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HomeMy WebLinkAboutCity of Henderson - Public Financial Report Service is our nature. POPULAR ANNUAL FINANCIAL REPORT Fiscal Year ended June 30, 2021 INSIDE Page 2 “On the river, but never in it” Page 3 Commission, awards Page 4 Capital expenditures, major projects Page 5 General financial information Page 6 General fund components Page 7 Looking to the future Page 8 Henderson by the numbers From the City Manager ... Dec. 31, 2021 Dear City Residents, We are pleased to present the City of Hender- son’s fifth Popular Annual Financial Report (PAFR) for the 2021 Fiscal Year. This report is intended to present a con- densed overview of the City’s financial positfon, financial practfces and details outlining how City revenues were generated and spent. Finan- cial informatfon in this report is derived from the independently audited financial statements that are a part of the City of Henderson’s Annu- al Comprehensive Financial Report (ACFR) for the year ended June 30, 2021. (See Page 3 for more informatfon about the ACFR and how to review the full document.) We are proud to report that the City has been awarded a Certfficate of Achievement for Excel- lence in Financial Reportfng by the Government Finance Officers Associatfon the past 22 years. The City was also presented with an Award for Outstanding Achievement for its fourth Popular Annual Financial Report we pro- duced for Fiscal Year 2020. That report has been availa- ble in the lobby of our Munic- ipal Center, on our web site, at the Henderson County Public Library, at Henderson Chamber of Commerce, at Henderson Economic Devel- opment and was distributed at the annual State of the City Address by Mayor Steve Austfn. We will again include a social media campaign and email distributfon for the 2021 PAFR as a general news release to local media. I am grateful to those employees in the City’s Finance Department whose hard work and pro- fessionalism made those distfnctfons possible. As you review this Popular Annual Financial Report, please feel free to share any questfons, concerns or recommendatfons that you may have with us. Respectiully, William L “Buzzy” Newman City Manager, 270-831-1200 ‘On the river, but never in it’ Henderson, originally known as “Red Banks” in reference to the soil along the banks of the Ohio River, was first settled in 1797. For those seeking the comforts and connectfons of a small town, Henderson is a classic river town on the Ohio River where life is framed by nature’s resources so you feel inspired with new ideas. Henderson is the county seat of Henderson County, Kentucky, and lies on the southern banks of the Ohio River in the western Kentucky coal field region. The City sits on a river bluff more than 70 feet above the Ohio River’s low water mark. Since the 1937 flood when Henderson was the only City on the Ohio River that did not flood, the local slogan has been “On the Ohio, but never in it.” The City of Henderson is nearly 18 square miles and is 400 feet above sea level. Henderson ranks as Ken- tucky’s 13th largest city in terms of populatfon. Friendly people and southern hospitali- ty are part of our nature. Henderson is located 10 miles south of Evansville, Indiana, and is 140 miles north of Nashville, Tennessee, 128 miles southwest of Louisville, Kentucky, and 196 miles southeast of St. Louis, Missouri. The area is home to diverse industries, attractfng major manufacturing and processors in aluminum, coal mining, steel, plastfcs, and agriculture. Locally pro- duced commoditfes include aluminum ingot, automotfve parts, truck axles and wheels, and poultry products. In 2022 we will add a paper mill and cardboard box corrugator that uses 100 percent recycled paper. We have: •A public school system with 8 elementary schools, 2 middle schools, 1 high school, and 1 early learning (preschool) center; Henderson County High School with a Career & Technical Educatfon (CTE) Unit and School of Fine Arts (SoFA); parochial school for grades preschool-8 that feeds into parochial high schools in both Owensboro, Kentucky, and Evansville, Indiana. •Henderson Community College (a part of the Kentucky Community and Tech- nical College System) and regional campuses of Murray State University and Lindsey Wilson College. •John James Audubon Museum with an extensive world-class collectfon of the artfst/naturalist’s art and artffacts. •More than 60 churches representfng many denominatfons. 