HomeMy Public PortalAbout2008 AuditMember American Institute of
Certified Public Accountants
BRUCE D. CULLEY, C.P.A., P.C.
3000 BROOKTREE LANE, SUITE 210
GLADSTONE, MISSOURI 64119
816-453-1040 FAX: 816-453-0721
bruceculley@sbcglobal.net
CITY OF PARKVILLE, MISSOURI
AUDITED FINANCIAL STATEMENTS
Member Missouri Society of
Certified Public Accountants
FOR THE YEAR ENDED DECEMBER 31, 2008
CITY OF PARKVILLE, MISSOURI
Table of Contents
Page Number
Independent Auditor's Report...................................................................................................... I -2
Management's Discussion and Analysis ...................................................................................... 3 -12
Basic Financial Statements
Government-wide Financial Statements
Statement of Net Assets.................................................................................................. 13
Statement of Activities.................................................................................................... 14
Fund Financial Statements
Balance Sheet -Governmental Funds ........................................................................... 15
Reconciliation of the Balance Sheet of the Governmental Funds to the
Statement of Net Assets............................................................................................ 16
Statement of Revenues, Expenditures and Changes in Fund
Balances -Governmental Funds.............................................................................. 1 7
Reconciliation of the Statement of Revenues, Expenditures and
Changes in Fund Balances of Governmental Funds to the
Statement of Activities -Cash Basis........................................................................ 18
Statement of Revenues, Expenditures and Changes in Fund
Balances -Budget and Actual-General Fund........................................................ 19
Statement of Net Assets -Proprietary Funds ................................................................. 20
Statement of Revenues, Expenditures and Changes in Fund
Balances -Proprietary Funds................................................................................... 21
Statement of Cash Flows -Proprietary Funds ................................................................ 22 -23
Notes to Basic Financial Statements ............................................................................................ 24 - 4 7
Required Supplementary Information .......................................................................................... 48 -49
Other Supplementary Information
Combining and Individual Fund Statement Schedules:
Combining Balance Sheet -Nonmajor Governmental Funds ........................................ 51-52
Combining Statement of Revenues, Expenditures and Changes in Fund
Balances -Nonmajor Governmental Funds ................................................................ 53 -54
BRUCE D. CULLEY C.P.A., P.C.
3000 Brooktree Lane, Suite 210
Gladstone, MO. 64119
816-453-1040 Fax: 816-453-0721
Independent Auditor's Report
Honorable Mayor and Board of Aldermen
City of Parkville, Missouri
I have audited the accompanying financial statements of the governmental activities, the
business-type activities, each major fund, and the aggregate remaining fund information of the
City of Parkville, Missouri (the City) as of and for the year ended December 31, 2008, which
collectively comprise the City's basic financial statements as listed in the table of contents.
These financial statements are the responsibility of the City's management. Our responsibility
is to express opinions on these financial statements based on our audit.
I conducted my 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 I plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. I believe that
my audit provides a reasonable basis for my opinions.
In my 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, each major fund, and the aggregate remaining fund information of the City of
Parkville, Missouri, as of December 31, 2008, and the respective changes in financial position
and cash flows, where applicable, thereof and the respective budgetary comparison for the
general fund for the year then ended in conformity with accounting principles generally
accepted in the United States of America.
The Management's Discussion and Analysis and the Required Supplementary Information on
pages 3 through 12 and 48 through 49, respectively, are not a required part of the basic
financial statements but are supplementary information required by accounting principles
generally accepted in the United States of America. I have applied certain limited procedures,
which consisted principally of inquiries of management regarding the methods of
measurement and presentation of the required supplementary information. However, I did not
audit the information and express no opinion on it.
I
My audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City's basic financial statements. The accompanying introductory
section and supplementary section are presented for purposes of additional analysis and are
not a required part of the basic financial statements. The supplementary information has been
subjected to the auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated, in all material respects, in relation to the basic financial
statements taken as a whole.
Gladstone, Missouri
October 10, 2009
2
ruce Culley
ertified Public Accountant
CITY OF PARKVILLE, MISSOURI
Parkville, Missouri 64152
Management's Discussion and Analysis
As management of the City of Parkville, we offer readers of the City of Parkville's financial
statements this narrative overview and analysis of the financial activities of the City of
Parkville for the fiscal year ended December 31, 2008. We encourage readers to consider the
infmmation presented here in conjunction with additional information that we have furnished
in our letter of transmittal.
Financial Highlights
• The assets of the City of Parkville exceeded its liabilities at the close of the most
recent fiscal year by $5,235,850 (net assets).
• The government's total net assets increased by $437,159 including a prior period
adjustment of $187 ,972. The net assets increase is found in governmental activities
where there is a positive $408,777 net change, and a positive $28,382 change in net
assets reported in business-type activities including Sewer service and Grinder pump
operations.
• As of the close of the current fiscal year, the City of Parkville's governmental funds
reported combined ending fund balances of $4,260,913, a decrease of $4,107,294 in
comparison with the prior year. The major reason for the decline in the fund balance
was for expenditures in Neighborhood Improvement projects including Brink Meyer
Road and Rush Creek. These projects were financed by limited obligation temporary
notes.
• At the end of the current fiscal year, unreserved, undesignated fund balance for the
general fund was $576,181, or approximately 16.8% of total general fund
expenditures.
• The City of Parkville's total debt, including compensated absences, decreased by
$609,381, (8.5%) during the fiscal year.
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the City of Parkville's
basic financial statements. The City of Parkville's basic financial statements comprise three
components: 1) government-wide financial statements, 2) fund financial statements, and 3)
notes to the financial statements. This report also contains other supplementary information
in addition to the basic financial statements themselves.
Government-wide Financial Statements. The government-wide financial statements are
designed to provide readers with a broad overview of the City of Parkville's finances, in a
manner similar to a private-sector business.
3
The statement of net assets presents information on all of the City of Parkville's assets and
liabilities, with the difference between the two reported as net assets. Over time, increases or
decreases in net assets may serve as a useful indicator of whether the financial position of the
City of Parkville is improving or deteriorating.
The statement of activities presents information showing how the government's net assets
changed during the most recent fiscal year. All changes in net assets are reported as soon as
the underlying event giving rise to the change occurs, regardless of the timing of related cash
j/ml's. Thus, revenues and expenses are reported in this statement for some items that will
only result in cash flows in future fiscal periods ( e. g., uncollected taxes and earned but
unused vacation leave).
Both of the government-wide financial statements distinguish functions of the City of
Parkville that are principally supported by taxes and intergovernmental revenues
(governmental activities) from other functions that are intended to recover all or a significant
portion of their costs through user fees and charges (business-type activities). The
governmental activities of the City of Parkville include general government, public safety,
streets, economic development, and culture and recreation. The business-type activities of the
City of Parkville include Sewer service and Grinder pump service.
The government-wide financial statements can be found on pages 13 -14 of this report.
Fund Financial Statements. A fimd is a grouping of related accounts that is used to
maintain control over resources that have been segregated for specific activities or objectives.
The City of Parkville, like other state and local governments, uses fund accounting to ensure
and demonstrate compliance with finance-related legal requirements. All of the funds of the
City of Parkville can be divided into two categories: governmental funds and proprietary
funds.
Govemmental Funds. Governmental fimds are used to account for essentially the san1e
functions reported as governmental activities in the government-wide financial statements.
However, unlike the government-wide financial statements, governmental fund financial
statements focus on near-term iriflows and outflows of spendable resources, as well as on
balances of spendable resources available at the end of the fiscal year. Such information may
be useful in evaluating a governments near-term financing requirements.
Because the focus of governmental funds is narrower than that of the government-wide
financial statements, it is useful to compare the information presented for govermnental.fimds
with similar information presented for governmental activities in the government-wide
financial statements. By doing so, readers may better understand the long-term impact of the
government's near-term financing decisions. Both the governmental fund balance sheet and
the governmental fund statement of revenues, expenditures, and changes in fund balances
provide a reconciliation to facilitate this comparison between governmental fimds and
governmental activities.
4
The City of Parkville maintains three individual major or 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 fund,
capital projects fund, and debt service fund, each of which are considered to be major funds.
Data from the other eleven governmental 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 statements elsewhere in this report.
The City of Parkville adopts an annual appropriated budget for its general fund. A budgetary
comparison statement has been provided for the general fund to demonstrate compliance with
this budget.
The basic governmental fund financial statements can be found on pages 15 -19 of this
report.
Proprietary Fu11ds. The City of Parkville maintains one type of proprietary fund, Enterprise
fimds are used to report the same functions presented as business-type activities in the
government-wide financial statements. The City of Parkville used enterprise funds to account
for its Sewer Service and for Grinder Pump operations. The only activity in the Grinder
Pump operations was for the sale of the remaining assets held by the fund. The operation of
the Grinder Pump has been assumed by the homes association.
Proprietary funds provide the same type of information as the government-wide financial
statements, only in more detail. The proprietary fund financial statements provide separate
infonnation for the Sewer Service and for the Grinder Pump operation, with the former
considered to be a major fund and the latter a non-major fund of the City of Parkville.
The basic proprietary fund financial statements can be found on pages 20 -23 of this report.
Notes to the Financial Statements. The notes provide additional information that is
essential to a full understanding of the data provided in the government-wide and fund
financial statements. The notes to the financial statements can be found on pages 24 -47 of
this report.
Other Information. In addition to the basic financial statements and accompanying notes,
this report presents certain required supplemental information concerning the City of
Parkville's infrastructure reporting. As recommended by American Public Works
Association, the modified approach for infrastructure was developed as a compromise to
provide an alternative to depreciating eligible infrastructure assets. The basic premise behind
the modified approach is that no depreciation is incurred if infrastructure assets are being
maintained or preserved at a certain level. The City of Parkville provides an up-to-date
inventory of eligible assets by location, type and physical parameters and performs replicable
condition assessments, triennially. Results are summarized using a measurement scale, seen
on pages 48 -49 of this report. Estimated amounts needed to maintain and preserve these
assets at the City's established service level are budgeted for annually.
5
The combining and individual fund statements referred to earlier in connection with non
major or governmental funds are presented on pages 51 -54 of this report.
Government-wide Financial Analysis
As noted earlier, net assets may serve over time as a useful indicator of a government's
financial position. In the case of the City of Parkville, assets exceeded liabilities by
$5,235,850 at the close of the most recent fiscal year.
The City of Parkville uses capital assets to provide services to citizens; consequently, these
assets are not available for future spending. Although the City of Parkville's investment in its
capital assets is reported net of related debt, it should be noted that the resources needed to
repay this debt must be provided from other sources, since the capital assets themselves
cannot be used to liquidate these liabilities.
