HomeMy WebLinkAboutJune-30-2008City of Paducah
Paducah, Kentucky
Comprehensive Annual Financial Report
Year Ended June 30, 2008
Issued by the
Finance Department
CITY OF PADUCAH, KENTUCKY
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2008
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
Proprietary Funds:
Statement of Net Assets 13 45
Statement of Revenues, Expenses and Changes in
Fund Net Assets 14 46
Statement of Cash Flows 15 47
Fiduciary Funds:
Statement of Net Assets 16 48
Statement of Changes in Net Assets 17 49
Component Units Financial Statements:
Statement of Net Assets 18 50-51
Statement of Activities 19 52-53
Notes to Financial Statements 54-87
Required Supplementary Information:
Pension Trust Funds Schedules A-1 88
Exhibit No. Page No.
Supplementary Information:
Nonmajor Governmental Funds:
Combining Balance Sheet B-1 89-90
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances B-2 91-92
Detail Schedule of Revenues, Expenditures, and
Changes in Fund Balance – Budget and Actual:
Municipal Aid Program Fund B-3 93
Emergency Communication Service Fund B-4 94
Court Awards Fund B-5 95
Small Grant Fund B-6 96
Home Grant Fund B-7 97
HUD Revolving Grant Fund B-8 98
Paducah Housing Authority Police Grant Fund B-9 99
Nonmajor Proprietary Funds:
Combining Statement of Net Assets C-1 100
Combining Statement of Revenues, Expenses and
Changes in Fund Net Assets C-2 101
Combining Statement of Cash Flows C-3 102
Internal Service Funds:
Combining Statement of Net Assets D-1 103
Combining Statement of Revenues, Expenses, and
Changes in Fund Net Assets D-2 104
Combining Statement of Cash Flows D-3 105
Fiduciary Funds:
Combining Statement of Net Assets – Pension
Trust Funds E-1 106
Combining Statement of Changes in Net Assets –
Pension Trust Funds E-2 107
Combining Statement of Net Assets –
Private-purpose Trust Funds E-3 108
Combining Statement of Changes in Net Assets –
Private-purpose Trust Funds E-4 109
Statement of Changes in Assets and
Liabilities – Agency Funds E-5 110
Table No. Page No.
Statistical Section:
Net Assets by Component 1 111
Changes in Net Assets 2 112-113
Fund Balances, Governmental Funds 3 114
Changes in Fund Balances, Governmental Funds 4 115
Assessed and Estimated Actual Value of
Taxable Property 5 116
Property Tax Rates - Direct and Overlapping
Governments 6 117
Principal Taxpayers 7 118
Secured Tax Levies and Collections 8 119
Employee License Tax Collections 9 120
Principal Employee License Taxpayers 10 121
Ratio of Outstanding Debt by Type 11 122
Ratio of Net General Bonded Debt Outstanding 12 123
Table No. Page No.
Statistical Section:
Direct and Overlapping Governmental
Activities Debt 13 124
Legal Debt Margin Information 14 125
Schedule of Sewer Revenue Bond Coverage 15 126
Demographic and Economic Statistics 16 127
Principal Employers 17 128
City Full-Time Employees by Function 18 129
Operating Indicators by Function 19 130
Capital Asset Statistics by Function 20 131
Single Audit Section:
Schedule of Expenditures of Federal Awards 132-133
Notes to the Schedule of Expenditures of Federal
Awards 134
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 135-136
Report on Compliance with Requirements Applicable
to Each Major Program and On Internal Control Over
Compliance in Accordance with OMB Circular A-133 137-138
Schedule of Findings and Questioned Costs 139-140
CITY OF PADUCAH, KENTUCKY
INTRODUCTORY SECTION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2008
December 17, 2008
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, 2008.
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, 2008, 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 FY2008, as the following table indicates, there were 186 jobs created and retained, and $6.75 million capital
invested not to mention the added fiscal impact from the jobs created and capital invested. Additionally,
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
FY2008
Company
Capital
Investment
In Millions
Jobs
New
Retained
Hunter Marine Transport $ 1.50 7 4
Atlas Roofing $.75 6 12
Kentucky Publishing $.50 10 7
Federal Express $4.00 100 40
Total $6.75 123 63
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. In 2008, WKCTC opened a Paducah School of Art, which held classes this
fall in its temporary location, while the permanent facility is under construction
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.
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.
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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 2008.
Started in 2004, the ‘Rivers Edge International Film Festival’ is a four-day event built around the showing of
independent film from around the world. The festival is held in multiple venues including Maiden Alley
Cinema, Market House Theatre, and Yeiser Art Center. In addition to appealing to the film lover, the festival
also provides filmmakers opportunities for exhibition, education, and networking.
Paducah is the site of the Museum of the American Quilter’s Society. In May 2008, a congressional
designation was passed naming the museum as the National Quilt Museum of the United States. The museum,
dedicated in 1991, is the centerpiece for the quilters’ annual convention held in April. The convention attracts
an estimated 30,000 visitors to Paducah annually.
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 70,000 participants to Paducah’s riverfront during the last weekend in September. Over time, this
annual event has grown to incorporate other events, including ‘Marine Industry Day’ and ‘Old Market Days’.
Paducah Power sponsors the annual ‘Christmas in the Park’ lighting display at Noble Park. The public is
invited to a special lighting ceremony the Friday after Thanksgiving. This is the eleventh year for the event.
Although the event is free, volunteers collect more than $30,000 in cash and thousands of pounds of canned
food annually.
Paducah has an active symphony and several theater groups. The Paducah Symphony Orchestra stages
concerts during the winter season, with the Market House Theater presenting several productions during the
same time period. In addition, West Kentucky Community and Technical College’s ‘Arts in Focus’ series
sponsors a variety of professional productions.
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
339 full-time employees as of June 30, 2008. 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 FY2008, 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 2009 budget process, the Commission reviewed
numerous decision packages proposed for the Investment Fund Budget; expenditures totaling $4.36 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 30,029 persons employed (McCracken County) as of June 30,
2008.
The June 2008 unemployment rate was 6.1% (McCracken County), which is 11% higher than the federal rate
of 5.5%. Both local and federal unemployment rates increased, compared to 5.6 and 4.7 in the prior year,
respectively. 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 1,203 for fiscal year 2008 valued at $47.7 million, which
is $23.7 million down from fiscal year 2007.
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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 were invested in either obligations of the United States or its agencies, or collateralized Certificates
of Deposit. Interest income totaling approximately $615 thousand was earned in all 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 decreasing approximately $171,000 or 13% to $1.13 million
for fiscal year 2008 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 decrease of $2.373 million, with net assets valued at $12.1 million on
June 30, 2008. 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 was 1 active member and 86 retirees
and/or beneficiaries in this fund as of June 30, 2008. The most recent actuarial report prepared for the PFPF
was as of July l, 2008.
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 16.17% for non-hazardous and 33.87% for hazardous duty employees in fiscal year
2008.
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 7 retirees and/or beneficiaries receiving
benefits from the fund as of June 30, 2008. 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
$45,874 in fiscal year 2008, with net assets valued as of June 30, 2008, of $271,701.
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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, 2007. This was the seventeenth 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 Mayor and Commissioners Advisory Board and Committees City Manager City Attorney Finance Department City Clerk Inspection Parks Department Fire Department Public Works Department Solid Waste Fleet Maintenance DivisionFacility Maintenance Division Police Department Human Resources Planning Department Engineering Department Engineering Division Flood Control Division Street Division -8-
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 Steve Kyle
City Engineer Richard Murphy
Planning Stephen Ervin
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, 2008
Independent Auditor’s Report
Honorable William F. Paxton, Mayor
Members of the Board of Commissioners
City of Paducah
Paducah, Kentucky
We have audited the accompanying financial statements of the governmental activities, the business-type
activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining
fund information of the City of Paducah, Kentucky (the City), as of and for the year ended June 30, 2008,
which collectively comprise the City’s basic financial statements as listed in the table of contents. These
financial statements are the responsibility of the City of Paducah, Kentucky’s management. Our responsibility
is to express opinions on these financial statements based on our audit. We did not audit the financial
statements of the following component units: Paducah Water Works, Paducah Power System, and Transit
Authority of the City of Paducah, which represent 100 percent of the assets and revenues of the Component
Units column. Those financial statements were audited by other auditors whose reports have been furnished to
us, and our opinion on the basic financial statements, insofar as it relates to the amounts included for Paducah
Water Works, Paducah Power System, and Transit Authority of the City of Paducah, discretely presented
component units, is based on the reports of the other auditors.
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards, issued
by the Comptroller General of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the basic financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall basic financial statement presentation. We believe that our
audit provides a reasonable basis for our opinions.
In our opinion, based on our audit and the reports of other auditors, the financial statements referred to above
present fairly, in all material respects, the respective financial position of the governmental activities, the
business-type activities, the aggregate discretely presented component units, each major fund, and the
aggregate remaining fund information of the City of Paducah, Kentucky as of June 30, 2008, and the
respective changes in financial position and cash flows, where applicable, thereof and the respective budgetary
comparisons for the General Fund and Special Revenue Investment Fund , for the year then ended in
conformity with accounting principles generally accepted in the United States of America. In addition, in our
opinion, the financial statements referred to above present fairly, in all material respects, the respective
financial positions of each nonmajor governmental, nonmajor enterprise, internal service, and fiduciary fund,
which collectively comprise the City’s combining and individual fund statements and schedules as listed in the
table of contents as of June 30, 2008, and the respective changes in financial position and cash flows, where
applicable, thereof and the respective budgetary comparisons for the non-major governmental funds, for the
year then ended in conformity with accounting principles generally accepted in the United States of America.
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333 Broadway Suite 1001 Paducah, KY 42001
Phone: (270)443-4400 Fax: (270)443-0963 kempercpa.com
In accordance with Government Auditing Standards, we have also issued our report dated December 17, 2008,
on our consideration of the City’s internal control over financial reporting and our tests of its compliance with
certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that
report is to describe the scope of our testing of internal control over financial reporting and compliance and the
results of that testing and not to provide an opinion on the internal control over financial reporting or on
compliance. That report is an integral part of an audit performed in accordance with Government Auditing
Standards and important for assessing the results of our audit.
The Management’s Discussion and Analysis and Pension Trust Fund Schedules on pages 13 through 25 and
88, are not a required part of the basic financial statements but are supplementary information required by
accounting principles generally accepted in the United States of America. We have applied certain limited
procedures, which consisted principally of inquiries of management regarding the methods of measurement
and presentation of the supplementary information. However, we did not audit the information and express no
opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City of Paducah, Kentucky’s basic financial statements. The introductory section and statistical
section are presented for purposes of additional analysis and are not a required part of the basic financial
statements. The accompanying schedule of expenditures of federal awards is presented for purposes of
additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of State,
Local Governments, and Non-Profit Organizations, and is also not a required part of the basic financial
statements of the City of Paducah, Kentucky. The schedule of expenditures of federal awards has been
subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the basic financial statements taken as a whole. The
introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of
the basic financial statements and, accordingly, we express no opinion on them.
Certified Public Accountants and Consultants
Paducah, Kentucky
December 17, 2008
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CITY OF PADUCAH, KENTUCKY
REQUIRED SUPPLEMENTARY INFORMATION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2008
CITY OF PADUCAH, KENTUCKY
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2008
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, 2008. 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 26-87) 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 $50.4 million at the close of the 2007-2008 fiscal year. Of this
amount, $9.4 million (unrestricted net assets) may be used to meet City government’s ongoing
obligations to citizens and creditors.
• Total net assets increased $647,137.
• At fiscal year end, City governmental funds reported a combined ending fund balance of $15.6
million. Approximately 65% of this total amount, $10.1 million, is unreserved and available for
spending at the City’s discretion. Of the $10.1 million, $631,677 is in various special funds, which
are earmarked for specific purposes.
• At the end of the current fiscal year, unreserved general fund balance was $9.4 million, of which
cash makes up approximately $4.2 million. When compared to actual total appropriations, the
general fund cash balance is 13%.
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, Section Eight Housing, 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 eleven (11) individual governmental funds. Information is presented separately
in the governmental fund balance sheet and in the governmental fund statement of revenues,
expenditures, and changes in fund balances for the General, General Capital Improvements,
Investment, and Debt Service Funds, all of which are considered to be major funds. Data from the
other seven (7) funds are combined into a single, aggregated presentation. Individual fund data for
each of these non-major governmental funds is provided in the form of combining and individual
fund statements elsewhere in this report on pages 89-99.
Readers may better understand the long-term impact of the City’s near-term financing decisions by
comparing the narrow-focus governmental funds financial statements with governmental activities
in the government-wide financial statements. Exhibit 4 (pages 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.
-14-
The City uses four enterprise funds to account for Solid Waste, Section Eight Housing,
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
enterprise fund financial statements can be found on pages 45-47.
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 50-53.
b. Internal Service Funds are used to accumulate and allocate costs internally among the
City’s various functions. The City uses internal service funds to account for fleet services,
fleet replacement, risk management (insurance) and employee health programs. Internal
Service Funds have been allocated between governmental activities and business-type
activities in the government-wide financial statements based on revenue earned.
Proprietary funds provide the same kind of information as government-wide financial
statements, but in greater detail. Individual data for the nonmajor proprietary funds is presented
in the form of combining statements on pages 100-102 of this report. Individual data for the
internal service funds is likewise presented in the form of combining statements on pages 103-
105 of this report.
3) Fiduciary Funds. Fiduciary funds are used to account for resources held for the benefit of
parties outside the government and are not reflected in government-wide financial statements
because those resources are not available to support City programs. Individual data for the
City’s four (4) fiduciary funds (Appointive Employees’ Pension, Police and Firefighters’
Retirement, Other Trust Funds, and Maintenance and Rehabilitation Trust) are presented in the
form of combining statements on pages 106-110 of this report.
C. Notes to the Financial Statements
The notes provide additional information that is essential to fully understanding data provided in the
government-wide and fund financial statements. Notes to the financial statements can be found on
pages 54-87 of this report.
D. Other Information
In addition to basic financial statements and accompanying notes, this report also presents certain
required supplementary information concerning City funding of its obligation to provide pension
benefits to its employees and budgetary comparison schedules for the general and major special
revenue funds.
The combining statements referred to earlier in connection with nonmajor governmental funds,
nonmajor proprietary funds, internal service funds and fiduciary funds are presented immediately
following the required supplementary information on pensions and budgetary comparisons.
Combining fund statements and schedules can be found on pages 89-110 of this report.
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 $50.4 million as of June 30, 2008.
The largest portion of the City’s net assets (67%) reflects its investment in capital assets (i.e., land,
buildings, machinery, equipment and infrastructure) less outstanding related debt used to acquire those
assets. The City uses these capital assets to provide service to citizens and, as a result, these assets are
-15-
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 (14%) represents resources that are subject to external
restrictions on how they may be used. The remaining balance of unrestricted net assets (19%) may be
used to meet the City’s ongoing obligations to citizens and creditors.
As of June 30, 2008, the City reports positive balances 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
2008 2007 2008 2007 2008 2007
(Restated) (Restated) (Restated)
Current Assets $ 32,855,949 $ 32,471,637 $ 2,989,156 $ 3,261,224 $ 35,845,105 $ 35,732,861
Capital Assets 35,123,258 38,575,330 1,863,975 1,505,323 36,987,233 40,080,653
Other noncurrent assets 8,620,763 6,520,288 - - 8,620,763 6,520,288
Total Assets 76,599,970 77,567,255 4,853,131 4,766,547 81,453,101 82,333,802
Current Liabilities 8,082,282 7,914,656 351,399 431,296 8,433,681 8,345,952
Noncurrent liabilities 20,507,471 22,132,588 2,078,262 2,068,712 22,585,733 24,201,300
Total liabilities 28,589,753 30,047,244 2,429,661 2,500,008 31,019,414 32,547,252
Net assets:
Invested in capital assets, net of
related debt 31,766,783 32,557,572 1,863,975 1,505,323 33,630,758 34,062,895
Restricted 6,810,671 5,794,248 579,460 728,996 7,390,131 6,523,244
Unrestricted 9,432,763 9,168,191 (19,965) 32,220 9,412,798 9,200,411
TOTAL NET ASSETS $ 48,010,217 $ 47,520,011 $ 2,423,470 $ 2,266,539 $ 50,433,687 $ 49,786,550
A. Analysis of the City’s Operations
The following table provides a summary of the City’s operations for the years ended June 30, 2008
and 2007. Governmental activities increased the City’s net assets by $490,206. Business-type
activities increased the City’s net assets by $156,931.
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City of Paducah, Kentucky
Changes in Net Assets
June 30
Governmental Activities Business-Type Activities Total Primary Government
2008 2007 2008 2007 2008 2007
Revenues: (Restated) (Restated) (Restated)
Program revenues:
Charges for services $ 2,951,203 $ 4,038,902 $ 4,341,859 $ 4,332,732 $ 7,293,062 $ 8,371,634
Operating grants/
contributions 1,340,261 782,322 1,785,809
2,014,894 3,126,070 2,797,216
Capital grants/
contributions 1,297,900 3,681,490 9,480 23,969 1,307,380 3,705,459
General Revenues:
Property taxes 4,221,957 4,122,538 - - 4,221,957 4,122,538
Franchise taxes 137,816 183,736 - - 137,816 183,736
Telecommunications tax 826,379 522,665 - - 826,379 522,665
Insurance premium tax 4,699,458 4,414,672 - - 4,699,458 4,414,672
Vehicle tax 597,239 594,585 - - 597,239 594,585
Bank tax 177,011 163,930 - - 177,011 163,930
Gross receipts license tax 4,061,587 4,050,057 - - 4,061,587 4,050,057
Employee license tax 16,520,523 16,273,966 - - 16,520,523 16,273,966
Other taxes 521,511 499,185 - - 521,511 499,185
Intergovernmental revenue 1,401,400 1,243,028 - - 1,401,400 1,243,028
Unrestricted investment
earnings 540,620 638,976 73,985 84,580 614,605 723,556
Gain on sale of capital assets 119,200 48,656 127,131 16,641 246,331 65,297
Total revenues 39,414,065 41,258,708 6,338,264 6,472,816 45,752,329 47,731,524
Expenses:
General Government 10,709,641 9,462,543 - - 10,709,641 9,462,543
Public safety 15,938,831 15,182,704 - - 15,938,831 15,182,704
Public service 9,543,714 8,299,658 - - 9,543,714 8,299,658
Park & recreation 1,286,955 1,197,072 - - 1,286,955 1,197,072
Planning & development 282,042 64,670 - - 282,042 64,670
Interest on long-term debt 1,066,067 1,134,898 - - 1,066,067 1,134,898
Solid Waste - - 4,086,747 4,079,684 4,086,747 4,079,684
Section Eight Housing - - 1,949,899 1,716,507 1,949,899 1,716,507
Civic Center - - 84,908 54,560 84,908 54,560
TISA - - 156,388 267,194 156,388 267,194
Total expenses 38,827,250 35,341,542 6,277,942 6,117,945 45,105,192 41,459,487
Increase (decrease) in Net
assets before transfers 586,815 5,917,166 60,322 354,871 647,137 6,272,037
Transfers (96,609) (58,175) 96,609 58,175 - -
Change in net assets 490,206 5,858,991 156,931 413,046 647,137 6,272,037
Net assets, July 1, restated 47,520,011 41,661,020 2,266,539 1,853,493 49,786,550 43,514,513
NET ASSETS, JUNE 30 $ 48,010,217 $ 47,520,011 $ 2,423,470 $ 2,266,539 $ 50,433,687 $ 49,786,550
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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.
