HomeMy WebLinkAboutJune-30-2022CITY OF PADUCAH,
KENTUCKY
ANNUAL COMPREHENSIVE
FINANCIAL REPORT
YEAR ENDED JUNE 30, 2022
FINANCE DEPARTMENT
CITY OF PADUCAH,
KENTUCKY
City of Paducah
Paducah, Kentucky
Annual Comprehensive Financial Report
Year Ended June 30, 2022
Issued by the
Finance Department
CITY OF PADUCAH, KENTUCKY
ANNUAL COMPREHENSIVE FINANCIAL REPORT
YEAR ENDED JUNE 30, 2022
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
11-13
Required Supplementary Information:
Management's Discussion and Analysis
14-29
Basic Financial Statements:
Government -wide Financial Statements:
Statement of Net Position
1
30-31
Statement of Activities
2
32-33
Fund Financial Statements:
Governmental Funds:
Balance Sheet
3
34-35
Reconciliation of the Governmental Funds Balance
Sheet to Statement of Net Position
4
36-37
Statement of Revenues, Expenditures and Changes
in Fund Balances
5
38-39
Reconciliation of the Statement of Revenues,
Expenditures and Changes in Fund Balances of
Governmental Funds to the Statement of Activities
6
40-41
Statement of Revenues, Expenditures and Changes -
Budget and Actual - General Fund
7
42-45
Statement of Revenues, Expenditures and Changes -
Budget and Actual - Special Revenue Investment Fund
8
46
Proprietary Funds:
Statement of Net Position
9
47
Statement of Revenues, Expenses and Changes in
Net Position
10
48
Statement of Cash Flows
11
49
Fiduciary Funds:
Statement of Net Position
12
50
Statement of Changes in Net Position
13
51
Notes to Financial Statements
52-102
Required Supplementary Information:
Schedule of Changes in the Police and Firefighters'
Pension Trust Fund's Net Pension Liability and Related Ratios
A-1
103
Schedule of Changes in the Appointive Employees'
Pension Trust Fund's Net Pension Liability and Related Ratios
A-2
104
Schedule of Police and Firefighters' Pension Trust Fund
Contributions and Investment Returns
A-3
105
Schedule of Changes in the Appointive Employees'
Pension Trust Fund Contributions and Investment Returns
A-4
106
Schedule of City's Proportionate Share of the Net Pension Liability
County Employees' Retirement System
A-5
107
Exhibit No. Page No.
Schedule of City's Contributions - Pensions
County Employees' Retirement System
A-6
108
Schedule of City's Proportionate Share of the Net Medical Insurance
Plan Liability - County Employees' Retirement System
A-7
109
Schedule of City's Contributions — Medical Insurance Plan
County Employees' Retirement System
A-8
110
Supplementary Information:
Bond Fund Detail Schedule of Revenues, Expenditures and Changes -
Budget and Actual
B-1
111
General Capital Improvements Detail Schedule of
Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual
B-2
112
Debt Service Fund Detail Schedule of Revenues,
Expenditures, and Changes in Fund Balance - Budget
and Actual
B-3
113
Nonmajor Governmental Funds:
Combining Balance Sheet
B-4
114-115
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances
B-5
116-117
Detail Statement of Revenues, Expenditures, and
Changes in Fund Balance - Budget and Actual:
Municipal Aid Fund
B-6
118
Emergency Communication Service Fund
B-7
119
Court Awards Fund
B-8
120
CDBG Grant Fund
B-9
121
Bed Tax Fund
B-10
122
Nonmajor Enterprise Funds:
Combining Statement of Net Position
C-1
123
Combining Statement of Revenues, Expenses and
Changes in Fund Net Position
C-2
124
Combining Statement of Cash Flows
C-3
125
Internal Service Funds:
Combining Statement of Net Position
D-1
126
Combining Statement of Revenues, Expenses, and
Changes in Fund Net Position
D-2
127
Combining Statement of Cash Flows
D-3
128
Fiduciary Funds:
Combining Statement of Net Position -
Private -purpose Trust Funds
E-1
129
Combining Statement of Changes in Net Position -
Private -purpose Trust Funds
E-2
130
Table No.
Page No.
Statistical Section:
Net Position by Component
1
131
Changes in Net Position
2
132-133
Fund Balances, Governmental Funds
3
134
Changes in Fund Balances, Governmental Funds
4
135
Assessed and Estimated Actual Value of
Taxable Property
5
136
Governments
6
137
Principal Taxpayers
7
138
Secured Tax Levies and Collections
8
139
Employee License Tax Collections
9
140
Single Audit Section:
Schedule of Expenditures of Federal Awards 151
Notes to the Schedule of Expenditures of Federal
Awards 152
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 153-154
Independent Auditor's Report on Compliance for Each Major
Program and on Internal Control Over Compliance Required by
Uniform Guidance 155-156
Schedule of Findings and Questioned Costs 157
Schedule of Prior Audit Findings 158
Table No.
Page No.
Statistical Section:
Principal Employee License Taxpayers
10
141
Ratio of Outstanding Debt by Type
11
142
Ratio of Net General Bonded Debt Outstanding
12
143
Direct and Overlapping Governmental
Activities Debt
13
144
Legal Debt Margin Information
14
145
Demographic and Economic Statistics
15
146
Principal Employers
16
147
City Full -Time Employees by Function
17
148
Operating Indicators by Function
18
149
Capital Asset Statistics by Function
19
150
Single Audit Section:
Schedule of Expenditures of Federal Awards 151
Notes to the Schedule of Expenditures of Federal
Awards 152
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 153-154
Independent Auditor's Report on Compliance for Each Major
Program and on Internal Control Over Compliance Required by
Uniform Guidance 155-156
Schedule of Findings and Questioned Costs 157
Schedule of Prior Audit Findings 158
Honorable Mayor and Commissioners
City of Paducah
Paducah, Kentucky
CITY OF PADUCAH
Finance Department
P.O. Box 2267
Paducah, KY 42002-2267
270-444-8512
December 21, 2022
We are pleased to submit Paducah's Annual Comprehensive Financial Report for the year ended June 30,
2022. 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, 2022,
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 ACFR.
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
Paducah has a mix of commercial, industrial, cultural, institutional, and hospitality -based businesses.
Healthcare and education services are among the top employers. The accredited Paducah Area Chamber of
Commerce is one of the largest in the state with approximately 1,000 business members.
With Paducah's easy river access and rail service, the City is the headquarters for several river industry
giants including Ingram Barge, Marquette Transportation, James Marine, and Crounse Corporation.
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Paducah is at the center of inland waterways linking cities including Pittsburgh and Minneapolis/St. Paul
to the Gulf of Mexico. The Paducah Riverport Authority is positioned for growth in the sector of intermodal
river transportation through the purchase of the largest flat -top tower crane in North America. In 2015, the
U.S. Department of Commerce Foreign Trade Zone Board approved the Riverport to establish a foreign -
trade zone, an incredible business tool.
Economic Development Activities
Greater Paducah Economic Development (GPED) coordinates the City's efforts in strengthening and
building economic development activities. The board of directors is comprised of elected candidates from
GPED's Investor Council based upon their unique gifts and abilities and their capacity to appropriately
apply them to the organization and community. In existence since 1987, GPED 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, GPED 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 Commerce Park (formerly known as the Information Age Park.) This
park was 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, GPED began assembling property to establish a `Triple Rail Site' in western McCracken
County. The site is an industrial park served by two Class I railroad companies, Burlington Northern Santa
Fe and Norfolk Southern, and a short line railroad company, Paducah and Louisville. The site has river
docking service within 1.5 miles, is within 3 miles of Interstate 24, and 5 miles from Barkley Regional
Airport. GPED owns 485 acres and has option and brokerage agreements on additional surrounding
properties.
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
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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 Mercy Health and Baptist Health, provides over 650 beds for medical needs. The two
largest hospitals, together, employ approximately 3,000 persons.
Recreation and Culture
Citizens have available a wide range of recreational and cultural activities which cater to diverse tastes.
Area residents may choose from fishing on nearby Kentucky and Barkley Lakes to enjoying the performing
arts. City parks provide areas for baseball, softball, golf, football, tennis, disc golf, pickle ball, skate
boarding, soccer, hiking, picnicking, and music garden. 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 180 -year-
old historic neighborhood. The LowerTown Art and Music Festival is an outdoor juried show that the
work of local artists and includes jazz, salsa, zydeco and blues music, as well as food from area restaurants.
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.
One of Paducah's oldest celebrations is the 8' 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 40,000 participants to Paducah's riverfront during the last weekend in September.
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 seventeenth year for the
event. Although the event is free, volunteers collect cash donations and thousands of pounds of canned
food annually.
Paducah has an active symphony and several theater groups. The Paducah Symphony Orchestra stages
concerts during the winter season, with the Market House Theater presenting several productions during
the same time period. In addition, West Kentucky Community and Technical College's Arts in Focus series
sponsors a variety of professional productions.
The Luther F. Carson Four Rivers Center for the Performing Arts opened in February 2004 as a regional,
multiple -purpose facility, with an 1,800 -seat main hall designed to accommodate a wide variety of cultural
and educational programs.
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The McCracken County Public Library offers a large selection of literature, special collections and
programs. The West Kentucky Community and Technical College Library supplement this community
resource.
THE GOVERNMENT
Paducah operates under a City Manager plan 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 339 full-time employees as of June 30, 2022. 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 Annual
Comprehensive 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; cultural events and recreation activities.
Accounting Svstem
The City's accounting system is organized on the basis of separate funds, each of which is considered to be
a separate accounting entity. The financial activities of each fund generate a separate set of self -balancing
accounts, which comprise its assets, liabilities, fund equity, revenues, and expenditures/expenses.
Municipal resources are allocated to and accounted for in individual funds based upon the purposes for
which they are to be spent and the means by which spending activities are controlled.
The City's accounting records for the governmental funds and agency funds are maintained on a modified
accrual basis, with revenues being recorded when "measurable and available" and expenditures being
recorded when the services or goods are received and the liabilities are incurred. Accounting records for
the City's proprietary funds and trust funds are maintained on the accrual basis, with revenues recognized
when earned and expenses recorded when the liability is incurred or economic asset used.
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Internal Control
In developing and evaluating the City's accounting system, consideration is given to the adequacy of
internal controls. 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. 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 FY2022, one of the City's financial policies did have a significant impact on the financial
statements:
Pension Obligation Costs. In FY2006, the City issued general obligation bonds of $6,100,000 to finance
the police and firefighters' pension fund actuary liability. Since the issuance of these bonds, the City has
made it policy to contribute the normal cost as well as the minimum actuarially sound contribution annually
that would arise from the fund being in a deficit position as of the actuarial date. For FY2022 this
contribution was $310 thousand. This amount was $343 thousand in FY2021.
LONG-TERM FINANCIAL PLANNING
On October 1, 2005, the City's payroll tax was increased %2 cent. As a result of the payroll tax increase, the
City Commission created the Investment Fund. The Investment Fund is funded with the '/2 cent increase
and is dedicated to the following purposes: community redevelopment, economic development,
infrastructure capital investment, and property tax relief During the FY2022 budget process, the
Commission reviewed numerous decision packages proposed for the Investment Fund Budget; expenditures
totaling approximately $5.9 million were appropriated.
The City has numerous infrastructure/capital items that will affect the long-term financial planning process.
The following projects are examples of future considerations facing the City:
Better Utilizing Investments to Leverage Development (BUILD) Grant. The City has been awarded a $10.4
million BUILD grant which will be used to create new opportunities for tourism, recreation and commerce
along the Ohio riverfront in support of good jobs and economic growth. After the engineering design and
construction bidding process, the approximately 18 -month construction period could begin in summer of
2023. The BUILD grant's transformative projects for Paducah's downtown and riverfront include: a new
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dock structure and excursion landing plaza, improved bike and pedestrian linkages, and improvements near
the transient boat dock to include green space and seating.
Tax Increment Financing District (TIF). The City has received approval from the Kentucky Economic
Development Financing Authority (KEDFA) for a TIF District. The District includes approximately 315
acres of Paducah downtown riverfront which will be used to promote public and private development. It is
anticipated that mixed-use development will include the construction of hotels, residential units,
restaurant/entertainment space, retail space, manufacturing space, public buildings, and public
infrastructure improvements. Once activated, it's anticipated that tax revenue in excess of a prescribed
baseline will be reinvested in the area with funds from state sales tax, property tax, individual income tax,
and corporate income tax in addition to local property and payroll taxes.
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 28,383 persons employed (McCracken County) as
of June 30, 2022. The June 2022 unemployment rate was 4.6% (McCracken County), which is a decrease
from 5.9% in the prior year, and slightly higher than the June 2022 federal unemployment rate of 3.6%.
INDEPENDENT AUDIT
Kentucky Revised Statute 91A-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
annual comprehensive financial report for the fiscal year ended June 30, 2021. This was the thirty-first
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 annual comprehensive 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 annual comprehensive 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
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and support in planning and conducting the financial operations of the City in a responsible and progressive
manner.
;Refully submitted,
W. Perkins, CPA
Finance Director/Treasurer
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Mayor
Mayor Pro Tem
Commissioner
Commissioner
Commissioner
Assistant City Manager
Finance Director
City Controller
Police Chief
Fire Chief
City Engineer
Public Works Director
Assistant Public Works Director
Planning Director
Parks & Recreation Director
Technology Department Director
City Clerk
Human Resources Director
Risk Manager
Communications Manager
CITY OF PADUCAH, KENTUCKY
PRINCIPAL OFFICIALS
BOARD OF COMMISSIONERS
CITY MANAGER
Daron Jordan
in
George P. Bray
Sandra Wilson
Raynarldo Henderson
David Guess
Carol C. Gault
Michelle Smolen
Jonathan W. Perkins, CPA
Audra Kyle, CPA
Brian Laird
Steve Kyle
Rick Murphy
Chris Yarber
Randy Crouch
Nicholas Hutchison
Amie Clark
Eric Stuber
Lindsay Parish
Stefanie Wilcox
Braden Throgmorton
Pam Spencer
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Paducah
Kentucky
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2021
Executive Director/CEO
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CITY OF PADUCAH, KENTUCKY
FINANCIAL SECTION
ANNUAL COMPREHENSIVE FINANCIAL REPORT
YEAR ENDED JUNE 30, 2022
KEMPER
Vu. CPA GROUPLLP
Certified Public Accountants and Consultants
INDEPENDENT AUDITOR'S REPORT
Honorable George Bray, Mayor
Members of the Board of Commissioners
City of Paducah
Paducah, Kentucky
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities, the business -type
activities, each major fund, and the aggregate remaining fund information of the City of Paducah, Kentucky as of
and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively
comprise the City of Paducah, Kentucky's basic financial statements as listed in the table of contents.
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, each major fund, and the aggregate
remaining fund information of the City of Paducah, Kentucky as of June 30, 2022, 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.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America
and the standards applicable to the financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Our responsibilities under those standards are further described in the
Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be
independent of City of Paducah, Kentucky and to meet our ethical responsibilities, in accordance with the relevant
ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinions.
Responsibilities of Management 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, and for 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.
In preparing the financial statements, management is required to evaluate whether there are conditions or events,
considered in the aggregate, that raise substantial doubt about the City of Paducah, Kentucky's ability to continue
as a going concern for twelve months beyond the financial statement date, including any currently known
information that may raise substantial doubt shortly thereafter.
100 South 4't' Street • Suite 300 • Paducah, KY 42001
Phone: (270)443-4400 Fax: (270)443-0963 kempercpa.com
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Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinions.
Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee
that an audit conducted in accordance with generally accepted auditing standards will always detect a material
misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher then
for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or
the override of internal control. Misstatements are considered material if there is a substantial likelihood that,
individually or in the aggregate, they would influence the judgement made by a reasonable user based on the
financial statements.
In performing an audit in accordance with generally accepted auditing standards, we:
• Exercise professional judgement and maintain professional skepticism throughout the audit
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or
error, and design and perform audit procedures responsive to those risks. Such procedures include
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
• Obtain an understanding of internal control relevant to the audit 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 City of Paducah, Kentucky's internal control. Accordingly, no such opinion is expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting
estimates made by management, as well as evaluate the overall presentation of the financial statements.
• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise
substantial doubt about the City of Paducah, Kentucky's ability to continue as a going concern for a
reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit, significant audit findings, and certain internal control -related matters that we
identified during the audit.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management's
discussion and analysis, budgetary comparison schedules, schedules of net pension and OPEB liabilities and
contributions on pages 14 through 29 and 103 through 110 be presented to supplement the basic financial
statements. Such information is the responsibility of management and, 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.
Supplementary 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 accompanying budgetary comparison schedules,
combining and individual nonmajor fund, budgetary comparison schedules for the nonmajor funds, nonmajor enterprise,
internal service and fiduciary financial statements on pages 111-130; and the schedule of expenditures of federal
awards on pages 151-152 as required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative
Requirements, Cost Principles, and Audit Requirements for Federal Awards, are presented for purposes of additional
analysis and are not a required part of the basic financial statements. Such information is the responsibility of
-12-
management and were derived from and relate directly to the underlying accounting and other records used to prepare
the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the
basic financial statements and certain additional procedures, including comparing and reconciling such information
directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic
financial statements themselves, and other additional procedures in accordance with auditing standards generally
accepted in the United States of America. In our opinion, the combining and individual nonmajor fund, 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.
Other Information
Management is responsible for the other information included in the annual report. The other information
comprises the introductory and statistical sections but does not include the basic financial statements and our
auditor's report thereon. Our opinions on the basic financial statements do not cover the other information, and we
do not express an opinion or any form of assurance thereon.
In connection with our audit of the basic financial statements, our responsibility is to read the other information
and consider whether a material inconsistency exists between the other information and the basic financial
statements, or the other information otherwise appears to be materially misstated. If, based on the work performed,
we conclude that an uncorrected material misstatement of the other information exists, we are required to describe
it in our report.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 21, 2022, 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.
/�� CPdAr , 1-41010
Certified Public Accountants and Consultants
Paducah, Kentucky
December 21, 2022
- 13 -
CITY OF PADUCAH, KENTUCKY
REQUIRED SUPPLEMENTARY INFORMATION
ANNUAL COMPREHENSIVE FINANCIAL REPORT
YEAR ENDED JUNE 30, 2022
CITY OF PADUCAH, KENTUCKY
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2022
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, 2022. 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 30-102) 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
• The City's assets and deferred outflows exceeded liabilities and deferred inflows at the close of the
fiscal year by $21.0 million (net position). This amount includes $1.2 million restricted to specific
projects by laws, regulations or contractual agreements. A deficit total of $41.4 million was
unrestricted chiefly as a result of GASB No. 68, Accounting and Financial Reporting for Pensions,
which was implemented in the fiscal year ended 6/30/2015 and GASB No. 75, Accounting and
Financial Reporting for Postemployment Benefits other than Pensions (OPEB), which was
implemented in the fiscal year ended 6/30/18.
• The City's total net position increased $5.9 million this year. Net position of governmental activities
increased by $5.8 million and business -type activities increased by $100 thousand.
• At fiscal year end, City governmental funds reported a combined ending fund balance of $59.8 million.
Approximately 35% of this total amount, $20.9 million, is restricted or committed for highways/streets
and capital improvements. Assigned fund balance comprises 16% of total fund balance; the majority
of which is set aside for capital improvements.
• At the end of the current fiscal year, unassigned General Fund fund balance was $24.3 million and is
available for spending at the City's discretion. Cash and cash equivalents are approximately $25.0
million. When compared to final total appropriations, the General Fund cash balance is 53%.
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, deferred outflows of resources,
and liabilities, and deferred inflows of resources with the difference between these 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.
-14-
Both of the government -wide financial statements distinguish City functions that are primarily
supported by taxes and intergovernmental revenues (governmental activities) from other City
functions that are intended to recover all or a significant portion of their costs through user fees and
charges (business -type activities). City governmental activities include general government, public
safety, public service, parks and recreation, planning and development, and interest on long-term debt.
Business -type activities of the City include Solid Waste, Section Eight Housing, Civic Center, and the
Transient Boat Dock.
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 30-33 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, 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 ten (10) 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, Special Revenue
Investment, Bond Fund and Debt Service Funds, all of which are considered to be major funds. Data
from the other five (5) 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 114-122.
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 36-37) and Exhibit 6 (pages 40-41)
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 34-41 of this report.
2) Proprietary Funds. The City maintains two types of proprietary funds:
a. Enterprise Funds. Enterprise funds are used to report the same functions presented as
business -type activities in the government -wide financial statements and are used to account
for operations:
• That are financed and operated in a manner similar to private business enterprises where
the intent of the governing body is that the costs of providing goods and services to the
general public on a continuing basis be financed or recovered primarily through user
charges; or
-15-
Where the governing body has decided that periodic determination of revenues earned,
expenses incurred, and/or net income is appropriate for capital maintenance, public policy,
management control, accountability or other purposes.
The City uses four enterprise funds to account for Solid Waste, Section Eight Housing, Civic
Center, and Transient Boat Dock. The Civic Center and Transient Boat Dock receive
subsidies 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 30-33.
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 fmancial 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 123-125 of this report. Individual data for the internal service
funds is likewise presented in the form of combining statements on pages 126-128 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 fmancial statements because
those resources are not available to support City programs. Individual data for two of the City's
three fiduciary funds (Appointive Employees' Pension and Police and Firefighters' Retirement)
is presented in the notes to the financial statements on pages 90-91. Individual data for the
Cemetery and Parks Trusts Fund is presented on pages 129-130 of this report.
C. Notes to the Financial Statements
The notes provide additional information that is essential to fully understand data provided in the
government -wide and fund financial statements. Notes to the financial statements can be found on
pages 52-102 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 pension obligation to its
employees.
Additional budgetary comparison schedules, as well as 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. Combining fund statements and schedules can be found on pages 111-130 of this report.
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 and deferred outflows exceeded liabilities and deferred inflows by $21.0 million, an
increase of $5.9 million from prior year.
-16-
For FY2022, the largest portion of the City's net position ($61.1 million) 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.
In FY2015 the City implemented Government Accounting Standards Board (GASB) Statement No.
68. It requires that the City report and fully disclose its share of net pension liability, which is $66.9
million as of June 30, 2022. In FY2018 the City implemented GASB 75, which requires that the City
report and fully disclose its share of other post -employment benefit (OPEB) liabilities. The net OPEB
liability as of June 30, 2022, is $19.4 million. Disclosing the City's participation in the County
Employee Retirement System (CERS) for pension and other post -employment benefits has been the
primary factor in driving the City's unrestricted net position to a negative $41.4 million in FY2022.
As of June 30, 2022, the City reports positive balances of total 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
2022
2021
2022
2021
2022
2021
Current Assets $ 85,937,475
$74,147,534
$ 5,292,732
$ 5,577,059
$ 91,230,207
$ 79,724,593
Capital Assets 69,103,975
66,224,431
2,148,059
2,094,123
71,252,034
68,318,554
Other noncurrent assets 6,499,058
3,791,311
-
-
6,499,058
3,791,311
Total Assets 161,540,508 144,163,276 7,440,791 7,671,182 168,981,299 151,834,458
Deferred Outflows of
Resources 18,713,567 18,328,954 749,841 941,529 19,463,408 19,270,483
Current Liabilities 8,124,088 8,666,472 390,932 421,837 8,515,020 9,088,309
Noncurrent liabilities 122,831,965 130,008,089 5,223,610 6,258,651 128,055,575 136,266,740
Total liabilities 130,956,053 138,674,561 5,614,542 6,680,488 136,570,595 145,355,049
Deferred Inflows of Resources 30,217,864 10,502,689 706,119 197,789 30,923,983 10,700,478
Net position:
Net Invested in Capital Assets
58,980,030
57,608,864 2,148,059 2,094,123
61,128,089 59,702,987
Restricted
996,142
759,959 199,794 105,322
1,195,936 865,281
Unrestricted
(40,896,014)
(45,053,843) (477,882) (465,011)
(41,373,896) (45,518,854)
TOTAL NET POSITION $ 19,080,158 $ 13,314,980 $ 1,869,971 $ 1,734,434 $ 20,950,129 $ 15,049,414
-17-
The exhibit below charts the City's total net position for the past ten years (Prior years have not been
restated for implementation of GASB 68 and 75 in this discussion).
Government Wide Analvsis
Total Net Position
$70
$60
$50
$40
S
$30
$20
$10
$0
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Substantial increases occurred in fiscal years 2014, 2016, and 2017, which resulted from heavy capital
development that was funded primarily with grant funding. Projects during these fiscal years included
the completion of the Riverfront Development Phases IA & 1B and Phase 1 of the Jim & Pat
Brockenborough Rotary Health Park.
The City's net position decreased significantly in FY2015 due to the implementation of GASB 68.
The City's participation in the County Employee Retirement System (CERS) led to the inclusion of
an initial noncurrent liability in excess of $30 million. Net position took another hit in FY2018 due
to the implementation of GASB 75. The City's participation in the Kentucky Retirement Systems
Insurance Fund generated a noncurrent liability for other post -employment benefits in the amount of
$20 million in FY2018. Annual adjustments to these liabilities continued to drive net position down
each year. For FY2022, the combined impact was a decrease to net position of over $2 million.
Despite the CERS/OPEB adjustments discussed above, net position increased by almost $6 million in
FY2022. In FY2022, the four primary sources of revenue for the City exceeded budgeted amounts by
nearly $4 million. The uncertainties surrounding the effects of the pandemic during the time in which
the FY2022 budget was developed led to conservative revenue projections, as well as holding
operating expenses as flat as possible. However, actual results reflect that local economic activity has
rebounded quite well. It is also likely that inflation has played a role in these revenues, as the majority
are based on percentages of gross receipts, insurance premiums, and wages. In addition to the positive
performance of general revenues, the City also had multiple capital projects that were grant funded.
This includes $402 thousand in ABPA funds and almost $1 million in FEMA funds that were all
utilized for storm water improvements, dredging, and other future flood mitigation projects.
A. Analysis of the City's Operations
The following table provides a summary of the City's operations for the years ended June 30, 2022
and 2021. Governmental activities increased the City's net position by $5,765,178 and business -type
activities increased the City's net position by $135,537.
