HomeMy WebLinkAboutJune-30-2023CITY OF PADUCAH,
KENTUCKY
ANNUAL COMPREHENSIVE
FINANCIAL REPORT
YEAR ENDED JUNE 30, 2023
FINANCE DEPARTMENT
CITY OF PADUCAH,
KENTUCKY
City of Paducah
Paducah, Kentucky
Annual Comprehensive Financial Report
Year Ended June 30, 2023
Issued by the
Finance Department
CITY OF PADUCAH, KENTUCKY
ANNUAL COMPREHENSIVE FINANCIAL REPORT
YEAR ENDED JUNE 30, 2023
TABLE OF CONTENTS
Exhibit No. Pate 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
Statement of Revenues, Expenditures and Changes -
Budget and Actual - Special Revenue Opioid Settlement Fund
9
47
Proprietary Funds:
Statement of Net Position
10
48
Statement of Revenues, Expenses and Changes in
Net Position
11
49
Statement of Cash Flows
12
50
Fiduciary Funds:
Statement of Net Position
13
51
Statement of Changes in Net Position
14
52
Notes to Financial Statements
53-103
Required Supplementary Information:
Schedule of Changes in the Police and Firefighters'
Pension Trust Fund's Net Pension Liability and Related Ratios
A-1
104
Schedule of Police and Firefighters' Pension Trust Fund
Contributions and Investment Returns
A-2
105
Schedule of City's Proportionate Share of the Net Pension Liability
County Employees' Retirement System
A-3
106
Exhibit No. Pate No.
Schedule of City's Contributions - Pensions
County Employees' Retirement System
A-4
107
Schedule of City's Proportionate Share of the Net Medical Insurance
Plan Liability - County Employees' Retirement System
A-5
108
Schedule of City's Contributions — Medical Insurance Plan
County Employees' Retirement System
A-6
109
Supplementary Information:
Bond Fund Detail Schedule of Revenues, Expenditures and Changes -
Budget and Actual
B-1
110
General Capital Improvements Detail Schedule of
Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual
B-2
111
Debt Service Fund Detail Schedule of Revenues,
Expenditures, and Changes in Fund Balance - Budget
and Actual
B-3
112
Nonmajor Governmental Funds:
Combining Balance Sheet
B-4
113-114
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances
B-5
115-116
Detail Statement of Revenues, Expenditures, and
Changes in Fund Balance - Budget and Actual:
Municipal Aid Fund
B-6
117
Emergency Communication Service Fund
B-7
118
Court Awards Fund
B-8
119
CDBG Grant Fund
B-9
120
Bed Tax Fund
B-10
121
Nonmajor Enterprise Funds:
Combining Statement of Net Position
C-1
122
Combining Statement of Revenues, Expenses and
Changes in Fund Net Position
C-2
123
Combining Statement of Cash Flows
C-3
124
Internal Service Funds:
Combining Statement of Net Position
D-1
125
Combining Statement of Revenues, Expenses, and
Changes in Fund Net Position
D-2
126
Combining Statement of Cash Flows
D-3
127
Fiduciary Funds:
Combining Statement of Net Position -
Private -purpose Trust Funds
E-1
128
Combining Statement of Changes in Net Position -
Private -purpose Trust Funds
E-2
129
Table No.
Pate No.
Statistical Section:
Net Position by Component
1
130
Changes in Net Position
2
131-132
Fund Balances, Governmental Funds
3
133
Changes in Fund Balances, Governmental Funds
4
134
Assessed and Estimated Actual Value of
Taxable Property
5
135
Governments
6
136
Principal Taxpayers
7
137
Secured Tax Levies and Collections
8
138
Employee License Tax Collections
9
139
Single Audit Section:
Schedule of Expenditures of Federal Awards 150
Notes to the Schedule of Expenditures of Federal
Awards 151
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 152-153
Independent Auditor's Report on Compliance for Each Major
Program and on Internal Control Over Compliance Required by
Uniform Guidance 154-155
Schedule of Findings and Questioned Costs 156
Schedule of Prior Audit Findings 157
Table No.
Paee No.
Statistical Section:
Principal Employee License Taxpayers
10
140
Ratio of Outstanding Debt by Type
11
141
Ratio of Net General Bonded Debt Outstanding
12
142
Direct and Overlapping Governmental
Activities Debt
13
143
Legal Debt Margin Information
14
144
Demographic and Economic Statistics
15
145
Principal Employers
16
146
City Full -Time Employees by Function
17
147
Operating Indicators by Function
18
148
Capital Asset Statistics by Function
19
149
Single Audit Section:
Schedule of Expenditures of Federal Awards 150
Notes to the Schedule of Expenditures of Federal
Awards 151
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 152-153
Independent Auditor's Report on Compliance for Each Major
Program and on Internal Control Over Compliance Required by
Uniform Guidance 154-155
Schedule of Findings and Questioned Costs 156
Schedule of Prior Audit Findings 157
THIS PAGE INTENTIONALLY LEFT BLANK
CITY OF PADUCAH, KENTUCKY
INTRODUCTORY SECTION
ANNUAL COMPREHENSIVE FINANCIAL REPORT
YEAR ENDED JUNE 30, 2023
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 19, 2023
We are pleased to submit Paducah's Annual Comprehensive Financial Report for the year ended June 30,
2023. 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, 2023,
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 Develonment 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 Quitter'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 quitters' annual convention held in April. The
convention attracts an estimated 30,000 visitors to Paducah annually.
One of Paducah's oldest celebrations is the 8th of August Emancipation Celebration, which features African
American family reunions, or a homecoming. It is a time for African Americans to pay tribute to their
heritage and roots, and a time of reconciliation.
The Barbecue on the River event was started in 1995, as a way for local charities to raise funds. It attracts
in excess of 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 eighteenth 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, 2023. 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.
AccountinE 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.
Budeetary 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 FY2023, 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 FY2023 this
contribution was $386 thousand. This amount was $262 thousand in FY2022.
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 FY2023 budget process, the
Commission reviewed numerous decision packages proposed for the Investment Fund Budget; expenditures
totaling approximately $6.8 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 spring of
2024. 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 29,463 persons employed (McCracken County) as
of June 30, 2023. The June 2023 unemployment rate was 4.3% (McCracken County), which is a decrease
from 4.6% in the prior year, and slightly higher than the June 2023 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, 2022. This was the thirty-second
consecutive year that the City achieved this prestigious award.
In order to be awarded a Certificate of Achievement for Excellence in Financial Reporting, a government
must publish an easily readable and efficiently organized 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
-8-
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
w
George P. Bray
Sandra Wilson
Raynarldo Henderson
Buzz Smith
David Guess
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, 2022
Executive Director/CEO
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CITY OF PADUCAH, KENTUCKY
FINANCIAL SECTION
ANNUAL COMPREHENSIVE FINANCIAL REPORT
YEAR ENDED JUNE 30, 2023
"KEMPER
A;.2�q.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, the discretely presented component unit, each major fund, and the aggregate remaining fund
information of the City of Paducah, Kentucky as of and for the year ended June 30, 2023, 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, the discretely presented component
unit, each major fund, and the aggregate remaining fund information of the City of Paducah, Kentucky as of June
30, 2023, 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.
We did not audit the financial statements of Paducah Water Works, which represent 100 percent, 100 percent, and
100 percent, respectively, of the assets, net position, and revenues of the discretely presented component unit as of
June 30, 2023. Those statements were audited by other auditors whose report has been furnished to us and our
opinion, insofar as it relates to the amounts included for the discretely presented component unit, is based solely
on the report of other auditors.
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 Managementfor 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 4h 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 and Government Auditing
Standards will always detect a material misstatement when it exists. The risk of not detecting a material
misstatement resulting from fraud is higher than 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 and Government 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 104 through 109 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 110 through 129; and the
schedule of expenditures of federal awards on pages 150 through 151 as required by Title 2 U.S. Code of Federal
Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for
-12-
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 management and were derived from and relates 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 19, 2023, 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 the effectiveness of the City of
Paducah, Kentucky's 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.
kms- CPQ,f-4r , 400
Certified Public Accountants and Consultants
Paducah, Kentucky
December 19, 2023
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THIS PAGE INTENTIONALLY LEFT BLANK
CITY OF PADUCAH, KENTUCKY
REQUIRED SUPPLEMENTARY INFORMATION
ANNUAL COMPREHENSIVE FINANCIAL REPORT
YEAR ENDED JUNE 30, 2023
CITY OF PADUCAH, KENTUCKY
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2023
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, 2023. 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 30-103) 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 $33.1 million net position). This amount includes $3.8 million restricted to specific
projects by laws, regulations or contractual agreements. A deficit total of $37.9 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 (OPER), which was
implemented in the fiscal year ended 6/30/18.
• The City's total net position increased $12.1 million this year. Net position of governmental activities
increased by $13.0 million and business -type activities decreased by $900 thousand.
• At fiscal year end, City governmental funds reported a combined ending fund balance of $63.6 million.
Approximately 36% of this total amount, $23.1 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 $28.7 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 58%.
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 eleven (11) individual governmental funds. Information is presented separately
in the governmental fund balance sheet and in the governmental fund statement of revenues,
expenditures, and changes in fund balances for the General, General Capital Improvements, Special
Revenue Investment, Opioid Settlement Fund, 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
113-121.
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 financial statements based on revenue earned.
Proprietary funds provide the same kind of information as government -wide financial statements,
but in greater detail. Individual data for the nonmajor proprietary funds is presented in the form
of combining statements on pages 122-124 of this report. Individual data for the internal service
funds is likewise presented in the form of combining statements on pages 125-127 of this report.
3) Fiduciary Funds. Fiduciary funds are used to account for resources held for the benefit of parties
outside the government and are not reflected in government -wide financial statements because
those resources are not available to support City programs. Individual data for one of the City's
two fiduciary funds (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 128-129 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 53-103 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 110-129 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 $33.1 million, an
increase of $12.1 million from prior year.
-16-
For FY2023, the largest portion of the City's net position ($67.1 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 $73.3
million as of June 30, 2023. 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, 2023, is $19.6 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 $37.9 million in FY2023.
As of June 30, 2023, 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
2023
2022
2023
2022
2023
2022
Current Assets $ 89,199,169
$85,937,475
$ 4,652,494
$ 5,292,732
$93,851,663
$ 91,230,207
Capital Assets 77,522,977
69,103,975
2,604,439
2,148,059
80,127,416
71,252,034
Other noncurrent assets 5,854,923
6,499,058
-
-
5,854,923
6,499,058
Total Assets 172,577,069 161,540,508 7,256,933 7,440,791 179,834,002 168,981,299
Deferred Outflows of
Resources 17,920,396 18,713,567 724,940 749,841 18,645,336 19,463,408
Current Liabilities 9,505,960 8,124,088 566,015 390,932 10,071,975 8,515,020
Noncurrent liabilities 129,416,690 122,831,965 6,044,490 5,223,610 135,461,180 128,055,575
Total liabilities 138,922,650 130,956,053 6,610,505 5,614,542 145,533,155 136,570,595
Deferred Inflows of Resources 19,454,783 30,217,864 432,892 706,119 19,887,675 30,923,983
Net position:
Net Invested in Capital Assets 64,717,247 58,980,030 2,432,284 2,148,059 67,149,531 61,128,089
Restricted 3,762,148 996,142 7,527 199,794 3,769,675 1,195,936
Unrestricted (36,359,363) (40,896,014) (1,501,335) (477,882) (37,860,698) (41,373,896)
TOTAL NET POSITION $ 32,120,032 $ 19,080,158 $ 938,476 $ 1,869,971 $ 33,058,508 $ 20,950,129
-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 Analysis
Total Net Position
$70
y $60
a
° $50
$40
a
~" $30
$20
$10
$0
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Substantial increases occurred in fiscal years 2016 and 2017, which resulted from heavy capital
development that was funded primarily with grant funding. Projects during those 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 continue to have a negative impact on
net position.
Despite the CERS/OPEB adjustments discussed above, net position increased by approximately $12.1
million in FY2023. This is primarily the result of unanticipated revenues received during the year that
will be carried over for spending in future years. This includes $3.7 million in major categories of
taxes/licenses and $1.5 million in interest income received on the City's operating account. The City
also had $2.5 million in opioid settlement funds ($500 thousand received and $2 million receivable)
at fiscal year end that will remain in restricted net position until their program use in future years. In
addition, the City had multiple capital projects that were grant funded, which caused an increase in
net position, including $3.9 million in ARPA funds that were largely utilized for storm water
improvements.
A. Analysis of the City's Operations
The following table provides a summary of the City's operations for the years ended June 30, 2023
and 2022. Governmental activities increased the City's net position by $13,039,874 and business -
type activities decreased the City's net position by $931,495.
-18-
City of Paducah, Kentucky
Changes in Net Position
June 30
Expenses:
General Government
Governmental Activities
Business -Type Activities
Total Primary Government
Revenues:
2023
2022
2023 2022
2023
2022
Program revenues:
26,348,079
25,631,674
Public service
7,431,587
Charges for services
$ 4,961,689
$ 3,366,962
$ 4,955,600 $ 4,925,719
$ 9,917,289
8,292,681
Operating grants/contributions
9,181,984
4,333,082
2,160,230 2,204,532
11,342,214
6,537,614
Capital grants/contributions
2,619,851
2,363,472
- -
2,619,851
2,363,472
General Revenues:
Interest on long-term debt
483,950
513,885
-
-
Property taxes
6,575,885
6,128,302
-
6,575,885
6,128,302
Franchise taxes
285,816
332,606
-
285,816
332,606
Telecommunications tax
638,320
630,352
-
638,320
630,352
Insurance premium tax
6,331,216
5,834,013
-
6,331,216
5,834,013
Vehicle tax
996,544
913,410
-
996,544
913,410
Bank tax
406,141
403,997
-
406,141
403,997
Gross receipts license tax
5,375,589
5,297,560
- -
5,375,589
5,297,560
Employee license tax
25,904,591
23,845,186
- -
25,904,591
23,845,186
Transient room tax
1,839,464
1,788,776
- -
1,839,464
1,788,776
Othertaxes
380,913
364,116
- -
380,913
364,116
Unrestricted investment
(258,374)
-
-
earnings
2,667,976
551,355
136,363 28,613
2,804,339
579,968
Gain on sale of capital assets
70,118
14,710
61,557 1,580
131,675
16,290
Miscellaneous
-
-
- -
-
-
Total revenues
68,236,097
56,167,899
7,313,750 7,160,444
75,549,847
63,328,343
Expenses:
General Government
11,972,825
11,686,115
11,972,825
11,686,115
Public safety
26,348,079
25,631,674
26,348,079
25,631,674
Public service
7,431,587
7,057,855
7,431,587
7,057,855
Park & recreation
3,503,495
3,423,465
3,503,495
3,423,465
Planning & development
5,845,326
2,348,101
5,845,326
2,348,101
Interest on long-term debt
483,950
513,885
-
-
483,950
513,885
Solid Waste
-
-
5,482,827
4,558,219
5,482,827
4,558,219
Section Eight Housing
2,250,727
2,052,670
2,250,727
2,052,670
Civic Center
-
35,544
-
35,544
Transient Boat Dock
-
-
122,652
120,100
122,652
120,100
Total expenses
55,585,262
50,661,095
7,856,206
6,766,533
63,441,468
57,427,628
Increase (decrease) in Net
position before transfers
12,650,835
5,506,804
(542,456)
393,911
12,108,379
5,900,715
Transfers
389,039
258,374
(389,039)
(258,374)
-
-
Change in net position
13,039,874
5,765,178
(931,495)
135,537
12,108,379
5,900,715
Net position, July 1
19,080,158
13,314,980
1,869,971
1,734,434
20,950,129
15,049,414
NET POSITION, JUNE 30
$ 32,120,032
$ 19,080,158
$ 938,476
$ 1,869,971
$ 33,058,508
$ 20,950,129
-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 2023.
Governmental Activities Revenue by Source
Transient Room Tax Other Income
Capital Grants/ 3%1 4%
Contributions
4% Occupational
Licenses
Other Taxes 55%
4%
Operating Grants/
Contributions
13.5%
Charges for Services
7%
Property Taxes
9.5%
In fiscal year 2023, the City derived approximately 71.5% of its revenue from taxes/licenses.
Occupational licenses, which include payroll withholding tax, business licenses, and insurance
premium tax is the largest source of income to the City, totaling $37.6 million. This category of
revenue increased $2.6 million, or approximately 7.5% from the prior year. Employee license tax
experienced the largest growth in this area, increasing by just over $2.0 million. No changes in these
revenues appear to be the result of one significant taxpayer's activity, but the result of multiple entities
-20-
having increases from the prior year. It is likely that inflation has played a role in the increases in
these revenues, as they are based on percentages of gross receipts, insurance premiums, and wages.
Property taxes continue to be a stable source of revenue, comprising nearly 10% of total revenue in
FY2023. This is the second year in a row that the City has taken the 4% maximum allowed, leading
to an increase in real estate tax revenue.
Capital grants/contributions remained a revenue category of note for FY2023, as the City continues
to recognize revenue from the utilization of ARPA funds. Opioid settlement funds in the amount of
$2.5 million are also included in this category of revenue.
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
e
0
3.00
2.00
1.00
Solid Waste Section Eight Civic Center Transient
Housing Boat Dock
* Expenses
o Revenues
These activities should break-even; that is, the charges for services should be large enough to sustain
operations. The only business -type activity that reflected these results for FY2023 was the Transient
Boat Dock.
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 FY2024.
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 FY2023 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
$63.6 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
$295,989 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 $576,019 of opioid settlement funds, which are restricted in use for combating the
effects of opioid addiction in the Paducah area.
• 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
$3,977,570 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
Nouspendable
<1%
Reshicted
31%
Committed
7%
Assigned
16%
Approximately 45% of total fund balance, $28.7 million is unassigned General Fund fund balance,
which is available for spending at the government's discretion but only up to the amount represented
by cash. At year-end there was $25 million available as General Fund cash. City fiscal policy
(Ordinance 2022-06-9740) requires that an amount not less than 10% of the General Fund's budgeted
expenditures remain undesignated in the fund balance, or $4.4 million, which leaves $20.6 million as
unassigned for fiscal year 2023.
