HomeMy WebLinkAboutJune-30-2007City of Paducah
Paducah, Kentucky
Comprehensive Annual Financial Report
Year Ended June 30, 2007
Issued by the
Finance Department
CITY OF PADUCAH, KENTUCKY
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2007
TABLE OF CONTENTS
Exhibit No. Page No.
Introductory Section:
Letter of Transmittal 1 - 7
Organizational Chart 8
Principal Officials 9
GFOA Certificate of Achievement 10
Financial Section:
Independent Auditor’s Report 11-12
Required Supplementary Information:
Management’s Discussion and Analysis 13-25
Basic Financial Statements:
Government-wide Financial Statements:
Statement of Net Assets 1 26-27
Statement of Activities 2 28-29
Fund Financial Statements:
Governmental Funds:
Balance Sheet 3 30-31
Reconciliation of the Governmental Funds Balance
Sheet to Statement of Net Assets 4 32-33
Statement of Revenues, Expenditures and Changes
in Fund Balances 5 34-35
Reconciliation of the Statement of Revenues,
Expenditures and Changes in Fund Balances of
Governmental Funds to the Statement of Activities 6 36-37
Budgetary Comparison Schedule (Budgetary Basis) –
General Fund 7 38-41
Budgetary Comparison Schedule – Note to RSI – General Fund 8 42
Budgetary Comparison Schedule (Budgetary Basis) –
Special Revenue Investment Fund 9 43
Budgetary Comparison Schedule – Note to RSI – Special
Revenue Investment Fund 10 44
Budgetary Comparison Schedule (Budgetary Basis) –
Special Revenue Investment Fund 11 45
Budgetary Comparison Schedule – Note to RSI – Special
Revenue Investment Fund 12 46
Proprietary Funds:
Statement of Net Assets 13 47
Statement of Revenues, Expenses and Changes in
Fund Net Assets 14 48
Statement of Cash Flows 15 49
Fiduciary Funds:
Statement of Net Assets 16 50
Statement of Changes in Net Assets 17 51
Component Units Financial Statements:
Statement of Net Assets 18 52-53
Statement of Activities 19 54-55
Notes to Financial Statements 56-89
Required Supplementary Information:
Pension Trust Funds Schedules A-1 90
Exhibit No. Page No.
Supplementary Information:
Nonmajor Governmental Funds:
Combining Balance Sheet B-1 91-92
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances B-2 93-94
Detail Schedule of Revenues, Expenditures, and
Changes in Fund Balance – Budget and Actual:
Municipal Aid Program Fund B-3 95
Emergency Communication Service Fund B-4 96
Court Awards Fund B-5 97
Small Grant Fund B-6 98
Hope 3 Implementation Grant Fund B-7 99
Home Grant Fund B-8 100
HUD Revolving Grant Fund B-9 101
Paducah Housing Authority Police Grant Fund B-10 102
Debt Service Fund B-11 103
Nonmajor Proprietary Funds:
Combining Statement of Net Assets C-1 104
Combining Statement of Revenues, Expenses and
Changes in Fund Net Assets C-2 105
Combining Statement of Cash Flows C-3 106
Internal Service Funds:
Combining Statement of Net Assets D-1 107
Combining Statement of Revenues, Expenses, and
Changes in Fund Net Assets D-2 108
Combining Statement of Cash Flows D-3 109
Fiduciary Funds:
Combining Statement of Net Assets – Pension
Trust Funds E-1 110
Combining Statement of Changes in Net Assets –
Pension Trust Funds E-2 111
Combining Statement of Net Assets –
Private-purpose Trust Funds E-3 112
Combining Statement of Changes in Net Assets –
Private-purpose Trust Funds E-4 113
Statement of Changes in Assets and
Liabilities – Agency Funds E-5 114
Table No. Page No.
Statistical Section:
Net Assets by Component 1 115
Changes in Net Assets 2 116-117
Fund Balances, Governmental Funds 3 118
Changes in Fund Balances, Governmental Funds 4 119
Assessed and Estimated Actual Value of
Taxable Property 5 120
Property Tax Rates - Direct and Overlapping
Governments 6 121
Principal Taxpayers 7 122
Secured Tax Levies and Collections 8 123
Employee License Tax Collections 9 124
Principal Employee License Taxpayers 10 125
Ratio of Outstanding Debt by Type 11 126
Ratio of Net General Bonded Debt Outstanding 12 127
Table No. Page No.
Statistical Section:
Direct and Overlapping Governmental
Activities Debt 13 128
Legal Debt Margin Information 14 129
Schedule of Sewer Revenue Bond Coverage 15 130
Demographic and Economic Statistics 16 131
Principal Employers 17 132
City Full-Time Employees by Function 18 133
Operating Indicators by Function 19 134
Capital Asset Statistics by Function 20 135
Single Audit Section:
Schedule of Expenditures of Federal Awards 136-137
Notes to the Schedule of Expenditures of Federal
Awards 138
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 139-140
Report on Compliance with Requirements Applicable
to Each Major Program and On Internal Control Over
Compliance in Accordance with OMB Circular A-133 141-142
Schedule of Findings and Questioned Costs 143-144
CITY OF PADUCAH, KENTUCKY
INTRODUCTORY SECTION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2007
December 17, 2007
Honorable Mayor and Commissioners
City of Paducah
Paducah, Kentucky
We are pleased to submit Paducah's Comprehensive Annual Financial Report for the year ended June 30, 2007.
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, 2007, is in
the Management’s Discussion and Analysis (MD&A) section of this report, immediately following the Report
of Independent Auditors. The letter of transmittal is written to complement the MD&A and the financial
statements, and should be read from that perspective and in conjunction with all other sections of the CAFR.
THE CITY
Paducah was established in 1827 by explorer General William Clark. The City of Paducah is situated at the
confluence of the Ohio and Tennessee Rivers in the north central portion of McCracken County. Paducah is
the largest city both in the county and in the Jackson Purchase eight county region. The City has established
itself as the cultural, economic, medical and transportation center for not only the Jackson Purchase region but
for a large portion of Southern Illinois and portions of Western Tennessee and Southeastern Missouri.
Industry
The Paducah area has moved from the traditional “manufacturing industry” to a “service industry” economy.
Multi-state computer services, significant banking corporations, wholesale and retail trade, river-related
services, the health care industry and related services are the major employment centers. Traditional
manufacturing employment is heavily concentrated in the categories of chemicals, petroleum, coal and rubber,
and enriched uranium.
Economic Development Activities
The Greater Paducah Economic Development Council (GPEDC) coordinates the City’s efforts in
strengthening and building economic development activities. Representatives of financial institutions, utilities,
local government, education and the business community serve as the Board of Directors. In existence since
1987, GPEDC assumes and carries out the responsibility of working with existing industry and business, as
well as identifying and recruiting new companies to the City of Paducah. Additionally, GPEDC is responsible
for development of long-term strategy for economic development activities and coordinates local entities in the
accomplishment of those strategies.
Equal Opportunity Employer
CITY OF PADUCAH
Finance Department
P.O. Box 2267
Paducah, KY 42002-2267
270-444-8512
In the early 1990s, the City of Paducah, the State of Kentucky and several federal agencies, in conjunction with
business, developed a 650-acre ‘Information Age’ Park. This park is designed to appeal to firms needing
advanced telecommunications and computing capabilities. The Info Park’s focal point was centered on the
Resource Center, which was designed to coordinate resources of government, business and education.
In 1997, the City of Paducah jointly with the County of McCracken acquired the ‘Industrial Park West of
Paducah and McCracken County’. This park contains 218 acres with immediate access to two major railroad
lines, Paducah and Louisville and Paducah and Illinois (formerly Illinois Central). The park is located within
the southwest quadrant of the I-24/Cairo Road interchange.
In 2007, GPEDC began assembling property to establish Riverport West, a 1,000-acre industrial park with rail
and river access in western McCracken County.
In FY2007, as the following table indicates, there were 104 jobs created and retained, and $9.1 million capital
invested not to mention the added fiscal impact from the jobs created and capital invested. Additionally, the
City’s second Lowe’s, New York and Company, and numerous other retail shops opened, creating several
dozen more service industry jobs, further strengthening Paducah’s retail market.
Summary of Capital Investment and New/Retained Jobs
FY2007
Jobs
Company
Capital
Investment
In Millions
New
Retained
Dynatorch $0.4 5 7
James Marine $2.0 45 0
Crounse $4.5 0 14
Western Rivers $2.2 33 0
Total $9.1 83 21
Churches And Schools
A relatively strong religious base is evident in the community, as demonstrated by the many churches in
Paducah. Numerous churches, representing many of the major denominations, are located within the City.
Several area churches offer televised activities as a convenience to those who do not attend church.
Elementary and secondary education in Paducah is provided by the Paducah Independent School System, the
McCracken County School System, Community Christian Academy, and by the St. Mary’s Parochial School
System. Higher education is available locally from West Kentucky Community and Technical College
(WKCTC), formerly known as Paducah Community College, a two-year institution affiliated with the
University of Kentucky’s community college system. WKCTC also serves as a site for the University of
Kentucky extended campus graduate programs, in addition to a four-year engineering college in conjunction
with the University of Kentucky. The private American Justice School of Law opened in the Information Age
Park in 2005. In 2007, Paducah and WKCTC laid plans to create a new Paducah School for the Arts.
Medical Facilities
Paducah serves as the regional medical center for much of the Jackson Purchase Area of Western Kentucky, a
large portion of Southern Illinois, and Northwestern Tennessee. Paducah’s medical industry has almost every
major medical specialty represented in the physician population. The medical industry, represented by
Lourdes Hospital and Western Baptist Hospital, provides over 640 beds for medical needs. The two largest
hospitals, together, employ approximately 2,900 persons.
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Recreation And Culture
Citizens have available a wide range of recreational and cultural activities which cater to diverse tastes. Area
residents may choose from fishing on nearby Kentucky and Barkley Lakes to enjoying the performing arts.
City parks provide areas for baseball, softball, golf, football, tennis, disc golf, skate boarding, soccer and
picnicking. The Parks Services Department offers a substantial number of activities for people of all ages.
The ‘Dogwood Festival’, held in April, highlights the coming of spring in Paducah. Residents are encouraged
to spotlight their trees to illuminate a driving tour to celebrate an abundance of dogwood trees.
The LowerTown Art and Music Festival is uniquely showcased within the borders of Paducah’s 140-year-old
historic neighborhood. The LowerTown Art and Music Festival is an outdoor-juried show in its 6th year. The
weekend includes jazz, salsa, zydeco and blues music, as well as food from area restaurants. Over 15,000
people attended in 2007.
Paducah is the site of the Museum of the American Quilter’s Society. The museum, dedicated in 1991, is the
centerpiece for the quilters’ annual convention held in April. The convention attracts an estimated 30,000
visitors to Paducah annually.
The ‘After Dinner Downtown Program’, which began in May 1997, started out as an experiment to draw
people to Paducah's downtown district. From May to September, businesses remain open late on Saturday
night, while street corner musicians of all types entertain.
The ‘Paducah Summer Festival’, started in 1967, is an annual celebration held during the last week in July.
Some of the Festival’s activities include skydiving, hot air balloon races, a variety of music concerts, and
usually concludes with a spectacular riverfront fireworks display.
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. Over time, this
annual event has grown to incorporate other events, including ‘Marine Industry Day’ and ‘Old Market Days’.
The ‘Festival of Lights’, started in 1992, is another annual event. This festival marks the beginning of the
winter holiday season, with the official lighting of the trees and buildings in downtown Paducah. The season
includes a ‘Holiday Parade’ and features a ‘Candle Light Christmas Trail’.
Paducah has an active symphony and several theater groups. The Paducah Symphony Orchestra stages
concerts during the winter season, with the Market House Theater presenting several productions during the
same time period. In addition, West Kentucky Community and Technical College’s ‘Arts in Focus’ series
sponsors a variety of professional productions.
The most recent addition to the City’s cultural lineup is the ‘Luther F. Carson Four Rivers Center for the
Performing Arts’. The Center opened in February 2004, as a regional, multiple-purpose facility, with a 1,800-
seat main hall designed to accommodate a wide variety of cultural and educational programs.
The McCracken County Public Library offers a large selection of literature, special collections and programs.
The West Kentucky Community and Technical College Library supplements this community resource. The
combined inventories of the two libraries yield nearly 121,000 titles, not counting numerous periodicals and
newspapers.
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THE GOVERNMENT
Paducah operates under a Council-City Manager form of government. The Paducah Board of Commissioners
is made up of a Mayor and four Commissioners elected at large by the citizens on a non-partisan basis. The
Mayor is elected for a four-year term and Commissioners for a two-year term. The Mayor and Commissioners
have equal voting powers.
The Board of Commissioners sets the policies that govern the City. It appoints advisory citizens groups that
help in the decision-making process. The City Manager is appointed by the Board and assists it in formulating
objectives, policies and programs. The City Manager is responsible for the day-to-day operation of the City’s
342 full-time employees as of June 30, 2007. Department managers are responsible for their respective
departments and report directly to the City Manager.
REPORTING ENTITY AND ITS SERVICES
For financial statement purposes, as required by generally accepted accounting principles, the City’s
Comprehensive Annual Financial Report includes all City of Paducah financial statements (primary
government) and its component units. The component units discussed below are included in the City’s
reporting entity because of the significance of their operational or financial relationships with the City of
Paducah.
Blended units are presented as such because the units’ governing bodies are substantially the same as the
governing body of the City, or provide services almost entirely to the City of Paducah. The City has only one
blended unit: the Police and Firefighters’ Pension Fund, which was established for the benefit of police and
firemen of the City.
The following component units have been presented as discrete units to emphasize that they are legally
separate from the City. Paducah Water Works, Paducah Power System, and Transit Authority of the City of
Paducah are all included in the City’s financial statements because of their financial relationship with the City.
The City provides a full range of municipal services, including police and fire protection; maintenance of
streets and infrastructure; sanitation services; storm sewer services; cultural events and recreation activities.
Accounting System
The City’s accounting system is organized on the basis of separate funds, each of which is considered to be a
separate accounting entity. The financial activities of each fund generate a separate set of self-balancing
accounts, which comprise its assets, liabilities, fund equity, revenues, and expenditures/expenses. Municipal
resources are allocated to and accounted for in individual funds based upon the purposes for which they are to
be spent and the means by which spending activities are controlled.
The City’s accounting records for the governmental funds and agency funds are maintained on a modified
accrual basis, with revenues being recorded when “measurable and available” and expenditures being recorded
when the services or goods are received and the liabilities are incurred. Accounting records for the City’s
proprietary funds and trust funds are maintained on the accrual basis, with revenues recognized when earned
and expenses recorded when the liability is incurred or economic asset used.
Internal Control
In developing and evaluating the City’s accounting system, consideration is given to the adequacy of internal
controls. Internal controls were designed for Paducah’s accounting system to reasonably safeguard its assets
against loss from unauthorized use or disposition, check the accuracy of accounting data, promote operational
efficiency and encourage adherence to prescribed managerial policies.
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Budgetary Control
Paducah’s budget process provides for input from department managers, top management, elected officials and
the public to determine what programs and services will be provided for during the upcoming year. Budgetary
control is maintained at the departmental level by comparing budgeted expenditures with actual expenditures
on a periodic and year-to-date basis. An expenditure, which would result in an overrun of department
appropriation, cannot be made until additional funds are appropriated and a budget amendment is approved.
Purchase orders which result in an overrun of department appropriations cannot be honored until additional
appropriations are made available. Open encumbrances at fiscal year-end, if any, are reported as reservations
of fund balance. 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. As part of the City’s annual budget process, financial
policies are reviewed and amended as necessary. In FY2007, there were no changes in policy that would have
a significant impact on the financial statements of the City.
LONG-TERM FINANCIAL PLANNING
On October 1, 2005, the City’s payroll tax was increased ½ cent. As a result of the payroll tax increase, the
City Commission created the Investment Fund. The Investment Fund is funded with the ½ cent increase and is
dedicated to the following purposes: economic development, neighborhood redevelopment, infrastructure
capital investment, and property tax relief. During the FY 2008 budget process, the Commission reviewed
numerous decision packages proposed for the Investment Fund Budget; expenditures totaling $3.875 million
were appropriated.
The City has numerous infrastructure/capital items that will affect the long-term financial planning process.
The following projects are two examples of future considerations facing the City:
Floodwall Restoration. The 12.5-mile long floodwall system protecting a large portion of the Paducah-
McCracken area is approaching 60 years of age. It is still in good condition long beyond its design life;
however, it is in need of necessary repairs. The estimated cost of this restoration project is approximately $6
million. Anticipated grant funds will cover 65% of the project, but the City will proceed with an expenditure
of around $2 million to make the most seriously needed repairs.
Riverfront Redevelopment Plan. The City’s Riverfront Redevelopment Plan includes proposed improvements
that will provide public amenities, recreational facilities & public spaces that will tie the City’s downtown to
the River. The plan includes steamboat landing redevelopment, a public marina, boat ramp, and recreational
trails and shoreline enhancements, just to name a few. Completion of Phase I & Phase II of the riverfront
redevelopment will cost an estimated $46.2 million. In FY2007 the City was allocated $5.3 million in federal
funds for Phase 1. As the project gets underway, property acquisition, construction, and eventually operating
costs will be a long-term planning consideration.
ECONOMIC CONDITION
The City continues to be aggressive in promoting economic development, since new developmental job growth
is necessary to ensure the continued stability of the City’s tax base. Economic indicators and trends reflect that
the area’s economy has remained steady in recent years and is expected to continue to be steady over the near-
term. Area employment remains stable with 30,047 persons employed (McCracken County) as of June 30,
2007.
The June 2007 unemployment rate was 5.6% (McCracken County), which is 19% higher than the federal rate
of 4.7%. The local unemployment rate of 5.6%, compares favorably to last year’s 5.7%. The number of active
electric and water meters was nearly the same as the prior year. The number of building and electric permits
obtained was 1,418 for fiscal year 2007 valued at $71.4 million, which is $20.7 million up from fiscal year
2006.
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CASH MANAGEMENT
The Finance Department is responsible for the custody, investment and disbursement of all funds of the City in
accordance with the procedures adopted by the City Commission. It is the City’s policy to invest funds in a
manner that will provide the highest investment return with the maximum security of principal, while meeting
the City’s daily cash flow demands. The City’s investments are governed by Kentucky Revised Statute (KRS)
66.480, and an investment policy approved by the City Commission.
All funds, except trust funds which are governed by their respective investment policies, were invested in
either obligations of the United States or its agencies, or collateralized Certificates of Deposit. Interest income
totaling approximately $724 thousand was earned in these funds during this fiscal year.
RISK MANAGEMENT
In recent years, attention has been focused on safety in the workplace. Working with the Kentucky League of
Cities (KLC) has produced numerous enhancements in worker safety. In fiscal year 2005, a risk manager was
hired in order to more aggressively address risk issues. The City has selected various insurance coverage to
mitigate potential risk, with premiums/deductibles remaining flat at approximately $1.2 million for both fiscal
years 2007 and 2006 for general liability, public officials liability, auto, law enforcement and workers
compensation.
PENSION FUND MANAGEMENT
The City of Paducah employees are covered by one of three retirement systems: (1) Police and Firefighters’
Pension Fund (PFPF); (2) County Employees’ Retirement System (CERS); and (3) Appointive Employees’
Pension Fund (AEPF).
The PFPF is a single-employer contributory defined benefit plan established by local ordinance under
Kentucky statutes. Members contribute 8% of their gross earnings. The investments of this fund are managed
by a six-member board of trustees, which utilizes BB&T as money managers. Monthly reports are received,
and monthly meetings are held with the money managers to review investment progress and strategy. The
financial health of the fund is evaluated by an annual actuarial report.
In the past year, the PFPF had a net asset increase of $307,000, with net assets valued at $14.5 million on June
30, 2007. In November 2005, the City issued general obligation bonds of $6.1 million to finance the Police
and Firefighters’ Pension Fund estimated actuary liability. There were 3 active members and 88 retirees and/or
beneficiaries in this fund as of June 30, 2007. The most recent actuarial report prepared for the PFPF was as of
July l, 2007.
The CERS is a multiple employer cost sharing defined benefit plan administered by Kentucky Retirement
System. Effective August 1, 1988, all but 21 active police and firefighters opted to transfer from PFPF to the
County Employees’ Retirement System.
Non-hazardous duty employees contribute 5%, while hazardous duty employees contributed 7% until August
1, 1998. Hazardous duty employees contribute 8% effective August 1, 1998, due to a change in state pension
law. The City contributed 13.19% for non-hazardous and 28.21% for hazardous duty employees in fiscal year
2007.
The AEPF is a single-employer contributory defined benefit plan created by local ordinance under Kentucky
statute. While there are no active members in the plan, there are 9 retirees and/or beneficiaries receiving
benefits from the fund as of June 30, 2007. Retirees are former non-hazardous duty municipal employees who
retired prior to the statewide CERS plan. Funding was formerly provided by a special ad valorem tax, with
any shortfall to be covered by a transfer from the City’s General Fund. The AEPF had a net asset decrease of
$27,068 in fiscal year 2007, with net assets valued as of June 30, 2007, of $317,575.
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INDEPENDENT AUDIT
Kentucky Revised Statute 91 A-040 requires an annual audit of each fund of the City by an auditor of public
accounts or a certified public accountant. The independent certified public accounting firm of Kemper CPA
Group, LLP has conducted this audit and their opinion has been included in this report. The City is also
subject to the Single Audit Act Amendments of 1996 reporting requirements. The Single Audit Report is
included within this report.
CERTIFICATE OF ACHIEVEMENT
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate
of Achievement for Excellence in Financial Reporting to the City of Paducah, Kentucky for its comprehensive
annual financial report for the fiscal year ended June 30, 2006. This was the sixteenth consecutive year that
the City achieved this prestigious award.
In order to be awarded a Certificate of Achievement for Excellence in Financial Reporting, a government must
publish an easily readable and efficiently organized comprehensive annual financial report. This report must
satisfy both generally accepted accounting principles and applicable legal requirements.
A Certificate of Achievement for Excellence in Financial Reporting is valid for a period of one year only. We
believe our current comprehensive annual financial report continues to meet the Certificate of Achievement
Program’s requirements, and we are submitting it to GFOA to determine its eligibility for another certificate.
ACKNOWLEDGMENTS
The preparation of this report on a timely basis could not be accomplished without the efficient and dedicated
services of the entire staff of the Finance Department. We wish to express our appreciation to all members of
the Finance Department who assisted and contributed to its preparation, and special thanks to Kemper CPA
Group, LLP. We also thank the Mayor and City Commission for their interest and support in planning and
conducting the financial operations of the City in a responsible and progressive manner.
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CITY OF PADUCAH, KENTUCKY ORGANIZATIONAL CHART CITIZENS OF PADUCAH CITIZENS OF PADUCAH Advisory Board and Committees City Attorney Facility Maintenance Division Engineering Division Flood Control Division Street Division -8- Downtown Development Solid Waste Fleet Maintenance DivisionCity Manager Mayor and Commissioners Risk Manager Parks Department Inspection City Clerk Fire Department Police Department Human Resources Engineering Department Public Information Public Works Department Finance Department Planning Department
CITY OF PADUCAH, KENTUCKY
PRINCIPAL OFFICIALS
BOARD OF COMMISSIONERS
Mayor William F. Paxton
Mayor Pro tem Robert Coleman
Commissioner Gerald Watkins
Commissioner Gayle Kaler
Commissioner Buz Smith
CITY MANAGER
James Zumwalt
Human Resources Herschel Dungey
Finance Jonathan Perkins, C.P.A.
Police Chief Randy Bratton
Fire Chief Redell Benton
City Engineer Richard Murphy
Planning Thomas Barnett
Parks Services Mark Thompson
Inspections Joel Scarbrough
Public Works Earnie Via
Information Services Greg Mueller
City Clerk Tammy Brock
Risk Manager Cindy Medford
Public Information Pam Spencer
Downtown Development Steve Doolittle
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CITY OF PADUCAH, KENTUCKY
FINANCIAL SECTION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2007
CITY OF PADUCAH, KENTUCKY
REQUIRED SUPPLEMENTARY INFORMATION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2007
CITY OF PADUCAH, KENTUCKY
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2007
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, 2007. 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 26-89) provided in this document.
The City first implemented Government Accounting Standards Board Statement 34, Basic Financial
Statements—and Management’s Discussion and Analysis—for State and Local Governments, for fiscal year
2003.
I. Financial Highlights
Assets exceeded liabilities by $49.5 million at the close of the 2006-2007 fiscal year. Of this
amount, $8.9 million (unrestricted net assets) may be used to meet City government’s ongoing
obligations to citizens and creditors.
Total net assets increased $6.0 million.
At fiscal year end, City governmental funds reported a combined ending fund balance of $16.1
million. Approximately 65% of this total amount, $10.5 million, is unreserved and available for
spending at the City’s discretion. Of the $10.5 million, $534,025 is in various special funds, which
are earmarked for specific purposes.
At the end of the current fiscal year, unreserved general fund balance was $10.0 million, of which
cash makes up approximately $5.3 million. When compared to actual total appropriations, the
general fund cash balance is 18%.
II. Overview of Financial Statements
This discussion and analysis serves as an introduction to the City’s basic financial statements, which
consist of four components: 1) government-wide financial statements, 2) fund financial statements, 3)
component unit financial statements, and 4) notes to the financial statements. This report also contains
other supplementary 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 Assets presents information on all City assets and liabilities, with the
difference between assets and liabilities reported as net assets. Monitoring increases and/or
decreases in net assets over time may serve as a useful indicator of whether the financial position of
the City is improving, stagnating, or deteriorating.
The Statement of Activities presents information showing how the City’s net assets changed during
the fiscal year. All net asset changes are reported as soon as the underlying event giving rise to the
change occurs regardless of the timing of related cash flows. Revenues and expenses are reported in
the Statement of Activities for some items that will only result in cash flows in the future (e.g.,
uncollected taxes and earned but unused vacation leave).
Both of the government-wide financial statements distinguish City functions that are primarily
supported by taxes and intergovernmental revenues (governmental activities) from other City
functions that are intended to recover all or a significant portion of their costs through user fees and
charges (business-type activities). City governmental activities include general government, public
safety, public service, park and recreation, planning and development, and interest on long-term
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debt. Business-type activities of the City include Solid Waste, Civic Center and Telecommunication
Information System Authority (TISA).
Government-wide financial statements include not only the City (the primary government), but also
a legally separate Paducah Water Works, Paducah Power System and Transit Authority of the City
of Paducah (component units) for which the City is financially accountable. Financial information
for the component units is reported separately from the financial information presented for the
primary government itself.
The government-wide financial statements can be found on pages 26-29 of this report.
B. Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over segregated resources
for specific activities or objectives. The City of Paducah, like other state and local governments,
uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.
City funds can be divided into three categories:
1) Governmental Funds. Governmental funds are used to account for essentially the same
functions reported as governmental activities in the government-wide financial statements. Unlike
government-wide financial statements, however, governmental fund financial statements focus on
current sources and uses of spendable resources, as well as on balances of spendable resources
available at the end of the fiscal year. This information may be useful in evaluating a city’s near-
term financing requirements.
The City maintains thirteen (13) 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, and
Investment Funds, all of which are considered to be major funds. Data from the other ten (10) 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 91-103.
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 32-33) and Exhibit 6 (pages 36-37)
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 30-37 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
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.
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The City uses three enterprise funds to account for Solid Waste, Civic Center and TISA, as
well as certain component units that provide electric, water, and public transit. TISA and
Civic Center receive subsidy from the General Fund.
The City’s component unit enterprises include the Paducah Water Works, Paducah Power
System and Paducah Transit Authority, which provide water, electric, light and power
systems, and public transportation. These component units, each of which has their own
board of directors, are also enterprise funds and are shown on pages 47-49.
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 104-106 of this report. Individual data for the
internal service funds is likewise presented in the form of combining statements on pages 107-
109 of this report.