6
CITY OF PARKVILLE'S NET ASSETS
Governmental Activities Business-~Ee Activities Total
2008 2007 2008 2007 2008 2007
Current and
Other· Assets $ 6,180,539 $ I 0,243,456 $ 938,147 $ 791,269 $ 7,118,686 $ 1 1,034,725
Capital Assets 13,905,600 9,708,845 4,494,905 4,823,640 18,400,505 14,532,485
Total Assets 20,086,139 19,952,301 5,433,052 5,614,909 25,519,191 25,567,210
Long-Tenn
Liabilities
Outstanding 15,154,433 15,951 ,285 2,568,550 2,769,323 17,722,983 18,720,608
Other Liabilities 2,307,642 1,785,728 252,717 262,183 2,560,359 2,047,911
Total
Liabilities 17,462,075 17,737,013 2,821,267 3,031 ,506 20,283,342 20,768,519
Net Assets:
Invested in
Capital Assets,
Net of Related
Debt (1,636,847) (3,498,492) 1,733,082 2,015,940 96,235 (l,482,552)
Restricted 3,670,735 5,091,639 3,670,735 5,091,639
Unrestricted 590,177 622,141 878,703 567,463 1,468,880 1' 189,604
Total Net
Assets $ 2,624,065 $ 2,215,288 $2,611,785 $2,583,403 $ 5,235,850 $ 4,798,691
7
CITY OF PARKVILLE'S CHANGES IN NET ASSETS
Governmental Activities Business-tyee Activities Total
2008 2007 2008 2007 2008 2007
Program Revenues
Charges for Services $ 391,782 $ 514,602 $ 994,950 $ 970,778 $ !,386,732 $1,485,380
Operating Grants and
Contributions 25,425 114,304 25,425 114,304
Capital Grants and
Contributions 438,631 1,433,647 438,631 1,433,647
General Revenues
Property Taxes 1,175,054 1,112,720 1,175,054 l,112,720
Other Taxes 42,238 5,930 42,238 5,930
Franchise Taxes 698,430 666,839 698,430 666,839
Sales Taxes 1,507,003 1,539,184 1,507,003 1,539,184
TIF 421,422 421,422
Other 142,603 142,603
Transfers (227,640) 227,640
Sale of Capital Assets 347,361 347,36 I
Unrestricted Invest-
ment Earnings 220,553 309,615 I 0,465 295 231,018 309,910
Total Revenues 5,063,141 5,816,562 1,005,415 I, 198, 713 6,068,556 7,015,275
Expenses
General Government 891,316 1,050,407 891,316 1,050,407
Public Safety 1,058,107 1,036,955 1,058,107 I ,036,955
Municipal Court 166,051 143,544 166,051 143,544
Public Works 938,312 1,299,433 938,312 1,299,433
Economic
Development 362,573 283,184 362,573 283,184
Culture and Recreation 311,990 47,579 311,990 47,579
Interest on Long-term
Debt 421,335 438,905 421,335 438,905
Depreciation 270,077 270,077
TIF 422,575 422,575
Se\ver 942,241 888,542 942,241 888,542
Grinder Pump 34,792 49,973 34,792 49,973
Total Expenses 4,842,336 4,300,007 977,033 938,515 5,819,369 5,238,522
Change in Net Assets 220,805 1,516,555 28,382 260, 198 249,187 1,776,753
Net Assets 12/31 /07 2,215,288 698,733 2,583,403 2,323,205 4,798,691 3,021,938
Prior Period Adjustment 179,436 179,436
Net Assets Restated 2,394,724 698,733 2,583,403 2,323,205 4,978,127 3,021,938
Net Assets 12/31/08 $2,615,529 $2,215,288 $2,611,785 $2,583,403 $5,227,314 $4,798,691
8
Governmental Activities. Governmental activities increased the City of Parkville's net
assets by $437,932 including a prior period adjustment of $187,792, and business-type
activities increased by $28,382. Key elements of this increase are as follows:
• Positive revenue results compared to 2007 occurred from increases in property taxes
by $62,334 and franchise taxes of $31,591.
• Negative revenue results compared to 2007 occurred from decreases in investment
earnings (decline in interest rates and the decline in the unexpended NID funds)
$89,062, decrease in sales tax (general economic conditions) $32,181, and a one-time
gain in 2007 from the sale of assets (old City Hall) $347,361.
Business-type Activities. The change in net assets for business-type activities increased the
City of Parkville's net assets by $28,382. The net assets for business-type activities in the
current fiscal year are $2,611,785.
Financial Analysis of the Government's Funds
As noted earlier, the City of Parkville uses fund accounting to ensure and demonstrate
compliance with finance-related legal requirements.
Govemmental ftmds. The focus of the City of Parkville's governmental fimds is to provide
information on near-term inflows, outflows, and balances of spendable resources. Such
information is useful in assessing the City of Parkville's financing requirements. In
particular, unreserved fund balance may serve as a useful measure of a government's net
resources available for spending at the end of the fiscal year.
As mentioned earlier in this analysis, at the end of the current fiscal year, the City of
Parkville's governmental funds reported combined ending fund balances of $4,260,913. Of
that, $14,654 is reserved or designated to indicate that it is not available for new spending
because it has already been committed to prepaid items in general fund.
The general fund is the chief operating fund of the City of Parkville. At the end of the current
fiscal year, unreserved, undesignated fund balance of the general fund was $576,181, while
total fund balance reached $590,176. As a measure of the general fund's liquidity, it may be
useful to compare both unreserved fund balance to total fund expenditures. Unreserved,
undesignated fund balance represents 16.8 percent of total general fund expenditures.
The fund balance of the City of Parkville' s general fund decreased by $94,908 during the
current fiscal year. The City's actual revenue exceeded the budget by $125,457 with higher
actual revenues than budgeted for all categories except sales tax and licenses and pern1its.
Declines in building permits were the major reason for the decline in revenue. Actual
expenses exceeded budget by $220,364 the majority of which was for higher expenditures for
legal fees and personnel.
9
The debt service fund has a total fund balance of $166,636, all of which is reserved for the
payment of debt service. A net decrease in the fund balance during the current year of $5,523
was due to the total revenues (taxes, special assessments, investment earnings, and transfers
in) of $765,215, and total expenditures (principal, interest, and fees) of $759,692. This
reduction was budgeted with the application of existing debt service funds toward bond
payments.
The capital projects fund has a total fund balance of $2,349,452. There were considerable
expenditures on capital projects during the year including Brink Meyer Road and Brush
Creek.
Proprietary F1111ds. The City of Parkville's proprietary funds provide the same type of
information found in the government-wide financial statements, but in more detail.
The net assets of the Sewer Service at the end of the year total $2,611,785. The Grinder
pump repair was made inactive by means of transferring the related assets and obligations to
the Riss Lake Home Owners Association. A loss of $34, 792 was incurred in the sale of the
remaining assets held by the Grinder Pump repair.
General Fund Budgetary Highlights
There were no amendments to the general fund budget for the current fiscal year. Revenues
were slightly more than four percent above projected figures and expenditures were 6.9%
above expected amounts.
General fund revenues were $125,457 more than projected. Contributing factors include an
increase in property taxes of $26,055 due to new homes construction and $75,430 increase in
utilities franchise fees that includes the release of portions of accumulated revenues held in
escrow pending litigation. Revenues that fell below budget projections include sales ta-xes at
$88,996 less than expected which is indicative of the economy as a whole. Licenses and
permit fees were also down due to a decline in new construction by $95,695
General fund expenses were $220,364 more than projected. The largest portion of costs over
budget occurred in legal fees incurred by administrative needs. The public works (street
department) exceeded budget because of increased activity including street improvements.
Capital Asset and Debt Administration
Capital Assets. The City of Parkville's investment in capital assets for its governmental and
business-type activities as of December 31, 2008, totals $18,400,505. Over 90% of the
increase came from increases in capital expenditures from the Neighborhood Improvement
District projects.
10
City of Parkville's Capital Assets
(Net of Depreciation)
Governmental Business-type
Activities activities
2008 2008
Total
2008
Buildings and Improvements $ 3,774,159 $ 3,023,207 $ 6,797,366
Machinery and Equipment 482,255 39,404 521,659
Infrastructure 3,410,303 3,410,303
Land 806,486 59,975 866,461
Construction in Process 5,432,397 136,854 5,569,251
Infrastructure not being Depreciated 1,235,465 1,235.465
Total $13,905,600 $ 4,494,905 $18,400,505
Additional capital projects included $213,183 for street asphalt overlay, and $34,814 for curb
and sidewalk repairs.
Additional information on the City of Parkville's capital assets can be found in Note 5, of
this report.
Long-term Debt. At the end of the current fiscal year, the City of Parkville had total debt
outstanding of $18,354,240.
City of Parkville's Outstanding Debt
General Obligation and Revenue Bonds
Governmental activities Business-type activities
2008 2007 2008 2007
General Obligation Bonds $3,200,000 $ 3,374,446 $ - $
Accreted Interest Payable 30,554
Revenue Bonds
NID Limited Obligation
Temp Notes-
Certificates of Participation
Compensated Absences
Capital Leases/
6,275,000
6, I 65,000
38,816
6,275,000
6,330,000
62,943
2,455,000 2,640,000
3,453 2,973
Total
2008 2007
$ 3,200,000 $ 3,374,446
30,554
2,455,000 2,640,000
6,275,000 6,275,000
6,165,000 6,330,000
42,269 65,916
Lease-Purchase
Total
11 263 34.123 205.708 213,582 ?16.971 247.705
ID.6.2.Q.079 $J 6.l.!ll 066 $2,664.16.l $_2.856.525 lli.154.24!2 $18,2fil&2J.
The City of Parkville' s total debt decreased by $609 ,3 8 I during the current fiscal year. There
was no new debt added to the City's balance sheet.
11
Economic Factors and Next Year's Budgets and Rates
For 2009, the City of Parkville is expecting Property Tax revenue to increase about 3.9%.
This is a slower growth rate than in recent years and represents the slower pace of new
residential construction during 2008. Building permits are anticipated to drop by about 40%
to $95,000 for 2009 as the construction market slows further. Franchise ta""<es are expected to
show a significant increase over 2007 and normalized 2008 revenues, primarily due to an
increase in telecommunication tax receipts following settlements with several major
telecommunications companies. Telecommunication tax receipts for 2008 increased
$121,000 over 2007 budgeted amounts. Due to the economic conditions, the City expects
Sales Tax receipts to remain constant in 2009. Over all, the City of Parkville is expecting
modest, but positive growth in revenue and expenditures for 2009.
