Arbitrage Report (07-2011) GILMORE 8c 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.GILMORESELL.COM KANSAS CITY, MISSOURI 64108-2521 LINCOLN,NEBRASKA
July 29,2011
Mr. Rod Franz •
Director of Finance
City of Salina
City Hall - 300 West Ash
Salina, Kansas 67402-0736
•
Re: $6,790,000 The City of Salina, Kansas Water & Sewage System Revenue Refunding
Bonds, Series 2002-A(the"Bonds")
Dear Mr. Franz:
Enclosed are our legal opinion and the rebate computation report prepared in connection with the
above-referenced Bonds. No arbitrage rebate.was generated on the Bonds through the final computation
date(April 28, 2011),the date the Bonds were redeemed in full. Rebate was safe by$108,729.53.
Please call me if you have any questions.
Very truly yours,
pfdru_Acia-K,
Jennifer L. Richardson
JLR:sg
Enclosures
•
cc: Randy Trey
Meghan Wiedel
Michael D. McRobbie
GILMORE & BELL
A PROFESSIONAL CORPORATION
ATTORNEYS AT LAW
816-221-1000 ST.LOUIS,MISSOURI
FAX'816-221-1016 2405 GRAND BOULEVARD,SUITE 1100 WICHITA,KANSAS
WWW.OILMOREBELL COM KANSAS CITY, MISSOURI 64108-2521 LINCOLN,NEBRASKA
July 29,2011
City of Salina, Kansas
Re: $6,790,000 The City of Salina, Kansas Water & Sewage System Revenue Refunding
Bonds, Series 2002-A(the"Bonds")
Ladies and Gentlemen:
We have acted as arbitrage rebate counsel for the above-referenced Bonds issued by the City of
Salina, Kansas (the "Issuer"), on August 29, 2002 (the "Issue Date"). As arbitrage rebate counsel we have
examined the law and such other documents, proceedings and other papers as we deem necessary to render
this opinion, including certain account transaction statements provided by the Issuer which describe the
deposits,disbursements and investment activities in certain funds and accounts held by the Issuer during the
period beginning on August 29, 2007 and ending on April 28, 2011, the date the Bonds were redeemed in
full.
As to questions of fact material to our opinion, we have relied upon the information furnished to us
by the Issuer without undertaking to verify the same by independent investigation. In addition, we have
assumed that all investments acquired with gross proceeds of the Bonds were purchased and sold at fair
market value pursuant to arm's-length transactions.
Amounts held in a "bona fide debt service fund" are not taken into account in computing
arbitrage rebate. A"bona fide debt service fund" is a fund that—
(I) 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 principal and interest account qualified as a bona fide debt service fund in
each bond year during the computation period.
Based upon the foregoing, we are of the opinion that,under existing law:
1. The amount earned from the investment of the gross proceeds of the Bonds subject to
arbitrage rebate as of April 28, 2011 was $108,729.53 less than the amount which would have been earned
if such proceeds had been invested at a rate equal to the yield on the Bonds, computed in accordance with
Section 148(f)of the Internal Revenue Code of 1986,as amended(the"Code").
2. No rebate is payable at this time to the United States in connection with the Bonds under
Section 148(f)of the Code.
3. No arbitrage rebate will be generated in the future under Section 148(t)of the Code,and no
further computation of rebate will be required.
We have not been engaged nor have we undertaken to verify the truth or accuracy of any
information provided to us by the Issuer, and we express no opinion relating to such information. In
addition,we express no opinion as to whether the investments allocated to gross proceeds of the Bonds were
acquired and sold at fair market value.
Very truly yours,
Ar:/efrri_dije „151e,15,C.
MDM:jlr
GIL .TORE & BELL, P.C.
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Arbitrage Rebate Analysis
Computed as of April 28, 2011
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City of Salina, Kansas
Water & Sewage System Revenue Refunding Bonds
Series 2002A
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GILMOIJE BELL
G I L M O R E & D E L L, P C
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ICity of Salina, Kansas
Water& Sewage System Revenue Refunding Bonds
tSeries 2002A
I AR13ITRACI: REBATE ANALYSIS
Results as of April 28,2011
ISummary of Issue
Par $6,790,000
Issue Date August 29,2002
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Bond Year Date September 1
Bond Yield 3.40619%
Computation Date April 28,2011
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Prior Computation Date August 29,2007
ISummary of Rebate Computation _
Computation Results Rebate Liability by Source
I • Total Rebate Amount ($ 108,729.53) Series 2002-A
Reserve Account (63,982.06)
Credits& I
(44,747.47)
Adjustments I
t • No arbitrage rebate payment is due at this time. (108,729.53)
The net rebate amount as of April 28,2011 is Total Rebate Amount
($108,729.53). 1
I ($150,000) ($75,000) $0
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IComments and Yield Comparison
Yield Comparison
I Comments As of 4/28/2011
6.00%
• No future calculations will be necessary if the Bond Yield=3.41%
I conditions in our opinion are met.