2 ON THE COVER: (Top) Our downtown riverfront, a beacon for community activity; (middle) Sandy Lee Watkins Songwriters Festival, featuring 30 Nashville songwriters each summer for music and storytelling; (bottom left) W.C. Blues & Barbecue Festival and (right) Low Country Boil in one of our several riverfront parks. ABOVE: Visits by riverboats bringing tourists to town are a common sight spring through fall. In 2022, we will enjoy 26 such visits. Our location in Kentucky Board of Commissioners The city, incorporated as a town in 1810 and as a city in 1867, has operat- ed under the City Manager form of government since 1966. The Hender- son Board of Commissioners consists of a mayor and four commissioners elected by the citfzens on a non- partfsan ballot. The mayor is elected for a term of four years, while the commissioners are elected for a term of two years. The mayor and commissioners have equal votfng power. The commission sets policies that govern the city. It appoints advi- sory groups that assist in the deci- sion making process. The city manager is appointed by the commission and is responsible for the day-to-day operatfons of the city. The department managers responsible for their various de- partments report to the city man- ager. Left to right: 2021 Board of Commissioners — Commissioner Rodney Thomas (one term), Commissioner Brad Staton (three terms), Mayor Steve Austin (three terms), Commissioner Robert Pruitt (one term, and others previously) and Commissioner Austin Vowels (three terms). Introduction to the Popular Annual Financial Report The Popular Annual Financial Report (PAFR) is intended to brief the residents of the City of Henderson on the financial standing of their City Government. The informatfon in this report is drawn from the 2021 Annual Comprehensive Financial Report (ACFR). The ACFR conforms to the generally accepted accountfng principles (GAAP) and includes an audited financial statement. The financial informatfon pre- sented in the PAFR primarily comes from the Governmental Funds and does not include all component units. For more detailed informatfon and copies of the ACFR and PAFR, visit the City’s website at www.CityOfHendersonKY.org. Awards and Acknowledgements The Government Finance Officers Associatfon of the United States and Canada (GFOA) awarded a Certfficate of Achievement for Excellence in Financial Reportfng to the City of Henderson for its annual comprehen- sive financial report (ACFR) for the fiscal year ended June 30, 2020. This was the 22nd consecutfve year that the government has achieved this prestfgious award. In order to be awarded a Certfficate of Achievement, the government had to publish an easily readable and efficiently organized ACFR that satfsfied both generally accepted accountfng principles and appli- cable program requirements. The City of Henderson also received the GFOA’s Dis- tfnguished Budget Presentatfon Award for its annual budget document beginning July 1, 2021, and ending June 30, 2022. This was the 13th consecutfve year that the government has achieved this prestfgious award. To qualify for the Distfnguished Budget Presentatfon Award, the government’s budget document had to be judged proficient as a poli- cy document, a financial plan, an operatfons guide, and a communica- tfons device. For the fourth year, the City of Henderson received the Popular Annual Financial Reportfng Award for its June 30, 2020, presentatfon. Hender- son is one of only four citfes in Kentucky to be awarded all three awards for the most recent year. Notable in Community —Pratt Industries announced that it will con- struct a $500 million 321-employee corrugated box recycling and manufacturing complex on the Kentucky 425 ByPass using 100 percent recycled paper. Ground was broken in Decem- ber. —Audubon School Apartments, a new affordable housing complex for seniors, opened in the East End on the site of the former Audubon School. —The Boys & Girls Club of Henderson launched a capital campaign to transform the former Henderson National Guard Armory into a center for their programming as well as a community gathering place. The capital campaign also seeks to establish an endowment. —Local donors matched a $100,000 contribu- tion by former Gleaner publisher and citizen Walt Dear in support of Friends of Audubon State Park projects, including an expansion of the Wetlands boardwalk trail system. —Henderson Christian Community Outreach broke ground for the construction of a new home on Seventh Street. —13 local attractions, restaurants and events in Henderson County won awards in the 12th- annual Best in Kentucky Awards presented by Kentucky Living magazine. —Green River National Wildlife Refuge, an- nounced in 2019, added acreage toward its goal of 24,000 acres. 