Contacting the City's Financial Management
This report is designed to provide our citizens, taxpayers, customers and creditors with a
general overview of the City's finances and to demonstrate the City's accountability for the
money it receives. If you have questions about this report or need additional financial
information, contact the City Clerk's office, Parkville, Missouri.
12
CITY OF PARKVILLE, MISSOURI
STATEMENT OF NET ASSETS
DECEMBER 31, 2008
Governmental Business-Type
Activities Activities Total
Assets
Cash and Cash Equivalents $ 3,030, 167 $ 507,587 $ 3,537,754
Receivables, Net of Allowance for Uncollectibles
Taxes 1,664,576 1,664,576
Accounts 130,600 130,600
Restricted Cash and Investments 1,251, 180 175,223 1,426,403
Deferred Charges 219,962 122,987 342,949
Prepaid Items 14,654 720 15,374
Other Assets 1,030 1,030
Capital Assets not being Depreciated
Land 806,486 59,975 866,461
Construction in Progress 5,200,426 140,371 5,340,797
Infrastructure 3,410,303 3,410,303
Capital Assets, Net of Accumulated Depreciation
Buildings and Improvements 4,488,385 3,054,484 7,542,869
Machinery and Equipment 4,610 4,610
Infrastructure 1,235,465 1,235,465
Total Assets 20,086,139 5,433,052 25,519,191
Liabilities
Accounts Payable and Other Current Liabilities 366,181 42,983 409,164
Accrued Interest Payable 149,332 2,976 152,308
Customer Deposits 13,485 13,485
Unearned Revenue 1,404,065 1,404,065
Non Current Liabilities
Due Within One Year 388,064 205,489 593,553
Due in More Than One Year 15,154,433 2,556,334 17,710,767
Total Liabilities 17,462,075 2,821,267 20,283,342
Net Assets
Invested in Capital Assets, Net of Related Debt (1,636,847) 1,733,082 96,235
Restricted for
Debt Service 166,636 166,636
Capital Projects 2,349,452 2,349,452
Other Purposes 1,154,647 I, 154,647
Unrestricted 590,177 878,703 1,468,880
Total Net Assets $ 2,624,065 $ 2,611,785 $ 5,235,850
The accompanying notes are an integral part of the financial statements.
13
CITY OF PARKVILLE, MISSOURI
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED DECEMBER 31, 2008
Net (Expense) Revenue and
Program Revenues Changes in Net Assets
Operating Capital Primarx Government
Charges for Grants and Grants and Governmental Business-type
Functions/Programs Expenses Services Contributions Contributions Activities Activities Total --Primary government:
Governmental Activities
General Government $ 891,316 $ 159,319 $ 25,425 $ 438,631 $ (267,941) $ $ (267,941)
Public Safety -Police 1,058, I 07 (1,058,107) ( 1,058, I 07)
Public Safety -Court 166,051 232,463 66,412 66,412
Public Works 706,390 (706,390) (706,390)
Culture and Recreation 311,990 (311,990) (311,990)
Economic Development 362,573 (362,573) (362,573)
Depreciation 270,077 (270,077) (270,077)
TIF 422,575 (422,575) (422,575)
Interest on Long-term Debt 421,335 (421,335) (421,335)
Streets and Sidewalks 231,922 (231,922) (231,922)
Total Governmental Activities 4,842,336 391,782 25,425 438,631 (3,986,498) {3,986,498)
Business-type Activities
Se\ver 942,241 1,005,415 63,174 63,174
Grinder Pump 34.792 (34,792) (34,792)
Total Business-type Activities 977,033 1,005,415 28,382 28,382
Total Primar)' Government $ 5,819,369 $ 1,397,_197 $ 25,425 $ 438,631_ (3,986,498) 28,382 (3,958, I I 6)
General Revenues
Property Tax 1,175,054 1,175,054
Franchise Tax 698,430 698,430
Sales Tax 1,507,003 1,507,003
Other Tax 668 668
Unrestricted Investment Earnings 220,553 220,553
Intergovernmental 41,570 41,570
Other 142,603 142,603
TIF 421,422 421.422
Total General Revenues 4,207,303 4,207,303
Change in Net Assets 220,805 28,382 249,187
Prior Period Adjustment 187,972 187,972
Net Assets, Beginning of the Year 2,215.288 2,583,403 4,798,691
Net Assets, End of Year $ 2,624,065 $ 2,611,785 $ 5,235,850
The accompanying notes are an integral part of the financial statements.
14
Assets
Cash and Cash Equivalents
CITY OF PARKVILLE, MISSOURI
BALANCE SHEET
GOVERNMENTAL FUNDS
DECEMBER 31, 2008
Capital Debt
General Projects Service
$ 420,727 $ 1,801,405 $ 174,090
Receivables (Net of Allowance
for Uncollectibles)
Ta"Xes 1,098,116 566,460
Restricted Cash Investments 700,638 16,151
Prepaid Items 13,995 659
Total Assets $ 1,532,838 $ 2,502,702 $ 756,701
Liabilities and Fund Balance
Liabilities
Accounts Payable $ 120,776 $ 153,250 $
Accrued Payroll Liabilities 6,827
Unearned Revenue 814,000 590,065
Other Liabilities 1,059
Total Liabilities 942,662 153,250 590,065
Fund Balances
Reserved For
Prepaid Items 13,995 659
Unreserved, Reported In
General Fund 576,181
Special Revenue Funds
Capital Projects Funds 2,348,793
Permanent Fund
Debt Service Fund 166,636
Total Fund Balances 590,176 2,349,452 166,636
Total Liabilities and
Fund Balance $ 1,532,838 $ 2,502,702 $ 756,701
Other
Governmental
Funds
$ 633,945
534,391
$ 1,168,336
$ 13,687
13,687
620,258
534,391
1,154,649
$ 1, 168,336
The accompanying notes are an integral part of the financial statements.
15
Total
Govemtnent
Funds
$ 3,030,167
1,664,576
l,251,180
14,654
$ 5,960,577
$ 287,713
6,827
1,404,065
1,059
1,699,664
14,654
576,181
620,258
2,348,793
534,391
166,636
4,260,913
$ 5,960,577
CITY OF PARKVILLE, MISSOURI
RECONCILIATION OF THE BALANCE SHEET OF THE
GOVERNMENTAL FUNDS TO THE STATEMENT OF NET ASSETS
DECEMBER 31, 2008
Total Fund Balance in Governmental Fund Balance Sheet
Amounts reported for governmental activities in the statement
of net assets are different because:
Capital assets used in governmental activities are not financial
resources and therefore are not reported in the funds.
Long-term liabilities, including bonds payable, are not due
and payable in the current period and therefore are not
reported in the funds.
Other -Rounding
Net Assets of Governmental Activities
$ 4,260,913
13,905,600
(15,542,44 7)
(I)
$ 2,624,065
The accompanying notes are an integral part of the financial statements.
16
CITY OF PARKVILLE, MISSOURI
STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES-GOVERNMENTAL FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2008
Other Total
Capital Debt Governmental Government
General Projects Service Funds Funds
Revenues
Taxes $ 3,024,701 $ 120,499 $ 235,955 $ -$3,381,155
Licenses and Pennits 109,305 109,305
lntergovemrnental 41,570 41,570
Charges for Services 50,014 50,014
Fines and Fees 232,463 232,463
Special Assessments 104,395 334,236 438,631
Investment Earnings 39,826 139,908 4,501 36,318 220,553
Grants 25,425 25,425
TIF Revenue 421,422 421,422
Miscellaneous 93,597 49,006 142,603
Total Revenues 3,616,901 364,802 574,692 506,746 5,063,14 I
Expenditures
Current
General Government 829,212 57,670 886,882
Public Safety -Police 1,058,107 1,058,107
Public Safety -Court I 66,051 166,051
Public Works 1,005,91 I 1,005,91 I
Economic Development 375,043 375,043
Debt Service
Principal 339,446 339,446
Interest 421,335 421,335
Other 4,434 4,434
TIF Expense 422,575 422,575
Capital Outlay 4,326,505 164, 146 4,490,651
Total Expenditures 3,434,324 4,326,505 765,215 644,391 9, 170,435
Excess (Deficiency) of Revenues
Over (Under) Expenditures 182,577 (3,961,703) (190,523) (137,645) (4, I 07,294)
Other Financing Sources (Uses)
Transfers In 185,000 I 85,000 92,485 462,485
Transfers Out (277,485) (I 85,000) (462,485)
Total Other Financing Sources (277,485) I 85,000 92,485
Net Changes in Fund Balances
After Other Financing Sources (94,908) (3,961,703) (5,523) (45,160) (4,107,294)
Fund Balance, Beginning of Year 685,084 6,311,155 172,159 1,199,809 8,368,207
Fund Balance, End of Year $ 590,176 $ 2,349,452 $ 166,636 $ 1,154,649 $4,260,913
The accompanying notes are an integral part of the financial statements.
17
CITY OF PARKVILLE, MISSOURI
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
OFGOVERNMENTALFUNDSTOTHESTATEMENTOFACTIVITIES
DECEMBER 31, 2008
Amounts reported for governmental activities in the statement of activities are
different because:
Net Change in Fund Balances -Total Government Funds
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 and reported as depreciation expense.
The issuance of long-term debt (e.g., bonds, leases) provides current
financial resources to governmental funds, while the repayment of the
principal oflong-term debt consumes the current Financial resources of
governmental funds. Neither transaction, however, has any effect on net
assets. Also, governmental funds report the effect of issuance costs,
premiums, discounts and similar items when debt is first issued,
whereas these amounts are deferred and amortized in the statement of
activities. This amount is the net effect of these differences in the
treatment of long-term debt and related items.
The net effect of various miscellaneous transactions involving capital
assets (i.e., sales, trade-ins, and donations) is to decrease net assets
Some expenses reported in the statement of activities do not require the
use of current financial resources and, therefore, are not reported as
expenditures in governmental funds.
Change in Net Assets of Governmental Activities
$ (4,107,294)
3,969,753
392,850
(17,776)
(16,728)
$ 220,805
The accompanying notes are an integral part of the financial statements.
