Current Assets: Fund
Cash and cash equivalents 627,878$ 1$ 627,879$
Receivables, net - - -
Prepaid expense - - -
Total current assets 627,878 1 627,879
Noncurrent Assets:
Net depreciable capital assets 3,136 149,575 152,711
Total assets 631,014 149,576 780,590
Current Liabilities:
Voucher and accounts payable 70,262 7,394 77,656
Accrued compensated absences 1,896 - 1,896
Unearned revenues 52,390 - 52,390
Due to other funds 48,786 - 48,786
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF NET POSITION
NONMAJOR PROPRIETARY FUNDS
JUNE 30, 2014
ASSETS
LIABILITIES
Total Nonmajor
Enterprise
Funds
Section
Eight
Housing
Total current liabilities 173,334 7,394 180,728
Noncurrent Liabilities:
Accrued compensated absences 17,061 - 17,061
Total liabilities 190,395 7,394 197,789
Invested in capital assets 3,136 149,575 152,711
Restricted - Housing 437,483 - 437,483
Unrestricted - (7,393) (7,393)
TOTAL NET POSITION 440,619$ 142,182$ 582,801$
See auditors report on pages 11-12.
NET POSITION
-103-
Exhibit C-2
Civic
Center
Operating Revenues: Fund
Charges for services -$ 41,266$ 41,266$
Miscellaneous 1,639 - 1,639
Total operating income 1,639 41,266 42,905
Operating Expenses:
Cost of sales and service 1,851,990 71,961 1,923,951
Depreciation and amortization 3,877 10,021 13,898
Total operating expenses 1,855,867 81,982 1,937,849
Operating income (loss)(1,854,228) (40,716) (1,894,944)
Non-Operating Revenues (Expenses):
Grants - program purpose 1,901,883 - 1,901,883
Interest and investment income 66 - 66
Gain (loss) on disposal of property
and equipment - - -
Total nonoperating revenues
(expenses)1,901,949 - 1,901,949
Income (loss) before contributions and
transfers 47,721 (40,716) 7,005
Contributions and Operating Transfers:
Transfers in - 27,872 27,872
Transfers out - - -
Total contributions and operating transfers - 27,872 27,872
Change in net position 47,721 (12,844) 34,877
Net position, July 1, 2013 392,898 155,026 547,924
NET POSITION, JUNE 30, 2014 440,619$ 142,182$ 582,801$
See auditors report on pages 11-12.
Eight
Housing
COMBINING STATEMENT OF REVENUES, EXPENSES
CITY OF PADUCAH, KENTUCKY
Total Nonmajor
Enterprise
-104-
FOR THE YEAR ENDED JUNE 30, 2014
NONMAJOR PROPRIETARY FUNDS
AND CHANGES IN NET POSITION
Funds
Section
Exhibit C-3
Civic
Center
Cash Flows from Operating Activities: Fund
Cash received from customers -$ 41,266$ 41,266$
Payments to employees (146,544) - (146,544)
Payments to internal service funds - (2,338) (2,338)
Other receipts 1,639 - 1,639
Housing assistance and other payments (1,702,076) (67,181) (1,769,257)
Net cash provided (used) by operating activities (1,846,981) (28,253) (1,875,234)
Cash Flows from Noncapital
Financing Activities:
Grants - program purpose 1,908,795 - 1,908,795
Transfers from other funds - 27,872 27,872
Transfers to other funds - - -
Net cash provided (used) by noncapital
financing activities 1,908,795 27,872 1,936,667
Cash Flows from Investing Activities:
Interest on cash and investments 66 - 66
Net increase (decrease) in cash and cash
equivalents 61,880 (381) 61,499
Cash and cash equivalents, July 1, 2013 565,998 382 566,380
CASH AND CASH EQUIVALENTS,
JUNE 30, 2014 627,878$ 1$ 627,879$
Reconciliation of Operating Income (Loss) to
Net Cash Provided by Operating Activities:
Operating income (loss)(1,854,228)$ (40,716)$ (1,894,944)$
Adjustments to reconcile operating income (loss)
to net cash provided by operating activities:
Depreciation and amortization 3,877 10,021 13,898
Change in assets and liabilities:
Unearned revenues (6,912) - (6,912)
Accounts payable and accrued expenses 10,282 2,442 12,724
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES (1,846,981)$ (28,253)$ (1,875,234)$
See auditors report on pages 11-12.
Funds
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF CASH FLOWS
NONMAJOR PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2014
-105-
Section
Eight
Housing
Total Nonmajor
Enterprise
CITY OF PADUCAH, KENTUCKY
SUPPLEMENTARY INFORMATION
INTERNAL SERVICE FUNDS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2014
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 6,926$ 3,116,171$ 349,404$ 2,058,011$ 5,530,512$
Investments - - - - -
Receivables, net - 217,500 - 46,339 263,839
Due from other funds - 400,000 - - 400,000
Prepaid expense - 183,732 - 19,945 203,677
Inventories 64,733 - - - 64,733
Total current assets 71,659 3,917,403 349,404 2,124,295 6,462,761
Noncurrent Assets:
Net depreciable capital assets 18,264 3,246,869 - - 3,265,133
Total assets 89,923 7,164,272 349,404 2,124,295 9,727,894
Current Liabilities:
Voucher and accounts payable 13,972 - 6,546 157,941 178,459
Accrued payroll and payroll taxes 17 948 17 948
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF NET POSITION
INTERNAL SERVICE FUNDS
JUNE 30, 2014
LIABILITIES
ASSETS
Fleet
Maintenance
Accrued payroll and payroll taxes 17,948 - - - 17,948
Accrued compensated absences 40,344 - - - 40,344
Deferred revenue - - - 23,122 23,122
Total current liabilities 72,264 - 6,546 181,063 259,873
Noncurrent Liabilities:
Accrued compensated absences 17,659 - - - 17,659
Total liabilities 89,923 - 6,546 181,063 277,532
Invested in capital assets, net
of related debt 18,264 3,246,869 - - 3,265,133
Unrestricted (18,264) 3,917,403 342,858 1,943,232 6,185,229
TOTAL NET POSITION -$ 7,164,272$ 342,858$ 1,943,232$ 9,450,362$
See auditors report on pages 11-12.