The graph below depicts the breakdown of revenue by source for fiscal year 2008.
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Governmental Activities
Expenses and Program Revenues
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
General
Government
Public safety Public service Park &
recreation
Planning &
development
Interest on
long-term
debtMillionsExpenses
Revenues
Governmental Activities
Revenue by Source
Intergovernmental
revenue
4%
Operating grants/
contributions
3%
Other Taxes
6%
Capital grants/
contributions
3%
Property taxes
11%
Charges for
services
8%
Unrestricted
investment
earnings
1%
Occupational
Licenses
64%
In fiscal year 2008, the City derived 81% of its revenue from taxes/licenses. Occupational licenses,
which include payroll withholding tax, business licenses, and insurance premium tax is the largest
source of income to the City, totaling approximately $25.2 million. This category of revenue
increased 2% from fiscal year 2007, which is modest compared to the 10% increase experienced in
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 increased the City’s net assets by $156,931.
The chart below shows the operating results for each of the City’s business-type activities. These
activities should break-even; that is, the charges for services should be large enough to sustain
operations. For fiscal year 2008, business-type activities as a whole had an increase in net assets of
$156,931. This was primarily due to the performance of the Solid Waste fund.
The Solid Waste fund, a major fund of the organization, experienced a positive change in net assets
for the first time since fiscal year 2004. During 2008, efforts were made to improve the performance
of this function, including a rate increase as well as efficiency measures through equipment and
route reorganization.
Section Eight Housing had a decrease in net assets of $163,337. Annual HUD grant funding is
based on expected rentals for the year. During fiscal year 2008, actual rentals exceeded what had
been projected.
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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 Section
Eight
Housing
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 $15.6 million (see Exhibit 3). Approximately 65% of this total amount, $10.1 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 $10.1 million, $696,725 is in the debt service fund and
various special revenue funds, which are earmarked for specific purposes. The remaining $5.5
million of fund balance is reserved for specific future uses. The allocation of fund balances among
the categories (shown below) is consistent with prior years.
The general fund is the chief operating fund of the City. At the end of the 2007-2008 fiscal year, the
general fund unreserved fund balance was $9.4 million. City fiscal policy (ordinance 2007-6-7288)
required that an amount not less than 8% of the General Fund’s budgeted expenditures remain
undesignated in the fund balance, or $2.5 million, which leaves $6.9 million as unreserved for fiscal
year 2008. While $6.9 million represents unreserved fund balance, it is worth noting here that at
year-end there was only $4.2 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’s fund balance represents approximately 30% of
expenditures and transfers out ($31 million). When compared to total appropriations ($31 million),
the general fund cash balance ($4.2 million) is 13%.
The General Fund’s fund balance decreased by $825 thousand during the 2007-2008 fiscal year.
This was due to the Commission’s approval of a mid-year appropriations package that took cash
down to the 8% required reserve. The appropriation amendment totaled $2.1 million.
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 $21 thousand over last year. Fund
balance remained virtually unchanged because the funding allocated to capital projects during the
year were expended, leaving little on hand at year-end.
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Governmental Funds Ending Fund Balance
Unreserved -
other funds
4%
Reserved
35%
Unreserved -
general fund
61%
The Investment Fund had a fund balance of $2.1 million, all of which is reserved for capital projects.
The Investment Fund’s fund balance increased $388 thousand. 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 $1,255,494
Section Eight Housing 579,460
Civic Center 210,923
TISA 257,740
Combined total net asset change for the four funds was an increase of $133 thousand, broken down
as follows: Solid Waste ($255 thousand increase), Section Eight Housing ($163 thousand decrease),
Civic Center ($13 thousand decrease), and TISA ($54 thousand increase). Other factors concerning
the proprietary enterprise funds have been addressed in the discussion of City business-type
activities (III, C).
V. General Fund Budgetary Highlights
Differences between the original budget and the final actual amounts resulted in a $1.693 million
increase in appropriations and can be briefly summarized as follows:
Appropriations
Department Increase Decrease
(In Thousands)
General administration $ 128 $ -
Downtown development 104 -
Finance 4 -
Planning - 78
Human rights - 11
Human resources 3 -
Inspection - 126
Information systems - 26
Risk management - 6
Police - 566
Fire 160 -
Public works - 211
Engineering services - 3
Recreation 3 -
Other 2,318 -
Transfers out were increased by over $2.0 million. This increase is due to the mid-year budget
appropriation designating $2.1 million for capital projects and other projects such as an operating subsidy
to the Barkley Regional Airport, a loan to the local economic development council, and various incentives
paid to new and relocating businesses in the community.
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VI. Capital Asset and Debt Administration
A. Capital Assets
The City’s investment in capital assets for governmental and business-type activities as of June 30,
2008, is $37.0 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 2008, projects and equipment expenditures totaled nearly $4.8 million. The
largest capital-type projects, in terms of dollars in fiscal year 2008, are shown in the following table:
Olivet Church Road Improvements $ 544,142
Riverfront Development & Boat Launch 510,943
Noble Park Improvements & Recreation Trail 518,919
Neighborhood Redevelopment 279,002
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.
City of Paducah, Kentucky
Capital Assets
(Net of Accumulated Depreciation)
June 30
Governmental Activities Business-Type Activities Total Primary Government
2008 2007 2008 2007 2008 2007
Land $ 6,236,574 $ 6,518,216 $ 65,908 $ 65,908 $ 6,302,482 $ 6,584,124
Land improvements 1,909,420 1,606,021 - - 1,909,420 1,606,021
Construction in
progress 2,511,350 802,177 - - 2,511,350 802,177
Buildings and
improvements 3,894,226 7,208,859 240,292 253,670 4,134,518 7,462,529
Infrastructure 17,023,648 19,175,949 - - 17,023,648 19,175,949
Equipment 1,587,880 1,460,002 343,176 55,343 1,931,056 1,515,345
Furnishings and
fixtures 7,130 5,845 - - 7,130 5,845
Vehicles 1,953,030 1,798,261 1,214,599 1,116,602 3,167,629 2,914,863
TOTALS $ 35,123,258 $ 38,575,330 $ 1,863,975 $ 1,491,523 $ 36,987,233 $ 40,066,853
Additional information on City capital assets can be found in Note 3 in the notes to financial
statements on pages 68-70.
B. Long-Term Debt
At year-end, the City had $22,432,196 in outstanding bonds, accrued compensated absences and
notes payable, compared to $23,569,480 at June 30, 2007 with maturities extending through 2026.
During the year, the City’s total debt decreased by $1,137,284, as shown in the following table:
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Governmental Activities
2008 2007
Convention and Performing Arts Center – 2001 $ 7,600,000 $ 7,870,000
Kentucky League of Cities – 2003 2,822,970 2,968,856
Infiniti Media Building – 2004 4,340,000 4,515,000
General Fund accrued compensated absences 1,805,893 1,938,958
KACO – 2005 - 105,000
Police/Firefighter Pension Fund Liability – 2006 5,740,000 5,925,000
Jones Agreement (Art School) -- 2007 123,333 246,666
TOTALS $22,432,196 $23,569,480
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).
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.
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 $197,015,689. 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 2008, less than 6.2% 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 71-74.
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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 2008. It is estimated that nearly 200 jobs were
created or retained in fiscal year 2008 along with $6.7 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.
During fiscal year 2008, the newly hired Downtown Development Director, along with Paducah
Main Street, launched an incentive program designed for the placement of retail establishments in
the downtown/riverfront area. Beginning in fiscal year 2009, the efforts of the Lowertown project
coordinator, Downtown Development director, and Paducah Main Street will be combined with the
creation of Paducah Renaissance Alliance (PRA). PRA has been 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 2008 was 6.1%.
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 two-thirds of the City’s annual
operating 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
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 decreased the rates slightly for FY2008, the rates are back
up for FY2009, and 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 2008,
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 $6.5 million Olivet Church Road Project, and is currently
in the process of obtaining the necessary right-of way. This project will relieve traffic congestion
and improve traffic safety for Interstate 24 at Exit 3 and 4.
-24-
VIII. Requests for Information
This financial report is designed to provide a general financial overview for those interested in the City
of Paducah government finances. Questions or requests for additional financial information may be
addressed to Jonathan Perkins, Finance Director, City of Paducah, 500 South 5th Street, Paducah, KY
42001.
-25-
CITY OF PADUCAH, KENTUCKY
BASIC FINANCIAL STATEMENTS
GOVERNMENT-WIDE FINANCIAL STATEMENTS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2008
Exhibit 1
Governmental Business-type Component
Current Assets: Activities Activities Total Units
Cash and cash equivalents 4,269,873$ 1,027,031$ 5,296,904$ 2,741,214$
Investments 8,450,036 1,250,036 9,700,072 -
Receivables, net:
Notes 923,784 - 923,784 -
Lease 160,845 160,845
Accounts 5,794,746 535,475 6,330,221 4,878,529
Grants 284,002 9,634 293,636 271,439
Interest 205,338 28,792 234,130 -
Property tax 4,513,846 - 4,513,846 -
Other - - - 1,399,326
Internal balances (119,853) 119,853 - -
Inventory 1,285,008 - 1,285,008 2,023,126
Prepaid pension obligation 5,797,633 - 5,797,633 -
Prepaid expenses 1,243,044 18,335 1,261,379 43,900
Other current assets 47,647 - 47,647 911,975
Total current assets 32,855,949 2,989,156 35,845,105 12,269,509
Noncurrent Assets:
Investments, restricted - - - 1,905,327
Notes receivable 3,984,270 - 3,984,270 -
Lease receivable 3,991,461 3,991,461
Bond issuance costs, net 216,974 - 216,974 -
Net capital assets:
Land and construction in progress 8,747,924 65,908 8,813,832 4,759,783
Depreciable capital assets 26,375,334 1,798,067 28,173,401 81,783,922
Restricted assets - - - 2,637,436
Other assets 428,058 - 428,058 378,549
Total noncurrent assets 43,744,021 1,863,975 45,607,996 91,465,017
Total assets 76,599,970$ 4,853,131$ 81,453,101$ 103,734,526$
CITY OF PADUCAH, KENTUCKY
STATEMENT OF NET ASSETS
JUNE 30, 2008
ASSETS
-26-
Primary Government
Governmental Business-type Component
Current Liabilities: Activities Activities Total Units
Voucher and accounts payable 1,141,830$ 242,938$ 1,384,768$ 5,511,148$
Line of credit - - - 2,119,695
Accrued payables 576,420 34,373 610,793 605,065
Due to other taxing agencies 124,529 - 124,529 -
Unearned revenue 4,214,963 - 4,214,963 775,110
Accrued compensated absences 996,072 74,088 1,070,160 -
Accrued interest 99,815 - 99,815 157,502
Notes payable due within one year 273,653 - 273,653 98,877
Bonds payable due within one year 655,000 - 655,000 1,370,790
Other current liabilities - - - 1,611,270
Total current liabilities 8,082,282 351,399 8,433,681 12,249,457
Noncurrent Liabilities:
Accrued compensated absences 809,821 15,762 825,583 -
Landfill post-closure costs - 2,062,500 2,062,500 -
Other liabilities - - - 342,661
Notes payable 2,672,650 - 2,672,650 6,380,504
Bonds payable 17,025,000 - 17,025,000 3,742,084
Total noncurrent liabilities 20,507,471 2,078,262 22,585,733 10,465,249
Total liabilities 28,589,753 2,429,661 31,019,414 22,714,706
Invested in capital assets, net
of related debt 31,766,783 1,863,975 33,630,758 74,859,144
Restricted for:
Program purposes 1,782,251 579,460 2,361,711 -
Capital projects 5,028,420 - 5,028,420 -
Debt service - - - 3,487,017
Unrestricted 9,432,763 (19,965) 9,412,798 2,673,659
TOTAL NET ASSETS 48,010,217$ 2,423,470$ 50,433,687$ 81,019,820$
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 10,709,641$ 1,415,943$ -$ -$
Public safety 15,938,831 268,839 635,808 450,812
Public service 9,543,714 1,111,188 199,254 838,846
Parks and recreation 1,286,955 124,606 - -
Planning and development 282,042 30,627 283,852 8,242
Interest on long-term debt 1,066,067 - 221,347 -
Total governmental activities (See Note 1) 38,827,250 2,951,203 1,340,261 1,297,900
Business-type activities:
Solid Waste 4,086,747 4,165,094 - -
Section Eight Housing 1,949,899 - 1,785,809 -
Civic Center 84,908 32,932 - -
TISA 156,388 143,833 - 9,480
Total business-type activities 6,277,942 4,341,859 1,785,809 9,480
TOTAL PRIMARY GOVERNMENT 45,105,192$ 7,293,062$ 3,126,070$ 1,307,380$
Component Units:
Authorities:
Paducah Water Works 7,036,580$ 7,589,839$ -$ 1,728,126$
Paducah Power System 51,961,317 54,267,380 - -
Paducah Transit Authority 6,643,730 3,768,194 2,159,614 693,218
TOTAL COMPONENT UNITS 65,641,627$ 65,625,413$ 2,159,614$ 2,421,344$
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, 2007
Adjustment to beginning net assets (See Note 10)
NET ASSETS, JUNE 30, 2008
See accompanying notes to the basic financial statements.
CITY OF PADUCAH, KENTUCKY
Grants and
Contributions
FOR THE YEAR ENDED JUNE 30, 2008
STATEMENT OF ACTIVITIES
Program Revenues
Capital
-28-
Governmental Business-type Component
Activities Activities Total Units
(9,293,698)$ -$ (9,293,698)$ -$
(14,583,372) - (14,583,372) -
(7,394,426) - (7,394,426) -
(1,162,349) - (1,162,349) -
40,679 - 40,679 -
(844,720) - (844,720) -
(33,237,886) - (33,237,886) -
- 78,347 78,347 -
- (164,090) (164,090) -
- (51,976) (51,976) -
- (3,075) (3,075) -
- (140,794) (140,794) -
(33,237,886) (140,794) (33,378,680) -
- - - 2,281,385
- - - 2,306,063
- - - (22,704)
- - - 4,564,744
4,221,957 - 4,221,957 -
137,816 - 137,816 -
826,379 - 826,379 -
4,699,458 - 4,699,458 -
597,239 - 597,239 -
177,011 - 177,011 -
4,061,587 - 4,061,587 -
16,520,523 - 16,520,523 -
521,511 - 521,511 -
1,401,400 - 1,401,400 -
540,620 73,985 614,605 355,018
119,200 127,131 246,331 6,590
- - - 199,551
33,824,701 201,116 34,025,817 561,159
(96,609) 96,609 - -
33,728,092 297,725 34,025,817 561,159
490,206 156,931 647,137 5,125,903
48,138,457 1,344,237 49,482,694 75,893,917
(618,446) 922,302 303,856 -
48,010,217$ 2,423,470$ 50,433,687$ 81,019,820$
Net (Expense) Revenue and Changes in Net Assets
Primary Government
-29-
CITY OF PADUCAH, KENTUCKY
BASIC FINANCIAL STATEMENTS
FUND FINANCIAL STATEMENTS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2008
Exhibit 3
Special
General
Fund
Cash and cash equivalents 180,790$ 1,746,693$ 794,382$
Investments 3,970,036 1,250,000 -
Accounts receivable:
Accounts 6,237,703 53,724 320,000
Lease
Grants 91,522 173,280 -
Interest 105,118 779 -
Property taxes (net of
allowances for uncollectibles) 4,329,630 - -
Due from other funds 907,782 6,900 985,860
TOTAL ASSETS 15,822,581$ 3,231,376$ 2,100,242$
Liabilities:
Voucher and accounts payable 409,181$ 284,236$ 12,062$
Accrued payroll and payroll taxes 541,903 - -
Due to other funds 985,860 - 6,900
Due to other taxing agencies 124,529 - -
Deferred revenue 4,198,687 - -
Accrued compensated absences 145,994 - -
Total liabilities 6,406,154 284,236 18,962
Fund Balances:
Reserved for:
Program purposes - - -
Capital improvements - 2,947,140 2,081,280
Unreserved:
General Fund 9,416,427 - -
Special Revenue Funds - - -
Debt Service Fund - - -
Total fund balances 9,416,427 2,947,140 2,081,280
TOTAL LIABILITIES AND FUND BALANCES 15,822,581$ 3,231,376$ 2,100,242$
See accompanying notes to the basic financial statements.
JUNE 30, 2008
GOVERNMENTAL FUNDS
BALANCE SHEET
CITY OF PADUCAH, KENTUCKY
General
Capital
-30-
Revenue
Investment
Fund
LIABILITIES AND FUND BALANCES
ASSETS
Improvements
Debt
Service
Fund
65,048$ 1,190,648$ 3,977,561$
- 50,000 5,270,036
- 189,238 6,800,665
4,152,306 4,152,306
- 19,200 284,002
- 31 105,928
- - 4,329,630
- - 1,900,542
4,217,354$ 1,449,117$ 26,820,670$
-$ 291,589$ 997,068$
- 27,030 568,933
- - 992,760
- - 124,529
4,152,306 1,578 8,352,571
- - 145,994
4,152,306 320,197 11,181,855
497,243 497,243
- 5,028,420
- 9,416,427
631,677 631,677
65,048 - 65,048
65,048 1,128,920 15,638,815
4,217,354$ 1,449,117$ 26,820,670$
Governmental
-31-
Nonmajor
Governmental
Funds
Total
Funds
Exhibit 4
Total fund balance - total governmental funds 15,638,815$
Amounts reported for governmental activities in the Statement
of Net Assets are different because:
184,216
3,902,135
978
1,208,749
5,797,633
35,123,258
428,058
216,974
(Continued)
Inventory is not a current financial resource and, therefore, is not
reported in the governmental funds balance sheet.
Governmental funds report losses on direct financing leases when
incurred, whereas the loss of direct financing leases are deferred and
amortized over the live of the lease in the Statement of Net Assets.
-32-
Bond issuance costs used in governmental activities are not current
financialresources and, therefore,are not reportedin the governmental
funds balance sheet.
Capital assets used in governmental activities are not current financial
resources and, therefore, are not reported in the governmentalfunds
balance sheet. This amount includescapital assets of Internal Service
Funds.
A prepaid pension obligation is not a current financial resource, and
therefore, is not reported in the governmental funds balance sheet.
CITY OF PADUCAH, KENTUCKY
RECONCILIATION OF THE GOVERNMENTAL FUNDS
BALANCE SHEET TO STATEMENT OF NET ASSETS
Delinquent property taxes receivable are not reported in the
governmental funds balance sheet since they are not considered
"available" revenues.
Interest receivableon the long-termnotes receivableis not reported on
the governmentalfunds balance sheet since neither the note receivable
nor the interest is available to pay current period expenditures.
JUNE 30, 2008
The long-term notes receivable are not reported in the governmental
funds balance sheet since they are not available to pay current period
expenditures.
