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POPULAR ANNUAL FINANCIAL REPORTAPRIL 30, 2015

FOR THE FISCAL YEAR ENDED

CITY OF KANSAS CITY, MO.

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

1

City Hall Erected 1936

International Red Panda day was celebrated Nov. 8 at the KC Zoo

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 2015

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 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 ac-

cordance with GAAP.

Questions or feedback concerning any of the information provid-

ed in this report or requests for additional financial information

may be directed to the City Controller’s Office via U.S. mail to

414 East 12th Street, Suite 302, Kansas City, Missouri 64106, via

email to [email protected] or via telephone at 816-513-1173.

PURPOSE OF REPORT

Copies of both the PAFR and CAFR are available online at:

KCMO.GOV/FINANCE/ABOUT-FINANCE/

2

Effective May 1, 2014, the City adopted

GASB Statement No. 67 - Financial Reporting

for Pension Plans—an amendment of GASB

Statement No. 25

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, 2014. 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 fourth Popular Annual Financial

Report for the fiscal year ended April 30, 2014 for which it received

an award. We believe our current report continues to conform to

the Popular Annual Financial Reporting requirements, 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, 2014. This was the 26th 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

3

FY2013-14 CITY COUNCIL

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 Cokethea Hill John A. Sharp

Dick Davis

Sly JamesMayor

Troy SchulteCity Manager

CITY COUNCIL DISTRICTS AND REPRESENTATIVES

VISIONOur local government will be

nationally known for its trans-

formative efforts that make

Kansas City the diverse com-

munity of choice for people

to live, work, and play as a

result of its business, educa-

tional, and cultural oppor-

tunities; sustainable, vibrant

neighborhoods; connected-

ness; safety; and vitality.

1 2

3 4

5

6

4

Shoal Creek Golf Course, located in the ‘northland’ – the metro’s premier public course

Firefighters’ Memorial Fountain

The City of Kansas City, Missouri was incorporated in June, 1850

and has the largest municipal government in the state of Mis-

souri. Under a home-rule charter adopted in 1925 and revised

in 2006 and 2014, a mayor and 12 council members, who may

serve two consecutive four-year terms, represent six council dis-

tricts. The mayor and six council members are elected at-large,

and voters elect the remaining six council members within their

council districts. The Mayor recommends and the City Council

approves the selection of the City Manager, who is the chief ad-

ministrative officer.

Kansas City, known as the “City of Fountains-Heart of the Nation,”

is centrally located within 250 miles of the geographic center of

the nation. The maximum distance from Kansas City to anywhere

in the continental United States is approximately 1,900 miles. The

City includes land area in Cass, Clay, Jackson, and Platte Coun-

ties and covers 319 square miles, the 11th largest land area in the

country. Much of the City north of the Missouri River, known as the

northland, remains undeveloped.

COMMUNITY PROFILE AND DEMOGRAPHICS

Kansas City is a full-service city providing a wide range of

municipal services including: financial services; administra-

tion of zoning and subdivision regulations; community de-

velopment and neighborhood services; convention and en-

tertainment facilities; fire and police protection; emergency

medical services; public health services; refuse collection;

housing; management of international and municipal air-

ports; planning and maintenance of the City’s parks, golf

courses, community centers, and swimming pools; con-

struction and maintenance of streets, roads, bridges, street

lighting, and traffic systems; tree planting; and water and

sewage treatment.

5

Kansas City, Missouri is situated at the junction of the Missouri and

Kansas rivers and sits opposite Kansas City, Kansas. It is the largest

city in the Kansas City Metropolitan Area; the most populous city in

Missouri, the seventh largest city in the Midwest, and the 39th most

populous city in the United States. Kansas City’s location makes it

a national transportation hub. The most geo-central market in the

nation, metro Kansas City is served by three interstate highways.

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. The top three employers by industry within Kansas

City are Services at 48%, Wholesale and Retail Trade at 14%, and

Manufacturing at 10%. Travel + Leisure in October 7, 2014 ranked

Kansas City number 3 as top America’s Favorite Cities. Kansas City

ranked number 1 within the categories of Affordability, Flea Mar-

kets, Barbecue, and Good Drivers.