18
CITY OF PARKVILLE, MISSOURI
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCES -BUDGET TO ACTUAL -GENERAL FUND
FOR THE YEAR ENDED DECEMBER 31, 2008
Original Variance with
and Final Final Budget -
Budgeted Actual Positive
Amounts Amounts (Negative)
Revenues
Taxes
Property $ 913,044 $ 939,099 $ 26,055
Franchise 623,000 698,430 75,430
Sales 1,475,500 1,386,504 (88,996)
Other 668 668
Intergovernmental 41,570 41,570
Licenses and Permits 205,000 109,305 (95,695)
Charges for Services 17,000 50,014 33,014
Fines and Fees 211,900 232,463 20,563
Investment Earnings 26,000 39,826 13,826
Grants 25,425 25,425
Miscellaneous 20,000 93,597 73,597
Total Revenues 3,491,444 3,616,901 125,457
Expenditures
Current:
General Government 625,767 829,212 (203,445)
Public Safety -Police 1,081,520 1,058,107 23,413
Public Safety -Court 170,589 166,051 4,538
Public Works 85,045 97,217 (12,172)
Community Development 314,328 310,628 3,700
Street 560,101 609,173 (49,072)
Parks 309, 176 299,520 9,656
Neighborhood Development 9,000 12,470 (3,470)
Nature Sanctuary 12,474 6,310 6,164
Channel 2/Website 38,250 38,716 (466)
Contingency 7,709 6,919 790
Total Expenditures 3,213,959 3,434,323 (220,364)
Excess of Revenues over Expenditures 277,485 182,578 (94,907)
The accompanying notes are an integral part of the financial statements.
19
CITY OF PARKVILLE, MISSOURI
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
DECEMBER 31, 2008
Major Fund Non-Major Fund
Se\ver Business-type
Service Activities
Assets
Current Assets
Cosh and Cash Equivalents $ 507,587 $ $
Accounts Receivable 130,600
Restricted Cash and Investments 175,223
Prepaid Items 720
Other Assets 1,030
Total Current Assets 815,160
Noncurrent Assets
Deferred Charges 122,987
Capital Assets
Land 59,975
Buildings and Improvements 4,767,271
Machinery and Equipment 209,318
Construction in Progress 140,371
Infrastructure 1,847,350
Less Accumulated Depreciation (2,529,380)
Total Capital Assets 4,494,905
Total Noncurrent Assets 4,617,892
Total Assets 5,433,052
Liabilities
Current Liabilities
Accounts Payable and Other Current Liabilities 39,530
Accrued Interest Payable 2,976
Accrued Compensated Absences 3,453
Customer Deposits Payable 13,485
Current Portion of Revenue Bonds Payable 185,000
Current Portion of Leases Payable 8,273
Total Current Liabilities 252,717
Noncurrent Liabilities
Revenue Bonds Payable, Net 2,371,115
Leases Payable 197,435
Total Noncurrent Liabilities 2,568,550
Total Liabilities 2,821,267
Net Assets
Invested in Capital Assets, Net of Related Debt 1,733,082
Unrestricted 878,703
Total Net Assets $ 2,611,785 $ $
The accompanying notes are an integral part of the financial statements.
20
Total
507,587
130,600
I 75,223
720
1,030
815,160
122,987
59,975
4,767,271
209,318
140,371
1,847,350
(2,529,380)
4,494,905
4,617,892
5,433,052
39,530
2,976
3,453
13,485
I 85,000
8,273
252,717
2,371,115
I 97,435
2,568,550
2,821,267
1,733,082
878,703
2,61I,785
CITY OF PARKVILLE, MISSOURI
STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES -PROPRIETARY FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2008
Major Fund Non-Major Fund
Sewer Grinder Pump
Service Reeair
Operating Revenues
Charges for Sales and Services
Sewer Charges $ 994,950 $
Grinder Pump Fees
Total Operating Revenues 994,950
Operating Expenses
Cost of Sales and Services 605,756
Depreciation 297,460
Total Operating Expenses 903,216
Operating Income (Loss) 91,734
Nonoperating Revenues (Expenses)
Interest Revenue 10,465
Interest Expense (39,025)
Loss on Equipment (34,792)
Total Nonoperating Revenues (Expenses) (28,560) (34,792)
Change in Net Assets 63,174 (34,792)
Total Net Assets, Beginning of Year 2,548,611 34,792
Total Net Assets, End of Year $2,611,785 $
The accompanying notes are an integral part of the financial statements.
21
Total
$ 994,950
994,950
605,756
297,460
903,216
91,734
I 0,465
(39,025)
(34,792)
(63,352)
28,382
2,583,403
$ 2,611,785
CITY OF PARKVILLE, MISSOURI
STATEMENT OF CASH FLOWS -PROPRIETARY FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2008
Major Fund
Cash Flows from Operating Activities
Receipts from Customers
Payments to Suppliers
$
Payments to Employers
Net Cash Provided (Used) by Operating Activities
Cash Flows from Capital and Related Financing Activities
Payments on Leases Payable
Acquisition and Construction of Capital Assets
Principal Payed on Capital Debt
Interest Paid on Capital Debt
Net Cash Provided (Used) by Financing Activities
Cash Flows from Investing Activities
Interest Received
Net Cash Provided (Used) by Investing Activities
Increase in Cash and Cash Equivalents
Cash, Beginning of Year
Cash, End of Year
The accompanying notes are an integral part of the financial statements.
22
$
Sewer
Service
986,313
(583,382)
(37,358)
365,573
(7,874)
(185,000)
(41,323)
(234,197)
10,495
10,495
141,871
540,939
682,810
CITY OF PARKVILLE, MISSOURI
STATEMENT OF CASH FLOWS -PROPRIETARY FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2008
Major Fund
Sewer
Service
Reconciliation of Operating Income (Loss) to Net Cash
Provided (Used) by Operating Activities
Operating Income $ 91,734
Adjustments to Reconcile Operating Income (Loss)
to Net Cash Provided (Used) by Operating Activities
Depreciation Expense
Changes in Assets and Liabilities
Accounts Receivable
Accounts Payable
Accrued Compensated Absences
Prepaid Items
Other
Net Cash Provided (Used) by Operating Activities
The accompanying notes are an integral part of the financial statements.
23
297,460
(8,637)
(406)
480
(710)
(14,348)
$ 365,573
CITY OF PARKVILLE, MISSOURI
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2008
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Reporting Entity
The City of Parkville, Missouri (the City), is incorporated under the provisions of the
State of Missouri as a fourth class city, which operates under an elected Mayor/Board
of Aldermen form of government.
Government-Wide and Fund Financial Statements
The government-wide financial statements (i.e., the statement of net assets and the
statement of activities) report information on all of the activities of the government.
Governmental activities, which normally are supported by taxes and
intergovernmental revenues, are reported separately from business-type activities,
which rely to a significant extent on fees and charges for support.
The statement of activities demonstrates the degree to which the direct expenses of a
given function or segment are offset by program revenues. Direct expenses are those
that are clearly identifiable with a specific function or segment. Program revenues
include I) charges to customers or applicants who purchase, use, or directly benefit
from goods, services, or privileges provided by a given function or segment and 2)
grants and contributions that are restricted to meeting the operational or capital
requirements of a particular function or segment. Taxes and other items not properly
included among program revenues are reported instead as general revenues.
Separate financial statements are provided for governmental funds and proprietary
funds. Major individual governmental funds and the major individual enterprise fund
are reported as separate columns in the fund financial statements.
Measurement Focus. Basis of Accounting, and Financial Statement Presentation
The government-wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting, as are the proprietary fund
financial statements. Revenues are recorded when earned and expenses are recorded
when a liability is incurred, regardless of the timing of related cash flows. Property
taxes are recognized as revenues in the year for which they are levied. Grants and
similar items are recognized as revenue as soon as all eligibility requirements
imposed by the provider have been met.
24
CITY OF PARKVILLE, MISSOURI
NOTES TO BASIC FINANCIAL STATEMENTS -CONTINUED
DECEMBER 31, 2008
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -CONTINUED
Measurement Focus. Basis of Accounting. and Financial Statement Presentation
Governmental fund financial statements are reported using the current financial
resources measurement focus and the modified accrual basis of accounting. Revenues
are recognized as soon as they are both measurable and available. Revenues are
considered to be available when they are collectible within the current period or soon
enough thereafter to pay liabilities of the current period. A 90-day availability period
is used for revenue recognition for all governmental funds revenues except property
taxes for which a 30-day availability period is used. Expenditures generally are
recorded when a liability is incurred, as under accrual accounting. However, debt
service expenditures, as well as expenditures related to compensated absences and
claims and judgments, are recorded only when payment is due.
In applying the susceptible to accrual concept to intergovernmental revenues, the
legal and contractual requirements of the numerous individual programs are used as
guidance. There are, however, essentially two types of these revenues. In one, monies
must be expended for the specific purpose or project before any amounts will be paid
to the City; therefore, revenues are recognized based upon the expenditures recorded.
In the other, monies are virtually unrestricted as to purpose of expenditure and are
usually revocable only for failure to comply with prescribed requirements. These
resources are reflected as revenues at the time of receipt, or earlier if the susceptible
to accrual criteria are met.
Properly taxes, sales taxes, franchise taxes, interest associated with the current fiscal
period, and certain state and federal grants and entitlements are all considered to be
susceptible to accrual and so have been recognized as revenues of the cmTent fiscal
period. Only the portion of special assessments receivable due within the current
fiscal period is considered to be susceptible to accrual as revenue of the current
period. All other revenue items are considered to be measurable and available only
when cash is received by the City. While property taxes are shown on the balance
sheet as current assets of the City, they are not recognized as revenue at year end
because statutory provisions prohibit their use until the year for which they were
raised and budgeted. Instead, they are offset by deferred revenue accounts.
25
CITY OF PARKVILLE, MISSOURI
NOTES TO BASIC FINANCIAL STATEMENTS -CONTINUED
DECEMBER 31, 2008
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -CONTINUED
Measurement Focus. Basis of Accounting. and Financial Statement Presentation
The City reports the following major govermnental funds:
General Fund -This fund is the City's primary operating fund. It accounts for
all financial resources of the general govermnent, except those required to be
accounted for in another fund.
Debt Service -This fund accounts for the accumulation of resources for, and
the payment of, principal and interest on Jong-term general obligation debt of
govermnental funds.
Capital Projects -This fund accounts for the financing and acquisition and
construction of various citywide improvements.
The City reports the following major proprietary fund:
Sewer Service -This fund accounts for the provision of waste and sewer
services to the general public. All activities necessary to provide such services
are accounted for in this fund, including administration, operations,
maintenance, financing and related debt service, and billing and collection.
Private-sector standards of accounting and financial reporting issued prior to
December 1, 1989, generally are followed in both the govermnent-wide and
proprietary fund financial statements to the extent that those standards do not conflict
with or contradict guidance of the Govermnental Accounting Standards Board.
Governments also have the option of following subsequent private-sector guidance
for their business-type activities and enterprise funds, subject to this same limitation.
The City has elected not to follow subsequent private-sector guidance.
As a general rule the effect of inter-fund activity has not been eliminated from the
govermnent-wide financial statements. Elimination of these charges would distort the
direct costs and program revenues reported for the various functions concerned.