-106-
NET POSITION
Exhibit D-2
Health
Fleet Lease Insurance Insurance Combined
Trust Fund Fund Total
Operating Revenues:
Charges for services - internal 355,011$721,421$ 929,614$ 3,282,355$ 5,288,401$
Charges for services - external - - - 286,492 286,492
Total operating revenues 355,011 721,421 929,614 3,568,847 5,574,893
Operating Expenses:
Vehicle maintenance 540,382 - - - 540,382
Administrative - 28,501 - 416,622 445,123
Insurance - - 950,949 2,281,344 3,232,293
Leave expense 5,294 - - - 5,294
Depreciation 10,480 609,352 - - 619,832
Total operating expenses 556,156 637,853 950,949 2,697,966 4,842,924
Operating income (loss)(201,145) 83,568 (21,335) 870,881 731,969
Nonoperating Revenues and (Expenses):
Interest and investment income 25 32,597 - - 32,622
Gain (loss) on disposal of property
and equipment - 36,737 - - 36,737
Total nonoperating revenues
(expenses)25 69,334 - - 69,359
Income (loss) before transfers (201,120) 152,902 (21,335) 870,881 801,328
Contributions and Transfers:
Transfers in 163,829 8,500 98,657 - 270,986
Transfers out - - (8,500) - (8,500)
Total contributions and operating transfers 163,829 8,500 90,157 - 262,486
Change in net position (37,291) 161,402 68,822 870,881 1,063,814
Net position, July 1, 2013 37,291 7,002,870 274,036 1,072,351 8,386,548
NET POSITION, JUNE 30, 2014 -$ 7,164,272$342,858$ 1,943,232$ 9,450,362$
See auditors report on pages 11-12.
-107-
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, 2014
Exhibit D-3
Health
Fleet Lease Insurance Insurance Combined
Cash Flows from Operating Activities: Trust Fund Fund Total
Receipts from other funds for services 355,011$ 752,543$ 929,997$ 3,573,493$ 5,611,044$
Payments to suppliers (226,502) - - - (226,502)
Payments to employees (311,983) - - - (311,983)
Claims paid - - - (2,198,521) (2,198,521)
Other payments - (28,536) (949,187) (416,622) (1,394,345)
Net cash provided (used) by operating activities (183,474) 724,007 (19,190) 958,350 1,479,693
Cash Flows from Noncapital Financing
Activities:
Transfers from other funds 163,829 8,500 98,657 - 270,986
Transfers to other funds - - (8,500) - (8,500)
Net cash provided (used) by noncapital
financing activities 163,829 8,500 90,157 - 262,486
Cash Flows from Capital and Related
Financing Activities:
Proceeds from sale of capital assets - 38,730 - - 38,730
Purchase of capital assets - (970,817) - - (970,817)
Net cash used by capital and related financing - (932,087) - - (932,087)
Cash Flows from Investing Activities:
Interest and dividends 25 32,597 - - 32,622
Net cash used by investing activities 25 32,597 - - 32,622
Net increase (decrease) in cash
and cash equivalents (19,620) (166,983) 70,967 958,350 842,714
Cash and cash equivalents, July 1, 2013 26,546 3,283,154 278,437 1,099,661 4,687,798
CASH AND CASH EQUIVALENTS,
JUNE 30, 2014 6,926$ 3,116,171$349,404$ 2,058,011$ 5,530,512$
Reconciliation of Operating Income (Loss) to
Net Cash Provided by Operating Activities:
Operating income (loss)(201,145)$83,568$ (21,335)$ 870,881$ 731,969$
Adjustments to reconcile operating
income (loss) to net cash provided
(used) by operating activities:
Depreciation and amortization 10,480 609,352 - - 619,832
Change in assets and liabilities:
Receivables - (217,500) 383 5,479 (211,638)
Prepaid expense - 648,622 - 9,484 658,106
Inventories (3,721) - - - (3,721)
Due form other funds - (400,000) - - (400,000)
Accounts payable and accrued expenses 10,912 (35) 1,762 72,506 85,145
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES (183,474)$724,007$ (19,190)$ 958,350$ 1,479,693$
See auditors report on pages 11-12.
