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HomeMy Public PortalAbout2013 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 P ARKVJLLE, MISSOURI ADPITED FINANCI.1U; §~ATEMENTS . ' ,,::.. '/ ' ·:,:\ Member Missouri Society of Certified Public Accountants FOR ']'Il.]l; YE.AR ENDED DECEMBER 31, 2013 ' ·,, ' .. CITY OF PARKVILLE, MISSOURI TABLE OF CONTENTS Independent Auditor's Report ............................................................................... :···· .. ··············· I - 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 of the Governmental Funds to the Statement of Net Position ... .'.: .. '. .. :: ....................................... :, ............................. 15 Statement of Revenues, Expenditures aµd ·, · .• ··.. .• • Changes in Fund Balances -G!iyernmenta]f u~ds .............. : ............................ 16 -I 7 Reconciliation of the Statement ofR~~enues, ~xpeni:li(Ures and.'.·· Changes in F~nd Balances of Go~ernm.~rital F~rlds to iµe StaterµeHfdfActivities ............. :::.:::.' .................. ,, ....................................... 18 \:·:\ ProprietaryEu~\js. ···•• ... • ..• · Statement cif''l{et.Position:, ................................ '.'·'·'. ................................................... 19 Statement ofReyen\les, .f;}/Bendituresand Chariges in Fund Balances .................... 20 Statement of Cash Flows .... :.: .............. ,: ... :.:·.'. ........................................................... 21 > -,.'::':\· ;_;;-'_ .. _";,'_··---:-,·.::_----;' :: ' "··-:·.-:>·:·:_.:··:.:.:-. ,., '-<' : .'.:::('.·' Agency Funds / ; ' < . Statement of Assets and Liabilities, Municipal Court .............................................. 22 Notes t6 ·Basic Financial Statements ..................................................................................... 23 -51 Required Supplel11eptary Infoflhation Schedule of Revenues, Expenditures, and Changes in Fund Balances, Budget and Acttl~l General Fund ............................................................................. 52 -56 Schedule of Funding Progress ............................................................................................... 57 Other Supplementary Information Combining and Individual Fund Statement Schedules Combining Balance Sheet -Nonmajor Governmental Funds ........................................ 59 -60 Combining Statement of Revenues, Expenditures and Changes in Fund Balances -Nonmajor Governmental Funds ............................................................. 61 -62 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, 2013, 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 1 significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. 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, 2013, 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 lriformation 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 financial 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 29, 2014 2 Bruce Culley Certified Public Accountant 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, 2013. 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 government's total net assets increased by $839,040. The net assets increase is found in governmental activities where ther~ i~ a positive$862,461 net change, an.~ a positive $29, 108 after transfer change . fo. net assets reported in business~type activities. .. . .• . . . .. . 2. The City refinanced the temporary notes with the Brush Creek Sewer Project and Brink Myers Road Project duri11g the year. The notespayable on the Brink Myers Road Project increased $525 ,Ooo' and $80,000 on the Brush Creek Project. 3. The City continued to pay down its existing debt aside from.the temporary notes as indicated above. Debt connected With the general governmynt activities decreased $500,000 and the debt connected withthe business activities decreased $150,079. 4. As of the close of the current year, the City's government funds showed a combined ending balanceqf.$4,64~,593, a decrease ()f $142,318 from the prior year. In 2012, the City sho)yedan increase in governn:i~11t funds of $976,934 but $1,075,012 was attributed to a:I~gal settleme11t. ·. • 5. Major capital expenditures ~ere made to th~J3rink Myers Road Project during the year. The City expe11de:d.funds forepair t11e.retaining wall. The majority of the funds expended i)i 2013 h·acj. .been received. in a legal settlement in 2012. A total of $'.iJ96,452 :vyas ·expended on botl1 projects during the year including capitalized interest. · ' ':. · · 6. The City is invol~eci'\n majo~dri:iprovements to the sewer plant expending $466,805. The, project invol~es;: constniC:tion of a UV disinfectant chamber to meet EPA requrrements. The ptoject was in progress at year end and will be completed in 2014. 7. Subsequent to Decelll]jer 31, 2013, the City has secured permanent financing on the Brush Creek Sewer Project and Brink Myers Road Project. Since inception of the projects, tlie City has used short term financing of no more than two years to provide funds for the capital additions. 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; government-wide financial statements (Pages 12 through 13), fund financial statements (Pages 14 through 18), and notes to the financial statements beginning on Page 23. This 3 report also contains other supplementary information in addition to the basic financial statements themselves. Government-wide Financial Statements. The govemment-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 wheth.er 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 charJ.ge occurs, regardless of the liming of related cash flows. Thus, revenues and expenses ~e 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 (gove1'11111ental activities) from other functions that are intended to recover allor. a significant portion of their costs through user fees and charges (business-type (JCfivttiqs).'Jhe governmental activities of the City include general gove~ent, public safety) str~ets, edonolliic Cievelopment, and culture and recreation. The bu~iJ:iessS:tY!Je activities of th~ City include .s~wer service. '• 1' -:-».'.\'.'.-,':', Fund Financial Stat\lxn".nts Afilnd, is a grouping q'j'related accounts that is used to maintain control over resoilrces th~thave/been segregated for specific activities or objectives. The City, like other state and '10,9al gg'veITunents, ll~.es fuhd accounting to ensure and demonstrate compliance Wth fin;mce-refoteq .legal requiri;:ments. All of the funds of the City can be dividedjntO tWo categories: governmental funds and proprietary funds. ···-' -," '« .,._,. ::. Govef.11n1e11tal F1111ds Go11e1'/1/nentalfunds are used to account for essentially the same functions 'reported as gover11inental ai:tivilies in the government-wide financial statements. However, uri]ike the goverllrnent-wide financial statements, governmental fund financial statements foclls. on near-teh~ iriflows and outflows of spendable resources, as well as on balances ofspenclable resoz1rces available at the end of the fiscal year. Such information may be useful in evaluating a.g6vernment's near-term financing requirements. Because the focus df governmental funds is naITower than that of the government-wide financial statements, it is useful to compare the information presented for govemmental 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 4 provide a reconciliation to facilitate this comparison between governmental fimds and governmental activities. 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 ()peration of the sewer department. A budgetary comparison statement ~EIS been provided for the general fund to demonstrate compliance with this budget. · ': ' ' . . . The basic governmental fund financial statements cari be found on Pages 14 through 18 of this report. · Proprietary Funds The City maintains one type of proprietary.fw:id. Enterprise fimds are used to report the same functions presenteCI as bz1siness-type activities in the government­ wide financial statements. The City uses ent~rpris~ funds to accmu;1t for its sewer service operations. · · ·· · Proprietary funds provici!'lili~.:s.ame type of in:fi:>rination as the government-wide financial statements, only in more detaif:Theiproprietary fu];id is a major fund of the City. ·'···. ;,··.'. l· .. :·_·:·: -.·,' The basic propriet~; fuha finan~i'El! statements can be found on Pages 19 through 21 of this report. .,_, ,.. Age11cy;.F1111ds The only agency funds held by the City was for court bonds paid by defericlarits. The court bond's banl( account was equal to the detail of the bonds held. ',. ,, ' ' N~testo the Financial St~tements The notes provide additionatfaformation that is essential to a full understanding of the data provided in the 'gc)'vernmentiWide and fund financial statements. The notes to the financial statements can be found oir 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 5 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 summarized using a measurement scale, seen on Pages 52 -53 of this report. Estimated amounts needed to maintain and preserve these assets at the City's established service level are budgeted for annually. The combining and individual fund statements referred to earlier in connection with non­ major or governmental funds are presented on Pages 57 through 60 of this report. Government-wide Financial Analysis As noted earlier, net assets may serve over time as a useful indicator ofa,government's financial position. In the case of the City, assets exce¢di:d liabilities by $8,818;002 at the close of the most recent fiscal year. Gover11111e11talActivities Governmental activitiesincr~a~~d the City's net assets by $839,040. '• ," ', ' ' ' ' Busi11ess-type Activities The change in. net assets for busiiless"type activities increased net assets by $29,108. The net assets for bllsiness-type activities in the current fiscal year are $3,304,666. . .. Financial Analysis of the Government's Funds As noted earlier, the City, ii~·~s 'fund accounting• to ~nsure