city of kansas city, mo. popular annual financial …
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C I T Y O F K A N S A S C I T Y , M O.
POPULAR ANNUAL FINANCIAL REPORTF O R T H E F I S C A L Y E A R E N D E D
PurPose of rePort
AwArds
1
2
T A B L E O F
CoNteNts
City CouNCil distriCts ANd rePreseNtAtives 3
Budget ProCess 7
fiNANCiAl highlights
glossAry
8
17
Net Position 9revenues 10expenses 11
Capital Assets 12long-term obligations 13
City’s Credit 14investments 15
ratios/trends 16
CommuNity Profile ANd demogrAPhiCs 4
City Hall Erected 1936
New Helzberg Penguin Plaza exhibit at the Kansas City Zoo opened in October 2013.
The Popular Annual Financial Report (PAFR) is an unaudited sum-
mary report of the financial activities of the City and is prepared
primarily from detailed information contained in the City’s 2013
Comprehensive Annual Financial Report (CAFR), with selected in-
formation from CAFRs prepared for earlier years.
The CAFR is prepared in accordance with generally accepted ac-
counting principles (GAAP) and includes audited financial state-
ments. As such, it provides much more detail as well as full dis-
closure of all material events, both financial and non-financial.
The GAAP presentation also includes the City’s component units
(related organizations) and information on individual funds.
The information in the CAFR by its nature can be technical and
complex and as such not as useful to citizens wishing to gain an
overview of the City’s finances. The PAFR has been prepared to
simplify the information in the CAFR and better inform the public
about the overall financial condition of the City, without the heavy
use of technical accounting terms or excessive detail. The PAFR is
not intended to provide a complete financial picture of the City in
accordance with GAAP.
Questions or feedback concerning any of the information pro-
vided in this report or requests for additional financial informa-
tion may be directed to the City Controller’s Office via mail to
414 East 12th Street, Suite 302, Kansas City, Missouri 64106, via
email to [email protected] or via telephone at 816-513-1187.
PurPose of rePort
Copies of both the PAFR and CAFR are available online at:
http://www.kcmo.org/CKCMO/Depts/Finance/index.htm
under the City Finances, Financial Reports Section.
1
FY2013-14 CITY COUNCIL
The Government Finance Officers Association of the United States
and Canada (GFOA) has given an award for Outstanding Achieve-
ment in Popular Annual Financial Reporting to the City of Kansas
City, Missouri for its Popular Annual Financial Report for the fiscal
year ended April 30, 2012. The Award for Outstanding Achieve-
ment in Popular Annual Financial Reporting is a prestigious na-
tional award recognizing conformance with the highest standards
for preparation of state and local government popular reports.
In order to receive an Award for Outstanding Achievement in Pop-
ular Annual Financial Reporting, a government unit must publish a
Popular Annual Financial Report, whose contents conform to pro-
gram standards of creativity, presentation, understandability and
reader appeal.
An Award for Outstanding Achievement in Popular Annual Finan-
cial Reporting is valid for a period of one year only. The City of
Kansas City, Missouri published its second Popular Annual Finan-
cial Report for the fiscal year ended April 30, 2012 for which it
received a Popular Award. We believe our current report contin-
ues to conform to the Popular Annual Financial Reporting require-
ments, and we are submitting it to GFOA.
The City of Kansas City, Missouri was awarded the Certificate of
Achievement for Excellence in Financial Reporting by the Govern-
ment Finance Officers Association of the United States and Canada
for its comprehensive annual financial report for year ended April
30, 2012. This was the 24th consecutive year that the City has
achieved this award. The Certificate of Achievement is the highest
form of recognition for excellence in state and local government
financial reporting.
In order to be awarded a Certificate of Achievement, a govern-
ment unit must publish an easily readable and efficiently organized
comprehensive annual financial report, whose contents conform
to program standards. The report must satisfy both generally ac-
cepted accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only.
We believe our comprehensive annual financial report continues to
conform to the Certificate of Achievement program requirements,
and we are submitting our comprehensive annual financial report
for the current year to the GFOA.
AwArds
2
1 2 3
4 5 6 At LargeAt LargeAt Large
At Large At Large At Large
Scott Wagner Ed Ford Melba Curls
Jim Glover Cindy Circo Scott Taylor
Russ Johnson Jermaine Reed
Jan Marcason Michael Brooks John A. Sharp
Dick Davis
Sly JamesMayor
Troy SchulteCity Manager
City CouNCil distriCts ANd rePreseNtAtives
visioNThe mayor, council and staff, together with com-munity partners; strive to achieve a common vision to make Kansas City best.
We employ innovative strategies to:
effectively and efficiently provide customer-fo-cused services; improve public safety; and devel-op sustainable, healthy communities where all prosper.
We lead by inspiring, col-laborating, measuring progress and celebrating success.
1 2
3 4
5
6
3
Lakeside Nature Center at Swope Park
Kauffman Center for the Performing Arts
Kansas City started as a trading post in 1821 and was incorporated
in June 1850. The original charter establishing the Council/Man-
ager (“home-rule”) form of government was adopted in 1925 and
revised in 2006. Under this charter, a mayor and twelve council
members represent six council districts. The Mayor recommends
and the City Council approves the selection of the City Manager
who acts as the City’s chief administrative officer.