-108-
Fleet
Maintenance
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF CASH FLOWS
INTERNAL SERVICE FUNDS
FOR THE YEAR ENDED JUNE 30, 2014
CITY OF PADUCAH, KENTUCKY
SUPPLEMENTARY INFORMATION
FIDUCIARY FUNDS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2014
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 4,689$ 47,868$ 52,557$
Receivables:
Interest 17,299 - 17,299
Prepaid expenses - - -
Investments at fair value
Money market funds 139,544 - 139,544
Certificates of deposits - - -
Common stock 2,969,572 - 2,969,572
Corporate bonds 954,013 - 954,013
U.S. agencies bonds 253,006 - 253,006
Mortgage backed securities - - -
Mutual funds 2,797,666 - 2,797,666
Total assets 7,135,789 47,868 7,183,657
Voucher and accounts payable - - -
Held in trust for pension benefits and
other purposes 7,135,789$ 47,868$ 7,183,657$
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, 2014
ASSETS
LIABILITIES
NET POSITION
-109-
Employees'
Retirement Fund Pension Fund
Firefighters'
Exhibit E-2
Additions:Totals
Contributions:
Employer 420,834$ -$ 420,834$
Plan members 5,354 - 5,354
Total contributions 426,188 - 426,188
Investment earnings:
Net change in fair value of investments 877,920 - 877,920
Interest and dividends 179,806 597 180,403
Net investment earnings 1,057,726 597 1,058,323
Total additions 1,483,914 597 1,484,511
Deductions:
Benefits 1,445,080 21,152 1,466,232
Administrative expenses 48,406 7,483 55,889
Total deductions 1,493,486 28,635 1,522,121
FIDUCIARY FUNDS - PENSION TRUST FUNDS
FOR THE YEAR ENDED JUNE 30, 2014
COMBINING STATEMENT OF CHANGES IN NET POSITION
CITY OF PADUCAH, KENTUCKY
Police and Appointive
Retirement Fund Pension Fund
Employees'Firefighters'
Total deductions 1,493,486 28,635 1,522,121
Change in net position (9,572) (28,038) (37,610)
Net position - beginning 7,145,361 75,906 7,221,267
Net position - ending 7,135,789$ 47,868$ 7,183,657$
See auditors report on pages 11-12.
-110-
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 6,280$
Investments at fair value
Money market funds -
Mutual funds 1,207,517
Total assets 1,213,797
Accounts payable -
Held in trust for other purposes 1,213,797$
FIDUCIARY FUNDS - PRIVATE-PURPOSE TRUST FUNDS
STATEMENT OF NET POSITION
CITY OF PADUCAH, KENTUCKY
ASSETS
LIABILITIES
NET POSITION
JUNE 30, 2014
See auditors report on pages 11-12.
-111-
Exhibit E-4
Cemetery
and
Park
Additions:Trusts
Contributions:
Intergovernmental revenues -$
Private donations 2,615
Total contributions 2,615
Investment earnings:
Change in fair value of investments 115,525
Interest and dividends 59,541
Net investment earnings 175,066
Interfund transfers -
Total additions 177,681
Deductions:
Capital outlay 47,771
Administrative expenses 14,396
Total deductions 62,167
Change in net position 115,514
Net position - beginning 1,098,283
Net position - ending 1,213,797$
See auditors report on pages 11-12.
STATEMENT OF CHANGES IN NET POSITION
CITY OF PADUCAH, KENTUCKY
-112-
FOR THE YEAR ENDED JUNE 30, 2014
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 532,049$ 14,245,555$ 14,213,958$ 563,646$
Liabilities:
Payroll taxes and withholdings
payable 532,049$ 14,245,555$ 14,213,958$ 563,646$
See auditors report on pages 11-12.
CITY OF PADUCAH, KENTUCKY
AGENCY FUND
IN ASSETS AND LIABILITIES
STATEMENT OF CHANGES
-113-
FOR THE YEAR ENDED JUNE 30, 2014
Balance Balance
July 1, 2013 June 30, 2014
CITY OF PADUCAH, KENTUCKY
STATISTICAL SECTION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2014
STATISTICAL SECTION
Contents Page
Financial Trends 114-118
Revenue Capacity 119-124
Debt Capacity 125-128
Economic and Demographic Information 129-130
Operating Information 131-133
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.
2014201320122011 2010 (2) 20092008200720062005 (1)Governmental activities:Invested in Capital Assets, Net of Related Debt39,844,772$ 33,365,112$ 31,957,381$ 32,905,977$ 31,136,514$ 31,215,252$ 31,766,783$ 32,557,572$ 30,664,671$ 29,492,197$ Restricted for:Program purposes205,979 284,760 897,942 1,264,986 1,100,696 2,183,559 1,782,251 1,904,321 1,018,231 727,699 Capital projects2,168,201 1,301,421 4,105,639 5,987,399 5,077,026 4,363,913 5,028,420 4,618,923 2,689,804 940,323 Unrestricted13,382,066 13,539,204 5,913,997 4,229,501 8,165,101 8,621,077 9,432,763 9,057,641 7,718,198 7,419,037 Total governmental activities net position55,601,018$ 48,490,497$ 42,874,959$ 44,387,863$ 45,479,337$ 46,383,801$ 48,010,217$ 48,138,457$ 42,090,904$ 38,579,256$ Business-type activities:Invested in Capital Assets, Net of Related Debt1,210,415 1,232,735 1,308,574 1,334,230 1,652,961 1,721,419 1,863,975 1,491,523 1,277,720 1,463,118 Restricted for:Program purposes437,483 385,885 732,817 999,885 620,800 369,368 579,460 - - - Unrestricted3,837,034 3,428,267 3,246,320 3,004,783 1,816,705 1,036,093 (19,965) (147,286) 132,090 (27,648) Total business-type activities net postion5,484,932$ 5,046,887$ 5,287,711$ 5,338,898$ 4,090,466$ 3,126,880$ 2,423,470$ 1,344,237$ 