-18-
City of Paducah, Kentucky
Changes in Net Position
June 30
Expenses:
General Government
Governmental Activities
Business -Type Activities
Total Primary Government
Revenues:
2022
2021
2022 2021
2022
2021
Program revenues:
25,631,674
28,084,323
Public service
7,057,855
Charges for services
$ 3,366,962
$ 2,652,919
$ 4,925,719 $ 4,599,835
$ 8,292,681
7,252,754
Operating grants/contributions
4,333,082
5,036,389
2,204,532 2,118,215
6,537,614
7,154,604
Capital grants/contributions
2,363,472
1,662,014
- -
2,363,472
1,662,014
General Revenues:
Interest on long-term debt
513,885
694,776
-
-
Property taxes
6,128,302
5,915,288
-
6,128,302
5,915,288
Franchise taxes
332,606
334,487
Section Eight Housing
332,606
334,487
Telecommunications tax
630,352
629,429
1,913,079
630,352
629,429
Insurance premium tax
5,834,013
5,819,896
35,544
5,834,013
5,819,896
Vehicle tax
913,410
867,472
108,371
913,410
867,472
Bank tax
403,997
391,897
403,997
391,897
Gross receipts license tax
5,297,560
4,530,125
6,766,533
5,297,560
4,530,125
Employee license tax
23,845,186
22,064,353
23,845,186
22,064,353
Transient room tax
1,788,776
1,211,819
1,788,776
1,211,819
Other taxes
364,116
383,814
- -
364,116
383,814
Unrestricted investment
(2,376,578)
Transfers
258,374
240,537
(258,374)
earnings
551,355
368,425
28,613 27,226
579,968
395,651
Gain on sale of capital assets
14,710
-
1,580 59,348
16,290
59,348
Miscellaneous
-
-
- -
-
-
Total revenues
56,167,899
51,868,327
7,160,444 6,804,624
63,328,343
58,672,951
Expenses:
General Government
11,686,115
12,846,090
11,686,115
12,846,090
Public safety
25,631,674
28,084,323
25,631,674
28,084,323
Public service
7,057,855
6,761,258
7,057,855
6,761,258
Park & recreation
3,423,465
3,477,584
3,423,465
3,477,584
Planning & development
2,348,101
2,284,229
2,348,101
2,284,229
Interest on long-term debt
513,885
694,776
-
-
513,885
694,776
Solid Waste
-
-
4,558,219
4,849,815
4,558,219
4,849,815
Section Eight Housing
2,052,670
1,913,079
2,052,670
1,913,079
Civic Center
35,544
30,004
35,544
30,004
Transient Boat Dock
-
-
120,100
108,371
120,100
108,371
Total expenses
50,661,095
54,148,260
6,766,533
6,901,269
57,427,628
61,049,529
Increase (decrease) in Net
position before transfers
5,506,804
(2,279,933)
393,911
(96,645)
5,900,715
(2,376,578)
Transfers
258,374
240,537
(258,374)
(240,537)
-
Change in net position
5,765,178
(2,039,396)
135,537
(337,182)
5,900,715
(2,376,578)
Net position, July 1
13,314,980
15,354,376
1,734,434
2,071,616
15,049,414
17,425,992
NET POSITION, JUNE 30 $ 19,080,158 $ 13,314,980 $ 1,869,971 $ 1,734,434 $ 20,950,129 $ 15,049,414
-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 2022.
Governmental Activities Revenue by Source
Capital Grants/ Transient Room Tax
Contributions 3% Other Income
4% 1%
Other Taxes
5%
Operating Grants/
Contributions
8%
Occupational
Licenses
Charges for
6%
Property Taxes
11%
In fiscal year 2022, the City derived approximately 81% of its revenue from taxes/licenses.
Occupational licenses, which include payroll withholding tax, business licenses, and insurance
premium taxis the largest source of income to the City, totaling $35 million. This category of revenue
increased $2.6 million, or nearly 8% from the prior year. Employee license tax experienced the largest
growth in this area, increasing by $1.8 million. Business licenses increased by $767 thousand. No
changes in these revenues appear to be the result of one significant taxpayer's activity, but the result
of multiple entities having increases from the prior year. Transient room tax increased by $577
-20-
thousand, or 48%. FY2021 was the first full year of collection of the City's transient room tax of 4%,
so there is not a large amount of history to analyze; however, this substantial increase is believed to
be a recovery of suppressed transient activity that occurred during the pandemic in the first half of
FY2021. Property taxes continue to be a stable source of revenue, comprising 11 % of total revenue in
FY2022.
Capital grants/contributions was also a revenue category of note for FY2022, increasing by $701
thousand, or 42% from the prior year. The City currently has three active FEMA disaster grants that
are being used to mitigate damage from future flooding; including dredging, storm water drainage
improvements, and enhancements at the City's riverfront park.
C. Business -Type Activities
The chart below shows the year's revenues and expenses for each of the City's business -type activities.
Business -Type Activities
Expenses and Revenues (Excluding interfund transfers)
6.00
5.00
4.00
a
0
2E 3.00 u Expenses
N Revenues
2.00
1.00
Solid Waste Section Eight Civic Center Transient
Housing Boat Dock
These activities should break-even; that is, the charges for services should be large enough to sustain
operations. All of the business -type activities reflected these results for FY2022, with the exception
of the Civic Center Fund.
Solid Waste revenues remain very stable over time, as there is a fairly constant number of customers
with an established monthly rate for most of the services provided. However, the two primary
operating expenses, personnel and transfer fees, continue to increase. As it becomes more difficult
for this fund to break even with current collection rates, it is anticipated that a rate increase will be
brought forward in the near future.
Beginning in FY2012, an annual transfer 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. The total amount transferred for this purpose in FY2022 was $320,000.
Analysis of the remaining business -type activities is included in Section IV -B of this report.
-21-
IV. Financial Analysis of the City's Funds
A. Governmental Funds
The focus of the City's governmental funds is to provide information on near-term inflows, outflows
and balances of spendable resources. Such information is useful in determining the City's financing
requirements. Unreserved fund balance serves as a useful measure of the City's net resources
available for spending at the end of the fiscal year.
At the end of the fiscal year, the City governmental funds reported combined ending fund balances of
$59.8 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:
• Nonspendable fund balance includes amounts that are not in a spendable form or are required
to be maintained intact indefinitely. For example, at the end of the fiscal year, the City had
$341,539 of real property held in inventory for urban development.
• 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 $793,091 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
$4,130,122 in fund balance committed for capital improvements in the Investment Fund.
• Assigned fund balance has limitations resulting from intended use; formal action is not
required. Approximately 16% of the City's fund balance is assigned for various purposes,
including capital improvements, public safety, and debt service.
• Unassigned fund balance is the total fund balance in the General Fund in excess of the other
fund balance categories.
Governmental Funds Ending Fund Balance
Nonspendable
<1%
Restricted
35%
il Committed
Assigned 8%
16%
Approximately 41% of total fund balance, $24.3 million is unassigned General Fund fund balance,
which is available for spending at the government's discretion but only up to the amount represented
by cash. At year-end there was $25 million available as General Fund cash. City fiscal policy
(Ordinance 2021-06-8692) requires that an amount not less than 10% of the General Fund's budgeted
expenditures remain undesignated in the fund balance, or $4.8 million, which leaves $20.2 million as
unreserved for fiscal year 2022.
-22-
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 ($24.3 million) represents 61% of expenditures and transfers out ($39.9 million).
65%
60%
55%
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
General Fund
Fund Balance as a % of Expenditures
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
The chart above demonstrates that this ratio has remained very stable over the last ten years. Most
years reflect some positive variances in both revenue and expenditures. However, notable increases
occurred in FY2018 and in FY2022. In FY2018, the four primary sources of revenue for the City
exceeded budgeted amounts by close to $1 million that year. These revenue increases combined with
a delayed interfund transfer ($900 thousand) to the Capital Improvement Fund drove up fund balance
that year. In FY2022, as discussed under the government -wide analysis, revenue performance far
surpassed any expectations had when projecting this budget during the period of economic
uncertainties associated with the pandemic. This exceptional revenue performance, combined with
the effort to hold expenditures as flat as possible, led to a sizable uptick in this ratio for FY2022.
FY2022 budget is discussed further in the General Fund budgetary highlights in Section V of this
report.
The Investment Fund had a fund balance of $4.1 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 '/2 cent payroll tax increase, effective October 1, 2005.
The fund balance for this fund increased $475 thousand over the previous year. This was primarily
due to conservative budget estimates as a result of the Covid-19 pandemic and the uncertainty of the
impact it would have on FY2022 revenues. Fortunately, revenue exceeded budget by nearly $900
thousand.
B. Proprietary Funds
The City's proprietary funds provide the same information found in the government -wide financial
statements but in more detail.
-23-
Net position of the respective proprietary funds are:
Solid Waste $ 947,920
Section Eight Housing 202,577
Civic Center 69,039
Transient Boat Dock 46,493
Combined total net position change for the four funds was an increase of $126 thousand. The largest
proprietary fund, Solid Waste, was discussed under Business Type Activities (Section III -C).
Due to the Covid-19 pandemic, a memo of FY2020 4' quarter financial mitigation directives were
issued by the City Manager in April 2020. These directives included shutting down the transient boat
dock and disconnecting any nonessential utilities, as well as shutting down the Cherry Civic Center
and disconnecting any nonessential utilities. While the transient dock has since reopened, the Civic
Center still remains closed as of the date of this report.
V. General Fund Budgetary Highlights
Differences between the original budget and the final budget resulted in a $6.6 million increase in
appropriations. The City received $6.55 million in ARPA funding, and a transfer out to the Capital
Improvements Fund was budgeted in the same amount. Of the $6.55 million, $4 million was
appropriated for storm water improvements. It is anticipated that $1.8 million will be used for
renovations to the Civic Center, and the remaining balance will be used for other capital -related
activities.
Final appropriations (including operating transfers out) exceeded total actual expenditures by $7.7
million. The majority of this difference is because of the ABPA adjustment discussed above. Only
$402 thousand of the ARPA funds were expended in FY2022, leaving the balance to be deferred until
FY2023. All of the appropriated storm water projects were well -underway subsequent to fiscal year
end, and the City is on track to have its allocation of funds expended by the December 2024 deadline.
Departmental appropriations (excluding intergovernmental and other) exceeded actual by
approximately $1.6 million. Almost 60% of that ($964 thousand) was due to salary and related benefit
slippage in various departments from unfilled positions. Like most other employers across the nation,
the City has felt the effects of the current labor market. Vacancies for many open positions were
difficult to fill, leading to considerable salary slippage across the General Fund. The remaining areas
of positive budget variance within operations appear to be scattered across many areas and not limited
to a particular department.
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,
2022, is $61.1 million (net of accumulated depreciation and related debt). 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 2022, project and equipment additions totaled over $8.8 million, with $5.7 million
of that attributed to Construction in Progress at year-end.
-24-
Some of the largest capital -type project additions, in terms of dollars in fiscal year 2022, are shown in
the following table:
Floodwall Pump 92 Rehab (Construction in Progress) $3,409,763
Storm Water Study 1,001,825
Floodwall Seal Closures (Construction in Progress) 583,058
Buckner Lane Bridge (Construction in Progress) 506,039
Riverfront Park Mitigation (Construction in Progress) 460,972
800 MHZ Radios & Accessories 378,597
S. 24th/25' Street Improvements (Construction in Progress) 377,538
In the upcoming years, several street, economic development, riverfront development, 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
Land $ 10,147,330
Land improvements
13,773,200
Construction in
2022
progress
10,549,864
Buildings and
$ 68,886
improvements
7,519,260
Infrastructure
20,414,278
Equipment
3,350,194
Furnishings and
5,878,560
fixtures
42,005
Vehicles
3,307,844
2021
2022
2021
2022
2021
$ 10,423,688
$ 68,886
$ 68,886
$ 10,216,216 $
10,492,574
14,776,273
-
-
13,773,200
14,776,273
5,878,560
-
-
10,549,864
5,878,560
7,819,330
173,363
189,689
7,692,623
8,009,019
20,165,168
-
-
20,414,278
20,165,168
3,419,823
1,024,771
534,536
4,374,965
3,954,359
57,030
-
-
42,005
57,030
3,684,559
881,039
1,301,012
4,188,883
4,985,571
TOTALS $ 69,103,975 $ 66,224,431 $ 2,148,059 $ 2,094,123 $ 71,252,034 $68,318,554
Additional information on City capital assets can be found in Note 3 in the notes to financial statements
on pages 68-70.
-25-
B. Long -Term Debt
At year-end, the City had $40,960,364 in outstanding bonds and notes payable, compared to
$40,894,867 at June 30, 2021 with maturities extending through 2040.
Governmental Activities
2022 2021
Convention Center Renovation — 2008
$1,141,096
$1,301,646
Murray State University Agreement — 2011
-
1,624,534
Public Pool Renovations — 2013A
575,000
650,000
Economic Development — 2013B
1,290,000
1,445,000
Refinanced Public Projects — 2014A
2,910,000
3,240,000
Refinanced Police/Firefighter Pension Fund Liability — 2014B
1,540,000
1,985,000
CFSB Agreement - 2017
2,766,307
2,814,627
Riverfront and 911 Equipment — 2018A
2,235,000
2,400,000
Kentucky Infrastructure Authority — 2018
2,805,908
322,622
Refinanced KLC and Floodwall Rehabilitation — 2018B
1,365,000
1,715,000
Recreation Facility — 2020A
20,520,000
20,520,000
Refinanced Convention Center — 2020B
2,050,000
2,525,000
Refinanced Murray State University Agreement — 2022A
1,330,614
-
Net Premiums/Discounts
431.439
351.438
TOTALS40.960.364
40.894.867
The City had one new debt issue during FY2022.
Refinanced Murray State University (MSU) Agreement. In January 2022 (2022A), McCracken
County issued general obligation refunding bonds to advance refund the original 2011 series bonds
issued. The City's portion of this amount was $1,330,614.
Debt issues prior to July 1, 2021 are described below:
Refinanced Convention and Performing Arts Center. In October 2020, the City issued general
obligation refunding bonds of $3,020,000 (202013) to advance refund $3,140,000 of outstanding 2010B
series bonds issued to refinance the original 2001 issue.
Municipal Sports and Recreational Facility. In February 2020 (2020A), the City issued general
obligation bonds of $20,520,000 to finance the construction of a municipal sports and recreation
facility.
Riverfront and 911 Equipment. In August 2018 (2018A), the City issued general obligation bonds
of $2,700,000 to finance 911 equipment ($1.045 million) and riverfront development ($1.655 million).
Refinanced KLC and Floodwall Rehabilitation. In August 2018 (2018B), the City issued general
obligation bonds of $2,670,000 to refund $2,815,573 of outstanding Kentucky League of Cities
Funding Trust 2003 Lease and 2009 lease agreements issued to finance several public improvement
projects.
Kentucky Infrastructure Authority (KIA). In July 2018, the City entered into an agreement with
KIA to obtain up to $4,610,667 for rehabilitation of Pump Station 92.
-26-
Julian Carroll Convention Center Improvements. In January 2017, the City entered into an
agreement with Community Financial Services Bank in the amount of $3 million on behalf of
McCracken County to finance improvements to the Julian Carroll Convention Center.
Police/Firefighter Pension Fund Liability — Refinance. In November 2014 (2014B), a $4.225
million general obligation was issued to advance refund $3.845 of outstanding 2005 series bonds. The
2005 bonds were issued to finance the police and firefighters' pension fund estimated pension liability.
Public Improvement Projects — Refinance. In May 2014 (2014A), 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 (2013B), $2.475 million in general obligation taxable
bonds were issued to finance a portion of construction of 1) improvements to a speculative building
and 2) an approximately 30,000 square foot building (TeleTech). Each of these buildings are being
utilized for separate economic development projects.
Public Pool Renovations. In September 2013 (2013A), $1.12 million in general obligation bonds
were issued to finance Noble Park's pool renovation project.
Murray State University (MSU) Agreement. In November 2011, the City entered into a general
obligation note in the amount of $2,674,093 with McCracken County and MSU to finance the
construction of an educational facility to be occupied by Murray State University.
Convention 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.
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 $279,230,633. 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 2022, just over 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 73-78.
VII. Other Potentially Significant Matters.
A. Outdoor Sports Facilities. In September 2022, an interlocal agreement for a joint city/county sports
plex was approved among the City, County, and McCracken County Sports Tourism Commission. In
this agreement both the City and County commit to being equal partners, both financial and
participatory, through the life of the agreement. The City and County will devote existing land and
facilities to the project, including the Bluegrass Downs property (owned by the County) and Stuart
Nelson Park (owned by the City). Total construction costs are estimated to be $42.5 million. The
City will utilize $12.5 million of existing bond proceeds (Series 2020A GOB) for its half of the first
-27-
tranche of funding for design and construction. The City and County's remaining balance of
construction costs will be obtained through future bond issues. The agreement states that, starting 12
months before debt service payments begin, the Sports Commission will restrict 80% of transient
room taxes received for debt service payments, and will continue to do so until the debt is paid in full.
Any shortfalls during this time will be shared equally by the City and County. Although the City is
hopeful that these restricted funds will cover the majority of debt service payments over the life of the
bonds, the amount of shortfall is uncertain and the source of payment for these potential shortfalls has
not been identified. Similar to these concerns are those surrounding the subsequent operation of the
facilities. If, in any fiscal year during the term of the agreement, the Sports Commission incurs a
shortfall of operating revenue to cover expenses attributable to the operation of the athletic complex,
the City and County shall each make up one-half of the shortfall. While the pro forma produced for
this project indicates profitability early in the complex's operations, the City does have this potential
liability through the life of the agreement. The initial agreement period is 20 years.
B. City Facilities. In 2019 the City engaged an engineering firm to assist in the assessment of 14 City
facilities. The assessment team began with touring each building and scoring the various components
and systems in each facility from 1 to 5 (excellent to poor). The team then developed a list of needs
and a 10 -year plan for each building ranging from immediate needs that are recommended to be
completed in one to three years and long-range that could by completed in years four through 10. The
Facilities Survey and Plan was presented to the Commission in summer 2020. This survey revealed
that the average score for all 14 buildings was 3.5, which is between average and below average. The
facilities with the lowest scores were Fire Station No. 1, Fire Station No. 4, Parks & Recreation
Building, Police Station, and the Robert Cherry Civic Center. The cost of all the assessed needs over
ten years totaled $12.6 million.
In FY2022 a city facility improvement project was created with an initial injection of $800 thousand.
An additional $300 thousand was appropriated in FY2023, achieving the goal of having $1.1 million
available for FY2023 to begin facility improvements. The improvements are being prioritized for
implementation by the facilities staff, department leadership, and the City Manager's Office. Some
of the larger projects that have had some activity include: (1) property acquisition for a potential future
Fire Station No. 4 replacement, (2) pending property acquisition by the Senior Center to relocate their
operation, which is jointly housed with the Parks & Recreation Department at 1400 H. C. Mathis Drive,
and (3) completed construction design documents for the Robert Cherry Civic Center renovation, that
includes allocation of existing square footage to house the Parks & Recreation Department. Because
of the enormity of some of the problems identified, additional financial planning may need to be
considered in the future to supplement the funds currently being set-aside.
C. Stormwater. Because of Paducah's location on the Ohio River's floodplain, nearly 204,000 square
miles of land drain to Paducah. Paducah has 110 miles of storm sewer and 69 miles of combined
sewer. Unfortunately, much of the City's development occurred at a time when stormwater
management was not a priority and the current development ordinances were not in place. The current
system is aging, with the majority of Paducah's storm sewers between 60 to 100 years old. In March
2017 the City contracted with an engineering firm to complete a Comprehensive Stormwater Master
Plan for Paducah. The Master Plan's first phase identified approximately $43 million in flood
mitigation projects located within ten priority areas in the City. The Master Plan's second phase
included the development of annual operation and maintenance costs and the costs for repair and
replacement of existing infrastructure, the projection of future funding needs, funding alternatives and
rate options, billing system options, a rate comparison, and a storm water utility ordinance. The
development of a stormwater utility, along with a stormwater infrastructure fee of $6.13 per month
per Equivalent Residential Unit (ERU) was proposed in 2019. This has not been implemented.
The lack of a dedicated funding source for the City to solve drainage problems, repair and maintain
existing storm infrastructure, and comply with federal regulatory requirements associated with water
-28-
quality, has led to the City tackling individual projects as funding allows. As discussed earlier in this
document, the City currently has 3 active FEMA Disaster Relief funded projects, one of which is
being utilized to partially fund the replacement of a dilapidated bridge that has been affected by
flooding and severe weather events. Also mentioned earlier in this discussion is the City's
appropriation of $4 million in ARPA funds to stormwater improvements. A portion of the ABPA
funds are being used for this bridge project, along with another project that involves the purchase of
land by the City to create a 4 -acre stormwater detention area to help reduce residential flooding along
Cross Creek. Although progress has been made with current projects, funding sources for future
projects are uncertain.
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.
-29-
CITY OF PADUCAH, KENTUCKY
BASIC FINANCIAL STATEMENTS
ANNUAL COMPREHENSIVE FINANCIAL REPORT
YEAR ENDED JUNE 30, 2022
ASSETS
Current Assets:
Cash and cash equivalents
Investments
Receivables, net:
Notes
Accounts
Leases
Grants
Interest
Property tax
Other
Internal balances
Inventory
Prepaid expenses
Other current assets
Total current assets
Noncurrent Assets:
Notes receivable
Lease receivable
Capital assets:
Land and construction in progress
Depreciable capital assets
Cash, designated
Other assets
Total noncurrent assets
Total assets
Deferred Outflows of Resources:
Deferred pension related outflows
Deferred OPEB related outflows
Deferred charges on refunding
Total deferred outflows of resources
Exhibit 1
CITY OF PADUCAH, KENTUCKY
STATEMENT OF NET POSITION
JUNE 30, 2022
3,497,033 - 3,497,033
3,002,025 - 3,002,025
20,697,194
68,886
20,766,080
Component
Primary
Government
50,485,954
Unit
-
-
-
Paducah
Governmental
Business -type
-
Water Works
Activities
Activities
Total
Authority
$ 46,942,379
$ 4,119,043 $
51,061,422
$ 1,587,206
19,895,793
-
19,895,793
-
1,194,278
-
1,194,278
-
8,434,085
556,536
8,990,621
1,570,294
556,846
-
556,846
85,651
1,708,239
-
1,708,239
-
26,533
-
26,533
-
6,764,193
-
6,764,193
-
-
-
-
665,885
(603,942)
603,942
-
-
405,865
13,211
419,076
1,566,545
613,206
-
613,206
198,998
-
-
-
146,427
85,937,475
5,292,732
91,230,207
5,821,006
3,497,033 - 3,497,033
3,002,025 - 3,002,025
20,697,194
68,886
20,766,080
5,668,351
48,406,781
2,079,173
50,485,954
63,200,645
-
-
-
6,273,506
-
-
-
278,639
75,603,033
2,148,059
77,751,092
75,421,141
161,540,508
7,440,791
168,981,299
81,242,147
10,070,346
340,938
10,411,284
1,806,478
8,511,321
408,903
8,920,224
1,674,067
131,900
-
131,900
895
18,713,567
749,841
19,463,408
3,481,440
See accompanying notes to the basic financial statements.
-30-
LIABILITIES
Current Liabilities:
Voucher and accounts payable
Accrued payables
Unearned revenue
Accrued compensated absences
Accrued interest
Notes payable due within one year
Bonds payable due within one year
Replacement reserve
Other current liabilities
Total current liabilities
Noncurrent Liabilities:
Accrued compensated absences
Landfill post -closure costs
Net pension liability
Net other post employment benefits liability
Notes payable
Bonds payable
Total noncurrent liabilities
Total liabilities
Deferred Inflows of Resources
Deferred revenues - leases
Deferred revenues - grants
Deferred revenues - property taxes
Deferred pension related inflows
Deferred OPEB related inflows
Total deferred inflows of resources
NET POSITION
Net invested in capital assets
Restricted for:
Housing and development projects
Capital projects & infrastructure
Public safety
Debt service
Unrestricted
TOTAL NET POSITION
-31-
Component
Primary Government
Unit
Paducah
Governmental
Business -type
Water Works
Activities
Activities
Total
Authority
2,786,563
190,080
2,976,643
782,021
1,243,381
64,409
1,307,790
836,028
50,300
34,686
84,986
-
1,279,861
101,757
1,381,618
338,780
380,037
-
380,037
-
323,946
-
323,946
477,237
2,060,000
-
2,060,000
55,000
-
-
-
243,500
-
-
-
145,044
8,124,088
390,932
8,515,020
2,877,610
1,088,322
7,869
1,096,191
-
-
2,062,500
2,062,500
-
64,514,653
2,425,199
66,939,852
8,632,175
18,652,572
728,042
19,380,614
2,591,362
7,719,979
-
7,719,979
4,815,476
30,856,439
-
30,856,439
60,000
122,831,965
5,223,610
128,055,575
16,099,013
130,956,053
5,614,542
136,570,595
18,976,623
3,502,461
-
3,502,461
83,974
6,149,107
-
6,149,107
-
6,474,350
-
6,474,350
-
7,427,503
350,893
7,778,396
1,569,561
6,664,443
355,226
7,019,669
1,323,544
30,217,864
706,119
30,923,983
2,977,079
58,980,030
2,148,059
61,128,089
63,448,685
-
199,794
199,794
-
793,091
-
793,091
-
203,051
-
203,051
-
-
-
-
35,139
(40,896,014)
(477,882)
(41,373,896)
(713,939)
$ 19,080,158
$ 1,869,971
$ 20,950,129
$ 62,769,885
-31-
Exhibit 2
CITY OF PADUCAH, KENTUCKY
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2022
Business -type activities:
Solid Waste
4,558,219
4,802,844 56,682 -
Program Revenues
2,052,670
FUNCTIONS/PROGRAMS
Civic Center
35,544
Operating
Capital
120,100
120,819 - -
Charges for
Grants and
Grants and
Primary Government:
Expenses
Services
Contributions
Contributions
Governmental activities:
Paducah Water Works Authority
$ 11,808,148
$ 13,383,757 $ - $ 505,123
TOTAL COMPONENT UNITS
General government
$ 11,686,115
$ 1,912,220
$ 536,403
$ 15,000
Public safety
25,631,674
409,311
1,286,119
895,683
Public service
7,057,855
941,589
238,317
1,298,690
Parks and recreation
3,423,465
103,842
25,000
(6,014)
Planning and development
2,348,101
-
1,384,742
160,113
Interest on long-term debt
513,885
-
862,501
-
Total governmental activities (See Note 1)
50,661,095
3,366,962
4,333,082
2,363,472
Business -type activities:
Solid Waste
4,558,219
4,802,844 56,682 -
Section Eight Housing
2,052,670
2,056 2,147,850 -
Civic Center
35,544
- - -
Transient Boat Dock
120,100
120,819 - -
Total business -type activities
6,766,533
4,925,719 2,204,532 -
TOTAL PRIMARY GOVERNMENT
$ 57,427,628
$ 8,292,681 $ 6,537,614 $ 2,363,472
Component Unit:
Paducah Water Works Authority
$ 11,808,148
$ 13,383,757 $ - $ 505,123
TOTAL COMPONENT UNITS
$ 11,808,148
$ 13,383,757 $ - $ 505,123
General revenues:
Taxes and licenses:
Property taxes, levied for general purposes
Insurance premium tax
Gross receipts license tax
Employee license tax
Franchise tax
Telecommunications tax
Vehicle tax
Bank tax
Transient room tax
Other taxes
Unrestricted investment earnings
Sale of assets
See accompanying notes to the basic financial statements.