Kansas City, commonly referred to as the “City of Fountains - Heart
of the Nation”, is located within 250 miles of the geographic center
of the nation. The City covers parts of four counties, 319 square
miles and is the 14th largest land area in the country. Kansas City
ranks as the 37th largest city in the United States by population.
In 2006, Kansas City was named one of ten All American Cities.
Kansas City boasts more fountains than any city except Rome and
more boulevards than any city except Paris giving way to the “City
of Fountains” and “Paris of the Plains” nicknames. Also, the 1,769
acre Swope Park is one of the largest urban parks in America.
Kansas City has a diversified economy including transportation,
telecommunications, manufacturing, health care, legal services,
trade, financial services, and governmental services. The region
provides access to over one million jobs in over seven hundred
occupations. According to a study released by the Brookings In-
stitution, Kansas City ranks seventeenth among domestic metro
areas in terms of its green jobs count. Forbes ranked Kansas City
CommuNity Profile ANd demogrAPhiCs
Kansas City is a full service city providing a wide range
of municipal services including neighborhood develop-
ment services; convention and entertainment facilities; fire
and police protection; emergency medical services; public
health services; refuse collection; administration of zoning
and subdivision regulations; housing services; management
of international and municipal airports; planning and main-
tenance of the City’s parks, golf courses community cen-
ters, and swimming pools; construction and maintenance of
streets, roads, bridges, street lighting, and traffic systems;
tree planting; water and sewage treatment; and a zoo.
JC Nichols fountain in the Kansas City Country Club Plaza
4
the seventh best city for manufacturing jobs. Forbes also named
Kansas City third on its list of “10 Best Cities to Buy a Home,” which
followed up a prior survey naming the City as the thirteenth most
affordable city in the United States for its low cost of living and
housing affordability.
According to the Kansas City Area Development Council, the City
is the corporate or regional headquarters for 65 companies. The
metropolitan area is the home of three Fortune 500 companies,
three of Forbes’ largest private companies, along with several other
Fortune 500 companies having a significant presence in the area.
The Kansas City region is also home to BATS Trading, the third most
active equity stock exchange in the United States. Kansas City is
one of ten regional office cities for the United States government.
The federal government is the City’s largest principal employer.
The unemployment rate for the City, as reported by the Bureau of
Labor Statistics, at April 30, 2013 was 6.8 percent, not season-
ally adjusted, which was the same rate as one year ago and 24.0
percent lower than two years ago. The state and national average
unemployment rate as of April 30, 2013 was 6.3 percent.
For sports fans, Kansas City offers four professional teams: the
Kansas City Chiefs (football), the Kansas City Royals (baseball),
Sporting KC (soccer) and the Kansas City Explorers (tennis).
The City also saw acclaim by making Frommer’s list of “Top Des-
tinations 2012” as well as Kansas City’s downtown being voted as
one of “America’s Best Downtowns” by Forbes. As the only destina-
tion in the United States to be featured in Frommer’s top ten list,
Kansas City was recognized for a growing number of hot spot at-
tractions such as the Kauffman Center for the Performing Arts, the
National World War I Museum, the Nelson-Atkins Museum of Art,
the American Jazz Museum, the Negro Leagues Baseball Museum
and the College Basketball Experience.
Nelson-Atkins Museum of Art
Arrowhead Stadium
World War I Museum at Liberty Memorial
The City implemented a comprehensive revenue policy
which serves as the official guidance to be used by the City
Council and city management in budgeting and financial
planning efforts
5
Since 2004, population has risen 3.4 percent. As of the fiscal year ended April 30, 2013, the City has an estimated population of 464,310 people.
Per capita personal income in Kansas City has risen 17.7 percent in the last ten years.
Although the City’s unemployment rate had risen to 10.3 percent in 2010, as of the fiscal year ended April 30, 2013, the rate had dropped to 6.8 percent.Note: Rate is not seasonally adjusted.
Over the past ten years, the estimated actual value of taxable property in the City has increased 25.7 percent, resulting in a total taxable assessed value for 2013 of $6,781,544,829.
kANsAs City PoPulAtioN
Per CAPitA PersoNAl iNCome
uNemPloymeNt rAte
Assessed vAluAtioN
7.7
7.1
6.4 6.4
7.4
10.0
10.3 9.2
7.2
6.8
-
2.0
4.0
6.0
8.0
10.0
12.0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
5,532 5,813 6,336 6,490
7,091 7,179 6,880
6,877 6,815 6,782
440.0
445.0
450.0
455.0
460.0
465.0
470.0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
448.8 450.7
452.5 454.3
456.1 458.0
459.8
463.2 465.7
464.3
15,000 20,000 25,000 30,000
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
22,405
24,567
24,180
24,299
27,298
25,189
24,756
25,078
25,423
26,372
Dollars ($)
In th
ousa
nds
perc
ent
In m
illio
ns
6
Budget ProCessThe City’s fiscal year is from May 1st to April 30th. The City Charter requires that the City Council adopt an annual budget at the
fourth regular council meeting in March for the fiscal year commencing on May 1st. The following provides a graphical timeline
of the process and the requirements for preparing, submitting and adopting the budget as mandated by the City Charter.
