Accountants’ Report and Financial Statements June 30, 2007_part1 docx

Consolidated Public Library District No. 3
Known As
Mid-Continent Public Library
Accountants’ Report and Financial Statements
June 30, 2007



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Consolidated Public Library District No. 3
Known As
Mid-Continent Public Library
June 30, 2007


Contents

Independent Accountants’ Report on Financial Statements
and Supplementary Information 1

Management’s Discussion and Analysis 2

Basic Financial Statements
Governmental Fund Balance Sheet/Statement of Net Assets 6
Reconciliation of the Statement of Net Assets with Governmental Fund

Balance Sheet 7
Governmental Fund Revenues, Expenditures and Changes in
Fund Balance/Statement of Activities 8
Reconciliation of the Statement of Activities with Governmental Fund
Revenues, Expenditures and Changes in Fund Balance 9
Notes to Financial Statements 10

Required Supplementary Information
Revenues and Expenses Compared to Budget 20
Schedule of Funding Progress 22


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Independent Accountants’ Report on Financial Statements
and Supplementary Information


Board of Directors
Consolidated Public Library District No. 3,
Known As Mid-Continent Public Library
Independence, Missouri

We have audited the accompanying financial statements of the governmental activities and the general
fund of Consolidated Public Library District No. 3, Known As Mid-Continent Public Library (the Li-
brary), as of and for the year ended June 30, 2007, which collectively comprise the Library’s basic fi-
nancial statements as listed in the table of contents. These financial statements are the responsibility of the

Library’s management. Our responsibility is to express opinions on these financial statements based on
our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audit provides a reasonable
basis for our opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective
financial position of the governmental activities and the general fund of Consolidated Public Library District
No. 3, Known As Mid-Continent Public Library as of June 30, 2007, and the respective changes in financial
position for the year then ended in conformity with accounting principles generally accepted in the United
States of America.
The accompanying management’s discussion and analysis, budgetary information and schedule of fund-
ing progress as listed in the table of contents are not a required part of the basic financial statements
but are supplementary information required by the Governmental Accounting Standards Board. We
have applied certain limited procedures, which consisted principally of inquiries of management regarding
the methods of measurement and presentation of the required supplementary information. However, we
did not audit the information and express no opinion on it.
/s/ BKD,
LLP

Kansas City, Missouri
August 31, 2007

120 West 12
th
Street, Suite 1200 Kansas City, MO 64105-1936 816.221.6300 Fax 816.221.6380

Beyond Your Numbers
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Consolidated Public Library District No. 3
Known As
Mid-Continent Public Library
Management’s Discussion and Analysis
June 30, 2007


2
The discussion and analysis of Mid-Continent Public Library (the Library) provides an overview of the
Library’s financial activities for the year ended June 30, 2007. While profit is not a motive of the Library, a
strong financial position allows the Library to deliver excellent services to the taxpayers of the District. This
discussion and analysis should be read in conjunction with the accompanying financial statements of the
Library.
Financial Highlights
Management believes the financial condition of the Library is strong. The Library successfully is-
sued a $10 million bond with an AA- rating by Standard & Poor’s to finance major capital projects.
• Cash and Investments increased by $12,922,165. This consists of a 76% increase in cash
and a 23% increase in investments.
• Total assets at year-end amounted to $114,731,503, which exceeded total liabilities by
the amount of $102,393,660, resulting in a highly positive net asset position.
• Total revenues were $41,502,519, an increase from 2006 in the amount of $3,809,675 or
10%, primarily due to property taxes collected on newly developing areas in the Li-
brary district and investment income.
• Total expenses increased by $1,319,461, a 4% increase from fiscal 2006.

Overview of Financial Statements
Management’s discussion and analysis introduces the Library’s basic financial statements. The Li-
brary’s basic financial statements include: (1) government-wide financial statements, (2) fund fi-
nancial statements, and (3) notes to the financial statements. This report also contains additional
required supplementary information (budgetary schedules) in addition to the basic financial state-
ments.
Basic Financial Statements
The Library operates a single government program (library system) and presents the aforemen-
tioned government-wide financial statements and fund financial statements in combined form. The
combined statements are: (1) Governmental Fund Balance Sheet/Statement of Net Assets, (2)
Governmental Fund Revenues, Expenditures and Changes in Fund Balance/Statement of Activities.
These financial statements also include Notes to the Financial Statements that explain some of the
information in the financial statements and provide more detail.
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Consolidated Public Library District No. 3
Known As
Mid-Continent Public Library
Management’s Discussion and Analysis
June 30, 2007


3
Government-Wide Financial Statements
The two government-wide financial statements report information about the Library as a whole us-
ing accounting methods similar to those used by private-sector companies. Government-wide fi-
nancial statements provide both long-term and short-term information about the Library’s overall
financial status.
(A) The statement of net assets includes all of the Library’s assets and liabilities, with the dif-
ference reported as net assets. Over time, increases or decreases in the Library’s net as-

sets may serve as a useful indicator of whether financial position is improving or
deteriorating.
(B) The statement of activities reports how the Library’s net assets changed during the most
recent fiscal year. All changes in net assets are reported as soon as the underlying event
giving rise to the change occurs, regardless of the timing of related cash flows. Thus,
revenues and expenses are reported in this statement for some items that will not result in
cash flows until future fiscal periods.
The government-wide financial statements reflect the Library’s only program, the library system,
which is a governmental activity. Governmental activities are supported primarily by property
taxes.
Fund Financial Statements
Governmental funds focus on (1) how cash and other financial assets that can readily be converted
to cash flow in and out and (2) the balances left at year-end that are available for spending. Conse-
quently, the governmental fund statement reports short-term fiscal accountability focusing on the
use of spendable resources during the year and balances of spendable resources available at the end
of the year.
Notes to the Financial Statements
The notes provide additional information that is essential to a full understanding of the data pro-
vided in the government-wide and fund financial statements.
Required Supplementary Information
The basic financial statements are followed by a section of required supplementary information.
This section includes a budgetary comparison schedule and a pension plan schedule of funding pro-
gress.
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Consolidated Public Library District No. 3
Known As
Mid-Continent Public Library
Management’s Discussion and Analysis
June 30, 2007

4
Financial Analysis
The following comparative condensed statements serve as the key financial data and indicators for
management, monitoring and planning.

