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Arbitrage Report (2011) GILMORE & BELL A PROFESSIONAL CORPORATION ATTORNEYS AT LAW 816-221-1000 ST.LOUIS,MISSOURI FAX:8 16-2 21-1018 2405 GRAND BOULEVARD,SUITE 1100 WICHITA,KANSAS WWW.GILMOREBELL.COM KANSAS CITY, MISSOURI 64108-2521 LINCOLN,NEBRASKA October 13, 2011 Mr. Rod Franz, C.P.F.O. Director of Finance City of Salina,Kansas 300 West Ash Street, Room 206 P.O. Box 736 Salina, Kansas 67402-0736 Re: $3,205,000 City of Salina, Kansas General Obligation Temporary Notes, Series 2008-1 (the"Notes") Dear Rod: Enclosed are the following documents related to our computation of arbitrage rebate in connection with the above-referenced Notes: • Legal Opinion of Gilmore& Bell Regarding the Arbitrage Rebate Analysis • Exhibit A- Explanation of Arbitrage Rebate Analysis • Exhibit B -Arbitrage Rebate Analysis as of August 1, 2009 (the "Computation Date") • Exhibit C—Spending Exception Analysis as of the Computation Date As of the Computation Date, no rebate payment is required to be made for the Notes. The amount accrued as of the Computation Date as a rebate liability attributable to the investment of the gross proceeds of the Notes subject to arbitrage rebate was negative $596.68 No further arbitrage rebate computations are necessary. Please call me if you have any questions. Very truly yours, Jennifer L. Richardson Enclosures cc: Lynd K. Mische Randy Irey Gina Riekhof a GILMORE & BELL A PROFESSIONAL CORPORATION ATTORNEYS AT LAW 816-221-1000 ST.LOUIS,MISSOURI FAX:816-221-1018 2405 GRAND BOULEVARD,SUITE 1100 WICHITA,KANSAS WWW.GILMOREBELL.COM KANSAS CITY, MISSOURI 64108-2521 LINCOLN,NEBRASKA October 13, 2011 City of Salina, Kansas Re: $3,205,000 City of Salina, Kansas General Obligation Temporary Notes, Series 2008-1 (the"Notes")—Legal Opinion Regarding Arbitrage Rebate Analysis as of August 1, 2009 Ladies and Gentlemen: We have acted as counsel to.the City of Salina; Kansas (the "Issuer") in connection with the preparation of the Arbitrage Rebate Analysis and Spending Exception Analysis dated August 1, 2009 (the "Arbitrage Analysis") for the above-referenced Notes. Attached as Exhibit A is our Explanation of Arbitrage Rebate and Spending Exception Analysis, as Exhibit B is our Arbitrage Rebate Analysis and as Exhibit C is our Spending Exception Analysis. Our opinion is based on the facts and assumptions stated in the Explanation of Arbitrage Rebate and Spending Exception Analysis. Capitalized terms used in this opinion have the same meaning as described in the Explanation of Arbitrage Rebate Analysis. We have assumed that the financial records provided to.us and the incorporation of those records into the Arbitrage Analysis are accurate and correct. Unless otherwise noted in the Explanation of Arbitrage Rebate and Spending Exception Analysis, we have also assumed that the proceeds of the Notes and other funds.were used and invested in accordance 'with the documents contained in the Transcript, including but not limited to the Federal Tax Certificate. Based upon the foregoing, we are of the opinion that, under existing law: 1. The accounting method, identification of funds and accounts subject to rebate or yield reduction payment restrictions and the overall methodology employed in the preparation of the Arbitrage and Spending Exception Analysis are in accordance with Section 148 of the Internal Revenue Code of 1986, as amended (the"Code")and United States Treasury Regulations and decisions. 2. As of the Computation Date, the new money portion qualified for the 18-month Spending Exception. 3. As of the Computation Date, no rebate payment is required to be made for the Notes. 4. As of the Computation Date, no yield reduction payment is required to be made for the Notes. 5. No arbitrage rebate will be generated in the future under Section 148(f) of the Code, and no further computation'of rebate will be required. 