November 15th - Departmental Budget Submittals
January 15th - City Manager's Submitted Budget to Mayor
2nd Regular February Council Meeting - Mayor's
Recommendations and Transmittal of City Manager's Budget to the
City Council
Mid-Feb to Early March - Public Hearings for citizen's comments
1st Regular March Council Meeting - Introduction of the
Budget Ordinance
March - Review of Budget Ordinance and Public Hearings
with City Manager and department officers
4th Regular March Council Meeting - Adoption of Budget
Ordinance with or without alteration or amendment
7
fiNANCiAl highlightsThe information provided is summarized and represents only selected funds and therefore is not in accordance with generally
accepted accounting principles (GAAP) and is not intended to represent all of the City’s component units (CU’s) and fiduciary
funds. The following table is a summary of select financial data for the past three fiscal years.
Governmental Activities: general government, public safe-
ty (police, fire and municipal court), public works, neighbor-
hood development, health, culture and recreation, conven-
tion facilities, and economic development
Business-type Activities: water system, sanitary
sewer and stormwater systems, and aviation
Financial Summary(in thousands) 2012-13 2011-12 2010-11
Net PositionAssets plus Deferred Outflows 7,675,929$ 7,604,277$ 7,250,367$ Liabilities plus Deferred Inflows 2,967,163 2,944,342 2,700,407 Total Net Position 4,708,766 4,659,935 4,549,960
RevenuesGovernmental Activities 992,037$ 990,574$ 1,023,852$ Business-type Activities 440,800 419,051 397,418 Total Revenues 1,432,837 1,409,625 1,421,270
ExpensesGovernmental Activities 1,030,994$ 962,630$ 939,287$ Business-type Activities 353,012 337,020 323,947 Total Expenses 1,384,006 1,299,650 1,263,234
Capital AssetsGovernmental Activities 4,144,737$ 4,166,574$ 4,020,877$ Business-type Activities 2,209,225 2,134,166 2,080,290 Total Capital Assets 6,353,962 6,300,740 6,101,167
Long-Term ObligationsGovernmental Activities 1,717,534$ 1,787,187$ 1,651,522$ Business-type Activities 1,002,750 918,287 822,587 Total Long-Term Obligations 2,720,284 2,705,474 2,474,109
8
The Balance Sheet, known as the Statement of Net Position
in governmental financial statements, presents information
concerning the City’s assets and liabilities with the difference
between the two reported as net position. Increases and de-
creases in net position serves as an indicator of the City’s
financial position and of the results of the City’s operations.
The assets of the City exceeded its liabilities at the close of
fiscal year 2013 by $4.709 billion. Of this amount, $73.4
million is considered unrestricted. At the end of the prior
fiscal year, assets exceeded liabilities by $4.660 billion in-
dicating that the government improved its financial position
during the year. The largest portion of the City’s net assets,
$4.472 billion or 94.96%, consists of its investment in capi-
tal assets (land, buildings, land improvements, monuments
and fountains, machinery and equipment, and infrastruc-
ture) less any related debt used to acquire those assets that
is still outstanding. The City uses these capital assets to pro-
vide services to citizens; consequently, these assets are not
available for future spending. Therefore, even though the
City’s investment in capital assets is reported net of related
debt, the resources needed to repay debt cannot come from
the capital assets themselves and must be provided from
other sources.
An additional portion of the City’s net position, $163.9 mil-
lion or 3.48%, represents resources that are subject to exter-
nal restrictions as to how they may be used. The remaining
balance of unrestricted net position, or $73.4 million, may
be used to meet the government’s ongoing obligations to
citizens and creditors. It is important to note, however, that
the total unrestricted net position of the City’s business-type
activities, or $243.6 million, may not be used to fund gov-
ernmental activities. Total net position of the City increased
by $48.8 million or 1.05%, due to the continued investment
in capital assets and increases to the unrestricted net po-
sition by the business type activities. A 12.0% increase in
water rates, a 17.0% increase in sewer rates and a 2.6%
increase in parking revenue at the KCI airport contributed
to the $46.1 million increase in the unrestricted net position
of the business-type activities.
