HomeMy WebLinkAboutJune-30-2015
CITY OF PADUCAH,
KENTUCKY
COMPREHENSIVE
ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2015
FINANCE DEPARTMENT
CITY OF PADUCAH,
KENTUCKY
City of Paducah
Paducah, Kentucky
Comprehensive Annual Financial Report
Year Ended June 30, 2015
Issued by the
Finance Department
CITY OF PADUCAH, KENTUCKY
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2015
TABLE OF CONTENTS
Exhibit No. Page No.
Introductory Section:
Letter of Transmittal 1 - 7
Organizational Chart 8
Principal Officials 9
GFOA Certificate of Achievement 10
Financial Section:
Independent Auditor’s Report 11-12
Required Supplementary Information:
Management’s Discussion and Analysis 13-28
Basic Financial Statements:
Government-wide Financial Statements:
Statement of Net Position 1 29-30
Statement of Activities 2 31-32
Fund Financial Statements:
Governmental Funds:
Balance Sheet 3 33-34
Reconciliation of the Governmental Funds Balance
Sheet to Statement of Net Position 4 35-36
Statement of Revenues, Expenditures and Changes
in Fund Balances 5 37-38
Reconciliation of the Statement of Revenues,
Expenditures and Changes in Fund Balances of
Governmental Funds to the Statement of Activities 6 39-40
Statement of Revenues, Expenditures and Changes -
Budget and Actual - General Fund 7 41-44
Statement of Revenues, Expenditures and Changes -
Budget and Actual - Special Revenue Investment Fund 8 45
Proprietary Funds:
Statement of Net Position 9 46
Statement of Revenues, Expenses and Changes in
Fund Net Position 10 47
Statement of Cash Flows 11 48
Fiduciary Funds:
Statement of Net Position 12 49
Statement of Changes in Net Position 13 50
Notes to Financial Statements 51-94
Required Supplementary Information:
Schedule of Changes in the Police and Firefighters’
Pension Trust Fund’s Net Pension Liability and Related Ratio A-1 95
Schedule of Changes in the Appointive Employees’
Pension Trust Fund’s Net Pension Liability and Related Ratio A-2 96
Schedule of Police and Firefighters’ Pension Trust Fund
Contributions and Investment Returns A-3 97
Schedule of Changes in the Appointive Employees’
Pension Trust Fund Contributions and Investment Returns A-4 98
Schedule of City’s Proportionate Share of the Net Pension Liability
County Employees’ Retirement System A-5 99
Schedule of City’s Contributions
County Employees’ Retirement System A-6 100
Exhibit No. Page No.
Supplementary Information:
General Capital Improvements Detail Schedule of
Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual B-1 101
Debt Service Fund Detail Schedule of Revenues,
Expenditures, and Changes in Fund Balance - Budget
and Actual B-2 102
Nonmajor Governmental Funds:
Combining Balance Sheet B-3 103-104
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances B-4 105-106
Detail Statement of Revenues, Expenditures, and
Changes in Fund Balance - Budget and Actual:
Municipal Aid Fund B-5 107
Emergency Communication Service Fund B-6 108
Court Awards Fund B-7 109
CDBG Grant Fund B-8 110
Home Grant Fund B-9 111
Special Revenue Bond Fund B-10 112
Nonmajor Proprietary Funds:
Nonmajor Enterprise Funds:
Combining Statement of Net Position C-1 113
Combining Statement of Revenues, Expenses and
Changes in Fund Net Position C-2 114
Combining Statement of Cash Flows C-3 115
Internal Service Funds:
Combining Statement of Net Position D-1 116
Combining Statement of Revenues, Expenses, and
Changes in Fund Net Position D-2 117
Combining Statement of Cash Flows D-3 118
Fiduciary Funds:
Combining Statement of Net Position -
Private-purpose Trust Funds E-1 119
Combining Statement of Changes in Net Position -
Private-purpose Trust Funds E-2 120
Statement of Changes in Assets and
Liabilities - Agency Funds E-3 121
Table No. Page No.
Statistical Section:
Net Position by Component 1 122
Changes in Net Position 2 123-124
Fund Balances, Governmental Funds 3 125
Changes in Fund Balances, Governmental Funds 4 126
Assessed and Estimated Actual Value of
Taxable Property 5 127
Governments 6 128
Principal Taxpayers 7 129
Secured Tax Levies and Collections 8 130
Employee License Tax Collections 9 131
Principal Employee License Taxpayers 10 132
Ratio of Outstanding Debt by Type 11 133
Ratio of Net General Bonded Debt Outstanding 12 134
Table No. Page No.
Statistical Section:
Property Tax Rates - Direct and Overlapping
Direct and Overlapping Governmental
Activities Debt 13 135
Legal Debt Margin Information 14 136
Demographic and Economic Statistics 15 137
Principal Employers 16 138
City Full-Time Employees by Function 17 139
Operating Indicators by Function 18 140
Capital Asset Statistics by Function 19 141
Single Audit Section:
Schedule of Expenditures of Federal Awards 142
Notes to the Schedule of Expenditures of Federal
Awards 143
Independent Auditor’s Report on Internal Control Over
Financial Reporting and on Compliance and Other Matters Based
on an Audit of Financial Statements Performed in Accordance
with Government Auditing Standards 144-145
Independent Auditor’s Report on Compliance for Each Major
Program and on Internal Control Over Compliance Required by
OMB Circular A-133 146-147
Schedule of Findings and Questioned Costs 148
Schedule of Prior Audit Findings 149
CITY OF PADUCAH, KENTUCKY
INTRODUCTORY SECTION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2015
December 17, 2015
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,
2015. 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, 2015,
is in the Management’s Discussion and Analysis (MD&A) section of this report, immediately following
the Report of Independent Auditors. The letter of transmittal is written to complement the MD&A and
the financial statements, and should be read from that perspective and in conjunction with all other
sections of the CAFR.
THE CITY
Paducah was established in 1827 by explorer General William Clark. The City of Paducah is situated at
the confluence of the Ohio and Tennessee Rivers in the north central portion of McCracken County.
Paducah is the largest city both in the county and in the Jackson Purchase eight county region. The City
has established itself as the cultural, economic, medical and transportation center for not only the Jackson
Purchase region but for a large portion of Southern Illinois and portions of Western Tennessee and
Southeastern Missouri.
Industry
The Paducah area has moved from the traditional “manufacturing industry” to a “service industry”
economy. Multi-state computer services, significant banking corporations, wholesale and retail trade,
river-related services, the health care industry and related services are the major employment centers.
CITY OF PADUCAH
Finance Department
P.O. Box 2267
Paducah, KY 42002-2267
270-444-8512
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Economic Development Activities
Paducah Economic Development (PED) coordinates the City’s efforts in strengthening and building
economic development activities. Representatives of financial institutions, utilities, local government,
education and the business community serve as the Board of Directors. In existence since 1987, PED
assumes and carries out the responsibility of working with existing industry and business, as well as
identifying and recruiting new companies to the City of Paducah. Additionally, PED is responsible for
development of long-term strategy for economic development activities and coordinates local entities in
the accomplishment of those strategies.
In the early 1990s, the City of Paducah, the State of Kentucky and several federal agencies, in conjunction
with business, developed a 650-acre ‘Information Age’ Park. This park is designed to appeal to firms
needing advanced telecommunications and computing capabilities.
In 1997, the City of Paducah jointly with the County of McCracken acquired the ‘Industrial Park West of
Paducah and McCracken County’. This park contains 218 acres with immediate access to two major
railroad lines, Paducah and Louisville and Paducah and Illinois (formerly Illinois Central). The park is
located within the southwest quadrant of the I-24/Cairo Road interchange.
In 2007, PED began assembling property to establish Riverport West, an industrial park with rail and river
access in western McCracken County. So far, 229 acres have been purchased.
Churches And Schools
A relatively strong religious base is evident in the community, as demonstrated by the many churches in
Paducah. Numerous churches, representing many of the major denominations, are located within the
City. Several area churches offer televised activities as a convenience to those who do not attend church.
Elementary and secondary education in Paducah is provided by the Paducah Independent School System,
the McCracken County School System, Community Christian Academy, and by the St. Mary’s Parochial
School System.
The availability of higher education in the area is continuing to flourish. West Kentucky Community and
Technical College (WKCTC), formerly known as Paducah Community College, is a two-year institution
affiliated with the University of Kentucky’s community college system. WKCTC also serves as a site for
the University of Kentucky extended campus graduate programs, in addition to a four-year engineering
college in conjunction with the University of Kentucky. In 2008, WKCTC opened a Paducah School of
Art. In 2010, a new 65,000 square feet Emergency Technology Center was opened, offering industrial
and manufacturing technologies, engineering technology, as well as business and industry training and
information technology programs. This is the first state supported new building to be constructed on the
WKCTC campus in over 20 years. In 2011, Murray State University entered into an agreement with the
City, McCracken County, and Paducah Economic Development to construct an approximately 40,000
square foot educational building to serve as their Paducah campus. Classes began at the Paducah campus
in 2014.
Medical Facilities
Paducah serves as the regional medical center for much of the Jackson Purchase Area of Western
Kentucky, a large portion of Southern Illinois, and Northwestern Tennessee. Paducah’s medical industry
has almost every major medical specialty represented in the physician population. The medical industry,
represented by Lourdes Hospital and Western Baptist Hospital, provides over 650 beds for medical needs.
The two largest hospitals, together, employ over 3,000 persons.
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Recreation And Culture
Citizens have available a wide range of recreational and cultural activities which cater to diverse tastes.
Area residents may choose from fishing on nearby Kentucky and Barkley Lakes to enjoying the
performing arts. City parks provide areas for baseball, softball, golf, football, tennis, disc golf, footgolf,
skate boarding, soccer, hiking and picnicking. The Parks Services Department offers a substantial number
of activities for people of all ages.
The ‘Dogwood Festival’, held in April, highlights the coming of spring in Paducah. Residents are
encouraged to spotlight their trees to illuminate a driving tour to celebrate an abundance of dogwood
trees.
The LowerTown Art and Music Festival is uniquely showcased within the borders of Paducah’s 180-
year-old historic neighborhood. The LowerTown Art and Music Festival is an outdoor-juried show in its
13th year. The weekend exhibits the work of local artists and includes jazz, salsa, zydeco and blues
music, as well as food from area restaurants.
Started in 2004, the ‘Rivers Edge International Film Festival’ is a four-day event built around the
showing of independent film from around the world. The festival is held in multiple venues including
Maiden Alley Cinema, Market House Theatre, and Yeiser Art Center. In addition to appealing to the
film lover, the festival also provides filmmakers opportunities for exhibition, education, and networking.
Paducah is the site of the Museum of the American Quilter’s Society. In May 2008, a congressional
designation was passed naming the museum as the National Quilt Museum of the United States. The
museum, dedicated in 1991, is the centerpiece for the quilters’ annual convention held in April. The
convention attracts an estimated 30,000 visitors to Paducah annually.
One of Paducah’s oldest celebrations is the ‘8th of August Emancipation Celebration’, which features
African American family reunions, or a homecoming. It is a time for African Americans to pay tribute to
their heritage and roots, and a time of reconciliation.
The ‘Barbecue on the River’ event was started in 1995, as a way for local charities to raise funds. It
attracts in excess of 40,000 participants to Paducah’s riverfront during the last weekend in September.
Over time, this annual event has grown to incorporate other events, including ‘Marine Industry Day’ and
‘Old Market Days’.
Paducah Power sponsors the annual ‘Christmas in the Park’ lighting display at Noble Park. The public is
invited to a special lighting ceremony the Friday after Thanksgiving. This is the fourteenth year for the
event. Although the event is free, volunteers collect more than $40,000 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 ‘Luther F. Carson Four Rivers Center for the Performing Arts’ opened in February 2004 as a
regional, multiple-purpose facility, with a 1,800-seat main hall designed to accommodate a wide variety
of cultural and educational programs.
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The McCracken County Public Library offers a large selection of literature, special collections and
programs. The West Kentucky Community and Technical College Library supplement this community
resource.
THE GOVERNMENT
Paducah operates under a 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 306 full-time employees as of June 30, 2015. Department managers are
responsible for their respective departments and report directly to the City Manager.
REPORTING ENTITY AND ITS SERVICES
For financial statement purposes, as required by generally accepted accounting principles, the City’s
Comprehensive Annual Financial Report includes all City of Paducah financial statements (primary
government) and its component units. The component units discussed below are included in the City’s
reporting entity because of the significance of their operational or financial relationships with the City of
Paducah.
Blended units are presented as such because the units’ governing bodies are substantially the same as the
governing body of the City, or provide services almost entirely to the City of Paducah. The City has only
one blended unit: the Police and Firefighters’ Pension Fund, which was established for the benefit of
police and firemen of the City.
The City has one component unit that has been presented as a discrete unit to emphasize that it is legally
separate from the City. Paducah Water Works is included in the City’s financial statements because of its
financial relationship with the City.
The City provides a full range of municipal services, including police and fire protection; maintenance of
streets and infrastructure; sanitation services; 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.
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Internal Control
In developing and evaluating the City’s accounting system, consideration is given to the adequacy of
internal controls. Because the cost of a control should not exceed the benefits to be derived, the objective
of these internal controls is to provide reasonable, rather than absolute assurance that the financial
statements are free of any material misstatements. Internal controls were designed for Paducah’s
accounting system to reasonably safeguard its assets against loss from unauthorized use or disposition,
check the accuracy of accounting data, promote operational efficiency and encourage adherence to
prescribed managerial policies.
Budgetary Control
Paducah’s budget process provides for input from department managers, top management, elected
officials and the public to determine what programs and services will be provided for during the
upcoming year. Budgetary control is maintained at the departmental level by comparing budgeted
expenditures with actual expenditures on a periodic and year-to-date basis. An expenditure, which would
result in an overrun of department appropriation, cannot be made until additional funds are appropriated
and a budget amendment is approved. Purchase orders which result in an overrun of department
appropriations cannot be honored until additional appropriations are made available. Unencumbered
funds at year-end roll into the fund balance.
Financial Policies
The City’s financial policies are shaped by state law and established by management and the City
Commission. Financial policies include budgeting and financial planning, capital planning, revenue,
investment, debt management, procurement, and accounting and auditing.
During FY2015, one of the City’s financial policies did have a significant impact on the financial
statements:
Pension Obligation Costs. In FY2006, the City issued general obligation bonds of $6,100,000 to finance
the police and firefighters’ pension fund actuary liability. Since the issuance of these bonds, the City has
made it policy to contribute the normal cost as well as the minimum actuarially sound contribution
annually that would arise from the fund being in a deficit position as of the actuarial date. For FY2015
this contribution was $391 thousand. This amount was $417 thousand in FY2014.
LONG-TERM FINANCIAL PLANNING
On October 1, 2005, the City’s payroll tax was increased ½ cent. As a result of the payroll tax increase,
the City Commission created the Investment Fund. The Investment Fund is funded with the ½ cent
increase and is dedicated to the following purposes: community redevelopment, economic development,
infrastructure capital investment, and property tax relief. During the FY2015 budget process, the
Commission reviewed numerous decision packages proposed for the Investment Fund Budget;
expenditures totaling approximately $5 million were appropriated.
The City has numerous infrastructure/capital items that will affect the long-term financial planning
process. The following projects are examples of future considerations facing the City:
Floodwall Restoration. The 12.5-mile long floodwall and levee system protecting a large portion of the
Paducah-McCracken area exceeds 70 years of age. It is still in good condition long beyond its design life;
however, it is in need of necessary repairs. In FY2011, the U.S. Army Corps of Engineers (USACE)
issued a Feasibility Report, which recommended certain rehabilitation projects to improve the reliability
and restore the system performance of the floodwall. It is anticipated the USACE will cover 65% of the
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expenses incurred and the City will be responsible for the remainder 35% by payment or credited by in-
kind services. The USACE and the City are now initiating Preconstruction Engineering and Design
(PED) and preparing plans and specifications for the reconstruction projects as listed within the
Feasibility Report. The design for the first priority is nearing completion. It is hopeful that construction
will begin on that phase in 2016. The estimated City’s portion for the total overall project costs is
approximately $6 million. In FY2009, the City proceeded with making the seriously needed repairs to the
corrugated metal pipes under the Floodwall by borrowing around $2 million, of which the USACE will
allow in-kind credit for this expense.
Riverfront Redevelopment Plan. The City’s Riverfront Redevelopment Plan includes proposed
improvements that will provide public amenities, recreational facilities & public spaces that will tie the
City’s downtown to the Ohio River. The plan includes a 360 foot transient dock, boat ramp, recreational
trails, and shoreline enhancements. In FY2007 the City was allocated $5.3 million in federal funds for
construction of Phase 1 and the Ohio River Boat Launch Project. Environmental assessment and
remediation procedures required by the permitting process temporarily stalled the construction of this
phase of the project. However, permits were finally secured, and the official groundbreaking for the
project was held in November 2012. The boat launch portion of the project has been completed. As of
June 30, 2015, Phase 1-A of the riverfront development project, which consists of installation of the
pilings and the placement of stone for mass fill, was completed. The Phase 1-B project has been awarded.
Construction will begin in December 2015 and proceed into 2016. This phase will include the gangway,
transient dock, wave attenuator, and the completion of the mass fill. Once construction is complete,
operating costs will be a long-term planning consideration.
City Hall Structure. In May 2014, the City Commission heard the findings of an engineering firm
engaged to perform an assessment of City Hall’s structure, layout, security, seismic upgrade requirements,
and renovation possibilities. This study shows that the 61,000 square foot building which opened in 1964
is showing significant deterioration in its concrete roof canopy and with many of its electrical and
mechanical systems. In October 2015 the Commission approved an ordinance to obtain design and
architectural services to examine options of renovating or rebuilding City Hall. This phase should be
completed by spring 2016. Either decision that is made will have a significant financial impact.
ECONOMIC CONDITION
The City continues to be aggressive in promoting economic development, since new developmental job
growth is necessary to ensure the continued stability of the City’s tax base. Economic indicators and
trends reflect that the area’s economy has remained fairly steady considering the nation’s recent economic
struggles. It is expected that the economy will continue to hold over the near-term. Area employment
increased in comparison to the prior year, with 27,089 persons employed (McCracken County) as of June
30, 2015.
The June 2015 unemployment rate was 5.6% (McCracken County), which is a decrease from 8.2% in the
prior year, and slightly exceeds the June 2015 federal unemployment rate of 5.3%. 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 1,175 for fiscal year 2015 valued at $50 million, which is down approximately $4
million from fiscal year 2014.
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.
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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, 2014. This was the twenty-
fourth consecutive year that the City achieved this prestigious award.
In order to be awarded a Certificate of Achievement for Excellence in Financial Reporting, a government
must publish an easily readable and efficiently organized comprehensive annual financial report. This
report must satisfy both generally accepted accounting principles and applicable legal requirements.
A Certificate of Achievement for Excellence in Financial Reporting is valid for a period of one year only.
We believe our current comprehensive annual financial report continues to meet the Certificate of
Achievement Program’s requirements, and we are submitting it to GFOA to determine its eligibility for
another certificate.
ACKNOWLEDGMENTS
The preparation of this report on a timely basis could not be accomplished without the efficient and
dedicated services of the entire staff of the Finance Department. We wish to express our appreciation to
all members of the Finance Department who assisted and contributed to its preparation, and special thanks
to Kemper CPA Group, LLP. We also thank the Mayor, City Manager, and City Commission for their
interest and support in planning and conducting the financial operations of the City in a responsible and
progressive manner.
CITY OF PADUCAH, KENTUCKY ORGANIZATIONAL CHART CITIZENS OF PADUCAH CITIZENS OF PADUCAH Mayor and Commissioners Advisory Board and Committees City Manager City Attorney City Clerk Paducah Riverfront Development Authority Parks Department Fire Department Police Department Planning Department Engineering/ Public Works Department -8- Information Systems Human Resources /Risk Management Finance
CITY OF PADUCAH, KENTUCKY
PRINCIPAL OFFICIALS
BOARD OF COMMISSIONERS
Mayor Gayle Kaler
Mayor Pro tem Allan Rhodes, Jr.
Commissioner Richard Abraham
Commissioner Sandra Wilson
Commissioner Carol Gault
CITY MANAGER
Jeff Pederson
Finance Jonathan Perkins, CPA
Police Chief Brandon Barnhill
Fire Chief Steve Kyle
City Engineer/Public Works Richard Murphy
Planning Stephen Ervin
Parks Services Mark Thompson
Paducah Riverfront Development Authority Steve Doolittle
Information Services Greg Mueller
City Clerk Tammy Sanderson
Human Resources/Risk Manager Steve Doolittle
Public Information Pam Spencer
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Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Paducah
Kentucky
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
June 30, 2014
Executive Director/CEO
CITY OF PADUCAH, KENTUCKY
FINANCIAL SECTION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2015
INDEPENDENT AUDITOR’S REPORT
Honorable Gayle Kaler, Mayor
Members of the Board of Commissioners
City of Paducah
Paducah, Kentucky
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business-type activities, the
aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the
City of Paducah, Kentucky, as of and for the year ended June 30, 2015, and the related notes to the financial statements,
which collectively comprise the City’s basic financial statements as listed in the table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with
accounting principles generally accepted in the United States of America; this includes the design, implementation, and
maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free
from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial
statements of the following component unit: Paducah Water Works, which represent 100 percent of the assets, net
position and revenues of the Component Units column. These financial statements were audited by another auditor
whose report has been furnished to us, and our opinions, insofar as it relates to the amounts included for Paducah Water
Works, discretely presented component unit, is based solely on the reports of the other auditor. We conducted our audit
in accordance with auditing standards generally accepted in the United States of America and the standards applicable
to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material
misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to
design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on
the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates
made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial
position of the governmental activities, the business-type activities, the aggregate discretely presented component units,
each major fund, and the aggregate remaining fund information of the City of Paducah, Kentucky, as of June 30, 2015,
and the respective changes in financial position, and, where applicable, cash flows thereof and the respective budgetary
comparison for the General Fund and the Special Revenue Investment Fund for the year then ended in accordance with
accounting principles generally accepted in the United States of America.
100 South 4th Street Suite 300 Paducah, KY 42001
Phone: (270)443-4400 Fax: (270)443-0963 kempercpa.com
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and
analysis and pension trust fund schedules on pages 13-28 and 93-98 be presented to supplement the basic financial
statements. Such information, although not a part of the basic financial statements, is required by the Governmental
Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic
financial statements in an appropriate operational, economic, or historical context. We have applied certain limited
procedures to the required supplementary information in accordance with auditing standards generally accepted in the
United States of America, which consisted of inquiries of management about the methods of preparing the information
and comparing the information for consistency with management’s responses to our inquiries, the basic financial
statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an
opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient
evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the
City of Paducah, Kentucky’s basic financial statements. The introductory section on pages 1-10; budgetary comparison
schedules, combining and individual nonmajor fund financial statements, budgetary comparison schedules for the
nonmajor funds, nonmajor enterprise financial statements, internal service and fiduciary financial statements on pages
99-121; and statistical section on pages 122-144, are presented for purposes of additional analysis and are not a
required part of the basic financial statements. The schedule of expenditures of federal awards on pages 142-143 is
presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133,
Audits of States, Local Governments, and Non-Profit Organizations, and is also not a required part of the basic
financial statements.
The budgetary comparison schedules, combining and individual nonmajor fund financial statements, budgetary
comparison schedules for the nonmajor funds, nonmajor enterprise financial statements, internal service and fiduciary
financial statements and the schedule of expenditures of federal awards are the responsibility of management and were
derived from and relate directly to the underlying accounting and other records used to prepare the basic financial
statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial
statements and certain additional procedures, including comparing and reconciling such information directly to the
underlying accounting and other records used to prepare the basic financial statements or to the basic financial
statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the
United States of America. In our opinion, the budgetary comparison schedules, combining and individual nonmajor
fund, budgetary comparison for the nonmajor funds, nonmajor enterprise, internal service and fiduciary financial
statements and the schedule of expenditures of federal awards are fairly stated in all material respects in relation to the
basic financial statements as a whole.
The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the
basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 17, 2015, on our
consideration of the City of Paducah, Kentucky’s internal control over financial reporting and on our tests of its
compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose
of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the
results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That
report is an integral part of an audit performed in accordance with Government Auditing Standards in considering City
of Paducah, Kentucky’s internal control over financial reporting and compliance.
Certified Public Accountants and Consultants
Paducah, Kentucky
December 17, 2015
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CITY OF PADUCAH, KENTUCKY
REQUIRED SUPPLEMENTARY INFORMATION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2015
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CITY OF PADUCAH, KENTUCKY
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2015
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, 2015. To fully understand the entire
scope of the City’s financial activities, this information should be read in conjunction with the letter of
transmittal (pages 1-7) and the basic financial statements (pages 29-94) 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 $24 million at the close of the 2014-2015 fiscal year.
Total net position increased $2,133,579.
At fiscal year end, City governmental funds reported a combined ending fund balance of $23.4
million. Approximately 18% of this total amount, $4.2 million, is restricted or committed for
highways/streets and capital improvements. Assigned fund balance comprises 24% of combined
fund balance; the majority of which is set aside for capital improvements.
At the end of the current fiscal year, unassigned General Fund fund balance was $12.5 million and is
available for spending at the City’s discretion. Cash makes up approximately $8.5 million. When
compared to final total appropriations, the General Fund cash balance is 26%.
II. Overview of Financial Statements
This discussion and analysis serves as an introduction to the City’s basic financial statements, which
consist of four components: 1) government-wide financial statements, 2) fund financial statements, 3)
component unit financial statements, and 4) notes to the financial statements. This report also contains
other supplementary information in addition to the basic financial statements.
A. Government-Wide Financial Statements
Government-wide financial statements are designed to provide readers with a broad overview of
City finances in a manner similar to private-sector business.
The Statement of Net Position presents information on all City assets and liabilities, with the
difference between assets and liabilities reported as net position. Monitoring increases and/or
decreases in net position over time may serve as a useful indicator of whether the financial position
of the City is improving, stagnating, or deteriorating.
The Statement of Activities presents information showing how the City’s net position changed
during the fiscal year. All net position changes are reported as soon as the underlying event giving
rise to the change occurs regardless of the timing of related cash flows. Revenues and expenses are
reported in the Statement of Activities for some items that will only result in cash flows in the
future.
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
debt. Business-type activities of the City include Solid Waste, Section Eight Housing, and the Civic
Center.
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Government-wide financial statements include not only the City (the primary government), but also
a legally separate Paducah Water Works (component unit) for which the City is financially
accountable. Financial information for the component unit is reported separately from the financial
information presented for the primary government itself.
The government-wide financial statements can be found on pages 29-32 of this report.
B. Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over segregated resources
for specific activities or objectives. The City of Paducah, like other state and local governments,
uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.
City funds can be divided into three categories:
1) Governmental Funds. Governmental funds are used to account for essentially the same
functions reported as governmental activities in the government-wide financial statements. Unlike
government-wide financial statements, however, governmental fund financial statements focus on
current sources and uses of spendable resources, as well as on balances of spendable resources
available at the end of the fiscal year. This information may be useful in evaluating a city’s near-
term financing requirements.
The City maintains ten (10) individual governmental funds. Information is presented separately in
the governmental fund balance sheet and in the governmental fund statement of revenues,
expenditures, and changes in fund balances for the General, General Capital Improvements,
Investment, and Debt Service Funds, all of which are considered to be major funds. Data from the
other six (6) 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 103-112.
Readers may better understand the long-term impact of the City’s near-term financing decisions by
comparing the narrow-focus governmental funds financial statements with governmental activities
in the government-wide financial statements. Exhibit 4 (pages 35-36) and Exhibit 6 (pages 39-40)
provide a reconciliation to ease comparison between the fund financial statements and the
government-wide statements.
The basic governmental fund financial statements can be found on pages 33-40 of this report.
2) Proprietary Funds. The City maintains two types of proprietary funds:
a. Enterprise Funds. Enterprise funds are used to report the same functions presented as
business-type activities in the government-wide financial statements and are used to account
for operations:
That are financed and operated in a manner similar to private business enterprises where
the intent of the governing body is that the costs of providing goods and services to the
general public on a continuing basis be financed or recovered primarily through user
charges; or
Where the governing body has decided that periodic determination of revenues earned,
expenses incurred, and/or net income is appropriate for capital maintenance, public
policy, management control, accountability or other purposes.
The City uses three enterprise funds to account for Solid Waste, Section Eight Housing, and
Civic Center. Civic Center receives subsidy from the General Fund.
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The City’s component unit enterprise is the Paducah Water Works. This component unit,
which has its own board of directors, is also an enterprise fund and is shown on pages 29-32.
b. Internal Service Funds are used to accumulate and allocate costs internally among the
City’s various functions. The City uses internal service funds to account for fleet services,
fleet replacement, risk management (insurance) and employee health programs. Internal
service funds have been allocated between governmental activities and business-type
activities in the government-wide financial statements based on revenue earned.
Proprietary funds provide the same kind of information as government-wide financial
statements, but in greater detail. Individual data for the nonmajor proprietary funds is presented
in the form of combining statements on pages 113-115 of this report. Individual data for the
internal service funds is likewise presented in the form of combining statements on pages 116-
118 of this report.
3) Fiduciary Funds. Fiduciary funds are used to account for resources held for the benefit of
parties outside the government and are not reflected in government-wide financial statements
because those resources are not available to support City programs. Individual data for the
City’s three (3) fiduciary funds (Appointive Employees’ Pension, Police and Firefighters’
Retirement, and Cemetery and Parks Trusts Funds) are presented in the form of combining
statements on pages 89-90 and 119-120 of this report.
C. Notes to the Financial Statements
The notes provide additional information that is essential to fully understanding data provided in the
government-wide and fund financial statements. Notes to the financial statements can be found on
pages 51-92 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 103-121 of this report.
III. Government-Wide Financial Analysis
As noted earlier, net position may serve over time as a useful indicator of the City’s financial
position. City assets exceeded liabilities by $24 million as of June 30, 2015.
For FY2015, the largest portion of the City’s net position ($40.5 million) reflects its investment in
capital assets (i.e., land, buildings, machinery, equipment and infrastructure) less outstanding related
debt used to acquire those assets. The City uses these capital assets to provide service to citizens
and, as a result, these assets are not available for future spending. The City’s capital assets
investment is reported net of related debt, but the resources to pay this debt must be provided from
other sources since the capital assets cannot be used to liquidate the liabilities. An additional portion
of City net position ($2.7 million) represents resources that are subject to external restrictions on
how they may be used.
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Effective this fiscal year, the City has implemented Government Accounting Standards Board
(GASB) Statement No. 68, which requires that the City report and fully disclose its share of net
pension liability, which is $34.3 million as of June 30, 2015. The City’s participation in the County
Employee Retirement System (CERS) has been the primary factor in driving the City’s unrestricted
net position to a negative $19.2 million in FY2015.
As of June 30, 2015, the City reports positive balances of total net position, both for the government
as a whole, as well as for its separate governmental and business-type activities.