4 Our opinion is based on statutes, regulations and decisions in effect as of this date, and is intended for and can be relied on only by the parties to whom it is addressed. We understand that the Issuer will use this opinion and the Arbitrage Analysis to determine whether any rebate liability or yield reduction payment is due and the amount and timing of that payment. Very truly yours, LKM:jlr GILMOHE & BELL, P.C. Exhibit A Explanation of Arbitrage Rebate and Spending Exception Analysis This Explanation of Arbitrage Rebate Analysis summarizes the methodology and primary assumptions used in the Arbitrage Rebate Analysis and Spending Exception Analysis dated August 1, 2009 (the "Arbitrage Analysis") for the $3,205,000 City of Salina, Kansas (the "Issuer") General Obligation Temporary Notes, Series 2008-1 (the "Notes"). This explanation accompanies our legal opinion dated October 13, 2011. General Matters The time period covered by the Arbitrage Analysis (the "Computation Period") began June 27, 2007 and ended August 1, 2009. (The latter date is referred to as the"Computation Date"). i We determined that the funds included in the Arbitrage Analysis were"gross proceeds" subject to rebate and/or yield restriction payments under Section 148 of the Internal Revenue Code of 1986, as amended (the "Code") and applicable United States Treasury Regulations and decisions. This determination was based on our review of the various documents included in the Transcript of Proceedings at the time the Notes were issued(the"Transcript"). The Arbitrage Analysis was prepared using financial records provided by the Issuer (the "Investment Records"). The relevant investment data contained in the Investment Records for each fund and account was entered in the Arbitrage Analysis. Multiple procedures were used to analyze and test the accuracy of the Investment Records as well as the accuracy and the overall reasonableness of the investment results for each fund or account that was included in the Arbitrage Analysis. Based on the procedures employed, the results reflected in the Arbitrage Analysis appear to accurately incorporate the information in the Investment Records. However, the Arbitrage Analysis is not intended to be a mathematical verification of the information contained in the Investment Records or an audit of the investment results actually obtained. The Computation Date is a rebate computation installment payment date. The computation of yield on the Notes used in the Arbitrage Analysis is contained in the Transcript as an exhibit to the Federal Tax Certificate. All investments purchased or sold using gross proceeds of the Notes were treated as purchased and sold on the dates and at the prices reflected in the Investment Records, and these prices were assumed to be at fair market value of the investment on the purchase or sale date. Unless otherwise noted, investments that were required to be valued on dates other than a date when they actually were purchased or sold, were valued either at par plus accrued interest or at present value as of that date. These values are shown in the Arbitrage Analysis. Accounting for Expenditures and Investments Except as described below, note proceeds were allocated to expenditures on the dates reflected in the Investment Records for the improvement fund. Note proceeds were assumed to have been spent in accordance with the various documents contained in the Transcript. In general these rules permit Note proceeds to be spent only for costs that can or must be capitalized for financial accounting or federal income tax purposes. All expenditures were assumed to have been paid only to third parties directly or as a valid reimbursement of the Issuer for costs previously spent for those purposes. The Issuer generally invests all funds (including proceeds of the Notes), in a variety of investments without regard to the sources from which the funds were derived (e.g., note proceeds, tax revenues, grants, etc.). Earnings from the investment of proceeds of the Notes were calculated based on the unspent balance of Note proceeds and the average monthly interest rate on Issuer's investments, as reported by the Issuer. We understand that Investment earnings on proceeds of the Notes are initially deposited to the General Fund of the Issuer. Amounts in the General Fund were reasonably expected to be spent (using a "Note proceeds spent first" method of accounting) within six months of the date of deposit. Since the Notes are an issue of governmental purpose obligations, and because