Exhibit 4
(Continued)
4,152,306$
(99,815)
$ 1,924,725
20,347,196 (22,271,921)
4,890,045$
(1,041,361)
(119,853) 3,728,831
NET ASSETS OF GOVERNMENTAL ACTIVITIES 48,010,217$
See accompanying notes to the basic financial statements
JUNE 30, 2008
Accrued interest payments on debt are not due and payable in the
current period and, therefore, are not reported in the governmental
funds balance sheet.
business-type activities
Long-term liabilities of ($20,626,303) are not due and payable in the
current period and, therefore, they are not reported in the
governmentalfunds balance sheet. See Note 3 for detail. Other related
amounts includeaccrued compensatedabsences of ($1,645,617). The
long-term liabilities are:
CITY OF PADUCAH, KENTUCKY
RECONCILIATION OF THE GOVERNMENTAL FUNDS
BALANCE SHEET TO STATEMENT OF NET ASSETS
Receivablesfrom direct finaningleases are not available in the current
period and, therefore, are deferred in the governmentalfunds balance
sheet.
-33-
Due within one year
Due after one year
Current assets
Net amount allocated to
Internal service funds are used by managementto charge the costs of
certain activities, such as insurance and fleet management, to
individual funds. The assets and liabilities of the Internal Service
Funds (net of amount allocated to business-type activities) not
included in other reconciling items are:
Current liabilities
Exhibit 5
Special
General
Revenues: Fund
Taxes 5,595,128$ -$ -$
Licenses 21,836,041 - 4,088,521
Charges for services 641,404 - -
Intergovernmental - - -
Grants 612,586 1,021,489 -
Interest 394,502 779 -
Miscellaneous 1,169,355 162,040 -
Total revenues 30,249,016 1,184,308 4,088,521
Expenditures:
Current operations:
General government 5,085,374 - -
Public safety 14,252,895 - -
Public service 6,747,011 - -
Parks and recreation 1,298,329 - -
Planning and development - - 580,034
Other 520,611 - -
Capital outlay - 4,826,983 -
Debt service:
Principal requirement - - -
Interest and fiscal requirement - - -
Total expenditures 27,904,220 4,826,983 580,034
Excess (deficiency) of revenues over expenditures 2,344,796 (3,642,675) 3,508,487
Other Financing Sources (Uses):
Capital lease
Transfers in 141,763 3,989,328 203,916
Transfers out (3,311,682) (325,564) (3,323,995)
Total other financing sources (uses) (3,169,919) 3,663,764 (3,120,079)
Net change in fund balances (825,123) 21,089 388,408
Fund balances, July 1, 2007 9,976,079 2,926,051 1,692,872
Adjustment to beginning fund balance (See Note 10)265,471 - -
FUND BALANCES, JUNE 30, 2008 9,416,427$ 2,947,140$ 2,081,280$
See accompanying notes to the basic financial statements.
CITY OF PADUCAH, KENTUCKY
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2008
-34-
Improvements
Revenue
Investment
Fund
General
Capital
Debt
Service
Fund
-$ 544,036$ 6,139,164$
- - 25,924,562
- 193,701 835,105
644,736 920,612 1,565,348
- 39,861 1,673,936
- 23,822 419,103
- 612,915 1,944,310
644,736 2,334,947 38,501,528
- - 5,085,374
- 1,443,833 15,696,728
- 1,188,177 7,935,188
- - 1,298,329
- 223,942 803,976
- - 520,611
- - 4,826,983
880,887 - 880,887
1,051,008 - 1,051,008
1,931,895 2,855,952 38,099,084
(1,287,159) (521,005) 402,444
371,979 - 371,979
948,392 958,487 6,241,886
- (91,276) (7,052,517)
1,320,371 867,211 (438,652)
33,212 346,206 (36,208)
31,836 782,714 15,409,552
- - 265,471
65,048$ 1,128,920$ 15,638,815$
Funds
Nonmajor
Governmental Governmental
Total
-35-
Funds
Exhibit 6
Net change in fund balances - total governmental fund (36,208)$
Amounts reported for governmental activities in the Statement
of Activities are different because:
361,493
(143,307)
2,857,186
(314,581)
(22,295)
14,409
(170,040)
(33,745)
(708,337)
(Continued)
Governmental funds report the effect of direct financing leases when incurred,
whereas the effect of direct financing leases are deferred and amortized over the
live of the lease in the Statement of Activities.
-36-
Tax revenuesthat provide current financial resources are reported as revenuesin
the governmental funds.
CITY OF PADUCAH, KENTUCKY
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
Inventorypurchases require the use of current financial resources and, therefore,
are reported as expenditures in governmental funds.
Inventory sales provide current financial resources and are reported as revenues
in governmental funds.
The prepayment of a pension obligation requires the use of current financial
resources and, therefore, is reported as an expenditure in governmental funds.
However, the prepayment does not affect net assets in the government-wide
Statement of Activities.
Capital assest acquired in previous years donated in the current year do not
require the use of current financial resources. Donation of capital assets with
historical cost of $747,393 less depreciaton of $39,056 is reported as an
expenditure in the government-wide Statement of Activities.
FOR THE YEAR ENDED JUNE 30, 2008
Contributions for debt service received from other governments are reported as
current year revenue in the governmentalfunds. However, receipts for long-term
receivables are not considered revenue in the Statement of Activities.
Governmental funds report capital outlays as expenditures. However, in the
Statement of Activities, the cost of those assets is allocated over their estimated
useful lives as depreciationexpense. This is the amount of capital outlays in the
current period.
Delinquent property taxes receivable are not considered "available" revenues in
the governmental funds.
Exhibit 6
(Continued)
(3,604,343)
1,004,220
6,635
46,139
(13,313)
764,931$
(24,137)
505,499 1,246,293
CHANGE IN NET ASSETS OF GOVERNMENTAL ACTIVITIES 490,206$
See accompanying notes to the basic financial statements
Governmentalfunds report the effect of bond issuance costs when debt is issued,
whereas these amounts are deferred and amortized in the Statement of Activities.
Accrued interest payments on debt do not require the use of current financial
resources. Accrued interest is reported as an expenditurein the government-wide
Statement of Activities.
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2008
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND
Long-term accrued compensated absences do not require the use of current
financial resources and, therefore, are not reported as expenditures in
governmental funds.
Depreciation expense on capital assets is reported in the government-wide
Statementof Activitiesand Changesin Net Assets, but doesnot requirethe use of
current financialresources. Therefore,depreciationexpenseis not reported as an
expenditurein governmentalfunds. This amount includesInternal ServiceFunds'
depreciation expense of $505,499.
Principal payments of debt require the use of current financial resources and,
therefore, are reported as expenditures in governmental funds. However,
principal payments of debt do not affect net assets in the government-wide
Statement of Activities.
-37-
Internal service funds are used by management to charge the costs of certain
activities, such as insurance and fleet management,to individualfunds. The net
revenueof the Internal Service Funds is reported with governmentalactivitiesnet
of the amount allocated to business-type activities and depreciation expense.
These amounts are as follows:
Change in net assets
business-type activities
Depreciation expense
CITY OF PADUCAH, KENTUCKY
Net of amount allocated to
TO THE STATEMENT OF ACTIVITIES
Exhibit 7
Variance with
Final Budget
Positive
Original Final (Negative)
Beginning budgetary fund balance 9,976,079$ 10,241,550$ 10,241,550$ -$
Resources (Inflows):
Taxes:
Real and personal,
current year 4,619,000 4,663,090 4,663,101 11
Real and personal,
prior year 98,000 138,250 138,254 4
Franchise 273,000 141,600 141,601 1
Bank taxes 164,000 177,010 177,011 1
In lieu of tax payment 170,000 179,100 179,101 1
Penalty, interest and
advertising 32,000 3,125 3,126 1
Paducah Junior College
tax collections - 292,930 292,934 4
Total taxes 5,356,000 5,595,105 5,595,128 23
Licenses:
Business licenses 3,970,000 4,212,220 4,212,222 2
Employee earnings 12,659,515 12,447,020 12,447,020 -
Comcast fees 307,000 307,535 307,541 6
Penalties 65,000 58,755 58,758 3
Alcoholic beverages 118,000 134,000 134,000 -
Insurance premium tax 4,380,000 4,703,845 4,703,845 -
Building permits 150,000 109,765 109,765 -
Electrical permits 30,500 29,190 29,194 4
Zoning change fees 4,500 10,125 10,128 3
Miscellaneous building
and electrical fees 500 230 231 1
KJDA payroll rebate (173,500) (176,660) (176,663) (3)
Total licenses 21,511,515 21,836,025 21,836,041 16
Charges for services:
Tax collection fee 117,000 137,640 137,643 3
Administrative charge 253,440 252,960 252,960 -
Base court revenue 57,000 126,195 126,195 -
Recreation fees 115,000 124,595 124,606 11
Total charges for services 542,440 641,390 641,404 14
(Continued)
Amounts
ActualBudgeted Amounts
-38-
CITY OF PADUCAH, KENTUCKY
BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS)
GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2008
Exhibit 7
(Continued)
Variance with
Final Budget
Actual Positive
Grants:Original Final Amounts (Negative)
Police State Incentive 327,500$ 272,345$ 272,348$ 3$
Fire State Incentive 282,200 267,540 267,544 4
Paducah Housing Authority
after school program 30,000 38,160 38,164 4
Police supplemental grants - 34,530 34,530 -
Total grants 639,700 612,575 612,586 11
Interest 474,000 394,490 394,502 12
Other:
Property rent and sales 649,645 653,050 653,062 12
Property upkeep and
maintenance 183,525 212,440 212,448 8
Contractual programs 5,000 9,110 9,114 4
E911 - GIS 22,515 22,515 22,515 -
Miscellaneous 198,915 272,185 272,216 31
Total other 1,059,600 1,169,300 1,169,355 55
Other financing sources:
Operating transfers in - 141,765 141,763 (2)
Total other financing sources - 141,765 141,763 (2)
Amounts available for appropriation 39,559,334 40,632,200 40,632,329 129
Charges to Appropriations (Outflows):
General government:
General administration:
Mayor and Commissioners 209,785 205,315 205,267 48
City Manager 352,910 358,640 358,582 58
City Clerk 177,525 177,460 177,405 55
Corporate Counsel 168,705 197,880 197,849 31
Non-departmental 442,500 592,500 592,500 -
Memberships and contingency 79,450 27,555 27,549 6
Civic beautification 3,585 3,310 3,291 19
Total general administration 1,434,460 1,562,660 1,562,443 217
Downtown Development - 104,180 104,164 16
(Continued)
-39-
BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS)
Budgeted Amounts
GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2008
CITY OF PADUCAH, KENTUCKY
Exhibit 7
(Continued)
Variance with
Final Budget
Actual Positive
General government:Original Final Amounts (Negative)
Finance:
Finance administration 186,130$ 258,425$ 258,382$ 43$
Accounting and payroll 428,520 373,445 373,365 80
Revenue collection 374,460 361,460 361,348 112
Total finance 989,110 993,330 993,095 235
Planning:
Administration 276,505 287,075 287,010 65
Planning 257,370 190,355 190,286 69
Grants 129,615 108,335 107,603 732
Total planning 663,490 585,765 584,899 866
Human rights 107,825 96,320 96,140 180
Human resources 324,805 327,825 327,778 47
Inspection:
Inspection administration 173,670 169,110 169,033 77
Construction 354,170 310,685 310,647 38
Code enforcement 484,165 417,470 417,467 3
Neighborhood redevelopment 79,260 68,425 68,368 57
Total inspection 1,091,265 965,690 965,515 175
Information systems 351,470 325,755 325,709 46
Risk management 131,875 125,705 125,631 74
Public safety:
Police:
Police administration 1,212,140 1,113,750 1,113,648 102
Patrol 5,790,210 5,461,530 5,461,529 1
Investigations 1,477,105 1,336,900 1,336,790 110
Total police 8,479,455 7,912,180 7,911,967 213
Fire:
Fire administration 305,355 258,665 258,594 71
Suppression 5,444,165 5,651,045 5,650,987 58
Prevention 302,285 308,995 308,950 45
Training 129,765 122,400 122,397 3
Total fire 6,181,570 6,341,105 6,340,928 177
(Continued)
Budgeted Amounts
GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2008
-40-
BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS)
CITY OF PADUCAH, KENTUCKY
Exhibit 7
(Continued)
Variance with
Final Budget
Actual Positive
Public service:Original Final Amounts (Negative)
Public works:
Public Works Administration 365,760$ 380,055$ 379,983$ 72$
Street maintenance 2,192,805 2,069,505 2,069,553 (48)
Street lighting 465,000 471,390 471,390 -
Downtown maintenance 332,400 315,540 315,682 (142)
Landscape maintenance 2,342,485 2,270,185 2,270,078 107
Summer youth program 84,925 65,710 65,693 17
Total public works 5,783,375 5,572,385 5,572,379 6
Engineering services:
Engineering services 720,245 620,320 620,150 170
Flood control 457,345 554,540 554,482 58
Total engineering services 1,177,590 1,174,860 1,174,632 228
Recreation:
Recreation administration 677,345 719,770 719,768 2
Pools and recreation 618,260 578,660 578,561 99
Total recreation 1,295,605 1,298,430 1,298,329 101
Other:
Cable authority 95,550 95,945 95,934 11
Leave expense - (88,495) (88,494) (1)
Intergovernmental expense - 292,935 292,934 1
Miscellaneous property expense 143,780 220,280 220,237 43
Total other 239,330 520,665 520,611 54
Other financing uses:
Operating transfers out 1,274,805 3,311,695 3,311,682 13
Total charges to appropriations 29,526,030 31,218,550 31,215,902 2,648
BUDGETARY FUND BALANCE,
JUNE 30, 2008 10,033,304$ 9,413,650$ 9,416,427$ 2,777$
See accompanying notes to the basic financial statements.
-41-
CITY OF PADUCAH, KENTUCKY
Budgeted Amounts
GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2008
BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS)
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 40,632,329$
Differences - budget to GAAP:
The beginning fund balance is a budgetary resource,
but is not a current year revenue for financial
reporting purposes (10,241,550)
Transfers from other funds are inflows of budgetary
resources, but are not revenues for financial
reporting purposes (141,763)
Total revenues as reported on the statement of revenues,
expenditures, and changes in fund balances-
governmental funds 30,249,016$
Uses/outflows of resources:
Actual amounts "total charges to appropriations" from
the budgetary comparison schedule 31,215,902$
Differences - budget to GAAP:
Transfers to other funds are outflows of budgetary
resources, but are not expenditures for financial
reporting purposes (3,311,682)
Total expenditures as reported on the statement of
revenues, expenditures, and changes in fund balances-
governmental funds 27,904,220$
See accompanying notes to the basic financial statements.
CITY OF PADUCAH, KENTUCKY
-42-
FOR THE YEAR ENDED JUNE 30, 2008
NOTE TO RSI
BUDGETARY COMPARISON SCHEDULE
GENERAL FUND
Exhibit 9
Variance with
Final Budget
Positive
Original Final (Negative)
Beginning budgetary fund balance 1,692,872$ 1,692,872$ 1,692,872$ -$
Resources (Inflows):
Licenses:
Employee earnings 4,125,000 4,088,520 4,088,521 1
Total licenses 4,125,000 4,088,520 4,088,521 1
Other financing sources:
Operating transfers in - 203,915 203,916 1
Total other financing sources - 203,915 203,916 1
Amounts available for appropriation 5,817,872 5,985,307 5,985,309 2
Charges to Appropriations (Outflows):
General government:
Planning and development:
Economic development 848,000 580,040 580,034 6
Total planning and development 848,000 580,040 580,034 6
Other financing uses:
Operating transfers out 3,027,000 3,323,995 3,323,995 -
Total charges to appropriations 3,875,000 3,904,035 3,904,029 6
BUDGETARY FUND BALANCE,
JUNE 30, 2008 1,942,872$ 2,081,272$ 2,081,280$ 8$
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, 2008
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 5,985,309$
Differences - budget to GAAP:
The beginning fund balance is a budgetary resource,
but is not a current year revenue for financial
reporting purposes (1,692,872)
Transfers from other funds are inflows of budgetary
resources, but are not revenues for financial
reporting purposes (203,916)
Total revenues as reported on the statement of revenues,
expenditures, and changes in fund balances-
governmental funds 4,088,521$
Uses/outflows of resources:
Actual amounts "total charges to appropriations" from
the budgetary comparison schedule 3,904,029$
Differences - budget to GAAP:
Transfers to other funds are outflows of budgetary
resources, but are not expenditures for financial
reporting purposes (3,323,995)
Total expenditures as reported on the statement of
revenues, expenditures, and changes in fund balances-
governmental funds 580,034$
See accompanying notes to the basic financial statements.
CITY OF PADUCAH, KENTUCKY
-44-
FOR THE YEAR ENDED JUNE 30, 2008
NOTE TO RSI
BUDGETARY COMPARISON SCHEDULE
SPECIAL REVENUE INVESTMENT FUND
Exhibit 13
Nonmajor
Solid Enterprise
Current Assets: Waste Funds Totals
Cash and cash equivalents 147,399$ 879,632$ 1,027,031$ 292,309$
Investments 1,250,036 - 1,250,036 3,180,000
Accounts receivable 528,896 16,213 545,109 -
Interest receivable 28,792 - 28,792 98,432
Prepaid expenses - 18,335 18,335 1,243,044
Inventory - - - 76,260
Total current assets 1,955,123 914,180 2,869,303 4,890,045
Noncurrent Assets:
Net capital assets:
Land 65,908 - 65,908 -
Depreciable capital assets 1,540,832 257,235 1,798,067 1,979,932
Total noncurrent assets 1,606,740 257,235 1,863,975 1,979,932
Total assets 3,561,863 1,171,415 4,733,278 6,869,977
Current Liabilities:
Voucher and accounts payable 137,159 58,132 195,291 144,760
Accrued payroll and payroll taxes 34,373 - 34,373 7,487
Accrued compensated absences 72,337 1,751 74,088 14,281
Deferred revenue - - - 14,698
Due to other funds - 47,647 47,647 860,135
Total current liabilities 243,869 107,530 351,399 1,041,361
Noncurrent Liabilities:
Landfill post-closure costs 2,062,500 - 2,062,500 -
Accrued compensated absences - 15,762 15,762 -
Total noncurrent liabilities 2,062,500 15,762 2,078,262 -
Total liabilities 2,306,369 123,292 2,429,661 1,041,361
Invested in capital assets 1,606,740 257,235 1,863,975 1,979,932
Unrestricted (351,246) 790,888 439,642 3,848,684
TOTAL NET ASSETS 1,255,494$ 1,048,123$ 2,303,617 5,828,616$
Reconciliation to government-wide statements of net assets:
Adjustment to reflect the consolidation of Internal Service Funds'
activities related to Enterprise Funds 119,853
NET ASSETS OF BUSINESS-TYPE ACTIVITIES 2,423,470$
See accompanying notes to the basic financial statements.