Per the Bureau of Labor Statistics, the unemployment rate, not

seasonally adjusted data for Kansas City calculated using a sev-

en-month average from January 2015 through July 2015, was

6.46%, which is 0.63 percentage points higher than the same av-

erage rate one year ago. This compares to the state and national

unemployment rates of 5.91% and 5.57%, respectively.

According to a study released by the Brookings Institution, Kansas

City ranks seventeenth among domestic metro areas in terms of

its green jobs count. The Wall Street Journal labeled Kansas City

as one of the “Hot Places for Start-Ups.” Forbes identified Kan-

sas City as one of the “Top 15 Cities for Female Entrepreneurs”

and ranked Kansas City as the seventh best city for manufactur-

ing jobs. Forbes also named Kansas City third on its list of the

“10 Best Cities to Buy a Home,” which followed up a prior sur-

vey naming the City as the thirteenth most affordable city in the

United States for its low cost of living and housing affordability.

City Market near downtown KC

The World Series of Barbeque at Arrowhead

Sporting Park

For sports fans, Kansas City offers three professional teams:

the Kansas City Chiefs (football), the Kansas City Royals

(baseball) and Sporting KC (soccer).

6

Since 2006, population has risen 4.5 percent. As of the fiscal year ended April 30, 2015, the City has an estimated population of 472,770.

Per capita personal income in Kansas City has risen 9.4 percent in the last ten years

Although the City’s unemployment rate had risen to 10.0 percent in 2010, as of April 30, 2015, the rate had dropped to 6.5 percent

KANSAS CITY POPULATION

PER CAPITA PERSONAL INCOME

UNEMPLOYMENT RATE

$24,180

$24,299

$27,298

$25,189

$24,756

$26,091

$26,066

$26,239

$26,415

$26,459

$15,000 $20,000 $25,000 $30,000

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Dollars ($)

-

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

6.4

6.5

7.7

9.8 10.0 8.9

7.3 7.36.7 6.5

452.5 454.3

456.1 458.0

459.8 462.0

464.3 467.0

468.9

472.8

440.0

445.0

450.0

455.0

IN T

HO

USA

ND

S

460.0

465.0

470.0

475.0

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

In fiscal year 2015, the top ten employers in the KC metropolitan statistical area (MSA) employed 13.12% of the total workforce.

TOP TEN PRINCIPAL EMPLOYERSEmployer Employees % of total

Public School System 30,172 2.92%

Federal Government 30,000 2.91%

State/County/City Government 24,616 2.39%

Cerner Corp. 10,128 0.98%

HCA Midwest Health System 9,753 0.94%

Saint Luke’s Health System 7,550 0.73%

Children’s Mercy Hospitals and Clinics 6,305 0.61%

Sprint Corp. 6,300 0.61%

The University of Kansas Hospital 6,030 0.58%

Hallmark Cards, Inc. 4,600 0.45%

Total employment MSA 1,032,100 13.12%

7

BUDGET PROCESSThe City’s fiscal year is from May 1st to April 30th. The City Charter requires that the City Council adopt a five year citywide

business plan and financial strategic plan by November 1 of each year. The five year business and financial plan contains the

strategic priorities and critical issues that serve as the foundation for the preparation of the submitted budget which must be

adopted by the city council at the fourth regular council meeting in March, for the fiscal year commencing on May 1st. The fol-

lowing provides a graphical sequence of the financial planning budget cycle.

Council Goals

DepartmentStrategic

Objectives

TrendsAnalysis

AdoptedBudget

SubmittedCitywide Plan

SubmittedBudget

AdoptedCitywide Plan

PUBLIC PROCESS

8

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. A glossary of accounting terms and acronyms used in this report may be found on pages 17 and 18. The following

table is a summary of select financial data for the past three fiscal years.

