NOTE T - CONTINGENCY

1. In June 2004, the City of Cape Girardeau and Cape Girardeau County entered into a development agreement with a local business. Under the agreement, the local business agreed to pay for certain public improvements incurred in conjunction with the construction of a new retail facility, and the City and County agreed to reimburse the local business for the cost of these improvements up to a maximum of $4,000,000 over an estimated 15 years. The local business completed these improvements at a cost of $2,668,646. The development agreement required the City to reimburse the local business for $2,134,917 of these costs through scheduled quarterly payments over fifteen years from available revenues. Available revenues are defined in the development agreement as 75% of the City’s quarterly net revenues from specific sales taxes generated by the business operations of the new retail facility which exceed

$64,000. The rates of the specified sales taxes currently equal 2%. Sales taxes with rates currently equal to .75% will expire during the term of this agreement. The City will be required to substitute revenues for sales taxes with equivalent rates, if available, when the specific sales taxes expire.

79

City of Cape Girardeau, Missouri NOTES TO BASIC FINANCIAL STATEMENTS

June 30, 2019 NOTE T - CONTINGENCY – Continued

Required quarterly payments increase annually per the repayment schedule included in the development agreement. To the extent that the available revenues for any quarter are less than

During the fiscal year ended June 30, 2019, retail operations at this development ceased and no payments were due under the development agreement.

2. In July 2007, the City entered into a development agreement with Greater Missouri Builders, Inc. (GMB) to reimburse them for costs associated with the Town Plaza Redevelopment Project. In conjunction with this agreement, the City established the Town Plaza Community Improvement District (CID) and determined the project area to be blighted pursuant to Chapter 353 of the Missouri Revised Statutes.

This project involved the conversion of the former Sears facility into a call center for National Asset Recover Services (NARS) and other various improvements, such as facade improvements, parking facilities, roof reconstruction, and HVAC enhancements. Total reimbursements to GMB for redevelopment costs were limited to $3.6 million plus 7.5%

interest. These reimbursements will be made from incremental County and City sales tax revenues, an additional CID sales tax, and real estate tax abatements. Reimbursements from incremental County and City sales tax revenue will be limited to $1.2 of the $3.6 million total.

Incremental County and City sales tax revenue was defined as the difference in future tax revenues from the City’s 1% general sales tax and .5% capital improvement sales tax and half the County’s .5% general sales tax and the revenues from these taxes from the project area in calendar year 2006. The CID implemented a 1% sales tax. Improvements to the redevelopment project will receive 100% real estate tax abatement for the first 10 years and 50% real estate tax abatement for the next 15 years. The current Sears facility will receive 50% real estate tax and City sales tax revenue is limited to $1,164,839. The City and the County are obligated to make quarterly payments as may lawfully be made from funds budgeted and appropriated for that purpose by the City and County.

During the fiscal year ended June 30, 2019, no payment was due under the development agreement.

City of Cape Girardeau, Missouri NOTES TO BASIC FINANCIAL STATEMENTS

June 30, 2019 NOTE T - CONTINGENCY – Continued

3. In June 2004, the City of Cape Girardeau and Cape Girardeau County entered into a development agreement with a local real estate developer. Under the agreement, the local developer agreed to pay for certain public improvements incurred in conjunction with the development of a 60 acre retail development, and the City and County agreed to reimburse the local business for the $2,998,434 cost of these improvements plus 4% interest with quarterly payments from available net sales tax revenue generated from any businesses operations located in the development.

Available revenue is defined by the agreement as all the net sales tax revenue generated by two .25% City capital improvement sales taxes and the .50% City transportation sales tax and half of the net sales tax revenue generated by a .50% County sales tax. All City sales taxes have expiration dates that could occur before the total costs of the improvements are reimbursed to the developer. The County sales tax has no expiration date. No provision is made to replace revenues from the City sales taxes that expire if they are not extended. The development agreement remains in effect until the total cost of the public improvements is reimbursed to the developer.

In October 2012, the City of Cape Girardeau and Cape Girardeau County entered into an amendment to the original development agreement. Under the agreement, the local developer agreed to pay for additional public improvements incurred in conjunction with the development of the 60 acre retail development, and the City and County agreed to reimburse the local business for the $2,024,360 cost of these improvements from available net sales tax revenue generated from an Academy Sports retail store. Academy Sports began operation in May 2013.

The City and County are required by the development agreement to reimburse the developer for the additional public improvement costs related to Academy Sports after the original development costs have been reimbursed with quarterly payments from available revenue.