City of Paducah, Kentucky
Net Position
June 30
Governmental Activities Business-Type Activities Total Primary Government
2015* 2014 2015* 2014 2015* 2014
Current Assets $ 37,866,007 $ 42,910,707 $ 7,177,768 $ 6,867,521 $ 45,043,775 $ 49,778,228
Capital Assets 49,322,057 50,620,162 1,133,226 1,210,415 50,455,283 51,830,577
Other noncurrent assets 3,954,388 4,333,300 - - 3,954,388 4,333,300
Total Assets 91,142,452 97,864,169 8,310,994 8,077,936 99,453,446 105,942,105
Deferred Outflows of
Resources 4,615,407 124,131 198,406 - 4,813,813 124,131
Current Liabilities 11,698,595 12,051,940 403,880 482,116 12,102,475 12,534,056
Noncurrent liabilities 61,082,324 30,335,342 3,642,371 2,110,888 64,724,695 32,446,230
Total liabilities 72,780,919 42,387,282 4,046,251 2,593,004 76,827,170 44,980,286
Deferred Inflows of Resources 3,264,613 - 172,089 - 3,436,702 -
Net position:
Invested in capital assets, net
of related debt 39,349,789 39,844,772 1,133,226 1,210,415 40,483,015 41,055,187
Restricted 2,572,075 2,374,180 124,012 437,483 2,696,087 2,811,663
Unrestricted (22,209,537) 13,382,066 3,033,822 3,837,034 (19,175,715) 17,219,100
TOTAL NET POSITION $ 19,712,327 $ 55,601,018 $ 4,291,060 $ 5,484,932 $ 24,003,387 $ 61,085,950
*Beginning net position as of July 1, 2014, was restated for implementation of GASB 68. Prior year has not been restated on this
chart.
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The exhibit below charts the City’s total net position from the implementation of GASB 34 through
the present (as previously mentioned, prior years have not been restated for implementation of
GASB 68).
Annual increases to total net position began in FY2005 primarily due to the increase of the City’s
payroll tax and the creation of the Investment Fund. The additional tax generates approximately
$4.5 million in revenue each year, which is used mostly for capital investment and economic
development related activities. After leveling off for several years, the City experienced a
significant increase in net position in FY2013 and FY2014. This was due to two consecutive years
of heavy capital development that was funded primarily with grant funding.
FY2015 has been the first year of significant decrease in net position since the implementation of
GASB 34. This is primarily due to implementation of GASB 68. As discussed earlier in this report,
the City’s participation in the County Employee Retirement System (CERS) has led to the addition
of a noncurrent liability in excess of $30 million.
A. Analysis of the City’s Operations
The following table provides a summary of the City’s operations for the years ended June 30, 2015
and 2014. Governmental activities increased the City’s net position by $1,798,703. Business-type
activities increased the City’s net position by $334,876.
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City of Paducah, Kentucky
Changes in Net Position
June 30
Governmental Activities Business-Type Activities Total Primary Government
Revenues: 2015* 2014 2015* 2014 2015* 2014
Program revenues:
Charges for services $ 2,222,494 $ 3,002,214 $ 4,497,350 $ 4,451,325 $ 6,719,844 $ 7,453,539
Operating grants/contributions 3,360,731 5,419,715 1,744,364 1,956,995 5,105,095 7,376,710
Capital grants/contributions 899,522 4,136,749 - - 899,522 4,136,749
General Revenues:
Property taxes 4,726,244 4,622,292 - - 4,726,244 4,622,292
Franchise taxes 207,742 178,729 - - 207,742 178,729
Telecommunications tax 689,843 691,916 - - 689,843 691,916
Insurance premium tax 3,786,514 3,831,792 - - 3,786,514 3,831,792
Vehicle tax 800,603 658,289 - - 800,603 658,289
Bank tax 229,722 225,373 - - 229,722 225,373
Gross receipts license tax 4,397,888 4,444,440 - - 4,397,888 4,444,440
Employee license tax 19,092,912 18,114,396 - - 19,092,912 18,114,396
Other taxes 665,057 656,828 - - 665,057 656,828
Intergovernmental revenue 371,718 374,198 - - 371,718 374,198
Unrestricted investment
earnings 176,229 232,204 39,565 48,255 215,794 280,459
Gain on sale of capital assets - (482,137) - 13,422 - (468,715)
Miscellaneous 16,870 -8,338 103,260 25,208 103,260
Total revenues 41,644,089 46,106,998 6,289,617 6,573,257 47,933,706 52,680,255
Expenses:
General Government 9,801,490 8,005,619 - - 9,801,490 8,005,619
Public safety 17,974,548 18,439,670 - - 17,974,548 18,439,670
Public service 7,600,982 6,982,536 - - 7,600,982 6,982,536
Park & recreation 2,811,533 2,750,531 - - 2,811,533 2,750,531
Planning & development 1,000,020 1,805,379 - - 1,000,020 1,805,379
Interest on long-term debt 850,827 1,084,016 - - 850,827 1,084,016
Solid Waste - - 3,843,081 3,985,233 3,843,081 3,985,233
Section Eight Housing - - 1,819,328 1,855,869 1,819,328 1,855,869
Civic Center - - 98,318 81,982 98,318 81,982
Total expenses 40,039,400 39,067,751 5,760,727 5,923,084 45,800,127 44,990,835
Increase (decrease) in Net
position before transfers 1,604,689 7,039,247 528,890 650,173 2,133,579 7,689,420
Transfers 194,014 212,128 (194,014) (212,128) - -
Change in net position 1,798,703 7,251,375 334,876 438,045 2,133,579 7,689,420
Net position, July 1, restated 17,913,624 48,349,643 3,956,184 5,046,887 21,869,808 53,396,530
NET POSITION, JUNE 30 $ 19,712,327 $ 55,601,018 $ 4,291,060 $ 5,484,932 $ 24,003,387 $ 61,085,950
*Beginning net position as of July 1, 2014 was restated for implementation of GASB 68. Prior year has not been restated in this chart.
- 19 -
B. Governmental Activities
As with most municipalities, the City’s governmental activities are heavily subsidized by taxes, with
little or no program revenue for each function. The chart below demonstrates the importance of tax
revenue to essential functions of the City.
The graph below depicts the breakdown of revenue by source for fiscal year 2015.
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In fiscal year 2015, the City derived approximately 84% 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 $27.3 million. This category of
revenue increased 3.4% from fiscal year 2014. Slight decreases in business license and insurance
premium tax were offset by a $978,516 or 5.4% increase in payroll withholding tax. None of these
changes appear to be the result of one significant taxpayer’s activity, but the result of multiple
entities having modest increases/decreases. Property taxes continue to be a stable source of revenue,
comprising nearly 12% of total revenue in FY2015.
C. Business-Type Activities
The chart below shows the operating results for each of the City’s business-type activities. These
activities should break-even; that is, the charges for services should be large enough to sustain
operations. For fiscal year 2015, business-type activities as a whole had an increase in net position
of $334,878. The Solid Waste Fund once again had a positive change in net assets that is consistent
with the prior year. Beginning in FY2012, an annual transfer of approximately $240,000 is made
from Solid Waste to the General Fund. The Phase II Storm Water Act requires that the City make
an effort to curb solid waste from the landfill/sewer system. As a result, three full time street
sweepers and eighteen right of way maintenance employees (one day a week) have been assigned to
this program. Because these are General Fund employees, the Solid Waste Fund is making monthly
interfund transfers to the General Fund to compensate for their use. Analysis of the remaining
business-type activities is included in Section IV-B of this report.
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IV. Financial Analysis of the City’s Funds
A. Governmental Funds
The focus of the City’s governmental funds is to provide information on near-term inflows, outflows
and balances of spendable resources. Such information is useful in determining the City’s financing
requirements. Unreserved fund balance serves as a useful measure of the City’s net resources
available for spending at the end of the fiscal year.
At the end of the fiscal year, the City governmental funds reported combined ending fund balances
of $23.4 million. In FY2011, the City implemented GASB Statement No. 54, Fund Balance
Reporting and Governmental Fund Type Definitions. The redefined categories of fund balance are
described below:
Nonspendable fund balance includes amounts that are not in a spendable form or are required
to be maintained intact indefinitely. For example, at the end of the fiscal year, the City had
$828,419 of real property held in inventory for urban development.
Restricted fund balance has external limitations on use that may be imposed by creditors,
grantors, contributors, or laws and regulations. For example, at the end of the fiscal year,
the City had $1,158,173 of municipal aid funds, which are restricted in use for paving by the
State of Kentucky
Committed fund balance has self-imposed limitations enacted by the highest level of decision
making that requires formal action at the same level to remove the limitations. The City had
$1,814,834 in fund balance committed for capital improvements in the Investment Fund.
Assigned fund balance has limitations resulting from intended use; formal action is not
required. Approximately 24% of the City’s fund balance is assigned for various purposes,
including capital improvements, public safety, and debt service.
Unassigned fund balance is the total fund balance in the General Fund in excess of the other
fund balance categories.
Approximately 54% of total fund balance, $12.5 million is unassigned General Fund’ fund balance,
which is available for spending at the government’s discretion but only up to the amount represented
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by cash. At year-end there was $8.5 million available as cash; the balance is tied up in other assets
including accounts receivable and property taxes collectible. City fiscal policy (Ordinance 2014-6-
8155) requires that an amount not less than 10% of the General Fund’s budgeted expenditures
remain undesignated in the fund balance, or $3.3 million, which leaves $9.3 million as unreserved
for fiscal year 2015.
As a measure of General Fund liquidity, readers may compare unassigned (formerly reported as
“unreserved”) fund balance to total General Fund expenditures. Unassigned General Fund’ fund
balance ($12.5 million) represents 38% of expenditures and transfers out ($32.9 million). This has
remained stable since the implementation of GASB 34, as illustrated in the table below.
The Investment Fund had a fund balance of $1.8 million, all of which is committed for capital
projects. The Investment Fund was authorized by the City Commission in fiscal year 2005-2006 as
a special revenue fund whose use is restricted to property tax reduction, economic development,
community redevelopment and capital and infrastructure projects. The Investment Fund captures all
manner of financial activities related to revenue from the ½ cent payroll tax increase, effective
October 1, 2005. The original FY2015 budget included appropriations in excess of anticipated
revenue by $272 thousand to fulfill ongoing commitments as well as fund several large multi-year
projects. Actual results of a $56 thousand increase in fund balance are due to changes in transfers to
the debt service fund. 1) There was a debt service payment budgeted for bonds that were not issued.
2) The transfer required for debt service on a rental building was lower than anticipated as a result
of the building being rented.
Fund balance in the General Capital Improvements fund increased by approximately $790 thousand
from the prior year to $5.5 million. The increase is due to funds set aside to complete capital
projects in FY2016. Capital improvement projects for the year are discussed in Section VI-A of this
report.
B. Proprietary Funds
The City’s proprietary funds provide the same information found in the government-wide financial
statements, but in more detail.
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Net position of the respective proprietary funds are:
Solid Waste $3,514,856
Section Eight Housing 125,863
Civic Center 133,336
Combined total net asset change for the three funds was an increase of $378,229, broken down as
follows: Solid Waste ($499 thousand increase), Section Eight Housing ($112 thousand decrease),
and Civic Center ($9 thousand decrease). The largest proprietary fund, Solid Waste, was discussed
under Business Type Activities (Section III-C).
V. General Fund Budgetary Highlights
Differences between the original budget and the final budget resulted in a $174 thousand decrease in
appropriations and can be briefly summarized as follows:
Appropriations
Department Increase Decrease
(In Thousands)
General Administration $ - $ 72
Finance - 31
Planning 3 -
Radio and Rental Property - 61
Human Rights - 2
Information Systems - 111
Human Resources/Risk Management - 80
Police - 521
Fire - 130
Public Works 56 -
Engineering Services - 64
Recreation - 276
PRDA 10 -
Other 1,105 -
General Administration had a decrease in appropriations of $72 thousand. The majority of this
decrease was due to unutilized contingency funds. Human Resources/Risk Management decreased
by $80 thousand. This department was without a director for the majority of the year.
Several departments experienced decreases in excess of $100 thousand. These decreases were
generally a result of salary slippage and equipment replacement that was budgeted but not
purchased.
Public Works had an increase in appropriations of $56 thousand. This was due to increased
electricity rates.
The primary components of the “Other” department category are operating transfers out, which are
typically made to the capital project fund. Large unanticipated interfund transfers were made this
year to fund the purchase and demolition of a building for a downtown development project
($357,000) and fund the purchase of a building and parking lot to expand Police operating
headquarters ($245,000). A transfer was also made to increase the cash reserve in the debt service
fund in the amount of $150,000.
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VI. Capital Asset and Debt Administration
A. Capital Assets
The City’s investment in capital assets for governmental and business-type activities as of June 30,
2015, is $50 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 2015, project and equipment additions totaled over $13 million, with $2.6 million
of that remaining in Construction in Progress at year-end. Some of the largest capital-type projects,
in terms of dollars in fiscal year 2015, are shown in the following table:
Transient Boat Dock $6,159,515
TeleTech Building (City’s 50%) 1,673,237
Greenway Trail – Phase II 954,238
Olivet Church Road ROW & Utility Relocation (Construction in Progress) 943,686
Olivet Church Road Construction (Construction in Progress) 266,322
Noble Park – Bank Stabilization 227,304
In the upcoming years, several street, economic development, riverfront development, quality of life
and drainage projects will continue and are estimated to cost several million dollars. Capital
improvement projects including infrastructure, City-owned facility improvements, continued
neighborhood revitalization, and street and sidewalk rehabilitation are among the projects to be
addressed.
City of Paducah, Kentucky
Capital Assets
(Net of Accumulated Depreciation)
June 30
Governmental Activities Business-Type Activities Total Primary Government
2015 2014 2015 2014 2015 2014
Land $ 10,383,332 $ 10,408,932 $ 62,152 $ 62,152 $ 10,445,484 $ 10,471,084
Land improvements 10,486,724 3,716,137 - - 10,486,724 3,716,137
Construction in
progress 4,025,248 12,299,347 - - 4,025,248 12,299,347
Buildings and
improvements 7,709,771 6,162,826 269,025 283,659 7,978,796 6,446,485
Infrastructure 12,062,994 13,413,098 - - 12,062,994 13,413,098
Equipment 1,488,273 1,337,857 397,284 463,695 1,885,557 1,801,552
Furnishings and
fixtures 14,353 16,165 - - 14,353 16,165
Vehicles 3,151,362 3,265,800 404,765 400,909 3,556,127 3,666,709
TOTALS $ 49,322,057 $ 50,620,162 $ 1,133,226 $ 1,210,415 $ 50,455,283 $51,830,577
Additional information on City capital assets can be found in Note 3 in the notes to financial
statements on pages 67-70.
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B. Long-Term Debt
At year-end, the City had $29,421,411 in outstanding bonds and notes payable, compared to
$31,225,647 at June 30, 2014 with maturities extending through 2032.
Governmental Activities
2015 2014
Kentucky League of Cities – 2003 $1,669,821 $1,849,709
Police/Firefighter Pension Fund Liability – 2006 285,000 4,400,000
Floodwall Rehabilitation – 2008 2,104,212 2,224,863
Convention Center Renovation – 2008 1,976,250 2,081,250
Refinanced Convention Center – 2010 5,385,000 5,805,000
Margaret Hank Agreement – 2011 116,078 136,637
Refinanced Rental Building – 2011 2,820,000 3,100,000
Murray State University Agreement – 2011 2,338,915 2,451,760
Public Pool Renovations – 2013 1,055,000 1,120,000
Economic Development – 2013 2,330,000 2,475,000
Refinanced Public Projects – 2014 5,100,000 5,460,000
Refinanced Police/Firefighter Pension Fund Liability - 2014 4,150,000 -
Net Premiums/Discounts 91,135 121,428
TOTALS $29,421,411 $31,225,647
During the year, the City had the following new debt issue:
Police/Firefighter Pension Fund Liability – Refinance. In November 2014, a $4.225 million
general obligation was issued to advance refund $3.845 of outstanding 2005 series bonds. The 2005
bonds were issued to finance the police and firefighters’ pension fund estimated pension liability.
Debt issues prior to July 1, 2014 are described below:
Public Improvement Projects – Refinance. In May 2014, a $5.46 million general obligation was
issued to refund $5.545 million of outstanding 2010 series bonds. The 2010 bonds were issued to
finance several public improvement projects including a major park parking lot renovation and
several resurfacing projects, sports park property acquisition, pavilion acquisition, greenway trail
development, and the public portion of a hotel purchase.
Economic Development. In September 2013, $2.475 million in general obligation taxable bonds
were issued to finance a portion of construction of 1) improvements to a speculative building and 2)
an approximately 30,000 square foot building (TeleTech). Each of these buildings are being utilized
for separate economic development projects.
Public Pool Renovations. In September 2013, $1.12 million in general obligation bonds were issued
to finance Noble Park’s pool renovation project.
Murray State University (MSU) Agreement. In November 2011, the City entered into a general
obligation note in the amount of $2,674,093 with McCracken County and MSU to finance the
construction of an educational facility to be occupied by Murray State University.
Rental Building – Refinance. In August 2011, a $3.91 million bond obligation was issued to
advance refund $3.78 million of outstanding 2004 series bonds. The 2004 bonds were issued to
finance the construction of a rental building in the Paducah Industrial Park West. The previous
- 26 -
agreement with McCracken County was renewed: 50% of the principal amount of the bonds was
issued on behalf of McCracken County, Kentucky.
Margaret Hank Building Agreement. In June 2011, the City entered into an agreement in the
amount of $188,533 with Margaret Hank Memorial Cumberland Presbyterian Church to finance the
acquisition of real property to be used for the development of an indoor recreational facility.
Convention and Performing Arts Center – Refinance. In August 2010, a $7.165 million general
obligation was issued to advance refund $6.725 million of outstanding 2001 series bonds. The 2001
bonds were issued to finance construction of the Luther F. Carson Four Rivers Center for the
Performing Arts and the expansion of the Julian Carroll Convention Center. The previous agreement
with McCracken County was renewed: 50% of the principal amount of the bond was issued on
behalf of McCracken County, Kentucky, and the County has issued the City a general obligation note
in a principal amount equal to 50% of the principal amount of the bonds.
Convention Center Renovation. In March 2009, McCracken County entered into an agreement in
the amount $5,000,000 with the Kentucky Association of Counties to finance renovations to the
Julian Carroll Convention Center. The note was issued by McCracken County; however, the City is
obligated for 50% of the principal amount through an Interlocal Cooperative Agreement between the
City and McCracken County.
Floodwall Rehabilitation. In March 2009, a $2.8 million general obligation was issued to finance
significant repairs to the City’s 60-year-old floodwall. The first stage of a $6 million project, this
money was used to fund the relining of the pipes, which have deteriorated with age.
Police/Firefighter Pension Fund Liability In fiscal year 2006, the City issued $6.1 million in
general obligation bonds to finance the police and firefighters’ pension fund estimated pension
liability.
Kentucky League of Cities. In fiscal year 2003, the City borrowed $3.5 million to fund a variety of
capital projects, including park improvements ($1.0 million), downtown infrastructure improvements
in conjunction with the FRC ($1.5 million), and City Hall, Police and other City-owned facility
improvements ($1.0 million).
The City’s legal debt limit under §158 of the Kentucky Constitution is 10% of total assessed value of
taxable property in Paducah; therefore, the debt limit is $233,374,672. The City’s latest bond rating
by Standard & Poor’s is AA-. The City has a relatively low amount of general obligation debt, which
explains our large legal debt margin.
The City of Paducah, Kentucky, issues and incurs debt in order to fund capital improvement projects,
purchase major capital equipment and facilities, and respond to other special funding needs. In fiscal
year 2015, less than 2% of the General Fund budget was expended for debt service, and thus has
minimal impact on current and future operations.
Additional information on the City’s long-term debt can be found in Note 3 in the notes to financial
statements on pages 71-76.
VII. Other Potentially Significant Matters.
A. Post-employment Benefits. Over the years, the City’s contribution to the Kentucky Retirement
System (CERS) has seen a substantial rise in costs that has significantly impacted the City’s
operating budget. The table and graph below show the actual cost of the City’s contributions to
CERS for both Non-Hazardous and Hazardous employees for selected fiscal years 1995, 2005, and
2015.
- 27 -
CERS Employer Contributions
Non-Hazardous Hazardous
FY Rate Amount % Chg Rate Amount % Chg
1995 8.82% $396,690 18.46% $879,995
2005 8.48% $584,660 47% 22.08% $1,541,057 75%
2015 17.67% $1,345,018 130% 34.31% $2,916,732 89%
In early spring 2013, the State of Kentucky passed a pension reform bill (Senate Bill 2) to prevent
pension costs from escalating even higher. This legislation established a hybrid cash balance plan
for participants entering the plan after January 1, 2014, that provides a retirement benefit based on
an individual’s accumulated account balance. It also reset the amortization period to a new 30-year
period beginning with FY2015. Other highlights include the elimination of automatic cost of living
increases for retirees and provisions for retirement “spiking.” However, employer contribution rates
will not differ for employees beginning participation after January 1, 2014. The contribution rates
will be determined based on all CERS membership, and any excess funds contributed on new
employees will be used to pay down the system’s unfunded liability. The City is hopeful that the
enactment of this legislation will reduce its required contribution over time.
B. Police & Fire Pension Fund (PFPF) Unfunded Liability. In fiscal year 2006, the City issued $6.1
million in general obligation bonds to eliminate the unfunded pension liability. With the sharp
decline in value of the national stock market in 2009, the PFPF’s equity investment dropped
accordingly. PFPF net assets dropped in 2009 by nearly $3.5 million, or 28.5% of the beginning net
assets (July 1, 2008). The Fund still remains in an unfunded position due to these events. The July
2015 actuary study shows that the PFPF unfunded pension liability is approximately $4 million as
the following chart displays.
- 28 -
Since the 2009 drop, the City has contributed approximately $400,000 annually to meet the
actuary’s recommended amount toward the unfunded pension liability. The valuation as of July 1,
2015, indicates the minimum actuarially sound contribution for FY2016 will be $416,844.
VIII. Requests for Information
This financial report is designed to provide a general financial overview for those interested in the City
of Paducah government finances. Questions or requests for additional financial information may be
addressed to Jonathan Perkins, Finance Director, City of Paducah, 300 South 5th Street, Paducah, KY
42003.
CITY OF PADUCAH, KENTUCKY
BASIC FINANCIAL STATEMENTS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2015
Exhibit 1
Component
Unit
Paducah
Governmental Business-type Water Works
Current Assets: Activities Activities Total Authority
Cash and cash equivalents 24,616,496$ 6,113,864$ 30,730,360$ 1,414,719$
Receivables, net:
Notes 1,271,375 - 1,271,375 -
Accounts 6,133,811 546,899 6,680,710 577,722
Grants 283,372 - 283,372 -
Interest 10,712 - 10,712 -
Property tax 5,144,733 - 5,144,733 -
Accrued unbilled revenues - - - 1,113,567
Internal balances (517,005) 517,005 - -
Inventory 892,534 - 892,534 645,471
Prepaid expenses - - - -
Other current assets 29,979 - 29,979 797,634
Total current assets 37,866,007 7,177,768 45,043,775 4,549,113
Noncurrent Assets:
Notes receivable 3,954,388 - 3,954,388 -
Capital assets:
Land and construction in progress 14,408,580 62,152 14,470,732 531,621
Depreciable capital assets 34,913,477 1,071,074 35,984,551 49,944,727
Other assets - - - 5,028,893
Total noncurrent assets 53,276,445 1,133,226 54,409,671 55,505,241
Total assets 91,142,452 8,310,994 99,453,446 60,054,354
Deferred Outflows of Resources:
Deferred pension contributions 4,079,846 198,406 4,278,252 468,678
Difference between projected and actuarial
earnings on pension plan investments 151,609 - 151,609 -
Deferred charges on refunding 383,952 - 383,952 -
Total deferred outflows of resources 4,615,407 198,406 4,813,813 468,678
CITY OF PADUCAH, KENTUCKY
STATEMENT OF NET POSITION
JUNE 30, 2015
ASSETS
-29-
Primary Government
Component
Unit
Paducah
Governmental Business-type Water Works
Current Liabilities: Activities Activities Total Authority
Voucher and accounts payable 2,092,871 231,803 2,324,674 747,648
Accrued payables 1,096,702 58,144 1,154,846 778,975
Unearned revenue 5,154,784 26,800 5,181,584 -
Accrued compensated absences 1,033,715 87,133 1,120,848 211,796
Accrued interest 95,363 - 95,363 -
Notes payable due within one year 430,288 - 430,288 344,600
Bonds payable due within one year 1,794,872 - 1,794,872 -
Other current liabilities - - - 219,366
Total current liabilities 11,698,595 403,880 12,102,475 2,302,385
Noncurrent Liabilities:
Accrued compensated absences 1,097,250 38,190 1,135,440 -
Landfill post-closure costs - 2,062,500 2,062,500 -
Pensions obligation 32,788,823 1,541,681 34,330,504 3,794,000
Notes payable 5,670,776 - 5,670,776 5,603,587
Bonds payable 21,525,475 - 21,525,475 -
Total noncurrent liabilities 61,082,324 3,642,371 64,724,695 9,397,587
Total liabilities 72,780,919 4,046,251 76,827,170 11,699,972
Deferred Inflows of Resources
Difference between projected and actuarial
earnings on pension plan investments 3,264,613 172,089 3,436,702 423,460
Total deferred inflows of resources 3,264,613 172,089 3,436,702 423,460
Net invested in capital assets 39,349,789 1,133,226 40,483,015 44,528,161
Restricted for:
Housing and development projects - 124,012 124,012 -
Capital projects & infrastructure 2,427,218 - 2,427,218 -
Public safety 144,857 - 144,857 -
Unrestricted (deficit) (22,209,537) 3,033,822 (19,175,715) 3,871,439
TOTAL NET POSITION 19,712,327$ 4,291,060$ 24,003,387$ 48,399,600$
See accompanying notes to the basic financial statements.
-30-
LIABILITIES
NET POSITION
Primary Government
Exhibit 2
FUNCTIONS/PROGRAMS Operating
Charges for Grants and
Primary Government:Expenses Services Contributions
Governmental activities:
General government 9,801,490 931,494 644,002$ 246,422$
Public safety 17,974,548 237,222 664,247 653,100
Public service 7,600,982 945,471 1,641,760 -
Parks and recreation 2,811,533 108,307 6,300 -
Planning and development 1,000,020 - 255,422 -
Interest on long-term debt 850,827 - 149,000 -
Total governmental activities (See Note 1) 40,039,400 2,222,494 3,360,731 899,522
Business-type activities:
Solid Waste 3,843,081 4,453,864 42,545 -
Section Eight Housing 1,819,328 - 1,701,819 -
Civic Center 98,318 43,486 - -
Total business-type activities 5,760,727 4,497,350 1,744,364 -
TOTAL PRIMARY GOVERNMENT 45,800,127$ 6,719,844$ 5,105,095$ 899,522$
Component Unit:
Paducah Water Works Authority 8,739,548$ 10,707,082$ -$ 914,212$
TOTAL COMPONENT UNITS 8,739,548$ 10,707,082$ -$ 914,212$
General revenues:
Taxes and licenses:
Property taxes, levied for general purposes
Franchise tax
Telecommunications tax
Insurance premium tax
Vehicle tax
Bank tax
Gross receipts license tax
Employee license tax
Other taxes
Transient room tax
Unrestricted investment earnings
Miscellaneous
Total general revenues
Transfers
Total general revenues and transfers
Change in net position
Net position - beginning as restated (Note 10)
Net position - ending
See accompanying notes to the basic financial statements.
Program Revenues
Capital
-31-
CITY OF PADUCAH, KENTUCKY
Grants and
Contributions
FOR THE YEAR ENDED JUNE 30, 2015
STATEMENT OF ACTIVITIES
Component Unit
Governmental Business-type Paducah Water
Activities Activities Total Works Authority
(7,979,572)$ -$ (7,979,572)$ -$
(16,419,979) - (16,419,979) -
(5,013,751) - (5,013,751) -
(2,696,926) - (2,696,926) -
(744,598) - (744,598) -
(701,827) - (701,827) -
(33,556,653) - (33,556,653) -
- 653,328 653,328 -
- (117,509) (117,509) -
- (54,832) (54,832) -
- 480,987 480,987 -
(33,556,653) 480,987 (33,075,666) -
- - - 2,881,746
- - - 2,881,746
4,726,244 - 4,726,244 -
207,742 - 207,742 -
689,843 - 689,843 -
3,786,514 - 3,786,514 -
800,603 - 800,603 -
229,722 - 229,722 -
4,397,888 - 4,397,888 -
19,092,912 - 19,092,912 -
665,057 - 665,057 -
371,718 - 371,718 -
176,229 39,565 215,794 15,185
16,870 8,338 25,208 49,261
35,161,342 47,903 35,209,245 64,446
194,014 (194,014) - -
35,355,356 (146,111) 35,209,245 64,446
1,798,703 334,876 2,133,579 2,946,192
17,913,624 3,956,184 21,869,808 45,453,408
19,712,327$ 4,291,060$ 24,003,387$ 48,399,600$
Net (Expense) Revenue and Changes in Net Assets
Primary Government
-32-
CITY OF PADUCAH, KENTUCKY
BASIC FINANCIAL STATEMENTS
FUND FINANCIAL STATEMENTS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2015
Exhibit 3
Special
General
Fund
Assets
Cash and cash equivalents 8,532,693$ 970,016$ 5,672,714$
Receivables:
Accounts 6,834,305 - 1
Grants 19,428 - 263,943
Property taxes (net of
allowances for uncollectibles)5,206,733 - -
Inventory - - 828,419
Due from other funds 29,979 1,144,818 -
Total Assets 20,623,138$ 2,114,834$ 6,765,077$
Liabilities
Voucher and accounts payable 541,549$ -$ 1,126,183$
Accrued payroll and payroll taxes 1,021,786 - -
Due to other funds 1,144,818 300,000 -
Unearned revenue - other - - 145,000
Accrued compensated absences 185,772 - -
Total liabilities 2,893,925 300,000 1,271,183
Deferred Inflows of Resources
Unavailable revenue-property taxes 5,179,981 - -
Fund Balances:
Nonspendable
Inventory - - 828,419
Restricted for:
Highways and streets - - -
Public safety - - -
Capital improvements - - -
Committed for:
Capital improvements - 1,814,834 -
Assigned for:
Capital improvements - - 4,665,475
Public safety - - -
Debt service - - -
Unassigned:
General Fund 12,549,232 - -
Total fund balances 12,549,232 1,814,834 5,493,894
TOTAL LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES 20,623,138$ 2,114,834$ 6,765,077$
See accompanying notes to the basic financial statements.
General
Capital
CITY OF PADUCAH, KENTUCKY
BALANCE SHEET
GOVERNMENTAL FUNDS
JUNE 30, 2015
Revenue
Investment
-33-
Fund Improvements
Debt
Service
Fund
652,319$ 2,903,157$ 18,730,899$
- 169,412 7,003,718
- - 283,371
- - 5,206,733
- - 828,419
- - 1,174,797
652,319$ 3,072,569$ 33,227,937$
-$ 146,233$ 1,813,965$
- 55,284 1,077,070
- - 1,444,818
- - 145,000
- - 185,772
- 201,517 4,666,625
- - 5,179,981
- - 828,419
- 1,158,173 1,158,173
- 144,857 144,857
- 1,269,045 1,269,045
- - 1,814,834
- - 4,665,475
- 298,977 298,977
652,319 - 652,319
- - 12,549,232
652,319 2,871,052 23,381,331
652,319$ 3,072,569$ 33,227,937$
Nonmajor
Governmental
Funds
Total
Funds
-34-
Governmental
Exhibit 4
Total fund balance - total governmental funds 23,381,331$
Amounts reported for governmental activities in the Statement
of Net Position are different because:
132,669
4,102,500
10,716
49,322,057
(203,550)
112,414
383,952
(3,264,613)
4,231,455 1,259,658
(Continued)
CITY OF PADUCAH, KENTUCKY
RECONCILIATION OF THE GOVERNMENTAL FUNDS
BALANCE SHEET TO STATEMENT OF NET POSITION
Delinquent property taxes receivable are not reported in the
governmental funds balance sheet since they are not considered
"available" revenues.