anddemonstrate compliance with finance-related legal requirements:". . ,t,'. ;·' i•"'' Go11er11111e11tal F1i11d~ 'Tliil:focus af the City's gov~fiin1e11tal fimds is to provide information on near-term inflows, outflo)Vs,;and balancc;:s ofspendable resources. Such information is useful in assessing the City's.financing requirernents. In particular, unreserved fund balances may s".J:Ve as a useful measure ofa government's net resources available for spending at the end,,qf the fiscal year. · · , .. ,:· ·::>::' As 1116Iiµon~d earlier in this. analysis, at the end of the current fiscal year, the City's governn1~!1tal funds reported combined ending fund balances of $4,645,593. Of that, $2,695,929 is 11011-spendabfo, restricted or assigned for various purposes. . . The general fund is the• c;hle'f operating fund of the City. At the end of the current fiscal year the general fund ballli),be was $960,434. As a measure of the general fund's liquidity, it is useful to compare both unreserved fund balance to total fund expenditures. Umeserved, undesignated fund balance represents 28% of total general fund expenditures. The City's fund balance of the general fund increased by $381,165 during the current fiscal year. The City's 2013 revenues and transfers in from other funds totaled $4,475,487 which is $191,502 higher than 2012. The City's 2013 expenses and transfers out to other funds totaled $4,094,322, which is $221,934 less than the prior year. 6 The debt service fund has a total fund balance of $1, 120,082, all of which is reserved for the payment of debt service. There was a net increase in the debt service fund balance of $78,542. Expenses in the debt service fund exceeded revenue by $120,863. This was offset by transfers to the debt service fund of $214,000. The capital projects fund has a total fund balance of $394,641. There were considerable expenditures on capital projects during the year on Brink Myers Road, The notes payable in connection with Brink Myers Road and Brush Creek Sewer were refinanced during the year. The City uses capital assets to provide servic.es Jo 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 assetsthemselves cannot be used to liquidate these liabilities. CITY OF PARKVILLE, MISSOURI NETASSETS SUMMARY DECEMBER 31, 2013 AND 2012 Govemment:al -Activities Business-~Ee Activities Total 2013 2012 2013 2012 2013 2012 Cash $ . 4,872,416 $ 4,852, 167 $ 1, !06,308 $ 1,187,684 $ 5,978,724 $ 6,039,85 I Account Receivables 1,744,044 1,634,372 105,141 98,781 1,849,185 1,733,153 Capital Assets 16,399,235 15,294,659 4,119,971 3,919,507 20,519,206 19,214,166 Other Assets 244,779 240,331 82,499 90,097 327,278 330,428 Total Assets $ 23,260,474 $ 22,021,529 $ 5,413,919 $ 5,296,069 $ 28,674,393 $ 27,317,598 Account Payables $ 478,014 $ 216,862 $ 259,545 $ 32,917 $ 737,559 $ 249,779 Uriearned Revenue 1,590,255 1,550,000 1,590,255 1,550,000 Bonds and notes Payable 15,528,413 15,415,214 1,834, 129 1,992,127 17,362,542 17,407,341 Other Liabilities 136,456 165,157 15,579 15,579 152,035 180.736 Total Liabilities 17,733,138 17,347,233 2,109,253 2,040,623 19,842,391 19,387,856 Net Position 5,527,336 4,674,296 3,304,666 3,255,446 8,832,002 7,929,742 Total Liabilities and Net Position $ 23,260,474 $ 22,021,529 $ 5,413,919 $ 5,296,069 $ 28,674,393 $ 27,317,598 7 CITY OF PARKVILLE STATEMENT OF ACTIVITIES SUMMARY FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012 Govemmcntul Activities Business-L).'.EC Activities Totnl 2013 2012 2013 2012 2013 2012 Progrnm Revenues Charges for Services $ 519,975 $ 558,668 $ 995,785 $ 1,026,169 $ 1,515,760 $ 1,584,837 Operating Grants und Contributions 56,650 56,650 Capital Grunts and Contributions 462,702 443,229 462,702 443,229 General Revenues Property Taxes 1,392,706 1,378,901 1,392,706 1,378,901 Franchise Tuxes 846,520 834,696 846,520 834,696 Sales Tuxes 1,408,629 1,461,532 1,408,629 1,461,532 Investment Eandngs 36,372 57,930 36,372 57,930 Intergovcmmental 317,827 58,582 317,827 58,582 Sewer Admin Fee 100,000 75,000 100,000 75,000 TIF 408,625 419,707 408,625 419,707 FEMA 217,450 217,450 Other 168,238 .. 193,023 I 0,404 6,61 I 178,642 199,634 Total Revenues 5,661,594 5, 755,368 1,006,189 1,032,780 6,667,783 6,788,148 Expenses General Government 1,003,472 1,351,454 1,003,472 1,351,454 Public Safety-Police 1,098,927 1,041,953 1,098,927 1,041,953 Public Safety-Court 135,530 139,918 135,530 139,918 Public Works • : 1,030,345 973,772 l,QJ0,345 973,772 Economic Development 274,998 294,161 3,268,274 3,507,097 Depreciation 243,545 248,436 243,545 248,436 Amortization 20,833 20,833 TJF 413,460 415,237 413,460 415,237 Interest and Fees 290,939 315,463 290,939 315,463 Other Capital Expenditures 154,291 348,415 154,291 348,415 Financing Costs 174,616 174,616 Other 28,308 28,308 Se\vcr 949,512 851,31 I 949,512 851,31 I Total Expenses 4,840,956 5,157,117 949,512 851,31 I 5,790,468 6,008,428 Change in Net Assets Before Transfer 820,638 598,251 56,677 181,469 877,315 779,720 Transfer 27,569 (27,569) Change in Net Assets After Transfer $ 848,207 $ 598,251 $ 29,108 $ 181,469 $ 877,315 $ 779,720 8 Proprietary Fu11ds The City's proprietary funds provide the same type of infommtion found in the government-wide financial statements, but in more detail. The net assets of the sewer service at the end of the year total $3,304,666. The sewer fund had revenues exceeding expenditures by $29,108 after transfer in 2013. This compares unfavorably with an increase in the net assets of$181,466 in 2012. 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, 2013, totals $20,519,206. The largest capital expenditure was connected with the Brink Myers Road project in the amount of approximately $980,000 which rebuilds the retaining wall. A legal settlement of $1,075,012 was received as reimbursement for the cost of rebuilding a retaining wall ip.2012. City of Parkville, JY[issouri . Capital Assets (Net ofDllpr~ciatiou) Land Buildings and Improvements Machinery and Equipment Infrastructure Construction in Process.· Total Governmental Activities 2013 $ . 869,880 3 310108 . '·.' ' ... :''. 336 363 '. ' ' .·',• 3,410,]08 8.472·:776 $16.399:235 ·'Business-type activities 2013 $ 59,975 1,973,411. 72,315 ''· l,547,465 466.805 $ 4.119.971 Total 2013 $ 929,855 5,283,519 408,678 4,957,573 7.743.129 $20.519.206 Additional information 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 outstanding of $17,363,436. General Obligation Bonds Certificates of Participation NID Limited Obligation City of Parkville, Missouri Outstanding Debt Governmental Activities Business-type Activities 0013 20P 2013 2012 $2,025,000 $2,290,000 $ - $ 5, 150,000 5,385,000 Total ?013 $2,025,000 5, 150,000 Temporary Notes 8,460,000 7,855,000 8,460,000 1,595,000 Revenue Bonds (SRF) 2004A 1,595,000 1,735,000 Capital Leases/ Lease-Purchase Deferred Amounts Total 159,940 . 170,018 159,940 (]06.587) Cl 14,786) 80,083 87 108 (26.504) lli,52 . .8Al1 $15415,?,JA $1 8350':! $1.m 126 $.17,363436 2012 $2,290,000 5,385,000 7,855,000 1,735,000 170,018 . (27,678) $l].407.3AQ The general government indebtedness increased $113, 199 and the business government indebtedness decreased $157,103. Economic Factors and Next Year's Budgets and Rates City of Parkville revenue for 2014 is projected to show modest gains over 2013 as economy activity within the City and the region continues to improve. The City's Property Tax revenue will increase by slightly. pver I% over 20.13. This continues a pattern of stable real estate values coupled .with ari iJ.lcreasing pace ofJ.lew construction since 2011. A dramatic increase in residenti?l .co,nstructioi;J.began in early 2013 and is continuing into 2014, with new building permits beingi,ssµf!d at a,'p,ace not seen since.before the recession. At the same time, residential property sales h~ve .~trerigthened with the improving real estate market. This bodes welt for C!tyreveriu.e for 2014 and beyond as the tax base continues to grow. Commercial construction has aJso begun to increase with several projects expected to begin develppment during 2014: These propertie~ should produce additional property and sales tax r~yenue in future years. AJthe same fone, vacancy rates for existing conunercial properties have re!Ilfilned relatively low;'with a fairly strong market demand for the vacated commercial space that does occur. These :increases in residential and commercial properties should add about 3% to the property taic J:mse in 2015. Since franchise taxes correlate with the number of homes and cpn:uµercial buildings in use, this revenue should keep pace with continued development. The strong construction environment will ensure that building permit fees exceed 2014 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 a large grocery store and expansion of a nearby specialty shopping district. The overall effects of this competition appear to have been minimal, with sales tax receipts for the first 5 months of 2014 exceeding the same 2013 period by more than 5%, which, in tum, was up 2.5% from 2012. If this trend continues, 2014 sales tax revenue will be 5% or more above the level that was budgeted. Overall, the City's General Fund 2014 revenue is expected to exceed the budgeted total. IO As in prior years, the City has budgeted cautiously, holding 2014 revenue and expenditure budgets at near 2013 levels. However, City personnel remain optimistic, expecting overall modest, but positive growth in revenue for 2014. Revenue receipts for the first 5 months of 2014 give confidence that the budgetary goals will be met or exceeded. City expenditures are well within levels anticipated in the 2014 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, 2013 Assets Cash and Cash Equivalents Restricted Cash and Investments Receivables, Ne\ of Allowance for Uncollectibles Taxes Accounts Deferred Charges Governmental Busines~.<F§p~ Activities Activities ·· Total ·\.::·.'.::::·:.>, .. $ 3,652,955 $ 1,077,970 $ 4, 730,925 1,219,46.f 28,33&> 1,247,799 ./: ... ': 1,p:1~;~27 ·· t1srt17 143,04~> 101,736' 105 141 ;>.:: ' 81,906 593 1615 827 •:::(;:',·:/·: 233,358 224,949 102,329 Prepaid Items Capital Assets Not Being Depreciated Land . . . . . . 