-22-
As a measure of General Fund liquidity, readers may compare unassigned fund balance to total
General Fund expenditures. Unassigned General Fund fund balance ($28.7 million) represents 59%
of expenditures and transfers out ($48.7 million).
General Fund
Fund Balance as a % of Expenditures
65%
60%
55
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
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. These revenue increases combined with a delayed
interfund transfer ($900 thousand) to the Capital Improvement Fund drove up fund balance that year.
In FY2022, 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. The slight decrease in this ratio for FY2023 was due to $3.9 million in ARPA
funds transferred to the Capital Project Fund.
The Investment Fund had a fund balance of $4.0 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.
In FY2023 the Commission appropriated $650 thousand and $350 thousand from fund balance for
City facility improvements and pickleball court construction, respectively. Those additional expenses
netted with revenue exceeding expectations led to an overall decrease in fund balance of $153
thousand from the previous year.
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 $ 281,004
Section Eight Housing 8,854
Civic Center -
Transient Boat Dock 59,470
Combined total net position change for the four funds was a decrease of $917 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 4th 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. Due to the financial performance of the Civic
Center and the decision to keep it a low-cost choice for Paducah's citizens upon its pending reopening,
this fund has been closed and will be presented as part of the Park's Department's when its activities
resume.
V. General Fund Budgetary Highlights
Total actual expenditures exceeded final appropriations (including operating transfers out) by $5.1
million. ARPA funds in the amount of $3.9 million were transferred out to the capital projects fund
in FY2023. The budgetary appropriation for this was approved in FY2022, but for year-end financial
statement presentation purposes the unspent funds in FY2022 were reclassed to deferred revenue and
re -transferred to the Capital Projects Fund upon their use in FY2023. Remaining unspent ARPA funds
at the end of FY2023 of $2.2 million are on track to be expended by the December 2024 deadline.
Other year-end adjustments had an impact on budgetary comparisons as well. Intergovernmental
expense of $368,753 represents a tax levied and collected by the City for Paducah Junior College.
The City does not budget for this expenditure.
Also, in FY2023 the City implemented GASB Statement No. 96, Subscription -Based Information
Technology Arrangements. The implementation of this GASB required the City to recognize certain
assets and liabilities for subscription -based information technology arrangements that were previously
expensed. For the fund statements/budgetary basis reporting, this resulted in principal and interest
requirements of $475,414. The City does not budget for these expenditures.
The implementation of GASB Statement No. 96 also had an effect on departmental appropriations.
Information Systems incurred a $2.4 million expense for SBITA proceeds at the fund statement level.
The City does not budget for these expenditures.
Excluding these above-mentioned year-end accounting adjustments, final department appropriations
exceeded actual by approximately $1.5 million or 3.8%. Public safety made up $578 thousand of this
difference, primarily through salary and related benefit slippage from unfilled positions. Public Works
also had significant salary/benefit slippage from unfilled positions totaling $257 thousand. The
remaining areas of positive budget variance within operations appear to be scattered across many areas
and not limited to a particular department.
-24-
VL 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,
2023, is $67.1 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 2023, project and equipment additions totaled over $11.1 million (excludes $3.1
million in subscription -based information technology arrangements (SBITA). Multiple projects
totaling $8.4 million remained in construction in progress at year-end.
Some of the largest capital -type project additions, in terms of dollars in fiscal year 2023, are shown in
the following table:
Floodwall Pump 92 Rehab $1,280,270
Buckner Land Bridge 1,577,434
S. 2e/25t" Street Improvements (Construction in Progress) 1,777,667
Floodwall Flap Gates (Construction in Progress) 1,068,047
City Block Public Space/Parking Lot (Construction in Progress) 884,876
Riverfront Infrastructure Improvements (Construction in Progress) 858,824
Refuse Trucks (3) 813,600
Fleet vehicles (11) 526,106
Civic Center Design/Construction (Construction in Progress) 434,923
Pickleball Courts (Construction in Progress) 355,254
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
-25-
Governmental Activities
Business -Tyne
Activities
Total Primary Government
2023
2022
2023
2022
2023
2022
Land
$ 10,241,330
$ 10,147,330
$ 68,886
$ 68,886
$ 10,310,216 $
10,216,216
Land improvements
20,972,740
13,773,200
-
-
20,972,740
13,773,200
Construction in
progress
8,421,941
10,549,864
6,330
-
8,428,271
10,549,864
Buildings and
improvements
7,320,623
7,519,260
97,652
173,363
7,418,275
7,692,623
Infrastructure
21,854,816
20,414,278
-
-
21,854,816
20,414,278
Equipment
3,293,838
3,350,194
956,292
1,024,771
4,250,130
4,374,965
Furnishings and
fixtures
54,029
42,005
-
-
54,029
42,005
Vehicles
2,995,308
3,307,844
1,306,246
881,039
4,301,554
4,188,883
SBITA
2,368,352
-
169,033
2,537,385
-
TOTALS
$ 77,522,977
$ 69,103,975
$ 2,604,439
$ 2,148,059
$ 80,127,416
$71,252,034
-25-
Additional information on City capital assets can be found in Note 3 in the notes to financial statements
on pages 69-71.
B. Long -Term Debt
At year-end, the City had $39,674,552 in outstanding bonds and notes payable, compared to
$40,960,364 at June 30, 2022 with maturities extending through 2040.
Governmental Activities
2023 2022
Convention Center Renovation — 2008
$976,837
$1,141,096
Public Pool Renovations — 2013A
500,000
575,000
Economic Development— 2013B
1,125,000
1,290,000
Refinanced Public Projects — 2014A
2,570,000
2,910,000
Refinanced Police/Firefighter Pension Fund Liability — 2014B
1,080,000
1,540,000
CFSB Agreement - 2017
2,716,997
2,766,307
Riverfront and 911 Equipment — 2018A
2,070,000
2,235,000
Kentucky Infrastructure Authority — 2018
4,019,377
2,805,908
Refinanced KLC and Floodwall Rehabilitation — 2018B
1,000,000
1,365,000
Recreation Facility — 2020A
20,520,000
20,520,000
Refinanced Convention Center — 2020B
1,560,000
2,050,000
Refinanced Murray State University Agreement — 2022A
1,220,205
1,330,614
Net Premiums/Discounts
316.136
431.439
TOTALS39.674.552
40.960.364
The City had no new debt issues during FY2023.
Debt issues prior to July 1, 2022 are described below:
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.
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 #2.
-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.
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 $297,991,641. 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 2023, 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 74-78.
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
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.
-27-
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 relocation of the Senior Citizens Center, which is jointly
housed with the Parks & Recreation Department at 1400 H.C. Mathis Drive, and (3) renovation of the
Robert Cherry Civic Center, which 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
quality, has led to the City tackling individual projects as funding allows. In recent years the City has
received 3 FEMA Disaster Relief funded projects, one of which was utilized to partially fund the
replacement of a dilapidated bridge that has been affected by flooding and severe weather events. The
City also appropriated $4 million in ARPA funds to stormwater improvements. A portion of the
-28-
ABPA funds were 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, 2023
THIS PAGE INTENTIONALLY LEFT BLANK
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, 2023
See accompanying notes to the basic financial statements.
-30-
Component
Primary Government
Unit
Paducah
Governmental
Business -type
Water Works
Activities
Activities
Total
Authority
$ 47,061,991
$ 3,434,011 $
50,496,002
$ 1,620,808
18,153,001
-
18,153,001
-
1,203,030
-
1,203,030
-
11,395,661
611,771
12,007,432
1,748,086
595,287
-
595,287
69,128
1,876,257
-
1,876,257
-
25,602
-
25,602
-
7,045,116
-
7,045,116
-
-
-
-
703,717
(589,148)
589,148
-
-
366,666
17,564
384,230
2,236,924
2,065,706
-
2,065,706
260,317
-
-
-
191,898
89,199,169
4,652,494
93,851,663
6,830,878
3,193,967
-
3,193,967
-
2,660,956
-
2,660,956
-
18,663,271
75,216
18,738,487
1,565,236
58,859,706
2,529,223
61,388,929
71,177,927
-
-
-
6,761,915
-
-
-
296,179
83,377,900
2,604,439
85,982,339
79,801,257
172,577,069
7,256,933
179,834,002
86,632,135
11,308,024
374,174
11,682,198
2,260,050
6,524,176
350,766
6,874,942
1,384,822
88,196
-
88,196
235
17,920,396
724,940
18,645,336
3,645,107
See accompanying notes to the basic financial statements.
-30-
Component
LIABILITIES Primary Government Unit
NET POSITION
Net invested in capital assets
Restricted for:
Housing and program projects
Capital projects & infrastructure
Public safety
Debt service
Unrestricted
TOTAL NET POSITION
64,717,247
2,432,284
67,149,531
2,504,283
Paducah
2,511,810
Governmental
Business -type
1,056,931
Water Works
Current Liabilities:
Activities
Activities
Total
Authority
Voucher and accounts payable
3,236,970
267,292
3,504,262
1,179,651
Accrued payables
1,382,903
153,418
1,536,321
939,079
Unearned revenue
28,300
186
28,486
-
Accrued compensated absences
1,351,916
97,965
1,449,881
377,105
Accrued interest
362,069
-
362,069
45,789
Notes payable due within one year
526,780
-
526,780
722,148
Bonds payable due within one year
2,195,000
-
2,195,000
60,000
SBITA payable due within one year
422,022
47,154
469,176
74,670
Replacement reserve
-
-
-
245,700
Other current liabilities
-
-
-
188,322
Total current liabilities
9,505,960
566,015
10,071,975
3,832,464
Noncurrent Liabilities:
Accrued compensated absences
1,370,117
7,790
1,377,907
-
Landfill post -closure costs
-
2,062,500
2,062,500
-
Net pension liability
70,245,990
3,023,778
73,269,768
8,713,635
Net other post employment benefits liability
18,797,131
825,421
19,622,552
2,378,380
SBITA payables
2,050,680
125,001
2,175,681
5,303
Notes payable
8,406,636
-
8,406,636
4,332,642
Bonds payable
28,546,136
-
28,546,136
-
Total noncurrent liabilities
129,416,690
6,044,490
135,461,180
15,429,960
Total liabilities
138,922,650
6,610,505
145,533,155
19,262,424
Deferred Inflows of Resources
Deferred revenues - leases
3,146,715
-
3,146,715
68,851
Deferred revenues - grants
2,226,917
-
2,226,917
-
Deferred revenues - property taxes
6,788,049
-
6,788,049
-
Deferred pension related inflows
1,586,741
99,549
1,686,290
1,715,665
Deferred OPEB related inflows
5,706,361
333,343
6,039,704
1,451,859
Total deferred inflows of resources
19,454,783
432,892
19,887,675
3,236,375
NET POSITION
Net invested in capital assets
Restricted for:
Housing and program projects
Capital projects & infrastructure
Public safety
Debt service
Unrestricted
TOTAL NET POSITION
64,717,247
2,432,284
67,149,531
2,504,283
7,527
2,511,810
1,056,931
-
1,056,931
200,934
-
200,934
(36,359,363)
(1,501,335)
(37,860,698)
$ 32,120,032
$ 938,476
$ 33,058,508
See accompanying notes to the basic financial statements.
-31-
67,547,615
37,550
193,278
$ 67,778,443
CITY OF PADUCAH, KENTUCKY
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2023
FUNCTIONS/PROGRAMS
Primary Government:
Governmental activities:
General government
Public safety
Public service
Parks and recreation
Planning and development
Interest on long-term debt
Total governmental activities (See Note 1)
Business -type activities:
Solid Waste
Section Eight Housing
Transient Boat Dock
Total business -type activities
TOTAL PRIMARY GOVERNMENT
Component Unit:
Paducah Water Works Authority
TOTAL COMPONENT UNITS
Exhibit 2
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
Program Revenues
Operating
Capital
Charges for Grants and
Grants and
Expenses
Services Contributions
Contributions
$
11,972,825
$ 3,387,707 $ 527,517
$ 3,000
26,348,079
433,823 1,227,089
963,656
7,431,587
988,555 265,666
1,575,715
3,503,495
151,604 25,000
22,000
5,845,326
- 7,032,890
55,480
483,950
- 103,822
-
55,585,262
4,961,689 9,181,984
2,619,851
5,482,827
4,822,064 103,345
-
2,250,727
100 2,056,885
-
122,652
133,436 -
-
7,856,206
4,955,600 2,160,230
-
$
63,441,468
$ 9,917,289 $ 11,342,214
$ 2,619,851
$
12,211,976
$ 15,357,820 $ -
$ 1,436,176
$
12,211,976
$ 15,357,820 $ -
$ 1,436,176
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
Primary Government
Component Unit
Governmental
Business -type
Paducah Water
Activities
Activities
Total
Works Authority
$ (8,054,601)
$ -
$ (8,054,601)
$ -
(23,723,511)
-
(23,723,511)
-
(4,601,651)
-
(4,601,651)
-
(3,304,891)
-
(3,304,891)
-
1,243,044
-
1,243,044
-
(380,128)
-
(380,128)
-
(38,821,738)
-
(38,821,738)
-
-
(557,418)
(557,418)
-
-
(193,742)
(193,742)
-
-
10,784
10,784
-
-
(740,376)
(740,376)
-
(38,821,738)
(740,376)
(39,562,114)
-
-
-
-
4,582,020
-
-
-
4,582,020
6,575,885
-
6,575,885
-
6,331,216
-
6,331,216
-
5,375,589
-
5,375,589
-
25,904,591
-
25,904,591
-
285,816
-
285,816
-
638,320
-
638,320
-
996,544
-
996,544
-
406,141
-
406,141
-
1,839,464
-
1,839,464
-
380,913
-
380,913
-
2,667,976
136,363
2,804,339
319,787
70,118
61,557
131,675
34,372
51,472,573
197,920
51,670,493
354,159
389,039
(389,039)
-
-
51,861,612
(191,119)
51,670,493
354,159
13,039,874
(931,495)
12,108,379
4,936,179
19,080,158
1,869,971
20,950,129
62,842,264
$ 32,120,032
$ 938,476
$ 33,058,508
$ 67,778,443
-33-
THIS PAGE INTENTIONALLY LEFT BLANK
CITY OF PADUCAH, KENTUCKY
BASIC FINANCIAL STATEMENTS
FUND FINANCIAL STATEMENTS
ANNUAL COMPREHENSIVE FINANCIAL REPORT
YEAR ENDED JUNE 30, 2023
THIS PAGE INTENTIONALLY LEFT BLANK
CITY OF PADUCAH, KENTUCKY
BALANCE SHEET
GOVERNMENTAL FUNDS
JUNE 30, 2023
General
Assets
Cash and cash equivalents
$
25,046,559
Investments
-
Receivables:
Accounts
9,666,756
Leases
3,122,107
Grants
162,873
Property taxes (net of
allowances for uncollectibles)
7,085,116
Inventory
-
Prepaid items
-
Due from other funds
-
Total assets
$
45,083,411
Liabilities
Voucher and accounts payable
$
351,575
Accrued payroll and payroll taxes
1,190,713
Due to other funds
1,576,337
Due to other taxing agencies
92,931
Unearned revenue - other
-
Accrued compensated absences
196,639
Total liabilities
3,408,195
Deferred Inflows of Resources
Deferred inflow - leases
3,016,938
Unavailable revenue - grants
2,226,917
Unavailable revenue - property taxes
7,037,417
Total deferred inflows of resources
12,281,272
Fund Balances:
Nonspendable:
Inventory
-
Restricted for:
Highways and streets
-
Public safety
-
Program purposes
-
Capital improvements
-
Committed for:
Capital improvements
-
Pension reserve
670,365
Assigned for:
Public safety
-
Debt service
-
Capital improvements
-
Unassigned:
General Fund
28,723,579
Total fund balances
29,393,944
TOTAL LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
$
45,083,411
See accompanying notes to the basic financial statements.
-34-
Special Revenue
Opioid
Investment Settlement
Exhibit 3
Bond
$ 2,401,233 $ 510,070 $ 21,130
- - 18,153,001
- 1,994,213 -
1,576,337 - -
$3,977,570 $ 2,504,283 $18,174,131
$ - $ - $ 113,010
- 1,928,264 -
- 1,928,264 113,010
- 576,019 -
- - 18,061,121
3,977,570 - -
3,977,570 576,019 18,061,121
General
Debt
Nonmajor
Total
Capital
Service
Governmental
Governmental
Improvements
Fund
Funds
Funds
$ 8,064,452
$1,798,041
$ 1,750,876
$ 39,592,361
-
-
-
18,153,001
134,499
-
392,761
12,188,229
-
134,136
-
3,256,243
1,713,384
-
-
1,876,257
-
-
-
7,085,116
295,989
-
-
295,989
-
-
-
1,576,337
$ 10,208,324
$1,932,177
$ 2,143,637
$ 84,023,533
$ 2,018,794
$ -
$ 483,867
$ 2,967,246
-
-
74,788
1,265,501
-
-
-
1,576,337
-
-
-
92,931
28,300
-
-
1,956,564
-
-
-
196,639
2,047,094
-
558,655
8,055,218
-
129,777
-
3,146,715
2,226,917
7,037,417
129,777 - 12,411,049
295,989 - - 295,989
- - 1,056,931 1,056,931
- - 200,934 200,934
- - - 576,019
- - - 18,061,121
- - - 3,977,570
- - - 670,365
- - 327,117 327,117
- 1,802,400 - 1,802,400
7,865,241 - - 7,865,241
- - - 28,723,579
8,161,230 1,802,400 1,584,982 63,557,266
$ 10,208,324 $1,932,177 $ 2,143,637 $ 84,023,533
-35-
Exhibit 4
CITY OF PADUCAH, KENTUCKY
RECONCILIATION OF THE GOVERNMENTAL FUNDS
BALANCE SHEET TO STATEMENT OF NET POSITION
JUNE 30, 2023
Total fund balance - total governmental fund, $ 63,557,266
Amounts reported for governmental activities in the Statement
of Net Position are different because:
Delinqueni 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. 3,496,997
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. 25,602
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. 77,522,977
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
88,196
Deferred OPEB related inflows
(5,706,361)
Deferred OPEB related outflows
6,524,176
Deferred pension related inflows
(1,586,741)
Deferred pension related outflows
11,308,024 10,627,294
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, 2023
Unearned revenues from settlement are not available in the current
period and, therefore, are deferred in the governmental funds balance
sheet.