Available revenue is defined by the agreement as all the net sales tax revenue generated by Academy Sports at that location on sales that exceed an inflation adjusted $2.5 million annually from two .25% City capital improvement sales taxes and half of the .50% City transportation sales tax and half of the net sales tax revenue generated by a .50% County sales tax. All City sales taxes have expiration dates that could occur before the total costs of the improvements are reimbursed to the developer. The County sales tax has no expiration date. No provision is made to replace revenues from the City sales taxes that expire if they are not extended. The development agreement remains in effect until the total cost of the additional public improvements is reimbursed to the developer or fifteen years from the beginning of repayments to the developer for costs related to the additional public improvements.

The City and the County are obligated only to make quarterly payments as may lawfully be made from funds budgeted and appropriated for that purpose by the City and County. During the fiscal year ended June 30, 2019 the City incurred payments of $246,268.17 under the development agreement. This amount is included in the Development Services expenses on the statement of activities.

81 Store site and other adjacent retail development sites, and the City agreed to reimburse the local developer for the cost of these improvements from available net sales tax revenue generated from the Menards Home Improvement operations and operations of other similar retail stores in the City that exceeded a baseline amount established in the development agreement.

The local developer has completed all public improvements at a cost of $2,943,843. The City is required by the development agreement to reimburse the developer for these costs from available revenues. Available revenue is defined by the agreement as all the net sales tax revenue generated by two .25% City capital improvement sales taxes and the .50% City transportation sales tax that exceed a baseline amount. All City sales taxes with the exception of one of the capital improvement sales taxes have expiration dates that could occur before the total costs of the improvements are reimbursed to the developer. No provision is made to replace revenues from the City sales taxes that expire if they are not extended. The development agreement expires 15 years after the beginning of the Menards Home Improvement operations.

The City is obligated only to make quarterly payments as may lawfully be made from funds budgeted and appropriated for that purpose by the City. During the fiscal year ended June 30, 2019, the City incurred $248,591.43 under the development agreement. constructing the conference center from available net sales tax revenues generated from the operations of the hotel, restaurant, and conference center.

As of October 3, 2017, the Company had substantially completed the project, having incurred

$6,938,689 in costs under the development agreement. The City is required by the agreement to reimburse the developer for these costs, up to a maximum of $6,250,000, from available revenues. Available revenue is defined by the agreement as all the net sales tax revenue generated by the 1% general sales tax and two .25% capital improvement sales taxes relating to the operations of the hotel, restaurant, and conference center. All City sales taxes with the exception of one of the capital improvement sales taxes have expiration dates that could occur before the total costs of the improvements are reimbursed to the developer. No provision is made to replace revenues from the City sales taxes that expire if they are not extended. The development agreement expires 20 years from December 31, 2017, or as soon as the City has completely reimbursed the Company for the total of reimbursable costs, if that happens first.

The City is obligated only to make quarterly payments as may lawfully be made from funds budgeted and appropriated for that purpose by the City. During the fiscal year ended June 30, 2019, the City incurred $78,178.65 under the development agreement.

REQUIRED SUPPLEMENTAL INFORMATION

Variance with

Original Final Actual Final Budget

REVENUES

Taxes $ 17,846,750.00 $ 17,846,750.00 $ 17,362,818.55 $ (483,931.45) Licenses & permits 1,715,150.00 1,715,150.00 1,664,011.88 (51,138.12) Intergovernmental 605,781.00 841,641.00 881,950.86 40,309.86 Charges for services 334,425.00 334,425.00 412,505.28 78,080.28 Internal charges 1,156,523.00 1,156,523.00 1,116,467.71 (40,055.29) Fines and forfeits 712,500.00 712,500.00 682,601.75 (29,898.25) Miscellaneous 339,148.00 339,148.00 358,294.55 19,146.55 Investment revenue 99,200.00 99,200.00 103,061.31 3,861.31 Total revenues 22,809,477.00 23,045,337.00 22,581,711.89 (463,625.11) EXPENDITURES

Current:

Administrative Services 3,113,032.00 3,084,762.00 2,916,719.67 168,042.33 Development Services 2,421,450.00 2,638,107.00 2,528,012.42 110,094.58 Parks and Recreation 1,721,195.00 1,828,695.00 1,786,599.41 42,095.59 Public Safety 14,228,395.00 15,219,925.00 14,858,246.67 361,678.33 Public Works 2,713,646.00 2,749,638.00 2,601,344.75 148,293.25 Total current 24,197,718.00 25,521,127.00 24,690,922.92 830,204.08 Total expenditures 24,197,718.00 25,521,127.00 24,690,922.92 830,204.08 Excess (deficiency) of revenues over expenditures (1,388,241.00) (2,475,790.00) (2,109,211.03) 366,578.97 OTHER FINANCING SOURCES (USES)

Compensation for damages - - 2,983.74 2,983.74 Contributed cap - other - - 200,000.00 200,000.00 Special assessments 14,000.00 14,000.00 22,900.27 8,900.27 Asset disposition - - 157,290.96 157,290.96 Transfers in 5,932,239.00 6,010,156.00 6,045,234.36 35,078.36 Transfers out (4,280,607.00) (4,710,844.00) (4,730,555.76) (19,711.76)

