Arbitrage Report (05-2011) 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
May 5, 2011
Mr. Rod Franz
Director of Finance
City of Salina
City Hall -300 West Ash
Salina,KS 67402-0736
Re: $3,525,000 City of Salina, Kansas General Obligation Internal Improvement Bonds, Series
2008-B
Dear Rod:
Enclosed is a copy of the rebate computation report prepared in connection with the above-
referenced issue. No arbitrage rebate was generated on the Bonds as of December 1,2010; rebate was safe
by$28,942.36.
Under the Internal Revenue Code, the first required installment computation date is the earlier of
December 23,2013 or the date the last Bond is paid. The next annual computation date will be December I,
2011.
Please call me if you have any questions.
Very truly yours,
Jennifer L. Richardson
JLR:sg
Enclosures -
cc: Bonnie Mosher(with enclosures)
Gary Anderson
NS NEI s - a a =■ a S - - a a a i
Arbitrage Rebate Analysis
Computed as of December 1, 2010
City of Salina, Kansas
General Obligation Internal Improvement Bonds
Series 2008-B
1/i
GILMOI,E BELL
G I L M O R E 6 BELL, P C
IMO MI =I MI 1111111 MN NM 111•11 IIIIIII 1111111 1•111111 IIIIIII NM MIMI
City of Salina, Kansas
General Obligation Internal Improvement Bonds
Series 2008-B
ARBITRAGE REBATE ANALYSIS
Results as of December 1,2010
Summary of Issue Allocation of Proceeds
Par $3,525,000 Project Fund
Issue Date December 23,2008
85.0%
Bond Year Date July 1 Reserve Fund
6.8%
Bond Yield 4.36129%
COI
Computation Date December 1,2010 1.4%
Debt Service
Fund
6.8%
Summary of Rebate Computation
Computation Results Rebate Liability by Source
• Total Rebate Amount ($28,942.36) Debt Service Funds-Bond Year Ending (6,324.97)
7.1.2010
Debt Service Funds-Bond Year Ending
7.1.2009 (1,056.43)
Costs of Issuance Fund (326.54)
Project Fund (1,278.73)
• No arbitrage rebate payment is due at this time.
The net rebate amount as of December 1,2010 is Debt Service Reserve Fund (16,844.57)
($28,942.36).
Credits&Adjustments (3,111.12)
Total Rebate Amount (28,942.36)
($50,000) ($25,000) $0
5/4/2011 -1- Gilmore&Bell,P.C.
r —
City of Salina, Kansas
General Obligation Internal Improvement Bonds
Series 2008-B
ARBITRAGE REBATE ANALYSIS
Comments and Yield Comparison
Comments Yield Comparison
As of 12/1/2010
• Debt Service Accounts failed to qualify as a bona 8.00%
fide debt service fund for all bond years during this
6.00% Bond Yield=4.36%
computation period.
• The next annual rebate computation will be 4.00%
12/1/2011.
2.00%o ..
0.00%
Debt Project Costs of Debt Debt
Service Fund Issuance Service Service
Reserve Fund Funds- Funds-
Fund Bond Year Bond Year
Ending Ending
7.1.2009 7.1.2010
5/4/2011 -2- Gll pore&Bell,P.C.
MIN NM I — — — — I =■ .. .. = I NM I .. —
City of Salina, Kansas
General Obligation Internal Improvement Bonds
Series 2008-B
ARBITRAC:E REBATE ANALYSIS
Results as of December 1,2010
Summary of Debt Service Accounts
Issue Date December 23,2008
Bond Year Date July 01
Funds/Accounts • Revenue Fund
• Debt Service Fund
• Redemption Fund
Bona Fide Debt Service Fund Test
Analysis of Debt Service Fund Balances
Bond Year Debt Service
End Date Minimum Balance Reasonable Carryover Funds Depleted
July 1,2009 $ 154,595 $ 7,014 No
July 1,2010 154,595 12,883 No
Conclusions
• The Debt Service Accounts failed to qualify as a bona fide debt service fund. Funds were not
depleted for bond years ended 7/1/2009 and 7/1/2010. We computed rebate on the portion of
funds in excess of a reasonable carryover amount for these time periods.
