HomeMy Public PortalAbout2014 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, 2014
CITY OF PARKVILLE, MISSOURI
TABLE OF CONTENTS
Independent Auditor's Report ..................................................................................................... 1 -2
Management's Discussion and Analysis ..................................................................................... 3 -11
Basic Financial Statements
Government-wide Financial Statements
Statement of Net Position ............................................................................................... 12
Statement of Activities ................................................................................................... 13
Fund Financial Statements
Governmental Funds
Balance Sheet .......................................................................................................... 14
Reconciliation of the Balance Sheet oftl1e Governmental Funds to the
Statement of Net Position .................................................................................. 15
Statement of Revenues, Expenditures and
Changes in Fund Balances -Governmental Funds ........................................... 16 -I 7
Reconciliation of the Statement of Revenues, Expenditures and
Changes in Fund Balances of Governmental Funds to the
Statement of Activities ................................................................................ 18
Proprietary Funds
Statement of Net Position ......................................................................................... 19
Statement of Revenues, Expenditures and Changes in Fund Balances .................... 20
Statement of Cash Flows .......................................................................................... 21
Agency Funds
Statement of Assets and Liabilities .......................................................................... 22
Notes to Basic Financial Statements ..................................................................................... 23 -53
Required Supplementary Inforn1ation
Schedule of Revenues, Expenditures, and Changes in Fund Balances,
Budget and Actual General Fund ............................................................................. 54-58
Schedule of Funding Progress ............................................................................................... 59
Other Supplementary Information
Combining and Individual Fund Statement Schedules
Combining Balance Sheet-Nonmajor Governmental Funds ........................................ 61 -62
Combining Statement of Revenues, Expenditures and Changes in Fund
Balances -Nonmajor Governmental Funds ............................................................. 63 -64
Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance and
Other Matters Based on an Audit of Financial Statements Performed in
Accordance with Government Auditing Standards ..................................................................... 65 -66
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, as of and for the year ended December 31, 2014, and the related notes
to the financial statements, which collectively comprise the City's basic financial statements
as listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial
statements in accordance with accounting principles generally accepted in the United States
of America; this includes the design, implementation, and maintenance of internal control
relevant to the preparation and fair presentation of financial statements that are free from
material misstatement, whether due to fraud or error.
Auditor's Responsibility
My responsibility is to express opinions on these financial statements based on my audit. I
conducted our audit in accordance with auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States. Those standards
require that I plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor's
judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity's preparation and fair presentation of the
financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
entity's internal control. Accordingly, I express no such opinion. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.
I
I believe that the audit evidence I have obtained is sufficient and appropriate to provide a
basis for my audit opinions.
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, 2014, and the respective changes in financial
position and, where applicable, cash flows thereof for the year then ended in accordance with
accounting principles generally accepted in the United States of America.
Other Matters
Required Supplementmy Information
Accounting principles generally accepted in the United States of America require that the
budgetary comparison information, and the schedule of funding progress as listed in the table
of contents presented to supplement the basic financial statements. Such information,
although not a part of the basic financial statements, is required by the Governmental
Accounting Standards Board, who considers it to be an essential part of financial reporting
for placing the basic financial statements in an appropriate operational, economic, or
historical context. I have applied certain limited procedures to the required supplementary
information in accordance with auditing standards generally accepted in the United States of
America, which consisted of inquiries of management about the methods of preparing the
information and comparing the information for consistency with management's responses to
my inquiries, the basic financial statements, and other knowledge I obtained during my audit
of the basic frnancial statements. I do not express an opinion or provide any assurance on the
information because the limited procedures do not provide us with sufficient evidence to
express an opinion or provide any assurance.
Gladstone, Missouri
August 5, 2015
2
CITY OF PARKVILLE, MISSOURI
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, 2014. We encourage readers to consider the
information presented here in conjunction with additional information that we have furnished
in our letter of transmittal.
Financial Highlights
1. The City's total net position increased by $549,202. The net position increase is
found in govermnental activities where there is a positive $371,541 net change, and a
positive $177,661 increase in net position reported in business-type activities. The
only business type activity operated by the City is the sewer system. The City's total
net position increased $868,148 in 2013 ($839,404 increase in govermnent activities
and $29,108 in business type activities).
2. The City refinanced the temporary notes on the Brush Creek Sewer Project and Brink
Myers Road Project into long term bonds. The City now has twenty year financing on
both projects. The first assessments were due December 31, 2014, for debt payments
beginning in 2015. Approximately 40% of total assessments were paid. The City is
vigorously pursuing its options to enforce payment and is financially positioned to
cover all debt payments in the interim with emergency reserves if needed.
3. The City continued to pay down its existing debt aside from the temporary notes as
indicated above. Debt connected with the general government activities decreased
$520,000 and the debt connected with the business activities decreased $150,590.
4. As of the close of the current year, the City's government funds showed a combined
ending balance of $5,758,998, an increase of $1,116,218 from the prior year. Much of
the increase comes from the debt refinancing requiring that debt reserve funds. In
2013, the City showed a decrease in government funds of $178,988.
5. Major capital expenditures were made to complete the Brink Myers Road Project.
The City spent money for some equipment and made a major expenditure on a park
building.
6. The City completed a major sewer plant expansion in 2014. The project involves
construction of a UV disinfectant chamber to meet EPA requirements.
7. Subsequent to December 31, 2014, the City retired the capital lease connected with
the sewer plant that provided a good use of funds.
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the City's basic
financial statements. The City's basic financial statements comprise three components;
govermnent-wide financial statements (Pages 12 through 13), fund financial statements
(Pages 14 through 22), and notes to the financial statements beginning on Page 23. This
report also contains other supplementary information in addition to the basic financial
statements themselves.
3
Government-wide Financial Statements. The government-wide financial statements (Pages
12 -13) are designed to provide readers with a broad overview of the City's finances, in a
manner similar to a private-sector business.
The statement of net position (Page 12) presents information on all of the City's assets and
liabilities, with the difference between the two reported as net position. Over time, increases
or decreases in net position may serve as a useful indicator of whether the financial position
of the City is improving or deteriorating.
The statement of activities (Page 13) presents information showing how the government's net
position 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 flows. 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 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 foes and charges (business-type activities). The governmental activities of the
City include general government, public safety, streets, economic development, and culture
and recreation. The business-type activities of the City include sewer service.
Fund Financial Statements Afimd 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, like other state and local governments, uses fuod accounting to ensure and demonstrate
compliance with finance-related legal requirements. All of the funds of the City can be
divided into two categories: governmental fuods and proprietary funds.
Govemmental F1111ds Governmental fimds are used to account for essentially the same
fuoctions 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 inflows 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 government's near-term financing requirements.
Because the focus of governmental fuods is narrower than that of the government-wide
financial statements, it is useful to compare the information presented for governmental 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 maintains five 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, transportation
special revenue fund, capital projects fund, debt service fund, and the reserve 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 adopts an annual appropriated budget for its general fund for the operation of the
sewer department. 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 I 4 through I 8 of
this report.
Proprietary F1111ds The City maintains one type of proprietary fund. Ente1prise fimds are
used to report the same functions presented as business-type activities in the government
wide financial statements. The City uses enterprise funds to account for its sewer service
operations.
Proprietary funds provide the same type of information as the government-wide financial
statements, only in more detail. The proprietary fund is a major fund of the City.
The basic proprietary fund financial statements can be found on Pages I 9 through 21 of this
report.
Agency F1111ds The agency funds held by the City are for court bonds paid by defendants and
funds held in a settlement for property taxes payable in future years.
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 23 through 51 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'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 provides an up-to-date inventory of eligible assets by location, type and
physical parameters and performs replicable condition assessments, triennially. Results are
5
summarized using a measurement scale, seen on Pages 55 -56 of this report. Estimated
amounts needed to maintain and preserve these assets at the City's established service level
are budgeted for annually. This City has also provided information on the funding of its
pension plan through LAGERS in this section of the audit.
The combining and individual fund statements referred to earlier in connection with non
major or governmental funds are presented on Pages 61 through 64 of this report.
Government-wide Financial Analysis
As noted earlier, net position may serve over time as a useful indicator of a government's
financial position. In the case of the City, assets exceeded liabilities by $8,987,561 at the
close of the most recent fiscal year.
Govemmental Activities Governmental activities increased the City's net position by
$371,541.
B 11si11ess-type Activities During the year, the change in net pos1t10n for business-type
activities increased net assets by $177,661. The net assets for business-type activities in the
current fiscal year are $3,400,421.
Financial Analysis of the Government's Funds
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with
finance-related legal requirements.
Governmental F1111ds The focus of the City'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's financing requirements. In particular, unreserved fund balances
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's
governmental funds reported combined ending fund balances of $5,761,810. Of that,
$2,954,499 is non-spendable, restricted or assigned for various purposes.
The general fund is the chief operating fund of the City. At the end of the current fiscal year
the general fund balance was $1,296,496, an increase of $336,062. As a measure of the
general fund's liquidity, it is useful to compare both unreserved fund balance to total fund
expenditures. Unreserved, undesignated fund balance represents 36% of total general fund
expendihrres. That compares favorably with a 28% of general fund expendihrre in 2013.
The City's fund balance of the general fund increased by $336,061 during the current fiscal
year. The City's 2013 revenues and transfers in from other funds totaled $4,318,432 which is
$158,345 higher than 2013. The City's 2014 expenses and transfers out to other funds totaled
$3,982,080, which is $112,242 less than 2013.
6
The debt service fund has a total fund balance of$1,215,795, all of which is reserved for the payment of
bond principal, interest and fees. There was a net increase in the debt service fund balance of$95,713.
Expenses in the debt service fund exceeded revenue by $125,226. This was offset by transfers to the
debt service fund of$220,939.
The capital projects fund has a total fund balance of $693,772. The notes payable in connection with
Brink Myers Road Project and Brush Creek Sewer Project were refinanced during the year requiring
large debt reserves.
The City uses capital assets to provide services to citizens; consequently, these assets are not
available for future spending. Although the City'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.