Net PositioN
Statement of Net Position(in thousands)
2012-13 2011-12 2012-13 2011-12 2012-13 2011-12
Current and Other Assets 604,154$ 693,511$ 690,924$ 583,479$ 1,295,078$ 1,276,990$
Capital Assets 4,144,737 4,166,574 2,209,225 2,134,166 6,353,962 6,300,740
Total Assets 4,748,891 4,860,085 2,900,149 2,717,645 7,649,040 7,577,730
Deferred Outflows 26,889 26,547 - - 26,889 26,547
Long-term Liabilities Outstanding 1,717,534 1,787,187 1,002,750 918,287 2,720,284 2,705,474
Other Liabilities 204,411 206,653 42,468 32,215 246,879 238,868
Total Liabilities 1,921,945 1,993,840 1,045,218 950,502 2,967,163 2,944,342
Deferred Inflows - - - - - -
Net Position: 2,853,835$ 2,892,792$ 1,854,931$ 1,767,143$ 4,708,766$ 4,659,935$
Investment in Capital Assets, net of Related Debt 2,973,971$ 2,860,901$ 1,497,584$ 1,455,098$ 4,471,555$ 4,315,999$
Restricted 50,090 56,360 113,766 114,600 163,856 170,960
Unrestricted (170,226) (24,469) 243,581 197,445 73,355 172,976
Total Net Position 2,853,835$ 2,892,792$ 1,854,931$ 1,767,143$ 4,708,766$ 4,659,935$
Governmental Activities Business-type Activities Total
9
reveNues- Charges for services declined from the prior year
by $14.7M partly due to a $3.7M decline in vehicle
license fees resulting from the elimination of the fee
and a $4.5M decline in traffic fines
- Operating contributions increased by $14.7M partly
due to a $14.1M contribution toward an IDA bond
issue refunding
- Capital grants declined by $23.0M partly due to
receiving a one-time $20.0M grant in FY12 for the
Chouteau Parkway project
- Earnings tax increased by $14.5M indicating an im-
provement in the local economy and jobs market
- Charges for services increased by $42.1M, partly due to 12% and 17% increases in water and sewer rates respectively and a 2.6% increase in parking rev-enue at the airport- Capital grants and contributions declined by $17.6M partly due to $7.0M decrease in FAA grants for Aviation and a $9.8M decrease in contributions from property developers for Sewer
where does the moNey Come from?
28%
13%
1%
12%20%
16%
4% 6% 0%
Revenues-Governmental ActivitiesFor Fiscal Year Ended April 30, 2013
Charges forServicesOperating Grantsand ContributionsCapital Grantsand ContributionsProperty Taxes
Earnings andProfits TaxesSales Taxes
95%
4% 1%
Revenues-Business-type ActivitiesFor Fiscal Year Ended April 30, 2013
Charges forServices
Grants andContributions
InvestmentEarnings
Total Revenues - Governmental Activities(in thousands)
2012-13 2011-12Program Revenues
Charges for Services 275,062$ 289,733$ Operating Grants and Contributions 129,564 114,875 Capital Grants and Contributions 13,731 36,739
General RevenuesEarnings and Profits Taxes 198,146 183,662 Sales Taxes 154,527 150,941 Property Taxes 122,395 121,189 Hotel and Restaurant Taxes 37,689 36,244 Other Taxes 56,749 51,422 Investment Earnings 4,174 5,769
Total Revenues 992,037$ 990,574$
Total Revenues - Business-type Activities(in thousands)
2012-13 2011-12Program Revenues
Charges for Services 417,507$ 375,427$ Operating Grants and Contributions 628 155 Capital Grants and Contributions 18,343 35,920
General RevenuesInvestment Earnings 4,322 7,549
Total Revenues 440,800$ 419,051$
Total Revenues - Governmental Activities(in thousands)
2012-13 2011-12Program Revenues
Charges for Services 275,062$ 289,733$ Operating Grants and Contributions 129,564 114,875 Capital Grants and Contributions 13,731 36,739
General RevenuesEarnings and Profits Taxes 198,146 183,662 Sales Taxes 154,527 150,941 Property Taxes 122,395 121,189 Hotel and Restaurant Taxes 37,689 36,244 Other Taxes 56,749 51,422 Investment Earnings 4,174 5,769
Total Revenues 992,037$ 990,574$
Total Revenues - Business-type Activities(in thousands)
2012-13 2011-12Program Revenues
Charges for Services 417,507$ 375,427$ Operating Grants and Contributions 628 155 Capital Grants and Contributions 18,343 35,920
General RevenuesInvestment Earnings 4,322 7,549
Total Revenues 440,800$ 419,051$
10
exPeNseswhere does the moNey go?
- Public Safety expenses increased from the prior year by $34.0M, partly due to $17.6M of salary increases for police and fire and a $7.4M pur-chase of helicopters capitalized by the police (a component unit) instead of the City
- Public Works expenses increased from the prior year by $50.9M, partly due to the expensing of $35.1M of CIP
- Business-type Activities;
Water fund expenses increased by $6.0M, partly due to higher electrical, materials and supple-mental workforce costs
Sewer fund expenses increased by $7.4M partly due to higher administrative expenses and legal liability claims
$0
$50,000
$100,000
$150,000
$200,000
Water Sewer Aviation
Expenses-Business-type ActivitiesFor Fiscal Year Ended April 30, 2013
$0 $100,000 $200,000 $300,000 $400,000
Economic DevelopmentConvention Facilities
HealthCulture and Recreation
Interest on Long-Term DebtNeighborhood Development
General GovernmentPublic WorksPublic Safety
Expenses-Governmental ActivitiesFor Fiscal Year Ended April 30, 2013
Total Expenses - Governmental Activities(in thousands)
2012-13 2011-12Expenses
Public Safety 388,478$ 354,495$ Public Works 212,726 161,870 General Government 126,641 139,636 Interest on Long-Term Debt 79,780 78,194 Neighborhood Development 60,992 66,847 Culture and Recreation 57,783 57,211 Health 55,501 54,489 Convention Facilities 45,314 46,653 Economic Development 2,372 2,003 Unallocated Depreciation 1,407 1,232
Total Expenses 1,030,994$ 962,630$
Total Expenses - Business-type Activities(in thousands)
2012-13 2011-12Expenses
Water 102,975$ 97,010$ Sewer 99,699 92,288 Aviation 150,338 147,722
Total Expenses 353,012$ 337,020$
Total Expenses - Governmental Activities(in thousands)
2012-13 2011-12Expenses
Public Safety 388,478$ 354,495$ Public Works 212,726 161,870 General Government 126,641 139,636 Interest on Long-Term Debt 79,780 78,194 Neighborhood Development 60,992 66,847 Culture and Recreation 57,783 57,211 Health 55,501 54,489 Convention Facilities 45,314 46,653 Economic Development 2,372 2,003 Unallocated Depreciation 1,407 1,232
Total Expenses 1,030,994$ 962,630$
Total Expenses - Business-type Activities(in thousands)
2012-13 2011-12Expenses
Water 102,975$ 97,010$ Sewer 99,699 92,288 Aviation 150,338 147,722
Total Expenses 353,012$ 337,020$
11
CAPitAl AssetswhAt do we owN?