3) Fiduciary Funds. Fiduciary funds are used to account for resources held for the benefit of
parties outside the government and are not reflected in government-wide financial statements
because those resources are not available to support City programs. Individual data for the
City’s five (5) fiduciary funds (Appointive Employees’ Pension, Police and Firefighters’
Retirement, Other Trust Funds, Maintenance and Rehabilitation Trust and Payroll Agency) are
presented in the form of combining statements on pages 110-114 of this report.
C. Notes to the Financial Statements
The notes provide additional information that is essential to fully understanding data provided in the
government-wide and fund financial statements. Notes to the financial statements can be found on
pages 56-89 of this report.
D. Other Information
In addition to basic financial statements and accompanying notes, this report also presents certain
required supplementary information concerning City funding of its obligation to provide pension
benefits to its employees and budgetary comparison schedules for the general and major special
revenue funds.
The combining statements referred to earlier in connection with nonmajor governmental funds,
nonmajor proprietary funds, internal service funds and fiduciary funds are presented immediately
following the required supplementary information on pensions and budgetary comparisons.
Combining fund statements and schedules can be found on pages 91-114 of this report.
III. Government-Wide Financial Analysis
As noted earlier, net assets may serve over time as a useful indicator of the City’s financial position.
City assets exceeded liabilities by $49.5 million as of June 30, 2007.
The largest portion of the City’s net assets (69%) reflects its investment in capital assets (i.e., land,
buildings, machinery, equipment and infrastructure) less outstanding related debt used to acquire those
assets. The City uses these capital assets to provide service to citizens and, as a result, these assets are
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not available for future spending. The City’s capital assets investment is reported net of related debt,
but the resources to pay this debt must be provided from other sources since the capital assets cannot be
used to liquidate the liabilities.
An additional portion of City net assets (13%) represents resources that are subject to external
restrictions on how they may be used. The remaining balance of unrestricted net assets (18%) may be
used to meet the City’s ongoing obligations to citizens and creditors.
As of June 30, 2007, the City reports positive balances in all three categories of net assets, both for the
government as a whole, as well as for its separate governmental and business-type activities.
City of Paducah, Kentucky
Net Assets
June 30
Governmental Activities Business-Type Activities Total Primary Government
2007 2006 2007 2006 2007 2006
Current Assets $ 33,220,547 $ 29,580,305 $ 2,222,258 $ 2,586,401 $ 35,442,805 $ 32,166,706
Capital Assets 38,575,330 36,786,376 1,491,523 1,277,720 40,066,853 38,064,096
Other noncurrent
assets 6,520,288 6,833,601 - - 6,520,288 6,833,601
Total Assets 78,316,165 73,200,282 3,713,781 3,864,121 82,029,946 77,064,403
Current Liabilities 8,045,120 8,287,277 300,832 420,861 8,345,952 8,708,138
Noncurrent liabilities 22,132,588 22,822,101 2,068,712 2,033,450 24,201,300 24,855,551
Total liabilities 30,177,708 31,109,378 2,369,544 2,454,311 32,547,252 33,563,689
Net assets:
Invested in capital
assets, net of related
debt 32,557,572 30,664,671 1,491,523 1,277,720 34,049,095 31,942,391
Restricted 6,523,244 3,708,035 - - 6,523,244 3,708,035
Unrestricted 9,057,641 7,718,198 (147,286) 132,090 8,910,355 7,850,288
TOTAL NET ASSETS $ 48,138,457 $ 42,090,904 $ 1,344,237 $ 1,409,810 $ 49,482,694 $ 43,500,714
A. Analysis of the City’s Operations
The following table provides a summary of the City’s operations for the years ended June 30, 2007
and 2006. Governmental activities increased the City’s net assets by $6,047,553. Business-type
activities decreased the City’s net assets by $65,573.
The following table provides a summary of the City’s operations for the years ended June 30, 2007
and June 30, 2006:
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City of Paducah, Kentucky
Changes in Net Assets
June 30
Governmental Activities Business-Type Activities Total Primary Government
2007 2006 2007 2006 2007 2006
Revenues:
Program revenues:
Charges for services $ 4,038,902 $ 3,452,878 $ 4,153,226 $ 3,829,684 $ 8,192,128 $ 7,282,562
Operating grants/
contributions 2,797,216 2,988,612 - - 2,797,216 2,988,612
Capital grants/
contributions 3,681,490 3,302,568 23,969 22,894 3,705,459 3,325,462
General Revenues:
Property taxes 4,122,538 4,107,934 - - 4,122,538 4,107,934
Franchise taxes 183,736 282,115 - - 183,736 282,115
Telecommunications tax 522,665 626,971 - - 522,665 626,971
Insurance premium tax 4,414,672 3,863,953 - - 4,414,672 3,863,953
Vehicle tax 594,585 518,648 - - 594,585 518,648
Bank tax 163,930 178,871 - - 163,930 178,871
Gross receipts license tax 4,050,057 3,899,432 - - 4,050,057 3,899,432
Employee license tax 16,273,966 14,794,217 - - 16,273,966 14,794,217
Other taxes 499,185 498,409 - - 499,185 498,409
Intergovernmental revenue 1,243,028 1,201,973 - - 1,243,028 1,201,973
Unrestricted investment
earnings 639,702 462,292 83,854 85,786 723,556 548,078
Gain on sale of capital assets 48,656 8,340 16,641 55,337 65,297 63,677
Total revenues 43,274,328 40,187,213 4,277,690 3,993,701 47,552,018 44,080,914
Expenses:
General Government 9,462,543 9,057,295 - - 9,462,543 9,057,295
Public safety 15,182,704 14,592,756 - - 15,182,704 14,592,756
Public service 8,299,658 8,486,662 - - 8,299,658 8,486,662
Park & recreation 1,197,072 1,044,361 - - 1,197,072 1,044,361
Planning & development 1,891,725 2,404,636 - - 1,891,725 2,404,636
Interest on long-term debt 1,134,898 974,101 - - 1,134,898 974,101
Solid Waste - - 4,079,684 3,893,013 4,079,684 3,893,013
Civic Center - - 54,560 45,894 54,560 45,894
TISA - - 267,194 269,781 267,194 269,781
Total expenses 37,168,600 36,559,811 4,401,438 4,208,688 41,570,038 40,768,499
Increase (decrease) in Net
assets before transfers 6,105,728 3,627,402 (123,748) (214,987) 5,981,980 3,412,415
Transfers (58,175) (115,754) 58,175 115,754 - -
Change in net assets 6,047,553 3,511,648 (65,573) (99,233) 5,981,980 3,412,415
Net assets, July 1 42,090,904 38,579,256 1,409,810 1,509,043 43,500,714 40,088,299
NET ASSETS, JUNE 30 $ 48,138,457 $ 42,090,904 $ 1,344,237 $ 1,409,810 $ 49,482,694 $ 43,500,714
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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.
Governmental Activities
Expenses and Program Revenues
$0
$2
$4
$6
$8
$10
$12
$14
$16
General
Government
Public safety Public service Park & recreation Planning &
development
Interest on long-
term debtMillionsExpenses
Revenues
The graph below depicts the breakdown of revenue by source for fiscal year 2007.
Governmental Activities
Revenue by Source
Unrestricted
investment earnings
1%
Intergovernmental
revenue
3%
Capital
grants/contributions
9%
Operating
grants/contributions
7%
Other Taxes
5%
Property taxes
10%
Charges for services
9%
Occupational Licenses
56%
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In fiscal year 2007, the City derived 71% of its revenue from taxes/licenses. Occupational licenses,
which include both payroll withholding tax, business licenses, and insurance premium tax is the
largest source of income to the City, totaling approximately $24.7 million. This area of revenue
grew almost 10% from the prior year, with the majority of the increase resulting from payroll
withholding tax collections.
It should be noted that property tax revenue remained fairly flat from the prior year. As a
component of the payroll tax increase, which was implemented in October 2005, the Commission
committed to reducing property taxes, so that the goods and services provided by the City would be
more equally supported by the massive inflow of population into the City daily for business and
entertainment. The Commission has kept its commitment by decreasing the rate from $.30 to $.275
in fiscal year 2007 and again to $.25 for fiscal year 2008. Although there was a decrease in the tax
rate, new properties, annexation, and increasing property value assessments kept the revenue source
stable.
C. Business-Type Activities
Business-type activities decreased the City’s net assets by $65,573, in contrast to the positive
position in net assets for Governmental Activities for the year.
The chart below shows the operating results for each of the City’s business-type activities. These
activities should break-even; the charges for services should be large enough to sustain operations.
Although there was a decrease in net assets from the prior year, the operating gap was reduced by
one-third.
The Solid Waste fund, as a major fund of the organization, is of particular interest. Efforts are
currently being made to improve the performance of this function, including rate increases for fiscal
year 2008, as well as efficiency measures through equipment and route reorganization.
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Business-Type Activities
Expenses and Revenues
-
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
Solid Waste Civic Center TISAMillions Expenses
Revenues
IV. Financial Analysis of the City’s Funds
A. Governmental Funds
The focus of the City’s governmental funds is to provide information on near-term inflows, outflows
and balances of spendable resources. Such information is useful in determining the City’s financing
requirements. Unreserved fund balance serves as a useful measure of the City’s net resources
available for spending at the end of the fiscal year.
At the end of the fiscal year, the City governmental funds reported combined ending fund balances
of $16.1 million (see Exhibit 3). Approximately 65% of this total amount, $10.5 million, is
unreserved fund balance, which is available for spending at the government’s discretion but only up
to the amount represented by cash. Of the $10.5 million, $534,025 is in the debt service fund and
various special revenue funds, which are earmarked for specific purposes. The remaining $5.6
million of fund balance is reserved for specific future uses.
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Governmental Funds
Ending Fund Balances
Unreserved - general
fund
62%Unreserved - other
funds
3%
Reserved
35%
Business-Type Activities
Revenue by Source
Interest Income
2%
Gain on sale of capital
assets and transfers
2%
Capital
grants/contributions
1%
Charges for Services
95%
The general fund is the chief operating fund of the City. At the end of the 2006-2007 fiscal year, the
general fund unreserved fund balance was $10.0 million. City fiscal policy (ordinance 2006-6-7137)
required that an amount not less than 8% of the General Fund’s budgeted expenditures remain
undesignated in the fund balance, or $2.3 million, which leaves $7.7 million as unreserved for fiscal
year 2007. While $7.7 million represents unreserved fund balance, it is worth noting here that at
year-end there was only $5.3 million available as cash, the balance is tied up in other assets
including accounts receivable and property taxes collectible. As a measure of general fund liquidity,
readers may compare both unreserved fund balance and total fund balance to total general fund
expenditures. Unreserved General Fund fund balance represents approximately 35% of
expenditures and transfers out ($29 million). When compared to total appropriations ($29 million),
the general fund cash balance ($5.3 million) is 18%.
The General Fund fund balance increased by $819 thousand during the 2006-2007 fiscal year and
was the result of expenditures being held down and a strong revenue environment, thus revenues
outgrew expenditures. Key factors contributing to this positive change include the following:
o Strong business license collections,
o Continued growth in payroll tax collections, and
o Increased property values
The General Capital Improvements Fund had a fund balance of $2.9 million all of which is reserved.
The General Capital Improvements fund balance increased $1 million over last year. The fund
balance increased because several capital projects that were fully funded had not yet been
completed; therefore, funds remained on hand at year-end.
The Investment Fund had a fund balance of $1.7 million, all of which is reserved for capital projects.
The Investment Fund’s fund balance increased $1.0 million. The Investment Fund was authorized
by the City Commission in fiscal year 2005-2006 as a special revenue fund whose use is restricted to
economic development, community redevelopment and capital and infrastructure projects. The
Investment Fund captures all manner of financial activities related to revenue from the ½ cent
payroll tax increase, effective October 1, 2005.
B. Proprietary Funds
The City’s proprietary funds provide the same information found in the government-wide financial
statements, but in more detail.
Net assets of the respective proprietary funds are:
Solid Waste $ 821,214
Civic Center 223,764
TISA 203,543
Combined total net asset change for the three funds was a decrease of $128 thousand, broken down
as follows: Solid Waste ($114 thousand), Civic Center ($8 thousand), and TISA ($6 thousand).
Other factors concerning the proprietary enterprise funds have been addressed in the discussion of
City business-type activities (III, C).
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V. General Fund Budgetary Highlights
Differences between the original budget and the final actual amounts resulted in a $1.128 million
decrease in appropriations and can be briefly summarized as follows:
Appropriations
Department Increase Decrease
(In Thousands)
General administration $ - $ 296
Finance 16 -
Planning - 56
Human rights - 6
Human resources - 4
Inspection - -
Information systems - 53
Risk management - 6
Police - 484
Fire - 34
Public works - 355
Engineering services - 109
Recreation - 58
Other 317 -
Transfers out were increased $1.2 million. This increase is due to two mid-year budget appropriations
designating nearly $1 million for capital projects such as waterfront engineering/design, various roof
replacements, and floodwall restoration engineering. Appropriations were also made for funding the old
Police and Fire Pension Fund and an IAFF pay raise for members.
VI. Capital Asset and Debt Administration
A. Capital Assets
The City’s investment in capital assets for governmental and business-type activities as of June 30,
2007, is $40.1 million (net of accumulated depreciation). This investment in capital assets includes
land, buildings and improvements, vehicles and equipment, park facilities, roads, highways, and
bridges, and construction in progress.
Capital improvements are included in each department budget until improvements are completed.
At the end of the fiscal year, completed projects are capitalized in the Government-wide Statements.
During fiscal year 2007, projects and equipment expenditures totaled nearly $6.5 million. The
largest capital-type projects, in terms of dollars in fiscal year 2007, are shown in the following table:
Pecan Drive improvement project $3,251,321
Neighborhood Redevelopment (includes Fountain & Lowertown) 732,215
Noble Park Improvements & Recreation Trail 588,684
Olivet Church & Coleman Road Improvements 853,232
In the upcoming years, several street, economic development, riverfront development, quality of life
and drainage projects will continue and are estimated to cost several million dollars. Capital
improvement projects including infrastructure, the continuing airport expansion, recreational facility
improvements, continued neighborhood revitalization, and street and sidewalk rehabilitation are
among the projects to be addressed.
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City of Paducah, Kentucky
Capital Assets
(Net of Accumulated Depreciation)
June 30
Governmental Activities Business-Type Activities Total Primary Government
2007 2006 2007 2006 2007 2006
Land $ 6,518,216 $ 5,320,275 $ 65,908 $ 65,908 $ 6,584,124 $ 5,386,183
Land improvements 1,606,021 940,577 - - 1,606,021 940,577
Construction in
progress 802,177 3,945,451 - - 802,177 3,945,451
Buildings and
improvements 7,208,859 7,103,751 253,670 267,090 7,462,529 7,370,841
Infrastructure 19,175,949 16,261,506 - - 19,175,949 16,261,506
Equipment 1,460,002 1,583,603 55,343 111,326 1,515,345 1,694,929
Furnishings and
fixtures 5,845 7,112 - - 5,845 7,112
Vehicles 1,798,261 1,624,101 1,116,602 833,396 2,914,863 2,457,497
TOTALS $ 38,575,330 $ 36,786,376 $ 1,491,523 $ 1,277,720 $ 40,066,853 $ 38,064,096
Additional information on City capital assets can be found in Note 3 in the notes to financial
statements on pages 70-73.
B. Long-Term Debt
At year-end, the City had $23,569,480 in outstanding bonds, accrued compensated absences and
notes payable, compared to $24,083,707 at June 30, 2006 with maturities extending through 2026.
During the year, the City’s total debt decreased by $514,227, as shown in the following table:
Governmental Activities
2007 2006
Convention and Performing Arts Center – 2001 $ 7,870,000 $ 8,130,000
Kentucky League of Cities – 2003 2,968,856 3,110,441
Infiniti Media Building – 2004 4,515,000 4,680,000
General Fund accrued compensated absences 1,938,958 1,854,481
KACO – 2005 105,000 208,785
Police/Firefighter Pension Fund Liability – 2006 5,925,000 6,100,000
Jones Agreement (Art School) -- 2007 246,666 -
TOTALS $23,569,480 $24,083,707
Convention and Performing Arts Center. In June 2001, a $9.29 million general obligation bond
was added to the City’s debt obligation to finance construction of the Luther F. Carson Four Rivers
Center for the Performing Arts (approximately $3.0 million) and the expansion of the Julian Carroll
Convention Center (approximately $6.0 million). These bonds are required to be fully paid within 25
years from the date of issue and are backed by the full faith and credit of the City. While the City
issued these bonds, 50% of the principal amount of the bonds is being issued on behalf of the County
of McCracken, Kentucky. McCracken County has issued the City a general obligation note in a
principal amount equal to 50% of the principal amount of the bonds.
Kentucky League of Cities. In fiscal year 2003, the City borrowed $3.5 million to fund a variety of
capital projects, including park improvements ($1.0 million), downtown infrastructure improvements
in conjunction with the FRC ($1.5 million), and City Hall, Police and other City-owned facility
improvements ($1.0 million).
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Infiniti Media Building. In fiscal year 2004, the City sold $5.0 million in bonds to construct the
Infiniti Media Building in the Paducah Industrial Park West, an economic development project. By
interlocal agreement, McCracken County is obligated to an amount equal to 50% of the principal
amount of the bonds. After the third year of the life of the bond, the Infiniti Media Company is
obligated to make monthly lease payments to the City in an amount nearly equal to the debt service
obligation.
KACO. In fiscal year 2005, the County of McCracken entered into two separate agreements totaling
$550,000, with the Kentucky Association of Counties (KACO) for purchase of a rail spur and
construction of a speculative building in the Industrial Park West. In fiscal year 2007, the Paducah-
McCracken County Industrial Development Authority received a $125,000 grant from the Delta
Regional Commission. The entire payment was applied toward the rail spur note, and the note was
paid in full by the end of the fiscal year. The remaining speculative building note is required to be
fully paid within 5 years from date of issue and is backed jointly by the full faith and credit of the
City and County. While the County issued the note, 50% of the principal amount was issued on
behalf of the City, which intends to participate on an equal basis with the County in accordance with
an interlocal agreement.
Police/Firefighter Pension Fund Liability In fiscal year 2006, the City issued $6.1 million in
general obligation bonds to finance the police and firefighter’s pension fund estimated pension
liability. These bonds are to be fully paid within 20 years and are backed by the full faith and credit
of the City.
Jones Agreement (Art School). In fiscal year 2007, the City entered into an agreement with F.
Burnham and Cynthia Jones in the amount of $375,000 to finance the acquisition of real property to
be used for the development of an art school. This note is to be fully paid by January 2009.
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 $182,759,543. The City’s latest bond rating
by Moody is A2. The City has a 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 2007, less than 6.6% of the General Fund budget is expended for debt service, and thus has
minimal impact on current and future operations.
Additional information on the City’s long-term debt can be found in Note 3 in the notes to financial
statements on pages 73-76.
VII. Economic Factors and Next Year’s Budgets and Rates.
A. General Comments. Paducah continued to experience steady-growth in the local economy as
compared to the national economy in fiscal year 2007. It is estimated that over 100 jobs were
created or retained in fiscal year 2007 along with $9.1 million in private capital investments.
Paducah continues to experience retail growth in the Kentucky Oaks Mall area and the City’s
Southside in addition to job expansions in the Information Age Park and the Industrial Park West.
B. Downtown Development. The downtown area continues to be enhanced with the addition of new
retail establishments, further expanding the property tax value base as well as the payroll tax base.
Just prior to the end of fiscal year 2007, the City hired a Downtown Development Director. This
new cost center is tasked with establishing a Tax Increment Financing (TIF) District in the
downtown/riverfront area for financing current and future development projects as well as mediating
between the City and potential hotel and business developers in the downtown area.
C. Unemployment Rate. The unemployment rate for the City of Paducah (McCracken County) as of
June 2007 was 5.6%.
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D. Inflationary Trends. Inflationary trends in the City compare favorably to state and national trends.
E. Annexation Policy. Incentive investments in annexation and economic development should enable
revenue to increase over the next 5-8 years. Paducah will continue to pursue its annexation efforts
as these efforts will insure long-term financial stability for the City in terms of increased property
taxes, payroll taxes, and business gross receipts fees through further commercial, industrial, and
residential development. City policy will continue to provide annexation incentives that should pay
for themselves in the long-term and serve as incentive investments in future revenues to offset the
cost of providing services to the newly annexed areas. The policy of balanced and controlled
growth will be one of the City’s greatest challenges in the next five to ten years.
F. Post-employment Benefits. Personal service costs make up nearly 67% of the City’s annual
budget, and that number increases annually partially due to rising retirement costs. In the past five
years, the City’s combined hazardous and non-hazardous retirement contribution has more than
doubled, increasing annual expenditures approximately $2 million from fiscal year 2004 to the
projected figures for fiscal year 2008. Providing this benefit has become so costly that for the first
time in fiscal year 2007, retirement match exceeded the cost of providing health insurance to City
employees. Although Kentucky Retirement Systems has announced a slight decrease in fiscal year
2009 rates, the long-term outlook on funding requirements is of utmost concern.
G. Permanence of Payroll Tax Increase. Early in fiscal year 2008, the increase in employee payroll
withholding tax that went into effect October 2005 was made permanent. The additional ½%
generates approximately $4 million annually. Making this increase permanent allows for more
certainty in long-term planning and partially alleviates the City’s long-term concern for funding of
capital and economic development projects.
H. Infrastructure. Recently completed and upcoming major road/infrastructure projects have and will
continue to increase the flow of commerce, tourism and traffic flow in the City. During fiscal 2007,
the Pecan Drive Improvements project was completed, an investment of nearly $5.5 million. This
roadway project consists of 1.8 miles of roadway designed to accommodate modern-day traffic flow
near the City’s retail areas and opens up over 160 acres for development in the western part of the
City. The City continues to work on the $6.5 million Olivet Church Road Project, and is currently
in the process of obtaining the necessary right-of way. This project will relieve traffic congestion
and improve traffic safety for Interstate 24 at Exit 3 and 4.
VIII. Requests for Information
This financial report is designed to provide a general financial overview for those interested in the City
of Paducah government finances. Questions or requests for additional financial information may be
addressed to Jonathan Perkins, Finance Director, City of Paducah, 500 South 5th Street, Paducah, KY
42001.
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CITY OF PADUCAH, KENTUCKY
BASIC FINANCIAL STATEMENTS
GOVERNMENT-WIDE FINANCIAL STATEMENTS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2007
Exhibit 1
Governmental Business-type Component
Current Assets: Activities Activities Total Units
Cash and cash equivalents 8,109,480$ 409,839$ 8,519,319$ 4,715,392$
Investments 5,865,534 1,480,000 7,345,534 -
Receivables, net:
Notes 351,500 - 351,500 -
Accounts 6,023,457 208,317 6,231,774 2,941,134
Grants 633,323 - 633,323 614,512
Interest 145,684 13,291 158,975 -
Property tax 4,413,890 - 4,413,890 -
Other - - - 803,394
Internal balances (95,716) 95,716 - -
Inventory 894,799 - 894,799 1,789,470
Prepaid pension obligation 5,831,378 - 5,831,378 -
Prepaid expenses 1,047,118 15,095 1,062,213 106,720
Other current assets 100 - 100 763,181
Total current assets 33,220,547 2,222,258 35,442,805 11,733,803
Noncurrent Assets:
Investments, restricted - - - 2,676,425
Notes receivable 6,290,000 - 6,290,000 -
Bond issuance costs, net 230,288 - 230,288 -
Net capital assets:
Land and construction in progress 7,320,393 65,908 7,386,301 3,517,365
Depreciable capital assets 31,254,937 1,425,615 32,680,552 78,911,052
Restricted assets - - - 1,745,444
Other assets - - - 477,609
Total noncurrent assets 45,095,618 1,491,523 46,587,141 87,327,895
Total assets 78,316,165$ 3,713,781$ 82,029,946$ 99,061,698$
-26-
Primary Government
CITY OF PADUCAH, KENTUCKY
STATEMENT OF NET ASSETS
JUNE 30, 2007
ASSETS
Governmental Business-type Component
Current Liabilities: Activities Activities Total Units
Voucher and accounts payable 1,571,310$ 199,615$ 1,770,925$ 5,086,916$
Line of credit - - - 1,568,014
Accrued payables 543,685 30,766 574,451 534,113
Due to other taxing agencies 190,332 - 190,332 -
Deferred revenue 4,196,451 - 4,196,451 768,282
Accrued compensated absences 512,672 70,451 583,123 -
Accrued interest 106,450 - 106,450 156,375
Notes payable due within one year 294,220 - 294,220 55,171
Bonds payable due within one year 630,000 - 630,000 1,375,000
Other current liabilities - - - 1,721,642
Total current liabilities 8,045,120 300,832 8,345,952 11,265,513
Noncurrent Liabilities:
Accrued compensated absences 1,426,286 6,212 1,432,498 -
Landfill post-closure costs - 2,062,500 2,062,500 -
Other liabilities - - - 401,938
Notes payable 3,026,302 - 3,026,302 6,479,382
Bonds payable 17,680,000 - 17,680,000 5,020,948
Total noncurrent liabilities 22,132,588 2,068,712 24,201,300 11,902,268
Total liabilities 30,177,708 2,369,544 32,547,252 23,167,781
Invested in capital assets, net
of related debt 32,557,572 1,491,523 34,049,095 69,355,892
Restricted for:
Program purposes 1,904,321 - 1,904,321 -
Capital projects 4,618,923 - 4,618,923 -
Debt service - - - 3,458,574
Unrestricted 9,057,641 (147,286) 8,910,355 3,079,451
TOTAL NET ASSETS 48,138,457$ 1,344,237$ 49,482,694$ 75,893,917$
See accompanying notes to the basic financial statements.
-27-
LIABILITIES
NET ASSETS
Primary Government
Exhibit 2
FUNCTIONS/PROGRAMS Operating
Charges for Grants and
Primary Government: Expenses Services Contributions
Governmental activities:
General government 9,462,543$ 1,730,046$ -$ -$
Public safety 15,182,704 1,024,610 60,983 631,644
Public service 8,299,658 1,150,507 399,528 3,044,146
Parks and recreation 1,197,072 122,929 5,000 -
Planning and development 1,891,725 10,810 2,331,705 5,700
Interest on long-term debt 1,134,898 - - -
Total governmental activities (See Note 1) 37,168,600 4,038,902 2,797,216 3,681,490
Business-type activities:
Solid Waste 4,079,684 3,928,141 - -
Civic Center 54,560 31,372 - -
TISA 267,194 193,713 - 23,969
Total business-type activities 4,401,438 4,153,226 - 23,969
TOTAL PRIMARY GOVERNMENT 41,570,038$ 8,192,128$ 2,797,216$ 3,705,459$
Component Units:
Authorities:
Paducah Water Works 6,712,204$ 6,867,559$ -$ 520,355$
Paducah Power System 48,905,522 49,733,519 - -
Paducah Transit Authority 5,988,216 3,366,711 1,990,000 531,898
TOTAL COMPONENT UNITS 61,605,942$ 59,967,789$ 1,990,000$ 1,052,253$
General revenues:
Taxes and licenses:
Property taxes, levied for general purposes
Franchise tax
Telecommunications tax
Insurance premium tax
Vehicle tax
Bank tax
Gross receipts license tax
Employee license tax
Other taxes
Intergovernmental revenue, restricted for debt and street maintenance
Unrestricted investment earnings
Gain (loss) on sale of capital assets
Miscellaneous
Total general revenues
Transfers
Total general revenues and transfers
Change in net assets
Net assets, July 1, 2006
NET ASSETS, JUNE 30, 2007
See accompanying notes to the basic financial statements.