-32-
Total general revenues
Transfers
Total general revenues and transfers
Change in net position
Net position - beginning
Net position - ending
Net (Expense) Revenue and Changes in Net Position
Governmental
Business -type
Paducah Water
Activities
Activities
Total
Works Authority
$ (9,222,492)
$ -
$ (9,222,492)
$ -
(23,040,561)
-
(23,040,561)
-
(4,579,259)
-
(4,579,259)
-
(3,300,637)
-
(3,300,637)
-
(803,246)
-
(803,246)
-
348,616
-
348,616
-
(40,597,579)
-
(40,597,579)
-
-
301,307
301,307
-
-
97,236
97,236
-
-
(35,544)
(35,544)
-
-
719
719
-
-
363,718
363,718
-
(40,597,579)
363,718
(40,233,861)
-
-
-
-
2,080,732
-
-
-
2,080,732
6,128,302
-
6,128,302
-
5,834,013
-
5,834,013
-
5,297,560
-
5,297,560
-
23,845,186
-
23,845,186
-
332,606
-
332,606
-
630,352
-
630,352
-
913,410
-
913,410
-
403,997
-
403,997
-
1,788,776
-
1,788,776
-
364,116
-
364,116
-
551,355
28,613
579,968
45,307
14,710
1,580
16,290
39,732
46,104,383
30,193
46,134,576
85,039
258,374
(258,374)
-
-
46,362,757
(228,181)
46,134,576
85,039
5,765,178
135,537
5,900,715
2,165,771
13,314,980
1,734,434
15,049,414
60,604,114
$ 19,080,158
$ 1,869,971
$ 20,950,129
$ 62,769,885
-33-
CITY OF PADUCAH, KENTUCKY
BASIC FINANCIAL STATEMENTS
FUND FINANCIAL STATEMENTS
ANNUAL COMPREHENSIVE FINANCIAL REPORT
YEAR ENDED JUNE 30, 2022
Exhibit 3
CITY OF PADUCAH, KENTUCKY
BALANCESHEET
GOVERNMENTAL FUNDS
JUNE 30, 2022
See accompanying notes to the basic financial statements.
-34-
Special Revenue
General
Investment
Bond
Fund
Fund
Fund
Assets
Cash and cash equivalents
$
25,017,711
$ 2,685,096
$ 28
Investments
-
-
19,895,793
Receivables:
Accounts
8,922,257
-
-
Leases
3,321,393
-
-
Grants
180,927
-
-
Property taxes (net of
allowances for uncollectibles)
6,804,193
-
-
Inventory
-
-
-
Prepaid items
-
-
-
Due from other funds
7,824
1,452,616
-
Total Assets
$
44,254,305
$ 4,137,712
$ 19,895,821
Liabilities
Voucher and accounts payable
$
396,474
$ 7,590
$ -
Accrued payroll and payroll taxes
1,146,390
-
-
Due to other funds
1,452,616
-
7,824
Due to other taxing agencies
21,763
-
-
Unearned revenue - other
-
-
-
Accrued compensated absences
157,896
-
-
Total liabilities
3,175,139
7,590
7,824
Deferred Inflows of Resources
Deferred inflow - leases
3,268,863
-
-
Unavailable revenue - grants
6,149,107
-
-
Unavailable revenue - property taxes
6,723,718
-
-
Total deferred inflows of resources
16,141,688
-
-
Fund Balances:
Nonspendable
Inventory
-
-
-
Restricted for:
Highways and streets
-
-
-
Public safety
-
-
Capital improvements
-
-
19,887,997
Committed for:
Capital improvements
-
4,130,122
-
Pension reserve
670,365
-
-
Assigned for:
Public safety
-
-
-
Debt service
-
-
-
Capital improvements
-
-
-
Unassigned:
General Fund
24,267,113
-
-
Total fund balances
24,937,478
4,130,122
19,887,997
TOTAL LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
$
44,254,305
$ 4,137,712
$ 19,895,821
See accompanying notes to the basic financial statements.
-34-
General
Debt
Nonmajor
Total
Capital
Service
Governmental
Governmental
Improvements
Fund
Funds
Funds
$ 7,925,202
$1,622,886
$ 1,367,580
$ 38,618,503
-
-
-
19,895,793
117
-
310,357
9,232,731
-
237,478
-
3,558,871
1,527,312
-
-
1,708,239
-
-
-
6,804,193
341,539
-
-
341,539
-
-
-
1,460,440
$ 9,794,170
$1,860,364
$ 1,677,937
$ 81,620,309
$ 1,863,776
$ -
$ 298,595
$ 2,566,435
-
-
56,084
1,202,474
-
-
-
1,460,440
-
-
-
21,763
50,300
-
-
50,300
-
-
-
157,896
1,914,076
-
354,679
5,459,308
-
233,599
-
3,502,462
6,149,107
6,723,718
233,599 - 16,375,287
341,539 - - 341,539
- - 793,091 793,091
- - 203,051 203,051
- - - 19,887,997
- - - 4,130,122
- - - 670,365
- - 327,116 327,116
- 1,626,765 - 1,626,765
7,538,555 - - 7,538,555
- - - 24,267,113
7,880,094 1,626,765 1,323,258 59,785,714
$ 9,794,170 $1,860,364 $ 1,677,937 $ 81,620,309
-35-
Exhibit 4
CITY OF PADUCAH, KENTUCKY
RECONCILIATION OF THE GOVERNMENTAL FUNDS
BALANCE SHEET TO STATEMENT OF NET POSITION
JUNE 30, 2022
Total fund balance - total governmental funds $ 59,785,714
Amounts reported for governmental activities in the Statement
of Net Position are different because:
Delinquent property taxes receivable are not reported in the
governmental funds balance sheet since they are not considered
"available" revenues. 209,368
The long-term notes receivable are not reported in the governmental
funds balance sheet since they are not available to pay current period
expenditures. 3,791,311
Interest receivable on the long-term notes receivable is not reported
on the governmental funds balance sheet since neither the note
receivable nor the interest is available to pay current period
expenditures. 26,533
Capital assets used in governmental activities are not current
financial resources and, therefore, are not reported in the
governmental funds balance sheet. This amount includes capital
assets of Internal Service Funds. 69,103,975
Deferred refunding costs and deferred pension activity in
governmental activities are not current financial resources or
payables and, therefore, are not reported in the governmental funds
balance sheet:
Deferred refunding costs
131,900
Deferred OPEB related inflows
(6,664,443)
Deferred OPEB related outflows
8,511,321
Deferred pension related inflows
(7,427,503)
Deferred pension related outflows
10,070,346 4,621,621
See accompanying notes to the basic financial statements. (Continued)
-36-
CITY OF PADUCAH, KENTUCKY
RECONCILIATION OF THE GOVERNMENTAL FUNDS
BALANCE SHEET TO STATEMENT OF NET POSITION
JUNE 30, 2022
The portion of accrued compensated absences that are not due and
payable in the current period, and therefore, not reported in the
governmental funds balance sheet.
Accrued interest payments on debt are not due and payable in the
current period and, therefore, are not reported in the governmental
funds balance sheet.
Long-term pensions, OPEB, bonds and notes of ($124,127,590) are
not due and payable in the current period and, therefore, they are not
reported in the governmental funds balance sheet. The long-term
pensions, OPEB, bonds and notes are:
Due within one year $ 2,383,946
Due after one year 121,743,643
Internal service funds are used by management to charge the costs of
certain activities, such as insurance and fleet management, to
individual funds. The assets and liabilities of the Internal Service
Funds (net of amount allocated to business -type activities) not
included in other reconciling items are:
Current assets $ 9,102,763
Current liabilities (261,655)
Net amount allocated to
business -type activities (603,942)
NET POSITION OF GOVERNMENTAL ACTIVITIES
See accompanying notes to the basic financial statements.
-37-
Exhibit 4
(Continued)
$ (2,187,904)
(380,037)
(124,127,589)
8,237,166
$ 19,080,158
CITY OF PADUCAH, KENTUCKY
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
Revenues:
Taxes
Licenses
Charges for services
Intergovernmental
Grants
Interest
Property upkeep, rentals, sales and other
Total revenues
Expenditures:
Current operations:
General government
Public safety
Public service
Parks and recreation
Planning and development
Intergovernmental and other
Capital outlay
Debt service:
Principal requirement
Debt issuance costs
Interest requirement
Total expenditures
Excess (deficiency) of revenues over expenditures
Other Financing Sources (Uses):
Refunding debt issued
Issuance of notes payable
Payment to refunded bond escrow agent
Premium on debt issued
Discount on debt issued
Transfers in
Transfers out
Total other financing sources (uses)
Net change in fund balances
Fund balances - beginning
Fund balances - ending
See accompanying notes to the basic financial statements.
-38-
Exhibit 5
Special
Revenue
General Investment Bond
U. -A U. -A r -A
'D U,'TJ V,'TGU y - y -
30,0625732 5,886,614 -
7105599 - -
1,5815482 - -
326,919 - 145,996
995,754 - -
42,133,914 558865614 145,996
5,970,330 - -
21,371,850 - -
5,535,635 - -
3,123,799 - -
- 950,492 37,153
493,736 - -
- - 17,486
5,638,564
4,936,122
91,357
-
-
1,330,614
-
-
(1,507,646)
-
-
204,531
-
-
(10,013)
463,138
285,000
-
(3,373,217)
(4,746,121)
-
(2,910,079)
(4,461,121)
17,486
2,728,485
475,001
108,843
22,208,993
3,655,121
19,779,154
$ 24,937,478
$4,130,122
$19,887,997
General
Capital
Improvements
1,886,547
275,950
2,162,497
w
Debt
Nonmajor
Service
Governmental
Fund
Funds
654,429
758,679
20,467
322,519
1,756,094
$ 2,109,480
366,679
510,824
432,853
8,271
578,109
4,006,216
Total
Governmental
Funds
$ 10,565,908
35,949,346
1,077,278
1,165,253
4,659,561
501,653
2,172,332
56,091,331
5,970,330
- - 2,014,918 23,386,768
- - 1,204,096 6,739,731
- - - 3,123,799
- - 2,183,776 3,171,421
- - - 493,736
7,639,458 - - 7,639,458
/,VJ7,'TJV
(5,476,961)
3,460,662
3,152,342
(3,138)
t U. oil' .,M.
1,132,905
6,747,189
$ 7,880,094
3,309,044
1,134, 620
4,443,664
(2,687,570)
2,805,728
2,805,728
118,158
1,508,607
$ 1,626,765
J,'TVG, / 7V
(1,396,574)
1,779,175
(146,418)
1,632,757
236,183
1,087,075
$ 1,323,258
-39-
3,309,044
17,486
1,134,620
54,986,393
1,104,938
1,330,614
3,460,662
(1,507,646)
204,531
(10,013)
8,485,383
(8,268,894)
3,694,637
4,799,575
54,986,139
$ 59,785,714
CITY OF PADUCAH, KENTUCKY
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2022
Net change in fund balances - total governmental funds
Amounts reported for governmental activities in the Statement
of Activities are different because:
Governmental funds report capital outlays as expenditures. However, in the
Statement of Activities, the cost of those assets is allocated over their estimated
useful lives as depreciation expense. This is the capitalized amount of capital
outlays in the current period. This amount includes Internal Service Fund's
capital outlays of $559,727.
Collections on long-term notes receivables and related interest receivable are
revenues in the government funds when collected.
The payments of pension and OPEB contributions require the use of current
financial resources and, therefore, are reported as expenditures in governmental
funds. However, the current year payments are deferred outflows of resources
in the government -wide statements and accrued pension and OPEB expenses are
recorded when incurred.
Proceeds of the issuance of debt provides current financial resources and is
reported as an other financing source in governmental funds.
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.
Depreciation expense on capital assets is reported in the government -wide
Statement of Activities and Changes in Net Position, but does not require the
use of current financial resources. Therefore, depreciation expense is not
reported as an expenditure in governmental funds. This amount includes
Internal Service Funds' depreciation expense of $959,412.
See accompanying notes to the basic financial statements.
-40-
Exhibit 6
4,799,575
6,960,055
(285,817)
(2,041,441)
(4,791,276)
(336,350)
(3,744,161)
(Continued)
Exhibit 6
(Continued)
CITY OF PADUCAH, KENTUCKY
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2022
Principal payments of debt and payment to escrow agent for refunding require
the use of current financial resources and, therefore, are reported as
expenditures in governmental funds. However, these payments of debt do not
affect net position in the government -wide Statement of Activities.
Accrued interest payments on debt do not require the use of current financial
resources. Interest expense is reported net of the change in accrued interest
payable in the government -wide Statement of Activities.
Long-term accrued compensated absences do not require the use of current
financial resources and, therefore, are not reported as expenditures in
governmental funds.
Governmental funds report the effect of bond premiums, discounts and
refunding costs when debt is issued, whereas these amounts are deferred and
amortized in the Statement of Activities.
Internal service funds are used by management to charge the costs of certain
activities, such as insurance and fleet management, to individual funds. The net
revenue of the Internal Service Funds is reported with governmental activities
net of the amount allocated to business -type activities and depreciation expense.
These amounts are as follows:
Change in net position
$ 208,162
Net of amount allocated to
business -type activities
(9,138)
Capital Outlays
(559,727)
Depreciation expense
959,412
CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES
See accompanying notes to the basic financial statements.
-41-
$ 4,805,780
19,016
(97,397)
(121,515)
598,709
$ 5,765,178
CITY OF PADUCAH, KENTUCKY
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE - BUDGET AND ACTUAL
GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2022
Budgeted Amounts
Original Final
Actual
Amounts
Exhibit 7
Variance with
Final Budget
Positive
(Negative)
Revenues:
202,500
202,500
227,163
24,663
Taxes:
340,000
340,000
345,000
5,000
Real and personal,
35,000
35,000
34,594
(406)
current year
$ 6,601,500
$ 6,601,500
$ 6,930,889
$ 329,389
Real and personal,
681,500
681,500
710,599
29,099
prior year
15,000
15,000
63,886
48,886
Franchise
170,000
170,000
332,606
162,606
Bank taxes
400,000
400,000
403,997
3,997
In lieu of tax payment
317,000
317,000
299,496
(17,504)
Penalty, interest and
advertising
55,000
55,000
64,430
9,430
Paducah Junior College
tax collections
-
-
361,124
361,124
Total taxes
7,558,500
7,558,500
8,456,428
897,928
Licenses:
Business licenses
3,900,000
3,900,000
5,297,560
1,397,560
Employee earnings
16,300,000
16,300,000
17,958,570
1,658,570
Cable franchise fees
377,000
377,000
365,385
(11,615)
Penalties
200,000
200,000
413,107
213,107
Alcoholic beverages
157,000
157,000
164,976
7,976
Insurance premium tax
5,275,000
5,275,000
5,834,013
559,013
Building permits
150,000
150,000
125,107
(24,893)
Electrical permits
40,000
40,000
62,553
22,553
Zoning change fees
7,000
7,000
8,290
1,290
Miscellaneous building
and electrical fees
4,000
4,000
4,001
1
Payroll tax sharing with County
(128,500)
(128,500)
(170,830)
(42,330)
Total licenses
26,281,500
26,281,500
30,062,732
3,781,232
Charges for services:
Tax collection fee
202,500
202,500
227,163
24,663
Administrative charge
340,000
340,000
345,000
5,000
Base court revenue
35,000
35,000
34,594
(406)
Recreation fees
104,000
104,000
103,842
(158)
Total charges for services
681,500
681,500
710,599
29,099
See accompanying notes to the basic financial statements. (Continued)
-42-
CITY OF PADUCAH, KENTUCKY
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE - BUDGET AND ACTUAL
GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2022
Budgeted Amounts
Original Final
Grants:
Police State Incentive $ 415,000
Fire State Incentive 375,000
Police supplemental grants 15,000
Other grants -
Total grants
Interest
Other:
Property rent and sales
Property upkeep and
maintenance
E911 - GIS
Miscellaneous
Total other
Total revenues
Expenditures:
General government:
General administration:
Mayor and Commissioners
City Manager
City Clerk
Corporate Counsel
Non -departmental
Memberships and contingency
Civic beautification
Total general administration
Finance:
Finance administration
Accounting and payroll
Revenue collection
Actual
Amounts
Exhibit 7
(Continued)
Variance with
Final Budget
Positive
(Negative)
$ 415,000 $ 416,351 $ 1,351
375,000 361,305 (13,695)
15,000 401,395 386,395
6,551,535 402,431 (6,149,104)
805,000
7,356,535
1,581,482
(5,775,053)
140,500
140,500
326,919
186,419
486,290
729,035
729,035
683,307
(45,728)
112,505
112,505
90,984
(21,521)
34,055
34,055
34,055
-
155,800
192,040
187,408
(4,632)
1,031,395
1,067,635
995,754
(71,881)
36,498,395
43,086,170
42,133,914
(952,256)
264,825
314,700
306,460
8,240
903,140
904,375
874,621
29,754
486,290
459,370
448,853
10,517
160,000
230,000
223,710
6,290
1,018,665
826,290
757,921
68,369
4,400
5,435
5,426
9
3,000
3,000
2,933
67
2,840,320
2,743,170
2,619,924
123,246
337,105
307,340
297,590
9,750
449,905
464,590
452,394
12,196
497,740
513,005
495,534
17,471
Total finance 1,284,750 1,284,935 1,245,518 39,417
See accompanying notes to the basic financial statements. (Continued)
-43-
CITY OF PADUCAH, KENTUCKY
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE - BUDGET AND ACTUAL
GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2022
General government:
Planning:
Administration
Planning
Total planning
Radio and rental property
Human rights
Information systems
Budgeted Amounts
Original Final
Actual
Amounts
Exhibit 7
(Continued)
Variance with
Final Budget
Positive
(Negative)
$ 234,570 $
250,120 $
242,213 $
7,907
518,335
417,035
361,147
55,888
752,905
667,155
603,360
63,795
150,130
150,130
95,240
54,890
17,030
17,020
10,914
6,106
924,250
939,960
894,625
45,335
Human resources/risk management 499,915 515,375 500,749 14,626
Total general government
Public safety:
Police:
Police administration
Patrol
Investigations
COPS Grants
Total police
Fire:
Fire administration
Suppression
Prevention and inspection
Training
Total fire
Total public safety
Public service:
Public works:
Street maintenance
Street lighting
Facility maintenance
6,469,300 6,317,745 5,970,330 347,415
1,422,530
1,336,125
1,295,756
40,369
7,757,105
7,894,505
7,825,845
68,660
2,376,475
2,357,520
2,262,004
95,516
296,150
277,965
258,745
19,220
11,852,260
11,866,115
11,642,350
223,765
653,270
745,875
722,343
23,532
7,885,625
7,869,620
7,782,275
87,345
1,330,750
1,191,145
1,137,241
53,904
206,855
105,455
87,641
17,814
10,076,500
9,912,095
9,729,500
182,595
21,928,760
21,778,210
21,371,850
406,360
2,526,080 2,504,180 2,186,167 318,013
810,000 810,000 795,996 14,004
1,312,930 1,249,670 1,006,072 243,598
Total public works 4,649,010 4,563,850 3,988,235 575,615
See accompanying notes to the basic financial statements. (Continued)
-44-
CITY OF PADUCAH, KENTUCKY
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE - BUDGET AND ACTUAL
GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2022
Public service:
Engineering services:
Engineering services
Flood control
Total engineering services
Total public service
Parks and recreation:
Parks and recreation administration
Grounds maintenance
Pools and recreation programs
Total parks and recreation
Intergovernmental and other:
Cable authority
Intergovernmental expense
Donated assets
Total intergovernmental and other
Total expenditures
Excess (deficiency) of revenues
over expenditures
Other financing sources (uses):
Transfers in
Transfers out
Budgeted Amounts
Original Final
Actual
Amounts
Exhibit 7
(Continued)
Variance with
Final Budget
Positive
(Negative)
$ 742,960
$ 751,530
$ 744,060
$ 7,470
950,525
941,685
803,340
138,345
1,693,485
1,693,215
1,547,400
145,815
6,342,495
6,257,065
5,535,635
721,430
732,990
781,125
761,548
19,577
1,614,325
1,561,060
1,513,688
47,372
1,160,550
921,740
848,563
73,177
3,507,865
3,263,925
3,123,799
140,126
85,945 133,135 132,612 523
- - 361,124 (361,124)
85,945 133,135 493,736 (360,601)
38,334,365 37,750,080 36,495,350 1,254,730
(1,835,970) 5,336,090 5,638,564 302,474
460,000 463,135 463,138 3
(2,663,925) (9,839,120) (3,373,217) 6,465,903
Total other financing sources (uses) (2,203,925) (9,375,985) (2,910,079) 6,465,906
Net change in fund balance
Fund balance - beginning
Fund balance - ending
(4,039,895) (4,039,895) 2,728,485 6,768,380
22,208,993 22,208,993 22,208,993
$ 18,169,098 $ 18,169,098 $ 24,937,478 $ 6,768,380
See accompanying notes to the basic financial statements.
-45-
CITY OF PADUCAH, KENTUCKY
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE - BUDGET AND ACTUAL
SPECIAL REVENUE INVESTMENT FUND
FOR THE YEAR ENDED JUNE 30, 2022
Revenues:
Licenses:
Employee earnings
Total licenses
Total revenues
Expenditures:
General government:
Planning and development:
Economic development
Total expenditures
Excess (deficiency) of revenues
over expenditures
Other financing sources (uses):
Transfers in
Transfers out
Total other financing sources (uses)
Net change in fund balance
Fund balance - beginning
Fund balance - ending
Budgeted Amounts
Original Final
$ 5,000,000
5,000,000
5,000,000
$ 5,000,000
5,000,000
5,000,000
Actual
Amounts
$ 5,886,614
5,886,614
5,886,614
Exhibit 8
Variance with
Final Budget
Positive
(Negative)
$ 886,614
886,614
886,614
1,041,480
950,230
950,492
(262)
1,041,480
950,230
950,492
(262)
3,958,520
4,049,770
4,936,122
886,352
285,000
285,000
285,000
-
(4,233,085)
(4,924,335)
(4,746,121)
178,214
(3,948,085)
(4,639,335)
(4,461,121)
178,214
10,435
(589,565)
475,001
1,064,566
3,655,121
3,655,121
3,655,121
-
$ 3,665,556 $ 3,065,556 $ 4,130,122 $ 1,064,566
See accompanying notes to the basic financial statements.
io
ATL'T n/1C1r9r1r/lAT
Net invested in capital assets 2,075,870
72,189
2,148,059 3,518,038
Restricted - Housing -
Exhibit 9
199,794 -
CITY OF PADUCAH,
KENTUCKY
(1,081,824) 7,837,754
TOTAL NET POSITION $ 947,920 $
318,109
STATEMENT OF NET
POSITION
Adjustment to reflect the consolidation of Internal Service Funds'
PROPRIETARY FUNDS
activities related to Enterprise Funds
603,942
JUNE 30, 2022
$ 1,869,971
Governmental
Business -type Activities
Activities
ASSETS
Nonmajor
Internal
Solid
Enterprise
Service
Current Assets:
Waste
Funds
Totals
Funds
Cash and cash equivalents
$ 3,723,104
$ 395,939
$ 4,119,043
$ 8,323,877
Investments
-
-
-
-
Accounts receivable
556,536
-
556,536
101,354
Interest receivable
-
-
-
-
Prepaid expenses
-
-
613,206
Inventory
-
13,211
13,211
64,326
Total current assets
4,279,640
409,150
4,688,790
9,102,763
Noncurrent Assets:
Net capital assets:
Land
68,886
-
68,886
-
Depreciable capital assets
2,006,984
72,189
2,079,173
3,518,038
Total noncurrent assets
2,075,870
72,189
2,148,059
3,518,038
Total assets
6,355,510
481,339
6,836,849
12,620,801
Deferred Outflows of Resources:
Deferred pension related outflows
338,076
2,862
340,938
103,008
Deferred OPEB related outflows
400,066
8,837
408,903
127,791
Total deferred outflows of resources
738,142
11,699
749,841
230,799
LIABILITIES
Current Liabilities:
Voucher and accounts payable
129,341
60,739
190,080
220,129
Accrued payroll and payroll taxes
63,693
716
64,409
19,142
Accrued compensated absences
98,357
3,400
101,757
22,384
Unearned revenue
34,500
186
34,686
-
Due to other funds
-
-
-
-
Total current liabilities
325,891
65,041
390,932
261,655
Noncurrent Liabilities:
Net pension liability
2,363,337
61,862
2,425,199
765,348
Net other post employment benefits
liability 709,471
18,571
728,042
229,757
Landfill post -closure costs
2,062,500
-
2,062,500
-
Accrued compensated absences
-
7,869
7,869
18,529
Total noncurrent liabilities
5,135,308
88,302
5,223,610
1,013,634
Total liabilities
5,461,199
153,343
5,614,542
1,275,289
Deferred Inflows of Resources
Deferred pension related inflows
341,943
8,950
350,893
110,736
Deferred OPEB related inflows
342,590
12,636
355,226
109,783
Total deferred inflows of resources
684,533
21,586
706,119
220,519
ATL'T n/1C1r9r1r/lAT
Net invested in capital assets 2,075,870
72,189
2,148,059 3,518,038
Restricted - Housing -
199,794
199,794 -
Unrestricted (1,127,950)
46,126
(1,081,824) 7,837,754
TOTAL NET POSITION $ 947,920 $
318,109
1,266,029 $ 11,355,792
Reconciliation to government -wide statements of net position:
Adjustment to reflect the consolidation of Internal Service Funds'
activities related to Enterprise Funds
603,942
NET POSITION OF BUSINESS -TYPE ACTIVITIES
$ 1,869,971
See accompanying notes to the basic financial statements.
-47-
CITY OF PADUCAH, KENTUCKY
STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN NET POSITION
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
Operating Revenues:
Charges for services - internal
Charges for services - external
Miscellaneous
Total operating revenues
Operating Expenses:
Cost of sales and service
Depreciation and amortization
Total operating expenses
Operating income (loss)
Nonoperating Revenues (Expenses):
Grants - program purpose
Interest and investment income
Gain (loss) on disposal of property
and equipment
Total nonoperating revenues (expenses)
Income (loss) before contributions and
transfers
Contributions and Transfers:
Transfers in
Transfers out
Total contributions and transfers
Change in net position
Exhibit 10
Net position - beginning 945,823 193,807
Net position - ending $ 947,920 $ 318,109
Reconciliation to government -wide statements of net position:
Adjustment to reflect the consolidation of Internal Service Funds'
activities related to Enterprise Funds
CHANGE IN NET POSITION OF BUSINESS -TYPE ACTIVITIES
See accompanying notes to the basic financial statements.
9,138
$ 135,537
11,147,630
$11,355,792
Governmental
Business -type Activities
Activities
Nonmajor
Internal
Solid
Enterprise
Service
Waste
Funds
Totals
Funds
$ -
$ 120,819
$ 120,819
$ 6,082,854
4,800,026
-
4,800,026
296,676
2,819
2,056
4,875
-
4,802,845
122,875
4,925,720
6,379,530
3,865,592
2,195,875
6,061,467
5,358,548
661,471
12,439
673,910
959,412
4,527,063
2,208,314
6,735,377
6,317,960
275,782
(2,085,439)
(1,809,657)
61,570
56,682
2,147,850
2,204,532
-
28,349
265
28,614
49,701
1,580
-
1,580
14,710
86,611
2,148,115
2,234,726
64,411
362,393
62,676
425,069
125,981
-
61,626
61,626
152,181
(360,296)
-
(360,296)
(70,000)
(360,296)
61,626
(298,670)
82,181
2,097
124,302
126,399
208,162
Net position - beginning 945,823 193,807
Net position - ending $ 947,920 $ 318,109
Reconciliation to government -wide statements of net position:
Adjustment to reflect the consolidation of Internal Service Funds'
activities related to Enterprise Funds
CHANGE IN NET POSITION OF BUSINESS -TYPE ACTIVITIES
See accompanying notes to the basic financial statements.