1,409,810$ 1,435,470$ Primary government:Invested in Capital Assets, Net of Related Debt41,055,187 34,597,847 33,265,955 34,240,207 32,789,475 32,936,671 33,630,758 34,049,095 31,942,391 30,955,315 Restricted for:Program purposes643,462 670,645 1,630,759 2,264,871 1,721,496 2,552,927 2,361,711 1,904,321 1,018,231 727,699 Capital projects2,168,201 1,301,421 4,105,639 5,987,399 5,077,026 4,363,913 5,028,420 4,618,923 2,689,804 940,323 Unrestricted17,219,100 16,967,471 9,160,317 7,234,284 9,981,806 9,657,170 9,412,798 8,910,355 7,850,288 7,391,389 Total primary government net position61,085,950$ 53,537,384$ 48,162,670$ 49,726,761$ 49,569,803$ 49,510,681$ 50,433,687$ 49,482,694$ 43,500,714$ 40,014,726$ (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)-114-
Pages 1 of 22014 2013 2012 2011 2010 (3) 2009 2008 (2) 2007 2006 2005 (1)ExpensesGovernmental activities:General government 8,005,619$ 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$ Public safety 18,439,670 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 Public service 6,982,536 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 Parks and recreation 2,750,531 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 Planning and development 1,805,379 1,463,659 1,192,952 1,212,103 970,022 708,827 282,042 1,891,725 2,404,636 2,521,412 Interest on long-term debt 1,084,016 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 Total governmental activities expenses39,067,751 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 Business-type activities:Solid Waste3,985,233 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 Section Eight Housing1,855,869 2,032,843 1,921,004 1,956,728 2,061,370 2,154,360 1,949,899 - - - Civic Center81,982 78,000 71,069 76,546 69,537 75,692 84,908 54,562 45,894 39,008 TISA- - 173,708 183,546 206,798 162,848 156,388 267,192 269,781 170,264 Total business-type activities expenses5,923,084 6,078,333 6,066,045 6,048,950 6,134,802 6,430,745 6,277,942 4,401,438 4,208,688 3,893,226 Total primary government expenses44,990,835$ 43,535,122$ 47,119,962$ 45,481,052$ 44,529,697$ 50,394,007$ 45,105,192$ 41,570,038$ 40,768,499$ 37,537,576$ Program RevenuesGovernmental activities:Charges for services:General government 1,672,552$ 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$ Public safety 264,143 354,829 509,297 790,650 484,754 602,262 268,839 1,024,610 767,086 794,814 Public service 960,271 963,893 1,032,953 1,205,666 1,197,194 1,220,999 1,111,188 1,150,507 942,355 895,155 Parks and recreation 105,248 106,183 97,896 129,790 152,890 180,420 124,606 122,929 103,932 117,317 Planning and development - - - - - 1,600 30,627 10,810 20,602 13,501 Operating grants and contributions 5,419,715 3,067,581 2,215,247 2,086,625 1,813,019 2,119,845 1,340,261 2,797,216 2,988,612 2,452,694 Capital grants and contributions 4,136,749 2,165,548 533,169 1,767,093 1,390,848 4,889,520 1,297,900 3,681,490 3,302,568 1,100,064 Total governmental activities program revenues 12,558,678 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 Business-type activities:Solid Waste 4,410,059$ 4,372,060$ 4,437,341$ 4,476,139$ 4,436,540$ 4,547,959$ 4,165,094$ 3,928,140$ 3,696,609$ 3,583,417$ Section Eight Housing- - - - - - - - - - Civic Center 41,266 38,265 34,038 33,766 32,455 38,577 32,932 31,372 26,378 32,828 TISA99,603 138,797 148,158 148,291 143,833 193,713 106,697 104,087 Operating grants and contributions 1,956,995 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 Total business-type activities program revenues 6,408,320 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 Total primary government program revenues 18,966,998$ 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$ TABLE 2CITY OF PADUCAH, KENTUCKYCHANGES IN NET POSITIONLast Ten Fiscal Years (accrual basis of accounting)Fiscal Year-115-
Pages 2 of 22014 2013 2012 2011 2010 (3) 2009 2008 (2) 2007 2006 2005 (1)Net (Expense)/RevenueGovernmental activities(26,509,073)$ (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)$ Business-type activities485,236 59,230 168,184 1,008,951 849,857 399,050 (140,794) (224,244) (356,110) (158,159) Total primary government net (expense) (26,023,837)$ (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)$ General Revenues and Other Changesin Net PositionGovernmental activities:Taxes and licenses:Property taxes, levied for general purpose4,622,292 4,502,276 4,267,812 4,402,226 4,207,736 3,986,760$ 4,221,957 4,122,538$ 4,107,934$ 3,919,113$ Insurance premium tax 3,831,792 3,863,464 3,690,806 3,476,309 3,797,347 4,055,228 4,699,458 4,414,672 3,863,953 3,957,289 Gross receipts license tax 4,444,440 4,391,352 4,359,835 4,243,511 4,229,102 4,320,850 4,061,587 4,050,057 3,899,432 3,720,784 Employee license tax 18,114,396 18,336,124 18,095,182 17,345,033 16,384,509 16,584,636 16,520,523 16,273,966 14,794,217 11,192,445 Other taxes 2,785,333 2,799,043 2,711,924 2,712,817 2,844,154 2,776,407 2,259,956 1,964,101 2,105,014 