-28-
CITY OF PADUCAH, KENTUCKY
Grants and
Contributions
FOR THE YEAR ENDED JUNE 30, 2007
STATEMENT OF ACTIVITIES
Program Revenues
Capital
Governmental Business-type Component
Activities Activities Total Units
(7,732,497)$ -$ (7,732,497)$ -$
(13,465,467) - (13,465,467) -
(3,705,477) - (3,705,477) -
(1,069,143) - (1,069,143) -
456,490 - 456,490 -
(1,134,898) - (1,134,898) -
(26,650,992) - (26,650,992) -
- (151,543) (151,543) -
- (23,188) (23,188) -
- (49,512) (49,512) -
- (224,243) (224,243) -
(26,650,992) (224,243) (26,875,235) -
- - - 675,710
- - - 827,997
- - - (99,607)
- - - 1,404,100
4,122,538 - 4,122,538 -
183,736 - 183,736 -
522,665 - 522,665 -
4,414,672 - 4,414,672 -
594,585 - 594,585 -
163,930 - 163,930 -
4,050,057 - 4,050,057 -
16,273,966 - 16,273,966 -
499,185 - 499,185 -
1,243,028 - 1,243,028 -
639,702 83,854 723,556 481,505
48,656 16,641 65,297 -
- - - 331,114
32,756,720 100,495 32,857,215 812,619
(58,175) 58,175 - -
32,698,545 158,670 32,857,215 812,619
6,047,553 (65,573) 5,981,980 2,216,719
42,090,904 1,409,810 43,500,714 73,677,198
48,138,457$ 1,344,237$ 49,482,694$ 75,893,917$
-29-
Net (Expense) Revenue and Changes in Net Assets
Primary Government
CITY OF PADUCAH, KENTUCKY
BASIC FINANCIAL STATEMENTS
FUND FINANCIAL STATEMENTS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2007
Exhibit 3
Special
General
Fund
Cash and cash equivalents 1,707,270$ 2,624,446$ 439,838$
Investments 3,542,767 - -
Accounts receivable:
Accounts 5,759,882 - 400,000
Grants 70,443 555,290 -
Interest 63,874 - -
Property taxes (net of
allowances for uncollectibles) 4,244,083 - -
Due from other funds 1,071,915 93,215 951,313
TOTAL ASSETS 16,460,234$ 3,272,951$ 1,791,151$
Liabilities:
Voucher and accounts payable 352,590$ 346,900$ 5,064$
Accrued payroll and payroll taxes 492,605 - -
Due to other funds 951,313 - 93,215
Due to other taxing agencies 190,332 - -
Deferred revenue 3,997,355 - -
Accrued compensated absences 499,960 - -
Total liabilities 6,484,155 346,900 98,279
Fund Balances:
Reserved for:
Program purposes - - -
Capital improvements - 2,926,051 1,692,872
Unreserved:
General Fund 9,976,079 - -
Special Revenue Funds - - -
Debt Service Fund - - -
Total fund balances 9,976,079 2,926,051 1,692,872
TOTAL LIABILITIES AND FUND BALANCES 16,460,234$ 3,272,951$ 1,791,151$
See accompanying notes to the basic financial statements.
-30-
Revenue
Investment
Fund
LIABILITIES AND FUND BALANCES
ASSETS
JUNE 30, 2007
GOVERNMENTAL FUNDS
BALANCE SHEET
CITY OF PADUCAH, KENTUCKY
General
Capital
Improvements
2,171,007$ 6,942,561$
- 3,542,767
105,663 6,265,545
7,589 633,322
- 63,874
- 4,244,083
- 2,116,443
2,284,259$ 23,808,595$
435,242$ 1,139,796$
42,894 535,499
85,816 1,130,344
- 190,332
176,760 4,174,115
- 499,960
740,712 7,670,046
1,009,522 1,009,522
- 4,618,923
- 9,976,079
502,189 502,189
31,836 31,836
1,543,547 16,138,549
2,284,259$ 23,808,595$
-31-
Nonmajor
Governmental
Funds
Total
Funds
Governmental
Exhibit 4
Total fund balance - total governmental funds 16,138,549$
Amounts reported for governmental activities in the Statement
of Net Assets are different because:
170,040
169,807
6,192,500
26,029
808,216
5,831,378
38,575,330
$ 924,220
22,132,588 (23,056,808)
(Continued)
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.
A prepaid pension obligation is not a current financial resource, and
therefore, is not reported in the governmental funds balance sheet.
CITY OF PADUCAH, KENTUCKY
RECONCILIATION OF THE GOVERNMENTAL FUNDS
BALANCE SHEET TO STATEMENT OF NET ASSETS
Inventory is not a current financial resource and, therefore, is not
reported in the governmental funds balance sheet.
Delinquent property taxes receivable are not reported in the
governmental funds balance sheet since they are not considered
"available" revenues.
The long-term notes receivable are not reported in the governmental
funds balance sheet since they are not available to pay current period
expenditures.
Other account receivables are not available to pay current
expenditures and, therefore, are deferred in the funds.
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.
JUNE 30, 2007
Due within one year
Due after one year
-32-
Long-term liabilities of ($21,630,522) are not due and payable in the
current period and, therefore, they are not reported in the
governmental funds balance sheet. See Note 3 for detail. Other
related amounts include accrued compensated absences of
($1,426,286). The long-term liabilities are:
Exhibit 4
(Continued)
230,288$
(106,450)
4,716,041$
(1,460,747)
(95,716) 3,159,578
NET ASSETS OF GOVERNMENTAL ACTIVITIES 48,138,457$
See accompanying notes to the basic financial statements.
-33-
Current assets
Net amount allocated to
Internal service funds are used by management to charge the costs of
certain activities, such as insurance and fleet management, to
individual funds. The assets and liabilities of the Internal Service
Funds (net of amount allocated to business-type activities) not
included in other reconciling items are:
Current liabilities
JUNE 30, 2007
Bond issuance costs used in governmental activities are not current
financial resources and, therefore, are 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.
business-type activities
CITY OF PADUCAH, KENTUCKY
RECONCILIATION OF THE GOVERNMENTAL FUNDS
BALANCE SHEET TO STATEMENT OF NET ASSETS
Exhibit 5
Special
General
Revenues: Fund
Taxes 5,521,404$ -$ -$
Licenses 21,193,930 - 3,946,685
Charges for services 560,289 - -
Intergovernmental - 283,755 -
Grants 583,865 3,451,663 -
Interest 492,090 - -
Miscellaneous 1,068,954 235,902 -
Total revenues 29,420,532 3,971,320 3,946,685
Expenditures:
Current operations:
General government 4,763,839 - -
Public safety 13,430,359 - -
Public service 6,219,132 - -
Parks and recreation 1,192,727 - -
Planning and development - - 532,190
Other 526,238 - -
Capital outlay - 6,504,491 -
Debt service:
Principal requirement - - -
Interest and fiscal requirement - - -
Total expenditures 26,132,295 6,504,491 532,190
Excess (deficiency) of revenues over expenditures 3,288,237 (2,533,171) 3,414,495
Other Financing Sources (Uses):
Long-term debt issued - 246,667 -
Transfers in 91,668 3,560,249 1
Transfers out (2,561,136) (317,697) (2,441,425)
Total other financing sources (uses) (2,469,468) 3,489,219 (2,441,424)
Net change in fund balances 818,769 956,048 973,071
Fund balances, July 1, 2006 9,157,310 1,970,003 719,801
FUND BALANCES, JUNE 30, 2007 9,976,079$ 2,926,051$ 1,692,872$
See accompanying notes to the basic financial statements.
-34-
CITY OF PADUCAH, KENTUCKY
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2007
Improvements
Revenue
Investment
Fund
General
Capital
522,665$ 6,044,069$
- 25,140,615
222,729 783,018
1,393,028 1,676,783
2,054,183 6,089,711
48,114 540,204
527,305 1,832,161
4,768,024 42,106,561
- 4,763,839
1,329,376 14,759,735
1,007,410 7,226,542
- 1,192,727
1,892,008 2,424,198
- 526,238
- 6,504,491
782,870 782,870
1,108,385 1,108,385
6,120,049 39,289,025
(1,352,025) 2,817,536
- 246,667
1,558,059 5,209,977
(236,464) (5,556,722)
1,321,595 (100,078)
(30,430) 2,717,458
1,573,977 13,421,091
1,543,547$ 16,138,549$
-35-
Funds
Governmental
Total
Funds
Nonmajor
Governmental
Exhibit 6
Net change in fund balances - total governmental funds 2,717,458$
Amounts reported for governmental activities in the Statement
of Activities are different because:
765,265
(125,754)
4,638,045
(212,500)
2,279
23,291
170,040
118,613
(Continued)
FOR THE YEAR ENDED JUNE 30, 2007
Contributions for debt service received from other governments are
reported as current year revenue in the governmental funds. However,
receipts for long-term receivables are not considered revenue in the
Statement of Activities.
Governmental funds report capital outlays as expenditures. However, in
the Statement of Activities, the cost of those assets is allocated over
their estimated useful lives as depreciation expense. This is the amount
of capital outlays in the current period.
Delinquent property taxes receivable are not considered "available"
revenues in the governmental funds.
Accrued interest revenue on the long-term note receivable is not
reported on the governmental funds since neither the note receivable nor
the interest is available to pay current period expenditures.
-36-
CITY OF PADUCAH, KENTUCKY
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
Inventory purchases require the use of current financial resources and,
therefore, are reported as expenditures in governmental funds.
Inventory sales provide current financial resources and are reported as
revenues in governmental funds.
Tax revenues in the Statement of Activities that do not provide current
financial resources are not reported as revenues in the governmental
funds.
The prepayment of a pension obligation requires the use of current
financial resources and, therefore, is reported as an expenditure in
governmental funds. However, the prepayment does not affect net
assets in the government-wide Statement of Activities.
Exhibit 6
(Continued)
(246,667)$
(3,519,277)
845,370
(27,014)
(48,644)
(13,313)
525,945$
(62,988)
497,404 960,361
CHANGE IN NET ASSETS OF GOVERNMENTAL ACTIVITIES 6,047,553$
See accompanying notes to the basic financial statements.
-37-
Internal service funds are used by management to charge the costs of
certain activities, such as insurance and fleet management, to individual
funds. The net revenue of the Internal Service Funds is reported with
governmental activities net of the amount allocated to business-type
activities and depreciation expense. These amounts are as follows:
Change in net assets
business-type activities
Depreciation expense
Depreciation expense on capital assets is reported in the government-
wide Statement of Activities and Changes in Net Assets, but does not
require the use of current financial resources. Therefore, depreciation
expense is not reported as an expenditure in governmental funds. This
amount includes Internal Service Funds' depreciation expense of
$497,404.
The issuance of long-term debt provides current financial resources to
governmental funds and is reported as revenue in governmental funds.
However, the proceeds are not reported in the government-wide
Statement of Activities.
CITY OF PADUCAH, KENTUCKY
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND
Principal payments of debt require the use of current financial resources
and, therefore, are reported as expenditures in governmental funds.
However, principal payments of debt do not affect net assets in the
government-wide Statement of Activities.
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2007
Accrued interest payments on debt do not require the use of current
financial resources. Accrued interest is reported as an expenditure in
the government-wide Statement of Activities.
Long-term accrued compensated absences do not require the use of
current financial resources and, therefore, are not reported as
expenditures in governmental funds.
Net of amount allocated to
Governmental funds report the effect of bond issuance costs when debt
is issued, whereas these amounts are deferred and amortized in the
Statement of Activities.
Exhibit 7
Variance with
Final Budget
Positive
Original Final (Negative)
Beginning budgetary fund balance 9,157,310$ 9,157,310$ 9,157,310$ -$
Resources (Inflows):
Taxes:
Real and personal,
current year 4,385,500 4,549,475 4,549,474 (1)
Real and personal,
prior year 107,000 137,365 137,361 (4)
Franchise 260,000 191,210 191,202 (8)
Bank taxes 185,000 163,930 163,930 -
In lieu of tax payment 170,000 166,755 166,757 2
Penalty, interest and
advertising 33,500 31,315 31,314 (1)
Paducah Junior College
tax collections - 281,370 281,366 (4)
Total taxes 5,141,000 5,521,420 5,521,404 (16)
Licenses:
Business licenses 3,955,000 3,899,425 3,899,422 (3)
Employee earnings 11,910,000 12,312,265 12,312,261 (4)
Comcast fees 284,000 342,155 342,155 -
Penalties 67,000 84,875 84,877 2
Alcoholic beverages 116,500 109,775 109,775 -
Insurance premium tax 4,050,000 4,410,285 4,410,285 -
Building permits 123,000 160,320 160,280 (40)
Electrical permits 27,000 42,570 42,403 (167)
Zoning change fees 4,500 3,410 3,407 (3)
Miscellaneous building
and electrical fees 500 - - -
KJDA payroll rebate (143,750) (170,935) (170,935) -
Total licenses 20,393,750 21,194,145 21,193,930 (215)
Charges for services:
Tax collection fee 120,000 115,725 115,724 (1)
Administrative charge 252,000 252,000 252,000 -
Base court revenue 57,000 69,635 69,636 1
Recreation fees 122,000 122,930 122,929 (1)
Total charges for services 551,000 560,290 560,289 (1)
(Continued)
ActualBudgeted Amounts
-38-
CITY OF PADUCAH, KENTUCKY
BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS)
GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2007
Amounts
Exhibit 7
(Continued)
Variance with
Final Budget
Actual Positive
Grants:Original Final Amounts (Negative)
Police State Incentive 306,000$ 277,100$ 277,097$ (3)$
Fire State Incentive 265,000 239,930 239,928 (2)
Paducah Housing Authority
after school program 36,500 36,595 36,594 (1)
Police supplemental grants 5,000 30,220 30,246 26
Total grants 612,500 583,845 583,865 20
Interest 413,000 492,085 492,090 5
Other:
Property rent and sales 615,240 626,150 626,135 (15)
Property upkeep and
maintenance 147,375 164,810 164,811 1
Contractual programs 4,200 10,235 10,231 (4)
E911 - GIS 21,855 21,855 21,859 4
Miscellaneous 181,675 245,920 245,918 (2)
Total other 970,345 1,068,970 1,068,954 (16)
Other financing sources:
Long-term debt issued - - - -
Operating transfers in 219,000 91,670 91,668 (2)
Total other financing sources 219,000 91,670 91,668 (2)
Amounts available for appropriation 37,457,905 38,669,735 38,669,510 (225)
Charges to Appropriations (Outflows):
General government:
General administration:
Mayor and Commissioners 200,280 197,230 197,230 -
City Manager 354,075 330,760 330,760 -
City Clerk 184,630 152,165 152,166 (1)
Corporate Counsel 178,630 144,560 144,559 1
Non-departmental 416,800 591,500 591,500 -
Memberships and contingency 401,155 23,945 23,944 1
Civic beautification 3,365 2,975 2,971 4
Total general administration 1,738,935 1,443,135 1,443,130 5
Finance:
Finance administration 180,510 179,030 179,026 4
Accounting and payroll 357,545 395,815 395,812 3
Revenue collection 372,500 351,805 351,803 2
Total finance 910,555 926,650 926,641 9
(Continued)
CITY OF PADUCAH, KENTUCKY
BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS)
Budgeted Amounts
GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2007
-39-
Exhibit 7
(Continued)
Variance with
Final Budget
Actual Positive
General government:Original Final Amounts (Negative)
Planning:
Administration 260,290$ 255,520$ 255,518$ 2$
Planning 250,490 239,060 239,061 (1)
Grants 119,005 79,315 79,316 (1)
Economic development - - - -
Total planning 629,785 573,895 573,895 -
Human rights 104,000 98,210 98,206 4
Human resources 317,365 313,550 313,548 2
Inspection:
Inspection administration 181,820 174,335 174,336 (1)
Construction 319,720 336,970 336,968 2
Code enforcement 432,475 422,550 422,546 4
Neighborhood redevelopment 75,390 75,440 75,437 3
Total inspection 1,009,405 1,009,295 1,009,287 8
Information systems 330,510 277,820 277,819 1
Risk management 127,045 121,315 121,313 2
Public safety:
Police:
Police administration 1,143,140 1,135,770 1,135,763 7
Patrol 5,559,510 5,218,060 5,218,059 1
Investigations 1,385,585 1,250,045 1,250,044 1
Total police 8,088,235 7,603,875 7,603,866 9
Fire:
Fire administration 351,790 245,845 245,844 1
Suppression 5,158,355 5,263,140 5,263,135 5
Prevention 219,245 190,070 190,070 -
Training 131,385 127,450 127,444 6
Total fire 5,860,775 5,826,505 5,826,493 12
Public service:
Public works:
Public Works Administration 307,450 302,045 302,044 1
Street maintenance 2,320,990 1,980,415 1,980,412 3
Street lighting 445,000 463,280 463,280 -
(Continued)
BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS)
CITY OF PADUCAH, KENTUCKY
Budgeted Amounts
GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2007
-40-
Exhibit 7
(Continued)
Variance with
Final Budget
Actual Positive
Public service:Original Final Amounts (Negative)
Public works:
Downtown maintenance 317,685$ 321,130$ 321,128$ 2$
Landscape maintenance 2,061,045 2,055,015 2,055,011 4
Summer youth program 74,615 49,385 49,383 2
Total public works 5,526,785 5,171,270 5,171,258 12
Engineering services:
Engineering services 705,125 610,530 610,527 3
Flood control 451,600 437,350 437,347 3
Total engineering services 1,156,725 1,047,880 1,047,874 6
Recreation:
Recreation administration 619,250 627,680 627,677 3
Pools and recreation 631,880 565,055 565,050 5
Total recreation 1,251,130 1,192,735 1,192,727 8
Other:
Cable authority 71,470 83,980 83,978 2
Leave expense - 49,060 49,056 4
Intergovernmental expense - 281,366 281,366 -
Miscellaneous property expense 137,460 111,840 111,838 2
Total other 208,930 526,246 526,238 8
Other financing uses:
Operating transfers out 1,332,505 2,561,140 2,561,136 4
Total charges to appropriations 28,592,685 28,693,521 28,693,431 90
BUDGETARY FUND BALANCE,
JUNE 30, 2007 8,865,220$ 9,976,214$ 9,976,079$ (135)$
See accompanying notes to the basic financial statements.
BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS)
-41-
CITY OF PADUCAH, KENTUCKY
Budgeted Amounts
GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2007
Exhibit 8
Note A - Explanation of Differences Between Budgetary Inflows and Outflows and GAAP Revenues and
Expenditures
Sources/inflows of resources:
Actual amounts "available for appropriation" from
the budgetary comparison schedule 38,669,510$
Differences - budget to GAAP:
The beginning fund balance is a budgetary resource,
but is not a current year revenue for financial
reporting purposes (9,157,310)
Transfers from other funds are inflows of budgetary
resources, but are not revenues for financial
reporting purposes (91,668)
Total revenues as reported on the statement of revenues,
expenditures, and changes in fund balances-
governmental funds 29,420,532$
Uses/outflows of resources:
Actual amounts "total charges to appropriations" from
the budgetary comparison schedule 28,693,431$
Differences - budget to GAAP:
Transfers to other funds are outflows of budgetary
resources, but are not expenditures for financial
reporting purposes (2,561,136)
Total expenditures as reported on the statement of
revenues, expenditures, and changes in fund balances-
governmental funds 26,132,295$
See accompanying notes to the basic financial statements.
CITY OF PADUCAH, KENTUCKY
-42-
FOR THE YEAR ENDED JUNE 30, 2007
NOTE TO RSI
BUDGETARY COMPARISON SCHEDULE
GENERAL FUND
Exhibit 9
Variance with
Final Budget
Positive
Original Final (Negative)
Beginning budgetary fund balance 719,801$ 719,801$ 719,801$ -$
Resources (Inflows):
Licenses:
Employee earnings 3,900,000 3,946,685 3,946,685 -
Total licenses 3,900,000 3,946,685 3,946,685 -
Other financing sources:
Operating transfers in - - 1 1
Total other financing sources - - 1 1
Amounts available for appropriation 4,619,801 4,666,486 4,666,487 1
Charges to Appropriations (Outflows):
General government:
Planning and development:
Economic development 976,700 532,255 532,190 65
Total planning and development 976,700 532,255 532,190 65
Other financing uses:
Operating transfers out 3,302,440 2,441,430 2,441,425 5
Total charges to appropriations 4,279,140 2,973,685 2,973,615 70
BUDGETARY FUND BALANCE,
JUNE 30, 2007 340,661$ 1,692,801$ 1,692,872$ 71$
See accompanying notes to the basic financial statements.
ActualBudgeted Amounts
-43-
Amounts
CITY OF PADUCAH, KENTUCKY
BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS)
SPECIAL REVENUE INVESTMENT FUND
FOR THE YEAR ENDED JUNE 30, 2007
Exhibit 10
Note A - Explanation of Differences Between Budgetary Inflows and Outflows and GAAP Revenues and
Expenditures
Sources/inflows of resources:
Actual amounts "available for appropriation" from
the budgetary comparison schedule 4,666,487$
Differences - budget to GAAP:
The beginning fund balance is a budgetary resource,
but is not a current year revenue for financial
reporting purposes (719,801)
Transfers from other funds are inflows of budgetary
resources, but are not revenues for financial
reporting purposes (1)
Total revenues as reported on the statement of revenues,
expenditures, and changes in fund balances-
governmental funds 3,946,685$
Uses/outflows of resources:
Actual amounts "total charges to appropriations" from
the budgetary comparison schedule 2,973,615$
Differences - budget to GAAP:
Transfers to other funds are outflows of budgetary
resources, but are not expenditures for financial
reporting purposes (2,441,425)
Total expenditures as reported on the statement of
revenues, expenditures, and changes in fund balances-
governmental funds 532,190$
See accompanying notes to the basic financial statements.
CITY OF PADUCAH, KENTUCKY
-44-
FOR THE YEAR ENDED JUNE 30, 2007
NOTE TO RSI
BUDGETARY COMPARISON SCHEDULE
SPECIAL REVENUE INVESTMENT FUND
Exhibit 11
Variance with
Final Budget
Positive
Original Final (Negative)
Beginning budgetary fund balance 1,970,003$ 1,970,003 1,970,003 -$
Resources (Inflows):
Intergovernmental and grants
Intergovernmental - 283,755 283,755 -
Grants - 3,451,660 3,451,663 3
Total intergovernmental and grants - 3,735,415 3,735,418 3
Interest - - - -
Other:
Miscellaneous - 235,895 235,902 7
Total other - 235,895 235,902 7
Other financing sources:
Long-term debt issued - 246,670 246,667 (3)
Operating transfers in 2,448,250 3,560,255 3,560,249 (6)
Total other financing sources 2,448,250 3,806,925 3,806,916 (9)
Amounts available for appropriation 4,418,253 9,748,238 9,748,239 1
Charges to Appropriations (Outflows):
General government:
Capital outlay 2,448,250 6,504,510 6,504,491 19
Total planning and development 2,448,250 6,504,510 6,504,491 19
Other financing uses:
Operating transfers out - 317,705 317,697 8
Total charges to appropriations 2,448,250 6,822,215 6,822,188 27
BUDGETARY FUND BALANCE,
JUNE 30, 2007 1,970,003$ 2,926,023$ 2,926,051$ 28$
See accompanying notes to the basic financial statements.
CITY OF PADUCAH, KENTUCKY
BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS)
GENERAL CAPITAL IMPROVEMENTS FUND
FOR THE YEAR ENDED JUNE 30, 2007
ActualBudgeted Amounts
-45-
Amounts
Exhibit 12
Note A - Explanation of Differences Between Budgetary Inflows and Outflows and GAAP Revenues and
Expenditures
Sources/inflows of resources:
Actual amounts "available for appropriation" from
the budgetary comparison schedule 9,748,239$
Differences - budget to GAAP:
The beginning fund balance is a budgetary resource,
but is not a current year revenue for financial
reporting purposes (1,970,003)
Proceeds from issuance of long-term debt are
inflows of budgetary resources, but are not
revenues for financial reporting purposes (246,667)
Transfers from other funds are inflows of budgetary
resources, but are not revenues for financial
reporting purposes (3,560,249)
Total revenues as reported on the statement of revenues,
expenditures, and changes in fund balances-
governmental funds 3,971,320$
Uses/outflows of resources:
Actual amounts "total charges to appropriations" from
the budgetary comparison schedule 6,822,188$
Differences - budget to GAAP:
Transfers to other funds are outflows of budgetary
resources, but are not expenditures for financial
reporting purposes (317,697)
Total expenditures as reported on the statement of
revenues, expenditures, and changes in fund balances-
governmental funds 6,504,491$
See accompanying notes to the basic financial statements.
CITY OF PADUCAH, KENTUCKY
-46-
FOR THE YEAR ENDED JUNE 30, 2007
NOTE TO RSI
BUDGETARY COMPARISON SCHEDULE
GENERAL CAPITAL IMPROVEMENTS FUND
Exhibit 13
Nonmajor
Solid Enterprise
Current Assets: Waste Funds Totals
Cash and cash equivalents 318,670$ 91,170$ 409,840$ 1,166,918$
Investments 1,480,000 - 1,480,000 2,322,767
Accounts receivable 136,070 72,246 208,316 -
Interest receivable 13,291 - 13,291 92,653
Prepaid expenses - 15,095 15,095 1,047,118
Inventory - - - 86,585
Total current assets 1,948,031 178,511 2,126,542 4,716,041
Noncurrent Assets:
Net capital assets:
Land 65,908 - 65,908 -
Depreciable capital assets 1,163,799 261,816 1,425,615 1,808,391
Total noncurrent assets 1,229,707 261,816 1,491,523 1,808,391
Total assets 3,177,738 440,327 3,618,065 6,524,432
Current Liabilities:
Voucher and accounts payable 186,595 13,020 199,615 431,513
Accrued payroll and payroll taxes 30,766 - 30,766 8,186
Accrued compensated absences 70,451 - 70,451 12,713
Deferred revenue - - - 22,335
Due to other funds - - - 986,000
Total current liabilities 287,812 13,020 300,832 1,460,747
Noncurrent Liabilities:
Landfill post-closure costs 2,062,500 - 2,062,500 -
Accrued compensated absences 6,212 - 6,212 -
Total noncurrent liabilities 2,068,712 - 2,068,712 -
Total liabilities 2,356,524 13,020 2,369,544 1,460,747
Invested in capital assets 1,229,707 261,816 1,491,523 1,808,391
Unrestricted (408,493) 165,491 (243,002) 3,255,294
TOTAL NET ASSETS 821,214$ 427,307$ 1,248,521 5,063,685$
Reconciliation to government-wide statements of net assets:
Adjustment to reflect the consolidation of Internal Service Funds'
activities related to Enterprise Funds 95,716
NET ASSETS OF BUSINESS-TYPE ACTIVITIES 1,344,237$
See accompanying notes to the basic financial statements.
Governmental
Activities
CITY OF PADUCAH, KENTUCKY
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
JUNE 30, 2007
-47-
Business-type Activities
ASSETS
LIABILITIES
NET ASSETS
Funds
Service
Internal
Exhibit 14
Nonmajor
Solid Enterprise
Operating Revenues: Waste Funds Totals
Charges for services - internal 3,848,021$ 160,807$ 4,008,828$ 5,611,715$
Charges for services - external - - - 426,632
Miscellaneous 17,132 64,278 81,410 -
Total operating revenues 3,865,153 225,085 4,090,238 6,038,347
Operating Expenses:
Cost of sales and service 3,791,225 257,146 4,048,371 5,180,443
Depreciation and amortization 288,458 64,609 353,067 497,404
Total operating expenses 4,079,683 321,755 4,401,438 5,677,847
Operating income (loss)(214,530) (96,670) (311,200) 360,500
Nonoperating Revenues (Expenses):
Interest and investment income 83,854 - 83,854 97,219
Gain (loss) on disposal of property
and equipment 16,641 - 16,641 48,656
Total nonoperating revenues (expenses)100,495 - 100,495 145,875
Income (loss) before contributions and
transfers (114,035) (96,670) (210,705) 506,375
Contributions and Transfers:
Capital contributions - 23,969 23,969 -
Transfers in - 58,175 58,175 19,570
Total contributions and transfers - 82,144 82,144 19,570
Change in net assets (114,035) (14,526) (128,561) 525,945
Total net assets, July 1, 2006 935,249 441,833 4,537,740
TOTAL NET ASSETS - JUNE 30, 2007 821,214$ 427,307$ 5,063,685$
Reconciliation to government-wide statements of net assets:
Adjustment to reflect the consolidation of Internal Service Funds'
activities related to Enterprise Funds 62,988
CHANGE IN NET ASSETS OF BUSINESS-TYPE ACTIVITIES (65,573)$
See accompanying notes to the basic financial statements.