CITY OF PARKVILLE, MISSOURI
NET POSITION SUMMARY
DECEMBER 31, 2014 AND 2013
Governmental Activities Business-t}'.Ee Activities Total
2014 2013 2014 2013 2014 2013
Cush $ 5,816,263 $ 4,872,416 $ 1,175,331 $ 1,106,308 $ 6,991,594 $ 5,978,724
Account Receivables 2,399,164 1,744,044 95,077 105,141 2,494,241 1,849,185
Capital Assets 16,334,878 16,399,235 3,862,277 4,119,971 20,197,155 20,519,206
Other Assets 84,969 244,779 1,839 82,499 86,808 327,278
Total Assets $ 24,635,274 $ 23,260,474 $ 5,134,524 $ 5,413,919 $ 29,769,798 $ 28,674,393
Account Payables $ 260,731 $ 478,014 $ 43,398 $ 259,545 $ 304,129 $ 737,559
Unearned Revenue 1,590,255 1,590,255
Bonds and Notes Payable 16,160,246 15,528,413 1,675,620 1,834,129 17,835,866 17,362,542
Other Liabilities 347,061 150,456 15,085 15,579 362,146 166,035
Total Liabilities 16,768,038 17,747,138 1,734,103 2,109,253 18,502,141 19,856,391
Deferred Inflo\vs of Resources
Property Taxes
-Subsequent Year 2,280,096 2,280,096
1..iet Position 5,587,140 5,513,336 3,400,421 3,304,666 8,987,561 8,818,002
Total Liabilities
and Net Position $ 24,635,274 $ 23,260,474 $ 5,134,524 $ 5,413,919 $ 29,769,798 $ 28,674,393
7
CITY OF PARKVILLE
STATEMENT OF ACTIVITIES SUM~IARV
FOR TIIE YEARS ENDED DECE!HBERJI, 2014 AND 2013
Governmental Activities Business-t}'.EC Aclivitics Total
2014 2013 2014 2013 2014 2013
Program Revenues
Charges for Services $ 660,567 $ 519,975 $ 1,093,424 $ 995,785 $ 1,753,991 $ l,515,760
Capital Grunts nnd
Contributions 39,577 462,702 39,577 462,702
General Revenues
Property Ta"<es 1,564,539 1,392,706 1.564,539 1,392,706
Franchise Ta"<es 1,048,320 846,520 l,048,320 846,520
Sales Tuxes 1,569,034 1,408,629 1,569,034 1,408,629
lnvcsLinent Earnings 25,189 36,372 25,189 36,372
lntergovcmmentul 369,860 317,827 369,860 317,827
Sewer Admin Fee 100,000 100,000 100,000 100,000
TIF 436,968 408,625 436,968 408,625
Other 109,959 159,071 8,981 10,404 118,940 169,475
Total Revenues 5,924,013 5,652,427 1,102,405 1,006,189 7,026,418 6,658,616
Expenses
General Government 965,064 1,003,472 965,064 1,003,472
Public Safety-Police 1,132,022 1,098,927 1,132,022 1,098,927
Public Safety-Court 141,034 135,530 141,034 135,530
Public Works 812,168 1,030,345 812,168 973,772
Economic Development 252,486 274,998 3,050,288 3,211,701
Depreciation 251,002 243,545 251,002 243,545
Amortization 20,833 20,833
TIF 433,247 413,460 433,247 413,460
Interest and Fees 636,129 290,939 636,129 290,939
Other Capital Expenditures 421,874 154,291 421,874 154,291
Financing Costs 182,044 174,616 182,044 174,616
Brink Meyer Road Expense 316,466 316,466
Other 8,936 8,936
Sewer 924,744 949,512 924,744 949,512
Total Expenses 5,552,472 4,840,956 924,744 949,512 6,477,216 5,790,468
Change in Net Assets Before Transfer 371,541 811,471 177,661 56,677 549,202 868,148
Transfer 27,569 (27,569)
Change in Net Assets Aficr Transfer $ 371,541 $ 839,040 $ 177,661 $ 29,108 $ 549,202 $ 868,148
8
PropriefmJI Funds The City's proprietary funds provide the same type of infonnation found
in the government-wide financial statements, but in more detail. The net position of the
sewer service at the end of the year total $3,400,421. The sewer fund had revenues exceeding
expenditures by $177,661 in 2014. This compares favorably with an increase in the net
assets of$29,108 in 2013.
Capital Asset and Debt Administration
Capital Assets The City's investment in capital assets for its governmental and business-type
activities as of December 31, 2014, totals $11,724,379. The largest capital expenditure was
connected with a park building. The City completed work on two real estate projects during
the year. The investment in the projects is shown on the Statement of Net Position as Land
Held for Investments and the amount has been removed from Construction in Process.
Land
Buildings and Improvements
Machinery and Equipment
Infrastructure
Construction in Process
Total
City of Parkville, Missouri
Capital Assets {Net of Depreciation)
Governmental Activities Business-type Activities
2014 2013 2014 2013
$ 869,880 $869,880 $ 59,975 $ 59,975
3,284,127 3,310,108 2,255,875 l,973,41 l
299,263 335,087 48,825 72,315
3,408,832 3,411,384 l,497,602 1,547,465
8,472.776 466.805
Total
2014
$ 929,855
5,540,002
348,088
4,906,434
LJ.86? 102 $16.399.235 Ull.62.2-1'.ZU l 19.'l7l $11.724.17.2
2013
$ 929,855
5,283,519
407,402
4,958,849
7,743.129
$20 519,206
Additional infonnation on the City's capital assets can be found in Note 5 of this report.
9
Long-Term Debt At the end of the current fiscal year, the City had total debt (bonds and
leases) outstanding of$17,835,866.
Certificates of Participation
NID Limited Obligation
Temporary N ates
NID General Obligation Bonds
River Park
Brush Creek
Brink Meyer
Revenue Bonds (SRF) 2004A
Capital Leases/
Lease-Purchase
Deferred Amounts
Total
City of Parkville, Missouri
Outstanding Debt
Governmental Activities Business-tyge Activities
2014 2013 2014 2013
$ 4,866,626 $ 5,150,000 $ - $
8,460,000
1,755,000 2,025,000
5,596,310
3,942,310
1,455,000 1,595,000
149,350 159,940
(106.587) 71.270 79.189
lli,]60 246 $15 5?8,4]3 $.1,675 620 $] 834..12.2
Total
2014 2013
$ 4,866,626 $5,150,000
8,460,000
1,755,000 2,025,000
5,596,310
3,942,310
1,455,000 1,595,000
149,350 159,940
71 270 (27,398)
$17,835.866 $11362.542
The general government indebtedness increased $631,833 and the business government
indebtedness decreased $158,509.
Economic Factors and Next Year's Budgets and Rates
City of Parkville revenue for 2015 is projected to show modest gains over 2014 as economy
activity within the City and the region continues to improve. The City's property tax revenue
will increase by about 2.8% over 2014. This continues a pattern of stable real estate values
coupled with an increasing pace of new construction since 2011. A dramatic increase in
residential construction began in early 2013 and is continuing into 2015, with new building
permits being issued at a pace not seen since before the recession. At the same time,
residential property sales have strengthened with the improving real estate market. This
bodes well for City revenue for 2015 and beyond as the tax base continues to grow.
Commercial construction has also continued to increase with several projects under
development during 2015. These properties should produce additional property and sales ta'<
revenue in future years. At the same time, vacancy rates for existing commercial properties
have remained fairly stable, with sufficient market demand for vacated commercial space to
maintain good occupancy levels. These increases in residential and commercial properties
should add 2 to 3% to the property tax base for 2016. Since franchise taxes correlate with the
number of homes and commercial buildings in use, this revenue should keep pace with
continued development. The strong construction environment should ensure that building
permit fee revenue reaches 2015 budget expectations.
While the overall economy has improved, the City's sales tax base has come under pressure
from competition from businesses located outside the City, including expansion of a nearby
specialty shopping district. The overall effects of this competition appear to have been
minimal, with sales la'< receipts for the first 5 months of 2015 exceeding the same 2014
10
period by nearly 5%, which, in turn, was up 5% over 2013. If this trend continues, 2015
sales tax revenue wiJI be 6% or more above the level that was budgeted. Overall, the City's
General Fund 2015 revenue is expected to reach or exceed the budgeted total.
As in prior years, the City has budgeted cautiously, holding 2015 revenue and expenditure
budgets at near 2014 levels. However, City personnel remain optimistic, expecting overall
modest, but positive growth in revenue for 2015. Revenue receipts for the first 5 months of
2015 give confidence that the budgetary goals will be met or exceeded. City expenditures
are well within levels anticipated in the 2015 budget.
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.
11
CITY OF PARKVILLE, MISSOURI
STATEMENT OF NET POSITION
DECEMBER 31, 2014
2014
Governmental Business-Type
Activities Activities Total
Assets
Cash and Cash Equivalents $ 4,603,589 $ 1,146,993 $ 5,750,582
Restricted Cash and Investments 1,212,674 28,338 1,241,012
Receivables, Net of Allowance for Uncol!ectibles
Taxes 2,388,636 2,388,636
Accounts I 0,528 95,077 105,605
Deferred Charges
Prepaid Items 84,969 1,839 86,808
Land Held for Resale 8,472,776 8,472,776
Capital Assets Not Being Depreciated
Land 869,880 59,975 929,855
Construction in Progress
Infrastructure 3,375,653 3,375,653
Capital Assets, Net of Accumulated Depreciation
Buildings and Improvements 3,284,127 2,255,875 5,540,002
Machinery and Equipment 299,263 48,825 348,088
Infrastructure 33, 179 1,497,602 1,530,781
Total Assets 24,635,274 5, 134,524 29,769,798
Liabilities
Accounts Payable and Other Current Liabilities 207,584 43,177 250,761
Wages Payable 53, 147 221 53,368
Accrued Interest Payable 297,397 1,600 298,997
Customer Deposits 13,485 13,485
Unearned Revenue
Accrued Vacation 49,092 49,092
Other 572 572
Bonds and Notes
Due Within One Year 566,869 164,045 730,914
Due in More Than One Year 15,593,377 1,511,575 17,104,952
Total Liabilities 16,768,038 1,734,103 18,502,141
Deferred Inflows of Resources
Property Taxes -Subsequent Year 2,280,096 2,280,096
Net Position
Invested in Capital Assets, Net of
Capital Related Debt 174,632 174,632
Restricted for
Debt Service 1,215,795 1,215,795
Capital Projects 693,771 693,771
Reserve 1,387,966 1,387,966
Endowment Fund 557,891 557,891
Unrestricted 1,557,085 3,400,421 4,957,506
Total Net Position $ 5,587,140 $ 3,400,421 $ 8,987,561
The accompanying notes are an integral part of the financial statements.
12
CITY OF PARKVILLE, MISSOURI
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED DECEMBER 31, 2014
Net (Expense) Revenue and
ProS:ram Revenues Changes in Net Assets
Operating Capital Prima!):'. Government
Charges for Grants and Grants and Governmental Business-type
Functions/Programs E--.:penses Services Contributions Contributions Activities Activities Total
Primary government:
Governmental Activities
Gcnerul Government $ 965,064 $ 382,582 $ $ 39,577 $ (542,905} $ $ (542,905)
Public Safety -Police 1,132,022 277,985 (854,037) (854,037)
Public Safety-Court 141,034 (141,034) (141,034)
Public \Vorks 812,168 (812,168) (812,168)
Economic Development 252,486 (252,486) (252,486)
Depreciation 251,002 (251,002) (251,002)
Amortimtion
TIF 433,247 (433,247) (433,247)
Interest and Fees 636,129 (636,129) (636,129)
Financing Cost 182,044 (182,044) (182,044)
Brink Meyer Road Expense 316,466 (316,466) (316,466)
Other Capital Expenditures 421,874 (421,874) (421,874)
Miscelluncous 8,936 (8,936) (8,936)
Totu[ Govemmentnl Aclivities 5,552,472 660,567 39,577 (4,852,328) (4,852,328)
Business-type Activities
Sewer 946 270 I 093-424 168,680 147,154
Totul Business-type Activities 946,270 1,093.424 168,680 147,154
Totnl Primnry Government $ 6.498,742 $ 1,753,991 $ $ 39,577 (4,852,328) 168,680 (4,705,174)
General Revenues
Property Tux 1,564,539 1,564,539
Franchise Tux 1,048,320 1,048,320
Snles Tax 1,569,034 1,569,034
Unrestricted Investment Earnings 25,189 25,189
Intergovemmentnl 369,860 369,860
Sewer Admin Fees 100,000 100,000
TIF 436,968 436,968
Other 109,959 8,981 118,940
Total General Revenues 5,223.869 8,981 5,232,850
Chunge in Net Assets 371,541 177,661 549,202
Transfer
Net Position, Beginning of the Year us Adjusted 5,215,599 3,222,760 8,438,359
Net Position, End of Year $ 5,587,140 $ 3,400,421 $ 8,987,561
The accompanying notes are an integral part of the financial statements.
