5.1 Intent Issue IRBCITY OF SALINA
REQUEST FOR COMMISSION ACTION
DATE
4/11/1988
TIME
4:00 P.M.
AGENDA SECTION: Public Hearings and Items ORIGINATING DEPARTMENT:
NO. 5 Scheduled for a Certain Time City Clerk
APPROVED FOR
AGENDA:
Robert K. Biles
BY: .~/<"-~
Public hearing on the possible issuance of $20,000,000 Industrial Revenue
Bonds for Beech Aircraft Corporation.
Recommended action
At the conclusion of the public hearing, if it is your desire, a motion should
be made to adopt Resolution Number 88-3970, expressing the intention of the
City of Salina, Kansas, to issue Industrial Revenue Bonds in the amount of not
to exceed $20,000,000 for the purpose of providing funds to pay the cost of the
construction, improvement and equipping of additions to an existing facility
and purchase machinery and equiPment to be located thereon for Beech
Aircraft Corporation.
COMMISSION ACTION
MOTION BY SECOND BY
r '
, ~J
, ;~!/
CITY'OF
saLina
City-County Building
300 West Ash Street
P.o Box 736
Salina, KS 67402-0736
CITY COMMISSION
STEPHEN C. RYAN. MAYOR
ROBERT E. FRANK
VI JUSTUS
SYDNEY SODERBERG
JOSEPH A. WARNER
CITY MANAGER
DENNIS M. KISSINGER
(913) 823-2277
MEMORANDUM
TO:
FROM:
Salina City Commission 1~
Dennis M. Kissinger. Cj~ Manager~
April 8, 1988
DATE:
SUBJECT:
Staff Report on Beech Aircraft Corporation request
for Resolution of Intent on Industrial Revenue Bonds
1.
BACKGROUND OF BEECH REQUEST
In March 1988, officials of Beech Aircraft Corporation, a
subsidiary of Raytheon Company, approached Salina City officials
to discuss tentative plans to manufacture all assemblies of
the Beechjet business jet at its Wichita and Salina
facilities. Since the introduction of the Beechjet in 1985,
the aircraft's major assemblies have been built in Japan.
If a portion of the Beechjet assembly is to take place in
Salina, Beech must upgrade its facilities and operations.
Beech hopes to finance this expansion in Salina through the
issuance of Industrial Revenue Bonds. Beech officials have
also requested that the property purchased or constructed
with the proceeds of the Bonds be exempted from ad valorem
(property) taxes for the full ten (10) year period permitted
by Kansas law.
Beech representatives spoke with City, County and Salina
Airport Authority officials regarding options and procedures
for requesting an IRB Resolution of Intent. It was
determined that, while all three agencies had authority to
issue IRBs, the City of Salina would be the most appropriate
local government entity to consider the request. Beech
officials then requested time on a City Commission agenda to
present their official request. At its March 28 meeting,
the City Commission set April 11,1988 for a public hearing
on a Resolution of Intent to issue up to $20,000,000 in
Industrial Revenue Bonds for construction, improvement and
equipping of additions to the existing Salina Beech facility
and for purchase of machinery and equipment to be located
there. The Resolution also would grant property tax
exemption for the new facilities and equipment.
MEMBER. . . KANSAS LEAGUE OF MUN/CIPAU77ES . NATIONAL LEAGUE OF cmES
Beech Aircraft Corporation
Page 2
II.
ABOUT INDUSTRIAL REVENUE BONDS
Industrial Revenue Bonds as a means of financing have been used to a
limited extent since the 1930s in the U.S. Not until the 1960s, however,
did this method of financing industrial development come into widespread
use.
A simplified definition of "Industrial Revenue Bonds" is "securities
issued by state and local governments on behalf of private businesses to
finance industrial and commercial projects."
Industrial Revenue Bonds have the following characteristics:
a)
The interest paid to the bondholders is generally exempt from
federal income tax in the same manner as interest from other
municipal bonds. In some cases, however, IRBs are issued as
taxable bonds.
b)
The principal and interest on IRBs is repaid through the
revenues generated by the facilities constructed or equipped
through the sale of the bonds. IRBs are not obligations of the
issuing local government, and their repayment is in no way
guaranteed by the government entity. Just as in making a
commercial loan, buyers of IRBs base their decision to lend
money, and at what interest rate, on the credit-worthiness of
the borrower: the private business or industry.
