HomeMy WebLinkAboutJune-30-2016
CITY OF PADUCAH,
KENTUCKY
COMPREHENSIVE
ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2016
FINANCE DEPARTMENT
CITY OF PADUCAH,
KENTUCKY
City of Paducah
Paducah, Kentucky
Comprehensive Annual Financial Report
Year Ended June 30, 2016
Issued by the
Finance Department
CITY OF PADUCAH, KENTUCKY
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2016
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 51-93
Required Supplementary Information:
Schedule of Changes in the Police and Firefighters’
Pension Trust Fund’s Net Pension Liability and Related Ratios A-1 94
Schedule of Changes in the Appointive Employees’
Pension Trust Fund’s Net Pension Liability and Related Ratios A-2 95
Schedule of Police and Firefighters’ Pension Trust Fund
Contributions and Investment Returns A-3 96
Schedule of Changes in the Appointive Employees’
Pension Trust Fund Contributions and Investment Returns A-4 97
Schedule of City’s Proportionate Share of the Net Pension Liability
County Employees’ Retirement System A-5 98
Schedule of City’s Contributions
County Employees’ Retirement System A-6 99
Exhibit No. Page No.
Supplementary Information:
General Capital Improvements Detail Schedule of
Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual B-1 100
Debt Service Fund Detail Schedule of Revenues,
Expenditures, and Changes in Fund Balance - Budget
and Actual B-2 101
Nonmajor Governmental Funds:
Combining Balance Sheet B-3 102-103
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances B-4 104-105
Detail Statement of Revenues, Expenditures, and
Changes in Fund Balance - Budget and Actual:
Municipal Aid Fund B-5 106
Emergency Communication Service Fund B-6 107
Court Awards Fund B-7 108
CDBG Grant Fund B-8 109
Special Revenue Bond Fund B-9 110
Nonmajor Proprietary Funds:
Nonmajor Enterprise Funds:
Combining Statement of Net Position C-1 111
Combining Statement of Revenues, Expenses and
Changes in Fund Net Position C-2 112
Combining Statement of Cash Flows C-3 113
Internal Service Funds:
Combining Statement of Net Position D-1 114
Combining Statement of Revenues, Expenses, and
Changes in Fund Net Position D-2 115
Combining Statement of Cash Flows D-3 116
Fiduciary Funds:
Combining Statement of Net Position -
Private-purpose Trust Funds E-1 117
Combining Statement of Changes in Net Position -
Private-purpose Trust Funds E-2 118
Statement of Changes in Assets and
Liabilities - Agency Funds E-3 119
Table No. Page No.
Statistical Section:
Net Position by Component 1 120
Changes in Net Position 2 121-122
Fund Balances, Governmental Funds 3 123
Changes in Fund Balances, Governmental Funds 4 124
Assessed and Estimated Actual Value of
Taxable Property 5 125
Governments 6 126
Principal Taxpayers 7 127
Secured Tax Levies and Collections 8 128
Employee License Tax Collections 9 129
Principal Employee License Taxpayers 10 130
Ratio of Outstanding Debt by Type 11 131
Ratio of Net General Bonded Debt Outstanding 12 132
Table No. Page No.
Statistical Section:
Direct and Overlapping Governmental
Activities Debt 13 133
Legal Debt Margin Information 14 134
Demographic and Economic Statistics 15 135
Principal Employers 16 136
City Full-Time Employees by Function 17 137
Operating Indicators by Function 18 138
Capital Asset Statistics by Function 19 139
Single Audit Section:
Schedule of Expenditures of Federal Awards 140
Notes to the Schedule of Expenditures of Federal
Awards 141
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 142-143
Independent Auditor’s Report on Compliance for Each Major
Program and on Internal Control Over Compliance Required by
Uniform Guidance 144-145
Schedule of Findings and Questioned Costs 146
Schedule of Prior Audit Findings 147
CITY OF PADUCAH, KENTUCKY
INTRODUCTORY SECTION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2016
December 6, 2016
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,
2016. 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, 2016,
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
14th 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. A second annual show is scheduled
to begin in September 2017.
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, 2016. 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 FY2016, 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 FY2016
this contribution was $417 thousand. This amount was $391 thousand in FY2015.
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 FY2016 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. Its age has marginalized its electrical and mechanical
components well beyond their 50 year useful design life; therefore, it is in need of necessary repairs. In
FY2011, the U.S. Army Corps of Engineers (USACE) issued a Feasibility Report, which recommended a
comprehensive reconstruction, rehabilitation, and restoration project to improve the reliability and restore
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the system performance of the original floodwall construction. It is anticipated the USACE will cover
65% of the 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. This project will have multiple phases and priorities of which cannot be complete
within one project package. The City has targeted pump stations #2 and #9 to have active construction
during calendar years 2017 and 2018. Based on USACE revised authorization, it is estimated that the
City’s portion for the total overall project cost is approximately $10.9 million. The City has aligned itself
with USACE to receive future in-kind credit approximating $2.1 million it expended in FY2009 for
identified project components requiring reconstruction, i.e., slip lining 37 of its corrugated metal pipes.
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 340 foot transient boat 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 is currently under
construction and will be completed in early 2017. This phase will include the gangway platforms,
gangways, transient dock, wave attenuator, and the completion of the mass fill. This facility will allow
for the mooring of several transient and local recreational boating with full City services, including power,
water, and sewer pump out, with the capacity to supply gasoline and diesel for refueling vessels. 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. A decision has not yet
been made as to which route will be pursued. 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
decreased slightly in comparison to the prior year, with 26,866 persons employed (McCracken County) as
of June 30, 2016.
The June 2016 unemployment rate was 6.2% (McCracken County), which is a increase from 5.6% in the
prior year, and exceeds the June 2016 federal unemployment rate of 4.9%. 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 1,344 for fiscal year 2016 valued at $87 million, which is up approximately $37 million
from fiscal year 2015.
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INDEPENDENT AUDIT
Kentucky Revised Statute 91 A-040 requires an annual audit of each fund of the City by an auditor of
public accounts or a certified public accountant. The independent certified public accounting firm of
Kemper CPA Group, LLP, has conducted this audit and their opinion has been included in this report.
The City is also subject to the Single Audit Act Amendments of 1996 reporting requirements. The Single
Audit Report is included within this report.
CERTIFICATE OF ACHIEVEMENT
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a
Certificate of Achievement for Excellence in Financial Reporting to the City of Paducah, Kentucky for its
comprehensive annual financial report for the fiscal year ended June 30, 2015. This was the twenty-fifth
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, 2015
Executive Director/CEO
CITY OF PADUCAH, KENTUCKY
FINANCIAL SECTION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2016
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
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, 2016, 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 is presented as a discretely presented
component unit in the statement of net position and statement of activities. 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 discretely presented component units, each
major fund, and the aggregate remaining fund information of the City of Paducah, Kentucky, as of June 30, 2016, 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 94-99 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
100-119; and statistical section on pages 120-139, 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 140-141 is
presented for purposes of additional analysis as required by Title 2 U.S. Code of Federal Regulations Part 200,
Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, 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 6, 2016, 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 6, 2016
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CITY OF PADUCAH, KENTUCKY
REQUIRED SUPPLEMENTARY INFORMATION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2016
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CITY OF PADUCAH, KENTUCKY
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2016
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, 2016. 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 29-93) 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 $29 million at the close of the 2015-2016 fiscal year.
Total net position increased $5,270,431.
At fiscal year end, City governmental funds reported a combined ending fund balance of $23.4
million. Approximately 14% of this total amount, $3.2 million, is restricted or committed for
highways/streets and capital improvements. Assigned fund balance comprises 27% 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 $13.2 million and is
available for spending at the City’s discretion. Cash makes up approximately $7.5 million. When
compared to final total appropriations, the General Fund cash balance is 23%.
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 nine (9) 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 five (5) funds are combined into a single, aggregated presentation. Individual fund data for
each of these non-major governmental funds is provided in the form of combining and individual
fund statements elsewhere in this report on pages 102-110.
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 111-113 of this report. Individual data for the
internal service funds is likewise presented in the form of combining statements on pages 114-
116 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 117-119 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 51-93 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 102-119 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 $29 million as of June 30, 2016.
For FY2016, the largest portion of the City’s net position ($48.1 million) reflects its investment in
capital assets (i.e., land, buildings, machinery, equipment and infrastructure) less outstanding related
debt used to acquire those assets. The City uses these capital assets to provide service to citizens
and, as a result, these assets are not available for future spending. The City’s capital assets
investment is reported net of related debt, but the resources to pay this debt must be provided from
other sources since the capital assets cannot be used to liquidate the liabilities. An additional portion
of City net position ($1.3 million) represents resources that are subject to external restrictions on
how they may be used.
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In FY2015 the City 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
$43.1 million as of June 30, 2016. Disclosing 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 $20.1 million in FY2016.
As of June 30, 2016, 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
2016 2015* 2016 2015* 2016 2015*
Current Assets $ 40,457,159 $ 37,866,007 $ 7,328,926 $ 7,177,768 $ 47,786,085 $ 45,043,775
Capital Assets 55,617,018 49,322,057 1,678,728 1,133,226 57,295,746 50,455,283
Other noncurrent assets 3,573,410 3,954,388 - - 3,573,410 3,954,388
Total Assets 99,647,587 91,142,452 9,007,654 8,310,994 108,655,241 99,453,446
Deferred Outflows of
Resources 9,697,728 4,615,407 440,338 198,406 10,138,066 4,813,813
Current Liabilities 10,283,408 11,698,595 390,146 403,880 10,673,554 12,102,475
Noncurrent liabilities 67,008,754 61,082,324 4,014,302 3,642,371 71,023,056 64,724,695
Total liabilities 77,292,162 72,780,919 4,404,448 4,046,251 81,696,610 76,827,170
Deferred Inflows of Resources 7,690,538 3,264,613 132,341 172,089 7,822,879 3,436,702
Net position:
Net Invested in Capital Assets 46,389,685 39,349,789 1,678,728 1,133,226 48,068,413 40,483,015
Restricted 1,296,007 2,572,075 38,247 124,012 1,334,254 2,696,087
Unrestricted (23,323,077) (22,209,537) 3,194,228 3,033,822 (20,128,849) (19,175,715)
TOTAL NET POSITION $ 24,362,615 $ 19,712,327 $ 4,911,203 $ 4,291,060 $ 29,273,818 $ 24,003,387
*Beginning net position as of July 1, 2014, was restated for implementation of GASB 68.
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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 $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.
The City’s net position decreased significantly in FY2015 due to the 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. The
upswing in the current year is continuation of grant-fund capital development that began in FY2013.
A. Analysis of the City’s Operations
The following table provides a summary of the City’s operations for the years ended June 30, 2016
and 2015. Governmental activities increased the City’s net position by $4,650,288. Business-type
activities increased the City’s net position by $620,143.
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City of Paducah, Kentucky
Changes in Net Position
June 30
Governmental Activities Business-Type Activities Total Primary Government
Revenues: 2016 2015* 2016 2015* 2016 2015*
Program revenues:
Charges for services $ 2,564,345 $ 2,222,494 $ 4,560,232 $ 4,497,350 $ 7,124,577 $ 6,719,844
Operating grants/contributions 6,179,709 3,360,731
1,845,549
1,744,364 8,025,258 5,105,095
Capital grants/contributions 4,139,036 899,522 - - 4,139,036 899,522
General Revenues:
Property taxes 4,943,962 4,726,244 - - 4,943,962 4,726,244
Franchise taxes 162,593 207,742 - - 162,593 207,742
Telecommunications tax 656,214 689,843 - - 656,214 689,843
Insurance premium tax 4,170,381 3,786,514 - - 4,170,381 3,786,514
Vehicle tax 673,786 800,603 - - 673,786 800,603
Bank tax 242,344 229,722 - - 242,344 229,722
Gross receipts license tax 4,711,708 4,397,888 - - 4,711,708 4,397,888
Employee license tax 20,130,249 19,092,912 - - 20,130,249 19,092,912
Other taxes 656,647 665,057 - - 656,647 665,057
Intergovernmental revenue 368,318 371,718 - - 368,318 371,718
Unrestricted investment
earnings 137,224 176,229 30,302 39,565 167,526 215,794
Gain on sale of capital assets - - - - - -
Miscellaneous 189,489 16,870 85,649 8,338 275,138 25,208
Total revenues 49,926,005 41,644,089 6,521,732 6,289,617 56,447,737 47,933,706
Expenses:
General Government 9,777,876 9,801,490 - - 9,777,876 9,801,490
Public safety 20,503,784 17,974,548 - - 20,503,784 17,974,548
Public service 10,266,856 7,600,982 - - 10,266,856 7,600,982
Park & recreation 3,052,360 2,811,533 - - 3,052,360 2,811,533
Planning & development 911,830 1,000,020 - - 911,830 1,000,020
Interest on long-term debt 900,593 850,827 - - 900,593 850,827
Solid Waste - - 3,815,476 3,843,081 3,815,476 3,843,081
Section Eight Housing - - 1,874,074 1,819,328 1,874,074 1,819,328
Civic Center - - 74,457 98,318 74,457 98,318
Total expenses 45,413,299 40,039,400 5,764,007 5,760,727 51,177,306 45,800,127
Increase (decrease) in Net
position before transfers 4,512,706 1,604,689 757,725 528,890 5,270,431 2,133,579
Transfers 137,582 194,014 (137,582) (194,014) - -
Change in net position 4,650,288 1,798,703 620,143 334,876 5,270,431 2,133,579
Net position, July 1, restated 19,712,327 17,913,624 4,291,060 3,956,184 24,003,387 21,869,808
NET POSITION, JUNE 30 $ 24,362,615 $ 19,712,327 $ 4,911,203 $ 4,291,060 $ 29,273,818 $ 24,003,387
*Beginning net position as of July 1, 2014 was restated for implementation of GASB 68.
- 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 2016.
In fiscal year 2016, the City derived approximately 84% of its revenue from taxes/licenses.
Occupational licenses, which include payroll withholding tax, business licenses, and insurance
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premium tax is the largest source of income to the City, totaling $29 million. This category of
revenue increased 6.4% from fiscal year 2015. All of the taxes within this category had increases in
excess of 5%. 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 10% of total revenue in FY2016.
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 2016, business-type activities as a whole had an increase in net position
of $620,143. 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
$623,735 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 $1,148,789 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
$2,018,581 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 27% 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 56% of total fund balance, $13.2 million is unassigned General Fund fund balance,
which is available for spending at the government’s discretion but only up to the amount represented
by cash. At year-end there was $7.5 million available as cash; the balance is tied up in other assets
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including accounts receivable and property taxes collectible. City fiscal policy (Ordinance 2015-6-
8254) requires that an amount not less than 10% of the General Fund’s budgeted expenditures
remain undesignated in the fund balance, or $3.4 million, which leaves $9.8 million as unreserved
for fiscal year 2016.
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 ($13.2 million) represents 39% of expenditures and transfers out ($33.5 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 $2.0 million, all of which is committed for capital
projects. The Investment Fund was authorized by the City Commission in fiscal year 2005-2006 as
a special revenue fund whose use is restricted to property tax reduction, economic development,
community redevelopment and capital and infrastructure projects. The Investment Fund captures all
manner of financial activities related to revenue from the ½ cent payroll tax increase, effective
October 1, 2005. The slight increase in fund balance of approximately $200 thousand was primarily
due to revenue being higher than anticipated.
Fund balance in the General Capital Improvements fund increased by approximately $309 thousand
from the prior year to $5.8 million. The increase is due to funds set aside to complete capital
projects in FY2017. 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.
Net position of the respective proprietary funds are:
Solid Waste $4,151,057
Section Eight Housing 38,813
Civic Center 201,445
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Combined total net asset change for the three funds was an increase of $617,260, broken down as
follows: Solid Waste ($636 thousand increase), Section Eight Housing ($87 thousand decrease), and
Civic Center ($68 thousand increase). 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 $1.1 million increase in
appropriations and can be briefly summarized as follows:
Appropriations
Department Increase Decrease
(In Thousands)
General Administration $ - $ 88
Finance - 2
Planning - -
Radio and Rental Property - 41
Human Rights - 8
Information Systems - 77
Human Resources/Risk Management - 89
Police - 481
Fire - 120
Public Works - 390
Engineering Services 44 -
Recreation - 226
PRDA - 1
Other 2,616 -
General Administration had a decrease in appropriations of $88 thousand. The majority of this
decrease was due to unutilized contingency funds. Human Resources/Risk Management decreased
by $89 thousand. This department was without a director for the entire fiscal 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.
Engineering Services had an increase in appropriations of $44 thousand. This was due to flood
control equipment repairs.
The primary components of the “Other” department category are operating transfers out, which are
typically made to the capital project fund. Following the adoption of the original FY2016 budget,
the Commission made the decision to appropriate General Fund funds in excess of the 10% reserve
requirement. A total of $2 million was appropriated and appears on the financial statements as
interfund transfers (to the Capital Projects fund).
Design of City Hall Renovations $761,400
Study Stormwater/Sewer System Replacement Needs 986,600
Consultant for 911 Communication Services Equipment Replacement 252,000
$2,000,000
An unanticipated interfund transfer was also made in the amount of $230 thousand to fund the
rehabilitation of the recently expanded Police operating headquarters, as well as a transfer to
increase the cash reserve in the debt service fund in the amount of $100,000.
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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,
2016, is $57 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 2016, project and equipment additions totaled over $12 million, with $9.3 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 2016, are shown in the following table:
Olivet Church Road Construction (Construction in Progress) $3,916,986
Riverfront Phase 1B (Construction in Progress) 3,736,954
Dome Relocation 1,285,671
Hotel Site Development 904,498
432 Broadway Demolition 704,537
City Hall Design 404,602
The City’s Construction in Progress balance at year end was in excess of $13 million. Two very
large projects that have composed Construction in Progress for multiple years are anticipated to be
placed into service in FY2017. At fiscal year end the Olivet Church Road project had total
expenditures of nearly $7.4 million, and the Riverfront Phase 1B project totaled $3.8 million.