5/4/2011 -3- Gilmore&Bell,P.C.
M I MN M MN M M NM IIIIII M = MN MI MN I M MI MN I
City of Salina, Kansas
General Obligation Internal Improvement Bonds
Series 2008-B
ACCOUNT NO. 1: Debt Ser.ice Reserve Fund
Cash and Investment Activity
Total
Cash Transactions Investments Cash and
Date Cash In Cash Out Balance Purchase Receipt Earnings Balance Investments
12/23/2008 240,000.00 240,000.00 - 240,000.00
5/5/2009 - 240,000.00 240,000.00 240,000.00
12/1/2010 240,000.00 - 240,000.00 - -
Totals 240,000.00 240,000.00 240,000.00 240,000.00 -
Cash Out Less Cash In: -
Investment Receipts minus Purchases: -
5/4/2011 -4- Gilmore&Bell,P.C.
N I = MN IONI M N N MI MI MN MI M N MN NM NM
City of Salina, Kansas
General Obligation Internal Improvement Bonds
Series 2008-B
ACCOUN"f NO. I: Debt Service Reserve Fund
Arbitrage Rebate Computation I Investment Yield
Future Present
Net Value Future Value Present
Investment Factor @ Value to Number Factor @ Value to
Date Activity 4.361287% 12/1/2010 of Days 0.000000% 12/23/2008
12/23/2008 - 1.0872502 - 698 1.0000000 -
5/5/2009 (240,000.00) 1.0701857 (256,844.57) 566 1.0000000 (240,000.00)
12/1/2010 240,000.00 1.0000000 240,000.00 - 1.0000000 240,000.00
(16,844.57) 0.00
Summary of: Debt Service Reserve Fund
Arbitrage Rebate Amount: $ (16,844.57)
Total Investment Earnings: -
Investment Yield: 0.0000%
Average Amount Invested: 240,000.00
Total Time Invested: 1.94 years
5/4/2011 -5- Gilmore&Bell,P.C.
N NM I MN ME = = NM MI MI NM N MI MN MI
City of Salina, Kansas
General Obligation Internal Improvement Bonds
Series 2008-B
ACCOUNT NO. 2: Project Fund
Cash and Investment Activity
Total
Cash Transactions I Investments ( Cash and
Date Cash In Cash Out Balance Purchase Receipt Earnings Balance Investments
12/23/2008 3,000,000.00 2,800,000.00 200,000.00 - 200,000.00
5/5/2009 - 200,000.00 200,000.00 200,000.00
6/25/2009 200,000.00 - 200,000.00 - -
Totals 3,000,000.00 3,000,000.00 200,000.00 200,000.00 -
Cash Out Less Cash In: -
Investment Receipts minus Purchases: -
5/4/2011 -6- Gilmore&Bell,P.C.
NM MN I NM NM I NE NM MN NM MI MI MN N I
City of Salina, Kansas
General Obligation Internal Improvement Bonds
Series 2008-B
ACCOUNT NO. 2: Project Fund
Arbitrage Rebate Computation I Investment Yield
Future Present
Net Value Future Value Present
Investment Factor® Value to Number Factor @ Value to
Date Activity 4.361287% 12/1/2010 of Days 0.000000% 12/23/2008
12/23/2008 - 1.0872502 - 698 1.0000000 -
5/5/2009 (200,000.00) 1.0701857 (214,037.14) 566 1.0000000 (200,000.00)
6/25/2009 200,000.00 1.0637921 212,758.41 516 1.0000000 200,000.00
-
(1,278.73) -
Summary of: Project Fund
Arbitrage Rebate Amount: $ (1,278.73)
Total Investment Earnings: -
Investment Yield: 0.0000%
Average Amount Invested: $ 200,000
Total Time Invested: 0.51 years
5/4/2011 -7- Gilmore&Bell,P.C.