13
Assets
Cush and Cash Equivalents $
Restricted Cash Investments
Receivables, Net of Allowrmcc
for Unco\lcctiblcs
Tm1.es
Accounts Receivable
PrcpDid Items
Total Assets $
Liabilities nnd Fund Balance
Liabilities
Accounts Payable $
Wages Payable
Other Liabilities
Total Liabilities
Deferred Inflows of Resources
Property Taxes Subsequent)
Fund Balances
Nonspcndablc
Prcpaids
Restricted for
Capitnl Projects
Debt Service
Assigned
Cnpital Purposes
Unnssigncd
General Fund
Special Rcvvcnuc
Total Fund Bulanccs
Totnl Liabilities and
Fund Bulunces $
CITY OF PARKVILLE, MISSOURI
BALANCE SHEET
GOVERNMENTAL FUNDS
DECEMBER 31, 2014
Trnnsportntion Capital Debt
General Reserve Special Revenue Projects Service
Fund Fund Fund Fund Fund
1,303,655 $ 1,387,966 $ 397,765 $ 693,771 $ 617,286
10,833 642,540
1,052,741 55,339 663,196 617,360
5,080
84,969
2,446,445 $ 1,387,966 $ 463.937 $ 1.356,967 $ 1.877,186
151,130 $ $ 51,031 $ $ 424
53,147
572
204,849 51,031 424
945,100 10,833 663,196 660,967
84,969
402,073
693,771 1,215,795
1,211,527 1,387,966
1.296,496 1,387.966 402,073 693,771 l,215 795
2,446,445 $ 1.387,966 $ 463,937 $ 1,356.967 $ 1,877,186
Other
Governmental
Funds
$ 203,147
559,301
5,448
$ 767,896
$ 4,999
4,999
557,891
205,006
762,897
$ 767,896
The accompanying notes are an integral part of the financial statements.
14
Totnl
Governmental
Funds
$ 4,603,589
1,212,674
2,388,636
10,528
84.969
$ 8,300,396
$ 207,584
53,147
572
261,303
2,280,096
84,969
402,073
1,909,566
557,891
2,599,492
205.006
5,758,998
$ 8,300.396
CITY OF PARKVILLE, MISSOURI
RECONCILIATION OF THE BALANCE SHEET OF THE
GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION
DECEMBER 31, 2014
Total Fund Balance in Governmental Fund Balance Sheet $ 5,758,998
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. 7,862,101
Land Held for Resale 8,472,776
Long-term liabilities, including bonds payable, are not due
and payable in the cunent period and therefore are not
reported in the funds. (Note 2) (16,160,246)
Accrued Interest Payable (297,397)
Accrued Vacation (49,092)
Net Position of Governmental Activities $ 5,587,140
The accompanying notes are an integral part of the financial statements.
15
CITY OF PARKVILLE, MISSOURI
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
Revenues
Taxes
Licenses and Pennits
Intergovernmental
Charges for Services
Fines and Fees
Special Assessments
Investment Earnings
Grants
TIF Revenue
Sewer Service Fees
Miscellaneous
Total Revenues
Expenditures
Current
General Government
Public Safety -Police
Public Safety -Court
Public Works
Economic Development
Debt Service
Principal
Interest
Other
$
General
Fund
2,935,260
379,214
66,584
35,907
269,935
6,626
690
100,000
41,246
3,835,462
955,395
1,174,585
141,034
834,418
290,278
FOR THE YEAR ENDED DECEMBER 31, 2014
Transportation
Reserve Special Revenue
Fund Fund
$ -$ 588,854 $
-
303,276
--
-
-
-38,887
-
22,575
953,592
250
Capital
Projects
Fund
-$
-
93
-
-
93
272,547
Debt
Service
Fund
332,383
-
-
-
61
323,803
11 ,248
-
667,495
520,000
266,460
6,261
The accompanying notes are an integral part of the financial statements.
16
Other
Governmental
$
Funds
1,592
3,368
-
7,989
-
7,222
-
436,968
-
10,23 1
467,371
8, 115
6,016
354
$
Total
Government
Funds
3,858,090
382,582
369,860
35,907
277,985
323,803
25, 189
39,577
436,968
100,000
74,052
5,924,012
963,760
1,180,601
141 ,034
834,772
290,278
520,000
539,007
6,261
CITY OF PARKVILLE, MISSOURI
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
TIF Expense
Financing Costs
Capital Outlay
Brink Meyer Expenses
Total Expenditures
Excess (Deficiency) of Revenues
Over (Under) Expenditures
Other Financing Sources (Uses)
Note Proceeds -Refinancing
Notes Retired -Refinancing
Transfers In
Transfers (Out)
Total Other Financing Sou
Net Changes in Fund Balances
After Other Financing Sourc
Fund Balance, Beginning of Y.
Fund Balance, End of Year $
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2014
Transportation Capital Debt
General Reserve Special Revenue Projects Service
Fund Fund Fund Fund Fund
---
--182,044
489,424 -
----
3,395, 710 489,674 454,591 792,721
439,752 -463,918 (454,497) (125,226)
---9,552,021
---(8,460,000) -
482,680 317,000 11,057 22 I ,000
(586,370) -(355,000) (338,393) (61)
(103,690) 317 ,000 (343,943) 753,628 220,939
336,061 317,000 119,975 299,131 95,713
960,434 1,070,966 282,099 394,641 l, 120,082
1,296,496 $ 1,387,966 $ 402,073 $ 693,772 $ 1,215,795
The accompanying notes are an integral part of the financial statements.
17
Other
Governmental
Funds
433,247
-
5,754
316,446
769,932
(302,562)
-
-
339,893
(91,806)
248,088
(54,474)
817,371
$ 762,898
Total
Government
Funds
433,247
182,044
495,178
316,446
5,902,628
21,384
9,552,021
(8,460,000)
1,371,630
(1,371,630)
J,092,021
1,113,406
4,645,593
$ 5,758,998
CITY OF PARKVILLE, MISSOUIU
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
DECEMBER 31, 2014
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. This is the net
amount that depreciation exceeded capital outlays.
The issuance of long-term debt (e.g., bonds, leases) provides current
financial resources to governmental funds, while the repayment of the
principal of long-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 portion, premiums,
discounts and similar items when debt is first issued, whereas these amounts
are deferred and amortized in the Statement of Activities. This is the net
amount of bond principal payments and retired certificates of participation.
Refinancing transaction in which the bond proceeds exceeded the bonds
retired reported as increase in the fund balance.
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 Position of Governmental Activities
The accompanying notes are an integral part of the financial statements.
18
$1,116,218
(64,357)
520,000
(1,092,021)
(108,299)
$ 371,541
Assets
CITY OF PARKVILLE, MISSOURI
STATEMENT OF NET POSITION
PROPRIETARY FUND -SEWER SERVICE
DECEMBER 31, 2014
Current Assets
Cash and Cash Equivalents
Restricted Cash and Investments
Accounts Receivable
Prepaid Items
Total Current Assets
Noncurrent Assets
Capital Assets
Land
Buildings and Improvements
Machinery and Equipment
Infrastructure
Less Accumulated Depreciation
Total Capital Assets
Total Noncurrent Assets
Total Assets
Liabilities
Current Liabilities
Accounts Payable and Other Current Liabilities
Wages Payable
Accrued Interest Payable
Customer Deposits Payable
Current Portion of Revenue Bonds Payable
Current Portion of Leases Payable
Total Current Liabilities
Noncurrent Liabilities
Revenue Bonds Payable, Net
Lease Payable
Total Noncurrent Liabilities
Total Liabilities
Net Position
Invested in Capital Assets, Net of Related Debt
Restricted
Debt Service
Unrestricted
Total Net Position
$ 1,146,993
28,338
95,077
1,839
$
1,272,247
59,975
5,305,693
254,441
2,381,388
(4,139,220)
3,862,277
3,862,277
5,134,524
43,177
221
1,600
13,485
152,919
I 1,126
222,528
1,373,351
I38,224
1,511,575
1,734, 103
2,186,657
28,338
I ,I 85,426
3,400,421
The accompanying notes are an integral part of the financial statements.
19
CITY OF PARKVILLE, MISSOURI
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
PROPRIETARY FUND -SEWER SERVICE
FOR THE YEAR ENDED DECEMBER 31, 2014
Operating Revenues
Charges for Sales and Services
Sewer Charges
Total Operating Revenues
Operating Expenses
Management Contract
Administrative Fee
Water Department Charges
Depreciation and Amortization
Other Expenses
Total Operating Expenses
Operating Income
Non-operating Revenues (Expenses)
Interest Revenue
Interest Expense
Other Income
Loan Fee
Total Net Non-operating Revenues (Expenses)
Change in Net Position
Net Position, Beginning of Year as Restated
Net Position, End of Year
$ 1,093,424
1,093,424
275,395
100,000
76,521
257,695
189,262
898,873
194,551
4,361
(25,871)
4,620
(16,890)
177,661
3,222,760
$ 3,400,421
The accompanying notes are an integral part of the financial statements.
20
CITY OF PARKVILLE, MISSOURI
STATEMENT OF CASH FLOWS
PROPRIETARY FUND -SEWER SERVICE
FOR THE YEAR ENDED DECEMBER 31, 2014
Cash Flows from Operating Activities
Receipts from Customers
Payments to Suppliers
Net Cash Provided by Operating Activities
Cash Flows from Capital and Related Financing Activities
Principal Paid on Capital Debt
Interest Paid on Capital Debt
Miscellaneous
Net Cash (Used) by Financing Activities
Cash Flows from Investing Activities
Interest Received
Net Cash Provided by Investing Activities
Increase in Cash and Cash Equivalents
Cash, Beginning of Year
Cash, End of Year
Reconciliation of Operating Income to Net Cash
Provided by Operating Activities
Operating Income
Adjustments to Reconcile Operating Income
to Net Cash Provided by Operating Activities
Depreciation and Amortization Expenses
Changes in Assets and Liabilities
Accounts Receivable
Accounts Payable
Accrued Interest
Prepaids
Other
Net Cash Provided by Operating Activities
$ 1,103,488
(859,065)
244,423
(158,509)
(25,872)
4,620
(179,761)
4,361
4,361
69,023
1,077,970
$ 1,146,993
$ 194,551
257,694
10,064
(216,368)
(494)
(1,246)
222
$ 244,423
The accompanying notes are an integral part of the financial statements.
21
Assets
Cash
CITY OF PARKVILLE, MISSOURI
STATEMENT OF ASSETS AND LIABILITIES
AGENCY FUND
DECEMBER31,2014
Legal
Municipal Settlement
Court Fund
$ 21.354 $ 95.957
Total Assets $ 21,354 $ 95,957
Liabilities
Due to Others $ 21,354 $ 95,957
Total Liabilities $ 21,354 $ 95,957
Total
$117.311
$117,311
$117,311
$117,311
The accompanying notes are an integral part of the financial statements.
22
CITY OF PARKVILLE, MISSOURI
NOTES TO BASIC FINANCIAL STATEMENTS-CONTINUED
DECEMBER 31, 2014
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 position 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 is 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 Acco1111ti11g, and Fi11a11cial 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 following the year the taxes are levied.
Grants and similar items are recognized as revenue as soon as all eligibility
requirements imposed by the provider have been met.
23
CITY OF PARKVILLE, MISSOURI
NOTES TO BASIC FINANCIAL STATEMENTS-CONTINUED
DECEMBER 31, 2014
NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -CONTINUED
11'1easurement Focus, Basis of Acco1111ting, and Financial Statement Presentation -
Continued
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 fund 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.
Property 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 current 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.
The City reports the following major governmental funds:
General Fund -This fund is the City's primary operating fund. It accounts for
all financial resources of the general government, except those required to be
accounted for in another fund.