Governmental Activities: general government, pub-

lic safety (police, fire and municipal court), public works,

neighborhood development, health, culture and recre-

ation, convention facilities, and economic development

Business-type Activities: water system, sanitary

sewer and stormwater systems, and aviation

Financial Summary(in thousands) 2014-15 2013-14 2012-13

(as restated)

Net Position

Assets plus Deferred Outflows 8,069,874$ 7,850,883$ 7,703,593$

Liabilities plus Deferred Inflows 3,066,286 3,037,240 3,008,955

Total Net Position 5,003,588 4,813,643 4,694,638

Revenues

Governmental Activities 1,054,191$ 1,029,483$ 992,140$

Business-type Activities 527,307 474,659 440,773

Total Revenues 1,581,498 1,504,142 1,432,913

Expenses

Governmental Activities 1,018,076$ 1,025,660$ 1,028,844$

Business-type Activities 373,477 359,477 353,663

Total Expenses 1,391,553 1,385,137 1,382,507

Capital Assets


Business-type Activities 2,411,106 2,295,752 2,209,225

Total Capital Assets 6,663,608 6,512,557 6,353,962

Long-Term Liabilities


Business-type Activities 1,020,322 951,313 1,008,745

Total Long-Term Liabilities 2,768,226 2,757,226 2,763,137

9

The Balance Sheet, known as the Statement of Net Position

in governmental financial statements, presents information

concerning the City’s assets, deferred outflows, liabilities

and deferred inflows with the net amount reported as net

position. Increases and decreases in net position serve as

an indicator of the City’s financial position and of the results

of the City’s operations.

The assets and deferred outflows of the City exceeded its

liabilities and deferred inflows at the close of fiscal year

2015 by $5.004 billion. Of this amount, $96.2 million is

considered unrestricted. At the end of the prior fiscal year,

assets exceeded liabilities by $4.814 billion indicating that

the government improved its financial position during the

year. The largest portion of the City’s net position, $4.679

billion or 93.52%, consists of its investment in capital as-

sets (land, buildings, land improvements, monuments and

fountains, machinery and equipment, and infrastructure)

less any related debt used to acquire those assets that is still

outstanding. The City uses these capital assets to provide

services to citizens; consequently, these assets are not avail-

able 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, $228.0 mil-

lion or 4.56%, represents resources that are subject to ex-

ternal restrictions as to how they may be used. The remain-

ing balance of unrestricted net position, or $96.2 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 $313.3 million, may not be used to fund

governmental activities. Total net position of the City in-

creased by $189.9 million or 3.95%, due to the continued

investment in capital assets by both the governmental and

business-type activities. The unrestricted net position of the

governmental activities increased by $23.0 million. The

unrestricted net position of the business-type activities in-

creased by $53.9 million.

NET POSITION

Statement of Net Position(in thousands)

2014-15 2013-14 2014-15 2013-14 2014-15 2013-14

Current and Other Assets 562,753$ 615,708$ 779,491$ 662,863$ 1,342,244$ 1,278,571$ Capital Assets 4,252,502 4,216,805 2,411,106 2,295,752 6,663,608 6,512,557

Total Assets 4,815,255 4,832,513 3,190,597 2,958,615 8,005,852 7,791,128

Deferred Outflows 58,028 52,833 5,994 6,922 64,022 59,755

Long-term Liabilities Outstanding 1,747,904 1,805,913 1,020,322 951,313 2,768,226 2,757,226 Other Liabilities 227,666 216,850 57,945 49,591 285,611 266,441

Total Liabilities 1,975,570 2,022,763 1,078,267 1,000,904 3,053,837 3,023,667

Deferred Inflows 11,984 12,969 465 604 12,449 13,573

Net Position: 2,885,729$ 2,849,614$ 2,117,859$ 1,964,029$ 5,003,588$ 4,813,643$

Net Investment in Capital Assets 3,053,850$ 3,036,560$ 1,625,502$ 1,561,121$ 4,679,352$ 4,597,681$ Restricted 48,944 53,074 179,105 143,560 228,049 196,634 Unrestricted (217,065) (240,020) 313,252 259,348 96,187 19,328

Total Net Position 2,885,729$ 2,849,614$ 2,117,859$ 1,964,029$ 5,003,588$ 4,813,643$

Governmental Activities Business-type Activities Total

10

REVENUES

• Charges for services had a decrease of $7.8M partly due to a one time contribution in the prior year of $8.3M from the closing of a TIF fund

• Capital grants/contributions had a $25.7M decrease partly due to a $13.2M decline in green impact zone grants

• Earnings, Sales, property, hotel and restaurant taxes had a combined increase of $48.3M due to the continuing improvement in the lo-cal economy

• Charges for services increased by $45.6M, partly due to 10% and 15% increases in water and sewer rates respectively and higher revenue from terminal, landing and parking fees, at the KCI airport

• - Investment earnings increased by $4.6M mostly due to the change in the market value of the in-vestments year over year

WHERE DOES THE MONEY COME FROM?