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 ($131,190,375) 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 $ 3,143,802
Due after one year 128,046,573
Internal service funds are used by managementto charge the costs of
certain activities, such as insurance and fleet management, to
individual funds. The assets and liabilities of the Internal Service
Funds (net of amount allocated to business -type activities) not
included in other reconciling items are:
Current assets $ 9,713,447
Current liabilities (322,385)
Net amount allocated to
business -type activities (589,148)
NET POSITION OF GOVERNMENTAL ACTIVITIES
See accompanying notes to the basic financial statements
-37-
Exhibit 4
(Continued)
$ 1,928,264
(2,497,206)
(362,069)
(131,190,375)
8,801,914
$ 32,120,032
Exhibit 5
CITY OF PADUCAH, KENTUCKY
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2023
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
Interest requirement
Total expenditures
Excess (deficiency) of revenues over expenditures
Other Financing Sources (Uses):
Issuance of notes payable
Subscription -based information technology arrangements
Transfers in
Transfers out
Total other financing sources (uses)
Net change in fund balances
Fund balances - beginning
Fund balances - ending
8,800,786 - -
23,076,049 - -
5,810,517 - -
3,316,436 - -
- 1,038,466 -
454,096 - -
448,637 - -
26,777 - -
41,933,298 1,038,466 -
7,720,047
Special Revenue
2,921,340
Opioid
General
Investment
Settlement
Fund
Fund
Fund
$ 8,895,878-
(152,552) 576,019
32,227,758
6,521,531
-
795,017
-
-
5,095,654
-
-
1,530,855
-
-
1,108,183
-
576,019
49,653,345
6,521,531
576,019
8,800,786 - -
23,076,049 - -
5,810,517 - -
3,316,436 - -
- 1,038,466 -
454,096 - -
448,637 - -
26,777 - -
41,933,298 1,038,466 -
7,720,047
5,483,065 576,019
2,921,340
- -
587,023
58,831 -
(6,771,947)
(5,694,448) -
(3,263,584)
(5,635,617) -
4,456,463
(152,552) 576,019
24,937,481 4,130,122 -
$ 29,393,944 $ 3,977,570 $ 576,019
See accompanying notes to the basic financial statements.
-38-
-39-
General
Debt
Nonmajor
Total
Bond
Capital
Service
Governmental
Governmental
Fund
Improvements
Fund
Funds
Funds
2,162,774
$ 11,058,652
-
-
-
-
38,749,289
-
-
-
388,473
1,183,490
-
48,160
655,076
527,517
1,230,753
-
1,981,497
-
244,041
7,321,192
704,774
-
73,942
73,760
2,383,331
-
1,826,529
103,822
680,703
4,295,256
704,774
3,856,186
832,840
4,077,268
66,221,963
-
-
-
-
8,800,786
-
-
-
2,149,234
25,225,283
-
-
-
1,509,715
7,320,232
-
-
-
-
3,316,436
2,531,650
-
-
2,036,964
5,607,080
-
-
-
-
454,096
-
12,302,819
-
-
12,302,819
-
-
2,383,969
-
2,832,606
-
-
1,085,319
-
1,112,096
2,531,650
12,302,819
3,469,288
5,695,913
66,971,434
(1,826,876)
(8,446,633)
(2,636,448)
(1,618,645)
(749,471)
-
1,213,469
-
-
1,213,469
-
-
-
-
2,921,340
-
7,550,049
2,812,083
2,068,227
13,076,213
-
(35,749)
-
(187,858)
(12,690,002)
-
8,727,769
2,812,083
1,880,369
4,521,020
(1,826,876)
281,136
175,635
261,724
3,771,549
19,887,997
7,880,094
1,626,765
1,323,258
59,785,717
$18,061,121
$ 8,161,230
$ 1,802,400
$ 1,584,982
$ 63,557,266
-39-
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, 2023
Net change in fund balances - total governmental funds
Amounts reported for governmental activities in the Statement
of Activities are different because:
Opioid settlement revenues are deferred in the governmental funds until available.
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 $538,188.
Collections on long-term notes receivables and related interest receivable are
revenues in the government funds when collected.
Governmental funds report the net effect of assets transferred from business type
funds as expenditures in the fund statements. In the government -wide statements,
these assets are capitalized and depreciated over their estimated remaining useful
live.
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 and subscription based information technology
leases provides current financial resources and is reported as an other financing
source in governmental funds.
Only the loss on the disposal of capital assets and abandoned capital projects are
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 and projects disposed.
See accompanying notes to the basic financial statements.
-40-
Exhibit 6
3,771,549
1,928,264
12,790,865
(294,314)
69,405
134,950
(4,134,809)
(138,778)
(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, 2023
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 $870,171.
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
$ 228,071
Net of amount allocated to
business -type activities
14,794
Capital Outlays
(538,188)
Depreciation expense
870,171
CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES
See accompanying notes to the basic financial statements.
-41-
(4,277,075)
2,832,615
17,038
(306,283)
71,599
574,848
$ 13,039,874
CITY OF PADUCAH, KENTUCKY
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE - BUDGET AND ACTUAL
GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2023
Revenues:
Taxes:
Real and personal,
current year
Real and personal,
prior year
Franchise
Bank taxes
In lieu of tax payment
Penalty, interest and
advertising
Paducah Junior College
tax collections
Total taxes
Licenses:
Business licenses
Employee earnings
Cable franchise fees
Penalties
Alcoholic beverages
Insurance premium tax
Building permits
Electrical permits
Zoning change fees
Miscellaneous building
and electrical fees
Payroll tax sharing with County
Total licenses
Charges for services:
Tax collection fee
Administrative charge
Base court revenue
Recreation fees
Total charges for services
Budgeted Amounts
Original Final
$ 6,863,500
25,000
220,000
412,000
302,000
60,000
$ 6,863,500
25,000
220,000
412,000
302,000
60,000
Actual
Amounts
$ 7,341,215
113,086
285,816
406,141
306,628
74,239
368,753
Exhibit 7
Variance with
Final Budget
Positive
(Negative)
$ 477,715
88,086
65,816
(5,859)
4,628
14,239
368,753
7,882,500
7,882,500
8,895,878
1,013,378
4,500,000
4,500,000
5,375,589
875,589
18,000,000
18,000,000
19,383,060
1,383,060
383,000
383,000
366,433
(16,567)
225,000
225,000
418,281
193,281
157,000
157,000
191,680
34,680
6,100,000
6,100,000
6,331,216
231,216
145,000
145,000
130,948
(14,052)
45,000
45,000
51,093
6,093
9,000
9,000
12,725
3,725
4,000
4,000
3,500
(500)
(26,000)
(26,000)
(36,767)
(10,767)
29,542,000
29,542,000
32,227,758
2,685,758
224,000
224,000
241,031
17,031
362,220
362,220
364,720
2,500
35,000
35,000
37,662
2,662
80,500
80,500
151,604
71,104
701,720
701,720
795,017
93,297
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, 2023
Grants:
Police State Incentive
Fire State Incentive
Police supplemental grants
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
Total finance
Budgeted Amounts
Original Final
$ 468,000 $ 468,000 $
413,000 413,000
279,000 279,000
1,160,000
150,500
1,160,000
150,500
Exhibit 7
(Continued)
Variance with
Final Budget
Actual Positive
Amounts (Negative)
490,056 $ 22,056
401,000 (12,000)
282,413 3,413
3,922,185 3,922,185
5,095,654 3,935,654
1,530,855 1,380,355
758,160
758,160
700,507
114,985
114,985
106,623
35,075
35,075
35,050
178,000
190,140
266,003
1,086,220
1,098,360
1,108,183
40,522,940
40,535,080
49,653,345
(57,653)
(8,362)
(25)
75,863
9,823
9,118,265
279,772
278,252
272,593
5,659
979,598
913,273
869,988
43,285
454,898
470,623
447,338
23,285
175,000
300,500
280,794
19,706
945,000
738,562
772,699
(34,137)
5,775
5,875
4,918
957
5,000
10,500
8,542
1,958
2,845,043
2,717,585
2,656,872
60,713
340,523
350,983
347,840
3,143
460,941
476,731
464,152
12,579
515,149
513,494
507,607
5,887
1,316,613
1,341,208
1,319,599
21,609
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, 2023
General government:
Planning:
Administration
Planning
Total planning
Radio and rental property
Human rights
Information systems
Human resources/risk management
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
Budgeted Amounts
Original Final
Actual
Amounts
Exhibit 7
(Continued)
Variance with
Final Budget
Positive
(Negative)
$ 256,452
$ 268,657
$ 256,150
$ 12,507
556,319
534,114
391,322
142,792
812,771
802,771
647,472
155,299
182,600
182,600
136,283
46,317
16,971
16,971
10,820
6,151
1,244,749
1,109,494
3,524,572
(2,415,078)
529,598
532,598
505,168
27,430
6,948,345
6,703,227
8,800,786
(2,097,559)
1,486,717
1,480,877
1,461,102
19,775
8,657,637
8,620,302
8,349,524
270,778
2,541,867
2,579,207
2,500,403
78,804
334,635
339,805
326,407
13,398
13,020,856
13,020,191
12,637,436
382,755
762,560
766,610
731,996
34,614
8,391,311
8,307,341
8,232,311
75,030
1,372,088
1,356,043
1,287,837
68,206
198,936
203,606
186,469
17,137
10,724,895
10,633,600
10,438,613
194,987
23,745,751
23,653,791
23,076,049
577,742
2,586,426
2,470,846
2,308,007
162,839
810,000
810,000
785,124
24,876
1,407,822
1,291,3 82
1,112,683
178,699
Total public works 4,804,248 4,572,228 4,205,814 366,414
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, 2023
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
Total intergovernmental and other
Debt service
Principal requirement
Interest requirement
Total debt service
Total expenditures
Excess (deficiency) of revenues
over expenditures
Other financing sources (uses):
Long-term debt issued
Transfers in
Transfers out
Budgeted Amounts
Original Final
Actual
Amounts
Exhibit 7
(Continued)
Variance with
Final Budget
Positive
(Negative)
$ 787,729
$ 846,159
$ 821,453 $
24,706
954,977
936,547
783,250
153,297
1,742,706
1,782,706
1,604,703
178,003
6,546,954
6,354,934
5,810,517
544,417
722,908
743,338
759,768
(16,430)
1,793,030
1,553,970
1,475,141
78,829
1,224,867
1,139,772
1,081,527
58,245
3,740,805
3,437,080
3,316,436
120,644
85,370
85,370 85,343 27
- 368,753 (368,753)
85,370 85,370 454,096 (368,726)
41,067,225 40,234,402
448,637 (448,637)
26,777 (26,777)
475,414 (475,414)
41,933,298 (1,698,896)
(544,285) 300,678 7,720,047 7,419,369
- - 2,921,340 2,921,340
515,700 517,612 587,023 69,411
(2,505,630) (3,377,495) (6,771,947) (3,394,452)
Total other financing sources (uses) (1,989,930) (2,859,883) (3,263,584) (403,701)
Net change in fund balance
Fund balance - beginning
Fund balance - ending
(2,534,215) (2,559,205) 4,456,463 7,015,668
24,937,481 24,937,481 24,937,481 -
$ 22,403,266 $ 22,378,276 $ 29,393,944 $ 7,015,668
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, 2023
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
Total other financing sources (uses)
Net change in fund balance
Fund balance - beginning
Fund balance - ending
Budgeted Amounts
Original Final
Actual
Amounts
Exhibit 8
Variance with
Final Budget
Positive
(Negative)
$ 5,800,000
$ 5,800,000
$ 6,521,531 $
721,531
5,800,000
5,800,000
6,521,531
721,531
5,800,000
5,800,000
6,521,531
721,531
1,030,730
1,055,730
1,038,468
17,262
1,030,730
1,055,730
1,038,468
17,262
4,769,270
4,744,270
5,483,063
738,793
-
-
58,831
58,831
-
-
58,831
58,831
4,769,270
4,744,270
5,541,894
797,624
4,130,122 4,130,122 4,130,122
$ 8,899,392 $ 8,874,392 $ 9,672,016 $ 797,624
See accompanying notes to the basic financial statements.
-46-
CITY OF PADUCAH, KENTUCKY
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE - BUDGET AND ACTUAL
OPIOID SETTLEMENT FUND
FOR THE YEAR ENDED JUNE 30, 2023
Revenues:
Grants
Interest
Other
Total revenues
Expenditures:
Planning and development
Excess (deficiency) of revenues over
expenditures
Other Financing Sources (Uses):
Operating transfers in
Operating transfers out
Total other financing sources (uses)
Net change in fund balance
Fund balance, July 1, 2022
FUND BALANCE, JUNE 30, 2023
Exhibit 9
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
576,019 576,019
576,019 576,019
See accompanying notes to the basic financial statements.
-47-
576,019 576,019
576,019
$ 576,019
$ 576,019
Exhibit 10
CITY OF PADUCAH, KENTUCKY
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
JUNE 30, 2023
See accompanying notes to the basic financial statements.
-48-
Governmental
Business -type Activities
Activities
ASSETS
Nonmajor
Internal
Solid
Enterprise
Service
Current Assets:
Waste
Funds
Totals
Funds
Cash and cash equivalents $
2,992,542
$ 441,469
$ 3,434,011
$ 7,469,630
Investments
-
-
-
-
Accounts receivable
573,419
38,352
611,771
107,434
Prepaid expenses
-
-
-
2,065,706
Inventory
-
17,564
17,564
70,677
Total current assets
3,565,961
497,385
4,063,346
9,713,447
Noncurrent Assets:
Net capital assets:
Land and construction in progress
75,216
-
75,216
-
Depreciable capital assets
2,527,896
1,327
2,529,223
3,160,639
Total noncurrent assets
2,603,112
1,327
2,604,439
3,160,639
Total assets
6,169,073
498,712
6,667,785
12,874,086
Deferred Outflows of Resources:
Deferred pension related outflows
344,764
29,410
374,174
132,119
Deferred OPEB related outflows
305,353
45,413
350,766
94,622
Total deferred outflows of resources
650,117
74,823
724,940
226,741
LIABILITIES
Current Liabilities:
Voucher and accounts payable
174,023
93,269
267,292
269,724
Accrued payroll and payroll taxes
65,675
87,743
153,418
24,470
Accrued compensated absences
94,565
3,400
97,965
28,191
Unearned revenue
-
186
186
-
Other current liabilities
47,154
-
47,154
-
Total current liabilities
381,417
184,598
566,015
322,385
Noncurrent Liabilities:
Net pension liability
2,822,779
200,999
3,023,778
834,214
Net other post employment benefits liability
770,553
54,868
825,421
227,721
Landfill post -closure costs
2,062,500
-
2,062,500
-
SBITA liability
125,001
-
125,001
-
Accrued compensated absences
-
7,790
7,790
21,544
Total noncurrent liabilities
5,780,833
263,657
6,044,490
1,083,479
Total liabilities
6,162,250
448,255
6,610,505
1,405,864
Deferred Inflows of Resources
Deferred pension related inflows
72,210
27,339
99,549
21,340
Deferred OPEB related inflows
303,726
29,617
333,343
89,760
Total deferred inflows of resources
375,936
56,956
432,892
111,100
NET POSITION
Net invested in capital assets
2,430,957
1,327
2,432,284
3,160,639
Restricted - Housing
-
7,527
7,527
-
Unrestricted
(2,149,953)
59,470
(2,090,483)
8,423,224
TOTAL NET POSITION $
281,004
$ 68,324
349,328
$ 11,583,863
Reconciliation to government -wide statements
of net position:
Adjustment to reflect the consolidation of Internal Service Funds'
activities related to Enterprise Funds
589,148
NET POSITION OF BUSINESS -TYPE ACTIVITIES
$ 938,476
See accompanying notes to the basic financial statements.
-48-
Exhibit 11
CITY OF PADUCAH, KENTUCKY
STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN NET POSITION
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2023
See accompanying notes to the basic financial statements.
-49-
Governmental
Business -type Activities
Activities
Nonmaj or
Internal
Solid
Enterprise
Service
Operating Revenues:
Waste
Funds
Totals
Funds
Charges for services - internal
$ -
$ 133,436
$ 133,436
$ 6,203,895
Charges for services - external
4,816,742
-
4,816,742
253,970
Miscellaneous
5,322
100
5,422
-
Total operating revenues
4,822,064
133,536
4,955,600
6,457,865
Operating Expenses:
Cost of sales and service
4,748,881
2,371,924
7,120,805
5,734,027
Depreciation and amortization
691,898
1,457
693,355
870,171
Total operating expenses
5,440,779
2,373,381
7,814,160
6,604,198
Operating income (loss)
(618,715)
(2,239,845)
(2,858,560)
(146,333)
Nonoperating Revenues (Expenses):
Grants - program purpose
103,345
2,056,885
2,160,230
-
Interest and investment income
134,149
2,214
136,363
284,645
Gain (loss) on disposal of property
and equipment
61,557
-
61,557
64,569
Interest expense
(4,889)
-
(4,889)
-
Total nonoperating revenues (expenses)
294,162
2,059,099
2,353,261
349,214
Income (loss) before contributions and
transfers
(324,553)
(180,746)
(505,299)
202,881
Contributions and Transfers:
Transfers in
-
367
367
100,890
Transfers out
(342,363)
(69,406)
(411,769)
(75,700)
Total contributions and transfers
(342,363)
(69,039)
(411,402)
25,190
Change in net position
(666,916)
(249,785)
(916,701)
228,071
Net position - beginning
947,920
318,109
11,355,792
Net position - ending
$ 281,004
$ 68,324
$11,583,863
Reconciliation to government -wide statements of net position:
Adjustment to reflect the consolidation of Internal Service Funds'
activities related to Enterprise Funds
(14,794)
CHANGE IN NET POSITION OF BUSINESS -TYPE ACTIVITIES
$ (931,495)
See accompanying notes to the basic financial statements.