ActivitiesBusiness-type Activities
CITY OF PADUCAH, KENTUCKY
STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN FUND NET ASSETS
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2007
Governmental
Internal
Service
Funds
-48-
Exhibit 15
Nonmajor
Solid Enterprise
Cash Flows from Operating Activities: Waste Funds Totals
Cash received from customers 3,810,046$ 157,230$ 3,967,276$ 6,208,087$
Payments to suppliers (2,572,618) - (2,572,618) (224,921)
Payments to employees (880,173) - (880,173) (296,268)
Claims paid - - - (3,408,898)
Payments to internal service funds (426,216) (4,828) (431,044) -
Other receipts (payments)17,132 (250,967) (233,835) (1,367,634)
Net cash provided (used) by operating activities (51,829) (98,565) (150,394) 910,366
Cash Flows from Noncapital Financing Activities:
Transfers (to) from other funds - 58,175 58,175 19,570
Cash Flows from Capital and Related
Financing Activities:
Capital contributions - 23,969 23,969 -
Purchase of capital assets (549,180) (17,690) (566,870) (671,190)
Proceeds from sale of capital assets 16,641 - 16,641 49,666
Net cash provided (used) by capital and
related financing activities (532,539) 6,279 (526,260) (621,524)
Cash Flows from Investing Activities:
Proceeds from sale of investment securities 1,462,354 - 1,462,354 1,474,806
Interest on cash and investments 98,631 - 98,631 70,756
Purchase of investments (1,480,000) - (1,480,000) (2,322,767)
Net cash provided (used) by investing
activities 80,985 - 80,985 (777,205)
Net increase (decrease) in cash and cash
equivalents (503,383) (34,111) (537,494) (468,793)
Cash and cash equivalents, July 1, 2006 822,053 125,281 947,334 1,635,711
CASH AND CASH EQUIVALENTS,
JUNE 30, 2007 318,670$ 91,170$ 409,840$ 1,166,918$
Reconciliation of Operating Income (Loss) to Net
Cash Provided by Operating Activities:
Operating income (loss)(214,530)$ (96,670)$ (311,200)$ 360,500$
Adjustments to reconcile operating income to
net cash provided by operating activities:
Depreciation and amortization 288,458 64,609 353,067 497,404
Change in assets and liabilities:
Receivables (37,975) (67,855) (105,830) 180,399
Prepaid expenses - (1,665) (1,665) 136,064
Inventories - - - (20,653)
Accounts payable (87,782) 3,016 (84,766) (243,348)
NET CASH PROVIDED (USED) BY OPERATING
ACTIVITIES (51,829)$ (98,565)$ (150,394)$ 910,366$
See accompanying notes to the basic financial statements.
CITY OF PADUCAH, KENTUCKY
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2007
-49-
Governmental
Activities
Internal
Service
Business-type Activities
Funds
Exhibit 16
Private-
Pension purpose Agency
Funds Trusts Funds
Cash and cash equivalents 122,189$ 4,582$ 712,834$
Receivables:
Interest 68,180 - -
Prepaid expenses 255 - -
Investments at fair value
Money market funds - 5,594 -
Certificates of deposits 240,000 - -
Common stock 5,723,490 - -
Corporate bonds 1,029,907 - -
U.S. agencies bonds 808,379 - -
Mortgage backed securities 3,761,272 - -
Mutual funds 3,034,198 140,373 -
Total assets 14,787,870 150,549 712,834
Voucher and accounts payable 279 - -
Due to other funds - 100 -
Payroll taxes and withholdings
payable - - 712,834
Total liabilities 279 100 712,834$
Held in trust for pension benefits
and other purposes 14,787,591$ 150,449$ -$
See accompanying notes to the basic financial statements
NET ASSETS
Primary Government
-50-
ASSETS
LIABILITIES
CITY OF PADUCAH, KENTUCKY
STATEMENT OF NET ASSETS
FIDUCIARY FUNDS
JUNE 30, 2007
Exhibit 17
Private-
Pension purpose
Additions: Funds Trusts
Contributions:
Employer 234,221$ -$
Plan members 12,386 -
Intergovernmental revenues - 10,615
Total contributions 246,607 10,615
Investment income:
Net increase (decrease) in
fair value of investments 1,520,671 7,937
Interest and dividends 438,718 3,074
Net investment income 1,959,389 11,011
Interfund transfers - 50,000
Total additions 2,205,996 71,626
Deductions:
Benefits 1,840,165 -
Capital outlay - 7,486
Administrative expenses 86,383 5,189
Total deductions 1,926,548 12,675
Change in net assets 279,448 58,951
Net assets, July 1, 2006 14,508,143 91,498
NET ASSETS, JUNE 30, 2007 14,787,591$ 150,449$
See accompanying notes to the basic financial statements.
-51-
STATEMENT OF CHANGES IN NET ASSETS
CITY OF PADUCAH, KENTUCKY
FIDUCIARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2007
CITY OF PADUCAH, KENTUCKY
BASIC FINANCIAL STATEMENTS
COMPONENT UNITS FINANCIAL STATEMENTS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2007
Exhibit 18
All
Paducah Paducah Paducah Component
Water Power Transit Unit
Current Assets: Works System Authority Totals
Cash and cash equivalents 581,532$ 4,086,775$ 47,085$ 4,715,392$
Receivables, net:
Accounts 339,096 2,551,308 50,730 2,941,134
Grants - - 614,512 614,512
Other 712,345 81,521 9,528 803,394
Inventories 415,268 1,312,167 62,035 1,789,470
Prepaid expenses - 53,433 53,287 106,720
Other current assets 763,181 - - 763,181
Total current assets 2,811,422 8,085,204 837,177 11,733,803
Noncurrent Assets:
Investments, restricted 799,541 1,876,884 - 2,676,425
Net capital assets:
Land and construction in progress 1,106,899 1,924,152 486,314 3,517,365
Depreciable capital assets 31,024,878 44,153,429 3,732,745 78,911,052
Restricted assets 1,745,444 - - 1,745,444
Other assets 47,833 429,776 - 477,609
Total noncurrent assets 34,724,595 48,384,241 4,219,059 87,327,895
Total assets 37,536,017 56,469,445 5,056,236 99,061,698
ASSETS
-52-
CITY OF PADUCAH, KENTUCKY
STATEMENT OF NET ASSETS
COMPONENT UNITS
JUNE 30, 2007
All
Paducah Paducah Paducah Component
Water Power Transit Unit
Current Liabilities: Works System Authority Totals
Voucher and accounts payable 388,359$ 4,061,671$ 636,886$ 5,086,916$
Cash deficit - - - -
Line of credit - 1,568,014 - 1,568,014
Accrued payables - 460,118 73,995 534,113
Deferred revenue - 768,282 - 768,282
Accrued interest - 156,375 - 156,375
Notes payable due within one year 25,000 - 30,171 55,171
Bonds payable due within one year 990,000 385,000 - 1,375,000
Other current liabilities 990,598 731,044 - 1,721,642
Total current liabilities 2,393,957 8,130,504 741,052 11,265,513
Noncurrent Liabilities:
Bonds payable 911,580 4,109,368 - 5,020,948
Notes payable 140,000 6,000,000 339,382 6,479,382
Other liabilities - 401,938 - 401,938
Total noncurrent liabilities 1,051,580 10,511,306 339,382 11,902,268
Total liabilities 3,445,537 18,641,810 1,080,434 23,167,781
Net Assets:
Invested in capital assets,
net of related debt 30,113,030 35,583,213 3,659,649 69,355,892
Restricted for:
Capital projects - - - -
Debt service 1,581,690 1,876,884 - 3,458,574
Unrestricted 2,395,760 367,538 316,153 3,079,451
TOTAL NET ASSETS 34,090,480$ 37,827,635$ 3,975,802$ 75,893,917$
See accompanying notes to the basic financial statements
-53-
NET ASSETS
LIABILITIES
Exhibit 19
Charges for
Authorities: Expenses Services
Business-type activities:
Paducah Water Works 6,712,204$ 6,867,559$ -$ 520,355$
Paducah Power System 48,905,522 49,733,519 - -
Paducah Transit Authority 5,988,216 3,366,711 1,990,000 531,898
TOTAL COMPONENT UNITS 61,605,942$ 59,967,789$ 1,990,000$ 1,052,253$
General Revenues:
Unrestricted investment earnings
Gain (loss) on disposal of assets
Miscellaneous general
Total general revenues and transfers
Change in net assets
Net assets, July 1, 2006
NET ASSETS, JUNE 30, 2007
See accompanying notes to the basic financial statements
-54-
CITY OF PADUCAH, KENTUCKY
STATEMENT OF ACTIVITIES
COMPONENT UNITS
FOR THE YEAR ENDED JUNE 30, 2007
Grants and
Contributions
Program Revenues
FUNCTIONS/PROGRAMS Operating
Grants and
Contributions
Capital
Paducah Paducah Paducah
Water Power Transit
Works System Authority Totals
675,710$ -$ -$ 675,710$
- 827,997 - 827,997
- - (99,607) (99,607)
675,710 827,997 (99,607) 1,404,100
157,231 315,997 8,277 481,505
- - - -
266,784 38,705 25,625 331,114
424,015 354,702 33,902 812,619
1,099,725 1,182,699 (65,705) 2,216,719
32,990,755 36,644,936 4,041,507 73,677,198
34,090,480$ 37,827,635$ 3,975,802$ 75,893,917$
-55-
Net (Expense) Revenue and Changes in Net Assets
CITY OF PADUCAH, KENTUCKY
NOTES TO THE FINANCIAL STATEMENTS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2007
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2007
Note 1 - Summary of Significant Accounting Policies:
General Statement
The City of Paducah (City) complies with generally accepted accounting principles (GAAP). GAAP
includes all relevant Governmental Accounting Standards Board (GASB) pronouncements. In the
government-wide financial statements and the fund financial statements for the proprietary funds,
Financial Accounting Standards Board (FASB) pronouncements and Accounting Principles Board (APB)
opinions issued on or before November 30, 1989, have been applied unless those pronouncements conflict
with or contradict GASB pronouncements, in which case, GASB pronouncements prevails. For enterprise
funds, GASB Statement Nos. 20 and 34 provide the City the option of electing to apply FASB
pronouncements issued after November 30, 1989. The City has elected not to apply those
pronouncements. The accounting and reporting framework and the more significant accounting policies
are discussed in subsequent subsections of this Note. The financial reporting entity, basis of accounting,
and other significant policies employed by the City are summarized as follows:
Financial Reporting Entity
The City operates under a City Manager form of government. The Board of Commissioners consists of a
Mayor and four Commissioners elected at large by the citizens on a non-partisan basis. As required by
generally accepted accounting principles, the financial statements of the reporting entity include those of
the City of Paducah (the primary government) and its component units. The component units discussed
below are included in the City’s reporting entity because of the significance of their operational or
financial relationships with the City.
Blended Component Units
Police and Firefighters’ Pension Fund - This retirement fund was established for the benefit of the
police and firemen of the City. It is administered by a Board of Trustees consisting of the Mayor, City
Finance Director and representatives of the Police and Fire Departments. The Board is authorized to
establish benefit levels and to approve actuarial assumptions used in the determination of contribution
levels.
Discretely Presented Component Units
The component unit column in the basic financial statements includes the financial data of the City’s other
component units. They are reported in a separate column to emphasize that they are legally separate from
the City. The following component units are included in the reporting entity because of their financial
relationship with the City and the City is able to impose its will on the organizations.
(Continued)
-56-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2007
Note 1 - Summary of Significant Accounting Policies:
Paducah Water Works - The City of Paducah Water Works Commission is appointed by the Mayor.
The rates for user charges and bond issuance authorizations are subject to approval by the City
Commission of the City of Paducah.
Paducah Power System - The members of the Electric Plant Board are appointed by the Mayor. The
system provides a financial benefit to the City through a payment in lieu of taxes.
Transit Authority of the City of Paducah - The Transit Authority’s governing board is appointed by
the Mayor of the City of Paducah. The City is the grantee agency receiving, on behalf of the Transit
Authority, its principal revenues. The City also contributes substantially to the operation of the
Authority by providing cash subsidies and facilities.
Complete financial statements of the individual component units can be obtained from their respective
administrative offices in the following locations:
Paducah Water Works Paducah Power System Transit Authority of the
401 Washington Street 1500 Broadway City of Paducah
Paducah, Kentucky 42003 Paducah, Kentucky 42001 850 Harrison Street
Paducah, Kentucky 42001
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 in the City’s report.
Paducah Housing Authority – The Paducah Housing Authority (PHA) is a legally separate entity that
provides for construction, operation and management of low income housing projects within the City.
PHA is a legally separate entity and is not financially accountable to the City. This organization is not
included as a component unit of the City.
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. This organization is not included as a component unit of
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. This organization is not included as a component unit of the City.
Paducah Junior College, Incorporated (PJC) – The College is a part of the University of Kentucky
Community College System which is now administered by the Kentucky Community and Technical
College System. Under this system, the University of Kentucky receives the monies from student
tuition, fees and other related income and provides the financing for the operational budget of the
College. A tax levied and collected by the City is a primary revenue source for the College. These
funds, as well as gifts and grants made to the College, may be used for the acquisition or improvement
of property or to finance programs beyond the level of those normally provided by community colleges
in the University of Kentucky system. PJC is a legally separate entity and is not financially
accountable to the City. This organization is not included as a component unit of the City.
(Continued)
-57-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2007
Note 1 - Summary of Significant Account Policies:
Basis of Presentation
Government-wide Financial Statements
The Statement of Net Assets and Statement of Activities display information about the reporting
government as a whole. They include all funds of the reporting entity except for fiduciary funds. The
statements distinguish between governmental and business-type activities. Governmental activities
generally are financed through taxes, intergovernmental revenues, and other nonexchange revenues.
Business-type activities are financed in whole or in part by fees charged to external parties for goods or
services.
Fund Financial Statements
Fund financial statements of the reporting entity are organized into funds, each of which is considered to
be separate accounting entities. Each fund is accounted for by providing a separate set of self-balancing
accounts that constitute its assets, liabilities, fund equity, revenues, and expenditure/expenses. Funds are
organized into three major categories: governmental, proprietary, and fiduciary. An emphasis is placed
on major funds within the governmental and proprietary categories. A fund is considered major if it is the
primary operating fund of the City or meets the following criteria:
a. Total assets, liabilities, revenues, or expenditures/expenses of that individual governmental or
enterprise fund are at least ten percent of the corresponding total for all funds of that category or
type; and
b. Total assets, liabilities, revenues, or expenditures/expenses of the individual governmental fund or
enterprise fund are at least five percent of the corresponding total for all governmental and enterprise
funds combined.
The funds of the financial reporting entity are described below:
Governmental funds are those funds through which most governmental functions typically are financed.
The measurement focus of governmental funds is on the sources, uses and balance of current financial
resources. The City has presented the following major governmental funds:
General Fund - To account for resources traditionally associated with governments which are not
required to be accounted for in another fund.
General Capital Improvements – To account for the acquisition or construction of major capital projects
other than those financed by proprietary fund operations and special assessments.
Special Revenue Investment Fund – To account for restricted funds from employee license fee used for
economic development, neighborhood redevelopment and infrastructure capital investments within
Paducah.
The City has presented the following major proprietary fund:
Solid Waste Fund – To account for the provision of refuse services to the residents of the City.
Additionally, the City reports the internal service funds which are used to account for the fleet
management services, self funded property and casualty self insurance and self funded health and
disability insurance provided to departments of the city.
(Continued)
-58-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2007
Note 1 - Summary of Significant Account Policies:
Fiduciary funds report resources held in trust. Two of these funds are single-employer defined benefit
funds and are administered by the City. These funds are Police and Firefighters’ Pension Fund (PFPF) and
Appointive Employee’ Pension Fund (AEPF). Pension trust funds report the receipt, investment, and
distribution of retirement contributions. The remaining funds are private-purpose trust funds which report
the receipt and distribution of in accordance with maintenance trust agreements.
Agency fund accounts for the City’s payroll wages, taxes and related withholdings.
Measurement Focus
Measurement focus is a term used to describe “which” transactions are recorded within the various
financial statements. Basis of accounting refers to “when” transactions are recorded regardless of the
measurement focus applied.
On the government-wide Statement of Net Assets and the Statement of Activities, both governmental and
business-type 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 assets (or cost
recovery), financial position, and cash flows. All assets and liabilities (whether current or
noncurrent) associated with their activities are reported. Proprietary, pension and private-purpose
trust fund equity is classified as net assets.
c. Agency funds are not involved in the measurement of results of operations; therefore, measurement
focus is not applicable to them.
Basis of Accounting
In the government-wide Statement of Net Assets and Statement of Activities, both governmental and
business-type activities are presented using the accrual basis of accounting generally including the
reclassification or elimination of internal activity (between or within funds). Under the accrual basis of
accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred
or economic asset used.
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
(Continued)
-59-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2007
Note 1 - Summary of Significant Account Policies:
principal and interest which are reported when due. Agency funds are presented using the accrual basis of
accounting.
All proprietary, pension and private-purpose funds utilize the accrual basis of accounting. Under the
accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the
liability is incurred or economic asset used.
Revenues – Exchange and Non-Exchange Transactions
Revenue resulting from exchange transactions, in which each party gives and receives essentially equal
value, is recorded on the accrual basis when the exchange takes place. On a modified accrual basis,
revenue is recorded in the fiscal year in which the resources are measurable and become available.
Available means that the resources will be collected within the current fiscal year or are expected to be
collected soon enough thereafter to be used to pay liabilities of the current fiscal year. For the City,
available means expected to be received within sixty days of year end.
Non-exchange transactions, in which the City receives value without directly giving equal value in return,
include employee license taxes, property taxes, grants, entitlements and donations. The City considers
property taxes as available if they are collected within sixty days after year end. Revenue from grants,
entitlements, and donations is recognized in the year in which all eligibility requirements have been
satisfied. Eligibility requirements include timing requirements, which specify the year when the resources
are required to be used or the year when use is first permitted, matching requirements, in which the City
must provide local resources to be used for a specified purpose, and expenditure requirements, in which
the resources are provided to the City on a reimbursement basis. On a modified accrual basis, revenue
from non-exchange transactions must also be available before it can be recognized.
The revenues susceptible to accrual are taxes, intergovernmental, employer and employees’ contributions
to trust funds, interest revenue and charges for services. Permit revenues are not susceptible to accrual
because generally they are not measurable until received in cash.
Deferred revenue
The City reports deferred revenue on its statement of net assets. Deferred revenues arise when potential
revenue does not meet both the “measurable” and “available” criteria for recognition in the current period.
Deferred revenues also arise when resources are received by the City before it has a legal claim to them, as
when grant monies are received prior to the incurrence of qualifying expenditures. In subsequent periods,
when both revenue recognition criteria are met, or when the City has a legal claim to the resources, the
liability for deferred revenue is removed from the statement of net assets and revenue is recognized.
Allocation of Indirect Expenses
The City allocates indirect expenses primarily comprised of fleet management services and various self
funded insurance coverage provided to departments and employees of the city not directly allocated.
Allocations are charged to functions based on use by weighted-average methodology.
Budgets and Budgetary Accounting
The City legal adopts annual budgets for all governmental and proprietary funds except for Section Eight
Housing Fund. The City follows these procedures in establishing the budgetary data reflected in these
financial statements:
(Continued)
-60-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2007
Note 1 - Summary of Significant Accounting Policies:
1. Prior to July, the City Manager submits to the City Commission a proposed operating budget for the
fiscal year commencing on July 1. The operating budget includes proposed expenditures and the
means of financing those.
2. Public hearings are conducted by the City to obtain taxpayer comments.
3. Prior to July, the budget is legally enacted through passage of an ordinance.
4. The City Manager is authorized to transfer budgeted amounts between department line items;
however, any revisions that alter the total expenditures of any department must be approved by the
City Commission.
5. Formal budgetary integration is employed as a management control device during the year and the
budget is legally adopted. Budget amendments are also legally adopted.
6. The budget is adopted on a basis (budget basis), which differs from generally accepted accounting
principles (GAAP basis).
Encumbrance accounting, under which purchase orders, contracts, and other commitments for the
expenditure of monies are recorded in order to reserve that portion of the applicable appropriation, is
employed as an extension of formal budgetary integration in the General Fund, Special Revenue Funds,
Debt Service Fund, and Capital Projects Funds. In accordance with generally accepted accounting
principles (GAAP), encumbrances outstanding at year end are reported as reservations of fund balances
since they do not constitute expenditures or liabilities. There are no encumbrances at June 30, 2007.
Cash and Investments
The City Council updated and adopted formal deposit and investment policies in January 2001. These
policies apply to all City funds not contained in public trusts. Pension trust fund has investment policies
separately approved by their oversight board. The private purpose trust has no adopted deposit and
investment policy.
For the purpose of the Statement of Net Assets, “cash and cash equivalents” includes all demand and
savings accounts of the City. For the purpose of the proprietary fund Statement of Cash Flows, “cash and
cash equivalents” include all demand and savings accounts, and certificates of deposit or short-term
investments with an original maturity of three months or less.
Investments are reported at fair value which is determined using selected bases. Short-term investments
are reported at cost, which approximates fair value. Securities traded on a national or international
exchange are valued at the last reported sales price at current exchange rates. Managed funds related to the
pension and private purpose trust funds not listed on an established market are reported at estimated fair
value as determined by the respective fund managers based on quoted sales prices of the underlying
securities. Cash deposits and certificates of deposits are reported at carrying amount which reasonably
estimates fair value. Additional cash and investment disclosures are presented in Note 3.
(Continued)
-61-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2007
Note 1 - Summary of Significant Accounting Policies:
Receivables
In the government-wide statements, receivables consist of all revenues earned at year end and not yet
received. Major receivable balances for the governmental activities include property taxes, employee
earnings taxes, business licenses, insurance premiums taxes, franchise taxes, grant revenue and interlocal
note receivable. 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, material receivables
in governmental funds include revenue accruals such as franchise tax, employee earnings taxes, business
licenses, insurance premiums taxes, grants and other similar intergovernmental revenues since they are
usually both measurable and available.
Nonexchange transactions collectible but not available are deferred in the fund financial statements in
accordance with modified accrual, but not deferred in the government-wide financial statements in
accordance with the accrual basis. 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
material receivables consist of all 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 Assets. See Note 3 for details of interfund transactions, including receivables and
payables at year end.
Inventories
Inventories are stated at cost on a first-in, first-out basis.
Capital Assets
The accounting treatment of property, plant, and equipment (capital assets) depends on whether the assets
are used in governmental fund operations or proprietary fund operations and whether they are reported in
the government-wide or fund financial statements.
Government-wide Statement
In the government-wide financial statements, property, plant, and equipment are accounted for as capital
assets. All capital assets are valued at historical cost, or estimated historical cost if actual is unavailable,
except for donated capital assets which are recorded at their estimated fair value at the date of donation.
Estimated historical cost was used to value the majority of the assets acquired prior to June 30, 2004.
Assets capitalized have an original cost of $500 or more prior to July 1, 1999, and $2,500 or more after
July 1, 1999. Prior to July 1, 2002, governmental funds’ infrastructure assets were not capitalized. These
assets have been valued at estimated historical cost.
(Continued)
-62-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2007
Note 1 - Summary of Significant Accounting Policies:
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 10-20 Years
Buildings 30-60 Years
Building improvements 3- 7 Years
Infrastructure 15-20 Years
Equipment 5-25 Years
Furnishings and fixtures 3-10 Years
Vehicles 3- 9 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.
Restricted Assets
Certain proceeds of enterprise fund revenue bonds, as well as certain resources set aside for their
repayment, are classified as restricted assets on the balance sheet because their use is limited to applicable
bond covenants.
Compensated Absences
Accumulated unpaid vacation, sick pay, and other employee benefit amounts are recorded as long-term
debt in the government-wide statements. The current portion of accrued compensated absences is
estimated based on historical trends. In the fund financial statements, governmental funds report only the
matured compensated absence liability payable from expendable available financial resources, while the
proprietary funds report the liability as it is incurred.
Accumulations for vacation pay are restricted to a maximum of 50 days and provide vesting rights upon
completion of six months service. Accumulations for sick pay are restricted to a maximum of 150 days
and provide payment to employees or beneficiaries for accumulations in excess of 50 days and up to 120
days upon death or retirement from City service.
Long-Term Debt
The accounting treatment of long-term debt depends on whether the assets are used in governmental fund
operations or proprietary fund operations and whether they are reported in the government-wide or fund
financial statements.
All long-term debt to be repaid from governmental and business-type resources is reported as liabilities in
the government-wide statements. The long-term debt consists primarily of bonds payable, notes payable
and accrued compensated absences.
Long-term debt for governmental funds is not reported as liabilities in the fund financial statements. The
debt proceeds are reported as other financing sources and payment of principal and interest as
expenditures. The accounting for proprietary funds is the same in the fund statements as it is in the
government-wide statements.
(Continued)
-63-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2007
Note 1 - Summary of Significant Accounting Policies:
Equity Classifications
Government-wide Statements
Equity is classified as net assets and displayed in three components:
a. Invested in capital assets, net of related debt – Consists of capital assets including restricted capital
assets, net of accumulated depreciation and reduced by the outstanding balances of any bonds,
mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or
improvement of those assets.
b. Restricted net assets – Consists of net assets with constraints placed on the use either by (1) external
groups such as creditors, grantors, contributors, or laws or regulations of other governments; or (2)
law through constitutional provisions or enabling legislation.
c. Unrestricted net assets – All other net assets that do not meet the definition of “restricted” or
“invested in capital assets, net of related debt.”
Fund Statements
Governmental fund equity is classified as fund balance. Fund balance is further classified as reserved and
unreserved. Proprietary fund equity is classified the same as in the government-wide statements.
Interfund Transactions
Interfund services provided and used are accounted for as revenues, expenditures or expenses.
Transactions that constitute reimbursements to a fund for expenditures/expenses initially made from it that
are properly applicable to another fund, are recorded as expenditures/expenses in the reimbursing fund and
as reductions of expenditures/expenses in the fund that is reimbursed.
All other interfund transactions are reported as transfers. All other interfund transfers are reported as
operating transfers.
Program Revenues
Amounts reported as program revenues include 1) charges to customers or applicants for goods, services,
or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions,
including special assessments. Internally dedicated resources are reported as general revenues rather than
as program revenues. Likewise, general revenues include all taxes.
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.
(Continued)
-64-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2007
Note 1 - Summary of Significant Accounting Policies:
Expenditures/Expenses
In the government-wide financial statements, expenses are classified by function for both governmental
and business-type activities.
In the fund financial statements, expenditures are classified as follows:
Governmental Funds - by character: Current (further classified by function)
Debt Service
Capital Outlay
Proprietary Fund - by operating and nonoperating
In the fund financial statements, governmental funds report expenditures of financial resources.
Proprietary funds report expenses relating to use of economic resources.
Interfund Transfers
Permanent reallocations of resources between funds of the reporting entity are classified as interfund
transfers. For the purposes of the Statement of Activities, all interfund transfers between individual
governmental funds have been eliminated.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles
requires management to make assumptions that affect reported amounts and disclosures. Accordingly,
actual results could differ from those estimates.
Stewardship, Compliance, and Accountability
By its nature as a local government unit, the City and its component units are subject to various federal,
state, and local laws and contractual regulations. An analysis of the City’s compliance with significant
laws and regulations and demonstration of its stewardship over City resources follows.
Fund Accounting Requirements
The City complies with all state and local laws and regulations requiring the use of separate funds.
