Independence, Missouri June 30, 2006

City of Independence, Missouri Historic City of the Trails For the Fiscal Year Ended June 30, 2006 Comprehensive Annual Financial Report CITY OF INDEPENDENCE, MISSOURI COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2006 Mayor Don B. Reimal City Council Marcie Gragg District #1 Will Swoffer District #2 Renee Paluka -White District #3 Jim Page District #4 Lucy Young At-large Jim Schultz At-large City Manager Robert Heacock Prepared by the Department of Finance James C. Harlow, Director of Finance and Administration CITY OF INDEPENDENCE, MISSOURI Table of Contents Page Introductory Section: Organizational Chart 1 Letter of Transmittal 2-5 GFOA Certificate of Achievement 6 Financial Section: Independent Auditors’ Report 7-8 Management’s Discussion and Analysis 9-19 Exhibit Basic Financial Statements: Government-wide: Statement of Net Assets 1 20 Statement of Activities 2 21 Fund Financial Statements: Governmental Funds: Balance Sheet 3 22 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Assets 3.1 23 Statement of Revenues, Expenditures, and Changes in Fund Balances 4 24 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Statement of Activities 4.1 25 Proprietary Funds: Balance Sheet 5 26 Statement of Revenues, Expenses, and Changes in Fund Net Assets 6 27 Statement of Cash Flows 7 28 Fiduciary Funds: Statement of Fiduciary Net Assets 8 29 Statement of Changes in Fiduciary Net Assets 9 30 Notes to Financial Statements 31-68 Required Supplementary Information: Notes to Budgetary Comparison Schedules 69 Budgetary Comparison Schedule – General Fund 10 70-71 Schedule of Funding Progress and Employer Contributions – Retirement Plan 11 72 i CITY OF INDEPENDENCE, MISSOURI Table of Contents Exhibit Page Supplementary Information: Combining Balance Sheet – Nonmajor Governmental Funds 12 75 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Nonmajor Governmental Funds 13 76 Combining Balance Sheet – Nonmajor Special Revenue Funds 14 77 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Nonmajor Special Revenue Funds 15 78 Budgetary Comparison Schedules Tourism Fund 16 79-80 Community Development Block Grant Fund 17 81-82 Rental Rehabilitation Fund 18 83-84 Street Improvement Sales Tax Fund 19 85-86 Park Improvement Sales Tax Fund 20 87-88 Storm Water Sales Tax Fund 21 89-90 Police Public Safety Sales Tax Fund 22 91-92 Fire Public Safety Sales Tax Fund 23 93-94 Grant Fund 24 95-96 Combining Balance Sheet – Nonmajor Sales Tax Funds 25 97 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Nonmajor Sales Tax Funds 26 98 Combining Balance Sheet – Nonmajor Capital Projects Funds 27 99 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Deficit) – Nonmajor Capital Projects Funds 28 100 Combining Statement of Net Assets – Internal Service Funds 29 101 Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets – Internal Service Funds 30 102 Combining Statement of Cash Flows – Internal Service Funds 31 103 Combining Statement of Changes in Assets and Liabilities – All Agency Funds 32 104 Combining Balance Sheet – Discretely Presented Component Unit – Tax Increment Financing 33 105-106 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Deficit) – Discretely Presented Component Unit – Tax Increment Financing 34 107-108 Schedules of Operating Expenses – Power and Light Fund 35 109-110 Schedule of Operating Statistics – Power and Light Fund 36 111 Schedules of Operating Expenses – Water Fund 37 112 Schedule of Operating Statistics – Water Fund 38 113 Schedule of Operating Statistics – Sanitary Sewer Fund 39 114 ii Table Page Statistical Data (Unaudited): Net Assets by Component 1 115 Changes in Net Assets 2 116-117 Fund Balances of Governmental Funds 3 118 Changes in Fund Balances of Governmental Funds 4 119 Total City Taxable Sales by Category 5 120 Sales Tax Rates Direct and Overlapping Governments 6 121 Assessed Value and Estimated Actual Value of Taxable Property 7 122 Property Tax Rates Direct and Overlapping Debt 8 123 Principal Property Taxpayers 9 124 Property Tax Levies and Collections 10 125 Ratios of Outstanding Debt by Type 11 126 Ratios of General Bonded Debt Outstanding 12 127 Direct and Overlapping Governmental Activities Debt 13 128 Legal Debt Margin Information 14 129 Pledged-Revenue Coverage 15 130 Demographic and Economic Statistics 16 131 Principal Employers 17 132 Full-time Equivalents City Government Employees by Function/Program 18 133 Operating Indicators by Function/Program 19 134 Capital Asset Statistics by Function/Program 20 135 iii City of Independence, Missouri Organizational Chart Citizens Mayor and City Council Boards and Commissions Management Analyst City Clerk Municipal