-49-
CITY OF PADUCAH, KENTUCKY
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2023
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:
Proceeds from debt issue
Principal paid on debt
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:
Interest on cash and investments
Net cash provided (used) by investing
activities
equivalents
Cash and cash equivalents, July 1, 2022
CASH AND CASH EQUIVALENTS,
JUNE 30, 2023
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.
-50-
Exhibit 12
$ 2,992,542 $ 441,469 $ 3,434,011 $ 7,469,630
$ (618,715) $ (2,239,843) $ (2,858,558) $ (146,333)
691,898
1,457
693,355
Governmental
Business -type Activities
Activities
(16,883)
Nonmajor
-
Internal
Solid
Enterprise
-
Service
Waste
Funds
Totals
Funds
$ 4,765,359
$ 133,436
$ 4,898,795
$ -
-
-
-
6,451,785
(2,935,143)
-
(2,935,143)
(1,728,085)
(781,909)
(21,038)
(802,947)
(491,500)
-
-
-
(2,983,131)
(689,002)
-
(689,002)
-
5,322
100
5,422
-
-
(2,088,082)
(2,088,082)
(1,964,948)
364,627
(1,975,584)
(1,610,957)
(715,879)
103,345
2,018,533
2,121,878
-
-
367
367
100,890
(342,363)
(69,406)
(411,769)
(75,700)
(239,018)
1,949,494
1,710,476
25,190
217,328
-
217,328
-
(45,173)
(45,173)
-
(1,219,140)
-
(1,219,140)
(538,188)
56,665
69,406
126,071
89,985
(990,320)
69,406
(920,914)
(448,203)
134,149
2,214
136,363
284,645
134,149
2,214
136,363
284,645
(730,562)
45,530
(685,032)
(854,247)
z 771 1 na
2Q5 QIQ
a 1 1 Q (lag
R 21?2 R77
$ 2,992,542 $ 441,469 $ 3,434,011 $ 7,469,630
$ (618,715) $ (2,239,843) $ (2,858,558) $ (146,333)
691,898
1,457
693,355
870,171
(16,883)
-
(16,883)
(6,080)
-
-
-
(1,452,500)
-
(4,355)
(4,355)
(6,351)
(34,500)
-
(34,500)
-
183,021
129,570
312,591
(49,641)
116,931
18,110
135,041
11,110
42,875
119,477
162,352
63,745
$ 364,627 $(1,975,584) $ (1,610,957) $ (715,879)
Exhibit 13
CITY OF PADUCAH, KENTUCKY
STATEMENT OF NET POSITION
FIDUCIARY FUNDS
JUNE 30, 2023
LIABILITIES
Voucher and accounts payable 10,497 -
Payroll taxes and withholdings
payable - -
Total liabilities 10,497 -
NET POSITION
Net position restricted for pensions
Held in trust for other purposes
$ 3,682,960
See accompanying notes to the basic financial statements
-51-
$ 1,110,905
Primary Government
Private -
ASSETS
Pension
purpose
Funds
Trusts
Cash and cash equivalents
$ 1,206
$ 20,204
Receivables:
Interest
3,962
-
Other
-
-
Investments at fair value
Money market funds
156,641
-
Common stock
1,460,541
-
Mutual funds
2,071,107
1,090,701
Total assets
3,693,457
1,110,905
LIABILITIES
Voucher and accounts payable 10,497 -
Payroll taxes and withholdings
payable - -
Total liabilities 10,497 -
NET POSITION
Net position restricted for pensions
Held in trust for other purposes
$ 3,682,960
See accompanying notes to the basic financial statements
-51-
$ 1,110,905
CITY OF PADUCAH, KENTUCKY
STATEMENT OF CHANGES IN NET POSITION
FIDUCIARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2023
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.
-52-
Exhibit 14
Private -
Pension purpose
Funds Trusts
$ 263,595 $ -
- 5,835
263,595 5,835
310,144
84,164
65,896
35,715
394,308
101,611
657,903
107,446
842,634
-
-
47,926
41,035
13,803
883,669
61,729
(225,766)
45,717
3,908,726
1,065,188
$ 3,682,960 $ 1,110,905
CITY OF PADUCAH, KENTUCKY
NOTES TO THE FINANCIAL STATEMENTS
ANNUAL COMPREHENSIVE FINANCIAL REPORT
YEAR ENDED JUNE 30, 2023
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
Note 1— Summary of Significant Accounting Policies:
General Statement
The City of Paducah (City) complies with generally accepted accounting principles (GAAP) as applied to
governmental units. This requires the use of the accrual basis of accounting for government -wide
financial statements and proprietary funds financial statements and a modified accrual basis of accounting
for the governmental funds financial statements. The Governmental Accounting Standards Board (GASB)
is the accepted standard-setting body for establishing governmental accounting and financial reporting
principles. The financial reporting entity, basis of accounting, and other significant policies employed by
the City are summarized as follows:
Financial Reporting Entity
The City operates under a City Manager form of government. The Board of Commissioners consists of a
Mayor and four Commissioners elected at large by the citizens on a non-partisan basis. As required by
generally accepted accounting principles, the financial statements of the reporting entity include those of
the City of Paducah (the primary government) and its component units. The component units discussed
below are included in the City's reporting entity because of the significance of their operational or
financial relationships with the City.
Blended Component Units
Police and Firefighters' Pension Fund — This retirement fund was established for the benefit of the
police and firemen of the City. It is administered by a Board of Trustees consisting of the Mayor, City
Finance Director and representatives of the Police and Fire Departments. The Board is authorized to
establish benefit levels and to approve actuarial assumptions used in the determination of contribution
levels. The pension fund is reported as a fiduciary fund and does not issue separate financial statements.
Discretely Presented Component Units
The component unit column in the 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)
-53-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
Note 1— Summary of Significant Accounting Policies:
Related Organizations
City officials are also responsible for appointing the members of boards of other organizations; but, the
City's accountability for these organizations do not extend beyond appointing authority. The
organizations listed below are notable related organizations which have not been included as component
units in the City's report.
Transit Authority of the City of Paducah — The Transit Authority is a legally separate entity that
provides for transit operations both within and outside the City. The Transit Authority is not financially
accountable to the City.
Paducah Housing Authority — The Paducah Housing Authority (PHA) is a legally separate entity that
provides for construction, operation, and management of low-income housing projects within the City.
PHA is a legally separate entity and is not financially accountable to the City.
Paducah Power System — The Paducah Power System (PPS) is a legally separate entity that provides
electric utilities to residents in the Paducah area. PPS is not financially accountable to the City.
Joint Sewer Agency — As of July 1, 1999, the assets and liabilities of the Wastewater/Stormwater Fund
were transferred to the Paducah -McCracken County Joint Sewer Agency pursuant to a municipal order
dated June 29, 1999. The Paducah -McCracken County Joint Sewer Agency is a legally separate entity
and is not financially accountable to the City.
Forest Hills Village, Inc. — The Corporation's purpose is to manage City of Paducah properties known
as "Forest Hills Housing Development". The City and Corporation have a lease agreement detailing
the terms and conditions of operations. Forest Hills Village, Inc. is a legally separate entity and is not
financially accountable to the City.
Paducah Junior College, Incorporated (PJC) — The College is a part of the University of Kentucky'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)
-54-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
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.
Special Revenue Opioid Settlement Fund — To account for restricted funds from opioid settlement for
program purpose.
Debt Service 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)
-55-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
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. One of these funds, the Police and Firefighters' Pension
Fund (PFPF), is a single -employer defined benefit fund and is administered by the City. 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)
-56-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
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, custodial, 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 oflndirectExpenses
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)
-57-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
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, 2023.
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)
-58-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
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, opioid settlement, 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 $70,677 held for consumption and re -sell and real
property of $295,989 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)
-59-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
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 outflows 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 types 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)
-60-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
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)
-61-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
Note 1— 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)
-62-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
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)
-63-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
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, 2023, 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)
-64-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
Note 1— Summary of Significant Accounting Policies:
Subsequent Events
In September of 2023, the City retired $955,000 outstanding general obligation bonds Series 2013B with
proceeds from the sale of real property in the industrial park.
In preparing these financial statements, management has evaluated events and transactions for potential
recognition or disclosure through December 19, 2023, 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, 2023, 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, 2022
September 27, 2022
1St half by November 1, 2022
2nd half by February 1, 2023
1St half - November 30, 2022
2nd half - February 28, 2023
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.
(Continued)
-65-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
Note 3 — Detail Notes on Transaction Classes/Accounts:
Deposits
Deposits of the City's reporting entity are insured or collateralized with securities held by the City, its
agent, or by the pledging financial institution's trust department or agent in the name of City. During the
year ended June 30, 2023, 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 $50,517,412 and
$52,421,596, respectively.
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.
(Continued)
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
Note 3 — Detail Notes on Transaction Classes/Accounts:
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.
The City has the following fair value measurements as of June 30, 2023:
(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.
(Continued)
-67-
Weighted
Fair Value/
Average
Average
Carrying
Credit Quality/
Fair Value
Maturity
Types of Investments
Amount
Ratinu (1)
Level 1 Level 2
Level 3 Years 2
Governmental and
Business Funds
Certificates of deposits
$ -
NR
$ $ -
$ NA
Money market
18,153,001
NR
18,153,001 -
NA
TOTAL GOVERNMENTAL AND
BUSINESS FUNDS
$18.153.001
Fiduciary and Private
Purpose Trust Funds
Cash equivalents
$ 156,641
NR
$ 156,641 $
$ NA
Common stock
1,460,541
NR
1,460,541 -
NA
Mutual funds
Bond
1,319,630
NR
1,319,630 -
9.60
Equity
1,409,159
NR
1,409,159
NA
International
433,019
NR
433,019 -
NA
TOTAL FIDUCIARY AND
PRIVATE PURPOSE
TRUSTFUNDS
$ 4.778,990
(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.
(Continued)
-67-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
Note 3 — Detail Notes on Transaction Classes/Accounts:
Pension Trust Policy
The City's pension trust is the Police and Firefighters' Pension Fund (PFPF). Investment policy provides
for investment manager(s) who have full discretion of assets allocated to them subject to the overall
investment guidelines set out in the policy. Overall investment guidelines provide for diversification and
allow investment in domestic and international common stocks, fixed income securities, and cash
equivalents. Custodial credit risk is addressed by the policy providing for the engagement of a custodian
who accepts possession of securities for safekeeping; collects and disburses income; collects principal of
sold, matured, or called items; and provides periodic accounting to the pension board.
Asset allocation guideline for the plan is as follows:
Equities
Fixed income
PFPF Retirement Plan
Minimum Tareet 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 A1, 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)
-68-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
Note 3 — Detail Notes on Transaction Classes/Accounts:
Capital Assets
Capital asset activity for the year ended June 30, 2023, 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
Subscription -based information
technology arrangements
Totals at historical cost
Balance
8,895,072
Buildings and improvements
Balance
July 1, 2022
Additions
Deductions
June 30, 2023
$10,147,330
$ 94,000
$ -
$10,241,330
10,549,864
8,568,390
10,696,313
8,421,941
Total accumulated depreciation
9,139,492
and amortization
76,806,557
20,697,194
8,662,390
10,696,313
18,663,271
PRIMARY GOVERNMENT
25,416
ACTIVITIES CAPITAL
22,668,272
8,332,318
-
31,000,590
22,314,706
435,634
-
22,750,340
56,160,700
2,230,219
-
58,390,919
12,035,205
569,859
412,613
12,192,451
268,954
27,808
1,500
295,262
11,765,501
549,725
180,426
12,134,800
-
2,921,340
-
2,921,340
125,213,338
15,066,903
594,539
139,685,702
Less accumulated depreciation and amortization:
Land improvements
8,895,072
Buildings and improvements
14,795,446
Infrastructure
35,746,422
Equipment
8,685,011
Furnishings and fixtures
226,949
Vehicles
8,457,657
Subscription -based information
1,500
technology arrangements
-
Total accumulated depreciation
9,139,492
and amortization
76,806,557
Total capital assets, being
4,588,562
depreciated, net
48,406,781
PRIMARY GOVERNMENT
25,416
ACTIVITIES CAPITAL
ASSETS, NET
69.103.975
1,132,778
-
10,027,850
634,271
-
15,429,717
789,681
-
36,536,103
626,215
412,613
8,898,613
15,784
1,500
241,233
836,845
155,010
9,139,492
552,988
-
552,988
4,588,562
569,123
80,825,996
10,478,341
25,416
58,859,706
19.140.731 $10,721,729 77.522.977
Current year additions of capital assets being depreciated include assets transferred from business type funds
with historical cost of $380,892 and accumulated depreciation of $311,487. In addition, deductions of
construction -in -progress include an abandoned project with accumulated costs of $138,778.
(Continued)
-69-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
Note 3 – Detail Notes on Transaction Classes/Accounts:
Capital Assets
Depreciation and amortization expense was charged to governmental activities as follows:
General government:
474,106
General administration
$ 399,681
Cable authority
4,722
Finance
223,012
Planning
1,571
Information systems
16,562
Fleet maintenance
3.664
Total general government 649.212
Public safety:
Police
474,106
Fire
99,515
Emergency 911
198,095
Court awards
735
Fleet lease trust
866.507
Total public safety 1.638.958
Public service:
Public works 11,741
Engineering 78.147
Total public service 89.888
Parks and recreation 1.110.059
Planning and development 788,958
TOTAL DEPRECIATION AND AMORTIZATION EXPENSE –
GOVERNMENTAL ACTIVITIES $42170-75
Depreciation and amortization expense was charged to business -type activities as follows:
Solid Waste Fund $ 691,898
Section Eight Housing 1.457
TOTAL DEPRECIATION AND AMORTIZATION EXPENSE –
BUSINESS -TYPE ACTIVITIES 693 355
(Continued)
-70-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
Note 3 - Detail Notes on Transaction Classes/Accounts:
Capital Assets
Balance
Balance
Business -type Activities:
July 1, 2022
Additions
Deductions
June 30, 2023
Capital assets, not being depreciated:
Land
$ 68,886
$ -
$ -
$ 68,886
Construction -in -progress
-
6,330
-
6,330
Total capital assets, not being
depreciated
68,886
6,330
-
75.216
Capital assets, being depreciated:
Buildings and improvements
563,965
-
359,902
204,063
Equipment
2,739,805
181,882
244,413
2,677,274
Vehicles
3,550,246
813,600
23,619
4,340,227
Subscription -based information
technology arrangements
-
217,328
-
217,328
Totals at historical cost
6,854,016
1,212,810
627,934
7,438,892
Less accumulated depreciation and amortization:
Buildings and improvements
390,602
6,306
290,497
106,411
Equipment
1,715,034
250,361
244,413
1,720,982
Vehicles
2,669,207
388,393
23,619
3,033,981
Subscription -based information
technology arrangements
-
48.295
-
48.295
Total accumulated depreciation
and amortization
4,774,843
693,355
558,529
4,909,669
Total capital assets, being
depreciated, net
2,079,173
519,455
69,405
2,529,223
BUSINESS -TYPE ACTIVITIES
CAPITAL ASSETS, NET2.148.059
525 785
L09 4052.604.439
Balance
Balance
Discretely Presented
July 1, 2022
Increases
Decreases
June 30, 2023
Component Units:
Capital assets, not being depreciated:
Land & construction in progress
$ 5,668,351
$ -
$4,103,115
$ 1,565,236
Capital assets, being depreciated:
Utility plant
116,386,742
10,946,552
985,624
126,347,670
Subscription -based information
technology arrangements
227,999
-
-
227,999
Totals at historical cost
116,614,741
10,946,552
985,624
126,575,669
Less accumulated depreciation and amortization:
Utility plant
53,186,097
2,924,582
821,598
55,289,081
Subscription -based information
technology arrangements
32,661
76,000
-
108,661
Total accumulated depreciation
and amortization
53,218,758
3,000,582
821,598
55,397,742
Total capital assets, being
depreciated, net
63,395,983
7,945,970
164,026
71,177,927
COMPONENT UNIT
CAPITAL ASSETS, NET69.064.334
7.945.9704
267 141
72.743.163
Depreciation and amortization expense, charged to functions/programs of discretely presented major
component units as follows:
Paducah Water Works 3.000.582
(Continued)
-71-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
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:
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
Balance
840,325
(1,666,090)
Balance
July 1, 2022
Additions
Reductions
June 30, 2023
(43.704)
$ 88,196
$ 5,089,517
$ 6,487,353
$ (5,089,517)
$ 6,487,353
2,540,282
-
(853,755)
1,686,527
1,404,929
883,629
(891,669)
1,396,889
786,734
-
(786,734)
-
248,884
8,407,508
(6,919,137)
1,737,255
10.070.346
15.778.490
(14.540.8121
11.308.024
$ 159,750
$ 1,410,262
$ (159,750)
$ 1,410,262
177,605
135,526
(136,652)
176,479
7,090,148
-
(7,090.148)
-
7.427.5031545.788
(7.386.550)
1.586.741
$ 1,789,528 $ 1,344,554
690,331 -
1,275,037 -
4,756,425 -
- 3,880,645
$ 8,511,321$ 5,225,199
$ 3,055,852 $ 309,522
10,025 3,667,473
3,323,461 -
275,105 664,437
$ 6.664.443 $ 4,641,432
$ (1,789,528) $ 1,344,554
(149,566) 540,765
(434,712)
840,325
(1,666,090)
3,090,335
(3,172,448)
708,197
(7212,344)
$ 6,524,176
$ (1,331,946) $ 2,033,428
(669,002) 3,008,496
(3,323,461) -
(275,105) 664,437
(5,599,514) $ 5,706,361
16-174 .350
$ 6,788,049 (6.474.350)
$ 6,788,049
$6,149107
$ - (3.922.190)
$ 2226,917
3.502.461
$ - (355.74613.146.715
(Continued)
-72-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
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, 2022 Additions Reductions June 30, 2023
Business -Type Activities
Pensions:
Deferred outflows of resources
Deferred pension contributions
$ 228,717
$ 243,473
$ (228,717)
$ 243,473
Differences between employer contributions
and proportionate share of contributions
51,824
-
(24,072)
27,752
Differences between expected and
actual experience
27,848
-
(24,615)
3,233
Change of assumptions
32,549
-
(32,549)
-
Difference between projected and
actuarial earnings
-
429,494
(329,778)
99,716
Pension related deferred outflows
$ 340,938
$ 672,967
(639,731)
$ 374,174
Deferred inflows of resources
Differences between expected and
actual experience
$ 23,538
$ 25,587
$ -
$ 49,125
Differences between employer contributions
and proportionate share of contributions
4,117
50,424
(4,117)
50,424
Difference between projected and
actuarial earnings
323,238
-
(323,238)
-
Pension related deferred inflows
$ 350.893
$ 76,011
(327,355)
$ 99,549
Other post -employment benefits (OPEB)
Deferred outflows of resources
Deferred OPEB contributions
$ 86,402
$ 63,053
$ (86,402)
$ 63,053
Change of assumptions
193,017
-
(62,471)
130,546
Differences between expected and
actual experience
114,484
-
(31,398)
83,086
Differences between employer contributions
and proportionate share of contributions
15,000
-
(2,580)
12,420
Difference between projected and
actuarial earnings
-
158,991
(97,330)
61,661
OPEB related deferred outflows
$ 408,903
$ 222,044
(280,181)
$ 350,766
Deferred inflows of resources
Differences between expected and
actual experience
$ 217,369
$ 28,488
$ (48,578)
$ 197,279
Change of assumptions
677
135,198
(28,306)
107,569
Difference between projected and
actuarial earnings
126,655
-
(126,655)
-
Dierences between employer contributions
and proportionate share of contributions
10,525
28,495
(10,525)
28,495
OPEB related deferred inflows
$ 355,226
$ 192,181
(214.064)
$ 333,343
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)
-73-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
Note 3 — Detail Notes on Transaction Classes/Accounts:
Long -Term Liabilities
Governmental Activities
As of June 30, 2023, the governmental long-term liabilities consisted of the following:
General obligation bonds:
Current portion $ 2,195,000
Noncurrent portion 28,546,136
TOTAL GENERAL OBLIGATION
BOND COSTS, NET OF PREMIUMS AND DISCOUNTS S 30.741.136
Note payable:
Current portion $ 526,780
Noncurrent portion 8,406,636
TOTAL NOTE PAYABLE PAYMENTS 8933.416
Subscription -based information technology arrangements:
Current portion $ 422,022
Noncurrent portion 2,050,680
TOTAL SUBSCRIPTION -BASED
INFORMATION TECHNOLOGY ARRANGEMENTS 2.472.702
Accrued compensated absences:
Current portion $ 1,351,916
Noncurrent portion 1.370.117
TOTAL ACCRUED COMPENSATED
ABSENCES 2,722.033
Business -type Activities
As of June 30, 2023, the long-term liabilities payable from proprietary fiind resources consisted of the
following:
Subscription -based information technology arrangements:
Current portion
$ 47,154
Noncurrent portion
125,001
TOTAL SUBSCRIPTION -BASED
INFORMATION TECHNOLOGY ARRANGEMENTS
S 172,155
Accrued compensated absences:
Current portion
$ 97,965
Noncurrent portion
7,790
TOTAL ACCRUED COMPENSATED
ABSENCES
$ 105,755
(Continued)
-74-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
Note 3 — Detail Notes on Transaction Classes/Accounts:
Long -Term Liabilities
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.