869,880 , ... •·. 59;975 929,855 Constmction in Progress Infrastmcture Capital Assets, Net of Accumulatefff)'<iiJr~ciation Buildings and Improveme'}t$ . Machinery and Equipmeiit< .·. Infrastmcture Total As.s.etsI ' Liabilities .•.••. i\·········•·•'•'•'•'·••••<t)\···········•···· ···•. \•·•·. Accounts Pay~W~ and Other Ctirr~titLiabiliti¥s Accmed Interestfowable · · · · · Customer Deposit~ > Unearned Revenue Accmed Vacation Other Bonds and Notes Due Within One Year Due in More Than One Year Total Liabilities Net Position Invested in Capital Assets, Net of Capital Relaied Debt Restricted for Debt Service Capital Projects Reserve Endowment Fund Unrestricted Total Net Position ·••.• 8;47~;77p \ 3,375;6ss< ··:-'j''.:.-;::::'y·· :3310 108 ~ .... ;, ' 32?,087 $5~ 731 •• /%;3;260,474 $ 478,014 102,700 1,590,255 43,422 4,334 520,000 15,008,413 17,747,138 870,822 1,120,082 394,641 1,070,966 557,014 1,499,811 5,513,336 $ 466,805 8,939,581 3,375,653 1,973,411 5,283,519 72,315 407,402 1,547,465 1,583,196 5,413,919 28,674,393 259,545 737,559 2,094 104,794 13,485 13,485 1,590,255 43,422 4,334 150,590 670,590 1,683,539 16,691,952 2,109,253 19,856,391 2,245,018 3,115,840 28,338 1,148,420 394,641 1,070,966 557,014 1,031,310 2,531,121 3,304,666 $ 8,818,002 The accompanying notes are an integral part of the financial statements. 12 Functions/Programs Primary government: Governmental Activities General Government Public Safety -Police Public Safety -Court Public Works Economic Development Depreciation Amortization TIF Interest und Fees financing Cost Other Cnpitnl Expenditures Totul Govemmentnl Activities Business-type Activities Sewer Total Business-type Activities Totnl Primary Government CITY OF PARKVILLE, MISSOURI STATEMENT OF AVTIVITIES FOR THE YEAR ENDED DECEMBER 31, 2013 Net (Expense) Revenue und Program Revenues Changes in Net Assets Operating Capirnl Primary Govemn1ent Charges for Grants and Grunts and Governmental Business-type Expenses Services Contributions Contributions Activities Activities Total $ I ,003,472 1,098,927 $ 253,370 $ 266,605 135,530 1,030,345 274,998 243,545 20,833 413,460 290,939 174,616 • 154,291 4,840,956 949.512 949,512 $ 5,790.468 General Revenues Property Ta\'. Franchise Tax Sales Tax 519,975 995.785 995,785 . $ 1,515,760 Unrestricted Investment Earnings IntergoVernmentul Se\ver Admin Fees TIF MiscellaneoUs Other Total General Revenues Change in Net Assets Transfer Net Assets, Beginning of the Year $ $ $ 462,702 $ (287,400) $ (832.322) (135,530) (1,030,345) (274,998) (243,545) (20,833) (413,460) (290,939) (174,6 I 6) (154,291) 462, 702 (3,858,279) 462,701 (3,858,279) J.392,706 846,510 1,408,629 36,372 317,827 100,000 408,615 18,917 149.321 4,678,917 820,638 27,569 4,674,296 Net Assets, End of Year $ 5,512,503 The accompanying notes are an integral part of the financial statements. $ 13 46,273 46,273 46,273 10,404 10,404 56,677 (27.569) 3,275,558 3.304,666 $ (287,400) $ (832.322) (135,530) (1,030,345) (274,998) (243,545) (20,833) (413.460) (290,939) (174,616) ( 154.29 I) (3,858,279) 46,273 46,273 (3,812,006) 1,392,706 846,520 1,408,629 36,372 3 I 7,827 100,000 408,625 18,917 159,725 4,689,321 877,315 7,949,854 8,827,169 CITY OF PARKVILLE, MISSOURI BALANCE SHEET GOVERNMENTAL FUNDS DECEMBER 31, 2013 Trnnsporlntion CnpitnL · .Do bi-Other Total General Reserve Specinl Revenue Projcctii_/ ScrVib~,· · ._Govcn1mcntnl Govcn1mcntnl Fund Fund Fund Fuhd . Fund · .. Funds Assets Cush and Cush Equivalents $ 939,751 $1,070,966 s 239,45;!·.': $394,641 $ 517,297 s >490 848 Restricted Cash Investments 19,63} 642,814 ss!'.bw Rcccivoblcs, Net of Allo\VllUCc for Uncollcctiblcs Tuxes 1,003,968 611,859 Accounts Rcccivnblc 3,660 ._," Prepaid Items 101,736 -·-. T otnl Assets $2,049,115 $ i;11J,970 s 1,047,862 Liabilities and Fund Bnlnnce Liabilities Accounts Poynblc $ 583 $ 230,491 Unearned Revenue 651,305 Other Liabilities Total Liabilities 651,888 230,491 Fund Bnlunccs Nonspcndnblc Prepnids Restricted Capitol 282,099 394,641 Debt Service 1,120,082 Assigned Capital Purposes 557,014 Special Revenue 260,357 Unassigned General Fund 1,070,966 Total Fund Bulunees 1,070,966 282,099 394,641 1,120,082 817,371 Total Liabilities nnd Fund Bulunces $2,049,115 $1,070,966 $ 383,642 $394,641 Sl,771,970 s 1,047,862 The accompanying notes are an integral part of the financial statements. 14 Funds $ 3,652,955 1,219,461 1,615,827 128,217 101,736 $ 6,718,196 $ 478,014 1,590,255 4,334 2,072,603 81,736 676,740 1,120,082 557,014 260,357 1,949,664 4,645,593 $ 6,718,196 CITY OF PARKVILLE, lVIISSOUill RECONCILIATION OF THE BALANCE SHEET OF THE GOVERN!VIENTAL FUNDS TO THE STATEMENT OF NET ASSETS DECEMBER 31, 2013 Total Fund Balance in Governmental Fund Balance Sl:i.;:ef·• Amounts reported for governmental activities in the ~f!J:.\.emenf( of net assets are different because: ·:::-:=:--------_::.::.:- Capital assets used in governmental ac;:tiyities are not fi;i~¢i'!I resources and therefore are not repdrtedin.the funds. . Long-term liabilities, including bonds paia~!iJ: hf€ri9t9ue and payable in the curren\JJeriod and th~refqfe ~re ii()f . reported in the func:!s (N6fe'.2) ..... . Other Liabilities Deffered Charges Net Ass¢ts·.·BfGo'<er~~~~f:1··~~f1t11fiJ§;t·········· 16,399,235 (15,528,413) (146,122) 143,043 $ 5,513,336 The accompanying notes are an integral part of the financial statements. 15 CITY OF PARKVILLE, JVIISSOURI STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS Revenues Taxes $ Licenses and Permits Intergovernmental Charges for Services Fin es 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 FOR THE YEAR ENDED DECEMBER 31, 2013 .. ,:.·.· Transportation Capital/·. Debt General Reserve Special Revenue Proj'cti , Service ,,',,,•,, Fund Fund Fund Fund. •> f.und 2,776,648 $ -$ 328'479 250,482 -.·-· 60,621 -257,206 - 25,155 -- - 257,911 133 327,420 18,240 8,547 4,594 - -- 100,000 - 53,960 - 3',547,611 664,579 /).812,781 -85,954 - - 1096361 -- - -' '··:·.·····, 135i$30 --- 1,047,828 >· - - - - 274,998 • - - - - - - --500,000 - - -219,402 281,209 The accompanying notes are an integral part of the financial statements. 16 Other Governmental Funds $ 2,002 2,888 - 8,561 - 8,670 6,550 408,625 - 70,706 507,502 28,781 2,566 12,517 - - - Total Government Funds $ 3,647,855 253,370 317.827 25,155 266,605 327,420 36,372 135,282 408,625 100,000 174,166 5,642,677 1,027,516 1,098.927 135,530 1,060,345 274,998 500,000 500,611 CITY OF PARKVILLE, !VIISSOURI STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS Other TIF Expense Financing Costs Capital Outlay Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses) Note Proceeds -Refinancing Premium on Bonds Notes Retired -Refinancing Transfers In Transfers (Out) FOR THE YEAR ENDED DECEMBER 31, 2013 General Fund 3,367,498 180,113 - Reserve Fund Transportation Special Revenue Fund Capital .,:· Project~./····· Fund::· . Debt Service Fund 4,233 -98,8~:(:> 17~'~i~ .i~ --'-=="- 284, 778 \t;94,970 785,442 (120,863) .~·.·:···· 8,460,000 23,431 (7,855,000) 104,023 92];W7(5 \ · .·•... 4sb;qqq (726,824) .. (104,02$} i&9;764 (1,016,000) Total Other Financing Source! "' 201,052 • ti45,977 ·. >>.(926,236) 732,454 214,000 (14,595) 199,405 Net Changes in Fund Balances After Other Financing Sources Fund Balance, Beginning of Year 381,16$> 579,269 345,977 ' .-·_.,..- . · .. · 72'.4,989 (288,044) 337,499 78,542 570,143 57,142 1,041,540 o,;n 434 Fund Balance, End ofYear $ ---, $ 1,070,966 $ 282,099 $ 394,641 $ 1,120,082 The accompanying notes are an integral part of the financial statements. 17 Other Governmental Funds $ 413,460 1,187,402 1,644,726 (1,137,224) 234,368 (131,271) 103,097 (1,034, 127) 1,851.498 817,371 $ Total Government Funds 4,233 413,460 174,616 1,287,178 6,477,414 (834. 73 7) 8,460,000 23,431 (7,855,000) 2,020,031 (1,992, 713) 655,749 (178,988) 4,824.581 4,645,593 CITY OF PARKVILLE, MISSOURI RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITillS DECEMBER 31, 2013 Amounts reported for governmental activities in the statement different because: Net Change in Fund Balances -Total Government Fund~·· }. Governmental funds report capital outlays as expi;r\~\tyres. Hp)"'ever, in the statement of activities the cost of those assets is aJJocated>over their estimated useful lives and reported as depreciation expeil~~-This is the net :::u:::::::a:;a'.::~~:::~x:::~in(:.:e~~~~~~i~l~t~~ff~.~) .. ~:~~id~$·······~~rrent financial resources to governmental funds, {whill} the cl}p~yment of the principal of long-term debt •g.pp~y'.11es the dirrefit finailC\i\Yresources of governmental funds. Nej~h~r trari$~ption, how~y7r, has any effect on net assets. Also, governmiin!~l . fonds report the ~~~9t of issuance costs, premiums, discounts . and ~i~jt~r itll~<J"'B~P • d.e?i>is first issued, whereas these amounts arerdeferred artd' a~orti'ied in tli~ Statement of Activities. This is the ni;tiiri;~~iiiaf;~ppd pfiiid}p\IJ paym~iits and retired certificates of participatjqtj\ ...... · . . · · Refinan~ing :;~h~~~\ion in ;~~~ the ·~ond proceeds exceeded the bonds retired reported as ii)qrease in tll~ fund balance. Some expenses repo~gd:w4~: Statement of Activities do not require the use of current financial >resources and, therefore, are not reported as expenditures in governmental funds. Other Change in Net Assets of Governmental Activities $ (178,988) 1,104,537 500,000 (605,000) (5,419) 33,077 $ 848,207 The accompanying notes are an integral part of the financial statements. 18 Assets CITY OF PARKVILLE, lVIISSOURI STATEMENT OF NET ASSETS PROPRIETARY FUND -SEWER SERVICE DECEMBER 31, 2013 Current Assets Cash and Cash Equivalents Restricted Cash and Investments Accounts Receivable Prepaid Hems Total Current Assets Noncurrent Assets Deferred Charges Ca pi la! Assets Land Buildings and Improvements Construction in Progress Machinery and Eqmpme1nt.• Infrastructure Less Accumulated DejJreci~l:ig!l Total Capital Assets Total Nonc;JfibriiA.