Audit Report - 2006
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SlNAiregrt
COMPREHENSIVE ANNUAL FINANCIAL REPORT
of the
SALINA AIRPORT AUTHORITY
A Component Unit of the
City of Salina, Kansas
For the Fiscal Year Ended December 31, 2006
Prepared by the Management
of the .
Salina Airport Authority
SALINA A irport
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SALINA AIRPORT AUTHORITY
TABLE OF CONTENTS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
For the Fiscal Year Ended Decembc::r 31, 2006
INTRODUCTORY SECTION
Letter of Transmittal ..................................................................................... 1-9
Principal Officers .......................................................................................... 10
Authority Staff Members .............................................................................. II
Organizational Chart ..................................................................................... 12
Certificate of Achievement ........................................................................... 13
Salina Municipal Airport Aerial View.......................................................... 14
FINANCIAL SECTION
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Independent Auditors' Report ....................................................................... 15-16
Management's Discussion and Analysis ...................................................... 17-23
Statements of Net Assets...............................................................................24-25
Statements of Revenues, Expenses and
Changes in Net Assets............................................................................... 26
Statements of Cash Flows (Direct Method).................................................. 27-28
Notes to Financial Statements....................................................................... 29-42
Supplemental Information
Schedules of Revenues, Expenses and Changes in Net Assets.................. 44-46
Capital Expenditures .................................................................................. 47-49
General Obligation Bonds - Series 1998-A ............................................... 50
General Obligation Refunding Bonds - Series 1999-B.............................. 51
General Obligation Improvement Bonds - Series 2001-A......................... 52
General Obligation Improvement Bonds - Series 2002-A......................... 53
General Obligation Improvement Bonds - Series 2005-A ........................ 54
General Obligation Temporary Notes - Series 2006-1.............................. 55
KDOCH Loan Payable............................................................................... 56
Special Assessment Debt-Street and Utility Improvement........................ 57
Financing Lease Payable............................................................................ 58
Insurance in Force...................................................................................... 59
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Statistical Table of Contents ...................................................................... 61
Total Annual Revenues, Expenses and Changes in Net Assets History....... 62-63
Change in Cash and Cash Equivalents History............................................. 64-65
General Obligation Debt Service Coverage.................................................. 66
Capital Expenditure History.......................................................................... 67
Revenue Bond Coverage...................:........................................................... 68
Principal Customers ...................................................................................... 69
Local Government Mill Levy Rates, Direct and Overlapping...................... 70
Mill Levy Revenue........................................................................................71
Air Traffic, Fuel Flowage, and Enplanement Trends ................................... 72
Major Employers..................... .................................... .................................. 73
Saline County Population, Demographic and Labor Statistics .....................74
Saline County Employment Data.................................................................. 75
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STATISTICAL SECTION
COMPLIANCE
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Report on Internal Control Over Financial
Reporting and on Compliance and Other Matters Based on an Audit
of Financial Statements Performed in Accordance with
Government Auditing Standards.......................................................... 77-78
Report on Compliance with Requirements Applicable to
Each Major Program and Internal Control Over Compliance
In Accordance with OMB Circular A-133 .......................................... 79-80
Schedule of Expenditures of Federal Awards............................................... 81
Notes to Schedule of Expenditures of Federal Awards ...............................82
Summary Schedule of Prior Audit Findings ................................................83
Schedule of Findings and Questioned Costs ................................................84
Corrective Action Plan ................................................................................. 85
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Introductory Section
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The SLN Aviation
Service Center and
Salina Airport
Industrial Center
have an innovative
and
comprehensive
approach to
providing building
sites, community
support and
workforce training
resources, all
coupled with a
world-class airport.
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SA LINAA irport
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Chairman
Eric R. Hardman
Vlee-Chairman
JuUe Sager MUler
Secretary
Dr. Randy Hassler
Treasurer
Jeffrey R. Thompson
Past Chairman
Stephen C. Ryan
Executtve Director Timothy F. Rogers, A.A.E. Mar. of Administration and Finance Michelle R. Swanson MRr. of Operations David wGunner" Wites
Board Attorney Greg A. Bengt$On
July 27,2007
Salina Airport Authority Board of Directors
3237 Arnold Ave.
Salina, KS 67401
To the Board of Directors of the Salina Airport Authority:
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The Comprehensive Annual Financial Report (CAFR) of the Salina Airport Authority (the "Authority")
for the fiscal year ended December 31, 2006 is hereby submitted in accordance with the Kansas Statutes
Annotated (K.S.A. 27-324). As required by the statute, the City of Salina will be furnished copies of the
Authority's 2006 CAFR. Responsibility for both the accuracy of the data presented and the
completeness and fairness of the presentation, including all disclosures, rests with the Executive Director
of the Authority. To the best of our knowledge and belief, the data as presented is accurate in all
material aspects, that it is presented in a manner designed to fairly set forth the fiscal position and results
of the operation of the Authority as measured by its financial activity, and that all disclosures necessary
to enable the reader to gain maximum understanding are included in the report.
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This CAFR is presented in accordance with generally accepted accounting principles (GAAP) and
pursuant to K.S.A. 27-324, an audit of the books, accounts and financial statements has been completed
by the Authority's independent certified public accountants, Clubine and Rettele, Chartered. The
independent audit is in accordance with the Kansas Municioal Audit Guide. the Government Auditing
Standards issued by the Comptroller General of the United States, and the provisions of the Office of
Management and Budget Circular A-133, "Audits of States, Local Governments and Nonprofit
Organizations".
GAAP requires that management provide an overview and analysis to accompany the financial
statements in the form ofa Management Discussion and Analysis (MD&A). It is recornmended that this
letter of transmittal be read in conjunction with the MD&A, which can be found immediately following
the report of the independent auditor in the Financial Section of this report.
ORGANIZATION OF THE REPORT
The Authority applies the standards for preparation of local government financial reports recornmended
by the Government Finance Officers of the United States and Canada (GFOA). The Authority's 2006
Comprehensive Annual Financial Report is presented in four sections:
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Introductory Section - contains this letter of transmittal, a list of the Authority's
principal officers, a listing of Authority staff members, an organizational chart, the
GFOA Certificate of Achievement for Excellence in Financial Reporting for fiscal year
2005, and an aerial photo of the Salina Municipal Airport and Airport Industrial Center.
SA LINA A_
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3237 Arnold / Salina KS 67401-8190 /785.827.3914/ Fax: 785.827.2221
. www.saUnaatrport.com'
INTRODUCTORY
Financial Section - includes the independent auditors' report, Management's
Discussion and Analysis (MD&A), the Authority's 2006 financial statements and the
required supplemental information.
Statistical Section - includes selected financial and demographic information, which
highlights economic and demographic trends.
ComDliance Section - includes reports concerning the Authority's compliance and
internal control over financial reporting and compliance and internal control over
compliance with requirements applicable to administering federal awards programs.
REPORTING ENTITY
The Salina Airport Authority is a body corporate and politic. The Authority was created by the City of
Salina in April 1965 (Sec. 4-16, Salina City Code) pursuant to the authority granted by the City by the
surplus property and public airport authority act of the State of Kansas (K.S.A. 27-315 et seq.) The
Authority was created for the purpose of accepting as surplus property portions of the former Schilling
A.F.B., which was closed by the United States Department of Defense in June 1965. By quitclaim deed
the Authority received over 2,900 acres of land and numerous buildings for the purpose of operating and
developing the Salina Municipal Airport and the Salina Airport Industrial Center. The Authority is
managed and controlled by a five-member Board of Directors appointed by the Salina City Commission.
The Board appoints the Executive Director, who is the chief executive otlicer of the Authority. The
Executive Director hires the remaining employees of the Authority. The Executive Director and his staff
of sixteen employees manage and operate the Salina Municipal Airport and the Salina Airport Industtial
Center.
The Salina Municipal Airport is the only commercial service airport serving Salina/Saline County and
the 22-county area, which comprises North Central Kansas. The Airport also services the corporate,
business, private aviation and flight training needs of industry, business and individuals in the area. The
Airport is also used by Kansas State University at Salina (KSUS). The campus of KSUS is located
adjacent to the Airport. The college offers degrees in professional flight training, airframe and power
plant maintenance, and avionics technology.
The Salina Municipal Airport and Airport Industrial Center is home for 80 businesses and organizations.
Forty-five of the businesses and organizations are tenants of the Authority. One of the primary functions
of the Authority is to facilitate the continued growth of jobs and payroll at the Airport and Airport
Industrial Center. The Authority works in partnership with the City of Salina, Saline County and the
Salina Area Chamber of Commerce for the retention of existing business and industry and the
recruitment of new business and industry.
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INTRODUCTORY
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ECONOMIC CONDITIONS AND OUTLOOK
Local Economv
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The Salina/Saline County economy has continued to demonstrate economic strength, as compared to
other regions of the state. In 2005, Saline County's average annual employment increased by over 1,700
from the prior year. The average unemployment rate for the City of Salina fell from 4.6 percent in 2005
to 3.7 percent in 2006. Salina's visitor count during 2006 is estimated at over 500,000. Lodging
revenue reached a record high of over $19 million. Growth in the areas of manufacturing,
transpOltation, finance, real estate, insurance, services and retail trade, confirm Salina's position as one of
Kansas' strongest regional economic centers.
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According to the April 2004 Strength Index. report published by K-State Research and Extension
Department of Agricultural Economics, Saline County ranked fifth out of the 105 counties in "strength
index" for 2002-2003. The index is a measure of economic prosperity in Kansas counties, and is made
up of three components including wealth, personal income and employment indices. The strength index
is detennined not only by compiling the key economic indicators in each county, but also comparing
those measures against the state's per capita economic progress. A county with a score of 1.0 for all
three indices would perfectly reflect the values for the State of Kansas and have a Strength Index of
3.00. Saline County's score of 3.07 indicates that it is prospering at a greater rate than the entire state
The Bureau of the Census, the Kansas Department of Revenue, the Kansas Department of Human
Resources, the Kansas Governor's Economic and Demographic Report, and K-State Research and
Extension comprise the source for the strength index data.
Economic Condition of the Airport and Airport Industrial Center
As of December 31, 2006, over 80 businesses and organizations at the Salina Municipal Airport and
Airport Industrial Center employed over 4,000 employees with a combined payroll in excess of $138
million.
Future Economic Outlook
The future economic outlook for both Salina and the Authority continues to look favorable. Continued
growth in service, retail and manufacturing sectors is expected. The Salina Area Chamber of Commerce
forecasts that approximately 700 new jobs per year will be added to the economy over the next three to
fi ve years.
Salina Municipal Airport businesses including Aerospace Systems and Technologies, Inc., Kansas State
University at Salina, America Jet at SLN, and Hawker Beechcraft Corporation continue work on facility
expansion plans. Salina Airport Industrial Center businesses including Geoprobe Inc., Schwan's Food
Manufacturing Inc., and the Kansas Army National Guard at Salina, also continue to work on facility
expansions. Collectively, these expansions will result in additional jobs and payroll.
The Salina Airport Authority in partnership with the Salina Area Chamber of Commerce, the City of
Salina and Saline County, continue to work and expand on economic development programs that
include web based building and site directories, electronic newsletters, trade show participation and
expanding contacts through the Kansas Department of Commerce.
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INTRODUCTORY
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INITIATIVES AND DEVELOPMENT
Salina Municipal Airport (SLNl Airport Operations. Maintenance and Development
2006 Federal Aviation Administration .(FAA) Airport Safety Enhancement Award
The FAA Central Region recognized the Airport Authority for excellence in operating the Salina
Municipal Airport. The award is presented to airport operators that complete three consecutive years
of airport certification inspections without any items of correction. The award speaks to the
commitment to excellence and the dedication of the Airport Authority Board of Directors and staff to
the highest standard of safety for the pilots and passengers using the Salina Municipal Airport.
Airport Capital Improvement Program
In cooperation with the FAA, a multi-year airport capital improvement program was prepared. The
2007 to 20 II plan will guide the use offederal Airport Improvement Program grant funds for
ongoing improvements at the Salina Municipal Airport. The plan details over $15 million in
necessary improvements. Federal AlP grant funds will fund an estimated $14 million of the total
cost over the five-year planning period.
Since calendar year 2002, the SAA has completed $8.3 million in airfield improvements and
equipment purchases using $7.3 million in FAA AlP grant funds. The SANs total local share for the
projects was $1.06 million.
SLN Aviation Service Center Development and Growth
A strategic plan for the SAN s marketing and recruiting program was successfully implemented.
Key steps were the contract with James Gregory as the SAN s aviation/aerospace industry recruiter
and the hiring of Laura Robertson as the SAN s marketing and public relations specialist.
Concept plans for the redevelopment of the 100-acre north ramp area were completed and the
feasibility of completing over 1.75 million square feet of new aviation and aerospace facilities is
possible.
Other significant SLN Aviation Service Center accomplishments include:
I. The completion and grand opening for the 5,000 sq. ft. Flower Aviation Customer
Service Center.
2. Approval of Hawker Beechcraft Corporation's lease extension for the Salina Division
buildings and property. HBC is now committed through February 28, 2012.
3. Completion of a lease with the State of Kansas for a portion of Hangar No. 509 for
storage and operations of the Kansas Highway Patrol aircraft at SLN.
4. Negotiations of Hangar No. 509 lease with AS & T for consolidated office, shipping, and
hangar space.
5. Completion of a Hangar No. 703 lease with for the start-up of an Schweizer helicopter
sales, maintenance and repair facility.
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INTRODUCTORY
Airport Industrial Center Operations, Maintenance and Development
Vortex Valves Facility Acquisition (3024 Arnold Avenue Building)
The purchase of the former Salina Vortex facility at 3024 Arnold Avenue was completed on
November 9,2006. This completed a multi-year process by the City, Airport Authority, and
Chamber to support Vortex's expansion into a new 120,000 sq. ft., state-of-the-art facility.
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The SAA and the Chamber actively marketed the existing 61,772 sq. ft. former Vortex
manufacturing facility during 2006 and the Kansas Military Board signed a lease that went into effect
July 1,2007.
Kansas National Guard Projects
Airport Authority staff have supported several Kansas Guard projects at the Salina Airport Industrial
Center. It is important to note that the Guard provides jobs for 80 people at its Airport Industrial
Center operation and facilities.
Completion of the lease for a 23.47-acre vehicle parking area has enabled the Guard to move in a
large inventory of trailers and equipment to rebuild at the Readiness Sustainment Maintenance Site
(RSMS).
The SAA contracted for and completed three significant RSMS site improvements. Beginning early
in 2007, the RSMS facility will be ready to begin full production work, which will result in hiring of
approximately 30-35 production workers.
2804 Arnold Avenue Acquisition
The purchase of a 13,460 sq. ft: warehouse/production facility added to a limited inventory of
available Airport Industrial Center buildings. Two potential tenants are currently considering the
building for new business ventures.