The primary advantage of IRBs to most businesses and industries
is the lower borrowing cost for their capital financing. This
lower borrowing cost occurs only if the bonds are tax-exempt
issues. Taxable IRBs carry an interest rate comparable to that
which can be obtained in the regular commercial financial
markets. The value of that borrowing rate differential to a
business is also dependent on the effective tax bracket of the
business.
c)
III. TAX ABATEMENT AS A BUSINESS INDUCEMENT
Kansas law allows property tax exemptions and tax incentives for economic
development purposes under certain circumstances. Tax exemption can be
requested under either of two separate Kansas provisions.
Beech Aircraft Corporation
Page 3
In 1986, the State Constitution was amended (Article II, Section 13) to
allow County Commissions or City governing bodies to grant tax exemptions
for economic development purposes for property used in manufacturing,
research and development and storing goods or commodities sold in
interstate commerce. This Constitutional amendment, approved by the
voters, clearly establishes as public policy in Kansas the concept that
property tax exemption is an appropriate "tool" to be used by communities
to expand employment. It leaves decisions on tax exemption cases to the
governing bodies elected by their local citizens. While the Beech tax
exemption is not requested under this Constitutional provision, the
pub 1 i c pol icy as a-pproved by .Kansas (and Sa 1 i ne County) voters i s
significant.
A separate provision of Kansas State Law also allows the exemption from
property taxes of property purchased or constructed with Industrial
Revenue Bonds. It is this statutory provision under which the Beech
request is to be considered. The statute provides for tax exemption.
For simplicity.s sake, the details of how the tax exemption can be denied
are not necessary here. Suffice it to say that all or part of the
exemption may be effectively excluded by the local government through the
agreements. The ultimate decision again rests with the governing body.
IV. SPECIFICS OF THE BEECH REQ~
Beech Aircraft Corporation is requesting a Resolution of Intent to issue
up to $20 million in Industrial Revenue Bonds over the next ten years.
The bonds would be issued over a period of years for various equipment,
construction and operation expansion needs. Issuance of the first $5
million in bonds would be expected over the next two years, with the
primary expenditures for machinery and equipment for Beechjet assembly
operations. The company is able to provide more details of its plans for
the first $5 million than for the remaining funds. While those bonds
would also be used for new and upgraded facilities, production machinery
and equipment in Salina, it is too early to speculate on the exact
expenditures, jobs to be created or economic benefits. I believe,
however, it is safe to surmise that such large future capital investment
would lead to significantly greater job creation for the community. The
company.s request for the authorization of $20 million in IRBs is
reasonable in that it permits better long-range planning by Beech and
will allow them to respond quickly to possible opportunities for
expansion and growth. To cite a similar situation, Sedgwick County
(Wichita) has authorized up to $175 million in IRBs for Beech. Of that
amount, $114 million remains unissued at this time.
Beech Aircraft Corporation
Page 4
Beech also requests the full ten-year property tax exemption permitted
by Kansas law for the improvements, machinery and equipment purchased
with the IRB proceeds. Beech property currently on the tax rolls would
not be affected, nor would property purchased or improved by other
finance methods.
V. HISTORY OF IRBS AND TAX ABATEMENT IN SALINA, 1973-1988 (See Exhibit A)
A.
1973-1979 - Salina approved fourteen IRB issuances for twelve
separate firms. Ten of the fourteen issues were for manufacturing
or warehouse construction or expansion. Nine of these ten were
granted property tax exemptions. One manufacturing facility was
required to make a $4,190 payment in lieu of taxes; two other
manufacturing or warehouse issues called for a "buy back" payment
($20,000 and $23,750) after twenty years (1993-1994).
1980-1987 - Salina approved twenty-three IRB issues. Of those
twenty-three, only four were for warehouse or manufacturing uses.
A three-year property tax exemption was granted E1Dorado Motor
Corporation in 1986. The Salina Motel Limited Partnership (Days
Inn project) was granted a four-year tax exemption for its IRB
funded improvements in 1986.
B.
c.
~~~~e~ow~~: ~~~s~~~m;r;o~~~~~~c~~~~n~fo;h:a;~~~~~;e~~~le~~~~ I~~nce
the Beech IRB request is for a manufacturing expansion project, only
those fourteen somewhat similar IRB issues will be examined further
in order to help avoid comparing "apples and oranges."