the General Fund contains tax or other revenues of the Issuer other than the proceeds of issues of tax exempt obligations, we have treated investment earnings on Note proceeds as spent on the date they were earned in accordance with Treasury Regulation §1.148-6(d)(6). Note Proceeds Allocated to Refunding Portion Note proceeds were invested and allocated to the redemption of refunded bonds on the dates reflected in the Investment Records. Exemption of Funds from Rebate–18-month Spending Test On the basis of the accounting methods described above, we have determined that the New Money portion of the Notes met the 6-month, 12-month and 18-month spending targets and as a result qualified for the 18-month spending exception. Yield Reduction Payment–Restricted Investment No funds or accounts were identified as subject to investment yield restrictions. Exemption of Funds from Rebate–Bona Fide Debt Service Fund Amounts held in a "bona fide debt service fund" are not taken into account in computing arbitrage rebate if the gross earnings on such fund during a given Bond Year are less than $100,000. If the average annual debt service on the issue does not exceed $2,500,000, the $100,000 earnings test may be treated as satisfied. A"bona fide debt service fund" is a fund that— (1) is used primarily to achieve a proper matching of revenues with principal and interest payments within each bond year; and (2) is depleted at least once each bond year, except for a reasonable carryover amount not to exceed the greater of(A) the earnings on the fund for the preceding bond year, or (B) one-twelfth of the principal and interest payments on the bond issue for the preceding bond year. We understand that the debt service fund qualified as a bona fide debt service fund for all bond years during the Computation Period. 2 Exhibit B Arbitrage Rebate Analysis Computed as of August 1, 2009 City of Salina, Kansas General Obligation Temporary Notes Series 2008-1 GILMORE BELL G I L M O R E 8 BELL. P C City of Salina, Kansas General Obligation Temporary Notes Series 2008-1 Results as of August 1,2009 Summary of Issue Par $3,205,000 Issue Date July 30,2008 Note Year Date August 1 Note Yield 1.59953% Computation Date August 1,2009 Summary of Rebate Computation Computation Results • Total Rebate Amount $235.69 • Arbitrage rebate is currently due. The net rebate amount as of August 1,2009 is$235.69. • Payment was due to the IRS on or before September 30,2009. 10/13/2011 -1- Gilmore&Bell,P.C. w w w w w ww w w w w w w w w w w w w �■w City of Salina, Kansas General Obligation Temporary Notes Series 2008-1 Rebate Liability by Source Fund 779-West Diamond Drive 2,329.64 Fund 778-Downtown Traffic Signals - Fund 770-Fire Station#2 - Fund 789-Red Fox Addition 317.11 Fund 721-Eagles Crest Town Homes 163.61 Fund 788-Quail Meadows,Phase N 368.30 Credits&Adjustments (2,942.96) Total Rebate Amount 235.69 ($30,000) ($15,000) $0 $15,000 10/13/2011 -2- Gilmore&Bell,A.C. City of Salina, Kansas General Obligation Temporary Notes Series 2008-1 Comments and Yield Comparison Comments • We understand that the principal and interest account qualified as a bona fide debt service fund for all note years during this computation period. • The Notes matured on August 1,2009. Yield Comparison As of 8/1/2009 8.00% Bond Yield= 1.60% 6.00% 4.00% 2.29% 2.28% 2.28% 2.20% 2.00% 0.00% Fund 788-Quail Fund 721-Eagles Crest Fund 789-Red Fox Fund 770-Fire Station Fund 778-Downtown Fund 779-West Meadows,Phase IV Town Homes Addition #2 Traffic Signals Diamond Drive 10/13/2011 -3- Gilmore&Bell,P.C. City of Salina,Kansas General Obligation Temporary Notes Series 2008-1 788-Quail Nleado%%s,Phase IN' , Cash and Investment Activity Imputed Interest Calculation total Relevant Relevant Days Cash Transactions Investments Cash and Investment Invested Invested Imputed Date Cash In Cash Out Balance Purchase Receipt Earnings Balance Investments Rate Balance (Actual) Earnings 7/30/2008 825,000.00 469,971.21 355,028.79 355,028.79 355,028.79 2.1650% - - 7/31/2008 21.06 21.06 3559028.79 355,028.79 2.1650% 355,028.79 1 21.06 8/7/2008 1,236.00 1,236.00 353,792.79 353,792.79 2.2459% 355,028.79 7 152.92 8/14/2008 1,543.98 19543.98 352,248.81 352,248.81 2.2459% 