MI M MN MI — 1 NM U NM i = NM M MI OM NMI E OM i
City of Salina, Kansas
General Obligation Internal Improvement Bonds
Series 2008-B
ACCOUNT NO.3: Costs of Issuance Fund
Cash and Investment Activity
Total
Cash Transactions I Investments Cash and
Date Cash In Cash Out Balance Purchase Receipt Earnings Balance Investments
12/23/2008 49,672.05 49,672.05 - 49,672.05
12/30/2008 33,548.26 16,123.79 - 16,123.79
1/23/2009 5,279.00 10,844.79 - 10,844.79
5/5/2009 - 10,844.79 10,844.79 10,844.79
5/11/2009 5,250.00 - 5,250.00 5,594.79 5,594.79
8/17/2010 5,594.79 - 5,594.79 - -
Totals 49,672.05 49,672.05 10,844.79 10,844.79 -
Cash Out Less Cash In: -
Investment Receipts minus Purchases: -
5/4/2011 -8- Gilmore&Bell,P.C.
— r N I NM MI MN — NM r — MN MN NM MN I MS — MN
City of Salina, Kansas
General Obligation Internal Improvement Bonds
Series 2008-B
ACCOUNT NO.3: Costs of Issuance Fund
Arbitrage Rebate Computation I Investment Yield
Future Present
Net Value Future Value Present
Investment Factor @ Value to Number Factor @ Value to
Date Activity 4.361287% 12/1/2010 of Days 0.000000% 12/23/2008
12/23/2008 - 1.0872502 - 698 1.0000000 -
12/30/2008 - 1.0863384 - 691 1.0000000 -
1/23/2009 - 1.0833481 - 668 1.0000000 -
5/5/2009 (10,844.79) 1.0701857 (11,605.94) 566 1.0000000 (10,844.79)
5/11/2009 5,250.00 1.0694164 5,614.44 560 1.0000000 5,250.00
8/17/2010 5,594.79 1.0125419 5,664.96 104 1.0000000 5,594.79
(326.54) -
Summary of: Costs of Issuance Fund
Arbitrage Rebate Amount: $ (326.54)
Total Investment Earnings: -
Investment Yield: 0.0000%
Average Amount Invested: $ 5,663
Total Time Invested: 1.65 years
5/4/2011 -9- Gilmore&Bell,P.C.
NE = N N NM ' — ' IIIIIII M = MI MI IIIIIII OM NM MI —
City of Salina, Kansas
General Obligation Internal Improvement Bonds
Series 2008-B
ACCOLN'f NO.4: Debt Seri ice Funds- Bond %ear Ending 7.1.2009
Cash and Investment Activity
Total
Cash Transactions I Investments Cash and
Date Account Cash In Cash Out Balance Purchase Receipt Earnings Balance Investments
12/23/2008 Debt Service Fun( 238,763.39 238,763.39 - 238,763.39
5/5/2009 Debt Service Fund - 238,763.39 238,763.39 238,763.39
7/1/2009 Debt Service Fund 84,168.31 - 84,168.31 154,595.08 154,595.08
7/1/2009 Debt Service Fund 154,595.08 - 154,595.08 - -
Totals 238,763.39 238,763.39 238,763.39 238,763.39 238,763.39 -
Cash Out Less Cash In: -
Investment Receipts minus Purchases: -
5/4/2011 -10- Gilmore&Bell,P.C.