9,138
$ 135,537
11,147,630
$11,355,792
CITY OF PADUCAH, KENTUCKY
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
Cash Flows from Operating Activities:
Cash received from customers
Cash received from interfund services provided
Payments to suppliers
Payments to employees
Claims paid
Payments to internal service funds
Other receipts
Other payments
Net cash provided (used) by operating activities
Cash Flows from Noncapital Financing Activities:
Grants - program purpose
Transfers from other funds
Transfers to other funds
Net cash provided (used) by noncapital
financing activities
Cash Flows from Capital and Related
Financing Activities:
Purchase of capital assets
Proceeds from sale of capital assets
Net cash provided (used) by capital and
related financing activities
Cash Flows from Investing Activities:
Proceeds from sale of investment securities
Interest on cash and investments
Net cash provided (used) by investing
activities
Net increase (decrease) in cash and cash
equivalents
Cash and cash equivalents, July 1, 2021
CASH AND CASH EQUIVALENTS,
JUNE 30, 2022
Reconciliation of Operating Income (Loss) to Net
Cash Provided (Used) by Operating Activities:
Operating income (loss)
Adjustments to reconcile operating income to
net cash provided by operating activities:
Depreciation and amortization
Change in assets and liabilities:
Receivables
Prepaid expenses
Inventories
Unearned revenues
Pension obligation and related deferrals
OPEB obligation and related deferrals
Account and accrued payables
NET CASH PROVIDED (USED) BY OPERATING
ACTIVITIES
See accompanying notes to the basic financial statements.
-49-
Exhibit 11
$3,723,104 $ 395,939 $ 4,119,043 $8,323,877
$ 275,782 $(2,085,439) $ (1,809,657) $ 61,570
661,471
12,439
673,910
Governmental
Business
-type Activities
Activities
(16,537)
Nonmaj or
-
Internal
Solid
Enterprise
(552)
Service
Waste
Funds
Totals
Funds
$4,865,975
$ 120,819
$ 4,986,794
$ -
-
-
-
6,340,351
(2,330,600)
-
(2,330,600)
(309,201)
(1,238,682)
(15,742)
(1,254,424)
(386,351)
-
-
-
(4,160,628)
(536,304)
(3,252)
(539,556)
-
2,819
2,056
4,875
-
-
(2,273,238)
(2,273,238)
(663,412)
763,208
(2,169,357)
(1,406,149)
820,759
56,682
2,083,222
2,139,904
-
-
61,626
61,626
152,181
(360,296)
-
(360,296)
(70,000)
(303,614)
2,144,848
1,841,234
82,181
(722,644)
(5,203)
(727,847)
(559,727)
1,580
-
1,580
14,710
(721,064)
(5,203)
(726,267)
(545,017)
1,500,000
-
1,500,000
3,000,000
35,900
265
36,165
49,701
1,535,900
265
1,536,165
3,049,701
1,274,430
(29,447)
1,244,983
3,407,624
2,448,674
425,386
2,874,060
4,916,253
$3,723,104 $ 395,939 $ 4,119,043 $8,323,877
$ 275,782 $(2,085,439) $ (1,809,657) $ 61,570
661,471
12,439
673,910
959,412
31,449
-
31,449
(16,537)
-
-
-
(97,846)
-
(552)
(552)
(2,070)
34,500
(64,628)
(30,128)
-
(177,524)
(87,649)
(265,173)
(24,529)
(35,597)
(11,191)
(46,788)
(4,248)
(26,873)
67,663
40,790
(54,993)
$ 763,208 $(2,169,357) $ (1,406,149) $ 820,759
Exhibit 12
CITY OF PADUCAH, KENTUCKY
STATEMENT OF NET POSITION
FIDUCIARY FUNDS
JUNE 30, 2022
LIABILITIES
Voucher and accounts payable 14 -
Payroll taxes and withholdings
payable - -
Total liabilities 14 -
NET POSITION
Net position restricted for pensions
Held in trust for other purposes
$ 3,908,726
$ 1,065,188
See accompanying notes to the basic financial statements
-50-
Primary Government
Private -
ASSETS
Pension
purpose
Funds
Trusts
Cash and cash equivalents
$ 735
$ 15,889
Receivables:
Interest
2,561
-
Other
-
-
Investments at fair value
Money market funds
12,835
-
Common stock
1,542,602
-
Mutual funds
2,350,007
1,049,299
Total assets
3,908,740
1,065,188
LIABILITIES
Voucher and accounts payable 14 -
Payroll taxes and withholdings
payable - -
Total liabilities 14 -
NET POSITION
Net position restricted for pensions
Held in trust for other purposes
$ 3,908,726
$ 1,065,188
See accompanying notes to the basic financial statements
-50-
CITY OF PADUCAH, KENTUCKY
STATEMENT OF CHANGES IN NET POSITION
FIDUCIARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
Additions:
Contributions:
Employer
Plan members
Private donations
Total contributions
Investment income:
Net increase (decrease) in
fair value of investments
Interest and dividends
Net investment income
Total additions
Deductions:
Benefits
Capital outlay
Administrative expenses
Total deductions
Change in net position
Net position - beginning
Net position - ending
See accompanying notes to the basic financial statements.
-51-
Exhibit 13
Private -
Pension purpose
Funds Trusts
$ 313,912 $ -
- 5,115
313,912 5,115
(678,848)
(266,912)
69,207
70,727
(609,641)
(196,185)
(295,729)
(191,070)
937,050
-
-
81,546
45,443
16,186
982,493
97,732
(1,278,222)
(288,802)
5,186,948
1,353,990
$ 3,908,726 $ 1,065,188
CITY OF PADUCAH, KENTUCKY
NOTES TO THE FINANCIAL STATEMENTS
ANNUAL COMPREHENSIVE FINANCIAL REPORT
YEAR ENDED JUNE 30, 2022
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
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 Firefiehters' 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 government -wide 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
and City Commission. 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. 8t' Street
Paducah, Kentucky 42003
(Continued)
-52-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
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 Aeency — 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's
Community College System which is now administered by the Kentucky Community and Technical
College System. The Community College System receives student tuition, fees and other related
income that 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.
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.
(Continued)
-53-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
Note 1- Summary of Significant Account Policies:
Basis of Presentation
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.
Bond Fund — To account for restricted funds from bond issues used for infrastructure capital
investments within the Paducah area.
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, 2022
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, property and casualty insurance, and self-funded health 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 in accordance with maintenance trust agreements.
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. 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. Custodial 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, 2022
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. Custodial 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. 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, 2022
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 departments and their line
items; however, any revisions that alter the total expenditures 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 the modified accrued basis of accounting.
Encumbrance accounting, under which purchase orders, contracts, and other commitments for
expenditures 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, 2022.
Cash and Investments
The City Commission 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 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, 2022
Note 1- Summary of Significant Accounting Policies:
Receivables
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.
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
Inventory consists of expendable supplies and fuel of $64,326 held for consumption and re -sell and real
property of $341,539 held for urban development. Inventory supplies are stated at cost on a first -in, first -
out basis. Inventory property held for development are stated at the lower of cost or market. The cost is
recorded as an expenditure at the time individual items are consumed or sold for urban development rather
than when purchased.
Capital Assets
The accounting treatment of property, plant and equipment (capital assets) depends on whether the assets
are used in governmental fund operations or proprietary fund operations and whether they are reported in
the government -wide or fund financial statements.
Government -wide Statement
In the government -wide financial statements, property, plant and equipment are accounted for as capital
assets. All capital assets are valued at historical cost or estimated historical cost if actual is unavailable,
except for donated capital assets and work of art capital assets received in a service concession
arrangement which are recorded at their acquisition value at the date of donation. Estimated historical cost
was used to value the majority of the assets acquired prior to June 30, 2004.
(Continued)
-58-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
Note 1- Summary of Significant Accounting Policies:
Capital Assets
Assets capitalized have an original cost of $500 or more prior to July 1, 1999, $2,500 or more after July 1,
1999, $3,000 or more after June 24, 2009 and $5,000 or more after June 30, 2016. 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
10-30 Years
Buildings
30 Years
Building improvements
10-30 Years
Infrastructure
10-30 Years
Equipment
3-10 Years
Furnishings and fixtures
5-7 Years
Vehicles
7-10 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
Government -wide Statement
In addition to assets, the statement of net position will sometimes report a separate section for deferred
outflows of resources. This separate financial statement element, deferred ou flows of resources, represent
a consumption of net assets that applies to future period and will not be recognized as an outflow of
resources (expense/expenditure) until then. The government has two items that qualify for reporting in the
category. These are the deferred charge on refunding and deferred pension and other post -employment
benefits (OPEB) related outflows reported in the statements 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.
The deferred pension and OPEB related outflows result from pension and OPEB contributions subsequent
to the measurement date of the pension and OPEB plans and various changes resulting from actuarial
pension and OPEB measurement. The pension and OPEB contribution amounts are deferred and
recognized as a component of the change in pension plan liability in the next measurement period. The
various changes resulting from actuarial pension and OPEB measurements are deferred and amortized in
future periods as a component of the pension and OPEB expense.
In addition to liabilities, the statement of net position will sometimes report a separate section for deferred
inflows of resources. This separate financial statement element, deferred inflows of resources, represent an
acquisition of net assets that applies to future periods and will not be recognized as an inflow of resources
(revenue) until that time. The City has four type of items reported in this category. These are receipt of
coronavirus recovery grant funding, property taxes levied during the fiscal year for the next fiscal year,
inflows related to the City's pension and OPEB plans that qualify for reporting in this category — deferred
pension and OPEB related inflows and lessor of facilities and real property to other organizations.
(Continued)
-59-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
Note 1- Summary of Significant Accounting Policies:
Deferred Outflows/Inflows of Resources
Coronavirus recovery grant funds received are deferred and will be used in future periods. The various
changes resulting from actuarial pension and OPEB measurements are deferred and amortized in future
periods as a component of the pension and OPEB expense. Future cash receipts under non -cancelable
leases measured at present value are deferred inflow of resources and amortized in future periods as a
component of operation income.
Fund Financial Statements
The government has two types of items, which arises only under a modified accrual basis of account,
which qualifies for reporting as deferred inflows of resources. Accordingly, the item, unavailable revenue,
is reported only in the governmental funds balance sheet. The governmental funds report unavailable
revenues for two sources: property taxes and coronavirus recovery grants. These amounts are 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 by applicable
bond covenants.
Accrued Leave
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.
(Continued)
-60-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
Note I - Summary of Significant Accounting Policies:
Equity Classifications
Government -wide Statements
Equity is classified as net position and displayed in three components:
a. Net invested in capital assets — Consists of capital assets including restricted capital assets, net of
accumulated depreciation and reduced by the outstanding balances of any bonds, mortgages, notes,
or other borrowings that are attributable to the acquisition, construction, or improvement of those
assets.
b. Restricted net position — Consists of net assets with constraints placed on the use either by (1)
external groups such as creditors, grantors, contributors, or laws or regulations of other governments;
or (2) law through constitutional provisions or enabling legislation.
c. Unrestricted net position — All other net assets that do not meet the definition of "restricted" or "net
invested in capital assets."
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 includes amounts that have not been assigned to other funds or restricted,
committed, or assigned to a specific purpose within the General Fund. The General Fund is the only
fund which may report a positive unassigned fund balance. In other governmental funds, it is not
appropriate to report a positive unassigned fund balance if expenditures incurred for specific
purposes exceed the amounts that are restricted, committed, or assigned to those purposes, it may
be necessary to report a negative unassigned fund balance in that fund.
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.
(Continued)
-61-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
Note 1- Summary of Significant Accounting Policies:
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 transfers.
Program Revenues
Amounts reported as program revenues include 1) charges to customers or applicants for goods, services,
or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions,
including special assessments. Internally dedicated resources are reported as general revenues rather than
as program revenues. Likewise, general revenues include all taxes.
Operating and Non -Operating Revenues and Expenses — Proprietary Funds
Operating revenues and expenses for proprietary funds are those that result from providing services and
producing and delivering goods and/or services. It also includes all revenue and expenses not related to
capital and related financing, noncapital financing, or investing activities. Operating expenses for the
enterprise and internal service funds include the cost of sales and services, administrative expenses, and
depreciation on capital assets. All revenues and expenses not meeting this definition are reported as
nonoperating revenues and expenses.
Expenditures/Expenses
In the government -wide financial statements, expenses are classified by function for both governmental
and business -type activities.
In the fund financial statements, expenditures are classified as follows:
Governmental Funds — by 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.
(Continued)
-62-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
Note 1- Summary of Significant Accounting Policies:
Stewardship, Compliance, and Accountability
By its nature as a local government unit, the City and its component units are subject to various federal,
state, and local laws and contractual regulations. An analysis of the City's compliance with significant
laws and regulations and demonstration of its stewardship over City resources follows.
Fund Accounting Requirements
The City complies with all state and local laws and regulations requiring the use of separate funds.
Revenue Restrictions
The City has various restrictions placed over certain revenue sources from state or local requirements or
contractual agreements. The primary restricted revenue sources include:
Revenue Source
Section Eight Housing Choice Voucher Program
FEMA - Disaster Grants
Emergency Communication Revenue
Transient Room Tax
Homeland Security Grant Program
Bond Proceeds
25% of Employee Earning Tax
Legal Restrictions of Use
Subsidize Rental Costs for Low -
Income Families
Debris Removal and Disaster Recovery
E-911 Emergency Services
Debt Obligations and Tourism Activities
Homeland Security Enhancement
Defeasance of debt and Capital Projects
Economic, Community and
Capital Development
For the year ended June 30, 2022, 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.
Pensions
For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of
resources related to pensions, and pension expense, information about the fiduciary net position of the
County Employees Retirement System (CERS) and additions to/deductions from fiduciary net position have
been determined on the same basis as they are reported by the pensions. For this purpose, benefit payments
(including refunds of employee contributions) are recognized when due and payable in accordance with the
benefit terms. Investments are reported at fair value.
Other Post -employment Benefits (OPEB)
For purposes of measuring the liability, deferred outflows of resources and deferred inflows of resources
related to OPEB, and OPEB expense, information about the fiduciary net position of the County
Employees Retirement System (CERS) and additions to/deductions from CERS's fiduciary net position
have been determined on the same basis as they are reported by CERS. For this purpose, benefit payments
(including refunds of employee contributions) are recognized when due and payable in accordance with
the benefit terms. Investments are reported at fair value, except for money market investments and
participating interest-earning investment contracts that have a maturity at the time of purchase of one year
or less, which are reported at cost. (Continued)
-63-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
Note 1- Summary of Significant Accounting Policies:
Subsequent Events
In preparing these financial statements, management has evaluated events and transactions for potential
recognition or disclosure through December 21, 2022, the date financial statements were available to be
issued.
Note 2 - Property Taxes:
The City bills and collects its own property taxes. The City elects to use the annual property assessment
prepared by McCracken County as its base to apply the property tax rate. According to Kentucky Revised
Statutes, the assessment date for the City must conform to the assessment date of McCracken County and
the annual increase in the property tax levy cannot exceed 4%. City property tax revenues are recorded as
a receivable when assessed because the City has an enforceable legal claim to the resources. At this time,
the receivable is offset by unearned revenue. Property tax revenues are recognized during the period for
which they are levied.
The due dates and collection period for all property taxes, exclusive of vehicle taxes, for the fiscal year
ended June 30, 2022, are as follows:
Description
Assessment and enforceable lien
Levy
Face value amount payment dates
Delinquent date - 10% penalty
plus 1/2% per month
Note 3 - Detail Notes on Transaction Classes/Accounts:
Date
January 1, 2021
September 22, 2021
1 st half by November 1, 2021
2" d half by February 1, 2022
1St half - November 30, 2021
2" d half - February 28, 2022
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, 2022, 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 $51,078,046 and
$52,444,035, respectively.
(Continued)
-64-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
Note 3 - Detail Notes on Transaction Classes/Accounts:
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;
4. Bonds or certificates of indebtedness of the Commonwealth of Kentucky and of its agencies and
instrumentalities;
5. Certificates of deposit 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.
The City categorizes its fair value measurements within the fair value hierarchy established by generally
accepted accounting principles. The three levels of the fair value hierarchy are as follows:
• Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
• Level 2: Valued using a matrix pricing technique. Matrix pricing is used to value securities based
on the securities' relationship to benchmark quoted prices.
• Level 3: Unobservable inputs — market data are not available and are developed using the best
information available about the assumptions that market participants would use when pricing an
asset or liability.
The asset's or liability's fair value measurement level within the fair value hierarchy is based on the lowest
level of any input that is significant to the fair value measurement.
(Continued)
-65-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
Note 3 - Detail Notes on Transaction Classes/Accounts:
The City has the following fair value measurements as of June 30, 2022:
(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.
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.
(Continued)
-66-
Weighted
Fair Value/
Average
Average
Carrying
Credit Quality/
Fair Value
Maturity
Types of Investments
Amount
Rating (1)
Level l Level 2
Level 3 Years 2
Governmental and
Business Funds
Certificates of deposits
$ -
NR
NA
Money market
19,895,793
NR
$19,895,793
NA
TOTAL GOVERNMENTAL AND
BUSINESS FUNDS
$19,895,793
Fiduciary and Private
Purpose Trust Funds
Cash equivalents
$ 12,835
NR
$ 12,835 $
$ NA
Common stock
1,542,602
NR
2,109,062
NA
Mutual funds
Bond
1,494,063
NR
1,798,368
8.46
Equity
1,519,911
NR
1,950,722
NA
International
385,332
NR
523,181
NA
TOTAL FIDUCIARY AND
PRIVATE PURPOSE
TRUST FUNDS
L4,9
(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.
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.
(Continued)
-66-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
Note 3 - Detail Notes on Transaction Classes/Accounts:
Pension Trust Policy
Asset allocation guideline for the plan is as follows:
Equities
Fixed income
PFPF Retirement Plan
Minimum Target Maximum
45% 55% 65%
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 Al, P1.
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.
(Continued)
-67-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
Note 3 - Detail Notes on Transaction Classes/Accounts:
Capital Assets
Capital asset activity for the year ended June 30, 2022, was as follows:
Primary Government:
Capital assets, not being depreciated:
Land
Construction -in -progress
Total capital assets, not being
depreciated
Capital assets, being depreciated:
Land improvements
Buildings and improvements
Infrastructure
Equipment
Furnishings and fixtures
Vehicles
Totals at historical cost
Less accumulated depreciation:
Land improvements
Buildings and improvements
Infrastructure
Equipment
Furnishings and fixtures
Vehicles
Total accumulated depreciation
Total capital assets, being
depreciated, net
PRIMARY GOVERNMENT
ACTIVITIES CAPITAL
ASSETS, NET
Balance Balance
July 1, 2021 Additions Deductions June 30, 2022
$10,423,688 $ 59,992 $ 336,350 $10,147,330
5,878,560 5,743,744 1,072,440 10,549,864
16,302.248
5.803.736
1.408.790
20.697.194
22,574,916
93,356
-
22,668,272
22,282,201
32,505
-
22,314,706
55,158,875
1,001,825
-
56,160,700
11,495,295
585,713
45,803
12,035,205
288,748
-
19,794
268,954
11,306.442
515,360
56,301
11.765.501
123,106,477
2,228,759
121,898
125,213,338
7,798,643
1,096,429
-
8,895,072
14,462,871
332,575
-
14,795,446
34,993,707
752,715
-
35,746,422
8,075,472
655,342
45,803
8,685,011
231,718
15,025
19,794
226,949
7,621,883
892,075
56,301
8,457,657
73,184,294
3,744,161
121,898
76,806,557
49,922,183 (1,515,402) - 48,406,781
66.224.431 4.288.334 1.408.79069.103.975
Deductions of construction -in -progress include an abandoned project with accumulated costs of $17,165.
(Continued)
-68-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
Note 3 - Detail Notes on Transaction Classes/Accounts:
Capital Assets
Depreciation expense was charged to governmental activities as follows:
General government:
General administration
$ 294,334
Cable authority
787
Finance
1,081
Planning
19,529
Information systems
16,912
Fleet maintenance
4.886
Total general government 337.529
Public safety:
Police 251,716
Fire 101,383
Emergency 911 198,095
Court awards 888
Fleet Lease Trust 954.526
Total public safety 1.506.608
Public service:
Public works 10,934
Engineering 42.903
Total public service 53.837
Parks and recreation 1.093.892
Planning and development:
Infrastructure 752,295
Grants -
Total planning and development 752,295
TOTAL DEPRECIATION EXPENSE —
GOVERNMENTAL ACTIVITIES3 744 161
Depreciation expense was charged to business -type activities as follows:
Solid Waste Fund $ 661,471
Section Eight Housing 2,418
Civic Center 10,021
TOTAL DEPRECIATION EXPENSE —
BUSINESS -TYPE ACTIVITIES 673 910
(Continued)
-69-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
Note 3 - Detail Notes on Transaction Classes/Accounts:
Capital Assets
Balance
Balance
Business -type Activities:
Julv 1, 2021
Increases
Decreases
June 30, 2022
Capital assets, not being depreciated:
Land
$ 68,886
$ -
$ -
$ 68.886
Total capital assets, not being
depreciated
68,886
-
-
68.886
Capital assets, being depreciated:
Buildings and improvements
563,965
-
-
563,965
Equipment
2,048,348
727,847
36,390
2,739,805
Vehicles
3,550,246
-
-
3,550,246
Totals at historical cost
6.162.559
727.847
36.690
6.854.016
Less accumulated depreciation:
Buildings and improvements
374,276
16,326
-
390,602
Equipment
1,513,812
237,612
36,390
1,715,034
Vehicles
2,249,235
419,972
-
2,669,207
Total accumulated depreciation
4,137,323
673,910
36,390
4,774,843
Total capital assets, being
depreciated, net
2,025,236
53,937
-
2,079,173
BUSINESS -TYPE ACTIVITIES
CAPITAL ASSETS, NET
2.094.12253
937
$-
2.148.059
Balance
Balance
Discretely Presented
July 1, 2021
Increases
Decreases
June 30, 2022
Component Units:
Capital assets, not being depreciated:
Land & construction in progress
$ 2,326,577
$ 3,341,774
$ -
$ 5,668,351
Capital assets, being depreciated:
Utility plant
104,520,846
11,865,896
-
116,386,742
Less accumulated depreciation:
Utility plant
46,015,020
7,171,077
-
53,186,097
Total capital assets, being
depreciated, net
58,505,826
4,694,819
-
63,200,645
COMPONENT UNIT
CAPITAL ASSETS, NET60.832.403
8,036,593
$ -
68.868.996
Depreciation expense, charged to functions/programs
of discretely
presented major component units as
follows:
Paducah Water Works 2.728266
Increases include $8,128,934 in capital assets received from West McCracken Water District as part of the
merger. These assets had accumulated depreciation of $4,442,811.
(Continued)
-70-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
Note 3 - Detail Notes on Transaction Classes/Accounts:
Deferred Outflows/Inflows of Resources
A summary of change in deferred outflows/inflows of resources is as follows:
Balance Balance
July 1, 2021 Additions Reductions June 30, 2022
Governmental Activities
Deferred outflows of resources
Deferred charge on refunding
Pensions:
Deferred pension contributions
Differences between employer contributions
and proportionate share of contributions
Differences between expected and
actual experience
Change of assumptions
Difference between projected and
actuarial earnings
Pension related deferred outflows
Deferred inflows of resources
Differences between employer contributions
and proportionate share of contributions
Differences between expected and
actual experience
Difference between projected and
actuarial earnings
Pension related deferred inflows
Other post -employment benefits (OPEB):
Deferred outflows of resources
Deferred OPEB contributions
Differences between employer contributions
and proportionate share of contributions
Differences between expected and
actual experience
Change of assumptions
Difference between projected and
actuarial earnings
OPEB related deferred outflows
Deferred inflows of resources
Differences between expected and
actual experience
Change of assumptions
Difference between projected and
actuarial earnings
Differences between employer contributions
and proportionate share of contributions
OPEB related deferred inflows
Other Deferred inflows of resources
Unavailable revenues —property taxes
Unavailable revenues — grants
Leases
$ 173,414 $ 10,910
$ 4,342,499 $ 5,089,517
235,458 2,540,282
1,962,885 632,306
2,581,478 -
1,572,123 749,270
$ 10,694,443 $ 9,011,375
$ 647,595 $
263,405
708,210 11,139,988
1.355.805 $ 11,403 393
$ 1,500,977
37,206
1,600,079
3,472,021
850.814
7.461.097
(52,424) $ 131,900
$ (4,342,499) $ 5,089,517
(235,458) 2,540,282
(1,190,262) 1,404,929
(1,794,744) 786,734
(2,072,509) 248,884
(9,635,472) $ 10,070,346
$ (487,845) $ 159,750
(85,800) 177,605
(4,758,050) 7,090,148
(5,331,695) 7.427.503
$ 1,789,528
$ (1,500,977)
$ 1,789,528
690,331
(37,206)
690,331
-
(325,042)
1,275,037
3,389,342
(2,104,938)
4,756,425
(850,814)
5.869.201
(4.818.977)
8.511.321
$ 2,530,125 $ 1,743,617
20,114 -
- 5,345,909
477,672 -
3.027.911 7.089.526
$ (1,217,890) $ 3,055,852
(10,089)
10,025
(2,022,448)
3,323,461
(202,567)
275,105
(3.452.994)
6.664.443
6.118.9776.474.350 (6.118.977) 6.474.350
$ -6953.971 (804.864) 6.149.107
$ 4 097 404 $ - (594.943)3.502,461
-71-
(Continued)
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
Note 3 - Detail Notes on Transaction Classes/Accounts:
Deferred Outflows/Inflows of Resources
A summary of change in deferred outflows/inflows of resources is as follows:
Balance Balance
July 1, 2021 Additions Reductions June 30, 2022
Business -Type Activities
Pensions:
Deferred outflows of resources
Deferred pension contributions
Differences between employer contributions
and proportionate share of contributions
Differences between expected and
actual experience
Change of assumptions
Difference between projected and
actuarial earnings
Pension related deferred outflows
Deferred inflows of resources
Differences between expected and
actual experience
Differences between employer contributions
and proportionate share of contributions
Difference between projected and
actuarial earnings
Pension related deferred inflows
Other post -employment benefits (OPEB)
Deferred outflows of resources
Deferred OPEB contributions
Change of assumptions
Differences between expected and
actual experience
Differences between employer contributions
and proportionate share of contributions
Difference between projected and
actuarial earnings
OPEB related deferred outflows
Deferred inflows of resources
Differences between expected and
actual experience
Change of assumptions
Difference between projected and
actuarial earnings
Differences between employer contributions
and proportionate share of contributions
OPEB related deferred inflows
$ 187,814
16,992
79,002
123,709
79,278
$ 486.795
$ 228,717 $ (187,814) $ 228,717
51,824 (16,992) 51,824
- (51,154) 27,848
- (91,160) 32,549
(79,278)
$ 280,541 (426.398) $ 340,938
$ - 34,909
13,548 -
- 506,108
$ 13,548 L541 017
$ 75,984
$ 86,402
173,442
119,671
166,599
-
5,566
15,000
33,143
-
$ 454,734
$ 221,073
$ 166,729
$ 144,137
1,055
-
- 202,562
16,457
$ 184,241 $ 346,699
(11,371)
23,538
(9,431)
4,117
(182,870)
323,238
(203,6721
$ 350,893
$ (75,984) $ 86,402
(100,096) 193,017
(52,115) 114,484
(5,566) 15,000
(33,143)
(266.904) $ 408,903
$ (93,497) $ 217,369
(378) 677
(75,907) 126,655
(5,932) 10,525
(175.714) $ 355,226
Accounts Payable
Payables in the governmental and proprietary funds are composed of payables to vendors and accrued
expenditures.
