C O M P R E H E N S I V E a N N U

C O M P R E H E N S I V E A N N U A L F I N A N C I A L R E P O R T JULY 1, 2019 JUNE 30, 2020 Louisville/ Jefferson County Metro Government Commonwealth of Kentucky COMPREHENSIVE ANNUAL FINANCIAL REPORT LOUISVILLE/JEFFERSON COUNTY METRO GOVERNMENT LOUISVILLE, KENTUCKY Fiscal Year Ended June 30, 2020 GREG FISCHER Mayor Prepared by: Office of Management & Budget LOUISVILLE/JEFFERSON COUNTY METRO GOVERNMENT COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Fiscal Year Ended June 30, 2020 TABLE OF CONTENTS INTRODUCTORY SECTION Letters of Transmittal i Profile of the Government vii Government Finance Officers Association Certificates of Achievement xiv Organization Chart xv Mayor, Metro Council, and Office of Management and Budget Officials xvi Metro Louisville District Map xvii FINANCIAL SECTION Independent Auditors’ Report 1 Management’s Discussion and Analysis 3 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Position 15 Statement of Activities 16 Fund Financial Statements: Balance Sheet - Governmental Funds 18 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position 19 Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds 20 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 22 Proprietary Funds: Statement of Fund Net Position 23 Statement of Revenues, Expenses, and Changes in Fund Net Position 24 Statement of Cash Flows 25 Fiduciary Funds: Statement of Fiduciary Net Position 26 Statement of Changes in Fiduciary Net Position 27 Component Units: Combining Statement of Net Position 28 Combining Statement of Activities 30 Notes to the Financial Statements 31 Required Supplementary Information: Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual – General Fund on Basis of Budgeting 121 Other postemployment benefits – Schedule of Proportionate Share of the Net OPEB Liability 122 Other postemployment benefits – Schedules of Contributions CERS OPEB 123 Pensions Schedule of Proportionate Share of the Net Pension Liability 124 Pensions Schedules of Contributions CERS Pension 126 Pensions – Schedule of Changes in the Net Pension Liability - Single Employer 127 Pensions – Schedule of Contributions - Single Employer 129 Pensions – Schedule of Investment Returns - Single Employer 130 LOUISVILLE/JEFFERSON COUNTY METRO GOVERNMENT COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Fiscal Year Ended June 30, 2020 TABLE OF CONTENTS Other Supplementary Information: Combining and Individual Fund Statements and Schedules: Combining Balance Sheet – Nonmajor Governmental Funds 132 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Nonmajor Governmental Funds 133 Combining Statement of Net Position – Internal Service Funds 134 Combining Statement of Revenues, Expenses, and Changes in Net Position – Internal Service Funds 135 Combining Statement of Cash Flows – Internal Service Funds 136 Combining Statement of Fiduciary Net Position – Agency Funds 137 Combining Statement of Changes in Assets and Liabilities – Agency Funds 138 STATISTICAL SECTION Summary of Net Position and Changes in Net Position 142 Fund Balance, Governmental Funds 143 Changes in Fund Balance, Governmental Funds 144 General Government Revenues by Source 145 General Fund Tax Revenues by Source 146 Employment, Income and Occupational Tax Revenues 147 Principal Withholding Taxpayers 148 Assessed and Estimated Actual Value of Taxable Property – Metro Government 149 Assessed and Estimated Actual Value of Taxable Property – Urban Services District 150 Property Tax Rates – Direct and Overlapping Governments 151 Principal Property Tax Payers 152 Property Tax Levies and Collections 153 Legal Debt Margin 154 Direct and Overlapping Governmental Activities Debt 155 Ratios of Outstanding Debt by Type 156 Ratios of General Bonded Debt Outstanding 157 Pledged Revenue Coverage 158 Demographic & Economic Indicators - Population Growth 159 Principal Employers 160 Number of Government Employees by Function/Program 161 Miscellaneous Operating Indicators and Capital Asset Information 162 OFFICE OF THE MAYOR LOUISVILLE, KENTUCKY GREG FISCHER MAYOR December 23, 2020 To all whom Metro Government serves, I am pleased to present the Comprehensive Annual Financial Report of Louisville/Jefferson County Metro Government (“Metro Government”) for the fiscal year ending on June 30, 2020. This financial report details how Metro Government has managed the resources with which we have been entrusted. FY20 presented Metro Government and the residents whom we serve with unprecedented challenges no one could have foreseen at its start. The onset of a worldwide pandemic and resulting economic downturn, coupled with civil unrest, have led to dramatic shifts in the focus of our