In the upcoming years, several street, economic development, riverfront development, and drainage
projects will continue and are estimated to cost several million dollars. Capital improvement projects
including infrastructure, City-owned facility improvements, continued neighborhood revitalization,
and street and sidewalk rehabilitation are among the projects to be addressed.
City of Paducah, Kentucky
Capital Assets
(Net of Accumulated Depreciation)
June 30
Governmental Activities Business-Type Activities Total Primary Government
2016 2015 2016 2015 2016 2015
Land $ 10,393,332 $ 10,383,332 $ 62,152 $ 62,152 $ 10,455,484 $ 10,445,484
Land improvements 9,749,732 10,486,724 - - 9,749,732 10,486,724
Construction in
progress 13,293,457 4,025,248 - - 13,293,457 4,025,248
Buildings and
improvements 5,830,257 7,709,771 271,324 269,025 6,101,581 7,978,796
Infrastructure 10,876,077 12,062,994 - - 10,876,077 12,062,994
Equipment 1,675,520 1,488,273 360,648 397,284 2,036,168 1,885,557
Furnishings and
fixtures 12,542 14,353 - - 12,542 14,353
Vehicles 3,786,101 3,151,362 984,604 404,765 4,770,705 3,556,127
TOTALS $ 55,617,018 $ 49,322,057 $ 1,678,728 $ 1,133,226 $ 57,295,746 $50,455,283
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Additional information on City capital assets can be found in Note 3 in the notes to financial
statements on pages 67-70.
B. Long-Term Debt
At year-end, the City had $27,281,531 in outstanding bonds and notes payable, compared to
$29,421,411 at June 30, 2015 with maturities extending through 2032.
Governmental Activities
2016 2015
Kentucky League of Cities – 2003 $1,500,126 $1,669,821
Police/Firefighter Pension Fund Liability – 2006 - 285,000
Floodwall Rehabilitation – 2008 1,990,271 2,104,212
Convention Center Renovation – 2008 1,866,666 1,976,250
Refinanced Convention Center – 2010 4,955,000 5,385,000
Margaret Hank Agreement – 2011 94,851 116,078
Refinanced Rental Building – 2011 2,530,000 2,820,000
Murray State University Agreement – 2011 2,224,792 2,338,915
Public Pool Renovations – 2013 990,000 1,055,000
Economic Development – 2013 2,185,000 2,330,000
Refinanced Public Projects – 2014 4,805,000 5,100,000
Refinanced Police/Firefighter Pension Fund Liability - 2014 4,055,000 4,150,000
Net Premiums/Discounts 84,825 91,135
TOTALS $27,281,531 $29,421,411
During the year, the City had no new debt issues. Debt issues prior to July 1, 2015 are described
below:
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.
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
- 26 -
finance the construction of a rental building in the Paducah Industrial Park West. The previous
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.
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 $239,483,487. 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 2016, 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 1996, 2006, and
2016.
- 27 -
CERS Employer Contributions
Non-Hazardous Hazardous
FY Rate Amount % Chg Rate Amount % Chg
1996 8.94% $428,100 18.21% $923,059
2006 10.98% $780,337 82% 25.01% $1,680,348 82%
2016 17.06% $1,312,181 68% 32.95% $2,920,343 74%
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
2016 actuary study shows that the PFPF unfunded pension liability is approximately $4.2 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,
2016, indicates the minimum actuarially sound contribution for FY2016 will be $434,758.
VIII. Requests for Information
This financial report is designed to provide a general financial overview for those interested in the City
of Paducah government finances. Questions or requests for additional financial information may be
addressed to Jonathan Perkins, Finance Director, City of Paducah, 300 South 5th Street, Paducah, KY
42003.
CITY OF PADUCAH, KENTUCKY
BASIC FINANCIAL STATEMENTS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2016
Exhibit 1
Component
Unit
Paducah
Governmental Business-type Water Works
Current Assets: Activities Activities Total Authority
Cash and cash equivalents 22,631,278$ 6,252,069$ 28,883,347$ 963,676$
Receivables, net:
Notes 1,281,375 - 1,281,375 -
Accounts 8,282,988 556,969 8,839,957 669,769
Grants 2,822,150 - 2,822,150 -
Interest 9,909 - 9,909 -
Property tax 5,237,767 - 5,237,767 -
Accrued unbilled revenues - - - 1,170,165
Internal balances (519,888) 519,888 - -
Inventory 679,851 - 679,851 719,415
Other current assets 31,729 - 31,729 922,544
Total current assets 40,457,159 7,328,926 47,786,085 4,445,569
Noncurrent Assets:
Notes receivable 3,573,410 - 3,573,410 -
Capital assets:
Land and construction in progress 23,686,789 62,152 23,748,941 1,626,870
Depreciable capital assets 31,930,229 1,616,576 33,546,805 49,954,022
Other assets - - - 6,024,445
Total noncurrent assets 59,190,428 1,678,728 60,869,156 57,605,337
Total assets 99,647,587 9,007,654 108,655,241 62,050,906
Deferred Outflows of Resources:
Deferred pension related outflows 9,377,005 440,338 9,817,343 915,349
Deferred charges on refunding 320,723 - 320,723 -
Total deferred outflows of resources 9,697,728 440,338 10,138,066 915,349
See accompanying notes to the basic financial statements.
CITY OF PADUCAH, KENTUCKY
STATEMENT OF NET POSITION
JUNE 30, 2016
ASSETS
-29-
Primary Government
Component
Unit
Paducah
Governmental Business-type Water Works
Current Liabilities: Activities Activities Total Authority
Voucher and accounts payable 4,976,806 195,087 5,171,893 736,316
Accrued payables 1,298,819 63,024 1,361,843 749,390
Unearned revenue 339,431 25,500 364,931 -
Accrued compensated absences 1,336,751 106,535 1,443,286 236,631
Accrued interest 90,739 - 90,739 -
Notes payable due within one year 467,714 - 467,714 348,054
Bonds payable due within one year 1,773,148 - 1,773,148 -
Other current liabilities - - - 232,153
Total current liabilities 10,283,408 390,146 10,673,554 2,302,544
Noncurrent Liabilities:
Accrued compensated absences 746,510 67,384 813,894 -
Landfill post-closure costs - 2,062,500 2,062,500 -
Pensions obligation 41,221,575 1,884,418 43,105,993 4,863,028
Notes payable 5,218,721 - 5,218,721 5,255,533
Bonds payable 19,821,948 - 19,821,948 -
Total noncurrent liabilities 67,008,754 4,014,302 71,023,056 10,118,561
Total liabilities 77,292,162 4,404,448 81,696,610 12,421,105
Deferred Inflows of Resources
Unavailable revenues - property taxes 5,023,063 - 5,023,063 -
Deferred pension related inflows 2,667,475 132,341 2,799,816 98,592
Total deferred inflows of resources 7,690,538 132,341 7,822,879 98,592
Net invested in capital assets 46,389,685 1,678,728 48,068,413 45,977,305
Restricted for:
Housing and development projects - 38,247 38,247 -
Capital projects & infrastructure 1,148,789 - 1,148,789 -
Public safety 147,218 - 147,218 -
Unrestricted (deficit) (23,323,077) 3,194,228 (20,128,849) 4,469,253
TOTAL NET POSITION 24,362,615$ 4,911,203$ 29,273,818$ 50,446,558$
-30-
LIABILITIES
NET POSITION
Primary Government
Exhibit 2
FUNCTIONS/PROGRAMS Operating
Charges for Grants and
Primary Government: Expenses Services Contributions
Governmental activities:
General government 9,777,876 1,128,785 548,732$ 11,569$
Public safety 20,503,784 237,641 619,437 608,707
Public service 10,266,856 1,065,010 4,130,035 -
Parks and recreation 3,052,360 132,909 - -
Planning and development 911,830 - 737,500 3,518,760
Interest on long-term debt 900,593 - 144,005 -
Total governmental activities (See Note 1) 45,413,299 2,564,345 6,179,709 4,139,036
Business-type activities:
Solid Waste 3,815,476 4,520,084 60,070 -
Section Eight Housing 1,874,074 - 1,785,479 -
Civic Center 74,457 40,148 - -
Total business-type activities 5,764,007 4,560,232 1,845,549 -
TOTAL PRIMARY GOVERNMENT 51,177,306$ 7,124,577$ 8,025,258$ 4,139,036$
Component Unit:
Paducah Water Works Authority 9,743,527$ 10,862,483$ -$ 1,041,432$
TOTAL COMPONENT UNITS 9,743,527$ 10,862,483$ -$ 1,041,432$
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
Net position - ending
See accompanying notes to the basic financial statements.
FOR THE YEAR ENDED JUNE 30, 2016
STATEMENT OF ACTIVITIES
Program Revenues
Capital
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CITY OF PADUCAH, KENTUCKY
Grants and
Contributions
Component Unit
Governmental Business-type Paducah Water
Activities Activities Total Works Authority
(8,088,790)$ -$ (8,088,790)$ -$
(19,037,999) - (19,037,999) -
(5,071,811) - (5,071,811) -
(2,919,451) - (2,919,451) -
3,344,430 - 3,344,430 -
(756,588) - (756,588) -
(32,530,209) - (32,530,209) -
- 764,678 764,678 -
- (88,595) (88,595) -
- (34,309) (34,309) -
- 641,774 641,774 -
(32,530,209) 641,774 (31,888,435) -
- - - 2,160,388
- - - 2,160,388
4,943,962 - 4,943,962 -
162,593 - 162,593 -
656,214 - 656,214 -
4,170,381 - 4,170,381 -
673,786 - 673,786 -
242,344 - 242,344 -
4,711,708 - 4,711,708 -
20,130,249 - 20,130,249 -
656,647 - 656,647 -
368,318 - 368,318 -
137,224 30,302 167,526 14,225
189,489 85,649 275,138 2,945
37,042,915 115,951 37,158,866 17,170
137,582 (137,582) - -
37,180,497 (21,631) 37,158,866 17,170
4,650,288 620,143 5,270,431 2,177,558
19,712,327 4,291,060 24,003,387 48,269,000
24,362,615$ 4,911,203$ 29,273,818$ 50,446,558$
Net (Expense) Revenue and Changes in Net Position
Primary Government
-32-
CITY OF PADUCAH, KENTUCKY
BASIC FINANCIAL STATEMENTS
FUND FINANCIAL STATEMENTS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2016
Exhibit 3
Special
General
Fund
Assets
Cash and cash equivalents 7,540,290$ 971,404$ 5,995,364$
Receivables:
Accounts 7,450,358 - 1,465,933
Grants 12,265 - 2,809,885
Property taxes (net of
allowances for uncollectibles) 5,302,767 - -
Inventory - - 623,735
Due from other funds 1,317,401 1,247,177 -
Total Assets 21,623,081$ 2,218,581$ 10,894,917$
Liabilities
Voucher and accounts payable 497,443$ -$ 3,514,694$
Accrued payroll and payroll taxes 1,214,332 - -
Due to other funds 1,247,177 200,000 1,285,671
Unearned revenue - other - - 291,487
Accrued compensated absences 213,533 - -
Total liabilities 3,172,485 200,000 5,091,852
Deferred Inflows of Resources
Unavailable revenue-property taxes 5,252,470 - -
Fund Balances:
Nonspendable
Inventory - - 623,735
Restricted for:
Highways and streets - - -
Public safety - - -
Capital improvements - - -
Committed for:
Capital improvements - 2,018,581 -
Assigned for:
Capital improvements - - 5,179,330
Public safety - - -
Debt service - - -
Unassigned:
General Fund 13,198,126 - -
Total fund balances 13,198,126 2,018,581 5,803,065
TOTAL LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES 21,623,081$ 2,218,581$ 10,894,917$
See accompanying notes to the basic financial statements.
-33-
Fund Improvements
CITY OF PADUCAH, KENTUCKY
BALANCE SHEET
GOVERNMENTAL FUNDS
JUNE 30, 2016
Revenue
Investment
General
Capital
Debt
Service
Fund
791,761$ 1,683,568$ 16,982,387$
- 234,498 9,150,789
- - 2,822,150
- - 5,302,767
- - 623,735
- - 2,564,578
791,761$ 1,918,066$ 37,446,406$
16,859$ 261,008$ 4,290,004$
- 62,073 1,276,405
- - 2,732,848
24,078 - 315,565
- - 213,533
40,937 323,081 8,828,355
- - 5,252,470
- - 623,735
- 1,148,789 1,148,789
- 147,218 147,218
- - -
- - 2,018,581
- - 5,179,330
- 298,978 298,978
750,824 - 750,824
- - 13,198,126
750,824 1,594,985 23,365,581
791,761$ 1,918,066$ 37,446,406$
-34-
Governmental
Nonmajor
Governmental
Funds
Total
Funds
Exhibit 4
Total fund balance - total governmental funds 23,365,581$
Amounts reported for governmental activities in the Statement
of Net Position are different because:
164,407
3,742,500
9,905
(456,577)
55,617,018
(179,492)
94,667
320,723
(2,667,475)
9,377,005 6,945,428
See accompanying notes to the basic financial statements. (Continued)
Deferred refunding costs
Deferred pension related inflows
Deferred pension related outflows
Accrued retainage on construction projects do not require the use of
current financial resources and, therefore, is not reported in the
governmental funds balance sheet.
-35-
Premiums, discounts and deferred refunding costs and deferred
pension activity in governmental activities are not current financial
resources and, therefore, are not reported in the governmentalfunds
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.
Bond Premiums
Bond Discounts
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, 2016
The long-term notes receivable are not reported in the governmental
funds balance sheet since they are not available to pay current period
expenditures.
Exhibit 4
(Continued)
(1,812,592)
(90,739)$
$ 2,240,862
66,177,418 (68,418,280)
6,149,491$
(333,639)
(519,888) 5,295,964
NET POSITION OF GOVERNMENTAL ACTIVITIES 24,362,615$
See accompanying notes to the basic financial statements
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, 2016
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 ($62,119,098) are not due and payable in the
current period and, therefore, they are not reported in the
governmentalfunds balance sheet. See Note 3 for detail. The long-
term liabilities are:
CITY OF PADUCAH, KENTUCKY
RECONCILIATION OF THE GOVERNMENTAL FUNDS
BALANCE SHEET TO STATEMENT OF NET POSITION
-36-
Due within one year
Due after one year
Current assets
Net amount allocated to
Internal service funds are used by managementto charge the costs of
certain activities, such as insurance and fleet management, to
individual funds. The assets and liabilities of the Internal Service
Funds (net of amount allocated to business-type activities) not
included in other reconciling items are:
Current liabilities
Exhibit 5
Special
Revenue General
General Investment Capital
Revenues: Fund Fund Improvements
Taxes 6,595,802$ -$ -$
Licenses 24,658,566 4,947,986 -
Charges for services 646,623 - -
Intergovernmental - - -
Grants 616,178 - 7,509,619
Interest 101,542 - -
Property upkeep, rentals, sales and other 1,005,483 - 416,799
Total revenues 33,624,194 4,947,986 7,926,418
Expenditures:
Current operations:
General government 4,526,828 - -
Public safety 16,943,529 - -
Public service 4,768,109 - -
Parks and recreation 2,929,404 - -
Planning and development - 672,879 -
Intergovernmental and other 441,742 - -
Capital outlay - - 13,305,919
Debt service:
Principal requirement - - -
Interest requirement - - -
Total expenditures 29,609,612 672,879 13,305,919
Excess (deficiency) of revenues over expenditures 4,014,582 4,275,107 (5,379,501)
Other Financing Sources (Uses):
Transfers in 526,187 261,000 5,795,359
Transfers out (3,891,875) (4,332,360) (106,687)
Total other financing sources (uses) (3,365,688) (4,071,360) 5,688,672
Net change in fund balances 648,894 203,747 309,171
Fund balances - beginning 12,549,232 1,814,834 5,493,894
Fund balances - ending 13,198,126$ 2,018,581$ 5,803,065$
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, 2016
Debt
Service
Fund
-$ 381,131$ 6,976,933$
- - 29,606,552
- 237,636 884,259
635,705 497,147 1,132,852
- 766,732 8,892,529
- 14,380 115,922
289,005 374,125 2,085,412
924,710 2,271,151 49,694,459
- - 4,526,828
- 1,491,836 18,435,365
- 1,338,664 6,106,773
- - 2,929,404
- 237,500 910,379
- - 441,742
- - 13,305,919
2,133,570 - 2,133,570
849,798 - 849,798
2,983,368 3,068,000 49,639,778
(2,058,658) (796,849) 54,681
2,157,163 1,295,142 10,034,851
- (1,774,360) (10,105,282)
2,157,163 (479,218) (70,431)
98,505 (1,276,067) (15,750)
652,319 2,871,052 23,381,331
750,824$ 1,594,985$ 23,365,581$
Funds
Nonmajor
Governmental
-38-
Governmental
Total
Funds
Exhibit 6
Net change in fund balances - total governmental fund (15,750)$
Amounts reported for governmental activities in the Statement
of Activities are different because:
11,181,296
(360,803)
31,738
(2,695,391)
(456,577)
(1,476,865)
(3,388,650)$
See accompanying notes to the basic financial statements. (Continued)
FOR THE YEAR ENDED JUNE 30, 2016
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
$1,462,735.
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 $734,995.
The payments of a pension contribution requires the use of current financial
resources and, therefore, is reported as an expenditure in governmental funds.
However, the current year payments are deferred outflows of resources in the
government-widestatements. Deferred outflows of resources related to pension
expense decreased by this amount this year.
Accrued retainage on construction projects do not require the use of current
financial resources. However, in the government-wide statements, accrued
expense are recorded when incurred.
Only the loss on the disposal of capital assets is reported in the Statement of
Activities, whereas in the governmental funds, the proceeds from the sale
increases financial resources. Thus, the change in net position differs by the net
book value of capital assets disposed.
CITY OF PADUCAH, KENTUCKY
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
-39-
Payments on property taxes recognized as revenues when received in the
governmental funds.