4.00%-
I 2.00%-
1.02%
0.00% ME
Series 2002-A Reserve
lAccount
1 7/29/2011 -1- Gilmore&Bell,P.C.
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I City of Salina, Kansas
Water&z Sewage System Revenue Refunding Bonds
Series 2002A
IACCOUNT NO. 1: Series 2002-A Reserve Account
IInvestment Activity
IInvestment Investment Invested
Date Purchase Receipt Earnings Balance
I 8/29/2007 773,506.96
I (2,882.91)1 773,506.96
8/31/2007 3,191.79 3,191.79 776,698.75
9/30/2007 3,017.54 3,017.54 779,716.29
I 10/31/2007 3,029.08 3,029.08 782,745.37
11/30/2007 2,771.66 2,771.66 785,517.03
12/31/2007 2,799.79 2,799.79 788,316.82
I 1/31/2008 2,543.87 2,543.87 790,860.69
2/29/2008 1,792.66 1,792.66 792,653.35
3/26/2008 113,653.35 679,000.00
I3/31/2008 1,552.77 1,552.77 680,552.77
4/30/2008 1,127.85
1,127.85 681,680.62
5/31/2008 1,096.94 1,096.94 682,777.56
I6/30/2008 1,085.81 1,085.81 683,863.37
7/31/2008 1,108.95 1,108.95 684,972.32
8/31/2008 1,106.97 1,106.97 686,079.29
I9/30/2008 925.04 925.04 687,004.33
10/31/2008 291.22 291.22 687,295.55
I 11/30/2008 96.92 96.92 687,392.47
12/31/2008 26.64 26.64 687,419.11
1/31/2009 44.25 44.25 687,463.36
I 2/28/2009 55.57 55.57 687,518.93
3/31/2009 45.47 45.47 687,564.40
4/30/2009 39.96 39.96 687,604.36
I 5/31/2009 40.76 40.76 687,645.12
6/30/2009 42.65 42.65 687,687.77
7/31/2009 40.92 40.92 687,728.69 1 l
I 8/31/2009 40.73 40.73 687,769.42
9/30/2009 33.54 33.54 687,802.96
10/31/2009 23.50 23.50 687,826.46
I 11/30/2009 21.78 21.78 687,848.24
12/31/2009 21.77 21.77 687,870.01
1/31/2010 19.95 19.95 687,889.96
I 2/28/2010 26.32 26.32 687,916.28
3/31/2010 35.60 35.60 687,951.88
4/30/2010 46.63 46.63 687,998.51
1 5/31/2010 55.40 55.40 688,053.91
6/30/2010 55.19 55.19 688,109.10
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IACCOUNT NO. 1: Series 2002-A Reserve Account
Investment Activity
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Investment Investment Invested
IDate Purchase Receipt Earnings Balance
7/31/2010 61.65 61.65 688,170.75
I 8/31/2010 60.36 60.36
54.94 688,231.11
9/30/2010 54.94 688,286.05
10/31/2010 46.24 46.24 688,332.29
I 11/30/2010 45.30 45.30
40.16 688,377.59
12/31/2010 40.16 688,417.75
1/31/2011 34.08 34.08 688,451.83
I 2/28/2011 31.64 31.64 688,483.47
3/31/2011 31.80 31.80 688,515.27
4/28/2011 688,515.27 16.04 -
I Totals 802,168.62 802,168.62 25,794.79
IInvestment Receipts minus Purchases: -
Kansas Investment Pool Accrual
I From 8/1/2007
8/29/2007 4/1/2011
To 4/28/2011
Days 28 27
I Posted Amt. 3,191.79 17.82
Daily Rate 102.96 0.59
Accrual 2,882.91 I 16.04
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I City of Salina, Kansas
Water& Sewage System Revenue Refunding Bonds
Series 2002A
IACCOUNT NO. 1: Series 2002-A Reserve Account
IArbitrage Rebate Computation I Investment Yield
Future Present
Net Value Future Value Present
IInvestment Factor @ Value to Number Factor @ Value to
Date Activity 3.406194% 4/28/2011 of Days 1.017510% 8/29/2007
I 8/29/2007 (776,389.87) 1.1317310 (878,664.50) 1,319 1.0000000 (776,389.87)
8/31/2007 1.1316249 1,318 0.9999436
9/30/2007 - 1.1284443 - 1,288 0.9991264 -
' 10/31/2007 - 1.1252726 - 1,258 0.9982536 -
11/30/2007 1.1221099 1,228 0.9974378
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12/31/2007 - 1.1189560 - 1,198 0.9965664 -
' 1/31/2008 1.1158111 - 1,168 0.9957239 -
2/29/2008 - 1.1126749 - 1,138 0.9949382 -