Kansas Highway Patrol Driver., Training Course
The SAA worked closely with the KHP and the Kansas Department of Transportation to rebuild the
KHP drivers training course located at the Airport Industrial Center. KDOT provided $442,970 to
fund the project:
Budget, Finance and Administration
2005 Audit and Comprehensive Annual Financial Report (CAFR)
The Airport Authority's external auditing firm conducted an audit and expressed an unqualified
opinion on the Authority's 2005 financial statements as presented in the 2005 Comprehensive
Annual Financial Report. No instances of noncompliance material to the financial statements of the
Airport Authority were disclosed during the audit:
2006 Economic Impact Report
Questionnaire responses were received from all Airport and Airport Industrial Center business and
organizations. The 100% response provides a clear assessment of items such as total number of
employees, total payroll, student activity, visitors and business volumes.
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INTRODUCTORY
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The data was analyzed by the Wichita State University Center for Economic Development and
Business Research. The completed 2006 Economic Impact report provides a comprehensive look at
the direct and indirect economic impacts of the Airport and Airport industrial Center on Salina and
Saline County. The full economic impact report can be found on the SANs website at
www.salinaairport.com.
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Governmental Legislative Affairs
North Central Kansas Radar
The NCK Radar project took another stride forward with a FY 07 Department of Defense
appropriation of$3.6 million. The FY 07 funding added to a FY 06 appropriation provides the U.S.
Army with a total of$6.9 million for design, construction and commissioning.
Special Projects and Events
Virgin Atlantic GlobalFlyer Launches
In February and March, the SAA supported two more successful world record setting GlobalFlyer
flights. During both flights, Salina again demonstrated that Steve Fossett made a good decision to
select the Salina Municipal Airport as home base for the GlobalFlyer. The worldwide media
exposure was unparallel. The most beneficial result has been increased interest by aviation and
aerospace firms in the SLN Aviation Service Center.
Military Training Deployments
The following deployments brought additional activity to the Salina Municipal Airport, Airport
Industrial Center and Salina's hotels, restaurants and shopping area.
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Kansas Air National Guard - Falcon Down exercise, March 4,2006, 137 participants.
U.S. Army, - 5th Army, San Antonio, TX, Vigilant Guard exercise, March 10-15,2006,68
military personnel.
U.S. Air Force - 439th Airlift Control Flight, Westover ARB, MA, Operational Readiness
Exercise, Patriot Panther, April 2-8, 2006, 60 military personnel, 20 civilian contract
personnel.
U.S. Navy, Chief of Naval Air Training (CNA TRA) Training Wing One, Meridian, MS T-
45 deployment, August 24 - 31, 2006, 21 military personnel, 31 civilian contract personnel.
U.S. Army-1st Infantry Division, 4th Brigade Special Troops Battalion, September 13-23,
2006, 25 military personnel.
U. S. Air Force Reserve, 757th Airlift Squadron, Youngstown, OR, Aerial spray and training
mission, October 21 - 29, 2006, 12 military personnel.
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General Aviation Events
The Salina Municipal Airport continues to host a variety of general aviation events that draw aircraft
and pilots to Salina from all parts of the country.
. Flying Dentist
. NIF A SAFECON Regionals
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INTRODUCTORY
UAS/FSS Symposium
In partnership with the Kansas National Guard and the Salina Area Chamber of Cornmerce the
Airport Authority hosted the first annual Salina Unmanned Aerial Systems Future Systems
Symposium. This event brought representatives of the unmanned aerial vehicle industry to Salina to
learn and exchange information.
The unmanned aerial vehicle industry is a targeted growth area for the SLN Aviation Service Center
and the symposium resulted in new contacts and prospect leads.
National and Regional Awards
The past year was noteworthy because of the national and regional awards. The recognitions are a
result of excellent staff performance and a continued desire to operate Airport and Airport Industrial
Center. The SAN s 2006 awards are:
I. 2006 FAA Willie F. Card Contract Tower Service A ward
2. 2006 FAA Central Region Airport Safety Enhancement A ward
3. .2006 National Society of Professional Engineers, Special Recognition
4. 2006 GFOA Certificate of Excellence for Financial RepOlting
Capital Financial Planninl!
Throughout the year, the Authority staff worked on the development of a five-year capital
improvement program. All projects included in the plan are designed to meet the objectives as set
forth in the Airport's 1991 Master Plan. A significant portion of the funding for the capital
improvement projects will come from the Authority's entitlement dollars under the Federal Aviation
Administration's (FAA) Airport Improvement Program. It is anticipated that the Federal share of the
identified projects range from 85% to 95% of the total project development cost. All projects under
this five-year capital improvement program are subject to FAA review and approval. A significant
capital planning tool is the Airport Layout Plan (ALP). During 2006, the Authority's ALP was
updated for planned and future improvements.
The effect any capital improvement program will have on future operating budgets is evaluated at the
time a specific project is authorized by the Authority and is undertaken on a cost-benefit analysis.
All current authorized capital projects scheduled for completion in 2007 have their projected
revenues and expenses incorporated into the Authority's 2007 operating budget.
FINANCIAL CONTROLS
The Authority follows generally accepted accounting principles applicable to governmental unit
enterprise funds. Accordingly, the financial statements are prepared on the accrual basis.
Management of the Authority is responsible for establishing and maintaining an internal control
structure designed to ensure that the assets of the Authority are protected from loss, theft, or misuse and
to ensure that adequate accounting data is compiled to allow for the preparation of financial statements
in conformity with generally accepted accounting principles. The internal control structure is designed
to provide reasonable, but not absolute, assurance that these objectives are met. The concept of
reasonable assurance recognizes that: (I) the cost of a control should not exceed the benefits likely to be
derived; and (2) the valuation of costs and benefits requires estimates and judgments by management.
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INTRODUCTORY
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An arumal budget is prepared in accordance with the Authority's By-laws. However, the Authority is
specifically exempt from the budget laws of the State of Kansas (K.S.A. 27-322) and the Authority is not
required to demonstrate statutory compliance with its annual operating budget. Accordingly, budgetary
data is not included in the accompanying financial statements.
CASH MANAGEMENT
All cash temporarily idle during 2006 was invested.by the Executive Director of the Authority in short-
term investments to attain the highest possible return consistent with the Authority's liquidity needs. All
investments are in compliance with'K.S.A. 12-1675 which controls the investment of public funds by
Kansas governmental units.
RISK MANAGEMENT
The Authority is exposed to risks of loss associated with the operation of a public use airport and the
operation of an airport industrial center. To handle the associated risks of loss, the Authority uses
available tort liability legislation and purchases the appropriate types of insurance coverage. It is the
policy of the Authority to eliminate or transfer risk ofloss where possible.
The Kansas Tort Claims Act (K.S.A. 75-6101 et seq.) generally limits tort liability for Kansas
governmental entities. The maximum liability for claims as specified by the Act is $500,000 for any
number of claims arising out of a single occurrence or accident. For wrongful acts, Kansas
governmental entities or their employees are exempted from liability.
The AuthOJity carnes $500,000 of comprehensive general liability insurance which matches the limit
established by the Kansas Tort Claims Act. During 2005 the Authority carned $22,927,501 of insurance
on airport commercial properties. The Authority also acquires constlUction builders' lisk policies for all
major constlUction projects or requires evidence of coverage from the contractor.
The Authority's commercial property insurance included $2,074,259 in loss of rents coverage. All
contractors and lessees are required to carry amounts of property insurance with limits and deductibles
approved by the Authority. A schedule of insurance in force at December 31, 2006 is included in. the
Supplemental Section of this report.
In addition, the Authority uses various risk management techniques. All contracts and leases are
reviewed by the Authority's legal counsel. All contractors and subcontractors are required to submit
evidence of insurance coverage naming the Salina Airport Authority and the City of Salina as named
additional insured.
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INTRODUCTORY
GFOA CERTIFICATE OF ACHIEVEMENT
The Govemment Finance Officers Association of the United States and Canada (GFOA) awarded a
Certificate of Achievement for Excellence in Financial Reporting to the Salina Airport Authority for its
comprehensive annual financial report for the fiscal year ended December 31, 2005. This was the
thirteenth consecutive year that the Salina Airport Authority has achieved this prestigious award. In
order to be awarded a Certificate of Acliievement, a government unit must publish an easily readable
and efficiently organized comprehensive annual financial report. This report must satisfY both generally
accepted accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our cun'ent
comprehensive annual financial report continues to meet the Certificate of Achievement Program's
requirements and we are submitting it to GFOA to determine its eligibility for another certificate.
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ACKNOWLEDGEMENTS
The suppmt of the Authority's Board of Directors has been instrumental in the preparation of this report.
The Board has been actively involved in the preparation and review of this report and is cmmnitted to
responsible and progressive financial reporting.
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Also acknowledged is the assistance of the Authority's auditor, Clubine and Rettele, Chattered, the
Authority's accounting advisors, Harrison & Amett, Chartered, Saline County Clerk's Office, Dennis
Lauver, President of the Salina Area Chamber of Commerce, Rod Franz, Director of Finance for the
City of Salina, the University of Kansas Institute for Public Policy and Business Research and the
Kansas Department of Human Resources Labor Market Information Services, in the preparation of this
repmt.
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Respectfully submitted,
M;~
Executive Director
Salina Airport Authority
ifhlJu1& t.cl0~
Michelle R. Swanson
Manager of Administration and Finance
Salina Airport Authority
cc: The City of Salina Board of Commissioners
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SALINA AIRPORT AUTHORITY
PRINCIPAL OFFICERS AS OF DECEMBER 31, 2006
BOARD OF DIRECTORS
Stephen C. Ryan
Eric R. Hardman
Robert H. Miller
Julie Sager Miller
Dr. Randy Hassler
Chairman
Vice-Chairman
Secretary
Treasurer
Past Chairman
AUTHORITY'S COUNSEL
Greg A. Bengtson
Clark, Mize & Linville, Chartered
Salina, Kansas
AUTHORITY'S BOND COUNSEL
Gilmore & Bell
Kansas City, Missouri
AUTHORITY'S FINANCIAL ADVISOR
George K. Baum & Company
Kansas City, Missouri
AUTHORITY'S AUDITOR
Leslie M. Corbett, C.P.A.
Clubine & Rettele, Chartered
Salina, Kansas
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SALINA AIRPORT AUTHORITY
Staff Members as of December 31, 2006
ADMINISTRATIVE STAFF
Timothy F. Rogers, AAE.
Michelle R. Swanson
Ryan E. Rocha, AAE.
Executive Director
Manager of Administration and Finance
Manager of Operations, Maintenance
and ARFF
Marketing and Public Relations Specialist
Manager of Special Projects
Administrative Assistant
Laura E. Robertson
Donald C. Kneubuhl
Kasey L. Fabrizius
OPERATIONS, MAINTENANCE, AIRCRAFT RESCUE & FIRE FIGHTING STAFF
Ron Boyd
Loren Carleton
Roger K. Colby
Gary Hansen
Dale Mattison
David Nease
Rob Pejsha
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SALINA AIRPORT AUTHORITY
Organizational Chart
December 31, 2006
CITIZENS OF SALINA
SALINA CITY COMMISSION
SAA BOARD OF DIRECTORS
Robert H. Miller
Dr. Randy Hassler
Stephen C. Ryan
Eric Hardman
Julie Sager Miller
3/1/01 - 2/28/07
3/1102 - 2/28108
3/1/03 - 2/28/09
3/1/05 - 2/28/08
3/1/06 - 2/28/09
MANAGER OF ADMINISTRATION & FINANCE
Michelle R. Swanson
MARKETING & PUBLIC RELATIONS SPECIALIST
Laura E. Robertson
ADMINISTRATIVE ASSIST ANT
Kasey L. Fabrizius
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INTERN
SUBSTITUE AA
Brenda Gutierrez
MANAGER OF OPERATIONS, MAINTENANCE & ARFF
R an E. Rocha A.A.E.
MANAGER OF SPECIAL PROJECTS
Donald C. Kneubuhl
.----,k--, .--Jx-,
~~
12
ARFF
R. Bovd
-------------------
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Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
Salina Airport Authority
Kansas
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
December 31,2005
A Certificate of Achievement for Excellence in Financial
Reporting is presented by the Government Finance Officers
Association of the United States and Canada to
government units and public employee retirement
systems whose comprehensive annual financial
reports (CAFRs) achieve the highest
standards in government accounting
and financial reporting.
President
~/~
Executive Director
13
SA LINAA irport
1l...Jl.ft..;.J.. , '
= ~"""f ~
.~~. ~
..~",.
~,I'~"",:f;i'--
I""
June 2006
AaLuuzA1~
~IJ'Airegrt
SALINAAI1/llfft
J~eede4++t
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Financial Section
.
.~~..
\ .
.?'J..'\
~
.
/e
.fIII
Aerospace Systems &
Technologies, Inc. is a
globally known company that
provides complete airframe
ice protection solutions. It
benefits from the many SLN
Aviation Service Center
development incentives.
..
".
joJ' _
il~
-.,-~
Vortex Valves moved into its new
120,000 square-foot facility. Vortex
has added 25 new positions
because of the move.
fI"'"
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! If.
~'(~4Il4il
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-
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CLUBlNE&
REITELE
OIARI'ERED
Crnifiexl Public Am"..""'"
v
Robert I. Clubine, C.P.A.
David A. Rettele, C.P.A.
Jay D. Langley, C.P.A.
Jon K. Beil, C.P.A.
Leslie M. Corbett, C.P.A.
Stacy J. Sokol, C.P.A.
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Marci K. Fox, C.P.A.
John T. Millikin, C.P.A.
Linda A. Suelter, C.P.A.
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218 South Santa Fe
P.O. Box 2267
Salina, Kansas
67402-2267
Salina
785 1 825-5479
Salina Fax
785 1 825-2446
Ellsworth
785/472-3915
Ellsworth Fax
785/472-5478
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
Salina Airport Authority
We have audited the accompanying basic financial statements of Salina Airport
Authority, a component unit ofthe City of Salina, Kansas, as of and for the years
ended December 3], 2006 and 2005, as listed in the table of contents. These
financial statements are the responsibility of the Authority's management. Our
responsibility is to express an opinion on these financial statements based on our
audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller General of
the United States and the Kansas Municipal Audit Guide, prescribed by the
Director of Accounts and Reports, Department of Administration of the State of
Kansas. 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 audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Salina Airport Authority, as of
December 3], 2006 and 2005, and the changes in financial position and cash flows
for the years then ended in conformity with accounting principles generally
accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report
dated July 26,2007, on our consideration ofSa]ina Airport Authority's internal
control over financial reporting and our tests of its compliance with certain
provisions oflaws, regulations, contracts, and grant agreements and other matters.