Interest receivableon the long-termnotes receivableis not reported on
the governmentalfunds balance sheet since neither the note receivable
nor the interest is available to pay current period expenditures.
JUNE 30, 2015
The long-term notes receivable are not reported in the governmental
funds balance sheet since they are not available to pay current period
expenditures.
Bond Premiums
Bond Discounts
Deferred refunding costs
Deferred pension related inflows
Deferred pension related outflows
-35-
Premiums, discounts and deferred inflows and outflows of resources
used in governmentalactivitiesare not current financialresources and,
therefore, are not reported in the governmental funds balance sheet:
Capital assets used in governmentalactivities are not current financial
resources and, therefore, are not reported in the governmentalfunds
balance sheet. This amount includescapital assets of Internal Service
Funds.
Exhibit 4
(Continued)
(1,882,828)
(95,363)$
$ 2,225,160
59,893,938 (62,119,098)
6,503,068$
(385,378)
(517,005) 5,600,685
NET POSITION OF GOVERNMENTAL ACTIVITIES 19,712,327$
See accompanying notes to the basic financial statements
-36-
Due within one year
Due after one year
Current assets
Net amount allocated to
Internal service funds are used by managementto charge the costs of
certain activities, such as insurance and fleet management, to
individual funds. The assets and liabilities of the Internal Service
Funds (net of amount allocated to business-type activities) not
included in other reconciling items are:
Current liabilities
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 ($62,119,098) are not due and payable in the
current period and, therefore, they are not reported in the
governmentalfunds balance sheet. See Note 3 for detail. The long-
term liabilities are:
CITY OF PADUCAH, KENTUCKY
RECONCILIATION OF THE GOVERNMENTAL FUNDS
BALANCE SHEET TO STATEMENT OF NET POSITION
The portion of accrued compensatedabsences not due and payable in
the current period, and therefore, not reported in the governmental
funds balance sheet.
JUNE 30, 2015
Exhibit 5
Special
Revenue General
General Investment Capital
Revenues:Fund Fund Improvements
Taxes 6,595,347$ -$ -$
Licenses 23,140,609 4,664,150 -
Charges for services 611,754 - -
Intergovernmental - - 17,920
Grants 619,550 - 1,600,707
Interest 131,073 - -
Property upkeep, rentals, sales and other 1,205,030 64,923 424,626
Total revenues 32,303,363 4,729,073 2,043,253
Expenditures:
Current operations:
General government 4,484,105 - -
Public safety 16,930,801 - -
Public service 5,017,714 - -
Parks and recreation 2,842,460 - -
Planning and development - 662,961 -
Intergovernmental and other 247,878 - -
Capital outlay - - 4,708,663
Debt service:
Principal requirement - - -
Debt issuance costs - - -
Interest requirement - - -
Total expenditures 29,522,958 662,961 4,708,663
Excess (deficiency) of revenues over expenditures 2,780,405 4,066,112 (2,665,410)
Other Financing Sources (Uses):
Issuance of refunding debt - - -
Payment to refunded bond escrow agent - - -
Discount on debt issued - - -
Transfers in 439,792 315,750 3,510,522
Transfers out (3,365,575) (4,325,962) (55,292)
Total other financing sources (uses)(2,925,783) (4,010,212) 3,455,230
Net change in fund balances (145,378) 55,900 789,820
Fund balances - beginning as restated (Note 10)12,694,610 1,758,934 4,704,074
Fund balances - ending 12,549,232$ 1,814,834$ 5,493,894$
See accompanying notes to the basic financial statements.
-37-
CITY OF PADUCAH, KENTUCKY
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2015
Debt
Service
Fund
-$ 391,826$ 6,987,173$
- - 27,804,759
- 237,217 848,971
634,256 592,241 1,244,417
- 276,072 2,496,329
- 17,338 148,411
289,002 427,981 2,411,562
923,258 1,942,675 41,941,622
- - 4,484,105
- 1,593,962 18,524,763
- 1,147,950 6,165,664
- - 2,842,460
- 287,336 950,297
- - 247,878
- - 4,708,663
2,158,385 - 2,158,385
- 51,461 51,461
817,191 - 817,191
2,975,576 3,080,709 40,950,867
(2,052,318) (1,138,034) 990,755
- 4,225,000 4,225,000
- (4,143,964) (4,143,964)
- (29,575) (29,575)
2,200,820 1,318,526 7,785,410
- (33,956) (7,780,785)
2,200,820 1,336,031 56,086
148,502 197,997 1,046,841
503,817 2,673,055 22,334,490
652,319$ 2,871,052$ 23,381,331$
Governmental
Total
FundsFunds
Nonmajor
Governmental
-38-
Exhibit 6
Net change in fund balances - total governmental fund 1,046,841$
Amounts reported for governmental activities in the Statement
of Activities are different because:
2,077,557
(350,777)
(27,370)
449,621
(4,225,000)
(30,566)
(3,328,868)$
(Continued)
Payments on property taxes recognized as revenues when received in the
governmental funds.
FOR THE YEAR ENDED JUNE 30, 2015
Collections on long-term notes receivables and related interest receivable are
revenues in the government funds when collected.
Governmental funds report capital outlays as expenditures.However,in the
Statement of Activities, the cost of those assets is allocated over their estimated
useful lives as depreciationexpense. This is the amount of capital outlays in the
current period. This amount includes Internal Service Fund's capital outlays of
$595,609.
Depreciation expense on capital assets is reported in the government-wide
Statement of Activitiesand Changes in Net Position, but does not require the use
of current financial resources. Therefore, depreciationexpenseis not reported as
an expenditure in governmental funds. This amount includes Internal Service
Funds' depreciation expense of $667,127.
The payments of a pension contribution requires the use of current financial
resources and, therefore, is reported as an expenditure in governmental funds.
However, the current year payments are deferred outflows of resources in the
government-widestatements. Deferred outflows of resources related to pension
expense decreased by this amount this year.
Only the loss on the disposal of capital assets is reported in the Statement of
Activities, whereas in the governmental funds, the proceeds from the sale
increases financial resources. Thus, the change in net position differs by the net
book value of capital assets disposed.
CITY OF PADUCAH, KENTUCKY
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
-39-
Proceeds of the issuance of debt provides current financial resources and is
reported as an other financing source in governmental funds.
Exhibit 6
(Continued)
5,998,945
7,730
(74,371)
290,115
(150,023)$
43,351
Capital Outlays (595,609)
667,127 (35,154)
CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES 1,798,703$
See accompanying notes to the basic financial statements.
-40-
Internal service funds are used by management to charge the costs of certain
activities, such as insurance and fleet management,to individualfunds. The net
revenueof the Internal Service Funds is reported with governmentalactivitiesnet
of the amount allocated to business-type activities and depreciation expense.
These amounts are as follows:
Change in net assets
business-type activities
Depreciation expense
Net of amount allocated to
Long-term accrued compensated absences do not require the use of current
financial resources and, therefore, are not reported as expenditures in
governmental funds.
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 position in the government-wide
Statement of Activities.
Governmentalfunds report the effect of bond premiums, discounts and refunding
costs when debt is issued, whereas these amounts are deferred and amortized in
the Statement of Activities.
TO THE STATEMENT OF ACTIVITIES
Accrued interest payments on debt do not require the use of current financial
resources. Interest expense is reported net of the change in accrued interest
payable in the government-wide Statement of Activities.
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2015
CITY OF PADUCAH, KENTUCKY
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND
Exhibit 7
Variance with
Final Budget
Positive
Original Final (Negative)
Revenues:
Taxes:
Real and personal,
current year 5,125,000$ 5,383,720$ 5,383,734$ 14$
Real and personal,
prior year 135,000 109,085 109,092 7
Franchise 157,000 207,735 207,742 7
Bank taxes 230,000 229,720 229,722 2
In lieu of tax payment 300,000 292,200 292,206 6
Penalty, interest and
advertising 46,000 55,485 55,492 7
Paducah Junior College
tax collections - 317,355 317,359 4
Total taxes 5,993,000 6,595,300 6,595,347 47
Licenses:
Business licenses 4,425,000 4,397,885 4,397,888 3
Employee earnings 14,325,000 14,428,760 14,428,760 -
Comcast fees 301,000 323,590 323,596 6
Penalties 175,000 260,505 260,509 4
Alcoholic beverages 121,000 127,500 127,500 -
Insurance premium tax 4,010,000 3,786,510 3,786,514 4
Building permits 135,000 127,655 127,657 2
Electrical permits 35,000 37,035 37,035 -
Zoning change fees 6,500 10,645 10,648 3
Miscellaneous building
and electrical fees 4,250 4,100 4,100 -
Payroll tax sharing with County (271,000) (363,600) (363,598) 2
Total licenses 23,266,750 23,140,585 23,140,609 24
Charges for services:
Tax collection fee 172,000 178,550 178,552 2
Administrative charge 271,720 284,220 284,220 -
Base court revenue 47,000 40,675 40,675 -
Recreation fees 109,200 108,300 108,307 7
Total charges for services 599,920 611,745 611,754 9
(Continued)
ActualBudgeted Amounts
-41-
CITY OF PADUCAH, KENTUCKY
GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2015
Amounts
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE - BUDGET AND ACTUAL
Exhibit 7
(Continued)
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Grants:
Police State Incentive 312,000$ 289,425$ 289,425$ -$
Fire State Incentive 265,000 263,155 263,158 3
Police supplemental grants 58,000 67,010 66,967 (43)
Total grants 635,000 619,590 619,550 (40)
Interest 103,000 131,065 131,073 8
Other:
Property rent and sales 683,460 674,425 674,432 7
Property upkeep and
maintenance 105,580 104,320 104,257 (63)
Contractual programs 6,000 7,095 7,097 2
E911 - GIS 27,685 27,685 27,685 -
Miscellaneous 165,725 391,550 391,559 9
Total other 988,450 1,205,075 1,205,030 (45)
Total revenues 31,586,120 32,303,360 32,303,363 3
Expenditures:
General government:
General administration:
Mayor and Commissioners 185,435 180,845 180,765 80
City Manager 432,350 432,205 432,207 (2)
City Clerk 129,560 135,155 135,061 94
Corporate Counsel 162,265 178,285 178,315 (30)
Non-departmental 787,600 787,905 787,899 6
Memberships and contingency 126,250 37,505 37,502 3
Civic beautification 3,500 3,500 3,483 17
Total general administration 1,826,960 1,755,400 1,755,232 168
PRDA 153,020 163,640 163,563 77
Finance:
Finance administration 257,155 253,985 253,958 27
Accounting and payroll 337,160 321,605 321,497 108
Revenue collection 404,670 392,255 392,145 110
Total finance 998,985 967,845 967,600 245
(Continued)
-42-
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
Budgeted Amounts
GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2015
FUND BALANCE - BUDGET AND ACTUAL
CITY OF PADUCAH, KENTUCKY
Exhibit 7
(Continued)
Variance with
Final Budget
Actual Positive
General government:Original Final Amounts (Negative)
Planning:
Administration 271,450$ 274,190$ 274,137$ 53$
Planning 91,680 93,335 93,286 49
Grants 149,185 154,605 154,363 242
Economic development 142,150 135,055 135,010 45
Total planning 654,465 657,185 656,796 389
Radio and rental property 145,980 85,200 85,009 191
Human rights 41,970 40,050 39,926 124
Information systems 697,880 586,950 586,867 83
Human resources/risk management 309,085 229,225 229,112 113
Total general government 4,828,345 4,485,495 4,484,105 1,390
Public safety:
Police:
Police administration 887,480 913,450 913,145 305
Patrol 6,503,230 6,160,505 6,160,336 169
Investigations 2,166,355 1,962,210 1,962,088 122
Total police 9,557,065 9,036,165 9,035,569 596
Fire:
Fire administration 599,615 529,090 528,963 127
Suppression 6,259,880 6,292,215 6,292,083 132
Prevention and inspection 171,020 167,555 167,465 90
Training 149,325 137,565 137,557 8
Construction 391,330 329,790 329,737 53
Code enforcement 454,655 439,855 439,427 428
Total fire 8,025,825 7,896,070 7,895,232 838
Total public safety 17,582,890 16,932,235 16,930,801 1,434
Public service:
Public works:
Street maintenance 2,032,110 1,968,265 1,967,921 344
Street lighting 720,000 871,655 871,652 3
Landscape maintenance 1,100,440 1,068,765 1,068,540 225
Total public works 3,852,550 3,908,685 3,908,113 572
(Continued)
Budgeted Amounts
GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2015
-43-
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE - BUDGET AND ACTUAL
CITY OF PADUCAH, KENTUCKY
Exhibit 7
(Continued)
Variance with
Final Budget
Actual Positive
Public service:Original Final Amounts (Negative)
Engineering services:
Engineering services 601,790$ 474,200$ 473,898$ 302$
Flood control 572,995 636,050 635,703 347
Total engineering services 1,174,785 1,110,250 1,109,601 649
Total public service 5,027,335 5,018,935 5,017,714 1,221
Parks and recreation:
Parks and recreation administration 821,910 791,925 791,685 240
Grounds maintenance 1,465,300 1,401,190 1,400,943 247
Pools and recreation programs 832,945 650,365 649,832 533
Total parks and recreation 3,120,155 2,843,480 2,842,460 1,020
Intergovernmental and other:
Cable authorit y 85,580 82,255 82,246 9
Intergovernmental expense - 317,360 317,359 1
Total intergovernmental and other 85,580 247,890 247,878 12
Total expenditures 30,644,305 29,528,035 29,522,958 5,077
Excess (deficiency) of revenues
over expenditures 941,815 2,775,325 2,780,405 5,080
Other financing sources (uses):
Operating transfers in 434,500 439,785 439,792 7
Operating transfers out (2,423,120) (3,365,590) (3,365,575) 15
Total other financing sources (uses) (1,988,620) (2,925,805) (2,925,783) 22
Net change in fund balance (1,046,805) (150,480) (145,378) 5,102
Fund balance - beginning 12,694,610 12,694,610 12,694,610 -
Fund balance - ending 11,647,805$ 12,544,130$ 12,549,232$ 5,102$
See accompanying notes to the basic financial statements.
-44-
CITY OF PADUCAH, KENTUCKY
Budgeted Amounts
GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2015
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE - BUDGET AND ACTUAL
Exhibit 8
Variance with
Final Budget
Positive
Original Final (Negative)
Revenues:
Licenses:
Employee earnings 4,775,000$ 4,664,150$ 4,664,150$ -$
Total licenses 4,775,000 4,664,150 4,664,150 -
Other:
Miscellaneous - 64,920 64,923 3
Total other - 64,920 64,923 3
Total revenues 4,775,000 4,729,070 4,729,073 3
Expenditures:
General government:
Planning and development:
Economic development 728,000 662,965 662,961 4
Total expenditures 728,000 662,965 662,961 4
Excess (deficiency) of revenues
over expenditures 4,047,000 4,066,105 4,066,112 7
Other financing sources (uses):
Operating transfers in 265,750 315,750 315,750 -
Operating transfers out (4,584,390) (4,325,965) (4,325,962) 3
Total other financing sources (uses) (4,318,640) (4,010,215) (4,010,212) 3
Net change in fund balance (271,640) 55,890 55,900 10
Fund balance - beginning 1,758,934 1,758,934 1,758,934 -
Fund balance - ending 1,487,294$ 1,814,824$ 1,814,834$ 10$
See accompanying notes to the basic financial statements.
ActualBudgeted Amounts
-45-
Amounts
CITY OF PADUCAH, KENTUCKY
SPECIAL REVENUE INVESTMENT FUND
FOR THE YEAR ENDED JUNE 30, 2015
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE - BUDGET AND ACTUAL
Exhibit 9
Nonmajor
Solid Enterprise
Current Assets: Waste Funds Totals
Cash and cash equivalents 5,675,006$ 438,858$ 6,113,864$ 5,885,597$
Accounts receivable 546,899 - 546,899 253,356
Due from other funds - - - 300,000
Inventory - - - 64,115
Total current assets 6,221,905 438,858 6,660,763 6,503,068
Noncurrent Assets:
Net capital assets:
Land 62,152 - 62,152 -
Depreciable capital assets 929,669 141,405 1,071,074 3,177,389
Total noncurrent assets 991,821 141,405 1,133,226 3,177,389
Total assets 7,213,726 580,263 7,793,989 9,680,457
Deferred Outflows of Resources:
Deferred pension contributions 172,120 26,286 198,406 52,832
Current Liabilities:
Voucher and accounts payable 133,132 68,692 201,824 278,908
Accrued payroll and payroll taxes 58,144 - 58,144 19,633
Accrued compensated absences 84,970 2,163 87,133 43,010
Unearned revenue 26,800 - 26,800 24,472
Due to other funds - 29,979 29,979 -
Total current liabilities 303,046 100,834 403,880 366,023
Noncurrent Liabilities:
Pensions obligation 1,337,430 204,251 1,541,681 410,522
Landfill post-closure costs 2,062,500 - 2,062,500 -
Accrued compensated absences 18,724 19,466 38,190 19,355
Total noncurrent liabilities 3,418,654 223,717 3,642,371 429,877
Total liabilities 3,721,700 324,551 4,046,251 795,900
Deferred Inflows of Resources
Difference between projected and actuarial
earnings on pension plan investments 149,290 22,799 172,089 45,824
Net invested in capital assets 991,821 141,405 1,133,226 3,177,389
Restricted - Housing - 124,012 124,012 -
Unrestricted 2,523,035 (6,218) 2,516,817 5,714,176
TOTAL NET POSITION 3,514,856$ 259,199$ 3,774,055 8,891,565$
Reconciliation to government-wide statements of net position:
Adjustment to reflect the consolidation of Internal Service Funds'
activities related to Enterprise Funds 517,005
NET POSITION OF BUSINESS-TYPE ACTIVITIES 4,291,060$
See accompanying notes to the basic financial statements.
Governmental
Activities
CITY OF PADUCAH, KENTUCKY
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
JUNE 30, 2015
-46-
Business-type Activities
ASSETS
LIABILITIES
NET POSITION
Funds
Service
Internal
Exhibit 10
Nonmajor
Solid Enterprise
Operating Revenues: Waste Funds Totals
Charges for services - internal -$ 43,486$ 43,486$ 5,518,437$
Charges for services - external 4,453,865 - 4,453,865 276,143
Miscellaneous 3,889 5,613 9,502 -
Total operating revenues 4,457,754 49,099 4,506,853 5,794,580
Operating Expenses:
Cost of sales and service 3,555,256 1,906,339 5,461,595 5,514,195
Depreciation and amortization 287,825 11,306 299,131 667,127
Total operating expenses 3,843,081 1,917,645 5,760,726 6,181,322
Operating income (loss)614,673 (1,868,546) (1,253,873) (386,742)
Nonoperating Revenues (Expenses):
Grants - program purpose 42,545 1,701,819 1,744,364 -
Interest and investment income 39,520 45 39,565 27,818
Gain (loss) on disposal of property
and equipment 42,187 - 42,187 19,512
Total nonoperating revenues (expenses)124,252 1,701,864 1,826,116 47,330
Income (loss) before contributions and
transfers 738,925 (166,682) 572,243 (339,412)
Contributions and Transfers:
Transfers in - 45,986 45,986 189,389
Transfers out (240,000) - (240,000) -
Total contributions and transfers (240,000) 45,986 (194,014) 189,389
Change in net position 498,925 (120,696) 378,229 (150,023)
Net position - beginning as restated (Note 10) 3,015,931 379,895 9,041,588
Net position - ending 3,514,856$ 259,199$ 8,891,565$
Reconciliation to government-wide statements of net position:
Adjustment to reflect the consolidation of Internal Service Funds'
activities related to Enterprise Funds (43,351)
CHANGE IN NET POSITION OF BUSINESS-TYPE ACTIVITIES 334,878$
See accompanying notes to the basic financial statements.
Internal
Service
Funds
-47-
ActivitiesBusiness-type Activities
CITY OF PADUCAH, KENTUCKY
STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN NET POSITION
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2015
Governmental
Exhibit 11
Nonmajor
Solid Enterprise
Cash Flows from Operating Activities: Waste Funds Totals
Cash received from customers 4,456,824$43,486$ 4,500,310$ -$
Cash received from interfund services provided - - - 6,090,145
Payments to suppliers (2,004,346)- (2,004,346) (205,804)
Payments to employees (970,904) (143,748) (1,114,652) (321,410)
Claims paid - - - (3,347,222)
Payments to internal service funds (444,517) (2,405) (446,922) -
Other receipts 3,889 5,613 9,502 -
Other payments - (1,787,427) (1,787,427) (1,517,960)
Net cash provided (used) by operating activities 1,040,946 (1,884,481) (843,535) 697,749
Cash Flows from Noncapital Financing Activities:
Grants - program purpose 42,545 1,649,429 1,691,974 -
Transfers from other funds - 45,986 45,986 189,389
Transfers to other funds (240,000) - (240,000) -
Net cash provided (used) by noncapital
financing activities (197,455) 1,695,415 1,497,960 189,389
Cash Flows from Capital and Related
Financing Activities:
Purchase of capital assets (221,943) - (221,943) (595,609)
Proceeds from sale of capital assets 42,187 - 42,187 35,738
Net cash provided (used) by capital and
related financing activities (179,756) - (179,756) (559,871)
Cash Flows from Investing Activities:
Interest on cash and investments 39,520 45 39,565 27,818
Net cash provided (used) by investing
activities 39,520 45 39,565 27,818
Net increase (decrease) in cash and cash
equivalents 703,255 (189,021) 514,234 355,085
Cash and cash equivalents, July 1, 2014 4,971,751 627,879 5,599,630 5,530,512
CASH AND CASH EQUIVALENTS,
JUNE 30, 2015 5,675,006$438,858$ 6,113,864$ 5,885,597$
Reconciliation of Operating Income (Loss) to Net
Cash Provided by Operating Activities:
Operating income (loss) 614,673$ (1,868,546)$(1,253,873)$ (386,742)$
Adjustments to reconcile operating income to
net cash provided by operating activities:
Depreciation and amortization 287,825 11,306 299,131 667,127
Change in assets and liabilities:
Receivables 2,959 - 2,959 10,483
Prepaid expenses 157,677 - 157,677 203,677
Inventories - - - 618
Due to other funds - - - 100,000
Pension obligation and related deferrals (11,243) (2,141) (13,384) (5,260)
Account and accrued payables (10,945) (25,100) (36,045) 107,846
NET CASH PROVIDED (USED) BY OPERATING
ACTIVITIES 1,040,946$ (1,884,481)$ (843,535)$ 697,749$
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, 2015
-48-
Governmental
Activities
Internal
Service
Exhibit 12
Private-
Pension purpose Agency
Funds Trusts Funds
Cash and cash equivalents 31,568$ 119,255$ 531,828$
Receivables:
Interest 14,035 - -
Investments at fair value
Money market funds 331,421 - -
Common stock 2,573,281 - -
Corporate bonds 377,462 - -
Mutual funds 3,101,669 1,050,004 -
Total assets 6,429,436 1,169,259 531,828$
Voucher and accounts payable 46 - -
Payroll taxes and withholdings
payable - - 531,828$
Total liabilities 46 - 531,828$
Held in trust for pension benefits
and other purposes 6,429,390$ 1,169,259$
See accompanying notes to the basic financial statements
NET POSITION
Primary Government
-49-
ASSETS
LIABILITIES
CITY OF PADUCAH, KENTUCKY
STATEMENT OF NET POSITION
FIDUCIARY FUNDS
JUNE 30, 2015
Exhibit 13
Private-
Pension purpose
Additions: Funds Trusts
Contributions:
Employer 391,468$ -$
Plan members 6,088 -
Private donations - 2,440
Total contributions 397,556 2,440
Investment income:
Net increase (decrease) in
fair value of investments 139,426 (63,196)
Interest and dividends 171,529 96,988
Net investment income 310,955 33,792
Total additions 708,511 36,232
Deductions:
Benefits 1,406,130 -
Capital outlay - 66,388
Administrative expenses 56,648 14,382
Total deductions 1,462,778 80,770
Change in net position (754,267) (44,538)
Net position - beginning 7,183,657 1,213,797
Net position - ending 6,429,390$ 1,169,259$
See accompanying notes to the basic financial statements.
-50-
STATEMENT OF CHANGES IN NET POSITION
CITY OF PADUCAH, KENTUCKY
FIDUCIARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2015
CITY OF PADUCAH, KENTUCKY
NOTES TO THE FINANCIAL STATEMENTS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2015
- 51 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2015
Note 1 - Summary of Significant Accounting Policies:
General Statement
The City of Paducah (City) complies with generally accepted accounting principles (GAAP) as applied to
governmental units. This requires the use of the accrual basis of accounting for government-wide
financial statements and proprietary funds financial statements and a modified accrual basis of accounting
for the governmental funds financial statements. The Governmental Accounting Standards Board (GASB)
is the accepted standard-setting body for establishing governmental accounting and financial reporting
principles. The financial reporting entity, basis of accounting, and other significant policies employed by
the City are summarized as follows:
Financial Reporting Entity
The City operates under a City Manager form of government. The Board of Commissioners consists of a
Mayor and four Commissioners elected at large by the citizens on a non-partisan basis. As required by
generally accepted accounting principles, the financial statements of the reporting entity include those of
the City of Paducah (the primary government) and its component units. The component units discussed
below are included in the City’s reporting entity because of the significance of their operational or
financial relationships with the City.
Blended Component Units
Police and Firefighters’ Pension Fund – This retirement fund was established for the benefit of the
police and firemen of the City. It is administered by a Board of Trustees consisting of the Mayor, City
Finance Director and representatives of the Police and Fire Departments. The Board is authorized to
establish benefit levels and to approve actuarial assumptions used in the determination of contribution
levels. The pension fund is reported as a fiduciary fund and does not issue separate financial statements.
Discretely Presented Component Units
The component unit column in the basic financial statements includes the financial data of the City’s other
component unit. It is reported in a separate column to emphasize that it is legally separate from the City.
The following component unit is included in the reporting entity because of its financial relationship with
the City; and, the City is able to impose its will on the organization.
Paducah Water Works – The City of Paducah Water Works Commission is appointed by the Mayor.
The rates for user charges and bond issuance authorizations are subject to approval by the City
Commission of the City of Paducah.
Complete financial statements of the individual component unit can be obtained from its respective
administrative office at the following location:
Paducah Water Works
1801 N. 8th Street
Paducah, Kentucky 42003
(Continued)
- 52 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2015
Note 1 - Summary of Significant Accounting Policies:
Related Organizations
City officials are also responsible for appointing the members of boards of other organizations; but, the
City’s accountability for these organizations do not extend beyond appointing authority. The
organizations listed below are notable related organizations which have not been included as component
units in the City’s report.
Transit Authority of the City of Paducah – The Transit Authority is a legally separate entity that
provides for transit operations both within and outside the City. The Transit Authority is not financially
accountable to the City.
Paducah Housing Authority – The Paducah Housing Authority (PHA) is a legally separate entity that
provides for construction, operation, and management of low income housing projects within the City.
PHA is a legally separate entity and is not financially accountable to the City.
Paducah Power System – The Paducah Power System (PPS) is a legally separate entity that provides
electric utilities to residents in the Paducah area. PPS is not financially accountable to the City.
Joint Sewer Agency – As of July 1, 1999, the assets and liabilities of the Wastewater/Stormwater Fund
were transferred to the Paducah-McCracken County Joint Sewer Agency pursuant to a municipal order
dated June 29, 1999. The Paducah-McCracken County Joint Sewer Agency is a legally separate entity
and is not financially accountable to the City.
Forest Hills Village, Inc. – The Corporation’s purpose is to manage City of Paducah properties known
as “Forest Hills Housing Development”. The City and Corporation have a lease agreement detailing
the terms and conditions of operations. Forest Hills Village, Inc. is a legally separate entity and is not
financially accountable to the City.
Paducah Junior College, Incorporated (PJC) – The College is a part of the University of Kentucky
Community College System which is now administered by the Kentucky Community and Technical
College System. Under this system, the University of Kentucky receives the monies from student
tuition, fees and other related income and provides the financing for the operational budget of the
College. A tax levied and collected by the City is a primary revenue source for the College. These
funds, as well as gifts and grants made to the College, may be used for the acquisition or improvement
of property or to finance programs beyond the level of those normally provided by community colleges
in the University of Kentucky system. PJC is a legally separate entity and is not financially
accountable to the City.
Mainstreet – Mainstreet is a 501(c)3 established for the promotion of cultural and economic growth in
Downtown Paducah. Mainstreet is a legally separate entity and is not financially accountable to the
City.
(Continued)
- 53 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2015
Note 1 - Summary of Significant Account Policies:
Basis of Presentation
Government-wide Financial Statements
The Statement of Net Position and Statement of Activities display information about the reporting
government as a whole. They include all funds of the reporting entity except for fiduciary funds. The
statements distinguish between governmental and business-type activities. Governmental activities
generally are financed through taxes, intergovernmental revenues, and other nonexchange revenues.
Business-type activities are financed in whole or in part by fees charged to external parties for goods or
services.
Fund Financial Statements
Fund financial statements of the reporting entity are organized into funds, each of which is considered to
be separate accounting entities. Each fund is accounted for by providing a separate set of self-balancing
accounts that constitute its assets, deferred outflows of resources, liabilities, deferred inflows of resources,
fund equity, revenues, and expenditure or expenses. Funds are organized into three major categories:
governmental, proprietary, and fiduciary. An emphasis is placed on major funds within the governmental
and proprietary categories. A fund is considered major if it is the primary operating fund of the City or
meets the following criteria:
a. Total assets, liabilities, revenues, or expenditures/expenses of that individual governmental or
enterprise fund are at least ten percent of the corresponding total for all funds of that category or
type; and
b. Total assets, liabilities, revenues, or expenditures/expenses of the individual governmental fund or
enterprise fund are at least five percent of the corresponding total for all governmental and enterprise
funds combined.
The funds of the financial reporting entity are described below:
Governmental funds are those funds through which most governmental functions typically are financed.
The measurement focus of governmental funds is on the sources, uses and balance of current financial
resources. The City has presented the following major governmental funds:
General Fund – To account for resources traditionally associated with governments which are not
required to be accounted for in another fund.
Special Revenue Investment Fund – To account for restricted funds from employee license fee used for
economic development, community redevelopment and infrastructure capital investments within
Paducah.
General Capital Improvements – To account for the acquisition or construction of major capital projects
other than those financed by proprietary fund operations and special assessments.
Debt Service Fund – To account for the accumulation of resources and payment of bond and note
principal and interest, and capital lease activity.
The City has presented the following major proprietary fund:
Solid Waste Fund – To account for the provision of refuse services to the residents of the City.
(Continued)
- 54 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2015
Note 1 - Summary of Significant Account Policies:
Basis of Presentation
Fund Financial Statements
Additionally, the City reports the internal service funds which are used to account for the fleet
management services, self funded property and casualty self insurance, and self funded health insurance
provided to departments of the City.
Fiduciary funds report resources held in trust. Two of these funds are single-employer defined benefit
funds and are administered by the City. These funds are Police and Firefighters' Pension Fund (PFPF) and
Appointive Employees' Pension Fund (AEPF). Pension trust funds report the receipt, investment, and
distribution of retirement contributions. The remaining funds are private-purpose trust funds which report
the receipt and distribution of in accordance with maintenance trust agreements.
The Agency Fund accounts for the City's payroll wages, taxes and related withholdings.