Governmental capital asset reductions equated to ($21.8) million, due to the removal of $37.2M of amounts previously recorded as construction in prog-ress. The expenses to record this removal are as fol-lows, $35.1 million in public works, $1.5 million in neighborhood development and $.6 million in culture and recreation. The capital asset reductions were off-set with asset additions for Chouteau Parkway, police headquarters, East Patrol police campus and other smaller projects.
Business-type capital asset additions equated to $75.0 million, mainly due to the following:- $34.6 million – increases to Water utility lines and improvements- $64.9 million – increases to Sewer utility lines and improvements- Offset by a ($24.5) million decrease due to deprecia-tion of Aviation assets
The City needs more than just dollars to provide its citizens with
services, and as such, many types of assets are required to keep the
City performing and delivering its various services.
The City’s acquisition of capital assets, net of depreciation, for
governmental and business-type activities as of April 30, 2013
amounted to $6.354 billion, which was an increase of 0.84% from
fiscal year 2012. Capital assets include land, buildings, improve-
ments, machinery and equipment, land improvements, monu-
ments, fountains and other works of art, street surfacing, bridges
and culverts, curbs, sidewalks, street lighting, traffic signals, sig-
nage, utility lines and runways.
Capital Assets: Assets with a cost greater than the threshold
noted below and an estimated useful life of more than one year.
Land, Equipment, Vehicles, Buildings, Infrastructure and
Monuments: $5,000
Land Improvements: $25,000
Capital Assets(in thousands)
2012-13 2011-12 2012-13 2011-12 2012-13 2011-12
Land/Permanent Right of Way 352,738$ 349,638$ 54,289$ 53,326$ 407,027$ 402,964$
Works of Art 174 174 - - 174 174
Buildings and Improvements 1,263,716 1,199,844 1,152,128 1,105,710 2,415,844 2,305,554
Monuments and Fountains 123,109 122,568 - - 123,109 122,568
Temporary Right of Way 615 612 - - 615 612
Land Improvements 250,257 215,590 - - 250,257 215,590
Machinery and Equipment 216,243 212,186 217,969 202,686 434,212 414,872
Infrastructure-Modified 2,295,548 2,172,682 - - 2,295,548 2,172,682
Infrastructure-Depreciated 199,523 173,018 1,941,274 1,821,086 2,140,797 1,994,104
Accumulated Depreciation (676,732) (601,207) (1,278,220) (1,206,816) (1,954,952) (1,808,023)
Construction in Progress 119,546 321,469 121,785 158,174 241,331 479,643
Total Capital Assets 4,144,737$ 4,166,574$ 2,209,225$ 2,134,166$ 6,353,962$ 6,300,740$
Governmental Activities Business-type Activities Total
Infrastructure-Modified Condition AssessmentDesired
Condition Level 2013 2012 2011Roadway System >= 60 64.97 68.37 78.13Bridges >= 75 75.70 76.54 76.32Street Lighting >= 90 98.30 93.90 92.68
Overall Condition Level
12
As of April 30, 2013, the City’s long-term obligations totaled
$2.720 billion, comprised of $1.718 billion for governmental
activities and $1.003 billion for business-type activities. Of this
total, $189.7 million is due within one year. The long-term obli-
gations for the City include debt, pension, other post-employment
benefit obligations, compensated absences and claims payable.
loNg-term oBligAtioNswhAt do we owe?