Exhibit 6
(Continued)
2,133,570
4,617
70,235
(56,919)
410,410$
(2,883)
Capital Outlays (1,462,735)
734,995 (320,213)
CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES 4,650,288$
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 position
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.
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, 2016
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
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 5,276,500$ 5,421,765$ 5,421,774$ 9$
Real and personal,
prior year 125,000 112,440 112,444 4
Franchise 170,000 162,585 162,593 8
Bank taxes 230,000 242,340 242,344 4
In lieu of tax payment 295,000 276,395 276,401 6
Penalty, interest and
advertising 57,000 60,170 60,177 7
Paducah Junior College
tax collections - 320,065 320,069 4
Total taxes 6,153,500 6,595,760 6,595,802 42
Licenses:
Business licenses 4,450,000 4,711,705 4,711,708 3
Employee earnings 14,400,000 15,182,260 15,182,262 2
Comcast fees 300,000 299,880 299,886 6
Penalties 175,000 201,095 201,095 -
Alcoholic beverages 121,000 131,150 131,150 -
Insurance premium tax 3,900,000 4,170,380 4,170,381 1
Building permits 140,000 210,015 210,016 1
Electrical permits 32,000 49,575 49,576 1
Zoning change fees 6,500 5,975 5,975 -
Miscellaneous building
and electrical fees 5,000 4,500 4,500 -
Payroll tax sharing with County (290,000) (307,985) (307,983) 2
Total licenses 23,239,500 24,658,550 24,658,566 16
Charges for services:
Tax collection fee 180,000 176,180 176,182 2
Administrative charge 284,520 297,020 297,020 -
Base court revenue 42,000 40,510 40,512 2
Recreation fees 113,300 132,900 132,909 9
Total charges for services 619,820 646,610 646,623 13
See accompanying notes to the basic financial statements. (Continued)
ActualBudgeted Amounts
-41-
CITY OF PADUCAH, KENTUCKY
GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2016
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 315,000$ 292,855$ 292,858$ 3$
Fire State Incentive 265,000 259,170 259,172 2
Police supplemental grants 32,000 64,215 64,148 (67)
Total grants 612,000 616,240 616,178 (62)
Interest 94,800 101,540 101,542 2
Other:
Property rent and sales 694,880 679,320 679,331 11
Property upkeep and
maintenance 106,930 129,255 129,218 (37)
Contractual programs 5,400 2,025 2,029 4
E911 - GIS 28,515 30,890 30,891 1
Miscellaneous 153,000 163,945 164,014 69
Total other 988,725 1,005,435 1,005,483 48
Total revenues 31,708,345 33,624,135 33,624,194 59
Expenditures:
General government:
General administration:
Mayor and Commissioners 180,395 177,900 177,887 13
City Manager 459,725 454,925 454,914 11
City Clerk 126,735 127,490 127,531 (41)
Corporate Counsel 151,420 221,870 222,019 (149)
Non-departmental 822,400 776,605 776,599 6
Memberships and contingency 126,000 22,310 22,283 27
Civic beautification 3,000 - - -
Total general administration 1,869,675 1,781,100 1,781,233 (133)
PRDA 134,165 133,230 133,370 (140)
Finance:
Finance administration 260,165 259,470 259,335 135
Accounting and payroll 340,335 341,720 341,729 (9)
Revenue collection 398,290 395,325 395,244 81
Total finance 998,790 996,515 996,308 207
See accompanying notes to the basic financial statements. (Continued)
-42-
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
Budgeted Amounts
GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2016
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 274,955$ 273,850$ 273,738$ 112$
Planning 92,315 94,835 94,746 89
Grants 153,170 152,365 152,269 96
Economic development 134,535 134,435 134,299 136
Total planning 654,975 655,485 655,052 433
Radio and rental property 157,345 116,510 116,357 153
Human rights 41,955 34,280 34,076 204
Information systems 667,530 590,645 590,508 137
Human resources/risk management 309,050 220,045 219,924 121
Total general government 4,833,485 4,527,810 4,526,828 982
Public safety:
Police:
Police administration 994,300 1,029,540 1,029,370 170
Patrol 6,487,155 6,122,220 6,122,001 219
Investigations 2,015,000 1,863,945 1,863,887 58
Total police 9,496,455 9,015,705 9,015,258 447
Fire:
Fire administration 562,200 537,385 537,219 166
Suppression 6,367,305 6,276,120 6,275,965 155
Prevention and inspection 168,150 984,835 984,693 142
Training 149,250 130,440 130,394 46
Construction 409,700 - - -
Code enforcement 392,670 - - -
Total fire 8,049,275 7,928,780 7,928,271 509
Total public safety 17,545,730 16,944,485 16,943,529 956
Public service:
Public works:
Street maintenance 2,077,105 1,705,855 1,705,770 85
Street lighting 765,000 788,180 788,182 (2)
Landscape maintenance 1,117,490 1,075,560 1,075,392 168
Total public works 3,959,595 3,569,595 3,569,344 251
See accompanying notes to the basic financial statements. (Continued)
Budgeted Amounts
GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2016
-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 580,115$ 495,585$ 495,269$ 316$
Flood control 574,990 703,615 703,496 119
Total engineering services 1,155,105 1,199,200 1,198,765 435
Total public service 5,114,700 4,768,795 4,768,109 686
Parks and recreation:
Parks and recreation administration 832,650 768,610 768,330 280
Grounds maintenance 1,525,310 1,426,550 1,425,982 568
Pools and recreation programs 798,555 735,345 735,092 253
Total parks and recreation 3,156,515 2,930,505 2,929,404 1,101
Intergovernmental and other:
Cable authorit y 83,610 93,930 93,912 18
Leave expense - 27,765 27,761 4
Intergovernmental expense - 320,070 320,069 1
Total intergovernmental and other 83,610 441,765 441,742 23
Total expenditures 30,734,040 29,613,360 29,609,612 3,748
Excess (deficiency) of revenues
over expenditures 974,305 4,010,775 4,014,582 3,807
Other financing sources (uses):
Operating transfers in 419,500 526,175 526,187 12
Operating transfers out (1,633,720) (3,891,885) (3,891,875) 10
Total other financing sources (uses) (1,214,220) (3,365,710) (3,365,688) 22
Net change in fund balance (239,915) 645,065 648,894 3,829
Fund balance - beginning 12,549,232 12,549,232 12,549,232 -
Fund balance - ending 12,309,317$ 13,194,297$ 13,198,126$ 3,829$
See accompanying notes to the basic financial statements.
-44-
CITY OF PADUCAH, KENTUCKY
Budgeted Amounts
GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2016
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 4,800,000$ 4,947,985$ 4,947,986$ 1$
Total licenses 4,800,000 4,947,985 4,947,986 1
Other:
Miscellaneous - - - -
Total other - - - -
Total revenues 4,800,000 4,947,985 4,947,986 1
Expenditures:
General government:
Planning and development:
Economic development 690,500 672,880 672,879 1
Total expenditures 690,500 672,880 672,879 1
Excess (deficiency) of revenues
over expenditures 4,109,500 4,275,105 4,275,107 2
Other financing sources (uses):
Operating transfers in 261,000 261,000 261,000 -
Operating transfers out (4,369,670) (4,332,365) (4,332,360) 5
Total other financing sources (uses) (4,108,670) (4,071,365) (4,071,360) 5
Net change in fund balance 830 203,740 203,747 7
Fund balance - beginning 1,758,934 1,814,835 1,814,834 (1)
Fund balance - ending 1,759,764$ 2,018,575$ 2,018,581$ 6$
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, 2016
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 4,800,000$ 4,947,985$ 4,947,986$ 1$
Total licenses 4,800,000 4,947,985 4,947,986 1
Other:
Miscellaneous - - - -
Total other - - - -
Total revenues 4,800,000 4,947,985 4,947,986 1
Expenditures:
General government:
Planning and development:
Economic development 690,500 672,880 672,879 1
Total expenditures 690,500 672,880 672,879 1
Excess (deficiency) of revenues
over expenditures 4,109,500 4,275,105 4,275,107 2
Other financing sources (uses):
Operating transfers in 261,000 261,000 261,000 -
Operating transfers out (4,369,670) (4,332,365) (4,332,360) 5
Total other financing sources (uses) (4,108,670) (4,071,365) (4,071,360) 5
Net change in fund balance 830 203,740 203,747 7
Fund balance - beginning 1,758,934 1,814,835 1,814,834 (1)
Fund balance - ending 1,759,764$ 2,018,575$ 2,018,581$ 6$
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, 2016
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 5,837,161$ 414,908$ 6,252,069$ 5,648,890$
Accounts receivable 556,969 - 556,969 244,485
Due from other funds - - - 200,000
Inventory - - - 56,116
Total current assets 6,394,130 414,908 6,809,038 6,149,491
Noncurrent Assets:
Net capital assets:
Land 62,152 - 62,152 -
Depreciable capital assets 1,486,478 130,098 1,616,576 3,884,310
Total noncurrent assets 1,548,630 130,098 1,678,728 3,884,310
Total assets 7,942,760 545,006 8,487,766 10,033,801
Deferred Outflows of Resources:
Deferred pension contributions 377,374 62,964 440,338 125,310
Current Liabilities:
Voucher and accounts payable 129,337 34,020 163,357 230,226
Accrued payroll and payroll taxes 63,024 - 63,024 22,414
Accrued compensated absences 104,574 1,962 106,536 35,704
Unearned revenue 25,500 - 25,500 23,865
Due to other funds - 31,729 31,729 -
Total current liabilities 322,435 67,711 390,146 312,209
Noncurrent Liabilities:
Pensions obligation 1,619,918 264,500 1,884,418 479,013
Landfill post-closure costs 2,062,500 - 2,062,500 -
Accrued compensated absences 49,730 17,654 67,384 21,430
Total noncurrent liabilities 3,732,148 282,154 4,014,302 500,443
Total liabilities 4,054,583 349,865 4,404,448 812,652
Deferred Inflows of Resources
Difference between projected and actuarial
earnings on pension plan investments 114,494 17,847 132,341 44,484
Net invested in capital assets 1,548,630 130,098 1,678,728 3,884,310
Restricted - Housing - 38,247 38,247 -
Unrestricted 2,602,427 71,913 2,674,340 5,417,665
TOTAL NET POSITION 4,151,057$ 240,258$ 4,391,315 9,301,975$
Reconciliation to government-wide statements of net position:
Adjustment to reflect the consolidation of Internal Service Funds'
activities related to Enterprise Funds 519,888
NET POSITION OF BUSINESS-TYPE ACTIVITIES 4,911,203$
See accompanying notes to the basic financial statements.
-46-
Business-type Activities
ASSETS
LIABILITIES
NET POSITION
Funds
Service
Internal
Governmental
Activities
CITY OF PADUCAH, KENTUCKY
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
JUNE 30, 2016
Exhibit 10
Nonmajor
Solid Enterprise
Operating Revenues: Waste Funds Totals
Charges for services - internal -$ 40,148$ 40,148$ 5,906,661$
Charges for services - external 4,520,084 - 4,520,084 280,639
Miscellaneous 2,466 1,500 3,966 -
Total operating revenues 4,522,550 41,648 4,564,198 6,187,300
Operating Expenses:
Cost of sales and service 3,434,867 1,937,227 5,372,094 5,505,396
Depreciation and amortization 334,743 11,306 346,049 734,995
Total operating expenses 3,769,610 1,948,533 5,718,143 6,240,391
Operating income (loss) 752,940 (1,906,885) (1,153,945) (53,091)
Nonoperating Revenues (Expenses):
Grants - program purpose 60,070 1,785,479 1,845,549 -
Interest and investment income 30,255 47 30,302 21,300
Gain (loss) on disposal of property
and equipment 78,802 - 78,802 188,322
Total nonoperating revenues (expenses)169,127 1,785,526 1,954,653 209,622
Income (loss) before contributions and
transfers 922,067 (121,359) 800,708 156,531
Contributions and Transfers:
Transfers in - 102,418 102,418 253,879
Transfers out (285,866) - (285,866) -
Total contributions and transfers (285,866) 102,418 (183,448) 253,879
Change in net position 636,201 (18,941) 617,260 410,410
Net position - beginning 3,514,856 259,199 8,891,565
Net position - ending 4,151,057$ 240,258$ 9,301,975$
Reconciliation to government-wide statements of net position:
Adjustment to reflect the consolidation of Internal Service Funds'
activities related to Enterprise Funds 2,883
CHANGE IN NET POSITION OF BUSINESS-TYPE ACTIVITIES 620,143$
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, 2016
Governmental
Exhibit 11
Nonmajor
Solid Enterprise
Cash Flows from Operating Activities: Waste Funds Totals
Cash received from customers 4,508,714$ 40,148$ 4,548,862$ -$
Cash received from interfund services provided - - - 6,295,564
Payments to suppliers (2,023,181) - (2,023,181) (190,725)
Payments to employees (830,275) (181,319) (1,011,594) (311,735)
Claims paid - - - (3,338,437)
Payments to internal service funds (487,278) (2,301) (489,579) -
Other receipts 2,466 1,500 3,966 -
Other payments - (1,769,922) (1,769,922) (1,712,959)
Net cash provided (used) by operating activities 1,170,446 (1,911,894) (741,448) 741,708
Cash Flows from Noncapital Financing Activities:
Grants - program purpose 60,070 1,785,479 1,845,549 -
Transfers from other funds - 102,418 102,418 253,879
Transfers to other funds (285,866) - (285,866) -
Net cash provided (used) by noncapital
financing activities (225,796) 1,887,897 1,662,101 253,879
Cash Flows from Capital and Related
Financing Activities:
Purchase of capital assets (891,552) - (891,552) (1,462,735)
Proceeds from sale of capital assets 78,802 - 78,802 209,141
Net cash provided (used) by capital and
related financing activities (812,750) - (812,750) (1,253,594)
Cash Flows from Investing Activities:
Interest on cash and investments 30,255 47 30,302 21,300
Net cash provided (used) by investing
activities 30,255 47 30,302 21,300
Net increase (decrease) in cash and cash
equivalents 162,155 (23,950) 138,205 (236,707)
Cash and cash equivalents, July 1, 2015 5,675,006 438,858 6,113,864 5,885,597
CASH AND CASH EQUIVALENTS,
JUNE 30, 2016 5,837,161$ 414,908$ 6,252,069$ 5,648,890$
Reconciliation of Operating Income (Loss) to Net
Cash Provided by Operating Activities:
Operating income (loss) 752,940$ (1,906,885)$ (1,153,945)$ (53,091)$
Adjustments to reconcile operating income to
net cash provided by operating activities:
Depreciation and amortization 334,743 11,306 346,049 734,995
Change in assets and liabilities:
Receivables (10,070) - (10,070) 8,871
Prepaid expenses - - - -
Inventories - - - 7,999
Due to other funds - - - 100,000
Pension obligation and related deferrals 42,438 18,619 61,057 (5,327)
Account and accrued payables 51,695 (34,934) 16,761 (51,739)
NET CASH PROVIDED (USED) BY OPERATING
ACTIVITIES 1,171,746$ (1,911,894)$ (740,148)$ 741,708$
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, 2016
-48-
Governmental
Activities
Internal
Service
Exhibit 12
Private-
Pension purpose Agency
Funds Trusts Funds
Cash and cash equivalents 20,819$ 108,472$ 519,942$
Receivables:
Interest 6,292 - -
Investments at fair value
Money market funds 358,229 - -
Common stock 2,317,643 - -
Corporate bonds - - -
Mutual funds 2,941,319 998,298 -
Total assets 5,644,302 1,106,770 519,942$
Voucher and accounts payable 42 - -
Payroll taxes and withholdings
payable - - 519,942$
Total liabilities 42 - 519,942$
Net position restricted for pensions 5,644,260$
Held in trust for other purposes 1,106,770$
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, 2016
Exhibit 13
Private-
Pension purpose
Additions: Funds Trusts
Contributions:
Employer 426,951$ -$
Plan members 4,494 -
Private donations - 2,540
Total contributions 431,445 2,540
Investment income:
Net increase (decrease) in
fair value of investments 29,617 (89,646)
Interest and dividends 135,916 92,271
Net investment income 165,533 2,625
Total additions 596,978 5,165
Deductions:
Benefits 1,328,146 -
Capital outlay - 54,685
Administrative expenses 53,962 12,968
Total deductions 1,382,108 67,653
Change in net position (785,130) (62,488)
Net position - beginning 6,429,390 1,169,258
Net position - ending 5,644,260$ 1,106,770$
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, 2016
CITY OF PADUCAH, KENTUCKY
NOTES TO THE FINANCIAL STATEMENTS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2016
- 51 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2016
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, 2016
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, 2016
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, 2016
Note 1 - Summary of Significant Account Policies:
Basis of Presentation
Fund Financial Statements
Additionally, the City reports the internal service funds which are used to account for the fleet
management services, property and casualty insurance, and self-funded health insurance provided to
departments of the City.
Fiduciary funds report resources held in trust. Two of these funds are single-employer defined benefit
funds and are administered by the City. These funds are Police and Firefighters' Pension Fund (PFPF) and
Appointive Employees' Pension Fund (AEPF). Pension trust funds report the receipt, investment, and
distribution of retirement contributions. The remaining funds are private-purpose trust funds which report
the receipt and distribution 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. 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, 2016
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, 2016
Note 1 - Summary of Significant Accounting Policies:
Budgets and Budgetary Accounting
The City legally adopts annual budgets for all governmental and proprietary funds except for Section Eight
Housing Fund. The City follows these procedures in establishing the budgetary data reflected in these
financial statements:
1. Prior to July, the City Manager submits to the City Commission a proposed operating budget for the
fiscal year commencing on July 1. The operating budget includes proposed expenditures and the
means of financing those.
2. Public hearings are conducted by the City to obtain taxpayer comments.
3. Prior to July, the budget is legally enacted through passage of an ordinance.
4. The City Manager is authorized to transfer budgeted amounts between departments and their line
items; however, any revisions that alter the total expenditures must be approved by the City
Commission.