$15,205,000 in Salina IRBs were issued since 1973 for manufacturing
or warehouse projects, for eleven different companies. Of that
$15.2 million in improvements, all but $2.1 million was fully or
partially property tax exempt. However, a full ten-year tax
exemption has not been granted since 1978.
It is nearly impossible to do further comparisons among IRB projects
from the past. Each case has its own characteristics and its own
cost/benefit ratio for the community. The number and type of jobs,
the economic climate of a particular year, the financial strength
and prospects of the company and the competition among locations
all come into play. Each decision on IRB and tax exemption was
presumably made on the facts of that particular case.
Beech Aircraft Corporation
Page 5
IV. ECONOMIC IMPACT ON SALINA OF BEECH EXPANSION
Beech Aircraft officials have presented some specifics regarding the
impact of their expansion plans for the Salina Division should this
request be approved. The primary focus of this analysis will be on the
initially expected 50 jobs (the company's request shows 35-50 jobs,
which they believe to be a conservative estimate) and the first $5
million in expenditures. The analysis does not speculate on the
remaining $15 million.
A.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
B.
1.
2.
The Salina Chamber of Commerce has provided information on the
expected economic impact of 50 new employees at Beech Aircraft
Salina Division using the multiplier effect.
50 new Beech employees.
Direct annual payroll of $1 million.
Payroll impact of $5 million.
Creation of 37 additional new jobs in
service, retail, etc.
56 new households.
2 new retail establishments.
45 additional students.
Increase of 180 in population.
$585,000 in additional retail sales.
$438,000 in new bank deposits.
$442,000 in additional payroll.
the community, e.g.,
In addition, the following items should be considered:
Related to the Chamber identified effects is a general community
economy improvement. Property values are maintained or improved as
more people have jobs or better jobs. Those citizens buy or rent
homes, improve them, buy cars and patronize local businesses. The
impact of an improved local economy is eventually reflected in
increased tax receipts to pay for necessary city, county and school
services.
A property tax exemption on the machinery and equipment for the
Beechjet program does not mean that Beech would not be paying taxes.
The firm currently pays property taxes on its machinery and
equipment. These payments would be unaffected by the proposed
abatement. The company itself also pays sales and utility franchise
taxes. It purchases goods and services in the community. An
expanded Beech operation will mean increased buying and greater use
of utilities on which local taxes are paid. .
Beech Aircraft Corporation
Page 6
3.
An expanded, stronger Beech Salina Division will be in a good
position to take part in the company's future growth if that occurs
according to Beech projections. Having the newest, most modern
Beech product in Salina and continuing to provide top quality
workmanship here can only make this Division stronger. In addition
to being in line for possible further corporate expansion, a
stronger Salina Division is in a far better position to withstand
any cutbacks which Beech may be forced to consider down the road.
Beech has had to close Divisions in other cities. Given the
cyclical nature of the aircraft industry, Salina Beech needs to keep
itself on a par with the Wichita Division. Doing so provides the
Salina Division with a bright future and better protects our
existing jobs and tax base.
Perhaps less tangible effects of an expanded Beech operation
include expected positive impacts on contributions to churches,
United Way and other charitable organizations.
4.
5.
Finally, the expansion of a Beech (Raytheon) operation in Salina can
send a positive message to other corporations which might be looking
at Salina now and in the future as a potential location for their
facilities. Corporations do care who their IIcorporate neighborsll
are.
VII. PROPERTY TAX REVENUE IMPLICATIONS OF IRBS WITH TAX ABATEMENT FOR BEECH
(See Exhibits B and C)
A.
Exhibit B of this report is a property tax abatement worksheet
based on the projected expenditure of $5 million for machinery and
equipment using IRB financing. Exhibit B will be the primary
worksheet for analysis of forgone property tax revenues should a
ten-year tax exemption be granted.
Appendix C is less useful for analysis. There was some staff
debate whether to include it. We have included it for
informational purposes only, but caution the reader as to its
limitations. The figures are based on the expenditure of the
proceeds of an $18 million bond issue, all at one time and all for
tax-exempt property. In reality, bonds would be sold and paid out
for construction, machinery and equipment at various points over a
longer period of time, with the. tax abatement for particular
equipment spread over different years. Regardless, the final right
column of Appendix C does reflect the property taxes which would
likely be received from an $18 million investment if the property
did not carry a tax exemption. Of course, a concurrent increase in
employment and economic benefits to the community would also be
expected to occur.
B.