Charges for Services 26%

26%

91%

1%

10%

2%

11%21%

20%

4%6%

Operating Grants & Contributions 10%

Capital Grants and Contributions 2%

Property Taxes 11%

Earnings and Profits Taxes 21%

Sales Taxes 20%

Hotel & Restaurant Taxes 4%

Other Taxes 6%

Investment Earnings 0%

Revenues-Governmental ActivitiesFor Fiscal Year Ended April 30, 2015

Revenues-Business-type ActivitiesFor Fiscal Year Ended April 30, 2015

Charges for Services 91%

Grants and Contributions 8%

Investment Earnings 1%

8%

Total Revenues - Governmental Activities Total Expenses - Governmental Activities(in thousands) (in thousands)

2014-15 2013-14 2014-15 2013-14

Program Revenues ExpensesCharges for Services 277,512$ 285,313$ Public Safety 407,290$ 404,352$ Operating Grants and Contributions 102,484 99,550 Public Works 182,674 187,827 Capital Grants and Contributions 19,096 44,751 General Government 121,623 125,180

General Revenues Interest on Long-Term Debt 73,741 73,649 Earnings and Profits Taxes 221,617 203,305 Culture and Recreation 66,107 65,411 Sales Taxes 207,699 185,719 Neighborhood Development 55,880 58,225 Property Taxes 116,502 113,395 Health 54,054 56,697 Hotel and Restaurant Taxes 44,397 39,537 Convention Facilities 43,678 44,911 Other Taxes 61,876 57,070 Economic Development 11,684 8,001 Investment Earnings 3,008 843 Unallocated Depreciation 1,345 1,407

Total Revenues 1,054,191$ 1,029,483$ Total Expenses 1,018,076$ 1,025,660$

Total Revenues - Business-type Activities Total Expenses - Business-type Activities(in thousands) (in thousands)

2014-15 2013-14 2014-15 2013-14

Program Revenues ExpensesCharges for Services 477,783$ 432,173$ Water 107,320$ 109,241$ Operating Grants and Contributions - - Sewer 117,582 104,036 Capital Grants and Contributions 42,811 40,397 Aviation 148,575 146,200

General Revenues Total Expenses 373,477$ 359,477$ Investment Earnings 6,713 2,089

Total Revenues 527,307$ 474,659$


2014-15 2013-14 2014-15 2013-14





2014-15 2013-14 2014-15 2013-14




11

EXPENSESWHERE DOES THE MONEY GO?

• Public Safety expenses increased from the prior year by $2.9M, partly due to higher personnel services costs, including wages, health insurance and pension

• Public Works expenses decreased from the prior year by $5.2M, partly due to declines in snow re-moval and street preservation costs

• General Government expenses decreased from the prior year by $3.6M, partly due to declines in ARRA programs for energy efficiency

Business-type Activities;

• Sewer fund expenses increased by $13.5M, due to increased costs to comply with the department’s separate and combined sewer system overflow control program

Expenses-Governmental ActivitiesFor Fiscal Year Ended April 30, 2015

$0 $100,000 $200,000 $300,000 $400,000 $500,000

Economic Development

Convention Facilities

Health

Culture and Recreation

Interest on Long-Term Debt

Neighborhood Development

General Government

Public Works

Public Safety

Expenses-Business-type ActivitiesFor Fiscal Year Ended April 30, 2015

$0

$50,000

$100,000

$150,000

$200,000

Water Sewer Aviation


2014-15 2013-14 2014-15 2013-14





2014-15 2013-14 2014-15 2013-14




12

CAPITAL ASSETSWHAT DO WE OWN?