-45-
Business-type Activities
ASSETS
LIABILITIES
NET ASSETS
Funds
Service
Internal
Governmental
Activities
CITY OF PADUCAH, KENTUCKY
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
JUNE 30, 2008
Exhibit 14
Nonmajor
Solid Enterprise
Operating Revenues: Waste Funds Totals
Charges for services - internal -$ 1,960,900$ 1,960,900$ 5,566,518$
Charges for services - external 4,109,197 - 4,109,197 415,605
Miscellaneous 37,497 1,674 39,171 -
Total operating revenues 4,146,694 1,962,574 6,109,268 5,982,123
Operating Expenses:
Cost of sales and service 3,764,798 2,157,848 5,922,646 5,674,257
Depreciation and amortization 321,949 33,349 355,298 505,499
Total operating expenses 4,086,747 2,191,197 6,277,944 6,179,756
Operating income (loss) 59,947 (228,623) (168,676) (197,633)
Nonoperating Revenues (Expenses):
Interest and investment income 73,432 553 73,985 121,518
Gain (loss) on disposal of property
and equipment 127,131 - 127,131 119,200
Total nonoperating revenues (expenses)200,563 553 201,116 240,718
Income (loss) before contributions and
transfers 260,510 (228,070) 32,440 43,085
Contributions and Transfers:
Capital contributions - 9,480 9,480 -
Transfers in - 112,099 112,099 731,700
Transfers out (5,736) (15,490) (21,226) (9,854)
Total contributions and transfers (5,736) 106,089 100,353 721,846
Change in net assets 254,774 (121,981) 132,793 764,931
Total net assets, July 1, 2007 821,214 1,156,304 5,063,685
Adjustment to beginning net assets (See Note 10) 179,506 13,800 -
TOTAL NET ASSETS - JUNE 30, 2008 1,255,494$ 1,048,123$ 5,828,616$
Reconciliation to government-wide statements of net assets:
Adjustment to reflect the consolidation of Internal Service Funds'
activities related to Enterprise Funds 24,137
CHANGE IN NET ASSETS OF BUSINESS-TYPE ACTIVITIES 156,930$
See accompanying notes to the basic financial statements.
Internal
Service
Funds
-46-
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, 2008
Governmental
Exhibit 15
Nonmajor
Solid Enterprise
Cash Flows from Operating Activities: Waste Funds Totals
Cash received from customers 3,895,877$ 2,018,607$ 5,914,484$ -$
Cash received from interfund services provided - - - 5,997,277
Payments to suppliers (2,487,861) - (2,487,861) (210,698)
Payments to employees (897,032) (128,521) (1,025,553) (240,101)
Claims paid - - - (4,560,255)
Payments to internal service funds (430,059) (4,798) (434,857) -
Other receipts (payments) 37,497 (2,047,961) (2,010,464) (1,260,554)
Net cash provided (used) by operating activities 118,422 (162,673) (44,251) (274,331)
Cash Flows from Noncapital Financing Activities:
Transfers (to) from other funds (5,736) 96,609 90,873 721,846
Cash Flows from Capital and Related
Financing Activities:
Capital contributions - 9,480 9,480 -
Purchase of capital assets (734,514) (14,967) (749,481) (695,002)
Proceeds from sale of capital assets 162,661 - 162,661 137,163
Net cash provided (used) by capital and
related financing activities (571,853) (5,487) (577,340) (557,839)
Cash Flows from Investing Activities:
Proceeds from sale of investment securities 1,480,000 - 1,480,000 2,322,767
Interest on cash and investments 57,932 553 58,485 92,948
Purchase of investments (1,250,036) - (1,250,036) (3,180,000)
Net cash provided (used) by investing
activities 287,896 553 288,449 (764,285)
Net increase (decrease) in cash and cash
equivalents (171,271) (70,998) (242,269) (874,609)
Cash and cash equivalents, July 1, 2007 318,670 950,630 1,269,300 1,166,918
CASH AND CASH EQUIVALENTS,
JUNE 30, 2008 147,399$ 879,632$ 1,027,031$ 292,309$
Reconciliation of Operating Income (Loss) to Net
Cash Provided by Operating Activities:
Operating income (loss) 59,947$ (228,621)$ (168,674)$ (197,633)$
Adjustments to reconcile operating income to
net cash provided by operating activities:
Depreciation and amortization 321,949 33,349 355,298 505,499
Change in assets and liabilities:
Receivables (213,320) 56,033 (157,287) 22,791
Prepaid expenses - (3,244) (3,244) (195,926)
Inventories - - - 10,325
Accounts payable (50,154) (20,190) (70,344) (419,387)
NET CASH PROVIDED (USED) BY OPERATING
ACTIVITIES 118,422$ (162,673)$ (44,251)$ (274,331)$
See accompanying notes to the basic financial statements.
Business-type Activities
Funds
CITY OF PADUCAH, KENTUCKY
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2008
-47-
Governmental
Activities
Internal
Service
Exhibit 16
Private-
Pension purpose Agency
Funds Trusts Funds
Cash and cash equivalents 42,464$ 7,009$ 459,094$
Receivables:
Interest 61,032 - -
Prepaid expenses 275 - -
Investments at fair value
Money market funds 109,562 3,733 -
Certificates of deposits 240,000 - -
Common stock 3,828,565 - -
Corporate bonds 906,664 - -
U.S. agencies bonds 2,552,301 - -
Mortgage backed securities 306 - -
Mutual funds 4,628,579 1,001,054 -
Total assets 12,369,748 1,011,796 459,094
Voucher and accounts payable 993 1,217 -
Due to other funds - - -
Payroll taxes and withholdings
payable - - 459,094
Total liabilities 993 1,217 459,094
Held in trust for pension benefits
and other purposes 12,368,755$ 1,010,579$ -$
See accompanying notes to the basic financial statements
NET ASSETS
Primary Government
-48-
ASSETS
LIABILITIES
CITY OF PADUCAH, KENTUCKY
STATEMENT OF NET ASSETS
FIDUCIARY FUNDS
JUNE 30, 2008
Exhibit 17
Private-
Pension purpose
Additions: Funds Trusts
Contributions:
Employer 44,498$ -$
Plan members 10,318 -
Intergovernmental revenues - 10,110
Total contributions 54,816 900,409
Investment income:
Net increase (decrease) in
fair value of investments (938,045) (44,014)
Interest and dividends 421,799 17,691
Net investment income (516,246) (26,323)
Interfund transfers - (2,087)
Total additions (461,430) 871,999
Deductions:
Benefits 1,886,554 -
Capital outlay - 4,247
Administrative expenses 70,852 7,622
Total deductions 1,957,406 11,869
Change in net assets (2,418,836) 860,130
Net assets, July 1, 2007 14,787,591 150,449
NET ASSETS, JUNE 30, 2008 12,368,755$ 1,010,579$
See accompanying notes to the basic financial statements.
-49-
STATEMENT OF CHANGES IN NET ASSETS
CITY OF PADUCAH, KENTUCKY
FIDUCIARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2008
CITY OF PADUCAH, KENTUCKY
BASIC FINANCIAL STATEMENTS
COMPONENT UNITS FINANCIAL STATEMENTS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2008
Exhibit 18
All
Paducah Paducah Paducah Component
Water Power Transit Unit
Current Assets: Works System Authority Totals
Cash and cash equivalents 888,164$ 1,466,762$ 386,288$ 2,741,214$
Receivables, net:
Accounts 364,411 4,446,807 67,311 4,878,529
Grants - - 271,439 271,439
Other 691,705 695,156 12,465 1,399,326
Inventories 493,467 1,507,698 21,961 2,023,126
Prepaid expenses - 8,052 35,848 43,900
Other current assets 911,975 - - 911,975
Total current assets 3,349,722 8,124,475 795,312 12,269,509
Noncurrent Assets:
Investments, restricted - 1,905,327 - 1,905,327
Net capital assets:
Land and construction in progress 2,054,046 2,219,423 486,314 4,759,783
Depreciable capital assets 31,365,189 46,925,041 3,493,692 81,783,922
Restricted assets 2,637,436 - - 2,637,436
Other assets 28,957 349,592 - 378,549
Total noncurrent assets 36,085,628 51,399,383 3,980,006 91,465,017
Total assets 39,435,350 59,523,858 4,775,318 103,734,526
CITY OF PADUCAH, KENTUCKY
STATEMENT OF NET ASSETS
COMPONENT UNITS
JUNE 30, 2008
ASSETS
-50-
All
Paducah Paducah Paducah Component
Water Power Transit Unit
Current Liabilities: Works System Authority Totals
Voucher and accounts payable 722,119$ 4,542,152$ 246,877$ 5,511,148$
Cash deficit - - - -
Line of credit - 2,039,362 80,333 2,119,695
Accrued payables - 512,251 92,814 605,065
Deferred revenue - 775,110 - 775,110
Accrued interest - 157,502 - 157,502
Notes payable due within one year 25,000 - 73,877 98,877
Bonds payable due within one year 970,790 400,000 - 1,370,790
Other current liabilities 994,574 616,696 - 1,611,270
Total current liabilities 2,712,483 9,043,073 493,901 12,249,457
Noncurrent Liabilities:
Bonds payable - 3,742,084 - 3,742,084
Notes payable 115,000 6,000,000 265,504 6,380,504
Other liabilities - 342,661 - 342,661
Total noncurrent liabilities 115,000 10,084,745 265,504 10,465,249
Total liabilities 2,827,483 19,127,818 759,405 22,714,706
Net Assets:
Invested in capital assets,
net of related debt 32,337,402 39,002,380 3,519,362 74,859,144
Restricted for:
Capital projects - - - -
Debt service 1,581,690 1,905,327 - 3,487,017
Unrestricted 2,688,775 (511,667) 496,551 2,673,659
TOTAL NET ASSETS 36,607,867$ 40,396,040$ 4,015,913$ 81,019,820$
See accompanying notes to the basic financial statements
-51-
NET ASSETS
LIABILITIES
Exhibit 19
Charges for
Authorities: Expenses Services
Business-type activities:
Paducah Water Works 7,036,580$ 7,589,839$ -$ 1,728,126$
Paducah Power System 51,961,317 54,267,380 - -
Paducah Transit Authority 6,643,730 3,768,194 2,159,614 693,218
TOTAL COMPONENT UNITS 65,641,627$ 65,625,413$ 2,159,614$ 2,421,344$
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, 2007
NET ASSETS, JUNE 30, 2008
See accompanying notes to the basic financial statements
Operating
Grants and
Contributions
Capital
-52-
CITY OF PADUCAH, KENTUCKY
STATEMENT OF ACTIVITIES
COMPONENT UNITS
FOR THE YEAR ENDED JUNE 30, 2008
Grants and
Contributions
Program Revenues
FUNCTIONS/PROGRAMS
Paducah Paducah Paducah
Water Power Transit
Works System Authority Totals
2,281,385$ -$ -$ 2,281,385$
- 2,306,063 - 2,306,063
- - (22,704) (22,704)
2,281,385 2,306,063 (22,704) 4,564,744
126,229 216,270 12,519 355,018
- - 6,590 6,590
109,773 46,072 43,706 199,551
236,002 262,342 62,815 561,159
2,517,387 2,568,405 40,111 5,125,903
34,090,480 37,827,635 3,975,802 75,893,917
36,607,867$ 40,396,040$ 4,015,913$ 81,019,820$
Net (Expense) Revenue and Changes in Net Assets
-53-
CITY OF PADUCAH, KENTUCKY
NOTES TO THE FINANCIAL STATEMENTS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2008
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
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)
-54-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
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)
-55-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
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.
Debt Service Fund – To account for the accumulation of resources and payment of bond and note
principal and interest, and capital lease activity.
The City has presented the following major proprietary fund:
Solid Waste Fund – To account for the provision of refuse services to the residents of the City.
Additionally, the City reports the internal service funds which are used to account for the fleet
management services, self funded property and casualty self insurance and self funded health and
disability insurance provided to departments of the city.
(Continued)
-56-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
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)
-57-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
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/unearned revenue
The City reports unearned revenue on its government-wide statement of net assets and deferred revenue on
the fund financial statements. Deferred/unearned revenues arise when potential revenue does not meet both
the “measurable” and “available” criteria for recognition in the current period. Deferred/unearned
revenues also arise when resources are received by the City before it has a legal claim to them, as when
grant monies are received prior to the incurrence of qualifying expenditures. In subsequent periods, when
both revenue recognition criteria are met, or when the City has a legal claim to the resources, the liability
for deferred/unearned revenue is removed and revenue is recognized.
Allocation of Indirect Expenses
The City allocates indirect expenses primarily comprised of fleet management services and various self
funded insurance coverage provided to departments and employees of the city not directly allocated.
Allocations are charged to functions based on use by weighted-average methodology.
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)
-58-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
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, 2008.
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)
-59-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
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. Inventory consists of expendable supplies of
$76,260 held for consumption and real property of $1,208,748 held for urban development.
Capital Assets
The accounting treatment of property, plant, and equipment (capital assets) depends on whether the assets
are used in governmental fund operations or proprietary fund operations and whether they are reported in
the government-wide or fund financial statements.
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)
-60-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
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. Qualified participants in the County Employee’s
Retirement System, under certain circumstances, are eligible to convert accrued sick pay benefits into
additional credit for years of service upon retirement
Long-Term Debt
The accounting treatment of long-term debt depends on whether the assets are used in governmental fund
operations or proprietary fund operations and whether they are reported in the government-wide or fund
financial statements.
All long-term debt to be repaid from governmental and business-type resources is reported as liabilities in
the government-wide statements. The long-term debt consists primarily of bonds payable, notes payable
and accrued compensated absences.
Long-term debt for governmental funds is not reported as liabilities in the fund financial statements. The
debt proceeds are reported as other financing sources and payment of principal and interest as
expenditures. The accounting for proprietary funds is the same in the fund statements as it is in the
government-wide statements.
(Continued)
-61-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
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)
-62-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
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)
-63-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
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, Neighborhood and
Capital Development
For the year ended June 30, 2008, 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, 2008, 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, 2008, are as follows:
Description Date
Assessment and enforceable lien January 1, 2007
Levy September 25, 2007
Face value amount payment dates 1
st half by November 1, 2007
2ndhalf by February 1, 2008
Delinquent date - 10% penalty
plus 1/2% per month 1
st half - November 30, 2007
2nd half - February 28, 2008
(Continued)
-64-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
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, 2008, 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 $5,805,473 and
$7,013,753, respectively.
Investments
As of June 30, 2008, 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) $ 9,700,072 NA $7,400,072 $2,300,000 $ - $ -
Component Units
Money Market Funds 945,133 AAA 945,133 - - -
Certificates of Deposits 960,194 NA 960,194 - - -
1,905,327
Total Primary Government
And Component Units $ 11,605,399
Fiduciary and Private
Purpose Trust Funds
Money Market Funds $ 113,296 AAA $ 113,296 $ - $ - $ -
Certificates of Deposits (3) 240,000 NA 240,000 - - -
Common Stock 3,828,565 NA NA NA NA NA
Corporate Bonds 906,664 AAA/A- - 402,402 504,262 -
U.S. Agencies (4) 2,552,301 AAA - 1,742,848 809,454 -
Mortgage Backed Securities 306 AAA/AA- 114,341 851,237 2,795,694 -
Mutual Funds
Equity 691,600 NA NA NA NA NA
Bond 260,539 AAA
Fixed 911,422 NA NA NA NA NA
Index 3,766,072 NA NA NA NA NA
Total Fiduciary and Private
Purpose Trust Funds $ 13,270,764
(Continued)
-65-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
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 $198,688 of securities callable as of 6/30/08.
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)
-66-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
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)
-67-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
Note 3 - Detail Notes on Transaction Classes/Accounts:
Capital Assets
Capital asset activity for the year ended June 30, 2008, was as follows:
Primary Government
Balance
July 1, 2007
Additions
Deductions
Balance
June 30, 2008
Capital assets, not being depreciated:
Land $ 6,518,216 $ 10,000 $ 291,642 $ 6,236,574
Construction in Progress 802,177 2,762,700 1,053,527 2,511,350
Total capital assets, not being
depreciated:
7,320,393
2,772,700
1,345,169
8,747,924
Capital assets, being depreciated:
Land improvements 2,674,542 387,430 - 3,061,972
Building and improvements 18,344,860 68,489 3,392,889 15,020,460
Infrastructure 34,563,802 18,746 - 34,582,548
Equipment 7,796,576 678,789 791,152 7,684,213
Furnishings and fixtures 241,855 2,574 14,117 230,312
Vehicles 7,368,279 667,139 599,833 7,435,585
Totals at historical cost 70,989,914 1,823,167 4,797,991 68,015,090
Less: Accumulated depreciation
Land improvements 1,068,521 84,031 - 1,152,552
Buildings and improvements 11,149,001 279,806 302,573 11,126,234
Infrastructure 15,387,853 2,171,047 - 17,558,900
Equipment 6,323,574 563,911 791,152 6,096,333
Furnishings and fixtures 236,010 1,289 14,117 223,182
Vehicles 5,570,018 504,259 591,722 5,482,555
Total accumulated depreciation 39,734,977 3,604,343 1,699,564 41,639,756
Total capital assets, being depreciated,
net:
$31,254,937
$ (1,781,176)
$ 3,098,427
$ 26,375,334
Primary Government Activities
Capital Assets – Net
$38,575,330
$ 991,524
$ 4,443,596
$ 35,123,258
Business-type Activities:
Balance
July 1, 2007
Additions
Deductions
Balance
June 30, 2008
Capital assets, not being depreciated:
Land $ 65,908 $ - $ - $ 65,908
(Continued)
-68-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
Note 3 - Detail Notes on Transaction Classes/Accounts:
Business-type Activities:
Balance
July 1, 2007
Additions
Deductions
Balance
June 30, 2008
Capital assets, being depreciated:
Building and improvements 429,254 - - 429,254
Equipment 2,151,142 376,567 1,249,468 1,278,241
Vehicles 2,627,298 429,771 336,579 2,720,490
Totals at historical cost 5,207,694 806,338 1,586,047 4,427,985
Less: Accumulated depreciation
Buildings and improvements 175,584 13,378 - 188,962
Equipment 2,095,799 61,991 1,222,725 935,065
Vehicles 1,510,696 279,929 284,734 1,505,891
Total accumulated depreciation 3,782,079 355,298 1,507,459 2,629,918
Total capital assets, being depreciated,
net:
$ 1,425,615
$ 451,040
$ 78,588
$ 1,798,067
Business - Type Activities
Capital Assets – Net
$ 1,491,523
$ 451,040
$ 78,588
$ 1,863,975
Depreciation expense was charged to governmental activities as follows:
General government:
General administration $ 142,059
Finance 2,332
Planning 4,000
Inspections 528
Personnel 1,119
Information systems -
Fleet maintenance 8,842
Total general government 158,880
Public safety:
Police 115,282
Fire 35,983
Grants 111,945
Emergency 911 83,138
Court awards 12,163
Fleet Lease Trust 496,657
Total public safety 855,168
Public service:
Public works 89,701
Engineering 203,156
Total public service 292,857
(Continued)
-69-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
Note 3 - Detail Notes on Transaction Classes/Accounts:
Parks and recreation $ 124,520
Planning and development:
Infrastructure 2,171,047
Grants 1,871
Total planning and development 2,172,918
Total Depreciation Expense –
Governmental Activities
$ 3,604,343
Depreciation expense was charged to business-type activities as follows:
Solid Waste Fund $ 321,949
Section Eight Housing 3,897
Civic Center 11,254
TISA Fund 18,198
Total Depreciation Expense –
Business-Type Activities
$ 355,298
Discretely Presented
Component Units:
Balance
July 1, 2007
Additions
Deductions
Balance
June 30, 2008
Capital assets, not being depreciated:
Land $ 1,892,083 $ 300 $ - $ 1,892,383
Construction in Progress 1,625,282 294,971 1,106,899 813,354
Total capital assets, not being
depreciated:
3,517,365
295,271
1,106,899
2,705,737
Capital assets, being depreciated:
Building and improvements 1,672,826 - - 1,672,826
Equipment 5,220,082 702,224 172,438 5,749,868
Utility Plant 129,163,383 9,078,324 2,244,593 135,997,114
Totals capital assets, being
depreciated:
136,056,291
9,780,548
2,417,031
143,419,808
Less: Accumulated depreciation:
Buildings and improvements 540,304 107,385 - 647,689
Equipment 2,619,859 828,331 166,877 3,281,313
Utility plant 53,985,076 3,945,773 2,278,011 55,652,838
Total accumulated depreciation
57,145,239
4,881,489
2,444,888
59,581,840
Total capital assets, being depreciated,
net:
78,911,052
4,899,059
(27,857)
83,837,968
Component Units
Capital Assets – Net
$82,428,417
$ 5,194,330
$ 1,079,042
$ 86,543,705
(Continued)
-70-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
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 $ 1,261,618
Paducah Power System 2,684,155
Paducah Transit Authority 935,716
TOTAL DEPRECIATION EXPENSE BY ACTIVITY $ 4,881,489
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, 2008, the governmental long-term debt consisted of the following:
General obligation bonds:
Current portion $ 655,000
Noncurrent portion 17,025,000
TOTAL GENERAL OBLIGATION
BOND COSTS $17,680,000
Note payable:
Current portion $ 273,653
Noncurrent portion 2,672,650
TOTAL NOTE PAYABLE PAYMENTS $ 2,946,303
Accrued compensated absences:
Current portion $ 996,072
Noncurrent portion 809,821
TOTAL ACCRUED COMPENSATED
ABSENCES $ 1,805,893
(Continued)
-71-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
Note 3 - Detail Notes on Transaction Classes/Accounts:
Business-type Activities
As of June 30, 2008, the long-term debt payable from proprietary fund resources consisted of the
following:
Accrued compensated absences:
Current portion $ 74,088
Noncurrent portion 15,762
TOTAL ACCRUED COMPENSATED
ABSENCES $ 89,850
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
sale-lease 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)
-72-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
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)
-73-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
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, 2008:
Amounts
Beginning Ending Due within
Type of Debt: Balance Additions Reductions Balance One Year
Governmental activities:
General obligation bonds:
Convention and Arts Center $ 7,870,000 $ - $ 270,000 $ 7,600,000 $ 280,000
Infiniti Media Building 4,515,000 - 175,000 4,340,000 180,000
Pension 5,925,000 - 185,000 5,740,000 195,000
Notes payable:
Kentucky League of Cities 2,968,856 - 145,886 2,822,970 150,319
Kentucky Association of
Counties 105,000 - 105,000 - -
Jones Agreement 246,666 - 123,333 123,333 123,333
Accrued compensated
absences 1,938,958 1,156,913 1,289,978 1,805,893 996,072
TOTAL GENERAL LONG-
TERM DEBT $23,569,480 $1,156,913 $2,375,482 $ 22,432,196 $ 1,924,724
Business-type activities:
Accrued compensated
absences $ 76,663 $ 150,128 $ 136,941 $ 89,850 $ 74,088
(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 19.75% of the outstanding 2001 general obligation bonds -
$1,500,961 net of the portion on behalf of the County ($750,480); 100% of the outstanding Kentucky
League of Cities’ note payable - $2,822,969; less unamortized bond costs - ($216,974).
