Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2020

SM Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2020 CITY OF INDEPENDENCE, MISSOURI COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2020 Mayor Eileen Weir City Council John Perkins District #1 Brice Stewart District #2 Michael Steinmeyer District #3 Dan Hobart District #4 Karen DeLuccie At-large Michael Huff At-large City Manager Zachary Walker Prepared by the Department of Finance and Administration Bryan Kidney, Director of Finance and Administration Cindy Gray, Chief Financial Officer Nancy Cooper, Accounting Supervisor CITY OF INDEPENDENCE, MISSOURI Table of Contents Page Introductory Section: Organizational Chart 1 Letter of Transmittal 2-6 GFOA Certificate of Achievement 7 Financial Section: Independent Auditors’ Report 8-9 Management’s Discussion and Analysis 10-21 Exhibit Basic Financial Statements: Government-wide: Statement of Net Position 1 22 Statement of Activities 2 23 Fund Financial Statements: Governmental Funds: Balance Sheet 3 24 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position 3.1 25 Statement of Revenues, Expenditures, and Changes in Fund Balances 4 26 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Statement of Activities 4.1 27 Proprietary Funds: Statement of Net Position 5 28 Statement of Revenues, Expenses, and Changes in Fund Net Position 6 29 Statement of Cash Flows 7 30 Fiduciary Funds: Statement of Fiduciary Net Position 8 31 Statement of Changes in Fiduciary Net Position 9 32 Notes to Financial Statements 33-89 Required Supplementary Information: Budgetary Comparison Schedule – General Fund 10 90 Budgetary Comparison Reconciliation Schedule – General Fund 10.1 91 Notes to Budgetary Comparison Schedules 92 Schedule of Changes in Total OPEB Liability and Related Ratios 11 93 LAGERS Schedule of Changes in Net Pension Liability and Related Ratios 12 94 LAGERS Schedule of Contributions 13 95 i CITY OF INDEPENDENCE, MISSOURI Table of Contents Exhibit Page Supplementary Information: Combining Balance Sheet – Nonmajor Governmental Funds 14 96 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Nonmajor Governmental Funds 15 97 Combining Balance Sheet – Nonmajor Special Revenue Funds 16 98 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Nonmajor Special Revenue Funds 17 99 Budgetary Comparison Schedules Tourism Fund 18 100-101 Community Development Block Grant Fund 19 102-103 Rental Rehabilitation Fund 20 104-105 Street Improvement Sales Tax Fund 21 106-107 Park Improvement Sales Tax Fund 22 108-109 Storm Water Sales Tax Fund 23 110-111 Police Public Safety Sales Tax Fund 24 112-113 Fire Public Safety Sales Tax Fund 25 114-115 Grant Fund 26 116-117 Animal Services Use Tax Fund 27 118-119 Police Use Tax Fund 28 120-121 Combining Balance Sheet – Nonmajor Sales Tax Funds 29 122 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Nonmajor Sales Tax Funds 30 123 Combining Balance Sheet – Nonmajor Capital Projects Funds 31 124 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Deficit) – Nonmajor Capital Projects Funds 32 125 Combining Balance Sheet – Component Unit – Tax Increment Financing 33 126-127 Combining Schedule of Revenues, Expenditures, and Changes in Fund Balances (Deficit) – Component Unit – Tax Increment Financing 34 128-129 Combining Statement of Net Position – Internal Service Funds 35 130 Combining Statement of Revenues, Expenses, and Changes in Net Position – Internal Service Funds 36 131 Combining Statement of Cash Flows – Internal Service Funds 37 132 Combining Statement of Changes in Assets and Liabilities – All Agency Funds 38 133 Schedules of Operating Expenses – Power and Light Fund 39 134-135 Schedule of Operating Statistics – Power and Light Fund 40 136 Schedules of Operating Expenses – Water Fund 41 137 Schedule of Operating Statistics – Water Fund 42 138 Schedule of Operating Statistics – Sanitary Sewer Fund 43 139 ii CITY OF INDEPENDENCE, MISSOURI Table of Contents Table Page Statistical Data (Unaudited): Net Position by Component 1 141 Changes in Net Position 2 142-143 Fund Balances of Governmental Funds 3 144 Changes in Fund Balances of Governmental Funds 4 145 Sales Tax Revenue 5 146 Sales Tax Rates Direct and Overlapping Governments 6 147 Assessed Value and Estimated Actual Value of Taxable Property 7 148 Property Tax Rates Direct and Overlapping Debt 8 149 Principal