Beech Aircraft Corporation
Page 7
Note: Neither Exhibit B nor C uses a "discounted to present value"
calculation. This is a method to take into account the time value
of money. One dollar received today is worth more than one dollar
tomorrow and a lot more than one dollar received five years from
now. Using this method, the actual financial impact of the forgone
taxes is even less.
B.
Referring back to Exhibit B, the more relevant document, this report
will take the reader through its significant points.
The Fair Market Value column reflects an initial $5 million from
IRBs invested in machinery and equipment brought to Salina.
1.
2.
The Assessment Ratio for business personal property (machinery
and equipment) in 1989 will be 20%.
3.
The Trending Factor reflects the decline in value of this property
as it depreciates.
4.
The Total Assessed Valuation column reflects the expected valuation
for tax purposes which would be used by Saline County over a
ten-year period.
The Mill Levy columns reflect a projected mill levy for the various
Saline County jurisdictions after reappraisal goes into effect. It
assumes that reappraisal will bring about an increase in our
assessed valuation of fifty percent. This, in turn, would result in
a decrease in our allowed mill levy of one-third. City Staff
believes this to be a conservative estimate.
5.
6.
The final five columns are the most significant. These columns
provide a realistic estimate of taxes forgone by Saline County
jurisdictions on a $5 million tax-abated investment in machinery and
equipment, over the ten-year life of the exemption.
The City staff believes these to be nearly "worst case" numbers.
As noted above, had we taken the next step of "discounting to
present value," the forgone taxes shown for future years would be
even less.
In summary, a $5 million investment in production machinery and
equipment would be expected to generate tax revenue of $101,751 in
its first year, with declining amounts in future years, if not tax
abated. Therefore, this amount can be used as the amount of tax
inducement provided to an industry granted a ten-year tax abatement.
This is then evaluated in light of the positive economic impact of
the jobs created, including the multiplier effect of those jobs on
the local economy. Other factors, such as the strengthening of
existing jobs and tax base should also be taken into account in the
evaluation.
Beech Aircraft Corporation
Page 8
VIII. REPORT SUMMARY AND RECOMMENDATIONS
Beech Aircraft Corporation wants to expand its Salina Division for part
of its new Beechjet program, previously carried out in Japan. In order
to accomplish this expansion, they have requested the Salina City
Commission to approve a Resolution of Intent for issuance of up to $20
million in Industrial Revenue Bonds over the next ten years. They have
also requesteå the full ten-year property tax abatement allowed in Kansas
law for improvements and equipment purchased with the IRB proceeds. The
company's immediate plans would be to issue $5 million in IRBs, primarily
for machinery and equipment to be used in the Beechjet program. This
investment is expected to yield 35-50 new jobs for the Salina Division in
the next two years. Though the company is optimistic and wishes to have
the further IRB authority available for flexibility in corporate planning
of further Salina Division expansion, no additional expansion plans are
definite at this time.
This report shows that tax abatement is an established public policy
method for economic development in the State of Kansas. In 1986, by
voting for a Constitutional amendment, the citizens of Saline County
gave their endorsement to the use of property tax abatement to create
jobs and economic development, when determined by their local elected
officials to be in the best interest of the community.
The short history of Salina Industrial Revenue Bonds included here shows
that the vast majority of IRBs issued for manufacturing and warehouse
purposes since 1973 have carried the property tax exemption (although
not common in the 1980s). The 1976 IRB issue of $8,000,000 (with a ten-
year tax exemption) for General Battery (now Exide Corporation) is the
most striking example. Few Salinans would disagree that, even with the
ten-year tax exemption, the positive economic impact on the community
of this manufacturing operation has been significant.
The positive economic impact of a Beech expansion has been reviewed. It
is clear that the general economic benefits for the community are many
and will help lead to increased prosperity. No one can pretend that the
addition of 50 or even 200 new manufacturing jobs to a community is a
panacea for all economic ills. But it is a forceful, positive step
in the right direction. Succeeds breeds success.
All these benefits do not come without some cost. Forgone tax revenues
in this case are not insignificant, though far lower than amounts
previously published. We must, remember, however, that these are not
lost revenues. You cannot lose something you never had. No tax revenues
ëUrrently received would be given up.