The purpose of that report is to describe the scope of our testing of internal control
over financial reporting and compliance and the results of that testing and not to
provide an opinion on the internal control over financial reporting or on
compliance. That report is an integra] part of an audit performed in accordance
with Government Auditing Standards and should be considered in conjunction with
this report in considering the results of our audit.
The management's discussion and analysis on pages ] 7 through 23 is not a required
part of the basic financial statements but is supplementary information required by
accounting principles generally accepted in the United States of America. 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.
]5
Our audit was conducted for the purpose of forming an opinion on the basic financial statements. The
Introductory Section and the accompanying schedules and additional information listed in the supplemental
information ofthe Financial Section and the Statistical Section of the table of contents are presented for
purposes of additional analysis and are not a required part of the basic financial statements of Salina Airport
Authority. The accompanying schedule of expenditures offederal awards is presented for purposes of
additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States,
Local Governments, and Non-Profit Organizations, and is not a required part of the basic financial statements.
Such information has been subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial
statements taken as a whole. The Introductory Section and the accompanying schedules and additional
information listed in the supplemental information of the Financial Section and the Statistical Section of the
table of contents have not been subjected to the auditing procedures applied in the audit of the basic financial
statements and, accordingly, we express no opinion on them.
CLUBINE AND RETTELE, CHARTERED
~~~Ov~R ~~
July 26, 2007
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FINANCIAL
MANAGEMENT'S DISCUSSION AND ANALYSIS
The Management of the Salina Airport Authority offers the readers of the Authority's financial statements
this narrative overview and analysis of the financial activities of the Salina Airport Authority for the fiscal
year ended December 31, 2006. We highly encourage readers to consider the information presented here
in conjunction with the information offered in the letter of transmittal within the Introductory Section of
this report.
AIRPORT ACTIVITY AND HIGHLIGHTS
The Salina Air Traffic Control Tower (A TCT) ended 2006 having handled 81,464 aircraft operations.
This represented a 6% decrease in total aircraft operations over the prior year and was, in large part,
attributable to a decrease in local traffic. On a positive note, there was a 4% increase in itinerant air taxi
flights. Over the past four years, the Airport has undergone significant airfield runway construction
projects requiring closures of major runways and taxiways. The highest year for the most recent 10-year
period was 2002 at 95,801 aircraft operations". Salina continues to remain strong as a mid-continent
refueling stop as is evident in the number of gallons of aviation fuel delivered by the two tenants of the
Authority specializing in the sale of aviation fuel.
The commercial airline industry continues to experience financial stress, especially for the carriers
attempting to serve rural communities such as Salina through the Department of Transportation's (DOT)
Essential Air Service Program. The Salina Municipal Airport continues to offer scheduled air service
provided by Air Midwest, a subsidiary of Mesa Air Group. Operating as USAirway Express, Air
Midwest continued to provide three daily flights to the Kansas City International Airport from Salina
during 2006. Since September 11,2001, enplanements from the Salina Municipal Airport have remained
in the range of 2,000 to 2,900 per year.
The changes in the Authority's major airport activity indicators for the past three years are as follows:
2006 2005 2004
Enplanernents - Scheduled Air Carrier 2,029 2,339 2,974
% increase / (decrease) -13.25% -21.4% 28.2%
Aircraft Operations - All Categories 81 ,464 86,292 81,465
% increase / (decrease) -5.59% 5.9% -5.5%
Fuel Flowage - (gallons delivered) 3,817,112 4,162,310 3,843,330
% increase / (decrease) -8.3% 8.3% -11.8%
Further airport activity data can be found in the Statistical Section of this report.
17
FINANCIAL
- -
AIRPORT INDUSTRIAL CENTER ACTIVITY AND HIGHLIGHTS
The Authority owns nearly 900,000 sq. ft. of manufacturing, warehouse and office space at the Airport
Industrial Center. As further described herein, the building revenue generated by the Authority's leasing
activity constitutes a significant portion of the annual operating revenue budget. During 2006, building
rents equaled $1,008,393 ()r 53.4% of operating revenue. At the end of 2006, the Authority had an
occupancy rate of over 95% in its building inventory.
SUMMARY OF OPERATIONS AND CHANGES IN NET ASSETS
Even with the uncertainty in the aviation industry and the slow growth in the economy, the financial
condition of the Authority has held steady in recent years. The Authority has effectively dealt with major
cost increases in employee health benefits including medical insurance premiums, utility costs,
commercial property insurance premiums and other operating expenses. Fortunately, with the diversified
revenue base, including building and land rental from the Authority's Industrial Center, total operating
revenue increased from 2005 to 2006.
Operating Revenues
Operating Expenses
2006
$1,886,813
(1,670,722)
2004
$ 1,412,120
(1,394,095)
2005
$ 1,857,370
(1,657,616)
Excess before Depreciation
and other non-operating
income and expenses
216,091
199,754
18,025
Depreciation
(1,580,750)
(1,392,316)
(1,151,664)
Excess (loss) before
other non-operating
income and expenses
(1,364,659)
(1,192,562)
(1,133,639)
Other Non-Operating Income
and (Expenses) net
832,986
801,924
814,744
Loss before
Capital Contributions
(531,673)
(390,638)
(318,895)
Capital Contributions
1,204,559
3,186,636
2,289,342
Increase in Net Assets
$ 672,886
$ 2,795,998
$ 1,970,447
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FINANCIAL
SUMMARY OF OPERATIONS HIGHLIGHTS
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Significant items effecting the Swnmal)' of Operations and Changes in Net Assets for 2006 are as follows:
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. Operating revenues have remained steady in prior recent years, however, 2005 and 2006 brought
about a significant)ncreases over prior years. 2005 and 2006 revenues increased 31.5% and
25% respectively over 2004 levels. Recent year increases in building rental revenue are
attributable to the leasing of industrial facilities and a professional office building that had been
vacant during 2004. Airfield revenue also increased during 2005 and 2006 due to an increase of
in fuel flowage fee revenue as a result of the significant Airport construction projects coming to an
end.
. Operating expenses increased by less than I % from 2005 to 2006.
. Operating expenses increased by over 18.9% from 2004 to 2005 due to the following:
o Utility costs increased by 41.1 % over the prior year due to increases in energy prices and
increased occupancy of the Authority's two large aircraft hangars.
o Increase in administrative expenses of 11.9% as a result of additional airport promotion
and special event expense as a result of the SLN Aviation Service Center promotion and
the Virgin Atlantic Globa1f1yer event.
o Building maintenance expense increased 67.3% or $23,233 as a result of increased
building and hangar occupancy.
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. Thenet result of the above was operating income before depreciation increased by $16,336 from
2005. Depreciation expense increased due to new construction moving from construction in
progress to an asset in service.
. Non-operating income and (expenses) remained steady with a decrease of3.9%. Ad-valorem tax
revenue (mill levy) received by the 'Authority as a local taxing entity increased by II % or
$125,813, interest received on investments and a financing lease increased by $30,849 or 26.1%
and interest expense increased $125,580 or by 33.5%, which was due to bond proceeds being on
hand during the year.
. Capital contributions received in the form of grants from the Federal Aviation Administration
totaled $1,204,559 for 2006 and $3,186,636 for 2005.
19
- -
FINANCIAL
- - - - -
FINANCIAL POSITION SUMMARY
The changes in net assets may serve over time as a useful indicator of a government's financial position.
The Authority's assets exceeded liabilities by $25,469,378 at the close of2006. A condensed summary of
the Authority's total net assets at December 31 is shown below.
2006 2005 2004
ASSETS
Current and other assets $ 2,684,720 $ 3,085,722 $ 5,091,812
Capital assets 35,703,273 32,941,504 27,968,139
Total assets 38,387,993 36,027,226 33,059,951
LIABILITIES
Long-term debt outstanding 10, 083,046 7,732,664 8,485,351
Other liabilities 2,835,568 3,498,069 2,574, I 05
Total liabilities 12,918,614 11,230,733 11,059,456
NET ASSETS:
Invested in capital assets, 24,442,779 23,223,073 18,468,297
net ofrelated debt
Restricted 85,000 85,000 85,000
Unrestricted 941,600 1,488,420 3,447,198
TOTAL NET ASSETS $ 25,469,379 $ 24,796,493 $ 22,000,495
By far the largest portion of the Authority's net assets (96%) reflects its investment in capital assets
including land, buildings, airfield infrastructure and machinery and equipment, less any related debt used
to acquire those assets that is still outstanding. The Authority uses these capital assets to provide services
to citizens; consequently, these assets are not available for future spending. Although the Authority's
investment in its capital assets is reported net of related debt, it should be noted that the resources needed
to repay this debt must be provided from other sources, since the capital assets themselves cannot be used
to liquidate these liabilities.
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FINANCIAL
REVENUES
The following chart shows the major sources and the percentage of total operating revenues for the year
ended December 31, 2006:
Gain on sale of
assets
1%
Other revenue
4%
Airfield
27%
Building and land
rent
68%
A summary of revenues for the past three years is shown below. Total revenue increased by 1.6% from
2005 to 2006 and 31.5% from 2004 to 2005. The increase is a result of increased building leasing activity
and the sale of available land for new development in the Airport Industrial Center.
2006 2005 2004
Operating Revenue:
Airfield $ 511,264 $ 497,487 $ 439,672
Building and land rent 1,294,166 1,106,146 890,631
Gain (loss) on sale of assets 10,777 204,083 59,943
Other revenue 70,605 49,654 21,874
Total Operating 1,886,812 1,857,370 1,412,120
Non-Operating Income:
Mill Levy 1,184,481 1,058,688 1,036,579
Interest Income 148,936 118,087 126,949
Total Non-Operating 1,333,417 1,176,775 1,163,528
TOTAL REVENUE $ 3,220,229 $ 3,034,145 $ 2,575,648
21
FINANCIAL
Further detail regarding the Authority's operating revenue can be found in the Supplemental Section of
this report.
EXPENSES
The following chart shows the major expense categories and the percentage of total operating expenses for
the year ended December 3], 2006:
Maintenance
37%
A summary of expenses for the past three years is shown below. Total expenses increased by less than
I % from 2005 to 2006 and 16.2% from 2004 to 2005. The significant contributors to the change included
increases in utility costs, equipment maintenance, fuel expense and special events.
2006 2005 2004
Operating Expenses
Administrative $ 1,043,176 $ ] ,039,270 $ 928,679
Maintenance 627,546 618,346 465,416
Total Operating ],670,722 ],657,6]6 ] ,394,095
Non-Operating Expense
Interest Expense 478,295 355,270 33],505
Amortization of bond costs 22,135 ]9,581 ]7,279
Total Non-Operating 500,430 374,85] 348,784
TOTAL EXPENSES $ 2,]7],152 $ 2,032,467 $ ],742,879
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FINANCIAL
Further detail regarding the Authority's operating expenses can be found in the Supplemental Section of
this report.
CAPITAL ACQUISITIONS AND CONSTRUCTION ACTIVITIES
The Authority expended $4,342,519 on capital activities during 2006. The most significant item was the
acquisition of two industrial center facilities increasing total leaseable square footage by over 73,000.
Other major capital improvements included finalizing the construction of a new customer service center
for one of the Airport's fixed based operators, the completion of the rehabilitation of the Airport's
crosswind runway and remodeling of a large bay hangar leased for aircraft modification.
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Capital asset acquisitions exceeding $1,000 are capitalized at cost and are depreciated over their useful
lives, with the exception of land. The Authority's capital assets are financed using Federal and State
grants with matching Authority funds, debt issuance and Authority revenues. Additional information on
the Authority's capital assets can be found in Note III (D) in the notes to the financial statements and
within the Supplemental Section of this report.
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DEBT ADMINISTRATION
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The outstanding long-term debt of the Authority was $10,083,046 at December 31,2006. This debt
consists of general obligation bonds, a leasehold revenue bond, a HUD Community Development Block
Grant loan, a financing lease and City of Salina special assessments. Maturities range from 2006 through
2020. Both principal and interest are payable from proceeds of a direct financing lease, the general
revenues of the Authority and mill levy revenue. The Authority issued $2,925,000 in general obligation
temporary notes and entered into a finance lease in the amount of $425,000 during 2006. Details of the
Authority's debt can be found in Note III (E) in the notes to the financial statements and within the
Supplemental Section.
REQUEST FOR INFORMATION
This comprehensive annual financial report is designed to provide detailed information on the Authority's
operations and the financial results of those operations to all those with an interest in the Authority's
financial affairs. Questions concerning any of the information provided in this report or requests for
additional information should be addressed to the Manager of Administration and Finance bye-mail:
shellis@salair.orgorin writing to, Salina Airport Authority, 3237 Arnold Ave., Salina, KS67401.
t~;,y ~b","cr\
-}, .
Timothy . ROg~
Executive Director
mduffi t O~
Michelle R. Swanson
Manager of Administration and Finance
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FINANCIAL
SALINA AIRPORT AUTHORITY
ST A TEMENTS OF NET ASSETS
ASSETS December 31
2006 2005
CURRENT ASSETS
Cash $ 550,254 $ 786,238
Accounts receivable 159,713 265,850
Prepaid expenses 8,293 3,109
Taxes receivable 1,207,650 1,158,150
Total Current Assets 1,925,910 2,213,347
NONCURRENT ASSETS
Capital assets
Land
Buildings, improvements and equipment,
net of depreciation
Construction in progress
Total Capital Assets
9,060,306 8,847,886
25,536,279 23,340,758
], I 06,688 752,860
35,703,273 32,941,504
679,257 783,710
79,553 88,665
36,462,083 33,813,879
$38,387,993 $36,027 ,226
Net investment in finance lease
Bond issue costs, less accumulated amortization
of $203,298 and $181,162 respectively
Total Noncurrent Assets
TOTAL ASSETS
(continued)
See notes to financial statements.
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FINANCIAL
SALINA AIRP10RT AUTHORITY
STATEMENTS OF NET ASSETS
,
(continued)
LIABILITIES AND NET ASSETS
December 31
2006
2005
CURRENT LIABILITIES:
Accounts payable-operations
Accounts payable-capital purchases
Accrued payroll and expenses
Accrued property tax
Accrued special assesments
Deferred tax revenue
Deferred maintenance agreement
Deferred agricultural land reserve
Unearned rental income
Accrued interest
Unearned interest - financing lease
Current maturities of long-term debt
Total Current Liabilities
LONG-TERM LIABILITIES
Bonds and note payable, less current maturities
10,083,046
7,732,664
Total Liabilities
12,918,614
11,230,733
NET ASSETS
Invested in capital assets, net of related debt
Restricted, bond reserve funds
Unrestricted
24,442,779 23,223,073
85,000 85,000
941,600 1,488,420
25,469,379 24,796,493
$38,387,993 $36,027,226
Total Net Assets
TOTAL LIABILITIES AND NET ASSETS
See notes to financial statements.