Consolidated Public Library District No. 3 Known As
Mid-Continent Public Library, Net Assets


2007 2006



Current assets $ 57,006,838 $ 43,986,594
Capital assets 57,736,469
54,267,407

Total assets 114,743,307
98,254,001

Current liabilities 3,038,749 2,161,610
Long-term liabilities 9,310,898
178,197

Total liabilities 12,349,647
2,339,807

Net assets

Invested in capital assets 56,604,905 54,267,407
Unrestricted 45,788,755
41,646,787

Total net assets $ 102,393,660
$ 95,914,194

Consolidated Public Library District No. 3 Known As
Mid-Continent Public Library, Changes in Net Assets

Revenues $ 41,502,519 $ 37,692,844

Expenses 35,023,053
33,703,592

Change in net assets 6,479,466 3,989,252

Net Assets, Beginning of Year 95,914,194
91,924,942

Net Assets, End of Year $ 102,393,660
$ 95,914,194


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Consolidated Public Library District No. 3
Known As
Mid-Continent Public Library
Management’s Discussion and Analysis

June 30, 2007


5
General Trends and Significant Events
Construction has begun on the new Genealogy Library which will be known as the Midwest Gene-
alogy Center. Construction bids were awarded and are below the budgeted amount. Completion is
scheduled for late Spring of 2008.
The Library issued $10 million in revenue bonds through UMB Bank for the purpose of financing
the new Genealogy Center. The bonds were given an AA- long term rating by Standard and
Poor’s.
A new Smithville Branch Library is in the planning stage. Preliminary Plat approval is before the
Smithville Planning and Zoning Commission. Breaking of ground for the new facility is expected
to take place in Spring of 2008.
A “pay for performance” and grade salary system is being phased in over a two-year period for all
salaried employees. This will replace the step and grade system which as been in place for many
years. The new salary system will give emphasis and reward to accomplishing goals as opposed to
having longevity as the dominant factor in determining salary.
The purchase of the property in Kansas City/Clay County known as “Woodneath” is in the final
stages of planning. This will be the site of a themed destination library.
The Board authorized the interior improvement or enhancement of the older branches over a period
of the next four years. The interiors of six branches will be completed during this fiscal year.


Richard J. Wilding
Director of Libraries


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Consolidated Public Library District No. 3
Known As
Mid-Continent Public Library
See Notes to Financial Statements
Governmental Fund Balance Sheet / Statement of Net Assets
June 30, 2007


Assets

General
Fund Adjustments
Statement
of
Net Assets


Cash and cash equivalents $ 6,368,581 $ 6,368,581
Investments and deposits 21,421,783 21,421,783
Interest receivable 43,738 43,738
Prepaid expenses and subscriptions 390,485 $ 108,809 499,294
Designated investments 24,665,555 — 24,665,555
Designated cash and cash equivalents 3,819,123 — 3,819,123
Designated interest receivable 176,960 — 176,960
Capital assets, net —
57,736,469 57,736,469

Total assets $ 56,886,225
$ 57,845,278 $ 114,731,503



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6

Liabilities and Fund Balance – Net Assets

General
Fund Adjustments
Statement
of
Net Assets


Accounts payable $ 437,420 $ 94,186 $ 531,606
Accrued expenses
Vacation and sick pay 1,483,667 — 1,483,667
Wages and payroll taxes 138,154 — 138,154
Early retirement benefits 28,518 171,482 200,000
Bond Payable —
9,984,416 9,984,416

Total liabilities 2,087,759 10,250,084 12,337,843

Fund Balance/Net Assets

Fund balances
Reserved for
Bond payments 10,000,000 (10,000,000) —
Unreserved, designated for
Compensated absences 1,483,667 (1,483,667) —
Encumbrances 437,420 (437,420) —
Unreserved, undesignated for
General fund 42,877,379
(42,877,379) —

Total liabilities and fund balance $ 56,886,225


Net Assets
Invested in capital assets, net of related debt 56,604,905 56,604,905
Unrestricted 45,788,755
45,788,755

Total net assets 102,393,660
102,393,660

Total liabilities and net assets $ 57,845,278
$ 114,731,503




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Consolidated Public Library District No. 3
Known As
Mid-Continent Public Library
See Notes to Financial Statements 7
Reconciliation of the Statement of Net Assets with
Governmental Fund Balance Sheet
June 30, 2007


Total Fund Balances — Governmental Funds

$ 54,798,466
Amounts reported for governmental activities in the statement of
net assets are different because
Capital assets used in governmental activities are not financial
resources and, therefore, are not reported as assets in
governmental funds. The cost of the assets is $167,885,294,
and the accumulated depreciation is $110,148,825. 57,736,469

Bond issuance costs not reported in the funds 108,809

Long-term liabilities early retirement benefits—noncurrent are
not due and payable in the current period and, therefore, are
not reported as liabilities in the funds: (171,482)

Special obligation bonds, net unamortized discount of $15,584 (9,984,416)

Interest payable (94,186
)

Total net assets $ 102,393,660





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