Beech Aircraft Corporation
Page 9
Some would say that we should deny the tax exemption, either directly
or through demands for a payment in lieu of taxes. They are assuming
that the benefits would still accrue to the community, that Beech would
accept this decision and proceed with expansion here. This is a risky
assumption. Though no one knows what the final decision by Beech
officials would be, it seems clear a "corporate rethinking" of their
plans would likely take place. The Beechjet operation is being brought
over from Japan with plans to manufacture assemblies in both Salina
and Wichita. How much goes to Salina and how much to Wichita is thought
to be somewhat flexible. Beech officials have stated their confidence in
the Beech Salina Division's ability to take on a major part of this
important program, along with the Wichita Division. They have asked the
City of Salina to become a full partner with Beech for this program and
its future, on the same basis as Wichita. Sedgwick County has
enthusiastically authorized the issuance of up to $175 million in IRBs
for Beech, all with the ten-year tax exemption. It is difficult to
see how Salina can do anything less and remain competitive with Wichita
for these proposed jobs, for future expansion or possibly even for
retaining our existing jobs. Our message to Beech should be that we also
want to be full partners in their future growth, and that we also
recognize the overall positive economic impact for our community.
Beech has been an excellent corporate citizen of Salina for many years,
and its operations have contributed to Salina's prosperity. To date,
they have never come to us with an IRB request nor with a request for
property tax exemption, both of which have been granted to other firms.
Now they are doing so as part of an ambitious expansion plan.
The question has been asked why the IRB authorization alone is not a
sufficient economic inducement. We should note that the Beech IRB plans
are significantly different from IRB issues other companies have used
here. Beech has stated that their parent corporation, Raytheon, plans to
purchase the bonds. If this occurs, due to certain federal limitations,
the Salina Beech IRBs will likely be issued as taxable bonds. As you
recall, almost all IRBs carry lower interest rates because their interest
is free from federal tax. If Salina Beech IRBs are taxable, the company
has gained nothing by using IRBs instead of regular corporate bonds.
This brings us to a critical point: the primary reason for Beech's IRB
request is for the property tax exemption on the improvements, machinery
and equipment. This, not the IRB request itself, is the real question
before the City Commission. IRB approval without tax exemption is no
real economic inducement for Beech.
In closing, I believe each request for IRBs and/or tax abatement should
be addressed by the City Commission on its own merits. I also strongly
believe the Beech Aircraft request, evaluated on its own merits, should
be approved.
Beech Aircraft Corporation
Page 10
The U.S. Congress, the Kansas Legislature and the voters of the State
and this City have given us a variety of IItoolsll to use in economic
development and job creation for the community. As with any tools,
these can either be abused or used prudently and responsibly. Issuance
of Industrial Revenue Bonds for a Beech manufacturing operation and