25
FINANCIAL
SALINA AIRPORT AUTHORITY
STATEMENTS OF REVENUES, EXPENSES
AND CHANGES IN NET ASSETS
January I to December 31
2006 2005
OPERATING REVENUES
Airfield
Building and land rent
Gain on sale of assets
Other revenue
$ 511,264 $ 497,487
1,294,166 1,106,146
10,777 204,083
70,605 49,654
1,886,812 1,857,370
Total Operating Revenues
OPERATING EXPENSES
Administrative
Maintenance
OPERATING INCOME BEFORE DEPRECIATION
1,043,176 1,039,270
627,546 61 8,346
1,670,722 1,657,616
216,090 199,754
1:580,750 1,392,316
(1,364,660) (1,192,562)
Total Operating Expenses
DEPRECIATION
OPERATING LOSS
NON-OPERATING INCOME AND (EXPENSES)
Mill levy
Interest on investInents and financing lease
Interest expense
LOSS BEFORE CAPITAL CONTRIBUTIONS
1,184,481 1,058,688
148,936 118,087
(500,431) (374,851)
832,986 80 1,924
(531,674) (390,638)
1,204,559 3,186,636
Total Non-Operating Income and (Expenses)
CAPITAL CONTRIBUTIONS
NET ASSETS
Increase in Net Assets
672,885
2,795,998
TOTAL NET ASSETS, beginning of year
24,796,493
22,000,495
TOTAL NET ASSETS, end of year
$25,469,378
$24,796,493
See notes to financial statements. _
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, FINANCIAL
SALINA AIRPORT AUTHORITY
STATEMENTS OF CASH FLOWS
(DIRECT METHOD)
Januarv I to December 31
2006 2005
$ 1,993,164
(552,966)
(1,087,149)
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CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from providing services .
Cash paid to employees for services
Cash paid to suppliers for goods and services
$ 2,107,817
(504,691)
(1,157,454)
445,672
(5,948,674)
(1,350)
3,186,636
1,058,688
(4,388,400)
3,635,000
96,320
93,126
(22,183)
(356,080)
(2,646,917)
25,463
(2,175,782)
2,962,020
$ 786,238
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CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES
Acquisition and construction of property, plant ~nd equipment (5,130,780)
Purchases in satisfaction of maintenance agreenlent (15,143)
Proceeds from capital grants 1,204,559
Proceeds from property tax 1,184,481
Principal payments on debt (1,019,673)
Proceeds of new borrowing 3,350,000
Principal received on financing lease 104,453
Interest received on financing lease 84,993
Bond issue costs paid (13,024)
Interest paid on long-term debt (407,795)
Net Cash Provided in Operating Activities
353,049
Net Cash Used in Capital and Related
Financing Activities
(657,929)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received on deposits
68,896
DECREASE IN CASH
(235,984)
786,238
CASH BALANCE - January 1
CASH BALANCE - December 3 I
$ 550,254
(continued)
See notes to financial statements.
27
FINANCIAL
SALINA AIRPORT AUTHORITY
STATEMENTS OF CASH FLOWS
(DIRECT METHOD)
(continued)
RECONCILIATION OF OPERATING LOSS TO NET
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES
January 1 to December 31
2006 2005
OPERATING LOSS
$( I ,364,660)
$( 1,192,562)
ADJUSTMENTS RECONCILING OPERATING LOSS
TO NET CASH PROVIDED BY OPERATING ACTIVITIES:
Depreciation
Basis of assets sold
1,580,750
1,392,316
436,847
CHANGES IN ASSETS AND LIABILITIES:
Decrease (increase) in accounts receivable
Increase (decrease) in accounts payable - operations
Increase in accrued payroll expenses
Decrease (increase) in prepaid expense
Increase (decrease) in accrued property tax and special assessments
Increase (decrease) in unearned rental income
106,137 (158,797)
32,656 (2,037)
1,551 14,788
(5,184) 946
1,584 (18,226)
215 (27,603)
$ 353,049 $ 445,672
NET CASH PROVIDED BY OPERATING ACTIVITIES
The Authority capitalized interest in the amount of $0 and $15,395 in 2006 and 2005 respectively.
See notes to financial statements.
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Salina Airport Authority
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
I.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity
The Salina Airport Authority was established by the City of Salina, pursuant to Chapter 27, Article 3,
of the Kansas Statutes Annotated for the purpose of acquiring surplus federal government property,
specifically the Schilling Air Force Base, located near the City of Salina. The Authority administers
the airport commercial development and rental of associated real estate. The Authority is controlled
by a five-member Board of Directors appointed by the Salina City Commission and, in accordance
with Governmental Accounting Standards Board (GASB) Statement No. 14, the Authority is
considered to be a component unit of the City of Salina. The Authority is discreetly presented in the
City's comprehensive annual financial reports.
B. Measurement Focus, Basis of Accounting and Basis of Presentation
The Authority consists of an enterprise fund. Enterprise funds are classified as proprietary funds by
the GASB and are accounted for using a total economic resource measurement focus. The enterprise
fund is used to account for operations that are financed and operated in a manner similar to private
business enterprises. The intent of the Authority is that the costs of providing services on a
continuing basis be recovered through user fees and rents. The financial statements are prepared on
the accrual basis of accounting. Under the accrual basis, revenues are recognized as earned and
expenses as incurred. It is the Authority's policy to follow all Financial Accounting Standards Board
(FASB) standards issued after November 30, 1989, for its proprietaty activities unless those new
F ASB pronouncements conflict with GASB guidance.
The Authority has implemented the new financial reporting model as required by the provisions of
GASB Statement No. 34, Basic Financial Statements and Management's Discussion and Analysis for
State and Local Governments, as of December 31,2003.
Revenues from airlines, fuel flowage fees, building and land rents, rental car commissions and the
sale of assets, related to economic development, are reported as operating revenues. Transactions,
which are capital, financing or investing related, are reported as non-operating revenues. All
expenses related to operating the Airport and Industrial Center are reported as operating expenses.
Interest expense and financing costs are reported as non-operating expenses.
C. Assets, Liabilities and Equity
I. Cash and Investments
The Authority's cash and cash equivalents are considered to be cash on hand, demand deposits and
short-term investments with original maturities of three months or less from date of acquisition. The
Authority held no investments during these years.
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, FINANCIAL
- - ~ - -
2. Receivables
Accounts Receivable. The Authority records revenues when services are provided. All receivables
are shown net of an allowance for uncollectibles.
Property taxes receivable. The determination of assessed valuations and the collections of property
taxes for all political subdivisions in the State,ofKansas is the responsibility of the various counties.
The office of the County Appraiser annually determines assessed valuations and the County Clerk
spreads the annual assessment on the tax rolls. The County Treasurer is the tax collection agent for
all taxing entities within the county. In accordance with state statutes, property taxes are levied
November I of the current year and are a revenue source to be used to finance the budget of the
ensuing year. One-half of the property taxes are due December 20, prior to the fiscal year for which
they are budgeted, and the second half is due the following May 10.
Collection of current year property tax by the County Treasurer is not completed, apportioned nor
distributed to the various subdivisions until the succeeding year, such procedure being in conformity
with governing state statutes. Consequently, current year property taxes receivable are not available
as a resource that can be used to finance the current year operations of the Authority. It is the
Authority's practice to record uncollected current year property tax as an account receivable and to
record the same amount as deferred revenue. It is not practicable to apportion delinquent taxes held
by the County Treasurer and, further, the amounts thereof are not material in relationship to the
financial statements taken as a whole.
3. Inventories
The Authority maintains no significant inventory of office and maintenance supplies. These items
are expensed as purchased and no inventory is recorded in these financial statements.
4. Prepaid items
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as
prepaid items.
5. Restricted Assets
Certain proceeds of leasehold revenue bonds are classified as restricted assets on the Statement of
Net Assets because their use is limited by applicable bond covenants.
6. Capital Contributions and Net Assets
Certain expenditures for airport capital improvements are significantly funded through the Federal
Aviation Administration's Airport Improvement Program (AlP), with certain matching funds of the
Authority. Capital funding provided under the AlP grant program is considered earned as the related
allowable expenditures are incurred. Grants received under the AlP program are reported in the
Statement of Revenues, Expenses and Changes in Net Assets, as non-operating revenues and
expenses as capital contributions.
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FINANCIAL
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7. Capital Assets
Capital assets purchased or constmcted are re~orded at cost. The cost of normal maintenance and
repairs that do not add to the value of the assets or materially extend assets' lives are not included in
capital assets cost. Capital assets donated to the Authority are recorded at their estimated fair value
at the date of donation. Donated assets include propcrty and equipment transferred to the Authority
from the United States of America, Septembe,r 9, 1966 and recorded at fair value at that date. . The
Authority maintains a capitalization threshold of $1,000.
Capital assets are depreciated using the straight-line method over the following estimated useful
lives:
Assets
Buildings
Equipment
Vehicles
Airfield
Years
5 - 50
5-10
7-10
10-30
8. Compensated Absences
Substantially all full-time employees receive compensation for vacations, holidays, illness and
certain other qualifying absences. The number of days compensated for various categories of
absence is generally based on length of service. Liabilities relating to these absences are recognized
as incurred and included in accmed expenses. The amount accmed for such liabilities at December
31,2006 and 2005 was $33,041 and $31,202 respectively.
II.
STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
A. Cash-Basis Law (KSA IO-III3)
The Authority was in compliance with this law at all times during the year.
B. Depository Security (KSA 9-1402)
The Authority's funds were adequately secured at all times during the year.
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FINANCIAL
III.
DETAILED NOTES
A. Deposits
As of December 31, 2006 and 2005, the Authority had cash and cash equivalents as listed below:
December 31.
2006
2005
Cash Balances
Cash
Less undeposited & petty cash
Add uncleared checks
$ 550,254
(50)
48.736
$ 786,238
(120)
68.779
Bank Balance
598,940
854,897
Less FDIC Coverage
188.749
1324.0 I 0)
Balances Securable by Collateral
$ 410191
$ 530.887
Security Provided by Depositories
$4400 173
$2 7R7 818
The Authority did not have any activity in investment-type assets.
The Authority's policies relating to deposits and investments are governed by various Kansas
Statutes (KSA). Those statutes specify the type of deposits and investments as well as the securing
of those deposits and investments.
Interest rate risk -In accordance with Kansas Statute 12-1675, The Authority manages its exposure
to interest rate fluctuations by limiting all time investments to maturities of less than two years.
Credit risk - State law limits the amount of credit risk by restricting governments to specific
investment types as listed in KSA 12-1675. The Authority's policy is to place idle funds in
certificates of deposit, United States obligations. and the Kansas Municipal Investment Pool (KMIP).
The KMIP was rated AAAf/SI+ by Standard & Poor's as of March 15, 2004. The KMIP is
permitted to invest in fully collateralized certificates of deposit, certain obligations of the United
States, certain repurchase/reverse repurchase agreements, and other types of investments. Maturity
information released by the KMIP at September 30, 2005 showed that the investment pool consisted
of investment with a maturity date of 365 days or less.
Custodial credit risk - The Custodial credit risk for deposits is the risk that, in the event of the failure
of a depository financial institution, a government will not be able to' recover deposits or will not be
able to recover collateral securities that are in the possession of an outside party. The custodial credit
risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, a
government will not be able" to recover the value of investment or collateral securities that are in the
possession of an outside party. Kansas Statutes 9-1402 and 9-1405 require that governments obtain
security for all deposits. The Authority manages its custodial credit risk by requiring the financial
institutions to grant a security interest in securities held by third-party custodial banks. Monies in the
Kansas Municipal Investment Pool are not required to have pledged securities.
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Concentration of credit risk - This is the risk of loss attributed to the magnitude of a government's
investment in a single issuer. The Authority manages this risk by placing funds with financial
institutions only after contacting all eligible institutions in the taxing area and monies in the Kansas
Municipal Investment Pool are diverse according to the policies of the investment pool.
B. Receivables
Receivables as of year-end, including the applicable allowance for uncollectible accounts, are as
follows:
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FINANCIAL
D. Capital Assets
The following is a summary of the changes in capital assets during the current and preceding years,
Balance Balance
January I, December 31,
Capital Assets 2006 Additions Dispositions Reclassifv 2006
Non-Depreciable
Land $ 8,847,866 $ 2'12,421 $ $ $10,455,307
Construction in progress 752.860 1.008.506 (654.678) 1.1 06.688
Total Non-Depreciable 9.600.746 1.220.927 654.678 11.561.995
Depreciable
Buildings and improvements 10,568,346 2,766,777 623,550 12,563,673
Airfield and improvements 25,481,726 179,853 31,128 25,692,707
Equipment 2.744.243 174.962 (24.275) 2.894.930
Total Depreciable 38.794.315 3.121.592 (24.275) 654.678 41.1 51.3 10
Total Non-Depreciable &
Depreciable $48.395 061 $ 4 342 519 $ (24.275) $ $52 713.505
Accumulated depreciation
Buildings and improvements ( 3,689,833) (409,735) ( 4,099,569)
Airfield and improvements (10,612,338) (974,399) (11,586,736)
Equipment ( 1.151.385) (196.616) 24.275 ( 1.323.726)
Total Accumulated
Depreciation (]5.453.556) (1.580.750) 24.275 (17.010.031)
Total Capital Assets $32.941.504 $2 761 769 $ $ $35 703 273
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Balance Balance
January 1, December 31,
Capital Assets 2005 . Additions DisDositions Reclassifv 2005
Non-Depreciable
Land $ 9,156,559 $ 36,662 $(359,097) $ 13,762 $ 8,847,886
Construction in progress 426.405 584.890 (258.436) 752.860
Total Non-Depreciable 9.582.964 621.552 (359.097) (244.674) 9.600.746
Depreciable
Buildings and improvements 8,909,574 ] ,657,970 (122,537) 123,339 ] 0,568,346
Airfield and improvements 21,643,118 3,717,273 121,335 25,481,726
Equipment 2.250.730 807.605 (312.220) 2.746.114
Total Depreciable 32.803.422 6.180.977 (434.757) 244.674 38.794.315
Total Non-Depreciable &
Depreciable $42386386 $6.802 529 $(793.854) $ $48.395.061
Accumulated depreciation
Buildings and improvements (3,415,531 ) (324,167) 50,052 ( 3,689,833)
Airfield and improvements (9,709,161) (903,177) (10,6/2,338)
Equipment (1.293.555) (164.973) 306.955 ( l.l 5 1.385)
Total Accumulated
Depreciation (14.418.247) ( 1.392.316) 357.007 (15.453.556)
Total Capital Assets $27 968 139 $5410213 $ (436.847) $ $32941 504
E. Long-Term Liabilities
Following is a summary of changes in long-term liabilities during the current and preceding years.