2,116,403 Intergovernmental revenue - - - - - - 1,401,400 1,243,028 1,201,973 955,645 Unrestricted investment earnings 232,204 211,306 203,261 264,913 172,213 336,960 540,620 639,702 462,292 290,647 Gain on sale of capital assets (482,137) 383,370 36,718 62,539 64,620 68,530 119,200 48,656 8,340 - Miscellaneous - (82,992) Insurance recoveries - - 27,448 410,462 - - - - - - Litigation settlement- - - (1,482,743) - - - - - - Transfers in/out212,128 485,138 270,620 (125,772) (78,893) (110,838) (96,609) (58,175) (115,754) (133,959) Total governmental activities33,760,448 34,889,081 33,663,606 31,309,295 31,620,788 32,018,533 33,728,092 32,698,545 30,327,401 26,018,367 Business-type activities:Unrestricted investment earnings48,255 49,382 48,806 46,052 33,724 52,961 73,985 83,854 85,786 51,508 Gain on sale of capital assets13,422 52,710 2,443 67,657 1,112 98,369 127,131 16,641 55,337 27,500 Miscellaneous103,260 82,992 Transfers(212,128) (485,138) (270,620) 125,772 78,893 110,838 96,609 58,176 115,754 133,959 Total business-type activities(47,191) (300,054) (219,371) 239,481 113,729 262,168 297,725 158,671 256,877 212,967 Change in Net PositionGovernmental activities:7,251,375 5,615,538 (1,512,904) (1,091,474) (742,031) (1,626,416) 490,206 6,047,553 3,511,648 (767,433) Business-type activities:438,045 (240,824) (51,187) 1,248,432 963,586 661,218 156,931 (65,573) (99,233) 54,808 Total primary government 7,689,420$ 5,374,714$ (1,564,091)$ 156,958$ 221,555$ (965,198)$ 647,137$ 5,981,980$ 3,412,415$ (712,625)$ (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.TABLE 2(accrual basis of accounting)CHANGES IN NET POSITION-116-Fiscal YearCITY OF PADUCAH, KENTUCKYLast Ten Fiscal Years
2014201320122011 2010 (3) 2009 2008 (2) 20072006 2005 (1)General FundUnassigned12,694,610$ 12,311,565$ 11,321,438$ 10,940,121$ 10,208,678$ 10,311,490$ 9,416,427$ 9,976,079$ 9,157,310$ 8,303,702$ Total general fund12,694,610$ 12,311,565$ 11,321,438$ 10,940,121$ 10,208,678$ 10,311,490$ 9,416,427$ 9,976,079$ 9,157,310$ 8,303,702$ All Other Governmental FundsRestricted for:Program purposes205,979$ 284,760$ 1,236,780$ -$ -$ -$ -$ -$ -$ -$ Capital improvements2,168,201 1,301,421 286,276 - - - - - - - Committed for:Capital improvements1,758,934 2,589,099 2,631,233 2,587,012 2,844,706 2,618,147 2,081,280 1,692,872 719,801 - Assigned for:Program purposes802,692 752,691 472,235 683,578 1,402,731 1,634,547 1,193,968 1,543,547 1,573,977 1,548,082 Capital improvements3,206,412 3,055,250 1,487,938 2,133,786 5,151,791 1,745,766 2,947,140 2,926,051 1,970,003 940,323 Total all other governmental funds 8,142,218$ 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$ (1) Significant increase in general fund balance due to reclassification for prior year omitted license and tax receivables in the amount of $3,870,992. (2) Significant decrease in reserve for program purpose due to converting governmental fund to proprietary fund.(3) Significant decrease in general fund balance due to restatement of prior year grant receivables-117-Fiscal YearTABLE 3CITY OF PADUCAH, KENTUCKYFund Balances, Governmental FundsLast Ten Fiscal Years (modified accrual basis of accounting)
2014201320122011201020092008200720062005Revenues:Taxes6,713,889$ 6,583,690$ 6,343,608$ 6,223,511$ 6,326,740$ 5,867,782$ 6,139,164$ 6,044,069$ 6,204,686$ 6,016,570$ Licenses26,987,110 27,197,290 26,753,432 25,704,849 24,979,768 25,411,112 25,924,562 25,140,615 23,432,565 19,368,765 Charges for services851,080 815,791 817,607 811,590 846,087 866,688 835,105 783,018 654,059 625,281 Intergovernmental2,624,363 1,240,312 1,191,835 1,148,362 1,091,324 1,086,377 1,565,348 1,676,783 1,529,879 1,192,724 Grants5,923,651 3,737,402 1,699,399 2,992,519 2,062,554 5,405,810 1,673,936 6,089,711 5,797,500 3,758,041 Interest199,583 175,371 162,580 205,837 121,246 225,251 419,103 540,204 402,943 251,302 Other3,271,860 2,743,698 1,902,075 1,790,890 2,653,382 2,250,344 1,944,310 1,832,161 1,844,285 1,377,175 Total revenues46,571,536 42,493,554 38,870,536 38,877,558 38,081,101 41,113,364 38,501,528 42,106,561 39,865,917 32,589,858 Expenditures:General government4,311,103 4,481,485 5,117,194 5,151,370 5,277,916 4,726,435 5,051,374 4,763,839 4,286,431 4,171,662 Public safety18,475,471 18,174,349 18,479,428 16,854,136 15,999,437 15,599,613 15,696,728 14,759,735 14,366,846 14,376,161 Public service6,323,481 5,710,018 5,596,702 6,446,503 5,984,115 7,855,846 7,935,188 7,226,542 7,418,656 5,947,105 Parks and recreation2,763,773 2,664,164 2,677,781 2,781,663 2,582,382 1,490,732 1,298,329 1,192,727 1,044,299 1,045,024 Planning and development2,086,527 1,776,897 2,216,665 1,680,297 1,868,369 1,811,083 803,976 2,424,198 2,545,227 2,267,774 Other640,452 766,847 516,534 486,239 847,188 514,488 520,611 526,238 481,690 462,099 Capital outlay11,926,435 4,324,821 2,104,993 5,121,682 8,324,312 8,580,910 4,826,983 6,504,491 5,003,091 4,870,136 Debt service:Principal requirement1,748,233 1,698,468 1,434,246 