353,792.79 7 152.39 8/21/2008 72,629.46 729629.46 279,619.35 279,619.35 2.2459% 352,248.81 7 151.72 8/31/2008 629.08 629.08 279,619.35 279,619.35 2.2459% 279,619.35 10 172.05 9/25/2008 219,494.70 219,494.70 60,124.65 60,124.65 2.2481% 279,619.35 25 430.56 9/30/2008 449.08 449.08 60,124.65 609124.65 2.2481% 60,124.65 5 18.52 10/30/2008 60,124.65 60,124.65 - - 2.1672% 60,124.65 30 107.10 10/31/2008 107.10 - 107.10 - - 2.1672% - - Totals 825,000.00 826,206.32 355,028.79 355,028.79 1,206.32 1,206.32 Cash Out Less Cash In: 1,206.32 Investment Receipts minus Purchases: - 10/13/2011 -4- Gilmore&Bell,P.C. ww �w �.w ww ww ww ww w ww ww wir �w �•w ww ws ww w� wr ■w City of Salina,Kansas General Obligation Temporary Notes Series 2008-1 Arbitrage Rebate Com utation Investment Yield Future Present Net Value Future Value Present Investment Factor @ Value to Number Factor @ Value to Date Activity 1.599532% 8/1/2009 of Days 2.291870% 7/30/2008 7/30/2008 (355,028.79) 1.0161042 (360,746.26) 361 1.0000000 (355,028.79) 7/31/2008 21.06 1.0161042 21.40 361 1.0000000 21.06 8/7/2008 1,236.00 1.0157895 1,255.52 354 0.9995570 1,235.45 8/14/2008 1,543.98 1.0154749 1,567.87 347 0.9991142 1,542.61 8/21/2008 72,629.46 1.0151604 73,730.55 340 0.9986716 72,532.98 8/31/2008 629.08 1.0147561 638.36 331 0.9981028 627.89 9/25/2008 219,494.70 1.0136340 222,487.30 306 0.9965245 218,731.85 9/30/2008 449.08 1.0134098 455.10 301 0.9962091 447.38 10/30/2008 60,124.65 1.0120652 60,850.07 271 0.9943191 59,783.09 10/31/2008 107.10 1.0120652 108.39 271 0.9943191 106.49 1,206.32 368.30 (0.00) Summary of: Fund 788-Quail Meadows,Phase IV Arbitrage Rebate Amount: $ 368.30 Total Investment Earnings: 1,206.32 Investment Yield: 2.2919% Average Amount Invested: $ 210,539 Total Time Invested: 0.25 years 10/13/2011 -9- Gilmore&Bell,RC. City of Salina,Kansas General Obligation Temporary Notes Series 2008-1 Cash and Investment Activity Imputed Interest Calculation Total Relevant Relevant Days Cash Transactions Investments Cash and Investment Invested Invested Imputed Date Cash In Cash Out Balance Purchase Receipt Earnings Balance Investments Rate Balance (Actual) Earnings 7/30/2008 550,000.00 420,455.00 129,545.00 129,545.00 129,545.00 2.1650% - - 7/31/2008 7.68 7.68 129,545.00 129,545.00 2.1650% 129,545.00 1 7.68 8/7/2008 754.25 754.25 128,790.75 128,790.75 2.2459% 129,545.00 7 55.80 8/14/2008 837.65 837.65 127,953.10 127,953.10 2.2459% 128,790.75 7 55.47 8/21/2008 35,588.40 35,588.40 92,364.70 92,364.70 2.2459% 127,953.10 7 55.11 8/31/2008 223.21 223.21 92,364.70 92,364.70 2.2459% 92,364.70 10 56.83 9/25/2008 40,816.86 40,816.86 51,547.84 51,547.84 2.2481% 92,364.70 25 142.22 9/30/2008 158.09 158.09 51,547.84 51,547.84 2.2481% 51,547.84 5 15.87 10/30/2008 3,260.26 3,260.26 48,287.58 48,287.58 2.1672% 51,547.84 30 91.82 10/31/2008 94.69 94.69 48,287.58 48,287.58 2.1672% 48,287.58 1 2.87 11/20/2008 48,287.58 48,287.58 - - 2.2390% 48,287.58 20 59.24 11/30/2008 59.24 - 59.24 2.2390% - - Totals 550,000.00 550,542.91 129,545.00 129,545.00 542.91 542.91 Cash Out Less Cash In: 542.91 Investment Receipts minus Purchases: - 10/13/2011 -6- Gilmore&Bell,P.0 City of Salina,Kansas General Obligation Temporary Notes Series 2008-1 Arbitrage Rebate Com utation Investment Yield Future Present Net Value Future Value Present Investment Factor @ Value to Number Factor @ Value to Date Activity 1.599532% 8/1/2009 of Days 2.279605% 7/30/2008 7/30/2008 (129,545.00) 1.0161042 (131,631.22) 361 1.0000000 (129,545.00) 7/31/2008 7.68 1.0161042 7.80 361 1.0000000 7.68 8/7/2008 754.25 1.0157895 766.16 354 0.9995593 753.92 8/14/2008 837.65 1.0154749 850.61 347 0.9991189 836.91 8/21/2008 35,588.40 1.0151604 36,127.93 340 0.9986786 35,541.37 8/31/2008 223.21 1.0147561 226.50 331 0.9981129 222.79 9/25/2008 40,816.86 1.0136340 41,373.36 306 0.9965430 40,675.75 9/30/2008 158.09 1.0134098 160.21 301 0.9962293 157.49 10/30/2008 3,260.26 1.0120652 3,299.60 271 0.9943492 3,241.84 10/31/2008 94.69 1.0120652 95.83 271 0.9943492 94.15 11/20/2008 48,287.58 1.0111699 48,826.95 251 0.9930979 47,954.29 11/30/2008 59.24 1.0107225 59.88 241 0.9924728 58.79 542.91 163.61 (0.00) Summary of: Fund 721-Eagles Crest Town Homes Arbitrage Rebate Amount: $ 163.61 Total Investment