(Continued)
-65-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2007
Note 1 - Summary of Significant Accounting Policies:
Revenue Restrictions
The City has various restrictions placed over certain revenue sources from state or local requirements. The
primary restricted revenue sources include:
Revenue Source Legal Restrictions of Use
Kentucky Police Incentive Grant Salaries
Kentucky Fire Incentive Grant Salaries
HOME Investment Partnerships Grant Construction of Low-income
Rental Units
Emergency Communication Revenue E-911 Emergency Services
County Bed Tax Debt Obligations
Kentucky Transportation Cabinet Street Repairs and Maintenance
Kentucky Housing Corporation Façade Loans
Other Grants Grant Program Expenditures
25% of Employee Earning Tax Economic and Capital
Development
For the year ended June 30, 2007, 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. For the year ended June 30, 2007, the City
incurred no such indebtedness.
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, 2007, are as follows:
Description Date
Assessment and enforceable lien January 1, 2006
Levy September 26, 2006
Face value amount payment dates 1st half by November 1, 2006
2nd half by February 1, 2007
Delinquent date - 10% penalty
plus 1/2% per month 1st half - November 30, 2006
2nd half - February 28, 2007
(Continued)
-66-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2007
Note 3 - Detail Notes on Transaction Classes/Accounts:
The following notes present detail information to support the amounts reported in the basic financial
statements for its various assets, liabilities, equity, revenues, and expenditures/expenses.
Deposits
Custodial credit risk for deposits is the risk that in the event of a bank failure, the City’s deposits may not
be returned or the City will not be able to recover collateral securities in the possession of an outside party.
The City’s investment policy requires all investments be made in accordance with applicable legal
requirements with consideration of investment safety. Accordingly, the City maintains collateral
agreements with its financial institutions. Deposits are 101% secured with collateral valued at market or
par, whichever is lower, less the amount of the Federal Deposit Insurance Corporation insurance (FDIC).
The City Council approves and designates a list of authorized depository institutions based on evaluation
of solicited responses and certifications provided by financial institutions and recommendations of an
evaluation committee and/or Finance Director.
Deposits of the City’s reporting entity are insured or collateralized with securities held by the City, its
agent, or by the pledging financial institution’s trust department or agent in the name of City. During the
year ended June 30, 2007, the City’s only cash and cash equivalents were demand deposits. At year end,
the carrying amount and the bank balance of the City’s cash and cash equivalents was $9,358,924 and
$10,059,708, respectively.
Investments
As of June 30, 2007, the City’s reporting entity had the following investments:
Fair Value/ Average Investment Maturities (In Years) (2)
Carrying Credit Quality/ Less Greater
Types of Investments Amount Rating (1) Than 1 1-5 6-10 Than 10
Primary Government
Certificates of Deposits (3) $ 7,345,534 NA $ 7,345,534 $ - $ - $ -
Component Units
Money Market Funds 943,038 AAA 943,038 - - -
Certificates of Deposits 1,733,387 NA 1,733,387 - - -
2,676,425
Total Primary Government
And Component Units $ 10,021,959
Fiduciary and Private
Purpose Trust Funds
Money Market Funds $ 5,594 AAA $ - $ - $ - $ -
Certificates of Deposits (3) 240,000 NA 240,000 - - -
Common Stock 5,723,490 NA NA NA NA NA
Corporate Bonds 1,029,907 AAA/A- 297,791 197,212 534,904 -
U.S. Agencies 808,379 AAA 808,379 - - -
Mortgage Backed Securities (4) 3,761,272 AAA/AA- 114,341 851,237 2,795,694 -
Mutual Funds
Equity 87,315 NA NA NA NA NA
Fixed 53,058 NA NA NA NA NA
Index 3,034,198 NA NA NA NA NA
Total Fiduciary and Private
Purpose Trust Funds $ 14,743,213
(Continued)
-67-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2007
Note 3 - Detail Notes on Transaction Classes/Accounts:
(1) Ratings are provided where applicable to indicate associated Credit Risk. NA indicates not applicable.
NR indicates that instrument is not rated.
(2) Maturities are provided for debt instruments with maturity dates. NA indicates not applicable.
(3) $240,000 of the fiduciary's certificates of deposits is pooled with the primary government's certificates
of deposits.
(4) Includes $502,294 of securities callable as of 6/30/07.
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 Council 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 state of Kentucky and of its agencies and
instrumentalities;
5. Certificates of deposit issued by or other interest-bearing accounts of any bank or savings and loan
institution which are insured by the Federal Deposit Insurance Corporation or similar entity or which
are collateralized, to the extent uninsured, by any obligations permitted by section 41.240(4) of the
Kentucky Revised Statutes;
6. Securities issued by a state or local government, or any instrumentality or agency thereof, in the
United States, and rated in one of the three highest categories by a national recognized rating
agency.
(Continued)
-68-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2007
Note 3 - Detail Notes on Transaction Classes/Accounts:
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 over-
concentration of assets in a specific maturity period, a single issuer, or an individual class of securities.
Unless matched to a specific cash flow, investments are not, in general, made in securities maturing more
than five years from the date of purchase. Surplus cash may be invested in securities exceeding five years
if the maturity of such investments is made to coincide as nearly as practicable with the expected use of the
investment. Concentration of credit risk is the risk of loss attributed to the magnitude of the City’s
investment in a single issuer. The City policy does not specifically address concentration of credit risk.
Pension Trust Policy
The City’s pension trust is the Police and Firefighters’ Pension Fund (PFPF). Investment policy provide
for investment manager(s) who have full discretion of assets allocated to them subject to the overall
investment guidelines set out in the policy. Overall investment guidelines provide for diversification and
allow investment in domestic and international common stocks, fixed income securities, and cash
equivalents. Custodial credit risk is addressed by the policy providing for the engagement of a custodian
who accepts possession of securities for safekeeping; collects and disburses income; collects principal of
sold, matured, or called items; and provides periodic accounting to the pension board.
Asset allocation guideline for the plan is as follows:
PFPF Retirement Plan
Minimum Target Maximum
Equities 35% 50% 65%
Fixed Income 35% 50% 65%
The retirement plan addresses credit risk and concentration of credit risk with a policy that prohibits
investment of more than 5% of its assets in the securities of 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)
-69-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2007
Note 3 - Detail Notes on Transaction Classes/Accounts:
Capital Assets
Capital asset activity for the year ended June 30, 2007, was as follows:
Primary Government
Balance
July 1, 2006
Additions
Deductions
Balance
June 30, 2007
Capital assets, not being depreciated:
Land $ 5,320,275 $ 1,197,941 $ - $ 6,518,216
Construction in Progress 3,945,451 4,236,941 7,380,215 802,177
Total capital assets, not being
depreciated:
9,265,726
5,434,882
7,380,215
7,320,393
Capital assets, being depreciated:
Land improvements 1,954,953 719,589 - 2,674,542
Building and improvements 17,923,587 421,273 - 18,344,860
Infrastructure 29,556,136 5,007,666 - 34,563,802
Equipment 7,379,496 430,080 13,000 7,796,576
Furnishings and fixtures 241,855 - - 241,855
Vehicles 7,116,024 675,965 423,710 7,368,279
Totals at historical cost 64,172,051 7,254,573 436,710 70,989,914
Less: Accumulated depreciation
Land improvements 1,014,376 54,145 - 1,068,521
Buildings and improvements 10,819,836 329,165 13,000 11,136,001
Infrastructure 13,294,630 2,093,223 - 15,387,853
Equipment 5,795,893 540,681 - 6,336,574
Furnishings and fixtures 234,743 1,267 - 236,010
Vehicles 5,491,923 500,795 422,700 5,570,018
Total accumulated depreciation 36,651,401 3,519,276 435,700 39,734,977
Total capital assets, being depreciated,
net:
$27,520,650
$ 3,735,297
$ 1,010
$ 31,254,937
Primary Government Activities
Capital Assets – Net
$36,786,376
$ 9,170,179
$ 7,381,225
$ 38,575,330
Business-type Activities:
Balance
July 1, 2006
Additions
Deductions
Balance
June 30, 2007
Capital assets, not being depreciated:
Land $ 65,908 $ - $ - $ 65,908
(Continued)
-70-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2007
Note 3 - Detail Notes on Transaction Classes/Accounts:
Business-type Activities:
Balance
July 1, 2006
Additions
Deductions
Balance
June 30, 2007
Capital assets, being depreciated:
Building and improvements 429,254 - - 429,254
Equipment 2,133,452 17,690 - 2,151,142
Vehicles 2,164,751 549,180 86,633 2,627,298
Totals at historical cost 4,727,457 566,870 86,633 5,207,694
Less: Accumulated depreciation
Buildings and improvements 162,164 13,420 - 175,584
Equipment 2,022,126 73,673 - 2,095,799
Vehicles 1,331,355 265,974 86,633 1,510,696
Total accumulated depreciation 3,515,645 353,067 86,633 3,782,079
Total capital assets, being depreciated,
net:
$ 1,211,812
$ 213,803
$ -
$ 1,425,615
Business - Type Activities
Capital Assets – Net
$ 1,277,720
$ 213,803
$ -
$ 1,491,523
Depreciation expense was charged to governmental activities as follows:
General government:
General administration $ 184,416
Finance 2,332
Planning 6,700
Inspections 528
Personnel 1,188
Information systems -
Fleet maintenance 5,496
Total general government 200,660
Public safety:
Police 133,303
Fire 35,680
Grants 149,670
Emergency 911 52,383
Court awards 11,697
Fleet Lease Trust 491,907
Total public safety 874,640
Public service:
Public works 88,350
Engineering 167,125
Total public service 255,475
(Continued)
-71-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2007
Note 3 - Detail Notes on Transaction Classes/Accounts:
Parks and recreation $ 93,407
Planning and development:
Infrastructure 2,093,223
Grants 1,871
Total planning and development 2,095,094
Total Depreciation Expense –
Governmental Activities
$ 3,519,276
Depreciation expense was charged to business-type activities as follows:
Solid Waste Fund $ 288,458
Civic Center 12,801
TISA Fund 51,808
Total Depreciation Expense –
Business-Type Activities
$ 353,067
Discretely Presented
Component Units:
Balance
July 1, 2006
Additions
Deductions
Balance
June 30, 2007
Capital assets, not being depreciated:
Land $ 1,878,096 $ 13,987 $ - $ 1,892,083
Construction in Progress 875,755 749,527 - 1,625,282
Total capital assets, not being
depreciated:
2,753,851
763,514
-
3,517,365
Capital assets, being depreciated:
Building and improvements 1,672,826 - - 1,672,826
Equipment 4,732,374 487,708 - 5,220,082
Utility Plant 122,988,607 7,069,631 894,855 129,163,383
Totals capital assets, being
depreciated:
129,393,807
7,557,339
894,855
136,056,291
Less: Accumulated depreciation:
Buildings and improvements 432,919 107,385 - 540,304
Equipment 1,885,319 734,540 - 2,619,859
Utility plant 51,174,945 3,728,051 917,920 53,985,076
Total accumulated depreciation
53,493,183
4,569,976
917,920
57,145,239
Total capital assets, being depreciated,
net:
75,900,624
2,987,363
(23,065)
78,911,052
Component Units
Capital Assets – Net
$78,654,475
$ 3,750,877
$ (23,065)
$ 82,428,417
(Continued)
-72-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2007
Note 3 - Detail Notes on Transaction Classes/Accounts:
Depreciation expense, charged to functions/programs of discretely presented major component units as
follows:
Paducah Water Works $ 1,246,302
Paducah Power System 2,481,749
Paducah Transit Authority 841,925
TOTAL DEPRECIATION EXPENSE BY ACTIVITY $ 4,569,976
Accounts Payable
Payables in the governmental and proprietary funds are composed of payables to vendors and accrued
salaries and benefits.
Long-Term Debt (1)
The City’s long-term debt is segregated between the amounts to be repaid from governmental activities
and amounts to be repaid from business-type activities.
Governmental Activities
As of June 30, 2007, the governmental long-term debt consisted of the following:
General obligation bonds:
Current portion $ 630,000
Noncurrent portion 17,680,000
TOTAL GENERAL OBLIGATION
BOND COSTS $18,310,000
Note payable:
Current portion $ 294,220
Noncurrent portion 3,026,303
TOTAL NOTE PAYABLE PAYMENTS $ 3,320,523
Accrued compensated absences:
Current portion $ 512,672
Noncurrent portion 1,426,286
TOTAL ACCRUED COMPENSATED
ABSENCES $ 1,938,958
(Continued)
-73-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2007
Note 3 - Detail Notes on Transaction Classes/Accounts:
Business-type Activities
As of June 30, 2007, the long-term debt payable from proprietary fund resources consisted of the
following:
Accrued compensated absences:
Current portion $ 70,451
Noncurrent portion 6,212
TOTAL ACCRUED COMPENSATED
ABSENCES $ 76,663
General Obligation Bonds
Series 2001 Bond Issue - The City of Paducah issued general obligation bonds of $9,290,000 in June,
2001, to finance construction of the new Luther F. Carson Four Rivers Center for the Performing Arts and
the expansion of the Julian Carroll Convention Center. Interest rates range from 3.5% to 5%. These bonds
are required to be fully paid within 25 years from the date of issue and are backed by the full faith and
credit of the City. While these bonds are issued by the City, 50% of the principal amount of the bonds was
issued on behalf of the County of McCracken, Kentucky which intends to participate on an equal basis
with the City in financing the projects and has issued the City a general obligation note in a principal
amount equal to 50% of the principal amount of the bonds and bearing interest at the same rates as the
City’s bonds in order to secure the County’s obligations to the City. This note receivable is reflected in the
government-wide Statement of Net Assets. In accordance with an Interlocal Cooperation Agreement
between the City, McCracken County, Kentucky (the County), and the Paducah-McCracken County
Tourist and Convention Commission (the Bureau), principal and interest payments on the bonds are being
made from an additional 2% transient room tax collected by the County with the remaining payments split
evenly between the City, the County, and the Bureau.
Series 2004 Bond Issue - The City of Paducah issued general obligation bonds of $5,000,000 in June,
2004, to finance construction of the new Infiniti Media Building. Interest rates range from 2.25% to 6%.
These bonds are required to be fully paid within 20 years from the date of issue and are backed by the full
faith and credit of the City. While these bonds are issued by the City, 50% of the principal amount of the
bonds was issued on behalf of the County of McCracken, Kentucky which intends to participate on an
equal basis with the City in financing the projects and has issued the City a general obligation note in a
principal amount equal to 50% of the principal amount of the bonds and bearing interest at the same rates
as the City’s bonds in order to secure the County’s obligations to the City. This note receivable is reflected
in the government-wide Statement of Net Assets. Principal and interest payments prior to September 1,
2007, on the bonds are being split evenly between the City and the County. After September 1, 2007, the
City and County will share 2.031% of the bond payments with the remaining amount being made from a
sublease with Infiniti Plastic Technologies, Inc.
Series 2005 Bond Issue - The City of Paducah issued general obligation bonds of $6,100,000 in
November, 2005, to finance the police and firefighter’s pension fund estimated actuary liability. Interest
rate is fixed at 5.35%. These bonds are required to be fully paid within 20 years from the date of issue and
are backed by the full faith and credit of the City.
(Continued)
-74-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2007
Note 3 - Detail Notes on Transaction Classes/Accounts:
Notes Payable
Kentucky League of Cities - On July 1, 2003, the City entered into an agreement in the amount of
$3,500,000 with the Kentucky League of Cities to finance the acquisition and installation of various public
capital projects. Interest is charged at a rate of approximately 2.98%. The note is required to be fully paid
within 20 years from the date of issue and is backed by the full faith and credit of the City.
Kentucky Association of Counties - The County of McCracken, Kentucky entered into an agreement in the
amount of $300,000 in May, 2005, with the Kentucky Association of Counties for purchase of a rail spur
in the Industrial Park West. Interest rates range from 2.175% to 4.250%. This note is required to be fully
paid within 5 years from the date of issue and is backed jointly by the full faith and credit of the City and
the County. While this 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 June 1, 2004.
This note was paid in full during the fiscal year by the County from a grant thru the Greater Paducah
Economic Development Council.
Kentucky Association of Counties - The County of McCracken, Kentucky entered into an agreement in the
amount of $250,000 in August, 2004, with the Kentucky Association of Counties to assist the Paducah-
McCracken County Industrial Development Authority finance construction of the new speculative building
in Industrial Park West. Interest rate is 4.250%. This note is required to be fully paid within 5 years from
the date of issue and is backed jointly by the full faith and credit of the City and the County. While this
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 June 1, 2004.
F. Burnham and Cynthia Jones – On September 6, 2006, the City entered into an agreement in the amount
of $375,000 with F. Burnham and Cynthia Jones to finance the acquisition of real property to be used for
the development of an arts school in the community. Interest rate is New York prime, adjusted monthly.
This note is required to be fully paid by January 8, 2009.
(Continued)
-75-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2007
Note 3 - Detail Notes on Transaction Classes/Accounts:
Changes in Long-Term Debt
The following is a summary of changes in long-term debt for the year ended June 30, 2007:
Amounts
Beginning Ending Due within
Type of Debt: Balance Additions Reductions Balance One Year
Governmental activities:
General obligation bonds:
Convention and Arts Center $ 8,130,000 $ - $ 260,000 $ 7,870,000 $ 270,000
Infiniti Media Building 4,680,000 - 165,000 4,515,000 175,000
Pension 6,100,000 - 175,000 5,925,000 185,000
Notes payable:
Kentucky League of Cities 3,110,411 - 141,585 2,968,856 145,887
Kentucky Association of
Counties 81,285 - 81,285 - -
Kentucky Association of
Counties 127,500 - 22,500 105,000 25,000
Jones Agreement - 246,666 - 246,666 123,333
Accrued compensated
absences 1,854,481 1,199,342 1,114,865 1,938,958 512,672
TOTAL GENERAL LONG-
TERM DEBT $24,083,707 $1,446,008 $1,960,235 $ 23,569,480 $ 1,436,892
Business-type activities:
Accrued compensated
absences $ 76,070 $ 70,487 $ 69,894 $ 76,663 $ 70,451
(1) To reconcile amounts in this schedule to the calculation of “net assets invested in capital assets, net of
related debt”, capital related debt includes 14.75% of the outstanding 2001 general obligation bonds -
$1,550,049 net of the portion on behalf of the County ($775,024); 100% of the outstanding 2004
general obligation bonds - $4,515,000 net of the portion on behalf of the County ($2,257,500); 100%
of the outstanding Kentucky League of Cities’ note payable - $2,968,856; 100% of the Jones
Agreement - $246,666 less unamortized bond costs - ($230,288).
Annual Debt Service Requirements
The annual debt service requirements to maturity, excluding obligations associated with compensated
absences, for long-term debt as of June 30, 2007, are as follows:
Year Ending
June 30 Principal Interest
2008 $ 924,220 $ 999,688
2009 953,653 966,929
2010 862,386 923,643
2011 902,092 886,485
2012 919,441 848,361
2013-2017 5,280,249 3,587,636
2018-2022 6,690,571 2,234,485
2023-2026 5,097,911 563,883
TOTALS $ 21,630,523 $ 11,011,110
(Continued)
-76-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2007
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, 2007, are as
follows:
Governmental
Activities
Business-type
Activities
Accrued sick leave $ 792,440 $ 18,278
Accrued vacation leave 1,012,309 52,937
Applicable payroll taxes 134,209 5,448
Totals 1,938,958 76,663
Less current portion 512,672 70,451
LONG-TERM PORTION $ 1,426,286 $ 6,212
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, 2007, approval had not yet been granted. The County estimated post-closure
care costs totaling $4,125,000 or $125,000 per year plus 10% for inflation. Actual costs may be higher due
to inflation, changes in technology, or changes in regulations. In the year ending June 30, 2001, the City
entered into an inter-local agreement to share equally the costs for post-closure costs and accordingly, has
recorded a long-term liability for 50% of the estimated closure expense. It is anticipated that post-closure
costs will be paid out of the Solid Waste Fund to the extent that funds are available with any excess costs
being funded using long-term borrowing.
Interfund Transactions and Balances
Interfund transfers during the year ended June 30, 2007, were as follows:
Governmental Funds:
Interfund
Transfers In
Interfund
Transfers Out
General Fund $ 91,668 $ 2,561,136
Capital Project Fund 3,560,249 317,697
Capital Investment Fund 1 2,441,425
Nonmajor Governmental Funds 1,558,059 236,464
Internal Service Funds 19,570 -
Fiduciary Funds:
Appointive Employee Pension Fund 25,000 -
Police and Firefighters’ Pension Fund 194,000 -
Other trusts 50,000 -
Proprietary Funds:
Nonmajor Proprietary Funds 58,175 -
TOTALS $ 5,556,722 $ 5,556,722
(Continued)
-77-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2007
Note 3 - Detail Notes on Transaction Classes/Accounts:
Transfers are used to (a) move revenues from the fund that statute or budget requires to collect them to the
fund that statute or budget requires to expend them and to (b) use unrestricted revenues collected in the
general fund to finance various programs accounted for in other funds in accordance with budgetary
authorizations.
Due To/From Balances
Due to/from balances used to cover current operating expenses were as follows as of June 30, 2007:
Due From Due To
General Fund $1,071,915 $ 951,313
General Capital Improvements Fund 93,215 -
Special Revenue Investment Fund 951,313 93,215
Nonmajor Governmental Funds - 85,815
Internal Service Funds - 986,000
Fidiciary Funds - 100
TOTALS $2,116,433 $2,116,443
Note 4 - Pension Plans - City of Paducah:
The City provides retirement benefits to its employees through three pension funds. Two of these funds
are single-employer defined benefit funds and are administered by the City. These funds are Police and
Firefighters’ Pension Fund (PFPF) and Appointive Employee’ Pension Fund (AEPF). The other pension is
a multi-employer public employee retirement fund administered by the Kentucky County Employees
Retirement System (CERS). The City also participates in two deferred compensation plans. Information
regarding these plans follows:
Single Employer Defined Benefit Funds
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. Benefits and refunds are recognized when due and payable in accordance with the terms of each
plan.
Funding - The Appointive Employee’s Pension Fund Board and the City of Paducah Police and
Firefighter’s Pension Fund Board are responsible for establishing or amending contribution rates and
requirements for their respective plans.
Administrative Costs - Administrative costs are funded from investment earnings.
Valuation of Investments - Investments are reported at fair value. Investments are composed of
securities valued at current market prices.
(Continued)
-78-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2007
Note 4 - Pension Plans - City of Paducah:
Police and Firefighters’ Pension Fund
Plan Description: PFPF is a single-employer defined benefit plan. On August 1, 1988, the plan was
closed to new entrants and current active duty police and firemen of the City were given a choice of
remaining in this plan or transferring into the CERS. Effective August 1, 1988, the PFPF covered 21
active duty members; all other active duty members elected coverage under CERS. PFPF provides
retirement, disability and death benefits to plan members and their beneficiaries. These benefits are
determined by Kentucky Revised Statutes (KRS) sections 95.851 to 95.884. PFPF does not issue a
separate, stand-alone report. Accordingly, the plan financial statements are included in this audit report.
Contributions: Plan members are required to contribute 8% of their annual covered salary. A member
reserve is established for member contributions, less amounts transferred to reserves for retirement and
disability and amounts refunded to terminated employees.
Components of annual pension cost for PFPF are as follows:
Year Ended Year Ended Year Ended
Component June 30, 2007 June 30, 2006 June 30, 2005
Beginning NPO balance $ (5,425,468) $ - $ -
ARC 46,948 719,348 953,044
Interest on NPO (420,474) - -
Unfunded ARC adjustment 455,664 - -
Pension cost 82,138 719,348 953,044
Less actual contribution 209,221 6,144,816 953,044
Net change in NPO (127,083) (5,425,468) -
ENDING NPO BALANCE $ (5,552,551) $ (5,425,468) $ -
PERCENTAGE OF PENSION
COST CONTRIBUTED 446% 854% 100%
(Continued)
-79-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2007
Note 4 - Pension Plans - City of Paducah:
The financial statements for the Police and Firefighters’ Pension Fund are as follows:
Statement of Fiduciary Net Assets
Police and Firefighters’ Retirement Fund
June 30, 2007
Assets:
Cash and cash equivalents $ 48,913
Receivables 64,133
Investment at fair value 14,357,246
Total assets 14,470,292
Liabilities:
Voucher and accounts payable 276
Net Assets:
Held in trust for pension benefits and
other purposes $ 14,470,016
Statement of Changes in Net Assets
Police and Firefighters’ Retirement Fund
For the Year Ended June 30, 2007
Additions:
Employer contributions $ 209,221
Plan members’ contributions 12,386
Total contributions 221,607
Investment earnings:
Net increase in fair value of investments 1,520,671
Interest and dividends 423,404
Net investment earnings 1,944,075
Total additions 2,165,682
Deductions:
Benefits 1,781,138
Administrative expenses 78,028
Total deductions 1,859,166
Change in net assets 306,516
Net assets, July 1, 2006 14,163,500
NET ASSETS, JUNE 30, 2007 $ 14,470,016
(Continued)
-80-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2007
Note 4 - Pension Plans - City of Paducah:
Appointive Employees’ Pension Fund
Plan Description: AEPF is a single-employer defined benefit plan which covers past appointed
employees of the City. In 1975, the City froze admission of new entrants into the plan. There are no
active participants in the plan at June 30, 2007. AEPF does not issue a separate, stand-alone report.
Accordingly, the plan financial statements are included in this audit report.
Contributions: Since there are only retired employees and beneficiaries receiving benefits, the City
expects little or no additional pension obligation. The City has pledged to maintain benefits and the
financial soundness of the plan by appropriations from the General Fund, as necessary.
Components of annual pension cost for AEPF are as follows:
Year Ended Year Ended Year Ended
Component June 30, 2007 June 30, 2006 June 30, 2005
Beginning NPO balance $(287,297) $(246,269) $(212,055)
ARC 13,883 17,182 26,328
Interest on NPO (17,238) (14,776) (12,723)
Unfunded ARC adjustment 36,825 31,566 27,181
Pension cost 33,470 33,972 40,786
Less actual contribution 25,000 75,000 75,000
Net change in NPO 8,470 (41,028) (34,214)
ENDING NPO BALANCE $(278,827) $(287,297) $(246,269)
PERCENTAGE OF PENSION
COST CONTRIBUTED 75% 221% 184%
The financial statements for the Appointive Employees’ Pension Fund are as follows:
Statement of Fiduciary Net Assets
Appointive Employees’ Pension Fund
June 30, 2007
Assets:
Cash and cash equivalents $ 73,276
Receivables 4,047
Prepaid expenses 255
Investment at fair value 240,000
Total assets 317,578
Liabilities:
Voucher and accounts payable 3
Net Assets:
Held in trust for pension benefits and
other purposes $ 317,575
(Continued)
-81-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2007
Note 4 - Pension Plans - City of Paducah:
Statement of Changes in Net Assets
Appointive Employees’ Pension Fund
For the Year Ended June 30, 2007
Additions:
Interest and dividends $ 15,314
Employer contributions 25,000
Total additions 40,314
Deductions:
Benefits 59,027
Administrative expenses 8,355
Total deductions 67,382
Change in net assets (27,068)
Net assets, July 1, 2006 344,643
NET ASSETS, JUNE 30, 2007 $ 317,575
Contribution Information
A summary of actuarial assumptions at June 30, 2007, the date of the latest actuarial valuation is as
follows:
PFPF AEPF
Valuation date 7/1/07 7/1/07
Actuarial cost method Entry age normal Aggregate (1)
Amortization method Level dollar closed Level dollar closed
Remaining amortization period 25 Years 10 Years
Asset valuation method Market value Market value
Actuarial assumptions:
Investment rate of return 8.00% 6.0%
Projected salary increases 4.00% (2)
Inflation rates adjustments 3.00% (2)
(1) The Aggregate Method does not identify or separately amortize the unfunded actuarial
liabilities.
(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.