Current
Balance Balance Maturities
January 1, December 31, December 31,
2006 Additions Reductions 2006 2006
Long-term Liabilities
General obligation bonds $8,220,000 $ $ (850,000) $ 7,370,000 $ 885,000
Revenue bonds 90,000 (90,000)
Financing lease payable 425,000 425,000 33,062
KDOCH loan payable 111,490 (55,191) 56,299 56,299
Special assesment debt 326,619 (24,482) 302,137 21,029
General obligation
temporary notes 2,925,000 2,925,000
Total Long-Term Liabilities $8,748,109 $ 3,350,000 $ (1,019,673) $ 11,078.436 $ 995,390
Current Maturities (1,015,445) (995,390)
Long Term Liability Net $7,732,664 $ 10,083,046
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Maturities
December 31,
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FINANCIAL
Balance
December 31,
2005
Balance
January 1,
2005
Reductions
2005
Additions
Long-term Liabilities
General obligation bonds $5,435,000
Revenue bonds 170,000
KDOCH loan payable 165,593
Special assesment debt 475,9\7
General obligation
temporary notes
Total Long-Term Liabilities
Current Maturities
$
8,220,000
90,000
111,490
326,619
$
850,000
90,0001
55,190
20,9691
$ (850,000)
(80,000)
(54,103)
(149,298)
$ 3,635,000
(3,255,000)
$ (4,388,401)
3,255,000
$9,501,510
(1,016,159)
$8,485,351
1,016,1591
$
8,748,109
(1,015,445)
7,732,664
$
$ 3,635,000
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The following is a detailed listing of the Authority's long-term debt including general obligation bonds, 1
revenue bond, loan payable and financing lease.
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Long Term Liability Net
Bonds
Outstandinl!
Original
Issue
Interest
Rates
General Obligation Bonds
General Obligation 1998, due 2008
General Obligation 1999-B, due 2010
General Obligation 200 I-A, due 2012
General Obligation 2002-A, due 2012
General Obligation 2005-A, due 2020
$ 880,000
250,000
925,000
1,680,000
3.635.000
8,220,000
4.05% to 5.50%
3.90% to 5.20%
4.45% to 5.60%
2.45% to 3.70%
4.75% to 5.25%
$4,440,000
555,000
1,385,000
2,635,000
3,635,000
General Obligation Temporary Notes
2006-1, due 2008
$2,925,000
$2,925,000
$ 850,000
425,000
$ 468,542
$ 565,235
5.875%
5.00% to 7.25%
6.609%
Leasehold revenue 1991, due 2006
Financing lease, December 2015
Kansas Department of Commerce
and Housing Loan, due 2007
Special assessment debt, due 2016
425,000
2.00%
3.79%
111,490
326,619
$8 748.1 09
Total
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Interest expense in 2006 is as follows:
General obligation bonds
Revenue bonds .
Loan (KDOCH)
Special assessment debt
Financing lease
Temporary note
$ 366,002
4,350
1,679
12,379
7,958
85.922
478.290
22.136
Add: Amortization of bonds costs
Total
$ 500426
In prior years, the Authority defeased certain general obligation bonds by placing funds in an irrevocable
trust to provide for all future debt service payments on the old bonds. Accordingly, the trust account
assets and the liability for the defeased bonds are not included in the Authority's financial statements.
On December 31,2005, $125,000 of bonds outstanding are considered defeased. As of December 31,
2006 there were no outstanding bonds considered defeased.
Annual debt service requirements to maturity for general obligation bonds to be paid with tax levies and
rental revenues:
Bonds Interest
Year Outstandinl! Due Total
2007 885,000 339,533 1,224,533
2008 905,000 304,716 1,209,716
2009 710,000 267,626 977,626
2010 750,000 236,158 986,158
2011 705,000 20 I ,559 906,559
2012-2016 1,930,000 616,336 2,546,336
2017-2020 1.485.000 190.150 1.675.150
$7 :no 000 $2 156 078 $9 526.D78
Annual debt service requirements for General Obligation Temporary Notes payable from general
obligation bonds:
Notes Interest
Year Outstandinl! Due Total
2008 $ 2.925 000 $ 257.766 $3.182 766
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Annual debt service requirements for Financing Lease payable rental revenues:
Principal Interest
~Year Due Due Total
2007 33,Oq2 25,410 58,472
2008 33,107 25,365 58,472
2009 35,331 23,141 58,472
2010 37,705 20,767 58,472
2011 40,237 18,234 58,472
2012-2016 254.558 46.803 301.361
$425 000 $159720 $584 720
Annual debt service requirements to maturity for Kansas Department of Commerce and Housing Loan to
be paid from rental revenues:
Year
Loan
PrinciDal
Interest
Due
Total
2007
$56.306
$57 ] 46
$846
Annual debt service requirement to maturity for Special Assessment Debt to be paid from rental revenue:
Loan Interest
Principal Due
Year
Total
2007
2008
2009
2010
2011
2012-2016
25,411
26,374
27,374
28,4]2
29,487
165.078
36,863
36,863
36,862
36,862
36,861
1843]3
11,452
10,489
9,488
8,450/
7,374
19.235
$302 136
$ 66488
$ 368 624
F. Capital Contributions and Net Assets
Since its inception, the Authority has received capital contributions through Federal and State grants as
follows:
Inception to
Date 2006 2005
Federal $ 20,702,646 $ 1,204,559 $ 3,186,636
State 515.610
Total $21.218.256 $ 1.204.559 $ 3.186636
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The Authority has designated $90,000 to be used as an insurance increase reserve or to accelerate future
debt service payments. As of December 31, 2006, the reserve had been funded but not used.
IV.
OTHER INFORMA nON
A. Defined Benefit Pension Plan
Plan description - The Authority participates in the Kansas Public Employees Retirement System
(KPERS). The plan is a cost-sharing multiple-employer defined benefit pension plan as provided by
Kansas statutes (KSA 74-4901 et seq). KPERS provides retirement benefits, life insurance, disability
income benefits and death benefits. Kansas law establishes and amends benefit provisions. KPERS
issues a publicly available financial report that includes financial statements and required supplementary
information. Those reports may be obtained by writing to KPERS (611 S. Kansas Avenue, Suite 100,
Topeka, Kansas 66603-3803) or by calling 1 (888) 275-5737
Funding policy - KSA 74-4919 establis~es the KPERS member-employee contribution rate at 4% of
covered salary. The employer collects and remits member-employee contributions according to the
provision of section 4 I 4(h) of the {ntenlal Revenue Code. State Jaw provides that the employer
contribution rates be determined annually:based on the results of an annual actuarial valuation. KPERS
is funded on an actuarial reserve basis. State law sets a limitation on annual increases in the employer
contribution rates. The KPERS employer rate established for calendar year 2005 was 4.01 % from
January I - June 30 and 4.21 % from Julyil - December 31. The Authority employer contributions to
KPERS for the years ending December 311, 2006, 2005 and 2004 were $24, I 04, $18,532, and $15,236
respectively, equal to the required contributions for each year.
B. Deferred Compensation Plan
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The Authority offers its employees a deferred compensation plan ("Plan") created in accordance with
Intemal Revenue Code Section 457. The Plan, available to all Authority employees, permits them to
defer a portion of their salary until fu~ure years. The deferred compensation is not available to
employees until tennination, retirement, ~eath, or unforeseeable emergency. Plan assets are transferred
to a plan agent in a custodial trust and are not available to the claims of the Authority's general creditors.
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e. Flexible Benefit Plan (I.R.e. Section 125).
The Authority has adopted by resolution a salary-reduction flexible benefit plan ("Plan") under Section
125 of the {ntemal Revenue Code. All Authority employees working more than 20 hours per week are
eligible to participate in the Plan beginning after thirty days of employment. Each participant may elect
to reduce his or her salary to purchase benefits offered through the Plan. Benefits offered through the
Plan include various insurance and disability benefits.
D. Risk Management
The Authority is exposed to various levels ofloss related to torts; theft of, damage to, and destruction of
assets; errors and omissions; injuries to employees; and natural disasters.
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There has been no significant reduction in the Authority's insurance coverage from the previous year. In I
addition, there have not been settlements in excess of the Authority's coverage in any of the prior three
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E. Contingent Liabilities
The Authority receives significant financial assistance from numerous federal and state governmental I
agencies in the form of grants and state pass-through aid. The disbursement of funds received under
these programs generally requires compliance with terms and conditions specified in the grant
agreements and is subject to audit. Any disallowed claims resulting from such audits could become a I
liability of the Authority. However, in the opinion of management, any such disallowed claims would
not have a material effect on any of the financial statements of the Authority at December 31,2006.
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F.
Environmental Matter
The U.S. Government Department of Defense transferred property located at the former Schilling Air
Force Base to the Authority September 9, \966. The property is now known to contain areas of
extensive soil and groundwater contamination, primarily from the use and disposal of chlorinated
solvents and petroleum products caused by activities at the former base during its period of active
military duty from 1942 to 1965.
G. Rental Income Under Operating Leases
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The U.S. Government Depal1ment of Defense is responsible for the investigation and remediation of
contamination caused by military activities at current and former military bases. The U.S. Almy Corps
of Engineers is the lead agency for the Dep311ment at formerly used defense sites. The Corps is currently
investigating contamination at the former base under the regulatory oversight of the U.S. Environmental
Protection Agency and the Kansas Department of Health and Environment. The former base is not
designated as a National Priority List Superfund site, but investigation and remediation is required to be
in compliance with the Comprehensive Environmental Response, Compensation and Liability Act.
Potential liability for contamination under the Act extends broadly to parties associated with the release
or presence of hazardous substances, including not only those entities involved with contaminant use and
disposal, but in some cases other current and former owners and operators of contaminated sites. As a
current owner of extensive amounts of property at the former base, the Authority is potentially liable
under the act.
The Authority has determined that while a possible liability exists, it is not probable and at this time no
reasonable estimate of the possible liability can be made. Therefore, no liability relating to that matter
has been recorded. The Authority is under no administrative orders from the U.S. Environmental
Protection Agency or the Kansas Department of Health and Environment. The Authority is considered
to be a Potentially Responsible Party for the former base site, primarily due to its status as a property
owner.
A significant portion of the operating revenue of the Authority is generated through the leasing of
airport and building space to airport fixed base operators and others on a fixed fee as well as a contingent
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rental basis. Ownership risks are retained by the Authority, and accordingly, such leases are treated as
operating leases.
The following is a schedule of minimum future rentals on non-cancellable operating leases to be received
in each of the next five years and thereafter:
Years Ended
December 31
2007
2008
2009
20]0
2011
Later years
$1,073,873
927,446
778,822
725,3] 6
827,478
2.274.731
$6.607.666
Total
H. Major Customers
The Authority receives significant operating and financing lease revenue ii'om Hawker Beechcraft
Corporation, Kansas State University-Salina, Flower Aviation, America Jet, the Schwan Food Company,
and Kansas Almy National Guard. Rent fi-om these six tenants equals 63% of operating and capital lease
revenue for the year ended December 31, 2006.
I. Non-Operating Income and (Expense)
Net non-operating income and expense consisted of the following for the years ended December 31,
2006 and 2005:
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J. Commitment Under Operating Lease
The Authority has entered into certain non-cancellable operating lease agreements which will expire in
2008, for the rental of office equipment. Minimum rentals, on an annual basis are as follows:
Years Ended
December 31
2006
2007
2008
$ 6,180
5,578
2,9]8
$ 14 676
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Supplemental Information
--
'~
Jim Turner
In February and March, the Airport Authority supported two more successful
world record setting Virgin Atlantic Globa/Flyer flights. During both flights,
Salina again demonstrated that Steve Fossett made a good decision to select
the Salina Municipal Airport as home base for the Virgin Atlantic GlobalFlyer.
The SLN Aviation Service Center benefited from worldwide media exposure.
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43
I SUPPLEMENTAL
SALINA AIRPORT AUTHORITY
SCHEDULES OF REVENUES, EXPENSES AND CHANGES
IN NET ASSETS
January I to December 31
2006 2005
OPERATING REVENUES
Airfield
Fuel flowage fees
Hangar rent
Landing fees
Ramp rent
Total Airfield
$ 259,981
168,034
5,358
64,114
497,487
$ 247,740
192,220
5,290
66,014
511,264
Building and land rent
Agri land rent
Building rents
Land rents
Tank rent
Total Building and Land Rents
48,409 51,588
1,008,393 858, I 06
227,475 187,332
9,891 9,120
1,294,168 1,106,146
10,777 204,083
10,900 14,425
14,512 13,321
45,192 21,908
70,604 49,654
1,886,813 1,857,370
Gain on sale of assets
Other revenue
ARFF training
Commissions
Other income
Total Other Revenue
Total Operating Revenue
(continued)
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SUPPLEMENTAL
SALINA AIRPORT AUTHORITY
SCHEDULES OF REVENUES, EXPENSES AND CHANGES
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IN NET ASSETS
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January I to December 31
2006 2005
OPERATING EXPENSES
Administrative
NE, consultants, brokers
Airport promotion
Computer network administration
Dues and subscriptions
Employee retirement
FICA and medicare
Industrial development
Insurance, property
Insurance, medical
Kansas unemployment tax
Legal and accounting
Office salaries
Office supplies
Other administrative
Postage
Property appraisals
Property taxes
Special events
Telephone
Travel and meetings
32,156
42,648
12,388
19,323
32,906
39,334
20,000
139,232
135,574
543
42,072
299,872
11,863
12,182
4,827
13,950
22,234
9,532
16,347
37,532
36,345
20,000
137,494
116,724
623
44,557
268,263
13,300
15,133
4,850
1,200
126,408
120,300
11,033
23,445
138,583
20,244
10,279
29,150
Total Administrative Expenses
1,039,270
1,043,176
~ .
(continued)
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SALINA AIRPORT AUTHORITY
SCHEDULES OF REVENUES, EXPENSES AND CHANGES
IN NET ASSETS
( continued)
MAINTENANCE EXPENSES
Airfield maintenance
Airport security
Building maintenance
Equipment fuel and repairs
Fire services
Grounds maintenance
Maintenance salaries
Other maintenance expenses
Snow removal expense
Utilities
January 1 to December 3 I
2006 2005
33,964 16,885
9,896 . 5,770
66,215 57,457
56,382 57,732
19,032 15,247
1,817 8,555
254,644 251,216
17,407 23,683
32,788 26,819
135,401 154,982
627,546 618,346
1,670,722 1,657,616
216,091 199,754
1,580,750 1,392,316
(1,364,659) (1,192,562)
1,184,481 1,058,688
80,040 92,624
68,896 25,463
(478,295) (355,270)
(22,136) (19,581)
832,986 801,924
(531,673) (390,638)
1,204,559 3,186,636
672,886 2,795,998
24,796,493 22,000,495
$25,469,379 $24,796,493
Total Maintenance Expenses
Total Operating Expenses
OPERATING INCOME BEFORE DEPRECIATION
DEPRECIATION EXPENSE
OPERATING LOSS
NON-OPERATING INCOME (EXPENSE)
Mill levy
Interest income-capital lease
Interest income
Interest expense
Amortization of bond costs
Net Non-Operating Income
LOSS BEFORE CAPITAL CONTRIBUTION
CAPn AL CONTRIBUTIONS
INCREASE IN RETAINED EARNINGS
NET ASSETS, January I
NET ASSETS, December 31
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, SUPPLEMENTAL
SALINA AIRPORT AUTHORITY
CAPITAL EXPENDITURES
AIRPORT IMPROVEMENTS
Airfield drainage way improvements
Shoulder rehabilitation north of Taxiway Echo
Perimeter fencing & gate imp.
