Comprehensive Annual Financial Report 2008
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CITY OF HENDERSON, KENTUCKY COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2008 Betty Smithhart, Photographer CITY OF HENDERSON, KENTUCKY COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Fiscal Year Ended June 30, 2008 Prepared by the City of Henderson Finance Department CITY OF HENDERSON, KENTUCKY COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Fiscal Year Ended June 30, 2008 TABLE OF CONTENTS Page INTRODUCTORY SECTION Letter of Transmittal ...........................................................................................1 GFOA Certificate of Achievement .....................................................................9 Organizational Chart ...........................................................................................10 List of Elected and Appointed Officials .............................................................11 FINANCIAL SECTION Independent Auditors’ Report .............................................................................12 Management’s Discussion and Analysis ............................................................14 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Assets ................................................................................25 Statement of Activities .................................................................................26 Fund Financial Statements: Balance Sheet – Governmental Funds ..........................................................27 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets ....................................................................28 Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds ...............................................................29 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities .....................................................................30 Statement of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual – General Fund .........................................31 Statement of Net Assets – Proprietary Funds ...............................................32 Statement of Revenues, Expenses, and Changes in Fund Net Assets – Proprietary Funds ........................................................................33 Statement of Cash Flows – Proprietary Funds ..............................................34 Statement of Fiduciary Net Assets – Fiduciary Funds..................................35 Statement of Changes in Fiduciary Net Assets – Fiduciary Funds ...............36 Notes to the Financial Statements ....................................................................37 Required Supplementary Information: Schedules of Funding Progress ........................................................................75 Schedules of Employer Contributions .............................................................76 Nonmajor Governmental Funds: Nonmajor Governmental Funds – Fund Descriptions .....................................77 Combining Balance Sheet – Nonmajor Governmental Funds .........................78 Combining Balance Sheet – Special Revenue Funds ......................................79 Combining Balance Sheet – Permanent Funds ................................................80 Continued Page Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Nonmajor Governmental Funds ....................................81 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Special Revenue Funds .................................................82 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Permanent Funds ...........................................................83 Schedules of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual – Special Revenue Funds: Cemetery Fund .........................................................................................84 Public Way Improvement Fund ...............................................................85 Canoe Creek Fund....................................................................................86 Henderson Area Rapid Transit Fund .......................................................87 Emergency Communications Fund ..........................................................88 Community Development Block Grant Fund ..........................................89 HOME Fund.............................................................................................90 Police Investigation Fund ........................................................................91 Justice Assistance Grant Fund .................................................................92 STATISTICAL SECTION Statistical Section Contents.................................................................................93 General Information ............................................................................................94 Net Assets by Component ...................................................................................97 Changes in Net Assets ........................................................................................98 Fund Balances of Governmental Funds ..............................................................101 Changes in Fund Balances of Governmental Funds ...........................................102 General Governmental Tax Revenue by Source .................................................103 Assessed Value and Actual Value of Taxable Property .....................................104 Detail of Assessed Value and Estimated Actual Value of Taxable Property .....105 Property Tax Rates - Direct and Overlapping Governments ..............................106 Ad Valorem Tax Rates – Direct and Overlapping Governments .......................107 Top Ten Taxpayers .............................................................................................108 Natural Gas Volume by Customer Type .............................................................109 Natural Gas Sold by Customer Type ..................................................................110 Natural Gas Rates – Residential Customers .......................................................111 Direct and Overlapping Governmental Activities Debt ......................................112 Pledged-Revenue Coverage – Water & Sewer and Electric Commissions ........113 Ratios of Outstanding Debt by Type ..................................................................114 Ratios of General Bonded Debt Outstanding and Legal Debt Margin ...............115 Demographic Statistics .......................................................................................116 Principal Employers ............................................................................................117 Full-time Equivalent City Government Employees by Function / Program .......118 Capital Asset Statistics by Function / Program...................................................119 Operating Indicators by Function / Program ......................................................120 INTRODUCTORY SECTION Thomas E. Davis, Mayor Commissioners: William M. Farmer Paul D. Kuerzi Robert M. Mills The City of Henderson James A. White, Jr. P.O. Box 716 Henderson, Kentucky 42419-0716 Russell R. Sights, City Manager William L. Newman, Jr., Assistant City Manager Joseph E. Ternes, Jr., City Attorney Carolyn Williams, City Clerk November 25, 2008 Honorable Mayor, City Commissioners, and Citizens of the City of Henderson, Kentucky We present to you the Comprehensive Annual Financial Report of the City of Henderson for the fiscal year ended June 30, 2008. Responsibility for both the accuracy of the presented data and the completeness and fairness of the presentation, including all disclosures, rests with the management of the City of Henderson. To the best of our knowledge and belief, the enclosed report is accurate in all material respects and is reported in a manner designed to present fairly the financial position and results of operations of the City. All disclosures necessary to enable the reader to gain an understanding of the City’s financial activities have been included. FORMAT The Comprehensive Annual Financial Report is presented in three sections: Introductory, Financial, and Statistical. The Introductory Section includes this transmittal letter, the City’s organizational chart, and a list of principal officials. The Financial Section includes the independent auditors’ report, management’s discussion and analysis, basic financial statements, and required supplementary information. The Statistical Section includes selected unaudited financial and demographic information, which is generally presented on a multiyear basis. LEGAL REQUIREMENTS This report has been prepared pursuant to, and in compliance with, the statutes of the Commonwealth of Kentucky, which require an annual audit of books of account, financial records, and transactions of the City. In addition to meeting the requirements set forth by state statute, the audit is intended to meet the requirements of the federal Single Audit Act 1 and related OMB Circular A-133. The independent auditors’ report on the basic financial statements is included in the financial section of this report. The independent auditors’ report related specifically to the Single Audit Act is published separately. Those wishing to