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°/x, 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 a Municipal Sports and Recreational Facility jointly with McCracken County,
Kentucky. These assets will be donated to the McCracken County Sports Tourism Commission. 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)
-75-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
Note 3 — Detail Notes on Transaction Classes/Accounts:
Long -Term Liabilities
Notes Payable Direct Borrowing
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 42. 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)
-76-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
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, 2023:
Subscription -based information
technology arrangements - 2,472,702 - 2,472,702 422,022
Accrued compensated
absences 2,368,183 514,001 (160,151) 2,722,033 1,351,916
TOTAL GENERAL LONG-
TERM LIABILITIES $43,328,547 4200.172 (2.659.432) 44.869287 4.495.718
Business -type activities:
Subscription -based information
technology arrangements $ - $ 172,155 $ - $ 172,155 $ 47,154
Accrued compensated
absences 109,626 - (3,871) 105,755 97,965
TOTAL BUSINESS LONG-
TERM LIABILITIES $ 109,626 $ 172,155 (3.871) 277,910 $ 145,119
(Continued)
-77-
Beginning
Ending
Due within
Type of Liability:
Balance
Additions Reductions
Balance
One Year
Governmental activities:
General obligation bonds:
Recreation Facility
$20,520,000
$ - $ -
$ 20,520,000
$ 260,000
Refinanced Pension
1,540,000
- (460,000)
1,080,000
470,000
Refinanced Convention Center
2,050,000
- (490,000)
1,560,000
505,000
Public Pool Renovations
575,000
- (75,000)
500,000
75,000
Economic Development
1,290,000
- (165,000)
1,125,000
170,000
Refinancing Public Projects
2,910,000
- (340,000)
2,570,000
350,000
Riverfront and 911 Equipment 2,235,000
- (165,000)
2,070,000
175,000
Refunding Floodwall issue
1,365,000
- (365,000)
1,000,000
190,000
Premiums
518,806
- (129,500)
389,306
-
Discounts
(87,367)
- 14,197
(73,170)
-
Total bonds payable
32,916,439
- (2,175,303)
30,741,136
2,195,000
Notes payable direct borrowing:
Kentucky Infrastructure
Authority
2,805,908
1,213,469 -
4,019,377
193,546
Kentucky Association of
Counties
1,141,096
- (164,259)
976,837
167,788
Murray State University
Agreement
1,330,614
- (110,409)
1,220,205
114,916
CFSB Agreement
2,766,307
- (49,310)
2,716,997
50,530
Total notes payable
8,043,925
1,213,469 (323,978)
8,933,416
526,780
Subscription -based information
technology arrangements - 2,472,702 - 2,472,702 422,022
Accrued compensated
absences 2,368,183 514,001 (160,151) 2,722,033 1,351,916
TOTAL GENERAL LONG-
TERM LIABILITIES $43,328,547 4200.172 (2.659.432) 44.869287 4.495.718
Business -type activities:
Subscription -based information
technology arrangements $ - $ 172,155 $ - $ 172,155 $ 47,154
Accrued compensated
absences 109,626 - (3,871) 105,755 97,965
TOTAL BUSINESS LONG-
TERM LIABILITIES $ 109,626 $ 172,155 (3.871) 277,910 $ 145,119
(Continued)
-77-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
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
100% of the subscription -based
information technology arrangements
Net investment in capital assets
Annual Debt Service Requirements
$77,522,977
$ (308,100)
154,050
(154,050)
(2,004,600)
(500,000)
(585,000)
(2,070,000)
(1,000,000)
(4,019,378)
(2.472.702)
64.717.247
The annual debt service requirements to maturity for bonds and notes as of June 30, 2023, are as follows:
Year Ending
June 30
Principal
Interest
2024
$ 2,817,026
$ 1,008,989
2025
2,978,592
924,044
2026
3,049,519
833,739
2027
2,928,815
733,209
2028
3,014,094
636,257
2029-2033
11,901,839
2,090,223
2034-2038
8,653,693
918,099
2039-2043
4.330.974
283.120
TOTALS
39.674.5527.427.680
(Continued)
-78-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
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, 2023, 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 $- were paid for the year ended June 30,
2023.
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, 2023, $190,691 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, 2023, approval had not yet been granted. The County estimated post -closure
care costs totaling $4,125,000 or $125,000 per year plus 10% for inflation. Actual costs may be higher due
to inflation, changes in technology, or changes in regulations. In the year ending June 30, 2001, the City
entered into an inter -local agreement to share equally the costs for post -closure costs and, accordingly, has
recorded a long-term liability for 50% of the estimated closure expense. It is anticipated that post -closure
costs will be paid out of the Solid Waste Fund to the extent that funds are available with any excess costs
being funded using long-term borrowing.
(Continued)
-79-
Governmental
Business -type
Activities
Activities
Accrued sick leave
$ 798,683
$ 35,618
Accrued vacation leave
1.923.350
70.137
Totals
2,722,033
105,755
Less current portion
1.351.916
97.965
LONG-TERM PORTION
1 370 117
7 790
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 $- were paid for the year ended June 30,
2023.
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, 2023, $190,691 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, 2023, approval had not yet been granted. The County estimated post -closure
care costs totaling $4,125,000 or $125,000 per year plus 10% for inflation. Actual costs may be higher due
to inflation, changes in technology, or changes in regulations. In the year ending June 30, 2001, the City
entered into an inter -local agreement to share equally the costs for post -closure costs and, accordingly, has
recorded a long-term liability for 50% of the estimated closure expense. It is anticipated that post -closure
costs will be paid out of the Solid Waste Fund to the extent that funds are available with any excess costs
being funded using long-term borrowing.
(Continued)
-79-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
Note 3 — Detail Notes on Transaction Classes/Accounts:
Interfund Transactions and Balances
Interfund transfers during the year ended June 30, 2023, were as follows:
TOTALS 13.177.470
Interfund
Transfers Out
$6,771,947
5,694,447
35,749
187,858
75,700
342,363
69.406
13.177.470
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 $868,227 for E911 support;
$1,030,776 for debt service; and $4,769,048 for capital projects. Significant transfers from the special
revenue investment fund includes $1,200,000 for municipal aid street resurfacing program; $1,639,449 for
debt service; and $2,735,000 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, 2023:
Due To Due From
General Fund $ - $1,576,337
Special Revenue Investment Fund 1,576,337 -
TOTALS 1 576 337 1 576 337
Note 4 — Pension Plans - City of Paducah:
The City provides retirement benefits to its employees through two pension funds. One of the funds is a
single -employer defined benefit funds and is administered by the City. This fund is a Police and
Firefighters' Pension Fund (PFPF). 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)
-80-
Interfund
Governmental Funds:
Transfers In
General Fund
$ 587,023
Special Revenue Investment Fund
58,831
Special Revenue Bond Fund
-
Capital Project Fund
7,550,049
Debt Service Fund
2,812,083
Nonmajor Governmental Funds
2,068,227
Internal Service Funds
100,890
Proprietary Funds:
Solid Waste
-
Nonmajor Proprietary Funds
367
TOTALS 13.177.470
Interfund
Transfers Out
$6,771,947
5,694,447
35,749
187,858
75,700
342,363
69.406
13.177.470
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 $868,227 for E911 support;
$1,030,776 for debt service; and $4,769,048 for capital projects. Significant transfers from the special
revenue investment fund includes $1,200,000 for municipal aid street resurfacing program; $1,639,449 for
debt service; and $2,735,000 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, 2023:
Due To Due From
General Fund $ - $1,576,337
Special Revenue Investment Fund 1,576,337 -
TOTALS 1 576 337 1 576 337
Note 4 — Pension Plans - City of Paducah:
The City provides retirement benefits to its employees through two pension funds. One of the funds is a
single -employer defined benefit funds and is administered by the City. This fund is a Police and
Firefighters' Pension Fund (PFPF). 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)
-80-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
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://k. ryret.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)
-81-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
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 23.40% for non -hazardous employees and 42.81% for hazardous employees for the year ended
June 30, 2023. 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, 2023, 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 $ 22,840,791
City's hazardous proportionate share of the CERS net pension liability 47,981,053
Total CERS net pension liability associated with the City 70.821.844
The net pension liability for each plan was measured as of June 30, 2022, and the total pension liability
used to calculate the net pension liability was determined by an actuarial valuation as of that date.
(Continued)
-82-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
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, 2023, the City's non -hazardous proportion was 0.31596% percent and hazardous
proportion was 1.5724% percent.
For the year ended June 30, 2023, the City recognized pension expense of $6,328,605 ($1,831,922 for
non -hazardous and $4,496,683 for hazardous) related to CERS pension plans. At June 30, 2023, 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
$ 24,420 $ 225,604 $ 1,375,702 $ -
607,752 - 1,108,230 -
209,630 380,889 1,504,649 1,079,797
841,802 606,493 3,988,581 1,079,797
2,164,511 - 4,566,315 -
3.006313 $ 606,493 8.554.896 1.079.797
The City reported $6,730,826 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, 2024. Other amounts
reported as deferred outflows of resources and deferred inflows related to pensions will be recognized
in pension expense as follows:
Fiscal Year Endine June 30
Non -
Hazardous
Hazardous
2024 $ (53,469)
$ 1,086,405
2025 (168,137)
864,307
2026 (191,941)
(128,285)
2027 648,856
1,086,357
(Continued)
-83-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
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, 2023 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)
-84-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
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:
Current
1 % Discount 1%
Decrease Rate Increase
CERS 5.25% 6.25% 7.25%
Non -hazardous' proportionate share of
net pension liability $28,548,155 $22,840,791 $18,120,327
Hazardous' proportionate share of
net pension liability $59,768,254 $47,981,053 $38,381,106
(Continued)
-85-
Target
Long -Term Expected
Asset Class
Allocation
Real Rate of Return
Public Equity
50.00%
4.45%
Private Equity
10.00%
10.15%
Specialty Credit/High Yield
10.00%
2.28%
Core Bonds
10.00%
0.28%
Real Estate
7.00%
3.67%
Real Return
13.00%
4.07%
Cash
0.00%
(0.691%
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:
Current
1 % Discount 1%
Decrease Rate Increase
CERS 5.25% 6.25% 7.25%
Non -hazardous' proportionate share of
net pension liability $28,548,155 $22,840,791 $18,120,327
Hazardous' proportionate share of
net pension liability $59,768,254 $47,981,053 $38,381,106
(Continued)
-85-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
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 Fund - Police and Firefighters' Pension Fund (PFPF)
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 City of Paducah Police and Firefighters' Pension Fund Board is responsible for
establishing or amending contribution rates and requirements for their plan.
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.
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, 2023. 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.
Membership Information:
Membership of each plan consisted of the following at June 30, 2023:
PFPF
Active participants
0
Beneficiaries
17
Retired participants
14
TOTAL PARTICIPANTS
31
The plan is closed to new members.
-86-
(Continued)
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
Note 4 — Pension Plans - City of Paducah:
Single Employer Defined Benefit Fund - Police and Firefighters' Pension Fund (PFPF)
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%.
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.
Changes in PFPF's Net Pension Liability is as follows:
PFPF
Balance — June 30, 2022
Service cost
Interest expense
Experience losses (gains)
Change in assumptions
Contributions — City
Contributions — Members
Investment income
Benefits paid
Plan administrative expenses
Net change
Balance — June 30, 2023
Plan net position as a percentage of the
total pension liability
Total
Plan
Net
Pension
Net
Pension
Liability
Position
Liability
(a)
(b)
(a) — (b)
$ 6,797,853
$ 3,908,726
$ 2,889,127
414,475
-
414,475
(238,809)
-
(238,809)
-
263,595
(263,595)
-
394,308
(394,308)
(842,634)
(842,634)
-
-
(41,034)
41,034
(666.968)
(225.765)
(441.203)
6.130.885
3.682.961
$2,447,924
60.07%
For the year ended June 30, 2023, the City recognized pension expense of $75,637 for PFPF.
(Continued)
-87-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
Note 4 — Pension Plans - City of Paducah:
Single Employer Defined Benefit Fund - Police and Firefighters' Pension Fund (PFPF)
At June 30, 2023, the City reported deferred outflows of resources and deferred inflows of resources
related to the PFPF pension plan from the following sources:
Difference between expected and
actual experience
Changes in assumptions
Net difference between projected
and actual earnings on pension
plan investments
Total
PFPF
Deferred Deferred
Outflows of Inflows of
Resources Resources
120,989
$ 120,989 $ -
Amounts reported as deferred outflows of resources and deferred inflows related to pensions will be
recognized in pension expense as follows:
Year Ending
June 30
PFPF
2024
$ 2,459
2025
(8,592)
2026
157,220
2027
(30,097)
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
7/1/23
Entry age normal
Level dollar closed
10 Years
Fair value
(Continued)
-88-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
Note 4 — Pension Plans - City of Paducah:
Single Employer Defined Benefit Fund - Police and Firefighters' Pension Fund (PFPF)
Actuarial assumptions:
Investment rate of return
Projected salary increases
Inflation rates adjustments
6.50%(3)
(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
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, 2023 PFPF plan year, the assumed rate of
return was 6.50%.
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, 2023 was as follows:
PFPF 6.50%
Sensitivity of the net pension liability to changes in the discount rate — The following presents the
net pension liability of the City's plans would be if it were calculated using a discount rate that is 1%
point lower or 1% point higher than the current rate:
PFPF Net Pension Liability
1%
Current
Decrease
Rate
$ 2,861,813
$ 2,447,924
1%
Increase
$ 2,081,882
(Continued)
-89-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
Note 4 — Pension Plans - City of Paducah:
Single Employer Defined Benefit Fund - Police and Firefighters' Pension Fund (PFPF)
Financial Reports:
The Police and Firefighters' Pension Fund (PFPF) plan does not issue stand-alone financial reports. The
Plan's financial statements are as follows:
STATEMENT OF FIDUCIARY NET POSITION
PENSION TRUST FUND
JUNE 30, 2023
Total assets 3,693,457
Liabilities
Vouchers and accounts payable 10,496
Net Position
Held in trust for pension benefits 3.682.961
(Continued)
-90-
PFPF
Assets
Cash and cash equivalents
$ 1,206
Receivables:
Interest
-
Other
3,962
Investments at fair value
Money market accounts
156,641
Common stock
1,332,254
Mutual funds
2.199.394
Total assets 3,693,457
Liabilities
Vouchers and accounts payable 10,496
Net Position
Held in trust for pension benefits 3.682.961
(Continued)
-90-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
Note 4 — Pension Plans - City of Paducah:
Single Employer Defined Benefit Fund - Police and Firefighters' Pension Fund (PFPF)
STATEMENT OF CHANGES IN NET POSITION
PENSION TRUST FUND
JUNE 30, 2023
Summary of Pension Expense:
As of June 30, 2023, the City's pension expense associated with the two pension plans are summarized
as follows:
Governmental Business -Type
Activities Activities Total
CERS —Non -hazardous $ 1,589,403 $ 242,519 $ 1,831,922
CERS — Hazardous 4,496,683 - 4,496,683
PFPF 75,637 - 75,637
Total 6.161.723 $ 242,519 6.404242
(Continued)
-91-
PFPF
Additions:
Contributions
Employer
$ 263,595
Plan members
-
Total contributions
263,595
Investments earnings:
Net change in fair value of investments
310,144
Interest and dividends
84,164
Net investment earnings
394,308
Total additions
657,903
Deductions:
Benefits
842,634
Administrative expenses
41,034
Total deductions
883,668
Change in net position
(225,765)
Net position - beginning
3,908,726
Net position - ending
3.682.961
Summary of Pension Expense:
As of June 30, 2023, the City's pension expense associated with the two pension plans are summarized
as follows:
Governmental Business -Type
Activities Activities Total
CERS —Non -hazardous $ 1,589,403 $ 242,519 $ 1,831,922
CERS — Hazardous 4,496,683 - 4,496,683
PFPF 75,637 - 75,637
Total 6.161.723 $ 242,519 6.404242
(Continued)
-91-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
Note 5 — Other Postemplovment 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, ry et.ky.gov.