Measurement Focus
Measurement focus is a term used to describe “which” transactions are recorded within the various
financial statements. Basis of accounting refers to “when” transactions are recorded regardless of the
measurement focus applied.
On the government-wide Statement of Net Position and the Statement of Activities, both governmental
and business-like activities are presented using the economic resources measurement focus as defined in
item b. below.
In the fund financial statements, the “current financial resources” measurement focus or the “economic
resources” measurement focus is used as appropriate:
a. All governmental funds utilize a “current financial resources” measurement focus. Only current
financial assets and liabilities are generally included on their balance sheets. (The City’s deferred
outflows of resources and deferred inflows of resources are noncurrent) Their operating statements
present sources and uses of available spendable financial resources during a given period. These
funds use fund balance as their measure of available spendable financial resources at the end of the
period.
b. The proprietary, pension, and private-purpose trust funds and financial statements of City
component units utilize an "economic resources" measurement focus. The accounting objectives of
this measurement focus are the determination of operating income, changes in net position (or cost
recovery), financial position, and cash flows. All assets and liabilities (whether current or
noncurrent) associated with their activities are reported. Proprietary, pension, and private-purpose
trust fund equity is classified as net position.
c. Agency funds are not involved in the measurement of results of operations; therefore, measurement
focus is not applicable to them.
Basis of Accounting
In the government-wide Statement of Net Position and Statement of Activities, both governmental and
business-type activities are presented using the accrual basis of accounting generally including the
reclassification or elimination of internal activity (between or within funds). Under the accrual basis of
accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred
or economic asset used.
(Continued)
- 55 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2015
Note 1 - Summary of Significant Account Policies:
Basis of Accounting
In the fund financial statements, governmental funds are presented on the modified accrual basis of
accounting. Under this modified accrual basis of accounting, revenues are recognized when “measurable
and available.” Measurable means knowing or being able to reasonably estimate the amount. Available
means collectible within the current period or within sixty days after year end. Expenditures (including
capital outlay) are recorded when the related fund liability is incurred, except for general obligation bond
principal and interest which are reported when due. Agency funds are presented using the accrual basis of
accounting.
All proprietary, pension, and private-purpose funds utilize the accrual basis of accounting. Under the
accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the
liability is incurred or economic asset used.
Revenues – Exchange and Non-Exchange Transactions
Revenue resulting from exchange transactions, in which each party gives and receives essentially equal
value, is recorded on the accrual basis when the exchange takes place. On a modified accrual basis,
revenue is recorded in the fiscal year in which the resources are measurable and become available.
Available means that the resources will be collected within the current fiscal year or are expected to be
collected soon enough thereafter to be used to pay liabilities of the current fiscal year. For the City,
available means expected to be received within sixty days of year end.
Non-exchange transactions, in which the City receives value without directly giving equal value in return,
include employee license taxes, property taxes, grants, entitlements, and donations. The City considers
property taxes as available if they are collected within sixty days after year end. Revenue from grants,
entitlements, and donations is recognized in the year in which all eligibility requirements have been
satisfied. Eligibility requirements include timing requirements, which specify the year when the resources
are required to be used or the year when use is first permitted, matching requirements, in which the City
must provide local resources to be used for a specified purpose, and expenditure requirements, in which
the resources are provided to the City on a reimbursement basis. On a modified accrual basis, revenue
from non-exchange transactions must also be available before it can be recognized.
The revenues susceptible to accrual are taxes, intergovernmental, employer and employees’ contributions
to trust funds, interest revenue, and charges for services. Permit revenues are not susceptible to accrual
because generally they are not measurable until received in cash.
Unearned revenue
The City reports unearned revenue on its government-wide statement of net position and the fund financial
statements. Unearned revenues arise when potential revenue does not meet both the "measurable” and
“available” criteria for recognition in the current period. Unearned revenues also arise when resources are
received by the City before it has a legal claim to them, as when grant monies are received prior to the
incurrence of qualifying expenditures. In subsequent periods, when both revenue recognition criteria are
met, or when the City has a legal claim to the resources, the liability for unearned revenue is removed and
revenue is recognized.
Allocation of Indirect Expenses
The City allocates indirect expenses primarily comprised of fleet management services and various self-
funded insurance coverage provided to departments and employees of the City not directly allocated.
Allocations are charged to functions based on use by weighted-average methodology.
(Continued)
- 56 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2015
Note 1 - Summary of Significant Accounting Policies:
Budgets and Budgetary Accounting
The City legally adopts annual budgets for all governmental and proprietary funds except for Section Eight
Housing Fund. The City follows these procedures in establishing the budgetary data reflected in these
financial statements:
1. Prior to July, the City Manager submits to the City Commission a proposed operating budget for the
fiscal year commencing on July 1. The operating budget includes proposed expenditures and the
means of financing those.
2. Public hearings are conducted by the City to obtain taxpayer comments.
3. Prior to July, the budget is legally enacted through passage of an ordinance.
4. The City Manager is authorized to transfer budgeted amounts between departments and their line
items; however, any revisions that alter the total expenditures must be approved by the City
Commission.
5. Formal budgetary integration is employed as a management control device during the year; and, the
budget is legally adopted. Budget amendments are also legally adopted.
6. The budget is adopted on the modified accrued basis of accounting.
Encumbrance accounting, under which purchase orders, contracts, and other commitments for 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, 2015.
Cash and Investments
The City Commission updated and adopted formal deposit and investment policies in January 2001.
These policies apply to all City funds not contained in public trusts. The pension trust fund has investment
policies separately approved by their oversight board. The private purpose trust has not adopted a deposit
and investment policy.
For the purpose of the Statement of Net Position, “cash and cash equivalents” includes all demand and
savings accounts of the City. For the purpose of the proprietary fund Statement of Cash Flows, “cash and
cash equivalents” include all demand and savings accounts and certificates of deposit, or short-term
investments with an original maturity of three months or less.
Investments are reported at fair value which is determined using selected bases. Short-term investments
are reported at cost, which approximates fair value. Securities traded on a national or international
exchange are valued at the last reported sales price at current exchange rates. Managed funds, related to
the pension and private purpose trust funds not listed on an established market, are reported at estimated
fair value as determined by the respective fund managers based on quoted sales prices of the underlying
securities. Cash deposits and certificates of deposit are reported at carrying amount which reasonably
estimates fair value. Additional cash and investment disclosures are presented in Note 3.
(Continued)
- 57 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2015
Note 1 - Summary of Significant Accounting Policies:
Receivables
Major receivable balances for the governmental activities include property taxes, employee earnings taxes,
business licenses, insurance premiums taxes, franchise taxes, grant revenue, and interlocal note
receivables. Business-type activities report utilities and interest earnings as their major receivables.
Interlocal note receivables include an outstanding loan of $911,375 at the end of the fiscal year due from
the Greater Paducah Economic Development Council, Inc. related to development and construction of an
intermodal industrial park. The note is non-interest bearing, secured by real property within the industrial
park, and due on demand. The City expects full collection of the receivable.
The government-wide statements also include general obligation notes receivable related to the general
obligation bonds outstanding as described in Note 3. In the fund financial statements, receivables in
governmental funds include revenue accruals such as franchise tax, employee earnings taxes, business
licenses, insurance and grants, and other similar intergovernmental revenues since they are usually both
measurable and available.
Nonexchange transactions collectible but not available are deferred. Interest and investment earnings are
recorded when earned only if paid within sixty days since they would be considered both measurable and
available. Proprietary fund receivables include revenues earned at year end and not yet received. Utility
accounts receivable and interest earnings compose the majority of proprietary fund receivables.
Allowances for uncollectible accounts receivable are based upon historical trends and the periodic aging of
accounts receivable.
Interfund Receivables and Payables
During the course of operations, numerous transactions occur between individual funds that may result in
amounts owed between funds. Those related to goods and services type transactions are classified as “due
to and from other funds.” Short-term interfund loans are reported as “interfund receivables and payables.”
Long-term interfund loans (noncurrent portion) are reported as “advances from and to other funds.”
Interfund receivables and payables between funds within governmental activities are eliminated in the
Statement of Net Position. See Note 3 for details of interfund transactions, including receivables and
payables, at year end.
Inventories
Inventories are stated at cost on a first-in, first-out basis. Inventory consists of expendable supplies of
$64,115 held for consumption and real property of $828,419 held for urban development.
Capital Assets
The accounting treatment of property, plant and equipment (capital assets) depends on whether the assets
are used in governmental fund operations or proprietary fund operations and whether they are reported in
the government-wide or fund financial statements.
(Continued)
- 58 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2015
Note 1 - Summary of Significant Accounting Policies:
Capital Assets
Government-wide Statement
In the government-wide financial statements, property, plant and equipment are accounted for as capital
assets. All capital assets are valued at historical cost or estimated historical cost if actual is unavailable,
except for donated capital assets which are recorded at their estimated fair value at the date of donation.
Estimated historical cost was used to value the majority of the assets acquired prior to June 30, 2004.
Assets capitalized have an original cost of $500 or more prior to July 1, 1999, $2,500 or more after July 1,
1999, and $3,000 or more after June 24, 2009. Prior to July 1, 2002, governmental funds’ infrastructure
assets were not capitalized. These assets have been valued at estimated historical cost.
Capital assets of the primary government are depreciated over the estimated useful lives using the straight-
line method. The estimated useful lives are as follows:
Land improvements 10-15 Years
Buildings 30 Years
Building improvements 10-15 Years
Infrastructure 15-30 Years
Equipment 7-9 Years
Furnishings and fixtures 3-5 Years
Vehicles 5-7 Years
Fund Financial Statements
In the fund financial statements, capital assets used in governmental fund operations are accounted for as
capital outlay expenditures of the governmental fund upon acquisition. Capital assets used in proprietary
fund operations are accounted for the same as in the government-wide statements.
Deferred Outflows/Inflows of Resources
Government-wide Statement
In addition to assets, the statement of financial position will sometimes report a separate section for
deferred outflows of resources. This separate financial statement element, deferred outflows of resources,
represents the consumption of net position that applies to a future period(s) and so will not be recognized
as an outflow of resources (expense/expenditure) until then. The government has three items that qualifies
for reporting in the category. These are the deferred charge on refunding, deferred pension contributions,
and deferred difference between projected and actuarial earnings on pension plans investments reported in
the statements of net position. A deferred charge on refunding results from the difference in the carrying
value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter
of the life of the refunded or refunding debt.
A deferred pension contribution results from pension contributions subsequent to the measurement date of
the pension plan. This amount is deferred and recognized as a component of the change in pension plan
liability in the next measurement period. A difference between projected and actuarial earnings on pension
plan investments results from actual investment earnings above or below actuarial projected earnings. This
item, difference between projected and actuarial earnings on pension plan investments, is deferred and
amortized over 5 years in future periods as a component of the pension expense.
(Continued)
- 59 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2015
Note 1 - Summary of Significant Accounting Policies:
Deferred Outflows/Inflows of Resources
In addition to liabilities, the statement of financial position will sometimes report a separate section for
deferred inflows of resources. This separate financial statement element, deferred inflows of resources,
represents an acquisition of net position that applies to a future period(s) and so will not be recognized as
an inflow of resources (revenue) until that time. The Government has only one type of item related to the
City’s pension plans that qualifies for reporting in this category. A difference between projected and
actuarial earnings on pension plan investments results from actual investment earnings above or below
actuarial projected earnings. This item, difference between projected and actuarial earnings on pension
plan investments, is deferred and amortized over 5 years in future periods as a component of the pension
expense.
A summary of change in deferred outflows/inflows of resources is as follows:
Balance
July 1, 2014
Additions
Reductions
Balance
June 30, 2015
Deferred outflows of resources
Deferred charge on refunding
Governmental Activities $ 124,131 $ 298,963 $ (39,142) $ 383,952
Deferred pension contributions
Governmental Activities $ 4,148,987 $ 4,079,846 $ (4,148,987) $ 4,079,846
Business-Type Activities $ 215,695 $ 198,406 $ (215,695) $ 198,406
Deferred difference between
Projected and actuarial earning
Governmental Activities $ 2,658 $ 187,020 $ (38,069) $ 151,609
Deferred inflows of resources
Deferred difference between
Projected and actuarial earning
Governmental Activities $ 435,240 $ 2,938,183 $ (108,810) $ 3,264,613
Business-Type Activities $ - $ 172,089 $ - $ 172,089
Fund Financial Statements
The government has only one type of item, which arises only under a modified accrual basis of account,
which qualifies for reporting as deferred inflows of resources. Accordingly, the item, unavailable revenue,
is reported only in the governmental funds balance sheet. The governmental funds report unavailable
revenues for one source: property taxes. This amount is deferred and recognized as an inflow of resources
in the period that the amount becomes available.
Restricted Assets
Certain proceeds of enterprise fund revenue bonds, as well as certain resources set aside for their
repayment, are classified as restricted assets on the balance sheet because their use is limited to applicable
bond covenants.
Accumulated unpaid vacation, sick pay, and other employee benefit amounts are recorded as long-term
debt in the government-wide statements. The current portion of accrued compensated absences is
estimated based on historical trends. In the fund financial statements, governmental funds report only the
matured compensated absence liability payable from expendable available financial resources, while the
proprietary funds report the liability as it is incurred.
(Continued)
- 60 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2015
Note 1 - Summary of Significant Accounting Policies:
Restricted Assets
Accumulations for vacation pay are restricted to a maximum of 50 days and provide vesting rights upon
completion of six months service. Accumulations for sick pay are restricted to a maximum of 150 days
and provide payment to employees or beneficiaries for accumulations in excess of 50 days and up to 120
days upon death or retirement from City service. Qualified participants in the County Employees’
Retirement System, under certain circumstances, are eligible to convert accrued sick pay benefits into
additional credit for years of service upon retirement.
Long-Term Debt
The accounting treatment of long-term debt depends on whether the assets are used in governmental fund
operations or proprietary fund operations and whether they are reported in the government-wide or fund
financial statements.
All long-term debt to be repaid from governmental and business-type resources is reported as liabilities in
the government-wide statements. The long-term debt consists primarily of bonds payable, notes payable,
and accrued compensated absences.
Long-term debt for governmental funds is not reported as liabilities in the fund financial statements. The
debt proceeds are reported as other financing sources and payment of principal and interest as
expenditures. The accounting for proprietary funds is the same in the fund statements as it is in the
government-wide statements.
Equity Classifications
Government-wide Statements
Equity is classified as net position and displayed in three components:
a. Invested in capital assets, net of related debt – Consists of capital assets including restricted capital
assets, net of accumulated depreciation and reduced by the outstanding balances of any bonds,
mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or
improvement of those assets.
b. Restricted net position – Consists of net assets with constraints placed on the use either by (1)
external groups such as creditors, grantors, contributors, or laws or regulations of other governments;
or (2) law through constitutional provisions or enabling legislation.
c. Unrestricted net position – All other net assets that do not meet the definition of “restricted” or
“invested in capital assets, net of related debt.”
Fund Statements
Governmental fund equity is classified as fund balance and displayed in five components:
a. Nonspendable fund balance includes amounts that are not in a spendable form or are required to be
maintained intact indefinitely.
b. Restricted fund balance includes amounts that can be spent only for the specific purpose stipulated
by creditors, grantors, contributors, or laws or regulations of other governments. (Continued)
- 61 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2015
Note 1 - Summary of Significant Accounting Policies:
Equity Classifications
c. Committed fund balance includes amounts that can be used only for the specific purposes
determined by the City Commissioners through the approval of City ordinances. Commitments
may be changed or lifted only by the City Commissioners making the same formal action that
imposed the constraint originally.
d. Assigned fund balance comprises the amounts intended to be used for a specific purpose. Intent can
be expressed by the City Commissioners or the City Finance Officer, as stated in the Finance
Department Accounting Policy (FIN-20). No formal action is required.
e. Unassigned fund balance is the residual balance not contained in nonspendable fund balance or
restricted fund balance or committed fund balance or assigned fund balance.
When both restricted and unrestricted fund balances are available for use, it is the City's policy to use
restricted fund balance first, then unrestricted fund balance. Furthermore, committed fund balances are
reduced first, followed by assigned amounts, and then unassigned amounts when expenditures are
incurred for purposes for which amounts in any of those unrestricted fund balance classifications can be
used.
Proprietary fund equity is classified the same as in the government-wide statements.
Interfund Transactions
Interfund services provided and used are accounted for as revenues, expenditures, or expenses.
Transactions that constitute reimbursements to a fund for expenditures/expenses initially made from it that
are properly applicable to another fund, are recorded as expenditures/expenses in the reimbursing fund and
as reductions of expenditures/expenses in the fund that is reimbursed.
All other interfund transactions are reported as 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, 2015
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 function: Current (further classified by character)
Debt Service
Capital Outlay
Proprietary Fund – by operating and nonoperating
In the fund financial statements, governmental funds report expenditures of financial resources.
Proprietary funds report expenses relating to use of economic resources.
Interfund Transfers
Permanent reallocation of resources between funds of the reporting entity are classified as interfund
transfers. For the purposes of the Statement of Activities, all interfund transfers between individual
governmental funds have been eliminated.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles
requires management to make assumptions that affect reported amounts and disclosures. Accordingly,
actual results could differ from those estimates.
Stewardship, Compliance, and Accountability
By its nature as a local government unit, the City and its component units are subject to various federal,
state, and local laws and contractual regulations. An analysis of the City’s compliance with significant
laws and regulations and demonstration of its stewardship over City resources follows.
Fund Accounting Requirements
The City complies with all state and local laws and regulations requiring the use of separate funds.
(Continued)
- 63 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2015
Note 1 - Summary of Significant Accounting Policies:
Stewardship, Compliance, and Accountability
Revenue Restrictions
The City has various restrictions placed over certain revenue sources from state or local requirements or
contractual agreements. The primary restricted revenue sources include:
Revenue Source Legal Restrictions of Use
Section Eight Housing Choice Voucher Program Subsidize Rental Costs for Low-
Income Families
FEMA - Disaster Grants Debris Removal and Disaster Recovery
HOME Investment Partnerships Grant Construction of Low-income
Rental Units
Emergency Communication Revenue E-911 Emergency Services
Transient Room Tax Debt Obligations
Homeland Security Grant Program Homeland Security Enhancement
Kentucky Housing Corporation Façade Loans
Other Grants Grant Program Expenditures
Bond Proceeds Defeasance of debt and Capital Projects
25% of Employee Earning Tax Economic, Community and
Capital Development
Revenue Restrictions
For the year ended June 30, 2015, 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.
Subsequent Events
In preparing these financial statements, management has evaluated events and transactions for potential
recognition or disclosure through December 17, 2015, the date financial statements were available to be
issued.
Note 2 - Property Taxes:
The City bills and collects its own property taxes. The City elects to use the annual property assessment
prepared by McCracken County as its base to apply the property tax rate. According to Kentucky Revised
Statutes, the assessment date for the City must conform to the assessment date of McCracken County and
the annual increase in the property tax levy cannot exceed 4%. City property tax revenues are recorded as
a receivable when assessed because the City has an enforceable legal claim to the resources. At this time,
the receivable is offset by unearned revenue. Property tax revenues are recognized during the period for
which they are levied.
(Continued)
- 64 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2015
Note 2 - Property Taxes:
The due dates and collection period for all property taxes, exclusive of vehicle taxes, for the fiscal year
ended June 30, 2015, are as follows:
Description Date
Assessment and enforceable lien January 1, 2014
Levy October 14, 2014
Face value amount payment dates 1st half by November 1, 2014
2nd half by February 1, 2015
Delinquent date - 10% penalty
plus 1/2% per month 1st half - November 30, 2014
2nd half - February 28, 2015
Note 3 - Detail Notes on Transaction Classes/Accounts:
The following notes present detail information to support the amounts reported in the basic financial
statements for its various assets, liabilities, equity, revenues, and expenditures/expenses.
Deposits
Custodial credit risk for deposits is the risk that in the event of a bank failure, the City's deposits may not
be returned or the City will not be able to recover collateral securities in the possession of an outside party.
The City's investment policy requires all investments be made in accordance with applicable legal
requirements with consideration of investment safety. Accordingly, the City maintains collateral
agreements with its financial institutions. Deposits are 101% secured with collateral valued at market or
par, whichever is lower, less the amount of the Federal Deposit Insurance Corporation insurance (FDIC).
The City Commission approves and designates a list of authorized depository institutions based on
evaluation of solicited responses and certifications provided by financial institutions and recommendations
of an evaluation committee and/or Finance Director.
Deposits of the City's reporting entity are insured or collateralized with securities held by the City, its
agent, or by the pledging financial institution's trust department or agent in the name of City. During the
year ended June 30, 2015, the City's only cash and cash equivalents were demand deposits. At year end,
the carrying amount and the bank balance of the City's cash and cash equivalents were $31,413,011 and
$32,103,107, respectively.
(Continued)
- 65 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2015
Note 3 - Detail Notes on Transaction Classes/Accounts:
Investments
As of June 30, 2015, the City's reporting entity had the following investments:
Fair Value/ Average Investment Maturities (In Years) (2)
Carrying Credit Quality/ Less Greater
Types of Investments Amount Rating (1) Than 1 1-5 6-10 Than 10
Fiduciary and Private
Purpose Trust Funds
Money market funds $ 331,421 NA NA NA NA NA
Common stock 2,573,281 NA NA NA NA NA
Corporate bonds 377,462 AA-/A $ 377,462 $ - $ - $ -
U.S. agencies - - - - -
Mutual funds
Equity 4,151,673 NA NA NA NA NA
TOTAL FIDUCIARY AND
PRIVATE PURPOSE
TRUST FUNDS $7,433,837
(1) Ratings are provided where applicable to indicate associated Credit Risk. NA indicates not applicable.
NR indicates that instrument is not rated.
(2) Maturities are provided for debt instruments with maturity dates. NA indicates not applicable.
Investment Policies
City Policy
Credit Risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations.
Generally, the City's investing activities are managed under the custody of the City's Finance Director.
Investing is performed in accordance with investment policies adopted by the City Commission complying
with State Statutes. In accordance with the City's investment policy and the State Statutes, the City may
invest funds temporarily in excess of operating needs in the following:
Kentucky Revised Statutes (KRS 66.480) authorize the City to invest in:
1. Obligations of the U.S. Treasury, agencies, and instrumentalities, including obligations subject to
repurchase agreements, provided delivery of obligations subject to repurchase agreements are held
by the City or through an authorized agent;
2. Obligations and contracts for future delivery or purchase of obligations backed by the full faith and
credit of the United States or a United States government agency;
3. Obligations of any corporation of the United States government;
4. Bonds or certificates of indebtedness of the Commonwealth of Kentucky and of its agencies and
instrumentalities;
(Continued)
- 66 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2015
Note 3 - Detail Notes on Transaction Classes/Accounts:
Investment Policies
City Policy
5. Certificates of deposit issued by or other interest-bearing accounts of any bank or savings and loan
institution which are insured by the Federal Deposit Insurance Corporation or similar entity or which
are collateralized, to the extent uninsured, by any obligations permitted by section 41.240(4) of the
Kentucky Revised Statutes;
6. Securities issued by a state or local government, or any instrumentality or agency thereof, in the
United States, and rated in one of the three highest categories by a national recognized rating
agency.
Interest Rate Risk is the risk that changes in interest rates will adversely affect the fair value of an
investment. The City policy provides that, to the extent practicable, investments are matched with
anticipated cash flows. Investments are diversified to minimize the risk of loss resulting from
overconcentration of assets in a specific maturity period, a single issuer, or an individual class of
securities. Unless matched to a specific cash flow, investments are not, in general, made in securities
maturing more than five years from the date of purchase. Surplus cash may be invested in securities
exceeding five years if the maturity of such investments is made to coincide as nearly as practicable with
the expected use of the investment. Concentration of credit risk is the risk of loss attributed to the
magnitude of the City's investment in a single issuer. The City policy does not specifically address
concentration of credit risk.
Pension Trust Policy
The City's pension trust is the Police and Firefighters' Pension Fund (PFPF). Investment policy provides
for investment manager(s) who have full discretion of assets allocated to them subject to the overall
investment guidelines set out in the policy. Overall investment guidelines provide for diversification and
allow investment in domestic and international common stocks, fixed income securities, and cash
equivalents. Custodial credit risk is addressed by the policy providing for the engagement of a custodian
who accepts possession of securities for safekeeping; collects and disburses income; collects principal of
sold, matured, or called items; and provides periodic accounting to the pension board.
Asset allocation guideline for the plan is as follows:
PFPF Retirement Plan
Minimum Target Maximum
Equities 45% 55% 65%
Fixed income 35% 45% 55%
The retirement plan addresses credit risk and concentration of credit risk with a policy that prohibits
investment of more than 5% of its assets in the securities of any one issuer with the exception of U.S.
government. Policy further prohibits investment of more than 20% in any one market sector. No more
than 10% of corporate debt securities in the fixed income portfolio may be rated below-investment grade.
Commercial paper must be rated A1, P1.
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.
(Continued)
- 67 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2015
Note 3 - Detail Notes on Transaction Classes/Accounts:
Investment Policies
Private Purpose Trust
The private purpose trust does not have a formal investment policy. The City established the trust in
accordance with Kentucky Revised Statutes. The trust provides for an investment manager who has full
discretion of assets allocated to him subject to the provisions of the trust agreement. The trust invests in
domestic and international mutual funds, fixed income securities, U.S. treasury securities, and cash and
equivalents.
Capital Assets
Capital asset activity for the year ended June 30, 2015, was as follows:
Balance Balance
Primary Government: July 1, 2014 Additions Deductions June 30, 2015
Capital assets, not being depreciated:
Land $10,408,932 $ - $ 25,600 $10,383,332
Construction-in-progress 12,299,347 2,591,466 10,865,565 4,025,248
Total capital assets, not being
depreciated 22,708,279 2,591,466 10,891,165 14,408,580
Capital assets, being depreciated:
Land improvements 5,526,993 7,371,314 - 12,898,307
Buildings and improvements 18,904,441 1,929,052 18,626 20,814,867
Infrastructure 41,625,986 - - 41,625,986
Equipment 10,147,288 485,588 2,530,127 8,102,749
Furnishings and fixtures 217,936 - 500 217,436
Vehicles 8,628,568 565,703 263,037 8,931,234
Totals at historical cost 85,051,212 10,351,657 2,812,290 92,590,579
Less accumulated depreciation:
Land improvements 1,810,856 600,727 - 2,411,583
Buildings and improvements 12,741,615 379,627 16,146 13,105,096
Infrastructure 28,212,887 1,350,105 - 29,562,992
Equipment 8,809,431 332,685 2,527,640 6,614,476
Furnishings and fixtures 201,772 1,811 500 203,083
Vehicles 5,362,768 663,912 246,808 5,779,872
Total accumulated depreciation 57,139,329 3,328,867 2,791,094 57,677,102
Total capital assets, being
depreciated, net 27,911,883 7,022,790 21,196 34,913,477
PRIMARY GOVERNMENT
ACTIVITIES CAPITAL
ASSETS, NET $50,620,162 $ 9,614,256 $10,912,361 $49,322,057
During the year ended June 30, 2015, a construction-in-progress project jointly owned by the City of Paducah
and McCracken County was completed. Construction costs of $1,673,237 were donated to McCracken County
upon completion resulting in a decrease in construction-in-progress greater than capital asset additions from
completed construction-in-progress projects during the year.
(Continued)
- 68 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2015
Note 3 - Detail Notes on Transaction Classes/Accounts:
Capital Assets
Depreciation expense was charged to governmental activities as follows:
General government:
General administration $ 249,628
Finance 628
Planning 20,320
Inspections -
Human resources/risk management -
Information systems 9,266
Fleet maintenance 8,642
Total general government 288,484
Public safety:
Police 172,480
Fire 57,110
Grants -
Emergency 911 25,227
Court awards 305
Fleet Lease Trust 658,485
Total public safety 913,607
Public service:
Public works 39,471
Engineering 24,509
Total public service 63,980
Parks and recreation 652,880
Planning and development:
Infrastructure 1,408,045
Grants 1,871
Total planning and development 1,409,916
TOTAL DEPRECIATION EXPENSE –
GOVERNMENTAL ACTIVITIES $3,328,867
(Continued)
- 69 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2015
Note 3 - Detail Notes on Transaction Classes/Accounts:
Capital Assets
Balance Balance
Business-type Activities: July 1, 2014 Increases Decreases June 30, 2015
Capital assets, not being depreciated:
Land $ 62,152 $ - $ - $ 62,152
Construction-in-progress - - - -
Total capital assets, not being
depreciated 62,152 - - 62,152
Capital assets, being depreciated:
Buildings and improvements 554,827 - - 554,827
Equipment 1,365,303 64,265 - 1,429,568
Vehicles 2,409,481 157,677 106,013 2,461,145
Totals at historical cost 4,329,611 221,942 106,013 4,445,540
Less accumulated depreciation:
Buildings and improvements 271,168 14,634 - 285,802
Equipment 901,608 130,676 - 1,032,284
Vehicles 2,008,572 153,821 106,013 2,056,380
Total accumulated depreciation 3,181,348 299,131 106,013 3,374,466
Total capital assets, being
depreciated, net 1,148,263 (77,189) - 1,071,074
BUSINESS-TYPE ACTIVITIES
CAPITAL ASSETS, NET $ 1,210,415 $ (77,189) $ - $ 1,133,226
Depreciation expense was charged to business-type activities as follows:
Solid Waste Fund $ 287,825
Section Eight Housing 1,285
Civic Center 10,021
TOTAL DEPRECIATION EXPENSE –
BUSINESS-TYPE ACTIVITIES $ 299,131
(Continued)
- 70 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2015
Note 3 - Detail Notes on Transaction Classes/Accounts:
Capital Assets
Balance Balance
Discretely Presented July 1, 2014 Increases Decreases June 30, 2015
Component Units:
Capital assets, not being depreciated:
Land & construction in progress $ 2,685,360 $ - $2,153,739 $ 531,621
Total capital assets, not being
depreciated 2,685,360 - 2,153,739 531,621
Capital assets, being depreciated:
Utility plant 80,793,963 6,069,594 683,277 86,180,280
Total capital assets, being
depreciated 80,793,963 6,069,594 683,277 86,180,280
Less accumulated depreciation:
Utility plant 34,935,540 1,983,290 683,277 36,235,553
Total accumulated depreciation 34,935,540 1,983,290 683,277 36,235,553
Total capital assets, being
depreciated, net 45,858,423 4,086,304 - 49,944,727
COMPONENT UNIT
CAPITAL ASSETS, NET $ 48,543,783 $ 4,086,304 $2,153,739 $ 50,476,348
Depreciation expense, charged to functions/programs of discretely presented major component units as
follows:
Paducah Water Works $ 1,983,290
TOTAL DEPRECIATION EXPENSE BY ACTIVITY $ 1,983,290
Accounts Payable
Payables in the governmental and proprietary funds are composed of payables to vendors and accrued
expenditures.
(Continued)
- 71 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2015
Note 3 - Detail Notes on Transaction Classes/Accounts:
Short-Term Liabilities
On May 21, 2014, the City renewed an agreement with Banterra Bank for a fixed rate line of credit not to
exceed $350,000 for construction of new residential homes for the Fountain Avenue Neighborhood
Program. The City did not renew the line of credit. Short-term debt activity for the year ended June 30,
2015, was as follows:
Beginning Ending
Governmental Activities Balance Additions Payments Balance
Home Grant Fund Line of Credit $ 279,301 $ - $ 279,301 $ -
Long-Term Liabilities
The City’s long-term liabilities are segregated between the amounts to be repaid from governmental
activities and amounts to be repaid from business-type activities.