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.
(Continued)
-72-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
Note 3 - Detail Notes on Transaction Classes/Accounts:
Long -Term Liabilities
Governmental Activities
As of June 30, 2022, the governmental long-term liabilities consisted of the following:
General obligation bonds:
Current portion
$ 2,060,000
Noncurrent portion
30,856,439
TOTAL GENERAL OBLIGATION
BOND COSTS, NET OF PREMIUMS AND DISCOUNTS
32.916.439
Note payable:
Current portion
$ 323,946
Noncurrent portion
7.719.979
TOTAL NOTE PAYABLE PAYMENTS8.043.925
Accrued compensated absences:
Current portion
$ 1,279,861
Noncurrent portion
1,088,322
TOTAL ACCRUED COMPENSATED
ABSENCES
2.368.183
Business -type Activities
As of June 30, 2022, the long-term liabilities payable from proprietary fund resources consisted of the
following:
Accrued compensated absences:
Current portion $ 101,757
Noncurrent portion 7,869
TOTAL ACCRUED COMPENSATED
ABSENCES $ 109,626
General Obligation Bonds
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.
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.
(Continued)
-73-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
Note 3 - Detail Notes on Transaction Classes/Accounts:
Long -Term Liabilities
General Obligation Bonds
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.
Series 2014B Bond Issue — The City of Paducah issued general obligation refunding bonds of $4,225,000
in November 2014 with interest rate of 2.55%, to advance refund $3,845,000 of outstanding 2005 series
bonds issued to finance the police and firefighter's pension fund estimated actuary liability. These bonds
are required to be fully paid within 10 years from the date of issue and are backed by the full faith and
credit of the City.
Series 2018A Bond Issue — The City of Paducah issued general obligation bonds of $2,700,000 in August
2018, to finance 911 Equipment and Riverfront development. Interest rates are fixed ranging from 3.125%
to 5.0%. 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 2018B Bond Issue — The City of Paducah issued general obligation bonds of $2,670,000 in August
2018, to refund $2,815,573 of outstanding Kentucky League of Cities Funding Trust 2003 Lease and 2009
Lease agreements issued to finance several public improvement projects. Interest rates are fixed ranging
from 4.0% to 5.0%. These bonds are required to be fully paid within 10 years from the date of issue and
are backed by the full faith and credit of the City.
Series 2020A Bond Issue — The City of Paducah issued general obligation bonds of $20,520,000 in
February 2020, to finance Municipal Sports and Recreational Facility. Interest rates are fixed ranging
from 2.125% to 4.0%. 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 2020B Bond Issue — The City of Paducah issued general obligation refunding bonds of $3,020,000
in October 2020 with interest rate of 3.00%, to advance refund $3,140,000 of outstanding 2010B series
bonds issued to refinance 2001 Bond Issue. These bonds are required to be fully paid within 6 years from
the date of issue and are backed by the full faith and credit of the City. The reacquisition price exceeded
the net carrying amount of the old debt by $47,734. This amount was deferred and amortized over the
remaining life of the refunded debt. This advance refunding was undertaken to reduce future total debt
service payments over the next 6 years by $190,533 with a resulting net economic gain of $167,772.
(Continued)
-74-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
Note 3 - Detail Notes on Transaction Classes/Accounts:
Long -Term Liabilities
Notes Payable
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 and are
backed by the full faith and credit of the City.
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. On January 22, 2022, McCracken County
issued general obligation refunding bonds to advance refund the original 2011 series bonds issued. The
City's portion of this amount was $1,330,614. The reacquisition price exceeded the net carrying amount of
the City's old debt by $10,910. This amount was deferred and amortized over the remaining life of the
refunded debt. This advance refunding reduced the City's future total debt service payments to McCracken
County over the next 10 years by $140,101 with a resulting net economic gain of $132,010. The note
matures on December 1, 2031 and has interest rates of 4.0% and are backed by the full faith and credit of
the City.
Community Financial Services Bank — On January 24, 2017, the City entered into an agreement in the
amount of $3,000,000 on behalf of the County of McCracken, Kentucky to finance improvements to the
Julian Carroll Convention Center. The agreement matures on January 24, 2032 with interest rate of 1.98%
and are backed by the full faith and credit of the City.
Kentucky Infrastructure Authority (KIA) — On July 1, 2018, the City entered into an agreement with KIA
to obtain up to $4,610,667 for rehabilitation of Pump Station 92. The agreement contains principal
forgiveness in the amount of 50% but not to exceed $1,300,000. Interest rate is fixed at 0.50%. This
agreement is required to be fully paid within 20 years from the date of initiation of operation for the
project and are backed by the full faith and credit of the City.
(Continued)
-75-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
Note 3 - Detail Notes on Transaction Classes/Accounts:
Long -Term Liabilities
Changes in Long -Term Liabilities
The following is a summary of changes in long-term debt for the year ended June 30, 2022:
Type of Liability:
Governmental activities:
General obligation bonds
Beginning Ending Due within
Balance Additions Reductions Balance One Year
Recreation Facility
$20,520,000
Refinanced Pension
1,985,000
Refinanced Convention Center 2,525,000
Public Pool Renovations
650,000
Economic Development
1,445,000
Refinancing Public Projects
3,240,000
Riverfront and 911 Equipment 2,400,000
Refunding Floodwall issue
1,715,000
Premiums
443,405
Discounts
(91,967)
Total bonds payable
34,831,438
Notes payable:
Kentucky Infrastructure
Authority
322,622
Kentucky Association of
Counties
1,301,646
Murray State University
Agreement
1,624,534
CFSB Agreement
2,814,627
Total notes payable
6,063,429
$ - $ - $ 20,520,000
- (445,000) 1,540,000
- (475,000) 2,050,000
- (75,000) 575,000
- (155,000) 1,290,000
- (330,000) 2,910,000
- (165,000) 2,235,000
- (350,000) 1,365,000
204,531 (129,130) 518,806
(10,013) 14,613 (87,367)
194,518 (2,109,517) 32,916,439
3,460,662 (977,376) 2,805,908
- (160,550) 1,141,096
1,330,614 (1,624,534) 1,330,614
- (48,320) 2,766,307
4,791,276 (2,810,780) 8,043,925
460,000
490,000
75,000
165,000
340,000
165,000
365,000
2,060,000
164,259
110,409
49,278
323,946
Accrued Compensated
Absences 2,303,670 1,688,704 (1,624,191) 2,368,183 1,279,986
TOTAL GENERAL LONG-
TERM LIABILITIES $43,198,537 $ 6.674.498 (6.544.4881 S43128 547 $ 3,663932
Business -type activities:
Accrued compensated
Absences $ 143,928 $ 89,982 $ (124,284) $ 109,626 $ 101,757
TOTAL BUSINESS LONG-
TERM LIABILITIES $ 143,928 $ 89,982 11242841 $ 109,626 $ 101,757
(Continued)
-76-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
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 investment in capital assets" for
governmental activities is:
Net Capital Assets
Less:
19.75% of the outstanding 2020B
General obligation bonds
Net of the County's portion
78% of the outstanding 2014A
General obligation bonds
100% of the outstanding 2013A
General obligation bonds
52% of the outstanding 2013B
General obligation bonds
100% of the outstanding 2018A
General obligation bonds
100% of the outstanding 2018B
General obligation bonds
100% of the outstanding KY
Infrastructure Authority
Net investment in capital assets
Annual Debt Service Requirements
$69,103,975
$ (404,876)
202,438
(202,438)
(2,269,800)
(575,000)
(670,500)
(2,235,000)
(1,365,000)
(2.805 008)
58.980.030
The annual debt service requirements to maturity for bonds and notes as of June 30, 2022, are as follows:
Year Ending
June 30
Principal
Interest
2023
$ 2,383,946
$ 1,058,350
2024
2,738,783
980,976
2025
2,784,078
897,314
2026
2,854,030
808,372
2027
5,538,256
709,212
2028-2032
12,292,879
2,308,830
2033-2037
7,450,758
1,008,444
2038-2040
4,917,634
418,525
TOTALS
40.960.364 8.190.023
(Continued)
-77-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
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, 2022, are as
follows:
Termination Benefits
Thirteen 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. Termination benefits of $12,944 were paid for the year ended June 30,
2022.
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, 2022, $167,035 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, 2022, 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 maybe 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)
-78-
Governmental
Business -type
Activities
Activities
Accrued sick leave
$ 691,153
$ 46,191
Accrued vacation leave
1,677,030
63,435
Totals
2,368,183
109,626
Less current portion
1,279,861
101,757
LONG-TERM PORTION
1 088 322
7 869
Termination Benefits
Thirteen 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. Termination benefits of $12,944 were paid for the year ended June 30,
2022.
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, 2022, $167,035 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, 2022, 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 maybe 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)
-78-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
Note 3 - Detail Notes on Transaction Classes/Accounts:
Interfund Transactions and Balances
Interfund transfers during the year ended June 30, 2022, were as follows:
TOTALS 8.699.190
Interfund
Transfers Out
$3,373,217
4,746,121
3,138
146,418
70,000
360,296
8.699.190
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. Significant transfers from the general fund transfers includes $861,175 for E911 support;
$1,027,438 for debt service; and $1,026,092 for capital projects. Significant transfers from the special
revenue investment fund includes $918,000 for municipal aid street resurfacing program; $1,631,872 for
debt service; and $2,126,250 for capital projects. Significant transfers from solid waste fund include
$320,000 for general fund operations support.
Due To/From Balances
Due to/from balances used to cover current operating expenses were as follows as of June 30, 2022:
General Fund
Bond Fund
Special Revenue Investment Fund
TOTALS
Note 4 - Pension Plans - City of Paducah:
Due To Due From
$ 7,824 $1,452,616
- 7,824
1,452,616
1 460 440
SL460 440
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)
-79-
Interfund
Governmental Funds:
Transfers In
General Fund
$ 463,138
Special Revenue Investment Fund
285,000
Special Revenue Bond Fund
-
Capital Project Fund
3,152,342
Debt Service Fund
2,805,728
Nonmajor Governmental Funds
1,779,175
Internal Service Funds
152,181
Proprietary Funds:
Solid Waste
-
Nonmajor Proprietary Funds
61,626
TOTALS 8.699.190
Interfund
Transfers Out
$3,373,217
4,746,121
3,138
146,418
70,000
360,296
8.699.190
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. Significant transfers from the general fund transfers includes $861,175 for E911 support;
$1,027,438 for debt service; and $1,026,092 for capital projects. Significant transfers from the special
revenue investment fund includes $918,000 for municipal aid street resurfacing program; $1,631,872 for
debt service; and $2,126,250 for capital projects. Significant transfers from solid waste fund include
$320,000 for general fund operations support.
Due To/From Balances
Due to/from balances used to cover current operating expenses were as follows as of June 30, 2022:
General Fund
Bond Fund
Special Revenue Investment Fund
TOTALS
Note 4 - Pension Plans - City of Paducah:
Due To Due From
$ 7,824 $1,452,616
- 7,824
1,452,616
1 460 440
SL460 440
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)
-79-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
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 multiple -employer defined benefit pension plan administered by the Kentucky Retirement
System, an agency of the Commonwealth of Kentucky. Under the provisions of the Kentucky Revised
Statute ("KRS") Section 61.645, the Board of Trustees of the Kentucky Retirement System administers
CERS and has the authority to establish and amend benefit provisions. The Kentucky Retirement
System issues a publicly available financial report that includes financial statements and required
supplementary information for CERS. That report may be obtained from http://kyret.ky.gov/.
Benefits provided - CERS provides retirement, health insurance, death and disability benefits to Plan
employees and beneficiaries. Employees are vested in the plan after five years' service. For retirement
purposes, non -hazardous and hazardous employees are grouped into three tiers, based on hire date:
Non -hazardous members:
Tier 1 Participation date Prior to September 1, 2008
Unreduced retirement 27 years of service or 65 years old
Reduced retirement Minimum 5 years of service and 55 years old
Minimum 25 years of service and any age
Tier 2 Participation date September 1, 2008 to December 31, 2013
Unreduced retirement Minimum 5 years of service and 65 years old
Age of 57 or older and sum of service years plus age equal 87
Reduced retirement Minimum 10 years of service and 60 years old
Tier 3 Participation date After December 31, 2013
Unreduced retirement Minimum 5 years of service and 65 years old
Age of 57 or older and sum of service years plus age equal 87
Reduced retirement Not available
Hazardous members:
Tier 1 Participation date
Prior to September 1, 2008
Unreduced retirement
20 years of service and any age
Minimum 5 years of service and 55 years old
Reduced retirement
Minimum 15 years of service and 50 years old
Tier 2 Participation date
September 1, 2008 to December 31, 2013
Unreduced retirement
Minimum 5 years of service and 60 years old
25 years of service and any age
Reduced retirement
Minimum 15 years of service and 50 years old
Tier 3 Participation date After December 31, 2013
Unreduced retirement Minimum 5 years of service and 60 years old
25 years of service and any age
Reduced retirement Not available
(Continued)
-80-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
Note 4 - Pension Plans - City of Paducah:
Cost -Sharing Multiple -Employer Defined Benefit Plan
County Employees' Retirement System
Cost of living adjustments are provided at the discretion of the General Assembly. Retirements is based
on a factor of the number of years' service and hire date multiplied by the average of the highest five
years' earnings. Reduced benefits are based on factors of both of these components. Participating
employees become eligible to receive the health insurance benefit after at least 180 months of service.
Death benefits are provided for both death after retirement and death prior to retirement. Death benefits
after retirement are $5,000 in lump sum. Five years' service is required for death benefits prior to
retirement and the employee must have suffered a duty -related death. The decedent's beneficiary will
receive the higher of the normal death benefit and $10,000 plus 25% of the decedent's monthly final rate
of pay and any dependent child will receive 10% of the decedent's monthly final rate of pay up to 40% for
all dependent children. Five years' service is required for non -service related disability benefits.
Plan Funding — State statute requires active members to contribute % of creditable compensation based
on the tier:
Non -hazardous Hazardous
Required Contribution Required Contribution
Tier 1 5% Tier 1 8%
Tier 2 5% plus 1% for insurance Tier 2 8% plus 1% for insurance
Tier 3 5% plus 1% for insurance Tier 3 8% plus 1% for insurance
Employers contribute at the rate determined by the CERS Board to be necessary for the actuarial
soundness of the system, as required by KRS 61.565 and 61.752. The City's required contribution rate
was 21.17% for non -hazardous employees and 33.86% for hazardous employees for the year ended
June 30, 2022. Non -hazardous and hazardous employee plans are administered separately.
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows
of Resources Related to Pensions
At June 30, 2022, the City reported a liability for its proportionate share of the net pension liability for
CERS. The amount recognized by the City as its proportionate share of the net pension liability that
was associated with the City was as follows:
City's non -hazardous proportionate share of the CERS net pension liability $ 20,724,296
City's hazardous proportionate share of the CERS net pension liability 43.326.429
Total CERS net pension liability associated with the City S 64.050.725
The net pension liability for each plan was measured as of June 30, 2021, and the total pension liability
used to calculate the net pension liability was determined by an actuarial valuation as of that date.
(Continued)
-81-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
Note 4 - Pension Plans - City of Paducah:
Cost -Sharing Multiple -Employer Defined Benefit Plan
County Employees' Retirement System
The City's proportion of the net pension liability for CERS was based on the actual liability of the
employees and former employees relative to the total liability of the System as determined by the
actuary. At June 30, 2022, the City's non -hazardous proportion was 0.32505% percent and hazardous
proportion was 1.6275% percent.
For the year ended June 30, 2022, the City recognized pension expense of $6,894,406 ($2,214,963 for
non -hazardous and $4,679,443 for hazardous) related to CERS pension plans. At June 30, 2022, the
City reported deferred outflows of resources and deferred inflows of resources related to the CERS
pension plans from the following sources:
Difference between expected and
actual experience
Changes in assumptions
Net difference between projected and
actual earnings on pension plan
investments
Changes in proportion and differences
between City contributions and
proportionate share of contributions
City contributions subsequent to the
measurement date
Total
Non -hazardous
Hazardous
Deferred
Deferred
Deferred Deferred
Outflows of
Inflows of
Outflows of Inflows of
Resources
Resources
Resources Resources
(1,170,694)
$ 237,978
$ 201,143
$ 1,194,799 $ -
278,145
-
541,138 -
2,762,201 - 4,651,184
442,854 35,183 2,149,252 128,685
958,977 2,998,527 3,885,189 4,779,869
1,850,682 - 3,467,552 -
$ 2,809,659 $ 2,998,527 L-1352 $ 4,779,869
The City reported $5,318,238 as deferred outflows of resources related to pensions resulting from
City's non -hazardous and hazardous contributions subsequent to the measurement date that will be
recognized as a reduction of the net pension liability in the year ended June 30, 2023. Other amounts
reported as deferred outflows of resources and deferred inflows related to pensions will be recognized
in pension expense as follows:
Fiscal Year Ending June 30
Non -
Hazardous
Hazardous
2023 $ (98,334)
$ 360,548
2024 (468,728)
72,289
2025 (607,509)
(156,823)
2026 (864,979)
(1,170,694)
(Continued)
-82-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
Note 4 - Pension Plans - City of Paducah:
Cost -Sharing Multiple -Employer Defined Benefit Plan
County Employees' Retirement System
Actuarial assumptions - The total pension liability in the June 30, 2022 actuarial valuation was
determined using the following actuarial assumptions, applied to all periods included in the
measurement:
Non -Hazardous Hazardous
Inflation 2.30% 2.30%
Projected salary increases 3.30%-10.30% 3.55%-19.05%
Investment rate of return, net of
investment expense & inflation 6.25% 6.25%
For CERS, Mortality rates for the period after service retirement are according to the MP -2014
mortality improvement scale using a base year of 2010 for all active and retired employees and
beneficiaries. The MP -2014 mortality improvement scale using a base year of 2019 set forward four
years for male and female is used for the period after disability retirement. The actuarial assumptions
used were based on the results of an actuarial experience study for the period July 1, 2013 — June 30,
2018.
For CERS, the long-term expected return on plan assets is reviewed as part of the regular experience
studies prepared every five years. The most recent analysis, performed for the period covering fiscal
years 2013 through 2018, is outlined in a report dated April 18, 2019. Several factors are considered in
evaluating the long-term rate of return assumption including long-term historical data, estimates
inherent in current market data, and a log -normal distribution analysis in which best -estimate ranges of
expected future real rates of return (expected return, net of investment expense and inflation) were
developed by the investment consultant for each major asset class. These ranges were combined to
produce the long-term expected rate of return by weighting the expected future real rates of return by
the target asset allocation percentage and then adding expected inflation. The capital market
assumptions developed by the investment consultant are intended for use over a 10 -year horizon and
may not be useful in setting the long-term rate of return for funding pension plans which covers a
longer timeframe. The assumption is intended to be a long-term assumption and is not expected to
change absent a significant change in the asset allocation, a change in the inflation assumption, or a
fundamental change in the market that alters expected returns in future years.
(Continued)
-83-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
Note 4 - Pension Plans - City of Paducah:
Cost -Sharing Multiple -Employer Defined Benefit Plan
County Employees' Retirement System
The target allocation and best estimates of arithmetic real rates of return for each major asset class, as
provided by CERS's investment consultant, are summarized in the following table:
Total
100.00%
Discount rate - The discount rate used to measure the total pension liability was 6.25%. The projection
of cash flows used to determine the discount rate assumed that contributions from plan employees and
employers will be made at statutory contribution rates. Projected inflows from investment earnings
were calculated using the long-term assumed investment return of 6.25%. The long-term investment
rate of return was applied to all periods of projected benefit payments to determine the total pension
liability.
Sensitivity of CERS proportionate share of net pension liability to changes in the discount rate - The
following table presents the net pension liability of the City, calculated using the discount rates selected
by the pension system, as well as what the City's net pension liability would be if it were calculated
using a discount rate that is 1 -percentage -point lower or 1 -percentage -point higher than the current rate:
Target
Long -Term Expected
Asset Class
Allocation
Real Rate of Return
US Equity
21.75%
5.70%
Non -US Equity
21.75%
6.35%
Private Equity
10.00%
9.70%
Specialty Credit/High Yield
15.00%
2.80%
Core Bonds
10.00%
0.00%
Real Estate
10.00%
5.40%
Opportunistic
0.00%
0.00%
Real Return
10.00%
4.55%
Cash
1.50%
(0.60)%
Total
100.00%
Discount rate - The discount rate used to measure the total pension liability was 6.25%. The projection
of cash flows used to determine the discount rate assumed that contributions from plan employees and
employers will be made at statutory contribution rates. Projected inflows from investment earnings
were calculated using the long-term assumed investment return of 6.25%. The long-term investment
rate of return was applied to all periods of projected benefit payments to determine the total pension
liability.
Sensitivity of CERS proportionate share of net pension liability to changes in the discount rate - The
following table presents the net pension liability of the City, calculated using the discount rates selected
by the pension system, as well as what the City's net pension liability would be if it were calculated
using a discount rate that is 1 -percentage -point lower or 1 -percentage -point higher than the current rate:
(Continued)
-84-
Current
1%
Discount
1%
Decrease
Rate
Increase
CERS
5.25%
6.25%
7.25%
Non -hazardous' proportionate share of
net pension liability
$26,579,893
$20,724,296
$15,878,927
Hazardous' proportionate share of
net pension liability
$55,225,546
$43,326,429
$33,628,697
(Continued)
-84-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
Note 4 - Pension Plans - City of Paducah:
Cost -Sharing Multiple -Employer Defined Benefit Plan
County Employees' Retirement System
Pension plan fiduciary net position - Detailed information about the pension plan's fiduciary net
position is available in the separately issued financial report of the CERS.
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, 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.
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. There are no active participants in the plan at June 30, 2022. 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. As of June 30, 2022, there are no
participants in the plan and the plan was closed. AEPF does not issue a separate, stand-alone report.
Accordingly, the plan financial statements are included in this audit report.
(Continued)
-85-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
Note 4 - Pension Plans - City of Paducah:
Single Employer Defined Benefit Funds - Police and Firefighters' Pension Fund (PFPF) and
Appointive Employees' Pension Fund (AEPF)
Membership Information:
Membership of each plan consisted of the following at June 30, 2022:
PFPF AEPF
Active participants 0 0
Beneficiaries 21 0
Retired participants 15 0
TOTAL PARTICIPANTS 36 0
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
2%2% 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%.
Funding policy:
PFPF - 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.
AEPF - Since there are no 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.
(Continued)
-86-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
Note 4 - Pension Plans - City of Paducah:
Single Employer Defined Benefit Funds - Police and Firefighters' Pension Fund (PFPF) and
Appointive Employees' Pension Fund (AEPF)
Changes in PFPF and AEPF's Net Pension Liability is as follows:
Balance — June 30, 2022
Plan net position as a percentage of the
total pension liability
0.00%
For the year ended June 30, 2022, the City recognized pension expense of $86,698 ($125,351 expense
for PFPF and ($38,653) gain for AEPF) for these pension plans.
(Continued)
-87-
Total
Plan
Net
Pension
Net
Pension
PFPF
Liability
Position
Liability
(a)
(b)
(a) — (b)
Balance — June 30, 2021
7,303,631
$ 5,186,948
$ 2,116,683
Service cost
-
-
-
Interest expense
444,380
-
444,380
Experience losses (gains)
(16,133)
-
(16,133)
Change in assumptions
-
-
-
Contributions — City
-
310,000
(310,000)
Contributions — Members
-
-
-
Investment income
-
(609,641)
609,641
Benefits paid
(934,025)
(934,025)
-
Plan administrative expenses
-
(44.556)
44.556
Net change
(505.778)
(1.278.222)
772.444
Balance — June 30, 2022
6.797.853
S 3.908.726
S 2.889.127
Plan net position as a percentage of the
total pension liability
57.50%
Total
Plan
Net
Pension
Net
Pension
AEPF
Liability
Position
Liability
(a)
(b)
(a) — (b)
Balance — June 30, 2021
$ 38,653
$ -
$ 38,653
Service cost
-
-
-
Interest expense
2,319
-
2,319
Experience losses (gains)
(37,947)
-
(37,947)
Change in assumptions
-
-
-
Contributions — City
-
3,912
(3,912)
Contributions — Members
-
-
-
Investment income
-
-
-
Benefits paid
(3,025)
(3,025)
-
Plan administrative expenses
-
(887)
887
Net change
(38,653)
-
(38,653)
Balance — June 30, 2022
Plan net position as a percentage of the
total pension liability
0.00%
For the year ended June 30, 2022, the City recognized pension expense of $86,698 ($125,351 expense
for PFPF and ($38,653) gain for AEPF) for these pension plans.