24
CITY OF PARKVILLE, MISSOURI
NOTES TO BASIC FINANCIAL STATEMENTS -CONTINUED
DECEMBER 31, 2014
NOTE I -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES-CONTINUED
il'feas11reme11t Focus, Basis of Acco1111ti11g, mu/ Financial Statement Presentation -
Co11ti1111ed
Transportation Special Revenue Fund -This fund is used to account for the
sales taxes collected and a county tax distribution for capital improvements
and the expenditures for the related items.
Capital Projects Fund -This fund accounts for the financing and acquisition
and construction of various citywide improvements. The fund is used to
account for construction projects undertalcen by the City. During 2014 the
fund included receipts and disbursements on the Brink Meyer Road Project
and Brush Creek Project.
Debt Service Fund -This fund accounts for the accumulation of resources for,
and the payment of, principal and interest on long-term general obligation
debt of governmental funds. Revenue and expenses for each of the several
debt service obligations are kept separate and accounted for independently of
the other obligations so that funds available for each debt service obligation
are used only for that obligation.
Emergency Reserve Fund-This fund is used to account for financial reserves
that are held by the City as a reserve for future projects or other needs.
The City reports the following major proprietary fund:
Sewer Service -This fund accounts for the provision of waste water 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.
As a general rule the effect of inter-fund activity has not been eliminated from the
government-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
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.
25
CITY OF PARKVILLE, MISSOURI
NOTES TO BASIC FINANCIAL STATEMENTS -CONTINUED
DECEMBER 31, 2014
NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -CONTINUED
Measurement Focus, Basis of Acco1111tillg, and Financial Statement Presentation -
Continued
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 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.
Net Position Classifications
In the city-wide financial statements, equity is classified as net position and displayed
in three components:
1. Net investment in capital assets -Consisting of capital assets, net of
accumulated depreciation and reduced by the outstanding balances of any
bonds, mortgages, notes or other borrowings that are attributable to the
acquisition, construction or improvement of these assets.
2. Restricted net position -Consisting of net position with constraints placed
on their use either by (I) external groups such as creditors, grantors,
contributors, or laws or regulations of other governments; or (2) law through
constitutional provisions or enabling legislation. The City first utilizes
restricted resources to finance qualifying activities.
3. Unrestricted net position -All other net position that do not meet the
definition of"restricted" or "net investment in capital assets".
26
CITY OF PARKVILLE, MISSOURI
NOTES TO BASIC FINANCIAL STATEMENTS-CONTINUED
DECEMBER 31, 2014
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -CONTINUED
Fund Ba/a11ce C/assijicatio11s
The Governmental Accounting Standards Board (GASB) released Statement 54-
"Fund Balance Reporting and Governmental Fund Type Definitions" (GASB 54) on
March 11, 2009, which is effective for the City's fiscal year ending December 31,
2014. This Statement is intended to improve the usefulness of the amounts reported
in fund balance by providing more structured classifications. Under GASB 54, fund
balance is reported under the following five classifications:
1. Non-spendable Fund Balance -consists of amounts that are not in a
spendable form or are required to be maintained intact.
2. Restricted Fund Balance -consists of amounts that can be spent only for the
specific purposes stipulated by external resource providers, constitutionally, or
through enabling legislation. The Restricted for Debt Service and Restricted
for Capital Projects balances reflect amounts that are restricted for debt
service and construction or other capital outlay projects.
3. Committed Fund Balance-consists of amounts tlmt can be used only for tl1e
specific purposes determined by a formal action of tl1e District's highest level
of decision-making autl1ority (the Board of Aldermen) and do not lapse at year
end. The committed fund balance consists of general board reserves.
4. Assigned Fund Balance -consists of amounts intended for a specific purpose
by the Board of Aldermen that has been delegated autl1ority to assign
amounts. This fund balance classification reflects funds assigned for capital
projects.
5. Unassigned Fund Balance -consists of any remaining fund balance that has
not been reported in any other classification.
Caslt, Caslt Equivalents am/ Invest111e11ts
Cash and investments of the individual funds are combined to form 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 tile funds required to accumulate interest. If
a fund is not required to account for its own earnings by Jaw or regulation, the
earnings are allocated to the General Fund.
27
CITY OF PARKVILLE, MISSOURI
NOTES TO BASIC FINANCIAL STATEMENTS-CONTINUED
DECEMBER 31, 2014
NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES-CONTINUED
Cash, Cash Equivalents and Im•estments -Co11ti1111ed
Missouri state stah1tes 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 100% 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
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 less
from the date of acquisition.
Receivables am/ Payables
All trade accounts receivable are shown net of an allowance for uncollectable.
Management records a trade accounts receivable allowance based on percentages of
collection estimated from the aging of accounts receivable. At December 31, 2014,
management determined that no allowance was necessary.
Governmental funds report unearned revenue in connection with receivables for
revenues that are not considered to be available to liquidate liabilities of the current
period. Governmental funds unearned revenue is reported as follows:
General Fund Property Tax Receivable
Debt Service Fund Property Tax Receivable
Capital Projects Fund
Property Taxes
$ 945,100
660,967
663.196
$2.269.263
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.
28
CITY OF PARKVILLE, MISSOURI
NOTES TO BASIC FINANCIAL STATEMENTS-CONTINUED
DECEMBER 31, 2014
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES-CONTINUED
Property Taxes -Co11tin11ed
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.
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-term debt.
The tax levy per $100 of assessed valuation which supports the 2014 budget was:
General Fund
General Revenue -Temporary
$ 0.4784
0.1759
$ 0.6543
Taxes receivable represent property taxes levied for 2013 and prior years that have
not yet been collected. The assessed value of property located within the City totaled
$195,553,232.
Prepayme11ts
Certain payments to vendors reflect costs applicable to future accounting periods and
are recorded as prepayments in both government-wide and fund financial statements.
These items are reported in the financial statements using the consumption method.
A current asset for the prepaid amounts is recorded at the time of the purchase and the
expenditure/expense is reported in the year which services are consumed. At fiscal
year end, because prepayments are not available to finance future governmental fund
expenditures, the fund balance is considered non-spendable in an amount equal to the
carrying value of the asset on the fund financial statements.
Restricted Cash a11d J1111estme11ts
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.
29
CITY OF PARKVILLE, MISSOURI
NOTES TO BASIC FINANCIAL STATEMENTS-CONTINUED
DECEMBER 31, 2014
NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -CONTINUED
Deferred Outflowsl/11jlows of Resources
In addition to assets, the statement of financial position will sometimes report a
separate section for deferred outflows of resources. This separate financial statement
element, deferred outflows of resources, represents a consumption of net position that
applies to a future period( s) and so will not be recognized as an outflow of resources
(expense/expenditure) until then. Currently, the City does not have any item that
qualifies for reporting in this category.
In addition to liabilities, the statement of financial position and balance sheet will
sometimes report a separate section for deferred inflows of resources. This separate
financial statement element, deferred inflows of resources, represents an acquisition
of net position/fund balance that applies to a future period(s) and so will not be
recognized as an inflow of resources (revenue) until that time. The government has
one type of item, which arise under the modified accrual basis of accounting that
qualifies for reporting in this category. Accordingly, unavailable revenue is reported
in the governmental funds balance sheet. The governmental funds report unavailable
revenues from property taxes. These amounts are deferred and recognized as an
inflow of resources in the period that the amounts become available.
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.
As the City is a Phase III government under Governmental Accounting Standards
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.
30
CITY OF PARKVILLE, MISSOURI
NOTES TO BASIC FINANCIAL STATEMENTS-CONTINUED
DECEMBER 31, 2014
NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -CONTINUED
Capital Assets -Co11ti1111ed
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. If the
expenditure is depreciable, it will be written off from the time it is put in service.
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 amenities 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 1 ot 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.
Capital assets are depreciated using the straight-line method over the following
estimated useful lives:
Buildings
Sewer Plant and Collection System
Machinery and Equipment
Compeusated Absences -Vacation
20-40 years
20-50 years
5 - 7 years
City policies permit full-time employees to accumulate vacation time based on the
number of years of service. Accumulated vacation payable is accrued when incurred
in the government-wide financial statements and proprietary fund statements. In the
governmental fund financial statements, a liability is accrued when it has matured, for
example, as a result of employee resignations and retirements.
All vested vacation is accrued when incurred in the government-wide and proprietary
fund financial statements. A liability for these amounts is reported in governmental
funds only if they have matured, for example, as a result of employee resignations
and retirements, and are payable with expendable resources.
31
CITY OF PARKVILLE, MISSOURI
NOTES TO BASIC FINANCIAL STATEMENTS-CONTINUED
DECEMBER 31, 2014
NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES-CONTINUED
Premium 011 Bonds Payable
The premium on bonds payable at December 31, 2014 of $488,620 (net of
accumulated amortization of $13,312) is being amortized over the term of the
respective bonds using the straight line method. Amortization of the premium on
bonds payable is included in interest and paying agent fees in the Statement of
Revenues, Expenses and Changes in Net Position was $211,654 for the year ended
December 31, 2014.
Long-Term Obligatio11s
In the government-wide financial statements, and proprietary fund types in the fund
financial statements, Jong-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 are
deferred and amortized over the life of the bonds using the straight line method.
Bonds payable are reported net of the applicable bond premium or discount.
In the fund financial statements, governmental fund types recognize bond premiums
and discounts, as well as bond issuance costs as of the bond issuance date. The face
amount of debt issued is reported as a financing source. Premiums received on debt
issuances are reported as other financing sources while discounts on debt issuances
are reported as other financing uses.
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.
32
CITY OF PARKVILLE, MISSOURI
NOTES TO BASIC FINANCIAL STATEMENTS-CONTINUED
DECEMBER 31, 2014
NOTE 2 -RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL
STATEMENTS
Explanation of Certain Differences behveen tlze Govemmental Fund Balance
S/zeet and tlze Govemment-Wide Statement of Net Position (Page 15)
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
$(16,160,246) difference are as follows:
Bonds Payable
Certificates of Participation Payable
Neighborhood Improvement District Limited General
Obligation Bonds
Issuance Premium and Discount
Other:
Net Reconciling Item for Long-term
Liabilities (Page 15)
Compensated Absences
Accrued Interest Payable
$ (1,755,000)
(4,900,000)
(9,050,000)
(455.246)
$ (] 6.160.246)
(49,092)
(297.397)
$ (346.489)
Explanation of Certain Differences behveen tlze Go11emmental Fund Statement of
Revenues, Expenditures and Changes ill Fund Balances and tlze Government-Wide
Statement of Activities (Page 18)
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 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 details of this difference are
as follows:
Capital Outlay:
Machinery and Equipment
Parks Building
Depreciation Expense
Net Reconciling Item for Capital
Outlays/Depreciation (Page 18)
33
$ 113,341
73,304
(251.002)
$ (64.357)
CITY OF PARKVILLE, MISSOUill
NOTES TO BASIC FINANCIAL STATEMENTS-CONTINUED
DECEMBER 31, 2014
NOTE 2-RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL
STATEMENTS-CONTINUED
Expla11atio11 of Certain Differences between lite Govemmental F1111d Stateme11t of
Revenues, Expenditures and Clta11ges ill F1111d Ba/a11ces and tlte Go11emme11t-Wide
Statement of Activities (Page J 8)-Conti1111ed
Another element of that reconciliation states that "The issuance of long-term debt
(e.g., bonds, leases) provides current financial resources to governmental funds, while
the repayment of the principal of long-term debt consumes the current financial
resources of goverrunental funds. Neither transaction, however, has any effect on net
assets. Also, goverrunental 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". The details of this difference
are as follows:
Refinancing of Brush Creek Sewer NID
New Bond Indebtedness
Premium and Other Sources
Debt Retired with Refinancing
Total
Refinancing of Brink Meyer Road NID
New Bond Indebtedness
Premium and Other Sources
Debt Retired with Refinancing
Total
Principal Repayments
General Obligation Bonds
Certificates of Participation
Total
$ 5,375,000
227,543
(4.935.000)
$ 667.543
$ 3,675,000
290,287
(3,525.000)
$ 440,287
$ 270,000
250.000
$ 520.000
Another element of that reconciliation states that "Some expenses reported in tl1e
statement of activities do not require the use of current financial resources and
therefore are not reported as expenditures in goverrunental funds." The details ohhis
$(5,419) difference are as follows:
Compensated Absences
Amortization of Bond Discounts and Premium
Interest Expense
Other
Net Reconciling Item Relating to Certain
Expenses (Page 18)
34
$ (5,620)
(10,530)
(97,122)
4.973
$ (108,299)
CITY OF PARKVILLE, MISSOURI
NOTES TO BASIC FINANCIAL STATEMENTS-CONTINUED
DECEMBER 31, 2014
NOTE 3 -STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
Budgets a11d Budgetmy Acco1mtiug
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 pennanent fund.