NM NM MN IIIIIIII MN NM MN i♦ — MI i♦ MN NM N MN NM — 1♦
City of Salina, Kansas
General Obligation Internal Improvement Bonds
Series 2008-B
ACCO1\T NO.4: Debt Sere ice Funds- Bond Year Ending 7.1.2009
Arbitrage Rebate Computation I Investment Yield
Future Present
Net Value Future Value Present
Investment Factor @ Value to Number Factor @. Value to
Date Activity 4.361287% 12/1/2010 of Days 0.000000% 12/23/2008
12/23/2008 - 1.0872502 - 698 1.0000000 -
5/5/2009 (238,763.39) 1.0701857 (255,521.17) 566 1.0000000 (238,763.39)
7/1/2009 84,168.31 1.0630274 89,473.22 510 1.0000000 84,168.31
7/1/2009 154,595.08 1.0630274 164,338.81 510 1.0000000 154,595.08
(1,709.14) -
Summary of: Debt Service Funds-Bond Year Ending 7.1.2009
Total bond-year debt service: 84,168.31
Minimum balance during bond year: 154,595.08
Less 1/12 of total bond-year debt service (7,014.03)
Total surplus over reasonable carryover amount $147,581.05
Tax-exempt portion of surplus 100.00% 147,581.05
Net arbitrage rebate=computed rebate x(tax-exempt surplus/average invested balance)
Arbitrage Rebate Amount: $ (1,056.43)
Total Investment Earnings: -
Investment Yield: 0.0000%
Average Amount Invested: $ 238,763
Total Time Invested: 0.52 years
5/4/2011 -11- Gilmore&Bell,P.C.
MN MN MOI N — MI Mil — 1=1 Mil NM NE MN NM M ME 1.01 MIN MN
City of Salina,Kansas
General Obligation Internal Improvement Bonds
Series 2008-B
ACCOUNT NO.5: Debt Service Funds-Bond Year Ending 7.1.2010
Cash and Investment Activity
Total
Cash Transactions I Investments Cash and
Date Account Cash In Cash Out Balance Purchase Receipt Earnings Balance Investments
7/1/2009 Debt Service Fund 154,595.08 - 154,595.08 154,595.08 154,595.08
8/18/2009 Revenue Fund 29,429.52 29,429.52 154,595.08 184,024.60
9/1/2009 Debt Service Fund 29,429.52 0.05 0.05 154,595.13 184,024.65
9/14/2009 Revenue Fund 26,214.28 55,643.80 154,595.13 210,238.93
10/1/2009 Debt Service Fund 55,643.80 0.92 0.92 154,596.05 210,239.85
10/13/2009 Revenue Fund 15,265.43 70,909.23 154,596.05 225,505.28
11/2/2009 Debt Service Fund 70,909.23 3.23 3.23 154,599.28 225,508.51
12/1/2009 Debt Service Fund 70,909.23 3.90 3.90 154,603.18 225,512.41
12/7/2009 Revenue Fund 25,636.00 96,545.23 154,603.18 251,148.41
12/8/2009 Revenue Fund 96,545.23 - 154,603.18 154,603.18
12/8/2009 Debt Service Fund 96,545.23 - 96,545.23 251,148.41 251,148.41
1/4/2010 Debt Service Fund 77,297.50 - 77,292.54 4.96 173,855.87 173,855.87
2/1/2010 Debt Service Fund - 3.78 3.78 173,859.65 173,859.65
2/16/2010 Revenue Fund 47,719.84 47,719.84 173,859.65 221,579.49
3/1/2010 Debt Service Fund 47,719.84 3.36 3.36 173,863.01 221,582.85
4/1/2010 Debt Service Fund 47,719.84 3.72 3.72 173,866.73 221,586.57
4/20/2010 Revenue Fund 32,151.03 79,870.87 173,866.73 253,737.60
5/3/2010 Debt Service Fund 79,870.87 3.60 3.60 173,870.33 253,741.20
5/20/2010 Revenue Fund 7,550.45 87,421.32 173,870.33 261,291.65
6/1/2010 Debt Service Fund 87,421.32 3.72 3.72 173,874.05 261,295.37
6/2/2010 Revenue Fund 87,421.82 (0.50) 173,874.05 173,873.55
6/11/2010 Revenue Fund 0.50 - 173,874.05 173,874.05
6/11/2010 Revenue Fund 87,421.32 87,421.32 - 173,874.05 173,874.05
6/11/2010 Debt Service Fund 87,421.32 - 87,421.32 261,295.37 261,295.37
7/1/2010 Debt Service Fund 77,297.50 - 77,293.50 4.00 184,001.87 184,001.87
7/1/2010 Debt Service Fund 184,001.87 - 184,001.87 - -
Totals 609,950.00 609,985.24 957,162.96 338,587.91 338,587.91 35.24
Cash Out Less Cash In: 35.24
Investment Receipts minus Purchases: -
5/4/2011 -12- Gilmore&Bell,P.C.