Earnings: 542.91 Investment Yield: 2.2796% Average Amount Invested: $ 71,448 Total Time Invested: 0.33 years 1 0/1 3/2 0 1 1 -7- Gilmore&Bell,P.C. r � r ■r City of Salina,Kansas General Obligation Temporary Notes Series 1008-1 Cash and Investment Activity Imputed Interest Calculation Total Relevant Relevant Days Cash Transactions Investments Cash and Investment Invested Invested Imputed Date Cash In Cash Out Balance Purchase Receipt Earnings Balance Investments Rate Balance (Actual) Earnings 7/30/2008 575,000.00 357,021.56 217,978.44 217,978.44 217,978.44 2.1650% - - 7/31/2008 12.93 12.93 217,978.44 217,978.44 2.1650% 217,978.44 1 12.93 8/7/2008 785.25 785.25 217,193.19 217,193.19 2.2459% 217,978.44 7 93.89 8/14/2008 875.73 875.73 216,317.46 216,317.46 2.2459% 217,193.19 7 93.55 8/21/2008 780.77 780.77 215,536.69 215,536.69 2.2459% 216,317.46 7 93.17 8/31/2008 413.23 413.23 215,536.69 215,536.69 2.2459% 215,536.69 10 132.62 9/25/2008 137,198.89 137,198.89 78,337.80 78,337.80 2.2481% 215,536.69 25 331.88 9/30/2008 356.00 356.00 78,337.80 78,337.80 2.2481% 78,337.80 5 24.12 10/30/2008 33,977.35 33,977.35 44,360.45 44,360.45 2.1672% 78,337.80 30 139.54 10/31/2008 142.17 142.17 44,360.45 44,360.45 2.1672% 44,360.45 1 2.63 11/20/2008 2,055.62 2,055.62 42,304.83 42,304.83 2.2390% 44,360.45 20 54.42 11/30/2008 80.37 80.37 42,304.83 42,304.83 2.2390% 42,304.83 10 25.95 12/18/2008 42,304.83 42,304.83 - - 2.2935% 42,304.83 18 47.85 12/31/2008 47.85 - 47.85 2.2935% - - Totals 575,000.00 576,052.55 217,978.44 217,978.44 1,052.55 1,052.55 Cash Out Less Cash In: 1,052.55 Investment Receipts minus Purchases: - 10/13/2011 -8- Gilmore&Bell,P.C. a■� �r �wr r �r r�r rr r M s rr am mow M � City of Salina,Kansas General Obligation Temporary Notes Series 2008-1 Arbitrage Rebate Com utation Investment Yield Future Present Net Value Future Value Present Investment Factor @ Value to Number Factor @ Value to Date Activity 1.599532% 8/1/2009 of Days 2.279464% 7/30/2008 7/30/2008 (217,978.44) 1.0161042 (221,488.82) 361 1.0000000 (217,978.44) 7/31/2008 12.93 1.0161042 13.14 361 1.0000000 12.93 8/7/2008 785.25 1.0157895 797.65 354 0.9995594 784.90 8/14/2008 875.73 1.0154749 889.28 347 0.9991189 874.96 8/21/2008 780.77 1.0151604 792.61 340 0.9986787 779.74 8/31/2008 413.23 1.0147561 419.33 331 0.9981130 412.45 9/25/2008 137,198.89 1.0136340 139,069.47 306 0.9965432 136,724.62 9/30/2008 356.00 1.0134098 360.77 301 0.9962295 354.66 10/30/2008 33,977.35 1.0120652 34,387.29 271 0.9943496 33,785.36 10/31/2008 142.17 1.0120652 143.89 271 0.9943496 141.37 11/20/2008 2,055.62 1.0111699 2,078.58 251 0.9930983 2,041.43 11/30/2008 80.37 1.0107225 81.23 241 0.9924732 79.77 12/18/2008 42,304.83 1.0099177 42,724.39 223 0.9913491 41,938.86 12/31/2008 47.85 1.0093815 48.30 211 0.9906004 47.40 1,052.55 317.11 (0.00) Summary of: Fund 789-Red Fox Addition Arbitrage Rebate Amount: $ 317.11 Total Investment Earnings: 1,052.55 Investment Yield: 2.2795% Average Amount Invested: S 110,821 Total Time Invested: 0.42 years 10/13/2011 -9- Gibnore&Bell,P.C. City of Salina, Kansas General Obligation Temporary Notes Series 2008-1 Cash and Investment Activity Cash Transactions Investments Date Cash In Cash Out Balance Purchase Receipt Earnings Balance 7/30/2008 242,355.48 131,453.70 110,901.78 - 8/l/2008 110,901.78 - - Totals 242,355.48 242,355.48 - - - Cash Out Less Cash In: - Investment Receipts minus Purchases: - 10/13/2011 -10- Gibn ore&Be11,P.C. rr it �r rt rr r r r� � M rw r r w ow low r City of Salina, Kansas General Obligation Temporary Notes Series 2008-1 ACCOUNT NO. 4: Itind 770 - I-Ire Station #2 Arbitrage Rebate Computation Investment Yield Future Present Net Value Future Value Present Investment Factor @ Value to Number Factor @ Value to Date Activity 1.599532% 8/1/2009 of Days 0.000000% 7/30/2008 7/30/2008 - 1.0161042 - 361 1.0000000 - 8/1/2008 - 1.0160593 - 360 1.0000000 - Summary of: Fund 770-Fire Station#2 Arbitrage Rebate Amount: $ - Total Investment Earnings: - Investment Yield: 0.0000% Average Amount Invested: $ - Total Time Invested: 0.00 years 10/13/2011 -11- Gilmore&Bell,P.C. am No am Mw City of Salina, Kansas General Obligation Temporary Notes Series 2008-1 Cash and Investment Activity Total Cash Transactions