Total Governmental Activities Debt per Capita: $3,347Total Governmental Activities Debt as a % of Esti-mated Value of Property: 5.41%Total City Debt per Capita: $5,399Total City Debt as a % of Personal Income: 20.47%
17.9%
38.0%
44.1%
Long-Term Debt April 30, 2013
General ObligationBondsRevenue Bonds
Limited ObligationDebt
Long-Term Obligations(in thousands)
Payable atApril 30, 2013
Amounts Due Within One Year
Payable atApril 30, 2013
Amounts Due Within One Year
Payable atApril 30, 2013
Amounts Due Within One Year
General Obligation Bonds 434,835 27,320 - - 434,835 27,320 Special Assessment Debt
with Government Commitment - - - - - - Bonds - KCMAC 188,236 12,635 - - 188,236 12,635 Implied Loan-Off Market Swap 3,772 118 - - 3,772 118 Bonds - PIEA 5,605 405 - - 5,605 405 Special Obligations 544,808 37,533 - - 544,808 37,533 MTFC Loan 6,808 1,254 - - 6,808 1,254 Bonds - IDA 315,155 9,210 - - 315,155 9,210 Bonds - TIFC, LCRA 29,675 3,635 - - 29,675 3,635 Revenue Bonds - - 898,475 58,516 898,475 58,516 Notes Payable - HUD 108 3,550 355 - - 3,550 355 Notes Payable - Various 29,845 13,843 29,845 13,843 Capital Lease - - 23,907 3,611 23,907 3,611 Net Pension Obligation
Employees' Retirement System 24,901 - 12,703 - 37,604 - Firefighters' Pension System 18,699 - - - 18,699 -
Net Other Post Employment BenefitObligation 50,428 - 13,333 63,761 -
Compensated Absences 29,188 6,473 7,835 1,925 37,023 8,398 Claims Payable 40,399 9,148 13,968 3,063 54,367 12,211 Other accrued liabilities - - 2,232 683 2,232 683
1,725,904 121,929 972,453 67,798 2,698,357 189,727 Add:
Unamortized Premium 37,918 37,828 75,746 - Less:
Deferred Charge on Refunding (36,858) (5,995) (42,853) - Discount (9,430) (1,536) (10,966) -
Total Long-Term Obligations 1,717,534$ 121,929$ 1,002,750$ 67,798$ 2,720,284$ 189,727$
Governmental Activities Business-type Activities Total
Schedule of Funding ProgressActuarial Valuation Date
Pension Systems - Funded Ratio 5/1/2012 5/1/2011 5/1/2010Police Retirement System 75.54% 76.10% 78.92%Civilian Employees' Retirement System 75.59% 74.81% 76.60%Employees' Retirement System 79.11% 79.80% 75.35%Firefighters' Pension System 78.54% 81.85% 84.29%
Schedule of Funding Progress
Other Post-Employment Benefits 5/1/2012 5/1/2010Police and Civilain Employees 0.00% 0.00%Emplyee and Firefifghter 0.00% 0.00%
Actuarial Valuation Date13
External credit ratings are very important and have a direct influ-
ence on the City’s ability to:
• minimize borrowing costs – a stated objective of the City’s
Debt Policy
• successfully borrow money to complete the acquisition and
construction of long-lived capital assets.
As shown below, the City’s most recent credit ratings are in the
categories of “A” and “AA’”. According to the rankings provided
by the rating agencies, “AA” rated bonds are high credit quality
bonds and are subject to low credit risk. “A” rated bonds are also
of high credit quality, but are considered to be susceptible to ad-
verse business or economic conditions. There were no changes in
the ratings from April 30, 2012.
City’s Credithow’s our Credit?
During fiscal year 2013, $154 out of every $1,000
spent by the City on governmental operating ac-
tivities went toward debt expenditures for principal
and interest on outstanding bonds and notes.
City's Bond Credit Ratingsas of April 30, 2013
Type of Bonds Issued Moody's Rating Standard and Poor's Rating Fitch's Rating
General Obligation Bonds Aa2 AA AAKansas City, Missouri Special Obligation Bonds (Series 2012A and 2012B) A1 AA- A+Water Revenue Bonds (Senior Lien Bonds) Aa2 AA+ Not RatedSewer Revenue Bonds (Junior Lien Bonds) Aa2 AA Not RatedAirport Revenue Bonds (Senior Lien Bonds) A2 A+ AAirport Revenue Bonds (Subordinate Lien Bonds) A3 A A-Airport Passenger Facility Charge Bonds A3 A A
No change from fy 2012
9.3%
9.9%
10.5% 10.9%
14.1% 13.5% 14.9% 15.2% 15.0% 15.4%
0.0%2.0%4.0%6.0%8.0%
10.0%12.0%14.0%16.0%18.0%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Debt Service as % of net Operating ExpendituresExcludes Business-type activities
14
iNvestmeNtshow sAfe is our moNey?
Types of RiskInterest Rate Risk – the risk that the fair value of the City’s invest-
ments will decrease as a result of an increase in interest rates.
Credit Risk – the risk that the City will not recover its investments
due to the inability of the counterparty to fulfill its obligation.
Custodial Credit Risk – the risk that, in the event of the failure of
the counterparty, the City will not be able to recover the value of
its deposits, investments or collateral securities that are in the pos-
session of an outside party (i.e. the City’s safekeeping institution).
Ways The CiTy miTigaTes RiskInterest Rate Risk – to limit its exposure to fair value losses aris-
ing from rising interest rates, the City’s Investment Policy limits the
final maturity on any security owned to a maximum of five years.
Credit Risk – in order to prevent over concentration by investment
type, the City’s Investment Policy provides for diversification of its
portfolio.
Custodial Credit Risk – the City’s Investment Policy requires that
all funds on deposit with any financial institution be secured with
collateral securities in an amount equal to at least 102 percent of
the deposit less any amount insured by the FDIC. The policy also
requires that all investment securities be held in the City’s name
in the City’s safekeeping account at its safekeeping institution.