3 ACFR More financial detail is available in our Annual Comprehensive Financial Report. Find our reports at : www.cityofhendersonky.org/ 165/Audit-Financial-Reports 4 Capital Expenditures, Major Projects The fiscal 2022 budget includes a few capital projects. A few projects will have federal, state and local assistance; however, nearly $4.2 million in capital will come from the 2020A bond proceeds to be used for the sports complex, fire statfon and a new shelter at Newman Park. Major projects in the next fiscal year will be the completfon of the riverfront improvements, Wathen Lane improve- ment, sports complex facility and a new fire statfon No. 1. Some highlights of things to come: Public Safety • New fire apparatus to replace a 1999 pumper. Technology •Eighteen (18) personal computers and three laptop/Toughbook computers are proposed for replacement. This will contfnue the program of replacing older, slower computers with newer computers. •Install a fire suppression system in the City’s service room. Public Works • Repave eight different sectfons of streets. • Green River Road sidewalks. • Widening of Wathen Lane road improvements. • Paving at the two cemeteries and various parks. Gas System • Increase the number of annual installatfons of electronic receiver transmitter meters from 1,000 to 2,500. This project will eventually eliminate the need for human meter readers. In additfon to the capital items and initfatfves, one vehicle is included: — Purchase of a crew cab 4WD pickup for Henderson Area Rapid Transit. The Budget Process As required by Kentucky Revised Statutes 91A.030 and 83A.150, the City Manager submits a proposed operatfng budget on or before June 1 to the mayor and Board of Commissioners for the fiscal year com- mencing July 1. The budget includes ap- propriatfons for expenditures and means of financing them. Public input is welcomed, and all commission meetfngs concerning the budget are scheduled and announced in ad- vance. The meetfngs are held at the Municipal Building and are open to the public. A city cannot expend any funds from any governmental or proprietary fund without a legally en- acted budget passed by the Board of Com- missioners. Budgeted revenues and expenditures rep- resent the formal operatfng budget adopt- ed by the Board of Commissioners, as amended by the Board during the year. Budgetary control is maintained at the departmental level. Budgeted amounts not spent by year-end lapse. Individual amendments are typically not of signifi- cant dollar value in comparison to the original appropriatfons. Department heads have the authority to submit a budget adjustment request to the city manager for approval. The city manager may choose to take any request to the Board if it is one that may be unusual or highly visible. All budget amendments are docu- mented by ordinance and tracked in the city’s computerized financial system. Quick Fact “Rebecca,” the fountain in Central Park that’s a replica of a his- toric predecessor that existed at the turn of the 20th century, was refur- bished in the summer and fall of 2021. 5 Financial Highlights • Primary Government liabilitfes and deferred inflows exceeded assets and deferred outilows by $24.9 million at the close of fiscal 2021. Due to pension and other post-employment obligatfons, the unrestricted net positfon is a negatfve $47.5 million. • City governmental funds reported combined ending fund balances of $52 million. Of this total, $7.1 million is unassigned. • In the City’s business-type actfvitfes, income from operatfons increased from $831,271 in fiscal 2020 to $2,411,841 in fiscal 2022. • The City’s General Fund ended the year with a fund balance of $13,625,231, an increase of $2,546,790, or 23 percent, from fiscal year 2020’s balance of $11,078,441. • In the past four years, the General Fund’s fund balance has increased 24.9 percent from $10.9 million in 2017 to $13.6 million in 2021. *EDITOR’S NOTE: Informatfon in this report is drawn from the Annual Comprehensive Financial Report (ACFR) and conforms to generally accepted accountfng principles (GAAP). Quick Fact Henderson has been