Court CITY MANAGER City Counselor Assistant City Manager Deputy City Manager Police Fire Power & Light Communications Parks & Recreation Finance Administration Community Development Human Resources Water - Accounting - Planning & Zoning - Budgeting - Building Permits - Purchasing - Housing Rehabilitation Water Pollution Control Technology Services - Licensing - Historic Preservation (computers, telephones) Tourism/National Public Works Health Frontier Trails Ctr. - Street Maint. - Animal Control - Traffic Signs - Food & Institution - Constr. Inspections - Community Health and - Engineering Nursing Promotion - Facilities Maint. - Code Enforcement Memorial Wall located by the Truman-Memorial Building On West Maple Street Picture courtesy of Herbert Webb ( '--"" --~ C-.-:::: t/ "--' -' 111EAST MAPLE. P.O. BOX 1019 . INDEPENDENCE,MISSOURI 64051-0519 www.ci.independence.mo.us.(816) 325-7000 November 1,2006 Honorable Mayor, Members of the City Council, and Citizens of the City of Independence, Missouri The FinanceDepartment is pleasedto presentthe ComprehensiveAnnual Financial Report (CAFR) of the City of Independence,Missouri, for the fiscal year endedJune 30, 2006. This report is submittedto you for your review in compliancewith the provisionsof Article 3, Section3.34 of the City Charter. The responsibilityfor accuracy,completeness and fairnessof the datapresented, including all disclosures, restswith the City. I believe the report, aspresented, is accuratein all material aspectsand is presentedin a mannerdesigned to fairly set forth the financial position and the results of the City, on a Government- wide and Fund basis. It is our belief that all disclosuresnecessary to enable the reader to gain an understandingof the City's financial activities havebeen included. To enhancethe reader'sunderstanding of thesefinancial statements,note disclosureshave been included as an integral part of this document. This report was preparedby the City's Finance Departmentstaff in accordancewith generalaccepted accounting principles (GAAP), which are unifonn minimum standardsand guidelines for financial accountingand reporting in the United States. This report is intendedto provide sufficient infonnation to pennit the assessmentof stewardshipand accountabilityand to demonstratelegal compliance. During the fiscal year endedJune 30, 2006, the City completedthe retroactive infrastructurereporting requirementsof the Governmental Accounting StandardsBoard (GASB) Statement No. 34, Basic Financial Statements - and Management 's Discussion and Analysis for State and Local Governments. The City of Independence'sfinancial statements,as required by the Charter, have been audited by Cochran,Head & Co,. P.C. The goal of the independentaudit was to provide reasonableassurance that the financial statementsof the City of Independencefor fiscal year ended June 30, 2006 are free of material misstatement.The independentaudit involved examining,on a test basis, evidencesupporting the amountsand disclosuresin the financial statements;assessing the accountingprinciples used and significant estimatesmade by management;and evaluatingthe overall financial statementpresentation. The independentauditor concluded,based upon the audit, that there was a reasonablebasis for rendering an unqualified opinion that the City of Independence'sfinancial statementsfor the fiscal year endedJune 30, 2006,are fairly presentedin conformity with GAAP. The independentauditor's report is presentedas the first componentof the financial sectionof this report. The independentaudit of the financial statementsof the City of Independencewas part of a broader, federally mandated"Single Audit" designedto meet the specialneeds of Federalgrantor agencies. The standardsgoverning Single Audit engagementsrequire the independentauditor to report not only on the fair presentationof the financial statements,but also on the audited government'sinternal controls and compliancewith legal requirements,with specialemphasis on internal controls and compliancewith legal requirementsinvolving the administrationof federal awards. Thesereports are available in the City of Independence'sseparately issued Single Audit Report. AN EQUAL OPPORTUNITY EMPLOYER. A COMMUNITY IN EASTERN JACKSON COUNTY GAAP requiresthat managementprovide a narrative introduction, overview and analysisto accompany the basic financial statementsin the form of Management'sDiscussion and Analysis the (MD&A). This letter of transmittalis designedto complementthe MD&A and shouldbe read in conjunctionwith it. The City of Independence'sMD&A can be found immediately following the report of the independent auditor.

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