~sets Total Aii~ets Liabilities Current Liabilities·•·· Accounts Payablb~pdpU1er Curr~Ai Liabilities Accrued Interest Payuble . Customer Deposits Payablf · Current Portion ofRevenue)36nds Payable Current Portion of Leases Payable Total Current Liabilities Noncurrent Liabilities Revenue Bonds Payable, Nel Lease Payable Tola! Noncurrenl Liabilities Total Liabilities Net Position Invested in Capital Assets, Net of Related Debt Restricted Debt Service Unrestricted Total Net Assets $ 81,906 59,975 5,252,588 466,805 254,441 2,005,990 (3,919,828) 4,119,971 4,201,877 5,413,919 259,545 2,094 13,485 140,000 10,590 425,714 1,534,189 149,350 1,683,539 2, 109,253 2,245,018 28,338 1,031,310 3,304,666 The accompanying notes are an integral part of the financial statements. 19 CITY OF PARKVILLE, MISSOURI STATEIVIENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES PROPRIETARY FUND -SEWER SERVICE FOR THE YEAR ENDED DECEMBER 31, 2013 Operating Revenues Charges for Sales and Services Sewer Charges Total Operating Revenues Operating Expenses Cost of Sales and Services Depreciation and Amortization Total Operating Expenses Operating Income N onoperating Revenues (E)q:ieii\§~~) Interest Revenue Interest Expense Other Income Loan Fee Transfer Out Transfer In Change in Net Position Total Net Position, Beginning of Year as Adjusted Total Net Position, End of Year $ 995,785 995,785 609,883 295,393 905,276 90,509 5,872 (34,324) 4,532 (9,912) (33,832) 56,677 (48,431) 20,862 29,108 3,275,558 $ 3,304,666 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 DECEMBER31, 2013 Cash Flows from Operating Activities Receipts from Customers Payments to Suppliers Net Cash Provided by Operating Ar.t1v1t11,,.< Cash Flows from Capital and Related Financing Ac1·1v11ue. Payments on Leases Payable Acquisition of Capital Assets Sewer Plant Construction in Progress \ • .•... Principal Paid on Capital Debt < i Interest Paid on Capital Dept \\ // Other Income • ) t. Net Cash (U§e4)by Fin~ri6ipg Activitiei ·. '.":'-::-:-··.. · .. -.. -_::_-_,_., .. Cash Flows from Investing AcliYJtiel\. \. ... . ;·•··· Interest Received.... ·····\. < ···· .. </.<Y?·• N~fC~~h P~~\ifd~ci by I~V~~ting Activities (Decrease)i~d~~lj and Cash ~tj~iyalen;s>·· Cash, Beginning 6f' )'"~[lr Cash, End ofYear Reconciliation of Operating1ncome 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 Net Cash Provided by Operating Activities (10,079) (20,862) (257,417) (140,000) (52, 154) 4,532 (475,980) 5,872 5,872 (81,376) 1,187,684 $1,106,308 $ 90,509 295,393 6,360 (3,530) $ 388, 732 The accompanying notes are an integral part of the financial statements. 21 CITY OF PARKVILLE, MISSOURI ST A TEMENT OF ASSETS AND LIABILITIES AGENCY FUND DECEMBER 31, 2013 Assets Cash-Checking and Savings Total Assets Liabilities Due to Others Total Liabilities M:i\Jlii;ipaI co11rt $ I 1.833 The accompanying notes are an integral part of the financial statements. 22 CITY OF PARKVILLE, MISSOURI NOTES TO BASIC FINANCIAL STATEMENTS-CONTINUED DECEMBER 31, 2013 NOTE I -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Reporti11g E11tity 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. · Govem111e11t-Wide a11d F1111d Fina11cial State111e11ts The government-wide financial statements (i.e., the statement of n~t assets and the statement of activities) report information on all :of the activities of the government. Governmental activities, which normally,: · are supported by taxes and intergovernmental revenues, are reported sf:parately from business-type activities, which rely to a significant extent on fees arid 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 1) 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 partjcular function or sefiment. Taxes and other items not properly included among program.revenues are reported instead as general revenues. ' ' . . Separate finahclhl·. statements are provided' for governmental funds and proprietary funds. Major indivi~11~lgoyemmental funds and the major individual enterprise fund are reported as separate columns in the fund' financial statements . . Meas11re111e11tFoc11s, Basis of Acco1111ti11g, a11d Fi11a11cia/ State111e11t Prese11tatio11 Th() 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 recognizedas 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 irriposed by the provider have been met. 23 CITY OF PARKVILLE, MISSOURI NOTES TO BASIC FINANCIAL STATEMENTS-CONTINUED DECEMBER 31, 2013 NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -CONTINUED Measurement Focus, Basis of Accounting, 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 expendih!Ies related to compensated absences . and claims and judgments, are recorded only when paynient 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 ofthesefevenues. In one, monies must be expended for the specific puwose orproject before any amounts will be paid to the City; therefore, revenues are recognized )Jased. upon the expenditures recorded. In the other, monies are virtually unrestricted as to purpose of expenditure and are usually revocabk. only f9: 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 t[JXeS, franchise taxes, interest associated with the current fiscal period, and certain st11te : 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 reve1me 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 pro~isions prohibit their use until the year for which they were raised and budgeted.: Instead, they are offset by deferred revenue accounts. 24 CITY OF PARKVILLE, MISSOURI NOTES TO BASIC FINANCIAL STATEMENTS-CONTINUED DECEMBER 31, 2013 NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -CONTINUED 1Yfeasure111e11t Focus, Basis of Accom1ti11g, and Fbza11cial Statement Prese11tatio11 - Co11tbzued· 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. 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. 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 .arid expenses for each of the several debt service obligations are kept separate and accounted for independently of the otherp]Jligations so that funds available for each debt service obligation are used only forth at ob! igation. . . Em6rgellby Reserv\: Fund-This fund isused to account for financial reserves that are held by the City as.;i reserve for future projects or other needs. ' '' ,, ·. '·--' The City rep~rts the f6n¢wing maj;r proprietary fund: Sewer Service -Tlus .Amel accounts for the provision of waste water and sewer servic~s .. 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 ruleth~effect of inter-fund activity has not been eliminated from the government:wicle financial statements. Elimination of these charges would distort the direct costs aridprogram revenues reported for the various functions concerned. Amounts reported as program revenues include I) 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, 2013 NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -CONTINUED Measurement Focus, Basis of Accounting, 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 proprfrtary fund's principal ongoing operations. The principal operating revenues of the se'Yer 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 oncapital 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 nefassets and displayed in three components: · · . : __ ·: .. ,.... '.'.··'' 1. N ef invc~tll1ellt in capital assets -Consisting of capital assets, net of accumull\ted depreciation and reduced by the outstanding balances of any bonds, mortgages, notes or other borrowings that are attributable to the acquisiti~ii, 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, contribufors, or laws orregulations of other governments; or (2) law through constitutional provisions or enabling legislation. The City first utilizes restricted resources to finance qualifying activities. 3. Unr~strictedj)et position -All other net position that do not meet the definiticm of"restricted" or "net investment in capital assets". 26 CITY OF PARKVILLE, MISSOURI NOTES TO BASIC FINANCIAL STATEMENTS-CONTINUED DECEMBER 31, 2013 NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -CONTINUED Fund Balance Classifications 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, 2011. 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 -consiills of¥1ounts that can be spent only for the specific purposes stipulated by external resource providers, constitutionally, or thrqugh enabling legislation. The Restricted for Debt Service and Restricted for Capital Projects balances reflect amounts that are restricted for debt service and construction or o~er capital outlay projects. 3. Committed Fund Balance -consists offilnounts that can be used only for the specific purposes determined by a formal action of the District's highest level of decision-making authority (the Board of Aldermen) and do not lapse at year end. The comillitted fund balance consists of general board reserves. 