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, 2008, are as follows:
Year Ending
June 30 Principal Interest
2009 $ 928,653 $ 964,002
2010 834,886 922,091
2011 874,592 886,363
2012 919,441 848,361
2013 954,437 807,990
2014-2018 5,542,600 3,346,482
2019-2023 7,017,337 1,915,586
2024-2026 3,554,357 315,946
TOTALS $ 20,626,303 $ 10,006,821
(Continued)
-74-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
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, 2008, are as
follows:
Governmental
Activities
Business-type
Activities
Accrued sick leave $ 657,468 $ 17,115
Accrued vacation leave 1,020,092 66,350
Applicable payroll taxes 128,333 6,385
Totals 1,805,893 89,850
Less current portion 996,072 74,088
LONG-TERM PORTION $ 809,821 $ 15,762
Termination Benefits
Seven employees, through employment contracts, are entitled to certain termination benefits upon
involuntary termination of employment by the City Commission. These benefits include provision for
salary payments for three to six months, as well as, certain health, life, dental, and disability insurance
coverage for same period of time. As these benefits are only provided for involuntary termination of
employment, no provision has been made for these benefits. The City funds these benefits on a pay-as-
you-go basis in the period incurred. For the year ended June 30, 2008, no payments were made for
termination benefits.
In addition, qualified participants in the County Employee’s Retirement System (CERS), under certain
circumstances are eligible to convert accrued sick pay benefits into additional credit for years of service
upon retirement. Costs and notification of payment for these benefits are not calculated by the CERS
actuary until a qualified participant submits application for retirement benefits. Accordingly, no provision
has been made for these benefits and the City funds these benefits in the period of notification for payment
by the CERS. For the year ended June 30, 2008, payments of $29,213 were made for these benefits.
Landfill Closure and Post-Closure Costs
The County of McCracken, Kentucky (County) closed the local landfill to the public on June 30, 1995.
The County must comply with established state and federal landfill closure procedures and must perform
maintenance and monitoring procedures at the site for thirty years after closure. The 30-year period will
begin upon approval from the Commonwealth of Kentucky regarding the environmental condition of the
landfill site. As of June 30, 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.
(Continued)
-75-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
Note 3 - Detail Notes on Transaction Classes/Accounts:
Interfund Transactions and Balances
Interfund transfers during the year ended June 30, 2008, were as follows:
Governmental Funds:
Interfund
Transfers In
Interfund
Transfers Out
General Fund $ 141,763 $ 3,331,682
Capital Project Fund 3,989,328 325,564
Special Revenue Investment Fund 203,916 3,323,995
Debt Service Fund 948,392 -
Nonmajor Governmental Funds 958,486 91,276
Internal Service Funds 731,700 9,854
Fiduciary Funds:
Other trusts 150 2,237
Proprietary Funds:
Solid Waste Fund - 5,736
Nonmajor Proprietary Funds 112,099 15,490
TOTALS $ 7,085,834 $ 7,085,834
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, 2008:
Due From Due To
General Fund $ 907,782 $ 985,860
General Capital Improvements Fund 6,900 -
Special Revenue Investment Fund 985,860 6,900
Nonmajor Proprietary Funds - 47,647
Internal Service Funds - 860,135
Fiduciary Funds - -
TOTALS $1,900,542 $1,900,542
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:
(Continued)
-76-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
Note 4 - Pension Plans - City of Paducah:
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.
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, 2008 June 30, 2007 June 30, 2006
Beginning NPO balance $ (5,552,551) $ (5,425,468) $ -
ARC 12,887 46,948 719,348
Interest on NPO (444,204) (420,474) -
Unfunded ARC adjustment 481,626 455,664 -
Pension cost 50,309 82,138 719,348
Less actual contribution 44,498 209,221 6,144,816
Net change in NPO 5,811 (127,083) (5,425,468)
ENDING NPO BALANCE $ (5,546,740) $ (5,552,551) $ (5,425,468)
PERCENTAGE OF PENSION
COST CONTRIBUTED 88% 255% 854%
(Continued)
-77-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
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, 2008
Assets:
Cash and cash equivalents $ 13,164
Receivables 58,667
Investment at fair value 12,025,977
Total assets 12,097,808
Liabilities:
Voucher and accounts payable 754
Net Assets:
Held in trust for pension benefits and
other purposes $ 12,097,054
Statement of Changes in Net Assets
Police and Firefighters’ Retirement Fund
For the Year Ended June 30, 2008
Additions:
Employer contributions $ 44,498
Plan members’ contributions 10,318
Total contributions 54,816
Investment earnings:
Net decrease in fair value of investments (938,045)
Interest and dividends 409,597
Net investment earnings (528,448)
Total additions (473,632)
Deductions:
Benefits 1,837,688
Administrative expenses 61,642
Total deductions 1,899,330
Change in net assets (2,372,962)
Net assets, July 1, 2007 14,470,016
NET ASSETS, JUNE 30, 2008 $ 12,097,054
(Continued)
-78-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
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, 2008. 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, 2008 June 30, 2007 June 30, 2006
Beginning NPO balance $(287,297) $(287,297) $(246,269)
ARC 8,925 13,883 17,182
Interest on NPO (16,730) (17,238) (14,776)
Unfunded ARC adjustment 35,739 36,825 31,566
Pension cost 27,934 33,470 33,972
Less actual contribution - 25,000 75,000
Net change in NPO 27,934 8,470 (41,028)
ENDING NPO BALANCE $(250,893) $(278,827) $(287,297)
PERCENTAGE OF PENSION
COST CONTRIBUTED 0% 75% 221%
The financial statements for the Appointive Employees’ Pension Fund are as follows:
Statement of Fiduciary Net Assets
Appointive Employees’ Pension Fund
June 30, 2008
Assets:
Cash and cash equivalents $ 29,300
Receivables 2,365
Prepaid expenses 275
Investment at fair value 240,000
Total assets 271,940
Liabilities:
Voucher and accounts payable 239
Net Assets:
Held in trust for pension benefits and
other purposes $ 271,701
(Continued)
-79-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
Note 4 - Pension Plans - City of Paducah:
Statement of Changes in Net Assets
Appointive Employees’ Pension Fund
For the Year Ended June 30, 2008
Additions:
Interest and dividends $ 12,202
Employer contributions -
Total additions 12,202
Deductions:
Benefits 48,866
Administrative expenses 9,210
Total deductions 58,076
Change in net assets (45,874)
Net assets, July 1, 2007 317,575
NET ASSETS, JUNE 30, 2008 $ 271,701
Contribution Information
A summary of actuarial assumptions at June 30, 2008, the date of the latest actuarial valuation is as
follows:
PFPF AEPF
Valuation date 7/1/08 7/1/08
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)
-80-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
Note 4 - Pension Plans - City of Paducah:
Membership Information
Membership of each plan consisted of the following at June 30, 2008:
PFPF AEPF
Active participants 1 -
Beneficiaries 39 4
Retired participants 47 3
TOTAL PARTICIPANTS 87 7
Cost-Sharing Multiple-Employer Defined Benefit Plan
County Employees’ Retirement System
Plan Description: The City is a participant in the County Employees Retirement System (CERS), a
cost sharing, multi-employer public employee retirement system. CERS provides retirement, disability,
and death benefits to plan members. Retirement benefits may be extended to beneficiaries of plan
members under certain circumstances. Cost-of-living adjustments are provided at the discretion of the
State legislature. Under the provisions of Kentucky Revised Statute 61.645, the Board of Trustees of
Kentucky Retirement Systems administers the CERS. Kentucky Retirement Systems issues a publicly
available financial report that includes financial statements and required supplementary information for
CERS. That report may be obtained by writing to Kentucky Retirement Systems, Perimeter Park West,
1260 Louisville Road, Frankfort, Kentucky 40601-6124 or by calling 1-502-564-4646.
Funding Policy: Hazardous position employees are required to contribute 8% to the plan and
nonhazardous position employees are required to contribute 5% of their creditable compensation by
State statute. 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, 2008, 2007 and 2006, the City contributed
33.87%, 28.21%, and 25.01%, respectively, of each hazardous employee’s creditable compensation and
16.17%, 13.19%, and 10.98%, 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, 2008, 2007 and 2006, were $4,533,944,
$3,849,611, and $3,460,797, 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, 2008.
Note 6 - Component Unit Long-Term Debt:
Long-term debt of the discretely presented component units consists of the following at June 30, 2008:
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)
-81-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
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 4.40% to 4.45%:
Total
Debt
Fiscal Year Principal Interest Service
2009 1,030,000 45,835 1,075,835
Less deferred debit arising
from advanced refunding (59,210) - (59,210)
TOTALS $ 970,790 $ 45,835 $1,016,625
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 3.59% 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
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 $ 140,000 $ 21,579 $ 870 $162,449
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)
-82-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
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
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 470,000 106,465 576,465
2014-2018 2,080,000 224,515 2,304,515
TOTALS $4,250,000 $ 931,943 $5,181,943
Bonds payable totaling $4,142,084 are recorded net of $107,916 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 $ - 94,200 94,200
2009 6,000,000 94,200 6,094,200
TOTALS $ 6,000000 $ 188,400 $6,188,400
(Continued)
-83-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
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
2009 $ 73,877 11,640 85,517
2010 79,912 8,414 88,326
2011 84,185 4,852 89,037
2012 37,078 3,295 40,373
2013 38,210 1,882 40,092
2014 26,119 450 26,569
TOTALS $ 339,381 $ 30,533 $ 369,914
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, 2008, the significant construction commitments were as follows:
Cumulative
Costs Incurred
Estimated Costs
Floodwall Survey Modification $ 67,255 $ 186,700
Floodwall Pipe Rehabilitation 80,960 163,800
Oliver Church Road Improvement Project 171,515 218,500
Riverfront Development – Phase I 452,549 579,840
Riverfront – Ohio River Boat Launch Project 207,265 230,075
$ 979,544 $1,378,915
(Continued)
-84-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
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
2005 - 2006 $ - 23,829 23,829 $ -
2006 - 2007 - 57,168 57,168 -
2007 - 2008 - 69,572 69,572 -
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 $106,364 at June 30, 2008.
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
2005 - 2006 $ 413,000 2,853,645 2,812,645 $ 454,000
2006 - 2007 454,000 2,601,505 2,669,179 386,326
2007 - 2008 386,326 2,726,811 3,006,773 106,364
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)
-85-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
Note 9 - Lease Agreements:
Operating Leases:
The City is leasing land and building to the Luther F. Carson Four Rivers Center for the Performing Arts
(Center) for a primary term of 99 years. No rental revenue is being collected from this lease. The rental
for the primary term of the lease is the construction of the performing arts center. The building is the
property of the City, however, for financial reporting; the building is reported with the Luther F. Carson
Four Rivers Center financial records. In December, 2003, with the authorization of the City, the Center
secured financing of $6.5 million subject to a mortgage against the leasehold and real property on which
the performing arts center is located. The City also consented to an assignment of the lease as security for
the loan.
The City also leases certain other property to various lessees under non-cancelable agreements that have
various expiration dates through June 30, 2011. Rental revenue received from leased property during 2008
totaled $434,185.
The following is an analysis of property leased under these leases at June 30, 2008:
Land $ 270,000
Buildings 873,250
Equipment 110,126
Total 1,253,376
Less: accumulated depreciation 754,965
NET BOOK VALUE $ 498,411
Depreciation expense for the year ended June 30, 2008, on leased property was $20,775.
The following is a schedule of future minimum rental income from operating leases at June 30, 2008:
Lease
Income
2009 $ 437,943
2010 437,943
2011 268,519
TOTAL MINIMUM LEASE RECEIPTS $ 1,144,405
Direct Financing Lease:
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 was required during the first
three years of the lease term which resulted in a loss of $450,353. For the government-wide statement, the
loss is amortized over the life of the lease. Rental payments commenced on September 1, 2007, at a
monthly payment of $33,816 and end with the final payment due August 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 lease payments received coincide with debt service payments the City
is required to make on bonds maturing annually through year ending June 30, 2024.
(Continued)
-86-
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
Note 9 - Lease Agreements:
Direct Financing Lease:
Future minimum lease payments to be received under the lease agreement for the fiscal year ending June
30 are as follows:
Lease
Income
2009 $ 371,980
2010 405,796
2011 405,796
2012 405,796
2013 405,796
2014 through 2024 4,463,752
Net minimum lease payments 6,458,916
Less amount representing interest (2,306,610)
Present value of minimum lease payments $ 4,152,306
Note 10 – Restatement of Net Assets
During the year, the City converted its Section Eight Housing Fund from a governmental fund to a
proprietary fund, which is the preferred reporting by the US Department of Housing and Urban
Development. In addition, certain errors in the prior year were corrected during the current year, resulting
in the following change to net assets as of June 30, 2007:
Net Assets,
As Previously
Reported
Restatement
Net Assets
As Restated
Governmental Funds:
General Fund (1) $ 9,976,079 $ 265,471 $ 10,241,550
Proprietary Funds:
Solid Waste Fund (2) $ 821,214 $ 179,506 $ 1,000,720
Nonmajor Proprietary Funds (3) 1,156,304 13,800 1,170,104
Total Proprietary Funds $ 1,977,518 $ 193,306 $ 2,170,824
Government-Wide Statements:
Government Type Funds (4) $48,138,457 $ (618,446) $ 47,520,011
Business Type Funds (5) 1,344,237 922,302 2,266,539
Total $49,482,694 $ 303,856 $ 49,786,550
(1) Correction of overstatement of current accrued leave liability estimate.
(2) Correction of understatement of service receivables estimate due to a change of remittance method to
the City by their billing party.
(3) Conversion of Section Eight Housing Fund from modified accrual basis to accrual basis for capital
assets.
(4) Net effect of converting a governmental fund to a proprietary fund of ($728,996) and correction of
understatement of inventory of real property held for urban development of $110,550.
(5) Net effect of converting a governmental fund to a proprietary fund of $742,796 and correction of
understatement of service receivables of $179,506.
-87-
CITY OF PADUCAH, KENTUCKY
REQUIRED SUPPLEMENTARY INFORMATION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2008
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)
7/1/2006 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)
7/1/2008 12,097,054 14,076,843 1,979,789 85.9 56,475 3,505.60
Appointive Employees’ Pension Fund (AEPF) (Using Aggregate Actuarial Method)
7/1/2006 344,644 443,207 98,563 77.8 n/a* n/a*
7/1/2007 317,575 382,916 65,341 82.9 n/a* n/a*
7/1/2008 271,701 317,849 46,148 85.5 n/a* n/a*
*There are no active participants.
Schedules of Employer Contributions
PFPF
Year
Ended
June 30
Annual
Required
Contribution (ARC)
Percent
ARC
Contributed
Ending
Net Pension
Obligation (NPO)
2006 719,348 854 (5,425,468)
2007 46,948 446 (5,552,551)
2008 12,887 345 (5,546,740)
AEPF
Year
Ended
June 30
Annual
Required
Contribution (ARC)
Percent
ARC
Contributed
Ending
Net Pension
Obligation (NPO)
2006 17,182 437 (287,297)
2007 13,883 180 (278,827)
2008 8,925 280 (250,893)
-88-
CITY OF PADUCAH, KENTUCKY
SUPPLEMENTARY INFORMATION
NONMAJOR GOVERNMENTAL FUNDS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2008
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.
Exhibit B-1
Court Small
Awards Grant
Fund Fund
Cash and cash equivalents 302,106$ 285,375$ 72,514$ 233,382$
Investments - - 50,000 -
Receivables, net:
Accounts 56,948 132,290 - -
Grants - - - 19,200
Interest - - 31 -
TOTAL ASSETS 359,054$ 417,665$ 122,545$ 252,582$
Liabilities:
Voucher and accounts payable 194,242$ 11,212$ 85,911$ 90$
Accrued payroll and payroll taxes - 27,030 - -
Deferred revenues - - - 1,578
Total liabilities 194,242 38,242 85,911 1,668
Fund Balances:
Reserved for:
Program purposes - - - 250,914
Unreserved 164,812 379,423 36,634 -
Total fund balances 164,812 379,423 36,634 250,914
TOTAL LIABILITIES AND
FUND BALANCES 359,054$ 417,665$ 122,545$ 252,582$
See auditors report on pages 11-12.