Governmental Activities
As of June 30, 2015, the governmental long-term liabilities consisted of the following:
General obligation bonds:
Current portion $ 1,794,872
Noncurrent portion 21,525,475
TOTAL GENERAL OBLIGATION
BOND COSTS, NET OF PREMIUMS AND DISCOUNTS $ 23,320,347
Note payable:
Current portion $ 430,288
Noncurrent portion 5,670,776
TOTAL NOTE PAYABLE PAYMENTS $ 6,101,064
Accrued compensated absences:
Current portion $ 1,033,715
Noncurrent portion 1,097,250
TOTAL ACCRUED COMPENSATED
ABSENCES $ 2,130,965
Pension obligations:
County Employee Retirement System $ 28,655,362
Appointive Employee’s Pension Fund 79,188
Police and Firefighters Pension Plan 4,054,273
TOTAL PENSION OBLIGATIONS $ 32,788,823
(Continued)
- 72 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2015
Note 3 - Detail Notes on Transaction Classes/Accounts:
Long-Term Liabilities
Business-type Activities
As of June 30, 2015, the long-term liabilities payable from proprietary fund resources consisted of the
following:
Accrued compensated absences:
Current portion $ 87,133
Noncurrent portion 38,190
TOTAL ACCRUED COMPENSATED
ABSENCES $ 125,323
Pension obligations:
County Employee Retirement System $ 1,541,681
TOTAL PENSION OBLIGATIONS $ 1,541,681
General Obligation Bonds
Series 2008 Bond Issue – The City of Paducah issued general obligation bonds of $2,800,000 in March
2009, to finance the Floodwall Rehabilitation. Interest rates are variable of approximately 3.13%. These
bonds are required to be fully paid within 20 years from the date of issue and are backed by the full faith
and credit of the City.
Series 2010B Bond Issue – The City of Paducah issued general obligation bonds of $7,165,000 in August
2010 with interest rates ranging between 1% and 3.25%, to advance refund $6,725,000 of outstanding
2001 series bonds with interest rates ranging between 4.5% and 5%. The 2001 series bonds were issued to
finance construction of the Performing Arts Center and Convention Center expansion. These bonds are
required to be fully paid within 16 years from the date of issue and are backed by the full faith and credit
of the City. While these 2010B series bonds are issued by the City, 50% of the principal amount of the
bonds was issued on behalf of the County of McCracken, Kentucky which intends to participate on an
equal basis with the City in financing the projects and has issued the City a general obligation note in a
principal amount equal to 50% of the principal amount of the bonds and bearing interest at the same rates
as the City’s bonds in order to secure the County’s obligations to the City. This note receivable is reflected
in the government-wide Statement of Net Position. In accordance with an Interlocal Cooperation
Agreement between the City, McCracken County, Kentucky (the County), and the Paducah-McCracken
County Tourist and Convention Commission (the Bureau), principal and interest payments on the bonds
are being made from an additional 2% transient room tax collected by the County with the remaining
payments split evenly between the City, the County, and the Bureau.
(Continued)
- 73 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2015
Note 3 - Detail Notes on Transaction Classes/Accounts:
Long-Term Liabilities
General Obligation Bonds
Series 2011 Bond Issue – The City of Paducah issued general obligation taxable refunding bonds of
$3,910,000 in August 2011 with an interest rate of 3.68%, to refund $3,780,000 of outstanding 2004 series
bonds issued for an economic development project in the Industrial Park West with interest rates ranging
from 2.25% to 6%. These bonds are required to be fully paid within 13 years from the date of issue and
are backed by the full faith and credit of the City. While these bonds are issued by the City, 50% of the
principal amount of the bonds was issued on behalf of the County of McCracken, Kentucky which intends
to participate on an equal basis with the City and has guaranteed 50% of the principal amount of the
bonds. This note receivable is reflected in the government-wide Statement of Net Position. In accordance
with an Interlocal Cooperation Agreement between the City and McCracken County, Kentucky (the
County), principal and interest payments on the bonds are supported by an operating lease collected by the
City. The rental revenues collected from the lease during the current year cover $289,000 of the bond and
interest payments due with the remaining amount of $108,080 shared equally by the City and County.
Series 2013A Bond Issue – The City of Paducah issued general obligation bonds of $1,120,000 in
September 2013, to finance the municipality pool renovations. Interest rates range from 0.70% to 3.60%.
These bonds are required to be fully paid within 15 years from the date of issue and are backed by the full
faith and credit of the City.
Series 2013B Bond Issue – The City of Paducah issued general obligation taxable bonds of $2,475,000 in
September 2013, to finance a portion of the costs of the construction of improvements to an
industrial/distribution facility and a portion of the costs of the acquisition, construction, installation and
equipping of an approximately 30,000 square foot building for the economic development. Interest rates
range from 0.60% to 4.00%. These bonds are required to be fully paid within 15 years from the date of
issue and are backed by the full faith and credit of the City.
Series 2014A Bond Issue – The City of Paducah issued general obligation refunding bonds of $5,460,000
in May 2014 with interest rates ranging from 2.00% to 3.50%, to refund $5,545,000 of outstanding 2010
series bonds issued to finance several public improvement projects with interest rates ranging from 1.00%
to 5.50%. These bonds are required to be fully paid within 16 years from the date of issue and are backed
by the full faith and credit of the City.
Series 2014B Bond Issue – The City of Paducah issued general obligation refunding bonds of $4,225,000
in November 2014 with interest rate of 2.55%, to advance refund $3,845,000 of outstanding 2005 series
bonds issued to finance the police and firefighter's pension fund estimated actuary liability. These bonds
are required to be fully paid within 10 years from the date of issue and are backed by the full faith and
credit of the City.
(Continued)
- 74 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2015
Note 3 - Detail Notes on Transaction Classes/Accounts:
Long-Term Liabilities
Advance Refunding
On November 1, 2014, the City issued general obligation refunding bonds of $4,225,000 with interest rate
of 2.55% to advance refund 2005 series bonds with interest rate of 5.35%. The net proceeds of the new
issue were deposited into an irrevocable trust with an escrow agent to redeem outstanding 2005 series
bonds maturing on or after November 1, 2016 in the principle amount of $3,845,000 on November 1, 2015
at the redemption price of 100%. As a result, the refunded bonds are considered to be defeased and the
liability has been removed from the statement of net position. The reacquisition price exceeded the net
carrying amount of the old debt by $298,964. This amount was deferred and amortized over the remaining
life of the refunded debt. This advance refunding was undertaken to reduce future total debt service
payments over the next 10 years by $490,923 with a resulting net economic gain of $365,026. As of June
30, 2015, $3,845,000 of these defeased bonds were still outstanding with applicable assets held in trust for
future payoff.
Notes Payable
Kentucky League of Cities – On July 1, 2003, the City entered into an agreement in the amount of
$3,500,000 with the Kentucky League of Cities to finance the acquisition and installation of various public
capital projects. Interest is charged at a rate of approximately 2.98%. The note is required to be fully paid
within 20 years from the date of issue and is backed by the full faith and credit of the City.
Kentucky Association of Counties – The County of McCracken, Kentucky entered into an agreement in
the amount of $5,000,000 in March 2009, with the Kentucky Association of Counties to assist with the
Julian Carroll Convention Center. The interest rate is variable. The note is required to be fully paid within
20 years from the date of issue and is backed jointly by the full faith and credit of the City and the County.
While the note is issued by the County, 50% of the principal amount of the note was issued on behalf of
the City which intends to participate on an equal basis with the County in accordance with an Interlocal
Cooperation Agreement between the City and McCracken County, Kentucky on February 23, 2009.
Margaret Hank Cumberland Presbyterian Church Agreement – On June 16, 2011, the City entered into an
agreement in the amount of $188,533 with Margaret Hank Cumberland Presbyterian Church to finance the
acquisition of real property to be used for the development of an indoor recreational facility. The note
matures on July 1, 2019 and has an imputed interest rate of 3.25%.
Murray State University Paducah Agreement – On November 22, 2011, the City entered into a general
obligation note in the amount of $2,674,093 with McCracken County to finance the construction of an
educational facility to be occupied by Murray State University. The note matures on December 1, 2031
and has interest rates ranging from 1.0% to 3.5%.
(Continued)
- 75 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2015
Note 3 - Detail Notes on Transaction Classes/Accounts:
Long-Term Liabilities
Changes in Long-Term Liabilities
The following is a summary of changes in long-term debt for the year ended June 30, 2015:
Beginning Ending Due within
Type of Liability: Balance Additions Reductions Balance One Year
Governmental activities:
General obligation bonds:
Pension $ 4,400,000 $ - $ (4,115,000) $ 285,000 $ 285,000
Floodwall Rehabilitation 2,224,863 - (120,651) 2,104,212 124,872
Refinanced Pension - 4,225,000 (75,000) 4,150,000 95,000
Refinanced Convention Center 5,805,000 - (420,000) 5,385,000 430,000
Refinanced Rental Building 3,100,000 - (280,000) 2,820,000 290,000
Public Pool Renovations 1,120,000 - (65,000) 1,055,000 65,000
Economic Development 2,475,000 - (145,000) 2,330,000 145,000
Refinancing Public Projects 5,460,000 - (360,000) 5,100,000 360,000
Premiums 220,683 - (17,134) 203,549 -
Discounts (99,255) (29,575) 16,416 (112,414) -
Total bonds payable 24,706,291 4,195,425 (5,581,369) 23,320,347 1,794,872
Notes payable:
Kentucky League of Cities 1,849,709 - (179,888) 1,669,821 185,354
Kentucky Association of
Counties 2,081,250 - (105,000) 1,976,250 114,123
Margaret Hank Agreement 136,637 - (20,559) 116,078 21,228
Murray State University
Agreement 2,451,760 - (112,845) 2,338,915 109,583
Total notes payable 6,519,356 - (418,292) 6,101,064 430,288
Pension Obligations 36,031,160 - (3,242,337) 32,788,823 -
Accrued Compensated
Absences 2,203,960 1,321,800 (1,394,795) 2,130,965 1,033,715
TOTAL GENERAL LONG-
TERM LIABILITIES $69,460,767 $ 5,517,225 $(10,636,793) $ 64,341,199 $ 3,258,875
Business-type activities:
Pension Obligations $ 1,744,443 $ - $ (202,762) $ 1,541,681 -
Accrued compensated
Absences 138,897 100,730 (114,304) 125,323 87,133
TOTAL BUSINESS LONG-
TERM LIABILITIES $ 1,883,340 $ 100,730 $ (317,066) $ 1,667,004 $ 87,133
(Continued)
- 76 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2015
Note 3 - Detail Notes on Transaction Classes/Accounts:
Long-Term Liabilities
Changes in Long-Term Liabilities
(1) The calculation to reconcile amounts in this schedule to the "net position invested in capital assets, net
of related debt" for governmental activities is:
Net Capital Assets $49,322,057
Less:
19.75% of the outstanding 2010B
general obligation bonds $ (1,063,538)
100% of the outstanding 2011
General obligation bonds (2,820,000)
Net of the County's portion 1,941,769
(1,941,769)
78% of the outstanding 2014A
general obligation bonds (3,978,000)
100% of the outstanding 2013A
general obligation bonds (1,055,000)
52% of the outstanding 2013B
general obligation bonds (1,211,600)
100% of the Margaret Hank Agreement (116,078)
100% of the outstanding Kentucky League
of Cities' note payable (1,669,821)
Net position invested in capital assets, net of related debt $39,349,789
Annual Debt Service Requirements
The annual debt service requirements to maturity for bonds and notes as of June 30, 2015, are as follows:
Year Ending
June 30 Principal Interest
2016 $ 2,160,160 $ 822,225
2017 2,241,669 767,952
2018 2,299,387 714,108
2019 2,308,864 655,298
2020 2,361,701 595,438
2021-2025 11,817,239 1,965,436
2026-2030 5,803,090 514,354
2031-2032 338,166 11,834
TOTALS $29,330,276 $ 6,046,645
(Continued)
- 77 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2015
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, 2015, are as
follows:
Accrued Compensated Absences
Governmental Business-type
Activities Activities
Accrued sick leave $ 744,574 $ 46,367
Accrued vacation leave 1,386,391 78,956
Totals 2,130,965 125,323
Less current portion 1,033,715 87,133
LONG-TERM PORTION $1,097,250 $ 38,190
Termination Benefits
Nine employees, through employment contracts, are entitled to certain termination benefits upon
involuntary termination of employment by the City Commission. These benefits include provision for
salary payments for three to six months, as well as, certain health, life, dental, and disability insurance
coverage for same period of time. As these benefits are only provided for involuntary termination of
employment, no provision has been made for these benefits. The City funds these benefits on a pay-as-
you-go basis in the period incurred. No termination benefits were paid for the year ended June 30, 2015.
In addition, qualified participants in the County Employee's Retirement System (CERS), under certain
circumstances are eligible to convert accrued sick pay benefits into additional credit for years of service
upon retirement. Costs and notification of payment for these benefits are not calculated by the CERS
actuary until a qualified participant submits an application for retirement benefits. Accordingly, no
provision has been made for these benefits; and, the City funds these benefits in the period of notification
for payment by the CERS. For the year ended June 30, 2015, $57,579 of payments was made for these
benefits.
Landfill Closure and Post-Closure Costs
The County of McCracken, Kentucky (County) closed the local landfill to the public on June 30, 1995.
The County must comply with established state and federal landfill closure procedures and must perform
maintenance and monitoring procedures at the site for thirty years after closure. The 30-year period will
begin upon approval from the Commonwealth of Kentucky regarding the environmental condition of the
landfill site. As of June 30, 2015, 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)
- 78 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2015
Note 3 - Detail Notes on Transaction Classes/Accounts:
Interfund Transactions and Balances
Interfund transfers during the year ended June 30, 2015, were as follows:
Interfund Interfund
Governmental Funds: Transfers In Transfers Out
General Fund $ 439,792 $3,365,575
Special Revenue Investment Fund 315,750 4,325,962
Capital Project Fund 3,510,522 55,292
Debt Service Fund 2,200,820 -
Nonmajor Governmental Funds 1,318,526 33,956
Internal Service Funds 189,389 -
Proprietary Funds:
Solid Waste - 240,000
Nonmajor Proprietary Funds 45,986 -
TOTALS $8,020,785 $8,020,785
Transfers are used to (a) move revenues from the fund that statute or budget requires to collect them to the
fund that statute or budget requires to expend them and to (b) use unrestricted revenues collected in the
general fund to finance various programs accounted for in other funds in accordance with budgetary
authorizations. Significant transfers from the general fund transfers includes $518,526 for E911 support;
$597,222 for debt service; and $1,658,703 for capital projects. Significant transfers from the special
revenue investment fund includes $800,000 for municipal aid street resurfacing program; $1,603,598 for
debt service; and $1,727,864 for capital projects.
Due To/From Balances
Due to/from balances used to cover current operating expenses were as follows as of June 30, 2015:
Due From Due To
General Fund $ 29,979 $1,144,818
Special Revenue Investment Fund 1,144,818 300,000
Nonmajor Proprietary Funds - 29,979
Internal Service Funds 300,000 -
TOTALS $1,474,797 $1,474,797
Note 4 - Pension Plans - City of Paducah:
The City provides retirement benefits to its employees through three pension funds. Two of these funds
are single-employer defined benefit funds and are administered by the City. These funds are Police and
Firefighters’ Pension Fund (PFPF) and Appointive Employees’ Pension Fund (AEPF). The other pension
is a multi-employer public employee retirement fund administered by the Kentucky County Employees
Retirement System (CERS). The City also participates in three deferred compensation plans. Information
regarding these plans follows:
(Continued)
- 79 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2015
Note 4 - Pension Plans - City of Paducah:
Cost-Sharing Multiple-Employer Defined Benefit Plan
County Employees’ Retirement System
Plan description - The City is a participant in the County Employees Retirement System (CERS), a
cost-sharing multiple-employer defined benefit pension plan administered by the Kentucky Retirement
System, an agency of the Commonwealth of Kentucky. Under the provisions of the Kentucky Revised
Statute (“KRS”) Section 61.645, the Board of Trustees of the Kentucky Retirement System administers
CERS and has the authority to establish and amend benefit provisions. The Kentucky Retirement
System issues a publicly available financial report that includes financial statements and required
supplementary information for CERS. That report may be obtained from http://kyret.ky.gov/.
Benefits provided - CERS provides retirement, health insurance, death and disability benefits to Plan
employees and beneficiaries. Employees are vested in the plan after five years’ service. For retirement
purposes, non-hazardous and hazardous employees are grouped into three tiers, based on hire date:
Non-hazardous members:
Tier 1 Participation date Prior to September 1, 2008
Unreduced retirement 27 years of service or 65 years old
Reduced retirement Minimum 5 years of service and 55 years old
Minimum 25 years of service and any age
Tier 2 Participation date September 1, 2008 to December 31, 2013
Unreduced retirement Minimum 5 years of service and 65 years old
Age of 57 or older and sum of service years plus age equal 87
Reduced retirement Minimum 10 years of service and 60 years old
Tier 3 Participation date After December 31, 2013
Unreduced retirement Minimum 5 years of service and 65 years old
Age of 57 or older and sum of service years plus age equal 87
Reduced retirement Not available
Hazardous members:
Tier 1 Participation date Prior to September 1, 2008
Unreduced retirement 20 years of service and any age
Minimum 5 years of service and 55 years old
Reduced retirement Minimum 15 years of service and 50 years old
Tier 2 Participation date September 1, 2008 to December 31, 2013
Unreduced retirement Minimum 5 years of service and 60 years old
25 years of service and any age
Reduced retirement Minimum 15 years of service and 50 years old
Tier 3 Participation date After December 31, 2013
Unreduced retirement Minimum 5 years of service and 60 years old
25 years of service and any age
Reduced retirement Not available
(Continued)
- 80 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2015
Note 4 - Pension Plans - City of Paducah:
Cost-Sharing Multiple-Employer Defined Benefit Plan
County Employees’ Retirement System
Cost of living adjustments are provided at the discretion of the General Assembly. Retirements is based
on a factor of the number of years’ service and hire date multiplied by the average of the highest five
years’ earnings. Reduced benefits are based on factors of both of these components. Participating
employees become eligible to receive the health insurance benefit after at least 180 months of service.
Death benefits are provided for both death after retirement and death prior to retirement. Death benefits
after retirement are $5,000 in lump sum. Five years’ service is required for death benefits prior to
retirement and the employee must have suffered a duty-related death. The decedent’s beneficiary will
receive the higher of the normal death benefit and $10,000 plus 25% of the decedent’s monthly final rate
of pay and any dependent child will receive 10% of the decedent’s monthly final rate of pay up to 40% for
all dependent children. Five years’ service is required for non-service related disability benefits.
Plan Funding – State statute requires active members to contribute % of creditable compensation based
on the tier:
Non-hazardous Hazardous
Required Contribution Required Contribution
Tier 1 5% Tier 1 8%
Tier 2 5% plus 1% for insurance Tier 2 8% plus 1% for insurance
Tier 3 5% plus 1% for insurance Tier 3 8% plus 1% for insurance
Employers contribute at the rate determined by the CERS Board to be necessary for the actuarial
soundness of the system, as required by KRS 61.565 and 61.752. The City’s required contribution rate
was 17.67% for non-hazardous employees and 34.31% for hazardous employees for the year ended
June 30, 2015.
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows
of Resources Related to Pensions
At June 30, 2015, the City reported a liability for its proportionate share of the net pension liability for
CERS. The amount recognized by the City as its proportionate share of the net pension liability that
was associated with the City was as follows:
City’s non-hazardous proportionate share of the CERS net pension liability $ 10,579,475
City’s hazardous proportionate share of the CERS net pension liability 19,617,569
Total CERS net pension liability associated with the City $ 30,197,044
(Continued)
- 81 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2015
Note 4 - Pension Plans - City of Paducah:
Cost-Sharing Multiple-Employer Defined Benefit Plan
County Employees’ Retirement System
The net pension liability for each plan was measured as of June 30, 2014, and the total pension liability
used to calculate the net pension liability was determined by an actuarial valuation as of that date.
The City’s proportion of the net pension liability for CERS was based on the actual liability of the
employees and former employees relative to the total liability of the System as determined by the
actuary. At June 30, 2014, the City’s non-hazardous proportion was 0.326086% percent and hazardous
proportion was 1.632315% percent.
For the year ended June 30, 2015, the City recognized pension expense of $3,793,357 related to CERS
pension plans. At June 30, 2015, the City reported deferred outflows of resources and deferred inflows
of resources related to the CERS pension plans from the following sources:
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Difference between expected and actual experience $ - $ -
Changes in assumptions - -
Net difference between projected and actual earnings
on pension plan investments
- 3,110,272
Changes in proportion and differences between City
contributions and proportionate share of contributions
- -
City contributions subsequent to the
Measurement date
4,278,252
-
Total $ 4,278,252 $ 3,110,272
The City reported $4,278,252 as deferred outflows of resources related to pensions resulting from City
contributions subsequent to the measurement date will be recognized as a reduction of the net pension
liability in the year ended June 30, 2016. Other amounts reported as deferred outflows of resources and
deferred inflows related to pensions will be recognized in pension expense as follows:
Fiscal Year Ending June 30
Hazardous
Non-
Hazardous
2016 $ (482,337) $ (295,231)
2017 (482,337) (295,231)
2018 (482,337) (295,231)
2019 (482,336) (295,232)
- -
(Continued)
- 82 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2015
Note 4 - Pension Plans - City of Paducah:
Cost-Sharing Multiple-Employer Defined Benefit Plan
County Employees’ Retirement System
Actuarial assumptions - The total pension liability in the June 30, 2014 actuarial valuation was
determined using the following actuarial assumptions, applied to all periods included in the
measurement:
Inflation 3.50%
Projected salary increases 4.50%
Investment rate of return, net of
investment expense & inflation
7.75%
For CERS, Mortality rates for the period after service retirement are according to the 1983 Group
Annuity Mortality Table for all retired employees and beneficiaries as of June 30, 2006 and the 1994
Group Annuity Mortality Table for all other employees. The Group Annuity Mortality Table set
forward five years is used for the period after disability retirement. The actuarial assumptions used
were based on the results of an actuarial experience study for the period July 1, 2005 – June 30, 2008.
For CERS, the long-term expected return on plan assets is reviewed as part of the regular experience
studies prepared every five years. The most recent analysis, performed for the period covering fiscal
years 2005 through 2008, is outlined in a report dated August 25, 2009. Several factors are considered
in evaluating the long-term rate of return assumption including long-term historical data, estimates
inherent in current market data, and a log-normal distribution analysis in which best-estimate ranges of
expected future real rates of return (expected return, net of investment expense and inflation) were
developed by the investment consultant for each major asset class. These ranges were combined to
produce the long-term expected rate of return by weighting the expected future real rates of return by
the target asset allocation percentage and then adding expected inflation. The capital market
assumptions developed by the investment consultant are intended for use over a 10-year horizon and
may not be useful in setting the long-term rate of return for funding pension plans which covers a
longer timeframe. The assumption is intended to be a long-term assumption and is not expected to
change absent a significant change in the asset allocation, a change in the inflation assumption, or a
fundamental change in the market that alters expected returns in future years.
(Continued)
- 83 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2015
Note 4 - Pension Plans - City of Paducah:
Cost-Sharing Multiple-Employer Defined Benefit Plan
County Employees’ Retirement System
The target allocation and best estimates of arithmetic real rates of return for each major asset class, as
provided by CERS’s investment consultant, are summarized in the following table:
Asset Class
Target
Allocation
Long-Term Expected
Real Rate of Return
Domestic Equity 30.0% 8.45%
International Equity 22.0% 8.85%
Emerging Market Equity 5.0% 10.50%
Private Equity 7.0% 1.25%
Real Estate 5.0% 7.00%
Core US Fixed Income 10.0% 5.25%
High Yield U.S. Fixed Income 5.0% 7.25%
Non-U.S. Fixed Income 5.0% 5.50%
Commodities 5.0% 7.75%
TIPS 5.0% 5.00%
Cash 1.0% 3.25%
Total 100.0%
Discount rate - The discount rate used to measure the total pension liability was 7.75%. The projection
of cash flows used to determine the discount rate assumed that contributions from plan employees and
employers will be made at statutory contribution rates. Projected inflows from investment earnings
were calculated using the long-term assumed investment return of 7.75%. The long-term investment
rate of return was applied to all periods of projected benefit payments to determine the total pension
liability.
Sensitivity of CERS proportionate share of net pension liability to changes in the discount rate - The
following table presents the net pension liability of the City, calculated using the discount rates selected
by the pension system, as well as what the City’s net pension liability would be if it were calculated
using a discount rate that is 1-percentage-point lower or 1-percentage-point higher than the current rate:
1%
Decrease
Current
Discount
Rate
1%
Increase
CERS 6.75% 7.75% 8.75%
Non-hazardous’ proportionate share of
net pension liability
$13,921,860
$10,579,475
$ 7,626,369
Hazardous’ proportionate share of
net pension liability
$25,662,897
$19,617,569
$14,484,592
(Continued)
- 84 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2015
Note 4 - Pension Plans - City of Paducah:
Cost-Sharing Multiple-Employer Defined Benefit Plan
County Employees’ Retirement System
Pension plan fiduciary net position - Detailed information about the pension plan’s fiduciary net
position is available in the separately issued financial report of the CERS.
Single Employer Defined Benefit Funds - Police and Firefighters' Pension Fund (PFPF) and
Appointive Employees’ Pension Fund (AEPF)
Basis of Accounting – The financial statements are prepared using the accrual basis of accounting. Plan
member and employer contributions are recognized in the period in which the contributions are due,
pursuant to formal commitments. Benefits and refunds are recognized when due and payable in
accordance with the terms of each plan.
Administration – The Appointive Employees’ Pension Fund Board and the City of Paducah Police and
Firefighters’ Pension Fund Board are responsible for establishing or amending contribution rates and
requirements for their respective plans.
Administrative Costs – Administrative costs are funded from investment earnings.
Valuation of Investments – Investments are reported at fair value. Investments are composed of
securities valued at current market prices. See investment policies in Note 3 for the pension trusts.
Plan Administration – Management of the PFPF, as authorized by Kentucky Revised Statute 95.869, is
vested in the PFPF Board of Trustees, which consist of the Mayor, City Treasurer, an active firefighter,
a retired firefighter and a retired police officer. Management of the AEPF, as authorized by Kentucky
Revised Statute 90.400, is vested in the AEPF Board of Trustees, which consists of the Mayor, City
Manager and an elected retired employee.
Plan Description:
PFPF is a single-employer defined benefit plan. On August 1, 1988, the plan was closed to new
entrants and current active duty police and firemen of the City were given a choice of remaining in this
plan or transferring into the CERS. Effective August 1, 1988, the PFPF covered 21 active duty
members. All other active duty members elected coverage under CERS. PFPF does not issue a
separate, stand-alone report. Accordingly, the plan financial statements are included in this audit report.
AEPF is a single-employer defined benefit plan which covers past appointed employees of the City. In
1975, the City froze admission of new entrants into the plan. There are no active participants in the
plan at June 30, 2015. AEPF does not issue a separate, stand-alone report. Accordingly, the plan
financial statements are included in this audit report.
(Continued)
- 85 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2015
Note 4 - Pension Plans - City of Paducah:
Single Employer Defined Benefit Funds - Police and Firefighters' Pension Fund (PFPF) and
Appointive Employees’ Pension Fund (AEPF)
Membership Information:
Membership of each plan consisted of the following at June 30, 2015:
PFPF AEPF
Active participants 1 0
Beneficiaries 30 2
Retired participants 27 1
TOTAL PARTICIPANTS 58 3
These plans are closed to new members.
Benefits provided:
PFPF provides retirement, disability, and death benefits. These benefits are determined by Kentucky
Revised Statutes (KRS) sections 95.851 to 95.884. Retirement benefits for general plan members are
2½% of average salary times years of service up to and including 30 years. The maximum is 75% of
average salary. Average salary is the highest average salary of the member for any 3 consecutive years
of service. Retirement allowed any time after attainment of age 50, provided that at least 20 years of
service have been completed. Occupational disability benefits equal to 70% of the members’ final rate
of pay. Non-occupational disability benefits are available after completing 10 years of service and are
determined in a similar manner as retirement benefits subject to a maximum of 50% of average salary.
Surviving beneficiaries may receive death benefits per the terms of the plan. Benefit terms provide for
an annual cost-of-living adjustment up to 5% a year provided the adjustment is supportable on an
actuarially sound basis. Kentucky Revised Statute 95.859(2) provides that the widow’s minimum
benefit shall be increased by the same percentage as the increase in Social Security benefits, not to
exceed 5%.
AEPF provides retirement, disability, and death benefits. Retirement allowed any time after attainment
of age 60, provided that at least 20 years of service have been completed. Retirement benefits for
general plan members are 50% of monthly salary at the time of retirement. Occupational disability
benefits equal to 50% of the members’ final rate of pay. Surviving beneficiaries may receive death
benefits per the terms of the plan. Effective January 1, 1998, all persons receiving benefits received a
one-time increase of 10%.
Funding policy:
PFPF - Plan members are required to contribute 8% of their annual covered salary. A member reserve
is established for member contributions, less amounts transferred to reserves for retirement and
disability and amounts refunded to terminated employees.
AEPF - Since there are only retired employees and beneficiaries receiving benefits, the City expects
little or no additional pension obligation. The City has pledged to maintain benefits and the financial
soundness of the plan by appropriations from the General Fund, as necessary.
(Continued)
- 86 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2015
Note 4 - Pension Plans - City of Paducah:
Single Employer Defined Benefit Funds - Police and Firefighters' Pension Fund (PFPF) and
Appointive Employees’ Pension Fund (AEPF)
Changes in PFPF and AEPF’s Net Pension Liability is as follows:
PFPF
Total
Pension
Liability
Plan
Net
Position
Net
Pension
Liability
(a) (b) (a) – (b)
Balance – June 30, 2014 $10,975,910 $ 7,135,789 $ 3,840,121
Service cost 5,576 - 5,576
Interest expense 744,910 - 744,910
Experience losses (gains) (43,965) - (43,965)
Change in assumptions 166,753 - 166,753
Contributions – City - 391,468 (391,468)
Contributions – Members - 6,088 (6,088)
Investment income - 310,681 (310,681)
Benefits paid (1,386,273) (1,386,273) -
Plan administrative expenses - (49,115) 49,115
Net change (512,999) (727,151) 214,152
Balance – June 30, 2015 $10,462,911 $ 6,408,638 $ 4,054,273
AEPF
Total
Pension
Liability
Plan
Net
Position
Net
Pension
Liability
(a) (b) (a) – (b)
Balance – June 30, 2014 $ 104,709 $ 47,868 $ 56,841
Service cost - - -
Interest expense 5,687 - 5,687
Experience losses (gains) 9,391 - 9,391
Change in assumptions - - -
Contributions – City - - -
Contributions – Members - - -
Investment income - 264 (264)
Benefits paid (19,856) (19,856) -
Plan administrative expenses - (7,533) 7,533
Net change (4,778) (27,125) 22,347
Balance – June 30, 2015 $ 99,931 $ 20,743 $ 79,188
For the year ended June 30, 2015, the City recognized pension expense of $386,516 and $21,583
related to PFPF and AEPF pension plans, respectively.