(Continued)
-82-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2007
Note 4 - Pension Plans - City of Paducah:
Membership Information
Membership of each plan consisted of the following at June 30, 2007:
PFPF AEPF
Active participants 3 -
Beneficiaries 39 6
Retired participants 49 3
TOTAL PARTICIPANTS 91 9
Cost-Sharing Multiple-Employer Defined Benefit Plan
County Employees’ Retirement System
Plan Description: The City is a participant in the County Employees Retirement System (CERS), a
cost sharing, multi-employer public employee retirement system. CERS provides retirement, disability,
and death benefits to plan members. Retirement benefits may be extended to beneficiaries of plan
members under certain circumstances. Cost-of-living adjustments are provided at the discretion of the
State legislature. Kentucky Retirement Systems issues a publicly available financial report that
includes financial statements and required supplementary information for CERS. That report may be
obtained by writing to Kentucky Retirement Systems, Perimeter Park West, 1260 Louisville Road,
Frankfort, Kentucky 40601-6124 or by calling 1-502-564-4646.
Funding Policy: Hazardous position employees are required to contribute 8% to the plan and
nonhazardous position employees are required to contribute 5% of their creditable compensation by
State statute. The City is required by the same statute to contribute the remaining amounts necessary to
pay benefits when due. For the years ended June 30, 2007, 2006 and 2005, the City contributed
28.21%, 25.01%, and 22.08%, respectively, of each hazardous employee’s creditable compensation and
13.19%, 10.98%, and 8.48%, respectively, of each nonhazardous employee’s creditable compensation.
These actuarially determined rates are set by the Board of Trustees of Kentucky Retirement Systems.
The City’s contributions to CERS for the years ending June 30, 2007, 2006 and 2005, were $3,849,611,
$3,460,797, and $2,963,431, respectively, equal to the required contributions for each year.
Note 5 – Appropriations Deficit:
No departments that adopted budgets annually had excess expenditures over appropriations for the fiscal
year ended June 30, 2007.
Note 6 - Component Unit Long-Term Debt:
Long-term debt of the discretely presented component units consists of the following at June 30, 2007:
Refunding Revenue Bonds of 1991 - Paducah Water Works
The City of Paducah, Kentucky Refunding Bonds, Series of 1991, in the amount of $10,775,000 were
issued for the purpose of defeasing certain bonds of the Revenue Refunding Bonds, Series of 1985. During
the year ended June 30, 1998, Paducah Water Works refunded a portion ($6,075,000) of the 1991 bond
issue by issuing $6,780,000 of 1997 revenue refunding bonds, Series 1997. At June 30, 2004, the total
bonds that are considered extinguished under an in-substance defeasance (refund) are $11,790,000. The
bonds are secured by a first pledge of the revenues of Paducah Water Works. City bond ordinances
require that net revenues, as defined in the ordinances, equal or exceed 130% of the maximum annual debt
service. Payment of bonds and related interest is fully guaranteed by the Municipal Investors Assurance
Corporation.
(Continued)
-83-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2007
Note 6 - Component Unit Long-Term Debt:
The following schedule summarizes the debt service requirements for the Refunding Revenue Bonds,
Series of 1991, maturing July 1, 2009 bearing interest rates of 4.375% to 4.450%:
Total
Debt
Fiscal Year Principal Interest Service
2008 990,000 89,890 1,079,890
2009 1,030,000 45,835 1,075,835
Less deferred debit arising
from advanced refunding (118,420) - (118,420)
TOTALS $1,901,580 $135,725 $2,037,305
Note Payable, Kentucky Infrastructure Authority (KIA) – Paducah Water Works
In connection with a merger with Reidland Water District, Paducah Water Works assumed a loan from the
KIA. Interest rates range from 3.16% to 5.19%, with a .2% annual service fee. The annual requirements
to amortize the outstanding debt as of June 30, 2007, are as follows:
Year Ending
June 30 Principal Interest Fee (0.2%) Total
2008 $ 25,000 $ 7,769 $ 330 $ 33,099
2009 25,000 6,759 280 32,039
2010 25,000 5,673 230 30,903
2011 30,000 4,521 180 34,701
2012 30,000 3,069 120 33,189
2013 30,000 1,557 60 31,617
TOTALS $165,000 $29,348 $1,200 $195,548
Paducah Electric Plant Board 1991 Bond Issue
On November 1, 1998, the System issued $3.35 million in special revenue refunding bonds with interest
rates between 3.75% and 4.20%. The System issued the bonds to advance refund $3.06 million of the
outstanding Series 1991 general obligation bonds with a 6.30% interest rate and were secured by all assets
of the System. The System used the net proceeds along with other resources to purchase the U. S.
Government Securities. These securities were deposited in an irrevocable trust to provide for all future
debt service on the refunded portion of the 1991 Series bonds maturing on or after January 1, 2002. As a
result, that portion of the 1991 Series bonds is considered defeased and the System has removed the
liability from its books.
On November 9, 2001, the System issued $3.32 million in special revenue refunding bonds with interest
rates between 3.00% and 4.25% and is secured by a first pledge of the net revenues of the System. The
System issued the bonds to finance construction of a fiber optic network in the community.
(Continued)
-84-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2007
Note 6 - Component Unit Long-Term Debt:
The following schedule summarizes the remaining debt service requirements for the Paducah Electric
Plant Board 2001 and 1998 Bond Issues:
Total
Debt
Fiscal Year Principal Interest Service
2008 385,000 191,117 576,117
2009 400,000 175,533 575,533
2010 415,000 159,332 574,332
2011 435,000 142,083 577,083
2012 450,000 124,015 574,015
2013-2017 2,550,000 330,980 2,880,980
TOTALS $4,635,000 $1,123,060 $5,758,060
Bonds payable totaling $4,494,368 are recorded net of $140,632 unamortized bond discount and advance
refunding deferred charges.
Note Payable, Bond Anticipation Notes (BANs) – Paducah Electric Plant Board
In August 2006, the System issued $6 million in BANs with an interest rate of 4.31% maturing June 1,
2008. BANs will be used for capital construction and are secured by the System’s assets. The System
anticipated these interest-only BANs will be refinanced with the issuance of larger revenue bonds to
complete the capital construction.
The following schedule summarizes the remaining debt service requirements for the Paducah Electric
Plant Board’s note payable:
Total
Debt
Fiscal Year Principal Interest Service
2008 $ - 129,300 129,300
2009 6,000,000 129,300 6,129,300
TOTALS $ 6,000000 $ 258,600 $6,258,600
(Continued)
-85-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2007
Note 6 - Component Unit Long-Term Debt:
Notes Payable, Kentucky Association of Counties (KACO) – Paducah Transit Authority
On February 13, 2004 and October 24, 2006, the Transit Authority of the City of Paducah entered into
agreements with the KACO in connection with grant match projects. Interest rates on these agreements are
4.25%. As of June 30, 2007, the outstanding balance was $236,347 and $133,206, respectively.
The following schedule summarizes the remaining debt service requirements for the Transit Authority of
the City of Paducah notes payable:
Total
Debt
Fiscal Year Principal Interest Service
2008 $ 30,171 13,938 44,109
2009 73,877 12,272 86,149
2010 79,912 8,791 88,703
2011 84,185 5,318 89,503
2012 37,078 3,596 40,674
2013-2017 64,330 2,417 66,747
TOTALS $ 369,553 $ 46,332 $ 415,885
Note 7 - Commitments and Contingencies:
Grant Contingencies
Amounts received from grantor agencies are subject to audit and adjustment by grantor agencies,
principally the federal government. Any disallowed claims, including amounts already collected, may
constitute a liability of the applicable funds. The amount, if any, of expenditures which may be disallowed
by the grantor cannot be determined at this time although the government expects such amounts, if any, to
be immaterial.
Construction Commitments
The City has various on-going contracts for construction, renovations, paving materials, equipment, and
labor. As of June 30, 2007, the construction commitments were as follows:
Cumulative
Costs Incurred
Estimated Costs
Stormwater Phase II $ 55,566 $ 66,500
Floodwall Pipe Rehabilitation - 163,800
Oliver Church Road Improvement Project 171,515 218,500
Riverfront – Ohio River Boat Launch Project 151,095 210,275
$ 378,176 $ 659,075
(Continued)
-86-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2007
Note 8 - Risk Management and Litigation:
The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets;
errors and omissions; injuries to employees; and natural disasters. The City obtains coverage from
commercial insurance companies to handle the risk of loss. There have been no decreases in insurance
coverage from the prior year. There have been no settlements in excess of insurance coverage during the
prior three years.
An analysis of claims activity is presented below:
Current Year
Beginning of Claims and Actual Balance at
Fiscal Year Changes in Claim Fiscal
Liability Estimates Payments Year End
1998 - 1999 $ - $ 26,457 $ 26,457 $ -
1999 - 2000 - 26,455 26,455 -
2000 - 2001 - 102,380 102,380 -
2001 - 2002 - 2,879 2,879 -
2002 - 2003 - 3,277 3,277 -
2003 - 2004 - 133,383 133,383 -
2004 - 2005 - 1,004 1,004 -
2005 - 2006 - 23,829 23,829 -
2006 - 2007 - 57,168 57,168 -
During fiscal year 1999, the City established the Health Insurance Fund (an internal service fund) to
account for and finance employee medical costs relating to the City’s employee self-insured medical
benefit plan that went into effect as of July 1, 1999. The health insurance provides coverage for up to
$150,000 for each covered individual. The City purchases commercial insurance (reinsurance) for claims
in excess of the coverage provided per individual or in excess of the maximum aggregate limit of
$2,000,000. 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 $386,326 at June 30, 2007.
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
2001 - 2002 $ 285,000 $2,601,988 $2,601,988 $285,000
2002 - 2003 285,000 3,257,340 3,210,340 332,000
2003 - 2004 332,000 2,217,067 2,199,067 350,000
2004 - 2005 350,000 2,994,673 2,931,673 413,000
2005 - 2006 413,000 2,853,645 2,812,645 454,000
2006 - 2007 454,000 2,601,505 2,669,179 386,326
During the fiscal year ending June 30, 2006, several current and former firefighters of the City of Paducah
filed a lawsuit for unpaid compensation benefits and related pension obligations. The range of possible
financial exposure for the City is zero to six million dollars. The City intends to vigorously defend the
case.
In addition, several lawsuits are pending involving citizens’ complaints and the City of Paducah. Various
allegations have been made seeking damages which the legal counsel of the City, along with its
management, has determined to be immaterial to the City’s financial position.
(Continued)
-87-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2007
Note 9 - Lease Agreements:
The City is leasing land and building to the Luther F. Carson Four Rivers Center for the Performing Arts
(Center) for a primary term of 99 years. No rental revenue is being collected from this lease. The rental
for the primary term of the lease is the construction of the performing arts center. The building is the
property of the City, however, for financial reporting; the building is reported with the Luther F. Carson
Four Rivers Center financial records. In December, 2003, with the authorization of the City, the Center
secured financing of $6.5 million subject to a mortgage against the leasehold and real property on which
the performing arts center is located. The City also consented to an assignment of the lease as security for
the loan.
The City is leasing land and a building to Infiniti Media, Incorporated for use by Infiniti Plastic
Technologies, Incorporated for a primary term of 20 years. No rental revenue is collected for the first
three years of the lease term. Rental payments will commence on September 1, 2007, at a monthly
payment of $33,816 and end with the final payment due May 1, 2024. Infiniti Media may purchase the
property during the term of lease by paying off the related indebtedness. In addition, at the end of the lease
term, Infiniti Media may purchase the property for $1. Infiniti Media has the option to cancel this lease at
any time after the sixth year of the lease term by providing written notice 18 months prior to the date of
termination.
The City also leases certain other property to various lessees under non-cancelable agreements that have
various expiration dates through June 30, 2011. Rental revenue received from leased property during 2007
totaled $421,954.
The following is an analysis of property leased under these leases at June 30, 2007:
Land $ 606,350
Buildings 3,422,262
Equipment 110,126
Total 4,138,738
Less: accumulated depreciation 882,882
NET BOOK VALUE $ 3,255,855
Depreciation expense for the year ended June 30, 2007, on leased property was $71,755.
The following is a schedule of future minimum rental income from operating leases at June 30, 2007:
Lease
Income
2008 $ 776,106
2009 843,739
2010 843,739
2011 336,151
TOTAL MINIMUM LEASE RECEIPTS $ 2,799,735
(Continued)
-88-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2007
Note 10 – Subsequent Event
Subsequent to the fiscal year ended June 30, 2007, the City donated real property valued at $377,393 to the
Paducah Junior College for the development of a community arts school.
-89-
CITY OF PADUCAH, KENTUCKY
REQUIRED SUPPLEMENTARY INFORMATION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2007
Exhibit A-1
CITY OF PADUCAH, KENTUCKY
REQUIRED SUPPLEMENTARY INFORMATION
PENSION TRUST FUNDS SCHEDULES
Schedules of Funding Progress
Actuarial Actuarial Unfunded Annual UAAL as a
Actuarial Value of Accrued AAL Funded Covered Percentage of
Valuation Assets Liability (AAL) (UAAL) Ratio Payroll Covered Payroll
Date (a) (b) (b-a) (a/b) (c) ((b-a)/c)
Police and Firefighters’ Pension Fund (PFPF) (Using Entry Age Normal Method)
7/1/2001 11,346,128 15,724,236 4,378,108 72.2 356,406 1228.40
7/1/2002 10,382,216 15,550,968 5,168,752 66.8 356,304 1450.66
7/1/2003 9,460,720 15,334,484 5,873,764 61.7 320,782 1831.08
7/1/2004 9,352,299 15,204,717 5,852,418 61.5 287,923 2032.63
7/1/2005 9,150,861 15,310,380 6,159,519 59.8 198,307 3,106.05
7/1/2006 14,163,498 14,527,020 363,522 97.5 165,414 219.76
7/1/2007 14,470,016 14,463,785 (6,231) 100.0 100,986 (6.17)
Appointive Employees’ Pension Fund (AEPF) (Using Aggregate Actuarial Method)
The Aggregate Cost Method is used for the AEPF; therefore, a schedule of funding progress is not required.
Schedules of Employer Contributions
PFPF
Year
Ended
June 30
Annual
Required
Contribution (ARC)
Percent
ARC
Contributed
Ending
Net Pension
Obligation (NPO)
2001 865,026 100 -
2002 806,632 100 -
2003 645,773 100 -
2004 811,401 100 -
2005 953,044 100 -
2006 719,348 854 (5,425,468)
2007 46,948 446 (5,552,551)
AEPF
Year
Ended
June 30
Annual
Required
Contribution (ARC)
Percent
ARC
Contributed
Ending
Net Pension
Obligation (NPO)
2001 62,029 121 (182,940)
2002 59,297 126 (186,170)
2003 50,112 150 (198,365)
2004 48,339 156 (212,055)
2005 26,328 285 (246,269)
2006 17,182 437 (287,297)
2007 13,883 180 (278,827)
-90-
CITY OF PADUCAH, KENTUCKY
SUPPLEMENTARY INFORMATION
NONMAJOR GOVERNMENTAL FUNDS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2007
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.
Federal, State, and Local Grants - to account for the grant programs awarded to the City of
Paducah from agencies of the Federal Government and the Commonwealth of Kentucky.
Debt Service Fund
To account for the payment of bond principal and interest, note principal and interest, and capital
lease payments.
Exhibit B-1
Court Small HOPE 3
Awards Grant Grant
Fund Fund Fund
Cash and cash equivalents 200,322$ 337,726$ 235,661$ 189,502$ -$
Receivables, net:
Accounts - 105,663 - - -
Grants - - - - -
TOTAL ASSETS 200,322$ 443,389$ 235,661$ 189,502$ -$
Liabilities:
Voucher and accounts payable 197,034$ 15,791$ 156,846$ 3,148$ -$
Accrued payroll and payroll taxes - 24,709 - - -
Deferred revenues - - - 176,760 -
Due to other funds - 26,767 - - -
Total liabilities 197,034 67,267 156,846 179,908 -
Fund Balances:
Reserved for:
Program purposes - - - 9,594 -
Unreserved 3,288 376,122 78,815 - -
Total fund balances 3,288 376,122 78,815 9,594 -
TOTAL LIABILITIES AND
FUND BALANCES 200,322$ 443,389$ 235,661$ 189,502$ -$
See auditors report on pages 11-12.
LIABILITIES
AND
ASSETS Municipal Communication
CITY OF PADUCAH, KENTUCKY
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2007
-91-
Special Revenue Funds
FUND BALANCES
Aid Program Service Fund
Emergency
Debt
Service
Home HUD Section Debt
Grant Revolving Eight Service
Fund Grant Fund Housing Fund
43,964$ 271,635$ 901$ 859,460$ 31,836$ 2,171,007$
- - - - - 105,663
- - 7,589 - - 7,589
43,964$ 271,635$ 8,490$ 859,460$ 31,836$ 2,284,259$
-$ 704$ -$ 61,719$ -$ 435,242$
- - - 18,185 - 42,894
- - - - - 176,760
- - 8,490 50,559 - 85,816
- 704 8,490 130,463 - 740,712
- 270,931 - 728,997 - 1,009,522
43,964 - - - 31,836 534,025
43,964 270,931 - 728,997 31,836 1,543,547
43,964$ 271,635$ 8,490$ 859,460$ 31,836$ 2,284,259$
Grant Fund
GovernmentalPolice
Special Revenue Funds
-92-
Total Nonmajor
Funds
PHA
Exhibit B-2
Court Small HOPE 3
Awards Grant Grant
Revenues: Fund Fund Fund
Taxes -$ 522,665$ -$ -$ -$
Charges for services - 222,729 - - -
Intergovernmental 583,493 - - - -
Grants - - - 4,344 -
Interest 14,051 13,236 9,778 - -
Miscellaneous 177,033 240,577 26,038 30,980 -
Total revenues 774,577 999,207 35,816 35,324 -
Expenditures:
Current operations:
Public safety - 1,260,856 33,575 - -
Public service 1,007,410 - - - -
Planning and development - - - 27,684 -
Debt Service:
Principal requirement - - - - -
Interest and fiscal requirement - - - - -
Total expenditures 1,007,410 1,260,856 33,575 27,684 -
Excess (deficiency) of revenues
over expenditures (232,833) (261,649) 2,241 7,640 -
Other Financing Sources (Uses):
Transfers in - 276,867 - - -
Transfers out (51,405) (33,013) - (1,649) (127,397)
Total other financing sources (uses) (51,405) 243,854 - (1,649) (127,397)
Net change in fund balances (284,238) (17,795) 2,241 5,991 (127,397)
Fund balances, July 1, 2006 287,526 393,917 76,574 3,603 127,397
FUND BALANCES, JUNE 30, 2007 3,288$ 376,122$ 78,815$ 9,594$ -$
See auditors report on pages 11-12.
Emergency
-93-
Special Revenue Funds
Municipal
Aid Program
Communication
Service Fund
CITY OF PADUCAH, KENTUCKY
FOR THE YEAR ENDED JUNE 30, 2007
NONMAJOR GOVERNMENTAL FUNDS
AND CHANGES IN FUND BALANCES
COMBINING STATEMENT OF REVENUES, EXPENDITURES
Debt
Service
Home HUD Section Debt
Grant Revolving Eight Service
Fund Grant Fund Housing Fund
-$ -$ -$ -$ -$ 522,665$
- - - - - 222,729
- - - - 809,535 1,393,028
- - 34,945 2,014,894 - 2,054,183
- 10,323 - 726 - 48,114
- 52,677 - - - 527,305
- 63,000 34,945 2,015,620 809,535 4,768,024
- - 34,945 - - 1,329,376
- - - - - 1,007,410
6,036 141,781 - 1,716,507 - 1,892,008
- - - - 782,870 782,870
- - - - 1,108,385 1,108,385
6,036 141,781 34,945 1,716,507 1,891,255 6,120,049
(6,036) (78,781) - 299,113 (1,081,720) (1,352,025)
50,000 150,000 - - 1,081,192 1,558,059
- (23,000) - - - (236,464)
50,000 127,000 - - 1,081,192 1,321,595
43,964 48,219 - 299,113 (528) (30,430)
- 222,712 - 429,884 32,364 1,573,977
43,964$ 270,931$ -$ 728,997$ 31,836$ 1,543,547$
Total Nonmajor
Governmental
-94-
Funds
PHA
Police
Grant Fund
Special Revenue Funds
Exhibit B-3
Variance with
Final Budget
Final Positive
Revenues: Budget Actual (Negative)
Intergovernmental 583,495$ 583,493$ (2)$
Interest 14,050 14,051 1
Other 177,035 177,033 (2)
Total revenues 774,580 774,577 (3)
Expenditures:
Public service 1,007,410 1,007,410 -
Excess (deficiency) of revenues over
expenditures (232,830) (232,833) (3)
Other Financing Sources (Uses):
Operating transfers out (51,405) (51,405) -
Net change in fund balance (284,235)$ (284,238)$ (3)$
Fund balance, July 1, 2006 287,526
FUND BALANCE, JUNE 30, 2007 3,288$
See auditors report on pages 11-12.
-95-
FOR THE YEAR ENDED JUNE 30, 2007
CITY OF PADUCAH, KENTUCKY
MUNICIPAL AID PROGRAM FUND
DETAIL SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
Exhibit B-4
Variance with
Final Budget
Final Positive
Revenues: Budget Actual (Negative)
Local contributions 522,665$ 522,665$ -$
Telephone surcharges 222,730 222,729 (1)
Interest 13,235 13,236 1
Miscellaneous 240,575 240,577 2
Total revenues 999,205 999,207 2
Expenditures:
Public safety 1,260,860 1,260,856 4
Excess (deficiency) of revenues over
expenditures (261,655) (261,649) 6
Other Financing Sources (Uses):
Operating transfers in 276,865 276,867 2
Operating transfers out (33,015) (33,013) 2
Net change in fund balance (17,805)$ (17,795) 10$
Fund balance, July 1, 2006 393,917
FUND BALANCE, JUNE 30, 2007 376,122$
See auditors report on pages 11-12.
-96-
FOR THE YEAR ENDED JUNE 30, 2007
CITY OF PADUCAH, KENTUCKY
EMERGENCY COMMUNICATION SERVICE FUND
DETAIL SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
Exhibit B-5
Variance with
Final Budget
Final Positive
Revenues: Budget Actual (Negative)
Court awarded forfeitures 26,040$ 26,038$ (2)$
Interest 9,775 9,778 3
Total revenues 35,815 35,816 1
Expenditures:
Public safety 33,575 33,575 -
Excess (deficiency) of revenues over
expenditures 2,240$ 2,241 1$
Fund balance, July 1, 2006 76,574
FUND BALANCE, JUNE 30, 2007 78,815$
See auditors report on pages 11-12.
-97-
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, 2007
Exhibit B-6
Variance with
Final Budget
Final Positive
Revenues: Budget Actual (Negative)
Grants 4,340$ 4,344$ 4$
Other 30,980 30,980 -
Total revenues 35,320 35,324 4
Expenditures:
Planning and development 27,680 27,684 (4)
Excess (deficiency) of revenues over
expenditures 7,640 7,640 -
Other Financing Sources (Uses):
Operating transfers out (1,650) (1,649) 1
Total other financing sources (uses) (1,650) (1,649) 1
Net change in fund balance 5,990$ 5,991 1$
Fund balance, July 1, 2006 3,603
FUND BALANCE, JUNE 30, 2007 9,594$
See auditors report on pages 11-12.
-98-
FOR THE YEAR ENDED JUNE 30, 2007
CITY OF PADUCAH, KENTUCKY
SMALL GRANT FUND
DETAIL SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
Exhibit B-7
Variance with
Final Budget
Final Positive
Revenues: Budget Actual (Negative)
Other -$ -$ -$
Expenditures:
Planning and development - - -
Excess (deficiency) of revenues over
expenditures - - -
Other Financing Sources (Uses):
Operating transfers out (127,400) (127,397) 3
Net change in fund balance (127,400)$ (127,397) 3$
Fund balance, July 1, 2006 127,397
FUND BALANCE, JUNE 30, 2007 -$
See auditors report on pages 11-12.
-99-
FOR THE YEAR ENDED JUNE 30, 2007
CITY OF PADUCAH, KENTUCKY
HOPE 3 IMPLEMENTATION GRANT FUND
DETAIL SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
Exhibit B-8
Variance with
Final Budget
Final Positive
Revenues: Budget Actual (Negative)
Grants -$ -$ -$
Total revenues - - -
Expenditures:
Planning and development 6,040 6,036 4
Excess (deficiency) of revenues over
expenditures (6,040) (6,036) 4
Other Financing Sources (Uses):
Operating transfers in 50,000 50,000 -
Total other financing sources (uses) 50,000 50,000 -
Net change in fund balance 43,960$ 43,964 4$
Fund balance, July 1, 2006 -
FUND BALANCE, JUNE 30, 2007 43,964$
See auditors report on pages 11-12.
-100-
FOR THE YEAR ENDED JUNE 30, 2007
CITY OF PADUCAH, KENTUCKY
HOME GRANT FUND
DETAIL SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
Exhibit B-9
Variance with
Final Budget
Final Positive
Revenues: Budget Actual (Negative)
Interest 10,320$ 10,323$ 3$
Other 52,675 52,677 2
Total revenues 62,995 63,000 5
Expenditures:
Planning and development 141,785 141,781 4
Excess (deficiency) of revenues over
expenditures (78,790) (78,781) 9
Other Financing Sources (Uses):
Operating transfers in 150,000 150,000 -
Operating transfers out (23,000) (23,000) -
Total other financing sources (uses) 127,000 127,000 -
Net change in fund balance 48,210$ 48,219 9$
Fund balance, July 1, 2006 222,712
FUND BALANCE, JUNE 30, 2007 270,931$
See auditors report on pages 11-12.
-101-
FOR THE YEAR ENDED JUNE 30, 2007
CITY OF PADUCAH, KENTUCKY
HUD REVOLVING GRANT FUND
DETAIL SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
Exhibit B-10
Variance with
Final Budget
Final Positive
Revenues: Budget Actual (Negative)
Grants 34,945$ 34,945$ -$
Expenditures:
Public safety 34,945 34,945 -
Excess (deficiency) of revenues over
expenditures -$ - -$
Fund balance, July 1, 2006 -
FUND BALANCE, JUNE 30, 2007 -$
See auditors report on pages 11-12.
-102-
FOR THE YEAR ENDED JUNE 30, 2007
CITY OF PADUCAH, KENTUCKY
PADUCAH HOUSING AUTHORITY POLICE GRANT FUND
DETAIL SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
Exhibit B-11
Variance with
Final Budget
Final Positive
Revenues: Budget Actual (Negative)
Intergovernmental 809,530$ 809,535$ 5$
Expenditures:
Debt service:
Principal requirement 782,870 782,870 -
Interest and fiscal requirement 1,108,385 1,108,385 -
Total expenditures 1,891,255 1,891,255 -
Excess (deficiency) of revenues over
expenditures (1,081,725) (1,081,720) 5
Other Financing Sources (Uses):
Operating transfers in 1,081,195 1,081,192 (3)
Net change in fund balance (530)$ (528) 2$
Fund balance, July 1, 2006 32,364
FUND BALANCE, JUNE 30, 2007 31,836$
See auditors report on pages 11-12.
-103-
FOR THE YEAR ENDED JUNE 30, 2007
CITY OF PADUCAH, KENTUCKY
DEBT SERVICE FUND
DETAIL SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
CITY OF PADUCAH, KENTUCKY
SUPPLEMENTARY INFORMATION
NONMAJOR PROPRIETARY FUNDS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2007
COMBINING FINANCIAL STATEMENTS
NONMAJOR PROPRIETARY FUNDS
Civic Center Fund – to account for the operation of the Civic Center.
TISA Fund – to account for revenues and expenses associated with the operation of the Paducah-
McCracken County telecommunications and information systems.
Exhibit C-1
Civic
Center TISA
Current Assets: Fund Fund
Cash and cash equivalents 621$ 90,549$ 91,170$
Receivables, net 588 71,658 72,246
Prepaid expense - 15,095 15,095
Total current assets 1,209 177,302 178,511
Noncurrent Assets:
Net depreciable capital assets 222,764 39,052 261,816
Total assets 223,973 216,354 440,327
Current Liabilities:
Voucher and accounts payable 209 12,811 13,020
Due to other funds - - -
Total liabilities 209 12,811 13,020
Invested in capital assets 222,764 39,052 261,816
Unrestricted 1,000 164,491 165,491
TOTAL NET ASSETS 223,764$ 203,543$ 427,307$
See auditors report on pages 11-12.