5. Formal budgetary integration is employed as a management control device during the year; and, the
budget is legally adopted. Budget amendments are also legally adopted.
6. The budget is adopted on the modified accrued basis of accounting.
Encumbrance accounting, under which purchase orders, contracts, and other commitments for
expenditures are recorded in order to reserve that portion of the applicable appropriation, is employed as
an extension of formal budgetary integration in the General Fund, Special Revenue Funds, Debt Service
Fund, and Capital Projects Funds. In accordance with generally accepted accounting principles (GAAP),
encumbrances outstanding at year end are reported as reservations of fund balances since they do not
constitute expenditures or liabilities. There are no encumbrances at June 30, 2016.
Cash and Investments
The City Commission adopted formal deposit and investment policies in January 2001. These policies
apply to all City funds not contained in public trusts. The pension trust fund has investment policies
separately approved by their oversight board. The private purpose trust has not adopted a deposit and
investment policy.
For the purpose of the Statement of Net Position, “cash and cash equivalents” includes all demand and
savings accounts of the City. For the purpose of the proprietary fund Statement of Cash Flows, “cash and
cash equivalents” include all demand and savings accounts and certificates of deposit, 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, 2016
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
$56,116 held for consumption and real property of $623,735 held for urban development. The cost is
recorded as an expenditure at the time individual items are consumed or sold for urban development rather
than when purchased.
Capital Assets
The accounting treatment of property, plant and equipment (capital assets) depends on whether the assets
are used in governmental fund operations or proprietary fund operations and whether they are reported in
the government-wide or fund financial statements.
(Continued)
- 58 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2016
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 net 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 two items that qualifies
for reporting in the category. These are the deferred charge on refunding and deferred pension related
outflows reported in the statements of net position. A deferred charge on refunding results from the
difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and
amortized over the shorter of the life of the refunded or refunding debt.
The deferred related pension outflows results from pension contributions subsequent to the measurement
date of the pension plan and various changes resulting from actuarial pension measurement. The pension
contribution amount is deferred and recognized as a component of the change in pension plan liability in
the next measurement period. The various changes resulting from actuarial pension measurement are
deferred and amortized 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, 2016
Note 1 - Summary of Significant Accounting Policies:
Deferred Outflows/Inflows of Resources
In addition to liabilities, the statement of net position will sometimes report a separate section for deferred
inflows of resources. This separate financial statement element, deferred inflows of resources, 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 City has two type of items reported in this category. These are
property taxes levied during the fiscal year for the next fiscal year and inflows related to the City’s pension
plans that qualifies for reporting in this category – deferred pension related inflows. The various changes
resulting from actuarial pension measurement are deferred and amortized 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, 2015
Additions
Reductions
Balance
June 30, 2016
Governmental Activities
Deferred outflows of resources
Deferred charge on refunding $ 383,952 $ - $ (63,229) $ 320,723
Deferred pension contributions $ 4,079,846 $ 2,479,961 $ (4,079,846) $ 2,479,961
Changes in proportion and differences
between employer contributions and
proportionate share of contributions
-
137,958
(28,270)
109,688
Differences between expected and
actual experience
-
824,383
(179,768)
644,615
Change of assumptions - 4,385,003 (1,030,063) 3,354,940
Difference between projected and
actuarial earnings
151,609
3,342,828
(706,636)
2,787,801
Pension related deferred outflows $ 4,231,455 $ 11,170,133 $ (6,024,583) $ 9,377,005
Deferred inflows of resources
Changes in proportion and differences
between employer contributions and
proportionate share of contributions
$ -
$ 344,313
$ (98,095)
$ 246,218
Difference between projected and
actuarial earnings
3,264,613
-
(843,356)
2,421,257
Pension related deferred inflows $ 3,264,613 $ 344,313 $ (941,451) $ 2,667,475
Business-Type Activities
Deferred outflows of resources
Deferred pension contributions $ 198,406 $ 125,218 $ (198,406) $ 125,218
Differences between expected and
actual experience
-
21,899
(6,239)
15,660
Change of assumptions - 265,729 (75,706) 190,023
Difference between projected and
actuarial earnings
-
136,796
(27,359)
109,437
Pension related deferred outflows $ 198,406 $ 549,642 $ (307,710) $ 440,338
Deferred inflows of resources
Unavailable revenues – property taxes $ 4,985,182 $ 5,023,063 $ (4,985,182) $ 5,023,063
Changes in proportion and differences
between employer contributions and
proportionate share of contributions
$ -
$ 55,651
$ (15,855)
$ 39,796
Difference between projected and
actuarial earnings
123,394
(30,849)
92,545
Pension related deferred inflows $ 123,394 $ 55,651 $ (46,704) $ 132,341
(Continued)
- 60 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2016
Note 1 - Summary of Significant Accounting Policies:
Deferred Outflows/Inflows of Resources
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.
Accumulations for vacation pay are restricted to a maximum of 50 days and provide vesting rights upon
completion of six months service. Accumulations for sick pay are restricted to a maximum of 150 days
and provide payment to employees or beneficiaries for accumulations in excess of 50 days and up to 120
days upon death or retirement from City service. Qualified participants in the County Employees’
Retirement System, under certain circumstances, are eligible to convert accrued sick pay benefits into
additional credit for years of service upon retirement.
Long-Term Debt
The accounting treatment of long-term debt depends on whether the assets are used in governmental fund
operations or proprietary fund operations and whether they are reported in the government-wide or fund
financial statements.
All long-term debt to be repaid from governmental and business-type resources is reported as liabilities in
the government-wide statements. The long-term debt consists primarily of bonds payable, notes payable,
and accrued compensated absences.
Long-term debt for governmental funds is not reported as liabilities in the fund financial statements. The
debt proceeds are reported as other financing sources and payment of principal and interest as
expenditures. The accounting for proprietary funds is the same in the fund statements as it is in the
government-wide statements.
(Continued)
- 61 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2016
Note 1 - Summary of Significant Accounting Policies:
Equity Classifications
Government-wide Statements
Equity is classified as net position and displayed in three components:
a. Net Invested in capital assets – Consists of capital assets including restricted capital assets, net of
accumulated depreciation and reduced by the outstanding balances of any bonds, mortgages, notes,
or other borrowings that are attributable to the acquisition, construction, or improvement of those
assets.
b. Restricted net position – Consists of net assets with constraints placed on the use either by (1)
external groups such as creditors, grantors, contributors, or laws or regulations of other governments;
or (2) law through constitutional provisions or enabling legislation.
c. Unrestricted net position – All other net assets that do not meet the definition of “restricted” or “net
invested in capital assets.”
Fund Statements
Governmental fund equity is classified as fund balance and displayed in five components:
a. Nonspendable fund balance includes amounts that are not in a spendable form or are required to be
maintained intact indefinitely.
b. Restricted fund balance includes amounts that can be spent only for the specific purpose stipulated
by creditors, grantors, contributors, or laws or regulations of other governments.
c. Committed fund balance includes amounts that can be used only for the specific purposes
determined by the City Commissioners through the approval of City ordinances. Commitments
may be changed or lifted only by the City Commissioners making the same formal action that
imposed the constraint originally.
d. Assigned fund balance comprises the amounts intended to be used for a specific purpose. Intent can
be expressed by the City Commissioners or the City Finance Officer, as stated in the Finance
Department Accounting Policy (FIN-20). No formal action is required.
e. Unassigned fund balance is the residual balance not contained in nonspendable fund balance or
restricted fund balance or committed fund balance or assigned fund balance. The General Fund is
the only governmental fund which reports an unassigned 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.
(Continued)
- 62 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2016
Note 1 - Summary of Significant Accounting Policies:
Interfund Transactions
Interfund services provided and used are accounted for as revenues, expenditures, or expenses.
Transactions that constitute reimbursements to a fund for expenditures/expenses initially made from it that
are properly applicable to another fund, are recorded as expenditures/expenses in the reimbursing fund and
as reductions of expenditures/expenses in the fund that is reimbursed. All other interfund transactions are
reported as transfers.
Program Revenues
Amounts reported as program revenues include 1) charges to customers or applicants for goods, services,
or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions,
including special assessments. Internally dedicated resources are reported as general revenues rather than
as program revenues. Likewise, general revenues include all taxes.
Operating and Non-Operating Revenues and Expenses – Proprietary Funds
Operating revenues and expenses for proprietary funds are those that result from providing services and
producing and delivering goods and/or services. It also includes all revenue and expenses not related to
capital and related financing, noncapital financing, or investing activities. Operating expenses for the
enterprise and internal service funds include the cost of sales and services, administrative expenses, and
depreciation on capital assets. All revenues and expenses not meeting this definition are reported as
nonoperating revenues and expenses
Expenditures/Expenses
In the government-wide financial statements, expenses are classified by function for both governmental
and business-type activities.
In the fund financial statements, expenditures are classified as follows:
Governmental Funds – by function: Current (further classified by character)
Debt Service
Capital Outlay
Proprietary Fund – by operating and nonoperating
In the fund financial statements, governmental funds report expenditures of financial resources.
Proprietary funds report expenses relating to use of economic resources.
Interfund Transfers
Permanent reallocation of resources between funds of the reporting entity are classified as interfund
transfers. For the purposes of the Statement of Activities, all interfund transfers between individual
governmental funds have been eliminated.
(Continued)
- 63 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2016
Note 1 - Summary of Significant Accounting Policies:
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.
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
For the year ended June 30, 2016, 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 6, 2016, the date financial statements were available to be
issued.
(Continued)
- 64 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2016
Note 2 - Property Taxes:
The City bills and collects its own property taxes. The City elects to use the annual property assessment
prepared by McCracken County as its base to apply the property tax rate. According to Kentucky Revised
Statutes, the assessment date for the City must conform to the assessment date of McCracken County and
the annual increase in the property tax levy cannot exceed 4%. City property tax revenues are recorded as
a receivable when assessed because the City has an enforceable legal claim to the resources. At this time,
the receivable is offset by unearned revenue. Property tax revenues are recognized during the period for
which they are levied.
The due dates and collection period for all property taxes, exclusive of vehicle taxes, for the fiscal year
ended June 30, 2016, are as follows:
Description Date
Assessment and enforceable lien January 1, 2015
Levy October 6, 2015
Face value amount payment dates 1st half by November 1, 2015
2nd half by February 1, 2016
Delinquent date - 10% penalty
plus 1/2% per month 1st half - November 30, 2015
2nd half - February 28, 2016
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, 2016, 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 $29,532,580 and
$30,469,258, respectively.
(Continued)
- 65 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2016
Note 3 - Detail Notes on Transaction Classes/Accounts:
Investments
As of June 30, 2016, 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 $ 358,229 NA NA NA NA NA
Common stock 2,317,643 NA NA NA NA NA
Corporate bonds - NA $ - $ - $ - $ -
U.S. agencies - - - - -
Mutual funds
Equity 3,939,617 NA NA NA NA NA
TOTAL FIDUCIARY AND
PRIVATE PURPOSE
TRUST FUNDS $6,615,489
(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, 2016
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, 2016
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, 2016, was as follows:
Balance Balance
Primary Government: July 1, 2015 Additions Deductions June 30, 2016
Capital assets, not being depreciated:
Land $10,383,332 $ 10,000 $ - $10,393,332
Construction-in-progress 4,025,248 9,300,717 32,508 13,293,457
Total capital assets, not being
depreciated 14,408,580 9,310,717 32,508 23,686,789
Capital assets, being depreciated:
Land improvements 12,898,307 3,355 - 12,901,662
Buildings and improvements 20,814,867 32,508 1,812,656 19,034,719
Infrastructure 41,625,986 - - 41,625,986
Equipment 8,102,749 482,226 173,436 8,411,539
Furnishings and fixtures 217,436 - 1,500 215,936
Vehicles 8,931,234 1,384,998 1,155,824 9,160,408
Totals at historical cost 92,590,579 1,903,087 3,143,416 91,350,250
Less accumulated depreciation:
Land improvements 2,411,583 740,347 - 3,151,930
Buildings and improvements 13,105,096 436,722 337,356 13,204,462
Infrastructure 29,562,992 1,186,917 - 30,749,909
Equipment 6,614,476 293,414 171,871 6,736,019
Furnishings and fixtures 203,083 1,811 1,500 203,394
Vehicles 5,779,872 729,439 1,135,004 5,374,307
Total accumulated depreciation 57,677,102 3,388,650 1,645,731 59,420,021
Total capital assets, being
depreciated, net 34,913,477 (1,485,563) 1,497,685 31,930,229
PRIMARY GOVERNMENT
ACTIVITIES CAPITAL
ASSETS, NET $49,322,057 $ 7,825,154 $1,530,193 $55,617,018
During the year ended June 30, 2016, the City donated a portable dome building to the Paducah-McCracken
County Convention Center resulting in a net decrease in net position of $1,475,301.
(Continued)
- 68 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2016
Note 3 - Detail Notes on Transaction Classes/Accounts:
Capital Assets
Depreciation expense was charged to governmental activities as follows:
General government:
General administration $ 300,540
Finance -
Planning 19,922
Inspections -
Human resources/risk management 909
Information systems 7,708
Fleet maintenance 4,861
Total general government 333,940
Public safety:
Police 197,498
Fire 54,823
Grants -
Emergency 911 25,553
Court awards 687
Fleet Lease Trust 730,133
Total public safety 1,008,694
Public service:
Public works 38,850
Engineering 22,311
Total public service 61,161
Parks and recreation 795,223
Planning and development:
Infrastructure 1,187,761
Grants 1,871
Total planning and development 1,189,632
TOTAL DEPRECIATION EXPENSE –
GOVERNMENTAL ACTIVITIES $3,388,650
(Continued)
- 69 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2016
Note 3 - Detail Notes on Transaction Classes/Accounts:
Capital Assets
Balance Balance
Business-type Activities: July 1, 2015 Increases Decreases June 30, 2016
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 16,932 - 571,759
Equipment 1,429,568 86,484 - 1,516,052
Vehicles 2,461,145 788,136 328,026 2,921,255
Totals at historical cost 4,445,540 891,552 328,026 5,009,066
Less accumulated depreciation:
Buildings and improvements 285,802 14,633 - 300,435
Equipment 1,032,285 123,119 - 1,155,404
Vehicles 2,056,380 208,297 328,026 1,936,651
Total accumulated depreciation 3,374,467 346,049 328,026 3,392,490
Total capital assets, being
depreciated, net 1,071,073 545,503 - 1,616,576
BUSINESS-TYPE ACTIVITIES
CAPITAL ASSETS, NET $ 1,133,225 $ 545,503 $ - $ 1,678,728
Depreciation expense was charged to business-type activities as follows:
Solid Waste Fund $ 334,743
Section Eight Housing 1,285
Civic Center 10,021
TOTAL DEPRECIATION EXPENSE –
BUSINESS-TYPE ACTIVITIES $ 346,049
(Continued)
- 70 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2016
Note 3 - Detail Notes on Transaction Classes/Accounts:
Capital Assets
Balance Balance
Discretely Presented July 1, 2015 Increases Decreases June 30, 2016
Component Units:
Capital assets, not being depreciated:
Land & construction in progress $ 531,621 $ 1,095,249 $ - $ 1,626,870
Total capital assets, not being
depreciated 531,621 1,095,249 - 1,626,870
Capital assets, being depreciated:
Utility plant 86,180,280 2,392,566 655,805 87,917,041
Total capital assets, being
depreciated 86,180,280 2,392,566 655,805 87,917,041
Less accumulated depreciation:
Utility plant 36,235,553 2,115,895 388,429 37,963,019
Total accumulated depreciation 36,235,553 2,115,895 388,429 37,963,019
Total capital assets, being
depreciated, net 49,944,727 276,671 267,376 49,954,022
COMPONENT UNIT
CAPITAL ASSETS, NET $ 50,476,348 $ 1,371,920 $ 267,376 $ 51,580,892
Depreciation expense, charged to functions/programs of discretely presented major component units as
follows:
Paducah Water Works $ 2,115,895
TOTAL DEPRECIATION EXPENSE BY ACTIVITY $ 2,115,895
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, 2016
Note 3 - Detail Notes on Transaction Classes/Accounts:
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, 2016, the governmental long-term liabilities consisted of the following:
General obligation bonds:
Current portion $ 1,773,148
Noncurrent portion 19,821,948
TOTAL GENERAL OBLIGATION
BOND COSTS, NET OF PREMIUMS AND DISCOUNTS $ 21,595,096
Note payable:
Current portion $ 467,714
Noncurrent portion 5,218,721
TOTAL NOTE PAYABLE PAYMENTS $ 5,686,435
Accrued compensated absences:
Current portion $ 1,336,751
Noncurrent portion 746,510
TOTAL ACCRUED COMPENSATED
ABSENCES $ 2,083,261
Pension obligations:
County Employee Retirement System $ 36,877,136
Appointive Employee’s Pension Fund 95,226
Police and Firefighters Pension Plan 4,249,213
TOTAL PENSION OBLIGATIONS $ 41,221,575
(Continued)
- 72 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2016
Note 3 - Detail Notes on Transaction Classes/Accounts:
Long-Term Liabilities
Business-type Activities
As of June 30, 2016, the long-term liabilities payable from proprietary fund resources consisted of the
following:
Accrued compensated absences:
Current portion $ 106,535
Noncurrent portion 67,384
TOTAL ACCRUED COMPENSATED
ABSENCES $ 173,919
Pension obligations:
County Employee Retirement System $ 1,884,418
TOTAL PENSION OBLIGATIONS $ 1,884,418
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 ranging between 2% and 3.7%.