(Continued)
- 87 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2015
Note 4 - Pension Plans - City of Paducah:
Single Employer Defined Benefit Funds - Police and Firefighters' Pension Fund (PFPF) and
Appointive Employees’ Pension Fund (AEPF)
At June 30, 2015, the City reported deferred outflows of resources and deferred inflows of resources
related to the PFPF and AEPF pension plans from the following sources:
PFPF AEPF
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Difference between expected and
actual experience
$ -
$ -
$ -
$ -
Changes in assumptions - - - -
Net difference between projected
and actual earnings on pension
plan investments
148,187 326,430
3,422 -
Total $ 148,187 $ 326,430 $ 3,422 $ -
Amounts reported as deferred outflows of resources and deferred inflows related to pensions will be
recognized in pension expense as follows:
Fiscal Year Ending June 30
PFPF AEPF
2016 $ (71,763) $ 1,022
2017 (71,763) 1,022
2018 (71,763) 1,022
2019 37,047 357
The schedule of funding progress, presented as required supplementary information following the notes
to the financial statements, presents multiyear trend information about whether the actuarial value of
plan assets is increasing or decreasing relative to the actuarial accrued liability for benefits.
Actuarial assumption
PFPF AEPF
Valuation date 7/1/15 7/1/15
Actuarial cost method Entry age normal Aggregate (1)
Amortization method Level dollar closed Level dollar closed
Remaining amortization period 18 Years 10 Years
Asset valuation method Market value Market value
(Continued)
- 88 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2015
Note 4 - Pension Plans - City of Paducah:
Single Employer Defined Benefit Funds - Police and Firefighters' Pension Fund (PFPF) and
Appointive Employees’ Pension Fund (AEPF)
Actuarial assumptions:
Investment rate of return 7.00% (3) 6.0%
Projected salary increases 4.00% (2)
Inflation rates adjustments 3.00% (2)
(1) The Aggregate Method does not identify or separately amortize the unfunded actuarial
liabilities. Information about funded status and funding progress is presented using the entry
age actuarial cost method for that purpose; and, that information presented is intended to serve
as a surrogate for the funding progress of the plan.
(2) The plan has no active participants. The pension cost for each year is determined as an
amortization of the unfunded actuarial accrued liability over the lesser of 10 years or the
weighted average of expected term of payment of plan benefits.
(3) 7.00% Effective July 1, 2015
Post-retirement mortality – The mortality rates for the plans were based as follows:
PFPF 1971 Group annuity mortality (GAM) table
UP-1984 table set forward 5 years for participants retiring due to disability
AEPF GAM 1983 Male
GAM 1983 Female
Rate of return – Investment return is anticipated to be the major source of additional funds for
payment of benefits. The assumed rate of return is a long-term average. The fund’s rate of return is
determined primarily by the asset allocation – the classes in which it is invested, and the
performance of the associated markets. For the July 1, 2014 PFPF plan year, the assumed rate of
return was 7.25%. Beginning with the July 1, 2015 plan year, the assumed rate of return was
changed to 7.00%. For the AEPF July 1, 2014 and 2015 plan years, the assumed rate of return was
6%.
Discount Rate – The projection of cash flows used to determine the discount rate assumed that the
plan member contributions will be made at the current contribution rate and that City contributions
will be made equal to the difference between actuarially determined contribution and the member
contribution. The pension plans’ fiduciary net position was projected to be available to make all
projected future benefit payments of current plan members. Therefore, the long-term expected rate
of return on pension plans investment was applied to all periods of projected benefit payments to
determine the total pension liability. The discount rate used to measure the total pension liability as
of July 1, 2015 was as follows:
PFPF 7.00% - changed from 7.25% for the prior plan year.
AEPF 6.00%
(Continued)
- 89 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2015
Note 4 - Pension Plans - City of Paducah:
Single Employer Defined Benefit Funds - Police and Firefighters' Pension Fund (PFPF) and
Appointive Employees’ Pension Fund (AEPF)
Sensitivity of the net pension liability to changes in the discount rate – The following presents the
net pension liability of the City’s plans would be if it were calculated using a discount rate that is 1%
point lower or 1% point higher than the current rate:
1% Current 1%
Decrease Rate Increase
PFPF Net Pension Liability $ 4,778,335 $ 4,054,273 $ 3,417,132
AEPF Net Pension Liability $ 84,363 $ 79,188 $ 74,526
Financial Reports
The Police and Firefighters' Pension Fund (PFPF) and Appointive Employees’ Pension Fund (AEPF) plans
do not issue stand-alone financial reports. The Plans financial statements are as follows:
COMBINING STATEMENT OF FIDUCIARY NET POSITION
PENSION TRUST FUNDS
JUNE 30, 2015
PFPF AEPF Total
Assets
Cash and cash equivalents $ 10,814 $ 20,754 $ 31,568
Receivables:
Interest 14,035 - 14,035
Investments at fair value
Money market accounts 331,421 - 331,421
Common stock 2,573,281 - 2,573,281
Corporate bonds 377,462 - 377,462
Mutual funds 3,101,669 - 3,101,669
Total assets 6,408,682 20,754 6,429,436
Liabilities
Vouchers and accounts payable 44 2 46
Net Position
Held in trust for pension benefits $ 6,408,638 $ 20,752 $ 6,429,390
(Continued)
- 90 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2015
Note 4 - Pension Plans - City of Paducah:
Single Employer Defined Benefit Funds - Police and Firefighters' Pension Fund (PFPF) and
Appointive Employees’ Pension Fund (AEPF)
COMBINING STATEMENT OF CHANGES IN NET POSITION
PENSION TRUST FUNDS
JUNE 30, 2015
PFPF AEPF Total
Additions:
Contributions
Employer $ 391,468 $ - $ 391,468
Plan members 6,088 - 6,088
Total contributions 397,556 - 397,556
Investments earnings:
Net change in fair value of investments 139,426 - 139,426
Interest and dividends 171,255 274 171,529
Net investment earnings 310,681 274 310,955
Total additions 708,237 274 708,511
Deductions:
Benefits 1,386,273 19,857 1,406,130
Administrative expenses 49,115 7,533 56,648
Total deductions 1,435,388 27,390 1,462,777
Change in net position (727,151) (27,116) (754,267)
Net position - beginning 7,135,789 47,868 7,183,657
Net position - ending $ 6,408,638 $ 20,752 $ 6,429,390
Note 5 - Component Unit Long-Term Liabilities:
Long-term liabilities of the discretely presented component units consist of the following at June 30, 2015:
Note Payable, Kentucky Infrastructure Authority (KIA) – Paducah Water Works
In connection with a merger with Reidland Water District, Paducah Water Works assumed a loan from the
KIA. Interest rate is 1.00%, with a .25% annual service fee. The annual requirements to amortize the
outstanding debt as of June 30, 2015, are as follows:
.25%
Year Ending Service R & M
June 30 Principal Interest Fee Reserve Total
2016 $ 344,600 $ 58,623 $ 14,656 $ 18,750 $ 436,629
2017 348,054 55,168 13,792 18,750 435,764
2018 351,543 51,679 12,920 18,750 434,892
2019 355,068 48,155 12,039 18,750 434,012
2020 358,627 44,595 11,149 18,750 433,121
2021-2025 1,847,790 168,320 42,080 18,750 2,076,940
2026-2030 1,942,287 73,823 18,456 - 2,034,566
2031 400,218 3,004 750 - 403,972
TOTALS $5,948,187 $503,367 $125,842 $112,500 $6,689,896
(Continued)
- 91 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2015
Note 6 - Appropriations Deficit:
No departments that adopted budgets annually had excess expenditures over appropriations for the fiscal
year ended June 30, 2015.
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, 2015, the most significant construction commitment was as follows:
Cumulative Estimated
Costs Incurred Total Costs
Olivet Church Road Improvement Project $ 259,851 $ 6,380,137
Loan Guarantee
The City of Paducah and McCracken County Fiscal Court (County) are co-guarantors for a Greater
Paducah Economic Development Council, Inc. (GPEDC) commercial loan for development of the
Information Age Park. The balance outstanding as of fiscal year end is $321,438 of which the City and
County have equally guaranteed. The GPEDC is current on required payments and is expected to make full
repayment of the loan.
Note 8 - Risk Management and Litigation:
The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets;
errors and omissions; injuries to employees; and natural disasters. The City obtains coverage from
commercial insurance companies to handle the risk of loss. There have been no decreases in insurance
coverage from the prior year. There have been no settlements in excess of insurance coverage during the
prior three years.
An analysis of claims activity is presented below:
Current Year
Beginning of Claims and Actual Balance at
Fiscal Year Changes in Claim Fiscal
Liability Estimates Payments Year End
2013 - 2013 $ 1,463 $ 29,551 $ 31,014 $ -
2013 - 2014 - 35,888 35,888 -
2014 - 2015 - 32,834 32,834 -
(Continued)
- 92 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2015
Note 8 - Risk Management and Litigation:
During fiscal year 1999, the City established the Health Insurance Fund (an internal service fund) to
account for and finance employee medical costs relating to the City’s employee self-insured medical
benefit plan that went into effect as of July 1, 1999. The health insurance provides coverage for up to
$175,000 for each covered individual. The City purchases commercial insurance (reinsurance) for claims
in excess of the coverage provided per individual or in excess of the maximum aggregate limit, which is
based on a formula that considers group census and anticipated claims. As of June 30, 2015, that amount
was $2,029,679. 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 $263,484 at June 30, 2015.
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
2012 - 2013 $ 249,654 $ 2,700,338 $2,865,390 $ 84,602
2013 - 2014 84,602 1,662,555 1,589,216 157,941
2014 - 2015 157,941 2,833,917 2,728,374 263,484
Several lawsuits are pending involving citizens’ complaints and the City of Paducah. Various allegations
have been made seeking damages which the legal counsel of the City, along with its management, has
determined to be immaterial to the City’s financial position.
Note 9 - Lease Agreements:
Operating Leases
The City is leasing land and building to the Luther F. Carson Four Rivers Center for the Performing Arts
(Center) for a primary term of 99 years. No rental revenue is being collected from this lease. The rental
for the primary term of the lease is the construction of the performing arts center. The building is deemed
the property of the City; however, for financial reporting, the building is reported with the Luther F.
Carson Four Rivers Center financial records. In December 2003, with the authorization of the City, the
Center secured financing of $6.5 million subject to a mortgage against the leasehold and real property on
which the performing arts center is located. The City also consented to an assignment of the lease as
security for the loan.
The City also leases certain other property to various lessees under non-cancelable agreements that have
various expiration dates through June 30, 2024. Rental revenue received from leased property during 2015
totaled $749,677.
The following is an analysis of property leased under these leases at June 30, 2015:
Land $ 480,000
Buildings 3,422,261
Equipment 110,126
Total 4,012,387
Less: accumulated depreciation (1,082,462)
NET BOOK VALUE $2,929,925
(Continued)
- 93 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2015
Note 9 - Lease Agreements:
Operating Leases
Depreciation expense for the year ended June 30, 2015, on leased property was $81,466.
The following is a schedule of future minimum rental income from operating leases at June 30, 2015:
Lease
Income
2016 $ 558,355
2017 374,125
2018 374,125
2019 374,125
2020 365,791
2021-2024 1,171,030
TOTAL MINIMUM LEASE RECEIPTS $3,217,551
Note 10 – Restatement of Net Position:
Effective July 1, 2014, the City was required to adopt Governmental Accounting Standards Board (GASB)
Statement no. 68, “Accounting and Financial Reporting for Pensions” (GASB 68). GASB 68 replaced the
requirements of GASB 27, “Accounting for Pensions by State and Local Governmental Employers” and
GASB 50, “Pension Disclosures”, as they relate to governments that provide pensions through pension
plans administered as trusts or similar arrangements that meet certain criteria. GASB 68 requires
governments providing defined benefit pensions to recognize their long-term obligation for pension
benefits as a liability to more comprehensively and comparably measure the annual costs of pension
benefits. Cost-sharing governmental employers, such as the City, are required to report a net pension
liability, pension expense and pension-related assets and liabilities based on their proportionate share of
the collective amounts for all governments in the plan.
GASB 68 required retrospective application. Since the City only presents one year of financial
information, the beginning net pension was adjusted to reflect the retrospective application. The
adjustment resulted in a $39,216,144 reduction in beginning net position on the Statement of Activities
and an increase of $4,405,233 of deferred outflows of resources - $4,364,682 of City contributions
subsequent to the measurement date and $40,551 of difference between projected and actuarial earnings on
investments. Beginning net position restatement by type is as follows:
Business Type Activities
Governmental
Type Activities
Solid
Waste
Section
Eight
Housing
Net position – as previously stated $ 55,601,018 $ 4,341,775 $ 440,619
GASB 68 implementation (37,687,394) (1,325,844) (202,906)
Net position – as restated $ 17,913,624 $ 3,015,931 $ 237,713
(Continued)
- 94 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2015
Note 10 – Restatement of Net Position:
Restatement of General Capital Improvement Fund
The beginning fund balance of the General Capital Improvements Fund has been restated on the fund basis
financial statements for a period adjustment to record inventory acquired in prior years. A reconciliation of
the prior period ending fund balance to the current year beginning fund balance for the General Capital
Improvements Fund is as follows:
General
Capital
Improvement
Fund
Fund balance – as previously stated $ 3,206,412
Classification of inventory 1,497,662
Fund balance – as restated $ 4,704,074
CITY OF PADUCAH, KENTUCKY
REQUIRED SUPPLEMENTARY INFORMATION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2015
2015 2014
Total pension liability
Service cost 5,576$ 4,871$
Interest 744,910 792,267
Changes in benefit terms - -
Differences between expected and actual experience (43,965) 150,977
Changes in assumptions 166,753 175,893
Benefit payments/refunds (1,386,273) (1,445,080)
Net change in total pension liability (512,999) (321,072)
Total pension liability - beginning 10,975,910 11,296,982
Total pension liability - ending (a)10,462,911$ 10,975,910$
Plan fiduciary net position
Contributions - employer 391,468$ 420,834$
Contributions - member 6,088 5,354
Net investment income 310,681 1,057,726
Benefit payments/refunds (1,386,273) (1,445,080)
Administrative expenses (49,115) (48,406)
Other - -
Net change in plan fiduciary net position (727,151) (9,572)
Plan fiduciary net position - beginning 7,135,789 7,145,361
Plan fiduciary net position - ending (b)6,408,638$ 7,135,789$
Net pension liability ending (a) - (b)4,054,273$ 3,840,121$
Plan fiduciary net position as a percentage of total pension liability 61%65%
Covered-employee payroll 76,102$ 66,928$
Net pension liability as a percentage of covered-employee payroll 5327%5738%
(1)
-95-
Exhibit A-1
CITY OF PADUCAH, KENTUCKY
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF CHANGES IN THE POLICE AND FIREFIGHTERS' PENSION
Last Two Fiscal Years Ending June 30 (1)
TRUST FUND'S NET PENSION LIABILITY AND RELATED RATIOS
Schedule is intended to show information for 10 years. Additional years of supplementary information will be provided
as this information becomes available.
2015 2014
Total pension liability
Service cost -$ -$
Interest 5,687 8,258
Changes in benefit terms - -
Differences between expected and actual experience 9,391 (30,605)
Changes in assumptions - -
Benefit payments/refunds (19,856) (21,152)
Net change in total pension liability (4,778) (43,499)
Total pension liability - beginning 104,709 148,208
Total pension liability - ending (a)99,931$ 104,709$
Plan fiduciary net position
Contributions - employer -$ -$
Contributions - member - -
Net investment income 264 598
Benefit payments/refunds (19,856) (21,152)
Administrative expenses (7,533) (7,483)
Other - -
Net change in plan fiduciary net position (27,125) (28,037)
Plan fiduciary net position - beginning 47,868 75,905
Plan fiduciary net position - ending (b)20,743$ 47,868$
Net pension liability ending (a) - (b)79,188$ 56,841$
Plan fiduciary net position as a percentage of total pension liability 20.8% 45.7%
Covered-employee payroll n/a n/a
Net pension liability as a percentage of covered-employee payroll n/a n/a
(1)
-96-
Exhibit A-2
CITY OF PADUCAH, KENTUCKY
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF CHANGES IN THE APPOINTIVE EMPLOYEES' PENSION
TRUST FUND'S NET PENSION LIABILITY AND RELATED RATIOS
Last Two Fiscal Years Ending June 30 (1)
Schedule is intended to show information for 10 years. Additional years of supplementary information will be
provided as this information becomes available.
2015 2014
Actuarially determined contribution 391,468$ 421,933$
Contributions in relation to the actuarially
determined contribution 391,468 420,834
Contribution deficiency (excess)-$ 1,099$
Covered-employee payroll 76,102$ 66,928$
Contributions as a percentage of covered-employee payroll 514%629%
2015 2014
Annual money-weighted rate of return, net of investment expense 4.69% 15.95%
(1)
Exhibit A-3
CITY OF PADUCAH, KENTUCKY
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF POLICE AND FIREFIGHTERS' PENSION TRUST FUND
CONTRIBUTIONS AND INVESTMENT RETURNS
Last Two Fiscal Years Ending June 30 (1)
Schedule of Contributions
Schedule of Investment Returns
-97-
Schedule is intended to show information for 10 years. Additional years of supplementary information will be
provided as this information becomes available.
2015 2014
Actuarially determined contribution 15,734$ 10,779$
Contributions in relation to the actuarially
determined contribution - -
Contribution deficiency (excess)15,734$ 10,779$
Covered-employee payroll n/a n/a
Contributions as a percentage of covered-employee payroll n/a n/a
2015 2014
Annual money-weighted rate of return, net of investment expense 0.75% 0.97%
(1)
Last Two Fiscal Years Ending June 30 (1)
Exhibit A-4
CITY OF PADUCAH, KENTUCKY
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF APPOINTIVE EMPLOYEES' PENSION TRUST FUNDS
CONTRIBUTIONS AND INVESTMENT RETURNS
-98-
Schedule of Contributions
Schedule of Investment Returns
Schedule is intended to show information for 10 years. Additional years of supplementary information will be provided
as this information becomes available.
Year Ended
June 30
City's
proportion
of the net
pension
liability
City's
proportionate share
of the net pension
liability (asset)
City's covered
employee payroll
City's share of the
net pension
liability (asset) as
a percentage of its
covered employee
payroll
Plan fiduciary
net position as a
percentage of
the total pension
liability
CERS Nonhazardous
2015 0.3261% 10,579,475$ 7,477,608$ 141.4821% 66.8010%
2014 0.3261% 11,970,884$ 7,666,979$ 156.1356% 61.2209%
CERS Hazardous
2015 1.6323% 19,617,569$ 8,267,598$ 237.2826% 63.4574%
2014 1.6323% 21,907,757$ 8,016,505$ 273.2831% 65.7178%
*The amounts presented were determined as of the measurement date June 30 of the prior year.
*
Exhibit A-5
-99-
CITY OF PADUCAH, KENTUCKY
SCHEDULE OF CITY'S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY
COUNTY EMPLOYEES' RETIREMENT SYSTEM
LAST TWO FISCAL YEARS*
Schedule is intended to show information for 10 years. Additional years of supplementary information will be provided as
this information becomes available.
REQUIRED SUPPLEMENTARY INFORMATION
Year Ended
June 30
Contractually
required
contribution
Contributions
relative to
contractually
required
contribution
Contribution
deficiency (excess)
City's covered
employee
payroll
Contributions
as a percentage
of covered
employee
payroll
CERS Nonhazardous
2015 1,802,892$ 1,802,892$ -$ 7,477,608$ 24.1105%
2014 1,847,019$ 1,847,019$ -$ 7,666,979$ 24.0906%
CERS Hazardous
2015 3,623,991$ 3,623,991$ -$ 8,267,598$ 43.8337%
2014 3,663,887$ 3,663,887$ -$ 8,016,505$ 45.7043%
*The amounts presented for each fiscal year were determined as of the measurement date June 30 of the prior year.
*
Changes of Benefit Terms:
A cash balance plan was introduced for member whose participation date is on or after January 1, 2014.
Changes of assumptions:
The assumptions were updated as of result of an experience study for the three year period ending June 30, 2008.
Exhibit A-6
-100-
Notes to Required Supplementary Information
For the Year Ended June 30, 2015
The amortization period of the unfunded accrued liability was reset to a closed 30 year period for the year ended June 30,
2013.
Schedule is intended to show information for 10 years. Additional years of supplementary information will be provided
as this information becomes available.
CITY OF PADUCAH, KENTUCKY
SCHEDULE OF CITY'S CONTRIBUTIONS
COUNTY EMPLOYEES' RETIREMENT SYSTEM
LAST TWO FISCAL YEARS*
REQUIRED SUPPLEMENTARY INFORMATION
CITY OF PADUCAH, KENTUCKY
SUPPLEMENTARY INFORMATION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2015
Exhibit B-1
Variance with
Final Budget
Final Positive
Budget (Negative)
Revenues:
Intergovernmental and grants
Intergovernmental 17,920$ 17,920$ -$
Grants 1,600,690 1,600,707 17
Miscellaneous 424,615 424,627 12
Total revenues 2,043,225 2,043,254 29
Expenditures:
Capital outlay 4,039,440 4,708,663 (669,223)
Excess (deficiency) of revenues over
expenditures (1,996,215) (2,665,409) (669,194)
Other Financing Sources (Uses):
Operating transfers in 3,510,510 3,510,522 12
Operating transfers out (55,295) (55,292) (3)
Total other financing sources 3,455,215 3,455,230 9
Net change in fund balance 1,459,000$ 789,821 (669,185)$
Fund balance, July 1, 2014 4,704,074
FUND BALANCE, JUNE 30, 2015 5,493,895$
See auditors report on pages 11-12.
-101-
Actual
CITY OF PADUCAH, KENTUCKY
DETAIL SCHEDULE OF REVENUES, EXPENDITURES, AND
GENERAL CAPITAL IMPROVEMENTS FUND
FOR THE YEAR ENDED JUNE 30, 2015
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
Exhibit B-2
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
Revenues:
Intergovernmental 634,260$ 634,256$ (4)$
Property upkeep, rentals, sales and other 289,000 289,002 2
Total revenues 923,260 923,258 (2)
Expenditures:
Debt service:
Principal requirement 2,158,395 2,158,385 10
Interest and fiscal requirement 817,210 817,191 19
Total expenditures 2,975,605 2,975,576 29
Excess (deficiency) of revenues over
expenditures (2,052,345) (2,052,318) 27
Other Financing Sources (Uses):
Operating transfers in 2,200,815 2,200,820 5
Total other financing sources 2,200,815 2,200,820 5
Net change in fund balance 148,470$ 148,502 32$
Fund balance, July 1, 2014 503,817
FUND BALANCE, JUNE 30, 2015 652,319$
See auditors report on pages 11-12.
-102-
FOR THE YEAR ENDED JUNE 30, 2015
CITY OF PADUCAH, KENTUCKY
DEBT SERVICE FUND
DETAIL SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
CITY OF PADUCAH, KENTUCKY
SUPPLEMENTARY INFORMATION
NONMAJOR GOVERNMENTAL FUNDS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2015
COMBINING FINANCIAL STATEMENTS
NONMAJOR GOVERNMENTAL FUNDS
Special Revenue Funds
Municipal Aid Program – to account for revenues and expenditures of Kentucky gas tax refunds.
Emergency Communication Service Fund - to account for revenues associated with 911 program.
Court Awards Fund - to account for revenues associated with judicial system confiscations.
Bond Fund – to account for revenues associated with bonds issued by the City.
Federal, State, and Local Grants - to account for the grant programs awarded to the City of Paducah
from agencies of the Federal Government and the Commonwealth of Kentucky.
Exhibit B-3
Court
Awards
Fund
Cash and cash equivalents 1,180,051$ 237,860$ 216,201$
Receivables, net:
Accounts 46,792 122,620 -
TOTAL ASSETS 1,226,843$ 360,480$ 216,201$
Liabilities:
Voucher and accounts payable 68,670$ 6,219$ 71,344$
Accrued payroll and payroll taxes - 55,284 -
Total liabilities 68,670 61,503 71,344
Fund Balances:
Restricted for:
Highway and streets 1,158,173 - -
Public safet y - - 144,857
Capital Improvements - - -
Assigned for:
Public safet y - 298,977 -
Total fund balances 1,158,173 298,977 144,857
TOTAL LIABILITIES AND
FUND BALANCES 1,226,843$360,480$ 216,201$
See auditors report on pages 11-12.
JUNE 30, 2015
FUND BALANCES
Municipal
Aid Program
Special Revenue Funds
CITY OF PADUCAH, KENTUCKY
COMBINING BALANCE SHEET
ASSETS
-103-
Emergency
AND
NONMAJOR GOVERNMENTAL FUNDS
LIABILITIES
Service Fund
Communication
Special Revenue Funds
CDBG Home
Grant Grant Bond
Fund Fund Fund
-$ -$ 1,269,045$ 2,903,157$
- - - 169,412
-$ -$ 1,269,045$ 3,072,569$
-$ -$ -$ 146,233$
- - - 55,284
- - - 201,517
- - - 1,158,173
- - - 144,857
- - 1,269,045 1,269,045
- - - 298,977
- - 1,269,045 2,871,052
-$ -$ 1,269,045$ 3,072,569$
Funds
Total Nonmajor
-104-
Governmental
Exhibit B-4
Court
Awards
Revenues: Fund
Taxes -$ 391,826$ -$
Charges for services - 237,217 -
Intergovernmental 592,241 - -
Grants - - 38,572
Interest 9,630 1,100 1,512
Miscellaneous - 427,981 -
Total revenues 601,871 1,058,124 40,084
Expenditures:
Current operations:
Public safety - 1,576,548 17,414
Public service 1,147,950 - -
Planning and development - - -
Capital Outlay - - -
Debt Service:
Debt issuance costs - - -
Total expenditures 1,147,950 1,576,548 17,414
Excess (deficiency) of revenues
over expenditures (546,079) (518,424) 22,670
Other Financing Sources (Uses):
Proceeds of debt - - -
Payment to refunded bond escrow agent - - -
Discount on debt issued - - -
Transfers in 800,000 518,526 -
Transfers out - - -
Total other financing sources (uses) 800,000 518,526 -
Net change in fund balances 253,921 102 22,670
Fund balances (as restated), July 1, 2014 904,252 298,875 122,187
FUND BALANCES, JUNE 30, 2015 1,158,173$298,977$ 144,857$
See auditors report on pages 11-12.
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2015
Emergency
Service Fund
Communication
-105-
Aid Program
Municipal
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
Special Revenue Funds
CDBG Home
Grant Grant Bond
Fund Fund Fund
-$ -$ -$ 391,826$
- - - 237,217
- - - 592,241
237,500 - - 276,072
- - 5,096 17,338
- - - 427,981
237,500 - 5,096 1,942,675
- - - 1,593,962
- - - 1,147,950
237,500 49,836 - 287,336
- - - -
- - 51,461 51,461
237,500 49,836 51,461 3,080,709
- (49,836) (46,365) (1,138,034)
- - 4,225,000 4,225,000
- - (4,143,964) (4,143,964)
- - (29,575) (29,575)
- - - 1,318,526
- (33,956) - (33,956)
- (33,956) 51,461 1,336,031
- (83,792) 5,096 197,997
- 83,792 1,263,949 2,673,055
-$ -$ 1,269,045$ 2,871,052$
Total Nonmajor
Governmental
-106-
Funds
Special Revenue Funds
Exhibit B-5
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
Revenues:
Intergovernmental 592,240$ 592,241$ 1$
Interest 9,630 9,630 -
Total revenues 601,870 601,871 1
Expenditures:
Public service 1,147,955 1,147,950 5
Excess (deficiency) of revenues over
expenditures (546,085) (546,079) 6
Other Financing Sources (Uses):
Operating transfers in 800,000 800,000 -
Operating transfers out - - -
Total other financing sources (uses)800,000 800,000 -
Net change in fund balance 253,915 253,921 6
Fund balance, July 1, 2014 904,252 904,252 -
FUND BALANCE, JUNE 30, 2015 1,158,167$1,158,173$6$
See accompanying notes to the basic financial statements.
-107-
FOR THE YEAR ENDED JUNE 30, 2015
CITY OF PADUCAH, KENTUCKY
MUNICIPAL AID PROGRAM FUND
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN
FUND BALANCE - BUDGET AND ACTUAL
Exhibit B-6
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
Revenues:
Local contributions 391,825$ 391,826$ 1$
Telephone surcharges 237,215 237,217 2
Interest 1,095 1,100 5
Miscellaneous 427,975 427,981 6
Total revenues 1,058,110 1,058,124 14
Expenditures:
Public safety 1,576,740 1,576,548 192
Excess (deficiency) of revenues over
expenditures (518,630) (518,424) 206
Other Financing Sources (Uses):
Operating transfers in 518,525 518,526 1
Operating transfers out - - -
Total other financing sources (uses)518,525 518,526 1
Net change in fund balance (105)$ 102 207$
Fund balance, July 1, 2014 298,875
FUND BALANCE, JUNE 30, 2015 298,977$
See auditors report on pages 11-12.
-108-
FOR THE YEAR ENDED JUNE 30, 2015
CITY OF PADUCAH, KENTUCKY
EMERGENCY COMMUNICATION SERVICE FUND
DETAIL SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
Exhibit B-7
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
Revenues:
Grants 38,570$ 38,572$ 2$
Interest 1,415 1,512 97
Total revenues 39,985 40,084 99
Expenditures:
Public safety 17,420 17,414 6
Excess (deficiency) of revenues over
expenditures 22,565 22,670 105
Net change in fund balance 22,565$ 22,670 105$
Fund balance, July 1, 2014 122,187
FUND BALANCE, JUNE 30, 2015 144,857$
See auditors report on pages 11-12.
-109-
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, 2015
Exhibit B-8
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
Revenues:
Grants 237,500$ 237,500$ -$
Total revenues 237,500 237,500 -
Expenditures:
Planning and development 237,500 237,500 -
Excess (deficiency) of revenues over
expenditures - - -
Net change in fund balance -$ - -$
Fund balance, July 1, 2014 -
FUND BALANCE, JUNE 30, 2015 -$
See auditors report on pages 11-12.
-110-
FOR THE YEAR ENDED JUNE 30, 2015
CITY OF PADUCAH, KENTUCKY
CDBG FUND
DETAIL SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
Exhibit B-9
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
Revenues:
Grants -$ -$ -$
Other - - -
Total revenues - - -
Expenditures:
Planning and development 49,840 49,836 4
Excess (deficiency) of revenues over
expenditures (49,840) (49,836) 4
Other Financing Sources (Uses):
Operating transfers in - - -
Operating transfers out (33,960) (33,956) 4
Net change in fund balance (83,800)$ (83,792) 8$
Fund balance, July 1, 2014 83,792
FUND BALANCE, JUNE 30, 2015 -$
See auditors report on pages 11-12.
-111-
FOR THE YEAR ENDED JUNE 30, 2015
CITY OF PADUCAH, KENTUCKY
HOME GRANT FUND
DETAIL SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
Exhibit B-10
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
Revenues:
Grants -$ -$ -$
Interest 5,095 5,096 1
Total revenues 5,095 5,096 1
Expenditures:
Debt issuance costs 51,460 51,461 (1)
Total expenditures 51,460 51,461 (1)
Excess (deficiency) of revenues over
expenditures (46,365) (46,365) -
Other Financing Sources (Uses):
Proceeds of debt 4,225,000 4,225,000 -
Payment to refunded bond escrow agent (4,143,965) (4,143,964) 1
Discount on debt issued (29,575) (29,575) -
Total other financing sources (uses)51,460 51,461 1
Net change in fund balance 5,095$ 5,096 1$
Fund balance, July 1, 2014 1,263,949
FUND BALANCE, JUNE 30, 2015 1,269,045$
See auditors report on pages 11-12.