2,233,588 1,020,585 830,682 880,887 782,870 594,047 552,938 Debt issuance costs109,292 - - - - - - - - - Interest and fiscal requirement 1,086,866 1,089,447 1,114,852 1,519,329 1,077,128 1,003,439 1,051,008 1,108,385 949,537 745,676 Total expenditures49,471,633 40,686,496 39,258,395 42,274,807 42,981,432 42,413,228 38,065,084 39,289,025 36,689,824 34,438,575 Other Financing Sources (Uses):Bonds issued9,055,000 - - - 6,645,000 1,718,605 - - 6,100,000 - Payment to bond escrow agent(5,627,447) - - - - - - - - - Premium on debt issued220,683 - - - - - - - - - Discount on debt issued(53,529) - - - - - - - - - Long-term debt draws/issued- 308,112 101,983 366,039 1,480,781 69,032 - 246,667 - 275,000 Capital lease- 405,796 405,796 405,796 405,796 405,796 371,979 - - - Transfers in9,148,761 7,462,944 5,888,847 8,455,433 9,722,852 5,928,413 6,241,886 5,209,977 6,034,070 3,394,420 Transfers out(9,199,119) (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) Total other financing sources (uses)3,544,349 1,051,828 587,087 1,026,015 8,360,720 1,970,999 (472,652) (100,078) (547,110) (1,042,751) Net change in fund balances644,252$ 2,858,886$ 199,228$ (2,371,234)$ 3,460,389$ 671,135$ (36,208)$ 2,717,458$ 2,628,983$ (2,891,468)$ Capital outlay (1)10,843,726$ 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$ Debt service as a percentageof noncapital expenditures7.34%7.61%6.87%10.02%6.13%4.64%5.49%5.46%4.69%4.26%(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.-118-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 RateExemptions2005 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 2014 826,805,152 743,249,074 585,142,381 41,487,586 2,196,684,193 2,270,597,754 0.292 96.7% 73,913,561 Source: McCracken County Property Valuation AdministratorNotes: Property in McCracken county is reassessed once every four years on average.-119-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 Personal2005 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 0.020 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 0.018 0.018 0.096 0.106 2010 0.250 0.390 0.286 0.504 0.504 0.678 0.678 0.018 0.018 0.095 0.095 2011 0.250 0.390 0.288 0.504 0.504 0.711 0.711 0.018 0.018 0.095 0.098 2012 0.250 0.390 0.287 0.504 0.504 0.747 0.747 0.018 0.018 0.098 0.119 2013 0.250 0.390 0.288 0.504 0.504 0.747 0.747 0.017 0.017 0.096 0.102 2014 0.255 0.390 0.292 0.504 0.504 0.767 0.767 0.017 0.017 0.095 0.101 Source: McCracken County Property Valuation Administrator and City Tax Levy Ordinance.TABLE 6CITY OF PADUCAH, KENTUCKYPROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS(PER $100 OF ASSESSED VALUE)LAST TEN FISCAL YEARSGeneral FundCity Direct RatesMcCracken Co.City of Paducah-120-McCracken PaducahSchool DistrictsSchool DistrictsJunior CollegeCounty
(1)(2)
(1)(2)
Assessed Assessed
Taxpayer Valuation Valuation
Kentucky Oaks Mall 50,900,262$ 2.37%42,611,499$ 3.07%
Paducah Medical Investors 13,440,090 0.63%13,440,090 0.97%
Ducmall LLC 13,119,800 0.61%14,225,000 1.03%
Woodstone Enterprises LP 12,429,000 0.58%
Paducah Hospitality Partners 11,000,000 0.51%
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%9,083,185 0.66%
Wal Mart Store 9,000,000 0.42%33,968,895 2.45%
USF Propco I LLC 8,156,900 0.38%
Lowe's 12,136,826 0.88%
Sams East Inc 14,711,574 1.06%
Lourdes Medical Pavilion 15,982,400 1.15%
TOTALS 146,998,592$ 6.85%156,159,469$ 11.27%
(1) Source - Property Valuation Administration; Assessed value as of January 1, 2013.
(2) Source - Property Valuation Administration; Assessed value as of January 1, 2004.
TABLE 7
CITY OF PADUCAH, KENTUCKY
PRINCIPAL TAXPAYERS - PROPERTY TAX
CURRENT YEAR AND NINE YEARS PRIOR
2014 2005
-121-
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
3,832,923 3,762,592 98.2% 64,191 3,826,783 99.8%
4,011,918 3,911,868 97.5% 92,180 4,004,048 99.8%
3,998,236 3,855,679 96.4% 132,926 3,988,605 99.8%
3,972,547 3,814,940 96.0% 147,896 3,962,836 99.8%
4,198,580 4,017,032 95.7% 165,599 4,182,631 99.6%
4,255,451 4,131,454 97.1% 104,155 4,235,609 99.5%
4,195,341 4,110,973 98.0% 59,398 4,170,371 99.4%
4,225,290 4,119,689 97.5% 72,679 4,192,368 99.2%
4,438,878 4,334,698 97.7% 58,410 4,393,108 99.0%
4,607,868 4,509,874 97.9%- 4,509,874 97.9%
(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
-122-
2013
2005
Collected within the
Fiscal Year of the Levy
Taxes Levied
Fiscal
for the
2006
2007
2014
2011
2012
2008
2009
2010
(1)Direct
Fiscal Taxes Tax
Year Collected Rate
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%
2014 18,114,396 2.00%
163,785,343
(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%.
-123-
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 2,479 98.10% 8,768,786 48.41%
$50,001 - $100,000 23 0.91% 1,721,032 9.50%
$100,001 - $500,000 23 0.91% 4,761,329 26.28%
Greater than $500,000 2 0.08% 2,863,249 15.81%
TOTALS 2,527 100.00% 18,114,396$ 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 eight years prior is the earliest date this statistic is available.