Total other financing source (uses) 1,665,632.00 1,313,312.00 1,697,853.57 384,541.57 SPECIAL ITEMS

Special payment to employee retirement plan 764,484.00 764,484.00 763,056.00 (1,428.00) Total special items 764,484.00 764,484.00 763,056.00 (1,428.00) Net change in fund balances (487,093.00) (1,926,962.00) (1,174,413.46) 751,120.54 Fund balances - beginning 7,150,449.17 7,150,449.17 7,150,449.17 - Prior period adjustment 83,489.96 83,489.96 83,489.96 - Fund balances - ending $ 6,746,846.13 $ 5,306,977.13 $ 6,059,525.67 $ 751,120.54

Budgeted Amounts

See Independent Auditors' Report.

City of Cape Girardeau General Fund

Statement of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual For the Year Ended June 30, 2019

Variance with

Original Final Actual Final Budget

REVENUES

Intergovernmental $ 167,000.00 $ 247,000.00 $ 297,981.22 $ 50,981.22 Charges for services 801,950.00 801,950.00 830,593.53 28,643.53 Miscellaneous 309,148.00 309,148.00 298,122.67 (11,025.33) Investment revenue 350.00 350.00 918.69 568.69

Total revenues 1,278,448.00 1,358,448.00 1,427,616.11 69,168.11 EXPENDITURES

Current:

Development Services 1,721,575.00 2,063,565.00 2,038,177.86 25,387.14 Total current 1,721,575.00 2,063,565.00 2,038,177.86 25,387.14 Debt service:

Interest - - 570.51 (570.51) Total debt service - - 570.51 (570.51) Total expenditures 1,721,575.00 2,063,565.00 2,038,748.37 24,816.63 Excess (deficiency) of revenues over expenditures (443,127.00) (705,117.00) (611,132.26) 93,984.74 OTHER FINANCING SOURCES (USES)

Compensation for damages - - 5,000.00 5,000.00 Asset disposition - - 18,988.50 18,988.50 Transfers in 443,127.00 516,162.00 525,380.08 9,218.08 Total other financing source (uses) 443,127.00 516,162.00 549,368.58 33,206.58 Net change in fund balances - (188,955.00) (61,763.68) 127,191.32 Fund balances - beginning 346,729.47 346,729.47 346,729.47 - Prior perdiod adjustment (20,892.08) (20,892.08) (20,892.08) - Fund balances - ending $ 325,837.39 $ 136,882.39 $ 264,073.71 $ 127,191.32

Budgeted Amounts City of Cape Girardeau

Airport Fund

Statement of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual For the Year Ended June 30, 2019

Variance with

Original Final Actual Final Budget

REVENUES

Charges for services $ 1,580,909.00 $ 1,580,909.00 $ 1,402,067.96 $ (178,841.04) Miscellaneous 14,568.00 14,568.00 14,915.95 347.95 Investment revenue 7,875.00 7,875.00 14,469.20 6,594.20 Total revenues 1,603,352.00 1,603,352.00 1,431,453.11 (171,898.89) EXPENDITURES

Current:

Parks and Recreation 2,763,197.00 2,977,098.00 2,892,431.69 84,666.31 Total current 2,763,197.00 2,977,098.00 2,892,431.69 84,666.31 Total expenditures 2,763,197.00 2,977,098.00 2,892,431.69 84,666.31 Excess (deficiency) of revenues over expenditures (1,159,845.00) (1,373,746.00) (1,460,978.58) (87,232.58) OTHER FINANCING SOURCES (USES)

Compensation for damages - - 270.41 270.41 Transfers in 1,159,845.00 1,364,732.00 1,360,140.80 (4,591.20)

Total other financing source (uses) 1,159,845.00 1,364,732.00 1,360,411.21 (4,320.79) Net change in fund balances - (9,014.00) (100,567.37) (91,553.37) Fund balances - beginning 926,311.25 926,311.25 926,311.25 - Fund balances - ending $ 926,311.25 $ 917,297.25 $ 825,743.88 $ (91,553.37)

Budgeted Amounts

See Independent Auditors' Report.