-112-
FOR THE YEAR ENDED JUNE 30, 2015
CITY OF PADUCAH, KENTUCKY
BOND FUND
DETAIL SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
CITY OF PADUCAH, KENTUCKY
SUPPLEMENTARY INFORMATION
NONMAJOR PROPRIETARY FUNDS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2015
COMBINING FINANCIAL STATEMENTS
NONMAJOR PROPRIETARY FUNDS
Section Eight Housing Fund – to account for the housing choice voucher program grant governed by the
United States Department of Housing and Urban Development.
Civic Center Fund – to account for the operation of the Civic Center.
Exhibit C-1
Civic
Center
Current Assets: Fund
Cash and cash equivalents 438,858$ -$ 438,858$
Total current assets 438,858 - 438,858
Noncurrent Assets:
Net depreciable capital assets 1,851 139,554 141,405
Total assets 440,709 139,554 580,263
Deferred Outflows of Resources:
Deferred pension contributions 26,286 - 26,286
Current Liabilities:
Voucher and accounts payable 62,474 6,218 68,692
Accrued compensated absences 2,163 - 2,163
Due to other funds 29,979 - 29,979
Total current liabilities 94,616 6,218 100,834
Noncurrent Liabilities:
Pensions obligation 204,251 - 204,251
Accrued compensated absences 19,466 - 19,466
Total noncurrent liabilities 223,717 - 223,717
Total liabilities 318,333 6,218 324,551
Deferred Inflows of Resources
Difference between projected and actuarial
earnings on pension plan investments 22,799 - 22,799
Net invested in capital assets 1,851 139,554 141,405
Restricted - Housing 124,012 - 124,012
Unrestricted - (6,218) (6,218)
TOTAL NET POSITION 125,863$ 133,336$259,199$
See auditors report on pages 11-12.
NET POSITION
-113-
Total Nonmajor
Enterprise
Funds
Section
Eight
Housing
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF NET POSITION
NONMAJOR PROPRIETARY FUNDS
JUNE 30, 2015
ASSETS
LIABILITIES
Exhibit C-2
Civic
Center
Operating Revenues: Fund
Charges for services -$ 43,486$ 43,486$
Miscellaneous 5,613 - 5,613
Total operating income 5,613 43,486 49,099
Operating Expenses:
Cost of sales and service 1,818,042 88,297 1,906,339
Depreciation and amortization 1,285 10,021 11,306
Total operating expenses 1,819,327 98,318 1,917,645
Operating income (loss)(1,813,714) (54,832) (1,868,546)
Non-Operating Revenues (Expenses):
Grants - program purpose 1,701,819 - 1,701,819
Interest and investment income 45 - 45
Total nonoperating revenues
(expenses)1,701,864 - 1,701,864
Income (loss) before contributions and
transfers (111,850) (54,832) (166,682)
Contributions and Operating Transfers:
Transfers in - 45,986 45,986
Transfers out - - -
Total contributions and operating transfers - 45,986 45,986
Change in net position (111,850) (8,846) (120,696)
Net position - beginning as restated (Note 10)237,713 142,182 379,895
Net position - ending 125,863$ 133,336$ 259,199$
See auditors report on pages 11-12.
Eight
Housing
COMBINING STATEMENT OF REVENUES, EXPENSES
CITY OF PADUCAH, KENTUCKY
Total Nonmajor
Enterprise
-114-
FOR THE YEAR ENDED JUNE 30, 2015
NONMAJOR PROPRIETARY FUNDS
AND CHANGES IN NET POSITION
Funds
Section
Exhibit C-3
Civic
Center
Cash Flows from Operating Activities: Fund
Cash received from customers -$ 43,486$ 43,486$
Payments to employees (143,748) - (143,748)
Payments to internal service funds - (2,405) (2,405)
Other receipts 5,613 - 5,613
Housing assistance and other payments (1,700,359) (87,068) (1,787,427)
Net cash provided (used) by operating activities (1,838,494) (45,987) (1,884,481)
Cash Flows from Noncapital
Financing Activities:
Grants - program purpose 1,649,429 - 1,649,429
Transfers from other funds - 45,986 45,986
Transfers to other funds - - -
Net cash provided (used) by noncapital
financing activities 1,649,429 45,986 1,695,415
Cash Flows from Investing Activities:
Interest on cash and investments 45 - 45
Net increase (decrease) in cash and cash
equivalents (189,020) (1) (189,021)
Cash and cash equivalents, July 1, 2014 627,878 1 627,879
CASH AND CASH EQUIVALENTS,
JUNE 30, 2015 438,858$ -$ 438,858$
Reconciliation of Operating Income (Loss) to
Net Cash Provided by Operating Activities:
Operating income (loss)(1,813,714)$ (54,832)$ (1,868,546)$
Adjustments to reconcile operating income (loss)
to net cash provided by operating activities:
Depreciation and amortization 1,285 10,021 11,306
Change in assets and liabilities:
Unearned revenues - - -
Pension obligation and related deferrals (2,141) - (2,141)
Accounts payable and accrued expenses (23,924) (1,176) (25,100)
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES (1,838,494)$ (45,987)$ (1,884,481)$
See auditors report on pages 11-12.
Enterprise
Funds
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF CASH FLOWS
NONMAJOR PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2015
-115-
Section
Eight
Housing
Total Nonmajor
CITY OF PADUCAH, KENTUCKY
SUPPLEMENTARY INFORMATION
INTERNAL SERVICE FUNDS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2015
COMBINING FINANCIAL STATEMENTS
INTERNAL SERVICE FUNDS
Fleet Maintenance – to account for costs of operating a maintenance facility for automotive
equipment used by other City departments.
Fleet Lease Trust – to account for the financing of vehicle acquisitions provided by one
department or agency to other departments or agencies of the government and to other
governmental units, on a cost reimbursement basis.
Insurance Fund – to account for the costs of obtaining insurance for other City departments.
Health Insurance Fund – to account for the costs associated with the City’s health insurance
activities. The intent of the City of Paducah is that the cost of providing insurance coverage on a
continuing basis be financed primarily through user charges.
Exhibit D-1
Health
Fleet Lease Insurance Insurance Combined
Current Assets:Trust Fund Fund Total
Cash and cash equivalents 19,876$ 3,582,667$ 345,996$ 1,937,058$ 5,885,597$
Investments - - - - -
Receivables, net 184 203,250 - 49,922 253,356
Due from other funds - 300,000 - - 300,000
Inventories 64,115 - - - 64,115
Total current assets 84,175 4,085,917 345,996 1,986,980 6,503,068
Noncurrent Assets:
Net depreciable capital assets 9,623 3,167,766 - - 3,177,389
Total assets 93,798 7,253,683 345,996 1,986,980 9,680,457
Deferred Outflows of Resources:
Deferred pension contributions 52,832 - - - 52,832
Current Liabilities:
Voucher and accounts payable 11,799 - 3,625 263,484 278,908
Accrued payroll and payroll taxes 19,633 - - - 19,633
Accrued compensated absences 43,010 - - - 43,010
Deferred revenue - - - 24,472 24,472
Total current liabilities 74,442 - 3,625 287,956 366,023
Noncurrent Liabilities:
Pensions obligation 410,522 - - - 410,522
Accrued compensated absences 19,355 - - - 19,355
Total noncurrent liabilities 429,877 - - - 429,877
Total liabilities 504,319 - 3,625 287,956 795,900
Deferred Inflows of Resources
Difference between projected and actuarial
earnings on pension plan investments 45,824 - - - 45,824
Net invested in capital assets 9,623 3,167,766 - - 3,177,389
Unrestricted (413,136) 4,085,917 342,371 1,699,024 5,714,176
TOTAL NET POSITION (403,513)$7,253,683$342,371$ 1,699,024$ 8,891,565$
See auditors report on pages 11-12.
-116-
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF NET POSITION
INTERNAL SERVICE FUNDS
JUNE 30, 2015
LIABILITIES
ASSETS
NET POSITION
Fleet
Maintenance
Exhibit D-2
Health
Fleet Lease Insurance Insurance Combined
Trust Fund Fund Total
Operating Revenues:
Charges for services - internal 350,833$ 733,642$ 958,111$ 3,475,851$ 5,518,437$
Charges for services - external - - - 276,143 276,143
Total operating revenues 350,833 733,642 958,111 3,751,994 5,794,580
Operating Expenses:
Vehicle maintenance 522,084 - - - 522,084
Administrative - 32,949 - 523,491 556,440
Insurance - - 958,598 3,472,711 4,431,309
Leave expense 4,362 - - - 4,362
Depreciation 8,642 658,485 - - 667,127
Total operating expenses 535,088 691,434 958,598 3,996,202 6,181,322
Operating income (loss)(184,255) 42,208 (487) (244,208) (386,742)
Nonoperating Revenues and (Expenses):
Interest and investment income 5 27,813 - - 27,818
Gain (loss) on disposal of property
and equipment 122 19,390 - - 19,512
Total nonoperating revenues
(expenses)127 47,203 - - 47,330
Income (loss) before transfers (184,128) 89,411 (487) (244,208) (339,412)
Contributions and Transfers:
Transfers in 189,389 - - - 189,389
Transfers out - - - - -
Total contributions and operating transfers 189,389 - - - 189,389
Change in net position 5,261 89,411 (487) (244,208) (150,023)
Net position - beginning as restated (Note 10) (408,774)7,164,272 342,858 1,943,232 9,041,588
Net position - ending (403,513)$7,253,683$342,371$ 1,699,024$ 8,891,565$
See auditors report on pages 11-12.
-117-
Fleet
Maintenance
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF REVENUES, EXPENSES,
AND CHANGES IN NET POSITION
INTERNAL SERVICE FUNDS
FOR THE YEAR ENDED JUNE 30, 2015
Exhibit D-3
Health
Fleet Lease Insurance Insurance Combined
Cash Flows from Operating Activities: Trust Fund Fund Total
Receipts from other funds for services 350,649$ 1,031,624$ 958,111$ 3,749,761$ 6,090,145$
Payments to suppliers (205,804) - - - (205,804)
Payments to employees (321,410) - - - (321,410)
Claims paid - - - (3,347,222) (3,347,222)
Other payments - (32,949) (961,519) (523,492) (1,517,960)
Net cash provided (used) by operating activities (176,565) 998,675 (3,408) (120,953) 697,749
Cash Flows from Noncapital Financing
Activities:
Transfers from other funds 189,389 - - - 189,389
Transfers to other funds - - - - -
Net cash provided (used) by noncapital
financing activities 189,389 - - - 189,389
Cash Flows from Capital and Related
Financing Activities:
Proceeds from sale of capital assets 121 35,617 - - 35,738
Purchase of capital assets - (595,609) - - (595,609)
Net cash used by capital and related financing 121 (559,992) - - (559,871)
Cash Flows from Investing Activities:
Interest and dividends 5 27,813 - - 27,818
Net cash used by investing activities 5 27,813 - - 27,818
Net increase (decrease) in cash
and cash equivalents 12,950 466,496 (3,408) (120,953) 355,085
Cash and cash equivalents, July 1, 2014 6,926 3,116,171 349,404 2,058,011 5,530,512
CASH AND CASH EQUIVALENTS,
JUNE 30, 2015 19,876$ 3,582,667$345,996$ 1,937,058$ 5,885,597$
Reconciliation of Operating Income (Loss) to
Net Cash Provided by Operating Activities:
Operating income (loss)(184,255)$42,208$ (487)$ (244,208)$ (386,742)$
Adjustments to reconcile operating
income (loss) to net cash provided
(used) by operating activities:
Depreciation and amortization 8,642 658,485 - - 667,127
Change in assets and liabilities:
Receivables (184) 14,250 - (3,583) 10,483
Prepaid expense - 183,732 - 19,945 203,677
Inventories 618 - - - 618
Due form other funds - 100,000 - - 100,000
Pension obligation and related deferrals (5,260) - - - (5,260)
Accounts payable and accrued expenses 3,874 - (2,921) 106,893 107,846
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES (176,565)$998,675$ (3,408)$ (120,953)$ 697,749$
See auditors report on pages 11-12.
-118-
Fleet
Maintenance
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF CASH FLOWS
INTERNAL SERVICE FUNDS
FOR THE YEAR ENDED JUNE 30, 2015
CITY OF PADUCAH, KENTUCKY
SUPPLEMENTARY INFORMATION
FIDUCIARY FUNDS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2015
COMBINING FINANCIAL STATEMENTS
FIDUCIARY FUNDS
Private-purpose Trust Funds
Cemetery and Park Trusts - to account for assets held by the City in the capacity of trustee for
specified purposes.
Exhibit E-1
Cemetery
and
Park
Trusts
Cash and cash equivalents 119,255$
Investments at fair value
Money market funds -
Mutual funds 1,050,004
Total assets 1,169,259
Accounts payable -
Held in trust for other purposes 1,169,259$
See auditors report on pages 11-12.
FIDUCIARY FUNDS - PRIVATE-PURPOSE TRUST FUNDS
STATEMENT OF NET POSITION
CITY OF PADUCAH, KENTUCKY
-119-
ASSETS
LIABILITIES
NET POSITION
JUNE 30, 2015
Exhibit E-2
Cemetery
and
Park
Additions:Trusts
Contributions:
Intergovernmental revenues -$
Private donations 2,440
Total contributions 2,440
Investment earnings:
Change in fair value of investments (63,196)
Interest and dividends 96,988
Net investment earnings 33,792
Interfund transfers -
Total additions 36,232
Deductions:
Capital outlay 66,388
Administrative expenses 14,382
Total deductions 80,770
Change in net position (44,538)
Net position - beginning 1,213,797
Net position - ending 1,169,259$
See auditors report on pages 11-12.
STATEMENT OF CHANGES IN NET POSITION
CITY OF PADUCAH, KENTUCKY
-120-
FOR THE YEAR ENDED JUNE 30, 2015
FIDUCIARY FUNDS - PRIVATE-PURPOSE TRUST FUNDS
COMBINING FINANCIAL STATEMENTS
FIDUCIARY FUNDS
Agency Fund
Payroll Agency Fund – to account for disbursements relative to the City payroll. The various
City departments transfer amounts to this fund to cover routine payroll and the related benefits
and taxes. All payroll disbursements are made from this fund.
Exhibit E-3
Payroll Fund: Additions Deductions
Assets:
Cash and cash equivalents 563,646$ 13,341,594$ 13,373,412$ 531,828$
Liabilities:
Payroll taxes and withholdings
payable 563,646$ 13,341,594$ 13,373,412$ 531,828$
See auditors report on pages 11-12.
CITY OF PADUCAH, KENTUCKY
AGENCY FUND
IN ASSETS AND LIABILITIES
STATEMENT OF CHANGES
-121-
FOR THE YEAR ENDED JUNE 30, 2015
Balance Balance
July 1, 2014 June 30, 2015
CITY OF PADUCAH, KENTUCKY
STATISTICAL SECTION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2015
STATISTICAL SECTION
Contents Page
Financial Trends 122-126
Revenue Capacity 127-132
Debt Capacity 133-136
Economic and Demographic Information 137-138
Operating Information 139-141
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.
2015 (1)2014201320122011 2010 (2) 2009200820072006Governmental activities:Net Invested in Capital Assets39,349,789$ 39,844,772$ 33,365,112$ 31,957,381$ 32,905,977$ 31,136,514$ 31,215,252$ 31,766,783$ 32,557,572$ 30,664,671$ Restricted for:Program purposes144,857 205,979 284,760 897,942 1,264,986 1,100,696 2,183,559 1,782,251 1,904,321 1,018,231 Capital projects2,427,218 2,168,201 1,301,421 4,105,639 5,987,399 5,077,026 4,363,913 5,028,420 4,618,923 2,689,804 Unrestricted(22,209,537) 13,382,066 13,539,204 5,913,997 4,229,501 8,165,101 8,621,077 9,432,763 9,057,641 7,718,198 Total governmental activities net position19,712,327$ 55,601,018$ 48,490,497$ 42,874,959$ 44,387,863$ 45,479,337$ 46,383,801$ 48,010,217$ 48,138,457$ 42,090,904$ Business-type activities:Net Invested in Capital Assets1,133,226 1,210,415 1,232,735 1,308,574 1,334,230 1,652,961 1,721,419 1,863,975 1,491,523 1,277,720 Restricted for:Program purposes124,012 437,483 385,885 732,817 999,885 620,800 369,368 579,460 - - Unrestricted3,033,822 3,837,034 3,428,267 3,246,320 3,004,783 1,816,705 1,036,093 (19,965) (147,286) 132,090 Total business-type activities net postion4,291,060$ 5,484,932$ 5,046,887$ 5,287,711$ 5,338,898$ 4,090,466$ 3,126,880$ 2,423,470$ 1,344,237$ 1,409,810$ Primary government:Net Invested in Capital Assets40,483,015 41,055,187 34,597,847 33,265,955 34,240,207 32,789,475 32,936,671 33,630,758 34,049,095 31,942,391 Restricted for:Program purposes268,869 643,462 670,645 1,630,759 2,264,871 1,721,496 2,552,927 2,361,711 1,904,321 1,018,231 Capital projects2,427,218 2,168,201 1,301,421 4,105,639 5,987,399 5,077,026 4,363,913 5,028,420 4,618,923 2,689,804 Unrestricted(19,175,715) 17,219,100 16,967,471 9,160,317 7,234,284 9,981,806 9,657,170 9,412,798 8,910,355 7,850,288 Total primary government net position24,003,387$ 61,085,950$ 53,537,384$ 48,162,670$ 49,726,761$ 49,569,803$ 49,510,681$ 50,433,687$ 49,482,694$ 43,500,714$ (1) Significant change in governmental and business-type net position due to implementation of GASB No. 68 - Accounting and Financial Reporting for Pensions. (2) Significant change in governmental net position due to reclassification for prior year grant receivables. Fiscal YearTABLE 1CITY OF PADUCAH, KENTUCKYNET POSITION BY COMPONENTLast Ten Fiscal Years (accrual basis of accounting)-122-
Pages 1 of 22015 (1) 2014 2013 2012 2011 2010 (3) 2009 2008 (2) 2007 2006ExpensesGovernmental activities:General government 9,801,489$ 8,005,619$ 7,843,140$ 12,937,997$ 9,786,052$ 9,763,178$ 12,148,118$ 10,709,641$ 9,462,543$ 9,057,295$ Public safety17,974,548 18,439,670 18,204,945 17,045,731 16,993,228 16,239,042 15,734,557 15,938,831 15,182,704 14,592,756 Public service 6,855,234 6,982,536 6,167,510 6,163,602 7,328,806 7,669,729 12,849,566 9,543,714 8,299,658 8,486,662 Parks and recreation 2,811,533 2,750,531 2,710,659 2,654,098 2,748,333 2,653,474 1,492,306 1,286,955 1,197,072 1,044,361 Planning and development 1,000,020 1,805,379 1,463,659 1,192,952 1,212,103 970,022 708,827 282,042 1,891,725 2,404,636 Interest on long-term debt 850,827 1,084,016 1,066,876 1,059,537 1,363,580 1,099,450 1,029,888 1,066,067 1,134,898 974,101 Total governmental activities expenses39,293,651 39,067,751 37,456,789 41,053,917 39,432,102 38,394,895 43,963,262 38,827,250 37,168,600 36,559,811 Business-type activities:Solid Waste3,843,081 3,985,233 3,967,490 3,900,264 3,832,130 3,797,097 4,037,845 4,086,747 4,079,684 3,893,013 Section Eight Housing1,819,328 1,855,869 2,032,843 1,921,004 1,956,728 2,061,370 2,154,360 1,949,899 - - Civic Center98,318 81,982 78,000 71,069 76,546 69,537 75,692 84,908 54,562 45,894 TISA- - - 173,708 183,546 206,798 162,848 156,388 267,192 269,781 Total business-type activities expenses5,760,727 5,923,084 6,078,333 6,066,045 6,048,950 6,134,802 6,430,745 6,277,942 4,401,438 4,208,688 Total primary government expenses45,054,378$ 44,990,835$ 43,535,122$ 47,119,962$ 45,481,052$ 44,529,697$ 50,394,007$ 45,105,192$ 41,570,038$ 40,768,499$ Program RevenuesGovernmental activities:Charges for services:General government 185,745$ 1,672,552$ 1,525,212$ 1,488,845$ 1,051,509$ 993,371$ 1,303,667$ 1,415,943$ 1,730,046$ 1,618,903$ Public safety 237,222 264,143 354,829 509,297 790,650 484,754 602,262 268,839 1,024,610 767,086 Public service 945,471 960,271 963,893 1,032,953 1,205,666 1,197,194 1,220,999 1,111,188 1,150,507 942,355 Parks and recreation 108,307 105,248 106,183 97,896 129,790 152,890 180,420 124,606 122,929 103,932 Planning and development - - - - - - 1,600 30,627 10,810 20,602 Operating grants and contributions 3,360,731 5,419,715 3,067,581 2,215,247 2,086,625 1,813,019 2,119,845 1,340,261 2,797,216 2,988,612 Capital grants and contributions 899,522 4,136,749 2,165,548 533,169 1,767,093 1,390,848 4,889,520 1,297,900 3,681,490 3,302,568 Total governmental activities program revenues 5,736,998 12,558,678 8,183,246 5,877,407 7,031,333 6,032,076 10,318,313 5,589,364 10,517,608 9,744,058 Business-type activities:Solid Waste 4,453,865$ 4,410,059$ 4,372,060$ 4,437,341$ 4,476,139$ 4,436,540$ 4,547,959$ 4,165,094$ 3,928,140$ 3,696,609$ Section Eight Housing- - - - - - - - - - Civic Center 43,486 41,266 38,265 34,038 33,766 32,455 38,577 32,932 31,372 26,378 TISA99,603 138,797 148,158 148,291 143,833 193,713 106,697 Operating grants and contributions 1,744,364 1,956,995 1,727,238 1,647,981 2,400,540 2,340,267 1,965,936 1,785,809 - - Capital grants and contributions - - - 15,266 8,659 27,239 129,032 9,480 23,969 22,894 Total business-type activities program revenues 6,241,715 6,408,320 6,137,563 6,234,229 7,057,901 6,984,659 6,829,795 6,137,148 4,177,194 3,852,578 Total primary government program revenues 11,978,713$ 18,966,998$ 14,320,809$ 12,111,636$ 14,089,234$ 13,016,735$ 17,148,108$ 11,726,512$ 14,694,802$ 13,596,636$ Fiscal Year-123-TABLE 2CITY OF PADUCAH, KENTUCKYCHANGES IN NET POSITIONLast Ten Fiscal Years (accrual basis of accounting)
Pages 2 of 22015 (1) 2014 2013 2012 2011 2010 (3) 2009 2008 (2) 2007 2006Net (Expense)/RevenueGovernmental activities(33,556,653)$ (26,509,073)$ (29,273,543)$ (35,176,510)$ (32,400,769)$ (32,362,819)$ (33,644,949)$ (33,237,886)$ (26,650,992)$ (26,815,753)$ Business-type activities480,988 485,236 59,230 168,184 1,008,951 849,857 399,050 (140,794) (224,244) (356,110) Total primary government net (expense) (33,075,665)$ (26,023,837)$ (29,214,313)$ (35,008,326)$ (31,391,818)$ (31,512,962)$ (33,245,899)$ (33,378,680)$ (26,875,236)$ (27,171,863)$ General Revenues and Other Changesin Net PositionGovernmental activities:Taxes and licenses:Property taxes, levied for general purpose4,726,244 4,622,292 4,502,276 4,267,812 4,402,226 4,207,736 3,986,760$ 4,221,957 4,122,538$ 4,107,934$ Insurance premium tax 3,786,514 3,831,792 3,863,464 3,690,806 3,476,309 3,797,347 4,055,228 4,699,458 4,414,672 3,863,953 Gross receipts license tax 4,397,888 4,444,440 4,391,352 4,359,835 4,243,511 4,229,102 4,320,850 4,061,587 4,050,057 3,899,432 Employee license tax 19,092,912 18,114,396 18,336,124 18,095,182 17,345,033 16,384,509 16,584,636 16,520,523 16,273,966 14,794,217 Other taxes 2,964,685 2,785,333 2,799,043 2,711,924 2,712,817 2,844,154 2,776,407 2,259,956 1,964,101 2,105,014 Intergovernmental revenue - - - - - - - 1,401,400 1,243,028 1,201,973 Unrestricted investment earnings 176,229 232,204 211,306 203,261 264,913 172,213 336,960 540,620 639,702 462,292 Miscellaneous 16,870 (482,137) 300,378 36,718 62,539 64,620 68,530 119,200 48,656 8,340 Insurance recoveries - - - 27,448 410,462 - - - - - Litigation settlement - - - - (1,482,743) - - - - - Transfers in/out194,014 212,128 485,138 270,620 (125,772) (78,893) (110,838) (96,609) (58,175) (115,754) Total governmental activities35,355,356 33,760,448 34,889,081 33,663,606 31,309,295 31,620,788 32,018,533 33,728,092 32,698,545 30,327,401 Business-type activities:Unrestricted investment earnings39,565 48,255 49,382 48,806 46,052 33,724 52,961 73,985 83,854 85,786 Miscellaneous8,339 116,682 135,702 2,443 67,657 1,112 98,369 127,131 16,641 55,337 Transfers(194,014) (212,128) (485,138) (270,620) 125,772 78,893 110,838 96,609 58,176 115,754 Total business-type activities(146,110) (47,191) (300,054) (219,371) 239,481 113,729 262,168 297,725 158,671 256,877 Change in Net PositionGovernmental activities:1,798,703 7,251,375 5,615,538 (1,512,904) (1,091,474) (742,031) (1,626,416) 490,206 6,047,553 3,511,648 Business-type activities:334,878 438,045 (240,824) (51,187) 1,248,432 963,586 661,218 156,931 (65,573) (99,233) Total primary government 2,133,581$ 7,689,420$ 5,374,714$ (1,564,091)$ 156,958$ 221,555$ (965,198)$ 647,137$ 5,981,980$ 3,412,415$ (1) Significant change in governmental and business-type net position due to implementation of GASB No. 68 - Accounting and Financial Reporting for Pensions. (2) The City began reporting Section Eight Housing fund as a business-type activity previously reported as a governmental fund. Prior years have not been restated.(3) Significant change in governmental net position due to restatement of prior year grant receivables.(accrual basis of accounting)CHANGES IN NET POSITION-124-Fiscal YearCITY OF PADUCAH, KENTUCKYLast Ten Fiscal Years TABLE 2
20152014201320122011 2010 (2) 2009 2008 (1) 2007 2006General FundUnassigned12,549,232$ 12,694,610$ 12,311,565$ 11,321,438$ 10,940,121$ 10,208,678$ 10,311,490$ 9,416,427$ 9,976,079$ 9,157,310$ Total general fund12,549,232$ 12,694,610$ 12,311,565$ 11,321,438$ 10,940,121$ 10,208,678$ 10,311,490$ 9,416,427$ 9,976,079$ 9,157,310$ All Other Governmental FundsNonspendable:Inventory828,419$ 1,497,659$ 1,336,234$ 1,098,304$ 1,253,953$ 1,416,130$ 2,019,630$ 1,208,749$ 808,216$ 168,703$ Restricted for:Program purposes1,303,030 205,979 284,760 1,236,780 - - - - - - Capital improvements1,269,045 2,168,201 1,301,421 286,276 - - - - - - Committed for:Capital improvements1,814,834 1,758,934 2,589,099 2,631,233 2,587,012 2,844,706 2,618,147 2,081,280 1,692,872 719,801 Assigned for:Program purposes951,296 802,692 752,691 472,235 683,578 1,402,731 1,634,547 1,193,968 1,543,547 1,573,977 Capital improvements4,665,475 3,206,412 3,055,250 1,487,938 2,133,786 5,151,791 1,745,766 2,947,140 2,926,051 1,970,003 Total all other governmental funds 10,832,099$ 9,639,877$ 9,319,455$ 7,212,766$ 6,658,329$ 10,815,358$ 8,018,090$ 7,431,137$ 6,970,686$ 4,432,484$ (1) Significant decrease in reserve for program purpose due to converting governmental fund to proprietary fund.(2) Significant decrease in general fund balance due to restatement of prior year grant receivables-125-Fiscal YearTABLE 3CITY OF PADUCAH, KENTUCKYFund Balances, Governmental FundsLast Ten Fiscal Years (modified accrual basis of accounting)
2015201420132012201120102009200820072006Revenues:Taxes6,987,173$ 6,713,889$ 6,583,690$ 6,343,608$ 6,223,511$ 6,326,740$ 5,867,782$ 6,139,164$ 6,044,069$ 6,204,686$ Licenses27,804,759 26,987,110 27,197,290 26,753,432 25,704,849 24,979,768 25,411,112 25,924,562 25,140,615 23,432,565 Charges for services848,971 851,080 815,791 817,607 811,590 846,087 866,688 835,105 783,018 654,059 Intergovernmental1,244,417 2,624,363 1,240,312 1,191,835 1,148,362 1,091,324 1,086,377 1,565,348 1,676,783 1,529,879 Grants2,496,329 5,923,651 3,737,402 1,699,399 2,992,519 2,062,554 5,405,810 1,673,936 6,089,711 5,797,500 Interest148,411 199,583 175,371 162,580 205,837 121,246 225,251 419,103 540,204 402,943 Other2,408,193 3,271,860 2,743,698 1,902,075 1,790,890 2,653,382 2,250,344 1,944,310 1,832,161 1,844,285 Total revenues41,938,253 46,571,536 42,493,554 38,870,536 38,877,558 38,081,101 41,113,364 38,501,528 42,106,561 39,865,917 Expenditures:General government4,484,105 4,311,103 4,481,485 5,117,194 5,151,370 5,277,916 4,726,435 5,051,374 4,763,839 4,286,431 Public safety18,524,763 18,475,471 18,174,349 18,479,428 16,854,136 15,999,437 15,599,613 15,696,728 14,759,735 14,366,846 Public service6,165,664 6,323,481 5,710,018 5,596,702 6,446,503 5,984,115 7,855,846 7,935,188 7,226,542 7,418,656 Parks and recreation2,842,460 2,602,348 2,426,234 2,677,781 2,781,663 2,582,382 1,490,732 1,298,329 1,192,727 1,044,299 Planning and development950,297 2,086,527 1,776,897 2,372,314 1,842,474 2,471,869 1,000,202 481,523 1,784,685 2,376,524 Other247,878 640,452 766,847 516,534 486,239 847,188 514,488 520,611 526,238 481,690 Capital outlay4,708,663 11,926,435 4,324,821 2,104,993 5,121,682 8,324,312 8,580,910 4,826,983 6,504,491 5,003,091 Debt service:Principal requirement2,158,385 1,748,233 1,698,468 1,434,246 2,233,588 1,020,585 830,682 880,887 782,870 594,047 Debt issuance costs51,461 109,292 - - - - - - - - Interest and fiscal requirement817,191 1,086,866 1,089,447 1,114,852 1,519,329 1,077,128 1,003,439 1,051,008 1,108,385 949,537 Total expenditures40,950,867 49,310,208 40,448,566 39,414,044 42,436,984 43,584,932 41,602,347 37,742,631 38,649,512 36,521,121 Other Financing Sources (Uses):Bonds issued4,225,000 9,055,000 - - - 6,645,000 1,718,605 - - 6,100,000 Payment to bond escrow agent(4,143,964) (5,627,447) - - - - - - - - Premium on debt issued- 220,683 - - - - - - - - Discount on debt issued(29,576) (53,529) - - - - - - - - Long-term debt draws/issued- - 308,112 101,983 366,039 1,480,781 69,032 - 246,667 - Capital lease- - 405,796 405,796 405,796 405,796 405,796 371,979 - - Transfers in7,785,410 9,148,761 7,462,944 5,888,847 8,455,433 9,722,852 5,928,413 6,241,886 5,209,977 6,034,070 Transfers out(7,780,785) (9,199,119) (7,125,024) (5,809,539) (8,201,253) (9,893,709) (6,150,847) (7,086,517) (5,556,722) (12,681,180) Total other financing sources (uses)56,085 3,544,349 1,051,828 587,087 1,026,015 8,360,720 1,970,999 (472,652) (100,078) (547,110) Net change in fund balances1,043,471$ 805,677$ 3,096,816$ 43,579$ (2,533,411)$ 2,856,889$ 1,482,016$ 286,245$ 3,356,971$ 2,797,686$ Capital outlay (1)1,481,948$ 10,843,726$ 4,034,424$ 2,156,290$ 4,833,547$ 8,763,073$ 2,850,717$ 2,857,189$ 4,638,045$ 3,779,542$ Debt service as a percentageof noncapital expenditures7.54%7.37%7.66%6.84%9.98%6.02%4.73%5.54%5.56%4.71%(1) Capital outlay is reported on theReconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities.-126-Fiscal Year(modified accrual basis of accounting)TABLE 4CITY OF PADUCAH, KENTUCKYChanges in Fund Balances, Governmental FundsLast Ten Fiscal Years
TotalEstimated DirectFiscalPersonalActual Tax Year Commercial Residential Property FranchiseTotalValue RateExemptions2006 636,606,837 525,613,365 452,475,748 74,683,129 1,689,379,079 1,750,930,676 0.325 96.5% 61,551,597 2007 692,018,288 561,151,216 482,481,332 51,455,112 1,787,105,948 1,847,595,428 0.307 96.7% 60,489,480 2008 748,189,877 603,688,455 481,049,523 74,068,797 1,906,996,652 1,970,156,891 0.287 96.8% 63,160,239 2009 776,876,510 645,672,462 526,966,182 56,333,800 2,005,848,954 2,069,450,607 0.288 96.9% 63,601,653 2010 797,902,456 659,381,375 495,273,730 57,459,000 2,010,016,561 2,076,961,686 0.286 96.8% 66,945,125 2011 780,357,859 670,841,459 536,894,082 46,722,282 2,034,815,682 2,103,120,249 0.288 96.8% 68,304,567 2012 781,685,815 685,984,380 524,400,400 48,227,212 2,040,297,807 2,108,802,723 0.287 96.8% 68,504,916 2013 787,762,105 731,842,861 564,154,697 60,279,730 2,144,039,393 2,214,978,356 0.288 96.8% 70,938,963 2014 826,805,152 743,249,074 585,142,381 41,487,586 2,196,684,193 2,270,597,754 0.292 96.7% 73,913,561 2015 851,731,625 751,761,832 582,368,709 73,944,847 2,259,807,013 2,333,746,718 0.291 96.8% 73,939,705 Source: McCracken County Property Valuation AdministratorNotes: Property in McCracken county is reassessed once every four years on average.-127-TABLE 5CITY OF PADUCAH, KENTUCKYASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTYLAST TEN FISCAL YEARSEstimatedValuePercentAssessedToAssessed ValueReal Estate
TotalFiscal RealDirect RealRealRealRealYear Estate Personal Rate Estate Personal Estate Personal Estate Personal Estate Personal2006 0.300 0.390 0.325 0.433 0.433 0.631 0.619 0.020 0.020 0.197 0.236 2007 0.275 0.390 0.307 0.433 0.433 0.628 0.631 0.019 0.019 0.197 0.236 2008 0.250 0.390 0.287 0.488 0.488 0.672 0.635 0.018 0.018 0.189 0.219 2009 0.250 0.390 0.288 0.489 0.491 0.672 0.678 0.018 0.018 0.096 0.106 2010 0.250 0.390 0.286 0.504 0.504 0.678 0.678 0.018 0.018 0.095 0.095 2011 0.250 0.390 0.288 0.504 0.504 0.711 0.711 0.018 0.018 0.095 0.098 2012 0.250 0.390 0.287 0.504 0.504 0.747 0.747 0.018 0.018 0.098 0.119 2013 0.250 0.390 0.288 0.504 0.504 0.747 0.747 0.017 0.017 0.096 0.102 2014 0.255 0.390 0.292 0.504 0.504 0.767 0.767 0.017 0.017 0.095 0.101 2015 0.255 0.390 0.291 0.495 0.495 0.771 0.771 0.017 0.017 0.094 0.095 Source: McCracken County Property Valuation Administrator and City Tax Levy Ordinance.TABLE 6CITY OF PADUCAH, KENTUCKYPROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS(PER $100 OF ASSESSED VALUE)LAST TEN FISCAL YEARSGeneral FundCity Direct RatesMcCracken Co.City of Paducah-128-McCracken PaducahSchool DistrictsSchool DistrictsJunior CollegeCounty
(1)(2)
(1)(2)
Assessed Assessed
Taxpayer Valuation Valuation
Kentucky Oaks Mall 50,900,262$ 2.25%50,900,262$ 3.13%
Paducah Medical Investors 13,440,090 0.59%13,440,090 0.83%
Ducmall LLC 13,119,800 0.58%14,225,000 0.87%
Woodstone Enterprises LP 12,429,000 0.55%
Wal Mart Real Estate Business 10,646,400 0.47%
Paducah Hospitality Partners 9,600,000 0.42%
Sams Real Estate Business Trust 9,222,955 0.41%
Computer Services Inc 9,083,185 0.40%15,086,571 0.93%
Wal Mart Store 9,000,000 0.40%33,968,895 2.09%
USF Propco I LLC 8,156,900 0.36%
Lowe's 13,949,835 0.86%
Sams East Inc 16,601,600 1.02%
Lourdes Medical Pavilion 18,686,197 1.15%
TOTALS 145,598,592$ 6.43%176,858,450$ 10.88%
(1) Source - Property Valuation Administration; Assessed value as of January 1, 2014.