4. Asslgned Fund Balance -consists of amounts intended for a specific purpose by the Board. of Aldermen that has been delegated authority 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. Caslz, Cash Equivalents and Investments 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 the funds required to accumulate interest. If a fund is not required to account for its own earnings by law or regulation, the earnings are allocated to the General Fund. 27 CITY OF PARKVILLE, MISSOURI NOTES TO BASIC FINANCIAL STATEMENTS-CONTINUED DECEMBER 31, 2013 NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -CONTINUED Cash, Cash Equivalents and I11vestme11ts '--Co11ti1111ed Missouri state statutes authorize the City, with certain restrictions, to deposit funds in open accounts and certificates of deposit. Missouri state statutes also require that collateral pledged must have fair market value equal to 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 indude 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 asset~ of the c.ustodial 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. · Receiliables and Payables All trade accounts receivable are shown net of an allowance for uncol!ectable. Management records a trade accounts receivable allowance based on percentages of collection estimated [rom'the aging of acco.unts receivable. At December 31, 2013, management detemiinedthat 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 pi:riod. Governmental funds unearned revenue is reported as follows: General Fund Property Tax Receivable Debt Service f{rnd Property Tax Receivable Property Taxes $1,003,968 611.859 $1.615.827 Property taxes are legally restricted for use in financing operations of the ensuing year. Accordingly, tl1e 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, 2013 NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -CONTINUED Property Taxes -Co11ti1111ed The City's property taxes are levied each November 1 based on the assessed value as of the prior January 1 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 tci levy taxes up to $LOO per $100 of assessed valuation for general governmental services other than the payment of principal and interest on long-term debt antj in unlimited amounts for the payillent of principal and interest on long-term debt. The tax levy per $100 of assessed valuation which supports the 2013 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 $190,251,216, Prepayments Oertainpa)'Illents to vendors reflect costs applicable to future accounting periods and are recorded asprepaymentsin both government-wide and fund financial statements. These item's are reported in the financial statements using the consumption method. • J\ 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 furid balance is considered non-spendable in an amount equal to the carrying value pf ~ie asset on the fund financial statements. Restricted Caslz a11d I11vest111e11ts 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, 2013 NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -CONTINUED Unamortized Bo11d Issuance Costs a11d Bo11d Premium a11d Discount On government-wide financial statements, issuance costs are deferred and amortized over the term of the bonds using the straight-line method. Unamortized issuance costs are recorded as a separate line item on the statement ofnetassefa,. Bond premiums are deferred and amortized over the term of the bonds using the straight-line method, which approximates the effective interest method. Bond premiums are presented as an addition to the face amount of the bonds .. Deferred Outflowsll11jlows 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. Clirrently, the City does rtot have any item that qualifies for reporting in this category. ·. · In addition to liabilities, the statemedt of financi'al' position and balance sheet will sometimes report a: s.ePfil'~te section fot.defei-red inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net positioriffund balance that applies' to a future period(s) and so will not be recognizecf~:i<an: inflow o'f resources (revenue) until that time. The govermnent has one type of iteill.,< Which filise under the il1odified accrual basis of accounting that qualifies for, reporting ~this category. Acc~rdingly, unavailable revenue is reported in. the governme11tal funds balance sheet. The governmental funds report unavailable revenues frcilTI .. property ta:X'es. These amounts are deferred and recognized as an ·inflow of resources in, the peri9d that the amounts become available. Capital Assets Capital assets, whic]i. include property, plant, equipment, infrastructure (e.g., roads, bridges, sidewalks ,and similar items) and construction in progress are reported in the applicable gciverninental or business-type activities columns in the govermnent-wide financial statements. As the City is a Phase III govermnent under Govermnental Accounting Standards GASB 34, it has elected to exercise its option to forego retroactively reporting govermnental infrastructure assets acquired prior to December 31, 2003. Govermnental infrastructure assets on the statement of net assets include only roads, bridges, sidewalks and similar items acquired subsequent to December 31, 2003. 30 CITY OF PARKVILLE, MISSOURI NOTES TO BASIC FINANCIAL STATEMENTS -CONTINUED DECEMBER 31, 2013 NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -CONTINUED Capital Assets -Continued Capital assets, excluding land, are defined by the City as assets with a cost of more than $2,500 and an estimated useful life of at least one year. All land purchases are capitalized regardless of cost. All purchased capital assets are valued at cost where historical records are available and at an estimated historical cost where no historical records exist. Donated capital assets are valued at their estimated fair market value on the date received. · The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend the life of the asset are not capitalized. · Major outlays for capital improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of the business-type activities is included as part of tl1e 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. th~ basic physical assets that allow the City to function. The assets include the street hetwork, storm drainage network, and pedestrian and vehicle bridges and buildings 'combined with the site amenities such as parking and landscaped areas used bftlieCity in tl1e conduct of its business. Each major infrastructi,Jid n~twp~k can be divided into subsystems. For example, the street network can be subdivided' into pavement, curbs, gutters, sidewalks, land, medians, etc. These· net:W~rks and subsystems are.· not delineated in the basic financial statements. Goyernmental streeiand p~king lot assets are reported using the modified approach a,s ·defined in GASB Statem~nt 34 for infrastructure reporting of these assets. When .·. using the modified appro'ach,•only those projects that add efficiency or capacity to street and parkirig lot assets .are capitalized. Street and parking lot assets are not d~preciated. 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 31 20-40 years 20-50 years 5 -7 years CITY OF PARKVILLE, MISSOURI NOTES TO BASIC FINANCIAL STATEMENTS-CONTINUED DECEMBER 31, 2013 NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -CONTINUED Co111pe11sated Absences City policies permit full-time employees to accumulate sick pay benefits and vacation time based on the number of years of service. Accumulated \facation payable is accmed when incurred in the government-wide financial statements and proprietary fund statements. In the governmental fund financial statements, a liability is accmed when it has matured, for example, as a result of employee resignations and retirements. Lo11g-Ter111 Obligatio11s In the government-wide financial statements, imd proprietary fund types in the .fund financial statements, long-term debt and 6ther Icing-term obligations are report~d as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net assets. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the effective interest method. Bonds .payable are reported net of the applicable bond premium or discount. Bond issuance· costs are reported as deferred charges and amortized over the term of the related·'debt. · In the fund financia] 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 debtissued is reported as a financing source. Premiums received on debt issuances are rep6qed as pther financing sources while discounts on debt issuances are reported as oiher fina6Cirig use~. Issuance costs, whether or not withheld from the actual debtpr.oceedsr~ .. ceived, are reported as debt service expenditures. ' ' · Use of Esti!11'ate~ ,The preparation of f~ancial statements in conformity with accounting principles generally accepted ill 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, 2013 NOTE 2 -RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS Compliance with State Rules 011 il'ftu:imum Percent of Re11e1111e Allowed from Traffic Fines In fulfillment of HB103, amending Section 302.341.2 RSMO; effective August 28, 2013, requiring municipalities to report the percent of anmial general operating revenue derived from fines and court costs for traffic violations: the City does not, and is not required to account separately for traffic fines and court costs from the total police fines and court costs prior to August 28, 2013 ih order to show compliance with the 30% maximum allowed by the above statute. However, total court revenue from all sources for 2013 was $257,910, compared to General Fund annual operating revenue of $3,547,610, or 7.3%, well below the 30% maximum allowed. Explanation of Certain Differences between the Govermilental Fund Balance Sheet and the Govemment-Wide Statement of Net Assets (Page 15) The governmental fund balance sheet.includes a reconciliatfon bety;een fund balance -total governmental funds and net assets pfgoyernmental activities as reported in the government-wide statement of net ass".tS. One e:le111entof thafreconciliation explains that "long-term liabilities, including bqµds payable, arenot due and payable in the current period aµd J)ierefore are not l'ep'ofted in the, funds". The details of this $(15,508,071) differel1ceare as follows: · Bonds Payable , Certificates of Participation Payable Neighborhodd Improvement District Limited General ()bligation Temporary Notes Accrued}nt.erest Payable Compensat~d Absences · Issuance Discount and Refunding Cost ofissuance' Net Reconciling Item for Long-term LiabHities (Page 15) 33 $ (2,025,000) (5, 150,000) (8,460,000) (95, 700) (43,422) 106,587 159.464 $ (15,508 071) CITY OF PARKVILLE, MISSOURI NOTES TO BASIC FINANCIAL STATEMENTS -CONTINUED DECEMBER 31, 2013 NOTE 2 -RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS-CONTINUED Expla11atio11 of Certain Dij]ere11ces between the Governmental Fund Statement of Revenues, Expenditures and Changes i11 Fund Balances a11d the Govemment-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 Brink Meyer Road Improvements Interest Capitalized · · Brink Meyer Road Brush Creek Depreciatip~ Expense . NeLRe~or1cilh1g Item for Capit!fl Outlays/Depreciation (Page 18) ·' . : i $ 151,630 980,049 120,822 95,581 (243.545) $ J.104 537 Another element ofthat n~conciliation