2014
2006
TABLE 10
CITY OF PADUCAH, KENTUCKY
PRINCIPAL EMPLOYEE LICENSE TAXPAYERS
CURRENT YEAR AND EIGHT YEARS PRIOR*
-124-
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 Capita2005 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 22,037,960 6,920,838 - - - 28,958,798 1.31 5.76% 1,157 2014 24,202,474 6,519,356 - - - 30,721,830 1.35 6.11% 1,228 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-125-ImprovementDebtNetPublicDebtImprovementTABLE 11CITY OF PADUCAH, KENTUCKYRATIO OF OUTSTANDING DEBT BY TYPELAST TEN FISCAL YEARSPublic
(1)Ratio ofInfinitiPublicNetConvention & Media Floodwall ImprovementPublic PoolEconomicBonds toFiscal Art CenterBuildingRehabilitation ProjectRenovation DevelopmentActualYear Bonds Bonds Bonds Bonds Bonds Bonds Total Value2005 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 3,630,000 2,455,210 6,100,000 - - 35,088 23,675,122 1.12 946 2013 6,220,000 4,655,000 3,370,000 2,341,790 5,825,000 - - 316,458 22,095,332 1.00 883 2014 5,805,000 4,400,000 3,100,000 2,224,863 5,460,000 1,120,000 2,475,000 503,817 24,081,046 1.06 962 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 yea(2) See Table 16 for population data.-126-TABLE 12CITY OF PADUCAH, KENTUCKYRATIO OF NET GENERAL BONDED DEBT OUTSTANDINGLAST TEN FISCAL YEARSCapitaLessResourcesAvailable forDebt Service(2)NetBonds PerPolice andFire PensionFundBonds
Estimated
(1) Share of
Reported Percentage Direct and
Debt Applicable Overlapping
Outstanding to the City Debt
City of Paducah 28,958,798$ 100.00% 28,958,798$
Paducah Independent School District 49,054,401 * 100.00% 49,054,401
McCracken County 27,208,678 * 46.00% 12,515,992
McCracken County Board of Education 71,350,973 * 31.60% 22,546,907
Overlapping debt 147,614,052 84,117,300
TOTAL DIRECT AND OVERLAPPING DEBT 176,572,850$113,076,098$
(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.
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TABLE 13
CITY OF PADUCAH, KENTUCKY
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
AS OF JUNE 30, 2014
Net assessed value2,196,684,193$ Add exemption73,913,561 Total assessed value2,270,597,754$ Debt limit - 10% of total assessed (1)227,059,775$ Debt outstanding:General obligation bonds outstanding24,706,291$ Note payable6,519,356 Less debt not subject to limit- Gross bonded debt31,225,647 Less amount available in debt servicefunds503,817 Net bonded indebtedness subject tolimit30,721,830 LEGAL DEBT MARGIN196,337,945$ 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005Debt limit 227,059,775$ 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$ Total net debt applicable to limit 30,721,830 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 LEGAL DEBTMARGIN196,337,945$ 192,531,550$ 181,270,901$ 180,595,607$ 176,318,906$ 182,051,405$ 176,454,434$ 161,160,857$ 152,896,205$ 151,636,090$ Total net debtapplicable to thelimited as a percentage ofdebt limit 13.53% 13.08% 14.58% 14.13% 15.11% 12.03% 10.44% 11.82% 12.68% 9.93%(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."-128-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 2,819 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%
25,024 503,179,300 20,430 41.4 3,138 8.2%
Income
2004-2005
2005-2006
2006-2007
2007-2008
2008-2009
2009-2010
2010-2011
Fiscal Year Population
2011-2012
2012-2013
2013-2014
TABLE 15
CITY OF PADUCAH, KENTUCKY
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN FISCAL YEARS
(1) (1) (2)(3)
Per Capita Median School Unemployment
Enrollment RateAge
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.
-129-
Percentage ofPercentage ofTotalTotalEmployees (1) Employment (2) Employees (1) Employment (2)Western Baptist Hospital 1,636 5.75% 1,660 5.55%Lourdes Hospital 1,511 5.31% 1,500 5.01%Wal Mart 1,002 3.52% 570 2.01%Paducah Public Schools 591 2.08% 600 1.91%West Kentucky Community and Technical College 532 1.87% 270 0.90%City of Paducah 307 1.08% 353 1.27%State of Kentucky 346 1.22% 390 1.30%Parkview Convalescent Center3001.05%LYNX Services3121.10%3901.30%Paxton Media Group2440.86%2850.95%Computer Services, Inc.2490.87%2800.94%TOTALS7,03024.69%6,29821.14%(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 eight years prior is the earliest date this statistic is available.-130-EmployerTABLE 16CITY OF PADUCAH, KENTUCKYPRINCIPAL EMPLOYERSCURRENT YEAR AND EIGHT YEARS PRIOR*20062014
2014 2013 2012 2011 2010 2009 2008 2007 2006 2005Governmental ActivitiesGeneral governmentGeneral administration 11 12 12 12 12 12 12 12 12 11Finance 11 11 11 14 14 17 14 14 14 13Inspection 0 0 11 11 10 13 13 13 12 12Information systems5666644433Risk/Human resources3331114444Public safetyPolice 87 88 90 90 90 93 93 93 93 96Fire 76 74 64.5 64 65 69 69 71 76 75Public serviceStreets 20 20 23 23 23 29 29 30 31 28Facilities 13.5 13.5 11.5 14 34 36 35 34 35 38Engineering 6.6 7.6 7.67589999Other5556466644Parks and recreation24242424777779Planning and development999991011111111OtherPaducah Riverfront Dev. Authority1110000000Renaissance3345350000Fleet maintenance 6.5 6.5 6.5 6.5867777Business-type ActivitiesSolid waste25.4 25.4 25.4 26 27 27 27 27 29 29TOTAL PRIMARY GOVERNMENT307309314.5318318343340342347349* Employee budget census.-131-Fiscal YearTABLE 17CITY OF PADUCAH, KENTUCKYCITY FULL-TIME EMPLOYEES BY FUNCTION*Last Ten Fiscal Years