-89-
Special Revenue Funds
FUND BALANCES
CITY OF PADUCAH, KENTUCKY
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2008
Municipal
LIABILITIES
AND
ASSETS
Emergency
Communication
Aid Program Service Fund
Home HUD
Grant Revolving
Fund Grant Fund
50,808$ 246,463$ -$ 1,190,648$
- - - 50,000
- - - 189,238
- - - 19,200
- - - 31
50,808$ 246,463$ -$ 1,449,117$
-$ 134$ -$ 291,589$
- - - 27,030
- - - 1,578
- 134 - 320,197
- 246,329 - 497,243
50,808 - - 631,677
50,808 246,329 - 1,128,920
50,808$ 246,463$ -$ 1,449,117$
Police
Funds
PHA
-90-
Special Revenue Funds
Total Nonmajor
Grant Fund
Governmental
Exhibit B-2
Court Small
Awards Grant
Revenues: Fund Fund
Taxes -$ 544,036$ -$ -$
Charges for services - 193,701 - -
Intergovernmental 920,612 - - -
Grants - - - 36,874
Interest 3,009 7,949 4,648 -
Miscellaneous - 276,410 58,398 277,605
Total revenues 923,621 1,022,096 63,046 314,479
Expenditures:
Current operations:
Public safety - 1,335,619 105,227 -
Public service 1,188,177 - - -
Planning and development - - - 94,159
Total expenditures 1,188,177 1,335,619 105,227 94,159
Excess (deficiency) of revenues
over expenditures (264,556) (313,523) (42,181) 220,320
Other Financing Sources (Uses):
Capital lease
Transfers in 509,056 316,824 - 21,000
Transfers out (82,976) - - -
Total other financing sources (uses) 426,080 316,824 - 21,000
Net change in fund balances 161,524 3,301 (42,181) 241,320
Fund balances, July 1, 2007 3,288 376,122 78,815 9,594
FUND BALANCES, JUNE 30, 2008 164,812$ 379,423$ 36,634$ 250,914$
See auditors report on pages 11-12.
-91-
Municipal
Emergency
Special Revenue Funds
Service FundAid Program
Communication
CITY OF PADUCAH, KENTUCKY
FOR THE YEAR ENDED JUNE 30, 2008
NONMAJOR GOVERNMENTAL FUNDS
AND CHANGES IN FUND BALANCES
COMBINING STATEMENT OF REVENUES, EXPENDITURES
Home HUD
Grant Revolving
Fund Grant Fund
-$ -$ -$ 544,036$
- - - 193,701
- - - 920,612
- - 2,987 39,861
- 8,216 - 23,822
- 502 - 612,915
- 8,718 2,987 2,334,947
- - 2,987 1,443,833
- - - 1,188,177
4,763 125,020 - 223,942
4,763 125,020 2,987 2,855,952
(4,763) (116,302) - (521,005)
-
11,607 100,000 - 958,487
- (8,300) - (91,276)
11,607 91,700 - 867,211
6,844 (24,602) - 346,206
43,964 270,931 - 782,714
50,808$ 246,329$ -$ 1,128,920$
Funds
Total Nonmajor
-92-
PHA
Police
Grant Fund
Special Revenue Funds
Governmental
Exhibit B-3
Variance with
Final Budget
Final Positive
Revenues: Budget Actual (Negative)
Intergovernmental 920,610$ 920,612$ 2$
Interest 3,000 3,009 9
Other - - -
Total revenues 923,610 923,621 11
Expenditures:
Public service 1,188,180 1,188,177 3
Excess (deficiency) of revenues over
expenditures (264,570) (264,556) 14
Other Financing Sources (Uses):
Operating transfers out (82,980) (82,976) 4
Net change in fund balance 161,505$ 161,524$ 19$
Fund balance, July 1, 2007 3,288
FUND BALANCE, JUNE 30, 2008 164,812$
See auditors report on pages 11-12.
-93-
FOR THE YEAR ENDED JUNE 30, 2008
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 544,035$ 544,036$ 1$
Telephone surcharges 193,700 193,701 1
Interest 7,945 7,949 4
Miscellaneous 276,410 276,410 -
Total revenues 1,022,090 1,022,096 6
Expenditures:
Public safety 1,335,620 1,335,619 1
Excess (deficiency) of revenues over
expenditures (313,530) (313,523) 7
Other Financing Sources (Uses):
Operating transfers in 316,820 316,824 4
Operating transfers out - - -
Net change in fund balance 3,290$ 3,301 11$
Fund balance, July 1, 2007 376,122
FUND BALANCE, JUNE 30, 2008 379,423$
See auditors report on pages 11-12.
-94-
FOR THE YEAR ENDED JUNE 30, 2008
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 58,395$ 58,398$ 3$
Interest 4,650 4,648 (2)
Total revenues 63,045 63,046 1
Expenditures:
Public safety 105,235 105,227 8
Excess (deficiency) of revenues over
expenditures (42,190)$ (42,181) 9$
Fund balance, July 1, 2007 78,815
FUND BALANCE, JUNE 30, 2008 36,634$
See auditors report on pages 11-12.
-95-
CITY OF PADUCAH, KENTUCKY
COURT AWARDS FUND
DETAIL SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2008
Exhibit B-6
Variance with
Final Budget
Final Positive
Revenues: Budget Actual (Negative)
Grants 36,870$ 36,874$ 4$
Other 277,600 277,605 5
Total revenues 314,470 314,479 9
Expenditures:
Planning and development 94,170 94,159 11
Excess (deficiency) of revenues over
expenditures 220,300 220,320 20
Other Financing Sources (Uses):
Operating transfers out - - -
Total other financing sources (uses) 21,000 21,000 -
Net change in fund balance 241,300$ 241,320 20$
Fund balance, July 1, 2007 9,594
FUND BALANCE, JUNE 30, 2008 250,914$
See auditors report on pages 11-12.
-96-
FOR THE YEAR ENDED JUNE 30, 2008
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)
Grants -$ -$ -$
Total revenues - - -
Expenditures:
Planning and development 4,765 4,763 2
Excess (deficiency) of revenues over
expenditures (4,765) (4,763) 2
Other Financing Sources (Uses):
Operating transfers in 11,610 11,607 (3)
Total other financing sources (uses) 11,610 11,607 (3)
Net change in fund balance 6,845$ 6,844 (1)$
Fund balance, July 1, 2007 43,964
FUND BALANCE, JUNE 30, 2008 50,808$
See auditors report on pages 11-12.
-97-
FOR THE YEAR ENDED JUNE 30, 2008
CITY OF PADUCAH, KENTUCKY
HOME 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)
Interest 8,215$ 8,216$ 1$
Other 500 502 2
Total revenues 8,715 8,718 3
Expenditures:
Planning and development 125,025 125,020 5
Excess (deficiency) of revenues over
expenditures (116,310) (116,302) 8
Other Financing Sources (Uses):
Operating transfers in 100,000 100,000 -
Operating transfers out (8,300) (8,300) -
Total other financing sources (uses) 91,700 91,700 -
Net change in fund balance (24,610)$ (24,602) 8$
Fund balance, July 1, 2007 270,931
FUND BALANCE, JUNE 30, 2008 246,329$
See auditors report on pages 11-12.
-98-
FOR THE YEAR ENDED JUNE 30, 2008
CITY OF PADUCAH, KENTUCKY
HUD REVOLVING 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)
Grants 2,990$ 2,987$ (3)$
Expenditures:
Public safety 3,025 2,987 38
Excess (deficiency) of revenues over
expenditures (35)$ - 35$
Fund balance, July 1, 2007 -
FUND BALANCE, JUNE 30, 2008 -$
See auditors report on pages 11-12.
-99-
FOR THE YEAR ENDED JUNE 30, 2008
CITY OF PADUCAH, KENTUCKY
PADUCAH HOUSING AUTHORITY POLICE GRANT 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, 2008
COMBINING FINANCIAL STATEMENTS
NONMAJOR PROPRIETARY FUNDS
Section Eight Housing Fund – to account for the housing choice voucher program grant governed
by the United States Department of Housing and Urban Development.
Civic Center Fund – to account for the operation of the Civic Center.
TISA Fund – to account for revenues and expenses associated with the operation of the Paducah-
McCracken County telecommunications and information systems.
Exhibit C-1
Civic
Center TISA
Current Assets: Fund Fund
Cash and cash equivalents 674,422$ 3,981$ 201,229$ 879,632$
Receivables, net 9,634 - 6,579 16,213
Prepaid expense - - 18,335 18,335
Total current assets 684,056 3,981 226,143 914,180
Noncurrent Assets:
Net depreciable capital assets 9,903 211,510 35,822 257,235
Total assets 693,959 215,491 261,965 1,171,415
Current Liabilities:
Voucher and accounts payable 49,339 4,568 4,225 58,132
Accrued compensated absences 1,751 - - 1,751
Due to other funds 47,647 - - 47,647
Total current liabilities 98,737 4,568 4,225 107,530
Noncurrent Liabilities:
Accrued compensated absences 15,762 - - 15,762
Total liabilities 114,499 4,568 4,225 123,292
Invested in capital assets 9,903 211,510 35,822 257,235
Unrestricted 569,557 (587) 221,918 790,888
TOTAL NET ASSETS 579,460$ 210,923$ 257,740$ 1,048,123$
See auditors report on pages 11-12.
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF NET ASSETS
NONMAJOR PROPRIETARY FUNDS
JUNE 30, 2008
ASSETS
LIABILITIES
NET ASSETS
-100-
Total Nonmajor
Enterprise
Funds
Section
Eight
Housing
Exhibit C-2
Civic
Center TISA
Operating Revenues: Fund Fund
Charges for services 1,784,241$ 32,932$ 143,727$ 1,960,900$
Miscellaneous 1,568 - 106 1,674
Total operating income 1,785,809 32,932 143,833 1,962,574
Operating Expenses:
Cost of sales and service 1,946,002 73,654 138,192 2,157,848
Depreciation and amortization 3,897 11,254 18,198 33,349
Total operating expenses 1,949,899 84,908 156,390 2,191,197
Operating income (loss) (164,090) (51,976) (12,557) (228,623)
Non-Operating Revenues (Expenses):
Interest and investment income 753 (200) - 553
Income (loss) before contributions and
transfers (163,337) (52,176) (12,557) (228,070)
Contributions and Operating Transfers:
Capital contributions - - 9,480 9,480
Transfers in - 39,335 72,764 112,099
Transfers out - - (15,490) (15,490)
Total contributions and operating transfers - 39,335 66,754 106,089
Change in net assets (163,337) (12,841) 54,197 (121,981)
Net assets, July 1, 2007, as previously reported 728,997 223,764 203,543 1,156,304
Adjustment to beginning net assets (See Note 10) 13,800 - - 13,800
NET ASSETS, JUNE 30, 2008 579,460$ 210,923$ 257,740$ 1,048,123$
See auditors report on pages 11-12.
COMBINING STATEMENT OF REVENUES, EXPENSES
CITY OF PADUCAH, KENTUCKY
Total Nonmajor
Enterprise
-101-
FOR THE YEAR ENDED JUNE 30, 2008
NONMAJOR PROPRIETARY FUNDS
AND CHANGES IN FUND NET ASSETS
Funds
Section
Eight
Housing
Exhibit C-3
Civic
Center TISA
Cash Flows from Operating Activities: Fund Fund
Cash received from customers 1,776,175$ 33,520$ 208,912$ 2,018,607$
Payments to employees (128,521) - - (128,521)
Payments to internal service funds - (1,976) (2,822) (4,798)
Other receipts (payments) (1,833,445) (67,319) (147,197) (2,047,961)
Net cash provided (used) by operating activities (185,791) (35,775) 58,893 (162,673)
Cash Flows from Noncapital
Financing Activities:
Transfers (to) from other funds - 39,335 57,274 96,609
Cash Flows from Capital and Related
Financing Activities:
Capital contributions - - 9,480 9,480
Acquisition and construction
of capital assets - - (14,967) (14,967)
Net cash used by capital and
related financing activities - - (5,487) (5,487)
Cash Flows from Investing Activities:
Interest on cash and investments 753 (200) - 553
Net increase (decrease) in cash and cash
equivalents (185,038) 3,360 110,680 (70,998)
Cash and cash equivalents, July 1, 2007 859,460 621 90,549 950,630
CASH AND CASH EQUIVALENTS,
JUNE 30, 2008 674,422$ 3,981$ 201,229$ 879,632$
Reconciliation of Operating Income (Loss) to
Net Cash Provided by Operating Activities:
Operating income (loss) (164,090)$ (51,975)$ (12,556)$ (228,621)$
Adjustments to reconcile operating income (loss)
to net cash provided by operating activities:
Depreciation and amortization 3,897 11,254 18,198 33,349
Change in assets and liabilities:
Receivables (9,634) 588 65,079 56,033
Prepaid expense - - (3,244) (3,244)
Accounts payable and accrued expenses (15,964) 4,358 (8,584) (20,190)
NET CASH PROVIDED (USED) BY
See auditors report on pages 11-12.
Funds
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF CASH FLOWS
NONMAJOR PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2008
-102-
Section
Eight
Housing
Total Nonmajor
Enterprise
CITY OF PADUCAH, KENTUCKY
SUPPLEMENTARY INFORMATION
INTERNAL SERVICE FUNDS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2008
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 143,253$ 84,411$ 3$ 64,642$ 292,309$
Investments - 3,180,000 - - 3,180,000
Receivables, net - 84,351 - 14,081 98,432
Prepaid expense - - 968,823 274,221 1,243,044
Inventories 76,260 - - - 76,260
Total current assets 219,513 3,348,762 968,826 352,944 4,890,045
Noncurrent Assets:
Net depreciable capital assets 41,399 1,938,533 - - 1,979,932
Total assets 260,912 5,287,295 968,826 352,944 6,869,977
Current Liabilities:
Voucher and accounts payable 5,361 21,589 4,379 113,431 144,760
Accrued payroll and payroll taxes 7,487 - - - 7,487
Accrued compensated absences 14,281 - - - 14,281
Deferred revenue - - - 14,698 14,698
Due to other funds - - 860,135 - 860,135
Total current liabilities 27,129 21,589 864,514 128,129 1,041,361
Invested in capital assets, net
of related debt 41,399 1,938,533 - - 1,979,932
Unrestricted 192,384 3,327,173 104,312 224,815 3,848,684
TOTAL NET ASSETS 233,783$ 5,265,706$ 104,312$ 224,815$ 5,828,616$
See auditors report on pages 11-12.
-103-
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF NET ASSETS
INTERNAL SERVICE FUNDS
JUNE 30, 2008
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 588,953$ 765,039$ 1,174,636$ 3,037,890$ 5,566,518$
Charges for services - external - - - 415,605 415,605
Total operating revenues 588,953 765,039 1,174,636 3,453,495 5,982,123
Operating Expenses:
Vehicle maintenance 457,992 - - - 457,992
Administrative - 6,850 - 64,680 71,530
Insurance - - 1,132,863 4,010,304 5,143,167
Leave expense 1,568 - - - 1,568
Depreciation 8,842 496,657 - - 505,499
Total operating expenses 468,402 503,507 1,132,863 4,074,984 6,179,756
Operating income (loss) 120,551 261,532 41,773 (621,489) (197,633)
Nonoperating Revenues and (Expenses):
Interest and investment income 384 121,134 - - 121,518
Gain (loss) on disposal of property
and equipment 7,711 111,489 - - 119,200
Total nonoperating revenues
(expenses) 8,095 232,623 - - 240,718
Income (loss) before transfers 128,646 494,155 41,773 (621,489) 43,085
Contributions and Transfers:
Transfers in 9,854 150,771 21,075 550,000 731,700
Transfers in - (9,854) - - (9,854)
Total contributions and operating transfers 9,854 140,917 21,075 550,000 721,846
Change in net assets 138,500 635,072 62,848 (71,489) 764,931
Net assets, July 1, 2007 95,283 4,630,634 41,464 296,304 5,063,685
NET ASSETS, JUNE 30, 2008 233,783$ 5,265,706$ 104,312$ 224,815$ 5,828,616$
See auditors report on pages 11-12.
-104-
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, 2008
Exhibit D-3
Health
Fleet Lease Insurance Insurance Combined
Cash Flows from Operating Activities: Trust Fund Fund Total
Receipts from other funds for services 588,953$ 765,039$ 1,174,636$ 3,468,649$ 5,997,277$
Payments to suppliers (210,698) - - - (210,698)
Payments to employees (240,101) - - - (240,101)
Claims paid - - - (4,560,255) (4,560,255)
Other receipts (payments) - 14,739 (1,210,613) (64,680) (1,260,554)
Net cash provided (used) by operating activities 138,154 779,778 (35,977) (1,156,286) (274,331)
Cash Flows from Noncapital Financing
Activities:
Transfers from other funds 9,854 140,917 21,075 550,000 721,846
Cash Flows from Capital and Related
Financing Activities:
Proceeds from sale of capital assets 7,711 129,452 - - 137,163
Purchase of capital assets (27,863) (667,139) - - (695,002)
Net cash used by capital and related financing (20,152) (537,687) - - (557,839)
Cash Flows from Investing Activities:
Proceeds from sales and maturities
of investments - 2,322,767 - - 2,322,767
Interest and dividends 384 92,564 - - 92,948
Purchase of investments - (3,180,000) - - (3,180,000)
Net cash used by investing activities 384 (764,669) - - (764,285)
Net increase (decrease) in cash
and cash equivalents 128,240 (381,661) (14,902) (606,286) (874,609)
Cash and cash equivalents, July 1, 2007 15,013 466,072 14,905 670,928 1,166,918
CASH AND CASH EQUIVALENTS,
JUNE 30, 2008 143,253$ 84,411$ 3$ 64,642$ 292,309$
Reconciliation of Operating Income (Loss) to
Net Cash Provided by Operating Activities:
Operating income (loss) 120,551$ 261,532$ 41,773$ (621,489)$ (197,633)$
Adjustments to reconcile operating
income (loss) to net cash provided
(used) by operating activities:
Change in assets and liabilities:
Receivables - - - 22,791 22,791
Prepaid expense - - 64,045 (259,971) (195,926)
Inventories 10,325 - - - 10,325
Accounts payable and accrued expenses (1,564) 21,589 (141,795) (297,617) (419,387)
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES 129,312$ 283,121$ (35,977)$ (1,156,286)$ (779,830)$
See auditors report on pages 11-12.
-105-
Fleet
Maintenance
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF CASH FLOWS
INTERNAL SERVICE FUNDS
FOR THE YEAR ENDED JUNE 30, 2008
CITY OF PADUCAH, KENTUCKY
SUPPLEMENTARY INFORMATION
FIDUCIARY FUNDS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2008
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 13,164$ 29,300$ 42,464$
Receivables:
Interest 58,667 2,365 61,032
Prepaid expenses - 275 275
Investments at fair value
Money market funds 109,562 - 109,562
Certificates of deposits - 240,000 240,000
Common stock 3,828,565 - 3,828,565
Corporate bonds 906,664 - 906,664
U.S. agencies bonds 2,552,301 - 2,552,301
Mortgage backed securities 306 - 306
Mutual funds 4,628,579 - 4,628,579
Total assets 12,097,808 271,940 12,369,748
Voucher and accounts payable 754 239 993
Held in trust for pension benefits and
other purposes 12,097,054$271,701$ 12,368,755$
See auditors report on pages 11-12.