Investments Cash and Date Cash In Cash Out Balance Purchase Receipt Earnings Balance Investments 7/30/2008 200,000.00 200,000.00 - 200,000.00 7/31/2008 - 200,000.00 - 200,000.00 8/1/2008 96,070.37 296,070.37 - - - Totals 296,070.37 296,070.37 - - - Cash Out Less Cash In: - Investment Receipts minus Purchases: - 10/13/2011 -12- Gilmore&Bell,P.C. City of Salina, Kansas General Obligation Temporary Notes Series 2008-1 Arbitrage Rebate Computation Investment Yield Future Present Net Value Future Value Present Investment Factor @ Value to Number Factor @ Value to Date Activity 1.599532% 8/1/2009 of Days 0.000000% 7/30/2008 7/30/2008 - 1.0161042 - 361 1.0000000 - 7/31/2008 - 1.0161042 - 361 1.0000000 - 8/l/2008 - 1.0160593 - 360 1.0000000 - Summary of: Fund 778-Downtown Traffic Signals Arbitrage Rebate Amount: $ - Total Investment Earnings: - Investment Yield: 0.0000% Average Amount Invested: $ - Total Time Invested: 0.00 years 10/13/2011 -13- Gilmore&Bell,P.C. Mw � M r City of Salina,Kansas General Obligation Temporary Notes Series 2008-1 Cash and Investment Activity Ire uted Interest Calculation Total Relevant Relevant Days Cash Transactions Investments Cash and Investment Invested Invested Imputed Date Cash In Cash Out Balance Purchase Receipt Earnings Balance Investments Rate Balance (Actual) Earnings 7/30/2008 812,644.52 812,644.52 812,644.52 812,644.52 2.1650% - - 7/31/2008 48.20 48.20 812,644.52 812,644.52 2.1650% 812,644.52 1 48.20 8/1/2008 748,842.76 830,929.02 748,842.76 830,929.02 730,558.26 730,558.26 2.2459% 812,644.52 1 50.00 8/7/2008 1,224.49 1,224.49 729,333.77 729,333.77 2.2459% 730,558.26 6 269.71 8/14/2008 1,524.18 1,524.18 727,809.59 727,809.59 2.2459% 729,333.77 7 314.14 8/31/2008 1,395.16 1,395.16 727,809.59 727,809.59 2.2459% 727,809.59 17 761.31 9/4/2008 1,325.34 1,325.34 726,484.25 726,484.25 2.2481% 727,809.59 4 179.31 9/11/2008 108.00 108.00 726,376.25 726,376.25 2.2481% 726,484.25 7 313.22 9/30/2008 1,342.57 1,342.57 726,376.25 726,376.25 2.2481% 726,376.25 19 850.04 10/8/2008 826.50 826.50 725,549.75 725,549.75 2.1672% 726,376.25 8 345.03 10/23/2008 135.00 135.00 725,414.75 725,414.75 2.1672% 725,549.75 15 646.20 10/31/2008 1,335.80 1,335.80 725,414.75 725,414.75 2.1672% 725,414.75 8 344.57 11/20/2008 378.00 378.00 725,036.75 725,036.75 2.2390% 725,414.75 20 889.97 11/30/2008 1,334.73 1,334.73 725,036.75 725,036.75 2.2390% 725,036.75 10 444.76 12/4/2008 89,198.04 89,198.04 635,838.71 635,838.71 2.2935% 725,036.75 4 182.23 12/11/2008 540.00 540.00 635,298.71 635,298.71 2.2935% 635,838.71 7 279.67 12/18/2008 114,355.31 114,355.31 520,943.40 520,943.40 2.2935% 635,298.71 7 279.44 12/31/2008 1,166.88 1,166.88 520,943.40 520,943.40 2.2935% 520,943.40 13 425.54 1/22/2009 187,472.70 187,472.70 333,470.70 333,470.70 2.1815% 520,943.40 22 684.98 1/31/2009 864.36 864.36 333,470.70 333,470.70 2.1815% 333,470.70 9 179.38 2/19/2009 369.00 369.00 333,101.70 333,101.70 1.7917% 333,470.70 19 311.02 2/26/2009 179,595.51 179,595.51 153,506.19 153,506.19 1.7917% 333,101.70 7 114.46 2/28/2009 440.55 440.55 153,506.19 153,506.19 1.7917% 153,506.19 2 15.07 3/12/2009 245.75 245.75 153,260.44 153,260.44 1.8035% 153,506.19 12 91.02 3/26/2009 60,330.06 60,330.06 92,930.38 92,930.38 1.8035% 153,260.44 14 106.02 3/31/2009 220.00 220.00 92,930.38 92,930.38 1.8035% 92,930.38 5 22.96 4/23/2009 70.00 70.00 92,860.38 92,860.38 1.9721% 92,930.38 23 115.48 4/30/2009 150.60 150.60 92,860.38 92,860.38 1.9721% 92,860.38 7 35.12 5/7/2009 16,019.01 16,019.01 76,841.37 76,841.37 2.1188% 92,860.38 7 37.73 5/14/2009 901.90 901.90 75,939.47 75,939.47 2.1188% 76,841.37 7 31.22 5/28/2009 61,962.11 61,962.11 13,977.36 13,977.36 2.1188% 75,939.47 14 61.72 5/31/2009 133.10 133.10 13,977.36 13,977.36 2.1188% 13,977.36 3 2.43 6/30/2009 13.92 13.92 13,977.36 13,977.36 1.2114% 13,977.36 30 13.92 7/31/2009 13.09 13.09 13,977.36 13,977.36 1.1030% 13,977.36 31 13.09 8/1/2009 13,977.76 - 13,977.36 0.40 - - 1.0476% 13,977.36 1 0.40 Totals 1,561,487.28 1,569,946.64 1,561,487.28 1,561,487.28 8,459.36 8,459.36 Cash Out Less Cash In: 8,459.36 Investment Receipts minus Purchases: 10/13/2011 -14- Gilmore&Bell,P.C. City of Salina,Kansas General Obligation Temporary Notes Series 2008-1 Arbitrage Rebate Com