the home of four Kentucky governors and two lieuten- ant governors, the artist/naturalist John James Audubon, “Father of the Blues” W.C. Handy, Admiral Husband Kimmel of Pearl Harbor fame, the first woman in America to receive a medi- cal degree (Elizabeth Blackwell) and an originator of Mother’s Day (Mary Towles Sasseen Wilson.) Quick Fact Henderson County Public Library, built in 1904 with assistance from philanthropist Andrew Carnegie, added an 18,000-square-foot, $8.4 million expansion that opened in 2021 after having been slowed by the pandemic. The expansion added new space for the library’s collec- tions of various media, computer labs, dedicated areas for children and teens and new, much-needed community meeting spaces. 6 Long-Term Debt At the end of the current fiscal year, the City of Henderson had total bonded debt outstanding of $50,410,000 and general obligatfon contract of $82,923. All of the $50,492,923 is backed by the full faith and credit of the City. General Fund Components Unassigned Fund Balance The unassigned fund balance classificatfon can be considered as available surplus for the General Fund that can be spent for any purpose. Assigned Fund Balance The assigned fund balance classificatfon includes amounts to be used for specific purposes. The intent for the specific purpose was set by either the Board of Commissioners or the city manager. Committed Fund Balance The committed fund balance classificatfon includes amounts that can only be used for specific purposes and those committed amounts cannot be used for any other purpose unless the Board of Commissioners changes the commitments by ordinance or resolutfon. Non-spendable Fund Balance The non-spendable fund balance classificatfon includes amounts that can- not be spent because they are either 1) not in spendable form, or 2) legal- ly or contractually required to be maintained intact. Bond Rating Due to strong fiscal management, stable financial positfon, strong reserves, healthy liquidity and stable tax base, the City of Henderson has maintained a credit ratfng of Aa3 from Moody’s Investors Service on its general obligatfon bonds. Growth in the City Real estate assessments have increased 15.8 percent or $170.5 million from $1,079.1 million at the start of fiscal 2012 to $1,249.6 million at the end of fiscal 2021. This equates to a 1.5 percent annual increase. Bank Deposits Over the same 10-year period, bank deposits have increased 41.4 percent, or $225,008. 2021 factors During the fiscal year, the fund balance for the City of Henderson’s general fund increased by $2,546,790. The factors contributfng to this increase: • Occupatfonal taxes increase in the amount of $1,062,237. • The insurance premium tax was up $517,841 or 9.4 percent. • Federal grants in the amount of $1,575,000 with nearly $1.3 million from the CARES Act. • Total personnel costs were up only $146,582 or 9.8 percent compared to the prior year and finished $1,087,00 under the 2021 budget. • Property and Casualty Insurance expense decreased by $216,779 due to a change in carriers. 7 Economic Factors, Trends, & Next Year’s Budget The City of Henderson was able to fund the fiscal 2022 Budget by using re- serves from the General, Gas and Sanitatfon Funds. Modest growth in prop- erty and occupatfonal tax receipts and holding increases in operatfng ex- penses to a minimum will enable the City to contfnue to meet its needs. —For fiscal 2021, there were 226 constructfon permits issued with a total value of $17,419,209. There were 26 single family units, 1 duplex (2 units), and 3 multf-family (19 units) for a total of 47 units approved. The total value for new housing was $6,817,800. There were 2 new commercial develop- ments with a total value of $5,763,000. —There were 21 permits is- sued for demolitfon of sub- standard residentfal struc- tures. —The unemployment rate for the City of Henderson in June 2020 was approximately 5.3 percent which was lower than the natfonal rate of 5.9 per- cent and higher than the Ken- tucky rate of 4.4 percent. —On July 29, 2021, Pratt Industries announced a $400 million corrugated box recycling and manufacturing complex that within five years is expected to employ 321 people at wages averaging nearly $30 per hour. The complex will cover 1 million square feet and sit on a 200-acre site in Henderson. Pratt would become the City’s largest water and natural gas customer. The City has another 100 acres that could be developed