City of Cape Girardeau Parks and Recreation Fund

Statement of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual For the Year Ended June 30, 2019

Variance with

Original Final Actual Final Budget

REVENUES

Taxes $ 3,100,000.00 $ 3,100,000.00 $ 2,770,271.72 $ (329,728.28) Investment revenue 82,965.00 82,965.00 128,727.46 45,762.46

Total revenues 3,182,965.00 3,182,965.00 2,898,999.18 (283,965.82) EXPENDITURES

Current:

Administrative Services 93,000.00 137,200.00 135,631.21 1,568.79 Capital Improvements 60,000.00 104,644.00 44,643.25 60,000.75 Total current 153,000.00 241,844.00 180,274.46 61,569.54 Debt service:

Principal 379,925.92 379,925.92 379,925.92 - Interest 80,074.08 80,074.08 80,074.08 - Total debt service 460,000.00 460,000.00 460,000.00 - Total expenditures 613,000.00 701,844.00 640,274.46 61,569.54 Excess (deficiency) of revenues over expenditures 2,569,965.00 2,481,121.00 2,258,724.72 (222,396.28) OTHER FINANCING SOURCES (USES)

Advance repayments 19,859.00 19,859.00 19,858.93 (0.07) Asset disposition - - (26,430.03) (26,430.03) Transfers out (195,000.00) (195,000.00) (188,278.05) 6,721.95

Total other financing source (uses) (175,141.00) (175,141.00) (194,849.15) (19,708.15) SPECIAL ITEMS

Special payment to employee retirement plan 2,447,000.00 2,446,300.00 2,412,000.00 (34,300.00) Total special items 2,447,000.00 2,446,300.00 2,412,000.00 (34,300.00) Net change in fund balances (52,176.00) (140,320.00) (348,124.43) (242,104.43) Fund balances - beginning 3,518,153.21 3,518,153.21 3,518,153.21 - Fund balances - ending $ 3,465,977.21 $ 3,377,833.21 $ 3,170,028.78 $ (242,104.43)

Budgeted Amounts City of Cape Girardeau

Casino Revenue Fund

Statement of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual For the Year Ended June 30, 2019

Variance with

Original Final Actual Final Budget

REVENUES

Taxes $ 5,174,000.00 $ 5,174,000.00 $ 5,045,134.75 $ (128,865.25) Intergovernmental - 120,042.00 103,881.17 (16,160.83) Investment revenue 43,750.00 43,750.00 189,629.15 145,879.15

Total revenues 5,217,750.00 5,337,792.00 5,338,645.07 853.07

EXPENDITURES

Current:

Development Services 295,000.00 295,000.00 256,429.77 38,570.23 Capital Improvements 3,365,000.00 3,768,900.00 3,240,182.22 528,717.78 Total current 3,660,000.00 4,063,900.00 3,496,611.99 567,288.01 Total expenditures 3,660,000.00 4,063,900.00 3,496,611.99 567,288.01 Excess (deficiency) of revenues over expenditures 1,557,750.00 1,273,892.00 1,842,033.08 568,141.08 Net change in fund balances 1,557,750.00 1,273,892.00 1,842,033.08 568,141.08 Fund balances - beginning 6,629,280.38 6,629,280.38 6,629,280.38 - Prior period adjustment 41,724.65 41,724.65 41,724.65 - Fund balances - ending $ 8,228,755.03 $ 7,944,897.03 $ 8,513,038.11 $ 568,141.08

Budgeted Amounts

See Independent Auditors' Report.

City of Cape Girardeau Transportation Sales Tax V

Statement of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual For the Year Ended June 30, 2019

Variance with

Original Final Actual Final Budget

REVENUES

Taxes $ 5,345,000.00 $ 5,345,000.00 $ 5,200,443.74 $ (144,556.26)

Investment revenue - - 59,203.77 59,203.77

Total revenues 5,345,000.00 5,345,000.00 5,259,647.51 (85,352.49)

EXPENDITURES

Current:

Development Services 295,000.00 322,500.00 282,489.31 40,010.69 Total current 295,000.00 322,500.00 282,489.31 40,010.69 Total expenditures 295,000.00 322,500.00 282,489.31 40,010.69 Excess (deficiency) of revenues over expenditures 5,050,000.00 5,022,500.00 4,977,158.20 (45,341.80)

OTHER FINANCING SOURCES (USES)

Transfers out (4,850,000.00) (4,850,000.00) (4,850,000.00) - Total other financing source (uses) (4,850,000.00) (4,850,000.00) (4,850,000.00) -

Net change in fund balances 200,000.00 172,500.00 127,158.20 (45,341.80) Fund balances - beginning 1,728,074.85 1,728,074.85 1,728,074.85 - Prior period adjustment 41,084.14 41,084.14 41,084.14 -

Fund balances - ending $ 1,969,158.99 $ 1,941,658.99 $ 1,896,317.19 $ (45,341.80)

Budgeted Amounts

See Independent Auditors' Report.

City of Cape Girardeau Cap Imp Sales Tax-Sewer System

Statement of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual For the Year Ended June 30, 2019

88

City of Cape Girardeau, Missouri

NOTES TO BUDGETARY COMPARISON SCHEDULES June 30, 2019