states that "The issuance of long-term debt (e.g., bonds, Ieases),proyides cmTent financial resources to governmental funds, while the repa)'mentof the principal of Io11g-term debt consumes the current financial resources ofgovernmentalfunds. Neither transaction, however, has any effect on net . assets. Also, governmental funds report the effect of issuance costs, premiums, discounts, and sil11ilar 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 Deb,t Retired with Refinancing Total Refinancing of Brink Meyer Road NID New Bond Indebtedness Debt Retired with Refinancing Total 34 $ 4,935,000 ( 4.855.000) $ 80.000 $ 3,525,000 (3.000.000) $ 525.000 CITY OF PARKVILLE, MISSOURI NOTES TO BASIC FINANCIAL STATEMENTS -CONTINUED DECEMBER 31, 2013 NOTE 2-RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS-CONTINUED Principal Repayments General Obligation Bonds Certificates of Participation Total $ 265,000 235.000 $ 500.000 Another element of that reconciliation states that "Some expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds." The details of this $(5,419) difference are as follows: Compensated Absences Amortization ofissuance Costs Amortization of Deferred Refunding Difference Amortization of Bond Discounts Other Net Reconciling Item Relating to Certain Expenses (Page 18) NOTE 3-STEWARDSµIP,.COMPLIANCEAND ACCOUNTABILITY Budgets a11d]J11dgetary Ac~o1111ti11g $ 15;229 (12,634) (5,417) (2,782) 185 $ (5.419) Missouri statutes require that all political subdivisions of the State prepare an annual budget. GovernmentalfµIlds required to have legally adopted annual budgets are the general fund, the special revenue funds, and the debt service fund. Legally adopted .ari:rtual budgets are not required for the capital projects fund and the permanent fund. · Iludgeted expenditur~s cannotexceed budgeted revenues and unencumbered positive fund balances as reqllired 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 exc(;!ed appropriations). Department heads may malce transfers of appropriations within their departments. Upon written request, the City Administrator or the Boar.ci ofAldermen may by ordinance transfer part or all of any unencumbered appropriated baJance 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 2013. 35 CITY OF PARKVILLE, MISSOURI NOTES TO BASIC FINANCIAL STATEMENTS-CONTINUED DECEMBER 31, 2013 NOTE 4 -DEPOSITS AND INVESTMENTS As of December 31, 2013, the City had the following deposits and investments: US Treasuries and Agency Securities Deposits: Checking and Money Market Reported Amount/ Fair Value $ 175,149 5.803.575 $5.978.724 Reconciliation of Government-wide Statement of Net Assets to total deposits and investments: Cash and Cash Equivalents Restricted Cash and Investments Total Deposits and Investments Interest Rate Risk $ 4,730,925 1.247.799 $5.978.724 Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investJn.1::r1t:.~pe City does not pave a formal investment policy that limits investment ma¥1ties as a II!eans of managing its exposure to fair value losses arising from incre~sing<interest rates. It is the City's practice to place operating funds in either money market accounts or savings accounts. All longer-term investments are placed in Treasury securitieshavmg relatively short maturities. These consist of funds whose use is restricted and are unlikely to be needed prior to maturity (e.g. the J?c;:wson Trt1st). . • Credit Risk Missouri statutes prohibit municipalities from investing in derivative, leveraged, or speculative securities,; City agents invest funds for restricted debt reserves and unexpended debt proceeds in money market funds. Custodial CreditRfsk -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, 2013, the carrying amount of the City's deposits was less 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. 36 CITY OF PARKVILLE, MISSOURI NOTES TO BASIC FINANCIAL STATEMENTS-CONTINUED DECEMBER 31, 2013 NOTE 4 -DEPOSITS AND INVESTMENTS -CONTINUED 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, 2013, the City's investments were not exposed to custodial credit risk. I 37 CITY OF PARKVILLE, MISSOURI NOTES TO BASIC FINANCIAL STATEMENTS-CONTINUED DECEMBER 31, 2013 NOTE 5 -CAPITAL ASSETS Capital asset activity for the year ended December 31, 2013, 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 beingilepreciated Less Accumulated Depreciatio·n for Buildings arid Impr~yements . Machinery arid Equipri'ien( Infrastruc.ture . · Total Accumulated Depreciation · Total Capital Assets being Depreciated, Net Governmental Activities Capital A.~sets, 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 7,276,324 3,375,653 ll,521,857 . 4,153,323 1,842,031 . 44,663 6,040,017 . (743,930) .. (1,514,314) (8,932) (2,267,176) 3,772,841 $ 15,294,698 $ 59,975 59,975 4,838,888 233,579 2,381,388 7,453,855 (2,63 8,679) (171,584) (784,060) (3,594,323) 3,859,532 $ 3,919,507 38 Increases Decreases $ $ l,196,452 I, 196,452 151,630 151,630 (99,285) (142,984) (1,276) (243,545) (91,915) $ 1,104,537 $ $ $ 466,805 466,805 20,862 20,862 (226,798) (I 0,542) (49,863) (287,203) (266,341) $ 200,464 $ $ Ending Balance 869,880 8,472,776 3,375,653 12,718,309 4,153,323 1,993,661 44,663 6,191,647 (843,215) (1,657,298) (10,208) (2,510, 721) 3,680,926 $16,399,235 $ 59,975 466,805 526,780 4,838,888 254,441 2,381,388 7,474,717 (2,865,477) (182, 126) (833,923) (3,881,526) 3,593, 191 $4,119,971 CITY OF PARKVILLE, MISSOURI NOTES TO BASIC FINANCIAL STATEMENTS -CONTINUED DECEMBER 31, 2013 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 Channel 2 Total Depreciation Expense Business-type Activities -Sewer Operations $ 124,479 54,244 31,753 27,701 2, 116 3,252 $ 243,545 $ 287,203 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 ofcompletion. A retaining wall connected with Brink Myers Road collapsed in 2009. The City received $1,075,012 in 2012 in connection with a legal settlement. The amount received has been used to rebuild the retaining wall in 2013. 39 CITY OF PARKVILLE, MISSOURI NOTES TO BASIC FINANCIAL STATEMENTS -CONTINUED DECEMBER 31, 2013 NOTE 6-LONG-TERM OBLIGATIONS ,r,i;ii '.i!Jv A1 't The following is a summary of the debt transactiol,lsfi(\5lind~, notes a .. :~?'' for the year ended December 31, 2013: ,,·j!f~I;,,, ,i1 •• l.4~!Ji)11h 1~Hiii1J. jjlil· ii Beginning Govem111ental Activities: Balance ,,, Additions -==~--iiqmrir· '1ii1!jif Bonds Payable ~!' General Obligation Bonds $ 2,290,000 $ Certificates of Participation 5,385,000 ··i:p Neighborhood l1nprove111ent DistrictiqP!~U~J~t~i~rji~1 Limited Obligation Temp Note 1:s·s~;ooo 8,46il; 1 ooo '1'1)1•111 11 I: Less Deferred Amounts irl[;r 1;11/J'l'I''" for Issue Discounts , ~,~~~1~J~)11 a.,11 ~.. iii! t for Deferred Refundin ·' 75,8481 "l~Ji.:)1jl%1n;1n:1i~ - ·jf!f!i ·~''-!<' Governmental Acti i!Y'"' ~;;. •" Ending Balance .,,, $ 2,025,000 $ 5,150,000 (7 ,855,000) 8,460,000 2,782 (36, 156) 5,417 (70,431) Liabilities $ 8,460,000 $ (8,346,801) $ 15,528,413 $ Business-type Activl '" Bonds payable '"'IYiilliih11, 'ttq1,!11.,j Revenue Bonds (SRF) 20 ' " Lease Purchase Agree1nent Plus Deferred Amounts 87,108 $ $ (140,000) $ 1,595,000 $ (10,079) 159,940 (7,025) 80,083 Due Within One Year 270,000 250,000 (2,782) (5,417) 511,801 140,000 10,590 for Issue Pre111iu111s Business-type Activity Long-term Liabilities $ 1,992,127 ;;;,$~~~~-$ (157,104) $ 1,835,023 $ 150,590 $2,025,000 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 pernmnent financing as special assessment debt with governmental commitment. 40 CITY OF PARKVILLE, MISSOURI NOTES TO BASIC FINANCIAL STATEMENTS-CONTINUED DECEMBER 31, 2013 NOTE 6 -LONG-TERM OBLIGATIONS -CONTINUED Ge11era/ Obligatio11 Bo11ds The City issues general obligation bonds to provide funds for the acquisition, construction and renovation of major capital assets. General obligation bonds currently outstanding consist oftl1e 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 2,013.00 Outstanding December 31, 2013 $ 265,000 $ 2,025,000 $ 265,000 $ 2,025,000 On December 23, 2010, the City refinanced ilie 2001 General Obligation Bonds. The City issued $2,785,000 of new bonds to retire the 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, 2013, are as follows: 2014 2015 2016 2017 2018 2019 -2020 Governmental Activities Principal Interest $ 270,000 $ 51,363 275,000 46,256 280,000 40, 700 285,000 33,275 295,000 24,575 620,000 20,313 $ 2,025,000 $ 216,482 $2,025,000 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. 41 CITY OF PARKVILLE, MISSOURI NOTES TO BASIC FINANCIAL STATEMENTS-CONTINUED DECEMBER 31, 2013 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 10% of the assessed value of taxable tangible property and to incur additional general obligation indebtedness not exceeding, in the aggregate, an additional 10% of the assessed value of taxable tangible property for the purpose of acquiring rightscof-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. · De/eased 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 Participation The City issued .c~rtificates of participation series 2006 in the original amount of $6,405,000 withinterestrates ranging from 3.5% to 4.4% and with a final maturity in 2027. Principalpayments·are scheduled aiinually ranging from $75,000 to $490,000. The balance atDecember ~1, 2013, is $5,150,000. Proceeds from the certificates of partidipation were used for City Hall construction. Rush Creek stabilization, lan.d acquisition and other scheduled capital improvements . . : The annual requirertlents to amortize these certificates of participation are as follows: , . . . I ' 2014 2015 2016· 2017 2018 2019-2023 2024-2027 42 Principal $ 250,000 270,000 290,000 305,000 330,000 2,005,000 1.700.000 $5.150.000 Interest $ 215,097 204,890 193,758 181,781 168,840 604,083 173.140 $1.741.589 CITY OF PARKVILLE, MISSOURI NOTES TO BASIC FINANCIAL STATEMENTS-CONTINUED DECEMBER 31, 2013 NOTE 6-LONG.