(Continued)
-87-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
Note 4 - Pension Plans - City of Paducah:
Single Employer Defined Benefit Funds - Police and Firefighters' Pension Fund (PFPF) and
Appointive Employees' Pension Fund (AEPF)
At June 30, 2022, the City reported deferred outflows of resources and deferred inflows of resources
related to the PFPF and AEPF pension plans from the following sources:
Amounts reported as deferred outflows of resources and deferred inflows related to pensions will be
recognized in pension expense as follows:
Fiscal Year Ending June 30
PFPF AEPF
2023 $ 7,500 $ -
2024 32,558 -
2025 21,507 -
2026 187,319 -
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
Valuation date
Actuarial cost method
Amortization method
Remaining amortization period
Asset valuation method
PFPF AEPF
7/1/22 7/1/22
Entry age normal Aggregate (1)
Level dollar closed Level dollar closed
12 Years
Fair value
10 Years
Fair value
(Continued)
-88-
PFPF AEPF
Deferred Deferred Deferred Deferred
Outflows of Inflows of Outflows of Inflows of
Resources Resources Resources Resources
Difference between expected and
actual experience
-
Changes in assumptions
- - -
Net difference between projected
and actual earnings on pension
plan investments
248.884 - - -
Total
$ 248,884
Amounts reported as deferred outflows of resources and deferred inflows related to pensions will be
recognized in pension expense as follows:
Fiscal Year Ending June 30
PFPF AEPF
2023 $ 7,500 $ -
2024 32,558 -
2025 21,507 -
2026 187,319 -
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
Valuation date
Actuarial cost method
Amortization method
Remaining amortization period
Asset valuation method
PFPF AEPF
7/1/22 7/1/22
Entry age normal Aggregate (1)
Level dollar closed Level dollar closed
12 Years
Fair value
10 Years
Fair value
(Continued)
-88-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
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 assumptions:
Investment rate of return
Projected salary increases
Inflation rates adjustments
6.50%(3) 6.00%
(2) (2)
(2) (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) 6.50% Effective July 1, 2020
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, 2022 PFPF plan year, the assumed rate of
return was 6.50%. For the AEPF July 1, 2022 plan year, 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, 2022 was as follows:
PFPF 6.50%
AEPF 6.00%
-89-
(Continued)
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
Note 4 - Pension Plans - City of Paducah:
Single Employer Defined Benefit Funds - Police and Firefighters' Pension Fund (PFPF) and
Appointive Employees' Pension Fund (AEPF)
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 I% point higher than the current rate:
1% Current 1%
Decrease Rate Increase
PFPF Net Pension Liability $ 3,343,625 $ 2,889,127 $ 2,487,470
AEPF Net Pension Liabilitv
Financial Reports
The Police and Firefighters' Pension Fund (PFPF) and Appointive Employees' Pension Fund (AEPF) plans
do not issue stand-alone financial reports. The Plans financial statements are as follows:
COMBINING STATEMENT OF FIDUCIARY NET POSITION
PENSION TRUST FUNDS
JUNE 30, 2022
(Continued)
-90-
PFPF AEPF
Total
Assets
Cash and cash equivalents
$ 735 $ -
$ 735
Receivables:
Interest
2,561 -
2,561
Other
- -
-
Investments at fair value
Money market accounts
12,835 -
12,835
Common stock
1,542,602 -
1,542,602
Mutual funds
2.350.007 -
2.350.007
Total assets
3.908.740 -
3.908.740
Liabilities
Vouchers and accounts payable
14 -
14
Net Position
Held in trust for pension benefits
S 3.908.726 S -
3.908.726
(Continued)
-90-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
Note 4 - Pension Plans - City of Paducah:
Single Employer Defined Benefit Funds - Police and Firefighters' Pension Fund (PFPF) and
Appointive Employees' Pension Fund (AEPF)
COMBINING STATEMENT OF CHANGES IN NET POSITION
PENSION TRUST FUNDS
JUNE 30, 2022
Additions:
Contributions
Employer
Plan members
Total contributions
Investments earnings:
Net change in fair value of investments
Interest and dividends
Net investment earnings
Total additions
Deductions:
Benefits
Administrative expenses
Total deductions
Change in net position
Net position - beginning
Net position - ending
PFPF AEPF Total
$ 310,000 $ 3,912 $ 313,912
1b,Wau►uV,0aA Iwa:A W4
(678,848) - (678,848)
69,207 - 69,207
(609,641) - (609,641)
(299,641) 3,912 (295,729)
934,025
44.556
978,581
(1,278,222)
5,186,948
3.908.726
3,025
887
3,912
937,050
45.443
982,493
(1,278,222)
5,186,948
3.908.726
Summary of Pension Expense:
As of June 30, 2022, the City's pension expense associated with the three pension plans are summarized
as follows:
Governmental
Business -Type
Activities
Activities
Total
CERS— Non -hazardous
$ 1,960,764
$ 259,199
$ 2,219,963
CERS — Hazardous
4,679,443
-
4,679,443
PFPF
125,351
125,351
AEPF
(38,653)
(38,653)
Total
S 6.726905
$ 259,199&-6_9_81104
(Continued)
-91-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
Note 5 — Other Postemnloyment Benefits (OPEB):
CERS Medical Insurance Plan
Plan description the City contributes to the Kentucky Retirement Systems Insurance fund (Insurance
Fund), a cost-sharing multiple -employer defined benefit post -employment health care plan administered
by the Kentucky Retirement Systems (KRS). The Insurance Fund was established to provide hospital and
medical insurance for members for receiving benefits from the Kentucky Employees Retirement Systems
(KERS), the County Employees Retirement System (CERS), and the State Police Retirement System
(SPRS). The City participates in the County Employees Retirement System (CERS). CERS non -hazardous
and hazardous employee plans are administered separately.
Benefits provided the Insurance Fund pays a prescribed contribution for whole or partial payments of
required premiums to purchase hospital and medical insurance, based on years of service, for retirees and
certain eligible beneficiaries. The authority to establish and amend benefit provisions rests with the
Kentucky General Assembly. KRS issues a publicly available financial report that can obtained at
www.k. r�ky_ og_v.
OPEB Liabilities, OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of
Resources Related to OPEBs
Contributions per Kentucky Revised Statues 78.545 (33), contribution requirements are established and
may be amended by the KRS Board. The City was required to contribute at actuarially determined rates of
5.78% of non -hazardous covered payroll and 10.47% of hazardous covered payroll for the fiscal years
ended June 30, 2022.
At June 30, 2022, the City reported a liability for its proportionate share of the net OPEB liability for the
CERS Insurance Trust. The collective net OPEB liability was measured as of June 30, 2021, and the total
OPEB liability used to calculate the collective net OPEB liability was based on a projection of the City's
long-term share of contributions to the OPEB plan relative to the projected contributions of all
participating employers, actuarially determined. At June 30, 2021, the City's non -hazardous proportion
was 0.324971 percent and hazardous proportion was 1.627488 percent.
The amount recognized by the City as its proportionate share of the OPEB liability that was associated
with the District was as follows:
City's non -hazardous proportionate share of the CERS
medical insurance liability $ 6,221,408
City's hazardous proportionate share of the CERS 13,159,206
medical insurance liability
Total CERS medical insurance liability associated with the City S 19.380.614
(Continued)
-92-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
Note 5 — Other Postemplovment Benefits (OPEB):
For the year ended June 30, 2022, the City recognized an OPEB expense of $3,225,271 ($1,011,259 non-
hazardous and $2,214,012 hazardous, respectively). At June 30, 2022, the City reported deferred outflows
of resources and deferred inflows of resources related to OPEBs from the following sources:
Difference between expected and
actual experience
Changes in assumptions
Net difference between projected and
actual earnings on pension plan
investments
Changes in proportion and differences
between City contributions and
proportionate share of contributions
City contributions subsequent to the
measurement date
Total
Non -hazardous
Hazardous
Deferred
Deferred
Deferred
Deferred
Outflows of
Inflows of
Outflows of
Inflows of
Resources
Resources
Resources
Resources
$ 978,318
$ 1,857,505
$ 411,204
$ 1,415,716
1,649,413
5,785
3,300,029
4,917
973,253
2,476,861
128,177 89.944 577,153 195.688
2,755,908 2,926,487 4,288,386 4,093,182
709,998 - 1,165.932 -
$ 3.465,906 $ 2,926,487 $ 5,454,318 $ 4,093,182
The City reported $1,875,930, including implicit subsidies of $298,425, as deferred outflows of resources
related to OPEB resulting from City non -hazardous and hazardous contributions subsequent to the
measurement date that will be recognized as a reduction of the net OPEB liability in the year ended June
30, 2022. Other amounts reported as deferred outflows of resources and deferred inflows related to
pensions will be recognized in OPEB expense as follows:
Fiscal Year Ending June 30
Non -
(Continued)
-93-
Hazardous
Hazardous
2023
$ 155,676
$ (263,792)
2024
7,812
118,297
2025
6,256
120,042
2026
(340,323)
(161,339)
2027
-
381,996
(Continued)
-93-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
Note 5 — Other Postemplovment Benefits (OPEB):
Actuarial assumptions — The total OPEB liability in the June 30, 2021 actuarial valuation was determined
using the following actuarial assumptions, applied to all periods included in the measurement:
Investment rate of return
6.25%
Projected salary increases
3.30% - 19.05%, varies by service
Inflation rate
2.30%
Real Wage Growth
2.00%
Healthcare cost trend rates
5.70%
Under 65
6.25% at January 1, 2021 decreasing to an ultimate rate of
6.35%
4.05% over a period of 11 years
Ages 65 and Older
5.50% at January 1, 2021 decreasing to an ultimate rate of
Specialty Credit/High Yield
4.05% over a period of 14 years
Municipal Bond Index Rate
1.92%
Discount Rate
5.20% and 5.05% for non -hazardous and hazardous
Mortality rates used for active members is PUB -2010 General (non -hazardous) and Public Safety
(hazardous) Mortality Tables projected with ultimate rates from the MP -2014 mortality scale using a base
year of 2010. For healthy retired members and beneficiaries, System -specific mortality table based on
mortality experience from 2013-2018 projected with the ultimate rates from MP -2014 mortality
improvement scale using a base year of 2019. The PUB -2010 Disabled Mortality Table projected with a
4 -year set -forward for both males and females with ultimate rates from the MP -2014 mortality scale using
a base year of 2010 is used for the period after disability retirement.
The long-term expected rate of return on OPEB plan investments was determined using a log -normal
distribution analysis in which best -estimate ranges of expected future real rates of return (expected returns,
net of OPEB plan investment expense and inflation) are developed for each major asset class. These
ranges are combined to produce the long-term expected rate of return by weighting the expected future
real rates of return by the target asset allocation percentage and by adding expected inflation.
The target allocation and best estimates of arithmetic real rates of return for each major asset class, as
provided by TRS's investment consultant, are summarized in the following table:
(Continued)
-94-
Target
Long -Term Expected
Asset Class
Allocation
Real Rate of Return
US Equity
21.75%
5.70%
Non -US Equity
21.75%
6.35%
Private Equity
10.00%
9.70%
Specialty Credit/High Yield
15.00%
2.80%
Core Bonds
10.00%
0.00%
Real Estate
10.00%
5.00%
Opportunistic
0.00%
0.00%
Real Return
10.00%
4.55%
Cash
1.50%
(0.60)%
Total
100.000%
(Continued)
-94-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
Note 5 — Other Postemplovment Benefits (OPEB):
Discount rate - The discount rate used to measure the total OPEB liability was 5.20% for non -hazardous
and 5.05% for hazardous. The projection of cash flows used to determine the discount rate assumed that
plan member contributions will be made at the current contribution rates and the employer contributions
will be made at statutorily required rates. Based on those assumptions, the OPEB plan's 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 OPEB plan investments was applied to all
periods of projected benefit payments to determine the total OPEB liability.
The following table presents the City's proportionate share of the collective net OPEB liability of the
System, calculated using the discount rate of 5.20% for non -hazardous and 5.05% for hazardous, as well
as what the City's proportionate share of the collective net OPEB liability would be if it were calculated
using a discount rate that is 1 -percentage -point lower (4.20% for non -hazardous and 4.05% for hazardous)
or 1 -percentage -point higher (6.20% for non -hazardous and 6.05% for hazardous) than the current rate:
Current
1% Discount 1%
Decrease Rate Increase
CERS
Non -hazardous' proportionate share of
net OPEB liability $ 8,541,945 $ 6,221,408 $ 4,317,021
Hazardous' proportionate share of
net pension liability $19,078,352 $13,159,206 $ 8,403,515
Sensitivity of the City's proportionate share of the collective net OPEB liability to changes in the
healthcare cost trend rates The following presents the City's proportionate share of the collective net
OPEB liability, as well as what the City's proportionate share of the collective net OPEB liability would
be if it were calculated using healthcare cost trend rates that were 1 -percentage -point lower or 1 -
percentage -point higher than the current healthcare cost trend rates:
Current
1% Discount 1%
Decrease Rate Increase
Non -hazardous' proportionate share of
net OPEB liability $ 4,478,674 $ 6,221,408 $ 8,324,914
Hazardous' proportionate share of
net pension liability $ 8,622,629 $13,159,206 $18,715,432
Note 6 - Appropriations Deficit:
No departments that adopted budgets annually had excess expenditures over appropriations for the fiscal
year ended June 30, 2022.
(Continued)
-95-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
Note 7 - Component Unit Long -Term Liabilities:
Long-term liabilities of the discretely presented component units consist of the following at June 30, 2022:
Bond Payable, Kentucky Rural Water Finance Corp - Paducah Water Works
In connection with a merger with West McCracken Water District, Paducah Water Works assumed a bond
with interest rates ranging from 2.3% to 4.8% with annual principal and semi-annual interest payments.
Note Payable, Kentucky Infrastructure Authority (KIA) - Paducah Water Works
In connection with a merger with Reidland Water District, Paducah Water Works (PWM assumed a loan
from the KIA with interest rate of 1.00%, with a .25% annual service fee. In addition,
PWW has a note
with KIA for a 24" Water Main with interest rate of 1.75% and a .25% annual service
fee. The annual
requirements to amortize the outstanding notes as of June 30, 2022, are as follows:
4,911,017
.25%
509,946
Year Ending Service R & M
7.419.282
June 30 Principal Interest Fee Reserve
Total
2023 $ 532,236 $ 70,786 $ 13,384 $ 11,200
$ 627,606
2024 542,835 62,548 12,187 11,200
628,770
2025 488,503 53,998 10,526 11,200
564,227
2026 494,242 48,260 9,302 11,200
563,004
2027 500,054 42,448 8,062 11,200
561,764
2028-2032 2,185,817 123,468 21,464 -
2,330,749
2033-2037 664.026 32.374 4,626 -
701.026
TOTALS5 407 713 433 882 79 551 56 000 5 977 146
Note 8 - 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, 2022, the most significant construction commitments were as follows:
Cumulative Estimated
Costs Incurred Total Costs
Comprehensive Stormwater Master Plan Study
Buckner Lane Bridge
24'/25' Street Improvement
Floodwall Rehab
Riverfront Development
-96-
$ 975,891
$ 1,047,040
619,502
2,213,895
402,926
2,193,308
4,911,017
6,231,764
509,946
2,566,665
7.419.282
14252.672
(Continued)
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
Note 9 - 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:
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, 2022, that amount
was $2,241,669. 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 $219,192 as of June 30, 2022.
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
2019-2020 $ -
$ 108,994
$ 108,994
$
2020-2021 -
140,231
140,231
230,715
2021-2022 -
35,296
35,296
-
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, 2022, that amount
was $2,241,669. 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 $219,192 as of June 30, 2022.
The analysis of claims activity is presented below:
Several lawsuits are pending involving citizens' complaints and the City of Paducah. Various allegations
have been made seeking damages which the legal counsel of the City, along with its management, has
determined to be immaterial to the City's financial position.
Note 10 - 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 collected from this lease. The rental for the
primary term of the lease is for the construction and use 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.
(Continued)
-97-
Current Year
Beginning of
Claims and
Actual
Balance at
Fiscal Year
Changes in
Claim
Fiscal
Liability
Estimates
Payments
Year End
2019-2020 $ 93,297
$ 1,639,610
$1,624,455
$ 108,452
2020-2021 108,452
2,131,217
2,008,954
230,715
2021-2022 230,715
2,494,591
2,506,114
219,192
Several lawsuits are pending involving citizens' complaints and the City of Paducah. Various allegations
have been made seeking damages which the legal counsel of the City, along with its management, has
determined to be immaterial to the City's financial position.
Note 10 - 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 collected from this lease. The rental for the
primary term of the lease is for the construction and use 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.
(Continued)
-97-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
Note 10 - Lease Agreements:
Operating Leases
The City also leases certain other property to various lessees under non -cancelable agreements that have 3
— 10 year terms with expiration dates through December 31, 2031. Each of the agreements provides an
option for renewal for an additional 3 — 10 year term. During the year ended June 30, 2022, the City
recognized lease income of $594,943 and interest income of $129,235.
The following is an analysis of property leased under these leases at June 30, 2022:
Land $ 270,000
Buildings 2,546,487
Equipment 110,126
Total 2,926,613
Less: accumulated depreciation (1.383.093)
NET BOOK VALUE SL543 519
Depreciation expense for the year ended June 30, 2022, on leased property was $55,775.
The following is a schedule of future lease receivable principal and interest payments from operating
leases as of June 30, 2022:
Year Ending
June 30
Principal
Interest
2023
$ 556,846
$ 110,921
2024
502,779
92,895
2025
427,462
76,754
2026
395,076
63,375
2027
362,917
50,442
2028-2032
1,313,791
80,357
Total
3 558 871
$474,744
Note 11— Tax Abatements:
Developer Residential Property Tax Abatements —
Total
$ 667,767
595,674
504,216
458,451
413,359
1,394,148
4.033.615
The City of Paducah is authorized by Kentucky Revised Statues Chapter 81A and City Ordinance 2002-
10-6989 to enter into property tax abatement agreements for the purpose of subsidizing developers for
their cost of infrastructure improvements associated with residential infill and annexation development.
Tax reimbursements cannot exceed the cost of City -approved infrastructure associated with the
development over the life of the agreement. The abatement is limited to the actual City of Paducah real
estate property taxes collected in any given year attributed to a specific development area as outlined in the
individual agreement with the City.
(Continued)
-98-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
Note 11— Tax Abatements:
For the year ended June 30, 2022, the City abated property taxes totaling $47,126 under this program,
including the following tax abatement agreements:
Kentucky Business Investment (KBI) Program, KRS 154.32 —
The KBI Program provides income tax credits and wage assessments to new and existing manufacturing
companies, and non -retail service companies that locate or expand operations in Kentucky. The Program
can be set to last up to 10 years.
For the year ended June 30, 2022, the City rebated employee local payroll taxes totaling $14,687 under
this program, including the following resolutions:
Agreement
Abatement Amount
Current
Inception to
Recipient
Development
Ordinance
Rebate Amount
Year
Date
Signature Homes of
Westwood Subdivision
2010-12-7768
$-0-
$148,469
Paducah, LLC
In -fill
Year
Date
Higdon
Ridgewood In -fill,
2019-4-8573
$2,311
$2,311
Development
phase 2
Greenway Village,
Greenway Village In-
2011-2-7789
$16,168
$115,700
LLC
fill, phase 1
Higdon
Ridgewood In -fill,
2019-4-8573
$17,523
$47,390
Development
phase 1
Greenway Village,
Greenway Village In-
2019-4-8572
$11,124
$31,216
LLC
fill, phase 2
Kentucky Business Investment (KBI) Program, KRS 154.32 —
The KBI Program provides income tax credits and wage assessments to new and existing manufacturing
companies, and non -retail service companies that locate or expand operations in Kentucky. The Program
can be set to last up to 10 years.
For the year ended June 30, 2022, the City rebated employee local payroll taxes totaling $14,687 under
this program, including the following resolutions:
Industrial Park West (IPW) — Ordinance 1997-2-5642 authorized the joint development of the IPW, for
economic development purposes, as well as an inter -local agreement authorizing the city to share 50% of
payroll tax revenue generated in the Park. This agreement is good for 10 years after 97% of the park
property is developed or 25 years (March 6, 2022), whichever is first.
(Continued)
-99-
Payroll Tax
Recipient
Start Date
Term
Authority
Rebate Amount
Current
Inception to
Year
Date
Dippin' Dots, LLC
12-11-2016
10 yrs.
Resolution - 2014
$14,687
$63,102
Industrial Park West (IPW) — Ordinance 1997-2-5642 authorized the joint development of the IPW, for
economic development purposes, as well as an inter -local agreement authorizing the city to share 50% of
payroll tax revenue generated in the Park. This agreement is good for 10 years after 97% of the park
property is developed or 25 years (March 6, 2022), whichever is first.
(Continued)
-99-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
Note 11— Tax Abatements:
For the year ended June 30, 2022, the City shared payroll tax revenue totaling $141,391 under this
agreement with McCracken County ("County"), as follows:
Payroll Tax Remitter
Start Date
Payroll Tax Revenue Shared
Inception to
Current Year
Date
Coca Cola
September 2005
$14,877 $349,428
Plastic Services Products
October 2020
$ 11,455 $19,808
H.T. Hackney
March 2012
$37,445 $268,422
Whitehall
December 2014
$77,614 $443,046
Information Age Park (IAP) — Ordinance 2005-11-7046 authorized an inter -local agreement between the
City and County relating to payroll tax revenue generated in the Park. If the City invites the County to
participate in the cost of an economic development project, the City will share 50% of payroll tax revenue
generated through the term of the agreement which expired February 13, 2022.
For the year ended June 30, 2022, the City shared payroll tax revenue totaling $0 under this agreement with
the County, as follows:
Payroll Tax Remitter
Start Date
Payroll Tax Revenue Shared
Inception to
Current Year
Date
Lynx
March 2006
$-0- $831,088
Ulrich
March 2006
$-0- $207,506
Pepsi
December 2007
$ -0- $85,949
Marquette
March 2008
$-0- $1,105,459
Teletech
December 2014
$-0- $283,852
AAA (Pebco) — Ordinance 2004-6-6824 authorized an inter -local agreement between the City and County
relating to payroll tax revenue generated by the AAA Company on Coleman Road. The City and County
partnered on an economic development project which calls for the City to share 50% of payroll tax revenue
generated at the AAA facility on Coleman Road for 25 years, through 2029.
For the year ended June 30, 2022, the City shared payroll tax revenue totaling $14,752 under this agreement
with the County, as follows:
Payroll Tax Remitter
Start Date
Payroll Tax Revenue Shared
Current Year
Inception to
Date
AAA (Pebco)
July 2005
$14,752
$198,810
Remote Worker Incentive Program — Ordinance 2021-08-8700 authorized this program, with a goal of
attracting full-time remote workers 100 miles or more outside Paducah, by offering to those that qualify
relocation expense, internet access, community connections with memberships and local payroll tax waiver
for a 12 -month period.
(Continued)
_100-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
Note 11— Tax Abatements:
For the year ended June 30, 2022, the City provided funding totaling $23,159 under this program, as
follows:
Various Recipients
Start Date
Program Expenditures
Current Year
Inception to
Recipient
Location
Date
Remote Workers
July 2021
$23,159
$23,159
Other Local Economic Development Programs —
In order to attract certain companies to the Paducah area, the City and County partnered together to
construct facilities to house corporate operations in the Information Age Park (IAP) and the Industrial Park
West (IPW).
For the year ended June 30, 2022, the City and County provided reduced rent for the following corporate
recipient, totaling $110,556:
Note 12 — Component Unit Merger and Restatement
Paducah Water Works (PWW) assumed control of all West McCracken Water District's assets, deferred
outflows and inflows of resources, and liabilities through a merger on February 4, 2022. The results of the
merger increased PWW's assets $4,280,472, deferred outflow of resources $70,525, liabilities $468,993,
deferred inflow of resources $70,292, and net position $3,811,712 for the year ended June 30, 2022.
Note 13 — Implementation of GASB Pronouncements
Accounting Pronouncements Adopted during the Fiscal Year ended June 30, 2022
The financial statements of the City are prepared in conformity with GAAP as applied to government units.
GASB is the accepted standard-setting body for establishing governmental accounting and financial
reporting principles. During the current year, the City adopted the following GASB pronouncements:
Statement No. 87 — Leases (FY2022)
The implementation of GASB Statement No. 87 required the City the recognition of certain lease assets and
liabilities for leases that previously were classified as operating leases and recognized as inflows of
resources or outflows of resources based on the payment provisions of the lease agreement. It establishes a
single model for lease accounting based on the foundational principle that leases are financings of the right
to use an underlying asset. The impact of the statement increased accounts receivable — leases and deferred
inflows of resources — leases $4,097,403 as of July 1, 2021, respectively, in the government -wide statement
of net position and governmental fund balance sheet. There was no impact on net position or fund balance.
(Continued)
- 101 -
Bldg.
Agreement
FMV
Recipient
Location
Rent Paid
Size
Ordinance
Rent
Teletech
2301 McCracken Blvd.
30,000 sf
2012-11-7986
$330,000
$219,444
Note 12 — Component Unit Merger and Restatement
Paducah Water Works (PWW) assumed control of all West McCracken Water District's assets, deferred
outflows and inflows of resources, and liabilities through a merger on February 4, 2022. The results of the
merger increased PWW's assets $4,280,472, deferred outflow of resources $70,525, liabilities $468,993,
deferred inflow of resources $70,292, and net position $3,811,712 for the year ended June 30, 2022.
Note 13 — Implementation of GASB Pronouncements
Accounting Pronouncements Adopted during the Fiscal Year ended June 30, 2022
The financial statements of the City are prepared in conformity with GAAP as applied to government units.
GASB is the accepted standard-setting body for establishing governmental accounting and financial
reporting principles. During the current year, the City adopted the following GASB pronouncements:
Statement No. 87 — Leases (FY2022)
The implementation of GASB Statement No. 87 required the City the recognition of certain lease assets and
liabilities for leases that previously were classified as operating leases and recognized as inflows of
resources or outflows of resources based on the payment provisions of the lease agreement. It establishes a
single model for lease accounting based on the foundational principle that leases are financings of the right
to use an underlying asset. The impact of the statement increased accounts receivable — leases and deferred
inflows of resources — leases $4,097,403 as of July 1, 2021, respectively, in the government -wide statement
of net position and governmental fund balance sheet. There was no impact on net position or fund balance.
(Continued)
- 101 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
Note 14 — Implementation of GASB Pronouncements
Future Implementation of GASB Pronouncements
In addition to the pronouncements discussed previously, GASB has issued additional guidance for state and
local governments that are not yet effective. The City is currently reviewing the provisions of the following
pronouncements to determine the impact of implementation in future periods.
Statement No. 94 — Public -Private and Public -Public Partnerships and Availability Payment
Arrangements (FY2023)
Statement No 96 — Subscription -Based Information Technology Arrangements (FY2023)
Statement No 99 — Omnibus 2022 (FY2023)
Statement No. 100 — Accounting Changes and Error Corrections an amendment of GASB
Statement No. 62 (FY2024)
Statement No. 101 — Compensated Absences (FY2024)
-102-
CITY OF PADUCAH, KENTUCKY
REQUIRED SUPPLEMENTARY INFORMATION
ANNUAL COMPREHENSIVE FINANCIAL REPORT
YEAR ENDED JUNE 30, 2022
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Exhibit A-5
CITY OF PADUCAH, KENTUCKY
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF CITY'S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY
COUNTY EMPLOYEES' RETIREMENT SYSTEM
LAST NINE FISCAL YEARS*
City's
0.3250%
City's share of the
Plan fiduciary
proportion
City's
net pension
net position as a
of the net
proportionate share
liability (asset) as
percentage of
Year Ended pension
of the net pension
City's covered a percentage of its
the total pension
June 30 liability
liability (asset)
payroll covered payroll
liability
CERS Nonhazardous
2022
0.3250%
$
20,724,296
$
8,315,793
249.2161%
57.3282%
2021
0.3174%
$
24,344,624
$
8,161,809
298.2749%
515.9857%
47.8139%
44.1116%
2020
0.3199%
$
22,498,921
$
8,163,051
275.6190%
482.9333%
50.4470%
46.6327%
2019
0.3150%
$
19,185,252
$
7,880,115
243.4641%
434.1519%
53.5420%
49.2645%
2018
0.3210%
$
18,788,122
$
7,861,744
238.9816%
407.5603%
53.3249%
50.2164%
2017
0.3047%
$
14,999,862
$
7,266,510
206.4246%
330.0579%
55.5028%
53.9483%
2016
0.3150%
$
13,543,354
$
7,349,249
184.2821%
300.1115%
59.9684%
57.5152%
2015
0.3261%
$
10,579,475
$
7,477,608
141.4821%
237.2826%
66.8010%
63.4574%
2014
0.3261%
$
11,970,884
$
7,466,979
160.3176%
273.2831%
61.2209%
65.7178%
CERS Hazardous
2022
1.6275%
$
43,326,429
$
9,731,752
445.2069%
52.2617%
2021
1.5344%
$
46,263,440
$
8,966,031
515.9857%
44.1116%
2020
1.5325%
$
42,330,934
$
8,765,379
482.9333%
46.6327%
2019
1.5888%
$
38,425,266
$
8,850,650
434.1519%
49.2645%
2018
1.6403%
$
36,697,162
$
9,004,106
407.5603%
50.2164%
2017
1.6165%
$
27,738,524
$
8,404,139
330.0579%
53.9483%
2016
1.6428%
$
25,218,200
$
8,402,943
300.1115%
57.5152%
2015
1.6323%
$
19,617,569
$
8,267,598
237.2826%
63.4574%
2014
1.6323%
$
21,907,757
$
8,016,505
273.2831%
65.7178%
* The amounts presented were determined as of the measurement date June 30 of the prior year.
* Schedule is intended to show information for 10 years. Additional years of supplementary information will be provided as
this information becomes available.