Cash and Investments(in thousands)
Deposits 44,790$ Investments 962,008 Trustee Accounts 85,030 Imprest Funds 47 Total 1,091,875$
The deposits and investments of the City are reflected inthe financial statements as follows.
(in thousands)Cash and Short-term Investments 657,986$ Restricted Cash and ST Investments 433,889 Total 1,091,875$
The fair value of the City’s investments as of
April 30, 2013 is displayed below.
Investments(in thousands)
Investment Type Fair ValuePooled Investments:
US Treasury Bills 15,995$ US Treasury Notes/Bonds 153,061 US Agency Discounts 9,996 US Agencies - Noncallable 331,671 US Agencies - Callable 147,990 Total Pooled 658,713$
Non-Pooled Investments:US Treasury Notes/Bonds 31,115$ US Agency Discounts 5,999 US Agencies - Noncallable 225,219 US Agencies - Callable 40,962 Total Non-Pooled 303,295$
Grand Total 962,008$
Investment Type Fair ValueMoody's/S&P
Ratings
US Treasury Securities 200,171$ Aaa/AA+
US Agency Securities 761,837 Aaa/AA+
Total 962,008$
The fair value of the City’s investments as of
April 30, 2013 is displayed below.
Investments(in thousands)
Investment Type Fair ValuePooled Investments:
US Treasury Bills 15,995$ US Treasury Notes/Bonds 153,061 US Agency Discounts 9,996 US Agencies - Noncallable 331,671 US Agencies - Callable 147,990 Total Pooled 658,713$
Non-Pooled Investments:US Treasury Notes/Bonds 31,115$ US Agency Discounts 5,999 US Agencies - Noncallable 225,219 US Agencies - Callable 40,962 Total Non-Pooled 303,295$
Grand Total 962,008$
Investment Type Fair ValueMoody's/S&P
Ratings
US Treasury Securities 200,171$ Aaa/AA+
US Agency Securities 761,837 Aaa/AA+
Total 962,008$
15
rAtios/treNdshow Are we doiNg?
Looking at key financial ratios and trends over
several years enables the City to have a clearer
picture of where it has been and where it is going.
In fiscal year 2012, GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, which enhances the usefulness of fund balance information by providing clearer fund bal-ance classifications, was implemented by the City. The change in classification types now presents components of fund balance as nonspendable, restricted, committed, assigned and unassigned versus reserved and unreserved.
Governmental Activities Only How are 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013we doing?
♦ Total Margin Ratio 1.10 1.06 0.96 1.02 1.06 0.98 1.00 1.09 1.03 0.96
♦ % Change in Net Assets 3.1% 2.0% -1.7% 0.9% 2.2% -0.7% 0.1% 3.0% 1.0% -1.4%
♦ Quick Ratio 3.72 5.30 4.39 4.23 3.80 1.48 1.59 2.31 2.46 1.92
♦ Net Assets Ratio 0.46 0.34 0.21 0.20 0.24 0.04 0.02 -0.01 -0.01 -0.09
♦ Debt to Assets Ratio 0.17 0.29 0.30 0.33 0.33 0.32 0.33 0.33 0.34 0.33
♦ Capital Assets Condition Ratio 0.62 0.61 0.64 0.64 0.75 0.74 0.72 0.70 0.69 0.67
♦ Total Margin Ratio focuses on whether the government lived within its financial means during the fiscal year. A ratio of 1.0 or higher is desired.
♦ % Change in Net Assets focuses on the extent to which the financial position improved or deteriorated. A positive percentage change is desired.
♦ Quick Ratio focuses on the ability to meet short-term obligations and is a measure of the government's liquidity. A ratio of 1.0 or higher is desired. Note: ratio includes receivables.
♦ Net Assets Ratio focuses on the ability to meet long-term obligations and is a measure of the government's solvency. A high ratio is desired.
♦ Debt to Assets Ratio focuses on the extent to which total assets are financed with long-term debt and is a measure of the government's leverage. A lower ratio is desired as a high ratio implies an over reliance on debt for financing assets.
♦ Capital Assets Condition Ratio focuses on the condition of capital assets in relation to the remaining useful life. A high ratio is desired as it implies the government is investing in capital assets.
Notes: The data used to calculate the ratios above is taken from each fiscal year's CAFR and as such does not reflect any restatements that may have occurred in subsequent years.
The data for FY 2009 includes a change in the methodology for calculating demand bonds due within one year and
investment in capital assets, net of related debt. The change significantly impacted the quick ratio and net assets
ratio respectively.
Overall Summary: The ratios for the past five years are relatively flat. The near term financial position, asindicated by the quick ratio remains strong. However, the last three ratios that look at the long term financialposition continue to show a slight downward trend.
Overall Summary: After the economic downturn in 2008, the local government of the City of Kansas City, Missourihas been improving its overall condition and is living within its financial means, increasing its net assets, improvingits liquidity and will be able to pay its obligations when due.