Budgeted expenditures cannot exceed budgeted revenues and unencumbered positive
fund balances as required by Section 67.010 RSMo. 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
appropriated balance from one department to another. The reported budgetary data
represents the final approved budget as adopted by the Board of Aldermen. There
were no amendments to the budget in 2014.
NOTE 4 -DEPOSITS AND INVESTMENTS
As of December 31, 2014, the City had the following deposits and investments:
US Treasuries and Agency Securities
Deposits: Checking and Money Market
Reported Amount I
Fair Value
$ 91,942
6,899,652
$6,991,594
Reconciliation of Government-wide Statement of Net Position to total deposits and
investments:
Cash and Cash Equivalents
Restricted Cash and Investments
Total Deposits and Investments
/11terest Rate Risk
$ 5,750,582
1,241,012
$6,991.594
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 fonnal 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's practice to place operating funds in
either money market accounts or savings accounts. All longer-tenn investments are
placed in Treasury securities having relatively short maturities. These consist of funds
whose use is restricted and are unlikely to be needed prior to maturity (e.g. the
Fewson Trust).
35
CITY OF PARKVILLE, MISSOURI
NOTES TO BASIC FINANCIAL STATEMENTS-CONTINUED
DECEMBER 31, 2014
NOTE 4 -DEPOSITS AND INVESTMENTS-CONTINUED
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 insured money market funds and CDs, including
brokered CDs, whose value at maturity is guaranteed.
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, 2014, the carrying amount of the
City's deposits was Jess than pledged securities plus federal deposit insurance. It is
City practice to require banks to provide collateral equal to any deposited amounts
exceeding federal depository insurance limits.
Custodial Credit Risk -I11vest111e11ts
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,
2014, the City's investments were not exposed to custodial credit risk.
36
CITY OF PARKVILLE, MISSOURI
NOTES TO BASIC FINANCIAL STATEMENTS -CONTINUED
DECEMBER 31, 2014
NOTE 5 -CAPITAL ASSETS
Capital asset activity for the year ended December 31, 2014, was as follows:
Governmental Activities
Capital Assets not being Depreciated
Land
Construction in Progress
Infrastructure
Total Capital Assets not being Depreciated
Capital Assets being Depreciated
Buildings and Improvements
Machinery and Equipment
Infrastructure
Total Capital Assets being Depreciated
Less Accumulated Depreciation for
Buildings and Improvements
Machinery and Equipment
Infrastructure
Total Accumulated Depreciation
Total Capital Assets being Depreciated, Net
Governmental Activities Capital Assets, Net
Business-type Activities
Capital Assets not being Depreciated
Land
Construction in Progress
Total Capital Assets not being Depreciated
Capital Assets being Depreciated
Buildings and Improvements
Machinery and Equipment
Infrastructure
Total Capital Assets being Depreciated
Less Accumulated Depreciation for
Buildings and Improvements
Machinery and Equipment
Infrastructure
Total Accumulated Depreciation
Total Capital Assets being Depreciated, Net
Business-type Activities Capital Assets, Net
$
Beginning
Balance
869,880
8,472,776
3,375,653
12,718,309
4,!53,323
I,993,661
44,663
6,!91,647
(843,215)
(1,657,298)
(I0,208)
(2,510, 721)
3,680,926
$ 16,399,235
$ 59,975
466,805
526,780
4,838,888
254,44!
2,38!,388
7,474,7!7
(2,865,477)
(182,126)
(833,923)
(3,881,526)
3,593,!9!
$ 4,I !9,97!
37
Increases Decreases
$ $
8,472,776
8,472,776
73,304
1 !3,34!
186,645
(99,285)
(!50,44!)
(1,276)
(25!,002)
(64,357)
$ (64,357) $ 8,472,776
$ -$
(466,805)
(466,805)
466,805
466,805
(184,341)
(23,490)
(49,863)
(257,694)
209,I I I
$ 209,I 11 $ (466,805)
$
Ending
Balance
869,880
3,375,653
4,245,533
4,226,627
2,107,002
44,663
6,378,292
(942,500)
(I,807,739)
(I I,484)
(2,76!,723)
3,6!6,569
$ 7,862,102
$ 59,975
59,975
5,305,693
254,44!
2,381,388
7,94!,522
(3,049,818)
(205,616)
(883,786)
(4,!39,220)
3,802,302
$ 3,862,277
CITY OF PARKVILLE, MISSOURI
NOTES TO BASIC FINANCIAL STATEMENTS -CONTINUED
DECEMBER 31, 2014
NOTE 5 -CAPITAL ASSETS -CONTINUED
Depreciation expense related to the functions/programs of the primary
government is as follows:
Governmental Activities
General Government
Public Safety
Public Works
Parks
Nature Sanctuary
Publice Information
Total Depreciation Expense
Business-type Activities -Sewer Operations
$
$
$
122,127
56,436
39,830
26,416
2,941
3,252
251,002
257,695
Construction in Progress consists of costs incurred to construct infrastructure
assets (i.e. -streets, curbs, retaining wall, storm drainage network, and similar
items) for two development projects: Brink Myers Road and Brush Creek Sewer.
Both of these real estate developments are currently owned in part by financial
institutions and developers and are at various stages of completion.
38
CITY OF PARKVILLE, MISSOURI
NOTES TO BASIC FINANCIAL STATEMENTS -CONTINUED
DECEMBER 31, 2014
NOTE 6 -LONG-TERM OBLIGATIONS
The following is a summary of the debt transactions (bonds, notes and leases) of the City
for the year ended December 31, 2014:
Due
Beginning Ending Witl1in
Balance Additions Reductions Balance One Year
Governmental Activities:
Certificates of Participation $ 5, 150,000 $ $ (250,000) $ 4,900,000 $ 270,000
Neighborhood Improvement District
Limited Obligation Temp Notes 4,935,000 ( 4,935,000)
3,525,000 (3,525,000)
Less Deferred Amounts
for Issue Discounts (36,156) 2,782 (33,374) (2,782)
for Deferred Refunding Difference (70,431) 70,431
Neighborhood Improvement
General Obligation Bonds
River Park 2,025,000 (270,000) 1,755,000 275,000
Brush Creek Bond 5,375,000 5,375,000
Brush Creek Premium 227,454 (6,144) 221,310 11,377
Brink Meyer Bond 3,675,000 3,675,000
Brink Meyer Premium 274,478 (7,168) 267,310 13,274
Governmental Activity
Liabilities $ I 5,528,413 $ 9,551,932 $ (8,920,099) $ 16,160,246 $ 566,869
Business-D:ge Activities:
Bonds payable
Revenue Bonds (SRF) 2004A $ 1,595,000 $ $ (140,000) $ 1,455,000 • 145,000 •
Lease Purchase Agreement 159,940 (I 0,590) 149,350 11,126
Plus Deferred Amounts
for Jssue Premiums 79,189 (7,919) 71,270 7,919
Business-type Activity Long-term
Liabilities $ 1,834,129 $ -$ (158,509) $ 1,675,620 $ 164,045
$1,755,000 in general obligation debt shown above is special assessment debt with
governmental commitment. For governmental activities, long-term debt is generally
liquidated by the general fund. The Neighborhood Improvement District Limited Obligation
Temp Notes shown above will in 2014 be refinanced as permanent financing as special
assessment debt with governmental commitment.
39
CITY OF PARKVILLE, MISSOUIU
NOTES TO BASIC FINANCIAL STATEMENTS-CONTINUED
DECEMBER 31, 2014
NOTE 6 -LONG-TERM OBLIGATIONS -CONTINUED
Ge11eral Obligation Bonds
The City issues general obligation bonds to provide funds for the acquisition,
construction and renovation of major capital assets.
General obligation bonds cmTently outstanding consist of the following:
General Obligation Bonds
Governmental Activities
Interest
Rates
Original
Issue
Series 2010 2.7% to 3.25% $ 2,785,000
Final
Maturity
Date
3/1/2020
Principal
Payments
2014
Outstanding
December 31,
2014
$ 270,000 $ 1,755,000
$ 270,000 $ 1,755,000
On December 23, 2010, tl1e City refinanced the 2001 General Obligation Bonds. The
City issued $2, 785,000 of new bonds to retire tl1e old bonds. The interest rates on the.
bonds vary from 2% to 3.25%. The annual requirements to amortize governmental
activities general obligation bonds outstanding as of December 31, 2014, are as
follows:
Governmental Activities
PrinciEal Interest
2015 $ 275,000 $ 46,256
2016 280,000 40,700
2017 285,000 33,275
2018 295,000 24,575
2019 305,000 15,194
2020 315,000 5,119
$ 1,755,000 $ 165,119
$1,755,000 in general obligation debt shown above is special assessment debt with
governmental commitment.
For governmental activities, long-term debt is generally liquidated by the general fund.
40
CITY OF PARKVILLE, MISSOURI
NOTES TO BASIC FINANCIAL STATEMENTS-CONTINUED
DECEMBER 31, 2014
NOTE 6-LONG-TERM OBLIGATIONS-CONTINUED
The State Constitution permits a city, by vote of two-thirds of the voting electorate, to
incur general obligation indebtedness for "city purposes" not to exceed I 0% of the
assessed value of taxable tangible property and to incur additional general obligation
indebtedness not exceeding, in the aggregate, an additional I 0% of the assessed value
of taxable tangible property for the purpose of acquiring rights-of-way, construction,
extending and improving streets and avenues and/or storm sewer systems, and
purchasing or construction of 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. The City debt limit does not exceed the State
Constitution limits. By Resolution No. 09-01-14, the City adopted a debt management
policy to voluntarily limit its debt burden to no more than 80% of the limit prescribed
by state law.
Defeased Debt -Series 2004
In prior years, the City defeased these 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.
Certificates of Participatio11
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, 2014, is $4,900,000.
Proceeds from the certificates of participation were used for City Hall construction.
Rush Creek stabilization, land acquisition and other scheduled capital improvements.