Property Taxpayers 9 150 Property Tax Levies and Collections 10 151 Utility Sales by Category 11 152 Utility Rates by Category 12 153 Principal Utility Payers – Power and Light 13 154 Principal Utility Payers – Water 14 155 Principal Utility Payers – Sewer 15 156 Ratios of Outstanding Debt by Type 16 157 Ratios of General Bonded Debt Outstanding 17 158 Direct and Overlapping Governmental Activities Debt 18 159 Legal Debt Margin Information 19 160 Pledged-Revenue Coverage 20 161 Demographic and Economic Statistics 21 162 Principal Employers 22 163 Full-time Equivalents City Government Employees by Function/Program 23 164 Operating Indicators by Function/Program 24 165 Capital Asset Statistics by Function/Program 25 166 iii Citizens of Independence Mayor & City Council Management Analyst Municipal Court Boards & Commissions City Clerk City Manager Zachary Walker Assistant City Manager Assistant City Manager Mark Randall Adam Norris Police Municipal Services Fire Finance & Administration Animal Services Public Utilities Parks, Recreation & Tourism Community Development 1 December 23, 2020 Honorable Mayor, Members of the City Council, and Citizens of the City of Independence, Missouri The Finance Department is pleased to present the Comprehensive Annual Financial Report (CAFR) of the City of Independence, Missouri, for the fiscal year ended June 30, 2020. This report is submitted to you for your review in compliance with the provisions of Article 3, Section 3.34 of the City Charter. The responsibility for accuracy, completeness and fairness of the data presented, including all disclosures, rests with the City. We believe the report, as presented, is accurate in all material aspects and is presented in a manner designed 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 disclosures necessary to enable the reader to gain an understanding of the City’s financial activities have been included. To enhance the reader’s understanding of these financial statements, note disclosures have been included as an integral part of this document. This report was prepared by the City’s Finance Department staff in accordance with generally accepted accounting principles (GAAP), which are uniform minimum standards and guidelines for financial accounting and reporting in the United States. This report is intended to provide sufficient information to permit the assessment of stewardship and accountability and to demonstrate legal compliance. The City of Independence’s financial statements, as required by the Charter, have been audited. The independent audit was conducted by Rubin Brown, LLP. The goal of the independent audit was to provide reasonable assurance that the financial statements of the City of Independence for fiscal year ended June 30, 2020 are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unmodified opinion that the City of Independence’s financial statements for the fiscal year ended June 30, 2020, are fairly presented in conformity with GAAP. The independent auditor’s report is presented as the first component of the financial section of this report. The independent audit of the financial statements of the City of Independence was part of a broader, federally mandated “Single Audit” designed to meet the special needs of Federal grantor agencies. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also on the audited government’s internal controls and compliance with legal requirements, with special emphasis on internal controls and compliance with legal requirements involving the administration of federal awards. These reports are available in the City of Independence’s separately issued Single Audit Report. In fulfilling its responsibilities for reliable financial statements, management depends on the City's system of internal control. This system is designed to provide reasonable assurance that assets are effectively safeguarded and that transactions are executed in accordance with management's authorization and are properly recorded. Because the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements. In addition to the independent audit and the internal control system, the Charter provides that the Council appoint a Management Analyst. The Management Analyst performs such duties as directed by the Council. These duties include the continuous review of

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