MN M MI I I MI • I • N M NM I MI NM M I
City of Salina,Kansas
General Obligation Internal Improvement Bonds
Series 2008-B
ACCOUNT NO.5: Debt Service Funds-Bond Year Ending 7.1.2010
Arbitrage Rebate Computation I Investment Yield
Future Present
Net Value Future Value Present
Investment Factor @ Value to Number Factor @ Value to
Date Activity 4.361287% 12/1/2010 of Days 0.020035% 7/1/2009
7/1/2009 (154,595.08) 1.0630274 (164,338.81) 510 1.0000000 (154,595.08)
8/18/2009 - 1.0570565 - 463 0.9999738 -
9/1/2009 - 1.0554109 - 450 0.9999666 -
9/14/2009 - 1.0537679 - 437 0.9999594 -
10/1/2009 - 1.0516232 - 420 0.9999499 -
10/13/2009 - 1.0501119 - 408 0.9999432 -
11/2/2009 - 1.0477234 - 389 0.9999327 -
12/1/2009 - 1.0440884 - 360 0.9999165 -
12/7/2009 - 1.0433379 - 354 0.9999132 -
12/8/2009 - 1.0432129 - 353 0.9999126 -
12/8/2009 (96,545.23) 1.0432129 (100,717.23) 353 0.9999126 (96,536.80)
1/4/2010 77,297.50 1.0399673 80,386.87 327 0.9998982 77,289.63
2/1/2010 - 1.0366076 - 300 0.9998831 -
2/16/2010 - 1.0347458 - 285 0.9998748 -
3/1/2010 - 1.0328873 - 270 0.9998665 -
4/1/2010 - 1.0291804 - 240 0.9998498 -
4/20/2010 - 1.0268396 - 221 0.9998392 -
5/3/2010 - 1.0252410 - 208 0.9998320 -
5/20/2010 - 1.0231544 - 191 0.9998225 -
6/1/2010 - 1.0218064 - 180 0.9998164 -
6/2/2010 - 1.0216840 - 179 0.9998158 -
6/11/2010 - 1.0205826 - 170 0.9998108 -
6/11/2010 - 1.0205826 - 170 0.9998108 -
6/11/2010 (87,421.32) 1.0205826 (89,220.68) 170 0.9998108 (87,404.78)
7/1/2010 77,297.50 1.0181393 78,699.62 150 0.9997997 77,282.02
7/1/2010 184,001.87 1.0181393 187,339.53 150 0.9997997 183,965.01
35.24 (7,850.68) (0.00)
5/4/2011 -13- Gilmore&Bell,P.C.
MIN MIN INN NM MN ION MIN MIN ION
City of Salina, Kansas
General Obligation Internal Improvement Bonds
Series 2008-B
ACCOUNT T \O. 5: Debt Service Funds- Bond Year Ending 7.1.2010
Arbitrage Rebate Computation I Investment Yield
Future Present
Net Value Future Value Present
Investment Factor @ Value to Number Factor @ Value to
Date Activity 4.361287% 12/1/2010 of Days 0.020035% 7/1/2009
Summary of: Debt Service Funds-Bond Year Ending 7.1.2010
Total bond-year debt service: 154,595.00
Minimum balance during bond year: 154,595.08
Less 1/12 of total bond-year debt service (12,882.92)
Total surplus over reasonable carryover amount $141,712.16
Tax-exempt portion of surplus 100.00% 141,712.16
Net arbitrage rebate=computed rebate x(tax-exempt surplus/average invested balance)
Arbitrage Rebate Amount: $ (6,324.97)
Total Investment Earnings: 35.24
Investment Yield: 0.0200%
Average Amount Invested: $ 175,896
Total Time Invested: 1.00 years
5/4/2011 -19- Gilmore&Bell,P.C.