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, 2016
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, 2016
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, 2010, $0 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, 2016
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, 2016:
Beginning Ending Due within
Type of Liability: Balance Additions Reductions Balance One Year
Governmental activities:
General obligation bonds:
Pension $ 285,000 $ - $ (285,000) $ - $ -
Floodwall Rehabilitation 2,104,212 - (113,941) 1,990,271 128,148
Refinanced Pension 4,150,000 - (95,000) 4,055,000 395,000
Refinanced Convention Center 5,385,000 - (430,000) 4,955,000 440,000
Refinanced Rental Building 2,820,000 - (290,000) 2,530,000 300,000
Public Pool Renovations 1,055,000 - (65,000) 990,000 65,000
Economic Development 2,330,000 - (145,000) 2,185,000 145,000
Refinancing Public Projects 5,100,000 - (295,000) 4,805,000 300,000
Premiums 203,549 - (24,057) 179,492 -
Discounts (112,414) - 17,747 (94,667) -
Total bonds payable 23,320,347 - (1,725,251) 21,595,096 1,773,148
Notes payable:
Kentucky League of Cities 1,669,821 - (169,695) 1,500,126 190,510
Kentucky Association of
Counties 1,976,250 - (109,584) 1,866,666 114,583
Margaret Hank Agreement 116,078 - (21,227) 94,851 46,917
Murray State University
Agreement 2,338,915 - (114,123) 2,224,792 115,704
Total notes payable 6,101,064 - (414,629) 5,686,435 467,714
Pension Obligations 32,788,823 11,017,715 (2,584,963) 41,221,575 -
Accrued Compensated
Absences 2,130,965 1,173,985 (1,221,689) 2,083,261 1,336,751
TOTAL GENERAL LONG-
TERM LIABILITIES $64,341,199 $12,191,700 $ (5,946,532) $ 70,586,367 $ 3,577,613
Business-type activities:
Pension Obligations $ 1,541,681 $ 473,594 $ (130,857) $ 1,884,418 -
Accrued compensated
Absences 125,323 130,534 (81,938) 173,919 106,535
TOTAL BUSINESS LONG-
TERM LIABILITIES $ 1,667,004 $ 604,128 $ (212,795) $ 2,058,337 $ 106,535
(Continued)
- 76 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2016
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 $55,617,018
Less:
19.75% of the outstanding 2010B
general obligation bonds $ (986,513)
100% of the outstanding 2011
General obligation bonds (2,530,000)
Net of the County's portion 1,758,256
(1,758,256)
78% of the outstanding 2014A
general obligation bonds (3,747,900)
100% of the outstanding 2013A
general obligation bonds (990,000)
52% of the outstanding 2013B
general obligation bonds (1,136,200)
100% of the Margaret Hank Agreement (94,851)
100% of the outstanding Kentucky League
of Cities' note payable (1,500,126)
Net position invested in capital assets, net of related debt $46,389,685
Annual Debt Service Requirements
The annual debt service requirements to maturity for bonds and notes as of June 30, 2016, are as follows:
Year Ending
June 30 Principal Interest
2017 $ 2,240,862 $ 844,232
2018 2,298,545 787,311
2019 2,308,002 719,446
2020 2,360,816 650,195
2021 2,430,402 576,613
2022-2026 11,248,112 1,729,940
2027-2031 4,137,976 343,731
2032 171,990 3,010
TOTALS $27,196,705 $ 5,654,478
(Continued)
- 77 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2016
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, 2016, are as
follows:
Accrued Compensated Absences
Governmental Business-type
Activities Activities
Accrued sick leave $ 755,527 $ 83,064
Accrued vacation leave 1,327,734 90,855
Totals 2,083,261 173,919
Less current portion 1,336,751 106,535
LONG-TERM PORTION $ 746,510 $ 67,384
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, 2016.
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, 2016, $115,544 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, 2016, 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, 2016
Note 3 - Detail Notes on Transaction Classes/Accounts:
Interfund Transactions and Balances
Interfund transfers during the year ended June 30, 2016, were as follows:
Interfund Interfund
Governmental Funds: Transfers In Transfers Out
General Fund $ 526,187 $3,891,875
Special Revenue Investment Fund 261,000 4,332,360
Capital Project Fund 5,795,359 106,687
Debt Service Fund 2,157,163 -
Nonmajor Governmental Funds 1,295,142 1,774,360
Internal Service Funds 253,879 -
Proprietary Funds:
Solid Waste - 285,866
Nonmajor Proprietary Funds 102,418 -
TOTALS $10,391,148 $10,391,148
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 $470,142 for E911 support;
$589,733 for debt service; and $2,338,569 for capital projects. Significant transfers from the special
revenue investment fund includes $825,000 for municipal aid street resurfacing program; $1,567,430 for
debt service; and $1,682,430 for capital projects.
Due To/From Balances
Due to/from balances used to cover current operating expenses were as follows as of June 30, 2016:
Due From Due To
General Fund $1,317,401 $1,247,177
Special Revenue Investment Fund 1,247,177 200,000
General Capital Improvements Fund - 1,285,671
Nonmajor Proprietary Funds - 31,730
Internal Service Funds 200,000 -
TOTALS $2,764,578 $2,764,578
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, 2016
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, 2016
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 17.06% for non-hazardous employees and 32.95% for hazardous employees for the year ended
June 30, 2016.
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows
of Resources Related to Pensions
At June 30, 2016, 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 $ 13,543,354
City’s hazardous proportionate share of the CERS net pension liability 25,218,200
Total CERS net pension liability associated with the City $ 38,761,554
(Continued)
- 81 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2016
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, 2015, 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, 2015, the City’s non-hazardous proportion was 0.314997% percent and hazardous
proportion was 1.642766% percent.
For the year ended June 30, 2016, the City recognized pension expense of $3,923,034 related to CERS
pension plans. At June 30, 2016, 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 $ 660,275 $ -
Changes in assumptions 3,544,963 -
Net difference between projected and actual earnings
on pension plan investments
2,566,191 2,286,458
Changes in proportion and differences between City
contributions and proportionate share of contributions
109,688 286,014
City contributions subsequent to the
Measurement date
2,605,179
-
Total $ 9,486,296 $ 2,572,471
The City reported $2,605,179 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, 2017. 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
2017 $ 650,100 $ 435,391
2018 650,100 435,391
2019 650,100 202,644
2020 1,044,706 240,214
- -
(Continued)
- 82 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2016
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, 2015 actuarial valuation was
determined using the following actuarial assumptions, applied to all periods included in the
measurement:
Inflation 3.25%
Projected salary increases 4.00%
Investment rate of return, net of
investment expense & inflation
7.50%
For CERS, Mortality rates for the period after service retirement are according to the RP-2000
Combined Mortality Table projected with Scale BB to 2013 for all active and retired employees and
beneficiaries. The RP-2000 Combined Mortality Table projected with Scale BB to 2013 set back four
years for males 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, 2008 – June 30, 2013.
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 2008 through 2013, is outlined in a report dated April 30, 2014. 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, 2016
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
Combined Equity 44.0% 5.40%
Combined Fixed Income 19.0% 1.50%
Real Estate 5.0% 4.50%
Private Equity 10.0% 8.50%
Real Return (Diversified
Inflation Strategies)
10.0% 3.50%
Absolute Return (Diversified
Hedge Funds)
10.0% 5.50%
Cash 2.0% (0.25%)
Total 100.0%
Discount rate - The discount rate used to measure the total pension liability was 7.50%. 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 7.50%. 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 6.50% 7.50% 8.50%
Non-hazardous’ proportionate share of
net pension liability
$17,289,774
$13,543,354
$10,334,878
Hazardous’ proportionate share of
net pension liability
$32,280,158
$25,218,200
$19,367,241
(Continued)
- 84 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2016
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, 2016. 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, 2016
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, 2016:
PFPF AEPF
Active participants 1 0
Beneficiaries 29 2
Retired participants 25 1
TOTAL PARTICIPANTS 55 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, 2016
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, 2015 $10,462,911 $ 6,408,638 $ 4,054,273
Service cost 7,183 - 7,183
Interest expense 686,614 - 686,614
Experience losses (gains) (111,824) - (111,824)
Change in assumptions 156,880 - 156,880
Contributions – City - 420,352 (420,352)
Contributions – Members - 4,494 (4,494)
Investment income - 165,489 (165,489)
Benefits paid (1,308,290) (1,308,290) -
Plan administrative expenses - (46,422) 46,422
Net change (569,437) (764,377) 194,940
Balance – June 30, 2016 $ 9,893,474 $ 5,644,261 $ 4,249,213
AEPF
Total
Pension
Liability
Plan
Net
Position
Net
Pension
Liability
(a) (b) (a) – (b)
Balance – June 30, 2015 $ 99,931 $ 20,743 $ 79,188
Service cost - - -
Interest expense 5,400 - 5,400
Experience losses (gains) 9,751 - 9,751
Change in assumptions - - -
Contributions – City - 6,599 (6,599)
Contributions – Members - - -
Investment income - 53 (53)
Benefits paid (19,856) (19,856) -
Plan administrative expenses - (7,539) 7,539
Net change (4,705) (20,743) 16,038
Balance – June 30, 2016 $ 95,226 $ - $ 95,226
For the year ended June 30, 2016, the City recognized pension expense of $336,043 and $23,363
related to PFPF and AEPF pension plans, respectively.
(Continued)
- 87 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2016
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, 2016, 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
318,626 217,620
2,969 -
Total $ 318,626 $ 217,620 $ 2,969 $ -
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 $ (19,892) $ 1,096
2017 (19,892) 1,096
2018 51,892 431
2019 51,892 74
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 7/1/16 7/1/16
Actuarial cost method Entry age normal Aggregate (1)
Amortization method Level dollar closed Level dollar closed
Remaining amortization period 17 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, 2016
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 6.75% (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) 6.75% Effective July 1, 2016
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, 2015 PFPF plan year, the assumed rate of
return was 7.00%. Beginning with the July 1, 2016 plan year, the assumed rate of return was
changed to 6.75%. For the AEPF July 1, 2015 and 2016 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, 2016 was as follows:
PFPF 6.75% - changed from 7.00% for the prior plan year.
AEPF 6.00%
(Continued)
- 89 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2016
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 $ 4,929,754 $ 4,249,213 $ 3,649,973
AEPF Net Pension Liability $ 99,993 $ 95,226 $ 90,920
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, 2016
PFPF AEPF Total
Assets
Cash and cash equivalents $ 20,819 $ - $ 20,819
Receivables:
Interest 6,292 - 6,292
Investments at fair value
Money market accounts 358,229 - 358,229
Common stock 2,317,643 - 2,317,643
Corporate bonds - - -
Mutual funds 2,941,319 - 2,941,319
Total assets 5,644,302 - 5,644,302
Liabilities
Vouchers and accounts payable 42 - 42
Net Position
Held in trust for pension benefits $ 5,644,260 $ - $ 5,644,260
(Continued)
- 90 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2016
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, 2016
PFPF AEPF Total
Additions:
Contributions
Employer $ 420,352 $ 6,599 $ 426,951
Plan members 4,494 - 4,494
Total contributions 424,846 6,599 431,445
Investments earnings:
Net change in fair value of investments 29,617 - 29,617
Interest and dividends 135,872 44 135,916
Net investment earnings 165,489 44 165,533
Total additions 590,335 6,643 596,978
Deductions:
Benefits 1,308,290 19,856 1,328,146
Administrative expenses 46,423 7,539 53,962
Total deductions 1,354,713 27,395 1,382,108
Change in net position (764,378) (20,752) (785,130)
Net position - beginning 6,408,638 20,752 6,429,390
Net position - ending $ 5,644,260 $ - $ 5,644,260
Note 5 - Component Unit Long-Term Liabilities:
Long-term liabilities of the discretely presented component units consist of the following at June 30, 2016:
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, 2016, are as follows:
.25%
Year Ending Service R & M
June 30 Principal Interest Fee Reserve Total
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 342,222 41,000 10,250 18,750 412,222
2022-2026 1,886,314 149,795 37,449 - 2,073,558
2027-2031 1,961,759 54,352 13,587 - 2,029,698
TOTALS $5,603,587 $444,744 $111,186 $ 93,750 $6,253,267
(Continued)
- 91 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2016
Note 6 - Appropriations Deficit:
No departments that adopted budgets annually had excess expenditures over appropriations for the fiscal
year ended June 30, 2016.
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, 2016, the most significant construction commitment was as follows:
Cumulative Estimated
Costs Incurred Total Costs
Riverfront Development – Phase 1b $ 3,833,074 $ 8,113,110
Olivet Church Road Improvement Project 4,183,308 6,380,137
$ 8,016,382 $14,493,247
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 $301,438 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 - 2014 $ - $ 35,888 $ 35,888 $ -
2014 - 2015 - 32,834 32,834 -
2015 - 2016 - 95,720 95,720 -
(Continued)
- 92 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2016
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, 2016, that amount
was $2,601,438. 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 $202,365 at June 30, 2016.
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
2013 - 2014 $ 84,602 $ 1,662,555 $1,589,216 $ 157,941
2014 - 2015 157,941 2,833,917 2,728,374 263,484
2015 - 2016 263,484 2,596,080 2,657,199 202,365
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 2016
totaled $746,754.
The following is an analysis of property leased under these leases at June 30, 2016:
Land $ 480,000
Buildings 3,422,261
Equipment 110,126
Total 4,012,387
Less: accumulated depreciation (1,163,928)
NET BOOK VALUE $2,848,459
(Continued)
- 93 -
CITY OF PADUCAH, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2016
Note 9 - Lease Agreements:
Operating Leases
Depreciation expense for the year ended June 30, 2016, on leased property was $81,466.
The following is a schedule of future minimum rental income from operating leases at June 30, 2016:
Lease
Income
2017 $ 746,749
2018 746,749
2019 746,749
2020 738,415
2021 490,343
2022-2024 867,000
TOTAL MINIMUM LEASE RECEIPTS $4,336,005
Note 11 – Subsequent Events:
Loan to Genova Products, Inc.
The Board of Commissioners approved a term loan with a multiple advance draw feature from the City of
Paducah to Genova Products, Inc. of up to $1,100,000 to be financed jointly with McCracken County.
There were no draws on this loan during the year ended June 30, 2016. The first draw was made in July,
2016.
CITY OF PADUCAH, KENTUCKY
REQUIRED SUPPLEMENTARY INFORMATION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2016
2016 2015 2014
Total pension liability
Service cost 7,183$ 5,576$ 4,871$
Interest 686,614 744,910 792,267
Changes in benefit terms - - -
Differences between expected and actual experience (111,824) (43,965) 150,977
Changes in assumptions 156,880 166,753 175,893
Benefit payments/refunds (1,308,290) (1,386,273) (1,445,080)
Net change in total pension liability (569,437) (512,999) (321,072)
Total pension liability - beginning 10,462,911 10,975,910 11,296,982
Total pension liability - ending (a)9,893,474$ 10,462,911$ 10,975,910$
Plan fiduciary net position
Contributions - employer 420,352$ 391,468$ 420,834$
Contributions - member 4,494 6,088 5,354
Net investment income 165,489 310,681 1,057,726
Benefit payments/refunds (1,308,290) (1,386,273) (1,445,080)
Administrative expenses (46,422) (49,115) (48,406)
Other - - -
Net change in plan fiduciary net position (764,377) (727,151) (9,572)
Plan fiduciary net position - beginning 6,408,638 7,135,789 7,145,361
Plan fiduciary net position - ending (b)5,644,261$ 6,408,638$ 7,135,789$
Net pension liability ending (a) - (b)4,249,213$ 4,054,273$ 3,840,121$
Plan fiduciary net position as a percentage of total pension liability 57% 61% 65%
Covered-employee payroll 56,175$ 76,102$ 66,928$
Net pension liability as a percentage of covered-employee payroll 7564% 5327% 5738%
(1)
-94-
Exhibit A-1
CITY OF PADUCAH, KENTUCKY
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF CHANGES IN THE POLICE AND FIREFIGHTERS' PENSION
Last Three 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.
2016 2015 2014
Total pension liability
Service cost -$ -$ -$
Interest 5,400 5,687 8,258
Changes in benefit terms - - -
Differences between expected and actual experience 9,751 9,391 (30,605)
Changes in assumptions - - -
Benefit payments/refunds (19,856) (19,856) (21,152)
Net change in total pension liability (4,705) (4,778) (43,499)
Total pension liability - beginning 99,931 104,709 148,208
Total pension liability - ending (a)95,226$ 99,931$ 104,709$
Plan fiduciary net position
Contributions - employer 6,599$ -$ -$
Contributions - member - - -
Net investment income 53 264 598
Benefit payments/refunds (19,856) (19,856) (21,152)
Administrative expenses (7,539) (7,533) (7,483)
Other - - -
Net change in plan fiduciary net position (20,743) (27,125) (28,037)
Plan fiduciary net position - beginning 20,743 47,868 75,905
Plan fiduciary net position - ending (b)-$ 20,743$ 47,868$
Net pension liability ending (a) - (b)95,226$ 79,188$ 56,841$
Plan fiduciary net position as a percentage of total pension liability 0.0% 20.8% 45.7%
Covered-employee payroll n/a n/a n/a
Net pension liability as a percentage of covered-employee payroll n/a n/a n/a
(1)
-95-
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 Three 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.
2016 2015 2014
Actuarially determined contribution 416,844$ 391,468$ 421,933$
Contributions in relation to the actuarially
determined contribution 420,352 391,468 420,834
Contribution deficiency (excess) (3,508)$ -$ 1,099$
Covered-employee payroll 56,175$ 76,102$ 66,928$
Contributions as a percentage of covered-employee payroll 748% 514% 629%
2016 2015 2014
Annual money-weighted rate of return, net of investment expense 2.78% 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 Three Fiscal Years Ending June 30 (1)
Schedule of Contributions
Schedule of Investment Returns
-96-
Schedule is intended to show information for 10 years. Additional years of supplementary information will be provided
as this information becomes available.