Fund Balance 2012-13 2011-12Nonspendable -$ -$ Restricted 800 800 Committed 41,150 38,385 Assigned 7,386 5,499 Unassigned - -
Total Fund Balance 49,336$ 44,684$
General Fund
16
glossAryCapital grants – grants consisting of capital assets or re-
sources that are restricted for capital purposes, such as to
purchase, construct, or renovate capital assets associated
with a specific program. Differing from operating grants,
these revenues are not available to finance regular opera-
tions. [SGAS 34]
Charges for services – includes revenues based on ex-
change or exchange-like transactions. These revenues arise
from charges to customers or applicants who purchase, use,
or directly benefit from the goods, services, or privileges
provided. [SGAS 34]
CIP – construction in progress is a special major asset class
for capital assets that are still in the process of construction
or development. [GAAFR]
Compensated absences – absences for which employees
will be paid, such as vacation and sick leave.
CU - component unit is a legally separate organization for
which the elected officials of the City are financially account-
able. [SGAS 14]
Debt per capita – a calculation of the amount of bonds,
notes and capital leases (net of unamortized premium, dis-
count and deferred charge) outstanding divided by the esti-
mated population of KCMO.
Deferred inflows of resources - an acquisition of net assets
by the government that is applicable to a future reporting
period and have a negative effect on net position, similar to
liabilities. [GASB Concept Statement 4]
Deferred outflows of resources - a consumption of net as-
sets by the government that is applicable to a future report-
ing period and have a positive effect on net position, similar
to assets. [GASB Concept Statement 4]
Fiduciary fund – a fund used to report assets held in a trust-
ee or agency capacity for others and therefore cannot be
used to support the City’s own programs. [SGAS 34]
Fund balance – net position of a governmental fund or the
difference between assets, liabilities, deferred outflow of
resources and deferred inflow of resources, categorized as
follows:
• Nonspendable – amounts that cannot be spent be-
cause they are either (a) not in spendable form or
(b) legally or contractually required to be maintained
intact. Items not expected to be converted into cash,
for example, inventories and prepaid amounts.
• Restricted – amounts that have constraints placed on
the use of resources by either: (a) externally imposed
by creditors (such as through debt covenants), grant-
ors, contributors, or laws or regulations of other gov-
ernments or (b) imposed by law through constitutional
provisions or enabling legislation.
• Committed – amounts that can only be used for spe-
cific purposes pursuant to constraints imposed by for-
mal action of the government‘s highest level of de-
cision-making authority and remains legally binding
unless removed in the same manner.
• Assigned – amounts that are constrained by the gov-
ernment‘s intent to be used for specific purposes, but
are neither restricted nor committed.
• Unassigned - the residual classification for the gen-
eral fund. This classification represents fund balance
that has not been assigned to other funds and that
has not been restricted, committed, or assigned to
specific purposes within the general fund. The general
fund should be the only fund that reports a positive
unassigned fund balance amount. [SGAS 54]
Funded ratio – the ratio of a pension plan’s assets to its li-
abilities.
GAAFR – Governmental Accounting, Auditing, and Finan-
cial Reporting is the comprehensive guidance published by
the GFOA
GASB – Governmental Accounting Standards Board is the
independent organization that establishes and improves
17
standards of accounting and financial reporting for U.S.
state and local governments. Established in 1984 by agree-
ment of the Financial Accounting Foundation (FAF) and 10
national associations of state and local government offi-
cials, the GASB is recognized by governments, the account-
ing industry, and the capital markets as the official source
of generally accepted accounting principles (GAAP) for state
and local governments.
General fund – the chief operating fund of the government
and the fund that accounts for and reports all financial re-
sources not accounted for and reported in another fund.
General obligation debt – a form of government debt that
is backed by the full faith and credit of the government.
General revenues – all revenues are general revenues un-
less they are required to be reported as program revenues.
All taxes, even those that are levied for a specific purpose,
are general revenues and should be reported by type of
tax—for example, sales tax, property tax, franchise tax, in-
come tax. [SGAS 34]
GFOA – Government Finance Officers Association, whose
mission is to enhance and promote the professional man-
agement of governments for the public benefit by identify-
ing and developing financial policies and best practices and
promoting their use through education, training, facilitation
of member networking, and leadership.
Operating expenditures – all expenditures other than ex-
penditures for capital improvements. These may include
expenditures for salaries and benefits, contractual services,
commodities and debt service.
Operating grants – revenues arising from mandatory and
voluntary non-exchange transactions with other govern-
ments, organizations, or individuals that are restricted for
use in a particular program and may be used for operating
or capital purposes. [SGAS 34]
Other post-employment benefit obligations – the obliga-
tion arising from all types of benefits, other than pensions,
provided to retired employees, their beneficiaries and cov-
ered dependents, such as a subsidy for healthcare benefits.
Per capita personal income – An estimate of an individu-
al’s income from all sources for all individuals residing in
KCMO, calculated from data provided by the US Census
Bureau.
Program revenues – derived directly from a program it-
self or from parties outside the reporting government’s tax-
payers or citizenry; as a whole, they reduce the net cost of
the function to be financed from the government’s general
revenues. Three categories of program revenues are: (a)
charges for services, (b) program-specific operating grants
and contributions, and (c) program-specific capital grants
and contributions. [SGAS 34]
SGAS – Statements of Governmental Accounting Standards
are issued by the GASB.
Unallocated depreciation – depreciation not properly re-
ported as a direct expense of a function or program. For
example, depreciation expense for capital assets such as a
city hall building that essentially serves all functions of the
government. [SGAS 34]
18