ASSETS
LIABILITIES
NET ASSETS
-104-
Total Nonmajor
Enterprise
Funds
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF NET ASSETS
NONMAJOR PROPRIETARY FUNDS
JUNE 30, 2007
Exhibit C-2
Civic
Center TISA
Operating Revenues: Fund Fund
Charges for services 31,372$ 129,435$ 160,807$
Miscellaneous - 64,278 64,278
Total operating income 31,372 193,713 225,085
Operating Expenses:
Cost of sales and service 41,759 215,387 257,146
Depreciation and amortization 12,801 51,808 64,609
Total operating expenses 54,560 267,195 321,755
Operating income (loss) (23,188) (73,482) (96,670)
Non-Operating Revenues (Expenses):
Interest and investment income - - -
Income (loss) before contributions and
transfers (23,188) (73,482) (96,670)
Contributions and Operating Transfers:
Capital contributions - 23,969 23,969
Transfers in 15,000 43,175 58,175
Transfers out - - -
Total contributions and operating transfers 15,000 67,144 82,144
Change in net assets (8,188) (6,338) (14,526)
Net assets, July 1, 2006 231,952 209,881 441,833
NET ASSETS, JUNE 30, 2007 223,764$ 203,543$ 427,307$
See auditors report on pages 11-12.
-105-
FOR THE YEAR ENDED JUNE 30, 2007
NONMAJOR PROPRIETARY FUNDS
AND CHANGES IN FUND NET ASSETS
Funds
COMBINING STATEMENT OF REVENUES, EXPENSES
CITY OF PADUCAH, KENTUCKY
Total Nonmajor
Enterprise
Exhibit C-3
Civic
Center TISA
Cash Flows from Operating Activities: Fund Fund
Cash received from customers 30,784$ 126,446$ 157,230$
Payments to internal service funds (2,380) (2,448) (4,828)
Other receipts (payments) (42,783) (208,184) (250,967)
Net cash provided (used) by operating activities (14,379) (84,186) (98,565)
Cash Flows from Noncapital
Financing Activities:
Transfers (to) from other funds 15,000 43,175 58,175
Cash Flows from Capital and Related
Financing Activities:
Capital contributions - 23,969 23,969
Acquisition and construction
of capital assets - (17,690) (17,690)
Net cash used by capital and
related financing activities - 6,279 6,279
Net increase (decrease) in cash and cash
equivalents 621 (34,732) (34,111)
Cash and cash equivalents, July 1, 2006 - 125,281 125,281
CASH AND CASH EQUIVALENTS,
JUNE 30, 2007 621$ 90,549$ 91,170$
Reconciliation of Operating Income (Loss) to
Net Cash Provided by Operating Activities:
Operating income (loss) (23,188)$ (73,482)$ (96,670)$
Adjustments to reconcile operating income (loss)
to net cash provided by operating activities:
Depreciation and amortization 12,801 51,808 64,609
Change in assets and liabilities:
Receivables (588) (67,267) (67,855)
Prepaid expense - (1,665) (1,665)
Accounts payable and accrued expenses (3,404) 6,420 3,016
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES (14,379)$ (84,186)$ (98,565)$
See auditors report on pages 11-12.
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF CASH FLOWS
NONMAJOR PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2007
-106-
Total Nonmajor
Enterprise
Funds
CITY OF PADUCAH, KENTUCKY
SUPPLEMENTARY INFORMATION
INTERNAL SERVICE FUNDS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2007
INTERNAL SERVICE FUNDS
Fleet Maintenance – to account for costs of operating a maintenance facility for automotive
equipment used by other City departments.
Fleet Lease Trust – to account for the financing of vehicle acquisitions provided by one
department or agency to other departments or agencies of the government and to other
governmental units, on a cost reimbursement basis.
Insurance Fund – to account for the costs of obtaining insurance for other City departments.
Health Insurance Fund – to account for the costs associated with the City’s health insurance
activities. The intent of the City of Paducah is that the cost of providing insurance coverage on a
continuing basis be financed primarily through user charges.
Exhibit D-1
Health
Fleet Lease Insurance Insurance Combined
Current Assets: Trust Fund Fund Total
Cash and cash equivalents 15,013$ 466,072$ 14,905$ 670,928$ 1,166,918$
Investments - 2,322,767 - - 2,322,767
Receivables, net - 55,781 - 36,872 92,653
Prepaid expense - - 1,032,868 14,250 1,047,118
Inventories 86,585 - - - 86,585
Total current assets 101,598 2,844,620 1,047,773 722,050 4,716,041
Noncurrent Assets:
Net depreciable capital assets 22,377 1,786,014 - - 1,808,391
Total assets 123,975 4,630,634 1,047,773 722,050 6,524,432
Current Liabilities:
Voucher and accounts payable 7,793 - 20,309 403,411 431,513
Accrued payroll and payroll taxes 8,186 - - - 8,186
Accrued compensated absences 12,713 - - - 12,713
Deferred revenue - - - 22,335 22,335
Due to other funds - - 986,000 - 986,000
Total current liabilities 28,692 - 1,006,309 425,746 1,460,747
Invested in capital assets, net
of related debt 22,377 1,786,014 - - 1,808,391
Unrestricted 72,906 2,844,620 41,464 296,304 3,255,294
TOTAL NET ASSETS 95,283$ 4,630,634$ 41,464$ 296,304$ 5,063,685$
See auditors report on pages 11-12.
-107-
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF NET ASSETS
INTERNAL SERVICE FUNDS
JUNE 30, 2007
LIABILITIES
ASSETS
NET ASSETS
Fleet
Maintenance
Exhibit D-2
Health
Fleet Lease Insurance Insurance Combined
Trust Fund Fund Total
Operating Revenues:
Charges for services - internal 535,902$ 716,599$ 1,294,534$ 3,064,680$ 5,611,715$
Charges for services - external - - - 426,632 426,632
Total operating revenues 535,902 716,599 1,294,534 3,491,312 6,038,347
Operating Expenses:
Vehicle maintenance 482,957 135 - - 483,092
Administrative - 5,600 - 62,700 68,300
Insurance - - 1,304,131 3,338,143 4,642,274
Leave expense (13,223) - - - (13,223)
Depreciation 5,497 491,907 - - 497,404
Total operating expenses 475,231 497,642 1,304,131 3,400,843 5,677,847
Operating income (loss) 60,671 218,957 (9,597) 90,469 360,500
Nonoperating Revenues and (Expenses):
Interest and investment income - 97,219 - - 97,219
Gain (loss) on disposal of property
and equipment - 48,656 - - 48,656
Total nonoperating revenues
(expenses) - 145,875 - - 145,875
Income (loss) before transfers 60,671 364,832 (9,597) 90,469 506,375
Contributions and Transfers:
Transfers in - - 19,570 - 19,570
Change in net assets 60,671 364,832 9,973 90,469 525,945
Net assets, July 1, 2006 34,612 4,265,802 31,491 205,835 4,537,740
NET ASSETS, JUNE 30, 2007 95,283$ 4,630,634$ 41,464$ 296,304$ 5,063,685$
See auditors report on pages 11-12.
-108-
Fleet
Maintenance
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF REVENUES, EXPENSES,
AND CHANGES IN FUND NET ASSETS
INTERNAL SERVICE FUNDS
FOR THE YEAR ENDED JUNE 30, 2007
Exhibit D-3
Health
Fleet Lease Insurance Insurance Combined
Cash Flows from Operating Activities: Trust Fund Fund Total
Receipts from other funds for services 535,902$ 716,599$ 1,294,534$ 3,661,052$ 6,208,087$
Payments to suppliers (224,921) - - - (224,921)
Payments to employees (296,268) - - - (296,268)
Claims paid - - - (3,408,898) (3,408,898)
Other receipts (payments) - (5,735) (1,299,199) (62,700) (1,367,634)
Net cash provided (used) by operating activities 14,713 710,864 (4,665) 189,454 910,366
Cash Flows from Noncapital Financing
Activities:
Transfers from other funds - - 19,570 - 19,570
Cash Flows from Capital and Related
Financing Activities:
Proceeds from sale of capital assets - 49,666 - - 49,666
Purchase of capital assets - (671,190) - - (671,190)
Net cash used by capital and related financing - (621,524) - - (621,524)
Cash Flows from Investing Activities:
Proceeds from sales and maturities
of investments - 1,474,806 - - 1,474,806
Interest and dividends - 70,756 - - 70,756
Purchase of investments - (2,322,767) - - (2,322,767)
Net cash used by investing activities - (777,205) - - (777,205)
Net increase (decrease) in cash
and cash equivalents 14,713 (687,865) 14,905 189,454 (468,793)
Cash and cash equivalents, July 1, 2006 300 1,153,937 - 481,474 1,635,711
CASH AND CASH EQUIVALENTS,
JUNE 30, 2007 15,013$ 466,072$ 14,905$ 670,928$ 1,166,918$
Reconciliation of Operating Income (Loss) to
Net Cash Provided by Operating Activities:
Operating income (loss) 60,671$ 218,957$ (9,597)$ 90,469$ 360,500$
Adjustments to reconcile operating
income (loss) to net cash provided
(used) by operating activities:
Depreciation and amortization 5,497 491,907 - - 497,404
Change in assets and liabilities:
Receivables - - - 180,399 180,399
Prepaid expense - - 150,314 (14,250) 136,064
Inventories (20,653) - - - (20,653)
Accounts payable and accrued expenses (30,802) - (145,382) (67,164) (243,348)
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES 14,713$ 710,864$ (4,665)$ 189,454$ 910,366$
See auditors report on pages 11-12.
-109-
Fleet
Maintenance
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF CASH FLOWS
INTERNAL SERVICE FUNDS
FOR THE YEAR ENDED JUNE 30, 2007
CITY OF PADUCAH, KENTUCKY
SUPPLEMENTARY INFORMATION
FIDUCIARY FUNDS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2007
FIDUCIARY FUNDS
Pension Trust Funds
Police and Firefighters’ Retirement Fund and Appointive Employees’ Pension Fund – to account
for the accumulation of resources to be used for retirement payments at appropriate amounts and
times in the future. Resources are contributed by employees and by the City at amounts
determined by Kentucky Statutes and/or City Commission decisions.
Exhibit E-1
Total
Cash and cash equivalents 48,913$ 73,276$ 122,189$
Receivables:
Interest 64,133 4,047 68,180
Prepaid expenses - 255 255
Investments at fair value
Certificates of deposits - 240,000 240,000
Common stock 5,723,490 - 5,723,490
Corporate bonds 1,029,907 - 1,029,907
U.S. agencies bonds 808,379 - 808,379
Mortgage backed securities 3,761,272 - 3,761,272
Mutual funds 3,034,198 - 3,034,198
Total assets 14,470,292 317,578 14,787,870
Voucher and accounts payable 276 3 279
Held in trust for pension benefits and
other purposes 14,470,016$317,575$ 14,787,591$
See auditors report on pages 11-12.
ASSETS
LIABILITIES
NET ASSETS
-110-
Employees'
Retirement Fund Pension Fund
Firefighters'
AppointivePolice and
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF FIDUCIARY NET ASSETS
FIDUCIARY FUNDS - PENSION TRUST FUNDS
JUNE 30, 2007
Exhibit E-2
Additions:Totals
Contributions:
Employer 209,221$ 25,000$ 234,221$
Plan members 12,386 - 12,386
Total contributions 221,607 25,000 246,607
Investment earnings:
Net increase in fair value of investments 1,520,671 - 1,520,671
Interest and dividends 423,404 15,314 438,718
Net investment earnings 1,944,075 15,314 1,959,389
Total additions 2,165,682 40,314 2,205,996
Deductions:
Benefits 1,781,138 59,027 1,840,165
Administrative expenses 78,028 8,355 86,383
Total deductions 1,859,166 67,382 1,926,548
Change in net assets 306,516 (27,068) 279,448
Net assets, July 1, 2006 14,163,500 344,643 14,508,143
NET ASSETS, JUNE 30, 2007 14,470,016$ 317,575$ 14,787,591$
See auditors report on pages 11-12.
CITY OF PADUCAH, KENTUCKY
Police and Appointive
Retirement Fund Pension Fund
Employees'Firefighters'
-111-
FIDUCIARY FUNDS - PENSION TRUST FUNDS
FOR THE YEAR ENDED JUNE 30, 2007
COMBINING STATEMENT OF CHANGES IN NET ASSETS
FIDUCIARY FUNDS
Private-purpose Trust Funds
Other Trusts and Maintenance and Rehab Trust – to account for assets held by the City in the
capacity of trustee for specified purposes.
Exhibit E-3
Other
Trusts Total
Cash and cash equivalents -$ 4,582$ 4,582$
Investments at fair value
Money market funds 5,594 - 5,594
Mutual funds 140,373 - 140,373
Total assets 145,967 4,582 150,549
Due to other funds 100 - 100
Held in trust for other purposes 145,867$ 4,582$ 150,449$
See auditors report on pages 11-12.
Maintenance
and Rehab
Trust
-112-
ASSETS
LIABILITIES
NET ASSETS
JUNE 30, 2007
FIDUCIARY FUNDS - PRIVATE-PURPOSE TRUST FUNDS
COMBINING STATEMENT OF NET ASSETS
CITY OF PADUCAH, KENTUCKY
Exhibit E-4
Other
Additions: Trusts Totals
Contributions:
Intergovernmental revenues 2,615$ 8,000$ 10,615$
Private donations - - -
Total contributions 2,615 8,000 10,615
Investment earnings:
Net increase in fair value of investments 7,937 - 7,937
Interest and dividends 3,074 - 3,074
Net investment earnings 11,011 - 11,011
Interfund transfers 50,000 - 50,000
Total additions 63,626 8,000 71,626
Deductions:
Capital outlay 2,152 5,334 7,486
Administrative expenses 1,367 3,822 5,189
Total deductions 3,519 9,156 12,675
Change in net assets 60,107 (1,156) 58,951
Net assets, July 1, 2006 85,760 5,738 91,498
NET ASSETS, JUNE 30, 2007 145,867$ 4,582$ 150,449$
See auditors report on pages 11-12.
COMBINING STATEMENT OF CHANGES IN NET ASSETS
CITY OF PADUCAH, KENTUCKY
-113-
FOR THE YEAR ENDED JUNE 30, 2007
FIDUCIARY FUNDS - PRIVATE-PURPOSE TRUST FUNDS
Maintenance
and Rehab
Trust
FIDUCIARY FUNDS
Agency Fund
Payroll Agency Fund – to account for disbursements relative to the City payroll. The various
City departments transfer amounts to this fund to cover routine payroll and the related benefits
and taxes. All payroll disbursements are made from this fund.
Exhibit E-5
Payroll Fund: Additions Deductions
Assets:
Cash and cash equivalents 606,178$ 12,541,425$ 12,434,769$ 712,834$
Liabilities:
Payroll taxes and withholdings
payable 606,178$ 12,541,425$ 12,434,769$ 712,834$
See auditors report on pages 11-12.
CITY OF PADUCAH, KENTUCKY
AGENCY FUND
IN ASSETS AND LIABILITIES
STATEMENT OF CHANGES
-114-
FOR THE YEAR ENDED JUNE 30, 2007
Balance Balance
July 1, 2006 June 30, 2007
CITY OF PADUCAH, KENTUCKY
STATISTICAL SECTION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2007
STATISTICAL SECTION
Contents Page
Financial Trends 115-119
Revenue Capacity 120-125
Debt Capacity 126-130
Economic and Demographic Information 131-133
Operating Information 134-135
These schedules offer economic and demographic indicators to help the reader understand
the environment within which the City's financial activities take place.
These schedules contain service and infrastructure data to help the reader understand how
the information in the City's financial report relates to the services the City provides and
the activities it performs.
Sources:Unless otherwise noted, the information in these schedules is derived from the
comprehensive annual financial reports for the relevant year. The City implemented the new
reporting model in the fiscal year ending June 30, 2003. Schedules presenting government-
wide information include information beginning in that year.
This part of the City of Paducah's comprehensive annual financial report presents
detailed information as a context for understanding what the information in the financial
statements, note disclosures, and required supplementary information say about the City's
overall financial health.
These schedules contain trend information to help the reader understand how the City's
financial performance and well-being changed over time.
These schedules contain information to help the reader assess the factors affecting the
City's ability to generate its property and employee taxes.
These schedules present information to help the reader assess the affordability of the City's
current levels of outstanding debt and the City's ability to issue additional debt in the
future.
2007 2006 2005 (2) 2004 2003
Governmental activities:
Invested in Capital Assets, Net of Related Debt 32,557,572$ 30,664,671$ 29,492,197$ 27,826,117$ 27,955,839$
Restricted for:
Program purposes 1,904,321 1,018,231 727,699 714,538 713,766
Capital projects 4,618,923 2,689,804 940,323 4,031,802 3,583,589
Unrestricted 9,057,641 7,718,198 7,419,037 (406,042) 1,571,120
Total governmental activities net assets 48,138,457 42,090,904 38,579,256 32,166,415 33,824,314
Business-type activities:
Invested in Capital Assets, Net of Related Debt 1,491,523 1,277,720 1,463,118 1,463,668 1,425,753
Unrestricted (147,286) 132,090 (27,648) 1,979,494 1,565,100
Total business-type activities net assets 1,344,237 1,409,810 1,435,470 3,443,162 2,990,853
Primary government:
Invested in Capital Assets, Net of Related Debt 34,049,095 31,942,391 30,955,315 29,289,785 29,381,592
Restricted for:
Program purposes 1,904,321 1,018,231 727,699 714,538 713,766
Capital projects 4,618,923 2,689,804 940,323 4,031,802 3,583,589
Unrestricted 8,910,355 7,850,288 7,391,389 1,573,452 3,136,220
Total primary government net assets 49,482,694$ 43,500,714$ 40,014,726$ 35,609,577$ 36,815,167$
(1)
(2)
-115-
The City began to report accrual information when it implemented GASB Statement 34 in fiscal year 2003. Therefore, ten years of data is not
available but will be accumulated over time.
Significant change in governmental and business-type net assets due to reclassificationfor prior year omitted receivables,capital assets and post-
closure landfill expenses.
Fiscal Year
(accrual basis of accounting)
TABLE 1
NET ASSETS BY COMPONENT
CITY OF PADUCAH, KENTUCKY
Last Five Fiscal Years (1)
Pages 1 of 2
2007 2006 2005 (2) 2004 2003
Expenses
Governmental activities:
General government 9,462,543$ 9,057,295$ 8,431,994$ 7,969,027$ 7,396,882$
Public safety 15,182,704 14,592,756 14,620,938 13,243,912 12,964,120
Public service 8,299,658 8,486,662 6,249,860 8,618,901 7,376,791
Parks and recreation 1,197,072 1,044,361 1,045,024 1,026,293 975,362
Planning and development 1,891,725 2,404,636 2,521,412 5,330,393 3,108,192
Interest on long-term debt 1,134,898 974,101 775,122 496,049 428,578
Total governmental activities expenses 37,168,600 36,559,811 33,644,350 36,684,575 32,249,925
Business-type activities:
Solid Waste 4,079,684 3,893,013 3,683,954 3,419,464 3,359,731
Civic Center 54,562 45,894 39,008 33,181 46,509
TISA 267,192 269,781 170,264 184,166 123,719
Total business-type activities expenses 4,401,438 4,208,688 3,893,226 3,636,811 3,529,959
Total primary government expenses 41,570,038$ 40,768,499$ 37,537,576$ 40,321,386$ 35,779,884$
Program Revenues
Governmental activities:
Charges for services:
General government 1,730,046$ 1,618,903$ 1,485,005$ 1,601,414$ 1,445,383$
Public safety 1,024,610 767,086 794,814 1,134,386 94,386
Public service 1,150,507 942,355 895,155 986,618 683,119
Parks and recreation 122,929 103,932 117,317 132,388 131,355
Planning and development 10,810 20,602 13,501 12,893 15,867
Operating grants and contributions 2,797,216 2,988,612 2,452,694 3,290,134 4,176,548
Capital grants and contributions 3,681,490 3,302,568 1,100,064 3,221,637 2,213,757
Total governmental activities program revenues 10,517,608 9,744,058 6,858,550 10,379,470 8,760,415
Business-type activities:
Solid Waste 3,928,140 3,696,609 3,583,417 3,790,132 3,298,964
Civic Center 31,372 26,378 32,828 36,455 20,825
TISA 193,713 106,697 104,087 100,778 93,383
Operating grants and contributions - - - - -
Capital grants and contributions 23,969 22,894 14,735 24,990 3,666
Total business-type activities program revenues 4,177,194 3,852,578 3,735,067 3,952,355 3,416,838
Total primary government program revenues 14,694,802$ 13,596,636$ 10,593,617$ 14,331,825$ 12,177,253$
Net (Expense)/Revenue
Governmental activities (26,650,992)$ (26,815,753)$ (26,785,800)$ (26,305,105)$ (23,489,510)$
Business-type activities (224,244) (356,110) (158,159) 315,544 (113,121)
Total primary government net (expense) (26,875,236)$ (27,171,863)$ (26,943,959)$ (25,989,561)$ (23,602,631)$
TABLE 2
CITY OF PADUCAH, KENTUCKY
CHANGES IN NET ASSETS
Last Four Fiscal Years (1)
(accrual basis of accounting)
-116-
Fiscal Year
Pages 2 of 2
2007 2006 2005 (2) 2004 2003
General Revenues and Other Changes in Net Assets
Governmental activities:
Taxes and licenses:
Property taxes, levied for general purposes 4,122,538$ 4,107,934$ 3,919,113$ 4,012,168$ 3,893,211$
Insurance premium tax 4,414,672 3,863,953 3,957,289 3,767,864 3,580,964
Gross receipts license tax 4,050,057 3,899,432 3,720,784 3,496,438 3,404,338
Employee license tax 16,273,966 14,794,217 11,192,445 10,616,223 10,301,231
Other taxes 1,964,101 2,105,014 2,116,403 1,764,140 1,893,064
Intergovernmental revenue 1,243,028 1,201,973 955,645 871,273 836,132
Unrestricted investment earnings 639,702 462,292 290,647 220,992 325,811
Gain on sale of capital assets 48,656 8,340 - (1,972) 125,714
Transfers (58,175) (115,754) (133,959) (68,964) 18,666
Total governmental activities 32,698,545 30,327,401 26,018,367 24,678,162 24,379,131
Business-type activities:
Unrestricted investment earnings 83,854 85,786 51,508 32,826 39,530
Gain on sale of capital assets 16,641 55,337 27,500 34,975 24,238
Transfers 58,176 115,754 133,959 68,964 (18,666)
Total business-type activities 158,671 256,877 212,967 136,765 45,102
Change in Net Assets
Governmental activities:6,047,553 3,511,648 (767,433) (1,626,943) 889,621
Business-type activities:(65,573) (99,233) 54,808 452,309 (68,019)
Total primary government 5,981,980$ 3,412,415$ (712,625)$ (1,174,634)$ 821,602$
(1)
(2) Significant change in governmental and business-type net assets due to reclassification for prior year omitted receivables, capital assets and post-
closure landfill expenses.
-117-
The City began to report accrual informationwhen it implementedGASB Statement34 in fiscal year 2003. Therefore, ten years of data is not available
but will be accumulated over time.