-107-
Exhibit A-6
Notes to Required Supplementary Information
For the Year Ended June 30, 2022
Changes of Benefit Terms:
None
Methods and assumptions used in the actuarially determined contributions:
The actuarially determined contribution rates, as a percentage of payroll, used to determine the actuarially determined
contribution amounts in the Schedule of Employer contributions are calculated as of the indicated valuation date. The
following actuarial methods and assumptions (from the indicated actuarial valuations) were used to determine contribution
rates reported in that schedule for the year ending June 30, 2021:
The assumptions were updated as of result of an experience study for the five year period ending June 30, 2018.
The amortization period of the unfunded accrued liability was reset to a closed 30 year period for the year ended June 30,
2019.
The investment rate of return remained unchanged from at 6.25% from the prior measurement date.
The discount rate remained unchanged at 6.25% from the prior measurement date.
The inflation rate remained unchanged at 2.30% from the prior measurment date.
Projected salary increases 3.30% to 10.300% - non -hazardous and 3.55% to 19.05% - hazardous.
-108-
CITY OF PADUCAH, KENTUCKY
REQUIRED
SUPPLEMENTARY INFORMATION
SCHEDULE OF CITY'S CONTRIBUTIONS
COUNTY EMPLOYEES'
RETIREMENT SYSTEM
LAST NINE FISCAL YEARS*
Contributions
relative to
Contributions
Contractually
contractually
Contribution
as a percentage
Year Ended
required penson
required
deficiency
City's covered
of covered
June 30
contribution
contribution
(excess)
payroll
payroll
CERS Nonhazardous
2022
$
1,850,682
$
1,850,682
$ -
$
8,742,004
21.1700%
2021
$
1,604,948
$
1,604,948
$ -
$
8,315,793
19.3000%
2020
$
1,575,229
$
1,575,229
$ -
$
8,161,809
19.3000%
2019
$
1,324,047
$
1,324,047
$ -
$
8,163,051
16.2200%
2018
$
1,141,041
$
1,141,041
$ -
$
7,880,115
14.4800%
2017
$
1,098,317
$
1,098,317
$ -
$
7,861,744
13.9704%
2016
$
902,501
$
902,501
$ -
$
7,266,510
12.4200%
2015
$
937,029
$
937,029
$ -
$
7,349,249
12.7500%
2014
$
1,027,423
$
1,027,423
$ -
$
7,477,608
13.7400%
CERS Hazardous
2022
$
3,467,552
$
3,467,552
$ -
$
10,240,852
33.8600%
2021
$
2,925,365
$
2,925,365
$ -
$
9,731,752
30.0600%
2020
$
2,695,189
$
2,695,189
$ -
$
8,966,031
30.0600%
2019
$
2,179,073
$
2,179,073
$ -
$
8,765,379
24.8600%
2018
$
1,964,844
$
1,964,844
$ -
$
8,850,650
22.2000%
2017
$
1,954,791
$
1,954,791
$ -
$
9,004,106
21.7100%
2016
$
1,702,679
$
1,702,679
$ -
$
8,404,139
20.2600%
2015
$
1,741,930
$
1,741,930
$ -
$
8,402,943
20.7300%
2014
$
1,799,856
$
1,799,856
$ -
$
8,267,598
21.7700%
* Schedule is intended
to show information
for 10 years. Additional years of supplementary
information
will be provided
as this information becomes available.
Notes to Required Supplementary Information
For the Year Ended June 30, 2022
Changes of Benefit Terms:
None
Methods and assumptions used in the actuarially determined contributions:
The actuarially determined contribution rates, as a percentage of payroll, used to determine the actuarially determined
contribution amounts in the Schedule of Employer contributions are calculated as of the indicated valuation date. The
following actuarial methods and assumptions (from the indicated actuarial valuations) were used to determine contribution
rates reported in that schedule for the year ending June 30, 2021:
The assumptions were updated as of result of an experience study for the five year period ending June 30, 2018.
The amortization period of the unfunded accrued liability was reset to a closed 30 year period for the year ended June 30,
2019.
The investment rate of return remained unchanged from at 6.25% from the prior measurement date.
The discount rate remained unchanged at 6.25% from the prior measurement date.
The inflation rate remained unchanged at 2.30% from the prior measurment date.
Projected salary increases 3.30% to 10.300% - non -hazardous and 3.55% to 19.05% - hazardous.
-108-
Exhibit A-7
CITY OF PADUCAH, KENTUCKY
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF CITY'S PROPORTIONATE SHARE OF THE NET MEDICAL INSURANCE LIABILITY
COUNTY EMPLOYEES' RETIREMENT SYSTEM
LAST FIVE FISCAL YEARS*
City's
0.3250%
City's share of the
Plan fiduciary
proportion
City's
net pension
net position as a
of the net
proportionate share
liability (asset) as
percentage of
Year Ended pension
of the net pension
City's covered a percentage of its
the total pension
June 30 liability
liability (asset)
payroll covered payroll
liability
CERS Nonhazardous
2022
0.3250%
$
6,221,407
$
8,315,793
74.8144%
62.9072%
2021
0.3173%
$
7,662,289
$
8,161,809
93.8798%
51.6704%
2020
0.3198%
$
5,379,682
$
8,163,051
65.9028%
60.4382%
2019
0.3150%
$
5,592,780
$
7,880,115
70.9733%
57.6218%
2018
0.3210%
$
6,452,856
$
7,861,744
82.0792%
52.3940%
CERS Hazardous
2022
1.6275%
$
13,159,206
$
9,731,752
135.2193%
66.8131%
2021
1.5341%
$
14,176,195
$
8,966,031
158.1100%
58.8413%
2020
1.5324%
$
11,337,649
$
8,765,379
129.3458%
64.4396%
2019
1.5888%
$
11,328,384
$
8,850,650
127.9949%
64.2437%
2018
1.6403%
$
13,559,555
$
9,004,106
150.5930%
58.9878%
* The amounts presented were determined as of the measurement date June 30 of the prior year.
* Schedule is intended to show information for 10 years. Additional years of supplementary information will be provided as
this information becomes available.
-109-
Notes to Required Supplementary Information
For the Year Ended June 30, 2022
Changes ofBenefit Terms:
None
Changes of assumptions:
The actuarially determined contribution rates, as a percentage of payroll, used to determine the actuarially determined contribution
amounts in the Schedule of Employer Contributions are calculated as the of the indicated valuation date. The following actuarial
methods and assumptions (from the indicated actuarial valuations) were used to determine contribution rates reported in that schedule
for the year ending June 30, 2021:
Valuation date June 30, 2019
Actuarial cost method Entry Age Normal
Amortization method Level Percent of Payroll
Amortization period 30 years, Closed
Asset valuation method 20% of the difference between the fair value of assets and the expected actuarial value
of assets is recognized.
Payroll growth rate 2.00%
Investment Return 6.25%
Inflation 2.30%
Single discount rate 5.20% and 5.05% for non -hazardous and hazardous; decrease from 5.34% and 5.30%.
Mortality System -specific mortality table based on mortality experience from 2013-2018,
projected with the ultimate rates from MP -2014 mortality improvement scale using a
base year of 2019
Healthcare trend rates (Pre -65) Initial trend starting at 6.25% at January 1, 2021, and gradually decreasing to an
ultimate trend rate of 4.05% over a period of 13 years.
Healthcare trend rates (Post -65) Initial trend starting at 5.50% at January 1, 2021, and gradually decreasing to an
ultimate trend rate of 4.05% over a period of 14 years.
-110-
Exhibit A-8
CITY OF PADUCAH, KENTUCKY
REQUIRED
SUPPLEMENTARY INFORMATION
SCHEDULE
OF CITY'S CONTRIBUTIONS - MEDICAL INSURANCE PLAN
COUNTY
EMPLOYEES'
RETIREMENT SYSTEM
LAST SIX FISCAL YEARS*
Contributions
relative to
Contributions
Contractually
contractually
Contribution
as a percentage
Year Ended
required pension
required
deficiency
City's covered
of covered
June 30
contribution
contribution
(excess)
payroll
payroll
CERS Nonhazardous
2022
$ 505,288
$
505,288
$
$
8,742,004
5.7800%
2021
$ 395,832
$
395,832
$
$
8,315,793
4.7600%
2020
$ 388,502
$
388,502
$
$
8,161,809
4.7600%
2019
$ 429,376
$
429,376
$
$
8,163,051
5.2600%
2018
$ 370,365
$
370,365
$
$
7,880,115
4.7000%
2017
$ 371,860
$
371,860
$
$
7,861,744
4.7300%
CERS Hazardous
2022
$ 1,072,217
$
1,072,217
$
$
10,240,852
10.4700%
2021
$ 926,463
$
926,463
$
$
9,731,752
9.5200%
2020
$ 918,612
$
918,612
$
$
8,966,031
10.2455%
2019
$ 918,612
$
918,612
$
$
8,765,379
10.4800%
2018
$ 827,536
$
827,536
$
$
8,850,650
9.3500%
2017
$ 841,884
$
841,884
$
$
9,004,106
9.3500%
* Schedule is intended to show information
for 10 years. Additional
years of supplementary
information will
be provided as this
information becomes available.
Notes to Required Supplementary Information
For the Year Ended June 30, 2022
Changes ofBenefit Terms:
None
Changes of assumptions:
The actuarially determined contribution rates, as a percentage of payroll, used to determine the actuarially determined contribution
amounts in the Schedule of Employer Contributions are calculated as the of the indicated valuation date. The following actuarial
methods and assumptions (from the indicated actuarial valuations) were used to determine contribution rates reported in that schedule
for the year ending June 30, 2021:
Valuation date June 30, 2019
Actuarial cost method Entry Age Normal
Amortization method Level Percent of Payroll
Amortization period 30 years, Closed
Asset valuation method 20% of the difference between the fair value of assets and the expected actuarial value
of assets is recognized.
Payroll growth rate 2.00%
Investment Return 6.25%
Inflation 2.30%
Single discount rate 5.20% and 5.05% for non -hazardous and hazardous; decrease from 5.34% and 5.30%.
Mortality System -specific mortality table based on mortality experience from 2013-2018,
projected with the ultimate rates from MP -2014 mortality improvement scale using a
base year of 2019
Healthcare trend rates (Pre -65) Initial trend starting at 6.25% at January 1, 2021, and gradually decreasing to an
ultimate trend rate of 4.05% over a period of 13 years.
Healthcare trend rates (Post -65) Initial trend starting at 5.50% at January 1, 2021, and gradually decreasing to an
ultimate trend rate of 4.05% over a period of 14 years.
-110-
CITY OF PADUCAH, KENTUCKY
SUPPLEMENTARY INFORMATION
ANNUAL COMPREHENSIVE FINANCIAL REPORT
YEAR ENDED JUNE 30, 2022
CITY OF PADUCAH, KENTUCKY
BOND FUND
DETAIL SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2022
Revenues:
Grants
Interest
Total revenues
Expenditures:
Debt issuance costs
Planning and development
Total expenditures
Excess (deficiency) of revenues over
expenditures
Other Financing Sources (Uses):
Refunding debt issued
Payment to refunded bond escrow agent
Premium on debt issued
Discount on debt issued
Transfers in
Transfers out
Total other financing sources (uses)
Net change in fund balance
Fund balance, beginning
Fund balance - ending
See auditors report on pages 11-13.
Exhibit B-1
-111-
Variance with
Final Budget
Budgeted Amounts
Positive
Original
Final
Actual
(Negative)
120,100
120,100
145,996
25,896
120,100
120,100
145,996
25,896
-
-
17,486
(17,486)
-
100,000
37,153
62,847
-
100,000
54,639
45,361
120,100
20,100
91,357
71,257
-
-
1,330,614
1,330,614
-
-
(1,507,646)
(1,507,646)
-
-
204,531
204,531
-
-
(10,013)
(10,013)
-
-
17,486
17,486
$ 120,100
$ 20,100
108,843
$ 88,743
19,779,154
$ 19,887,997
-111-
CITY OF PADUCAH, KENTUCKY
GENERAL CAPITAL IMPROVEMENTS FUND
DETAIL SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2022
Revenues:
Intergovernmental and grants
Intergovernmental
Grants
Interest
Property upkeep, rentals, sales and other
Total revenues
Expenditures:
Capital outlay
Excess (deficiency) of revenues over
expenditures
Other Financing Sources (Uses):
Long-term debt issued
Transfers in
Transfers out
Total other financing sources
Net change in fund balance
Fund balance, July 1, 2021
FUND BALANCE, JUNE 30, 2022
See auditors report on pages 11-13.
-112-
Exhibit B-2
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
$ 33,895 $ - $ (33,895)
9,481,253 1,886,547 (7,594,706)
(1,430) - 1,430
1,475,939 275,950 (1,199,989)
10,989,657 2,162,497 (8,827,160)
30,154,579 7,639,458 22,515,121
(19,164,922) (5,476,961)
13,687,961
4,704,753 3,460,662 (1,244,091)
8,814,541 3,152,342 (5,662,199)
(3,141) (3,138) 3
13,516,153 6,609,866 (6,906,287)
$ (5,648,769) 1,132,905 $ 6,781,674
6,747,189
$ 7,880,094
CITY OF PADUCAH, KENTUCKY
DEBT SERVICE FUND
DETAIL SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2022
Revenues:
Intergovernmental
Grants
Interest
Property upkeep, rentals, sales and other
Total revenues
Expenditures:
Debt service:
Principal requirement
Interest and fiscal requirement
Total expenditures
Excess (deficiency) of revenues over
expenditures
Other Financing Sources (Uses):
Transfers in
Transfers out
Total other financing sources
Net change in fund balance
Fund balance, July 1, 2021
FUND BALANCE, JUNE 30, 2022
See auditors report on pages 11-13.
Final
Budget Actual
$ 654,560 $ 654,429
- 758,679
4,500 20,467
- 322,519
659,060 1,756,094
2,497,205
1,143,435
3,309,044
1,134,620
3,640,640
4,443,664
(2,981,580) (2,687,570)
2,985,950
2,985,950
$ 4,370
-113-
2,805,728
2,805,728
118,158
1,508,607
$ 1,626,765
Exhibit B-3
Variance with
Final Budget
Positive
(Negative)
$ (131)
758,679
15,967
322,519
1,097,034
(811,839)
8,815
(803,024)
294,010
(180,222)
(180,222)
$ 113,788
Exhibit B-4
CITY OF PADUCAH, KENTUCKY
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2022
ASSETS
Cash and cash equivalents
Investments
Receivables, net:
Accounts
TOTAL ASSETS
LIABILITIES
AND
FUND BALANCES
Liabilities:
Voucher and accounts payable
Accrued payroll and payroll taxes
Total liabilities
Fund Balances:
Restricted for:
Highway and streets
Public safety
Capital Improvements
Assigned for:
Public safety
Total fund balances
TOTAL LIABILITIES AND
FUND BALANCES
See auditors report on pages 11-13.
Special Revenue Funds
Emergency Court
Municipal Communication Awards
Aid Program Service Fund Fund
$ 827,444 $ 145,170 $394,966
$ 873,352 $ 409,619 $394,966
$ 80,261 $ 26,419 $191,915
- 56,084 -
80,261 82,503 191,915
793,091 - -
- - 203,051
- 327,116 -
793,091 327,116 203,051
$ 873,352
-114-
$ 409,619 $394,966
Special Revenue Funds
CDBG Bed
Grant Tax
Fund Fund
-115-
Total Nonmajor
Governmental
Funds
$ 1,367,580
310,357
1,677,937
$ 298,595
56,084
354,679
793,091
203,051
327,116
1,323,258
$ 1,677,937
Exhibit B-5
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
Expenditures:
Current operations:
Public safety - 1,980,739 34,179
Public service 1,204,096 - -
Planning and development - - -
Capital Outlay - - -
Debt Service:
Principal requirement - - -
Interest and fiscal requirement - - -
Total expenditures
Special Revenue Funds
1,980,739
34,179
Excess (deficiency) of revenues
Emergency
Court
Municipal
Communication
Awards
Revenues:
Aid Program
Service Fund
Fund
Taxes
$ -
$ 320,704
$ -
Charges for services
-
366,679
-
Intergovernmental
510,824
-
-
Grants
-
-
37,853
Interest
5,361
490
2,420
Miscellaneous
-
578,109
-
Total revenues
516,185
1,265,982
40,273
Expenditures:
Current operations:
Public safety - 1,980,739 34,179
Public service 1,204,096 - -
Planning and development - - -
Capital Outlay - - -
Debt Service:
Principal requirement - - -
Interest and fiscal requirement - - -
Total expenditures
1,204,096
1,980,739
34,179
Excess (deficiency) of revenues
over expenditures
(687,911)
(714,757)
6,094
Other Financing Sources (Uses):
Transfers in
918,000
861,175
-
Transfers out
-
(146,418)
-
Total other financing sources (uses)
918,000
714,757
-
Net change in fund balances
230,089
-
6,094
Fund balances, July 1, 2021
563,002
327,116
196,957
FUND BALANCES, JUNE 30, 2022
$ 793,091
$ 327,116
$ 203,051
See auditors report on pages 11-13.
-116-
Special Revenue Funds
CDBG
Bed
Total Nonmajor
Grant
Tax
Governmental
Fund
Fund
Funds
$ -
$1,788,776
$ 2,109,480
-
-
366,679
-
-
510,824
395,000
-
432,853
-
-
8,271
-
-
578,109
395,000
1,788,776
4,006,216
2,014,918
- - 1,204,096
395,000 1,788,776 2,183,776
395,000 1,788,776 5,402,790
- (1,396,574)
- - 1,779,175
- (146,418)
- - 1,632,757
- - 236,183
- - 1,087,075
$ 1,323,258
-117-
CITY OF PADUCAH, KENTUCKY
MUNICIPAL AID PROGRAM FUND
DETAIL SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2022
Revenues:
hitergovernmental
Interest
Total revenues
Expenditures:
Public service
Excess (deficiency) of revenues over
expenditures
Other Financing Sources (Uses):
Transfers in
Transfers out
Total other financing sources (uses)
Net change in fund balance
Fund balance, July 1, 2021
FUND BALANCE, JUNE 30, 2022
See auditors report on pages 11-13.
-118-
Exhibit B-6
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
$ 481,000 $ 510,824 $ 29,824
3,000 5,361 2,361
484,000 516,185 32,185
1,402,000 1,204, 096 197,904
(918,000) (687,911) 230,089
918,000 918,000
918,000 918,000
$ - 230,089
563,002
$ 793,091
$ 230,089
CITY OF PADUCAH, KENTUCKY
EMERGENCY COMMUNICATION SERVICE FUND
DETAIL SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2022
Revenues:
Local contributions
Telephone surcharges
Interest
Miscellaneous
Total revenues
Expenditures:
Public safety
Excess (deficiency) of revenues over
expenditures
Other Financing Sources (Uses):
Transfers in
Transfers out
Total other financing sources (uses)
Net change in fund balance
Fund balance, July 1, 2021
FUND BALANCE, JUNE 30, 2022
See auditors report on pages 11-13.
-119-
Final
Budget
$ 345,000
325,000
500
674,315
1,344,815
Actual
$ 320,704
366,679
490
578,109
1,265,982
Exhibit B-7
Variance with
Final Budget
Positive
(Negative)
$ (24,296)
41,679
(10)
(96,206)
(78,833)
2,313,380 1,980,739 332,641
(968,565) (714,757) 253,808
1,114,985
(146,420)
968,565
861,175
(146,418)
714,757
327,116
$ 327,116
(253,810)
2
(253,808)
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, 2022
Revenues:
Grants
Interest
Total revenues
Expenditures:
Public safety
Excess (deficiency) of revenues over
expenditures
Net change in fund balance
Fund balance, July 1, 2021
FUND BALANCE, JUNE 30, 2022
See auditors report on pages 11-13.
-120-
Final
Budget Actual
$ 30,000 $ 37,853
2,000 2,420
32,000 40,273
Exhibit B-8
Variance with
Final Budget
Positive
(Negative)
$ 7,853
420
8,273
90,800 34,179 56,621
(58,800)
$ (58,800)
6,094 64,894
6,094 $ 64,894
196,957
$ 203,051
CITY OF PADUCAH, KENTUCKY
CDBG FUND
DETAIL SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2022
Revenues:
Grants
Total revenues
Expenditures:
Planning and development
Excess (deficiency) of revenues over
expenditures
Other Financing Sources (Uses):
Transfers in
Transfers out
Total other financing sources (uses)
Net change in fund balance
Fund balance, July 1, 2021
FUND BALANCE, JUNE 30, 2022
See auditors report on pages 11-13.
Final
Budget Actual
$ 400,000 $ 395,000
400,000 395,000
395,000 395,000
Exhibit B-9
Variance with
Final Budget
Positive
(Negative)
$ (5,000)
(5,000)
5,000 - (5,000)
$ 5,000 - $ (5,000)
-121-
CITY OF PADUCAH, KENTUCKY
BED TAX FUND
DETAIL SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2022
Revenues:
Taxes
Grants
Other
Total revenues
Expenditures:
Planning and development
Excess (deficiency) of revenues over
expenditures
Other Financing Sources (Uses):
Operating transfers in
Operating transfers out
Net change in fund balance
Fund balance, July 1, 2021
FUND BALANCE, JUNE 30, 2022
See auditors report on pages 11-13.
Exhibit B-10
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
$1,000,000 $1,788,776 $ 788,776
1,000,000 1,788,776 788,776
1,000,000 1,788,776 (788,776)
-122-
CITY OF PADUCAH, KENTUCKY
SUPPLEMENTARY INFORMATION
NONMAJOR PROPRIETARY FUNDS
ANNUAL COMPREHENSIVE FINANCIAL REPORT
YEAR ENDED JUNE 30, 2022
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.
Transient Dock Fund — to account for the operation of the Transient Dock.
Exhibit C-1
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF NET POSITION
NONMAJOR PROPRIETARY FUNDS
JUNE 30, 2022
ASSETS
Section
Civic Transient
Total Nonmajor
Total assets
Eight
Center Dock
Enterprise
Current Assets:
Housing
Fund Fund
Funds
Cash and cash equivalents
$ 361,884
$ - $ 34,055
$ 395,939
Inventory
-
- 13,211
13,211
Total current assets
361,884
- 47,266
409,150
Noncurrent Assets:
Net depreciable capital assets
2,783
69,406 -
72,189
Total assets
364,667
69,406 47,266
481,339
Deferred Outflows of Resources:
Deferred pension related outflows
2,862
- -
2,862
Deferred OPEB related outflows
8,837
- -
8,837
Total deferred outflows of resources
11,699
- -
11,699
LIABILITIES
Current Liabilities:
Voucher and accounts payable
60,315
367 57
60,739
Accrued payroll
-
- 716
716
Accrued compensated absences
3,400
- -
3,400
Unearned revenues
186
- -
186
Due to other funds
-
- -
-
Total current liabilities
63,901
367 773
65,041
Noncurrent Liabilities:
Net pension liability
61,862
- -
61,862
Net other post employment benefits liability
18,571
- -
18,571
Accrued compensated absences
7,869
- -
7,869
Total noncurrent liabilities
88,302
- -
88,302
Total liabilities
152,203
367 773
153,343
Deferred Inflows of Resources
Deferred pension related inflows
8,950
- -
8,950
Deferred OPEB related inflows
12,636
- -
12,636
Total deferred inflows of resources
21,586
- -
21,586
NET POSITION
Net invested in capital assets
2,783
69,406 -
72,189
Restricted - Housing
199,794
- -
199,794
Unrestricted
-
(367) 46,493
46,126
TOTAL NET POSITION $
202,577
$ 69,039 $ 46,493
$ 318,109
See auditors report on pages 11-13.
-123-
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN NET POSITION
NONMAJOR PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
Operating Revenues:
Charges for services
Miscellaneous
Total operating income
Operating Expenses:
Cost of sales and service
Depreciation and amortization
Total operating expenses
Operating income (loss)
Non -Operating Revenues (Expenses):
Grants - program purpose
Interest and investment income
Total nonoperating revenues
(expenses)
Income (loss) before contributions and
transfers
Contributions and Operating Transfers:
Transfers in
Transfers out
Total contributions and operating transfers
Change in net position
Net position - beginning
Net position - ending
See auditors report on pages 11-13.
Exhibit C-2
Section
Civic
Transient
Total Nonmajor
Eight
Center
Dock
Enterprise
Housing
Fund
Fund
Funds
$ -
$ -
$120,819
$ 120,819
2,056
-
-
2,056
2,056
-
120,819
122,875
2,050,251
25,524
120,100
2,195,875
2,419
10,020
-
12,439
2,052,670
35,544
120,100
2,208,314
(2,050,614)
(35,544)
719
(2,085,439)
2,147,850
-
-
2,147,850
19
-
246
265
2,147, 869
-
246
2,148,115
97,255
(35,544)
965
62,676
-
27,911
33,715
61,626
-
27,911
33,715
61,626
97,255
(7,633)
34,680
124,302
105,322
76,672
11,813
193,807
$ 202,577
$ 69,039
$ 46,493
$ 318,109
-124-
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF CASH FLOWS
NONMAJOR PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
Cash Flows from Operating Activities:
Cash received from customers
Payments to employees
Payments to internal service funds
Other receipts
Housing assistance and other payments
Net cash provided (used) by operating activities
Cash Flows from Noncapital
Financing Activities:
Grants - program purpose
Transfers from other funds
Transfers to other funds
Net cash provided (used) by noncapital
financing activities
Cash Flows from Capital and Related
Financing Activities:
Acquisition and construction
of capital assets
Net cash provided (used) by capital and
related financing activities
Cash Flows from Investing Activities:
Interest on cash and investments
Net increase (decrease) in cash and cash
equivalents
Cash and cash equivalents, July 1, 2021
CASH AND CASH EQUIVALENTS,
JUNE 30, 2022
Section
Civic
Transient
Eight
Center
Dock
Housing
Fund
Fund
$ -
$ -
$ 120,819
4,041
-
(19,783)
(950)
(2,302)
-
2,056
-
-
(2,146,687)
(25,609)
(100,942)
(2,141,540)
(27,911)
94
Reconciliation of Operating Income (Loss) to
Net Cash Provided (Used) by Operating Activities:
Operating income (loss)
Adjustments to reconcile operating income (loss)
to net cash provided by operating activities:
Depreciation and amortization
Change in assets and liabilities:
Inventory
Unearned revenues
OPEB obligation and related deferrals
Pension obligation and related deferrals
Accounts payable and accrued expenses
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES
See auditors report on pages 11-13.