-TERM OBLIGATIONS-CONTINUED Neighborhood Improveme11t District Limited Obligatio11 Tempormy Notes The temporary notes on the Brush Creek Sewer Project and the Brink Meyer Road Neighborhood Improvement District were refinanced during the year. The 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 funds were used for the Brink Meyer Road Neighborhood Improvement District were for the extension of Brink Myers Road and the related retaining wall and the extension of electric and water utilities. The notes and interest thereon constitute a valid and legally binding indebtedness of the City, payable from special assessments 011 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 notes if the assessments are inadequate to support annual debt payments. Re11e1111e Bonds (SRF) 2004A The City issued Sewerage System Re~enue Bbrtds 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,,Pri]1cipw payments ares9heduled annually ranging from $30,000 to $170,000. The, bala116e atDecember 31, 2013, is $1,595,000. Bonds matfuili~611January,'1, 2015, and th'6reafter may be called at the option of the City for redempiio.rl and, pa)'ffient prior w, 111aturity in whole or in part on any date witl~theconsent ofthebimdholder,orcmeach June 1 and December 1, commencing December +; 2013, at thi:i ;I·edemption priCe of 100% of principal amount of the bonds ,redeemed, plus accrued interest to the redemption date. Bonds maturing on January 1, '2,019, January l, 2020, and Jarrnary 1, 2021, are not subject to redemption prior to rnatiJrity. . Series 2004A (SRF) Sewage System Refunding Revenue Bonds (SRF) are special, limited obligations ofthe 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, 2013, are as follows: 43 CITY OF PARKVILLE, MISSOURI NOTES TO BASIC FINANCIAL STATEMENTS -CONTINUED DECEMBER 31, 2013 NOTE 6-LONG-TERM OBLIGATIONS-CONTINUED 2014 2015 2016 2017 2018 2019-2023 2024 Principal $ 140,000 145,000 150,000 150,000 155,000 825,000 30.000 U.5-25.000 Interest $ 79,938 72,938 65,688 58, 188 50,688 128,950 1.350 Lill 740 The Sewerage Revenue Bond ordinance requires that the Sewerage System Fund be accounted for in a separate Enterprise Fund. If 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. 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 evenfofa deficiency in the pnncipal and interest account. Restricted assets of the depreciation .!ll}d replacemei\.t account are available to operate, maintain, or improve the system, call bonds or for payment of debt service in the event of a.~eficiency in other restricted assets. Lease Purchase Agreement '' •, ',' ·,, ': In July 2003, the City entered into a lease-purchase agreement wherein the City sold its sewer pl!ll}t for $sss;ooo aiid leaseditback for a period of twenty-two years. The proceeds from tjle lease-purchase were used to maim certain improvements to the · sewer plant property. Under the lease the City will have the full use of the property !ll}d will make rental payments, which will apply to the principal and interest under the]ease. Required payments under the lease purchase agreement on the sewer plant are as follows: 2014 2015 2016 2017 2018 2019-2023 2024-2027 44 Principal $ I 0,590 11, 126 11,689 12,281 12,902 74,997 26.355 $ 159.940 Interest $ 7,866 7,330 6,767 6,175 5,553 17,282 1.329 LD.302 CITY OF PARKVILLE, MISSOURI NOTES TO BASIC FINANCIAL STATEMENTS-CONTINUED DECEMBER 31, 2013 NOTE 7 -RISK MANAGEMENT The City is exposed to various risks of Joss 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' comp((nsation. 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 witl:J'respect to any fiscal year of MPR for which the City was a participant at any time during sui:h year; and in the event that MPR determines that an ass,essment is required if!' order to provide additional funds for the obligations of MPR for such year, and fur!her, in the event that the City was covered by the types 6fbenefits requiring the assessment during the time period in which the assessment atose; 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 ':Vould require an accrual of a liability as of December 31, 2013. MPR's financial statements are presented in its Comprehensive Annual Financial Report for the year enc!ed December 31, 2013. 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. 45 CITY OF PARKVILLE, MISSOURI NOTES TO BASIC FINANCIAL STATEMENTS-CONTINUED DECEMBER 31, 2013 NOTE 7 -RISK MANAGEMENT -CONTINUED Investments -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 fimd. The balance of the annual net income after distributions to the City isreinvested in the principal of the fund. On December 31, 2013 the trust assets had an account balance of $571,303. 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 antici]Jate tlmtth(: potential clajms against t11e City not covered by insurance, if any, resulting. from such •matters wollld not materially affect tl1e financial position of the City. ·· NOTE 9 -INTER-Fp:Nf, ~~SACTIONS .. I'·;: Inter-fund transfers for file year ended December 31, 2013, consisted of the following: TrB.Qsfer from Capita) Projects Fund Transferfrom Transportation Special Revenue Fund (Net) Transfer to Debt Service Fund Transfer to Non-Major Governmental Funds ' -· ' Transfer to General Fund (Net) $(] 90.236) $(736.000) $ 214.000 $ 640.431 $ 71.805 Transfers areused 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 fund to finance various programs accounted for in other funds in accordance with budgetary authorizations. 46 CITY OF PARKVILLE, MISSOURI NOTES TO BASIC FINANCIAL STATEMENTS-CONTINUED DECEMBER 31, 2013 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. LAGERS was created and is governed by statute, section RSMo. 70:600 -70.755. As such, it is the system's responsibility to adrnµllster the law in accordance with the expressed intent of the General Assembly. TJ:te plan is qualified under the Internal Revenue Code Section 401(a) and it is tax 9J(i:tnilt. ·. The Missoi.Iri Local Government Employees R.etiJ"ement 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 l-800c447c4334. Funding Status Full-time employe~s ofthe City contribute.A% of their gross pay to the pension plan. The June 30, 2013 statutorily required employer contribution rates are 3.9% (General) and 4.3% (Police) of annual. covered payroll. The contribution requirements of plan members are dete1n1ined l:Jy the governing body of the political subdivision. The contribution proVisions of the poli!ical subdivision are established by state statute. Amwal Pension Cost (A,PCJ and Net Pe11sio11 Obligation (NPO) The subdivision's annual pension cost and net pension obligation for the current year were as follows: · Annual RequiJ"ed Contribution Interest on NefPension Obligation Adjustrnentto Annual Required Contribution Annual Pension Cost Actual .. Contributions Increase (Decrease) in NPO NPO Beginning of Year NPO End of Year 47 $ 62,067 $ 62,067 62.067 CITY OF PARKVILLE, MISSOURI NOTES TO BASIC FINANCIAL STATEMENTS-CONTINUED DECEMBER 31, 2013 NOTE 10 -PENSION PLAN -CONTINUED The annual required contribution (ARC) was determined as part of the February 28, 2011 and February 29, 2012 annual valuation using the entry age actuarial cost method. The actuarial assumptions as of February 28, 2013 included: (a) a rate of return on the investment of present and future assets of 7 .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 Y!'!ar, 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-retiremenfmortality 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 js being amortized as a level percentage of projected payrolls on a closed.basis. The amortization period as of February 28, 2011 was 30 years for the General di.vision and 28 years for the Police division. The amortization period as of February 29,2012 was 30 years for the General division and 28 years for the Police division. One-Year Trend Information Year Annual PerCentage Net Ended Pension ofAPC Pension June 30, Cost CAPC) Contributed Oblioation 2011 $ 54,957 100.0% $ 0 2012 $ 61,229 100.0% $ 0 2013 $ 62,067 100.0% $ 0 The above assets ·ruid actuarial accru<:d Jiability do not include assets and present value ofbenefits associated with the Benefit Reserve Fund and the Casualty Reserve fund. The acti.iarial 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 in . Jefferson City, Mi~souri. 48 CITY OF PARKVILLE, MISSOURI NOTES TO BASIC FINANCIAL STATEMENTS-CONTINUED DECEMBER 31, 2013 NOTE 11-DISCLOSURES ABOUT FAIR VALUE OF ASSETS AND LIABILITIES ASC Topic 820, Fair Value lv!easurements, 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. Level I Quoted prices in active markets for identical assets or liabilities Level 2 Observable inputs other than Level 1 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 as.sets 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 fi11ancial position, as well as the general classification of such instruments pursuant to the valuation hierarchy. I11vest111e11ts Wh"r~ quoted marke!t11ri<:~s ate available .in an active market, securities are classified \Vithin Leveft o,f the ~aluation hieratchy. Level 1 securities include highly liquid rnoney marketfurids, U.S: Treasuries and exchange traded equities and mutual funds. ' If quoted market pri9es are not available, then fair values are estimated by using .pricing models, quoted prices of securities with similar characteristics or discounted cash flows. Lever 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. ,,·-,, ·' 49 CITY OF PARKVILLE, MISSOURI NOTES TO BASIC FINANCIAL STATEMENTS-CONTINUED DECEMBER 31, 2013 NOTE 11 -DISCLOSURES ABOUT FAIR VALUE OF ASSETS AND LIABILITIES - CONTINUED 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" 'erarchy in which the fair measurements fall at December 31, 2013. Government Securities: Trust Fund Debt Escrow Fair Value NOTE12-SUBSEQUENTEVENTS !!·. ·j The City has evaluated .. 1~1.!P~e![·l.l· .. e.nt events tht~,µgfl July 2 ,1i· .Ju1 1u111J,1"1/11 • .,flr111 ·i11ttr financial statements wefe·"avarl ·.· · i:Ho be issued. 111111 '1' 4l!1 In June 2014, the'' rus ... ,,.;,.reek S,1,er Project limi~~;~1119bligation notes and the Brink Meyer Road Project limited obli~~~on µ~~~~::~\'.