Fiscal Year
2007 2006 2005 (1) 2004 2003 2002 2001 (2) 2000 1999 1998General FundReserved for:Encumbrances -$ -$ -$ -$ -$ -$ -$ -$ -$ 81,043$ Unreserved 9,976,079 9,157,310 8,303,702 4,642,073 4,925,982 4,441,662 4,229,377 3,930,807 4,498,239 5,514,441 Total general fund 9,976,079$ 9,157,310$ 8,303,702$ 4,642,073$ 4,925,982$ 4,441,662$ 4,229,377$ 3,930,807$ 4,498,239$ 5,595,484$ All Other Governmental FundsReserved for:Program purposes 1,009,522$ 783,596$ 498,423$ 483,423$ 695,213$ 567,096$ 604,021$ 327,925$ 411,956$ 520,769$ Capital improvements 4,618,923 2,689,804 940,323 3,886,391 3,583,589 4,211,718 9,834,405 1,520,510 1,342,071 467,765 Encumbrances - - - - - - - - - 9,537 Unreserved, reported in:Special revenue funds 502,189 758,017 1,039,854 770,453 1,080,043 714,972 1,247,619 1,402,554 825,094 1,254,083 Debt service funds 31,836 32,364 9,805 30,243 46,051 244,724 232,640 935,605 1,050,400 1,127,758 Total all other governmental funds 6,162,470$ 4,263,781$ 2,488,405$ 5,170,510$ 5,404,896$ 5,738,510$ 11,918,685$ 4,186,594$ 3,629,521$ 3,379,912$ (1) Significant increase in general fund balance due to reclassification for prior year omitted license and tax receivables in the amount of $3,870,992. (2) Significant increase in capital improvements fund balance due to $9,290,000 bond issue for convention and arts center construction. -118-Fiscal YearTABLE 3CITY OF PADUCAH, KENTUCKYFund Balances, Governmental FundsLast Ten Fiscal Years (modified accrual basis of accounting)
2007 2006 2005 2004 2003 (1) 2002 2001 (2) 2000 1999 1998Revenues:Taxes 6,044,069$ 6,204,686$ 6,016,570$ 5,871,229$ 5,773,871$ 5,377,865$ 4,881,408$ 4,659,202$ 4,770,784$ 4,582,205$ Licenses 25,140,615 23,432,565 19,368,765 18,423,244 17,900,739 17,299,400 16,705,030 15,970,996 15,584,674 14,985,551 Charges for services 783,018 654,059 625,281 668,659 743,826 1,452,732 1,332,280 1,073,577 1,167,741 1,154,319 Intergovernmental 1,676,783 1,529,879 1,192,724 1,029,307 1,186,306 590,372 450,412 428,698 449,686 458,006 Grants 6,089,711 5,797,500 3,758,041 4,002,721 4,900,775 3,990,245 3,761,900 3,736,837 3,182,544 4,217,395 Interest 540,204 402,943 251,302 190,350 316,794 541,277 515,299 485,883 503,275 553,341 Miscellaneous 1,832,161 1,844,285 1,377,175 3,781,034 1,803,408 963,956 1,110,447 942,077 1,503,984 1,055,444 Total revenues 42,106,561 39,865,917 32,589,858 33,966,544 32,625,719 30,215,847 28,756,776 27,297,270 27,162,688 27,006,261 Expenditures:General government 4,763,839 4,286,431 4,171,662 3,891,251 3,943,031 3,446,408 3,386,330 3,436,701 4,296,935 3,531,033 Public safety 14,759,735 14,366,846 14,376,161 12,963,685 12,535,382 12,293,481 11,579,654 11,499,408 11,475,934 11,178,439 Public service 7,226,542 7,418,656 5,947,105 6,914,523 5,995,396 7,163,787 5,923,130 4,260,125 5,209,051 4,009,198 Parks and recreation 1,192,727 1,044,299 1,045,024 1,026,297 975,361 897,060 738,401 1,661,562 1,661,119 1,476,446 Planning and development 2,424,198 2,545,227 2,267,774 2,570,473 2,204,395 2,231,628 2,784,725 2,208,864 2,292,407 2,839,121 Other 526,238 481,690 462,099 2,343,844 645,653 323,844 99,657 95,082 90,459 141,436 Capital outlay 6,504,491 5,003,091 4,870,136 10,987,184 4,172,978 7,579,179 3,850,565 2,785,069 2,202,828 1,977,737 Debt service:Principal requirement 782,870 594,047 552,938 428,613 379,229 362,275 140,636 134,295 170,615 150,709 Interest and fiscal requirement 1,108,385 949,537 745,676 471,625 428,578 413,364 25,752 30,536 35,891 46,829 Total expenditures 39,289,025 36,689,824 34,438,575 41,597,495 31,280,003 34,711,026 28,528,850 26,111,642 27,435,239 25,350,948 Other Financing Sources (Uses):Bonds issued - 6,100,000 - 5,000,000 - - 9,104,211 - - - Long-term debt issued 246,667 - 275,000 3,500,000 - - - - - - Transfers in 5,209,977 6,034,070 3,394,420 3,939,188 2,074,459 1,788,462 3,632,867 3,473,339 3,924,453 2,866,960 Transfers out (5,556,722) (12,681,180) (4,712,171) (5,295,576) (3,167,686) (3,062,056) (4,966,004) (4,064,491) (4,500,135) (3,816,173) Total other financing sources (uses) (100,078) (547,110) (1,042,751) 7,143,612 (1,093,227) (1,273,594) 7,771,074 (591,152) (575,682) (949,213) Net change in fund balances 2,717,458$ 2,628,983$ (2,891,468)$ (487,339)$ 252,489$ (5,768,773)$ 7,999,000$ 594,476$ (848,233)$ 706,100$ Capital outlay (2) 4,638,045$ 3,779,542$ 3,981,143$ 9,144,907$ 1,907,998$ -$ -$ -$ -$ -$ Debt service as a percentageof noncapital expenditures 5.46% 4.69% 4.26% 2.77% 2.75% 2.86% 0.67% 0.71% 0.82% 0.85%(1) The City implemented GASB 34, the new reporting standard, in fiscal year 2003.(2) For reports after fiscal year 2002, capital outlay is reported on the Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities.-119-Fiscal Year(modified accrual basis of accounting)TABLE 4CITY OF PADUCAH, KENTUCKYChanges in Fund Balances, Governmental FundsLast Ten Fiscal Years
TotalEstimatedDirectFiscal PersonalActualTax Year CommercialResidential PropertyFranchise TotalValueRate Exemptions1998 447,773,935 366,046,353 399,909,183 49,442,125 1,263,171,596 1,318,865,740 0.348 95.8% 55,694,144 1999 467,467,471 419,904,322 394,507,049 90,087,831 1,371,966,673 1,430,510,601 0.340 95.9% 58,258,356 2000 522,210,835 418,704,093 429,763,712 66,465,568 1,437,144,208 1,497,446,385 0.328 95.9% 59,328,314 2001 558,387,762 435,879,813 479,928,323 69,737,433 1,543,933,331 1,603,816,189 0.329 96.3% 58,908,995 2002 575,900,884 448,383,787 466,849,195 71,286,784 1,562,420,650 1,623,844,461 0.328 96.2% 60,449,948 2003 592,033,879 461,336,810 453,327,389 79,952,984 1,586,651,062 1,647,809,422 0.327 96.3% 60,184,497 2004 602,788,179 484,958,897 438,024,336 73,121,063 1,598,892,475 1,661,522,546 0.326 96.2% 61,656,208 2005 622,478,658 500,350,485 425,304,684 74,460,202 1,622,594,029 1,684,469,469 0.325 96.3% 60,901,557 2006 636,606,837 525,613,365 452,475,748 74,683,129 1,689,379,079 1,750,930,676 0.325 96.5% 61,551,597 2007 692,018,288 561,151,216 462,481,332 51,455,112 1,767,105,948 1,827,595,428 0.324 96.7% 60,489,480 Source: McCracken County Property Valuation AdministratorNotes: Property in McCracken County is reassessed once every four years on average.Real EstateEstimatedValue-120-PercentAssessedAssessed Value ToTABLE 5CITY OF PADUCAH, KENTUCKYASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTYLAST TEN FISCAL YEARS
TotalFiscal Real Direct Real Real Real Real Real Year Estate Personal Rate Estate Personal Estate Personal Estate Personal Estate Personal Estate Personal1998 0.327 0.390 0.348 0.043 0.050 0.372 0.372 0.585 0.607 0.032 0.034 0.103 0.123 1999 0.318 0.390 0.340 0.041 0.050 0.372 0.372 0.598 0.598 0.030 0.034 0.146 0.187 2000 0.300 0.390 0.328 0.040 0.050 0.385 0.385 0.590 0.599 0.029 0.034 0.146 0.187 2001 0.300 0.390 0.329 - - 0.385 0.385 0.597 0.597 0.022 0.022 0.195 0.223 2002 0.300 0.390 0.328 - - 0.385 0.385 0.600 0.603 0.022 0.022 0.196 0.237 2003 0.300 0.390 0.327 - - 0.396 0.396 0.598 0.605 0.022 0.022 0.196 0.221 2004 0.300 0.390 0.326 - - 0.394 0.394 0.617 0.617 0.021 0.021 0.190 0.199 2005 0.300 0.390 0.325 - - 0.448 0.448 0.618 0.619 0.021 0.021 0.196 0.226 2006 0.300 0.390 0.325 - - 0.433 0.433 0.631 0.631 0.020 0.021 0.197 0.236 2007 0.300 0.390 0.324 - - 0.433 0.433 0.631 0.631 0.020 0.021 0.197 0.236 Source: McCracken County Property Valuation Administrator and City Tax Levy Ordinance.Junior College County
-121-General Fund Public Library School Districts School DistrictsLAST TEN FISCAL YEARSCity Direct Rates Overlapping RatesMcCracken Co. City of Paducah Paducah McCrackenTABLE 6CITY OF PADUCAH, KENTUCKYPROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS(PER $100 OF ASSESSED VALUE)
(1) (2)
Assessed Assessed
Taxpayer Valuation Valuation
Kentucky Oaks Mall 50,900,262$ 2.88% 44,131,900$ 3.49%
Wal-Mart 34,849,607 1.97% 40,690,682 3.22%
Olivet Church 1031 LLC 23,261,290 1.32% 38,791,383 3.07%
South Central Bell 16,221,600 0.92% 29,562,907 2.34%
Lourdes Medical Pavilion 15,982,400 0.90% -
Computer Services, Inc. 15,362,263 0.87% 6,812,185 0.54%
Ducmall LLC 14,374,800 0.81% -
Lowe's 14,201,793 0.80% 13,891,595 1.01%
Amerisource 13,672,196 0.77%
Paducah Medical Investors 13,440,090 0.76% -
H.B. Fuller 11,767,766 0.93%
Drury Inns, Inc. 16,237,036 1.29%
VMV 6,700,900 0.53%
Citizens Bank & Turst Co. 11,603,141 0.92%
TOTALS 212,266,301$ 12.03% 220,189,495$ 17.34%
(1) Source - Property Valuation Administration; Assessed value as of January 1, 2007.
(2) Source - Property Valuation Administration; Assessed value as of January 1, 1998.
-122-
Total Assessed Total Assessed
Valuation Valuation
2007 1998
Percentage of Percentage of
TABLE 7
CITY OF PADUCAH, KENTUCKY
PRINCIPAL TAXPAYERS
CURRENT YEAR AND NINE YEARS AGO
Fiscal (1)
Year Taxes Levied (1) Collections
Ended for the Amount of in Subsequent Total
June 30, Fiscal Year Collections Years Collections
1998 4,417,910 4,373,272 99.0% 312 4,373,584$ 99.0%
1999 4,614,749 4,602,800 99.7% 489 4,603,289$ 99.8%
2000 4,428,970 4,384,681 99.0% 998 4,385,679$ 99.0%
2001 4,549,413 4,406,600 96.9% 3,420 4,410,020$ 96.9%
2002 4,679,795 4,532,885 96.9% 6,019 4,538,904$ 97.0%
2003 4,653,264 4,631,782 99.5% 8,935 4,640,717$ 99.7%
2004 4,890,723 4,866,871 99.5% 22,199 4,889,070$ 100.0%
2005 4,765,051 4,725,999 99.2% 39,052 4,765,051$ 100.0%
2006 4,962,311 4,887,983 98.5% 74,328 4,962,311$ 100.0%
2007 4,902,924 4,850,651 98.9% - 4,850,651$ 98.9%
* Source - City of Paducah Finance Department.
Collected Collected
-123-
Percent of Percent of
Levy Levy
Collected within the
Fiscal Year of the Levy Total Collections to Date
TABLE 8
CITY OF PADUCAH, KENTUCKY
SECURED TAX LEVIES AND COLLECTIONS*
LAST TEN FISCAL YEARS
(1) Includes current year real and personal property tax, franchise, auto and bank shares.
(1)
Fiscal Taxes
Year Collected
1998 8,657,001$ 1.50%
1999 8,911,588 1.50%
2000 9,451,473 1.50%
2001 9,603,106 1.50%
2002 9,873,201 1.50%
2003 10,301,231 1.50%
2004 10,616,222 1.50%
2005 11,183,157 1.50%
2006 14,947,835 2.00% (2)
2007 16,258,946 2.00%
109,803,760$
(1) Source - City of Paducah Finance Department - Actual collections during the fiscal year.
(2) Effective October 1, 2005, employee license tax rate increased from 1.5% to 2.0%.
Direct
Tax
Rate
-124-
TABLE 9
CITY OF PADUCAH, KENTUCKY
EMPLOYEE LICENSE TAX COLLECTIONS
LAST TEN FISCAL YEARS
(1)
Taxpayers Number of Percentage Taxes
By Range Filers of Total Collected
$0 - $50,000 2,264 98.18% 8,747,840$ 53.80%
$50,001 - $100,000 22 0.95% 1,602,865 9.86%
$100,001 - $500,000 18 0.78% 3,681,440 22.64%
Greater than $500,000 2 0.09% 2,226,801 13.70%
TOTALS 2,306 100.00% 16,258,946$ 100.00%
(1)
Taxpayers Number of Percentage Taxes
By Range Filers of Total Collected
$0 - $50,000 1,603 97.80% 7,462,359$ 54.97%
$50,001 - $100,000 19 1.16% 1,326,451 9.77%
$100,001 - $500,000 15 0.92% 2,907,406 21.42%
Greater than $500,000 2 0.12% 1,879,464 13.84%
TOTALS 1,639 100.00% 13,575,680$ 100.00%
(1) Source - City of Paducah Finance Department - Actual collections during the fiscal year.
* Comparative taxpayers by range information is only available after fiscal year 2006.
-125-
Total Employee
License Tax
2006
Percentage of
Total Employee
License Tax
2007
Percentage of
TABLE 10
CITY OF PADUCAH, KENTUCKY
PRINCIPAL EMPLOYEE LICENSE TAXPAYERS
CURRENT YEAR AND ONE YEAR AGO*
(1)Net Net Net (2)General PublicPublicRefundingTotalFiscal Obligation ImprovementCapital ImprovementRevenue PrimaryYear Bonds Debt Lease Debt Bonds Government1998 -$ -$ -$ 1,435,581$ 792,924$ 2,228,505$ 0.17 82$ 1999 - - - 1,331,220 701,819 2,033,039 0.14 75 2000 - - - - - - - - 2001 9,057,359 - 381,330 - - 9,438,689 0.59 359 2002 8,830,276 - 234,054 - - 9,064,330 0.56 345 2003 8,803,949 - 79,825 - - 8,883,774 0.54 338 2004 13,589,757 3,428,855 - - - 17,018,612 1.02 647 2005 13,210,195 3,503,274 - - - 16,713,469 0.99 635 2006 18,877,636 3,319,227 - - - 22,196,863 1.27 844 2007 18,278,164 3,320,522 - - - 21,598,686 1.18 821 Notes: Details regarding the city's outstanding debt can be found in the notes to the financial statements.(1) See Table 5 for estimated actual property value. This ratio is calculated using estimated property value for the prior year.(2) See Table 16 for population data.Value Capita
-126-Debt to Net Actual Debt PerGovernmental Activities Business Activities Ratio ofNet TABLE 11CITY OF PADUCAH, KENTUCKYRATIO OF OUTSTANDING DEBT BY TYPELAST TEN FISCAL YEARS
(1) Police and Infiniti Less (2)Convention andFire Pension Media ResourcesFiscal Art Center FundBuildingRestricted forYear Bonds Bonds Bonds Debt Service Total1998 -$ -$ -$ -$ -$ - -$ 1999 - - - - - - - 2000 - - - - - - - 2001 9,290,000 - - 232,641 9,057,359 0.56 344 2002 9,075,000 - - 244,724 8,830,276 0.54 336 2003 8,850,000 - - 46,051 8,803,949 0.53 335 2004 8,620,000 - 5,000,000 30,243 13,589,757 0.82 517 2005 8,380,000 - 4,840,000 9,805 13,210,195 0.78 502 2006 8,130,000 6,100,000 4,680,000 32,364 18,877,636 1.08 718 2007 7,870,000 5,925,000 4,515,000 31,836 18,278,164 1.00 695 Notes: Details regarding the city's outstanding debt can be found in the notes to the financial statements.(2) See Table 16 for population data.-127-(1) See Table 5 for estimated actual property value. This ratio is calculated using estimated property value for the prior year.Net Actual Bonds PerValue CapitaGeneral Bonded Debt Outstanding Ratio ofNet Bonds toTABLE 12CITY OF PADUCAH, KENTUCKYRATIO OF NET GENERAL BONDED DEBT OUTSTANDING LAST TEN FISCAL YEARS
Estimated
(1) Share of
Percentage Direct and
Net Debt Applicable Overlapping
Outstanding to the City Debt
City of Paducah 21,598,686$ 100.0% 21,598,686$
Paducah Independent
School District 10,480,000 * 100.0% 10,480,000
McCracken County 12,145,651 * 45.3% 5,501,980
McCracken County
Board of Education 25,416,145 * 22.7% 5,769,465
Overlapping Debt 48,041,796 21,751,445
Total direct and overlapping debt 69,640,482$ 43,350,131$
(1)
* Information from finance office at each location.
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.
-128-
TABLE 13
CITY OF PADUCAH, KENTUCKY
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
AS OF JUNE 30, 2007
Net assessed value 1,767,105,948$ Add exemption 60,489,480 Total assessed value 1,827,595,428$ Debt limit - 10% of total assessed value (1) 182,759,543$ Debt outstanding:General obligation bonds outstanding 18,310,000Notes payable 3,320,522Less debt not subject to limit - Gross bonded debt 21,630,522 Less amount available in debt service funds 31,836 Net bonded indebtedness subject to limit 21,598,686 Legal Debt Margin 161,160,857$ 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998Debt Limit 182,759,543$ 175,093,068$ 168,349,559$ 166,054,868$ 164,683,556$ 162,287,060$ 160,284,233$ 149,647,252$ 143,022,503$ 131,886,574$ Total net debt applicable to limit 21,598,686 22,196,863 16,713,469 17,018,612 8,883,774 9,064,330 9,438,689 - - - Legal debt margin 161,160,857$ 152,896,205$ 151,636,090$ 149,036,256$ 155,799,782$ 153,222,730$ 150,845,544$ 149,647,252$ 143,022,503$ 131,886,574$ Total net debt applicable to the limit as a percentage of debt limit 11.82% 12.68% 9.93% 10.25% 5.39% 5.59% 5.89% 0.00% 0.00% 0.00%
-129-Fiscal Year(1) "Cities shall not be authorized or permitted to incur indebtedness to an amount, including existing indebtedness, in the aggregate exceeding thefollowing named maximum percentages on the value of the taxable propertytherein, to be estimated by the assessment previous to the incurring of the indebtedness: Cities of the first and second classes, and of the third class having a population exceeding fifteen hundred, ten per centum."TABLE 14CITY OF PADUCAH, KENTUCKYLEGAL DEBT MARGIN INFORMATIONLAST TEN FISCAL YEARS
(1)Fiscal Gross (2)Year RevenueExpensesPrincipal Interest Total1998 3,382,994$ 1,873,558$ 1,509,436$ 210,000$ 45,190$ 255,190$ 5.91x1999 3,369,358 2,081,507 1,287,851 110,000 37,105 147,105 8.75x2000 * * * * * * *2001 * * * * * * *2002 * * * * * * *2003 * * * * * * *2004 * * * * * * *2005 * * * * * * *2006 * * * * * * *2007 * * * * * * *(1) Gross revenue includes only sewer charges received from customers.(2) Total expenses are exclusive of depreciation and bond interest.* This information is not applicable for fiscal years after 1999 as all assets and liabilities of the Wastewater/Stormwater Fund were transferred to the Paducah-McCracken County Joint Sewer Agency as of July 1, 1999.Debt Service Coverage-130-Net RevenueAvailablefor Debt Service RequirementsTABLE 15CITY OF PADUCAH, KENTUCKYSCHEDULE OF SEWER REVENUE BOND COVERAGELAST TEN FISCAL YEARS
(1) (1)
Personal
Income
27,256 324,837,008 11,918 36.6 3,244 4.6%
27,256 324,837,008 11,918 36.6 3,195 4.1%
27,256 324,837,008 11,918 36.6 3,289 4.4%
26,307 324,837,008 11,918 39.9 3,037 5.0%
26,307 484,496,019 18,417 39.9 2,909 6.3%
26,307 484,496,019 18,417 39.9 2,887 7.2%
26,307 484,496,019 18,417 39.9 2,977 5.8%
26,307 484,496,019 18,417 39.9 2,819 6.4%
26,307 484,496,019 18,417 39.9 2,834 5.7%
26,307 484,496,019 18,417 39.9 2,804 5.6%
Sources:
(1) Bureau of the Census Count - 1990 and 2000.
(2) Board of Education; represents elementary and secondary public schools.
(3) Kentucky Cabinet for Human Resources, Department for Employment Services.
2005-2006
2006-2007
-131-
2001-2002
2002-2003
2003-2004
2004-2005
1997-1998
1998-1999
1999-2000
2000-2001
Fiscal Year Population Income Age Enrollment Rate
Per Capita Median School Unemployment
(1) (1) (2) (3)
TABLE 16
CITY OF PADUCAH, KENTUCKY
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN FISCAL YEARS
Employer (1) EmployeesEmployeesWestern Baptist Hospital 1,660 5.55% 1,660 5.55%Lourdes Hospital 1,500 5.01% 1,500 5.01%Paducah Public Schools 600 2.01% 600 2.01%Wal Mart 570 1.91% 570 1.91%LYNX Services 390 1.30% 390 1.30%State of Kentucky 390 1.30% 390 1.30%City of Paducah 380 1.27% 380 1.27%Paxton Media Group 285 0.95% 285 0.95%NRE Acquisitions 270 0.90% 280 0.94%West KY Community & Technical College 270 0.90% 270 0.90%TOTALS 6,315 21.11% 6,325 21.14%(1) Source – Paducah Area Chamber of Commerce(2) State of Kentucky - Office of Employment and Training. Ratio based on employment within the County of McCracken.* Comparative information was unavailable prior to fiscal year 2006.-132-Total Total Employment (2) Employment (2)2007 2006Percentage of Percentage ofTABLE 17CITY OF PADUCAH, KENTUCKYPRINCIPAL EMPLOYERSCURRENT YEAR AND ONE YEAR AGO*
2007 2006 2005 2004 2003 2002 2001 2000 1999 1998Governmental ActivitiesGeneral governmentGeneral administration9877757788Finance 14 14 14 13 13 13 12 12 12 12Human resources3343334443Inspection 13 13 12 12 12 11 14 12 12 11Information Systems433332111Risk Management 1 1 1Public safetyPolice 93 93 96 94 95 94 95 94 94 83Fire 71 76 75 76 76 77 81 86 86 96Public serviceStreets 31 31 31 30 30 25 29 29 29 30Facilities 33 34 34 34 34 31 29 30 24 25Engineering9998778854Other6555585555Parks and recreation9555587554Planning and development11 11 11 11 11 11 11 12 11 11OtherFleet maintenance67766676810Business-type ActivitiesSolid waste 29 29 29 29 29 27 30 29 29 31Sewer/wastewater********2324Total Primary Government342 342 343 336 336 328 340 340 356 357* This information is not applicable for fiscal years after 1999 as all assets and liabilities of the Wastewater/Stormwater Fund were transferred to the Paducah-McCracken County Joint Sewer Agency as of July 1, 1999.**Information from city departments.Fiscal Year-133-TABLE 18CITY OF PADUCAH, KENTUCKYCITY FULL-TIME EMPLOYEES BY FUNCTION**Last Ten Fiscal Years
2007 2006 2005 2004 2003 2002 2001 2000 1999 1998General governmentBuilding and electrical permits issued 1,411 1,362 1,376*******Business licenses issued 3,500 3,700********Public safetyPoliceAdult arrests 5,012 3,827********Murder1 - ********Rape 18 15********Robberies 42 35********Burglary 208 211********Auto theft 117 104********Arson 167********Traffic accidents 1,949 1,815********Traffic violations 7,323 7,468********FireEmergency responses 2,456 2,546 3,219 3,638 3,569 2,845 1,665 1,651 937 *Fires extinguished 163 181 176 189 198 194 177 247 131 *Structure fires 40 53 49 64 70 72 66 69 52 *Incidents with reported losses 80 91 97 106 111 129 102 94 60 *Medical/rescue 1,369 1,589 1,997 2,266 2,290 1,551 370 319 40 *Tours/in-services/training hours 485 485 485 485 485 468 558 430 * *Inspections 1,183 1,418 1,188 965 1,058 804 1,619 1,625 * *Refuse collectionResidentialRefuse collected (tons per day) 45 34********Customers served 9,388 9,368********Commercial Customers served 832 801********Public service911 calls received 122,340 167,847 168,712 168,427 173,536 164,661****Police 59,887 76,144 103,500 104,622 110,310 106,244****Fire 3,107 4,168 3,537 3,305 3,387 4,045****Other 59,346 87,535 61,675 60,500 59,839 54,372***** Information not available.**Information from city departments.-134-TABLE 19CITY OF PADUCAH, KENTUCKYOPERATING INDICATORS BY FUNCTION**Last Ten Fiscal Years
2007 2006 2005 2004 2003 2002 2001 2000 1999 1998Public safetyPolice Stations1111111111FireStations5555555555Refuse collectionCollection trucksResidential988#######Commercial544#######Other public worksSanitary sewers (miles)********125125Combination sewers (miles)********5656Storm sewers (miles)********3636Streets (miles paved) 216 214 214 213 209 209 209 209 209 209Sidewalks (miles) 45 45 45 45 45 45 45 45 45 41Traffic signals 11 11 11 10000000Parks and recreationParks 27 18 18 18 18 18 18 18 18 18Acreage 960 325 325 325 325 325 325 230 230 230Community centers1111111111Swimming pools1111333333Public tennis courts6666666101010Public golf courses2222222222* This information is not applicable for fiscal years after 1999 as all assets and liabilities of the Wastewater/Stormwater Fund were transferred to the Paducah-McCracken County Joint Sewer Agency as of July 1, 1999.# Information not available.**Information from city departments.Fiscal Year-135-TABLE 20CITY OF PADUCAH, KENTUCKYCAPITAL ASSET STATISTICS BY FUNCTION**Last Ten Fiscal Years
CITY OF PADUCAH, KENTUCKY
SINGLE AUDIT SECTION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2007
Federal
CFDA Pass-Through
Program Title: Number Grantor Number
Department of Housing and Urban
Development:
Direct Programs:
Section 8 Housing Choice Vouchers 14.871 N/A 1,716,507$
Passed-through Kentucky Housing
Corporation:
Public Housing Capital Fund 14.872 N/A 35,842
Economic Development Initiative -
Special Project 14.251 B-06-NI-KY0016 88
Total Department of Housing and Urban
Development 1,752,437
Department of Justice:
Direct Programs:
Edward Byrne Memorial Justice
Assistance Grant Program 16.738 2005-DJBX-0259 87
Assistance Grant Program 16.738 2006-F1115-KY-DJ 18,321
Total Department of Justice 18,408
Department of Agriculture:
Passed-through Kentucky Department of
Forestry:
Urban and Community Forestry Program 10.675 600001509 5,000
Passed-through Kentucky Department of
Education:
Summer Food Service Program for
Children 10.559 N/A 36,594
Total Department of Agriculture 41,594
Department of Homeland Security:
Passed-through Division of Disaster and
Emergency Services:
Assistance to Firefighters Grant 97.044 EMW-2005-FG-15498 103,547
97.044 EMW-2005-FG-03666 39,235
Passed-through Kentucky Department of
Military Affairs:
Buffer Zone Protection Program 97.078 2005-GR-T5-0022 6,600
Total Department of Homeland Security 149,382
(Continued)
CITY OF PADUCAH, KENTUCKY
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2007
Federal Grantor/Pass-Through Grantor/
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Expenditures
Federal
CFDA Pass-Through
Program Title: Number Grantor Number
Department of the Interior:
Passed-through Kentucky Governor's
Office of Local Development
Outdoor Recreation_Acquisition,
Development and Planning 15.916 LWCF-21-2350 56,711
Total Department of the Interior 56,711
Department of Transportation:
Passed-through Kentucky Department of
State Police:
State and Community Highway Safety 20.600 N/A 34,236
Passed-through Kentucky Governor's
Office of Local Development
Recreational Trails Program 20.219 RTP 156-01 1,078
Recreational Trails Program 20.219 RTP 187-02 1,246
Recreational Trails Program 20.219 N/A 11,520
Passed-through to River Heritage
Museum
Highway Planning and Construction 20.205 C05024679 17,698
Total Department of Transportation 65,778
TOTAL EXPENDITURES OF FEDERAL AWARDS 2,084,310$
See accompanying notes to schedule of expenditures of federal awards.
Expenditures
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CITY OF PADUCAH, KENTUCKY
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2007
Federal Grantor/Pass-Through Grantor/
CITY OF PADUCAH, KENTUCKY
NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2007
Note 1 - Basis of Presentation:
The accompanying schedule of expenditures of federal awards includes the federal grant activity of the
City of Paducah and is presented on the accrual basis of accounting. The information in this schedule is
presented in accordance with the requirements of OMB Circular A-133, Audits of States, Local
Governments, and Non-Profit Organizations. Therefore, some amounts presented in this schedule may
differ from amounts presented in, or used in the preparation of, the financial statements.
Note 2 – Subrecipients:
The City of Paducah provided federal awards to subrecipients as follows:
Federal
CFDA Amount
Program Title Number Provided
Paducah Board of Education 10.559 36,594
River Heritage Museum 20.205 17,698
$ 54,292
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CITY OF PADUCAH, KENTUCKY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2007
A. Summary of Audit Results:
1. The auditor’s report expresses an unqualified opinion on the basic financial statements of the City of
Paducah, Kentucky.
2. One significant control deficiency was disclosed during the audit of the basic financial statements of
the City of Paducah, Kentucky.
3. No instances of noncompliance material to the basic financial statements of the City of Paducah,
Kentucky were disclosed during the audit.
4. No instances of significant deficiencies were disclosed during the audit of the major federal award
programs.
5. The auditor’s report on compliance for the major federal award programs for the City of Paducah,
Kentucky expresses an unqualified opinion.
6. There are no audit findings relative to the major federal awards program to be reported.
7. The programs tested as major programs included:
Name CFDA #
Section 8 Housing Choice Vouchers 14.871
Assistance to Firefighters Grant 97.044
8. The threshold for distinguishing Types A and B programs was $300,000.
9. The City of Paducah, Kentucky was determined to be a low-risk auditee.
B. Findings - Basic Financial Statements Audit:
Reference # 2007-1
Testing of payroll related to termination of employment noted seven discrepancies.
Cause
Untimely communication between department managers, human resource and finance department-
payroll.
Effect
Untimely communication resulted in two instances of overpayment of wages (both recovered); two
instances of late payment of final wages; two instances overpayment of state incentive pay (one
recovered); and one instance of improper remittance of timesheet during leave resulting in overpayment
of wages (recovered).
Recommendation
We recommend the City review controls governing employment termination and implement guidelines
to improve the timely communication of employee’ termination and/or on leave to insure the finance
department-payroll is aware of status changes prior to preparing payroll for each period.
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CITY OF PADUCAH, KENTUCKY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2007
Management Response
Staff review of these incidents shows that each of these system failures resulted from a communication
time lag in the flow of personnel information from the employing department to Human Resources and
then to Finance payroll staff. Staff will strengthen the system controls and explore replacing paper
forms with electronic forms, which can be communicated instantaneously. The erroneous state incentive
payment, which was not recovered, was a $48 amount involved in a difficult termination, which staff
chose not to reopen.
C. Findings and Questioned Costs - Major Federal Award Programs:
None
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