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
3.39% of non -hazardous covered payroll and 6.78% of hazardous covered payroll for the fiscal years
ended June 30, 2023.
At June 30, 2023, 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, 2022, 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, 2022, the City's non -hazardous proportion
was 0.315934 percent and hazardous proportion was 1.57170 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 $ 6,235,001
City's hazardous proportionate share of the CERS 13.387.551
medical insurance liability
Total CERS medical insurance liability associated with the City S 19.622.552
(Continued)
-92-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
Note 5 — Other Postemplovment Benefits (OPEB):
For the year ended June 30, 2023, the City recognized an OPEB expense of $2,790,854 ($1,130,890 non-
hazardous and $1,659,964 hazardous, respectively). At June 30, 2023, the City reported deferred outflows
of resources and deferred inflows of resources related to OPEBs from the following sources:
The City reported $1,407,607, including implicit subsidies of $370,843, 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, 2024. Other amounts reported as deferred outflows of resources and deferred inflows related to
pensions will be recognized in OPEB expense as follows:
Fiscal Year Endine June 30
Non -
Non -hazardous
Hazardous
2024
Deferred
Deferred
Deferred
Deferred
101,794
Outflows of
Inflows of
Outflows of
Inflows of
(4,892)
Resources
Resources
Resources
Resources
Difference between expected and
actual experience
$ 627,605
$ 1,437,820
$ 295,806
$ 792,886
Changes in assumptions
986,109
812,548
2,234,772
2,303,517
Net difference between projected
and actual earnings on pension
plan investments
281,222
-
488,636
-
Changes in proportion and
differences between City
contributions and
proportionate share of
contributions
93.818
215.246
459.367
477.687
1,988,754
2,465,614
3,478,581
3,574,090
City contributions subsequent to
the measurement date
538.372
-
869.235
-
Total
$2.527.126
S 2.465.614
$4.347.816
S 3.574.090
The City reported $1,407,607, including implicit subsidies of $370,843, 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, 2024. Other amounts reported as deferred outflows of resources and deferred inflows related to
pensions will be recognized in OPEB expense as follows:
Fiscal Year Endine June 30
Non -
(Continued)
-93-
Hazardous
Hazardous
2024
$ (51,102)
$ 98,460
2025
(52,181)
101,794
2026
(368,685)
(169,933)
2027
(4,892)
354,501
2028
-
(480,331)
(Continued)
-93-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
Note 5 — Other Postemplovment Benefits (OPEB):
Actuarial assumptions — The total OPEB liability in the June 30, 2022 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
Private Equity
Under 65
6.40% at January 1, 2022 decreasing to an ultimate rate of
Specialty Credit/High Yield
4.05% over a period of 14 years
Ages 65 and Older
6.30% at January 1, 2023 decreasing to an ultimate rate of
10.00%
4.05% over a period of 13 years
Municipal Bond Index Rate
3.69%
Discount Rate
5.70% and 5.61% 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
Public Equity
50.00%
4.45%
Private Equity
10.00%
10.15%
Specialty Credit/High Yield
10.00%
2.28%
Core Bonds
10.00%
0.28%
Real Estate
7.00%
3.67%
Real Return
13.00%
4.07%
Cash
0.00%
(0.91)%
Total
100.00%
(Continued)
-94-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
Note 5 — Other Postemplovment Benefits (OPEB):
Discount rate - The discount rate used to measure the total OPEB liability was 5.70% for non -hazardous
and 5.61% 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 5.70% for non -hazardous and 5.61% 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 (4.70% for non -hazardous and 4.61% for hazardous)
or 1 -percentage -point higher (6.70% for non -hazardous and 6.61% for hazardous) than the current rate:
Current
1 % Discount 1 %
Decrease Rate Increase
CERS
Non -hazardous' proportionate share of
net OPEB liability $ 8,335,201 $ 6,235,001 $ 4,498,834
Hazardous' proportionate share of
net OPEB liability $18,601,602 $13,387,551 $ 9,152,767
Sensitivity of the City's proportionate share of the collective net OPER 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:
Non -hazardous' proportionate share of
net OPEB liability
Hazardous' proportionate share of
net OPEB liability
Note 6 — Appropriations Deficit:
No departments that adopted budgets annually had excess expenditures over appropriations for the fiscal
year ended June 30, 2023.
(Continued)
-95-
Current
1%
Discount
1%
Decrease
Rate
Increase
$ 4,635,584
$ 6,235,001
$ 8,155,598
$ 9,348,359
$13,387,551
$18,311,109
No departments that adopted budgets annually had excess expenditures over appropriations for the fiscal
year ended June 30, 2023.
(Continued)
-95-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
Note 7 — Component Unit Lone -Term Liabilities:
Long-term liabilities of the discretely presented component units consist of the following at June 30, 2023:
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 (PWW) 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, 2023, are as follows:
.25%
Year Ending Service R & M
June 30 Principal Interest Fee Reserve
Total
2024 $ 782,148 $ 94,486 $ 18,505 $ 11,200
$ 906,339
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 505,939 36,563 6,810 -
549,312
2029-2033 1,808,096 97,967 16,234 -
1,922,297
2034-2037 535.808 21.312 3.046 -
560.166
TOTALS 5 114 790 395 034 72 485 44 800 5 627 109
The calculation to reconcile amounts in this schedule to the "net investment in capital assets" for the
discretely presented component units is:
Net Capital Assets
Less:
100% of lease and subscription -based
information technology liabilities
100% of the outstanding 2013 revenue bonds
100% of the outstanding KY
Infrastructure Authority notes payable
Debt premium, net of refunding
Net investment in capital assets
Note 8 — Commitments and Contingencies:
Grant Contingencies
$72,743,163
(79,973)
(60,000)
(5,054,790)
(785)
67.547.615
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.
(Continued)
-96-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
Note 8 — Commitments and Contingencies:
Construction Commitments
The City has various on-going contracts for construction, renovations, paving materials, equipment, and
labor. As of June 30, 2023, the most significant construction commitments were as follows:
Cumulative Estimated
Costs Incurred Total Costs
Comprehensive Stormwater Master Plan Study $ 975,891 $ 1,047,040
Buckner Lane Bridge 2,131,455 2,139,575
20725t'' Street Improvement 2,052,948 2,193,308
Floodwall Rehab 7,197,221 7,910,364
Riverfront Development 1,613,302 2,652,865
13.970.817S 15.943.152
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, 2023, that amount
was $2,310,071. 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 $268,966 as of June 30, 2023.
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
2020-2021 $ -
$ 140,231
$ 140,231
$
2021-2022 -
35,296
35,296
219,192
2022-2023 -
23,777
23,777
-
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, 2023, that amount
was $2,310,071. 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 $268,966 as of June 30, 2023.
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. (Continued)
-97-
Current Year
Beginning of
Claims and
Actual
Balance at
Fiscal Year
Changes in
Claim
Fiscal
Liability
Estimates
Payments
Year End
2020-2021 $ 108,452
$ 2,131,217
$2,008,954
$ 230,715
2021-2022 230,715
2,494,591
2,506,114
219,192
2022-2023 219,192
2,617,451
2,567,677
268,966
Several lawsuits are pending involving citizens' complaints and the City of Paducah. Various allegations
have been made seeking damages which the legal counsel of the City, along with its management, has
determined to be immaterial to the City's financial position. (Continued)
-97-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
Note 10 — Leases and Subscription -Based Information Technology Arrangements:
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.
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, 2023, the City
recognized lease income of $617,421 and interest income of $129,235.
The following is an analysis of property leased under these leases at June 30, 2023:
Land $ 270,000
Buildings 2,546,487
Equipment 110.126
Total 2,926,613
Less: accumulated depreciation (1.438.868)
NET BOOK VALUE &L4K7 745
Depreciation expense for the year ended June 30, 2023, on leased property was $55,775.
The following is a schedule of future lease receivable principal and interest payments from leases as of
June 30, 2023:
Year Ending
June 30
Principal
Interest
Total
2024
$ 595,287
$ 100,200
$ 695,487
2025
450,110
81,826
531,936
2026
418,494
67,677
486,171
2027
387,132
53,947
441,079
2028
384,846
41,202
426,048
2029-2033
1.020.374
44.747
1.065.121
Total
3 256 243
$ 389,599
3.645.842
Subscription -Based Information Technology Arrangements
The City has entered into subscription -based information technology arrangements (SBITAs) involving:
• Police document management software
• Police in -car video software
• Police interview video software
• Solid waste fleet tracking software
• Finance software
• Document management software
• E-mail/communication management software
(Continued)
-98-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
Note 10 - Leases and Subscription -Based Information Technology Arrangements:
Subscription -Based Information Technology Arrangements
The total of the City's governmental subscription assets are recorded at a cost of $2,921,340, less
accumulated amortization of $552,988. The total of the City's business -type subscription assets are
recorded at a cost of $217,328, less accumulated amortization of $48,295.
For governmental activities, the future subscription payments under SBITA agreements are as follows:
Year Ending
Principal
Interest
Total
June 30
Principal
Interest
Total
2024
$ 422,022
$ 79,105
$ 501,127
2025
546,354
64,841
611,195
2026
624,788
46,407
671,195
2027
315,604
29,465
345,069
2028
277,322
18,892
296,214
2029
286,612
9,602
296,214
Total
2 472 702
$ 248,312
2.721.014
For business -type activities, the future subscription payments under SBITA agreements are as follows:
Year Ending
June 30
Principal
Interest
Total
2024
$ 47,154
$ 5,179
$ 52,333
2025
48,753
3,579
52,332
2026
50,407
1,925
52,332
2027
25,841
325
26,166
Total
172155
$11,008
$ 183,163
In addition to the amounts presented above, the City also had outflows of resources during the fiscal year
totaling $229,312 that were not included in the measurement of the subscription liability. This total
consists of payments related to arrangements that either have interminable subscription terms or that are
prepaid and otherwise meet SBITA recognition criteria, but are below the City's capitalization threshold.
Note 11- Tax Abatements:
Developer Residential Property Tax Abatements -
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)
-99-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
Note 11— Tax Abatements:
Developer Residential Property Tax Abatements —
For the year ended June 30, 2023, the City abated property taxes totaling $114,958 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, 2023, the City rebated employee local payroll taxes totaling $20,019 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
$5,333
$7,644
Development
phase 2
Greenway Village,
Greenway Village In-
2011-2-7789
$78,192
$193,892
LLC
fill, phase 1
Higdon
Ridgewood In -fill,
2019-4-8573
$19,745
$67,135
Development
phase 1
Greenway Village,
Greenway Village In-
2019-4-8572
$11,688
$42,904
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, 2023, the City rebated employee local payroll taxes totaling $20,019 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)
_100-
Payroll Tax
Recipient
Start Date
Term
Authority
Rebate Amount
Current
Inception to
Year
Date
Dippin' Dots, LLC
12-11-2016
10 yrs.
Resolution - 2014
$20,019
$83,122
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)
_100-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
Note 11— Tax Abatements:
Industrial Park West (IPW) —
For the year ended June 30, 2023, the City shared payroll tax revenue totaling $-0- 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
$-0-
$349,428
Plastic Services Products
October 2020
$-0-
$19,808
H.T. Hackney
March 2012
$-0-
$268,422
Whitehall
December 2014
$-0-
$443,046
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, 2023, the City shared payroll tax revenue totaling $16,747 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
$16,747
$215,558
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.
For the year ended June 30, 2023, the City provided funding totaling $18,302 under this program, as
follows:
Various Recipients
Start Date
Program Expenditures
Current Year
Inception to
Date
Remote Workers
July 2021
$18,302
$41,461
(Continued)
- 101 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
Note 11— Tax Abatements:
Annexation Incentives —
The City of Paducah enacted Ordinance 2022-1-8719 to encourage residential, commercial, and industrial
growth. To take advantage of this incentive program, real estate must be annexed consensually into the
City, pursuant to KRS 81A.412. The incentive program may include any of the following incentives: a)
property tax reimbursement — for up to 5 years, all City real estate property taxes may be reimbursed
(abated) to the property owner; b) free sanitation service — the property owner may be eligible for free
sanitation services for one year; and c) closing cost reimbursement - the property owner may be reimbursed
for closing cost not to exceed $1,000. The City real estate property tax abatement is limited to the actual
City of Paducah real estate property taxes collected in any given year as outlined in the individual
memorandum of agreement with the City.
For the year ended June 30, 2023, the City abated property taxes totaling $3,215 under this program,
including the following tax abatement agreements:
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).
For the year ended June 30, 2023, the City and County provided reduced rent for the following corporate
recipient, totaling $110,556:
Bldg.
Abatement Amount
FW
Agreement
Current
Inception to
Recipient
Development/Location
Rent Paid
Ordinance
Ordinance
Rent
Teletech
2301 McCracken Blvd.
Year
Date
Overland Group,
Taco John — West 60
2022-1-8719
$1,250
$1,250
LLC
Overland Group,
Sonic Drive -In — West 60
2022-1-8719
$1,872
$1,872
LLC
J. A Bell
Olivet Church Road
2022-1-8719
$93
$93
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).
For the year ended June 30, 2023, the City and County provided reduced rent for the following corporate
recipient, totaling $110,556:
(Continued)
-102-
Bldg.
Agreement
FW
Recipient
Location
Rent Paid
Size
Ordinance
Rent
Teletech
2301 McCracken Blvd.
30,000 sf
2012-11-7986
$330,000
$219,444
(Continued)
-102-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
Note 12 — Implementation of GASB Pronouncements
Accounting Pronouncements Adopted during the Fiscal Year ended June 30, 2023
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. 94 — Public -Private and Public -Public Partnerships and Availability Payment ArraL7gements
The City adopted the provisions of GASB Statement No. 94, Public -Private and Public -Public
Partnerships and Availability Payment Arrangements. The primary objective of this Statement is to
improve the financial reporting by addressing issues related to public-private and public -public partnership
arrangements (PPPs). This Statement also provides guidance for accounting and financial reporting for
availability payment arrangements (APAs). This pronouncement did not impact the preparation of these
financial statements.
Statement No. 96 — Subscrintion-Based Information Technoloev Arrangements
The City adopted the provision of GASB Statement No. 96, Subscription -Based Information Technology
Arrangements. The objective of this Statement is to establish standards of accounting and financial
reporting for SBITAs by government end users. The implementation of GASB Statement No. 96 required
the City to recognize certain assets and liabilities for subscription -based information technology
arrangements that previously were expensed. The impact of the statement increased governmental capital
assets and SBITA payables $2,921,340 and $2,921,340 as of July 1, 2022, respectively, and increased
business -type capital assets and SBITA payables $217,328 and $217,328 as of July 1, 2022, respectively, in
the government -wide statement of net position. There was no impact on net position or fund balance.
Statement No. 99 — Omnibus 2022
The City adopted the provisions of GASB Statement No. 99, Omnibus 2022. This Statement establishes the
accounting and financial reporting requirements for specific issues related to derivative instruments, leases,
public-private and public -public partnerships, subscription -based information technology arrangements
(SBITAs), LIBOR usage extension, disclosures for nonmonetary transactions, pledging of revenues, and
government -wide financial statement focus. This pronouncement did not impact the preparation of these
financial statements.
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. 100 — Accounting Changes and Error Corrections an amendment of GASB
Statement No. 62 (FY2024)
Statement No. 101 — Compensated Absences (FY2024)
-103-
THIS PAGE INTENTIONALLY LEFT BLANK
CITY OF PADUCAH, KENTUCKY
REQUIRED SUPPLEMENTARY INFORMATION
ANNUAL COMPREHENSIVE FINANCIAL REPORT
YEAR ENDED JUNE 30, 2023
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IA
Exhibit A-3
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
0.3159%
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
2023
0.3159%
$
22,840,791
$
8,742,004
261.2764%
52.4175%
2022
0.3250%
$
20,724,296
$
8,315,793
249.2161%
57.3282%
2021
0.3174%
$
24,344,624
$
8,161,809
298.2749%
47.8139%
2020
0.3199%
$
22,498,921
$
8,163,051
275.6190%
50.4470%
2019
0.3150%
$
19,185,252
$
7,880,115
243.4641%
53.5420%
2018
0.3210%
$
18,788,122
$
7,861,744
238.9816%
53.3249%
2017
0.3047%
$
14,999,862
$
7,266,510
206.4246%
55.5028%
2016
0.3150%
$
13,543,354
$
7,349,249
184.2821%
59.9684%
2015
0.3261%
$
10,579,475
$
7,477,608
141.4821%
66.8010%
CERS Hazardous
2023
1.5724%
$
47,981,053
$
10,240,852
468.5260%
47.1123%
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%
* 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.