AppointivePolice and
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF FIDUCIARY NET ASSETS
FIDUCIARY FUNDS - PENSION TRUST FUNDS
JUNE 30, 2008
ASSETS
LIABILITIES
NET ASSETS
-106-
Employees'
Retirement Fund Pension Fund
Firefighters'
Exhibit E-2
Additions:Totals
Contributions:
Employer 44,498$ -$ 44,498$
Plan members 10,318 - 10,318
Total contributions 54,816 - 54,816
Investment earnings:
Net decrease in fair value of investments (938,045) - (938,045)
Interest and dividends 409,597 12,202 421,799
Net investment earnings (528,448) 12,202 (516,246)
Total additions (473,632) 12,202 (461,430)
Deductions:
Benefits 1,837,688 48,866 1,886,554
Administrative expenses 61,642 9,210 70,852
Total deductions 1,899,330 58,076 1,957,406
Change in net assets (2,372,962) (45,874) (2,418,836)
Net assets, July 1, 2007 14,470,016 317,575 14,787,591
NET ASSETS, JUNE 30, 2008 12,097,054$ 271,701$ 12,368,755$
See auditors report on pages 11-12.
-107-
FIDUCIARY FUNDS - PENSION TRUST FUNDS
FOR THE YEAR ENDED JUNE 30, 2008
COMBINING STATEMENT OF CHANGES IN NET ASSETS
CITY OF PADUCAH, KENTUCKY
Police and Appointive
Retirement Fund Pension Fund
Employees'Firefighters'
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 -$ 7,009$ 7,009$
Investments at fair value
Money market funds 3,733 - 3,733
Mutual funds 1,001,054 - 1,001,054
Total assets 1,004,787 7,009 1,011,796
Accounts payable - 1,217 1,217
Held in trust for other purposes 1,004,787$ 5,792$ 1,010,579$
See auditors report on pages 11-12.
COMBINING STATEMENT OF NET ASSETS
CITY OF PADUCAH, KENTUCKY
Maintenance
and Rehab
Trust
-108-
ASSETS
LIABILITIES
NET ASSETS
JUNE 30, 2008
FIDUCIARY FUNDS - PRIVATE-PURPOSE TRUST FUNDS
Exhibit E-4
Other
Additions: Trusts Totals
Contributions:
Intergovernmental revenues 2,110$ 8,000$ 10,110$
Private donations 890,299 - 890,299
Total contributions 892,409 8,000 900,409
Investment earnings:
Net decrease in fair value of investments (44,014) - (44,014)
Interest and dividends 17,691 - 17,691
Net investment earnings (26,323) - (26,323)
Interfund transfers (2,087) - (2,087)
Total additions 863,999 8,000 871,999
Deductions:
Capital outlay 2,391 1,856 4,247
Administrative expenses 2,688 4,934 7,622
Total deductions 5,079 6,790 11,869
Change in net assets 858,920 1,210 860,130
Net assets, July 1, 2007 145,867 4,582 150,449
NET ASSETS, JUNE 30, 2008 1,004,787$ 5,792$ 1,010,579$
See auditors report on pages 11-12.
COMBINING STATEMENT OF CHANGES IN NET ASSETS
CITY OF PADUCAH, KENTUCKY
-109-
FOR THE YEAR ENDED JUNE 30, 2008
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 712,834$ 13,333,365$ 13,587,105$ 459,094$
Liabilities:
Payroll taxes and withholdings
payable 712,834$ 13,333,365$ 13,587,105$ 459,094$
See auditors report on pages 11-12.
CITY OF PADUCAH, KENTUCKY
AGENCY FUND
IN ASSETS AND LIABILITIES
STATEMENT OF CHANGES
-110-
FOR THE YEAR ENDED JUNE 30, 2008
Balance Balance
July 1, 2007 June 30, 2008
CITY OF PADUCAH, KENTUCKY
STATISTICAL SECTION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2008
STATISTICAL SECTION
Contents Page
Financial Trends 111-115
Revenue Capacity 116-121
Debt Capacity 122-126
Economic and Demographic Information 127-128
Operating Information 129-131
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.
2008 2007 2006 2005 (2) 2004 2003Governmental activities:Invested in Capital Assets, Net of Related Debt31,766,783$ 32,557,572$ 30,664,671$ 29,492,197$ 27,826,117$ 27,955,839$ Restricted for:Program purposes1,782,251 1,904,321 1,018,231 727,699 714,538 713,766 Capital projects5,028,420 4,618,923 2,689,804 940,323 4,031,802 3,583,589 Unrestricted9,432,763 9,057,641 7,718,198 7,419,037 (406,042) 1,571,120 Total governmental activities net assets48,010,217 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 Debt1,863,975 1,491,523 1,277,720 1,463,118 1,463,668 1,425,753 Restricted for:Program purposes579,460 - - - - - Unrestricted(19,965) (147,286) 132,090 (27,648) 1,979,494 1,565,100 Total business-type activities net assets 2,423,470 1,344,237 1,409,810 1,435,470 3,443,162 2,990,853 Primary government:Invested in Capital Assets, Net of Related Debt33,630,758 34,049,095 31,942,391 30,955,315 29,289,785 29,381,592 Restricted for:Program purposes2,361,711 1,904,321 1,018,231 727,699 714,538 713,766 Capital projects5,028,420 4,618,923 2,689,804 940,323 4,031,802 3,583,589 Unrestricted9,412,798 8,910,355 7,850,288 7,391,389 1,573,452 3,136,220 Total primary government net assets 50,433,687$ 49,482,694$ 43,500,714$ 40,014,726$ 35,609,577$ 36,815,167$ (1) 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.(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. -111-(accrual basis of accounting)TABLE 1NET ASSETS BY COMPONENTCITY OF PADUCAH, KENTUCKYLast Five Fiscal Years (1)Fiscal Year
Pages 1 of 22008 (3) 2007 2006 2005 (2) 2004 2003ExpensesGovernmental activities:General government 10,709,641$ 9,462,543$ 9,057,295$ 8,431,994$ 7,969,027$ 7,396,882$ Public safety 15,938,831 15,182,704 14,592,756 14,620,938 13,243,912 12,964,120 Public service 9,543,714 8,299,658 8,486,662 6,249,860 8,618,901 7,376,791 Parks and recreation 1,286,955 1,197,072 1,044,361 1,045,024 1,026,293 975,362 Planning and development 282,042 1,891,725 2,404,636 2,521,412 5,330,393 3,108,192 Interest on long-term debt 1,066,067 1,134,898 974,101 775,122 496,049 428,578 Total governmental activities expenses 38,827,250 37,168,600 36,559,811 33,644,350 36,684,575 32,249,925 Business-type activities:Solid Waste 4,086,747 4,079,684 3,893,013 3,683,954 3,419,464 3,359,731 Section Eight Housing 1,949,899 - - - - - Civic Center 84,908 54,562 45,894 39,008 33,181 46,509 TISA 156,388 267,192 269,781 170,264 184,166 123,719 Total business-type activities expenses 6,277,942 4,401,438 4,208,688 3,893,226 3,636,811 3,529,959 Total primary government expenses 45,105,192$ 41,570,038$ 40,768,499$ 37,537,576$ 40,321,386$ 35,779,884$ Program RevenuesGovernmental activities:Charges for services:General government 1,415,943 1,730,046$ 1,618,903$ 1,485,005$ 1,601,414$ 1,445,383$ Public safety 268,839 1,024,610 767,086 794,814 1,134,386 94,386 Public service 1,111,188 1,150,507 942,355 895,155 986,618 683,119 Parks and recreation 124,606 122,929 103,932 117,317 132,388 131,355 Planning and development 30,627 10,810 20,602 13,501 12,893 15,867 Operating grants and contributions 1,340,261 2,797,216 2,988,612 2,452,694 3,290,134 4,176,548 Capital grants and contributions 1,297,900 3,681,490 3,302,568 1,100,064 3,221,637 2,213,757 Total governmental activities program revenues 5,589,364 10,517,608 9,744,058 6,858,550 10,379,470 8,760,415 Business-type activities:Solid Waste 4,165,094 3,928,140 3,696,609 3,583,417 3,790,132 3,298,964 Section Eight Housing - - - - - - Civic Center 32,932 31,372 26,378 32,828 36,455 20,825 TISA 143,833 193,713 106,697 104,087 100,778 93,383 Operating grants and contributions 1,785,809 - - - - - Capital grants and contributions 9,480 23,969 22,894 14,735 24,990 3,666 Total business-type activities program revenues 6,137,148 4,177,194 3,852,578 3,735,067 3,952,355 3,416,838 Total primary government program revenues 11,726,512$ 14,694,802$ 13,596,636$ 10,593,617$ 14,331,825$ 12,177,253$ TABLE 2CITY OF PADUCAH, KENTUCKYCHANGES IN NET ASSETSLast Four Fiscal Years (1)(accrual basis of accounting)Fiscal Year-112-
Pages 2 of 22008 (3) 2007 2006 2005 (2) 2004 2003Net (Expense)/RevenueGovernmental activities(33,237,886)$ (26,650,992)$ (26,815,753)$ (26,785,800)$ (26,305,105)$ (23,489,510)$ Business-type activities(140,794) (224,244) (356,110) (158,159) 315,544 (113,121) Total primary government net (expense) (33,378,680)$ (26,875,236)$ (27,171,863)$ (26,943,959)$ (25,989,561)$ (23,602,631)$ General Revenues and Other Changes in Net AssetsGovernmental activities:Taxes and licenses:Property taxes, levied for general purposes 4,221,957 4,122,538$ 4,107,934$ 3,919,113$ 4,012,168$ 3,893,211$ Insurance premium tax 4,699,458 4,414,672 3,863,953 3,957,289 3,767,864 3,580,964 Gross receipts license tax 4,061,587 4,050,057 3,899,432 3,720,784 3,496,438 3,404,338 Employee license tax 16,520,523 16,273,966 14,794,217 11,192,445 10,616,223 10,301,231 Other taxes 2,259,956 1,964,101 2,105,014 2,116,403 1,764,140 1,893,064 Intergovernmental revenue 1,401,400 1,243,028 1,201,973 955,645 871,273 836,132 Unrestricted investment earnings 540,620 639,702 462,292 290,647 220,992 325,811 Gain on sale of capital assets 119,200 48,656 8,340 - (1,972) 125,714 Transfers (96,609) (58,175) (115,754) (133,959) (68,964) 18,666 Total governmental activities 33,728,092 32,698,545 30,327,401 26,018,367 24,678,162 24,379,131 Business-type activities:Unrestricted investment earnings 73,985 83,854 85,786 51,508 32,826 39,530 Gain on sale of capital assets 127,131 16,641 55,337 27,500 34,975 24,238 Transfers 96,609 58,176 115,754 133,959 68,964 (18,666) Total business-type activities 297,725 158,671 256,877 212,967 136,765 45,102 Change in Net AssetsGovernmental activities:490,206 6,047,553 3,511,648 (767,433) (1,626,943) 889,621 Business-type activities:156,931 (65,573) (99,233) 54,808 452,309 (68,019) Total primary government 647,137$ 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. (3) The City began reporting Section Eight Housing fund as a business-tpye activity previously reported as a governmental fund. Prior years have not been restated.Fiscal Year-113-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 accumulatedover time.
2008 (3) 2007 2006 2005 (1) 2004 2003 2002 2001 (2) 2000 1999General FundReserved for:Encumbrances -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Unreserved 9,416,427 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 Total general fund 9,416,427$ 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$ All Other Governmental FundsReserved for:Program purposes 497,243$ 1,009,522$ 783,596$ 498,423$ 483,423$ 695,213$ 567,096$ 604,021$ 327,925$ 411,956$ Capital improvements 5,028,420 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 Encumbrances - - - - - - - - - - Unreserved, reported in:Special revenue funds 631,677 502,189 758,017 1,039,854 770,453 1,080,043 714,972 1,247,619 1,402,554 825,094 Debt service funds 65,048 31,836 32,364 9,805 30,243 46,051 244,724 232,640 935,605 1,050,400 Total all other governmental funds 6,222,388$ 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$ (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 $9,290,000 bond issue for convention and arts center construction. (3) Significant decrease in reserve for program purpose due to converting governmental fund to proprietary fund.
-114-Fiscal YearTABLE 3CITY OF PADUCAH, KENTUCKYFund Balances, Governmental FundsLast Ten Fiscal Years (modified accrual basis of accounting)
2008 2007 2006 2005 2004 2003 (1) 2002 2001 (2) 2000 1999Revenues:Taxes 6,139,164$ 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$ Licenses 25,924,562 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 Charges for services 835,105 783,018 654,059 625,281 668,659 743,826 1,452,732 1,332,280 1,073,577 1,167,741 Intergovernmental 1,565,348 1,676,783 1,529,879 1,192,724 1,029,307 1,186,306 590,372 450,412 428,698 449,686 Grants 1,673,936 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 Interest 419,103 540,204 402,943 251,302 190,350 316,794 541,277 515,299 485,883 503,275 Miscellaneous 1,944,310 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 Total revenues 38,501,528 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 Expenditures:General government 5,051,374 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 Public safety 15,696,728 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 Public service 7,935,188 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 Parks and recreation 1,298,329 1,192,727 1,044,299 1,045,024 1,026,297 975,361 897,060 738,401 1,661,562 1,661,119 Planning and development 803,976 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 Other 520,611 526,238 481,690 462,099 2,343,844 645,653 323,844 99,657 95,082 90,459 Capital outlay 4,826,983 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 Debt service:Principal requirement 880,887 782,870 594,047 552,938 428,613 379,229 362,275 140,636 134,295 170,615 Interest and fiscal requirement 1,051,008 1,108,385 949,537 745,676 471,625 428,578 413,364 25,752 30,536 35,891 Total expenditures 38,065,084 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 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 - - - - - Capital lease 371,979 - - - - - - - - - Transfers in 6,241,886 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 Transfers out (7,086,517) (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) Total other financing sources (uses) (472,652) (100,078) (547,110) (1,042,751) 7,143,612 (1,093,227) (1,273,594) 7,771,074 (591,152) (575,682) Net change in fund balances (36,208)$ 2,717,458$ 2,628,983$ (2,891,468)$ (487,339)$ 252,489$ (5,768,773)$ 7,999,000$ 594,476$ (848,233)$ Capital outlay (2) 2,857,189$ 4,638,045$ 3,779,542$ 3,981,143$ 9,144,907$ 1,907,998$ -$ -$ -$ -$ Debt service as a percentageof noncapital expenditures 5.49% 5.46% 4.69% 4.26% 2.77% 2.75% 2.86% 0.67% 0.71% 0.82%(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.-115-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 Exemptions1999 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 692,018,288 561,151,216 482,481,332 51,455,112 1,787,105,948 1,847,595,428 0.307 96.7% 60,489,480 2008 748,189,877 603,688,455 481,049,523 74,068,797 1,906,996,652 1,970,156,891 0.287 96.8% 63,160,239 Source: McCracken County Property Valuation AdministratorNotes: Property in McCracken County is reassessed once every four years on average.TABLE 5CITY OF PADUCAH, KENTUCKYASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTYLAST TEN FISCAL YEARSValue-116-PercentAssessedAssessed Value ToReal EstateEstimated
TotalFiscal Real Direct Real Real Real Real Real Year Estate Personal Rate Estate Personal Estate Personal Estate Personal Estate Personal Estate Personal1999 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 0.275 0.390 0.307 - - 0.433 0.433 0.628 0.635 0.019 0.019 0.197 0.236 2008 0.250 0.390 0.287 - - 0.488 0.488 0.672 0.695 0.018 0.018 0.189 0.219 Source: McCracken County Property Valuation Administrator and City Tax Levy Ordinance.School DistrictsMcCracken Co. City of Paducah Paducah
-117-General Fund Public Library School DistrictsMcCrackenJunior College CountyTABLE 6CITY OF PADUCAH, KENTUCKYPROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS(PER $100 OF ASSESSED VALUE)LAST TEN FISCAL YEARSCity Direct Rates Overlapping Rates
(1) (2)
Assessed Assessed
Taxpayer Valuation Valuation
Kentucky Oaks Mall 50,900,262$ 2.88% 44,131,900$ 3.22%
South Central Bell 16,221,600 0.92% 31,715,185 2.31%
Lourdes Medical Pavilion 15,982,400 0.90%
Olivet Church 1031 LLC 15,493,200 0.88%
Ducmall LLC 14,374,800 0.81%
Paducah Medical Investors 13,440,090 0.76%
Wal Mart Real Estate Trust 10,646,400 0.60%
Sams Real Estate Bus Trust 9,222,955 0.52%
Computer Services Inc 9,083,185 0.51% 17,868,598 1.30%
Wal Mart Store 9,000,000 0.51%
Amerisource 41,268,209 3.01%
Wal Mart 35,800,729 2.61%
Lowes 14,351,530 1.05%
H.B. Fuller 12,977,836 0.95%
Mercantile Bank 12,593,591 0.92%
Drury Inns, Inc. 11,416,170 0.83%
Union Planters 8,059,941 0.59%
TOTALS 164,364,892$ 9.32% 230,183,689$ 16.79%
(1) Source - Property Valuation Administration; Assessed value as of January 1, 2007.
(2) Source - Property Valuation Administration; Assessed value as of January 1, 1998.
-118-
Total Assessed Total Assessed
Valuation Valuation
1999
Percentage of Percentage of
TABLE 7
CITY OF PADUCAH, KENTUCKY
PRINCIPAL TAXPAYERS
CURRENT YEAR AND NINE YEARS AGO
2008
Fiscal (1)
Year Taxes Levied (1) Collections
Ended for the Amount of in Subsequent Total
June 30, Fiscal Year Collections Years Collections
1999 4,614,749 4,602,800 99.7% 830 4,603,630$ 99.8%
2000 4,413,808 4,384,681 99.0% 1,303 4,385,984$ 99.4%
2001 4,549,413 4,406,600 96.9% 4,457 4,411,057$ 97.0%
2002 4,679,657 4,532,885 96.9% 7,401 4,540,286$ 97.0%
2003 4,674,301 4,631,782 99.5% 11,198 4,642,980$ 99.3%
2004 4,939,114 4,866,871 99.5% 26,578 4,893,449$ 99.1%
2005 4,831,463 4,725,999 97.8% 51,957 4,777,956$ 98.9%
2006 5,139,294 4,887,983 95.1% 175,333 5,063,316$ 98.5%
2007 5,343,009 4,850,651 90.8% 338,541 5,189,192$ 97.1%
2008 5,085,799 4,912,358 96.6% - 4,912,358$ 96.6%
* Source - City of Paducah Finance Department.
Fiscal Year of the Levy Total Collections to Date
Collected Collected
-119-
Percent of Percent of
Levy Levy
TABLE 8
CITY OF PADUCAH, KENTUCKY
SECURED TAX LEVIES AND COLLECTIONS*
LAST TEN FISCAL YEARS
Collected within the
(1) Includes current year real and personal property tax, franchise, auto and bank shares.
(1)
Fiscal Taxes
Year Collected
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%
2008 16,535,542 2.00%
117,682,301$
(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%.
Rate
-120-
TABLE 9
CITY OF PADUCAH, KENTUCKY
EMPLOYEE LICENSE TAX COLLECTIONS
LAST TEN FISCAL YEARS
Direct
Tax
(1)
Taxpayers Number of Percentage Taxes
By Range Filers of Total Collected
$0 - $50,000 2,052 97.81% 8,707,672$ 52.66%
$50,001 - $100,000 27 1.29% 1,791,822 10.84%
$100,001 - $500,000 17 0.81% 3,595,858 21.75%
Greater than $500,000 2 0.10% 2,440,190 14.76%
TOTALS 2,098 100.00% 16,535,542$ 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.