The annual requirements to amortize these certificates of participation are as follows:
2015
2016
2017
2018
2019
2020-2024
2025-2027
41
Principal
$ 270,000
290,000
305,000
330,000
355,000
2,140,000
1,210,000
$4.900.000
Interest
$ 204,890
193,758
181,781
168,840
154,443
513,600
109,120
$1.526.492
CITY OF PARKVILLE, MISSOURI
NOTES TO BASIC FINANCIAL STATEMENTS -CONTINUED
DECEMBER 31, 2014
NOTE 6 -LONG-TERM OBLIGATIONS -CONTINUED
Neighborhood /111proveme11t District Limited Obligatio11 Bonds
A. Brush Creek Sewer Project
During the year, the City refinanced the Brush Creek Sewer Project Temporary Notes
by issuing long term bonds. The funds were used to retire the temporary notes by
issuing long term bonds. The interest notes on the bonds vary from 3% to 4% based
upon the maturity. The principal payments on the bonds vary from $210,000 to
$765,000 in 2034, the maturity date of the bonds. The City issued 20 year bonds
connected with the project. The annual requirements to amortize the bonds are as
follows:
2015
2016
2017
2018
2019
2020-2024
2025-2029
2030-2034
Principal
$
210,000
215,000
220,000
1,210,000
1,425,000
2,095.000
$5.375.000
B. Brink Meyer Road Neighborhood Improvement District
Interest
$ 228,663
187,088
183,938
177,563
171,038
749,888
538,981
245.713
$2.482.875
During the year, the City refinanced the Brink Meyer Road Neighborhood
Improvement District Temporary Notes by issuing long term bonds. The City issued
twenty year bonds at initial notes. The interest rate on the bonds varies form 3% to
5% based upon the maturity. The principal payment on the bonds varies from
$140,000 to $550,000 in 2034, the maturity date of the bonds. The annual
requirements to amortize the bonds are as follows:
2015
2016
2017
2018
2019
2020-2024
2025-2029
2030-2034
42
Principal
$
140,000
145,000
150,000
810,000
955,000
1.475.000
$3.675.000
Interest
$ 180,874
147,988
145,888
141,613
137,188
614,988
466,594
219.125
$?.054.258
CITY OF PARKVILLE, MISSOUill
NOTES TO BASIC FINANCIAL STATEMENTS -CONTINUED
DECEMBER 31, 2014
NOTE 6-LONG-TERM OBLIGATIONS-CONTINUED
Revenue Bonds (SRF) 2004A
The City issued Sewerage System Revenue Bonds Series 2004 in the original amount
of $2,750,000 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, 2014, is $1,455,000.
Bonds maturing on January 1, 2015, and thereafter may be called at the option of the
City 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 1 and December 1, commencing
December 1, 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 1, 2021, are not subject to redemption prior to
maturity.
Series 2004A (SRF) Sewage System Refunding Revenue Bonds (SRF) 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.
The annual requirements to amortize these bonds outstanding as of December 31,
2014, are as follows:
Principal Interest
2015 $ 145,000 $ 72,938
2016 150,000 65,688
2017 150,000 58, 188
2018 155,000 50,688
2019 160,000 42,550
2020-2024 695 000 87.750
$ 1 455.000 $-3.11,802
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.
43
CITY OF PARKVILLE, MISSOURI
NOTES TO BASIC FINANCIAL STATEMENTS-CONTINUED
DECEMBER 31, 2014
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.
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:
Principal Interest
2015 $ 11,126 $ 7,330
2016 11,689 6,767
2017 12,281 6,175
2018 12,902 5,553
2019 13,555 4,900
2020-2024 78,794 13,486
2025 -2027 13 554 225
$ H2,35Q $ 44,436
During the year the temporary notes on the Brush Creek Drainage and the Brink
Meyer Road Neighborhood Improvement Districts were refinanced into permanent
bond financing with a 20-year life. The Brush Creek funds were used to finance the
costs of constructing sewer lines for the Brush Creek Sewer Area and other related
improvements, including interest and issuance costs. The Brink Meyer funds were
used for the Brink Meyer Road Neighborhood Improvement District for the extension
of Brink Myers Road and the related retaining wall and the extension of electric and
water utilities. The bonds constitute a valid and legally binding indebtedness of the
City, payable from special assessments on property within the NIDs which is
benefited by the improvements. The faith, credit and resources of the City are
irrevocably pledged for principal and interest on the bonds if the assessments are
inadequate to support annual debt payments. The first assessments were due
December 31, 2014, with revenues dedicated for paying bond debt beginning in 2015.
Although no assessments were collected for the Brink Meyer NID, approximately
64% of assessments were collected for the Brush Creek NID (the larger of the two
44
CITY OF PARKVILLE, MISSOURI
NOTES TO BASIC FINANCIAL STATEMENTS-CONTINUED
DECEMBER 31, 2014
NOTE 6-LONG-TERM OBLIGATIONS-CONTINUED
issues). All of the delinquent properties are owned by several bank subsidiaries due
to foreclosures. While the City is vigorously pursuing its options to enforce payment
of the assessments, there is considerable uncertainty as to when, and how much, of
the outstanding and future assessments will be collected. Anticipating possible
shortfalls with collections, the City has for the past several years accumulated
reserves that, at current collection rates, will be sufficient to cover the NID debt
payments through 2022, should that be necessary. Additional options are being
developed that would extend the ability to cover payments for as long as may be
necessary. While the City is confident that most if not all of the assessments will
eventually be collected, the City is financially positioned to cover all debt payments
in the interim, and as may be needed.
NOTE 7 -RISK MANAGEMENT
The City is exposed to various risks of loss related to torts; theft of, damage to, and
destruction of assets; errors and omissions; employee injuries and illnesses; natural
disasters; and employee health, dental and accident benefits. To protect itself against
risks ofloss, the City is a member of Midwest Public Risk of Missouri (MPR), a not
for-profit corporation consisting of governmental entities incorporated in 1984 to
acquire insurance for its members. MPR 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. MPR 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 MPR.
MPR manages the cash and investment pool, funded by insurance premiums, on
behalf of its members. MPR'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 of MPR for which the
City was a participant at any time during such year, and in the event that MPR
determines that an assessment is required in order to provide additional funds for the
obligations of MPR for such year, and further, in the event tbat 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 MPR at the time of such
assessment. Management of the City is not aware of any deficit situation in MPR that
would require an accrual ofa liability as of December 31, 2014.
45
CITY OF PARKVILLE, MISSOURI
NOTES TO BASIC FINANCIAL STATEMENTS-CONTINUED
DECEMBER 31, 2014
NOTE 7 -RISK MANAGEMENT -CONTINUED
MPR's financial statements are presented in its Comprehensive Annual Financial
Report for the year ended December 31, 2014.
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.
J11vestme11ts -Trust Fund
The City was the recipient of funds from a resident's estate during the calendar year
2002. One-half of annual earnings are distributed to the City to be used on various
city capital projects. The funds were previously held by a trustee for the benefit of the
City. In 2011, the City took over management of the fund as a Special Revenue Fund.
By Resolution No. 12-01-13, the Board of Aldermen enacted a policy restricting the
use of the fund to follow the intentions of the original donor of the fund. The balance
of the annual net income after distributions to the City is reinvested in the principal of
the fund. On December 31, 2014 the trust assets had an account balance of $575,112.
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.
Co111plia11ce with State Rules 011 ll!faximum Percent of Revenue Allowed from
Traffic Fines
Statement of compliance with State rules on maximum percent of revenue allowed
from traffic fines in fulfillment of HB I 03, amending Section 302.341.2 RSMO,
effective August 28, 2013, requiring municipalities to report the percent of annual
general operating revenue derived from fines and court costs for traffic violations:
General Operating Revenue for 2014
All Fines and Court Costs from Traffic Violations
Occurring with the City
Percent of Total Operating Revenue
46
$5,387,044
$ 269,935
5.01%
CITY OF PARKVILLE, MISSOURI
NOTES TO BASIC FINANCIAL STATEMENTS-CONTINUED
DECEMBER 31, 2014
NOTE 8 -COMMITMENTS AND CONTINGENCIES
Complia11ce with State Rules 011 il'Iaxi11111111 Percent of Re11e1111e Allowed from
Traffic Fines-Co11ti1111ed
The City Court software does not accmmt separately for traffic fines and court costs
from other police fines and court costs. However, since total Court revenue, including
amended charges, from all sources for 2014 was 5.01% of the General Fund annual
operating revenue, the traffic-related portion of that court revenue was 5.01% or Jess,
which is well below the maximum percentage allowed.
NOTE 9 -INTER-FUND TRANSACTIONS
Inter-fund transfers for the year ended December 31, 2014, consisted of the
following:
Transfer to Reserve Fund (Net)
Transfer from Capital Projects Fund (Net)
Transfer from Transportation Special Revenue Fund (Net)
Transfer to Debt Service Fund (Net)
Transfer to Non-Major Funds
Transfer from General Fund (Net)
$317.000
$(338.393)
$(343.943)
$ 220.939
$ 248.088
$(] 03.690)
Transfers are used to (I) 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 ft.md to finance various programs accounted for in other funds
in accordance with budgetary authorizations.
NOTE 10 -PENSION PLAN
Plan Description
The City participates in the Missouri Local Government Employees Retirement
System (LAGERS), an agent multiple-employer public employee retirement system
that acts as a common investment and administrative agent for local government
entities in Missouri. LAGERS is a defined benefit pension plan, which provides
retirement, disability, and death benefits to plan members and beneficiaries.
47
CITY OF PARKVILLE, MISSOURI
NOTES TO BASIC FINANCIAL STATEMENTS-CONTINUED
DECEMBER 31, 2014
NOTE 10 -PENSION PLAN-CONTINUED
LAGERS was created and is governed by statute, section RSMo. 70.600 -70.755.
As such, it is the system's responsibility to administer the law in accordance with the
expressed intent of the General Assembly. The plan is qualified under the Internal
Revenue Code Section 40l(a) and it is tax exempt.
The Missouri Local Government Employees Retirement system issues a publicly
available financial report that includes financial statements and required
supplementary information. That report may be obtained by writing to LAGERS,
P.O. Box 1665, Jefferson City, MO 65102 or by calling 1-800-447-4334.
F111u/i11g Status
Full-time employees of the City contribute 4% of their gross pay to the pension plan.
The June 30, 2013 statutorily required employer contribution rates are 3.7% (General)
and 4.3% (Police) of annual covered payroll. The contribution requirements of plan
members are determined by the governing body of the political subdivision. The
contribution provisions of the political subdivision are established by state statute.
A111111al Pe11sio11 Cost (APC) a11d Net Pe11sio11 Obligatio11 (NPO)
The subdivision's annual pension cost and net pension obligation for the current year
were as follows:
Annual Required Contribution
Interest on Net Pension Obligation
Adjustment to Annual Required Contribution
Annual Pension Cost
Actual Contributions
Increase (Decrease) in NPO
NPO Beginning ofYear
NPO End of Year
48
$ 62,687
$
62,687
62,687
CITY OF PARKVILLE, MISSOURI
NOTES TO BASIC FINANCIAL STATEMENTS-CONTINUED
DECEMBER 31, 2014
NOTE 10-PENSION PLAN-CONTINUED
The annual required contribution (ARC) was determined as part of the February 29,
2012 and February 28, 2013 annual valuation using the entry age actuarial cost
method. The actuarial assumptions as of February 28, 2014 included: (a) a rate of
return on the investment of present and future assets of7.25% per year, compounded
annually (b) projected salary increases of 3.5% per year, compounded annually,
attributable to inflation (c) additional projected salary increases ranging from 0.0% to
6.0% per year, depending on age and division, attributable to seniority/merit, (d) pre
retirement mortality based on the 75% of the RP-2000 Combined Healthy table set
back 0 years for men and 0 years for women, and (e) post-retirement mortality based
on 105% of the 1994 Group Annuity Mortality table set back 0 years for men and 0
years for women. The actuarial value of assets was determined using techniques that
smooth the effects of short-term volatility in the market value of investments over a
five-year period. The unfunded actuarial accrued liability is being amortized as a
level percentage of projected payrolls on a closed basis. The amortization period as
of February 29, 2012 was 30 years for the General division and 28 years for the
Police division. The amortization period as of February 28, 2013 was 29 years for the
General division and 26 years for the Police division.