service delivery, requiring Metro Government to balance the need to address these challenges with our commitment to progress on our strategic plan and providing excellent services city-wide. Upon notification of the arrival of the COVID-19 virus in the United States, Metro Government agencies, including Louisville Metro Public Health and Wellness and the Mayor’s Office, worked with community partners to conduct mock exercises and create a plan of action to ensure that the community was prepared to address the pandemic. A few of our initiatives include: A new public COVID-19 Dashboard to track the city’s alert levels, case counts, hospitalization data, race and ethnicity data, the Daily Incidence Rate, and testing data, The One Louisville: COVID-19 Response Fund, which has helped provide rent, food, childcare, and transportation assistance to more than 3,000 low-income households, Small business, eviction prevention, and other assistance programs utilizing dedicated funds from the Coronavirus Aid, Relief, and Economic Security Act. In addition to the challenges presented by the ongoing public health crisis, Louisville, like many other cities, was faced with ongoing civil unrest following the tragic death of resident Breonna Taylor, as well as an increase in gun violence. Metro Government responded by committing to reimagining public safety and providing greater transparency and accountability in an effort to rebuild trust between our police department and the larger community. A few of the initiatives implemented so far include: A top-to-bottom review of Louisville Metro Police Department (“LMPD”) policies and procedures with an outside consulting firm, Increased officer pay, increased recruitment of women, Black, and other minority officers, as well as a proposed housing incentive for officers to live in low-income census tracks, all in an effort to build a public safety unit that reflects the larger community that it serves, Breonna’s Law, an ordinance that includes the banning of “No-Knock” warrants, sets guidelines for the execution of search warrants by LMPD, and requires the use of body cameras when warrants are served. WWW.LOUISVILLEKY.GOV LOUISVILLE METRO HALL 527 WEST JEFFERSON STREET LOUISVILLE, KENTUCKY 40202 502.574.2003 i Through these ongoing challenges, we continue to work toward our strategic plan; to become a city of lifelong learning, an even more compassionate, equitable and resilient city; to maintain a vibrant economy; to provide a safe and healthy locale for residents and visitors alike; and to be innovative and operationally excellent. A few of the programs implemented and investments made include: The $38 million Dixie Highway Project reached its completion, providing a transformation of one of Louisville’s busiest thoroughfares, Investments in West Louisville, such as the new Beecher Terrace community and Norton Sports Health and Learning Complex began or continued construction, “Build Back Better, Together” initiative launched in mid-2020 to help aid in the city’s economic recovery by focusing on seven key areas: arts and culture, built and natural environments, economy, education and talent development, health and safety, hospitality, sports and Bourbonism, and social infrastructure and impact, A new state-of-the-art complex opened in October 2019 for Louisville Metro Animal Services (“LMAS”) dedicated to the rescue and adoption of stray animals. The facility includes an in-house surgery center, helping make the services provided by LMAS more efficient and cost effective. Because of our continued investments in improvements city-wide and our focus on growing business clusters, Louisville remains attractive to business, despite the economic challenges brought on by the pandemic. Our ability to attract new companies and help existing business grow earned the city first place in Site Selection’s annual Ohio River Corridor rankings. Additionally, Louisville was added to Glassdoor’s 25 Best Cities for Jobs in 2020. Fiscally, we were able to increase our unassigned General Fund balance from $70.9 million to $71.1 million—its highest level. This, in addition to Louisville’s resilient economy and stewardship of public resources, allowed the city to maintain its positive credit rating from the three nationally recognized credit rating agencies: Fitch Ratings, Inc. (AAA); Moody’s Investors Service (Aa1) and Standard & Poor’s (AA). In FY21 and beyond, we will continue to face challenges due to increased pension funding requirements and the economic aftereffects of the pandemic, but we remain committed to improving our fiscal position. This is the tenth Comprehensive Annual Financial

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