Pavement rehabilitation-Taxiway A,B & E
Perimeter gate access control system
Airport Industrial Center drainage way imps
Grading, compaction & paving access road
KHP-Driver Training Course AlE design
Total Airport Improvements
BUILDINGS
Sanitary sewer service line Bldg. 1021
Gutter additions Bldg. 1021
Roofrehabilitation, Bldg. 1021
Sewer drain line replacement, Bldg. 1021
Acquisition Bldg. 217
5-ton Carrier Bldg. 394 HV AC
Polyeurethane Floor Sealant-Hangar 504
Electical Service & new circultry-D hangars
New HV AC air compressor Bldg. 122
Refurbish HV AC Hgr. 409-2
4-ton HV AC heat pump & HV A, Bldg. 520-1
Acquistion Bldg. 412
Water proof metal roofs-D hangars
Water proof metal roofs- A & B hangars
Water service line replacements
Water service line replac.t-hgr 506-1 & 506-2
Water service line-replacement-Airport Rd. N.
Water proof metal roof Hangar 409
Flagpole @ FBO terminal
2 trane gas furnaces Hangar 409
Design Flower Aviation, Bldg. 700
Flower aviation construction, Bldg. 700
Flower aviation site improvements, Bldg. 700
Hertz rent counter remodel, Bldg 120-unit 3
Total Buildings
(continued)
January I to December 31
2006
52,810
12,119
20,420
33,615
17 ,806
10,504
21,302
11,276
179,852
1,440
2,390
40,595
5,222
1,803,080
3,882
4,320
1,840
5,227
1,014
2,648
457,545
15,423
58,172
19,424
3,655
2,900
50,450
1,959
3,889
1,985
96,801
174,698
8,215
2,766,776
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SALINA AIRPORT AUTHORITY
CAPITAL EXPENDITURES
(continued)
CONSTRUCTION IN PROGRESS
AIP-23-12/30 Rehab Design
AIP-25 Rwy 12/30 Rehabilitation
AIP-27 Taxiway Alpha
NCK Radar project development
North ramp redevelopment conceptual design
Executive hangar design
Hangar # 509 Improvements
Terminal bldg. remodel design
Environmental
SPCC/SWPP
Environmental-Other
Foreign Trade Zone
Hein avenue water system design
Total Construction in Progress
EQUIPMENT
Pumphouse 305 emerg. shutoff system
Cathodic protection system, Pumphouse 305
Pump house 305-fuel flow monitors
Pump house 305-12 machanical seals for vertical pumps
Pumphouse 305 tank tightness testing
Pumphouse 305-fuel flow meters
Communications equipment - 12 passenger van
Terminal bldg wireless internet system
Hp- Business notebook pc
HP-Desktop-PC
2 Land Pride rotary 15' deck mowers
Marketing & public relations office furniture
1985-Ford deicing truck
Wire mesh security cage
Torque hub for 1991 Grove manlife
2 Graco paint sprayer bead systems
Communications equipment tower
2006 Chevy 12-passenger van
Total Equipment
(continued)
January I to December 31
2006
20,849
483,852
139
5,146
82,334
1,656
313,770
3,000
80,373
190
692
8,295
8,208
1,008,506
4,760
1,382
3,216
31,128
2,700
10,814
2,862
1,779
1,567
1,253
23,200
2,120
50,042
3,235
2,718
2,641
5,545
24,000
174,963
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SALINA AIRPORT AUTHORITY
CAPn AL EXPENDITURES
(continued)
January I to December 3 ]
2006
LAND
Land
Land
Preliminary platting AIC SUB Unit No.2
123,000
82,000
7,421
Total Land
212,421
TOTAL CAPITAL EXPENDITURES
$ 4,342,5] 9
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I SUPPLEMENTAL
Date of issue:
Amount of issue:
Interest rate:
Maurity date:
Principal paid:
Outstanding balance:
SALINA AIRPORT AUTHORITY
GENERAL OBLIGATION BONDS
SERIES 1998 - A
December 31, 2006
June 29, 1998
$4,440,000
4.05% to 5.50%
September 1, 2008
$3,260,000
$ 880,000
Schedule of Bond Interest and Princioal Payments
Due in Bond Bond
Year Interest Princioal
2007 $ 38,060 $ 440,000
2008 19,140 440,000
$ 57,200 $ 880,000
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, SUPPLEMENTAL
Date of isue:
Amount of issue:
Interest rate:
Maturity date:
Principal paid:
Outstanding balance:
SALINA AIRPORT AUTHORITY
GENERAL OBLIGATION REFUNDING BONDS
SERIES 1999 - B
December 31, 2006
June 29, 1999
$ 555,000
3.90% to 5.20%
September I, 20 I 0
$ 305,000
$ 250,000
Schedule of Bond Interest and PrinciDal Payments
Due in Bond Bond
Year Interest PrinciDal
2007 $ 12,623 $ 55,000
2008 9,955 60,000
2009 6,955 65,000
2010 3,640 70,000
$ 33,173 $ 250,000
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: SUPPLEMENTAL
Date of issue:
Amount of issue:
Interest rate:
Maturity date:
Principal paid:
Outstanding balance:
SALINA AIRPORT AUTHORITY
GENERAL OBLIGATION IMPROVEMENT BONDS
SERIES 2001 -A
December 31, 2006
October 31, 200 I
$ 1,385,000
4.45% to 5.60%
September I, 2012
$ 460,000
$ 925,000
Schedule of Bond Interest and Principal Payments
Due in Bond Bond
Year . Interest Principal
2007 $ 48,660 $ 135,000
2008 42,316 140,000
2009 35,316 150,000
2010 27,514 160,000
2011 18,867 165,000
2012 9,800 175,000
$182,473 $ 925,000
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, SUPPLEllfENTAL
Date of issue:
Amount of issue:
Interest rate:
Maturity date:
Principal paid:
Outstanding balance:
SALINA AIRPORT AUTHORITY
GENERAL OBLIGATION IMPROVEMENT BONDS
SERIES 2002 - A
December 31,2006
August 29, 2002
$ 2,635,000
2.45% to 3.70%
September 1,2012
$ 955,000
$ 1,680,000
Schedule of Bond Interest and Principal Payments
. Due in Bond Bond
Year Interest Principal
2007 $ 55,515 $ 255,000
2008 48,630 265,000
2009 40,680 275,000
2010 31,880 285,000
2011 21,905 295,000
2012 11,285 305,000
$209,895 $ 1,680,000
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SUPPLEMENTAL
Date of issue:
Amount of issue:
Interest rate:
Maturity date:
Principal paid:
Outstanding balance:
SALINA AIRPORT AUTHORITY
GENERAL OBLIGATION IMPROVEMENT BONDS
SERIES 2005 - A
December 31, 2006
August 1,2005
$ 3,635,000
4.75% to 5.25%
September 1,2020
$
$ 3,635,000
Schedule of Bond Interest and Princioal Payments
Due in Bond Bond
Year Interest Principal
2007 $ 184,675 $
2008 184,675
2009 184,675 220,000
2010 173,124 235,000
2011 160,787 245,000
2012 147,926 260,000
2013-2020 637,475 2,675,000
$ 1,673,337 $ 3,635,000
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: SUPPLEMENTAL
SALINA AIRPORT AUTHORITY
TAXABLE GENERAL OBLIGATION TEMPORARY NOTES
SERlES 2006-1
December 31, 2006
Date of issue:
Amount of issue:
Interest rate:
Maturity rate:
Principal paid:
Outstanding balance:
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Schedule of Bond lnthest and Princioal Payments
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Due in
Year
Bond
Interest
2008
$257,766
$257,766
July I, 2006
$ 2,925,000
.5.875%
January I, 2008
$
$ 2,925,000
Bond
Princioal
$ 2,925,000
$ 2,925,000
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SUPPLEMENTAL
SALINA AIRPORT AUTHORITY
KANSAS DEPARTMENT OF COMMERCE AND HOUSING, LOAN PAYABLE
December 31 , 2006
Date of loan:
Amount ofloan:
Interest rate:
Maturity date:
Principal paid:
Outstanding balance:
Schedule of Loan Interest and Princioal Payments
Due in
Year
2007
Loan
Interest
$ 846
$ 846
October I, 1997
$ 468,542
2%
October 1,2007
$ 412,242
$ 56,300
Loan
Princioal
$ 56,300
$ 56,300
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. SUPPLEMENTAL
SALINA AIRPORT AUTHORITY
SPECIAL ASSESSMENT DEBT-STREET AND UTILITY IMPROVEMENT
December 31,2006
Date of loan:
Amount of loan:
Interest rate:
Maturity date:
Principal paid:
Outstanding balance:
September 1 I, 2002
$ 565,235
3.79%
October I, 2016
$ 263,099
$ 302,136
Schedule of Loan Interest and Princioal Payments
Due in Loan Loan
Year Interest Princioal
2007 $ 11,452 $ 25,411
2008 10,489 26,274
2009 9,488 27,374
2010 8,450 29,412
2011 7,374 29,487
2012-2017 19,235 164,178
$ 66,488 $ 302,136
57
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Date ofloan:
Amount ofloan:
Interest rate:
Maturity date:
Principal paid:
Outstanding balance:
SALINA AIRPORT AUTHORITY
FINANCING LEASE PAYABLE
December 31, 2006
September 28, 2006
$ 425,000
6.607%
September I, 2016
$
$ 425,000
Schedule of Loan Interest and PrinciDa1 Payments
Due in Loan Loan
Year Interest PrinciDal
2007 $ 25,410 $ 33,062
2008 25,365 33,107
2009 23,141 35,331
2010 20,767 37,705
2011 18,234 40,238
2012-2016 46,803 245,557
$ 159,720 $ 425,000
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I Employers Insurance of Wausau
on behalfofUSAIG
I Pol. #WCC-Z91-547496-016
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, _ SUPPLEMENTAL
Insurance Policv
National Union Fire Ins. Co. of
Pittsburgh, P A
Pol. #AP3229456-12
Chubb Group of Insurance Companies
Pol. 3581-68-04 KCO
Pol. #(06) 7353-33-80
Pol. #3581-68-04 KCO
ITT Hartford
Pol. #37BPEAG4896
Arch Specialty Insurance Company
Pol. 12POF52070-00
Great American Alliance Ins. Co.
Pol. # KST 788-29-33-]2
I Arch Specialty Insurance Company
Pol. #12LEL50088-00
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SALINA AIRPORT AUTHORlTY
INSURANCE IN FORCE
December 3], 2006
Tvpe of Coveral!e
Amount of
Coverage
Workmen's Compensation
and Employer's Liability
$
500,000
Bodily Injury & Liability
Hangar Keepers
$ 1,000,000
$ 500,000
Deluxe Property-Buildings, business personal
property and equipment breakdown (including
boiler and machinery)
Business Income
$22,927 ,50 I
$ 2,074,259
Vehicles & Equipment
Liability $ 1,000,000
Medical payments $ 5,000
Uninsured motorists $ 1,000,000
Inland Marine - Equipment $ 1,994,141
Crime Policy
Employee theli - per employee $ 100,000
Public Officials and Employment Practices Liability
Each wrongful act $
Aggregate limit $
] ,000,000
1,000,000
Kansas Underground Storage Tank Liability
Environmental Incident
Annual aggregate
Limit of defense
$ 1,000,000
$ ] ,000,000
$ 100,000
Law Enforcement Professional Liability
Each occurrence
Annual aggregate
$ 1,000,000
$ 1,000,000
59
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(THIS PAGE INTENTIONALLY LEFT BLANK)
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I The first
annual
I Unmanned
Aerial
Systems
I Symposium
was hosted
I by the Salina
Airport
Authority,
I Kansas
National
I Guard and
Salina Area
) Chamber of
I Commerce.
Statistical Section
.a
~'
Several
military
deployments
at the Salina
Municipal
Airport and
Airport
Industrial
Center
brought
additional
activity to
Salina's
hotels,
restaurants
and shopping
areas.
--~,A'
--.~-.:;~
~~
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FINANCIAL
. -
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STATISTICAL
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Total Annual Revenues, Expenses and Changes in Net Assets History ...............................62-63
Change in Cash and Cash Equivalents History..................................................................... 64-65
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General Obligation Debt Service Coverage.......................................................................... 66
Capital Expenditure History ... ..................... .............. ......... ............................................ ...... 67
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Revenue Bond Coverage...................................................................................................... 68
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Principal Customers.............................................................................................................. 69
Local Government Mill Levy Rates, Direct and Overlapping.............................................. 70
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Mill Levy Revenue ................... ................... .................. .................... ................................... 71
Air Traffic, Fuel Flowage, and Enplanement Trends ...........................................................72
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Maj or Employers.................................................................................................................. 73
Saline County Population, Demographic and Labor Statistics .......
.....74
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Saline County Employment Data ....................................................
".....75
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/SaJ;.. M~
SfJ/A;regrt
SA LINAA irport
1/..11._.,1..