One-Year Trend lnfonnation
Year Annual Percentage Net
Ended Pension of APC Pension
June 30, Cost CAPCJ Contributed Obligation
2012 $ 61,229 100.0% $ 0
2013 $ 62,067 100.0% $ 0
2014 $ 62,687 100.0% $ 0
The above assets and actuarial accrued liability do not include assets and present
value of benefits associated with the Benefit Reserve Fund and the Casualty Reserve
Fund. The actuarial assumptions were changed in conjunction with the February 28,
2011, annual actuarial valuations. For a complete description of the actuarial
assumptions used in the annual valuations, please contact the LAGERS office m
Jefferson City, Missouri.
NOTE 11-DISCLOSURES ABOUT FAIR VALUE OF ASSETS AND LIABILITIES
ASC Topic 820, Fair Value A1easurements, defines fair value as the price that would
be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. Topic 820 also specifies a fair
value hierarchy which requires an entity to maximize the use of observable inputs and
minimize the use of unobservable inputs when measuring fair value. The standard
describes three levels of inputs that may be used to measure fair value.
49
CITY OF PARKVILLE, MISSOURI
NOTES TO BASIC FINANCIAL STATEMENTS-CONTINUED
DECEMBER 31, 2014
NOTE 11 -DISCLOSURES ABOUT FAIR VALUE OF ASSETS AND LIABILITIES
CONTINUED
Level I Quoted prices in active markets for identical assets or liabilities
Level 2 Observable inputs other than Level I prices, such as quoted prices for
similar assets or liabilities; quoted prices in active markets that are not
active; or other inputs that are observable or can be corroborated by
observable market data for substantially the full term of the assets or
liabilities
Level 3 Unobservable inputs that are supported by little or no market activity
and that are significant to the fair value of the assets or liabilities
Following is a description of the valuation methodologies used for instruments
measured at fair value on a recurring basis and recognized in the accompanying
statement of financial position, as well as the general classification of such
instruments pursuant to the valuation hierarchy.
I11vestme11ts
Where quoted market prices are available in an active market, securities are classified
within Level I of the valuation hierarchy. Level I securities include highly liquid
money market funds, U.S. Treasuries and exchange traded equities and mutual funds.
If quoted market prices are not available, then fair values are estimated by using
pricing models, quoted prices of securities with similar characteristics or discounted
cash flows. Level 2 securities include fixed income securities and pooled
investments. In certain cases where Level I or Level 2 inputs are not available,
securities are classified within Level 3 of the hierarchy.
The following table presents the fair value measurements of assets and liabilities
recognized in the accompanying Statement of Financial Position measured at fair
value on a recurring basis and level within the FAS 157 fair value hierarchy in which
the fair measurements fall at December 31, 2014.
Fair Value Measurements Using
Quoted Prices
In Active Significant
Markets for Other Significant
Identical Observable Unobservable
Assets Inputs Inputs
Fair Value (Level I) (Level 2) (Level3)
Government Securities:
Trust Fund $ 91,942 $ 91,942
50
CITY OF PARKVILLE, MISSOURI
NOTES TO BASIC FINANCIAL STATEMENTS-CONTINUED
DECEMBER31, 2014
NOTE12-SUBSEQUENTEVENTS
The City has evaluated subsequent events through August 4, 2015, the date on which
the financial statements were available to be issued.
The City entered into a lease purchase agreement for the sewer plant in prior years
that expired in 2025. The City decided in February 2015 that it would be beneficial to
retire the lease obligation based upon current interest rates and paid off the lease
obligation. The City changed its classification with LAGERS from tier one to tier
three.
NOTE 13 -UPCOMING ACCOUNTING PRONOUNCEMENTS
o Statement No. 68, Accounting and Financial Reporting for Pensions -an amendment
of GASB Statement No. 27 -This statement will require the City to change the
accounting for the pension costs related to the City's participation in the Missouri
Local Government Employees Retirement System (LAGERS). In addition, the City
will also be recognizing a net pension liability (asset), deferred outflows of resources
and deferred inflows of resources related to the City's proportionate share of the
collective amounts in LAGERS.
o Statement No. 69, Government Combinations and Disposals of Government
Operations -This statement is not likely to impact the City until there is a
combination or disposal of operations that is subject to this guidance.
o Statement No. 70, Accounting and Financial Reporting for Nonexchange Financial
Guarantees -Management will review the special assessment bonds to determine
whether there are any changes required by this statement.
o GASBS No. 69, Government Combinations and Disposals of Government
Operations, which is effective for government combinations and disposals of
government operations occurring in financial reporting periods beginning after
December 15, 2013, with earlier implementation encouraged.
o GASBS No. 70, Accounting and Financial Reporting for Nonexchange Financial
Guarantees, which is effective for reporting periods beginning after June 15, 2013,
with earlier implementation encouraged.
51
CITY OF PARKVILLE, MISSOURI
NOTES TO BASIC FINANCIAL STATEMENTS -CONTINUED
DECEMBER 31, 2014
NOTE 14-RESTATEMENT OF BEGINNING BALANCES
J111pleme11tatio11 of New GASB Pro1101111ce111e11ts a11d J11terest Expense Adj11st111e11t
In 2014 the City adopted the following new accounting standard in order to conform
to the following Governmental Accounting Standards Board Statement.
GASE Statement No. 65, Items Previously Reported as Assets and Liabilities. The
Statement reclassified items from assets or liabilities in the statement of financial
position into the new categories of deferred outflow or deferred inflow of resources.
As a result, costs related to the issuance of debt, previously deferred, were restated as
if they had been reported as an outflow ofresources when incurred.
The City did not accrue interest expense on temporary notes at the end of 2013
requiring an adjustment to accrued interest payable and net position. The impact on
the financial statements was a decrease in beginning net position as follows:
Net Position-January I, 2014,
as previously reported
Restatement of deferred charge
for debt issuance costs
Deferred Refunding Difference
Restatement oflnterest Expense
and Interest Payable
Net Position-January I, 2014,
restated
Statement of Activities
Governmental Business-type
Activities Activities
$5,513,336
(143,043)
(70,43 I)
(84,263)
$5 215,5.22
$3,304,666
(81,906)
$3.,222 760
NOTE 15 -INVESTMENT -LAND AND DEVELOPMENT COSTS
Two projects that were classified as construction in progress at the end of 2013 were
completed in 2014 and moved from temporary to permanent (20-year) financing.
Upon completion in 2014, these projects, the Brush Creek Drainage Area
Neighborhood Improvement District and the Brink Meyer Road Neighborhood
Improvement District, were reclassified as capital assets, with the expenditures
considered as investment in land and development costs. Assessments on the
benefitted properties were levied in late 2014, with the first payments due on
December 31, 2014.
52
CITY OF PARKVILLE, MISSOURI
NOTES TO BASIC FINANCIAL STATEMENTS-CONTINUED
DECEMBER 31, 2014
NOTE 15 -INVESTMENT -LAND AND DEVELOPMENT COSTS-CONTINUED
The projects are intended to provide sewer and certain road services needed to enable
residential and commercial development of several tracts of land in Parkville, and
were begun in 2007. Several events and difficulties caused delays in completing the
projects, including the financial and housing market collapses of the Great Recession.
At the request of the developers, the initial phase of the Brush Creek project was
expanded to include an additional tract, drawing out the construction by several years.
The Brink Meyer project experienced construction difficulties which drew out that
project as well. The final costs include both the construction costs and the temporary
note refinancing costs, including capitalized interest.
53
REQUIRED SUPPLEMENTARY INFORMATION
Required supplementary information (RSI) includes financial information and disclosures
that are required by the GASB but are not considered a part of the basic financial statements.
Such information includes:
• Modified Approach to Infrastructure Reporting
• Budgetary Comparison Schedule -General Fund
54
CITY OF PARKVILLE, MISSOURI
REQUIRED SUPPLEMENTARY INFORMATION
DECEMBER 31, 2014
Information needed to support the use of the Modified Approach for Infrastructure Reporting:
Street Assets
The street condition rating is accomplished every other year or triennially. Every street 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 rated at a 6.0 or above and to
maintain all streets within the City at a service level of 5.0 or below for each respective type
of street.
A field rating scale has been developed to indicate the overall condition of the observed
street.
1 Indicates an equivalent of a newly constructed street (crack sealing and minor patching)
2 Indicates slight imperfections in the street condition (crack sealing, slurry sealing, and/or
patching)
3 Indicates some deterioration has occurred and minor maintenance may be required (street
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)
9 Indicates nearly total replacement is required (limited salvage of street or parking lot area
is possible)
I 0 Indicates total replacement is required.
55
CITY OF PARKVILLE, MISSOURI
REQUIRED SUPPLEMENTARY INFORMATION -CONTINUED
DECEMBER 31, 2014
While the City desires to maintain these systems at higher levels in order to avoid significant
deferred maintenance costs, minimum acceptable condition levels have been defined as
having at least 80 percent of the streets at or below a rating of 5. The following table
compares the minimum acceptable conditions levels with the actual condition levels for
current and prior years.
Fiscal Number of Streets Number of Streets Actual Condition Minimum
Year Rated Rated :S 5 Level Acceptable
Condition Level
2001 149 140 94.0% 80.0%
2003 174 154 88.5% 80.0%
2005 186 175 94.1% 80.0%
2008 200 196 98.0% 80.0%
2011 203 199 98.0% 80.0%
2014 208 203 98.0% 80.0%
The City's goal is to continually improve the condition of its streets and parking Jots. 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 $400,000 annually. A total of $41,260 was spent
out of the Transportation Fund. The expenditures were for crack seal project ($! 7,564),
street striping ($6,902), street materials ($9,010), and the curb and sidewalk program
($7,784). The following table compares the budgeted expenditures planned to maintain the
system at a minimum acceptable condition level with actual amounts spent for the current
and prior years.
Fiscal Estimated Actual
Year Expenses Expenses
2005 $ 246,519 $ 241,190
2006 $ 292,227 $ 292,579
2007 $ 246,819 $ 213,183
2008 $ 256,481 $ 246,886
2009 $ 233,000 $ 233,000
2010 $ 234,000 $ 190,172
2011 $ 205,000 $171,177
2012 $ 205,000 $ 193,150
2013 $ 135,000 $ 91,236
2014 $ 245,000 $ 41,260
56
CITY OF PARKVILLE, MISSOURI
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
BUDGET ARY DISCUSSION
FOR THE YEAR ENDED DECEMBER 31, 2014
Budgetary Accounting
The City prepares its budget for the General Fund and Other funds on the cash basis of
accounting which approximates the accrual basis. Capital expenditures are budgeted and
shown similar to the way the expenditures appear in the Statement of Revenues,
Expenditures and Changes in Fund Balance. This basis is consistent with the basis of
accounting used in presenting the General Fund in the basic financial statements. All
unexpended appropriations lapse at year end.
Through the budget, the Board of Aldermen sets the direction of the City, allocates its
resources and establishes its priorities. The Annual Budget assures the efficient and effective
uses of the City's economic resources, as well as establishing that the highest priority
objectives are accomplished.
The Annual Budget covers the period from January 1, to December 31, and is a vehicle that
accurately and openly communicates these priorities to the community, businesses, vendors,
employees and other public agencies. Additionally, it establishes the foundation of effective
financial planning by providing resource planning, performance measures and controls that
permit the evaluation and adjustment of the City's performance.