Amounts reported as program revenues include 1) charges to customers or applicants
for goods, services, or privileges provided, 2) operating grants and contributions, and
26
CITY OF PARKVILLE, MISSOURI
NOTES TO BASIC FINANCIAL STATEMENTS -CONTINUED
DECEMBER 31, 2008
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -CONTINUED
Measurement Focus, Basis of Accounting, and Financial Statement Presentation
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.
Proprietary funds distinguish operating revenues and expenses from non-operating
items. Operating revenues and expenses generally result from providing services and
producing and delivering goods in connection with a proprietary fund's principal
ongoing operations. The principal operating revenues of the sewer fund are charges to
customers for sales and services. Operating expenses for the sewer fund and the
grinder pump fund 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 non-operating revenues and expenses.
When both restricted and unrestricted resources are available for use, it is the City's
policy to use restricted resources first, then unrestricted resources as they are needed.
Cash, Cash Equivalents and Investments
Cash and investments of the individual funds are combined to forn1 a pool which is
managed by the Finance Department. Each fund's equity in the pool is included in
"cash and cash equivalents" in the financial statements. Investment earnings,
including interest income, are allocated to the funds required to accumulate interest. If
a fund is not required to account for its own earnings by law or regulation, the
earnings are allocated to the General Fund.
Missouri state statutes authorize the City, with certain restrictions, to deposit funds in
open accounts and certificates of deposit. Missouri state statutes also require that
collateral pledged must have fair market value equal to I 00% of the funds on deposit,
less amounts insured by federal deposit insurance. Collateral securities must be held
by the City or a disinterested third party and may include U.S. Government and
government agency bonds and securities; general obligation bonds of any of the 50
states; general obligation bonds of any Missouri county, certain cities, and special
districts; and revenue bonds of certain Missouri agencies. Obligations pledged to
secure deposits are delivered to the banks' joint custody accounts at the custodial
27
CITY OF PARKVILLE, MISSOURI
NOTES TO BASIC FINANCIAL STATEMENTS -CONTINUED
DECEMBER 31, 2008
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -CONTINUED
Cash. Cash Equivalents and Investments
bank. Written custodial agreements are required that provide, among other things,
that the collateral be held separate from the assets of the custodial bank.
Statement of Cash Flows
The City's cash and cash equivalents are considered to be cash on hand, demand
deposits, and short-term investments with original maturities of three months or Jess
from the date of acquisition.
Receivables and Payables
All trade accounts receivable are shown net of an allowance for uncollectibles.
Management records a trade accounts receivable allowance based on percentages of
collection estimated from the aging of accounts receivable. At December 31, 2008,
management detem1ined that no allowance was necessary.
Governmental funds report deferred revenue in connection with receivables for
revenues that are not considered to be available to liquidate liabilities of the current
period. Governmental funds deferred revenue is reported as follows:
General Fund Property Tax Receivable
Debt Service Fund Property Tax Receivable
Property Taxes
$ 814,000
590.065
$ 1.404.065
Property taxes are legally restricted for use in financing operations of the ensuing
year. Accordingly, the City defers revenue recognition until the year for which they
are to be used.
The City's property taxes are levied each November I based on the assessed value as
of the prior January I for all real property and personal property located within the
City. Property taxes are billed immediately following the levy date and considered
delinquent after December 31 following the levy date. Assessed values are
established by county assessors, subject to review by the county's Board of
Equalization.
28
CITY OF PARKVILLE, MISSOURI
NOTES TO BASIC FINANCIAL STATEMENTS -CONTINUED
DECEMBER 31, 2008
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -CONTINUED
Property Taxes
The City is permitted by Missouri state statutes to levy taxes up to $1.00 per $100 of
assessed valuation for general governmental services other than the payment of
principal and interest on long-term debt and in unlimited amounts for the payment of
principal and interest on long-tem1 debt.
The tax levy per $100 of assessed valuation which supports the 2008 budget was:
General Fund
General Revenue -Temporary
$ 0.4734
0.1250
$ 0.5984
Taxes receivable represent property taxes levied for 2007 and prior years that have
not yet been collected, net of estimated uncollectibles. The assessed value of
property located within the City totaled $167,927,385.
Prepaid Items
Certain payments to vendors reflect costs applicable to future accounting periods and
are recorded as prepaid items in both government-wide and fund financial statements.
Restricted Cash and Investments
The City is statutorily required to maintain customer utility deposits separate from
City assets. Restricted cash and investments are also set aside for debt service
payments and for required debt reserves.
Capital Assets
Capital assets, which include property, plant, equipment, infrastructure (e.g., roads,
bridges, sidewalks and similar items) and construction in progress are reported in the
applicable governmental or business-type activities columns in the government-wide
financial statements.
29
CITY OF PARKVILLE, MISSOURI
NOTES TO BASIC FINANCIAL STATEMENTS -CONTINUED
DECEMBER 31, 2008
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -CONTINUED
Capital Assets
As the City is a Phase III government under Governmental Accounting Standards
Board Statement No. 34 (GASB 34), it has elected to exercise its option to forego
retroactively reporting governmental infrastructure assets acquired prior to December
31, 2003. Governmental infrastructure assets on the statement of net assets include
only roads, bridges, sidewalks and similar items acquired subsequent to December 31,
2003.
Capital assets, excluding land, are defined by the City as assets with a cost of more
than $2,500 and an estimated useful life of at least one year. All land purchases are
capitalized regardless of cost. All purchased capital assets are valued at cost where
historical records are available and at an estimated historical cost where no historical
records exist. Donated capital assets are valued at their estimated fair market value on
the date received.
The costs of normal maintenance and repairs that do not add to the value of the asset
or materially extend the life of the asset are not capitalized.
Major outlays for capital improvements are capitalized as projects are constructed.
Interest incurred during the construction phase of capital assets of the business-type
activities is included as part of the capitalized value of the assets constructed. There
was no interest capitalized during the year ended December 31, 2008.
The City defines infrastructure as the basic physical assets that allow the City to
function. The assets include the street network, storm drainage network, and
pedestrian and vehicle bridges and buildings combined with the site an1enities such as
parking and landscaped areas used by the City in the conduct of its business. Each
major infrastructure network can be divided into subsystems. For example, the street
network can be subdivided into pavement, curbs, gutters, sidewalks, land, medians,
etc. These networks and subsystems are not delineated in the basic financial
statements.
Governmental street and parking lot assets are reported using the modified approach
as defined in GASB Statement 34 for infrastructure reporting of these assets. When
using the modified approach, only those projects that add efficiency or capacity to
street and parking lot assets are capitalized. Street and parking lot assets are not
depreciated. Expenditures that preserve those assets are expensed.
30
CITY OF PARKVILLE, MISSOURI
NOTES TO BASIC FINANCIAL STATEMENTS -CONTINUED
DECEMBER 31, 2008
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -CONTINUED
Capital Assets
Capital assets are depreciated usmg the straight-line method over the following
estimated useful lives:
Buildings
Sewer Plant and Collection System
Machinery and Equipment
Infrastructure
Compensated Absences
20 -40 years
20 -50 years
5 - 7 years
35 years
City policies permit full-time employees to accumulate sick pay benefits and vacation
time based on the number of years of service. Accumulated vacation payable is
accrued when incurred in the goverrunent-wide financial statements and proprietary
fund statements. In the goverrunental fund financial statements, a liability is accrued
when it has matured, for example, as a result of employee resignations and
retirements.
Long-Term Obligations
In the goverrunent-wide financial statements, and proprietary fund types in the fund
financial statements, long-term debt and other long-term obligations are reported as
liabilities in the applicable governmental activities, business-type activities, or
proprietary fund type statement of net assets. Bond premiums and discounts, as well
as issuance costs, are deferred and amortized over the life of the bonds using the
effective interest method. Bonds payable are reported net of the applicable bond
premium or discount. Bond issuance costs are reported as deferred charges and
amortized over the term of the related debt.
In the fund financial statements, goverrunental fund types recognize bond premiums
and discounts, as well as bond issuance costs, during the current period. The face
amount of debt issued is reported as another financing source. Premiums received on
debt issuances are reported as other financing sources while discounts on debt
issuances are reported as other financing uses. Issuance costs, whether or not withheld
from the actual debt proceeds received, are reported as debt service expenditures.
31
CITY OF PARKVILLE, MISSOURI
NOTES TO BASIC FINANCIAL STATEMENTS -CONTINUED
DECEMBER 31, 2008
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -CONTINUED
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
NOTE 2 -RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL
STATEMENTS
Explanation of Certain Differences between the Governmental Fund Balance Sheet
and the Government-Wide Statement of Net Assets
The governmental fund balance sheet includes a reconciliation between fund balance
-total governmental funds and net assets of governmental activities as reported in the
government-wide statement of net assets. One element of that reconciliation explains
that "long-term liabilities, including bonds payable, are not due and payable in the
current period and therefore are not reported in the funds." The details of this
$(15,542,447) difference are as follows:
Bonds Payable
Certificates of Participation Payable
Neighborhood Improvement District Limited General
Obligation Temporary Notes
Capital Leases Payable
Accrued Interest Payable
Compensated Absences
Issuance Discount
Cost oflssuance
Deferred Refunding Difference
Net Adjustment to Reduce Fund Balance
Total Governmental Funds to Arrive
at Net Assets -Governmental Activities
32
$ (3,200,000)
(6, 165,000)
(6,275,000)
(11,263)
(149,332)
(38,816)
50,066
219,962
26.936
$(] 5.542.44 7)
CITY OF PARKVILLE, MISSOURI
NOTES TO BASIC FINANCIAL STATEMENTS -CONTINUED
DECEMBER 31, 2008
NOTE 2 -RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL
STATEMENTS-CONTINUED
Explanation of Certain Differences between the Governmental Fund Statement of
Revenues. Expenditures and Changes in Fund Balances and the Government-Wide
Statement of Activities
The governmental fund statement of revenues, expenditures, and changes in fund
balances includes a reconciliation between net changes in fund balances -total
governmental funds and changes in net assets of governmental activities as reported
in the government-wide statement of activities. One element of that reconciliation
explains that "Governmental funds report capital outlays as expendih!fes. However,
in the statement of activities the cost of those assets is allocated over their estimated
useful lives and reported as depreciation expense." The details of this difference are
as follows:
Capital Outlay
Depreciation Expense
Net Adjustment to Increase Net Change in Fund
Balances -Total Governmental Funds to Arrive at
Change in Net Assets of Governmental Activities
$ 4,246,830
(277.077)
$ 3,969.753
Another element of that reconciliation states that "The issuance of Jong-term debt
(e.g., bonds, leases) provides cun-ent financial resources to governmental funds, whjJe
the repayment of the principal of long-tem1 debt consumes the cun-ent financial
resources of governmental funds. Neither transaction, however, has any effect on net
assets. Also, govermnental funds report the effect of issuance costs, premiums,
discounts, and similar items when debt is first issued, whereas these amounts are
defen-ed and amortized in the statement of activities." The details of this difference
are as follows:
Principal Repayments
General Obligation Bonds
Certificates of Participation
Leases
Net Adjustment to Increase Net Changes in Fund
Balances -Total Govermnental Funds to Arrive
at Changes in Net Assets of Govermnental Activities
33
$ 204,990
165,000
22.860
$ 39?.850
CITY OF PARKVILLE, MISSOURI
NOTES TO BASIC FINANCIAL STATEMENTS -CONTINUED
DECEMBER 31, 2008
NOTE 2 -RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL
STATEMENTS-CONTINUED
Explanation of Certain Differences between the Governmental Fund Statement of
Revenues, Expenditures and Changes in Fund Balances and the Government-Wide
Statement of Activities (Continued)
Another element of that reconciliation states that "Some expenses reported in the
statement of activities do not require the use of current financial resources and
therefore are not reported as expenditures in governmental funds." The details of this
$(16,728) difference are as follows:
Compensated Absences
Accrued Interest
Amortization oflssuance Costs
Amortization of Deferred Refunding Difference
Amortization of Bond Discounts
Accretion oflnterest -Capital Appreciation Bonds
Other
Net Adjustment to Decrease Net Changes in Fund
Balances -Total Governmental Funds to Arrive
at Changes in Net Assets of Governmental Activities
NOTE 3 -STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
Budgets and Budgetary Accounting
$ (24,174)
6,257
(12,634)
(5,413)
(2,782)
30,554
(8,536)
$(16.728)
Missouri statutes require that all political subdivisions of the State prepare an annual
budget. Governmental funds required to have legally adopted annual budgets are the
general fund, the special revenue funds, and the debt service fund. Legally adopted
annual budgets are not required for the capital projects fund and the permanent fund.