3/26/2008 113,653.35 1.1099641 126,151.13 1,112 0.9941811 112,992.02
I3/31/2008 - 1.1095476 - 1,108 0.9940410 -
4/30/2008 - 1.1064291 - 1,078 0.9932286 -
5/31/2008 - 1.1033193 - 1,048 0.9923610 -
II6/30/2008 - 1.1002183 - 1,018 0.9915500 -
7/31/2008 - 1.0971259 - 988 0.9906838 -
I 8/31/2008 - 1.0940423 - 958 0.9898462 -
9 /30/2008 1.0909674 928 0.9890373
10/31/2008 - 1.0879010 - 898 0.9881733 -
II 11/30/2008 - 1.0848434 - 868 0.9873657 -
12/31/2008 1.0817943 838 0.9865031
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1/31/2009 - 1.0787537 - 808 0.9856691 -
I 2/28/2009 - 1.0757217 - 778 0.9849191 -
3/31/2009 1.0726983 748 0.9840032
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4/30/2009 - 1.0696833 - 718 0.9831990 -
' 5/31/2009 - 1.0666768 - 688 0.9823401 -
6/30/2009 - 1.0636788 658 0.9815373
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7/31/2009 - 1.0606892 - 628 0.9806799 -
II 8/31/2009 - 1.0577079 - 598 0.9798508 -
9/30/2009 - 1.0547351 568 0.9790500
10/31/2009 - 1.0517706 - 538 0.9781947 -
' 11/30/2009 - 1.0488145 - 508 0.9773953 -
12/31/2009 1.0458667 478 0.9765414
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1/31/2010 - 1.0429271 - 448 0.9757159 -
' 2/28/2010 - 1.0399958 - 418 0.9749734 -
3/31/2010 1.0370728 388 0.9740668
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4/30/2010 - 1.0341579 - 358 0.9732707 -
I 5/31/2010 - 1.0312513 - 328 0.9724205 -
6/30/2010 - 1.0283528 298 0.9716258 -
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IACCOUNT NO. 1: Series 2002-A Reserve Account
Arbitrage Rebate Computation I Investment Yield
I Future Present
Net Value Future Value Present
Investment Factor @ Value to Number Factor @ Value to
IDate Activity 3.406194% 4/28/2011 of Days 1.017510% 8/29/2007
7/31/2010 - 1.0254625 - 268 0.9707770 -
I 8/31/2010 1.0225803 - 238 0.9699563 -
9/30/2010 1.0197062 208 0.9691636
10/31/2010 1.0168402 - 178 0.9683169 -
I 11/30/2010 - 1.0139822
1.0111322 - 148 0.9675256 -
12/31/2010 118 0.9666804
1/31/2011 - 1.0082903 - 88 0.9658631 -
I 2/28/2011 1.0054564 - 58 0.9651282 -
3/31/2011 1.0026304 28 0.9642307
4/28/2011 688,531.31 1.0000000 688,531.31 - 0.9634970 663,397.85
25,794.79 (63,982.06) 0.00
ISummary of: Series 2002-A Reserve Account
Arbitrage Rebate Amount: $ (63,982.06)
1 Total Investment Earnings: 25,794.79
Investment Yield: 1.0175%
I Average Amount Invested: $ 691,913
Total Time Invested: 3.66 years
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I7/29/2011 -5- Gilmore&Bell,P.C.
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I City of Salina, Kansas
Water& Sewage System Revenue Refunding Bonds
Series 2002A
COMPUTATION CREDITS AND ADJUSTMENTS
IArbitrage Rebate Computation
Future
Value Future
IFactor @ Value to Number
Date Description Amount 3.406194% 4/28/2011 of Days
I 8/29/2007 Prior Rebate Amount (33,066.21) 1.1317310 (37,422.06) 1,319
9/1/2007 Computation Credit (1,000.00) 1.1315187 (1,131,52) 1,317
9/1/2008 Computation Credit (1,430.00) 1.0939397 (1,564.33) 957
I 9/1/2009 Computation Credit (1,490.00) 1.0576087 (1,575,84) 597
9/1/2010 Computation Credit (1,500.00) 1.0224843 (1,533,73) 237
4/28/2011 Computation Credit (1,520.00) 1.0000000 (1,520.00) -
I (40,006.21)
ITotal Adjustments: $ (44,747.47)
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I7/29/2011 -6- Gilmore&Bell,P.C.
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