Governmental capital assets, net of depreciation and disposals, increased by $35.7 million, This calculation is composed of $135.5 million in new asset expenditures less ($80.9) million in depre-ciation less ($29.8) million for loss on disposals and decreases to construction in progress plus $10.9 million in assets donated to the City. The $135.5 million is mainly due to $34.0 million for the Downtown Streetcar project, $32.2 million for the new East Patrol Police Campus, $8.8 million for Soccer Village in Swope Park, $6.6 million for Police Headquarters renovations and $5.0 million for Troost Avenue reconstruction.

Business-type capital asset additions increaed by $115.4 million, mainly due to the following:

- $83.3 million – increases to Water utility lines and improvements

- $61.9 million – increases to Sewer utility lines and improvements

- Offset by a $29.8 million decrease due to de-preciation 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, 2015

amounted to $6.664 billion, which was an increase of 2.32% from

fiscal year 2014. 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=$0 • Equipment, Vehicles, Buildings, Infrastructure and Mon-

uments: $5,000 • Land Improvements: $25,000 • Building Im-

provements: $25,000

*75% of bridges should be rated 65 or better

Capital Assets(in thousands)

2014-15 2013-14 2014-15 2013-14 2014-15 2013-14

Land/Permanent Right of Way 354,971$ 354,586$ 55,041$ 54,925$ 410,012$ 409,511$ Works of Art 499 174 - - 499 174 Buildings and Improvements 1,319,062 1,272,146 1,185,978 1,178,967 2,505,040 2,451,113 Monuments and Fountains 124,665 123,288 - - 124,665 123,288 Temporary Right of Way 633 615 - - 633 615 Land Improvements 311,915 284,817 - - 311,915 284,817 Machinery and Equipment 237,310 231,922 261,726 242,796 499,036 474,718 Infrastructure-Modified 2,340,843 2,319,689 - - 2,340,843 2,319,689 Infrastructure-Depreciated 236,915 223,837 2,190,191 2,044,954 2,427,106 2,268,791 Accumulated Depreciation (831,328) (753,694) (1,433,710) (1,354,777) (2,265,038) (2,108,471) Construction in Progress 157,017 159,425 151,880 128,887 308,897 288,312

Total Capital Assets 4,252,502$ 4,216,805$ 2,411,106$ 2,295,752$ 6,663,608$ 6,512,557$

2.32%


Infrastructure-Modified Condition AssessmentDesired

Condition Level 2015 2014 2013Roadway System >= 60 69.10 69.59 64.97Bridges * >= 65 76.38 74.45 75.70Street Lighting >= 90 97.40 96.40 98.30

* 75% of bridges should be rated 65 or better

Overall Condition Level

13

As of April 30, 2015, the City’s long-term obligations totaled $2.768 billion, comprised of $1.748 billion for governmental activities and $1.020 billion for business-type activities. Of this total, $167.3 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: $3,305Total Governmental Activities Debt as a % of Estimated Value of Property: 5.39%Total City Debt per Capita: $5,346Total City Debt as a % of Personal Income: 20.21%

Long-Term DebtApril 30, 2015

General Obligation Bonds 15.6%

Revenue Bonds 38.2%

Limited Obligation Debt 46.2%

46.2%

38.2%

15.6%

Long-Term Obligations(in thousands)

Payable atApril 30, 2015

Amounts Due Within One Year





General Obligation Bonds 378,785 30,255 - - 378,785 30,255 Bonds - KCMAC 130,811 13,495 - - 130,811 13,495 Implied Loan-Off Market Swap 3,530 132 - - 3,530 132 Bonds - PIEA 4,765 345 - - 4,765 345 Special Obligations 716,257 22,670 - - 716,257 22,670 MTFC Loan 4,247 1,361 - - 4,247 1,361 Bonds - IDA 272,295 5,135 - - 272,295 5,135 Bonds - TIFC, LCRA 9,520 3,105 - - 9,520 3,105 Revenue Bonds - - 892,247 55,658 892,247 55,658 Notes Payable - HUD 108 2,840 355 - - 2,840 355 Notes Payable - Various 16,623 4,946 16,623 4,946 Capital Lease - - 16,544 3,899 16,544 3,899 Net Pension Obligation

Employees' Retirement System 23,715 - 12,164 - 35,879 - Firefighters' Pension System 23,977 - - - 23,977 -