(2) Source - Property Valuation Administration; Assessed value as of January 1, 2005.
TABLE 7
CITY OF PADUCAH, KENTUCKY
PRINCIPAL TAXPAYERS - PROPERTY TAX
CURRENT YEAR AND NINE YEARS PRIOR
2015 2006
-129-
Percentage of Percentage of
Total Assessed Total Assessed
Valuation Valuation
Total Collections to Date
(1)
(1) Percent of Percent of
Amount of Levy Total Levy
Collections Collected Collections Collected
4,010,479 3,911,868 97.5% 93,299 4,005,167 99.9%
3,996,553 3,855,679 96.5% 134,196 3,989,875 99.8%
3,970,703 3,814,940 96.1% 149,277 3,964,217 99.8%
4,196,118 4,017,032 95.7% 167,362 4,184,394 99.7%
4,252,983 4,131,454 97.1% 106,844 4,238,298 99.7%
4,191,916 4,110,973 98.1% 64,965 4,175,938 99.6%
4,220,978 4,119,689 97.6% 82,853 4,202,542 99.6%
4,434,382 4,334,698 97.8% 76,105 4,410,803 99.5%
4,601,741 4,509,874 98.0% 57,103 4,566,977 99.2%
4,727,764 4,644,522 98.2%- 4,644,522 98.2%
(1) Includes current year real and personal property tax.
* Source - City of Paducah Finance Department.
2010
TABLE 8
CITY OF PADUCAH, KENTUCKY
SECURED TAX LEVIES AND COLLECTIONS*
LAST TEN FISCAL YEARS
June 30,
Ended
Year
Fiscal Year
Collections
in Subsequent
Years
2011
-130-
2006
Collected within the
Fiscal Year of the Levy
Taxes Levied
Fiscal
for the
2007
2008
2014
2015
2012
2013
2009
(1)Direct
Fiscal Taxes Tax
Year Collected Rate
2006 14,947,835 2.00%
2007 16,258,946 2.00%
2008 16,535,542 2.00%
2009 16,584,618 2.00%
2010 16,384,509 2.00%
2011 17,345,034 2.00%
2012 18,095,182 2.00%
2013 18,336,124 2.00%
2014 18,114,396 2.00%
2015 19,092,911 2.00%
171,695,097
(1) Source - City of Paducah Finance Department - Actual collections during the fiscal year.
-131-
TABLE 9
CITY OF PADUCAH, KENTUCKY
EMPLOYEE LICENSE TAX COLLECTIONS
LAST TEN FISCAL YEARS
(1)Percentage of
Number of Percentage Taxes Total Employee
Filers of Total Collected License Tax
$0 - $50,000 2,374 97.53% 8,884,639 46.53%
$50,001 - $100,000 29 1.19% 2,023,158 10.60%
$100,001 - $500,000 29 1.19% 5,247,570 27.48%
Greater than $500,000 2 0.08% 2,937,544 15.39%
TOTALS 2,434 100.00% 19,092,911$ 100.00%
(1)Percentage of
Number of Percentage Taxes Total Employee
Filers of Total Collected License Tax
$0 - $50,000 1,603 97.80% 7,462,359 54.97%
$50,001 - $100,000 19 1.16% 1,326,451 9.77%
$100,001 - $500,000 15 0.92% 2,907,406 21.42%
Greater than $500,000 2 0.12% 1,879,464 13.84%
TOTALS 1,639 100.00% 13,575,680$ 100.00%
(1) Source - City of Paducah Finance Department - Actual collections during the fiscal year.
2015
2006
TABLE 10
CITY OF PADUCAH, KENTUCKY
PRINCIPAL EMPLOYEE LICENSE TAXPAYERS
CURRENT YEAR AND NINE YEARS PRIOR
-132-
Taxpayers
By Range
Taxpayers
By Range
(1)Ratio of (3)Reported Net Net Net Debt as (2)General Refunding Total Debt to Percentage NetFiscal Obligation Capital Revenue Primary Actual of Personal Debt PerYear Bonds Lease Bonds GovernmentValue Income Capita2006 18,910,000 3,319,227 - - - 22,229,227 1.27 4.59% 844 2007 18,310,000 3,320,522 - - - 21,630,522 1.17 4.46% 821 2008 17,680,000 2,946,303 - - - 20,626,303 1.05 4.26% 784 2009 19,799,638 5,187,262 - - - 24,986,900 1.21 5.16% 950 2010 25,661,440 5,808,267 - - - 31,469,707 1.52 6.50% 1,196 2011 24,879,948 4,910,742 - - - 29,790,690 1.42 5.92% 1,190 2012 23,651,493 7,320,328 - - - 30,971,821 1.47 6.16% 1,238 2013 22,361,906 6,920,838 - - - 29,282,744 1.32 5.82% 1,170 2014 24,706,291 6,519,356 - - - 31,225,647 1.38 6.21% 1,248 2015 23,320,347 6,101,064 - - - 29,421,411 1.26 5.85% 1,176 Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements.(1) See Table 5 for estimated actual property value. This ratio is calculated using estimated property value for the prior year.(2) See Table 16 for population data.(3) See Table 16 for personal income data-133-ImprovementDebtNetPublicDebtImprovementTABLE 11CITY OF PADUCAH, KENTUCKYRATIO OF OUTSTANDING DEBT BY TYPELAST TEN FISCAL YEARSPublic
(1)Ratio ofInfinitiPublicNetConvention & Media Floodwall ImprovementPublic PoolEconomicBonds toFiscal Art CenterBuildingRehabilitation ProjectRenovation DevelopmentActualYear Bonds Bonds Bonds Bonds Bonds Bonds Total Value2006 8,130,000 6,100,000 4,680,000 - - - - 18,910,000 1.08 718 2007 7,870,000 5,925,000 4,515,000 - - - - 18,310,000 0.99 695 2008 7,600,000 5,740,000 4,340,000 - - - - 17,680,000 0.90 672 2009 7,320,000 5,545,000 4,160,000 2,774,638 - - - 19,799,638 0.96 753 2010 7,030,000 5,340,000 3,975,000 2,671,440 6,645,000 - - 25,661,440 1.24 975 2011 7,040,000 5,125,000 3,780,000 2,564,948 6,370,000 - - 24,879,948 1.18 994 2012 6,630,000 4,895,000 3,630,000 2,455,210 6,100,000 - - (58,717) 23,651,493 1.12 945 2013 6,220,000 4,655,000 3,370,000 2,341,790 5,825,000 - - (49,884) 22,361,906 1.01 894 2014 5,805,000 4,400,000 3,100,000 2,224,863 5,460,000 1,120,000 2,475,000 121,428 24,706,291 1.09 987 2015 5,385,000 4,435,000 2,820,000 2,104,212 5,100,000 1,055,000 2,330,000 91,135 23,320,347 1.00 932 Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements(1) See Table 5 for estimated actual property value. This ratio is calculated using estimated property value for the prior yea(2) See Table 16 for population data.Police andFire PensionFundBonds-134-CapitaAmortizationof Discountsand Premiums(2)NetBonds PerTABLE 12CITY OF PADUCAH, KENTUCKYRATIO OF NET GENERAL BONDED DEBT OUTSTANDINGLAST TEN FISCAL YEARS
Estimated
(1) Share of
Reported Percentage Direct and
Debt Applicable Overlapping
Outstanding to the City Debt
City of Paducah 29,421,411$ 100.00% 29,421,411$
Paducah Independent School District 47,964,923 * 100.00% 47,964,923
McCracken County 21,305,773 * 45.90% 9,779,350
McCracken County Board of Education 67,675,981 * 31.70% 21,453,286
Overlapping debt 136,946,677 79,197,559
TOTAL DIRECT AND OVERLAPPING DEBT 166,368,088$108,618,970$
(1) Applicable percentage is determined by ratio of assessed valuation of property subject to taxation
in overlapping unit to valuation of property subject to taxation in reporting unit.
* Information from finance office at each location.
-135-
TABLE 13
CITY OF PADUCAH, KENTUCKY
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
AS OF JUNE 30, 2015
Net assessed value2,259,807,013$ Add exemption73,939,705 Total assessed value2,333,746,718$ Debt limit - 10% of total assessed (1)233,374,672$ Debt outstanding:General obligation bonds outstanding23,320,347$ Note payable6,101,064 Less debt not subject to limit- Gross bonded debt29,421,411 Less amount available in debt servicefunds652,319 Net bonded indebtedness subject tolimit28,769,092 LEGAL DEBT MARGIN204,605,580$ 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006Debt limit 233,374,672$ 227,059,775$ 221,497,836$ 212,207,634$ 210,312,025$ 207,696,169$ 206,945,061$ 197,015,689$ 182,759,543$ 175,093,068$ Total net debt applicable to limit 28,769,092 30,721,830 28,966,286 30,936,733 29,716,418 31,377,263 24,893,656 20,561,255 21,598,686 22,196,863 LEGAL DEBTMARGIN204,605,580$ 196,337,945$ 192,531,550$ 181,270,901$ 180,595,607$ 176,318,906$ 182,051,405$ 176,454,434$ 161,160,857$ 152,896,205$ Total net debtapplicable to thelimited as a percentage ofdebt limit 12.33% 13.53% 13.08% 14.58% 14.13% 15.11% 12.03% 10.44% 11.82% 12.68%(1) "Cities shall not be authorized or permitted to incur indebtedness to an amount, including existing indebtedness, in the aggregate exceeding the following names maximum percentages on the valu of the taxable property therein, to be estimated by the assessment previous to the incurring of the indebtedness: Cities of the first and second classes, and of the third class having a population exceeding fifteen hundred, ten per centum."-136-Fiscal YearTABLE 14CITY OF PADUCAH, KENTUCKYLEGAL DEBT MARGIN INFORMATIONLAST TEN FISCAL YEARS
(1)(1)
Personal
Income
26,307 484,496,019 18,417 39.9 2,834 5.7%
26,307 484,496,019 18,417 39.9 2,804 5.6%
26,307 484,469,019 18,417 39.9 2,832 6.1%
26,307 484,469,019 18,417 39.9 2,774 9.3%
26,307 484,469,019 18,417 39.9 2,659 8.5%
25,024 503,179,300 20,430 41.4 2,789 8.7%
25,024 503,179,300 20,430 41.4 2,682 8.0%
25,024 503,179,300 20,430 41.4 2,744 8.4%
25,024 503,179,300 20,430 41.4 3,138 8.2%
25,024 503,179,300 20,430 41.4 2,843 5.6%
Sources:
(1) Bureau of the Census Count - 2000, 2010
(2) Board of Education; represents elementary and secondary public schools.
(3) Kentucky Cabinet for Human Resources, Department for Employment Services.
Income
2005-2006
2006-2007
2007-2008
2008-2009
2009-2010
2010-2011
2011-2012
Fiscal Year Population
2012-2013
2013-2014
2014-2015
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TABLE 15
CITY OF PADUCAH, KENTUCKY
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN FISCAL YEARS
(1) (1) (2)(3)
Per Capita Median School Unemployment
Enrollment RateAge
Percentage ofPercentage ofTotalTotalEmployees (1) Employment (2) Employees (1) Employment (2)Western Baptist Hospital 1,713 6.32% 1,660 5.55%Lourdes Hospital 1,645 6.07% 1,500 5.01%Wal Mart 999 3.69% 570 2.01%Paducah Public Schools 598 2.21% 600 1.91%West Kentucky Community and Technical College 518 1.91% 270 0.90%City of Paducah 471 1.74% 353 1.27%State of Kentucky 347 1.28% 390 1.30%Parkview Convalescent Center2841.05%LYNX Services4211.55%3901.30%Paxton Media Group2230.82%2850.95%Computer Services, Inc.2550.94%2800.94%TOTALS7,47427.59%6,29821.14%(1) Source - City of Paducah Finance Department(2) State of Kentucky - Office of Employment and Training. Ratio based on employment within County of McCracken.-138-EmployerTABLE 16CITY OF PADUCAH, KENTUCKYPRINCIPAL EMPLOYERSCURRENT YEAR AND NINE YEARS PRIOR20062015
2015 2014 2013 2012 2011 2010 2009 2008 2007 2006Governmental ActivitiesGeneral governmentGeneral administration 11 11 12 12 12 12 12 12 12 12Finance 11 11 11 11 14 14 17 14 14 14Inspection 0 0 0 11 11 10 13 13 13 12Information systems5566664443Risk/Human resources3333111444Public safetyPolice 87 87 88 90 90 90 93 93 93 93Fire 76 76 74 64.5 64 65 69 69 71 76Public serviceStreets 21 20 20 23 23 23 29 29 30 31Facilities 12.5 13.5 13.5 11.5 14 34 36 35 34 35Engineering 6.6 6.6 7.6 7.6758999Other5555646664Parks and recreation252424242477777Planning and development109999910111111OtherPaducah Riverfront Dev. Authority1111000000Renaissance0334535000Fleet maintenance 6.5 6.5 6.5 6.5 6.586777Business-type ActivitiesSolid waste25.4 25.4 25.4 25.4 26 27 27 27 27 29TOTAL PRIMARY GOVERNMENT306307309314.5318318343340342347* Employee budget census.-139-Fiscal YearTABLE 17CITY OF PADUCAH, KENTUCKYCITY FULL-TIME EMPLOYEES BY FUNCTION*Last Ten Fiscal Years
2015 2014 2013 2012 2011 2010 2009 2008 2007 2006General governmentBuilding and electrical permits issued1,175 1,251 1,202 1,232 1,239 1,263 1,179 1,203 1,411 1,362 Business licenses issued 3,729 3,717 3,966 3,956 3,254 3,397 3,691 3,507 3,500 3,700 Public safetyPoliceAdult arrests 2,293 2,546 2,508 2,753 3,564 3,859 4,454 4,170 5,012 3,827 Murder2 3 - 3 3 1 5 - - - Rape10 17 16 14 22 12 20 15 18 15 Robberies41 36 38 14 31 56 41 49 42 35 Burglary138 127 142 123 155 245 169 203 208 211 Auto theft49 60 41 47 54 62 57 60 117 104 Larceny1,138 1,090 1,110 1,005 1,013 1,092 1,106 ** *Arson2 3 5 7 6 7 7 8 16 7 Traffic accidents1,722 1,664 1,573 1,666 1,762 1,774 1,368 1,519 1,949 1,815 Traffic violations 5,501 6,821 10,168 8,573 7,701 7,240 9,143 7,109 7,323 7,468 FireEmergency responses2,956 2,935 3,054 3,164 3,181 2,603 3,305 2,603 2,456 2,546 Fires extinguished 118 115 105 138 122 133 136 102 163 181 Structure fires 42 35 33 53 37 49 57 49 40 53 Incidents with reportedlosses73 56 55 89 73 89 85 70 80 91 Medical/rescue2,150 2,080 2,151 2,270 2,133 1,690 1,616 1,506 1,369 1,589 Tours/in-services/carseats400 378 570 524 671 676 907 699 485 485 Training man hours 10,860 8,959 9,155 7,232 7,033 8,493 7,716 4,344 1,183 1,418 Inspections1,324 1,710 1,157 1,417 1,063 985 1,183 1,449 * *Refuse collectionResidentialRefuse collected (tons 34 36 36 34 34 38 32 25 28 34 per day)Customers served9,639 9,600 9,478 9,488 9,568 9,445 9,435 9,446 9,388 9,368 CommercialRefuse collected (tons64 61 65 71 71 70 75 83 85 84 per day)Customers served861 927 805 803 806 810 810 821 832 801 Public service911 dispatches83,465 83,614 92,786 79,333 82,268 79,768 81,525 83,871 76,815 83,348Police44,337 43,877 51,131 43,686 44,794 42,496 40,921 43,420 41,887 47,091Fire3,152 3,517 4,747 3,189 3,226 2,702 2,490 2,720 2,399 2,907 Other35,976 36,220 36,908 32,458 34,248 34,570 38,114 37,731 32,529 33,350* Information not available.** Information from city departments.-140-Fiscal YearTABLE 18CITY OF PADUCAH, KENTUCKYOPERATING INDICATORS BY FUNCTION**Last Ten Fiscal Years
2015 2014 2013 2012 2011 2010 2009 2008 2007 2006Public safetyPoliceStations1111111111FireStations5555555555Refuse collectionCollection trucksResidential 10 10 10 109971098Commercial4444454554Other public worksStreets (miles paved) 218 218 218 218 218 218 216 216 216 214Sidewalks (miles) 47 47 47 47 47 47 45 45 45 45Traffic signals 13 13 13 13 13 13 12 11 11 11Parks and recreationParks 28 28 27 27 27 27 27 27 27 18Acreage 960 960 960 1125 1125 1125 960 960 960 325Community centers2222211111Swimming pools1111111111Public tennis courts6666666666Public golf courses2222222222* Information from city departments.-141-Fiscal YearTABLE 19CITY OF PADUCAH, KENTUCKYCAPITAL ASSET STATISTICS BY FUNCTION*Last Ten Fiscal Years
CITY OF PADUCAH, KENTUCKY
SINGLE AUDIT SECTION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2015
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 1,818,042$
Pass-through Kentucky Governors
Office for Local Development:
Community Development Block Grants 14.228 14-013 250,000
Passed-through Kentucky Housing Corporation:
Home Investment Partnerships Program 14.239 HB12-198-01 (61,500)
Total Department of Housing and Urban
Development 2,006,542
Department of the Interior:
Passed-through Kentucky Heritage
Council:
Historic Preservation Fund Grants in Aid 15.904 PON2 410 1400003698 2 6,300
Total Department of the Interior 6,300
Department of Justice:
Direct Programs:
Edward Byrne Memorial Justice
Assistance Grant Program 16.738 N/A 13,117
Total Department of Justice 13,117
Department of Homeland Security:
Direct Programs:
Port Security Program 97.056 EMW-2013-PU-00267-S01 19,937
Passed-through Kentucky Division of
Emergency Management:
Hazardous Mitigation Grant Program 97.039 PON2 095 1200003957 1 64,372
Total Department of Homeland Security 84,309
Department of Transportation:
Passed-through Kentucky Transportation Cabinet
State and Community Highway Safety 20.600 PT-15-36 30,403
State and Community Highway Safety 20.600 PT-14-36 15,140
National Highway Traffic Safety Administration
(NHTSA) Discretionary Safety Grants 20.614 DD-15-01 8,801
Highway Planning and Construction 20.205 DD-15-05 85
Highway Planning and Construction 20.205 DD-14-40 20,162
Highway Planning and Construction 20.205 P02-628-1300006043 286,052
Total Department of Transportation 360,643
TOTAL EXPENDITURES OF FEDERAL AWARDS 2,470,911$
See accompanying notes to schedule of expenditures of federal awards.
Expenditures
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CITY OF PADUCAH, KENTUCKY
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2015
Federal Grantor/Pass-Through Grantor/
CITY OF PADUCAH, KENTUCKY
NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2015
Note 1 - Basis of Presentation:
The accompanying schedule of expenditures of federal awards includes the federal grant activity of
the City of Paducah and is presented on the accrual basis of accounting. The information in this
schedule is presented in accordance with the requirements of OMB Circular A-133, Audits of States,
Local Governments, and Non-Profit Organizations. Therefore, some amounts presented in this
schedule may differ from amounts presented in, or used in the preparation of, the financial statements.
Note 2 - Subrecipients:
The City of Paducah provided federal awards to subrecipients as follows:
Federal
CFDA Amount
Program Title Number Provided
Four Rivers Recovery Center 14.228 $250,000
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INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL
STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Honorable Gayle Kaler, Mayor
Members of the Board of Commissioners
City of Paducah
Paducah, Kentucky
We have audited, in accordance with the auditing standards generally accepted in the United States of America
and the standards applicable to financial audits contained in Government Auditing Standards issued by the
Comptroller General of the United States, the financial statements of the governmental activities, the business-
type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining
fund information of the City of Paducah, Kentucky, as of and for the year ended June 30, 2015, and the related
notes to the financial statements, which collectively comprise City of Paducah, Kentucky’s basic financial
statements, and have issued our report thereon dated December 17, 2015.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered City of Paducah, Kentucky’s
internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in
the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose
of expressing an opinion on the effectiveness of City of Paducah, Kentucky’s internal control. Accordingly, we do
not express an opinion on the effectiveness of City of Paducah, Kentucky’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or
employees, in the normal course of performing their assigned functions, to prevent, or detect and correct,
misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal
control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements
will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a
combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough
to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section
and was not designed to identify all deficiencies in internal control that might be material weaknesses or,
significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal
control that we consider to be material weaknesses. However, material weaknesses may exist that have not been
identified.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether City of Paducah, Kentucky’s financial statements are free
from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements, noncompliance with which could have a direct and material effect on the
determination of financial statement amounts. However, providing an opinion on compliance with those
provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of
our tests disclosed no instances of noncompliance or other matters that are required to be reported under
Government Auditing Standards.
100 South 4th Street Suite 300 Paducah, KY 42001
Phone: (270)443-4400 Fax: (270)443-0963 kempercpa.com
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the
results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on
compliance. This report is an integral part of an audit performed in accordance with Government Auditing
Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not
suitable for any other purpose.
Certified Public Accountants and Consultants
Paducah, Kentucky
December 17, 2015
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INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM
AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY OMB CIRCULAR A-133
Honorable Gayle Kaler, Mayor
Members of the Board of Commissioners
City of Paducah
Paducah, Kentucky
Report on Compliance for Each Major Federal Program
We have audited City of Paducah, Kentucky’s compliance with the types of compliance requirements described in
the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on each of City of
Paducah, Kentucky’s major federal programs for the year ended June 30, 2015. City of Paducah, Kentucky’s major
federal programs are identified in the summary of auditor’s results section of the accompanying schedule of
findings and questioned costs.
Management’s Responsibility
Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants
applicable to its federal programs.
Auditor’s Responsibility
Our responsibility is to express an opinion on compliance for each of City of Paducah, Kentucky’s major federal
programs based on our audit of the types of compliance requirements referred to above. We conducted our audit
of compliance in accordance with auditing standards generally accepted in the United States of America; the
standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller
General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit
Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain
reasonable assurance about whether noncompliance with the types of compliance requirements referred to above
that could have a direct and material effect on a major federal program occurred. An audit includes examining, on
a test basis, evidence about City of Paducah, Kentucky’s compliance with those requirements and performing such
other procedures as we considered necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal
program. However, our audit does not provide a legal determination of City of Paducah, Kentucky’s compliance.
Opinion on Each Major Federal Program
In our opinion, City of Paducah, Kentucky, complied, in all material respects, with the types of compliance
requirements referred to above that could have a direct and material effect on each of its major federal programs
for the year ended June 30, 2015.
Report on Internal Control Over Compliance
Management of City of Paducah, Kentucky, is responsible for establishing and maintaining effective internal
control over compliance with the types of compliance requirements referred to above. In planning and performing
our audit of compliance, we considered City of Paducah, Kentucky’s internal control over compliance with the
types of requirements that could have a direct and material effect on each major federal program to determine the
auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on
compliance for each major federal program and to test and report on internal control over compliance in
accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of
internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of City of
Paducah, Kentucky’s internal control over compliance.
100 South 4th Street Suite 300 Paducah, KY 42001
Phone: (270)443-4400 Fax: (270)443-0963 kempercpa.com
A deficiency in internal control over compliance exists when the design or operation of a control over compliance
does not allow management or employees, in the normal course of performing their assigned functions, to prevent,
or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely
basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in
internal control over compliance, such that there is a reasonable possibility that material noncompliance with a
type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely
basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of
deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that
is less severe than a material weakness in internal control over compliance, yet important enough to merit
attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in the first paragraph
of this section and was not designed to identify all deficiencies in internal control over compliance that might be
material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over
compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not
been identified.
The purpose of this report on internal control over compliance is solely to describe the scope of our testing of
internal control over compliance and the results of that testing based on the requirements of OMB Circular A-133.
Accordingly, this report is not suitable for any other purpose.
Certified Public Accountants and Consultants
Paducah, Kentucky
December 17, 2015
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CITY OF PADUCAH, KENTUCKY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2015
Section I – Summary of Auditor’s Results
1. The independent auditor’s report expresses an unmodified opinion on the financial statements of
the City of Paducah, Kentucky.
2. No significant deficiencies or material weaknesses relating to the audit of the financial statements
are reported.
3. No instances of noncompliance material to the financial statements of the City of Paducah,
Kentucky were disclosed during the audit.
4. No significant deficiencies or material weaknesses relating to the audit of major federal award
programs are reported.
5. The auditor’s report on compliance for the major federal award programs for the City of Paducah,
Kentucky expresses an unmodified opinion.
6. There are no findings to be reported in accordance with Section 510(a) of OMB Circular A-133.
7. The programs tested as major programs included:
Name CFDA
Section 8 Housing Choice Vouchers
14.871
8. The threshold used for distinguishing Types A and B programs was $300,000.
9. The City of Paducah, Kentucky did qualify to be audited as a low-risk auditee.
Section II – Findings – Financial Statements Audit
There are no findings related to the financial statements which are required to be reported in accordance
with Government Auditing Standards.
Section III – Findings and Questioned Costs – Major Federal Awards Programs
There are no findings or questioned costs related to the major federal programs which are required to be
reported in accordance with OMB Circular A-133, Section 510(a).
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CITY OF PADUCAH, KENTUCKY
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
YEAR ENDED JUNE 30, 2014
Section II – Findings – Financial Statements Audit
There were no findings related to the financial statements which are required to be reported in accordance
with Government Auditing Standards.
Section III – Findings and Questioned Costs – Major Federal Awards Programs
There were no findings or questioned costs related to the major federal programs which are required to be
reported in accordance with OMB Circular A-133, Section 510(a).
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