The City's budget is prepared and based on various expenditure categories; personnel,
supplies and services, minor capital outlay and capital improvement programs. The first
three listed are considered operational in nature or known as recurring costs. Capital
improvement projects are asset acquisitions, facilities, systems, and infrastructure
improvements typically over $1,000 and/or those items 'outside' of the normal operational
budget. These are known as one-time costs.
The City collects and records revenue and expenditures within the Governmental Activities.
All fimding sources are kept separate for both reporting and use of the money. The General
Fund is where most City services are fimded that are not required to be segregated.
The budget process begins as a tean1 effort in August of each year. Then the individual
departments use projected revenue assumptions to prioritize and recommend the next fiscal
year's objectives. The City Administrator's Office review all budget proposals and revenue
assumptions, as well as all current financial obligations before preparing the document that is
proposed to the Board of Aldermen. The Board of Aldermen reviews the Proposed Budget
and the final adoption of the budget is scheduled for approval in December.
57
CITY OF PARKVILLE, MISSOURI
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES -BUDGET AND ACTUAL
GENERAL FUND
FOR THE YEAR ENDED DECEMBER 31, 2014
Original Variance with
and Final Final Budget -
Budgeted Actual Positive
Amounts Amounts (Negative)
Revenues
Taxes $ 1,067,700 $ 1,071,870 $ 4,170
Licenses 40,900 47,469 6,569
Permits 201,000 331,745 130,745
Franchise Fees 837,000 779,169 (57,831)
Sales Ta.xes 910,000 1,084,221 174,221
Other Revenue 28,200 103,181 74,981
Court Revenue 290,000 269,935 (20,065)
Interest Income 22,000 6,626 (15,374)
Miscellaneous Revenue 37,000 41,246 4,246
Transfer In 455,000 582,680 127,680
Total Revenues 3,888,800 4,318,142 429,342
Expenditures
Administration 909,886 907,279 2,607
Police 1,268,586 1, 174,585 94,001
Municipal Court 147,313 141,034 6,279
Public Works 241,414 147,694 93,720
Community Development 335,366 290,278 45,088
Street Department 360,137 346,824 13,313
Parks Department 327,008 312,283 14,725
Nature Sanctuary 28,300 27,618 682
Channel 2 & Website 17,600 15,749 1,851
Transfer Out 538,000 538,000
IT 46,900 34,167 12,733
Total Expenditures 4,220,510 3,935,509 285,001
Excess of Revenues over Expenditures $ (331,710) $ 382,633 $ 714,343
The accompanying notes are an integral part of the financial statements.
58
Actuarial
Valuation
Date
02-28-12
02-29-13
02-28-14
CITY OF PARKVILLE, MISSOURI
NOTES TO REQUIRED SUPPLEMENT ARY INFORMATION
SCHEDULE OF FUNDING PROGRESS
FOR THE YEAR ENDED DECEMBER 31, 2014
REQUIRED SUPPLEMENTARY INFORMATION
Schedule of Funding Progress
(b)
(a) Actuarial (b-a) (c)
Actuarial Accrued Un-funded (alb) Annual
Value Liability Liability Funded Covered
of Assets Entry Age CUAAL) Ratio Payroll
$288,350 $ 517,839 $ 229,489 56% $1,491,820
$446,213 $ 678,863 $ 232,650 66% $1,546,387
$600,063 $ 796,059 $ 195,996 75% $1,586,224
59
[(b-a)/c]
UAAL as a
Percentage of
Covered
Pavroll
15%
15o/o
12°/o
OTHER SUPPLEMENT ARY INFORMATION
60
Assets
Cash and Cash Equivalents
Restricted Cash and Investments
Other Receivables
Total Assets
Liabilities
Accounts Payable
Fund Balances
Unreserved, Reported in:
Special Revenue Funds
Community Betterment
Total Fund Balances
Total Liabilities and Fund Balances
CITY OF PARKVILLE, MISSOURI
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
DECEMBER 31, 2014
SEeciaI Revenue
Municipal Equip Guest Room Nature Park Court
Reserve Tax Sanctua!)' Donations Recoupment Fees
$ 3,281 $ 404 $ 42,781 $ 45,794 $ 38,892
$
$
$
-
3,281 $ 404 $ 42,781 $ 45,794 $ 38,892
1,530 $ -$ -$ -$ 14
1,751 404 42,781 45,794 38,878
1,751 404 42,781 45,794 38,878
3,281 $ 404 $ 42,781 $ 45,794 $ 38,892
The accompanying notes are an integral part of the financial statements.
61
Police Training
Fees -LET
$ 46,262
$ 46,262
$ 2,045
44,217
44,217
$ 46,262
Assets
Cash and Cash Equivalents $
Restricted Cash and Investments
Other Receivables
Total Assets $
Liabilities
Accounts Payable $
Fund Balances
Unreserved, Reported in
Special Revenue Funds
Community Betterment
Total Fund Balances
Total Liabilities and Fund Balances $
TIF
DeveloEment
12,355
-
5,448
17,803
-
17,804
-
17,804
17,804
CITY OF PARKVILLE, MISSOURI
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
DECEMBER 31, 2014
SEecial Revenue Permanent
Market Place Police Fewson
DeveloEment ShoE Total Project
$ 9,407 $ 3,971 $ 203,147 $ -
- - -559,301
- -5,448 -
$ 9,407 $ 3,971 $ 208,595 $ 559,301
$ -$ -$ 3,589 $ 1,410
9,407 3,971 205,006 -
- --557,891
9,407 3,971 205,006 557,891
$ 9,407 $ 3,971 $ 208,595 $ 559,301
The accompanying notes are an integral part of the financial statements.
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Total
Nonmajor
Governmental
Funds
$ 203,147
559,301
5,448
$ 767,896
$ 4,999
205,006
557,891
762,897
$ 767,896
CITY OF PARKVILLE, MISSOURI
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED DECEMBER 31,2014
SEecial Revenue
Municipal Equip Guest Room Nature Park Court Police Training
Reserve Tax Sanctuai::y Donations Recoupment Fees Fees -LET
Revenues
Investment Earnings $ -$ -$ -$ -$ -$
TIFRevenue
Legal Settlement
Miscellaneous -1,592 6,539 332 3,368 3,424
Total Revenues 1,592 6,539 332 3,368 3,424
Expenditures
Current
General Government -5,000 354 --2,588
TIF foqJense
Capital Outlay 1,530 -4,225
Total foqJenditures 1,530 5,000 4,579 --2,588
Excess (Deficiency) of Revenues
Over (Under) Expenditures (1,530) (3,408) 1,960 332 3,368 836
Other Financing Sources (Uses)
Other
Transfers In (Out) -1,500
Total OU1er Financing Sources -1,500
Net Change in Fund Balances (1,530) (1,908) 1,960 332 3,368 836
Fund Balances, Beginning of Year 3,281 2,312 40,821 45,462 35,510 43,381
Fund Balances, End of Year $ 1,751 $ 404 $ 42,781 $ 45,794 $ 38,878 $ 44,217
The accompanying notes are an integral part of the financial statements.
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CITY OF PARKVILLE, MISSOURI
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED DECEMBER 31,2014
Total
SEecial Revenue Permanent Nonmajor
Major TIF Market Place Police Fewson Governmental
Projects DeveloEment Development Shop Total Project Funds
Revenues
Investment Earnings $ 188 $ 100 $ 10 $ $ 298 $ 6,924 $ 7,222
TIF Revenue -436,968 -436,968 -436,968
Legal Settlement
Miscellaneous 3,360 -4,565 23,180 -23,180
Total Revenues 3,548 437,068 10 4,565 460,446 6,924 467,370
E>qiendi tu res
Current
General Government - - -3,428 11,370 3,115 14,485
TIFExpense -431,609 1,638 433,247 -433,247
Capital Outlay -- -5,755 5,755
Brink Meyer foqienses 316,446 - --330, 143 -330,143
Total foqienditures 316,446 431,609 1,638 3,428 766,818 3,115 769,933
Excess (Deficiency) of Revenues
Over (Under) foqienditures (312,898) 5,459 (1,628) 1,137 (306,372) 3,809 (302,563)
Other Financing Sources (Uses)
Other
Transfers In (Out) 249,520 -251,020 (2,932) 248,088
Total OU1er Financing Sources 249,520 - - -251,020 (2,932) 248,088
Net Change in Fund Balances (63,378) 5,459 (1,628) 1,137 (55,352) 877 (54,475)
Fund Balances, Beginning of Year 63,378 12,345 11,034 2,834 260,358 557,014 817,372
Fund Balances, End of Year $ -$ 17,804 $ 9,406 $ 3,971 $ 205,006 $ 557,891 $ 762,897
The accompanying notes are an integral part of the financial statements.
64
tvlcmber Americun Inslitutc of
Certified Public Accountunts
BRUCE D. CULLEY, C.P.A., P.C.
3000 HROOKTREE LANE, SUITE 2111
GLADSTONE, MISSOURI 64119
816-153-I040 FAX: 816-153-0721
brucecullcy@sbcglobnl.net
Member Missouri Socicly of
Certified Public Accountants
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN
AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNAJENT A UDITJNG STANDARDS
The Board of Directors
City of Parkville
Parkville, Missouri
I have audited, in accordance with the auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government
Auditing Standards issued by the Comptroller General of the United States, the financial
statements of the governmental activities, the business-type activities, the aggregate
discretely presented component units, each major fund, and the aggregate remaining fund
information of the City of Parkville, as of and for the year ended December 31, 2014, and the
related notes to the financial statements, which collectively comprise the City of Parkville's
basic financial statements, and have issued my report thereon dated July 5, 2015.
Internal Control over Financial Reporting
In planning and performing my audit of the financial statements, I considered the City of
Parkville's internal control over financial reporting (internal control) to determine the audit
procedures that are appropriate in the circumstances for the purpose of expressing my
opinions on the financial statements, but not for the purpose of expressing an opinion on the
effectiveness of the City of Parkville's internal control. Accordingly, I do not express an
opinion on the effectiveness of the City of Parkville's internal control.
A deficiency in internal control exists when the design or operation of a control does not
allow management or employees, in the normal course of performing their assigned
functions, to prevent, or detect and correct, misstatements on a timely basis. A material
weakness is a deficiency, or a combination of deficiencies, in internal control, such that there
is a reasonable possibility that a material misstatement of the entity's financial statements
will not be prevented, or detected and corrected on a timely basis. A significant deficiency is
a deficiency, or a combination of deficiencies, in internal control that is less severe than a
material wealmess, yet important enough to merit attention by those charged with
governance.
My consideration of internal control was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control
that might be material wealmesses or, significant deficiencies. Given these limitations, during
my audit I did not identify any deficiencies in internal control that I consider to be material
wealmesses. However, material wealmesses may exist that have not been identified.
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Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City of Parkville's financial
statements are free from material misstatement, I performed tests of its compliance with
certain provisions of Jaws, regulations, contracts, and grant agreements, noncompliance with
which could have a direct and material effect on the determination of financial statement
amounts. However, providing an opinion on compliance with those provisions was not an
objective of my audit, and accordingly, I do not express such an opinion. The results of my
tests disclosed no instances of noncompliance or other matters that are required to be
reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of my testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness
of the entity's internal control or on compliance. This report is an integral part of an audit
performed in accordance with Government Auditing Standards in considering the entity's
internal control and compliance. Accordingly, this communication is not suitable for any
other purpose.
Gladstone, Missouri
August 5, 2015
---~~~e~u~~
Certified Public Accountant
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(