2,083,222 - -
- 27,911 33,715
Exhibit C-3
Total Nonmajor
Enterprise
Funds
$ 120,819
(15,742)
(3,252)
2,056
(2,273,238)
(2,169,357)
2,083,222
61,626
2,083,222 27,911 33,715 2,144,848
(5,203) - - (5,203)
(5,203) - - (5,203)
19 - 246 265
(63,502) - 34,055 (29,447)
425,386 - - 425,386
361,884 $ - $ 34,055 $ 395,939
$ (2,050,614) $ (35,544) $ 719 $ (2,085,439)
2,419 10,020 -
12,439
- - (552)
(552)
(64,628) - -
(64,628)
(11,191) - -
(11,191)
(87,649) - -
(87,649)
70,123 (2,387) (73)
67,663
$ (2,141,540) $(27,911) $ 94 $(2,169,357)
-125-
CITY OF PADUCAH, KENTUCKY
SUPPLEMENTARY INFORMATION
INTERNAL SERVICE FUNDS
ANNUAL COMPREHENSIVE FINANCIAL REPORT
YEAR ENDED JUNE 30, 2022
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
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF NET POSITION
INTERNAL SERVICE FUNDS
JUNE 30, 2022
ASSETS
Health
Fleet
Fleet Lease
Insurance
Insurance
Combined
Current Assets:
Maintenance
Trust
Fund
Fund
Total
Cash and cash equivalents
$ 27,250
$3,693,949
$ 815,959
$ 3,786,719
$ 8,323,877
Investments
-
-
-
-
-
Receivables, net
27,893
-
-
73,461
101,354
Prepaid expense
-
613,206
-
-
613,206
Inventories
64,326
-
-
-
64,326
Total current assets
119,469
4,307,155
815,959
3,860,180
9,102,763
Noncurrent Assets:
Net depreciable capital assets
3,664
3,514,374
-
-
3,518,038
Total assets
123,133
7,821,529
815,959
3,860,180
12,620,801
Deferred Outflows of Resources:
Deferred pension related outflows
103,008
-
-
-
103,008
Deferred OPEB related outflows
127,791
-
-
127,791
Total deferred outflows of resources
230,799
-
-
-
230,799
LIABILITIES
Current Liabilities:
Voucher and accounts payable
937
-
-
219,192
220,129
Accrued payroll and payroll taxes
19,142
-
-
-
19,142
Accrued compensated absences
22,384
-
-
-
22,384
Total current liabilities
42,463
-
-
219,192
261,655
Noncurrent Liabilities:
Pensions obligation
765,348
-
-
-
765,348
Other post employment benefits (OPEB)
229,757
-
-
-
229,757
Accrued compensated absences
18,529
-
-
-
18,529
Total noncurrent liabilities
1,013,634
-
-
-
1,013,634
Total liabilities
1,056,097
-
-
219,192
1,275,289
Deferred Inflows of Resources
Deferred pension related inflows
110,736
-
-
-
110,736
Deferred OPEB related inflows
109,783
-
-
-
109,783
Total deferred inflows of resources
220,519
-
-
-
220,519
NET POSITION
Net invested in capital assets
3,664
3,514,374
-
-
3,518,038
Unrestricted
(926,348)
4,307,155
815,959
3,640,988
7,837,754
TOTAL NET POSITION
$ (922,684)
$7,821,529
$ 815,959
$ 3,640,988
$11,355,792
See auditors report on pages 11-13_
-126-
Exhibit D-2
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF REVENUES, EXPENSES,
AND CHANGES IN NET POSITION
INTERNAL SERVICE FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
See auditors report on pages 11-13.
-127-
Health
Fleet
Fleet Lease
Insurance
Insurance
Combined
Maintenance
Trust
Fund
Fund
Total
Operating Revenues:
Charges for services - internal
$ 500,713
$1,027,174
$1,267,992
$ 3,286,975
$ 6,082,854
Charges for services - external
-
-
-
296,676
296,676
Total operating revenues
500,713
1,027,174
1,267,992
3,583,651
6,379,530
Operating Expenses:
Vehicle maintenance
546,742
-
-
-
546,742
Administrative
-
53,195
-
610,214
663,409
Insurance premium, claims and medical
-
-
1,219,400
2,928,997
4,148,397
Depreciation
4,886
954,526
-
-
959,412
Total operating expenses
551,628
1,007,721
1,219,400
3,539,211
6,317,960
Operating income (loss)
(50,915)
19,453
48,592
44,440
61,570
Nonoperating Revenues and (Expenses):
Interest and investment income
-
23,448
-
26,253
49,701
Gain (loss) on disposal of property
and equipment
310
14,400
-
-
14,710
Total nonoperating revenues
(expenses)
310
37,848
-
26,253
64,411
Income (loss) before transfers
(50,605)
57,301
48,592
70,693
125,981
Contributions and Transfers:
Transfers in
138,951
-
13,230
-
152,181
Transfers out
-
-
-
(70,000)
(70,000)
Total contributions and operating transfers
138,951
-
13,230
(70,000)
82,181
Change in net position
88,346
57,301
61,822
693
208,162
Net position - beginning
(1,011,030)
7,764,228
754,137
3,640,295
11,147,630
Net position - ending
$ (922,684)
$ 7,821,529
$ 815,959
$ 3,640,988
$11,355,792
See auditors report on pages 11-13.
-127-
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF CASH FLOWS
INTERNAL SERVICE FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
Cash Flows from Operating Activities:
Receipts from other funds for services
Payments to suppliers
Payments to employees
Insurance premium, claims and medical
Other payments
Net cash provided (used) by operating activities
Cash Flows from Noncapital Financing
Activities:
Transfers from other funds
Transfers to other funds
Net cash provided (used) by noncapital
financing activities
Cash Flows from Capital and Related
Financing Activities:
Proceeds from sale of capital assets
Purchase of capital assets
Net cash used by capital and related financing
Cash Flows from Investing Activities:
Proceeds from sales and maturities
of investments
Interest and dividends
Net cash used by investing activities
Net increase (decrease) in cash
and cash equivalents
Cash and cash equivalents, July 1, 2021
CASH AND CASH EQUIVALENTS,
JUNE 30, 2022
Exhibit D-3
Reconciliation of Operating Income (Loss) to
Net Cash Provided (Used) by Operating Activities:
Operating income (loss)
Adjustments to reconcile operating
income (loss) to net cash provided
(used) by operating activities:
Depreciation and amortization
Change in assets and liabilities:
Receivables
Prepaid expense
Inventories
OPEB obligation and related deferrals
Pension obligation and related deferrals
Accounts payable and accrued expenses
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES
See auditors report on pages 11-13.
$ (50,915) $ 19,453 $ 48,592 $ 44,440 $ 61,570
4,886 954,526 - - 959,412
(24,015) 12,198 - (4,720) (16,537)
- (97,846) - - (97,846)
(2,070) - - - (2,070)
(4,248) - - - (4,248)
(24,529) - - - (24,529)
(20,117) - (710) (34,166) (54,993)
$ (121,008) $ 888,331 $ 47,882 $ 5,554 $ 820,759
-128-
Health
Fleet
Fleet Lease
Insurance
Insurance
Combined
Maintenance
Trust
Fund
Fund
Total
$ 476,698
$ 1,039,372
$ 1,267,992
$ 3,556,289
$ 6,340,351
(211,355)
(97,846)
-
-
(309,201)
(386,351)
-
-
-
(386,351)
-
-
(1,220,110)
(2,940,518)
(4,160,628)
-
(53,195)
-
(610,217)
(663,412)
(121,008)
888,331
47,882
5,554
820,759
138,951
-
13,230
-
152,181
-
-
-
(70,000)
(70,000)
138,951
-
13,230
(70,000)
82,181
310
14,400
-
-
14,710
-
(559,727)
-
-
(559,727)
310
(545,327)
-
-
(545,017)
-
1,000,000
250,000
1,750,000
3,000,000
-
23,448
-
26,253
49,701
-
1,023,448
250,000
1,776,253
3,049,701
18,253
1,366,452
311,112
1,711,807
3,407,624
8,997
2,327,497
504,847
2,074,912
4,916,253
$ 27,250
$ 3,693,949
$ 815,959
$ 3,786,719
$ 8,323,877
Reconciliation of Operating Income (Loss) to
Net Cash Provided (Used) by Operating Activities:
Operating income (loss)
Adjustments to reconcile operating
income (loss) to net cash provided
(used) by operating activities:
Depreciation and amortization
Change in assets and liabilities:
Receivables
Prepaid expense
Inventories
OPEB obligation and related deferrals
Pension obligation and related deferrals
Accounts payable and accrued expenses
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES
See auditors report on pages 11-13.
$ (50,915) $ 19,453 $ 48,592 $ 44,440 $ 61,570
4,886 954,526 - - 959,412
(24,015) 12,198 - (4,720) (16,537)
- (97,846) - - (97,846)
(2,070) - - - (2,070)
(4,248) - - - (4,248)
(24,529) - - - (24,529)
(20,117) - (710) (34,166) (54,993)
$ (121,008) $ 888,331 $ 47,882 $ 5,554 $ 820,759
-128-
CITY OF PADUCAH, KENTUCKY
SUPPLEMENTARY INFORMATION
FIDUCIARY FUNDS
ANNUAL COMPREHENSIVE FINANCIAL REPORT
YEAR ENDED JUNE 30, 2022
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.
CITY OF PADUCAH, KENTUCKY
STATEMENT OF NET POSITION
FIDUCIARY FUNDS - PRIVATE -PURPOSE TRUST FUNDS
JUNE 30, 2022
ASSETS
Cash and cash equivalents
Investments at fair value
Money market funds
Mutual funds
Total assets
LIABILITIES
Accounts payable
NET POSITION
Held in trust for other purposes
See auditors report on pages 11-13.
-129-
Exhibit E-1
Cemetery
and
Park
Trusts
$ 15,889
1,049,299
1,065,188
$ 1,065,188
CITY OF PADUCAH, KENTUCKY
STATEMENT OF CHANGES IN NET POSITION
FIDUCIARY FUNDS - PRIVATE -PURPOSE TRUST FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
Additions:
Contributions:
Intergovernmental revenues
Private donations
Total contributions
Investment earnings:
Change in fair value of investments
Interest and dividends
Net investment earnings
Total additions
Deductions:
Capital outlay
Administrative expenses
Total deductions
Change in net position
Net position - beginning
Net position - ending
See auditors report on pages 11-13.
-130-
Exhibit E-2
Cemetery
and
Park
Trusts
5,115
5,115
(266,912)
70,727
(196,185)
(191,070)
81,546
16,186
97,732
(288,802)
1,353,990
$ 1,065,188
CITY OF PADUCAH, KENTUCKY
STATISTICAL SECTION
ANNUAL COMPREHENSIVE FINANCIAL REPORT
YEAR ENDED JUNE 30, 2022
STATISTICAL SECTION
This part of the City of Paducah's comprehensive annual financial report presents detailed
information as a context for understanding what the information in the financial statements,
note disclosures, and required supplementary information say about the City's overall
financial health.
Contents Page
Financial Trends 131-135
These schedules contain trend information to help the reader understand how the City's
financial performance and well-being changed over time.
Revenue Capacity 136-141
These schedules contain information to help the reader assess the factors affecting the City's
ability to generate its property and employee taxes.
Debt Capacity 142-145
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.
Economic and Demographic Information 146-147
These schedules offer economic and demographic indicators to help the reader understand
the environment within which the City's financial activities take place.
Operating Information 148-150
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.
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TABLE 7
CITY OF PADUCAH, KENTUCKY
PRINCIPAL TAXPAYERS - PROPERTY TAX
CURRENT YEAR AND NINE YEARS PRIOR
Taxpayer
Kentucky Oaks Mall
Cpark Paducah LLC
Boyd Co FKA Whayne Supply Co
Menard LLC
Paducah Medical Investors
Ducmall LLC
Woodstone Enterprises LP
Wal Mart Real Estate Business
Computer Services Inc
Greenway Village LLC
Sams Real Estate Business Trust
Wal-Mart Store
USF Propco I LLC
Lowes Home Centers, Inc.
TOTALS
2022
2013
(1)
(2)
(1)
Percentage of
(2)
Percentage of
Assessed
Total Assessed
Assessed
Total Assessed
Valuation
Valuation
Valuation
Valuation
$ 58,870,100
2.18%
$ 50,900,262
2.37%
20,111,900
0.74%
16,099,962
0.60%
14,950,001
0.55%
13,440,090
0.50%
13,440,090
0.63%
13,119,800
0.49%
13,119,800
0.61%
12,429,000
0.46%
12,429,000
0.58%
10,646,400
0.39%
10,646,400
0.50%
10,504,986
0.39%
9,083,185
0.42%
10,070,624
0.37%
9,222,955
0.43%
9,000,000
0.42%
8,156,900
0.38%
8,134,350
0.38%
$ 180,242,863
6.67%
$ 144,132,942
6.72%
(1) Source - Property Valuation Administration; Assessed value as of January 1, 2021.
(2) Source - Property Valuation Administration; Assessed value as of January 1, 2012.
-138-
TABLE 8
CITY OF PADUCAH, KENTUCKY
SECURED TAX LEVIES AND COLLECTIONS*
LAST TEN FISCAL YEARS
(1) Includes current year real and personal property tax.
* Source - City of Paducah Finance Department.
-139-
Collected within the
Fiscal Year of the Levy
Total Collections to Date
Fiscal
(1)
Year
Taxes Levied
(1)
Percent of
Collections
Percent of
Ended
for the
Amount of
Levy
in Subsequent
Total
Levy
June 30,
Fiscal Year
Collections
Collected
Years
Collections
Collected
2013
4,427,063
4,334,698
97.9%
88,003
4,422,701
99.9%
2014
4,593,358
4,509,874
98.2%
78,696
4,588,570
99.9%
2015
4,717,785
4,644,522
98.4%
66,625
4,711,147
99.9%
2016
4,879,423
4,802,067
98.4%
68,962
4,871,029
99.8%
2017
4,988,841
4,888,303
98.0%
90,845
4,979,148
99.8%
2018
5,211,332
5,120,761
98.3%
73,624
5,194,385
99.7%
2019
5,454,040
5,323,669
97.6%
106,602
5,430,271
99.6%
2020
5,648,448
5,506,011
97.5%
101,127
5,607,138
99.3%
2021
5,662,133
5,563,728
98.3%
43,221
5,606,949
99.0%
2022
6,109,968
5,802,139
95.0%
-
5,802,139
95.0%
(1) Includes current year real and personal property tax.
* Source - City of Paducah Finance Department.
-139-
TABLE 9
CITY OF PADUCAH, KENTUCKY
EMPLOYEE LICENSE TAX COLLECTIONS
LAST TEN FISCAL YEARS
206,581,194
(1) Source - City of Paducah Finance Department - Actual collections during the fiscal year.
-140-
(1)
Direct
Fiscal
Taxes
Tax
Year
Collected
Rate
2013
18,336,124
2.00%
2014
18,114,396
2.00%
2015
19,092,911
2.00%
2016
20,130,158
2.00%
2017
20,803,763
2.00%
2018
21,054,644
2.00%
2019
21,648,742
2.00%
2020
21,490,917
2.00%
2021
22,064,353
2.00%
2022
23,845,186
2.00%
206,581,194
(1) Source - City of Paducah Finance Department - Actual collections during the fiscal year.
-140-
TABLE 10
CITY OF PADUCAH, KENTUCKY
PRINCIPAL EMPLOYEE LICENSE TAXPAYERS
CURRENT YEAR AND NINE YEARS PRIOR
(1) Source - City of Paducah Finance Department - Actual collections during the fiscal year.
-141-
2022
(1)
Percentage of
Taxpayers
Number of
Percentage
Taxes
Total Employee
By Range
Filers
of Total
Collected
License Tax
$0450,000 $50,000
2,282
97.15%
10,607,467
44.48%
$50,001 - $100,000
36
1.53%
2,510,430
10.53%
$100,001 - $500,000
26
1.11%
4,719,368
19.79%
Greater than $500,000
5
0.21%
6,007,921
25.20%
TOTALS
2,349
100.00%
$ 23,845,186
100.00%
2013
(1)
Percentage of
Taxpayers
Number of
Percentage
Taxes
Total Employee
By Range
Filers
of Total
Collected
License Tax
$0450,000 $50,000
2,553
98.04%
8,895,868
48.52%
$50,001 - $100,000
28
1.08%
2,069,371
11.29%
$100,001 - $500,000
21
0.81%
4,412,746
24.07%
Greater than $500,000
2
0.08%
2,958,139
16.13%
TOTALS
2,604
100.00%
$ 18,336,124
100.00%
(1) Source - City of Paducah Finance Department - Actual collections during the fiscal year.
-141-
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TABLE 13
CITY OF PADUCAH, KENTUCKY
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
AS OF JUNE 30, 2022
* Information from finance office at each location.
-144-
Estimated
(1)
Share of
Reported
Percentage
Direct and
Debt
Applicable
Overlapping
Outstanding
to the City
Debt
City of Paducah
$ 40,960,364
100.00%
$ 40,960,364
Paducah Independent School District
72,082,000 *
100.00%
72,082,000
McCracken County
19,259,821 *
45.10%
8,686,179
McCracken County Board of Education
76,435,000 *
31.60%
24,153,460
Overlapping debt
167,776,821
104,921,639
TOTAL DIRECT AND OVERLAPPING DEBT
$ 208,737,185
$145,882,003
(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.
-144-
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TABLE 15
CITY OF PADUCAH, KENTUCKY
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN FISCAL YEARS
Sources:
(1) Latest available Bureau of the Census Count
(2) Board of Education; represents elementary and secondary public schools.
(3) Kentucky Cabinet for Human Resources, Department for Employment Services.
-146-
(3)
Unemployment
Rate
8.4%
8.2%
5.6%
6.2%
6.8%
6.4%
5.5%
5.4%
5.9%
4.6%
(1)
(1)
(1)
(2)
Personal
Per Capita
Median
School
Fiscal Year
Population
Income
Income
Age
Enrollment
2012-2013
25,024
511,240,320
20,430
41.4
2,744
2013-2014
25,024
511,240,320
20,430
41.4
3,138
2014-2015
25,024
511,240,320
20,430
41.4
2,843
2015-2016
25,024
511,240,320
20,430
41.4
3,139
2016-2017
25,024
511,240,320
20,430
41.4
3,132
2017-2018
25,024
511,240,320
20,430
41.4
2,835
2018-2019
25,024
511,240,320
20,430
41.4
2,980
2019-2020
25,024
511,240,320
20,430
41.4
3,232
2020-2021
27,137
830,934,940
30,620
43.8
2,832
2021-2022
27,137
830,934,940
30,620
43.8
2,832
Sources:
(1) Latest available Bureau of the Census Count
(2) Board of Education; represents elementary and secondary public schools.
(3) Kentucky Cabinet for Human Resources, Department for Employment Services.
-146-
(3)
Unemployment
Rate
8.4%
8.2%
5.6%
6.2%
6.8%
6.4%
5.5%
5.4%
5.9%
4.6%
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U
CITY OF PADUCAH, KENTUCKY
SINGLE AUDIT SECTION
ANNUAL COMPREHENSIVE FINANCIAL REPORT
YEAR ENDED JUNE 30, 2022
CITY OF PADUCAH, KENTUCKY
SCHEDULE OF EXPENDITURES
OF FEDERAL AWARDS
FOR THE
YEAR ENDED JUNE 30, 2022
Federal
Federal Grantor/Pass-Through Grantor/
CFDA
Pass -Through
Pass -Through
Program Title:
Number
Grantor Number
To Subrecipients
Expenditures
Department of Housing and Urban
Development:
Direct Programs:
Housing Voucher Cluster
Section 8 Housing Choice Vouchers
14.871
N/A
$
$ 2,083,221
COVID-19 Section 8 Housing Choice Vouchers
14.871
N/A
64,629
Total Housing Voucher Cluster
-
2,147,850
Passed -through Kentucky Housing
Corporation:
Emergency Solutions Grant Program
14.231
N/A
25,579
Passed -through Kentucky Governors
Office for Local Development:
Community Development Block Grants
14.228
N/A
395,000
400,000
Total Department of Housing and Urban
Development
395,000
2,573,429
Department of the Interior
Passed -through Kentucky Heritage Council:
Historic Preservation Fund Grants -In -Aid
15.904
KY -20-10018
-
9,000
Total Department of the Interior
-
9,000
Department of Justice:
Direct Programs:
Bulletproof Vest Partnership Program
16.607
N/A
4,212
Coronavirus Emergency Supplemental Funding
16.034
N/A
-
29,300
Public Safety Partnership and Community
Policing Grants
16.710
N/A
139,917
Edward Byme Memorial Justice
Assistance Grant Program
16.738
N/A
12,245
Total Department of Justice
-
185,674
Department of Transportation:
Direct Programs:
National Infrastructure Investments
20.933
N/A
-
141,113
Passed -through Kentucky Transportation Cabinet:
Highway Planning and Construction
(6,014)
Highway Safety Cluster:
State and Community Highway Safety
20.600
PT -21-63
8,105
State and Community Highway Safety
20.600
PT -22-65
17,451
Total Highway Safety Cluster
20.205
N/A
25,556
Total Department of Transportation
-
160,655
U.S. Department of the Treasury
Passed -through Kentucky Department for
Local Government:
Coronavirus State and Local Fiscal
Recovery Funds
21.027
N/A
402,432
Total U.S. Department ofthe Treasury
402,432
Department of National Endowment for the
Humanities:
Direct Programs:
Promotion of the Arts Partnership
Agreements
45.025
N/A
10,000
Total Department of National Endowment for the
Humanities
-
10,000
Department of Environmental Protection
Agency:
Passed -through Kentucky Infrastructure
Association:
Clean Water State Revolving Fund (CWSRF) Cluster:
Capitalization Grants for Clean
Water State Revolving Funds
66.458
N/A
758,679
Total Department of Environmental
Protection Agency
-
758,679
Department of Homeland Security:
Passed -through Kentucky Division of
Emergency Management:
Disaster Grants - Public Assistance
97.036
N/A
267,771
Disaster Grants - Public Assistance
97.036
N/A
273,901
Disaster Grants - Public Assistance
97.036
N/A
403,188
Homeland Security Grant Program
97.067
N/A
314,450
Homeland Security Grant Program
97.067
N/A
70,115
Total Department of Homeland Security
-
1,329,425
TOTAL EXPENDITURES OF FEDERAL AWARDS
S 395,000
$ 5,429,294
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, 2022
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 Title 2 U.S. Code of Federal
Regulations Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements
for Federal Award (Uniform Guidance). Therefore, some amounts presented in this schedule may
differ from amounts presented in, or used in the preparation of, the financial statements.
Note 2 - Subreciyients:
The City of Paducah provided federal awards to subrecipients as follows:
Federal
CFDA Amount
Pro,aram Title Number Provided
Four Rivers Recovery Center 14.228 $395,000
Note 3 — Indirect Cost Rate:
The City of Paducah has not elected to use the 10% de minimis indirect cost rate as allowed under the
Uniform Guidance.
Note 4 — Reconciliation of Federal Awards to the Financial Statements:
Total Federal Awards 5.429294
Federal Awards by Fund
General Fund
$ 407,432
Capital Improvement Fund
1,720,333
Debt Service Fund
758,679
Special Revenue Fund
395,000
Proprietary Fund
2,147,850
Total Federal Awards
5.429294
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VKEMPER
Vu. CPA GROUPLLP
Certified Public Accountants and Consultants
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 GO VERNMENTA UDITING STANDARDS
Honorable George Bray, 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, 2022, 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 21, 2022.
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) as a basis for designing 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
and therefore, material weaknesses or significant deficiencies may exist that have not been identified. 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 financial statements.
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 is required to be reported under Government Auditing Standards.
100 South 4't' Street • Suite 300 • Paducah, KY 42001
Phone: (270)443-4400 Fax: (270)443-0963 kempercpa.com
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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 21, 2022
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�'KEMPER
1i CPA GROUPLLP
Certified Public Accountants and Consultants
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM
AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE
Honorable George Bray, Mayor
Members of the Board of Commissioners
City of Paducah
Paducah, Kentucky
Report on Compliance for Each Major Federal Program
Opinion on Each Major Federal Program
We have audited the City of Paducah's compliance with the types of compliance requirements identified as subject to
audit in the OMB Compliance Supplement that could have a direct and material effect on each of the City of Paducah's
major federal programs for the year ended June 30, 2022. City of Paducah's major federal programs are identified
in the summary of auditor's results section of the accompanying schedule of findings and questioned costs.
In our opinion, City of Paducah 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,
2022.
Basis for Opinion on Each Major Federal Program
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 the audit requirements of Title 2 U.S. Code of Federal Regulations
Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards
(Uniform Guidance). Our responsibilities under those standards and the Uniform Guidance are further described in the
Auditor's Responsibilities for the Audit of Compliance section of our report.
We are required to be independent of City of Paducah, Kentucky and to meet our other ethical responsibilities,
in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for each major federal
program. Our audit does not provide a legal determination of City of Paducah, Kentucky's compliance with the
compliance requirements referred to above.
Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the design, implementation,
and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules,
and provisions of contracts or grant agreements applicable to City of Paducah, Kentucky's federal programs.
Auditor's Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance
requirements referred to above occurred, whether due to fraud or error, and express an opinion on City of Paducah,
Kentucky's compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute
assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing
standards, Governmental Auditing Standards, and the Uniform Guidance will always detect material noncompliance
when it exists.
100 South 4th Street • Suite 300 • Paducah, KY 42001
Phone: (270)443-4400 Fax: (270)443-0963 kempercpa.com
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The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as
fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Noncompliance with the compliance requirements referred to above is considered material if there is a substantial
likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the
report on compliance about City of Paducah, Kentucky's compliance with the requirements of each major federal
program as a whole.
In performing an audit in accordance with generally accepted auditing standards, Governmental Auditing Standards,
and the Uniform Guidance, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit.
• Identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform
audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence
regarding City of Paducah, Kentucky's compliance with the compliance requirements referred to above and
performing such other procedures as we considered necessary in the circumstances.
• Obtain an understanding of City of Paducah, Kentucky's internal control over compliance relevant to the audit
in order to design audit procedures that are appropriate in the circumstances and to test and report on internal
control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an
opinion on the effectiveness of City of Paducah, Kentucky's internal control over compliance. Accordingly, no
such opinion is expressed.
We are required to communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over
compliance that we identified during the audit.
Report on Internal Control Over Compliance
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 the internal control over compliance was for the limited purpose described in the Auditor's
Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal
control over compliance that might be material weaknesses or significant deficiencies in internal control over
compliance. Given these limitations, during our audit we did not identify any deficiencies in internal control over
compliance that we consider to be material weaknesses, as defined above. However, material weaknesses or significant
deficiencies in internal control over compliance may exist that were not identified.
Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over
compliance. Accordingly, no such opinion is expressed.
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 Uniform Guidance. Accordingly,
this report is not suitable for any other purpose.
kms- o ,1-4p
Certified Public Accountants and Consultants
Paducah, Kentucky
December 21, 2022
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CITY OF PADUCAH, KENTUCKY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2022
Section I — Summary of Auditor's Results
1. The independent auditor's report expresses an unmodified opinion on whether the financial
statements of the City of Paducah, Kentucky were prepared in accordance with generally
accepted accounting principles.
2. No significant deficiencies relating to the audit of the financial statements are reported. No
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, which would be required to be reported in accordance with Government Auditing
Standards, were disclosed during the audit.
4. No deficiencies relating to the audit of major federal award programs are reported. No 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 on all major federal programs.
6. There are no findings to be reported in accordance with 2 CFR Section 200.516(a) in this
schedule.
7. The programs tested as major programs included:
Name CFDA
Section 8 Housing Choice Vouchers 14.871
Capitalization Grants for Water State
Revolving Funds 66.458
Disaster Grants — Public Assistance 97.036
8. The threshold used for distinguishing Types A and B programs was $750,000.
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 Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative
Requirements, Cost Principles and Audit Requirements for Federal Award (Uniform Guidance).
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CITY OF PADUCAH, KENTUCKY
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
YEAR ENDED JUNE 30, 2021
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 Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative
Requirements, Cost Principles and Audit Requirements for Federal Award (Uniform Guidance).
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