utatIon Investment Yield Future Present Net Value Future Value Present Investment Factor @ Value to Number Factor @ Value to Date Activity 1.599532% 8/1/2009 of Days 2.201269% 7/30/2008 7/30/2008 (812,644.52) 1.0161042 (825,731.55) 361 1.0000000 (812,644.52) 7/31/2008 48.20 1.0161042 48.98 361 1.0000000 48.20 8/1/2008 82,086.26 1.0160593 83,404.51 360 0.9999392 82,081.27 8/7/2008 1,224.49 1.0157895 1,243.82 354 0.9995744 1,223.97 8/14/2008 1,524.18 1.0154749 1,547.77 347 0.9991490 1,522.88 8/31/2008 1,395.16 1.0147561 1,415.75 331 0.9981773 1,392.62 9/4/2008 1,325.34 1.0145765 1,344.66 327 0.9979345 1,322.60 9/11/2008 108.00 1.0142623 109.54 320 0.9975098 107.73 9/30/2008 1,342.57 1.0134098 1,360.57 301 0.9963579 1,337.68 10/8/2008 826.50 1.0130511 837.29 293 0.9958733 823.09 10/23/2008 135.00 1.0123788 136.67 278 0.9949653 134.32 10/31/2008 1,335.80 1.0120652 1,351.92 271 0.9945418 1,328.51 11/20/2008 378.00 1.0111699 382.22 251 0.9933330 375.48 11/30/2008 1,334.73 1.0107225 1,349.04 241 0.9927291 1,325.03 12/4/2008 89,198.04 1.0105436 90,138.51 237 0.9924876 88,527.95 12/11/2008 540.00 1.0102306 545.52 230 0.9920652 535.72 12/18/2008 114,355.31 1.0099177 115,489.45 223 0.9916430 113,399.64 12/31/2008 1,166.88 1.0093815 1,177.83 211 0.9909196 1,156.28 1/22/2009 187,472.70 1.0083992 189,047.32 189 0.9895948 185,522.01 1/31/2009 864.36 1.0080423 871.31 181 0.9891135 854.95 2/19/2009 369.00 1.0071950 371.65 162 0.9879713 364.56 2/26/2009 179,595.51 1.0068831 180,831.68 155 0.9875508 177,359.69 2/28/2009 440.55 1.0067048 443.50 151 0.9874307 435.01 3/12/2009 245.75 1.0061704 247.27 139 0.9865904 242.45 3/26/2009 60,330.06 1.0055472 60,664.72 125 0.9857508 59,470.40 3/31/2009 220.00 1.0053692 221.18 121 0.9855110 216.81 4/23/2009 70.00 1.0043464 70.30 98 0.9841336 68.89 4/30/2009 150.60 1.0040353 151.21 91 0.9837147 148.15 5/7/2009 16,019.01 1.0037243 16,078.67 84 0.9832961 15,751.43 5/14/2009 901.90 1.0034134 904.98 77 0.9828776 886.46 5/28/2009 61,962.11 1.0027919 62,135.10 63 0.9820411 60,849.34 5/31/2009 133.10 1.0027032 133.46 61 0.9819217 130.69 6/30/2009 13.92 1.0013728 13.94 31 0.9801320 13.64 7/31/2009 13.09 1.0000443 13.09 1 0.9783455 12.81 8/1/2009 13,977.76 1.0000000 13,977.76 - 0.9782860 13,674.25 8,459.36 2,329.64 (0.00) Summary of: Fund 779-West Diamond Drive Arbitrage Rebate Amount: S 2,329.64 10/13/2011 -Is- Gilmore&Bell,P.C. City of Salina,Kansas General Obligation Temporary Notes Series 2008-1 Arbitrage Rebate Com utation Investment Yield Future Present Net Value Future Value Present Investment Factor @ Value to Number Factor @ Value to Date Activity 1.599532% 8/1/2009 of Days 2.201269% 7/30/2008 Total Investment Earnings: 8,459.36 Investment Yield: 2.2013% Average Amount Invested: $ 383,230 Total Time Invested: 1.00 years 10/13/2011 -16- Gilmore&Bell,P.C. ,�. �. �• mm m mm City of Salina, Kansas General Obligation Temporary Notes Series 2008-1 Arbitrage Rebate Computation Future Value Future Factor @ Value to Number Date Description Amount 1.599532% 8/1/2009 of Days 8/1/2008 Computation Credit (1,430.00) 1.0160593 (1,452.96) 360 8/l/2009 Computation Credit (1,490.00) 1.0000000 (1,490.00) - (2,920.00) Total Adjustments: $ (2,942.96) 10/13/2011 -17- Gilmore&Be]],P.C. City of Salina, Kansas General Obligation Temporary Notes Series 2008-1 Wei-lited Averaue Yields as Provided bN Issuer Month Month Bez. Month End. Overall Yld Jul-08 7/1/2008 7/31/2008 2.165% Aug-08 8/1/2008 8/31/2008 2.246% Sep-08 9/1/2008 9/30/2008 2.248% Oct-08 10/1/2008 10/31/2008 2.167% Nov-08 11/1/2008 11/30/2008 2.239% Dec-08 12/1/2008 12/31/2008 2.294% Jan-09 1/1/2009 1/31/2009 2.182% Feb-09 2/1/2009 2/28/2009 1.792% Mar-09 3/1/2009 3/31/2009 1.804% Apr-09 4/1/2009 4/30/2009 1.972% May-09 5/1/2009 5/31/2009 2.119% Jun-09 6/1/2009 6/30/2009 1.211% Jul-09 7/1/2009 7/31/2009 1.103% Aug-09 8/1/2009 8/31/2009 1.048% 10/13/2011 -18- Gilmore&Bell,P.C. M � M � i Exhibit C 18-Month Spending Analysis Completed as of August 1, 2009 City of Salina, Kansas General Obligation Temporary Notes Series 2008-1 GILMOREBELL City of Salina, Kansas General Obligation Temporary Notes Series 2008-1 Required Required Actual Percent of Amount of Percent of Modified Modified Modified Excess/ Number End Gross Gross