including a tax exemption provision in this case is both prudent and
responsible.
A communityls willingness to use the legal and proper IItoolsll at its
disposal to facilitate business development, job creation and
revitalization provides many benefits--some immediate, others accruing
over long periods of time. One of the most important of those benefits
is that active and responsible use of the economic inducements available
to leverage private investment allows the community to help shape its own
economic destiny. The alternative is to wait passively for the
uncertainty of market forces to mystically implement our community's
economic development plans.
Distribution List
Salina City Commission
USD 305 Board of Education
Salina Airport Authority
Saline County Commission
Salina Area Chamber of Commerce
Director of Finance
Director of Planning & Community Development
City Attorney
Division Manager, Salina Division, Beech Aircraft
Corporation
INDUSTRIAL REVENUE BONDS EXHIBIT A
DATE . AMOUNT GENERAL MATURITY PREVIOUS OUTSTANDING AMOUNT DUE IN
ISS~ED BONDS ISSUED FOR OF ISSUE INTEREST RATE PURPOSE DATE PAYMENTS 12/31/1987 TAX STATUS LIEU OF TAXES BUY BACK
5/1/1973 School Specialty Supply 950,000.00 5~,5.75,6,6\\ Manufacturi ng 5/1/1993 665,000.00 285,000.00 Exempt 0.00 23,750.00
10/1/1973 Wyatt Manufacturing Co. Inc. 500,000.00 6\\ Hanufacturi ng 10/1/1994 335,000.00 165,000.00 Exempt 4,190.00 1.00
1/1/1974 The Lee Company 800,000.00 6, 6\, 6~\ Warehouse 1/1/1994 490,000.00 310,000.00 Exempt 0.00 20,000.00
9/1/1976 General Battery Corp - A 1,000,000.00 6(6.75,7~,7.75\ Manufacturing 9/1/1996 500,000.00 500,000.00 Exempt 0.00 0.00
9/1/1976 General Battery Corp - B(1) 6,300,000.00 8 \ Manufacturing 9/1/2001 2,011,610.93 4,288,389.07 Exempt 0.00 0.00
9/1/1976 General Battery Corp - B(2) 700,000.00 9.75\ Manuf acturi ng 9/1/2001 207,116.86 492,883.14 Exempt 0.00 100.00
7/1/1977 Research Chemical Company 1,000,000.00 5,6,7\ Manufacturing 7/1/1992 625,000.00 375,000.00 Exempt 26.50 1.00
8/15/1977 Asbury Hospital (Re-issue) 2,090,000.00 6.75, 6~\ Hospital 2/1/1993 1,005,000.00 1,085,000.00 Exempt. 0.00 WO.OO
6/1/1978 Salina Presbyterian Manor 2,000,000.00 5.75,6\,6.75,7\;\Retirement Home 6/1/2000 440,000.00 1,560,000.00 Exem~t 0.00 100.00
9/1/1978 Pepsi Cola Bottling Co. 350,000.00 6( 6.9\ Manufacturi ng 9/1/1988 315,000.00 35,000.00 Not xempt 0.00 100.00
10/1/1978 KASA Industrial Controls 280,000.00 7,8\\ Hanufacturi ng 10/1/1993 160,000.00 120,000.00 Exempt 606.67 1.00
1011/1978 United Building of Salina 990,000.00 6~\ Office 10/1/1989 810,000.00 180,000.00 Exempt 13,585.47 1.00
12/1/1978 Horgan Supply, Inc. 325,000.00 7( 7~, 8\ Warehouse 12/1/1998 130,000.00 195,000.00 Ex~t 0.00 11 ,000.00
4/1/1979 Salina Nursing Center, Inc. 1,400,000.00 7 to 9\ Nursing Home "/1/1999 150,000.00 1,250,000.00 Not xempt 0.00 100.00
2/1/1980 Windsor Nursing Home Assoc. Inc. 1,450,000.00 9.0 to 11\\ Nursing Home 2/1/2005 95,000.00 1,355,000.00 Not Exempt 0.00 0.00
3/1/1980 The Doctors 380,000.00 8-3/8\ CHnie 9/1/1995 126,000.00 254,000.00 Not Exempt 0.00 0.00
3/1/1980 Wilson & Company 675,000.00 8~\ Computer Office 3/1/1990 450,000.00 225,000.00 Not Exempt 0.00 0.00
4/1/1980 Yellow Van Movers 400,000.00 9.0 to 9~\ Warehouse 4/1/1995 40,000.00 360,000.00 Not Exempt 0.00 0.00
7/1/1981 Salina Board of Trade 200,000.00 9~ to 10" Office 7/1/1991 120,000.00 80,000.00 Not Exempt 0.00 0.00