--....,
SA LINAA7PIf!J
J..JudtiaJ e...t.. -+-+t 61
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STATISTICAL
SALINA AIRPORT AUTHORITY
TOTAL ANNUAL REVENUES, EXPENSES AND CHANGES IN NET ASSETS
FOR YEARS ENDED DECEMBER 31,
1997 1998 1999
TOTAL REVENUES
OPERATING REVENUES
Airfield 8,503 8,784 10,660
Fixed base operator fees 193,501 178,814 234,338
Building and land rent 1,067,236 1,154,716 1,202,149
Gain (loss) on sale of assets 69,663
Other revenue 29,393 22,128 26,965
TOTAL OPERATING REVENUES 1,368,296 1,364,442 1,474,112
TOTAL EXPENSES
OPERATING EXPENSES
Administrative 568,606 631,073 726,651
Maintenance 367,530 377,551 377,457
TOTAL OPERATING EXPENSES 936,136 1,008,624 1,104,108
OPERATING INCOME BEFORE DEPRECIATION 432,160 355,818 370,004
DEPRECIATION 825,528 89\,612 925,397
OPERATING LOSS (393,368) (535,794) (555,393)
NON-OPERATING INCOME AND (EXPENSES)
Mill levy 338,058 322,270 783,363
Interest on investments and financing lease 233,802 245,473 158,858
Interest expense (257,601) (207,130) (369,561)
TOTAL NON-OPERATING INCOME AND (EXPENSES) 314,259 360,613 572,660
LOSS BEFORE CAPITAL CONTRIBUTIONS (79,109) (175,181) 17,267
CAPITAL CONTRIBUTIONS 549,667 576,421 595,779
NET ASSETS
Increase in Net Assets 470,558 401,240 613,046
TOTAL NET ASSETS, beginning of year 7,811,967 8,282,525 8,683,765
TOTAL NET ASSETS, end of year $8,282,525 $8,683,765 $9,296,811
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STA TISTICAL
SALINA AIRPORT AUTHORITY
TOTAL ANNUAL REVENUES, EXPENSES AND CHANGES IN NET ASSETS
FOR YEARS ENDED DECEMBER 31,
2000 2001 2002 2003 2004 2005 2006
12,133 7,250 4,514 447,842 439,672 497,487 511,264
263,264 252,942 278,948
1,121,194 1,111,662 1,034,989 916,585 890,631 1,106,146 1,294,166
222,664 86,719 29,455 (6,631) 59,943 204,083 10,777
25,992 33,162 39,173 29,501 21,874 49,654 70,605
1,645,247 1,491,735 1,387,079 1,387,297 1,412,120 1,857,370 1,886,812
740,530 754,003 751,734 825,064 928,769 1,039,270 1,043,176
386,095 448,189 430,530 475,204 465,326 618,346 627,546
1,126,625 1,202,192 1,182,264 1,300,268 1,394,095 1,657,616 1,670,722
518,622 289,543 204,815 87,029 18,025 199,754 216,090
906,198 934,270 974,140 1,022,474 1,151,664 1,392,316 1,580,750
(387,576) (644,727) (769,325) (935,445) (1,133,639) (1,192,562) (1,364,660)
I
801,237 795,404 817,499 987,970 1,036,579 1,058,688 1,184,481
163,512 145,447 147,763 128,640 126,949 118,087 148,936
(276,092) (249,959) (319,167) (344,353) (348,784) (374,851) (500,431 )
688,657 690,892 646,095 772,257 814,744 801,924 832,986
301,081 46,165 (123,230) (163,188) (318,895) (390,638) (531,674)
583,134 583,135 582,523 434,763 2,289,342 3,186,636 1,204,559
884,215 629,300 459,293 271,575 1,970,447 2,795,998 672,885
9,296,811 10,181,026 10,810,326 19,758,473 20,030,048 22,000,495 24,796,493
$10,181,026 $10,810,326 $11,269,619 $20,030,048 $22,000,495 $ 24,796,493 $25,469,378
63
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1999
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STATISTICAL
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:
Acquisition and construction of property, plant and equipment (2,744,209) (6,113,475)
Purchases in satisfaction of maintenance agreement
Proceeds from capital grants
Return of capital grant proceeds
Proceeds from property tax
Principal payments on debt
Proceeds of new borrowing
Principal received on financing lease
Interest received on financing lease
Principal received on long-term note
Principal received on refunding debt
Bond defeasance and issue costs paid
Interest paid on long-term bonds
Interest paid on long-term debt
NET CASH PROVIDED (USED) IN CAPITAL AND
RELATED FINANCING ACTIVITIES
SALINA AIRPORT AUTHORITY
CHANGES IN CASH AND CASH EQUIVALENTS
FOR YEARS ENDED DECEMBER 31,
CASH FLOWS FROM OPERATING ACTIVITES
Cash received from providing services
Cash paid to employees for services
Cash paid to suppliers for goods and services
NET CASH PROVIDED IN OPERATING ACTIVITIES
$1,476,264
(351,848)
(571,752)
552,664
1,640,967
1998
$1,374,185
(351,206)
(653,805)
369,174
1,447,768
338,058 322,270
(860,000) (3,092,067)
618,793
129,541
2,830,000
(3,271)
(210,830)
54,661
137,104
4,860,850
(38,666)
(156,973)
$1,386,088
(420,315)
(635,344)
330,429
(1,460,223)
97,971
(11,131)
783,363
(1,983,013 )
59,263
130,184
94,760
1,280,000
(14,219)
(400,040)
1,739,049
b
CASH FLOWS FROM INVESTING ACTIVITES;
Interest received on deposits
. (l~<1I^ \ [C,1\
NET INCREASE (DECREASE) tf\ . vcr' .i,.
rt-J.
CASH AND CASH EQUIVALENTS, beginning of year
930,062
93,123
2,384,836
(2,578,528) (1,423,085)
113,145
32,628
(2,096,209) (1,060,028)
3,314,898 1,218,689
CASH AND CASH EQUIVALENTS, end of year
$3,314,898 $1,218,689 $ 158,661
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STATISTICAL
SALINA AIRPORT AUTHORITY
CHANGES IN CASH AND CASH EQUIVALENTS
FOR YEARS ENDED DECEMBER 31,
2000 2001 2002 2003 2004 2005 2006
$ 2,997,537 $1,668,782 $1,503,652 $1,374,310 $1,459,696 $2,107,817 $1,993,164
(443,968) (463,501) (450,013) (462,822) (472,178) (504,691) (552,966)
(699,812) (750,913) (748,272) (837,530) (871,435) (1,157,454) (l,087,149)
1,853,757 454,368 305,367 73,958 116,083 445,672 353,049
(720,694) (571,068) (2,176,229) (2,319,249) (4,126,043) (5,948,674) (5,130,780)
(19,095) (9,736) (5,863) (l,350) . (15,143)
144,005 434,763 2,289,342 3,186,636 1,204,559
801,237 795,403 817,499 987,970 1,036,579 1,058,688 1,184,481
(1,408,978) (674,963) (694,761) (1,046,750) (988,922) (4,388,400) (1,019,673)
1,385,000 3,200,235 3,255,000 3,635,000 3,350,000
64,255 69,668 75,541 81,911 88,823 96,320 104,453
125,190 119,778 113,905 107,535 100,623 93,126 84,993
(29,745)
(290,972)
(21,266)
(221,762)
( 13,024)
(26,119)
(262,795)
(6,147) (22,183)
(1,459,707)
(338,703 )
,
1,172,186 (2,102~259)
(657,929)
(294,691) (356,080)
(407,795)
880,790
1,348,701 (2,646,917)
44,049
30,740
30,921
25,475
28,960
25,463
68,896
438,099 1,365,898 1,508,474 (2,002,826) 1,493,744 (2,175,782) (235,984)
158,631
596,730 1,962,628 3,471,102 1,468,276 2,962,020
786,238
$ 596,730 $1,962,628 $3,471,102 $1,468,276 $2,962,020 $ 786,238 $ 550,254
65
Salina Airport Authority
GENERAL OBLIGATION DEBT SERVICE COVERAGE
Ten Years Ended December 31,2006
Fiscal November IVlotor V chicle Valuation Capacity General Obligation Remaining
~ Assessed Valuation Valuatioll Total (3% of Valnation Total) Debt CaDacitv
1997 236,595,408 43,994,555 280,589,963 8,417,699 4,725,000 3,692,699
1998 253,933,365 44,924,849 298,858,214 8,965,746 6,170,000 2,795,746
1999 269,116,350 45,371,433 314,487,783 9,434,633 5,570,000 3,864,633
2000 288,150,096 43,246,020 331,396,116 9,941,883 4,270,000 5,671,883 .
2001 301,014,666 43,248,108 344,262,774 10,327,883 5,090,000 .5,237,883
2002 317,134,605 45,965,839 363,100,444 10,893,013 7,160,000 3,733,013
2003 328,593,726 46,679,292 375,273,018 11,258,191 6,265,000 4,993,191
2004 335,262,182 48,687,121 383,949,303 11,518,479 8,690,000 2,828,479
2005 352,823,785 49,367,870 402,191,655 12,065,750 8,220,000 3,845,750
2006 377,917,187 50,551,299 428,468,486 12,854,055 10,295,000 2,559,055
'"
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Salina Airport Authority
CAPITAL EXPENDITURE HISTORY
Ten Years Ended December 31. 2006
Construction Total
Fiscal Building in Capital
Year EQuipment Additions Land Infrastructure Airfield Prol!ress Expenditures
]997 $40,572 $229,999 $]] ],993 $324,802 $2,079,840 $2,787,206
1998 $53,972 $266,894 $4,622,240 $1,]67,88] $6,] 10,987
1999 $25,908 $490,557 $132,948 $642.1] ] $97.328 $] ,388,852
2000 $43,]08 $372,277 $226,193 $152]5 $93,548 $750,34]
2001 $49,520 $172,295 $202.248 $\44249 $568,3\2
2002 $125,3]8 $],067,221 $616,474 $9,385 $392,8] 6 $2,21 ],2]4
2003 $474,200 $\23,113 $33,792 $\ ,420,280 $232,048 $2,283,433
2004 $189,300 $9] 7,709 $44,289 $2,656,039 $410,807 $4,2]8,144
2005 $807,605 $] ,656,099 $36,662 $3,7] 7,273 $584,890 $6,802,529
2006 $174,963 $2,766,776 $212,42] $] 79,853 $] ,008,506 $4,342,5] 9
Source: Salina Airport Authority Records
'"
-.J
STATISTICAL
Salina Airport Authority
REVENUE BOND COVERAGE
Ten Years Ended December 31, 2006
Fiscal Pledged Revenue Bond
Year Revenue Debt Service Coveral!e
1997 $189,446 $]68,962 1.12
1998 $189,446 $163,938 1.16
1999 $189,446 $] 63,841 1.16
2000 $189,446 $185,013 1.02
2001 $189,446 $164,420 1.15
2002 $189,446 $158,320 1.20
2003 $189,446 $151,923 1.25
2004 $189.446 $150,283 1.26
2005 $189,446 $148,158 1.28
2006 $189,446 $140,557 1.35
Notes:
I. During 1999, the Series 1990-B Bonds were refinanced to remove IRS restrictions and
achieve an interest rate savings.
Source: Salina Airport Authority Records
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STATISTICAL
Salina Airport Authority
Principal Customers
Year Ended December 31, 2006
Company
Revenue
Kansas Military Board - KS Army National Guard
Hawker Beechcraft Corp.
Kansas State University-Salina
Flower Aviation
JRM Enterprises, Inc, d/b/a America Jet
Schwan's Global Supply Chain, Inc.
Two Rivers Vending Co.,lnc.
Geocore Services
Aerospace Systems & Technologies, Inc. (AS&T)
Byquist, Eileen
Builders Choice Concrete
AFK Properties, Inc.
Federal Aviation Administration
Smith, Bill
Ballard Aviation d/b/a EagleMed
Blue Beacon International
Triangle Trucking
Kejr, Joe
Professional Flight Training, LC
Hertz Corporation
Waddle's Manufacturing & Machine
United Suppliers, Inc.
Laas, Brent and Mark
Bostater Realty, Inc.
AcuStep, Inc.
Salina Auto Auction
Palmer Trucking Co.,
ALLTEL Newco No.4 LLC
$ 374,597
241,572
234,634
199,456
156,354
85,734
51,660
37,920
34,355
31,917
30,812
27 ,209
24,909
22,949
22,800
19,159
19,054
17,947
17,021
16,694
16,500
15,984
13,430
13,322
13,200
12,456
12,300
12,060
% of Operating & Direct Finance Lease
Revenue
18.14%
II. 70%
11.36%
9.66%
7.57%
4.15%
2.50%
1.84%
1.66%
1.55%
1.49%
1.32%
1.21%
l.ll%
l.l 0%
0.93%
0.92%
0.87%
0.82%
0.81%
0.80%
0.77%
0.65%
0.64%
0.64%
0.60%
0.60%
0.58%
Total Operating Lease and Direct Finance Lease Revenue for 2006 was $2,065,481
Source: Salina Airport Authority Records
69
Salina Airport Authority
LOCAL GOVERNMENT MILL LEVY RATES, DIRECT AND OVERLAPPING
Ten Years Ended December 31,2006
Other
Unified Salina State Special
Fiscal Saline City of School Airport of Taxing
Year County Salina Dist. #305 Authoritv Kansas Districts Total
1997 18.141 25.705 39.529 1.129 1.5 5.804 91.808
1998 20.488 25.270 36.840 2.950 1.5 5.419 92.467
1999 23.187 24.876 56321 2.653 1.5 5.419 113.828
2000 22.337 24.365 58.524 2.426 1.5 5.183 114.335
2001 24.066 24.218 68.178 2.424 1.5 5.406 125.792
2002 25.657 24.092 57.384 2.806 1.5 5.378 116.817
2003 28.081 24.013 56.632 2.795 1.5 5.553 118.574
2004 28.874 24.063 59.666 2.795 1.5 6.689 ] 23.587
2005 28.579 23.999 55.182 2.941 1.5 6.519 118.720
2006 27.955 23.789 55.252 2.877 1.5 6.350 117.722
Note:
Funds generated from the Salina Airport Autholity's 2006 mil11evy become available dming calendar year 2007 and are budgeted accordingly.
Source: Saline County Clerk
-.]
o
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STATISTICAL
Salina Airport Authority
MILL LEVY REVENUE
Ten Years Ended December 31, 2006
Mil Levy
Fiscal Year Revenue
1997 $ 338,058
1998 $ 322,270
1999 $ 783,363
2000 $ 801,237
2001 $ 795,404
2002 $ 817,499
2003 $ 987,970
2004 $ 1,036,579
2005 $ 1,058,688
2006 $ 1,184,481
Source: Salina Airpon Authority Records
71
STATISTICAL
Salina Airport Authority
AIR TRAFFIC, FUEL FLOWAGE AND ENPLANEMENT TRENDS
Ten Years Ended December 31, 2006
Scheduled
Fiscal Air Traffic Fuel Flowage Air Service
Year Operations Gallons Enplanements
1997 68,822 3,577,650 9,153
1998 80,338 3,603,673 12,909
1999 90,400 3,808,886 13,436
2000 87,709 4,472,164 10,270
2001 92,870 4,396,429 6,507
2002 95,801 4,695,093 2,565
2003 86,214 4,358,563 2,319
2004 81,465 3,843,330 2,974
2005 86,292 4,162,887 2,339
2006 81,464 3,817,112 2,029
Note:
One air traffic operation equals one aircraft takeoff and landing
Source: Salina Airport Authority Records
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STATISTICAL
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Salina Airport Authority
MAJOR EMPLOYERS IN THE SALINA/SALINE COUNTY AREA
December 31, 2006
I
Maior Private Emplovers
I
Approx. #
Emplovees
Companv
I
Schwan's Global Supply Chain, Inc.
Salina Reg. Med. Center
Exide Corporation
Great Plains Manufacturing
Philips Lighting
Solomon Corp.
Asurion
Raytheon Aircraft Co.
. Eldorado National, Inc.
Wal-Mart
Crestwood Cabinets, Inc.