-106-
CITY OF PADUCAH, KENTUCKY
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF CITY'S CONTRIBUTIONS
COUNTY EMPLOYEES' RETIREMENT SYSTEM
LAST NINE FISCAL YEARS*
Contributions
relative to
Year Contractually contractually
Ended June required penson required Contribution City's covered
30 contribution contribution deficiency (excess) payroll
CERS Nonhazardous
2023
$
2022
$
2021
$
2020
$
2019
$
2018
$
2017
$
2016
$
2015
$
CERS Hazardous
2023 $
2022 $
2021 $
2020 $
2019 $
2018 $
2017 $
2016 $
2015 $
Exhibit A-4
Contributions as a
percentage of
covered payroll
2,164,511
$
2,164,511
$
- $
9,250,047
23.4000%
1,991,428
$
1,991,428
$
- $
8,742,004
22.7800%
1,604,948
$
1,604,948
$
- $
8,315,793
19.3000%
1,575,229
$
1,575,229
$
- $
8,161,809
19.3000%
1,324,047
$
1,324,047
$
- $
8,163,051
16.2200%
1,141,041
$
1,141,041
$
- $
7,880,115
14.4800%
1,098,317
$
1,098,317
$
- $
7,861,744
13.9704%
902,501
$
902,501
$
- $
7,266,510
12.4200%
937,029
$
937,029
$
- $
7,349,249
12.7500%
4,566,315
$
4,566,315
$
- $
10,666,468
42.8100%
3,645,743
$
3,645,743
$
- $
10,240,852
35.6000%
2,925,365
$
2,925,365
$
- $
9,731,752
30.0600%
2,695,189
$
2,695,189
$
- $
8,966,031
30.0600%
2,179,073
$
2,179,073
$
- $
8,765,379
24.8600%
1,964,844
$
1,964,844
$
- $
8,850,650
22.2000%
1,954,791
$
1,954,791
$
- $
9,004,106
21.7100%
1,702,679
$
1,702,679
$
- $
8,404,139
20.2600%
1,741,930
$
1,741,930
$
- $
8,402,943
20.7300%
* 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, 2023
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, 2022:
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 10.30% - non -hazardous and 3.55% to 19.05% - hazardous.
-107-
Exhibit A-5
CITY OF PADUCAH, KENTUCKY
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF CITY'S PROPORTIONATE SHARE OF THE NET MEDICAL INSURANCE LIABILITY
COUNTY EMPLOYEES' RETIREMENT SYSTEM
LAST SIX FISCAL YEARS*
CERS Hazardous
2023
City's
$
13,387,551
$
City's share of the
Plan fiduciary
64.1271%
proportion
City's
$
13,159,206
net pension
net position as a
135.2193%
of the net
proportionate share
1.5341%
$
liability (asset) as
percentage of
Year Ended
pension
of the net pension
2020
City's covered
a percentage of its
the total pension
June 30
liability
liability (asset)
64.4396%
payroll
covered payroll
liability
11,328,384
$
8,850,650
127.9949%
64.2437%
2018
1.6403%
CERS Nonhazardous
13,559,555
$
9,004,106
150.5930%
58.9878%
2023
0.3159%
$ 6,235,001
$
8,742,004
71.3223%
60.9476%
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
2023
1.5717%
$
13,387,551
$
10,240,852
130.7269%
64.1271%
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.
-108-
Exhibit A-6
CITY OF PADUCAH, KENTUCKY
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF CITY'S CONTRIBUTIONS - MEDICAL INSURANCE PLAN
COUNTY EMPLOYEES' RETIREMENT SYSTEM
LAST SIX FISCAL YEARS*
Contributions
Contractually relative to Contributions as a
Year Ended required pension contractually Contribution City's covered percentage of
June 30 contribution required contribution deficiency (excess) payroll covered payroll
CERS Nonhazardous
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, 2022:
Valuation date
June 30, 2022
Actuarial cost method
2023
S
313,577
$
313,577
$
$
9,250,047
3.3900%
2022
$
364,542
$
364,542
$
$
8,742,004
4.1700%
2021
$
395,832
$
395,832
$
S
8,315,793
4.7600%
2020
$
388,502
$
388,502
$
$
8,161,809
4.7600%
2019
$
429,376
$
429,376
S -
$
8,163,051
5.2600%
2018
$
370,365
$
370,365
$
S
7,880,115
4.7000%
CERS Hazardous
2023
$
723,187
$
723,187
$
$
10,666,468
6.7800%
2022
$
894,026
$
894,026
S
$
10,240,852
8.7300%
2021
$
926,463
$
926,463
S -
$
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%
* 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, 2023
Changes of Benefit 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, 2022:
Valuation date
June 30, 2022
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
5.70% and 5.61% for non -hazardous and hazardous; increase from 5.20% and 5.05%.
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 6.40% at January 1, 2022, and gradually decreasing to an ultimate trend rate of
4.05% over a period of 14 years.
Healthcare trend rates (Post -65) Initial trend starting at 6.30% at January 1, 2023, and gradually decreasing to an ultimate trend rate of
4.05% over a period of 13 years.
-109-
CITY OF PADUCAH, KENTUCKY
SUPPLEMENTARY INFORMATION
ANNUAL COMPREHENSIVE FINANCIAL REPORT
YEAR ENDED JUNE 30, 2023
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, 2023
Revenues:
Grants
Interest
Total revenues
Expenditures:
Debt issuance costs
Planning and 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, July 1, 2022
FUND BALANCE, JUNE 30, 2023
See auditors report on pages 11-13.
Exhibit B-1
(3,789,900) (1,826,876) 1,963,024
(15,900,000)
(15,900,000)
$ (19,689,900)
-110-
15,900,000
15,900,000
(1,826,876) $ 17,863,024
19,887,997
$ 18,061,121
Variance with
Final Budget
Final
Positive
Budget
Actual
(Negative)
110,100
704,774
594,674
110,100
704,774
594,674
3,900,000
2,531,650
1,368,350
3,900,000
2,531,650
1,368,350
(3,789,900) (1,826,876) 1,963,024
(15,900,000)
(15,900,000)
$ (19,689,900)
-110-
15,900,000
15,900,000
(1,826,876) $ 17,863,024
19,887,997
$ 18,061,121
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, 2023
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, 2022
FUND BALANCE, JUNE 30, 2023
See auditors report on pages 11-13.
-111-
Final
Budget
Actual
$ 108,895 $ 48,160
8,388,299 1,981,497
(1,430) -
1,826,519 1,826,529
Exhibit B-2
Variance with
Final Budget
Positive
(Negative)
$ (60,735)
(6,406,802)
1,430
10
10,322,283 3,856,186 (6,466,097)
29,872,530 12,302,819 17,569,711
(19,550,247) (8,446,633) 11,103,614
1,254,758 1,213,469 (41,289)
10,850,427 7,550,049 (3,300,378)
(35,747) (35,749) (2)
12,069,438 8,727,769 (3,341,669)
$ (7,480,809) 281,136 $ 7,761,945
7,880,094
$ 8,161,230
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, 2023
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, 2022
FUND BALANCE, JUNE 30, 2023
See auditors report on pages 11-13.
Exhibit B-3
2,469,310
2,383,969
Variance with
1,086,010
1,085,319
Final Budget
Final
3,469,288
Positive
Budget
Actual
(Negative)
$ 655,305
$ 655,076
$ (229)
9,000
73,942
64,942
-
103,822
103,822
664,305
832,840
168,535
2,469,310
2,383,969
85,341
1,086,010
1,085,319
691
3,555,320
3,469,288
86,032
(2,891,015) (2,636,448)
254,567
2,900,015 2,812,083 (87,932)
2,900,015 2,812,083
$ 9,000 175,635
1,626,765
$ 1,802,400
-112-
(87,932)
$ 166,635
THIS PAGE INTENTIONALLY LEFT BLANK
CITY OF PADUCAH, KENTUCKY
SUPPLEMENTARY INFORMATION
NONMAJOR GOVERNMENTAL FUNDS
ANNUAL COMPREHENSIVE FINANCIAL REPORT
YEAR ENDED JUNE 30, 2023
COMBINING FINANCIAL STATEMENTS
NONMAJOR GOVERNMENTAL FUNDS
Special Revenue Funds
Municipal Aid Program — to account for revenues and expenditures of Kentucky gas tax refunds.
Emergency Communication Service Fund - to account for revenues associated with 911 program.
Court Awards Fund - to account for revenues associated with judicial system confiscations.
Grants - to account for the grant programs awarded to the City of Paducah from agencies of the Federal
Government and the Commonwealth of Kentucky.
Bed Tax Fund — to account for revenues associated with bed tax collections.
Exhibit B-4
CITY OF PADUCAH, KENTUCKY
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2023
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
Unearned revenues
Total liabilities
Fund Balances:
Restricted for:
Highway and streets
Public safety
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
$1,046,637 $ 94,373 $609,866
53,601 339,160 -
$1,100,238 $ 433,533 $609,866
$ 43,307 $ 31,628 $408,932
- 74,788 -
43,307 106,416 408,932
1,056,931 - -
- - 200,934
- 327,117 -
1,056,931 327,117 200,934
$1,100,238 $ 433,533 $609,866
-113-
Special Revenue Funds
CDBG Bed Total Nonmajor
Grant Tax Governmental
Fund Fund Funds
1,750,876
392,761
2,143,637
483,867
74,788
- 558,655
- - 1,056,931
- 200,934
- 327,117
- 1,584,982
2,143,637
-114-
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, 2023
Expenditures:
Current operations:
Public safety - 2,078,725 70,509
Public service 1,509,715 - -
Planning and development - - -
Total expenditures
Special Revenue Funds
2,078,725
70,509
Excess (deficiency) of revenues
Emergency
Court
Municipal
Communication
Awards
Revenues:
Aid Program
Service Fund
Fund
Taxes
$ -
$ 323,310
$ -
Charges for services
-
388,473
-
Intergovernmental
527,517
-
-
Grants
-
-
46,541
Interest
46,038
5,871
21,851
Miscellaneous
-
680,703
-
Total revenues
573,555
1,398,357
68,392
Expenditures:
Current operations:
Public safety - 2,078,725 70,509
Public service 1,509,715 - -
Planning and development - - -
Total expenditures
1,509,715
2,078,725
70,509
Excess (deficiency) of revenues
over expenditures
(936,160)
(680,368)
(2,117)
Other Financing Sources (Uses):
Transfers in
1,200,000
868,227
-
Transfers out
-
(187,858)
-
Total other financing sources (uses)
1,200,000
680,369
-
Net change in fund balances
263,840
1
(2,117)
Fund balances, July 1, 2022
793,091
327,116
203,051
FUND BALANCES, JUNE 30, 2023
$ 1,056,931 $
327,117
$ 200,934
See auditors report on pages 11-13.
-115-
Special Revenue Funds
CDBG Bed
Total Nonmajor
Grant Tax
Governmental
Fund Fund
Funds
$ - $1,839,464
$ 2,162,774
197,500
197,500 1,839,464
197,500 1,839,464
197,500 1,839,464
388,473
527,517
244,041
73,760
680,703
4,077,268
2,149,234
1,509,715
2,036,964
5,695,913
(1,618,645)
2,068,227
(187,858)
1,880,369
261,724
1,323,258
$ 1,584,982
-116-
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, 2023
Revenues:
Intergovernmental
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, 2022
FUND BALANCE, JUNE 30, 2023
See auditors report on pages 11-13.
-117-
Exhibit B-6
1,200,000 1,200,000
1,200,000 1,200,000
$ 90,920 263,840
793,091
$ 1,056,931
$ 172,920
Variance with
Final Budget
Final
Positive
Budget
Actual
(Negative)
$ 489,000
$ 527,517
$ 38,517
3,200
46,038
42,838
492,200
573,555
81,355
1,601,280
1,509,715
91,565
(1,109,080)
(936,160)
172,920
1,200,000 1,200,000
1,200,000 1,200,000
$ 90,920 263,840
793,091
$ 1,056,931
$ 172,920
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, 2023
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, 2022
FUND BALANCE, JUNE 30, 2023
See auditors report on pages 11-13.
-118-
Final
Budget
$ 320,000
335,000
500
761,110
1,416,610
A -- -I
$ 323,310
388,473
5,871
680,703
1,398,357
Exhibit B-7
Variance with
Final Budget
Positive
(Negative)
$ 3,310
53,473
5,371
(80,407)
(18,253)
2,383,610 2,078,725 304,885
(967,000) (680,368) 286,632
1,154,920
(187,920)
967,000
868,227
(187,858)
680,369
1
327,116
$ 327,117
(286,693)
62
(286,631)
$ 1
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, 2023
Revenues:
Grants
Interest
Total revenues
Expenditures:
Public safety
Excess (deficiency) of revenues over
expenditures
Net change in fund balance
Fund balance, July 1, 2022
FUND BALANCE, JUNE 30, 2023
See auditors report on pages 11-13.
-119-
Final
Budget Actual
$ 30,000 $ 46,541
2,100 21,851
32,100 68,392
Exhibit B-8
Variance with
Final Budget
Positive
(Negative)
$ 16,541
19,751
36,292
90,800 70,509 20,291
(58,700) (2,117)
$ (58,700) (2,117)
203,051
$ 200,934
56,583
$ 56,583
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, 2023
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, 2022
FUND BALANCE, JUNE 30, 2023
See auditors report on pages 11-13.
Final
Budget Actual
$1,405,000 $ 197,500
1,405,000 197,500
Exhibit B-9
Variance with
Final Budget
Positive
(Negative)
$ (1,207,500)
(1,207,500)
1,397,500 197,500 1,200,000
7,500 - (2,407,500)
$ 7,500 -
-120-
$ (2,407,500)
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, 2023
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, 2022
FUND BALANCE, JUNE 30, 2023
See auditors report on pages 11-13.
Exhibit B-10
-121-
Variance with
Final Budget
Final
Positive
Budget
Actual
(Negative)
$1,840,000
$1,839,464
$ (536)
1,840,000
1,839,464
(536)
1,840,000
1,839,464
536
-121-
CITY OF PADUCAH, KENTUCKY
SUPPLEMENTARY INFORMATION
NONMAJOR PROPRIETARY FUNDS
ANNUAL COMPREHENSIVE FINANCIAL REPORT
YEAR ENDED JUNE 30, 2023
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.
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF NET POSITION
NONMAJOR PROPRIETARY FUNDS
JUNE 30, 2023
ASSETS
Current Assets:
Cash and cash equivalents
Receivables, net
Inventory
Total current assets
Noncurrent Assets:
Net depreciable capital assets
Total assets
Deferred Outflows of Resources:
Deferred pension related outflows
Deferred OPEB related outflows
Total deferred outflows of resources
LIABILITIES
Current Liabilities:
Voucher and accounts payable
Accrued payroll
Accrued compensated absences
Unearned revenues
Due to other funds
Total current liabilities
Noncurrent Liabilities:
Net pension liability
Net other post employment benefits liability
Accrued compensated absences
Total noncurrent liabilities
Total liabilities
Deferred Inflows of Resources
Deferred pension related inflows
Deferred OPEB related inflows
Total deferred inflows of resources
NET POSITION
Net invested in capital assets
Restricted - Housing
Unrestricted
TOTAL NET POSITION
See auditors report on pages 11-13.
Exhibit C-1
Section
Civic Transient
Total Nonmajor
Eight
Center Dock
Enterprise
Housing
Fund Fund
Funds
$ 398,255
$ - $ 43,214
$ 441,469
38,352
- -
38,352
-
- 17,564
17,564
436,607
- 60,778
497,385
1,327
437,934
29,410
45,413
o')l
92,731
86,973
3,400
186
183,290
200,999
54,868
7,790
263,657
446,947
27,339
29,617
56,956
1,327
7,527
$ 8,854
-122-
- 1,327
60,778 498,712
- 29,410
45,413
538 93,269
- 770 87,743
- - 3,400
- - 186
1,308 184,598
- 200,999
- - 54,868
- - 7,790
- 263,657
1,308 448,255
59,470
$ - $ 59,470
27,339
29,617
56,956
1,327
7,527
59,470
$ 68,324
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN NET POSITION
NONMAJOR PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2023
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.
Section Civic
Eight Center
Housing Fund
inn _
Exhibit C-2
Transient Total Nonmajor
Dock Enterprise
Fund Funds
$133,436 $ 133,436
- 100
133,436 133,536
2,249,270
-
122,654
2,371,924
1,457
-
-
1,457
2,250,727
-
122,654
2,373,381
(2,250,627)
-
10,782
(2,239,845)
2,056,885
-
-
2,056,885
19
-
2,195
2,214
2,056,904
-
2,195
2,059,099
(193,723)
-
12,977
(180,746)
-
367
-
367
-
(69,406)
-
(69,406)
-
(69,039)
-
(69,039)
(193,723)
(69,039)
12,977
(249,785)
202,577
69,039
46,493
318,109
$ 8,854
$ -
$ 59,470
$ 68,324
-123-
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF CASH FLOWS
NONMAJOR PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2023
Cash Flows from Operating Activities:
Cash received from customers
Payments to employees
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:
Proceeds from sale of assets
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, 2022
CASH AND CASH EQUIVALENTS,
JUNE 30, 2023
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.