\:~ refinanc,~a': Limited General Obligation Bonds of the City were. ,.,iss1.1ed. Tl~~llJJ~bfiii~®i!"fgil!JR!!oilll'~ided111'pem1anent financing for the City. The ,1!0):l''il''!•lii·11'1Jl!i1'Pt:' ''l"'f'l'll\1 """H:; l11lt•11tr•'' refinanciri'gl:fra~sail' I" mourit"t"· e as follows:" fFJr ... Brush 'ek Sewe Brink M~~~r Road1 il!ill~ alMilr • ,. .!•·ti' Notes Retired $4,935,000 $3,525,000 Bonds Issued $5,375,000 $3,675,000 NOTE 13 -UPCQ.~r,~~J:J\ccouNTING PRONOUNCEMENTS GASBS No. ,'67, Financial Reporting for Pension Plans-an amendment of GASB • Statement No.25, which is effective for financial statements for fiscal years beginning after June 15, 2013, with earlier implementation encouraged. GASBS No. 68, Accounting and Financial Reporting for Pensions-amendment of GASB Statement No. 27, which is effective for fiscal years beginning after June 15, 2014, with earlier implementation encouraged. 50 CITY OF PARKVILLE, MISSOURI NOTES TO BASIC FINANCIAL STATEMENTS-CONTINUED DECEMBER 31, 2013 NOTE 13 -UPCOMING ACCOUNTING PRONOUNCEMENTS -CONTINUED 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 I 5, 2013, with earlier implementation encouraged. GASBS No. 70, Accounting and Financial Reporting for Nonexchange Financial Guarantees, which is effective for reporting periods beginning after June I 5, 2013, with earlier implementation encouraged. 51 REQUIRED SUPPLEMENTARYINFORMATION Required supplementary information (RSI) .inch1des financial information and disclosures that are required by the GASB but are not considered a part of the b1IBic financial statements. Such information includes: · · · · • Modified Approach to Infr~structure Reporting . . • Budgetary Compfilifon Sc~~dule -General Fl.ind .· ... ··.· .-. ,• . 52 CITY OF PARKVILLE, MISSOURI REQillRED SUPPLEMENTARY INFORMATION DECEMBER 31, 2013 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 Cir above and to maintain all street~ within the City at a service level of s:·o or below for each respective type of street. A field rating scale has been developed to indlcate t1i~uverall condition of the observed street. Indicates an equivalent of a new! y constructed street (crack sealing and minor patching) 2 Indicates slight imperfections in the stree.t condition (crack sealing, slurry sealing, and/or patching) 3 Indicates some deterioration has occurred and minor maintenance may be required (street needs various rep~s fo rnallitilln condition; patches; possible milling and overlay) ' ' 4 Indicates notic~able deterioration maintenance is required (deterioration is significant and visually noticeable; repair miU and overlay) 5 Indicat,es 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, n.eeds 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 Jot area is possible) 10 Indicates total replacement is required. 53 CITY OF PARKVILLE, MISSOURI REQUIRED SUPPLEMENTARY INFORMATION -CONTINUED DECEMBER 31, 2013 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% 80.0o/o 2003 174 154 ·. 88.5% 80.0% • 2005 186 175 94.1% 80.0% 2008 200 196 i98.0%. ·. 80.0% 2011 203 199 98.0% 80.0% The City's goal is to continually improve .~he condition of its streets and parking lots. To achieve this goal, it is necessary to perform· maintenance activities and replace those assets that can no longer be economically maintained. To maintain the City's streets and parking Jots at or above the statedn1iniJnum condition leyel, it is estimated that annual preservation and replacement expendirures ml.1st exceed $400,000 armually. A total of $91,236 was spent out of the Transpqrtation Fund .. The major expenditures were for crack seal project ($14,303), slurry seal project ($10,970) and the curb and sidewalk program ($65,963). An additional $50,000 was carried .overto 2014 to. be combined with the 2014 budget appropriatio!l to a~hieve better pricing on a large~ project. The following table compares the estimateq expenditl.lres needed to maintair1the system at a minimum acceptable condition level with actual amoll!lis.spent Jar th(! current and prior years. Fiscal Estimated Actual Year Ex11enses Ex11enses 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 $ 400,000 $ 91,236 54 . CITY OF PARKVILLE, MISSOUIU NOTES TO REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY DISCUSSION FOR THE YEAR ENDED DECEMBER 31, 2013 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 thefoundation of effective financial planning by providing resource planning, performance measures and controls that permit the evaluation and adjustment of the Cify's performance. The City's budget is .~r~p:ITed and based on yarious expenditure categories; personnel, supplies and services, !Ilinor capital outlay and capital improvement programs. The first three listed are ~bnsidered operational in nature or known as recurring costs. Capital improvement projects ar~>. a~sf!t. acquisitions, ••. facilities, systems, and infrastructure improvements>typicaJly over. $1,900 and/or those items 'outside' of the normal operational budget. .These are known as one~tiil}e costs. · The City, collects and records revenue and expenditures within the Governmental Activities. All furiai.Ilg,sources are kept separate for both reporting and use of the money. The General Fund is where most City services are funded that are not required to be segregated. The budget process begins as a team effort in June 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. 55 Actuarial Valuation Date 02-28-11 02-28-12 02-29-13 CITY OF PARKVILLE, MISSOUIU NOTES TO REQUIRED SUPPLEMENT ARY INFORMATION SCHEDULE OF FUNDING PROGRESS FOR THE YEAR ENDED DECEMBER 31, 2013 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 CUAALl Ratio Payroll $186,859 $415,164 $ 228,305 45% $1,335,830 $288,350 $ 517,839 $ 229,489 56% $1,491,820 $446,213 $ 678,863 $ 232,650 66% $1,546,387 57 [(b-a)/c] UAAL as a Percentage of Covered Payroll 17% 15% 15% OTHER SUPPLEMENTARY INFORMATION 58 CITY OF PARKVILLE, JVIISSOURI COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS DECEMBER 31, 2013 SpecialRevenue • Municipal Equip Reserve Guest Room Tax Nature Sanctuary · Piirk Par1aiJh4 •Donations Dedicatidr( Court Recoupment Fees Police Training Fees-LET 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 $ I 1,438 $ 2,3 II ? 111 l.l&! $ -·- 3,281 - 3~281 i,3.it $ 40,82 I $< >15,1\62 $ -. •$ - -.... :.,·:··:· .. -,•. 45,462 \$ $ \40;821 $ $ $ -$ 40,821' • 45,462 :·,:'- 4o;s21 45,462 Total Liabilities and Fund Balances ._.$: l.l&! $ >\ ... 2,3~i<,i • 40,821 $ ~ $ -$ The accompanying notes are an integral part of the financial statements. 59 35,510 $ 43.381 ~ $ -13,381 -$ 35,510 43,381 35.510 43,381 ~ $ 43,381 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 $ $ Major Projects CITY OF PARKVILLE, MISSOURI COMBINING BALANCE SHEET NONlVIAJOR GOVERNMENTAL FUNDS DECEMBER 31, 2013 Special Revenue TIF Market Place Development Development {'. Other. 285,712 $ 12,345 $ 11,034 )~ >> 2,~j~ •.•• $ Permanent Fe,vson Total· Project 490,848 / $ 557,014 -- 285,712 $ 12,345 'i'i7 014 L!;.lli~'·· :L~12.&83:§4<$ .· 490,848 $ __ .. - $ $ $ $ D0~91 $ -$ ·-·,;\>:·,,::·:: 63,378 11,034•./ 2,834 260,357 ---,.-"'-·~·''"'···~··,,, .. ··-· ·· •• ·.,, .~--~"""----557,014 63,378 12);)!~ 11,034 2,834 260,357 557,014 Total Nonmajor Governmental Funds 490,848 557,014 1,047.862 130,491 160,357 557.014 817.371 Total Liabilities and Fund Balances ,.$? 285,712 $ ~($ --, 11 034 $ 2,834 $ 490,848 $ 557,014 $ 1,047,862 The accompanying notes are an integral part of the financial statements. 60 CITY OF PARKVILLE, MISSOURI COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS Revenues Inveslrnent Earnings TIFRevenue Legul Setllemenl Miscellaneous Total Revenues Expenditures Current General Government TIF Expense Cupitul Oulluy Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures OU1cr Financing Sources (Uses) Other Transfers Jn (Out) Total Other Financing Sources Net Change in Fund Balances ~und Balances, Beginning of Year Fund Balunces, End ofYeur FOR THE YEAR ENDED DECEMBER 31,2013 ..::·,:::. ~' Special R~~;~~H~:: Other Fees Municipal Equip Nature . Purk Purklund and Donations Reserve Guest Room Tux Sanctunr:~i<~:-:·; Donations .Dedication $ $ $ 10,525 25,295 10,525 25,295 ····.:,:".: 10,525 .195,620 10,525 .1'95,620 •' ·- <0..857) 170,431 .,_,._., .. _.:-, C3,8s7)( , . v. 1'7n 43J) (3,857) 3,857 $ ·106 j:175 3,281 $ -$ 2,003 .. i,QpJ 20,000<· 20,000 ,.,,, i !1~.~~"/5 <>' >2.o,ooo 20,000 2,003 309 $ 2,312 $ $., $ 6,058( 6,592 .. 6,058 · .. 6,592 11, 151 1,366 11,151 ;·· 4,692 (4,559) (64,764) (5,000) 43,938 (43,362) (5,000) (20,826) (43,362) (308) (25,385) (43,362) 41,129 70,847 43,362 40,821 $ 45,462 $ The accompanying notes are an integral part of the financial statements. 61 Court Recoupment Fees - 2,888 2,888 2,888 2,888 32,622 $ 35,510 $ $ Police Training Fees-LET 3,356 3,356 90 90 3,266 3,266 40,115 43,381 CITY OF PARKVILLE, MISSOURI COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS Revenues Investment Earnings TIF Revenue Legul Settlement Miscellaneous Toto! Revenues Expenditures Current General Government TIF Expense Cnpitul Oulluy Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Oilier Financing Sources (Uses) Other Transfers In (Out) Total Other Financing Sources Net Change in Fund Bnlnnces Fund Bui onces, Beginning of Year Fund Bnlonces, End of Y cur $ $ FOR THE YEAR ENDED DECEMBER 31,2013 Mnjor Projects 2,286 $ 2,286 Special Revenue TIF Markel Pince Development Development 92 $ 408,625 9 $ Other · ., 'Totul Pennnnent Fe\vson ·project $ 2,387 $ 6J:is21 $ i4Q8,625 : ___ 5~,2_0_4 .: 61,921 28,285 408,717 5,204 i&72,933 34,568 35,083 414,668 8,781 980,050 -.. , 1,186,195 980,050 i 4121.460 1,208 2,476 1,635,946 (1,199) 1,041,142 12,233 2,728 (1,163,013) (68,621) 186,007 117,386 2,728 (1,045,627) 106 1,305,984 8,781 25,787 (14,288) (14,288) 11,499 545,515 Total Norunnjor Governmental Funds 8,670 408,625 90,206 507,501 43,864 414,668 1.186, 195 1,644,727 (1,137,226) (68,621) 171,719 103,098 (1,034,128) 1,851,499 ~$ ~$ l1£ll $ 2,834 $ 260,357 $ 557,014 $ 817,371 The accompanying notes are an integral part of the financial statements. 62