Annual budgets for all governn1ental funds are adopted using the modified accrual
basis of accounting, further modified by the encumbrance method of accounting, that
is, commitments such as purchase orders, contracts and other commitments, m
addition to disbursements and accounts payable are recorded as expenditures.
Budgeted expenditures cannot exceed budgeted revenues and unencumbered positive
fund balances as required by Section 67.010 RSMo.
34
CITY OF PARKVILLE, MISSOURI
NOTES TO BASIC FINANCIAL STATEMENTS -CONTINUED
DECEMBER 31, 2008
NOTE 3 -STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY -CONTINUED
Budgets and Budgetary Accounting
The appropriated budget is prepared by fund, function, and department. State statutes
set the legal level of budgetary control at the fund level (i.e., the level at which
expenditures may not legally exceed appropriations). Department heads may make
transfers of appropriations within their departments. Upon written request, the City
Administrator or the Board of Aldermen may by ordinance transfer part or all of any
unencumbered appropriate balance from one department to another.
The reported budgetary data represents the final approved budget after amendments
as adopted by the Board of Aldermen.
NOTE 4 -DEPOSITS AND INVESTMENTS
As of December 31, 2008, the City had the following deposits and investments:
US Treasuries
Deposits
Federated Treasury Obligation Fund
Reported
Amount/
Fair Value
$ 26,674
4,457,323
480 160
$ 4.964,157
Reconciliation of Government-wide Statement of Net Assets to total deposits and
investments:
Cash and Cash Equivalents
Restricted Cash and Investments
Total Deposits and Investments
35
$ 3,537,754
1.426,403
$ 4.964.157
CITY OF PARKVILLE, MISSOURI
NOTES TO BASIC FINANCIAL STATEMENTS -CONTINUED
DECEMBER 31, 2008
NOTE 4 -DEPOSITS AND INVESTMENTS -CONTINUED
Interest Rate Risk
Interest rate risk is the risk that changes in interest rates will adversely affect the fair
value of an investment. The City does not have a formal investment policy that limits
investment maturities as a means of managing its exposure to fair value losses arising
from increasing interest rates. It is the City practice to place operating funds in either
money market accounts or Treasury Bills with 3 to 6 month maturities. All longer
term investments are placed in certificates of deposit or Treasury securities having
maturities of 1 to 5 years. These consist of funds whose use is restricted and are
unlikely to be needed prior to maturity (e.g. the Fewson Trust and Sewer Debt
Reserve).
Credit Risk
Missouri statutes prohibit municipalities from investing in derivative, leveraged, or
speculative securities. City agents invest funds for restricted debt reserves and
unexpended debt proceeds in money market mutual funds, guaranteed investment
contracts and repurchase agreements. The City's investments in money market mutual
funds are rated AAA by Standard & Poor's, and the repurchase agreements and
guaranteed investment contracts are unrated.
Custodial Credit Risk-Deposits
In the case of deposits, this is the risk that in the event of a bank failure, the City's
deposits may not be returned. As of December 31, 2008, the carrying amount of the
City's deposits was $2,528,903. The City had bank balances of deposits of $4,457, 131
which were covered by federal depository insurance or by collateral held by the City's
agent in the City's name. The City does not have a formal deposit policy for custodial
credit risk. It is City practice to require banks to provide collateral equal to any
deposited amounts exceeding federal depository insurance limits.
Custodial Credit Risk-Investments
For an investment, custodial credit risk is the risk that, in the event of the failure of
the counterparty, the City will not be able to recover the value of its investments or
collateral securities that are in the possession of an outside party. At December 31,
2008, the City's investments were not exposed to custodial credit risk.
36
CITY OF PARKVILLE, MISSOURI
NOTES TO BASIC FINANCIAL STATEMENTS -CONTINUED
DECEMBER 31, 2008
NOTE S -CAPITAL ASSETS
Capital asset activity for the year ended December 31, 2008, was as follows:
Beginning
Balance Increases Decreases
Governmental Activities
Capital Assets not being Depreciated
Land $ 806,486 $ $
Construction in Progress 1,105,892 4,326,505
Infrastructure 3,410,303
Total Capital Assets not being Depreciated 5,322,681 4,326,505
Capital Assets being Depreciated
Buildings and Improvements 4,102,498
Machinery and Equipment 1,334,937 140,327 (64,718)
Infrastructure 44,663
Total Capital Assets being Depreciated 5,482,098 140,327 (64,718)
Less Accumulated Depreciation for
Buildings and Improvements (231,214) (98,125)
Machinery and Equipment (862,168) (170,676) (64,718)
Infrastructure (2,552) ( 1,276)
Total Accumulated Depreciation {1,095,934) (270,077) (64,718)
Total Capital Assets being Depreciated, Net 4,386,164 (129,750)
Governmental Activities Capital Assets, Net $ 9,708,845 $ 4,196,755 $
Business-type Activates
Capital Assets not being Depreciated
Land $ 59,975 $ $
Construction in Progress 136,854
Total Capital Assets not being Depreciated 196,829
Capital Assets being Depreciated
Buildings and Improven1ents 4,767,271 (31,275)
Machinery and Equipment 244,109 (49,703)
Infrastructure 1,847,350 (3,511)
Total Capital Assets being Depreciated 6,858,730 (84,489)
Less Accumulated Depreciation for
Buildings and lmproven1ents ( 1,474,425) (238,364)
Machinery and Equipment (182,479) (22,227) (49,703)
Infrastructure (575,015) (36,869) (3,511)
Total Accumulated Depreciation (2,231,919) (297,460) (53,214)
Total Capital Assets being Depreciated, Net 4,626,811 (297,460) (31,275)
Business-type Activities Capital Assets, Net $ 4,823,640 $ (297,460) $ (31,275)
37
Ending
Balance
$ 806,486
5,432,397
3,410,303
9,649,186
4,102,498
1,410,546
44,663
5,557,707
(329,339)
(968,126)
(3,828)
(l,301,293)
4,256,414
$13,905,600
59,975
136,854
196,829
4,735,996
194,406
1,843,839
6,774,241
(1,712,789)
(155,003)
(608,373)
(2,476, 165)
4,298,076
$ 4,494,905
CITY OF PARKVILLE, MISSOURI
NOTES TO BASIC FINANCIAL STATEMENTS -CONTINUED
DECEMBER 31, 2008
NOTE 5 -CAPITAL ASSETS -CONTINUED
Depreciation expense was charged to functions/programs of the primary government as
follows:
Governmental Activities
General Government
Public Safety
Public Works
Culture and Recreation
Total Depreciation Expense
Business-type activities
Water and Sewer
Total Depreciation Expense
38
$ 123,913
42,694
63,046
40,424
$ 270,077
$ 297,460
$ 297,460
CITY OF PARKVILLE, MISSOURI
NOTES TO BASIC FINANCIAL STATEMENTS -CONTINUED
DECEMBER 31, 2008
NOTE 6 -LONG-TERM OBLIGATIONS
The following is a summary of the debt transactions of the City for the year ended
December 31, 2008:
Governmental Activities
Bonds Payable
General Obligation Bonds
Accreted Interest Payable on Capital
Appreciation Bonds
Certificates of Participation
Neighborhood Improvement District
Limited Obligation Temp Notes
Less Deferred Amounts
For Issue Discounts
For Deferred Refunding Difference
Capital Leases
Compensated Absences
Governmental Activity Long-term
Liabilities
Business-type Activities
Bonds payable
Refunding Revenue Bonds
Plus Deferred Amounts
For Issue Premiums
Lease Purchase Agreement
Compensated Absences
Other
Business-type Activity Long-term
Liabilities
Beginning
Balance Additions Reductions
Ending
Balance
Due Within
One Year
$ 3,374,446
30,554
6,330,000
6,275,000
(52,848)
(102,933)
34,123
62,943
$
$15,951,285 "=$==~
$ 2,640,000 $
115,856
213,582
2,973 480
$ (174,446) $ 3,200,000
(30,554)
(165,000)
2,782
5,417
(22,860)
(24, 127)
6,165,000
6,275,000
(50,066)
(97,516)
11,263
38,816
$ 210,000
175,000
(2,782)
(5,417)
11,263
$ (408,788) $15,542,497 $ 388,064
$ (185,000) $ 2,455,000 $ 185,000
(7,241)
(7,874)
(I 0,953)
108,615
205,708
3,453
(I 0,953)
7,241
8,273
4,975
$ 2,972,411 $ 480 $ (211,068) $ 2,761,823 $ 205,489
~==-
Of the $3,200,000 in general obligation debt shown above, $3,080,000 1s special
assessment debt with governmental commitment.
For governmental activities, compensated absences and other long-term debt are
generally liquidated by the general fund.