7/1/1981 Morrison Grain Company 400,000.00 10\,10.375,10~\ Railroad spur 7/1/1996 175,000.00 225,000.00 Not Exempt 0.00 0.00
3/17/1982 Dr. Gary Harbin 361,000.00 Variable Medical Clinic 3/17/2002 99,000.00 262,000.00 Not Exempt 0.00 0.00
5/1/1982 Roy & Virginia Wilbur 153,000.00 Variable Office 5/1/1997 30,700.00 122,300.00 Not Exempt 0.00 0.00
7/1/1982 Larson Building Center, Inc 600,000.00 10 to 10.8\ lumber Yard 7/1/2002 150,000.00 450,000.00 Not Exempt 0.00 0.00
11/111982 Exli ne, I nc. 500,000.00 Variable Manufacturi ng 11/1/1992 250,000.00 250,000.00 Not Exempt 0.00 0.00
12/1/1982 Harry J. Jett, D.D.S. 400,000.00 Variable Dental Clinic 12/1/1997 71,000.00 329,000.00 Not Exempt 0.00 0.00
3/1/1983 Mowery Clinic Building, Inc. 1,450,000.00 Variab 1 e Medi ca 1 C11 ni c 7/1/1998 400,000.00 1,050,000.00 Not Exempt 0.00 0.00
12/1/1983 ,Santa Fe Office Plaza 450,000.00 Variable Office 12/1/1998 62,000.00 388,000.00 Not Exempt 0.00 0.00
7/1/1984 Byron F. Hutchison 200,000.00 Variable Dental Clinic 7/1/1994 60,000.00 140,000.00 Not Exempt 0.00 0.00
11/1/1984 Famdoc, Inc. 200,000.00 Variable Hedi ca 1 Cli ni c 11/1/1999 18,200.00 181,800.00 Not Exempt 0.00 0.00
11/27/1984 Salina Central ~lal1 (Dt11ard's) 5,505,000.00 Variable Shopping Center 12/1/2014 0.00 5,505,000.00 Not Exempt 0.00 0.00
12/28/1984 Salina Central Mall (Penney's) 4,495,000.00 Variable Shopping Center 12/1/2014 0.00 4,495,000.00 Not Exempt 0.00 0.00
11/01/1985 College Park Retirement Center (MF) 3,600,000.00 Vari ab 1 e Retiremnt Center11/1/2ooS 0.00 3,600,000.00 Not Exempt 0.00 0.00
11/01/1985 College Park Retirement Center 2,400,000.00 Variable Retiremnt Center11/1/2005 0.00 2,400,000.00 Not Exempt 0.00 0.00
2/01/1986 School Specialty Supply, Inc. 1,200,000.00 Variable Warehouse 5/1/2001 80,000.00 1,120,000.00 Not Exempt 0.00 0.00
4/01/1986 E1Dorado Motor Corporation 900,000.00 Variable Manufacturi ng 10/1/1995 50,000.00 850,000.00 Exempt '87,'88,'890.00 0.00
7/01/1986 Omaha Hotel, Inc. 5,800,000.00 Variable Hotel 7/1/2001 273,888.82 5,526,111.18 Not Exempt 0.00 0.00
9/01/1966 Salina Motel Limited Partnership 1,650,000.00 Variable Motel 9/1/2006 0.00 1,650,000.00 Exempt '87,'88,
'89,'90 only 0.00 0.00
4/01/1967 Salina Presbyterian Manor, Inc. 800,000.00 , 5.9 to 8.25\ Nursing Home 6/1/2008 0.00 800,000.00 Not Exempt 0.00 0.00
TOTAL $52,854,000.00 $10,394,516.61 $42,459,483.39
CITY OF SALINA
PROPERTY TAX ABATEHENT i~ORKSHEET
FAIR HARKET VALUE
ASSESSMENT RATIOS
----------------
-----------------
YEAR REAL ESTATE
PERSONAL REAL ESTATE
PERSONAL
EXHIBIT B
TRENDING ASSESSED VALUATION TOTAL
FACTOR ------------------ ASSESSED
PERSONAL REAL ESTATE PERSONAL VALUATION
------ ---------- ---------- ---------- ---------- ---------- ---------- ----------
1989
1990
1991
19C12
199:1
199h
19Q5
1996
1997
1998
$0 $5.000.000
$0 $5.000,000
$0 $5,000,000
$0 $5.000.000
$0 $5,000,000
$0 $5.000,000
$0 $5,000,000
$0 $5,000,000
$0 $5.000.000
$0 $5,000.000
30'}',. 20%
30% 20%
30% 20%
30% 20%
3O'}',. 20%
30% 20%
30% 20%
30% 20%
30% 20%
30% 20%
TOTAL TAX ABATEMENT BY TAXING DISTRICT
NOTE:
1.00
0. ¡j5
0.54
O. "5
0.38
0.32
0.27
0.24
0.22
0.19
THIS TABLE ASSillIES THE EFFECT OF REAPPRAISAL WILL RESULT IN
AN INCREASE IN OUR ASSESSED VALUATION OF FIFTY PERCENT.
THIS HOULD RESULT IN A DECREASE OF OUR ALLOWED HILL LEVY
OF ONE-THIRD. WE FEEL THIS IS A CONSERVATIVE ESTIMATE OF
THE EFFECT REAPPRAISAL WILL HAVE ON OUR CITY.