Net Other Post Employment BenefitObligation 54,230 - 14,579 68,809 -

Compensated Absences 31,409 6,534 8,387 1,932 39,796 8,466 Claims Payable 52,280 12,621 18,863 4,500 71,143 17,121 Other accrued liabilities - - 1,146 313 1,146 313

1,725,284 100,954 963,930 66,302 2,689,214 167,256 Add:

Unamortized Premium 31,640 - 57,380 - 89,020 - Less:

Discount (9,020) - (988) - (10,008) -

Total Long-Term Obligations 1,747,904$ 100,954$ 1,020,322$ 66,302$ 2,768,226$ 167,256$


Schedule of Funding Progress - Pension Systems

Actuarial Valuation Date

Pension Systems - Funded Ratio 5/1/2014 5/1/2013 5/1/2012

Police Retirement System 76.85% 77.74% 75.54%

Civilian Employees' Retirement System 76.69% 76.13% 75.59%

Employees' Retirement System 83.67% 80.71% 79.11%

Firefighters' Pension System 77.57% 76.44% 78.54%

14

External credit ratings are important and have a direct influence 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. In Fiscal Year 2015, the City’s subordinated airport revenue bonds were upgraded from “A-“ to “A.” There were no other changes during the year.

CITY’S CREDITHOW’S OUR CREDIT?

During fiscal year 2015, $149 out of every

$1,000 spent by the City on governmental

operating activities went toward debt

expenditures for principal and interest on

outstanding bonds and notes.

10.5%

10.9%

14.1%

13.5%14.9%

15.2%

15.0% 15.4%14.3%

14.9%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Debt Service as % of net Operating ExpendituresExcludes Business-type activities

City's Bond Credit Ratingsas of April 30, 2015

Moody's Standard and Fitch'sType of Bonds Issued Rating Poor's Rating RatingGeneral Obligation Bonds Aa2 AA AAKansas City, Missouri Special Obligation Bonds (Series 2014A, 2014B and 2014C) A1 AA- Not RatedWater 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+ Not RatedAirport Revenue Bonds (Subordinate Lien Bonds) A3 A A

The Airport Revenue Bonds (Subordinate Lien Bonds) - changed from A- to A according to Fitch - there w

15

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 42,902$ Investments 980,348 Trustee Accounts 121,114 Imprest Funds 44 Total 1,144,408$

The deposits and investments of the City are reflected inthe financial statements as follows.

(in thousands)Cash and Short-term Investments 656,913$ Restricted Cash and ST Investments 487,495 Total 1,144,408$

The fair value of the City’s investments as of

April 30, 2015 is displayed below.

Investments(in thousands)

Investment Type Fair ValuePooled Investments:

US Treasury Bills 14,999$ US Treasury Notes/Bonds 186,389 US Agencies - Noncallable 406,356 US Agencies - Callable 182,072 Total Pooled 789,816$

Restricted Investments:US Treasury Notes/Bonds 16,033$ US Agency Discounts 15,997 US Agencies - Noncallable 128,273 US Agencies - Callable 30,229 Total Restricted 190,532$

Grand Total 980,348$

Investment Type Fair ValueMoody's/S&P

Ratings

US Treasury Securities 217,421$ Aaa/AA+

US Agency Securities 762,927 Aaa/AA+

Total 980,348$

The fair value of the City’s investments as of

April 30, 2015 is displayed below.

Investments(in thousands)

Investment Type Fair ValuePooled Investments:

US Treasury Bills 14,999$ US Treasury Notes/Bonds 186,389 US Agencies - Noncallable 406,356 US Agencies - Callable 182,072 Total Pooled 789,816$

Restricted Investments:US Treasury Notes/Bonds 16,033$ US Agency Discounts 15,997 US Agencies - Noncallable 128,273 US Agencies - Callable 30,229 Total Restricted 190,532$

Grand Total 980,348$

Investment Type Fair ValueMoody's/S&P

Ratings

US Treasury Securities 217,421$ Aaa/AA+

US Agency Securities 762,927 Aaa/AA+

Total 980,348$

16

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.