39
CITY OF PARKVILLE, MISSOURI
NOTES TO BASIC FINANCIAL STATEMENTS -CONTINUED
DECEMBER 31, 2008
NOTE 6 -LONG-TERM OBLIGATIONS -CONTINUED
General Obligation Bonds
The City issues general obligation bonds to provide funds for the acquisition and
construction of major capital assets.
General obligation bonds currently outstanding consist of tl1e following:
General Obligation Bonds
Governmental Activities
Interest
Rates
Original
Issue
Series 1998 3.70% to 4.45% $ 325,000
Series 2001 4.50% to 5.50% 3,985,000
Final
Maturity
Date
9/1/2011
3/1/2021
$
$
Principal
Payments
During2008
4,446
170,000
174,446
Outstanding
December 3 I,
2008
$ 35,000
210,000
$ 245,000
The amrnal requirements to amortize governmental
outstanding as of December 31, 2008, are as follows:
activities general obligation bonds
2009
2010
2011
2012
2013-2017
2018-2022
40
Governmental Activities
Principal Interest
$ 210,000 $ 152,859
225,000 142,641
235,000 132, 140
200,000 121,313
1, 160,000 450,833
1,170,000 124,373
$ 3,200,000 $ 1,124,159
CITY OF PARKVILLE, l\11SSOURI
NOTES TO BASIC FINANCIAL STATEMENTS -CONTINUED
DECEMBER 31, 2008
NOTE 6 -LONG-TERM OBLIGATIONS -CONTINUED
General Obligation Debt Margin
The State Constitution pennits a city, by vote of two-thirds of the voting electorate, to
incur general obligation indebtedness for "city purposes" not to exceed 10% of the
assessed value of taxable tangible property and to incur additional general obligation
indebtedness not exceeding, in the aggregate, an additional 10% of the assessed value
of taxable tangible property for the purpose of acquiring rights-of-way, construction,
extending and improving streets and avenue and/or stonn sewer systems, and
purchasing or construction waterworks, electric, or other light plants, provided that
the total general obligation indebtedness of the City does not exceed 20% of the
assessed valuation of taxable property.
Certificates of Participation
The City issued certificates of participation series 2006 in the original amount of
$6,405,000 with interest rates ranging from 3.5% to 4.4% and with a final maturity in
2027. Principal payments are scheduled annually ranging from $75,000 to $490,000.
The balance at December 31, 2008, is $6,165,000.
Proceeds from the certificates of participation were used for City Hall renovation.
Rush Creek stabilization, land acquisition and other scheduled capital improvements.
The annual requirements to amortize these certificates of participation are as follows:
2009
2010
2011
2012
2013
2014-2018
2019-2023
2024-2027
41
Principal
$ 175,000
190,000
200,000
215,000
235,000
1,445,000
2,005,000
1,700.000
$ 6.165.000
Interest
$ 254,870
248,205
240,940
233,105
224,496
964,366
604,082
173.140
$ 2.943.204
CITY OF PARKVILLE, MISSOURI
NOTES TO BASIC FINANCIAL STATEMENTS -CONTINUED
DECEMBER 31, 2008
NOTE 6 -LONG-TERM OBLIGATIONS -CONTINUED
Neighborhood Improvement District Limited Obligation Temporary Notes
The City issued Neighborhood Improvement District Limited Financial Obligation
Temporary Notes Series 2006A and 2007 in the original amount of $3,575,000 and
$2, 700,000, respectively, with an interest rate of 4.0% and a final maturity of August
1, 2009. The balance at December 31, 2008 is $3,575,000 and $2,700,000,
respectively.
Proceeds from the temporary notes are to be used for the Brink Meyer Road
Neighborhood Improvement Project in the amount of $2,700,000 and the Brush
Creek Drainage Area Neighborhood Improvement Project in the amount of
$3,575,000.
The annual requirements to amortize these notes are as follows:
2009
Principal
$ 6,275,000
Interest
$ 629.808
Total
$ 6,904.808
The bonds were subsequently refinanced with a maturity date of201 l.
Capital Leases -Governmental Funds
The City has entered into a capital lease for autos. The annual debt service
requirements for the capital lease to be paid with governmental funds at December
31, 2008, is as follows:
Principal Interest Total
2009 $ 11,994 $ 547 $ 12.541
Revenue Bonds
The City issued Sewer System Refunding Revenue Bonds Series 1998 in the original
amount of$640,000 with interest rates ranging from 3.75% to 4.65% and with a final
maturity in 2011. Principal payments are scheduled annually ranging from $25,000 to
$70,000. The balance at December 31, 2008, is $195,000.
Series 1998 Sewer System Refunding Revenue or portions thereof maturing in 2007
and thereafter may be called for redemption and payment prior to the stated maturity
thereof on November 1, 2006 and thereafter in whole at any time or in part on any
interest payment date at par plus accrued interest.
42
CITY OF PARKVILLE, MISSOURI
NOTES TO BASIC FINANCIAL STATEMENTS -CONTINUED
DECEMBER 31, 2008
NOTE 6-LONG-TERM OBLIGATIONS -CONTINUED
Revenue Bonds
The bonds are special obligations of the City payable solely from, and secured as to
the payment of principal and interest by a pledge of, the net income and revenues
derived from the operation of the system. The bonds shall not be or constitute a
general obligation of the City.
The City issued Sewerage System Revenue Bonds Series 2004 in the original amount
of $2,740,000 with interest rates ranging from 3.0% to 5.25% and with a final
maturity in 2025. Principal payments are scheduled annually ranging from $30,000 to
$170,000. The balance at December 31, 2008, is $2,260,000.
Series 2004A Sewage System Refunding Revenue Bonds are special, limited
obligations of the City payable solely from, and secured by a pledge of, the net
revenues. The taxing power of the City is not pledged to the payment of the bonds.
The bonds do not constitute a general obligation of the City or an indebtedness of the
City within the meaning of any constitutional, statutory or charter provision,
limitation or restriction.
Bonds maturing on January I, 2015, and thereafter may be called for redemption and
payment prior to maturity in whole or in part on any date with the consent of the
bondholder, or on each June I and December 1, commencing December l, 2013, at
the redemption price of 100% of principal amount of the bonds redeemed, plus
accrued interest to the redemption date. Bonds maturing on January 1, 2019, January
1, 2020, and January l, 2021, are not subject to redemption prior to maturity.
The annual requirements to amortize these bonds outstanding as of December 31,
2008, are as follows:
Princigal Interest
2009 $ 185,000 $ 113,290
2010 195,000 106,870
2011 205,000 97,413
2012 135,000 89,702
2013 140,000 84,978
2014-2018 740,000 327,438
2018-2023 825,000 86,826
2024-2028 30.000 1.350
$ ') .455,000 $ 907.867
43
CITY OF PARKVILLE, MISSOURI
NOTES TO BASIC FINANCIAL STATEMENTS -CONTINUED
DECEMBER 31, 2008
NOTE 6-LONG-TERM OBLIGATIONS -CONTINUED
Lease Purchase Agreement
In July 2003, the City entered into a lease-purchase agreement wherein the City sold
its sewer plant for $585,000 and leased it back for a period of twenty-two years. The
proceeds from the lease-purchase were used to make certain improvements to the
sewer plant property. Under the lease the City will have the full use of the property
and will make rental payments, which will apply to the principal and interest under
the lease.
Required payments under the lease purchase agreement on the sewer plant are as
follows:
2009
2010
2011
2012
2013
2014-2018
2019-2023
2024-2028
Defeased Debt
Principal
$ 8,273
8,691
9,131
9,594
10,079
58,588
74,997
26.355
$ 205.708
Interest
$ 10,183
9,764
9,325
8,862
8,377
33,692
17,282
I 329
$ 98.814
In prior years, the City defeased certain bonds by placing the proceeds of new bonds
in an irrevocable trust to provide for all future debt service payments on the old
bonds. Accordingly, the liability for the defeased bonds is not included in the City's
financial statements.
Combined Waste Water and Sewerage Revenue Bonds
The Sewerage Revenue Bond ordinance requires that the Sewerage System Fund be
accounted for in a separate Enterprise Fund. It also requires that, after sufficient
current assets have been set aside to operate the system, all remaining monies held in
the Sewerage System Fund be segregated and restricted in separate special reserves
and accounts. In accordance with the bond ordinance, these bonds are serviced by the
Sewerage System Fund operations and are included as a liability of that fund.
44
CITY OF PARKVILLE, MISSOURI
NOTES TO BASIC FINANCIAL STATEMENTS -CONTINUED
DECEMBER31, 2008
NOTE 6 -LONG-TERM OBLIGATIONS -CONTINUED
Restricted assets of the principal and interest account are to be used for payment of
current principal and interest on bonds. Restricted assets of debt service are available
to pay principal and interest in the event of a deficiency in the principal and interest
account. Restricted assets of the depreciation and replacement account are available
to operate, maintain, or improve the system, call bonds or for payment of debt service
in the event of a deficiency in other restricted assets.
NOTE 7 -RISK MANAGEMENT
The City is exposed to various risks of loss related to torts; theft of, damage to, and
destrnction of assets; errors and omissions; employee injuries and illnesses; natural
disasters; and employee health, dental and accident benefits. To protect itself against
risks of loss, the City is a member of the Mid-America Regional Council Insurance
Trust (MARCIT), a not-for-profit corporation consisting of governmental entities
incorporated in 1984 to acquire insurance for its members. MARCIT operates as a
purchasing pool and is not a joint venture activity of the City. The City has no control
over budgeting, financing, management selection, or the governing body. MARCIT
provides both conventional and self-insurance coverage for its members, including
medical, dental, property, casualty, general liability, and workers' compensation. The
City participates in property, casualty, general liability, and workers' compensation
insurance coverage through MARCIT.
MARCIT manages the cash and investment pool, funded by insurance premiums, on
behalf of its members. MARCIT's investment pool consists of interest-bearing
deposits, U.S. Treasury strips, U.S. Governmental agency obligations, and
collateralized mortgage obligations.
In the event that a deficit occurs with respect to any fiscal year ofMARCIT for which
the City was a participant at any time during such year, and in the event that
MARCIT detern1ines that an assessment is required in order to provide additional
funds for the obligations of MARCIT for such year, and further, in the event that the
City was covered by the types of benefits requiring the assessment during the time
period in which the assessment arose, the City is obligated to pay its pro rata share of
any such assessment whether or not the City is a member of MARCIT at the time of
such assessment. Management of the City is not aware of any deficit situation in
MARCIT that would require an accrual of a liability as of December 31, 2008.