Percentage of
Percentage of
-121-
Total Employee
License Tax
Total Employee
2006
TABLE 10
CITY OF PADUCAH, KENTUCKY
PRINCIPAL EMPLOYEE LICENSE TAXPAYERS
CURRENT YEAR AND ONE YEAR AGO*
License Tax
2008
(1)Net Net Net (2)General PublicPublicRefundingTotalFiscal Obligation ImprovementCapital ImprovementRevenue PrimaryYear Bonds Debt Lease Debt Bonds Government1999 -$ -$ -$ 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 1.17 821 2008 17,614,952 2,946,303 - - - 20,561,255 1.04 782 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.Net Value Capita
-122-Debt to Net Actual Debt PerTABLE 11CITY OF PADUCAH, KENTUCKYRATIO OF OUTSTANDING DEBT BY TYPELAST TEN FISCAL YEARSGovernmental Activities Business Activities Ratio of
(1) Police and Infiniti Less (2)Convention andFire Pension Media ResourcesFiscal Art Center FundBuildingRestricted forYear Bonds Bonds Bonds Debt Service Total1999 -$ -$ -$ -$ -$ - -$ 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 0.99 695 2008 7,600,000 5,740,000 4,340,000 65,048 17,614,952 0.89 670 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.Net Bonds to-123-(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 CapitaTABLE 12CITY OF PADUCAH, KENTUCKYRATIO OF NET GENERAL BONDED DEBT OUTSTANDING LAST TEN FISCAL YEARSGeneral Bonded Debt Outstanding Ratio of
Estimated
(1) Share of
Percentage Direct and
Net Debt Applicable Overlapping
Outstanding to the City Debt
City of Paducah 20,561,255$ 100.0% 20,561,255$
Paducah Independent
School District 9,845,000 * 100.0% 9,845,000
McCracken County 11,375,000 * 46.9% 5,334,875
McCracken County
Board of Education 28,324,449 * 31.5% 8,922,201
Overlapping Debt 49,544,449 24,102,076
Total direct and overlapping debt 70,105,704$ 44,663,331$
(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.
-124-
TABLE 13
CITY OF PADUCAH, KENTUCKY
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
AS OF JUNE 30, 2008
Net assessed value 1,906,996,652$ Add exemption 63,160,239 Total assessed value 1,970,156,891$ Debt limit - 10% of total assessed value (1) 197,015,689$ Debt outstanding:General obligation bonds outstanding 17,680,000Notes payable 2,946,303Less debt not subject to limit - Gross bonded debt 20,626,303 Less amount available in debt service funds 65,048 Net bonded indebtedness subject to limit 20,561,255 Legal Debt Margin 176,454,434$ 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999Debt Limit 197,015,689$ 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$ Total net debt applicable to limit 20,561,255 21,598,686 22,196,863 16,713,469 17,018,612 8,883,774 9,064,330 9,438,689 - - Legal debt margin 176,454,434$ 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$ Total net debt applicable to the limit as a percentage of debt limit 10.44% 11.82% 12.68% 9.93% 10.25% 5.39% 5.59% 5.89% 0.00% 0.00%
-125-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 maximumpercentages 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 Total1999 3,369,358$ 2,081,507$ 1,287,851$ 110,000$ 37,105$ 147,105$ 8.75x2000 * * * * * * *2001 * * * * * * *2002 * * * * * * *2003 * * * * * * *2004 * * * * * * *2005 * * * * * * *2006 * * * * * * *2007 * * * * * * *2008 * * * * * * *(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 RequirementsTABLE 15CITY OF PADUCAH, KENTUCKYSCHEDULE OF SEWER REVENUE BOND COVERAGELAST TEN FISCAL YEARS-126-Net RevenueAvailableforDebt Service Coverage
(1) (1)
Personal
Income
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%
26,307 484,496,019 18,417 39.9 2,832 6.1%
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.
2006-2007
2007-2008
-127-
2002-2003
2003-2004
2004-2005
2005-2006
Fiscal Year Population Income Age Enrollment
Per Capita Median School Unemployment
2000-2001
2001-2002
1998-1999
1999-2000
Rate
(1) (1) (2) (3)
TABLE 16
CITY OF PADUCAH, KENTUCKY
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN FISCAL YEARS
Employer Employees (1) Employees (1)Western Baptist Hospital 1,700 5.66% 1,660 5.55%Lourdes Hospital 1,400 4.66% 1,500 5.01%Wal Mart 1,200 4.00% 1,120 3.74%Paducah Public Schools 600 2.00% 600 2.01%LYNX Services 360 1.20% 390 1.30%State of Kentucky 390 1.30% 390 1.30%City of Paducah 340 1.13% 380 1.27%Paxton Media Group 290 0.97% 285 0.95%NRE Acquisitions 220 0.73% 280 0.94%West KY Community & Technical College 380 1.27% 270 0.90%TOTALS 6,880 22.91% 6,875 22.98%(1) Source - City of Paducah Finance Department(2) State of Kentucky - Office of Employment and Training. Ratio based on employment within County of McCracken.* Comparative information was unavailable prior to fiscal year 2006.Percentage of Percentage of
-128-Total Total Employment (2) Employment (2)2008 2006TABLE 17CITY OF PADUCAH, KENTUCKYPRINCIPAL EMPLOYERSCURRENT YEAR AND ONE YEAR AGO *
2008 2007 2006 2005 2004 2003 2002 2001 2000 1999Governmental ActivitiesGeneral governmentGeneral administration 12 12 12 11 11 11 12 13 13 13Finance 14 14 14 13 13 13 13 13 12 12Human resources3334333444Inspection 13 13 12 12 12 12 13 14 12 12Information Systems4433332100Risk Management 1 1 1Public safetyPolice 93 93 93 96 94 95 94 94 94 94Fire 69 71 76 75 76 76 77 81 86 86Public serviceStreets 29 30 31 28 28 28 28 29 29 29Facilities 34 34 35 38 39 39 38 36 36 35Engineering9999888884Other6544222000Parks and recreation7779988755Planning and development11 11 11 11 11 11 10 10 12 11OtherFleet maintenance7777666678Business-type ActivitiesSolid waste 27 27 29 29 29 29 29 30 29 29Sewer/wastewater*********23Total Primary Government339 341 347 349 344 344 343 346 347 365* 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.**Employee budget census.Fiscal Year-129-TABLE 18CITY OF PADUCAH, KENTUCKYCITY FULL-TIME EMPLOYEES BY FUNCTION**Last Ten Fiscal Years
2008 2007 2006 2005 2004 2003 2002 2001 2000 1999General governmentBuilding and electrical permits issued 1,203 1,411 1,362 1,376******Business licenses issued 3,507 3,500 3,700*******Public safetyPoliceAdult arrests 4,170 5,012 3,827*******Murder- 1- *******Rape 15 18 15*******Robberies 49 42 35*******Burglary 203 208 211*******Auto theft 60 117 104*******Arson 8 167*******Traffic accidents 1,519 1,949 1,815*******Traffic violations 7,109 7,323 7,468*******FireEmergency responses 2,603 2,456 2,546 3,219 3,638 3,569 2,845 1,665 1,651 937Fires extinguished 102 163 181 176 189 198 194 177 247 131Structure fires 49 40 53 49 64 70 72 66 69 52Incidents with reported losses 70 80 91 97 106 111 129 102 94 60Medical/rescue 1,506 1,369 1,589 1,997 2,266 2,290 1,551 370 319 40Tours/in-services/Car Seats 699 485 485 485 485 485 468 558 430 *Training Man Hours 4,344 1,183 1,418 1,188 965 1,058 804 1,619 1,625 *Inspections 1,449*********Refuse collectionResidentialRefuse collected (tons per day) 25 28 34*******Customers served 9,446 9,388 9,368*******Commercial Refuse collected (tons per day) 83 85 84*******Customers served 821 832 801*******Public service911 calls received 144,290 122,340 167,847 168,712 168,427 173,536 164,661 * * *Police 79,386 59,887 76,144 103,500 104,622 110,310 106,244 * * *Fire 3,320 3,107 4,168 3,537 3,305 3,387 4,045 * * *Other 61,584 59,346 87,535 61,675 60,500 59,839 54,372 * * ** Information not available.**Information from city departments.-130-TABLE 19CITY OF PADUCAH, KENTUCKYOPERATING INDICATORS BY FUNCTION**Last Ten Fiscal Years
2008 2007 2006 2005 2004 2003 2002 2001 2000 1999Public safetyPolice Stations1111111111FireStations5555555555Refuse collectionCollection trucksResidential 10988######Commercial5544######Other public worksSanitary sewers (miles)*********125Combination sewers (miles)*********56Storm sewers (miles)*********36Streets (miles paved) 216 216 214 214 213 209 209 209 209 209Sidewalks (miles) 45 45 45 45 45 45 45 45 45 45Traffic signals 11 11 11 11 1000000Parks and recreationParks 27 27 18 18 18 18 18 18 18 18Acreage 960 960 325 325 325 325 325 325 230 230Community centers1111111111Swimming pools1111133333Public tennis courts666666661010Public 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-131-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, 2008
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 1,946,002$
Passed-through Kentucky Housing
Corporation:
Public Housing Capital Fund 14.872 N/A 2,987
Total Department of Housing and Urban
Development 1,948,989
Department of Justice:
Direct Programs:
Bulletproof Vest Partnership Program 16.607 N/A 1,815
Edward Byrne Memorial Justice
Assistance Grant Program 16.738 2006-F1115-KY-DJ 2,257
Assistance Grant Program 16.738 207-DJ-BX-1012 30,584
Total Department of Justice 34,656
Department of Agriculture:
Passed-through Kentucky Department of
Education:
Summer Food Service Program for
Children 10.559 N/A 38,164
Total Department of Agriculture 38,164
Department of Homeland Security:
Direct Programs:
Commercial Equipment Direct
Assistance Program 97.096 C06-01591 45,000
Total Department of Homeland Security 45,000
(Continued)
CITY OF PADUCAH, KENTUCKY
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2008
Federal Grantor/Pass-Through Grantor/
-132-
Expenditures
Federal
CFDA Pass-Through
Program Title: Number Grantor Number
Department of Transportation:
Passed-through Kentucky Department of
State Police:
State and Community Highway Safety 20.600 AL-07-31 13,076
State and Community Highway Safety 20.600 AL-08-35 36,267
20.205 P02-628-0600003374 32,000
Passed-through Kentucky Governor's
Office of Local Development
Recreational Trails Program 20.219 RTP 293-06 50,000
Passed-through to River Heritage
Museum
Highway Planning and Construction 20.205 C05024679 279,366
Total Department of Transportation 410,709
TOTAL EXPENDITURES OF FEDERAL AWARDS 2,477,518$
See accompanying notes to schedule of expenditures of federal awards.
-133-
CITY OF PADUCAH, KENTUCKY
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2008
Federal Grantor/Pass-Through Grantor/
Expenditures
CITY OF PADUCAH, KENTUCKY
NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2008
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 38,164
River Heritage Museum 20.205 279,366
$317,530
-134-
Report on Internal Control
Over Financial Reporting and on Compliance and Other Matters Based on an Audit
of Financial Statements Performed in Accordance with
Government Auditing Standards
Honorable William F. Paxton, Mayor
Members of the Board of Commissioners
City of Paducah
Paducah, Kentucky
We have audited the financial statements of the governmental activities, the business-type activities, the
aggregate discretely presented component units, each major fund, and the aggregate remaining fund
information of the City of Paducah, Kentucky, as of and for the year ended June 30, 2008, which collectively
comprise the City of Paducah, Kentucky’s basic financial statements and have issued our report thereon dated
December 17, 2008. We conducted our audit in accordance with auditing standards generally accepted in the
United States of America and the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the City of Paducah, Kentucky’s internal control over
financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion
on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City of
Paducah, Kentucky’s internal control over financial reporting. Accordingly, we do not express an opinion on
the effectiveness of the City of Paducah, Kentucky’s internal control over financial reporting.
Our consideration of internal control over financial reporting was for the limited purpose described in the
preceding paragraph and would not necessarily identify all deficiencies in internal control over financial
reporting that might be significant deficiencies or material weaknesses. However, as discussed below, we
identified certain deficiencies in internal control over financial reporting that we consider to be significant
deficiencies.
A control deficiency exists when the design or operation of a control does not allow management or
employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on
a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that
adversely affects the City of Paducah, Kentucky’s ability to initiate, authorize, record, process, or report
financial data reliably in accordance with generally accepted accounting principles such that there is more than
a remote likelihood that a misstatement of the City of Paducah, Kentucky’s financial statements that is more
than inconsequential will not be prevented or detected by the City of Paducah, Kentucky’s internal control. We
consider the deficiency described in the accompanying schedule of findings and questioned costs (reference #
2008-1 and 2008-2) to be significant deficiencies in internal control over financial reporting.
A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more
than a remote likelihood that a material misstatement of the financial statements will not be prevented or
detected by the City of Paducah, Kentucky’s internal control.
Our consideration of internal control over financial reporting was for the limited purpose described in the first
paragraph of this section and would not necessarily identify all deficiencies in internal control that might be
significant deficiencies or material weaknesses. However, we believe that none of the significant deficiencies
described above is a material weakness.
-135-
333 Broadway Suite 1001 Paducah, KY 42001
Phone: (270)443-4400 Fax: (270)443-0963 kempercpa.com
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City of Paducah, Kentucky’s financial statements
are free of material misstatement, we performed tests of its compliance with certain provisions of laws,
regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect
on the determination of financial statement amounts. However, providing an opinion on compliance with
those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The
results of our tests disclosed no instances of noncompliance or other matters that are required to be reported
under Government Auditing Standards.
However, we noted certain matters that we reported to management of the City of Paducah, Kentucky, in a
separate letter dated December 17, 2008.
The City of Paducah, Kentucky’s response to the findings identified in our audit is described in the
accompanying schedule of findings and questioned costs. We did not audit City of Paducah, Kentucky’s
response and, accordingly, we express no opinion on it.
This report is intended for the information and use of the Board of Commissioners of the City of Paducah,
Kentucky, management, others within the organization, and federal awarding agencies and pass-through
entities and is not intended to be and should not be used by anyone other than these specified parties.
Certified Public Accountants and Consultants
Paducah, Kentucky
December 17, 2008
-136-
Report on Compliance with Requirements Applicable
to Each Major Program and On Internal Control Over
Compliance in Accordance with OMB Circular A-133
Honorable William F. Paxton, Mayor
Members of the Board of Commissioners
City of Paducah
Paducah, Kentucky
Compliance
We have audited the compliance of the City of Paducah, Kentucky, with the types of compliance requirements
described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that
are applicable to each of its major federal programs for the year ended June 30, 2008. The City of Paducah,
Kentucky’s major federal programs are identified in the summary of auditor’s results section of the
accompanying schedule of findings and questioned costs. Compliance with the requirements of laws,
regulations, contracts and grants applicable to each of its major federal programs is the responsibility of the
City of Paducah, Kentucky’s management. Our responsibility is to express an opinion on the City of Paducah,
Kentucky’s compliance based on our audit.
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United
States of America; the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local
Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan
and perform the audit to obtain reasonable assurance about whether noncompliance with the types of
compliance requirements referred to above that could have a direct and material effect on a major federal
program occurred. An audit includes examining, on a test basis, evidence about the City of Paducah
Kentucky’s compliance with those requirements and performing such other procedures as we considered
necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our
audit does not provide a legal determination of the City of Paducah, Kentucky’s compliance with those
requirements.
In our opinion, the City of Paducah, Kentucky complied, in all material respects, with the requirements
referred to above that are applicable to each of its major federal programs for the year ended June 30, 2008.
Internal Control Over Compliance
The management of the City of Paducah, Kentucky, is responsible for establishing and maintaining effective
internal control over compliance with requirements of laws, regulations, contracts and grants applicable to
federal programs. In planning and performing our audit, we considered the City of Paducah, Kentucky’s
internal control over compliance with the requirements that could have a direct and material effect on a major
federal program in order to determine our auditing procedures for the purpose of expressing our opinion on
compliance, but not for the purpose of expressing an opinion on the effectiveness of internal control over
compliance. Accordingly, we do not express an opinion on the effectiveness of City of Paducah, Kentucky’s
internal control over compliance.
-137-
333 Broadway Suite 1001 Paducah, KY 42001
Phone: (270)443-4400 Fax: (270)443-0963 kempercpa.com
A control deficiency in an entity’s internal control over compliance exists when the design or operation of a
control does not allow management or employees, in the normal course of performing their assigned functions,
to prevent or detect noncompliance with a type of compliance requirement of a federal program on a timely
basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely
affects the entity’s ability to administer a federal program such that there is more than a remote likelihood that
noncompliance with a type of compliance requirement of a federal program that is more than inconsequential
will not be prevented or detected by the entity’s internal control.
A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more
than a remote likelihood that material noncompliance with a type of compliance requirement of a federal
program will not be prevented or detected by the entity’s internal control.
Our consideration of internal control over compliance was for the limited purpose described in the first
paragraph of this section and would not necessarily identify all deficiencies in internal control that might be
significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over
compliance that we consider to be material weaknesses, as defined above.
This report is intended solely for the information and use of the Board of Commissioners of the City of
Paducah, Kentucky, management, others within the organization, and federal awarding agencies and pass-
through entities and is not intended to be and should not be used by anyone other than these specified parties.
Certified Public Accountants and Consultants
Paducah, Kentucky
December 17, 2008
-138-
CITY OF PADUCAH, KENTUCKY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2008
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. Two significant control deficiencies were 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
Highway Planning and Construction 20.205
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 # 2008-1
Testing of City’s provided schedule of current year capital asset additions noted ten additions not
identified.
Cause
Control procedures to capture information of capital assets additions failed to identify all capital asset
additions.
Effect
Expenditures of governmental and business type activity were overstated. Accordingly, an audit
adjustment was necessary.
Recommendation
We recommend the City review controls governing identifying and capturing information necessary to
properly record all capital asset additions for governmental and business activity. In addition, we
recommend additional training of those responsible for documenting capital additions, as well as,
implementing review procedures to insure all capital asset additions have been properly recorded for
financial reporting.
-139-
CITY OF PADUCAH, KENTUCKY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2008
Management Response
The classification of these purchases into the improper expense accounts led to a failure to identify them
as capital assets for capitalization purposes in the financial statements. In the future, we will ensure that
purchases of capital assets are properly placed into the ‘4000’ accounts so that they are capitalized at
year-end.
Reference # 2008-2
Control deficiency in collection of compost revenues.
Cause
Lack of segregation of duties for recording and collections of compost revenues. Person responsible for
logging revenues also handles cash receipts.
Effect
Due to lack of segregation of duties, the City is at risk of misappropriation of cash receipts.
Recommendation
We recommend the City review controls governing handling of cash receipts at the compost yard. We
recommend the City consider requesting customers to stop at the Public Works office to purchase
compost where adequate personnel are present to properly segregate duties of recording and handling
cash receipts. Customers would then provide personnel at the compost yard a receipt of purchase to
pickup compost material.
Management Response
The practice of compost operators collecting revenues reduces the need for additional personnel and
allows a one-stop process for customers. Because customer service is paramount, it would not be
feasible to have people stop at one place to pay and then go to the compost yard. Customers often
change their minds on what they want, or the product they want is not available. However, to ensure
accountability strict guidelines will be enforced:
- Each operator will sign for a cash box each day.
- At the end of an operator’s shift, a supervisor will balance the receipts, and confirm money
received against the amount of products used.
The long-term plan is to install a set of scales that will calculate load sizes, provide weight tickets, and
show cost/sales.
C. Findings and Questioned Costs - Major Federal Award Programs:
None
-140-