2016 2015 2014
Actuarially determined contribution 19,856$ 15,734$ 10,779$
Contributions in relation to the actuarially
determined contribution - - -
Contribution deficiency (excess) 19,856$ 15,734$ 10,779$
Covered-employee payroll n/a n/a n/a
Contributions as a percentage of covered-employee payroll n/a n/a n/a
2016 2015 2014
Annual money-weighted rate of return, net of investment expense 0.47% 0.75% 0.97%
(1)
Last Three 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
-97-
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
2016 0.3150% 13,543,354 7,349,249 184.2821% 59.9684%
2015 0.3261% 10,579,475$ 7,477,608$ 141.4821% 66.8010%
2014 0.3261% 11,970,884$ 7,466,979$ 160.3176% 61.2209%
CERS Hazardous
2016 1.6428% 25,218,200$ 8,402,943$ 300.1115% 57.5152%
2015 1.6323% 19,617,569$ 8,267,598$ 237.2826% 63.4574%
2014 1.6323% 21,907,757$ 8,016,505$ 273.2831% 65.7178%
*The amounts presented were determined as of the measurement date June 30 of the prior year.
*
Exhibit A-5
-98-
CITY OF PADUCAH, KENTUCKY
SCHEDULE OF CITY'S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY
COUNTY EMPLOYEES' RETIREMENT SYSTEM
LAST THREE 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
2016 940,471$ 940,471$ -$ 7,349,249$ 12.7968%
2015 1,095,109$ 1,095,109$ -$ 7,477,608$ 14.6452%
2014 977,540$ 977,540$ -$ 7,466,979$ 13.0915%
CERS Hazardous
2016 1,775,349$ 1,775,349$ -$ 8,402,943$ 21.1277%
2015 1,727,101$ 1,727,101$ -$ 8,267,598$ 20.8900%
2014 1,661,821$ 1,661,821$ -$ 8,016,505$ 20.7300%
*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.
The discount rate changed from 7.75% to 7.50% from the prior measurement date.
The inflation rate changed from 3.50% to 3.25% from the prior measurment date.
Exhibit A-6
-99-
Notes to Required Supplementary Information
For the Year Ended June 30, 2016
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 THREE FISCAL YEARS*
REQUIRED SUPPLEMENTARY INFORMATION
CITY OF PADUCAH, KENTUCKY
SUPPLEMENTARY INFORMATION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2016
Exhibit B-1
Variance with
Final Budget
Final Positive
Budget (Negative)
Revenues:
Grants 7,509,610$ 7,509,619$ 9$
Miscellaneous 416,795 416,799 4
Total revenues 7,926,405 7,926,418 13
Expenditures:
Capital outlay 13,305,945 13,305,920 25
Excess (deficiency) of revenues over
expenditures (5,379,540) (5,379,502) 38
Other Financing Sources (Uses):
Operating transfers in 5,795,310 5,795,359 49
Operating transfers out (106,690) (106,687) (3)
Total other financing sources 5,688,620 5,688,672 46
Net change in fund balance 309,080$ 309,170 84$
Fund balance, July 1, 2015 5,493,894
FUND BALANCE, JUNE 30, 2016 5,803,064$
See auditors report on pages 11-12.
-100-
Actual
CITY OF PADUCAH, KENTUCKY
DETAIL SCHEDULE OF REVENUES, EXPENDITURES, AND
GENERAL CAPITAL IMPROVEMENTS FUND
FOR THE YEAR ENDED JUNE 30, 2016
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
Exhibit B-2
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
Revenues:
Intergovernmental 635,705$ 635,705$ -$
Property upkeep, rentals, sales and other 289,000 289,005 5
Total revenues 924,705 924,710 5
Expenditures:
Debt service:
Principal requirement 2,137,770 2,133,570 4,200
Interest and fiscal requirement 845,630 849,798 (4,168)
Total expenditures 2,983,400 2,983,368 32
Excess (deficiency) of revenues over
expenditures (2,058,695) (2,058,658) 37
Other Financing Sources (Uses):
Operating transfers in 2,157,160 2,157,163 3
Total other financing sources 2,157,160 2,157,163 3
Net change in fund balance 98,465$ 98,505 40$
Fund balance, July 1, 2015 652,319
FUND BALANCE, JUNE 30, 2016 750,824$
See auditors report on pages 11-12.
-101-
FOR THE YEAR ENDED JUNE 30, 2016
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, 2016
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 1,307,207$ 175,938$ 200,423$
Receivables, net:
Accounts 45,781 188,717 -
TOTAL ASSETS 1,352,988$ 364,655$ 200,423$
Liabilities:
Voucher and accounts payable 204,199$ 3,604$ 53,205$
Accrued payroll and payroll taxes - 62,073 -
Total liabilities 204,199 65,677 53,205
Fund Balances:
Restricted for:
Highway and streets 1,148,789 - -
Public safety - - 147,218
Capital Improvements - - -
Assigned for:
Public safety - 298,978 -
Total fund balances 1,148,789 298,978 147,218
TOTAL LIABILITIES AND
FUND BALANCES 1,352,988$ 364,655$ 200,423$
See auditors report on pages 11-12.
LIABILITIES
Service Fund
Communication
CITY OF PADUCAH, KENTUCKY
COMBINING BALANCE SHEET
ASSETS
-102-
Emergency
AND
NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2016
FUND BALANCES
Municipal
Aid Program
Special Revenue Funds
CDBG
Grant Bond
Fund Fund
-$ -$ 1,683,568$
- - 234,498
-$ -$ 1,918,066$
-$ -$ 261,008$
- - 62,073
- - 323,081
- - 1,148,789
- - 147,218
- - -
- - 298,978
- - 1,594,985
-$ -$ 1,918,066$
-103-
Governmental
Funds
Total Nonmajor
Special Revenue Funds
Exhibit B-4
Court
Awards
Revenues: Fund
Taxes -$ 381,131$ -$
Charges for services - 237,636 -
Intergovernmental 497,147 - -
Grants - - 29,232
Interest 7,133 785 1,147
Miscellaneous - 374,125 -
Total revenues 504,280 993,677 30,379
Expenditures:
Current operations:
Public safety - 1,463,818 28,018
Public service 1,338,664 - -
Planning and development - - -
Total expenditures 1,338,664 1,463,818 28,018
Excess (deficiency) of revenues
over expenditures (834,384) (470,141) 2,361
Other Financing Sources (Uses):
Transfers in 825,000 470,142 -
Transfers out - - -
Total other financing sources (uses) 825,000 470,142 -
Net change in fund balances (9,384) 1 2,361
Fund balances, July 1, 2015 1,158,173 298,977 144,857
FUND BALANCES, JUNE 30, 2016 1,148,789$ 298,978$ 147,218$
See auditors report on pages 11-12.
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
Special Revenue Funds
Communication
-104-
Aid Program
Municipal
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2016
Emergency
Service Fund
CDBG
Grant Bond
Fund Fund
-$ -$ 381,131$
- - 237,636
- - 497,147
737,500 - 766,732
- 5,315 14,380
- - 374,125
737,500 5,315 2,271,151
- - 1,491,836
- - 1,338,664
237,500 - 237,500
237,500 - 3,068,000
500,000 5,315 (796,849)
- - 1,295,142
(500,000) (1,274,360) (1,774,360)
(500,000) (1,274,360) (479,218)
- (1,269,045) (1,276,067)
- 1,269,045 2,871,052
-$ -$ 1,594,985$
Special Revenue Funds
Governmental
-105-
Funds
Total Nonmajor
Exhibit B-5
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
Revenues:
Intergovernmental 497,145$ 497,147$ 2$
Interest 7,130 7,133 3
Total revenues 504,275 504,280 5
Expenditures:
Public service 1,338,670 1,338,664 6
Excess (deficiency) of revenues over
expenditures (834,395) (834,384) 11
Other Financing Sources (Uses):
Operating transfers in 825,000 825,000 -
Operating transfers out - - -
Total other financing sources (uses) 825,000 825,000 -
Net change in fund balance (9,395) (9,384) 11
Fund balance, July 1, 2015 1,158,173 1,158,173 -
FUND BALANCE, JUNE 30, 2016 1,148,778$ 1,148,789$ 11$
See auditors report on pages 11-12.
-106-
FOR THE YEAR ENDED JUNE 30, 2016
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 381,130$ 381,131$ 1$
Telephone surcharges 237,635 237,636 1
Interest 785 785 -
Miscellaneous 374,120 374,125 5
Total revenues 993,670 993,677 7
Expenditures:
Public safety 1,464,120 1,463,818 302
Excess (deficiency) of revenues over
expenditures (470,450) (470,141) 309
Other Financing Sources (Uses):
Operating transfers in 470,140 470,142 2
Operating transfers out - - -
Total other financing sources (uses) 470,140 470,142 2
Net change in fund balance (310)$ 1 311$
Fund balance, July 1, 2015 298,977
FUND BALANCE, JUNE 30, 2016 298,978$
See auditors report on pages 11-12.
-107-
FOR THE YEAR ENDED JUNE 30, 2016
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 29,230$ 29,232$ 2$
Interest 1,145 1,147 2
Total revenues 30,375 30,379 4
Expenditures:
Public safety 28,020 28,018 2
Excess (deficiency) of revenues over
expenditures 2,355 2,361 6
Net change in fund balance 2,355$ 2,361 6$
Fund balance, July 1, 2015 144,857
FUND BALANCE, JUNE 30, 2016 147,218$
See auditors report on pages 11-12.
-108-
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, 2016
Exhibit B-8
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
Revenues:
Grants 737,500$ 737,500$ -$
Total revenues 737,500 737,500 -
Expenditures:
Planning and development 237,500 237,500 -
Excess (deficiency) of revenues over
expenditures 500,000 500,000 -
Other Financing Sources (Uses):
Operating transfers in - - -
Operating transfers out (500,000) (500,000) -
Total other financing sources (uses) (500,000) (500,000) -
Net change in fund balance -$ - -$
Fund balance, July 1, 2015 -
FUND BALANCE, JUNE 30, 2016 -$
See auditors report on pages 11-12.
-109-
FOR THE YEAR ENDED JUNE 30, 2016
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 -$ -$ -$
Interest 5,315 5,315 -
Total revenues 5,315 5,315 -
Expenditures:
Debt issuance costs - - -
Total expenditures - - -
Excess (deficiency) of revenues over
expenditures 5,315 5,315 -
Other Financing Sources (Uses):
Proceeds of debt - - -
Payment to refunded bond escrow agent - - -
Discount on debt issued - - -
Total other financing sources (uses) (1,274,360) (1,274,360) -
Net change in fund balance (1,269,045)$ (1,269,045) -$
Fund balance, July 1, 2015 1,269,045
FUND BALANCE, JUNE 30, 2016 -$
See auditors report on pages 11-12.
-110-
FOR THE YEAR ENDED JUNE 30, 2016
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, 2016
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 336,908$ 78,000$ 414,908$
Total current assets 336,908 78,000 414,908
Noncurrent Assets:
Net depreciable capital assets 566 129,532 130,098
Total assets 337,474 207,532 545,006
Deferred Outflows of Resources:
Deferred pension related outflows 62,964 - 62,964
Current Liabilities:
Voucher and accounts payable 27,933 6,087 34,020
Accrued compensated absences 1,962 - 1,962
Due to other funds 31,729 - 31,729
Total current liabilities 61,624 6,087 67,711
Noncurrent Liabilities:
Pensions obligation 264,500 - 264,500
Accrued compensated absences 17,654 - 17,654
Total noncurrent liabilities 282,154 - 282,154
Total liabilities 343,778 6,087 349,865
Deferred Inflows of Resources
Deferred pension related inflows 17,847 - 17,847
Net invested in capital assets 566 129,532 130,098
Restricted - Housing 38,247 - 38,247
Unrestricted - 71,913 71,913
TOTAL NET POSITION 38,813$ 201,445$ 240,258$
See auditors report on pages 11-12.
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF NET POSITION
NONMAJOR PROPRIETARY FUNDS
JUNE 30, 2016
ASSETS
LIABILITIES
NET POSITION
-111-
Total Nonmajor
Enterprise
Funds
Section
Eight
Housing
Exhibit C-2
Civic
Center
Operating Revenues: Fund
Charges for services -$ 40,148$ 40,148$
Miscellaneous 1,500 - 1,500
Total operating income 1,500 40,148 41,648
Operating Expenses:
Cost of sales and service 1,872,791 64,436 1,937,227
Depreciation and amortization 1,285 10,021 11,306
Total operating expenses 1,874,076 74,457 1,948,533
Operating income (loss) (1,872,576) (34,309) (1,906,885)
Non-Operating Revenues (Expenses):
Grants - program purpose 1,785,479 - 1,785,479
Interest and investment income 47 - 47
Total nonoperating revenues
(expenses) 1,785,526 - 1,785,526
Income (loss) before contributions and
transfers (87,050) (34,309) (121,359)
Contributions and Operating Transfers:
Transfers in - 102,418 102,418
Transfers out - - -
Total contributions and operating transfers - 102,418 102,418
Change in net position (87,050) 68,109 (18,941)
Net position - beginning 125,863 133,336 259,199
Net position - ending 38,813$ 201,445$ 240,258$
See auditors report on pages 11-12.
COMBINING STATEMENT OF REVENUES, EXPENSES
CITY OF PADUCAH, KENTUCKY
Total Nonmajor
Enterprise
-112-
FOR THE YEAR ENDED JUNE 30, 2016
NONMAJOR PROPRIETARY FUNDS
AND CHANGES IN NET POSITION
Funds
Section
Eight
Housing
Exhibit C-3
Civic
Center
Cash Flows from Operating Activities: Fund
Cash received from customers -$ 40,148$ 40,148$
Payments to employees (181,319) - (181,319)
Payments to internal service funds - (2,301) (2,301)
Other receipts 1,500 - 1,500
Housing assistance and other payments (1,707,657) (62,265) (1,769,922)
Net cash provided (used) by operating activities (1,887,476) (24,418) (1,911,894)
Cash Flows from Noncapital
Financing Activities:
Grants - program purpose 1,785,479 - 1,785,479
Transfers from other funds - 102,418 102,418
Transfers to other funds - - -
Net cash provided (used) by noncapital
financing activities 1,785,479 102,418 1,887,897
Cash Flows from Investing Activities:
Interest on cash and investments 47 - 47
Net increase (decrease) in cash and cash
equivalents (101,950) 78,000 (23,950)
Cash and cash equivalents, July 1, 2015 438,858 - 438,858
CASH AND CASH EQUIVALENTS,
JUNE 30, 2016 336,908$ 78,000$ 414,908$
Reconciliation of Operating Income (Loss) to
Net Cash Provided by Operating Activities:
Operating income (loss) (1,872,576)$ (34,309)$ (1,906,885)$
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 18,619 - 18,619
Accounts payable and accrued expenses (34,804) (130) (34,934)
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES (1,887,476)$ (24,418)$ (1,911,894)$
See auditors report on pages 11-12.
Funds
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF CASH FLOWS
NONMAJOR PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2016
-113-
Section
Eight
Housing
Total Nonmajor
Enterprise
CITY OF PADUCAH, KENTUCKY
SUPPLEMENTARY INFORMATION
INTERNAL SERVICE FUNDS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2016
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 303$ 3,239,796$ 406,270$ 2,002,521$ 5,648,890$
Investments - - - - -
Receivables, net - 200,075 641 43,769 244,485
Due from other funds - 200,000 - - 200,000
Inventories 56,116 - - - 56,116
Total current assets 56,419 3,639,871 406,911 2,046,290 6,149,491
Noncurrent Assets:
Net depreciable capital assets 30,412 3,853,898 - - 3,884,310
Total assets 86,831 7,493,769 406,911 2,046,290 10,033,801
Deferred Outflows of Resources:
Deferred pension related outflows 125,310 - - - 125,310
Current Liabilities:
Voucher and accounts payable 15,860 829 11,172 202,365 230,226
Accrued payroll and payroll taxes 22,414 - - - 22,414
Accrued compensated absences 35,704 - - - 35,704
Deferred revenue - - - 23,865 23,865
Total current liabilities 73,978 829 11,172 226,230 312,209
Noncurrent Liabilities:
Pensions obligation 479,013 - - - 479,013
Accrued compensated absences 21,430 - - - 21,430
Total noncurrent liabilities 500,443 - - - 500,443
Total liabilities 574,421 829 11,172 226,230 812,652
Deferred Inflows of Resources
Deferred pension related inflows 44,484 - - - 44,484
Net invested in capital assets 30,412 3,853,898 - - 3,884,310
Unrestricted (437,176) 3,639,042 395,739 1,820,060 5,417,665
TOTAL NET POSITION (406,764)$ 7,492,940$ 395,739$ 1,820,060$ 9,301,975$
See auditors report on pages 11-12.
-114-
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF NET POSITION
INTERNAL SERVICE FUNDS
JUNE 30, 2016
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 346,739$ 803,797$ 1,098,638$ 3,657,487$ 5,906,661$
Charges for services - external - - - 280,639 280,639
Total operating revenues 346,739 803,797 1,098,638 3,938,126 6,187,300
Operating Expenses:
Vehicle maintenance 506,743 1,393 - - 508,136
Administrative - 39,180 - 539,772 578,952
Insurance - - 1,140,990 3,277,318 4,418,308
Depreciation 4,861 730,134 - - 734,995
Total operating expenses 511,604 770,707 1,140,990 3,817,090 6,240,391
Operating income (loss) (164,865) 33,090 (42,352) 121,036 (53,091)
Nonoperating Revenues and (Expenses):
Interest and investment income 15 21,285 - - 21,300
Gain (loss) on disposal of property
and equipment 3,440 184,882 - - 188,322
Total nonoperating revenues
(expenses) 3,455 206,167 - - 209,622
Income (loss) before transfers (161,410) 239,257 (42,352) 121,036 156,531
Contributions and Transfers:
Transfers in 158,159 - 95,720 - 253,879
Transfers out - - - - -
Total contributions and operating transfers 158,159 - 95,720 - 253,879
Change in net position (3,251) 239,257 53,368 121,036 410,410
Net position - beginning (403,513) 7,253,683 342,371 1,699,024 8,891,565
Net position - ending (406,764)$ 7,492,940$ 395,739$ 1,820,060$ 9,301,975$
See auditors report on pages 11-12.