OCCK
Advance Auto/Parts America
KASNKASA Fab
Lowe's Home Improvement
Exline
Salina Journal
Sunflower Bank
Premier Pneumatics
Blue Beacon Int'l
PKM Steel
1,850
1,000
750
850
490
320
420
350
311
258
211
131
200
154
1i5
160
108
198
89
104
114
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Maior Public Emplovers
Approx. #
Emplovees
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Public Orl!anizations
Unified School District #305
City of Salina
Saline County
US Postal Service
Kansas State University - Salina
1,448
480
263
125
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Source: Salina Area Chamber of Commerce
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Type of
Business
Frozen Foods Manufacturer
Health Care
Battery Manufacturing
Farm Implements & Landscaping Equipment
Fluorescent Lamp Manufacture
Electrical Equipment
Cell Phone Insurance
Aircraft Sub-assemblies Manuf.
Medium & Small Shuttle Buses
Retail
Custom Made Cabinets
Plastic products, Subcontracting
Warehouse Distribution
Electronic Controls & Steel Fabrication
Home Improvement Retail
Structural steel fabrication
Newspaper Publishing
Bank
Pneumatic Convey Equipment
Truck Wash
Steel Fabrication
Tvpe of Public Bodv
School System
City Government
County Government
Postal Service
Engineering Technology & Aviation Technology
73
STATISTICAL
Salina Airport Authority
SALINE COUNTY POPULATION, DEMOGRAPHIC AND LABOR STATISTICS
Year Population
1997 53,168 C/)
]998 53,182 "tl
c:
1999 53,485 ..
C/)
2000' 53,597 ::0
0
2001 53,804 ..c:
I-
2002 53,933
2003 53,743
2004 53,903
2005 53,919
2006 54,170
Saline County Population
~u~~~
B' 2>'" ~oS>.J r:,<5 r:," r:,'\, r:,":> ~ r:,~ r:,'"
,,"5 ,,"5 "J '\,<:5 '\,<:5 '\,<:5 ~ '\,<:5 '\,<:5 '\,<:5
Year
Note: * Indicates decennial census 100% population counts. Other counts are population estimates.
Demo2raphics
Median Age (2000)
Housing Units (2004)
Median Household Income (2003)
Per Capita Income (2003)
Employment and Civilian Labor Force
Year
Civilian Labor
Force
]996
1997
]998
1999
2000
200]
2002
2003
2004
2005
29,966
30,178
30,420
30,904
29,119
30,072
30,255
30,735
30,800
31,293
36.1
23,240
$38,206
$27,579
Employed
28,800
29,082
29,365
30,142
28,206
28,953
29,015
29,321
29,312
29,925
(Annual Average)
Unemployed
Employment and Civilian Labor Force
],]66
1,096
1,055
762
913
1,119
1,240
1,414
1,488
1,368
~~:ggg~......... .. .............
30,000 . . ". .
29,000 . .,.. ~.
28,000 ~f
27,000 ~
26,000 '.
PJ'o PJ~ PJib PJO:I ~r;:, ~" S)'\. s:,":> S)'O< s:."
"Cl> "Cl> "C!) ,,~ ",liS ",(,'S ",liS ",liS ~ ",liS
Sauces: Sources: Institute for Public Policy and Business Research
U.S. Bureau of Labor Statistics
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STATISTICAL
Salina Airport Authority
SALINE COUNTY EMPLOYMENT DATA
Annual Averaee Unemnlovment - 1996-2005
Year
Unemployment
Rate
Unemployment
1996 1,166 3.90%
1997 1,096 3.60%
1998 1,055 3.50%
1999 762 2.50%
2000 913 3.10%
2001 1,119 3.70%
2002 1,240 4.10%
2003 1,414 4.60%
2004 1,488 4.80%
2005 1,368 4.40%
Saline County Unemployment Rate History
.-...........
4.00%
2.00%
0.00%
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
EmDlovmenl bv Industrv
2000
1990
Services
Retail Trade
Manufacturing
Government & GOV'! Services
Construction
Finance, Insurance, Real Estate
Wholesale Trade
Transportation
Farm
Ag. Services
Mining
(D)~suppressed to avoid disclosure
11,135
7,864
6,967
4,422
(D)
2,208
1,714
1,939
771
(D)
(D)
8,935
6,332
5,969
3,823
1,715
1,491
1,814
1,222
851
265
262
Kansas Department of Labor
University of Kansas, Salina/Saline County Profile Report
United States Census Bureau
75
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(THIS PAGE INTENTIONALLY LEFT BLANK)
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Compliance Section
2006 Awards:
2006 Federal Aviation Administration (FAA) Central Regional Airport
Safety Enhancement Award
2006 Federal Aviation Administration Willie F. Card Contract Tower
Service Award
2006 National Society of Professional Engineers, Special
Recognition
2006 Government Finance Officers Association (GFOA) Certificate
of Excellence in Financial Reporting
Bobby Sturgell (left), Deputy Administrator for the FAA, presented
the award to the Salina Municipal Airport's Air Traffic Control Tower
manager Bruce Boyle and Salina Airport Authority Executive Direc-
tor Tim Rogers, A.A.E. at the FAA Contract Tower Program Work-
shop in Washington D.C. on June 19, 2006.
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CLUBlNE&
RETIELE
CHARfERED
Certified Publk Aauunllll10
v
Robert 1. Clubine, C.P.A.
David A. Rettele. C.P.A.
Jay D. Langley, C.P.A.
Jon K. Bell, C.P.A.
Leslie M. Corbett, C.PA
Stacy J. Sokol, C.P.A.
Marci K. Fox, C.P.A.
John T. Millikin, C.P,A.
Linda A. Suelter, C.P.A.
218 South Santa Fe
P.O. Box 2267
Salina, Kansas
67402-2267
Salina
785 I 825-5479
Salina Fax
785 I 825-2446
Ellsworth
785/472-3915
Ellsworth Fax
785/472-5478
,
I
REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING AND ON COMPLIANCE AND OTHER MA TIERS
BASED ON AN AUDIT OF FINANCIAL STATEMENTS
PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
To the Board of Directors
Salina Airport Authority
We have audited the basic financial statements of Salina Airport Authority as of
and for the years ended December 31,2006 and 2005, and have issued our report
thereon dated July 26,2007. We conducted our audit in accordance with auditing
standards generally accepted in the United States of America and the standards
applicable to financial audits contained in Government Auditing Standards, issued
by the Comptroller General of the United States and the Kansas Municipal Audit
Guide, prescribed by the Director of Accounts and Reports, Department of
Administration of the State of Kansas.
Internal Control Over Financial Reporting
)
In planning and performing our audit, we considered Salina Airport Authority's
internal control over financial reporting as a basis for designing our auditing
procedures for the purpose of expressing our opinions on the financial statements,
but not for the purpose of expressing an opinion on the effectiveness of the Salina
Airport Authority's internal control over financial reporting. Accordingly, we do
not express an opinion on the effectiveness of Salina Airport Authority's internal
control over financial reporting.
A control deficiency exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned
functions, to prevent or detect misstatements on a timely basis. A significant
deficiency is a control deficiency, or combination of control deficiencies, that
adversely affects Salina Airport Authority's ability to initiate, authorize, record,
process or report financial data reliably in accordance with generally accepted
accounting principles such that there is more than a remote likelihood that a
misstatement of Salina Airport Authority's financial statements that is more than
inconsequential will not be prevented or detected by Salina Airport Authority's
internal control.
A material weakness is a significant deficiency, or combination of significant
deficiencies, that results in more than a remote likelihood that a material
misstatement of the financial statements will not be prevented or detected by Salina
Airport Authority's internal control.
77
Our consideration of internal control over financial reporting was for the limited purpose described in the first
paragraph of this section and would not necessarily identify all deficiencies in internal control that might be
significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over
financial reporting that we consider to be material weaknesses, as defined above.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether Salina Airport Authority's basic financial statements
are free of material misstatement, we performed tests of its compliance with certain provisions oflaws,
regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect
on the determination of financial statement amounts. However, providing an opinion on compliance with
those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The
results of our tests disclosed no instances of noncompliance that are required to be reported under Government
Auditing Standards.
We noted certain additional matters that we reported to the management of Salina Airport Authority in a
separate letter dated July 26, 2007
This report is intended solely for the information and use of the audit committee, management, others within
the organization, the City Commission and federal awarding agencies and pass-through entities and is not
intended to be and should not be used by anyone other than these specified parties.
CLUBINE AND RETTELE, CHARTERED
~,-"-\..."-""-L ~-fl \<"Ltt~0
July 26, 2007
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CLUBlNE&
RElTELE
CHARfERED
Crnified Public Aa:uun""'ts
v
Robert I. Clubine, C.PA
David A. Rettele, C.P.A.
Jay D. Langley, C.P.A.
Jon K. Bell, C.PA
Leslie M. Corbett, C.P.A.
Stacy J. Sokol, C.P.A.
Marci K: Fox, C.P.A.
John T. Millikin, C.PA
Linda A. Suelter, C.P.A.
218 South Santa Fe
P.O. Box 2267
Salina, Kansas
67402-2267
Salina
785/825-5479
Salina Fax
785 / 825-2446
Ellsworth
785/472-3915
Ellsworth Fax
785/472-5478
REPORT ON COMPLIANCE WITH REQUIREMENTS
APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL
CONTROL OVER COMPLIANCE IN ACCORDANCE
WITH OMB CIRCULAR A-133
To the Board of Directors
Salina Airport Authority
Compliance
We have audited the compliance of Salina Airport Authority, with the types of
compliance requirements described in the U. S. Office of Management and Budget
(OMB) Circular A-133 Compliance Supplement that are applicable to each of its
major federal programs for the year ended December 31, 2006. Salina Airport
Authority's major federal programs are identified in the summary of auditors'
results section of the accompanying schedule of findings and questioned costs.
Compliance with the requirements oflaws, regulations, contracts and grant
agreements applicable to each of its major federal programs is the responsibility of
Salina Airport Authority's management. Our responsibility is to express an opinion
on Salina Airport Authority's compliance based on our audit.
We conducted our audit of compliance in accordance with auditing standards
generally accepted in the United States of America; the standards applicable to
financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States; and OMB Circular A-133, Audits of
States, Local Governments, and Non-Profit Organizations. Those standards and
OMB Circular A-133 require that we plan and perform the audit to obtain
reasonable assurance about whether noncompliance with the types of compliance
requirements referred to above that could have a direct and material effect on a
major federal program occurred. An audit includes examining, on a test basis,
evidence about Salina Airport Authority's compliance with those requirements and
performing such other procedures as we considered necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion. Our audit
does not provide a legal determination on Salina Airport Authority's compliance
with those requirements.
In our opinion, Salina Airport Authority complied in all material respects, with the
requirements referred to above that are applicable to each of its major federal
programs for the year ended December 31, 2006.
Internal Control Over Compliance
The management of Salina Airport Authority is responsible for establishing and
maintaining effective internal control over compliance with requirements oflaws,
regulations, contracts and grants applicable to federal programs. In planning and.
performing our audit, we considered Salina Airport Authority's internal control
over compliance with requirements that could have a direct and material effect on a
major federal program in order to determine our auditing procedures for the
purpose of expressing our opinion on compliance but not for the purpose of
expressing an opinion on the effectiveness of internal control over compliance.
Accordingly, we do not express an opinion on the effectiveness of Salina Airport
Authority's internal control over compliance.
79
A control deficiency in an entity's internal control over compliance exists when the design or operation ofa
control does not allow management or employees, in the normal course of performing their assigned
functions, to prevent or detect noncompliance with a type of compliance requirement of a federal program on
a timely basis. A significant deficiency is a .control deficiency, or combination of control deficiencies, that
adversely affects the entity's ability to administer a federal program such that there is more than a remote
likelihood that noncompliance with a type of compliance requirement of a federal program that is more than
inconsequential will not be prevented or detected by the entity's internal control
A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more
than a remote likelihood that material noncompliance with a type of compliance requirement of a federal
program will not be prevented or detected by the entity's internal control.
Our consideration of internal control over compliance was for the limited purpose described in the first
paragraph ofthis section and would not necessarily identify all deficiencies in internal control that might be
significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over
compliance that we consider to be material weaknesses, as defined above.
This report is intended solely for the information and use of the audit committee, management, others within
the organization, the City Commission and federal awarding agencies and pass-through entities and is not
intended to be and should not be used by anyone other than these specified parties.
CLUBINE AND RETTELE, CHARTERED
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July 26, 2007
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SALINA AIRPORT AUTHORITY
Salina, Kansas
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Year Ended December 31, 2006
Federal Grantor / Pass-through Grantor /
Program or Cluster Title
Federal
CFDA
Number
U.S. Department of Transportation
Airport Improvement Program
20.106
Pass-through
Entity
Identifying
Number
N/A
See notes to the schedule of expenditures offederal awards.
Schedule I
Federal
Expenditures
$ 1,204,559
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SALINA AIRPORT AUTHORITY I
Salina, Kansas
NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS I
For the Year Ended December 31, 2006
Note 1 Basis of Presentation I
The accompanying schedule of expenditures of federal awards includes the federal grant activity of I
Salina Airport Authority and is presented on the accrual basis of accounting. The information in this
schedule is presented in accordance with the requirements ofOMB Circular A-133, Audits of States,
Local Governments, and Non-Profit Organizations. Therefore, some amounts presented in this I
schedule may differ from amounts presented in, or used in the preparation of, the basic financial
statements.
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SALINA AIRPORT AUTHORITY
Salina, Kansas
Schedule 2
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the Year Ended December 31, 2006
There are no prior audit findings.
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SALINA AIRPORT AUTHORITY
Salina, Kansas
Schedule 3
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
For the Year Ended December 31,2006
SUMMARY OF AUDIT RESULTS
I. The auditors' report expresses an unqualified opinion on the financial statements of Salina Airport
Authority.
2. No instances of noncompliance material to the financial statements of Salina Airport Authority were
disclosed during the audit.
3. The auditors' report on compliance for the major federal award programs for Salina Airport Authority
expresses an unqualified opinion on all major federal programs.
4. There were no audit findings relative to the major federal award programs for Salina Airport Authority.
5. The programs tested as major programs included:
20.106
Airport Improvement Program
6. The threshold for distinguishing Types A and B programs was $300,000.
7. The Salina Airport Authority was determined to be a low risk auditee.
FINDINGS - FINANCIAL STATEMENTS AUDIT
None.
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SALINA AIRPORT AUTHORITY
Salina, Kansas
Schedule 4
CORRECTIVE ACTION PLAN
For the Year Ended December 31, 2006
None required.
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/$a/iw:;, M~
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Salina Municipal Airport has four
runways: the primary at 12,300
feet, a 4,300 foot parallel runway
and the crosswind runways,
providing 6,500 feet and 3,648 feet
respectively. Over 1.2 million
square feet of aircraft parking
apron is available.
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SLN has a state-of-the-art air traffic control tower and modern navigational
aids that help safely guide 90,000 aircraft operations per year.