Actual Gross (Shortfall) of of Proceeds Proceeds Cumulative Proceeds Over Spending Months Period to be Spent to be Spent Expenditures Spent Requirement 6 1/30/2009 15% 294,582.24 1,963,881.58 100.0% 1,669,299.34 12 7/30/2009 60% 1,178,328.95 1,963,881.58 100.0% 785,552.63 18 1/30/2010 100% 1,963,881.58 1,963,881.58 100.0% 0.00 10/13/2011 -1- Gilmore&Bell,P.C. City of Salina, Kansas General Obligation Temporary Notes Series 2008-1 Amount Principal Amount 1,950,000.00 Plus Original Premium(Less Original Issue Discount) 10,973.54 Sale Proceeds 1,960,973.54 Plus: Expected Earnings on Sale Proceeds 2,908.04 Modified Gross Proceeds for the 6-Month and 12-Month Objectives:* $ 1,963,881.58 Modified Gross Proceeds for the 18-Month Objective: Sale Proceeds Original Modified Gross Proceeds: 1,960,973.54 Plus Actual Earnings 2,908.04 Final Modified Gross Proceeds: $ 1,963,881.58 Spending Requirements Cumulative Percentage of Modified Time Period Gross Proceeds after Issue Date to be Spent 6 Months 15% 12 Months 60% 18 Months 100% *Modified Gross Proceeds are computed with actual investment earnings at 18 months and afterward. 10/13/2011 -2- Gibnote&Be11,P.C. � r r r � ■A ■� � � ■r� r r r r w w �r w w City of Salina,Kansas General Obligation Temporary Notes Series 2008-1 Relevant Relevant Days Interest Cumulative Investment Invested Invested Imputed Date Fund Deposits Earnings Expenditures Expenditures Balance Rate Balance (Actual) Earnings 7/30/2008 788 829,642.65 469,971.21 469,971.21 359,671.44 2.17% 7/30/2008 721 553,095.10 420,455.00 890,426.21 492,311.54 2.17% 7/30/2008 789 578,235.79 357,021.56 1,247,447.77 713,525.77 2.17% - - 7/31/2008 42.32 42.32 1,247,490.09 713,525.77 2.17% 713,525.77 1 42.32 8/7/2008 788 1,236.00 1,248,726.09 712,289.77 2.25% 713,525.77 7 307.33 8/7/2008 721 754.25 1,249,480.34 711,535.52 2.25% - - 8/7/2008 789 785.25 1,250,265.59 710,750.27 2.25% - - 8/14/2008 788 1,543.98 1,251,809.57 709,206.29 2.25% 710,750.27 7 306.13 8/14/2008 721 837.65 1,252,647.22 708,368.64 2.25% - - 8/14/2008 789 875.73 1,253,522.95 707,492.91 2.25% - - 8/21/2008 788 72,629.46 1,326,152.41 634,863.45 2.25% 707,492.91 7 304.73 8/21/2008 721 35,588.40 1,361,740.81 599,275.05 2.25% - - 8/21/2008 789 780.77 1,362,521.58 598,494.28 2.25% - - - 8/31/2008 1,286.45 1,286.45 1,363,808.03 598,494.28 2.25% 598,494.28 10 368.26 9/25/2008 788 219,494.70 1,583,302.73 378,999.58 2.25% 598,494.28 25 921.56 9/25/2008 721 40,816.86 1,624,119.59 338,182.72 2.25% - - 9/25/2008 789 137,198.89 1,761,318.48 200,983.83 2.25% - - 9/30/2008 983.45 983.45 1,762,301.93 200,983.83 2.25% 200,983.83 5 61.89 10/30/2008 788 64,767.30 1,827,069.23 136,216.53 2.17% 200,983.83 30 358.00 10/30/2008 721 3,260.26 1,830,329.49 132,956.27 2.17% - - 10/30/2008 789 33,977.35 1,864,306.84 98,978.92 2.17% - - 10/31/2008 363.88 363.88 1,864,670.72 98,978.92 2.17% 98,978.92 1 5.88 11/18/2008 789 2,284.05 1,866,954.77 96,694.87 2.24% 98,978.92 18 109.29 11/20/2008 721 51,382.68 1,918,337.45 45,312.19 2.24% 96,694.87 2 11.86 11/20/2008 789 2,055.62 1,920,393.07 43,256.57 2.24% - - 11/30/2008 147.68 147.68 1,920,540.75 43,256.57 2.24% 43,256.57 10 26.53 12/31/2008 789 43,256.57 1,963,797.32 - 2.29% 43,256.57 31 84.26 12/31/2008 84.26 84.26 1,963,881_58 2.29% - - Total 1,960,973.54 2,908.04 1,963,881.58 2,908.04 "Costs of issuance,including underwriting fees and credit enhancement fees paid from bond proceeds,are included in Expenditures. In addition,payment of interest(but not principal) counts as an expenditure under the 18-month spending test. 10/13/2/111 3 Gilmore&Bell,P.C. City of Salina, Kansas General Obligation Temporary Notes Series 2008-1 Weighted Average Yields as Provided bN Issuer Month Month Beg. Month End. Overall Yld Jul-08 7/1/2008 7/31/2008 2.165% Aug-08 8/1/2008 8/31/2008 2.246% Sep-08 9/1/2008 9/30/2008 2.248% Oct-08 10/1/2008 10/31/2008 2.167% Nov-08 11/1/2008 11/30/2008 2.239% Dec-08 12/1/2008 12/31/2008 2.294% Jan-09 1/1/2009 1/31/2009 2.182% Feb-09 2/1/2009 2/28/2009 1.792% Mar-09 3/1/2009 3/31/2009 1.804% Apr-09 4/1/2009 4/30/2009 1.972% May-09 5/1/2009 5/31/2009 2.119% Jun-09 6/l/2009 6/30/2009 1.211% Jul-09 7/1/2009 7/31/2009 1.103% Aug-09 8/1/2009 8/31/2009 1.048% 10/13/2011 -4- Gilmore&Bell,P.C.