-115-
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, 2016
Exhibit D-3
Health
Fleet Lease Insurance Insurance Combined
Cash Flows from Operating Activities: Trust Fund Fund Total
Receipts from other funds for services 346,923$ 906,972$ 1,097,997$ 3,943,672$ 6,295,564$
Payments to suppliers (190,725) - - - (190,725)
Payments to employees (311,735) - - - (311,735)
Claims paid - - - (3,338,437) (3,338,437)
Other payments - (39,744) (1,133,443) (539,772) (1,712,959)
Net cash provided (used) by operating activities (155,537) 867,228 (35,446) 65,463 741,708
Cash Flows from Noncapital Financing
Activities:
Transfers from other funds 158,159 - 95,720 - 253,879
Transfers to other funds - - - - -
Net cash provided (used) by noncapital
financing activities 158,159 - 95,720 - 253,879
Cash Flows from Capital and Related
Financing Activities:
Proceeds from sale of capital assets 3,440 205,701 - - 209,141
Purchase of capital assets (25,650) (1,437,085) - - (1,462,735)
Net cash used by capital and related financing (22,210) (1,231,384) - - (1,253,594)
Cash Flows from Investing Activities:
Interest and dividends 15 21,285 - - 21,300
Net cash used by investing activities 15 21,285 - - 21,300
Net increase (decrease) in cash
and cash equivalents (19,573) (342,871) 60,274 65,463 (236,707)
Cash and cash equivalents, July 1, 2015 19,876 3,582,667 345,996 1,937,058 5,885,597
CASH AND CASH EQUIVALENTS,
JUNE 30, 2016 303$ 3,239,796$ 406,270$ 2,002,521$ 5,648,890$
Reconciliation of Operating Income (Loss) to
Net Cash Provided by Operating Activities:
Operating income (loss) (164,865)$ 33,090$ (42,352)$ 121,036$ (53,091)$
Adjustments to reconcile operating
income (loss) to net cash provided
(used) by operating activities:
Depreciation and amortization 4,861 730,134 - - 734,995
Change in assets and liabilities:
Receivables 184 3,175 (641) 6,153 8,871
Inventories 7,999 - - - 7,999
Due form other funds - 100,000 - - 100,000
Pension obligation and related deferrals (5,327) - - - (5,327)
Accounts payable and accrued expenses 1,611 829 7,547 (61,726) (51,739)
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES (155,537)$ 867,228$ (35,446)$ 65,463$ 741,708$
See auditors report on pages 11-12.
-116-
Fleet
Maintenance
CITY OF PADUCAH, KENTUCKY
COMBINING STATEMENT OF CASH FLOWS
INTERNAL SERVICE FUNDS
FOR THE YEAR ENDED JUNE 30, 2016
CITY OF PADUCAH, KENTUCKY
SUPPLEMENTARY INFORMATION
FIDUCIARY FUNDS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2016
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 108,472$
Investments at fair value
Money market funds -
Mutual funds 998,298
Total assets 1,106,770
Accounts payable -
Held in trust for other purposes 1,106,770$
See auditors report on pages 11-12.
STATEMENT OF NET POSITION
CITY OF PADUCAH, KENTUCKY
-117-
ASSETS
LIABILITIES
NET POSITION
JUNE 30, 2016
FIDUCIARY FUNDS - PRIVATE-PURPOSE TRUST FUNDS
Exhibit E-2
Cemetery
and
Park
Additions:Trusts
Contributions:
Intergovernmental revenues -$
Private donations 2,540
Total contributions 2,540
Investment earnings:
Change in fair value of investments (89,646)
Interest and dividends 92,271
Net investment earnings 2,625
Interfund transfers -
Total additions 5,165
Deductions:
Capital outlay 54,685
Administrative expenses 12,968
Total deductions 67,653
Change in net position (62,488)
Net position - beginning 1,169,258
Net position - ending 1,106,770$
See auditors report on pages 11-12.
STATEMENT OF CHANGES IN NET POSITION
CITY OF PADUCAH, KENTUCKY
-118-
FOR THE YEAR ENDED JUNE 30, 2016
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 531,828$ 12,914,403$ 12,926,289$ 519,942$
Liabilities:
Payroll taxes and withholdings
payable 531,828$ 12,914,403$ 12,926,289$ 519,942$
See auditors report on pages 11-12.
CITY OF PADUCAH, KENTUCKY
AGENCY FUND
IN ASSETS AND LIABILITIES
STATEMENT OF CHANGES
-119-
FOR THE YEAR ENDED JUNE 30, 2016
Balance Balance
July 1, 2015 June 30, 2016
CITY OF PADUCAH, KENTUCKY
STATISTICAL SECTION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2016
STATISTICAL SECTION
Contents Page
Financial Trends 120-124
Revenue Capacity 125-130
Debt Capacity 131-134
Economic and Demographic Information 135-136
Operating Information 137-139
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.
20162015 (1) 2014201320122011 2010 (2)200920082007Governmental activities:Net Invested in Capital Assets46,389,685$ 39,349,789$ 39,844,772$ 33,365,112$ 31,957,381$ 32,905,977$ 31,136,514$ 31,215,252$ 31,766,783$ 32,557,572$ Restricted for:Program purposes147,218 144,857 205,979 284,760 897,942 1,264,986 1,100,696 2,183,559 1,782,251 1,904,321 Capital projects1,148,789 2,427,218 2,168,201 1,301,421 4,105,639 5,987,399 5,077,026 4,363,913 5,028,420 4,618,923 Unrestricted(23,323,077) (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 Total governmental activities net position24,362,615$ 19,712,327$ 55,601,018$ 48,490,497$ 42,874,959$ 44,387,863$ 45,479,337$ 46,383,801$ 48,010,217$ 48,138,457$ Business-type activities:Net Invested in Capital Assets1,678,728 1,133,226 1,210,415 1,232,735 1,308,574 1,334,230 1,652,961 1,721,419 1,863,975 1,491,523 Restricted for:Program purposes38,247 124,012 437,483 385,885 732,817 999,885 620,800 369,368 579,460 - Unrestricted3,194,228 3,033,822 3,837,034 3,428,267 3,246,320 3,004,783 1,816,705 1,036,093 (19,965) (147,286) Total business-type activities net postion4,911,203$ 4,291,060$ 5,484,932$ 5,046,887$ 5,287,711$ 5,338,898$ 4,090,466$ 3,126,880$ 2,423,470$ 1,344,237$ Primary government:Net Invested in Capital Assets48,068,413 40,483,015 41,055,187 34,597,847 33,265,955 34,240,207 32,789,475 32,936,671 33,630,758 34,049,095 Restricted for:Program purposes185,465 268,869 643,462 670,645 1,630,759 2,264,871 1,721,496 2,552,927 2,361,711 1,904,321 Capital projects1,148,789 2,427,218 2,168,201 1,301,421 4,105,639 5,987,399 5,077,026 4,363,913 5,028,420 4,618,923 Unrestricted(20,128,849) (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 Total primary government net position29,273,818$ 24,003,387$ 61,085,950$ 53,537,384$ 48,162,670$ 49,726,761$ 49,569,803$ 49,510,681$ 50,433,687$ 49,482,694$ (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)-120-
Pages 1 of 22016 2015 (1) 2014 2013 2012 2011 2010 (3) 2009 2008 (2) 2007ExpensesGovernmental activities:General government 9,777,876$ 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$ Public safety 20,503,784 17,974,548 18,439,670 18,204,945 17,045,731 16,993,228 16,239,042 15,734,557 15,938,831 15,182,704 Public service 10,266,856 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 Parks and recreation 3,052,360 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 Planning and development 911,830 1,000,020 1,805,379 1,463,659 1,192,952 1,212,103 970,022 708,827 282,042 1,891,725 Interest on long-term debt 900,593 850,827 1,084,016 1,066,876 1,059,537 1,363,580 1,099,450 1,029,888 1,066,067 1,134,898 Total governmental activities expenses 45,413,299 39,293,651 39,067,751 37,456,789 41,053,917 39,432,102 38,394,895 43,963,262 38,827,250 37,168,600 Business-type activities:Solid Waste 3,815,476 3,843,081 3,985,233 3,967,490 3,900,264 3,832,130 3,797,097 4,037,845 4,086,747 4,079,684 Section Eight Housing 1,874,074 1,819,328 1,855,869 2,032,843 1,921,004 1,956,728 2,061,370 2,154,360 1,949,899 - Civic Center 74,457 98,318 81,982 78,000 71,069 76,546 69,537 75,692 84,908 54,562 TISA - - - - 173,708 183,546 206,798 162,848 156,388 267,192 Total business-type activities expenses 5,764,007 5,760,727 5,923,084 6,078,333 6,066,045 6,048,950 6,134,802 6,430,745 6,277,942 4,401,438 Total primary government expenses 51,177,306$ 45,054,378$ 44,990,835$ 43,535,122$ 47,119,962$ 45,481,052$ 44,529,697$ 50,394,007$ 45,105,192$ 41,570,038$ Program RevenuesGovernmental activities:Charges for services:General government 1,128,785$ 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$ Public safety 237,641 237,222 264,143 354,829 509,297 790,650 484,754 602,262 268,839 1,024,610 Public service 1,065,010 945,471 960,271 963,893 1,032,953 1,205,666 1,197,194 1,220,999 1,111,188 1,150,507 Parks and recreation 132,909 108,307 105,248 106,183 97,896 129,790 152,890 180,420 124,606 122,929 Planning and development - - - - - - - 1,600 30,627 10,810 Operating grants and contributions 6,179,709 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 Capital grants and contributions 4,139,036 899,522 4,136,749 2,165,548 533,169 1,767,093 1,390,848 4,889,520 1,297,900 3,681,490 Total governmental activities program revenues 12,883,090 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 Business-type activities:Solid Waste 4,520,084$ 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$ Section Eight Housing - - - - - - - - - - Civic Center 40,148 43,486 41,266 38,265 34,038 33,766 32,455 38,577 32,932 31,372 TISA99,603 138,797 148,158 148,291 143,833 193,713 Operating grants and contributions 1,845,549 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 Total business-type activities program revenues 6,405,781 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 Total primary government program revenues 19,288,871$ 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$ Fiscal Year-121-TABLE 2CITY OF PADUCAH, KENTUCKYCHANGES IN NET POSITIONLast Ten Fiscal Years (accrual basis of accounting)
Pages 2 of 22016 2015 (1) 2014 2013 2012 2011 2010 (3) 2009 2008 (2) 2007Net (Expense)/RevenueGovernmental activities(32,530,209)$ (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)$ Business-type activities641,774 480,988 485,236 59,230 168,184 1,008,951 849,857 399,050 (140,794) (224,244) Total primary government net (expense) (31,888,435)$ (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)$ General Revenues and Other Changesin Net PositionGovernmental activities:Taxes and licenses:Property taxes, levied for general purpose4,943,962 4,726,244 4,622,292 4,502,276 4,267,812 4,402,226 4,207,736 3,986,760$ 4,221,957 4,122,538$ Insurance premium tax 4,170,381 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 Gross receipts license tax 4,711,708 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 Employee license tax 20,130,249 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 Other taxes 2,759,902 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 Intergovernmental revenue - - - - - - - - 1,401,400 1,243,028 Unrestricted investment earnings 137,224 176,229 232,204 211,306 203,261 264,913 172,213 336,960 540,620 639,702 Miscellaneous 189,489 16,870 (482,137) 300,378 36,718 62,539 64,620 68,530 119,200 48,656 Insurance recoveries - - - - 27,448 410,462 - - - - Litigation settlement - - - - - (1,482,743) - - - - Transfers in/out 137,582 194,014 212,128 485,138 270,620 (125,772) (78,893) (110,838) (96,609) (58,175) Total governmental activities 37,180,497 35,355,356 33,760,448 34,889,081 33,663,606 31,309,295 31,620,788 32,018,533 33,728,092 32,698,545 Business-type activities:Unrestricted investment earnings 30,302 39,565 48,255 49,382 48,806 46,052 33,724 52,961 73,985 83,854 Miscellaneous 85,649 8,339 116,682 135,702 2,443 67,657 1,112 98,369 127,131 16,641 Transfers (137,582) (194,014) (212,128) (485,138) (270,620) 125,772 78,893 110,838 96,609 58,176 Total business-type activities (21,631) (146,110) (47,191) (300,054) (219,371) 239,481 113,729 262,168 297,725 158,671 Change in Net PositionGovernmental activities:4,650,288 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 Business-type activities:620,143 334,878 438,045 (240,824) (51,187) 1,248,432 963,586 661,218 156,931 (65,573) Total primary government 5,270,431$ 2,133,581$ 7,689,420$ 5,374,714$ (1,564,091)$ 156,958$ 221,555$ (965,198)$ 647,137$ 5,981,980$ (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-122-Fiscal YearCITY OF PADUCAH, KENTUCKYLast Ten Fiscal Years TABLE 2
2016 2015 2014 2013 2012 2011 2010 (2) 2009 2008 (1) 2007General FundUnassigned 13,198,126$ 12,549,232$ 12,694,610$ 12,311,565$ 11,321,438$ 10,940,121$ 10,208,678$ 10,311,490$ 9,416,427$ 9,976,079$ Total general fund 13,198,126$ 12,549,232$ 12,694,610$ 12,311,565$ 11,321,438$ 10,940,121$ 10,208,678$ 10,311,490$ 9,416,427$ 9,976,079$ All Other Governmental FundsNonspendable:Inventory 623,735$ 828,419$ 1,497,659$ 1,336,234$ 1,098,304$ 1,253,953$ 1,416,130$ 2,019,630$ 1,208,749$ 808,216$ Restricted for:Program purposes 1,296,007 1,303,030 205,979 284,760 1,236,780 - - - - - Capital improvements - 1,269,045 2,168,201 1,301,421 286,276 - - - - - Committed for:Capital improvements 2,018,581 1,814,834 1,758,934 2,589,099 2,631,233 2,587,012 2,844,706 2,618,147 2,081,280 1,692,872 Assigned for:Program purposes 1,049,802 951,296 802,692 752,691 472,235 683,578 1,402,731 1,634,547 1,193,968 1,543,547 Capital improvements 5,179,330 4,665,475 3,206,412 3,055,250 1,487,938 2,133,786 5,151,791 1,745,766 2,947,140 2,926,051 Total all other governmental funds 10,167,455$ 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$ (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-123-Fiscal YearTABLE 3CITY OF PADUCAH, KENTUCKYFund Balances, Governmental FundsLast Ten Fiscal Years (modified accrual basis of accounting)
2016 2015 2014 2013 2012 2011 2010 2009 2008 2007Revenues:Taxes 6,976,933$ 6,987,173$ 6,713,889$ 6,583,690$ 6,343,608$ 6,223,511$ 6,326,740$ 5,867,782$ 6,139,164$ 6,044,069$ Licenses 29,606,552 27,804,759 26,987,110 27,197,290 26,753,432 25,704,849 24,979,768 25,411,112 25,924,562 25,140,615 Charges for services 884,259 848,971 851,080 815,791 817,607 811,590 846,087 866,688 835,105 783,018 Intergovernmental 1,132,852 1,244,417 2,624,363 1,240,312 1,191,835 1,148,362 1,091,324 1,086,377 1,565,348 1,676,783 Grants 8,892,529 2,496,329 5,923,651 3,737,402 1,699,399 2,992,519 2,062,554 5,405,810 1,673,936 6,089,711 Interest 115,922 148,411 199,583 175,371 162,580 205,837 121,246 225,251 419,103 540,204 Other 2,085,412 2,408,193 3,271,860 2,743,698 1,902,075 1,790,890 2,653,382 2,250,344 1,944,310 1,832,161 Total revenues 49,694,459 41,938,253 46,571,536 42,493,554 38,870,536 38,877,558 38,081,101 41,113,364 38,501,528 42,106,561 Expenditures:General government 4,526,828 4,484,105 4,311,103 4,481,485 5,117,194 5,151,370 5,277,916 4,726,435 5,051,374 4,763,839 Public safety 18,435,365 18,524,763 18,475,471 18,174,349 18,479,428 16,854,136 15,999,437 15,599,613 15,696,728 14,759,735 Public service 6,106,773 6,165,664 6,323,481 5,710,018 5,596,702 6,446,503 5,984,115 7,855,846 7,935,188 7,226,542 Parks and recreation 2,929,404 2,842,460 2,602,348 2,426,234 2,677,781 2,781,663 2,582,382 1,490,732 1,298,329 1,192,727 Planning and development 910,379 950,297 2,086,527 1,776,897 2,372,314 1,842,474 2,471,869 1,000,202 481,523 1,784,685 Other 441,742 247,878 640,452 766,847 516,534 486,239 847,188 514,488 520,611 526,238 Capital outlay 13,305,919 4,708,663 11,926,435 4,324,821 2,104,993 5,121,682 8,324,312 8,580,910 4,826,983 6,504,491 Debt service:Principal requirement 2,137,759 2,158,385 1,748,233 1,698,468 1,434,246 2,233,588 1,020,585 830,682 880,887 782,870 Debt issuance costs - 51,461 109,292 - - - - - - - Interest and fiscal requirement 845,609 817,191 1,086,866 1,089,447 1,114,852 1,519,329 1,077,128 1,003,439 1,051,008 1,108,385 Total expenditures 49,639,778 40,950,867 49,310,208 40,448,566 39,414,044 42,436,984 43,584,932 41,602,347 37,742,631 38,649,512 Other Financing Sources (Uses):Bonds issued - 4,225,000 9,055,000 - - - 6,645,000 1,718,605 - - 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 in 10,034,851 7,785,410 9,148,761 7,462,944 5,888,847 8,455,433 9,722,852 5,928,413 6,241,886 5,209,977 Transfers out (10,105,282) (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) Total other financing sources (uses) (70,431) 56,085 3,544,349 1,051,828 587,087 1,026,015 8,360,720 1,970,999 (472,652) (100,078) Net change in fund balances (15,750)$ 1,043,471$ 805,677$ 3,096,816$ 43,579$ (2,533,411)$ 2,856,889$ 1,482,016$ 286,245$ 3,356,971$ Capital outlay (1) 9,718,561$ 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$ Debt service as a percentageof noncapital expenditures 7.47% 7.54% 7.37% 7.66% 6.84% 9.98% 6.02% 4.73% 5.54% 5.56%(1) Capital outlay is reported on the Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities.-124-Fiscal Year(modified accrual basis of accounting)TABLE 4CITY OF PADUCAH, KENTUCKYChanges in Fund Balances, Governmental FundsLast Ten Fiscal Years
TotalEstimated DirectFiscal Personal Actual Tax Year Commercial Residential Property Franchise Total Value Rate Exemptions2007 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 2016 902,687,182 783,886,570 573,896,954 57,561,993 2,318,032,699 2,394,834,871 0.289 96.8% 76,802,172 Source: McCracken County Property Valuation AdministratorNotes: Property in McCracken county is reassessed once every four years on average.-125-TABLE 5CITY OF PADUCAH, KENTUCKYASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTYLAST TEN FISCAL YEARSEstimatedValuePercentAssessedToAssessed ValueReal Estate
TotalFiscal Real Direct Real Real Real RealYear Estate Personal Rate Estate Personal Estate Personal Estate Personal Estate Personal2007 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 2016 0.255 0.390 0.289 0.524 0.524 0.800 0.800 0.017 0.017 0.098 0.102 Source: McCracken County Property Valuation Administrator and City Tax Levy Ordinance.General FundCity Direct RatesMcCracken Co. City of Paducah-126-McCracken PaducahSchool Districts School Districts Junior College CountyTABLE 6CITY OF PADUCAH, KENTUCKYPROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS(PER $100 OF ASSESSED VALUE)LAST TEN FISCAL YEARS
(1) (2)
(1) (2)
Assessed Assessed
Taxpayer Valuation Valuation
Kentucky Oaks Mall 50,900,262$ 2.20% 50,900,262$ 2.88%
Superior Care Homes Properties 14,791,539 0.64%
Paducah Medical Investors 13,440,090 0.58% 13,440,090 0.76%
Ducmall LLC 13,119,800 0.57% 14,374,800 0.81%
Woodstone Enterprises LP 12,429,000 0.54%
Wal Mart Real Estate Business 10,646,400 0.46%
Paducah Hospitality Partners 9,600,000 0.41%
Sams Real Estate Business Trust 9,222,955 0.40%
Computer Service Inc 9,083,185 0.39% 15,362,263 0.87%
Wal Mart Store 9,000,000 0.39% 34,849,607 1.97%
Lowe's 14,201,793 0.80%
Olivet Church 1031 LLC 23,261,290 1.32%
Lourdes Medical Pavilion 15,982,400 0.90%
TOTALS 152,233,231$ 6.58%182,372,505$ 10.31%
(1) Source - Property Valuation Administration; Assessed value as of January 1, 2015.