2014 2013 2012 2011 2010 2009 2008 2007 2006 2005General governmentBuilding and electrical permits issued1,251 1,202 1,232 1,239 1,263 1,179 1,203 1,411 1,362 1,376 Business licenses issued 3,717 3,966 3,956 3,254 3,397 3,691 3,507 3,500 3,700 *Public safetyPoliceAdult arrests 2,546 2,508 2,753 3,564 3,859 4,454 4,170 5,012 3,827 *Murder 3 - 3 3 1 5 - - - *Rape17 16 14 22 12 20 15 18 15 *Robberies36 38 14 31 56 41 49 42 35 *Burglary127 142 123 155 245 169 203 208 211 *Auto theft60 41 47 54 62 57 60 117 104 *Arson3 5 7 6 7 7 8 16 7 *Traffic accidents1,664 1,573 1,666 1,762 1,774 1,368 1,519 1,949 1,815 *Traffic violations 6,821 10,168 8,573 7,701 7,240 9,143 7,109 7,323 7,468 *FireEmergency responses2,935 3,054 3,164 3,181 2,603 3,305 2,603 2,456 2,546 3,219 Fires extinguished 115 105 138 122 133 136 102 163 181 176 Structure fires 35 33 53 37 49 57 49 40 53 49 Incidents with reportedlosses56 55 89 73 89 85 70 80 91 97 Medical/rescue2,080 2,151 2,270 2,133 1,690 1,616 1,506 1,369 1,589 1,997 Tours/in-services/carseats378 570 524 671 676 907 699 485 485 485 Training man hours 8,959 9,155 7,232 7,033 8,493 7,716 4,344 1,183 1,418 1,188 Inspections 1,710 1,157 1,417 1,063 985 1,183 1,449 ** *Refuse collectionResidentialRefuse collected (tons 36 36 34 34 38 32 25 28 34 *per day)Customers served9,600 9,478 9,488 9,568 9,445 9,435 9,446 9,388 9,368 *CommercialRefuse collected (tons61 65 71 71 70 75 83 85 84 *per day)Customers served927 805 803 806 810 810 821 832 801 *Public service911 dispatches83,614 92,786 79,333 82,268 79,768 81,525 83,871 76,815 83,348 85,273Police43,877 51,131 43,686 44,794 42,496 40,921 43,420 41,887 47,091 48,275Fire3,517 4,747 3,189 3,226 2,702 2,490 2,720 2,399 2,907 3,424 Other36,220 36,908 32,458 34,248 34,570 38,114 37,731 32,529 33,350 33,574* Information not available.** Information from city departments.-132-Fiscal YearTABLE 18CITY OF PADUCAH, KENTUCKYOPERATING INDICATORS BY FUNCTION**Last Ten Fiscal Years
2014 2013 2012 2011 2010 2009 2008 2007 2006 2005Public safetyPoliceStations1111111111FireStations5555555555Refuse collectionCollection trucksResidential 10 10 1099710988Commercial4444545544Other public worksStreets (miles paved) 218 218 218 218 218 216 216 216 214 214Sidewalks (miles) 47 47 47 47 47 45 45 45 45 45Traffic signals 13 13 13 13 13 12 11 11 11 11Parks and recreationParks 28 27 27 27 27 27 27 27 18 18Acreage 960 960 1125 1125 1125 960 960 960 325 325Community centers2222111111Swimming pools1111111111Public tennis courts6666666666Public golf courses2222222222* Information from city departments.-133-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, 2014
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 1,851,991$
Economic Development Initiative Special Project 14.251 B06NIKY0016 1,891,291
Pass-through Kentucky Governors
Office for Local Development:
Community Development Block Grants 14.228 10-109 656,227
14.228 13-005 156,055
Passed-through Kentucky Housing Corporation:
Home Investment Partnerships Program 14.239 HB12-198-01 158,000
Total Department of Housing and Urban
Development 4,713,564
Department of Justice:
Direct Programs:
Bulletproof Vest Partnership Program 16.607 N/A 7,436
Edward Byrne Memorial Justice
Assistance Grant Program 16.738 N/A 13,382
Total Department of Justice 20,818
Department of Homeland Security:
Direct Programs:
Ait tFifiht G t 97 044 N/A 49 040
Expenditures
CITY OF PADUCAH, KENTUCKY
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2014
Federal Grantor/Pass-Through Grantor/
Assistance to Firefighters Grant 97.044 N/A 49,040
Passed-through Kentucky Division of
Emergency Management:
Hazardous Mitigation Grant Program 97.039 PON2 095 1200003957 1 5,037
Passed-through Kentucky Office of
Homeland Security:
Homeland Security Grant Program 97.067 PO2 094 1400002736 1 32,000
Total Department of Homeland Security 86,077
Department of Transportation:
Passed-through Kentucky Transportation Cabinet
State and Community Highway Safety 20.600 PT-13-52 25,172
State and Community Highway Safety 20.600 PT-14-36 23,215
Highway Planning and Construction 20.205 DD-13-05 10,000
Highway Planning and Construction 20.205 DD-14-08 30,000
Highway Planning and Construction 20.205 DD-14-40 3,838
Highway Planning and Construction 20.205 P02-628-0600003374 213,949
Highway Planning and Construction 20.205 1400001907 1,646,936
Total Department of Transportation 1,953,110
TOTAL EXPENDITURES OF FEDERAL AWARDS 6,773,569$
See accompanying notes to schedule of expenditures of federal awards.
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CITY OF PADUCAH, KENTUCKY
NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2014
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 $156,055
-135-
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, 2014, 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 8, 2014.
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 8, 2014
-137-
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, 2014. 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, 2014.
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 8, 2014
-139-
CITY OF PADUCAH, KENTUCKY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2014
Section I – Summary of Auditor’s Results
1. The independent auditor’s report expresses an unmodified 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 unmodified 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
Section 8 Housing Choice Vouchers
14.871
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).
-140-
CITY OF PADUCAH, KENTUCKY
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
YEAR ENDED JUNE 30, 2013
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).
-141-