Section
Civic
Eight
Center
Housing
Fund
- 367
- (69,406)
(79)
-
100
-
(1,982,202)
(367)
Transient
Dock
Fund
$ 133,436
(20,959)
(105,513)
Exhibit C-3
Total Nonmajor
Enterprise
Funds
$ 133,436
(21,038)
100
(1) nQQ MIM
(1,982,181) (367)
6,964 (1,975,584)
2,018,533 -
- 2,018,533
- 367
- 367
- (69,406)
- (69,406)
2,018,533 (69,039)
- 1,949,494
- 69,406
- 69,406
- 69,406 - 69,406
19 - 2,195 2,214
36,371 - 9,159 45,530
361,884 - 34,055 395,939
$ 398,255 $ - $ 43,214 $ 441,469
$ (2,250,627) $
1,457
- $ 10,784 $ (2,239,843)
1,457
(4,355) (4,355)
18,110 - - 18,110
129,570 - - 129,570
119,309 (367) 535 119,477
$ (1,982,181) $ (367) $ 6,964 $(1,975,584)
-124-
CITY OF PADUCAH, KENTUCKY
SUPPLEMENTARY INFORMATION
INTERNAL SERVICE FUNDS
ANNUAL COMPREHENSIVE FINANCIAL REPORT
YEAR ENDED JUNE 30, 2023
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, 2023
ASSETS
Health
Fleet
Fleet Lease
Insurance
Insurance
Combined
Current Assets:
Maintenance
Trust
Fund
Fund
Total
Cash and cash equivalents
$ 77,379
$2,956,651
$ 845,686
$ 3,589,914
$ 7,469,630
Investments
-
-
-
-
-
Receivables, net
32,146
-
-
75,288
107,434
Prepaid expense
-
2,065,706
-
-
2,065,706
Inventories
70,677
-
-
-
70,677
Total current assets
180,202
5,022,357
845,686
3,665,202
9,713,447
Noncurrent Assets:
Net depreciable capital assets
-
3,160,639
-
-
3,160,639
Total assets
180,202
8,182,996
845,686
3,665,202
12,874,086
Deferred Outflows of Resources:
Deferred pension related outflows
132,119
-
-
-
132,119
Deferred OPEB related outflows
94,622
-
-
-
94,622
Total deferred outflows of resources
226,741
-
-
-
226,741
LIABILITIES
Current Liabilities:
Voucher and accounts payable
758
-
-
268,966
269,724
Accrued payroll and payroll taxes
24,470
-
-
-
24,470
Accrued compensated absences
28,191
-
-
-
28,191
Total current liabilities
53,419
-
-
268,966
322,385
Noncurrent Liabilities:
Pensions obligation
834,214
-
-
-
834,214
Other post employment benefits (OPEB)
227,721
-
-
-
227,721
Accrued compensated absences
21,544
-
-
-
21,544
Total noncurrent liabilities
1,083,479
-
-
-
1,083,479
Total liabilities
1,136,898
-
-
268,966
1,405,864
Deferred Inflows of Resources
Deferred pension related inflows
21,340
-
-
-
21,340
Deferred OPEB related inflows
89,760
-
-
-
89,760
Total deferred inflows of resources
111,100
-
-
-
111,100
NET POSITION
Net invested in capital assets
-
3,160,639
-
-
3,160,639
Unrestricted
(841,055)
5,022,357
845,686
3,396,236
8,423,224
TOTAL NET POSITION
$ (841,055)
$8,182,996
$ 845,686
$ 3,396,236
$11,583,863
See auditors report on pages 11-13
-125-
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF REVENUES, EXPENSES,
AND CHANGES IN NET POSITION
INTERNAL SERVICE FUNDS
FOR THE YEAR ENDED JUNE 30, 2023
Operating Revenues:
Charges for services - internal
Charges for services - external
Total operating revenues
Operating Expenses:
Vehicle maintenance
Administrative
Insurance premium, claims and medical
Depreciation
Total operating expenses
Operating income (loss)
Nonoperating Revenues and (Expenses):
Interest and investment income
Gain (loss) on disposal of property
and equipment
Total nonoperating revenues
(expenses)
Income (loss) before transfers
Contributions and 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 D-2
-126-
Health
Fleet
Fleet Lease
Insurance
Insurance
Combined
Maintenance
Trust
Fund
Fund
Total
$ 744,179
$ 1,079,142
$ 1,275,188
$ 3,105,386
$ 6,203,895
-
-
-
253,970
253,970
744,179
1,079,142
1,275,188
3,359,356
6,457,865
736,174
-
-
-
736,174
-
57,194
-
638,518
695,712
-
-
1,269,238
3,032,903
4,302,141
3,664
866,507
-
-
870,171
739,838
923,701
1,269,238
3,671,421
6,604,198
4,341
155,441
5,950
(312,065)
(146,333)
-
141,632
-
143,013
284,645
175
64,394
-
-
64,569
175
206,026
-
143,013
349,214
4,516
361,467
5,950
(169,052)
202,881
77,113
-
23,777
-
100,890
-
-
-
(75,700)
(75,700)
77,113
-
23,777
(75,700)
25,190
81,629
361,467
29,727
(244,752)
228,071
(922,684)
7,821,529
815,959
3,640,988
11,355,792
$ (841,055)
$ 8,182,996
$ 845,686
$ 3,396,236
$11,583,863
-126-
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF CASH FLOWS
INTERNAL SERVICE FUNDS
FOR THE YEAR ENDED JUNE 30, 2023
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:
Interest and dividends
Net cash used by investing activities
Net increase (decrease) in cash
Exhibit D-3
77,113
23,777
- 100,890
(75,700) (75,700)
77,113 - 23,777 (75,700) 25,190
175 89,810 - - 89,985
- (538,188) - - (538,188)
175 (448,378) - - (448,203)
- 141,632 - 143,013 284,645
- 141,632 - 143,013 284,645
and cash equivalents 50,129 (737,298) 29,727 (196,805) (854,247)
Cash and cash equivalents, July 1, 2022 27,250 3,693,949 815,959 3,786,719 8,323,877
CASH AND CASH EQUIVALENTS,
JUNE 30, 2023 $ 77,379 $2,956,651 $ 845,686 $ 3,589,914 $ 7,469,630
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.
$ 4,341 $ 155,441 $
5,950 $ (312,065) $ (146,333)
3,664 866,507
Health
(4,253) -
Fleet
Fleet Lease
Insurance
Insurance
Combined
Maintenance
Trust
Fund
Fund
Total
$ 739,926
$1,079,142
$ 1,275,188
$ 3,357,529
$ 6,451,785
(275,585)
(1,452,500)
-
-
(1,728,085)
(491,500)
-
-
-
(491,500)
-
-
-
(2,983,131)
(2,983,131)
-
(57,194)
(1,269,238)
(638,516)
(1,964,948)
(27,159)
(430,552)
5,950
(264,118)
(715,879)
77,113
23,777
- 100,890
(75,700) (75,700)
77,113 - 23,777 (75,700) 25,190
175 89,810 - - 89,985
- (538,188) - - (538,188)
175 (448,378) - - (448,203)
- 141,632 - 143,013 284,645
- 141,632 - 143,013 284,645
and cash equivalents 50,129 (737,298) 29,727 (196,805) (854,247)
Cash and cash equivalents, July 1, 2022 27,250 3,693,949 815,959 3,786,719 8,323,877
CASH AND CASH EQUIVALENTS,
JUNE 30, 2023 $ 77,379 $2,956,651 $ 845,686 $ 3,589,914 $ 7,469,630
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.
$ 4,341 $ 155,441 $
5,950 $ (312,065) $ (146,333)
3,664 866,507
- - 870,171
(4,253) -
- (1,827) (6,080)
- (1,452,500)
- - (1,452,500)
(6,351) -
- - (6,351)
11,110 -
- - 11,110
(49,641) -
- - (49,641)
13,971 -
- 49,774 63,745
$ (27,159) $ (430,552) $ 5,950 $ (264,118) $ (715,879)
-127-
CITY OF PADUCAH, KENTUCKY
SUPPLEMENTARY INFORMATION
FIDUCIARY FUNDS
ANNUAL COMPREHENSIVE FINANCIAL REPORT
YEAR ENDED JUNE 30, 2023
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, 2023
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.
-128-
Exhibit E-1
Cemetery
and
Park
Trusts
$ 20,204
1,090,701
1,110,905
$ 1,110,905
CITY OF PADUCAH, KENTUCKY
STATEMENT OF CHANGES IN NET POSITION
FIDUCIARY FUNDS - PRIVATE -PURPOSE TRUST FUNDS
FOR THE YEAR ENDED JUNE 30, 2023
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.
-129-
Exhibit E-2
Cemetery
and
Park
5,835
5,835
65,896
35,715
101,611
107,446
47,926
13,803
61,729
45,717
1,065,188
$ 1,110,905
THIS PAGE INTENTIONALLY LEFT BLANK
CITY OF PADUCAH, KENTUCKY
STATISTICAL SECTION
ANNUAL COMPREHENSIVE FINANCIAL REPORT
YEAR ENDED JUNE 30, 2023
STATISTICAL SECTION
This part of the City of Paducah's annual comprehensive 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 130-134
These schedules contain trend information to help the reader understand how the City's
financial performance and well-being changed over time.
Revenue Capacity 135-140
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 141-144
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 145-146
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 147-149
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
annual comprehensive 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
Prosper Paducah LLC
Boyd Co FKA Whayne Supply Co
LCP Paducah II LLC
Menard LLC
Paducah Medical Investors
Ducmall LLC
Woodstone Enterprises LP
LCP Paducah II LLC
Wal Mart Real Estate Business
Paducah Hospitality Partners
Computer Services Inc
Sams Real Estate Business Trust
Wal-Mart Store
USF Propco I LLC
TOTALS
2023
2014
(1)
(2)
(1)
Percentage of
(2)
Percentage of
Assessed
Total Assessed
Assessed
Total Assessed
Valuation
Valuation
Valuation
Valuation
$ 45,465,000
1.58%
$ 50,900,262
2.37%
25,680,000
0.89%
20,987,627
0.73%
15,674,484
0.54%
14,950,001
0.52%
13,440,090
0.47%
13,440,090
0.63%
13,119,800
0.45%
13,119,800
0.61%
12,429,000
0.43%
12,429,000
0.58%
11,235,596
0.39%
10,646,400
0.37%
10,646,400
0.50%
11,000,000
0.51%
9,083,185
0.42%
9,222,955
0.43%
9,000,000
0.42%
8,156,900
0.38%
$ 183,627,998
6.37%
$ 146,998,592
6.85%
(1) Source - Property Valuation Administration; Assessed value as of January 1, 2022.
(2) Source - Property Valuation Administration; Assessed value as of January 1, 2013.
-137-
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.
-138-
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
2014
4,593,358
4,509,874
98.2%
78,696
4,588,570
99.9%
2015
4,717,382
4,644,522
98.5%
67,774
4,712,296
99.9%
2016
4,879,047
4,802,067
98.4%
70,772
4,872,839
99.9%
2017
4,988,435
4,888,303
98.0%
93,536
4,981,839
99.9%
2018
5,210,864
5,120,761
98.3%
78,096
5,198,857
99.8%
2019
5,453,320
5,323,669
97.6%
111,961
5,435,630
99.7%
2020
5,647,718
5,506,011
97.5%
114,159
5,620,170
99.5%
2021
5,670,177
5,563,728
98.1%
69,091
5,632,819
99.3%
2022
6,109,154
5,972,410
97.8%
90,912
6,063,322
99.2%
2023
6,446,478
6,320,210
98.0%
-
6,320,210
98.0%
(1) Includes current year real and personal property tax.
* Source - City of Paducah Finance Department.
-138-
TABLE 9
CITY OF PADUCAH, KENTUCKY
EMPLOYEE LICENSE TAX COLLECTIONS
LAST TEN FISCAL YEARS
214,149,661
(1) Source - City of Paducah Finance Department - Actual collections during the fiscal year.
-139-
(1)
Direct
Fiscal
Taxes
Tax
Year
Collected
Rate
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%
2023
25,904,591
2.00%
214,149,661
(1) Source - City of Paducah Finance Department - Actual collections during the fiscal year.
-139-
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.
-140-
2023
(1)
Percentage of
Taxpayers
Number of
Percentage
Taxes
Total Employee
By Range
Filers
of Total
Collected
License Tax
$0-$50,000
2,307
96.61%
11,128,045
42.96%
$50,001 - $100,000
51
2.14%
3,574,685
13.80%
$100,001 - $500,000
25
1.05%
4,769,674
18.41%
Greater than $500,000
5
0.21%
6,432,187
24.83%
TOTALS
2,388
100.00%
$ 25,904,591
100.00%
2014
(1)
Percentage of
Taxpayers
Number of
Percentage
Taxes
Total Employee
By Range
Filers
of Total
Collected
License Tax
$0-$50,000
2,479
98.10%
8,768,786
48.41%
$50,001 - $100,000
23
0.91%
1,721,032
9.50%
$100,001 - $500,000
23
0.91%
4,761,329
26.28%
Greater than $500,000
2
0.08%
2,863,249
15.81%
TOTALS
2,527
100.00%
$ 18,114,396
100.00%
(1) Source - City of Paducah Finance Department - Actual collections during the fiscal year.
-140-
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TABLE 13
CITY OF PADUCAH, KENTUCKY
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
AS OF JUNE 30, 2023
City of Paducah
Paducah Independent School District
McCracken County
McCracken County Board of Education
(1)
Reported Percentage
Debt Applicable
Outstanding to the City
$ 39,674,552 100.00%
70,082,000 * 100.00%
Estimated
Share of
Direct and
Overlapping
Debt
$ 39,674,552
70,082,000
17,212,186 * 46.00% 7,917,606
96,000,000 * 32.20% 30,912,000
Overlapping debt 183,294,186 108,911,606
TOTAL DIRECT AND OVERLAPPING DEBT $ 222,968,738 $148,586,158
(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.
-143-
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N
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69
69
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69
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69
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2013-2014
2014-2015
2015-2016
2016-2017
2017-2018
2018-2019
2019-2020
2020-2021
2021-2022
TABLE 15
CITY OF PADUCAH, KENTUCKY
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN FISCAL YEARS
(1)
Population
25,024
25,024
25,024
25,024
25,024
25,024
25,024
27,137
27,137
(1)
Personal Per Capita
Income Income
511,240,320
511,240,320
511,240,320
511,240,320
511,240,320
511,240,320
511,240,320
830,934,940
830,934,940
20,430
20,430
20,430
20,430
20,430
20,430
20,430
30,620
30,620 43.8 2,832
2022-2023 27,137 830,934,940 30,620 43.8 2,770
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.
(1)
(2)
Median
School
Age
Enrollment
41.4
3,138
41.4
2,843
41.4
3,139
41.4
3,132
41.4
2,835
41.4 2,980
41.4 3,232
43.8 2,832
-145-
(3)
Unemployment
Rate
8.2%
5.6%
6.2%
6.8%
6.4%
5.5%
5.4%
5.9%
4.6%
4.3%
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THIS PAGE INTENTIONALLY LEFT BLANK
CITY OF PADUCAH, KENTUCKY
SINGLE AUDIT SECTION
ANNUAL COMPREHENSIVE FINANCIAL REPORT
YEAR ENDED JUNE 30, 2023
CITY OF PADUCAH, KENTUCKY
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE
YEAR ENDED
JUNE 30, 2023
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:
Section 8 Housing Choice Vouchers
14.871
N/A
$
$ 2,056,885
Passed -through Kentucky Governors
Office for Local Development:
Community Development Block Grants
14.228
N/A
197,500
300,000
Total Department of Housing and Urban
Development
197,500
2,356,885
Department of Justice:
Direct Programs:
Bulletproof Vest Partnership Program
16.607
N/A
-
7,173
Public Safety Partnership and Community
Policing Grants
16.710
N/A
192,302
Edward Byrne Memorial Justice
Assistance Grant Program
16.738
N/A
12,284
Total Department of Justice
211,759
Department of Transportation:
Passed -through Kentucky Transportation Cabinet:
Highway Safety Cluster:
State and Community Highway Safety
20.600
PT -22-65
2,368
State and Community Highway Safety
20.600
PT -23-54
14,652
Total Highway Safety Cluster
17,020
Total Department of Transportation
17,020
U.S. Department of the Treasury
Direct Programs:
Equitable Sharing
21.016
N/A
8,132
Passed -through Kentucky Department for
Local Government:
Coronavirus State and Local Fiscal
Recovery Funds
21.027
N/A
3,922,185
Total U.S. Department of the Treasury
3,930,317
Department of Environmental Protection
Agency:
Direct Programs:
Brownfields Multipurpose, Assessment, Revolvin€
Loan Fund, and Cleanup Cooperative Agreement:
66.818
N/A
55,480
Total Department of Environmental
Protection Agency
55,480
Department of Homeland Security:
Passed -through Kentucky Division of
Emergency Management:
Disaster Grants - Public Assistance
97.036
N/A
971,851
Disaster Grants - Public Assistance
97.036
N/A
43,299
Assistance to Firefighters Grant
97.044
N/A
191,181
Homeland Security Grant Program
97.067
N/A
93,864
Total Department of Homeland Security
-
1,300,195
TOTAL EXPENDITURES OF FEDERAL AWARDS
$ 197,500
$ 7,871,656
See accompanying notes to schedule of expenditures of federal awards
-150-
CITY OF PADUCAH, KENTUCKY
NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2023
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
Program Title Number Provided
Four Rivers Recovery Center 14.228 $197,500
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 S 7.871.656
Federal Awards by Fund
General Fund $ 211,822
Capital Improvement Fund 5,397,317
Debt Service Fund -
Special Revenue Fund 205,632
Proprietary Fund 2.056.885
Total Federal Awards S 7.871.656
-151-
"KEMPER
A;.2�q.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 GOVERNMENT AUDITING 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, 2023, 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 19, 2023.
Report on 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.
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 or significant deficiencies may exist that have not been identified.
Report on 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 e Street • Suite 300 • Paducah, KY 42001
Phone: (270)443-4400 Fax: (270)443-0963 kempercpa.com
-152-
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.
k*�
�r
Certified Public Accountants and Consultants
Paducah, Kentucky
December 19, 2023
- 153-
"Wr KE� MPETTR
` CPA 1 G R O 4J P LLP
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, Kentucky'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, Kentucky's major federal programs for the year ended June 30, 2023. City of Paducah, Kentucky's major
federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings
and questioned costs.
In our opinion, City of Paducah, Kentucky complied, in all material respects, with the types of compliance
requirements referred to above that could have a direct and material effect on each of its major federal programs for the
year ended June 30, 2023.
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 Managementfor 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
-154-
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
scope and timing of the audit and any significant
compliance that we identified during the audit.
Report on Internal Control Over Compliance
with governance regarding, among other matters, the planned
deficiencies and material weaknesses in internal control over
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.
k*� cP ,
�r
Certified Public Accountants and Consultants
Paducah, Kentucky
December 19, 2023
- 155-
CITY OF PADUCAH, KENTUCKY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2023
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
Public Safety Partnership and Community
Policing Grant 16.710
Coronavirus State and Local Fiscal
Recovery Funds 21.027
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).
-156-
CITY OF PADUCAH, KENTUCKY
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
YEAR ENDED JUNE 30, 2022
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).
-157-