The general fund’s total fund balance increased

by $14.1 million in fiscal year 2015. The general

fund’s reserves increased by $13.9 million in

fiscal year 2015, comprised of $8.5 million for

the stabilization amount and $5.4 million for the

countercyclical reserve. The stabilization amount

or emergency reserve of $39.1M represents

one month or 8.33% of total general fund

expenditures. An additional amount of $5.4

million is assigned for a countercyclical reserve.

The City’s goal is to fund the emergency reserve

in an amount equal to one month or 8.33% of

general fund expenditures. The goal of the

countercyclical reserve is funding at an additional

one month for a total of 16.67% of total general

fund expenditures.

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 finan-

cial 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 Position Ratio focuses on the ability to meet long-term obli-

gations 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, as indicated by the quick ratio re-mains strong but is beginning to show a decline. Two of the last three ratios that look at the long term financial position continue to show a slight downward trend.

Governmental Activities Only How are 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015we doing?

♦ Total Margin Ratio J 0.96 1.02 1.06 0.98 1.00 1.09 1.03 0.96 1.00 1.04

♦ % Change in Net Position -1.7% 0.9% 2.2% -0.7% 0.1% 3.0% 1.0% -1.4% 0.1% 1.3%

♦ Quick Ratio JJ

4.39 4.23 3.80 1.48 1.59 2.31 2.46 1.92 1.88 1.71

♦ Net Position Ratio L 0.21 0.20 0.24 0.04 0.02 -0.01 -0.01 -0.09 -0.12 -0.11

♦ Debt to Assets Ratio K 0.30 0.33 0.33 0.32 0.33 0.33 0.34 0.33 0.34 0.32

♦ Capital Assets Condition Ratio L 0.64 0.64 0.75 0.74 0.72 0.70 0.69 0.67 0.65 0.63

♦ 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 Position 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

net investment in capital assets. 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 but is beginning to show a decline.The last three ratios that lookat the long term financial position continue to show a slight downward trend.

KJKL

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 2013-14 2012-13 2011-12Nonspendable -$ -$ -$ Restricted 800 800 800 Committed 32,568 41,150 38,385 Assigned 4,777 7,386 5,499 Unassigned - - -

Total Fund Balance 38,145$ 49,336$ 44,684$

Fund Balance 2014-15 2013-14 2012-13Restricted

Workers compensation 800$ 800$ 800$ Committed

Stabilization amount 39,056 30,522 36,615 Contractual obligations 915 922 1,402 Re-appropriations 1,259 1,124 3,133

AssignedCountercyclical reserve 5,386 - 1,020 Contractual obligations 4,794 4,777 6,366

Total Fund Balance 52,210$ 38,145$ 49,336$

NOTE - For FY 2015, Doug Jones suggested that we add an explanation to thegeneral fund - fund balance table that says the goal of the stabilization amount andcountercyclical reserve is two months of expenditures - one month for each.

The stabilization amount or emergency reserve represents one month or 8.33%of total general fund expenditures. An additional amount of $5,386,000 million isassigned for a countercyclical reserve. The total of the emergency reserve andcountercyclical reserve is $44,442,000 or 9.48% of total general fund expenditures.The City’s goal is to fund the emergency reserve in an amount equal to one month or8.33% of general fund expenditures. The goal of the countercyclical reserve isfunding at an additional one month for a total of 16.67% of total general fundexpenditures.

General Fund

General Fund

17

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.

Countercyclical reserve – An amount establish by the Di-

rector of Finance. The countercyclical reserve, when com-

bined with the emergency reserve, shall not be greater than

two months of general fund operating expenditures.

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.

18

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

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, a pro-

fessional organization of public officials whose mission is

to enhance and promote the professional management of

governments for the public benefit by identifying and devel-

oping financial policies and best practices and promoting

their use through education, training, facilitation of member

networking, and leadership.

Imprest funds – Small cash funds such as, petty cash and

change funds held by a department outside of the Treasury

bank account.

Net position - is the difference between (a) assets and de-

ferred outflows of resources and (b) liabilities and deferred

inflows of resources, or in other words is the residual of all

other elements presented in a statement of financial position.

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.

Stabilization arrangement – An emergency reserve estab-

lished by the City Council. The balance shall be equal to

one month of general fund operating expenditures.

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]

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