for other industrial cus- tomers that could support Pratt or associatory companies. —Due to the contfnue threats of COVID-19 pandemic, fiscal 2021 was an- other challenging year not only for the City of Henderson but for the whole world. The health and safety of the citfzens and visitors were of the utmost importance and required a detailed actfon plan like no other. The impact that the pandemic will have on the local, state, and natfonal economies will linger for years. It is during tfmes like these that local governments are ex- pected to provide services and protectfon. Capital Assets The City of Henderson’s investment in capital assets for its governmental and business-type actfvitfes as of June 30, 2021, amounts to $35,109,930 (net of accumulated depreciatfon). This investment in capital assets in- cludes land, buildings, machinery and equipment, gas system improvements, park facilitfes, vehicles, sculptures, and infrastructure. The total increase in capital assets for the current fiscal year was approxi- mately 0.5 percent. Major capital asset events during the current fiscal year included the follow- ing: •$540,214 for various vehicles includ- ing 11 police vehicles. •More than $324,500 for self- contained breathing apparatus and other emergency equipment for the fire department. •Another $291,681 on new radio equipment. •Sanitatfon rear-loading truck in the amount of $149,717. •Real property in the amount of $959,257 that includes $859,257 for a sports complex and $100,000 down payment on property for an industrial customer. •$93,333 on new roads and bridges. Quick Fact The City is developing 124 acres at the end of Borax Drive to be used for economic development. With the pur- chase of the tract for Pratt Industries, an additional 100 acres will be available for development. 8 Request for Information Questfons or requests for additfonal finan- cial informatfon may be sent to Robert Gunter, Finance Director, City of Hender- son, 222 First St., P.O. Box 716, Hender- son, KY 42419-0716 or visit our website at www.CityOfHendersonKY.org. Teamwork: City-County Joint Ventures • Preparatfons and infrastructure for the locatfon of Pratt Industries’ $400 million corrugated box recycling and manufacturing complex announced in July 2021. • Preparatfons and infrastructure for constructfon of the approaches and extension of I-69 startfng in 2022. • Planning for the future of the U.S. 41- North corridor following the comple- tfon of I-69 in Henderson and Hender- son County. • Flood Mitfgatfon Board oversees funds dedicated to addressing flood- ing problems in the community. • A festfval to honor traditfons of His- panic citfzens: Dia De Los Muertos. • Solid waste disposal issues and op- tfons reviewed by City-County Cooperatfve Study Team. • Emergency Dispatch Operatfons in the 911 Center with a goal of improving funding optfons. • A combined City-County Tourism Commission. • A reorganized and combined Human Rights Commission. Henderson By The Numbers 28,757 Population of Henderson 1810 Incorporated as a Town 1904 Public Library Built Jan. 31, 1937 River crested at 53.9 feet, 19 feet above flood stage (but the City of Henderson was high and dry) 25 Parks & Public Spaces $39,887 Family Medium Income 10,200 Weekly Residential Sanitation Pickups 5,556 Central Park Memorial Day cross display started with 34 tributes in 1947. In 2021 there were 5,556. 5 Public murals that have grown from a catalyst project in 2018 that fulfilled an item on community’s Vision Plan and Downtown Master Plan. 15 Top Local Employers Tyson Foods 1,336 Henderson County Schools 1,095 Deaconess Henderson 900 Gibbs Die Castfng 763 Century Aluminum 515 City of Henderson (including HWU) 470 Pittsburg Tank & Tower Co. 342 Big Rivers 338 Audubon Metals 332 Brenntag Mid-South 275 Dana 251 Henderson Co. Government 209 Accuride Corp. 159 Sitex Corp. 122 Red Banks What Henderson, settled in 1797, was first called. Aug. 15, 1896 First electric streetlights lit. Henderson was the first city in western Kentucky to own its own power generating plant. 56,268 Total ridership on Henderson Area Rapid Transit in FY2021 (Ridership impacted by COVID-19 pandemic.) 1 Gravel street (Van Wyck Road) 60,586 Calls in Fiscal Year 2020 to the 911 Emergency Communication Center, a majority on cellular phones. 1,185 Number of fire hydrants in the City of Henderson. Hydrant tops are painted in colors to indicate the flow capacity in gallons per minute.