45
CITY OF PARKVILLE, MISSOURI
NOTES TO BASIC FINANCIAL STATEMENTS -CONTINUED
DECEMBER 31, 2008
NOTE 7 -RISK MANAGEMENT-CONTINUED
MARCIT's financial statements are presented in its Comprehensive Annual Financial
Report for the year ended December 31, 2008.
There has been no significant change in insurance coverage from the previous fiscal
year. Settled claims have not exceeded insurance coverage in any of the past three
years.
Retirement Plan
The City retirement plan consists of individual retirement accounts established for
employees. All full-time employees after six months of service are eligible to
participate. The City contributes five percent of the employee's gross earnings on a
monthly basis to the individual retirement accounts. The City's contributions for the
year ended December 31, 2008, were $70,900.
Investments -Trust Fund
The City of Parkville was the recipient of funds from a resident's estate during
calendar year 2002. The funds are held by a trustee for the benefit of the City. The
trustee of the fund is to distribute one-half of the income from the fund to be used on
various city projects. The balance of the annual net income is to be reinvested in the
principal of the fund. The trust fund is to remain in existence for twenty-one years
from the date of the death of the Trustor, April 9, 2001. On that date, April 9, 2022,
the balance remaining in the fund is to be distributed to the City. At December 31,
2008, the trust assets had an account balance of $534,391 which are recorded in the
permanent trust fund.
NOTE 8 -COMMITMENTS AND CONTINGENCIES
Litigation
The City is a defendant in various lawsuits relating to easements, condemnations and
other matters as a result of the ordinary course of City activities. The City's
management and legal counsel anticipate that the potential claims against the City not
covered by insurance, if any, resulting from such matters would not materially affect
the financial position of the City.
46
CITY OF PARKVILLE, MISSOURI
NOTES TO BASIC FINANCIAL STATEMENTS -CONTINUED
DECEMBER 31, 2008
NOTE 9 -INTER-FUND TRANSACTIONS
Inter-fund transfers for the year ended December 31, 2008, consisted of the
following:
Transfer to capital projects fund from:
General fund $ 185.000
Transfer to debt service fund from:
Capital projects fund $ 185.000
Transfer to non-major govermnental funds from:
General fund $ 92.485
Transfer to non-major proprietary fund from:
General fund $ 9?,485
Transfers are used to (1) move revenues from the fund that statute or budget requires
to collect them to the fund that statute or budget requires to expend them, (2) move
receipts restricted to debt service from the funds collecting the receipts to the debt
service fund as debt service payments become due, and (3) use unrestricted revenues
collected in the general fund to finance various programs accounted for in other funds
in accordance with budgetary authorizations.
NOTE IO-SUBSEQUENT EVENT
On August I, 2009, the City refinanced the Neighborhood Improvement District
Limited Financial Obligation Temporary Notes, Series 2006A and 2097, in the
amount of $3,575,000 and $2,700,000 respectively. Both obligations have been
refinanced at 2.25% and are due in August 2011. The City borrowed an additional
$425,000 on the 2006A note which is to be placed in a construction fund and used for
additional costs incurred.
Note 11 -PRIOR PERIOD ADJUSTMENTS
Certain adjustments were required to the prior year financial statements as a result of
the recording of certain asset and liabilities by the prior auditor.
47
CITY OF PARKVILLE, MISSOURI
REQUIRED SUPPLEMENTARY INFORMATION
DECEMBER 31, 2008
Information needed to support the use of the Modified Approach for Infrastructure
Reporting:
Street and Parking Lot Assets
The street and parking lot condition rating is accomplished every other year or triennially.
Every street and parking lot of Parkville is visually rated for observed structural conditions to
determine the level of preservation need. The field rating reflects the condition of the type of
street or parking lot being reviewed. It is the City's goal to repair all streets and parking lots
rated at a 6.0 or above and to maintain all streets within the City at a service level of 5.0 for
each respective type of street or parking lot.
A field rating scale has been developed to indicate the overall condition of the observed
street or parking lot.
1 Indicates an equivalent of a newly constructed street or parking lot (crack sealing and
minor patching)
2 Indicates slight imperfections in the street or parking lot condition (crack sealing, slurry
sealing, and/or patching)
3 Indicates some deterioration has occurred and minor maintenance may be required (street
or parking lot needs various repairs to maintain condition; patches; possible milling and
overlay)
4 Indicates noticeable deterioration maintenance is required (deterioration is significant and
visually noticeable; repair mill and overlay)
5 Indicates significant maintenance is required (considerable cracking, potholes or other
fatigue demands repair work and overlay)
6 Indicates serious deficiency (deterioration mandates edge milling (to prevent total base
failure) needs overlay)
7 Indicates severe deficiency (severe deterioration needing various repairs)
8 Indicates major failure (some good street is left within a total replacement street or
parking lot condition)
48
9 Indicates nearly total replacement is required (limited salvage of street or parking lot area
is possible)
10 Indicates total replacement is required.
While the City has goals to maintain these systems at higher levels, minimum acceptable
condition levels have been defined as having at least 80 percent of the streets and parking lots
at or below a rating of 5. The following table compares the minimum acceptable condition
levels with the actual condition levels for the current and prior years.
Fiscal
Year
2005
2006
2007
2008
Minimum
Acceptable
Condition Level*
80
80
80
80
Actual Condition
Level*
94
94
94
94
* Percentage of streets and parking lots rated a 5 or below
The City's goal is to continually improve the condition of its streets and parking lots. To
achieve this goal, it is necessary to perform maintenance activities and replace those assets
that can no longer be economically maintained. To maintain the City's streets and parking
lots at or above the stated minimum condition level, it is estimated that annual preservation
and replacement expenditures must exceed $292,000 annually. The following table compares
the estimated expenditures needed to maintain the system at a minimum acceptable condition
level with actual amounts spent for the current and prior years.
Fiscal Estimated Actual
Year Exgenses Exgenses
2005 $246,519 $241,190
2006 $292,227 $292,579
2007 $246,819 $213,183
2008 $256,481 $246,886
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OTHER SUPPLEMENTARY INFORMATION
50
Reserve
Funds
Assets
Cash and Cash Equivalents $ 465,064
Restricted Cash and Investments
Other Receivables
Total Assets $ 465,064
Liabilities
Accounts Payable 2,156
Fund Balances
Unreserved, Reported in:
Special Revenue Funds 462,908
Pennanent Fund
Total Fund Balances 462,908
Total Liabilities and Fund Balances $ 465,064
CITY OF PARKVILLE, MISSOURI
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2008
S[!ecial Revenue
Municipal Equip Guest Room Nature Pnrk
Reserve Tnx Sanctua!}' Donations
$ $ 14,078 $ 29,205 $ 3,788
$ $ 14,078 $ 29,205 $ 3,788
14,078 29,205 3,788
14,078 29,205 3,788
$ $ 14,078 $ 29.205 $ 3,788
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Parkland Train Depot
Dedication Restoration
$ 46,794 $ 2,397
-
$ 46,794 $ 2,397
46,794 2,397
46,794 2,397
$ 46,794 $ 2,397
Court
RecouEment Fees
Assets
Cash and Cash Equivalents $ 23,711
Restricted Cash and Investments
Other Receivables
Total Assets $ 23,711
Liabilities
Accounts Payable
Fund Balances
Unreserved, Reported in
Special Revenue Funds 23,711
Pennnnent Fund
Total Fund Balances 23,711
Total Liabilities and Fund Balances $ 23,711
CITY OF PARKVILLE, MISSOURI
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2008
S ecial Revenue
Police Training TIF
Fees-LET Court Develo~ment
$ 24,862 $ 11,531 $ 12,515
$ 24,862 $ 11,531 $ 12,515 $
11,531
24,862 12,515
24,862 12,515
$ 24,862 $ 11,531 $ 12,515 $
52
Pennanent Total
Fe\vson Governmental
Total Project Funds
633,945 $ $ 633,945
534,391 534,391
-
633,945 $ 534,391 $ 1,168,336
13,687 13,687
620,258 620,258
534,391 534,391
620,258 534,391 I, 154,649
633,945 $ 534,391 $ 1,168,336
CITY OF PARKVILLE, MISSOURI
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2008
S ecial Revenue
Reserve Municipal Equip Guest Room Nature Purk Parkland Train Depot
Funds Reserve Tax Sane tu~ Donations Dedication Restoration
Revenues
Investment Earnings $ (30) $ $ $ $ $
TIF Revenue
rvrisccllaneous 14,179 13,796 6,026 6,550
Total Revenues 14,149 13,796 6,026 6,550
Expenditures
Current
General Government 22,412 6,115 5,214 4,483
Debt Service
Principle
Interest
TIF Expense
Capital Outlay 6,703 157,443
Total Expenditures 29,115 163,558 5,214 4,483
Excess (Deficiency) of Revenues
Over (Under) Expenditures (14,966) (149,762) 812 2,067
Other Financing Sources (Uses)
Transfers In (Out) (47,052) 139,537
Capital Leases
Total Other Financing Sources (47,052) 139,537
Net Change in Fund Balances (62,018) (10,225) 812 2,067
Fund Balances, Beginning of Year 524,926 10,225 13,266 27,138 3,788 46,794 2,397
Fund Balances, End of Year $ 462,908 $ $ 14,078 $ 29,205 $ 3,788 $ 46,794 $ 2,397
53
CITY OF PARKVILLE, MISSOURI
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2008
Special Revenue Permanent Total
Nonrnajor
Court Police Training TIF Fe\vson Governmental
Recoupment Fees Fees -LET Court Development Total Project Funds
Revenues
Investment Earnings $ $ $ $ t,t54 $ 1,124 $ 35,194 $ 36,318
TIF Revenue -421,422 421,422 421,422
Miscellaneous 2,984 5,471 49,006 49,006
Total Revenues 2,984 5,471 422,576 47t,552 35,194 506,746
Expenditures
Current
General Government 3,792 42,016 15,654 57,670
Debt Service
Principle
Interest
TIF Expense 422,575 422,575 422,575
Capital Outlay 164,146 164,146
Total Expenditures 3,792 422,575 628,737 15,654 644,391
Excess (Deficiency) of Revenues
Over (Under) Expenditures 2,984 t,679 I (157,185) 19,540 (137,645)
Other Financing Sources (Uses)
Transfers Jn (Out) 92,485 92,485
Capital Leases
Total Other Financing Sources 92,485 92,485
Net Change in Fund Balances 2.984 1,679 I (64, 700) t9,540 (45,160)
Fund Balances, Beginning of Year 20,727 23,t83 12,514 684,958 514,851 I, 199,809
Fund Balances, End of Year $ 23,711 $ 24,862 $ $ 12,515 $ 620,258 $ 534,391 $ J,t54,649
54