NM MN NM M I N MN M ME M MI MI N
City of Salina, Kansas
General Obligation Internal Improvement Bonds
Series 2008-B
COMPUTATION CREDITS AND ADJUSTMENTS
Arbitrage Rebate Computation J
Future
Value Future
Factor @ Value to Number
Date Description Amount 4.361287% 12/1/2010 of Days
7/1/2009 Computation Credit (1,490.00) 1.0630274 (1,583.91) 510
7/1/2010 Computation Credit (1,500.00) 1.0181393 (1,527.21) 150
(2,990.00)
Total Adjustments: $ (3,111.12)
5/4/2011 -15- Gilmore&Bell,P.C.
MI MN MI NM N IM E INIM NM = MN MI NM NM M
City of Salina, Kansas
General Obligation Internal Improvement Bonds
Series 2008-B
ANALYSIS OF SINKING FUNDS
I. Analysis of Account Balances(Excluding Purpose Investments)&Reasonable Carryover Amount
Bond Year Ended: 7/1/2009
Revenue Fund Debt Service Redemption Total
Fund Fund Bond Year
Acct. Balance @ COB on 6/30/2009 $ - $ 238,763.39 $ -
Cash in/(Cash out) 7/1/2009 - (84,168.31) -
Acct.Balance @ COB on 7/1/2009 $ - $ 154,595.08 $ - $ 154,595.08
Minimum Sinking Fund Balance during Bond Year $ 154,595.08
Bond Debt Service:
Debt Service Payment 7/1/2009 - 84,168.31 -
Total Bond Year Debt Service $ - $ 84,168.31 $ - $ 84,168.31
Reasonable Carryover Amount(one-twelfth bond year debt service) $ 7,014.03
Excess Sinking Fund Balance $ 147,581.05
Sinking Funds Depleted,Except for a Reasonable Carryover Amount? No
5/4/2011 -16- Gilmore&Bell,P.C.
M NM NM I I NM MI = B = IMIN MI NM MI NM NM MI I
City of Salina, Kansas
General Obligation Internal Improvement Bonds
Series 2008-B
ANALYSIS OF SINKING FUNDS
'Bond Year Ended: 7/1/2010 1
Revenue Fund Debt Service Redemption Total
Fund Fund Bond Year
Acct. Balance @ COB on 12/31/2009 $ - $ 251,148.41 $ -
Cash in/(Cash out) 1/1/2010 - 4.96 -
Cash in/(Cash out) 1/1/2010 - (77,297.50) -
Acct.Balance @ COB on 1/1/2010 $ - $ 173,855.87 $ - $ 173,855.87
Acct. Balance @ COB on 6/30/2010 $ - $ 261,295.37 $ -
Cash in/(Cash out) 7/1/2010 - (77,297.50) -
Acct.Balance @ COB on 7/1/2010 $ - $ 183,997.87 $ - $ 183,997.87
Minimum Sinking Fund Balance during Bond Year $ 154,595.08 *
Bond Debt Service:
Debt Service Payment 1/1/2010 $ - $ 77,297.50 $ -
Debt Service Payment 7/1/2010 - 77,297.50 -
Total Bond Year Debt Service $ - $ 154,595.00 $ - $ 154,595.00
Reasonable Carryover Amount(one-twelfth bond year debt service) $ 12,882.92
Excess Sinking Fund Balance $ 141,712.16
Sinking Funds Depleted,Except for a Reasonable Carryover Amount? No
*Minimum balance occurred on 7/2/2009
5/4/2011 -17- Gilmore&Bell,P.C.