$0 $1,000,000
$0 $650,000
$0 $540,000
$0 $450.000
$0 $380,000
$0 $320,000
$0 $270,000
$0 $240,000
$0 $220,000
$0 $190,000
PROJECTED MILL LEVIES AFTER REAPPRAISAL
-----------------------------------------
CITY OF
SALINA
24.240
SALINE
COUNTY
14.000
usn
305
59.186
OTHER
4.325
---------- ---------- ---------- ---------- ----------
$1,000,000
$650,000
$540.000
$450.000
$380,000
$320,000
$270,000
$2"0,000
$220,000
$190.000
$24.240
$15.756
$13 ,090
$10.908
$9.211
$7.757
$6.5"5
$5,818
$5.333
$4,606
$14,000
$9.100
$7.560
$6.300
$5,320
$","80
$3.780
$3,360
$3,080
$2,660
$59.186
$38,471
$31, 960
$26,63"
$22,/,91
$18.940
$15,980
$14,205
$13,021
$11,245
$4.325
$2.811
$2.335
$1. 946
$1. 6"3
$1,38"
$1. 168
$1, 038
$951
$822
TOTAL
101.751
$101,751
$6G.133
$5[1.945
$45,788
$38, (/65
$32.560
$27.473
$2/t.l,20
$22.385
$19.333
---------- ---------- ---------- ---------- ----------
$103.262
$59,640
$252.132
$18.423
$ld3 . 458
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
EXHIBIT C
CITY OF SALINA
PROPERTY TAX ABATEMENT WORKSHEET
FAIR MJ,RKET VALUE
ASSESSMENT RATIOS
-----------------
TRENDING ASSESSED VALUATION TOTAL
FACTOR ------------------ ASSESSED
PERSONAL REAL ESTATE PERSONAL VALUATION
YEAR REAL ESTATE
----------------
PERSONAL
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
PERSONAL REAL ESTATE
------ ---------- ---------- ---------- ---------- ----------
1989 $4.000.000
1990 $4,000,000
1991 $4,000,000
1992 $4,000,000
1993 $4,000,000
199~ $4,000.000
19Q5 $4.000,000
1996 $4,000.000
1997 $4.000.000
1993 $4.000,000
$14,000,000
$14.000,000
$14,000,000
$14,000,000
$H,OOO,OOO
$14.000.000
$14,000,000
$14,000.000
$14,000,000
$14.000.000
30% 20% 1. 00 $1. 200,000
30% 20% 0.65 $1. 200,000
30% 20'X 0.54 $1. 200,000
30% 20% 0.45 $1. 200 , 000
30%, 20% 0.38 $1. 200,000
30% 20% 0.32 $1. 200.000
3 0 'X, 20% 0.27 $1,200,000
30% 2 0 'X, 0.24 $1.200,000
30% 20% 0.22 $],200,000
30% 20% 0.19 $1. 200,000
TOTAL TAX ABATEMENT BY TAXING DISTRICT
THIS TABLE ASSUMES THE EFFECT OF REAPPRAISAL \"1LL RESULT IN
AN INCREASE IN OUR ASSESSED VALUATION OF FIFTY PERCENT.
THIS IWULD RESULT IN A DECREASE OF OUR ALLOIvED HILL LEVY
OF ONE-THIRD. WE FEEL THIS IS A CONSERVATIVE ESTIMATE OF
THE EFFECT REAPPRAISAL \~UL HAVE ON OUR CITY.
NOTE:
$2,800,000
$1,820,000
$1, 512,000
$1, 260,000
$1,064,000
$896.000
$756,000
$672, 000
$616,000
$532,000
$4,000,000
$3,020,000
$2,712,000
$2.460,000
$2.264,000
$2,096,000
$1, 956,000
$1. 872,000
$1, 316,000
$1, 732,000
PROJECTED HILL LEVIES AFTER REAPPRAISAL
-----------------------------------------
CITY OF
SALINA
24.240
$96.960
$73,205
$65.739
$59,630
$54,879
$50,807
$47,413
$45.377
$44,020
$41. 984
SALINE
COUNTY
14.000
$56.000
$42.280
$37,968
$31,.440
$31,696
$29,344
$27,384
$26,208
$25,424
$24,243
USD
305
59.186
$236,744
$lï8,742
$160.512
$145,598
$133.997
$124,054
$115,768
$110,7%
$107.482
$102,510
OTHER
4.J25
$17.299
$13.060
$11.728
$10.639
$9.791
$9.065
$8,459
$8.096
$7.854
$7,490
---------- ---------- ---------- ----------
$580,015
$334,992 $1.416,203
TOTi\L
101,731
$407.003
,$J07,287
$2ï5,9/~8
$250.307
$230,J64
$213.269
$199.024
$190.477
$1f':,I .779
$176.232
$103,481 $2.434,690
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------