(2) Source - Property Valuation Administration; Assessed value as of January 1, 2006.
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Percentage of Percentage of
Total Assessed Total Assessed
Valuation Valuation
TABLE 7
CITY OF PADUCAH, KENTUCKY
PRINCIPAL TAXPAYERS - PROPERTY TAX
CURRENT YEAR AND NINE YEARS PRIOR
2016 2007
Total Collections to Date
(1)
(1) Percent of Percent of
Amount of Levy Total Levy
Collections Collected Collections Collected
3,995,992 3,855,679 96.5% 134,677 3,990,356 99.9%
3,970,104 3,814,940 96.1% 149,758 3,964,698 99.9%
4,195,755 4,017,032 95.7% 167,918 4,184,950 99.7%
4,252,290 4,131,454 97.2% 107,607 4,239,061 99.7%
4,191,047 4,110,973 98.1% 65,783 4,176,756 99.7%
4,220,129 4,119,689 97.6% 84,620 4,204,309 99.6%
4,433,546 4,334,698 97.8% 80,773 4,415,471 99.6%
4,600,347 4,509,874 98.0% 64,156 4,574,030 99.4%
4,725,239 4,644,522 98.3% 44,866 4,689,388 99.2%
4,886,268 4,802,067 98.3% - 4,802,067 98.3%
(1) Includes current year real and personal property tax.
* Source - City of Paducah Finance Department.
2012
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2007
Collected within the
Fiscal Year of the Levy
Taxes Levied
Fiscal
for the
2008
2009
2015
2016
2013
2014
2010
2011
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
(1) Direct
Fiscal Taxes Tax
Year Collected Rate
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%
2016 20,130,158 2.00%
176,877,420
(1) Source - City of Paducah Finance Department - Actual collections during the fiscal year.
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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 2,444 97.80% 9,458,851 46.99%
$50,001 - $100,000 28 1.12% 2,061,308 10.24%
$100,001 - $500,000 25 1.00% 5,304,313 26.35%
Greater than $500,000 2 0.08% 3,305,686 16.42%
TOTALS 2,499 100.00% 20,130,158$ 100.00%
(1) Percentage of
Number of Percentage Taxes Total Employee
Filers of Total Collected License Tax
$0 - $50,000 2,264 98.18% 8,747,840 53.80%
$50,001 - $100,000 22 0.95% 1,602,865 9.86%
$100,001 - $500,000 18 0.78% 3,681,440 22.64%
Greater than $500,000 2 0.09% 2,226,801 13.70%
TOTALS 2,306 100.00% 16,258,946$ 100.00%
(1) Source - City of Paducah Finance Department - Actual collections during the fiscal year.
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Taxpayers
By Range
Taxpayers
By Range
2016
2007
TABLE 10
CITY OF PADUCAH, KENTUCKY
PRINCIPAL EMPLOYEE LICENSE TAXPAYERS
CURRENT YEAR AND NINE YEARS PRIOR
(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 Capita2007 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 2016 21,595,096 5,686,435 - - - 27,281,531 1.14 5.42% 1,090 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 dataTABLE 11CITY OF PADUCAH, KENTUCKYRATIO OF OUTSTANDING DEBT BY TYPELAST TEN FISCAL YEARSPublic-131-ImprovementDebtNetPublicDebtImprovement
(1)Ratio ofInfinitiPublicNetConvention & Media Floodwall ImprovementPublic PoolEconomic Bonds toFiscal Art Center BuildingRehabilitation ProjectRenovation DevelopmentActualYear Bonds Bonds Bonds Bonds Bonds Bonds Total Value2007 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 2016 4,955,000 4,055,000 2,530,000 1,990,271 4,805,000 990,000 2,185,000 84,825 21,595,096 0.90 863 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.TABLE 12CITY OF PADUCAH, KENTUCKYRATIO OF NET GENERAL BONDED DEBT OUTSTANDINGLAST TEN FISCAL YEARSPolice andFire PensionFundBonds-132-CapitaAmortizationof Discountsand Premiums(2)NetBonds Per
Estimated
(1) Share of
Reported Percentage Direct and
Debt Applicable Overlapping
Outstanding to the City Debt
City of Paducah 27,281,531$ 100.00% 27,281,531$
Paducah Independent School District 47,420,445 * 100.00% 47,420,445
McCracken County 19,271,760 * 46.60% 8,980,640
McCracken County Board of Education 63,896,975 * 32.90% 21,022,105
Overlapping debt 130,589,180 77,423,190
TOTAL DIRECT AND OVERLAPPING DEBT 157,870,711$ 104,704,721$
(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.
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TABLE 13
CITY OF PADUCAH, KENTUCKY
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
AS OF JUNE 30, 2016
Net assessed value2,318,032,699$ Add exemption76,802,172 Total assessed value2,394,834,871$ Debt limit - 10% of total assessed (1)239,483,487$ Debt outstanding:General obligation bonds outstanding21,595,096$ Note payable5,686,435 Less debt not subject to limit- Gross bonded debt27,281,531 Less amount available in debt servicefunds791,761 Net bonded indebtedness subject tolimit26,489,770 LEGAL DEBT MARGIN212,993,717$ 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007Debt limit 239,483,487$ 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$ Total net debt applicable to limit 26,489,770 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 LEGAL DEBTMARGIN212,993,717$ 204,605,580$ 196,337,945$ 192,531,550$ 181,270,901$ 180,595,607$ 176,318,906$ 182,051,405$ 176,454,434$ 161,160,857$ Total net debtapplicable to thelimited as a percentage ofdebt limit 11.06% 12.33% 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."-134-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 2,804 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%
25,024 503,179,300 20,430 41.4 3,139 6.2%
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.
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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 RateAgeIncome
2006-2007
2007-2008
2008-2009
2009-2010
2010-2011
2011-2012
2012-2013
Fiscal Year Population
2013-2014
2014-2015
2015-2016
Percentage of Percentage ofTotal TotalEmployees (1) Employment (2) Employees (1) Employment (2)Western Baptist Hospital 820 3.05% 1,660 5.55%Lourdes Hospital 1,445 5.38% 1,500 5.01%Wal Mart 1,022 3.80% 570 1.91%Paducah Public Schools 774 2.88% 600 2.01%West Kentucky Community and Technical College 451 1.68% 270City of Paducah 486 1.81% 380 1.27%State of Kentucky 346 1.29% 390 1.30%Parkview Convalescent Center278 1.03%Paxton Media Group 209 0.78% 285 0.95%Computer Services, Inc. 270 1.00%LYNX Services390 1.30%NRE Acquisitions270 0.90%TOTALS6,10122.71%6,31520.20%(1) Source - City of Paducah Finance Department(2) State of Kentucky - Office of Employment and Training. Ratio based on employment within County of McCracken.-136-EmployerTABLE 16CITY OF PADUCAH, KENTUCKYPRINCIPAL EMPLOYERSCURRENT YEAR AND NINE YEARS PRIOR20072016
2016 2015 2014 2013 2012 2011 2010 2009 2008 2007Governmental ActivitiesGeneral governmentGeneral administration 11 11 11 12 12 12 12 12 12 12Finance 11 11 11 11 11 14 14 17 14 14Inspection0000111110131313Information systems5556666444Risk/Human resources3333311144Public safetyPolice 87 87 87 88 90 90 90 93 93 93Fire 75 76 76 74 64.5 64 65 69 69 71Public serviceStreets 21 21 20 20 23 23 23 29 29 30Facilities 12.5 12.5 13.5 13.5 11.5 14 34 36 35 34Engineering 6.6 6.6 6.6 7.6 7.675899Other5555564666Parks and recreation2525242424247777Planning and development101099999101111OtherPaducah Riverfront Dev. Authority1111100000Renaissance033453500Fleet maintenance 6.5 6.5 6.5 6.5 6.5 6.58677Business-type ActivitiesSolid waste 25.4 25.4 25.4 25.4 25.4 26 27 27 27 27TOTAL PRIMARY GOVERNMENT306306307309314.5318318343340342* Employee budget census.-137-Fiscal YearTABLE 17CITY OF PADUCAH, KENTUCKYCITY FULL-TIME EMPLOYEES BY FUNCTION*Last Ten Fiscal Years
2016 2015 2014 2013 2012 2011 2010 2009 2008 2007General governmentBuilding and electrical permits issued1,344 1,175 1,251 1,202 1,232 1,239 1,263 1,179 1,203 1,411 Business licenses issued 3,826 3,729 3,717 3,966 3,956 3,254 3,397 3,691 3,507 3,500 Public safetyPoliceAdult arrests 2,174 2,293 2,546 2,508 2,753 3,564 3,859 4,454 4,170 5,012 Murder2 2 3 - 3 3 1 5 - - Rape11 10 17 16 14 22 12 20 15 18 Robberies42 41 36 38 14 31 56 41 49 42 Burglary185 138 127 142 123 155 245 169 203 208 Auto theft59 49 60 41 47 54 62 57 60 117 Larceny1,173 1,138 1,090 1,110 1,005 1,013 1,092 1,106 * *Arson7 2 3 5 7 6 7 7 8 16 Traffic accidents1,936 1,722 1,664 1,573 1,666 1,762 1,774 1,368 1,519 1,949 Traffic violations4,231 5,501 6,821 10,168 8,573 7,701 7,240 9,143 7,109 7,323 FireEmergency responses3,201 2,956 2,935 3,054 3,164 3,181 2,603 3,305 2,603 2,456 Fires extinguished124 118 115 105 138 122 133 136 102 163 Structure fires42 42 35 33 53 37 49 57 49 40 Incidents with reportedlosses72 73 56 55 89 73 89 85 70 80 Medical/rescue2,259 2,150 2,080 2,151 2,270 2,133 1,690 1,616 1,506 1,369 Tours/in-services/carseats305 400 378 570 524 671 676 907 699 485 Training man hours10,589 10,860 8,959 9,155 7,232 7,033 8,493 7,716 4,344 1,183 Inspections2,060 1,324 1,710 1,157 1,417 1,063 985 1,183 1,449 *Refuse collectionResidentialRefuse collected (tons 41 34 36 36 34 34 38 32 25 28 per day)Customers served9,801 9,639 9,600 9,478 9,488 9,568 9,445 9,435 9,446 9,388 CommercialRefuse collected (tons61 64 61 65 71 71 70 75 83 85 per day)Customers served854 861 927 805 803 806 810 810 821 832 Public service911 dispatches85,380 83,465 83,614 92,786 79,333 82,268 79,768 81,525 83,871 76,815 Police46,660 44,337 43,877 51,131 43,686 44,794 42,496 40,921 43,420 41,887 Fire32,320 3,152 3,517 4,747 3,189 3,226 2,702 2,490 2,720 2,399 Other35,490 35,976 36,220 36,908 32,458 34,248 34,570 38,114 37,731 32,529 * Information not available.** Information from city departments.-138-Fiscal YearTABLE 18CITY OF PADUCAH, KENTUCKYOPERATING INDICATORS BY FUNCTION**Last Ten Fiscal Years
2016 2015 2014 2013 2012 2011 2010 2009 2008 2007Public safetyPoliceStations1111111111FireStations5555555555Refuse collectionCollection trucksResidential 10 10 10 10 10997109Commercial4444445455Other public worksStreets (miles paved) 218 218 218 218 218 218 218 216 216 216Sidewalks (miles) 47 47 47 47 47 47 47 45 45 45Traffic signals 13 13 13 13 13 13 13 12 11 11Parks and recreationParks 28 28 28 27 27 27 27 27 27 27Acreage 960 960 960 960 1125 1125 1125 960 960 960Community centers2222221111Swimming pools1111111111Public tennis courts6666666666Public golf courses2222222222* Information from city departments.-139-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, 2016
Federal
CFDA Pass-Through Pass-Through
Program Title: Number Grantor Number To Subrecipients Expenditures
Department of Housing and Urban
Development:
Direct Programs:
Section 8 Housing Choice Vouchers 14.871 N/A -$ 1,872,789$
Pass-through Kentucky Governors
Office for Local Development:
Community Development Block Grants 14.228 N/A 250,000 750,000
Total Department of Housing and Urban
Development 250,000 2,622,789
Department of the Interior:
Pass-through Kentucky Department of
Fish and Wildlife Resources
Sportfishing and Boating Safety Act 15.622 PON2-094-1500003154-1 - 437,895
Passed-through Kentucky Heritage
Council:
Historic Preservation Fund Grants in Aid 15.904 KY-15-111 - 3,795
Total Department of the Interior - 441,690
Department of Justice:
Direct Programs:
Bulletproof Vest Partnership Program 16.607 N/A - 12,645
Edward Byrne Memorial Justice
Assistance Grant Program 16.738 N/A - 10,912
Total Department of Justice - 23,557
Department of Homeland Security:
Direct Programs:
Port Security Program 97.056 N/A - 34,233
Passed-through Kentucky Division of
Emergency Management:
Disaster Grants - Public Assistance 97.036 FEMA-4216-DR-KY - 26,683
Passed-through Kentucky Office of
Homeland Security
Homeland Security Grant Program 97.067 PO2-094-1500003154-1 - 75,000
Total Department of Homeland Security - 135,916
Department of Transportation:
Passed-through Kentucky Transportation Cabinet
State and Community Highway Safety 20.600 PT-15-36 - 8,867
State and Community Highway Safety 20.600 PT-16-43 - 15,074
National Highway Traffic Safety Administration
(NHTSA) Discretionary Safety Grants 20.614 DD-15-01 - 1,178
Highway Planning and Construction 20.205 P02-625-1500004634 - 3,035,720
Total Department of Transportation - 3,060,839
TOTAL EXPENDITURES OF FEDERAL AWARDS 250,000$ 6,284,791$
See accompanying notes to schedule of expenditures of federal awards.
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CITY OF PADUCAH, KENTUCKY
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2016
Federal Grantor/Pass-Through Grantor/
CITY OF PADUCAH, KENTUCKY
NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2016
Note 1 - Basis of Presentation:
The accompanying schedule of expenditures of federal awards includes the federal grant activity of
the City of Paducah and is presented on the accrual basis of accounting. The information in this
schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal
Regulations Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements
for Federal Award (Uniform Guidance). Therefore, some amounts presented in this schedule may
differ from amounts presented in, or used in the preparation of, the financial statements.
Note 2 - 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
Note 3 – Indirect Cost Rate:
The City of Paducah has not elected to use the 10% de minimis indirect cost rate as allowed under the
Uniform Guidance.
Note 4 – Reconciliation of Federal Awards to the Financial Statements:
Total Federal Awards $ 6,284,791
Federal Awards by Fund
General Fund $ 41,414
Capital Improvement Fund 4,133,088
Special Revenue Fund 237,500
Proprietary Fund 1,872,789
Total Federal Awards $ 6,284,791
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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, 2016, 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 6, 2016.
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 6, 2016
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OMB Compliance Supplement
Management’s Responsibility
Auditor’s Responsibility
Government Auditing Standards
Code of Federal Regulations
Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards
Opinion on Each Major Federal Program
deficiency in internal control over compliance
material weakness in internal control over compliance
significant deficiency in internal control over compliance
Government Auditing Standards
Code of Federal Regulations Uniform Administrative
Requirements, Cost Principles and Audit Requirements for Federal Award .
Government Auditing Standards
Code of Federal Regulations Uniform Administrative
Requirements, Cost Principles and Audit Requirements for Federal Award .